ZachEvans

Believer. Husband. Dad. Coach. Healthcare Thought-Leader. All-Around Good Guy.

Management

If {Blank} Ended Today

by

If your business closed today, who would care and why? That is your purpose.

This quote from Cynthia Montgomery of the Harvard Business School recently caught my attention during some training in strategy I was completing as part of my career with HCA. It is a great question for any business to ask, as it distills the very reason that the business exists. If no one–not customers, employees, suppliers–would miss the business if it closed, what real purpose is it fulfilling?

I think that the question can have a broader context, however, especially for leaders. What if every leader asked themselves: “If I left my company today, who would care and why?” What would your answer be?

What if the answer was that no one would miss you as a leader? What does that imply about your value as a leader to your team, specifically, and the organization as a whole? What if the answer to the question is that the business cannot survive without you?

Neither question above can be viewed as positive. If no one will miss you, then you are not having the impact on your team and organization that  your leadership position demands and expects of you. Conversely, if the organization will not survive without your leadership, then you have done a poor job of developing your team and at succession planning.

As leaders we are asked to create value for our teams and organizations on a daily basis. We are asked to perform in such a way that many people would care–for the right reasons–if we were no longer in our current roles. We are also asked, however, to prepare for the day when we are no longer in our current role through team development and succession planning.

It is a balancing act that is the key to both your development as a leader as well as the ongoing success of the organization you are serving.

 

 

 

 

The Freedom of Letting Go

by

Controlling your own destiny is something that many of us strive for. We like to be in control; especially of things that directly affect us. We like the occasional surprise, but only those that are positive. No one that I know likes to be surprised with negative news. While the level of control we need to feel in order to be secure varies greatly, we still need to feel some amount of control over our lives.

The desire to be in control starts at an early age. Somewhere between the age of two and three all of my children started testing the limits of the independence. They wanted to start dressing themselves or would sometimes walk beside me without holding my hand. They also start playing alone and become comfortable with Mandy or me simply checking in on them from time to time. As parents we encourage this behavior and not just because it gives us a momentary break from our child-rearing responsibilities. We encourage it because we want our children to grown as individual; to become self-dependent.

The process of becoming self-sustaining lasts well in to adulthood and even transfers in to our professional lives. Most of us will begin our careers as individual contributors that have a job to do but are not responsibility for the work of other employees. Over time, hopefully, we enjoy some level of success and begin to be promoted to the point where, one day, we are charged with managing a team of individual contributors. When this happens—whether we like it or not—our self-dependence begins to disappear.

All new managers struggle with the idea of letting go. It is uncomfortable, especially if we inherited an existing team instead of getting to pick our own teammates. We have to learn to trust those that work with us (which is quite a bit different than working for us) to do their portion of the work that will make the team successful. We have to let go and settle for coaching and guiding rather than doing the work ourselves. One way that I had to personally developed this skill was when I was asked to manage a team that did work I had no idea to do myself.

My first staff meeting with this team (which numbered about 15 when I inherited them—3 managers and 12 analysts—and grew to 20 by the time I moved in to a new position) was a humbling experience. This team had deep technical knowledge and experience that I simply did not have and I now had to serve as their leader. How did I do it? I asked a lot of questions and then listened intently to their answers. I also recognized that I was being given the freedom to be a full-time manager leading projects, clearing hurdles, solving problems, and developing team members without the burden of needing to individually contribute to the work.

What I brought to the table was a clear vision of where the team needed to go and the skillset and relationships to make that vision a reality. I was able to lead and that team did (and continues to do) remarkable work in service of the goals of the larger organization. That freedom a wonderful gift, even if it meant putting a good deal of my future in the hands of others. I had to let go and trust my team.

14 Lessons Learned from Start-Up Failure

by

I have had the good fortune to be a part of several start-ups and early-stage companies. No two opportunities will be exactly the same (and certainly will not end the same) but there are many lessons that can be learned from the experience. Many of the lessons I have gleaned come from successes, but many were derived from failures.

