Seven Rules of Strategic Guessing

A few years ago I stood facing a group of well-heeled executives and CEOs at a conference to deliver a talk on strategic planning.

“Which of your companies plan on an annual basis?” I asked.

Only a quarter of my audience raised their hands. I opened my eyes in shock.  

“To those of you who don’t plan on an annual basis, why not?” I pressed.

In one way or another, they answered that they were too busy fighting fires to have time for that. This same group of executives then complained about low growth and no profits. They blamed the economy for their problems. With that, I suddenly understood: clearly, they were nincompoops. These CEOs did not make the connection that planning helps you deal with the economy and the issues that challenge your business.

Before we go further, let’s define what we mean by strategic guessing/planning. Rework, a book written by successful software entrepreneurs Jason Fried and David Heinemeier Hansson, declares that planning has been replaced by guessing. There is something to this. The past two years have presented a very uncertain climate for most businesses. If guessing has become “as good as it gets”, then you absolutely need a process by which to look at the future and make educated and measured calculations about creating a bright organizational future. However, while tactics are a part of this process, strategic guessing/planning focuses executives on the strategy and future moves that the company will take to achieve its health and growth.

The fact is that many small- to mid-sized companies do not have a structured process from which to conduct strategic planning. This is like many adults who do not exercise, despite knowing it’s good for them. Perfect health isn’t guaranteed by regular exercise, but the likelihood of attaining good health is dramatically increased. Strategic breakthrough business guessing/planning works for businesses in much the same way as exercise works for the individual.

Over the next few weeks I will present a streamlined list of my company’s most critical rules for strategic guessing/planning. There are only 120 of them. So, music please! What? Okay! Take it easy! (You get overwhelmed so easily.) We will go over just seven rules of planning. Is that better?

Going To Ecuadorland: Snippets from a Trip

I went to Ecuador not for pleasure but for a client. Gosh that sounds romantic. CMI has a client in Ecuador; sweet. Finally I had outgrown the constraints of North America. Traveling there was like going to a new world. The transition, twelve hours of travel and the hour standing in line to get out of Ecuadorian Customs, solidified that I was no longer in Kansas. Not to mention, everyone spoke Spanish.

Was that really a bullet proof vest on that security guard who took my suitcase out of the car? He also wore a pistol. What was that about? I assumed that the pistol was for protecting me in my hotel room. Oh dear; what had I gotten myself into? 

Dinner was served in a small dining room perched overlooking mountains. As I enjoyed the freshest shrimp ceviche ever and the most exquisite wine, I knew I was in a new world. 

In the morning I took a quiet walk around the hotel. There were a few people on the street. I did see two dogs. Walking around at 10,000 feet elevation is what I imagine walking around the sea bottom in a full-blown diving suit is like. It feels like you have fifty pounds attached to your legs and you cannot move. If you do move, you turn into Mr. Huffy Puffy. I could not catch my breath. 

In Ecuador I instantly related to everyone. Everyone looks you in the eye. It does not matter who they are, Waiter, campesino, the wealthy, everyone has a presence. Everyone is sincerely courteous, in a way that I do not experience here in Illinois.

I instantly related to my clients. We did not have time for pleasantries. There was work to be done. Three years of planning to be accomplished in three days. We worked in the CEO’s apartment overlooking hills covered with farms and trees. Yet we were located in the middle of Quito with a population of two million and really horrible traffic. How did all that manage to co-exist? 

The visiting cook and her company made a catered lunch right there in the owner’s apartment. She prepared empanadas, a staple of Ecuadorian cuisine. Empanadas come in various shapes, sizes and flavors as do the avocados. Ecuadorians can talk about the distinctions and differences of their avocados and empanadas with the same rigor that the Argentinians talk about beef and red wine. Who knew?

I spent Saturday with my new Ecuadorian family. Not my clients, but a different family who adopted me. I got new aunts, uncles, cousins and even parents. I was instant family. Familia is all important in Ecuador. The love of family is palatable. The high point of the evening was eating cuy, Ecuadorian guinea pig, a delicacy which a number of us had never partaken in. It’s delicious. I highly recommend it. It tastes like pork; who knew?

Sunday was corporate team building with 38 Ecuadorian participants. A German woman in her twenties that I just met assisted me. The participants had never played stoopid games before. They loved it and threw themselves into it with a passion. That engagement and enthusiasm was present in the meeting where the participants played full out. We laughed a lot together and I loved that. My Spanish was not perfect or entirely adequate, but the participants made it work. Nothing got in the way of this company laying new tracks; impressive.

The evening before my midnight departure we went to artesian market in Colonial Quito. They call it old town. The shopkeepers tested my Mexican bargaining skills and I walked out with some really great stuff for family, friends and colleagues. Am I full service or what?

