Do trade organizations create value?

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I spent the better part of this week in Oakland, CA at a logistics conference on behalf of a client. It was a three day event, bookended by two long travel days), and had numerous very well prepared presentations.

There were numerous companies and trade organizations represented and a lot of work and information was shared. What became apparent to me after the first day was that a lot of people were spending a lot of time and effort but were delivering very little results or value.

The conference dealt with cold chain logistics, which is essentially monitoring and certifying shipments worldwide of products that must be maintained at specific temperatures. There are numerous federal agencies monitoring movement of these as well as hazardous shipments, but there are very few standards documented as to how to meet the guidelines.

One trade group had been working for three years to document best practices for packaging, shipping, storing and monitoring these critical shipments. The results of three years worth of work was an incomplete set of guidelines, for companies to look at and decide if they wanted to use them.

There are very few published standards or even audits for things like pharmaceuticals and biomedical products being shipped. The FDA will fine a manufacturer for violations of label temperature requirements but there is no real monitoring format. They leave it up to the manufacturers to monitor their shipments and report excursions, unless they happen to trip over an obvious violation.

The issue here is the manufactures create value through their core business, which is research and development of pharmaceutical products. I’m absolutely certain their manufacturing processes are closely monitored and are state of the art. All that is left to chance however when a product leaves the door.

The shippers use whatever packaging the manufacturer recommends. If the package is verified to maintain 0 to 8 degree Celsius for 96 hours, they make every effort to deliver the product within 96 hours. The shipping process however is not within anyone’s control. The package can be bumped off a flight because the dry ice quota has been exceeded, it can be held in customs, delayed die to equipment failures, left on a tarmac or in an uncontrolled warehouse. There is little ownership of the process once the product leaves the manufacturer, and little or no monitoring or escalation of exceptions.

It just appeared to me the whole industry is focused on providing pockets of information but not focused on how to create value.

Better bottom line results start and end at the top

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I've been saying that accountability is absolutely necessay for better bottom line results. I've also been preaching that accountability starts at the top. I ran accross an article written by a collegue that says essentially the same thing. It's nice to see some support in this area.

 Follow the link to the article. 

 http://www.leadershiparticles.net/Article/The-ACCOUNTABILITY-Challenge-for-Today-s-Business-Management/816

What’s your job satisfaction rating?

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There has been a lot written about employee engagement and job satisfaction. What you never see discussed is the owner or CEO’s level of satisfaction.

It must be assumed that because he or she is on top of the pile everything is fine. Why wouldn’t they be satisfied?

Having sat in that chair myself for many years burnout, stress, loss of enthusiasm, fatigue, are all very real issues facing the top management team.

Facing the same issues everyday with no quick solutions, and fighting the same fires takes a huge toll on anyone. The top people however have little or no outlet to voice their frustration. Can you imagine a CEO or owner telling an employee, “you think you have it bad listen to all of my problems”?  There would probably be a mass exodus.

Running an organization is tough enough when you are charged, enthusiastic, and optimistic. When times are tough the job gets much harder.

The questions is what do you do about it? How do you handle it?

Based on my personal experience and the information I’ve gathered over the years from others in my position, the first step is to acknowledge you have issues. This may sound strange but too many leaders refuse to acknowledge their problems. It’s as if they think if I admit it’s there I need to deal with it, if I ignore it maybe it will go away. It doesn’t go away of course and it adds to the stress level.

The second step after acknowledgement is dealing with the issues effectively. I’m amazed at the commonality of problems I see, as I get involved with various businesses. In many cases the solutions are known, but the decision to execute isn’t made. It’s the devil you know vs. the devil you don’t thought process.

Lastly get help. It’s always easier to get help on your own terms before someone forces you to get it. Too often I’ve seen CEO’s and owners wait until a lender or the board of directors forces help on them and it creates a situation that is difficult for the CEO and the coach. Recognizing you need help is not a sign of failure. It’s a sign of logic and maturity. Today’s businesses and markets are complex, everyone needs help from time to time. Only the wise get it early.

America is in the midst of a leadership crisis.