In no particular order, here are my 14 Lessons Learned from Start-Up Failure:

  1. Be transparent in everything you do – Being transparent is not the same thing as not keeping secrets. All companies (and all people) have secrets and many of these should be kept by a small group of individuals so that they cannot be exploited by others. Being transparent means always telling the truth—even when you need to withhold some information for legitimate reasons. At the first start-up I joined—where I was employee #1 after the founders—we ran in to a lean period in terms of our angel funding. Basically, we were running out of money. Rather than talking with the employees (there was more than just me at this point), paychecks just stopped showing up. Multiple paychecks. Instead of being transparent, the founder would keep the door of his office closed on paydays or work from home. I will leave it to your imagination as to what this did to morale and trust.
  2. A sales pipeline is not the same thing as actual sales – When talking with potential investors, employee candidates or even clients, it is tempting to discuss a start-up’s sales pipeline in the same manner that one might speak about actual sales. Not only is this not transparent to potential partners but it is probably outright lying, especially if you do not qualify your sales pipeline with likelihood-to-close percentages. You may think it sounds better to talk about your $3 million pipeline but if your close rate is 0.1% and you have not actually sold anything yet this will come back to haunt you in the future. Additionally, knowing the size of a potential market or client is not the same thing as having an identified lead that should be included in your pipeline. It may not look as impressive, but it is better to be conservative and then over-deliver.
  3. Bootstrap as long as you can – A question all start-ups have to answer is: “When do we take in outside investment capital (if ever)?” The answer to this question will be different for all companies but you should certainly try to bootstrap as long as you possibly can. For some, this may be no time at all because you are trying to capitalize on a Blue Ocean opportunity and need to get to market quickly and then scale even more quickly. For others, this may be years. Whatever the situation your company is in, try to make it as long as you possibly can on your own money. Your life will be much easier. Taking on an investor—just like hiring your first employee—changes the game considerably. The founders are now responsible for, and accountable to, more than just themselves. This should be treated as a near-sacred commitment.
  4. Spend less than you think you should – Every start-up feels like they need to look larger than they are to be taken seriously in the marketplace. While this may be true, it does not automatically mean that you have to spend lavishly to keep up the appearance. Multiple companies I have been a part of looked for expansion and prospecting opportunities outside of their home market first where Southwest Airlines flew because of the lower airfare prices. One company was almost $20 million in revenue before we had our first office. Another, however, spent frivolously on consultants (a former politician that was paid to introduce the company to other politicians in Washington D.C.) and administrative assistants before we had any revenue because one founder wanted to be viewed as a player on the business stage. Every company needs to honor the fiduciary responsibilities that they have but start-ups need to bake this in to their company culture from inception.
  5. Raise more than you think you need – Every business plan you will ever see will include a pro-forma budget and revenue estimates for some time frame. While these are necessary to communicate the potential value of the organization to investors, a very wise person once gave me this advice: Cut all revenue estimates in half and double the amount of money needed to reach profitability. Once you do that you may be a bit closer to really understanding the financial prospects and needs of the company. Founders should do the same thing. Do you think it will take you $1 million to achieve profitability? Then try to raise $2 million. It is always easier to ask once for more than you need rather than having to go back and ask a second time because you underestimated the needs of the company. If you are concerned with diluting the shares in the company too much in an angel our first round of funding, do not be afraid to get a little creative with things like multiple stock classes or convertible debt.
  6. Do not have resources specialize – Most people that have been through a start-up have similar stories of being the CEO, switch board operator, salesperson, garbage collector, and business analyst all in the same day. Start-ups are, by their very nature, lean organizations when it comes to employees (although not always lean in other areas). You need highly talented individuals that are committed to the company and that do not mind rolling up their sleeves and getting their hands dirty. Even if it means cleaning the toilets from time-to-time. It is especially tempting for founders to feel like they need to specialize and delegate less palatable tasks but employees like leaders that lead by example. Besides, there will be plenty of time to worry about “highest and best use of time”, “role definition”, and teaching employees to “manage up” once you have enjoyed a certain level of success.
  7. Do not scrimp on the lawyers – While I certainly advocate start-ups scrutinizing every expense as if it will need to be paid with your very last dollar, you really cannot afford to scrimp on legal fees. LegalZoom.com may be a good resource to help you register your LLC in the Delaware, Florida, Nevada or whatever state you think will be most advantageous to you but you will quickly need more experienced counsel, especially if you are building a business around some form of intellectual property. You will want to find a lawyer that is a good fit for your business overall, and not just on the checkbook. Are you building the business with a transaction as an exit strategy (acquisition, IPO, etc.)? Find an attorney that has M&A experience. Are you a technology company that will have the majority of its value locked up in intellectual property? Find an attorney with direct software (or hardware) experience. Ask around. Interview several lawyers, get quotes on retainers and hourly rates, compare notes with others, and then select the one that best fits your needs. Then be prepared for the bill.
