5 Ego Traps You Need to Avoid as a Leader

One of the most common challenges for growing leaders is their ego. Here are five traps to avoid if you want to achieve ongoing success.

One of the most common problems I see with companies that have had a strong run of growth and success, is the mindset of the leadership team. Young teams who have done well will often become headstrong and overconfident. And while it's critical to have a strong, healthy ego, an overdeveloped ego can quickly limit the growth of the leadership team and the company overall. 

Healthy egos are confident and act decisively because they know what is needed to be an effective leader. They also know that their power doesn't come from the fact that they are always right or have expansive power over outcomes. Rather they have a good awareness about their natural limitations of their knowledge and influence and know-how to act accordingly.

When assessing a leader's ego, I look for some common thinking traps that tell me they may have an overdeveloped sense of self and their power that will limit their future growth. Here are some of the most common, so you can look at your own thinking and see if you might need to readjust your perspective to reach the next level.

"I'm important because I'm needed."

Everyone wants to feel needed. It gives you a sense of belonging and attachment to other people. In leadership however, it typically means that you have some type of control or power.

Strong leaders work to make themselves obsolete so their people are self-sufficient. This allows them to go on to tackle bigger and better problems. Weak leaders hold on to control and decision-making so they remain critical to the current processes. And while it may give them job security, it will limit their professional growth.

"People look up to me because I'm smart."

I work with a lot of CEOs who are off-the-charts smart. Some are exceptional technologists, creative marketers, master negotiators, even brilliant surgeons. They have excelled in their fields to become the best.

The problem is that if their ego and self-worth is built on being really smart, then they will be less likely to hire people much smarter than them in the key domains of the business. Strong leaders know they need to surround themselves with people smarter than them in key domains. Weak leaders surround themselves with people they can outwit and control.

"It's bad if I make a mistake."

Many leaders have advanced quickly in their roles by being really good at what they do and being right the vast majority of the time. This builds a sense of self-worth based on being correct. The challenge with this is that when you move up into higher levels of leadership there is a vast amount of uncertainty.

Strong leaders know how to gather data, quantify risk, and make critical decisions at the right time knowing they will be wrong at times. Weak leaders belabor decisions or spend too much energy trying to squeeze out all uncertainty thus missing opportunities and wasting resources.

"I can never show doubt."

Unfortunately, in many corporate environments, doubt is seen as weakness. While there is a time and place where decisions need to be made quickly and clearly, most business matters don't need to be solved immediately.

Strong leaders know that expressing their own doubts or conflicted thinking will make it okay for the people around them to present different ideas and opinions that can lead to better discussion and solutions. Weak leaders try to put on a convincing face, even when inside they are not so sure.

"I need to win all the time."

One of the clearest tell-tale signs of a struggling leader is when they strive to win every debate with their teams. The better ones treat every discussion as a high school debate, attacking everyone's points and presenting a litany of reasons on why their approach is better.

The worse ones dive into ad hominem attacks on people's characters and dredge up things from the past to undermine their positions. Strong leaders strive for the best decision the entire team will support, even if it's not theirs or the one they really want. Weak leaders keep a running score and look to win arguments.

No leader is perfect and every leader will fall into one or more of these traps time and again. Being open to feedback from your team and using a coach who can observe and give you pointers are great ways to accelerate the process. Strong leaders know that the trick is realizing that you've fallen into one and quickly getting out of it. 

Strategy Is More Than Just Setting Goals

While goal setting is important, it doesn't define your strategy.

One of my favorite aspects of being a business coach is working with leadership teams on strategy development. Strategy defines how you will approach the market and differentiate yourself. Without a clear strategy, you will be dependent on trends and the forces of your market.

Unfortunately, many people confuse setting a goal with having a strategy. A goal is a target you want to hit. For example, become a $100 million dollar company or make the Inc. 5000 list. A strategy is how you're doing to do that. It defines the set of choices and moves that you're going to make over a period of time to achieve that goal.

Here are the three basic steps for developing your strategic direction and plan.

1. Make predictions about the future.

The first thing you need to do in any strategic planning effort is to predict future trends. The key here is to be able to read the current market, industry, and macro trends that are at play and extrapolate them into the future.

I typically start with the immediate market trends that our company sees based on the work we are doing with current customers. By identifying what is impacting our customers' businesses, we can determine what is going to impact our business by servicing them.

Next, look at broader industry trends that are changing the nature of how your type of business is conducted. This could be changes in technology, regulations, market saturation, and increasing or decreasing demands. For example, I work with many companies in the cannabis industry and the pending change in federal legalization will have a major impact on how they conduct business as well as the industry as a whole.

Finally, we map out general macro trends. This includes changes to the economy, interest rates, and social and cultural fads and events. These types of trends will affect all businesses over time. For example, the trend toward using mobile devices rather than desktop computers has impacted just about every aspect of our culture. 

2. Decide on a key set of moves.

Once you have your market assessment, you can start developing your key moves. Essentially, these are the ways you are going to respond to the pending changes in the market that will put you in the best position for your business and your customers.

When Wayne Gretzky was asked what made him such a good hockey player, he famously replied that he didn't chase the puck. Instead, he figured out where the puck was going to be and he skated there before anyone else. He read the situation and positioned himself to make the right play.

Too many companies just chase the puck. Like Wayne Gretzky did when playing hockey, your company will anticipate what is next in order to make the moves needed to succeed.

3. Define your critical capabilities and policies.

Once you have planned your moves, you need to define the capabilities and policies that will allow you to implement those moves. These are the core capabilities you need to develop and the actions you are going to take, and, more importantly, the actions you are not going to take.

For example, if you are going to move upmarket and serve a higher-end client, you may need to develop leads through a different channel, improve your customer service, adjust your pricing models, or change your qualification processes.

I like to work with companies to develop a twelve quarter roadmap that prioritizes what needs to happen each three-month period over the course of three years. We set targets for each period for the key metrics of the business. This includes revenue and cash on hand, but it also includes factors like leads, pipeline, production units, clients, and people. The goal is to set a clear picture of what the company will look like at each step.

Once that is mapped out, we then look at the projects and tasks that need to be completed each quarter to make the new strategy relative. This includes all of the milestones for the capabilities and policies defined in step three. This sets clear goals for implementing strategy on a quarter-by-quarter basis.

This last step is what most companies miss. They come up with a brilliant strategy, but fail to create a realistic plan for how to implement it. By setting quarterly targets and milestones, you have a perfect tool for driving your quarterly planning process.

Of course, like all well-laid plans, things will change. But with a clear set of predictions, moves, and key capabilities defined, you can quickly update your strategic model and decide how you are going to respond and what needs to change.

Most org charts are wrong. Here’s why

Most organizational charts end up taped to break room walls and forgotten. Here's how to make yours a valuable tool for everyone in your company.

Every employee manual I've seen contains an organizational chart that shows who is in charge and who reports to whom. Usually, the names of executive employees and managers are in boxes with connectors cascading down to the front lines of the organization.

Many of those charts are out of date. There may be names that have changed or reporting lines that are no longer relevant. There could even be entire departments that have been removed or added.

The problem with these charts is that they are trying to capture the wrong information and are not being used correctly. Here are six things that I focus on when coaching leadership teams on creating organizational charts in order to make them a useful and productive tool for everyone in the company.

1. Focus on functions.

The main purpose of an organizational chart is to show the functional divisions of a company and how they work together. Your organizational chart is a map for how to navigate your business. A good chart will tell employees who needs to be aware of specific issues and information.

At a basic level, a good chart shows the vertical divisions between departmental functions and horizontal levels of reporting and management structure. An organizational chart will clarify questions like "is shipping part of operations or customer service?" and "do the software developers report to head of product or head of technology?"

Done well, a chart should clearly indicate who is on the executive team, who the middle managers are, and who is handling the front line execution.

2. Ditch the names.

I always suggest to erase all of the names on the chart. It is more important to see the functional roles and how they report and relate to one another. Names change quickly, but roles do not.

If you prefer to use names, make a separate table listing names and contact information by role or put the name in small print under the functional role. I suggest you include a phone number or email and the date they took on the role. Pro tip: it is great to see a history of the roles a person has filled and when they began each.

