Bob MacDonald on Business

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New Year’s Day – Like Valentine’s Day – is a Fraud Holiday

January 4th, 2015 · Business Management

New Year resolutions and protestations of love on Valentine’s Day often have the veracity and shelf life of a politician’s promises at election time.

New Year’s day and Valentine’s Day have a lot in common. On New Year’s Day everyone acts as though it is a new beginning – not just for the pages of a calendar – but as a temporal catalyst to change the things we have done and do the things we have not—but should have. The trouble is, as the year slides by the resolves as often as not fade, and we end up on the doorstep of another New Year proffering a new batch of promises.

Valentine’s Day can be just as meaningless as New Year’s Day. It’s designated as that day to show your love for that “special” person (other than yourself). We are extra sweet and nice to our loved one on Valentine’s Day, but we soon backslide to the way we always are the rest of the year. Then, we gear up again on the next Valentine’s Day.

The truth is that the attitude we embrace on New Year’s Day to change and improve ourselves is precisely the attitude we should have each and every day of the year. The expressions of love we offer that special someone on Valentine’s Day are the same feelings we should convey every day of the year. If we need a special holiday to remind us to do either of these things, we will be successful in neither business nor love.

The Fraud of the New Year’s Resolution

Still, it is tradition and custom to think of January 1 as a new beginning. Ancient Romans began each year by making promises to the god Janus, for whom the month of January is named. As a matter of good business, Babylonians made promises to their gods at the start of each year that they would return borrowed objects and pay their debts.

Contemporary thinking has changed little in 5,000 years. We continue to view New Year as a time to begin anew by recalibrating and recreating our plans and goals for life and business. We have a fresh, clean slate to do everything we failed to do during the past 365. We’ve been Resolutionspardoned for our mistakes and failures and been given a kind of “get out of jail free” card. How many times have you heard people say or maybe even thought to yourself, “Come January 1, I am definitely going to … (fill in the blank) …”

As the ball drops on the new year, people are ready to forget past failures and feel recharged and energized, ready to bound forward to achieve grand new goals. Unfortunately these commitments and plans last about as long as the bubbly fizz in a bottle of cheap Champagne. It may be natural to think of January 1 as a new beginning, but doing so every year only leads to starts and stutters and very few successful finishes. Unfortunately as the years roll by, New Year’s Day for many becomes more like the movie Groundhog Day, with the same old failures and unfulfilled plans recycled over and over again.

Of course when that happens we have no one else but ourselves to blame, because we fall into the trap of believing that come January 1, all will be new, better and easier . . .that somehow the New Year infuses us with some type of mega power to be successful. Unfortunately, this illusion lasts only slightly longer than a New Year hangover.

New Year’s resolutions are sort of a personal version of a corporate business plan; with about the same level of prescient vision and results. Business plans are the ritualistic corporate activity – very much akin to using Tarot cards – believed to predict the future performance of the company. In the history of business plans – and it is a long one – never once has a single business plan been accurate. During the course of a year, there are more revisions to business plans than the former Joan Rivers had done to her face. For the most part, business plans are simply a waste of time, just as are New Year resolutions. But it does not have to be that way; either for business plans or well-meaning resolutions.

The New New Year Resolution

As with any plan it is good to have checkpoints along the way to judge progress or lack thereof. A time when goals can be reconfirmed and activity recalibrated. The turning of the calendar to a new year is as good a time as any to measure progress and identify any adjustments to the efforts, but it should be as part of a continuing plan, not a rehash of last year’s failed renewal.

There is a better way to approach a New Year resolution and actually make it work for you. In a 1980 presidential debate with President Jimmy Carter, Ronald Reagan targeted the now-famous question to voters, “Are you better off now than you were four years ago?” Posing this question turned out to have a significant impact on the election. Reagan did not use fancy charts, graphs or statistics to make the point that life in America (especially economically) was not as good as it had been; and doing so would have probably lost his audience.

People have an innate sense to know if they are better off now than they were a year ago. This is the approach that should be taken with the new year; both from an individual and business standpoint. Ask yourself: Am I better off at the start of this new year than I was a year ago? Has my career progressed? Has my company grown and accomplished more than it did in the previous year?

