Tuesday, December 21, 2010

For leaders: balancing care with candor

By John C Maxwell

Every person makes mistakes at some time in the workplace. Everyone needs someone to come alongside them to help them improve. If you’re a leader, it is your responsibility and your privilege to be the person who helps them get better. That often begins with a candid conversation. But before you have it, it helps to ask yourself what the nature of the problem might be.

My friend Sam Chand says that when he is having difficulty with a person he asks himself one simple question, “Is this person a can’t or a won’t? Can’t is about abilities. We can help these kinds of people in most cases—not in all cases, but in most. But won’t is about attitude. If the issue is attitude, the time to let that person know there is a problem is now, because here is the deal: we hire people for what they know and fire them for who they are.”

I believe that people can improve their attitudes and their abilities. And because I do, I talk to them about where they’re coming up short. If you’re a leader and you want to help people, you need to be willing to have those tough conversations. So how does a leader handle being relational while still trying to move people forward? By balancing care and candor.

           Care without candor creates dysfunctional relationships.

           Candor without care creates distant relationships.

           But care balanced with candor creates developing relationships.


Here is how care and candor work together in leadership:

Caring Values The Person While Candor Values The Person’s Potential

To lead successfully, it is important for you to value people. That is foundational to solid relationships. Caring for others demonstrates that you value them. However, if you want to help them get better, you have to be honest about where they need to improve. That shows that you value the person’s potential, and requires candor.

If you’re candid with someone but with their benefit in mind, it doesn’t have to be harmful. It can be similar to the work of a surgeon. It may hurt, but it shouldn’t harm. As a leader, you must be willing and able to do that. If not, you won’t be able to help your people grow and change.

Caring Establishes The Relationship While Candor Expands The Relationship

The things that usually help to establish a relationship are common ground and care. But those things usually aren’t enough to make a relationship grow. To expand a relationship, candor and open communication are required.

Most leaders I talk to have a difficult conversation that they know they need to have but are avoiding. Usually they are reluctant for one of two reasons: either they don’t like confrontation, or they fear that they will hurt the person they need to talk to. But if a leader can balance care and candor, and the follower responds with grace and willingness to grow, it will actually deepen and strengthen the relationship.

Caring Defines The Relationship While Candor Directs The Relationship

Solid relationships are defined by how people care about one another. But just because people care about one another doesn’t mean that they are going anywhere together. Getting the team moving together to accomplish a goal is the responsibility of the leader, and that often requires candor. My friend, Colin Sewell, owner of several auto dealerships, said to me, “Leaders have to make the best decisions for the largest group of people. Therefore, leaders give up the right to cater to an individual if it hurts the team or the organization.” If you want to lead people well, you need to be willing to direct them candidly.

Caring Should Never Suppress Candor While Candor Should Never Displace Caring

The bottom line, which has already become very clear, is that good leaders must embrace both care and candor. You can’t ignore either. So to help you strive to keep the balance between the two, I’ve created a caring candor checklist for working with people. Before having a candid conversation, make sure that you can answer yes to the following questions:
  • Have I invested in the relationship enough to be candid with them?
  • Do I truly value them as people?
  • Am I sure this is their issue and not mine?
  • Am I sure I’m not speaking up because I feel threatened?
  • Is the issue more important than the relationship?
  • Does this conversation clearly serve their interests and not just mine?
  • Am I willing to invest time and energy to help them change?
  • Am I willing to show them how to do something, not just say what’s wrong?
  • Am I willing and able to set clear, specific expectations?
 
If you can answer yes to all of these questions, then your motives are probably right and you have a good chance of being able to communicate effectively.

As a young leader, I found it very difficult to have candid conversations with people. I often postponed those difficult talks, hoping that an issue would go away. Seldom did that happen. Maybe you relate to that. If so, you’ll be glad to hear that you’re normal. However, you need to know that candid conversations are a leader’s responsibility and must be done—but in the right way with the right attitude. When an employee is hired to get a certain job done and doesn’t, that hurts the team and the organization. And it’s then time for the leader to take action. That can be very hard; but in the long term, it’s best not only for the organization, but also for the person who needs to hear what’s not going right. If your goal is to help the individual, improve the team, and fulfill the vision of the organization, then this is the path you should follow as a leader.

Adapted from my upcoming book, The Five Levels of Leadership (October 2011)
 
John C Maxwell

Wednesday, December 15, 2010

The distance between ordinary & extraordinary is shorter than you think!

