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Archive for the ‘Insightful’ Category

I grew up in a small town along the Ohio River where high school football was a big event on Friday nights.  My house was four short blocks down the hill from the high school stadium.

I remember, as a young boy around five or six years old, standing on the sidewalk in front of my house on a crisp Friday night and looking up the street at the lights of the stadium.  I could hear the band playing, the crowd screaming, and the comments being made on the public address system.  I really did not understand what was going on, but I knew that I wanted to be there.

One night my grandfather took me up the street to the stadium.  I remember my excitement as the lights got brighter and the sounds louder.  We worked our way along the side of the stadium until we got to the back of an endzone on a small hill.  There was a chain-linked fence about ten feet wide where people could see into the stadium.  I wiggled my way between some adults until I reached the fence.  I will never forget what I saw that night.  I watched the players on the field in amazement, and thrilled to the sound of the band playing and the announcer on the PA system.  Also, I discovered something new; football fields had a strong grassy smell.  I never wanted to leave.  –  Finally, I reached the Friday night lights.

Little did I know, as a young boy standing on that sidewalk, that years later, after a lot of hard work, not only would I be playing under those lights on a Friday night, but be captain of the football team playing there.  

I wonder if I went back to that small town on a Friday night in the fall, if I would find a young boy standing on a sidewalk, looking at the lights dreaming.  I hope so because it was an incredible journey for me.

Life’s journey is full of dreams and aspirations.  Never stop following your dreams because the journey is worth all the effort.  Even if you fail to reach what you are after, you will be better because of the journey.

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Business Strategy 2

In my last blog, I talked about the key components required for developing a Long-term Strategy.  Today I am going to talk about a few of the most common reasons Long-term Strategies (LTS) fail.  They are:

  1. Developing an LTS simply for the sake of having one. Every good organization has an LTS, so you feel you need to ‘put one together’ to be considered a ‘good’ organization.  Great cocktail talk; however, it won’t help you move forward.  If you are going to develop an LTS, do it right.
  2. Being disconnected from the reality of your environment. You MUST connect the reality of your current environment to where you want to go.  Don’t get caught up in a desired future perspective that isn’t connected to where you are coming from.  This is part of your ‘reality check’ as you move forward in your process.  It is also a critical component for resource decisions.
  3. The LTS is unrealistic because of too many objectives or goals. In other words, you simply don’t have the resources (time, people and money) to ‘effectively’ go after all of them.  A few well-defined objectives targeting critical strategic issues where adequate resources can be applied is a key ingredient for a successful LTS.
  4. You have the wrong people in leadership positions. You must be sure that the right individuals are in place to drive the design, development and implementation of the LTS.  They must be standard-bearers for the LTS to keep the company on track.
  5. Shelf-plan. I can’t tell you the number of times I have asked a business owner if they had a Strategic Plan, or Long-term Strategies; in response, they pointed to a binder on a bookshelf.  When I asked them to give me a run-down on their plan, they were unable to clearly articulate the strategic perspective and roadmap of the plan.  This is as bad as not having a plan or LTS, and perhaps worse because it gives you a false sense of comfort.
  6. Not having accountability. At every stage of development and implementation, someone must be accountable for implementing the objectives of the LTS.  This is accomplished by having measures.  It is simple; no measures, no LTS.

Remember, developing a Long-term Strategy forces you to think through all aspects of your business.  The good, the bad, and the ugly.  It highlights both potential problems and uncovers opportunities.  In the end, you will be better prepared to improve the performance of your business in the future.  Avoiding these obstacles increases you chances of developing and successfully implementing your Long-term Strategy.

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Business Stategy

Long-term strategy is a roadmap to a desired vision of a future state.

Long-term strategies in business are ubiquitous; everyone has them.  Just ask a business owner to tell you about his strategies and they will give you an earful.  With such a focus on these strategies, why do so many of them fail?

The primary reason many strategies fail is that they are disconnected from the environment within which they must play.  In effect, they are not designed to be clearly understood by those who must implement them.  They are often filled with buzzwords, an over inflated goal/objective, and a lack of clarity.  It sounds great, but it is hard to get your arms around.  They are devoid of elaboration, so it is up to the individual to figure out what they mean.

