Plans are pointless unless they include direct action to reach the end goal

Leaders are often referred to as the visionaries in a business, and many of us who fall into that category following a career of growing and evolving an organization recognize that vision separates a leader from a manager.

Vision is that end goal, what the leader is reaching for, why he or she pumps so many hours, resources and a lifetime of hard work into a business.

But there’s more to leading a successful enterprise than having vision. What some leaders lack — and what differentiates effective leaders from the pack — is the ability to execute.

Without execution, there’s no momentum.

The best plans are pointless unless they include direct action steps to reach the end goal. The best people in an organization will fail if not given direction and a path toward success. The best operation will falter if there is no process for “getting it done,” whatever that “it” is at your business.

Lack of execution causes disappointment and a weak culture. It causes good people to leave companies. Execution is the engine that propels successful organizations. Without it, no business or star employee or leader, for that matter, is going anywhere.

Execution is a discipline. Execution requires systematically asking the tough questions: Who? What? When? Where? Why? How? It requires self-reflection and analysis of the business operations. Execution is not about tactics; it’s about understanding every angle of a situation so a process can be created that instills accountability and assures quality.

Execution falls on the business owner. A leader simply cannot outsource or delegate execution, no matter the size of the business. As we said, execution is not tactics; it’s more strategic. Execution is born from the owner, and the direction must come from the top. Execution involves running people, strategy and operations. No one else can do this job.

Execution is a core value. Execution must be ingrained in the way a company operates. Execution is “getting it done,” and that momentum and direction start at the top and seep down and saturate the culture. Execution closes gaps; the practice raises standards.

So the simple question about execution is, How do you do it? The answer begins by breaking down execution into three steps — addressing who, where and how. Who in your organization will execute the process or strategy? Where do you want to go as an organization — what’s the strategy? How will you get there; what operational processes are necessary to achieve the goal?

Execution takes practice. We’ll mess it up before we get it right. Poor execution will cost us talent and a competitive edge. But by tuning in to our business process — how we get things done — and really digging in to analyze whether execution is effective in our organizations, we can address weaknesses and improve.

After all, life and business are about constant improvement — reflection, analysis, strategy and the hard work of getting it done.

Umberto P. Fedeli is president and CEO at The Fedeli Group

Take a proactive approach to life, and you’ll feel more in control

There are many aspects of the life of an executive. For example, we may be successful in business but strain our personal relationships. And if we don’t pay attention to our health, how will we be at the top of our game? We have to work on balancing the seven aspects of our life (family, personal, health, financial, career, spiritual and fun/happy) to be a peak performer.

If one aspect is off balance, it will affect our business. Here are three practices that can help you maintain that critical sense of balance.

Commitment to lifelong learning. Continuously learning about life is the discipline that resonates most with me. This includes learning about your profession, your community, your industry, your business and the people you do business with (what’s important to them, and their problems and concerns). It is a lifelong commitment to learning and improvement, and it takes a desire to constantly learn and improve. 

Learning is a process, but it’s about making the commitment to continuously learn. This includes staying motivated, reading, going to lectures, being proactive instead of reactive and taking leadership roles where we are taking the initiative, so we’re not always just responding. 

Playing to our strengths. Rational targeting is identifying what we do well, what is needed and how those two intersect. Where are the needs? If we do A, B and C well, and there is a need for A, B and C, we are playing to our strengths. If we do X well but Y is needed, then we are not playing to our strengths. We have to be intellectually honest about our strengths. Spend time with people you know and ask them for their review. 

A concept called relationship mapping was suggested to me by my good friend and adviser, Lou Primozic. Where are our relationships strong? As we look at this, look at the concept of rational targeting and where the need is. Play to your strengths, where you do well and where you have potential relationships. And connect this with where there is a need. 

Success is a process. Take what happened, the good and the bad, and be intellectually honest. See things the way they are, not the way we want to see them, and learn. What happened? What could have been better? How do we avoid this in the future? What are the lessons learned so that we can move on? All of us have good luck and bad luck, but it’s not so much what happens to us; it’s more about what we do with what happens. 

Good luck or bad luck doesn’t last forever. If people are consistently lucky, they are doing something right. If they are consistently unlucky, perhaps something needs to be changed. We have to take responsibility, not blame, and be accountable. It’s easy to blame others or situations, but instead, take ownership and move forward.

