Beautiful Oops..Creating Better Outcomes

My 6 year old daughter was drawing last night and she kept messing up the picture from what she thought the outcome should be.  She was getting very upset with herself because she couldn’t draw what she wanted. This was a great teaching moment to go over what I love to call “Beautiful Oops”. This is when you take the drawing (a euphemism for life) and turn what you have into something else completely wonderful. You end up in a place that you would have never dreamed of had the envisioned project  gone according to plan.This is just what my daughter did, she took what was suppose to be a dog and turned it into a beautiful scene of our family. It is when the outcome of Plan B or C or D is better than Plan A. This has happened several times for me whether it is losing a valuable team member and finding out that her leaving allowed a new organization structure that is better for growth, a miscommunication about a feature to be developed within a software application that lead to the creation of a new product,  or losing the budget for a new application when we were about to sign the contract only to be able to sign it six months later at a significantly reduced price. It is when Plan B or C or D is better than Plan A.  A beautiful oops is finding the value of going down a unexpected path and discovering the possibilities rather than mourning what did not happen.

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Loving wine taught me to maximize strengths

I have a love of wine. I have been asked many times how did I learn about wine and know which wines to buy. I believe wine is a truly personal endeavor. It is all about what you like and what you enjoy. And the best part, is to learn about wine, you have to try a lot of wines as no two wines are exactly the same.  Sometimes I open a bottle and the wine is wonderful, other times it is fine but not one I will try again and a few times, the wine  gets poured down the sink. But I never lose the joy of opening a bottle and trying something new. The reason each bottle can be different is each wine maker has to take each wine harvest where they had the same fields, the same vines but different environment each year and determine its key attributes and work to highlight its strengths. Then as each harvest gets bottled, it can take on unique characterics. To achieve a vintage that stands out from the competition, a wine maker must capitalize on the strengths of each vintage.

Maximizing strengths of each component of the business

We have a member on our team that was struggling. We knew he was talented but the talent wasn’t being consistently displayed and he was failing in key areas that were critical for his success. We tried to prop him up by providing training in the areas of need, by giving him mentorship and hiring team members around him that displayed these necessary skills. After several conversations, we found that he had lost his way. He was playing in an area that was outside his core skill area and  he wasn’t passionate enough about it to embrace uncomfortableness of it to learn it. He was in a state of constant floundering.  What we learned was that we were playing to his weaknesses and not to his strengths. We had placed him in an area that didn’t allow him to use his core talents and passion to be successful. Just as every wine maker, analyzes his vintage to bring out the best in it, we need to do the same with our team members. We need to recognize and understand the areas that they can truly excel and place them in roles that give them this opportunity.

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5 Thoughts on Building an Advisory Board

I have been asked a few times recently on how an entrepreneur should look at and build an advisory board. Here are 5 thoughts on building an advisory board to gain the most value by having diversity of thought and ideas.  Define what you are looking to see in an advisory board.  What skills are you looking to have surround you? What are areas that you aren’t as strong in and want to have advisors help you learn? What are areas the business needs more depth – roles that you don’t have within your team? What industries is your business playing in that their rolex will be helpful in making connections for you? Understand what you want from an advisor. Do you want them to mentor you or the company? Do you want them to give advice and you make the decisions on what to do with that advice or do you want them to help you run the company? These answer will help define how you interact with them. If you want them to mentor you – than it is typically more of an informal situation where you build relationships and meet with them on a semi-routine basis say 2x a year or when you need their advice. If you are looking to build more of a board of advisors where they collectively provide advice on the business then more formal meetings 1x-4x a year are fairly traditional. The answer also depends on how much you want to spend too. If its informal, your cost is more a lunch or dinner, a phone call. A more formal set up could be travel, hotel, meeting rooms etc. A stipend for them early on is not typically expected but, you also get what you pay for.  Be honest with yourself. Do you want individuals who are going to tell you what you want to hear, or advisors that will provide you constructive and meaningful feedback to help you grow your business. How will you take this information – discount it? state they don’t know your business like you do? or evaluate their feedback, solicit other inputs, see how their feedback can be applied. Care and feeding of the advisory board. It takes time to build these relationships and gain value from them. You will need to put the work into fostering and nurturing the relationships and making them feel like they are a valuable part of your team. If they see you are listening and implementing their advice, they will freely give more. If they see their advice falling on deaf ears, they may refrain from participating. This doesn’t mean you have to take their advice, just that explaining why you didn’t, is just as important. How to approach potential advisory board members.  Once you have identified people that you would like to have, find how you have connections into them and use them. Ask for introductions. If you need to make blind connections, be honest and let them know how their expertise could help you, for example:  “You are building a business, and would love their insights into how to build a sales team”. People love to talk and share about what they know.

