Category Archives: Planning

Take Stock

Year-end summary; strategic plan; year in reviewAs a coach of entrepreneurs and small business owners, I’ve encouraged my clients to create a “Letter to Stakeholders” that concisely summarizes each year. The letter consists of three short paragraphs: highlights of accomplishments; comments on the disappointments or shortfalls; and a statement of the most important objectives for the upcoming year. More recently, I’ve broadened my recommendation to include additional lenses through which to view the past twelve months. 

One such lens is Personal Accomplishments, a list of personal milestones that don’t directly apply to your role leading your business. This is normally a short list – sometimes a single item. But that single item can be significant. 

Examples range from guitar lessons to starting a vegetable garden; from taking up cycling to becoming treasurer for your place of worship; from coaching your child’s little squirts team to learning to prepare Swedish meatballs. 

As with your Letter to Stakeholders, it’s worth taking the time to write down your personal accomplishment(s) and ponder them. It will not take you long to record them, and only a little longer to also record why each accomplishment is important.

The audience for whom you are writing is…you. The thinking that goes into your list creation will inspire your ongoing personal growth.

I’m still passionate about the value of your Letter to Stakeholders, but the Personal Accomplishments list can be just as powerful for a workaholic like you. It provides a reminder that you are more than your business. 

Learn from Giants

 

JacksonR1-180210

Future Thoughtful Entrepreneur

Right out of college I went to work for GE and spent the next seventeen years there, learning what life in the world of business/industrial marketing/strategic business planning was all about. It was an exciting time for me, and a somewhat different business world than exists today. I grew a lot during those GE years, and learned a great deal about the world of big business and a little bit about myself. When I opted to leave GE for an opportunity to become a part-owner of a small manufacturing company, I doubted whether I would ever again be surrounded by so many capable people. Twelve years later we sold that company, and I became a full-time coach for owners of small businesses, a profession in which I remain involved.

As a small business coach, I preach the value of peer advice, having learned that a small business owner values the advice of another business owner above all other sources of business information or advice.

Back to GE. Those of us paying attention have witnessed this business icon stumble. As a result, the company’s stock has been the worst-performing in the Dow Jones Industrial average for more than a year. Many are asking, “What in the world went wrong at GE?” I won’t take your time here to repeat the details of this saga since they can easily be found in various business media. Rather, I believe there are powerful lessons here for any CEO of any size company, and I want to share them.

First, you need to be brutally honest with yourself regarding your numbers. The financial performance of any company, as portrayed by periodic numbers reporting, contains both positive and negative messages. As the owner, you know what’s really going on behind your numbers, and you need to face the negatives, the warnings, the hidden truths, as well as the confidence-building interpretation designed to cause majestic music to swell in your mind, or your employees’ minds, or your lenders’ minds.

Second, while continuously on the lookout for new opportunities, maintain an objective decision framework to guide you – and stick with it! Avoid becoming emotionally involved when deciding whether to commit company assets in pursuit of a new adventure.

Finally, discipline yourself to do contingency thinking, if not full-scale contingency planning, to prepare your mind for abrupt changes in the business, changes such as the loss of a major account, the resignation of a key manager, or the unexpected interruption of your operations due to a natural disaster.

There are significant differences between leading a giant organization and leading a small business. However, the successes and failures experienced by huge companies sometimes offer universal reminders of key basics of private enterprise.

Watch the Super Bowl and think about the other S-Word

CoachChalkboardYou’re a competitor, so there’s a good chance you’ll be watching the Super Bowl on Sunday. Can I get you to think “Strategy” while you’re watching? It will actually enhance your enjoyment of the game, and you can watch guilt-free because your CEO gray matter will be working on your business at the same time.

