Mailander Podcast

Leverage these three core tenets for enabling your company to level up against the next higher level of competition.

Drawn from the experience of working with a mid-market leader that was successful, had more ceiling with their current business, but for the young CEO, could reach so much higher, this episode reveals three core tenets to competing at a higher level.  

When leveling up to enable your company to play against the big boys, the nature of the competition and how they protect their positions can be awe-striking for the emerging company. 

Three core tenets for for discovering how to level up and compete higher include:

1. Identify the Trophy Sought. You might be in a competition with a player or players whose end goal is quite different than your own. You might be hunting for increased sales, market share, or enterprise value appreciation. They might seek enhancements to their free cash flow or net-after-tax yield.  The different trophies being sought means they play the game in very different ways, and the decisions they will make for getting there will be quite different.  
   
   
2. Domain Expertise. Dominant competitors leverage better financing capabilities. They have well-seasoned executive and middle management teams. They leverage the best lawyers, accountants, tax advisors, and management consultants, all of which are privy to the subtle ways of creating more value and impenetrable positions for their clients. 
   
   
3. Find an Edge. Rarely can a smaller competitor take on a larger competitor in a head-on assault, meaning it is hard to beat an established player at their own game. It is imperative for the smaller player or challenger to find their unique edge – some strategy that creates asymmetric advantage, even if for but a moment – whereby it can exploit a vulnerability of the competitor.  Very often, that edge will root down into the decision-making acumen of the players.  It can be one of the most profound and cost-effective means for leveling up.

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Original Music by Billy Goodrum

Sound CEO decision-making is fundamentally rooted in a willingness to persistently challenge the dominant logic and narrative that runs in your mind. This is my story of getting hit in a blind spot. These moments hurt. They are remembered. This is where some of our greatest learnings can come from.

Mailander learned a hard lesson while building a Silicon Valley technology company. Like many executives on a string of success, the quest is to keep chalking up the wins, all in hope for achieving the beautiful prize in the end, which in the case of a tech company, is most likely its eventual sale to one of the 'big boys’. 

Navigating a corporate spin-out, initial funding, building deep teams across all disciplines, putting the right partners into the company to help it achieve its growth and credibility, all were part of building success upon success. The pieces of the puzzle were coming together. 

Yet, the next round of funding would not close. Something was trapped within a blind spot. In the end, the funding round never happened, and the company was sold. There was no climactic end. 

Red flags for CEOs to look for in anticipating their own blind spots, which by their very nature are extremely difficult to perceive, see, and root out, include: 

• When you are on a run of success, look for what is hiding in the creases or just beyond your vision; and 
• Locking in on one dimension of logic, staying extraordinarily focused on the prize (this is what they tell you to do, isn’t it?), and rationalizing away anything that doesn’t fit within this logic as noise or a distraction. 

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Original Music by Billy Goodrum

Identify the red flags that CEOs can look for in targeting the decision-making of opponents, as well as to overcome in their own decision-making patterns and tendencies through an exploration of how one of the most influential captains of a venerable institution went to stewarding one of the most profitable financial engines on Wall Street to overseeing its demise.

Joe Cassano was CEO of AIG Financial Products for two consecutive periods in its history. During the first period, he turned FP, is it was known on Wall Street, into a financial engine that turned out derivatives on a super-thin slice of financial exposure in the housing finance market. The risk on the instruments was ‘virtually nil’, in the minds of FP executives. Yet, these instruments print money for this subsidiary of the global financial behemoth, AIG. Times were good. Very good. 

In the second period of Cassano’s reign, FP crashed. The market changed. The player’s jockeyed for position, searching for positions of strength during troubled waters, and quite frankly, standing by idly as their brethren drown in a sinking market. What happened?  

In short, Cassano was caught in his blind spot. He had created a perfect engine. When the situational context in which it operated changed, he was caught unaware of new risks emerging. He was resistant to change. He dug in rather than evolve his decision-making to reflect the unfolding realities. The experience illustrates certain ‘red flags’ that other CEOs can observe both to improve their own decision-making, as well as target that of others, including: 

1. Look for CEOs that tamper down dissenting voices in an unreasonable fashion; 
   
   
2. Look for CEOs that have a very tightly constructed ‘algorithm’ for their decision models, as these models and those who rely upon them will have difficulty adapting their decision models to new conditions and variables. Their mental architecture demonstrates a lack of flexibility and responsiveness;
   
   
3. Look for CEOs that are slow-footed, slow to respond to changing situational contexts. For some, shifting conditions represent opportunity, but for the slow-footed, their vulnerabilities will quickly manifest.

