Pivots & The Importance of EQ

Through the chaos, I found clarity
— Steven Spielberg

Recently, I have written about the Pivots that businesses need to take - the so called "evolution" of business.  Every company faces it.  Pivots can lead to great and better outcomes than would have otherwise been yielded on a business-as-usual course.  But, there will also always be the skepticism of some members of your team and cynicism from former employees.  This day and age, those comments are no longer privately held between a supervisor and an employee - but, thoughts can manifest themselves onto public online forums or, more frequently, discussion topics at happy hour.  For a CEO, this can feel like a salt on a wound and be polarizing experience, which can further distance the CEO from the team. Guess what? That's a perfectly normal emotion to experience.  With a little help from the "EQ doctor", CEOs can overcome these issues and come out stronger for the experience.

So, what is EQ? Emotional Intelligence.  Most people have heard of IQ. But, EQ can be just as important.  Unlike IQ, EQ can get better over time.  With more and more experiences, you can become smarter and more skilled. Some say " experience is knowledge" - I subscribe to this philosophy.   

As an entrepreneur, if you are willing to learn, self-assess and self-correct then you are able to exponentially grow your EQ overtime.  I like to link this discussion to 'pivots' because that is the source of the heart-ache, pain and beginning point for future success.  

EQ is also what great Advisors offer to a CEO.  In my view, advisors are either technically savvy individuals or highly seasoned individuals who are further down the road of experience.  Sometimes, once in a blue moon, you will find someone who has both traits - experience and technical.  Focusing on the latter, Advisors can help you understand the likely outcome of your decision or at least share potential implications.  They can also help calm your nerves with their own experiences and let you know you are not alone - after all, as stated (many times), being a CEO is a lonely job.

If you haven't already, read 'Emotional Intelligence 2.0' by Travis Bradberry and Jean Greaves.

Managing a Pivot

Over the past eight years, I've learned a lot about managing 'pivots'. In my definition, 'Pivots' are directional business changes that are calculated, but necessary in order to sustain the business in the short- and long-run.  Pivots are needed to protect and grow the business and ensure financial health (profitability, cash flow & liquidity) among many other reasons.  The risks that come with Pivots can be monumental - particularly on the employment front.   A seasoned CEO will go through many Pivots over the course of her career.

In 2017, my business's model shifted it's entire 'go-to-market' sales model - we had a significant Pivot.  Our entire Company was build around an antiquated sales model and need a significant directional shift. When I presented to the Company, the 'Why' was very easy to explain - the cost of customer acquisition was so expensive that each sale was loss-making.  The math was easy to understand, but the hard part came in explaining it to the team (a term I use to refer to employees) that many of them and their colleagues were not part of the new Company (i.e. post-Pivot).  

Having dealt with Pivots before, I decided the best approach was to be upfront and transparent about the situation - hoping that the team would appreciate it and maintain a high-level of trust and confidence. The key word being 'Trust'.

So, I decided to present the company financials to everyone in the company - a rarely practiced activity for privately held companies.  I knew it would be a 'shock and awe' for many in the Company, but everyone needed to know what I knew - they also needed to understand 'why' I was about to make the adjustments I was going to.  Every week for 4 months (16 weeks) straight, I stood in front of the team and shared our financial health and how our 'go-to-market' was going to change.  The business model had to shift and, as a team, we had to Pivot.

After 4 months, the Company did a solid turn-around.  The hardest part was 'right-sizing' the business.  It sounds easy, but it's not.  Typically pivots take place and CEOs take on a 'war-time' mentality - meaning, preserve the Company for the long-term and deal with the after-math later.  All the greats - Phil Knight, Steve Jobs and Bill Gates - have had numerous similar experiences during the ups-and-downs of their businesses - primarily in the early years of building their companies.  When I re-read many of their biographies during the 'pivot' period, I was looking for inspiration and guidance - what can I gleam from to know I'm not alone. Surely, I'm not the only CEO to go through a Pivot and deal with the employee front. To me, it felt personal - especially from those who didn't make the cut as part of the new Company.  Staff that had been with the Company for years were no longer relevant for the new business.  A pivot makes a CEO think through what does the new Company's business model look like? and what is relevant from the old Company's business model. Generally speaking, not everyone is part of the new, 'go forward' business model.

