Posts

Actually, the issue is that you have no vision

Single issue focus is just as bad for business as it is for government policy.  It’s vision that counts.

This post springs from the debates surrounding the tax reform legislation currently gestating in the bowels of D.C.

Interviewed on one of the many news programs early this morning was a leader of a home-building special interest group.  With great bluster, this gentleman spoke of how the capping of mortgage interest deductions for mortgages above $500,000 would be detrimental to home values, and because of that it is ultimately a bad idea.

This guy was a single-issue representative–the very personification of a “special” interest lobbyist with a single issue to flog up on Capitol Hill.  The interview was admirable for its pureness; but it was cautionary for a single reason: It lacked any nod toward vision for what the government ought to subsidize through tax policy.  When you are a homebuilder, a lot of what you focus on is the amount of money that can flow to homebuilding.  You care a lot about whether the government decides to stop subsidizing mortgages for homes that only really wealthy people buy because, well, those kind of homes represent a lot of income for you.

What you might NOT focus on is whether the government ought to subsidize luxury housing of any kind.  A reasonable person could ask whether tax policy ought to subsidize jumbo mortgages at all.

The interview didn’t get into the role of government, it only got at the desires of a single-issue interest group; and it brought to mind an important management imperative for almost any of us:

Never, ever, allow an issue of any sort take the place of a vision.

How often do you see managers focused on productivity in a single part of the plant or shop floor, or efficiency of a single department in a company, only to have no concept of–or, indeed to work against–how the overall company delivers value for customers.

You may think you don’t see this, but you do.

You see it every time you sit on hold waiting for a customer service representative whose time was determined to be more valuable than any specific customer’s (if that weren’t the case, then why make the customer wait and the rep not wait? Hmmmm?).  You see it every time you walk around a big box retailer…searching for a person to help you find that item you are looking for.  You see it every time you receive an appointment window of 4 (or 6?) hours for a service call at your house.

These are the outcomes of single issue votes in the business world.  They are the results of a focus on efficiency (or inefficiency) in one place at the expense of the whole or, in the worst of cases, the customer.

A customer-centered vision for service would envision no customers waiting, just as a citizen-centered focus on the tax code might envision no subsidies for luxury homes.   Yet, we have special interests that win in the corporate office at the expense of the customer; and we have special interests mining the tax code in spades.

The next time you entertain that consultant who just wants to help you cut “inefficiency,” make sure you ask how that inefficiency fits within your vision for value delivery.  That consultant’s issue isn’t a vision.

Just make sure that your issue isn’t that you lack vision.

What do you think? 

The elephant in the strategic planning room is often an 800-pound gorilla

A world-beating competitive advantage doesn’t make you smart, it makes you lucky; so don’t try to emulate people who have one.

Perusing my “clutter” folder today, I came across a post on the Harvard Business Review that highlights how “The Best Companies Know How to Balance Strategy and Purpose.”

It’s not a bad read, other than the fact that it introduced me to the jargon-ized notion of “corporate plasticity.”  Seriously, folks, we very well might need another term for the overused and tired notion of “agility” at this point, but…plasticity?  Good grief.

However, I digress.

In developing the thesis that purpose has to be dominant over strategy, the authors–a couple of A.T. Kearney partners and a Senior Advisor–choose a set of companies to serve as exemplars.  The names?

Apple

SpaceX

Nestlé

Unilever

Lego

You notice anything interesting about these companies?  I do.  They are the 800-pound gorillas of the markets they serve.

And there is the rub.  Management thinking that is guided by what the best companies do is fine…to a point. That point is that such thinking has to be careful about what “best” really is. If the company you aspire to be really derives all of its value creation mojo from a competitive advantage that is singular, then you might want to look elsewhere.  Or you might want to at least acknowledge that to be the next Apple, you have to build the brand- and customer experience-driven loyalty that Apple has built over the past couple of decades, rather than trying to “innovate like Apple” as so many misguided management teams have tried.

Once you recognize that the companies you compare your own company to have competitive advantages that you simply don’t have, you will have identified a really big elephant in the strategic planning room.  Then, you can get busy building your own competitive advantage vs. trying to be someone you are not.

What do you think?

