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Psssst. Hey buddy! Wanna sell your company?

If your company has successfully navigated the challenges of “startup” and “early stage development,” and if it has arrived at a place where it is relatively stable and has market recognition, you can expect would-be buyers to start sniffing around, trying to determine if you’re interested in selling.  Some entrepreneurs will start and sell many companies over the course of their careers, but most do not.  For most entrepreneurs, selling their company is a once-in-a-lifetime deal, so (assuming you are one of those once-in-a-lifetimers) when you get inquiries from would-be buyers, it’s critically important to respond to them appropriately, and to understand the do’s and don’ts in the M&A (Mergers and Acquisitions) world.  For more on this, please continue reading below.

Psssst.  Hey buddy!  Wanna sell your company?

In the best of all worlds, you will have already thought about your goals for exiting your business.  Do you want to sell it outright? Do you want your employees to buy it?  Do you want to pass it along to your kids?  And how much cash to you need to get out of it in order support the lifestyle you want after you have transitioned the company to someone else?  If you have already done that thinking, when someone wants to talk about buying your business, you’ll know pretty quickly whether or not this particular buyer will match up well with your goals.

First, in most cases, the appropriate response to someone who indicates an interest in your business is no response at all.  You can be polite and acknowledge the inquiry, but nothing more.  If you have no intention of selling your company, say so and move on.  There’s no reason to waste any time on something you have no intention of doing.  However, if you’re curious and want to at least stick your toe in the water, here are the initial steps you should take:

1. Find a good M&A attorney. You don’t want your regular attorney who helps you with contracts and transactional stuff . . . you want a specialist who does M&A work all day, every day, and who has a bunch of successful deals under his or her belt. The more the better. Likewise, you’ll want an accountant who has M&A experience and can advise you on tax implications as a deal starts to take shape.
2. Discuss with your attorney whether or not you need to bring in the services of an investment banker or a business broker. Those advisers will want to steer you away from a single buyer and point you instead toward setting up an “auction” where multiple buyers will bid against one another for your business. For many smaller businesses, the deal will be too small to attract an investment banker, but an experienced M&A attorney should be able to recommend a qualified business broker if you decide that sort of help would be useful.
3. Ask your attorney for an NDA (Non-Disclosure Agreement) that you will then have signed by the would-be buyer. You’re not going to disclose anything yet, but it helps to have that document in hand before you say anything at all to your would-be buyer. An NDA is a fairly standard document that shouldn’t cost a lot for your attorney to prepare.
4. Learn as much as you can about the would-be buyer before you offer any information about yourself in return. Sometimes the initial contact may come through a “straw man” (a representative of the buyer like an attorney or accountant or business broker, but not the buyer himself). You want to get passed the straw man and find out who the real buyer is:
• a strategic buyer (someone in your industry or a related industry who sees your business complementing his)?
• an investor?
• a competitor?
• a tire-kicker (someone who likes to talk about an acquisition, but when push comes to shove, will never write the check)?
• a bottom-feeder (someone who is only interested in your company if you’ll sell it for pennies on the dollar)?

You also want to know the buyer’s goals for this acquisition. What is he or she trying to accomplish? And of course, you want some assurance that the buyer has the financial wherewithal to do the deal that would meet your goals.

OK, at this point, if the buyer has not been forthcoming with the information you’ve asked for, or if you do have the information you’ve asked for but you don’t like what it’s telling you, stop.  Go no further. You’re done.  On the other hand, if you’ve got the information about the buyer you wanted and are encouraged by it, then you have a decision to make.  Do I start divulging the information the buyer will ask for and start negotiating in earnest, or do I walk away?  This is an inflection point that many entrepreneurs simply can’t work through.  It’s one thing to go through the intellectual exercise of formulating an exit plan, but it’s quite another to go through the emotional trauma of leaving something that you’ve spent years, maybe even a lifetime, building.

If you do decide to proceed down the path toward a sale, be guided by your attorney and/or business broker as to what information to divulge and when to divulge it.  The buyer will be very interested in seeing your financial statements, but that may not be the first thing you want to show him.

All this assumes that your business is not under undue pressure, financial or otherwise, to sell and that if the negotiation takes a turn that is unfavorable to you, you can walk away and continue operating the business as you were.  It’s vital that you maintain that position of strength right up until the last sale document has been signed.  And don’t get so committed to getting the deal done that you allow seemingly innocent eleventh hour concessions to sneak in and undermine your position.

What we’ve described here are only the early steps toward selling your company, but it’s a big deal, so you want the best possible team . . . an attorney and an accountant, both with M&A experience, and possibly a business broker . . . to help you get it done.  Such a team is not inexpensive, but if you want to maximize the value you can get for your business, this is not a place to skimp.

