The C12 Group of Central Florida- A Community for Christian Business Owners and CEOs

Motivation:What Works?

Let’s think more deeply about motivation and performance from our team members’ perspective. Self-motivation typically relies on the right employees accurately answering three basic questions:

“What’s my job?” Not always as simple and clear as we think.

“How am I doing?” Again, a simple request and basic management responsibility.

“Why is my work important to our success and how will I benefit by doing it well?” Well?

Your first reaction to these legitimate questions might be, “You’ve got to be kidding; everyone already knows these things.” Actually, very few companies handle these three simple questions in a winning way. Let’s consider the case of a professional football team to demonstrate.

Do you suppose that any pro football player doesn’t have a basic knowledge of the game and their position? The linemen know they’re supposed to block, tackle, or rush the passer. The running backs know that they’re supposed to carry and catch the ball and find the end zone. Punters know they’re to kick. Quarterbacks must be able to pass, and so on. As professionals, they know the game.

Yet not everyone wins consistently. During 2000-2010, the NFL teams with the worst winning percentage were the Lions (26%) and Browns (36%). Meanwhile, other teams always seemed to be Super Bowl candidates, led by the Colts (72%) and Patriots (70%). What’s going on? They’re all professionals in a league where everything is set-up to drive parity. The worst teams receive the first draft picks and everyone is subject to team salary caps. The system is rigged to ensure that every team will have their ‘day in the sun.’ The main difference between winners and losers isn’t player talent. There are too many examples of underperforming talent-laden teams and overachieving teams with less
talent. It’s coaching talent that produces winners. Somehow, certain coaches routinely succeed against comparably talented teams. The best-coached teams are those who do the basic things best: blocking, tackling, kicking, and passing. They rarely rely on trickery or innovative techniques to outperform their foes. During adverse conditions, like a snowy day in Pittsburgh, or a pressure-packed late-season game against a play-off rival, fads and trickery aren’t enough. Winning teams rely on performing the basics correctly.

Applying Coaching in the Workplace
How does this football story relate to us? The primary function of a coach isn’t to play all the positions he coaches but to ensure that all team members are taught the game and playbook well enough to understand what must be done to succeed. He transmits that knowledge to others who desire to do it and are willing to learn how. A coach must be able to clearly and precisely provide job descriptions for each player. Can you imagine the outcome if a coach merely told his guards, “just block hard,” or his receivers, “just go out for a pass!” Winning requires much more than that!

Successful coaches not only tell their players what to do, but also how to do it best within their overall system (i.e., business model), by either showing them or hiring specialized assistants who can. Even when a head coach delegates the coaching, he remains ultimately responsible for overall performance. Head coaches must also help their staff and players know how they’re doing. Performance is always measured. Even when the team is winning, each player’s performance is graded. Players whose grading is consistently substandard are given special attention. Those who don’t ultimately measure up after an adequate opportunity are traded or replaced. To keep them too long would hurt the team. Coaches don’t generally enjoy this part of their role, but it must be done for the good of the team.

Successful coaches impart an inherently high expectation vision of ‘what can be’ to their teams. The vision is constantly reinforced and referenced via signs, symbols, and day-to-day discussions. The players begin to sense the benefits of achieving the vision… professional accomplishment and a sense of pride related to being a champion. They begin to understand how their roles fit into the overall effort and why they’re important. Irrespective of their position, they see that the team suffers without top performance from them. Good coaches clearly explain the vital importance of each player’s performance and help them see the value to them in working to accomplish team objectives. Players who are privileged to play for great coaches are more likely to work out in the off-season, obey training rules, and strive to improve their stamina and skills. They develop new ways to help the team and more often become coaches themselves.

In many ways, business is a game, and winning this game requires an aligned effort on the part of all the players.

So Coach, what kind of a season are you having? Is your team focused on making it to the championship? Can you win with the players you have? Can you win if they keep playing as they are now? Are you preparing the next generation of leaders for your firm? What is winning for you?

If you’re not satisfied with any of these answers, who must lead the change?!

