Achieving Business Excellence with John Spence

Loose-Tight Controls for Business Success

37827-watches_teaserI recently presented several workshops for client company with an absolutely brilliant CEO, among the best I’ve ever met. He was a new to the organization and had been brought in to turn around the company, which was facing very severe financial troubles. This was very bureaucratic organization whose main customer was the government. They were slow to make decisions, reluctant to take any risks, complacent in their attempt to grow their business and keep margins strong, which landed them to more than billion dollars in debt. The CEO gave an impassioned speech about the need to be more entrepreneurial, while still having a culture of disciplined execution around the core strategies. He described it, much like Tom Peters did in his wonderful book In Search of Excellence, saying that the company needed to have “loose-tight controls.” They need to have elements of loose  control around entrepreneurship, innovation and prudent risk-taking, while maintaining areas tight of control around their values, strategy, alignment and accountability for positive business results. He told them that in order to be successful they would have to balance a strong entrepreneurial ethic while still embracing a focused culture of discipline – and summarized his idea in the graph below.

So, where does your company sit in this matrix?

Best Managed Companies graphic

What Is Your Legacy?


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Team Building Advice for a New Team Leader

shutterstock_46846525I recently received an email from the young lady who recently moved into a new job and was put in charge of a team. These are folks she had never met and she was struggling to pull the team together and get them working as one cohesive group under her leadership. She asked me if I had any advice on how to make this happen. Here is the quick, but focused, response I sent to her.

This is a challenging question, the key is to build trust. There are several factors that go into building trust, but here are a few that are fundamental:

Competence: They need to see that you are very good at what you do.
Concern: Showing true empathy, interest and concern for your team members.
Reliability: Another word here would be consistency, always doing what you say you will do.
Intimacy: This is also called tie-strength, in other words, spending time with your people so you get to know them better and create stronger bonds.

These things do not happen by chance, you have to create a plan where you find a way to demonstrate competence and concern, prove that you are reliable, and set aside time to talk with and get to know your team on a personal level. This does not mean you need to be their best friend or therapist, simply that you need to get to know them more as an individual than just an employee.

I hope you found this advice helpful, good luck – John

The Five Keys to Business Success in 2016

year-red-white-background-d-rendered-image-36767974At the beginning of each year a lot of us look for inspiration on how to take our business to the next level over the coming 12 months. In past years I put together special videos outlining what I believed it would take to make the next year in your business one of the best years ever. This year, I simply want to reiterate what I believe are some of the most powerful business success ideas I have ever learned. Below is my video on the “The Five Fundamentals of Business Success,” this is a class I have taught all over the world to every type of business from mom-and-pop shops and startups to companies in the Fortune 10. I created this particular video in December of 2014 after a speaking tour of the Netherlands with the Entrepreneurs Organization. I truly believe that if you will watch this video and apply the ideas I share with you, it will have a dramatic positive impact on your business success in 2016.

*** If you found value in the video please send it to everyone in your network so we can help them too! Thank very, very much – John




On The Intolerance Of Mediocrity

5117ec57cab7b.imageI have spent the last 20 years of my career studying excellence. I have read dozens if not hundreds of books on the topic, interviewed CEOs, Olympic gold medalists, artists, musicians and other people who have achieved preeminence in their field. I especially enjoy spending time with world-class chefs who are insanely focused on producing only the finest dishes they can humanly make. Recently I read an article from one of the top chefs in the world that discussed how he built his restaurant into one of the most revered eateries on the face of the earth.

His simple four-step formula for excellence?

  1. Strive every day to be the best in the world.
  2. Be completely intolerant of mediocrity.
  3. Constantly innovate and push the envelope.
  4. Deliver a truly world-class dining experience to every customer.

I read that list and thought to myself that you could pretty much copy it, change number four a little bit, and it would apply to being excellent in nearly any business. But I have one big problem, its number two, something I believe in very strongly, but can cause a tremendous amount of stress in your life.

