Tag Archives: brentsapp

Not Enough Sandboxes to Scale the Kopi Luwak Value Proposition

My son sent this picture from his iPhone last year while visiting a coffee plantation in Indonesia:

When I saw this image, two things came to mind.   The first was this clip from one of my favorite movies, The Bucket List:

My second thought centered on another reality that many Entrepreneurs experience in No Man’s Land.  A friend responded after seeing my son’s picture with, “Did he find the sandbox yet?”  How can you scale production that requires hands-on accumulation of beans that successfully passed through the intestines of a mountain cat?  Answer- can’t happen.  Even though “The World’s Most Expensive Coffee” is one of the better Value Propositions I’ve heard in the past decade, you can’t build a scalable model to support it.  Bottom line – you can’t make more money with increased volumes – there just aren’t that many hungry exotic mountain felines to make it work.

Kopi Luwak provides a whimsical example of what many growing companies experience with their economic model, or lack thereof.  Many CEOs don’t ask the question, “Is our value proposition scalable, and can we make money at higher volumes”, until they’re mid-stream in No Man’s Land, and then it’s too late.  At that point, they stop drinking Kopi Luwak and start their mornings at 7 Eleven.

 

Screen Shot 2015-03-23 at 10.59.00 AM

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When CEOs Become Blind and Bored

Psychologists refer to this as the paradox of power. The very traits that helped leaders accumulate control in the first place all but disappear once they rise to power. Instead of being polite, honest and outgoing, they become impulsive, reckless and rude. In some cases, these new habits can help a leader be more decisive and single-minded, or more likely to make choices that will be profitable regardless of their popularity. One recent study found that overconfident CEOs were more likely to pursue innovation and take their companies in new technological directions. Unchecked, however, these instincts can lead to a big fall.

The Power Trip, Wall Street Journal – August 14, 2010

And that’s the problem.  “New technological directions” are often a landmine waiting for the CEO’s foot.  Here’s the crazy part –  CEOs get crazy in No Man’s Land.  It’s a time of confusion and distraction, when the company is too big to be small and too small to be big.  After months, perhaps years of solid growth the company realizes they’re not quite sure why they’re in business.  The value proposition becomes ambiguous at best and the economic model, or lack there-of, does not enable the company to make money at higher volumes.  So what does the CEO do?  He or she gets bored with the details and starts innovating in a different direction.

When you, the CEO, feel like you’re losing control from Brent Sapp on Vimeo.

This is red line danger zone for corporate direction and strategy.  The idea that launched the business, that “thing” that the company did best to this point, starts to lose it’s appeal to the CEO.  In typical ADD (or ADHD) fashion the boss believes the best course of action is to get creative and do something different.  Landmine, three o’clock!  If you don’t believe me, listen to my friend Bill Wydra, CEO of Ash-Tec Technologies.

One of the reasons No Man’s Land claims so many ventures is the loss of the CEO’s tenacious focus.  Instead of a new idea, the leadership team should re-align on the value proposition and then refresh the economic model to scale the value proposition. This “re-focus” increases the probability that the company will survive No Man’s Land and thrive in more profitable revenue zones.

If you are a CEO and you’re becoming bored with your company’s direction, step back and re-focus.  Don’t let the illusion of past or present growth blind you to the reality of No Man’s Land.  Align the team on your value proposition and make the appropriate investments to maintain momentum and survive your growing pains.

Calvin CEO Bored

If you need a hobby, try P90X – you’ll be too tired to be bored.

Economy Heroes 60 Day Strategy Sprint

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This is what Happens to a CEO When…

I’m sure you’ve heard, or stated, the following anecdote:  This is what happens when cousins marry…

Let me rephrase that statement in several different contexts with similar, but no less severe, outcomes.

This is what happens when an inebriated college student beta tests his idea for a new sport which requires the nuanced skills of a figure skater, a rancher, and a matador:

This is what happens when a cool family has far too much money to spend at Walt Disney World:

And this is what happens when the leadership team of a regional insurance company is out of Sync (alignment) on allocating resources to develop a new product:

The CEO and Inner Circle disagreed on investing in a new product.   Often when a company enters the fringes of No Man’s Land the team is confused and the CEO becomes bored; he/she “escapes” to a new idea that siphons energy and resources from the company’s core value proposition.   At this point the company can become distracted enough to fail in it’s inability to fund future growth.

