The 5 F Factors in StreetSavvy℠ Leadership.

I attended a roundtable discussion sponsored by Susan Howington, CEO of Power Connections, the other day. Susan holds these meetings with senior executives regularly and we discuss topics of interest. The topic we discussed revolved around whether a strong leader is not afraid to change his/her mind and under what circumstances they should be flexible in changing course. It appears that many leaders, in order to look strong, set a course of action, and don’t want to change for fear of looking weak and flighty.

There were several people in the discussion today including Peter DeAngelis (CEO, TechCoastAngels), Ron Davis (CEO and GM), John Theron (former CEO and current software consultant), Patrick Flynn (PE CEO and former aerospace exec) and Cindi Mullane (CEO and operations executive in the fashion industry.) This was an excellent complement of people.

The initial discussion centered on the need for clearly setting goals and objectives, continuity of strategy, becoming agile in one’s thinking, recognizing challenges and preparing your team to meet the uncertainty of these challenges, and keeping options open, e.g. predesigning flexibility into your decisions.

Many years ago, I coined the term StreetSavvy℠ as applied to many executive functions. When I worked for founding CEO of US Cellular Don Nelson, Don and I coined the phrase fast, fluid and flexible as we were trying to grow in the young but growing wireless market. I have used that concept over the past many years of my career. This was the start of thinking about the characteristics of what StreetSavvy Leadership is about. Additionally, I have also talked about fast failure in getting products to market. More recently I wrote a blog and did a talk on managing a business. The two words are Focus and PODFU (plan, organize, delegate and follow-up). After participating in this discussion group, I found myself seeing how all these components now come together in what I call the 5F Factors in StreetSavvy Leadership. These are the five factors I believe that can make leaders stronger and their companies grow.

1.  Focus. Business executives are constantly bombarded with many different product opportunities, decisions, strategies and the like.  If everything is a priority, nothing is a priority.  Therefore, the first characteristic for a StreetSavvy executive is to be laser focused.  Don’t try to do more than two or three major initiatives at the same time.  You have to have clear priorities because you need to have dedicated resources to be successful.  As Sun Tzu said: concentrate your resources at the competitors’ weakness at the point of attack.  This is the business correlate.

2.  Fast Afoot. Fast doesn’t mean reckless. Most executives believe they have to make a decision and do it with speed. Then once a decision is made you execute relentlessly. This is basically true. As executives we need to have information and facts upon which to base decisions. Unfortunately, in business, information and facts are never complete and there is a point at which more facts give you limited additional utility in making a decision. Because an executive never has complete information, decisions are always uncertain and it is a matter of how likely the decision will be correct and how potentially damaging uncertainty becomes.

3.  Fluid. Things change. Water conforms to the changing landscape to reach its destination. The destination or goal may still exist but there may be impediments along the way and obstacles to overcome. Fluidity means dealing with these changes, mostly tactically without changing the strategy or the end game. StreetSavvy Leaders continually scan the environment absorbing new facts and information. They figure out a way to maneuver through the changes that take place. Scanning the market through customer panels, tactics like mystery shopping or Undercover Boss, assigning people or teams to track a competitor – both direct and indirect – are critical to get new information and upon that new information to make informed decisions which might change the tactics of the strategy or to a lesser degree the strategy itself.

4.Flexible. Opportunity knocks and changes in tactics may occur. Tactics and strategies must be consistent with goals and objectives which are much longer term. Andy Grove, former Chairman and CEO of Intel wrote that only the paranoid survive. To me, paranoia in business is good in order not to be complacent. Executives have to look at opportunities as they arise and address them. Should an opportunity exist executives might need to change course. I recall working for one company which had negotiated a large contract with a supplier many years before. The technology shifted and over time that technology was neither as robust nor cost effective as a newer technology invented by an Israeli company. Our company chose to stay with the older technology and that was perhaps one reason why our company was not as successful as we could have been. It happens all the time. Culture has to be set to enable this flexibility as changes to a plan are not normally welcomed by the highest levels of leadership due to economic or political concerns.