 
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“The real job of leadership is not to take charge. The real job of leadership is to take care of the people in our charge.”

As company owners, if we want to grow our enterprise into something that has size, depth, staying power, and value, we can’t do it alone.  We need a team to help us . . . a team of leaders.  But how do we develop our team?  How do we select who will be on it?  Do we pick the people who have the most experience?  Not necessarily.  A professional athlete may have honed his playing skills over many years, but that doesn’t mean he would make a great coach.

Simon Sinek is a business author and lecturer who we have referenced here many times because he’s a favorite of ours.  In a discussion about leadership, he points out most careers take a similar trajectory:

  1. We’re hired to do a particular task.
  2. We get some training on the tools and processes we need to do the task we’ve been hired to do.
  3. If we work hard and use the training we’ve been given effectively, we’re successful.
  4. Because we’ve been successful at doing the task we were hired to do, we get promoted into a leadership position where we’re expected to lead a group of people who are doing the same task that we did.

The problem is, while we know how to do the task, we don’t know how to lead others who are doing the task.  The original training we were given did not include leadership training.  Apparently, we were supposed to have picked that up along the way by osmosis.  While some companies, particularly larger ones, will offer some form of leadership training, most don’t.  As a result, too many leadership positions are being held by micro-managers who are leaders in name only.

For more on how to identify and groom the members of your leadership team, please continue reading below.

 “The real job of leadership is not to take charge.  The real job of leadership is to take care of the people in our charge.”            ~ Simon Sinek

Leadership is a skill like any other.  It can be taught and it can be learned.  However, not everyone will have the same aptitude to become really good at it.  Likewise, just because someone learns the basics of playing the violin doesn’t mean they have the talent to become a virtuoso performer.  How then do we identify the people we want to be on our leadership team    . . . maybe not today, but at some point in the future?  After all, most people don’t walk around with “Leader” stamped on their forehead.  So how do we spot them?  What do we look for?  As you might guess, this is the hard part.

In his book, “Traction: Get a Grip on Your Business,” author Gino Wickman offers some clues on how to start sorting through who in your organization has real leadership potential and who does not.  He advises looking for someone who:

  • “gets it.” That is, someone who has a clear understanding of the role and how that role is to be played within your culture.
  • “wants it.” Meaning someone who genuinely likes the duties, responsibilities, and activities that go along with a leadership role . . . not someone who is interested only in status.  And not someone who is acting out of some sense of obligation to move up the corporate ladder because that’s what we’re all expected to do in this country.
  • “has the capacity to do it.” Someone who has the time, intellect, skill, knowledge, and emotional IQ to lead effectively.

As we’ve said, this is the hard part.  Figuring out who “gets it, wants it, and has the capacity to do it” requires a lot of subjective, qualitative judgements about “soft” skills . . . much tougher than determining if someone has the technical skills we need.  But still, it’s really no different than what we have to do when we’re trying to figure out if a prospective new hire will be a good fit for our culture.

Now for the easy part.  Not necessarily cheap, but relatively easy.

Once we’ve determined who we want on our leadership team, we still have to provide leadership training for them.  Ideally, leadership training would be a continuous, long-term process, but if not, it needs to at least give participants a good grounding in the basics.  Where to find appropriate leadership training is not a problem.  When you start looking for it, it’s all around us.

  • Junior colleges often offer continuing education courses on leadership.
  • There are business coaches who specialize in leadership issues.
  • Alternatively, you could do the coaching in-house if you have someone on staff who demonstrates strong leadership skills and who would make a good mentor.
  • Check with your trade organizations. They may offer seminars or other learning opportunities aimed at leadership.
  • Online you can find leadership webinars. You can also find lots of leadership video presentations on YouTube.
  • There are leadership books in abundance. Business writers have written more about leadership than about any other business topic.

Don’t ignore leadership training or depend on your would-be leaders to figure it out on their own.  If you’ve already got a rudimentary leadership team in place, great!  Find out from them what they need to grow and develop into even stronger leaders, and get it for them.  If you haven’t formed a leadership team yet, get started.  First identify who you want on your team, then get them the training they need to be effective leaders.  In the end, you will lead the leadership team, and the members of that team will lead everyone else.  With that structure in place, your company will be able to grow to its potential.

 
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Turnover can be good or bad. When we’re talking about inventory, turnover is very good. But when we’re talking about employees, turnover is bad. Very, very bad.

Employee turnover is a serious matter. And it’s a very expensive matter.  It affects everything -profitability, productivity, customer service, quality control, and more.  Yet too many of us treat turnover as an unavoidable annoyance.  It’s true that some turnover is a good thing.  From time to time, we need to weed out the people who don’t belong and replace them with people who can bring in new thinking and fresh ideas.  It’s also true that very few people are going to stick with the same company for 30 years and hope to collect a gold watch.  So we tell ourselves, “People come and they go.  That’s just the way it is.  It’s just part of business.”  But is it really?  We can’t prevent all turnover, but isn’t it possible we might be able to slow it down a bit?  For some thoughts on how to do that, please continue reading below.

