How does someone like Phil Knight take a business he started selling sneakers out of the trunk of his car and turn it into a giant company like Nike, whose iconic brand is an inspiration to every athlete?
How does a Tim Cook, Apple CEO, take over the company after the legendary Steve Jobs and grow the company tenfold, creating the first trillion-dollar company?
How did a handful of Southern entrepreneurs—Robert Woodruff, founder of Coca Cola, Sam Walton, Founder of Walmart, and S Truett Cathy, founder of Chic-fil-A, take small, hometown companies and grow them into global businesses in one lifetime?
It was being fascinated and intrigued with questions like these that led to the idea of writing a CEO playbook that would help entrepreneurs step up to the CEO’s job, as well as take a small to medium enterprise (SME) and grow it geometrically.
I had spent decades coaching CEOs of the Fortune 500 to become the leaders their business needs in the process of realizing an Impossible Future and producing extraordinary and tangible business results.
I decided to call my dear friend, the legendary Jay Abraham, who had successfully coached the leaders of thousands of SMEs in hundreds of different industries, and ask him to collaborate with me. Jay was equally fascinated and intrigued by how successful CEOs take an SME and grow it exponentially, and luckily he agreed.
Both Jay and I have spent the requisite 10,000 hours in conversations with CEOs and entrepreneurs helping them reach BHAG goals, cut through problems that are like Gordian Knots, and make some of the most important decisions of their lives. We often wake up in the morning, work all day, go to bed at night, and dream about “what is the one thing we can say that will make a difference in your life.” Our hope is that this book does just this for you!
In this article, in anticipation of the book, I would like to introduce to you the 7 Drivers of Geometric Growth. Keep your eye out here as we provide you further with sneak peeks into the book.
The CEO Playbook—The 7 Drivers of Geometric Business Growth
1. PURPOSE-DRIVEN LEADERSHIP
The best CEOs built a company around an ennobling purpose that makes people come to work as if they are on a mission from God. Apple: Change the World with the Personal Computer Nike: Bring Inspiration and Innovation to Every Athlete in the World Tesla: Accelerate the Shift to Sustainable Transport
2. HIRE ABERRANT GENIUSES WHO CAN PLAY AS A TEAM
The teams with the best talent usually win. When it came to hiring, Arthur Blank, Founder of Home Depot, gave instructions to his HR department in one sentence: “Get me the best in the world.” Yet, you don’t just want to hire aberrant geniuses who are loaded with talent and don’t fit the mold, nor just conformists who got an A on the test. They need to be able to play as a team. People’s ability to think and interact together has a multiplier effect on the business. Think Jony Ives and Tim Cook at Apple.
3. STRATEGY—THINK MARKETS, NOT PRODUCTS
David Valentine, founder of Sequoia Capital, a venture capital firm that bootstrapped Apple, Airbnb, and Uber, said start by asking yourself: Where are there millions of people with throbbing human needs or wants that are not being addressed that I can convert into a blueprint to a billion? Don’t start by asking yourself: How am I are going to sell the wonderful product or service that’s been sitting around in my warehouse for ten years? Jay talks about a powerful shift in paradigm: Shift from thinking in terms of a “Me” point of view to a “You” point of view.
4. LEVERAGE INNOVATION, OPTIMIZATION
If you want to compete in the future, you need to leverage a disruptive technology that has the power to make the impossible happen and be the first one into the market. Cornelius Vanderbilt, the richest man in America, was always looking for the next great thing. He disrupted the Great Age of Sail with the steamboat, then disrupted the Great Age of Steamboats with railroads. He was also a tinkerer who optimized his shipping business, steamboats, and railroads thousands of times.
5. CREATE A SCALABLE ORGANIZATION
Once your organization starts to grow in an accelerated way, you need to start thinking about building an organization (processes) that can match that growth and where all the different parts truly function as a whole. Creating a scalable organization not only takes building repeatable business processes but considerable resources. The other day I was driving down the highway and saw the first Rivian “electric truck.” The truck looked great but I wondered, how is Rivian going to build a scalable organization that can keep up with GM, Ford, Chrysler, and Mercedes?