The transition out of Ecuador also included waiting in a line. I was in first class and waited an hour. I love how no one is discriminated against standing in line in Ecuador. Long lines include everyone. At midnight I walked back on to the plane. The stewardess recognized me from my previous flight to Ecuador. At that point I knew I was coming back to Kansas.

The first rule of planning

The first rule is “always pick the right team for planning.” This poses the question of who should be part of the planning team. This is an important question. It is important that planning team members are people who are committed to, and can add value to the conversation about the growth of the company.

The only exception is if there is a key employee or manager you want to develop. If you want them to better understand the strategic issues facing the company, then it might make sense for them to be a part of the process.

In addition you can have members of the planning team who are outside of the leadership group. These could be sales people and other key employees. It important that you vet them and ensure that they are of the quality and stature that is required for being a part of the planning group. It is also important that they are all getting their jobs done and are employees of stellar standing within the company.

A number of times over the years I have seen the wrong leaders and key employees involved in planning and their participation actually hurt the effort. Pray give us an example you ask? Ok, well there was Jason who in the middle of the year abruptly left the company.

After an investigation it became apparent that Jason was not returning customer’s calls. In fact, lots of work around Jason’s customers was not getting done. Yet we spent a lot of time in planning on improving customer service. Jason had actually taken on being a Champion in and working on improving customer service. Then we got to see what he was actually doing—talk about a buzz killer. It was enough to make me want to use that aforementioned pointed stick.

How did this happen? What allowed Jason to be on the team that was led to this dark place? Clearly there was a lack of supervision. His manager was not providing oversight. What was really going on you ask? This could be the subject for an article or book and that is for another time.

Then there was an HR manager at a manufacturing plant who took employees into her office and gossiped about managers. A number of times she would run out of the planning session crying. Again a buzz killer. Then she left. Thank GOD and music please!

After her departure, the CEO added Lucinda to the team. She was young, energetic, knowledgeable and clearly had a vision of what the company could be. Her role was completely different than the first HR manager. Lucinda’s addition to the planning team was constructive and positive.

So, the message here is pick wisely and selectively. Members of the planning team must be able to maintain complete confidentiality and be fully engaged in the growth and well being of the company. Select the employees who are passionate about growing the company, developing an extraordinary organization and being the CEO’s partner in accomplishing those things. Don’t have people be part of the planning process only because of their position or accept mediocrity.

For more information about CMI's planning process visit our website: www.cmiteamwork.com

Who Plans on an Annual Basis?

It always shocks me how many businesses do not formally plan. Recently, at a conference, I asked a group of CEOs, “Who plans on an annual basis?” Only a quarter of them raised their hands. I was shocked. In addition, when pressed on why they did not plan they said they were too busy fighting fires to have time for that.

They then complained about low growth, no profits and blamed the economy for their problems. I felt better at that point with their clearly powerful and insightful analysis. Clearly they were Dunderheads. These CEOs did not make the connection that planning helps you deal with the economy and the issues that challenge your business. I am getting my pointed stick dipped in organic monkey dung to deal with these guys. It is organic dung because they are CEOs after all.

It is true. Many small- to mid-sized companies do not plan formally, just as many adults do not exercise. Yet we know exercise is good for you. It helps you live an improved quality of life. Routine exercise allows your body to maintain its health and vitality. Strategic breakthrough business guessing/planning works for businesses in much the same way as exercise does for the individual. It does not guarantee health, but exercise certainly dramatically increases the likelihood of having it.

For more information about CMI and Business Planning visit our Website: http://www.cmiteamwork.com.

The Coach's Handbook VII - Facing the Future

Managing and coaching are different systems of human interaction. Both are necessary for
successful organizational life. In managing, one tends to make decisions based on established
directions, emphasizing knowledge and reason supported by intuition and acting in the present
based on the past.

In coaching, one needs to make decisions based on an envisioned future. A coach emphasizes
intuition supported by reason, belief and commitment in others, and acting toward the future
based on the present.

Coaching as a predominant style is a new development because of the changes and pressures
which are overwhelming business. It will be a prominent management style in the future.

Managers and team leaders who are going to be successful need to invest themselves in this
system and become extraordinarily proficient at it.

Read more of my writing at: http://www.cmibusinessplanning.com/news.html

The Coach's Handbook Part VI - Extraordinary Coaching

Extraordinary coaching is brought about by fusing the uniquely human characteristics mentioned
above. An extraordinary coach will be one who truly measures his/her performance by the
performance of the employees (the players). This approach will yield superior results.

The following are questions to ask yourself to see if you are an extraordinary coach.