How to keep culture from crushing progress

Big ideas aren’t enough to change things. You need powerful sponsorship.

This anecdote has played out more times than reruns of the original “Star Trek” series, so bear with me as I set it up.

The situation

Geoff Wilson

A highly motivated, energetic, experienced new hire is brought into the organization as an agent of change by the business unit’s president. The new hire is brought in because she thinks differently and has rich and relevant experience in organizations that look the way her new organization’s president and leadership team say they want the business unit to look over the long term. She is the poster child for effective organizational change leadership in appearance, word, and deed.

The new hire does what all highly motivated, experienced hires do: She gets to work. Carrying the president’s imprimatur by virtue of being hired, she starts propagating new ways of doing things—perhaps on processes like project management or in performance areas such as pricing or cost efficiency. She’s driven. She’s smart. She’s organized. She’s logical. She’s practical. She is, quite possibly, right.

The president of the company, sensing the strong glow of a great hire, lets her “do her thing” without guiding or intervening. After all, that’s what great leaders do: They let great people go “do their thing.” Right?

The organization’s leaders quickly sense a world of pain coming from changes to the ways things have always been done. The changes aren’t necessarily bad—just different.

Fast forward to a year later. Our motivated change agent is watching the clock. She’s waiting for 5:48 p.m. every day (that’s just late enough to not signal that she’s thrown in the towel). Her great ideas sit on white boards and in documents across the organization. But progress has been slow. She’s figured out that the organization really didn’t want all of her resume—just a few parts. Her job is easy. Her life is hard.

The leadership team, having figured out that she had no power in the first place, decided that the change agent’s recommendations, while smart, were too painful for them to implement. They have marginalized her through passive and deliberate pseudo-compliance and back-channel opting out. When one functional leader delays participation with good reason, the rest simply follow suit.

The president has entertained every grievance. By making backroom agreements on who needs to comply and who doesn’t, he has undermined the change agent—unintentionally, but still.

The organization likes her. But, hey, “Those great ideas could never work here.” And besides, the president sure didn’t seem to mind that key leaders opted out.

The president wonders why there hasn’t been more traction on his new hire’s ideas, but in reality, he just likes the fact that the business unit is performing well this year and that everyone will achieve nice bonuses.

The change agent polishes up her resume.

When our once-motivated, now-crushed change agent leaves for greener pastures, the organization gives itself a self-righteous pat on the back. See, they were right all along.

The change agent and the president (if he is a person of vision and integrity) wonder what happened.

Here’s what happened

First, the president quickly moved from a position of obvious sponsorship (he hired the change agent, after all) to a role of spectatorship. He removed the most important tool in his change agent’s toolkit: the lever of executive sponsorship.

Second, the change agent—armed with the confidence that her ideas would work and work well—fell into the trap of idealistic pursuit vs. practical and pragmatic progress.

Both have ignored the practical realities of power—call it influence, pull, or realpolitikThey misjudged the power of an organization’s culture to reject even the best ideas in favor of the status quo. They let the organization and its culture crush a valuable addition to its midst.

Don’t kid yourself: Culture is heavy. The weight of any organization’s culture will crush any change agent.

So what?

There’s no such thing as a “fire and forget” change agent. The agent—whether in the form of an initiative team or a seemingly heroic individual like our anecdotal new hire above—must have real power.

In any change program or worthwhile process, there comes a point in the organization’s journey where the broad population realizes that change is hard. They have an “Oh, shit” moment. At that moment, there must be enough momentum and felt need (or other sources of power) to move the change forward. Otherwise, change won’t happen.

In turnarounds, the momentum and felt need is easy. Either we perform or we’re gone. The change agent can drive change with that implication alone.

In improvement situations, the reality is far more nuanced. Going from good to better is hard. Really. How often do you see people who are in great shape make a New Year’s resolution to get in better shape? Not often. They make choices that diversify their focus vs. intensifying it. They want to spend more time with their kids, take up art, or shoot for that promotion at work. Their health is secondary because, well, they already have health.

That’s the problem with change in organizations performing “OK” or, especially, performing great but in an unhealthy manner (a diversified business with a few bright spots that carry the portfolio comes to mind). The organization—convinced it’s “doing alright”—sees the change as an annoyance. This is especially true in the absence of a transparent agenda. And that’s where power comes in.

