Every year I spend time with clients helping them understand the kind of planning they need to do now in order to be on the road to success the following year; I also like to share an outline of the process with you.

You have to have a plan
Anyone leading a company, even a company of one, needs to know

• what you want to do, and
• how you’re going to do it.

This brings you to the crux of the matter—how do you plan for a sustainable business?

Choose your approach

• SOP (seat of the pants): Used frequently throughout business history, and extensively in the late Nineties. The CEO (top dog) discusses her desires over lunch with other (hopefully) senior staff members. Separately, each manager prepares a budget, including headcount for his department based on
  • what he thinks is needed to accomplish what the head honcho says she wants and
  • increasing his own leverage within the company (although these two are frequently reversed).

• PBO (operating plan w/budgets and objectives): Requires more thought and effort, but is the approach of choice for well-run companies. It requires the
  • creation of a viable operating plan to achieve the objectives; and a
  • detailed budget by which to implement it.

SOP, in all its glorious variations, spells chaos (which can be accomplished with no help from me), so we’ll focus on PBO.

What’s PBO?

Three interlocked pieces—each critical to success.

1. A budget that states

• how much is available to spend during the upcoming year and
• who is responsible for spending it.

2. The specific objectives that the company needs to accomplish during the year,

• financial, e.g.,
  • increase revenues 10%
  • increase services to 25% of revenues; and the
• quantified managerial, e.g.,
  • raise productivity 8%
  • reduce turnover 15%

3. A description of how the company plans to achieve the objectives in order to move forward on accomplishing the company’s long-term twin goals of profitability and success.

The end result is a detailed business roadmap for the coming year.

Where’s the rocket science?
The three parts are interrelated and must be tightly linked, so changing one affects all.

That’s it. Simple, right? Unfortunately, many executives treat them as separate entities wreaking havoc on their subordinates. They don’t get, or don’t care, that it’s a domino effect and that when one changes they all must change.

Which are you?

• The boss who can’t be bothered to do the hard work and make the tough decisions and doesn’t worry about jerking his people around because ‘they’ll get over it’; or
• the boss who believes that with a good plan, known objectives and a viable budget all the managers—executives to the lowliest supervisor—will buy-in and execute intelligently throughout the year?

As always, it’s your choice.

Image credit: http://www.sxc.hu/photo/914885

Many people in Washington and around the country look to venture capitalists to jumpstart companies that will generate jobs, both directly and indirectly. Once again KG Charles-Harris, EMANIO CEO and founder of M3, attended Stanford Summit, a three day gathering of those who move in the world of startups, and provides his impressions of their ability to perform.

Last week I again attended the AlwaysOn 2010 Summit at Stanford, held at Stanford University in California.  It was a beautiful setting with people from all parts of the technology ecosystem—from very large companies such as Hewlett Packard to small 2 person startups, banks, venture capitalists, angel investors and consultants.

One of the most interesting takeaways from the conference was the very different views that people had on how the venture capital industry was developing in the present environment.  On the one hand, there were strong assertions that the VC industry was in good health and that there was a lot of money looking for investment.  Most of the VCs I encountered asserted that they were very much interested in early stage investments and that they provided a unique service to founders and early stage management.

However, this was in stark contrast to the intense frustration many startups were expressing when describing their hunt for capital.  They felt that VCs were far from interested in early stage investments and were mostly focused on follow-on investments in portfolio companies or syndicated deals.  Some (probably about 70% of the people with whom I spoke), who had received investments felt that the VCs were often a distraction on the Board and either were micromanaging or otherwise not helpful.  Yet these founders and executives have little choice but to continue to seek venture money to fund their growth.

Could these developments be due to the fact that many of those running the largest firms are no longer the seasoned operating managers that brought forth the storied companies of old, like Apple, Cisco, Fairchild Semiconductor, Silicon Graphics, etc.?  Many have the impression that the generation of VCs that joined when the names on the door wanted to kick back are simply bankers; portfolio managers unable to take risk or understand a vision.

The industry has always been prone to “herd mentality,” where a lot of VC firms invest in similar startups; as was blatantly obvious during the dot com debacle.

A preference for financial manipulation and unwillingness to take risks combined with a lack of operating experience and little vision could signal a death knell for the kind of leaps that created high tech in the first place.

The upside is found in younger VCs and angels; men and women who founded or worked in startups and are putting their money where their mouth is to help create the next wave.

The question is there enough of them or will it be a case of too little too late?

Image credit: AlwaysOn

How many times have you heard it—focus on the customer blah, blah, blah?
How often does it prove to be true?

How many times have you said it— it’s about what the customer wants blah, blah, blah?
How often do you practice it?

