Category Archives: Business

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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.

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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.

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Learning from Mars

If you went to elementary school circa the 1960s, you remember that one of the few times TV was brought into the classroom—likely a dusty, early model, enormous 21-inch Zenith B&W CRT with bent rabbit ears, strapped to a prison issue, grey steel rolling wheel cart—was for the Apollo lift offs, splash downs, and moon walks. During those turbulent years of hard-won civil rights and compounding economic expansion, you might have dreamed about growing up to be the next Mick Jagger, but it is equally possible you aspired to have The Right Stuff and be the next Neil Armstrong.

The Space Race captured our imaginations. We watched in awe as the first boot imprint and an American flag were planted in the Sea of Tranquility. We lost sleep with the good people at Houston who had “a problem” bringing home Apollo 13. It was all so captivating, the science in our textbooks was made real, technology was cool, and the Warp Factors of Star Trek seemed someday plausible. I’m glad I got to experience that as a child—it made childhood more childlike and less childish. The Little Prince would have been proud.

Much has been written about the fall off in public enthusiasm for the space program after the tapering Apollo missions and the less grandiose but still near miraculous Space Shuttle missions. As we left The Cold War behind with the collapse of the Soviet Union, we came to worry less about controlling our Solar System. Satellites became our path to better television and radio entertainment, not so much a magic portal to the future as a manufactured bridge to enhanced convenience. It all became ordinary, and then expensive, a difficult pair to keep at the high-end of federal funding without public enthusiasm. We moved on, to the information age, to the PC revolution, to the wildly lucrative internet. NASA was scaled back year after year, and although we knew that wasn’t optimal, we were largely okay with it.

Too often we forget all the ancillary learning that occurred as part of space exploration—not just the nifty consumer products like cordless power tools and vastly improved athletic shoes, but the processes of working together in high function teams. Getting tonnage into and out of space safely has never been a job for individual heroes as much as it sets the tone for working together in groups, combining scientific work methods that emphasize cooperation, breaking down gigantic projects into manageable tasks. Engineering is a profession of shared ideas, where the accuracy of each single contribution matters immensely, but the compiled knowledge of all participants matters even more. We take so much of that kind of process for granted now when we bite off big chunks. I wonder if we take appropriate time to digest just what the process of doing the incredible really means.

As we took a brief intermission from the Games of the 30th Olympiad these past few weeks to observe the otherworldly, never before tried jet-softened hard landing on Mars, I was left pondering if perhaps we were being a bit too casual about the successful parachuting of the Curiosity Rover. No, there were no astronauts on board, and yes, we had landed on Mars before—but not this way, and not with a nuclear powered craft of such immense size and scale. I think everything that involves operating with precision at distances of this magnitude is astonishing, and no matter how clear the physics, we should celebrate with the geniuses at JPL and NASA anytime they pull off the near impossible. Getting to Mars and sending back data to Earth is not a little thing no matter how many times we do it.

This one left me thinking even further. In the midst of a floundering economy and awful recession, precisely the opposite of the Apollo climate, our national tech teams did more with less and made us proud. What were the business lessons, I wondered—more ancillary byproducts of this adventure in science—from which we can additionally benefit in learning by example? I am sure there are many, but three leap out for me:

  1. Difficult is Good.  Paraphrasing President Kennedy’s challenge to set an arbitrary deadline without a known roadmap, the Curiosity team chose their path not because it was easy, but because it was hard. This was wide-eyed enthusiasm for a mission about something other than personal gain. Want people to rally around a task? Give them something where they need each other, where failure is acceptable in concept, but not in approach. Big problems are always worth solving.
  2. Resilience is Rebound.  Here was a team that had just put the Shuttle in mothballs, experienced colossal layoffs, and had no choice but to accept for the immediate future that our astronauts would have to hitchhike across the galaxy in the form of renting seats from former competitors. They put this behind them by committing to the project at hand.
  3. Sharing Triumph is Personal.  How do you get a team fired up and motivated? Bypassing cynicism is a decent route. This mission was about proving what was possible, about intrinsic meaning as much as the survival of equipment. The Curiosity team built pride because they did something together they will forever share, advancing progress, continuing exploration. Often you forget the details of a project, but you don’t forget people who matter. This is where emotion has a clear role in that which is otherwise objective.

I hope enough people at home were paying attention, partly because the landing was worthy of our attention, but more because when you think about it in the abstract, there is more application than meets the eye. Getting out of this recession is no small task, and it won’t be our government who gets the job done. It will be teamwork, commitment, creativity, motivation, and entrepreneurial spirit. Our move forward will be economic, but satisfaction has come from more than that. It will be of the human spirit, with celebration in the process of innovation as well as getting some problems solved.

I like that they named the rover Curiosity. It’s a good, real world metaphor. It sings aspiration. It’s worthy of our attention, a form of pedagogy that really does come from another planet.

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A Little More on Loyalty

Following up my last post on the strange phenomenon of willing senior-level turnover, one of my colleagues suggested I expand on the following:

How do today’s companies inspire, and enact, loyalty within the shifting parameters and instabilities of the contemporary business world? This is the question that gnaws at me.

