Right People, Opportunity, and Compensation

"If you pick the right people and give them the opportunity to spread their wings—and put compensation as a carrier behind it—you almost don't have to manage them."               --Jack Welch--


I'd add that this means giving your people the tools and target, getting out of their way, and clearly showing the rewards for winning.

Dare Yourself to be Real

Candor.  Jack Welch calls it "the Biggest Dirty Little Secret in Business."

Why is that?  Because often enough, people just don't open up and say what's on their mind--good or bad.  They withold criticism, they want to "make nice" and avoid conflict (as I said two Blogs ago in "Did You Reach Consensus?  Oh-oh").

We have to be determined to use more candor in the way we deal with our people, our teams, our meetings, and our situation.  From Welch's book "Winning:"

1. "....candor gets more people in the conversation, and when you get more people in the conversation, to state the obvious, you get idea rich."  "Instead of everyone shutting down, everyone opens up and learns.  Any organization-or unit or team-that brings more people and their minds in to the conversation has an immediate advantage."

2. "...candor generates speed.  When ideas are in everyone's face, they can be debated rapidly, expanded and enhanced, and acted upon.  That approach-surface, debate, improve, decide-isn't just an advantage, it's a necessity in a global marketplace."

3. "...candor cuts costs." "Just think of how it eliminates meaningless meetings and b.s. reports that confirm what everyone already knows.  Think of how candor replaces fancy PowerPoint slides and mind-numbing presentations (with real conversations)."

You've seen and know when people are using candor.  Dare to do it yourself.  Don't hold back.

In fact, be blunt.  Do it with respect, but better to show tough love than hold back and fail to achieve.

To Be Like a Rockefeller

In the late 90's, I was presented with a book from my friend David Parfitt in Atlanta titled Mastering The Rockefeller Habits by Verne Harnish.  That book forever changed and improved the way I've set goals, created and communicated plans, and organized and worked with teams.

I'll share just three principles from the many that Harnish discovered were put to use by John D. Rockefeller  during the latter half of the oil industry era--when his disciplined approach to business created unprecedented success.

1. Create a One Page Operating Plan.  A one-page plan is simple enough that it will get referred to and used often, as opposed to most plans in 3-ring binders that become shelf decorations.

2. Keep Everyone on the Same Page.  How do you do this?  You create simple, compelling goals and make them visible-- and then support with #3 below.

3.  Create Meeting Rhythm.  Establish a series of regular meetings with your team and extended team to communicate priorities, get reports against objectives, and use the One-Page Plan as a measure of your progress.  Everyone ought to know what's expected and what's coming each time you meet.  This keeps the meetings short, pointed, and impactful.

If you'd like to learn more about The Rockefeller Habits, go to Gazelle's website, created by Verne Harnish, where you can download the forms and worksheets to help get you on your way.

Sage Advice From Drucker

I try to keep up with reading my copy of "The Daily Drucker" which is a compilation of Peter Drucker's work arranged by topic with an idea provided for each day of the year. I share here a particularly insightful essay based on Drucker's work "The Effective Executive."

Five points:

1. Know where your time goes.
2. Focus on outward contributions.
3. Build on strengths.
4. Concentrate on superior performance.
5. Make effective decisions.


From "The Daily Drucker"

Five practices have to be acquired to be effective. Effective executives know where their time goes.  They work systematically at managing the little of their time that can be brought under their control.  Effective executives focus on outward contributions.  Effective executives build on strengths--theirs and others. They do not build on weaknesses.  Effective executives concentrate on superior performance where superior performance will produce outstanding results.  They force themselves to stay within priorities.  Effective executives make effective decisions.  They know that this is a system--the right steps in the right sequence.  They know that to make decisions fast is to make the wrong decisions. Whenever I have found a person who--no matter how great in intelligence, industry, imagination, or knowledge--fails to observe these practices, I have also found an executive deficient in effectiveness.  Peter F. Drucker

Hard to argue...

Why Do Manufacturers Use Distribution? Really.

As you may have heard me say before, manufacturers choose to use distribution for 4 primary reasons:

1) The distributor's knowledge of the market.

2) The execution of market and channel plans to get product to market thoroughly and efficiently.

