Family owned and operated businesses have been part of the American fabric and are certainly a tradition alive and well in many parts of the world. Knowledge of merchandise or the skills associated with a particular craft are passed from one generation to the next as the elder generation fosters the younger to ensure continuity and success. While all businesses face obstacles, the family-run business is associated with some unique challenges. According to the Family Firm Institute, in fact, only about a third of family businesses will thrive under the management of the second generation. The challenges outlined here are among some of the major reasons why many family businesses have failed and may fail yet if such issues are not effectively addressed.
The Unshared Dream
So often the main issue that a family business faces is that the business is not the family's dream at all but, instead, belongs to just one family member. For that one member, the business is a dream, a lifelong pursuit, and even a passion. Yet to other family members, the business may merely be a job--and one they may not especially like. When the founder relies upon others to share a vision and work ethic they do not have, this tends to erupt into problems. Sometimes this dilemma can be warded off when the main owner allows other family members authentic ownership of their roles. People tend to care more about their jobs when they feel safe to emotionally invest in their work. A tendency to micromanage is almost always a surefire way to alienate other family members, to prevent them from feeling like true stakeholders.
Next week: Lack of Grooming, Lack of Succession
Every manager has experienced the need to fire an employee, and every business owner has experienced the need to fire a vendor. Most family owned business owners have experienced the desire to fire a family member, and almost everyone who has dealt with an obnoxious customer has experienced the desire to fire that customer. Yet so often we don’t follow through on the evidence provided, nor the instinct that tells us that this person can only bring a caustic relationship to our business. We allow the tension to continue to build, often causing our profits to erode and productivity to be impacted. When is enough, enough? When should you fire that customer and how do you accomplish the task – professionally?
Before you make a final decision, let’s look at a few aspects of your business that might provide some additional perspective. The four “M’s” of parting ways with a customer include:
Mindset is the foundational issue for almost all relationships with people. No, not their mindset, yours! Reflect back in your or your company’s relationship with that specific customer. Have they been treated (serviced) the way you want your company to be known for treating clients? Were they treated the way you personally would like to be treated? Has the client’s issues been clearly heard; or does fear get in the way of your ability to listen to meaning of their explanation, not just the words? Very often it is our mindset, perceiving what the client knows or experiences, which is the actual stumbling block to delivering that WOW service you expound upon.
Mirror implies a reflection, in this case of oneself. Have we trained our employees to provide the best service possible or are they “mirroring” what they see leadership providing? Once our mindset is open to new perspectives, we can take a more honest look at our business. In many situations, our worst customer can be converted to our best customer just by listening and understanding where the customer is coming from and making a necessary change that can bring satisfaction. In a family business, we might find ourselves wanting to fire a family member because of what we “perceive” as their inability to work well with us. Sometimes this leads to our treating a family member with less respect than we do our employees. However, if we stop and listen to them, understand issues from their perspective, we may find a resolution that will bring a greater buy-in and respect on both sides.
Measurement of the cost for parting ways with a customer has to be considered. Is it costing more to keep the customer than to recommend they used someone else? Does the emotion of dealing with the situation impact all aspects of the business because everyone hates coming to work when that family member or customer is around? Caustic people and situations do leave lasting results if not dealt with in a timely and reflective manner. The outcomes of what to address and how to address issues needs to be weighed and measured.
Movement, taking the initiative to take action and make something happen is critical. Once you have checked your mindset and attitude; you have looked at yourself in the mirror and you have moved by making adjustments in the way you manage people in your business; the next step is addressing challenging behaviors. If you still have the employee who just doesn’t want to change, the vendor that still doesn’t deliver the quality you expect, or maybe the problem customer continues to verbally abuse everyone they come into contact with in your business, then this is time to actually take the final step. Fire them, do it professionally, but stop procrastinating. Everyone; employees, family members, and even other customers will thank you for taking action. Once you’ve followed through, you will wonder why it took so long for you to actually do it in the first place!
Entrepreneurs, business owners, leaders, managers need to step back on a regular basis and get back to basics. The temptation when running your own enterprise is to stop doing the foundational elements that made you successful in your business. What are the basics for you? Could they be?
• Marketing: Testing and measuring what is working in your marketing program and what isn’t. Are you guessing as to which marketing programs work and which don’t. One of my clients swore that one of their marketing programs worked and worked well, until we ran the numbers. They were investing about $14,000 per year in this program and got about $6,000 back. Even taking into account lifetime value of the new customers, it was an expense and not an investment. Both revenue and profitability went up when they stopped that marketing program.
• Sales: It is documented that sales people must be trained and retrained on a regular basis to refine their skills and ensure the basic blocking and tackling is being done. What old sales techniques need to be revisited and are there new ones? Selling today is very different than 5 years ago, however some of the basics like communicating with your prospect are foundations which often get forgotten due to bad habits.
• Closing: Are you asking for the close in the sale? I have a client that lost the potential of a big new account because the prospects perception was that they didn’t want it enough. They asked for the close, but not often enough during the final presentation. Their competition asked for the sale more.
• Advertising: Are you running the same old ad that you always do? It works – great, but could it be better. What is your shock and awe with your advertising? Do you get their attention, or are they yawning through the whole process?
