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Business Analyst Scott Galloway on The Folly of Twitter’s Part-Time CEO Jack Dorsey

Business Analyst Scott Galloway on Folly of Twitter's Part-Time CEO Jack Dorsey

At a keynote address at Amazon Professional Sellers’ Summit NYC 2017, the fast-talking, straight-faced New York University-academic and business analyst Scott Galloway addressed the folly of Twitter’s board of directors and part-time CEO Jack Dorsey:

I think the board of Twitter is negligent and should be removed by shareholders … To say to somebody she is better than you at 25 hours a week than you are at 50 hours a week is negligent … There is no way that cannot create negative morale in a management team and send absolutely the wrong signal at everybody … [Being a CEO] is not a part-time job, especially when thousands of people are relying on you for their livelihood and tens of thousands of people have decided to put their hard-earned money into your stock and you are literally competing in what is probably the highest stakes game in history … and that is who wants custody of the consumer in social media and yet they have a part-time CEO … that is just negligent and outrageous … if someone is talented … if someone is really impressive … and that person happens to be in their 30s and wear a beard and a turtleneck we think “Oh, it’s Jesus Christ risen again” … “It’s Steve Jobs” … we have this idolatry of innovators that is really unhealthy and unrealistic and damaging to basic common business sense and business maturity around shareholder value.

'The Four: The Hidden DNA' by Scott Galloway (ISBN 0735213658) Part of Scott Galloway’s appeal is his deadpan delivery of peppery one-liners.

Legendary investor Bill Miller has criticized Twitter on this topic: “It is insane to have Jack Dorsey be a part-time CEO at a company with the issues that Twitter has. … If a part-time CEO makes sense, then so does a part-time CFO, part-time chief technology officer. That just makes no sense whatsoever.”

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Take Care of Business by Posting Sincere Quarterly Results While Building Long-term Value

Balanced Shareholder Value Technological progress over the last decade—especially in communications—has accelerated the expansion of commerce, the creation of wealth, and the pace of living.

Consider a few statistics. There are now 15,000 communications service providers operating worldwide; just one decade ago, there were less than 1,000. Last year, enough fiber optic cable was laid to encircle the earth some 400 times. Internet traffic is doubling every 100 days. Nearly 350 million people are already online worldwide with 100 million more expected to join them in 2001. Buying and selling on the Internet, or ecommerce, has reached $700 billion worldwide—and is expected to approach $7 trillion in five years.

Technology and Growth

The technology industry has played a central role in contributing to this growth. Technology company is creating the systems and technologies that will make the Internet mobile and able to do things we can only dream of today. With the phenomenal growth of the Internet, the penetration of cable television and the rise of wireless communications, we live in a world where fact-based information, tailored to our individual tastes, is available 24/7 wherever we are. That is the bright side. On the darker side, the same technology is also delivering us rumors, innuendo, and blatant misinformation.

Pressures of Instant Information on Stockholders With our robust economy, expectations for a better life have never been higher. However, in many cases, high expectations give way to instant gratification and outright greed. Overnight wealth is now part of pop culture. The objective of corporations is to create wealth for shareowners by delivering products and services that customers find of value. You cannot do that if employees are in a free-for-all to undermine their colleagues. Creating value is a far different game than scheming to be the last person standing. And it requires far different behavior to succeed.

In any institution, you can find people who are out for personal gain at the expense of the enterprise. However, the lack of integrity catches up with them. It always does. At the same time, the business world does have its problems, real as well as perceived, including events that raise questions about corporate behavior.

Accidents happen. The Exxon Valdez oil spill was an accident. Manufacturing errors happen. That’s why Bridgestone and Ford are in the headlines today. And sabotage happens. How companies respond to these crises determines the size and healing time of the blemish on their reputations. Companies, like Johnson & Johnson, that are proactive and completely open with the public, recover fast.

Corporate reputations always seem to be under scrutiny. Corporations owe something to their workers, the communities in which they operate, shareowners, and other constituencies. Shortly after I joined technology company, the company held its annual Global Days of Caring—a worldwide employee volunteer effort in which tens of thousands of technology company people participate in worthwhile community projects, ranging from cleaning up parks, beaches and playgrounds, to assisting at childcare, senior citizen centers and homeless shelters. Making a difference in communities has become a central part of technology company’s culture.

Pressures of Instant Information on Stockholders

But meeting the needs of shareowners, employees, and the community is increasingly difficult, because companies face new pressures that are created by the combination of instant information and the growing notion of instant gratification by investors.

A few years ago, business could plan and execute for the long term. Sometimes that meant making sacrifices in the short term that retarded bottom-line growth for a quarter or two. But such sacrifices had the potential to create breakthroughs in technology that could change an industry, the way my company did with the invention of the transistor, lasers, and fiber optics—technologies that spawned new industries.

If a company was strong and had a reputation for making successful transitions and delivering value to customers, investors tended to show patience because they understood that efforts were being make for the long-term health of the business.

How to Beat Wall Street Reliably Today, instead of the idea of who will win in the long term, the market is focused on who’s winning this quarter, who’s winning today. Business has become a spectator sport, a high-stakes game that is played out daily by people who watch corporate box scores scroll across their PCs and television sets, by people who place instant online bets that are based on breaking news, rumors, or the body language of a CEO on CNBC’s Squawk Box—all designed to feed into Wall Street, which has become a casino as millions of new players ante up for the next deal.

Business journalists and financial analysts have the power to cut a company’s market value in half with a single negative comment, or instantly drive its value up with a glowing report.

With the constant bombardment of gossip, rumor, and sometimes deliberately misleading information, it has become increasingly difficult to determine what legitimate business news is.

The temptation to manipulate the system is as strong as the opportunity to do so. At Technology company technologies, we have regular contact with many financial analysts. In addition, the people we deal with are trying to do the right things. But they are under severe pressure in a world that’s been sped up and turned upside down. Their reputations have been built on solid analysis of income statements and balance sheets. That’s how value used to be determined. Now Internet upstarts with small revenue streams and losses instead of earnings can have huge market valuations. How do you analyze these companies and make recommendations to investors?

