PMC Collaboration Kicking Cancer’s Ass

Last weekend I rode CHUBike 160 miles in my 3rd Pan Mass Challenge along with 60 of my Year Up TEAM DMITRI! colleagues and thousands of other like-minded cyclists. The PMC is the world’s most successful athletic fund raiser, having raised over $450 million dollars for cancer research.

It may also be the best example of the power of collaboration I have ever seen. Started in 1980 by Billy Starr, an extraordinary social entrepreneur who still leads the PMC today, the organization not only raises more money than any other athletic fundraiser, it also leverages the support of thousands of volunteers and many corporate sponsors to raise funds more efficiently than any other nonprofit I have examined. By building a world class brand and recruiting and training 4000 volunteers, Billy and his uber talented team have increased their annual funds raised from $10,000 in 1980 and are on track to raise $48,000,000 this year . Check this out:

 

 

My friend and amazing PMC CFO Michelle Sommer was kind enough to share the above data with me. I was blown away by the way the organization leverages volunteers and corporate sponsors to enable them to contribute 100% of every dollar raised by riders to fund research to cure cancer. I was also able to compare PMC’s efficiency with that of other nonprofits. Again, blown away as, according to Quatrro’s 2016 NFP Benchmark Report, the average nonprofit with revenue greater than $2MM spends 21% on overhead vs. the PMC’s 9%:

It’s not about the data, it’s about people’s lives

Although I am clearly a “data guy,” I would ride the PMC every year I am able to help defeat cancer even if I weren’t so impressed with their efficiency and effectiveness.

Over the past three years, our Year Up PMC Team has been blessed to have Dmitri Itzkovitz as our “PMC Pedal Partner.” Dmitri was diagnosed with a cancerous brain tumor when he only 8 years old. He recently turned 14 and is one of the nicest and most courageous young men I have had the privilege to know. I have also come to know his father Daniel (see photo of Daniel and Dmitri taken during this year’s PMC at the top of this article). Through Daniel, I learned that only 4 percent of cancer research funds are dedicated to curing pediatric cancer. Sadly, I also recently learned that cancer is the second leading cause of death among young children.  We ride to change that. 100% of the money I raise and contribute goes to the Dmitri Itzkovitz Pediatric Brain Tumor Fund at the Dana Farber Cancer Institute.

Click on this picture to virtually meet Dmitri:

If you would like to support my ride and contribute to this life saving research, you can do so here:

www.pmc.org/cu0007

or by mailing a contribution to:

Craig Underwood 83504-2
Pan-Mass Challenge
PO Box 415590
Boston, MA 02241-5590

 

4 T-Shirts in the Entrepreneur’s Closet

Net: A Year Up student recently asked me if I had any favorite any motivational words or slogans.  I told her about the 4 T-shirts we wore at Sports Loyalty International: Carpe Diem; Never, Ever Quit, No Regrets & Breakthrough.  After speaking with her, I realized they applied to my current role at Year Up as well.

My favorite “unsuccessful” company has to be Sports Loyalty International.  We had a great, fun, talented team; phenomenally supportive investors; an all-star advisory board; and what we believed was a uniquely transformative program and business model.  We also had cool T-shirts.

In addition to making the morning wardrobe choice a very easy one, the words on SLI’s 4 T-shirts became motivating slogans to our 8 person team and closest advisors.  Recently, while visiting Year Up’s Atlanta site with GE CTO and Year Up champion Adam Radisch, I met an amazing young woman named Ariel Terrell.

Ariel asked me if I had any favorite words or slogans that I turned to for inspiration and motivation.  She shared that she was planning to cover the walls of her basement family room with inspirational words for her kids. I asked the young lady how many children she had and was surprised when she responded “five.”  Ariel explained that she had adopted her sister’s three children several years ago when her sibling was unable to care for them and then had two of her own.  I asked her “When do you sleep?” and she responded “rarely!” This is one of literally hundreds of stories I could tell you about the grit and determination of our students.  They are the embodiment of the Year Up brand, the primary reason we have grown from serving 22 students in 2001 to 3,700 this year and my greatest source of inspiration and energy.

So, back to our T-Shirts.  I told Ariel about our slogans: Carpe Diem; Never Ever Quit; No Regrets and Breakthrough, and also shared a few inspirational quotes. On the plane back to Boston, I thought about these slogans and realized they also apply to those of us who lead corporate partner development for Year Up.

Carpe Diem

I probably first heard the phrase Carpe Diem in the movie Dead Poets Society.  I also heard it in my head over and over again when making the decision to accept the offer from Sir Keith Mills in 1991 to start the Loyalty Group in Canada. As entrepreneurs at SLI, we realized that every day was a gift from our investors.  They believed enough in our vision and our team to give us the opportunity to create a new type of loyalty program that had never been successfully developed in the world’s largest market. At the same time we were keenly aware – as are all start-up’s – that we had limited funds and therefore days to close the requisite number of customers to create an economically viable business before running out of capital.  To us, Carpe Diem meant seize the opportunity you have been given to create the future every minute of every day you work.    I have a similar feeling about Year Up.  I remind myself every day that I am incredibly fortunate and privileged to work in service to our amazing students and the opportunities corporate partners like GE give them to cross the Opportunity Divide.

Never Ever Quit

True confessions – we stole this from Winston Churchill’s “never, never, quit.” This was our mantra when three of us started The Loyalty Group in a Toronto hotel room in 1991 and became our business development rallying cry during the 8 years I was fortunate to run the company.  While in Canada, I was often asked to speak to business school students and share our strategy and leadership principals at other companies’ management team meetings and executive retreats.  A common question was “what’s the key to success when starting a business?”  Without hesitation, I always responded “creative perseverance.”

Creative perseverance is something I learned from my father who still holds the record for being both the youngest and the oldest person ever elected governor of a US state.  What most people don’t remember is that he actually lost three elections in between these historic milestones – an experience that would have eliminated the desire to ever run for elective office again in most human beings – but not him.  During his successful 1996 campaign, he didn’t re-use the slogans or policies from earlier attempts, but instead developed a platform around using technology to improve the employment opportunities and quality of life for West Virginians.  He adopted the slogan “A Leader for New Times,” secured the URL governor.com and created one of the first political campaign web sites.

