Once the executive staff has agreed on the Vision and Mission, it is beneficial to develop a short list of values to be embraced by all members of the staff. These value statements will guide the team and provide checks and balances on the development of a healthy corporate culture. Following is a list of value statements I have used in different companies over the course of my career. It is advisable to pick no more than four to six.

CUSTOMERS ARE THE REASON WE EXIST
Without someone to purchase our products and services we would have no reason to continue as a business. Our sole purpose is to satisfy the requirements of our customers and through them provide the highest level of quality and product performance anywhere.

Over the past 3+ decades I have been both an organizational team member, and a serial entrepreneur. That journey has led to successes and failures and many lessons were learned the hard way.

Among my earliest lessons was learning to admit that I didn’t even know what I didn’t know. After almost 10 years at a NYSE conglomerate, I had risen to Group Vice President by the ripe old age of 33, managing multiple companies with over 300 employees. When the opportunity was presented, I acquired my division and 2 subsidiaries. My rationale was that I knew these businesses inside and out, had hired most of the senior managers, and overseen the strategic planning for years. The division was a consistent producer of growth and cash flow. I had little problem raising debt on an 8:1 debt/equity ratio (after all, that personal guarantee clause was insignificant and would never be exercised). I slapped myself on the back, took my wife to Hawaii and bought a Rolex. Then I left for Japan and Taiwan to acquire strategic tuck-in companies that would increase our ability to grow market share. The Company was wildly successful; after all, contracts with the “Big Three” domestic automakers would drive our valuation through the roof. In fact, we were offered coveted contracts for the platform life of Ford’s Escort, Cougar, Thunderbird, and Bronco vehicles.

Until her death in 1996, my loving grandmother would often repeat the story about how I would try to command my older brother to finish his dinner.  “Brian!” she would mimic my firm, not-quite-so-deep but still very bossy five year-old voice.  “Eat your food!” she recalled me exclaiming.  Brian, more than three years my senior, would simply reply “You’re not my daddy” reminding me that there was only one alpha male in the Phillips household at that time.  Clearly, I was not in charge and had no business telling Brian what to do.  However, the point I was making was valid and, if executed, would lead to favorable results (we could go out and play!).  At the time I hadn’t yet learned the all-important notion of leading by influence.

This weekend I was talking to my mother-in-law and looked up from where she was sitting to see our attic door dangling from its hinges ready to fall and clock her in the head (not a way to get bonus points with the in-laws). So I called three carpenters to quote on the fix in addition to some other odd jobs around the house. You would think three carpenters, all with good credentials might think the same way, but surprisingly that was not the case…

In 2009, a community bank in the Western U.S. had over $100 million in troubled commercial real estate and construction loans. With a net loss of $82 million from operations in 2009, the CEO was removed and the incumbent CFO was appointed as “caretaker” CEO to work on recovery and to find new capital or a buyer. The caretaker engaged a seasoned interim turnaround executive to urgently direct the correction of the loan portfolio, resolve loan related regulatory criticisms, improve underwriting and policies, and create a stronger foundation for recapitalization of the bank. Hiring of the interim executive freed the “caretaker” CEO to concentrate his time on pursuit of new capital or a buyer.

Managerial neglect is expensive. When there is managerial neglect, businesses are not only losing “opportunity dollars,” but hard dollars as well. Managerial neglect that costs a business money is defined as all those things that a manager should be doing but isn’t.

Thomas Edison is reported to have once said, “I have not failed. I’ve just found 10,000 ways that won’t work.” Personally, I would rather my staff ask for forgiveness rather than permission and I actively promote this decision making model throughout the organization. Very few decisions should be made with the flip of a coin. As long as a logical methodology is used for the decision, I want the team to collectively make as many decisions as possible and at the lowest level of the organization. This promotes their buy-in to the action plan and gives them a stake in the results.

Overview

In the wake of the “New Normal”, defined by PIMCO as a period of slower growth, static profit margins, increased government intervention and consumer retrenchment, there have been few things to fire the imagination more than a viable growth story. Key stakeholders, including management, lenders, investors (private equity and venture capital), suppliers, etc. have all pursued with increasing fervor the elusive goal of robust growth. But the goal is not elusive for all companies; in fact, some companies are finding themselves poised for growth. And for those fortune companies, there can be no greater disappointment than a failure to execute in the face of such opportunity.

Valuing a company is the easy part; creating that value in the first place so you can measure it is a more formidable task. Determining value is more art form than science. True value can only be established at the time of a transaction, where willing buyer tenders payment and willing seller accepts it in exchange.

Investing in under-performers has become a more acceptable practice. It can be very profitable if you know what to look for and how to execute, as many buyout firms and investors are finding out. You must:
•ascertain if a company is turnable;
•know how to fix the problems;
•avoid spending money on past-sins;
•obtain at the right price;
•manage the turnaround; and
•sell at increased value.

The Tao was written twenty-five hundred years ago by a man named Lao-Tzu who wrote 81 verses that many believe to be the ultimate commentary on the nature of our existence. The basic text of these verses is called the “Tao Te Ching” or “The Great Way.” I don’t know if it is the ultimate commentary on our existence, but I do know that the essential principals of great leadership do not change as witnessed below by what was written in the Tao. The great scientist, inventor and artist, Leonardo da Vinci was a student of the Tao and like him we can all take heed to what has been written so long ago about great leadership. It is the 17th verse of the Tao, which addresses leadership: