Showing posts with label decision making. Show all posts
Showing posts with label decision making. Show all posts

Wednesday, June 3, 2015

What A Jet Crash Can Teach A Business Owner - Piloting Your Company

You’d be surprised by the number of similarities between the most common causes of military jet crashes and those of business failures. I have a unique perspective on both having served on accident investigation teams for the USN and Boeing and, for the last 13 years, come to the aid of business owners of start-ups and established businesses alike, striving to place their company on a sustainable growth path.

As a former Flight Safety Engineer for Boeing, one of my responsibilities was to support accident investigations involving our military jet fighters. As you might expect, the U.S. spends considerable resources analyzing aircraft accidents and sharing the findings. The reasoning is that if you can identify the causes and share the results you can drastically reduce the chance of the accident from happening again. The same should hold true for businesses. Right?

Let’s explore an accident I helped to investigate. It involved an F/A-18 at an air show. The pilot was demonstrating the aircraft’s maneuverability by performing a square loop. He crashed at the bottom of the loop - striking the ground with such force that he broke his back, legs and arm. Because the aircraft remained largely intact, we were able to pull computers and memory, install them in a simulator, and replay the flight, watching all the instruments as well as the stick and throttle movements.

We witnessed the simulator mimic the pilot as he pulled the aircraft up into the vertical climb of the square. We paid particularly close attention to the aircraft’s altitude and airspeed indicators. I recall there was a collective gasp in the room when we saw that the pilot had cut the top of the square too low to complete this maneuver. The primary cause of this accident became immediately clear - pilot error.

What does this have to do with running a business? Owners often make poor decisions when piloting their business in the pursuit of growth. In retrospect most could easily be avoided with strict adherence to a well thought out plan, assuming of course, there is a plan.

In this case the flight (business) plan was a square loop that the pilot (business owner) failed to execute properly. The maneuver (plan) required that he hold the climb (Step 1) for several hundred more feet before executing the pull at the top of the loop (Step 2). By deviating from the plan and not gaining the proper altitude (cutting short the foundational work in the business plan) the pilot (business owner) put his plane (the company) in jeopardy.

Yet still, the pilot (owner) had a chance to minimize the damage (save the company) when he cut short his ascent at the top of the loop. Realizing his problem, the pilot still had two choices available: (1) Abort the maneuver by simply rolling the aircraft upright and continue the show (admit error and return to the plan) or, (2) Proceed with the maneuver (on a gut feeling), thinking he could pull it out by sheer force of will. The pilot chose option two.

So why would a pilot (owner), with all the instruments (sales data, advisers, etc...) telling him he is too low to complete the maneuver, proceed anyway? Let’s return to the accident investigation to find out.

The pilot was an very experienced Marine. He was a fireplug of a man who worked-out with intensity. He took great pride in his shape, physical strength and health. This is likely what saved his life but it was also a contributing factor in the crash. He felt he could, through sheer strength, pull the aircraft through this maneuver before hitting the ground. Somewhere in the back of his mind he believed the rules for that maneuver (plan) were designed for the average pilot (owner) and that he, with his above average strength and experience, could prevail where others might not.

We often see highly confident business owners act on instinct. They don’t do the proper market research or long-term planning because they think the rules don’t apply to them. And the outcome is almost always the same - failure or a significant loss of cash burned (crash and burn) in the process.

And let’s not forget ego. The pilot had friends and family in the airshow audience. This was a hometown crowd and the last day of the show. Imagine how hard it would be to admit to his friends that he screwed up and had to abort one of the more dramatic acrobatic stunts unique to this aircraft. Think of the ribbing he would take when he landed. It might have been awkward and a bit humiliating but surely a better alternative than risking life and limb (bankruptcy), right? Not for this Marine. Aborting the maneuver was not an option.

There is something strange that happens the moment you add the title Owner, President, or CEO to your business card. You become a performer. In a way you view your employees, investors, business acquaintances, customers, friends and family as members of a great audience. There are expectations and preconceived notions you put in your head about how you should perform (run your business). For example, never show weakness or indecision, never admit you don’t know, never admit you made a mistake, and never reach out for help. This, “I can not disappoint my audience” mentality led this pilot to continue the maneuver and crash. It has led business owners to do the same.

The pilot miraculously survived this accident, recovered from his injuries and eventually returned to flying. This is rare for pilots and business owners alike. Who knows how many pilot lives were saved from this investigation and the sharing of his story. I hope the same will prove true for those who are pilot-in-command of their business.


Want to become a better pilot for your metro Atlanta, Georgia business?  Let's have a cup of coffee and talk about it.  Contact me here.

About the author. Mike Gomez is President and CEO of Allegro Consulting, a growth specialty firm in Atlanta, GA. Allegro has been helping Georgia’s private business owners to plan and execute sustainable growth strategies since 2002. Mike is a strategy and sales process evangelist with a tool chest built on direct experience in international sales ($10B), strategy and program management. He is a prolific speaker, writer, former aerospace engineer, and pilot of both aircraft and helicopters.