The point of creative perseverance is to “never, ever, quit” but – equally important – it is to remember Einstein’s definition of insanity, “doing the same thing over and over again and expecting different results.” When I was Loyalty’s CEO It took me six years to land what became one of our largest customers and likely doubled the value of the company.  Every quarter I emailed the target CEO, but I never sent him the same message as the previous quarter.  I never wrote, “Hey it’s me again, asking for yet another meeting to talk about our loyalty program.”  Instead, I sent him examples of new innovations we had created to add value to other corporate partners: a recent case study on the ROI from investing in our program from a similar business; a new internet marketing application we had developed; a new database marketing product; the increased percentage of households in his store’s trading area that had joined our program; and our latest research showing the number of customers who would increase their spending at his stores if he joined our coalition. After literally six years of this water torture, he eventually succumbed and became (and remains) one of our most important customers.  At the dinner when we celebrated the signing of our contract, he said “you eventually became too logical to ignore.”

While I hope it never takes 6 years to convince a new corporate partner to hire Year Up interns and graduates, I recently realized that while I have diligently followed the mantra of “never, ever quit,” I have often failed to remember the importance of “creative perseverance.” Far too often, I emailed or called unresponsive targets with a message asking for an initial or follow-up meeting.  That actually worked in several instances as I secured meetings with leading companies after months of weekly requests, but – realizing my lack of creativity – I now wonder how much more efficient my efforts could have been if I included new case studies, articles, success stories, etc. from other Year Up partners in their industries.  One of the great things about Year Up is we have not only great “sizzle” – student and partner video testimonials, the 60 Minutes episode, etc., but also great “steak” – real quantitative studies and evidence of the value we create with our partners.  And with 3,700 students in 17 locations providing talent to over 200 corporate partners this year, we are constantly creating a steady stream of new “sizzle” and “steak” that can be used to accelerate our business development sales cycle.

No Regrets

“No regrets” is pretty simple.  At SLI, we refused to say the words “would have, should have, could have” the morning after losing a sale.  It means doing your very best, seizing every opportunity and “leaving it all on the canvas,” to use a boxing metaphor.  Although I loved the three years we worked together to try and get SLI off the ground, I had no regrets when we finally ran out of runway and investor patience. We gave it our best shot and used the full capabilities of our extraordinary team and partners.

But to be clear, “no regrets” does not imply that we never made mistakes.  One of our Operating Principals was “We learn from our mistakes, we don’t dwell on them.” I have always believed that I learn more from my mistakes than almost any other activity.  At The Loyalty Group, we hosted an annual “Global Experience Sharing Conference” where the management teams of sister companies from the UK, Netherlands and Spain would get together.  A highlight of these meetings was sharing “The 10 Dumbest Things We Tried Last Year.”  I recently realized I should be sharing the mistakes I have made over the last several months with the team members who work with me across the country.

Breakthrough

By definition, entrepreneurs are trying to create a product or service that has never existed before – otherwise, there would be no entrepreneurial opportunity.  Successfully creating a new product or service requires all of the above, but it also requires “breakthrough moments” when a prospective customer or investor “gets it.”  Although I realize some other experts disagree with me, I am a firm believer in “shooting all of the arrows in your quiver” when making sales presentations.  By that I mean using both steak and sizzle – data, testimonials, videos, etc. – as efficiently as possible when developing and implementing your sales and marketing tools and materials.  The logic for this is simple – you often don’t know which arrow is going to hit the prospect’s “sweet spot.”  Research tells us that using PowerPoint or other visual devices increases a prospect’s retention of your pitch by 30% vs just having a conversation, but it can’t tell you what form or medium will be most effective with an individual target.  There are several styles of learning and – unless you can get reliable inside knowledge about what forms will be most effective with your prospect – it behooves us to efficiently try all at our disposal.

At SLI, we developed what we affectionately called the “Blow Fish Strategy.” Initially there were just four of us competing against my former company The Loyalty Group – by then a billion dollar enterprise with an impressive 20 year track record – so we needed to develop low cost ways of making us look more substantial than we actually were. Our strategies included:

  • Buying low cost (i.e. $200) iPads from my former Bain colleague’s online retailer glyde.com, co-branding with SLI and our partners logos on a customer “skin”, creating a screen saver that looked like the iPad had been custom developed and programmed to only include our overview presentation, focus group videos of their customers saying they would increase sales if they could earn loyalty points and high quality images of their and other leading businesses displaying our point of sale materials.
  • Bringing on Toni Oberholzer and her “one wonder woman” creative firm OVO as a partner. Toni developed incredibly high quality loyalty program cards, membership kits, mobile apps and partner collateral for our business development meetings.  She worked under and delivered against ridiculous turn-around times and charged us a fraction of what one of the “big agencies” would have cost.
  • We figured out how to transform our presentations Toni’s brilliant creative into a hard cover Shutterfly books. We had these books individually produced with the names of the executives we met with and they arrived at their offices within 4 days of our initial meetings. Best of all – they actually cost less than having a presentation printed and bound with a plastic cover at FedEx!
  • Shout out to my Co-Founder Lauren Creedon for leading all of the above.

We found that individual aspects of the blow fish strategy worked well with different individuals.  For some, the creative mock ups “got them;” for others it was our videos of their customers’ voices or our program results from leaders in their industries from the Loyalty Group’s AIR MILES program.  In a few cases, we had “insider information” and knew – for example – to not share our focus group videos with the Vice Chairman of the Red Sox, who was more of a “numbers guy.”  But if not, we would live test each element to see what worked with each target executive and use their feedback to tailor our message.

Recently, several of my Year Up colleagues and I have realized there exists a “7 Step” business development process we need to progress through to reach our goal of becoming a significant strategic source of entry level talent for our corporate partners:

We also realized that progressing from one step to the next often happens after a “breakthrough” moment and that over our 17 year history, we have developed a number of “breakthrough accelerators” that can reduce the sales cycle between each step. Examples include:

  • A Year Up Champion changes roles or companies, e.g. David Kenny became General Manager of IBM Watson; Jeff Robison became COO of WorldPay.
  • An article is published about a Year Up Corporate Partnership, e.g. State Street and American Banker.
  • A new Year Up Corporate Partner video is developed. e.g. Year Up Cyber Security Curriculum developed in partnership with Symantec, eBay and LinkedIn.
  • The establishment of a cross functional internal Corporate Partner Steering Committee focused on maximizing the value proposition of their partnership with Year Up. JP Morgan Chase, Bank of America and others have done this.
  • Opportunities for Year Up executives to present at high level cross functional meetings, like GE’s CIO Council.

Those of us who lead our largest relationships our now collaborating with marketing and sales operations support to collect and share these and other best demonstrated practices to help accelerate our mission delivery.

Please let me know your motivating words and slogans – on T-Shirts, board room or basement walls or otherwise – and I’ll share them with Ariel and her five children.

Thanks

CHU

An Extraordinary Example of Collaboration Helps GE & Year Up Bridge the Opportunity Divide

I have had the great fortune to be a small part of the extraordinary success of Year Up over the past 16 years.  Year Up is the innovative workforce development organization started in 2001 by Gerald and Kate Chertavian that recruits, trains and places underserved inner city young adults in living wage careers with Fortune 500 companies and other leading enterprises.  Year Up started with 22 students in one Boston location and has grown to serving 3,700 young adults this year in 17 locations across the  country.

I am blessed to have had the opportunity to play many roles at Year Up, including serving on the National Board for a decade.  My current role is working with a handful of large US companies: GE, Comcast, Liberty Mutual and IBM to identify and fulfill their needs for entry-level middle skill talent.

A few weeks ago, we were given the opportunity to share this video at a conference attended by 300 GE IT Leaders from around the world:

Click on this image to view the GE Year Up video

Even though I have been doing this for over 16 years – the video literally sent chills down my spine.  As I have often said, I am one of the luckiest men in the world and appreciate so much the opportunity to work with Year Up’s students and corporate partners every day.

Last weekend, I thought a lot about the series of events and extraordinary level of collaboration that led to the creation of this video and wanted to share them with you.

All roads lead back to David and Gerald

Year Up was started in 2000 by Founder & CEO Gerald Chertavian.  After graduating from Bowdoin, Gerald worked on Wall Street and spent every Saturday with his “Little Brother” David Heredia.  He quickly realized that David and many of his friends were smart, motivated and capable, but didn’t have the opportunity to realize their potential to end up in prosperous, meaningful, fulfilling careers.  After selling his successful internet company in 1999, Gerald dedicated himself to creating Year Up to provide the “David’s” of our country with the skills, experience and support they need to succeed.

Gerald Chertavian and David Heredia 1988

Our founding corporate partners

In addition to GE, Year Up has supplied talent to over 250 leading enterprises across the country. Without them, Year Up couldn’t exist.  Today, we benefit from a tremendous 16-year track record of providing real, tangible value to our corporate partners and can back that up with a 60 Minutes episode about Year Up that includes testimonials from Ken Chenault, the Chairman of American Express and Jamie Dimon, Chairman and CEO of JP Morgan Chase.  But in the beginning, Gerald and I were void of any hard evidence that our model would work. Luckily for us and the 16,000+ students we have served, a few visionary leaders took a chance on our model and hired the first Year Up interns.

They included:

  • Phyllis Yale – then Managing Partner for Bain & Company’s Boston office
  • David Kenney – then CEO of Digitas
  • David Andre – then CIO of Upromise
  • Brett Browchek – then COO of Putnam Investments

With the initial support of these leading companies, we were able to secure commitments from enough companies to place our first class of students in their internships.

Founding Corporate Sponsors

Our extraordinary Founding Class of students

Without the grit and determination of our students, Year Up would not have made it to its second anniversary, much less to 17 cities.  The success of our students – from class one through those on internships today – is the real reason Year Up has been so successful.  Our corporate partners continue to hire Year Up interns and graduates and refer us to their colleagues at other enterprises because they have found that we have become a valuable pipeline of talent.

Year Up’s Founding Class February 2001

Our partnership with GE Digital and the creation of the video

The genesis of the partnership with GE Digital began in 2013 when our consultant Ed Solomon introduced Year Up to Bill Ruh, the CEO of GE Digital.  With Bill’s support, Alex Nguyen and Raul Cardenas became the first Year Up students placed at GE Digital in San Ramon in January 2014. Both had successful internships at GE and were offered and accepted full time positions.  Alex currently works as a software developer at OSU’s Open Source Lab and Raul has been promoted several times at GE and currently works as an Application Operations Engineer.

After seeing the 60 Minutes episode about Year Up, GE CIO Jim Fowler discovered that GE Digital had hired several students and graduates.  When GE made the decision to move their headquarters from Fairfield Connecticut to Boston’s Seaport area, Jim asked CTO Adam Radisch to consider placing Year Up interns in their My Tech Lounge at the new office.  Modeled after Apple’s Genius Bar, GE’s My Tech Lounges are walk-up help desks in attractive lounge areas where employees can quickly get support for laptop, tablet, phone and other hardware and software problems.

Last June, Year Up Boston’s Business Development executive Randi Kinsella and I traveled to meet with Adam to explain our program and discuss the opportunity to pilot our students in a GE My Tech Lounge.  Amidst Yankees memorabilia and moving boxes being packed for his impending move, Adam gave us 30 minutes to explain Year Up’s model.  We had a full presentation, but quickly made the decision to share only one slide:

Although he appeared supportive at the time, Adam later shared, “When I first heard about Year Up, I thought it was a second chance program for at risk kids, and probably not right for GE.  This slide changed my mind.  I decided to give a few students a chance in Boston, they knocked the ball out of the park and now I am Year Up’s executive champion at GE and want to help grow the program to as many divisions that need great entry level talent as we can.”