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Original Music by Billy Goodrum

The seeds of decision-making success or failure are planted years before we witness the climactic result.  Four common CEO archetypes are at risk of getting their decision wrong when it will matter most. 

There is a myth that there are singular moments of brilliance or failure in CEO decision-making.  It is the climactic high point in the stories we tell and movies we watch. More often than not, it is a myth. The reality is the seeds of poor decision-making are most often planted years before the climactic high point of the story.   

Chris Mailander, author of Judgment: The Art of Momentous Decision-Making (Ironheart Publishing, available on Amazon), describes four CEO archetypes at risk of poor decision-making, and the indicators which tell us why: 

1. The FOMO CEO. This CEO sees their peers achieving great success with their businesses.  They see the phenomenal exit which personally enriches the peer CEO and company shareholders; the successful recapitalization or financing of the company; or the launch of a brilliant new product or service receiving accolades from the public.  The FOMO CEO wants to achieve the same. Most often, however, they have not prepared for the journey. They have constructed decision processes customized to the outcome. Their team is not ready to undertake the path. They have not built out a gameplan and the playbook for getting there. They want to play in the biggest game, but haven’t yet risen to the level of competition it demands.  
   
   
2. The Frustrated CEO.  This CEO expresses frustration with their team. They feel the team, while they have been good at accomplishing successes to date, does not have the capabilities or domain competencies to achieve the next higher level of success.  Below the waterline, what often is going on is that the legacy decision-making process makes the CEO the final arbiter of all or too many decisions.  The team reporting to the CEO have conditioned their contributions to the decision process to cater to the CEO’s own predispositions and tendencies, for better or worse.  To achieve the next higher level of success will require mastering new domains, thinking about problem-solving in new ways, and increasing the capacity of the organization to take on new challenges.  It is the decision process which needs to be redesigned in order to achieve the next higher level of success. 
   
   
3. The Bored CEO.  The bored CEO was most alive when they were shepherding the company through years of challenge. Now that the company is successful, the CEO doesn’t feel that same sense of vitality. They grow board. When they grow bored, they grow distracted, taking on new pursuits and hobbies in search of something that can reignite the feeling of vitality. This CEO needs new challenges which reengage them in the company at a deeper level. 
   
   
4. The Successful CEO. This CEO has been brilliantly successful quarter-over-quarter and year-over-year. They have developed a decision architecture for the company which has been perfected to achieve success and longevity. The challenge emerges when there is a shift in the situational context. The variables in their decision-making change, but their processes do not. It exposes vulnerabilities. These highfliers do make the newspapers, as their climactic downfall causes a splash. They were unprepared.  

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Original Music by Billy Goodrum

Many CEOs believe their strategic success depends on the strength of their product, service, technology, financing, or branding. In reality, however, the most powerful asset available to the CEO in leading a company’s strategic execution is the process by which they make decisions. The process determines the outcome.

A former parliamentarian in the U.S. House of Representations, who would go on later to become a parliamentarian in the U.S. Senate, introduced Mailander to the subtle but profound power of understanding and influencing the path of decision arcs. These paths wind. They ebb and flow in response to pressures and vacuums, the jockeying of the players along the way, and to immutable forces of inertia and momentum. How they are crafted and managed, in the end, determines the outcome. More about the flow of the decision arc can be read in Mailander's article appearing in Big Think on July 13, 2023, entitled “How Curling — that Weird Winter Olympics Sport — Can Help You Make Better Decisions” (https://bigthink.com/smart-skills/curling-help-you-make-better-decisions/). 

To make this a-ha practical for the CEO, identify the most critical imperative for your company over the over the next 12 to 24 months – e.g., buying a company through M&A; finding an exit for liquidity or sale; recapitalizing the business; reorganizing it; achieving greater market share; or sparking organic growth – and then work backwards from that end-point to chart the likely path of the decision arc that will achieve your momentous outcome. 

