Cheating Death: How to Manage Your Business Life

Organizations, like living organisms, are born to die. Often their end comes naturally once they have fulfilled their role in a mature marketplace. Others eventually kick the proverbial bucket because they underestimated the ability of an unknown competitor who emerges and takes them out. The corporate graveyard is also full of organizations that died prematurely shortly after birth or passed on to the great beyond while they were still in adolescence. Fewer still are those who lived to a ripe old age and are lauded instead of eulogized for their longevity, creative innovation and sustaining ability over multi generations. What makes the difference between the winners and the losers in this reality show race for business survival? What is it that gives businesses blessed with long life lines the ability to prolong their years? How can we leaders help our businesses (and possibly our careers) cheat death? Being the best student

As an educator I love that one of the first and foremost qualities most great CEOs possess is their drive for knowledge. New York Times' columnist and author Adam Bryant includes the trait in his book The Corner Office: Indispensable and Unexpected Lessons from CEOs and I couldn't agree more. As managers we may exude self-reliance to spare in front of others. But deep down and behind the scenes, a winning leader is one with a passion for wondering how things work and what everyone else knows. Great leaders ask to understand, question to challenge the status quo and imagine to promote the possibilities of change. It is this search for deeper understanding which may allow us to connect the unconnected in a way our competitor does not see.

Keeping your vision clear

Leaders don't say "if" or "when." More than anything else, these conjunctions can kill a business' acceleration before it even leaves the gate. Those of us with a clear vision not only stay on the right track. We also bring others with us. As Jim Collins writes in Good to Great, real leaders look realistically at their environment and then they do something about the problems they find. Crafting a vision with all stakeholders in mind, based on the situation either good or bad, allows leaders to engage and enlighten as well as keep a company grounded.

Is your organization on its death bed or in a state of hospice? Few businesses these days find themselves lucky enough to be juggling unlimited resources. The status quo is now "less." Right here and right now, organizations need leaders who are capable of repairing damage today and authoring change strategies tomorrow. Our nation and world continue to grapple with economic issues and new political challenges. In a time when so much is at stake for business and careers,], practicing and pursuing the art of great leadership is not and never should be a spectator sport. With death of a business as the possible consequence, the stakes are just too high.

Commerce Matters: Review of Cheap: The High Cost of Discount Culture

27-May-2010Published in: Ladue News Author: Benjamin Ola. Akande

Who doesn't like a bargain? Saving money on everything from a pair of designer jeans slashed to half price to driving miles for gas a few pennies cheaper gives consumers a thrill and the sense of accomplishment. But what is the real cost of those bargains? That's the question posed by author Ellen Ruppel Shell in her book Cheap: The High Cost of Discount Culture. And according to Shell, we are all overpaying.

Cheap starts with our nation's celebration of getting a good deal, like buying Manhattan for a few dollars worth of beads. But unlike land in those early days, everything else that was bartered or bought was usually in short supply and cost too much for the average American. Then mass production exploded and our population shifted from farms to cities. People needed goods, and convenience came into play. Still our parents and grandparents, the author says, were able to find pretty good value at a pretty good price. It's this distinction that we've lost. Consumers now equate low price with value. And the return on that investment, the book explores, is a lifetime of disposable goods.

To exemplify this new disposable lifestyle, the author spotlights the furniture manufacturer Ikea, which she says designs to a price. The company sets a price for a table, has artisans design it, then squeezes suppliers to get their products at the lowest possible cost. Inevitably corners are cut in labor, in concern for environmental issues, and of course in quality. The end result is a stylish table for little money that will last just long enough for the next trendy table to be designed.

The author says this disposable mindset makes consumers 'deal-prone.' We shop for the lowest price no matter whether we are getting the best value. It doesn't make sense, she admits, when we think about it rationally. But when we see something on sale for half off, we are more likely to buy it even if it doesn't fit our needs. Deep down we know this. But more important, manufacturers and retailers know it and price accordingly. Now, more than 30 percent of all goods are sold at discount compared to 30 years ago because marketers know a deal will get our attention and could compel us to buy.

