It is estimated that investments held by PEGs, or Private Equity Groups, in the US tops $500 billion.  PEGs have a distinctive approach to making money which requires artful execution on their investments.  They are viewed with envy by some for their successes, feared by others because of their actions and not trusted by some others because of their “secret ingredients”.

Whichever camp you fall into, there are great lessons to be learned from a successful, savvy and typically highly intelligent group of business barbarians (a term of endearment).

The recipe PEGs use to make money has a number of key ingredients (highlighted in bold) complete with all the proper cooking tools.  They are as follows:

• 1 detailed cook book………..also known as a business plan
• 1 large caldron…………………..to sift through talent
• 1 cooking thermometer……..to measure the timeline
• 1 teaspoon………………….of patience
• 1 atomic scale………………to precisely measure results



PEG will NEVER enter into a transaction without a clear, well thought out and analytical business plan.  Next—the main ingredient to success—is the careful selection of talented “doers” who earn a seat at the table.  Once a transaction occurs, a Gantt chart is instituted for every element of the business.  AND, deadlines move only in one direction.  No time is wasted on emotions, fluff or blame.  It’s all about results and measuring successful outcomes.

While we can’t pretend to be a PEG, or to have to agree with all their business practice, there are a few things we can learn from their recipe for success and their cooking secrets and bake them into our businesses. If we learn nothing else from PEG, we must have three important ingredients in our recipe for success:

• Ownership. Accepting an investment of capital from PEG mandates a noticeable change in behavior.  Managers and teams suddenly realize that their projects need to get done accurately, timely and completely.  Ownership of risk rests on their shoulders, not with PEG.  And guess what happens when there is one neck to grab?  Results improve noticeably.
• Urgency. Practice a discipline that celebrates a sense of urgency.  Each day—strike that—each minute counts.  Lose the idea that “it” will eventually get done.  Hold yourself and your team accountable to agreed upon deadlines.  Adopt the expression—“we’re burning daylight over here”.
• Execution. PEG is ruthless in demanding results.  We should hold ourselves to that same standard.  Frequently, projects are started and abandoned or executed partially.  Successful execution means understanding the task that has to be done and doing it right the first time.  PEG rewards seamless execution and punishes weak performers.

Does your business have the recipe for success?

The recent mission into Pakistan by an unnamed group of brave souls referred to as Team 6, has brought a multitude of best practices with application in the business world.  Often times, we need inspiration from groups or individuals unrelated to the corporate universe, like Olympic teams and Military leaders, to remind of us what we are missing in accomplishing our own missions.

Clearly, the accomplishments of Team 6 reminded us of the importance of Courage when faced with tasks that take us completely out of our comfort zone; about Discipline and the need to concentrate of what must get done; about Confidence when put in a position of responsibility to lead a project; about Team work and how we must rely on the strength of cross functional teams when it comes to tackling complex projects and how we must have complete acceptance of what needs to get done, with no doubts.

Beyond these and other great messages, there are three key imperatives that this event brought to us and they are as follows:

• Elite talent is a must have. Hiring, training and retaining talent is the highest priority of successful organizations.  It is challenging, time consuming and daunting.  There is no substitute for a few GREAT people.  Yet, we tend to hire to fill open positions and do not reverse our decision inside that critical initial 90 day window, if it appears we made the wrong decision.  Talent, or lack thereof, will reveal itself in those first 90 days.  Once the individual has passed this first gate, extensive training must follow.  Finally, every effort must be made to retain this asset.

• Preparation is a precursor for execution. While organizations believe this in principle, the majority fail to invest in the preparation time.  Planning is viewed as “micro management”.  In many situations, the heavy lifting is in the preparation for a project because the elements of proper execution are mapped out and thus getting the job done flows smoothly with no surprises.

• There must always be a Plan B. Successful organizations bake-in an alternate plan in case unexpected events arise.  Nothing is left to chance.  There is an exit plan or an alternate path to take to get the original mission accomplished.  All too often, no time is devoted to this element and when roadblocks occur, the organization tries to react and most often fails to execute.

While we can’t carry out missions that have historical perspective, we can contribute to the successes of our respective organizations by adopting game changing business practices.

There are many great attributes of corporate brands that we can adopt in developing a personal Brand.  If you have worked on building your personal Brand, you will find it difficult to compete in an ever increasing crowded market.  No matter your station in life, it is imperative to have a personal Brand that uniquely describes who you are.  Not a resume, or a Linkedin profile, but a branding statement that separates you from everyone else.