6. LEVERAGE BOTH FINANCIAL & RELATIONAL CAPITAL
CEOs who build companies that are capable of geometric business growth know that they need capital not only to start and finance their business plan but to scale their organization. Jay Abraham has made a powerful distinction between financial capital and relational capital. Sometimes traditional financial capital just isn’t available and you have to use Relational Capital. Scott Cook of Intuit made 25 presentations before venture capitalists, and got the door slammed in his face 25 times. Finally, the finance guy in his startup said, “We need to find a rich uncle.” Cook said, “I don’t have a rich uncle.” The finance guy said, “I have two.” They went to them, laid out their business case, and started Intuit with $100,0000.
7. THE POWER OF MARKETING
I met Jay almost three decades ago when I came across some pamphlets called “Your Marketing Genius at Work.” I was trying to sell coaching and training in a crowded marketplace and just scraping by. Jay impressed me with his idea that I needed to come up with a breakthrough value proposition that would differentiate me from all the other “me too” competitors. I wrote a book called Masterful Coaching, Become the leader your business needs in the process of realizing an Impossible Future and my business started to take off.
*BONUS DRIVER
8. BE YOUR CLIENT’S MOST TRUSTED ADVISOR
When you are your client’s most trusted advisor, you are totally dedicated to causing their success. You never sell them more or less than what they really need. That’s a lot different than being a salesman who is trying to extort money from people.
The best CEOs don’t just have strategies, they have strategies of preeminence that result in outside success.
The term “strategy of preeminence” was coined by my good friend and partner, Jay Abraham. I’ve pondered Jay’s strategy of preeminence for years and always thought it was like a great Picasso painting that rattles your brain and makes you see the world differently.
Jay shares his ideas with a brilliant splash of color, rendering them like an impressionist painting, leaving your imagination to fill in the rest. I asked Jay if I could collaborate with him, building out his idea. Jay graciously granted me full creative license.
What exactly do we mean by a strategy of preeminence? First a definition. Strategy is a focused and coherent way to meet a challenge, such as creating a successful business. Preeminence means “the fact of surpassing all others.”
Companies with a strategy of preeminence are so good at what they do that no one else can offer a close substitute.
Google has a strategy of preeminence in the world of search and online advertising, connecting people to the information they need. The company is so good at what it does that it surpassed Yahoo and Bing over a decade ago. It is interesting to note that Google is worth more than all USA airlines combined.
P&G has a strategy of preeminence in the world of market innovation that is a result of capitalizing on the consumer’s frustration. The company introduced three consumer products that grew into billion dollar businesses capitalizing on customer-centric innovation. Think Pampers, Swiffer, Mr. Clean.
Chipotle is another company with a strategy of preeminence. Theirs involves providing delicious, healthy, fast food with an ethnic twist at a low prices. The company is growing at 30% a year and is disrupting McDonald’s, which is growing at less than 10% a year for the first time in decades.
These companies treat their customers as clients, who are under their care and protection.
Without a strategy of preeminence, the chances of being disrupted are very high.
Every day a company on the S&P 500 list goes out of business to be replaced by a disruptive competitor. If the present trend continues, by 2030, half the companies on the list will disappear.
Harvard Business School estimates that 83% of large companies feel they need a strategy to deal with disruptive competitors fresh from the niche. But only 36%, have the confidence they can do it. At the same time, only 12% of companies—large, medium, and small—have a strategy that goes out beyond the next year or so.
According to the Kauffman Foundation, eight out of ten entrepreneurial businesses also end up going out of business. They may have come up with a good idea for a business, yet were not successful in coming up with a customer value proposition.
Or they haven’t looked at how they could reinvent their company by combining an innovative business model with resources and external and internal processes to build a game-changing product, go to market, and turn a profit.
A strategy of preeminence may be the fastest and most powerful way to change your business results.
It’s my observation that most business leaders don’t have a strategy of preeminence that is different from a strategy of operational excellence.
If you want a strategy of preeminence, you might start by looking at the synonyms for “preeminence,” which might help you reset your mindset: greatness, supremacy, distinction, innovative excellence, first-rate. Ask yourself: How do these definitions apply to your company and what you offer your customers?
You also may need to recognize that you probably don’t understand your present strategy well enough to know whether it’s working.
Create a strategy of preeminence either by “optimizing the core” or doing “something more than core.”
As friend and partner, Shim Bae Kim, Vice Chairman of Korea Telecom, points out, “We all love to talk about examples like Apple, Amazon, Google, but in fact, these kinds of companies are very rare.”
There are basically two ways of to get to a strategy of preeminence.
The first is to think in terms of optimizing your core business by becoming better at what you already do. Amazon invented the idea of selling stuff online, then came out with Amazon Prime which lowered shipping costs for customers.
