Podcast – #Winning – Finance 101
Had a great chat with Mackenzie talking banking, finance and of course football. Have a listen!
Had a great chat with Mackenzie talking banking, finance and of course football. Have a listen!
I got cornered at work the other day (socially distanced, of course) asking if I am still blogging. <Gulp> That’s not a good sign that I’ve been diligent about finding time to share the stuff on my mind lately?!? Thanks to both of my regular readers for the reminder to get back to writing (insert mental ass kick picture)……
I like spring the best. It is a time of personal renewal. The weather is nicer and I enjoy getting outside and exercising more. The golf courses open back up and I love being able to walk outside for a few hours with my own thoughts. Professionally, it is also “Annual Meeting Season” which is a great way to look back on past work and think boldly about the future.
This year, I found myself a little more reflective on my tenure as a recovering “First Time CEO”. There has been much change and turnover in CEO roles in our industry lately and it has caused me to reflect on my ten years being a CEO at Conexus. There are lots of lessons in my first experience as a Chief Executive. Here are a few lessons from a recovering “First Time CEO”, along with some “Rookie Tips” for you to think about when you are faced with a new, expanded role:
It’s Can Be Lonely
Once you become a CEO, you don’t really have a Team of “peers” any longer. The relationships are just different than they used to be when I was not the leader of the team but a member of the team. It takes a long time to get to the point where people are brutally honest with you about your ideas, your performance and your leadership. In fact, some might never be as honest with you as they are with their other colleagues. I have lots of examples in my tenure where a colleague finally shared some feedback that was hard for them to say. I wish so much that they would have had the courage to tell me in real time or as soon after as was practical. After a decade it gets better but keep in mind that over that time, you also add new members to the Team and lose members of the Team, so the journey to get to the point that they all share openly with you takes constant effort. The lack of direct feedback makes it a lonely place. Rookie Tip: Find a network of peers (in my case, it was other CEO’s from my community and my industry) that you can connect with, learn from and commiserate with. It won’t replace what you had as part of the Team, but it will help.
You Are Only Human. And Flawed. Just Like Everyone Else
As a first time CEO, I recall vividly being so afraid to make a mistake. All I could think about was 1,000 employees (in the case of Conexus) talking about how some “wet behind the ears” new CEO had just screwed up. The irony is that the sooner you recognize your own vulnerability and imperfections, the more likely people are to want to follow you. The easiest way to do that is to be honest about your mistakes and your own shortcomings as a leader. People want to work with and for other humans – warts, flaws and all. Last year, I wrote about our Fail Forward awards and our own learnings in recognizing the opportunities from failed innovations. Rookie Tip: The sooner you can model the honesty and transparency around failing and learning, the more acceptable it will be in the organization to try new things and not expect perfection. Your first broad public admission of failure to your work family will be very hard. But I promise, it gets easier. I speak from experience.
Working With And For A Board Is Very Different
I recall my first Board meeting like it was yesterday. It was October 21, 2011 – just four days after I started and I was scared stiff. I had been to lots of Board Meetings but never as a CEO responsible for the entire organization. Adding to my stress was the fact that we spent much time at that meeting talking about a failed project that had cost the organization a significant amount of money at the time. In my ten years working with a Board, there are few things to note. First, they are just real people trying hard to do good work and make a difference. They are not there to make your life hard or miserable, merely to oversee Management and to create healthy tension in the most significant decisions that organizations face. Rookie Tip: Embrace the healthy tension. Respect the role they hold and do your best to serve them as the representative of the owners. Ask permission before you share your opinion on decisions they own and solicit their candid feedback on the decisions you believe you own. Remember also that they are humans just like you (see above). When you work for a Board, there will be a number of opinions on pretty much everything you consider or propose. Not everyone around the Board table will always agree with the decisions that are made or how you implemented those decisions but you work for the Board as a collective not individual Board Members and it’s really important to learn the difference.
What You Do Matters Way More Than What You Say
When I talk about leadership now to younger, emerging leaders, I speak about the “backpack of leading”. Like everyone else, the Instagram stories of CEO’s do not reflect the totality of the work that is done. My day is not just engaging with community organizations, governments and watching Cultivator pitches. In my case, 1,000 people are watching my feet way more than they are watching my mouth. How I behave matters. For example, I can suggest on a video communication to the company that it is really important to create a coaching culture where development of our human talent is critical. If it is so critical, I better find the time (see below on time management and choices) to observationally coach, to mentor and to continue developing myself. If it matters enough for me to ask others in the organization to do it, it matters even more that I do it. Consistently. Rookie Tip: Don’t let your ‘little birdie inner voice” tell you that your leaders are more self sufficient and they don’t need coaching just because they have some fancy title. I started to do less coaching of my colleagues a couple of years ago and then ended up having to apologize for the error. If it is important for the organization, it’s equally important for people to see CEO’s lead by example. Imagine now when I show up unannounced to the Team Meetings of my direct reports and let them know I am just there to invest in my colleague and provide them some feedback. It becomes a powerful moment of reinforcement and my colleagues regularly tell me how much the investment of time means to them and their development.