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The daily news bombards us with stories about major corporations failing, government spending spinning out of control, and political and corporate leaders marching off to jail.

Interestingly, this leadership vacuum exists only at the higher levels of government and industry. It doesn’t exist in small and mid-size businesses.

I know that’s a fact because the owners, CEOs, and senior executives of these businesses tell me so. For over forty years I’ve worked as a manager, coach, and consultant with hundreds of executives. Not one has ever said to me, “This company is not doing as well as it should because of my lack of leadership skills.”

Who’s to blame for their company’s problems? It’s they. Over and over again I’m told, “They don’t care; they didn’t do it right; they don’t get it.”

I’ve never understood why these executives don’t just fire “they” and hire somebody else. Come to think of it, I bet many of them have tried that, but somehow they keeps sneaking back on the payroll.

Take an objective look at your leadership skills.

Of course, the above paragraphs are meant to be tongue-in-cheek humor. It’s just my way of saying that our natural tendency is to blame others. But as a leader in business, you must objectively assess your own leadership skills.

All companies have problems. In order to solve your company’s problems, you’ll need to understand and change the leadership style that got you into trouble in the first place. Start by looking for areas where you personally can improve. Until you change, not much else will. Before you can lead others effectively, you must first be able to lead yourself.

Over the course of my career, I have known literally hundreds of executives. I can’t think of one of them, myself included, who could not benefit from some level of on-going leadership evaluation, coaching, and development.

Yet many executives, especially owners and CEOs of small businesses, find it hard to acknowledge that they have room for growth. They’re reluctant to ask a coach or someone else for help. And because they’re top dog in their company, they do only what they want to do rather than what they need to do.

Take an honest look inside your organization. How many of these issues are present?

• Excessive meetings with no agenda and no results
• Consensus-driven decision making (CYA for all us older folks)
• Lack of personal accountability
• Poor communication between entities
• Reluctance to terminate poor performers
• Misaligned and uncoordinated efforts (silo effect)
• Personality conflicts and power struggles
• Apathetic and unmotivated employees
• Inconsistent results
• Poor time management
• Reactive rather than proactive effort
• Micro-management
• Declining sales and / or market share
• Lack of teamwork
• Duplication of effort
• High employee turnover
• Substandard quality
• Numerous unresolved issues and postponed decisions

You may not want to acknowledge this, but to some degree all of these issues can be attributed to ineffective leadership.

Lead by example.

Your commitment to excellence, integrity, fairness, and open communication will be visible to people in your company. It will inspire them to rise to the performance level you exhibit.

Notice that I didn’t say “to the performance level you expect.” Expectations are mere words. When people respond to expectations, it’s often out of a sense of duty, a desire to please, or the fear of punishment.

Leadership, on the other hand, entails action. When you act as a leader, people will want to follow you to be where the action is. Your example will motivate them to grow and achieve.

Once you’ve developed your plan and communicated your vision, there will be a short honeymoon period. But soon people will be looking to you for results. Will there be real change, or will it be back to business as usual?

Simply wanting your vision to be realized doesn’t work. You need to take the lead and make it happen. When you walk the talk, people will follow. Develop a vision you believe in. Live it, breath it, take responsibility for it, and generate enthusiasm for it. People will respond.

Improved leadership processes required for strategy execution !

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As the owner, CEO or senior executive of a business, you share many things in common with the coaches of professional sports teams. Can you imagine the head coach of a team – say in the National Football League – going into a game without a game plan? Of course not! That coach would soon be out of work. Coaches literally spend hundreds hours preparing for a 60-minute event.

A good coach not only develops and documents a strategy to win; he makes sure it’s understood by every player on the team. Every successful coach knows that a plan is essential for success.

But every successful coach also knows that a plan alone is not sufficient for success. The best plan in the world is useless if it’s not implemented. When the whistle blows to start the game, the players can’t simply stand on the sidelines and talk about what a great plan they have. They must take the field and play to win.

A coach that doesn’t learn from failures and make adjustments so that his team consistently wins soon finds out what the letters NFL really mean: Not For Long.
Why should you view your business as any different?

Your role as an executive is to execute!