Turnover can be good or bad.  When we’re talking about inventory, turnover is very good.  But when we’re talking about employees, turnover is bad.  Very, very bad.

As a starting point, try dividing employee turnover into two categories: unpreventable turnover, and preventable turnover.  Unpreventable turnover happens when an employee leaves due to something that is out of our control.  Maybe it’s a job or salary offer that we simply can’t match.  Or maybe an employee and his or her family are moving out of the area for reasons unrelated to the company.  On the other hand, preventable turnover occurs when an employee leaves because he or she just doesn’t like working for us anymore.  These are people who want a different working experience than we provide, so they go looking for something else.  It’s this category we want to track to discover if there’s any discernable pattern to these voluntary defections.

We should be doing exit interviews . . . always.  And they should be done by someone who has strong interview skills.  The problem is, a departing employee may not want to burn bridges by getting into a contentious discussion.  So he or she may avoid talking about the real reason for leaving the company by offering up an innocent-sounding reason instead.  A skilled interviewer, in a non-threatening way, will dig for the real reason an employee is leaving.  In the case of a preventable departure, the interviewer will want to learn:

  • Did the departing employee feel comfortable discussing his or her job dissatisfaction with an immediate supervisor? If not, why not?  NOTE: Research shows that the overwhelming reason employees voluntarily leave their jobs is a poor relationship with their immediate supervisor.  As the saying goes, “People don’t leave their companies, they leave their managers.”
  • If such a discussion did take place, did the supervisor do anything to try to salvage the employee? If not, why not?
  • Was this particular departure an isolated case, or did it fit into a pattern of previous departures?

Again, we not talking about the unpreventable departures here, only the preventable ones.  The question we want to ask ourselves is, “If this employee quit for reasons we could have prevented or corrected, why didn’t we?”

Conducting exit interviews with everyone who leaves your company can be a difficult and time-consuming task, but if they help you make a dent in employee turnover, even a small dent, the payoff is well worth the effort.  Consider the benefits of a reduction in voluntary departures.

  1. Recruiting costs go down. Obviously, with more people staying on the job, we have fewer open jobs that need to be filled.
  2. Training costs go down because we have fewer new people who need to be trained.
  3. Productivity goes up because experienced (productive) employees are staying on the job longer. Productivity also gets a boost when experienced employees are not burdened with the task of “breaking in the new guy.”
  4. Safety improves. It stands to reason that experienced employees will make fewer of the “rookie mistakes” that can cause accidents and injuries.
  5. Our quality goes up. Experienced employees who know our quality standards and our quality control methods are likely to catch problems before they reach the customer.  That’s less likely to happen with a trainee.
  6. Customer service improves. Experienced employees know the level of customer service our customers expect, and they know how to deliver it.  New employees are still trying to  figured it out.
  7. Sales revenue goes up. A new member of your sales team, even one with previous experience, will take awhile to get up to speed in your sales environment.  While that’s happening, some sales opportunities will inevitably be missed.  But if we can keep the existing salesperson on the job, we won’t take that hit.
  8. Obviously, with all these benefits that accrue to a reduction in employee turnover, profitability goes up . . . in some cases, it goes up dramatically.

The message here is simple.  Don’t accept that employee turnover “is what it is.”  It’s not reasonable to think that you can eliminate turnover, but you should be looking for ways to reduce it.  Consider setting a target for turnover just as you set targets for revenue and expenses.  Even a small improvement can have a significant impact throughout your organization and ultimately, to your bottom line.  Salvaging good employees before they have one foot out the door requires an investment of time and effort, but the potential ROI is too great to ignore.

 
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The Power of “I Don’t Know”

Sir Ken Robinson is an expert on education. learning, and creativity.  He tells a story about once having served on a panel of speakers that included the Dalai Lama.  During a Q&A session, the Dalai Lama was asked a question that he didn’t answer right away.  After a long silence, the Dalai Lama finally responded, “I don’t know.”  Robinson doesn’t remember what the question was, but that’s not the point.  The point is, the Dalai Lama had the strength of character and self-confidence to say honestly, “I don’t know.”  He didn’t try to fake it or spin it, he just answered truthfully, “I haven’t thought about that before.”  There’s a lesson there for anyone in a leadership position who feels compelled to be the answer person . . . the person who always has the answers and who always knows what to do.  For more on why you shouldn’t be the answer person and why you shouldn’t even try, please continue reading below.