  8. Launch before you are ready – There is no such thing as perfection in this world, regardless of what subject you are evaluating. Humans are not perfect and neither are companies or products. There will always been room to perform so do not worry about having a perfect product at launch. Have a product (or service) that is good enough that customer’s value, put it out in the world, and get ready to listen to the feedback that will invariably be brought to your attention. If you wait for perfection, you will be waiting a very long time. So long, in fact that, assuming your idea is a good one, someone quicker than you will probably beat you to market. Additionally, all start-ups are built on assumptions; Lots of them. Launching early will allow you to test some of those assumptions (especially those about what the customer actually values) and make changes before additional investment is made.
  9. Iterate Quickly – When you launch before you are ready, you will have an immature, incomplete product (or service) on the market. You need to make sure you have appropriate feedback loops built so that you can iterate quickly with fixes and enhancements. You also need to have filters in place to ensure that the feedback you are listening to is appropriate for your situation. Just because your first (or biggest) customer asks for something new does not mean you should go out a build it. You need to have a vision for what you are selling, a vision that is shaped by what you are hearing, but also a vision that does not get pushed here, there any everywhere by the whims of the customer.
  10. Listen to your customers, especially when you do not like what they’re saying – The whims of the customer, may be vitally important. Read through the product reviews on Amazon sometime. What you will find are wide ranges of experiences with the same products. Some people absolutely love the newest widget for sale while others completely pan the same SKU. Who do you listen to? Neither extreme. Instead, listen to the feedback (especially the negative feedback) that is consistent across multiple customers. Find the trends. Address the needs of the masses while still staying true to your vision for your product. One start-up I worked with had commercialized some software from a large, academic medical center. The software worked great for them. But the consensus of early prospects and customers was that what worked for academia might not work in other settings. We pivoted just a bit, iterated quickly, and came out with an even stronger product.
  11. Good ideas do not always generate revenue – I love history. Especially European history. Especially European history from the Greek city-states through the Roman Empire. Based on this love, I have always had an interest in international business and expansion. During my tenure at one start-up I fell in love with the idea of taking our healthcare software to Europe and my CEO shared the same passion. It was a good idea but terrible timing. We spent an inordinate amount of time putting together a business plan when we had yet to sign our first contract domestically. The good idea took our eye off the tasks at hand and never led to a single Euro of revenue. I have what I think are some pretty good ideas every day. I keep a notebook for them. I will come back to some of them one day but many of them will simply be good ideas that should never be acted upon.
  12. Be wary of family money – Early-stage companies often raise angel money from individual investors and these individual investors are often family and friends. Dave Ramsey has a philosophy that states that family members should never loan money to one another. Rather, simply make the money a gift without strings so that when the money is not able to be repaid at a later date, no one gets upset because their expectations were not met. Even if family and friends want to invest in your start-up, you should set the expectation that they may very well never see a dimes worth of return and may lose all of their original investment. This way everyone will be pleasantly surprised when you do generate a good return for Grandpa Smith.
  13. Be careful with your board – The Board of Directors is not a vanity exercise. Some people want to be on a board because they like the way it looks on their resume. Some founders add “Chairman” to their title because they believe it means that they have “made it”. Either attitude or approach is dangerous to your company. Founders should attempt to fill their board with individuals, investors, and advisors that add value to the company. Seats should be ruthlessly guarded and if a member is not discharging their duties appropriately they should be replaced according to the by-laws governing the board. Large investors are sometimes given a board seat in recognition of their financial commitment to the company. Be careful with early-stage angel investors, however. They need to fully understand the role of the board and what will be asked of them if they are added to it.
  14. Do not drink the Kool-Aid® – Entrepreneurs MUST have passion for what they are building. If they are not, they will not be willing to make the sacrifices necessary to make their vision in to reality. Employees need to be careful of this passion, however. Employees should believe first in the product, not the CEO. Miss-guided passion can blind founders and employees alike to the realities of their business. Passion can make people myopic; Make them believe their own press and everything that is coming out of their own mouths even though the fundamental reality of the business does not support this blind faith. A charismatic, rock star-like CEO can be an asset to a company, but they must be pragmatic and willing to listen to counsel that may run contrary to their vision to be successful over the long-term.

