When you ask most business attorneys a question like that, you get a stream of predictable double talk answers. 

“It depends on the relationship between the partners.“
“It depends on whether the business is growing or stagnant.”
“It depends on when the true business leader wants to take it on.”

The status of ownership/partnership agreements comes up fairly early in most significant business processes. It’s in the first wave of questions when we’re doing due diligence related to growth financing.  During strategic assessments, anyone would want to know who has bottom line authority, who has influence but is risk adverse, who is in a position to gain financially, etc.

Thirty-eight years as a growth strategist has taught me that cleaning up any holes in existing partnership agreements is important to do BEFORE opening the Pandora’s Box of real strategic planning. When it is unclear in any way who has the authority over strategic direction, pacing, investment, and risk – infighting can completely stifle the momentum, excitement, and power of real strategic working sessions.  It’s important to go into the strategic planning process with your hands untied.  Imagine if your strategic planning process opened your eyes and you became excited about diversification, global expansion, or online versions of your products/services. Then suddenly your previously silent compliant conservative “partner” threatens to torpedo the entire conversation because he/she doesn’t want to take any risk at all.

Recently, one of our clients needed to ask his sister to sell shares to him. He is the President and wants to grow the business. She doesn’t want to take chances. Her primary interest in the business is to provide an inheritance for her children and grandchildren, so structuring the buy-out based on current valuation provided some security for her. She wouldn’t be instrumental in making the next wave of growth happen, so this would be a good time to achieve her goals while untying her brother’s hands.

Cleaning up loose ends of partnership agreements solidifies relationships based on existing and past relationships.  Expect to revisit your partnership agreements, board composition, and succession plans again once your new/updated strategic direction has been articulated. 

So the answer is…before AND after.

What would happen if you asked the guy who handles inbound phone calls and Internet orders at your company to come up with 20 questions that he would like to ask customers? Could those questions be compared to and combined with questions proposed by an outside research firm? Could his outbound calls to a random sample of customers serve as a control group to compare the similarities and differences in responses?  Would that employee become more interested in the results and recommendations resulting from the market research?  Wouldn’t your business save a little money utilizing an employee for some of the research instead of relying completely on outside assistance?  Would new skills and a sense of upward mobility result from such a process?  You know the answers, so why are so few companies taking this approach…especially during tough economic times when customer input is sorely needed, employees are looking for some positive sign, and cost efficiencies are important?

Could another employee be asked to surf the Internet to look for potential target markets with characteristics that are similar to those you currently serve?  With some parameters and guidelines, fairly junior employees enjoy such a process.  Could the employee who leads upgrading your products be asked to do some research to deepen the bench of qualified vendors so your business can act more quickly when the market research suggests a new direction?  Could one of the mission-critical production employees be asked to find, read and select techniques from books about how to change an interruption-based culture?  Could various employees sit in on a conference call with outside experts when they recommend studies, websites, and other resources?  Who could go on field trips to take a look at how complementary companies are addressing challenges similar to yours?

These things don’t happen when top leaders feel insecure and are more focused on retaining control than finding ways to grow their enterprises.  Ask yourself: has the recession increased your resistance to participative approaches to market research and strategic planning?  The good news is…it’s curable!

These days, flat growth can be explained by the slowed economy, limited access to credit, etc.  If you need an excuse, you have it, but what is your excuse if your business was already flat a few years ago?  Second or third generation leaders of family-owned businesses are particularly susceptible to being in the same job doing basically the same thing the same way year after year. I’ve seen bright, well-educated business owners lost in micromanaging insignificant details while their businesses stagnate.

If you wonder if this is happening to you, consider reducing the number of days you are available to work in the current business. That one change could permit your managers to feel more respected, step up, make decisions, reduce their reliance on you, and prove their worth.  The availability of a few days/week could help you look at other business opportunities, confer with bright colleagues, learn new skills, move beyond “Head Project Manager” to become a real “President”.

