10 Ways to Step Up Your Leadership Today

BY: Dave Balter

No matter who you are, or the type of company you oversee, there are some universal ways you can be better at it.

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Strong leadership is a lifelong pursuit that requires continuous evaluation and improvement.  Every leader has his own style, and every company needs a personalized approach.  

That said, there are 10 things any entrepreneur in any organization can do to deliver results:

1. Don't try to get stuff done. 

That's not your job.  As CEO, your job is to get others to execute for you.  A leader is the only one who can drive the big strategy, so being caught in the weeds will only undermine the ability for everyone else to win.

2. Forget about democracy. 

You want to be a supportive, open-minded autocrat.  If you make soft suggestions and ask for input, you create a lack of confidence among your subordinates.  Be assertive; lead by unwavering decisiveness.

3. Never say 'start small.' 

Seek out the big ideas and drive your team to achieve them.  If you start small, you succeed small.

4. Make time your enemy. 

The best CEOs move faster, get to scale sooner, and make things happen now.  Impatience is a critical tool to motivate results.

5. Tell exciting stories.

Having a vision and strong direction is only as good as how well you convince others to believe in what you're saying.  Not much is as important as being able to relay--in person, or on paper--through stories that inspire others.

6. Deliver finished materials. 

Any document that feels raw and rushed was not thought through carefully, and won't be taken seriously. Pay close attention to typos, punctuation, page breaks, headers, and footers. Perfect formatting and proofreading are essential elements to sell your ideas.

7. Prepare extensively for every meeting. 

The more structure you can create as CEO, the more your team will know how to deliver results.  You want to write crafted agendas, and make employees accountable.  Provide clear roles and clarify expectations in advance, and oversee meetings by deliberately pacing each section.

8. Remove staffers who don't crush it. Immediately.

The only route to success is getting great people to achieve greatness.  The clichés are true: few get better at hiring; many get better at firing.  Being one man down is better than having an underperformer.

9. Don't turn "off"--ever. 

If you're going to inspire a team, you must avoid blackout periods, and communicate more often and more clearly than anyone else.  Silence results in complacency, so always respond.  Weekends and nights are just as important.

10. Behave like your company is publicly-traded. 

What would you do if you knew that every decision you made would be visible to shareholders, affect share price, and put your job on the line?  Operate from this perspective and your biggest ideas will rise to the forefront.

Dave Balter is the founder and chief executive officer of the social marketing company BzzAgent. He is also a founder and executive chair of skill-testing platform Smarterer, and an investor or advisor to a dozen startups. @DaveBalter

SOURCE: www.inc.com

How to Really Praise Employees

    Margaret Heffernan

Don't just say, 'Nice work!' Psychologist Carole Dweck emphasizes the need to compliment the specific effort employees put in.

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All employees want feedback and good bosses know that giving it appropriately is one of the single most effective ways to improve performance.
But as I consult to different businesses, I'm often struck by how very bland and routine much of the feedback is. I'm talking about: "Good job!" "Nice work!" "You're the greatest!"
These comments are positive, but they aren't feedback. Why? Because they don't tell employees what they did right--only that they did do something that met with approval. It gives them no clue as to what particular talent or habit you're trying to reinforce.
The work of psychologist Carol Dweck is germane here. What she's found is that, when children are praised in abstract--"You're so smart" or "You're so creative"--rather than concretely about how they improved their performance--"You put in an enormous amount of work, and it paid off"--the feedback is diminished. How come? Because the child takes from the teacher or parent the idea that she is innately smart or creative, and that she doesn't need to work at it--so she doesn't.
On the other hand, very specific feedback--especially about something an individual can control--can work wonders. "You are so reliable," "I love the fact that you are always on time," or "Your research is so meticulous" tells the recipient exactly what proved so valuable. And it inspires more of the same. Nobody praised for punctuality decides they don't need to be on time any more; if anything, it makes them more determined than ever not to let you down.
I can't help but be struck by the volumes of mindless praise I hear regularly in the workplace. I know it's well intended but it isn't effective.
Put a little extra throught in. Identify the action that delivered the result--and you make everyone better.

Margaret Heffernan is an entrepreneur and author. She has been chief executive of InfoMation Corporation, ZineZone Corporation, and iCAST Corporation. In 2011, she published her third book, Willful Blindness. @M_Heffernan

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Now That I'm the Boss, Do I Have To Turn Evil?

BY: Suzanne Lucas

5 tips from an HR expert on how to keep from turning into the boss you hated.

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Dear Evil HR Lady,

As an employee, I noticed that bosses tend to be highly irritable, unforgiving, and quite volatile at times. I’ve had my fair share of being blown up at for missing a deadline by 5 minutes. But now that I'm running my own company and have my own employees, I understand how someone missing a deadline can start to affect the productivity, effectiveness, and even reputation of the entire company.

However, I have yet to berate someone in public or blast them in an email for making me look bad. Is that what I have to look forward to: turning into an evil, hate-mail sending grouch? How can I avoid this and still get the work done on time?

--Not a Grouch

Dear Not--

I hope you don't turn into an evil, hate-mail sending grouch. That's my job and, quite frankly, I don't cherish competition. There are simple (note, I did not say easy) ways to avoid the urge to send these types of emails. Here are 5 tips.

Help everyone see the big picture. Sometimes tasks may seem silly, or not worthwhile. Sometimes fascinating tasks are less urgent than boring tasks, and the boring gets shunted to the side, causing the boss to freak out. If your employees know what is going on and how things fit together, it's easier for them to see the reason to focus on the urgent first.

Remember, it doesn't have to be done the way you would do it. One of the totally awesome things about running your own company is that you can finally do it your way. And yes, you've earned that right and yes, you're the boss. But sometimes your way isn't the only way. If you feel tempted to scream because something wasn't done the “right” way, pause and ask yourself if it was done a “good” way. Sometimes, a different way turns out to be a great way. Remember, you hired people because you couldn't do it all yourself. So, let them use their skills.

Encourage open communication. If you get upset when someone tells you they are behind schedule and needs an extension, chances are they won't tell you next time. And not knowing in advance is far worse than knowing and being able to prepare. If you appear frustrated or angry anytime someone asks, “Why are we doing it this way?” they'll feel like their knowledge isn't valued. And people who aren't valued don't perform as well.

Hold regular one-on-one meetings with your direct reports. And by regular, I mean weekly, if at all possible. This is not doing work together (that will probably happen far more often). This is sitting down and saying, “How are your projects? What do you suggest we change? What challenges do you foresee?” This develops relationships of trust between you and your staff. If they trust you and like you, they are more likely to want to do what it takes to help your business succeed. These meetings do not have to be long, but they have to be frequent or they lose their effectiveness.

Remember, lives exist outside of the office. This company is your baby, and like all parents you're willing to stay up into the night, and suffer through the pain of potty training. Your employees see this as a job. And while they may be passionate about the work they are doing, they aren't devoted the way you are. If you expect the same level of love and devotion from them that you, yourself, have, you'll likely find yourself frustrated and angry when they have the audacity to have a life outside of work.

Congratulations on your new business and on recognizing that screaming fits and emails written in all caps tend to dishearten rather than encourage employees.

--Evil HR Lady

Suzanne Lucas spent 10 years in Corporate Human Resources where she hired, fired, managed the numbers and double-checked with the lawyers. Follow her at Twitter, connect with her at LinkedIn, read her blog at www.EvilHRLady.org or send her an email at EvilHRLady@gmail.com @RealEvilHRLady

SOURCE: www.inc.om

Selling Your Business: Timing Is Everything

BY: Karl Stark and Bill Stewart

Knowing the right time to sell is key to getting the best return for your business. Here are five things to consider about your exit strategy.

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One of the most critical decisions an entrepreneur makes is determining the best time to bring in outside investors or sell the business entirely. Similar to investing in stocks or playing a game of poker, you need to have a strategy in place to know when to cash in your chips and maximize payout. Getting the timing right is key to getting the highest return for the business you've worked so hard to build.
Here are five points to keep in mind as you evaluate your options.

