Phil Hauck's TEC Blog

Sunday, November 18, 2012

On the Packers Brand ... and Branding!

The Packers brand is now the Number One Brand in all of U.S. sports, not just football ... ALL of U.S. sports, says ESPN.    Forbes says it's the 17th most impactful brand in the WORLD.  The website is now first in the NFL in hits, up from sixth a few years ago.  Indeed, when you look at number of web pages accessed, it's number 12 GLOBALLY!
Tim Connolly, in his third year as head of marketing for the Packers after 18 years with three other NFL teams, explained how he drove that result in a presentation to St. Norbert College's Breakfast & Strategy group on Tuesday, Oct. 30.
He said that his charges when hired were to:  (1) Deepen the regional brand impact, (2) expand its national impact, and (3) earn more dollars from branding.  The implications of how he thinks about branding and drove what they did is enlightening for any business.
First of all, you put yourself in the head and heart of the customer, the fan, and understand all of the pressures that weigh upon him/her in deciding how to interface with the Packers.  He divided it into short- and long-term challenges.  He knew he was dealing with a brand already very firmly entrenched in the Wisconsin and national psyches, so how to build it further and how to extend its impact?
Short-Term:  When he arrived, a trend was eroding demand for premiere seating ... luxury boxes.  He had 16 of them empty.  A second was insuring that the Game Day fan experience could cope with the 50' flat-screen TV on the wall at home, where the game could be viewed very inexpensively and comfortably.  How to create compelling excitement and minimize hassle?
First of all, he hired two 30-year-olds with success in sports event selling and turned them loose.  They sold the 16, and have since been promoted to where they now oversee selling of sponsorships and other high-level initiatives.  The Game Day experience is being enhanced by surround sound, the two new huge scoreboards, a larger south end zone entrance gate with escalators, and more strategically located concession locations to minimize waiting.  Indeed, because many of the concessions are manned by volunteers, many of whom only work one game and are, thus, very inefficient, he is considering providing monetary rewards to the volunteer organizations if their staffers are experienced and, thus, more efficient.
Long-Term:  His challenges are to create new streams of revenue, and to sell more Pro Shop merchandise in an already crowded marketplace.  One initiative has been to expand the TV viewing geography to include Iowa and Omaha, neither of which encroaches on nearby NFL cities of Chicago, Minnesota or Kansas City.  This added "reach" will result in engagement of more fans, and more Pro Shop purchases.  The website has been significantly upgraded, moving from strictly a "news" outlet to one with video, opinion and other fan interests (such as the location of the nearest of 1000 Packer bars in other cities.)  That is what has driven the effectiveness of the website; time spent per visit has increased almost 25%.  In addition, his department has developed very active Facebook and Twitter initiatives that create even more frequent engagement.
A final observation in response to a question:  There is a big difference between the community-owned Packers and every other NFL franchise, he says.  "In the others, the fans begrudge the owner having a profitable enterprise.  In Green Bay, the fans want to make sure the team prospers.  I've watched situations where after a news report that some other team is selling more merchandise, that fans flock to the Pro Shop to buy jerseys so the Packers can once again be on top.  Amazing!"

Also, from Madison branding expert, Fritz Grutzner of Brandgarten:
•  "People don't buy the product.  They buy the Story that surrounds the product."

Where People Live On Average To 90 ...

There are five places in the world, where people live on average to 90, and which have the highest percentage of centenarians.  A man named Dan Buettner researched the commonalities between them, and concluded they had these 9 characteristics:
1.  Move Naturally.
2.  Have Purpose in your life.
3.  Shed Stress.
4.  Stop Eating when 80% Full.
5.  Eat Plant-based Foods.
6.  Drink Alcohol Moderately and Regularly.
7.  Belong to a faith-based community.
8.  Put Family First ... keeping aging parents and grandparents close.
9.  Participate in Social Circles.
According to Buettner and his studies, you're likely to live 10-12 years longer if you follow these practices.

