Understanding the Bigger Energy Picture

With average gasoline prices in the United States passing $5 per gallon this month for the first time ever, energy has really captured the headlines showcasing the very real impact on many people’s pocketbooks and way of life. This has reenergized the dialogue and debate over oil’s usage, the primary feedstock for gasoline, and politically the need to switch more quickly to wind and solar.

Unfortunately, our modern information world of cable news, twitter, and other forms of media showcases unbalanced snippets.  Having spent my career in the energy industry, over the years I have found it rather appalling at the naivete and lack of depth of understanding for such a complex energy/environmental system that fundamentally powers our standard of living.

In my blog of October 25, 2021, on Understanding the Energy Quagmire, the focus was on climate change highlighting the issues around renewable energy and fossil fuels.  My overall conclusion was we needed a more thoughtful balance of the risks and rewards of different courses.

Then in my blog of March 4, 2022, we looked at the concept of energy security being made up of economic security, national security, and environmental security. In other words, energy security plays a major role in the other three primary securities which are central to daily living. Today, we are seeing the impact on economic security which doesn’t receive much attention until energy prices rise significantly.  In the blog, I referenced a presentation that I had given in August of 2021 before Russians invasion of Ukraine.  I made the point in that presentation that we were underplaying the role of energy security in terms of its potential impact on national security, in other words, a lack of balance and foresight.  The Russia/Ukraine war has brought this reality to the forefront.

Today, I received an e-mail from Scott Tinker, Director, Bureau of Economic Geology & State Geologist of Texas who is a Professor at the University of Texas.  I met Scott through my role at the University of Houston’s Global Energy Management Institute at the Bauer College, and my leadership role in the GHP’s Energy Collaborative.  He is incredibly knowledgeable and insightful on the energy/environment complexities and recently produced a YouTube video entitled TEDx-The Dual Challenge: Energy and Environment. 

Scott really addresses the bigger energy picture in a balanced way. He has requested us to share this 17-minute video with friends, colleagues, and social networks.  It will give you much greater insight into the big picture reality of energy beyond simple snapshots through the media.  Please listen to his insight:

Energy Security

As the Russia/Ukraine war escalates, oil and gas are really back in the spotlight. The rise in our gasoline prices largely driven by national policy to reduce the use of fossil fuels is now being exacerbated by the ramifications of this Russia/Ukraine conflict on worldwide oil prices. I had mentioned this in my recent blog …

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Case Study: The nybl Story

Every small growth company has a unique story to tell including lessons learned. 

The insights from their story and lessons learned help drive their company forward into the next phase of their journey.

For others who are orchestrating their own growth, these insights can be invaluable to help them in their journey.

Overall, my 4 Stage Growth Model for Small Companies provides a useful conceptual framework in assessing your current position and planning for your next stage.

My blog entitled Achieving the Take-Off Stage in Small Business describes moving from the Growth Stage to Take-Off with some mentoring advice.

It is particularly challenging to move into this Take-Off Stage. So, I felt hearing the story of one who has done it would be beneficial for those pursuing this leap.

One of my clients has been receptive in sharing his company’s story, and he has also become a mentor for young entrepreneurs.  

I want to introduce you to Noor Alnahhas.

Our relationship began in January 2017.  Noor was one of three principals in a software development company.  The other two principals were technically focused while Noor provided the business perspective.  He had graduated from the Wolff Entrepreneurship Center at the University of Houston Bauer College of Business.

Silver Fox Advisors CEO Roundtable

While the entity had been operating for a number of years, it had no definitive vision or substantive plans for the future which was quite concerning to Noor. 

I suggested that he join my CEO Roundtable where he could get insights on planning from other CEOs of small growing companies.

At the time, each member was utilizing the EOS (Entrepreneur Operating System) framework to explain to other roundtable members their future plans. Noor found the EOS framework from Gino Wickman’s book TRACTION Get A Grip on Your Business most helpful in pulling together his thoughts for the business.

 It also became clear that the leadership structure of the company was not going to get them where they needed to go.

Silver Fox Advisors Fox Den

As the plans took shape, my suggestion was for him to participate in a Fox Den where the Silver Fox Advisors provide a review of the business plan and challenges. 

Generally, there are four advisors with a moderator to coordinate the session.  The plans and issues are provided in advance, so the session provides focused advice.

Noor felt this was extremely helpful because the advisors did not have a built-in bias as do personal friends, investors, and so forth.  They were frank and straight forward in their commentary and assessments. Just what he wanted and needed.

Advisor Role

I have been an advisor and mentor to Noor for some five years now.

Two main aspects of our discussions have been strategy and leadership.  One of my reasons for developing the 4 Stage Growth Model for small companies was to provide a framework for clients like Noor.  It has been an integral part of their planning.

Similarly, the Leadership Personal Profile has been a tool to help leaders understand themselves better and where they need to develop further.  Noor has been a champion of the profile. 

Here are some insights into his profile that will help you understand the nybl story.

Part of Noor’s personal vision is to build companies, chase opportunities, and work with people he enjoys being around. 

One of his key values is finding the positive as he believes negativity achieves nothing.

His perspective on life is there is no such thing as luck, just opportunity meeting preparedness.  If you fall three times, you just have to get up 4 times so that every failure is a step toward success.

His character statement starts with “I am a fun, friendly, and honest person who will do whatever it takes to deliver on my commitments/promises. 

He recognizes that he needs to think more before acting and listen more than talking.

As you can see, Noor is a high achiever.  He strategically looks for the solution in every challenge pondering new and out of the box ideas if that solves the challenge. His leadership brand is chief of dreaming stuff up.

 Over this period, Noor has relocated to the Middle East and has now become the CEO of the reformulated company named nybl.  Here is the nybl story in Noor’s own words.

Noor Telling nybl Story


“Nybl, its structure, strategy and subsequent success are all the result of the lessons learned over many years of doing the wrong thing. But these lessons came much later than the events that brought them about, and I only learned these lessons when I got external, unbiased feedback, mentoring and support – which came from the CEO Roundtable, Mentoring from Lane, and the Fox Den feedback.

The difficulty with achieving moderate success is the complacency it can lead to. The previous enterprise I was a member of had fallen into the moderate success complacency rut. While I was not satisfied, some of my partners were and this was a significant concern for me. This lack of satisfaction drove me to find a source of advice, mentoring and help to get out of the rut, and achieve my personal goals and ambitions.

During my undergraduate studies at the University of Houston, I had the privilege to work with Ralph D’Onofrio, a member of the Silver Fox Advisors, in mentor roundtables setup as part of the Entrepreneurship program in the Wolff Center for Entrepreneurship. I remembered the valuable lessons I learned from Ralph (which I still use today). I set out searching for a way to find a similar source of help. After finding several very expensive roundtable and communities – I went back to the original source at the Silver Foxes and discovered the CEO roundtables. It was exactly what I was looking for, and best of all, it was free. I sent in my application, and after a few interviews I was placed into a group led by Lane Sloan.

The roundtable had a group of CEOs from diverse industries and business types, but it was quickly clear that we all faced similar challenges. I learned from everyone’s experiences and challenges. I shared my challenges, thoughts and ideas and I got incredible feedback, suggestions, advice, and thoughts shared from the CEOs in my roundtable. While the CEO Roundtable provided an immense value, I realized that I needed more one-on-one mentorship. This is where journey with Lane begins.

Lane’s approach on mentoring me was strategic in and of itself. First, we identified my personal strengths and weaknesses, which helped us both understand where I was and what I needed to do to improve. He then helped me map out my personal purpose so we could both understand my personal drivers and motivators. From there we worked together to define where the company was currently in the 4-stage growth model, and where we wanted to go. And finally, he combined all of these to develop a complete strategy. Short term, long term, personal and business. It’s been an incredible adventure. I learned things about myself I never knew. But most importantly this entire process was the jet fuel to our nybl Rocketship.

I’ll go into the values and importance of each of the steps Lane took, but I must point out the most important one of all: being a guiding north star. Building a sustainable, profitable and scalable business is one of the most challenging things I have ever done. If it were easy, everyone would do it. It’s stressful, all-consuming, and at times downright demotivating. It takes a ridiculous level of commitment and belief in your concept to battle through all of that. The problem is sometimes, you might just have a bad idea. This is what I believe is the most difficult part of being an entrepreneur: you must believe, without a shadow of a doubt, that the impossible task you are setting out to accomplish is achievable even when no one also has been able to achieve it. So, at what point do you give up if it’s not working? Or, how do you know to continue your perseverance at the most difficult times? How do you know if your idea is actually a good one? You need someone like Lane. A trustworthy, experienced, mentor, advisor, friend to tell you, without any agenda or bias, if your idea sucks and it’s time to throw in the towel or if what you have is really something and you should keep fighting for.