3. Support the business.

A well-designed organization and well-written organizational chart should show how the employees support the business operations. The departments and role names should relate to the nature of the business and operational model. 

For example, a manufacturer will have departments and roles in supply management, manufacturing, facilities, and shipping. A technology SAS company will have marketing, product design, software development, and dev-ops. Don't just copy a generic organizational chart from a textbook. It is important to design one that truly supports your business model and operations.

4. Indicate performance metrics.

I like to add performance metrics to each of the key roles in an organizational chart. I look at one to three of the core measures of success and suggest one leading indicator and one lagging indicator. The leading indicator measures the activities and tasks and the lagging indicator measures the outputs and outcomes.

For example, for a Director of Sales, I will list metrics such as pitch meetings or proposals for leading indicators, and metrics such as conversion rates and closed sales dollars per week as indicators of output.

5. Align your core processes.

In addition to functional divisions between departments, you can also map out your core processes across the horizontal access and indicate who is accountable and involved in each process. The goal here is to recognize that some processes cut across the functional division of the company and someone needs to be responsible for aligning and coordinating activities to ensure the process is successful.

Safety is a great example of a cross-cutting process. HR must ensure people are trained properly, facilities need to make sure that the physical environment is safe, and operations must ensure that safety measures are backed into the standard operating procedures.

6. Define your terms.

Your organizational chart is a map of your business. It is a tool that any employee can use to learn who to go to with questions, key information, and concerns. In order to do this well, people need to use the same language to refer to roles and departments.

For example, if some people call it lead generation and others call it marketing it will get confusing. Also, you want to make sure that your titles are consistent between departments. Don't label someone as director of product development and call them sales director in another department.

These suggestions will help make your organizational chart a living, breathing tool for helping people understand and manage the company structure. Most importantly, keep your organizational chart updated frequently and make sure everyone has access to the most current version.

6 Ways to Run Productive Meetings Employees Actually Want to Go To

Running longer meetings that focus on bigger-picture topics requires more than just a simple agenda.

As a business coach, I spend most of my days running full-day or even multi-day strategic planning sessions for CEOs and their leadership teams. Over the years, I've learned that how I run these meetings is just as important-- if not more important-- as what's on the agenda.

When you are running long meetings that require participants to think deeply and collaborate closely with one another, these facilitation techniques can create a larger impact and get better outcomes.

1. Use a collaborative learning mindset.

First and foremost, take a collaborative learning approach to the meeting. You might have a solid plan and a strong idea of what you want to accomplish, how you want to structure things, and the desired outcomes, but you also need to give the participants a role and a say in these decisions.

This is not to say that you don't need an agenda. I strongly suggest an agenda but don't be overly attached to it. If issues arise that need to take priority or the team comes up with an alternative way of addressing an issue, be open to suggestions and willing to make adjustments.

2. Agree to the meeting goals.

I always start meetings with presenting a clear set of desired outcomes. I keep it simple and focus on three to five key points. These could be decisions, plans, directions, clarifications, or action items.

The point here is to set your targets. It also helps to make sure everyone has the same expectations. I sometimes start this discussion by asking what they want to get out of the meeting before I present my agenda just to make sure we are all on the same page.

3. Create the right context.

Context is everything for these types of meetings. If you want people to think long-term and big picture, you need to get them out of the day-to-day mindset. I typically hold strategic meetings off-site so that people are less likely to be interrupted. Even being on a different floor of the same building is helpful in eliminating possible disruptions.

You also need to shift their mindset. I start meetings with a mind sweep to clear their thinking so they are open to new ideas. I also start with fun team exercises to make them aware of how they are communicating and interacting as a team.

4. Engage people in the work.

When I first started facilitating these types of meetings, I ran myself ragged writing on whiteboards, capturing notes, and moving flip chart sheets around. I was working up a sweat and everyone else was just sitting in their chairs. I thought that I needed to be doing all of the work in order to be a valuable facilitator.

I now know that it's the opposite. I assign roles for the meeting and make them do the work. They write on the flip charts themselves, I designate a scribe to take notes, and I even assign someone to be a DJ to play music during breakout sessions. This keeps them engaged and moving around and it allows me to focus on observing the team dynamics and tracking the overall agenda.

5. Manage the team's energy.

One of the main issues with full-day or multi-day meetings is managing the level of energy in the room. Mental focus and blood sugar level will wax and wane dramatically throughout the day. It is important to keep the energy high and avoid running into ruts.

I like to start mornings and afternoons with a physical exercise. Anything that gets people out of their chairs and moving around is helpful. For example, I will ask people to stand around a flipchart to discuss rather than sit in their seats. You can also create exercises that get people moving around the room or even do breakout sessions outside so people can walk around. The idea is to keep them moving.

6. Land the meeting.

Closing these meetings well is key. Leave yourself plenty of time to wrap up and discuss what you've accomplished and explain what the next steps are. I typically close meetings by asking each person to summarize their key takeaways and their action items coming out of the meeting.

I also like to get people to reflect on the meeting and explain what they liked best and what they might change. This helps them remember everything we accomplished and gives me valuable feedback for future meetings.

Over time, you will develop your own techniques and tricks for meetings. You do need a solid agenda and well-designed exercises, but valuable meetings have a well-managed arc with a clear beginning, middle, and end. Mastering this art of meeting facilitation will enable everyone to address topics more deeply, think more strategically, and provide a more valuable outcome for the participants.

Managing People Is Tough. This One Weekly Meeting Makes It Easier

One of the most common bottlenecks to early-stage company growth is the lack of management skills. This weekly meeting will up your game.

As a strategy and leadership coach, I spend a lot of time with CEOs and leadership teams developing their strategy and planning for the company's future. Long term success doesn't happen without a clear market positioning and roadmap for implementing key activities to drive success.

However, all of that work can be undermined by a lack of core management skills on the senior team. And, unfortunately, it's not uncommon for a rapidly growing company to outstrip these skills in early-stage businesses.

Any strategy growth plan must also include a plan for improving the skills of senior management, including the CEO and their leadership team.

I start by helping senior executives build a team and delegate work. The key to that process is to establish a weekly meeting with each direct report so they can keep priorities aligned and assignments on track.

Done right, this meeting should last from 30 to 60 minutes and the executive should do less than 20 percent of the talking. Instead, I advise them to ask the following key questions to make sure work is progressing correctly. 

1. What were your goals last week?

Start by reviewing what the previous weekly plan and commitments were. Check your notes to confirm and clarify any discrepancies. One of your key duties as a manager is to hold your reports accountable.

2. What did you accomplish last week?

Once you confirm what the goals were, start with what was actually accomplished. Focus on details and demonstrable proof that work was completely finished.

Don't accept almost done or 90 percent complete. If it's not fully and observably finished, don't count it. This will establish the habit of well-defined work and goals with clear completion criteria.

3. What did you miss?

Once you've reviewed and agreed to the completed work, review and clarify what wasn't finished. Keep it neutral and objective. Don't shame or admonish. Doing so would make them less likely to be forthcoming in the future.

4. What did you learn?

Once you have accounted for all of the work that was planned, you can begin to review and develop insights from the last week. Have them do the analysis and ask probing questions to tease out insights.

It is much more powerful for them to see problem areas for themselves. I will wait for many minutes, sometimes even a meeting or two, before suggesting an insight. Be patient with this process.

5. What are your priorities for the coming week?

Once you've reviewed the previous week, you can clarify the key priorities for the coming week. This is your chance to make sure they are aligned with your priorities and your other direct reports. Make adjustments as needed to set the right course.

6. What is your plan for the coming week?

Now you can develop your action plan. What work, activities, deliverables, and tasks are they focusing on? Get specific commitments with clear success and completion criteria. Ask questions to clarify how you will know that the work is done at the end of the week.

7. What could prevent you from being successful?

Find out what risks and obstacles they have considered. Are they being overly optimistic? Do they have a reasonable workload? Are they thinking through all of the dependencies?

Train them to anticipate issues and remove any likely excuses that might come up during the next meeting. This is a good time to check if they are applying their learnings from previous weeks.

