The ROI on Staying Profitable

Today’s economy is tough. Many companies are facing revenue shortfall, profit squeeze, cost cutting, reductions in force and layoffs as well as the resulting increased stress throughout the company. Many companies are incurring losses and this isn’t just in the financial and automobile industries.

Long ago Samuel Gompers, the first President of the American Federation of Labor said “The purpose of business is to make a profit.” We may modify that a little today with our social consciousness, but it is essentially correct. Profitability is essential.

What is the ROI on being profitable?

We generally look at it in terms of the financials. What is the financial return on the investment to stay profitable? It is commonly agreed that it is significant. It impacts the internal programs, initiatives, operations, staffing and spending. It impacts the external aspects as well, in the relationships with our suppliers and the financial institutions, for example.

Beyond the financial aspect , there is a large emotional impact. A profitable organization tends to have a positive outlook on the day and the future. Employee moral is much better. Spending plans are tight and crisp to insure that the company remains profitable. However, when a company crosses that critical line and slips into unprofitability, there can be a sloppiness in planning. What is the difference between losing $100K or $150K or even much worse in the millions. This is a very dangerous situation.

How do you avoid slipping below the profit/loss line?

Unfortunately we find that many companies continue to operate in the same way over and over despite the fact that it isn’t working. They do not take the needed actions to change their result. Or equally bad, they do drastic cost cutting without a clear plan or assessment of the impact on profitability. Across the board cuts always lead to under-supporting key projects in other departments where the funding has remained.

Warren Buffet said “I am amazed at the number of supposedly smart executives who think they have all the answers and yet continue to make the same mistakes. Learn from someone with experience.”


Is this speaking to you? Ask yourself these questions.
· Are we less profitable today than we were last year or the year before? If we are actually unprofitable, mark this with red!
· Are there bottlenecks in our operations for which we do not have a solution?
· Are we in the cost cutting mode that may shore up short term profitability but could cause a much more significant impact across our organization as we go forward?
· Are we working harder and our results are lower?
· Do we question if we have a plan that really works?

If you answered yes to any of these questions you should consider getting some expert help. Our recommendation based on years of working with many companies is to divert a small portion of the company’s spending and invest it in obtaining a better way for you to do business and to stay profitable. The ROI can be considerable.

Don’t keep doing the same thing. The definition of insanity is doing the same thing over and over again, but expecting a different outcome.

If you are still wondering about this, contact us. We have a simple starter plan and it’s free to you.

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Time for a tune up for you and your company?

You're back from summer vacation. But do you really want to go back to business as usual? Did you find that you were working much longer hours and not achieving all the results that you had wanted? Our experience has been that when the economy becomes tight, companies benefit from an effectiveness check. Much like your car does when you take it in for a tune up to make those adjustments that keep it running right. This covers the basic analysis of what is and what is not working, resetting the processes and reviewing the use of your resources to help cut costs and increase the output they generate.

That's why we're offering you our Back-to-Work specials. Choose one from these packages.

1 Analyze and identify key challenges that impact your profitability with recommendations for how to deal with them effectively and to navigate the profitability maze.
2 Document a current workflow process of an area that is problematic such as being inefficient or producing inconsistent results. The outcome will be put into a flow diagram format which will allow for better clarity, understanding and discussion.
3 Discuss and develop a management action plan to ensure employees understand their role in reaching key goals and get the information they need to perform.

Book before October 15 and our team will conduct two half-day sessions on one of these packages for $4,500 (25% off the regular rate). We will take the time to review the findings and recommendations with you and may even help get you started on the upgrades.

If you are outside the San Francisco Bay Area, there may be additional travel expenses if required. For our International clients, we will find a way for this to be a cost effective offer for you.

To reserve a time or for additional information, contact us at john.maver@the4views.com.

Make this a great end to 2008. Let us help.

John

PS How does 4Views fit with Maver Management Group? In addition to serving our existing clients, The Maver Management Group has joined a team of senior consultants called 4Views. By employing a systemic approached based on Planning, People, Process and Profits — the 4Views — we are able to serve our clients even more thoroughly and produce actionable, measurable and sustainable results. We can help you navigate through the profitability maze.

