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10 Insights from the 2019 Chief Learning Officer (CLO) Exchange

Posted on January 19, 2020 at 2:55 PM

Last month, I attended the CLO Exchange in San Diego, a conference of the top learning and development (L&D) leaders from about 50 companies in the United States. Together, these companies employ about 2.3 million employees in the US and 3.8 million globally. It was an intense three days of information-sharing, brainstorming, and networking. While the companies represented were not a random, perfectly-representative sample of CLOs, they still offer a useful snapshot of the demographics and interests of the senior-most learning executives in the USA. Here are the biggest 10 insights I gleaned from the meeting.


1 - "Leadership / Executive Development" is the Clear #1 Focus - When asked a free-form question about their top priorities for the coming year, 40 percent of the group mentioned leadership or executive development as one of their top priorities. This was far and away the top area mentioned. The need was described several different ways, such as: "elevate leadership capabilities at all levels," "roll out tiered leadership learning journeys, customized to the experience/leadership maturity level of the individual," "bridge leadership skill gaps," and "build the leadership bench."


Recommendation -> If you don't have leadership development as one of your priorities, reconsider your priorities. Leadership is like air and water - you don't appreciate how important it is until it isn't there. Leadership takes continual development to keep pace in the face of organization growth and executive attrition. If you haven't added or refreshed your leadership development in a while, start looking for good training and other programs now.


2 - Developing a "Learning & Development Culture" is the #2 Focus - The second most prevalent priority mentioned was to develop a learning and development culture in their organization. This builds on the momentum that has re-labeled the field from "training" to "learning and development." L&D leaders want to weave continuous learning and people development into the fabric of their organizations' cultures as an everyday value, not just as a task that has to be done.


Recommendation -> Recruit your senior-most executives to talk about the importance of continual learning as the key to organizational success. Arm them with some data and stories of how successful leaders in your organization grew from L&D efforts. Ask them to think about how training and development efforts personally helped them on their own career and leadership journeys.


3 - E-Learning is Everywhere - The third most mentioned priority was the need to offer learning through new digital channels to meet clients needs in more flexible ways. Sometimes this means having a blended approach to training, where an e-learning channel complements other traditional channels, like instructor-led training. Sometimes it means offering e-learning as an alternative or replacement.


Recommendation -> Review your existing programs to see where e-learning could be a valuable addition, replacement, or complement to your existing inventory. Explore growing e-learning channels, such as LinkedIN Learning, as an additional channel to spur learning and development. Often, LinkedIN Learning is already available to your users but they are not aware it is there and they can access it.


4 - On-Boarding is Core - Fifteen percent of attendees said working on their on-boarding/orientation process was a priority. On-boarding and new employee orientation are often a core responsibility of L&D teams. Since it touches every employee and creates a first impression, it is kind of like the base of the hierarchy of needs. You have to make sure your L&D team consistently excels in its role in on-boarding and new employee orientation.


Recommendation -> Before you ask to grow your L&D footprint, make sure you are crushing the basics. Delivering great on-boarding/orientation can be the table stakes your top executives will want to see before you ask for their support to expand and innovate your L&D efforts.


5 - Asked for L&D's ROI? You're Not Alone - Fifteen percent of these L&D leaders said finding a way to measure the return on investment (ROI) in training was a priority for them in the coming year. There doesn't seem to be a one-sized-fits-all silver bullet for measuring the value and outcomes from training.


Recommendation -> This is a tough one, as it's hard to argue against knowing your efforts' ROI. As data continues to get more accessible to measure the effectiveness of programs like online marketing, expect the demands to quantify the ROI of L&D to increase. Think through a high-level approach and philosophy to responding to the question to avoid getting dragged down a data wormhole. With leadership development, for example, start by painting a picture of what happens if you make no investment there. Your best strategy may be to focus on delivering great learning and development results and stand by your overall record as proof of your worth.


6 - LMS/LXPs are Still Rolling - Fifteen percent of the L&D leaders mentioned something with their Learning Management/Experience System as being a priority for the year. For some, it was getting the most out of their existing system. For others, it was rolling out a new system. The vast majority of L&D leaders didn't mention their LMS/LXS as a priority though.


Recommendation -> Before making a big investment in upgrading or getting a new LMS/LXS, make sure you are getting the full use of what you already have. Because they can be complex, included features in LMS systems can often be untapped.


7 - "Microlearning" is the new "Gamification" - The word "gamification" was only mentioned once with the L&D leaders, while "microlearning" came up with about ten percent of them. The biggest interest was in delivering training in small bites to workers on the front line (e.g., retail, food service) when they had time, and the need, to consume it.


Recommendation -> Read up on "microlearning." It will probably be the next learning buzzword that makes it into the management mainstream. Get smart about it before your boss does.


8 - L&D Leader Job Titles Center on "Director" - "Director" was the most prevalent job title at 37 percent, with "Senior Director" at 12 percent, "Assistant/Associate Vice President" at 12 percent, "Vice President / Senior Vice President" at 8 percent, and "Head of" at 10 percent. Four percent were "Assistant / Associate Director" and another 10 percent were "Manager" or "Lead." Only 6 percent had the title "Chief Learning Officer."


Recommendation -> If the leader of your L&D efforts has a title below "Director," consider upgrading it to align with their peers in other organizations and demonstrate that you value the role.


9 - "Learning" and "Development" Have Replaced "Training" - Only 15 percent of attendees had the word "training" in their title, while the word "learning" was in 53 percent and "development" was in 47 percent.


Recommendation -> If you still have the word "training" in your team and job titles, consider updating it to "learning" or "development." "Training" is an input. "Learning" and "Development" are the desired outcomes of training.


10 - Women are Well-Represented in L&D Leadership - Two-thirds of the representatives were women, and one-third were men. In other words, women outnumbered men two to one in this group of leaders.


Recommendation -> Look to your L&D team as a center of excellence in developing women leaders. Consider L&D leaders as you look to fill executive roles outside L&D. Look to L&D for mentors to help grow women leaders in other areas of your organization.


