Category Archives: Business Management

Is There Something Foul at Buffalo Wild Wings?

from “If You’re Not Making History, You Are History” by Bob MacDonald

 

The generally accepted norm is that success is difficult to achieve. And indeed it is, but the reality is that retaining success is far more difficult than attaining it. There is a tendency to believe that success is the end of the road, when it is really just a confirmation that you are on the right road. It may seem counter-intuitive, but surviving success is almost always more difficult than surviving failure. Fail and that is the end of it, you can move on, but success demands more and more, and that can lead to what some have called the “agony of success.”

Many prepare to achieve success, but surprisingly few prepare to deal with the way success has a way of weakening the behavior that spawned it. I have seen many individuals and businesses who made yeoman efforts to be successful, only to fall prey to the “agony of success,” once it was achieved.  All too often when an individual or company achieves success, it leads to what may be an unconscious lessening of the passion, commitment and effort that led to success. Without the threat of imminent failure present, the fear of failure dissipates and is often replaced by the curse of complacency.

The only antidote to this malady is to make it your goal to always get better at what you do, if so, you will never fall prey to the feeling that you have made it, because for you, success will be defined by how good you can be, not how good you have been. Continued success means always making history and if you’re not making history, you are history.

Buffalo Wild Wings can be a learning lesson when it comes to dealing with success

Few companies in any industry have enjoyed the growth and success of Buffalo Wild Wings. From a single store opened in 1982, just off the campus of Ohio State, BWW expanded to operate stores in every state and is now an international presence. I joined BWW as a director, just prior to its initial public offering in 2003 and served on the board for over a decade.

It was a heady time of growth. More important, it was profitable growth. During my time on the board over 1,000 new stores were opened and the initial foray into the international market was initiated. Each year increases in sales, revenues and profits were at the top of the “casual dining” segment of the restaurant industry; only outperformed by the steady increase in stock value.

From my perspective as a board member, the entirety of the credit for the success of Buffalo Wild Wings belonged to CEO Sally Smith and the outstanding management team she led. Over a long business career, seldom had I seen a management team as dedicated, hard-working and as creative as was this team.  

But as time went on, I began to be concerned about a mentality of inevitability and entitlement that had crept into the psyche of management and the board. It was not any one thing, but there was an almost imperceptible shift from the feeling that continued success was something to be earned, to something that was preordained. Management and the board began to, even if subconsciously, feel entitled to the benefits of success achieved to date. Those concerns when raised were masked by a steep increase in stock value and continued growth (although the growth had begun to slow) and were, for the most part, ignored.

The company began a steady evolution from an entrepreneurial to a corporate culture. Some evidence of this includes:

  • Senior management began (a fully disclosed and legal) systematic sale of their stock. Management was (and still is) taking its earned reward for past success, but this is the action of a manager, not an entrepreneur who believes there is even greater success in the future. It sends a subtle message to employees and others that management believes best is in the past and, “I am going to take what I can, while the taking is good.”
  • The company began to hire from the outside, rather than making a commitment to identify and develop talent from within. Successful companies maintain success by recognizing the talent of those who are committed to the company and by creating a path to advancement for them. It sends the wrong message to employees, and is a sign of a lazy management, not to commit to developing internal talent.
  • Independent members of the board of directors (only two of whom I respected) began to be more concerned with process and procedure (making sure meetings started and ended on time) and their own personal compensation, rather than challenging management to seek out creative growth options. (It should be noted that all but the two outside directors I felt were qualified have been replaced.)
  • Management and the board seemed to be satisfied with what worked in the past, rather than trying to identify new ways that would work better in the future.

Individually, these and other changes that were taking place, would not impact the success of Buffalo Wild Wings, but taken together, they started a process of deteriorating success that continues today. They may not even recognize it, but the reaction of management in this type of situation is to shift focus from seeking success yet to be achieved, to protecting past success. In short, management becomes defensive rather than aggressive. This mentality rarely works and in reality puts the very future of the company at risk.