The Power of “I Don’t Know”

We heard a speaker once who commented that CEOs get up in the morning, look in the mirror, and say to themselves, “I wonder if today’s the day . . . the day people discover that I’m not as smart, competent, or knowledgeable as they thought I was.”  Some leaders may make a show of being the go-to guy when problems come up, but in their hearts, they know they don’t have all the answers.  And their followers may make a show of believing their leader has all the answers, but they know it’s a lie.  No one has all the answers all the time.  It’s simply not possible. So why all the posturing?

Some leaders believe that admitting to a gap in their knowledge would be a sign of weakness, but in fact, it’s a sign of strength.  An admission that he or she doesn’t have all the answers builds trust among followers.  It’s a sign that the leader is comfortable with the strengths, abilities, and knowledge that he or she does possess, and is honest about the limits of those strengths and abilities, and the limits of that knowledge.  The leader who tries to put up a front of omnipotence destroys trust because everyone around him or her knows it’s BS.

In the study of group dynamics, there’s a thing called the Messiah Syndrome.  It occurs when there’s something very scary coming . . . maybe a disruptive new technology or a big new competitor . . . and the group doesn’t know what to do.  So the group turns to its leader and says, “Thank God for our leader!  He’ll know what to do.  She will protect us and won’t let anything bad happen to us.”  And so the leader accepts the mantle as the group’s messiah.

You may remember, there was a guy whose people made him their messiah a few thousand years ago, and for him, things didn’t work out all that well.

Here’s the problem if you allow your group to make you its messiah.  The group now depends upon you to protect it, but sooner or later, you’ll stub your toe.  Something will happen that the group thinks you should have prevented.  The group now realizes that you are not the all-knowing, all-seeing, omnipotent, infallible person they thought you were.  You’ve let your followers down.  They trusted you, but you betrayed that trust.  And since they can no longer trust you, it will be very difficult for you to lead them.

Let’s be clear on the difference between a leader and a messiah, because both do have a responsibility to protect their followers from harm.  The difference is, a messiah makes the unspoken, and untenable, promise to followers that he or she alone will keep them safe and protected, no matter what.  A leader, on the other hand, organizes a group into a team, and each team member has a role to play in keeping the group safe and protected.  Collectively then, all the team members are depending on one another for safety and protection, not just on the leader alone.

So how do you maintain your position as leader, but avoid the Messiah Syndrome?

  • Don’t be afraid to say, “I don’t know.” When you find yourself in an unfamiliar situation, don’t try to BS your way through it.  Instead, say, “I haven’t ever dealt with this either.  So together, let’s figure it out.”
  • When you make a mistake, own it. Don’t try to make excuses or shift the blame to someone else.  Put on your big boy (or big girl) pants, explain what happened, take ownership of it, and move on.

So do you want to be a genuine leader or a pretend messiah?  We trust your choice will not require a lot of thought.

 
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“Successful people are always looking for opportunities to help others. Unsuccessful people are always asking, ‘What’s in it for me?'”

We all talk about outstanding customer service, and many of us even claim to deliver it, but do we really? Too much of what we call customer service is really an attempt to mollify a customer after we’ve screwed up in some way . . . a restaurant may give a customer a free dessert after botching the customer’s order, or an airline might offer free tickets to a passenger whose luggage it lost.  But real customer service is much more than offering atonement for poor service.  It’s more than just treating people fairly because they expect that.  Real customer service is the distinctly human experience of people helping people in a way that creates a “feel good” moment, not only for the person being helped, but also for the person providing the help.  Unfortunately, even with cash incentives and other perks, it’s tough to mandate good customer service.  If your people don’t genuinely want to provide a high level of customer service, their attempts at it will come off as phony and insincere.  For a thought on how to solve this dilemma, please continue reading below.

“Successful people are always looking for opportunities to help others. Unsuccessful people are always asking, ‘What’s in it for me?'”

~ Brian Tracy, author and motivational speaker

If you’re looking for a customer service role model, there are quite a few of them to choose from.  Zappos, the online retailer, has been built on a platform of great customer service.  Nordstrom, the bricks and mortar retailer, also has an enviable record of customer service.  Ritz-Carlton Hotels are legendary for their consistently high levels of customer service.

Steve Wynn is a billionaire developer of hotels and casinos in Las Vegas. Mirage and Bellagio are two of his properties.  He recently stepped down as CEO of his company due to a rash sexual impropriety allegations.  However, if you can look past his personal failures, he does have a valuable customer service lesson to teach which he has described as “the most profound business lesson I have ever learned.”

Wynn wanted his employees to deliver a high level of customer service, but recognized that he could not impose that level of customer service through a complex web of corporate policies, incentives, or punishments. Instead, he looked for a way to inspire his employees to want to provide extraordinary customer service as a means to finding personal fulfillment in their work.  What he came up with was a system called “storytelling.”

