7 Levels Of Decision Making To Match Business Needs

Nothing happens in business until someone makes a decision. These days, with the market moving at warp speeds, the timeliness of decision making is also critical. What might have been the right decision yesterday, may be the wrong decision tomorrow. Yet one of the most common complaints I hear as an advisor to businesses is that the decision process is arbitrary or broken.

The challenge is that everyone, including the experts, seem to have a different view of the right decision process, and when it should be used. To put this into perspective, I found a good summary of the different levels of delegation and enablement in a recent book, “Effective People Management,” by Pat Wellington, who is an experienced international executive and consultant.

She suggests that the level of decision delegation should be commensurate with the experience and knowledge level of both the manager and the team involved in working the issue. If the team is very experienced, the manager should delegate more and move up higher on the following numerical scale for optimum decision effectiveness and speed:

1. Manager decides and announces the decision (tells). The manager at this level reviews options in terms of objectives, priorities, timescale, and then autocratically decides on an action and informs the team of the decision. This approach will likely de-motivate experienced teams, but may be required when time is of the essence.

2. Manager decides and then communicates to others (sells). At this level, the manager makes the decision, but then explains the reasons and the positive benefits accruing to the team, the company, and customers. The decision then becomes part of the team learning process, and confidence in the manager increases rather than decreases.

3. Manager presents the decision and invites comments. The manager presents the decision along with the background. Team members are invited to ask questions and discuss the rationale. This more participative and engaging approach enables the team to appreciate the issues and implications of all options. This approach improves satisfaction.

4. Manager “suggests” a decision and invites discussion. The manager discusses and reviews a provisional decision on the basis that the manager will evaluate their views before making the final decision. Thus, team members have some real influence over the final decision, and recognize a real contribution and appreciation of the team.

5. Manager presents the situation for input and joint decision. With this approach, the manager presents the options to the team. Team members are encouraged and expected to offer ideas and additional options, and discuss implications of various options. Being high-involvement and high-influence is highly motivating to every team.

6. Manager explains the situation and asks the team to decide. At this level, the manager will effectively delegate responsibility for the decision to the team, perhaps with stated limits. The manager may or may not choose to be a part of the team that decides. This approach requires a mature team, and major responsibility acceptance by the team.

7. Manager asks the team to define the problem and also decide. With this approach, team members identify and analyze the situation, develop resolution options, and then decide on a preferred course of action. The manager agrees to support the decision and manage implementation. This puts the team at the strategic decision-making level.

In my experience, successful first-time entrepreneurs and startups operate nearer the top of this list, while larger and more mature organizations that run effectively operate nearer the bottom of the list of approaches. If I see the opposite, I often find a dysfunctional business, or at least one which may not be agile enough to compete in today’s marketplace.

What this means to you is that you must pick your role and your company, based on your own motivations and expectations. It also means that you must be prepared to change and adapt as the organization evolves. Are you at the right place in the right organization to be effective, satisfied, and motivated to make the decisions that need to be made?

Marty Zwilling

*** First published on Inc.com on 03/13/2018 ***

7 Lessons On How To Maintain That One-Percent Edge

No company or entrepreneur gets it right every time. As an angel investor, I have found that people claiming a perfect record are either lying to themselves, or they are not taking enough risk to enable a big payback. In the long run, your ability to thrive in business today is more about how you prepare for and handle the inevitable exceptions and failures, than shooting for perfection.

In trying to put a practical edge on this message, I found some help in a new book, “The One-Percent Edge,” by Susan Solovic. She has been there, as a serial entrepreneur, internet pioneer, attorney, and media personality. She offers some good lessons for every modern business and entrepreneur that I can paraphrase here, with insights from my own experience:

1. Not every customer is predictable, so expect exceptions. Of course, it’s important to put standard processes in place for all transactions, returns, and service requests, but a policy of “no exceptions” is not competitive today. A special case handled individually can be your best advertising, through social media and this world of instant communication.

For example, when a grieving customer informed a T-mobile customer representative that her husband had just passed away with a $2000 overdue bill, with all funds frozen, the customer’s account balance was forgiven. She was even offered unlimited minutes for the following two months. She shared her joy online, with over 29K views and likes.