1. Would people around you say that your team gets extraordinary results (enables the production of results beyond business as usual)?
2. Is there evidence that you are someone who develops great players? By a “great player,” we mean people who are able to make things happen far beyond what one might expect given history and past predictions of your organization?
3. Do you consistently demonstrate the ability to bring the capabilities and possibilities of coworkers to a more advance or effective state? The coach does this with whomever he or she interfaces with, either directly or indirectly, in the organization. The coach develops people in a 360 degree circle—above, below and laterally within the organization.
4. Do your commitments and sphere of influence go beyond traditional business channels and relationships? The coach does not get entrapped by his or her position in the organization. This person uses influence and coaching to move the ball wherever he or she moves within the organization.
5. Are you a person who presents yourself for coaching? Are you coachable?
6. Do you take on projects that require self-development?

Your answers should give you a sense of whether or not you are coaching. Be tough on yourself
and differentiate between your coaching activities and management activities. All too often, we
find executives claiming to coach, but really managing.

Next week - my final post in this series: Facing the Future

Read more of my writing at: http://www.cmibusinessplanning.com/news.html

Get the latest Gardening Tips……from the bald one

An article called "Using Books For More Than Compost" by Bruce Hodes, CEO of CMI, has been published by Vistage, the largest provider of CEO Groups in the world. Click here to read the article. Let us know what you think.

The Coach's Handbook Part V - Beliefs of a Developmental Coach

Here is a chart that contrasts coaching beliefs with managerial assumptions. This will give you
greater a sense of the difference between a control-oriented management system and a
commitment-oriented coaching system.

Next week - Coaching is an Art, not a Science

The Coach's Handbook Part IV - Rethinking Managerial Practices

Who determines the fate of our organizations and corporations? If one believes in the notion of
rugged individualism and a “can do” spirit (these and other individualistic values are deeply
appreciated in our culture), one would say that CEO’s, presidents, and managers are responsible
for whatever happens. However, as the world in which we live becomes more complex, a new
perspective is needed.

The buy-in of groups of people, not individuals, will be essential to moving ahead in business.
From this vantage point, one can see that the followers determine the fate of leaders. There is
example after example in which the fate and/or success of the enterprise is related to what the
people who are on the field decide to do.

In our culture, we have a tendency to be fixated on the leader/manager as if he or she will be the
sole ingredient in the outcome. The truth is that the success or failure of our businesses is already
in the hands of the people who work there. We just don’t acknowledge it.

The rethinking which we are suggesting is that top managers shift attention off themselves and see
their jobs as one of developing the players. Employees also have to rethink their roles. It is very
easy to see oneself as just a cog in the wheel—just following orders. It is different to consider
yourself as a major determinant of where the business is going to go.

When an employee sees oneself as a crucial player, a partnership with management can be
established in which they view each other as resources playing a common game with a common
goal. With this point of view, partnership, innovation and velocity can occur on the field.

Looking at the sports model, a good coach is one whose players (employees) are clearly more
skilled at playing their positions than the coach (manager) is. The coach is hired by the players and
used by them to enhance their ability to do a good job, because they have invested themselves in
the game and in doing well. A useful coach stands for excellence and attracts people who want to
be excellent.

Translate this to business life and the focus shifts to the employees and their ability be effective in
their jobs throughout the company. The managers are there to empower and enroll employees in
being effective. This is radically different from telling people what to do.

In the coach/player inverted pyramid model, there is an element of “game.” People participate
because they want to play and they enjoy it. When people are at work because they want to be,
and are doing what they want to be doing, coaching becomes useful. Victims and victimizers are
not truly coachable or able to coach powerfully.

Next week: The beliefs of a developmental coach

BOOKS AS COMPOST

As I used to be an organic farmer, I appreciate how compost works. Take it fresh from the horse and let it lie and develop in what is referred to as a compost pile. After a year, put that compost stuff on the seeds and baby plants. Behold how it allows the veggies and fruits to mightily grow and develop. You then get to eat the succulent tomatoes and cucumbers – yum.


Books in organizations get good things to happen. Over the years of coaching and annoying companies, it has become clear to this baldy that books have the power to change. Reading specific and special books in organizations is conducive to creating and causing organizational development. When a management group reads the same book, it is like they now have a common language and have had a common experience.

What does that get you? For one thing, it gets executives of the company on the same page when talking about a topic. There is, after everyone reading the same book, a common vocabulary. Group reading allows for an understanding and the acceptance of new ideas. Even when the Leadership team does not agree on the ideas of the book or how those notions should be implemented, the executive team now has parameters from which to debate and explore the issues.

I have seen business teams put together really terrific customer service programs after reading Raving Fans by Ken Blanchard. Heck, after reading that book I have seen teams for the very first time have the notion that having raving fans customers could be a very good thing. Before the reading, they did not have that distinction or interest in having raving fan customer service.