If the answer to these questions is in the positive, why tear things up and start with a whole new set of resolutions? Your New Year Resolution is simple – just resolve to continue to do what you have been doing. The new year is a good time to ask: What can I do to do better than I have done? There is no need to set new artificial new goals. Instead, take the concrete results already achieved and use them as a benchmark to figure out how to do better. If you are always doing better than you have done in the past, you will always be getting better in the future. There will be no need for a new resolution, only a continuing resolve. And the good news is that if you are always getting better at what you do, you will eventually be the best at what you do.

At my company LifeUSA, at the end of each year we would always look at the key benchmarks for the company: number of agents recruited, applications received, policies issued, costs per agent recruited or expenses per policy issued, etc. – and measure these results against where we were a year ago. If these benchmarks had all shown improvement over the previous year we knew we were on the right path; there was no need to tear up the pea-patch with new plans. The New Year’s Resolution for the company was always the same and always simple: Resolve to continue to improve on the benchmarks in the new year. We knew that if we kept getting better at the activities that were important to our success, then everything else would take care of itself. And it did.

When it comes to the new year, it should be a catalyst for renewal and recommitment, not reinvention or redirection. Use the holiday to confirm you are on the right path to getting better, not to find a new path.

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Failing After Achieving Success is Worse than Failing to Achieve Success

December 28th, 2014 · Building Better Business Managers, Business Management, Effective Leadership

As difficult as it is to attain success, it is not nearly as difficult as retaining it.

This week the NFL playoffs commence, leading to Super Bowl XLIX (that’s 49 for any bankers who may be reading this) in Phoenix, Ariz. on February 1. It’s anybody’s guess as to which team will prevail, but one thing is certain: reaching and winning the Super Bowl is undoubtedly the pinnacle of success for the 32 teams that comprise the NFL. It is a Superbowl Ringgoal that the entire organization of every team works diligently to achieve.

But did you know that, of the previous 48 Super Bowls, only 18 different teams have been Super Bowl champions? That means that after almost 50 years of effort, only about half the teams have been able to achieve the ultimate NFL success.

What is even more significant is that, of the 48 previous winners, only seven teams have been able to repeat that success the following year. The numbers clearly show that it’s a seismic feat for any team to attain the ultimate success in the NFL—but repeating that success is almost as rare as back-to-back earthquakes in Wisconsin.

There are many reasons for this puzzling disparity: crucial changes in team personnel, targeting by other teams, tougher schedules, injuries to key players, and that dreaded hangover of success achieved. But the real reason winning the Super Bowl is so difficult to repeat is that once the ring is secured, most teams lose the passion, hunger, commitment and drive to do the things that were done to achieve the initial success.

Just ask the athlete who’s wearing a “super bowl”-type ring from whatever his chosen sport. When an athlete who has won multiple championships is asked which championship was the “sweetest,” they will invariably say that it was the first one, because they know how much work and sacrifice was put in to win it. When asked which championship was the “hardest” to achieve they will offer that it was the last one, because they know just how difficult it was to repeat success.

And it’s not just the high-profile NFL teams that can exhibit self-destructive tendencies once success has been achieved. Such attitudes can often afflict business leaders and companies, although not so visibly.

Many who work so hard to achieve success sometimes forget that it takes even more focus and commitment to maintain success. Despite a plethora of information and mountains of advice on how to achieve success and almost as much coaching on how to turn failure into success, there is virtually no help offered on what it takes to retain success. It’s almost like success is viewed as the end of the yellow brick road and once the magic destination is reached, you can forget all about what you did to get to the Super Bowl of business success and you can pack up and go home.

In fact, more people rise from failure than survive success. That’s because it is more difficult to survive success than failure. Success is a rare commodity that few are prepared to deal with. When you are successful, you step out from the crowd and accomplish what many talk about but few do. That is well and good, but when you do succeed – you have to be prepared to deal with the consequences of success.

Any organization or individual who achieves success must be willing to build on that success, not rest on it. Only by doing so does success have a chance to be continued over time. The reality is that success is simply an indication that you are on the right road. The key to maintaining success is being alert to losing it, because success has its own way of weakening the very behavior that spawned it.

