2011 « Advisor Catalyst

Archive for 2011

In 100 Words: Crisis Mode

Thursday, December 15th, 2011 by AdvisorCatalyst

Thus, some leaders deliberately create crises in their organizations. This can be productive, but beware: you can only do it so often. The intensity of a crisis demands a lot of energy. People have physical, mental, and psychological limitations. Too many crises can run the risk of burning out employees and quickly diminishing the benefits of this tactic. People eventually get numb to danger.

Crisis mode can be powerful, but choose your spots.

“Leadership is the art of getting someone else to do something you want done because he wants to do it.” (Dwight D. Eisenhower)

Tags: Dwight Eisenhower
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Happy 90th Birthday, Dorothy Zehnder!

Wednesday, November 30th, 2011 by AdvisorCatalyst

How would you feel if you knew today that you would still be working at 90? If Dorothy Zehnder is your model, it should excite you.

In 1950, Dorothy and her husband (along with her husband’s family) bought a small hotel in Frankenmuth, Michigan. Sixty-one years later, their Bavarian Inn is the cornerstone of Michigan’s “Little Bavaria,” one of Michigan’s most popular family attractions.

Dorothy turns 90 today. She still runs the kitchen, still uses many of her original recipes, and still works six days per week. Her motto is: “if you don’t feel well, go to work and pretty soon you’ll feel better.”

Speaking with Paul W. Smith on Detroit’s WJR-AM this morning, Dorothy described her ten-hour days as “fun.” She had a similar theme when we interviewed her for upcoming edition of The CEO Advantage Journal. “I like to cook,” she told us. “It’s satisfying to make a good product and get it on the market. I like the fact that people enjoy my recipes. Retirement never crossed my mind. I love what I’m doing. I would rather [stay] right here visiting with people and making recipes that thousands ask for.”

She’s right. Productive work is fun! Take a moment today to step back from the daily grind of your operations. Look away from your financial numbers. Lay aside your worries about future customer orders. Just think about the purpose of your business. Who do you serve? How do you improve the life of your customers? What is your role in that? What do you enjoy most about it?

Isn’t business fun? Why would you not want to work at 90?!

Thanks for your example, Dorothy. Happy 90^th birthday and best wishes for continued success.

Tags: Bavarian Inn, CEO Advantage Journal, Dorothy Zehnder, Frankenmuth, Little Bavaria, Paul W. Smith, WJR
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Talent by the Slice

Monday, October 31st, 2011 by AdvisorCatalyst

In our current business environment, businesses face mounting pressure to master a broad range of specialized knowledge in order to succeed. Such knowledge is not limited to the specific technical areas in which they deliver their services; it also covers the administrative and management functions – financial, strategic, talent management, back office technology, legal, etc.

Most small and midsize organizations cannot afford to master all of these areas of specialized knowledge with internal staff – at least not full-time. Not only is the initial cost of training high, but the ongoing investment required to keep all those different resources up to speed in their particular area of specialized knowledge is cost-prohibitive for most organizations. Therefore, it’s not surprising to see a proliferation in outsourced services, including payroll, benefits administration, staffing, IT, etc. Many companies have grown quite large by providing these specialized services to other businesses.

No less surprising is the increase in organizations buying talent by the slice – hiring consultants or advisors. Some areas of specialized expertise do not require high volumes of repetitive activities or transactions (such as payroll or benefits processing). Into these areas step veteran knowledge workers who prefer to work independently, spread their expertise over more than one organization, and networks with other individuals who possess similar or complementary expertise. By hiring such an advisor on an as-needed basis, a small to midsize organization can afford a level of expertise that they could not afford full-time.

This “talent by the slice” trend is likely to continue for three reasons:

The competitive pressure on organizations continues to increase.
The fragmentation and specialization of knowledge continues to increase, and the rapid advancement of this knowledge requires a great deal of continuous learning.
The number of qualified individuals who want to work independently is increasing. This is largely fueled by the Baby Boomer demographic. They want to remain engaged in business with greater time flexibility, they have years of expertise that can benefit others, and in many cases, their personal financial situations require them to continue generating income. Serving clients as advisors is a way for them to fill each of these needs.

Tags: baby boomer, talent management
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Two Perils of Success

Friday, October 7th, 2011 by AdvisorCatalyst

Great leaders must be constantly aware of threats to their endeavor, and this does not stop when success is achieved. Success can lead to either overcautiousness or overconfidence, and both are dangerous.

Overcautiousness results in paranoia. The pioneer does not want to mess anything up, so he chooses to ride the current wave of success. Unfortunately, when the wave inevitably runs its course, he crashes with it.

Overconfidence results in blindness. The organization overreaches, extending beyond its resources and strengths, thereby putting itself in a vulnerable position. In trying to succeed too quickly, the organization is overcome by challenges bigger than it is equipped to handle.

Beware each of these perils. Those tempted to sit still must find the courage to act! Failure is always a possibility, but the only thing that guarantees failure is fear of failure. Mistakes due to inaction often engender regrets greater than those due to wrong actions.

Those tempted to ignore their weaknesses must open their eyes and face the reality of their situation. It is not just action, but disciplined action that separates the best from the rest.

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Increasing Knowledge Retention

Thursday, September 15th, 2011 by AdvisorCatalyst

I love to learn; thus, I love to read. But when scanning a previously read book, I’m often surprised at how little of it I remember. I forget far more than I retain.

Perhaps we would all do well to re-read our old books rather than buy new ones. Reinforcing good thinking and disciplines is important to sustaining performance. Don’t let new packaging fool you into thinking there is much new wisdom out there. Most “new” material is simply old knowledge presented with different labels and examples.

Choose a classic, and read it again as if it’s the first time.