How to Beat the Street Reliably

'Investor Relations For the Emerging Company' by Ralph Rieves (ISBN 0230341969) Compounding the difficulty is the sheer speed of the market rollercoaster. One analyst recently said, “We live 12-week lives,” living quarter to quarter with the companies he is covering. That’s not healthy. That 12-week life involves predicting an earnings number with factors such as a company’s strength, the market’s strength, as well as a company’s own guidance on what it expects to deliver. They sit on the sidelines, watching and waiting. Meanwhile, companies are on the field competing—driving their businesses toward the finish line. They’re under phenomenal pressure to perform well and cross the finish line with increasingly higher results. It’s not enough to deliver what’s expected. The system rewards companies who under-promise and over-deliver. That’s the only way to consistently beat the Street’s expectations.

Not only are there expectations of a specific earnings number, there are expectations of a precision in delivering the number. In effect, the system is demanding perfect execution in every 12-week period. We have arrived at the age of instant analysis and sound bites that can cause major tremors in the market.

This is the reality companies face today as they work to serve their customers and build value for their owners clearly pressures are great to deliver strong quarterly performance—to “beat the Street”—and to do it consistently to keep the stock price rising.

Stock price was always the key measure of a company’s long-term health. But today stocks have become a strategic weapon. Stocks are the new currency for acquisitions of companies, technologies, and employees to bolster a firm’s competitive capabilities. Your stock price puts you in a position to be the parent or the acquired. Also, the value of a stock has a major impact on a company’s ability to attract and retain employees. Upstart Internet companies that are preparing to go public can be a huge temptation. Much is riding on quarterly performance. In striving not to disappoint Wall Street, companies are tempted to make short-term decisions that could be harmful in the long term. Worse, some companies are under such heavy pressure in the competition for investor dollars that they feel compelled to overstate their market performance and exaggerate their potential. So they provide a set of lenses for the fortunetellers. Sometimes it’s a microscope. Sometimes it’s a telescope. And very often it’s a kaleidoscope. Politicians call it “spin doctoring.” And some businesses have honed it into an art form.

'Using Investor Relations to Maximize Equity Valuation' by Thomas Ryan (ISBN 047167852X) If it works, it’s easier to do it a second time and a third time, until it becomes an addictive drug. Many companies have been on drugs. It’s time to get off them and begin managing their businesses, instead of managing their stock price. It’s a lot easier to cling to your values when you’re riding high. But the true test of a company’s character comes when it stumbles.

I believe that it’s the job of senior corporate leaders to step up to this challenge—to change the game by striking the right balance between the long- and short-term decisions that produce lasting health for companies. Business leaders must refuse to be drawn into shortsighted decisions that are driven by the media frenzy. They must resist being dragged to center-stage in the spectator sport that business has become. Business leaders have been entrusted to build strong companies by growing real value through innovating and delivering products that change the way people live and work. Instead of concentrating on what’s needed to make analysts happy, leaders should be focused of what they can do to serve their customers better. In the long-term that could mean facing up to the prospect of short-term pain if it’s necessary to sustain long-term gain.

Creating Balanced Shareholder Value Over the Long Term

Creating Balanced Shareholder Value Over the Long Term The system may be out of control, but the future is not. Value is not created overnight or over a 12-week period. Value comes from creating products and services that meet market needs. That’s not a short-term proposition. Companies experience vicissitudes. The fast pace of today’s marketplace requires constant adjustments and transitions. Often, companies that go through those transitions will pay the price for a quarter or two. But if they perform well, they come back quickly because of the bandwagon mentality of Wall Street’s fortunetellers.

Every year Fortune magazine compiles a list of America’s most admired companies. The criteria for the list range from long-term investment value to social responsibility. They are also viewed as the best places to work. These companies are taking care of business and meeting the needs of their shareowners, their customers, and their employees. And doing so has paid off. The top 10 percent of Fortune‘s list of most admired companies did twice as well in the stock market as the bottom 10 percent. That’s encouraging, because it says that in the end, good companies will always justify their value as long as they do the right things the right way.

Assess how well you balance short-term expediency and long-term growth.

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Participative Leadership to Reduce Resistance to Change

Participative Leadership to Reduce Resistance to Change Resistance to change is observed by many as their biggest problem today. Why? Because change is constant, and yet most people get stuck. People resist changes done to them, but they develop a sense of ownership on the ideas they generate. So, I share a simple approach to reducing resistance to change by generating participative involvement and team support for new initiatives. Many teams and organizations tend to operate like the team below:

  • The person in front symbolizes leadership or management—anyone focused forward. Leaders get insulated by their rope to the bumps and thumps of many realities of the journey. They work hard to pull the organization ahead. Their intentions are positive.
  • The people in back represent frontline employees and supervisors who can’t see far ahead and feel every bump in the road. They push but have to trust the leadership to steer. They have no “big picture” of where they (or the wagon) are headed, but do what is expected of them. They lack perception and vision. Intentions are positive.
  • The body of the wagon is well made and sturdy, much like the basic core of any organization. It will do the job for which it was designed. Its nature makes changing direction quite difficult, but it works like it always has. We find that identifying and celebrating early adopters of the behaviors a company wants to instill can create positive infectivity.
  • The Square Wheels represent the traditions, the way things have always been done, systems and techniques to respond to quality and service initiatives, or other relevant issues to the group. They may also represent interdepartmental conflicts. They increase costs of doing business and are inefficient and ineffective.
  • The Round Wheels represent new ideas for innovation or improvement, coming from within the organization. Top management makes public the factors on which it will judge the team’s performance and how that evaluation fits into the company’s regular appraisal process.
  • Customers generally ride on the wagon, being aware of the thumps and bumps of the journey forward but often unaware of the specific causes. Often, they encounter policies and procedures that are not customer oriented. Occasionally, they may feel like they are under the wheels!

Companies make the mistake of worrying mostly about the time it will take to implement change programs. They assume that the longer an proposal carries on, the more likely it is to fail.

Nothing Happens Without a Readiness to Change

Nothing Happens Without a Readiness to Change A great deal has been said about middle managers who want to block change. We find that most middle managers are prepared to support change efforts even if doing so involves additional work and uncertainty and puts their jobs at risk.