Basics are critical. Innovation is critical, yet if the innovation is built on a rocky foundation the whole business may fail before you know it.
Lose a customer and you will spend 6 – 10 times more to replace him than it would have cost you to keep him! Loyal customers represent the lifeblood of business. Is keeping and maintaining loyal customers a high priority for your business? Do you have a well designed ongoing strategy for building an ever increasing number of loyal customers? Is good customer service enough?
Think about this scenario. One business provides average customer service and the other prides itself in its good customer service. However, the first business systematically writes a follow-up letter to its customers inviting them to buy again while the second business, with arguably better customer service, does not. If an individual purchases from both establishments, from where do you think they will most likely make their next purchase?
How does one build loyal customers? – By moving them up the Customer Ladder of Loyalty. Just like a normal ladder, we move up one rung at a time. And, just like a normal ladder, when we step on the first rung we don’t hang around there for a while before doing something. We want to climb up right away or get off the ladder. Conceptually the Customer Ladder of Loyalty looks like this:
“Getting to Raving Fan status is the result of putting your customers first and having exceptonal relationships with them from the beginning.” Says ActionCOACH Ikonomou. Remember “Fan” is short for fanatic. The question for your business is: How can my business create a fanatical following from its customers? What businesses come to mind when you think of companies who have created and successfully implemented strategies on a national scale for creating Raving Fans – Starbucks, Apple, and Toyota? Imagine the impact on your business if you continually add Raving Fans to your customer base!
The last issue addressed 3 aspects of your business. This issue will address 3 additional areas of: Are you working harder than your business, or is your business working harder than you? There are 6 steps to creating a profitable business that works without you having to be there every day:
Each of the six steps builds upon the previous. Here is a high level jet tour of the last 3 of the six steps.
Leverage: creating efficiency = more time for the owner
If you are the typical business owner, you are the hub of a wheel. The spokes are the channels of decision making from all aspects of your business. Get the picture?
In our desire to control our business we have imprisoned ourselves, the owners. Additionally, because we have not implemented written systems to run our business we have become vulnerable to certain key individuals within our organization. These key players are very good at what they do and if they leave the company, the consequences will produce a significant setback for the business.
The answer is to systemize the routine and humanize the exception. Systems should run the business and people should run the systems. The Japanese taught us this hard lesson in the 80s. Systemize your business and you will leverage your capacity as the owner. Until systems run your business, you have a job. You will never be able to extract yourself to work on your business instead of in your business. Lifestyle improvement will remain an unreachable dream.
Team: having the A-Team run your business = structuring for growth
Ask business owners what represents their greatest headache, most will tell you “employees”. You’ve heard it said: “People are a company’s most valuable asset.” That is not true! The right people in the right positions are a company’s most valuable asset. In the book “Good to Great” Jim Collins writes: “Those who build great companies understand that the ultimate throttle on growth for any great company is not markets, or technology, or competition, or products. It is one thing above all others: the ability to get and keep enough of the right people.”
Synergy: a well-oiled business machine = freedom!
This is when 2 + 2 = 5. Too many business owners after experiencing a little success try to expand through duplicating outlets or franchising before they have successfully completed the four previous steps. As they grow, because of insufficient systems and/or the wrong people on their executive team, cracks start to appear in the foundation. So they retreat and go back to when it was only one business location that they can control with their presence. In fact, if the owner carefully built a strong foundation on the four previous steps, the cumulative effect of this smart work will be significant income with time to enjoy it. Congratulations – you now no longer have a job! You are a successful entrepreneur!
Massive Results: diversification through multiplication or acquisition
As a result of what you have learned by taking your business through this process, coupled with the time and money to leverage, you can create multiple steams of income and wealth by multiplying your business concept or acquiring other businesses and taking them through the six steps. Or, you can retire with a lifestyle that is the envy of most.
Janna Hoiberg is a local business owner and business coach with 25+ years of business experience. Forward your business questions to: 719-358-6936 or email to firstname.lastname@example.org
Are you working harder than your business, or is your business working harder than you? If you are working harder than your business, you are among the many self-employed who have succeeded in purchasing a job for themselves! Do you aspire to be an entrepreneur? Then you must figure a way to create a business that works harder than you, so that you can use your spare time to launch other business endeavors or to enjoy the lifestyle that typifies the successful entrepreneur; time with family and time for personal leisure pursuits. So how does one get their business to work harder? Follow these 6 steps to creating a profitable business that works without you having to be there every day:
Each of the six steps builds upon the previous. Here is a high level jet tour of three of the first six steps. The last 3 steps will be covered in the next issue.
Mastery: from chaos to order
Time is our most valuable asset. We can regain lost income, but can never regain lost time. There are four activity categories into which we can invest or waste our time:
1 and 2 are time wasters for the business owner. 3 and 4 are the difference between working in your business and working on your business. 4 is working in what I call the Zone and should represent 80% of your time. Working in the Zone will prevent many of the urgent/important from occurring.
Do you know where your business is financially? What is your breakeven? How about your cash flow – can you predict it? What is your profit position – how accurate and real-time is your information? Is your most valuable tangible asset (your business) increasing or decreasing in value? Is your business consistently delivering your value proposition to the marketplace in such a way as to not just satisfy your customers, but create many raving fans? This is called the WOW factor. And finally, are your business goals aligned with your personal goals so that when your business is working harder than you, you are living your desired lifestyle?
