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I Got Outcoached in a Big Way

Monday, March 28th, 2011

In recent years, NCAA’s March Madness basketball tournament has had a few upsets, a few memorable moments and a few captivating quotes. This year’s memorability quotient has reached new heights which includes:

Four teams with a combined 37 losses and a combined winning percentage of .755, second lowest since 1985.

Four teams whose combined seeding equals 26, breaking the record of 22 in 2000.

Not a single No. 1 seed for only the third time since seeding began in 1979.

Not a single No. 1 or No. 2 for the first time.

No surprise then, that out of the 5.9 million entries in the ESPN bracket contest, only two had this foursome making its way to Houston. Did they go on a hunch? Or just tie on a blindfold and throw darts at the bracket?

While this year is special, from my perspective, the coach and the team to watch from a leadership/team perspective is Brad Stevens and the Butler Bulldogs. Last year they were the Cinderella story almost beating Duke in the NCAA Championship game. This year, they’re back to their old tricks of playing the underdog role and toppling giants. And its Brad Stevens that I think leaders need study, understand and possibly emulate. Following Butler’s upset of Florida, this is what Brad Stevens said about his team and Florida’s coach, Billy Donovan.

“They (Butler’s players) carried their coach today in a big way. I was saying I got outcoached in a big way.”

This comment probably caught most off-guard, wondering how Stevens could even make such a statement. Was he simply playing his team’s underdog role to the max? Did he really mean it? Or was he simply giving credit where credit was deserved - to his players?

Let me change gears here for a second. Last week, the New York Times ran a story about Google’s quest to identify what it took to be a good boss. Their search looked at quantitative and qualitative data, from which they identified 8-key criteria. They being:

Be a good coach.
Empower your team and don’t micromanage it.
Express interest in team members success and personal well-being.
Don’t be a sissy - be productive and results oriented.
Be a good communicator and listen to your team.
Help your employees with career development.
Have a clear vision and strategy for the team.
Have key technical skills so you can help advise the team.

At first glance, these leadership traits have been taught for decades. Nothing new. Nothing fancy. No surprises. Pretty basic stuff. Yet its reassuring that the simple basics of being a good boss remain relevant in an era of “whats new lately” can dominate leadership classes. So let’s get back to Brad Stevens and the Butler Bulldogs. I’m of the opinion that the question about whether Brad Stevens was outcoached or not isn’t even relevant. I think the question should be, “Who is the better leader/boss?” Because I’m coming to the conclusion that Brad Stevens is a pretty darn good coach, however he is a brilliant leader/boss. This is why the Butler Bulldogs have returned to the Final 4 two years in a row. It’s why his players give 110 percent and don’t choke under the heat.

Just maybe, schools are doing a pretty good job of recruiting coaches, however they need to do a better job of finding leaders. I think its that plain and simple.

What do you think?

Tags: Billy Donovan, Brad Stevens, Butler Bulldogs, Coaching, Florida, google, Leadership, March Madness, NCAA
Posted in Leadership, Uncategorized | No Comments »

How NOT to negotiate - Wisconsin Style

Friday, March 4th, 2011

I’ve always been a proponent that you learn as much from your successes as you do from your failures. With what is going on over in Wisconsin relative to collective bargaining and union busting initiatives, there seems to be a lot to learn. From my perspective, it’s a test case of “How Not to Negotiate.” Here are six take-aways that are being shown on daily basis.