8. Where do you need support?

Once they have a solid plan and clear objectives, ask them what support they need from other members of the team and other parts of the company. Make sure they have a plan for getting that support and that it is reasonable and realistic.

9. How can I best help you?

Lastly, ask them what you, personally, can do to help them. Maybe they would benefit from a check-in meeting or an introduction to key resources in the company or advice on how to approach a task.

There are two important rules on this last one.

First, don't carry their water. They need to be responsible and do the work. You can assist, but don't get stuck in a reverse delegation.

Second, if you agree to do something, do it. Nothing is worse than a boss who promises to help and doesn't. It would be better to say you're too busy or suggest someone else than to promise and not deliver. It would undermine your ability to hold them accountable in the future.

While there are many other aspects to being a good manager, getting the weekly meeting right is a key component to an effective manager's system. Leadership teams who get this right will leverage their team's capacity and scale their business faster and easier.

Uncertainty Is Everywhere in Leadership Decisions. Here's How to Handle It.

Every business decision involves an element of uncertainty. Here's how your team can wrangle it in to make better decisions.

Making decisions is a core part of any team's job, but for the top leadership team, it is their most important activity. They set the direction of the company by choosing key priorities and establish how work will get done by defining policies and operational processes.

The hard part is that they need to make these decisions with imperfect information and estimates about what the future might hold. Variability and external factors can make choosing the right path extremely difficult.

Unfortunately, many teams struggle with these uncertainties. They either ignore them and press forward with wanton disregard for the risk they are exposing themselves to or they decide not to make any decision at all, which causes them to miss key strategic opportunities.

Effective teams openly discuss uncertainty and work to quantify and reduce it where possible. They know they need to take action and can make calculated trade-offs between risk and reward.

When discussing options, they use the following strategies to get information and increase their level of confidence so they can effectively process that information and make good choices.

1. Don't poison the well.

When discussing estimates or likelihoods, the first rule is to not blurt out your guess. This creates a psychological effect where everyone else now has to answer in relation to the first guess. As a result, other people will unconsciously adjust their guesses and prevent the team from getting a true range of estimates.

2. Clarify the question and goal.

It is important to make sure everyone understands the specifics of what is being discussed. Does the budget include labor costs or just materials? Are we assuming stock items or custom designs? Does the deadline mean when we ship or when the customer receives the product? Starting with these types of clarifying questions will ensure you are all on the same page.

3. Give individuals time to think.

Many teams rush right into making guesses. Instead, set a timer and give people a few minutes to collect their thoughts and consider options. You can't effectively listen and think at the same time, so create some quiet time without conversation.

4. Have people write down estimates.

Before starting the discussion, have everyone write down their estimates, key assumptions, and rationale. By writing everything down they will be less likely to be influenced by the conversation and more open to sharing their ideas, important information, and perspective.

5. Focus on the boundaries and limits.

Instead of trying to get the exact right number, talk in terms of ranges and confidence levels. For example, what is the likelihood that the project will take less than 16 weeks or more than 24 weeks? Talking in terms of specific dates will lull the team into a false sense of precision. 

6. Explain logic and assumptions.

Often, it is the underlying assumption and logic in an estimate that is more important than the number itself. If one person has a high number, ask why and what lead them to that result. They may have identified a risk or task that others missed.

7. Strive for 80 percent agreement.

You will rarely be 100 percent in agreement on tough problems. And typically, the cost of trying to get consensus is extremely high in terms of time and team morale. Instead, shoot for around 80 percent agreement on the numbers and make your decision accordingly. While you might be off once and awhile, your ability to make many decisions more efficiently will more than make up for it.

Decisions come in many shapes and forms, but a good team uses the same, well-honed processes and heuristics to get through them effectively. For leadership teams, this is a critical skill to develop and can mean the difference between being a leader in the market and struggling to stay afloat.

Picking the Right Business Coach Depends on Your Needs, Situation, and Goals

Coaching is a great way to accelerate progress on your goals and make the process easier.

I've been on both sides of the challenge of finding a business coach. As a founder and CEO of an Inc 500 technology consulting firm, I've hired several coaches to help me with leadership and strategy.

On the other hand, as an athlete, I've hired coaches to help me with conditioning and skill development. I even hired a coach to help with my divorce. After I sold my company in 2013, I became a full-time strategic coach myself. I've worked with dozens of teams and well over 100 business leaders over the years.

While coaching can speed up how quickly you make progress on your goals and can reduce the likelihood of missteps, it is not an easy decision to make. There are many types of coaches, each with different backgrounds and skill sets. Add to that the significant investment that coaching can require, and this can become a difficult task.

When people ask me how they should go about finding and hiring a good coach, I advise them to focus on five key questions to guide them in their process.

1. What type of coach should you hire?

First, look at your goals and situation and decide what kind of coach you need. There are many types of coaches that focus on different problems and objectives. Start by asking what goals you want to achieve and what challenges you're having. This will make it easier to choose the type of coach that best fits your needs.

2. What level of experience do you need?

If you are looking for someone to work with a new manager on leadership skills, you likely don't need a top-shelf coach. Whereas, if you are developing your company's overall business strategy and coaching your leadership team, investing in a seasoned expert with significant experience is a good investment. 

3. What background will be most helpful?

This is a tricky one. While a solid understanding of your industry is good, I generally suggest that you don't hire a coach for their specific business insights. (For a consultant, yes, but that's a different type of hire). Instead, look for a coach who has worked with other clients in your situation and knows the common challenges and pitfalls. You are the industry expert. Your coach mainly needs to help you with the process and how to overcome your obstacles.

4. How much structure do you need?

Some coaches have a rigid system with predefined steps. This is great for people with a common set of challenges and for those who need structure.

I have a toolbox of standard exercises and techniques, and I diagnose each team to figure out which to apply and when. Other coaches work with a few basic principles and customize everything to each client.

5. What kind of personality would work best?

Finally, you need to choose a coach with whom you'll connect. You need to trust them enough to be vulnerable and explore deeper issues. Real change and improvement requires tackling tough questions and core beliefs. If you're not willing to open up to your coach, it is a waste of time and money. If you don't feel like you can establish a close connection and rapport quickly, it's probably not a good fit.

With the range and diversity of coaches in the market these days, choosing one is a hard job. These questions will help give you some criteria and path towards finding a coach that is right for you. Ultimately, there is rarely a perfect fit, but you can still find a good fit.

Finding the best candidate and starting the process sooner will generally get you closer to your goals faster than if you wait hoping to find perfection. As I like to say, done is always better than perfect.

Your Company's Purpose Is More Than Making Money. Here's How to Discover It

Discovering and embracing your company's core purpose will help drive your strategy and decision making at all levels.

I spend a lot of time with leadership teams working on strategy and planning. I start the process by asking why the company exists beyond just making money.

Why do I start here? Because before we can set goals and figure out how to position the business in the market, we need to understand its purpose. Having a clear understanding of your company's purpose will make it easier to come to decisions on what direction to take. Without it, it's more likely teams will deadlock over key strategic moves and which paths to pursue.

While there is no one right purpose, there are some purposes that will serve the company better and some that will serve them worse. A clear and committed purpose is a powerful decision-making tool.

The idea of a purpose is to define a clear pursuit you can dedicate yourself to for one hundred years or more. It should transcend current technologies, markets, politics, and cultural trends.

Having done this with dozens of companies, I have developed the following shorthand formula for defining a purpose: We serve X by Y so they can Z. Where X is who you serve, Y is the value you give them, and Z is the ultimate benefit they gain.

While this looks a bit like a value proposition, it's much bigger in scope and longer-term in nature. It needs to be valid for over a century.

For example, Apple's purpose when using this formula would be something like this: We serve consumers by building beautiful and easy-to-use technology solutions so they can bring their ideas to life and enjoy the process.

Why does this work? It's specific and makes it clear what the company does and does not do. It's long-term in scope and something they can pursue for many, many years to come. And it shows the impact they want to make.

Here's how to think through each step to develop your company's core purpose. I generally do this with the founder and/or the leadership team over a series of meetings. Don't be afraid to create a rough draft and refine it over several months.