You Will Get More Credit And More Criticism Than You Deserve. Share the Credit and Wear the Criticism
Are you a sports fan? Have you heard the analogy that football quarterbacks get too much credit when the team is winning and too much criticism when the team is not? Being a CEO is much the same. When the organization produces great results or a winning idea, people generally want to give the CEO credit. Conversely, when things don’t go so well, CEO’s get much of the blame. The best CEO’s I have learned from figured out how to ensure that the credit gets spread around to those that worked so hard to create that result. Conversely, they also stepped up and took much of the blame when the organization was not able to succeed for whatever reason. Rookie Tip: Find ways to spread the love and also to shoulder the criticism when necessary to allow the organization to learn, grow and succeed from the setback. It might not be fair but it is part of the deal.
You Will Be Expected To Know Everything And Guess What…You Don’t Know Shit 🙂
When you get the opportunity to lead new areas of the business, the natural reaction from new leaders is to try to convince those working in that area that whomever hired you, made a good choice. You want to show them that you are technically brilliant in their area of responsibility. Guess what – as a first time CEO, you don’t know shit. Looking back to my own experience having grown up in the operations side of the business, I had never led (i) a human resources department, (ii) a risk department or (iii) a finance department. I remember vividly my first Executive meeting at Conexus, having started the meeting talking about what my background was and where I thought I could add value – operations, strategy, leadership and innovation. Then I quickly acknowledged openly the areas of the business that I had not led before and how much help I was going to need from the team in those areas. My new colleagues shared how they appreciated the transparency and at the same time, how they would work hard to help me learn other parts of the business. Rookie Tip: I had a great mentor at the time and I remember him telling me not to pretend to be an expert in all areas of the business. He told me that they already know there are areas I likely am not an expert in and trying to convince them makes little sense. He was so right. The early admission helped me set myself up to learn quickly as opposed to trying to portray a level of competence that did not exist.
Make Great Choices With Your Time (Wellness, Hobbies, Thinking Time)
When I first moved to Conexus, I immersed myself in the business. My family did not relocate for some time after I took on the job and I used the extra alone time to read, learn and meet our team and our communities. The first few months were gruelling. The problem with that was that it was not sustainable and it really didn’t model what high performing executives do to be successful. I forgot the other things I needed to do in order to be a consistent, healthy, high performing leader. Therefore, I didn’t eat well, sleep well or exercise nearly enough. I also did not spend nearly enough time thinking about strategy and really owning the part of my role as Chief Strategy Officer. Eventually, I had forgotten how to incorporate those things into my routines. It took me a while over the first few years to regain those habits. Rookie Tip: Go into any new role protecting fiercely the things you need to do for yourself to be at your best. Know them, practice them and make them known to those around you so that you can get feedback when you slip.
Your Job Is Not To Finish, But To Leave It Better Than You Found It
Transforming organizations is never done. It becomes a very hard mental game when there are always new challenges to respond to, new opportunities to seize and a constantly changing environment to do it within. As an emerging leader, you sometimes get opportunities to put a bow on some work and call it complete or paint it done as Brene Brown would say. As a CEO, you will never get an opportunity to finish the job. Rather, you have to accept that your success will be measured by whether you left the organization in a better place than when you were hired. Rookie Tip: Make yourself slow down from time to time to recognize the progress that the organization is or has made. It is a bit like watching your kids grow up. Some days you wonder if they are learning new skills or growing into the adults you want them to be. Then, when you look back at pictures of them from a few years earlier, you quickly realize how different they are and what substantial progress they have made. As a CEO, force yourself to look back at the “pictures” of the organization from years past and realize the progress the organization has made. You will never be “done” but this progress will fuel you to keep going.
Ten years after joining Conexus, I think about my first few days as a CEO from October 2011 often. I look back and wonder how I ever survived the early years of finding my way and learning how to be a better CEO. I should probably thank the Board of Conexus from back in those early years for giving me a chance when I clearly had much to learn. I am still on the journey to become a better leader and a better CEO and like the organization, I will never be done.