It never ceases to amaze me – I’ll work with a company for weeks to develop a comprehensive strategic plan, and then nothing! Nada! It’s as if management says, “OK, now that we’ve finished the plan, we can check that off our list and get back to business as usual.”

They know they have issues that need to be changed. They pay good money to hire outside assistance to facilitate a planning process. They complete their plan. Then they proceed to ignore it!

Why? Is it fear of change? Fear of making a mistake? Fear of confronting people? A lack of confidence in themselves and/or their staff? Probably it’s a mixture of some or all of these.

For most executives, implementation is harder than planning. It takes determination and courage to actually do what you say you want to do. Implementation requires commitment, accountability, and change. That’s where the majority of companies fail.

Bold actions require bold leadership.

The absence of a decision is a de facto decision. That goes for all aspects of business planning and execution – from acknowledging problems to resolving them.

Tolerating poor personal performance from a staff member is choosing mediocrity. It lowers the bar for the entire staff.

Failing to take action about substandard quality is a decision about quality. It sends a message about core values to everyone in the organization.

It’s wise to gather the facts before making decisions. But postponing action “until there’s a better time” or “until there’s more data” is too often a cover-up for plain old fear to act.

Want to diminish focus and credibility in your organization? Here’s a sure-fire way: Develop a plan, communicate it to your people, and then fail to execute it.

When you fail to act on your plans, you undermine motivation, enthusiasm, pride, respect, commitment, and productivity. Yet 90 percent of American companies do just that, as shown by the chart below.

Paul R. Niven, The Balanced Scorecard (New Jersey: John Wiley & Sons, 2006).

Talk about an alarming statistic! If only 10 percent of American companies take the necessary actions to implement their plans, no wonder we’re losing our edge.

Many executives confuse busyness with effectiveness. They think they’re accomplishing a lot when people come to them all day long with questions and problems. It makes them feel important. They like being the center of the storm.

But executives who react instead of act accomplish little. They don’t produce progress because they’re concentrating on the minutia and ignoring the momentous. They’re playing around instead of playing to win.

But remember that your employees are watching your actions. They’ll respond to your leadership based on how you execute your plan.

To help you maintain your focus on decisive action, here are four principles for you to periodically review:

• If the status quo isn’t working, change it.
• If you don’t make a decision, you’re making a decision.
• If you don’t like making tough decisions, you’re not alone. But winners do it anyway.
• If you want to exercise real leadership, you must act.

You have to “walk the talk” every single day to attain excellence in any organization. You must take the field and play to win!

Action without vision is a nightmare. Vision without action is a daydream.

Japanese proverb

Lack of a better sales process to blame for most business failures?

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We read about businesses failing every day in the newspaper. In the articles documenting the latest list there are always reasons given for the failure, the economy is usually the number one cause.

I’d like to offer a different and less popular opinion. In most cases I’ve seen the reason your business fails is you!

Sound harsh? My experience as a business coach has proven this to be correct.

A great example of this appeared recently in the Tupelo newspaper. An article appeared with a list of restaurants that failed in 2009. The reasons given by the owners were “poor timing and the economy”. Tupelo being a smaller city my wife and I had visited all three of the establishments named over the course of the year so I was in an excellent position to review the article. All three restaurants had three things in common, high prices, poor service and mediocre food.

One in particular, a sandwich shop, that stands out in my mind had an ordering process that involved standing in line to order, and then moving to another station and standing in line to repeat your order and pay for it. Total wait for an expensive and really poor take out sandwich was over 45 minutes. Now this particular shop was located in a strip mall that was exactly four doors down from a Mexican restaurant that is not only surviving it’s thriving. Apparently the economy issues haven’t moved that far down yet.

The point is it’s easy to assign blame but it the long run it really doesn’t matter who’s to blame, your business has failed and you are left with the consequences.

Small and mid-sized businesses are critical to the national economy. A newsletter from the Small Business Administration dated September 2008 provides the following interesting figures about U. S. small businesses. It says the firms with fewer than 500 employees –

• Represent 99.7% of all firms with employees.
• Employ about half of private sector employees.
• Create between 60% and 80% of all new jobs during the last decade.
• Generate more than half of non-farm gross domestic product.
• Employ 40% of our nation’s scientists, engineers, and computer workers.