There were many other issues that were also shared as top priorities by at least a few of these L&D leaders, such as employee engagement, artificial intelligence and virtual reality, diversity and inclusion, and succession planning. Perhaps the most important lesson I learned at this conference is how strong the L&D community is. Because L&D doesn't typically center around trade secrets, L&D leaders are open to talking and helping their peers in different organizations. Conferences like the CLO Exchange can be a great way to connect with your L&D peers to share best practices and realize you are not alone in the challenges you are facing.

Photo courtesy of Rene Asmussen on



7 Core Skills for Employee Development Plans in 2020

Posted on December 5, 2019 at 5:35 PM

You get the mass email from HR and feel a familiar dread - "Has it already been a year? Performance management time again?" At a minimum, you probably have to write your self-appraisal and goals for the next year. If you have people reporting to you, you have to write appraisals and goals for them as well. That means more work for you, without any more time to do it. Ouch!

The good news is that there can be a payoff to that investment, particularly in the goal setting for the next year. In addition to performance goals, you should also add goals to improve key skills required for the job and career track. As automation continues to change the workplace, training will be an essential way for people to stay competitive in the workforce. Here are seven core skills trainings that should be included in employee development plans in 2020.

1 - Problem-Solving - Work that is predictable and programable can be done by a machine. Work that includes problems that cannot be solved by machines requires humans. Problem-solving is a core skill that people need to master. Problem-solving means diagnosing a problem and identifying and assessing potential solutions. A great method to solve problems comes from an old source - the centuries-old hypothesis testing process many of us learned in high school science class. Elite consulting firms train their new hires to use this scientific method to solve business problems. 

2 - Communication - Figuring out solutions to problems is critical, but if you cannot communicate those solutions to others, you will not be effective. Elite consulting firms train their professionals in a standard structure to communicate complex ideas in an effective and efficient way. This method can help you communicate your ideas clearly and concisely, which will improve your chances of success. 

3 - Teamwork - People get trained before working with complex technology. Humans are more complex than any technology, and working effectively in teams requires training too. It takes work to set team goals and coordinate individual roles and responsibilities around those team goals. Done poorly, teamwork can drive stress, poor results, and inefficiency. Done well, teamwork can be a fantastic force multiplier. 

4 - Decision-Making - Identifying problems and possible solutions are great, but if you cannot decide between the options, you will be stuck. Decision-making is a skill that can be improved by learning and applying a proven process. Some decisions need a lot of input and time, while others just need to get made quickly. 

5 - Conflict Resolution - People at work compete for finite resources like time and money. People have different opinions on which strategies are the best. Conflict in the workplace is a natural outcome of activity. In fact, if you don't see conflict at your work you may need to worry that there is not enough activity or engagement. It takes skills to ensure conflict is a healthy dynamic instead of a destructive force at work. 

6 - Leadership - If you master the above five skills, chances are you will succeed as an individual performer and be considered for advancement to leadership roles. If you are already leading teams, you always have an opportunity to take on larger leadership roles. Leading people at work is a skill that can be learned and improved. 

7 - Strategic Planning - In addition to learning to lead people at work, you will need to sharpen your strategic planning skills to be an effective leader. You don't have to be a visionary to be a strategic planner. A good strategic plan can also come from a good strategic planning process that generates ideas from your team and prioritized them against your goals. Strategic planning is as much about deciding what not to do as it is about deciding what to do. 

You spend a lot of time on your annual performance management process. Make sure you get a payoff for that work. Use your self-appraisal and development plans to ask your manager for trainings like these that will help you succeed. If you lead people at work, recommend these trainings as needed for your people as you assess their opportunities for improvement. Performance management often focuses on the past. These trainings can show a path forward to future success.

5 Ways to Measure the Value of Corporate Training

Posted on November 3, 2019 at 2:15 PM

I was at a summit of Chief Learning Officers (CLOs) and one of the most common challenges they mentioned was the need to demonstrate a return on investment from training. Unlike investments in "hard" assets like facilities and equipment, investments in "soft" skills through training can be hard to calculate. At budget request time, CLOs can find themselves at a disadvantage to their colleagues who can point to more easily measured improvements in their operations. Here are five ways that CLOs can communicate the value of training in a concrete way.

1 - A/B Testing - One of the CLOs described how he rolled out training to call centers in a controlled testing way. The company decided to invest in training their call center employees in new soft skills like showing empathy and de-escalating emotional conversations. In the roll out, the CLO held off training one call center to be the control in the experiment they could use to isolate the effects of the training. After the training was delivered, they tracked changes in key metrics like customer satisfaction, retention rates, and employee turnover at each of the call centers. Because they kept one call center out as the control in the experiment, they were able to claim the improvement in metrics was due to the training.

Implementation Tip - Ensure the internal clients agree with your testing plan, especially that the site picked as the "control" in the experiment is comparable to the other sites. Plan to roll out the training at the control site at a set time - e.g., 6-12 months later.

2 - Tie to Performance Appraisal Metrics - Since employee appraisals often have common competencies that are scored across all employees, they can provide a way to quantify a "before versus after" impact of training. Identify the competencies that a training is aimed at improving. Gather and compare the before versus after scores on those competencies for training attendees. Compare the change in scores to a similar set of employees that have not had the training (i.e., your "control" in the experiment.) If you have had enough employees go through the training, the comparison can be a solid way to show results on competencies that matter.

Implementation Tip - If you have a hard time mapping a training to competencies your employees are measured against, reconsider the training in question to find one more directly applicable.

3 - Compare it to the Compensation of Students - Identify the cost of the training per person trained and the average annual compensation per person trained. Express the cost of the training as a percentage of their compensation. For example, if a training costs $1,000 per student and the average annual compensation of students is $50,000, that means the training represents two percent of their annual cost. That two percent becomes the one-year "break-even" point for the training investment. That means that if it sounds reasonable that the training will make the students at least two percent better at their job on average, the training is a positive investment.