From M3, Madison-based Health insurance consulting organization, regarding their client base ...

In 2011, the average cost per employee for health insurance (the total of both employee- and employer-paid portions) is:
Public Employees $16,017  (up 8.6%; higher because of greater benefits and larger employer-paid portions)
Private Sector $9,814  (up 7.5%)

Keys to Leadership Success ...

"I've never worked with a client who used Personal Mastery and Personal Awareness as a Culture who wasn't successful," says James Newton, head of Newton Learning Systems and former head of TEC's Chair training.  Indeed, he says, "those who do this well significantly outperform their TEC peers, who in turn significantly outperform average non-TEC companies."

In a recent Wisconsin workshop, he said the following should be key elements of CEOs' efforts at Personal Mastery/Awareness.  Embracing and displaying them, he said, convey to the rest of the organization that they critical habits, resulting in energized employees.
•  The most important one is Self-Disclosure/Vulnerability.  Believe it or not, it's THE key to a high performance TEC Group and a high performing company!  Why?  Because it yields Trust and Caring and Support!  If you are emotionally open to your fellow executives and employees, it not only shows them that you trust them, but they will feel that you are Authentic.  In return, they will be both caring and, most importantly, supportive of your efforts.  It makes people "all about others."  The result will be a collaborative, peak-seeking organization presenting an incredibly appealing and energized face to customers and prospects.  
•  It's Tough, but Avoid being Judgmental.  "In any situation, the person who can most accurately describe reality without laying blame will emerge as the leader,"  a quote by Edwin Friedman.  Very important ... perhaps the secret to a leader's ability to not being so separate from his/her people that critical communication doesn't occur.  It's also a key to effectiveness:  Laying blame is judgmental, and immediately causes recoil in the other person.  If you avoid any judgment about the "person," but only about the idea, then the personal relationship isn't impaired and effectiveness is more likely to occur.  One technique:  Say, "I feel ...," rather than "You are ..."

Approach to the Fiscal Cliff: Studies show ...

The Fiscal Cliff is apparently all about raising income taxes and figuring out what spending cuts to make.  Consider these approaches, based on studies of what has worked and what hasn't:
Tax Structure Changes:  A 2008 study (before the "Great Recession") of prior country experiences by Jens Arnold for the Organization for Economic Cooperation & Development suggested the most effective sequence to achieve growth via structure changes is:
First:  Property taxes and other recurrent taxes on immovable property are the most "growth-friendly."  They doesn't take away personal income already committed for household spending.
Second:  Consumption taxes ... if people spend, tax that ... with exemptions on survival requirements like food, medicine.
Third:  Personal income taxes.
Last:  Corporate income taxes.  Taxing businesses' net income prevents those dollars from being used to create jobs.  They "appear to have the most negative effect on GDP per capita."
Spending:  Studies by Reinheart/Rogoff and Kumar/Woo:  At 90% debt-to-GDP (the U.S. is at 103% and growing), "the debt effect becomes large and negative" ... causing "average growth to fall significantly."
A Biggs/Jensen/Hassett review of 21 countries' experiences indicated "the more aggressively a country cuts expenditures, the more likely it is to successfully reduce debt in the long-term."  Where successful consolidation has occurred, the typical relationship of revenue from spending cuts vs tax increases is 85/15.  "In particular, cuts to social transfers, largely entitlement spending and the government wage bill, are more likely to reduce debt and deficits than cuts to other expenditures. ... Cutting government spending reduces GDP growth in the short run, even though it increases the likelihood of economic growth in the long run." 
These are from the 2011 book, The 4% Solution.
        So, what approaches are our representatives in Washington taking?

Monday, October 22, 2012

George McGovern on Regulations ...