For too many companies being customer-centric happens when it’s convenient—if it happens at all.

Enter Reorganize for Resilience: Putting Customers at the Center of Your Business by Ranjay Gulati, the Jaime and Josefina Chua Tiampo Professor of Business at Harvard Business School, who offers a comprehensive, practical and inplementable guide to creating a customer-centric business.

Utilizing an outside-in approach means focusing on delivering something of value to customers, as opposed to focusing on products and sales.

Gulati discusses 5 key levers from both “why” and “how”:

Coordination: Connect, eradicate, or restructure silos to enable swift responses.

Cooperation: Align all employees around the shared goal of customer solutions.

Clout: Redistribute power to “bridge builders” and customer champions.

Capability: Develop employees’ skills at tackling changing customer needs.

Connection: Blend partners’ offerings with yours to provide unique customer solutions.

Gulati is blunt and his approach isn’t for those who prefer incremental change to revolutionary, but it is MAP that will stop many leaders from embracing Reorganize for Resilience—because you can’t implement that in which you don’t sincerely believe.

Since the advice to be customer-centric isn’t new, following it isn’t easy and may actually require difficult, even painful changes to your MAP, so why bother with Reorganize for Resilience?

Because it carries the biggest bottom-line payoff, both short and long-term, in any economy and for any company—from Fortune 50 to the neighborhood copy shop.

Image credit: Harvard Business Publishing

Image credit: HikingArtist on flickr

I have a stack of books waiting to be read, some I buy and some are sent by publicists for me to review.

Then there is the constantly growing list of books I hear about or see a review and want to read.

But I have only so much reading time and it’s shrinking as we get closer to the launch of our new product (stay tuned).

So I created a new category called Reviews and Recommendations and included MAPping Company Success’ ‘Book Reviews’ and Leadership Turn’s ‘Reading Recommendations’. I hope you find it useful.

Today, I have some interesting recommendations for you.

The first is from Jeffrey Krames, a literary agent who tells the fascinating story of a self-published book that sells for nearly $50 with an unwieldy title that instantly became a top Amazon seller. Whether or not you want to tackle the book you’ll enjoy its story.

Two European authors—Alexander Osterwalder and Yves Pigneur—spent years putting together a stunning book on business models entitled BUSINESS MODEL GENERATION. The two authors had a great deal of help with the design and content of the book, as it was  co-authored by 470 Business Model Canvas practitioners from 45 countries… Within 48 hours the book ranked as high as #74 on Amazon, an amazing feat for most any business book and especially this one. Since then, the two versions of the book have occupied two of the top 25 slots on Amazon’s list of bestselling management books every single day.

After reading dozens of day-by-day articles and commentary on the financial meltdown, none of the myriad of books written about it really grabbed me. However, when I read a review of Henry Paulson’s newly published On the Brink: Inside the Race to Stop the Collapse of the Global Financial System in Business Week I was intrigued.

What got my attention (and made me ill) was the following quote.

“All were concerned with excessive risk taking in the markets and appalled by the erosion of underwriting standards,” he writes in his penetrating memoir, On the Brink. Yet they felt forced by competitive pressure to make loans they didn’t like, the former U.S. Treasury Secretary says.

“Isn’t there something you can do to order us not to take all of these risks?” was the gist of a question posed by Chuck Prince, who was still running Citigroup as the bank bumbled toward disaster.

This from some of the most powerful business “leaders” in the country.

Image credit: ginnerobot on flickr

Did you watch the new reality show Undercover Boss on CBS Sunday after the Super Bowl?

The opening episode starred Larry O’Donnell, President and C.O.O. of Waste Management.

O’Donnell plays ‘Randy’, a new worker being filmed for training purposes. At one location he jams the trash line by not removing large cardboard; he is fired, for the first time in his life, for not being able to efficiently collect blowing trash at a landfill—unlike the worker he is with who has done the job for 19 years while spending three days a week in dialysis; he cleans porta-potties with a guy who’s attitude is every manager’s best dream; and he rides with a female trash hauler where he learns that to stay on schedule women drivers use cans from the trash as pee-pots.

He meets a 29 year old single mother who overcame five kinds of cancer by age 25, has taken in her brother’s family and her dad, is about to lose her home in foreclosure and is doing three jobs post layoffs for the same money she was getting before, but is still upbeat and even invites the new guy to dinner.

O’Donnell is surprised by the physical and mental exhaustion he experiences his first day, amazed by the people he meets, outraged by what he learns and shocked at the implementation of a policy he personally conceived to raise productivity by which workers were docked 2 minutes for every 1 minute they were late.