Sharks in the water

When a company loses its drive and direction it begins to flail about like a wounded fish in the ocean and that attracts sharks who move in for the kill. Unfortunately, that is the position BWW is in today. There are predator investment groups that prowl the business seas looking for successful but wounded companies. When the target is identified they sweep in, take a big chunk of the company, and then attempt to impose their will on the company. The only objective of these killer sharks is a quick meal of increased stock price and then they move on to the next target; leaving the prey wounded and struggling to survive, which rarely happens.

Unfortunately, this is the plight that Buffalo Wild Wings finds itself in today. Management and the board are spending most of their time attempting to fend off the sharks and this leaves little time to focus on making what was a great company great again. This did not have to happen, but it is a great example of what can result when the management of a company allows itself to fall prey to the “agony of success.”

READ THIS ONLY IF YOU WANT TO MAKE HISTORY AS A BUSINESS LEADER

 

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Today times are different and making history as a business leader, calls for a distinctively different approach. The long-held dictum that if you do what is expected of you, you will do well, is no longer the sure path to history-making success as a leader.

We are not even 20 years into the 21st century and there have been more changes in business orthodoxy than occurred during the entire 20th century. The American economic system (if not the whole world) has been at war with itself. The world of accepted business mores and the time-honored requirements for making history as a business leader has been hit with the unannounced suddenness of a 9.2 earthquake. This tremor of transformation shook the traditional concepts of business and leadership to the core, and the resultant tsunami of change washed away all that had been customary and comfortable.

The game is different now; meaning that for individuals to make history as successful leaders in this environment, they are going to have to be different too. The conventional concepts of leadership skills are not going to be enough to make business history. The history making leaders of tomorrow will be those who employ new theories and altered skill-sets.

The business world is filled with thousands of well-intended, dedicated individuals working diligently to meet the standards and apply the accepted techniques of successful leadership. That is good, but it will not be enough to stand out and make history as a leader in these new times. If you want to be the one making history, you first have to come to grips with the understanding that it is no longer enough to simply follow the rules and lead like everyone else. Instead, history will be made by those willing to take a different approach than other hard-working individuals trying to achieve success.

Believe it or not, it is possible – and not all that difficult – to absorb what has been learned in the past regarding leadership requirements and then take it just one step further. Being willing to go the extra mile is what will distinguish the average leader from the exceptional one.

Traditionally, success came from doing the right things that were required to be done. Individuals seeking leadership roles were admonished to follow the rules, be ethical, do what others have done and go along to get along. That has always been the formula for success. However, to distinguish oneself as a leader who will make their own brand of history, it will require taking actions that are not required to be done. It is a different philosophy of leadership that embodies the notion that leaders should do more than is required to be done and instead focus on what should and can be done.

As just one example of what could be many, consider that everyone accepts that it is the right thing to treat employees fairly. Employees should be paid fair wages, provided with good working conditions and know clearly what is expected of them. This approach was fine for the last century, but if a leader wants to make history in this century they should do more. It’s not required by the old ways of doing things, but if employees are treated with respect for the talent they have and are rewarded for the value they add to the effort, they will be encouraged to do more and help the leader achieve success. It is not tradition, but if employees are empowered by allowing them to influence decisions and make a difference, they will take ownership, not only of their jobs, but will be motivated to help the leader make history.

It seems too simple to make a real difference, but this leadership attitude of doing more than is required to be done is what it will take in today’s changed environment to empower a leader to make history. And just remember: If you’re not making history, you are history.

Cruz Offers Evidence of Being Severely Leadership-Challenged

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It has always been my contention that one of the best ways to learn to be an effective leader is to closely study the approach and actions of those in leadership roles; both those who are effective and those who fail.

The most important aspect of leadership is the cultural environment created by the leader, because it ultimately defines the success or failure of the leader. The culture created by a leader is the conduit to communicate what the leader is about as a person, what they are for, and what they seek to achieve. Another value of the culture established by a leader is that it encourages and empowers followers to take actions they believe are aligned with the leader’s desires; even if the leader is not directly involved in the actions. As we will see, when a culture is not predicated on sound principles of integrity or the message is inconsistent, bad results can happen.   