People will be happy to share their opinions. Why “you’re crazy” and “you should just get a job” because that’s the only world they know. Or, how it’s irresponsible to “put all your eggs in one basket”. Your true friends and family may be supportive even when they shouldn’t be because they believe that’s how they should help, by being your support system. With Lane as my mentor, I didn’t worry about intent, agenda or bias. When I was doing something wrong, he would point it out. When I chased shiny objects that were diverting my attention from the vision, he told me to focus. When things were going great, he cheered me on. But, most important of all: when it was difficult, stressful, and reaching a point where I could easily give up, he would explain where he saw opportunity. He didn’t tell me what to do, or why to do it. He allowed me to peer through his lenses, see my journey from his perspective and realize, that if what I was doing didn’t make sense, he would have told me. That is the most valuable insight I got from Lane. It allowed me to hustle and work harder. To believe, even when everything seemed impossible, and to get through the most difficult times. Throughout the rest of this article you will come to see the incredible mentorship, advice, and value Lane’s coaching provided, but there is no doubt that being a guiding north star is one of the greatest values of all . So, find your Lane Sloan. It will change your life.

Our adventure began with identifying my strengths and weaknesses as an individual, and as a leader in my organization. The interesting part was the reasoning behind this exercise. Contrary to the usual approach, it was not to “work on my weaknesses”. Lane had a great approach: if you improve your weaknesses, and don’t build on your strengths, you end up being average. Instead, focus on your strengths to turn them into superpowers and compliment your weaknesses with those who have them as strengths. That creates 2 superstars instead of one average individual. Based on the outcome of my Strengthsfinder test, we devised a plan on how to augment my weaknesses using my team and build on my strengths. This was the first step, and it allowed us both to know where I should and should not spend my time. This exercise also taught me one of the most valuable lessons – when and what to delegate to my colleagues, who were better than me at their strengths, my weaknesses.

The second step of the process was my personal purpose. This was life changing for me. Prior to defining my personal purpose, I constantly faced internal battles of work / life balance and making decisions related to the mix of business and personal. As an entrepreneur, that line is very blurry. But, after being brutally honest with Lane and myself during the Personal Purpose exercise, everything became crystal clear. I had, without even knowing, created a prioritization hierarchy for everything in my life by simply defining what I wanted to achieve – my personal purpose – in all aspects of my life. Now, this may sound daunting, but the exercise is very well thought out and takes approximately 2 hours with a great coach taking you through it. These 2 hours were the best I ever invested in myself. Understanding my personal purpose also created goals, targets, and milestones for my personal life. I always had a business plan, timelines and milestones for work, but never applied the same level of thought and planning into my personal life. Defining personal purpose makes every decision, whether personal or business, a simple decision. It either fits and delivers on your personal purpose or doesn’t. THIS CHANGES EVERYTHING!  

Once we had defined my own strengths and weaknesses, and my personal purposes we now moved on to the business.

The process for the business was similar. We began with an audit like approach – defining where the business sat in the 4-stage growth model. If you’re not familiar with it, the 4 Stage Growth Model, as it is defined by Lane, categorizes businesses based on their growth stages, and helps in building a strategy to move from one stage to the next. It is important to identify where you stand, in order to identify where your focus needs to be now, and where it should be in the future. The Four stages are Development, Growth, Take-off and Expansion. Through this analysis we identified that nybl was at a critical point: moving out of the growth stage, and into the take-off stage. But, we were still acting like a company in the growth stage. Our organization was not ready for take-off. We did not have the proper processes, systems, organizational strategy, and internal leadership that take-off requires. As a leader, I had to take responsibility for the position we were in. Most of it stemmed from my lack of developing my internal team into leaders of their own. This is, by far, the most important quality of a leader – to build their team into independent leaders capable of carrying the mission and vision forward on their own with guidance.

“if you don’t know where you are going, any road will get you there”

  • Lewis Carroll

Before working on our short-term strategy, we first mapped out the long-term strategy. Once that was complete, we knew where we were going, and could devise the short-term strategies that would take us from one milestone to the next – our path to success.

This began in January of 2020. The original 7, as I like to call us (the 6 co-founders and our founding investor) sat down for 5 days to decide where we wanted to go. We emerged with a vision. A company built to transform data into intelligence, and a long-term strategy to be a camel, not a unicorn. A sustainable, profitable company that will be much, much larger than a unicorn, and not mythical! To become the largest technology innovator in the Middle East generating human, technological, and economical value in the Middle East and exporting them to the rest of the world. That was our plan for nybl.

Now it was time to get to work.

Now that we had this Big Hairy Audacious Goal in mind, we set out to map the path to get us there, one milestone at a time. The first milestone was to prepare our company for the take-off that was we were on the verge of. This was a gargantuan task in and of itself. It meant hours of discussions, planning, strategizing, re-planning, re-strategizing and more discussions. We worked on everything, beginning with the organization. We mapped out the current team, their strengths, and weaknesses and where they could become superstars of their own. We identified the gaps, and weaknesses that no one had strengths to fill, and set out a plan on how to build a world changing organization.

Every hour of conversation with Lane turned into tens of hours of work with the team. Lane and I met on a weekly basis, sometimes twice a week when the progress permitted. The company began to take on a life of its own. Mind you, this process began during COVID, right when we all got locked down. At a time when we had no clue how we were going to even make payroll at the end of the month. But, having a clear vision of where we were going and what we wanted to achieve gave us the energy and motivation to power through the most difficult times. It enabled us to take one rejection after another from investors (we were not ready for them at the time). We took every rejection as a learning opportunity: how could we have done better? Where did our messaging fail? What did we do wrong? How can we improve in the next round? We learned. We improved. Most importantly, we continued to build the foundations for expansion.

We emerged from lockdown with an incredible plan. One that paved the way to the company we are today. In the past 12 months, we’ve grown from an 8 person “start-up” to a truly global scale-up with 40+ people all over the world working with more cohesion than organizations running for years. This was not luck. It was preparedness meeting opportunity. It was the hard work put in to focus on the foundations to enable sustainable growth. Most importantly it was thanks to the invaluable coaching from Lane Sloan, the support from our initial investors and my incredible co-founders. We owe everything to this group of people. An incredible handful of people who believed in our vision and supported us every step of the way. Shriprakash, Ayman, Rawan, Rashad, Mohammed, Essam, Saleh, Karim, my Father Nasser Alnahhas and of course Hugo. Of course, my co-founders and the entire nybl team – thank you all!

Our Growth stage organization had become a take-off organization. Individual members were now leaders. Each with their own path, milestones, and responsibilities as part of the rocket ship we called nybl, barreling through space. As the saying goes, we were here to kick ass and chew bubble gum, and we were all out of bubble gum J 

2021 was our transformational year. We began the year with a major theme: getting our house in order. This meant organizational, structural, legal, financial, and most important of all, people. All part of the 4-stage growth model, to be ready for expansion.

We began this transformation with our people culture. It is my belief that every single company in the world is a people company. Regardless of the product or service a company delivers, it is the people of that company that manufacture the product or deliver the service. Together with our newly appointed Chief People Officer (Reem Osman, our savior) we built an organization destined for success. We made it our goal to be the best place in the world to work. If our people loved working at nybl, their output would be stupendous. And it is! 

We brought on a CFO (Shoutout to Hans and Kristian from Finstrat Management). Through their fractional accounting & finance service we built a financial structure fit for multinationals. We had solid financial metrics, we planned, we budgeted, we forecasted, we analyzed and repeated. Over, and over until we had it right.

We built our team out with the structure for expansion, and a focus on culture. Software developers, data scientists, industry experts, product champions. This focus on our people enabled us to develop world changing technology, and this technology yielded incredible products. These products brought business and as a result we signed multiple long-term, global contracts during 2021 to set the stage to move nybl from take-off to expansion in one year. And what an incredible year it has been.

We entered 2021 with 14 people. As I write this today, we enter 2022 40 strong and growing. Our biggest competitors are now our partners, and our journey is just beginning. 2022 marks the year we shift from take-off to expansion.

 And we’re not going to just expand, we’re going to explode. We explode with an arsenal of tools including our culture, technology, strategy, and a vision and a mission. Lane and I continue our sessions on a regular basis. Each time, analyzing our strategy, making pivots and adjustments where necessary, and working on each step towards our giant goal.

Our milestone for the year is to become a Billion-dollar company (yes, with a B). Not through valuation from investors, but by sheer volume of business, technology, and innovation. It is our first critical milestone in our journey to becoming a camel. It’s an incredibly challenging milestone. One that is exciting, motivating, and fun! So much fun, I sometimes forget it’s work.

Peter Drucker says “culture eats strategy for breakfast”. I’d like to add my own twist to his quote: great culture combined with great strategy eats whatever it wants. That is the essence, the secret sauce to nybl. Incredible culture, with incredible strategy. I wish I could say we thought of that all on our own. But we owe our success to our team, our investors and to every person and organization that supported us along the way.

To The Dubai Future Foundation, and The Dubai Future Accelerators: Thank you for believing in a handful of people with nothing more than a vision.

To Smart Dubai Government, Dubai Health Authority and ADNOC: Thank you for giving us the opportunity to prove ourselves when no one else would give us the time of day.

To our investors and board of advisors: Without your unwavering support we could not have survived the difficult times. Thank you for your belief in a vision and mission greater than all of us.

To the nybl team: Without each and every one of you Rockstars, none of this would be possible.

To the original 7, my ride or die co-founders: This is the result of your dedication and belief. Our Journey is just beginning, and the dream is becoming a reality.

