New possibilities for thinking and acting exist only after they are spoken by someone–us to ourselves, us to another or another to us. I observe that many people in my network of professional help–those I'm committed to helping and those I request help from–demonstrate weakness in accepting the help available to them. When I see someone decline to act with thinking and advice that doesn't fit their own intuition, I hear "the deafening sound of closing possibilities".

Each of us must be responsible for prudent investment of our finite time, energy, money and spaces of possibilities. We can't blindly trust another when the potential negative consequences to us are large. The greater the potential negative consequences, the more well-grounded our trust must be–our assessment of the competence, sincerity and reliability of the other(s). The phenomenon I'm highlighting is weakness in making well-grounded assessments of knowledge and capabilities–ours and others. Frequently I see automatic reactions, which can only come from intuition or feeling. Notice that anything outside our embodied sets of distinctions and methodologies will not feel right. What feels right to us is what we're familiar with, what we've done in the past. Doing what we've done in the past is only useful if we're getting the results we're committed to.

A Personal Story

When I first found myself in business, I became aware of how little I knew. Interestingly, after 38 years of continuous learning in business, I'm still awed by how much I don't know. Having seen that I needed help, I began seeking a mentor. I was extremely fortunate to establish a relationship with my first mentor, Randy. Randy was running his 2nd company and was a very capable businessman. I would visit him regularly, accompany him on local travels and we spoke by phone almost daily. I remember one day asking why he spent the time with me that he did. I couldn't see how he could possibly get a return. His response–"Others helped me, and you will help others. That's the way the world works".  I can now see that my holding the ethic to reciprocate as best I could, and making offers when I saw an opportunity, contributed to the relationship I had with Randy.

I am fortunate in that I'm afraid of failing to achieve my personal ambitions. I am deeply aware that alone I'm insufficient to accomplish what I intend. Early in my career I developed a strategy of seeking to build relationships with accomplished actors to whom I could offer some help and who could help me. Often I assess my help is less valuable than the help I'm receiving, yet I always do my best to think about the other's concerns and situations, offering help valuable to them where I can. Often the best help I can offer is an introduction to another powerful person from my network.

My strategy includes doing my best to act with the recommendations and requests of the powerful people in my network. I have pushed through my psychological discomfort to be able to dialogue until I think I understand enough to take some action. I act as best I can, coming back to dialogue with the recommender to improve and learn as the situation progresses. Of course I'm not always successful, but I do see this approach has brought great benefit in the velocity and magnitude of the learning I have accomplished so far in my life.

The purpose of life is not to be happy. It is to be useful, to be honorable, to be compassionate, to have it make some difference that you have lived and lived well. Ralph Waldo Emerson

Act Prudently and Powerfully

We cannot accept all advice, and we increase our likelihood of success when we can act with as much good advice as possible. Much of what sounds like advice is merely opinion, offered without a commitment to results or by a speaker with insufficient competence as demonstrated by accomplishment. A checklist:

• Be aware when you are open to an offer of help or are requesting help; don't waste your time or that of your network's with uncommitted conversations.
• Make assessments of the knowledge of individuals in your network. What are their accomplishments? What true expertise do the accomplishments provide evidence for?
• Take time to think rigorously about what authority you will grant to whom. Know ahead of conversations what domains you will listen with authority to each of your network.
• Avoid "poll taking"–asking everyone what you should do about some situation or concern. Another version of this is getting advice from someone competent, finding you're not "comfortable" acting, and getting many other opinions on the advice. This is a situation to remember that only accomplishment is evidence of expertise.
• Learn to be an observer of your reactions to advice that doesn't fit your common sense. The best advice won't be what you think because you don't know what you don't know, which is why accomplished others are so valuable and essential for fulfilling top 1% personal ambitions and business missions.
• Move with velocity. Begin acting as you can, incurring costs you can afford, to bring new possibilities into existence. The dominant strategy for competing successfully is to move first and keep moving.
• Continue dialogue with the source(s) of the advice, sharing with them what you notice and observe, and your interpretations. Hold your interpretations as tentative in domains where you are a novice. When you act trusting the advice of someone committed to you, you produce their obligation to continue helping.
• Act responsibly–ultimately each of us is personally responsible for our lives.

When you receive advice or requests from someone you can trust, for both their commitment to you winning and their competence in the domain, and you do not act well, you produce costs for the advisor. You close possibilities, both the possibilities you could produce with acting on the advice and, perhaps more importantly, the willingness of the advisor to help in the future. I've found that the more competent and powerful an individual is, the more attentive they are to costs and producing returns on their costs.

Start noticing how others around you move with trustworthy, competent advice. It's very American to do things our way. Pay attention and notice where you hear the deafening sound of closing possibilities.

He has a right to criticize, who has a heart to help. Abraham Lincoln

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Making Major Decisions with Mindfulness

Photo credit: Flickr user krekeg2

However, I notice that many CEO/principal owners of private companies I encounter do not design and work with a powerful board. I speculate this is partly due to the fact that founding and running a private company requires a high degree of confidence (well-grounded or not)  in one's own sense of what works and what does not work successfully in the marketplace. Without having experienced the power of an effective board, one is naturally blind to the space of possibilities such an organizational element offers.

