Rich Horwath: A second interview by Bob Morris

Posted on: January 19th, 2013 by bobmorris

Horwath, RichRich Horwath helps people live strategically — to get more out of their business and more out of their lives. He is a New York Times and Wall Street Journal best selling author on strategy. As the CEO of the Strategic Thinking Institute, he leads executive teams through the strategy process and has helped more than 50,000 managers around the world develop their strategic thinking skills. As a former chief strategy officer and professor of strategy, he brings both real-world experience and practical expertise to help groups build their strategy skills. Rich’s work has been profiled on ABC, CBS, CNBC, NBC, CNN and FOX TV. His most recent books include Deep Dive: The Proven Method for Building Strategy and Strategy for You: Building a Bridge to the Life You Want.

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Morris: Before discussing Strategy for You, a few general questions. First, years ago, was there a turning point (if not an epiphany) that set you on the career course you continue to follow? Please explain.

Horwath: About 15 years ago I created a process called Purpose Channeling to help me identify my true purpose in life. After working through the process, the theme that came through was “competition.” Competition is from the Latin competere which means, “to strive together.” For me, life is about striving with others to reach our full potential. I included the Purpose Channeling process in this book because I believe one must understand their purpose before they can channel their talents and energy into productive outlets.

Morris: To what extent has your formal education been invaluable to what you have accomplished in life thus far?

Horwath: Formal education pointed me in the direction of my current vocation, but informal education has played an equally, if not more important role. Once I honed in on strategy as my channel for competition during my graduate work, I read hundreds of articles and nearly a hundred books on the subject to build a foundation of expertise. It was years of this informal education, which created my heightened interest in the field of strategic thinking.

Morris: What do you know now about business world that you wish you knew when you when to work full-time for the first time? Why?

Horwath: Make no assumptions. Don’t assume the person above you has the answers. Don’t assume the customer who said “no” last time will say “no” this time. Don’t assume the competition will match what you do. Still today, not assuming is an ongoing challenge.

Morris: Of all the films that you have seen, which – in your opinion – best dramatizes important business principles? Please explain.

Horwath: I view movies through a strategy lens. The movie Walk the Line about the life of Johnny Cash provides a good example of a key strategy principle: It’s not about being better; it’s about being different in ways that people value. Johnny Cash didn’t have the best singing voice, but he was successful because he was different than all of the other recording artists of his day. He also took great risks in singing about killing people back in the 1950s, but his stories resonated with a large number of people. Strategy involves differentiation and risk. Johnny Cash exemplified both.

Morris: From which non-business book have you learned the most valuable lessons about business? Please explain.

Horwath: Napoleon Hill’s classic Think and Grow Rich emphasizes the importance of having a purpose and then following that purpose with dogged determination. Too many people make excuses and rationalize away their interests and talents because they don’t have the guts to follow their purpose. It’s sad and true.

Morris: Here are several of my favorite quotations to which I ask you to respond. First, from Lao-Tzu’s Tao Te Ching:

“Learn from the people
Plan with the people
Begin with what they have
Build on what they know
Of the best leaders
When the task is accomplished
The people will remark
We have done it ourselves.”

Horwath: Proverbs 27:17 says, “As iron sharpens iron, so man sharpens his fellow man.” I believe we all have talents that can help others. The question is: Do we know what those talents are and are we willing to help others?

Morris: Next, from Voltaire: “Cherish those who seek the truth but beware of those who find it.”

Horwath: The truth can be wonderful, painful, revealing and necessary for progress.

Morris: And then, from Oscar Wilde: “Be yourself. Everyone else is taken.”

Horwath: Step 2 in building a Strategy for You is Differentiation. If you haven’t identified what is unique about you that brings value to others, it will be difficult to reach your potential.

Morris: From Albert Einstein: “We cannot solve our problems with the same thinking we used when we created them.”

Horwath: New growth comes from new thinking. Without new thinking, one cannot reasonably expect substantial growth in achievement, happiness or any other undertakings.