To my Mother, My Father, my Wife, and my beautiful Daughters: I love you. Thank you for the support and for being my light during the darkest of days.

And of course, to Lane Sloan: Thank you for taking on a scrappy entrepreneur who wouldn’t give up and imparting the most valuable of your assets: your time, and your knowledge. You are a gift, a treasure.” 

My Remarks

When I asked Noor to write the nybl story, I was interested to see what he would say.  This is not really a typical case analysis with detailed financials and particular steps along the way.  It is all about his learning and feelings that led nybl to fulfilling the Take-off Stage.

You feel the energy and passion that Noor has in the business.  It for sure has been a challenge.  Today, as Noor said he does not see this as a job or work rather instead an exhilarating fun experience that he looks forward to every day.

Results make a difference: the huge revenue growth, investors coming to him, unsolicited people wanting to join the company, next generation culture, inspired employees, an incredible hiring system, leaders emerging at every level, an adaptive growing organization, a well-structured financial system, linked operational processes, reputation growing faster than marketing and so on.  All this contained in the strategy and forward plans. The key elements in taking off.

Noor’s incredibly lofty goal of becoming a billion-dollar company may appear unrealistic to you, but Noor believes it.  He has done the research on similar companies in the artificial intelligence space and their position. Reaching take off requires lofty goals so I am careful not to dampen his enthusiasm.  He is willing to put the aspiration in print!

Finally, you may feel Noor is taking an early victory lap by thanking everyone who has been a part of nybl reaching Take-off.  This is only one stage in the nybl journey ahead.  Yet, it is crucial one.  For Noor, the present position is a relief in many respects seeing the company take off and his thanks to the many contributors is genuine.  He has been overly kind to me.

Throughout this blog, you should get a reasonable picture of Noor.  Foremost, he is an incredible learner and listener.  Second, Noor does not accept defeat.  His leadership growth has been extremely fun to watch.  And I believe leadership is the key to achieving the Take-off Stage.

Understanding the Energy Quagmire

Every time there is a severe weather event like Hurricane Ida, it is blamed on global warming labeled climate change.  One would think we never had bad weather in the past.

Actually, Hurricane Camille in 1969 had the highest wind speed at landfall at an estimated 190 mph when it hit the Mississippi coast.

Don’t get me wrong.  The data is very clear that the earth is warming.  And an increase in carbon dioxide has been one of the major factors with our use of fossil fuels to provide us energy. 

Not surprising, there are organizations like Bad Carbon that want to keep all the “fossils” in the ground.  On a more balanced side, the Paris Accord is all about limiting the rise in temperature through limiting greenhouse emissions (GHG).

Climate Change

In 2018, the Intergovernmental Panel on Climate Change advocated global GHG needed to fall to zero within the next three decades.  A number of nations and major companies have set targets to reach net-zero by 2050; in other words, balancing any emissions by absorbing an equivalent amount from the atmosphere.

Ecology landscape – climate change concept, desert invasion

These are much more aggressive positions than when I was chairing the Greater Houston Partnership’s (GHP)Energy Collaborative Committee around 15 years ago.  At that time, the Energy Collaborative Committee was promoting a more balanced energy equation. 

There is no doubt renewable energy has some distinct advantages with their lack of carbon dioxide generation. But to be brutally honest, back then we had a hard time seeing renewables as a total substitute for fossil fuels.

We were actually quite proud of the wind electricity generation in West Texas.  The Lone Star State has for some time been the biggest wind producer of electricity in the United States.  Iowa is a distant second.

We were even successful at the GHP in getting Vestas, a wind turbine manufacturer, to set up an office in Houston.

Wind is not a cure all.

The biggest issue with wind is its intermittency as you may know.  The wind is not always blowing, and it blows stronger at night than in the day when the power is most needed.

green meadow with Wind turbines generating electricity

That raises the need for the ability to store power or to offset when the wind is not blowing with another energy source.

Natural gas combined cycle power plants have been a good solution with quick start-up capabilities and with an abundant new supply source from shale gas. And thankfully there are significant advances in energy storage, but more technological advances are needed.

The other big issue is location.  West Texas, as an example, is not a high population center.  That means you need to build transmission lines to major population centers like Houston, Dallas-Fort Worth, Austin, and San Antonio.  Texas has done that spending some $7 billion which has supported West Texas wind renewable developments.

It’s not that straight forward across the country.  The stronger wind capability goes up the middle of the United States.  That is why Iowa, Oklahoma, Kansas, Illinois, Minnesota, Colorado, and North Dakota are in the top ten list of wind power generation.  Unfortunately, many of the big population centers are on the east and west coast.

Besides building the required transmission lines as Texas has done, there is also a loss of power from the transmission.  With the networks in place from the 2015 to 2019, the EIA estimated a 5% loss in transmission for wind.

Like any source of energy, there are various specific issues. Big wind turbines are not what everyone wants to see, visual pollution. These giant blades spinning up to 180 mph are estimated to kill a half-million birds a year according to the US Fish and Wildlife Service

The case for Solar

Solar sounds very promising with the energy radiating from the sun.  Capturing that energy has always been one of the key technology challenges. The most efficient solar cells approach 30%, but solar panels are generally in the 20 % efficiency range.

Thus, a solar farm of 1 megawatt powers around 200 homes and can take 4 to 5 acres in geographical space requirements.  For solar to power the electricity needs of the United States, Vivint.solar estimates that requires roughly 14,000,000 acres or 22,000 square miles about the size of the Mojave desert.  That is a lot of land.

One of the largest utility sized solar farms in the world is in India covering 14,000 acres generating 2,245 megawatts.  In comparison, Egypt built a natural gas combined cycle power plant in 2018 with a total of 14.4 gigawatts of power generation with 12 power blocks each having 1,200 megawatts of capacity. It supplies up to 40 million people with reliable energy.

Solar panel

Like wind, intermittency is a big issue for solar. There is no generation at night which varies by the seasons depending on location.  Time of day also makes a difference. Cloud cover during the day is a real impediment as well. Thus, energy storage is again key with this intermittency.

The sunbelt makes the most sense for solar. Thus, like wind, the high potential solar locations do not always match up to population centers in the United States. Here in Texas, the best solar capability is also in West Texas away from the population centers.  Cloudy days here in Houston are not helpful for solar.

One attractive feature of solar comes from its flexibility to be installed on rooftops. Solar panels on roofs have been around for about 40 years now reaching over 2 million installations in the United States. The pace of installations has increased significantly these last several years. I’ve seen estimates that by 2024, 2.5 percent of residential homes in the United States will have solar panels.  Why not more?  There are many factors that come into play beyond location, costs, and financing, such as roof size, shading, tilt, construction, grid hook-up, local/federal incentives, rentals, and so forth.

Customer demands

The big question remains how much electricity generation can wind and solar provide that will satisfy consumer needs? 

Today, together these two renewables provide only about 5% of the energy consumed in the United States. The technical practicality seems more challenging as developers have already pursued some of the best locations for solar and wind farms.

To really address carbon dioxide emissions, then electric-powered vehicles are important of course.  That has another set of issues that need to be overcome beyond generating electricity such as charging stations across the country.

Those developing plans to achieve net-zero emissions by 2050 foresee trillions of dollars of investment.  Money that could be spent elsewhere more productively if the concerns were not so great.

Thus, the really big question is the consequences of climate change.  How catastrophic will it be for mankind?

Since the 1960s, there have been many doomsday predictions from climate change; however, none to date have materialized.  From another angle, if you look at the National Weather Service data on weather-related deaths here in the United States, there is nothing to be alarmed on trends towards doomsday. All this raises questions on how much do we really know about the consequences?

To step back for a moment, how did I decide to write this blog?

I was contacted by the IPAA’s (Independent Petroleum Association of America) leader for the Energy Workforce Energy Education Center. She wanted me to do a video presentation on Energy Economics and Geopolitics for the students in the high school petroleum academies having done similar presentations over a decade ago.

I wanted to get myself more current on the state of affairs with climate change.

Using the faithful internet, my searches found many websites that seemed rather biased and lacking detail but making large generalizations.

After searching for more detail, to my surprise some people who explored the data were debating the catastrophic consequences based on the data as opposed to any biased opinions.

I particularly found interesting Steven Koonin’s book published this year entitled Unsettled.  What climate science tells us, what it doesn’t, and why it matters.

One expert’s ideas

What got my attention was his background serving as the Undersecretary for Science in the US Department of Energy under President Obama along with numerous other impressive roles.

Initially, a strong advocate, over time Koonin has examined the data from assessment reports and studies, and now raises some serious questions.

He states in his book, “It’s clear that media, politicians, and often the assessment reports themselves blatantly misrepresent what the science says about climate and catastrophes.”

Koonin is not a denier.  He outlines our global warming and the impact of carbon dioxide.

For him, the key question centers not on whether warming is occurring but on the catastrophic impact projected. Thus, he specifically addresses my question on the consequences of climate change.

A big learning for me, Koonin points out the climate and weather are quite different. Weather bounces around from day to day.  Climate has a long horizon of 10 to 30 years and more.

He explains you should not use any one weather event to diagnose climate change and complains this is done so often in the press misguiding the public.

Koonin goes into reasonable depth on key assessment reports and in each case raises good issues about their implications.