Implementation Tip - The investment in training is a one-time cost but the benefits should last more than just one year. Comparing the one-time cost to the combined compensation over multiple years can make the break even point be much lower.

4 - Ask Students to Appraise Value - After the training is completed, ask the students to assess the value they received. Beyond the usual survey questions, ask them how much they would pay to get that training. Give them a few relevant costs as reference points, like the average cost of a college course or other corporate trainings they are familiar with. Those will give them comparison points to set a value on the training. While not scientific, they may provide a useful customer insight with dollar signs attached.

Implementation Tip - Choose your reference points wisely. Find one that everyone goes through and can relate to, such as new employee orientation or mandatory trainings.

5 - Get Key Student Testimonials - In the post-training surveys, ask students if they would recommend the training to others. Ask them to write a sentence or two that you can use as a recommendation for others to take the course. Just like customer testimonials are important on many consumer purchases, use those testimonials to demonstrate the value of your training courses.

Implementation Tip - Keep a running list of all the employees you have trained and identify the ones over time who rise up through the organization. Highlight those testimonials when discussing the value of your trainings to show a senior level of support.

Fighting for training dollars at budget time can be stressful for everyone, especially Chief Learning Officers. It can seem impossible to point to a concrete return on investment calculation for a new training in soft skills. The best way to show the expected return on investment from a new training can often be to point to the historical results from other trainings like it.

Note: Photos are from and 

8 Steps to Better Quarterly Performance Review Meetings

Posted on October 1, 2019 at 3:55 PM

You see the upcoming meeting on your calendar and feel a familiar dread. "Has it already been three months?" Of all your meetings, this is the one that takes (wastes?) the most time. How many people attend these meetings? How many people-hours does it take to put the slides together each time?

When done well, Quarterly Business Reviews (QBRs) or Quarterly Performance Reviews (QPRs) can be an essential way for leaders at different levels of an organization to stay in synch and demonstrate good governance. When done poorly, they can be a soul-sapping waste of time. If you are involved in QBRs, here are 8 steps to make sure your organization's QBR's are effective.

1 - Identify Your Audience's Goals - Who is the main audience for the meeting - e.g., the Chief Executive Officer (CEO)? What do they most need, and want, to learn from this meeting? They probably sit through several of these each quarter and don't want a primer on your business again. They definitely don't need to hear how busy you are. Perhaps they just want to see the results in your area - especially discussing where results are not as expected. Perhaps they want advance warning of risks and bad news so they can try to manage them. Perhaps they want to hear good news so they can share it. Perhaps they want to hear what is top of mind with your customers or employees. Anticipate the handful of things your audience is probably going to focus on and plan your meeting around those. Reviewing notes from previous QBRs can be a good start to identify themes that recur.

2 - Identify Your Goals - As an organizational unit presenting a QBR, it can be one of the few times you get the CEO's attention focused on your team. Make sure you meet their needs listed above, but don't forget to incorporate your goals for the meeting too. Perhaps you need to tee up a decision or a resource request you need from them. Perhaps you want to give your team members exposure and recognition. Maybe you want to plant seeds with the CEO to test the waters for your future plans. Whatever your goals are, plan the meeting so you make sure you get to them. The last slide should be titled "Next Steps" and include those to make sure everyone is talking about the same outcomes from the meeting.


3 - Start with a Summary - Start your meeting with an executive summary that covers the goals you and your audience have. If done well, it may be the only slide that you get to and lead to the outcomes you, and your audience, want. If you worry about your meeting going off on unexpected tangents, having a well crafted executive summary can help you get back to the main points of the presentation. If you are technically savvy, inserting hyperlinks in the on-screen presentation to navigate from and back to your executive summary can be a great way to keep the meeting on point.


4 - Standardize the Slides - If you treat every QBR as a new presentation, that will burn a lot of resources to produce the slides. Create a dashboard for your key metrics that you will show each time and just update the data. Where you don't have numbers, think about creating a stoplight chart of red, yellow, and green circles to show where things are tracking against expectations. Start each new QBR with the last version and just edit it with updates. Not only will that save you time, it will also train your audience on what to expect to see in these meetings. It will also focus your new slide creation to be just on the new goals you have for this meeting.


5 - Confirm the Attendees - One good thing about QBRs is that they can be scheduled far in advance so planned absences can be avoided. As you are scheduling it, ensure that all the right people from your side are committed to be there that day in-person. Principals only - don't let people send their deputies to represent them. If it is important enough for the CEO to be there, it is important enough for the team heads to be there in-person too. This is important to ensure accountability for the information being presented and to be able to commit to the next steps coming out of the meeting.


6 - Anticipate the Questions - You may not want to invest the time to do a trial run of your meeting, but it is worthwhile to anticipate the question that may arise. As you circulate the slides with your team in the preparation stage, encourage people to share the questions that come to their mind from the content. That will identify holes you need to fill and inconsistencies you need to fix. It can also make sure you figure out how to steer the conversation back to the goals that you and your audience have.


7 - Track the Follow-Up - Assign someone in the meeting with the duty of capturing the next steps that come out of the discussion - especially the requests coming from the CEO. Capture those on paper, a word processor, or a flip chart and share those with the group at the end of the meeting. That way everyone can agree on exactly what the next steps are and a deadline and accountable person for each. Once the meeting is over, send out those next steps as an email to all the attendees at the meeting. Assign someone to check in on the status of the next steps. Complete the circle by starting the next QBR with a reminder of the next steps from the last one and the results against each since then.


8 - Share the Story - Make your QBR a platform and reminder to regularly communicate about performance down through the rest of your organization. People want to hear how they are doing and how their work fits into the larger goals of the organization. You have just invested a lot of time to create your QBR, so use it to keep your rank and file connected too. You may want to simplify and edit the content before you share it more broadly. Introduce the content as a letter from the team leader and include appropriate comments from the CEO about the work of the team, especially the kudos.