For those of us who want to be highly regarded at what we do, I believe it takes a complete intolerance of mediocrity, both in yourself and in those you work with. However, taking on that attitude means that you will often be frustrated and sometimes be seen as too aggressive or even a bully. I have been mentoring a young man that wants to be one of the top 10 chefs in the world and during a recent breakfast he asked me, “If I become one of the best chefs in the world, will any of the people that work for me like me?” And I quickly answered, “No, they will think you’re an asshole.” I know it sounds harsh, but it’s the truth. In order for him to demand near perfection and be completely intolerant of anything less than excellent, he will have to step on a lot of toes and bruise a lot of egos.

Which brings me back to…me.

I struggle mightily with this idea. I coach all my clients to stop tolerating mediocrity and to remove anyone on their team that is not a solid contributor to the success of the organization. According to a recent test I took, I literally broke the scale on self-competitiveness, so I obviously have no problem (or perhaps it is a problem) in pushing myself very hard to achieve excellent results. But I will say that my focus on making myself and my company absolutely the best I possibly can does make it extremely hard on the people that work with me and the vendors we do business with. I am accused by many of being too harsh, unrealistic and overly demanding – which part of me takes is a great compliment and the other part of me feels almost embarrassed about because I know how difficult it can be to work with me.

In the end though, I know that to achieve a high level of success I must be unwilling to settle for mediocrity. On the other hand I am coming to the realization that the distance between “Mediocrity – Good – Great – World-Class” has a lot of room for delivering fantastic work, without having to be constantly stressed and frustrated over not delivering world-class work. I understand now that driving for near perfection can often times drive people into the ground, yet if I challenge them to deliver the best they possibly can a level that I can accept as really, really great work – then I don’t have to be an ass. It’s a tough lesson to learn, but one that I’m working on.

What about you?


*** By the way, I have written a short and focused e-book with my best ideas and tools to help you build and sustain a winning culture in your organization. It sells for just $4.99. If you’d like to learn more about the book here is a link: Winning Culture e-book


The High Cost of Poor Leadership


I was recently asked by one of my clients to put together some statistics on the cost of bad leadership and the upside of excellent leadership. He needed this information so that he could help support an investment in hiring me to do an advanced leadership training workshop for his organization. I think that intuitively, most people understand that subpar leaders/managers obviously have a negative impact on the organization. However, when you look at how big the cost of poor leadership really is, then you begin to re-examine the importance of leadership development within the company. In order to review the high cost of poor leadership, I am sharing the information I sent to my client:

Poor leadership practices cost companies millions of dollars each year by negatively impacting employee retention, customer satisfaction, and overall employee productivity.

Evidence of the High Cost of Poor Leadership

According to research from the Blanchard Company:

  • Less-than-optimal leadership practices cost the typical organization an amount equal to as much as 7% of their total annual sales.
  • At least 9% and possibly as much as 32% of an organization’s voluntary turnover can be avoided through better leadership skills.
  • Better leadership can generate a 3-4% improvement in customer satisfaction scores and a corresponding 1.5% increase in revenue growth.
  • Most organizations are operating with a 5-10% productivity drag that better leadership practices could eliminate.

From other sources:

  • It’s a sad truth about the workplace: just 30% of employees are actively committed to doing a good job. Gallup’s 2013 State of the American Workplace report indicates that 50% of employees merely put their time in, while the remaining 20% act out their discontent in counterproductive ways, negatively influencing their coworkers, missing days on the job, and driving customers away through poor service. Gallup estimates that the 20% group alone costs the U.S. economy around half a trillion dollars each year. The single greatest cause for employee disengagement? Poor leadership.
  • Authors Rosen and Brown, for their book Leading People, compiled findings from more than a dozen studies that focused on leading companies from the Forbes 500, Fortune 500, seven hundred privately-held firms, and interviews at the three thousand largest companies in America, and Rosen and Brown found that current leadership is costing American companies more than half their human potential. To put that another way, improved leadership alone could double worker productivity. This translates directly to the bottom line. The single biggest influence on employee commitment and performance is the leadership skills of their managers.

From Harvard:

Quite simply, the better the leader, the more engaged the staff. Take, for example, results from a recent study we did on the effectiveness of 2,865 leaders in a large financial services company.