1. Know Which Factors Impact Valuation

A business is an attractive acquisition target when it is growing and has a track record of success. Regardless of what has been invested in the business, its valuation is always changing based on market conditions and its competitive positioning. Ultimately, a company's value is driven primarily by its relevance in the marketplace, operational strength, and ability to generate cash flow going forward. Specifically, factors that impact valuation include:

• Profitability
• Cash flow
• Client / customer relationship quality
• Growth opportunities
• Potential synergies with strategic buyers
• Competitive market positioning / sustainable competitive advantages
• Balance of the management team and reliance on the owner
• Macroeconomic factors, including availability of affordable debt

2. Set Defined Goals

Experts view business growth as a stepwise function in which each incremental capital investment allows for growth potential with a maximum limit. Weigh whether you have optimized the business performance given the resources (time and people) in place. Set specific targets that you'd like to hit (revenue, financing, enterprise value, etc.) so that as the business grows, you have concrete objectives to serve as an indicator that it may be time for an exit or potential next round of investment.

3. Know the Current Valuation

Communicate regularly with a trusted professional for perspective of the market transaction multiples, potential sale price, best practices for preparing financial statements for potential buyers, and the general market landscape of potential buyers.  Advisers can connect you with their network of potential buyers and help you gauge the appetite of public markets for your business.

4. Evaluate the Opportunity Cost

Many entrepreneurs feel inclined to retain their business given the potential for independently driving growth, the annual cash flow streams, and the sense of purpose from their greatest endeavor. However, if you're planning to sell at some point and current exit conditions are favorable, it may be wise to forego this perceived security. Connect with your wealth adviser to project the expected returns if proceeds from the sale were invested across different asset classes. Evaluate the opportunity cost of keeping your wealth tied into the business, as the returns can be greater--or the risk of holding your investments in a concentrated portfolio is diminished--if the capital is invested in alternative ways.  Investments in fixed income and equity markets will likely free your time and enhance liquidity options in the face of market changes, mitigating idiosyncratic risk.

5. Find Capable Buyers

Many buyers require that the seller stay vested in the business post-transaction in the form of minority stake, options, or some form of advisory service to ensure an effective transition. Accordingly, seek a buyer equipped with the skills and resources to execute on their business plan so the value of any remaining stake is preserved.

Selling a business is both an art and a science, and this is particularly true in terms of valuation. There are many reasons a founder may want to retain ownership, including the optimism that a better bidder could be around the corner. Given that business valuations may fluctuate, it's important to stay informed of current valuations to exit successfully.  Sometimes the greatest risk of all is not letting go at the right time.
Please send us your thoughts at karlandbill@avondalestrategicpartners.com
Associate Alicia Raisinghani contributed to this article.

Karl Stark and Bill Stewart are managing directors and co-founders of Avondale, a strategic advisory firm focused on growing companies. Avondale, based in Chicago, is a high-growth company itself and is a two-time Inc. 500 honoree. @karlstark

SOURCE: www.inc.com

Difference Between Brute Force & Strategic Growth

       Karl Stark an

As your company grows it may be necessary to move away from your brute force approach to a more calculated plan.

Flickr photo courtesy of Hector Alejandro

 

Entrepreneurs are often described as "idea people" who are constantly building new things. But that's not how we view ourselves, even though we're considered entrepreneurs. We tend to think of ourselves as business builders rather than visionaries. Building a business takes structure and execution, not new innovative ideas. In fact, we believe innovation comes from a disciplined approach to customer insights, not idea generation.
In a recent column, we discussed how leadership styles must adapt to sustain growth as a company gets larger. The transition involves moving from brute-force leadership to visionary and operational leadership.

