The Business Leader's Impact: Five Critical Drivers of Sustainable Profitable Growth

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INTRODUCTION

The Greatest Challenge Businesses Face All Over the World

The greatest challenge that businesses all over the world are facing right now is not to achieve success. We all know of individuals, groups, and organizations who have achieved amazing success just since the turn of the century back in 2000. However, many times these people achieved incredible results only to fall way, way back down. The greatest business challenge isn’t to achieve success. The greatest challenge is to achieve success and to sustain that success over the long term.

In essence, the objective is to generate sustainable profitable growth. To do this an organization has to gain and maintain a competitive advantage that matters deeply to customers. This competitive advantage may very well evolve over time and shift into a new direction, but whatever it evolves to it still has to resonate with customers.

That phrase gain and maintain a competitive advantage that matters deeply to customers is very easy to type and very hard to accomplish. In having worked with executives at a variety of companies including McDonald’s, Marriott, Coca-Cola, Toyota, Abbott, Shell, St. Louis Cardinals, Anheuser-Busch InBev, and RE/MAX, I have come to realize that there are five critical drivers of a competitive advantage that generates sustainable profitable growth for every business. They are leadership, teamwork, execution, innovation, and branding.

I believe that success for an organization begins with effective leadership. An effective leader gets a group of individuals to work together as a team toward achieving meaningful outcomes. The leader and the team establish a plan that when executed well produces the desired results. However, the team has to constantly create more appropriate value for customers through innovation. Ultimately, the organization thrives by earning a brand that is highly valued by customers.

In the absence of any of these five drivers an organization will struggle to maintain its competitive advantage, and this will weaken the organization’s ability to sustain profitable growth. This book provides practical advice on strengthening each of these five business drivers.

Dan Coughlin

St. Louis, MO

DRIVER #1 LEADERSHIP

Accelerate Your Impact as a Business Leader

To me, leadership means influencing how other people think so they make decisions that improve results in a sustainable way. Leadership is not about title, income, or authority. It’s also not about gender, race, height, size, or personality type. I’ve never seen a label that guaranteed a person would be an effective or an ineffective leader. A sustainable competitive advantage that matters deeply to customers doesn’t just fall out of the sky. It is crafted into a reality first and foremost by individuals who influence how other people think. These are the leaders in an organization. These are the people who impact the present and the future of the organization. In this chapter we will focus on a variety of key aspects of effective business leadership.

SEE THE ENORMOUS IMPACT OF VALUE AND VALUES

Several years ago I had a meeting in Libertyville, Illinois, which is about 45 miles northwest of Chicago. The meeting started at 8 AM. The day before the meeting I drove from my home in St. Louis to Libertyville, which is a 330-mile drive. If you’re wondering why in the world I drove 330 miles as opposed to flying, I just have two words for you: O’Hare Airport. Enough said.

When I was 150 miles into my journey a really important business question popped into my head: I did pack my jacket and my shirt for the meeting tomorrow, didn’t I? I looked over my right shoulder and saw that my jacket and shirt were not hanging there. I looked over my left shoulder and noticed the same thing. I had managed to leave my jacket and my shirt in my closet in St. Louis. I drove for five more miles and realized it was too late in the day for me to drive all the way back to St. Louis and make it to Libertyville at a decent hour, and I knew the meeting started too early in the morning for me to get to a department store before it began. After going five more miles, I landed on the only logical solution I could think of. I called Nordstrom’s, the one on Michigan Avenue in downtown Chicago.

I had never been to the Nordstrom’s on Michigan Avenue before that night, but I called them up and said, My name is Dan Coughlin, and I left my jacket and shirt in St. Louis. Is there any possibility you could get a jacket and shirt pressed and ready tonight for me to wear to a meeting tomorrow morning?

The man said, I don’t think this will be a problem. What size do you wear?

I said, 42 regular.

He said, No problem at all. What time will you get here?

I said, I think it will be about 9:30.

He said, Now we have a problem. Our store closes at 9 PM. He paused and then said, I tell you what. We’ll keep our store open for you. When you get here, just come on upstairs and we’ll be all ready for you.

I said, "You’ll do what?

He said, Yeah, it’s not a problem. When you get here, we’ll be all set.

I called two more times for directions. I pulled into the parking lot at 9:25. I ran up the stairs, went to the woman by the checkout register, and said, My name is Dan Coughlin, and I called a few hours ago about a jacket and a shirt.

A man who was folding clothes four rows over yelled out, "Hey, Dan, we’re all ready for you. Here’s a cold bottle of water. We didn’t think you would have a chance to get anything to drink. Here’s your jacket and your shirt. What do you think?

I think they look great.

Try them on and make sure they fit.

I tried them on and they fit perfectly.

He then said, Now, I did pull out these other two shirts that go with this jacket. What do you think of these?

I looked at the shirts, I looked back at the salesman, I looked back at the shirts, and I said, I’ll take them.

Why did I spend a thousand dollars that night and why did I think of Nordstrom’s?

Three years before that night I was at the Nordstrom’s in St. Louis near my house. I had my son, Ben, with me, who was three years old at the time. I went to pick up four pairs of shoes that I had dropped off to be polished. I paid the shoe shine man for the shoes, and then I leaned over to pick up the bag.

He said, Can I help you?

I thought he was going to pick up the bag and put it under my arm so I could hold Ben’s hand with my other hand. Instead he picked up the bag, left the shoe department unattended, walked out of Nordstrom’s, walked out to the parking lot, and put my bag of shoes in the trunk of my car for me so I could focus all of my attention on Ben. Three years later when I was in a jam and couldn’t think of anyone else to call the very first company I thought of was Nordstrom’s.

Three weeks after he took my shoes out to my car for me, I went back to the Nordstrom’s in St. Louis and asked the store manager, Where do you find all of these friendly people?

She said, Oh, it’s our interview process.

Well, what questions do you ask?

One of the questions on our questionnaire is, ‘Are you a compulsive smiler?’ and if the person doesn’t break into a smile right away when we ask it, then we probably don’t hire that person.

What ideas from that story do you think are important for your work over the next six months?

One idea I want to emphasize is the enormous impact of value and values. Value is anything that increases the chances the other person will achieve what he or she wants to achieve, and values are beliefs that determine behaviors. The shoe shine salesman in St. Louis did not know the shirt salesman in Chicago. They were both just looking for ways to create value and deliver it to a customer. However, it was more than just polishing shoes and selling shirts. They demonstrated really consistent and powerful values. They believed it was okay to go the extra mile and keep the store open and carry my shoes out to my car so I could focus on my son.

It’s not just what you provide that matters, but also how you provide it.

When you deliver value to another person and you do so with the appropriate values, the next time that person is in a jam the very first person and the very first organization he or she is going to think of are you and your organization. Your positive impact as a business leader is dependent on both value and values, what you deliver and how you deliver it.

I want you to begin an exercise now that you can come back to several times in the future. I want you to write a list of your values, the beliefs that determine your behaviors. You don’t have to think of every conceivable way you can apply those values. I just want you to be aware of your values. Keep that list nearby and read it over regularly and add to it whenever you think of another one of your values.

As you go through your day, ask yourself what you can do to add value to other people in a variety of situations. What is the little extra you can do that would really help the other person? When you do these things, make sure your behaviors always fit within your values. This steady drumbeat of applying value within your values is an effective way for you to steadily make an impact as a business leader.

I also want you to broaden your focus to your entire organization. Any organization that has achieved a sustainable competitive advantage that really matters to customers has done so through a combination of the value it delivers and the values that drive behaviors in the organization. Apple, Wal-Mart, and Disney each have developed a distinctive combination of value and values that have given them a tremendous competitive advantage that really matters to their customers.

Here are a few questions for you to answer to clarify and enhance your organization’s sustainable competitive advantage.

What value do your customers receive from your organization?

What values do people in your organization demonstrate on a regular basis in delivering that value?

What competitive advantage can your organization gain and maintain that would really matter to your customers if the value your organization delivers and the way in which that value is delivered are further honed and strengthened?

I encourage you to include several key people in your organization as you go through these questions in order to arrive at more complete answers. As you influence these individuals to continually think about and refine the organization’s value and values, the greater your chances become of crafting a sustainable competitive advantage for your company.

