Rose Matlock Consulting

Perhaps you are better at controlling your more seedy television viewing habits…no, not those!  Reality television. Yes, the soul sucking, script destroying, margin protecting mess that reality TV is, has become a known habit in the Matlock household.  Truth be told, it started with the wife but has now become a frequent habit for us both.  She’s watching the drama…but I am looking for lessons and business ideas.  Really Chris?  Lessons?  In reality TV?

Frankly, lessons and general principles are easier to learn in an exaggerated environment.  Often case studies in business school play up this fact by including over the top details that make it easier to learn a new concept or Read the rest of this entry »

Christmas and New Years are almost here and that means 2010 will be so close behind.  To win, leaders, managers and business’ will need fresh thinking, new ideas and a commitment to look anew at themselves and those they support to identify opportunities and make the most of them.

To help, Rose/Matlock Consulting (RMC) will be starting a  new series:

This will be a multi-part exploration of back to business basics, leadership insights and organizational breakthroughs to enrich your 2010.  Come along with us as we explore the fundamental behaviors of success for individuals and companies; we will also be looking at case studies and sharing experiences.  You will not want to miss a single one.  Make sure to subscribe to our RSS feed or look for a *new* newsletter and update subscription option soon!

Christopher Matlock, is available to train and speak with your group, management team or upcoming conference.  Email or call for rates and availability.

chris@rosematlock.com              

623-521-0875

     Two children visiting a petting zoo with their parents.  Both of them dutifully hold out their hands to receive snacks to feed the inquisitive goats, sheep, chickens and rabbits who roamed aimlessly around the pen.  What an idyllic scene, yes?  As the children entered the pen they each went their own direction.  The first little boy, followed closely by his mother, approached a goat and began to feed him single bites.  The goat eagerly took each one, softly nuzzling the young child.  Mother smiled and the boy was delighted.

     The second little boy strode valiantly towards a different goat.  He too offered up single bites and the goat took them.  However, for reasons that may never be clear, the goat grew impatient with the morseled approach and in his hasty move to grab the rest of the snack, bit the young boy drawing blood.  The young child screamed in shock more than agony.  The father rushed forward, pulling his son into his arms, quickly joined by mom, and they both reassured and soothed the boy, telling him he was safe now, the bad goat could not get to him anymore.  Read the rest of this entry »

Jim Collins, celebrated business professor, researcher, author and all around smart guy, published an article over 10 years ago that resonates deeply in today’s tight credit environment.  For those that know me, I have been talking for the last 12 months about how the change in the economy is not necessarily as intuitive as previous recessions.  We will be entering a period of lower credit availability.  In other words, there will be less money,  thus individuals and business’ will become much more picky about what they choose to buy or invest in. 

The takeaway for business is to think critically about what products and services they are putting into the market.  Are you targeting your most profitable client?  Is it a sustainable advantage?  What would happen if you had to re-price to the down side by 5%?  10%?  Worse yet, how about 50%?  Answers to these questions are best viewed use a blank sheet or Greenfield approach.  Collins, in building off this analysis advocated by management guru Peter Drucker, argues that you need to challenge yourself with what you might need to “un-plug”.  Companies and individuals simply cannot be all things, at all times to all people.  Attempting to do that or worse yet, failing to move on to the new expected product or service evolution can lead to irrelevance or failure in a blink of an eye.   

In a contrasting example, I watched one company grow from zero to $10 million in revenues almost overnight, based on the founder’s ability to create revolutionary products. Unfortunately, the company stalled out and was eventually acquired, because it never made the transition from being a company with an innovative founder to being an innovative company. The founder tried to solve the company’s problems by working extra hours on new products—in short, by more doing…he should have done less, which would have forced the company to become innovative independent of his genius. – Jim Collins

What do you need to un-plug from in 2010?  Given the chance to start from scratch, with what you know now…what would you do differently?  Do not be afraid of the answers because no one said the changes had to be implemented overnight but with reality based assessments here, you can build a rock solid implementation plan for the future..