Even If… I Will

“Though the fig tree does not bud and there are no grapes on the vines, though the olive crop fails and the fields produce no food, though there are no sheep in the pen and no cattle in the stalls, yet I will rejoice in the LORD, I will be joyful in God my Savior. The Sovereign LORD is my strength; he makes my feet like the feet of a deer, he enables me to go on the heights.” Habakkuk 3:17–19

This Scripture passage is definitely ‘on point’ for Christian business leaders!

Habakkuk, the prophet, displays a heart attitude at the conclusion of his short book that well expresses something we often need as we trust in God while leading businesses for Him. Together, let’s see if we can glean a helpful insight or two.

The fig tree, the olive crop, the fields, and the livestock yards all symbolize the potential or capacity to produce an economic livelihood, or “living,” through business. Habakkuk is saying that, even if all his effort in these areas is fruitless, he will still trust in God. Using today’s business vernacular, he’s saying that if his marketing plan fails, the product falls apart, customers defect in droves, and cash flow dries up… he will still trust in God.

You know, there’s something powerful about such a faith! It’s easy to praise God when our harvest (i.e., pace of business) is strong and our barns (i.e., cash reserves) are full. It’s not hard to thank Him when sales are trending up and our work – though challenging – is profitable. But what about when things go poorly and our results are disappointing? Do we still praise Him?

Consider the key to our passage that’s so easy to skip past. Habakkuk is speaking prospectively about the future. These droughts and failures haven’t yet happened. His statement of faith is ‘front-end loaded.’ Though Habakkuk doesn’t yet know the results, he’s praising God, the provider of all things, upfront and staying the course. He’s confident that, no matter how things work out, God will provide and deliver him.

Habakkuk’s example is a beautiful demonstration of making a firm, unconditional decision to trust God no matter what circumstances or outcomes lies ahead. In no way does this imply that he will give less than diligent effort and planning to the tasks along the way. It’s not a “sloppy agape” instance of resting on God’s grace while being personally apathetic or negligent. The writer is simply acknowledging that, even given his best efforts, things may still not ‘work out’ the way he’d choose. He lives in the real world, with a real faith, trusting God from the beginning. Can we learn anything from this Old Testament prophet? You decide!

Oct 27 – 29 Leaders Conference at Gaylord Palms Resort – Orlando

Standing in the Gap

Mark your calendars now for the C12’s 2011 Leaders Conference which will be hosted at the stunning Gaylord Palms Resort & Convention Center in the Orlando, FL area from 7 PM on Thursday, October 27 to 11:45 AM on Saturday, October 29, 2011. After the past several years of touring the U.S. (i.e., San Antonio, Honolulu, Charlotte, Dallas, Nashville), C12’s national conference returns to Florida, where C12 was launched in 1992. We have spectacular $129 room rates at Florida’s premier conference destination just minutes from Disney World and Universal Studios Orlando.

The conference itinerary will kick-off with a keynote dinner banquet on Thursday evening, featuring Kris Den Besten, an Orlando Christian business Owner/CEO and author of SHINE: Five Empowering Principles for a Rewarding Life. Friday features a full day of conference and breakout sessions, wrapping up with a special fellowship dinner that evening. The conference concludes with a Saturday morning plenary session, after which many will opt to play in the traditional C12 Open golf scramble, to be played at nearby Celebration Golf Club from 1-6 PM. Group buffet meals are provided throughout the conference. This event provides a great time of highly targeted and practical equipping for both superior business performance and ministry through the workplace, along with rich fellowship among like-minded peers from across America and beyond.

For More Information

Translating Strategy into Action

For every successfully executed strategy, there are probably 10 strategic plans – many of which are rather impressive and complex, resulting from collaboration between a top management committee and expert consultants – now gathering dust. Among those that are adopted, according to a landmark Fortune Magazine cover article, “Why CEOs Fail,” nine of every 10 strategic plans fail, with 70% falling short due to poor execution, not poor strategy. A survey of companies found that roughly two-thirds of strategic plans weren’t reflected in operating budgets or employee performance incentives, and 90% of these strategies weren’t discussed sufficiently to ensure employee understanding. For many companies, annual strategic planning had become a meaningless and painful exercise, disconnected from the urgent short-term issues that dominate management attention. Such failures represent a costly squandering of business resources and opportunity. They can also breed a cynical company culture due to disappointment and confusion as stakeholders mourn their leaders’ lack of true buy-in and implementation discipline. Many CEOs flit from one reactive ‘strategy’ to another, ignoring the need for linkage with day-to-day operating issues, effective company-wide communication, preparation, and follow-through.

