Chuck Kocher

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Have you ever noticed how a lot of college sports teams have fierce-sounding names? There are the Rainbow Warriors from Hawaii. The University of Florida has the Gators.  Penn State is home to the Nittany Lions. Iowa State boasts the Cyclones. The Badgers represent The University of Wisconsin. All of these mascots are fierce, tenacious, or powerful (Of course, there is the University of California at Santa Barbara, with their Banana Slugs, but we’ll just leave that one alone).

While I don’t know of any businesses that have official mascots (unless you want to count Ronald McDonald and the Burger King), they do have traits that characterize them. If you were to pick a mascot to represent your business, you might not choose the hedgehog. He’s not big. He’s not known for being a fierce competitor. He’s not particularly aggressive. He doesn’t strike fear into the heart of the competition. And yet, according to Jim Collins, author of the best-selling Good to Great, there’s a lot that businesses can learn from the humble hedgehog.

Collins relates the parable of the fox and the hedgehog. The fox is clever and continually looks for new ways to outsmart—and ultimately eat—the hedgehog. But the hedgehog repeatedly thwarts the schemes of the clever fox by doing one thing—and doing it well. He rolls up into a thorny ball.

It’s not sexy. It’s not awe-inspiring. It doesn’t get written up in business journals. But the hedgehog survives and thrives.

Collins’ application of the hedgehog concept to businesses involves three key parts: 1) What a business is passionate about; 2) What a business can be best-in-the-world at; and 3) What drives a business’s economic engine (usually calculated by a simple ratio of profit/x). How can this apply to your business?

What are you passionate about? There are tons of so-so businesses out there. Some even manage to keep going year after year. But there are no great businesses without passion. What is your business passion? If you’re not passionate about what you do, greatness will elude you. And passion isn’t something you manufacture. If you’re not passionate about the heart of your business, you’re probably in the wrong business.

What can you be the best-in-the-world at? Collins warns business leaders to do a reality check on this. It’s not what you’d like to be best at, or what you dream about being best at. What can you realistically be best at? If you’re not realistic about this, you’ll fail. The hedgehog didn’t go on the offensive against the fox. It wasn’t realistic. But he knew that the fox couldn’t defeat him if he did what he did best.

What drives your economic engine? This factor will vary from business to business. But within a business there is usually an “x” factor that determines economic success. It’s a ratio of profits to some other key factor. It could be cost of sales. It might be number of new customers. As I mentioned, it will vary from company to company. You have to figure out what it is for your company. If you don’t, all the passion in the world and all the skill in the world won’t matter.

It’s important that all three of these factors work in concert. If you take any one of them out of the equation, your chances of creating and sustaining a great company plummet. But if you can figure out the one thing you’re passionate about, that you do better than anyone else, and that you can sustain economically, you’re on your way to creating a great company.

As for me, I’m just glad that Jim Collins didn’t come up with something called the “Banana Slug Concept!”

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There are a lot of important numbers you need to pay attention to if you want to be a great company. But you can’t treat them all the same. Some numbers are simply more important than others. And some are downright critical.

Even important numbers can be misleading if you look at them in a vacuum. Take sales, for instance. Are they important? Absolutely. But if you look at your sales number in isolation, you could end up in trouble. You could have great sales numbers, but if your cost of sales is out of whack (too high), you’ll be out of business.

Some businesses get hung up on head count. They look at an increase in the number of employees as a sign that the company is growing. It could be, but what’s the productivity number? What’s the impact on (long term) profits? Business isn’t just about being busy.

What about critical numbers? And what the heck makes a number critical in business. A critical number is the metric you use to chart and measure your business health. It’s that one number you need to watch that drives the economic engine of your company. And it can change from year to year, depending on where your business is in its life cycle.

Your critical number could be your debt-to equity ratio. It could be your sales-to-cost-of sales ratio. It might be cash flow. Or it could be your percentage of market share. Your critical number comes out of your strategic planning. It’s what you use to determine whether or not you’re on target to reach the specific goals you set for the company. And it’s dependent upon what your company really needs at the time.

For instance, a company with great sales numbers, but a lousy cost of sales number doesn’t need to focus on improving sales. It shouldn’t ignore sales, but that’s not the critical problem. They need to figure out how to reduce the cost of sales.

Here’s another example. A number of years ago a well-known high tech firm had great numbers in their support division. They were hiring like crazy and their people were busy. What they didn’t see (initially) was that the reason support was going gangbusters was that quality control at the front end was bad. They were busy, but they were losing money. Their critical number wasn’t increased support activity. It was poor quality control.

