Mentors: Because they’ve been there and done that!

Do you need a mentor? If you’re navigating tricky new territory in the marketplace, chances are that your mentor has probably had to navigate a similar situation at some point in their past. They can share their advice on how best to maneuver through a challenging situation, and lessons they’ve learned through similar experiences from their past.

A mentor’s primary role is to provide you with counsel in the execution of your responsibilities. A business owner or CEO’s job is all about doing the right things and doing them effectively. A mentor’s job is to ensure that you focus on the most important aspects of the job, and that you do them well.

Justin Norman CEO of JD Norman Industries started a manufacturing business without any operating experience before. To compensate for his lack of experience Justin developed relationships with mentors with either sitting CEOs or retired CEOs who are in a phase of their life where they enjoy mentoring and answering questions. Norman explains, “The stuff that I’ve seen for the first time in my life others have seen it 7 times before. So I’ve gained a lot of insight from that because it’s clearly a blind spot of mine going through the growth and the operations of the company for the first time.”

Mentors can also help you set career and personal goals, hold you accountable, expand your network of contacts and provide insights into the “little things” that can make a big difference in growing your business and in developing your leadership skills.
When selecting mentors you should choose a mentor who is working or worked in a similar industry as yours. Your mentor should be someone who inspires you with the success of their career and whose professional achievements you hope to emulate. Because they’ve learned a lot and developed many skills in their career, they’ll be able to guide you towards the best ways to learn the skills you’ll need to achieve similar success.

The New Economy: How is it Treating Your Business?

How is the New Economy treating your business?

If you own or run a business today you know we’re experiencing an economy that is different than anyone has seen in the past. It is five years since we went through the worst economic crisis since the Great Depression.

The Great Recession brought us the New Economy

Now called the Great Recession, we saw:
• The loss of 8.7 million jobs
• More than half of adults lost a job, took a pay cut or had hours reduced
• Trillions of dollars of wealth was lost where almost everyone was touched
• Home values dropped dramatically nationwide, at one point 11 million homeowners were upside down on their mortgage and tens of thousands lost their homes
• The United States weren’t the only country impacted by the economic crisis. Financial uncertainty was repentant in Europe as nine countries saw their standard and Poor’s credit rating downgrade in 2012

We’re still in”Recovery”
In spite of numerous efforts by the government to help the battered economy get back on its feet, the “recovery” is still a work in progress. While some business sectors and regions of the country have found their footing, others are still digging themselves out of a hole.
Here is a glimpse of economic indicators that give both hope and provide continued warning signs:
• We’ve regained the 8.7 million jobs that were lost but many were replaced with jobs that pay less sometime much less. Manufacturing and construction jobs that pay around $25 an hour have been “replaced” with retail and restaurant jobs where pay is $12-16.96.
• Unemployment has dropped from nearly 10% to 6.4% in May 2014. Unfortunately the plight of the long term unemployed continues to worsen. 3.4 million Americans have been out of work for more than 6 months. This is two and a half times what is was pre-recession. Many who have found work did so with part time jobs or short term jobs. While many others have simply left the labor market and stopped seeking employment.
• College graduates are feeling the strain of the economy as unemployment among recent college graduates is still above the national average at 7.6%.
• Compounding the challenges recent graduates face looking for work is their mounting student loan debt. In the last ten years this number has grown from $260 billion to 1.1 trillion. The average student graduates with about $30,000 in debt. Many predict this to be the next “bubble” to send shock wave to our economy.
• Although the housing market is improving most metro areas find their home prices 65-80% of their peak value. The $2 trillion equity value lost may never be recovered.
• Household net worth increased to a record high of $81.7 trillion. That’s the good news. The bad news is only the very wealthy benefited. The rich got richer and everyone else got poorer.
• “Small business optimism continues its winter hibernation with the latest Index dropping 2.7 points to 91.4, a reading that historically has been associated with recessions and periods of sub-par growth. The one highlight in the January (2014) survey, a surge in hiring plans, was crushed in February by the continued onslaught of a wintry recovery now in its 5th year.” – Bill Dunkelberg, NFIB Chief Economist
• The US is still the global economic leader and is moving along better than much of the world especially debt-ridden Europe and ever- stagnant Japan. However, our growth is only moving at a 2-3% pace.
• Picking up the United States lack of growth has been China. They’ve been growing at a 9.5-10% rate over the past few years. This number is trending downward this year as economists forecast growth at 7.5%. As China’s role in the global economy continues to grow (They are now the world’s biggest trader of goods), every economic bump they experience will be felt everywhere.