Umberto P. Fedeli is president and CEO at The Fedeli Group


Government, business leaders could learn a lot from each other

When public and private sectors are strong and business and government leaders work together, society as a whole benefits. What happens in the business sector directly impacts the economy and individual access to wealth and success. At the same time, government actions influence the private sector’s ability to create jobs, provide benefits and compete in a world market. The private and public sectors are part of the whole economy. 

Too many times, however, we act like it’s us vs. them. 

Business leaders can learn lessons from public officials and politicians at the local, state and national levels. Quite often, I have an opportunity to share business insights with political leaders who are interested in learning how a particular legislative move might impact the business community. This is big-picture thinking. This is acting as a public servant and working for the people. In that spirit, here are three lessons that the government can learn from business to create a stronger society. 


Collaborate with others to make a bigger impact. We do not operate in a vacuum; our lives are not separated into silos for family, business, investments, faith, community and so on. How can we connect the dots? By asking this question before we take action, we will be more effective leaders. How can we help each other create jobs? How can we boost the economy? How can we create more opportunities for vendors, suppliers, clients, friends and neighbors? How can we help others generate more profit and do more good? When businesses thrive, they pay more taxes, which benefits the government, which, in turn, benefits the people. One success leads to another. 

Consider the stakeholders

How will the decisions you make impact the people who matter most to you in life? How will they affect your family, your employees, your vendors, your clients or your community? Slow down and consider the potential outcome of your actions. Who are you helping? Who might you unintentionally hurt? Who will benefit? How can we all improve? 

Follow consistent leaders

There are lots of talking heads in politics and in business. There are public officials who deliver party lines and sound bites. They have a self-serving agenda. 

The same is true in business. There are CEOs who are so engulfed in their successes that they forget how they got where they are, or what their purpose is. They ride the tide of what’s popular rather than having tough conversations. They don’t want to lose their office, the public’s vote, a big client, or whatever. They may be polished, but they are not consistent. They are not in touch with their stakeholders. 

Successful leaders know what they are doing and where they are going. Their values and ethics do not change to please a voter or client. When we are honest and consistent, when we know where we’re going and what we’re doing, we get more done. We help others.

Umberto P. Fedeli is president and CEO at The Fedeli Group

If you want something, you first have to give something

Sometimes when speaking on the power of relationships, I bring along some candy. Offering sweet treats elicits a lesson I want to impart on my audience — whether it’s 600 financial executives at a professional development seminar, a group of clients at EY or a sales and marketing executives forum. It’s the law of reciprocity.

Simply put, if you want something, you have to give something. If you want a friend, you need to be a friend. If you want success, you need to help others become successful. As soon as you give away what you ultimately want, you’ll get it back yourself.

At The Fedeli Group, we follow that philosophy closely. Years ago, I heard the grandson of Nordstrom’s founder discuss how they took back merchandise at any time, no questions asked. Sure, some people abused the policy, but Nordstrom didn’t change.

“We’re not going to mistreat the 90 percent of the people who appreciate what we do because of the 10 percent who don’t,” he told me.

Do unto others

How true, I thought. Some people will take advantage of the law of reciprocity, but that doesn’t mean you should treat people poorly because of those exceptions.

It all comes down to a cultural belief. Culture is the most important ingredient of success. With the right culture in place, you’re able to effectively set your success strategy.

Nothing is more important than relationships in our organization — whether it’s with clients, associates, strategic partners or the community. In business, the most critical relationship is with your associates. In most businesses, successes and failures center on people, so it’s imperative to have the right people in the right positions.

Next, focus on engagement. If associates are engaged, they are much more apt to buy into your mission, which increases the chance of success. After all, the biggest indicator of happy clients is happy associates.

So how do you engage clients? We engage by building relationships. We ask ourselves how we can help our clients solve their problems, no matter what they are. You don’t need to give your clients all the answers, you simply need to know how to help them find the answers. Providing that type of value equates to happy clients and a greater chance of success.

But it’s important to keep in mind that a critical component is going from success to significance.

Realize what life is about

Life is truly about making meaningful contributions.

The bottom line is that building and sustaining a successful relationship means that you go above and beyond — do more than is expected. If you say you’ll call back in a week and call back in three, you’ll fail. But if you promise to call in a month and call three weeks later, you will exceed expectations.

And, when you learn how to effectively manage expectations — under promise and over deliver — you will realize the sweetest treat of all.

