14Mar/130

A Bright Start in a Dark Economy

Posted by WABC

By Michael Schutzler

The Business/Organization

Jon Ingalls left Amazon.com two years ago to start his own company. Before leaving, he had spent seven years leading the teams that built and operated the business performance and monitoring systems on which his world-renowned former employer drove successful online sales of books, jewelry, cameras, kitchen tools, and so many other kinds of merchandise. While creating and managing a system that handles billions of measurements and electronic transactions every month, Jon began to envision a new kind of company that could measure any electronic transaction and develop superior business insights for any enterprise, not just one superstar online merchant. In 2007, Jon launched TrackSimple Inc with his own money and quickly attracted five of the best and brightest technologists in the industry.

The Partnership

Jon knew that starting and running a company were very different from managing a team of engineers, but like most entrepreneurs, he was undaunted by this challenge. In fact, this uncertainty was highly motivating for Jon. He met with many independent and institutional investors to explore market strategies and investment alternatives. Jon and I met serendipitously during a presentation he made to a venture capital firm that had asked me to assess Jon's business plan and his potential as a CEO. After the meeting, Jon emailed me requesting to meet privately to discuss hiring me as his business coach. We explored our styles, his goals, and whether we were a good fit over the course of three meetings and then agreed to enter a business coaching partnership in June 2008.

The Challenge

There were three main factors on Jon's mind as we started our coaching engagement. First, he wanted to fully evaluate his strengths and weaknesses as a CEO and devise a plan to improve. Second, he needed to devise a strategy to finance his company. And third, he needed to land his first customer.

As is true for most first-time entrepreneurs, Jon wasn't exactly clear about what a CEO was even though he had the opportunity to watch Jeff Bezos perform the role successfully at Amazon. Jon was now in the hot seat and he was quickly realizing there was a lot to learn and learn fast. In addition, the economic walls were already cracking in the venture capital world in late 2007, so by the time he hired me in June 2008, many venture firms were reluctant and nervous about investing into new companies. Especially one with an unproven CEO.

The Approach

We constructed an interleaved three-part coaching plan. First, we worked on a strategy to get the company funded. Next, we set a target and plan to attain that first customer. In addition to those two components, we concurrently evaluated Jon's leadership skills and areas for improvement—now and later.

A consistent coaching methodology was applied throughout each of these blended business activities. Jon assessed his situation and then presented his case. I challenged his assertions and implicit assumptions. After reconciling this discussion into a comprehensive assessment that Jon owned, we set concrete, measurable goals. My role from that point onward was to encourage or provoke Jon to achieve those milestones. Conversations ranged widely among topics including risk assessments, opportunities, progress on plans, progress with new behaviors, and leading a team of people in a sincere, honest, and direct manner.

Financing. Shortly after the company had raised angel funds in late 2007, Jon had started engaging venture capital firms to get his company funded. It was clear by April 2008 that he was not succeeding. His pitch and presentation were admirably ambitious and visionary but neither focused nor polished enough to garner investment. In his own words, "They seem to like me but they aren't buying what I'm selling." Of course, the private equity market was already quite reluctant at this point, which meant that his pitch needed to be brilliant if he was going to get an investor on board.

We focused on Jon's presentation skills and the clarity of his message. To build confidence, we practiced privately in role-playing and whenever he said or did something that contradicted his specific business message or his stature as a CEO, I stopped him and asked him why he said or did that. This allowed Jon to reflect in the moment on the sources of his own behavior, and as a result, he quickly eliminated unnecessary or confusing phrases and started acting more confident and poised in his delivery. He then moved on to business associates as dress-rehearsal audiences and ultimately refined his message and his stage presence as a CEO for the venture community. In fact, he became brilliant in his oratorical skill and his message clarity, which had the added benefit of making Jon a good product salesperson for his young company.

Contract Negotiations. During this period of fund-raising, TrackSimple was also deeply engaged in a dialogue with its first major client prospect. Jon had little prior experience with this level of complex contract negotiation, so we pulled in expertise to help Jon learn the intricacies and principles of this kind of negotiation. I facilitated role-playing with Jon and his team so they could all learn and contribute. We explored what might happen in a negotiation, what would be the best response, etc. His team moved from a confused lot to a well-orchestrated unit in the span of only a few months of practice. However, there was a raging debate on Jon's team about whether this first customer was merely one of convenience or  the first of many. In other words, there were several strong opinions about which market segment to pursue.