Case in point: One company, after reading this book, put into practice using a survey that asked their customers are you satisfied with our service – Yes or no and why. Another question was, “Are you our raving fans?” Yes or no and why. This type of survey gave them lots of feedback. It also focused the employees on making their customers raving fans. That step alone for this company was a big step forward and a triumph over the past.

I have seen teams better communicate after reading The Seven Habits of Highly Effective People by Steven covey. After reading Blue Ocean Strategy, some executives actually have a transcendent moment and see God. They then alter how they think about and create their new services and products.

Here is an example of the power of a book. About two years ago, I am working with a company that runs homes and services for the disabled. They are a for-profit company and they are fairly large -$100M. They are an ESOP owned company. For those of you who are not familiar with the term , it means Employee Stock Ownership Plan. It is a way for employees to actually own stock in the company. I am not going to get technical here or engage in a conversation about the benefits or lack thereof ESOPs. Suffice it to say that this company did market itself as employee owned both in its marketing material and in how they answered the phone.

What disturbed the leadership of this company is that none of the employees could relate to or see how being employee owned benefited them. As I explored this with the leadership group, it became abundantly clear that no one in the leadership group could relate to or saw any benefit to the ESOP. Whenever the CFO went into the nuances and benefits of the ESOP, everyone promptly went to sleep or rolled their eyes or rolled their eyes as they went to sleep.

I have coached and conducted strategic planning in some very successful ESOPs. I have seen the value of ESOPs as a tool to motivate and focus employees. With ESOPs, when they are working well, the value is that the employees truly see themselves as owners and work as business people to build the value of the company. These employees relate to customers as owners would and take great interest in ensuring that the customers are raving fans and repeat buyers.

After assessing the situation and mulling things through in my genius, I invited this leadership group to read the book Open Book Management by John Case. Honestly, I did not invite them I made them – well it was assigned and heck they just had to do it. This book is about the various ways that companies have utilized to have everyone in the company embrace being business people and, own the financials of the company.

After reading the book, members of the leadership got excited because they saw a pathway to engaging employees in owning and being more effective in growing their business. These executive saw how they could make the ESOP relevant. They saw the light and were eager to drink the Kool-Aid.

The most revered and known proponent of Open Book Management is a business leader named Jack Stack. He wrote his own book called The Great Game of Business. This book is about how he and his employees turned around their company, Springfield Manufacturing which by the way is also an ESOP. A couple of the leadership groups attended conferences given by Jack Stack and his consulting company. These are called the gathering of the games and feature many successful ESOPs.

Open Book Management in this company has now become a movement and a cause célèbre. The CFO began to do research on what the value of the ESOP would be to the leadership group. A division of the company began to organize games with incentives with their frontline group. They are off and running in exploring how the ESOP can be a powerful organizing focus for the company. All this came from reading a stupid book that costs $20.00 or so. A book. Not bad return for that investment.

Books with large print and preferably pictures are the most appealing to business people. Stories and parables are appreciated. Synopsis at the end of the chapter with cliff notes also appreciated. If the book is good and at the same time scholarly, you can make the case to read it. At times, this can be a tough sell. The ultimate test for the consuming executive is whether or not the material presented is applicable and useful. The more user friendly the material is the better.

Books as compost allow businesses to do without bloodsucking consultants. In and of themselves, I have seen books transform companies and business culture. I have seen many examples of this. The leadership group reads the book, talks about it and applies it. Simple and who needs the bloodsucker any way.

Some of our clients started book clubs. No way, you say and way, I say and this is all before Oprah --- astounding. What I have seen is the CEO picks the book and over lunch convenes a session. Typically, this happens monthly. The group will cover a chapter or two. Some CEOs prepared for the session and others just winged it. They always seem to work. I saw this bring knowledge into the company. It also gave the CEO an avenue to get to know and become related to employees.

Books are also a great way for new employees to get indoctrinated into the company. Over the years, I have seen more than once the new employee has a stack of books that they needed to digest in 30-40 days. This was part of their orientation. In one client they had to take tests on the book and in another they had to sit and talk with the CEO about the book.

I have also witnessed scenarios where certain books were central to a culture and there was no requirement to read them. It is like there is a language being spoken and while you may think you speak and understand it you really are missing some of the major nuances. There have been situations in which new executives did not have to read the book and were subsequently lost. When they did read the book much of the culture then made a lot more sense and their ability to communicate improved.

As an active consultant in business, I have developed a deep appreciation of books as organizational compost. It has surprised me the powerful impact that reading certain books can have on a business culture. As you approach this topic of reading, some business people will howl just like your dog does when you step on their toes. They will claim that they do not have the time to read, let alone make any changes. Do not buy it. Like organic vegetables they are good for you. Just make them read.

So what is the message here? Get your organizations to read and dialogue about the books. Even if they whine, groan, complain, kvetch and drool, have them read and be stimulated. They will be better for it.