On the whole, the visions about the journey forward are difficult to communicate effectively to everyone, and changing direction is hard. Yet continued motivation is necessary to keep pushing forward, and people must trust the leadership to lead the way. After approaching for a long time, however, people in the back may lose interest in where the organization is going or needs to go and become resigned to the Square Wheels. The organization crashes along, and most know it. In the process, we exposed a provocative lens and language to help change managers better understand their mission and methods. When I share this illustration with people, I hear such comments as:

  • Communication between pullers and pushers is difficult. The process of exploring one’s communication styles, behavior and fundamental aims in life is a overwhelming task for most people.
  • Shared vision is crucial. It is very interesting to observe that the essential role of a leader when progressing a shared vision is one of unselfish motives.
  • It’s difficult to change direction. It suggests that the configuration established by cooperation is an effective way to accomplish our goals on a fast-paced world.
  • Teamwork, trust, motivation, and collaboration are needed. Leaders can help people throughout the organization expound systemic comprehensions.
  • Measuring progress is part of individual and team motivation. Progress that is observable tends to be explicit, teachable, autonomous, attachable, it also easy for challengers to reproduce.
  • Issues of cost, productivity and quality are always present. A shared vision is fundamental on the productivity of any business where a leader has so many individuals and groups to attend to in a transparent and selfless manner.
  • Progress is generally not about people—it is about systems and processes. Every organization creates and uses this information. The dispute is that few seem to essentially learn how to manage it, apply it, mature through it and use it successfully.
  • Poor systems are like bumps that demotivate those trying to move ahead. On the other hand, when regarded in systems terms immediate improvements often comprise very substantial long-term costs.
  • Ideas for improvement always exist already within the wagon. Those actions comforted employees that the organization would challenge the layoffs in a professional and humanitarian fashion.

Another reality is that the round wheels of today become the square wheels of tomorrow. Improvement is about continuous improvement, since change is a continuous event—you can’t complete a change initiative.

Probability of Leadership Change Management

Probability of Leadership Change Management There are four things that successful change leaders do well. The probability of change is related to four factors:

  1. The current level of discomfort with the way things are now. This is all about people feeling that things could be different. If they are not satisfied, they are likely to change. If something gets acknowledged as a Square Wheel and not working properly, a Round Wheel possibility likely exists for making an improvement.
  2. The attractiveness of the vision of the future. This one is all about motivation and teamwork. The view from the front of the wagon is different than the view from the back; and apprehending goals and expectations will reduce resistance to change. If the vision is engaging, it is attracting. Making the vision more attractive is straightforward.
  3. The person’s or group’s previous success with change. If the last time people tried to change they felt successful and rewarded, they will repeat the behavior. What gets rewarded gets repeated. But if the most recent attempt was met with criticism and negative comments, they likely won’t be interested in trying again. The same thing happens with team-based initiatives.
  4. The peer or workgroup support for the change. Obviously, if others are supportive, it puts positive peer pressure on an individual to change. But, sadly, most organizations have a tendency to add “mud” to the journey of most teams, bogging things down and making progress even harder for teams struggling forward. The mud can be the bureaucracy, politics, measurement systems that don’t support the goals and expectations—any form of glop that hampers people and clogs systems.

Successful change leaders embrace these tensions even though they make the challenge more complex. This meant nothing short of building new organizational capabilities based upon collaboration and client-first thinking, which not only meant developing new systems and processes but building a collective mindset that would make aspiring to being a one-company culture a reality.

Enlisting People in Change Initiatives

Enlisting People in Change Initiatives So what do we do? Well, let me suggest a couple of simple scenarios.

The first idea is this: Get out of the ditch and get up on the road. This is simpler than you might think. I ask people what things get in the way of making progress, let them brainstorm, perhaps even vent a little, then I ask if there are any incomparable Mud Managers out there. This reframe causes people to consider what others in the workplace are already doing differently and what underlies high performance in an environment where there are two feet of ditch for every foot of road. Invariably, people can generate ideas that are already proven to work. It is not about inventing new ways of doing things as much as it is about identifying ideas and then doing something differently. This increased managers’ understanding of business conditions and boosted employee engagement—and sales rose.

Where you can go from here is a bit surprising: Roll your wagon backwards! Because you have begun to generate a little partner support, you increase the likelihood of change. Now, you should work with the group to generate a list of possible Square Wheels—things that work but that do not work smoothly.

After playing with these themes and asking about “mud,” generate a list of possible issues to address: things that do not work smoothly. Set the stage for some possibility thinking. Get a long list, but resist the tendency to straightaway start fixing things. A week or so later, select one of the Square Wheels and generate some possible Round Wheels to try.

The Hard Aspects of Change Management

The Hard Aspects of Change Management Let your team do the thinking—you focus on maintaining the focus. Paint a picture of what will be different if a few Round Wheels are implemented. You are creating some uneasiness with the way things are now as people discuss the things that can be improved and suggest ideas that they could try to make things work more smoothly. Corporations will always require a hierarchy, but peer role models can successfully lead projects within a change initiative.

You create a higher likelihood of change because people become less comfortable with the way things are and create an alternative shared vision of the future. They build on some feelings of previous success and they work together, as a group, to make things better. Celebrating the reversal of a relapse can help desired behaviors regain momentum.

Participative leadership can reduce opposition to change. Managing change is tough, but part of the problem is that there is little agreement on what factors most influence transformation initiatives. Visionary leadership is often vital for change projects, but not always.

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What Should Not Be Done

What Should Not Be Done

If I have to conform, how can I create? How can I innovate, if I have to play it safe? How can I discover new ideas in what I am doing?

Many frustrated people are seeking more meaningful work. They are bright and motivated to high achievement. Executives must rescue these talented people by finding ways to amplify their intelligence and motivation. Many high performance rewards await executives wise enough to capitalize on the yearning to create and innovate.

Innovative ideas are often found in paths we have yet to explore, and these paths are often revealed to us by people who ask us questions or give us directions. Questions and directions can be given in the form of what should be done or what should not be done. The form can either catalyze or kill creativity and innovation in people.

Consider questions and directions framed with the intent of advocating what should be. They are markers to assure safety—usually financial or physical—conformity to protocols and rules, and pursuit of wants and desires. Directives or questions emanating from this intent come as “this is what should be done or be happening;” or “what is the correct procedure—what should be done here?”