This is my personal list. If someone has ever been a part of a start-up, regardless of the level of success that organization eventually enjoyed, they will have a different list. Have you learned other lessons? Leave a comment below or contact me and I will add it to my list (with full credit give to you, of course).

What NOT to Say

by

I became a manager at a fairly young age. I had been working for EJ Footwear (now owned by Rocky) for a little more than a year when I was called in to the office of the CEO and told that: (a) My boss had been let go that morning after 20+ years with the company, (b) I was being promoted to take over his job and his direct reports, (c) I needed to immediately begin the search for my replacement, and (d) I should move in to his office at my earliest convenience. I had turned 23 about a month earlier.

After I overcame the initial shock of the situation I met with my new boss and starting thinking about what I was going to do next. It was a few short months later when I was having my first quarterly operating review with the CEO and CFO when I learned a very valuable lesson.

EJ ran a small retail store in Franklin that sold factory seconds and closeouts at steep discounts that was run by a team of two long-term employees. The goal of the store was never to make much money but neither was it acceptable for it to lose large amounts of money. The CEO asked me how quickly I though operations could be shut down if we were given the go-ahead. I thought about it for a couple of seconds and then told him that I thought we could shut the store down in about 90 days. Without hesitating he told me, “Do it.”

My boss—the VP of Marketing for the company—was also in the room and if she could have, she would have kicked me under the table to keep me from committing to something like that. I thought I knew what to say but what I really needed to understand was what NOT to say.

I did not have the experience to understand that my comment was heard as a commitment. Nor did I fully understand that within a few weeks I would have to let to middle-aged men know that their jobs were being eliminated and that they would only be employed by the company for about 60 more days. Two 50+ year-old men cried in my office that Friday morning. I will never forget that experience and I hope that letting employees go is never a comfortable activity.

All of us need to learn the value of silence, but this is especially true for leaders. As leaders, we should never:

  1. Talk before we understand the consequences of what we are about to say. It is appealing to be the person with the quickest answer but until you understand what it will mean if what you are about to suggest or agree to is implemented, it is better to keep thoughts to yourself. At least until you have had an opportunity to think through any down-stream consequences.
  2. Talk to the point where we dominate a meeting. Some leaders simply like to hear themselves talk. Good leaders, however, understand that it is more valuable to observe first, let others lead the meetings, and only calls the play after all of the options have been vetted.
  3. Express our opinions first when a problem or issue is raised. Leaders understand that, even when someone comes to them asking for a solution to a problem, it is better to ask questions first rather than simply offering up an answer. Why is that? Because no one knows everything and if the leader speaks first the other person in the meeting with an even better idea may be hesitant to contradict the leader and simply supports the less-than-ideal solution.

As a leader that understands why it is important to know when not to speak, we should:

  1. Talk less and listen more. The best leaders that I have worked for are those that understand that they do not have all of the answers but build a team of really smart, dedicated individuals that can collaboratively solve problems. They then listen to their team of subject matter experts and have a keen sense of how—and when—to interject their opinion and when to let the team function on their own.
  2. Ask more questions than giving answers. The leader that acts as a sounding board, motivator, and obstacle mover for their team is more productive and will attract and retain the best talent than the leader that wants to be the one with all of the ideas. People want to be trusted to do their jobs and need to have a safety net and escalation point when they need higher-level assistance.
  3. Mentor others to help them understand the value of not speaking. A leader that is not mentoring their team and identifying and cultivating potential successors is doing both the organization and themselves a great disservice. After my experience with the CEO, my boss spent time with me helping me understand what happened and how to handle similar situations in the future. It continues to be a very valuable lesson that she taught me.

Mandy has always said that I have a problem with silence, which is true. Regardless of if I am the teacher or the student, I do not like to have a question asked that goes unanswered. I have learned, however, that there are times when I simply cannot break the silence, that I need to let someone else fill the silence, that I need to know what not to say and that I need to lead without talking.

Making the Leap

by

Wednesday, January 2nd 2002. I can remember it like it was yesterday. I had gone home to eat lunch with Mandy and arrived back in my cubicle at EJ Footwear to find a yellow Post-It Note on my monitor letting me know that the CEO wanted to see me. Now, I knew who Jerry Cohn was and we had said hello in the hallway a few times but I had never had a significant conversation with him and I had certainly never been invited in to his office.

What was going on here?