… when alignment is lacking, new programs run a high risk of external failure and typically fall into disuse overtime.  Also, without management’s support and consistency, employees’ commitment to quality will usually deteriorate, their individual objectives will take precedence, and their morale and productivity will diminish overtime.

Bob Frost, Director of Measurement International

Misalignment is a superb example of the age-old physics rule: error increases with distance.  I will miss the target completely if I’m shooting at 100 yards and my site is off less than a millimeter.   CEOs and inner circles can easily migrate out of sync on critical issues, imperceptibly at first – ultimately off the “same page” altogether.   Companies fail when leadership is out of sync and lack a trusted decision making process.

This (failure) is what happens when companies are misaligned; but it’s not difficult, or time consuming, for a CEO and Inner Circle to get on the same page when they decide to do so.  Sync’Em – it’s the most important action to align and execute on the right priorities.

Just think what might have happened if the “Skater-ranch-ador” in the picture above would have Synched with his inner circle and stayed focused on his successful iPhone app?

Economy Heroes ebook CTA

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The Necessity of Company Nimbleness: Decide • Align • Track

Washington, D.C. (Aug. 30, 2002) -- Admiral Ve...
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Commit to making decisions.  Decide and move forward!  Jason Fried, Founder of 37 Signals, from his book Rework

I had the privilege to hear Admiral Vern Clark, former Chief of Naval Operations, talk to a group of over 100 local business people.  Admiral Clark is a fascinating individual, a humble hero driven by character and vision.  He had me at “a-ten-hut” with his stories such as the night, as captain of a destroyer he led his crew to prevent crashing on a reef in the midst of a Class 5 hurricane.

Admiral Clark also talked of leadership.   His insights flowed like chords from a master violinist; music to the ears of those who crave authenticity, from a warrior who’s felt the hammer of tsunami size swells on his broad side.

He described his passion for ship design, especially when it came to increasing his vessel’s maneuverability.   He groaned as he described the traditional destroyer, a ship with almost 300 crew members and a top speed of 30 knots.

His eyes brightened and his voice elevated, however, when he described a ship partially of his own design called the LCS-2, the first of a new breed of a Cirque de Soleil re-imagined (as one author described)  combat ships.

People make business plans for all sorts of reasons — to attract funding, evaluate future growth, build partnerships, or guide development. Unfortunately, the vast majority of these plans are usually out of date by the time the printer ink dries. Business moves fast: the product’s features morph, new competitors emerge, or the economic climate shifts. When these changes occur, many people just throw their business plans out the window. For a plan to be truly valuable it needs to evolve with your company and stay relevant in the face of uncertainty.    Amy Gallow, Keeping Your Business Plan Flexible, Harvard Business Review

Companies must stay nimble in order to survive and thrive in this economy.  Long term plans are like leprechauns, mythical characters that promise a pot of gold that no one ever finds.  Let’s face it, most CEOs of emerging companies don’t have a plan!  They resemble the guy on stage who spins multiple plates on thin poles – running from pole to pole in a desperate attempt to keep the plates from slowing down and toppling.

As my partner, Doug Tatum, brilliantly states, “Culture, at it’s core, is a trusted decision process.”   CEOs and their teams can make decisions and move forward if they have a simple process to sync on the right priorities in a “circular” pattern:

The difference between this type of decision process and traditional “business plan strategy” is the difference between the traditional destroyer and the LCS-2.  It’s about making decisions quickly using updated information.  It’s about remaining NIMBLE!

If you would like to take a sniff of what it feels like when your company is nimble, check out the complimentary report on this site.  You’ll like what you feel:

INC. NAVIGATOR COMPASS 

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The CEO and Speed Chess

There’s a New Normal breaking through the ice concerning how a CEO makes decisions.  The traditional linear method of forecast and response has been replaced by a new process that resembles both Special Forces field tactics and…. speed chess:

Here’s how the Wall Street Journal describes it:

Now, even though the economy is slowly picking up, those fresh habits aren’t fading. “This downturn has changed the way we will think about our business for many years to come,” says Steve Odland, Office Depot’s chairman and chief executive.