While “safety” and “security” are crucial to organizational well-being, these words are bipolar to words like creativity and innovation. If you have to conform, how can you create? If you are preoccupied with safety, how can you set sail in uncharted waters to innovate? Many executives confound their people by demanding creativity and innovation through questions and directions aimed at what should be. Executives need not abandon the “should be” form of questioning or directing in order to pursue paths to innovation and creativity. Such an action would excise critical markers needed for survival. The advocacy of an executive should be how to balance safety and security with innovation and creativity. This balance is achieved by using an alternate form of giving directions and asking questions.

Now consider questions and directions originating from what should not be. These directives or questions usually assume the form: “This is what should not be done” or “This is what should not happen.” When executives ask me: “Are you suggesting that I use negative questioning or direction giving as a management style?” I respond: “What could be more positive than avoiding that which should not be, and how can you avoid that which should not be if you don’t know what to avoid?”

Making visible what should not be can demand calling into action our own talents for innovation and creativity. For example, suppose I discover that you have a background in natural science when you and I are in Queensland, Australia, on a walkabout. All of a sudden you say to me: “About 15 feet ahead on the side of our path is a Taipan. If you continue walking in your current direction, you will encounter something that should not be.”

By issuing this warning, you gain my deep appreciation, as I am not interested in sustaining the painful bite of a poisonous reptile. You may also see how fast I can run or how high I can jump. If I try to catch and sell it, you may see what kind of an entrepreneur I am. By telling me with truth and fact what should not be, you cause my creative talents to emerge.

By managing your situation with truth and fact in terms of what should not be as opposed to managing on the basis of what should you be, you catalyze the attributes of innovation and creativity. People are then free to find their own best wave, knowing that are guarded from consequences of operating on the basis of what should not be. They also become confident in your role as one who would forewarn them about things that should not be.

Why are many executive directives I (even commandments of Deity) given in the form of “thou shalt not?” I believe the wisdom of the ages is rooted in a preference for freedom of action and an incentive for innovation and creativity.

Foster creativity and innovation

As I have tested this belief in managing projects and people, it has strengthened my resolve to illuminate, with truth and fact, that which should not be as the way to unleash latent creativity and innovation in people.

Any parent of teenagers knows that making visible hazards, obstacles, and things that should not be, will produce an astonishing array of creative ways around these restrictions. The creativity catalyzed by fear of parental consequences, from traveling restricted roads, somehow adds to their “thrill of the chase” and fuels competitive drive. These reactions are what executives seek.

There are other benefits to this approach. We can more readily agree on what we are about. Specificity in what should be is rarely obvious. Most admonitions are closely akin to “motherhood” statements leaving too many “hard to interpret” generalizations or mysteries for implementation.

When the boss specifies what should not be, we will find it easier to correctly interpret the intent. Things that executives should not do are more specifically set than those things that should be.

You must state what should be in order to promote safety and conformity in your pursuits. But, hopefully, you will add admonitions for behaving on the basis of what should not be. If these are entrenched in truth and fact regarding what should not be, you will foster creativity and innovation in your people.

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Seven Principles for Meeting Deadlines

Seven Principles for Meeting Deadlines In meeting deadlines, top performers apply seven key principles. This change management is not intended simply to permit the company to endure a few more years—it is proposed to set the company on a path to greater success and thus virtuous jobs for those who remain.

Another is that a blindly optimistic self-explanatory style of deadlines might actually promote a reduction in effort as we might not try as hard if we believe our ability eliminates the need. For the following reasons, I consider this behavior neither compassionate nor moral.

Principle #1 for Meeting Deadlines: Schedules are Sacrosanct

Task teams express a reverence for “the schedule” as the single most important deadline management tool, even though people search for more colorful, personality-driven keys to victory. But it is precisely its implacability that makes a schedule so stable, incorruptible, and enforceable. Amendments to schedule can’t be made capriciously. Changes should be rare, even agonizing, since each adjustment threatens to compress the final stages. Schedules become impersonal enforcement tools, because they do not respond to appeal. The manager can say, “It’s not me—it’s the schedule that’s pushing us all, and we need to keep pace.”

Schedules are not dreamed up by distant executives who then hand them down to task teams, along with deadline dates. All long-term projects are guided by realistic, believable, timelines that benefit from the insight and input of those doing the work. Schedules codify the ambition and enable synergy.

Within each timeline, milestones are set—and celebrated as they are met. These mini-deadlines make the program more manageable, attainable, and comprehensible those who are focused on their part. When milestones are in jeopardy of not being met, alarm bells go off in the minds of project managers and team leaders. All are affected by slippage along the critical path. A milestone won’t be “bumped” unless, and until, the team knows why it is in jeopardy. Allowing more time won’t necessarily correct the process. Margins of time and budget are factored into each schedule and managed by the teams.

Principle #2 for Meeting Deadlines: Partnering

Deadlines involving major, long-term projects are met jointly; the distance between customer and those who serve are bridged in the interest of expediency. Leaders see that their races against time must be run in unison.

While companies discover many rewards in the closer relationships and find that the doors of communication, once opened, are difficult to close, their original motivation is often to save time. “Business as usual” won’t suffice under the conditions of a major deadline. Competitive companies need each other to win. Deadlines are often joint ventures, since few organizations can go it alone. Even global industrial leaders depend on the unstinting cooperation of customers and suppliers to bring their projects in on time. Conversely, much is expected of them. Reciprocation is possible by modifying billing and payment practices, or by waving long-standing bureaucratic requirements, or by re-routing time-consuming communication paths, or by modeling teams to reflect those of the partner. Customers and contractors like feeling part of the delivery process.

Principle #3 for Meeting Deadlines: Willingness to Accept Risk

Meeting Deadlines: Willingness to Accept Risk Deadlines involve risk. The risks inherent in these projects are not accepted by swashbucklers who revel in danger but by serious professionals who seek ways to reduce the risk—by preparing backup plans, brainstorming creative solutions, and even taking out insurance policies. The risk is accepted, then reduced, to improve the odds to succeed, to make a profit, or to reduce casualties. The willingness to take a chance defines an organization in ways a thousand ads cannot. Word gets around. Companies and individuals who take on risk, and prevail, develop reputations as giant killers.