I was fortunate in my own development as an entrepreneur and CEO that my first mentor showed me the power of a capable board and led me to begin learning and acting with such boards in my companies. Throughout my career I've continued my learning on board formation and utilization, I have used my boards as a competitive advantage. This is no easy task. Individuals who can be powerful board members are capable, knowledgeable, strong and difficult to recruit as well as satisfy. If you adopt the strategy of a strong board as a source of power and competitive advantage, you will have to put aside your ego and commit to learning to constitute and utilize this asset. 

I am absolutely opposed to weak boards–advisors or directors. I say a weak board is far worse than no board at all. Unless you are sufficiently compelled by this topic to take on the commitment of forming and utilizing a capable board, I recommend refraining from action.

What is a Board?

I am focused on the pragmatic function of a board. Fulfilling the strategic purposes of a board doesn't require the members be legal directors–advisory directors without legal responsibility or right to appoint and/or fire the CEO can still hold the role of the board member I'm specifying.

The critical contribution of the board occurs in individual conversations between the CEO and a member, in the dialogue in meetings of the entire board and in the project or strategy-specific conversations board members will have with executives, managers and their own networks of help on behalf of the company's strategies and intentions.

The legal board of directors consists of the directors elected by the shareholders to represent their interests in selecting and monitoring management. This board appoints the CEO, who then appoints the other officers, constitutes strategy and is responsible for execution. Each legal director has a duty to all shareholders to act in their role on behalf all shareholders. In a private company where one or a very small number of owners are also the management, they normally hold this legal role.

The criteria for an effective board is producing competitive growth of enterprise value. We specify competitive growth as the rate and level of increase in enterprise value that exceeds that of those we compete with. In business we are always in competition–a situation where two or more competitors are working to "win", and where there will be only one winner.

What are the Strategic Purposes for the Board?

I offer 4 key strategic purposes for a board in private, closely-held companies (there are additional ones in companies with many shareholders):

1) Be a committed listener for the promises/commitments of the CEO. The CEO is the committed listener or senior customer for the commitments of the other executives and managers of the firm. A strong customer is required for all key commitments to produce the rigor, velocity and focus required for thinking and action that is effective, strategic and competitive. The CEO also benefits from having a strong customer for his commitments–a conversational structure that holds them accountable and responsible for delivering on promises. Although the board can't fire the CEO who's also the principal owner, they can withdraw their help. Without the effective, strategic and competitive help success is highly unlikely. Without such help the CEO/principal owner has a very small probability of fulfilling their ultimate ambition and strategic objectives. If you're going to have a board, I strongly recommend one that provides the kind of help you must have for accomplishing your personal ambitions and business mission. 

2) Close the knowledge gaps present for the CEO and the organization that are essential or highly valuable in reducing risks and increasing the likelihood of success. Human capital, one of the 5 fundamental forms of capital we constitute and design in our work, is the knowledge or ability to make and fulfill commitments required to perform effectively, strategically and competitively–to win. We claim that all gaps in performance are knowledge gaps. When constituting a strong board we seek to close our knowledge gaps–both the visionary and the pragmatic, required to accomplish our ultimate ambitions, strategic objectives and tactical focuses. Knowledge is the capacity for effective thinking and action. Every individual has the knowledge they have in their bodies and in their networks. To attract people with the strategic knowledge necessary to accomplish our purposes requires we are able to offer them sufficient power for their ambitions. In the US we live in a culture that takes help for granted. This posture will fail it secure help with real knowledge.

3) Collaborate with and help the CEO constitute the enterprise. Constitution is the first of 22 permanent domains of concern for business and of the six domains of the spine or core concerns to design the enterprise to fulfill our personal ambitions and business mission. When we constitute we establish, or declare into existence:

• the core offer of the enterprise
• the capital structures
• the fundamental and specific business strategies
• the organizational structure

4) Bring powerful networks of help–experts with a demonstrated history of accomplishments in such core domains as sales, recruiting, tactical support (finance, legal, etc.), fund-raising, developing new offers (goods and services), and others. Although our culture has the mythology of the capable lone ranger, long-term business success is always the result of having the most powerful configuration. Steve Jobs gets the credit for producing Apple as the most valuable company in the world. Jobs did this by recruiting and leading an organization and board of highly-capable executives, managers and individual contributors.

Moving to Action

In all strategic action there are a limited set of purposes:

• Fulfill existing strategies
• Improve existing strategies
• Make new, more effective and competitive strategies possible
• Acquire new capabilities for thinking and acting

As you reflect on the claims and distinctions of this writing, what will you DO? Reading and finding this interesting (or not) without action is entertainment. If you choose to move to action, I recommend:

• Assess your present situation: 
  • Are you fulfilling your personal ambitions and business mission? (Answering this question requires you have a clear articulation of your ultimate ambition and know what winning is.)
  • Do you have a sufficient and satisfactory configuration for competing successfully?
• If you're not satisfied:
  • What help would be of significant value to you? What are your organization's knowledge gaps?
  • What power can you offer to gain this help? (Warning–the privilege of helping you is not sufficient enticement for the level of help you require.)
  • Constitute a project to build a powerful board

No one can whistle a symphony. It takes a whole orchestra to play it. Halford E. Luccock

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For me, this conference was timely for the evolution of new strategies I've been working on for the past few months. I help CEOs/principal owners constitute, build and monetize private enterprises with targeted outcomes normally in the $10 million to $100 million range. One strategy for 2013-14 is to locate a satisfactory private company in which to acquire a controlling interest. We welcome introductions to companies with operating earnings of approximately $1 million that are either within the Boise, Idaho metro area or could be moved to this geography. 