Walt Shill, head of the North American management consulting practice for Accenture Ltd., is even more blunt: “Strategy, as we knew it, is dead,” he contends. “Corporate clients decided that increased flexibility and accelerated decision making are much more important than simply predicting the future.”

Strategic Plans Lose Favor, Wall Street Journal 1.25.10

Over 90% of emerging businesses fail, but those that prevail produce over 85% of the jobs in our country.  Many experts believe entrepreneurs need trusted process, as Special Forces and military aviators experience with the OODA loop, to make decisions quickly and remain maneuverable.

It’s the “Speed Chess”  of decision making and it could make the difference of CEO survival in 2013; that, and recognizing the blind spots that plague most CEOs of fast-growth companies before you get stuck No Man’s Land.

Click on the picture below to see the top 3 CEO blind spots we’ve tracked while working with over 600 companies in the past four years.

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An Entrepreneur Must Protect Her Fastball

Nolan Ryan
Image by cliff1066™ via Flickr

Delegating authority is a notoriously difficult undertaking for many business owners to accept, especially when it comes time to bringing in an outside CEO. In a Q & A in The New York Times, Lisa Price, founder of the beauty products company Carol’s Daughter, explains how she learned to calmly accept that an outside CEO might not be such a bad thing. Price explains that while juggling a lot of issues, it helps to put an actual dollar amount to the value of your time and then determine whether or not it is cost-effective for one person to handle every single task. “I did something as long as it made sense to me to do it,” she said. “And then, once it made sense to turn it over to someone else–either because it could get done better, or because I could spend my time making more money elsewhere–I did it.”

Inc. Magazine, A Model for Smarter Growth, August 23, 2010, Jason Del Ray

We all know that companies under 250 employees depend heavily on the Founder to wear more hats than Lady Gaga and spin more plates than a short order cook.  But as their companies build momentum, Entrepreneurs often find themselves buried in the fray of operational details and strategic delegation becomes a necessity.


Delegation is essential to growth, no question.  But when does an Entrepreneur refrain from delegating?   The founder must not release the company’s most valuable asset in order to maintain momentum and growth – he or she must protect the “Fastball”.

What do I mean by “Fastball”?  Consider my favorite baseball ever – Nolan Ryan.  Ryan is considered by many to be the greatest pitcher of all time.  Batters braced themselves for almost twenty years when Ryan took the mound because they had no question what was coming – a blazing, 100 mph fastball right down the center of the strike zone.  Hall of Famer, Reggie Jackson, said of Ryan’s heater – “It disappeared half way to the plate.”

Nolan Ryan built an incredible career around one thing – something he was passionate about; something he did better than anything else.   All Entrepreneurs have their “fastballs” and although the company at some point must get good at what the founder does best in order to scale, it makes little sense in the first few stages of corporate growth for her to give up trips to the mound to throw her heater.  It’s what she, and the company does best.

I spoke recently with the CEO of one of the fastest growing middle market software companies in the country.  When I asked him to identify his fastball, he pondered then responded, “I raise capital.”  Indeed he does; last week he secured an additional $35 million to fund the warp 10 growth of his baby.  What would happen if he was not free to pound the Private Equity flesh?  His company would exceed their speed limit and grow themselves out of existence.

Bottom line, stay on the mound.  You wouldn’t want to be anywhere else.

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Hail Our Inc. 5000 Economy Heroes

I started twenty-two years ago out of the trunk of my car.   Dave Dreiling, CEO/Founder GTM Sportswear

Last month I attended the Inc. 5000 national event at the Marriott Resort in Phoenix.   For three days I swam in the ocean of adrenalin, creativity and chutzpa created by leaders of the fastest growing companies in America.  I personally interacted with over 100 of these Economy Heroes and marveled at their ability to persevere and succeed in the worst economic downturn of this generation.