I knew that the e-commerce department had not been living up to its forecasts and that we were starting to feel some pressure to perform better so, naturally, my heart skipped a few beats as I started walking down to his corner office. I was totally unprepared for the conversation I was about to have.

Within about 90 seconds I was told that my boss (who had been with the company 25+ years) had just been let go, I was offered his job, I was told to move in to his office, and I was instructed to begin searching for my own replacement just as quickly as I could. Almost as a throw-away comment, I was also told that I know had two direct reports—employees nearly twice my age—and that they would be told of the new reporting structure within the hour.

That was it. That was all of the instruction I was given. Welcome to the Wonderful World of Management. Surely my undergraduate degree in management would see me through, right? Right?

Most people, as they move up a career ladder, do not have quite a dramatic introduction in to management that I had. Often it is a calculated march up and across an organization. Other times a star performer is tapped by upper management to take on expanded responsibilities including, often times, starting to manage ones former peers. This pattern repeats itself over and over again with usually, and unfortunately, little to no thought if the new manager has been trained to be a manager.

A recent article from IBM pointed out several challenges that come with moving from an individual contributor to a manager as well as three steps new managers should take to be successful:

[table id=1 /]

While I like and agree with these thoughts, I think that they fall short of helping a new manager—especially those promoted from within—understand how their role has fundamentally changed.

You are no longer one of the guys / girls. Your work relationships will change whether you want them to or not. Especially if you are now managing a team of which you were once a staff member. Your former teammates will not speak as openly to you; some may even become a bit hostile towards you and your new role. You will also have to curtail the amount and change the timing of information and news that you share with your former co-workers.

Social interactions with your former teammates will change / disappear altogether. Think about what you talk about frequently when you go out socially with your co-workers? My money is on your work and bosses. There is nothing wrong with this, it is normal and healthy but now that YOU are a boss, you probably will not be invited to these kinds of outings any longer or, if you are, expect some awkward silences and moments.

You have to be willing to hold your new team accountable. Having difficult conversations is…difficult…at best. Having those same conversations with friends who now report to you is even more challenging. Managers should not play favorites (although this can be really hard at times) and you need to hold all of your team accountable for their work. No exceptions. Expect some to try to take advantage of you, however, and prepare in advance for how you will deal with those situations.

Expected to resented, if not vilified, some of the time. This is especially true if you won the promotion over another team member. Some may grumble that you did not deserve the opportunity. Others will grouse about you not being ready. Yet others will simply complain because they like to complain. Regardless of the reason, you need to develop thick skin because, now that you are in a leadership position, you just had a large bull’s-eye painted on your back.

Whatever you do, take on that management opportunity with your eyes wide open. Leading others can be an extremely satisfying challenge and one that will change you forever.

Managing Stress

by

When I teach my Principles of Management class at Lipscomb University I spend at least part of a lecture talking about stress. My students are often surprised when I state that part of a manager’s job is to proactively manage the amount of stress their employees are feeling so that it is being felt at an optimal level. Optimal, they ask? They often think it is the job of the manager to minimize the stress level of their employees.

As yet another article points out, however, stress can propel you into “the zone” and leading individuals to perform at their peak performance. Stress does need to be appropriately managed and can be damaging if not (I twice ended up in an emergency room in college with hives as a result of not managing my stress level). Although I am still not perfect in managing my stress level, I do a pretty good job overall. How do you manage your stress?

Accomplishment Through Others

by

If the essence of management is accomplishing objectives through others then this should be the Golden Rule of managers everywhere: What can I do to help you be more effective? I personally have always put this thought in a slightly different way: What obstacles can I remove to help you accomplish what you need to do to be successful?

Whichever sentence you prefer, the sentiment is still the same. Managers (and leaders) only succeed when they are able to accomplish work through others, which means that they need to be primarily focused on making their employees more effective. In order to do this, managers need to proactively look for ways to remove obstacles but they also need to create an environment of trust so that their staff feels comfortable asking for help.

Asking for help is difficult for most of us (me included). Especially in America, where we pride ourselves on pulling on boot straps, it’s difficult to raise your hand and admit that you cannot handle something on your own. It’s through this very action, however, that teams become stronger and truly more than the sum of their respective parts.

Managers and leaders (the good ones, anyway) know that the higher within an organization they rise, the less actual work they do personally. They recognize that they are only as good as the teams that support them and, because of that, should spend a large portion of their time making the jobs of their employees easier.

What is the one thing you can do today to help your team be more efficient through the removal of an obstacle?