What’s your critical number? You have a lot of important numbers you need to watch, but don’t lose sight of the really critical numbers that can make your company great—or break it.

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Really good teams are more than simply the sum of their individual parts. When you bring the right team members together and have them working in the right way, the impact can be exponential.

Of course, the converse is also true. If you have the wrong members on your team, or if the team is dysfunctional (for any number of reasons), the negative impact on your business can be devastating.

Here are what I consider to be the top five questions any business leader must ask about his team—if he wants to build a great team and a great company.

1. Is your team going to get the company where it wants to go in 3 years? This isn’t about whether team members like each other or even get along. This is an objective question about the knowledge, skills, character, and commitment of each member of the team. Achieving your company’s specific goals will require specific knowledge and skills. It doesn’t matter how nice someone is if they don’t know how to do what’s needed. As a leader, it’s your responsibility to know what knowledge, skills, and commitment are required—and then to make sure your team members can do what’s expected.

2. Is your team open, brutally honest, and direct in its communication? Some people abuse the concept of being “brutally honest.” What I’m talking about is not an excuse to disrespect people or hurt them with words. The emphasis needs to be on honesty. You can’t have hidden agendas. Team members need to have the freedom to say exactly what they mean. If actions are expected as a result of communication, it’s essential that the desired action be clearly communicated. Nobody wins when one team member comes back later and says, “I thought you meant . . . .”

3. Does each member of your team operate from a perspective of ownership, accountability, and responsibility? People will fight tooth and nail for what they personally believe in. They’ll go the extra mile for something that they “own.” If your team doesn’t buy into your goals and objectives and take them as their own, you won’t get their best efforts. And by the way, if you don’t get buy in, you probably don’t have the right goals—or at best, you haven’t communicated them adequately.

4. Would you rehire each member of your team? If you were starting from scratch and knew what you know today (your market, your strategy, and what it will take to get the job done) and could hire anyone you wanted to hire, would the same group of people be sitting around the table with you? This is a slightly different way of looking at the first question—and can help you be a bit more honest and objective. By the way, you should include yourself in this process. Would you hire you to lead this team?

5. Does your leadership team exemplify your company’s culture at the highest level? This isn’t about creating a culture in which everyone is the same. You want individual expression of essential character traits. But where it really matters, there needs to be no doubt about your leadership’s character and commitment. What your team agrees to in the conference room needs to be what they do when they’re back at their desks.

Of course, when you get the answers to these five key questions, they lead to a sixth question that’s every bit as important: What are you going to do about it?

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As a business leader you know you have to continually invest in your businesses. When money is tight (and when is money not tight?) that can be tough to do.  The long-term downside of not investing, however, simply isn’t an option.

If you don’t invest in your infrastructure for instance, it won’t be long before a competitor’s capabilities leave you in the dust.  What was “industry-leading” or “industry-best-practice” a couple of years ago simply may not cut it today. This isn’t about having the latest, shiny new technology. It’s about making sure you’re able to respond to market needs.

If you don’t invest in the right people, you’ve got an equally big problem. A lot of companies like to tout the fact that “our people make the difference.” It sounds good, but unless they’ve invested in smart, talented, skilled, and motivated people, it’s just a slogan. People can make the difference—if they’re the right people. As a leader, it’s up to you to find them.

If you don’t invest in marketing, you’re going to have a tough time growing your business. Some businesses confuse advertising with marketing. That’s not what I’m talking about. You constantly need to be engaged in lead generation. You have to invest time and money into developing a marketing strategy and plan that provides your sales team with qualified leads. Companies that don’t do it, don’t grow.

There’s one business investment, however, that many business leaders overlook. It’s really easy to do because there are often so many demands on a business leader. But it’s absolutely crucial.

You need to invest in yourself.

If you’re not investing in your own growth, how will you be able to lead, lift, help, and inspire those around you? How do you go about “investing in yourself?” Here are a few critical areas to consider.

• What are you learning? Business today is in a state of constant change. Are you staying informed? Are you keeping abreast of new developments? What are you reading? With whom do you get together to exchange ideas? What new skill have you developed within the last year? You know the old adage that if you’re not moving forward, you’re moving back? That’s absolutely true in business. If you’re not learning and moving forward, you’re falling behind—and you may not even know it.

• What inspires you? This is similar to learning—but with a bit of an edge. Are you exposing yourself to innovative thinking? It doesn’t have to be in your specific industry. Every industry has individuals that come along and turn an industry on its head. Check out online webinars. Read about innovative thinkers. Watch TEDs talks online. Stretch your concept of what’s possible.

