Business as a spiritual journey

Posted on June 29, 2008
Filed Under Leadership, Norman Wolfe, Organization & Culture | Leave a Comment

For too long now business operated as a machine of production and in the process has been disconnected from its deeper purpose meaning and values. Because of this organizations and leaders have lost their moral compass. In its place has stood the only compass left – profit and financial gain. Not that profit is bad – far from it since it is a critical component but it is only one component and should not be the guiding principle on which all decisions are made.

Profit is and must always be a guiding indicator of progress towards ones goals, but it was never meant to be the end all and be all. We are not in the business of making a profit as many like to say. Rather we are in the business of making a contribution to the community of people we serve (what we like to call a marketplace).

When we take away profit as the guiding principle we are left with serving others as our guiding principle. This is something all non-profits know all too well and most entrepreneurs who form their companies based out of a passion for the contribution they want to make know this deep within themselves. And serving others is the same guiding principle found in all spiritual practices.

Norman Wolfe
President/CEO
Quantum Leaders, Inc

The Golden Rule – which one do you run your company with

Posted on June 11, 2008
Filed Under Leadership, Norman Wolfe, Organization & Culture, Strategy Execution | Leave a Comment

We all know the Golden Rule from our childhood – Do unto others as you would have them do unto you, or love thy neighbor as thyself or any number of other variations. 

 Then somewhere in our business life we learned another version of the Golden Rule that read – “He who has the Gold rules.”

 This is so indicative of our current orientation to business; it is all about the gold, profit is the ultimate determination of winning.  How did we get things so turned around?

 I am not going to argue that profit is unimportant.  In fact I will argue it is  critically important – as a metric, and that is all it is meant to be - a metric.  It is not the end goal and it certainly is not the reason businesses exist. 

  It seems that we have lost touch with the underlying purpose of profit and the underlying purpose of all companies.  I live by a very simple rule when it comes to business

·         Products/Services that offer value are purchased which produces Revenue

·         Resource applied in the most efficient manner minimizes Costs

·         Revenue Less Costs = Profit

·         Profit reinvested produces growth which means we are serving more of our market

 It is being in the service to a specific community that is the ultimate purpose of any given business.  We provide goods and services to that community (we call it a marketplace) in an effort to better those members of that community.    If our goods and services are accepted by the community we are acknowledged b y the receipt of revenue.  The amount of revenue is a direct reflection of the value recognized.

 And so the true golden rule of business is the same golden rule that we learned as a value to live life by.  Do unto others, be of service to others, offer yourself to others provide the other s valuable service that betters their lives.  After all don’t you workwithsuppliers who provide you something of value?  Or do you buy from those who make the most money?

 

Norman Wolfe

CEO

Quantum Leaders

The Business Case as a Management Tool

Posted on June 3, 2008
Filed Under Gregg Gallagher, Management, Strategy Execution | Leave a Comment

Business cases & plans seem to have a bad reputation these days, particularly in the start-up/early-stage  venues.

Why is this the case?

It appears that the aversion to business plans is the highly suspect nature of the financial business cases, particularly as they relate to sales revenue projections on the 2+ year horizon. Such skepticism may be well-warranted, but I would offer that neglecting the potential use of  business case analysis as a key management tool - particularly in the start-up context - is a mistake.

How so?

A well-done business case should serve as the benchmark for the company’s operational performance. As such, it defines the set of assumptions that management believes will define the internal and external realities the company will face. Revenue performance is only one of the factors which need to be considered, and in itself, is actually a compsite result based derived from the interplay of a number of other factors which need to be considered and incorporated within the model (e.g., customer acquisition costs, customer retention/churn rates, customer lifetime value, etc.)

Accordingly, the value to management is not in the projections of top & bottom-line results, but in fact, it’s the underlying assumptions themselves. It is here where the Critical Success Factors (CSFs) for the company can and should be identified via sensitivity analysis. For example:

By analyzing such alternative scenarios, mangament can identify the firm’s CSFs and focus it’s attention on these key drivers. My own methodolgy is that once these CSFs are identified, to then create analyses based on Conservative-Realistic-Aggressive Projections across these CSFs to determine how best to focus it’s attention.

I leave it as an exercise to the reader to determine my pet name for this approach……

What is a Soulful Purpose?

