Stephen H Baum Leadership

You can learn a lot from Jim Blasingame, from his expertise in small business and from his many guests on smallbusinessadvocate.com. And I enjoy staying in touch with him. From this morning’s conversation:

1. VISTAGE MEMBER OUTLOOK

In Q4 2009, the business owners in our group emerged from their two year siege of battening down the hatches and opened the spigot a little. Just a little. And for bargains and truffles – bargains are more and better of what we have at advantaged prices, truffles are new assets you have to dig for and on which to feed and grow strong.

With “survival is victory” as a compelling idea, our CEOs began in Fall of 2007 to reduce operating capacity by 50%, cut G&A to the bone, renegotiated every commitment, moved jobs to India and elsewhere and counseled out the underperformers. The only spending we saw was hiring of additional sales people to grab share and to seize clearly profitable opportunities left by the faint of heart and hiring of additional account managers to make sure every valued client was “touched.” They used the period to get fiscally fit.

In Q4 of 2009 and continuing into Q1 of 2010, we began to see our members make acquisitions of small companies who had not been so prescient and at heavily discounted prices, replace key officers with stronger people, spend a bit of money to capture new revenue and cash streams, begin plans to take businesses and parts of businesses public or to strategic buyers. One member, a restaurant group owner with great value propositions inked highly favorable contracts to build a new, very large destination in the nation’s capitol that will open this Spring or Summer. All through the siege, one member continually bought and hired core assets for completely new business units in green energy, clean coal and specialty materials. Another spent the research dollars to develop a brand new investment product and has been enlisting reference clients for its launch. With February and March showing profits well ahead of last year, the mood is considerably more optimistic although they are not rebuilding capacity to prior levels. Bargains and truffles are still on the menu.

2. SOCIAL MEDIA

If you are over, say, 15, you were born without a Twitter implant and cannot report to everyone you know your every thought and activity by twitching your nose. But if you own a business, you had better get on top of social media, both defensively and offensively. In fact, you had better put someone in charge of social media who gets it. Here’s why:

Your company could be liable if your employees are accused of putting misleading information about the company and its products or clients or competitors on Twitter or Facebook or LinkedIn or other social media. Your company could be vulnerable to competitors (and suppliers) who use social media to learn all about you: whom you hire, whom you fire or who left you, with whom your salespeople met and more. Your people need to know what NOT to put on the net and how to protect their lists.

On the upside, your company could amplify its marketing budget if everyone in the company knew how to take advantage of the target marketing and viral marketing that is social media. Looking to connect with someone in a prospective client/customer company? It is a lot easier if twenty of your people are on LinkedIn and examine whom they know who knows people at the prospect. And if the people they know are willing to make a friendly “warm” introduction, barriers can fall and wasting of time can be avoided.

One of our Vistage Chairs, Mark Taylor, who has his own owners group gave a workshop in which he visited only a few of the 50 ways that social media can be used for recruiting, marketing, outsourcing and more. Of special interest is his approach to estimating the ROI of spending money on social media like Twitter and LinkedIn. More on that in another post.

What is surprising are the sheer numbers of Fortune 500 companies represented in social media (all!), the number of individual members (LinkedIn has 60mm in 00’s of countries).

Social media will be seen in future years as common as the way we have come to see our blackberry and iPhone.

3. MICROMANAGING

I have one CEO client who has been successful at several points in his career by being the smartest guy in the room. He usually is. Really. But he has used it to grill and drill in almost every encounter with his direct reports, often telling them what to do and how to do it. And he is not alone in this behavior among my clients over the past few years. One female client never had time to lead her team because she was so busy doing their jobs. Instead of being CEO, she was acting manager of each function.

This behavior may produce incrementally better short-term results, but it has big downsides. For one, nobody enjoys working for a boss this way. It can lead to defections of good people and it can breed an awful culture as it trickles downward in the organization. For another, the time invested by the boss in this way is unavailable for problems and opportunities that only the CEO can figure out and far less available for important external contacts. But many business owners and CEOs exhibit this behavior. They don’t know how to get out of the cycle. And in 2010 and 2011 it will be pivotal to get your team to step up.

We have been working on this subject with these tools:

– Thought experiments – e.g., play out in your mind the next 1-2-1 scheduled with a direct report; examine the risk of putting the burden on the other person of creating the agenda, making the case, doing the “deep dive” of tough, detailed questions. Can you do it? Can you live with less than perfect performance as they learn if the situations are not bet the ranch?

– Field experiments – try in real time small departures from the way you usually “show up:” just before the meeting, ask what you want the other person to feel after the meeting? Is this an opportunity for them to grow or just to make sure a specific act gets done right? Get them to show and stretch their own thinking and judgment.

Our initial focus is to get the boss to do these experiments to satisfy himself or herself that the risk is worth taking and to set new expectations all around. Our next focus is on getting direct reports to try the same tools themselves as they oversee the next level. Over a year, people begin to see the opportunity in viewing others as human beings with unique strengths and an appetite to grow rather than as replaceable “factory” units.

That’s just my view. What’s yours? Be sure to visit Forbes.com, click on entrepreneurs and look for Jim Blasingame for all his interviews and insights!

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