One of my new actions (resultant from the conference) is a commitment to shape my commitments to be more coherent with my intentions and strategies for the coming period (approximately 3 years). Since relocating our headquarters to the Boise area about 2 years ago, I've intentionally been very open to new relationships and new possibilities, building my local network and learning the local economy to see where we can invest most successfully. Now that my strategies are clear and I'm completing the planning, it's time to eliminate commitments I have that produce insufficient return. I find myself in this situation periodically–I have commitments, relationships and/or practices that no longer produce sufficient return as a result of shifts in my strategy, my situation, the environment, the market forces, etc.

Assess

Our time is finite, both the time we have for work each day/week/month, and the timeline we have to fulfill our ambition. All of us will age, encounter increasing challenges for competing and ultimately die. There are endless requests and offers that vie for our time and attention. I don't know about you, but I have way more things I would like to do or see I could produce a return from than I have capacity for execution.

Some questions for thinking about where I'm spending/investing my time:

• What relationships and practices are strategically valuable?
  • How do I assess the return on my investment in these relationships and practices? What practice do I have or will I appropriate or invent?
  • Should I increase or decrease my investment in the current relationships and practices? If so, what actions will I take?
  • Do I have sufficient strategic help?
  • How do I know?
  • If not, what actions will I constitute to increase my strategic help?
• What relationships and practices are tactically valuable?
  • Do I have sufficient tactical help? 
  • How do I know?
  • If not, what actions will I constitute to increase my tactical help?
• What am I habitually doing that, on reflection, isn't sufficiently valuable for my ambition? Think about any recurring meetings, get-togethers, etc. that are part of your work.
• Are my practices for taking care of my body and for competitive learning sufficient? Where will I improve these practices?

Design and Act

After reflection and assessment, specify what you will stop, what you will modify and what you will start. Put actions into your calendar and the other existence systems you use for making and managing commitments. Act with your commitments, including noticing where you fail and starting over.

Diligence is the mother of good luck. Benjamin Franklin

One of the actions I'm taking is to modify my practices for writing this blog. Rather than hold a schedule as I have, I will write when I have a concern or issue where writing for a public audience helps clarify my thinking, or when I feel compelled to offer assessments or interpretations. 

Best wishes with your reshaping.

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Quit Successfully

Antidote for So Much To Do, So Little Time

Image Credit: Flickr User/comprock

In addition, global competition continues to accelerate, driven by the ubiquitous access to and use of computers and technology. More and more products and services that formerly had to compete only locally now face global competition. Think about the practice of law. In the past we would see our local law firm for whatever legal help we needed. Today many lower-risk legal documents can be satisfactorily completed with do-it-yourself templates or using lower cost legal help via the internet, e.g. the Series Seed documents for initial funding of startups created by my friend Ted Wang. 

How do we counter the shrinking spaces of possibilities for what has worked in the past? I offer some areas for reflection and thinking to formulate objectives or projects to commit to in 2013.

Know your Numbers

What are the facts? Again and again and again — what are the facts? Shun wishful thinking, ignore divine revelation, forget what "the stars foretell," avoid opinion, care not what the neighbors think, never mind the unguessable "verdict of history" — what are the facts, and to how many decimal places? You always pilot into an unknown future; facts are your single clue. Get the facts! Robert Heinlein

Have practices to gather and work with the relevant assertions for you enterprise and your market. Facts (assertions) are the only effective basis for forming judgments and for producing action plans (strategies). I encourage CEOs to have determine what numbers are needed to plan and operate the business. These can include:

• Your ultimate financial ambition, and the amount you need to increase your capital each year to achieve this ambition
• Your market size, it's rate of growth; your market share and your rate of growth
• Your competitors–primary, secondary and tertiary
• The set of assertions weekly, monthly, quarterly and annually to assess how your business is operating vs plan, and to reveal areas for new thinking and action

Refine your Competitive Learning Practices

Business is a highly competitive human activity. Competition exists whenever 2 or more parties are working to accomplish an outcome that matters and only one or a few can succeed. The only way to maintain and improve our capacities to be effective, strategic and competitive is to learn and practice distinctions for thinking and acting continuously. This requires we have others around us with whom to practice and learn. 

• List your practices for competitive learning
• Make assessments of what's working satisfactorily, what's not working and is to be modified or discarded, and what's missing
• Dialogue about your thinking with one or more members of your discursive network
• Commit to a refreshed set of practices for the year, including periodic (perhaps quarterly) review

An organization's ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage. Jack Welch

Review and Refresh your Core Offer and Specific Offers

To compete successfully requires us to continuously innovate our offers, practices, narratives and strategies. Take the time to do a full assessment of your firm's core offer as well as your current offers. 

• How can you modify or expand the core offer to have increased marginal utility for your customers?
• Deconstruct competitive offers in the marketplace to see how you can improve your offer
• How does each specific offer provide value to customers?
• How does each specific offer enhance the core offer and help fulfill the business' mission?
• What new offers are in design and are these sufficient for your mission and 2013 plan?
• What are the practices for producing and making new offers in your firm and how can they be strengthened?