I listened to stories from heroes like Dave Dreiling, founder and visionary of a $65 million sporting goods company that he started out of the trunk of his car twenty-two years ago; he now employs over 800 people.  Or Joanne Cobb-Rossi who successfully straddles the fine line of career and family while leading her thriving company, Zooom Printing.

The enthusiasm were palpable; a pleasant contrast to the 2009 conference that fell in the center of the stock crash.   It was like finding an oasis in the endless parched commentary of doom and gloom we’ve trudged through over the past three years.

Dave Dreiling provides an excellent example of the impact entrepreneurs have on our economy and job market.  Although less than 10% of new ventures survive, those that make it generate over 80% of the jobs in this country.

As I mingled amongst these innovative elite, those who love capitalism and embrace the risk  it requires I was reminded that we must do what we must do to clear the regulatory and taxation path so that they, like Dave and the 1200 members of his family, can do what they do best – create jobs!

Bo Burlingham, best selling author and editor at large with Inc. Magazine offers fascinating data as to the essential role that entrepreneurs play in our economy, specifically when it comes to job creation.

“The problem is, this conventional wisdom is wrong. Or rather it’s only half-right: Small businesses may create the majority of jobs, but they also lose most of the jobs. What counts is not job creation, but net job generation.”

Check out the entire article here:

Who Really Creates the Jobs

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The Corporate Totem – An Elegant Benchmark for Strategic Reality

Please pardon if I indulge myself in an of elucidation on one of my new favorite movies, Inception.  One trip through Christopher Nolan‘s dream epic is not enough to start connecting the dots on its symbolism.  I was just trying to keep up my first time around; Nolan is writing and directing ninja.   The second time, however, I felt the freedom to participate in Nolan’s multiple metaphors, starting with reality and ending in the “Basement” of the hero’s prison of memories.

My favorite imagery ties into the Totem, a personal item that each dream warrior identified in the real world in order to ground themselves to reality in the dream world.  In Cobb’s (Leonardo DiCaprio) case, it was a spinning top.  If ever he became confused as to whether he was in reality or fantasy, he would spin the top and wait for it to stop spinning.  If it didn’t stop, he knew he was in a dream.

Each warrior’s Totem was personal and confidential.  As stated by several characters:

Arthur: So, a totem. It’s a small object, potentially heavy, something you can have on you all the time…
Ariadne: What, like a coin?
Arthur: No, it has to be more unique than that, like – this is a loaded die.
[Ariadne reaches out to take the die]
Arthur: . Nah, I can’t let you touch it, that would defeat the purpose. See only I know the balance and weight of this particular loaded die. That way when you look at your totem, you know beyond a doubt you’re not in someone else’s dream.

Ariadne state’s later, after she’s created her item that the Totem is an elegant means to ground oneself in reality.

I remember hearing a story about famed basketball coach John Wooden concerning his religious beliefs.  When asked why he didn’t discuss the topic more in public he responded that he wanted to live it more than speak it – which he did.  Then he added that he carried an item in his pocket to remind him at all times of the example he wanted to provide others regarding his faith.  The item was a small metal cross with sharp edges.  When, as coach, he was tempted to erupt in response to a bad call in a game he would reach into his pocket and grasp the cross as hard as possible.  As the sharp edges of his “Totem” pressed against his fingers the great coach would remember the example he wanted to display on the court; then he would take a deep breath.  He rarely if ever lost his temper on or off the court.

Companies today need their own personalized Totems.  I’ve described the insidious nature of No Man’s Land in previous posts; the inevitable transition companies experience during the second stage of corporate growth.  It’s a time of confusion and critical decisions.  Even after a company is successful in accessing the right information, both from a corporate alignment perspective as well as competitive benchmarking; and even after they identify the 3-5 must do key performance indicators, it’s easy to slip into the dream world of “delusional growth” and forget that the No Man’s Land chasm is either coming fast or upon them.