3) Access to customers known by the distributor--where relationships flourish and penetration is deep.

4) The volume of business a distributor can deliver to a manufacturer.

But let’s add some of the more tactical issues to that list, shall we?

5) Distributors provide customer service and order fulfillment.

6) Distributors maintain inventories in the desired geographies next to the end-use customers.

7) Distributors provide logistics into the market.

8) Distributors absorb the credit fluctuations and the AR role throughout their markets.

Hold on—what’s wrong with this picture? How about this? Number 1-8 above can ultimately all be figured out and executed by manufacturer themselves. But before the customers of distributors get too excited about the possibility of “cutting out the middleman” and buying direct from manufacturers, we need to keep in mind that there are costs associated with all of these—at some level. So—the price is the price is the price. What an end-user pays for products will likely be the same whether they buy from distribution or from manufacturers direct—because there is a cost to all of these services.

Now, let’s look at the last two services distribution can provide.

9) Sales and Marketing, through excellent value-added sales representation and sales promotion into the market, and…

10) An unbeatable value proposition for customers. Distribution must create such a compelling reason for its customers to buy from them—that the customers could not even imagine carrying those particular products if it were not for the unbeatable value proposition the distributor provides.

These last two are the most challenging for distributors to figure out, design, pay for, and execute. But they are the key to a lasting dominance in the channel. And together, all of the areas above are a 10-point plan for sustainability and long-term success.

Execute...or be Ex-e-cu-ted

There is no doubt that one of the top five lessons I have learned in business is that of execution. And in fact at times it might be number one.

Having worked for a company in the first half of this decade that was fairly good at execution—I have learned how to spot execution when it exists, and more importantly—when it doesn’t. The CEO of our parent company felt execution was so paramount to successful business that he developed The Execution Award for managers who demonstrated effective focus, clarity of management, and clear speed in getting things done. Unfortunately, he would tell you that he could count on one hand the number of times he gave the award away across the various business that were part of the organization. My company was able to secure the award once. And we thought we were good at it.

Yes, execution is elusive.

When it exists, people explain things simply to one another, they reach clear agreements, and they hold one another accountable for results. You can observe it in those who are successful in gaining clear commitments from others, those who write down steps and dates and ensure everyone knows what they are, and then follows up to see to it what was promised truly gets done.

You can also see when execution is lacking—such as in these examples:

A president asks his team at a meeting when something will be completed, and the answer from one of the vice-presidents is “a couple of weeks.” The president then says, “Good—as long as it’s not going to be six weeks.” No one writes anything down and the conversation moves on.

(The problem here is that the president accepted a vague answer, did not write down a precise commitment date, and let the conversation move on without coming to a clear agreement on who, what, and when)

Or two, a manager sends an email to three recipients and addresses remarks to no one in particular—saying she needs some certain result by sometime next week.

(Here again, the lack of specifics cause each of the three recipients to think “Hmmm, certainly one of the other two will respond to this—since it wasn’t directed at me personally” and so it goes. Each of three recipients all go on thinking ‘someone else’ will handle it—and almost certainly no one will)

Or three, the supervisor of a work group needs to know that a brand new process has been used in 100% of the week’s production schedule to meet a quality guarantee. The ideal question would be something like “Was this new process used from the start of Shift ‘A’ this week—and continuously in every shift since right up through today?” Instead, the supervisor who isn’t practicing a solid discipline of execution attempts to ask the question—but expresses it instead as a statement: “And, the new process has been used from the start of Shift ‘A’ this week? His trailing tone leaves it hanging there as a confusing combination between a weak question and an even weaker statement. Its easy for the employees to silently nod their head, but the real answer is never flushed out.

Execution simply means getting things done. And as you can see, it has a very clear connection with a person’s ability to communicate clearly and with intention. You must use direct language. You must look people in the eye when you ask them questions—and get clear agreement. Assumptions cannot be made. Dates and promises are to be written down. Follow-up is to be consistent. And rewards afforded to those who execute—and withheld with those that do not.

Once you begin understanding and recognizing when good execution is present—and when it is not—you will be more purposeful in your dealings with people, with your communication, with your follow up, and with your attention to results.

It is, after all, what separates those who do—from those who do not.