Morris: Finally, from Peter Drucker: “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.”

Horwath: Great strategy is as much about what we choose [begin] not to do as it is about what we choose to do.

Morris: Here’s a brief excerpt from Paul Schoemaker’s latest book, Brilliant Mistakes: “The key question companies need to address is not ‘Should we make mistakes?’ but rather ‘Which mistakes should we make in order to test our deeply held assumptions?'” Your response?

Recently, it’s a popular notion to “fail fast and make as many mistakes as you can early on,” and I’ve seen a number of leaders espouse it. I think it’s one of those cool things to say which is ridiculously dumb in practice. While it’s important to take calculated risks in developing strategy, some of which may result in mistakes, continually making mistakes shows a lack of thinking more than anything else.

Morris: In your opinion, why do so many C-level executives seem to have such a difficult time delegating work to others?

Horwath: The popular answer is that the CEOs are control freaks and have always done the work. The reality is a lack of competence in the people around them. Great leaders surround themselves with great people, making delegation a natural task. If a CEO doesn’t have great people around them, delegation isn’t an option.

Morris: The greatest leaders throughout history (with rare exception) were great storytellers. What do you make of that?

Horwath: People are moved by truth wrapped in emotion. A story is a vehicle to communicate a truth in a way that appeals to both the head and heart. Anything less generally falls flat.

Morris: Most change initiatives either fail or fall far short of original (perhaps unrealistic) expectations. More often than not, resistance is cultural in nature, the result of what James O’Toole so aptly characterizes as “the ideology of comfort and the tyranny of custom.”

Here’s my question: How best to avoid or overcome such resistance?

Horwath: Research shows that human beings avoid change at all costs. Unless you can create a personalized burning platform for change and show people the behaviors and tools to accomplish it, the effort will fail.

Morris: Looking ahead (let’s say) 3-5 years, what do you think will be the greatest challenge that CEOs will face? Any Advice?

Horwath: The greatest challenge will be the ability to sort through the avalanche of data and information and extract insights that will move the business forward. It requires both analysis and synthesis, and most importantly, time to think.

Morris: Now please shift your attention to Strategy for You. When and why did you decide to write it?

Horwath: Strategy shapes the world. For thousands of years, strategy has been the driving force of success in politics, war and business. But, it hasn’t been used by the majority of people. Strategy is the power to get from where you are today to where you want to go in life. I want to give people that power–the power to live strategically.

Morris: Were there any head-snapping revelations while writing it? Please explain.

Horwath: I wasn’t surprised that only 15 percent of adults had a plan for their life, outlining goals and objectives. What was a shock is the fact that only 22 percent of Fortune 1000 executives used the principles of business strategy in their personal lives. Bad strategy is the number one cause of bankruptcy. Business leaders know how a lack of strategy can cause their business to fail, so I assumed they would have taken their knowledge of strategy and used it for their life. But, that’s not what the numbers show.

Morris: Many (if not most) people I know have a significant gap between the life they have now and the life they wish they had. In you’re your opinion, why is it so difficult to build a “bridge” from one to the other?

We live in an action-oriented society where the motto “greed is good” has been replaced by “speed is good.” People equate busyness with excitement, when in reality, activity doesn’t necessarily equate with effectiveness. Many people have become addicted to the adrenaline rush of mindless reactivity, racing to respond to emails, texts and tweets. But, they don’t take time to think about their lives. The average Facebook user spends dozens of hours of every month browsing the site. Imagine if even 25 percent of that time was spent creating and fine-tuning their plan for life what a difference it could make.

Morris: You urge your reader to “recall yesterday, think today, and envision tomorrow.” What specifically does that involve?

Horwath: Before we can build the bridge to where we want to be, we first need to take stock of where we’ve been. What moments in your past have fully engaged you? What are the common themes in those engaging experiences? Thinking today means stopping, sitting down and recording what’s happening in our lives. A simple Individual Survey allows you to plot the key happenings regarding your Mind, Body, Relationships and Finances. Envision tomorrow means we look down the road a bit–what’s your end-game?