Grow and Improve your Networks

To accomplish uncommon business results, we must have sufficiently powerful networks. Because of the phenomenon of co-ontogenic structural coupling, part of our human biological facticity, every human being is affected by those we engage with. If our networks are weak, we couple to thinking and practices that are ineffective and uncompetitive. We distinguish 5 types of networks:

• Network of Professional Help: those whom we help and who help us to accomplish our personal ambitions and business mission
• Network of Discursive Support: the institutions and individuals we engage with for the purpose of learning, maintaining and expanding the discourses or linguistic distinctions and practices required to compete successfully
• Network of Transaction: those with whom we produce the transactions required to meet our plans
• Network of Tactical Support: the support we use for producing required interim situations, e.g. certain vendors, staff and outside services
• Network of Love: the family and friends we're committed to caring for

Assess each of your networks, asking what's working, what's not working and what's missing. From this, constitute new action for 2013 to strengthen your networks. We must constantly shape our networks to fit as best we can our personal ambitions and business mission. Being a generally "nice" person, I find that I often drift for too long with people or organizations that are insufficiently powerful to contribute to my ambition. I have to remember that my capacity is finite. A weak network member is high cost and subtracts rather than adds to my capabilities. I may choose to contribute to someone, if I can afford the contribution. That would be a different relationship than their being a member of my networks.

Practice Mindfulness

I have found great value in developing a practice for increasing mindfulness. Surprisingly, I have not only increased my peacefulness and happiness, but also my effectiveness in my work. 

The untrained mind reacts to life's ups and downs like a puppet on a string, leading us to often act unskillfully. But a mind that is trained in mindfulness responds to life with intention and results in skillful behavior. Phillip Moffitt

I post twice monthly on the 1st and 3rd Mondays of each month. My colleague and ally, Jeff Hanhausen, posts on 2nd and 4th Mondays. We both intend for our writing to be of help to CEOs, principal owners and key executives in private companies in developing the discipline and practices for business success. I welcome your questions or comments.

Vision without execution is hallucination. Thomas Edison

Prior Relevant Posts

Who Are You Listening To?

A Year-End Practice to Reflect and Plan

 Image Credit: Flickr User/Amodiovalerio Verde

• What is required
• What is allowed
• What is prohibited

You have to learn the rules of the game. And then you have to play better than anyone else. Albert Einstein

For this post I distinguish and work with 3 categories of rules in business and life:

• Those from Reality's Operations, e.g. the human body allows the great majority of human beings to learn and compete only through our early 60s.
• Laws, Rules or Regulations made by those with political authority, e.g. the rate of taxation on certain income levels or transactions; more fundamentally what types of transactions are consistent with the rules
• Rules we specify, e.g. what we require of others to have and retain our help, how our organization will be governed

Personal honesty and giving up an addiction to denial are two of the seven prerequisites for superior marketplace performance. This means we must learn reality's operations in order to quit the actions inconsistent with the laws of reality, and to increase our competence for performing effectively and powerfully the actions that allow us to succeed. I have written previously about personal practices. For example, I know that our performance is constrained and limited by our biology and by the state of our bodies. Therefore, to perform our best, we must invest a portion of our capacity to maintain and/or increase our fitness, knowledge and capabilities for thinking and acting. We are in denial when we think we can compete effectively without daily and weekly practices for sufficient exercise, effective nutrition, rest and competitive learning.

The rules from political action are complex and constantly changing. For whatever our particular industry and offer, and for our roles as CEOs and business owners, there are many rules to learn about and be aware of the drift. Only when we know these rules can we make new interpretations of how we can best use them to perform and compete. When a competitor is not following the rules, we might make a complaint to the appropriate authorities. Only when we fully understand the rules can we design new actions to change how the results of their application to us. An example here is how we take money from our enterprises. Depending on current tax laws, we may find a more powerful design of the combination of compensation (salary and bonuses), dividends, interest or distributions (taxed as investment earnings in some cases). One way to know tax rules is with a superior CPA in our network.

It will be of little avail to the people that the laws are made by men of their own choice if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood. James Madison

Lastly are the rules we specify. I say this is an underutilized area for many ambitious business professionals. Notice where you have power to declare rules. Sources and locations of this power or authority include:

• Your role: CEOs have the power to declare how the enterprise will be organized and how it will function
• Your offers of help: when you have highly-valuable offers of help, you have the power to specify what's allowed, prohibited and required to access your help, to retain your help and to increase the help you give
• Financial Capital: when you are making investments you have power to specify what is satisfactory in exchange for your capital investment
• Your network: to make the help of your network available to another you have increasing authority the more valuable the help

Leadership and learning are indispensible to one another. John F. Kennedy

An exercise:

• List all of the interactions, engagements or roles you currently have
• Next list what rules you have specified; in what form do they exist? Are they being held?
• What consequences can you produce for those who follow your rules?  For those who decline to follow or ignore your rules?
• Speculate about what's missing, flawed, incomplete or weak in your use of your authority and in specifying rules
• What new thinking and action is produced?
• What new commitments will you make?

We are in a new economic and political environment, as well as a global marketplace of tough and increasing global competition. The possibilities for you and your network to take care of your concerns, and fulfill your ultimate personal and business ambitions, will be produced, maintained and increase by your actions. It is not possible for governments to take care of citizens to a standard most of us would consider satisfactory. Effective thinking, committed action, continued competitive learning and strong networks are the dominant strategies for success in the world in which we find ourselves.

As always, I invite your questions and comments as you work with my guidance. Although I work to produce and function in a strong discursive network, as opposed to a social network, I regularly tweet links to statistics and writings of others I find valuable. To receive these follow me on Twitter.