At all of Wynn’s properties, before each shift begins, teams of eight to twelve employees meet with their supervisor . . . maids meet with their Housekeeping manager, dealers meet with their Pit Boss, kitchen workers with their Chef, and so on. At these meetings, each supervisor asks who has a customer service story to tell that occurred the previous day.  Some of the stories are fairly routine, but others are examples of employees going to extraordinary lengths to help a guest solve a problem.  All the stories are published on the Wynn intranet and are also printed and posted in all employee areas of the hotel.  As a result, employees want their stories published.  They enjoy the recognition they get when their story is posted, and they also enjoy the sense of fulfillment and the “feel good” moment they experience when they deliver outstanding customer service.  In Wynn’s words, the storytelling system is ”pristine, it is simple, it is profoundly effective, and it has changed the history of my enterprise.” In short, the storytelling system is a “win” for everyone.

  • At little or no cost, and with little or no management intervention, the hotel gets a workforce that is committed to providing great customer service.
  • The hotel also gets loyal guests who are well-served and who will promote the hotel via word-of-mouth.
  • And Wynn employees arrive at work each day looking for those customer service opportunities that will result in a story posted on the wall.

Mary Kay Ash, founder of Mary Kay Cosmetics once said, “I have learned to imagine an invisible sign around each person’s neck that says, ‘Make me feel important!'” If being heroic in the eyes of a customer doesn’t make an employee feel important, there’s probably little else that will.

 
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“It’s important to have a sound idea, but the really important thing is the implementation.”

Picture this.  You’re in a meeting to discuss a particular operating problem you need to solve.  The group discusses several possible solutions, and finally settles on the one that seems most likely to succeed.  Then the leader of the group says, “Good work gang!  I think we’re on the right track here,” and adjourns the meeting.  Huh?  Where’s the implementation part of this solution?  Who’s going to do what and by when?  And how are we going to track our progress so that this solution doesn’t get sidetracked and forgotten?  Unfortunately, too many good ideas are lost or forgotten because our action plans are either non-existent, or they lack follow-up and follow-through.  In short, they lack accountability.  If this is a problem for you, please continue reading below.

 “It’s important to have a sound idea, but the really important thing is the implementation.”
                                                            ~ Wilbur Ross

Charles Kettering was an American inventor, engineer, the holder of 186 patents, and the founder of Delco.  He once said, “A problem well-stated is a problem half-solved.”  But we can’t be content with a half-solved problem.  We need to finish the job with a well-implemented action plan.  So why don’t we?  What’s getting in our way?  There could be a number of obstacles, but there are principally three:

  1. The problem we’re trying to solve is scary and dangerous. No one wants to step up and take responsibility for its solution.
  2. Implementing our solution to the problem is going to take a lot of work, and everyone has a plate that’s already overflowing with their regular, daily responsibilities.
  3. No one believes the leader is truly committed to solving this problem. By tomorrow, he or she will have completely forgotten about it and will have moved on to something else.

Fundamentally, this is a leadership issue.  Too often, people in leadership positions assume that once we’ve figured out a solution to a problem, implementing the solution will be automatic . . . everybody knows what to do, so they’ll just go ahead and do it.  Clearly, that’s not the case.

So before we adjourn the meeting, we need to look at our proposed solution and break it down into its component parts and develop action plans for each . . . Step 1, Step 2, Step 3, etc.  This is particularly important if the problem were trying to solve is the big, complex, scary variety.  Breaking it down into a series of small action steps makes it less complex and less scary.

Next we need to develop a timeline . . . deadlines for each of our action steps.  In some cases, we’ll have the luxury of creating our own timetable, but in others, a timetable will be imposed on us by outside forces (competitive issues, government regulations, etc.).

Then we need to figure out what resources we’ll need to implement our solution within the time constraints we’ve established.  Is this a one-person job or will it require a team of people?  Will we need equipment or materials beyond what is normally available?  Do we need to establish a budget for it?  Can we fund our solution internally, or do we need to find outside financing for it?

We’ll need tracking mechanisms of some kind to make sure everything is going as planned, on time and on budget.  If our time frame is relatively short, we may only need to make sure that each action step is being completed on time.   But if our solution is complex and will unfold over a longer period of time, we may need additional information to give us early warning if the implementation of our solution is starting to leave the rails.

Finally, we need to assign responsibility for overseeing the entire project.  Who will lead the charge?  When a team of people is involved, each member of the team can be responsible for his or her piece of the puzzle, but still, someone has to be accountable for the overall outcome the team is expected to achieve.  Who will that be?

Now we can adjourn the meeting.

