Tag Archives: Business Owner

Your Black Labrador

oscarexposed

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.

A Big Fish in a Small Pond?

small business hiring corporate manager

Salmon Coming Home

Not long ago I read John Dini’s excellent blog post on importing a manager from a large organization into a small company. When I recently heard a tour guide comment on sockeye salmon migration, it brought to mind John’s exposition. Let me explain.

The tour guide had declared that as the salmon return from the vast ocean to the stream where they were hatched, they must make the transition from salt water to fresh water. He highlighted the fact that, as they entered the brackish waters near the mouth of the river or stream, they lingered – maybe days, maybe weeks – allowing their body to make some important adjustments to their new environment. [Although I have no empirical evidence to offer, I suspect the percentage of salmon making it all the way home has increased since the advent of those navigational apps for their cell phones. I mean, really, how do they find their way back? But I digress.]

It’s been my experience that a significant percentage of the Corporate Migrants decide to return to the sea, or are asked to find another body of water in which to swim.

As a business owner, you may have several good reasons for wanting to bring an experienced large-company person into your fold. Their background in systems, in planning, in structuring, and in thinking broadly about crucial decisions can be invaluable to a small business management team. If you are positioning the business for your own eventual exit, they bring an outside perspective and professional expertise that can be very attractive to a potential buyer. However, in the words of Paul Simon, “…a man hears what he wants to hear and disregards the rest.” True of business owners, be they men or women. So don’t disregard the risk that the imported large catch can also be ineffective or even disruptive.

Like salmon, some who leave Corporate America are indeed returning home. They see small business as a better fit for them, for whatever their reasons, and they are correct. Others, however, are simply looking for a resting spot prior to returning to the sea. Your recruiting, hiring, and onboarding processes need to take this into account. Here again, you will likely be tempted to hear what you want to hear and disregard the rest because you consider the candidate such a valuable find. In truth, you may be flattered that they would even consider coming to work for you. Get past that. Dig deep to try to determine all the motivations for the candidate’s interest in your company.

Then, if you both agree to move forward, bring them aboard in a manner that allows them to acclimate. Both the migrant and the organization need time to make adjustments. They will probably see many areas where changes would strengthen your organization. But they also have the potential to damage a healthy culture in the process of pushing for change. You are the filter through which their initiatives must pass. It’s your job to help orient the new hire to a significantly different environment. If, after a fair amount of time in your brackish waters, they are not meshing, it becomes your job to return them to the sea. By that time, they have probabl come to the same conclusion, even if they haven’t yet admitted it to themselves.

I’m not saying you should never bring a Corporate manager into the fold. I’m saying be diligent if you do.

The Long and Winding Road

business planning

Indian Creek Trail – Hood River, OR

How does that Beatles song title grab you as a description of your business journey?

Earlier this year, my wife and I moved to a new state and a new home. The house itself is situated adjacent to the Indian Creek Trailhead. The first time we hiked this segment of the trail, I knew generally where it ended, but of course I had never actually made the journey. As we began our short expedition, certain attributes of the trail became evident. The path itself was dirt in some places, gravel in others, with various amounts of pine needles and leaves covering it (as well as an occasional bit of dog poop). It was a winding trail since it was following a creek, and our trek was compounded by many ups and downs. Seldom could we see more than a hundred feet of trail ahead.

I have had countless discussions with business owners regarding the relative merits of business planning. The winding road metaphor is a good one for arguing how much business planning is optimal. Any business journey is filled with twists and turns, hills and valleys, good footing and poor footing. The important thing is to determine the general direction you want to head. The planning process is paramount in establishing this destination or waypoint. It’s key to deciding major strategies for how you will move in the direction of your goals. But the unpredictable nature of the path itself renders detailed planning useless.

We’re just over  halfway through the calendar year. Summer is always a good time to review how you’ve handled the surprises of your snaking trail thus far, and to recalibrate your compass.

What Will You Tell the Kids?

“So why did you fire Tricia, Dad?” Trevor knew Tricia’s son, and the story was already circulating at school. Pete didn’t respond immediately. When he did, he immediately felt that his answer was inadequate.

