Author Archive for AdvisorCatalyst

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The Power of Persistence

Monday, September 12th, 2011 by AdvisorCatalyst

In May 2009, I had the pleasure of attending a Maximum Impact simulcast, which included an interview with former British Prime Minister Tony Blair. In my notes from that interview, I wrote the following:

3 Qualities of People at the Top Level of Any Organization:

  1. Self-belief
  2. Hard worker
  3. Able to rise from failure

That last one caught my attention. Who has not failed at something? Whatever achievement one pursues, obstacles are as sure as the sun rising. How people respond to obstacles is what sets the great ones apart.

I think the key ingredient to rising from failure is persistence – the stubborn will to keep pressing. (Click here for my previous blog on “pressing the initiative.”) Great businesses respond to failure by following the advice from the old song: “pick yourself up, brush yourself off, and start all over again.” That’s good advice whether “starting over” means starting from scratch or just making a tweak. The point is to not stand idle. If you just keep churning with the best decisions you can make, odds are that your efforts will eventually bear fruit – and it’s likely that future yields won’t be as difficult as the first.

Ironically, failure is often just as likely to come from success – or more specifically, from resting in success. Pioneers such as Wang Labs, Alta Vista, and Rio’s MP3 player are largely unknown to us today, but the products they created live on in Hewlett Packard, Google, and Apple’s iPod. These pioneers died not because their products failed, but because they failed to persist in the efforts that make them successful in the first place. Their innovative competitors quickly passed them by and took over the market.

Whether you have succeeded or failed, you must persist in your endeavor to be great. There is no silver bullet. Great achievements result from hard work over the long term.

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In 100 Words: Two Perils of Success

Friday, August 5th, 2011 by AdvisorCatalyst

Success can lead to either overcautiousness or overconfidence.  Both are dangerous. 

Overcautiousness results in paranoia.  To avoid messing anything up, one chooses to ride the current wave of success.  Unfortunately, when the wave inevitably crests, he crashes with it.  Overconfidence results in blindness.  When an organization tries to succeed too quickly, it may be overcome by challenges larger than it can handle.  

Beware each of these perils.  Those tempted to sit still must find the courage to act!  Those tempted to ignore their weaknesses must face reality.  It’s not action, but action that separates the best from the rest.

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Depth and Breadth

Monday, July 25th, 2011 by AdvisorCatalyst

I once worked in a distribution business where the customer was the end consumer. Leaders in that business often said, “Depth equals profitability and breadth equals stability.”

By “depth equals profitability,” they meant that more volume delivered to an existing customer directly led to greater profitability. This makes sense, of course. Delivery efficiencies increase and selling costs are lower than when securing new customers.

If the saying had stopped there, however, the business would have been very vulnerable. If you focus entirely on selling more to existing customers, what happens if one of those customers suddenly stops doing business with you? Lack of diversification in revenue stream is a glaring risk for any business – particularly small ones. That is why “breadth equals stability.” Customer attrition will happen, so broadening your customer base is extremely important to improve your ability to survive it.

In short, the long-term health and stability of your business depends on a balance between depth (share of customer) and breadth (share of market).

This principle applies just as well for advisory businesses as anything else.

  • Depth = Profitability: The deeper your relationship with a client (the more you do for them), the more fees you can generate. Referrals are also more likely. Furthermore, greater knowledge of the client makes you more valuable to them, leading to efficiencies in delivery.
  • Breadth = Stability: The more clients you serve at one time, the more stable your revenue stream will be. A certain percentage of your clients will disengage at some point for one reason or another. The larger your client base, the less you will feel the consequences of losing a client.

There is definitely a trade-off between depth and breadth. The more time you invest in a client (depth), the fewer clients you are able to serve (breadth), and vice versa. Over time, you will want to increase both depth and breadth in order to build a vibrant advisory business.

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Press the Initiative

Thursday, June 23rd, 2011 by AdvisorCatalyst

At the October 2007 World Business Forum in New York, Garry Kasparov, the great world chess champion, noted that a player attacks in two ways. The first, “direct assault,” occurs when he is backed into a position he doesn’t like. Those who succeed are admired for their resilience and celebrated as a “come from behind” story. The second, which Kasparov called “creating and maintaining the initiative,” is preemptive in nature, putting the player in a position of leadership and control. It may lack the excitement of a surprise victory, but the persistent mastery is admired by all.

Many market leaders were not the original pioneers of their product. Examples include Boeing, Hewlett Packard, Google, and Apple’s iPod. In each of these situations, the market leaders outperformed the pioneers because they pressed the initiative. They continually improved, invested in people and research, and developed a strong organizational vision. Meanwhile, the pioneers lost an opportunity, not because they started badly, but because they stopped pressing.

How is your organization’s discipline in strategy execution? Create the initiative, and then keep pressing.