Silver linings in the New Economy
In spite of these challenges many industries and companies large and small are experiencing record growth and profit. For example:
• After stumbling badly in 2011, Netflix found success as a non-network by offering original television programming. Their subscribers exceeded 40 million and quarterly earning quadrupled.
• Entertainer Beyoncé turned traditional album marketing on its ear by releasing an iTunes exclusive album in the dead of night with no promotion. Its success was unprecedented. In a social media world, free publicity is the best kind of publicity, and the combination of surprise and artificial scarcity was a great way to get people to actually open their wallets for content.
• AMP Americas is a Chicago-based company that makes compressed natural gas. While the alternative fuel market already has plenty of innovative business models,” this one truly stands out: Its fuel is converted from cow manure.
• Lexington, N.C.-based Lolly Wolly Doodle, earns more than $10 million in annual revenue. Two factors lie at the heart of their success: an innovative manufacturing approach known as “just-in-time” manufacturing and a commitment to social commerce. Lolly Wolly Doodle currently does 60 percent of its sales through Facebook and the remainder through its website.
Why are companies like RadioShack, Pennies, RIM and many others seem to be moving from one crisis to another while others find the opportunity that leads them down the path of success?

Let me know about your experience with the New Economy.

Are You Ready for VUCA?

TooManyChoicesVUCA best describes the business environment that has become the new global economy. The recession has given way to a slow and struggling recovery in the U.S. while Europe is facing a depression and economies around the globe are finding themselves in uncertain terrain.

V.U.C.A. (pronounced voo – ka) is an acronym developed by the military to describe an environment that is dominated by:

  • Volatility – The nature, speed, volume, magnitude and dynamics of change;
  • Uncertainty – The lack of predictability of issues and events;
  • Complexity – The confounding of issues and the chaos that surround any organization; and
  • Ambiguity – The haziness of reality and the mixed meanings of conditions. CEOs are struggling with how best to lead

Because they were designed for more predictable times, business models and business planning processes fail to perform well in this chaotic environment. This is because in a VUCA environment change happens more frequently, more unpredictably and with enough size to makes them “disruptive.” So the question for business leaders becomes, “how do you effectively grow sales, profits and customer loyalty in an unpredictable environment where literally everything changes in months rather than years?” Since you can’t avoid VUCA you must understand it and develop skills that will help your company adapt to the chaos it produces.

In a VUCA economy change is a constant. As markets and customers become less predictable businesses must vigilantly watch the landscape. Trends start quickly and can develop overnight bringing with it either great threats or tremendous opportunities. This often leads to shorter life cycles of products and services. With shorter life cycles market leadership is short-lived , as is the opportunity to mine the profit potential of the leadership position. Being the market leader in the past, meant years of market domination (think about IBM, Kodak, Nokia, Sears and Polaroid). In the New Economy market leadership is often measured in months.  The key to success is how quickly and effectively you can recognize and respond to market trends.

Leaders must dramatically modify or stop doing the following things to prepare for a VUCA environment.

  • Stop seeking permanent solutions to existing problems
  • Stop relying on the past and trends as an accurate predictor of the future
  • Stop assuming that long-term market leadership is possible without major innovations
  • Stop assuming that the strategies and people who got you here will get you to the next level
  • Stop assuming that the corporate culture and corporate values will remain the same

What are you doing to prepare your company to function in a VUCA marketplace?

Dare to be Great in the New Global Economy

Dare to be great! That’s my challenge to every business owner, CEO and business leader. Why? Because if you aren’t a GREAT company,Dare to be Great you may quickly become a casualty of the new global economy.

In his book, “Good to Great,” Jim Collins said “Good is the enemy of great.” In the new global economy good enough just won’t cut it anymore. There are countless former market leaders who settled for good and are paying the price of lost revenues, profits and customer loyalty. Companies like RIM (Blackberry), Sony, Sears, Bally Fitness, and Hostess are just a few examples.

