The applause was deafening. The congratulations overwhelmed your email box. The press clippings were glowing. Everyone was buzzing, because your recent product launch was successful. Last quarter’s earnings beat even the analysts’ predictions. The company’s stock price was up 15%. Operating costs were down, and sales volumes were number one in the industry.
So how do you follow that act? All of this excitement doesn’t build a platform upon which to rest. Instead it forms a bar, higher than the last one, over which you must hurdle. After all, the stockholders expect more earnings. Customers expect better products. Employees expect more career opportunity. And so it goes. How do you manage all of these expectations for continuous improvement against the best strategy for the company’s growth? How do you compete for market dominance without succumbing to market vulnerabilities?
This is the pivotal point. The choices you make will become either a stepping stone to greater success, or the rock that trips up your company, your team, or your own leadership success. Companies and people don’t automatically enter a “safe” zone when they reach a measure of accomplishment. But in some cases, their behavior suggests that they think their momentum can’t be stopped.
You’ve heard the saying, “the higher you climb, the harder you fall.” While that doesn’t necessarily have to be the case, in the midst of success, it’s important to remain grounded; like holding onto a guardrail.
Jim Collins, author of the best-selling books Good to Great and Built to Last, provides an explanation on how once-mighty companies fall. He highlights five stages in his book How the Mighty Fall: And Why Some Companies Never Give In.
- Hubris born of success. Here an organization or team exhibits extreme pride and arrogance based on past accomplishments.
- Undisciplined pursuit of more. Companies in this stage overreach, become obsessed with growth, and fail to manage the process and pace effectively, ultimately undermining their long-term value.
- Denial of risk and peril. By this stage, companies are so caught up in successes that they become blind to the possibilities of failure.
- Grasping for salvation. This is the moment where the company’s decisions lead to new life or certain death.
- Capitulation to irrelevance or death. At this point organizations are spiraling out of control and either give in to certain death, or shrink into irrelevance.
So how does one avoid this death spiral, whether within your team, your organization or for your own leadership abilities? Here are a few tips from my playbook.
- Build a culture of humility. Keep the focus on the value you provide to your customers; and the “why” of your organization. What’s the impact if you cease to exist? It’s really not all about your company. It’s about the value you provide to others. This is a giving mentality, where long term relationships, integrity and quality products or services are most important; instead of a getting mentality, where there’s constant pressure on the customer to buy.
- Find your truth teller. Unfortunately, some leaders surround themselves with other leaders who will tell them what they want to hear. Or they don’t create a culture where their team feels comfortable fully informing them about business issues. Make sure you surround yourself with people who are encouraged and willing to speak up and say the difficult things or raise questions that may be contrary to the prevailing direction.
- Strike your balance. If you try to be all things to all customers; if you overreach in too many different directions, you lose your balance and end up grasping for a lifeline. A tightrope walker is constantly shifting his weight to keep his center of mass above his feet. This alignment is critical in your organization or team to ensure stability between competing priorities.
- Exhibit learning leadership. Only when the leader of the team demonstrates a continual desire to learn, to admit faults and deficiencies, and to seek input from the entire team and others outside the company, will others in the organization follow suit.
- Master discipline. Establish a system that produces results, and keep repeating it. Measure the right factors. Ensure team members are learning agile and will support the culture. Focus on a consistent vision. Stick to what works.
Note that these recommendations have nothing to do with functional or technical skills. You can hire individuals on your team to fulfill those roles. This has everything to do with pure leadership; influencing others to move forward in the right direction, based on the right decisions. These are important steps in building a “mighty” organization. So, are you a “mighty” leader?
A portfolio is generally understood as a collection of valuables; whether artistic drawings, important papers, or financial investments. It reflects the talents and treasures of the owner, and is generally carefully cultivated and added to over a period of time. But to increase the treasures in your portfolio, you must first focus on increasing your talents.
A recent issue of Forbes Magazine featured The Best Investment Advice of All Time, which profiled insider tips from some of the financial industry’s best known thought leaders. These were financial gurus such as T. Rowe Price, Jr., George Soros, Sir John Templeton, David Tepper, Sam Zell and Warren Buffett who built their professional expertise and personal portfolios based on their intellect and abilities. They had to invest in their talent before building their treasure.
These talents or skillsets include knowledge, wisdom, abilities, experiences and interests. And most of all they include your innate gifts, those characteristics endowed upon you from birth that attract you and compel your learning decisions. Properly applied they develop and produce treasures.
Your Talents Form A Foundation For Your Treasures
Building and investing in a portfolio of talents is equally important as your portfolio of treasures. Here are several great examples.
Several decades ago when Jeff Maggioncalda was newly married, he created a simulation engine to model the results of one million Monopoly games to generate the probabilities and payoffs for its various properties, and used this as a cheat sheet to beat his wife at the game. Later, Jeff used his ability to develop simulations to found Financial Engines, a company which provides financial advice to almost 800,000 employees at 553 large employers. Because Jeff invested in himself first he was able to transform his ideas and skills into a lucrative business, and build his portfolio.
Floyd Mayweather, Jr. is the world’s highest paid athlete with $105 million earned in the boxing ring over the past year. According to Wikipedia, he is currently undefeated as a professional and is a five-division world champion, having won ten world titles and the lineal championship in four different weight classes. His father, a boxer and trainer, started taking him to the gym as soon as he could walk, and fitted him for his first pair of boxing gloves at the age of seven. Floyd developed his skill by investing years of practice in the gym, but it was fueled by an innate love for the sport. This propelled him to his current position atop the list of highest paid athletes, with a portfolio to match.