What about the long term?

In analyzing different long term climate horizons in the data, he concludes that most types of extreme weather events don’t show significant change. Wow.

You also hear a lot about rising sea levels which is often represented as potentially catastrophic.  After his careful look at the data, he concludes that we are contributing to sea level rise, but scant evidence it is significant much less disastrous.

Nevertheless, the big concern is not just today but directed towards the future if we keep emitting high levels of CO2 emissions.

To project the future, computer climate simulation models are used with a scientific aura of validity.

Koonin is well versed in modeling and able to explain how these simulation models work.

They attempt to mimic reality based on physical laws and weather observations.

As you can imagine, they are incredibly complex using a grid structure to simulate our global climate environment.

A simulation run on the most powerful computers can take a couple of months.

The world is enormous in size with 123 billion acres, of which 37 billion acres are land. To get a finer sub grid structure which could be very helpful simply overwhelms todays computing capability and would take years to process.

As a result, these models are tuned by the researcher’s judgment because the models can be a poor description of the real world.

Obviously, Koonin forewarns over-tuning can cook the books.

His key point is that these models tend to disagree with one another, and the compromise has been to average their results. That seems a bit weak.

Moreover, newer more sophisticated models actually generate more uncertainty.

A big red flag for Koonin is the models can’t reproduce all the past.

Others raise similar points.  Now you see why I called this blog Energy Quagmire; technical practicality of mostly all renewables and questions on the consequences of global warming have got us in a bog.

The more we focus on objectivity, the quicker we can get out of this bog.

Foremost, let’s clearly address the issues that people like Koonin raise on assessing the climate data and projected consequences.

We also need more thoughtful balance of the risks and rewards of pursuing different courses. Let’s get more serious dialogue on other energy sources such as nuclear and green hydrogen.

Let’s discuss the advances in usage of fossil fuels to reduce carbon dioxide emissions. Let’s fully understand the opportunities of CO2 sequestration and similar removal technologies. Let’s consider the more complex issues and tradeoffs of economic security and national security along with environmental security. And let’s be careful in the overhyping wind and solar as our only energy sources for the future with a little pragmatism.

The Keys to Becoming a Great Leader

Now everybody knows something about leadership. 

But when I taught strategic leadership courses to MBA students at the University of Houston, in the beginning my first question to the students was “who wanted to be a leader and a great one at that?”

There was always this look of bewilderment on their faces not knowing how to answer. 

Leadership can be puzzling and seems like a lofty aspiration as many times leaders are put on a pedestal.

 Leadership does make a significant difference in the performance of an organization.

Jim Collins demonstrated that in his well-researched book Good to Great as have a boatload of others. 

Normally, when people begin to talk about leadership, they start rattling off all these characteristics.

Well, I am not going to tell you that these are the top ten characteristics of being a great leader as many articles do. 

But in my opinion that is coming from the wrong starting place.

If you begin with characteristics and try to figure out who is great, you enter into a mindset of rating one leader against another based on the characteristics they possess.

The focus is all on the leader trying to find that special one. It’s grading on the curve.  You are better than that guy, but this other bloke is better than you.

 When the conversation begins with the leader and their characteristics, it leaves out the other half of the equation.

What is really fundamental about leadership is that there are followers. There is no leadership without followers. 

You can be a great solo performer, but that is not leadership which requires more than one person. 

Think of the Other Person First

But why do people follow? 

They follow you because their needs are being fulfilled in some meaningful way.

In effect, the leader must provide a value proposition that fulfills follower’s needs as discussed in my other leadership blogs. 

This is the first key to becoming a great leader, you must start with the needs of the follower by developing a value proposition that motivates them to follow you.

That is what a company does with customers.  It provides a value proposition that cause people to buy. 

You must have a value proposition that potential followers can buy into.

What about the natural born leader? Don’t people just want to follow them naturally regardless.

Sorry, it doesn’t work that way. You shouldn’t rely on whether you got that special leadership gene. 

In fact, most serious leadership authors advocate that leadership can be learned and dismiss this great man theory from days of yore.

Develop the We Mindset

Unfortunately, we grow up being graded solely on ourselves.  It begins in grade school right on through to high school, and then on to college.  It is all about me.

When I worked for Shell, there was a lot of emphasis on the qualities the leader possessed.

I always felt under the microscope to be this superhuman leader with all these wonderful characteristics. 

I knew an awful lot about leadership theories, but it wasn’t until my later years in senior management that the second key came to light. 

A lot of my conversation had too much I.

To be a great leader you must shift your mindset from me to “we”, which is the second key to becoming a great leader.

That requires going out talking to people finding out what really drives them.

Thinking in a “we” mindset opens them up to describing their needs.  People truly love to talk about themselves.

Leadership and Planning Go Together

Leadership is not a random hit or miss process.

How do you figure out a value proposition that motivates people to follow you? This requires planning. 

What big thing have you ever accomplished without a plan?  Planning sets direction. 

Thus, the third key to leadership is planning and setting a motivating direction.

Execution is the Fourth Key

Planning by itself is not enough, even though it does set the stage. 

The plan must be executed achieving the desired results.

People follow successful performance. 

Thus, the way to measure a great leader is to look at the absolute results. 

Thus, the fourth key to becoming a great leader is to focus on results.

That is the mindset shift that makes all the difference. 

Look at the results, but what results are we talking about?

A leader has various stakeholders with different needs as set out in the first key.

Targeting these needs means forming value propositions for each key stakeholder, and since every leader has multiple stakeholders, that means multiple value propositions. 

Great results come from satisfying these different value propositions that cause your stakeholders to follow you. 

Moreover, if you judge leadership on the basis of absolute results, it’s absolutely possible for everyone to become a great leader.  

Leadership Maturity develops a Situational Style

People have different needs; situations require different leadership, and things change over time. 

There is no cookie cutter approach to being a great leader.

Thus, the fifth key is to recognize that leadership is situational depending on the world you and your followers face.

Look to Other’s Strengths

Next, you win by utilizing yours and other’s strengths.

That is what companies do with their value propositions.  They capitalize on their strengths. 

 Great leadership is all about building a winning team, where people step up with their greatest strengths.  That is the sixth key.

You build a gameplan that leverages and synergizes on these strengths.

Develop Specific Actions

Many plans fail for lack of execution as set out in the Fourth Key.

The plans must have executable components with specific actions and be constantly reviewed and revised as results dictate. 

Leadership is not about how many initiatives you can create.  It’s about how well did you deliver on your value propositions by taking well defined actions. 

Thus, the seventh key to leadership is delivering on your value propositions with specific targeted actions.  

That creates authenticity.  Doing what you say you are going to do.

Those are my seven keys to becoming a great leader.

Develop your Leadership Plan

This is a prelude to My book Develop a Leadership Plan Become a Great Leader that recognizes that your personal planning is the key catalyst for greatness.

Typically planning is done from the business perspective, at the corporate or business unit levels on what the company is going to do.

The leader needs to figure out how to integrate into these business plans with his or her leadership actions. 

Some of the leader’s value propositions to key stakeholders will be integral in the business plans. 

Other elements require the leader to formulate more specifically a leadership plan to fulfill those people’s value propositions.

In developing these leadership plans, the focus can then turn to what strengths the leader needs to develop and what fatal flaws to correct. 

That requires the leader to fully assess his/her inner profile. 

What is your leadership style?  What are your proficiencies, things you are really good at?  What are your values, beliefs, and character?  And fundamentally, what is your purpose in life? What legacy do you want to leave?

Weaving together the “outer” world of a leader’s work environment with their “inner” world of character, style, strength, and purpose s brings a practical focus to leadership development efforts.

The leader can then reflect on those aspects of the inner self that more directly impact the outer world and pursue improvement in the areas that will make a significant performance difference, and much sooner.

In doing this, the chances of becoming a great leader go up significantly because there is a targeted focus on your actions and behaviors that will make a real difference in achieving great results.

That is the whole concept that led to my book Develop a Leadership Plan Become a Great Leader. 

The quest for great results doesn’t end with one great achievement.   

It’s not one and done; it’s a marathon. 

People will follow the leader who consistently produces great results that benefit them.  And when these great results occur, that is a great leader in my book.

Character: A Learned Behavior

Ignore your character at your own leadership peril.

Over multiple decades, research studies on character and its derivate corollaries such as authentic leadership, emotional IQ, ethics and so forth find character to be core to leadership success. Many find it to be the most important leadership ingredient.  

Some authors have coined the term Character Based Leadership. In this blog I want to stick with the richness and power of the word character originating all the way back to the Greeks.

Aristotle advocated that character develops over time as one acquires habits and behaviors from parents and community, first through reward and punishment. In other words, he thought it was a learned behavior.

In my blog on the People Side of Leadership, I advocated that Character Matters, but we did not go in depth.

What then is character all about?

Trust is Key

Do not look to me to give you a precise definition of character as like many concepts there is no such consensus in the leadership literature, and I would be just adding another derivation.

One of the reasons for this difficulty is character arises from the perception of others viewing you.  That can be summed up as whether they trust you.

Where variations arise is in the behavior that you exhibit that builds the trust. There are many perspectives and qualities advocated by various authors which tells you there are challenges in building trust with others.