2. Train customer support personnel for complex situations. By the time a customer decides to reach beyond a front-line employee, the situation is already complex. The age-old approach of putting marginal or new employees in support is a recipe for disaster. Put your best employees in support, and continually enhance customer support satisfaction.

3. Give employees the authority and incentives they need. Above all, employees must have your trust and empowerment to make exceptions where appropriate, and solve problems on the spot. One of the best approaches I have seen is managers providing rewards for problem solving, including visible public recognition for their peers to see.

   For example, the transport staff at the Staten Island University Hospital Radiology Lab has the tough and tiring job of wheeling patients around for testing. When an employee witnessed another solving a problem or going the extra mile, they would nominate them for a Go the Extra Mile (GEM) certificate. These make everyone more empowered.

4. Respond to customer special requests in real time. For better or for worse, the Internet and social-media-based customer access have made consumers expect virtually immediate responses to their issues. I still regularly hear from customers that wait for days or weeks after submitting a web form, or get stuck in telephone queues for an hour.

5. Offer a great customer experience, not just a product. Today lasting customer loyalty requires an experience that goes far beyond the initial product or service. This includes marketing, social media, the buying experience, as well as service. If that experience falls short of the mark, your business will suffer, no matter how great your service is.

Many negative customer experiences can actually be turned into positives, if you quickly acknowledge the problem, resolve it, and spread the positive message before the negative one gets amplified. Don’t repeat the “United Breaks Guitars” experience, which now has been published as a book on what not to do.

6. Be accountable, and admit and correct mistakes quickly. Successful leaders and businesses are humble and transparent enough with themselves and others to admit mistakes and correct them quickly. In this way, those around them, including customers, can benefit from their learning, and feel a positive relationship and trust.

7. Learn from the companies that get it right. Etsy is an example of a company that has a tremendous reputation with customers. Every user gets a unique experience, and this gives them a feeling of being special and well-cared for. The team works hard to personalize the customer journey so that users feel more connected with the experience.

Remember, you don’t have to be perfect to outperform the competition. Only one percent above the rest is still the top. No quantum leap is required to get there – just make small incremental improvements in all areas of your business, and you too can avoid the pain of a radical overhaul (when it may be too late anyway), while increasing your agility and resilience.

Marty Zwilling

*** First published on Inc.com on 03/08/2018 ***

9 CEO Myths That Can Limit Your Business Leadership

Based on my many years as an executive in large and small businesses, and time mentoring aspiring entrepreneurs and business owners, I find that most people enjoy being CEO critics for a day, but are hesitant to consider themselves as a long-term candidate for that position. They often rationalize their lack of zeal to not having the right background or credentials for the role.

I’ve long felt that CEOs are just regular people, like the rest of us, perhaps with a bit more drive and confidence. I found this view well supported in a new book, “The CEO Next Door,” by Elena Botelho and Kim Powell. Unlike my gut feelings, they base their views on their own study of over 2,600 business leaders, first surfaced last year in The Harvard Business Review.

Their conclusion is that those who reach the top in business share behaviors that anyone can master, including being decisive, reliable, delivering on what they promise, adapting boldly, and engaging with stakeholders without shying away from conflict. These authors go on to debunk the many myths I hear that hold back many aspiring CEOs, including the following:

1. Prior executive experience trumps all for CEO success. Among the more shocking findings in the research was that first-time CEOs were statistically no less likely to meet or exceed expectations than those with prior CEO experience. If you have the drive and passion, don’t let the experience myth keep you from aspiring to your dream.

2. CEO is a birthright talent, rather than an acquired skill. I’m sure that some natural- born CEOs do exist, but I agree with Peter Drucker, who said “Leadership is not magic, and has nothing to do with genes. It’s a discipline, and it can be learned.” Over 70 percent of the CEOs in the study claimed no early age aptitude or interest for such a role.

3. To become a CEO you must have a flawless track record. The reality is that 45 percent of CEOs interviewed had at least one mistake that ended a job or was extremely costly to the business. What set successful CEOs apart was not their lack of mistakes, but how they handled setbacks. They talked about what they learned, rather than failure.