Never underestimate the power of the opposing party: Scott Walker had the numbers he needed to make it happen - it was a slam dunk. However, he either didn’t consider or he under-estimated the ability of Senate Democrats to defect, thereby preventing the formation of a quorem, which is needed to take a vote. Lesson: Always treat your opponent with respect, realizing they might also have a few cards up their sleeve that you didn’t think about.
Imposing punitive damages does not mend a fence: Governor Walker implemented a strategy that imposed numerous damages like a $100 fine for every day a senator misses. This was an attempt to force Democratic Senators back to the capitol. While this might work with children, its having the opposite effect in Wisconsin. Democrats are simply becoming more vigilant in their efforts to stop Walker from achieving his desired outcome. Lesson: Never parent your opponents with “You better or…” in an attempt to have them take action.
Win-Lose strategies are always high stake games: From the beginning, Walker and the Republican party has taken a Win-Lose strategy in this debate. The Democrats conceded early on some key initiatives, the Republicans have conceded on virtually nothing. This only furthers the divide that will persist in the State for years to come. Lesson: All negotiations should pursue a win-win outcome if at all possible.
Bullies should stay at home: In State politics there is a lot of huffing and puffing or I’ll blow your house down tactics/rhetoric in play. While this makes for a good fairytale, it makes for terrible negotiations. Having a bully on the team is rarely useful and it tends to extend the negotiation process - and yes, Governor Walker is behaving like a Bully. Lesson: Bullies are rarely an asset in any negotiation process.
You’re always on stage - anything and everything can be used against you: If you’re heading into a negotiation, you must make all private and public comments/conversations as if they were being taped by CNN. Governor Walker recently got into trouble by stating what was on his mind to what he believed to be a major political supporter - David Koch. It wasn’t David and after the conversation was leaked to the media, Walker cried fowl. Lesson: In the world of technology and social media, every word and every conversation must be on point as if it were a CNN moment.
Avoid backing your opponent into a corner - they just might bite: There is an old Chinese Proverb that states, “Even a rabbit will bite if its cornered.” By backing unions into a corner, Governor Walker has inspired a national debate around a State issue. While this may be good for Walker’s political aspirations, it does not help solve the problem at hand. Instead, it simply intensified the debate and the divide. Lesson: Be careful, at times you might win the battle, yet lose the war if you go too far.

Governor Walker rode into the Governor’s Mansion with full complement of Republican Assemblymen and Senators. This was a dream come true - they had a full house and they knew it. And with a full house, most will put all of their chips to the center of the table with confidence. However in this instance, Walker has been unable to collect his winnings and go home. From my perspective, Governor Walker continues down a road of botched negotiation strategy and execution.

What are your thoughts?

Tags: bully, David Koch, Governor Walker, negotiation, scott walker, union busting, win-lose, Wisconsin
Posted in Strategy, Uncategorized | No Comments »

An Unaimed Arrow

Tuesday, February 8th, 2011

There is a saying, “An unaimed arrow never misses its mark.” With today’s modern business practices, it’s difficult to fathom that any corporation or business has an unaimed arrow in their quiver. After all, this is the era of lazer-like focus. This is the era of strategy & relentless execution. This is the era where companies are expected to deliver shareholder value, and everyone knows it. However, there are of course - exceptions. Exceptions like appear to defy logic and many of the principles essential to leading and navigating a business in the world marketplace.

Such appears to be the case of Sara Lee. A conglomerate based in Chicago that has struggled for at least a decade. A recent article on Bloomberg titled, Sara Lee Disarray Costs Shareholders About $1 Billion: Real M&A is interesting. The article discusses how Sara Lee has been a company that has talked about “creating value” over the past 10 years, yet has been on a consistent journey of “destroying value.” Now Sara Lee has been on the sales block for several months now (and been divesting companies for a decade), with several offers coming up short. the article goes on to state:

Sara Lee Corp.’s managers, who failed to boost the company’s stock buying and selling $12 billion in assets in the past decade, destroyed shareholder value by passing up three chances to sell itself in the last year. ..

While Sara Lee pushed for a sale at about $20 a share, according to two people, it decided to break itself up after JBS, the world’s largest meat producer, and the Apollo group dropped out without boosting their informal offers. After spending $3 billion for businesses from coffee roasters to fabric suppliers since 2000, and selling off more than $9 billion of units such as Hanesbrands Inc., its stock is still worth almost $2 less than at the start of the last decade.