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Image Credit Flickr User/Otzberg

In this post, I'm primarily considering businesses that anticipate growth correlated with overall US GDP (+/- 5%). If you anticipate your markets will change at significantly differing rates, adjust your thinking and action to fit. I anticipate the overall US economy next year will at best produce slow growth (1% or less), while the possibly of contraction is significant–at least 50%. One key interpretation to make now is the anticipated growth for your markets.

In mid-market private companies, I use two distinctions in thinking about the markets for my business:

• Available Market: those customers with whom I could produce an opportunity for transactions
• Target Market: those customers I am designing to transact with for the planning period

The annual plan is a narrative of commitments, directions, velocities and focuses for the coming year that we produce in order to increase enterprise value. We say there is no stability of enterprise value, meaning there is either increase or decrease. In almost all situations, we must grow the business faster than our markets to increase enterprise value sufficient to achieve our ultimate ambitions to earn, save and invest enough money to survive, be free and live a good life during our working career and in old age. Planning is a fundamental and essential skill for producing enterprise value, as opposed to just getting the results of the drift of the marketplace. 

Our plan must powerfully address all six elements comprising the spine of business concerns:

• Constitution of the fundamental offer and the enterprise
• Capital strategies and structures
• Fundamental and specific strategies
• Sales
• Production
• Profitability

With slow growth or contraction as the background, well-developed sales strategies (action plans) become both essential and highly valuable. Sales strategies include marketing, or producing the space of possibilities for transactions.

To begin formulating a sales plan for the coming year, I use this sequence to prepare:

• Specify the NOI I am committed to producing for income and building enterprise value
• Refresh and commit to the financial structure for the business, specifying (by percentage) sales expenses, new offer development, G&A, gross margin and net revenues. Constituting the business model in this way allows for developing operating budgets once we have a commitment to revenues at committed gross margin.
• If revenues are from different categories of customers, meaning with different gross margins, distinguish these so that we have a commitment for each category of revenue as well as total revenue.

This work provides the commitments for revenues and gross margins, by category, the sales plan must produce. 

Difficulties strengthen the mind, as labor does the body. Seneca

Develop the Sales Plan

If you have a team participating in sales, this is work done including the team. Here's a starting sequence of thinking:

• What revenue will we produce from existing customers? Understand your existing customers'  situations and plans for the coming year. What are their strategies for dealing with current marketplace drifts? 
• What new offers have our competitors introduced this year? What new offers can we anticipate they will make next year? How will we move in anticipation of their actions to preempt negative consequences? Although we must remain aware of competitors and competitive offers, my philosophy is a focus on producing high value for customers, not on battling competitors.
• Specify actions to produce the revenue commitments with existing customers. What new offers, practices, narratives and strategies are required to maintain or increase the marginal utility we provide our customers? What new specific offers will we make? Can we be of help in strengthening their planning?
• What is the gap to be closed with new customers?
• How many new prospects, meeting what specific criteria and standards, must our marketing produce? What is the timing, i.e. how many each week or month of the plan?
• Refresh or design the marketing tactics to produce a prospect. Where can we innovate to improve our marketing tactics? Are we using web capabilities effectively, strategically and competitively?
• Specify the plan and outcomes by week/month/quarter. Specify where we will make assessments to adjust if our tactics are not producing the interim situations we're committed to (satisfactory number and types of prospects)?
• Refresh our qualifying dialogue in our sales conversation. How can we innovate and improve qualifying to be more effective, strategic and competitive?
• Specify the sales plan for the entire year, with all of the tactics and interim situations to be produced. Depending on your specific situation, I recommend weekly or monthly. 
• Schedule regular sales review meetings, at least monthly, to assess, refresh and evolve the plan.

Acting with your Plan

As human beings we want to win, to look good, to be recognized for accomplishment. If this desire is overdeveloped, it can blind us to reality or cause denial of situations. The way I know to accomplish committed strategic objectives is to continuously recover our personal commitment to cause the outcomes we commit to. This does not guarantee success, but its opposite increases the probability of failure, particularly in challenging environments. To be cause in producing our commitments requires focus, rigor, maturity and giving up an addiction to denial. 

Execute your plans with discipline. Assess the outcomes. Continuously innovate and evolve strategies and tactics. Do not give up. Act committedly right up to the end of the year. Do not give in to the tendency to reduce commitments when the going is tough. Let your commitments pull you towards the future you desire. Be committed, not attached.

We cannot know what the future holds. However, we can hold our commitments and continue acting to the best of our abilities in every moment of now to fulfill them. Phillip Moffitt offers this on commitment:

Commitment reflects your values, intentions, and priorities; therefore it fosters clarity. In contrast, attachment is an unwholesome mental state in which you become overly identified with a desired outcome. The more centered and free from grasping your mind is, the better able you are to sustain a commitment over time and to make clear decisions along the way. You’re also less likely to cause harm in pursuing your goals. If you truly want to achieve something, be unswerving in your commitment to moving toward your goal but be flexible in your mind about the outcome.

We are all subject to conditions beyond our control. This is an overwhelmingly reliable guideline for life choices, yet it is so hard to accept. In your role as a parent, leader, teacher, employee, care provider, or whatever, you cannot control outcomes, but you can be responsible for your intentions. You can put all your effort into fulfilling your responsibilities and reaching your goals, while being patient, persistent, and courageous— but that’s it. To assume more is not only unrealistic; it is hubris. By focusing on your intentions, you align your attention with the area where your diligence can actually manifest. In making this shift, you also free yourself from your ego’s demand to have things just as you want them.