Taking time like this to reflect on the last ten years reminds me of all of the lessons and also motivates me to continue learning and growing — right along side of the organization. What have you learned on your leadership journey that you wish you would have known earlier? Drop a comment in below so that we can all learn together.
Recently, I had the opportunity to chat with Wellington Holbrook from Connect First Credit Union. I’ve known Wellington for many years and was really excited when he found a role in cooperative finance working in Calgary. Wellington and I chatted about how credit unions are different, our ability to innovate for the customer and how we can be a catalyst for local economies. Have a listen:
Let me know what you think. Drop a comment below
A couple of weeks ago, I had the pleasure of meeting Hilton to talk about transformation in the context of leadership and culture. It was a delight to get to know him and read some of his previous interviews with Microsoft, Starbucks, Southwest, Tangerine and Coca-Cola, to name a few.
CULTURE & TRANSFORMATION – Building a Culture of Agility and Resilience at Community Bank Conexus
Within Canada’s ecosystem of financial services organizations, cooperative banks and credit unions hold a special place. While most people are familiar with Canada’s “Big 5” banks, as they all have an international presence, there are over 700 credit unions and cooperatives operating in Canada today. Uniquely, the principal difference is that the members of these financial institutions actually own the bank and aren’t shareholders like the publicly traded “Big 5”. I had the opportunity to chat with Eric Dillon, CEO of Sakatchewan-based Conexus Credit Union and discuss how the unique structure – and culture – of community credit unions gives them significant advantages over their larger public competitors. We also get into the critical need for CEO’s to put on their mask first and how a culture transformation can, and should, feel like a 61-hour drive. It was a fun and fascinating chat from start to finish.
HB: Morning Eric. Appreciate you getting up early for this chat. I deeply admire anyone from Regina Saskatchewan in the middle of a Canadian winter because I imagine it’s always -40.
ED: It’s not -40 all the time, we got up to -20 the other day. <Laughs> No denying we’re a hardy bunch out here in the Prairies.
HB: No offense but I think I’ll postpone my visit until July. Getting started can you tell me a little bit about yourself and a little about CONEXUS for folks that might not be familiar with the business?
ED: Sure. In the simplest terms, and the way I talk with our team, is I’m head coach and chief cheerleader.
That that’s really how I see my job and my role. Beneath that I’m the CEO meaning I’m ultimately accountable for how the organization shows up, how it behaves and the results we deliver to our customers and members. We were talking football before the call (Go Bills!!) but the classic, perhaps over-used metaphor, is I’m like a quarterback; when things go well, we get too much credit. And when things go poorly, we get much of the criticism. The reality I’m just the one face of a thousand people that are working their asses off every day to do interesting things. Since leaving University I’ve worked in the cooperative banking industry.’ve been in this role for almost a decade at Conexus and prior to that at another Credit Union called Servus.
HB: I’d love to flesh out co-operative banking, particularly against the backdrop of other financial services institutions. What makes the sector different and in particular, what makes Conexus different even within the cooperative banking group?
ED: Happy to. The easiest way is to describe cooperative banking vis-a-vis others in the sector. So versus the publicly traded or very large banks, there is a point in my mind at which the interest of a financial consumer and the interest of a shareholder diverge. The beauty of cooperative banking is the owners of the bank are also the customers. So, it’s much easier for me, as the CEO of a cooperative bank, to build the organization in alignment with the needs of the consumer and the shareholder. Cause they’re the same person. I think the challenge for the CEOs of publicly traded banks is there comes a point at which those two audiences diverge, and we know, in that model, the shareholder is often the one meant to win.
One of the other significant advantages for co-operatives is the capital is much more patient. There’s no quarterly earnings call that we need to meet. We’ve got people who were invested in the institution who really want us to build generationally for the next generation of member owners.
That’s a real luxury for us as leaders that you’ve got this kind of patient longterm view of how to build the organization. One of the other areas we’ve got clear alignment with our board is to really root ourselves in purpose and redefine, what does it mean, in 2021 and beyond, to be a community credit union. And what role should we play as a catalyst for economic activity.
HB: I appreciate you must breathe a sigh of relief not being tethered to a 90-day analyst call but that doesn’t mean there isn’t real pressure to perform and grow at Conexus. Some people, mistakenly, think of Credit Unions as these slow and lumbering organizations which couldn’t be further from the truth. Talk to me about those drivers and where you see growth coming from.