The next time you are in a QBR, do this math equation in your head: (number of people in the meeting) x (average annual salary / 2,000) = the hourly salary cost of your QBR meeting. Like an iceberg, that will just be the cost you can see above the surface, so multiply that times maybe 5-10 to capture the hours spent preparing for the meeting. You may be surprised at the cost. These meetings are big investments, so taking the time to ensure they are effective can be a great investment too.

Private Equity Demystified - 10 Ways it is Like Investing in a House

Posted on September 1, 2019 at 4:55 PM

Private equity firms seem to have received increased attention over the last several years. Globally, private equity firms made about 3,000 deals worth $582 billion in 2018 ... but are still sitting on a record high of $2 trillion of capital waiting to be invested, according to Bain & Company's Global Private Equity Report 2019. While the names of some of the largest private equity companies are becoming more familiar to the public - e.g., Bain, KKR, Carlyle, Blackstone - an understanding of what these firms actually do can still seem elusive. A helpful analogy comes from the biggest financial purchase that most people make in their lives - their home. Here are ten concepts that you learn as a homebuyer that can help you understand private equity.


1 - A House Sale is kinda/sorta like A Private Equity Deal - Both are big and complex transactions. Selling a home is a major financial and lifestyle decision for most people. The equity in a house is often a family's biggest financial asset. Beyond finances, a homeowner has invested a lot of their life turning a house into a home. They also have to figure out a new place for them, and maybe their family, to live after they sell. Private business owners who are selling their company to a private equity firm can feel the same way too. Their business may be their biggest financial asset. They may have invested a lot of their careers building the business and have an emotional attachment to it. They might also have to figure out what they - and family members in their company - will do for a job after they sell their business.


2 - Real Estate Investors are kinda/sorta like Private Equity Firms - House-buyers tend to target their searches to certain types of homes in certain neighborhoods instead of looking at every house for sale. Savvy house-buyers (or their real estate agents) may even network to get leads on houses ripe for sale that are not yet on the market - e.g., empty nesters looking to downsize. Private equity firms also know what type of companies they want to buy. They may focus on a specific industry or geography where they have expertise. For example, there are twenty private equity firms today that are focusing on buying ophthalmologist (eye doctor) medical practices in the USA, according to Ophthalmology Times. Savvy private equity firms may also use their networks to look for companies ripe for sale that are not yet on the market - e.g., business owners seeking to retire and cash out.


3 - Real Estate Agents are kinda/sorta like Business Brokers and Bankers - Because home sales are such big transactions, many people pay real estate agents to help them sell their house. Private companies looking to sell sometimes use business brokers or their bankers to help them find a buyer and negotiate a deal.


4 - Rent is kinda/sorta like EBITDA - One way to determine the value of your home is to view it not as a home, but as an asset that could generate a stream of income each year in the form of rent you could get if you didn't live there. A private company's value can be assessed by the stream of income it produces each year too. Private equity buyers typically focus on that stream of income and define it as Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA). EBITDA measures a company's underlying profitability once you strip out its tax, accounting, and capitalization situation.


5 - Using Price per Square Foot is kinda/sorta like Using EBITDA Multiples - A popular way to estimate the value of your house is to look at the price per square foot (or meter) that comparable houses in your area have recently sold for. Once you find a price per square foot, you can multiply that times your house's square footage to get an estimated value. Private equity firms do a similar assessment to figure out the value of companies. Once they get an estimate of what the EBITDA income stream from a business looks like, they know what a range of multiples of EBITDA buyers often pay for similar (comparable) companies. EBITDA multiples are often in the 2-5x range, depending on many factors. So a company with an annual EBITDA of $10 million could theoretically be valued between between $20-50 million.


6 - Real Estate Appraisers are kinda/sorta like Business Valuation Firms - Before issuing a mortgage, a bank will often require the homebuyer to get an independent assessment of the value of the house being purchased. There are experts called real estate appraisers who specialize in doing these calculations. Private equity firms typically do the valuation estimates themselves. Business owners looking to sell sometimes hire specialists in business valuations to help them get an independent understanding of their company's market value.


7 - House Inspection is kinda/sorta like Due Diligence - After a house sale and price are agreed to, the buyer will often make their offer contingent on a home inspection. The seller will often hire an expert in home inspection to do a thorough search through a house to list all the flaws. Before the sale closes, the house buyer may require the home seller to fix those flaws or lower the price to compensate the buyer for the problems. When private equity firms make an offer to buy a company, they also make their offer contingent on an inspection process they call due diligence. Due diligence can inspect assets, financial records, and all other aspects of a business. Any flaws, holes, or skeletons in the closet that come out can make them lower their offer or back out of the deal altogether.


8 - Mortgages are kinda/sorta like Leverage - When people buy their first house, they may put up 20 percent of their own money as a down-payment and borrow the remaining 80 percent in the form of a mortgage with a bank. They might find debt to be scary, but they borrow because they don't want to wait for years or decades to have the money saved up. They want to live in a house now while they need it and bet they can pay back the debt along the way and/or when they sell. Taking on mortgage debt may also enable them to take advantage of tax breaks that can come with paying interest on a mortgage. A private equity firm often does a similar thing when it buys a company. It may only pay 20 percent of the purchase price from its own funds and then borrow the rest from a bank. They do that so they can buy 5-times (1 / 20%) as many similarly priced companies with the money they have available to invest - i.e., leveraging their money. Borrowing may also allow them to take advantage of a tax break if interest can be deducted as a business expense.