“She just wasn’t up to the job,” he finally said.

“I don’t know what that means” said Trevor as he headed out of the room.

That’s where the conversation ended. But Pete’s rethinking his decision had only just begun.

When you have faced a really tough decision in your business, have you ever considered how you would explain that decision to your kids?

A few CEOs find crucial decision-making relatively easy. Almost nobody finds making good crucial decisions easy.

If you want to not only improve your decision-making, but also improve your mood following a crucial decision, you might try applying “the kids test”. Regardless of the current age of your children, test your tentative decision by thinking through how you would explain the decision to your kids, once they have attained the age of reason (for some that’s about 12, for others, more like 42). Apply it to virtually all your tough business decisions. The circumstances surrounding my opening example drag the son into the conversation in a way that does not normally occur with your business decisions. That’s not important. Try forcing yourself to boil down your explanation of any decision to language that an innocent who does not work in your business would understand.

The reality is that your kids are not likely to ever ask you anything about your business or your career. OK, occasionally one will ask, but only when they think you’re on your deathbed. But that’s not the point. The mental exercise I’m suggesting can be an effective tool for you.

Try it right now. Pick a tough decision you’re in the process of making and implementing. Find a place where nobody except you can hear you, and explain – out loud – why you have made the choice you have made. Critique your own explanation, and do it over until you’re satisfied that your defense of the decision is fundamentally sound.

Let me know how it goes.

Analysis, Anxiety, Action

Yacht“He seemed to understand my business, but…”

I was sitting with a CEO of a $4 million business several months ago. Call him Jay. Like many small business owners looking for continued growth, Jay was wrestling with a thorny decision. He had contracted with Kevin (not his real name), a marketing consultant, to develop a comprehensive marketing plan for the business. At the time of our discussion, Kevin had just presented a plan that consisted mainly of an analysis of the business’s current situation: markets served and unserved, competitive strengths and weaknesses, market position, and so forth. Jay found the data informative, but kept pushing Kevin for detailed recommendations – suggestions for reasonable sales growth goals and action steps both short- and long-term to achieve those goals. Kevin seemed to be dodging that question, instead hinting that Jay could contract with him on a retainer basis to guide the implementation of the plan over the upcoming months. Jay was wary.

This situation is not unusual. It’s not really a communication problem as much as a perception problem. Both Jay and Kevin are focused on “results”. However, Jay’s mindset is that of an entrepreneur; Kevin’s is that of an analyst. For Jay, achieving consistent growth is the result. For Kevin, defining the market and competitive situation is the result.

Stated simply, Jay wants to be reasonably confident that “If I do this, then I’ll achieve that.”

This difference in perspective is why consultants have such a challenge selling small-to-midsize businesses on their services. When they fail to secure a contract, they chalk it up to the assumption that the entrepreneur didn’t really have the money to spend anyway. But they are often mistaken, and they’re missing an opportunity to participate in this market.

In Jay’s most optimistic view, Kevin has opened the gate to the lock that can elevate his yacht to the next level. Now Jay wants Kevin in the boat, as his “marketing first mate”, for the next part of the journey.

A key to unlocking the door to a win-win consulting agreement is the willingness of the consultant to be paid on a sliding scale, proportional to the successful achievement of longer term goals.

Agree or disagree?

 

The Case of the Renegade Case

IMG_0939.JPG

I recently took a trip, several hikes, a brief leave of my senses and, finally, matters into my own hands. That’s a lot of “taking”, during which I learned a lesson about delegation. Lots of business leaders struggle with “the big D” and my sharing my personal experience might light a path or reduce some stress for you.

My wife (call her Karen, since that’s her real name) and I took several days to relax at a resort 130 miles from our home. The morning of our return trip, we packed the items we would be bringing home from the condo, hopped in the car, smiled at the blue sky, and had a series of really good conversations over the next two-and-a-half hours. Got home, unpacked, and then…are you familiar with that sudden realization that you’ve overlooked something really important? For my body, it manifests itself north of my neck. Kind of a numb feeling as my face flushes with reality setting in. Kind of warm too, but not in a good sense. I realized I had left my packed briefcase in the dining area on the floor next to the table and invisible from the front door.