You can see a straight-line correlation here between levels of employee engagement and our measure of the overall effectiveness of their supervisors (as judged not just by the employees themselves but also by their bosses, colleagues, and other associates on 360 assessments). So, as you can see at the low end, the satisfaction, engagement, and commitment levels of employees toiling under the worst leaders (those at or below the 10th percentile) reached only the 4th percentile. (That means 96% of the company’s employees were more committed than those mumbling, grumbling, unhappy souls.) At the other end, the best leaders (those in the 90th percentile) were supervising the happiest, most engaged, and most committed employees — those happier than more than 92% of their colleagues.

*By Jack Zenger and Joseph Folkman

Employee Engagement croppedPreventative Action for the High Cost of Poor Leadership

It would be easy to deliver another twenty pages of statistics showing both the negative and positive impact of leadership. Even if some of these numbers are skewed, the impact of the high cost of poor leadership is still so significant that it warrants serious attention. I would suggest that for most companies today, a focus on improving leadership skills and creating a winning culture that engages employees is likely the single greatest area for organizational improvement, and the fastest way to decrease costs and increase profitability. The high cost of poor leadership cannot be ignored.

Free eBook Link for Building and Sustaining a Winning Culture by John Spence

The Qualities of a Good Manager: How to Make Your Managers Easier to Lead

African-American businesswoman standing with arms crossed while others walk by.

A while back, I had the chance to talk with one of my clients in California, the COO of a Fortune 500 firm who has engaged me in the past to coach several of his senior leaders. I was working with a handful of divisional CEOs who were each running a $200-600 million enterprise. During our talk, the COO said something that really struck home for me, and it gave me a super clear idea of what he wanted me to do for him. He said, “John, these are absolutely fantastic guys, but they can be tough to manage. Please help me make them easier to manage.”

That statement right there gets right down to the heart of why I am typically called in to coach someone. The executives I coach are always bright, talented, bold, creative, entrepreneurial, and driven: all of which are truly valuable traits. However, when taken to the extreme, these same traits can make these sorts of folks very hard to manage and direct. What’s more, if they cannot learn how to control their behavior and fit more comfortably into a senior role, then the very things that made them successful up to this point in their career can actually lead to their demise.

Therefore, in order to educate and encourage your managers to actually be more manageable themselves, share with them this advice that I have heard numerous leaders tell their key managers throughout my years of real life experience. Listening to these leaders has led me to make this list of the qualities of a good manager, and if your managers can apply these qualities to their own business ventures, then you will have a much easier time leading them and working with them to achieve outstanding business results.