So what are we really getting in our search for the deepest discounts? From a social responsibility standpoint, the author pinpoints violations of human rights and the environment in the food industry, as well as child labor abuses in manufacturing. From a common sense position, the author argues we are not doing ourselves any favors by buying cheap then discarding poorly made or not needed goods.

The power to turning around our love of a great deal, the author writes, is in our own wallets. We must demand to know the true costs of what we want to buy and then muster the strength to walk away without a purchase. That may be easier said than done for a country still reeling from a recession and historically high unemployment. But according to the author, in the long run, "releasing our country's ties from the low-price imperative could be priceless."

Commerce Matters: Review of Money for Nothing

23-December-2010Published in: Ladue News Section: Commerce Matters 

What's the cost of not doing your job? A letter of reprimand? An unpaid leave? Dismissal? What, if by failing to do what's expected of you, you cost shareholders $60, $90 or more than $200 billion? That's just what happened to Merrill Lynch, Fannie Mae and Citigroup when their corporate boards dropped the ball. Unfortunately, according to the authors of Money for Nothing: How the Failure of Corporate Boards is Ruining American Business and Costing Us Trillions, unless we change our game plan, that ball is still loose.

Money for Nothing examines how company directors and their negligence played such a big part in the globe's recent economic meltdown. The book also argues that unless things change, the same is destined to happen again, costing consumers even more.

As authors John Gillespie and David Zweig explain, it starts at the core. Many who are entrusted to act for the benefit of the company are simply warming board meeting seats. And instead of monitoring risks, providing judgment and supervising managers, company directors (who can receive more than $500,000 for their time) serve only as 'yes' men and women for the CEO.

"Some CEOs want sports and entertainment celebrities with little or no relevant experience in the boardroom," Gillespie recently told Fortune magazine. "They add a kind of prestige, ask few questions and are especially prone to agreeing with management." And this, the authors say, is one of the biggest problems with the system. The lack of checks and balances of the board, and not necessarily from legal regulations, is what's causing carelessness.

In the end, the authors offer 24 ways they think boardroom culture could be changed for the better. They include imposing term limits for directors, limiting directors to serving on three or fewer boards, allowing the removal of directors through the call of an 'extraordinary general meeting' and vote, and banning CEOs from also serving as board chairs.

Right now, the authors say shame is the biggest thing controlling boards, and the release of embarrassing information is the only consistent way of getting something done. What if we started enforcing the rules of good business when it comes to our investments and demand more from the boards who influence the companies we put our money into? Fifty-seven million U.S. households own stock. The money lost by companies going bankrupt and going to CEOs in the form of outrageous pay packages should infuriate us all. The authors say we need to direct our anger at insisting on reform and making sure boards hired to protect our money do just that.

"Ignorance by many enables abuse by a few," they say. Yes, boards play the single most important role in making sure companies and the country's financial future remain bright. But they will only succeed if we make them.

Commerce Matters: Review of The Credible Company

22-April-2011Published in: Ladue News Section: Commerce Matters 

Business has embraced social media. Around the world more and more industry leaders are seeing the advantage to the almost instantaneous and far-reaching communication tools now available on line. 500 million people like, post and poke each other on Facebook. DM's from 110 thousand Twitter users fly on line everyday and LinkedIn is giving more professionals a networking edge throughout the world. But while industry leaders are eager to jump on this communication band wagon to promote and sell their product, work ethics or mission to the public many are leaving their most important resource out of the information loop: their employees.

The Credible Company by author Roger D'Aprix is an argument for business leaders put their employees at the front of the line when it comes to communication. Penned by an expert internationally known for his communication strategy work with scores of Fortune 500 companies, The Credible Company outlines not only the reasons the information links with workers need to stay intact but also how to strengthen them with some practical and effective advice. No longer are workers the cost of doing business, D'Aprix writes. They are in these times of lean resources the means. Added to that is an increasingly complex global economy where employees now work between companies and across borders and an increased skepticism from employees about the communication they receive at work. The result is angst among a workforce that not only affects performance and output but also erodes confidence and trust.