1. Who do you serve?

While this can be thought of like a target customer, it is bigger and more general. You want to define who you will serve for a very long time. However, you also want to be as specific as possible.

General consumers? Children? Business executives? Sports fans? Wine lovers? Small businesses? Trucking companies? These are all specific yet you can dedicate yourself to them for many decades.

2. What do you provide them?

Again, think about what you can focus on for an extended period of time. Your company will grow and innovate its products and services, yet you want to maintain this path.

Recently, I worked with an environmental consulting firm and their purpose was "to enable the successful development of real estate while protecting our environment." While specific, this allows for a broad range of possible services and products they can develop for many years to come.

3. What is the end benefit you enable?

Now you want to define the ultimate value you create for the people you serve. Describe what they should do with your product or service and why it is valuable to them.

As a business coach, my purpose is "to create more thriving small and medium-sized businesses to strengthen our economy and raise everyone's standard of living." And while I do that through specific services and products, it ties me to my bigger picture.

While talking about purpose and what a company will pursue for one hundred years may sound airy-fairy, getting this right and well defined will make the work of developing a strategy and building a culture much easier.

Statistically, the vast majority of companies don't last a century. But I think more would come closer if they imagined themselves thriving that long.

Before You Pivot Your Company into Cannabis, Consider These 5 Issues

The cannabis green rush has everyone interested in diving into the weed business. However, consider these key issues before you jump.

As a business coach and cannabis business podcast host, I have worked with many cannabis companies and have interviewed over 100 cannabis entrepreneurs and business experts. I have learned first hand what makes the weed industry different from others.

The cannabis industry continues to grow both in the U.S. and internationally. Many entrepreneurs are interested in starting a business and many existing businesses are looking to expand into the industry. While there is opportunity, there are also significant risks you need to consider.

While many states have legalized the use of cannabis for medical and adult-use, cannabis still remains federally illegal. This odd legal and regulatory context means that you need to be highly aware of federal law. You also need to carefully plan your future strategy since laws, enforcement, and regulation are likely to change over time.

Here are five key factors about the cannabis industry you need to understand if you want to get into the business. While the details and implications of each will depend on the nature of your business, they will all impact you directly or indirectly whether you touch the plant or not.

1. Be ready for banking issues.

Because dealing in cannabis is a federal crime, the majority of banks will not give you an account, or may even close your current accounts. Technically, they can provide services, but the requirements for them to bank a company that is dealing in illegal activity is generally cost-prohibitive.

Even non-plant touching companies are at risk. Some of these companies lose their merchant accounts, have payments flagged, and have fees applied to their accounts because they do business with weed companies. Be sure to clear your business plans with your current bank or switch to a cannabis-friendly bank.

2. Many business expenses are not deductible.

After a Minneapolis drug dealer successfully sued the IRS in 1981 to be able to deduct his car, scales, and baggies as "business expenses" on his tax return, Congress passed legislation to ban companies dealing in illegal drugs from deducting anything except their costs of goods sold. As a result, companies that deal in cannabis can be taxed at a rate of 70 percent or more.

If you're plant-touching, the key is to allocate as much of your expenses as possible to your cost of goods sold, rather than your general business overhead. If you're not plant-touching, you need to be aware of your customers and partners who do. While there is proposed legislation to change this, it has yet to come into full force.

3. Crossing state lines can get you in trouble.

Interstate commerce is controlled by the federal government so transporting cannabis across state lines is illegal, even if you are transporting between two cannabis-legal states. It is also illegal to transport funds intended to further activities that violate federal law. While the DEA isn't setting up checkpoints, these activities can create problems for many businesses.

Each state is its own micro-industry and you need to carefully separate your business operations by state based on the legal ramifications. Since each state has its own set of laws, regulations, and enforcement procedures, the dynamic complexity of these can be significant if you are operating in multiple states.

4. Your trademarks and intellectual property may be at risk

Another implication of cannabis being federally illegal, is that the United States Patent and Trademark Office (USPTO) will refuse application for cannabis-related products and services. You can register trademarks at the state level, but this becomes extremely complicated.

Many companies avoid these issues by submitting applications that are not cannabis-specific and make more general claims of use and application outside of cannabis. However, this will need to be addressed when cannabis becomes federally legalized. All of the companies I work with have contingency plans for how they will respond to federal legalization to protect their assets.

5. Forget about advertising on the big platforms

If you mention cannabis, pot, or weed in your promotion, you cannot advertise on Facebook, Google, and many other platforms. Most will allow you to post content that promotes cannabis products and services but paid advertising is generally off limits. While cannabis is a thriving market, these companies don't want to risk the rest of their business by getting into legal trouble.

There are domain-specific complexities in all industries that business owners must navigate, but those in cannabis are particularly complicated and come with more severe risks. You need to consult your lawyer for details on how your specific business will be impacted and how you can operate legally.

Despite the challenges, there are huge opportunities for those who get the details right, manage their risks, and navigate the changing landscape. Like any emerging industry, those who can survive and successfully build thriving businesses can reap significant rewards.

Use these 5 Techniques to Accelerate the Pace of Change in Your Business

Change often involves resistance and complexity. Here are five ways to increase your chances of success.

As a business coach, I get hired to help companies grow and scale more quickly and more profitably. The founders, owners, and CEOs I work with are hungry to achieve more success and create more impact.

The challenge is that in order to accomplish the goals they have set for themselves and their businesses, they must be willing to make significant changes, both as an individual, and as a company.

People and organizations do not change easily. There is a significant amount of resistance to new ways of working and thinking. With change, comes risk and uncertainty, so it is natural for people and teams to be hesitant.

However, if you want to grow and scale your business, you must change. Your business will need to develop new strategies, establish new processes, and hire new people. More importantly, a company's leadership team needs to adopt new habits, embrace new roles, and evolve their thinking.

While change is hard, you can make it easier and more likely. Here are five techniques that I focus on to help companies embrace change and grow more quickly and successfully.

1. Create a future vision.

One of the main reasons change is hard is that people don't like uncertainty. Asking people to make changes without a clear picture of how the new way will work will only increase anxiety. In fact, the future doesn't even need to be rosy. People would rather move toward a clearly difficult future than one that is foggy.

Paint a vivid picture of the future, using all of the senses and addressing all of the likely questions and concerns that people will have about the new way of working. The more detail you can provide, the stronger it will be. 

2. Expect it to be difficult.

One thing I always tell the executives I work with is that they should expect the process to be difficult. Change is hard and requires discipline and patience. If their expectations are not set correctly, when the going gets tough, they will give up rather than push through. Make it clear it will not bet a cakewalk.

3. Give people time.

It is great to have a goal and be excited to complete it quickly. However, change always takes time and energy and if you expect it to happen quickly and easily, you'll be disappointed. Time is a key factor in helping people navigate through the changing processes. Don't force it. If you feel people redlining, it's better to back off than push them past their limits.

4. Make it OK to fail.

People need to experiment with new ways of working in order to improve and develop mastery. Without a safe space to try out new strategies and techniques, your pace of change will be severely limited. Find ways to let people test things out in low-risk situations.

5. Talk about the emotions.

Change will also trigger emotions and feelings, and too often I see leaders gloss over these important factors. Create a time and place for people to discuss how they are feeling and explore what's driving these reactions. Being open and upfront with emotions will help people process them faster and find a way of addressing them before they fester and become a deeper issue.

Realistically, a high-growth business is full of change and much of it is hard. Everyone must step up and learn new skills and work in new ways. While not everyone will successfully make the transition, those who do will succeed because they've mastered the change process and learned how to transform not only the company as an organization, but themselves as leaders.

Running an Effective Board Meeting Is Not Hard If You Have the Right Strategy. Here are 8 Tips

Board meetings don't have to be adversarial or contentious.

Running a board meeting is not like running other meetings. Company boards have specific and important responsibilities to uphold to shareholders, investors, and other stakeholders. Failing to do so can have consequences.

That said, these meetings need not be hard. In fact, a well-run board meeting can help management make better decisions more quickly and with greater impact. While boards are there to provide governance and oversight, they are also partners in the overall success of the company.