By John C Maxwell

What do you think of when I say the word “ordinary?” These are the words that come to my mind: Common. Usual. Normal. Boring. Average. Something you see everyday.

What about “extraordinary?” I think of: Amazing. Incredible. Uncommon. Unusual. Special. Above average. New.

In the English language, only five little letters separate “ordinary” from “extraordinary:” extra. And while “extra” can be defined as “outside,” in English it also means “just a little bit more.”

The word we use is not as important as the idea: the distance between ordinary and extraordinary is shorter than you think. For too long, people have thought there was a huge gap between normal and special. They’ve assumed that “above average” was far above “average.” Unfortunately, once you believe that, it’s easy to conclude that since you’re “average,” you’ll never be anything else; that there’s no way to claw your way up to “above average.”

I’m here to tell you that you’ve made the gap too wide. Let me illustrate. If you’re an average reader, you’ve taken 2-3 seconds to read this paragraph so far. Two lines of text = one second. How much more would you be able to read in another second? Another line? Not very much, but really, what difference does a second make?

Well, in some areas of life, a second makes all the difference in the world. Have you heard of Usain Bolt? Often referred to as The Fastest Man in the World, Bolt is the current world-record holder for the 100-meter race in track and field. His record for that race is 9.69 seconds. In the Olympics, he won the gold medal racing against seven other men in the finals. What was the time difference between his time and that of the silver medalist, Richard Thompson? Thompson ran the 100 meters that day in 9.89 seconds. The difference between gold and silver was .2 seconds. The “fastest man in the world,” the winner of that race and world-record holder, ran 100 meters in 2/10 of a second less than his nearest competitor. A second – or even a fraction of a second – CAN make a huge difference.

In life, just as in sports, an extraordinary performance is often separated from an ordinary one by the slightest of margins. What if your ordinary life could become extraordinary with only the smallest of changes? Would it be worth trying?

Here are some “extras” that can help you close the gap between ordinary and extraordinary:

A little extra effort. There is a price to be paid for achievement. Sometimes it’s a large price. But sometimes just a little extra effort can yield significant results. What price are you willing to pay for success?

A little extra time. To give something time, we need something other than perseverance. We need patience with the process of growth. I believe that many of us overestimate events and underestimate the process. But we’ve got it all wrong. As I wrote in the Law of Process in The 21 Irrefutable Laws of Leadership, leaders develop daily, not in a day.

A little extra help. I love this saying: “If you see a turtle on top of a fence post, you know he had help getting there!” Why do I love it? Because I’m a turtle on a fencepost. I know that I didn’t get to where I am in life on my own. I’m just not that smart, gifted, or fast. The truth is that those who reached “extraordinary” had help getting there. And many types of success can only be achieved with help. If you refuse to ask for – or accept – it, you limit yourself and your work to a lower level of achievement.

Remember that ordinary and extraordinary are not far apart. If you accomplish just one of the above “extras,” your work will begin to be above average in that area.

If Ordinary People …

              Gave a Little Extra Effort,

              Spent a Little Extra Time,

              Sought a Little Extra Help …

                          They Would Become Extraordinary!

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Sunday, December 12, 2010

Top 5 funding mistakes by entrepreneurs – By Adam Hoeksema

– Adam Hoeksema is the founder and CEO of startup consultancy firm Executive Plan This article appeared on Under30CEO. The views expressed are his own. –

For most entrepreneurs these days, funding is nearly impossible to come by.

According to the report titled, “Important Things for Entrepreneurs to Know about Angel Investors” and distributed by the Angel Capital Education Foundation, only 1 to 4 percent of applicants successfully raise angel investment capital. So before you ruin your chance at securing investors, make sure you have not committed any of the following deadly mistakes.

1. Wait until you need it. So many entrepreneurs make the mistake of waiting until they need the capital “tomorrow” to begin the process of seeking funding. Make no mistake about it, the process of raising capital can take months and months. Even a simple loan will require enough paperwork to kill a small tree. Ironically bankers and investors are more likely to provide you with additional capital when you don’t need it. So don’t wait until you have an immediate need to begin the funding process.

2. Submit a full business plan. Another great way to get your funding application thrown in the trash is to submit an unsolicited, full business plan. An investor or banker is not going to waste two hours to read through an entire business plan with your initial funding request. Submit a short executive summary, then if you are asked to submit a full business plan – great. Just don’t start with your business plan.

