Leading in the state of denial is the biggest cause of business failure in the New Economy. Why!
Because the business owner never saw failure coming. They zigged when the market zagged. The warning signs were there they just didn’t see them. Are you leading in the state of denial?
In the New Economy you can’t afford to lead by looking in the rear view mirror and doing more of what you’ve always done. (How did that work for Kodak, RIM, and Hostess to name a few?) Instead stay focused on your vision and the road ahead. As a business owner you must leave the state of denial and wake up to the reality it’s not going to be business as usual…even if it may seem like it now. Shift happens and things can change in a hurry.
One of the biggest challenges many CEOs and business owners face is that there is no one to answer to. There is no boss or supervisor looking over their shoulder to make sure they have followed through. There is no one pushing them to set higher goals and take action to attain those goals. It’s lonely at the top. That’s why many successful leaders turn to outside resources to help them manage their way. Whether it’s stalled growth or translating their strategy into an operating plan, they have challenges related to their role as the company’s leader – challenges that cannot be delegated to a member of your management team.
Leaders have Blind Spots
The harsh reality all leaders have blind spots and in most small to mid-size companies the management team often doesn’t have the time or the expertise to uncover the root cause of a problem and/or to devise and implement a viable solution.
Steve Hennegan, President and CEO of San Antonio Credit Union had this to say about blind spots; “I’ve learned all my blind spots that I knew at the time. I’ve also learned that I’m always going to have new ones. I would just say this is: “I don’t know where my blind spots are, that’s why they’re called blind spots. I can tell you some of the ones that got me in the past. I can also say that, in each role that I’ve taken and the variety of roles that I’ve had getting up to this point, I uncovered blind spots at that point that I didn’t know I had and I wouldn’t have actually seen it until I got in that situation.”
The key here is admitting that you can’t do it all by yourself and that they don’t give prizes for reinventing the wheel. Find and hire outside resources that can give you the insights to move you’re your current limitations. Once you’ve made this decision, you need to decide what type of resource best compliments your leadership and your management team. The most commonly used approaches are:
• Mentors
• Coaches
• Consultants
• Advisory Board
• Peer Advisory Groups
• Mastermind Groups
Let’s examine each one.
Mentors
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.
Coaching and Consulting
“Coaching” and “consulting” are often confused. Both coaching and consulting involve a skilled professional that assists a client in achieving his or her goals. The differences lie in how they support the client. A coach usually works one-on-one with a client to facilitate personal or professional change. The coach listens, give feedback, asks questions, and holds the client accountable. At the end of the day, it’s the client who does all the work implementing the plan of action.
Companies hire consultants to access a capability or expertise not available within the company. They are also brought in to give an outside, objective perspective on an existing problem. Consultant’s role can vary considerably. Depending on the contracted work, consultants can provide analysis on a specific problem, offer advice, make recommendations, teach new skills or develop an action plan. Sometimes, the consultant may implement the solution for the company or find and manage outside contractors to complete the work.
John Foley, CEO Grow Socially and Interlink ONE
used a consultant to help build a critical system for his business. “We’re not a very process oriented organization. When we bring a new customer or project on and we assign different employees to it, we don’t do that very well. So for us to get to the next level we need to build a system for how we run projects. We need everyone, not just management, to understand how we run projects through the company. That was my blind spot and I needed some help with getting that done. So we brought in a consultant here to help build our Knowledge Management System and to make sure we have our processes in place.” Having the system in place allowed John and his staff to, “start working on our business versus in the business.”
Which is best for your company a coach or consultant? The answer depends on what your goal is. If you have a specific business-related problem and don’t have the required skills or capacity to fix it, hiring a consultant is your best bet. If you have high-level goals such as deciding on the direction to take your company, how to lead or facilitate change, developing your leadership skills or how to maintain work-life balance, you might consider hiring a coach.
Advisory Boards
Advisory boards are different from boards of directors because they don’t have a vote, legal say or other control over your business decisions. Their role is to offer advice and recommendations. The most effective advisory boards are comprised of people who bring talent that covers the classic business spectrum of human resources, marketing, operations, administration, legal, finance and in some cases, technology.
The selection of advisory board members should be based on what your greatest needs are and to supplement the resources on your management team. For instance, if the management team is strong in sales and engineering, you might look to fill the board with people with human resources, technology and marketing backgrounds. Some business owners like having a business peer in a non-competing industry serve on their board to give “pragmatic” perspective.
Boards of this nature generally are most effective if they meet with regularly, like quarterly. They usually aren’t expected to do significant work on the business between meetings.
Because board members are professional they should be compensated for their time. Compensation for advisory board members is generally in the range of $150 to $300 per hour for meeting time.
One of the biggest benefits of having an advisory board is the impact the advisory board meeting has on a Company’s management team. The upcoming meeting often serves as a rallying point to bring the management team’s planning efforts into focus because CEO’s and business owners often have their management team make formal presentations to the board. These presentations add new perspectives and add a level of accountability.
Merissa Levin CEO of Information Experts and Successful Culture uses an Advisory Board for guidance and accountability. Levin explains, “I have an Advisory Board and the thing about an Advisory Board is that it doesn’t just stop with the CEO. Smart companies use their Advisory Board as education and mentorship and coaching for the rest of their company. Our Advisory Board is very integrated into our organization and their relationship doesn’t just stop with me.”