Your Friends at 4Views,
Cathy Hammer, John Maver, Margery Mayer

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Your Competitive Advantage - Seth Godin

Seth Godin wrote “Your Competitive Advantage”on his blog earlier this week. It was so good and matches so well with what we at Maver Management Group promote with our clients that we decided to post it in its entirety.

People are fickle, but we're generally rational. When someone makes a choice (hiring, firing, choosing a vendor, buying a soda) they're using some sort of internal logic and reasoning to support that choice.

As a marketer, you win when they choose you.

So, why choose you?

The answer to that question is your competitive advantage. What makes it likely that more than a few rational people will consider their options and choose you or your company or your organization?

Truth: It's rarely a computerized cost/benefit analysis. Instead, it's a human choice.

When the factors that matter to me are processed through my worldview and compared against the options I'm aware of, I will choose you when your advantages are greater than the competition, provided I believe that you're worth the cost of switching.

Key points:
Matter to me: Not matter to you or to the next guy, but matter to me. That's all I care about. (Example: it might mean more to me that my friends use your product than it does that you're cheaper).
Worldview: Based on the way I see the world, the assumptions I make, the truth that I believe in. (Example: If I don't trust young people as a matter of course, I'm not likely to choose you if you're young, all other things being close).
Options I'm aware of: If I don't know about you, you don't exist.
Switching cost: The incumbent gets a huge advantage, especially in high cost/high risk/network effect instances.

Some of the ways you might build or maintain a competitive advantage:
* Access to hard-to-replicate Talent
* Hard-earned skills
* Higher productivity due to insight or organization allowing you to be cheaper
* Low cost of living for you and your staff allowing you to be cheaper
* Protected or secret technology or trade secrets
* Existing relationships (switching costs working in your favor)
* Virally organized product and organization
* Large network of users already and a network effect to support you
* Focus on speed
* Monopoly power and the willingness to use it
* Unique story that resonates with the worldview of your target audience
* Shelf space due to incumbency
* Large media budget
* Insight into worldview of prospects--making what they care about
* Emotional intelligence of your sales force or customer service people
* Access to capital and willingness to lose money to build share
* Connection to community

Not on this list, at least not prominently, are "we are #1!", "we are better!" and "we try harder." Cheerleading skills are not a competitive advantage in most settings. And, with few exceptions, neither is "we are new." Also, "we are better and I can prove it," is rarely a successful argument.

Here's what your board wants to know:
* What's your competitive advantage?
* Is it really, or are you dreaming it up?
* How long will it last?
* Can your competition copy it?
* Does it resonate with the part of the market that is looking to buy?
* Is the advantage big enough to overcome the switching cost?

Seth’s thoughts are very good. How does your company stack up on these ideas? Call us if we can help you define your competitive advantage and then drive it to increased profitability.

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

10 Tips for Profit Navigation Through Tough Times

1. Re-examine your business plan and re-check your business fundamentals. Many business leaders measure their success by how hard they work and whether there is enough money to cover payroll. That’s not enough, particularly in tough times. You have to have a basic plan and a plan that is working. A plan that is known and understood throughout the company. Re-examine it and make certain that it is built on the right fundamentals. You may be surprised at the opportunities that will be presented. Talk to your customers. They are probably hurting too and want your attention and leadership. They will remember you when things turn around

2. Focus on the short term. By focusing on business in the short term, there will be far less concern over the long term. Do what it takes to remain profitable. Negative numbers become an excuse for almost anything and you will not only lose focus, but you will lose more business. You know what has to be done. This time make sure that you actually do it.

3. Focus on leading your team. Re-examine your inner circle and make sure that they are the right people and have the talents and tools to make things happen. Delegate duties so you can do what you do best. This strategy might require an extensive role change, but will help to obtain more control for the future success of the company.

4. Focus on what is vital today. Cut what is non-core. Invest in what is. Identify your core competencies and build on them. Know who and what you are and be that. The one caveat is to keep the investment in R&D. That is the lifeline to the future. But make certain that your projects are focused and tightly controlled. Do the same for your sales force. Keep your producers, lose your losers.