Thursday, December 18, 2014

Overcoming Stalled Growth

David Cummings, founder of Atlanta Tech Village, has a great blog site.  In October, he wrote a blog titled, "When Growth Stalls".  Having seen this issue in a wide spectrum of businesses I felt compelled to share my insights to a problem that brings about panic, regrettable spot decisions and actions, and doors being shuttered.  David observed correctly that stalled growth can be attributed to numerous factors. Here are just a few I have personally observed with clients:

(1) Externally caused: new competitors (same product or better product), market saturation, market disruptors (Uber, for instance), technology shifts, new consumer/business trends, regulatory changes, new Google search algorithms that push your site to page 20.

(2) Internally caused: excessive spending on non-value activity, in-effective marketing spend, bad hires, no plan (long or short), loss of largest client to rival, pursuit of non-core business opportunities, loss of core competency, lack of respect for competition.

The first challenge to overcome stalled growth is to accurately identify the cause (more likely causes). 12 years of consulting experience says that you, the owner/founder, may not be the best person to uncover these causes. After all, stalled growth did not happen in an instant and we humans have a remarkable way of seeing only what we want to see.

There is a great Harvard Business Review study/article titled, “Evolution and Revolution as Organizations Grow” that has achieved "classic” status because of its long standing relevance. The study involved thousand of companies from all industry sectors. It concluded that companies go through five stages of growth. Each stage is preceded by mini “revolutions”. These revolutions can reveal themselves in dramatic ways such as the loss of a major customer.  But they can also be insidiously subtle, a marketing initiative released prematurely or one of your team failing to know  pricing changes before talking to a new customer.  The author concluded from the data that growth occurs when leadership recognizes those telltale signs and evolves both management style and operating practices to address them. The companies that don’t “evolve” stagnate or die.

Here is an excerpt from the article: “The problems at these companies are rooted more in past decisions than in present events or market dynamics. Yet management, in its haste to grow, often overlooks such critical developmental questions as, Where has our organization been? Where is it now? and What do the answers to these questions mean for where it is going? Instead, management fixes its gaze outward on the environment and toward the future, as if more precise market projections will provide the organization with a new identity.”

Stalled growth has huge implications. These conditions add weight to the already burdensome challenge of being a business owner. Don't let ego prevent you from welcoming an outsider's perspective to determine the causes. This is not the time for guessing and attacking what you “think” are the contributing factors.  Such an approach can delay recovery at best or accelerate the death spiral.

Want some help to define a new growth path for your metro Atlanta, Georgia business? Let's talk about it over a cup of coffee.  Contact me here.

About the author. Mike Gomez is President of Allegro Consulting, a growth specialty firm helping businesses plan and execute aggressive growth strategies. He grew his very first client’s business from $8M to $35M in just two years. Mike is a growth strategy and sales process evangelist, prolific speaker, writer, three-time marathoner, a former military officer and pilot of both aircraft and helicopters. He is also an advisor at Atlanta Tech Village and Four Athens Tech Incubator. www.allegroconsultant.com

Wednesday, December 10, 2014

8 Shortsighted Reasons Business Owners Don’t Plan

I’ve been consulting with business owners for over 12 years. Clients typically call because sales are slumping or things are seemingly out of control. They feel lost about where things are going and are just along for the ride. When trying to diagnose what might be wrong I will always first ask to see the plan for their business. The common response, “What plan?” or they will point to their head and say, “it’s in here”.

 What has always intrigued me about this is when I ask an audience of private business owners to raise their hands if they are at all surprised to find that Coca Cola has a 3-year plan. Or Boeing. Or Target. No one raises their hands. “Of course they do!”, they would say.

Yet when it comes to their own businesses - no plan at all. Remarkably, 90% of private business owners operate without a plan. The success/fail records support this. So, why don’t they plan?

Here are the 8 most common reasons I have heard for this shortsighted behavior.

(1) "I'd rather DO rather than plan." Clients have said they would rather do anything than plan. Fix a machine, support a sales call, talk to a supplier, or review a new website. In doing these things they get immediate gratification of accomplishing something, of solving an immediate problem for the team. After all, they rationalize this is the role of the President and owner, to solve problems, to be an expert on all matters and keep the business humming along. Right?

 (2) "It’s just not possible to do any long-term planning for MY business, it’s just too dynamic and unpredictable right now." “Mike, you don’t understand. My business is different.” Then they will site all the chaos they are managing through. Employee performance issues, a customer cutting their order in half, an upcoming conference to prepare for, a new competitor emerging, and the list goes on. “In such an environment, how do you expect me to do any long-term planning?

 (3) "Time spent on this is just not worth the effort." Citing reasons (1) and (2) they will rationalize that it just doesn’t make sense to spend precious time on this priority right now. Some will further justify this position by recalling an instance where a plan was produced only to sit on a shelf - never to be referred to again.