At the start of the show when O’Donnell tells his executive team that he is going undercover the reactions vary from surprise to incredulity.

When he meets with them at the end and talks about what he learned and changes he believes are needed and how he plans to use his new knowledge the look on guy’s face said it all—he might as well have rolled his eyes.

Sadly, that is often the reaction from senior leadership regarding intel that comes from front-line, bottom-of-the-heap workers.

The smartest managers listen to their all their people—not just the ones in suits.

The final scene includes and overlay update on what happened to each of the people who worked with O’Donell and changes, both made and ongoing, as a result.

I don’t watch reality shows; I’ve read that many are scripted, but I do believe that there are bosses of large companies who don’t have egos the size of Texas and are capable of learning from unfiltered feedback from the lowest rank and file.

Plus, it seems that changes were actually made.

As big a believer as I am in bosses talking to the troops, there is no way O’Donnell would get this kind of feedback from this level of employee if they knew who he was.

Go ahead and call me naïve, but in spite of everything I’d rather be a chump than a cynic.

And in case you missed Undercover Boss you can watch it here.

Image credit: Svadilfari on flickr

Cali Ressler and Jody Thompson started changing the work world in 2003.

That’s when they conceived and somewhat covertly initiated ROWE at Best Buy.

ROWE stands for “results only work environment” and it means just that. No set hours, no clock watching, get the job done and be evaluated based on the results and resulted in a 35% jump in productivity

These days Ressler and Thompson run CulutreRx, teaching ROWE to a variety of companies, such as GAP.

ROWE is a business strategy that’s been proven to profoundly improve workforce productivity (as much as 41%) and reduce voluntary turnover rates (as much as 90%). And, ROWE is a magnet for the talent you want to attract.

Best Buy’s culture is one that encourages creativity and good ideas at all levels, so it’s no surprise that another stand out came along a year later.

Julie Gilbert conceived and started the WOLF initiative in 2004 (she was given full ownership rights including the intellectual property and the right to take it outside anytime in exchange for building it first at Best Buy).

WOLF’s focus is to promote and enhance the role of women both inside the company and outside in their role as customers based on three precepts:

Commitment – to the business, customers and other members of the pack

Networking -  amongst at all levels internally and externally to nurture and support one another

Giveback – giving back to women and girls in local communities.

Sound all warm and fuzzy to you? Are you fighting back a snicker and thinking that there is no way your company would ever mess with that?

If so, try shrugging off Best Buy’s results.

Revenue

• $4.4 billion increase in revenue from female customers (11% increase in total company revenue)

Market Share

• Highest ever female market share in company history
• Females became the majority of the most “valuable “customers

Brand Reputation

• Largest increase in brand perception in company history

Network

• Passionate, global, viral customer networks growing market share and innovating new business offerings
• Over 40,000 members in 40 plus countries

Performance Outcomes

• 5% reduction in female turnover resulting in a minimum of $25 million in savings
• 18% increase in the number of female employees.
• 100% increase in females in the most profitable business unit
• 40% increase in female General Managers & General Managers In Training
• 60%  increase in female Operations Managers
• 30%  increase in female Customer Experience Managers

ROWE and WOLF both came from the same company while Brad Anderson was CEO.

His response to the question “Where do you find new business ideas?” says it all.

I believe that some of our best ideas have come from the people who are furthest removed from the CEO’s office – those line-level employees who interact with our customers each and every day.

Without a culture that encouraged and supported innovation from all levels ROWE and WOLF couldn’t have happened.

The MAP that enables that culture can function at any level no matter the company’s overall culture. Yes, it’s more difficult, but you can create an environment in which your people’s creativity blooms.

Your choice.

Image credit: nDevilTV on flickr

I have 5 stories for you today about CEOs, two who don’t and four that do.

Pundits (consultants, academics, bloggers) are fond of lauding CEOs for their vision and skill at imparting it to their followers—Richard Fuld, Bob Nardelli, Jeff Skilling, Bernard Ebbers, Dennis Kowalski, the list is long—but after their meltdown you hear only from the Monday morning quarterback crowd.

But if you want to sort the true stars from the others, you need to take a long-term look—not Wall Street’s typical quarter or even a decade—at more than the stock price.

Moreover, you need to look at the down times; the times when the economy sucks, yet the CEO still finds ways to foster a great culture and stoke innovation—not just cut staff and threaten execs with termination if they don’t make their numbers.

For better or worse, it’s not in the vision or the leading, it’s the doing.