“The board felt pressured to do something and unless we don’t understand the details, it seems to have given up on its commitment to creating shareholder value in favor of just doing something,” said Tim Ramey, a former Sara Lee vice president of strategy and corporate development who left the company in 2002 and called the recent saga “sad.”

What is the cost of just doing something, which some might say has been Sara Lee’s mantra for the past decade?

While Sara Lee has climbed 15 percent in the past three months as takeover speculation increased, the food company’s 9.4 percent drop since the start of 2000 contrasts with the 45 percent gain for consumer staples stocks in the Standard & Poor’s 500 Index. Only four other companies in the industry fell more than Sara Lee, data compiled by Bloomberg show.

Even with dividend payments, the company’s competitors returned more than twice as much to shareholders on average.

Sara Lee has been a company that talks about delivering shareholder value, yet has consistently come up short. If their arrows in the quiver were aimed, well they either missed their mark, or they were aimed at the wrong target. In the end, Sara Lee is a company that lost their success momentum and success formula. In this arena, everything goes bad from increased turnover, depressed worker productivity, short term thinking and others.

Today, Sara Lee’s arrow is aimed in one direction - R.I.P. And even that is proving to be difficult.

Tags: Sara Lee
Posted in Leadership, Momentum, Strategy, Uncategorized | No Comments »

Brilliant or Brazen? The Groupon Mystery

Tuesday, January 25th, 2011

The Internet is a wild and at times scary place. It’s where modern day cowboys and Texas wildcatters reside. Its filled with technologically savvy geeks, which at times are flush with money. And always, there is a huge success story just around the corner.

Today, Groupon, the online coupon site is in the limelight. And they’ve received a lot of notoriety for turning down a $6 Billion offer from Internet behemoth, Google in December 2010. Now granted, this is pale in comparison to the social networking site Facebook, who received additional funding of $1.5 Billion recently, thereby valuing it at $50 Billion. However I also know that for every big time winner, there are a multitude of losers. Just think of Yahoo and their refusal to be acquired by Microsoft jsut a couple years ago.

Today, I have to wonder if Groupon’s cool reception to Google’s $6 Billion offer was Brilliant or Brazen. And the more I think about it, the more I believe Groupon should have taken the cash. Some of my reasons being:

Groupon is a high cost advertising model for companies to implement. Groupon’s success formula is to find vendors that will cut their prices by upwards of 50%, of which Groupon will take 50% of that amount. In effect, the vendor is offering upwards of a75% discount on their goods and services. This may bring in sales, however for most companies, this is not a success formula. And I will bet that Groupon’s 50% take will shrink over time.
Groupon’s business model is easily duplicated and being duplicated. Already a multitude of me-too companies have entered the market, including Amazon’s $175 Million acquisition of LivingSocial. And Google is readying a similar product for quick release. Either way, the market will likely become crowded with a limited supply of vendors.
The coupon model is unproven at this stage of the game. In essence, the whole business model could implode just as easily as it could explode. Like I said, Groupon is a high priced marketing program that can deliver results, but severly impacts profitability.

From my perspective, the nest 6-12 months will be interesting for the spectators watching the buildout of Groupon. It will either be one of the great success stories, or one of the greatest blunders of all time. Time will tell.

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Toyota’s Silent Problem Nightmare Still Haunts

Tuesday, January 11th, 2011

Predicting the future is filled with misses, near misses and from time-to-time a direct hit. I would like to think that when it came to predicting Toyota’s challenged future over the past year, my analysis was a direct hit. For instance, here are a few of the predictions I made.