ED: I think that (mis)perception does exist. However, the subtle but important difference is that our race is not around quarterly earnings. Our race is around relevancy and to make sure that the organization really delivers on what it means to help people with money, not to see consumers as a source of profit, but to see an opportunity to actually help people be more healthy financially.
Conexus has completely stepped into this different view of what does it mean for somebody to succeed financially and to ask our members “what’s your definition of financial wellbeing?” Interestingly, in some intensive research we commissioned, what’s more important to people is a kind of emotional connection with money as money enables them to live the life they want to lead. Not their Net Income. And the realization that the life you want to lead will be different from mine and will be different from others.
At Conexus that’s 150,000 different people with 150,000 different lives. That’s the basis on which we guide the company, not seeing people as a source of the next credit card sale, or a mortgage sale, but rather to see the family, you know; Susie and Jim and their kids, and here’s their picture today and how can we help them be more successful financially? Or particularly in times like this, perhaps more resilient financially, which we believe is a really important.
HB: I adore that orientation that goes deeper than seeing your members as more than a walking product up-sell. Putting my bias on the table, I’m going to say that deliberate strategy inherently has got a culture that supports it. So, Eric, I’d love to understand what does culture mean to you as a business driver and how have you, as the CEO of Conexus, seen it as something that allows you to deliver your strategy?
ED: Well, as you and I talked earlier, we’ve been very deliberate and conscious about the strategy and the culture we need to enable the strategy we have. But I think its vitally important to ground any culture effort against what’s happening in the market – and where is the market evolving – so you can build a culture with that resilience and adaptability. While it might be a cliché to talk about the VUCA-world we’re living in (Volatility, Uncertainty, Complexity and Ambiguity) I think there’s an unbelievably big competitive advantage for institutions, cooperative institutions of our size, who are really close to the customer to be able to quickly meet what the market expects and to do that in a way with direct customer feedback and direct engagement as a member owner. For the enormous financial institutions that agility is harder, if not impossible, to pull off.
So, if you accept that hypothesis, I think it’s a natural kind of extension to say what’s the culture that the organization needs to act like? Even though we are a 90-year old company, we must act like a startup that’s nimble and agile, that’s close to the consumer, is naturally curious about what they need and how we must orient ourselves to deliver on that.
We set out 10 years ago to radically change the way the organization behaves to try to capitalize on that strategic opportunity of quick and close to the consumer. I think we’ve made some progress for sure, but we have a long way to go.
HB: It’s absolutely a journey changing an organization, refining or modifying a culture. Talk to me about some of the explicit things you’ve done to move your people and culture along that journey?
ED: Couldn’t agree more and, to your point, we had to be intentional and explicit about it. The first thing we put our thumb on was organizations don’t change, key people inside organizations change. So, if we’re going to be markedly different in terms of the culture that we wanted, we knew we needed different kinds of people or different skills in the people that we had.
We made no bones about that and used unambiguous language like “leaders will change or leaders will change.” And I have to hold myself to that ethos and attitude too. As you and I talked about previously, my biggest personal fear is not evolving myself quick enough to keep up with what the organization will need in this VUCA world.
Case in point, I was doing interviews last week for an executive level role, and I was really poking at the candidate to show me a time where they’ve done something completely different, something unique to the industry where they were sophisticated enough to figure out the risks or the consequences and took that idea over the finish line to production in the market. You’ll be shocked at how few people with a legacy in banking can actually articulate those things. It’s remarkably few and far between to be honest.
HB: I love the notion of leaders will change or leaders will change. There’s something deliciously unambiguous about that. Coming into this role where you’re sandwiched between the Board, your employees looking for direction and reinforcement and your members looking for service and returns, how do you drive that thinking into the culture?
ED: My observation is that the natural inclination of many leaders is to go in quickly, steal or borrow content from others, and then try to adapt it to their new role. Fair enough, maybe things aren’t that strategically differentiated in some categories. However, I would say on things that matter greatly to strategy, where you need people who are actually going to create things and try things that have never been done before, you’ve got to be more deliberate, more conscious and definitely more patient.
Bizarrely we found when we started our journey that there was not a universally accepted definition of financial wellbeing in the history of banking. A category that is 350 years old. So, this tiny little bank from Saskatchewan Canada went out and built one. It took us four or five years to get our heads around it, but, but we built it from scratch. And, today, that “purpose” is the absolute rallying cry for the entire organization. And it’s not just some glossy picture hung up, you know, in offices across our province. If you were to call any of our employees and say, what do we stand for? It would be the first four words out of their mouth. There is absolutely no question about that. And what’s interesting is, from a talent attraction perspective, the people we’ve brought into the organization recently cited helping advance that purpose as a key reason for applying. That purpose absolutely connects us internally. So, it has become a magnet for people who feel similarly about the opportunity and what we’re trying to create at Conexus.