5. Develop and use reporting systems daily. Key company goals should be monitored daily and weekly, rather than monthly. Plans cannot be implemented without reporting systems that track critical numbers. A daily review helps to measure and clarify where company efforts need to be enhanced, as well as holds each employee accountable for performance.

6. Control costs. This is different than just cutting costs as in number 4 above. This is making sure that you do what is important and do it most cost effectively. Find new and different ways to achieve the results at lower costs. Many businesses just cut. This causes revenue problems now and in the future. Simplify something. It will help cut costs. Complexity equals expense. Look outside for good partners both as alliances and suppliers. Leverage relationships to save money or make money. Look for technology based efficiency. Use the Web to cut costs and boost productivity.

7. Offer incentives to key business drivers. All employees have the ability to drive or stall the business. Make them “owners”. Create incentives that drive to the goals you have set. These should contribute to both the profitability and mission of the company and be tied to specific measurables that each employee has control over.

8. Hold a daily management meeting. A daily meeting creates the intensity and focus needed for business owners to identify problems and issues, before they get out of control. You can motivate, direct and reward.

9. Play to win. Don’t just play to survive, despite the negative atmosphere in the market. If you follow these guidelines, chances are that you will be able to win now and even more so when the market changes to be more positive. Play to win.

10. Get some help. Invest in someone short term who can help you navigate through these tough times and keep your business profitable. Hire a good consultant. Their experience and objectivity can show you ways to accelerate your positive business progress. The ROI can be astounding.

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Positive Action in a Down Economy

Survey: Small business optimism at recession level
East Bay Business Times Tuesday, August 12, 2008
The National Federation of Independent Business’ monthly Index of Small Business Optimism dropped 1 point to a recession level of 88.2 in July. Half of the decline was due to weaker capital spending plans -- the lowest reading since 1975, the National Federation of Independent Business (NFIB) noted. Lower earnings, fewer job openings and lower inventory satisfaction also posted substantial declines.

These are the opinions of small business owners not the government economists, who by the way are still trying to find the right definition of recession and apply it. Those are the facts or at least some of them. Small business owners say we are in a recession and we are.

It is important to realize that this recession is different than previous ones. It is personal. What do I mean by that? Previous recession times were characterized by the dot com bust. That was for the “crazy” people who invested only in dreams not reality. Or it was characterized by the Enron, Arthur Anderson, S&L, WorldCom troubles where the issue was crooked people at large corporations. But this one is personal. It is my house that is worth less. It is my gas that costs so much. It is all of my bills that are so much higher. It is these issues that constrain my personal and business spending.

“So what?” is a favorite question of a friend of mine who speaks to hundreds of people every day and helps them to see the need for action. The rest of the question really is “What are you going to do about it?” This is a personal problem and you will need to have a plan to survive.

Many companies and most small businesses are cutting back. They are “hunkering down” and not investing. How smart is that? For some that may be the only way, but only for some.

“Sometimes the best way to deliver a punch is to step back. But step back too far and you ain’t fighting at all.” Eddie Dupris (Morgan Freeman) in Million Dollar Baby

There are many companies that are investing in their future. They see this as an outstanding time to develop the plans, set in place the processes, get the right people and do it at bargain prices that will drive growth and business revenue for years to come. NFIB said outlined gains in expected real sales, business conditions and the percent of owners saying this is a good time to expand.

So what are you doing in your company? Are you adopting the “deficit thinking, cut back” approach? Or are you adopting the “lets build a competitive advantage as we come out of the recession” approach? Warren Buffet and other very smart investors are in that second camp. They are stockpiling the resources they need a now at bargain prices?

This is personal. You can’t just sit and wait for either the government of “somebody else” to walk in with a plan. The Government stimulus checks have come and gone. So what is your positive action in a down economy?

If you need some help defining what to do call us.

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Ten Top Reasons Businesses Fail

“Going out of Business” signs are being hung up more often these days. Of course, not in storefronts exclusively, as we might expect walking through malls and shopping centers. We see the signs in RIFs, layoffs, plant closings, acquisitions, etc. We also see the signs in quarterly financial reports with dramatically lower revenue reported and profits turning to losses. A lot of businesses are failing or are in deep trouble.

