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Innovation or Cash

October 31, 2019 By Tom Mungavan Leave a Comment

During the Internet bubble at the beginning of the century, I was 15 years into running a small business. An online newsletter was doing an article about small businesses and wanted to interview me.

The young reporter was immersed in the ‘bubble mentality’ of venture capital and the promise of future riches. When I told him the lifeblood of small business is cash, he was confused. “But we are losing money and doing great.” was his reaction, which was true. However, the cash was coming from investors and not the customers. Clearly when the investors stopped investing the bubble burst.

There were unprofitable companies at the time that survived, such as Amazon. However, Amazon was generating cash and investing it in innovative and market-expanding endeavors.

Coming back to today, you may have seen the recent Oxford Center Morning Report:

If you wake up on a Casper mattress, work out with a Peloton before breakfast, Uber to your desk at a WeWork, order DoorDash for lunch, take a Lyft home, and get dinner through Postmates, you’ve interacted with seven companies that will collectively lose nearly $14 billion this year. If you use Lime scooters to bop around the city, download Wag to walk your dog, and sign up for Blue Apron to make a meal, that’s three more brands that have never recorded a dime in earnings …”

The Morning Report

So does cash or profit matter? In most industries, growing fast takes cash … from customers or investors. If all of the current start-up businesses charged enough to make a profit … would people use them? Ultimately, the cash needs to come from the customers. Their cash is needed to pay back the investors. Alternatively, companies can go public and let the stock market pay back the investors. Then the customers need to pay back the stockholders for their investment. That did not work out great in 2001.

Traditional Companies

Our customers generate cash. It may not always be as much profit as they hoped to earn, but any loss pales in comparison to the seven companies listed above. In my first full year of business at Change Masters, I was more profitable than IBM, the company I had left behind. My loss that year was small compared to the millions that IBM lost. 🙂

Looking at what startup companies are doing can be a great innovation thought-starter for established companies. Asking how Amazon has changed customer expectations for delivery. Is that relevant to our customers? Asking what using Amazon’s approach to our business might look like? If Amazon provides investments, healthcare, education, taxi rides, or _________ (fill in the blank).

Innovation is asking questions like this and coming up with new ideas to explore. The opportunities are everywhere.

50 Years Ago

August 1, 2019 By Tom Mungavan Leave a Comment

Man landed on the moon 50 years ago. It was an amazing feat. It was an aspirational and inspirational accomplishment that was watched by 20% of the world population. That was probably close to everyone who had a television.

What made the accomplishment even more amazing at the time was the rudimentary tools available. The computers had very little capacity compared to even our Fitbit or iWatch. The interfaces from the computer to the physical world were very unreliable. NASA would have loved the gyro or the ability to monitor your heart rate in your watch today.

Moon Landing Stamp

I may be the only person you know who was programing computers 50 years ago. (There were not many of us.) I was a systems engineer for IBM in 1969. I was not putting people on the moon at that time. I was helping companies run their entire business on computers with as little as 8K processors and 5 meg of disk memory. IBM was revolutionizing companies and processes. The fears at that time were that computers would obsolete workers … much like the fears today about robotics in the workplace.

President John F. Kennedy showed the vision and executive presence to inspire an entire nation to get behind an audacious goal of going to the moon.

You probably have seen movies that show computers with blinking lights and levers. Fifty years ago, those lights and levers allowed a programmer to stop the computer program at a certain point and change the program and data using the levers to replace the “0” and “1” (that instructed the computer and represented the data). Much more rudimentary capability than your Fitbit or watch.

There was so little computer memory that programmers recorded years in two digits rather than four (1969 = 69) to save space. It was always assumed that the programs being written at that time would be replaced before the year 2000. Many old programs were not replaced and thus there was the “Y2K” crisis at the turn of the century. Another way to look at the capacity in 1969, capturing one average photograph today would have exceeded all the computer capacity for an entire medium sized company.