The Qualities of a Good Manager

  1. Good managers know and run their businesses incredibly well. It is the responsibility of a good manager to make their numbers and keep their customers happy. If you cannot successfully run the business you are in charge of, then in the end, nothing else matters. Therefore, the number one priority for good managers is always to run a smooth, flawless operation that has a solid strategy and strongly contributes to the corporation.
  2. Good managers don’t do surprises. Good managers never surprise their leaders because they know that their leaders expect them to report major concerns right away rather than try to handle them until the problems exceed their abilities. Leaders want their managers to be capable of handling most of their business issues on their own, but they also want their managers to be straightforward with them and keep them informed. Chief officers cannot help their managers if they do not know what is going on, and when managers try to hide bad news, their deception will only hurt the company more in the end. Therefore, good managers demonstrate courageous communication and 100% honesty. Their leaders have to be able to trust them completely, so good managers tell their leaders everything that is important: the good and the bad.
  3. Good managers are able give and take frank feedback. Chief officers and their managers can be friends and should feel a great deal of respect for each other, but in order to do business well, they must also be able to exchange direct feedback. Leaders may even have to give uncomfortable feedback or make hard decisions that negatively affect the business efforts of their managers, but a good manager will not take this type of development personally. Instead, they will understand that it is what is best for the entire company and work hard to deal with it effectively. Conversely, good managers are also prepared to respectfully correct their leaders when their leaders may have made a mistake or overlooked something. Good managers can deliver tough news to their leaders without fear of retribution because frank feedback is a two-way street.
  4. Good managers surround themselves with the best people they can possibly find. Not only is this a solid strategy for business success, but it is also a critical part of business survival. Good managers know that they endanger the entire company if they believe that they are the smartest people in their divisions and the only ones who can do something in order for it to be done right. Therefore, good managers establish a deep bench of extremely talented people in order to help them succeed and ensure a smooth succession should it be necessary for someone else to step into their role. Always having to be the hero is not an effective, lasting tactic and will eventually lead to burnout, stress, and failure. Therefore, good managers humble themselves by working with others and considering them the best as well.
  5. Good managers know that a high IQ is not enough: a high EQ is also essential. When managers build a team of superstars, they have to be absolutely superb at motivating and supporting their team. Therefore, they never attempt leadership through intimidation, bullying, threats, or pressure because they know that this type of leadership will never win in the long run. Through bad leadership, managers might be able to make their numbers and grind out profit for a while, but in time, they will lose the support and trust of their employees. It is clear that people never give their best when they feel like they are getting beat up. Therefore, good managers build a world-class team and then coach, direct, and motive them in order to secure world-class performances. They take care of their team, and then they reap the many benefits this more considerate approach to leadership yields.
  6. Good managers are able to make tough decisions in a timely manner. As a business grows, so do the size of the decisions that need to be made. So, in order to adjust, good managers get a good team behind them that will be brutally honest. Good managers then ask their team for lots of help and use their team’s suggestions to make the best decision possible with the information at hand. Good managers know not to slow down the process with indecision. Instead, they work with others to reach their goals by being fast, flat, and flexible.
  7. Good managers think and act strategically. Firefighting your problems, even if you are great at it, is not the way to run a business. In contrast, good managers put out the fires and keep them out so that they have the time to think long-term. Good managers have a good handle on where they and their business should be in three to five years: they are not simply struggling to make budget this quarter.

The Qualities of a Good List

As you can see, good managers possess a lot of great qualities, and these qualities make them the types of managers that their leaders find very easy to lead. I have compiled this list from the statements that I have heard repeatedly from the top executives that I work with, but as I am sure that I have missed a few, please feel free to add to my list in the comments below, and use whatever ideas you found helpful from this blog to make your managers easier to lead!

Running an Effective Strategic Planning Retreat

shutterstock_18116173A very close friend called today to ask if I could facilitate an upcoming strategic planning retreat for his company, and unfortunately, the days he needed were already booked. So, I offered to send him a quick overview of what I feel it takes to put together a successful strategic planning retreat, and this is the information I gave him.

