Posts Tagged ‘weaknesses’

The People Pipeline

Thursday, February 9th, 2012

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Of all the interesting and valuable things Tony Hsieh says about managing people in his book “Delivering Happiness” for me, one concept stood out.

That was “The Pipeline”.

Hsieh makes the point that, unlike many companies, Zappos doesn’t believe that (individual) people are an asset. They think of a pipeline of people with varying levels of skill and experience as the asset.

Here’s why I really like this approach.

It Solves 3 Fundamental Problems

First, traditional thinking is that people are a company’s greatest asset. But if an employee leaves, the company has lost an asset.

The second problem (which we see all the time) occurs as a company grows, an employee who was considered valuable, or even outstanding, at an earlier stage of the company’s life begins to disappoint and become a liability. It’s usually a result of the employee not developing or upgrading his or her skills as the company grows.

The third problem occurs when the company deals with the other 2 problems by bringing in someone from outside the company.  The new person may bring the right skills and have great experience – but they don’t fit the company culture.

The “People Pipeline” Solution

  • Bring almost all new hires in via entry level positions. This offers two benefits.
    • If they aren’t a fit for any reason the company faces the least expense and disruption by making another quick change.
    • Entry level positions will likely attract people with limited experience. The new employees are more likely to be open minded about adopting the company’s processes – and culture.
  • Provide a comprehensive training program and mentors for the new hires. Then offer a series of courses, either internally or at local colleges, which cover the skills the employees will need in order to progress in the company.
  • Make the route upwards quite clear.
    • Set expectations around when employees can expect to achieve each level.
    • Make completion of certain courses a pre-requisite for promotion.
    • It helps if a company is growing at the rate Zappos did (and is doing) – that generates lots of new positions in the org. chart. However, positions further up the organization will become available as people move on (natural attrition). At this point a business owner could argue that all of the investment in that person has been lost. That’s possibly true – but every company loses some employees (e.g. they move to another city, make a change in career).
    • By investing in training and offering a career path a company may keep those who would have drifted away for much longer.
  • With the pipeline there is always someone ready to fill the shoes of the people who do leave, who have been training for the opportunity and who know the culture.

A Couple of Points to Consider

When Hsieh arrived at Zappos he was an experienced, successful business manager. And he brought one or two key management team members from his previous company – most notably his CFP – with him. So at least some members of the management team knew each other’s strengths and weaknesses and that they could work together.

On the other hand, one of the original Zappos team, Fred, joined as a buyer and rose to become a senior executive.

The pipeline can only be used when a company reaches an appropriate size. A start-up doesn’t have the resources.

If you enjoyed this post you’ll like 10 Strategy Tips from Tony Hsieh.

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To Be Or Not To Be…..In The Room That Is

Tuesday, June 28th, 2011

Should senior management be in the room during a session to identify the company’s strengths and weaknesses? That’s a question we’re asked quite often when we facilitate business planning sessions.

So here’s our point of view – and if you don’t agree with it, feel free to leave some comments telling us why not.

1. It’s an “all or nothing” question.

Regardless of who raises the question – the senior management team or the employees invited to the meeting – it’s often accompanied by the suggestion that management “leave the room at some point”.

That may seem like a fair proposal. But is it? Or is it just a way to make a difficult situation seem better?

How do you decide when management should leave and when they should come back? Because how does leaving and returning address the real issue – which is that the people invited to attend don’t believe they can be frank when the senior management team are present?

Management should either not be there at all or should be there all of the time. And the only way to make that choice is to tackle the real issue.

2. The real issue is………

The question is really about trust. The attendees don’t want to say certain things for fear of either not being understood and/or believed. And yes, there’s also the fear of some form of retribution – from being considered negative to being branded a troublemaker

We usually encounter the question when we work with companies whose revenues and profits have been dropping. They may even be losing money and have been through a period of “right-sizing” (according to management) or “downs-sizing” (according to employees). Or in companies where there has been a change of owner.

Both are examples of situations where change has caused uncertainty or where the management team thought that communication was regular and thorough – but the employees didn’t.

3. So how do you tackle it?

It is best done with a mixture of openness, logic and an outside perspective.

Everyone has to agree that the lack of trust exists.

The management team typically understands the value of the employees input and participation. But they also have to know how to act. They have to listen actively; comment only when appropriate; and watch the tone and language they use when responding to employees’ comments.

The attendees can usually be persuaded to suspend judgement until they are convinced that the management team is listening; not dominating the conversation; and not simply forcing their views on the employees.

If the meeting isn’t managed carefully all input/conversation will die. But if it is, then both the employees and management team will learn and trust will grow. Using an external facilitator can help

Logic and common sense dictate that, regardless of whether senior management attends the session or not, they are going to see the output. And they are unlikely to use it to develop a strategy without editing it. That output will only form a strong foundation for that strategy if everyone is in the room for the discussion and there’s been a frank assessment of the company’s strengths and weaknesses.

