"Winning During the Slog. Part 3 - 'Adapt' is New Thinking"

(from Issues for Growth Vol. 19, No. 15)

This is the third of a series of articles about how companies and individuals are winning during the “The Long, Slow, Hard Economic Slog” that we are in (Issues for Growth Vol. 19, No.13). This article is written by Chris Carosella who works with The Mead Consulting Group. –DPM

" Adapt or perish, now as ever, is nature's inexorable imperative" - H.G. Wells

“Learning how to adapt is the #1 reason I had a successful career,” was the response from a CEO to a question about achievement. The CEO’s early career included eleven years with a Fortune 100 company where she had a rapid ascent from a sales account executive to a senior vice president. Every promotion brought relocation to a new city, huge challenges in functional areas where she had little or no experience, more skeptical people to manage who didn’t want to change the way they were doing their work, and the opportunity to prove that success was about a focus on achieving results.

What do you mean by “adapt?”

The follow up question of “what do you mean by adapt?” led to a detailed explanation. “I was recruited to a company that had just been acquired by a global powerhouse with a demand of each business being a top market share company with 20% growth every year. That meant the company needed to change just about everything they had been doing including how they gain the right customers, how fast they could go from #7 in market share to #1 or #2, how processes could be improved, how employees were compensated, and how talent was recruited and retained. Since they had been through change leadership programs countless times, the last thing they needed was another one. No one wants to change because it implies they are currently wrong in some way.”

“How is ‘adapt’ different from ‘change?”

“Employees responded to adapting because it was continuous as opposed to annual change programs led by ‘special’ change leaders. You can debate the semantics but the actions are different. Everyone was taught how to adapt to possible scenarios and to make decisions, improve processes, and collaborate across functional lines to achieve results that kept the company ahead of the competition while serving their customers. An adaptive environment means all employees are accountable in a culture of achievement.”

Adapting encourages a sense of freedom.

“Adapting, continued the CEO, “is that it encourages a sense of freedom as opposed to change constraints. When it’s continuous and part of the culture, adapting means employees innovate more, make faster decisions, and focus on key metrics tied to company success.”

We need to change the way we think about our own businesses.

Changing the way we think about business is the lesson to be learned from this CEO. The CEO understood that the business would only achieve desired results if people embrace the freedom of adapting versus the fear of changing. Using her own experience of always facing new people, new duties and new challenges, the CEO was able to identify critical success factors:

· Start assessing the situation immediately. Don’t just wait to see what happens.

· Ask a lot of questions. Don’t be afraid to learn.

· Trust your instincts. Support them through unsolicited feedback.

· Don’t talk about the need to change everything. If you do, be prepared for fear to set in.

· Do talk about how companies evolve, innovate, and adapt.

· Solicit feedback for new ideas.

· Be clear about what you want.

· Define “adapting” for your company. Communicate and teach.

· Build a culture of “do it now” with an appropriate sense of urgency in getting things done.

· Create an attitude of achievement throughout the company.

· Don’t manage. Lead.

· Execute. Measure. Reward. Repeat.

The nature of work today can be desperate.

The nature of work today can be desperate – on the negative side there are layoffs, recession, companies closing, banks failing; on the positive side opportunities are available for a much shorter time. There’s no time to wait! We must learn how to adapt to this new economy. That means changing the way you think about your own company. The old way is to wait for something negative to happen and then decide to implement a change program. The new way is to create an adaptive culture so that all employees are continuously adapting their strategies and tactics to every possible challenge.

Your success depends on results!

Your success depends on achieving the desired results for your company. Companies are recognizing that, in order to succeed during “the slog,” the current and future economic environment calls for a dramatic difference. RapidAdaptÔ is the recommendation for your success. Adapt means to Accelerate Decisions Attitudes and Processes in Time so that you can stay ahead of competitive, client, and company challenges. The purpose of RapidAdaptÔ is to help you develop the ability to constantly adapt strategies and tactics in order to create a sustainable company. It’s not just a strategy process because it teaches employees how to create an adapting culture with a sense of urgency instead of complacency. That, in turn, creates a continuous learning culture with accountability at all levels of the company.

