Executive Coaching – Another Growth Strategy for Singapore Companies?

Not too long ago, I read a series of discussions on social media among Singapore business owners on the benefits, or the lack of benefits, of executive coaching.  The discussion seemed to be more on the lack of benefits, with some Singapore entrepreneurs even likening executive coaches to frauds at worst, or at best, only skilled in ‘theory’.  As an executive coach representing a business strategy coaching organisation that has helped more than 40 000 companies across the world, I found this discussion very interesting and of course, insightful into the mindset of the Singapore business owner.

Is it true that executive coaching yields no benefit to the Singaporean entrepreneur?

As I followed the discussion, I began to see certain misconceptions held by the business community here, and how these misunderstanding could actually prevent Singapore businesses from unleashing their full potential.

Let me explain why.

Imagine asking an Olympian or a top athlete whether he or she needs a coach? What do you think his or her answer would be? Would he or she say that a coach is only for those who ‘haven’t made it to the top’?

Andre Agassi, a world tennis champion supposedly said that no one ever achieves peak performance without a coach. Sports stars like Tiger Woods and Michael Phelps all have coaches.

What about business champions? Steve Jobs, Bill Gates, Jeff Bezos and Eric Schmidt all have a coach.  An article in Forbes reported that executive coaching grew from a little known industry to a US$1B one over the last twenty years with the majority of the bill being foot by giants like General Electric, Google, Goldman Sachs and other world beaters. In the past, these organisations considered coaching as a performance enhancement measure for failing employees, but now, coaching is the key to helping key executives to lead and win in a world that is increasingly competitive and complex.

And the benefits are evident – a study by PriceWaterhouseCoopers and the Association Resource Center puts the ROI on executive coaching at an average of 7x, with 25% of respondents saying that the returns could go as high as 10-45x the investment.

The main reason given why executive coaching has risen in prominence among the world beaters is this – the world has become increasingly competitive and complex. And leaders need to change in order to succeed in the ‘new world’. If executive coaching is a key driver of business growth among the commercial giants of the world, could this also be the key to help Singaporean companies breakthrough and scale?

To quote one of my clients from the Philippines, a CEO of a company that I am working with to push through the $1B mark: she said that if we had met 5 years ago, she probably would not have seen the importance of engaging an executive coach for her and the management team, but much has changed in the last 5 years in the Philippines. They no longer compete against local companies but also international ones. And to beat the competition and grow, she thinks it is time to call in the help of a coach to effect lasting change down the ranks, flowing from the top.

So do the changes that affect these countries affect Singapore too? If the answer is yes, then perhaps executive coaching might be an effective tool to help Singapore companies to thrive in this complex environment.

So what is stopping this?

From my experience working with companies in Singapore and SEA, the main obstacle to engaging a coach is the misunderstanding of what a coach does. There are two main misconceptions. The first one is similar to the view held in the west twenty years ago – the coach is like a ‘tutor’.

And in and Asian society, who goes for tuition?

Thus this view tends to limit the role of a coach to one of a trainer. Everybody in Asia wants to learn, that is why they have no qualms going for courses, or hiring a coach to ‘teach’. But few like to be coached towards changing. This is because it implies that they are doing something wrong, and need a coach to correct them and the way they run their business. To illustrate this difference in mindset, two companies I worked with, an Australian and a British, both based in Singapore, were upfront that they want to be coached, not trained. They want continuous engagement e.g. monthly or quarterly follow-ups to make sure the executive team is following the process. They even gave the coach permission to ask direct and harsh questions. But the converse is usually true for Asian companies – they want to be trained, taught the latest techniques but not held accountable over a period of time. Also, the C suites in Asian companies tend to see coaching as something beneath them – it’s for their managers. Thus, change is usually not driven from the top. Whereas there is no such stigma attached with western companies. Usually, it will be the CEO that is at the forefront of the work with the coach and it flows down from there.

This difference in perceiving coaching is why Asian companies usually do not engage a coach to coach, but to do the job of a trainer.

That’s why several of my clients short change themselves by putting a lot of emphasis on what I can teach their teams, but fall short on the coaching process.  In fact, it is the coaching that will bring lasting results to the team, not the initial teaching. After all, only 10% of learning takes place during training, 20% through interacting, but 70% happens through doing. And a coach’s highest effect is when he holds the team accountable for what they do.