Morris: What are the defining characteristics of a “bridge to nowhere”?

Horwath: The most common example is people working in a job they don’t like. Research shows only 2 out of every 10 people have a job that allows them to use their strengths every day. What a waste. When you consider the average career spans more than 100,000 hours, think about how much time is thrown away working in a job that’s not the right fit. Very few people have taken the time to assess their strengths, talents and passions and then mapped a strategy to use them in a their career.

Morris: By what process did you determine the five steps of the process your recommend?

Horwath: The process for developing a strategy for you mirrors the proven process for developing a business strategy. I’ve seen the process used by hundreds of organizations to improve their performance and I’ve seen it used by dozens of people to help them reach their full potential. Unlike most of the other books on building a plan for one’s life, this is based on the foundational principles of strategy, not some fad-of-the-month club.

Morris: Which of the steps seems to be most difficult to complete? Why?

Horwath: Step 1: Discover. Many companies refuse to change until they are at the brink of bankruptcy. People aren’t so different. Many people are content or comfortable, so taking the time to confront the realities of their life and those fit with the big picture can be daunting. There are so many technological opportunities to eat away at our attention–mobile phones, tablets, TV, the Internet–that thinking has been discarded.

Morris: To what extent can almost anyone be the “architect” who “builds a bridge to a better life”? What are the essential “materials”? Please explain.

Horwath: Designing your life begins with taking a look back at your experiences from childhood to the present. Recording those key events, the moments when you were fully engaged in an activity or passionately involved in something, is the first step. Once you’ve identified the purpose, then it’s about understanding where you want to go. What channels can you pursue to use your purpose, both at work and at home? What does success mean to you? Write it down. Now, how can you go about getting there?

Morris: Step 3 involves selecting materials for building one’s bridge. How best to determine which are needed? How to obtain them?

Horwath: Begin by identifying the resources you have at your disposal–your time, talents and capital. I recommend carrying a small notebook with you for a week and recording what you spend your time on in 30 minute increments. It can be eye-opening. Then record where your investing your talents and financial resources. Now, see how those current investments match up with your goals and modify accordingly.

Morris: Which of the five SWOT traps is most difficult to avoid or escape from? Why?

Horwath: The most difficult SWOT Trap to avoid is not quantifying opportunities and threats. We have general ideas about what we should do, but rarely do we try to quantify or qualify what the impact of those positive or negative events will mean to us.

Morris: I probably should have asked this question earlier. Please explain the strategy formulation process. Who’s involved? Who leads the discussion? By which specific process is an appropriate strategy developed?

Horwath: The strategy formulation process in business involves the following five steps:

1. Discovery
2. Strategic Thinking
3. Strategic Planning
4. Strategy Rollout
5. Strategy Tune-up

Leaders and key representatives from all functional areas should be involved in Discovery and Strategic Thinking. For the latter three phases, the people accountable for the resource allocation should be involved and making those decisions.

Morris: I agree with Michael Porter: “The essence of strategy is choosing what not to do.” What do you think?

Horwath: Absolutely. Everybody has a “To-Do” list. The great managers also have a “Not-To-Do” list.

Morris: Some of the most valuable material in the book is provided in the fifth chapter when you discuss motivation and perseverance.

Horwath: We all have crosses to bear and setbacks to overcome. Some are more significant than others and they affect each person differently. But, if you’ve taken the time to find your purpose and set goals, then you have reasons to keep going. Without a purpose and goals, it would be difficult to find those reasons to move forward.

Morris: Even when a bridge with a solid foundation is in place, why are at least some people reluctant to cross it? What does that suggest?

Horwath: It suggests the realization that inherently when we move forward, we’re at the same time leaving things behind. For some people, they simply aren’t ready to leave people or things behind that were important in their past. It’s understandable and speaks to whether or not the vision you’ve set for yourself is compelling enough to drive that motion forward.