George McGovern died over the weekend at age 90.  He was a Liberal Lion, who came to some conservative understandings late in life.
A few years after he left the Senate after representing South Dakota for 18 years, he fulfilled a lifelong dream by, with others, purchasing the Stratford Inn in Connecticut, complete with a manager and staff.  It failed (with help from the 1991 downturn).  
But he was very impressed with the burdens of regulations.  After the failure, he wrote a lengthy article explaining what he went through, including this question:  "Can we make consumers pay the higher prices for the increased operating costs that accompany public regulation and government reporting requirements with reams of red tape?"
Listen to him, about 20 years ago:
•  "The papers today are filled with stories about businesses dropping health coverage for employees.  We provided a substantial package for employees.  However, were we operating today, those costs would exceed $150,000 a year ... (and there is) no reasonable way for us to absorb or pass on these costs."
•  Despite bankruptcy, "we are still dealing with litigation from individuals who fell in or near our restaurant.  Despite these injuries, not every misstep is the fault of someone else.  Not every such incident should be viewed as a lawsuit instead of an unfortunate accident.  And while the business owner may prevail in the end, the endless exposure to frivolous claims and high legal fees is frightening."
•  "'One Size Fits All' rules for business ignore the reality of the market place.  And setting thresholds for regulatory guidelines at artificial levels --- e.g., 50 employees or more, $500,000 in sales -- takes no account of other realities, such as profit margins, labor intensive vs. capital intensive businesses, and local market economics."
•  "The problem we face as legislators is:  Where do we set the bar so that it is not too high to clear?  I don't have the answer.  I do know we need to start raising these questions more often."
-- Access George McGovern's article by Googling:  A Politician's Dream is a Businessman's Nightmare, by George McGovern, 1992.

Sunday, August 5, 2012

On ObamaCare

Please notice, above all the discussion of what's to come, that there is NO MANDATE FOR PEOPLE TO AT LEAST TRY TO BE HEALTHY AND FIT, TO NOT NEED THE SICK CARE SYSTEM ... or at least to need it less and less!  

Lemonade Freedom Day is August 18!

Last year's event was the first ever.  It's designed to highlight small business regulations that inhibit creation of businesses that will provide jobs.  It starts with wondering why a community puts restrictions on the ability of a kid to set up a lemonade stand.  Yet, they do ... in the name of fairness to retail stores, to food safety, to licenses, to ...
Last year, police in Appleton ordered kids to close their concession they had been operating in conjunction with a nearby old car festival for several years ... but quickly apologized, saying it was a mistake.
Go to
It's a real issue, a real opportunity!

Moving Employees To Fitness/Wellness!

Dr. Paul Summerside, CEO of Aurora BayCare, Green Bay, had a number of interesting insights:
•  In regard to Fitness/Wellness of their employee group (about 450 at BayCare), they take the position that "It's All About Nutrition and Fitness."  If a person does the right things in those areas, all the other benefits will follow and they will need the medical system services, including prescriptions, at a bare minimum.  Thus, they incent for Fitness ... and evaluate QUARTERLY employees on a range of fitness performance elements ... situps, pushups, step test for aerobics, and the like, with performance thresholds adjusted for age.  The better a person does, the less he/she will pay for his/her health insurance plan ... and has a chance QUARTERLY to show improved fitness, and earn an even lower premium.
•  "Trying doesn't matter.  The only thing that matters is success."
•  As an employer, "if you don't change the actuarial metrics of your employees, don't expect any insurance cost improvements."
•  As an employer, "we feel the responsibility to put in place programs and incentives that help them achieve success in these areas.  But we will reward only on achievement, not 'trying.'"
•  "People have to know in advance what they'll be measured on, and the consequences.  The tests have to be reasonable and achievable, and easy to understand."
•  There are FIVE AREAS you have to impact:  OBESITY, EXERCISE, SMOKING, ALCOHOL in moderation, and SEAT BELT USE.
•  From a medical cost standpoint, this is what you are dealing with relative to norms:
--  Obesity will cost you about 40% more.
--  Smoking will cost you about 10% more.
--  Exercise will reduce your costs 10%-15%.
•  Of interest, even though they are a medical organization, they don't include Health Risk Assessments as part of their program.  They feel that the knowledge gained about risk factors in an HRA should be already known  and worked on with a physician, and that it drives higher costs through use of drugs to control risks ... rather than a better lifestyle to do it (nutrition, volume, vigorous exercise).