What could be the cause of this mindset? One, it could be a misunderstanding between what   training and coaching is? Or a cultural confusion that blurs a tutor’s role with that of a coach.

Or worse, it could be a case of ego. Verne Harnish, world famous guru on business growth, observed after more than 30 years of helping companies to scale, says that the biggest obstacle to scaling up a business is a leader’s ego.

Another possible reason why coaching is not making its maximum impact here could be due to another misconception – Coaching is often confused with consulting. The fundamental difference is a consultant is an industry expert who provides you with an answer that you do not know while a coach is one who helps to uncover issues that hinder growth and co-develop a process with the executive to solve the problem.

In short, a consultant gives answers, a coach asks questions. A consultant finds the answers for you, while a coach walks you towards the answers. The first focuses on the end result only – the answers, while the second focuses on the process you take to find the answers.

Both have their uses for different circumstances. One is about finding answers to complex questions; the other is about growing towards results.

Thus, it is common to hear business leaders say ‘what can the coach tell me about my business since I have more years, more achievements than anyone in the industry’? And this is not an idle boast, since many business leaders are deserving of their success. But that was never the coach’s intention or role in the first place. The coach’s role is to help the executive and his team to go through a process of change to become more effective in scaling, rather than to answer industry specific problems.

One of my clients understood this. Despite being the third generation leader of a hundred year old business that yields billions of dollars in revenue, he initiated a process of change from top down because he knew that the previous ways of running the business, of developing strategy and developing people had to change.  His family business spans seven industries, and I worked with the management teams across these seven industries to implement a process of growth and change, of re-looking at their businesses in a new way for a new phase of growth. As coach, I help to drive a process across the company. I don’t provide industry specific answers.

So how can Singapore company leaders benefit from coaching?

The important thing is to find the right coach.  There are literally hundreds of thousands of coaches that can be found through Google. So the first thing is to know what you want to achieve through coaching. Is it personal leadership change, business strategy change, business processes change, people development change etc?

Every coach may be good in their respective areas, but they won’t be good in everything. The first step is to know what you want to deal with; it will make it easier for your coach and you to lay out expectations.

Next is to see what the coach brings to the table. Here, another common misconception interferes. A lot of people I spoke to do not know the difference between a coach and a mentor. In a nutshell, a mentor has experience, a coach has a method. If you are looking for a guide who has been there, and done that to guide you, you are looking for a mentor. If you are looking for a system or a process that will bring results through various levels in your organisation, then you are looking for a coach.

So the next step after knowing what you want, is to ask if a coach or a mentor serves your needs better. If it is a coach you need, then what methodology does the coach use? Is it proven? Has the method been used successfully across different industries, different countries, different cultures to bring change and results? For example, the 4 Decisions Framework coaching process developed by Verne Harnish has helped more than 40 000 companies across the world in 6 continents. This is what I mean by a system or methodology that stands the test of circumstances and culture.

And the last, but most important question is – how willing are you to change? Coaching is a process of change, not a one-off impartation of knowledge. Find a coach that you are comfortable to work with, with a program you are willing to commit to. A coach’s job is to ask the uncomfortable questions and hold you accountable to implement change. The extent of your success, and the coach’s, is dependent on the degree one is willing to work at change.

As Singapore’s businesses face increasing competition in an increasingly complex environment, perhaps executive coaching could be the answer to their growth woes. After all if it helped the world beaters like General Electric and Goldman Sachs maintain their edge, it should help our business leaders become world beaters too.PG Presskit NOV FLA 2013

How to Identify a Company that Has Potential to Scale?

In Feb 2016, MIT released a report on the state of entrepreneurship and its impact on the US economy. The report is titled A New View of the Skew: A Quantitative Assessment of the Quality of American Entrepreneurship. In a nutshell, the study raised a very important point for policy makers to note:

Quantitative measurement of entrepreneurship (no of start-ups per country) tells us nothing about the future of an economy because it is not start-ups but scale ups that matter.

Start-ups are too diverse in nature, and hence hard to pin ‘how to help’ whereas scale ups have certain characteristics that can be identified and to indicate potential.

Thus, the key question shifts to this – how to identify ‘potential’ in a company?

I believe potential can be spotted in two areas. One is in the mindset of the owners, and the other is in the ‘framework’ of the company.

