Author Archives: Ken Goldstein

by - 2 Comments

Debate Takeaways Tallied Tactfully

I try hard in this blog to leave out my personal politics, which isn’t all that hard to do since I consider the topic of business innovation and its various threads to be about as nonpartisan a subject as there should be.  Business enterprise and creativity are as fundamental to a shared sense of values as I can imagine, and where we may often disagree on the “how” I hope we don’t much disagree on the “why.”  Together we create our economy, our opportunities, and our experiment in progress called democracy.  We argue as we should about issues of governance and legal particulars, but we should agree that following the law is our duty as much as evolving it with the times is our right.

What does all that have to do with the Presidential Debates?  While I was watching the first of them this week, I saw as I often do a collection of ideas that can be applied to our business thinking, in complete abstraction of the of the candidates, what they said, or who won, if there is such a thing (anytime rigorous and important discussion is had in front of and with the people, the people win).  Presidential Debates are anything but ordinary, like the Olympics we have to wait four years for the next staging, but other than reinforcing what we already believe or possibly swaying a swing voter, there seems a deeper construct evidenced and worth exploring.

During the first debate one of my friends on Facebook likened it to a supercharged job interview, where the applicants were down to the final two, and given the stakes forced to faceoff in front of a panel consisting of more than 65 million of their prospective employers.  I liked that analogy a lot — I am not even sure it is an analogy — but I was thinking about the event a little differently.  For some reason, the debate struck me as the ultimate competitive sales call, where rather than entering a prospective client’s office before or after your potential competitor, you had to handle the sales call in tandem.  Many of us have been on more sales calls than we want to remember, but seldom have I heard people either leaving or entering the room thinking of the other guy as their opponent.  Perhaps that is more the case than we think — if that were going through our minds, we might approach the business pitch a little differently.

What stood out for me in the debate was the immense amount of time both candidates invested in preparation for the 90 minutes they spent together in the public eye.  That 90 minutes on the rarely shared dais probably felt like a lifetime to the candidates, or opponents, but once it was behind them, it probably felt like a millisecond.  I am sure the time leading up to the debate never felt excessive, as every precious moment invested in preparation was clearly a tradeoff borrowed from some other critical activity.  As they felt the pressure of the event nearing, those tradeoffs had to favor dedicated preparation pods over other pressing conflicts.  Preparation time is always discretionary, but imagine procrastinating too long when you know in heart and mind that preparation is everything.  Definitely reminds me of selling — if you aren’t prepared, you’re sunk, your client expects you to be prepared and has no reason to cut you any slack on a stumble.

Second to preparation, I was struck by its counterpart, the role of extemporaneous behavior, dancing in the moment, listening, reacting, evidencing spontaneity that reflected realtime analysis and response to the unexpected, to the extent anything said might be unexpected.  You can rehearse a speech or pitch perfectly, and both candidates did for multiple segments, but how do you handle the moment when someone says something you believe to be wrong, untrue, or unsupported?  I was wary going into the debate that both opponents had come with a quiver full of “zingers” to flick at the other, where I couldn’t imagine anything less dignified than a canned response played as in the moment.  Luckily we were spared that disrespect, and I take it as a lesson.  There is a huge difference between a heartfelt moment and a too cleverly scripted remark — no one wants to hear B material from an A level player.  The balance of preparation and live playtime is the heart of sales as it was the heart of the debate.  We can argue at will about who did it better, but in my mind I kept thinking how consistently hard this is to pull off, to balance preloaded preparation with inspired retort, the art of the pivot.

Holding the balance between preparation and extemporaneous response was the notion of authenticity.  Each word a candidates says adds to an outcome, and as we all have so often experienced, style is content.  Any debate coach or sales leader will tell you how you say something matters as much or more than what you say, and here again, you have to be careful at all moments under extreme pressure to keep your eyes on the prize.  The presentation layer matters, its visceral nature reflects passion and deliberation, that which people remember more than words.  Yet it can’t be an act, it has to be who you are.  Surely you can say what you want, anything you want, and you can say it any way you want, but ultimately your goal is not to win the debate, it is to win the Presidency.  Cut to the sales call; you need to make a good impression, often you think you need to say what the client wants to hear just to stay in the room, but after you leave the room those words and that style can haunt you.  Are you being consistent with what you said before and what you intend to do after?  Do people believe that is what you really mean?  That is the authenticity of your belief set, it underlies every moment you are on your feet, and it matters.