9 - Rehabbers / Flippers are kinda/sorta like Private Equity Buyers - When house rehabbers (or flippers) are looking to buy a house, they are looking for a house they can buy at a low price that has potential to be worth much more - like a house in need of repair in a nice neighborhood, or a small house on a big lot. They take out a mortgage to cover most of the purchase cost. They invest their own time and expertise to quickly improve the things in the house that will generate the most value - e.g., expanding its livable space, updating key areas like bathrooms and kitchens. Then they sell it. If they are good, the resale price gives them a tidy profit after all their costs, including borrowing costs and the costs of their time and effort, are covered. Everyone wins, because a house that was not at its full potential just got improved and made more valuable. Private equity buyers do a similar thing with companies. They look for companies that have potential to generate more profits and that they can get for a good deal. They borrow most of the money from a bank to buy the company because they want to use their own money to buy as many companies as they can. They use their management expertise to improve the financial performance. Sometimes they even combine small companies they have acquired into a bigger one that is worth more than the sum of its parts. Once improved, they put the company back on the market within a few years and hopefully sell it for a profit.


10 - Live-in Rehabbers are kinda/sorta like Management Buy Outs - House rehabbers often do not want to live in the house they are rehabbing. It is messy and noisy and uncomfortable with all the work being done and all the newcomers wandering through the house. Some private equity deals are like being a live-in rehabber. This is when the owner of the acquired company (or maybe their senior leaders) decides to stay and be part of the rehab of their company. They have to manage all the improvement work and take responsibility for it getting done. It can be stressful to rapidly make big changes in the company, but they will have financial incentives to get all the work done in time. But if they do a good job, they will share part of the profits from a sale at a better price in a few years.


Every industry has bad actors. Some house rehabbers probably want to cut holes in the walls, strip out all the copper pipes, wallpaper it over, and put the house back on the market right away at a higher price, while pocketing the money from selling the copper pipes. Maybe they could get away with that for a while but people would probably get wise to them eventually. Banks would stop lending to them and real estate agents would quit bringing prospective home buyers to their properties. The same is true with private equity. There are probably horror stories of bad actor private equity companies that have come in and pillaged assets of a company they acquired. Perhaps they made a mistake, and purchased a company without a future and are salvaging what they can. My guess is people would eventually get wise to them as well and quit selling to them, lending to them, investing in them, or buying from them.


My first home purchase was from a real estate rehabber/flipper. He bought a house that I would not have lived in and fixed it up enough so I wanted to live in it. In other words, he created some new value that I was happy to pay for. I count that as a win-win.


My career as a consultant and coach has also led me to work with and know people on both sides of private equity deals - buyers and sellers. Like any endeavor that seeks to create a lot of financial value, the work can be hard and stressful. But I have found the people in the private equity space to be great to know. I count that as a win-win too.

7 Things to Consider when Private Equity Is Interested in Your Business

Posted on August 16, 2019 at 1:55 PM

If you are a successful business owner, you may already have received a call from a private equity group interested in acquiring your business. Globally, private equity firms invested $582 billion in deals in 2018 ... but are still sitting on a record high of $2 trillion of capital waiting to be invested, according to Bain & Company's Global Private Equity Report 2019. Competition among private equity groups to find acquisitions can be intense. For example, the number of firms looking to buy ophthalmologist (eye doctor) medical practices in the USA has grown from just one in 2012 to twenty in 2018, according to Ophthalmology Times.

Getting a call from a private equity group can be exciting - a sign that you have built a business that is large enough to be on their radar. It can also be intimidating. Private equity folks are deal-making professionals who often come from elite investment banking and management consulting backgrounds. They buy and sell businesses for a living. Your business is your living - you built it and it is the only one you have.

Here are 7 things to consider to prepare for talks with private equity firms.

1 - What Are Your Goals? - Are you looking to cash out and retire? Do you want to keep working? Are you willing to work for a demanding new boss in exchange for a potential big payday? Do you have business partners or successors you want to transition to? It is important to think about how your business fits in your broader life goals. Speaking with a certified financial planner can be a good idea to understand the financial part of those decisions. Speaking with an executive coach can be helpful to explore your career goals.

2 - Know Your Numbers - A big determinant of the value of your business will be a number derived from your financial statements called EBITDA - Earnings Before Interest, Taxes, Depreciation, and Amortization. It measures your company's underlying profitability once you strip out your tax, accounting, and capitalization situation. Any investor will want to scour your financial records to understand your history and projections. It is important to work with your company's financial staff to understand what your financials look like and have confidence in their accuracy and thoroughness. A private equity buyer is probably going to try to poke holes in those numbers during the due diligence process to confirm or adjust their valuation of your business. Finding a business valuation service provider or a business broker to give you an independent sense of your company's value could be helpful.

3 - Private Equity Is Not Your Only Option - If selling your business sounds appealing, private equity firms are not the only buyers out there. Other non-financial companies that create similar products or services as you do might want to buy your firm to add to theirs. If they buy your company, they may want to become your boss or have you exit the company. Like private equity firms, they typically will set a price for your business based on its current EBITDA times a multiple of that number that they have seen in the market. (To use a home-buying analogy, this is kind of like looking at the price per square foot of other houses recently sold in your market to come up with a value for your house.) Getting advice from a business broker can be helpful to find these opportunities and multiple value ranges relevant to you.

4 - You're Not The Private Equity Firm's Only Option - Private equity groups look for potential acquisitions all the time. They build a pipeline of potential acquisitions and know that only a small fraction of those will turn into a deal they find worth making. If you or your staff are too hard to work with, they may have plenty of other options on their list to pursue. Ensure you and your staff treat private equity firm staff with the professional courtesy the situation commands. After all, they may become controlling members of your board of directors.

5 - Anticipate the Deal to Be Offered - Private equity firms can buy all of your business or can offer to buy a large controlling majority (e.g., 70 percent) of your business and have you keep the remainder and stay to manage operations. That way you have an incentive to rapidly grow the value of the business. They may finance a big part of their equity purchase by taking on debt that they put on the company's books. Within a few years (often 2-7 years), the private equity company will want to sell the company because they have to pay back their own investors. The plan is that the operational improvements (and financial restructuring) completed will translate to increased EBITDA, which will make the business more valuable than when they bought it. (To continue the home buying analogy, private equity firms are a bit like people who buy houses using money they have and borrow, then invest more money, effort, and time to fix them up, and then profit by selling them for a higher price later.)