I see many CEOs struggle with running board meetings effectively. Sometimes it's because it's their first time in a leadership role and in other cases it's because they haven't developed a good strategy or clear plan for working with their board members.

While a board is there to oversee the management team and ensure the people leading the company are competent and acting in the best interests of the shareholders, it need not be adversarial or contentious. A good board wants to support their executive team and will do so when they are collaborating openly. Here are the suggestions I give CEOs for running their meetings. 

1. Establish your board purpose.

The first thing to establish is the purpose of the board. Some boards don't have an oversight role. Advisory boards are there to provide input, advice, and access to resources; they don't have voting or governance roles.

However, a board of directors most often does have fiduciary responsibilities. It is important to make sure the board's role is clear not only to you and your leadership team, but your board as well. 

2. Clarify decision-making rights.

I've seen many CEOs end up at odds with their board because when things get tense, the decision-making process becomes a source of friction or conflict.

It's best to immediately clarify how input will be collected, decisions made, and votes cast. Once this is clear, use it for every decision so that the process is set and everyone is familiar with the steps. Then, when big issues come up you can focus on making good decisions, not arguing over the process.

3. Distribute information prior.

While I recommend this for all meetings, for board meetings it is critical that you distribute information beforehand. Send out the agenda items, all background information needed, details on the options being considered, and what input and decisions are needed. This will save time and increase the effectiveness of your meeting.

4. Prioritize agenda items.

Like any meeting, it is important to prioritize agenda items. Too often I see CEOs putting off difficult discussions thinking they can address them later in the meeting. Instead, everyone gets tired and important items aren't given critical thought or they get deferred. Tackle important issues first, even if it's hard.

5. Use round robin.

It's important to get everyone's input during a board meeting. Formally giving everyone an equal chance to speak will make sure voices are heard. It prevents members from lobbying in new issues or ideas late in the process, or even making claims they didn't have input.

I like to use a round robin strategy. I present the agenda items and clarify if I'm looking for input, new options, or a vote. Then, I give everyone 2-3 minutes to write down their ideas. After, I allow each member 2-3 minutes to present without interruption. Some members may choose to pass, but by giving them the floor, they are accountable for not sharing their input.

6. Keep meeting notes.

Obviously, you need good notes for board meetings. While I don't recommend you record board meetings, good notes on what was discussed, options considered, input given, and decisions made can be both useful and important for the future. I typically take notes as the meeting progresses and distribute them after the meeting for comments and edits.

7. Summarize decisions.

When summarizing key decisions, I find it best to include the options considered but not chosen and other key points offered during the process. These notes can provide valuable insight when you're reviewing outcomes and learning how you can improve going forward.

8. Keep good records.

I like board books and running meeting minutes. These allow you to quickly reference previous agenda and meeting notes so that you don't rehash the same issues. If you have to search through old folders to find notes from previous discussions, it will kill a meeting's momentum.

A well-run board meeting will ensure that you get through your items effectively and efficiently. It will also help you leverage the advice and expertise of your board members.

Most importantly, a well-run board meeting will inspire the board's confidence in your performance as CEO. When things get tense, it can mean the difference between a board trusting your ability to execute and questioning your ability to lead.

Here Are 6 Ways to Improve the Level of Accountability on Your Team

Performance is driven by people delivering on their commitments.

It's easy to make promises. It's harder to deliver on them. Yet, you need consistent delivery if you and your team are going to get the results you want. You need clear goals and disciplined execution.

Unfortunately, I see teams struggling with this on a regular basis. In each meeting, there is a flurry of commitments and agreements that all sound great, but as soon as people leave the room, everyone forgets what was said and weeks go by with no results or even recollection of what was promised.

Great teams take commitments seriously. They know that to be successful they need to work collaboratively and depend on each other to complete their work. Members of successful teams don't take promises lightly because they know others will be affected if they don't deliver how and when they promised.

Here are several behaviors that I see in high-performance teams that you can use to raise the bar on commitments and improve your team's results.

1. Set clear long-term goals

Understanding the big picture and long-term goals will allow everyone to better see what work needs to get done. It is also important to establish clear definitions of done and of overall success. This will allow your team members to be more specific with tasks and timelines. Compelling long-term goals will also increase motivation and engagement by aligning people around a bigger idea and a vision for a better, more desirable future.

2. Define roles and responsibilities

Much of the drama on teams around commitments is caused by not having clear roles defined. If each member's responsibilities are not well-defined and not broadly understood, it leaves members guessing about who's working on what and how handoffs will take place. It will lead to incomplete tasks or excessive communications and negotiations on tasks, or both.

Beyond basic roles, it is also important to work out the key processes that you and your team are responsible for. Map out the steps and who will do what at each step. Having clarity on each process will increase efficiency and reduce drama.

3. Capture commitments

I've been in too many meetings where many important items are discussed and plans are made, but no commitments are captured. People leave the room feeling good, but with no clue as to who is doing what and when. It is impossible to build a culture of accountability without capturing and tracking commitments and responsibilities.

All of the best teams I work with as a coach have a central document or system that tracks all of the outstanding and completed commitments for the team. At the beginning of each meeting they review outstanding commitments and identify any delayed or at-risk items. Then, at the end of each meeting, they review who is committed to doing what and when it will be completed. 

4. Ruthlessly prioritize

Another bad habit I see in underperforming teams is over-committing themselves. The fact is there are only so many hours in a day and you can only commit to those items you know you can comfortably complete. Committing to more than this is irresponsible and will end up letting the team down.

Good teams continuously prioritize their work and manage their time to focus commitments on those items that are strategic and important. They will challenge each other if they think someone is either working on something that is low priority or has a full plate and risks over-committing themselves.

5. Focus on personal accountability

I've been in many meetings where people drone on about why they didn't get something done when promised. Unfortunately, this is generally a waste of time. There are challenges with any task and reciting them to your teammates doesn't help.

Instead, focus on what is in your control. When you have or might miss a commitment, focus on what you've learned, what you're going to do differently moving forward, and what your new plan of attack is going to be. By taking personal accountability, you will empower yourself rather than look for excuses beyond your control.

Creating a culture of accountability is not easy. Great teams focus on it during each and every meeting and continuously improve upon it over time. Use the points above to begin defining your commitments. When you follow through, you will see your results improve over time.

The Best Way to Improve Your Team’s Decision Making Is to Record and Review Your Previous Decisions

The best way to improve is to record your thinking process and review your outcomes.

The main job of leadership teams is to make decisions for the company. Teams that make more efficient decisions will win. It will allow them to quickly respond to issues and take advantage of opportunities. It will also expose more impactful issues that will drive strategic growth and transformation.

One of the best ways to learn how your decision-making process is affecting your outcomes is to keep a decision-making journal as a team. This captures the thinking, analysis, assumptions, and criteria you used to make decisions. By reflecting on this later, after you know the outcomes, you can find ways to improve your process.

Here are a few things I suggest to include in your journal to capture the key insights and maximize your learning.

1. Formalize your process

First, define your decision-making process. You can't improve on something that isn't well-defined. What steps do you take to make a decision currently? If you don't have a process, just record what you do during your next decisions and use that as your working model. Then you can evaluate what worked and what didn't and make changes for the future.

For example, if you had a cost overrun because you forgot to budget for legal fees to review the contract, make sure this in on your checklist going forward.

2. Take notes on your thinking and rationale

While you're making your decisions, it is important to capture your thinking rationale, and assumptions. Did your team consider an option but then reject it? Make a note on what it was and why. I also capture all of the brainstorming notes and photos to review later.

Most people are overly optimistic by nature. By tracking estimates and actuals for time and budget estimates you create feedback that can be used to make better estimates in the future.

3. Document the options you considered but didn't take

One of the best things you can do to improve your decision-making is to generate more options. Most teams come up with two or three options and then decide. Better teams spend time coming up with more options and then spend time developing them further into novel solutions.

Capture the ideas you generated and what you toss aside and what you developed. Often times I see ideas that the team disregarded that ended up being great ideas in retrospect. A journal can help you understand what thinking lead to missing that option and how you might do it differently in the future.