3. Claim “conservative” projections. It can be a major turn off to some investors and bankers when you call your financial projections “conservative.” Of course you think your projections are conservative, but the fact of the matter is that many, if not most, businesses fail within a few years of launch. If every entrepreneur’s projections were truly conservative, then why are so many small businesses unsuccessful at reaching their projections? Don’t let yourself sound ignorant. Simply state your projections and let the bankers or investors make their own judgment.

4. No next step. Maybe you get a chance to submit an executive summary to a potential investor or even recite an elevator pitch to an interested banker. This is a golden opportunity that can be worthless if you fail to outline a clear next step. For instance, in your executive summary you should request a meeting or a phone call as a clear next step. If you simply end your elevator pitch without a clear next step, your audience will quickly forget your funding needs.

5. No follow up. Don’t just assume that a potential investor will follow up with you if they are interested. They may want to gauge your commitment by waiting for you to follow up. Give the investor a couple of days to review your executive summary, but make sure to follow up before you fall of their radar screen.

Keep these potential deal breakers in the forefront of your mind as you begin the funding process for your small business.

Courtesy: Reuters Blogs

Friday, December 10, 2010

The Art of Social Entrepreneurship

By DIANA MIDDLETON

Since Jerome Engel joined University of California at Berkeley's Haas School of Business in 1991, the entrepreneurship expert has seen social entrepreneurship evolve into an increasingly attractive prospect for students. These kind of ventures aim to pair profits with societal impact. Lately, says Mr. Engel, who now chairs the New Venture Creation and Venture Capital Program at the school, the school has seen more students participating in social entrepreneurship competitions and enrolling in classes on the topic. Mr. Engel spoke with Wall Street Journal reporter Diana Middleton about why social entrepreneurship is snagging the attention of M.B.A. students – and what schools can do to help them do it well. Edited excerpts follow.

Q: How did social entrepreneurship take off at the school?

A: It all started about 10 years ago. A student asked me about social enterprise, and I said, "The non-profit center is down the hallway." But what the student wanted was a for-profit business that also had a social mission. From there, the leadership and initiative came from the students

Q: How are the social entrepreneurship classes structured? 


A: We have courses that are focused on the topic, but we don't do 'how-to's.' We don't say exactly how to do it. Our classes are more about strategy and finding a worthy purpose. We engage students by showing them how they can use the capitalist model in a powerful way by allocating resources to solve local problems. And we show how to measure that social contribution in a legitimate way.

Q: Is there any evidence to show that consumers or investors will respond to for-profit companies with a social mission? 


A: Customers pay a higher price for a product that has higher personal value, or perceived value. People tend to use their economic power to illustrate personal choices, and people are connecting with doing good. People are increasingly associating their personal values in personal investments. That's because the value we receive isn't just the product, but the intangible. Look at bottled water. There was a product that had no differentiation, but it was sold at different price points based on intangible desires from the consumer. Of course, bottled water is frowned upon right around now.

Q: Is social entrepreneurship benefiting from a level of "trendiness" right now? 


A: There may be a superficial percentage who think it's stylish to care, but the bulk of consumers are substantive. It's important that social enterprises aren't just public relations stunts. People have values, and they want to link those to their identity. Capitalistic ventures that do social entrepreneurship well can deliver a good product while building up a bank account of good will.

Q: Aside from classes, what are other ways Berkeley students get involved? 


A: In partnership with several other schools, we also offer the Global Social Venture Competition. Students come together with real socially-minded projects they are going to pursue and compete to find a way to make it profitable. Students also have to prove and measure the social contribution.

Write to Diana Middleton at diana.middleton@wsj.com

Courtesy of The Wall Street Journal

M.B.A.s Seek Social Change

Enterprises With a Cause Gain Ground on Campus

By DIANA MIDDLETON

During his M.B.A. studies at University of California at Berkeley, Jeff Denby told everyone his ultimate career goal: to start an underwear company.

Soon, professors and classmates at the Haas School of Business began to call him "the underwear guy."

But Mr. Denby—who had formerly worked in industrial design and went to business school interested in supply-chain management—decided early in his program that he wanted to create a company that was about more than just boxers or briefs. In his view, it was critical to create a product that was environmentally friendly and sustainable—and whose sales could help support good causes.
Q&A

This type of social entrepreneurship – that is, building a for-profit company with a social conscious or linked with a social cause – is becoming increasingly attractive to would-be business founders. The idea is to make money while either directly impacting consumers with its services or funneling a portion of profits to charities. Often, these companies employ people or source resources from economically depressed areas of the world that then also benefit from the charitable donations from the profits.