To Sell Your Point of View More Effectively...

        Patrick Renvoise and Christophe Morin of SalesBrain, San Francisco, have very impactful insights into the best things you can do to create what for most is the impossible ... to get past logic to the emotional techniques that will get the other person to accept your ideas.  In other words, to sell more effectively, more quickly.
        Their analysis of how the brain works yields this:
      The CORE STIMULUS that creates a reaction is FEAR ... of significant loss or the possibility of not surviving.  That’s your driver for crafting most of your most impactful messages.
So, what are the stimuli that cause reactions?  They are these ...
1. ME: People intensively look for what is good for ME! So, don’t talk about YOU, and how good you are.
2. Contrast: They react to major contrasts ... so show what the customer doesn’t want to happen, and contrast it what the customer wants to happen., etc.  No Contrast, No Decision.
3. Concrete: Tangible.  Make it real.  NOT abstract.  Make it SIMPLE, SHORT.
4. Beginnings and Ends: Attention is highest at the beginning, but wanes very quickly.  It comes back when there is an indication that the end is near:  “In Conclusion,...”  So, tell them at the beginning your takeaway message, repeat it at the end ... and in the middle repeat it several times.  Very important for your sales presentations.
5. Visual: Create the picture. The optic nerves deliver messages 25x faster than the auditory nerves.
6. Emotion: A Killer. You can’t reach the Old Brain without SOME Emotion, which enhances memory/retention. Add emotion to your presentation!
Another Alert:  The brain doesn’t easily hold lots of alternatives.  But it starts with those with the most emotion attached.  For example, consider that your brain has a drawer titled “Colas.”  The only brand in it is Coke.  (Yet, Pepsi is preferred by 70% in taste tests.)  Why:  Branding!  You want to be the only brand in your drawer in the customer’s brain!


•  Per David Oxford:  "Being listened to is so close to being in love that most people can’t tell the difference."
•  Per Jim Cederna:  "If you listen HARD, it usually defuses the anger."

#1 Driver of Employee Engagement!

        According to a Towers Perrin study, “The Number One driver of Employee Engagement is the belief that senior leadership is sincerely interested in my well-being.”  And an engaged employee, studies confirm, is at least 20% more effective than one who is only partially so.
        CARING:  The Fundamental Relationship Question is:  “Do You Care About Me?”  John Maxwell, leadership guru:  “People don’t care what you know until they know how much you care.”  Usually the leader does, but often FAILS TO DEMONSTRATE IT!
        How do you do that?  What’s expected by employees?  Says one:  Be available to employees, and when they ask for job-related help, get involved.  Get in the trenches.  Show you care that they are able to do their job effectively.  The word spreads quickly.  Also, LISTEN attentively, with intent.  Too often, “we don’t listen to understand.  We only listen to reply.”  David Oxberg:  “Being listened to is so close to being loved, it’s often hard to tell the difference.”  Hawthorne Effect:  It’s not about the reward.  It’s about reacting, in showing you value the person.
        Remember BOSS-PHOBIA:  No matter what, you’re the power figure; you can diminish and fire at whim;  you have to create TRUST, which you do by consistently meeting expectations of treatment.
        Also, you can NEVER just be yourself.  Employees are noticing EVERYTHING that you are, say and do.  EVERYTHING.  You’re ALWAYS on stage, so you have to ALWAYS PLAY YOUR CEO ROLE!
        -- Portions of the above were stimulated by TEC resource Jack Altschuler's presentation, "Fully Alive Leadership."

        •  Design an organization where people can flourish as themselves.  Know what a person is FIT for, which is a Mindset.  When a person’s daily tasks are NOT aligned with their core values, they will create drama by:  Re-defining their position, being disruptive, failing and/or leaving.
        •  Reminder:  Once you have eliminated your time-consuming and ineffective D Players, which impresses the organization, you will feel inclined to work more closely with the C Players, who are the bulk of your workforce.  But all that effort will result in only marginal improvement.  Instead, spend time with the A’s and B’s; when C’s see you doing that, they will improve on their own.
        -- The above was stimulated by TEC resource and group chair David Belden, in his presentation on "Core Values Alignment."

Tuesday, May 22, 2012

On The Recall Election!

        On June 5, we in Wisconsin have a Recall Election ... and there is information not being talked about that needs to, as follows:  The reason for the Recall election was the reduction in collective bargaining rights for public employees, although that reason is now being downplayed in favor of a job creation one.  As you know, I believe that employees need to be educated on some of the background about collective bargaining for public employees ... because it is being touted as a "universal worker right" by national figures ... when in fact, it isn't and shouldn't be, for these reasons:

      As natural as it seems to many these days, strong collective bargaining for public/government employees wasn't a "no-brainer" for many years (and still isn't for two-thirds of public employees).  The reason:  The fox in the henhouse.  Unions can take a portion of their dues, and use them as campaign contributions to supporters running for a school Board or Legislature, those who then have the responsibility of negotiating and/or approving the union's contract.  The supporter is then, hopefully, more beholden to the union positions and more amenable to their wants.
In the heydays of unions, when corporate abuses were manifold and a host of employee protection laws were put in place, President Franklin Roosevelt, a significant supporter of private sector unions, wrote the case against public sector unions ... primarily for the reasons just cited.  It was supported by subsequent national labor union leaders.
This all changed in 1959, in Wisconsin(!), when politics intervened.  Wisconsin became the first state to permit collective bargaining by government employees, as payback for union support and power in the state campaigns.  (Indeed, the predecessor that became AFSCME was formed in Madison in the 1930s.)
In 1960, President Kennedy approved collective bargaining for federal employees due to the support he received from unions during his presidential campaign.  But in 1977, President Carter and Congress reduced what collective bargaining could include to eliminate much of this effect because of the number of laws that had been put in place to protect workers.  
In other words, the creation of collective bargaining for public employees was due to partisan politics, not logic.
Today, only 35% of public employees are represented via collective bargaining yet, on average, all public employees as a collective group have greater benefits, especially upon retirement, than private workers do.

Three other points:
        1.  Two-thirds of public employees, and 93% of private workers ... aren't unionized and apparently don't feel the need to be.  They work well, directly, with their hierarchy to do what the organization needs to do to compete and service its customers.  They are protected by labor laws created due to the abuses of the early 20th century, and owners know that they succeed only if they create a great place for their employees to work.  Unfortunately, at least two generations of Wisconsin public employees haven't experienced that, have always been represented by a union during their entire work life ... and don't know that the alternative can be even better and more self-fulfilling.
        2.  Union leaders need to protect their jobs and their livelihoods.  The key to that is the automatic union fee deduction that they negotiate for the employer to take from the employees ... all of them.  It feeds the union, as well as the political contributions they make to create the "fox in the henhouse" effect.  It's very important to them ... indeed critical ... to get this capability back.
        3.  Lastly, think of an organization's purpose.  It is to serve its customers in providing sufficient value in a constantly upgrading marketplace so that the customers keep coming back.  That's what the "business" does.  So, who is the customer of the union?  It's the member.  The union's objective is to serve the interests and protect the livelihood of the member.  It is NOT focused on the employing organization's self-interest ... serving its customers.  That's NOT alignment of interests.  IF the employer is not abusing its employees, there should not be a union.  Today, organizations don't survive and thrive if they aren't treating their employees well;  certainly, there are breakdowns but increasingly it's a joint effort to serve the customer well and reward the employee with both good working conditions and commensurate rewards ... which avoid the need for a union.
        That's why our public employees and their union leaders are fighting so hard to get the capability back.  Our public institutions will actually work better, more effectively, in serving us, their customer/public, without a third-party union contract to hold them back ... and there are plenty of ways, used constantly by all other organizations, to correct leadership/ownership when the relationship isn't a rational win/win.
        (If you'd like another resource that well explains this phenomenon, Google "Collective Bargaining Public Employees Yuval Levin."  Yuval Levin developed his writeup in February 2011, at the peak of the Madison protests.  He is a fellow with the Ethics and Public Policy Center in Washington, DC.)