That’s why I recommend that my clients review a one-page company snapshot either monthly or quarterly that benchmarks key metric and KPI performance.  Something like this:


With a “Totem” like this, CEOs can control company delusion and embrace the facts of their performance.  I’d show you my company’s totem, but then I don’t want to lose my sense of reality in my own dream 🙂

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Sync’Em: How to Drive Alignment on Critical Priorities, Part I

Team misalignment looks and sounds like chaos.  Before you continue reading, click to start this video.  Let it play while you read:

Is your leadership team on the same page when it comes to critical issues your company will face in the next 90 days? Or do you feel like each member of the inner circle is “clicking” to a different beat?

My firm has worked with over 500 CEOs and their inner circles over the 2 years. We often start our interaction with clients with a short online assessment that allows them to respond to statements regarding

  • Their Market (Value Proposition)
  • Their Management (Are the right people in the right positions?)
  • Their Economic Model (Will the company make money at higher volumes?)
  • Their Money (available capital for future growth)

Without exception the results are similar to this sample summary:

I’ve stated before that over 95% 0f leadership teams are severely misaligned on their company’s value proposition.  Why is alignment so important to an emerging company?  How can misalignment effect growth, strategy, execution and momentum as we finish the tumultuous 2012 and as we enter the potential maelstrom of 2013?

I’ll delve more into the severity of misalignment in the next post; how it can contribute to your business getting “stuck” in No Man’s Land. But in case you’re wondering – here’s the secret sauce to sync your team if you’re in the hunt for the “same page” on critical priorities: create a trusted decision making process.

It takes time and some effort, but once your team gets in sync on the right things you’ll see tangible results on execution and performance.  Now take a look at the video; your chaos can also transition to a concert of cohesive effort – in other words, your team can click to the same beat.   

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Is Your Decision Tempo Fast Enough?

A few months ago I met the real Jack Bauer.  No kidding.   Until recently, Tim Burke directed CTU (Counter Terrorist Unit) in Los Angeles.  And after listening to him share stories with twelve of my friends for over an hour, I realized to what degree this guy is indeed the “real deal.”  He talked about his training as a Green Beret and Special Forces commander for over 20 years,  he talked about assassination attempts on his life,  he identified his perfect record of 143 missions that he led without a casualty, he described himself as one of the most proficient snipers in the world, and he estimated he had fired over 500,000 rounds in his career.  Read Malcolm Gladwell’s book, Outliers, and you’ll realize this guy fits the template.

Tim talked most, however, about combat and mission; specifically related to the art and science of battlefield decision making.  He described that his trusted decision process for combat was based on 4, continuously circulating factors – Observe, Orient, Decide and Act.  This process, used by all Special Forces on the battlefield around the world, is known as The OODA Loop:

The OODA Loop responds to what Tim described as “Combat Tempo”, the degree to which battle conditions accelerate and decelerate.  He stated that decisions must occur in tandem with combat tempo – which often peaks at a moment’s notice.  Tim said that when a team is aligned on strategy and mission and has the ability to accurately assess their condition, respond quickly to Combat Tempo, and utilize pertinent, updated information so that informed decisions can be made quick and continually, then the team will defeat the adversary and survive.

My adrenal gland pumped a quart of electricity into my veins as I listened.  Tim’s trusted decision process fulfilled the need of every Entrepreneur across the country.  The process for battlefield decisions applies directly to business.   Most businesses need a simple, trusted and effective decision process that equips the leadership team to respond quickly to changes in the market, on the management team, with the economic model, and the ROI of the business.  By “paraphrasing” the OODA Loop in a business context, the process might look like this:

Decide: make a decision

Align: make sure the team is in sync on the mission and the right priorities

Track: assess performance on individual contribution to priorities and the status of the 5-10 most important company metrics

Adapt: Make the next aligned and timely strategic decision based on updated, real time information.

Decide again!

DECIDE – ALIGN – TRACK- ADAPT (DATA)

The ‘DATA Loop” increases corporate decision tempo so that the company can respond quickly and remain maneuverable.   My question is, is your tempo fast enough?  I know it’s hard to fathom, but strategy can be simple.  It’s not easy, but it can be simple.  And hey, if it’s good enough for Jack Bauer, I’m talking the real Jack Bauer, it’s good enough for us.

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