Sarah Ketterer was born into the investment world. Her father, John Hotchkis, founded several successful asset management companies where she worked during the summers; but she didn’t initially pursue a career there. After several educational and professional shifts, Sarah eventually became interested in understanding and organizing the data used to make investment decisions, and joined her father’s firm to start a new international equity arm. From there, she and a partner developed a new model of money management, and in 2001 started their own international asset management business. Their unique approach which combines quantitative computer program probability predictions with fundamental analysis of stocks has paid off, and in the past 18 months their assets have more than doubled to $33 billion.
Leave a Legacy
The typical result of building a successful portfolio of treasures is to bestow it upon your heirs, or to donate it to a worthy cause. Some have amassed family fortunes in a trust for generations to come. Others have joined Bill Gates’ and Warren Buffett’s Giving Pledge, a commitment by the world’s wealthiest individuals and families to dedicate the majority of their wealth to philanthropy. Whether your portfolio is valued at $10,000 or $10 million or $10 billion, if properly managed its value may outlive you.
Similarly, a successful portfolio of talents can add value to others and provide benefits for those around you and for future generations. Inventors and innovators like Steve Jobs, George Washington Carver, and Thomas Edison have proven this already.
So what’s in your portfolio of talents, and how will that transfer to your portfolio of treasures? What assets do you have in terms of your skillsets, abilities, interests, and experiences? Whether you’re just holding a job, or in the midst of a successful career, it’s important to hone in on those elements upon which your success has been or can be built. Doing so will not only drive the right decisions to maximize your future personal development and professional career choices, but will enable you to provide lasting benefit to others in their growth and development.
Copyright 2014 Priscilla Archangel
Read Forbes Magazine’s June 30, 2014 issue for more information on Maggioncalda, Mayweather and Ketterer. Learn more about Mayweather’s early years here.
Elizabeth Holmes hates needles. To her, the idea of being poked by a needle and withdrawing blood is more than just unpleasant. When she knows that she has to give blood, she becomes consumed and overcome with the thought until it’s finally over.
So it should be no surprise that at age 19 she founded Theranos, a ground-breaking blood diagnostics company that 11 years later is worth more than $9 billion. The company has patented its secret technology of performing 200 different blood tests (soon growing to over 1,000 different tests) without using a syringe. They use a few drops of blood drawn using a finger stick to minimize discomfort, and collected in a “nanotainer”; a container the size of an electric fuse. Her board is stocked with powerful blue chip members including former cabinet secretaries, former U.S. senators and former military brass. Theranos’ innovative technology is poised to transform health care technology at no more than half the cost of similar tests using current technology.
Holmes leveraged a process that irritated her to innovate a new method of getting it done.
Tony Fadell was building a vacation home for his family. One of the seemingly mundane decisions was selecting thermostats, but he wasn’t satisfied with his choices. So he developed the Nest Learning Thermostat, a digital and WiFi enabled device that conserves energy by learning its owners’ habits. He also designed the Nest Protect which uses new technology to detect smoke and carbon monoxide.
Fadell’s real goal is to use technology to redesign and control all technology in the home. He was successful in raising startup capital as a result of his Apple pedigree, and extensive connections in Silicon Valley. He previously led the team that created the iPod, thereby rejuvenating Apple and transforming the music industry (yes, I love iTunes), and assisted in the development of the iPhone. Fadell left Apple in 2008 (along with his wife who was an HR executive there) and his thermostat irritation became the epiphany to innovate his next career move. As evidence of his success, Nest was purchased by Google earlier this year for $3.2 billion.
Holmes and Fadell were irritated by processes and technology that others accepted as status quo. Obviously this wasn’t just a minor irritation either. Most of us would have dismissed it, avoided it, complained a bit while it was on our minds, then moved on to what we believed were more important things. We would think that change wasn’t needed, or that technology couldn’t effectively be applied to it and scaled for use. Instead, they saw it as a challenge and took the opportunity to do something about it. They had a mindset for innovation that they applied to their environment.
At the time, Holmes was a sophomore at Stanford, and according to her chemical engineering professor, viewed complex technical problems differently than other students. She dropped out shortly thereafter and persuaded her parents to invest her education fund into the business start-up.
Fadell’s tenure at Apple was distinguished by asking lots of questions, challenging Steve Jobs, and building his network in the “valley” outside the company; something normally reserved for Jobs himself. He didn’t conform to the typical concept of the Apple executive.
The Key to Innovation
So what is the key to your innovation? What is it that irritates you, but you find it difficult to simply walk away or ignore it. Instead, you keep trying to figure it out. This may be your opportunity to move from irritation to innovation; to find new approaches to address old ways of doing things. Though Holmes and Fadell applied innovation on a large scale, you can easily do this within a smaller sphere of influence; in your work team, organization, community group or family. Here are a few simple steps.
- Tap into what’s irritating you. What problem needs to be solved? Chances are it’s right in front of you.
- Find the benefit. Who will it add value to? Identifying your stakeholders will help you to target what action to take, and encourage you to stick with it for their benefit.
- Ignore the naysayers. What do you believe is possible? If you don’t have faith in yourself, no one else will either.
- Identify all the assumptions associated with the status quo. Why do people do it this way? Calling them out individually helps to break the innovation opportunity down into workable sizes for better analysis.
- Methodically challenge each assumption. Why? Why? Why? Why? Why? By the time you’ve asked “why” five times, you’ll uncover some suppositions that really don’t have a strong foundation.
- Think of a new approach. What if we did it this way instead? Then think of another different approach. This practice gets you into the mode of change.
If you’re really irritated, true innovation will typically involve transformation, not evolution. It will yield a totally unexpected outcome that represents a leap ahead, not just a step forward. So embrace that impatience and exasperation with the current situation, and press forward to a new mindset of innovation.
Photo courtesy of iStockphoto
Copyright 2014 Priscilla Archangel