As we often say in C12, “What you can’t measure can’t be taught, rewarded, or managed.” The reason most strategic plans aren’t executed is the gap between what we say, after a periodic strategy session, and what we do given the day-to-day realities of our business. This is why a basic strategy, that simply implements a few well communicated new objectives and initiatives that incrementally move the company toward our vision, is far better than an elegant strategy that our team and stakeholders won’t have the time or opportunity to understand, let alone benefit from!

It’s also true that while a strategic plan may focus on particular areas which require increased attention over the next few years, we must be able to actually resource it while continuing to monitor and manage other areas to ensure that we stay on track overall. The reality is that our strategy depends on achieving certain things that will enable other things to be feasible later. Given unpredictable market dynamics and the certainty that a few crises will arise to complicate things, we need to continually discuss our strategic priorities and our readiness to resource them. In this process some metrics are leading indicators (e.g., backlog or delivery time) and some are lagging indicators (e.g., customer or employee survey results). This is why the notion of a management dashboard, a simple visual representation that combines both strategic and operational key metrics, is so helpful.

Once we’ve gone through the process of breaking our high-level strategic objectives (the what and why) into their operational or project-related drivers (the who, where, when and how) and have made sure that our team has their own ‘local’ goals in alignment, we’re ready to adopt dashboards at both the company-wide and departmental or team levels. Since delegation and follow-up is the key to strategy implementation, be sure that each key manager has their own version of localized deliverables tied to the top-level strategic objectives of the company. A simple format which lists their action plans by quarter, along with their current status, can be used along with a quarterly CEO strategy review session and state-of-the-business review to keep everyone aligned and on-track. It’s also a good practice for larger organizations to have similar cascaded goals and key performance indicator tracking in place at yet another level below the key managers (e.g., product lines, critical processes/functions, etc.).

It’s incumbent on the CEO to (1) know what “drives our economic engine,” (2) stay current with how our team is doing against plan, and (3) provide continuing communication and reinforcement regarding the themes and counter-measures necessary to keep a plan alive and well as it’s being executed. In fact, the annual process of sharpening our strategic plan and leading our team toward its implementation is the principal way a CEO delivers on the promise and potential of any business. CEOs are to lead and enable others, not just be owners and hardworking ‘experts’. Scripture is clear that we’re responsible for what God has entrusted to us, and this includes producing fruit consistent with the opportunities given us (e.g., Haggai 1:5-6, Mt 6:19-21, Mt 25:14-30, Lk 19:11-27, 2Cor 5:10, Eph 2:10). Our opportunity is to “Build GREAT Businesses for a GREATER Purpose.”

Why Does Your Company Exist?

As Biblical Christians, we believe that “We are God’s workmanship, created in Christ Jesus to do good works, which God prepared in advance for us to do”(Eph 2:10). We also view ourselves as stewards of the resources and opportunities He has entrusted to us. This helps us to see our firm and our own roles much differently and more expansively compared to most business leaders. If we personally believe that our purpose in this life is to honor, glorify, serve, and forever enjoy the Lord, how should this impact our mission?

Our company’s purpose or mission deals with much more than just making money or simply describing our products, services, and markets. ‘Boilerplate’ mission statements produced for external PR purposes that merely regurgitate a company’s business charter (i.e., specific markets and offerings) or make bold but empty performance promises (e.g., top-ranked, best, lowest, highest, etc.), don’t really persuade or lead anyone; internally or externally. Our purpose statement needs to capture the ‘soul’ of the firm by describing our overarching motivation for being in business beyond simply “making money.” We want the statement to be a helpful ‘invisible hand’ that represents the mind and heart of company leadership. Let’s think about the stated purpose of a few well-known companies:

Disney: To make people happy
3M: To solve unsolved problems
Wal-Mart: To give ordinary folks the chance to buy things that wealthy people buy
Cargill: To improve the standard of living around the world