Saturday, April 28, 2012

Harvard's Kellerman: It's Followership, Not Leadership!

We hear a lot about the impact of Leadership, but what about Followership?  Barbara Kellerman, a Harvard public policy professor, has done research on why Followership has been a force to be reckoned with for centuries, usually in the form of revolutions, but is now integral to organization development and success.  Indeed, she says that all Leaders have to take into consideration at all times two other impacts, the Situation ... and the role of the Followers.
Followers make things happen, and if they're to be most useful, need to be involved in the decision-making process as well.  So she told a recent St. Norbert College audience.  "Followers are changing leaders," she contends.
She has created categories of followers, the most useless being the Isolators, who are totally disengaged, and Bystanders, who don't provide input or help but whose presence actually provides "tacit support" to the Leader's "status quo."  On the other end, even dangerous, are the Diehards, who are totally consumed in their issue (on the positive side, think Nelson Mandela or Gandhi). 
Key players are Participants and Activists, simply different degrees of people who are involved, engaged, supportive.  They are front line with customers, and know what's needed, what works, what's not being done, and what's being done poorly.  They are vociferous, and create the "situation" which the Leader must listen and react to.  Good, effective Leaders know this ... and do listen and react.  It's how they make their assembly line, department, division and company thrive.  
When Leaders don't listen and react, when they ignore their people, when they treat people poorly ... their organizations do poorly, and in the past have created the need for unions as protectors.  Today that's far less true.
Followers have become as important as Leaders.
-- Barbara Kellerman is a long-time lecturer in public leadership at the Kennedy School of Government at Harvard.  Her most recent book is "The End of Leadership (Harper Collins, 2012).

Air Wisconsin's Rankin: Keep Flexibility and Options

The three planks to Air Wisconsin's strategy, explains CEO Jim Rankin, are Our Team, Our Product, and Our Future.   
        Our Future is the interesting one.  He told a St. Norbert College CEO Breakfast & Strategy audience that thinking about airline industry trends drives many of his strategic decisions, which it obviously should ... and with the objective of maintaining Flexibility and Options.  That has played out so importantly in the past that today, Air Wisconsin is the second oldest airline, at 47 years, never to have experienced bankruptcy.  Since 1978, 119 airlines have gone bankrupt.
It especially showed up in 2005 when its major partner, United, was in bankruptcy and requiring such major cost givebacks that Air Wisconsin would have gone out of business itself.  Instead, because it had saved $125 million in the bank, it had the flexibility to loan that much to US Airways to keep it out of bankruptcy.  In doing so, its quid pro quo was that Air Wisconsin would have the "right, but not the obligation" to become US Air's major regional feeder ... keeping its options!  Several weeks later, it took that option when United pushed them to the brink ... signing a ten-year contract with US Air.
        It's interesting that maintaining fiscal health (e.g., a large savings account) is critical to having "flexiblity and options" regarding the future.  It shows up in so many places. Another way the "flexibility and options" theme is driving them:  In today's negotiations with the company's five unions, it is obtaining what it calls a "growth" clause.  If the airline is able to grow and add planes, that the contract costs for additional employees will be more flexible, even lower if necessary, to cope with the industry's tightening cost model.
During the past decade, he said, Air Wisconsin has operated under a Fee-For-Departure business model, which it initiated in the industry, whereby it contracts its entire fleet to a carrier for a price, thus firming its revenue stream expectations, and shifting its focus to cost control while providing leading service.  Now, he sees the emerging model as a Collaborative Cost one, where US Air and Air Wisconsin (and with United for its ground handlers contracts), to develop system improvements that reduce costs even further.
Today, Air Wisconsin is headquartered in Appleton, but its 2800 employees are spread across the eastern U.S., flying airplanes for US Air, and providing ground handling capabilities for United ... for more than 1000 flights daily.  It has no operations any more in Appleton or Wisconsin.
The major takeaways from Air Wisconsin's experiences, Rankin said:
1.  In negotiations, you ALWAYS have more leverage than you think.  Don't yield too soon.
2.  NEVER bet the farm.  
3.  Grow ONLY where there is a lear path to profitability.  There will always be too many unknowns that will bite you.
4.  Build and nurture good relationships with your key partners, starting with your employees.  Help them out when they have a need.  It will come back to reward you when you are in crisis.

