Patagonia Trip Files or Patagonia in 7 Mins

In November 2016, I did a two-week trek through the wilds of Patagonia. We covered more than 100 miles completing the "W" trek in Torres del Paine, Chile and hiking up to Laguna De Los Tres and the base of Mount Fitzroy (the logo for the Patagonia clothing company) in Los Glaciares National Park in El Calafate, Argentina - home to the massive Perito Moreno Glacier.  We ice climbed on the glaciers, kayaked to the glaciers and piled into a rough-hewn Refugio every night exhausted, sore, bruised and spent.  And often wet and wind blown.  It was an amazing experience.  It is some of the most beautiful, wild and pristine land I have ever seen.  Conditions are ever changing but always challenging.  Patagonia is a treasure that needs to be preserved and cherished.  My 15-year-old daughter took my GoPro footage and made a short video as a Christmas present for me.  I am sharing it with you.  Please forgive her spelling mistake on the opening cut.  She is amazingly creative and a tech guru but spelling will be a lifelong journey for her.

Hope you enjoy it. https://youtu.be/7mqOwEoNxtI

 

Women Who Win

I am starting a new blog topic today.  One I have been planning and contemplating for some time.  A blog on the Women Who Win.  The women who take on big challenges, throw their hats into the arena of competition and fight for achievement, recognition, financial reward, fairness and/or some grand design.  Maybe even all of the above.  I have long been inspired by the stories of women who achieve greatly - often against the greatest of odds.  Odds made that much more daunting because they weren't supposed to compete, weren't supposed to have that job, weren't supposed to win or even to want to.  Unfortunately, the stories - while more common today - still stand out because women remain underrepresented in the ranks of the most recognized,most celebrated and most compensated.  Maybe it was the recent flap around "Still She Persisted" or seeing a more qualified leader lose to a clearly less qualified one that spurred me on to finally start this blog. I will start with a series of profiles - short vignettes - on the women who stories have inspired me along the way.

One thing for sure is that I agree with the woman whose profile will start us off, Pat Summitt, hall of fame coach for the Lady Volunteers of the University of Tennessee.  In describing her college days in the early 1970s she laid out her philosophy vis a vis the burgeoning women's movement.  She said, "Protesting and sign carrying wasn't me - and wasn't going to get it done.  But there was only one way could see that changed things: winning.  You changed things for women by winning."

I Train Like a Spartan...And What is VO2 Max Anyway?

Endurance races are grueling tests of grit, composure, mental toughness, ability to process fear and perhaps most importantly, of the hard word of preparation. They test your discipline and fortitude. The first one I did was in 2012 and it was a Spartan Super in Vernon, New Jersey. A 12 mile course at Mountain Creek (NJ's highest peak) with 35 obstacles including the 8 foot walls, Cargo Net climbs, Hercules Hoist, Tire Drag and on and on and on.  Although I certainly would describe myself as fit and athletic, I was perhaps a little overconfident going into the race. I didn’t vary my workouts much leading up to the race. And on race day, I strapped on my running shoes and took off.   I succeeded in finishing the race although not with the time my competitive self would have expected and with more pain and suffering along the way than was necessary.  Some of the obstacles were exceptionally difficult and let's just say I did a lot of Burpee's (the punishment when you fail to successfully complete an obstacle).  Although I completed most, I also became fairly proficient at Burpee's at that first race.  I walked away with my medal and banana determined to do better next time.  To come back stronger and better prepared the next time.

Of course this experience maps to the rest of my life – the times I have been the most successful and things have gone the easiest, are the times I worked the hardest in preparation. Winging it and relying on innate talent is not only cocky, it seldom leads to the best outcome in work or school.  So it's true for a Spartan race as well. Over the next nine months, I mapped the course, plotted the obstacles and changed my training program to account for each for each.  I increased my cardiovascular endurance from “above average” to “excellent” as measured by my VO2 Max units of mls of oxygen per kilogram of body weight per minute (ml.kg-1.min-1). I evaluated the best gear and the best sports nutrition products to have on hand before during and after the race. And it worked.  The following year although the course was somewhat different, I reduced my time by 30% coming in the top five for my age class. My next challenge is an indoor tri. For that my focus is now on improving my swim technique.

Training began last week.

A Bright, Shiny New Year

As I was working on my annual plan for 2017, my daughter asked me why I spend so much thinking time on planning my commitments and aspirations (others call them resolutions) every year.  I told her if you don't set priorities, how do you know you're spending your time on the right things?

I love the feeling of a whole Bright Shiny New Year stretching out before me filled with possibilities and opportunities.  I love the luxurious feel of thinking about how best to use that wide expanse of time.  New Year's is my favorite holiday, in fact.  Not for the party scene but for the pleasure of this process.  I tend to start the process by setting a theme.  An overarching idea that encompasses and unifies the individual goals and aspirations.  

Last year the theme was "More" as I committed to finding ways to say "yes" to more things and enlarging my span of impact and influence.  This year the theme is "Integration."  By Integration I mean having seamless transitions and flow between all aspects of my life - removing all barriers that consume time and energy with no value.  

Once the theme is in place, I begin thinking about the individual Commitments, the things I am committed to accomplishing or doing and Aspirations, the results I will achieve through my Commitments.  I believe the reason Resolutions have a bad rap and a high failure rate, is because most people focus on the outcome first - I want to lose 10 pounds or save $10,000 or improve a relationship without thinking through the actual changes they will need to make to achieve them.  The first focus should be on the inputs - the things you are actually Committed to getting done.  Going to the gym 3x per week or cutting out the weekly Amazon purchases or spending 30 minutes every day with your spouse after dinner to reconnect.  The Commitments are what you are going to do.  The Aspirations are the whys.  

I think the other reason for the high failure rate is that most people make a big list without first having an Accountability system in place.  How do you know you are keeping on track if you aren't monitoring your progress?  People don't track out of the gate, get too far behind and give up before January is over.  Having your Accountability process ironed out starts before you even set your first Commitment.  I have found that this annual process has actually strengthened my ability to hold myself accountable in all areas of my life.  Discipline is like a muscle, you have to work it to make it strong.  Start small if you need to with a small number of Commitments.  You can add more once you have improved your ability to be disciplined in what you are setting out to do. Large Commitments should be broken up into daily or weekly goals.  If you can't break a goal up into smaller bite sizes to track, the likelihood of falling off plan is high.  