As you're planning, I welcome your questions for clarification. 

When we least expect it, life sets us a challenge to test our courage and willingness to change; at such a moment there is no point in pretending that nothing has happened or in saying we are not yet ready. The challenge will not wait. Life does not look back. A week is more than enough time for us to decide whether or not to accept our destiny. Paulo Coelho, The Devil and Miss Prym

Relevant Prior Posts

A Year-End Practice to Reflect and Plan

Image/Flickr user Public Agenda

Regardless of whether the "fiscal cliff", or "taxmageddon", is mitigated, I anticipate policies and legislation that continue to move the US away from the fundamentals required for strong economic growth:

1. Moderate tax rates across a broad base
2. Spending controls limiting government spending to receipts
3. Sound monetary policy–a strong dollar
4. Minimum impediments to free trade (trade with everyone)
5. Regulatory reform to have only required, necessary regulations, e.g. driving on the right; a pull back from regulatory overreach

The further we are from these fundamentals, the lower the rate of economic growth. I anticipate real US GDP growth will be approximately 1% for 2013–a 4 year low. Reducing unemployment requires growth greater than 2%, so this result will increase unemployment. With lower economic growth, we can also expect having an increased portion of GDP consumed by governmentis. In addition, we face increased business costs from increased taxes, the Affordable Care Act and additional regulations. Reduced GDP increases government spending as a percentage. As government doesn't produce, increased government costs are always paid by the citizens. Think of an economy consisting of two farmers. If one farmer gets government assistance, it comes from the other farmer and is net of the costs produced in the transfer.

When written in Chinese, the word "crisis" is composed of two characters. One represents danger and the other represent opportunity. John F. Kennedy

As CEOs, business owners and investors, our dominant strategy is to accept reality as it is, and to adjust our thinking and action to first survive, and secondly to grow. Most entrepreneurs I know (including myself) are optimists. We see what can be that isn't. We then organize our resources and commitments to bring our visions into existence. 

I strongly recommend caution with the current economic forces. I'm working to be more aware of my natural optimism, to question more thoroughly my interpretations and the outcomes I anticipate. I don't know about you, but I've seen several situations this year where the outcomes of commitments and action have been far less than anticipated.

There are also new possibilities to accumulate power in dangerous times. The businesses with strong performance and a capital surplus will be able to produce and exploit new opportunities in this environment.

For 2013

I see two essentials for prudence in dangerous times:

• Positive cash flow 
• Surplus capital for a sufficient margin of safety

Our sources of cash for our businesses are profits, additional financial capital (new investment) and borrowing. Debt is the riskiest of these as it both increases current expenses by interest costs and has to be repaid. I recommend extreme caution on debt in smaller private companies.

In planning for 2013 consider these commitments as possibilities for your strategic objectives:

• Get and keep expenses below revenues on a monthly basis
• If you wish to invest beyond the capital produced from profits, raise additional financial capital, including a margin of safety, before beginning to spend
• Commit and organize to grow faster than your market
• Deconstruct the offers and sales strategy of successful competitors; understand their marginal utilities and how they produce transactions
• Redesign your sales strategy to lower costs and increase results; I anticipate successful selling will require significant improvement in effectiveness for 2013

Hear the words of prudence, and store them in thine heart; her maxims are universal, and all virtues lean upon her; she is the guide and the mistress of human life. Akhenaton

Ensure Your Actions are Coherent with Fundamentals

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Illustration Japanese Kanji DANGEROUS/iStockphoto

I know that it takes a discipline, often for more than a year, to produce highly-valued accomplishments with new practices and/or strategies. I frequently see people constitute and commit to a new strategy or practice, only to abandon it when they fail to see or produce extraordinary results immediately. This is like going on a diet to lose 10 pounds, then quitting when you lose only a quarter-pound the first week. We will consider another philosophy of fail fast in subsequent post. As Kenny Rogers sang, "You gotta know when to hold 'em, and know when to fold 'em".

To enjoy good health, to bring true happiness to one's family, to bring peace to all, one must first discipline and control one's own mind. Buddha

My original commitment for Stan Leopard's Notebook was to write approximately weekly for a year, then re-assess. My first post articulated my purposes as they existed for me at that time. I'm considering whether I'm fulfilling my purposes and producing a satisfactory return on my investment of time, energy, money and lost opportunities for this commitment. 

Some of My Learning

I have become much more aware of other writings, mostly blog posts, offering distinctions and thinking on building wealth with private companies. Many of these texts speak with an authority that is not grounded in accomplishments of actually producing value in a private enterprise. There are numerous authors, academics, trainers, consultants, etc. who speak loudly about what works, what doesn't work and why, although they have never been a successful entrepreneur/CEO in a private enterprise. Mostly I encounter commonsense–distinctions and thinking that are ordinary, typical, mediocre and a rearticulation of "what you already know". It is my intention to share with my readers only those writings that are coherent with my experience and/or that are written by people who have produced real accomplishments in building and realizing enterprise value in private companies.

Writing requires investment. I have a much greater appreciation for what it takes to produce meaningful, relevant, valuable and purposeful writing. I am (mostly) satisfied with the results of this commitment.