Long-term strategies must be both precise and broad in scope.  They are precise enough to enable the implementers to clearly understand the objective and broad enough to enable the implementers to journey beyond customary limitations; they have to be able to make adjustments to resources (time, people and money) based on what they are learning during implementation.  They must have some flexibility.

Successful long-term strategies:

  • are designed from a future perspective. You must develop a clear vision of that future state, and then design the path to get there.
  • are carefully chosen from a list of possible strategies. It is a selection process; it is choosing the most important strategies that will have the greatest chance of being successfully implemented.
  • require buy-in by senior management; i.e., commitment. Commitment must be observable.
  • require providing direction and the distribution of responsibility.
  • have a reasonable time frame; e.g., three to four years. In most businesses you cannot be precise enough in a six to ten-year strategy.
  • require making difficult choices, specifically resource decisions (time, people and money). You must make decisions without prefect data and weigh the consequences of those decisions; both to the current state and to the strategy.
  • are measurable; they have metrics.
  • are executable living documents.
  • are communicated to the proper levels of the organization.

Long-term strategies can simply be a great idea with limited action, or they can be a game plan with players on the field.  Only the latter keeps score.

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Meeting2

Early in my career, I was in a very contentious business meeting where we were discussing the valuation and contribution of a business unit to the Corporation.  There were five of us.  The person responsible for the business unit, the Corporate treasurer, a major shareholder who was actively involved in the Corporation, the business unit comptroller, and me (Strategic/Financial Planning).  In the end, we decided on a strategy for moving forward.  It was my responsibility to design, implement and measure the actions necessary to implement the strategy.  –  This is what happened at the meeting.

After the meeting, I met with each individual to discuss the strategy.  I was somewhat surprised at the different perspectives.    It wasn’t as if these individuals weren’t listening, it was the fact that they processed the meeting based on their position, responsibility, vested interest, biases, and experience; which is normal.  They saw the big picture, but it was heavily tinted with their lens.  This is what really happened at the meeting.

It was up to me to pull this all together, which meant that I had to work with each individual to get a better understanding of the “corporate” perspective of the strategic objective, and how their role was critical to accomplishing that objective.  We all had to be on the same bus, and we had to leave our personal baggage on the curb.  This is the only way you can get buy-in.

I looked at this as a mathematical algorithm with five parts to the equation.  Each part could stand alone to accomplish something.  However, in order to accomplish something bigger, each part had to understand the equation and their contribution/commitment to that formula.

Never assume that everyone sees the big picture in a meeting; including you.  This applies to all meetings, even between two people.  You must test this to be sure; before you take actions.

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Elderly Worker 1

It was a beautiful morning as I enjoyed my cup of coffee at a local Panera Bread waiting on a friend.  Next to me sat four gentlemen, all of whom were in their sixties, talking about how much they missed working.  From what I could tell, one had been some type of manager, one an engineer, another a salesman, and the other, I believe, a teacher.

My friend, a small business owner, arrived about fifteen minutes later.  Eventually, our conversation wandered into what I see as a major concern for companies today.  They can’t find qualified employees.  Tragically, one of the top reasons is they often fail drug tests.  In general, his business requires an average level of computer competencies, a college education or applicable experience, people skills, and self-motivation.  He will train the right people.

As we were talking about this challenge, I pointed over at the next table and asked, “Would you hire any of those men?”  His face said it all.  They are old and probably retired.  “Same question.  Would you hire any of them?”  “Probably, if they were qualified and wanted to work.”

I told him about the conversation I overheard.  At least three of these men are probably qualified to work at his company.  When it comes to the “age” thing, it is amazing how dismissive hiring people are of this group.  Maybe many of them do not want to work full-time but would work part-time.  Maybe they need some small consideration.  But most importantly, maybe they are exactly the type of employee you need.  (The lady who waited on me had to be in her seventies; working right next to someone in their twenties.)

Years ago, I was teaching a management class at a local university.  One class I devoted to “generational diversity” and how it can enrich a company culture.  They may not be as ‘up-to-date’ as younger generations but I guarantee you they are way ahead of the curve when it comes to experience.

I find it interesting that people, without hesitation, would vote for a Senator (6-year term), Congressman (2-year term), or President (4-year term), that were in their seventies, or even eighties, but wouldn’t hire someone of the same age group because they were ‘old.’