5.  Fast Failure. Making a decision is one thing. Staying with a decision that becomes a losing one can cause irreparable harm to a company with potentially serious side effects like going out of business or having to lay off people. As one of the participants stated: bad new does not get better with age. I recall when I was at one of the Baby Bells and we were trying to grow our business by focusing on new product development. Unfortunately, one of the products on which we spent significant resources was not going to be a winner. The right decision was to terminate the project yet the project lead who worked for me did not want the stigma of failure on his shoulders. The culture was to “punish” failure. In this specific case it was a slow failure. In retrospect, the life support on this project should have been pulled years before. In this case with a little prompting, the project lead terminated the project and I gave him a reward for making the right decision. The culture had to be established for fast failure. Just think of Google and how many projects they have in the works at any one time. Or even 3M. They know that some projects will fail and executives are ok with that. Similar to stock trading you have to let your winners run and cut your losers quickly. How many of you are willing to do that?

How does the StreetSavvy Leader manage to implement these 5 F Factors? The primary need is to communicate and have an open dialog with your team and others lower in the chain of command. It is critical for the leader to walk the talk and become Pattonesque in their leadership style. Be on the front lines with your troops. Be visible and be communicative. Ask questions and listen and know that your obligation to your company is to new and even divergent information so you have the best chance of building a successful company.

Glad to have other viewpoints.

4 Tools for the StreeSavvy Business Executive to Manage Growth

As the third and final installment on tools that the StreetSavvy℠ Business executive can use, these four tools focus on ones that can help manage growth while ensuring the right resources are dedicated to the initiatives and risk impact is managed.

The tools that follow include: The Ansoff Matrix, Ishikawa Diagrams, Risk/Impact Analysis, and RACI.

Ansoff Matrix

The Ansoff Matrix is used to help companies determine which products are to be developed and which markets are to be pursued.   Some of the tools we shared in  a prior blog e.g. the analytical hierarchical process, can be used to set priorities relative to budget constraints.

We love the Ansoff matrix because it is a very easy model to understand the product portfolio. 

The diagram above is a modification of the Ansoff Matrix which was developed by H. Igor Ansoff and first published in the Harvard Business Review in 1957 (Harvard Business Review, 35 (5) 1957, pp.113-124), in an article entitled Strategy and Diversification.   It provides a great framework for considering paths to growth and the associated risks of attaining that growth.  

Yet, it is sometimes difficult to use because it required solid analysis and planning. The idea is that, each time you move into a new quadrant (horizontally or vertically), risk increases.  These are called adjacencies and moving to an adjacency is less risky than moving along a diagonal toward the “diversify” box. 

If one uses the Ansoff matrix, we would like to see companies use the following risk/impact model as a complement.

RACI

RACI is a cool tool that is also called a responsibility matrix.   It lays out a project or a task and shows the intersection of that project or task with those people and/or functions that have a part in the decision.   

R stands for responsible part and is the person who actually carries out the process or assignment.  There can be several R’s on a project.   
A stands for accountable and is the person who has the ultimate accountability and leadership of a task or project.  
C means that people or functions who are not directly involved with carrying out the task or project yet are consulted prior to the task being completed.  This person could be a subject matter expert or other stakeholder. 
I stands for those who are informed of the decision as they may have a part in receiving the output of the work.  For example, customer service may be informed of the decision on a new price or promotion that the marketing department conceives for a new product.

Ishikawa (Fishbone) diagram

Fishbone or Ishikawa diagrams enable an individual or preferably a group of individuals todetermine the cause and effect of a specific action.  

The goal is to ask questions several times in different ways to fill out the “fishbones” and come to a common root cause.  Therefore, if you say that revenues are low, you might want to fill out the “fish bones” by listing 3 main causes such as 1) Lack of Channel Partners, 2) Price too high, and 3) Product not correct fit.  Then for each main cause you delve deeper into the reasons why for each perception in order to determine that there is a root cause.  I recall doing this for one of my tech companies and the answer came out that the training for our sales reps and the channels was incorrect.  So after adjusting the training and requiring that the sales people became certified by their managers, revenues improved dramatically.

Risk/Impact Analysis

  

In many ways, risk impact analysis seems simple and something everyone should do.  But it isn’t performed on a regular basis.  At many companies risk impact analysis is performed on major projects and by so doing the analysis StreetSavvy business executives prevent surprises.

Here’s an example of the risk impact matrix on the left coded in terms of RED (high risk and impact), YELLOW (medium risk and impact) and GREEN (low risk and impact.   

On the right side of the figure, the executive and/or team specify the risk, the initial placement on the chart, and then plan to move it to less risk or less impact by a combination of strategies and tactics.   The information shown is an actual assessment for a client but is cloaked to protect the confidentiality of the work.

We would be glad to talk about how these tools can be used in your business.  Feel free to contact me at dfriedman@clevelpartners.net to see if you qualify for a complementary one hour analysis.