Something in the nature of “risky” operations binds teammates together. The “sink or swim” mentality of great teams is responsible for innovations that bring their projects in on time. Participating in these deadlines is not simply another day at the office for those involved; these are adventures. Those who pass through the whitewater of a serous deadline can look back on the “nervous time” with a nostalgic pride. “Risk” creates common cause, even more than “reward.” Lackadaisical groups will suddenly become focused and serous once risk is introduced.

Principle #4 for Meeting Deadlines: Company Men and Women

Challenging deadlines are met most successfully by “company men and women” whose most obvious credential is tenure (average of 25 years of service). No one looks forward to retirement (in fact, they seem to dread the day), and all seem to thrive on the formidable tasks assigned to them. While those people are ambitious, success seems to be measured less by personal recognition and more by participation on a job well done. None of them are coy about their futures with the company. “I love it here,” and other expressions of affection and loyalty are heard frequently. Company men and women are usually portrayed as obstacles to bold, forward-thinking newcomers, but they are precisely the people you want tasked with a significant deadline. They are less likely to look on a project as a feather in their caps and more likely to factor in the long-term interests of the company and of the customer (which are complementary).

If you don’t have tried-and-true employees with years of service, entrust deadlines to employees who are sincerely interested in a career with the company. Team players who distinguish themselves by helping others are prime candidates, as are those who demonstrate a real concern for customer satisfaction. Managers must take an active role with a team of fresh faces and lead by example, in creating a sense of mission so compelling that the team will be carried in their wake.

Wise managers assume that peak performers are always being courted by the competition, and could, without proper attention, be gone in the blink of an eye.

Principle #5 for Meeting Deadlines: Family Outreach

The popular stereotype of an executive who sacrifices family for career is somewhat of a contradiction, because, clearly, business success is not sustainable without a strong emotional base. A hard-driving executive plagued by personal problems, distracted by divorce proceedings or custody battles, can’t focus on the job at hand—and may even exacerbate his or her situation by finding a comfort of sorts in alcohol or drugs.

The wise manager recognizes the importance of family and finds ways to involve the “other half” of the deadline team and to enlist their support in the pursuit of the deadline.

When George H. Bush announced the beginning of the first Gulf War in 1990 a cheer was reported at a professional basketball game, and it was to enter into it with anything other than a heavy heart. I know now why that cheer went up, though. The spirit of abstraction.

Leverage the tasks you want to do by withholding them until your more odious tasks are completed first. That way, desirable tasks become a motivating reward.

Principle #6 for Meeting Deadlines: Making it Easy for the Customer

Legal and human resources constrictions counteract names from being released until the selection is complete and the official communications and severance packages are ready. Employees know the moment is coming, but little else.

Meeting Deadlines: Making it Easy for the Customer Thinking in terms of the customer’s deadline and of ways to facilitate the up-line obligations to yet another level of customers or end users is characteristic of great companies. Great organizations never lose sight of the big picture, which includes the customer meeting its own deadline. Great conversations are like anything. Success is usually not an accident. It’s planned. Each company has a reputation as a dependable azlly who will not let the customer fail. That’s true, but letting people go is far easier from a legal standpoint if you’ve established and documented a strong case for why a particular employee doesn’t fit with your culture—and exactly what that means.

Principle #7 for Meeting Deadlines: Willingness to Ramp Up

Most teams have to ramp up to meet their deadlines. It isn’t as if they can meet their challenges the way they are. The challenges they accept are complicated by the steps that need to be taken to meet each deadline—and yet they are not intimidated by the deadlines, nor by the requirements to meet them.

Definitely, we can imagine naysayers. But, the decisions of senior management to accept the challenges have positive repercussions. Organizations are transformed by the requirements to meet the challenges they willingly accept.

Authorize them to communicate and lead, not to just passively watch their departments be clipped without a rationale.

Conclusion: Seven Principles for Meeting Deadlines

Meeting deadlines strongly influences our ability to be happy Those involved in setting the deadline feel driven by the schedule, but they are not emotionally overwhelmed. That’s not strong enough, and it’s not quantifiable. By most quantitative standards, the employee is doing great work. In fact, enforced schsedules offer a sense of relief: You then know exactly what must be done daily to be victorious, and even when “off schedule,” you know what must be done to get back on track. Deadline busters willingly bow to the Schedule God, obeying the truest guide to victory in the race against time.

What it is, therefore, matters a great deal, for studies show that what we choose to meet deadlines strongly influences our ability to be happy. Pursuing meeting deadlines, for example, actually tends to decrease our happiness in the long run. Pursuing altruistic goals, on the other hand, is one of the few things that actually increases it.

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Master the Principles of Four Arenas of Positive Power

Master the Principles of Four Arenas of Positive Power

Interpersonal influence (also identified as social influence) has transpired when the actions of one or more individuals influence the attitudes or behaviors of one or more other individuals. Relationships prosper or decline in relation to how well the partakers harmonize with one another about important decisions. Some agreements just fortuitously happen, but many of them are the result of the participants influencing one another. Recognizing the principles explained below will make one a better practitioner of influence and also more aware of how one is being influenced.