These statements are much more internally motivating and self-directing in driving both strategy and execution than a politically-correct statement such as, “To be the finest contractor, reliably complying with all project requirements in a win/win manner, while producing an excellent return to our owners.” How useful is this sweeping statement in shaping behavior and decision-making when compared to these famous expressions?:

Ritz-Carlton Hotels: “We are Ladies and Gentlemen serving Ladies and Gentlemen.”
Newport News Shipbuilding: “We Build Good Ships Here; at a Profit if We Can, at a Loss if We Must; but Always Good Ships”
Nordstrom (their one-card ‘employee manual’): “Our number one goal is to provide outstanding customer service. Set both your personal and professional goals high. We have great confidence in your ability to achieve them. Use your best judgment in all situations. There will be no additional rules.”

Although the statements above provide clarity in the midst of swirling changes associated with growth, offerings, markets, technology, global competition, and economics, they’re still missing the clear sense of transcendent purpose that stirs Christian CEOs who embrace their higher calling through business. C12’s purpose statement is a constant reminder of the eternal purpose and God-given calling for which we exist and serve our members:

“To change the world by bringing forward the Kingdom of God in the marketplace through the companies and lives of those He calls to run businesses for Him.”

Ideally, our purpose or mission statement will have the following characteristics:

■Timeless: Able to weather changes in business circumstances by capturing enduring tenets and helping your team to ‘stay the course’ based on common core ideology.

■Inspirational: If it doesn’t inspire you and your key team, it won’t inspire others!

■Decision-making Tool: Useful as an arbiter or plumb-line for accountability and decision-making, an ever-present ‘invisible hand’ to guide all team members.

■Short & Concise: Must be brief to be memorable… ideally one carefully-crafted sentence (two at most). To aid recall, use ‘bullets,’ acronyms, or alliteration.

■Personal/Visceral: From the heart and reflective of your personal core values and commitment. Not generic, but distinctive to act as a ‘guiding star’ and excite our team toward unified action in all circumstances. Consider the U.S. Marine Corps motto: Semper Fidelis (Always Faithful).

■Sense of Ministry: Stirs our heart for the God’s main purpose in our life and work –lives turned toward Christ – capturing our eternal purpose and inspiring ministry.

So, how well does your current mission or purpose statement measure-up when evaluated against the above criteria?

As it currently sits Is your company’s purpose statement “close,” perhaps needing only a little fine-tuning. How about those with a mission statement that really needs a major overhaul? Finally, how many don’t have a mission statement or can’t remember it well enough to rate it?

If your purpose statement needs a little sharpening, it’s time to engage your team in clarifying your firm’s purpose. What are you waiting for?

The Indispensability of Compelling Core Principles

Our goal today is to make a case that real and useful company core principles are indispensable for effective
leadership, planning, execution, alignment, and accountability. There’s nothing more vital and foundational for organizations that aim to be an enduring blessing to others!

As those aspiring to reflect Christ and operate according to Biblical truth, we’d all agree that our leadership should clearly reflect Jesus’ example and godly wisdom. God clearly has an ultimate plan and purpose for His creation… and for each of us and our businesses. He sovereignly inspired and superintended the writing of His Living Word, protecting it over 3500 years of rocky human history, to give us a perfect and timeless guide to life and practice. God’s transcendent purpose, plan and principles are unchanging from Genesis through Revelation. Throughout the entire Bible, terms such as purpose (59 mentions), law (642), faithful (157), truth/true (342), covenant (286), and Word (967) are regularly repeated.

Jesus modeled what happens when one couples a crystal clear vision of the future, a strong sense of purpose, and ‘non-negotiable’ core values. The perfect servant leader, He demonstrated the power of unwavering focus, clear communication, and firm commitment to an ultimate vision and mission, as He equipped the small band of disciples who would turn the world upside down in a generation. Jesus said, “Wisdom is proved right by all her children” (Lk 7:35). We may have an innate sense of what we want to accomplish, and even how we want to go about it, but have we taken the steps necessary to capture and communicate these worthy core principles for our business? If so, today’s a day to consider how they might be sharpened and implemented for greater impact. If not, why not make today the launching pad for this vital foundational step in becoming an effective leader?