There are a lot of tools and techniques to use that can help with transparency and accountability.  These apps are great for transparency - the key to accountability. I have tried many.  The one I have settled on is Strides.  It is a great app - flexible enough to track all sorts of Commitments - time-based, numerical, etc. It is also easy to use with a beautiful UI.  I have it on the home page of my phone and iPad.  I start every morning by marking my performance against my Commitments.  

And 2017, this Bright, Shiny New Year is off to a great start.

Maybe too Much Empathy Isn't a Good Thing

Google "empathy" and "leadership" and here are just some of the first page links you will find.

"Why The Empathic Leader is the Best Leader"  Success
http://www.success.com/article/why-the-empathetic-leader-is-the-best-leader

"Empathy: A Critical Skills for Effective Leadership" Bounce Back Higher
http://bouncebackhigher.com/articles/empathy-a-critical-skill-for-effective-leadership/

"Why We Need More Compassionate and Empathetic Leaders" Psychology Today
https://www.psychologytoday.com/blog/wired-success/201608/why-we-need-more-empathetic-and-compassionate-leaders

"Why the Empathetic Leader is the Best Leader"  Lolly Daskal, Lead from Within
http://www.lollydaskal.com/leadership/whats-empathy-got-leadership/

"Empathy in Leadership: 10 Reasons Why it Matters" Tanveer Naseer

http://www.tanveernaseer.com/why-empathy-matters-in-leadership/

"Empathy is the Hottest Trend in Leadership" Time-Money

http://time.com/money/4376423/empathy-leadership-trend/

 The concept of empathy had been put forth as the answer to crime, violence of all sorts, political conflicts and all manner of ill.  Obama perhaps started the trend with his 2007 presidential campaign where he highlighted the "empathy deficit" as the most pressing problem facing America.  Some even attributed his re-election in 2012 to empathy, stating that  he one specifically because he and the Democratic Party were more successful at expressing empathy than Mitt Romney and the Republicans. (Barack Obama quotes about empathy - http://www.azquotes.com/author/11023-Barack_Obama/tag/empathy).

Whenever a concept or idea reaches such levels of hyperbole in the popular media - just look at the language in those titles to see it - Hottest trend, Best, Critical - I generally begin to ask "what if the opposite is true."  In our culture, it is usually just a moment in time until such powerful "no brainer" trends are met with opposing arguments and forceful backlash.  And so it was with the empathy movement.  One of the first salvos I read "Against Empathy, The Argument for Rationale Compassion" by Paul Bloom.  (https://www.amazon.com/dp/B01CY2LCZI/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1) is a witty "plane ride" read and is provocative with some powerful ideas sparking contemplation.

Bloom's thesis is that empathy is biased, innumerate, parochial and irrational. It leads us astray and foils our efforts to make rational moral decisions.  In fact he makes the case that some of the most important decisions made by individuals and nations—who to give money to, when to go to war, how to respond to climate change, and who to imprison—are too often motivated by honest, yet misplaced, emotions. With precision and wit, he demonstrates how empathy can distort our judgment in every aspect of our lives, from philanthropy and charity to the justice system; from medical care and education to parenting and marriage.  

Bloom argues that compassion instead of empathy (turns out there is a difference) leads to a much better decision making process.  Bloom defines emotional empathy—feeling another’s pain. vs. non-empathetic compassion which is a more distanced love and kindness and concern for others. Bloom is a big fan of compassion if not so much empathy. He makes the point that kindness and altruism are proven to be associated with all sorts of positive physical and psychological outcomes, including a boost in both short-term mood and long-term happiness. If you want to get happy, Bloom argues that helping others is an excellent way to do so.  Empathy, on the other hand, can be draining and lead to burn out and exhaustion.

But larger than the impact on the individual, Bloom argues that it makes the world overall a worse place.  Empathy in the moment blinds us the long-term consequences of our actions.  So where empathy is an emotional and knee-jerk response to a situation close at hand, compassion can be logically reasoned - taking into account future generations, cold calculation and cost:benefit analyses.

In his book, Bloom looks at this empathy vs. compassion comparison from the perspective of public policy, charitable giving and personal relationships.  He did not apply his logic to the professional environment or to leadership situations.  I would argue that it is just as applicable to think about the difference between "rationale compassion" vs. "empathy" as we lead our teams at work.  Bloom claims that "empathy distorts our moral judgments in much the same way the prejudice does," both are emotional reactions and both lead to sub-optimal decisions.  It is easy to see how leaders passionate about their teams, their companies and their colleagues could get caught up in an emotional response to a peer's failures or personal struggles or a customer's frustration.  Bloom argues that it would be better to apply the cool logic of reason in the service of dispassionate but real compassion - weighing the odds, running the numbers, assessing the ramifications, aiming for a greater good - rather than the heat of an emotional empathy seeking to provide relief in the near-term to ourselves and our colleagues with short-term solutions.

Against Empathy: The Case for Rational Compassion. Paul Bloom, 
https://www.amazon.com/dp/B01CY2LCZI/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1
Harper Collins

Learnings from a Patagonia Trek

 

There is no debate about climate change among those living closest to the glaciers. They see the affects everyday on a dominant part of their landscape - Gray Glacier, Glacier Petito Moreno, Viedma are all receding.  The local people see it happening my day by day and are afraid. The glaciers are a part of their lives, an important source of income, a driver of the weather and a definite point of pride. When we were hiking and climbing on Gray, the guides spoke almost lovingly of the glacier and its place in their day-to-day lives. They asked if their glaciers were noticed or known or cared about in America. Did we understand what is happening here?  Unfortunately, the honest answer was, for the most part, No. We talk about by the glaciers and their relentless shrinking in the abstract without much passion. The glaciers up close are anything but abstract. The glaciers are majestic, awe inspiring, dangerous and beautiful. They are a critical part of our ecosystem.  To be up on one is to be in another world. The quiet is complete, the colors intense.  One feels that one is in the presence of a raw, untamed part of our world. And that our fates are inextricably linked. I am grateful to have had the opportunity to experience them while they are still glorious. 

Conditions on the ground can change on a moment's notice. At the outset of the trip, we began each day by asking our guides about the weather. They would just smile and shake their heads. Didn't we understand, there was no predicting the weather? Changeable weather is a cliche for many areas. In Patagonia, it is flat out true. What starts out as sunny will soon be sleeting and then back again.  Temps can swing 20 degrees in the span of 20 minutes.  Gale-force winds can come out of nowhere at any time and swirl in any direction taking your breath away and knocking you off your stride (a potentially dangerous scenario on the narrow cliffs of Torre Del Paine).  Then just as quickly subside - or last for days.  If you aren't prepared for any contingency, you are potentially  at grave risk. By the end of the trip, we found ourselves scanning the skies frequently and on high alert for any shift of wind. Not a bad approach generally in today's complex world. 