Our first story is should be a familiar name to all of you. Remember Sandy Weill? The man who drove the repeal of Glass-Steagall in 1999 and whose deal making built CITI, the colossus that never really jelled. He was named “C.E.O. of the Year” in 2002 by Chief Executive Magazine, but that was then and this is now.

The travails of newspapers aren’t news anymore, but Frank Blethen, CEO the Seattle Times Co. has made matters much worse in the name of family.

Far on the other side are General Electric CEO Jeff Immelt and Procter & Gamble’s A.G. Lafley. The two are good friends and Fortune senior editor Geoff Colvin shares a rare joint interview with them.

In today’s cutthroat business world how many CEOs would lift a finger to save their competition? Ted Baseler, CEO of Chateau Ste. Michelle did exactly that when freezing temperatures wiped out the grape harvest in 2004. He didn’t just save his competition; he’s credited with saving the entire Washington state wine industry. Baseler is the quintessential big picture guy.

“We want Washington known. All of it. We’re not about to fight over whose bottle of wine gets sold. We’re competing with Napa, with France. We’re not competing with Washington wineries.”

My last offering is an interview with Pete Peterson, co-founder of Blackstone Group, looks back on s storied career and offers his insights as to what’s needed to “rebuild the American dream.” There’s a video (that refuses to embed) and a PDF of the interview (requires free registration). I think you’ll find it interesting.

Image credit:  pedroCarvalho on flickr

How do you feel when you read something presented as a unique insight into a subject and it turns out to be the same old tire stuff that you’ve seen for years?

That’s how I felt when I read The Coming Leadership Gap: What You Can Do About It by John Ryan, president of the Center for Creative Leadership.

I’ve been hearing the term ‘leadership gap’ for years, yet Ryan writes that his company just coined it.

Based on our [global] survey, there are four skills that executives all over the world believe will be most important just five years from now: leading people, strategic planning, inspiring commitment, and managing change.

Most important starting 2015?

Good grief, I haven’t done a survey, but I’d say those four skills have been important for decades hundreds of years, more actually.

I’m sure Attila the Hun found them critical when he conquered the known world. In fact, odds are that they were on the mind of the first Cro-Magnon clan chieftain when he fought his neighbor.

Pity our poor world when the people running global enterprise think they have five years before they need to master these skills.

One of the comments was especially perceptive; in part it said,

Various management gurus from the 1950′s have said the same thing over and over again. Yet despite this each generation of corporate leaders repeat the mistakes off their predecessors in that they fail to invest in leadership and management development. I believe the answer lies firstly in a change of mindset. –John Coxon

Now we are getting somewhere.

It’s MAP (mindset, attitude, philosophy™); it’s always been MAP and it will always be MAP that is the problem—or the solution.

Before and after 2015 it will be the executives and managers who get it; who understand that these skills need to be embedded in the company’s DNA; they are not CEO skills, but core competency requirements to thrive in the 21^st Century.

Image credit: hikingartist.com on flickr

Sports has long been used as an analogy to various business practices—the best sales training film I ever saw was done by Vince Lombardi explaining how selling was akin to the plays in football.

But using good business practices to motivate a sports team isn’t heard of as much, except when it comes to ‘leadership’, a subject that, in its current ascendancy, annoys me no end.

A couple of years ago I read a post by Mike Kavis in which he focused on how Giants’ coach Tom Coughlin turned around his own career and his team using best practice leadership techniques.

“He listened to the constructive criticism of his bosses and players and decided to make some changes. What he found was that his vision was not fully understood by all of the players on the team. So he formed a leadership committee made up of various players on the team who could help him clearly communicate the vision. Better yet, he let the players select the leadership team. Since the players participated in forming the leadership team, it gave them a sense of ownership in the process…”

The creation of the leadership team accomplished the following:

• Clear understanding of team’s vision
• Participation in overall strategy
• Constant feedback
• Clear communication
• Accountability
• Buy-in
• Shared goals
• Clearly defined roles and responsibilities

And a Super Bowl trophy, I might add.

In his summary of what happened, Mike says, “If you want people to change, first change yourself.” which gave me a chuckle, not because it’s inaccurate, but because it’s so true that it’s the tag line of my company—To change what they do, change how you think.

A winning team is the goal of every person ever put in charge of an endeavor.

“Coughlin had a very rigid methodology that he followed to a T. It wasn’t working but he kept following it because it worked when he was with the Jaguars several years ago. By listening to his players, he made some minor tweaks to his methodology and the team responded.”

Those who are truly successful understand the importance of putting their egos in their respective pockets in order to listen and change themselves as needed.

The rest will continue to go their merry way, listening to no one, issuing edicts, and complaining when their people don’t buy-in or perform.

Image credit: heathbrandon on flickr