And with an increased interest in socially-responsible money-making, business schools have been pushed to create a whole host of courses and study tracks to help M.B.A. students sort out the best way to pull it off. Schools like University of Oxford, Cornell University and Dartmouth College have all seen increased demand for instruction in social entrepreneurship.

Some administrators say it's a generational progression of business-school students who have grown up more socially aware. Others say a lack of traditional jobs has spurred an interest in entrepreneurial ventures—and the focus on societal impact is partly a matter of trying to escape the stigma of the "greedy M.B.A."

"I think the interest in entrepreneurial ventures with social value [is about] more than the fact that people can't get jobs as easily," says Colin Mayer, dean of Oxford's Saïd Business School in the U.K. "There's also a sort of underlying sense of guilt about what happened during the crisis."

For his part, Mr. Denby, who graduated in May 2008, has long wanted to use his business skills for good. Before Mr. Denby co-launched PACT Organic Underwear as an online-only company in August, he researched all aspects of manufacturing and distribution to make sure his products would be legitimately sustainable, from the labor he employed to the inks used in the garment dye. Then he decided to pair each intricate pattern used on the underwear with a themed charity. For example, 10% of the proceeds from one blue pattern inspired by a Japanese woodcut, go to a marine conservation group.

Mr. Denby says his entrepreneurial spirit was fostered by Berkeley's curriculum. In one social entrepreneurship-focused course, guest speakers would make weekly appearances to discuss their for-profit business models. Mr. Denby also enrolled in a start-up workshop where he thought carefully about what charities to target, he says.

At Oxford's Saïd Business School, students use the Skoll Centre for Social Entrepreneurship to insert these concepts into their business plans. Recent projects include building water purifying systems in Africa and developing Internet banking systems in regions without significant technology infrastructure. Oxford has offered electives in social entrepreneurship through the center for years, but recently expanded its options.

The school also provides a venture fund that students can tap to fund worthy projects. In those cases, the school has a stake in the company—and its success—says Mr. Mayer, adding that the increased focus among students stems from the dearth of traditional jobs in finance and accounting, as well as the malaise surrounding the economic collapse.

"There is a real sense that doing good business can promote real change in economically depressed regions," Mr. Mayer says.

What's more, a for-profit enterprise with a socially responsible backbone is more attractive to nervous investors during economic turbulence than traditional business plans, argues Gregg Fairbrothers, director of Dartmouth College's Entrepreneurial Network at the Tuck School of Business.

"Financing is tough for start-ups," says Mr. Fairbrothers. "For investors to take a risk with you, it helps to have tangible social good coming from it, not just the promise of a fat IPO that will make everyone rich."

Mac Dougherty, a June 2009 Dartmouth grad, is doing just that. He joined forces with two computer science and neuroscience professors to market the services provided by a microprocessor that powers computer servers. The technology uses significantly less energy than its competitors. Not only would the technology be greener, he says, but it could also be useful for developing countries where energy shortages are the norm.

Mr. Dougherty credits Dartmouth with providing ample resources to pursue social entrepreneurship. He honed in on the concept during his first-year project course, and later plumbed the resources at the Dartmouth Entrepreneurial Network and landed a fellowship with the Allwin Initiative for Corporate Citizenship, an on-campus center that aims to instill ethics and a social conscious into the students.

Currently still in its planning phase, the technology company, called Cognitive Electronics, will eventually be marketed to government firms and defense agencies. Currently, they are conducting research for the Navy, which is partially funding the operation. The technology uses only 1% of the energy that current comparable products utilize – but performs as well. But that won't be its only impact. Mr. Dougherty also wants to take the company and its products to Sub-Saharan Africa where cellphone technology exists, but energy deficiencies mean it's not being fully-utilized.

"We could get all this technology into the hands of people, and unlock a lot of potential," says Mr. Dougherty.

Business-school administrators say these types of start-ups can do more than just help alumni launch sustainable businesses, they can also help rebuild credibility of businesspeople on a larger scale, says Joe Thomas, dean of Cornell's Johnson School, home of a Center for Sustainable Enterprise. Last year, Cornell began offering a four-credit course that focuses on the best practices for social change for its M.B.As.

"A few years ago, students came to business school thinking they would get rich right away," Dartmouth's Mr. Fairbrothers says. "But now, I think students are trying to focus on doing reasonably well while doing some good."

Courtesy of The Wall Street Journal