Obviously, for small, incidental problems, we can shortcut or eliminate some of these problem-solving steps.  But for solutions to our big, important, complex problems, sticking with a well-defined implementation process will pay big dividends.  And for implementing the solutions to all problems, big and small, be guided by Ronald Reagan’s, “Trust but verify.”  When you trust but fail to verify, the people implementing the solution to a problem will assume you’ve forgotten about it, and they will too.

 
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“Change is good; you go first.”

Jim Hemerling is an author and a senior partner/managing director at the famed Boston Consulting Group.  One of his particular areas of expertise is change management, so he must be a very busy guy these days because there’s a lot of change to manage.  Change is coming at us rapidly, and it’s accelerating.  He recently gave a TED talk entitled, “5 Ways to Lead in an Era of Constant Change.”  In that talk, he outlines strategies for coping with change without allowing the relentless nature of it wear us out.  To learn more about his “5 Ways,” please continue reading below.

“Change is good; you go first.”        ~ Dilbert, cartoon character.

Change is all around us . . . social, economic, political, regulatory, and of course, technological changes buffet us every day.  And all this change can be discouraging.  Just when we have things humming along nicely, something changes and we feel like we’re back at square one, starting all over again.  So how do we adapt to this rapidly evolving world we find ourselves in?

We have written many times here about Employee Engagement, and while Hemerling doesn’t use that particular term, he does talk about “putting people first,” a theme that is the common thread for all five of his “5 Ways.”  So then, here are the five strategies Hemerling suggests we pursue to make the challenges we face “invigorating instead of exhausting.”

  1. Inspire through purpose. While upper managers may go weak in the knees and get all aflutter over increasing revenue and cutting costs, most other people in the organization probably don’t.  If we’re going to ask them to help adapt to all the changes before us, we need to give them something that is inspirational, something they can feel good about.  True, we can’t all be saving the whales, but our customers don’t buy from us because they want us to make money.  They buy from us for reasons that are important to them, reasons that matter.  Tap into those reasons to find an inspirational purpose.
  2. Some changes may require cost-cutting, even layoffs, but your people will also want to see something more than just battening down the hatches to ride out the storm. They’ll want to see initiatives that are forward-looking and that say, “We’re not only going to survive this change, we’re going to thrive in it.  We’re going to come out of it better and stronger than we were.”
  3. Give people the capabilities they need to succeed during the change. They may need training, or tools, or technologies, but whatever it is they need to be successful, you had better find a way to get it for them because if they’re not successful, you won’t be either.
  4. Make your place a place of learning. If people can see grappling with change as a learning experience, they will be more likely to embrace it as a means to grow in their jobs and to increase their value to the company.
  5. Leaders need to hold people accountable to achieve results, but they have to do it in a way that is less directive and more inclusive. This is a real key. People don’t want to be seen as minions who scramble around after the boss throws down a few lightning bolts.  They want to be seen as colleagues who have valuable thoughts, ideas, and opinions to share.

So Hemerling didn’t use the term, but if “Employee Engagement” is the goal, his “5 Ways” will get you there.

When you’re confronted with the sorts of challenges that rapid change brings, you need creative, innovative thoughts and ideas to overcome those challenges.  Don’t limit yourself to only you and your management team for those thoughts and ideas . . . get everybody involved.  When you’ve got a tough problem to solve, it should be an “all hands on deck” moment.  It only makes sense to seek help from the people who are in the trenches, hands on, dealing with that problem every day.  Hemerling’s “5 Ways” is a pretty good path to get you that help.

If you would like to watch Hemerling’s TED talk, use the link below.

 

https://www.ted.com/talks/jim_hemerling_5_ways_to_lead_in_an_era_of_constant_change

 
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“Great things in business are never done by one person. They’re done by a team of people.”

The Loyola Ramblers were the “Cinderella” team of this year’s NCAA basketball tournament.  True, they didn’t win the championship, but for a team that many thought couldn’t win their Missouri Valley Conference, making it all the way to the Final Four was an incredible feat.  On the surface, it may seem that there aren’t any business lessons we can learn from the Ramblers’ star turn.  After all, the Ramblers are just a bunch of (very talented) college guys playing a kids’ game.  They haven’t been out in the “real world” yet, working at real jobs, so what could they possibly teach us about business?  As it turns out, if we look a little closer, we can learn quite a bit from them.  For some of the lessons they have taught us, please continue reading below.