One of the basic things that unite all of us is a willingness to pursue even a perilous search for beauty in all its forms. On the trails, I met people from every region and all walks of life. Class, race, gender, ethnicity all melted away in our shared quests for  base of the Three Towers or the look out on Mount Fitz Roy. We were exhausted, cold, some pushed beyond physical limits. We shared challenges and set backs and triumphs. 

Until we truly push beyond our limits, we can never know the boundaries of our strength. Most of us stay within narrow limits.  It is safe there. The risks are low and the outcomes predictable. We do not go to our limits because it is hard. Uncomfortable. Messy. Unpredictable.  And we may not like what we see. But, in my experience, when people truly push until they almost break, they are surprised, even shocked,  by what they can endure.  Seeing how far, how fast, how much, how many - only serves to build confidence in our strength and abilities. It is liberating.  The human spirit is truly indomitable. Our physical strength becomes a source of power, of pleasure as the world opens up and we begin to trust our ability to master any challenge. 

Traveling the world is best experienced fully curious and open-hearted. It is important to be generous with your interest and appreciation and sparing with your judgment and criticism. You can learn something from everywhere you go and everyone you meet. Actively seeking out different perspectives makes it easier to question your everyday assumptions. 

You cannot fully experience and understand the world from behind glass. While I appreciate the need to provide transportation to the world's beautiful sights as a way of ensuring access to those with truly no other possibility to reach them; in certain parts of Patagonia (thankfully not Torre Del Paine or the Parque De Los Glaciares where there is simply no way to access the sites but by sheer effort and sweat and blood), I saw many climate-controlled tour buses and ferries filled with tourists being transported to a glacier or look out point.  And no doubt many of them could be out in the open air struggling with the terrain and weather with the rest of us but for a little training and work. This would significantly cut down on the number of tourist buses littering the landscape, exhaust fumes hitting the glaciers as well as ensure a more authentic experience for the people behind the glass. 

How "Mindset" Can Drive a Company Culture

Just finished reading "Mindset: The New Psychology of Success" by Carol Dweck.  The implications of this research and perspective are broadly applicable - as individual contributors, as parents, as partners and as leaders.  The essential idea of the book is that a growth mindset is one that is open to challenges, to learning, to struggling to attain skills - it is the belief that there is no fixed state of being that growth and improvement can always be achieved with focused effort.  That is compared to a "fixed" mindset which believes that talent and capability are essentially immutable.  You are either a natural athlete or inherently smart or a gifted artist or you just aren't and no amount of work and effort can change that.  In fact, if you have to work at something; it means you will never be good at it.

"People may start with different temperaments and different aptitudes, but it is clear that experience, training, and personal effort take them the rest of the way. Robert Sternberg, the present-day guru of intelligence, writes that the major factor in whether people achieve expertise “is not some fixed prior ability, but purposeful engagement.” Or ..... it’s not always the people who start out the smartest who end up the smartest."

Or more simply stated, it isn't necessarily the people with the most "natural" talent who succeed but the people with the courage to take on big goals that may in fact lead to failure, people open to learning and people with perseverance and grit to do the hard work necessary to succeed. Not the show horses who grow frustrated at obstacles that are not supposed to be in their way but the work horses who see those obstacles as opportunities to prove themselves and learn.


Being told you are a "natural talent" and the "smartest in the room" may in fact lead one to avoid the stretch assignment or the risky goal because you become afraid of losing that aura of invincibility - that sense of being able to achieve effortlessly.  Being told that success is assured because everything "comes easy to them" may lead to a crumbling at the first inevitable struggle - a loss of identity.  

These concepts are as relevant for business leaders who want to cultivate talent as for parents who want to raise their kids to thrive on challenge and develop the resilience to succeed in the face of setbacks.

With a "fixed mindset," you believe that you have a fixed ability that needs to be proven again and again.  You either have it or you don't - and you need to keep proving that you have it by making it seem easy, by not appearing to struggle, by not ever failing.  So you don't take on things you aren't very sure that you can do.  Alternatively, people with a growth mindset do not lable themselves as immutable winners or losers and don't throw up their hands at the first sign of struggle believing that if it isn't easy, it is beyond their natural talents.  They believe that they can develop, can learn and although they feel distressed at failure; they are ready to take the risks, confront the challenges, and keep working at them.

The willingness (even passion) for stretching yourself and sticking to it, "even (or especially) when it’s not going well, is the hallmark of the growth mindset." The growth mindset is one that enables people to thrive during the most challenging times in their lives.

This concept - fixed versus growth mindset - has many implications for the leader of an organization. Firstly, do you hire only the "natural athletes" the ones who have glided through their career seemingly never faltering or do you hire those who have obviously had to struggle at times, had to presevere through challenges both personal and professional?   Do you hire the sort who wears his/her ego on their sleeve - one whose self worth is contingent on never breaking a sweat and always proving that they are the smartest in the room?  Or do you hire the person who knows that they will have to work hard at times to overcome obstacles, that their lot is to struggle and strive through challenges and persevere through setbacks?  Who see failure as not a challenge to their core being but as a call to action to double down on their efforts?

And then there is the question of how you deal with a failure of those in the organization.  Do you reward or punish those who take on risks and sometimes fail? Are people willing to take on the stretch assignments or do they play it safe by staying well within their base talents - padding timelines and budgets to ensure they don't mar their perfect record as a winner?  

And as a mentor and a coach - do you believe that people can grow and learn and improve through challenges and struggle or do you believe that people either have "it" or not.   Are you willing to give people stretch assignments that are likely to lead to stress and struggle?  Or only give people assignments and roles once they are "ready."

If people can have a fixed or a growth mindset, so can organizations.  Building an organization that celebrates grit and growth through hard work and effort may lead to more sustainable success through the inevitable ups and downs of a company's life cycle. An organization that accepts the occassional failure in the reach for the exceptional is more likely to achieve that quantum leap in performance or great innovation over time than the one who continually plays it safe - setting realistic timelines and projections.  And a company that encourages people to take on assignments and tasks that seem initially beyond them but that will lead to true growth and deepening of skills even in the face of painful uncertainty, will be a far more interesting place to be.