As consumers, we are selective in companies we choose to do business with, based on their Brand reputation.  Why then would employers or potential customers of ours, not have that same line of thinking?

Successful brands are ABLE….they have characteristics that end in the letters a-b-l-e.



• Successful brands are Memorable, because they are interesting.  We are drawn to them because they are unique and different.  If you have ever been to a Cirque du Soleil show you will have a tough time forgetting what it was all about, and a difficult time describing what you experienced.  Their success has translated into annual revenues of $800 million.  What have you done recently that makes your Brand memorable?

• Successful brands are Reliable, because they are consistent.  We are confident about what we will experience, because they are trustworthy and dependable.  You can walk into a McDonald’s in Shanghai, Mexico City, or Atlanta, and the french fries will have that same fantastic taste, and you won’t be disappointed with the cleanliness of the bathroom.  Their annual revenues exceed $24 billion—but that what is remarkable is that they had net income of $5 billion in 2010—a BIG 21% net profit margin.  How reliable is your Brand and can you measure your success economically?

• Successful brands are Unstoppable, because they are multi-dimensional.  We can never get enough of them, because they are strong and confident.  Apple continues to prove that they are not a computer company.  They have so many exciting products, that we stand in line at the malls waiting patiently to give them our money.  Recession, competition, tension in the Middle East—nothing stops them from advancing.  They generated $65 billion in sales and $14 billion in profits in 2010.  Does your Brand isolate you in a box and tag you singularly, or are you perceived as a multi-faceted individual?

Start thinking of yourself as a Brand and emulate successful Corporate Brands by becoming remarkABLE.

Regardless of your station in a for-profit or non-profit enterprise, it is critically important to have a clear understanding of your entity’s stage of life.  Like us, companies have a distinct lifecycle, impacted by the leadership of the organization.  Similar to the bell shaped curve below, companies start with an idea and then grow through the different stages of development, much like we do.  However, unlike humans, companies can stay in their Prime for a long, long time—possibly forever.  Unfortunately, those are rare instances, as most companies fall prey to business practices, like Bureaucracy, which bring them to their death.  Much like we enjoy being around youthful young adults who are energetic and full of aspirations, few leaders are able to guide the development of a company in that stage to have it turn into a Stable enterprise.

An excellent example of such a company is Wal*Mart.  Despite its age (65 years old) and size ($408 billion in revenue and 2.1 million employees), it continues to grow year after year.   The way management has guided this company through its early development stages without turning it into a bureaucratic dying enterprise is a brilliant study in corporate leadership.

One of the reasons why Wal*Mart has succeeded is because everyone in leadership positions has understood their role through the various lifecycles.  Here are some points to consider:

• Determine your company’s stage of development—there are some very good books on the subject, including one by my good friend, Dr. Ichak Adizes, entitled Corporate Lifecycles. Learn to pinpoint where your company is on the bell shaped curve.
• Adapt your management style—to meet the needs for the stage of development your company is in.  For example, in the growing years, success stems from taking risks (embrace it), emphasis is on function not form (be patient), cash is poor (don’t panic).
• Breathe life into the lifecycle—which means having the confidence in yourself to step aside, if the company’s lifecycle does not match your skill sets.  An example would be an entrepreneurial company which has matured to become a publicly traded company, and thus require the skill sets of a “professional leader” vs. a “founder”.

Everyone within an organization has a role to play in the successful sustainability of their enterprise.  The more senior the role, the more critical it is to weigh actions taken vs. the stage of life your company is in.

Here is the good news.  Unlike humans, if your organization has gone past its Prime, through proper leadership and careful nurturing it can reverse course.

The pace of mergers and acquisitions began heating up in September.  According to CNBC, on September 27^th alone, $10.5 billion in worldwide M&A activities were announced….the biggest day for M&A activity since the $26.3 billion announced on August 16^th.

With the advent of the New Year just around the corner, and excess cash sitting on balance sheets of companies, is it time to look for an exit strategy?  Obviously, a lot depends on the Company’s overall long term plan, where they are in their corporate life cycle, the willingness of the owner or shareholders to sell the business and a host of other issues.

One point is universally clear.  No business should be started or acquired, without an exit strategy in mind.  That may sound unrealistic, but if the intrinsic value of a business to a potential buyer downstream is not clear before the doors open, then there is a missing element to the business that needs to be addressed before the first sale is made.

Determining the inflection point to pursue to an exit takes courage and determination, since such plans are draining, life changing, and time consuming with a long tail.  There is temptation to entertain an exit for the wrong reason.  Many will pursue such a plan when the business is struggling, because why sell a business when it is being successful?  Obvious—valuations are greater when the business is healthy.

