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Turning Tough Times Into Triumph

Keith McFarland, author of The Breakthrough Company and Bounce and a regular columnist for Business Week, spoke at a Chicagoland Chamber of Commerce event on September 30th.

Instead of outlining the findings of either of his two books (“So you will still buy them both,” was his reasoning), he spoke about three “ah ha” moments learned from researching the books and from speaking with successful middle-market companies since.

1) “It’s not what you make; it’s what you make of it.”     

McFarland warned about having “self-limiting ideas,” especially in down times. Self-limiting ideas are assumed, but not actual, barriers to your growth or channel strategies. He compared two companies in the same field that grew at about the same rate until one leveled off at $100 million, while the other one (Fastenal) grew to $3.5 billion. The manager at the $100 million company believed that this size was about as big as this type of company could expect to grow.

When it comes to what makes breakthrough companies so great, McFarland quoted from an interview he had with the manager of an ultra-successful business: “What makes us great is our response to when we almost lost our company.” Learning from near-death experiences, according to McFarland, was a common answer to the “what makes you great” question. In other words, he explained, “great companies are built during bad times.”

2) “It’s not how you’re wired; it’s how you wire your company.”     

To learn what made the CEOs of breakthrough companies so successful, McFarland and his team performed 600 personality tests and assessed the results. What did he learn? “It was a stupid idea,” McFarland admitted. He explained that the CEOs’ personalities were so different, that personality could not be the critical factor. The critical factor? How they built their companies and processes.     

McFarland brought two CEOs together, one a former math teacher and the other a former football quarterback. While they were very different people with different manners, they outlined their business strategies “. . . as if they were answering the question for each other.”     

According to McFarland, there are two key leadership traits available to all leaders regardless of personality type: (1) absorb anxiety and (2) be more of a coach* than a commander/controller. Leaders do not have to have a specific personality to grow a successful company; they need to create sense of ownership for the employees.     

He used Roger Staubach (former NFL great and now leader of a successful commercial real estate firm, see http://www.srsre.com/) as an example. Staubach has no sports memorabilia in his waiting room or his own office. When McFarland asked him, “Why not?” Staubach replied, “Because we are building something bigger than Roger Staubach here.”     

McFarland did, however, mention one common personality type of successful CEOs: “They are stubborn about what they believe.”

3) “It’s not just about getting the right people; it’s about getting the people right.”     

McFarland began with a criticism that “Get the right people on the bus” (from Good to Great) was nonactionable. “No one is trying to get the wrong people on the bus!” he declared.     

He used as an example Polaris (see www.polarisindustries.com), a breakthrough company that got its start in a frostbitten and forbidding town called Roseau, Minnesota. “Harvard MBAs are not clawing their way over the walls to work in this town,” joked McFarland. And yet, the company became successful, despite the lack of “professional” management. McFarland reasons that they “got the people right.” How? First, by hiring the best people available, though not spending an inordinate amount of time on this part of the equation, and then by ensuring the people are committed, love their jobs, and are used to their maximum potential.     

He advised that leaders develop a team that can think strategically. A trick, he explained, is having them sit in the CEO’s chair and “look around 360 degrees.” They could then focus more clearly on the “top 20% of critical initiatives.” Also, McFarland added, by giving your people the time and impetus to think strategically, you will be surprised at the problems they can solve for your company.

So, how can we as business leaders make these insights actionable?

Here are a few questions you can ask yourself, and your team, to help turn your organization into a breakthrough company and turn your current challenges into opportunities to grow instead of hurdles to overcome.

• Have you tested your growth and product/service assumptions? What proof do you have that you cannot be there . . . go there . . . do that? Think about that scene from Apollo 13 where the engineers were all put in a room and told to solve a problem with what they had in hand. Not to see if they could do it, but figure out how to do it.
• When was the last time you asked your team to help you solve the bigger problems you are facing? Do you even have a team you could task to do this? Before you go out and hire a passel of Harvard MBAs, though, let your current team have a crack at it. Odds are, you will get the solutions you need, and then some.
• Are you spending 80% of your time working on your three most important objectives? If not, then you should consider refocusing your time and energy on the key growth and value factors. We advise creating a to-do list, ranking your tasks #1-10 (or however many are on that list) and delegating anything that’s not the top three, or even putting them on hold, until your three most critical tasks are complete.
• Look in a mirror. Do you see a boss or a coach? If you see the former, think of ways you can stop imposing your personality and start empowering your team. If you see the latter, great, but now think of ways you can you create even more passion among your team members.
• Do your people/team members love their jobs? What can you do to reinforce what they love and reduce or eliminate what they don’t? Would they leave if they were given 10% more pay? If so, you have work to do.
• Do your people act like owners or employees? Answering this question is no easy task, but you can spot symptoms of each possibility. Do they defend their processes and answer your challenges with excuses? Or do they send you solutions to problems you didn’t even know you had or, better, provide growth ideas you have not yet considered? Do they even know you want and expect new ideas? And, be really honest here, how open are you to these new ideas?

We wholly agree with McFarland that creating a breakthrough company takes . . .

• a leader who can foster a sense of ownership and teamwork,
• senior management who focus on the top two or three core business needs, and
• an appreciation that tough times (like now) are opportunities to escalate, and celebrate, success, especially since most of the competition is looking merely to survive.

* See http://toughlovemarketing.blogspot.com for a good discussion/article on the value of coach-style leadership.

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.