Mindset: The New Psychology of Success

The Most Important Question

I have learned that the most important questions are generally the simplest.  And when someone really knows their stuff, the answers are crisp and short.

When meeting team members for the first time, I always ask the same, simple question.  "What is your job."  Invariably, I get a quizzical look as if the person were thinking - "C'mon you're the CEO, you must know what my job is.  Is this a trick question?"  But it isn't a trick question - I certainly know the person's title and role description but I genuinely want to hear every individual describe her/his job - as they see it, as they think about it, as they experience it.  I repeat the question again and will finally start to get halting answers.  And the conversation always proceeds the same way.

Invariably the person will start by describing the way they spend their time, the tasks that they do every day, the "deliverables" that consume their time.  I will let them go through their laundry list of items - sometimes people get really warmed up as if they think that this is now their opportunity to show off just how hard they are working - a long list of tasks translates into a very productive person, right?  Wrong.  

After they are done with the list and sit back with a breath, I ask again, "Ok, those are the tasks you do, but tell me what your JOB is."   Now they are really confused and sometimes a bit frustrated.  They are thinking..."Didn't I just tell you?  Could the CEO really be this daft."  I generally let the discomfort sit for a minute or two.  Then I explain.  Those are the tasks you must complete or work you must do to to achieve the Outcome to be produced.  It is producing that ultimate outcome - not the tasks - that define one's job.  No company pays for tasks - they pay for the successful delivery of an important outcome - something worth spending company resources on.  Then comes the "aha" moment.  You can see it in their eyes.  They finally "get" what I am asking and always describe with pride the true output of all their efforts.

This is a very powerful shift.

When people describe their jobs on what they are meant to accomplish for the organization rather than the minute tasks they do, there is a sense of importance, a sense of purpose that suddenly animates the conversation.  This shift is the same for people at every level of the Company.  Outcome based role definitions can be crafted for every job in a Company.  If not, if there isn't any outcome from that position that the Company is willing to pay for, you need to ask why that job exists.

Following this shift, people see their work in a whole new light.  And are proud of what they accomplish.  And it opens up a whole new degree of freedom and accountability.  It goes from....


"I create mechanical drawings on Solidworks." To "I design products that our customers want and need."

From "I write code." To "I develop software to help our customers work more efficiently."

From "I write reports." To "I make sure our customers have the data they need to make good decisions and be successful."

From "I run training sessions." To "I ensure customer success and help make our customers better at what they do."

From "I generate financial reports." To "I help our team understand the key metrics and drivers in our business to make sure we are successful long-term."

It is hard for a person to be turned on and excited by a laundry list of tasks but over time that is exactly what job descriptions and role definitions have become.  Everyone's work should be defined and evaluated by what they produce, the positive outcome they deliver that the Company actually wants to pay for and the person is excited to do.   See, told you it was simple.

A Thin Black Line

A thin black line. That may be the only tool you need to have to know if you are likely to be successful as a leader, as a spouse, as a colleague. No quadrants or complex organizational theory - just a thin black line.  Being "above the line" means being open, curious and committed to learning while being "below the line" means being closed, defensive and committed to being right - to spend your time not truly listening to others or being open to their ideas but to filtering what you hear and see looking for "proof" that you know the answer and are truly the smartest person in the room.

I was first introduced to the concept of the thin black line by a very insightful and forward thinking leadership coach acting as an outside resource for my YPO Chapter (Young President's Organization).  Diana Chapman and her partners at the Conscious Leadership group (http://conscious.is) have developed this simple idea into a powerful leadership concept - maybe the most powerful of all putting true self-awareness and the willingness to tell themselves the truth as the first mark of a person likely to be able to effectively lead people and be fully present at home, at work, with themselves.  These ideas are fully explored in a recent book, "The 15 Commitments of Conscious Leadership: A New Paradigm for Sustainable Success" by the principles of the the CL group - Jim Detmer, Diana Chapman and Kaley Kemp.

But wait a minute - what is wrong with being right?  Isn't that what people hire a CEO to do - to be right?  As described in the book for leaders....survival is a matter of protecting the ego or identity or image.  And the ego firmly believes that if it is not right, it won't survive."  Being wrong equates to being dead." (Or fired, our losing respect or status).  When we feel threatened - with a loss of any kind - our survival instincts kick in and we fight to be right...because right feels safe.

The danger is magnified when you are below the line (closed, defensive, committed to being right and keeping your ego alive) but think that you are above the line.  The authors describe this "leadership blindness" as "rampant in the world."  Many examples exist of high-profile leaders that appear to be operating from a place of hubris and defensiveness and it rarely ends well.

The answer is to develop a depth of self awareness that while simple to describe is difficult to achieve.  This self awareness is a perquisite to accomplishing what Diana and her co-authors describe as "shifting."

"Shifting is moving from closed to open, from defensive to curious, from wanting to be right to wanting to learn, and from fighting for the survival of the individual ego to leading from a place of security and trust."  It is only from here - from above the line black line - from a position of openness and curiousity that we can truly unleash the full power of creativity, innovation and collaboration of our organization.  Ultimately, the success and longevity of our relationships - personal as well as professional - may rest on us being consistently on the right side of that thin black line.

2,000,000,and Still Counting

Just crossed the 2,000,000 mile mark in air miles traveled.  Over a 20-year career, that equates to an average of 100,000 miles logged per year.  Of course that has meant many early morning flights, too many missed dinners at home and a tremendous amount of wear and tear on my body.  But it has also meant the opportunity to meet more terrific people than I could count, to experience the cultures of places like India, Iceland, Kenya, UAE, 48 of the 50 US states, most countries in Europe, Russia, Tanzania and others.  To see the beautiful plains of sub-saharan Africa, the luscious peaks of the Himalayas, the surreal volcanic terrain, glaciers and brilliant blue lagoons of Iceland and the rugged coastline of Nova Scotia.

But even more than all of those things, it has made me a better leader - with a deeper appreciation of the value of differences, the richness of life, the indomitable nature of the human spirit and the power of human connection.  It has made me a stronger person - confident in my stamina and energy and ability to endure extended days, multiple time zone changes, long flights, and longer bouts of intestinal distress.   It has made me a better listener as you have to listen harder to reach understanding when voices and accents don't sound like yours.  It has made me more patient and resilient in facing the inevitable vagaries of travel delays, last minute itinerary changes and stymied plans.  It has taught me how to laugh at myself during the crazy things that happen when you step into taxis and Ubers 20 times a month and check into hotel rooms 30 times a year.