Before pursuing an exit strategy, consider the following:

• Preparing the “bride for the alter”—can take a long time. Many businesses are not marketable in their current state.  Audited financial statements may be needed, or an upgrade in the quality of the management team, the renewal of a contract with a major customer, are all examples of actions which may need to be taken before the company is “up for sale”.
• Allow for a lengthy Due Diligence—more and more, buyout agreements call for earn outs for the sellers, which means the seller and buyer have to be in a business relationship for a year or several years post closing.  Mutual trust and respect between both parties is critical to a successful exit, and therefore due diligence on the part of the seller is just as critical as the buyer’s actions.
• Having a trusted team—to negotiate the transaction is critical.  While this might be intuitive, many entrepreneurs will bypass advisors on the basis of cost or their “opposing points of view”, and will select friends and family to determine the future disposition of their business. Carefully selecting the right team takes time and will be crucial to the success of a transaction.

Every business, even the corner bakery, needs to have a exit strategy plan that is well crafted, timely and devoid of emotion.

In my corporate experience, what separated the true leaders of companies I observed and worked with, where those individuals who left the comfort of their office and entered the front lines.  And the more they were on the front lines, the more they were connected with the heart of the business.

The practice of getting in touch with the core of a business is especially important when the economy is in a downturn and customers are on the run.  Is it any surprise that CBS introduced Boss Undercover, during the recession, to highlight the importance of CEOs leaving the back office to join the rank and file in the front office?

Unfortunately, many heads of companies still remain at HQ, and this lack of closeness to the customer produces Ring Rust, a term popularized in the sport of boxing, when a competitor fails to practice and over time……gets knocked out.

The owner of one of my current clients is a sales professional.   At least once a month, he will run an appointment, which means spending 2+ hours in a customer’s home to make a sale.  As a result, he is in touch with his customer’s needs, understands the challenges facing his sales reps, and commands the respect of his team, because he is on the front lines.  Additionally, he keeps the ring rust away from his selling skills.

• Get out of your comfort zone. Leadership is growing through discomfort.  It is not easy to get on a plane or in a car and get to the front lines.  It can be time consuming and draining.
• Get in touch with customers. The more layers between the customer and the CEO, the more the risk in being out of touch with the business.  In the example of my client sited here, there are only two layers; in the case of last corporate position, there were five.
• Get passionate with your craft. If your business hinges on sales and you have a leadership position, get in touch with the selling side of the business.  If marketing drives your business, get immersed in that area.  Prevent ring rust, by getting deeply ingrained in that area of the business that makes a difference.  E-mails, meetings and conference calls are inhibitors.

Leadership starts with putting your own position at risk, by stepping out of your comfort zone and into the front lines.  When you do so, be prepared to take action on what you hear from the constituents that matter—your customers, and you will avoid ring rust from knocking you out.

In nearly every type of business, there is a compelling need to be functional a high percentage of the time.  Up and running at full capacity.  Have you ever thought about the number of times you are disappointed when another party fails to deliver on full capacity?

• Your favorite show is about to air and the cable operator has an outage with no estimated of when it will be restored.
• The backlog of orders has not been this high for month and the machinery in the plan is down for a day with no estimate of when the repair part will arrive.
• There is only one Automated Teller Machine in the airport terminal you are in and has an “out of order” sign on it, frayed at the edges from the extended sunlight exposure.

It’s times like these when you wish the organizations behind the organizations responsible for these breakdowns had heard of “the five 9s”.  The term refers to a benchmark or standard used by entities such as Information Technology organizations for remaining operable 99.999% of the time.

Some organizations are never perfect in their “up time”.  Others have no choice in the matter.  For instance a 911 call center operation has to have less than a .001% down time, since they deal with life and death cases and it is thus mission critical to their operations.

What if we all strived to be at a 99.999% operational capacity through continuous improvement?  Here are some points to consider in making that a reality:

• Establish benchmarks: Whether you run a department of people or manage a single process, establish targets for your own performance or that of your Team.
• Measure everything: Learning about the 5 nines was a reminder of the importance of measuring every aspect of performance, productivity and everything we do, in order to be in a position to improve it.  Second to GE, Google has taught us the benefits of capturing analytics and using it  to improve results.
• Celebrate incremental improvement: Five 9s may not be realistic in your field.  However, your customers will notice any improvement in your uptime and your associated will be energized by incremental progress to reach your ultimate goal.