After returning to Boston, Randi and I met with Year Up Boston Executive Director Bob Dame and other Boston executives and worked with them to “match” the right students for an internship at GE’s new headquarters.  Adam had stressed the importance of strong interpersonal and communications skills when we met with him and our Boston team selected Angel, Cody and Ryan for this pilot program.  Guided by their incredibly supportive GE managers, Alex and Jesse, our three students were successful in their internship and all three received full time offers from GE.  At their graduation, Alex received the award for The Best New Supervisor and Angel was a featured graduation speaker.  From his remarks, I learned that Angel had originally turned down his acceptance to Year Up, but was contacted a week later by a staff member who convinced him to join the program.  If you listen to Angel’s speech, you will hear him give credit to his mom, his Year Up internship colleagues and the support of his GE managers for his success:

Click on the image to watch Angel’s speech

During our November monthly update with Adam, I shared some of the internal communications our other partners have developed to highlight their partnership with Year Up and asked him for an introduction to a GE marketing executive.  Adam introduced me to Jen Sampson, IT Communications & Engagement Leader for GE Digital.

Jen agreed to meet with us on the 23rd of December at Year Up’s Chicago offices.  While most of the country was winding down for the holidays, Roberto Zeledon, Year Up’s Director of Marketing, Randi and I flew to Chicago to meet with Jen, where we were hosted by Executive Director Jack Crowe.  As part of a short presentation about Year Up and our partnership with GE, we shared this JPMorgan Chase video that features CIO and Year Up champion John Galante and several of our graduates who have been hired by the bank:

 

 

Click on the image to see the JP Morgan Chase video


This video was the brainchild of John and my Year Up colleague Betsy Goodell, who leads our partnership with JPMorgan Chase executives.

After a tour of Year Up Chicago led by two students, Jen returned to her office.  Then, acting at what I now referred to as “GE Speed,” she emailed me less than an hour later and invited us to produce a similar video about GE’s partnership with Year Up. If we were able to create a short video by January 16th, Jen had already received approval from CIO Jim Fowler to “premier” it a their upcoming IT Leaders meeting in Phoenix, where 300 GE executives would be in attendance.

Within hours of receiving Jen’s email, Roberto confirmed with Year Up’s Brand Manager Kim Wheeler that we could create a video over the next 3 weeks, despite most people being on holiday between Christmas and New Year’s.  Kim and Randi managed the entire production of the video. I was visiting GE Digital in San Ramon and our Bay Area site when Gerald, our students and their fantastic managers were filmed.

Jen and Jim were also kind enough to invite us to have a Year Up booth at their conference outside the room where they showed the video. During the conference, we made over 20 GE executive contacts and are following up on new opportunities with 5 GE Divisions who have not yet hired Year Up students or graduates.

After hearing Angel’s graduation speech, I reached out to Ari (the social work intern who convinced him to join Year Up) to thank her for that fateful phone call.  She emailed me back, “As one of Year Up’s Co-Founders and head of Boston Student Services Linda Swardwick Smith always says ‘it takes a village to do this work’, and I’m very grateful Year Up and GE teamed up to form that village for these men, and again I’m honored to have been a part of it.”

Her email inspired this article, as it clearly took the entrepreneurial actions of many people to create our GE Year Up Partnership video. My primary reason for writing this was to thank all of those who helped it become a reality.  The more I do this work, the more I realize our success is driven by:

  1. Our students and alumni who make the sacrifices to join Year Up and power through their life challenges to demonstrate their capabilities during internship and graduate from our program.
  2. Our staff and instructors that teach, support and help our students prepare for internship success.
  3. Our extraordinary corporate partners who create the opportunities for our students to succeed.

What I do is relatively easy – I just observe, package and communicate what happens, connect students with partners and make the occasional inappropriate “ask” of our partners like, “Can I bring three of my friends to your internal meeting of 300 senior execs in Phoenix?”

Thanks so much to Cody, Angel and Ryan, to Jim, Adam, Alex, Jesse and Jen and to everyone at GE, our other partners and our team at Year Up who contributed to the creation of the video.

A Tribute to the Original Collaboration Evangelist

On the Monday before Thanksgiving [2008] my father, Cecil H. Underwood,  passed away.  The date was November 24th, nineteen days after his 86th birthday and twenty days after Barrack Obama was elected President.   My father was born two days before Election Day in 1922, elected the youngest Governor of West Virginia two days after he turned 34 and elected the state’s oldest Governor on his 74th birthday.  In my post, Why a Collaboration Evangelist, I wrote:

Perhaps it’s a “nature and nurture” thing, as I have always been a strong believer that teams of smart people with diverse backgrounds and points of view will always have a better chance of solving challenging problems and finding new opportunities to add value to any enterprise than the model where “one smart guy solves all the problems and makes all the decisions.”

From the nature side, I was born the day after my father was inaugurated as the 25th governor of the State of West Virginia at the age of 34.  One of the things he told me about that campaign was although they had only one paid staffer – his driver – the campaign was supported by 3000 volunteers. The campaign put all of their efforts into organizing and energizing their volunteer network to register and get supporters to the polls.  They spent the money they raised on the new technology of the day called TV advertising.  This strategy enabled him to become the first Republican governor in 25 years in a state where Democratic voters outnumbered Republicans   by 2.5 to 1.

The many papers around the world that carried the news of my father’s death described him as “a high school teacher who became a governor.”  While it is true that he started his career as a high school biology teacher and his last formal employment was as a Drinko Scholar at Marshall University, my father was always quietly teaching through his actions to those of us who had the good fortune to know and work with him. At his memorial service, I remembered my father by sharing some of the lessons he taught us by the way he lived and the way he led.  These included:

1. No obstacle is too high to overcome if you believe in yourself and are willing to work very hard to achieve your goals.