Successful managers apply each of these principles within four arenas:

  • Personal power. Managers must access the untapped capacity we, individually, have for personal power. Integrating our intellectual, emotional, and physical energies, the arena of personal power, is the groundwork.
  • Interpersonal influence. We can’t achieve organizational goals alone, regardless of how much personal power we have. Personal power does, however, enable us to achieve interpersonal influence. Influence is the impact we have on others simply because we are part of the same system. Such influence is too often undefined and undirected. Interpersonal influence connotes a specific focus of impact; that is, our ability to support others to willingly use their energy on behalf of our goals in ways that get rid of power struggles that waste energy. Instead, the focus is on improving the quality of our relationships to enhance interpersonal influence. This type of influence is pervasive and is necessary for survival. To not take cues from others would be to ignore much of the information that is available about the world.
  • Team synergy. A group is formed anytime people come together to accomplish something. We may call them departments, divisions, work units, teams, task forces, or committees. Meetings are a group activity. Groups must be turned into a source meaningful power. Team synergy, the most potent manifestation of group power, exists when the whole generates more power than the sum of its parts. Turning groups into high-performing, synergetic teams requires creating safe, conflict-competent, empowering groups that learn from differences and make good decisions. Teamwork has always been recognized as the backbone of leadership, but the stresses that team members now are experiencing might be one of the biggest challenges we will need to overcome to continue to think that way. Efficiency, cost-effectiveness, new technology and procedures, and multiple shifts in job responsibilities are permeating our environments during a time when teams are strained and sometimes broken.
  • 'The Infinite Organization' by Michael F. Broom (ISBN 0891061681) The infinite organization. The payoff occurs in final arena, The Infinite Organization. In this arena our skills of personal power, interpersonal influence, and team synergy are applied in three areas: leadership and the executive team, structures and policies, and management practices that have created the benefits of the infinite perspective of power and its related principles. The synergy that allows an organization to give information and material and to add value through processes that they each offer is a unique quality. The resulting outcome is far greater than one that any individual could offer independently.

With these tools, managers can create the positive and self-sustaining culture that characterizes an infinite organization. When all three areas are fully developed, aligned, and congruent, the focus, energy, and success of The Infinite Organization will be evident.

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Posted in Management and Leadership Mental Models and Psychology

Tap the Power of Your Viral Customers

Viral Customers are Your Brand Ambassadors

Viral Customers are Your Brand Ambassadors Whether you are aware of it or not, customers are talking about you this very minute. They are offering opinions, trading experiences, and influencing other customers about you—your company, products, services, and reputation.

Welcome to the world of the “viral customer,” the turbocharged version of the word-of-mouth customer. If you’re not aware of your company’s viral customers, you need to be. If you haven’t geared your company to their growing influence, you had better start now. These talkative, influential customers will play a critical role in the future of your marketing schemes, loyalty programs, customer service efforts, public relations outreach, brand management, privacy policies, and bottom line.

The Internet has created a generation of so-called “viral customers.” Viral customers can be champions or destroyers. They can talk trash about you or trumpet your worth. Which route they take depends on you.

  • If customers are happy with their encounters with you, they are likely to tell lots of their friends. In essence, they become viral ambassadors who will rave about your company to others to create a gush of goodwill. These ambassadors can be valuable, low-cost avenues for building existing relationships, recruiting new customers and keeping old customers happy for life.
  • But if customers are not satisfied, watch out. So-called “viral rebels” can destroy your products, brands, and reputation as they share negative experiences. Moreover, at the moment of negative feedback, they’re likely to be in a “switch mode,” ready to find someone else to satisfy them in ways that your company hasn’t or won’t.

Are you paying attention to what your own viral customers are saying and doing? We’ve found that some companies and industries are more “viral” than others. Customers are much more likely to pass along opinions to others about insurance firms, health maintenance companies, utilities, banks, long-distance and wireless telephone companies, mail delivery services, Internet service providers and auto manufacturers.

What’s at stake is more than the lifetime value of a single customer. Everyone in the viral rebel’s sphere of influence is also at stake, because even though the original customer may walk away from you, he or she is not necessarily finished. The bad-mouthing continues. Suddenly, one person’s negative encounter becomes everyone’s shared experience, and you’re left to pick up the pieces, re-establish ties, win confidence, and regain long-term loyalty.

Some Brands and Issues are More Viral Than Others

Some Brands and Issues are More Viral Than Others Certain brands elicit highly viral customer buzz. Billing issues typically fly off the virility chart. Other hot-button issues involve safety among automakers, baggage claim among airlines, customer service at e-commerce sites, hygiene at restaurants, and staff attitude at retail stores.

If you listen to your viral customers, you will know whether your marketing budget is based on the correct assumptions. You’ll be able to apply one-to-one marketing principles to customer feedback, making your customer insight even richer and more robust. You will know which brands are working. You’ll know your company customer service record, because you will have real-time feedback from the customers. You will identify trouble spots or opportunities well in advance, enabling you to take advantage of positive feedback or stop negative feedback before it explodes.

As you analyze the customer insight you receive, you become wiser and more adaptable, smarter and better able to react, respond, and retool. You start giving customers what they want—easy and convenient communication. They want to be heard. They want to help others, and they want a forum that fits their propensity to rant or rave.

In a world governed by customer insight, all feedback is gold and every complaint is a gift. Raw data guides us, but insight that has quality and meaning enlightens us. Anticipation beats perspiration, and the only way to know what is around the next bend is to pay attention to the curve as it develops.

Here’s five things you can do to tap the power of viral customers:

  • Identify them. Viral customers communicate with you frequently by e-mail, letter or phone. They send copies to others, are passionate or emotional about their experiences and are among the first to try new products or services.
  • Make communication easy. Offer as many ways as possible for customers to get in touch with you-a toll-free phone number, Web-site e-mail address, third-party feedback service, street address or special mailing address.
  • Respond quickly. Respond quickly and in the same fashion. Be empathetic.
  • Mine the negative comments. Respond decisively so that the customer decides to remain in your camp. Don’t give a reason to bolt to the competition.
  • Build the relationship. Add communicative customers to a preferred-customer list. Extend special offers, ask their input on new products and services, and ask how you can improve the relationship. The more you integrate the relationship, the stronger it will be.
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Posted in Business and Strategy Management and Leadership

How American Express Realizes the Enormous Opportunity of eService

The internet represents an enormous opportunity to transform and improve old businesses and engage in new ones.

American Express is constantly transforming its business, eventually putting American Express’s old products out of business with new product innovations. All of its Internet initiatives are designed to accelerate its business transformation by capitalizing on interactive capabilities.

The assets that have made American Express one of the leading global financial services companies are highly relevant on the Internet.

American Express eStrategy #1: Become or Remain a Leader in Online Payments American Express has one of the most recognized and respected brands in the world, representing security, integrity and trust. American Express has a large card member base with 50 million cards in force worldwide. It owns or manages nearly $300 billion of assets for its 2.3 million financial services customers. In addition, it transacts with millions of merchants in over 200 countries and territories. It has a broad and diverse product set catering to the financial and travel-related needs of its consumer, small business, and corporate customers.