Posted on May 28, 2008
Filed Under Leadership, Norman Wolfe, Organization & Culture, Strategy | Leave a Comment

In my last blog I referred to Idris Mootee’s blog post where he also represents the importance of a corporation’s purpose as key to strategy. No I would like to expand on that and explain why I call it the corporation’s Soulful Purpose.

A corporation is not just a collection of equipment worked on by employees to produce some products it hopes to sell. Rather a corporation is in fact a living entity just like a human being with a very core reason for existing. Is it just a fete of our legal system that corporations are treated as a person in the eyes of the law, or is there something more?

Every entrepreneur knows that starting an enterprise is like giving birth. They watch their child grow from a mere concept into something that is eventually self supporting. And like a child it goes through many growth cycles. Almost every entrepreneur knows that their organization is a living being with a soulful and a purpose for being.

How does one identify the corporation’s soulful purpose? It is like asking what your personal soulful purpose is, what is your reason for existing? And one way to begin the process of discovering this is to ask, what the world would be like if you didn’t exist. What would the world be missing? And rest assured there is a very definite purpose for everyone’s existence (think of the movie “A Wonderful Life”).

The same is true for the corporation. Every corporation has a very deep and purposeful reason for existing. Find it, communicate it, live it, and you will find almost magical results begin to appear.

Norman Wolfe
President/CEO
Quantum Leaders, Inc

Strategy needs a purpose

Posted on May 27, 2008
Filed Under Leadership, Norman Wolfe, Organization & Culture, Strategy | Leave a Comment

There is a wonderful blog post by Idris Mootee that I just recently read that I would like to recommend to everyone.  (http://mootee.typepad.com/innovation_playground/2008/05/what-do-you-know-about-business-strategy.html) .

 I would like to reprint a portion of his post because I feel it was so eloquently stated.

  “Purpose is really the heart of any business strategy and should provide the guiding principle for corporate strategy…  What’s a purpose? It is what a company’s reason to exist and what the people deeply believe in. It is also something that makes the company truly distinctive…   It is like soul-searching sometimes, but a company needs a soul too (although many function without one). This one requires more than the left-brain thinking… It is a human endeavor in the deepest sense of the term.”

Idris I couldn’t have said it better myself.  Thank you for adding your voice to this important function.

 

Norman Wolfe

President/CEO

Quantum Leaders, Inc

Story-Telling: What Every Good Marketer Knows…

Posted on May 13, 2008
Filed Under Gregg Gallagher, Marketing | Leave a Comment

Seth Godin has reposted a list of insights and best marketing practices on his blog. I suggest you read (and save) his entire post as it is a manifesto on what 21st Century marketing should be.

Four of his points relate to the importance of story-telling in marketing:

Beyond’s Seth’s own observations, there is an emerging awareness within the business community of the power that story-telling holds in effective communications. Two books on this subject which I can highly recommend are The Story Factor by Annette Simmons and The Elements of Persuasion by Richard Maxwell and Robert Dickman.

At Quantum Leaders, we ascribe to the notion that story-telling is a powerful vehicle for not only effective communications, ethical persuasion and influence; but also as a means of shaping and realizing the meaningful purpose of the 21st Century organization.

Have you given thought as to what the story of your own organization is? Not just it’s past and present, but more importantly, its’ future? Have you communicated that story to your people? To your customers?

Marketing ROI?….Picking Up The Gauntlet

Posted on April 22, 2008
Filed Under Gregg Gallagher, Leadership, Management, Marketing | Leave a Comment

In his last post on The Challenge of Investing in People, Norm likened the current skepticism of many business leaders re “people investment” to that of the view of marketing 20+ years ago. He went on to state:

And still today no one has yet come up with a way of tying marketing dollars into actual growth in revenues. There are a lot of attempts at proxy metrics (number of placements times expected impressions per placement yields so many leads generated, etc). But I have not met a CEO of late that does not recognize the need to invest in marketing, even though they cannot determine the return on their investment in any other fashion that anecdotal (perhaps that will change with Web 2.0 but we will see).