Mindset

I will address this question with a point raised in this report as well as from my view as a business coach with Gazelles International, an organisation at the forefront of working with Scale Ups across the world. Gazelles International is founded by Verne Harnish, one of the best minds on how to scale a business. Harnish is also the best-selling author of the books Mastering the Rockefeller Habits and Scaling Up, two award winning business books that are the culmination of his 34 years of experience helping businesses to scale.

The first point I want to address is the mindset of the business owner and the management team. Harnish teaches in his masterclasses that in his years working with Scale Ups (companies who grow 20-30% a year, and who double their growth every 5 years approximately), he observed that the name of the company tells a lot about the intention of the founders. In other words, it reflects the mindset. This point is also brought up in the report by MIT as an indicator of potential – the name counts because there is more to a name than just words.

It signals intention.

One of my personal observations working with companies across Southeast Asia is this – to scale a company requires a business owner to think differently about his business – different from competitors, from culture, from industry. He or she will want to do something differently.

One key difference is how they approach the question of change. To scale up, businesses have to make changes. How disciplined are they in implementing changes is the key? How open are they to change? Most people will say they welcome change, citing clichés like ‘Change is the only constant’, but their approach to strategy and their implementation of things that are different from their usual practices tell us if they have the right mindset to scale. Maybe business leaders are willing to learn, but few are willing to change. Change means to adapt and implement.

In short, to manage change effectively requires discipline. Discipline in thinking and focus as well as in execution.

Framework

A way to determine this is to use the 4 Decisions Framework developed by Gazelles International as an indicator. Gazelles International has helped more than 2000 companies around the world to scale. The 4 Decisions Framework identifies 4 areas a company must do well in in order to scale. While not all companies will use the term ‘The 4 Decisions’, the characteristics identified in the 4 Decisions serves as a good indicator of whether a company has the right foundation for higher growth.

The 4 areas are:

Strategy – All businesses not only need a clear strategy that differentiates, but it must also be positioned to break industry bottlenecks to develop an overwhelming advantage over its competition. As Harnish puts it, a company who has the potential to scale is a company who deals with a ‘big-ass’ problem with a ‘kick-ass’ solution, with people who are ‘smart-ass’.  In other words, Scale Ups have people who think where the competition doesn’t think.

As John Rockefeller said, ‘Competition is a sin.’

The foundation of a good strategy is the right mindset – to not accept industry constraints but to constantly find those problems that competition neglects or resign themselves to accept, and solve them. Besides having this mindset to find the bottleneck, does the company have the tools and skills to find and solve these problems? If they do, the company does not get stuck in the traffic jam of competition and be resigned to accept marginal growth.

I call this the difference between a Keep-Up and a Scale-Up. Scale-Ups run towards the industry’s constraints while Keep-Ups run away from them.

Thus, to identify if a company can be a scale up, one needs to examine this company’s mindset towards strategy – is strategy to differentiate from competition or merely to keep up?

The next question is whether they invest time in delivering their strategic differentiation. Strategy can be simple, but the execution of strategy is time consuming and requires discipline.

What will they do when they find a constraint in the industry? Do they have the time, patience and skills to break it?

Whether a company is prepared to invest time and resources into strategy will tell if it has the potential to be a long-term, sustainable Scale-Up.

In a nutshell: Scale Up potentials see industry problems differently from their competitors.

People – No company ever scales without good people.

Every business should examine if they are held under the tyranny of the organisational chart. We do this by applying what Jim Collins teaches: asking if we have the right people, on the right seats, doing the right things.

What does this mean?

It means that everybody is clearly aligned to an outcome that is significant to the business, with the right action KPIs assigned, and that person is clearly the best person to fulfil those actions and deliver those results; in other words, fit people to actions that can be taken rather than fit people into roles. Companies traditionally fit CVs to roles, but we need to move beyond that to fit people i.e. unique strengths, talents and interests to critical actions and outcomes.

Most businesses I know do not have the patience, or more importantly, the mindset to ask themselves honestly if everyone they have is that ‘right’ person on that ‘right’ seat doing that ‘right’ thing? A person who fulfils these 3 criteria is an ‘A’ player; someone who is a natural in creating value in that given capacity.