Umberto P. Fedeli is president and CEO at The Fedeli Group

We all get to make our own choices

By nature, I am not a balanced person — by human nature, most of us are not balanced. If left to my own devices, I’d work around the clock, eat candy, work some more, enjoy some of my mom’s homemade pizza and then work even more. You get the idea.

Balance is a choice. Some days, I do better at achieving it than others.

Here are some tools I put into practice in my life to help me make better choices to lead a more balanced, fulfilling life:

I write down my goals. I put pen to paper and maintain a running list. That document of goals and objectives is not fancy. It includes notes I write to myself. But my thoughts are organized and getting them on paper ensures that I more closely examine my ideas and my aspirations — what I want to accomplish in a day, a week, a lifetime.

This is how I organize my goals. I create major categories — business, family, faith, investing, etc. I take time to really think about how I’d like to improve in those categories. What do I want to learn? What skills do I want to develop? Who can I connect with to learn more? What connections can I make for others?

Then I take my large categories and create specific sub-categories. For example, I break “business” down into sections such as marketing, HR, management and so on. I do this for every major category.

Then comes the next integral step: I connect the dots between those categories to figure out how I can leverage the lessons I’ve learned in one area to apply in another facet of my life to avoid mistakes in those.

What business lessons have I learned that I can apply to my investments? What faith lessons can I apply to my business? How can the lesson I learned at home with family change the way I act in a business, investment or community setting?

Our lives are one big picture — each of these pieces-parts fits into the whole. When we look at the whole and make choices about how we spend our time, we can achieve better balance.

How am I doing? Well, I work very hard at avoiding that candy jar. I exercise every morning, walking on the treadmill. While I do this, I might read on my tablet or have a phone conversation. I go to mass every morning at 6:30 a.m. and pause for reflection, say thank you and consider what I can do to improve. I fall short. But I’m there every day, working on balance.

Will I ever find balance? I don’t know. But I do know I work very hard every single day. Balance is a choice.

Umberto P. Fedeli is president and CEO at The Fedeli Group

Be strategic and force the competition to respond to you

When competing in business, you need to choose your “angle,” so to speak.

Do you offer the most value at the best price in the market? Are you the most innovative, or are you known as cutting edge? Is your customer service so superior to competitors that no matter the price, you beat out the competition because people simply enjoy doing business with you?

Regardless of the way you in the compete market, smart businesses are always on the move, always finding better ways to connect with people and to offer their product and service. During a midterm state of the agency address to The Fedeli Group a while back, I provided the latest numbers and other key business information to employees.

These meetings give us an opportunity to reflect on where we are strong, and identify where we can improve and move the needle the rest of the year. I quoted Warren Buffet, who in a 50th anniversary report, warned businesses of the ABCs: arrogance, bureaucracy and complacency. These will destroy a business.

And, these ABCs apply to your personal life, as well. If you are arrogant in business, you’ll have the same problems in life. If you cheat in business, you’re cheating in life. Figure out who you are and where you want to go.

What strategic way will you compete in the market? Play to your strengths. And by focusing on what you’re good at, you’ll force the competition to play to your strengths, rather than vice versa. You’ll make them compete where you are strong, whether that’s price/value, innovation or customer service.

Best price, best value, low cost
Consider Costco’s business model. By providing customers with the best value and lowest cost in the market, the company has won loyal business from people who seek just that. Costco isn’t trying to be trendy or innovative. The company knows its customer service must be up to par, but this is not Nordstrom. Its business angle is value, and consumers can gain access to that value by becoming members of Costco. The business knows its strength and plays to it.

This is Apple. Customers will pay more for an Apple product than competing technology because of the company’s strategic edge as an innovator in the market. Apple is innovation.

Customer service
Nordstrom’s premiere customer service gives every shopper a personal experience. The store’s employees go above and beyond to please customers. Every customer is important — every shopper gets special touches that make buying clothing, shoes or other merchandise at this retailer a pleasure.

Are there people who take advantage of the overly accommodating customer service Nordstrom provides? Of course. But Nordstrom will not stop doing what’s right for customers because of that 10 percent that do wrong. The business knows that 90 percent of its shoppers really appreciate what the store has to offer and choose it over others because of the experience they get.

Umberto P. Fedeli is president and CEO at The Fedeli Group.