Executive sponsors and change agents have to agree on the source of power that will ensure the change. And they must follow through on it!

The agenda must be explicit and have teeth. The change agent has to be able to walk into any room with the full blessing of power, and with a ready set of implications for non-participants and opt-outs. But the change agent should never have to articulate them!

For the other leaders in the organization, opting out must be a visible, deliberate action that is advertised to the highest levels of sponsorship. Opting out has to have consequences. Or else, why bother?

Practical points

Cognitive dissonance being what it is, human beings aren’t wired to admit that they individually are the problem. Chances are, you read the anecdote at the beginning of this article with a real notion of who the victim was, and the victim probably looked a lot like you. The reality is that all parties in the anecdote hold responsibility. So, here are some things to do about it:

  • Sponsoring executives have to stay engaged and deliver their positional and personal influence through their change agents. Tell the organization that the agent has power and why. Never, ever leave that communication to the change agent. Define—honestly—the agenda the agent is working to implement. And, for goodness’ sake, don’t undermine the change agent by entertaining back-channel grievances and allowing one-off deviations from the plan without explicit, advertised, and good reasons. Sponsor the right behaviors through influence or force.
  • Change agents need to clarify the source of their power. Can they state in a short sentence what would keep the organization from opting out? Are the power dynamics such that the change agent is set up to fail? Remember: Idealism is great, but not sufficient. Just going and doing a good job is not enough if the power structure isn’t in place.
  • Group or organizational leaders have to own and explain their priorities. To be sure, there are myriad good reasons—ranging from timing to talent—for opting out of change initiatives. Handled transparently, these reasons can be managed well. If handled passively or through backroom deals, however, opting out sends a signal to the rest of the organization (that doesn’t have such good reasons for it) that opting out will be tolerated and accepted. So, why bother?

If you deploy change agents, be sure to back them with enough power to make them effective. Practice sponsorship, not spectatorship. Define your agenda. Lead. Clear the way.

If you’re a change agent, be sure you have enough power through sponsorship to achieve what the organization expects you to achieve. If you don’t have it, get it. Can’t get it? Move on.

What do you think?

May the Force be with your business strategy

How do you create change? Move. How do you overcome inferior mass? Move faster.

Geoff Wilson

Strategy is a combination of direction and applied force. It’s the force of assets deployed, talent assigned, new products launched, or new initiatives driven. In short, strategy is applying what you have to achieve what you want.

But wait a minute. What if what you have isn’t enough? What if your assets, talent, products, and other “things” are inferior? What if you just think they might be inferior? Well, I have news for you.

The laws of physics teach us about force. Newton’s second law states that force—the “thing” that creates change in the motion of an object—is derived via mass and acceleration. That is to say, if you want to create a change in something, you have to use a mass and move it at some rate over time.

So what does that mean for a business strategy? It means two things:

1. If you have a mass of assets to apply, you need to move them in order to create change.

You can’t just sit on your laurels and expect change to happen. This is a key issue when it comes to critical strategic moments in a company’s life. Need to change the basis of competition in your market? Better get moving, redeploy assets in a new configuration, and do something rather than do nothing. (And no, I’m not imploring you to just “do something.” Think first.)

When we look at well-worn examples of companies that shape and reshape industry segments, we see constant motion. Walmart stores look nothing like they did 25 years ago. Walmart has led all these years not by sitting still, but by shaping and reshaping a set of retail concepts around a juggernaut of a supply chain. They created force by maintaining a massive base of assets in a constant state of acceleration.

2. If your mass of assets is inferior, you have to move faster than the competition.

That’s right, you can overcome inferior mass with superior acceleration of the mass. What this means in business is that you can, in fact, outwork the other person. You can move faster than the competition.

Some might say this is exactly what Samsung is currently doing to Apple. Samsung has settled into a device product-launch velocity that is a multiple of Apple’s. While Samsung may not have Apple’s brand and market weight, the velocity of what it does have is applying real force to change the market.

So, if a strategic direction is known, here’s the question that should come to mind next for the management strategist: How are you applying force? Are you relying on massive assets moved at a steady pace, or are you counting on a rifle shot—a bullet fired at high velocity—to achieve change?