With these things in mind, our company’s core principles must be:

Compelling: to truly shape the actions of the company and its stakeholders.
Understood: by all team members, the same way that we understand them.
Embraced: or owned by team members as their vision for the business.
Reinforced: by being communicated clearly and often in many different ways.

Over the years within C12, we’ve repeatedly heard the benefits of clearly communicating and applying company core principles in our national and regional Leaders Conferences. Each conference seems to feature one or two presentations by CEOs who describe making the shift from a ‘status quo’ culture to a forward-looking, inspired, everyone-on-the-same-page team.

When the CEO and senior staff step up in this way, a couple of things generally seem to happen:

Undistinguished historical performance quickly begins trending upward as people pull together to achieve a shared vision, plan and related goals. Recognition and celebration reinforces the momentum.

Employees gain confidence and begin to grasp a more integrated sense of what they’re trying to do and how best to do it based on the firm’s core principles. They’re able to celebrate the fruit of their actions. Ministry often flourishes as team members are inspired by a sense of greater purpose and the company begins to be appreciated as a special place to work for more than just a paycheck. Those uncomfortable in such an environment begin looking to exit.

Let’s close today with this simple statement: if your vision and principles don’t really matter by differentiating you in your marketplace, they don’t really exist!

How about yours?

Burnout: What is it? Do I Have it?

What do you think of when you hear the term, “Burnout”? What thoughts does it trigger? What examples come to mind? If you’re like most of us, the first thoughts are of sports stars, celebrities, or successful executives who have used the term to describe their reason for escaping a high profile position or career. We often see burnout among overextended ministers, those providing arduous long-term healthcare to a declining patient or family member, military personnel subjected to continuous combat, and couples in dysfunctional marriages. Similarly, at the end of a long and difficult economic recession or industry decline, many CEOs feel weary after fighting the good fight for so long. They say they’re just “burned out.”

A classic definition of burnout is “a state of physical, mental, and emotional exhaustion caused by long-term involvement in situations that are emotionally demanding or draining.” Burnout is summarized succinctly by Dr. Richard Swenson1, a best-selling Christian physician who has written extensively on the need for margin and balance in our undertakings:

“Burnout is that point when something within you breaks. It is that point where you quit trying, when you finally throw up your hands and say, “I don’t care anymore. I don’t care who sees me. I don’t care who hears me. I don’t care about anything. I just want out.”

Burnout comes most frequently from realizing that doing more of the same will only produce more of the same, and whatever ‘the same’ is doesn’t mean enough to us to justify the effort. When we reach that state we’re burned out. Someone beginning to experience burnout will often react in one of three unhealthy ways:

■Taking Action without Understanding Some are unaware or blind to what they’re experiencing and may simply flee the pain by running away. For CEOs and business owners, this can produce tragic results when it manifests in selling the business and getting into another. Burnout is almost never the result of being in the wrong business. It’s usually the result of being in the right business with the wrong attitude!

■Relishing Power A few realize that material things won’t satisfy but keep going to seek power over others and maintain their own special status. They keep the business and drive it as hard as they can. They’re driven to gain money or retain power because to them money and position equals prestige and control of other people.

■Digging a Moat Some recognize that they’re experiencing the law of diminishing returns and decide to shift gears to stop trying to accumulate more material wealth through business success. They realize that more money will only bringthem more of what they already have “more than enough of” without a bit more peace or satisfaction. Their problem is that, while they don’t want to go forward, they don’t want to go backwards either, so their mode of thinking becomes very defensive, protective, and grasping. They either lead a soon-to-be-stagnant business or sell the business and “retire” to manage their assets.

Hopefully, those of us in the beginning stage of burnout will realize that none of the options listed above are healthy for ourselves, our families and stakeholders, or our eternal impact as God’s stewards and ambassadors. The true cause of burnout is the loss of the feeling that what we’re doing has continuing and significant value to ourselves and others. That’s the bottom line. When we feel that our efforts count toward something that has significant value to ourselves and, better yet, to many others, we don’t burnout, we light up! Burnout happens when vision and passion are somehow lost or so dim that we lose sight of them.

Press On!

