Archive for October, 2013

Advisory Boards – 4 Tips For Success

Tuesday, October 29th, 2013

As the business owner, who can you turn to for advice?4 tips to help set up Advisory Boards successfully

It can’t be someone who works for you. Your spouse or other family members may not be willing, or able, to help.

It could be a peer – but they may have challenges of their own. And who wants to hire a consultant?

So, what’s left?

There is one resource I haven’t mentioned. It’s commonly linked with start-ups, but I find it can be very useful when companies plateau.

It’s an Advisory Board.

Unlike Boards of Directors, Advisory Boards aren’t for life. You can keep them running for as long as you want – or need.

Here are some tips for setting one up.

1.  Membership. Based on our experience helping set up Advisory Boards, I’d suggest recruiting no more than 5 or 6 members.

Find people who complement your skills and experience. Invite someone who has already grown her or his business to the size you’re aiming for. Consider also asking your accountant; someone (e.g. from an industry association) who knows your markets; a supplier of non-competitive products to your customers; and even your banker.

Make a list, identify the person the others will want to work with and approach him or her first.

2.  Compensation. You may be surprised to find that most people are flattered to be asked to join an Advisory Board.

That doesn’t mean you should expect them to do it for free. But you don’t have to offer excessive compensation either.

Remember they will incur costs to get to meetings and they will be giving up another activity to be there. Recognize that by offering them a couple of hundred dollars and a decent breakfast, lunch or dinner at each meeting.

3.  Set goals and expectations. Meet once a quarter, for no more than 2 or 3 hours. Explain that you may also want to talk to them individually between meetings if an issue arises specific to their expertise.

Publish the agenda and circulate any reading materials the week before the meeting. Appoint someone who is good at keeping meetings on track and on time to run them. Once a year, ask the members what they think of the meetings and make changes based on that input.

Make it clear that you want them to provide valuable advice but that you’ll make the final decisions. They hold no legal or financial responsibility for those decisions.

4.  Build (or strengthen) your relationships with board members. If you’ve chosen well, your members can connect you to people in their networks (including potential customers).

But they can also introduce to, for example, new software or technologies and make you aware of grants or programs that provide funding.

You can read more about Advisory Boards here and here. Ignore the references to start-ups; it’s good advice for everyone!


If you enjoyed this post you’ll also enjoy I’m Not Alone…….

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3 Decisions Every Business Owner Has To Own

Tuesday, October 22nd, 2013

I saw an article last week which argued that there are 3 decisions that CEOs of corporations cannot delegate.3 difficult business decisions that must be controlled by CEOs

They are decisions about goals, allocating resources, and people.

That got me thinking.

My first reaction was that business owners are less likely than corporate CEOs to delegate these decisions in the traditional sense.

In other words, owners won’t allow their management teams to make decisions about these 3 areas without their direct involvement.

But then I realized I was wrong. There is one set of circumstances in which some entrepreneurs do exactly that.

When they first begin to work with a management team, some business owners believe they have to take a completely “hands off” approach, allowing their management team to make decisions about all aspects of the company.

That’s not delegation, that’s abdication.

And most of those owners take control again when actual results don’t match their expectations.

Coming back to my original train of thought, however, I do believe that entrepreneurs “delegate” decisions about goals, allocating resources, and people by omission.

They become immersed in day-to-day operations to such an extent that they don’t:

•  Regularly allocate time to set goals, review progress against them and make adjustments when necessary.
•  Allocate the financial and other resources to the initiatives, activities, projects that are going to have the greatest impact on the company’s future.
•  Deal quickly with situations in which they have the wrong person in a key position. That may be because they can’t admit they made a mistake putting the person there in the first place, they have misplaced loyalty to a long-term employee, or because they’re a relative.

It’s hard to have the discipline to regularly step back from the crises of the day to objectively review performance and plan for the future.

It’s also hard to find a technique or process that produces plans which can be turned into actions, which yield the results the owner wants.

And it’s really hard to look someone in the eye and tell them that they’re not doing what is required of their position.

But because something is hard to do is not a good reason for not doing it.

The article that got me thinking can be found here.


If you enjoyed this post you’ll also enjoy 8 Things That Hinder Growth.

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What’s The Best Strategy – Grow The Core Or Expand?

Tuesday, October 15th, 2013

Is there a right way – and a wrong way – to go about growing a business?Do you grow the core or expand?

There has to be, because some companies try to grow and fail.

I believe there is one thing that is common to all companies which grow successfully.

But businesses have to grow and succeed in a complex world where multiple, sometimes conflicting, factors are constantly at work.

One question we’re asked often is, should a business owner focus on growing the core business or expand into other areas?

The answer isn’t simply yes or no. It’s “it depends on how you do it”.

Be sure you know what has made you successful

Before looking for new areas to expand into, it’s essential to really understand precisely what has made the business successful.

We see business owners assume they know why their company is doing well all the time. But the wise ones look for verification of their own thinking before plunging ahead.

They get input from customers, suppliers and even peers, whose perceptions are invaluable. Those groups add a perspective which people inside the company simply cannot have.

Then the owners set aside time to think through what they’ve learned, discussing it thoroughly with their management teams and advisors.

Once they know what has given them their competitive edge, their core competencies in consultant speak, they can look for opportunities while greatly reducing the risk of making a mistake.

For example, if you’re great at customer service and being a high-quality producer, don’t try to become a low-cost value player.