HB: That’s remarkable. I congratulate you Eric, because it is substantively different to numerous organizations who pontificate, but sadly don’t have the proof or evidence beneath the pontification. So congratulations, mate, congratulations.
ED: Thank you Hilton. If I had a nickel for every time, I pulled down a strategic plan, read it and thought my God, that sounds fantastic. <Laughs>. I talk openly to our team that people can think strategically, but strategically doing, you know, that’s what separates the average from the great in my mind. We’ve certainly had our own struggles figuring out a way to deliver on this beast but, I would say, that’s what differentiates the great organizations from the average. It’s the difference between saying, and the much harder task of actually finding ways to build that in to how they deliver to the customer.
When you start to think about here’s our strategy, the next question naturally is, what’s the culture required to deliver on that strategy? And then the most difficult question is, okay, how do we actually move the entire organization? Now you’re talking about recruitment, performance management compensation system and rewards systems, the way the organization communicates, how leaders show up to formal and informal events. The list goes on. It’s really easy as a leader to go, “Oh my God, that sounds hard to have to reinvent all these things”.The goal is not to blow them all up. The goal is to take them and consciously be moving all of them towards some desired future culture that’s never done. Don’t let the fact that it’s so daunting get in the way. Rather, be really clear about the culture that the organization aspires to have, and then just take small, but deliberate and meaningful steps towards that constantly and making that clear to the organization.
At Conexus, we talk openly about our strategy journey being like a trip from Regina to St John’s Newfoundland. (Dear Reader – That’s a 61-hour drive or 5,375 kilometers) Metaphorically, we’re not sure if we’re going to fly walk, drive, take some time to hike, or camp out for a few days. We’re not sure. All we know is that the direction is East. And we all need to be going East together. And, from time to time, we’ll decide together if we need a rest or we need a plane or we need a truck or whatever it is we need to get there. It’s inevitably going to change, but we’re constantly taking those meaningful steps towards Newfoundland and our final destination. It’s been a useful metaphor for us.
HB: That’s a brilliant metaphor. Purposeful but it does take the pressure to get the culture and transformation piece right straight out the box. Switching gears, one of the common refrains I hear about innovation or agility in the banking industry is how hampered organizations are by the wall of regulations they face. Is that a fair observation?
ED: There’s no denying we face regulations and regulators in this industry. And we should, we’re entrusted with other people’s money and their futures. However, I’ll give you an analogy that I use when I speak to our team about this. When my Conexus colleagues say the regulator is not going to permit this or that, my answer back is that we sound like (with the greatest respect) taxi cab drivers arguing about Uber. My unwavering perspective is that our customer’s expectations are going to drive the evolution of our business, not the regulator. And our job is to find smart and savvy ways to deliver on those consumer expectations while obviously maintaining trust and integrity of the systems. That’s our responsibility.
A recent example inside Conexus would be venture capital and running it inside a community bank. It has never been done before in Canada. And of course, the first conversation we had with the regulator, they had questions about how we were going to manage this business. Did they just come out and say, here’s your blanket approval go forth? Of course not, but we found sophisticated ways to demonstrate to them that we understood the businesses. We could manage the risks. It was consistent with our purpose, we’d hired the expertise to do it well. We’ve just had our first venture exit and had a hundred percent return in 130 days, that’s a very successful start to that business.
To my mind it’s just lazy and convenient to accept that “no” from the regulator and stop pushing. That’s not the culture we’re building here at Conexus because our customers and members in Saskatchewan are demanding more from us. Particularly around venture capital and nurturing home-grown start-ups. I can proudly say that the burgeoning start-up community in this Province could stack up against anything in Toronto, Montreal or Vancouver and we (Conexus) want to be a central part of that economic growth and that financial wellbeing.
HB: That’s an excellent example Eric. For readers outside of Canada who might not be familiar with Western Canada, particularly the Prairies, there’s a real can-do attitude that seems to personify the West. Is that just a romantic illusion? What role does that play in creating can-do cultures?