I always travel with a briefcase. Always have. Can’t stand to be without useful files and magazines – not to mention my iPad – on any trip. Suffice it to say that this briefcase on this particular trip had not only interesting stuff inside, but also important and sensitive information…and did I mention my iPad?

Within minutes, I was on the phone, confirming that Housekeeping had recovered my briefcase. I quickly made up my mind to retrieve it the next day. Karen looked at me like I had just volunteered to cook dinner (i.e., in disbelief). Why would I travel 260 miles the next day, knowing I am still rebuilding my body from a back injury that can be exacerbated by sitting for long periods of time in the same position, only to personally pick up a briefcase that could easily be overnighted to me?

At first, I couldn’t explain (at least not clearly) why I had already decided to personally retrieve the briefcase. She ignored me, called the resort, talked with Guest Services, and got them to agree they could retrieve the case from Housekeeping and get somebody to take it to the Post Office. When Karen persuasively told me this, it made some sense. I really wanted some of the contents ASAP, and if the resort reacted quickly, I could have them in my possession within 24 hours. So I called Guest Services. Kelsey explained that she was trying to reach the lady who drives the van to pick up and deliver guests as well as the mail, and that she was hopeful that Cathy would return her call soon. This was about 3:30PM on a Friday and I was aware that most small town Post Offices did not stay open all night. Long story short, within 30 minutes I learned that the briefcase could be delivered to the Post Office the following morning and I was advised I could call the Post Office directly to discuss overnight delivery or other special handling for returning the runaway briefcase.

What had started to seem like a sensible approach less than an hour previously now gave way to my overwhelming feeling that I had to personally get this thing done.

Can you identify with that?

I have worked with several hundred small business owners over the past dozen years, and the tension between Control and Delegation is almost always a stress point. Very few find it easy to delegate important tasks, even though they are aware that a successful, growing enterprise requires lots of delegation.

What I realized in “the renegade briefcase” caper is that, whether it be a personal or a professional challenge, the decision to delegate rather than maintain personal control involves more than simple reason and trust. It also involves instinct…your gut. And, as any nutritionist worth her weight in tofu will tell you, your gut is very important. Going against your gut can cause extreme discomfort.

My instinct that Friday became overwhelming. The world would not end if I did not have that briefcase back in hand for three or four days. But it would have been VERY inconvenient, and my world would have been filled with stress until I got it back. I would be counting on at least three different people, more likely five or six, to get the communications straight and to protect the contents of that case.

This episode caused me to reflect on a number of discussions with CEOs regarding their resistance to delegate certain responsibilities that seemed to me at the time to be no-brainers. For example, I once had a client who ran a $50 million business who insisted on opening all the incoming mail, every day. I now have a better appreciation for his gut.

This story is not a plea for you to delegate less and work harder than ever to grow your business. Rather, it’s intended as a stress reduction aid. You don’t have to justify driving 130 miles one-way to your wife, to pick up your briefcase. You don’t have to justify opening all the mail every day to your business coach. If you gain significant peace of mind, in addition to the certainty that the job will be done in the best possible way, then it’s OK to maintain control and do it yourself. Heck, if you simply enjoy writing software code or installing systems or stocking shelves, allow yourself some time to do that fun work occasionally. It’s your business, and it’s not supposed to be 24/7 stress.

Once you pick your spots, once you select the task or tasks you will personally handle, allow any ancillary benefits to accrue to help justify your decision – and provide additional peace of mind. In my case, seeing an April sunrise in Central Oregon was a big plus, in addition to the fact that 90% of my drive time was either through piney forest or up and down high desert buttes. I’m not used to that type of scenery, and I hope I continue to hold it in awe.

If you are willing to share your own thoughts on Control versus Delegation, please do.

Long in the Tooth

Sometimes the primary job of the CEO is coachingI’m not all-in anymore. That was the latest expression from a business owner who is pondering his changing role in his business. Other lips have delivered the same message in different code: I’m not sure what my job is anymore or I seem to be focused more on my personal vision than on my business vision.