This process is tedious and requires a different way of looking at staffing and recruitment. But companies who invest in this process to find ‘A’ players gain 3 times the value of a person who is merely ‘staffing’ the role.

Kip Tindell, CEO of The Container Store believes that only ‘A’ players should be hired. Everyone in his company from the store assistant to the management team is carefully selected through a rigorous process. For example, even if you are a junior front line staff, you go through as many as 9 interviews. The Container Store, as Kip says, “sells empty spaces in boxes”. Yet it is has grown huge enough to be listed in the NYSE. For sixteen years, The Container Store was consistently voted in the Fortune’s List of ‘100 Best Places to Work in the USA.

Their secret, according to the company’s president – hire only ‘A’ players. The Right Person, on the Right Seat, doing the Right Thing.

Another aspect of having the right people in the business is to have people who are continuously learning. Here, Harnish starts at the top; he observed that Scale Ups usually have a leadership team that never stops learning. He calls them ‘Rabid learners’. The leaders are not only industry experts in their own right, but they learn and learn, and in doing so, encourage their colleagues to grow and learn. This is even more critical in the 21st Century where things are changing faster than before. Businesses can be made obsolete overnight, so learning is the only way to keep scaling.

Are you intentionally building a system with the 4 ‘Rs’ – Right People, Right Seats, Right things and Rabid Learners?

A company that has the right people policy is poised to scale up.

In a nutshell: Scale Ups are not afraid to invest a lot of time in finding the right people to put on the right seats, to do the right things.

Cash –  Cash flow is the oxygen of all businesses. Cut it and a business, no matter how good, dies.

Do you have a strategy to ensure that cash flow is smooth? Most businesses I know accept the payment terms of their industry as something cast in stone.

They often complain, ‘But the industry is like that.’

Do you have to accept that?

Can you be intentional about getting a better cash flow than your competition? Business strategy, by definition, is the intention to achieve differentiation. So we need to be intentional about getting better payment terms than the industry standard if we want an advantage over our competitors in this area. One way to do this to understand and shorten your Cash Conversion Cycle. Which part of the cycle can you work on to shorten it?

Besides a cash flow strategy, it is also important to have a money value strategy. What this means is to understand whether you are getting the best value out of your business model. Is your business model building company value, or is it merely creating profits? If there is a hierarchy of revenue, is your revenue stream giving your company it’s the highest valuation? Thus, for a business to scale, it must have a smooth cash flow, as well as a money value strategy to ensure that the business can grow smoothly and achieve its highest value.

In a nutshell: Scale Ups constantly find ways to improve cash flow, and constantly question and improve their business model.

Execution – The last, but not the least, is how a company executes its strategy. Be it business strategy, people strategy or cash strategy, it all hinges on Execution to get things done systematically. Hence I consider this the most important decision amongst the Four Decisions.

In Gazelles, we put in place three things that help keep a company on track. They are Priorities, Metrics and the Rhythm. These three things form the ‘Execution Culture’. Do you have a great execution culture? Or is execution haphazard and frantic? Are meetings more a waste of time or a time when things get done?

The first step to develop a great execution culture is to understand the differences between a task and a priority in order to develop focus.

Tasks are often mistaken for priorities. What are priorities? Priorities differ from tasks by having a direct leverage on results. Which action has the biggest impact on results? Which action needs to be completed before other actions can take place? When we fire-fight, we are focusing on tasks. When tasks are not differentiated from priorities, businesses become stuck on a treadmill – they work very hard to keep up but they don’t scale.

The Rhythm is like the heartbeat of the company. Irregular heartbeat can cause death in humans, so it is the same for companies. The Rhythm keeps the organisation focused on priorities that will drive the strategy of the company. Without a rhythm, most companies get lost in the day-to-day fire fighting.

How do you set a Rhythm in your business that ensures that strategic priorities are executed and accounted for?

Do you have a system to warn you in advance if things are not going well so that you can take corrective action?

There are some companies who have outstanding strategy, the result of a lot of time and effort put in, only to fail because it was not executed well.

Coming back to the point that strategy is differentiation, if we want to achieve a different result from our competitors, then we need to do things differently. We need to look at Execution differently.

How a company executes strategy is a sign of whether it will scale up.

In a nutshell: Scale Ups invest time to set Rhythms in the business. They don’t allow things to happen by chance. Nor do they miss opportunities because they got too busy with day-to-day things.