There have been many in depth analysis and there are some common conclusions. Here are the top ten that we have found.

1. Not admitting or sometimes not even knowing that there is a problem. Some companies just do the same thing over and over and expect different results. Recall that this is the definition of insanity. Entrepreneurs, in particular, stick with what they have already been doing, even if it isn’t working, just because it’s what they know. Larger companies get lulled into not changing and it can difficult to make directional swings. Stop. Take a step back and look at the business metrics. Determine what isn’t working. Hit the "reset" button. Cut what’s not working and create a new vision of what the future holds.

2. Failing to plan. Failing to plan is planning to fail. We write about the importance of planning often. The majority of companies do not have a written business plan and then wonder why they are not succeeding. The planning process creates focus. It becomes your blueprint for success. A good marketing and sales plan, filled with strategies for increasing your revenues and profits, can often save you money and increase the results you’re getting.

3. Not leveraging your core competencies The key to long-term business success is leverage. But what do you leverage? You have to identify and understand your core competencies, both your own and those of your business. Businesses often get so buried in the day to day routines that they lose sight of what made them successful in the first place. They wander off into new ventures and ultimately fail.

4. Failing to create a TEAM environment. The leader can’t do it all by himself. Being the boss, the lead sales person, the finance securer and the technical expert can be a difficult juggling act. Get the right people with the right talents and delegate. Motivating, inspiring and rewarding your employees can be one of the toughest personal challenges. But with your commitment to your employees, productivity, efficiency and profits can shoot through the roof. TEAM = Together Everyone Achieves More.

5. Having a "Just around the Corner" mentality. We wrote about “When things settle down” and the problems that it causes. Successful salespeople and business owners know that they must charge ahead, no matter how overwhelmed they seem now, or how good things appear to be "just as soon as…" They know that the time is now and the bounty that lies ahead could get up and walk away before you get there. Do it now is more than just a Nike slogan.

6. Not knowing your numbers. How much did you sell TODAY? What is your actual profit margin on each product? What is the profitability of each customer? How much cash should you have on hand in order to make it through a slow cycle or an emergency? What is your time to market from inception of an idea? You have to have metrics and the right metrics in order to run the business successfully.

6. Not keeping up with your customers. Your customers are changing whether they call to tell you or not. Customers will buy from whoever has what they want when they want it. It’s up to you to make sure you’re on top of what they’re buying now and what they’re likely to buy tomorrow.

8. Not keeping up with technology. The social media is here and is growing astronomically. The old ways of advertising are changing rapidly and if you aren’t using the new technology and venues, you are doomed to failure. Check out the successful companies, large and small. They are all into the new age.

9. Not having the proper advisors Every great sports personality, business person and superstar is surrounded by coaches and advisors. A coach can see the forest through the trees and help you focus on the game. A coach is committed to making you successful. Get the professional help. It has a significant ROI.

10. Quitting - THOU SHALT NOT QUIT!

Do you recognize any of these elements in your business? If you do, trouble is likely ahead and you will want to do something quickly to change the situation. Call us. We can help.

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

What they didn't teach you in business school that your golf professional might.

This week is the Professional Golfers Association (PGA) tournament, the 4th “Major” golf tournament of the year. It is named for the thousands of teaching professionals in golf. The tournament pays tribute to the professional golfers who spend their lives leading and teaching all the rest of us who play this game as a hobby.

Can a golf-pro teach a CEO something about running a company successfully? The answer may surprise you. James F. Bracher of the Bracher Center for Integrity in Leadership wrote about this in 2006. I’d like to build on some of what he wrote.

Successful PGA golf professionals not only play well but also relate with many different people, maintaining commitments to the highest principles of golf. They teach students of all ages constructively and communicate effectively; while simultaneously mastering their own emotional reactions, intellectual and strategic challenges and performance demands. Playing consistently at or below par defines the scratch golfer, but not necessarily a golf professional. Those at the top of the game can teach more than driving, chipping and putting. They are master leaders as well.