Niche: effectively marketing your USP = predictable cash flow
Discounting your prices in the face of competition is devastating to your bottom line. Let’s, for example, assume that your gross profit margin is 40%. If you discount your prices by 10%, your sales must increase by 33% to maintain the same gross profit dollars! How does one avoid such damaging action? By creatively crafting your marketing around your USP (Unique Selling Proposition)! Done correctly, this will carve a niche in the marketplace that you alone occupy, thus insulating your business from the discounting frenzy produced by a market crowded with competitors.
Look for Part 2 and the balance of the six steps coming in the next issue.
The pinnacle of business accomplishment is Level 5 Entrepreneur! It is at this level where mega wealth is created and with mega wealth comes the opportunity to do mega good.
Rung Level of Entrepreneur Ladder
Self Employed: 1
To operate as a true Level 5 Entrepreneur, we must gain a thorough understanding of corporate structure as a Level 4 Investor - how to structure businesses so that everything works to our advantage.
Advancing to Level 5 Entrepreneur
At Level 5 we are, once again, on a steep learning curve. Don’t let that scare you. If we stop learning we die. To ascend to the level of Entrepreneur, you must succeed with enough business deals at Level 4 to be considered a master. People will then want to invest with you. At that point you will be investing with other people’s money, which will lead you to the last level - that of Entrepreneur.
Big stakes excitement
Level 5 is the most exciting. This is where the true capitalist operates. It is at this level where you make money by raising capital. You are using other people’s money to build paper assets like stocks, franchises, licenses and royalties.
Think of it this way - true entrepreneurs use other people’s money to make money. The larger your reputation for successful entrepreneurship, the larger will be your pool of eager investors. One way to market your skills is to write books on how to succeed in business. This builds your reputation so that when you take companies public, you have a large number of investors jumping on board. This should be part of your strategy.
How did Bill Gates do it?
Consider this: What does Bill Gates, one of the world’s richest men, sell? Does he sell computer software, information, solutions, or systems? In reality, what Bill Gates sells to create his wealth are shares in Microsoft. Level 5 Entrepreneurs build businesses they can take public. This allows them to quickly gain a massive amount of wealth.
You must be a visionary
At Level 5 you are a visionary – a dreamer with a vision. It is often said that all the best ideas start with a simple dream. It is not enough to just dream – we must take action to make our dreams come true. Sell the dream, then work to make it a reality. Always keep your mind focused on what is not currently real but soon will be. Then trust yourself and your team to make it so.
Level 5 capital
Level 5 Entrepreneurs do not have to work for money. They certainly do not trade time for money, and do not rely on profits as their primary source of income. They are interested in Return on Investment (ROI). They make money by raising capital. They create money by adding value.
Share price can be considered the entrepreneurs stock in trade. Their relationship with money is through the stock market. As Entrepreneur, you operate using your finely honed skills and deep economic understanding. When everyone else is in a panic, like today’s market, you remain cool headed because of your understanding of the economic seasons, briefly mentioned in last week’s article.
Turn, Turn, Turn
The Bible talks about this seasonal concept in Ecclesiastes chapter 3 verses 1 – 8 (the Birds put these verses to music in their famous song Turn, Turn, Turn, in 1965, written by Pete Seeger in the 50’s). Understanding the timing of your ventures in relation to the economic seasons is vital to your success and one of the reasons others entrust their money to your vision.
With our current economic turndown, we have once again entered the economic season of winter. For the savvy entrepreneur, winter represents the beginning of the wealth creation cycle. Acquiring or starting businesses near the end of economic winter, at a fraction of the cost of during other seasons, enables the entrepreneur to maximize ROI during the summer in the form of IPO (Initial Public Offering) or acquisition.
Entrepreneurial wealth creation – a tool for good and for maintaining individual freedom
Many who reach the top of the e-ladder become great philanthropists, donating money and brain power to charities, hospitals, children’s organizations, scientific research, and education.
The e-ladder is the foundation of our capitalistic system, which has produced the greatest wealth and lifestyles for the largest percentage of the population than any other system in the history of mankind. How far you choose to climb has nothing to do with your value as a person. It has everything to do with your vision, your gifts, your willingness to work hard, take calculated risks, and to constantly learn. Marc Nuttle, a Norman attorney and advisor to many presidents, in his insightful book “Moment of Truth” clearly delineates how intricately our capitalistic free enterprise system is linked to our personal freedom as individuals. I highly recommend his book.
To maintain our freedom as individuals it is imperative that many exercise this freedom by climbing the entrepreneurial ladder. We climb, first and foremost, to provide for our families, and second, to do good for others. When we climb the e-ladder, we are providing jobs, opportunity, and hope for those who follow!
Like all things in life, running a business has its ups and downs, its highs and lows, and its successes and failures. Celebrating the sweet victories is easy, but how do you cope with the agonies of defeat?
First things first, like it or not, failing is inevitable. Every single person has failed at one time (or in most cases, lots of times). Throughout history scores of renowned great achievers not only failed, but failed over and over again. When Albert Einstein was young, his grades were so poor that a teacher asked him to quit, saying, "Einstein, you will never amount to anything!" Michael Jordan was cut from his high school basketball team for his lack of skill. Winston Churchill failed the 6th grade. Soichiro Honda was turned down for an engineer position with Toyota Motor Corporation.
