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