My father took on monumental challenges from the beginning of his career.  At the age of 22, he challenged a long standing incumbent to win the first of six terms to the State Legislature.  Twelve years later he was elected Governor.  But at the end of his first term he lost a race for the US Senate (at that time, Governors could not run for re-election) and over the next 36 years he ran unsuccessfully for Governor three times.

1956 Campaigning for Governor at 33 Years Old

1956 Campaigning for Governor at 33 Years Old

During this period, I remember thinking that maybe my father had “peaked too soon” at the age of 34, like an NBA team playing their best ball before the playoffs.   He showed me otherwise in 1996 when he was elected the State’s 32nd Governor.  During his second administration, more jobs were created, more roads were built and more school children and seniors were connected to the internet than during any other four year period in the history of West Virginia.

As I admired his work ethic and the successes of his second term, I thought he was the greatest role model for working hard and beating the odds that anyone could ever have.  But again I was wrong. Not wrong in the role model, but wrong in the act.

The most amazing thing I saw my father do was to come back from a paralyzing stroke he suffered in 2006 at the age of 83.  The entire left side of his body was paralyzed with the exception of his fingers, which he could move slightly if he wasn’t too tired.  At his discharge planning meeting a few months later, my sisters and I told Dad he needed to move to an assisted living facility to continue his rehabilitation.  He was none too happy with our proclamation and wanted to know what he had to do to live at home again. We told him he needed to be able to walk.

So, for the next three months, he did 5 hours of physical therapy a day – riding the stationary bike, lifting weights and doing anything else the PT staff at Charleston Gardens told him to do.  His efforts were rewarded as he indeed did walk again and was selected “Stroke Recovery Patient of the Year.” More importantly, he was able to return home for several years.

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Three I Leadership

During the time I was CEO of The Loyalty Group, we grew from three entrepreneurs in a Toronto hotel room to over 600 employees when we sold the business to Alliance Data System (NYSE: ADS) in 1998.  Throughout this period, I thought a lot about both leadership and how to help our people develop the requisite skills to advance as far as they wanted to in their careers.

Nothing gives me greater pleasure that seeing those who worked with me do extremely well.  Two great examples are John Scullion and Brian Sinclair.  In 1993, I had to use all of my selling skills to convince John to leave the high profile corporate travel business Ryder Travel and join a company whose balance sheet looked similar to some now defunct Wall Street firms.  John is now President and COO of Alliance Data Systems, with a market cap of several billion dollars.  Brian Sinclair, whose first job out of college was an AIR MILES analyst, is now the Managing Director of Nectar, the wildly successful coalition loyalty program in the UK that recently sold to Aeroplan for $700MM.

After we visited Brian at his London offices last summer, my 12 year old daughter Jordan remarked, “You gave him his first job and now he has a better job than you!”  Although I thought about reminding her that the flexibility of my firm enabled our father-daughter trip to London, my wiser side prevailed and I responded, “That’s right, and nothing could make me happier than seeing people I hired doing really well.  That means I hired great people and hopefully they learned a few things from working with me.”

One of the things I came to understand about leadership and developing executive talent became what I call the “Three I’s of Leadership.”  I realized to build a successful high growth company while delivering on our cultural goal of “doing what others consider the impossible, while treating people with respect and having fun along the way,” we needed leaders with the following skills:

  • Intellectual Leadership – Leaders who had both the raw brain power to identify opportunities and solve challenges and very deep skills in their specific areas of expertise.
  • Implementational Leadership – Leaders who were not just “consulting smart.” Executives who could actually stop thinking, developing models and drawing 2 x 2 matricies and “land the helicopter, get the troops in the field and make things happen”, to quote a former client.
  • Inspirational Leadership – Leaders who could get things done without making everyone who worked for them want to quit.

Over time, I found out two things about this model:

Three I Leadership can be, and usually is, a shared set of skills. Although no senior executive can have below threshold skills in any of the areas, many highly successful companies are lead by “Three I Leadership Teams.”  I first realized this through being involved in YPO (the Young President’s Organization) where I spent a lot of time with other Presidents of successful companies. My original belief was that successful CEO’s had to be “A” players in all three leadership skill sets, but I observed several who clearly were not what anyone would consider “motivate the troops inspirational” and others who were brilliant “idea machines,”  but needed someone to keep them from trying to implement every idea as soon as it burst into their heads.  All I observed were very smart, but not all would qualify for Mensa.

I soon realized that almost everyone had built a “Three I Team” around themselves by hiring direct reports that balanced and complimented their skill sets. There was the collaboration principle at work again.  Once I realized the importance of Three I Teams (and the stupidity of expecting every senior executive to be naturally gifted at all three), I started using the model to help my direct reports work on their weakest areas and to make sure we had Three I Teams leading all of our major groups and strategic initiatives.

I later began using the Three I model in recruiting and would ask candidates to distribute 100 points across the Three I’s to indicate their leadership strengths and weaknesses. One of the funniest reactions I received to this question came from an executive who had worked at American Express during the 90’s when Harvey Golub was CEO.  He responded something like, “That’s a great model.  Harvey is 60 intellectual, 40 implementational and 0 inspirational.” Then he became even more excited and said, “No, that’s not correct.  He is 60 intellectual, 60 implementational and negative 20 inspirational.”  Although the candidate was clearly exaggerating in jest, he was making my point exactly as Ken Chenault was Gulob’s number two at the time. I had the good fortune to spend time with Ken in the late 90’s as he had to personally approve American Express’s deal to  become an AIR MILES Sponsor.  Then and now, there may not be a better example of a “High I Inspirational” leader than Ken.

The model can apply to the leadership teams of organizations large and small. I recently thought about this model and how it applies to little league baseball coaches.  A coach needs to know the game of baseball, the complex rules, how to catch, hit, run and steal bases, etc.  Knowing how to play baseball is necessary, but insufficient. Someone on the coaching staff needs to know how to teach young kids to play baseball – how to learn the game and improve their skills. What drills are most effective in practice; how to spot a batting stance off balance or throwing motion without follow-through and how to make the subtle changes to correct these errors.  Finally, as all sports are partly mind games and baseball can be incredibly stressful for young athletes, at least one of the coaches has to be able to keep the kids fired up and have a vast vocabulary of positive things to say no matter what happens at the plate!