It really is a quandary in the world of “at-will employment.” Downsizing, right-sizing, presumed right-sizing, grading, rating, ranking, bottom 10% trimming (yuck!), all of these are the strident tools of Management Consulting—not to mention Fear and Loathing in the Workplace, to borrow from the late Hunter S. Thompson. But what are the tools of inspiration, engagement, and leadership for everyday folks?

Many of us remember the phrase Getting to Yes from the 1981 tome by Roger Fisher and William Ury about straightforward negotiation. Let’s try to eke out a pathway for Getting to Loyalty, or at least identify the mismatched needs that most open the door to conflict. Here’s the rub as I boil it down from my experiences—the priorities of individuals and companies in the hiring decision funnel are not necessarily aligned.

When I coach an individual on the job-changing decision, I ask him or her to focus on three core needs in the following order before pulling the trigger, those things that I think matter most in building a long-term career:

1) What you do—is the work itself compelling, satisfying for the sacrifices you will make, a set of diverse tasks that will lead to continual growth and learning?

2) Who you do it for—is your boss sane when it comes to managing authority, a reasonable mentor, and a decent leader?

3) How much will you be compensated—is it fair pay for what you produce, or would you be valued more highly elsewhere given conditions 1 & 2 are equal. Note that I put pay level in position 3 of 3, when it will almost always be the #1 tactic someone uses in trying to poach you. You are likely committing about half of your waking hours. Beware the trade, Mephistopheles.

In juxtaposition, here’s what I think most companies focus on in the final offer process, not necessarily thinking long-term, sometimes just filling a box with a warm body to knock down a set of tasks:

1) Are you competent—does the individual arrive with the necessary skills to do the job?

2) Are you affordable—will you create rather than consume value given how much you are paid?

3) Are you a culture fit—do your needs, work style, and world view remove or add friction to the work environment.

If you agree with those contrasting three points as a premise, you can see where loyalty can become an issue, because both sides don’t want the same thing, beginning with tenure and commitment. The individual is idealistic, human, fragile, creative, hungry, in search of self-realization and interpersonal relationships, emotional bonds that can be reciprocal. The company is pragmatic, an inorganic construct that is valued on metrics by objective third-party measures that are entirely unforgiving of missed opportunities in the form of creative destruction. Individual rewards can be intrinsic (good feelings) as well as extrinsic (take home pay), while corporations and their owners are rewarded on a much simpler scorecard by the optimized deployment of capital and management of risk, often avoiding complex human interplay in pursuit of a level playing field and legal fairness.

You can’t have a puzzle without puzzle pieces, but getting the puzzle pieces it fit in real-time is no small challenge. Hence the nuts and bolts that often don’t snap into place:

• You want interesting and fulfilling work. The company wants you to do what you have proven you do best. You may want to grow, they may want to pigeonhole you.

• You think you’re worth more. They want to pay you less, but more than that, not disturb the status quo for the pay grade into which you fit. If you get a raise, others will come asking, no matter how quiet you promise to be. Leaks are everywhere, because confidential knowledge exchange inside companies is a currency all its own.

• You want to be you, not wear a suit of conformity. They say they want out-of-the-box thinkers, but only if they play nicely. People are who they are, not who the company wants them to be. Both individuals and companies know they must change to survive, but naturally resist it. Creativity is not nice.

Starting to see the problem about how hard loyalty is on both sides of the equation? Now let’s think about some ways to close the gap. Let’s go outside the corporation for a proxy, to those we love rather than those beside whom we labor.

Any sense of loyalty within a family or among friends has less to do with a verbal pledge than it has to do with shared values. We don’t choose our families, but we choose our trust levels, often on the basis of belief sets. We do choose our friends, initially on the basis of common interests, but over periods of time those interests bridge to commonalities of caring. When values are shared and reinforced, bonding is enhanced, we have reason to heal more quickly from conflict. When values are misaligned, it is much less painful to sever a relationship, sometimes with notions or actions that can be punitive.

Values are not necessarily unique to people (and no, companies are not people, if you think that, you never worked for a real one). Too many companies state their values in their mission statement, then file it in Human Resources or post it somewhere obscure in the About Us or Recruiting sections of their website.

Believe it or not, some companies take their values very seriously. I have worked for companies where core values were a big deal and discussed all the time, and I have worked for those where they never came up except for copy approval in a brochure. You can often tell when you hear senior executives speak publicly about their companies, they lead by example and choose their words deliberately not for public relations, but for accurate representation of the company culture they champion. They know a company is just an artificial bureaucracy meant to produce profit, but they want it to be more and are willing to reach beyond the bounds of the normal to make that happen. If you don’t see a reflection of the values that matter to you in the vision of a company’s leading evangelists, I promise you it won’t get any better deeper in the organization.

Values—integrity, honesty, customer service, creativity, responsibility, intelligence, diversity, compassion, respect—can’t be faked. If a company treats its public image as a distinct entity from its actual operating behavior, turnover will be high. That might be okay for you if all you want is a paycheck for as long as it lasts, but just like a company cannot be something it is not, you cannot will it to be something it only pretends to be. You need to know what those values are, and whether they are words or realities. If you get a fit, there’s a chance that loyalty can happen. At the very least, the relationships you build will be more likely to follow you through your career than the accrued value of a pension.

A final word for now on values, loyalty, knowing when to stay and when to go—one of the first truly important maxims I learned in business was that given a choice, most employees don’t quit jobs, they quit bosses. Let’s end there.