Conclusion

There are many ways to determine a company’s potential. Some people look at market size, demographics, macroeconomics and trends etc, but all these are meaningless unless a company is poised to seize the opportunity. There is only so far a business can grow by being at the right place at the right time, or by the entrepreneurial guts of the founders. A business’s potential should be determined by whether the company has the right mindset and skill set towards growth.

In other words, do they have the right approach to scaling up? Their mindset and actions will tell. While they might not have everything laid out in a nice package as explained in this article because business is always messy, but intention is always seen in actions. Thus, as long as a business owner or leader demonstrates an intention to build the characteristics of a scale up in his business, there will be potential for higher growth.

 

 

 

What’s the ‘POP’ in your corn? 3 Things you must examine in your strategy if you want to play to win!

How does popcorn pop? Ancient Native American Indians believed that a spirit lives in every kernel of corn. When heated, the spirit gets angry and throws a fit. As a result, the corn pops! However, we now know that the popcorn phenomenon occurs because water trapped in the kernel turns to steam when heated, and like a steam engine, it pushes against the soft kernel, causing it to burst open with a ‘pop’.

Last week, at a business strategy course, I heard a story of a man who turned his popcorn business around by capitalizing on this little secret. This man realized that selling popcorn was a business that did not have much competitive edge. So how do you differentiate yourself when your product is a mere commodity that everyone sells? He started to ask himself ‘who buys popcorns and why?’

His answer – families with young children and the reason they buy is to watch the popcorn go ‘pop’.

So he kinda figured out that the unique selling point of pop corn is the ‘POP’. So he asked himself the next question, how do I make my popcorns pop louder?

After studying and discovering how popcorns explode, he found out that the amount of pop was tied to how much water the kernel had; it will determine how much steam it will produce. He tinkered with various ideas how to increase the amount of water in each kernel, until he was able to produce a type of packaging that allowed the right amount of moisture to be maintained in storage. This allowed him to sell popcorn that gave a bigger POP! Now, his popcorn was differentiated from his competitors in the area that mattered to the client – the POP!

So what can we learn from this story? As the year comes to an end and business planning cycles begin for the next year, what are some areas you must consider in your planning? From this story, there are three things:

First – how well do you know your core customer? Do you know why they buy what they buy? Can you articulate in one sentence who is your core customer, and what problem are you really solving for them? Have you differentiated their needs, fears and their wants? Many businesses have a vague idea about this. And from my experience working with companies worth a few million to a few billion, they usually have little time invested in dissecting this question.

Secondly – Do you know in particular, why they buy from you, and not from your competitor? What makes you different? How does your product or service address your customer’s needs and fears? In a world where everything is becoming more and more commoditized, the need to stand out is critical. The only problem is this – many times, our customers want to ‘commoditize’ us because they want it cheap, but is that the game you want to play? Too many businesses get sucked into this whirlpool of letting your customers, and sometimes your competitors, decide what your business should be. Identify three reasons why people buy from you and focus on making these three things better!

Thirdly – What is the core competency you need that will help you make that special difference? The common thinking is to focus on correcting weaknesses or plugging gaps. However this approach will not help you to scale up. It may solve your problems but it will not help you grow exponentially. Take a step back this planning session and ask this question,

Many of my clients start off saying they don’t know what makes them different; they just try to meet industry norms or standards. Or they list an industry standard as a competency e.g. ‘We have ISO XXXX and this is our edge’.  However, they miss the point that everyone has the same competency as them.

But when we push them harder and help them ask the right questions, they discover that every business has a core competency they can leverage. It is just a matter of finding out, and putting a strategy to enhance it. “What makes us special? What makes us unique in meeting our customers’ needs? What makes it hard for our competitors to copy? These are questions to explore in your planning.

Too many year-end planning sessions go to waste because business leaders ask the wrong questions. Wrong questions lead to the wrong answers, and wrong answers lead to bad strategy. While business may still grow due to various factors, we want to not just grow but to grow continuously. These three questions, when answered well, will lead you to not just profitability but profit-ability – the ability to continuously grow your profits. Happy planning!

The Half Way Point – Are You on track to your 2015 Goals?