So while I appreciate and certainly benefit from the efficiency offered by all the tools we have at our disposal today to have video meetings on our phones, hold low cost conference calls and communicate via email, text and chat; I have no plans to get off the road.  There is simply no replacement for looking your team members in the eye and hearing from them directly their ideas, hopes and dreams; from sitting down with a prospect to understand their fears, concerns and ambitions; from meeting a customer to hear their passionate (hopefully!) and frank feedback.  Besides I have those last two states to visit - looking forward to seeing Wyoming and Alaska!

So at 2,000,000 miles, I am just getting started!

CEO as the Master Mind

As I was sitting in my office the other perusing my book shelf, a book leapt into my hands.  It is a beautiful book with a deep maroon binding and gold raised lettering on the binding.  It feels good in one's hands.  It had been some time since I had read it so I opened it up and started reviewing my notations.  The book was the "Principles of Self-Mastery" by Napolean Hill.  Napolean Hill was one of the original "self help" masters.  Writing in the early part of the 20th Century, he wrote such classics as the "Law of Success" and "Think and Grow Rich."  If you haven't read any of his work, I encourage you to take up one of his books.  Any of them will do.  I think you will still find his ideas and concepts thought provoking.  As an indication of continued relevance today, all are available in modern electronic form through Amazon and other sites.

I started re-reading the chapter on the "Master Mind" and was struck by how relevant that concept is to modern-day CEOs.  Most people hear Master Mind and they think of a powerful individual, a genius evil or otherwise, a "great man or woman" that makes all the decisions and makes all the difference.  That is the exact opposite of what Napolean Hill meant by his Master Mind.  For Hill, the Master Mind was a "mind that is developed through the harmonious cooperation of two or more people who ally themselves for the purpose of accomplishing any given task."  It is the collective mind of a team.  The great ideas and energy that develops when a team works in sync - when the whole is greater than the sum of the individual parts.

The role of today's CEO - especially ones who run highly technical or geographically distributed or rapid moving businesses (don't most businesses fall into one or more of those categories) is not to know everything or to make every decision it is to bring together a team of highly competent people and create an environment in which - collectively - they are able to punch above their weight.  Are able to accomplish great things because they have mastered the art of working together without the petty, draining friction of political jockeying or professional envy or one-upsmanship that permeates so many organizations.

If anyone doesn't think that this cult of the Hero or savior CEO isn't alive and well - a situation almost always doomed to failure - just ask Marissa Meyers.

Hill's theory actually takes a page from the physics of his day stating that "a mind can communicate directly with mind on the theory that thought or vital force is a form of electrical disturbance" that is picked up - even unconsciously by the other.  Anyone who is lucky enough to have worked on a high performing team and felt the electric energy in the air can appreciate his argument that we are all connected by this "vital force" out in the universe.  And that the truly great leaders are the ones that can harness that vital force of a group of people to achieve a joint goal.  In Hill's mind it wasn't the leader who knew the answer to every strategy question or could write the code or solve the key technical question of the day but the CEO who was provided "by Nature with mind chemistry favorable as a nucleus of attraction for other minds."

Will Healthcare Continue to Outperform in a Weakening Market?

At this year's JP Morgan healthcare conference, there were the usual receptions, "speed date" meeting schedules, crowded hallways, busy restaurants, the rumors of "protestors," and overpriced hotel rooms.  But there was also a sense that maybe the roll that healthcare has been on may be slowing.  The boon has been fueled by both long term and short-term factors and it is the short-term factors that may be starting to fizzle out.  The trend toward inversions that has driven many of the largest deals in the sector may be peaking as Congress takes an increasingly dim view of the practice although some deals will still be rushed through in the first half of this year as companies try and take advantage of the distraction of a Presidential campaign.  The stimulus to the industry provided by the HI-TECH act and the Accountable Care Act has largely washed through the system.  And most of the companies with products in advanced (PII or better) have already taken advantage of the booming market to go public or get acquired.

There is no doubt that healthcare has been on a roll over the last 5 years.  The sector has outperformed in almost every metric against some very stiff competition from the Tech sector especially (see below).  As the market overall is clearly weakening as we enter 2016, the question is whether outperformance in a strong market will turn into underperformance in a weak market.  The good news is that while no sector is likely to keep up the pace set by the bull market of the last 5 years, the healthcare sector has some basic underlying strength created by long-term demographic trends, the continued advance of innovation and a favorable overall political climate.

• Over the last 5 years, healthcare stocks have outperformed every other sector and all market indices.  Healthcare related stocks are up 128% vs. 78% for Technoogy and 50% for Financials.  Nasdaq is up 89% and S&P 63%.
• That is because revenue and earnings growth for healthcare companies has outpaced the market as a whole - in 2016 companies in the S&P 500 are projected to grow revenues by 5.2% and earnings by 5.6%.  Healthcare-related companies are projecting growth of 7.4% in revenue and 8.1% in earnings.
• Growth investors are increasingly "overweight" in healthcare with an average of 20% of their holdings in the sector.
• In 2010, IPOs of healthcare companies were 11% of the total and raised 8% of the total capital raised.  In 2015 in a shrinking pool, those numbers were 41% and 22% respectively making it the most active sub sector in 2015.
• Biopharm was the most active sector with 61% of total sector proceeds in 2015.  Most (70%) of those issuances were supported with "cross over" or pre-IPO raises.  
• As of January 15th, 22 healthcare issuers are currently publicly on file with a large backlog pending.  The 22 represent 2 MedTech/Diagnostics, 5 Services/IT and 15 biotech/Pharma/specialty Pharma. 
• Reflecting the overall softening of the market, in the last quarter of 2015, trading performance post-IPO dropped from 2.4x to 1.1x.
• Follow on issuances were very strong in 2015 with a record high volume of $39 B - 2.5 x the previous record of $16 B in 2014.
• Global healthcare M&A was up 76% over the previous record in 2014 - driven in part by an increase of the "mega-deal" with 13 deals valued at more than $10 B especially in Pharma/biotech.

Most of this data came from an excellent presentation by JPM bankers during the conference. Also, Bloomberg, Factset, Morningstar, Lipper FMI, Dealogic, Company Filings

In the Arena

What is it we would like said about ourselves as leaders?  Hard worker. Fact-driven. Sensitive to the perspective of others.  Capable of walking in other people's shoes and seeing the world through their eyes.  Gracious. Driven. Smart.  Communicative.  Visionary.  Trustworthy.  Fearless.  Decisive.  There is likely to be solid agreement that these are good - even necessary - attributes for a successful leader.  But there is one trait that is absolutely essential.  One that every single leader of import and impact has exhibited.  Perserverance.  If you lead, you will inevitably fail.  You will inevitably be criticized.  You may even face disgrace.  You will face sacrifices and setbacks.

One of my favorite quotes of all time epitomizes the type of perserverance that is needed to take you forward.  It is from Teddy Roosevelt's famous 1910 speech at the Sorbonne, "The Man in the Arena."

"It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better.  The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly...who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement and who at the worst, if he fails, at least failed while daring greatly, so that his place shall never be with the cold and timid souls who neither know victory nor defeat."   

The question we all need to ask ourselves  as we consider whether we are prepared for leadership is whether we are willing to enter the area - to dare greatly, to know the great enthusiasm and the great devotions, and to spend ourselves in a worthy cause.  Because if we do, we will likely know the triumph of high achievement.  And that is the true fulfillment of leadership. Not the money or the titles or the awards or the recognition.  But to get in there and get your face marred by dust and sweat and blood and to know that you used up your essential strength and energy in the pursuit of a grand goal.

Why CEOs Should Read Dr. Seuss

The other day I was putting together a tribute to my daughter for her 8th grade graduation class book.  Along with pictures of her cute 3-year-old self and her 13 oh-so-grown-up self, I was looking for some quotes that reflected that lessons that I hoped she was taking forward with her to the right of passage that is high school.  After agonizing for awhile (it was much easier to pick out the photos), I remembered one of the books I used to read regularly to her and her older sister.  It was certainly one of my favorites and - I think - theirs.  Right up there with "Click, Clack, MOO" and "When you Give a Moose a Muffin."  While I loved those too, I loved to read them, "Oh, the Places You'll Go" by Dr. Seuss.  While the larger message of the story may have been a little weighty to absorb for young children, it was certainly clear to me.  And it was a rare time reading it that I didn't end with a lump in my throat.

I took the book from her bookshelf and sat down to find the perfect quote - 5 lines of wisdom that would fit in a half-page ad.  But while reading it, I realized that the wisdom in that Dr. Seuss book was just as important for me in my journey as a CEO and business leader.  The core messages - that everyone faces obstacles and times when they feel lost and all alone -  is one that is critical for anyone trying to build and lead companies and lead a life of accomplishment.  It seems the qualities of perseverance and tenacity matter as much for Buxbaum, Bixby, Bray and Mordecai Ali Van Allen O'Shea as they do for anyone else with grand plans and big dreams.

The happy places and detours and dead-ends that Dr. Seuss describes - The Place Where Boom Bands are Playing, the Great Heights where High Flyers are Flying....as well as the Not-So-Good Streets, The Weirdish Wild Space and the terrible, dreaded Waiting Place - are all places and stages that I recognize.  All of this serves as a reminder that the good times will always be somewhat fleeting and that the inevitable Bang Ups and Hang Ups that lay ahead  are there to teach us valuable lessons along the way to our next triumph.  That is if you find the fortitude to stick to it and work hard to UnSlump yourself.

After finishing the story, I put the book back on MY bookshelf.  I reflected on the Hakken Kraks I had vanquished and the ones that lay ahead.

I plan on reading it at least 1x year.  These are lessons that I need to remember as much as her.  And I know we will both succeed, it is  98 3/4 percent guaranteed.

http://www.amazon.com/Oh-The-Places-Youll-Go/dp/0679805273
https://www.goodreads.com/work/quotes/2125304-oh-the-places-you-ll-go

Metric Overload Syndrome

Following the adage, "what gets measured, gets managed," many managers (my early CEO-self included), think that every every process and every data point needs to be distilled into a "metric" that is tracked and reported and monitored.  That approach inevitably leads to "metric overload" a syndrome whose primary symptom is an abundance of numbers and graphs and trends followed by a general lack of true understanding.  Some managers get so caught up in the process that they spend as much time designing dashboards and driving their teams to assemble and mine increasingly meaningless and arcane minutia as they do actually growing the business they are trying to measure.  This "metric overload syndrome" has only gotten worse as data has proliferated and databases grown.

Complex dashboards filled with esoteric data points can actually serve to distract attention from the true key drivers of a business.  They can lull managers into a false sense of security thinking that "ok, we are tracking everything so we must have a handle on things."    In fact, a preponderance of metrics generally means that the team doesn't truly understand the essence of the business at its core.  They are monitoring many things leading to a lack of focus meanwhile the business is stalled, profitability flat and true product innovation is nowhere to be found.

In short, "management" may boil down to measurement but leadership certainly doesn't.  Leadership is found in understanding a business at such an intuitive level that you instinctively zero in on the small number of elegantly simple metrics that truly reflect the health and prospects of a business.  It is easy for a smart person to come up with a lot of things to track and monitor.  It takes far more effort and work to get to the point where a few well-designed, simple and instantaneously understandable metrics are used to illustrate the trajectory of a business.

One salient example of this point for me is the progression of how we tracked customer AR during my tenure at MDeverywhere.  Initially we started out measuring all the usual statistics- days in AR, percentage of AR over 120+, percentage of AR between 90-120 days, patient AR vs. payor AR, AR by payor, AR by provider, AR by procedure and/or visit type, etc.  As our customer base grew, this report also grew - exponentially.  It soon got to be such a tome that it became very time consuming to produce at the same time that it was becoming increasingly useless as a tool for senior management to quickly assess the health of this key process.  And while each of these data points are interesting and potentially important in specific instances or scenarios, they all represent lagging indicators - indicators that tell you there is a problem only once it has been around awhile when it is likely to be difficult to fix.  

Then came a big "aha" - instead of tracking a complex and muddy soup of metrics that often hid the underlying meat of the matter, we realized that the health of these important processes could be boiled down into three simple numbers - all of which should be at or very close to 100%.  Clean Claim Rate, Percent of Denials Worked within 5 days and Initial Resolution Rate.  A quick scan of three numbers for every client every month with anything below 100% flagged, told us immediately if there was an issue brewing - one that would have shown up eventually somewhere in the morass of lagging indicators that we used to track.  What was once of report of 100 pages or more became a report of 2-3 pages.  Not only were we finally tracking the right thing - enabling us to quickly zero in on issues before they became problems, we freed up precious time and mindshare to tackle other issues requiring real creativity and blue sky thinking.

