29-May-2003 From Dan Peña – Executive Coach and Mentor to the High Performer.
Dear Friend and Subscriber,
As I have written since 1993 and said ad nauseam for over 30 years there is never a good (or easy) time to make a difficult decision. A friend of mine recently hired the legendary Jack Welch, the former CEO of GE to perk up the employees at a large company. Mr Welch spends a good deal of time in retirement speaking on his successful methods of business. Actually the precepts have been around a very long time. There is nothing new about great leadership.
My friend worked on this endeavour over a year. To make this happen he went through several very tense moments. Firms that represent guys like Welch are hard to get along with and know they are in a seller’s market. During the long process I predicted most of the hurdles and my friend dealt with them admirably, though it aged him considerably. The event was originally scheduled for March 2002.
During the 60-minute session Welch covered some of his basic precepts of business. I have attached his salient points. Most of the points are things I and many others have said and written. It is a very good short outline to follow.
What inspired me to write about Mr Welch’s 60-minute talk was based on two emails I received back to back from two very different individuals. One, a friend I have worked with for several years and I know very well. He is CEO of a multi billion dollar organisation. I had forwarded it to him FYI. He came back with, it was "good stuff". Most FYI’s to him I receive no response. After all they are FYI’s. But the mere fact that he responded positively, and I respect his opinion a lot, made me look at the list again notwithstanding there was nothing new on the list for me. When I did I saw how good it was! Lesson learned: Always take a second look!
The other came from one of the many QLA devotees. He was writing to tell me of a recent success. He has followed the QLA methodology and has a lot of my QLA products. He also participates on the QLA bulletin board and writes me from time to time. I will address his email in a further newsletter in detail. He and his partner also took some 12 months to make a deal (an acquisition) and have been working that long on two other deals. There were many tough decisions along the way. For example there is never a good, or convenient time to tell someone, especially an individual owner, their company isn’t worth what they need. Especially when you are buying it with the seller’s own money in an earn out! I emphasise the word need, because most small to medium sized companies are sold on a basis of what they need to retire, etc. Their valuation, if you can call it that, isn’t based on any criteria learned at any business school. Another possible tough scenario is when you have to tell someone vis-�-vis their business that their son, or daughter are as worthless as breasts on a wild boar! Remember all sales of this size are full of emotions.
During this 12 month period, as if they needed more problems, their operations director, a former main board director of a big company, stole a good size chunk of money from them on the way just to make things more interesting. But they stayed focused and put the ball in the net.
Least we let big companies off the hook when talking about selling assets, many times the sales price has no relationship to value: i.e. they need a certain price so they won’t take a loss on the books; or the CEO or CFO supported the purchase and now it must be sold at a premium; or the same guys are in love with the deal and they really don’t want to sell.
Good leadership habits help you make the tough calls. Jim Ryan the great miler told me over 30 years ago, inspiration gets you going and good habits keeps you going. I have never forgotten that credo and it is one reason I work some every day, even if I don’t have to or want to. Yes there are some days, even I, would rather not work. Of course the second reason is I love what I do, so there are very few days I would rather not work, in fact I don’t even consider what I do as work!
The first and third individual both took over a year to accomplish their goal. Both used various leadership styles, to get to the goal line. Both had and have a vision and practice many of precepts listed below. Both have strategies, whilst they aren’t as large as the second individual’s they need planning and execution.
"DO IMPORTANT THINGS AND LEAVE THE REST UNDONE".
Where there is a quantum difference between #’s 1& 3 and #2 is their allocation of time on small things that in reality don’t ever have to get completed. When you are starting from a small platform or from scratch you are predisposed to doing little stuff. You have no choice, or at least you don’t think you do. It is hard for you to distinguish since you did everything in the beginning. It is difficult to form good habits of delegation, because you have no one to delegate to, but you should never forget everything shouldn’t be delegated because everything doesn’t have to get done! It is you in the leadership capacity that must make that call. It is a difficult call and some never make the transition.
Whether you are at the beginning of your growth cycle, or near the top of your cycle (and you should be selling) the attached list of winning ideas can be of great use. As with all useful ideas merely reading, and or writing them down alone doesn’t get the ball in the net. That is why there are countless poor and emotionally unfulfilled PHD’s. You must take positive action to invoke permanent lasting change! If you merely followed the last five items on Welch’s list – "Planning Your Future" – you would be far ahead of 95% of the competitors!
To Your Quantum Leap
Daniel S. Peña, Sr