Strategic Execution for Today's Executives

Comments by Dave Mathisen, The Virnoche-Frigon Group, a Merrill Lynch Company david_mathisen@ml.com

Inability to perceive the real threat –
An unwillingness to change the plan to adapt to new developments –
Inexplicable failure by those at a critical point to take action without being told to do so –

Do these descriptions characterize any organizations you have been a part of? What would you do if they did?

The Army’s National Training Center, in the deserts of Southern California (only a few miles from Death Valley), is home to some of the most severe and honest critics of tactics and unit performance in the world. Sunburned and leathery from spending countless days and nights in open hmmwv’s bouncing across the desert floor and the arid ridges observing battalion after battalion confronting an experienced enemy in intense force-on-force exercises, these “observer-controllers” have names like “Scorpion Team,” “Tarantulas,” and “Sidewinder Zero-Seven.” They compile “trends” describing negative patterns that they see over and over again, so that tactical commanders can benefit from a long-term perspective and address known issues that are critical to success in the fluid and hostile environment of the battlefield. One of the trends they identified and began outlining in the early 1990s included the shortcomings at the top of this page. If those sound at all familiar to you, then you may appreciate the paradigm that tactical commanders use in the fluid environment of combat and training for combat.

The parallels between the challenges the Army trains for and the challenges a business faces are striking: both require individuals and groups to navigate rapidly changing environments, making decisions with imperfect information, for extremely high stakes. Some of the systems and techniques that evolved over several years out of the intense pressure of the Army’s most realistic training may have applications that go far beyond the barren deserts of California.

One of the paradigms I learned in the military that I think has an incredible amount of utility not only in tactics but also in business in Silicon Valley and beyond is the concept of “Situational Awareness” – having a true picture of the situation (your own unit, the terrain, and the enemy). The concept itself is not a new one, but the ability to have it is so rare that those who develop it to a high degree are often described as having an extra sense (such as Napoleon’s “coup d’oeil” – the “strike of the eye” – or Rommel’s “fingerspitzengefuhl” – “fingertip-feel” for the battlefield). What systems of techniques exist to heighten this ability in ourselves, those we lead in business, and in companies themselves?

Applications of the battlefield concept of Situational Awareness to the business world are virtually unlimited. For example, a company might perceive its major competition to be coming from one source, and be completely surprised by competition that comes from an entirely different technology. Agreement on the true situation is rare: within any group or organization (or market), there will be individuals who believe the situation to be completely the opposite from one another.

· The Department of Justice, for example, might argue that a potential merger between two telecom players could create a monopoly situation, when in fact technology has created alternative business models that threaten the very existence of both of the merging players.
· At $80 per share, some informed market participants will argue that the price of Technology Company X is a terrific bargain, because the company will probably grow earnings by at least 35% per year for the next three years, while other observers will argue that $80 is the best time to get out of the stock, because the real future growth is probably going to slow to 10%, and is further threatened by some political factor that makes the true situation even more hazardous to the company’s business model.
· If you are leading a sales team, your correct vision of the true situation regarding the power structure at a new customer company could lead to success, if you have correctly perceived the situation and taken appropriate action, while failing to perceive the correct situation could result in an unexpected disaster.

On Thursday July 27 from 11:30 a.m. - 2:00 p.m., Dave Mathisen will be facilitating a conversation on 'Strategic Execution for Today's Executives' incorporating concepts about situational awareness developed through his extensive training in the army. To register, visit
http://www.acteva.com/booking.cfm?bevaid=104181.

For more information, visit http://www.FountainBlue.biz.

An Exit Strategy for the Rest of Us

An Exit Strategy for the Rest of Us, by Mike Jones, Managing Director with Onyx Associates mikejones@onyxassociates.com.

We’ve all heard the mouth-watering stories of the entrepreneurial dream. A fledgling startup gets acquired by a large tech company for an astounding sum of money. Yahoo acquires Flickr for a rumored $30 to $35 million. Ebay acquires Skype for $2.6 billion.

If you are an entrepreneur or executive with a burning ambition to sell your company and become a legend, by all means, go for it.

But let’s face it, such largesse is not available to everyone. Home run hitters will need a hot technology that stands to make orders-of-magnitude advancements over the status quo. The potential market for your solution needs to be enormous and growing. Customers will gladly purchase your product frequently and repeatedly. Even with all of that, the odds are stacked against achieving a dream buy out deal. And IPO’s certainly aren’t for everyone.