ED: Well, it certainly takes a certain resilience to face our winters – and our black flies. <Laughs> One of the really interesting things that came out of our research was that some of the best incubators and ecosystems in the world are located near farming communities. There’s an entrepreneurial reality about working in agriculture that isn’t immediately obvious but it’s definitely there. Farmers know all about facing left turns, whether that’s the weather or that’s prices or that’s international trade. So, I think to your last point, it’s definitely a bit of a roll up your sleeves, get shit done, kind of mentality here on the Prairies. So, in the people we hire, the people we attract, the customers and entrepreneurs we serve, it’s certainly part of our fabric.
HB: Love it. I always ask my interviewees what advice they have for their CEO peers staring down the barrel of the same challenges you do on a Monday morning?
ED: Sure. Maybe let me start with a bit about kind of current state, because it’s a very challenging time to lead companies. First and foremost, you need to kind of put your own mask on first in terms of wellness. You can’t set up for the organization and coach it through a very challenging business environment if you don’t find personal time to get fresh air, find time to think, find time to disconnect. This “working from home” thing has propagated a very dangerous “always on” mentality and that doesn’t lead to high performance. As CEO you must find time to rest relax, rejuvenate, and most importantly think.
I think the second thing is just be gracious. Always. Recognize that we’ve never operated in times like this. I’m going to make mistakes and I’ve made lots over the last 12 months of leading through a pandemic. My colleagues have made mistakes, but you just need to be gracious where, you know, everyone is genuinely trying their best. Anything we do that doesn’t look perfect, it’s not because of bad intent. It’s just because we’ve never seen, experienced, or lived through something like this before.
The last thing I would say though is, if as CEO, you think you’ve done all your learning and growth and development, it’s the contrary, it’s now that you need to be your most voracious learner reader, grower, developer of yourself, your knowledge. Again, my biggest fear as CEO is that I’m not going to reinvent myself as quickly as the organization demands and needs. It’s taxing as a leader to, you know, run the business and then reinvent yourself and you’ve got to still learn, read, explore.
Just like you’ve got to put your mask on first to be, you also got to put your mask on first to show the organization that this constant reinvention (of yourself) is now the new normal. I don’t think there’s any way around it if you want to genuinely lead your people.
HB: What a brilliantly pragmatic Prairie’s answer Ed. This has been a thorough delight. Appreciate your time mate. Stay safe and stay warm out there.
ED: Thanks Hilton. That was lots of fun. Appreciate you giving me an opportunity to tell the Conexus story.
Recently, I was asked to join the BC Young Leaders Group to participate in their annual conference this year. I am always honoured to be asked to hang out with the young, bright minds working in the credit union system. The energy in the room and the passion for the purpose of cooperatives is a great way to fill my cup for a few months.
Their conference is titled “Executing Innovation” and they specifically asked me to talk about things like:
I decided to call my presentation – Changing the “That Hasn’t Been Done Before” Mindset.
Here’s why 🙂
When I was in business school (both times), there was much discussed about how to “be competitive” and “measure” your success. The challenge was that the measurement or comparison was always against others in the industry. The measurements in banking were not that hard to figure out — return on equity, return on assets, assets under management, efficiency ratio, productivity, etc. In fact, I would suggest that if you look at the balanced scorecards of multinational banks, community banks you’d likely see much of the same. If you went further and examined financial cooperatives you might also be surprised to see a small collection of the most used metrics that describe success.
In the businesses cases that I worked on in school, the success of the fictional business was a measurement against peer groups or others that competed in the same “vertical” industry. Both the Professors and the Students continually made reference to “being competitive”, “chasing the competition” and “closing the gap”. In today’s world, we are bombarded with Google alerts, Twitter lists and hashtag mentions of competitors, that we then use to immediately compare and contrast against the businesses that we lead.
The comparisons don’t stop with the businesses we lead either. The comparison and chase extends to the leaders in those businesses. The gravity for each of us to look, feel and appear like others is palpable. We likely all have leaders in our lives that we admire or perhaps even want to be like. I am no different. There were and still are many leaders that I look up to and hope that one day I could grow and develop to be more “like them”. It’s fine if you aspire to achieve the leadership outcomes that other great leaders achieve. I want to be more patient, more open minded, a better listener and more of a catalyst type of leader. I know leaders that do all of those things exceptionally well and I admire them greatly.
But the chase is dangerous for leaders.