George Bernard Shaw said, “The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends upon the unreasonable man.”

Some companies are experiencing significant “new thinking” results. What are you doing to change how you think about your business and create a culture of adaptability? Post or email us your comments

Which Do You Have – a Lifestyle Business or an Equity Value Business? It’s Important to Know the Difference

(from Issues for Growth Vol.19, No. 12)

In speaking to a group of business owners recently about defining their business vision, I suggested that they be clear about whether they want an "equity value business" or a "lifestyle business", because the way they approach building a business must be very different depending on how they will define success.

The Lifestyle Business. The term “lifestyle entrepreneur” was coined in 1987 by William Wetzel, a director emeritus of the Center for Venture Research at the University of New Hampshire. Mr. Wetzel was using it then to describe ventures unlikely to generate economic returns robust enough to interest outside investors. In financial jargon, “there's no upside potential for creating wealth," he explains.

"Lifestyle ventures are usually ventures that are run by people who like being their own bosses," Wetzel says. "But they're in it for the income as well. Indeed, lifestyle entrepreneurs offer a different...view of success than those who are mainly focused on longer-term wealth accumulation.

Lifestyle businesses are businesses that are set up and run by their founders primarily with the aim of sustaining a particular level of income and little more; or to provide a foundation from which to enjoy a particular lifestyle. Some types of enterprises are more accessible than others to the would-be lifestyle business person. Those requiring extensive capital are difficult to launch and sustain on a lifestyle basis; others such as small “creative” businesses are more practical for sole practitioners or small groups such as husband-and-wife teams.

Lifestyle businesses typically have limited scalability and potential for growth. In conventional business terms, lifestyle businesses typically have limited scalability and potential for growth because such growth would impair the lifestyle for which their owner-managers set them up. However, a lifestyle business can and do win awards and provide satisfaction to its owners and customers. These are firms that depend heavily on founder skills, personality, energy, and contacts. Often their founders create them to exercise personal talent or skills, achieve a flexible schedule, work with other family members, remain in a desired geographic area, or simply to express themselves. But without the founder’s deep personal involvement, such businesses are likely to, well, founder. Professional investors therefore rarely get involved with lifestyle businesses. A lifestyle business is also one that can allow the owner to call his/her own shots and to move at his/her own pace. It’s a business that fits his/her current way of living rather than dictating how things ought to be done. For millions of people, these sorts of small ventures are an excellent way to “do what you love.”

The Equity or Value Business. Equity can be defined as: A company's assets, less its liabilities, which are the property of the owner or shareholders. Popularly, equities are stocks and shares which do not pay interest at fixed rates but pay dividends based on the company's performance. The value of equities tends to rise over the long term, but in the short term they are a risk investment because prices can fall as well as rise.

An equity or value business is one where the owner intends to build real assets with a grow-able, tangible value that can be bought and sold - either as shares or the entire business. Success would be defined as the increase in value of the business over time. These businesses by definition will be built to succeed without the presence of the owner(s). In many cases, current lifestyle of the founder/owner is sacrificed in order to build significant long term value. In equity value businesses, owners focus more on building value as seen by potential buyers: sustained improvements in revenue/EBITDA, strong management team that can operate and grow the business without the owner’s constant involvement,

By contrast, a lifestyle business is one where the entrepreneur seeks to generate an "adequate" income while living where s/he wants, doing what s/he loves, or having the flexibility to be around when the kids or grandkids come home from school or take long weekends in the winter to go skiing. Success would be defined as an increase in satisfaction with one's life over time.

It’s imperative to decide which one you are. These are very different scenarios. "Equity value or lifestyle" is one of those fundamental decisions you should make early in your company’s history. If you're contemplating going into business with a partner, determine if you both would answer the same way. So why is it important to decide? Businesses that do not have a clear understanding of the type of business they want – and are prepared to be suffer inferior returns. Going down a path that straddles both lifestyle and equity value camps is sure to generate both lower current cash (compensation for the owners) as well as lower growth and value potential (lower equity value). Be honest with yourself about your appetite for risk, your need for autonomy, your desire for current compensation.

In the end, neither is good or bad. It's just, which one is for you?