The yet-to-be-determined winner of the game has built a season based on effective strategies. I can guarantee you that they both had the same BHAG (Big Hairy Audacious Goal) in mind at the start of the season – to win the Super Bowl. Each team had a set of values and an effective team culture that they stuck with throughout the season. They studied and understood their opponents, and they had short-term goals (weekly) of defeating that week’s opponent. They established game plans for each game that included appropriate contingency plans. If we fall behind early, here’s what we’ll do. If we aren’t able to establish our running game in the first quarter, here’s what we’ll do in the second quarter. If our quarterback gets hurt, etc. In short, they built strategies for each aspect of the competitive environment, with detailed action plans that were subject to change as conditions warranted. And they’ve repeated that strategic planning process in preparation for this week’s big game.

So, as you watch the game Sunday, draw parallels with your business and its environment and the competition you face each week. Challenge yourself. Is your BHAG clear? Are your short term goals understood by your “players”? Have you taken the time to outline, in writing, the goals and action plans and individual responsibilities for the next quarter or for the entire year?

Enjoy the game. Allow it to provide motivation to define and communicate your business strategy.

Unwinding and Reloading

CEO Relaxation

Unwinding

Another Christmas, a New Year looming, much year-end wrap-up to be done. And it’s the best time to take stock.

But first, make sure you have allowed yourself to unwind. Everybody unwinds differently, and many CEOs don’t unwind the way normal people do. You know you, so allow yourself to unwind in your most effective way sometime before hitting full throttle again in January.

Now, about taking stock…

Separately from the unwinding, allow yourself a couple hours to review your business year. Although you may want to outline or create a detailed plan for the first quarter or even the entire year, delay that until you have answered the following questions to your own satisfaction:

What were our most significant accomplishments this year?
Did we make money? If yes, was it a fair return on our investment?
Are we generally headed in the right direction, toward my vision for the business?
Am I becoming more skillful? In what ways?
Am I having any fun?

Unwind, reload, launch into 2018.

Have a joyous holiday. May you be well and prosperous in the New Year.

Fresh Eyes

FreshEyesRichard Nixon was early in his first term, the Detroit Tigers had won the World Series for their first time since 1945, and Fred Borch was CEO of the General Electric Company, when I came out of college and began a 17-year career with GE, a historically strong company, often emulated by other enterprises around the world. The company continued to build on that reputation well into the twenty-first century.

Few manmade constructs last forever. GE’s CEO for the past 16 years has just retired, and the new CEO is wasting no time making changes. Investors have been disappointed with GE earnings and strategies and performance for some time. They now have fresh eyes at the top and new directions and predictions of performance are being established.

My emotional ties to GE (even though I left prior to the turn of the century (how depressing does that sound?) have drawn my attention to their current circumstances. Having spent the final 15 years of my working life as a business coach, and having worked with a number of outstanding entrepreneurs, and having witnessed the making of numerous business decisions of consequence, GE’s current situation reminds me of the power of Fresh Eyes.

If you have operated your own business for a few years, you may or may not realize the upside potential of Fresh Eyes. Ingrained leadership can be very bright, very competent, very hardworking, but locked into a particular view of the business, its employees, its customers, and all its other stakeholders. Fresh Eyes can provide a path to improved performance, particularly when nothing the current leadership is doing appears to be working.

My suggestion is not that you look for a CEO to take your place (unless you are ready to exit your business), not that you get an eye exam and new prescription glasses, but that you seek the advice of trusted outsiders. One of the most effective approaches – in my experience – is to become part of a peer advisory board, a group of non-competing business owners, a collection of openminded leaders, an assemblage of generous entrepreneurs. Once you’ve become a board member, use the board effectively: do your homework; keep your board members advised of your business progress; seek their counsel prior to making key decisions.

You’re still the decider. But your decisions can benefit from the clarity of vision and variety of alternatives identified by Fresh Eyes.

As always, your thoughts are welcome and you may share them below.

Your Black Labrador

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Oscar

Oscar, my black lab, looks a little different from most black labs. His legs are shorter, his fur is shorter, and his head is smaller – not to mention his entire body. But he’s a black lab because, where we have recently moved, everybody has a big dog, and many are black labs. So, he needs to be a black lab.