Business owners almost invariably reach a point where they are confounded about their own role in the business and not sure what to do about it. Occasionally this is an indication that it’s time to sell or give away the business. More often, however, the owner is not interested in retiring just yet – only in finding his or her appropriate role in a business that has evolved over time.

In the great American pastime of baseball, there is a parallel. As an example, Andres Blanco currently plays for the Philadelphia Phillies and is all of 31 years old. In baseball years, he’s getting a little long in the tooth. The Phillies are in a rebuilding year, and Andres is a utility infielder. The future of the team consists of younger infielders who are destined to eventually become starters at second base, shortstop or third base, if they aren’t already playing that role. Blanco plays all three positions well, but in this rebuilding season is playing an even more important role. He’s become a model for the younger players on how to conduct oneself as a major leaguer. He models and advises the younger players on everything from the hard work required for game preparation to handling post-game interviews.

That’s the parallel to the “I’m not all-in anymore” business owner. At some point, the greatest contribution you can make to your own business is to develop the younger talent. It’s to model appropriate behaviors, coach the younger employees who lack experience, and encourage those who are still learning and making mistakes. That often is a full time job for the long-in-the-tooth business owner. But even if it’s only half a job, that’s fine. Do it well, and spend the other 50% on the golf course or fly fishing or drag racing or traveling.

Andres Blanco, the mentor, will likely become a coach when he retires from playing. Coaching baseball, or coaching your younger employees…neither is a bad life.

Rebuilding Year(s)

The business owner CEO does not have the option of resigning.I’m a Philadelphia Phillies fan, which means I’m following the team with the worst record in Major League baseball right now (July, 2015). It’s a “rebuilding year” for the Phillies, a pretty rough period.

In baseball, a rebuilding year generally causes more than a poor win-loss record. Management changes are inevitable. Fewer fans attend the games. High-priced players are traded for younger, cheaper, potential-laden minor leaguers. In the case of the Phillies, all of this is happening, and more. The manager they brought on to see the team through this difficult transition grew weary of losing, and resigned. (That’s right. He wasn’t fired, he resigned.)

For the past six years, I’ve been coaching a CEO (we’ll call him Tom) who decided to take on a “rebuilding year”. Sales were flat, profits were meager and cyclical, and the competition was intensifying. Tom’s tendency was to try to do everything himself, and he longed to discover effective marketing and sales processes, areas that he considered to be personal weaknesses. His relationship with his business was unhealthy – his description: “I feel like a slave”.

Tom’s rebuilding year actually took about four. It included the following:

  1. Developed a new product that addressed a shift in customer preferences – earlier than was recognized by his competition.
  2. Pushed his VP Marketing & Sales hard to identify and grow new opportunities. When he didn’t, he was replaced.
  3. Took a personal interest in an area of marketing that was integral to their future success, and brought others in to do the work after he understood what was required.
  4. Through some trial-and-error, figured out how to recruit, hire, and mostly keep talented people needed to stimulate and sustain ongoing corporate growth.

It was a bumpy ride. The new product development effort sucked up resources that the company did not initially have (both human and financial). The development of a larger organization included the usual complement of bad hires and redirection. Boot-strapping the financing of the growth, rather than borrowing a bunch of money, caused serious frustration in the early going. But Tom persevered, knowing that neither resignation nor termination were options.

While the “rebuilding year” (four) is now in the rearview mirror, it’s not over. The vision that Tom developed for his enterprise has the entire team working towards “the next big thing” for the business. His bank account is healthy, his workforce is high caliber, and the team has a sense of direction. The need for rebuilding has been replaced by a drive to stay on top.

The Phillies should be so lucky.

Creating positive change in an organization is one of the most difficult tasks facing a CEOYou don’t have to look far to find books or articles proclaiming how to accomplish effective organizational change.  Many of these are worthy of your attention.

But if you happen to be the proponent of an upcoming change for your business, you would best start preparing by engaging in some serious introspection. Let me explain my point using a very personal example.