“Men more frequently require to be reminded than informed.” (Samuel Johnson)

Tags: Samuel Johnson
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The Power of Persistence

Monday, September 12th, 2011 by AdvisorCatalyst

In May 2009, I had the pleasure of attending a Maximum Impact simulcast, which included an interview with former British Prime Minister Tony Blair. In my notes from that interview, I wrote the following:

3 Qualities of People at the Top Level of Any Organization:

Self-belief
Hard worker
Able to rise from failure

That last one caught my attention. Who has not failed at something? Whatever achievement one pursues, obstacles are as sure as the sun rising. How people respond to obstacles is what sets the great ones apart.

I think the key ingredient to rising from failure is persistence – the stubborn will to keep pressing. (Click here for my previous blog on “pressing the initiative.”) Great businesses respond to failure by following the advice from the old song: “pick yourself up, brush yourself off, and start all over again.” That’s good advice whether “starting over” means starting from scratch or just making a tweak. The point is to not stand idle. If you just keep churning with the best decisions you can make, odds are that your efforts will eventually bear fruit – and it’s likely that future yields won’t be as difficult as the first.

Ironically, failure is often just as likely to come from success – or more specifically, from resting in success. Pioneers such as Wang Labs, Alta Vista, and Rio’s MP3 player are largely unknown to us today, but the products they created live on in Hewlett Packard, Google, and Apple’s iPod. These pioneers died not because their products failed, but because they failed to persist in the efforts that make them successful in the first place. Their innovative competitors quickly passed them by and took over the market.

Whether you have succeeded or failed, you must persist in your endeavor to be great. There is no silver bullet. Great achievements result from hard work over the long term.

Tags: Alta Vista, Apple, Google, Hewlett Packard, iPod, Maximum Impact, Rio MP3, Tony Blair, Wang Labs
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In 100 Words: Two Perils of Success

Friday, August 5th, 2011 by AdvisorCatalyst

Success can lead to either overcautiousness or overconfidence. Both are dangerous.

Overcautiousness results in paranoia. To avoid messing anything up, one chooses to ride the current wave of success. Unfortunately, when the wave inevitably crests, he crashes with it. Overconfidence results in blindness. When an organization tries to succeed too quickly, it may be overcome by challenges larger than it can handle.

Beware each of these perils. Those tempted to sit still must find the courage to act! Those tempted to ignore their weaknesses must face reality. It’s not action, but action that separates the best from the rest.

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Depth and Breadth

Monday, July 25th, 2011 by AdvisorCatalyst

I once worked in a distribution business where the customer was the end consumer. Leaders in that business often said, “Depth equals profitability and breadth equals stability.”

By “depth equals profitability,” they meant that more volume delivered to an existing customer directly led to greater profitability. This makes sense, of course. Delivery efficiencies increase and selling costs are lower than when securing new customers.

If the saying had stopped there, however, the business would have been very vulnerable. If you focus entirely on selling more to existing customers, what happens if one of those customers suddenly stops doing business with you? Lack of diversification in revenue stream is a glaring risk for any business – particularly small ones. That is why “breadth equals stability.” Customer attrition will happen, so broadening your customer base is extremely important to improve your ability to survive it.

In short, the long-term health and stability of your business depends on a balance between depth (share of customer) and breadth (share of market).

This principle applies just as well for advisory businesses as anything else.

Depth = Profitability: The deeper your relationship with a client (the more you do for them), the more fees you can generate. Referrals are also more likely. Furthermore, greater knowledge of the client makes you more valuable to them, leading to efficiencies in delivery.
Breadth = Stability: The more clients you serve at one time, the more stable your revenue stream will be. A certain percentage of your clients will disengage at some point for one reason or another. The larger your client base, the less you will feel the consequences of losing a client.

There is definitely a trade-off between depth and breadth. The more time you invest in a client (depth), the fewer clients you are able to serve (breadth), and vice versa. Over time, you will want to increase both depth and breadth in order to build a vibrant advisory business.

Posted in Advisor Tips, Entrepreneurism | No Comments »

Press the Initiative

Thursday, June 23rd, 2011 by AdvisorCatalyst

At the October 2007 World Business Forum in New York, Garry Kasparov, the great world chess champion, noted that a player attacks in two ways. The first, “direct assault,” occurs when he is backed into a position he doesn’t like. Those who succeed are admired for their resilience and celebrated as a “come from behind” story. The second, which Kasparov called “creating and maintaining the initiative,” is preemptive in nature, putting the player in a position of leadership and control. It may lack the excitement of a surprise victory, but the persistent mastery is admired by all.

Many market leaders were not the original pioneers of their product. Examples include Boeing, Hewlett Packard, Google, and Apple’s iPod. In each of these situations, the market leaders outperformed the pioneers because they pressed the initiative. They continually improved, invested in people and research, and developed a strong organizational vision. Meanwhile, the pioneers lost an opportunity, not because they started badly, but because they stopped pressing.

How is your organization’s discipline in strategy execution? Create the initiative, and then keep pressing.

Tags: Apple, Boeing, Garry Kasparov, Google, Hewlitt Packard, iPod, strategy execution, World Business Forum
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In 100 Words: Press the Initiative

Thursday, June 23rd, 2011 by AdvisorCatalyst

World chess champion Garry Kasparov attacks in two ways: “direct assault” and “creating and maintaining the initiative.” The latter is preemptive, methodically putting the player in a position of leadership and control.

Many market leaders, including Boeing, Google, and Apple’s iPod, were not the pioneers of their industry. They simply outperformed the pioneers by pressing the initiative – continually improving, investing in people and research, and developing strong organizational vision. Meanwhile, the pioneers lost an opportunity, not because they started badly, but because they stopped pressing.