Today, Toyota is facing increasing competition from companies like Ford & GM, Hyundai & Kia, and of course VW, Audi, BMW and others. Each of these have picked up their game in recent years and are willing to take Toyota head-on. However what is killing Toyota slowly and quietly is not competion. To the contrary, Toyota’s brand and reputation have eroded in areas where it was prviously strong like quality, engineering, dependibility, value and safety. In essence, very few proudly state, “I drive a Toyota” today. From my perspective, Toyota will continue to be a company in turmoil, with an eroding value proposition. June 2010

Today, Toyota’s Silent Problems of yesterday (the problems Toyota has been avoiding, neglecting and intentionally silencing) are exerting a tremendous force on the company and the organization. These legal and quality issues will continue to be a major distraction, and will impact everything from employee turnover, to productivity, to profitability. Toyota continues to be a test case for the ideas in unleashed in my book, Without Warning. April 2010

Toyota’s problems are just now beginning to surface as lawsuits surface and brand loyalty is tarnished. And as Toyota’s brand suffers, brands such as Ford, Suburu, Honda and Hyundai are positioned to fill the void. Although Toyota’s stock price has recovered in recent weeks, Toyota’s future is far from over. March 2010

The future of Toyota lies in the hands of Toyota. What did they learn, if anything? Will they change the culture inside Toyota, so it more closely resembles the culture inside their assembly plants? Will they quit blaming and start owning the problem? Will they learn from their mistakes?

My guess is, Toyota will survive. However, whether or not Toyota thrives is a different question. For Toyota to thrive, it will have to show the world it deserves their trust, and to achieve this, Toyota will have to change their ways. And as we have come to learn, this is very difficult to achieve in the Japanese culture. March 2010

Today, the real impact on Toyota’s brand are being exposed.

From Bloomberg: Toyota Motor Corp.’s U.S. vehicle sales fell in 2010 while industrywide sales rose 11 percent and every other major automaker reported gains. Ford Motor Co. moved up to second place behind only General Motors Co.

Ford displaced Toyota as No. 2 in the U.S. with 1.97 million vehicles sold in the year, up 17 percent from 2009, compared with Toyota’s sales of 1.76 million cars and trucks. GM retained the top spot with U.S. sales of 2.22 million vehicles, an increase of 7 percent. Deliveries in December accelerated to the fastest pace of the year.

“The black clouds from Toyota’s recalls just don’t seem to go away,” said Jesse Toprak, vice president of industry trends for Santa Monica, California-based auto pricing website Truecar.com. “We saw Ford, GM and Hyundai-Kia come on strong. Brand loyalty isn’t what it used to be.”

Toyota’s story continues and a future story is unfolding. Toyota has lost in mojo! Toyota is quickly beginning to resemble GM of 5 and 10 years ago. Toyota’s product line-up is tired and uninspiring. Toyota is no longer leading in the arena of innovation or quality. Quite simply, “There is no one standing in line waiting for the chance to buy a Toyota!” In essence, Toyota is in trouble.

Toyota’s problems were being deliberately silenced. However once the cat got out of the bag, Toyota’s competitive advantages simply evaporated. Their dirty laundry was out in the open for everyone to see. Yes, Toyota’s silent problems will continue to impact their future.

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The Marriage Game

Thursday, December 9th, 2010

The marriage game (M&A) is quite interesting to watch in the business world. Who decides to court whom? Why are they attracted to each other? Is this a marriage of equals, of necessity or is it strategic? Is this a cash, stock, asset or some combination of the above? And most importantly, how are the various parcels of the deal valued - how much “good will” is in the equation?

M&A is always a high stakes, high profile game. It’s a game business people love to follow. And for a select few, some actually engage in the line-by-line details of the transaction (or what some might want to refer to as “the dance”). For some, it’s simply magical. For this reason, the news reports of Borders possible interest in acquiring Barnes & Noble is fascinating. And what about the renewed Yahoo and AOL merger possibility?

While these deals may be fascinating, most of the time, they’re equally puzzling. Why would they do that? What could they be thinking? I wonder what type of pipe they’re smoking today?

To put things in perspective. The chances of successful marriage (50-50 bet) is significantly greater than that of a successful merger (the common figure being that 85% of all mergers won’t live up to their pre-merger hype). And maybe that is the important question to ask. “I wonder if this marriage is going to last?”