May 5th – “Creating a Contagious Brand” Webinar by Kennan Burch

Come join us for this one-hour webinar “Creating a Contagious Brand” presented by Kennan Burch, Founder of Brand Catalyst Partners. Kennan will be sharing the branding secrets of Fortune 500 brand building companies.

Info on Kennan Burch

Thursday, May 5th, 1:00PM – 2:00PM

Format: Online Webinar

Who’s Invited: CEOs & Brand Leaders

Cost: Complimentary

Attendees will receive a valuable white paper:

“Branding Secrets of Fortune 500 Companies”

Limited Space: Reserve your space today!

Brand Catalyst Partners is a brand consulting firm that partners with small to mid-size organizations to create contagious brands. Whether a product or service, all contagious brands are built from a powerful set of branding principles. And Kennan is gifted and qualified to apply those principles to your brand. Kennan has partnered with a number of advisors and agency partners to provide support, advice, and implementation services for contagious brands.

Register Here

On Funding Growth

A company’s lifeblood is the invested capital and operating cash flow that enables it to conduct daily commerce and grow. Funding options vary with a firm’s legal structure, life cycle stage, and goals. Early stage companies focus on getting off to a strong start and surviving the critical first few years. Growing entrepreneurial companies pursue both sustainable operating health and reaching critical mass to earn a leadership position in their field. Established leadership companies seek solid returns, coupled with clear strategic vision and the financial capacity to act on it. Highly mature companies – longtime family businesses or corporate entities ‘past their peak’ – seek ways to ensure continuation and succession in ownership and leadership.

Some of us today are struggling to survive and simply hoping to find a tactic that will enable us to remain solvent and hang on for another year. Others are facing exciting strategic growth possibilities and searching for the wisest way to fund them. These bedrock principles are vital in guiding our growth funding efforts, whether internal (e.g., bootstrapping from operating cash flow) or external (i.e., bringing in fresh capital from lenders or equity investors).

God owns the business; we’re to be wise and fruitful stewards
Don’t become yoked in partnership/ownership with non-believers
Serve others with transparency, excellence, and mutual win/win accountability
Avoid using the public courts for conflict resolution, especially with believers
Don’t presume on the Lord by making extravagant or needlessly risky plans
Be cautious regarding debt and avoid borrowing unnecessarily
Avoid personal guarantees in collateralizing loans for yourself and others
Honor contracts and agreements, paying others what you owe before yourself

The most important advice on funding growth is to develop the healthy habits and relationships required to begin raising the necessary capital – whether internally generated or externally recruited – before you need it. This requires clearly communicated business plans that bring mutual understanding, teamwork and trust. This applies internally as you and your team focus on enhancing the company’s internal cash generating capability. It also applies externally as you cultivate banking relationships and build a strong stakeholder community that may be tapped when threats or opportunities confront the business.

Using debt should always give Christian CEOs pause. While there’s no Biblical ban on debt, the warnings and dangers are clearly and frequently described in Scripture. In fact, debt should only be used in light of what we’ll call the debt paradox: One is poised to use debt wisely and strategically only when you currently have little of it! Unless your team has the disciplined mindset of eliminating debt, you’ll lack the periodic strategic capacity to opportunistically use limited debt to accelerate healthy long-term growth. This means always protecting against your worst-case scenario (e.g., sharp sales drop, prices decline, asset values drop, interest rates double) and remembering that debt isn’t a crutch for ongoing operating problems or unprofitability. The most successful companies focus on paying off debt to improve margins and earn the right to later employ a modest amount of debt in funding strategic acquisitions and growth projects. They repeat the cycle every few years while staying within a comfortable debt-to-equity range. Such firms borrow at the most favorable terms and have a built-in incentive to pay-it-down rapidly to create the financial capacity to do it again, effectively ‘bootstrapping’ to enhance their organic growth rate.

Speaking of bootstrapping, it helps to know our internal capacity to fund growth through operating earnings, given our need to fund added working capital and occasional capacity (e.g., fixed assets). Many household names began with less than $1500 in initial capitalization, including Apple, Black & Decker, Dell, Domino’s Pizza, Hallmark Cards, Hewlett-Packard, Gallo, Microsoft, Nike, Roadway Express, and UPS!