I felt it was important to share this true-ism as a CEO.  It's a lot of sleepless nights and wondering if you did the right thing.  Only time will tell and keeping perspective on the big picture and long-term is critical to forging ahead.  It always comes back to how passionate are you about your business? If you aren't that passionate, the Pivots are going to be that much harder.

Celebrating Failures

Why did I include Failures a topic in my blog? I do it because I celebrate my failures.

At Palmetto, a core strength of our Company is to celebrate our failures. It's an important aspect of our culture - without failures we will never learn what is success. Overtime, our Company has become more and more resilient to failures - our team can handle the headwinds and so can our financial status.  But, it wasn't always that way.

Reflect on failure and learn from it.

Reflect on failure and learn from it.

I used to shy away from failures. I used to secretly write down all of my failures on a yellow sticky note on my Apple laptop (still use the same one).  Today with 118 failures written down, I believe that I have plenty to share.  Only in the case whereby I made the same failure more than once, am I upset with myself.  in those cases, I should have sought help - because in those cases the situation was beyond my own control and/or capability of control.

As I build out my failures and lessons - I hope that it can inspire or comfort others that have shared a similar struggle. Perhaps your 'struggle' is in the past, is in the present or is anticipated - but, rest assured, you are not alone.  With that, you can find comfort and understanding. For these reasons, I believe that failures are important to share.  

Are you prepared to become a 'Manager'?

In building a company from the ground-up, I understand what it means to manage payroll, start a website, manage people and pay invoices.  I also know what it means to manage time, organize myself and understand my impact on others.  In building a company, these are all things I take for granted when a new person joins our Company.  With these experiences, I keep grounded and humbled. 

My best advice to emerging managers is “Self-Manage, First” – essentially, this means – you can only train others where you personally have experience.  Do you have any of the following experiences?

  • How to hire?

  • How to terminate?

  • How to conduct employee reviews?

  • How to manage time and prioritize?

  • How to manage tough and difficult conversations?

If you are a manager and unable to say “YES” to all the above then you are not ready to teach others. First, you need to go through the experiences. Then, thereafter, you need to repeat those experiences until you understand those experiences and can teach others. Then, and only then, can you truly teach someone else. 

Most of the failures that I see in management is attributed to individuals wishing to accelerate within our organization too quickly and beyond their capabilities.  My recommendation is “Self-Manage, First”

Leadership Teams

Building A Leadership Team

With a leadership team, you don’t have to stand alone.

With a leadership team, you don’t have to stand alone.

Building a leadership team is the most important task for a CEO. "Leadership" (as it's referred to in 'shorthand') is a small group of people of the most senior leaders in an organization. Leadership is responsible for setting the strategy, culture and foundation for the entire Company. One important thing about Leadership is its nimbleness - as a group, it needs to be able to 'pivot' quickly and deal with quickly emerging, complex issues.  

Communication

At Palmetto, our Leadership Council is like a musical band - each person plays a uniquely different role and all members have an equal voice in the discussion; in similar fashion, all members are responsible for the outcome and direction of the Company.  

An important trait of a Leadership Council is the outward willingness to connect with the entire team. We promote communication between any leadership council member and any team member (regardless of reporting lines) to discuss anything about the life, work, ambitions, etc. As transparency is part of our corporate value system, the Leadership Council takes on an important meaning in delivering on our values. Collectively, we are responsible for the team.

Responsibilities

Leadership Council has other responsibilities as well - it meets as frequently as once a week to discuss a wide range of issues (strategy, market circumstances, opportunities, threats, culture issues, etc.) related to the growth and pulse of the Company.  Meetings are focused on a detailed agenda set by the Council Chairman, who drives the agenda and helps manage a balanced discussion. At the conclusion of said meetings, deliverables are assigned to individuals with a deadline - thus, holding all members accountable.

Privilege, not a right

Leadership is a privilege, not a right.  Individuals who perfect their skill sets tend to seek additional challenges and, therefore, move upward into junior management and, then, senior management roles.  Thereafter, Leadership roles are available for those who perfect each level of the growth within the organization. Leadership is something to strive towards, but requires management prerequisite skills.