As important as these firms are to the overall economy all too often they are launched and operated without the resources needed to succeed.

I tell my clients to “find a need and sell the outcome”. Another way of saying it is find a customer base, determine their wants and needs and supply a cost effective solution. Many businesses start with the opposite strategy, develop a product and look for customers. Regardless of the movie line “if you build it, they won’t necessarily come”.

Most business failures occur for several reasons:

• Lack of a clear plan / vision/ direction.
• Lack of execution by management.
• Insufficient capital, or due to lack of a plan wasting the capital they do have.
• They don’t ask for help until it’s too late.
• They don’t understand their markets, their customers, or their competition.

There are other reasons of course, but strong well-run companies are able to survive downturns, the economic swings weed out the weak and poorly conceived.

Accountability is a function of leadership :

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I recently published a book entitled “Bottom Line Focus”. It’s subtitle is, “18 proven steps to take your company from surviving to thriving”. Wow, who wouldn’t want to do that right? I mean if you’re a business owner or CEO it’s a “no-brainer”. Heck if even half of the stuff in the book is of value it’s still a value.

What’s in it? Is it some type of new age magic formula?

The truth is the “gimmick” of my book is there is no gimmick. The things in the book work, but my 35 plus years of experience has proven that the majority of executives simply will not or cannot do the things that are necessary to succeed.

We are accustomed to having the “fast and easy” marketed to us, whether in the form of a pill, a new diet, or a new business concept.

I used to be amazed at the things I saw going on in companies, now I’ve come to expect it. Executives and managers are, all too frequently, waiting for something to happen to alleviate the necessity of taking action and being accountable for that action.

As I get more “mature”, meaning older, I am able to reflect on things based on experience and historical data. What works and what doesn’t. And what it comes down to is there is no silver bullet. Leaders must lead and be accountable if they expect those they are trying to lead to be accountable.

That brings us to the title, the A word, accountability.

I said in the preface of my book the real crisis in America today is a lack of leadership. Take that one step further and it’s also a lack of accountability. Not just in business but in all phases of life.

Depending on which poll you look at roughly 68% of Americans disapprove of the job congress is doing. Another poll states that 83% of Americans favor term limits for congress. I’d have to say these numbers represent a clear message, 1st we are unhappy with our congressional leaders, and 2nd we don’t want “career politicians”.

The accountability part comes in when we realize that only 35% of the adult population are regular voters and 20% are intermittent voters. If those numbers are correct 45% of us don’t bother at all.

If we really favor term limits we have the power to impose them at any time. We simply vote out any incumbent that is in his or her second term. No constitutional amendment, no legal battle, nothing we just use our power to vote our choice.

But we don’t. We will not accept the accountability for our dissatisfaction, we just complain about it.

The same is true in many of the businesses I am familiar with. The management team in many cases knows what to do, they just don’t do it. There are many reasons why they don’t execute, but the bottom line is they don’t. I can literally site hundreds of specific examples of this over nearly any industry.

Accountability starts and ends with senior management. If they hold themselves and others accountable and set the example it will not happen.

Until we accept the fact that everything in life is a decision, even the failure to make a decision, and we are accountable for our action, or inaction, we will not make significant progress in any aspect of our lives.

“A person may cause evil to others not only by his actions but by his inaction, and in either case he is justly accountable to them for injury.”?
John Stuart Mill

Bottom Line Book available on Amazon

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My first book, “Bottom Line Focus” has just been added to Amazon. It should be available from them in about a week. It took me well over a year to complete and it’s something I’ve wanted to do for years. I have experienced much over my career and I really feel strongly that many of today’s business issues are common among businesses and industries. I see the same things over and over, if I can help a company succeed and save jobs it really will have been all worth it.

My thoughts are we as a society are losing our leadership edge. There certainly aren’t many positive examples being shown us on a daily basis, but it doesn’t change the fact that leadership starts with each of us. Before you can lead others you must effectively lead yourself. Accountability and results start with each of us.