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The value in setting stretch goals

One of the largest accelerators in my career was a manager when I first started out telling me that I wasn’t up for an early promotion. I never took his words as demoralizing, I took them as genuine feedback on how to achieve the stretch goals I wanted. I also didn’t take that as a “no”. I simply took it as “try harder”, which is exactly what I did.  I asked him what I need to do to earn that promotion, I did it and I ended up getting that early promotion. In the end, the manager congratulated me for proving him wrong and I thanked him for setting the bar higher and  because it made me better. We’ve all heard the story of the grade the founder of FedEx got on his business plan for FedEx, or how Walt Disney was told he had no artistic talent, or how Kate Winslet was told she would never be a great actress. The assumptions are that their reviewer’s never saw their talent. I prefer to look at it as one of the steps they each had to take to strengthen their talent to achieve greatness. Would they have achieved the level of accomplishment or success if they weren’t told “no” or given a higher bar to reach. If they were told “nice job”, would they have just plodded along and achieved success but not greatness? We should think about this as we conduct performance reviews and give daily feedback to our teams. Are we helping them grow and achieve their success by only saying  “good job”? If we give them a higher bar, provide them specific and direct actions or improvements to make, could they achieve a higher level of success. If we challenge our team to reach their potential by giving them what may be the hard truth, aren’t we helping them be the best they can be?  Are you being their best manager by simplying patting them on their heads? Think about how you can restructure your words to actually motivate and encourage your team to stretch.

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Has your board propelled a digital strategy?

Today, the digital revolution is shaping how you do business. It is difficult to have a conversation about your business that does not include a discussion around technology and a digital strategy.  It is imperative for companies to have a strategic plan that harnesses the power of digital to create innovate and differentiated products that engages and excites your client base. These plans require the company’s board to be technology savvy  advisors in order to assist the CEO on continual product innovation strategies that strengthens revenue and allows the company to remain relevant to its customers.

Digital revolution is a key priority for CEO and boards

Businesses at the forefront of the digital revolution are seeing higher engagement from their customers and they are also receiving higher rates of return from investors based on research conducted by OpenMatters with input from Deloitte & Touche LLP . Traditional businesses, those that make, market and sell physical products and traditional services  are still struggling to find a way to embrace technology and as a result are encountering lower market valuations. Digitally focused enterprises are receiving between 5x and 8x price to earning ratio where traditional businesses are receiving 2x to 3x price to earnings ratios. The disruptive power of digital technologies will produce new business models, product and services. Gartner’s 2014 CEO survey  found that “CEOs rank digital marketing as the No. 1 most important tech-enabled capability for investment over the next five years.” Do you have the right board in place to for a company that needs to be constantly innovating and disrupting?

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How to Create Gender Diversity

There has been a lot of discussion around the lack of gender diversity in companies, while this is truly an issue across all industries, it is particularly evident in technology and even more so in the management ranks of software firms. Diving into the reasons for this dichotomy, you have to go as far back as elementary school because that is when many young girls opt out of science and math related subjects.  31% of girls in elementary school say they are good at math; but by middle school that number drops to 18%.  Yet, based on  a report by the Organization for Economic Cooperation and Development released in 2013,  15-year-old girls around the world, outperform boys in science and math. Girls interest lowers in science and math related subjects for multiple reasons: girls learn these subjects differently than boys and classes are taught to the boy’s learning traits; and a larger reason, which appears later in their professional careers as well, is girls may lack the confidence in subjects that  require testing, and dare I say, mistakes as of the learning process. Girls, as a generalization, have a tendency to prefer possessing the right answer each time and may choose not to take on a challenge unless they know they will do it perfectly.