They understand and model the behaviors required to play golf at a consistently high level. They are golf professionals because they are able to:
> Create a game plan and follow it. They have it written down so they and their support staff (the caddy) are always on the same page.
> Assess circumstances continuously, both opportunities and risks.
> Concentrate, relying on individual routine throughout performance.
> Stick with decisions, visualizing and executing without uncertainty or fear.
> Control emotions, including anxiety and tension, quieting the mind.
> Stay in the moment, concentrating - leaving bad shots behind.
> Maintain confidence and rhythm; sustaining balance and calm.
> Remember to see, feel and hit the ball - with confidence and intensity.
> Work with the best people to keep their skills at the highest level.
> Keep score with integrity. Golf is self policing and professionals not only follow the rules, they help teach others about the rules and the reasons behind them.

Are you starting to see the similarities for the performance requirements of a CEO?

The next time you play or watch golf, be alert for the leadership behaviors and think how you can model your CEO or senior executive behavior.

Added Note:
By now we know that Padraig Harrington won the PGA and the way he did it is a perfect example of the above behaviors. In the final round, Harrington was tied with Sergio Garcia for the lead as they approached the 17th green. Harrington’s ball was 10 feet away, Garcia’s 4 feet away. Seems like an advantage for Garcia.

However, you may recall that Harrington is coming off a win at the British Open and Garcia who has never won a major tournament faded at the British Open and lost in a playoff last year there to Harrington.

The pressure should have been on Harrington given the relative distances of the putts. But it wasn’t. Harrington followed the attributes above and sank the putt. Garcia missed his and Harrington went on to win.

A very good example for CEOs and other senior executives.

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Thought Provoking Questions for the Top Executive

1 “How’s business?” is often the first question people ask. Is your business at or above forecast and accelerating?

2. As Diana Ross sings in the theme song from Mahogany says, “Do you know where you’re going to?” Do you have a written business plan that is known by all your managers and guides their activities and decision making?

3. People want to know how to make their company successful. Do you have clear business goals and do your employees understand their specific role in achieving them?

4. Our people take personal ownership in creating success for our company. Who has the ability within the organization to make decisions and do the right things to achieve goals to which all have agreed and committed?

5. Do what you do best. That is what made you successful in the first place. What are your core competencies? How are these reflected in your business plans?

6. Fire fighting is draining and not overly productive in a comparative sense. Have you identified the key challenges and bottlenecks facing the company and do you have a specific plan in place to address each issue?

7. Branding and positioning can mean higher margins. We have written about that here before. Do you have a clear marketing and sales positioning for both the company and your products?

8. Business experts agree that you have to meet customer needs. Do you delight your customers? Is there a clear customer focus across the organization? How often is someone from your senior management team in contact with your top 5 clients?

9. Accurate forecasts mean profitability from better use of resources. Are your revenue and profit results usually very close to forecast?

10. Focus on the bottom line and the impact of actions on it makes for successful businesses. Are your financial measures and results understood broadly beyond just the executives?

11. What you measure gets attention. Do you have clear metrics that measure the progress on each of your business plan strategies and the advancement toward your long term goals?

12. A learning organization is a growing organization said Jack Welch, ex-CEO of General Electric. Is it acceptable to take risks in the organization? How is the learning captured?

13. Do you take advantage of the synergies of working with other companies to extend your effectiveness? Do you have alliances with other companies that extend your capabilities cost effectively?

14. Bill Gates said “R&D is the lifeblood of long term company success.” In the U.S., a typical ratio of R&D for an industrial company is about 3.5% of revenues, high technology companies between 7-14& and pharmaceutical companies 14-25%. Are you growing your investment in the future of your company?

15. A great percentage of new products fail in the marketplace because they are not well thought out from the customer or the supply chain point of view. Do new products make up a growing percentage of your business and are their market introductions at or ahead of forecast?

16. Speed, efficiency and profitability can be accelerated from sound processes in all aspects of the business. How sound are your processes?

17. Information overload is common and yet many can’t get the information they need, on a timely basis, to do their jobs properly. Are your people able to get the information they need to perform effectively?

18. The 80/20 rule is true for employees, both in terms of their impact and in reverse terms as to how much of management time they take. The best employees contribute the most. The least effective take the most management time. What are your plans for motivating and retaining your best employees? How will you manage out the least effective?

How did you do? What are your weakspots?

Let us know how we can help.