4. Successful CEOs need a larger-than-life personality. Charismatic “masters of the universe” may dominate Hollywood films, but in real boardrooms, results speak louder than charisma. Over a third of the CEOs in the study actually described themselves as introverted, with no measurable differences in results between introverts and extroverts.

5. Great CEOs work harder than the rest of us. Analysis showed no predictive relationship between how hard a leader worked and how likely he or she was to become a CEO. Furthermore, 97 percent of low-performing CEOs in the study scored high on work ethic. Many people work hard, but fewer consistently produce winning results.

6. For CEOs, the smarter, the better. Above-average intelligence is an important indicator of CEO potential. However, once at that level, higher intelligence as measured by standardized tests does not increase the odds of performing well in that role. It’s key to speak in clear simple language to convey messages and get the rest of us to follow.

7. Great CEOs must be able to excel in any situation. A common misperception is that a great CEO is capable of handling any situation. I find that the best are very thoughtful about identifying the roles and context where they can contribute. They have the self-discipline to turn down the wrong job or a challenge they are not yet ready to tackle.

8. The right academic credentials are critical to be a CEO. Some of the most famous billionaire CEOs, including Bill Gates and Mark Zuckerberg, dropped out of school to build their businesses. In this study, only eight percent of the CEOs did not complete college, but I’m not convinced that the degree is as critical as the discipline and learning.

9. Great CEOs are likely to be egotistical superheroes. In fact, the authors found that the weakest CEO candidates were more likely to be self-centered, and were superheroes only in their own mind. The best were quick to use the term “we,” and recognized the strengths of their team. Many traced their team focus back to mentoring or athletics.

My message is that you need not let any of these myths derail you from running your own company, or limit your career advancement in your chosen profession. I’ve known many great CEOs, and like Peter Drucker, I don’t believe there is any magic formula. With the pace of change in business today, there has never been a better time to follow your dream, and get to the top.

Marty Zwilling

*** First published on Inc.com on 03/06/2018 ***

Grow by Creating Markets, Versus Killing Competitors

For your business to continue to grow, there are really only two ways to get customers. One way is to take customers away from an existing player, and the other is to create a new market with a new product or service that didn’t exist before. Examples of recent “new market” big wins include Apple with iTunes for digital music, Uber for ride sharing, and Airbnb for renting a spare room.

Business growth by creating new markets is now popularly called the “blue ocean strategy,” based on a classic book with the same name. The alternative is a “red ocean strategy,” where everyone is swimming within the same predefined industry boundaries, and cutthroat competition is turning the ocean a bloody red. A blue ocean means new and uncontested territory.

I just finished a recent update by the Blue Ocean authors, called ”Blue Ocean Shift,” by W. Chan Kim and Renee Mauborgne. It compares the successes and failures of blue ocean business efforts in recent years, and offers some specific guidance on shifting to this strategy. I am impressed by the authors’ five-step systematic approach, paraphrased here, for implementation:

1. Target the area where you have to most to offer and gain. It all starts with broadening your scope of thinking, assessing your own strengths, and focusing on areas where you bring the greatest advantage. For example, Apple already had the digital and file management expertise, and they recognized an unmet need with music sharing.

   Equally important is the effort to put together, isolate, and motivate the best team for the journey ahead. Do you have the mix of skills, with the level of functional and hierarchical authority required? You want to select people who are good listeners, are known to be thoughtful, and are willing to raise questions when others don’t.

2. Build an objective view of the strategic landscape. When the team sees the strategic reality and agree on the need for change and growth, only then can you create real alignment and a collective will to make the shift. If this is done properly, you won’t have to tell people to move to the new ocean strategy – they will viscerally feel it and do it.

3. Uncover hidden pain points that limit your industry. This will help everyone identify the unexplored spaces where value is trapped and waiting to be unlocked. Pain points will be seen as blatant opportunities, rather than constraints. Remember that the total customer experience is now much broader than just product features and price.