To the seniors who want to work, don’t hesitate to let people know.  To the companies desperately looking for qualified employees, reach out to this group.  You will be amazed at what is available.

 

 

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Numbers.png

In 1987 a super computer could process 2,000,000,000 calculations per second.  Think about that for a ‘second.’  In other words, this is the processing power of two billion people for one second.  That was a big deal.

Fast forward thirty years.  On June 8, 2018 the US Department of Energy introduced a new supercomputer from IBM that could perform 200,000,000,000,000,000 calculations per second. Using all of the humans on earth (approximately 7.0 billion), it would take every human doing a calculation each second for almost a year to match what this new supercomputer could do in one second.

Take a look at the following chart.  Note the numbers (powers of 10) along the bottom.  During the late 1980’s the personal computer could perform around 12 million calculations per second (126).  Look at the current time period; about 100 billion calculations per second (1011).  To put this in perspective, the IBM super computer mentioned above is (1017).  A gigantic difference.

Information Data Transition

Source

In a decade or so, the ‘calculations per second power’ of super computers today will be available to every day users.  You may ask, what does this mean to me?  My business?

Have you been reading the articles on Artificial Intelligence?  Virtual Reality?  Block Chain?  Data Analytics?  This is an incredibly important transformation and it is going to impact everything you do.  And, it is happening quickly.  You cannot ignore the impact this is going to have on your business.

Therefore, understand the advanced technologies that will impact, or are impacting, the critical components of your business (manufacturing, distribution, logistics, marketing, etc.).  Then, find ways to utilize that power for more effective decision-making.  Don’t wait until you have to; catch-up is very expensive.

 

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Adversity

One of the greatest lessons I ever learned, was dealing directly with people in a difficult situation.  It did not matter if it was difficult for me, or difficult for them.  Face to face, or on the telephone; nowhere to hide situations.  The more I had to live through these occasions, the stronger I became in dealing with adversity.  I learned early on that it is almost always better to deal directly with someone in a difficult situation than trying to handle it from a distance.

Today, with the exponential increase in messaging (email, voice messages, LinkedIn, Facebook, text message, etc.) it has become too easy to avoid people in uncomfortable situations.  Send a text, email, form letter, or better yet, if it is difficult for you, avoid it all together.

The difference between someone who plays on the field of adversity when necessary and someone who sits in the top bleacher of the stadium avoiding the conflict, is confidence and courage.  You cannot gain confidence or build courage from the bleachers.  Some of the most successful people I know would go out of their way to have a face-to-face meeting in a difficult situation, even when a phone call would have worked.  Why?

I have seen a CEO meet with a supplier who lost in a major bidding contest that had an adverse impact on their business.  What did he do?  He delivered the bad news and provided words of encouragement.  I have also seen a CEO avoid a minor difficult situation, by not answering telephone messages and emails.  He didn’t know what to say.  In the first example, the business is flourishing, in the second, the business struggles month to month.  Think of the example being set by these CEO’s.  Which company would you rather work for, buy from, partner with, or supply?

This is not just a message for CEO’s, it is a message for anyone who wants to strengthen their brand.

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Outside the Lines

Have you ever watched a small child who was learning to craw go exploring?  They move about three to five feet, stop, look back to see if you are still there, and then take off again.  The more comfortable they become, the less they look back.  Somehow, many of us as adults, have lost that drive to “explore.”  Why?

Obviously, a young child doesn’t know when they are moving toward something that will cause discomfort.  Over time, they will learn, and become more selective about what to explore.  In any case, during the maturation period, they will lean toward exploring, and not worrying too much about discomfort.  They will grow up in a world riddled with rules, limits, and restrictions; even so, they will continuously test the rules.  By the time they are adults, they know where the lines are and have a predilection to stay within them.  –  Whoa, I better not go there.  It’s comfortable here.

From a business perspective, we need to operate more like an exploring child, than someone who lives within the lines.  Often the ‘fear of failure’ is the deciding factor in trying something new.  However, if you want to survive, you must go outside the lines.  And believe me, from a resource (time, people, and money) perspective, it is much better to choose to explore, than to be forced by outside forces to cross the lines.

While there are many processes that business owners use to play outside the lines, most can be narrowed down to a few simple steps.

