ESOP for retention, The brain, Are you coachable? Inflation back in town & Momentum for Sustainable Growth
15th August 2021 Evolution Partners Newsletter
“The ability to learn faster than competitors may be the only sustainable competitive advantage.” Arie de Geus
Hope you’re Thriving!
I’ve had a productive week working with groups of leadership teams on a couple of quarterly planning workshops. I enjoy the group planning structure because it builds a cohort type dynamic where teams learn valuable lessons from one another. At these workshops, we tend to spend a reasonable degree of our time on the three-year horizon, rather than only on the next quarter, which is partly the definition between an operational CEO and a strategic CEO. Operational CEOs focus on the short-term horizon of 1 week to 1 year and look at tactical items such as margin, sales, and people performance. Strategic CEOs focus on the long term horizon of 3 years plus and look at innovation, sales relationship health and people development. This week on the podcast, Kevin and I explore this difference further and how to become a more strategic CEO. More on that in the podcast section below.
In an awful high-water mark, at another meeting this week, one of the leaders I work with mentioned they had 21% of their team leave in the past quarter, such is the heat in the recruiting market at the moment. Plus, they are making more profit and more revenue than ever. The intellectual property they’ve lost, the cultural impact is tough to deal with. So we’re working on both retention and recruitment and building out their virtual bench. As you’d imagine, the leader told the story of how every time a person unexpectedly walks into his office, he gets a little shaky!
ESOP for retention
One of the ways to help retain people is an Employee Stock Ownership Plan, which may seem a little complicated at first, or risky, but this week I came across a new tool that provides an ESOP out of the box, which is simple, legal and affordable. Cake Equity (think a share of the cake) is an Australian business that helps businesses structure, implement and manage an ESOP and investment structure. One of the leaders I work with has been using it for a while and speaks very highly of it.
Note – I have no affiliation with and gain no compensation from Cake; it just looks like a helpful tool.
The brain is NOT like a computer; it’s like an ecosystem
What IS the brain?
We know the brain thinks, processes information and regulates our body, but often we don’t have a way to describe what the brain IS. So like in many other parts of life, we use a metaphor. But metaphors can be stupid (possibly the best link in this newsletter. My favourite is “John and Mary had never met. They were like two hummingbirds who had also never met.“), and because we don’t quite know what the brain IS and how to understand it, often we use the metaphor of a machine. We say the brain is like a machine. The brain regulates our body like a machine. But the machine metaphor oversimplifies the brain into a one-size-fits-all idea that can have significant consequences.
This week I came across this brilliant article explaining why the brain is not like a machine, but instead, the brain is like an evolving organism—living, growing, and self-regulating in a metabolic relationship to its environment. So instead, the brain is, in and of itself, an ecosystem.
Read the article here Your mind is NOT like a computer, it’s like an ecosystem
The secret to Brain Power is sweat
Imagine that your brain is a machine (see what I did there), well like a machine, the brain needs to be kept maintained and kept healthy. So it seems that exercise not only keeps the body healthy but also the brain.
In a recent study, older men and women who walked for six months showed improvements in white matter and memory, while those who danced or did stretching exercises did not. Here are a few points on why exercise is just as crucial for your brain as it is for your body.
- Brains have grey and white matter. Grey matter contains neurons, which are responsible for thoughts and memories. White matter contains axons, which connect neurons to one another.
- In the late 1990s, studies showed that our brains continue to create neurons well into adulthood. Follow-up work found that regular exercise increases brain volume.
- A recent study found that aerobic exercise can increase white matter as well. This can (potentially) combat neurodegenerative disorders.
- Participants that walked 3x per week for 40min had more axons, fewer lesions, and performed better on memory tests vs. the control group (sedentary).
Read the article here How walking can build up the brain
Are you coachable?
In all the work I’ve done with leaders and with coaches worldwide, one of the critical questions that coaches ask is, “Is the person coachable?”. Unfortunately, many coaches simply refuse to work with leaders who aren’t coachable.
In an HBR article I read this week; the author identifies seven core characteristics that differentiate leaders who evolve through coaching from those who don’t. Here are the seven coachable characteristics.
Tolerance for discomfort.
Openness to experimentation.
Ability to look beyond the rational.
Willingness to take responsibility.
Capacity for forgiveness.
Ability to ask for support.
Read the article here Are you ready to be coached?
Inflation back in town
According to US president Ronald Regan “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hitman.”It seems he wasn’t a fan, and looking at the chart below, it hasn’t really been an issue to concern leaders for some time. In fact, only once in the past 20 years has inflation been higher than last month’s YOY figures, which was in 2008.
When inflation becomes an issue, you need to pay extra attention to your costs because very quickly, with an increase here and another there, you can find your profit margin wholly eroded.
Given this climate that many of us might be unfamiliar with, I’d encourage leaders to regularly look over the Seven easy levers to improve cash flow and ensure they don’t get surprised by inflation.
COVID-19 might not necessarily be with us forever. This study compares smallpox and polio to COVID-19 noting that COVID-19 eradication might be slightly more feasible than for polio, but much less so than smallpox.
Here’s a thought that instead of SMART, perhaps your goals should be FAST
A study found that 65% of US workers who can work remotely would take a 5% pay cut to stay at home.
This week on The Growth Whisperers podcast
What’s the difference between an operational CEO and a strategic CEO?
Operational CEOs focus on the short term horizon such as 1 week to 1 year and look at tactical items such as margin, sales and people performance.
Strategic CEO focus on the long term horizon of 3 years plus and look at innovation, sales relationship health and people development.
In this episode, we talk about the difference between an operational and strategic CEO, and how to become a more strategic CEO.
Are you an operational CEO or a strategic CEO?
Listen to The Growth Whisperers
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