Here’s another truth: Failure is not something to fear. Failures and mistakes are lessons that can be used as stepping stones. And even though it may feel like it’s the end, it’s actually just the beginning. According to dictionary.com, failing is “an act or instance of failure.” But according to John Maxwell, bestselling author of Failing Forward, “Failure is simply a price we pay to achieve success.”
Failing forward is a willingness to learn from failures and implement the lessons into your actions, behaviors, and business. It’s choosing to pick yourself up and continue to move forward and toward your intended outcome in spite of being discouraged.
Think about the last time you failed and ask yourself these questions:
Now take the answers to these questions and plan how you will incorporate the lessons into your future actions.
So the next time you find yourself flat on your face, be grateful for the learning opportunity, dust yourself off, keep trying, and remember that the most inventive and successful people in the world not only fail, they are the BEST at failing.
Tradition entwines the history, heritage, and reputation for any business, and especially family business. It creates a familiar foundation for generations to establish themselves as economies, markets, and business environments. Tradition sets expectations and creates standards for customers and business owners alike. It also has the potential to differentiate your brand from the competition. When the community recognizes the way you do business as a family tradition, they have an idea of the level of service they can expect from you.
With that said, sometimes tradition can be interpreted as restrictive and a hindrance. This is especially true if you or members of your family business are adverse to change. Tradition is not to be used as a reason or excuse to shun from incorporating innovations and new practices into your business. After all, these changes, difficult as they may seem, are what can give your company the cutting edge.
There is no established timeframe in making a tradition.
Tradition has a positive impact on family business and is essential for success for today and for the future.
The transition from one generation to another can be very seamless and smooth. However it takes education, planning, openness and humility.
As much as possible, do away with the prejudices you have of this next generation about what they can and cannot do. Get rid of family politics. Stop protecting Junior and doing things for him. Let Junior stand on his own two feet or leave the business. There is no shame in not being in the family business. Life is too short to not follow your passion. A message to Junior: Understand that you will change. You may not want to join the business now, but your passions, needs, desires and interests will change as you age. Mom and Dad, Grandpa, and Auntie may start getting smarter and have a better perspective as you get out in the world, work a job and learn the realities of life. Don’t burn your bridges and be unable/unwilling to come back and see the value of that family business. Also, following your passion doesn’t mean sitting on the beach strumming a guitar (nothing against beaches and guitars). It does mean that if you have a passion for medicine and the family business is a furniture store, follow that passion for medicine. Just because your passion was the business doesn’t mean you have to force your passion on everyone else.
“Dad had started to transition out of the business. He was very organized and had a place for everything. The son, the new business owner and leader, had not inherited Dad’s particular gift of organization. He had piles on his desk and on the table. Dad on a few occasions during the transition went through and “cleaned up” the piles and threw out what he believed was unnecessary papers. As you can imagine, that created tension and frustration—on both sides. New rules had to be set up. There were new ways of doing things. It wasn’t better—just different—and Dad had to step back. He needed to be humble, understand new ways and allow the new regime to succeed or make mistakes on their own. It was a reality check for Dad who needed to realize he was no longer in control.”
When a multigenerational family business continues to grow, the owners need to think about how they will manage the transition to the next generation of leadership.
A husband and wife team started a business more than 30 years ago. At one point, they decided to move the business to another city, essentially starting all over again. That was more than 25 years ago, and since that time, their children have grown and also joined them in their endeavors. Currently they are experiencing the third generation, their grandchildren, becoming involved in the family business. These previous entrepreneurs, have become very successful business owners. They provide not only for their own family but also for the families of many employees. They have done so many things extraordinarily well. The fact that the family still enjoys each other’s company, likes to be together, and is encouraging the third generation to become involved is a statement to the nature of the business owners. The challenge for future sustainability is in truly turning over the reins of the business to the second generation. Times have changed, the needs of the family continue to change and what worked 20 years ago doesn’t work in the same way today. They recognize the challenges ahead and I believe are scared about how the transition will take place.
One of the best ways for a family business to move to the next generation of leadership is to prepare for and organize the transition. The parents pick an heir apparent, lay out the organizational structure and spend the next five to 10 years grooming the new team and stepping out of the business a bit more each year. They let the kids start making decisions, knowing and understanding that mistakes will happen. After all, the parents made mistakes, too. They need to allow the kids to learn while providing a safety net of advice.
Here are three challenges to family business transitions:
Giving up Control. I hear you now, “I would be thrilled to give up control of the business.” Yes, you may actually believe it; until one of the new leaders makes a decision you don’t like. I see it all the time (and this happens in all businesses). Leaders give up control until they don’t like the decisions being made, then they step back in and take back control, and the resentment begins. Family members and employees that feel their actions are being second guessed feel the lack of trust in their abilities and often result in an unwillingness to try again.