One of my favorite conversations with people is the idea that just because something existed before, it must continue to exist in the future.  On the surface, it seems to make sense but under closer examination we can think of several examples that would prove otherwise.  Take for instance, your dinner you will have tonight.  Imagine a beautiful spread of steak, grilled vegetables, fresh piping hot bread and a lovely glass of wine.  Sounds delicious doesn’t it?  I bet it will look fantastic as well…

Of course, once you start eating it, the whole look and smell of the meal will be destroyed!  How dare you!  I want that meal preserved at all cost!  Obviously, this would be the ranting of an un-well man wouldn’t it?  Yet, many business’ and individuals engage in the exact same flaw in logic.  Sometimes referred to as “anchoring” or “focalism”, the logical error is the result of making a decision using only one piece of data, while typically ignoring newer, more relevant information.  Two stories this week brought me back to this:  Pepsi and Saab.  Soda and Cars?  Read on…

Pepsi announced this week that they will not be paying for advertising during the 2010 Super Bowl, the first time they will be not involved in 24 years.  Many in advertising are calling this madness.  Won’t Coca Cola gain an extraordinary advantage?  How can Pepsi survive…without the masculine frivolity that Super Bowl spot provide.  Simple – they have looked beyond the one fact most have focused on, namely they have had an ad for the last 24 years and instead are focusing on the future and other more relevant data points.  To begin with, Google News shows 347 articles just in the last 12 hours about Pepsi NOT advertising.  Jeez, that’s almost as good as having a spot but…it’s free!  More importantly, Pepsi is recognizing that while mega-brand halo advertising still has a place, it now has to share space with niche marketing, viral videos and social networking.  Each of these functions as a result of feeling like the viewer is in a small and unique group.  The Super Bowl is regularly promoted as one of the most viewed television events of the year.  How can one be special…if everyone saw it?  Good job Pepsi.

The second story that caught my attention was the announcement that Saab would be shut down by GM at year end after failing to attract the right buyout and financing offer from bidders.  The news has been met with dismay from many and lamented much as the loss of Saturn already announced earlier this year.  A careful analysis show that the retirement of these brands is not the result of failing to have credit liquidity or a freezing of M&A in the car market.  No, it is the inevitable outgrowth of consolidation in a capital heavy industry and perhaps just as an importantly…these were two brands that had simply not kept with the times.  In the late 80’s and early 90’s, Saab and Saturn were desirable cars (albeit by different groups) but those halcyon days of yore have been long since past.  Each new ad campaign by Saturn became more laughable as it tried valiantly to stay relevant and when was the last time anyone was truly yearning for a Saab?  No, the taste and desires of the next generation of car consumers have begun to move past these legacy brands and for the health of GM and really the industry as a whole, its time they became the content for the next Car & Driver review of great cars of the past.

Recently, I was reminded that sometimes the hardest part is the first step but that rewards in life only accumulate when you “put yourself out there”.

Here at RMC, we are launching a new service in 2010.  Do we have the skills for it?  Sure.  The experience needed to pull it off?  Yet, it is personally uncharted territory and while we have the talent needed, it will be a new application for it.  Over the last few months, I have been surprised and thankful time and again as I have mentioned some of these new goals and how others have offered their advice, support and encouragement.  I have come too realize, that a goal inside your head can quickly turn from joy to terror as you constantly ask yourself questions that have no answer.

Instead, share your ambitions; enroll others in your vision for the future.  A manager I once worked with said, “The bigger your vision, the more people that can come along”.  If that is true, then one could also say that the more people you bring along, the bigger your vision can become.  Dell computers may have started in a college dorm room but it certainly did not stay there.  Dave Hewlett and Bill Packard may have started in a garage but it certainly did not stay there.  A desire left unrevealed is one that will eventually suffocate.