Only in high school are the trophies handed out after the tournament.  In most of life the true impact comes much later — which means that immediately following the debate is the regroup.  What went right, wrong, better or worse than expected, and how will that be factored into your next encounter.  High stakes exchanges often reward innovation and quick thinking, playing it safe is unlikely to impress, and taking the right risk at the right moment calculated on the spot can be what it takes to close the sale.  These candidates still have time to course correct or double down on their strides, and in the same way, an account is seldom awarded after an early high stakes encounter.  To internalize the impact of your efforts and incorporate that into a subsequent approach is to know you participated in the event rather than performed.  The real prize can still be up for grabs, which takes you back to the process, the cycle — preparation, extemporaneous interaction, authenticity, and strategic evaluation to reposition.

Landing an account of any size will never be the same as a Presidential Debate, but maybe with President Obama and Governor Romney at the podium fixed in your mind, your next high pressured sales call might be a tiny bit better.

by - 1 Comment

The Art and Science of Coaching

Most great athletes wouldn’t think of stepping into competition without a coach, both in practice running skill drills and on the sidelines during an event for strategy and encouragement.  Where you find a great business leader, there is often a similar proxy — a mentor helping guide them, either a current boss, a past boss, or a colleague who just cares enough to help.  When you want a coach and aren’t lucky enough to have a mentor, where can you turn?  Some have tried executive coaches, paid professionals hired to fill the role, sometimes successful, sometimes not.  Because I find the role of being a mentor the most satisfying aspect of my career, I have taken up an interest in coaching over the past few years and learned through experience some stuff worth sharing.

John Vercelli, with whom I teach the Executive Coaching Workshop at Coaches Training Institute, recently sent me an article from Human Resources Executive that largely captures why we created our new program.  The article, by Andrew R. McIlvaine, pretty much says everything I was intending to write in a post here, not the least of which is:

Too many executive coaches lack the business experience necessary to help clients.  But others say such experience isn’t necessary to effect real change — and in some cases, it may even be a hindrance.

John and I are somewhere in the middle (surprised, huh?).  We believe it is virtually impossible to be an executive coach if someone hasn’t developed empathy for the job of the executive.  Yet we also believe that just because someone has significant executive experience, that may not qualify them to be a world-class executive coach.

That’s why we decided to lead the Executive Coaching Workshop together, and are having a blast doing so.  John is a longtime member of the faculty at CTI and now serves as Director of Corporate Programs.  I have taken courses at CTI, but I am not a certified coach.   I have immense respect for the work of the coach, but that’s really John’s expertise as one of the senior curriculum designers for CTI.  My role in this program is to help prepare a new wave of coaches to step into the corporate arena by placing them in real world simulations that illustrate the weight of walking in an executive’s shoes.

We can no more substitute a lifetime of making business decisions in a few intense days of training than we can alter the personality of someone who doesn’t appreciate empathy to exhibit it.  What we can do is paint a picture of what high level business decision-making is like day-to-day as well as year to year, and how a good coach can add value to that decision-making by helping frame the context of situations as a resource and sounding board rather than an “answer machine.”  The combination of John’s co-active creativity and my goal oriented pragmatism — both tempered by true commitment to human potential and respect for the individual as well as the team — seems to be working.  Here are a few things we have learned in the initial trials:

1. Role-Playing Creates Memorable Models: When we take prospective executive coaches and load them up in exercises with the burdens of time bound goals, intense competition, market forces, unforgiving shareholders, management hierarchies, and corporate politics, they start to understand the client by becoming the client.  Of course this is no substitute for the reality of the client’s struggles, but it’s a good start down a path toward empathy.  If you have a little high-octane improv you want to try out, there’s nothing quite like giving your material a no-fault test run.

2. Intellectual Curiosity Can’t Be Faked: If you want to cheer people on, you need to be interested in what they do.  As obvious as it may sound, an expressed interest in business is prerequisite to being a recommended executive coach.  Reading the Wall Street Journal regularly, digging into corporate annual reports, subscribing to industry email newsletters, participating in webinars — all of these help to build a shared vocabulary around profit and loss, return on investment, and growth opportunities.  Where prospective executive coaches don’t find the subject matter naturally interesting, easy flowing dialogue is not easy.