4. Define the criteria you used to make your decisions

Before you begin the debate, discuss and agree on what will make the best outcome. Decide what your boundaries and priorities are for a final solution. Do you have a budget or time limit? Is quality more important than quantity? What tradeoffs are you willing to make? Determine these factors before you start.

Then, record the information in your journal and discuss how you've evaluated your options based on those factors. Later, when you review your journal, this will help you see if you missed important criteria or if you misjudged the ability to meet them.

5. Capture the data you had and where you got it

Many decisions are based on the data collected and analyzed. The challenge is that good data can be hard to come by and difficult to assess in the heat of the moment. By recording the available data and the conclusions and decisions you made from it, you capture the context at the time.

Too often I see teams look back on a decision but use their current informational context to evaluate it. This skews the evaluation and can lead a team to miss key insights. You need to assess the decision you made within the context of the information you had at the time, not the information you have now.

6. Record your assumptions and certainty levels

Many times decisions go south because the team made assumptions about what was or was not true, likely, or possible. However, if you don't capture those assumptions, you won't be able to compare them to real outcomes and learn what you can safely assume going forward.

While you can't always capture all of this data, choosing a few key decisions to document your process, thinking, and data will be extremely helpful in reviewing your outcomes and evaluating your effectiveness. Teams that get this right will dramatically accelerate their learning and their results.

5 Simple Steps to Constructive Team Conflict

Teams need healthy debate to advance ideas and strategies. Here's how to keep it constructive.

I spend the bulk of my time working with CEOs and their leadership teams on developing and implementing business strategies in high-growth companies. Done correctly, these strategies can create a significant amount of value. Done poorly, they can squander a unique opportunity these companies have worked hard to create. 

You would think with all of that pressure and intensity, there would be lots of drama and conflict among stressed-out executives. However, that's typically not the case. 

In fact, I find that most teams are playing too nice. In an effort to be more collaborative and be better team players, they end up avoiding conflict, unwilling to engage in any meaningful discussion. As a result, important issues are avoided or glossed over. 

As a coach, my job is to teach teams how to fight fair and tackle issues head-on while being respectful and supportive of each other's opinions, even if there is disagreement. Done right, constructive conflict will build a team's ability to advance ideas and come up with better, more creative solutions.

When working with teams on increasing debate and discussion, I focus their attention on five key steps. If your team is playing too nice, give these a try. 

1. Reaffirm the relationship.

Before launching into a heated debate, it's best to start by reaffirming your relationship with the other person and your intentions. The fact is, even the most confident person's ego is fragile. If you launch into disagreement first, you'll risk putting the other person on the defensive.

Start tough conversations with "I respect your view ..." or "I want to find a solution that works for both of us ..." or "I appreciate the work you've done here ..." rather than launching into a direct attack. Once you put someone on the defensive, the discussion will quickly go downhill.

2. Don't attack--add to the discussion.

Start your comment with "That's a good point. I have a different opinion I'd like to share ..." or "I appreciate that perspective, and I'd like to add mine to the discussion ..." Don't use the words but, however, no, or disagree, as these will set up a fight.

You can also borrow a technique from improv comedy called "yes, and ..." By starting every reply with this phrase--even if you disagree--you create a positive, open energy that advances the discussion rather than tearing it down. 

3. Focus on issues, not people.

It's important not to make things personal, and not to take things personally. If you start a reply with "I don't like your idea," it comes across as a personal attack. By saying "your idea," you are implying that you are not only challenging the idea, but also challenging the individual who proposed it. This will trigger the other person to become defensive.

Instead, start with "That idea has a few challenges I'd like to discuss ..." This puts you and the person on the same side of the table, working together on the idea. Even better, if there are elements of the idea that you like, try saying, "I was thinking about a similar approach and was concerned about ..." Again, separate the person from the idea.

4. Clarify your desired outcome.

One of the best ways to avoid personal conflict is to focus on a common goal. This signals that while you might have a disagreement over a detail or path, you're both aligned at a higher level toward a shared desired future. Try a phrase like "I know we both want this project to be finished by the end of the year ..." or "We all want to make sure we're working efficiently as a team ..." 

5. Make the first offer.

If neither party wants to flex or compromise, the team will end up in a deadlock. The fallacy here is that the person who moves first "loses" the fight. It's not a competition, and if you treat it that way, everyone will lose.

Instead, focus on developing and offering options and strategies for meeting the other person's needs, while maintaining your own needs as well. Don't just give in to make it work--but you might need to be flexible and creative. Everyone wins on the team when you work hard to find new solutions.

While not all team conflicts are easy to resolve quickly, with some focus and bigger-picture thinking, the vast majority of them can be resolved. In fact, getting good at resolving tough conflicts is the sign of a mature and high-functioning team.

7 Simple Secrets to Running a Better Virtual Meeting

Virtual meetings can be challenging to run. Try these seven techniques to make them worth every minute.

As a business strategy and leadership coach, I spend a lot of time with teams on setting and developing priorities and goals. Most of my time is spent in meetings: facilitating conversations, getting to root causes, and working through different opinions on where a business should focus and what it should prioritize.

This work is tough enough in person, dealing with conflicting personalities, differing opinions, and misaligned objectives is a core part of my job. Listening to what's being said while also watching body language and non-verbal cues zeros me in on critical issues that need to be addressed.

Over the years I've worked with more and more companies who have distributed leadership teams. As a result, I'm doing more of my work via video and having to adapt my process and flow to an online meeting format. And while meeting virtually is not the same as in-person, you can still create a powerful and productive experience. In fact, virtual meetings can have some benefits if you leverage the format.

Here are seven key principles that I use with my virtual teams when we host online meetings. Whether you're having a quick 15-minute chat to catch up, or an all-day session to develop strategy, these will help you get more done in less time.

1. Accept that virtual meetings are different.

The trick is to accept that an online meeting will not be the same as an in-person meeting. And once you let go of that expectation, you can begin to apply more efficient virtual meeting strategies.

2. Limit one person per login.

One of my hard and fast rules is that each person in the meeting needs to have their own login, screen and camera. When two or more people try to share a computer, sound and video quality goes down considerably. It also makes it difficult to use the "breakout room" features that are now on many online meeting tools. I want one face per login and good, up-close sound and video.

3. Use two screens.

I encourage everyone in my meetings to have two screens or even two devices. One is for the video meeting tool, the other is for the collaborative documents we're working on. Switching between the two disconnects people from the team. I want everyone to be able to see both the other people and the document at the same time.

4. Leverage collaborative documents.

While many video call apps have screen sharing tools to allow anyone to share a document, this doesn't really allow for collaboration. Instead, I like using a virtual document that everyone can access and edit at the same time. A virtual document like Google Docs allows this to happen. And while you will need some facilitation and structure to avoid chaos, it makes for a much more collaborative meeting.

5. Pay attention to visual cues.

I encourage everyone to use the "gallery view" for the video meeting so they can see everyone at the same time. This way, we can all see people's reactions and non-verbal cues while we're working. A questioning look on someone's face or a hand raise can cue the facilitator to back up and make sure people are following.

6. Invest in good technology.

Once you factor in everyone's billable time, meetings can cost a company thousands of dollars an hour. So when you have delays or interruptions because of technology issues and bad connections, the costs can quickly add up. There is no excuse not to invest in good hardware, software, and bandwidth to make things run smoothly and easily.

7. Have someone facilitate

Once a meeting has more than a few people, it's critical to have a facilitator who can set ground rules and keep the agenda moving. This can be someone in the meeting already; however, it's better to have someone who's not a participant so they can really focus on running the meeting.

While the level of interaction and collaboration of in-person meetings can never be duplicated by virtual meetings, if you follow these tips you'll find that they can still be extremely effective and productive. And for remote and distributed teams, they are a must if you want to create organizational excellence.

Calculating Your Business's Rainy Day Fund Is Not Hard If You Follow These Steps

Every business needs cash in the bank to weather the ups and downs. Here's how to figure out how much you need.

Business is uncertain by its very nature. If it wasn't, everyone would be an entrepreneur. It's what makes business both exciting and stressful. However, good business leaders know the risks they take and make sure they have strategies in place to mitigate downside risks.