When we hike a trail with his new best friend, Delmar (who looks a lot closer to a black lab than Oscar), Oscar invests himself in the walk almost completely. He wants to keep up with Delmar. His short legs churn at blazing speed (OK, maybe not blazing, but faster than normal), constantly trying to catch up to Delmar. This attempt at speed is in dramatic contrast with a normal Oscar walk which is more of a saunter, a meandering, a sashaying, guided by his nose, and at a pace resembling that of the occasional slug he confronts on our garden path.

Oscar’s metamorphosis when walking with Delmar is not unlike some small businesses. When they get around larger businesses, they develop more of a spring in their step. Large customers, large suppliers, large potential investors, and large member companies in their peer advisory group can cause the business to step it up a notch.

As a result of hanging out with Delmar, Oscar is healthier and his self esteem is elevated. He’ll probably live longer because of his new friend. He dares to try new things (like actually getting close to the creek that runs along one of his favorite hiking trails).

If there’s a downside, it’s the potential for injury as he tries to keep up with the big dogs. He could experience a heart attack, or he could develop the confidence to leap into a fast moving stream that whisks him away prematurely to doggie heaven.

Business lessons? Acquiring large customers or large suppliers or large investors, or joining a business owner peer advisory group with some larger members can be helpful to your business growth, if you’re willing to run faster to make up for your shorter legs. While it’s OK to tell fellow business owners that you are running a $10 million business, even if the best year you’ve ever had was $7.8 million, do not let that bravado lead you into overburdening the business with debt, or seriously overcommitting to large customers.

One of your challenges as CEO is to balance your view of your business against reality. Dreaming of a bigger business can be the beginning of a true metamorphosis. Driving the business considerably faster than its current capabilities allow can lead to a bad ending. The best CEO is a balanced driver.

Not Quite Broken

Many CEOs have dealt with the prospect of a business collapse

Down But Not Out

I wanted to write on this first day of 2015 about what a great time this is for the CEO to be engaged in planning.  I had planned to offer a few comments on the value of strategic planning, a discipline many of us resist.

But a couple days ago I saw the movie Unbroken.  I had read the book of the same name by Laura Hillenbrand about a year ago.

Let me explain why this changed my blogging plans.  The subject of this movie, Louis Zamperini, served in World War II as a bombardier on a B-24 in what was then the U.S. Army Air Forces.  His plane went down in the Pacific Ocean 850 miles south of Hawaii.  He was one of three crew members (out of eleven) who survived the crash.  They had no fresh water, little food, and a life raft.  He was afloat on the ocean for 47 days before reaching the Marshall Islands, where he and Russell Phillips were captured by the Japanese.  (The third survivor, Francis McNamara, had died at sea on the 33rd day afloat).  Zamperini was held captive by the Japanese, brutally beaten and generally mistreated, until the war ended in August of 1945.  He had been assumed dead and, in 1944, his parents had actually received a formal condolence note from FDR.  (His actual death occurred 70 years later, in 2014.)

Many CEOs I know have faced extremely serious struggles with their businesses as well as in their personal lives.  Some have faced life-threatening illnesses and business-threatening near-collapses.  Many have downsized significantly.  For the most part, these challenges are not quite in the same league as surviving a plane crash, then a month and a half drifting on the open sea, followed by two years of brutal captivity by a wartime enemy.  But the parallel is legitimate.  Running a business can be brutal.

There are many stories of survival that inspire.  I am in awe of the Louie Zamperini story.  And I’m also tremendously inspired by the survival of so many businesses that have been through something akin to a plane crash.

Maybe this is your story that I’m telling.  Or maybe you know somebody who has lived this scenario.  Someone who has been through hell personally or professionally but was not quite broken.  If so, I would urge you to begin 2015 by celebrating their (your own?) survival.

Quickly thereafter, get your strategic plan together.