As a third party we can, for example, point to the investment being made in the session and that it is the first step in developing a growth strategy to secure the future of the company.

4. Final words.

The management team must be in the room. But they have to understand that when the culture is changing most people are confused and uncertain. And when they’re uncertain they usually avoid anything they consider risky.

The attendees have to understand if they don’t speak up they have to take responsibility for not giving management the chance to act on their thoughts.

The Strategic Management Of Intellectual Property Rights

Thursday, May 12th, 2011

Our guest this week is James Minns, senior counsel at Shibley Righton LLP.  He serves as leader of 3 practice groups: the Intellectual Property Practice Group; Media, Arts & Entertainment Practice Group; and Insurance Practice Group. He is a top legal mind in the area of copyright and rights protection, and has represented major clients in technology, media and telecommunications.

What are Intellectual Property Rights (IP) and why are they important?

Intangible assets such as patents, trademarks, copyright, industrial design and trade secrets have become an increasingly important and valuable part of trade and commerce in our modern economy.  The strategic management of intellectual property rights (IP) has to be top of mind for business owners and managers in all manner of commercial transactions.

Why do you need IP Audit?

The strategic management of IP begins with an IP audit which allows management to determine the scope of the company’s ownership interests in various assets, set their fair value, and to make informed decisions on future actions and transactions.  The necessity of protecting your intangible assets becomes more pressing as the company expands, enters into complicated transactions with global third parties, and as more goodwill becomes attached to the company’s name and its products.

What is an IP audit?  An IP audit is a systematic identification, review, and evaluation of all the IP owned, used, and proposed to be used in and/or acquired by a company.  The overall purpose of an IP audit is to identify and assess all of the company’s intangible assets in order to conduct a SWOT analysis to determine the valuable core assets and optimize their usage through a systematic long-term strategy.

What is the IP Audit Process?

The steps that are involved in an IP audit include information gathering through data collection and personal interviews.  Data collected might include copies of product brochures, product notes, advertisements, release notes, signage, labels, tags, and assorted agreements. They will also include documents such as marketing files, federal registrations, foreign registrations, government contracts, license and maintenance agreements, consultant agreements, employee agreements, distribution agreements, supplier agreements, and purchase orders.

Information gathering is followed by a process of research and review.  Consideration is given to registered and unregistered IP. Federal registrations are not necessary in order to assert ownership interests in IP. Actually, it is imprudent to register all of your intangible assets since not all the IP will be worth the investment.  Registrations are valuable in that they give rise to a presumption of ownership and provide a broader scope of protection.

Searches should be conducted to reveal any pending or threatened litigation or other proceedings against the company’s IP rights. It is important to effectively deal with such proceedings in the early stage as they could get more complicated with time and significantly lower the value of a company’s IP.

All the relevant contracts or agreements will be reviewed to assess whether they provide adequate protection to the company’s intangible assets and whether they protect the company from infringing against third party rights in IP.

Some questions to consider.

All the information gathered from the data, interviews, searches, and review will be consolidated and analyzed to properly evaluate the company’s IP rights and make informed decisions. The following are some of the questions that may be considered at this stage:

  • Given their strengths and weakness, what is the value of the intangible assets?
  • What are the core intangible assets and how should they be managed and developed?
  • What are the intangible assets that should be abandoned given their weaknesses and/or risks?
  • Do some product offerings infringe the rights of third parties? If so, how much alternation in the design is necessary in order to protect the company’s products against infringement claims?
  • Could we use variations of our trademarks without losing their distinctiveness?
  • If others are using variations of our intangible assets that infringe on our rights, how should we approach these problems?
  • Are there unregistered intangible assets that should be further protected through registration? What are the assets, if any, that no longer require the protection of registration?
  • How can we effectively protect our confidential information through contractual provisions?
  • How can we effectively protect our ownership interests in our intangible assets as against our employees and consultants?
  • What would be the most effective means of storing, organizing, and presenting the data on intangible assets?
  • Is a tickler system necessary so that the company personnel may be alerted of important dates in relation to IP registrations?

The outcome and benefits.

The final product of an IP audit is a catalogue of registered and unregistered intangible assets that would allow for a quick reference to discern their registration status.  A written report will be prepared summarizing the results of the IP audit. Recommendations will be made in relation to strategies to minimize IP risks and to maximize, protect and enhance the value of the company’s IP.

You can contact James at 416-214-5259 or at jeminns@shibleyrighton.com

Give Yourself A Chance in 2011

Thursday, November 18th, 2010

Last week we sent a survey to over 600 people in our database and asked for their input on 6 things that we think may impact their performance in 2011. They were the Canadian economy; the US/global economy; changes taking place in their industry; competitors’ actions; finding people with the right skills and experience; and the ability to secure financing.