If you decide to take my challenge and dare to be great let me warn you it won’t be easy. If it was easy every company would do it. When you consider the alternative of not becoming a great company I think you’ll get the motivation necessary to jump on board.

Over the past few years I’ve been researching successful business leaders who are making great strides in this demanding economy.  I’ll be sharing their stories in my upcoming book, “Leadership in the New Economy”. Today I’ll share twelve key lessons learned that will help you in your quest to dare to be great.

12 Dare to be Great Lessons

  1. Have a vision that inspires. If you don’t have a vision that helps people rise above pettiness, egos and personal agendas your company will be doomed to major in the minors.
  2. Tend to your culture. Whether you have three employees or 30,000 culture happens by design or default. The choice is yours.
  3. All customers are not alike. Focus your time, energies and resources on attracting, acquiring and retaining customers who will help you reach your vision.
  4. In the battle for market supremacy the product with the best marketing wins not necessarily the best product.
  5.  The three biggest factors in determining your success are your business category (Standard Industry Classification), your Business Model and luck. Don’t confuse the three.
  6. When it comes to human capital be sure to win with your winners and don’t lose with your losers. Make sure that you hire, develop and retain people with your vision clearly in mind so that they: Get it, want it and have the capacity to do it.
  7. Stop looking in the rear view mirror. Accept the fact that what got you here won’t get you where you want to go.
  8. Leadership matters. Great leadership can’t fix a broken business model but poor leadership can kill a great business model.
  9. Customer loyalty is a contact sport and every contact counts.
  10. Before you change your company, look in the mirror and ask yourself, “Am I ready for this?” Change must be led not managed. If you’re not up for the challenge don’t put yourself and your people through the aggravation. Just because you can do something doesn’t mean you will. Recognize what you’re great at and do more of that. Everything else must be done by others. This means delegating it, developing the capability internally, acquiring it or outsourcing it. To change the company you must “be the change.”
  11. Embrace innovation and agility.  As you move into uncharted waters the number of “known unknowns” will be replaced by the” unknown unknowns”. Your speed to vision will be measured by how quickly and effectively your organization can self-correct their course. Failures will happen. That is guaranteed. Learning, adapting and speed of recovery are optional. Fail, learn, adapt or simply fail.
  12. Monitor the signals in the noise. Every great leader must become like hockey great Wayne Gretzky and “skate to where the puck will be.” The new global economy is producing lots of noise in every market. Determining which faint signal will result in a full bloom market trend is both art and science. If you’re not diligently monitoring and discerning signals you’re flying blind.

Before you accept my challenge to dare to be great take a moment now to imagine what your business will be like if you do. Create a clear and compelling picture in your mind’s eye of your business when it is great. Specifically how will it be great for your customers, employees, the marketplace and you?

If that image inspires you to dare to be great then take the next steps to make it happen. Assess where you are now. Determine what you need to achieve your vision. Develop a plan. Implement.

If you want a quick strategic snapshot of where your company is now take the Growth Positioning Survey (GPS). It’s a short online survey that pinpoints how your company is performing in twelve key growth factors. The insights gained from the GPS will give you the focus and confidence to accept my challenge to dare to be great. To get your free access now go to:   http://philfarisassociates.com/gps/ click the “Free Instant Access” button to get your copy now of “Growth Positioning Survey!”

 

The New Global Economy Sends Mixed Signals

The NewGlobal EconomyThe New Global Economy continues to send mixed and perplexing signals making it difficult for business leaders to chart clear paths. Is now the time to re-trench again or accelerate growth? The answer is a resounding “It depends.”

Here are just a few highlights from the New Global Economy that makes navigating businesses now so challenging:

  • According to Zillow 15.7 home owners in the US were underwater on their mortgages at the end of March.  90% of these home owners are making their monthly mortgage even though there is little hope on the horizon that their equity will ever become positive.
  • Sales of new homes 3.3% in April according to the Commerce Department. Also the price of both new and existing homes increased. This gives hope that the housing market may be moving upward after the collapse in 2006.
  • As Germany’s economy stumbles the euro hit two-year lows the week of May 21. Many investors are concerned that countries like Spain may join Greece on the economic crisis watch.
  • The US economy is plugging along on a less than robust two and a quarter percent.
  • Unemployment for the “Lost Generation” (job seekers under 25) remains at 16% which is more than double the national rate. For many in this group pursuing the American Dream is becoming quickly diminishing mirage. Only half of recent grads are working full-time. Furthermore the starting salary of graduates from 2009-2011 are $3000 less than they were before the recession.
  • Hewlett-Packard plans to cut 27,000 jobs or 8% of their workforce in an effort to jump-start their growth.
  • America’s midsized companies are less optimistic than they were a year ago, according to a survey by Deloitte, LLC. The reason for their outlook was tied to slower economic growth, uncertainty in an election year, financial trouble in Europe and rising health care.
  • China announced new rules that will impact the four largest foreign auditing firms. Under the guideline the firms must limit the number of foreign-certified partners in China to a max of 40%. By 2017 the cap will be 20% but all senior partners must be Chinese.

What do these facts have to do with your business? Everything and maybe nothing.  In the New Global Economy unrelated trends can both signal and camouflage trends that can impact your business. What’s important is for business leaders to keep their eyes on the horizon looking for a trend that can lift your business to new heights or crash it on the rocks of the New Global Economy.

If you’re a business owner or executive and your primary focus is managing the day-to-day activities of your business watch out you’re about to get blindsided. In the New Global Economy be sure to devote time each day to monitor trends that are or can drive your business. What trends are you monitoring for your business? How quickly can you respond should a trend emerge that can impact your business’s success?

The New Global Economy Update

Now is a good time to take a quick look at the new global economy. The first quarter is behind us and trends are beginning to take shape. This update on the new global economy is designed to give business leaders a heads up on factors that can have a direct and indirect impact on their business. If you are looking to grow your business or avoid becoming a business casualty this is for you.

During my research for my book “Leadership in the New Economy” many business leaders felt that they would be immune to factors playing out in the new global economy. To them these factors were benign threats on the distant horizon of their business reality. Although they didn’t experience a direct hit due to global trends they found themselves in their wake which produce unexpected setbacks.

Please use these examples as a yellow flag for your business. Consider their potential impact and adjust your plans accordingly.

  • Our Export business is softening. After two years of impressive growth the Administration’s goal of doubling exports from $1.58 billion to $3.15 billion in five years is in serious jeopardy. With China and India decelerating their economies from the double digit growth of the past economists are predicating sluggish growth for the next couple of years. We can’t sell our goods to a market that is growing at a significantly slower pace. Who in your value chain or customer base can be impacted by a significant slow down in our export business?
  •  Business investment is declining. According to USA Today, “Investment climbed just 1.4% a forth of its late 2011 pace, which helped limit the economy’s growth to 2.2%.” This rate is below most experts forecast for 2012. How will reduced investment by businesses impact you and the local marketplaces in which you operate?
  • Unemployment in Europe reaches record high with 17.4 million workers unemployed. At 10.9% this is the highest rate since the Euro was installed. Compounding the impact of high unemployment is the fact that the austerity programs in place to reduce the counties’ debt have had poor results in lifting the economy. The rising borrowing costs, political infighting and social unrest promise to keep the European economy unsettled for the foreseeable future. How could prolonged unrest in Europe impact your investments, business and local economies?
  • Job gains in the US hit 7 month low. According to payroll giant ADP’s April jobs report the US added just 119,000 jobs. This is the second month in a row that the results were disappointing. Although many experts predict an upswing in May they remain cautious in their predictions for the year. Is this just a blip or the beginning of a stall? How will your business fare if the jobs growth stays soft?
  • Best Buy is down sizing. Like many big box retail stores the electronics chain had a poor forth quarter and an loss for the year. In an attempt to right the ship Best Buy recently reported that they will be trimming costs by cutting 400 job, closing 50 stores and downsizing many others. This is an example of a big company trying to “Right Size” their business to compete in the realities of the new global economy. By matching their business operations to the market demand Best Buy hopes to pull itself out of the red ink and into the black. Is your business in need of “right sizing”? It’s always easier to do it early instead of waiting until it may be too late.
  • Black Berry changes leadership team and launches new market strategy to stop the bleeding. After seeing its stock shrink 90% since 2008, its market share retreat from 14% to 8.2% and feeling the heat of five straight quarter of sales short falls the smart phone company is shaking things up. By installing a new leadership team led by Thorten Heim and unveiling a new market strategy RIM hopes to stop the slide into smart phone oblivion.Experts aren’t sold on their new strategy and CEO Heim  admitted that he was wrong in his January assessment the company didn’t need to make “drastic changes”. what kind of drastic changes lie ahead? You’ll have to stay tuned. Many experts feel their best chance of survival is to put the”for sale” sign up.  When a market leader starts losing touch with its customers and fails to deliver solutions that the market demands the fall from grace can be rapid and often fatal. How well does your company deliver solutions to your customer base? If your market position is weakening are you poised to respond effectively?