Sunday, March 11, 2012

Myth: A Better Mousetrap Does NOT Necessarily Attract A Crowd!

Last week, Craig Dickman, CEO and founder of Breakthrough Fuel, Green Bay, spoke to a St. Norbert College audience about Innovation and its challenges.

Important Quotes:
• “Different isn’t always Better, but Better is ALWAYS Different.”
• Myth: “Build a better mousetrap, and the world will beat a path to your door.”
• “We want to innovate. We just don’t want to be the first one.”

Craig told the story of how he and his team worked through the challenge of introducing something new to the marketplace. Innovating the idea was the easy part.

The Easy Part
Oil prices have periodically doubled or tripled since the early 1970s as producer countries become in turmoil. When Craig was CEO of Paper Transport, a trucker, he encountered a customer who didn’t want to talk to him about trucking. He had just been chewed out by his boss because fuel prices had increased, and he had no control to change or offset that. The adage: You can’t control energy cost increases; you live with them, and pass them on as a surcharge.
One form of Innovation involves breaking the mold: Doing what was assumed can’t be done!
He went back and with others, began brainstorming how the fuel price-setting mechanism could be short-circuited for shippers’ benefit if you knew the anamolies within the price-setting mechanism. It’s similar to arbitrage ... taking advantage of market anamolies that others don’t see, haven’t seen yet, or don’t take the time to deal with.
They developed algorithms to take advantage of price cost disparities, creating a way to save fuel costs for long-range shippers by creating deals with fuel companies that yielded these savings. The savings per shipper could range into the millions of dollars.

The Hard Part
That was the easy part. Now, they began contacting shippers and truckers who had complained about the rising costs in the past. “Great idea,” they said. “Who’s doing it and how does it work for them?” “No one is.” “Oh. (pause) We want to innovate. We just don’t want to be the first one.” As it turned out, making the dollar savings wasn’t that important ... because it might involve risk.
Instead of complainers, they began looking for prospects who embraced change, who had already demonstrated innovation tendencies.
They found P&G, one of the world’s largest companies, and of necessity a serial innovator because it has great competition and is publicly-llisted. “You know that we move markets. Why didn’t you come to us first?”, they asked. Sales cycle length: four months!
But with mammoth customers comes notoriety ... and opposition from those who profit from the current ways of operating. Soon, his customers and prospects were getting phone calls from current suppliers indicating that if they actually retained Breakthrough Fuels, they would pull their support. They had been pressured by the current state profiters. Craig spent much time visiting customers and prospects to counter the calling campaign. Some customers dropped them, but some didn’t, saying “No one tells us who we can buy from.” Relationships matter.