Enjoy the good times — or mourn your failures — then get back to work

Former Miami Dolphins Coach Don Shula won the most games in NFL history — 328. He had a natural ability to lead and motivate others by identifying players’ talents and honing those skills to beat the competition. He played to his people’s strengths, a philosophy which helped him win two Super Bowls and guide his 1972 team to the only perfect season in NFL history.

Coach Shula had a 24-hour rule. The team had 24 hours to celebrate victory or to mourn defeat. For 24 hours, players could ride the high of a win and swap stories about the greatest plays. For 24 hours, players could lament a loss and be in a funk. After that, time was up. Everyone had to move on, to prepare for the next game, the next opponent, the next competition, the next goal.

Shula’s 24-hour rule is a good one to follow in business and life. If you sign a big deal or watch your investments soar one day — go ahead and celebrate it for 24 hours. Savor the moment. If you lose a valuable client or have a tough conversation with a friend or family, mourn it for a short while. Then get back to work.

If you let a defeat get you down, you’ll never get back into the ring. If you let a win blow up your ego, you’ll become arrogant and succumb to hubris, in the words of Jim Collins in “How the Mighty Fall” and “Why Some Companies Never Give In.” You’ll become insulated by your successes and focused on entitlement, losing sight of what got you to success to begin with.

If you dwell in a state of celebration or mourning, if you are overtaken by success or failure, you’ll become disconnected from the knowledge, skills and hard work that yields success. You can control the process; you can control how you do your work, who you help. You can’t control what happens tomorrow in China. You can’t control next week’s interest rates. You can’t control war in the Middle East. There are many things in life you can’t control.

You can control your work ethic and how you take care of investors, how you treat your family, how you package your goods, how you provide your services, and how you take care of customers’ problems. Work on the process: the things you have the ability to control and improve.

It’s OK to revel in victory for a short time — like Shula’s 24 hours. It’s perfectly acceptable to be down in the dumps after a loss, but no longer than a day or two. Then take control, work toward improvement, continue learning and find more ways to help others. Avoid getting sucked into the emotion of situations or you will be ineffective in all aspects of life.

Success comes from continual improvement of the process. Celebrate a little, mourn if you must, then proceed with gusto.

Umberto Fedeli is president and CEO at The Fedeli Group

Value investing is not easy

I consider myself a value investor. Though logically simplistic, value investing is challenging because it requires you to be patient. There are five major areas I personally evaluate:

1. This includes such things as price-to-cash flow, intrinsic value and liquidated value. Is free cash flow growing? Is operating cash flow consistent? Is there enough margin of safety?

2. What’s the return on capital and return on equity? It’s hard to have a good investment if for the long term, the company does not have a good return on capital or equity. But you also can’t overpay.

3. What are the management team members like? Are they competent, honest, experienced and effective? Management that aligns its interests with those of the shareholders is best.

4. Companies that grow faster have the ability to obtain more market share and being sizeable may create more value. Sometimes, however, larger organizations don’t always make the best decisions. Ideally, I like to buy stocks where the growth rate is equal or higher than the price-to-earnings ratio. Many refer to this as the price-to-earnings growth ratio.

5. Look at a company’s debt and understand the balance sheet. Companies get in trouble if they have too much leverage and aren’t good stewards of their resources. There are three major types of risk to consider: valuation, leverage and business.

There are four special situations to consider. First, insider buying is a significant indicator. There are many reasons people sell, but one reason people buy. Next, share buybacks. They outperform on average, especially when buying back their stock when it’s inexpensive. They create value when inexpensive and dilute value when expensive.

Third, look for companies that have increased dividends. In some cases large, special dividends can be just as advantageous since shareholders receive a significant return without management or overpaying for shares. Fourth, activism. Are any successful activists involved? On average, they also outperform the market. They can help create value by unlocking value with various strategies and by addressing important issues.

Learning is like money. It compounds. We all have to be committed to lifelong learning, be it in investments, business or whatever. If you have the passion and desire to learn from life experiences and those of others, including both successes and failures, there are enormous amounts of resources available to become an aggressive or enterprising investor.

If you are not willing to invest a significant amount of time and effort to really learn, you should take a more passive or defensive approach to investing.

Achieving a good investment record takes much study and work and is a lot harder than most people think. I wish you good fortune on your journey of learning to become a better investor.