This is just one example of many that I can think of throughout my career.  Whenever something seems overly complex or complicated, I know that we haven't yet done the hard work to distill it to its essence, that we don't yet fully have a handle on it.  Complexity is easy, it is simplicity that takes hard work and leadership.

When a Company has Grit

There has been much written recently about the importance of resiliency or grit in achieving anything significant.  Angela Duckworth cites it as the most important determinant of success in her now famous TEDtalk.( http://www.ted.com/talks/angela_lee_duckworth_the_key_to_success_grit). She says... "In education the one thing we know how to measure best is IQ, but what if success in school and in life depends on much more than your ability to learn quickly?"

In her research on West Point cadets, sales people, school children and school teachers, Duckworth states that "there was one characteristic that emerged as a significant predictor of success - and it wasn't social intelligence, it wasn't good looks, it wasn't physical health and it wasn't IQ.  It was grit." She goes on to define grit as "passion and perseverance for very long term goals."

And while one can think of many examples where that statement is certainly true for individuals - Nelson Mandela, Winston Churchill, Steve Jobs all immediately come to mind for me; I think grit is equally important for companies.  Companies have a "life" cycle just like people do.  And they rarely progress in an even, predictable trajectory.  There are ups and there are downs.  Highs and lows, Successes and failures.  Good years and bad.  And just like the response of individuals to setbacks and hurdles will help determine their ultimate success; the response of companies to a product failure, a customer loss, a major vendor or partner dispute funding challenges; will ultimately determine its fate.  

At MDeverywhere, 2012 was one of those years when we learned what we were made as a company by how we handled the challenges that inevitably came following years of tremendous growth and progress.  We had our fair share of challenges that year but we also proved our mettle and fortitude by exiting the year stronger and more prepared for the opportunities and new challenges ahead.

What we had set out to do was hard.  As is anything worthwhile.  There had been set backs along the way.  There always are.  Truly successful companies  learn from those setbacks, are better ultimately for them and never lose sight of the goal.  Determination, resiliency, grit - call it by whatever name you prefer - it matters.  We  had struggled in the wave of system transitions driven by the incentives to drive EMR implementations in the government's HITECH act; we had lost a friend and colleague too soon to a sudden heart attack; and, we had to do some painful restructuring that had us saying goodbye to others as we prepared for the future. The struggles were real and the resulting changes difficult.   But we knew that we were a part of something special.  That we had that unique magic that happens when a set of individuals melds into a team to build something special – to build something lasting.  

Sometimes when you are working your way through a tough transition, it is easy to lose sight of the accomplishments and the progress.   It is often during these times of struggle that the most significant leaps forward are made.  Such was the case with 2012 for MDe.  Our team made some significant leaps that year that helped us meet our challenges head on and got us back solidly on a posture of growth and expansion.  Although the year was hard and there were many sleepless nights, the company was better off for having gone through it - coming out stronger and more confident of in our staying power.  And I was a better leader for all the same reasons.  

A Top 10 List Especially for CEOs

Everyone loves "Top 10" lists ... from Ugliest Dog to worst Celebrity outfit.  This time of year especially as we wind down the year, there appears to be a top 10 list for everything.  So I thought that I would jump on the bandwagon and post a Top 10 list for CEOs in 2016.

1. Build the right culture, hire the right talent and foster a healthy team dynamic.  The Companies that outperform competitors and grow faster than their market create an environment where individuals are encouraged to achieve their full promise and where teams operate at full force.  A team of talented people communicating effectively and truly working together with all the collaboration and friction that implies, can achieve great things
2. Increase revenue growth through focused consistent sales strategies designed explicitly to increase yield on sales spend and drive predictability and peak effectiveness.  Management of a sales team should be as crisp as a military operation
3. Drive higher revenue yield within the customer base through proprietary product extensions and rigorous inside sales iniatives
4. Leverage partners to speed up new product offerings and open up new distribution channels
5. Ensure high customer retention rates.  First - measure it and be honest about the facts.  Second - work to drive a customer-centric culture starting with how often you visit customers
6. Prioritize new products vs. upgrades to existing ones through a disciplined process of assessing market requirements and competitive offerings.  Don't be afraid to "shift the development curve to the left" with some blue sky thinking
7. Drive operational excellence throughout the organization through a commitment to transparency and adherence to the rigorous measurement of the right leading metrics
8. Improve gross margins through process redesign, automation and rigorous productivity standards
9. Accelerate growth through synergistic acquisitions
10. Review balance sheet for opportunities to unlock capital and/or reduce its cost.

Finding Growth at Home...Mining the Base

Current customers are often the best – most overlooked – source of revenue for a Company. Many organizations and sales leaders have a "one and done" mentality. They close a sale and move on quickly to the next opportunity. That often leaves no one in the organization accountable for selling into the base for incremental revenue opportunities.   This happens especially when managers perceive there to be a "greenfield" opportunity with a new product or service and race off with a land grab mentality. "Let's grow our installed base first and worry about incremental revenue opportunities later" is the often unconscious logic.  While growing share initially is likely to be very important with a new product or service, not making the effort early on to embed the ethos of customer expansion is an opportunity lost.  What most managers don't realize is that if you aren't growing a client, you are losing a client.

Most companies don't focus on the revenue opportunities associated with existing clients until such point as new sales begin to get harder and/or slow down – either because of market or product dynamics, sheer saturation or increased competitive efforts.  Once at this point, they belatedly turn attention to the base in the hopes of maintaining traditional growth rates. But that is often too late.  The time to be begin the process of maximizing "same store sales" is when the company is still young and the customer base still small. 

Companies need to have the same sort of rigorous attention to metrics and pipeline management and sales cycle process with current customers as they do with new customers. And this isn't built overnight. That infrastructure should be developed once the first customers sign. Your customers also need to be "trained" to expect new product enhancements and new service offerings.  They need to learn to expect that the relationship will continue to include contract expansions. Having the conversation early on with a customer that there is the expectation that the relationship will grow if the product exceeds expectations will help pave the way for incremental revenue.  If you haven't talked to a customer in the last five years about add on business and lob in what would effectively be a "cold" call, you are very likely to be met with a quizzical and potentially hostile response. It is the sarcastic "Well, nice to hear from you!), response.