A change of scenery could encourage you to break old habits.  Interacting with different people could encourage you to think at a higher level and consider bigger opportunities.  Many times, just working from a home-based office doesn’t provide enough change to break old habits, introduce a new routine, and invite “Presidential” behavior.  If you have been in the same peer-to-peer discussion group for the past five years, consider a change to a more ambitious or direct group.

It is so easy to live “below the radar” where no one questions you, no one expects any improvement, and the situation permits you to coast.  If you have hit a plateau, are already bored, and know deep down inside that you will wonder why you wasted so much time…consider establishing an advisory board composed of people you truly respect.  Is it time for a wake up call?

There’s a moment during strategic planning retreats and/or think tank events when executives get excited about the possibilities, become focused on opportunities, and generate great ideas to really PULL customers toward their companies.

Then there is that glassy eyed look that follows. “Oooh… can WE really do that?” 

These days, you might assume that the PAUSE… the DOUBT… is related to a limited access to credit or concerns about the economy. Right?  Well, I’ve noticed that when executives are completely honest when they rank order the possible barriers to success, #1 is their recognition that their team simply isn’t ready to implement the strategies that would drive profitable growth. 

So then there is the inevitable discussion about training and stepped-up coaching.  But then there’s a second glassy eyed moment as executives realize that their long-term (habitual) reluctance to fire ANYONE is their heaviest anchor.

We all understand the many reasons: the stories about wrongful firing suits, the costs associated with the bad PR from chatty disgruntled former employees, the distraction factor of documenting infractions and putting people on probation. Some of us are suckers for potential. Many of us remain loyal to employees for things they did many, many YEARS ago.

But it is like employers aren’t noticing when they are located in an “Employ at Will” state. Plus an inability to fire ANYONE is a HUGE disincentive to other employees who really want to achieve, learn, and try new things.  Unemployment rates are high. Competitors are laying low and not even trying to grow. Layoffs carry much less negative stigma than ever. Is NOW the time for YOU to cast off your “TOO SCARED TO FIRE ANYONE” anchor?

What would you do if you had recently invested time and money on

  • obtaining absolutely current market research that revealed exciting opportunities despite and because of the economy
  • recruiting, selecting, hiring, orientating and training two new executive positions
  • upgrading management positions, including replacement, training, increased compensation and incentives
  • participative strategic planning
  • upgrading the physical plant for a few key locations
  • updating your operating systems
  • organization-wide training in marketing, sales, and customer service

Follow through!!! Right???

Yes, but what if you have recently seen doomsday reports in the newspapers and on television? And what if you attend an industry conference and the speakers suggest that this is the time to play everything safe?  And what if one of your long time friends just got audited and the IRS is after him?  And what if your executives and managers are feeling a bit overwhelmed or scared?  And what if you’re in a regulated industry and the government doesn’t feel like your friend at the moment?

YES…still follow through!!!!

AND

Compile a list of everyone’s concerns and worries.

Why not?  If folks are too worried, they might not follow through when you need enthusiastic execution on the plan.  A great strategy weakly implemented is set up to fail!  There may be a legitimate question your strategic plan missed.  Why not address it now?

Include board members, investors, executives, managers, line employees…everyone! Then ask your executive team to make sure that the strategic plan appropriately addresses each concern.  Write up the answers.  Make sure everyone knows you are listening, care, and are being thoughtful.  There may be a few areas where you are taking a calculated risk.

Collect worries. Make sure the strategic plan addresses each one. Convey how the strategic plan answers each concern.  Get back to people in a timely way.  And move on to implementation.  This is not the time for analysis paralysis or timidity.