My own personal vision and life circumstances have recently combined to cause a lot of introspection. My spouse and I are in the throes of planning our “next chapter”. It will involve substantial change. It has caused me to reflect on a handful of some of the most important changes I have experienced since birth. Here’s a recap, ultimately tied into a business lesson.

My personal journey down memory lane led me to conclude that some of the most memorable changes in my life occurred in my youth. Changes like being pushed from the nest into nursery school; or transitioning from elementary school to junior high, where we had to change classes multiple times each day; or graduating to high school where my sophomore class size was 1100 students; or saying goodbye to a large high school and hello to a small college; not to mention seven job changes and relocations within the first 17 years after college.

Now, after living in the same home for 29 years, change finally looms again. We have grown comfortable with our house, our neighborhood, our friends, our church, and our surroundings in general. But our children and grandchildren are on the other side of the continent. Emotion suggests that we stay where we are comfortable and buy lots of plane tickets to enjoy being with family multiple times a year. Yet logic relentlessly pushes for relocation closer to family.

At this moment, the concept of change is very real and very personal. I believe I’m in an appropriate frame of mind to understand how your employees might feel when you are bringing a major change to the business or to their role in the business. I believe the most important factors involved in the inherent resistance to change are:

  • The involuntary nature of most change, viewed from the perspective of an employee
  • The relative comfort of “the present”, again from the perspective of the employee

In my personal situation, our upcoming relocation is, in a sense, forced. It’s forced by our advancing age and the anticipation of the inevitable decline in health. This makes it difficult.

Since our present circumstances are comfortable, since it will be difficult to leave good friends and familiar surroundings, score another blow for difficult change.

However, the rest of the story is more important than these two realizations. The attraction of being a larger part of our children’s and grandchildren’s lives; of being more available to help out; of being present to celebrate birthdays and holidays; is strong. The attraction to get to know new territory, to get to make new friends, to prove that we remain vibrant and significant as we approach seven decades on the planet – this attraction to relocate a couple thousand miles and make a difference in new ways also imposes a seemingly magnetic pull. And the magnets enumerated are strong.

As a business owner who is leading change, you will be most successful if you can identify with those specific fears or perceived losses that make the change difficult for each individual employee.  Then, identify and clearly articulate the “magnets” associated with your proposed change. Feeling their pain and showing them the positive tradeoff of the change should be central to your change strategy.

Paint Your Story

Effective CEOs use verbal and other pictures to persuade

Everyone can “paint”

As CEO, have you ever failed miserably in an attempt to persuade somebody to do something, or to see something through your eyes? Haven’t we all?

I subscribe to Bloomberg Businessweek.  I don’t know how long ago this magazine started including an explanation of the “Cover Trail” in each issue, but I find this feature thought-provoking as well as entertaining.  In the space of a single column, they paint the story of the current issue’s cover design. It is generally funny. More importantly, it’s engaging!

Our business lives are stuffed with uninspired communications. The content may be important, but the delivery is anemic. Sadly, it’s not only true of what we receive, but also of what we deliver (unless you are an exceptional business leader).

Whether you’re convincing your banker to increase your line of credit, or persuading your employees to embrace a new CRM system, there are two approaches that will dramatically improve your chances of success:

  1. Whenever possible, incorporate something visual into your communications
  2. When the form of communication is exclusively verbal, “paint” the story verbally.

The first approach is straightforward.  In your graphics, use photos, illustrations, artwork, and visuals of any type, in preference to words. The same applies for your remarks in a meeting where a whiteboard or flipchart is available.

The second challenge – 100 percent verbal – is more daunting, but equally important.  If you find yourself describing your software development business in techno-speak to a new prospect, chances are they are not going to get it. Instead, force yourself to use phrases like “imagine that it’s payday and your payroll system just crashed”; or “one of my most memorable moments was when my toughest client actually initiated a ‘high five’ with me the day after we went live with his new software package.”

A picture, drawn or described, is often worth much more than a thousand words. It can make the difference between success and failure in persuasion.