The second is to do something more than core that really represents a whole new business model. Steve Jobs did that when he moved away from selling computers to selling devices like the iPod, iPhone, and iPad.
Every CEO and founder can create a strategy of preeminence and drive explosive growth.
In my work with executives and company founders, I have found that there is a process for creating a strategy of preeminence that can be applied in large, medium, or small companies and which represents an integrative, step-by-step process.
It starts with asking the leader, “Are you a strategist?” and is based on the premise that a strategy of preeminence is not just beating the competition, but creating a company that matters. Each step requires an active inquiry into some very key questions.
The 7 Secrets of a Strategy of Preeminence
1. Becoming the leader your business needs starts with empathy. What are the rising aspirations and unmet needs of customers?
2. To get a stuck business unstuck, face reality. What is the current business situation?
3. Declare an Impossible Future or ennobling purpose. Who do we aspire to be as a company, to whom will we matter, and why?
4. Segment a high-growth market. Where will we play as a company?
5. Create a strategy of preeminence. What will we do for customers that is so good that the competition can’t offer a close substitute?
6. Create a delivery mechanism to match. How will we combine a wining business model, resources and process to go to market and turn a profit?
7. Apply a profit formula. How will we make money? The acid test: Are there enough customers willing to pay a high enough price?
Be a Monster of Execution
I have had the opportunity to work with some of the best CEOs and entrepreneurial-minded leaders in the world.
There is something about these leaders that stands out from the crowd: Once they create a strategy, they execute in a fiendish way.
The best leaders seek to accomplish big things (not small things) and pursue them with a level of ATTENTION, INTENTION, and DRIVE that most people have never experienced in their lives.
This is what leads to a track record of extraordinary accomplishment.
7 Guiding Principles for Mastering the Political Chessboard
By Robert Hargrove
You say you don’t like politics at work…. think again!
You see an opportunity to make a difference either in your business or in life and have jumped into action. Yet, it seems that each step you take creates a widening arc of support and opposition. You know you have to deal with the opposition, but as you see it, playing politics is beneath you. Get over it. To reach your goals you need to master the political chessboard.
George Washington, Thomas Jefferson, Benjamin Franklin, Abraham Lincoln, Franklin Delano Roosevelt, Mahatma Gandhi, Winston Churchill, Martin Luther King, Nelson Mandela, Lyndon Baines Johnson, and Ronald Reagan were all master politicians. People who govern in war and peace do politics. Leaders who change the game in business do politics. Scientists who win Nobel Prizes for their research do politics. Activists who lead the charge to improve community schools do politics. Even great artists who represent a new school do politics.
Sure, politics can feel like kissing up, but what feels like kissing up to one person can feel like gaining the necessary power and influence to accomplish great things to the next person. In the same sense, politics can be frustrating and infuriating. But what is frustrating and infuriating to one of us can feel like an exciting human puzzle to others.
Finally, politics may feel like changing what you stand for accordingly to the audience. Yet to a political master in business or government, it is not about changing what you stand for, it is about speaking to the issues and concerns of the audience.
A master politician is someone who successfully gains power and influence, and who accomplishes something that brings about a profound, irreversible change.
Just gaining power and influence is not enough to make you a master politician. Consider the number of presidents of the United States, company chief executives, coaches of professional or nationally ranked college sports teams, or even the chief of the local police departments who got to the top, but failed to leave a lasting legacy or irreversible change.
Gaining power and influence requires taking into account that, the closer you get to the top, the greater the competition is for power and resources. Thus, you need to not only embrace the political nature of all organizations but also as noted historian James MacGreggor Burns said about FDR in accomplishing his New Deal, “move like a creative artist amongst the tangle of conflicting forces and confusing interests.”
What does it take to be a master politician? It involves knowing who you are, what you stand for, what your goals are, and how to handle yourself in the midst of conflicting agendas and shifting power grids on the corporate (enterprise) chessboard.
The worst mistake you can make is to assume that you don’t have to be a politician or that politics don’t exist.
Seven Key Guiding Principles
1. Realize that style supersedes substance.
Your manner often speaks louder than your message. Many political sages have suggested that Ronald Reagan was the most prominent president of our lifetime, because of his policies and programs. However, if you’re like most Americans, you probably aren’t even sure what his policies and programs were. What people do remember is Reagan’s style. One of his greatest strengths was that he was incredibly affable and boundlessly optimistic. Reagan possessed firm convictions Americans could identify with and unerring political instincts. He took the presidency away from Carter by saying, “It is morning in America,” when Carter was sounding like a profit of doom and asking, “Are you better off today than you were four years ago?” Ask yourself: are you likeable?