While I agree that there are still remaining challenges in effectively tracking & tying specific revenue increases to specific marketing programs in many contexts (e.g., print advertising in a B-to-B environment with long sales cycles), I do believe that the marketing discipline is getting much more adept at tracking results, both within the context of the web (via enabling tracking technologies and the ability to complete the purchase within the e-commerce context) as well as via more traditional vehicles such as print and broadcast advertising.

All too often, in my experience, the lack of establishing even rudimentary measures of ROI on marketing expenditures stems not so much from structural limitations as it does from the inertia and sometimes outright resistance of the marketing professionals involved. Marketing programs that can track and report such metrics are often more complex, time-consuming and costly to design, implement and manage. Since very few marketing executives have the luxury of a surplus of resources (people and $s), the natural inclination is for them to squeeze one more ad placement or trade show event into the plan in lieu of implementing ROI tracking mechanisms.

Another dynamic is the resistance of many marketing professionals - particularly in small to medium-sized firms - to allow such transparency into their efforts. We (after all, I am a marketeer) have had a tendency to obfuscate and try to romanticize our profession, positioning it more as an art, than the science it actually can be. Measurement also means accountability, and although we might be loathe to admit it, there is a natural human reluctance to be held accountable (often exacerbated by the tactics of some managers to use “accountability” as a means of manipulation and punishment, rather than as the motivational and learning tool it should be.)

So, when an executive hears from her marketing lead that he can’t measure ROI on marketing dollars, she can and should push back. At the very least, proxy metrics and objectives should be defined, agreed upon and tracked.

Don’t take “We can’t know” for an answer…..

The Challenge of Investing in People

Posted on April 6, 2008
Filed Under Governance, Leadership, Management, Norman Wolfe, Organization & Culture, Strategy Execution | 1 Comment

Have you ever heard a board member, or perhaps even a CEO say, “The Company sure invests a lot in trainings, meetings, and “feel good” stuff, and I wonder if more of those resources and energy went into focus on results whether we would be better off?”  When we ask the CEO to focus on results, which I firmly believe is what the board should hold the CEO accountable for, we have to understand what the drivers to producing results are.  

 In every business, at the end of the day it is the people who produce results (I have yet to see a machine or a process produce anything without people).   While it is easy to see expenditures in the “feel good stuff” as wasting resources, the real challenge lies in the difficulty to determine if the investment will produce the result.   The proof is in the results, but how do I know that my investments will in the end improve results.

  No one will argue that making an investment to improve the organization’s ability to perform better is wasting valuable corporate resources.  In fact most will argue that if you don’t invest for improved performance you are not doing your job as CEO. 

 In the “machine” aspect of an organization it is relatively easy to determine the value of the investment.  When I install a new piece of equipment, upgrade a piece of equipment or do maintenance work on a piece of equipment, I can see the results of the investment pretty quickly and very concretely.  So both from an observational framework and a time frame I can “measure” my success very easily.  The same can be said for re-engineering a process, there are fairly concrete observational data in a time frame within which I can correlate results to investment.

  When I am dealing with the “organic” aspect of an organization, human development, there is a lag time between investment and results.  And this is the real issue.  It is because we cannot see the results in a definitive pattern from investment to results that we easily question the value of the investment.  And the lag time is a function of the type of investment.  Some skill development is visible and measurable (teaching someone to type) and even the time frame for translation into results can be determined relatively easily using benchmark data (I expect someone to improve form 40 WPM to 80WPM within 3 months).

  But what about development issues that are much less tangible, like investments in gaining alignment and commitment.  These are extremely difficult to determine the impact of the investment, not only because of the lag time but also because of the multitude of variables that can impact success of the investment.

To make the point another way let’s take a look at an investment in hiring a business development person one of our CEO clients recently experienced.   It took a couple of years for the new business development person to start producing payback for his time “schmoozing with the brass”.  And now a good portion of their current growth is directly attributable to this investment.  Yet there were many people, including some on the board and the executive team, who was pressing the CEO to save the expenses and cut the position since this person wasn’t brining in any current period revenue.

  I often look at the challenge we are facing of “investing in people” as the same challenge that investing in marketing underwent 20 - 30 years ago.  I often heard back then that investing in marketing was wasting valuable resources for we can’t really tell the return on our marketing dollars.  And still today no one has yet come up with a way of tying marketing dollars into actual growth in revenues.  There are a lot of attempts at proxy metrics (number of placements times expected impressions per placement yields so many leads generated, etc).  But I have not met a CEO of late that does not recognize the need to invest in marketing, even though they cannot determine the return on their investment in any other fashion that anecdotal (perhaps that will change with Web 2.0 but we will see).