6 - Anticipate the Improvement Opportunities - Your new private equity owners are probably going to want management to generate more revenue by growing sales from existing customers (and sales agents), finding new customers and products/services, and optimizing prices. They are probably going to look to reduce costs across the board, including cutting staff, eliminating inefficiencies, squeezing suppliers, and chopping overhead. They are likely to look for assets that can be sold off. Things that may have been "sacred cows" -- like family members on the payroll, cushy benefits, club memberships, company cars -- will likely get scrutiny. They may also want to merge other companies into yours or merge yours into another company - a strategy sometimes called "tucking in." If you stay on to manage the company under a private equity controlled board, you are going to be the one who has to make these changes happen. (To continue the real estate analogy, it's a bit like continuing to live in a house you sold while you lead the improvement work to ready the house for resale.) Do you have the appetite to drive these types of changes? An executive coach can help you talk through that question.

7 - Prepare for the Process - If you decide to move forward with a private equity suitor, gird yourself for the steps between an initial meeting and a deal. The initial meeting with pleasantries and a tour will give way to a due diligence process that may feel like an audit. It can take up a lot of the time and focus of you and your management team, especially your financial staff. (Consider getting a non-disclosure agreement before sharing your information.) They may talk to your customers, employees, suppliers, and business partners to see how the information from you checks out. They may review your current and prospective competition. They may assess the potential impact of technology, regulation and other external forces on your business. (If your business has "any skeletons in your closet," they may come out too.) Each flaw discovered may chip down the price of your business initially agreed to in a letter of intent or may stop the deal altogether.

When done right, a sale to a private equity firm can be a way for a business owner to exit their business while also keeping the business going.Some business owners who stay call it "getting two bites at the apple" because they get paid when they sell their initial stake to the private equity firm, and they get paid again -- potentially even more -- when the private equity firm sells the transformed business. A little preparation can help make sure that apple tastes more sweet than sour.

5 Skills to Manage Your Workload and Work/Life Balance

Posted on July 16, 2019 at 1:50 PM

According to a recent survey by LinkedIN, the top two challenges for US employees are "finding a work-life balance" (38 percent) and "managing their workload" (31 percent). I too struggled with these issues in my career. Then I learned these five powerful tips to manage my workload and work/life balance from five very different places.

1 - Ask for Help - According to that same survey, 35 percent of US employees admitted they are too scared to ask for help at work. Incredibly, a third of respondents said they would rather work six extra hours than ask for help! I too used to be reluctant to ask for help. I was too proud to look weak or admit I didn't know something. I had an epiphany about help while walking the ancient Camino pilgrimage trail across Spain on vacation, however. I stopped for lunch in a small village in rural Spain and saw these three older gentlemen across the street eyeing us pilgrims (see photo). When two other hikers went the wrong way after finishing their lunch, I saw these guys leap up and yell (nicely) to point them in the right direction. I realized these guys were waiting for the chance to be helpful to pilgrims. They were strategically positioned across from the only restaurant in the village. When I left, I acted like I was lost too just to give the men a chance to help me. I smiled when they did.


LESSON - Ask for help because it isn't just good for you, it gives others the gift of feeling helpful. People like to feel smart and have their skills and expertise acknowledged. Asking for help is a win-win way to do that. 

2 - Use the 80/20 to Prioritize - On my first day working for one of the big three strategy consulting firms, we all got a speech from the managing partner about the keys to success at the firm. I never forgot one piece of advice because it was a totally new concept to me - "Find the 80/20." Because they charge expensive rates, consultants are trained to prioritize their work to maximize the value they return to clients. They do that by using the Pareto Principle, often called simply the "80/20 rule." This is a common phenomena in nature where 20 percent of potential causes produce 80 percent of the results. For example, people typically wear 20 percent of their clothes 80 percent of the time and 20 percent of carpet area typically gets 80 percent of the wear. Once you figure out the 80/20 of a problem, you can focus on solving the 20 percent of potential issues that will give you 80 percent of the value.

LESSON - "Don't sweat the small stuff." Ruthlessly focus your time on the 20% of activities at work that are most essential to achieving your results and de-prioritize / delegate / drop the 80% of things that are not. 

3 - Delegate Meetings - According to a 2007 survey, 46 percent of companies were concerned about their employees' ability to delegate. (Ironically, only 28 percent of those companies offered training in delegation.) If you are a manager, meetings are one of the biggest and easiest things to delegate. Identify the meetings you, and only you, must attend because of your role - e.g., meetings with your boss, one-on-ones with your direct reports, meetings you chair, places where you vote or approve. Keep those on your calendar. The rest are candidates for delegation. Purposely skip one of those meetings and send one of your deputies as your delegate. Give them marching orders on how to represent and debrief you. Make clear the delegation is conditional. If done well, your team member will appreciate the extra exposure and responsibility. And if you keep it up and find other meetings to delegate, you will appreciate the time you reclaim.

LESSON - Delegating is like teaching a kid to ride a bike - it is a skill in letting go that is scary but can be a game-changing process improvement for everyone involved. Before they taught me to ride a bike, my parents had to take me everywhere. Once they taught me to bike, I started transporting myself - and freed up a lot of their time. 

4 - Set Daily Goals - Two things I loved about playing football in high school were the scoreboard, and the time clock. They gave us a clear goal and feedback. I would give it my all during the game, but after the clock was done, it was time to recover. Setting a daily goal at work is a great way to put your workload into perspective and put closure on a day. Define one thing you want to achieve each day that will make you feel like you put points on the scoreboard. Maybe it is finishing, or starting, some task that has been on your plate for a while. Maybe it is getting a desired outcome from a meeting you run. Maybe it is getting a weekly task done. Pick something small and end your day on a high note by finishing it.

LESSON - Rome wasn't built in a day - but it was built one day at a time. Set a daily goal at work and toast yourself for its completion at dinner-time away from work. 