Having the right rainy day fund to help cover shortfalls can be the difference between making it through some hard times and finding your business on life support. However, squirreling away too much cash can mean anemic growth and missed opportunities. 

As a business coach who works with CEOs in many different industries and in companies of different sizes, I've learned that calculating this number is a balancing act. Here are some of the factors that you need to consider when deciding how much to squirrel away for a rainy day.

Core staff payroll

For most businesses, people are the most critical and important asset. A company with a team of A-players will outperform the industry every time. Losing these people can be disastrous for the business. You need to make sure you can cover their salaries and benefits for however long you think it might take to get back on your feet.

Non-critical staff payroll

While some staff are no longer needed if your business takes a downturn, you may not be able to cut them quickly. Make sure you have enough to give them enough notice and runway to find another position. Another option here is to put them on furlough if you think business will come back in a reasonable timeframe. I've also had clients who negotiate a partial pay package or a deferred pay arrangement.

Fixed critical expenses

Some expenses can't be reduced or cut without serious deleterious effects on the business. This includes things like rent, insurance, utilities, etc. Make sure you have enough to cover these items and avoid a painful disruption to the business.

Variable and semi-variable expenses

Things like costs-of-goods-sold will directly lower in a downturn. Other costs, like attorney fees associated with new contracts, will also decrease with slower business. Look through your chart of accounts and identify those expense items that will get cut or lowered if sales and revenues fall unexpectedly. Taking action on these items quickly can give you more runway for critical expenses.

Accounts receivable

Another thing to factor into your calculation is your current accounts receivable. For invoices that have been delivered in full and there is no work remaining, you should be able to collect on that money. If you have invoices associated with partial delivery or need-to-complete future work, you might need to factor them to some level.

Accounts payable

Your accounts payable will be a big factor in how much of a cushion you need. If your business hits a few bumps and you don't have new cash to make payments, you'll need to start prioritizing quickly. Focus on critical vendors and suppliers first. And try to negotiate payment terms and a schedule sooner rather than later.

Access to outside funds

If you have access to outside funds, you might not need as big of a cushion. This could be liquid or semi-liquid assets from the owners. You can also look to debt options; however, asking for debt when things are not going well can be a very difficult and expensive option.

Cost of re-hiring

One of the best calculations you can do is to figure out the break-even time between how much you save by letting someone go in a downturn and what it will cost you to replace them when things pick back up. Often times, it's cheaper to pay someone even if you don't need them for a few months than to later go through the pain and cost of recruiting and training someone new.

Reinvestment opportunities

Sometimes I see clients that have too much tucked away. They've amassed large sums of cash out of worry for the next downturn. In the meantime, they've neglected to re-invest in their business to help it grow and prosper, and have missed key financial opportunities. Strike a balance between protecting against undesirable events and pursuing growth and scale.

Risk tolerance and stress

In the end, everyone has a unique risk profile. If keeping your emergency fund lean means you're on-edge and having sleepless nights, then put more away. Increasing your stress and anxiety will reduce your performance and hinder your ability to deal with the situation should a downturn show up.

The amount you should put away is a combination of rational logic and emotional security. However, don't just put money away and forget about it. As the business grows and evolves, so should your calculation and the balance in the account. Forgetting to do so can expose you to risks you didn't intend to take.

Growing Your Business Requires Nurturing Leaders. Here’s How to Do It

The big challenge to growing a business is developing leadership skills at all levels of the organization. Here are five areas that will help.

As a business growth coach, I've worked with dozens of CEOs and their leadership teams on how to scale their business. And while companies who want to grow 50-100 percent a year will consistently face many challenges, finding and developing leadership skills within their teams remains one of the most difficult.

The best strategy in the world will go unrealized if you don't have the right team to implement it. And while it might be easy to find talent with good technical skills, finding good leadership skills is much harder. Unfortunately, without good leaders, you'll be left with a team that struggles with focus and prioritization, and one that lacks the ability to navigate the inevitable change that comes with growth.

I encourage all of my clients to make leadership development a key priority in their business. This will help them to not only grow more quickly, but it will also reduce drama and conflict in the process. Here are five leadership skills that will help you and your team increase your company's leadership quotient.

1. Set clear priorities.

One of your key roles as a leader is to clarify what's important and what's not. It's easy to get caught up in the excitement and chaos of a high-growth company. And for most employees, it can feel like everything is important and urgent.

I like to say that is everything is important, and nothing is important. As a leader, you need to sort through all of the distractions and shiny objectives and make it crystal clear to your people what they need to focus on first and foremost. 

2. Manage to outcomes.

Great leaders leverage the skills and brainpower of their team. They don't try to micromanage and, instead, give their people space and freedom to figure out the best way to accomplish goals and complete tasks. This not only frees up your time, but it also creates great engagement within your group.

In order to do this effectively, however, you need to be super aware of your desired outcomes. Very often, the reason people micromanage is because they haven't actually taken the time to figure out what they want to come out of the process. A good manager starts with the end in mind, sets a clear definition of success, and then lets their people find the best way to accomplish the work in the most efficient way possible.

3. Delegate more to directs.

Delegation is both a skill and an art. As a leader, it's a critical skill you must master in order to be effective and advance. Failing to delegate well will leave you stuck in your current role and hinder your advancement. You need to move anything that is not your most valuable and strategic work on to your direct reports.

The best way to decide what to delegate is to assess all of your work and tasks and sort them by importance and complexity. Keep your focus on highly important and complex tasks. Then delegate starting with simple and unimportant and work your way up.

4. Develop talent through coaching.

Everyone wants to grow and improve. However, many managers just focus on keeping their people happy and productive in their current positions without a view of the future. True leaders know they need to support education and evolution if they want to keep their people engaged. And the best way to do this is to think like a coach.

Set learning and development goals with your people so they can advance and add more value to the company. Then meet with them regularly to review progress and help them when they're stuck or need resources. Yes, you might need to pay them more when they prove successful, but that's nothing compared to having to recruit to fill senior positions.

5. Engage in critical debate

While everyone wants to play nice on a team and be collaborative, as you move into a leadership role it's important to learn to engage in critical debate. Senior leaders have important skills and experience that need to be shared to make good decisions and create proper plans. Effective leaders don't shy away from conflict; however, they do so while keeping things professional.

Developing leaders at all levels of your organization is a sound investment of your time and energy regardless of your business size and growth ambitions. But if you're hoping to scale significantly and in a short time period, leadership development is not just a nice to have, it's a must-do.

6 Leadership Mistakes Most New CEOs Make -- and How to Fix Them

Making your way to the top takes many skills. However, once you get there, those same skills can become a liability.

Making it to the top requires competitive drive, expert knowledge, cunning intellect, and the ability to execute tasks better than anyone else. These skills will help you rise in the ranks and prove your worth. Without them, you're not likely to excel as quickly or decisively as others who are after the same position as you.

Once you do make it to the corner office, these same skills can hinder your ability to be effective. While you need to compete and win to get to the top, once you're there you need to focus on teamwork, collaboration, and motivating others. If you continue to lean only on the skills that helped you rise to the top, you'll fail to build a strong and high-performing leadership team around you.

Making a successful transition to CEO requires you to start doing many things. It also requires you to stop doing just as many, if not more.

Here are the six things that I often see new CEOs doing that hurt their performance and progress. If you're taking a seat at the head of the table, make sure you avoid these habits.

1. Talking too much

When you're rising through the ranks, you need to fight to get a seat at the table and for your voice to be heard. You become an expert at getting your points in edgewise.But as CEO, you no longer need to fight to get your ideas into the conversation.

As a head executive, you need to start listening much more than you speak. Create space and time for other people on your team to share their ideas and comments. Don't jump in while people are speaking and don't always be the first person to comment.

2. Micromanaging

I see this one with many of the technical and scientific CEOs that I coach. They have been extremely successful because they are the best at what they do. They are often the smartest and most experienced people in the company. And they do, in fact, know how to do many things better than anyone else. However, as CEO, if you start telling everyone what to do and how to do it, you'll create an organization of yes-people and order takers.