And the answer to that question is simple. Time will tell…”

Tags: AOL, Barnes & Noble, Borders, Mergers & Acquisitions, Yahoo
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The World in 2011

Tuesday, November 30th, 2010

I just received my issue of “The World in 2011″ put out by The Economist. As the economic/banking turmoil heightens, the sharp drop in the Democrats power base in the U.S. is rationalized and a multitude of other global tides begin their shift, 2011 is positioned to be a pivotal year for many economies and possibly the world. Just taking a quick look at a few of the articles titles will provide a glimpse into what is possible.

Welcome to a zero-sum world - the mood will be tense: get used to it. The era of good feelings associated with the heyday of globalisation has gone for ever.
Iran’s president nuked by the economy? The threat will come from the street. It is the conomy that could lead to Mr. Ahmadinejad’s downfall.
Powerhouse Deutschland - Germany will increase its influence on the euro-zone economy
The emerald no longer shines - Irish eyes are not smiling
Budget butchery - This is going to hurt
Markets in a muddle - Watch out for currency confusion. Perhaps 2011 will be a year in which currencies dominate the news.
A fight to the death - Scientists should at long last be able to see a route to the total eradication of malaria.

At the very least, The Economist puts a spotlight on what is possible in 2011. And to say the least, business leaders, companies, countries and the world will find 2011 challenging to navigate. Those that anticipate the unexpected will be in the best position to lead, and more importantly, benefit from the turmoil that surrounds the globe.

Tags: 2011, economic forecast, The Economist
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Denny Hecker was a Hacker

Wednesday, November 24th, 2010

There’s an old saying, “You can’t teach an old dog new tricks.” At times I thnk there should be a second saying, “If an old dog has learned some bad tricks, they’re difficult to unlearn.” In the State of Minnesota, the so-called frozen tundra to the north, a persistant news story has evolved over the past couple of years, this being Denny Hecker. Denny Hecker was a business mogul with diverse interests in automotive dealerships, car rental agencies, leasing companies and a multitude of other companies. If my memory serves me correct, at one time he had 250+ companies, which should have been a yellow flag that something might be afoul.

About a year and a half ago, the Denny Hecker empire came unglued. MPR News has a timetable up to April 12, 2010 here. One might think that an individual that has fallen from the sky and crashed just might change their ways - just a little bit. However as time moves on, nothing appears to have changed, at least according to a recent article in the Pioneer Press. It states

Jailed Twin Cities auto dealership mogul Denny Hecker used online bidding to secretly purchase some of his former belongings — a dirt bike and a Harley-Davidson motorcycle — at a bankruptcy auction in May, according to the trustee handling his bankruptcy estate.

Trustee Randy Seaver is trying to find out where Hecker got the nearly $17,000 he used to buy the items.

The purchases occurred at a time when Hecker claimed he was so broke that taxpayer-funded attorneys were representing him in his criminal fraud case.

As I’ve watched this story unfold, it occurred to me that Denny Hecker was never a business person, although the companies with his name attached to them might suggest otherwise. Denny Hecker in reality was no more than a high profile hacker. According to the dictionary: A hacker is a term used by some to mean “a clever programmer” and by others, especially those in popular media, to mean “someone who tries to break into computer systems.”

In the case of Denny Hecker, he was a clever business person that tried to break into business and governmental systems for personal gain. Some might consider this a con man, which quite honestly is an outdated term for the 21st century. The term business hacker feels more in-tune with the times. And definitely is appropriate when talking about Denny Hecker.

Tags: business hacker, con man, Denny Hecker
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Social Media Bust?

Monday, November 1st, 2010

In recent years, a stampede to join the social media revolution has taken hold. New entreprenuerial companies are being formed daily. Many mainstream/slow to the social media party companies have even changed their stance and are dipping their toe in the social media waterbowl. And for others, there is an all-out assault, integrating social media tools such as facebook, twitter and a multitude of others across the organization.

I’ll be honest, I understand the big picture of social media, yet have always wondered about the increasing noise in the marketplace. I’ll admit that just maybe my direct involvement in numerous start-ups during the dot.com era of 10-years ago may have influenced my outlook slightly. However at the end of the day, I’ve wondered many times how much longer this social media explosion can last. Where will it lead us?