Stay Radical
One of the Breakthrough Fuel teams’ discussions: Should we react positively and be less radical in what they were offering ... to move to the center. They sought advice. The result: No! Doing that might keep some customers, but it would demoralize the company and defuse the brand message. “It was important strategically to stay on message, because it’s what drove our passion and that’s what our customers want. We will attract customers who appreciate our passion and commitment, hopefully enough of them.” So, they kept telling their story, and telling it louder and more frequently to gain awareness of prospects who would be open to change.
And it’s worked. Today’s lineup includes many well known brand names.
Their next, and ongoing challenge: “These customers appreciate our inventiveness, but as market leaders in their own right, they want more and more innovative ideas from us.”
Summarizing his messages:
• Seek Out and Work with Leaders ...
• Believe and Have Passion.
• Market will be your Scorecard.
• When successful, begin innovating even faster.

Tuesday, February 21, 2012

Mike Haddad, Schreiber CEO, on 'Willing Followers'

Mike Haddad, going on four years as CEO of $4.5 billion Schreiber Foods, explained his approach to senior talent evaluation at this morning's CEO Breakfast & Strategy session at St. Norbert's.
When he became CEO, he said, one of his efforts was to evaluate the senior team that he inherited. All had gotten their positions through high performance, hard work and loyalty over many years. They were successful. Mike decided that wasn't enough.
"Another criteria I want in my senior executives, from a leadership standpoint, is 'Willing Followers.' Some of the people I had were excellent in two important areas ... Process Leadership and Business Leadership. And they were great from the standpoint of Personal Character, but that's the price of entry. Unfortunately, they were 'directors,' making progress through 'authority' rather than 'inspiration.'
Over time, he said, they developed their definition of the elements they want in Personal Leadership, characteristics they will evaluate for as part of the succession management process. There are six characteristics, three of them 'soft,' and three 'hard.'
The soft ones:
• Empathy ... You automatically feel what others are feeling. You're naturally inclined to listen.
• Humility ... Meaning, you're approachable, have little ego, not full of answers, willing to use others ideas.
• Caring ... You naturally make people feel that you're interested in them and their ideas.
The hard ones:
• Vision ... You have a 'Point of View,' a view of what 'better' looks like and where we need to go. And ...
• An Action Bias ... You keep things moving.
• Accountability ... You take responsibility for making things happen successfully, and don't leave 'bodies all over the place."

The benefits of having people like this, he said, are ...
• Results occur because followers are 'inspired,' not just 'compliant.'
• You get Discretionary Effort ... a big deal! That is way past minimum effort.
• You get breakthroughs because thinking is more innovative and effort is great, as opposed to constantly being 'stuck.'

"Tools" they use for development ...
• Sending leaders to the Center for Creative Leadership in Greensboro
• Use of 360 Degree evaluations. "But we do it differently. When the leader takes it, the results will be provided ONLY to him/her. HR will never know the results. Mike Haddad will never know the results. Schreiber will never know the results. BUT, we require that the person meet with an outside consultant to discuss the findings and next steps in his/her development to improve effectiveness. Then, we do require that the person creates a personal development plan, and that is shared widely."
• Use of the EQ-1 (Bar-On) emotional intelligence assessment.

Takeaways ...
• Subject Matter Expertise, Experience and Results are not Leadership Qualities.
• It's important to partner with a Leadership Pro. We have used Ken Utech extensively for many years, and we recently hired a Columbia University organization development person to be our inside leader.
• We bring in Thought Leaders periodically, like leadership guru and prolific author John Maxwell. A quote I like: "Effectieness of your work will never rise above the ability to lead and influence others."

Other Quotes ...
• "When I see what "Better" looks like, I can't wait to get there."
• "I want my team waking up each morning wondering how they can remove barriers for their people to be more effective."
• "Of course you reward performance ... but it has to be mitigated by the way performance was obtained. Performance is not a guarantee or even an indicator of future success."
• "When Larry Ferguson brought in Ken Utech back in 2003 is when it was evident we would get really serious about rewarding other qualities."