If this model makes sense to you, try it inside your own organization.  If it applies, consider building it into your professional development systems and recruiting strategies.  Collaborate by letting me know if it worked and what you have done to build upon it.

 

Note:  This post was originally written on November 11, 2008. 

Note to Starbucks CEO: Don’t use technology (or loyalty programs) to demotivate your employees

 

Summary: While the Starbucks App is cool and makes buying coffee and food quick and easy without dealing with cash, credit or debit cards, the company appears to have developed the app without fully considering the impact on their employees. The app doesn’t offer users the option to tip baristas when making a purchase.  Other mobile payment apps like LevelUp and even taxi cab credit card machines make tipping quick and easy for users.  The Starbucks Rewards program also concerns us as it rewards customers for paying for one item at a time, even when purchasing multiple items, which could lead to increased employee and customer frustration.

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Is the U.S. coalition loyalty’s Afghanistan? Overcoming the challenges of the U.S. market.

Afghanistan map with question mark.

Net: Coalition loyalty programs are among the most successful and fastest growing businesses created over the past 25 years, with flourishing coalition programs currently operating in many countries around the world. The one glaring exception – the U.S. market. Why? It certainly isn’t for lack of trying. Over $1 billion has been lost by companies and investors attempting to launch coalition loyalty programs in the U.S.


We believe the reasons no one has launched a successful U.S. coalition program are embedded in the five unique challenges of the U.S. market:


  1. Overcrowded loyalty space – the average U.S. household has joined 18.5 loyalty programs, but remains active in 8.
  2. Lack of nationwide or clearly defined regional businesses in major consumer spending categories – difficult to identify coalition partners with consistent presence across markets.
  3. Few unique rewards – lots of commodity-based, “me too” rewards.
  4. Rewards are expensive – economic value back has become only distinguishing feature; competitors continue to increase percent back to compete, raising overall costs.
  5. Lack of cooperation among U.S. companies – American companies have not historically “played well in the sandbox together” and few examples of long term coalition partnerships for anything exist in the U.S.

So what’s the solution – “cut and run”?  Not necessarily.  We believe there is a path to daylight to develop a coalition loyalty program in the challenging U.S. market. Doing so will require a breakthrough program model that not only incorporates the requisite 6 A’s of Coalition Loyalty Success, but contains the following  elements:


A. Truly breakthrough, motivating assets to cut through the current “clutter” of loyalty programs.
B. Better designed rewards inventory with a selection of rewards that appeal to consumers on both an emotional and rational basis.
C. Critical program elements and unique assets that cannot be duplicated by competitors.

D. A regional approach that makes sense in order to create a strong coalition of leading partners.

E. A technology platform that leverages the new user friendly opportunities for member engagement enabled by 21st century social, mobile and interactive digital media, and finally, most importantly

F. Bold, visionary, risk taking leaders who are willing to “play to win” instead of “playing not to lose” and will benefit most from being the first to champion the tremendous potential of  participating in a coalition loyalty program.
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Collaboration Big Citizenship for Skateboarding in Brookline

Net: Realizing that our son had no dedicated places to skateboard in our town of Brookline, Massachusetts, my wife Patty organized a group of young skate boarders and parents, teachers, nonprofit and other leaders to advocate for the creation of safe places to skate in our community.  Although we have a lot of work to do and have only taken the first few steps in what will undoubtedly be a long journey, the collaborative efforts of our small but committed group, the over 100 friends who supported us online and the 60 young skaters and their parents who attended our presentation to the town’s Parks and Recreation Commission have successfully launched our campaign.

FBS LOGO VS 2 BLUE AND YELLOW

In his recently published book, my friend Alan Khazei – the social entrepreneur , Co-Founder of City Year and former candidate for the US Senate – makes the case for creating change through the collaborative efforts of public private partnerships, where citizen activists, business leaders and government agencies work together to address challenges and create new opportunities.  He refers to this model as Big Citizenship, advocating that the old models of relying too heavily on either big government or private industry are tired, ineffective and not appropriate for creating change in the 21st Century.

Big Citizenship CoverAlthough the concept of Big Citizenship is not intuitive to all, you clearly know it when you see it in action.  I had such an experience recently.  Realizing that our son had no place to skateboard in our town of Brookline, Massachusetts, my wife Patty organized a group of young skate boarders and  parents, teachers, nonprofit and other leaders to advocate for the creation of safe places to skate in our community.  Alan would see this as a clear example of the power of big citizenship, and I would agree. But I also see it as a compelling example of collaboration and, as we are beginning to increase our social and traditional media outreach, a great case study in how the internet can support and turbo-charge the efforts of a small but committed group.

None of this would have been possible without both Patty’s initiative and the phenomenal and strategic efforts of our friend Armin Bachman.  Armin is truly a Big Citizen.  (Last year I encouraged Alan to promote his book by starting a Big Citizen contest where people could nominate others for recognition; I had Armin in mind as a leading candidate.)  Armin is an entrepreneur; he is co-owner of Orchard Skateshop, by far the best skateboarding store in the Boston area.  He is a social entrepreneur, having founded the nonprofit Extension, to make skating more accessible in the greater Boston area.  Armin and

Armin and Myles the other owners of Orchard are big citizens in their community as well, giving 1% of their revenues to local nonprofits and helping new artists by hosting shows in the gallery above the shop.  He is also one very smart and connected dude, knowing leaders in the skateboarding space across the country and increasingly around the world, and very gifted at finding data related to developing safe places to skateboard.  (Full disclosure: Armin is also Myles skateboarding teacher.)

Other members of the original group included Nicco Berinstein, a Brookline High School 11th grader and avid skater; Eileen Amy, Nicco’s mother and a registered nurse; Michael McKittrick, a Brookline High School teacher and the faculty advisor to the school’s skateboarding club; John Wynne, a Cambridge businessman, skater, and a passionate skateboarding advocate; and our son Myles, an avid skater and the person who helped us see the need for safe places to skate in Brookline.