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Marketing and Selling to Professionals

Doctors, dentists, accountants and CEOs are people too. Even lawyers, despite all the jokes. The same is true for the remaining groups that are referred to as professionals. All are people too. If you look at what they do during their non working time, you will find that their interests are pretty “normal”. Family, activities, sports, cars, investments, travel and searching for the right purchases. While they generally have a higher education and possibly intellect than the average, the personal interests are not unusual.

So what? What does this mean to you?

It means that they will respond to marketing and sales messages very much the same as the rest of the population. It used to be thought that in order to communicate with professionals most effectively, one needed only the intellectual presentation of facts, since they were smart enough to draw their own conclusions. Clearly, that isn’t selling and really isn’t even communicating. Thankfully, we have gotten smarter.

Our experience with marketing and selling to professionals over the past thirty plus years, offers some insights. I’ll comment on two here.

The first is “What’s in it for me – the professional?”

In communicating with professionals, we often focus on what’s in it for their patients or clients. We forget the personal aspect and don’t answer the question of what’s in it for me - the professional. I have written about this several times before regarding customers or consumers. The same idea is true for professionals. Doctors not only want their patients cured they also want some peace of mind and less complexity. They have so many new pharmaceuticals and treatments on which to be current and so many other pressures. How can you and your product or service help them out? Dentists have an amazing array of mechanical products with new upgrades coming out all the time. How can they stay current, not buy the wrong materials and not go bankrupt? CEO’s, executives and lawyers have multiple opportunities every day to be distracted and actually add to their burdens, instead of giving them peace of mind. How can your product or service make their life a little better and even give them some joy.

The key here is to put yourself in the shoes of the professional and understand not only their medical or business needs, but also their personal and emotional needs. What would you want? Simple research can add to your analysis and conclusions. I have seen doctors and dentists stand in line at medical conventions for long periods to try their hand at miniature golf for a prize or to get a free take home gift for their kids. Could they do that on their own? Yes! But this was “free”. It gave them that little joy. During their wait there were many opportunities for selling/

The second is “How do you get them to take action?”

Create a simple trigger that makes them think about your product and what it can do for them when they see or hear the trigger. In the dental business at Procter & Gamble, we were marketing a product for mild to moderate gingivitis. Few dentists knew what was mild to moderate, so we created a trigger. If the patient saw bleeding gums when brushing or flossing, they needed our product. It worked and sales skyrocketed. For doctors, in treating patients with Urinary Tract Infections (UTIs), a burning sensation when urinating is a trigger. It means prescribe a certain pharmaceutical and there is no need generally for complicated and time consuming testing. For CEO’s and executives, fighting fires every day is a trigger that all is not running smoothly. There are some simple solutions that can be used to stop the fire fighting.

Professionals are people too. We have had experience over multiple years in communicating successfully with professionals in many different industries. We have found that the principles for communicating effectively with dentists, doctors, lawyers CEOs and other professionals are the same. The execution may be different but the principles are the same.

We suggest these two ideas as a start. There clearly are many more. Contact us and we can help you understand your professionals and find the right triggers for your market as well.

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Believe It or Not: An Original Take on Leadership

Tom Peters posted an article this week entitled “Believe It or Not: An Original Take on Leadership”.

He recommends a book by Dov Frohman, a pioneer in the semiconductor industry. With Rob Howard, Dov has written Leadership the Hard Way: Why Leadership Can't Be Taught—and How You Can Learn It Anyway

Some of his thoughts are unconventional and yet right on. What do you think?

" In a chapter titled "The Soft Skills of Hard Leadership," Frohman astonishes as he insists that the leader-manager must free up no less than 50% of his-her time from routine tasks. To wit:
"Most managers spend a great deal of time thinking about what they plan to do, but relatively little time thinking about what they plan not to do ... As a result, they become so caught up in fighting the fires of the moment that they cannot really attend to the long-term threats and risks facing the organization.

So the first soft skill of leadership the hard way is to cultivate the perspective of Marcus Aurelius: avoid busyness, free up your time, stay focused on what really matters. Let me put it bluntly: every leader should routinely keep a substantial portion of his or her time—I would say as much as 50 percent—unscheduled. Only when you have substantial 'slop' in your schedule—unscheduled time—will you have the space to reflect on what you are doing, learn from experience, and recover from your inevitable mistakes. Leaders without such free time end up tackling issues only when there is an immediate or visible problem.