Preventing this is easy, says the author, who has identified several principals for any organization which wants to improve communication, embrace employee enthusiasm and maintain trust among its workers. INFORMS is the acronym D'Aprix uses to pull his principals together: Information, Needs on the job, Face-to-face, Openness, Research, Marketplace, and Strategy.

Scattered throughout The Credible Company are lessons learned directly by the author from a career of communication in the business world. Some herald the success stories. Others are mistakes none of us want to make. Take D'Aprix's experience at Xerox in the early 1980's as an example. Just weeks after proposing a "full employment" policy essentially guaranteeing certain employees lifetime job security, D'Aprix learned of management's plan to lay off up to 15% of its workers. Overwhelmed by the reversal of policy but determined to implement a plan for internal communications of the issue, D'Aprix found himself facing a leadership group who refused to talk to their employees. The results were devastating. Rumors elevated the number of workers to be fired; the media bombarded Xerox with questions and market shares collapsed. The inability of senior leaders and communication professionals to work together blew up a problem that would send Xerox into a tailspin. Only after seven long years would the industry leader pull out of its dive.

The Credible Company is a quick read of less than 160 pages from cover to cover. But its size is no reflection on the importance of its essential message and the ease that we can all put the author's ideas and experience to work. In today's ever-changing world, communication professionals need to realize the importance of information to a skeptical audience and organizations must recognize the need to become more transparent. As I write this our political leaders have only just averted a government shutdown. I can't help to wonder whether an agreement might have been reached before the 11th hour if some of our elected had copies of The Credible Company in their briefcases.

Review of The E-Myth Revisited

A lot has happened in the 15 years since CEO and bestselling author Michael Gerber first published The E-Myth. More people are blazing an entrepreneurial trail and starting their own business. Some make the move with the belief they hold the business plans to the next Wal-Mart or Starbucks. Others yearn to be their own boss. And a few feel forced to hang out a company shingle due to the economy and their current employment outlook. The unfortunate truth is that this year alone, more than a million people in the U.S. will start a business. And in the end, according to the Department of Commerce, at least 40 percent of them will be forced to close shop within the first year.

The problem, the author argues, revolves around the 'e,' or entrepreneurial myth. This falsehood is based on an assumption by those starting out that they will prosper with the formula Desire + $$$ = Success. Nothing, according to Gerber, is further from the truth. In reality, most businesses fail because the entrepreneur is not a visionary at all. Most businesses are started by the workers, the doers and the technicians behind a specific job. Without a true entrepreneurial outlook or 'wonder,' these business owners will find themselves not working for another, but instead working themselves to death in an attempt to start their new life. They don't ask and force an answer to the most important entrepreneurial question, I wonder what my business will be like?

If they do, then the independent business owner must prepare to face the phases of any business' life (infancy, adolescence, beyond the comfort zone, maturity and the entrepreneurial perspective). Gerber says successful business owners embrace these phases and establish a business development process, which gives them needed tools to face and sometimes pre-empt the world full of changes each business confronts. The real 'secret sauce' of success then comes in the operating system of the new business, which enables a company to differentiate itself from others. The standout brands who excel at this are McDonald's, Dell Computer and FedEx. Each has found that uniqueness and has moved fast forward. Rest assured, the author says, any business can do it, and do it well. According to Gerber, this turn-key system is nothing more than an organized methodology for "producing their result in their way for their reason" and solving a genuine problem with a genuine solution.

Every year at this time, I have the honor of addressing the outstanding graduates of Webster University's Walker School of Business. This year, I reminded the Class of 2011 that if they learned anything while at Webster, I hope they learned that learning is not a destination: It's a lifelong journey. Such is the lesson of The E-Myth Revisited and in the end, what we can learn from it is how to keep learning and wondering, so any of us can achieve the right business attitude needed to succeed.