My role as a coach was to help Jon balance a measured, Socratic approach with a more emphatic, directive approach. His team was technically brilliant, but had little experience with market analysis or client assessments. At the same time, his team had to believe in the mission to serve the client and in Jon's ability to bring the next client. Thus, while learning to negotiate through a complex, technical contract with a powerful customer, Jon was simultaneously learning to negotiate with his team on the balance of power—when he should listen and when he should assert himself as leader and demand commitment.

The team came to agreement on the market segment, landed their first big client, and our coaching shifted to retaining that client while exploring when and how to land the next one.

On-the-Job CEO Training. The configuration of a start-up company board is of vital importance to the success of the company. It is a critical time because how the board is formed sets the tone moving forward and how the board makes decisions sets precedence for future decisions. Both TrackSimple and its lead Investor were jockeying for as much board power as possible. We focused on Jon's core objectives and must-have terms, and then he worked with legal counsel to get advice on the best approach to document and close on those terms.

More generally, in every weekly coaching session, we began and ended with a grounding assessment of Jon's performance in the core skills and essential functions of leadership. In particular, we ensured that he spent more time listening and devised a plan for him to practice that skill in and out of the workplace. And we always came back to his core objective of motivating and inspiring his team to make a sustained effort toward their primary mission of delivering superior business results to all interested companies through superior measurement of electronic transactions.

The Value Delivered

TrackSimple raised $2.2 million in venture capital in a time when most firms were unable to even get an appointment with a partner. The board configuration retained parity in power and control between management team and the investors and the board has established a respectful and productive dialogue. The first client generated well over $100,000 in revenues and is now negotiating a substantially higher value one-year contract. The team is also negotiating with a second client. TrackSimple is now seen as one of the premier technology start-ups in Seattle and is attracting superior talent among technology and business professionals. The investment in coaching to date has been $18,000. The financial return on investment is well over 10,000 percent, even if you only include the fund-raising and first-client revenues.

This article first appeared in Business Coaching Worldwide (June Issue 2009, Volume 5, Issue 2). Copyright © 2013 WABC Coaches Inc. All rights reserved.
Michael Schutzler is a successful business coach based in Seattle, WA. His approach to coaching draws on 25 years of leadership experience in public and private companies on three continents and in nine industries. He is the author of the popular book Inspiring Excellence - A Path to Exceptional Leadership (2009: Book Publishers Network)More about Michael in the WABC Membership Directory. Contact Michael.
If you wish to reproduce this article in any material form, you must first contact WABC for permission.
14Jun/120

Coaching to Clarity, by Luda Kopeikina

Posted by Luda Kopeikina

Just as the quality and clarity of our decisions shape our lives, leadership decisions mold business success. Major strategic decisions carry tremendous business consequences. When your client is wrestling with making just such a decision, helping him or her reach clarity can present a significant executive coaching challenge.

Good decisions hinge on mental clarity, which is the product of mental concentration, focused thoughts and attentive awareness. Clarity is reached by training the mind to be precise and accurate in its definitions, assumptions and evaluations. The following strategies will help your clients with the challenges associated with effective decision making.

Foster the Clarity State

Working with dozens of CEOs of various-sized companies in different industries convinced me that the key to reaching clarity in the decision-making process is the ability to focus physical, mental and emotional resources on an issue with laser-beam intensity. The best leaders attain such focus quickly and easily. It is a skill, and it can be learned. Once learned, it can be leveraged. I call this state of mind a Clarity State. It is a balanced state in which an individual is:

  • Physically relaxed;
  • Emotionally positive, happy, and free of fear and anxiety;
  • Charged with power, self-confidence, and energy;
  • Totally in the present; and
  • Mentally focused on the task at hand.

Studies show that entering this Clarity State several times a day dramatically impacts our performance. For example, a study conducted by The Institute of HeartMath (2000) reported that after practicing the Clarity State three times a day for three months, test scores for a group of high school students improved by 75%. By entering the Clarity State, 93% of the CEOs in my sample of 115 were able to reach clear decisions regarding issues which had been pending for weeks or months.

Within five to ten minutes, such simple methods as deep breathing, mind focusing, and visualization of happy past events can produce this Clarity State. It can be measured by the individual's level of physical, mental and emotional coherence, based on data obtained from a simple measuring device, such as a pulse rate sensor. Off-the-shelf software that measures coherence ratios is available to help your clients discover their Clarity State and their most effective methods of attaining it. This powerful state helps to eliminate indecision and elicit better choices.