One of the questions most companies need to consider when tackling this opportunity is whether to use the existing salesforce to pursue both customer add ons and customer extensions as well as new customers. And the answer to that generally lies in the nature of the product or service provided. If there is intensive ongoing support for the service, it would be natural to have those providing the support also look for and incentive to sell ad on opportunities.

Where this effort should reside is also a function of what percentage of new revenue every year can be expected to come from the customer base.  That number will shift overtime as a Company penetrates the market and new customers become more scarce and harder to close. In the early days, the sales team is often better focused on new opportunities where contract value and sales cycle is likely to be higher and longer respectively.  Sales people are highly efficient economic creatures.  They will zero in quickly on where they can generate the most commission in the shortest amount of time.  How you set up incentive comp will drive behavior and focus much more effectively than any management dictate.  If add on sales are perceived to be incremental and smaller, they are likely to fall by the wayside as the sales team focuses on the new deals that drive their comp higher in chunks.

A Company risks having add on sales become an afterthought  if one group is doing both add-ons and new sales and is a mistake many companies make.  In my experience, it is best to have an inside sales/support organization that is incented and organized to increase the net annual revenue per client - with product extensions, the addition of new users or better contract terms at renewal. 

There should be an explicit revenue goal for expansion of the base.  If it is a combined support/add on team, you may  want to also have a client satisfaction goal.  This may not be necessary as the team will figure out quickly that the only customers who buy more are the happy ones.   The "new" sales team's comp can be more heavily weighted towards incentives for chasing the "net" new customers.  The base/incentive comp ratio may be different for the two groups as a result.

We took this approach at MDeverywhere giving our Account Management team (which historically was focused on providing service support) a quota for increasing the revenue for their assigned client base. They could bring on additional users or additional groups, they could sell add-on service offerings. Or they can do all of the above. This effectively accomplished two things - it focused the support team on developing relationships at the right levels of an organization and on solving the big problems for clients that were blocking incremental sales - driving home that a growing client is a satisfied client.  Growth and retention go hand-in-hand.   It is a virtuous circle

The sales team, while initially grousing about losing this potential source of commissions; eventually recognized that they had been spending little to no time on this anyway. Their incentive comp plan was restructured to more clearly incent the closing of net new business.   We gave our Account Management team extensive training on sales techniques but, frankly, not all of them made the transition successfully. Some were uncomfortable with asking for new business and were reluctant to consider themselves "sales people." But the more creative and aggressive members of that team were excited about the opportunity and realized significant increases in their annual compensation from driving a great deal of new business - very profitable business - for the Company. Once those commission checks started flowing, it didn't take long for it to become part of the Company culture that "everybody sells." 

Sales As a Science

A successful business model is one that effectively translates customer value into profits and company value.  A successful sales and marketing model is one that helps make that translation seem seamless.

Understanding the true economic value proposition of your product or service to customers and successfully reflecting that value in product position and pricing are critical precursors to an effective go-to-market strategy.  But it isn't sufficient to stop with the strategy and messaging - building an effective sales organization requires applying scientific-like rigor to managing the sales process.  Although the process of selling and closing includes intuition and "emotional intelligence" on the part of the individuals involved, the process of managing a sales organization to produce predictable performance comes down to rigorous management of metrics and numbers.  Increasing the "yield" of new bookings to sales spend requires a deep understanding of:

• Buying patterns and decision making processes
• Market segmentation - who is the b ideal purchaser and why?
• Sales cycle timing and milestones
• Customer acquisition and implementation costs
• Sales process at a very detailed level
• Price sensitivity in various sectors of the market and the right economic levers to pull to close a profitable sale
• The relative value and profit impact of bundling vs. a la carte pricing

When I joined MDeverywhere as CEO, a systematic review of the sales and marketing model led to a wholesale restructuring from a traditional region-based, "feet on the street" model with all reps handling small as well as a "enterprise" accounts."  The results from that approach were predictably average.  Reps were doing an average of 3 meetings a week with new prospects, the average contract value was $35 K reflecting the lower resistance of smaller accounts for reps and "yield" - new sales vs. sales spend was a paltry 1.2 x.  We were spending almost as much on sales-related expenses as we were bringing in every year in new revenue.  In our restructuring, we concentrated lead gen in an internal team, put the reps on a "next up" rotation without concern of geographic region, created an Enterprise team that focused on larger, more complex sales and transitioned from a "feet on the street" model to one focused on online demos.  The impact was immediate - meetings with new prospects every week went from 3 to 12 for each rep, average contract value went from $35 K to $120 K and our sales yield grew to 3.5.  To support all the changes, we implemented a sales management tool to give much greater visibility to the activity levels and pipelines of each rep.

Crossing the Chasm to Predictable Growth

Companies need to "build muscle" when they compete in the rigors of the market and strive to meet the demands of customers.  Scaling an organization from a concept or "early adopter" phase to a self-sustaining company serving the needs of a large customer base is the chasm most companies fail to navigate.  The idea is generally good, the market is ripe, the product "works" but making the transition to self-sustaining scale successfully often requires a wholesale change in how managers think, how processes are designed and how performance is measured.  And a complete rebuild of the basic infrastructure and plumbing supporting the company - basic things like a robust general ledger, a full-function CRM system.  Things that aren't sexy but are the "roads and bridges" of a Company.

When companies scale - processes, systems and organizational structures can all breakdown under the weight and pressure.  This will ultimately stall growth as sales leads drop through the cracks, operational performance and service levels suffer and, finally; customers become frustrated and leave.  Creating an infrastructure to support sustainable growth requires planning, investment and experience.  Maintaining a competitive cost structure in today's environment often requires the added complexity of accessing offshore capabilities and capacity.  Having created an organization in India and built it to 450 employees, I have lived through the arduous process of setting up an offshore operation and lived to tell about it.  There are many pitfalls and places to lose one's way.

An early focus on Operational Excellence helps ensure a company experiences expanding operating margins as it grows its top line - no small feat.  High profit margins help ensure that rapid growth rates are self-sustaining as G&A expenses ramp to support the growth.  A robust operational model requires the building of a strong organizational foundation for revenue growth and enhanced profitability through increased productivity.  Gross margin and operating profit are "lagging indicators" that reflect the results of how a company is performing every day on the key operating metrics that drive the cost and quality of a product.  Defining those 2-3 key drivers of cost in an operation is a critical precursor to understanding what truly needs to be measured and managed.  Models need to go beyond the financials - which are lagging the indicators - and focus on the leading performance indicators in the business.  It is those leading indicators that tell you how much further you have to go in crossing that chasm.