If you asked most CEOs, they?d probably feel lucky to name one truly exceptional business mentor who has influenced (or continues to influence) their entrepreneur leadership styles and business philosophies. So maybe I should consider myself exceptionally fortunate. In my 25-year software career, I?ve had at least three.
Mike Fields, who I first met at Applied Data Research and later followed to Oracle, taught me how to work with people, imparting knowledge that continues to help me motivate and mange them to this day. Former Oracle president Ray Lane, who is largely credited with the company?s incredible revenue growth in the 1990s, taught me to take a more operational approach to business. Larry Ellison, the legendary (and polarizing) co-founder and CEO of Oracle, taught me to think outside of the box and, when it?s necessary, how to be a contrarian.
In a lot of ways, I?m now an amalgam of those three mentors, with a dash of my own personal entrepreneur leadership style mixed in. I?ve learned from experience, from success (and mistakes), and from watching other senior leaders manage their teams. In the end, it?s cumulatively led to me developing 10 specific business philosophies and entrepreneur leadership lessons that I?m planning to share over the course of the next few months on this blog. You will find each lesson listed as a chapter below. Each chapter will be updated below in order, and in the meantime, short previews are provided for the chapters to come.
Change is the Only Constant You?ll Face: 3 Secrets to Successful Business Change Management
Change is inevitable in business and you need to build your business model around it. Hire people who are comfortable in a world of change. Great businesses are able to grow in good times and bad, largely because they?re prepared for the unpredictable.
Indulge me for a moment while I share a quick story about my time at Oracle in the late 1990s. Back then, I was the Executive Vice President of Oracle North America, and the company was on a bit of a tear. In December of 1998, the company announced that its profits were up a record 46 percent in its second quarter, while its revenues from its two businesses ? database and applications ? had reached an all-time high of $8 billion.
Needless to say, things were good at Oracle. The company was growing in an increasingly competitive market, all while maintaining incredible profitability and its position as one of the top ? if not the top ? technology companies in the world. With that in mind, what our executive team decided to do in 1999 might surprise you.
We restructured the business entirely.
There was nothing particularly wrong with Oracle. The company was obviously performing well. But we thought the company could do even better if we could somehow improve its historical operating margins. It took some in-depth strategizing and a few fairly drastic changes, but the plan worked. Within a year, Oracle increased its margins by 11 points and the company now expects margins that are nearly double what they were in 1998.
Those are pretty incredible margins for a company that didn?t ? and still does not ? have a monopoly. Ultimately, the cash generated from those margin increases allowed Oracle to execute its aggressive acquisition strategy (beginning with PeopleSoft) and the business now rakes in more than $37 billion in revenue annually. Not bad for a company that, 14 years ago, had no real motivation to change.
Therein lies the lesson that expansion-stage CEOs and founders can take away from this blog post. In business, change is the only constant you?ll face. And if you don?t handle business change management effectively ? in good times and in bad ? it can sink any momentum you?ve created.
If you?re struggling or your market is down, change management is especially critical because growing companies are not afforded the time to weather the storm of down markets or decreased demand. Offensive change when the company is doing well is a whole lot easier to manage than defensive change. I know because I was on both sides of the equation during my time at Oracle.
I?m not suggesting that you overhaul your business entirely ? change your mission, vision, and values ? or abandon your product strategy with every minor bump in the road. I am suggesting, however, that the best companies ? the ones that experience exceptional long-term success ? are able to quickly recognize the need to change and make the tweaks necessary to help their business continue its growth trajectory.
So, what does successful change management require? Here are three tips I?ve learned throughout my career:
- Top down support from the CEO level down to the senior executives below the CEO is what ultimately drives successful change. When the changes are major, you need to create a burning platform scenario that will encourage a sense of urgency.
- Clear, consistent, and transparent communication by all executives is critical to explain why the change is necessary. Throughout the change process, it?s important to regularly and clearly communicate the reasons for change and reinforce that message to your team so they understand why you?re taking the hill in front of you.
- Quickly identify the senior team members who don?t buy in and encourage and support them to leave the company if they refuse to embrace change. This means you may lose some very good people who helped you get to where you are, but those people won?t be as valuable going forward if they aren?t willing to help you get to where you need to be.
At the end of the day, business is a little bit like the growth rings on a tree. Every year, something changes ? it could be your product, your top competitors, your customers? preferences, or any number of things. The best companies adapt to those changes, reinvent themselves when change requires it, and find a way to grow in good times and bad.
So, is your company capable of handling business change management? Do you have people in place who will thrive in a world of change, or will they fold when the stakes are at their highest?
People Are Your Only Sustainable Strategic Advantage
Regardless of how great your products and ideas are, your people ultimately build, sell, and support them. The world?s best companies are able to continuously recruit and retain outstanding people and cultivate employee loyalty.
Listening is the Key to Understanding
Unfortunately, too many CEOs spend more time talking about themselves or their company and not nearly enough time listening to their customers, competitors, partners and employees. Listening to those people is the only way to really understand which direction your company should be going.
Customers are Important, but They?re Not Always Right
That statement may be contrary to everything you?ve heard or been told, but it?s true. Just because a customer wants, needs, or expects something doesn?t mean you should deliver it. Doing so might ultimately take your business in a direction it shouldn?t be going.
?No? is an Acceptable Answer (with an Explanation)
For a lot of startups and early stage companies, this isn?t an easy philosophy to adopt. As young companies try to grow, the temptation is to say yes to everything in the interest of signing up new customers and keeping existing customers and employees happy. Doing that, however, can distract your business from its true mission and run it off course. The truth is that most people will understand ?no? if you can easily answer, ?Why not??
All Strategies are Transitional
Because things always change (see point #1), your strategies must, too. As product lines, customer needs, and markets evolve, you need to evaluate the strategies you?re using to address them. If those strategies are ineffective or out of date, it?s critical to fix or change them as soon as you?ve determined they are no longer effective.
Focus on the Three Things that Give You the Best Return
A lot of businesses (especially early stage ones) try to do too much. The bottom line is that you can?t do everything well and you can?t do it all at once. CEOs must look at the three things that can impact their companies the most. Outside of those three things, nothing else matters.
Don?t Avoid Making Decisions
This might seem like an overly simple philosophy, but the number of executives and senior managers that are afraid to make decisions might surprise you. Nothing can paralyze a business more than a leader who is tentative or hesitant about making decisions, regardless of how difficult or scary they might seem.
Business is a Marathon, So Make Sure You Can Survive the Race
As tempting as chasing monthly quotas might be, the best business leaders are able to focus instead on sustainability and long-term viability, refusing to sacrifice their company?s long-term health to win a short-lived sprint.
Your Reputation is Your Integrity ? Don?t Compromise It
That?s a truism for life as much as it is for business. Your reputation is the only thing you can take with you throughout your career, and maintaining your integrity allows you to cultivate that reputation. Far too many people are willing to sacrifice their integrity for a quick dose of success. Cheating your integrity, however, will almost always bite you in the end.
While some of those entrepreneur leadership lessons and business philosophies might seem obvious and self-explanatory, you?d be surprised how often they?re ignored. In each of my upcoming posts, I?ll dive into each topic a bit more and offer some anecdotes from my career that better illustrate them.
Have some lessons or philosophies that you would add to that list? Feel free to leave them in the comments section below!
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