  What has changed over the years regarding marketing investments is that the mindset of the CEO and the executive team which has come to appreciate the value of marketing, and that resources must be devoted to it.  And though I still have yet to hear a CEO say they can concretely determine the return on their marketing expenditure, they readily make the investments.

  And like marketing, people development activity has gained much from years of studying and research around this very question.  And though there isn’t, and I dare say likely will never be, a concrete set of metrics, there are best practices on what are effective investments in people development is and what is wasting dollars.

  I think the challenge for boards, CEOs and their executive teams is to not summarily dismiss these investments as wasted expenditures but to begin to learn what is effective investment and what is wasting corporate resources and how will we know the difference in the context of their company.  Norman WolfePresident/CEOQuantum Leaders, Inc 

Big Teams - Barriers to Innovation?

Posted on March 25, 2008
Filed Under Gregg Gallagher, Innovation, Organization & Culture, Uncategorized | Leave a Comment

In his recent post “Is Design a Team Sports?”, Idris Mootee discusses the role of the individual designer versus a design team. During that discussion he broaches the question as to whether large teams are barriers to innovation. I think that there is a semantic trap in the question, becuase it potentially blurs the distinction between ideation, invention and innovation. Mootee and others often confine their definitions of innovation to the contexts of ideation and invention, which is often best pursued in a solitary - or at best, a small team - context. (e.g., how many great symphonies were written by committee?) An alternative definition of innovation which I prefer to use is that Innovation is the creation of customer value via invention (where invention is the instantiation of an idea or concept.)

In this conceptual framework, the instantiation/implementation of the idea via invention can require a large group effort, as well as the realization of customer value by implementing the operational and logistical infrastructures required to deliver a product or service to customers.

I don’t think it’s axiomatic that large teams are always barriers to innovation. Rather it’s in what contexts is teaming (large or small) optimal, and where is it potentially a barrier.

What have been your experiences with teams (large and small) as it relates to the innovation process?

Is Stage-Gate a Barrier to Innovation?

Posted on March 17, 2008
Filed Under Gregg Gallagher, Innovation, Strategy | 1 Comment

 In a recent, thought-provoking posting on his excellent Innovation Playground blog, Idris Mootee posits that the traditional product development stage-gate framework is a barrier to innovation.

The following is my comment posted to his blog:

Idris:

When I first read the title of this post, the “old school product manager” in me reacted viscerally. Then when I read through the post itself, I came to the realization that our thinking was, in fact, in alignment.

Stage-gate by itself does not promote the ideation/invention aspects of innovation. Where it can play a role is in the implementation aspects of innovation. (In my framework, innovation stems from creativity/ideation that is instantiated via invention and that creates customer value.)

Mere invention which does not create real customer value via implementation is not innovation.

As you noted, stage-gate typically does not do well in contexts that are forward-looking (market-driving) as compared to extrapolating from past experience (market-driven).
However, I do believe that stage-gate can and should incorporate the service design component by defining the appropriate design frameworks and methodologies into the appropriate stages.

However, where stage-gate does not fare well by itself is in the connection to the overall strategy of the organization. It is here where a robust and flexible opportunity portfolio management framework needs to be in place. Not only to prioritize across all the various opportunities, but to also bring them into alignment with the overall strategy of the organization.

What I believe is needed is a separate framework for the early stages of the product/experience innovation process that dramatically shrinks the decision loop time in the early stages of innovation versus that afforded by traditional stage-gate.

So who is responsible for innovating the innovation process? This speaks to the question of what is the product/service management model of an organization. Some models have PM being an inwardly-focused role, aligned with development and heavily focused on writing specs and a project management role. Outward-facing models (”market-driven”) have the product marketing function totally focused on determining customer needs and the marketing of the product once it is released.

In my opinion, the strongest model has the product management function driving innovation by playing a central role in the overall orchestration of the innovation effort, both inward and outward facing. In this model, product management would be responsible for the ongoing innovation of the innovation process.

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