Review of Indispensable and Unexpected Lessons from CEOs

6-Jul-2011 Do you have what it takes to occupy the corner office? Does residency require myriad academic degrees, a history of moneymaking successes or maybe a family friend on the board? The truth, according to author Adam Bryant in his new book, The Corner Office: Indispensable and Unexpected Lessons from CEOs, is that most leaders share some specific qualities or 'X factors' any of us could develop. And better yet, obtaining them will make anyone a great manager or better employee.

The author, a Sunday weekly featured columnist for The New York Times, compiles more than 70 interviews with CEOs, such as Alan Mulally of Ford Motor Company, Ursula Burns at Xerox, John Donahoe at eBay and Steve Ballmer at Microsoft. Bryant's book offers first-person accounts that resonate with lessons from leaders at all levels of industry-leading organizations. These leaders offer rich and entertaining lessons learned in the school of hard knocks.

All of Bryant's interviewees share five unique qualities: passionate curiosity, battle-hardened confidence, team smarts, simple mind-set and fearlessness. These characteristics, the author contends, make the difference between getting that corner office or being relegated to a room without a view.

As an educator, I love that the first quality of great CEOs is that they are the best students in the room. In front of employees, customers and shareholders, they exude self-reliance to spare. But behind the scenes, Bryant writes, all the CEOs admitted to an intense curiosity for how things work and what others know. Their ability to ask the right question was more important to them than being the smartest guy in the room. The inquisitiveness of being a lifelong learner is an important attribute of leading that is often overlooked. Every leader can learn from Bryant's assessment of a corner office holder's 'team smarts.' Who among us doesn't need the ability to know who has their back, who is a playmaker or who will make a great assist? Successful CEOs know how their employees will act and more importantly, they know how they will react. Team smarts, Bryant writes, is the skill of recognizing the players a team needs, then bringing them into the huddle around a common goal. But my favorite stories are those about fearlessness. Risk-takers are those who do more than they're told to do. They knock things off-kilter, not because they want to hurt a good thing, but just to see if 'good' can be made better. This is central to those in the corner office and it is what they look for in others. They eat change for breakfast and are still hungry.

Author Bryant admits that learning to lead is hard and although the title, perks and power might seem alluring, we all know the job is not for everyone. According to The Corner Office, getting to a company's top spot is not something out of reach for anyone. This is a great summer read and you are sure to find some pertinent takeaways to put to use when you get back into the office.

Toyota: Opportunity Born Out of Failure

Date: Thursday, February 25, 2010 3:15 PM CST Published: Ladue News

Section: Living > Wealth, Commerce Matters by Benjamin Akande

Author: Benjamin Akande

In his bestseller The Tipping Point, Malcolm Gladwell tells a remarkable tale of the relative importance of word-of-mouth and how in the age of e-mails, we may have overlooked this simple yet very valuable and powerful communication tool. The story also speaks directly to the greatest auto recall ever. Toyota is facing the potential death of an illustrious brand name despite doing so much right until just a few weeks ago, when it was revealed that 9 million vehicles manufactured by the company were putting the lives of drivers and passengers at risk due to rapid and unexpected acceleration. Toyota is not new to recalls.

In 1990, just after Toyota’s Lexus division introduced its line of luxury cars in the United States, the company realized that it had two minor problems with the LS400 line that required a recall. Lexus had decided from the beginning to build its reputation around quality workmanship and reliability.  Then, just over a year after the brand’s launch, the company was being forced to admit to problems with its flagship model. While most recalls are handled by a public announcement via TV, radio or letters to owners, Lexus decided to make a special effort in contacting its customers in the most personal and direct manner: The company called each owner individually on the telephone the day the recall was announced.  When the owners picked up their vehicle following the repair work, each car had been washed and the tank filled with gas.  If an owner lived more than 100 miles from a dealership, the dealer sent a mechanic to his or her home.  In one instance, a technician flew from Los Angeles to Anchorage, Alaska, to make the necessary repairs. Toyota emerged from what could have been a disaster with a reputation for customer service that continued until this present recall. One automotive publication later called it ‘the perfect recall.’ By going the extra mile, Lexus successfully kick-started a word-of-mouth epidemic about the quality of their customer service, a message that would have been lost in a letter, fax or media broadcast.