   Identifying all of your non-customers in the current space allows an assessment of the total demand landscape that lies outside the current industry understanding. Airbnb realized there was an opportunity to extend the hospitality industry beyond the capital-intensive world of hotels and resorts, and hotels were a pain point for young travelers.

4. Reconstruct market boundaries to allow new solutions. This is where you put random brainstorming aside and apply systematic logic to re-create markets and industry boundaries. The result is firsthand insight into practical ways to reframe existing industry problems and create break-through solutions that will excite a new class of customers.

5. Finalize your move with market tests and business models. The goal of this step is to take the politics out of the commitment process, and obtain validation and feedback on the strategic options. What you want is a clear decision, validated by key stakeholders, with a wealth of insight on how to prevent gaps in execution.

   Now is the time to tighten and refine your plan to maximize its market potential, and then formally launch it. This ensures that the move you roll out generates not only a leap in value for buyers, but also quickly accelerates growth in your own business. It’s important to move while the team’s energy is high, and they are fully committed to the shift.

These steps are essentially the same, whether your business is mature, or a startup. I see more and more blue ocean efforts these days, but unfortunately not many have the discipline and rigor outlined here. Perhaps it’s time to take a hard look at your own business growth strategy. It’s a lot more fun to systematically explore new territory, than to endlessly chum the existing sharks.

Marty Zwilling

*** First published on Inc.com on 03/01/2018 ***

6 Ways To Incent Breakthrough Innovation In Your Team

Breakthrough innovation is the dream of every entrepreneur, but it’s still a scarce commodity. Selecting and nurturing people who are likely to help you in this regard is an even more elusive capability, and one that every angel investor, like myself, wishes he could get a lock on. In fact, every manager and business owner needs this skill just to survive with today’s pace of change.

We all wish we were the next Steve Jobs, or Elon Musk, or Thomas Edison. If we’re not, then at least we would like to recognize them when they come through the door, or better yet, create a few like them in our own organization. I wish I understood what makes some people so spectacularly innovative, producing triumph after triumph, while the rest of us merely get by.

I’ve seen a lot of speculation on this challenge over the years, but I was recently impressed with the insights in a new book, “Quirky,” by Melissa A. Schilling. From her position as professor at NYU Stern, and recognition as one of the world’s leading experts on innovation, she takes a deep dive into the lives and foibles of eight well-known innovators, including the ones mentioned.

One of her encouraging conclusions is that we all have potential in this regard, which can be brought out naturally by life circumstances and special circumstances, or nurtured by the people and culture around us. I’ll paraphrase her key recommendations for capitalizing on this potential, for use on yourself and members of your team:

1. Incent people to challenge norms and accepted constraints. Everyone wants to fit in, but most of us have felt a sense of being an outsider, which needs to be nurtured rather than crushed. Elon Musk, for example, had no experience or training as a rocket scientist when he came up with the idea of reusing rockets, and the innovative idea for SpaceX.

2. Give people time alone to ponder ideas without judgment. When you are looking for breakthroughs, you need time to think outside the box without fear of consequences. The payoff value of a person working alone on side projects, tapping into intrinsic motivation, has been the source of several of Google’s most famous products, including Gmail.

3. Reinforce people's belief in their ability to succeed. One of the most powerful ways to increase creativity, at both the individual and organizational level, is to encourage people to take risks by lowering the price of failure, and even celebrating bold-but-intelligent failures. Also, creating opportunities for early wins is extremely valuable for this process.

4. Inspire ambitions by setting grand goals and purpose. Driving business goals that have a social component that people can embrace as improving quality of life provides intrinsic motivation to increase creativity and effort in their activities. Steve Jobs was obsessed with revolutionizing personal expression, more than making a computer.

5. Tap into people’s natural interests and favorite activities. In business, this is called finding the flow. It requires both self-awareness on what you like to do, and a willingness on the part of your manager to personalize work assignments. Thomas Edison loved to solve problems, so he persevered, despite 10,000 filament material tests that didn’t work.

6. Increase focus on technological and intellectual resources. With today’s pervasive access to the Internet, with powerful search tools from Google, WolframAlpha, and many others, the Library of Congress is at everyone’s fingertips. They just need the inspiration, time, and training to capitalize on these tools, and the new devices that arrive every day.