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In 100 Words: Press the Initiative

Thursday, June 23rd, 2011 by AdvisorCatalyst

World chess champion Garry Kasparov attacks in two ways: “direct assault” and “creating and maintaining the initiative.” The latter is preemptive, methodically putting the player in a position of leadership and control.

Many market leaders, including Boeing, Google, and Apple’s iPod, were not the pioneers of their industry. They simply outperformed the pioneers by pressing the initiative – continually improving, investing in people and research, and developing strong organizational vision. Meanwhile, the pioneers lost an opportunity, not because they started badly, but because they stopped pressing.

How is your organization’s discipline in strategy execution? Create the initiative, and then keep pressing.

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In 100 Words: Finding Passion in Your Work

Monday, May 2nd, 2011 by AdvisorCatalyst

Do you dream of doing work that you’re really passionate about? Perhaps the fastest way to realize that goal is to find passion in your current work.

Former Vitra CEO and current Board Chairman Rolf Fehlbaum: “I couldn’t have cared less about chairs, but once I started to get involved, I had the urge to get at the subject in the deepest possible way. I wasn’t born loving chairs; I learned to love them.”

Whatever work you do, dig in. The more you engage, the more passionate you will become. Such passion is a key ingredient of excellence…and fun.

“The [person] who does not work for the love of work but only for the money is not likely to make money nor find much fun in life.” (Charles M. Schwab)

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Is CEO Experience Required To Be an Advisor?

Wednesday, April 6th, 2011 by AdvisorCatalyst

Question:
I have a lot of experience with leading strategy execution as a strong #2, but I have never been a CEO. Do I need to have been a CEO to make a career of advising other CEOs?

Answer:
No, you do not need to have been a CEO to make a successful career of advising other CEOs. The current group of CEO Advantage advisors includes both those who have been CEOs and those who have not. I actually belong to the latter group, and I have been advising CEOs and executive teams for more than a decade. Certainly, CEO experience is beneficial to being an advisor, but it is not an absolute requirement.

What is important experience for an advisor?

  • Executive-level experience at a midsize or larger organization
  • Familiarity with how the different aspects of business work together (deep knowledge of each area – strategy, marketing, sales, operations, administration, financial, human resources, etc. – is not required).
  • Leading teams and coaching individuals
  • Speaking to groups

You should be able to find success in advising clients by combining these experiences with:

  1. a good process for client delivery,
  2. some additional skills such as listening, asking good questions, business development, etc., and
  3. the right attitude (strong will, work ethic, willingness to learn, humility, etc.).

In sports, we often see that great players don’t necessarily make great coaches, and not all great coaches were great players. Similarly, not all CEOs make great advisors, and not all great advisors to CEOs have been CEOs themselves. In fact, some former CEOs struggle to advise rather than just make decisions for their clients.

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In 100 Words: Time to Reflect

Wednesday, December 15th, 2010 by AdvisorCatalyst

The end of the year is a natural time to pause and reflect – both as individuals and as organizations. Yet, many don’t take full advantage of the opportunity.

Reflection is slightly different than real-time course correction; it’s a conscious effort to identify the gaps between plans and reality. Did you meet your goals? If not, why not? What factors define your current environment? Which of your assumptions are no longer valid? What do you need to do differently?

Give yourself a dose of reality and let it drive your actions in the coming year…until it’s time to reflect again.

“However beautiful the strategy, you should occasionally look at the results.”
(Winston Churchill)

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In 100 Words: Strategic Retreat? More Like Strategic Advance.

Monday, November 1st, 2010 by AdvisorCatalyst

This is the time for annual planning sessions, and many business leaders are pulling their teams together for a strategic retreat. But why do we call it a retreat? Retreat is a negative word synonymous with withdraw, relinquish, and concede. Is that your frame of mind as your organization plans the coming year? I don’t think so.

Forget the retreat. Lead your organization on a strategic advance. Plan how to advance your purpose and achieve your goals. Assess your current position, identify the target, and push forward. That’s what you really hope to do, so call it what it is.

“There are risks and costs to a program of action. But they are far less than the long-range risks and costs of comfortable inaction.” (John F. Kennedy)

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In 100 Words: Don’t Buy Answers. Build Disciplines.

Friday, September 17th, 2010 by AdvisorCatalyst

During times of significant change, leaders are often tempted to “buy answers.” It’s the search for the proverbial “silver bullet.”

Resist this temptation. Don’t outsource your thinking to someone else. You know your organization and industry better than any outsider, so you probably already know what you need to do. Instead, invest in building the right disciplines. It might seem more difficult at first, but in the long run, you will reap the rewards of an organization that systematically generates its own solutions.

Silver bullets don’t exist. The best long-term investment of your resources is in building the right disciplines.

“There are no easy answers, but there are simple answers.” (Ronald Reagan )

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