Here’s a suggestion for busy Presidents/CEOs of midsized businesses (especially $20 – $200 Mil/yr) who

  • feel that your time is STILL your scarcest resource
  • recognize the need to feed your mind, learn, stretch, grow
  • find relevant teleseminars but then can’t participate because they run at the same time you are involved in important meetings
  • know you need to exercise but are going to the gym less often
  • have been tempted to attend an Inc. Conference on Growth… 

Why not download free online radio shows onto your iPod to take to the gym? Take shows featuring interviews with your peers on the Inc. 500 list of the fastest growing privately held companies who are sharing success tips about the growth strategy-of-the-week. 

Most of you, the readers of my blog and Twitter tweets, know that I have been hosting a peer-to-peer-to-peer online radio show The Growth Strategist™ for 5 years now. We rotate through various geographic locations, industries, and growth strategies.  One week, my show might feature an interview with the President of a Singapore-based retail company that has grown through franchising. The next show may be with the CEO of a Kansas City-based manufacturer sharing success tips about how they’ve grown through acquisitions. 

Many of the guests on my show are on the Inc. 500 (or at least the Inc. 5000) list of the fastest growing privately held companies. They are bright, ambitious, somewhat intense, fabulous leaders….just like you. The show is #2 in its category and attracts over 180,000 listeners. 

I have LOVED hosting the show.  How can the discussion of growth strategies between people who actually live the journey EVER be boring?! 

I open each show with some tips on the growth strategy-of-the-week gleaned from my 30+ years of experience as a growth strategist helping midsized companies earn and keep their spot on the Inc. 500 while increasing their profitability. Many of you know that I have also won over two dozen national and statewide “entrepreneur of the year” awards for the resilient growth across 3 recessions of my own midsized businesses. So I share examples from my own journey as well. 

It’s been 5 years so my website, www.TheGrowthStrategist.com, and the station’s website (www.business.voiceamerica.com) now have over 200 downloadable shows (podcasts if you prefer) available for you to download onto your mp3 players and take to the gym.  Our research shows that most listeners do that or they listen to the show between 11:00 pm and 1:00 am as they do their last round of email “after the spouse and the kids have gone to sleep for the night”. The only reason you would break from an important meeting to listen to the live broadcasts each Tuesday at 11:00 am EST would be if you wanted to ask a question.  Most listeners send emails with questions to me and my guests following the shows. It’s NOT like traditional radio broadcasts where listening at the exact time of the live broadcast represents your only opportunity. 

Why wait for teleseminars when you can download 5, 6, …sometimes as many as 10… timely peer level radio shows focused on a growth strategy you are using or have been considering, including

  • specialization
  • diversification
  • acquisitions and mergers
  • franchising and licensing
  • new products/new markets
  • joint ventures and strategic alliances
  • equity deals and IPOs
  • several others….

I did a series of shows earlier this year about ‘HOW TO CHANGE YOUR BUSINESS MODEL” and another on “THE CHANGING IMPACT OF REAL ESTATE ON STRATEGIC GROWTH DECISIONS”. 

You can suggest topics, offer to be a guest, or recommend someone else you think might be an interesting guest.  The toll free number is 1-888-Aldonna and the email is Aldonna@AMBLER.com.

These days, busy people participate in conference calls on their cell phones while gobbling down fast food to make up for the breakfast they missed while flipping through files and responding to a text message while their GPS screams directions while they argue with a colleague about the focus of their next meeting….and that’s while they are driving a car on the Turnpike!!!! Budgets are tight. They didn’t get a raise or can’t provide the bonuses they wanted to pay their employees. Their vacations are shorter and closer to home. Their youngest child had to switch from the expensive university to take a job near home and finish his degree at the state college at night. The cost of healthcare keeps rising. And to add insult to injury, their favorite competitor didn’t win the reality show they don’t admit to watching every week on television … and even Facebook was hacked! Can you feel the incidence rates of road rage, obesity, drug abuse, and diabetes rising by the minute?  Are we having fun yet?

During times like these, it is really easy for service providers to slip into commiserating with clients who want to whine.