5 - Set Communication Boundaries - Our smart phones are amazing communication tools that connect us at work. But when we don't control them, they can become weapons of mass distraction. At work, they can divert your focus, killing your productivity. After work, smart phones can enable work to creep into your free time, killing your work/life balance. Figure out rules to set boundaries with your communication tools. Turn off non-essential personal notifications on your phone that distract you at work. Turn off work email notifications at night. Keep your work phone in your bag when you get home. Shut your phone off during family time. Whatever works for you, figure out ways to turn the switch off when you leave work.

LESSON - When a restaurant gives you a buzzer to let you know your food or table is ready, you want to get rid of it as soon as possible. View your work phone the same way. Once it has done its job for the day, put it away or turn it off.

7 Secrets to Success When Your Boss is an Ex-Consultant

Posted on June 16, 2019 at 1:35 PM

There were over 637,000 people in the United States employed in the management consulting industry in 2016, according to With annual staff turnover rates of an estimated 15-20 percent, that means tens of thousands of former consultants are released into the wild each year to take 'real' jobs at organizations outside of consulting. Many of those ex-consultants transition to management roles. Some have even ended up as the CEO of large companies like Google, eBay, Hewlett-Packard, Dell, American Express, Pepsi, LEGO, Levi-Strauss, Intuit, Capital One, and GE.

If you work for a team or organization led by an ex-consultant, you may realize that ex-consultants can be challenging to work with. They use unfamiliar buzzwords and terms. They want to see everything in slide format. They lean too much on data and analysis and sometimes forget the human part of the equation. They can be arrogant and run at a hyper pace. They may lack life experience. In short, they see the world differently than "mere mortals" who never worked in consulting.

If you have an ex-consultant as a boss, here are 7 secrets on how to survive - and thrive - working with them:

1 - Find the 80/20 - Because management consultants charge expensive rates, consultants are trained to prioritize their work to maximize the value they return to clients. They do that by using the Pareto Principle, often called simply the "80/20 rule." This rule states a common phenomena where the most important 20 percent of things you could work on will produce 80 percent of the value. In other words, learn to avoid "sweating the small stuff" and figure out the few big things that generate most of the impact in your work and be excellent at those.

2- Structure Your Communications - Consultants are trained to communicate in a concise and precise manner. They get used to all their consulting colleagues communicating that way too. They can tune out people who are not communicating in the same "answer-first" style that quickly gets to the "bottom line" of any issue. The good news is that this structured communication style can be learned. Ask your manager to provide you with training in structured communications.

3 - Dig for Data - Consultants are trained to be fact-based and data-driven. If you are presenting your work, an ex-consultant boss is probably going to ask you for facts and data to back up your conclusions. Anticipate their questions and look for data to help explain your decisions. Sometimes data can be calculating what the numbers would look like from your recommendations. Sometimes it can be asking customers or others for their reactions to your ideas. Learn to be data-driven yourself and you will likely end up making better decisions that will generate less scrutiny from your ex-consultant manager.

4 - Get Comfortable with Feedback - Consultants learn to be open, honest, and direct in giving and receiving feedback because their work depends on it. Their work is typically team-based, and since a new team forms for each new project, consultants get a chance to work in many different teams over time. Teams have to ensure their work is right before it goes to the client, so they learn to pressure-test each other's work. You need to learn to be comfortable receiving (and delivering) open and honest feedback and avoid taking it personally.

5 - Protect Your Time - Consultants work under tight deadlines in their projects. They also have to add in travel time to get to the client. Consultants are often expected to work hours far in excess of 40 hours per week. They can often do this because they started in their consulting career before they picked up other priorities in life - like a family. An ex-consultant might expect everyone to work excessive hours as a default since that is what they are used to. If your boss is still working consulting hours, put stakes in the ground around the commitments outside of work that are important to you and schedule those like you would any priority at work.

6 - Help them Understand Organizational Politics - Every workplace has organizational politics, but the internal politics in consulting are less entrenched because people change teams and managers all the time. An ex-consultant may naively believe the right facts and logic will always prevail in their new role. They may fail to realize the importance of relationships and politics in big organizations where people often plan to work for decades, not years. Help them see the potential errors and traps they are facing. Give them suggestions for the relationships they should build. If your boss stumbles, it probably means your job gets tougher too, so help them succeed. Helping your boss navigate the organization can make you particularly valuable to them - and earn their appreciation at review time.

7 - Emphasize Implementation - Consulting often stops at the recommendation stage and leaves implementation to clients. This can make consultants under-appreciate the difficulty of implementation. Your boss will probably come up with a lot of new ideas how to do things. Instead of telling them all the reasons why their new ideas won't work, help them understand what it would take to implement their ideas. How would other departments have to change their priorities or behaviors to implement that idea? What things could we stop doing to free up resources to start that? How could we get the people and tools to do that? Your boss will probably have one or two good ideas mixed into all the possibilities they see. Help them focus on and deliver those and they may see you as an exceptionally valuable member of the team.

Working with a manager who comes from a consulting background can be challenging. It can also be rewarding if you take advantage of the learning and growth opportunities it provides.

5 Conversations You Need to Have with Your Manager

Posted on May 16, 2019 at 1:30 PM

You see the "check-in" meeting with your boss looming on your calendar and you feel a familiar dread. Every once in a while, these meetings are useful, but more often, they just generate a lot of questions that mean more work for you. Sometimes, they are just a waste of time, politely wandering around random topics without covering any useful substance at all.

If your check-in meetings with your manager are not productive, YOU need to improve them fast! A big part of your manager's job is to provide you the support, direction, and feedback you need to get your job done and grow professionally. If they are not providing you with that help in your check-in meetings, are they giving you that help anywhere else? Check-in meetings are your best chance to seize your manager's focus in a one-on-one setting. Here are 5 conversations you should raise with your manager in your check-in meetings.