Build a Decision Map

Attaining the Clarity State will not, of itself, ensure a clear decision. The decision-maker must also correctly frame the decision—define the objective, constraints and options, and align the decision with desirable outcomes. This can be a difficult task, even for the best leaders, due to the tendency to get so wrapped up in the problem that the brain gets 'stuck' and can't move forward. This occurs when the parameters surrounding the decision are fuzzy.

A one-page graphical 'decision map' that clarifies the objective, spells out concerns, and describes available options and other critical parameters can create a surprising level of clarity in identifying the right choice. While this process takes only a couple of minutes, it can speed your client to clarity.

Encourage Perspective Shifts

Upbringing, education and life experiences render each person unique. As a result, every individual views a particular decision from a different perspective. This personal 'frame' focuses on certain decision parameters and diminishes the rest. Any frame may limit options and inhibit the development of a good solution. Therefore, the ability to shift perspectives is vital to effective decision making. Unfortunately, humans rarely reframe voluntarily. Reframing requires a focused effort. In addition, identifying framing factors is difficult, so skilled coaching assistance in this area can be invaluable.

What determines framing factors for your client? There are two sources: The way the problem is presented (the motivations of those involved), and your client's own biases, based on his or her personal history.

Unrecognized assumptions tend to frame as well. For example, one company's leader rejected the opportunity to enter a particular market because his team considered the market a 'niche.' With a competitor's subsequent success in this niche, the executive realized that he had based his decision on an erroneous assumption regarding the actual size and profitability of a niche market (i.e., that 'niche' equated to 'too small for a serious business venture').

Armed with specific techniques for identifying framing factors, a skilled coach can ask probing questions to expose underlying biases and unrecognized assumptions. Listing assumptions, defining the motivations of those involved in the problem, and identifying expectations can facilitate the client's shift to clarity.

Reach for Internal Alignment

A conventionalist judges a decision by its consequences. Leaders are paid to select strategies that increase value to shareholders, increase sales and improve effectiveness. Business decisions are usually made with these major objectives in mind. However, effective leaders judge decisions by different criteria.

No one can fully foresee the consequences of a decision at the moment he or she is making it. Market shifts or other environmental factors can interfere and negatively affect the results. Therefore, effective leaders define how right a decision is by the degree to which it is aligned with their vision. In order to reach clarity, they focus on the three components over which they have control: The quality of the decision-making process, the quality of data involved in the decision, and the level of internal alignment with the choice.

While this does not guarantee good consequences, it does guarantee that the decision maker will do whatever is in his or her power to deliver the intended result. This internal alignment with the choice—the clarity, excitement, and certainty that the decision is the right one—cannot be faked, and effective leaders know that they cannot lead without it. Without internal alignment, it's difficult to clearly communicate the intent behind the decision and engage a team in its implementation. Coaches can play a crucial role in providing feedback, encouraging the leader to persist until that deep alignment point is reached.

Business executives are paid for the quality and clarity of their decision making. Those who are able to make clear choices excel, and their value in the marketplace increases. Managers are rarely innately skilled in this area. For most executives, this is a continuous process of improvement that is crucial to overall business success. The most powerful recipe for improvement is the combination of the four strategies described above. Using these powerful tools, an executive coach can help clients make clear decisions in moments of crisis and excel at the decision-making process over the long term.

This article first appeared in Business Coaching Worldwide (Fall Issue 2006, Volume 2, Issue 3). Copyright © 2012 WABC Coaches Inc. All rights reserved.

Source:

McCraty, Rollin, et al.  2000. "Improving Test-Taking Skills & Academic Performance in High School Students Using HartMath Learning Enhancement Tools." HeartMath Research Center, Institute of HeartMath, Publication No. 00-010. Available at http://www.heartmath.org/research/research-papers/improving-test-taking.html.

Luda Kopeikina is CEO of Noventra Corporation, an innovation commercialization firm. She is the author of The Right Decision Every Time: How to Reach Perfect Clarity on Tough Decisions (Prentice Hall, 2005). For more information about Luda, visit www.ludakopeikina.com. Luda can be reached by email at luda@noventra.com.

If you wish to reproduce this article in any material form, you must first contact WABC for permission.