6 Pillars of Loyalty

We’re quick to overly complicate what’s involved in building a healthy company.
Overwhelmed by a continuing barrage of ‘helpful’ input from authors and consultants, we continually seek the latest ‘breakthrough’ ideas and techniques to catapult us past competitors and ‘beat the odds’ in becoming a long-term success story. Sadly, in spite of all the expert advice, just 22% of the world’s major firms enjoyed real annual growth of 5% or more during 1994-2004 while achieving a financial return above their cost-of-capital. Why? Scott Cook’s simple logic – that they lack happy and profitable customers – is tough to debate!

Many previous C12 blogs have discussed ways to improve profitability and customer relationships. Viewed piecemeal, it’s easy to make progress in individual areas while still failing to create a sustainable platform for profitable growth. It’s easy to pursue ‘bad profits’ – opportunistic sales which seem like a good idea today but do little to generate goodwill among satisfied customers, employees, and suppliers, or build an admirable company. Today, we’ll focus on the valuable prize awaiting companies that successfully achieve both trust and excellence… loyalty.

Let’s begin our implementation focus by looking at the leadership practices which are common among companies enjoying the greatest loyalty from customers and employees. Loyalty Rules highlights business practices that read like a C12 playbook, including the Golden Rule, pursuing excellence, simplicity, honesty, fairness, respect, personal accountability, and performance pay. These traits were distilled into six ‘loyalty principles’ to help to shape metrics, compensation systems, organizational development, strategy, and operations. As we review each element, make a mental note as to how your company fares.

Six Pillars of Loyalty

Play to win/win: Profiting at the expense of partners is a shortcut to a ‘dead end’! Focus solely on opportunities/niches where you can become the best. Align partners around overarching objectives to upgrade the customer experience, and insist on win/win solutions. Shed distractions, sharpen plans and processes, and teach win/win behavior. Paul also taught this, saying, “Let each of you ‘look not only to his own interests, but also to the interests of others.’” (Php 2:4).
Be picky: Membership is a privilege! Loyalty requires making choices. Cultivate business relationships only when both sides can provide special value or you’ll soon dilute your value and be special to no one. Choose employees, customers, and suppliers carefully, through a win/win lens. Invest in their success and stick with them for the long-term… if they earn the privilege through performance. Loyalty is a two-way street!
Keep it simple: Complexity is the enemy of speed and flexibility! Clarify the values and rules that govern all decisions. Use small teams to maximize responsiveness, flexibility and accountability. Maintain simple, stable, visual scorekeeping. Reduce overhead ‘interference’ by growing your business without growing HQ staff. Focus on continuous improvement and ‘the future.’ Remember, whatever doesn’t add customer value is waste!
Reward the right results: Worthy partners deserve worthy goals! Align performance targets so that all partners stretch, together, for worthy goals. Share the benefits while strengthening the company. Don’t confuse long-term value with short-term profits, or loyalty with tenure. Measure the right things and fix ‘misalignments.’ Reward loyalty among employees, suppliers and customers with win/win growth and development opportunities.
Listen hard, talk straight: Long-term relationships require honest, two-way communication and learning! Loyalty is based on trust, and trust requires reliable and accurate information. Deepen working relationships using feedback tools and joint forums to drive improvement. Listen to input, prioritize issues, and act on what you hear. Shared learning and understanding yields clearer priorities, coordinated actions, and superior results. Nothing magnifies the ‘loyalty effect’ like trust rooted in an open exchange of information and ideas. Confront ‘brutal facts’ in a way that exemplifies the truth being spoken in love (e.g., regular report cards, real-time metrics)!
Preach what you practice: Actions often speak louder than words, but together they’re unbeatable! Clarify your principles and communicate them with passion. They’re the gravitational center for organization focus and loyalty, enabling your partners to understand, buy in, and become truly loyal. Put it in writing, talk the walk, continually teach and reinforce these practices. Celebrate internal heroes, share edifying stories and illustrative case studies. Continually cast the vision of where we’re going and how we’ll get there, based on mutually earned loyalty.

According to Fred Reichheld, pioneering author in the ‘loyalty’ field, “Building loyalty has, in fact, become the acid test of leadership.”

From the Blog

Motivation:What Works?...
Oct 15th, 2011 | No Comments