Insurance for your Investment to Avoid the 5th Year Fail

Key Reasons CEO’s fail and lose your money…

With more companies failing in the 5th year than in the 1st, according to the SBA, one must wonder why? They have sales, cash flow, market, and things seem to be working. So why such a failure rate at 5 years?

As an investor this must be a concern as its around the 5th year that one expects to see a return on the funds invested.

Over the past 40 years of working with business start-ups, growth companies and mature companies, we have seen many of the issues that could cause the 5th year statistics. Here are some of the major ones an investor, CEO and Founder must look out for.

1.       The art of planning or the lack thereof. It is amazing how many in leadership roles do not utilize the most basic of planning in their operations. With a “wild west” reactionary approach, chaos and poor performance become the norm. There is awareness something is not right, but without a plan to measure against, the cause is lost in the chaos.

Even when there is a Strategic Plan in place, is it tossed in the drawer and only reviewed after the fact? Such Strategic Plans should be the central focus of the leadership team, even when there are only three people in the company. Weekly if not Monthly reviews should occur on a scheduled basis. This keeps the organization focused and provides a measurement and warning when they have wondered off Track. Loss of focus equals loss of profit.

2.       I cannot count the times we have found the CEO/Founder being the biggest choke point in a growth business.  Nothing can move without their input or directive. This inability to “let go” or not delegate stops great people with potential and often causes them to seek other opportunities. Now your losing human capital and that is expensive.

Many managers struggle with the “letting go” yet once overcome, the manager becomes a great leader, which is different. Most people are not natural born delegators because its more than just giving out tasks! It is about communicating outcomes, coaching for performance, providing tools and skills, monitoring and making tough choices along the way. All of this can be developed if the CEO/Founder is open to it. Now the company has unlimited potential.

3.       The ability to make decisions, act on those decisions and then modify as needed is one of the most valuable capabilities of a CEO of a fast growth company. Yet many Founders are not yet tested in this capacity. When the complexity grows, the Founders capability comes into full light. Hopefully they can learn, demonstrate and develop the decision, act, modify ability.  

4.       If the CEO/Founder is high functioning in the first three areas, the “Right Team” tends to take care of itself. Yet one key issue that continually comes up is “The team that got you here may not be the one getting you there.” Many new leaders have issues when it comes to change in the leadership team, not because their bad people on the team, just not the right ones for the company at this time.  

This is where building “bench strength”, “transferring tribal knowledge”, and “culling the team” come into play. This takes vision, strategy, planning, communications and leadership for the company to grow and be profitable. It also takes time, effort and patience to become this type of leader. But this drives high profit and long-term stability.

5.       The “loneliest seat in the room” is often used to describe the CEO seat. The ability to express one’s ideas with full confidence is not always available to most Founders. The bank, attorney, CPA all have their agendas. The leadership team kind of understands, but not really. Besides, who can one trust?

This is why the CEO peer to peer concept is so powerful. When we ask a CEO who they really trust and take their input to heart, it is another CEO! Having the ability to confidentially address their business and personal concerns can propel an ok CEO to an awesome CEO as we have experienced it many times. Often, all five of these issues can be addressed on an ongoing basis for the CEO through a peer group.

We hope this gives you the investor, insight into how to ensure your investment is staged for a great ROI. It begins and ends with the capability of the CEO/Founder. What is your strategy for assuring your CEO’s are at their peak and maximizing your investment return?

For more on CEO Peer opportunities, visit

The Reality Phase

reality phase

In our previous blog posts, we have discussed the Innovation Cycle, detect – correct, innovation vs status quo, and improving communication through innovation. Now, for the next in this series: the Reality Phase.

We agree that Innovation is an import skillset for success, both in business and in personal life. The challenge is, how do we continually enhance our ability to innovate?

Let’s look at the first phase – the Awareness, or Reality Phase – and learn how we can enhance this aspect of innovation.

There are three key components that make up your InnovatorMindset score. They are:

  1. Cognitive: how you logically or contextually view observation. You can think, “Yes, I am curious and want to explore ideas.” This is good as it causes you to be aware of new ideas or information, and be open to them on a thinking level.
  2. Value: whether you place a higher value on the existing and proven knowledge or the new and unknown thinking and ideas. If you truly value new inputs, you will be more likely to ask questions, inquire more, explore and discover.
  3. Behavior: your actions when you observe something new or different. Do you actively pursue new information, sources of insight, discuss, listen, and act on your curiosity?

Let’s say you have a high cognitive mark towards innovation, but scored lower in value and behavior. New information or a new idea is observed and acknowledged, but you value the known and proven more. Therefore, you question whether it is worth the time to explore; even though your thinking says go, what you value holds you back. The same occurs with your behavior, although you cognitively say the observation has merit, your behavior does not move you to explore, but instead to default to the known and existing, thus you take no action.

A person with high marks in all three categories would respond in the following way. A new observation is made and, in response, would realize that the idea has potential and needs to be explored. Because the value is high, curiosity is heightened and there is no blockage to exploration. Behavior being supportive so actions take place immediately, questions are asked, people are sought out, and the information exploration is propelled forward.

To enhance the cognitive aspect of innovation in the reality phase, explore how you think. Is your thinking one of exploration and new ideas, or one of status quo and safety in proven knowledge? Question yourself until you can articulate why you think about innovation and new ideas as you do. What can you do to choose a different thought pattern?

