Martin O'Neill, author of Building Business Value, joined me for a lively hour this week to discuss his book, his consulting practice at Corsum Consulting, and how he's helping businesses build value. You can listen on-demand at this link.
His book, Building Business Value, is the first guide for business leaders to build greater value in their companies. CEO’s of midsized companies will use Building Business Value as a hands-on guide for systematically building the value they always dreamed of. Building Business Value will help leaders understand just exactly what drives value in their company and most importantly, how to go about building a consensus on the steps to take to make their vision a reality. Martin’s also been an operator and consultant in the technology services and software industries for 25 years. He has started technology based services companies, led two IT Services firms through successful acquisitions and ran a business unit for a Fortune 50 company.
What was your reasonable aspiration*, or hoped-for goal, with writing Building Business Value?
I consider myself more as a business operator. I wanted to continue a conversation with the people still in the trenches, help small and mid-market business leaders begin to think about their companies like larger organizations and the CEO’s that run them.
I wanted to really make an attempt to help them find what drives value in their companies. What makes them stronger, more resilient, and more valuable, and then doing things every day that will build that enterprise value? It is a way to continue the dialog and discussion. What are they doing with their company right now? It is a gradual way of building a discussion for improvement. It is a slow moving wave.
When will you reach it? How will that build value for your business?
When people start to use value building in their dialog and discussion and the leaders are more comfortable with their discussion, then Martin will know he has reached his aspirations.
Who should read this book? Who will benefit the most?
I grew up on a dairy farm in Pennsylvania. My dad taught me “You can’t cheat the law of the harvest.” You can't not expect a harvest in the fall without all the hard work in the spring and summer, preparing the ground, planting, cultivating, etc. You must do things all year long, making changes and building value. You must know what you are focusing on, know where you are vulnerable, and know where your opportunities are.
Any business leaders that read the book will gain a methodology, a process for engaging the leadership of the company, as well as the entire company, finding out the real value drivers for their specific markets.
One of your chapters, chapter 2, is a discussion of 25 of the craziest things you’ve seen businesses do. I love lists like this. I skipped this list, I was too scared I’d see my name in 6-8 of the points. Why’d did you include it and include it as the 2nd chapter?
The best lessons I learned were through mistakes – omissions and co-missions and then the positive changes that were made because of these errors. Some of the mistakes are seen on a continual basis – uniform across the board. This list helps to get the CEO’s thinking!
My Favorite Mistake? I am most curious by the ones that deal with the executive ego. Many companies are still lead by the original founders, who actually struggle with change. This is odd because they started the companies because they may been revolting against something they didn’t like. As time passes, they became comfortable with how things were and struggle with changes in the market, grown fond of a particular product or service and some leaders just have a difficult time finding their way out of this problem. Their egos get in the way and have a hard time moving the companies to the next level.
Many times when an organization is started you find talent, but then the roles outgrow the personnel, but some company owners do not change the staff or rehire a qualified team. They are not always ready for change.
Which mistake occurs most often today?
The hero paradigm: a company has succeeded from the efforts of a few key people and they can’t scale that success or process into a larger enterprise. The CEO just tries to maintain status quo and not change any further. They flatten out as do their companies. They become reluctant to change because the past efforts have always been successful.
How do you correct or avoid this hero paradigm? How does Corsum Consulting help your clients grow through this stage?
First thing to do as an observer or consultant is to listen to the language of success – listen to the leadership and their experiences. Some may speak about opening up a new market in the South West because of one particular person.You must listen to how people describe success. If success is based upon the activities of one hero, then you have to think about a new way, a method or standard to recreate this and how to scale the process.
After listening to this in the value building process, we take them on an ROI exercise, risk mitigation exercise and overtime we build a transformational initiative. It is a mini business plan to define the process and what that company will need to engage prospects and clients over the long term. Get them out of hero into process. This is a struggle because small companies don’t think in terms of process – it is about heroes. It is important to engage the marketplace.
Sometimes founders can’t scale. We must show them other companies in their marketplace that have scaled. Many companies begin to justify why they flattened out. It is here where we show them real world examples of other organizations that have made the successful leap.
The hero paradigm seems to be the biggest challenge in the mid-market arena today. Is this different from 3-5 years ago?
It has always been a challenge, but in this market if you lose your hero you could be “dead.” You can become obsolete overnight. If their magic no longer works, then the company will be in deep trouble. If you have relied on heroes in the good times, then this becomes fatal during the tough times. There is no way for you to recover.