We also asked the respondents if they expected their profits to increase in 2011. Over half of them said yes. Their fairly positive outlook is similar to, but more cautious than, the mood in recent survey by accountants PriceWaterhouseCoopers (PwC)[1]

When we asked the participants how they thought they will do against their goals and expectations for 2010, half said they would miss them.

We closed the survey by asking 2 questions about a key internal process for growing companies – business planning.

About a third of respondents told us they finish planning 2 or more months before the new fiscal year begins. Another 30% complete their planning during the month before the fiscal year begins. The remainder only complete their planning during the first month of the new year, or later.

Then we asked the participants if they used a structured planning process, an unstructured process, or no process at all.  Almost 40% said that they have a structured process, while only around 15% have no process at all. The remainder said they have an informal process.

The answers to the last 2 questions could be influenced by the size of some of the companies responding to our survey. However, it is tempting to speculate that the companies (every participant works for a different company and 75% of the respondents said they were the owner of the company) who expect to miss their 2010 goals are the same ones who leave planning late and have either an informal process or no planning process at all.

But a sample of individual responses showed that many companies who will miss their 2010 goals say they have a structured process and finish their planning before the start of the fiscal year.

Clearly this raises some questions, such as;

  • How well did the companies gather information about the external environment?
  • How realistic were they about their strengths and weaknesses and the quantity and quality of the resources they had?
  • Were the assumptions which formed the basis for their goals/ expectations/forecasts overly optimistic?
  • How well did they actually execute on their plans?
  • Is some combination of these 4 at work?

And if the companies which have a structured process and plan well in advance of a new fiscal year still miss their goals – what chance do those with an informal process who leave planning to the last minute have?

I wonder how many of those companies will actually increase their profits in 2011!

Give yourself a chance next year, download our 2011 Business Planning Checklist

If you want more information about the survey, or would like to participate in the next one, contact us at growprofits@profitpath.com


[1] “The new business as usual. The Business Insights Survey of Canadian Private Companies 2010” PriceWaterhouseCoopers

“You Can Achieve Any Result You Want To……”

Wednesday, September 29th, 2010

If you’ve read any of my earlier blog posts you’ll know that I play golf. I realize that not everyone shares my enthusiasm for the game so you will find absolutely no discussion of the technicalities of golf in the following paragraphs.

In fact, if you want, you can substitute any game you personally prefer and still get the benefit of the points I’m going to make.

At the beginning of the summer I decided that my golf really had to improve. As a result, I took some lessons from someone with the experience to help me improve my swing. He turned out to be a terrific teacher who not only helped me improve my practical skills but also gave me confidence in my ability to become a “decent” golfer.

At one point, when we were discussing my goals, he said to me “You can achieve any score you decide to.” These were words of great encouragement for me. When I thought about it later I realized that he was pointing out two things:
• I alone had control over how much of my potential I realized.
• My attitude would play a large part in determining how good I actually became.
Adrian also told me that I had to practice hard, 2 or 3 times every week.

I’m sure you can see where this is going.

After taking stock of my personal strengths and weaknesses as a golfer, he gave me the opportunity to develop a better swing by avoiding the threats of a bad grip, bad posture etc. (OK so I lied a little bit about golf technicalities.) This was the golfing equivalent of a business owner developing a strategy for growing her/his company.

But actually making an improvement in my game would depend on how well I executed that strategy – the consistency of each swing at the ball (a process); how often I practiced (implemented the action plan) and how I adapted to what happened on the course each time I played (regular reviews using feedback from actual results). Also similar to the things a business owner has to do when he/she is growing a business!

I don’t want to draw this metaphor out for too long so let me tell you what happened. For a number of weeks I practiced regularly, improved my swing and learned my lessons when things didn’t work out during a game. My scores steadily got better.

Then, just as happens so often in business, things began to get in the way. I had to go to the UK, then we had house guests arrive. Work was being crammed into early morning and late night sessions.

I stopped practicing regularly (lost focus on my action plan) because I “had” to deal with these other things. My performance on the course (that great golf marketplace) and my scores began to slide again. I did wake up before I’d fallen too far behind (that razor sharp analytical mind at work). And I have improved, but not to the extent that I might have done, could have done, should have done.

I fell into the classic trap that we face as business owners – the day-to-day, tactical stuff took more of my attention than the strategic stuff.

So, the lesson I’ve learned this summer is that I have the potential to achieve a “decent” score in golf. I was certainly able to develop a better strategy (swing) than I’ve ever had before. But my attitude to execution meant I didn’t get to reap the full benefit of my strategy.

But I am now keeping a keen eye on the execution of my business plan (see Physician Heal Thyself)!

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