How do you create change? Move. How do you overcome inferior mass? Move faster.

Don’t just take it from me. Take it from one of the most brilliant military strategists in history:

The strength of an army, like the momentum in mechanics, is estimated by the weight multiplied by the velocity. A rapid march exerts a beneficial moral influence on the army and increases its means of victory. – Napoleon Bonaparte

What do you think? Is the force with your strategy?

Don’t be friends with the monster

Honoring functional leadership above all else creates monsters in today’s over-scienced organizations.

“I’m friends with the monster that’s under my bed”

— Rihanna on “The Monster” by Eminem

Geoff Wilson

Let’s say you’re a leader of a corporate function. Pick one, it doesn’t matter. You may lead supply chain, procurement, human resources, information technology, corporate development, strategy, finance, accounting, or any other.

If I told you, right now, to find me a treasure trove of best practices for your function, you could do so in an instant. Starting with the old standby, Harvard Business Review, you could extend and expand your Google hunt to a dizzying plethora of functional associations, business school publications, case studies, consulting publications, and puff pieces that would provide you with more best practices than you could ever digest. Ever.

And that’s the kicker. Functional leaders now have access to more best practices than ever before, and that abundance has the potential to create a monster. How? In our pursuit of functional excellence within organizations, it’s easy to lose collective sight of business excellence. That’s right. Compliance with functional mandates can have monstrous consequences for business performance and productivity.

Consider an organization with a well-meaning leadership team that empowers several functions to demand compliance from line leaders on their own functional initiatives—all at once. To functional leaders, this is nirvana. They get to install “world-class HR approaches,” or “sector-leading procurement approaches,” or “outstanding business planning,” or “structured strategic planning.” But to the line leader, such initiatives manifest themselves as barbarians at the gate. They are monstrous.

Why? Consider the line leader who suddenly has to spend hours in meetings with functional teams. For some leaders, a specific functional team will hit the spot. The meeting or new approach will be extremely valuable. For others—say, a leader without real talent gaps, who is forced to sit through days of talent reviews and plans—they’re a waste of time. But they’re mandatory. They are “the way we do things now.” And they are, quite often, entirely wrong.

They sap productive selling and organizational-development time from line leaders who usually know they are wasting time. In the worst cases (“Hey, Bob, just fill out these talent templates and we’ll see you next Tuesday.”) they simultaneously kill morale and productivity while adding no value.

How do you avoid creating a functional monster in your organization?

The answer is hard because all the management scientists and consultants peddling best practices will find holes throughout an organization that adheres to it. But it’s simple: Have the guts to empower line managers, provide them with great tools, and get out of their way.

Let there be a rational discussion and rule set for allowing business leaders to spend time with customers vs. internal functional teams. Set the menu of initiatives and manage opting out closely, but allow it. Allow the gal whose business team has no credit-and-collections issues to skip the “best-practice contracting” seminar. Allow the guy whose team has high productivity and zero turnover to avoid the talent and recruiting review.

It’s OK. Really. And I say this as someone who has perpetrated plenty of broad-based, high-value corporate initiatives. Outside of obvious risk and legal areas, “compliance” to one-size-fits-all approaches to functional “excellence” results in a distribution of gains from that excellence that very clearly hurts some players who comply.

This isn’t to say that no functional initiative is applicable to all, but rather that you should know whether or not it is.

Don’t be friends with the monster. Don’t allow honor and appreciation for good functional practices to kill productivity and morale in your line organization. Know when to let your business leaders opt out of frightful functional initiatives.

What do you think? 

Welcome to the real, messy world

Like the real world, real business isn’t as simple as you’d like it to be.

Geoff Wilson

I’ll confess, I’m a bit of a strategy junkie. You don’t have to be one to do what I do, but it helps. However, if you read my writing much, I hope you come away with a sense of the practical bent that I bring to the topic. The real world is the real world. Just as any engineer will tell you that lab scale processes rarely translate directly to production facilities, financial and strategic models rarely reflect reality—at all.

The below image was shown at a recent annual meeting of a private equity firm we have the privilege to serve. It shows indexed revenue and EBITDA performance over the life of a fund’s portfolio. Each line is a portfolio company. Lines that trend upward are green. Downward lines are red.