There is little and infrequent feedback when value is produced. From the direct feedback I've received, I have the interpretation that my writing is of sufficient value to my network, thereby fulfilling one of my purposes. I speculate that I'm producing some value beyond my network based on an increasing number of regular readers and pageviews. I accept the best indicator of perceived value is readers.

I have an expanded awareness and deeper appreciation for the truth that competing successfully requires practicing and learning almost daily.

Live daringly, boldly, fearlessly. Taste the relish to be found in competition – in having put forth the best within you. Henry J. Kaiser

My practice of writing Stan Leopard's Notebook is existentially and pragmatically satisfactory to me. I will continue for another year, posting as I have something I'm compelled to share. I invite you to communicate any requested topics you have for your personal situation.

My Purposes

For this coming year, my purposes for Stan Leopard's Notebook are:

• To help those in my network develop and use strategic thinking, so that they improve the design and execution of their offers, practices, narratives and strategies in order to produce sufficient economic and social wealth through their enterprises to achieve their personal ambitions and business missions. Successful, growing businesses are of benefit to owners, employees, investors and communities.
• To maintain, deepen and expand my strategic knowledge in order to be increasingly effective, strategic and competitive in my practice of the art of business.
• To increase my writing skill.

My Business Philosophy

1. The most satisfying and successful way to live is to have and act from a set of values that enable one to be their best, including continuously learning from our successes and failures.
2. The space of possibilities for producing value in a free marketplace is abundant; mostly free markets, while not "perfect", are the best form for organizing human exchange.
3. Producing value in a competitive marketplace requires continuous competitive learning and practice of strategic knowledge–as individuals, teams, networks and organizations.
4. A skilled team, network or organization operating from shared values with intention, discipline, rigor and ethics will outperform a typical individual or group by a wide margin.
5. Human beings respond to incentives, and effective rules and structures for incentives are essential; when this is missing or flawed, unanticipated, usually negative, outcomes occur.
6. There are no short cuts in life. Contrary to media fiction, living a good life requires commitment, direction, velocity and focus. I find this way of living to be very satisfying.

A market economy is to economics what democracy is to government: a decent, if flawed, choice among many bad alternatives. Charles Wheelan

Underlying most arguments against the free market is a lack of belief in freedom itself. Milton Friedman

illustration: iSstockphoto/tilo

Recently, I complained to a colleague about the slow response and poor coordination occurring within a project I'm working on. He reminded me that situations such as this don't improve without with time, and that I already know poor communication and coordination will thwart the intended outcomes of the project. My initial response was to defend–I was doing all I could in this situation as my project partner has the access to prospects for the offer we're constituting. However, it was soon apparent to me that if we performed at common standards we would be unseductive to prospects and the project would fail. No one is looking for help that is slow, sloppy and unreliable. I saw there is no way to produce a satisfactory return on costs if the project is not impeccable and powerful.

To fulfill our ultimate ambitions in producing financial autonomy with our businesses requires we recurrently accomplish strategic objectives that are sufficient. It is common and ultimately unsuccessful to complete strategic objectives producing results that are less than required. 

To think is easy. To act is difficult. To act as one thinks is the most difficult. Johann Wolfgang Van Goeth

Take Inventory

Notice, observe and assess where you have allowed practices, moods, communications, coordinations, and productions to continue around you that you know won't produce the outcomes required for your personal ambitions and business mission:

• Where are you expending capacity on actions you know are ineffective, non-strategic and uncompetitive?
• What loops are you performing where you must be the customer (so you have capacity to perform those actions where you can produce superior outcomes)?
• Where are you putting up with poor communication and coordination you know won't produce the intended results?
• Where are you being "polite" and not speaking up about unsatisfactory actions and moods?
• In what current projects and strategies do you lack confidence in producing the intended results?
• What relationships are you putting up with (as opposed to being in a strategy to either change or replace the relationship)?
• What personal practices you know support your success are you not holding or working rigorously to hold? 

With this inquiry, I produced an inventory of possibilities where I can take action to improve my likelihood of success. The marketplace continues to become more competitive, and the economic environment more challenging. We are not entitled to succeed. We can increase our odds of succeeding by being rigorous and disciplined in noticing what won't work and not continuing that course of action.

Success in business requires training [learning] and discipline and hard work. But if you're not frightened by these things, the opportunities are just as great today as they ever were. David Rockefeller

Take Action

I recommend assessing your inventory and organizing from highest leverage (greatest return on action) to lowest. You can’t act on everything at once, of course. I've found that sometimes becoming aware of the actions we can take to improve our situation produces the mood of overwhelm. For myself, I've constituted a 90 day project to design, prepare and act to eliminate what I know won't work. Some possible actions:

• Practice regularly noticing and observing your own actions in areas you are working to improve. Examples of practices here can be a daily reflection where you write the actions of the day you assess as insufficient.
• Keep "starting over" in your commitment to stop your own actions, practices and moods that you assess as unworkable to fulfill your ambitions.
• Maintain (or constitute if you don't have them) your practices for competitive learning. These practices include both learning new distinctions and practicing the distinctions we have and learn daily in our work.
• Speak to those who are acting in ways you know won't work. Ground your assessments in marketplace standards, not your personal standards. Request and get commitment to performance standards that will work. In some situations others are capable of higher performance when it's required. 
• Change the constitution of the team. If you're the lead, replace team members who can't or won't perform to standards you know are required to be effective, strategic and competitive. If you're on the team, resign if the team can't or won't shift to hold and perform to sufficient standards.
• Be willing to stop actions and disengage from relationships where you know the thinking and action is insufficient for what you must accomplish to succeed. Although it can be very challenging, it's really better to think and design new actions than be engaged in what you know won't work.
• Continuously deepen your knowledge of what's effective, strategic and competitive (moods, offers, practices, narratives and strategies) given your ultimate ambition, strategic objectives and tactical focuses.