How to Run a Successful Strategic Planning Retreat

  1. Establish a Specific Deliverable. The best place to start is at the end. Therefore, the first step to presenting a successful strategic planning retreat is to create a very specific description of exactly what you want the deliverable of the event to be. What would a perfect outcome look like? How will it be measured? If you can figure out specifically what you want the retreat to achieve, it is pretty easy to go backwards from the finish line and build a program to that will accomplish your goal successfully. So, always begin with the end in mind.
  1. Bring in an Outsider. Use an outside facilitator, someone with superb experience in running many, many similar retreats. There are two main reasons to use a facilitator: process and people. Any truly qualified facilitator will have a proven process they have used for years to effectively get teams to their desired destination. It really does not make too much of a difference what process they use, so long as it is intuitive, easy, and effective. The other main reason for a facilitator is people, or better said, egos. You need someone who is NOT from the organization that can step in and take control if things get off track: someone who is not afraid of the political ramifications of telling the boss to be quiet! An outside facilitator can perfectly play the part of the “velvet hammer” by shutting down tangents and pushing back on overbearing individuals.
  1. Define the Purpose of the Retreat. Well before the retreat begins, decide whether this will be a “strategic planning” retreat or just a “planning” retreat. In other words, are the people in attendance actually going to take part in setting the strategy, or are they simply there to figure out how to implement someone else’s already developed strategy? I have seen a lot of retreats go down in flames when the participants thought they were going to be able to impact and influence strategy only to find out that it had already been set in stone and their only role was developing a work plan. Therefore, you should decide and communicate beforehand what type of retreat you are having.
  2. Evaluate the Condition of Your Team. Is the team ready to have a high-level retreat? Do you have the level of trust and professional respect necessary to have the sort of open, honest, and robust discussion that is critical for developing a truly effective strategic plan? If people do not feel extremely comfortable sharing opposing opinions, fighting for unpopular positions, and challenging the status quo, then you will never be able to have the intellectually rigorous debate needed to arrive at a superior strategic plan.
  3. Prepare Thoroughly. Try to get as much done before the retreat as possible. Typically, I do three key things a few weeks before the retreat.
    •  I deploy an internet-based “Organizational Effectiveness Audit” to every person who will be involved in the retreat. This is a brief, confidential survey to gauge the level of trust, openness, and respect within the team. If the scores from this audit are not high enough, I will recommend replacing the first day of the retreat with a High Performance Teams workshop in order to get the group ready for the rest of the work.
    •  I ask everyone to carefully review the current vision, mission, and values of the company (if they have them) and to come prepared with any comments and suggestions, but ONLY if they feel very strongly that changes need to be made. Opening up the vision, mission and values to general discussion is usually opening up a can of worms that you’ll never get shut again. The way I look at it, the vision, mission, and values of a company are sort of like a tattoo: they are supposed to be pretty permanent and are very painful to change, so you need to be completely certain you are not happy with what you have before you undergo the effort of working on it.
    •  I ask people to do a fair amount of the SWOT work before they arrive. I send them a survey with some key questions about Internal Strengths, Internal Weaknesses, External Opportunities, and External Threats, and ask them to fill in the answers. The key here is that the answers MUST be in the form of a statement of “fact”: things they either know or don’t know. No guessing, no estimating, and no assumptions: we need to deal with facts. And when we come to a place where we don’t have the facts, then we now know that we need to go find them! Here is a sample of the questions I typically ask on the survey:
      • What do you see as the top three internal strengths of the organization right now?
      • What do you see as the top three internal weaknesses of the organization right now?
      • What do you see as the top three external opportunities for the organization right now?
      • What do you see as the top three external threats to the organization right now?
      • What do you think are the top three most important areas of focus over the next three years?
      • If you were the CEO, what top three things you would change or fix immediately?
      • What is your single biggest concern about the business right now?
      • What are the top three things that must be accomplished in this meeting?

I then take all of the answers from the survey and combine them into an executive overview of the most common answers so that people can get a general feel for what the entire group is thinking.

  1. Answer SWOT Questions in Teams. Once we get to the retreat, it should only require a very brief discussion to determine if the vision, mission, and values are still relevant and on target. If not, I try to work fast to get a consensus on the appropriate changes. With everyone on board for the vision, mission, and values, then the next step is to break people up into groups to review the executive report on the answers to the SWOT analysis survey. I like to try to keep the teams small enough so that no one can hide and not participate: groups of four to eight people are just about right. I also want each team to have representatives from different parts of the organization, not all from the same department or managerial level – diversity is a key here. I will typically give them about two hours to work in their groups, and their task is to review the report and work together as a team to answer the exact same questions again, but this time, to get everyone to agree on what their team comes up with for their answers.
  2. Determine the Most Important Issues to Address. I then ask each of the small teams to present their answers to the questions, and I work as the facilitator to combine all of the answers from the various teams into one clear overview that everyone agrees represents a solid SWOT analysis of their company. I might not be able to narrow the list of answers down to just three in each category, but if I can get it down to four or five answers that everybody in the room agrees with, then we now have something very focused from which to work.

*** Side Note: I do not let the teams talk to each other once they start the SWOT process. I want them to work completely independently because I am interested in seeing how well the different teams are correlated on what they feel are the best strategies. If all of the teams come back and say pretty much the same things, then I am highly confident that a bunch of smart people looked at a lot of data and came to a general consensus on the appropriate course of action, and they did not do so through “groupthink” because the teams did not cross-pollinate! If all the teams come back and present wildly different strategies, then I know I have a problem. And if the teams come back with about an 80% overlap? Well, then that is where the facilitator earns their fee by working to mesh and mold the various ideas into a single, coherent, and agreed-upon strategy.