Schilling and I do agree that you have to start with people who possess substantial intellect, so the conventional indicators of skill and accomplishments cannot be ignored. In addition, it’s important to find partners and team members with a high need for achievement, a passionate idealism, and faith in their ability to overcome obstacles, often seen as a level of quirkiness.

We are talking here about finding and nurturing people who can literally help you change the world, because that’s what breakthrough innovation is all about. If your business and personal goals don’t measure up to that standard today, maybe your first focus should be on rethinking your own objectives. The bar for staying competitive in business keeps going up.

Marty Zwilling

*** First published on Inc.com on 02/21/2018 ***

7 Keys To Success With An Employee Ownership Culture

One of the lessons I have learned over the years as a business executive, and now as a mentor to entrepreneurs, is that if you really want employees who enthusiastically take ownership of their work, you have to start treating them like owners, not renters. Owners feel they have skin in the game, and benefit from improved effort and results, rather than just getting blamed for problems.

Unfortunately, according to Gallup’s State of the American Workplace report, only about one-third of employees feel like owners. Another 50 percent are “job renters,” bringing only their hands, but not their hearts to work. They show up every day, keep a low profile, and collect a paycheck. The remainder are actively disengaged, and passively block or actively sabotage forward progress.

It’s a growing challenge, since we now have four generations of workers together – Matures, Boomers, Gen X, and Millennials (Gen Y), all with different ideas of how an owner should act. I was impressed to see some real guidance on this subject in a new book, “Counter Mentor Leadership”, by Kelly and Robby Riggs, a father-son coaching team that spans the age spectrum.

These authors helped me validate my own recommendations on how business leaders and entrepreneurs can incent their own team members and employees to move a bit closer to the owner mentality. These include the following:

1. Clearly communicate the big picture, and current reality. Be accessible, talk often to the team about the business, and be specific in communicating a vision and goals. Don’t hide the current reality of challenges and shortfalls. Employees can’t be owners if they don’t understand the business targets and realities. They will revert to renters, at best.

2. Give every employee the necessary degrees of freedom. Remember, one of the key drivers of ownership is a sense of autonomy. By definition, the freedom box is different for every owner. Some are super-capable and deserve a lot of decision making flexibility, while others are new or less experienced, so their box must be a bit smaller.

3. Make them owners with stock options and actions. Ownership can be financial or psychological. Steve Jobs was a master of having team members own their work, with small things like developer names molded in the plastic cover of the Macintosh. Many companies now have employees put names on quality control tags, or sign their work.

4. Give advancement priority to initiative versus experience. “Time-in-grade” and years of long hours are not qualifications to become an owner. Hiring, recognition, and promotion must foster a culture of focus on job results, commitment, and growth. This is the key leveler between the multiple age generations in the workplace.

5. Provide employee feedback and coaching in real time. In this context you can describe specific behaviors that must change, and provide your actual examples so the team member can “step into” the past scenarios. Avoid any hearsay or anonymous sources, since these are likely not entirely accurate, and will provoke emotional debates.

6. Flatten the hierarchical management structure. Every owner reports to someone (Board of Directors), but every level inserted reduces autonomy and the sense of ownership. Minimize traditional organizational charts, and special perks, like corner offices and fancy furniture. This allows employees to feel more equal, and interact with leaders and role models for better communication, recognition, and mentoring.

7. Fix mismatches and commitment problems quickly. Make your expectations clear before hiring, including your ownership culture. Then, some companies, including Amazon and Zappos, offer employees up to $5000 to leave, if either side doesn’t feel an ongoing commitment to the business. No commitment is a big job performance problem.

I’m still convinced that the best advice I can give to anyone starting their career, or starting their company, is to find something that drives you to work as hard as you can, and still enjoy it. Stay humble, but don’t be afraid to take a risk and own it. As a business owner, if you want people to take ownership with you, treat them like owners. That’s how you get where you want to go.

Marty Zwilling

*** First published on Inc.com on 02/16/2018 ***