3. It Takes a Toolkit: There is no single path to success for the executive, and there is surely no single connect-the-dots methodology for successful executive coaching.  The dynamics of today’s business environment are fierce and opaque, creating a landscape of ambiguity that has to be constantly reevaluated and balanced.  There is no reward without risk, and helping the executive to consider risk requires an establishment of trust and credibility that constantly has to be reinforced.  We believe empathy is possible through extrapolation of life experience, but thin analogies will only get you so far.  Experience and knowledge compound over time to broaden the context of dialogue, convincing us that process is your friend to the extent you have the personal resources to chart new paths under immense pressure.

How deep can organizations go with coaching?  A recent post in Psychology Today suggests that even a CEO can benefit strong from an executive coach, although building that level of trust and empathy is no small task.  The point is that everyone can benefit from a sounding board, and in a perfect world everyone would have one that embodies a level playing field of shared knowledge.  Since that business utopia is unlikely to emerge anytime soon, we think great executive coaches will be increasingly in demand, but like anything worth the money, the difference between good and great can be considerable.

The science of coaching is most likely to be revealed through improved business results, the scoreboard of performance upon which the client’s metrics will be formally evaluated.  The art of coaching may seem more abstract, as each coach will undoubtedly develop his or her own style for working with the client to achieve the anticipated metrics, but without concrete improvements in financials, style won’t much matter.  John and I believe you can’t have one without the other, and it is the integration of this vision that motivates us to help fill that toolkit.

by - 19 Comments

The Best of 75 Years

We just celebrated my father’s 75th birthday.  At dinner I asked him to note the most profound change he had seen in his lifetime, technology or otherwise.  I found his answer surprising, but not really.

Before the punchline, a little background and perspective.  Surely you can do the math in your head, but to be 75 now you had to be born after the full resolution of World War I, but before the full onset of World War II.  The United States was at peace, but not yet a Super Power.  There were no televisions in homes; radio dominated news and entertainment, respectively starring Edward R. Murrow and The Lone Ranger.  The suburbs as we know them had not really come into being, largely because our highway system was nascent.  Automobiles were becoming common, but with gasoline prices crossing a dime a gallon, middle class families got by with a single vehicle that was mostly for work commuting.  Flushing toilets were common in cities, but once you got out of cities, you could easily find yourself at a country home with a detached outhouse.  The stock market crash was still pretty fresh in people’s minds, and the Great Depression was not over.

What followed in the ensuing three-quarters of a century was nothing short of astonishing.  Adolf Hitler, a single individual of unimaginably maniacal influence, brought forth the Holocaust and World War II, ultimately defeated by an alliance that championed freedom and democracy as global standards.  We saw the invention of nuclear power and its expression in the form of a deployed atomic bomb, the first true weapon of mass destruction.  We saw the birth of Israel, the end of the British Empire, the birth of Social Security, and the end of the Great Depression.

In the United States we then experienced immense growth in our economy, reputation, and standard of living.  The Interstate Highway system connected our nation in all directions for easy travel and access.  Affordable single family homes in the suburbs became realities with the growth of tracts, sometimes referred to as Levittowns after their New York model in Nassau County.  Radio gave way to black and white television, initially dominated by local programming (a good deal of it arena wrestling), soon after dominated by coast to coast live network broadcasts, eventually in color.  Commercial air flight became real, first short hop prop planes with very cold cabins, then pressurized jetliners flying coast to coast in a quarter of a day (with decent free food even in coach).  McDonald’s offered the same hamburger at about the same price in almost every state, going to college became accessible to the middle class, and entry-level business jobs for big emerging brand factories like P&G, Kraft, and Pillsbury were plentiful.  There was Elvis, The Beatles, stereo cabinets for record collections, and revolving credit accessed via imprinted plastic cards to help pay for it all.

We fought a war with fighter jets over Korea and with Napalm in Vietnam.  We stockpiled ICBMs in an arms race with the Soviet Union — they beat us into manned space flight, we beat them into orbit and to the moon.  We saw personal computers take over our desks — first at work, then at home — and typewriters carted off to recycling.  We got cell phones initially the size of briefcases, then the size of candy bars.  We got 100 channels of cable TV, then 1000 channels of satellite TV.  We got the Internet.  We saw the dotcom bubble burst, then we got iPods, iPhones, and iPads.  ATMs and debit cards have almost replaced cash, we don’t really need stock brokers or travel agents anymore, and talking about organ transplants is only tempered by available donors.  Wal-Mart, Home Depot, and Amazon sell us pretty much everything we need at real-time comparable prices, and we can travel to Russia or China without any real restrictions.