The Brute-Force Entrepreneur 

Every small company needs a motivated and charismatic entrepreneur, or two, who can take personal responsibility for building the company. This individual grabs the organization by the neck and forces it to grow. They have a "win or die" mindset. They tend to bet the firm against the odds and push it as hard as they can to overcome those odds.
Brute-force entrepreneurs are different than a typical small business owner, who wants to build a business to sustain a career or create financial stability for his or her family. Growth is necessary, but the small business owner would never bet the farm on a growth strategy. They may seek to build an organization that can grow enough for them to step away and sustain cash flow into retirement. They likely do not have the ambition or skills to create an ever-larger organization.

The Growth Company CEO

The leadership styles that are essential to both the brute-force entrepreneur and the small business owner are much different--and in some cases detrimental--to the skills needed to sustain growth in a larger organization. Big companies require a visionary who can get a trusted management team on the same page, working toward a common goal. They need a coach, rather than a star quarterback.
The larger growing company also needs an operationally skilled CEO who takes the role we like to call The Integrator. Gino Wickman talked about the Integrator in his book, Traction. It's someone, either the CEO or COO, who integrates the various parts of the organization to ensure that the sum of the parts can deliver on the company's growth goals. In contrast to the brute-force entrepreneur, the operational CEO engineers an organization to create growth.
We asked Ross Shelleman, CEO of Target Data, about this concept. "I think people confuse the word entrepreneur with inventor," he said. "I don't fit in at an incubator like 1871 in Chicago. We run our company like a smaller version of a large company."
Our friend Jon Morris, CEO of Rise Interactive, put it this way, "I want to make sure everyone in my company is focused on a set of goals that ensure that they do their part to sustain the growth of the company."
Mindsets like these will lead to continued growth after the entrepreneurial stage and into the long term.
Share your thoughts on leadership roles for growing companies. We want to hear your questions and success stories. We can be reached at karlandbill@avondalestrategicpartners.com.

Karl Stark and Bill Stewart are managing directors and co-founders of Avondale, a strategic advisory firm focused on growing companies. Avondale, based in Chicago, is a high-growth company itself and is a two-time Inc. 500 honoree. @karlstark

d Bill Stewart

SOURCE. www.inc.com

Growing Like Gangbusters? Then It's Time for Change

BY: Karl Stark and Bill Stewart

Tomorrow's growth won't resemble today's, especially if you're growing at a rapid pace.

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All of us who manage rapidly growing businesses are faced with the continuous problem of sustaining that growth. The problem is that, even for companies that are engineered for growth, growth going forward looks nothing like the growth we've already experienced.

Let's take the Inc. 500 companies as an example. Over the past few years, the cutoff for the 500 fastest-growing companies in the U.S. was around a 10x growth rate over a three-year period. Most companies started their three-year run as small, nimble teams, with revenues in the six figures. They were able to shift as customer opportunities surfaced and they put maximum effort into every growth opportunity that came their way.

Once a company grows at a 10x rate, however, it's in a completely different boat, and often the boat is in an entirely different ocean. The current revenues of the Inc. 500 companies range from a few million to more than $100 million. These companies have dozens or even hundreds of employees and may be building businesses in multiple markets.

We've seen a number of companies successfully sustain growth past the initial 10x push into the Inc. 500 list. In each of these cases, they were able to make three key adjustments to propel their growth into the next horizon.

1. Customer Focus: Wide to narrow

As a small entrepreneurial company, you need to adapt quickly to your customer needs across a wide spectrum. But as companies get bigger, sustaining growth often means narrowing your focus. This allows you to scale the business around a key strength that fuels your growth.

2. Organization: Unstructured to structured

A small entrepreneurial company needs to break down barriers and move the team toward the highest-value activities. But once a company gets to a certain scale, this lack of structure becomes a hindrance to growth. Larger growth companies need structure to define roles, create clear accountability for results, and ensure that they can scale the business beyond a few customers, locations, or products.

3. Leadership: Brute force to visionary and operational

Every small company needs a motivated and charismatic entrepreneur, or two, who can take personal responsibility for building the company. In contrast, a larger organization needs a visionary who can get the team on the same page--without forcing them to do so.  They need a coach, rather than a star quarterback. In other words, they need a CEO with operational skills who can engineer growth by piecing together goals and targets and holding each individual in the company accountable for their contribution to the overall value growth of the company.