The gender diversity takes on another twist when you consider women earn less than men across the board in any industry. In 2013, female full-time workers made only 78 cents for every dollar earned by men, a gender wage gap of 22 percent ( http://www.iwpr.org/initiatives/pay-equity-and-discrimination#sthash.G0GzdgId.dpuf). Some of this delta can be explained by the larger proportion of males in leadership positions than females when looking at the average salaries across the genders. The decreasing interest rate in the science and math classes during formative school years combined with family and societal demands during childbearing years when women tend to take on less challenging and complex assignments particularly if they require after-hour time commitments or travel in order to focus more time with their families, the rate of women in the management ranks will naturally be lower than the men’s.  This is evident the S&P 500 the labor force which is made up of  45% women at the entry level, while at the mid management it drops to 37% and further drops to 25% at the  senior management level (see 2013 EEO-1 Survey Data as displayed by Catalyst. org http://www.catalyst.org/knowledge/women-sp-500-companies ) .

In my career as a female technology company executive,  I have found there are three key ways that women can excel in technology management roles.   By developing these skills, women are able to take on new challenges and rise to higher levels within an organization.

Confident: Women have a tendency to not make the ‘ask’ , women assume they will be recognized for their work and opportunities will follow.  A man will straight up ask for the raise, ask for the promotion, ask for the job, ask for the more challenging assignment. This is an area where women need to act more like a man.  Show the confidence in their own skills and be willing to stand up for them.  Women’s desire for perfection also appears here when looking at new assignments or new positions. Internal research at HP showed that women apply for open jobs only if they think they meet 100 percent of the criteria listed, whereas men respond to the posting if they feel they meet 60 percent of the requirements. Women need to be more willing to take chances and use past experiences to demonstrate their ability to take on new roles. And frankly, there is nothing wrong with a little ‘faking it until you make” when you have the confidence to try until you are successful. (see McKinsey Quarterly “ A Business Case for Women” http://dca.org.au/app/webroot/files/file/gender%20documents/Business%20Case%20for%20Women%20Mckinsey%20sept08.pdf) Capable: Women need to continue to build their skills, learn new technologies and take on challenges and complex assignments that may be outside their comfort zone. Women need to be comfortable with the process of trying and learning.  It is difficult to demonstrate the ability to advance to the next level until they have continuously gone  above what is expected of them in order to establish they have the desire, skills and expertise to take on larger roles. Contribute: Women must be present to be considered. Given the larger demands on time that leadership roles present, as well as the timing in women’s career when she is likely to start a family, women drop out of the workforce or decline to take on larger roles within an organization  in order to create a work/life balance that is appropriate for their families.  Balancing a family and a leadership role is time challenging. You have to want it to make it work. It’s about finding a support system to help you create your own sense of balance and achievement as well as a willingness to make choices on the priorities that are important and a willingness to not feel guilty about the areas you choose not to focus upon.  This is most definitely an evolving art that changes as your family grows up and your work role iterates.

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Skating Lessons: Learning to Fall

I recently took my girls ice skating. Both of them have been skating before and have had a few lessons. After making it around the rink one time, my oldest daughter falls. As I reach down to help her up,  she states “ Mom, I know how to get up, that is the first thing they teach you- is to how to fall and how to get up”.   What an enlightened statement!

Everything we are taught from day one is how to be perfect. Get an 100% on a test, get an A in the subject, be the first in your class, be a star performer. We have school systems that teach to the test, rather than teach to the objective. Nowhere does our systems teach and reward learning to try. We are never taught to fail, much less how to get back up again. 

This creates mindsets  that we need to get it right the first time, every time, which creates conservative and cautious  behaviors. This seems counterintuitive to the skills and attributes of the team members we want on our team. We want individuals to take risks, try something new, and move our companies forward. But this isn’t possible if our reward systems only value the right answer every time. 

I failed in my first attempt to be CFO. It was a miserable place to be – knowing that I tried and I didn’t get it right. And then, after a bit, I brushed myself off and went on to apply the lessons I learned to my next CFO role. It was the most valuable lesson of my career. I learned that I could stretch outside my comfort zone, try something new, fail and still be successful. That lesson allowed me to take smart risks freely going forward because I realized that failing wasn’t such a bad thing – it was just a learning experience.