“Great things in business are never done by one person. They’re done by a team of people.”              ~ Steve Jobs

First of all, college basketball today is big business with broadcast rights, ticket sales, stadium advertising, and all the rest.  But here, we’re not talking about lessons to be learned from all that stuff.  Instead, we want to talk about the team . . . the young men who played the game and their coaches . . . and the lessons they taught us from the basketball court.  There are three lessons we can learn from the Ramblers’ odyssey:

Lesson #1.  Play for the greater good, not for individual recognition.  In short, the Ramblers left their egos on the bench.  President Harry Truman once said, “You can accomplish anything in life, provided you don’t mind who gets the credit.”  I don’t know if the Ramblers were familiar with that quotation, but they played like they were. Sports commentators consistently remarked about how unselfishly they played.  In interviews after a game, players seemed embarrassed to talk about their own performances, preferring instead to talk about how well the team did.

What about your “team?”  Do they man the barricades and jealously guard their respective areas of responsibility?  Or are they willing to make sacrifices in the name of the greater good?

Lesson #2.  Stick with your game plan.  The Ramblers were very disciplined about adhering to their game plan.  They may have made adjustments to it as a game unfolded, but they didn’t abandon it.  Even if they fell behind, they didn’t panic and they continued to play their game.  Compare that to other teams who, under duress, will break discipline and revert to “run and gun” alley-style basketball.

What about your “team?”  Are they easily distracted by the first sign of trouble or by daily operating concerns?  Or are they disciplined enough to manage their time and resources in a way that will keep the plan on track?

Lesson #3.  Don’t let success go to your head.  Entrenched success can be a dangerous thing.  It can lead you to believe that all you have to do is show up and success will be yours.  Even though the Ramblers had an impressive string of wins, they knew nobody was going to lay down and hand them a game.  They were confident in their ability to win, but not cocky about it.  They realized that if they wanted a win, they were going to have to earn it, and that’s how they played.  Ultimately, they couldn’t get passed Michigan, but no one could say that loss was due to lack of effort.

What about your “team?”  When you are undertaking something new or ambitious or challenging, do they treat it as business as usual, assuming that past success will guarantee future success?  Or do they put on their game faces and show up ready to play?

It’s too bad this “Cinderella” team didn’t make it all the way to the Big Dance, but that does not diminish what they did accomplish, nor does it invalidate the lessons they demonstrated for us along the way.

 
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14 Great Questions Every Entrepreneur Should Ask

A while ago, I stumbled across an article in Inc. magazine entitled “100 great questions every entrepreneur should ask.” The questions were submitted by a variety of business leaders and business writers, and while all were pretty good, predictably, some were better than others. So I picked out a few that I thought were particularly impactful to share with you. Most of these questions I have paraphrased for clarity. I offered comments on some, but not all. To see my picks, please continue reading below.

14 Great Questions Every Entrepreneur Should Ask

1. What one word comes to mind when our customers, employees, and vendors think of us?

In other words, what one word do you hope defines you in your marketplace? It’s a significant part of your brand. If you were Apple, that word might be “innovation.” If you were Mercedes Benz, that word might be “quality.” What’s your one word and what are you doing to nurture and protect it?

2. If you sold your company tomorrow, what’s the first thing the new owner would change?

3. Do you personally speak with your top customers on a regular basis?

4. Who uses our product or service in ways we never expected?

5. “What would have to be true for the option on the table to be the best possible choice?”   ~ Roger Martin, professor, Rotman Business School

This question is particularly useful when you’re trying to choose between a variety of diverse options. It forces you to examine the underlying assumptions that support each option.

6. Is the way in which we allocate resources consistent with our strategy?

If you have a growth strategy in place, are your people’s regular activities consistent with that strategy? Or are they more consistent with a business-as-usual strategy?

7. What do customers dislike about doing business in our industry? What can we do to be the opposite of that?

8. “If our company went out of business tomorrow, would anyone who doesn’t get a paycheck here care?”         ~ Dan Pink, author

This is another way of asking if your business is still relevant. Have your products, services, and business methods kept pace with your customers’ evolving needs?

9. What happens here when people fail? Do we treat failure as a learning experience or as an occasion for disciplinary action?

If you want your people to be creative, innovative, and to have the courage to try new things, you can’t slap them down when their efforts don’t produce the results they hoped for.

10. “Do your employees have the opportunity to do what they do best every day?”                ~ Marcus Buckingham, author

The vast majority of employees would tell you they do not have the opportunity do what they do best every day. In your hiring practices, do you differentiate between the skills a candidate has learned over time vs. the natural talents he or she was born with? And do you try to put the people you hire in positions where they can make the best use of their talents?

11. “What successful thing are we doing today that may be blinding us to new growth opportunities?”         ~ Scott D. Anthony, managing partner, Innosight

Success can kill creativity and innovation. It can breed a let’s-just-keep-doing-what-we’re-doing-and-not-rock-the-boat mentality.

