7 Steps To Going On The Business Offense

5. Offense

In a recent editorial from Chief Executive (“Going on the Offense in an Uncertain World”), Ram Charan provides seven steps to help companies survive and flourish in this age of technology renaissance. He points out that the most successful companies are not the ones that merely adapt to fast-paced changes, but the ones that create change by immersing themselves in uncertainties. Charan mentions: “As CEO, you have to be able to change course, and more than once, yet without zigzagging so much that consumers and investors become confused about who you are.” The following are his seven key steps in summary:

  1. Hone your perceptual acuity. Spot potentially significant anomalies, contradictions, and oddities in the external landscape, ahead of others.
  2. Be a born-again. Legacy companies who were not digital from their first breath must experience a digital rebirth to provide better information about the consumer and to create new improved experiences.
  3. Learn the power of math. Companies that embrace algorithms possess a huge advantage over those that don’t. These companies are using the algorithms to help shape the industry transformation rather than becoming victims of it.
  4. Remember that the consumer holds the key. Don’t rely only on the most sophisticated data mining software to understand your consumers. Know your consumers and pay attention to the intuitive feel for what they really want.
  5. Get comfortable with uncertainty. Remain on the offense in the outside world. This will help you see the opportunities to build a business based on something new, and put the company onto a new trajectory ahead of others.
  6. Remove the blockages. Be flexible and willing to forgo business practices, products, and even individuals that are hampering your company’s potential for success in the digital world.
  7. Don’t be a wimp. Be willing and able to make the necessary changes that will benefit your company.

Why Some Critics Believe The Executive Compensation System Needs Reform

6. Compensation

In a recent article, Michael Skapinker of the Financial Times addresses the tension between executive compensation and its critics in “Executive pay: The battle to align risks and rewards.” He poses the following question: “Why do critics and shareholders object so strongly to the way top executives are rewarded?” Colin Melvin, chief executive of investment management firm Hermes EOS, believes that the way executives are paid has become overly complex, causing them to struggle to understand what is in their pay packages or how to hit their targets. “The system needs fundamental reform,” says Melvin. The following are some of Skapinker’s key takeaways:

  1. Some critics believe current compensation schemes encourage risk-taking and attract executives disposed to risky behavior.
  2. The average U.S. CEO earned 296 times as much as a typical U.S. worker in 2013.
  3. The SEC may soon act on plans to require companies to disclose the ratio between its CEO’s annual pay and that of its median-paid employee.

Read the full article >

Digital Reshapes Advertising As Marketing Tech Spend Approaches $32 billion

7. Advertising

In “Digital is reshaping the world of advertising,” Shannon Bond of the Financial Times writes about the reasons and ways companies are amping up their digital marketing campaigns. Bond notes that market research group IDC “predicts chief marketing officers will boost the amount they spend on marketing technology to $32.4bn in 2018 from $20.2bn in 2014.” The fact that consumers have greater access to more media on more devices than ever before allows advertisers to tap user data to target their messages precisely to the right people at the right time.

Permanent Capital: The New Holy Grail

January 14, 2015 - Permanent Capital_The New Holy Grail

In “Perpetual Cash Machines,” Henny Sender and Stephen Foley of the Financial Times highlight the new “holy grail” that let’s investors get past the constraints of a typical private equity structure and horizon: the elusive permanent capital structure. Short-term, financial engineering plays are “out.” Longer-term holds and operational improvements are “in.” Because the traditional private equity investing structure doesn’t operate beyond a 3-5 year deal timeframe, investors and managers are turning to permanent capital for a longer-term approach.

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A Good Deputy Helps You Sleep at Night

January 16, 2015 - A good COO or even a gopher helps you sleep at night

In a recent Financial Times article, “Seven lessons in management I learnt over the last decade,” Michael Skapinker delivers succinct lessons in one of the best management pieces we’ve read. Of particular help for our CEO clients and placements, he points out: “A good deputy helps you sleep at night.”  By “deputy” Skapinker is broadly referring to anyone who can leverage you, whether that’s a formal COO title or a bright, hungry young intern who is sophisticated enough to appreciate being a good “gopher” to the CEO.

Too often CEOs worry that a “No 2” needs to be a formal COO title with the compensation requirements that goes with that person (and fear it might upset the senior management apple cart). However, think of this person as anyone age 18 to 80 who is bright, capable and can leverage you.  Ideally, the “No 2” or “deputy” should possess skills different from yours, while at the same time, support you.

No matter the title, as CEO, you need someone who will take your vision and turn it into operational reality.

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Companies: The Whole Point Is To Achieve Collectively What You Cannot Do By Yourself.

January 9, 2015 - Complexities can hinder a companys success

In a recent editorial from The Economist (“Decluttering the Economy”), there is a line that is a brilliant and simple reminder of why we come together under one roof to work: “The point of companies is to get people to achieve collectively what they cannot do individually.”  It tends to be the individual “super star” that gets the press’s attention, but a super star is only a super star if he/she raises the level of play for the entire team.

Have A Vision, Be The Best

January 7, 2015 - Hermes CEO Have a vision, be the best

Here are some “pearls” from a recent Financial Times interview with former Chief Executive of Hermès, Patrick Thomas (“Forget the label – see the person”):

  • First, work for a place where you learn the “longer term view.” It’s difficult to do this when you’re on the quarter-to-quarter grind.
  • Second, “you have to have a vision. If you don’t know where you going, you won’t get there…It’s all very well to copy the others, but you will only ever do as well as the best in your class; if you have your own vision you can be the best.”
  • Third, “Nothing gives better return on investment than investment in your people – not only financially. Yes, train them so they feel competent, but sharing the vision is more important for their happiness. In every company I managed I made sure everyone from the factory workers to the managers understood how they were contributing to the company’s vision and direction. That helps them feel fulfilled.”

Simple advice, yet timeless.

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Trust, More Than Anything Else Impacts Your Success As A Leader.

January 15, 2015 - Trust, more than anything else impacts your success as a leader

In a recent article, Fortune asked the question: “What advice would you give someone going into a leadership position for the first time?” to China Gorman, CEO of Great Place to Work Institute” in “The one quality all leaders must have.” Her advice? “Start by scheduling a couple of hours with each [direct report], just to talk.” These “just to talk” meetings aren’t intended to waste valuable work time or swipe the company card for a free lunch. They’re intended to build trust between the leader and individuals. Gorman points out that “trust, more than anything else impacts your success as a leader. The more trust you cultivate, the better you lead, the more you achieve, and the higher you climb.”