Business leaders often focus on profits and metrics, living in spreadsheets and analytics. But what drives these results is people and relationships. So often it’s the resilient relationships, those that are forged in uncertain and difficult times that make the difference.
A strong business relationship will have a number of attributes that set that relationship apart from others. First, it must provide value to both parties, and it is “generative,” meaning the value together is more than any one person could create on their own: so that 1 + 1 = 3. Strong relationships also create multiple tracks of value that would be hard to replace if the relationship ended.
One example of this is from the entertainment world, where the band the Grateful Dead was famous for their long relationship with their very loyal fans (which continues today, long after the passing of their leader Jerry Garcia). In addition to music, the band created value in other key ways for the fans, such as supporting a community of fans (the “Dead Heads”) as well as creating an ‘outside the concert’ experience, and even income for some fans (by selling items at the shows).
Finally, a strong relationship contributes to key strategies or needs of each party. Relationships that do not create value this way may be categorized as superficial and easily ended. If you are ever not sure if the business relationship is really strong, that is the time to discuss it. Do not wait until you are surprised by a change.
“Strong relationships create multiple tracks of value that would be hard to replace if the relationship ended.” -Michael Papanek
All organizations are faced with decisions. What to focus on, what to invest in, how to get to there from here are all common questions when approaching strategy.
I’ve read many books on strategy. There are many that are theoretical. I enjoy them and think about the implications. But there are a few that are actionable. As a CEO, I can use aspects of them immediately. That’s what I found when I read Tim Lewko’s new book, Making Big Decisions Better: How to Set and Simplify Business Strategy. Tim Lewko is the CEO of Thinking Dimensions Group, and his book goes right to the core of setting strategy that you can implement immediately.
I followed up with him to discuss his new book and his strategic work.
Why is it often problematic to “outsource strategy” work?
There are many large successful firms that come and provide the “answer” that shows up as a long set of PowerPoint slides – and this prescriptive approach is the choice for many CEOs. However, the approach which I practice is process based – where we bring a proven strategy system that “forces tough tradeoffs” and leaves them in a better place because they created the strategy and understand how to modify the choices as events fold. This process approach helps to avoid the problems associated with outsourcing strategy including:
DEFAULT on sweat equity – missing out on working through, understanding and deciding the key things that matter from EXTERNAL and INTERNAL standpoints
TOLD WHAT YOU ALREADY KNOW – in my experience, clients already know 85% of what’s holding the business back (outsiders may give you 60%) so why pay for what is already known?
DELAY or DESTROY BUY-IN – if you outsource strategy, you have already short-changed your ability to implement the strategy – because you have side-stepped the most important people – your executive team and workforce who need to intimately understand the why behind the PRODUCT, MARKET and CAPABILITY choices that are being made. Sure, a great CEO communication or town hall helps to sell the outsourced strategy, but deep down those closest to the issues feel side-stepped – and it takes an awful lot of time to get them to buy in to something that is not theirs.
“Unwarranted complications are killing strategy in organizations.” –Tim Lewko
What do leaders need to know about identifying the barriers to change?
In our experience, executives face a fundamental conflict: Change requires a sense of urgency while highly-efficient organizations tend to have high levels of inertia. When business is going well, managers and employees generally only pay lip service to change requirements. Knowing that, there are three barriers we’ve identified:
The good is the enemy of the better: Efficient, currently successful organizations often slow down the necessary change: Why cannibalize what is successful today? Why destroy efficiency gains of a ‘well-oiled machine’?
Watch out for your top team: Ironically, today’s most successful managers might be the ones slowing down your transformation efforts since they have the most to lose. Transformation needs to start with the person at the top, and it’s often those who have grown accustomed to success that find it most difficult to change course.
Your DNA takes time to change: Don’t underestimate the time and effort required to change deep-rooted mindsets and ways of working. Your legacy business exerts a natural gravitational pull that will stop all meaningful change unless you’re persistent and change at enough scale to break through
“Transformation is often more about unlearning than learning.” -Richard Rohr
What is the role of the CEO when it comes to digital transformation?
The successful digital transformations we see out there have one common denominator: the CEO spearheading and promoting the digital transformation. They are making it front and center of their personal agenda. Only if change is demonstrated and exemplified by the top management will the necessary changes to structures, processes, management instruments, as well as the establishment of new skills and new IT systems, be successful. That can mean using new technologies, challenging existing ways of doing business, and making the bold decisions necessary to change the trajectory of the business.
Assess Your Readiness
How can management assess the current strategy of the company and its readiness for digital transformation?
That’s two questions. The first is understanding your strategy, and that requires looking at sources of value – where they’re created in your business and in your sector. Most important, you need to look at where sources of value are being created outside of your sector – that’s where some of the biggest changes (and challenges) might be happening.
Then you need to look at where you are today and what needs to change. There are lots of assessments and diagnostics out there, but you need to take a cold-eyed view of where you are as a digital business and what needs to be in place to drive value at scale. As an example, we have developed a comprehensive benchmark to derive a company’s Digital Quotient (DQTM), road-tested with several hundred organizations across the globe. It helps leadership to take stock compared to best practices across sectors and within its own industry.
In addition to the benchmark, some questions that management should start with to determine the urgency and their organization’s readiness for change include:
Are we assessing whether we can use our strengths to penetrate completely new industries within the current rules?
Are we actively creating an ecosystem of partners, customers and suppliers that will last into the digital world?
Have we defined a feasible timescale and meaningful KPIs to reliably measure success or failure?