#1 - Feedback on Your Results - At some point in your organization's performance process, your boss is probably going to share an assessment of your performance with their boss and others. Wouldn't it be helpful for you to hear their feedback before then so you can weigh in and adjust your performance as needed? You can help focus the discussion by bringing a list of your results for the year, key performance metrics from your area, or the operational goals in your performance plan. Go over those in your meeting as a way to surface their feedback. When your manager tells you they would like to see more progress, use that as an opening to ask them to clear barriers, get resources, make decisions, or provide other support that would help you. 

#2 - Feedback on Your Competencies - In addition to your results, your manager may also assess you on skills and behaviors required for your job. Their assessment may define your potential for promotion and define your place in line for new "stretch" opportunities. A simple way to surface their feedback is to ask them to list a couple of things you should be doing more, less, or better. You can ask them to share feedback they hear about you from others. You can bring a list of competencies in your performance assessment and job description and go over that together. If you have an open relationship with your manager, you could even share job postings for bigger internal roles to get their feedback on your qualifications against those. When your manager gives you feedback on places to improve, use that as an opening to ask for their support - and budget - to get training, coaching, and other support to fill those gaps.

#3 - Decisions You Need - Your boss is better-positioned (and maybe solely authorized) to make some decisions you need to get your work done. How should you prioritize new work demands versus existing ones? Which path should you take at a major decision point in your project? Where will they delegate authority so you can make decisions instead of them? Be careful not to ask them for decisions you are responsible for. And be ready to answer if they put the question back to you for what you would recommend. When your manager makes a decision, record it in your notes or an email back to them so you can remind them down the road if needed.

#4 - Support You Need - Your manager is the gatekeeper to resources and support you need to get your job done. Decisions about scarce resources like budget or new staff are often handled in formal processes, but you can lobby for your future requests in your check-ins. There are also many less formal forms of support you might need. Sometimes you need information from another area outside your purview. Maybe you need them to convene a meeting or provide air cover to resolve a conflict you are facing. Sometimes your boss might have technical expertise that could help you, especially if they have been in your field - or your job - before you. People often like to be asked for help because it makes them feel important. Your boss is no different. As long as your requests for support are things they don't expect you to do for yourself, asking them for help can feed their ego and build your relationship - especially if you remember to thank them afterwards.

#5 - Information You Need them to Know - Your manager has a boss too, and they don't want their boss to hear about news in their area before they do. They also want a chance to step in and act on things personally while they can. If you see illegal or inappropriate activity, you need to escalate that to your manager (and other required channels) immediately. If you see big operational, reputational, or other risks bubbling, let your boss know so they can take action if needed. If you see internal conflicts brewing, give them a heads up so they can address it before it blows up. Sometimes the news you need to share is good news on the horizon that they might want to celebrate. If you can foresee your boss freaking out (or being overjoyed) by potential news from your area, it is better for you to give them warnings ahead of time.

You don't have to talk though all these items in every one of your manager check-ins, but it is a good idea to make sure you think through them beforehand. If your manager has an agenda they use to run these meetings, think about the natural point where you can insert the conversations you need. If your boss doesn't prepare, consider doing an ad hoc agenda in advance like you should for any other meeting you run. Manager check-ins should be one of the most productive meetings you have at work. You should prepare for them like they are.

5 Ways to Manage an Ineffective Boss

Posted on April 16, 2019 at 1:10 PM

If you work long enough, you will have one - a boss who just isn't getting their job done. Maybe they are overwhelmed or out of their league. Perhaps they got promoted too fast or missed manager training. Maybe they are just checked-out or lazy. Whatever the reason, the impact on you is the same - they are not providing you the coaching and support you need to be the best at your job. Here are 5 steps you can take to manage an ineffective boss.

1 - Assess the Situation - Understanding the root cause of your manager's dysfunction can help you assess what it means for your situation - especially how long it will last. If your boss is new to the role and just lacking experience or training, they may remain for a while and improve over time. Help them target their improvement to help you. If they have been in place for a long time, they may not be going anywhere soon, especially if some factor like nepotism is in play. Figure out how long you are willing to try to succeed with them and when you will start looking for new opportunities. If they look like they are getting "managed out," you may need to prepare for a replacement or reorganization quickly.

2 - Identify the Impact on You - A boss' job is to provide several services to their team members. They coach, direct, rally external support, check quality, bring technical expertise, and many other things to help their team members succeed. You need those things to help you get ahead, especially as you compete for promotions with peers who have good managers. Identify the help you are not getting from your manager. Talk with your peers to understand the support they get from their managers. Read leadership books and articles to help you see what good leadership looks like.

3 - Ask for Supplemental Help - Your boss may not have all the management skills you need, but they do have access to resources, authority, and relationships you don't. Ask your boss to help you get support elsewhere. If your boss isn't an effective external advocate for your team, ask for ways to get you more exposure outside your team. If you aren't learning required expertise from them, ask them to help you get training. If you aren't getting the coaching you need from them, ask them to pay for an executive coach for you. That might even set an example for them to follow.

4 - Help them Succeed - After you have addressed your own needs, think about ways you can help your manager succeed. If they view you as a good performer, ask how you can help. Maybe you can be a sounding board for them. If they ask for feedback, be ready to give them carefully crafted suggestions. As appropriate, offer to take some work or meetings off their plate to ease their burden. While helping them, that can also help you pick up some experience that builds your own resume. (Be careful with this, though, to make sure you get "extra credit" in your performance reviews and not a share of the blame for their mismanagement.) If you help your manager when they are down, you may be building a grateful ally - and great job reference - for life.

5 - Position Yourself for New Jobs - Realize that your situation may not improve and your ineffective manager may be there for longer than you want to wait. Or prepare yourself for a snap change from a reorganization or manager replacement. Either way, build and nurture your network now so it will produce new opportunities later when needed. And if one of the new opportunities you are interested in is your manager's job, tread carefully. Manage your personal brand so your good work is recognized and is not tied to the poor performance of your boss. But also make sure you are not seen to be undermining your boss to get their job.

If you haven't worked for an overwhelmed or checked-out manager yet, consider yourself lucky. Now you can also consider yourself warned and prepared.