Taking action to stop what we know won't work offers high returns. None of us can succeed alone. However, teaming with common or mediocre performers reduces effectiveness. With powerful networks, 1 + 1 = 3. With weak networks 1 + 1 = less than 1.

Live daringly, boldly, fearlessly. Taste the relish to be found in competition – in having put forth the best within you. Henry Kissinger

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Attend to the Details

Image Credit: Flickr User/I am marlon

Those who learn to use, rather than merely operate, computers and the internet have access to powerful tools for learning, communicating, coordinating and producing. The ubiquitous use of computers and connectivity dramatically increases:

• Access to knowledge–no longer does the graduate of a prestigious academic institution have knowledge unavailable to others
• Access to means of production–no longer do existing companies have a monopoly on low cost production
• Access to capital–for individuals and companies who can provide marginal utilities to customers
• Speed for competitors to notice and copy innovations

Velocity in Innovation is Required

We make meaning from the world we encounter with our narratives, our interpretations. We create new offers, practices, narratives and strategies with our language. The conversations we are in, with ourselves and others, determine the competitiveness of our businesses. There is a cornucopia of commentary, advice, opinion, etc. available on the internet, in books, on TV, in film, etc. Are these the narratives that produce success? No way. In a time of so much noise telling us how to constitute, strategize, execute, and so on–it's up to each of us to develop the skill to choose and gain commitment from the speakers we will listen to, those who can make a real contribution to fulfilling our personal ambitions and business missions. At no time in my 36 years in business has a powerful network and the expertise to make assessments of speakers and narratives been more valuable.

To produce a steady stream of new offers, practices, narratives and strategies that are scarce relative to demand, i.e. to provide high marginal utility, requires:

• Powerful interpretations of the market forces shaping your space of possibilities for thinking and acting
• Noticing, observing and assessing the threats, obligations and opportunities of your current situations
• Declaring the new situations required for your success
• Expertise in designing, crafting, speaking, fulfilling and producing satisfaction

This expertise exists in the configuration you are–the conversations for design and action you can have with your team, advisors, colleagues, customers, investors, etc.

Choose Your Conversations Mindfully

Because of our biology, we cannot help but be affected by the conversations where we listen and engage. Coontogenic structural coupling names the phenomenon of we (humans) being altered and shaped by the narratives and moods we interact with recurrently. I still find myself thinking that I have the power to listen only to those narratives that are well-grounded while allowing weak, ineffective ones to pass without effect. That's another aspect of my biology–the sense of being the center of reality, or the "star of my own movie".

The fact is you will be affected by the speaking of those you listen to. You can't avoid this. You can't edit later. Your thinking is always shaped by the conversations you engage in, both with yourself and others. What you can do is decline to engage in conversations about your enterprise except with those you accept as appropriate–trustworthy, valuable, well-intentioned. With awareness we can (and must) gently guide conversations to fit what we deem appropriate with each particular speaker. 

Silence is a great source of strength. Lao Tzu

I offer some guidance for developing your criteria and practices around your conversations for thinking and action in building your enterprise:

• What is your personal ambition? What outcomes are you working to accomplish ultimately?
• What are the accomplishments of the speaker relevant to your ambition?
• What are your values?
• What are the values of the speaker? Are they coherent with your values?
• How will you be of help to the speaker(s) who are of help to you?
• In what domain(s) do you grant a particular speaker authority? In what domain(s) do you trust their speaking?

I continuously develop and refine practices to cultivate and expand my space of possibilities for powerful conversations, including my network and the offers of help I can make and fulfill. I organize conversations in time horizons, i.e. specific conversations to have daily, weekly, monthly, quarterly, annually, etc. I design, as best I can, to have the structure of these dialogues be low-cost (for me and others). I pay attention to making offers of help to my network. This is a practice, not a procedure, meaning it is flexible and I'm continuously assessing and refining.

It is the province of knowledge to speak. And it is the privilege of wisdom to listen. Oliver Wendell Holmes

Know and Remember Your Ambition

When I engage as a strategic advisor to a CEO, I often find that the constitution of the enterprise isn't connected to a well-formed ambition. Thus the constitution is often insufficient for their ambition. When this is the case, winning is the same as losing. I recommend The Aji Network's guidance for developing and articulating your ambition.

When you listen and dialogue, listen from your ambition, listen actively:

• What claims is the speaker making?
• What assessments?
• What speculations?
• What evidence or grounding is being offered?
• What offers are being made?
• What new possibilities for thinking and acting appear for you?

It seems automatic to listen from a posture of defending or convincing. Try on a posture of co-creating. Listen to expand your narratives.

To listen fully means to pay close attention to what is being said beneath the words. You listen not only to the "music", but to the essence of the person speaking. You listen not only for what someone knows, but for what he or she is. Ears operate at the speed of sound, which is far slower than the speed of light the eyes take in. Generative listening is the art of developing deeper silences in yourself, so you can slow the mind's hearing to your ears' natural speed, and hear beneath the words to their meaning. Peter Senge

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Image: Flickr User/ky-olsen