Keep in mind, this is a top-performing private equity fund. Returns for this portfolio were excellent. What do you see? The real world.

Each of those lines depicts the outcome of an actual business. It’s the result of some management team’s hopes and dreams. Those businesses were probably planned using relatively linear models and margins. But what you get is actual sausage making. And I’ll say it again: This is a top-performing portfolio.

The real world is sausage making. Real business comes with randomness, particularly in companies that are working to make things happen.

If you consider it failure that some parts of your portfolio might not stay in lockstep with your linear growth expectations, you probably don’t understand the nature of risk taking and enterprise building. You might be more comfortable investing in CDs.

The real world is messy. This is good to keep in mind when you’re futzing with a financial model that implies a precision that your business outcomes will never achieve.

What do you think?

(In)Attention to Details

Are we losing the ability to mind the details?  I don’t think so, but maybe!

 

Chalk this one up to amusement, but I ran across an article today that explains how the state of Oklahoma recently adopted “loser pays” for attorney fees in all civil suits.

That’s a big deal.  A really big deal.

But it was “unintentional.”

Yes, no kidding.  A bill was voted on, passed, and signed into law by a state legislative body and executive. And, its effects were unintentionally broad.  Here’s an article on this doozy.  The key quote:

The amendment, written by state Sen. Anthony Sykes, R-Moore, was intended to apply only to civil cases involving child sex-abuse.

But the amendment had a broader impact, according to the Senate author of the bill, state Sen. David Holt, R-Oklahoma City. “Upon a closer reading of the amendment, it seems evident that it makes all civil cases … loser pays,” Holt told the World. “But nobody caught that.”

But nobody caught that…

We are talking about a massive change in liability for legal fees.  And the response is, essentially, “oops.”

Well, luckily the Oklahoma legislature can change it.

But it raises the question: Are we suffering from a societal migration away from what one of my favorite coaches used to call “attention to detail?”

When a legislature can pass a bill through multiple steps and have such a big miss, imagine what details are being missed in your company or in daily life.  You need look no more than your web browser to see the effect of lowering standards for attention to detail.  Today’s news media are a caricature of the phenomenon, where we are constantly barraged with half truths and partial lies, no matter where you stand on the political spectrum.

In most pursuits, details matter.  In critical ones, they matter a lot.  When you are acquiring a company or putting together the biggest sale of your life, it’s rarely ok to say “let’s let the lawyers handle that.”   In Oklahoma’s case, the law can be changed.  That’s not so when you forget to vet the representations and warranties in your purchase agreement!

Nirvana on attention to detail is challenging.  I’ve known many people consumed by the details.  The trick, I find, is to combine the accountant’s eye for detail with the artist’s eye for completeness.  You have to get the details right, but also be able to notice what’s missing.  You have to see the forest and the trees, as it were.

The best strategists that I know are able to master this art.

Can you?

 

 

 

Finding Value in Your Vision

Your vision for your career and your company should start with an articulation of the value you provide.

 

Does your vision articulate value?  It ought to.

Often, in the middle of coaching discussion with young professionals, I asked a basic question:

“What do you want to accomplish?”

The responses I receive to that question are often telling.  In some cases, I get interesting, highly functional visions of the next step in a career:

“I want to become a trusted finance leader.”

“I want to become the best project leader in the company.”

“I want to be an expert on M&A processes.”

These are visions that imply a strong value orientation.  They imply delivery of value on the way to accomplishing the vision. One cannot become a trusted finance leader without developing the skills necessary to, in fact, be a trusted finance leader.

Sometimes, though, the answer is more problematic:

“I want to get promoted.”

“I want to run a business.”

“I want to be a senior executive.”

These are visions that imply a strong status orientation.  They create ends that are status driven. One can “get promoted” under the wrong circumstances.  One can “be a senior executive” without developing the skills and capabilities necessary for the task.

Having witnessed multiple highly corrosive senior executives who were placed via the machinations of their own ambitions rather than the value they provide, I can tell you that fulfilling someone’s vision of position and status is exceptionally dangerous if that vision is not accompanied by a vision for value.

And that’s the point of this post:  Vision devoid of value is rubbish.