  1. Prioritize the Important Issues. Once I feel comfortable that we have pretty much exhausted the SWOT analysis and created some good thoughtful answers to each of the above questions, then I will ask the teams to review the new list of agreed-upon SWOT answers and prioritize these answers into strategic objectives. What, specifically, should they do with the information they now have in front of them; what actions should they take; and how will they prioritize their actions for time and resource allocation? I usually ask them to designate the issues as such:
    • An “A” priority is one that requires immediate attention. It is a critical issue and demands action.
    • “B” issues are important but require no action right now. They might need action in a month or two, or we might have to address some “A” issues before we can take any action on one of the “B” issues.
    • The “C” issues are important, but there is nothing we can specifically do to impact them. These might be economic, political, or regulatory issues that we need to watch carefully and possibly respond to, but there is nothing per-se that the organization can do to influence or control these particular factors.
  1. Select Your Main Strategic Objectives. Again, I typically give the teams about two hours to mold all of the SWOT information into a prioritized list of strategic objectives. I want them to think at a very high level here about the big picture issues: the most important things that will drive the success of the organization over the next twelve to thirty-six months. Basically, all strategy just comes down to making choices about how to allocate precious resources: time, money, and people. By looking at the SWOT analysis and figuring out what is most important, the company can understand how the strategy should take shape and what the most important things are for them to focus on in the near term in order to best prepare for the long term. The goal is to take all this information and boil it down to three or four key strategic objectives – a handful of mission critical areas for the organization to confront.

*** Side Note: you will notice that I said “three or four key strategic objectives.” Okay, I admit: maybe you could stretch it to five, maybe even six, but you cannot have twenty-three strategic objectives! Not even fifteen, twelve or ten. The key to effective strategy is FOCUS. You must get it down to the few truly critical priorities and then, most importantly, figure out what to say “NO” to.

  1. Make Plans for Implementation. In most one-day retreats, this is about as far as you can get, with possibly a little discussion about the tactical implementation of the strategies. This leads me to two VERY important issues. The first is that the diverse teams we created to develop the strategies are not good for deciding on tactical implementation issues. The tactical implementation issues should be developed by the people who will be held responsible for actually doing the implementation. I try to let the people who do the work every day figure out the best way to do it in the future. Yes, we give them some ideas and input, but ultimately, they need to decide on the best way forward for the projects on which they have the most expertise. The second key issue is that a strategic plan is NOT complete until you have also developed a “Strategic Execution Plan.” So, at this point, I usually complete the retreat and send the project teams off to work on their specific implementation plans.
  1. Finalize Your Strategic, Tactical, and Execution Plans. Perhaps several weeks later, after a number of rounds of sharing and editing the strategic, tactical, and execution plan rough drafts, the entire planning team gets back together to look at the final document. Here is where they hash out the last details and work to create a document that everyone feels good about and to which everyone is willing to commit.

What You Can Accomplish with a Strategic Planning Retreat

At this point, the plan is finally complete, and here is what you have accomplished:

  • You have given everyone a say in the outcome: a chance to fully participate in crafting the key strategies that will move the organization forward.
  • You have endured a thorough and exhaustive process to ensure that the best possible ideas and suggestions went into the plan and that the plan did not get hijacked in a groupthink session.
  • You have prioritized the key strategies to allow for the proper allocation of resources, people, funds, and time by figuring out what to focus on and when you must say “no.”
  • The people who will be responsible for actually implementing the plan have played an integral part in developing the specific tactical plan for effectively executing the strategic plan.
  • You have gained consensus and commitment to accountability in a very public and powerful way.

Now comes the REALLY hard work: the 100% disciplined execution of the plan for the next ten months or so before it is time to start the process all over again! Good luck running your next strategic planning retreat!

Free eBook Link for Building and Sustaining a Winning Culture by John Spence