So what about the rest of us? There are loads of solid technology companies with marketable products that solve genuine problems, and (gasp) make good money doing so!

If your company falls into this category, I offer some sage advice for preparing for the eventual sale of your company.

A wise deal maker once told me, “The best thing a business owner can do to prepare to sell a company is continue to run the business the best they can.” Strive to become a dominate force in your market. And don’t forget the fundamentals: Increase sales, manage expenses, and improve the customer experience.

Here are some examples for your M&A toolbox:

* Pursue moves that strengthen your core business. Eliminate unprofitable products or lines of business.
* Raise Prices (thoughtfully): Small increases in product price can result in large increases in business value.
* Reduce labor (thoughtfully): Take advantage of lower cost global resources when it makes sense.
* Manage your IP carefully: The last thing a buyer wants is to find out you are selling something you don’t own! Consider open source code - make sure you can document your rights and obligations.
* Eliminate unnecessary expenditures or over-generous benefits: Do you really need that Gulfstream?
* Take action to realize the value of unrelated businesses or under-utilized assets, before the sale! A buyer of your company won’t pay for them, but someone else might.
* Invest in management. Tie in key employees and provide performance incentives.
* Improve key business processes. Help your employees do their jobs better, faster and cheaper.
* Review accounting policies. Buyers, especially public companies, expect your books to be air tight.

Any surprises on this list? Hopefully not. But as any entrepreneur will tell you, the devil is in the details. And execution is easier said than done.

Want to discuss the topic of mergers and acquisitions in more detail? I invite you to contact me at mikejones@onyxassociates.com.

I also invite you to attend FountainBlue's Connections event, Successful Mergers & Acquisitions: What Does It Take? on Friday, July 21, from 11:30 a.m. - 1:30 p.m. at Fenwick & West LLP in Mountain View. I’ll be facilitating a panel of expert deal makers:

* Ken Gonzalez, VP Corporate Development, McAfee
* Andrew Luh, Partner, Mergers & Acquisitions Group, Fenwick & West
* Dave Petroni, Advisor to Valchemy, Inc., former VP Corporate Development, PeopleSoft
* Frank Young, Private Equity Investor and CEO, PsPrint.com

To register, visit http://www.acteva.com/booking.cfm?bevaid=104706.

Mike Jones is a Managing Director with Onyx Associates, a mergers and acquisitions services firm. You can visit the Onyx website at www.onyxassociates.com.

For more information about FountainBlue, visit http://www.FountainBlue.biz.

Empowering Others

In my leadership and management experience, I've run across two major types of leaders: those who believe in empowering others who work with you, for you and around you, and those who are less empowering and collaborative and often think that he/she must lead alone.

It does take a confident leader to bring out the best in others, to leverage the strength of those around them, and to keep a razor-like focus on the goal at hand while remaining fluid on how objectives are achieved, and rallying key stakeholders and other advocates around the common cause.

There is little doubt that in today's increasingly interconnected and global economy, the collaborative and empowering leader is better positioned for success. Factors such as the increased pace of the business world, the diversification of the workforce, and the intricacies and complexities of today's business and technology challenges will continue to favor the collaborative and empowering leader.

But if you agree that becoming more collaborative and empowering as a leader is the right thing to do, ask yourself some questions:

1. How good are you at empowering those around you?
2. Who has empowered you to reach your current level of achievement and how did he/she do so?
3. When you lead, how will you strike a balance between empowering, guiding and supporting those you work with in order: to give others confidence and respect, to collaboratively leverage the team's influence and strengths and to challenge the whole team to reach for the next level of excellence?
4. What specific steps can you take to improve?

I invite you to share your stories about empowering others in the business context through this blog or through e-mail to info@FountainBlue.biz.

I also invite you to attend FountainBlue's next "When She Speaks" Women in Leadership Series which is on the topic of Empowering Others and features Sally Pera of PeraConnect as the facilitator, and Ysabel Duron of KRON and Cindy Padnos of Outlook Ventures as panelists. Sally, Ysabel and Cindy will share their perspectives and insights on Empowering Others as well as their words of advice.

The event is scheduled for Friday, July 14 from 11:30 a.m. - 1:30 p.m. at UCSC Extension in Cupertino on Bubb Road. To register, visit http://www.acteva.com/booking.cfm?bevaid=110444.