• Are you taking care of yourself? Being healthy may not sound like much of a business-oriented objective, but if you’re worn out or lethargic, it’s tough to find the energy necessary to drive business forward. There’s an old (true) story about a preacher who was passionate about his ministry, but who didn’t take care of himself physically. As he lay dying, he said, “God gave me a message and a horse. I have killed the horse and now I cannot deliver the message.” Are you taking care of your “horse?”

• Are you taking care of business outside of business? There’s more to life than just being a successful business leader. Are your personal goals and your business goals aligned?

Sometimes we need a little bit of accountability to make sure we are investing in the right things. If you’d like to explore what that looks like, give me a call. I’d love to help you figure out how to invest in yourself—and as a result, invest in the success of those around you.

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Good communication skills are among the most valuable skills you can develop for personal or business life. Good communication skills, however, involve more than simply knowing what to say—or even how to say it. Generally, there’s a right time to say something.

If you and your spouse are rushing around the house, desperately trying to get to your cars (because you’re both late for important meetings) while trying to get the kids organized and off to school—that’s probably not the time to have a serious discussion about the family budget. That kind of communication—even though it’s important—is simply out of sync with your current family rhythm.

In the same way, your company has its own unique rhythm. Your company depends on good communication, but that communication should follow a logical, predictable rhythm so that people know what kind of information to expect and when to expect it. Here are some suggestions.

Be logical. If you have certain times of the day or days of the week in your business that are extremely busy—when the phone are ringing off the hook—don’t schedule meetings or send out communiqués at those times. Your employees will be distracted, and your customers won’t be happy either.  If you’re having a meeting in which people are supposed to make status reports, don’t schedule the meetings for the day before the quarterly numbers are in. Make sure your people have time to prepare. If you’re scheduling a strategic planning meeting, don’t plan it for when key players will be out of town (holidays, spring break, summer vacation).

Be consistent. For regularly scheduled meetings, don’t start, stop, change the times, or blow off the meetings. Make sure the employees involved know that the meeting will happen each and every time. And make sure the meeting is run consistently so that important information is covered each time. The meetings can run longer or shorter (depending on what you have to cover), but they need to happen consistently.

Don’t be a slave. Some companies really need to have a daily huddle. They have enough new information daily to justify that. Other companies simply don’t need to get together that often. Discover what your company’s rhythm is and go with that. The goal is to communicate important information—not to have meetings.

Be aware of informational flow. Your executive team and each of your functional teams should set weekly meeting schedules with a designated owner.  If the functional teams meet Monday morning and then the executive team meets Monday afternoon, that allows for the proper flow of communication, because the executive team will be reacting to current data when making strategic decisions.

Be strategic.  Establish a regular meeting rhythm for your executive team’s strategic thinking sessions.  You can rotate leadership of this meeting, but it’s imperative that someone “owns” the meeting and that he or she clearly communicates the expectations (including preparation required for participants). Unprepared participants are wasting the time of others involved. To function as a team, everyone has to do his or her part.

Be “big picture” at the appropriate times. Companies need long-range, “big picture” strategic communication as well as functional updates. That’s what your quarterly and annual planning sessions are for. And in these meetings, the flow of information is the exact opposite of what it is for weekly meetings. Your executive team should meet first to map out the strategic direction and plan. Then your functional teams should meet to work out the details for making that happen.

Take some time to discover the natural communication rhythm for your company. Get the rhythm right and you’ll be rocking and rolling to beat the band.

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Whether we like it or not, as business leaders we’re faced with a choice: Innovate or fade into obscurity.  In today’s marketplace there just isn’t much room for “me-too” companies. Companies have to reinvent their products and services constantly to meet the changing needs of their customers.

Innovation, however, doesn’t just happen by itself. It’s something you have to plan and manage, and push along. Here are five key questions to ask about innovation in your business.

1. How do you innovate? What does innovation look like in your company? True innovation involves more than making slight “tweaks” or cosmetic changes to your products and services. What changes are you making that make your products or services “must haves” for the industry you’re in? In order to do that, you need to know what your customers (and potential customers) really want and need. Are you studying your customers’ needs? Are you keeping yourself informed about hot topics in your market space?

2. Do you have an innovation process that is integrated into your business? Innovative companies don’t just hope for innovation—they have a plan and a process for making innovation happen. This needs to be an essential part of your regular strategic planning. Like all good plans or processes, your process for innovation needs to be specific and measurable. Having a “suggestion box” may be OK, but what you really need is a well-developed process that can take stimulates ideas and provides specific tasks form turning those ideas into reality.