As you look to 2010, ask yourself what dreams, ideas and aspirations you have that have gathered cobwebs in your mind.  Its time to dust them off and offer them the light of day.  Will they all hold up?  No.  Are they all meant to be the “big one”?  No.  However, it is from the ruins of our mistakes that the seeds of our success are sown.  Most importantly, the big goals require more than one person’s hard work but often the combined talent and drive of many.  How can someone else sign up to help create your dream if you haven’t shared it with them?

The latest issue of Nevada Business had an engaging article about the issue of business sale and disposition.  During our challenging business environment we find ourselves in, the already daunting process of defining retirement goals, identifying the best transition strategy and then deciding what’s next has been magnified.

James Newman, attorney at Holland and Hart and Howard Olson of M3 Planning lay out the most common ways closely held business’ are transitioned:

• Simply selling the business;
• Taking the company public
• Securing a strategic partner
• Merging with another company
• Transfer ownership to a family member
• Sell to employees or other owners
• Liquidate

Each of these approaches has their own benefits and risks and should be evaluated not just in a financial light but also an emotional.  True, some strategies will produce more payoff than others but it is how the owner and proprietor feels that often carries the most weight.  Is this business a function of many years of sweat equity, a reflection of the owner’s passion for many decades, perhaps a family name involved?  If any of these are true, merging or partnering may not be the best outcome as autonomy may be lost.  As Newman states:

It may sound odd, but when you plan your exit, it’s also important to know what kind of deal or deal terms you don’t want. This way if someone presents you with something you can’t live with, you can simply move on

On the other hand, if the business is more detached and has simply been a source of income, then going public, selling to others (family or not) or even liquidation might be just the trick.  As I said, the key to each of these is too evaluate not just the financial implications but the emotional ones as well.  One would be wise to also consider if they desire any ongoing involvement with the business as a manager, consultant or another position. 

At Rose Matlock Consulting, we recommend confronting the issues of business transition at least five years in advance.  This allows you and your team enough time to determine your ideal point of arrival (POA) in five years and begin to move your business processes, hiring, management and strategic planning into alignment.  Organizations that do this, not only lessen their own stress about change but also identify potential buyers as well. 

Are you looking for advice about how to prepare your company for your retirement?  Sale?  Or just reaching the next level? 

Call today at 623.521.0875 or email at chris@rosemaltock.com

Jim Collins, in his seminal business book, Good To Great, examines the defining characteristics of “great” companies.  For the purposes of his project (and a project it was, over 10,000 hours of research and 22 different graduate students over five years), a great company is one that had cumulative stock performance of at least 3 times the general markets for fifteen years.  It should also be noted that the company need to have a comparison company that was only “good” or achieved average stock performance.  Ultimately, Collins and his team were able to identify 11 companies that fit these characteristics.

When Collins and his team began to examine what behaviors or cultural mores supported this out performance, many themes emerged.  One of those, was the “hedgehog concept”.  The hedgehog concept is the nexus of three important questions that successful companies ask themselves:

1.  What are you deeply passionate about?
2. What can you be the best in the world at?
3. What drives your economic engine?

Collins uses a diagram to illustrate where these ideas intersect as seen below:

Collins and his team observed that companies who made the leap from good to great had invested significant time in examining, debating and identifying their hedgehog concept; an average of four years in fact! 

…if you have the right hedgehog concept and make decisions relentlessly consistent with it, you will create such momentum that your main problem will not be how to grow, but how not to grow too fast. – Jim Collins, p. 112

 How does this impact the small to medium sized business? Building a business often means becoming a master of many tasks , approaches and in a dynamic business environment, many types of products and experiences.  However, as Collins research shows, too many specialties is a recipe for just being good.  True market dominance is ultimately the result of a fanatical devotion to executing not just on a core competency but one that moves you into a market position you can uniquely dominate.