It’s a brave new world.  It’s astonishing, truly astonishing, all that progress in one lifetime, a brilliant, beautiful lifetime still unfolding.

And yet none of that was Dad’s response to what had changed most.  We talked about all of it, late into the night, sometimes with a chuckle, sometimes with misty confusion about the timeline.  It was baffling how much he had seen, how vividly he could remember the primitive then, how normal the world around him with all its developments seemed now.

Yet with all that in mind, here’s what Dad thought had most changed — people’s acceptance of others.

Oh, that.

When Dad was a child, it just seemed so normal that most people stayed among people most like themselves.  Ethnic groups lived in ethnic neighborhoods.  People of the same color lived together, occasionally interacted in the workplace, but seldom mixed freely in bars or restaurants.  Social and cultural diversity were occasional topics of intelligent discussion, but in everyday life for most people were in terribly short supply.  Interracial and interreligious marriage was a very big deal, no matter where you lived — it happened, but it was not the norm.  When Dad traveled to and from Florida in the days before Rosa Parks, there really were separate drinking fountains, separate lunch counters, separate universities.  Jackie Robinson signed his minor league contract in 1945 and walked on the field with the Brooklyn Dodgers in 1947.  Separate but Equal was not ruled out by law until 1954.  That was change that really started the times a’ changing.

In 1960 John F. Kennedy became the first Catholic President of the United States.  Cesar Chavez co-founded what would become the UFW with Dolores Huerta in 1962.  In 1964 the first Asian American woman, Patsy Mink, was elected to Congress.  In 1965 the reverent Sandy Koufax declined the honor of pitching in the first game of the World Series because it coincided with the most sacred of Jewish holidays, Yom Kippur.  Jump forward to 2008 and the American people elected Barack Obama as President, on whose watch we quickly sent “don’t ask don’t tell” to the scrap heap of divisiveness.  None of these milestones went unacknowledged, but with each the comfort level of individuals to be among those of different backgrounds became increasingly more common, increasingly more a cultural norm.

I don’t think anyone today can call our work done, but look around and you will see a heck of a work in progress.  Our friends, our families, our colleagues, we are not uniform.  We have seen a parade of civil rights, religious rights, gender rights, human rights.  We are a blended society not because we are forced to be, but because it is wonderful and enjoyable and natural to do so.  To study and embrace that which is different from our own backgrounds is to celebrate diversity as a shared value that can never be taken for granted, but increasingly warrants less special attention as it becomes more is than isn’t — less lacking, more present.  That’s what Dad sees as most different from the days when it was not so, and hopefully what children today will never think twice about as they move through their next 75 years.

That’s good change, with a lot to do still ahead, but a world that looks different and Thinks Different because it is the very reflection of progress.  We mix, we share our heritage, we worry less how we are different, we worry more about our common bonds in humanity.

That was a birthday dinner worth remembering, a real lesson in progress for us younger folks, a message forever.

Thanks, Dad.  Once again, Happy 75th.  You remembered well.  You shared even better.

Live Together In Peace.

by - 3 Comments

Don’t Fear the Fad

As an investor, can you ever know for certain if that newfangled gizmo come to market is the real deal or a fad?

Let’s try it a different way—perhaps everything is a fad, until it’s proven otherwise.

Bread, most likely not a fad. But organic fair-market nine-grain soft crust, probably a fad.

Cars, probably not a fad. But eight-cylinder 130 mph muscle mobiles with no back seats could be a fad.

AM radio, possibly a fad, but one that has enjoyed a long shelf life—and now with news and sports retransmitted over the internet to mobile devices, probably a decent bit of runway left in the broadcast machine.

Farmville, Mafia Wars, and their brethren? You tell me.

Our attention spans are surely fickle, but just because something is a fad does not necessarily make it a bad investment. I am not certain internet keyword search will last forever, but the last decade and a half have proven pretty rewarding, at least for one company that currently commands better than 70% market share. Games? That’s where they come and go in a coughing breath—if you are going to bet at that crap table, come with a lot of chips and a jug of Pepto-Bismol.

The question of whether it makes sense to bet on a fad in a commercial, accelerated, low-loyalty, short-attention-span, vastly diverse, market-driven global economy seems moot. People have bet against railroads, phones, airlines, television, personal computers, and even guitar bands as fads—and that was before they had customers! Even after these “fads” had momentum, there were endless naysayers who said they were on their way out as fast as they’d found their way in. With that kind of outlook, eventually you have to be right, but you may be staring up at daisy roots when you finally win your bet.