Fear of the Unknown. Children are often called a perfect blend of their parents, warts and all! The things one doesn’t really care for in the spouse manifest themselves in the kids. One is wild, the other is too conservative. One is visionary, the other wants things to be the same as they have always been. The end result is parents who are afraid everything they have worked toward for the last 30 plus years now has the potential of being destroyed; maybe even going out of business but for sure changing. This fear can hold the business back and stunt its potential. Fear can also be well-founded, however, if the parents feel the children do not have the skills to run a business then a plan must be put in place to enable them to learn to run the business or provide someone else to lead and move the business forward.
Selecting someone other than a family member can often be a relief to the next generation who isn’t skilled or perhaps doesn’t want the responsibility of running the family business. And that is okay. Not everyone is gifted at risk taking and the responsibilities that come with business ownership. Their specific skills may be much greater in other areas where they can be high achievers.
Failing to move forward: Business is good, life is busy and the succession plans are ignore, there's plenty of time to get back to it. The wills may be completed and the estate planning has been taken care of, but not much else in the business has been addressed, then disaster strikes. Why is it that death seems to be the one thing that everyone runs from? I won’t answer that here as many books have been written on this topic. The more we plan for the eventual results of life, the more we can relax and enjoy ourselves. Stop playing God and being afraid of death. Know that death will come and your job—yes, your JOB—is to make sure the next generation is adequately prepared. That means helping them learn how to make decisions. Let them disagree with you and then you provide them wise counsel, but let them make the final decision and live with the result. Let them learn how to fall, pick themselves up and fall all over again. Don't be a reactionary, let things run their course. Read John Maxwell’s Failing Forward; it will change your perspective on failure. If they can’t run the business while you are around, what is there to make you believe they will do a better job when you are dead?
Give your family the best leadership of all and learn to let go.
The most significant challenges with running a family business arise due to the relationships within families. With a regular job, you can leave work at the office with no worries about bringing the job home. However, when your co-workers live under the same roof, or are related to you, work and family issues can become intertwined. Your childhood relationships with siblings, parental interactions, self-image, generational thought processes all affect relationships in a family business.
Some of these challenges include:
There are lots of challenging issues when working in the family business such as divorce, health challenges, financial stability just to name a few. Rather than ignore the possibilities of such things happening, it’s best to create a scenario and then a contingency plan should something arise. Protect your business, but don’t forget to protect the family as well.
Transition timing can be very stressful. How long will it take to transition parents out of the business? It seldom happens overnight (unless by death or divorce). Yet the multi-year transition can be enough to kill the business, the relationships or both.
The challenges include:
Customers. Do customers always want to work with Dad, since he gives them a long-term customer discount that Junior won’t? Do they like the way Mom runs the business and always ask for her, making it hard to establish a level of leadership?
Boundaries. So who really is in charge? Daughter? Mom? Dad? All of the above? Who makes the decisions during the transition time? Create a plan that lays out the transition. Is this a six-month, 12-month or two-year plan? You may have to revise the plan at some point. Do not just go with the flow. It might work out, but there is a great chance that it might not. Hoping things will go well doesn’t work. Hoping no one will get their feelings hurt doesn’t happen. Not making a plan puts you on a path to having issues.
“But we have always done it this way.” That statement has been heard around the world in businesses of all sizes. Family business owners do not have the corner on this market. It does take on a new twist when changes need to take place to keep up with the times, the skills of the next generation or just market changes. One of my favorite books is If It Ain’t Broke, Break It by Robert Kriegel and Louis Patler. Their concept is to examine conventional business wisdom and to break those rules in order to gain a competitive advantage. This book was written in the ’90s but much of it still applies today. When something is working, you need to analyze why it is working and what can be done to improve how it is working. In other words, what can be done to make things work better? Football for many years was solely a running game. Even after the forward pass was legalized, it remained a running game until a coach decided to have his team try throwing the ball. Everyone was shocked and critical. Yet, today football is very much a throwing game; just look at what quarterbacks get paid for their throwing ability!
A Mom and Dad are now in their 70s. They are still active in the business, yet the reality is they need to be stepping back and delegating more control and decisions to the three children in the business. The three kids have been a part of the business for multiple years so they know how it works and how to provide the service and deliver the product. Sounds like a great scenario, right? Well, that depends.
So often the product and service areas are running smoothly, yet the next generation doesn’t have a great grasp of the business portion.
Financials: How do you read those financials? Why is the overhead rate so important and how does that relate to cost of goods sold and profitability? Who is our banker and why is that relationship so important? How does the profitability trend? If seasonal, what is it per season? Business is math, marketing is math, team is math, sales is math, so why wouldn’t financials be math? If you don’t like math, then find someone who does and can translate it to what you can understand. As the transition begins, understanding the numbers becomes more critical than anything else. High profitability can cover up many sins, but good math can weed them out and increase profitability even more.
Management of the team: How does Mom stimulate, encourage and manage the team? Will the team be ready, willing and able to work for the next generation? Does the next generation have the leadership skills in place to be wise beyond their years? It takes five components to ensure you have the team you want:
Vision: Who will now carry the vision for the business? Who will take the trends affecting the business and start to make plans now to make the necessary course adjustments? Who balances the visionary to keep a level of reality in place? One business I worked with had an environment where the husband was the visionary. He always had new ideas, new thoughts, new opportunities that he wanted to follow. The wife was more of the money manager and brought a dose of reality to the business. She is the one who asked the hard questions regarding return on investment, the downside to an idea, etc. That is a valuable role to have in any company. However, that must be moderated with the vision that sometimes can’t be seen by anyone else. Too much caution allows opportunities to pass and therefore be missed.