Peer Group Advisory Groups
A Peer Advisory Group serves as a reciprocal advisory board. It allows its members to have a team of advisers who are invested in achieving group goals without the fiduciary liability or governance authority associated with a corporate board.
Peer advisory groups are typically made up of eight to ten CEOs or business owners who are not direct competitors and don’t have a conflict of interest. Their purpose is to help group members overcome the problems and issues that most companies face. Most peer advisory groups meet quarterly or semiannually, although a few, meet monthly. Much depends on the proximity of the members and the length of the meetings. The groups that meet less frequently usually have periodic conference calls between face-to-face meetings and password protected websites for online interactions. The following are just a few of the advantages a peer group can offer:
• Management team members frequently view issues from the same vantage point, even if they don’t think alike. Plus, some issues never get discussed because of potential risk and a desire to maintain harmony. This creates blind spots and limits objectivity.
• Owners and CEOs need a sounding board for their ideas. They want to make sure that they haven’t missed anything and that their plan is sound.
• Peer advisory groups can provide feedback on plans and ideas, explore “what if” questions, and provide greater insight and objectivity.
• Within a group, people will have different talents and experiences. Peer groups can be an effective way to overcome weaknesses and complement strengths.
• Succeeding in the new economy requires both vision and candid insights. Peer advisory groups can help executives step away from the day-to-day routine long enough to focus on the big picture.
• When you are managing a growing business, your friends and family may not understand the issues you face. However, every business owner and CEO in a peer group has the same sense of isolation and can offer support and understanding in a way that no one else can.
• Peer advisory groups can provide access to the collective membership’s network of contacts, sources of information, resources, and expertise. The expanded network can also help in identifying new markets, supply sources, potential employees, and business opportunities..
The first prerequisite to a peer advisory group’s success is a commitment to openness, trust, confidentiality, and mutual respect for each other’s ideas, opinions, and suggestions, even if everyone doesn’t agree with them. The group’s real value occurs because people don’t see things the same way or think alike. Keep in mind that it’s often the things you don’t want to hear that you need to hear most.
To be successful, peer advisory groups need:
• Ground rules
• Planned agendas to keep discussions on target and for everyone’s benefit
• Members who are able to both give and take. People who can’t accept criticism or who can’t admit they are wrong are not good candidates. The same is true for people who only take and don’t contribute.
• Procedures for removing members when there isn’t the right fit or chemistry. It’s best to get everyone’s agreement up front so you can have an amicable separation.
• A confidentiality agreement, so that all members, even those who leave the group, are professional enough to respect the rights of the other members.
• A clearly defined objective or purpose.
• In almost every case, a peer advisory group is led by a professional facilitator who functions as a mediator between participants.
Like marriages, partnerships, and business mergers, a match that looks great on the surface doesn’t always work. The right chemistry and a common vision and values are critical. You won’t really know until you start working together. With anything new, there is always a learning curve. Sometimes you have to recognize that you have the right idea but the wrong people and start over or change the makeup of the group.
To gain a better understanding of and appreciation for individual differences, many groups use personality inventory tests such as Myers-Briggs, Reiss Profile or the DISC. Using instruments like these helps to improve communication and working relationships while facilitating more effective group interaction.
There are several organizations that create and manage peer advisory groups including:
• CEO Focus
• Vistage
Mastermind Groups
The concept of the “mastermind alliance” was formally introduced by Napoleon Hill in his timeless classic, “Think and Grow Rich,” though mastermind groups have been around since the beginning of time.
Napoleon Hill wrote about the mastermind group principle as:
“The coordination of knowledge and effort of two or more people, who work toward a definite purpose, in the spirit of harmony.”
He continues…
“No two minds ever come together without thereby creating a third, invisible intangible force, which may be likened to a third mind [the master mind].”
Mastermind groups provide business owners and CEOs a combination of brainstorming, peer accountability and support in a group setting to sharpen their business and personal skills. A mastermind group helps both you and your mastermind group members achieve success.
When you’re in a mastermind group participants challenge each other to set important goals, and more importantly, to accomplish them. The group requires commitment, confidentiality, willingness to be creative and brainstorm ideas/solutions. You also need to support each other with total honesty, respect and compassion. Mastermind group members act as catalysts for growth; they play devil’s advocates and provide emotional support for their colleagues.
In a mastermind group, the agenda belongs to the group and each person must be committed to their own success. Your mastermind partners give you feedback, help you brainstorm new possibilities, and set up accountability structures that keep you focused and on track. You create a community of supportive colleagues who brainstorm together to move the members to new heights.
A mastermind group is similar to a peer advisory group but mastermind groups tend to be less formal with the focus being more on setting and achieving goals. There are several types of mastermind groups including:
• Virtual or in person (or a combination)
• Group led or facilitated
• Paid or free
• Industry based or interest based
• Small (3 people)or large (100+)
• Ongoing or one time only (before or after an event or conference)
Mastermind groups can provide motivation, inspiration and accountability. They can also be a drain on your time and energy. The key is to make sure that the group’s purpose, values and expectations are aligned with yours. If a group isn’t the right fit for you and your business disengage quickly and professionally.
Don’t join if you’re not willing to support your group members the way you want to be supported. You’ll get what you give in most mastermind groups.
Which outside resources is best for you?
The answer to that question is: it depends. It depends on your needs, resources, time availability and personality. Many CEOs use multiple outside resources. Melissa Levin of Successful Culture and Information Experts uses advisory boards, coaches and belongs to a mastermind group.