Leading by f*ing up

My brilliant friend Morra Aarons-Mele, creator of the podcast “Hiding in the Bathroom” and author of a book by the same name subtitled “An Introvert’s Roadmap to Getting Out There (When You Would Rather Stay Home),” recently posted the poignant question “How do you stop obsessing over a f-up?” on Facebook.

I responded to her post:

Here’s how I TRY to put f-ups behind me. 1. Write it down 2. Identify lessons learned, if any. 3. Share my mistakes with team members and mentees.

 At our company The Loyalty Group, we hosted annual Experience Sharing Conferences with the management teams of our sister companies from around the world. A highlight was always the presentations by each CEO on the biggest mistakes made over the past year. One of our Operating Principles was “Learn from you mistakes, don’t dwell on them. Identify the lessons learned, share them and move on.”

Morra’s question and several recent experiences with leaders who seem hesitant to ever admit – much less promote – their mistakes stimulated this article.

Here’s what you can do to use your mistakes to add value to the missions you pursue and the teams you lead:

  1. Be ruthlessly self-candid about the mistakes you have made. Recognize them.
  2. After you recover, think about the lessons learned. What – in hindsight – could you have done before the moment of your mistake to have prevented it?  I have often found this simple matrix from Chapter 3 of Stephen Covey’s 7 Habits of Highly Effective People helpful:

 

In his book, Covey makes the important point that leaders often find their days consumed with responding to and managing both work and personal “emergencies” and “crisis.”  They live in Quadrant 1, spending their time on critically important and urgent issues.  His more important insight is that many of these crisis could have been avoided if leaders focused more on and invested in Quadrant 2 activities and issues:

One of the challenges of this paradox is – in most cases – if you don’t invest in Quadrant 2 initiatives today, you likely won’t lose a customer, key employee or experience other professional or personal pain today.  E.g. If you don’t get some exercise today, it’s unlikely that will lead to a heart attack.  Another challenge is we often find it difficult to find the time to prioritize Quadrant 2 activities because we end up spending all of our time putting out Quadrant 1 fires.  This analysis may be helpful as you think through the lessons learned from your most recent mistake. One of our insights was that we needed to make Quadrant 2 initiatives mandatory and – on the rare occasion  when all else failed – give them same “nights and weekends” priority we would Quadrant 1 emergencies.

  1. Share –  and even consider promoting – the mistakes you have made with your colleagues, the teams you lead and the people you mentor. In order to successfully do this, you need to both lead by example – share your own mistakes – and ensure you have created a consistent culture and a work environment where employees feel safe sharing their own mistakes.  One way we did this at The Loyalty Group (now Alliance Data’s LoyaltyOne division) was to incorporate the company’s 10 Operating Principles into to our bi-annual employee feedback survey.  One section of the survey asked employees to rate their manager’s performance re “leading by each of the Operating Principles” over the past six months on a one to 10 scale.   And we put some teeth in our commitment to leading by our Operating Principles by basing 10% of all managers’ annual bonus on their team members’ responses to these questions.  Perhaps more importantly, I am sure we fired more managers for not leading by our Operating Principles than for any other reason.
  2. Continuously analyze the root causes of mistakes and make sure you are investing in training, capabilities, programs and other resources to decrease the probability of repeating them.
  3. Although we all try to not make the same mistake twice and thereby modeling Einstein’s axiom “Doing the same thing over and over again and expecting a different results is the definition of insanity,” mistakes will inevitably happen.  Sometimes more than once.  If this happens, repeat steps 1-5 and keep moving forward.  I’s OK to cut yourself some slack.

Please share your experiences with learning by and leading from your mistakes.

CHU

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

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. 

What business can learn about leadership and collaboration from Little League Baseball

Although you wouldn’t know it from the 50 degree weather we have had the last three days, it is spring in Boston, which means my 9 year old son is playing baseball again.  Helping coach his little league team reminded me of the leadership model we developed at the Loyalty Group that others have found helpful and I thought I would share it with you.

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).  Throughout this period, I thought a lot about both leadership and how to help executives develop the requisite skills to advance as far as they wanted to in their careers, as this was one of my most important roles. Few things give me greater satisfaction than seeing several of the people I hired continue to grow and be successful in their careers. Indeed, many of those I hired and mentored have taken Loyalty to levels of success we didn’t even dream of during my tenure, and we were pretty big dreamers back then.

One of the things I came to understand about leadership and developing executive talent became what we called the “Three I’s of Leadership.”  I realized to build a successful high growth company while delivering on our cultural goal of “creating business success that others consider 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” but who could get things done to move the business forward.  Executives who could actually stop thinking, developing models and drawing matrices and “land the helicopter, get the troops in the field and make things happen.”
  • Inspirational Leadership – Leaders who could get things done through others without making everyone 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 three areas, many highly successful companies are led by “Three I Leadership Teams.”  I first realized this through being involved in YPO (the Young Presidents 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 realized that this often wasn’t the case.  I observed several very successful CEO’s who clearly were not what anyone would consider “motivate the troops inspirational” and others who although incredibly smart “idea machines,” needed someone to figure out what ideas should actually be implemented and then take the idea from the white board (or the back of the napkin) to the business and the bottom line.  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 made 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. 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.

Back to my baseball analogy.  Last year, I thought about this regarding 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.  But knowing how to play baseball is necessary, but insufficient. Someone on the coaching staff needs to know how to teach young kids how 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 a 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 on the field – a swinging strike becomes a “good cut, “bases loaded means “we now have an easy out at every base,” etc.

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.  If you use it, collaborate with us by letting me know how it worked and what you have done to improve the model.