To help everyone get more comfortable with failing consider this sport analagy – probably the one and only one you will ever see in my blogs.  Every sport player gets cheered when they  hit the objective only a certain percentage of the time: hole in one, home runs, ice skating scores etc,.  These achievements  don’t happen every day even for athletes who practice doing them  every day. Why do we expect our team members to do it right  the first time? Everyone needs some practice, some tries and the comfort zone to know they will be rewarded for the try. Then, and only then, will the odds work in their favor and  the company’s favor.

Consider your reward systems, do you have any that give kudos to someone who tried but maybe did not succeed? How about do you create a safety zone, give air cover to your team members who stretch outside their comfortable zone?  What are you doing to create an environment of learning for individuals to take a smart risk?

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Being a Team Player

Throughout elementary, junior and high school I was always involved in some team activity, whether it was girl scouts or sports. I love the camaraderie, the laughter, the support. I love that as a group we could accomplish more as a team then anyone of us could achieve individually.

 One important lesson I learned, after determining out that I wasn’t a very talented athlete and I did not have the passion to become one, is that there was still a role for me to play for the love of the game and team. As a second-string varsity basketball player, my role was to push, challenge and drive the first string to do  better. My role was to prepare them for the next game. And this role, was extremely important, because I was helping them win something for all of us, the team.   Everyone on a team has a role to play, we need to embrace the role, own it and use it to propel the whole team forward.

 

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Modern Parenthood

There has been a lot of discussion recently about the hardship women have in learning how to breaking through the glass ceiling, as well as, negotiating for equal pay. What hasn’t been discussed are some of the benefits we have compared to men. Society has placed an expectation on women being the primarily caregiver at home with only a nod to the men who wants to stay home or contribute to the family as well.  With this societal expectation, women have been given choices that the men are wishing to have.  While women may struggle to be seen as equals, we should applaud that we also have choices men do not when it comes to work/life balance and spending time with our kids.

Enter the Working Dad

It starts at the very beginning. It is acceptable by society to ask a women while she is pregnant – are you going back to work? A women has a choice when children are introduced into the family to take a step back in their careers or to give careers up completely. It is a conversation that is ‘normal’. However, have you ever asked a man “are you staying home from work when the baby comes?” Typically, you don’t even ask, “are you taking time off when the baby comes”. At most, the question is “ how much vacation time are you taking when the baby arrives”.

In the last ten years, I have seen more men want to take a more prominent role in being part of their kids lives, and with this is the same constant push-pull and shall I say it, guilt, that comes with balancing out work and family.  In addition to the challenges men have with trying to balance their work with their kids, they have the additional pressure of being looked at as being in the wrong place when trying to participate in their kids lives. What women hasn’t at least thought at a school meeting, “what is he doing here” or “wow, a dad showing up”? Instead, the room should be filled with fathers and the mothers should expect them to be there.

Merging Family and Work

I have been in many situations where I have had to say “I can’t attend that meeting at that time because I need to go to my child’s X”. But I have very seldom heard a father say the same thing. Not because they aren’t thinking it but because they are afraid to say it. I have known several dads to state after the fact, “I missed my child’s event because of this meeting”.   For women, while we may have to work twice as hard to get places on some days, we have been given the opportunity to create a balance as best as we are able, even if it means leaving work early to take our kids to the doctor and then logging back on after the kids go to bed.

Modern Parenthood

In a 2013 study by Pew Research Center titled “Modern Parenthood” of the 2,511 adults polled, 50% of the men said they struggled with juggling work and family, this is not far behind the 56% of the women who stated the same thing. In addition, 50% of the men said they would choose to stay home if money was no object. A benefit granted to women by society norms in many situations. It is acceptable for a women to say – I am going to take a step back in my career in whatever form that looks like. Women have the ability to choose. A girlfriend of mine decided recently to make a decision to step back from her managerial position because she wanted to have more time with her kids. This is a choice to self-select out a leadership role. It is a choice that other women would applaud however if a man made that same decision he likely would not receive the same response.