There is tremendous Monday morning quarterbacking now about the dive in Web 2.0 companies, from Facebook to Zynga to Groupon to Pandora. Maybe they are all fads, but let’s separate the fad of stock market performance from the fad of consumer adoption as two separate issues. The shine may be off the stock, or the shine may be off the company’s products, but those are very different things. High-growth speculative stocks like these are most often valued on future earnings potential, not current performance, so if the stock is out of favor, that does not de facto mean the product or service has gone out of favor. Plenty of people are enjoying these consumables at the moment, though it is safe to say that they won’t all be in vogue for eternity. Styles change, tastes change, brand loyalties change. We know that to be Creative Destruction, an ever-present cycle, so when we criticize either an equity or a product as being a fad, let’s be careful to make the distinction, and even more careful not to level broad sweeping judgment that could lead to missed opportunity.

Can a company make money riding the wave of a fad? Seems to me that is more norm than anomaly. Can an investor make money owning the stock of a company that rides the wave of a fad without volatile exposure to market timing? Again this seems perfectly reasonable, depending on the window. Think Intel with micro-processing chips during the PC revolution, Electronic Arts with the rise of sports-based video games led by Madden NFL, and today’s True King of All Media, Apple. Equity markets in the long run reward smart risk and punish reckless risk, just as commercial markets reward desirable consumer offerings and reject cynical ones. There has to be risk for there to be reward or no one would invest, so the question is not whether something is a fad, but whether that fad represents some potential form of continuity recognized by visionary management as one in a string of ventures that together comprise opportunity.

Intel’s legendary former CEO Andy Grove clearly taught us, “Only the Paranoid Survive.” He knew at any strategic inflection point the difference between a fad and a trend was largely the expanse of the product life cycle. More importantly, he worried about management culture as the path to product culture, where innovation means never-ending creativity, not tossing the dice and getting lucky on a good roll. I don’t worry whether a company is profiting from a fad, I expect companies to be opportunistic. I worry whether the company is a one-trick pony, whether it has created a learning culture where success and failure are both studied. A company that has learned to learn, that can read data and understand how fads are perpetuated as trends that constitute periodically sustained disruptions—that is a company that can extract true shareholder value from a fad, foremost by surprising and delighting customers repeatedly with that which they never expected was possible.

I have a lot of criticism about this year’s poor performing new entries in the NASDAQ, but that criticism has nothing to do with whether those companies were beneficiaries of identified fads now assessed by pundits to be in decline. My own career has been the beneficiary of any number of fads that came and went—computer games that sold millions and now barely qualify as second round questions on Jeopardy, once immensely cool websites that scored millions of visits that no longer can be found, virtual communities that ranked with the best in loyalty and now would be lucky to make the card draw on Trivial Pursuit. Does that mean they weren’t good businesses that added significant value to their owners? To the contrary, in their useful lives they added exceptional shareholder value in earnings and lifetime contribution. We worked the brand promises as long as we could, but when their time was done, we moved on.

That’s why a sweeping statement like “don’t invest in fads” makes little sense, because if virtually everything is a fad with varying sustainability, there is no choice but to invest in fads. What I worry about is management vision, how the brand stewards of a company are migrating from one fad to the next, how maneuvering through Creative Destruction is an art and science unto itself. Edison did it over a very long period of time. So did Steve Jobs. The folks who run television networks have to do it, because no show lasts forever and formats are cyclical; yesterday’s Variety Shows are today’s Reality Shows, half-hour comedy goes in and out of style, so does one-hour drama. Walt Disney famously bet the ranch on 2D feature animation, clearly a fad, although one he created and that lasted more than 50 years—but that wasn’t the only trick he had in the magic shop, not even close. To invest wisely in the likelihood that originators can capitalize on a string of fads through creativity and experimentation is very different from investing in one hot rocket that goes straight up with full knowledge that gravity will send it back down with equal and opposite thrust.

As the contemplative George Harrison reminds us, All Things Must Pass. That doesn’t mean windows of opportunity aren’t always in abundance. Watch the fad-makers, not the fads themselves, and the game changes significantly. While even the best fad-makers can’t call winners forever, those longer windows leave plenty of room for upside, especially when you bet the full spectrum of an index rather than trying to call the hits in isolation. If you bet on a one-trick pony and lose your bait, that was most likely your mistake, not that you bet on a fad.