The last decade has had a steady supply of cheap money and as a result, consumers and businesses have had the luxury of not being very discriminating in their purchasing decisions.  Many product and service providers have been lulled into a false sense of assumptions about their offerings, blaming current performance on the recession at large and not a reflection of their own value proposition.  I would suggest that 2010 is not just an opportunity to manage margins better but also to correctly identify your hedgehog concept.  The pervasive lack of credit in the small to mid market means business’ will have to make smarter decisions and will put more pressure on supplier sot be best of breed.  That only happens when a companies’ resource (both people and product) are aligned behind the right actions.

What’s your hedgehog?  Call today to schedule team with our team to plot your path to market dominance in 2010.

623.521.0875

The Bureau of Labor Statistics announced today that US employers had only lost a net of 11,000 jobs in November.  This contrast with the 110,00 to 125,000 that economist had expected.  From coast to coast and CNBC to Fox Business Network shouts of joy were echoed.  It also happened that President Obama had a scheduled speech in Allentown, PA to discuss the issue of employment and what the federal government might be able to contribute to help the situation:

“The direction is clear,” Obama said. “When you think about how this year began … today’s report is a welcome sign that there are better days ahead.” – USA Today

So, have we turned the corner?  Is this now the fast track to better days ahead?  Can we all come out of our collective bunkers and resume our ways of prolific spending, consuming and unmitigated economic growth?  Not so fast…

What is being little reported is that in the month of November, 100,000 people STOPPED looking for work.  The tricky thing about employment statistics is they are comprised of multiple pieces of data.  It is not an issue of straight arithmetic but instead an ever changing universe of potential jobs, current jobs, seasonal work, etc.  In this case, the improvement in unemployment is largely a result of a small cities worth of people give up the fight to find new work.  How is that a good sign?  Millions more are only getting part-time employment when they desire fulltime.  Overall, 8 million people have lost their jobs in the last 18 months.

Over and over, we have been told that the US economy is a function of consumer behavior.  Nearly 70% of it in fact.  How can we have robust GDP growth in the future, if we maintain a 10% to 11% unemployment rate into the future?  Perhaps an even more salient issue is how can we continue to consume when much of the last decade’s growth was a result of cheap money and lax lending?  The economy does not rebound based on the stock market or asset bubbles.  Instead, real increases in productivity and employment are supposed to be the pre-cursor to a run up in asset prices.  Price refelct an increase in value and that is not what we have been witnessing for the last 6 months.

American business’ need to continue to stay conservative in planning for cash flow and inventory.  Focus on getting he most out of what you have, exploit opportunities in the market when they present themselves but do not be lured by the siren song of Wall Street right now and its predictions of a quick recovery.

Frederick “Fritz” Henderson, interim CEO of General Motors (GM) was let go this week.  Mr. Henderson had only been CEO for nine months but in reality he had been with GM for decades.  The entirety of his career (and even upbringing) was based around GM and its culture.  That it turns out…was exactly the problem.  To make real change, GM needs individuals who not only have the vision and determination for change but who have the perspective as well.

Perspective?  Surely Mr. Henderson had the perspective, right?  Actually…no.  Hell no in fact!  If a company wants to change it needs fresh ideas, new cultural experiences.  Someone who will shake things up and not be afraid of “sacred cows”.  It is for these reasons that sometimes an outside consulting firm makes so much sense for companies…regardless of size.  In fact, the smaller this firm, the more likely it is an outside perspective can help.

Business professor and writer Jim Collins in his book, “Good to Great”, identifies several principles that companies who make the break out leap embody.  One of those is the idea of “Getting the right people on the bus”.  In other words, before you have a grand plan…you need the right players because no matter how insightful one’s strategy is, if you lack the personnel to implement it, nothing will change.

GM’s Chairman, Ed Whitacre, Jr. and its biggest shareholder, the government, realized this and that is why Fritz Henderson has been asked to move on.  Companies and organizations are a careful balance between meeting the needs of the firm and its people.  In this case, Gm is doing what it can to accomplish both of these goals.  The continued leadership of Mr. Henderson was likely to end in the failure of the company, taking with him thousands of jobs.  perhaps with the right kind of outside perspective, GM’s workers and investors have a chance.