“Why not? After all, I am supposed to serve, right?”
“My client needs a safe place to ventilate.”
“There aren’t a lot of new projects coming up any way.”
“The people I’m talking with on the phone don’t have the authority to make big decisions, unfreeze the budget, or try something new.”
“Maybe my client will be more likely to bring a project my way when things lighten up because I am the one who understood how they felt when times were tough.”
“Cut me a break…it’s hard enough to work under these conditions!”

It is very easy to lose a long term client during times like this.  All they have to say is “our budget got cut” and “your line item doesn’t exist any more”.  Leaders in your company may simply accept that reality and walk away saying something lame like “we’re here for you” or “we’ll keep in touch.”  Studies show that those clients don’t tend to come back.

When you and your clients are not super busy taking orders, doing lots of projects, and making money with/for one another, it is a good time to meet with your clients, conduct a customer satisfaction survey, and look for new ways to work together. This is not the time to wait for things to change. That approach leaves your company vulnerable to a more assertive, more energetic competitor to approach your long term clients, analyze their needs, propose new ideas, solve their problems, and help them survive the recession; while your service providers sit on the phones commiserating with the client’s lower level employees.

It pays to break customer research into chunks. You can start with a customer satisfaction survey focused on the past. This step could surface phrases that more effectively capture how your best customers describe the results you achieve. Those phrases could add some power to your marketing and proposals. Customer satisfaction surveys can surface concerns you did not previously know about and could resolve. Reviewing what your team has provided in the past can remind a key customer about your value, your relationship, and the important role you play. Think about how they drive down the Turnpike.  You may think you are important and have done a great job, but these days, you are not on their minds. A customer satisfaction survey puts you back in their minds. You can come back to customers you have surveys to show the list of their suggested improvements. This step reinforces that you actually listen to them.  Not many people are listening very well these days. You can select a few of the most important suggestions and show your client(s) how you are improving service based on their advice and priorities.  That saves you money because you don’t feel compelled to simply throw money at multiple improvements hoping something will work.  And if you improve a few key services well enough, you may have a competitive advantage you did not have before. You convey that you want their business and are doing more than just commiserating or waiting for things to change.

Another chunk of customer research could be more future oriented.  Could you find out what your client would like to be doing in 5 years?  What new products and services were they working on when their budgets got smaller?  What competitive advantage would they like to have? What are their biggest problems? Could your team ask the kind of questions your new competitor is probably asking your long term clients right now? What would it cost for you to do a series of meetings, surveys, interviews, phone calls with long term clients?

The summer of 2009 brought record setting rain where I live. I have never seen such large geraniums and marigolds in my gardens. And the summer brought us strategic assessment projects for three new clients. Interestingly, one of the findings surfaced from the INTERVIEWS step was exactly the same for each of three otherwise very different organizations (a healthcare provider, a non profit entity, and a professional service firm). In all three instances, they were not getting the repeat and spin off business they could be getting because they:

  • had not sustained purposeful contact with long term customers,
  • do not really know the phrases their customers would use to describe the results they achieve,
  • are not presenting improvements and proposing new services based on customer advice,
  • have not asked for referrals in a long long time,
  • were reluctant to do a survey because people are so grouchy these days,
  • don’t approach existing clients with the fresh questions their competitors are undoubtedly asking
  • can’t imagine that a new initiative to help themselves and their customers could result from looking for it

One interview surfaced 10 business opportunities for one of these clients.  That kind of result MORE than covers the costs associated with a customer satisfaction survey.

Tell me again why you aren’t doing this while people are cranky and worried enough to tell you important information. 

The “changed” economy has raised the red flag of CAUTION so high that too many business people aren’t acting on opportunities, generating profits they need and deserve, and enjoying that process. 

A need to be perfect and never make a mistake can suck the life out of growth initiatives. 

Yes, it pays to analyze customer buying patterns, market trends, resources and capabilities. Yes, it pays to establish a system to keep everyone informed.  This builds momentum, prevents many surprises, and reduces worry. 