(4) "I don’t know how." I have had owners tell me they intended to do this for years. Some even locked themselves away and stopped taking calls for the sole purpose of crafting a strategic plan. They admitted only getting as far as typing ... “2014-2016 Strategic Plan” ...at the top of a blank Word document. They add that despite the fact there are numerous resources on the web for how to do this very important and impactful, cerebral activity “it is hard to have any confidence I am doing this right”. That’s not surprising. Building a quality, viable strategic plan takes experience just like any other discipline required to run a good company.

 (5) "What if it’s not the right plan?" Here is the logic behind this excuse. A plan puts our company on certain path. If the plan is wrong the path is wrong and that could spell disaster. “No plan mean I have the maximum flexibility to adjust in real-time based on the real-time dynamics of the business.” I’d like to see a CEO of any public company give this rationale to their Board of Directors or a startup to their principal investors.

(6) "I don’t want to be hand-cuffed on how I run my company." A written plan means accountability. “Publicizing our plan means committing myself (the owner) to accomplishing certain things in certain timeframes, right?” Yes. “Me failing to meet written milestones may give others a reason to justify not accomplishing the tasks I assigned them.” We can’t have that now can we.

 (7) "I’ve operated this long without a plan and it seems to be working for me." Why change? This is one of my personal favorites because I invariably find abysmal marketing initiatives, costly bad hires, and expensive, ultimately aborted excursions into new markets that would not have otherwise been pursued had they been operating to a plan.

 (8) "I don’t have time." “I know I should but things are just too busy right now for me to do any planning. Maybe later when things slow down.” Hint: they never do.

As this year draws to an end you have an opportunity to reflect on your business and your leadership. What did you learn this year? About your competition? About yourself? About your customer? What did your company do well? Where are the weaknesses that should be addressed? There is no doubt you possess a wealth of quantitative and quantitative data - inside your head. But that jungled mess of important information benefits no one in there. The planning process draws that out and makes it actionable. And much like making a movie, the finished product becomes the actionable script for your business.

Want to build a growth plan for your metro Atlanta business?  Let's talk over a cup of coffee.  Contact me here.

About the author. Mike Gomez is President and CEO of Allegro Consulting, a growth specialty firm in Atlanta, GA. Allegro has been helping Georgia’s private business owners plan and execute aggressive growth strategies for over12 years. Mike is a strategy and sales process evangelist with a tool chest built on direct experience in sales ($10B) and operations. He is a prolific speaker, writer, guest lecturer at UGA and GaTech, Next Top Entrepreneur judge, and start-up mentor at Atlanta Tech Village.

Wednesday, February 13, 2013

Tough Decisions are Part of Entrepreneurial Landscape


Whether you are the owner of a start-up or a well established business you are going to be challenged to make tough, agonizing decisions that will have a lasting impact.

Peter Drucker said this about decision making and business, “Whenever you see a successful business, someone once made a courageous decision.”

Decision making is part of the landscape of business.  And in the true spirit of the immortal words "The buck stops here," the toughest decisions are reserved for you the owner.  So how do you make these types of decision.  First and foremost you use your strategic and tactical plan as a guide.  A well vetted, market-based long and short-range plan is a very valuable tool for making tough business decisions. "Is it consistent with the plan?" is one of my favorite questions to ask owners struggling with a tough decision.

But what if both or all the options are consistent with the plan. What then?

There is something to be said about trusting your instinct and making decisions that way.  If you have a lot of relevant experience from which these "instincts" originate then you are likely to make a pretty good decisions. But I am a data guy.  Even with my depth of experience I feel more comfortable and confident when unemotional data is added to the decision process.

Here are the steps I would take to guide me towards making a tough decision:
  • What strategic problem am I trying to solve? (Be as specific as possible.)
  • What solutions are there to solve my problem? (short-term and long-term)
  • What is the approximate cost (financial ($cash)) of each solution? Ballpark it.
  • The strategic impact (pros and cons) be of each solution over say a 2-year period? KISS principle
  • Rank the solutions by cost.
  • Rank the solution by strategic impact.
  • After compiling this data step away for a day or two.
  • Now put your CEO hat on and look at the data as if a person on your staff is presenting these options to you for the very first time. 
  • Make an executive decision.  Document your rationale (On this date, I chose this course of action because.....).
  • Proceed - and don't look back.
Getting input from an advisory board for those decisions of strategic significance may also be prudent.  But recognize, you and only you will be held accountable for the decision you ultimately make.  There is a reason for the saying, "It's lonely at the top."

Want some unbiased help exploring options and assessing impact of different strategies?  We can help. Contact us here. The first coffee is on us.

About the author. Mike Gomez is President of Allegro Consulting, a growth specialty firm helping turnaround businesses wrestling with stagnant growth. He grew his very first client’s business from $8M to $35M in just two years. Mike is also a prolific speaker, writer, three-time marathoner, a former military officer and pilot of both aircraft and helicopters. www.allegroconsultant.com