Category Archives: Human Resource Management

Family Business Best Practices

The CEO of a family business must deal with an added layer of complexity to the challenges of running a successful enterprise.

Family Businessmen

I recently facilitated a meeting of five business owners, all of whom lead a business with other family members involved. They were gathered to share best (and worst) practices based on their own experiences. The discussion focused on bringing the next generation into the business, and preparing them to take the helm. Here are the most significant truths that emerged:

  • The next-generation family member should start out “mopping the floors”. They need to earn the respect of other employees.
  • Establish the discipline from Day One of differentiating between “talking business” as employer-employee, and “talking personal” as mother-son.
  • A young family member in their teens entering the business, even on a part time basis, creates special challenges. Their lack of real-world work experience makes it harder for them to understand the necessary separation between family and business relationships.
  • They need exposure, over time, to all areas of the business. Ascertain whether the organization can compensate for their weaknesses and allow them to play to their strengths if and when they assume the leadership position. Be willing to accept the fact that they may not be cut out to eventually run the business.
  • You must manage your expectations, which may be distorted because you are personally close to the family member. Allow them to surprise or disappoint you, and make necessary adjustments to your expectations and plans as they do.
  • Differentiate between compensation and business ownership. Compensate based on contribution to business results. Allocate ownership based on any family considerations you deem to be fair.

Running a business is challenging. Leading a family business adds another layer of complexity which only family business owners can fully appreciate.

Managing Managers

The accomlished CEO must be excellent at managing managers

It may look easy, but it’s not.

“I shouldn’t have to manage managers, and this really honks me off!”

That comment, from a business owner, was an expression of utter frustration upon discovering a major oversight by the manager in question – one that was quite damaging to business performance the past year.

When your business reaches the stage where you manage managers, how does your job as CEO change? In one sense, it does not change. You are still responsible for setting the company vision, for recruiting and onboarding the best managers possible, for establishing corporate strategies, for protecting corporate assets, and for integrating operational activities across department lines where necessary. Although your key accountabilities have not changed, how you achieve those accountabilities has changed.

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The CEO’s Planning Omissions

It’s been my experience that many CEO’s either omit or give short shrift to three major parts of their annual business plan.  The first is how they wrestle through Critical Success Factors. These links between the upfront analytical sections of your plan and the downstream implementation sections provide a solid reality check against your objectives. They also force you to consider all reasonable alternative strategies for achieving your major objectives. Continue reading

Do You Hear What I Hear?

In the holiday season just past, I often heard one of my favorite Christmas songs. The lyrics incorporate three questions:

  • Do you see what I see?
  • Do you hear what I hear?
  • Do you know what I know?

While the poetry and melody surrounding the three questions are lovely, my mind occasionally drifts to the application of these questions to the life of the CEO. With regard to your employees, be aware that they do not see what you see; they do not hear what you hear; they do not know what you know.

This is an especially relevant point at the beginning of a new year. Continue reading

Hunting in a Farmer’s World

I just read John Dini’s latest book, Hunting in a Farmer’s World – Celebrating the Mind of an Entrepreneur. If you are a business owner or leader and you pick this book up, you won’t put it down.

John draws a line of distinction between what he calls “hunters” and “farmers”. He treads along that dangerous slope of stereotyping, but with good cause. It allows him to explain in a compelling manner some of the reasons why certain private businesses struggle, while others blossom. Let me share with you just a few reasons why I am not really summarizing the book here, but rather encouraging you to read it for yourself.

He provides a mirror for the business owner to reflect on whether they own a job, a lifestyle business, or a legacy business.

He deals effectively with that nagging question, “How much should my company be making?”

He provides thought-provoking insight into the philosophical quandary, “What is rich?”

He even touches on the alternatives for selling a business, and some rules of thumb for estimating the value of a business.

Most importantly, John highlights the significant behavioral style differences between a “hunter” and a “farmer”, and how those differences can be successfully combined in a business organization.

A summary, by me or anybody else, does not do this book justice.

Full disclosure – John is a colleague of mine in The Alternative Board® network. More important disclosure – You don’t have to be a colleague of John’s to fully appreciate this very practical, experiential, straightforward, soon-to-be classic, on the mind of the entrepreneur.

Driving or Being Driven?

The CEO who understands motivation is more likely to be successful as both a leader and individual performer.

Understanding Intrinsic Motivation

“I don’t know why, but I have no motivation right now to do anything with my business!”  I occasionally hear these words or something very similar from CEO clients.  Where does the motivation go?  How does a business owner get that “Mo” back?

Daniel Pink’s book, Drive, offers some research and some suggestions, specifically regarding intrinsic motivation.  He emphasizes that for those “right brain undertakings – those that demand flexible problem-solving, inventiveness, or conceptual understanding –“, extrinsic motivation doesn’t really work.  It has to come from within.  “Those right brain undertakings” account for a heavy portion of the most important work performed by a business owner/CEO.

This leads to the question of what fosters intrinsic motivation in most humans.  Pink’s conclusion is that it depends on “three nutrients”:

  1. Autonomy over task, time, technique and team
  2. A belief that Mastery is possible – that one can really get better at doing something
  3. Purpose – a belief that what they are doing really matters

Understanding this as CEO might lead to your becoming a great manager.  A deliberate examination of how each is affecting your own current motivation might also open a path to self-invigoration.

Understanding Why

Have you ever thought about how important your understanding of motivation is to your success as a CEO?  Consider…

Effective selling requires understanding why a particular customer is “shopping”.

Effective marketing demands effectively communicating why your company does what it does.

Effective leadership requires your understanding why your partners and employees get out of bed to come to work in the morning.

Most important of all, why do you put so much energy into your company?  And how clearly have you communicated this purpose to your audiences?

The better grip you can get on why, the better CEO you will be.  Suggested reading: Start with Why by Simon Sinek.

Robot or Athlete?

Many CEO soft skills require practice, just like dancing

Which one is the professional?

You lead a business and, in that role, you employ many natural skills.  However, the job probably requires some skills that don’t come so naturally to you, but which you can hone through practice.  But what does this have to do with the photo displayed here? Continue reading

Independence Day

The business owner understands "independence" differently than the employee.

Oscar Celebrates Independence Day

Let me first wish you a Happy Holiday, whether or not you’re reading this on July 4th.  But I want to use this space to share a very brief reflection on the different interpretations of that word “independence”.  Specifically, through the eyes of the one who does not own a business, followed by the perspective of the business owner.  Here goes.

The independence of owning a business means… Continue reading

Three Magic Questions

Most business owners I’ve known and worked with have been challenged at some point to “grow” their employees.  They want more responsible employees who think as well as act.  Employees who bring them solutions in addition to problems.

The formula for developing such employees is not complicated.  My friend and professional peer, Jeff Whittle, has captured it in his article Three Magic Questions.  It won’t take you 3 minutes to click and read.  And it may become your first step in resolving one of your most frustrating human resource issues.