American Express provides superior value and service to its customers, and runs first-class operations that are nimble enough to conceive and launch major products in Internet time. The Internet is an extension of its business, and American Express believes the “bricks and clicks” strategy will ultimately prevail. In fact, an increasing number of online-only players have recently announced the desire to acquire physical assets as their virtual business models have run their course.

American Express’s eStrategy consists of four parts.

American Express eStrategy #1: Become or Remain a Leader in Online Payments

Currently, of the $5 trillion in consumer payments in the U.S., only about 30 percent occurs on card-related payment products. In addition, of this $5 trillion, less than 1 percent is transacted online. However, as a greater share of spending moves online, most spending will occur on plastic or its electronic cousins as consumers and merchants look for standard ways to transact in a secure fashion. The three key drivers of success as an online payments provider will be merchant acceptance, authentication, and security.

  • On merchant acceptance, American Express has 97 percent coverage of the 100 top e-commerce sites, which accounts for approximately 70 percent of all online spending. In addition, of the top 500 sites, American Express has 95 percent coverage.
  • On authentication and security, American Express’s Online Fraud Protection Guarantee, Private Payment, and Online Wallet allow customers to shop in a secure fashion. Private Payments provides customers with choice and protection when shopping online. Online Wallet offers one-click order fulfillment and form-fill capability that allows users to automatically and securely checkout virtually anywhere on the Internet. The Blue smart chip offers an extra layer of authentication and protection.

As corporations move their purchasing to dynamic online exchanges, they have a need for payment, financing, trust facilitation, and risk management products to support these transactions. American Express is positioning itself to support these types of transactions.

American Express eStrategy #2: Become a Preferred Ecommerce Destination

American Express eStrategy #2: Become a Preferred Ecommerce Destination Becoming a preferred destination for American Express’s current and potential customers who are looking for content, products, and services across financial services, lifestyle, and travel. AmericanExpress.com is the nexus for all of its product and service offerings. This website receives over two million visitors a month.

Many of the products it is developing—such as Membership B@nking and its Online Brokerage—require new skills and capabilities. To succeed, American Express has focused on simple product functionality with differentiating value propositions, all introduced in Internet time. American Express’s Membership B@nking offering includes no-fee interest checking and account access through the American Express ATM network, the second largest in the U.S. And American Express Brokerage offers free online trading for accounts over $100,000.

Despite American Express’s relatively light marketing efforts, response to these offerings has been extremely positive. This popularity attests to the power that an established physical world company can wield by extending the strength of its brand onto the Internet in a way that offers its customers something of value.

American Express has a comprehensive web offering. To simplify the interaction for customers, American Express gives them the flexibility to customize their on-line dealings with American Express through “My American Express.” It has also added Online Extras to The Offer Zone where customers can access savings with local restaurants, merchants, and online retailers.

Another feature is American Express Online Services, the common entry point to all of American Express’s card products and services. Upon authentication, Online Services allows customers to access their American Express accounts as well as special or new offers. Based on a customer’s preference, it can communicate offers, services, and information directly to the customer’s e-mail address.

Through the combination of American Express’s physical assets and web site, it can serve customers when, where and how they want. American Express is increasing share of wallet with customers and providing them with greater levels of service by broadening American Express’s relationships across multiple channels.

American Express eStrategy #3: Provide Online Service that American Express’s Customers Value

American Express eStrategy #4: Improve American Express's Operating Structures Provide online service that American Express’s customers value across all of its entire businesses and products. Online Services already has several servicing options including Bill presentment and bill payment, Membership Rewards account management and online redemptions, and online card applications. American Express also is continuing to develop its online services for merchant, small business, and corporate customers.

If a customer encounters a problem adding an additional card to their Online Services account, a pop-up button will appear that they can click on to reach a customer service representative in real-time to resolve the issue.

Another application, American Express @ Work, moves customer-servicing capabilities online. American Express’s goal is to make the interactive channel one of the preferred methods of servicing.

American Express eStrategy #4: Improve American Express’s Operating Structures

American Express eStrategy #3: Provide Online Service that American Express's Customers Value Use interactive capabilities to dramatically improve American Express’s operating structures through reengineering on the cost and revenue sides. American Express constantly reengineers its business activities to increase its value to American Express’s customers, employees, and shareholders and to develop new capabilities and products. Most of its online reengineering initiatives focus on using the Internet as an additional channel to conduct functions such as online account acquisition, program enrollments, order fulfillment, and targeted, customized marketing campaigns.

American Express’s eStrategy Integrates the Internet with Core Banking Operations

Going forward, American Express plans to use the Internet to change the way it interact with customers, which can have a substantial impact on its cost structure and business processes. American Express is moving to integrate the Internet more closely into its operations and redesign its processes to allow it to be more nimble and proactive in meeting the needs of its customers. Consumers today expect to pay less online for the same products and services they once received through physical channels. Reengineering enables American Express to adjust its cost structure to meet customers’ needs and ensure that they receive superior value.

Create and implement a plan to improve your eService. You might seek ways to use the internet to change how you interact with customers

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Posted in Investing and Finance Management and Leadership

Tips for Mentors and Mentees

Tips for Being a Great Mentor

Mentorship Experience: Bill Gates and Warren Buffett Having a great mentor can do wonders for your professional development and career. Describe what you’ve learned from them and how those skills will help your career going forward. Don’t focus on the relationship’s inadequacies—accentuate the positive. Effective mentorship takes time. Mentors trade away hours they could use to chase their own career goals and spend them on someone else’s.

  • Mentoring is about instituting a partnership that helps your protege learn. It is not about your being an expert or the authority.
  • Great mentors foster discovery, they don’t coach; thought-provoking questions are much more powerful than smart answers.
  • Your protege will learn more if you create a association that is safe and comfortable. Be authentic, open, and sincere.
  • Your rank or position is your greatest obligation—act more like a friend than a boss.
  • Great listening comes from genuine curiosity and obvious attentiveness.
  • Give feedback with a strong focus on the future, not a heavy rehash of the past.
  • Mentoring is not just about what you say in a mentoring session; it is also about how you support your protege after the session. Focus on helping your protege transfer learning back to the workplace.
  • If your mentoring relationship is not working like you hoped it would, clearly communicate your apprehensions to your protege.
  • Mentoring relationships are intended to be temporary. When your protege has met his or her mentoring goals, be willing to let the relationship end.