Chimpanzees Deception

What got me to write this blog was a shocking study on chimpanzees that I came across in none other than Lawrence Freedman’s book on Strategy A History.

He starts the evolution of strategy with a view that deception is one of the hallmarks of strategy “across time and space.” (p. 3)

He references studies on chimpanzees finding that “Deception also turned out to be a vital strategic quality.” (p. 5)

The takeaway for me is that in intelligent species, deception is used naturally to gain power over others, not surprising in a world of survival.

However, deception does not build trust.

Honesty a Learned Behavior

Deception is essentially lying. One can consider honesty largely the opposite of deception.

Honesty and its corollary integrity are almost always a part of describing character.

Whether there are aspects of honesty that are innate is secondary for building your character.

Most argue that honesty can be enhanced by repetition and imitation.

I watch my grandchildren respond to the who did it question. There is always a lot of finger pointing.  It takes repeated effort of reinforcing always tell the truth and rewarding that behavior to see progress.

Coalitions require Trust

Friedman in Strategy a History describes coalitions as another fundamental strategy across time and space.

Coalitions provide strength to combat one’s enemies which holds true even today.

Societies also flourish when there are coalitions to enable what individuals cannot do on their own. 

Forming coalitions is almost impossible without some trust.

So, there are natural incentives towards honest behavior which has been valued since ancient societies.

Obviously, there are fragilities in coalitions as circumstances change.

Societies Growing Complexity

Embedded in our culture are societal values which also form a basis for trusting the other person.

For much of man’s history, survival has been the main driving force.

In this modern world, we have stepped up a hierarchy of needs as Maslow would say.

Social and ego needs predominate bringing on more complexity in our interactions with one another.

There is not always a common agenda or perception of what is correct behavior given the diversity of backgrounds, beliefs, and needs.

On some issues such as killing another individual, society almost always condemns that behavior. However, when it comes to punishing the killer, there are a diversity of views.

And so it goes across the spectrum of social mores.

Within our society, coalitions form with strong advocacy on what is “right” or acceptable behavior proclaiming the moral high ground. It goes well beyond political ideologies.

Thus, your character is judged via different coalitions of societal values which makes it difficult for a leader on how to behave in this complexity.

For some people, your behaviors may be deemed virtuous and of strong character while others consider you entirely untrustworthy and not to be followed.

How then do you build your leadership character in today’s complex world?

Guiding Principles

I always recommend that you be open with others about what drives your behavior.  Let people know your guiding principles.  Then they know what to expect which helps build trust.

One that I advocate is “Do unto other as you would have them do unto you”, the Golden Rule.  It only makes sense that this elevates your behavior to a common ground.

I think there is also common sense in avoiding deception.  Be honest. People can count on you doing what you say you will do.

I was part of a small start-up company in which two of the partners were conniving and deceitful to myself and the other partner.  Even though I was the CEO, I got out of there as quickly as possible when the dishonesty became evident as did my other partner.  They made millions but I have no regrets as I sleep well at night being true to myself.

You need to be clear on your relations with others to help build your character. 

One of my guiding principles is I will trust you until you prove me wrong, then we part ways or find a way for you to rebuild the trust.

To establish these guiding principles, you need to know yourself, particularly your values.

When teaching Strategic Leadership to MBA students at the University of Houston, I was surprised at how many students were not able to articulate their values.  If you are flipping from one value to another, that can appear as deception to those trying to follow you.

My blog on Your Leadership Personal Profile should help you articulate what drives you along with your values and beliefs. 

Authentic Leadership

You need to be true to yourself as advocated in Authentic Leadership. For me, this line of thinking provides another perspective on building character.

The most popular book is Bill George’s Authentic Leadership: Rediscovering the Secrets of Creating Lasting Value written in 2004. You may also want to read his follow-on book with Peter Sims entitled True North Discover Your Authentic Leadership.

A shortcut is Bill George, Andrew McLean, and Nick Craig’s book on Finding Your True North A Personal Guide. This guide provides another learning vehicle for you to build a strong character.

In the guide, they provide a concise description of Authentic Leadership as follows:

“To be an authentic leader requires you to be genuine and to have a passion for your purpose, you must practice your values, lead with your heart, develop connected relationships, and have the self-discipline to get results.  You must stay on course of your True North in the face of the most severe challenges, pressures, and seductions.” (p. xxi)

Emotional IQ

It is hard for people to trust you if they can’t relate to you.

Daniel Goleman provides great insight on interpersonal relationships in his book Emotional Intelligence Why It Can Matter More Than IQ.

He says, “There is an old-fashioned word for the body of skills that emotional intelligence represents; character.” (p. 285)

I think the Oxford Dictionary sums up Emotional IQ best with “The capacity to be aware of, control, and express one’s emotions, and to handle interpersonal relationships judiciously and empathetically. Emotional intelligence is the key to both personal and professional success.”

Besides the tenets of self-awareness, self-regulation, and self-motivation, I think empathy is the key in building trusting relationships. Empathy creates a bond of respect. The relationship becomes more than just about you and your feelings.

The good news is emotional intelligence can be learned. 

There are Emotional IQ tests. If your score is low, then it will be well worth your while to put in the effort to improve it.

One way is Emotional Intelligence workshops.  Another is to work with a mentor.

Trust by Followers

The concept of character expands when coming from a leadership perspective. This is one of the reasons the definition of character in the leadership literature varies.

From my previous blogs, you know that leaders quite simply have followers.

For people to follow you, they must trust you.

Everything we have just discussed about character comes into play in forming that trust.

But they also must feel the direction is warranted and that you will be able to successfully lead them down that journey.

You saw that in Authentic Leadership that you must have the self-discipline to get results.

Follower’s trust also gets into many other dimensions of leadership including visioning, collaboration, competencies, and on and on.

For example, in Peter Rea and Alan Kolp’s book Leading with Integrity: Character Based Leadership written in 2005, they talk about the virtues of character, competence, courage, faith, justice, leadership and corporate responsibility, prudence, temperance, love, hope, and worthiness.

Bottom line, when you take an action or exhibit a behavior, ask yourself the question will my people trust me more or less?

Without the trust, your leadership is in peril.

Core vs. Edge

You might ask yourself by following my “True North” sounds like I am building rigidities in this fast-paced chaotic world?  Without my willingness to change and adapt, how can I or my company expect to be successful?

This is the key challenge every leader faces in this rapidly changing chaotic world. In my blog on leadership agility, I introduced you to the concept of core and edge developed by Lee, Hecht and Harrison. My Silver Fox Advisor colleague Doug Thorpe further developed their concepts.

Thorpe in his article Leaders: There is a new way to Understand Change eloquently describes core as “not limited to values and beliefs but has much to do with that.  Understanding your own core can help define purpose.  Core helps to understand the power of harnessing your mind’s attention and your hearts affection.”

He goes on to describe Edge. “As you face new challenges or get pushed into unfamiliar circumstances, you are walking on the Edge. The edge is where everything we don’t know lives. New ideas, new technology, new programs, business growth initiatives, all are edge things.”

So how does one manage the space between Core and Edge?

As Thorpe aptly says, “Agility is the special ability to move from core to edge and back again without losing all sense of balance or security.”

Be conscious of your space between core and edge as circumstances change; take time to develop your leadership agility.

Organizational Alignment

It is exceedingly difficult to get everyone on board on your leadership direction, especially when change is involved.

Openness, collaboration, dialogue, listening all play a role in organizational alignment.

On the Edge, there is organizational strength through diverse ideas and opinions.

However, at the company’s core, you need alignment on the company’s values and acceptable code of conduct.

Otherwise, the common trust cannot be developed to build a strong successful coalition.

Enron had the four corporate values of respect, integrity, communication, and excellence.

All decent values, but they failed to live by them.

Enron ended up as one of the biggest corporate bankruptcies in American history right here in Houston, Texas.

But more than that, they showcased what the moral failure of senior leadership can do to devastatingly impact many lives.

Your leadership character must ensure your company lives by its core values particularly in difficult times which inevitably occur.

In conclusion, a quote from Helen Keller seems apropos, although blind she had great foresight.
“Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, vision cleared, ambition inspired, and success achieved.”

It will be worth your while to work to build your character and gain more trust in yourself.

Contributed by Lane Sloan, former Shell CFO and Silver Fox Advisor.

Learning Organization: Your Company’s Survival Depends on It

A colleague of mine at Royal/Dutch Shell, Arie de Geus wrote a book called The Living Company Habits for survival in a turbulent business environment.

He contended through his work that a central attribute of companies with long lives was a sensitivity to the environment with the ability to learn and adapt.  De Gues highlighted several other attributes that contribute to a long company life, which will be discussed later.

In my recent of blog on February 23, 2021 describing the world of accelerating and chaotic change, leadership agility was advocated as a competency every leader should learn.

The main purpose of this blog is to say that will not be enough for your company.  If you want your company to survive without a premature death, then you need to build a learning organization.

What are some of the attributes of a learning organization? 

My tutelage on learning organizations came from a consultant Shell used, Peter Senge, who wrote The Fifth Discipline The Art & Practice of The Learning Organization.

Senge delves into the notion of a learning disability.  A key point I want to make is that you will naturally develop this learning disability.