What Goes Wrong?

Why is it that so many business leaders and successful companies manage to fail the test of long-term success so consistently? Some say changed markets are to blame. Others point to increased competition, technology advances, reduced productivity, product obsolescence, even government interference as the source of the corporate sinking. But, these are Failuresuperficial excuses that highlight only the symptoms of the real illness.

After eliminating the suicidal acts of greed, blatant fraud and inbred incompetence from the list of culprits, there is a simple explanation for the failure of successful individuals and companies.

Successful leaders and companies start to fail when they fail to continue to do the things that made them successful in the first place.

Successful businesses and the executives who run them become comfortable, lazy, complacent and less tolerant of risk and innovation. Many fall prey to the illness of entitlement. They lose the very culture that produced their initial success: Doing the right thing at the right time, and doing it first, fast and often.

Fortunately, there are some simple and obvious clues that will help identify if you or your company might be in danger of losing the success you worked so hard to achieve.

Our success and the success of our company may be in trouble when:

  • We are too busy to take the time to do the little things we took the time to do in the past.
  • We begin to define our success predicated on what we have done rather than what we could  or will do.
  • We begin to feel that getting better is not as important as keeping what we have.
  • We discover our actions formerly threatened competitors but now the actions of competitors threaten us.
  • We become more concerned with what we get for ourselves than what we can give to others.
  • We begin to view process and procedure as more important than performance and progress.

And the Moral of the Story …

Never lose sight of this one thought – If you are not making history – you are history!

Those who maintain a pattern of continued success have a common trait – they see success as something to build on – not rest on. For them success becomes a nagging voice in the back of their mind that reminds them of how difficult it was to achieve and how much will be lost unless they continue to do the things that allowed them to come out on top, again and again.

They have a mind-set to continue to make history. They recognize the responsibility they have to build on the success achieved. They know their methods have allowed them to make history in the past and that gives them the opportunity to make history in the future.

If, as you achieve success, you adopt this philosophy, then you will accomplish what many who have achieved success fail to do. You will create the opportunity to maintain and even grow your success by never forgetting to do what you did to achieve success.

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When it Comes to Finding the Best Person for the Job – Potential Trumps Experience

December 21st, 2014 · Building Better Business Managers, Business Management, Improving Your Business Leadership

The most important qualification for filling a new job should be the Candidate’s potential for future growth, not past experience.

A recent feature story in the Minneapolis StarTribune titled “No Experience Necessary” extolled the virtues and success of northern Minnesota manufacturing company that has a policy of hiring people for their potential, rather than their experience. What qualified this approach to hiring as a feature story is that it is so contrary to the accepted “best practices” for hiring.

The most powerful and rarely questioned precedent for filling an open position is to find “the most qualified” individual available. All too often this fixation on the “most qualified,” will lead a company to search outside the organization because of the assumption that the value of experience gained by working for several companies is more valuable than experience with the company seeking to fill the opening. The first (and often only) commandment Hiring-Practices1in hiring seems to be is to find the person with the most experience in the same type of job and hire them. Despite this approach being endorsed by the HR automatons and those practitioners of doing it “the way it has always been done,” it is often the worst approach to hiring.

There is a certain appeal to focusing on hiring the “most experienced” person, but its greatest appeal is to serve as a convenient crutch for the insecure, unimaginative, disengaged or lazy manager to lean on. The assumption is that by hiring based on experience rather than potential, there is less work for the leader; the new person will fit right in and there is no investment needed to train and develop a newcomer.

In reality, experience in the job to be filled should be the least important consideration in the hiring process. In fact, experience should often be considered a detriment. In today’s world the established precedent of “most experienced” for filling a job opening is upside down and creates more chance for failure than success; and let me explain why.

For starters, if anyone finds themselves in need of going outside the organization in search of an experienced person to fill a job, it is a sign of failure to develop internal talent. When that happens on a regular basis it becomes a two-pronged attack on success in the future and will more than likely lead to failure. The experienced person brought in, more often than not, does not fit into the culture and the “experience” the gained was of the wrong type. At the same time, making a habit of hiring from the outside sends a clear signal to current employees that their experience – and potentially their potential – is not recognized or appreciated.