Morris: As I shared your thoughts about perseverance, I was reminded of Jack Dempsey’s observation, “Champions get up when they can’t.” It really [begin italics] does [end italics] take courage to engage the unknown, to challenge a well-entrenched status quo such as the one to which O’Toole refers. Do you have any advice?

Horwath: The foundation is purpose. If you have a purpose you’re committed to–be it teaching, parenting, leading, creating–then staying on the canvas simply isn’t an option.

Morris: As I read the final portion of the book, your comments reminded again of Stephen Covey’s observation that people should spend less time working on what urgent and more time working on what is [begin italics] important [end italics]. Do you agree?

Horwath: With our world of 24/7 connectivity, everything is urgent. It now requires significant discipline to not react to the latest text message or tweet that comes flying our way. Eliminating that fire-fighting, bumper car mentality begins with writing down your values and what is truly important to you. Without that guide, there’s no filter between the urgent and important.

Morris: What is a “strategy tune-up”? What’s involved?

Horwath: A strategy tune-up is a periodic look at our life to see what’s working, what’s not and what needs changing. It means taking time to think about where you are, where you’re going and how you’re going to get there.

Morris: In your opinion, what role does the unconscious mind play during the process of strategic thinking? Please explain.

Horwath: Experts have shown that the creative process requires an incubation stage where we’re not consciously focused on the topic or subject matter. Allowing the subconscious time to digest the topic often leads to the “aha” moment where we discover a new idea or solution to the challenge at hand.

Morris: As I think about it now, I can recall at least three different times in my life when I had to build a bridge and each was different because each situation was different. (No doubt there were several other times that do not immediately come to mind.) Over time, I seemed to become a better bridge builder. Is that a common or unusual experience? Please explain.

Horwath: Over time we have the potential benefit of experience to help with future bridge building. I say “potential” benefit because experience is only valuable when we’re actively learning from it. Too many folks go through life without jotting down their key insights and ideas. But, when you look at the great contributors throughout history, from da Vinci to Einstein to Bill Gates, they all have taken time to record and review their ideas.

Morris: Let’s say that a CEO has read and then (hopefully) re-read Strategy for You and wishes to institutionalize the GOST principles to improve decision-making and problem-solving at all levels and in all areas within the given enterprise? Where to begin?

Horwath: The GOST principles were implemented several years ago by a Fortune 100 company with tremendous success. They began by training their people on the definitions of the terms: goals, objectives, strategies and tactics. As Professor Rumelt from UCLA noted in his book “Good Strategy/Bad Strategy,” managers often confuse the terms goals and strategies. Once people understand the difference between the terms, it’s important to have them practice writing their goals, objectives, strategies and tactics. They should periodically review each others efforts to ensure that the terms are being used effectively, which greatly increases the efficiency of communication.

Morris: For more than 25 years, it has been my great pleasure as well as privilege to work closely with the owner/CEOs of hundreds of small companies, those with $20-million or less in annual sales. In your opinion, of all the material you provide in Strategy for You, which do you think will be of greatest value to leaders in small companies? Please explain.

Horwath: The word decision comes from the Latin decidere, which means “to cut off.” Inherently, when we make trade-offs, we’re required to make decisions. In small companies, where resources are scarce, the ability of managers at all levels to make strategic trade-offs–to cut off things that are not of great value–is critical. In small companies especially, the ability to clearly focus can mean the difference between success and bankruptcy.

Morris: Which question had you hoped to be asked during this interview – but weren’t – and what is your response to it?

Horwath: None, Bob, your questions are highly thought-provoking and greatly appreciated.

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To read my first interview of Rich, please click here.

He cordially invites you to check out the resources at these websites:

Strategic Skills Institute homepage

His Greenleaf Book Group page

His Amazon page

Deep Dive page

Strategy for You page

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