The Proverbial S Curve

In my opinion, living systems tend to follow the proverbial S shape curve because of their learning ability.

 A newborn entity has little knowledge and focuses outward through a structuring process of how things work or should work.  Once a foundation is set, the structuring process accelerates, and rapid learning growth occurs.

As time progresses, this learning growth slows as the focus shifts inward towards maintaining all this structure of perceptions, beliefs, values, processes, procedures, mental models and so forth.  As Senge aptly points out in his book, “Today’s problems come from yesterday’s ‘solutions’” (page 57)

Eventually, the growth and learning plateaus, that is, unless there are interventions.

As a “living” entity, what can a company do to become a learning organization to combat the natural inertia from the past?

Learning Structures

Your company must specifically build in learning structures. De Guess identified two more habits worth noting.

One is tolerance both within and outside the entity itself.  Another way of thinking about this habit is valuing diversity of thoughts.

It’s more than inclusion. The organization needs to seek out understanding of these diverse views. In this respect, the diverse views involve differences from the current modus operandi of the company.

Understanding does not imply immediate change. Many diverse views will not make sense for the company to pursue.  But an arbitrary discounting of such ideas becomes deadly in this rapidly changing world.

Secondly, de Guess describes the habit of building cohesion and identity. 

This may sound contradictory to diversity.  Quite the contrary, the persona must be built around this burning desire to learn from one another.

As Senge describes, your people need to be lifelong learners.

Thus, the concept of a learning organization needs to be built into the stated company values.

The organization needs to celebrate renewal efforts and achievements.

Learning must become fundamental to the culture.

Systems Thinking

Peter Senge advocates that systems thinking is a key discipline of learning organizations.  I clearly agree.

When I received my master’s degree in management science, systems thinking was a cornerstone, but you don’t hear as much about it today.

It is all about seeing the big picture in a wholistic way looking at the various relationships and factors that bring about your outcomes.

As entities build structures on how things work, there become a lot of parts and sub processes which bogs down learning as the focus is on the trees and not the forest.

This is not to say that continuous improvement programs should be scrapped.  They are one of the “structures” that should be imbedded in a learning organization.

The major shifts and transformations occur at the wholistic system level of a company.

Learning organizations need to imbed vehicles to periodically look at the big picture or when alarms are sounded from external sensing systems.

System audits should ask from the internal side, “What ground-breaking change could we do differently that would have a magnitude improvement on our outcomes?”

From an external perspective, system audits should look at competitors but also pace setting companies who have made major transformations.

Obviously, scanning for new technologies and how they could redesign the way your company operates is another part of a systems audit.

Then there are also major environmental events like COVID 19 that should trigger a systems audit.

Layering on a new S Shaped Curve

Another Shell consultant back in the 1990s was Ichak Adizes who taught us about corporate lifecycles.  He authored a book called CORPORATE LIFEcYcLES How and Why Corporations Die and What to Do About It.

Adizes described to us the growing and aging process a company goes through and outlined some characteristics of growing companies versus aging companies.

A couple of these characteristics really struck me.

In a growing company, “Personal success stems from taking risks” whereas in an aging company “Personal success stems from avoiding risk.” (page 87)

In a growing company, “Everything is permitted, unless expressly forbidden” whereas in an aging company “Everything is forbidden, unless expressly permitted.” (page 87)

Relating to this last point, he talked about the importance of culture with the two dimensions of flexibility and control.

At a company’s prime, flexibility and controllability are balanced.  As controllability becomes more dominant, the aging process eventually leads to death.

My big takeaway was a learning culture can expand the shape and timing of a company’s S curve through maintaining flexibility.  Today, that is called agility. It needs to be part of the organization’s fabric.

Beyond that, there are times in the life cycle when systems thinking can bring about a major transformation in the business model.

In essence, the company layers on a new S curve.  The key is to jump onto the next S wave before it is too late.

When this structural competency is developed in an organization, the life cycle can be extensively extended by having multiple layers of S curves.

Adding Learners to your Company

The last “learning structure” that I want to recommend is consciously adding learners to your company.

Bringing diversity of thought, perspective, and backgrounds as previously discussed is important for your hiring process and something you have likely already included.

My suggestion is that you carefully examine potential hires’ willingness to be tolerant of other points of view along with a strong learning desire.

You can’t build a learning culture with a preponderance of people who aren’t learners.

Many new hires will come from the Millennials (those born between the early 1980s and mid-1990s) plus some of Gen Z (those born between the mid-1990s and 2010).

Millennials Like to Learn

Fortunately, the Millennials are generally curious with an eagerness to develop new skills and learn.

They are also multi-taskers.

I remember one day when I heard a lot of noise from my Millennial daughter’s bedroom.  She had told me she had a lot of homework, so I wanted to check up on the commotion.  It was an incredible sight.

She was sitting with a laptop in her lap but typing on her desktop while watching TV with music blaring away.

When I asked her what she was doing, she answered my homework.

Beyond that, Millennials tend to excel with out of the box thinking and creative problem solving. This will be an important competency skill set in developing the next S shape curve for your company.

Many have high expectations of your company and not afraid to express their views which is what you want in a learning organization.

Gen Z Diversity

Generation Z also has some positive characteristics.

They are entrepreneurial and not surprising all about technology.

This generation has grown up in a rapidly changing world, so they are receptive to change.

You will need that attitude in your learning organization.

Fortunately, diversity of all forms is natural to them and generally not a divisive issue.

Don’t Forget Baby Boomers

Lastly, you may want to consider a baby boomer (those born between 1946 and 1964) as a mentor to help you build your learning organization.

They have many positive characteristics too including resourcefulness and being mentally focused.

As this generation deals with their Millennial sons and daughter and their grandchildren of the next Generation Alpha, their views of change continue to morph.

Now that they are in a mentor position in their careers, baby boomers can bring a lot of unbiased wisdom having seen it all evolve.

Summing it Up

The most basic need of a living system is to survive.  If you have not built-in structures that will foster a learning organization in your company, take some advice from a baby boomer—do so now before it’s too late.

Your company’s survival depends on it.

Contributed by Lane Sloan, former Shell CFO and Silver Fox Advisor.

Situation Based Leadership

Leadership does not have a simple formula for every situation.

A lot of the leadership theory comes from academicians studying a formulation of their leadership model from observing the real world.  They test the model with empirical research to determine results on performance. Then, it’s the publish or perish phenomenon.

If we look at the chapter headings from a well-known college text by Northouse entitled Leadership: Theory and Practice, we find a long list of these type models as well as some more generalized topics: Trait Approach, Skills Approach, Behavioral Approach, Situational Approach, Path-Goal Theory, Leader-Member Exchange Theory, Transformational Leadership, Authentic Leadership, Servant Leadership, Adaptive Leadership, Followership, Leadership Ethics, Team Leadership, Gender and Leadership, Culture and Leadership.

Wow, how do you sort out all these concepts?  And this is just a college textbook articulating all these different perspectives.  There are lots of other relevant authors both academicians and practitioners not included in the chapters listed above such as Strength Based Leadership.

The point is there are many dimensions and factors that come into play when leading.  One facet is all about the leader.  Another dimension is the organization which includes followers, culture, and so forth.  Others are about the relationship of the leader and the follower.  Still other facets are about the broader environment. And so forth.  It is hard to mold all this into a grandiose model.

If that were not challenging enough, the overall environment is changing at a rapid pace as we discussed in my blog on leadership agility.

Ultimately, it all centers on the particular situation and how all the multiple dimensions line up. Fortunately, many situations are comparable, and the response can be repeatable.  Many others will be unique in some fashion that will require you to adjust.  Like playing a game of golf, the better you are the more natural the adjustment.

Situational Leadership

One model by Paul Hersey and Ken Blanchard has been coined “Situational Leadership.”  The model has evolved over time, but the basics are the style of the leader changes depending on the situation and readiness level of the followers.

In a situation of low readiness such as a new employee, then the style is much more directive. You have to tell them what to do. As progress is made, the mode of the leader shifts to coaching with high on direction and supportive behavior.  Further progress by the employees suggests lower direction but still highly supportive behavior from the manager.  Finally, in the fourth stage with a matured employee on performing their role, the leadership style shifts to delegating with low on direction and relatively low on support.

Of course, this model is limited in that the focus is on only the dimension of the manager and employee’s relationship.  Nevertheless, it provided a significant breakthrough that no one leadership style fits every situation.  Moreover, it makes sense and can be applied rather easily.

Adaptive Leadership first described by Heifetz in Leadership Without Easy Answers back in 1994 also gets into the relationship of the leader and the follower based on the follower’s situation.  As the name implies, this model gets into adapting to change which has become more pronounced today.

What to Do?

First, do not think you have all the answers by learning one highly touted approach to leadership.  Rather think of the dimension it is adding to your leadership portfolio of knowledge. The critical point I have been trying to make is there is no one holistic model that prescribes what you should do in every situation.

Second, if you’re in the early stages of your leadership growth, do get several books to read. Take a leadership course or seminar. But also get advice from a leadership coach/mentor. Think of learning golf, a coach goes a long way.  If you are a CEO at a small company  that is growing, you should also consider joining a CEO Roundtable.