All too often this fixation on the “most qualified,” will lead a company to search outside the organization because of the assumption that the value of experience gained by working for several companies is more valuable than experience with the company seeking to fill the opening. To facilitate the search for the “most qualified” individual the company will contract with a search firm, collect and scrutinize oodles of resumes and conduct extensive interviews with perspective candidates. Resumes received are prioritized on the basis of the most qualifications and experience, rather than for the most potential for growth.

Following this “best practice” is a lazy way to fill an opening. Sure there is a lot of feverish activity following the precedent to find the most qualified candidate, but the truth is that it is a cop-out for what could be a great opportunity to build and strengthen an organization that goes beyond the single task of filling a job opening.

Now, the Right Way to Hire

Two cardinal principles should become the new approach for hiring the worthiest candidate to fill an opening. To start, every possible effort should be made to make the pending appointment from within the organization. Management should view the need to go outside the organization to find a qualified candidate as an act of desperation and a sign of developmental weakness within its culture—because it is. This type of action sends a message to all in the organization that none of them has the capacity to do the job and that the opportunity for internal development is not a priority of management.

Sure, many managers claim that they initially seek internal candidates and only look outside when it is determined that none are qualified. The problem is that most of these internal “searches” are limited and lack any semblance of creativity. For example, if there is an opening in Human Resources the “job posting” will always list experience in Human Resources as a requirement for the job. This limits the search and eliminates all individuals not currently in HR. Constraining the internal search provides the excuse for management to take the easy way out and rummage for a “highly qualified” candidate from the outside.

The way to break this stale and often fruitless cycle of hiring is to change the very definition of the type of candidate management is searching for to fill an opening. Instead of seeking the “most qualified” individual, the search should be to find the one “with the most potential for growth.” Admittedly, MostPotentialthis approach will make for more work and effort on the part of management, because it will tend to eliminate those who are already fully qualified for the job from an experience standpoint. If someone – especially from outside the company – has the experience of already doing the job, then by definition, there is not much room for growth. If they are willing to take the job, most likely it will be because they are failing, tired of the job they have with another company or they are simply looking for more money.

Finding the candidate with the “most potential” is often resisted because it can create more work – before and after the hire – for the manager. There is a misconception among many managers that once they find and hire the “most qualified” candidate, their job is basically finished. The assumption is that if the new hire is fully qualified to do the job, then all the manager has to do is get out of the way and let them have at it.

On the other hand, if the manager reaches out to find an individual who may have limited – or even no – experience in the new job, but has tremendous upside potential for growth, the manager will have to be closely involved in the support and development of the individual. The decision the find the individual with the “most potential” for growth requires vision, creativity and risk, but by accepting this challenge, the potential rewards for the manager, the individual and the organization are increased dramatically.

The vision is being able to recognize the potential in an individual, despite what experience they may or may not have. The creativity is the willingness to go against precedent and expand the search to all disciplines within the company. What law says a bright young person in the accounting department can’t – if given the desire, opportunity and support – be an effective leader in marketing? Who says that a talented young person in operations can’t be the perfect person to lead Human Resources? Why can’t a proven leader in Human Resources transfer that talent to operations? Of course, there is a risk that these individuals could become a fish out of water and fail, but if they really do have the desire and potential for growth and the manager provides necessary support and development, the risk is significantly mitigated.

The rewards for this type of rule-busting are significant: It is likely that most hires will come from within the organization, saving time and money. The individual given the opportunity to grow will be appreciative for the chance and do their best to prove it was the right decision. There will be a strong message sent to the entire organization that the opportunity for growth and development exists within the organization and individuals don’t need to look elsewhere; resulting in higher morale, lower turnover and improved productivity.

And the Moral of the Story …

The idea of using past experience as a guideline for hiring is an alluring promise as an effective way to save time, reduce risks and leap-frog the effort required to develop the potential internal talent, but it is a false promise. At its heart, this “best practice” locks a manager into a precedent that can – and does – constrain the ability and willingness to respond effectively to changed circumstances or to find a better way to do things. Managers can become successful leaders when they recognize the value of fresh potential over stale experience.


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