My parents had one such opportunity. Dad was offered the opportunity to get in on the ground floor of a development that was taking place in the area where they lived. At the time, the area was essentially in the middle of nowhere. Actually it was in between somewhere big and somewhere else that was growing. The place in between was a risk. The cows that lived in that field were pretty content. Now today that area is a bustling, vibrant area. Dad always said that was the one that got away. This isn’t to blame Mom; she always provided that caution, yet usually went with the visionary.
The next generation needs to have the visionary and the realist. There must be compromise between the two. One without the other can run the business into the ground. The visionary without the realist who asks the hard questions creates a business that follows every new trend. Not all trends are good. The realist is usually so cautious that they never get on the upswing of the bell curve. They are the late adopters and implement something after it is mainstream, passing up the opportunity to gain a competitive edge. It is sort of like installing a fax machine in 1995 when email was becoming the predominant tool. The fax machine was leading-edge back in the 1970s and was going out of style by the time the 90s rolled around.
George loved his business. He had attended school for many years to become a good doctor, was good at medicine and followed in his family footsteps. After a number of years of hiring out the administration part of his practice, he and his wife, Katie, decided to have her become involved in the operation. She was good at working with patients, completing the administrative tasks and helping in all the ways possible. Both George and Katie were busy all day long and didn’t take time during the day to discuss business matters.
As all business owners know, it is the little things that can be the difference between peace and frustration in the daily life of business. Yet it is the little things that often don’t get addressed until they are no longer little things.
Katie wanted to start regular weekly meetings with George to discuss the business and often tried to have these discussions once they both arrived at home. George, however, did a great job (better than most) of leaving business at the office once he walked out the door. Katie figured, what better time than during the evening after dinner when the kids were doing their homework or engaging in other activities to have the office discussions. The result was friction as they both dug in their heels.
Fortunately for them, after a few months of back-and-forth discussion, they came to an agreement to go out to lunch every other week, just the two of them, to discuss business. This allowed George and Katie to address business issues during the day and enabled them to grow their business.
Boundaries are probably the most important aspect of running a successful family business without destroying relationships. It doesn’t ensure one or both parties won’t overstep the boundaries, but at least they are drawn. Boundaries are required in many areas, including between home and work, among roles within the business and between family members and employees.
She is very controlling. He is always talking. She is slow to take action. He is quite a perfectionist. Are those words descriptors of you, your family members or your spouse? I know I recognize myself in at least two of those phrases. The challenge is not only our behavior, but the behavior of others. We need to understand the value of each other’s strengths and capitalize on them, not focus on the negative. Let’s look at different types of “behavior”.
She is so controlling – yet the value she brings is the ability to makes decisions quickly, achieves goals, continue to be highly productive, a great leader, risk taker, and is usually efficient and structured. Now that doesn’t sound so bad and could be these are tendencies that are needed in this business.
He is always talking to people which impacts productivity. However he is also spontaneous and loves a crowd around him, seeks out participation from others, is great at motivating the team, keeps everyone laughing, is easy to get to know and will try anything. Who wouldn’t want to be around him?
She is slow to take action and hard to adapt to new environments. However, she is also relaxed, accepting, a great listener, a fantastic team member, is great at follow up, friendly, compatible and sees the details that others don’t see which keeps us out of trouble.
He is such a perfectionist – it has to be exactly right. Yet, if I want something done right, he is the one to complete the task. He is accurate, systematized, structured, a good planner, and focuses on quality more than anyone on the team.
What one considers a benefit, another considers irritating. Think through the personalities on your team and refocus on looking at their irritating habits as strengths to appreciate!
The psychology of denial is interesting. Webster’s defines it as: a condition, in which someone will not admit that something sad, painful, etc., is true or real.
Yet, that is a state that many live in daily. They essentially lie to themselves on a regular basis and that lie becomes the truth. Where are you lying to yourself in your business?
Each of the above items and your Excuses (which are dressed up reasons) are part of your own denial. You don’t want anyone else to notice that you are lying – and lying to others – but mostly to yourself.
As the end of the first quarter of this year approaches, it might be a good time to ask yourself these questions and contemplate on where you are suffering from Denial and what do you need to change personally and in your business today!
Attitude is all about how you look at things. I recently took a trip to New Orleans flying through Houston. The Polar Vortex that has been hitting the US made for cancelled flights and a one day delay in actually making the trip. Then upon my arrival in Houston my connecting flight was cancelled. Rather than waiting around hoping to make it on another flight (the standby list was over 200), I chose to drive. The situations on that drive will generate some good stories during my speaking event!
That drive and the resulting situations (i.e., getting pulled over, having the road closed for 125 miles and getting detoured twice etc.) could have made for a very unhappy person who was grouchy, blaming the airlines, mad at the world and generally miserable. What I chose was the pure joy of having 6 hours to myself in a part of the country I haven’t driven before and the peacefulness of my thoughts (when I wasn’t singing at the top of my lungs to a favorite song).