Third, once you have some leadership experience, do an assessment of yourself.  I would suggest you look at my Leadership Personal Profile blog of February 23, 2021. It will help you identify areas for improvement.

Fourth, I advise mentees do not get yourself in a “tizzy” on what to do. In leading, be engaged.  Get whatever input you feel is important, then, behave/decide what you think is best given all the circumstances and what you know at the time. In the case where action is needed, that can range from you making the decision, to a team participation, to a delegation and so forth.  In other words, all you can do is the best you can given where you are at in your leadership journey.

Fifth, whatever the leadership situation and the action has been taken, always be open to feedback from followers particularly with significant events or direction. Simultaneously, look at the impact on the performance of the business. Think of the feedback and results not as a critique but a new learning in your portfolio whether it’s good or bad.

Sixth, as your leadership matures, be flexible to the situation and not locked into you know the answer of what to do. Situations always evolve over time, and now they are evolving rapidly. In the maturing process of living systems, we naturally structure approaches to solve problems, issues, and opportunities. Many CEOs go through a pattern of first being incredibly open and inquisitive in their early days to eventually becoming rigid in their thinking to the detriment of the organization.

Seventh, insure you maintain your character and are true to your core values.  This builds trust with your followers.  They know they can count on you to do what is best given changing circumstances.  We will talk about that more in an upcoming blog entitled Character: A Learned Behavior.

Eighth, utilize a wise coach who can act as your alter ego to help you avoid these rigidities setting into your leadership while helping you maintain your authenticity.

Ninth, be sure you are coaching your leadership team and employees to become better leaders. This will be a huge help to them but also keep you fresh.

Lastly, if you want to be a great leader, then seek first to be a wise leader. Wisdom is knowing you need to know more.  Your rigidities will set in when you quit learning. A little humbleness on what you know goes a long way in your lifelong leadership journey.

Contributed by Lane Sloan, former Shell CFO and Silver Fox Advisor.

Achieving the Take-Off Stage in Small Business

Would you like your small business to Take-off?

In 2018, 9% of small businesses made more than one million (SBA.gov).

If you are one of these 1 out of 10 small businesses and have revenues less than ten million, then you have reached a unique position that I term the Growth stage.

If you have been in business five or more years, then you ought to feel a sense of accomplishment as half the small companies do not make it that far.

In the early phase of the Growth stage, you most likely have fewer than twenty employees.  It gets down to math on how many people that you can afford.  With the average annual salary in the US of about $50,000, then twenty people would be a cost of $1 million not considering burden.  You are not likely to be paying the average salary, but you already understand the significant cost of employees.

You quickly find though that you need more people to do more things to accelerate your growth.

The larger the size of your organization the more challenges you face.  Everything needs to rise to the next level of sophistication as the complexity increases, and in particular your leadership if you really want to grow.

It is very possible that you are comfortable letting your small business naturally evolve particularly if this is a lifestyle business for you.

With growth comes change and you may prefer to have things stay pretty much the same.

I have seen many small companies in the lower end of the Growth stage with this perspective.  Sometimes they even say they want to grow significantly but that is not really a driver for them.

There are others that you can easily spot that have a real passion to build their small business into something much more significant.

This blog is geared for small business owners/CEOs that fall into this latter mindset.

Growth Stage Elements

If you want to accelerate your growth, you need to follow good planning processes to first assess where you are at today. 

My 4 Stage Growth Model outlines various elements that should give you a good picture of your current position.

You will probably find that you are ahead on some, behind on others, and several others will describe your condition. 

Take a look at the elements below and go through this simple assessment of marking them red if you are behind, yellow if it is a good description, and green if you are more progressive.

If you are mostly red, then go back to my blog of February 3rd on Breaking out of the Development Stage for Small Businesses.  

If you are a mix of colors or primarily yellow, then this blog should give you some insight into moving into the next phase termed the Take-Off stage. 

If you are all green, then a future blog on the Take-Off stage advice will be coming.

Growth Stage

  • Revenues – Owner(s) are getting excited about the organization’s success. Traction with new customers or expanding activities with current customers is generating a growing revenue base. Typical revenues run above one million and below ten million.
  • Sustainability – Organization is approaching a going concern where owner is less critical to survival and growth. Revenues are providing cash to invest in business and improve operability and compete more effectively for new business.  Loss of key customers can prove devastating.
  • Business Focus/Planning – There is a fair amount of activity on generating new ideas for products/services/customers and more sophisticated approaches to attracting customers through marketing. Still planning is heavily oriented towards current year.  Planning still may be rather ad hoc lacking strategic focus synchronized with tactical game plans.  Planning framework including mission, vision, objectives, value propositions, target markets, strategic themes, competitor analysis, goal cascading, accountability, and so forth are often lacking.  Effort does not seem to match current rewards for many with the focus still on the here and now.
  • Organization – Other key players have evolved and perform critical roles.  Often, these players interact more, and teamwork is emerging.  Organization structure is still somewhat loose with not overly formal role definition. The size of the organization varies based on the nature of the product or service provided.  Often staff exceeds ten and but generally does not exceed fifty and almost always less than one hundred.  Contractors are used to avoid adding staff in many cases.  People can perform multiples functions.
  • Processes – Processes have emerged and there is a level of documentation and sometimes training.  Processes are often changing and adapting as more effective functioning progresses and customer feedback requires modifications to be made.
  • Target Market – Local market continues to dominate customer base in most cases.  Customer loyalty has emerged and identified as key customers with a retention focus.  Expenditures for sales and marketing have expanded significantly. Often there are some dedicated people to sales beyond owner and budgets for improved websites, marketing collateral, and marketing campaigns.
  • Value Proposition – Value proposition is adapting to customer needs and customer feedback.
  • Leadership – Owner and key players are beginning to think about how to motivate and retain employees. Decision making processes are receiving some scrutiny.  Delegation has emerged where owner feels comfortable with key players carrying out more defined roles.  Level of participation in decision making varies but generally still well controlled by owner.

What is your Vision?

I find that many small businesses have difficulty in describing a picture of what they want to look like in their next stage of progression. 

That is the beauty of the 4 Stage Growth Model in that it provides an overview picture. 

There are many things you have to do to get from your Growth stage to the Take-off stage. Knowing what you want to look like invigorates finding the pathways to achieve this next level of progression.

Take-off Stage

Below is the description of the Take-off stage using the same criteria above in the Growth stage.

  1. Revenues: Customers pulling business into extended and new offerings
  2. Sustainability: Going concern sellable if owner disengaged
  3. Business Focus/Planning: Extensive multi-year planning
  4. Organization: Matured with more structured roles and responsibilities exhibiting extensive teamwork
  5. Processes: Tuned as a competitive advantage
  6. Target Market: Tied to broader strategy, potentially new geographies/offerings.
  7. Value Proposition: Rigorously adapts to beat competition or take advantage of new opportunities.
  8. Leadership: Seen as key, owner seeks leadership development for self and management team.

Advise in reaching the Take-off Stage

So how do you move into the Take-off Stage?  Let me give you some of my mentoring advice on each of the key elements.