Umberto P. Fedeli is president and CEO at The Fedeli Group

Take time to assess the situation before you offer advice

We all learn from others. We learn by watching the way others lead, the way they conduct business. We learn from their successes — what worked. We learn from their mistakes, or at least we should.

Along those lines, I’m always asking the questions: Who? What? When? Where? Why? How? These are simple questions, but the answers are not always so straightforward. Who is your role model? What response did that business owner have when a customer expressed disappointment? When should I respond in what way? Why is this important? How did these events unfold? How can I make a positive impact?

In many circumstances, there is not a right or wrong way, but rather there are different approaches to reach an end goal. Beyond learning by watching, we also learn and improve by taking criticism from others.

If you are in a position of leadership, you have been given a gift. You are in a unique position to lead by example. You can provide constructive feedback that can help others. And how you offer that insight is nearly as important as what you say.

I’ve found in my career, you can actually say almost anything to give valuable direction, as long as you begin with a softening statement so the recipient of your feedback understands that your insight is coming from a good place. “I mean this with no disrespect …” “You know I care about you …” “You know how much I respect you …”

Direct, offensive language that insults the person you are talking to will get you nowhere. They will not understand your position, and certainly will not agree with it. If you attack them with a demeaning phrase, you’ll spark defense.

“Why would you do something so stupid?” or, “Don’t you know better than to do this?”

Sometimes when I want to help, I begin to offer advice and then I realize that the person who is sharing a circumstance or hashing over a problem with me actually just wants me to listen. I may begin with a softening phrase — but my feedback is not what the other is seeking. My intentions are good, but I mess up. We all do.

Then I back up, reflect on the situation and, again, ask: How could I have done that better? Determine if your advice or your open mind and listening ear is what a confidante truly wants.

And, if you are in the position to provide insight, be constructive in the way you offer advice. Set an example by doing ordinary things in an extraordinary way. Watch others you admire and ask the simple questions — why did they react that way, how did others respond?

We learn by watching others. And we take advice when it is respectfully offered to us as a way to improve. These are lessons about constructive criticism that we can all improve upon in business and life.

When investing becomes too easy, you need to rethink your strategy

There is little doubt that investing can be a challenge. Howard Marks, co-chairman of Oaktree Capital Management, echoes that belief and famously wrote about a conversation he had with the well-known investor Charlie Munger: “(He) once told me something about investing that I keep going back to: ‘It’s not supposed to be easy. Anyone who finds it easy is stupid.’

While it’s pretty simple to achieve average results, Marks notes “it shouldn’t be easy to make superior investments and earn outsized returns.” Everyone wants to make money, but they also want to find ways allowing them to do it without commensurate risk.

People work hard, searching for bargain securities and approaches to give them an edge, thus driving out opportunity for easy money. Securities become more fairly priced. Marks points out that people who think it can be easy overlook substantial nuance and complexity.

Part of one’s ability to succeed is achieving second-level thinking — doing things different and better. Remember, your goal in investing isn’t earning average returns; you want to do better than average. Thus your thinking has to be better than that of others — both more powerful and at a higher level.

First-level thinking is simplistic and superficial, Marks argues, and just about everyone can do it. All the first-level thinker needs is an opinion about the future. First-level thinkers see what’s on the surface, react to it simplistically and buy or sell on the basis of their reactions. Conversely second-level thinking is deep, complex and convoluted. Second-level thinkers double-think (and triple-think) every angle of every situation.

Superior investors know — and buy — when the price of something is lower than it should be. And the price of an investment can only be lower when most people don’t see its merit. If everyone realizes it, they’ll have bought, in which case the price will no longer be low.

Marks says the best buys are usually found in the things most people don’t understand or believe in. The fact that something isn’t widely accepted usually serves a green light to perceptive (and contrary) investors. For Marks, the bottom line on risk is simple: the riskiest thing in the world is the widespread belief that there’s no risk.

The problem that befalls most people is the failure to distinguish between fundamental risk and investment risk. What needs to be remembered is the defining role of price. Regardless of whether the fundamental outlook is negative or positive, the level of investment risk is determined largely by the relationship between the price of an asset and its intrinsic value.

Although counterintuitive, there is no asset so good that it can’t become overpriced and thus risky, and few so bad that there’s no price at which they are a safe buy. Only those who can see this logic can hope to become superior investors.

In the end, according to Marks, there’s only one absolute truth about investing: It isn’t easy.

Umberto P. Fedeli is president and CEO at The Fedeli Group