QuickBizBreak by david weaver

Take a quick break from your biz to ponder new ideas and strategies that will turbocharge your business.

Archive for the ‘Business Succession Planning’ Category

The Culture of People

Posted by QuickBizBreak on January 1, 2016

Posted by David Weaver on Monday, 05 October 2015 in Succession Planning Blog  http://www.seekingsuccession.com

I admit it. I’m an Apple junkie. Our family has iPhones, MacBooks, an iMac, Apple TV, and several iPads (I bought my 84-year old computer-less mother-in-law one last Christmas and had to increase my data plan just to accommodate her web surfing!). I will not, however, be sporting an Apple Watch since I don’t wear a watch anyway and even with sleek looks, the thought of wearing a ‘computer’ on my wrist reminds me too much of the geeks of yore who wore their calculator watches that required a toothpick stylus to peck at the small keyboard.

Since I tend to follow Apple news and events, I was drawn to an article in Fortune magazine about Burberry CEO Angela Ahrendts leaving to become head of Apple’s retail organization. One might reason that ‘retail is retail’ but this was a big leap for Ahrendts. She admitted to Apple CEO Tim Cook that she wasn’t a techie and not even a great retailer (‘I hire great retailers’). These were hardly concerns for Cook since Apple is tops in both areas.

No, Ahrendts was hired for her people skills.Over the past few months, Ahrendts has initiated a weekly video communication with all the stores (motivational), a Share Your Ideas initiative to hear from employees (improvements), a development program for all retail employees that will allow 10% of them to transfer globally to other stores or even to corporate (incentives), and most importantly, she merged their retail store and on-line departments for a more seamless customer experience (a must in today’s shopping environment). Each of these programs was designed to bring her employees and managers together with a focus on how better to serve their customers.

It’s interesting in the retail auto environment that although dealers focus on gross, net to sales, CSI, market penetration, and other key measurements, few really put the same focus on their employees, no matter how much they may claim to.

In an industry punctuated by 6-day workweeks and 10-12 hour workdays, it’s not unusual to experience high turnover, job frustration, lack of commitment, and a focus on ‘me’ instead of ‘we’. Regardless of what measurement manufacturers may want to use to rate your performance, it’s people that make it happen.

With that rather obvious observation, here are some questions to ponder:
What training programs are available and what programs do I offer to my employees (at all levels)?

In an industry where performance starts back at zero the first of each month, what do you do to recognize performance – not just in sales but also in fixed ops and other areas?

What incentives have you put into place to influence and incentivize top performance in each department?

Do I have a system in place or a culture that encourages feedback at all levels that can help us make improvements?

Have I created and do I personally exhibit behavior that encourages a culture of working together to solve problems and which breaks down the typical silos of responsibility?

While barely scratching the surface, these should get you going towards evaluating your ‘people focus’, or how focused you are on your human assets. We have seen time and time again improvements in performance, attitude, and job satisfaction as we work with companies on getting everyone on the same page with programs like establishing a Management Advisory Board.

The MAB, as it’s referred to, provides an environment where managers come together not to evaluate performance (there are other times where that is appropriate), but to evaluate new ideas, learn to communicate and manage more effectively, and how to solve problems together. It’s also a great feedback mechanism for owners.

The first step in improving ‘people focus’ is to get your head out of the daily ‘making the numbers’ trap and start looking long term. Involve your managers. Promote communication and collaboration. Encourage feedback. Look for ways to motivate, train, and provide upward mobility. Each of these suggestions will help provide a more stable and motivated work force, eager to provide great service to customers and that, after all, is your real target.

So why would Ahrendts move from a CEO position to a lower position at another company? Simple. In a word, culture, along with an opportunity to make a difference. Create a people-focused culture and you’ll have people beating a path to your door – both for employment and as customers.

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Planning for the Predictable, Probable, and Possible

Posted by QuickBizBreak on January 1, 2016

Posted by David Weaver on Thursday, 10 December 2015 in Succession Planning Blog – www.seekingsuccession.com/

Former Secretary of Defense Donald Rumsfeld was widely ridiculed for his “what we do not know” response during a 2002 Department of Defense news briefing.

In part, Rumsfeld said about threat assessments, ‘As we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones.’

Assessing threats and planning strategically and tactically are just as important in business as they are in the military. Rumsfeld’s quote, whose origin is actually attributed to a D.H. Lawrence poem, reminds me of what Loyd Rawls wrote about the mission of a succession planner; ‘To provide for the continued success of the business through the next generation of owners and managers in light of predictable, probable and possible interdependent contingencies.’

In other words, there are things we know, things we know we don’t know, and also things we know we don’t know but don’t know what they are. Confused yet?

Things we know: Based on our experience in working with hundreds of family owned businesses, there are issues we can predict. For example, if a family member enters the business with no prior experience or training and doesn’t work their way up through the ranks from a very basic level, we can pretty accurately predict that there will be problems; problems like a lack of respect from employees and managers, a lack of understanding of the various roles within a business and their importance, and the potential for poor performance by this family member due to all of the above.

Things we know we don’t know: As business owners and managers, we are not expected to keep up with changes in tax laws, HR regulations, legal precedence across a broad expanse of case law, or at a more basic level, specifics of how technology within our business works. What we do expect, however, is that we have experts in our employ or as advisors, who specialize in these areas and can advise us in areas of importance to our business, so that we can make sound decisions and plan accordingly.

Things we know we don’t know, but don’t know what they are: These are the issues that can get us into real trouble because we don’t even know to be looking for them. It’s quite common when we speak with clients about issues such as planning for estate taxes that we find they don’t have an understanding of how an estate is handled upon death, are not aware of alternative strategies that involve both legal and financial plans, and haven’t a clue what types of life insurance they hold, how those insurance investments are performing and if they will even have coverage upon their death. They tend to make incorrect assumptions based on their original good intentions (and most likely someone’s advice) at some point to cover all the bases. It’s a complicated business and things change over time, so confusion is to be expected.

Understanding what we don’t know is an important aspect of business succession planning and my examples within the realm of estate planning are only a small portion of the puzzle. Accountants and attorneys are vital to the process, but are highly specialized in specific aspects of the overall process. Peeling back the layers of the onion and revealing the ‘predictable, probable and possible interdependent contingencies’ to the ongoing success of a business through future generations is a complicated process, but well worth the effort.

Like Rumsfeld, recognize that your own threats can come from many different angles, both known and unknown. Don’t worry about being ridiculed for what you don’t know. Instead, plan from a position of knowledge and strength.

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