We've seen a number of businesses adapt their organization in these three ways to sustain growth over the long term. We would bet that many of you have made one or more of these shifts in your business--if so, we want to hear from you.

Over the next few weeks we will be sharing more stories about each of these three adjustments. Please send us an email with your success stories, so we can include them in our upcoming columns. Or send us some examples of businesses you've seen exhibit these shifts. We can all benefit from the success stories of growing businesses.

We can be reached at karlandbill@avondalestrategicpartners.com.

Karl Stark and Bill Stewart are managing directors and co-founders of Avondale, a strategic advisory firm focused on growing companies. Avondale, based in Chicago, is a high-growth company itself and is a two-time Inc. 500 honoree. @karlstark

SOURCE: www.inc.com

Keep Your Start-up Ahead of the Competition

 Peter Cohan | Inc.com contributor

Want to stay ahead of the curve? Here are some simple reminders for what it takes to be better than the rest.

 

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You've probably heard by now that Dell has announced it will go private with CEO Michael Dell maintaining a majority interest with minority shareholders including Silver Lake Partners and Microsoft.

To better understand the news (and most importantly, what you can learn), you have to understand a bit about the company's history. 

In the 1990s, businesses were buying PCs. Dell was competing with companies such as Compaq that sold PCs through retailers. But Dell sold directly to companies using its website. This meant that Dell did not have to include the cost of the retail channel in its prices, according to the Harvard Business School case, Matching Dell, that I used to teach. This was just one of the many advantages the company during this time, which inabled Dell to charge higher prices and make PCs at a lower than industry-average cost.

But the collapse of the dot-com bubble meant that companies stopped buying so many PCs. In the 2000s, the biggest PC consumers were individuals who wanted to see machines operating in retail stores before buying them.

While Dell is taking measures to move the company forward, it's a good reminder that start-ups need to keep a competitive edge. Here's how:

1. Maintain a healthy paranoia. If you want to keep your company growing, you must maintain a healthy paranoia. This means that you should maintain fear that forces outside your control could sink your company. It should not be that hard for you to stay scared--because all your employees, investors, and customers are depending on you to keep the company growing.

Sorry to say, maintaining that healthy paranoia must be something you must live with and show to your people every day. If you stay scared, you must share that fear with your staff and make sure that they are always on the lookout for ways to change the company so it can sustain its growth.

2. View your company from the customer’s perspective. One way to do that is to look at your company from the customer’s perspective. This means that you should pretend you are a customer and shop from your company and your competitors. Knowing what customers want when they buy your industry’s product, you should take careful note of whether your company is not winning the battle for value creation.

And if you are falling behind, change your company so it gets back in the lead. That means stripping out annoying processes that make the customer want to fire you. And if your product does not have the features that customers want or your price is too high--find a way to fix those problems.

3. Imagine that the board fired you and brought in a new CEO. If you have a strong board, it should be asking whether you are still the right person to run the company.

In 1984, Intel’s CEO, Andy Grove, was losing ground to Japanese memory chip makers. He thought about what a new CEO would do if the board fired him and put in someone new. The answer was to get out of the memory business and start making central processing units.

Rather than quit, Grove changed strategy - thus Intel got the benefit of new thinking without losing Grove’s managerial talent. And Intel went from nearly perishing to decades of CPU industry leadership.

4. Change everything to stay ahead of the pack. If the customer changes, your company must reinvent itself to keep up with the changing customer’s needs. You must be able to track how customers are changing and what competitors are offering those customers.

If you can give customers a new offering that puts your company ahead of the value curve, you will be able to sustain your leadership.

Strategy consultant, start-up investor, teacher, corporate speaker, pundit, and author Peter Cohan has invested in six start-ups, three of which were sold for a total of $2 billion. Before founding Peter S. Cohan & Associates in 1994, he worked with HBS strategy guru Michael Porter.

SOURCE: www.inc.com