Tips for Being a Great Mentee

How to Make the Most of a Mentorship Experience The best mentors avoid overriding the dreams of their mentees. If an employee and a job aren’t a good fit, or if an ambitious employee realistically has limited upward mobility in a company, a good mentor will help that employee move on. They might be better suited to another role within the organization, or even to a new path somewhere else.

  • Select a mentor who can help you be the best you can be, not one you think can help you get a promotion.
  • Remember, you can sometimes learn more from people who are different than from people who are “just like you.”
  • Get transparent on your goals and expectations for a mentoring relationship.
  • Communicate your goals and expectations in your first meeting.
  • Mentoring is about learning, not looking good in front of your mentor. Be yourself and be willing to take risks and experiment with new skills and ideas.
  • When your mentor gives you advice or feedback, work hard to hear it as a gift. Just because it may be painful does not mean it is not beneficial.
  • If your mentoring relationship is not working like you hoped it would, clearly communicate your concerns to your mentor.
  • Great mentoring relationships take two people—a partnership. Look in the mirror before you conclude a poor mentoring relationship is all about your mentor.
  • Mentoring relationships are designed to be temporary. When you have met your mentoring goals, be willing to let the relationship end.
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Use the Theory of Constraints to Create a Viable Vision

Any complex system is based on inherent simplicity

Strategic Vision is Viable

Viable vision is the opportunity of a company to have, within four years, annual net profit equal to its current total sales. Any complex system is based on intrinsic simplicity. Capitalizing on the inherent simplicity empowers incredible improvements within a short time. The more data needed to designate fully a system, the more complex it is. Enumerating reductions in total systems costs that are often heart to the customer company is also difficult. Most companies, even small ones, are complex and accordingly challenging to manage. The few elements commanding the performance of the system are the restrictions or advantage points —the Theory of Constraints.

When I scrutinize a company, I am rather fulfilled only when I clearly see how it is possible to bring the company to have, within four years, annual net profit equal to its current total sales. That is what I mean by a “viable vision.” In emergent markets such as China and India, clients want decent quality products that are simple to install, use, and maintain.

I am careful when sharing this anticipation with the top management; I expose the reasons why I believe this vision is viable. I share my analysis of what is obstructive performance. Using logic, I deduce the steps that will eradicate that block. Then I detail the steps to take to capitalize on that breakthrough. In this way, the reaction of top managers is, “This is common sense. Why aren’t we doing it?”

Capitalizing on Strategic Simplicity

Any complex system is based on inherent simplicity. Capitalizing on the inherent simplicity enables implausible improvements within a short time.

The more data needed to describe fully a system, the more complex it is. These infringements come at a significant cost to the organization, since too much time spent on day-to-day details can endanger future growth.

How complex is the system you manage? How many pages are needed to describe every process and the relationships with each client? Most companies, even small ones, are complex and thus tough to manage.

We manage a complex system by dissecting it into subsystems that are less complex. However, this can lead to miss-synchronization, harmful local optima, and the silo mentality. Since our systems are compound, we might think that all we can do is to improve synchronization and nurture collaboration between the subsystems. Public corporations are required to maximize their return to shareholders—not to customers. If this is the only option we contemplate, we will believe that achieving a major jump in profit within a short time is a rarity. We will think that creating net profit equal to current total sales in less than four years is unrealistic.

Leaders of successful innovation exertions are gifted visionaries. To see the potential of a company, we need to realize that the thing that makes our system difficult to manage is that what is done in one place has complications in other places; the cause-and-effect relationships turn our system into a maze. Strategically central issues and opportunities can occur at any time, and they cannot always wait for the next planning cycle or off-site to roll around. However, that fact also provides the key to the solution. This model had served them well. However, they began conjecturing about their organization in the future. They began to wonder if the model would work when the commodity that was being passed around was information, not metal.

Examine a system and ask, what is the minimum number of points we must impact to impact the whole system? If the answer is “10 points,” this is a challenging system to manage because it has too many degrees of freedom. However, if the answer is “one point,” this system is easy to manage.

Theory of Strategic Constraints - Strategic Wisdom

Now, the more interdependence between the components of the system, the fewer degrees of freedom the system has. However, the realities and the consequences of how they actually use their time are often quite different. Bearing in mind the complexity of your system, only a few elements govern the entire system. The more composite the system, the more profound is its essential simplicity.

To capitalize on the inherent simplicity, we must identify those few elements that govern the system. In addition, if we clarify the cause-and-effect relationships among all elements of the system, we can manage the system to achieve higher performance.

Companies turn out to be too focused on executing today’s business model and stop thinking about the fact that business models are perishable. Because companies’ decision-making systems are designed to push investments to initiatives that offer the most perceptible and immediate returns, companies shortchange investments in initiatives that are imperative to their long-term strategies.

Theory of Strategic Constraints

The few elements dictating the performance of the system are the constraints or advantage points-the Theory of Constraints (TOC).

In this school of management, we are qualified never to bring forward problems without a recommended solution. The marketing and strategy of companies is in it’s not luck. They have to be streetwise but not necessarily wise in other ways. They need to be fledgling and without much need for sleep. If you read these books, you will agree that the conclusions are horse sense, even though they fly in the face of common practice. Moreover, if you put it into practice, you experience remarkable improvements in a short time.

Is a viable vision possible for your company? Is it feasible to have, within four years, yearly net profit equal to its current yearly sales? The complications are discouraging. For example, such profitability is impossible without a huge increase in sales, and this is doable only if you have a remarkable new offer accepted by your markets. Can such an offer exist? Can you produce on such an offer? What investments will be needed? In addition, is your team capable of implementing such a change?

You do not have to coin your own phrase, but if you can find a simple, clear concept at the core of your policy, and if you can get others to appreciate it, then you are on your way to forming nuggets of you of strategic wisdom. A winning, stupendous concept will keep a team positively focused and sustain it during the inescapable disappointments and trying times.

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