It’s one thing to want to be better as a leader or business and then look for examples of what better could look like in one area or another. But the development and growth of both the leader and the business has to be in the context of being a better version of myself (or itself for businesses). As I said above, I want to be more patient. But I cannot let the pursuit and growth of being more patient tear away at the passion that I know helps me to succeed. Here is where the challenge lies. If I admire the patience of other leaders and just look to re-create that for myself, I might wake up one day very different than the “Eric version” of the leader I aspire to be. It’s the same for businesses and the evolution of the businesses we lead needs to be the same. There are other businesses I admire as being super innovative. I want to create a more innovative credit union, but it has to be a more innovative version of Conexus not just recreate a version of Conexus that looks like a different business. If we did, we might wake up one day with a business that is not aligned to our purpose or strays from our values un-intentionally. I had a great mentor very early in my career that made this point to me in a very direct way:
“As you grow as a leader, you still need to be yourself, everyone else is taken”
I realized later that was originally an Oscar Wilde quote, but it resonates with me and I use it frequently with those I mentor and coach.
The chase is also dangerous for businesses.
I was at a presentation a few years ago by Youngme Moon. She was speaking about this very issue which was highlighted in her book Different. I vividly recall a picture she showed during the presentation. It was something like the one below and she asked the conference participants which one of these we were as a business and how will we create a sense of uniqueness in the mind of our customers and potential customers.
How would you position yourself if you were the CEO of any one of these products? I know when I buy water, I care about which one I see in the cooler, how it is packaged (recyclable or not) and the size of the bottle compared to my thirst. That’s it, that’s all. I also don’t want to be a leader in any of these businesses where the consumer cares so very little about the choice. I appreciate that finding a financial partner and buying water is different and personal finance is certainly more emotive, but it was a great reminder of why uniqueness matters.
It was a sobering question when you really think about how you create competitive differentiation in the cluttered mind of the consumer. It’s also a question about how you go about the growth and development of the business and the leaders within and the danger of the “chase”. There is tremendous gravity around the chase, and we all need to be careful about allowing it to pull us places we don’t intend to be.
If you have or develop a bunch of leaders that look like each other and those leaders look, act and talk like those that work in many other businesses in your industry, what are the chances of you creating something unique, special and distinct for those that you seek to serve, either as customers or as employees (customers of the leadership environment you create)?
Very small indeed.
It’s hard enough to create new ideas, new strategies and uniqueness in business. It’s harder yet unless you are completely aware and conscious of the gravity to “sameness” and think regularly about how to grow, develop, learn and create in the context of being unique and in the case of leaders, being themselves.
I was reminded of this early by the very same mentor when he said:
Be careful. If you chase the competition, you might just catch them. Then what?
May we all celebrate those around us (business and leaders) that are unique and revel in being themselves, first and foremost.
To the BC Young Leaders – see you in a few weeks 🙂
I just finished reading “The Infinite Game” from Simon Sinek. The book is based on earlier work from James Carse in 1986 about understanding the difference between a finite mindset and an infinite mindset. It was a provocative poke at the current state of business and capitalism and the need to ensure that both investors and business leaders are focused on the long game of creating value through their investment choices (for investors) and business decisions (for leaders). Sinek argues that business today talks about “winning” and “beating the competition” and the disconnect that creates in the behaviour of both investors and leaders. In the case of my industry – how do you “win” banking? There must be some secret scorecard for our industry right? Of course there isn’t. Ultimately, he argues that there is no such thing as “winning” in any industry, just arbitrary, near term business metrics that drive leaders and investors to a more short term view of their businesses.
At the same time, I have seen and read many articles suggesting that the global pandemic we find ourselves in will be an inflection point in terms of business disruption and that the behaviour of the consumer has been or will be forever changed. Watching in our own credit union how the pandemic has accelerated the move to digital transactions makes the argument easy to believe. Of course, time will tell if this is truly the “TSN turning point” for digital disruption in commerce. They say that you always overestimate the change that will take place in the near term and underestimate the level of change that will happen over the longer term. I don’t know who they are, but that has certainly been the case in my business career as business has evolved faster than I would have predicted over the longer term course of my career. That’s an easier way to say that I am old 😂.
For me, there are a number of signals that confirm that things are indeed changing. Here’s a few that have been top of mind for me lately:
Capital market shortcomings – Last week, Canadian markets were at virtually the same level as they were pre-pandemic. What?!? Are you telling me that investors believe that an identical stream of future cash flows will accrue to them from the same firms post pandemic as pre-pandemic? Really? On the contrary, I believe they are desperately betting on short term hail mary / efficiency / cost cutting / M & A / etc. will prop up share prices in the near term. Do you think this will incent business leaders to consider the strategic choices of this inflection point or drive for nearer term success that they can showcase as “beating the competition” and “winning” in a down market?