Most Fridays I blog or tweet about failure. A. I have a lot of content to share; B. I’ve found sharing it has been very useful for bringing success faster. I noticed a similar tendency in you. You tweet a great quote from former President Franklin D. Roosevelt that said “If it fails, admit it frankly and try another. But above all, try something.” And , you Retweeted an excellent post from Peter Bregman at Harvard Business School blog titled “You need to fail”.
Why do people need to read that article and take its advice? Why do we need to fail to be successful? What’s the role of failure in building business value?
“The perfect is the enemy of the good.” Voltaire. The best small and mid-market companies have a culture of trying new things. A culture of innovation, but not all ideas are going to work. It is okay to think outside the box and make a mistake and this tells the company and the employees it is okay to try new things. Failure can mean success.
Vulnerable Leadership: as a leader, if you don’t share any of your mistakes how can you possibly think that the team will share theirs? You don’t want your team to hide anything. It is important to be able to try new methods or tactics. You must be able to recover quickly. This is the culture of innovation! They will make it through tough times. Leading by example and showing that failure is okay.
Can you give us some examples, clients or not, who have a culture where failure is perhaps not celebrated but certainly accepted or expected in its success.
Examples: An old colleague and partner, Bob, once signed a contract worth almost $1 million . They wouldn’t receive any payment until the entire project was complete and successful. This of course hindered cash flow.
They ended up creating a presentation and went on the road inside his own company about how leadership finally signed the contract. Martin wanted to show what that contract meant to the company for risk and reward. He wanted to show the company why he signed that contract, why it offered an opportunity for great value for everyone in the company. Many times in the company, the CEO or leadership team thinks it is all about them, but this is not true. It is a team process. Everyone has to know what drives value.
It is all about building value! Founders and leadership teams need to get over the anxiety and push through it for greater success.
When working with clients, are they open to sharing failure and inspiring engagement from everyone within the company?
It varies! Generally it is a gradual building of comfort levels within the team members. It is a slow process, beginning with the leadership team and the value building exercise, eventually working to involve other members of the company. You need a culture of execution and change. Martin encourages building these initiatives and making them part of the operational plan. Communicate it. Make posters. Put the information in newsletters. Create the buzz and open the dialog.
Can you share with us one of your most favorite or inspiring real life scenario of building value?
An IT services company had gone through the value building process two times over the course of four years. Martin does a visionary exercise and the client saw that the customer was shifting to a different buying behavior and secondly, that the services being offered did not have a long shelf life. They had to go through a new strategy of how could they take their current competencies and create new whole service offerings that can meet a market need that is right around the corner? With this, they redid their infrastructure and dropped money out of the overhead. They offered new services based competencies and where their customer base was going. They looked at their future on a cost side and a visionary strategy. It has worked great for them and the ROI has been tremendous. They went into a new office space and outsourced many of the daily business activities. They rethought their whole company and this was a direct result of the value building exercises.
You use an extensive array of social media resources: Twitter, your blog, facebook, linkedIn. You use them all quite well. How long have you used social media? What value has it built for your business?
I started using social media about 8-9 months ago. I've always been a great networker and staying connected. I see these tools as methods to continue the communication with leaders. My favorite is the blog to convey my thoughts. The only concern is that I; maintains the personal aspect of traditional form of networking like sending out cards, making phone calls and sending emails – it is a balancing act.
Which social media tool is most indispensable for you?
Blogging and LinkedIn. But, I’ll never relinquish the more traditional methods of communication like hand-written thank you notes or phone calls.
What are three things our listeners can do, right now, today, to build better business value for their personal or corporate brand?
I call it 3-Cubed. That's 3 things to do everyday for operational efficiencies and future direction of your company. These will give you the opportunity to increase market value.
1. Think of the 3 top companies in your marketplace – who are they and what are the 3 reasons they are at the top?
2. What are the 3 primary value drivers in your market? What drives enterprise value? What are the 3 actions you are taking every day to effect change?
3. The 3 areas of vulnerability or inflection points. What 3 initiatives do you have in place that will mitigate that risk?
Thank you. Can you leave us with your favorite inspirational quote:
One of my favorites is from Niccolo Machiavelli"There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order to things."
Change is tough and we experience it everyday. The real heroes are the ones in the trenches day in and day out finding ways to move their companies around and making positive changes.
You can follow Martin at:
Note: Erika Andersen coined this term reasonable aspiration and its definition of hoped-for goal in her book, Being Strategic.