Bob MacDonald on Business

Sage Advice for Superior Business Management

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Consistency is to Leadership What Rebar is to Concrete

July 12th, 2015 · Business Management, Effective Leadership

In times of tension and stress – which will always come – the consistency of the leader will determine the strength of leadership.

Concrete is the most popular building material used by man. It is extremely strong from a compression standpoint. That means that concrete can’t easily be squeezed out of shape and it bears heavy loads well. But when it comes to meeting tension pressure that requires stiffness and rigidity, it tends to be weak and needs the insertion of reinforcing steel bars (rebar) to maintain its durability and strength as a building block.

Leadership is much the same. The mantel of leadership brings with it a certain natural compression of power. Those in positions of leadership are granted structural authority to make decisions and determine actions. And that works well so long as there is no tension or stress in the process of leading. But in the real world there is tension and stress that always weakens leadership that is based only on structural authority.

The Rebar For Leadership

Just as with concrete there is a form of rebar that can be added to leadership that strengthens it in any environment. This rebar for leadership is consistency. It is consistency in philosophy, principles Consistencyand actions. Leadership is strengthened when the leader communicates a clear philosophy that is never altered. Leadership is reinforced when the leader espouses fundamental principles of engagement that are adhered to without equivocation. Leadership is fortified when the leader consistently takes actions that are in harmony with a stated philosophy and set of principles.

You probably know from experience that the worse type of boss or leader is the one who is inconsistent. It is difficult to put it on the line for a leader when you don’t know what they stand for or where you stand with them. How frustrating is it to work for a boss who has a reputation for saying one thing but doing another? How do you feel about a leader who treats people and issues one way one day and another way another day? How much confidence can you have in a boss who has a history of being influenced by the last person in their office?

When you come right down to it, followers value consistency in their leaders more than anything else. Consistency is the basis upon which a leader can build trust and it is trust that strengthens leadership because it encourages followers to follow. On the other hand, consistency does not mean the leader must be a “good guy” or always easy to deal with. But it does mean that to be consistent a leader can’t be open and inclusive one day and a demanding tyrant the next day. People can learn to deal with and follow a “bad boss” just so long as he or she is consistently bad.

Lack of Consistency Shows a Lack of Leadership Ability

The best real-life laboratory for studying the impact for a lack of consistent leadership is the political world. Nothing opens up a politician to derision more than a lack of consistency. Critics know that voters yearn for consistency in their leaders, so they pounce on any inconsistency as a sign of weakness and loss of credibility.

Perhaps you remember the famous John Kerry quote in the 2004 presidential election against George Bush. Kerry said, “I was for the Iraq war before I was against it.” This apparent indecisiveness and inconsistency made Kerry look like a weak leader and this perceived unpredictability was constantly used against him in the campaign.

Then there was the famous George H. W. Bush quote given during his acceptance speech at the 1988 Republican Convention. Bush said, “Read my lips. No new taxes.” Four years later, after agreeing to Aristotleraise taxes during his first term, that quote was used by the Clinton forces to portray Bush as a weak and inconsistent leader.” Of course we could go on and on with examples of inconsistencies that have come back to damage politicians, but that is just the reality of politics. In the real world inconsistent leadership can be even more damaging. Likewise, exhibiting consistent leadership always strengthens the leader; greatly enhancing effectiveness and the chance for success.

Benefits Gained From Practicing Consistent Leadership

  • Consistency allows a leader to build credibility with followers. When followers come to trust that what the leader says, it is what the leader will do it allows them to move forward with confidence on the leader’s directives. They don’t have to waste time worrying about whether the leader will change their mind or direction.
  • Consistency allows the leader to reinforce their vision and objectives of the organization. When the vision remains constant and the objectives unvarying, followers clearly understand the decisions made and will be comfortable working toward their implementation.
  • A leader must establish a consistent set standards of performance and accountability for themselves and others. How can a leader hope to enforce accountability — something critical to success – if the standards for performance are unknown or inconsistent?
  • Consistent, transparent and open communication from a leader enhances cooperation in the entire organization that strengthens the power of the leader. When leaders fail to consistently communicate the followers are left in the dark. And when followers are in the dark about the objectives, decisions and actions of the leader they can only be herded, not led.
  • Consistent leadership above all builds trust in the leader and it is trust that gives the leader power.

In the end, effective, powerful leadership simply comes down to consistently being the same leader today that you were yesterday and will be tomorrow. When followers can rely on that type of consistent leadership – good or bad – they will follow and the leader will be consistently successful.