The event that happened was the cancelled flight, my response was – ok now what happens. My actions created the outcome; “this is a journey and who knows where it will take me”. My response could have been much different and the outcome could have ruined the whole conference for me.
My questions to you:
I have learned that one great joy is to take a bad situation and NOT take it out on others. I love watching them respond when they expect you to yell and get mad. I love putting joy into their day of not having an irate customer in front of them. Now this doesn’t mean I allow them to walk on me, or am a push over (those who know me probably haven’t even dreamed of that situation.) You would be amazed at how often I then get told: Thank you for being so understanding. Thank you for your attitude.
How do YOU respond? Do YOU need to change your response to life, business, and personal situations which not only change your world – but those around you?
Make Yourself Memorable
As business owners, we often interact with a lot of different people on a daily basis. Whether we connect through networking groups, meet-and-greets, vendor shows, or social media, there are a whole lot of names and a whole lot of faces that we may encounter and vice versa. And if you’re having a hard time keeping track of who’s who and what they do, then there is a good chance that they might be having a hard time remembering who you are too. No matter how many business cards you pass out, if people don't remember you well, they probably won't be calling you to follow up or keep you in mind for possible referrals.
Here are some ways to make yourself memorable:
So the next time you are getting ready to make a good FIRST impression, also remember to make yourself memorable leave a LASTING impression.
It is Monday. The week is ahead and rather than joy and opportunity too many see dread, frustration and a long week that they would prefer to avoid. Why is Monday so hard? Do you have too much fun on the weekends and too little fun during the week? How do we take that dread out of Sunday night and Monday and totally change our perspective on the week? It is hard, however without changing that perspective you will have over 2500 days (50 days a year working for 50 years) in your life that you don’t enjoy and would rather avoid. Pretty sad and filled with missed opportunities.
Here is the reality:
It is your mindset, how you look at the week’s opportunities and how you have planned out the week. Monday’s that I resist are the ones I haven’t planned. Mondays that are hard are the ones that I haven’t determined my passion for that week, nor determined how accomplishing the plan takes me one more step closer to my goal.
One of my clients last year challenged me with his lack of passion. He was tired, not enjoying his job, not feeling motivated. That lack of passion was reflected in everything he did. His time management, sales goals and interactions with fellow employees and management were all missing the mark. Our conversation focused on 3 points:
Try these simple steps and Mondayitis may not be quite so bad – if your attitude is more positive and you stop allowing yourself the permission to have Mondayitis. Let me know how it works and have an awesome week!
The critical impact of attitude is seen every day in the business world. What one business owner sees as a disaster, another sees as opportunity and capitalizes on that opportunity. Those who have spent their lives in below the line thinking don’t even realize the impact it has not only on them personally, but their families, businesses, customers and potential. If their team is below the line, where did they learn it from? Most likely they learned it from the business owner. An owner who is below the line will hire staff who also first turn to blame, excuses and denial. It is someone else’s fault that the project is delivered late, someone else’s fault that the customer is upset. To change they will need someone to hold them accountable to point out where they are below the line.
As I work with clients on this concept, the tendency is to swing to a point where issues in the business are not discussed with the excuse (notice the tendency again) that the issue is below the line. This doesn’t give permission for a business to white wash issues in the business. What is does change is the ownership and responsibility for changing the issue at hand. If projects are late, that is a fact. The question is what must change in the business to ensure projects are not delivered late, that your customers have the experience stated in all the promotional material.
Businesses have lived for years in below the line thinking and attitude. They stay in business, they grow, and they pay the bills and serve customers. What impact would the business make with an above the line attitude? Profits would increase. Less time would be spent on blame and poor productivity. Productivity would increase with energy due to the positive atmosphere in the business. The examples abound.
Yet, you must be ready to make the change. Your dissatisfaction with the results, profitability, long work hours, people avoiding you since they dislike being around negative, blaming people, etc., must be at a point where it is higher than your resistance to making the change. It is easy to live below the line. It may not be fun, but it is easy and there is a great deal of company. When I ask my clients do they want to be average, the resounding answer is NO. They want to be above average. To make that happen, your mindset must change to one of excellence—above the line thinking— and you will be amazed at the results.
Let’s start with a story.
Two business owners are in the same market, offer essentially the same products, target mutual markets, and yet at year end, produce very different results. One business is doing well, another is doing poorly. One business owner seems on top of their game, another isn’t succeeding. One business is growing, the other business is barely scraping by and the owner is beginning to wonder whether it is either time to sell, or maybe, just shut the doors.
What is the difference between the two businesses? There can be any number of factors to consider. Perhaps the owners differ in the amount of knowledge and skills they have for running a business; there may be a difference in the systems which have been put into place, or maybe they are missing all together. Consider the team that drives the business forward, how pricing is determined, marketing is presented, and how sales are made. Many factors play into the success and growth of a business. Yet, there is one characteristic that creates the largest differentiator between the two business environments. That is the mindset of the owner and/or leadership. How do they view, what is their perspective on every situation, every economic obstacle, every customer, and perhaps on life in general? The attitude of leadership sets the tone for the environment of the business.