12. “What potential megatrends could make our business model obsolete?”            ~ Michael A. Cusumano, professor, MIT

And a companion to the question above –

“How can we become the company that would put us out of business?”          ~ Danny Meyer, CEO of Union Square Hospitality Group

A little paranoia can be a good thing. You should always keep a weather eye out for technological, social, political, and competitive changes that could make you rethink the way you do business.

13. What is it like to work for my company?

Do your employees feel challenged and engaged at work? Or do they feel stressed out and unappreciated? Or more to the point, do you care how they feel?

14. “What prevents me from making the changes I know will make me a more effective leader?”             ~ Marshall Goldsmith, leadership coach and author

 
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The first rule of management is delegation. Don’t try and do everything yourself because you can’t.

Entrepreneurs often have a tough time delegating effectively.  After all, the company is their baby. They gave it life and steered it through its formative years.  They know how to press all the important buttons and pull all the essential levers better than anyone else.  But if they continue to refuse access to those buttons and levers for anyone but themselves, they will be unable to build the sort of team they need to grow their enterprise.  Instead, they will be stuck with some errand boys (and girls) who will do what they’re told and nothing more . . . just “gofers” who won’t exhibit any initiative or creativity.  If you suspect you’re guilty of hoarding all the fun stuff for yourself and realize your “gofers” won’t help your company reach its potential, please continue reading below for some thoughts on effective delegation.

“The first rule of management is delegation. Don’t try and do everything yourself because you can’t.”             ~ Anthea Turner

As noted in our opening remarks, sometimes the problem with delegating is simply that the owner/entrepreneur won’t let go.  But sometimes the obstacles to effective delegation are more insidious and less obvious . . . particularly if the company’s culture enshrines the owner’s right to make all the decisions and to keep a finger in every pie.  One of our favorite quotes (although from an unknown source) is, “The great challenge for any entrepreneur is how to delegate so effectively that once you have gotten a monkey off your back, your employees don’t return it to you . . . with instructions for its care and feeding.”

In an article written for the Harvard Business Review entitled “Who’s Got the Monkey?” William Oncken and Donald Wass contend that assigned tasks (“monkeys”) often end up full circle, back in the lap of the manager who assigned them in the first place.  And it’s not that the employee is trying to pull a fast one.  The monkey can leap from the employee’s back onto the manager’s back without either one intending for that to happen or even realizing that it had happened.

Consider this example.

A company is preparing to launch a new product.  The owner has asked Bill, his sales manager, to draft a sales plan for the new product.  A few days later, Bill and the owner bump into each other at the water cooler and Bill says, “Hey Boss!  I’m about halfway through that sales plan you asked me to prepare, but before I go any further, I wonder if you would look over what I’ve done so far to make sure I’m on the right track.”  The owner responds, “Sure.  Just put it on my desk and I’ll look it over as soon as I get a chance.”  And presto, the sales plan monkey slipped from Bill’s back onto the owner’s back without either of them even noticing.

To understand whose back the monkey is on, all you have to do is understand who must take the next step to move the assignment along.  In this case, when Bill met the owner at the water cooler, the sales plan monkey was squarely on Bill’s back.  But as soon as the owner agreed to review the half-completed plan, the monkey became his.  Why?  Because the next step is now the owner’s responsibility.  Bill can’t do anything more with the sales plan until the owner completes his review.  As soon as the review is complete, the monkey will be returned to Bill, but until that happens, the monkey will stay with the owner.

If this were just an isolated incident, it wouldn’t be any big deal.  But it probably isn’t.  This owner probably has other managers just like Bill.  And just like Bill, these other managers will try to park their monkeys on the owner’s back if he lets them.  As a result, the owner can become so mired in his subordinates’ monkeys that he has a hard time discharging his own responsibilities.  Worse, he becomes a bottleneck where projects stack up until he can return all these monkeys to their proper owners.

The secret to good delegating skills is to make sure that whatever a subordinate is working on, the next step to be taken stays solidly with him or her, not with you.  When your subordinate asks for help, you can coach, advise, mentor, teach, instruct, or do anything else to offer your support . . . stopping short of taking responsibility for the next step.  In rare cases, a subordinate may have legitimate need for your personal intervention.  When that happens, accept the monkey (grudgingly), but then do what you must do as quickly as possible and return the little critter to its rightful owner.

As the quote above from Anthea Turner suggests, you can’t do everything yourself, and if you try, you will only succeed in slowing your company’s growth to a snail’s pace.  The more you insist that your subordinates find solutions to their problems that don’t require direct action from you, the more they will grow and the more they will be helpful in moving the company forward.

The Oncken/Wass article, “Who’s Got the Monkey” is a good read and explores the subject of delegation much more thoroughly than we’ve been able to do here.  Below is a link to the full article.

https://hbr.org/1999/11/management-time-whos-got-the-monkey

 
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