2. Stand for something that has broad appeal and addresses throbbing human needs and wants.
Master politicians not only have great style, but they also stand for something. Nelson Mandela stood for the end of the dreaded Apartheid and the liberation of blacks in South Africa, enduring twenty-five years in prison. His stand spoke to millions, turning the tide of popular opinion amongst both whites and blacks until he was set free from Robben Island prison, and in the process, freeing millions of other people as well. He never took the opposition personally, even inviting his one-time jailors to his presidential inauguration. Ask yourself: are you taking a stand for something that meets the throbbing needs and wants of people?
3. Create a campaign that captures hearts and minds.
Do you want to be chief executive, or get your capital budget for your game-changing ideas, or be a difference maker for your employees, customers, and constituents? First, you must understand that you will need to consciously and intentionally conduct a campaign to reach these goals and aspirations. Campaigns involve winning the hearts and minds of people. FDR engaged people in his 1936 election campaign, “I join with you for the duration of this war to end the Depression and I promise you to put a chicken in every pot.” He was determined not just to influence public opinion, but also to dominate it, proclaiming in speech after speech the New Deal as a legitimate role of government. Ask yourself: what is in the hearts and minds of the people around you?
4. Before you map your strategy, map the political chessboard.
To gain support for your campaign and diminish opposition, think about the different players on the political chessboard and how you need to strategically influence each individual or group. Consider: 1) inheritors of the status quo, 2) opposers who reject or seek another course, 3) partners who align and support, 4) coalition builders of like-minded and opposers, 5) splitters who lead factions, 6) passives who support the status quo by doing nothing, and 7) isolates who are alienated from the process. How must you speak to each person’s listening? Ask yourself: who are the people you most need to influence and how can you speak to their listening?
5. Do whatever it takes.
The people that get to power and influence and make a difference practice management by Machiavelli. The following story makes the point. When JFK returned to Boston from is PT109 experiences in the Navy, he decided to run for Congress in the North End district, which was heavily Italian. He put together a great campaign relying on the many friends he had made in college and in the Navy. His campaign manager found out that there was someone running in the district whose name was Russo. Fearing he would win the entire Italian vote because of his name, his campaign manager found another Russo, and asked him to put his name on the ballot, thus splitting the Italian vote. The young JFK won the election by a large margin. The Machiavellian approach is often not spoken of, but don’t fool yourself, it is just as often done. Ask yourself: what can you learn from this?
6. When your support is tenuous and the opposition strong, wheel and deal to move your agenda forward one piece at a time.
Master politicians succeed, gradually, then dramatically. FDR who took a stand to end the Great Depression had great style and substance, as well as an exquisite sense of political timing. In his first hundred days in office when his support was tenuous, he engaged in transactional leadership “wheeling and dealing” with leaders in Congress to come up with some important reforms, holding back for the time being on those reforms that might represent a profound and irreversible change. When your power and influence is tenuous, be willing to ask, “If I do that for you, what will you do for me?” Ask yourself: what people or groups do you need to give something to in order to gain something from now?
“7. Build coalitions of unlikely stakeholders to increase support, diminish opposition, and drive your political and business agenda through.
FDR realized during his re-election campaign in 1936 that he would have to be more of a transformational leader and act more boldly to reach his goals and, in the process, redefine the Democratic Party. To accomplish this, he set about building coalitions in far-flung quarters that would allow him to dramatically increase support and to diminish resistance. He brought together northern Democrats and conservative southern Democrats (now Republican types), labor and management, Populists and old guard Liberals in a sweeping electoral victory. This enabled him to enact in what is known as his “second hundred days,” a torrent of legislation amounting to an Economic Bill of Rights, and whose programs–Social Security, Medicare, Unemployment Insurance–still exist today. Ask yourself: what like-minded stakeholders, as well as opposers, do you need to build a coalition with?
Good luck on your journey as you move like a creative artist amongst the tangle of conflicting forces and confusing interests and successfully accomplish something that brings about a profound, irreversible change! Just reach out if I can help you in any way.
Robert
ROBERT HARGROVE is the CEO of Masterful Coaching and was a Co-Director of the Harvard Leadership Research Project. He is the author of the landmark book, Masterful Coaching, as well as other books on leadership, collaboration, and coaching.