Managers' typical response to my argument about free time is, 'That's all well and good, but there are things I have to do.” Yet we waste so much time in unproductive activity—it takes an enormous effort on the part of the leader to keep free time for the truly important things."

Yet another surprising idea from the same chapter is "daydreaming":
"The Discipline Of Daydreaming": "Nearly every major decision of my business career was, to some degree, the result of daydreaming. To be sure, in every case I had to collect a lot of data, do detailed analysis, and make a data-based argument to convince superiors, colleagues and business partners. But that all came later. In the beginning, there was the daydream.

By daydreaming, I mean loose, unstructured thinking with no particular goal in mind. In fact, I think daydreaming is a distinctive mode of cognition especially well suited to the complex, 'fuzzy' problems that characterize a more turbulent business environment. Daydreaming is an effective way of coping with complexity. When a problem has a high degree of complexity, the level of detail can be overwhelming. The more one focuses on the details, the more one risks being lost in them. ... Every child knows how to daydream. But many, perhaps most, lose the capacity as they grow up.”

The 50% amount of time to freed up is high based on my experience but the concept is absolutely correct. We must have free time to think and day dream. The most valuable asset of any company are the brains and yet we constrict them constantly. Unleash your brain power and that of your organization.

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

The COO – The Conductor of the Business Orchestra

As the Director of the San Ramon, California Chapter of the Chief Operating Officer Business Forum, I have the opportunity to work with a number of COOs from a wide variety of industries. In addition to sharing best practices and helping with business acceleration, we work to help define the role of the COO in organizations. The CEO role is well known and many have written about it, including me in my “CEO Tips I Wish I had When I Started” series. But the COO role is different. It is complex and often varies depending upon the CEO’s particular strengths.

There is a lighthearted analogy that may be appropriate - an orchestra conductor. Musical theater and particularly the big Broadway musicals are multifaceted just like a business. The story and the score are written, comparable to a strategic plan. Many different functions are involved, generally under the leadership of the producer and the director. They co-ordinate everything right up until show time, similar to the executive team. And there is a product to sell for revenue and profitability.

Show time and the conductor takes over. This is comparable to how the COO takes over as businesses reach the market and everything comes together. The performers, the business units if you will, the production team for lighting and sound and stage movement, the product supply, and even the ushers, the customer service people, are under his direction. He starts the show by a tap of his baton to focus everyone’s attention. He then brings everyone to action and the show starts. He determines the volume of the music. The right level sets the tone of the score most effectively. If it is too loud, it will drown out the performers and their roles will be lost. If it is too soft, the melodies are lost and the “imperfections” in the casts’ voices can be uncovered. He sets the tempo to facilitate the delivery of the songs in the score. His fine hand on the controls with his baton can build up the performers on stage and make them stars. If he fails, he can destroy not only the show, but the singers as well. Careers are in his hand.

How is this similar to the COO? The COO is charged with the operation of the company. It is their responsibility to make certain that the execution of the plan is done with excellence and that all of the functions work in harmony, just like the orchestra. Certainly, all of the functions and senior executives have their roles just as the actors and actresses do in the stage production, but they must be co-ordinated well. The results of the conductor’s work can be seen in the box office receipts and the results of the COO’s work can be seen on the bottom line profitability of the company.

How important is the conductor to the production in the eyes of the cast? Here is what happens at the end of every performance. After the performers have taken their bows and received the accolades from the audience, the lead performers steps forward. They direct the cast’s and audience’s attention to the orchestra pit and to the orchestra director. Then the cast applauds the conductor. They recognize his critical importance to their success and the success of the show. The audience leaves the theater often singing or humming parts of the score and continuing the tribute to the conductor.

The orchestra conductor is a critical factor in the success of the musical business. The COO is a critical factor in the success of a business. One may very well say that there is much more that a COO does to make a company successful and that is true. However, it serves as a good analogy for the critical role of the COO.

So applause, applause.




John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management