Chris Mailander, author of Judgment: The Art of Momentous Decision-Making (Ironheart Publishing, available on Amazon), then describes an exercise CEOs can undertake to help reveal what elements must be true and when they must occur in order for you to achieve the critical objective. By doing so, a curated decision-making process can be crafted that heightens the probability of achieving the end-state objective. 

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Original Music by Billy Goodrum

This is the story of a U.S. Navy nuclear submarine commander’s ability to challenge the Soviets when they were at their weakest. He changed the rules of the game.  And won.  He secured asymmetric advantage, but for a moment. It was by targeting the decision-making weaknesses of his Soviet nuclear counterparts for but a moment. The Cold War ended three years after his exploits. 

This is a story pieced together from reviewing thousands of pages of now declassified documents and images from the U.S. Government, including the Department of Defense, Central Intelligence Agency, and U.S. Congress. It reveals how one decision-maker – the commander of the U.S.S. Guardfish – was able to obtain all the secrets of the Soviet Navy at a time when Cold War tensions were at their highest. 

The Soviet Navy had long had submarines that were larger and more powerful than the Americans. In 1985, the Soviets brought to sea a new class of submarines, the Akula. They were much more stealthy.  It was a dramatic advancement. It changed the fundamental nature of submarine warfare.  The Americans, which had long been able to track the Soviet submarines from long distances, now had to get in close. The commander of the U.S.S. Guardfish did just that, getting within 20m of two new Akula submarines, photographing the entirety of their new ships and engineering advancements. 

The lessons for CEOs managing their own undersized, less powerful companies against larger incumbents are many, including: 

• Look for advantage in environments in which there is a strategic shift by a competitor; Intelligence-gathering is key; 
• Look for environments in which decision-makers are forced to operate under significant stress; 
• Target actions when players are at risk of making mistakes in their decision-making;
• Recognize that these moments of opportunity for the weaker player are fleeting;
• Prepare for these moments by preparing your team, advancing quickly up new learning curves, and preparing gameplans, playbooks, and operational processes for critical moments; and 
• Use decision-making as your weapon.  

Chris Mailander, author of Judgment: The Art of Momentous Decision-Making (Ironheart Publishing, available on Amazon) provides several exercises CEOs can use to evaluate their own decision-making within their own situational context, all designed to provoke an a-ha moment.  

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Original Music by Billy Goodrum

Elite CEOs and companies do not shy away from the noise, confusion, and chaos of shifting markets. Instead, they study them. They move their assets and players into place. They place a mark on others, including those less savvy, stuck in their mindset, unable to move, or simply certain they are right, because they always were before. If played well, they emerge even stronger in the end. This is a story of how. 

This is the short story of the long arc of events that led to the 2008 global financial crisis. It begins with warning signs to all about the dangers emerging in the subprime housing market. In 2005, many tried to get their last deals in, make their money, and then run. Others, like Goldman Sachs, began to offload their positions, pushing the risks onto others. In 2007, Goldman Sachs placed the first ever collateral call received by AIG Financial Products on the derivatives it had written for a very select slice of the subprime housing instruments. It was a shock. AIG FP executives were stuck, certain of their positions, fighting against the critics. The reality was that path to the end was already caste.  Fourteen months later, a taxpayer financed bailout became necessary to prevent AIG’s slide into the abyss, taking the entire financial system and the global economy with it.  Something happened in 2005 that manifest to the world at large in 2008, and perhaps not until 2010, when investigators released their comprehensive findings as to the causes and contributors to what became the greatest economic calamity since the Great Depression.  

Within these events, a number of lessons emerge for CEOs navigating critical moments of decision-making, including: 

• Studying the long arcs of systemic change; 
• Finding marks which can be placed amongst the competition for which players will rise and which will fall as the decision arc navigates its winding course towards an end, which in this case was a taxpayer financed bailout; 
• Understanding how the intangible of fear within the mind of the markets or public accelerates pacing of the decision arc, increases pressures on decision-makers, and allows irrational behaviors to become normalized; and 
• If you are the slow player, unable to change how you perceive and react to the unfolding shifting conditions, you risk becoming the mark.  

Chris Mailander, author of Judgment: The Art of Momentous Decision-Making (Ironheart Publishing, available on Amazon), provides several exercises CEOs can use to evaluate their own decision-making within their own situational context, all designed to provoke an a-ha moment. 

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https://www.podcast.chrismailander.com/
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Original Music by Billy Goodrum