Then use that to evaluate new opportunities

Opportunities can be evaluated by looking at their attractiveness and the probability a company can be successful. (Download our free guide here.)

A key factor in the probability of success is whether or not a company’s core competencies not only match the key requirements for success – but also exceed the strengths of its competitors. Clearly, opportunities that aren’t consistent with a business’ core competencies are too much of a stretch for it to be successful.

That’s when the business owner must be ruthless and just say no.

Otherwise those “opportunities” will become black holes of time, effort, and money and the company will likely fail.

Focus on the core and expand – but with care

We know that all products and services have a life cycle. So it’s important for a business owner not to rest on his or her laurels.

It’s important to strengthen, grow, and defend the core business by developing new products and services.

But it’s also important not to miss out on potentially great new growth opportunities.

Do it by understanding what you’re good at – and building on that.


If you enjoyed this post you’ll also enjoy Are Your Core Competencies Coming – Or Going?

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Have A Great Strategy? Are Your Employees Defeating It?

Tuesday, October 8th, 2013

Did you know that:Are your employees defeating your great strategy?

•  Less than half of your employees are familiar with your strategic goals¹?
•  And even the ones who are can’t list them?

How big a problem, for you as a business owner, is that?

Good question.

Goal alignment, or understanding how their work is impacting and shaping the company, leads to more engaged employees.

And only 30 per cent of workers are engaged in the workplace².

But what “real” impact does that have?

Well, another Gallup study found companies with disengaged employees had a 51 per cent higher employee turnover rate.

It also affects absenteeism. In the UK, employees who are engaged take 2.69 sick days on average, while disengaged employees are missing an average of 6.19 sick days per year³.

Getting the picture?

So, what do you do about it?

I’d suggest 3 things.

1.  Communicate, communicate and communicate.

•  Get representation from employees at all levels and areas involved in the development/update of your strategy.
•  Then spread the word throughout the company using town hall meetings; breakfasts or pizza lunches with one area at a time; and in one-on-one meetings. Repeat, repeat and repeat.
•  Insist your direct reports integrate their goals, and the goals of every single person in their area, with the company’s strategy. And that they communicate them as thoroughly as you are doing.
•  Do the same thing after each quarterly review.

2.  Use a project management tool, for example Basecamp, to track progress against each department or area’s goals. Open access to everyone so even the most junior employee can see what’s going on. Consider one of the talent or performance management platforms that are popular at the moment. We’re looking at several of them very carefully.

3.  Do the first 2 and it will be easier to figure out if, and where, you need additional people. You can use this insight to draft the job description so you hire the right skills and experience – and focus the new employee so they get up to speed more quickly.

These are some of the things we’ve been telling our clients for a long time now. So it’s always nice to see a higher profile third party saying the same thing.


¹ A recent study called “How Leaders Grow Today” conducted by Clear Company and Dale Carnegie
² “2013 State of the American Workplace: Employee Engagement Insights for U.S. Business Leaders.” Report on a survey by the Gallup organization.


If you enjoyed this post you’ll also enjoy 4 Simple Styles Help Get Great Results……

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One Way To Destroy A Family Business

Tuesday, October 1st, 2013

Do you recognize this individual?Coddled offspring can destroy a family business

Well-dressed, well-groomed, drives a late model luxury car.

May be charming and pleasant. In some cases, however, they can be arrogant, abrasive and (over) confident.

Not yet, too vague? OK, here are some other clues.

He or she has:

•  Worked exclusively in their family’s business.
•  Reported directly or indirectly to a parent for most, or all, of their career.
•  Never received 360-degree feedback on their performance.
•  Been promoted beyond their capabilities.

In addition:

•  They’re paid above the market-based compensation for their position.
•  Their behavior is often outside the boundaries of acceptable value-based behavior of the company.

Now are you closing in?

At one time or another, professionally or socially, we have all met the coddled or pampered son or daughter.

Some might say they’ve been spoiled. I’m not sure it’s that simple.

Here’s the point. In the eyes of the doting parent they can do no wrong. But, in reality, they inflict damage on the family business. And the longer they are around, the higher they climb, the greater the potential for them to do fatal damage.

Non-family employees react in one of two ways. Those who need their income find ways to keep quiet and live with the situation. Those who are mobile move. Both outcomes hurt the company.

The only people who can fix this situation are the other family-owners and, possibly, long-term employees who have earned the deep trust of the business owner.

The owner/parent will not thank them for doing so. In fact the parent’s initial reaction can range from dismissive to very angry. However, if the parent doesn’t come to terms with the situation, they risk losing all of the family wealth tied up in the company.

What can be done?

We tell our clients to let their children go and work in another company before they start, full time, in the family business.

Ideally, they work in a corporation where they get honest, regular feedback about their performance. But another family business will do – provided 2 conditions are met. It’s using performance management systems and the owners are neither friends of, or related to, the owner/parents.

For the owner/parents themselves it’s a little harder. Getting perspective on their children’s, or other family members’, abilities and performance, from a third party the owner can trust to be objective, is the best thing. A member of an Advisory, or traditional, Board can be very useful for that. But a friend or long-term business advisor can fill the role too.

Final words

When over-protected children are asked to leave the family company they often find it a great relief. They know they were in over their heads.

Ironic isn’t it?

You can find the article that inspired this post here.


If you enjoyed this post you’ll also enjoy Why Conflict In A Family Business Is Bad For Strategy

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