3. How does your innovation stack up against your main competitors and within your industry? The business world isn’t a vacuum. You can’t act as if you’re the only game in town.  And in today’s economy you need to remember that your closest competitor is only a click away. You don’t need to imitate what your competitor is doing (that’s really not innovation anyway), but you do need to be aware of what he’s doing. Has he tapped into a need in the industry you were unaware of? Can you meet that need in such a way that customers will forget about him and flock to you—regardless of the price?

4. How is your innovation linked to your strategic planning process? We touched on this a bit above, but it bears repeating: Innovation is too important to treat as an afterthought. You need to devote as much thought and attention to innovation as you do to things like budgets and market share. It needs to have it’s own spot on your strategic planning agenda. It’s not enough to casually ask if anyone has any new ideas. You need to actively pursue innovative ideas.

5. Do you have champions of innovation in your business? Do you have someone who is responsible for driving new innovation? It doesn’t have to be you, but unless someone is specifically responsible for driving innovation (and creating a process to make it happen), your chances of doing something innovative are slim. That being said, you’ll want to create an atmosphere where everybody feels responsible for innovation. Encourage your leaders to find out what’s going on in their specific part of the industry. Reward reports on what’s happening “out there”—even if the news makes you uncomfortable.

Remember: Innovation won’t happen unless you make it happen. What are the biggest challenges your business faces when it comes to innovation?

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We all know that knowledge is power. And leaders who are in the know about what’s happening in the business environment around them are better able to adjust their plans, goals, and strategies. That’s why it’s so important to keep abreast of new developments.

Maybe you’ve heard about the two unemployed CEOs commiserating at a bar. “How did you lose your company?” the one inquired. “I went to the bathroom,” replied his friend, “and forgot to take my smart phone.”

The good news is that today’s technological tools have put an incredible amount of information right at our fingertips. The bad news is that we sometimes become slaves to those tools. Instead of using them to our advantage, we let them control us.

The good folks at gizmodo.com are admittedly “gadget geeks.” They love technological gadgets and what they can do. And they’re always on the lookout for the next new thing. But even they recognize that sometimes our obsession with technology—and with “keeping up”—gets a little out of hand. That’s why they developed the quiz,  Are You Addicted to Technology? Here are just a few of the questions they ask:

1. Do you eat most of your meals while at the computer or in front of the television?

2. Do you sometimes bring your laptop when you sit on the toilet?

3. Do you check your feeds more than 1x per hour?

4. Do you make a nervous habit out of refreshing your inbox over and over, just in case someone emailed you in the last 45 seconds?

5. Can you not remember the last time you didn’t check online reviews before eating at a new restaurant?

6. Do you freak out if you’re in a car and there’s no GPS?

7. Does the verb “tweet” come up regularly in your real-life conversations?

8. Have you ever changed vacation plans based on wi-fi availability?

You can take the whole 50-question quiz here—and check your score. It can be pretty amusing—and horrifying.

The fact is that you don’t need to know everything about everything. Decide what it is you really need to know to succeed and pay attention to that. Develop relationships with smart people in other disciplines and get “big picture” summaries from them. Stay informed, but don’t bury yourself with information that you can’t do something about.

And when it comes to technology, select the tools that meet your needs—not the ones that are shiny and new and “all the rage.” A tool is only a good tool if you can use it to accomplish something you want. Limit the number of tools you use and make sure that they serve you—not the other way around.

Oh, and let me know what score you got on the quiz. I’ll tell you if you tell me. And maybe we can schedule a joint intervention!

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It’s hard to argue with the success that Google has enjoyed over the last ten years. As a matter of fact, it’s kind of hard to imagine life without Google today. While they may not be the only game in town when it comes to Internet search, they have unquestionably shaped the way business is done around the world.

Larry Page, Sergey Brin, Eric Schmidt, and the rest of the Google gang are true innovators. But their most significant innovation may not have been in the areas of search, mapping, applications, or even their highly-touted-top-secret algorithms.  As important as those things are, the real genius of Google lies in how the company has been led.

What they introduced was a multi-generational leadership style that tapped into the strengths of different generations. Eric Schmidt was brought into Google to provide “adult supervision” for the young—and inexperienced—genius of Page and Brin.  But it wasn’t a “Father Knows Best” arrangement. Schmidt had knowledge and experience that his two younger cohorts hadn’t had time to develop. And the young guns had knowledge, skills, and “native” abilities that Schmidt would never be able to develop.

That mixing of generational abilities and knowledge is what has enabled Google to thrive while many companies flounder as they try to find their way in the “new economy.”