Is there a pervasive attitude similar to Eeyore’s, Winnie-the-Pooh’s donkey friend? In this type of environment the we get below the line thinking which produces a string of blame, excuses, and denial manifested in the “woe is me” life is hard, this is what happened, I don’t get the same opportunities as others, the economy is really hurting, etc. In below the line thinking we often hear people blaming someone else, producing excuses for why things didn’t get accomplished, and denial that their attitude is a main source of the issues at hand. Below the line thinking creates a reason for everything and generates a need to be explained.
On the other hand, the attitude that propels above the line thinking is more like Pooh’s friends Kanga or Owl. Above the line thinking accepts ownership, accountability and responsibility for everything they do. They understand what they cannot control (economy, taxes, etc.) is only 10% of life; but what they have great control over is 90% of their life. This is what the author Stephen Covey, author of The Seven Habits of Highly Effective People, calls the 90/10 rule. How your day goes is totally up to you, as is how you react to situations and what opportunities you achieved even through disastrous times. Steve Jobs got fired from Apple which most likely was not what he called the best day of his life, yet without being fired from Apple he would not have created Pixar and NeXT which are part of the foundation of the Apple products we love today. Above the line thinking creates results. Results don’t require explanations, they speak for themselves.
The concept of goal setting seems to have at least 2 camps; one that perceives value, the other that questions the value. I was meeting with a friend recently and asked them about their own goal setting perspectives. He indicated he had never set goals and had been successful, so he didn’t see the value. However, he did make plans and followed through regularly on his plans. In reality it boiled down to semantics; his plans were nothing different than goals. The word was different, the end result the same.
Both provided a roadmap that needed to be executed. Both required the individual to sit down and evaluate what had been accomplished and what was needed to move forward.
Another word that seems to stimulate some and repel others is resolution. What do you think about the typical New Year’s Resolution – does it work or is it a feeble attempt to make yourself feel good – for about 10 days before your “resolve” deteriorates.
Most goals, plans and resolutions fail because of the lack of commitment, determination and accountability. They also fail in the true emotion of WHY you are doing them. If there isn’t a compelling reason, purpose, why – or whatever word you want to use – it won’t happen. The Why is actually more important than the actual goal or plan. The Why is what motivates you to make it happen no matter what. The Why is at the heart of the difference between success and failure. What is your WHY? If you don’t have a clearly defined Why – I suspect you will have a very hard time achieving what you set out to accomplish.
Now, I will also challenge those who don’t attempt to set goals, yet perceive that they have done fine without them. Here is the challenge: “How much better could you have done by setting goals, creating a plan, or making that resolution?” Sure you have done well, achieved much, are financially secure. Awesome, congratulations – great job! Yet, what would 5% or 10% more mean to you, your employees, your family, the charities you support? Is “doing fine” a form of settling, not being willing to get out of your comfort zone, fear of true success? Only you can answer that question.
No matter what you call it: Goal, plan, resolution or something else. You need a guiding light to illuminate the path you plan to follow and allow you to find places to rest along the path throughout your journey. That rest can be the difference between success and success beyond your wildest imagination. The next step is yours.
Why do we, as a society, have such a hard time dreaming? As children, we dream on a regular basis. We fly, conquer the world, create imaginary friends, and plan to accomplish things never considered by anyone 20 years of age or older.
Then the aging process starts and conformity begins. We conform not only in our behavior (which is mostly good), but in our ability to dream. One by one, we are told (and often not outright), that our dreams are impossible. Our dreams are unreasonable, unreachable, or even unthinkable. You might have even heard, “Why would you ever try that - you might FAIL!”
What this creates is a society of control freaks. Some control freaks become business owners and owners who want it done their way, believing their way is the only right way. What they end up losing is the ability to leverage the world to get things done for them. They don’t hire for new ideas, they hire for fitting into the box the business owner created. The problem: business owner wealth creation is often best accomplished by people with the desire to dream in a world without boxes.
Make 2014 a year of Dreaming without Boxes! What does that mean? It means stepping out and doing things differently. A perfect example is Steve Jobs who created something that was new and different that we didn’t know we needed! Yet how many of us want to revert back to what life was like prior to first Apple computer? As a business owner, you need to get away from the day to day operations at times and give yourself time to dream, to challenge the status quo, your current thinking process, and to be open to new ideas.
You also must be willing to let others challenge your thinking – they also have dreams that might allow you to fly, conquer the world, and accomplish things you were told were impossible.
Dream big dreams for yourself, your family, and your business in 2014. Dreams do come true, but only if there was a dream in the first place!
An old adage goes, “Rules are meant to be broken.” In many ways, this is absolutely correct. Simply following the rules, doing the same thing over and over, won’t get you anywhere. Albert Einstein once said, “We cannot solve our problems with the same thinking we used to create them.” Every truly great, major innovation in history has come about as a result of new thinking.
So let’s say you’ve set up your business, and are doing fairly well. You have a steady stream of revenue, a good customer base, efficient systems in place, and everything is going great. What do you do next? Often, businesses will plateau. They will improve up to a certain point, but things won’t get better from there. Once a plateau is reached, new thinking is required if you want your business to grow-which you should. Now, you should not throw your old playbook out the window, however, change is needed, and in many cases this change is rather unconventional. You need something that sets you apart.
Find that niche, and utilize it. Do something new, something different, and blow everyone away with your creativity and innovation.
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