The lessons you can learn from these examples about the new global economy is that there are many factors in play that can be disruptive to your business even if they seem in like they’re in the distance. Successful leaders identify the indicators that can impact their business and carefully keep their eyes on the horizon looking for trends that may be the tip of  the economic ice berg. They know that “shift happens”, often unexpectedly so they remain poised to respond.

Although the example given represent potential dangers the new global economy also represent tremendous opportunities. Joseph Grobler COO of  Reveal a company says,This is the absolute best time to be in business because the growth opportunities are unbelievable”

Other companies who have successfully positioned themselves for growth include :

The CEOs of these companies have business plans in place that ensure that they are responsive to their customers and are alert to the market dynamics that can surface in the new global economy. If you’d like to discover how well your business is positioned to grow take the Growth Positioning Survey by clicking here.  I’ll also send you a copy of the Special Report:Welcome to the New Economy: Discover the 12 Biggest CEO Mistakes and How to Avoid Them.

Corporate Culture and Leadership in the New Economy

Corporate culture and leadership are essential in the New Economy. Why? Because in turbulent times it’s imperative that organizations have a clear sense of direction and purpose. Not having everyone on the same page results in chronic organizational dysfunctionAligning Vision, Values, Mission and Culture in the New Economy where employees and departments are working at cross purposes by pursuing conflicting goals. Remember every misalignment squanders your company’s ITEAM *(Information, Time, Energy, Attention and Motivation) and drains your profits. (*Mike Jay, B-Coach)

Many companies may have a written mission, vision and values statement but most fail to formally develop their cultures. Because leaders put off the heavy work of erecting the scaffolding of values, policies, shared beliefs, rewards, rituals, and visual elements that form culture, a void is created. In that void, culture happens spontaneously, organically and usually chaotically. Culture becomes an aggregation of random decisions made by different people in particular circumstances. The notion is that if the people are good, decent and competent, chances are, the culture be good, decent and competent as well. This approach is a recipe for disaster. As the leader your biggest responsibility is creating a culture that is scalable and sustainable. With or without direction nature and nurture will combine to form organizational DNA that informs your people of “how we do things”. This message grows more visible and pervasive over time.

Many successful entrepreneurs aren’t content to leave their corporate culture and leadership to chance. From the beginning they select people, implement policies and clarify what’s important at every step of the way. Because they want a culture that can sustain itself these leaders believe in culture by design.

“If you don’t define the culture and you don’t work on it and you don’t progress it even when it’s 2-3 people, it’ll define itself. And it’ll define itself really quick, and it may not be the one that you like.” -Matthew Porter, CEO Contegix

Large organizations with well-developed cultures often neglect them resulting in the culture changing into something at odds with the organization’s vision and stated values.

A good example of corporate culture and leadership that went awry is AIG. According to Corporate Culture: The Ultimate Strategic Asset*, AIG’s failure during the global financial crisis of 2008-09 in part can be attributed to misaligned values and a changed culture. AIG had as a core competency managing risks and a culture where anyone could challenge a trade. Under Joseph Cassano, the financial products group sold hundreds of billions of credit protection in the form of CDs without having to put up any real money as collateral. As sales grew the group took on more and more risk. Under Cassano’s leadership the culture evolved into one in which transactions couldn’t be criticized. When, in the financial crisis of 2008, investment banks sought insurance money for their collapsing derivatives, AIG could not deliver and received a bail-out from the taxpayers. A culture of growth at any cost overshadowed the old culture of managing risk and the rest as they say is history. (*Corporate Culture: The Ultimate Strategic Asset, Eric Flamholtz and Yvinne Randle,Stanford University Press 2011)

Many successful organizations like FedEx, IBM, Amgen and Disney have “woken up” to find that their corporate culture and leadership weren’t aligned with their vision. This “Ah Ha moment” forced leaders to impose a cultural re-alignment. This was a painful process (IBM laid off 60% of its workforce).