BUT … once you can see a business opportunity, it is more important to have FUN, build enthusiasm, and enjoy the ride! 

HOWEVER, if you are not lost in perfectionism, how are your employees feeling? Even if your business has been fairly stable during the economic downturn, your employees could still be worried because gloom and doom media broadcasts have an impact. You might think that worried employees work harder to save their jobs, but worry is actually distracting. It breeds the rumor mill. It leads to resume writing during work hours, and worry stifles the generation of ideas. 

Ironically, it takes extra effort to convince worried employees that you know what you are doing, there is real opportunity, these can be exciting times, and it’s OK to enjoy one’s job. 

Does your company need a BRING BACK THE JOY project?

You are bright, well-educated, experienced, and you are now the primary leader of your family’s business. If that is your circumstance, congratulations on getting through the often difficult succession process. Hopefully, you are in charge because your parent(s) are happily retired or have moved on to another venture rather than being forced to step back due to illness. 

While this opportunity is exciting, it is also a HUGE responsibility.  Every President of a privately held business feels the weight of his/her office.  Phrases like “lonely at the top” come from somewhere. But if you have a deep respect for what your grandparents and/or parents have done, you feel an even deeper sense of responsibility.  The phrase many of the Presidents of my family-owned business clients have used is “a sense of stewardship”…and it has FROZEN many of them. How can you be an effective leader if you don’t want to take a chance, risk failure, or disappoint anyone? 

One of the techniques to get UNFROZEN is to build your strategic growth plan one “chunk” at a time. Invite your management team to help you figure out how to incrementally grow and protect the company’s core/legacy products. That helps you breathe. No matter how bright you are, you need all of the oxygen you can get. Then move on to the discussion about how to add more vitality to the innovation process so new products can be provided for your company’s best customers.  Next, move on to improving your company’s capacity to identify, analyze, and select new markets for you to provide the legacy AND the new products. You guessed it.  The next discussion would be about ways to sell new products to the new customers.  This is one of the classic approaches to portfolio management/strategic planning. 

The second technique is to identify an optimum size for your business.  At what size would your company need to be to become more resilient and be able to hire talented star performer(s) who could lift your company to a whole new level?  Would that kind of change require 30% growth? 40%? 100%? 

Now combine the two techniques.  What percentage of the desired growth should come from existing products sold to existing customers? From new products sold to existing customers? Etc.  Get the buy-in of key members of your management team and that FROZEN feeling is behind you.

This economy has forced some business leaders to re-examine their business models.  OK.  It’s annoying, but if you need to do it anyway, maybe this would be a good time to change how you look at ratios, measurement…the numbers. 

Strategic planning is so much more fun and meaningful if it emphasizes strategy over planning and projections. HOW can you win, be more resilient, and grow the bottom line? And there are numbers (ratios) that convey the HOW and not just the GOAL. 

A few of my clients have had some fun with what I call “The Triple-Double Option”.  How could the business triple top line revenue while only doubling the number of customers?  That isn’t just a fluffy goal or empty promise about like “growing to $100 million”. To make that triple-double goal meaningful, there would be discussion about how to grow existing accounts, provide more value, retain key customers, and/or have more targeted marketing campaigns. 

Although your CFOs and Controllers will need to monitor dozens of significant ratios, there will typically be a handful of key numbers that your entire executive team will need to focus on to make the goal a reality and the strategy come alive. Since it’s not enough to just monitor the numbers after the fact, I have found that many executive teams need to learn how to use techniques like dashboards and KPIs  and learn how to think like quality assurance professionals who improve process to prevent errors. 

Goals (like doubling the number of customers) have “causal” ratios behind them related to things like marketing conversion rates or average purchase value that make the promised result happen. Do you know who on your executive committee “OWNS” each of your “CAUSAL” ratios?

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