  1. You must understand your comfort zone, AND why you are comfortable there. This is your first line to cross.
  2. Determine the best and worst-case possibilities for your journey. What is the best thing that can happen to your business and what is the worst thing that can happen to your business?  This is your second line to cross.
  3. Visualize what success looks like. This is more than a glossy picture, or sketch, of your business.  You must identify the most critical attributes of that visualization.  It’s like, being able to describe your (future) business to a new acquaintance.  Mentally, spend time there.  This is the third line to cross.
  4. At every step of the journey, you must capture the learning process.
    – What resources do you need? (time, people, and money)
       – What did you try? Did it work, or not work?  Why?
    – What competencies and capabilities are you building?  What are you going to
    need when you get there?
    – What is happening to your base business as you move along?
    –  In other words, craw three to five feet, stop, look back, and then take off again.

To create that future business, you must play outside the lines.  Successful businesses who succeed in this transition will be those that follow a plan that enables them to manage risks and seize opportunities along the way, while continuously pushing their organization forward.

It is an exciting journey; enjoy the trip.

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Part

Maineville Manufacturing (FICT) was a medium size second generation company producing metal parts primarily for a handful of larger companies.  While competition was challenging, their long-standing reputation for quality and service usually placed them near the front of the line with their customers.  Like many privately held companies their supplier base, for the most part, had grown up with them.  One of their oldest suppliers (OS) was also a second generation business whose relationship was established by the founders of both companies.

After a long battle, Maineville Mfg., finally landed a large customer who needed a sophisticated component part for a new product.  The new customer would generate very good volume but with much smaller margins than Maineville Mfg. was accustomed.  They knew that they could build the capacity to produce the component part; however, it required a very high-quality precision fitting.  (The prototype component part was internally produced by Maineville at a very high cost, primarily the result of the precision fitting.)

Maineville Mfg. had identified two outside suppliers that could produce the precision fitting; one was highly recommended by the new customer.  Their only existing supplier that could produce the precision fitting was their long-time friend OS.  All three provided a good sample fitting during the development stage.

Maineville’s problem was that OS was excited about possibly being part of the new venture.  However, Maineville knew, based on experience, that OS might not be as reliable as the two outside suppliers.  Over the years, Maineville had developed internal quality control processes, at their expense, to occasionally catch and fine-tune parts received from OS.

Now that Maineville had landed this new customer, they had to lock in their precision fitting supplier.  The next step required Maineville, within sixty days, to produce a test batch of component parts, validate engineer processes and quality control standards, and confirm reliable sourcing relationships and specifications.

Which supplier should Maineville choose to produce the precision fitting, and why?  What did Maineville do?  What would you do?  — This might surprise you.  They worked with OS to put in place a rigorous quality control process at OS.  Their long-term relationship was that important to them.

Looking back, it would have been much better if Maineville had addressed the quality issues with OS when they first started, rather than covering for them over the years.  Don’t worry about “hurting feelings” when business issues are at hand.  Be respectful, be considerate, be understanding, be fair, but most of all be honest about the situation.

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Snow Storm Christmas tree

It was a cold winter night with snowflakes falling as big as quarters.  I was about five years old and was sitting on a sled being pulled by my grandfather through the streets of our small town along the Ohio river.  It had already snowed about six inches that day with no sign of letting up.  We were off to get our Christmas tree at the local market/store about four blocks away.

As I was being pulled through the streets I marveled at the beauty of the snow glistening in the night, houses decorated with Christmas lights, the smell of fireplaces, and the sound of the sled gliding through the snow.  What peacefulness.

Outside the store was a large area filled with rows of Christmas trees sitting in concrete blocks.  Around the perimeter were oil drums cut in half stuffed with burning firewood.  As my grandfather visited with some friends, I explored this man-made forest of giant trees, wandering aimlessly along make-believe trails.  Every now and then, the owner would walk among the trees shaking them to remove the heavy snow.  Of course, I would quickly dart to the tree to be smothered with the snow.  I think he shook the tree harder because I was standing next to it.  Tree after tree I got hammered with snow.  Then a dash to the fires to get warm.

The trip home was not as enjoyable as the ride up because I had to walk.  The Christmas tree occupied my spot on the sled.

My grandfather has been gone for many years, but each year about this time I recall this incredible journey as if it was yesterday.  Merry Christmas grandpa!  And, Happy Birthday – he was born on Christmas Day.

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