Evaluate what you truly value. Is stability, safety and avoiding error more valuable to you than a new idea? If so, why? What could potentially help you to value innovation more? This is an emotional response more than a logical one, so dig deep into the “why” of your feelings on this. It may not be fear, but understanding what you value and why you value those things can lead to some great insights and further growth in innovation.

Our behavior is what we actually do, and is often influenced by our cognitive and value, yet it can override them if needed. Do you see yourself as bold and willing to explore openly when you observe a new idea? If not, why? And what might you do differently to change your behavior? Observing but taking no action is an indication of low behavior in regards to innovation.

The most important thing to remember about the reality phase is that this is about mindset, not a locked in behavior or personality trait. It can be changed with effort, and can be made permanent. The more aware of why you do things and why you act the way you do when making new observations can be a great first step in improving your personal as well as your organization’s approach to Innovation.

When a new observation is made, be bold, act on it, pursue it and you can improve your InnovatorMindset score.

For more on the InnovatorMindset® contact CEO Solutions/H. Goerger & Associates Inc. dba AskHG, one of the first to be certified in the nation.


InnovatorMindset® is the property of Dennis Stauffer,

Developing a Culture of Innovation

innovation culture

In our previous blog posts, we have discussed the Innovation Cycle, detect – correct, innovation vs status quo, and improving communication through innovation. Now for the nitty gritty, if you will: how do we create an innovation culture throughout our organizations?

First, let’s reemphasize that the “detect – correct” cycle is important to stability, profitability and security. What we are advocating is making innovation a higher value activity that creates new outcomes, which then become part of our operations and are subsequently managed by “detect – correct”.

As with anything that creates culture within an organization, it is about what is valued most, and what is promoted and reinforced most.

We have all clients who emphasize core values as primary discussion point in hiring, coaching, repositioning and removing. By placing so much emphasis on those values, an organizational culture is created around the core values, which everyone turns to for direction, decision making and behavior expected.

The challenge for many organizations is the emphasis on “detect – correct,” which then becomes the cultural base. People default to the “detect – correct” behavior first because it is the focus of the leadership and thus the culture. This is not a bad thing, yet does it foster a true innovation culture within the organization?

A few questions for you to ponder:

  • How often are employees allowed to experiment with new ideas, techniques or processes?
  • What is the reaction from leadership when a new or different idea or solution is presented?
  • If a department or division began doing something very different, how would the rest of leadership respond?
  • Does your organization allow specific time, resources or support for working on new ideas or experimentation?
  • How often do people from various parts of your organization get together to problem-solve, innovate or challenge the status quo?
  • Does leadership actually walk around among employees for the sole purpose of observation and learning new information?
  • How often does leadership specifically block time for creative thinking or clarity breaks?

Those are a few questions to ponder. If you can give an absolute YES to all of them, you most likely have a highly innovative culture already. On the other hand, if all are a no, you have a huge opportunity to become far more competitive than you are.

At your next Strategic Planning session, pose the above questions and discuss how your leadership might infuse innovation into your organization. Just by opening the discussion, you’ll make a great start on creating an innovation culture.

Want more on InnovatorMindset, Strategic Planning,  and culture development?

Our next post will be on improving our awareness, or Reality Phase.

For more on the InnovatorMindset® contact H. Goerger & Associates Inc. dba AskHG, one of the first to be certified in the nation.  

With peer advisory groups meeting regularly in Minneapolis, St. Cloud and Fargo, CEO Solutions is a valuable business development resource for company leaders, whether experienced in their position or new to the job. Not only do our members learn valuable operational skills, but they also receive peer support that helps them perform at their best.

InnovatorMindset® is the property of Dennis Stauffer,

CEO Solutions Members Make Fast-Growth List

fast growth

Five of CEO Solutions’ member organizations were named to the 2017 Inc. 5000 list of fastest-growing companies, including one in its first year of eligibility. Four of the five companies experiencing this notable fast growth are new, first-generation companies, and all have CEOs under the age of 35.

The highest of the CEO Solutions members on the list is Stoneridge Software, a Barnesville, Minn.-based Microsoft partner that implements Microsoft Dynamics software. According to the InForum, “these products, in turn, help clients modernize their workflow, get access to real-time business intelligence and streamline their operations.”

The company, which was founded just five years ago by three former Microsoft employees, ranked 1,050 overall and 12th in Minnesota after experiencing a 365 percent spike in revenue over the last three years.

The four additional CEO Solutions member organizations on the fast growth list are:

  • Myriad Mobile, based in Fargo, which ranked 1,449 on the list after recording 280 percent growth
  • Laketown Electric, based in Wachovia, which ranked 1,887 after 202 percent growth
  • Thomsen Homes, based in Fargo, which ranked 3,071 after 171 percent growth
  • TrueIT, based in Fargo, which ranked 3,690 after 82 percent growth

As members of the CEO Solutions program, all five of the companies have implemented the EOS Traction management operational system. This simple but effective program focuses on clarity, focus, outcomes, accountability and people growth, creating a basis for profitable, fast growth.

With peer advisory groups meeting regularly in Minneapolis, St. Cloud and Fargo, CEO Solutions is a valuable business development resource for company leaders, whether experienced in their position or new to the job. Not only do our members learn valuable operational skills, but they also receive peer support that helps them perform at their best.

Interested in learning more about CEO Solutions? Attend one of our free executive briefings, to be held on November 1 in St. Cloud and November 15 in Minneapolis. There, you’ll learn about strategies for retaining employees and encouraging growth, with a focus on people and leadership, finance, market and competition.

Get more information and register for the St. Cloud briefing here and the Minneapolis briefing here.