IBM 360 Computer
IBM 360 Computer

In 1969, people wrote letters by hand or typewriter and mailed them. Delivery was measured in days and weeks.

In today’s dollars, long distance phone calls (on landlines) cost $5 to $50 per minute with the help of a phone operator. There were no answering machines or VCR’s. People used cash and checks. Most stores were not air conditioned. Most stores were closed on Sundays and evenings. In addition, Vietnam protesters were setting off bombs in restrooms. It was a very different time.

We have many technological things that we now take for granted. It is difficult to imagine how major the accomplishment was to land on the moon and return. A number of people (including my 85-year-old grandfather) found the accomplishment so hard to believe that a they were convinced it was done in a movie studio and we actually did not land on the moon.

Fortunately, the national news was more trusted than it is today so most people accepted the truth of the accomplishment. Landing on the moon 50 years ago is certainly a tribute to what a nation working together for a worthy vision can accomplish. It is worthy of celebration.

Working Remotely

June 27, 2019 By Tom Mungavan Leave a Comment

What are the issues and opportunities of people working remotely?

Fast Company reported on a study conducted by Google with 5,600 employees over two years. The study results are encouraging and it also challenges traditional thinking about managing remotely.

They report that distributed teams perform just as well and yet are more frustrated in their role. All Google employees (local or remote) have specific and measurable quarterly goals. I believe this contributes to their effectiveness and ability to compare results. In addition, the study recommended addressing three issues:

Time Zones

It is very important to be respectful of the different time zones and vary the schedule for group meetings. Spreading the inconvenience around to all team members helped reduce some of the frustration in remote locations.

We find our individual clients in Europe and Asia appreciate our willingness to adjust our schedule for conference calls and video-conferences. It is also important to be very clear about the time in the relevant time zone. Respect for holidays and different shifts in “daylight savings time” also shows respect.

Building Relationships

Remote relationships require more conscious effort to build across remote teams. There is the obvious absence of hallway connections experienced in-person. There are also differences in weather, sports teams, working environments, social obligations and norms across cultures and locations.

Making a choice to spend some social time in the group, preferably with video or video chat (to see nonverbal signals) significantly contributes to people feeling they know each other and are seen by other team members. Periodic “Day in My Life” picture presentations can be fun and very helpful. Celebrating birthdays and other events is another way to connect.

People who work remotely often feel they are being ignored by the boss, even when they get the same amount of attention as the people working in the same location.

Understand Location Context

One of our clients spent time each month on understanding the work environment across all of his team’s locations. They would rotate which location would be highlighted. The location would have five minutes to present an aspect of their work life and another five minutes on Q&A.

For example, one team member shared photos of his trip to work in the morning. The team member, Vigit, took multiple modes of transportation to get to his office. It took him at least an hour and often longer. Most surprising to people in other locations was that Vigit carried his work shoes until he reached the office (where he put them on) to avoid getting them dirty on his commute. The next month, another location provided similar insights.

Another way to enhance cultural understanding is to identify the national holidays and to honor the heroes in each culture (and why they are celebrated).

Expectations – Measure of Success

One key to the Google study and the ability to manage remote teams is to have clear, measurable expectations that help people be productive and successful … locally and remotely. “Expectations” is one of the seven attributes of authentic executive presence in our book, “Seeing Yourself as Others Do“.

Leadership Keys

June 4, 2019 By Carol Keers Leave a Comment

Clear expectations
Timely feedback
Accountabiity

After retiring, a successful former client said, “Many years ago, Change Masters taught me the true meaning of leadership, which I had confused with management. You helped me see that leadership is about helping people learn by giving the opportunity to succeed or fail. The 3 steps of leadership you taught me were to:

  1. Give well defined expectations.
  2. Provide timely coaching with positive and critical feedback.
  3. Only help fix problems when absolutely necessary.

My client thanked us for changing the game for his leadership effectiveness. Great feedback means a lot … it keeps us in the game for over 30 years.

Executive presence tip – Carol Keers


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