Here is the good news.  There is no downside in this mission.  By keeping your sights on the 5 nines, you will naturally improve performance and uptime and if you don’t get there, well you will be 99.99% better than you are today.

We may not be a 911 center, but to our customers, our ability to be up and running 100% of the time is mission critical to them.

In May 2006, a Wall Street Journal article declared that large Automated Teller Machine (“ATM”) manufacturers were trying to sell a new generation of machines that would enable customers to deposit cash or checks without an envelope.  Now, that may not be a big deal for some, but for many smaller businesses, which have a respectable quantity of checks and cash have to painstakingly prepare deposit slips, stamp the back of checks and stand in line, to make a deposit with a live teller, it was big news.  I was elated when I read this article, while at the same time thinking “not in my lifetime”. 

When Wachovia Bank rolled out the Wincor Nixdorf ATMs at my branch, I was celebrating by dancing (literally) when I made my first paperless deposit.  It was night time and I was holding my receipt with a clear image of each check deposited and I thought to myself—Thank You IT engineers, for enabling me the freedom to deposit money without all the fuss of having to do it during normal banking hours, waiting in line  and as an added bonus, a detailed photo of my deposit evidencing my transaction.

Then a couple of months ago, I saw the Chase television commercial that has a customer using a Smart Phone App to take a picture of a check and making a deposit!  A mini ATM in your pocket.  According to CNBC, scanners have already been sold by banks to business customers who then deposit a large amount of checks deposited without entering a bank branch.

Here is a secret.  The banks are planning to fund these new devices with the reduction in teller headcount, a trend which is likely to continue.  So what does this mean to you?

• Stay alert and current. Be vigilant with the technological changes that are taking place in your sandbox and ensure you understand the ramifications to your current post and your future.  Most who read the WSJ article in 2006 thought it would be a decade before the technology came to life, when in fact it was in operation in less than 3 years.  And sadly, most took no proactive steps as a result.
• Be a part of the innovative solution. Find ways to integrate or develop technology solutions to improve efficiency with your work.  With the advent of the work force reductions, it is doubtful that companies will fill those positions in the future.  In fact, they may find more ways to reduce head count.  Be a visionary in introducing technological or process improvement solutions to aid your employer in reducing payroll.
• Mitigate vulnerability with tangent occupations. Advances described in this article also impact companies that print deposit slips, entities that supply envelopes and to some extent, the US Postal Service.  Beware of the indirect impact of technological innovation on you or your company.

We embrace innovation when it benefits us and we see it delivered successfully.  Just need to make sure we are smart enough not to be put out of our job by a Smart Phone.

One would be foolish to minimize the pain and suffering this worldwide recession has caused in the lives of so many.  After every crisis we have an opportunity to learn what good came out of it.  Now that the recession is over (and yes, it is over, even though the pain persists) it is time for us to look at the positive impact from this economic malaise.

In any capitalistic society, positive and negative business cycles will occur….it is inevitable.  Since our Independence in 1776, there have been nearly 50 recessions.  It is highly likely that the United States will experience more recessions, some even worse than what we just experienced.

What got us here was excess, specifically, owning homes we could not afford to own, and then owning a second home, when we had no business owning the first. Abundance of credit combined with lack of discipline, resulted in a spiraling downward domino effect through the economic food chain.

Where is the good in all this?  Here are some of the positive results stemming from a recession:

• Weeds out the excess. Circuit City gave way to Best Buy, Netflix (NASDAQ: $118) has reigned over Blockbuster (Pink Sheets: $0.16), GM has abandoned the Pontiac and Saturn brands, to name a few examples.  There is an intersection in Atlanta that has Starbucks, Caribou and Dunkin Donuts all represented……the weakest of the three will be gone before year end.  Weaker companies giving way to stronger ones is in the benefit of the consumer long term.
• Increases efficiency in companies. Job creep.  That is the simplest way to explain how positions get added to companies in times of growth and expansion and then when the cycle shifts those are the first jobs to become redundant.  In my last position, there were 5 layers between the customer and the President of the Division; I was the 5^th layer, the most expensive and the easiest to cross off the organizational chart.  Even though I was impacted, it was the right call and with sales shrinking, there were no consequences for the customer or the company.
• Improves customer service. Attitudes are reset.  When the economy is growing, the customer base grows as well, and we have a strong tendency to take the customer for granted.  After all, there are so many and if we lose one, we’ll replace it with another.  A recession takes us back to appreciating the customer once again, a critical component to a booming economy.

All is not lost in a recession; the engine needs a periodic cleaning and the challenge is being prepared, back in the driver’s seat with a fresh perspective, moving forward.