Women may have limitations placed on them that we need to overcome, but we are also granted choices that others do not have. We should be thankful for these choices.

 

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The Risk of Falling in Love with a Deal

How can you do everything right when putting together a deal (or any project or product for that matter) and still get to the wrong answer? By falling in love with the deal.  Even when the deal is set up appropriately from the beginning, it meets all the valuation and other qualifications to enter the deal process, there are many other factors or information that can be discovered during the remainder of the deal process that could and likely should require you to walk away from the deal. However, after spending endless nights working on it, engaging large teams of individuals, spending several tens or hundred of thousands of dollars on attorneys, accountants and advisors, convincing the board to do the deal and potentially telling all key stakeholders that the deal will be closed, its hard to see the facts through the emotional tie of wanting to reach the finish line. Somewhere along the way facts can turn into emotions.

Turning a Blind Eye

I encountered this turning a blind eye to the facts by CEO’s several times in my career. The most memorable was when the head of corporate development and I went to the negotiation table to complete a deal to acquire a software company. We agreed with the CEO upfront of the negotiation parameters and at what point the deal stopped making financial sense for us.  During the negotiations it became clear that the other party was intent on changing the initial terms outlined and the deal metrics would no longer be accretive to our company. We walked away from the table. Ultimately, we were scolded by the CEO about how important this deal was to him and we were to go back to the table and accept the terms the acquired company had now outlined.  Ultimately, under this directive, the software company was acquired and never became accretive.  It became a black-eye on the company’s ability to make acquisitions and we were penalized in the public markets by our shareholders.

 There are several ways to ensure that a deal stays true to the initial strategic and financial objectives.

Ensuring that the objectives of the deal are well known and understood by the deal team and key stakeholders. Create alignment on key strategic and financial metrics. Agree to guardrails as to where the deal can go off track and should be scrapped. Understanding the key financial metrics necessary to be achieve for a successful outcome.  These metrics should include not just the acquisition target’s post-integration financials but also the costs of integration including team retention but also opportunity costs. What is the cost of the deal and integration teams to do manage the deal? What other strategic objectives could they be moving forward instead? Continually updating and refining the deal metrics as information is gathered.  As the deal continues to evolve, the integration teams are starting to meet and the acquisition target team members are sharing more data and information, ultimately new facts emerge and assumptions can be modified. Creating an integration plan upfront to ensure timelines and costs that are included in the financial metrics can be met.  Developing the integration plan during the deal process with both side’s teams provides  the opportunity to learn about what can be eliminated and leveraged post-integration and in what timeframe. It provides the chance to validate initial assumptions and project roadmaps. Create an integration team that made up of individuals that will be responsible for the financial, product and customer outcomes.  The integration team should include the operators of the business that will be required to meet objectives post-integration in order to ensure integration plans are consistent with current operating processes and procedures and to obtain buy-in from the operators as they will have to live with the results. Vital information regarding the time and cost of integration will also come to light. Understand the culture, motivation and morale of the acquiring company’s team and how these will impact the deal metrics and integration plans. The acquiring company founders and key team members may have different objectives and motivations once they have sold their shares. Teams may have different personality types, way of interacting and collaborating, and leadership styles all which could led to difficulties integrating the businesses. Plan to have an executive sponsor spend significant time at the acquired company post-acquistion. Providing on-site facilitation of the acquired company’s assimilation into the culture, way of life and processes of the acquiror will help accelerate the integration process. Create a retention plan for key team members, that is included in the deal metrics. There are typically several team members that are required to ensure a successful integration and ongoing support of clients and the products. Review each team member for their importance and how long they are required to stay with the company for the financial objectives of the deal post-integration to be achieved. Develop a retention plan, preferably that is customized by person, to encourage them to stay through important milestone dates. Be willing to walk away. Maintain an open state of mind that the deal may not be consummated for multiple reasons and that failure to do the deal is likely to be deemed a success as the acquirer will not be saddled with financial obligations which will not produce sufficient returns. Create a debate team.   Have a team of independent advisors, either from your internal team or paid consultants, for the deal that are focused on keeping independent and bringing to the forefront issues with the deals that could have the deal go outside the originally agreed upon guardrails.

 

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