Cheap money – We are operating at historically low costs for money. This also artificially inflates near term success for firms and further, encourages higher leverage positions as money is considered to be on sale these days. That might not be all bad, if the additional cash is used to support new initiatives, research, growth and transformation but watching consumers and businesses and how they are taking advantage of low borrowing costs and where the additional money is being spent, makes me nervous.
Rapidly changing consumer expectations – Make no mistake that the mindset of the consumer is changed. I have read lots about how the health crisis has only accelerated the shift to digital for consumers and that the shift was already underway. Perhaps. But the speed with which consumer behaviour is changing is striking and businesses will need to respond not with tweaks to their model but transformative change. We will no longer have the time to make slow methodical changes to our business and still keep up with what consumers expect.
Growing concern about inequity and exclusion – the current business models have contributed to exclusion and income inequity and those challenges are being surfaced in front of all of us in a really big way. Look around. Every conversation I am in today involves inclusion, equity, diversity and a growing sense that all of us (POC, LGBTQIA2S+, Allies, CIS, Indigenous, Short fat bald guys, etc.) need to come together to make it better. It matters greatly that people feel like they can participate in the economy and have opportunities to succeed.
The demand for transparency / authenticity in business – In a similar way, I believe that we are on the cusp of a new era of expectations around transparency and authenticity in business. That doesn’t mean that everyone needs to be happy with the decisions you make, but what it does mean is that you are open, honest and transparent not just about WHAT you want to achieve but HOW you intend to get there. My sense is that there is a real desire for people to work, engage and partner with businesses that they trust and those that demonstrate values that align with their own. People don’t expect perfection, but they do expect to know what you stand for and they expect for you to try your best to live that everyday.
If we are at an inflection point in terms of business models and transformational changes are necessary to support new ways in which to serve customers and build businesses, then this is also a perfect time to reset expectations and mindsets of both investors and business leaders. I have a few ideas on how leaders can stay focused on changing their mindset:
Leading in this challenging environment is hard. When I look back on my leadership journey, this may be the most difficult leadership environment that I will ever face. Will it lead to new thinking, new business models and new strategies for for us to pursue? Or will this lead to more pressure on near term results, diminished strategic investments, less research and development, less continuous improvement and the pursuit of more efficiency in current business models. I hope it’s the former and I am trying hard to make it so.
The last thing I would offer, and selfishly, is that there are business models that work better in times like this. Business models that favour the creation of long term (i.e. generational) value, that incessantly focus on the customer, that care deeply about the “how” and the impact they have on communities and on people.
It’s never been a better time to be a cooperative ✌️.
I grew up in the business world expecting that anything worth doing of any consequence could be easily studied, analyzed and the range of any expected outcomes was completely understood. The only way that there were outcomes or risks that were not understood was if you missed thinking about them as part of your work. If something unintended occurred, it was because you overlooked finding examples of where that had happened previously in other organizations or worse yet, in your own organizations with other change efforts.
The world has changed in so many ways but perhaps most of all around uncertainty. Today, as leaders, we are faced with a very VUCA world. Information is overwhelming and it is hard to keep pace with the amount of change taking place in real time, right before our eyes. As a lifer in the cooperative finance space, at one point, I felt pretty comfortable with knowing most of our organization, how it worked and how value was created for our members.
Fast forward to today.
Today, leaders spend considerable time operating in the blender of volatility, ambiguity, complexity and uncertainty. New information emerges daily, consumer expectations change by the moment and to top it off, your technical expertise has eroded considerably as the business has evolved over time. How are you feeling now as a business leader. Uncomfortable? Ummm…Yup.
The good news is that other things have changed as well that work in our favour. Here are a few:
The new competitive advantage is building organizations such that they can continually scan the market, meaningfully engage with customers to define business problems worth solving and then quickly get solutions into production and not stopping there. From that point, you must continuously refine the product/service through real time feedback with customers. The critical thinking / debate / exploration has to happen in a way that enables speed and innovation and that mindset has to existing throughout the organization. If it does – it becomes the competitive advantage that we all long for.
I have had this domain set aside for a long time and really wanted to get to the point where it was published, but something always got in the way. You know what it was? Me! 😩
Then, came a global pandemic and while there was much to be concerned with and many things lost or forgone, I did find something that I longed for….time. I also found that I had run out of excuses getting in my way of building this site and to share some thoughts more broadly with my community. So here goes nothing.
Thanks for stopping by for a visit. If you have ideas about any of my posts, leave me a comment on the blog.
If there is anything you’d like to hear more about, let me know. I’d love to hear from you!