When you look at your company’s corporate culture and leadership what do you see? Are your company’s Culture, Mission, Vision and Values aligned so everybody in the organization understands and acts congruently with them? Take the Growth Positioning Survey and discover where your company stands.

Welcome to the New Economy!!!

If you own or run a business today you know we’re experiencing an economy that is different than anyone has seen in the past. Our current business landscape is filled with one crisis after another. Like waves on a beach they just keep pounding away. Here are a few of the economic “challenges’ we’re facing:Welcome to the New Economy

  • Unemployment and underemployment is impacting 20-25% of the workforce and recovery is expected to be both slow and painful
  • 11 million homeowners are upside down on their mortgages with little or no options on the horizon
  • The Baby Boomers lost 30-40% of their wealth over the past few years
  • Our debt ceiling/budget crisis is hopelessly deadlocked in DC
  • Local and state budget deficits are becoming more common
  • Financial uncertainty in Europe is spreading as nine countries saw their Standard & Poor’s credit rating downgraded in January 2012.
  • The economy in China is slowing down and prices are increasing on imported goods.
  • Consumer confidence continues to be low

Welcome to the New Economy. What do I mean by the New Economy? In the past, periods of economic slowdowns were followed by calm seas and long periods of steep recovery. Today recoveries still occur but they’re more fragmented, shorter and less steep. Unfortunately the economy and business aren’t going to return to “the good old days any time soon, if ever. What we see is what we’ll be getting for the foreseeable future. For up to a decade or longer volatility, uncertainty, complexity and ambiguity (VUCA) will be our constant companions. The choice is to embrace the New Economy or surrender to it.

For many businesses the New Economy represents a real and present danger. To others it represents tremendous opportunity.

Which one are you?

As a business leader there are several options available to you for navigating this tough economy including:

  • Ignoring the economic mine fields and continue “business as usual”.
  • Taking a defensive approach by cutting costs and reducing spending until the crisis is over.
  • Taking advantage of the uncertainty in the marketplace and growing aggressively.

Which approach is best for your business? It depends. There is no “cookie cutter”, textbook response for surviving or thriving in the New Economy. We can look back at how businesses thrived in the Great Depression and in the down turns in the 1980s and 2000. You can also observe and learn from what thriving companies are doing now. These approaches can give clues but no approach will work unless you have a clear understanding of where your business is right now and where you see it going in the future. From those two perspectives you can begin assessing your marketplace, competitors, customers, employees and business operations to craft a strategic business plan. Your plan, strong leadership and effective execution are what you’ll need to survive and hopefully thrive in the New Economy.

Are You Committed to Leading Change?

leading changeA critical measure of success in leading change is your commitment.  Once you’ve weighed the options, given others a chance for input and settled on the best course of action.  You must be resolute, even passionate about your determination to follow through.  If you can’t be excited about where the organization is going, how can you expect your people to be.

Don’t try to reduce resistance by softening your position.  This is taken as a sign of weakness and becomes a rallying point for resisters. Keep in mind that in times of uncertainty, actions speak louder than words.  If pushed to the limit, you make have to make an example of someone who resists.  When this happens, make it a high profile person and make it public.  Your objective is to send a message to the others to get on board.

Change often has casualties.  This may seem heartless but it’s true. Resisters resist because they choose to do so.  They are the ones who put you in a position to choose them or the change effort.  If your change effort is worthy, the choice is an easy one.

In times of change, people gravitate to the people who have the most conviction about the future. Don’t initiate change you yourself aren’t committed to.  People will look to you for answers and to show them how to act.  If you’re certain, confident and act with congruence, they will follow.  If you lack those qualities, they will seek those that do.

Remember, you can’t manage change, you can only lead it.  When you lead change, people will follow.  So, if you’re in charge of change, lead it.  The resisters will either join the parade or voluntarily drop out.