Instead of issuing detailed instructions on how things should be done, focus on clarifying your end objectives, why those objectives are important, and any key guidelines and boundaries that need to be followed. Let your team figure out how they want to execute and only give them help if they ask for it and truly need it.

3. Throwing out ideas

When you're just a regular member of the team, throwing out ideas helps get new thinking on the table. It's part of the brainstorming and creative thinking process. But watch out: when you're the CEO, even an off-the-cuff idea can come across as an order.

Don't underestimate the power and influence you have in your role. Avoid tossing out ideas without the intention of really wanting to make them happen. Instead of throwing out ideas, focus on asking questions to get your team to think about other ideas and alternatives themselves. 

4. Being the smartest in the room

When you're trying to make your mark you need to prove yourself to others. Demonstrating your capabilities and knowledge is key to moving up the ranks. However, once you're at the top, if you continue to showcase and grandstand you'll just be seen as an ego-driven know-it-all. Instead, focus on giving others the limelight and highlight their expertise and contributions.

5. Trying to win

On the climb up the corporate ladder, engaging in critical debate, having influence over people, and getting your way are key skills to success. And most of the CEOs I work with can out-think and out-argue everyone around them, though it doesn't mean that they should.

Instead of trying to win debates and convincing everyone to do it your way, focus on highlighting and supporting other people's ideas which you find valuable or worthy of exploration.

6. Being too busy

As a manager, being busy is a sign of importance and being in demand. You're busy because you have a lot of work and are needed by the company in many ways. Long hours show dedication and ambition. Once you become CEO though, if you're harried and overloaded you'll fail to see the forest for the trees and it will leave your people without the guidance and clarity they need to have focus.

While there are lots if things to learn and new skills to develop when you move into the chief job, you also have some unlearning to do as well. Don't make the mistake in thinking that what got you to the top will help to keep you there.

Want More Value out of Your Day? Focus on Creating Time Blocks

Time blocking will help you create more focus and productivity.

I spend a lot of time with senior executives on strategy and business planning. We conduct a deep analysis of their business and the market to develop innovative approaches to their business and detailed plans on how they are going to execute over the coming quarters and years.

However, all of this is wasted time if the teams that I work with can't manage their schedules to have the time to actually do the work. When coaching executives in this situation, I typically use an approach I call a defensible calendar.

This system focuses on allocating blocks of time based on your priorities and your optimal hours of the day and week. At the center of this approach is the use of time blocking to create interrupted time, which in turn creates flow.

If you're struggling to find the time to work on a long-term strategy, try these steps to create more focused time for these important, but not urgent, tasks.

1. Determine your allocations

Start by listing out all of the projects and responsibilities you have on your plate. Figure out how much time you ideally need to spend each week. Note if you need one big block of time or if you need to do a little each day. If you keep a good calendar, look back over previous weeks to catch things you may have missed on your list.

You should end up with a list of weekly tasks with total times and frequency. If you have more than 30-35 hours on your list, your first task is to prioritize and delegate this list so that it's down to a reasonable workload.

2. Identify your peak times

Here is where most people get time management wrong. They assume that every hour in a day is the same as every other hour in the day. In fact, our hours vary wildly in terms of quality and focus. Before you plan your schedule, it's important to know what time of day you should be working on which types of tasks.

If you're a morning person, your best hours might be right after breakfast or even when you first wake up. For others, it might be after dinner when you can focus for longer stretches of time and be more creative. To identify your peak times, create a journal and make notes for a few days on the times you feel like you have the greatest mental focus and clarity.

3. Allocate your time blocks

Once you have your prioritized task list and your peak times have been identified, you can begin mapping out your week. Start with the big blocks of time you need for focused, uninterrupted work. This could be each day, or this could just be one or two days a week. Better to start with too many than too few.

Once you have the bigger blocks scheduled, start putting in the medium and smaller blocks. Make sure to include blocks of time for standard tasks (getting to inbox zero, team meetings, reviewing reports, etc.) I typically suggest you allocate 6-7 hours a day and leave one or two buffer blocks during the day for things that come up last minute.

4. Defend your schedule

Once you have your ideal schedule planned, your job is to defend it tooth and nail. When someone calls you for a meeting, make sure to offer them the box you had allocated for that activity. If you forgot to plan for it, give them one of your buffer blocks. But don't move your other blocks! This is the key to this strategy. Make other people adjust to your plan.

5. Adjust and optimize

Sometimes you have to give: your boss needs to meet with you, your most important customer needs to come to a meeting. These things happen. If they come up and you must accommodate their schedule, do so, but don't delete your blocks! Force yourself to shift things around to keep your blocks together as much as possible. Even if you need to move blocks between days and reschedule other meetings.

If you run out of time in a day, move blocks between days. And if you absolutely need to drop something, make sure you're dropping the block that is the least important of all of your tasks. Don't just delete the block that has the conflict; move things around to optimize your schedule.

Adopting this strategy can be hard at first. It will take time to figure out your most important tasks, optimal block size and timing, and your natural energy flow during the day. But once you dial it in, you'll find yourself not only getting more done but getting more of the right things done to accomplish your biggest goals.

Don't Let Your Meetings Fizzle. Be Sure to End Strong for Maximum Productivity

While having a good opening and sticking to an agenda is important, the best meetings have a strong finish as well.

As a coach, I spend the majority of my time facilitating meetings with senior leadership: upwards of 200 to 300 meetings a year. And over that time, I've learned a few tricks.

There are many good meeting habits. At the top of my list is having an agenda: basically a list of topics and decisions. Having a good facilitator is also a great way to boost a meeting. And there are opening conversations and ground rules as well.

However, the one thing I see most meetings get wrong is the ending. Failing to properly wrap up a meeting can be a huge mistake. Without a proper close, all of the hard work that went into your meeting will likely fizzle.

Most meetings end by people trying to cram in one more topic or by people excusing themselves to make other appointments, leaving things half-baked. Instead, take 5-10 minutes at the end of your meetings to cover these five items--you're sure to see an improvement.

1. Identify anything that wasn't covered.

It's often the case that you don't get to everything on your agenda. And if you use a parking lot (which I highly recommend), you'll have new items that need to be processed. At the end of your meeting, be sure to walk through your list of open topics and decide if they need to be on the agenda for the next meeting. You can also assign owners to work on them between meetings to keep the process going.

2. Review action items and commitments.

A good meeting has several action items and commitments. I recommend that you track them during the meeting. Either assign someone to be a scribe who can take notes or record them yourself on the wall or a whiteboard. Capturing action items and commitments is one of the keys to a great meeting.

At the end of a meeting, I like to review everyone's takeaways and next steps. This will help make sure everyone is on the same page as to who is doing exactly what and by when. I can also check my notes and make sure everything was captured. By reviewing people's commitments at the end in front of the group, you further instill a sense of ownership and accountability to the group.

3. Confirm decisions and next steps.

Every meeting has at least a handful of decisions. These can be both big and small. The challenge is to have every decision lead to both an action plan and a communications plan. Too often, teams make decisions but then don't act on them or fail to tell the people who are directly affected.

At the end of the meeting, walk through the decisions that have been made and make sure there is an owner and an action plan for each. Also, confirm who else needs to be notified about the decision that's been made. A lot of organizational drama is caused by decisions being made by one group and another group not being informed.

4. Discuss changes and improvements.

One of the habits of highly effective organizations is developing a culture of continuous improvement. They know they can be better, and they make a focused effort to constantly find ways of improving.

End your meetings with a quick review of what went well in the meeting and what didn't. Bake in the things that have proved effective for the team so you don't lose that value. And then identify one or two things you want to do differently next time. These small improvements will add up over time.

5. Confirm the date and time of the next meeting.

Finally, make sure the next meeting is on the books. Don't leave the meeting hoping someone will figure out the schedule later. While you have people in the room, open up the calendars and find the next date. Better yet, if this is a regular meeting, establish a standing date and time so that it's in the calendars going forward automatically.

Meeting habits are key to organizational effectiveness and a core part of any business. And while many people complain of being in too many meetings, the truth is that they are in too many bad meetings.