All airplanes file flight plans before they take-off. The flight plans capture the destination, routes, alternative airports in case of emergency, critical information like aircraft capabilities, number of passengers and pilot details. The plans are important because when there is an emergency, such as when bad weather happens, alternatives are already thought through. Or if control tower loses contact with the plane, rescues know where to start looking. These plans enable constant monitoring between the plane and the control tower until it safely reaches its destination.

Would you fly in a plane without a flight plan?

Or would you trust a pilot who doesn’t check with the control tower regularly?

Now, are you running a business without a plan or a system to ensure that the plan is monitored?

As we come close to the half-year mark, I just conducted the second quarter review with our company. The review was timely as it helped us to re-focus on our long-term goals, and adjust our current plans to align again with the growth plans of our company. It was helpful that we had a full-day, off-site planning session to take us away from the day to day issues and focus on re-alignment.

Re-alignment – what a difficult thing to do.

It is difficult because it is so human to get caught up in the fire-fighting, and forget how the daily stuff we do is supposed to build towards the overall purpose and plan of the company.  So how do we hedge against the distractions of running a business and stay focus on the things that are important? We can do this by putting in place a Meeting Rhythm. Like music, the rhythm keeps things going smoothly. It is a disciplined process that needs to be instilled. The organisation’s rhythm is broken into the Annual, the Quarterly, the Monthly, the Weekly and the Daily, but since we are at the Quarterly mark, let’s focus on how to run a good quarterly review that captures the important things that need to be done. I will share how I ran the quarterly planning session below:

  1. Start with a review of the overarching trends – is your business goals and plans going against or along the prevailing macro trends? In the past, we look at trends only during annual planning sessions, but trends change so rapidly now I believe we should always keep an eye on it.
  2. Ask the question ‘Where do we play?’ This question is from the book Playing to Win by AG Lafely and Roger Martin. This is a critical question that will help you to refocus what are the current areas you are putting your bets on. Re-examine this in the light of the trends. Do you know where you should concentrate your business resources on? Or are you just shooting in the dark?
  3. Ask the question ‘How do we win (in where we play)?’ Again another question from the book Playing to Win. It is really a good book on strategy. How do we win examines if we have a few aces up our sleeves to help us get to where we want to go. Are these aces working? Are you using these aces? How do we do them better? If the aces are not working, do you have a Plan B?
  4. Is there an opportunity or threat you need to deal with in the next quarter? This opportunity or threat could pop up in ‘Where do we play’ and ‘How do we win?’ Or in the trends.
  5. Lastly, and very importantly, are we constantly working on core competencies that will enable us to win? What is one core competency we need to improve or build to answer points 2 and 3?

These 5 steps are akin to a pilot checking prevailing winds, weather conditions ahead of his flight path, and evaluating if his aircraft has the means to get to where it needs to go viz-a-viz the conditions he is facing. He not only reviews the conditions, he also makes alternative plans.

You are the captain of your company, and many people, your staff and your clients depend on you. Do you have a flight plan? Are you reviewing it frequently enough so that you don’t get any surprises? And if you are reviewing it, are you asking the right questions that will give you the best answers?

I hope this article helps. Have a fruitful planning for Q2!

Core Purpose – The Driving Force that Turns the Ship Around!

Ford-Factory-1903

As a Gazelles business growth coach, I have been helping my clients revisit their company’s core purpose at the start of every planning session. From local businesses to international ones, the question of Core Purpose has always been hazy.

What really is the use of articulating, remembering and living out the Core Purpose? Why is it important, and how should Core Purpose be positioned? At the start of each session, there will be cynicism, as key personnel wonder would Core Purpose be relegated to a poster on the wall, unremembered, unarticulated and totally irrelevant to business the way how Mission and Vision had been for them in the past?

So what exactly is Core Purpose and why is it important?

The founder of Gazelles, Verne Harnish, a.k.a the Growth Guy whose business tools and consulting have helped more than 40 000 companies around the world including some national brands like Benetton International (India), shared an article from Bloomberg on how Ford Motors was turned around from near bankruptcy to its former glory. Always looking for stories to inspire business owners to grow, Verne shared this article on his website www.scalingup.com. The article is called The Happiest Man in Detroit.