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Perseverance is the Secret to Success

July 5th, 2015 · Business Management, Effective Leadership

Those who achieve success have one thing in common – they have the attitude that it is better to fail than to give up and quit.

There is an interesting dynamic that occurs when someone proposes a new idea, a concept for a better way of doing things or a plan for a new business venture. The nearly universal reaction to any of these proposals is negative. Everyone seems to be at the ready to offer all the reasons why the new idea, process or business venture is wrong or will fail. This type of negative reaction to something new or different can dampen the spirits of even the most optimistic person. But it is how the individual reacts to this negative environment that either kills the proposal or brings it to life.

There are a number of reasons why many people tend to be negative toward new ideas or concepts. First off, since they didn’t think of the new idea, they may not understand it. Often, they fail to Bob_MacDonaldrecognize the need for something new. And if things seem to be working well, why would you want to change them? Lastly, many believe that since the vast majority of new businesses will fail anyway, why take the risk to do something that is likely to fail?

Those who are successful and make history in this type of negative environment are those who don’t give up—they persevere. And it’s not just that they keep trying to be successful, it’s that they can’t stop trying to succeed. They become oblivious to the negativity and press on until there is nothing more that can be done and they either succeed or fail. Their mentality is that it is better to fail than it is to give up and quit. They passionately believe that success is out there to be captured and if they have not found it yet, it is because they have not been looking in the right place, so they just keep looking.

The list of well-known individuals whose early careers were filled with rejection and failure, but simply persevered until they became successful is long and enlightening. Einstein, Henry Ford, Harland “Colonel” Sanders, Walt Disney, Winston Churchill, Abraham Lincoln and scores of others are all people we equate with exceptional success and even though their triumphs were in different fields, they all had one thing in common – they persevered against rejection and failure.

The quintessential example of perseverance was arguably Thomas Edison. Early life failures for Edison were legendary. Expelled from virtually every school he attended for being “unteachable,” Edison went on to be fired from almost every job he ever held. But Edison had one passion – inventing. No matter how many rejections received or failures experienced, he was never discouraged or dissuaded from seeking the next invention. In the end, Edison was granted more patents – 1093 – than any other individual. Not all these were memorable, but when you take into account that some of them included the light bulb, the alkaline battery, the electrical grid and the phonograph, it shows what perseverance can lead to.

The ability to persevere not only depends on the ability to put up with a negative environment for an extended period of time, but also the ability to educate and convert others to the new ideas.

When I joined with a small group to start a new life insurance company – LifeUSA – there was an abundance of naysayers. Not only was there near-unanimous negativity to the very idea of starting a new life insurance company, there was even more vociferous rejection of the LifeUSA concept of employee and agent ownership, the focus on annuity products to reward people for living, rather than dying, and the idea of competing against rather than with other insurance companies.

The founders of LifeUSA lived in a negative world from the get-go. Yet we believed in our ideas and persevered. To be successful required us to win over others with the idea that there was opportunity for a new life insurance company. We had to convince others that taking ownership in a new company was better than taking a job with an old company. Agents used to selling the old products had to be persuaded that the new products were better than the old and then taught how to sell them. These were not easy tasks and efforts to do so were constantly greeted with a pessimistic reaction. But we persevered. We did so by adopting a very simple attitude toward rejection. When our ideas were presented and then rejected, we simply said, “Next.” We firmly believed that if we kept moving forward presenting our ideas to the next person, we would ultimately prevail. We were so convinced that our ideas were right and the old ideas were wrong, we could not be deterred by negativity. And in the end, our perseverance was rewarded.

Perseverance Does More Than Help You Succeed

When you are willing to preserve in the headwind of negativity it focuses your mind on the goal even more and provides a type of perverse drive that increases your motivation to prove that others are perseverewrong. When those you have enlisted in your effort to be successful see that no matter how difficult and negative the times may be that you won’t quit and persevere till the end, it builds trust and respect that motivates them to persevere as well. When you have the will to persevere – even to the very end – it reinforces your focus on the goal and helps you understand that success will be determined by what you do, not what others say.

The lesson is simple: Success does not come easily, but it will not come at all unless you are willing to preserve in your desire and effort to find it.

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When People Say, “You Can’t Do that,” it is Usually Because They Never Thought To Do It

June 28th, 2015 · Business Management, Improving Your Business Leadership

Success is more about doing what others have not thought to do, than it is about trying to do what literally can’t be done.

No one knows how many great concepts, ideas, careers and enterprises have languished because individuals have fallen prey to the admonition of others that what they want to do “can’t be done.”