“Transformation literally means going beyond your form.” -Wayne Dyer
Would you share the story about “going up the stairs two steps at a time” and how it impacted your view of leadership and culture?
Yes, of course. Back in 2006 I had a meeting with Jim Bolt, the founder of Executive Development Associates (EDA), to discuss how I would run the company. Jim had been developing senior leaders since the early 1980s and was a renowned expert in the field. I knew I had much to learn from Jim and hoped we could work together. I didn’t know at the time that the very first piece of advice he would give me would shape and inform every leadership decision I have made since. Before I left that meeting, Jim handed me a book from his shelf called Let My People Go Surfing by Yvon Chouinard, founder and CEO of Patagonia, a sports clothing company.
The book is the story of Patagonia with an emphasis, almost a plea, for sustainability. Jim wanted me to start thinking about how we could help with this effort, I read the book but it was something else within that captured my attention. The CEO of Patagonia wanted to build an organization where employees were compelled to come to work. Yvon Chouinard wanted a company where employees were a part of their environmental mission. He wanted employees to be wholly engaged and committed. He said, “Work had to be enjoyable on a daily basis. We all had to come to work on the balls of our feet and go up the stairs two steps at a time” (Chouinard 2005, 45).
That statement struck me as extremely important. Imagine the creativity and courage and productivity that would come from a workforce like that. The power of it is immeasurable. That is what visionary leadership can do. It can unleash the power of the workforce.
Visionary leaders create a clear picture of a positive future state.
A visionary leader is a person who steps out and creates a clear picture of a positive future state. It takes a lot of courage because creating a vision for the future is basically imagining what could be and what should be. That feels very risky for leaders. It is stepping out of the norm. There are certain things they will need to do. In the book we explain further by putting it into 4 Cs. They must:
Build connectedness, and
Shape the culture.
What advice do you have for a leader struggling with creating a compelling vision?
Many business books are written on how to innovate, achieve faster growth, or beat the competition. I’ve not read many that focus on the personality of the leader. But the founder’s personality has a dramatic impact on all aspects of the company culture and its potential.
If entrepreneurs understand their personalities, it will help them choose the right team to enhance their strengths and manage around their weaknesses.
I recently spoke with the authors about their fascinating research into personality in this context. John Danner is a senior fellow at the University of California Berkley’s Institute for Business Innovation. A faculty member, a business adviser, and an entrepreneur, he speaks widely on topics from innovation to strategy. Chris Kuenne is a member of Princeton University’s entrepreneurship faculty, a growth capital investor, an entrepreneur, and a speaker.
“To win in the twenty-first century, you must empower others.” -Jack Ma
Personality is one of the least understood elements of entrepreneurial and business success. Why is that still the case after decades of study and research?
We think there might be three converging reasons. First, the business world often tends to overlook introspection and reflection in its bias for action and results, so the issue of who you are can get lost in the impatient focus on what you’ve done. The “do” trumps the “who.” But as any manager or leader knows, personality does matter . . . a lot; so that action-bias has left a void in our understanding.
Second, we love icons. Movies and the media naturally latch onto a compelling storyline, a fascinating individual, and retell that one person’s experience, character and personality. But icons can quickly become stereotypes, and those stereotypes reinforce the notion that you have to be an extraordinarily exceptional person to find success as an entrepreneur. That shorthand can substitute for a deeper understanding of what’s really at play here. In other words, every entrepreneur doesn’t have to be a Steve Jobs or Elon Musk to be successful; our research discovered there are four distinct personalities of successful entrepreneurs. And there are likely millions of individuals the world over who share those same personality patterns.
Third, although most people are intensely curious about who they are and how they’re wired, most personality assessments are ill-suited to the task of cracking the code of successful business building. Many address very broad issues, e.g., am I an extrovert or introvert, a Type A or Type B, etc. Or they’re designed to answer other questions in personal domains, like who might be a good match for me, what music might I like, etc.
Some broad-gauge tools can help people decide whether they might be cut out for entrepreneurship generally, e.g., are they comfortable with taking risks or working for themselves? But those resources don’t address the fundamental question: what are the key personality characteristics of the women and men who actually succeed in building lasting businesses of impressive scale? What makes those individuals tick, and am I like any of them?
And context is key here; people want to know about personalities in action in particular settings. That’s why we concentrated on examining personalities in the context of successful business ventures and used a patented Personality-ClusteringTM methodology that has proven its effectiveness in decoding specific customer behavior in hundreds of markets around the world.
But our research is just a first step in understanding the central mystery of the who of successful entrepreneurship. We invite others to build upon our findings as we refine our own work. After all, entrepreneurship is vital to economic growth and opportunity globally. We welcome others’ insights into this complicated and essential domain of human endeavor.
“Teams need captains, and vice versa-if you want to get things done.” -Mark Coopersmith
Briefly walk through the four types of Builder personalities.
The Driver: Relentless, Commercially Focused, and Highly Conﬁdent – Drivers can’t help themselves. They have to become builders of business or social ventures of their own as a means of self-validation. Entrepreneurship is almost hardwired into their very identity. They are supremely confident individuals, fixated on their products, relentless in pursuing commercial success based on their uncanny anticipation of what markets and customers are looking for. Drivers – like Steve Jobs or Elon Musk – often don’t last long as employees in other people’s organizations. They eschew rules and bureaucracy, seeing them as tools to focus the average person, yet often confine the truly gifted, independent-thinking actor. These builders are willing to do whatever it takes to realize the commercial success inherent in what they believe is their unbounded potential, in fact their destiny.