SCHEDULE THINKING AND NON-THINKING TIME

Tom was the Vice-President of Operations of an $800 Million business region. I was working with him as an executive coach. He and I got along very well, and then one day he said to me, Dan, I have a problem.

I said, Tom, what is it?

My boss thinks I’m not very strategic or creative, and I don’t know what to do.

I have seen this situation many times in the past, and so here is what I suggest.

Tom picked up a pen and said, This is going to be important. I’m going to want to write this down.

I said, "Tom, I suggest you block out one hour a week to really think. Put it on your calendar and call it thinking time, planning time, or my time, and make it as important as any meeting with any other person. When you get to that hour, I suggest you focus on just one business outcome you want to improve or one business issue you want to resolve. Don’t try to brainstorm on five or six things at the same time. Take out a blank sheet of paper and at the top of the sheet of paper turn that business outcome or issue into an open-ended question. Not a yes or no question, but an open-ended question.

Then for the next 35 minutes answer that question from a variety of perspectives including your perspective, your boss’s perspective, your peers’ perspective, your employees’ perspective, your customers’ perspective, and your competitors’ perspective. Take the next 10 minutes and look at your list of ideas and combine ideas together to make even better ideas and write them down. At the end of those 45 minutes, select the best idea you came up with and use the last 15 minutes to write out an action plan of how you will move this idea forward. If you will do this for one hour a week, I believe you will make all the other hours in your work week even more effective, and you will be seen as being creative and innovative.

Tom slowly put his pen down and said, Dan, that is the single dumbest idea I’ve ever heard. If I go off to La-La Land to think, people are going to make fun of me. You don’t understand. People don’t pay me to sit around and think. They pay me to get things done.

I said, Tom, I do understand. People don’t pay you to get things done. They pay you to improve results. If you will invest one hour a week in thinking time, you can have a tremendous impact on the results you generate in all the other hours in your work week.

He said, Fine, I’ll try it.

Three weeks went by, and then we spoke again.

Tom said, I just want you to know I tried your thinking idea, and I can honestly say I wasted three hours.

I said, Hang in there. It’s not going to happen instantly for you.

About two months later he said to me, I landed on an idea in operations that we’ve never tried before. Do you think I should try it?

I said, Do you think it will have a positive impact on your most important business outcomes?

I think it will.

Do you think it has a high potential to have a really negative impact on your business?

I don’t think so.

Well, give it a try.

About four months later we were talking again, and Tom said, I just want you to know that I now schedule an hour of thinking time every week and everyone on my team schedules an hour a week to think. However, I just have one problem with you. Why didn’t you tell me to do this when we first met?

I didn’t have a very good answer so I don’t want to make that mistake again. I am encouraging you to block out one hour a week to really think. One hour a week where you get away from your boss, your peers, your employees, your suppliers, your customers, your family, and your dog, and you go to a place where no one knows you. Take out a blank sheet of paper or a computer. Focus on one business issue you want to resolve or one outcome you want to improve. Turn that issue or that outcome into an open-ended question. Answer that question from a variety of perspectives: yours, your boss’s, your peers’, your employees’, your suppliers’, your customers’, and your competitors’. After 35 minutes look at all of your ideas and start combining them to come up with better ideas. At the end of 45 minutes take your best idea and use the last 15 minutes to put together an action plan. I really believe if you will do this one hour a week you will start to generate even better results.

While we’re on the topic of thinking, there is one other topic I want to focus on and that is non-thinking time. One of the worst habits I’ve seen executives fall into is what I call The 24 – 7 – 365 Habit. This is where people feel they need to work 24 hours a day, seven days a week, and 365 days a year in order to survive in the business world. I encourage you to not do that. My experience has been when people work like that they become emotionally exhausted, physically exhausted, and mentally exhausted, and they stop coming up with the kind of ideas that will move their businesses forward.

I encourage you to take breaks from your work. Every morning I suggest you go for a 10-minute walk outside. If it’s raining, bring an umbrella. If it’s cold, wear a coat. Leave your smart phone on your desk and go out there electronically naked. Every week I suggest you block out at least three consecutive waking hours where you don’t touch your email or your texts or your voicemail. Every month I suggest you give yourself at least one full day where you don’t touch your work at all. If you will do these things, I believe when you come back to your work you