It is true that there may be many things we can’t do, but that has more to do with physical attributes – or lack thereof – than it does the ability to do something that has not been done. For Reflectionexample, you’ll probably never be able to throw a 97-mile-per-hour fastball no matter how fervently you may want to. You probably can’t hit a 97-mile-per-hour fastball either. But when you put those physical attributes aside, most of those who tell you that what you want to do can’t be done, it is simply because they don’t know how to do it. The assumption is that if they can’t do it, then you can’t do it either. And in the end, this is what separates success from failure, winners from losers.

New Rules for What Can be Done

Doing what others think can’t be done requires three crucial ingredients. First, you need the capacity to recognize when the rules that defined what could or could not be done have become outmoded and should no longer be followed. Second, the timing has to be right to do what others believe can’t be done. Thirdly, those who are successful doing what others say can’t be done also have a plan for how to do it. But with knowledge, good timing, creative planning and effort, it is amazing what can be done.

Nowadays, we have a name for those prescient individuals who capture these three attributes. They’re called “disruptive innovators.” And they’re radically changing the very definition of what can and cannot be done in business.

We take the existence of FedEx and the services it provides for granted now, but that was not the case in 1965 when Fred Smith envisioned a company that could deliver packages and letters overnight. No one in the “mail” business, or any other business for that matter, believed it could be done. Not even in 1971, when on its first day of operation FedEx used 14 planes to deliver 186 packages to 25 different cities, did many believe it could be done consistently. From conception to execution, Fred Smith heard only “you can’t do that.” Yet, that idea that couldn’t be done was done and in a short 10 years FedEx changed the definition of “mail” and became the first company to generate over $1 billion in revenues. Talk about disruptive innovation. FedEx is the very definition.

The reality is that if Fred Smith had proposed his idea in 1950, the naysayers would have been right – it couldn’t have been done. The technologies and facilities to support his idea simply did not exist. So the rule, “you can’t do that” would have been valid. But Fred Smith was in the right place at the right time to break the rule, because technology was available to make it possible. In 1965 Smith was not the only person who could have created an overnight delivery service, but he was the only one who recognized that the “you can’t do that” rule was obsolete; even more importantly, he was the only one who figured out how to do it.

“You Can’t Do That” Is Personal

The reason I find the “you can’t do that” admonishment so annoying is probably because I’ve heard it so often in my career. This was especially true when I formed a small group to start a new life insurance company in 1987. At the time there were well over 1,000 life insurance companies operating in the United States and the industry was dominated by over 50, well-established insurance giants. There seemed little need or opportunity for a new life insurance company. On top of that, the natural barriers to entry in the insurance industry such as heavy regulation and the need for huge amounts of invested capital, made formation of a new company almost as impossible as many thought. Almost.

I guess it should not have been a surprise that every time I broached the idea of a new life insurance company it was greeted with, “You can’t do that.” But the truth was another story. The established Innovation-onegiants of the industry looked strong – even invincible – from the outside, but the reality was that they were weakened by slumbering in a world that was awake with change. The insurance industry had done so well for so long (with little real competition) the leaders of the industry failed to recognize changes taking place in the market and even when they did, chose to ignore them. They were wedded to doing what they had always done because that had always been what they did; the status quo was pleasingly comfortable. Only when problems became obvious to everyone did a clarion call emerge from industry leaders suggesting the solution was to, “get back to the basics.” What these industry leaders sadly did not realize, however, was that the basics of their industry had changed.

It turned out that this was the perfect time to start a new life insurance company. Not a company to do what the other companies were doing, but a company with a plan to do what most said couldn’t be done by taking a different approach to products, distribution and corporate culture.

And it worked.

As the established giants in the insurance industry began to teeter and even fail, our company – LifeUSA – formed as a new life insurance company not only survived but became one of the most successful companies in the industry. It is fair to say that by focusing on products that rewarded people for living, rather than dying, LifeUSA forced the entire insurance industry to change.

As with FedEx, LifeUSA could not have happened even 10 years earlier, but the timing was right and even more important was that the timing of the moment was recognized and a plan to take advantage of the moment was offered, even though all were saying, “You can’t do that.”

And the lesson is …

Never be discouraged by the naysayers who are wont to tell you that you can’t do that. In truth, the more who tell you so, the more likely is the opportunity to do what they say can’t be done. Always remember that most will tell you that it can’t be done because they have not thought to do it and even if they have, they have no plan to do it. In reality, you only can’t do something if you don’t know how to do it. If you can recognize the right time to do what has not been done and have a plan to do it, you can do what others say can’t be done.

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