What if your car came without a dashboard?

Great CEOs have  identified their Key Performance Indicators and track them relentlessly.Are you a better driver because you can easily determine how fast you’re traveling, how much fuel remains, and what time it is? Are you more likely to safely reach your destination because you can readily see the compass direction of travel and because you’re immediately alerted to a loss of oil pressure or tire pressure?  Does the dashboard improve your overall ability to travel efficiently and effectively?  Would you be upset if the auto manufacturers decided to reduce the cost of their vehicles by eliminating all the instrumentation and alarm lights?

Now consider your business dashboard. Have you identified and do you regularly review your key business performance indicators (KPIs)?  Here’s why every CEO should:

  • Identifying your KPIs forces prioritization of data.  The total data available can be overwhelming and you have to keep your eyes on the road.
  • The correct KPIs provide a regular monitor of business historical performance, as well as the outlook for the short-term future. They enable you to stay on track.
  • The habit of routinely reviewing your dashboard (KPIs) creates a powerful sense of having your “arms around your business”, regardless of how well or how poorly the business is currently doing.
  • Your dashboard provides a jump start for when you need to:
    • Create a long range business plan
    • Create a marketing plan
    • Apply for a bank loan
    • Discuss the business with a potential investor
    • Interview a candidate for a key position
  • As a habit, your review of your KPIs is an excellent accountability tool for you personally as well as for your entire business.

You wouldn’t drive your car without a dashboard. Is it any less dangerous to drive your company without one?

A Costly Entrepreneur Mistake

CEOs participate in professional conferences, trade association meetings, and industry gatherings In late August I participated in the annual conference held for the benefit of TAB facilitators worldwide. Since 2002, I’ve missed this conference exactly the same number of times that I’ve forgotten my wedding anniversary.

As in years past, I came away with several pages of prioritized notes listing possible strategies and tactics for improving my business. I accumulated these during the assortment of presentations, breakout sessions, and casual networking that takes place at every conference.

As I reviewed my trove of takeaways on the flight home, it occurred to me that I seldom hear from my business owner friends and clients about their awesome experiences at their industry meetings, trade associations, or professional society meetings. I’m thinking that’s because they don’t attend.

There is a tendency for an entrepreneur to start or acquire a business and then proceed to become so buried in the work that they cannot get away to sharpen their saw at an industry conference. This is a symptom of the “too busy working IN my business to take time to work ON my business” disease.

If you don’t participate in industry-wide sharing of ideas and practices, you’re starving your business. This business starvation condition presents as the sound of anxious breathing or wheezing.  Unfortunately, in most cases, the source of that sound has proven to be the business owner.

Lesson? Stay connected to your broader industry or profession!

By the way, I’ve never forgotten my wedding anniversary.

Is Your Dehumidifier Working?

CEOs must stay current with technology

New Technology

I bought the dehumidifier in 1979, and it lived in three different homes over the years. When I finally decided to retire it, the machine was still working! That is, when I plugged it in, the compressor began running. If the temperature of my basement was below about 75 degrees, the coils would freeze up. The simple on/off switch no longer worked. The control knob for adjusting the humidity setting did not work.  When running, it was very noisy and threw off a lot of heat.  But it still removed moisture from the air when the conditions were right.

The new unit I bought 35 years after the purchase of the old one works better.  It removes more moisture, more quietly, radiating very little heat, under almost all operating conditions. And I can run a hose to the basement sump for continuous draining. With the old unit I had to empty the bucket twice daily because the plastic hose connection was stripped long ago and leaked.

I know CEOs who, like me, stick with the old technology too long. The ancient computer operating system causes all kinds of interrupts and lost productivity. The phone system is cumbersome for customers as well as employees.  The printer/copier/scanner still prints, although the paper feed jams regularly and the scanner feature has never worked right.

Inertia and penny-pinching sometimes combine to make us stupid.  Running a great business requires relatively current technology.  What’s your dehumidifier?