Eric Schmidt had plenty of background in high tech from his days at Sun Microsystems. But he—and the others at Google—realized that they weren’t just dealing with technology. They were dealing with massive shifts in lifestyle. Gen-X and Gen-Y individuals are digital natives. They grew up with technology. It’s part of their social DNA. And so is rapid change. People of Schmidt’s generation sometimes find themselves struggling to keep up with things that are second nature to a younger generation.

The leadership style for most businesses today is still firmly entrenched in patterns established in the last two centuries: a single, top-down, CEO style that simply won’t work in a changing society and economy. Google, on the other hand, recognized the contributions both generations can make. And they structured their leadership to reflect that. That was truly innovative because almost nobody else was doing things that way.

Is your business struggling to keep up with the changing demands of the marketplace? Do the pace of change and the constant evolution of technology sometimes overwhelm you? Maybe it’s time to bring some different leadership to the table. That doesn’t mean “abdicating” leadership or responsibility. But it might mean sharing the burden with others who have their finger on the pulse of the market.

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You’ve probably noticed that it’s a pretty competitive business environment out there. And unless you’re really unusual, you probably don’t have people lined up outside your door begging to do business with you. There are, however, businesses out there that seem to hit it out of the park. And not only are they successful, but they are actually in a position to decide with whom they’ll do business.

What makes businesses like that different? What’s their “secret sauce?”

One of the biggest challenges businesses have is differentiation. Few of us operate in areas where there is no competition. And frankly, we often compete with other companies that aren’t all that different (at least on the surface) from us. How do you stand out from the crowd in a way that makes people beat a path to your door to do business with you?

Some companies try to compete on price. That almost never works as a long-term solution. There will always be somebody out there willing to offer what you offer for less. And clients who come to you based on price alone will leave you in a heartbeat for someone who charges less. You can’t develop loyalty with price. So what can you do?

Start with a close look at your core competencies. What are the three or four things your company does really well? What are the things for which you consistently get positive feedback from existing clients? Write them down. Then think about how you can do them better and differently than anybody else. What can you do that nobody else is doing (or in a way that nobody else is doing it)?

If you’re in a B2B environment, what can you deliver that will give your clients a competitive advantage? If you’re in a B2C environment, what can you do to make your clients’ experience better than it is with any of your competitors? What we’re really talking about here is innovation.

FedEx certainly wasn’t the only company in the package delivery business. But they took their core competencies and developed an innovative approach to their business that left competitors in the dust.

Apple definitely wasn’t the only company making computers and software. And they came dangerously close to becoming irrelevant. But they took their core competencies and with their innovation completely changed the computing industry, the music industry, and even the cell phone industry.

You may not be the next FedEx. You may not change whole industries like Apple. But you don’t have to be a “me-too” company. What do you do really well? How can you take what you do well and add your “secret sauce” to it so that you deliver something nobody else delivers?

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Since childhood we’ve heard that “the early bird gets the worm.” The implication for business seems pretty obvious: The first company into the market gets the lion’s share of the business. The early adopter of new technology gets a competitive advantage over his competitors. Without question, there are industries in which those who lag behind soon find themselves out of the running altogether.

Being the early bird in business, however, isn’t a guarantee for success. And it’s not without risk. As a matter of fact, being first can sometimes be a costly proposition. Perhaps that’s why some clever soul updated the old adage to read: “The early bird may get the worm, but the second mouse gets the cheese.”

Sometimes being the first to try a new technology or being the first to enter a new market means that you may run into problems that no one has faced before. You may find yourself making mistakes that no one has made before. And you may face consequences that nobody has foreseen.

That’s not necessarily a bad thing. Some entrepreneurial types thrive on those kinds of challenges. Some businesses are nimble enough to adapt quickly to the challenges and opportunities that come with being first.

On the other hand, there are leaders who risk far too much at the altar of “What’s New.” They are a little too quick to adopt a new technology—simply because it’s new, rather than because it’s the best solution for their business. They are a little too quick to pursue a new market—in an attempt to capture market share, rather than because it’s a well-defined niche they can fill well—and profitably.

Businesses today need to be agile. They need to be adaptable. They need to be ready to change methods and technologies and practices—because the marketplace is constantly changing. And sometimes, some companies need to be first.

Being first, however, simply to be first, isn’t a great goal. If it fits your overall strategy, it may be the right thing to do. But just because something is new doesn’t necessarily make it better. That’s why you do strategic planning and it’s why you review your strategic plans regularly: so that when new opportunities arise, you can evaluate them in terms of your well-thought-out goals and objectives. If a new technology or a new market aligns with those goals and objectives, great!

Being an early bird can bring some significant rewards, but there’s no glory in being the first mouse.

How do you evaluate whether or not to pursue new technologies and opportunities?

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