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Too little too late? Will Obama’s lack of collaboration kill health care reform?

Net: Obama’s failure to leverage the collaborative efforts of others, consider and include good ideas from his opponents and provide the requisite and timely leadership contributed greatly to congress’ inability to pass heath care reform.  Will the rhetoric and approaches of the last two weeks be enough to revive it or are they too little too late?

dr-mark-in-haiti2I have often wondered if there is a common event that gets people to start blogging.  I imagine for many it’s a topic or an issue they feel so passionate about that they feel compelled to share their thoughts with others.   For a wonderful example of this, see my friend Dr. Mark Pearlmutter’s blog from his two weeks as a volunteer in Haiti.

One thing I know for sure is what stopped me – jumping into the Citizens for Alan Khazei Senate campaign for the last 55 days of the 90 day special election to fill Ted Kennedy’s seat.  Since the campaign ended, I have had many posts “drafted” in my head, but have been experiencing some kind of weird writer’s block that kept my fingers from typing.   I began to fear that maybe leading 128 pages of policy work in under two months used up all of my words for the year!

As anyone who knows me knows – health care is my biggest issue and has been since my then six month old daughter was sick for the first time.  Fortunately, we were living in Toronto and had access to a wonderful pediatrician who returned our call at 10:00 in the evening and sent us to a world class children’s hospital a few blocks from our home.  I realized at that moment that there were millions of American’s who couldn’t have done what we did and became a dedicated soldier in the war to bring health care to all American’s and to lower the cost and improve quality for those of us lucky enough to have coverage.

I have written before about my frustration with Obama’s ineffective attempt to sell health care reform to the American people in the post What Obama can learn from Ross Perot, Cecil Underwood and Coalition Marketing.  Listening to some of his remarks about health care reform over the past ten days has me sufficiently agitated to start blogging again.  A few more suggestions for the President:

1. Look for others who have already collaborated and use them.

Last summer, I found an incredibly thorough bi-partisan proposal for health care reform called Crossing Our Lines: Working Together to Reform the U.S. Health System.  This report was written by former Senate Leaders Bob Dole, Howard Baker and Tom Daschle.  George Mitchell also was a major contributor to the project, but was not listed as an author on the final report after shifting all of his efforts to his role as special envoy to the Middle East.  The report was the product of a two-year consensus-building process called the The Leaders’ Project on the State of American Health Care.  Their plan is a comprehensive set of policy recommendations that aims to provide quality, affordable health coverage for all Americans and includes recommendations to improve quality and control costs.

crossing-our-linesHaving stumble upon this report, I was surprised that I had not heard of it from traditional news media or blogs, and disappointed that Obama wasn’t using this as a framework for his heath care reform efforts.  We used this as one of the primary sources for developing Alan Khazei’s health care policy during his race for the Massachusetts U.S. Senate seat.

Then, last week on either XM Radio’s POTUS or CNN, I heard the President refer to The Leaders report at least twice.  Saying,

“The component parts of this thing are pretty similar to what Howard Baker, Bob Dole and Tom Daschle proposed at the beginning of this debate last year.

“Now, you may not agree with Bob Dole and Howard Baker and Tom — and certainly you don’t agree with Tom Daschle on much … but that’s not a radical bunch. But if you were to listen to the debate, and, frankly, how some of you went after this bill, you’d think that this thing was some Bolshevik plot.”

“And so I’m thinking to myself, ‘Well, how is it that a plan that is pretty centrist… (more)

Why didn’t he use this as an example and – better yet – use Dole and Baker to help him sell health care reform over the past twelve months?

2. Collaboration means working together and using each other’s good ideas, not just giving them lip service.

RNC Chairman Michael Steele spoke at Harvard’s Institute of Politics last week. During his remarks, he mentioned that Republicans had offered over a dozen ideas and proposals for addressing the country’s dysfunctional medical malpractice system, but none of them were given serious consideration by the administration.    If Obama is serious about lowering the cost of health care, he needs to address medical malpractice, considered by many experts to be the major driver of defensive medicine.  The cost of defensive medicine has been estimated to be between $70 billion and $200 billion a year by PriceWaterhouseCoopers Health Research Institute and others.

Again, this idea is not new.  Bill Bradley wrote about the need to form a bi-partisan coalition to pass  health care reform and the opportunity to use medical malpractice reform as an issue that would bring Republicans to the table in his 2007 book, The New American Story. He made this point again in an August 2009 New York Times Op-Ed article, Tax Reform’s Lesson for Health Care Reform.

joint-commission1On the Khazei campaign, we reached out to our network of friends we were introduced to Dr. Alan Woodward, a former President of the Massachusetts Medical Society and a passionate expert on health care cost reduction.  Dr. Woodward turned us onto the successful approaches to medical malpractice reform being successfully implemented by the University of Michigan Health System and recommended on by the Joint Commission on Accreditation of Health Care Organizations. (I will write more about this in an upcoming post on the collaborate efforts of the Khazei campaign.)

Again, the answers are out there if you truly believe in collaboration and are willing to do the work to find them.

3. Collaboration does not mean abdication of leadership.

Anyone who has engaged in a truly collaborative effort quickly realizes that harnessing the wisdom of crowds takes work.  I recently experienced this when using 99designs.com to run a contest to develop a logo for a new organization among hundreds of graphic designers from around the world.  As John Della Volpe, the Founder of SocialSphere Strategies wrote about in a recent blog post, you need to provide leadership (a clearly written brief) and guidance (continuous feedback to initial and revised designs) to get a quality product when using this or other hugely collaborative processes.

President Obama’s lack of leadership on health care has been a concern to many of us who applauded his courage to take on this most important and possibly most challenging issue.  To me, his almost hand off approach through most of 2009 felt like a “guardrail to guardrail” over-reaction to the mistakes of the Clinton administration’s health care reform efforts.  Whereas the Clinton approach is remembered as one where Hilary Clinton, Ira Magaziner and a few others developed in closed meetings the plan they expected congress to pass, the Obama administration’s approach was almost the polar opposite.  The President’s instructions to congress to “increase coverage without increasing the deficit” and his failure to make a major address about health insurance reform until late summer are two examples of the lack of leadership he provided, with what we now see as disastrous results.