For the leader to be effective, the message of the culture must be consistent and unrelenting. Only chaos follows when a leader is not clear about their values or does not adhere to the principles they have espoused. Observing how leaders build their culture of leadership, how they react to different situations, the examples they set for followers and how they interact with them is a great way to learn what you should do or not do as a leader.

The culture of leadership created by the leader can be for good or evil, but only those built on sound, positive principles that are unflaggingly adhered to can bring about lasting leadership success. Those cultures that are not a true reflection of the leader’s core beliefs (good or bad) or are based on less than the highest levels of integrity may be successful in the short term, but ultimately they will cause the downfall of the leader.  

My belief is that one of the best ways to see this dynamic in action is to be a close observer of the political process. Besides, when it comes to deciding who to support as a political leader, the clearest signal the candidate sends out as to what type of leader they will be, is not what they say or promise during the campaign, but the type of culture they create around themselves in order to get elected. Studying the leadership styles exhibited in an election campaign is a great way to learn about leadership, because it is very visible and it is conducted over a limited period of time.  

Leadership Cultures of Nixon and Cruz

The leadership style and culture created by Richard Nixon is a great case in point. Nixon campaigned on the theme of “bring us together,” but his real strategy was to divide and conquer. Once Nixon was elected, he created a deceitful bunker-mentality culture based on an “us against them” theme. For Nixon, if you were not for him, you were an enemy to be vanquished. The Nixon culture sent the message to followers that any action – legal or illegal – against his enemies was acceptable. This approach to leadership was effective for a while – he did win reelection in a landslide – but in the end it led to his disgrace and downfall; as well as jail for many of his followers who had bought into the flawed culture created by Nixon.  

By all available evidence, Ted Cruz is also one of those leaders we can learn from by recognizing what we should not do as a leader, if we want to be successful. Cruz seems to be building a campaign culture that Nixon would be comfortable with. While Cruz talks about honesty, integrity and the essence of purity in his conservative beliefs, the actions of his campaign workers signal that he is creating a different type of culture. The problem with the leadership culture Cruz is building is that it is based on deceit. He talks of honesty and integrity but allows (if not encourages) the opposite. The message sent by the Cruz culture is that lying, cheating, and dirty tricks are acceptable so long as they help him become the nominee.

The first evidence of this emerged at the Iowa primary when the Cruz campaign disseminated word that Ben Carson had dropped out of the race and his voters should turn to Cruz. This came along with an extensive direct mail piece about “voter violation,” attempting to confuse and intimidate voters. This was soon followed by a Photoshop altered photo attempting to show Mark Rubio cavorting with President Obama. Not long after that a video of Marko Rubio supposedly rejecting the Bible was released by the Cruz campaign. The only problem was that the video had been unscrupulously edited to make Rubio look bad.

When the complaints about this type of activity reached a crescendo, what did Cruz do? Just like Nixon, he disavowed knowledge of any of these activities and fired the senior campaign worker who released the video. (There had been no accountability for the first two actions.) This is another example of the type of leader Cruz might be if elected. Rather than stepping up and accepting responsibility for the type of campaign culture he had created and committing to make a change, he threw the guy who thought he was doing what Cruz had sanctioned via his cultural message under the bus. A leader who does not understand and control the message being conveyed by his culture is not really a leader; or will soon be a failed one.

But there is clear evidence that Cruz understands very well the Nixonian culture he is building. After all, the man he has hired to be his campaign manager – Jeff Roe – has been characterized by the New York Times as “an operative with a reputation for scorching earth, stretching truths and winning elections.” Mr. Roe is considered by many to be the current “master of dirty tricks.” And this is the man Cruz has hired to bring his brand of leadership culture to life.

And the Moral of the Story …

Remember that the effectiveness and longevity of your leadership will be determined less by the words you speak or the public face you wear. It is the culture of leadership you create that will identify your true leadership success, because it offers the real message of who you are and what you are about. That is why Cruz – as Nixon was – appears to be leadership challenged.

(It is only fair to note that the culture of leadership being created by Trump also shows signs of poor leadership. There is a difference between the two, and we will discuss the failing of Trump leadership next time; so long as he is still in the race.)

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