But, though I’ve articulated the examples above in terms of individuals’ visions for their careers, individuals aren’t even the worst offenders.  I know plenty of individuals who are great professionals but who can only articulate vision for their career as “promotion” or “a raise.”

They will be okay (if a little shortsighted).

Where the vision-devoid-of-value issue often comes up–and causes the most damage–is actually in business strategy.  We see status goals articulated as vision all the time.

“We will double the size of our company.”

“We will be number one in our market.”

“We will be a great place to work.”

These are all corporate level equivalents of “I want to be a senior executive.” They are status oriented visions.  They pass for leadership art in companies the world over.

And, they are entirely insufficient.

Shoot for specificity in the value you will provide.  Articulate a vision for that value…and then, go!

Can you articulate a value oriented vision for your career?  What about for your organization?

At WGP, our own vision statement could use some of the scrutiny I’ve suggested here.  We say our vision is to be the premier strategic advisory firm in the region.  What we really mean is to be the premier strategic advisory firm in the region because of the quality of our insights, advice, and people.  

There’s a difference.

What do you think?  How do you articulate a value-driven vision?

 

The Asymmetry of Action

Seeking massive upside can lead you to inaction.  Watch out for “asymmetry driven inaction” in your strategic plans.

 

Sometimes you have to kiss a few frogs to find a prince.

 

In the lexicon of strategy and strategic plans, the word asymmetry is a useful one. But, it’s a dangerous one.

There is information asymmetry in negotiations.

There is asymmetry of outcomes for a strategic decision.

There is asymmetry of allocations: talent, resources, mindsets, and any other “resource” that can be allocated.

Asymmetry is everywhere. It’s the real world. We can engineer symmetry through repetition and reduction of variability, but reality is filled with imbalance, particularly in the land of business strategy.

Business strategists rarely have the luxury of making the same decision over, and over, and over, and over again. They usually have a few big decisions to make, and they have to guard them very closely.  Why?  Because the world is finite.  There are only so many customers you can piss off when trying to get your sales approach right.  There are only so many acquisitions targets you can approach with the wrong pitch before you run out of them.

True strategists face a series of one-shot games. They can learn from their shots, but each game is different. Each deal has a different flavor. In fact, if you sit in a position where you face only a continuous series of outcomes vs. a discontinuous one, you are probably not a strategist. You are a portfolio or risk manager. Those are not the same thing.  A true strategist has to account for everything before taking one shot.

And, this accounting is where the real danger of taking popular and business press too literally comes into play.

The popular press likes anecdotes, and can lead you to try to mimic anecdotes that simply don’t fit your model. And, in search of an easy “positive asymmetry,” you read an anecdote about how company X has created massive value via acquisitions.  You then go to mimic the actions of company X without understanding the strategic context or capability sets company X had to its advantage.

The academic press isn’t much better.  You read an academic study about how, on average, business transformation efforts fail.  This leads you to pooh-pooh the notion of driving big change in your organization.  “There’s too much downside.”  And, yet, the academics have only generalized from a broad set of companies without outlining the real strategic and organizational contexts at play.

So, the popular press can lead you to seek only those moments that “look” like the founding of Facebook; and the academic press can convince you that management initiative has too much downside.  You bog yourself down in “inaction” by taking both anecdotes and statistics too literally.

So what?

We all want more upside than downside. We all want massive “positive asymmetry.” It’s a natural desire. It’s analytically comfortable.  We all want certainty.  But what happens when our search for massive upside leads us to sit out the game? What happens when we choose to do nothing as a rule vs. as a strategy?

We waste time and resources. That’s what.

I once knew a senior business leader who was given a beautiful portfolio of opportunities and the sponsorship to do whatever he wanted. The problem? The guy couldn’t get out of the spreadsheet.  He couldn’t place moderate size bets that might pay off because he kept looking for bets that would only pay off.

He, therefore, did nothing. He destroyed value by stripping away valuable assets and capabilities to meet earnings targets, but never really got off the dime when it came to making possible bets.

He squandered a beautiful opportunity to grow and inspire.

Doing nothing–whether it be with your career, your business unit, or your corporation’s resources–has a cost. It has downside.