The other day I came across an interesting article. One that made me think, simply because I’ve had similar thoughts. The article is by Axel Schultze, and is titled, When the Social Media Bubble Burst.

Dick Lee asked today in LinkedIn: “We rarely see people as enthused as they are over social media. Among those recent rare times are: when the high-tech balloon popped; at the height of the housing bubble; just before the market crashed; and when Sarah Palin was nominated for VP. Hey, exuberance can be headiest just before the fall.”

I’d say YES – the social media bubble is about to burst. People are recognizing already that the endless hours of watching the incoming streams from Twitter and Facebook or all the status updates on LinkedIn are hours wasted. All the paid tweets and people or agencies, who have been hired to tweet are not going to contribute to the bottom line. And the fan pages people build to get “fans, followers, connections” are just hopes that it will do something for the business – but it won’t.

The article isn’t quite as apocolyptic as it sounds. However, it does suggest that the social media explosion may slow down, and possibly experience a pullback of sorts. It suggests that a lot of startups and mainstream media companies will need to rethink their strategies and HR needs if the current outlook changes. And in this, a separation of the chaff so to speak will occur. Quite simply, a significant shake up in the social media industry could occur.

Obviously, attempting to predict the future is sketchy at best. However, companies need to ask the question, “What if…” By anticipating the future, companies that are prepared will be better able to act quickly and swiftly.

Conclusion: I encourage companies to create the numerous “What if…” scenarios relative to their social media plans for 2011 and beyond.

Tags: Social Media
Posted in Marketing, Uncategorized | 2 Comments »

Exagerate the POSITIVE and negative

Sunday, October 3rd, 2010

The framework of politics seems to naturally bring out the best and worst in those running for office. In some respects, it’s entertainment. Kind of like, All Star Wrestling. A lot of huff and puff, but in the end, the good guy/girl usually wins. But there’s also a dismal and disturbing side of politics, this being the exageration of the truth. Or what I would like to say “Exagerate the positive.” And for the opposition, their campaign will focus on turning that grain of sand into a boulder of doubt and suspicion. Here is a case in point.

(Chicago Tribune) U.S. Senate candidate Alexi Giannoulias tells voters he was gone from his troubled family bank by late 2005, but that’s not what he told the Internal Revenue Service.

Giannoulias was able to take a $2.7 million tax deduction last year because he reported working hundreds of hours at Broadway Bank in 2006.

Giannoulias says there’s no contradiction, and in fact there is no suggestion the Democratic state treasurer took a tax break he didn’t deserve. Rather, the issue highlights the fine line Giannoulias walks on the campaign trail in explaining exactly what he did at Broadway and when he did it.

The bank was at the top of his résumé when he was a 30-year-old first-time statewide candidate in 2006 with few professional highlights. But in his tight Senate race against Republican Mark Kirk, his tenure as a senior loan officer at Broadway is a bull’s-eye for critics who hit him for the bank’s loans to mob figures as well as troubled lending that contributed to Broadway’s collapse earlier this year.

Saying he left in 2005 gives Giannoulias maximum distance from the bank’s questionable lending practices, the April takeover by federal regulators and other controversies such as a loan by the bank to convicted influence peddler Antoin “Tony” Rezko in early 2006.

But by reporting that he worked at least 500 hours at Broadway in 2006, Giannoulias was able to get a break that helped him avoid paying federal income tax for 2009.

Deception by “exagerating the positive” is something that creeps into politics, onto resumes, and infects businesses. In the early stages, it makes perfect sense. However, if the other side of the story surfaces, penalties will accrue. Trust is questioned/destroyed. Careers are derailed. And future opportunities for advancement, destroyed. The inclination to exagerate the positive is almost human nature. However beware, it’s often a trap.

Tags: deception, exagerating the positive, Giannoulias
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Rodney Johnson - Without Warning