Perhaps Toyota can take a page from its own history to regain the trust of current and future customers by doing whatever it takes to prove the company is dedicated to safety--and providing personal service while doing it. During the repairs, for example, the company could offer free car rental, gas vouchers and even food and restaurant coupons. Toyota is renowned for its manufacturing prowess; it’s time to focus on overcoming its public relations nightmare.

How effective Toyota is in communicating to millions of customers worldwide will determine whether the world-class automaker becomes a memory in the not-too-distant future. There is a real opportunity here for Toyota to create best practices that could become the reference point and industry benchmark on recalls. Somebody once said that we learn more from our failures than we do from our successes. I hope Toyota takes heed and makes this very serious situation an opportunity born out of failure. Either way, word-of-mouth is going to count. In a few months, will people be singing Toyota’s praises or its eulogy?

Dr. Benjamin Ola.  Akande is Dean of the School of Business and Technology at Webster University.  Follow him on Twitter: @Benjamin_Akande

Commerce Matters with Benjamin Akande

Source: The Ladue News Review: Getting to Plan B

Date: Thursday, January 21, 2010 11:08 PM CST

Plan B is a place no one wants to go.  In our society, a Plan B isn’t synonymous with success. Even its name comes off as the also-ran, the ‘next best’ thing or the back-up when all else fails. But the truth is, many Plan B’s are better than their alpha predecessors. The smart executive makes sure they are as well-researched and as well-grounded in reality as any of the other plans before them. And as authors John Mullins and Randy Komisar note in their latest bestseller, Getting to Plan B, those ‘also-rans’ could be your answer to beating the odds to succeed.

To prove their point, Mullins and Komisar load their narrative with examples of successes snatched from the jaws of defeat.  To find one of the most striking Cinderella stories, you need to go to Google. No, I don’t mean its search engine.  Look into its business plan.  Google’s original plan was purely academic, with two students at Stanford trying to find a better way of finding information. They did, and by invitation or word-of-mouth, a following was born. But as the demand for Google grew, so did the need for money to maintain its infrastructure. Creators Sergey Brin and Larry Page found themselves in need of revenue.

Brin and Page considered advertising ‘evil,’ so the several Plan Bs that followed focused on investments and licensing. The results were marginal at best, so Google set out to find a better method that wouldn’t fly in the face of their mantra to provide information to all, not just those who can afford it. The answer was paid listings (well separated from Google’s organic searches), and then a cost-per-click model. To this day, no ads are displayed on Google’s home page.

Throughout its evolution, Google’s executives continually identified ‘leaps of faith’ they were making along the way through each of their new plans for revenue.  The reality is that left unguarded, these untested questions (which many businesses bank on) can easily sink a company into failure.  But, according to the authors, Google survived by recognizing them and seeing how they related to the five elements that determine a business model’s viability: revenue, gross margin, operating, working capital and investment models.

As the economy continues its limp out of the recession, more enterprising entrepreneurs will be forced into the world of the self-employed or to take matters into their own hands and start their own business.  For these, the lessons of Getting to Plan B are invaluable.  This is our year to embrace new ideas, to be bold enough to innovate and challenge conventional wisdom. We are all entrepreneurs looking for the next best thing, whether it is a new product or a better way to do things.  All require a solid business plan that is data-driven, strategic, well thought-out and crafted from the lessons learned from other peoples’ mistakes. By heeding the insight in this book, our second plan or backup may turn out to be the best plan of all.