And, an easy way to do nothing is to only look for sure things–massive “positive asymmetry” in the bets you place.  In my experience, massive positive asymmetry only exists ex post.  It exists before hand only in some popular press anecdote.  The strategist who achieved it usually knows there was a struggle to get there.

They know what frog lips taste like. Go, kiss a few frogs.

What do you think? 

How To Win The Bad Times

Winning in bad times starts during the good times.

 

It doesn’t take a much of a pessimist to suspect that the U.S. economy might be in for a reset if not for a recession in upcoming months.

I know, I know: Rates are low, the stock market is bubbly, the yield curve is normal, unemployment is at 4.6 percent, and the newspaper of record is saying that the current U.S. president is “handing a strong economy to his successor.”

In fact, things are quiet.

Too quiet.

We’ve survived for a long time on monetary stimulus pumping currency into the system, cheap debt underwriting everything from sports cars to sociology degrees, and a hefty entitlements-driven safety valve removing the discouraged unemployed from the workforce.

So, which is it?  Are we in the best of times, or the worst of times?

What do you think?

Regardless of my views on the macroeconomy (which are neither as good or as bad as I imply above…more on that some other time), I’m what you might call a micro-optimist.  That is to say that while Dickens may have described entire country economies in his tale of two cities, I actually subscribe to the notion that prosperity is exceptionally local…personal, even.

So, whether or not we as a populace face bad times, I’m a believer that you as an individual or as a business leader need not assume you are at the whim of the macroeconomy.  The best business leaders I have known are not victims of circumstance. They have through-cycle mentalities to prepare for great during bad, and to prepare for bad during great.  If bad times are looming, how do you win the bad times?

Then, if things are great, how do you have the mindset to ensure you will win during the bad times? Let me list 5 ways:

1. Ensure you win on the sales front. A rising tide lifts all boats, but it also masks a lot of foundering skiffs. If your sales efforts are doing less well in good times than they ought to be, then you have plenty to fix today. Is your sales force hitting its numbers on its talent, or on pure market beta and order taking?  If it’s the latter, then you’d better watch out when the order window line dwindles.  Go figure out how to generate and close leads in the good times.  It won’t hurt.

2. Put on your “tough times” service hat.  Yeah, I know…you are busy.  Times are good.  You may think it’s okay to ignore a few of those calls from customers or employees or potential partners because, well, you are making your numbers.  Let me tell you something:  People remember. If you want to claim that you are a high-touch servant leader, but you decide you have enough business now and don’t need to call people back after 5pm, then saddle up for a drought when the dry spell hits.  It won’t hurt you to call people back and let them know you are too busy at the moment to help.  Seriously.

3. Overinvest today in strategic marketing–to see the cracks. Without a doubt, the biggest recession excuse is “we didn’t see it coming.”  I’m not a fan of planning for recessions (or even predicting them) but am a big fan of understanding customer and end market sentiment through a hefty investment in listening. If the good times are upon you, your customers are happy, and your order book is full; it can be challenging to go ask customers or downstream buyers what they think.  It can be even more challenging to invest dollars to do so.  It won’t hurt to know whether ripples are coming.  Besides, your head in the sand–even when the sand feels good–is ignorance.

4. Take a minute out of your day to run a few scenarios. It’s an interesting facet of good times that they can cause us to stop thinking.  Still, plenty of leaders know which customers are already high risk, which facilities are already at the margin of the cost curve, and which products really aren’t cutting it.  What happens if you lose one or all?  Do you know?  What is plan b?  It won’t hurt to have a plan b.

5. Look at the market for talent.  Oooh, this one can feel scary. You as a leader should have a look at who is hiring (maybe even for you), and what kind of talent is bouncing around on the market. Have a few conversations with recruiters about where the activity is and where the softness is.  Know what kind of talent is currently in demand, and where there’s a glut. This can be both personally relevant to you (you may thank me one day, mr. or ms. executive), and professionally relevant to the quality of the team you build. Just because you aren’t hiring doesn’t mean you ignore the market for talent.  It won’t hurt.

There you have it.  5 ways to, perhaps, prepare for drought when the rain is falling.  In order to be great in bad times, you have to be great in the good times. It won’t hurt.

Go get’em.

Now, what do you think?