The Time Thief
Business Concern
We have all been there. Rearranging the deck chairs on the Titanic. There was always an unspoken vision – never written but certainly desired. But things got in the way. The problem was that so many issues came up. There was never a quiet period when things could be thought out. There was never enough time to do it right. Then there was no time at all, and what we were doing was too little too late. How many business owners have you been aware of who have never derived full value out of their business? Some owners could not realize their business dreams because of a health issue or burning...
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Delegate – Unlock the Maximum Value of Your Business
Business Concern
Owners of small to medium sized businesses often find it hard to delegate management tasks. This is especially true of founders of the business. Here is a critical truth: to the extent you are engaged in management of the business, you are decreasing the value a buyer will pay for the business. A buyer wants a business that runs itself, not one that depends entirely on you and other owners. Full delegation of management responsibilities is not just a way to reduce your stress; it's part of Prior Diligence, a strategic move to unlock the maximum value of your business through a successful sale....
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The Risks of Not Implementing an Owner Agreement
Business Concern
Owners of small to medium sized businesses want to realize the maximum value for their business interests. There are many risks preventing realizing maximum value for a business interest – most can be avoided by the implementation of an owner agreement. Where an owner does not hold a controlling interest, there is the risk that the owner will not have control over the outcome of certain business transactions that may diminish or terminate the owner’s interest. There is an increased risk of misunderstandings and conflicts. Where there is no written owner agreement, there are no defined...
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Lightning
Business Concern
I like to walk my dog, but the other day when the time came, I decided not to. The disappointing reason was that when I looked outside, I could see lightning and hear thunder. At the same time, I saw my neighbor outside walking his dog and looking very unconcerned. I later learned that during the storm lightning caused a fire in a house near ours. I did not regret my decision not to go outside, but I do not think my neighbor regretted his (he was unscathed by lightning, and his dog was able to go on schedule). We all have levels of awareness when we are more aware of foreseeable, adverse...
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Business Failure
Business Concern
One in four private sector U.S. businesses fail within their first year of operation. After five years, almost half (48%) have failed. After ten years, the failure rate is 65.3%. (According to data from the U.S. Bureau of Labor Statistics.) Generally, businesses fail when they run out of cash. Cash flow is a metric indicating how money is coming in and being spent in a business. Marketing decisions influence how much cash comes into the business. Operations and growth decisions control how the money is spent. Good decisions made about cash flow will prevent business failure. Small to medium...
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Discovering the Owner Agreement for Your Business
Business Concern
Where there is a small or medium sized business with more than one owner, there is an owner agreement. It may not be obvious – in most cases it is not written. But for any multi-owner business the owner agreement must be there for the business to function. To start a business there must be agreement about the business entity to use, the initial capital, the basic governance, and the operational functioning of the business. In various documents regarding these matters there will be writing documenting the decisions made by the owners, but most owners do not document the basic strategy that...
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Where to Find Help
Business Concern
As the owner of a small to medium size business, you may have felt the need to ask for help but not felt comfortable doing so. Owners of businesses are often skilled in the business they own and enjoy the respect of their family and friends. If their businesses are successful (profitable), it is usually based on their leadership and good fortune. But things change and sometimes the successful are faced with difficulties and even poor results. The humility it takes for an owner to recognize that business is a team effort and that the policy-making group of a business needs help is a principal...
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Creation of Wealth for Business Owners
Business Concern
Among the common goals of members of a capitalistic economy is the creation of wealth. This is often a reason why people own businesses. For an individual, the concept of wealth creation is the escape from dependence on earning funds for current expenses to live a certain lifestyle to building up assets and resources that appreciate over time and are of a magnitude to sustain that lifestyle or a better lifestyle without the need to earn funds for current expenses. Creation of wealth is a reference to accomplishing financial independence through the creation of passive income from investments....
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When Planning Becomes Dynamic
Business Concern
Traditional planning is static. If there is a written plan, we see the plan formulated, documented in writing, presented at a meeting, and then put on the shelf to be consulted for next year’s retreat. This is the opposite of a forceful and changing dynamic plan. A dynamic plan can accomplish continuous improvement in business performance over time resulting in increased profitability. How does a static plan become dynamic? The answer is in the format of the plan. To be forceful a plan must be understood and implemented at all levels of the business – operational as well as management. The...
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The Concept of Time – How Its Progression Affects Important Tasks
Business Concern
The Concept of Time – How Its Progression Affects Important Tasks Time is the progression of events from the past to the present into the future. Time marches forward relentlessly. From birth to death, we age, and every moment that passes is unique and unrepeatable. The more important tasks we accomplish within our lifespan, the more fulfilling and impactful our lives can be. But what defines "important"? Is it happiness? Recognition? Pursuing a passion? How we define, or not define, “important” has a great deal to do with how we spend the time of our life span. I believe in defining...
info_outlineI advocate group decision-making, but am often asked: “what exactly is the role of the leader where there is a group involved?” Not understanding that leadership role can lead to humiliation and lack of credibility – not to mention bad results. By understanding the leadership role in group decision-making and waiting for the fork, you can elevate your practice of leadership from rote activity to an art form. It is that leadership art that can bring excellent business results.
Leadership cannot function in a vacuum. For business success optimization there needs to be an established decision-making structure embedded in the business. The resulting decisions should be documented, communicated, and understood by the executives as they are made. This is the essence of dynamic planning, the most effective planning method. To make the best decision-making process, a small group of diversely informed individuals should aggregate their judgments and provide that wisdom to the decision-maker charged with determining and setting forth the policy. This group should be formed to include the elements of diversity, independence, and decentralization. Using a group in the decision-making process does not mean the group makes the decision. Where a group makes the decision, the process is too slow for most business situations. For the effective business process, group decision-making requires that an individual have the authority and responsibility to make the decision after consolation with the appropriate group. It is not always clear how that individual, the leader, evolves in the group decision-making process.
The term “fork” is used in the development of open source code for a software project, where developed code is used as the base for a new software project. To start the new project you fork the existing code by making a copy and work on the new software from there. The fork concept is analogous to the time when leadership can make the difference in the business decision-making process. If you have watched, listened, asked questions, and learned, as well as refrained from stating your belief rather than cultivating a group concept, then when something new becomes your vision, that background can allow you to fork (use that which has been developed) and take the team with you to build the new vision upon it. Great leaders recognize when to fork, and, having built trust and credibility with the team, bring the team to a place where they would not be were it not for the leader.
The leader must also manage the risk. In a business where dynamic planning is in place, where decisions are made through a group decision-making policy and immediately communicated to all involved, risks can be handled through revisions of planning when the need becomes apparent. As with most things in life, the greatest rewards go to those willing to take reasonable risks. Reasonable risks are those where actions can be taken to revise and correct based on monitored results. It is also in the art of the leader to see the fork opportunity, to understand the risk, and manage the risk.
The leader who waits for the fork, acts on the vision of the opportunity, has the trust and reliance of the team, and manages the risk can realize exceptional business results.