3 Things I Learnt from this Article

Purpose gives strength through hard times

Alan Mullaly, the CEO who turned Ford from the brink of bankruptcy to the most profitable auto-maker in US said he derived strength from the Core Purpose of Ford Motors, as envisioned by the founder Henry Ford. Every day, when he walks into the company building, he reads the Ford advertisement published in 1925:

“Opening the Highways to All Mankind”

In his own words, Mullaly said,

“I walk in here every morning [at 5:15 a.m.], and the light comes on, and I stop and read it—to serve all mankind. It makes me cry.”

(Source: Bloomberg Business, Feb 03, 2011, The Happiest Man in Detroit by Keith Naughton)

He believes that his job in Ford is to bring safe and efficient transport to EVERYONE.

Mullaly talks about it frequently. He memorizes it. He begins auto shows with the declaration of the core purpose of Ford. And this belief in the noble purpose of Ford gave him strength to turn Ford around despite the hard times. When we only look at financials and forget why we do what we do, it is easy to forget. Worst, if finances are the only reason we do what we do, we will never have the fortitude to survive a crisis. If we hire people who do not believe in our Core Purpose, they will leave when the company goes through a crisis. Only people who share your Core Purpose will stay and turn the ship around.

Purpose Gives Focus

Mullaly had to make some critical decisions – what should Ford focus on to turn the ship around? They had limited resources; at one time even surviving on a loan while burning $2 Billion a month. Again, the CEO went back to Ford’s purpose – what does it mean to bring safe and efficient transport to EVERYONE?

He returned to Ford’s roots to provide affordable and top-quality cars for the common man. Thus, he sold off the European luxury lines like Jaguar, Land Rover, Aston Martin and Volvo, and focused on beating Toyota and Volkswagen, two similar brands that targets the man-on-the-street by becoming more fuel-efficient, safer and more beautiful than these two competitors. When the Lehman Brothers crisis was over, Ford showrooms had cars that were nicer, better and more efficient than what car buyers remembered Ford had. By focusing on their Core Purpose, they went back to what they did best.

Purpose gives Clarity

The last thing I learnt from this article if the importance of clarity. In line with Ford’s purpose to bring transportation to EVERYONE, Mullaly asked himself where is the world’s largest population, and what do they need?

The answer – Asia and small cars.

Asians neither need nor idolize gas guzzlers. And Asia’s big population would generate enough demand to lift Ford’s profits. This belief drove him to get his designers to design cars that are good for all markets rather than just regional ones. This led to billions in savings as Ford plants got great economies of scale. He hired the right people to lead the Asia team, invested in plants in China, and set a target that 70% of Ford’s growth must come from Asia. Core Purpose helped him to see clearly where to put his resources to achieve the company’s financial as well as highest goals. Although late to the China market, he believes Ford can make an impact by having cars that are beautiful, high-quality and at the same time affordable – cars that have universal appeal to the man-on-the-street.

Conclusion

Last week, as we celebrated Chinese New Year in Singapore, our company, the Adam Khoo Group held our annual AGM. During our AGM, we reiterated our Core Purpose, which is to Inspire a Better World through Training.

What does it really mean?

For us this year, it means adopting a CSR project that will allow us to use our expertise as a training and education company to create a better world. We decided to work with a school in a slum in Batam, where students can’t even afford to pay $4 a month for school fees.

Why did the management team do this? For publicity, as most cynical people would label CSR? It is because Core Purpose, if not DELIBERATELY lived out, made alive and acted upon, will die crucified upon some poster hung on a wall, unremembered. When purpose is alive and well, it will be like a lighthouse pointing us in the right direction. At times of haze and fog, it will direct us safely through the storm. It reminds us who we are, and where we can be at our best.

Is your company clear about its core purpose? This is how to find out:

Does the Core Purpose give you clarity, focus and strength? Ask yourself, if your company stops its operations tomorrow, will your customers feel a sense of loss? Or will they shrug and go next door to your competitor and life goes on?

Does your company have a clearly defined and articulated Core Purpose?

Are you keeping your Core Purpose alive?

If you need help on how to craft a meaningful Core Purpose statement that will drive your company forward and inspire everyone through difficult times, grab the book Scaling Up or just join us at the upcoming Scaling Up MasterClass with Verne Harnish “The Growth Guru” Live! in Singapore on 27th April.

You can also visit www.scaling-up.sg for more details or contact the team at masterclass@akltg.com for more details.