According to Politico Pulse – a great new source of information I recently found on my Kindle – at the closed door session with Democrats last week, Al Frankin and others raised this concern:

Sen. Al Franken ripped into White House senior adviser David Axelrod this week during a tense, closed-door session with Senate Democrats.   Five sources who were in the room tell POLITICO that Franken criticized Axelrod for the administration’s failure to provide clarity or direction on health care and the other big bills it wants Congress to enact.

Obama has scheduled a Health Care Summit meeting with Republicans on February 25th.  Lets hope he provides both real collaboration and leadership and that it won’t be too little too late.

What Obama can learn from Ross Perot, Cecil Underwood and Coalition Marketing

chu-and-ross-perot
Two weeks ago while on vacation in Washington, DC, Patty and I found D’Acqua, a great seafood restaurant on yelp and left two happy kids with room service and movies at our hotel.  We were seated a few tables away from David Axelrod, President Obama’s senior political advisor.  I was about to ask our waiter for a piece of paper to write him a note with some ideas on how they could more effectively promote healthcare reform legislation, when Patty let me know that wasn’t her idea of a romantic dinner together.

I just finished reading The Battle for America 2008, a great book about the 2008 election, on my Kindle.  It is clear from the book that Barack Obama learned a lot about the need to prioritize healthcare reform from the late Senator Kennedy.  Here are a few thoughts on lessons he could learn and apply from others leaders:

From Ross Perot and Cecil Underwood – Use the data and a few high impact charts. 

Every time President Obama speaks on health care, I expect to see a few high impact charts that layout the major problems that need to be addressed.  And every time I am disappointed. The data is clear and easy to access.  A few examples:  Medicare’s administrative costs are about  1% of total costs, while private insurance administrative costs are around 15%; the average American family’s health care insurance premiums paid have doubled since 2001  from $6000 per year to $12,000 a year; US health care cost per capita is over $4000 higher than the next highest country.  Obama could make this data extremely relevant to the average American by showing the impact of higher health care costs on the price of a car or other goods made in the US vs Canada or Japan.

charts-for-blog-post1

 In 1992, Ross Perot effectively used simple charts to get some of his major points across.  Years early, in my father’s 1956 successful bid to become the youngest governor of West Virginia, he used simple posters to point out that the state was paying much more than surrounding states for road building equipment.

During my six years as a consultant, manager and partner at Bain & Company, we used simple bar charts to show clients their uncompetitive cost positions.  During my tenure, I showed CEO’s, factory workers, and cardiac surgeons these charts, and in every instance, they got it.  Obama needs to do the same.

From Coalition Marketing – Use the logo’s of your diverse group of supporters and use their voices to support reform.

In 1992, after launching the AIR MILES shopping reward program in Canada, I coined the term Coalition Loyalty Program to describe reward programs where consumers could collect points from multiple retailers who were given exclusivity or co-exclusivity in their consumer spending category (e.g. grocery stores, gas stations, credit cards).  In addition to AIR MILES in Canada, other successful coalition loyalty programs include Nectar in the UK, Fly Buys in Australia and Upromise in the US.  One of the benefits of a coalition program versus a single company or stand-alone program is the power of coalition marketing.  When programs are launched with the full marketing support of leading companies like Safeway, Shell and Bank of Montreal, they achieve breakthrough awareness in record time.

The support of these market leaders also gives the new program instant gravitas, which helps the company running the program to receive favorable PR coverage and in-turn, sign up more leading companies.  In all of our business development, PR and marketing materials we prominently featured the logos of our major sponsors.  Our coalition partners went even further to support the program and grow the coalition – they helped us sell new sponsors.  On one occasion, Derrick Fry, then SVP of Electronic Marketing for Bank of Montreal (which at the time was the 6th largest bank in North America) flew with us to Calgary to meet with a potential sponsor for dinner and then flew back to Toronto on the red eye.  On another occasion, Bill Turner, then CMO of Sears Canada, helped us pitch a leading Ontario grocer on the program.

The other thing missing when I watch Obama’s press conferences and rallies are the logos and names of the broad base of businesses, organizations and other leaders that support healthcare reform.  Among others, Wal-Mart, the AARP, PhRMA (the Pharmaceutical Research and Manufacturers Association), and the AMA all support healthcare reform.  Why not use these organizations’ support as proof that reform is needed and why not use their leaders to promote the need for reform?

logos

One of the best examples of creating and leveraging a stellar list of supporters also comes from the coalition loyalty world.  In 2001, Michael Bronner and Jeff Bussgang, the founders of Upromise, with the help of their VC General Catalyst, created one of the most impressive lists of supporters ever assembled.  Their Advisory Board included: former Senator Bill Bradley; Kim Clark, then Dean of Harvard Business School, John Doerr from Kleiner Perkins, David Rockefeller; and John C Whitehead, former Chairman of Goldman Sachs and the Federal Reserve Bank of New York.  Talk about gravitas, with this lineup of supporters, Upromise could get a meeting with any CEO or CMO in the country and they used the group to help them recruit the largest coalition of sponsors ever assembled in the US.

A few months ago, former Senate Leaders Democrat Tom Daschle and Republicans Howard Baker and Bob Dole published Crossing Our Lines – Working Together to Reform the US Health System, their proposal for healthcare reform.  Why not use these three leaders along with the CEO’s of Wal-Mart, the AMA, PhRMA, and the AARP as a base to build a broad coalition of supporters and engage them in the active promotion of the need to pass healthcare reform?

I agree with the experts and pundants  that if Obama wants to pass healthcare legislation this year, he needs to take a more aggressive leadership role and also be more specific about the plan he wants, but I also believe he will be much more successful if he builds and leverages a coalition of supporters to help him.  That’s how he became president in the first place.