  • Revenues – If you are really taking off, you ought to see a doubling or more of your revenues in a two-to-three-year time frame.  That means you will have to make substantial progress on your marketing plan and sales effort.  Ensure your target market is clear as are your target customers. Then focus on brand advertising with communication channels that fit your customers’ appetite. It will take more than a website. Depending on your product or service, you should consider strategic selling with profiles of your customers and tactical game plans to grow revenues. For a broader customer base, sales funneling, and a fully functioning CRM system will be key.
  • Sustainability – Cash flow has become sufficient to operate in your current mode without sufficient concern.    However, you will likely need to take some more risk on investing to really grow the business. This is a good time to strengthen your bank credit lines/relationships and depending on your situation consider investors for major investments. It may be worthwhile to investigate acquiring companies that enhance your offering or customer breadth. While acquisitions/mergers can be challenging, they can provide leverage through economies of scale.
  • Business Focus/Planning – This is where you will really have to ramp up your efforts. Redefine your vision, mission, and long-term objectives with a broader mindset.  If you do not have clear company values, do so now as they will have a real impact on the company culture as you grow.  I also strongly encourage you to develop mid-term plans of critical success factors that move you on the path of reaching your vision and longer-term objectives. Look for help.  If you are here in Houston, I would really recommend you join a Silver Fox Advisor CEO Roundtable.  This is a great vehicle for seeing how other companies are trying to grow their businesses.  Many of the members of these CEO Roundtables are in the Growth Stage.  As your company breaks through five million in revenue and heads towards ten million, you may also want to consider an Advisory Board.  The Silver Fox Advisors can help you on that, particularly if you do a deep dive on your business challenges through their Fox Den business review. Like the CEO Roundtables, the Fox Den is pro bono.
  • Organization – Your company probably lacks definition on who does what, who is accountable, and how people work together to achieve your company’s objectives. You should really take a read of TRACTION: Get a Grip on Your Business by Gino Wickman. He does a good job in describing an Entrepreneurial Operating System (EOS) that brings the essentials of running your small company to a higher level of sophistication.  It uses the concepts I taught in my Corporate Strategy course for big businesses and translates them into a practical approach for small businesses.  It is highly beneficial for companies in the Growth Stage in particular.  My clients and CEO Roundtable members find it extremely beneficial.
  • Processes – If you are in the Growth Stage, then you have conquered to some degree putting processes in place that enable the business to operate efficient and effectively.  Do not underestimate the competitive power of having even more highly effective processes that describe the flow of how work gets done to produce your product or service better than your competition.  Processes need to be tied to your customer value proposition.  It is often an advantage to start with a clean whiteboard and rethink how a process can fulfill your value proposition better than your competitor. If you are trying to be the low-cost producer, then think out of the box on how to achieve that.  You can also look at your current processes and determine ways to simplify or eliminate steps.
  • Target Market – You can’t be everything to everyone.  In the early stages of your business, if a customer has a need, then you generally try to fulfill it as revenue is king.  Somewhat ironically, as you grow, the specificity of your customer becomes more targeted.  With small companies, this is also true of the geographic market.  In moving to Take-off, you need to rethink your target market and geography.  In many cases, expanding your target market translates into widening your geographic reach.  There are many repercussions in making this kind of move, particularly the need for investment dollars and organizational building/restructuring.
  • Value Proposition – In the Growth Stage, you have articulated your value proposition most likely on your website and marketing collateral.  The value proposition is framed to attract your target customer.  To move to the Take-off Stage, you need to think more strategically in terms of differentiating your company from the competition. You will need to do much more competitive analysis on their strengths and weaknesses in providing their described value proposition. Then, think strategically. Treacy and Wiersema in their book The Discipline of Market Leaders outlined three broad strategic approaches to capturing customers. While written in 1997, the thrust of these strategic approaches is still very applicable to most small businesses.  The Operational Excellence strategy is built on delivering the best total cost that is driven by operational competence.  The Product Leadership strategy is excelling in product differentiation to deliver the best product.  Finally, the Customer Intimacy strategy provides the best total solution to the customer driven by customer responsiveness and focus. My advice to clients is lead with one of these three strategies but be strong enough in the other two to ensure you win your targeted customer. 
  • Leadership – You have recognized the importance of leadership as your company has grown in the number of employees and organizational structure. The companies I know in the Take-off stage, their CEOs have a voracious appetite to improve their leadership capability and that of their management team.  I have written a whole series of blogs on the Silver Fox Advisors website to help you improve your leadership capability.  One in particular entitled Your Leadership Personal Profile has been very insightful for clients.  The methodology can also be used by the CEO to coach other members of their leadership team.  It provides significant insight for both the CEO and the coached.

Let me conclude by adding to the suggestion for you to reach out for help. 

Think of a personal advisor to mentor and coach you in transitioning your business.

The Silver Fox Advisors have essentially two types of Advisors. 

Those who have had significant careers in larger organizations and understand the complexities and need for best practices for a company to be successful. They have the insight to bring this perspective to small businesses.

The second type are those who have run small businesses and come with a deep understanding of their inner workings. They come with significant knowledge and insight to share.

Take a look at the Silver Fox Advisor website under Engage an Advisor and see if one of our Advisors fits your needs to help you grow into the Take-off Stage.

Also, take a look at the CEO Education Series videos on the SilverFox.org website that gives advice on many of these elements.

Contributed by Lane Sloan, former Shell CFO and Silver Fox Advisor.

Rapid Chaotic Change Requires Leadership Agility

Understanding Change

It is undeniable that change is accelerating and becoming more chaotic.  Leaders need to understand this change.  What is driving the change?  What are the implications on your leadership?

Technology is driving the change. I have put together a model to help you understand this change and high-level implications on your leadership. After exploring the model, we will highlight key thoughts on leadership agility to deal with this rapid and chaotic change in today’s business world.

Industrial Revolution

We are all familiar with the industrial revolution starting back in the mid-1700s.  New technology in the form of machines changed the manufacturing process of goods.  Machines substituted for human labor.

It brought about new forms of business enterprise because this change was mass production.  Organizations had to evolve to deal with the larger volume of transactions.

It was a new world.

Management by Exception

Back in the 1960s when I was taking organizational behavior courses the buzz word was “management by exception.”  You probably heard of “If it ain’t broke, don’t fix it.”

The assembly line was key to production.  You had to keep it going.

Change was not rampant.

Therefore, the focus was on control.

To lead these massive organizations with their hierarchies, the management style was traditionally autocratic.

Information Revolution

The technology of automation from the Industrial Revolution paved the wave for a transformation change in information processes with the advent of computers.  Software programs did the work of repetitive clerical type roles and more.

I joined Shell Oil in 1970 as one of those programmers to create this new software.

The new buzz word was “Change is the Constant.”

The rigidity of large bureaucratic organizations was being significantly impacted by the delayering and restructuring brought on by this information processing revolution.

More decisions had to be made to cope with the constant change.

Knowledge became more important with these constantly changing dynamics.

It made sense to have others participate in the decision-making process. 

Thus, the management style shifted more toward Participative.

Companies needed to keep up and not get lost in the change from their competitors.

The focus turned to adaption.

Second Wave of the Information Revolution

By 1965, an M.I.T. scientist developed a way of sending information from one computer to another that he called “packet switching.”

This has continued to evolve into today’s multi-faceted internet world.

It is not just social media.

You can type anything into your browser and get a voluminous amount of information in seconds.

This has been a big driver of the acceleration of change which creates instability.

Molecular Revolution

The hybrid DNA-RNA was created around 1960 as part of the early beginnings of the Biotechnology Revolution.

At the turn of the century, the world had advanced to the sequencing of the human genome.

On a similar front, the theory of manipulating atoms was around 1960.

Some twenty years later, the scanning tunneling microscope was developed that could see individual atoms.

Nanotechnology is real.

Together this has all led to the manipulation of cells and atoms.

Chaotic Change

Today, this Molecular Revolution has come to the forefront.

It is transforming the very fundamentals of living systems and materials.

In short, the molecular revolution is another key driver underpinning the chaos.

Fundamental Reprogramming

The ability to fundamentally reprogram things is opening people’s minds not constrained by traditional boundaries.

Management styles are shifting to visionaries.

Instead of being whipsawed by accelerating and chaotic change, visionaries are creating the future.

Ramifications on your Leadership Style

There are practical ramifications of today’s changing dynamics for every leader.

Those in fast cycle industries have been in this chaos for some time.

Slow cycle industries have sped up.

Life spans for companies have shortened.

Technology and imaginative minds are driving more technology and transformations that lead to even faster change and more chaos.

Leaders must be more agile and flexible to cope and prosper, but how do you do that?

What competencies and skills are needed to be an agile leader?

There has been some very thoughtful research on this question.  In this blog, I can only give you highlights and direct you to some of the better resources (in my opinion).

Leadership Agility

In 2007, Bill Joiner & Stephen Josephs wrote the book LEADERSHIP AGILITY Five Levels of Mastery For Anticipating and Initiating Change.

It is a rather sophisticated approach based on their notion of a Leadership Agility Compass outlining four competencies: Context Setting Agility, Stakeholder Agility, Creative Agility, and Self Leadership Agility. 

Using the compass, they then take you through their five levels of agility development: Expert, Achiever, Catalyst, Co-creator, and Synergist.

It has a lot of content. If you are really trying to enhance your leadership agility, it is worth a read.

Learning Agility

Korn Ferry has also done a lot of research on leadership agility outlined in their paper on The Organizational X Factor: Learning Agility.

They describe learning agility as made up of five factors: Self Awareness, Mental Agility, People Agility, Change Agility, and Results Agility. 

You can see some similar ideas to Joiner and Josephs’ Leadership Compass.

I like their addition of Results Agility described as delivering results in first time situations.

The authors, Mary Knight and Natalie Wong, contend that Learning Agility is a top predictor of high potential people. Companies with highly agile executives have 25% higher profit margins than their peers.

Core, Edge and Agility

Agility competencies are important.

It is also important to have a perspective in thinking about the context of this change in your day-to-day world. 

What is central to how the world should work for you to what are the dramatic implications of changing technologies?

In this respect, Lee, Hecht, and Harrison, a global leader in talent development, wrote an interesting paper on Core, Edge, and Agility.

My Silver Fox Advisor colleague, Doug Thorpe, has condensed their ideas and his own in an article on his website in 2018 entitled Leaders: There’s a New Way to Understand Change | Business Advisor, Mentor and Executive Coach | Doug Thorpe

It is certainly worth your read with the idea that agility helps manage the forces of what’s core and what is on the edge.

Set Direction Not Destination

Agility has certainly become a popular topic for organizational consultants in this 21st century.

 One concept I like from McKinsey’s March 2018 article of Leading with inner agility is “set direction not destination.”

This brings us back to my model introduced at the beginning of this blog on understanding change.

You not only have to have agility competencies, and a framework of thinking about agility as we have just discussed.

You also need to be the visionary highlighted in the model.

Ultimately, the management style of significance in this world of accelerating and chaotic change is a visionary leader.

Set directions with the agility to adjust destinations.

To paraphrase Jack Welch, control your own destiny or someone else will.

Contributed by Lane Sloan, former Shell CFO and Silver Fox Advisor.

UPCOMING EVENTS
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