The Culture of People

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 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.

Great Time to Purchase a VW Diesel Automobile

I’m sure most of you have heard by now about the VW diesel emissions scandal. VW admitted to purposely rigging diesel engines to falsify emissions testing results so that they could deliver cars with better gas mileage and performance and not add the technology required to meet the current diesel emissions standards. According to a recent article by auto dealer advisor and valuation expert M.D. Johnson, Inc., the decision by VW to add technology costing about 300 euros per vehicle was offset by the billions in profits from selling vehicles with better performance numbers. The article notes that while greed and a simple cost/benefit analysis by the corporation led to this decision, keep in mind that ‘GM, Ford, and Honda have all paid fines for utilizing emissions-defeat devices in prior production vehicles’. Until U.S. laws hold executives personally liable for such decisions backed up by criminal charges, we may well expect this type of behavior.

Something else from this article caught my attention, however: ‘Currently VW diesel lease returns are being sold at auction for 50% of their previous wholesale/trade-in pricing‘. Let’s face it, VW diesel cars are at the moment tainted. But why would anyone want to purchase a vehicle that spews up to 40 times the legal emissions limit for nitrogen oxides (NOx)? Certainly the EPA will require a fix that is installed at the manufacturer’s expense and according to testing by Consumer Reports, the diesels with emissions working correctly reduces 0-60 performance by only .2 to .6 seconds and fuel economy by only 3 to 4 miles per gallon, a reduction of 5 – 10 percent.

VW and Audi small diesels are great performers and if you like these vehicles and were considering purchasing one up until this recent event, you may want to move ahead. Dealers cannot currently sell new diesel vehicles until a fix is determined and retrofitted but you can certainly purchase used from individuals and maybe even from dealers, especially at tremendous discounts.

Do you know who you’re dealing with?

Admittedly, this comment could apply to a lot of situations. For example, are you dealing with the decision-maker?  Have you developed a relationship with the person you’re doing business with to really know what is important to them?  How well do you know the person you are about to become business partners with?  Is this person ethical?  How will they act if cornered into a bad situation?  What kind of business is this I’m about to go work for and do I want to be associated with them?  Certainly you want to know the answers to these questions before getting too deep into a business relationship.

I learned this the hard way recently when appearing as an extra on a new TNT cable network show.  No, I’m not an aspiring actor.  I have neither the looks nor the talent to pull that off.  Once a year or so, I sign on as an extra for some film project for a day.  Kind of like taking the day off to play golf except I get paid instead of paying to play.  Unfortunately, the pay is about what it would cost to play a round or two of golf so it’s a terrible trade-off from my real career.

A few weeks ago, I was on the set of the remake of The Three Stooges.  Not exactly an intellectual film but if the actors can pull off the slapstick, it might actually work.  No big part – a pedestrian on a downtown Atlanta street who almost gets knocked over by the Stooges and also a driver when they run into the street from a park.  Stunt doubles and drivers were used for the close-in work.  Guess they didn’t trust me to not run over someone – a safe bet.

Ironically enough, the Stooges shoot was the same week that the premier episode of Franklin & Bash was shown on TNT, a project from last summer.  Unfortunately, none of us knew what Franklin & Bash was about when it was filmed except it as a ‘buddy lawyer’ show.  Not very descriptive.  Our scene was a stockholders party in an airport hanger…all day…in the heat.  Everything looked good until two to three weeks prior to the premier when I started seeing the promos.  Ouch!  This was locker-room humor at it’s worst!  Example: a woman takes off her blouse while on the witness stand to show how easily someone could be distracted by a street side video commercial that showed cleavage.  Then when my family watched the show, one of the lead characters hops out of a hot tub and stands completely nude while talking with his assistant.  Fortunately a rear shot, but still, this was going to be a bit hairy to explain to my fellow choir members at church (no pun intended).

 

I’m not trying to be fuddy-duddy (whatever that is).  Extras don’t get to ask a lot of questions because they are fairly irrelevant and if one were to ask if there is anything potentially offensive in a production – unfortunately, I think we already know the answer.  The point is, be sure you know what you are getting yourself into.  It can be much, much later when you learn that the project you are/were involved in wasn’t of the highest caliber, the work was shoddy, the CEO was less than honorable, your partner was a crook, has a raging personality when under stress or that you simply got yourself into an embarrassing situation.  In hindsight, it could have been much worse.

The most important words in business…

What are the most important words in business?  Watch this quick movie from Simple Truths titled Customer Love to find out!

New Year Resolutions – Just Do Something

My current reading list includes Tim Ferriss’ new book, The 4-Hour Body. I never accomplished the goal outlined in the title of his last best-seller, The 4-Hour Workweek, and I don’t expect to fully accomplish the premise of this tome either. However, there are some challenging principles in both and I’ve always believed that if I can find one or two ‘aha’ moments from a read, then it’s worthwhile.

A quick warning if you should pick up either of these books. Ferriss’ writing style can be a bit irreverent and I swear to you I never read the subtitle to The 4-Hour Body:  An Uncommon Guide to Rapid Fat-Loss, Incredible Sex and Becoming Superhuman. I mean, who would expect to become superhuman anyway?

One of Ferriss’ chapters really hits home now that we stare our New Year’s resolutions in the face and determine how to motivate ourselves to change and I want to share that with you here.

Called ‘The Harajuku Moment’, the premise is that ‘people suck at following advice’ of any kind for two reasons: 1) There isn’t enough pain to make them want to change and 2) people do not use any method to track their change – no reminders. The Harajuki Moment happens when people experience ‘an epiphany that turns a nice-to-have into a must-have.’ It’s the mother of all aha moments, if you will.

You may have experienced something in your life, a single statement or event perhaps, that changed your life forever. For tech CEO Chad Fowler, quoted in the book, it was his own admission to a friend when looking at fashionable clothes, “For me, it doesn’t even matter what I wear; I’m not going to look good anyway.” For some reason, this stuck in his head and became his own Harajuku Moment to start changing his lifestyle. The result? He lost 70 pounds in less than 12 months.

No big deal, you say? Just hire a personal trainer, join WeightWatchers or other weight-loss group and go to it? Easier said than done which is why self-improve- ment remains an $11 billion dollar industry.

You see, it doesn’t really matter whether we want to lose weight, be more successful or get more accomplished. The goal is huge, the tasks seem daunting and we languish in our inability to get started.

Fowler talks about the key to getting started: “If I want a better-than-average-career, I can’t simply ‘go with the flow’ and get it. Most people do just that: they wish for an outcome but make no intention-driven actions toward that outcome. If they would just do something, most people would find that they get some version of the outcome they’re looking for. That’s been my secret. Stop wishing and start doing.”

Sound incredibly simple? It is, really. Fowler didn’t start counting calories. He started with some general assumptions, eating more healthy with some light cardio and tracked his progress (the second key to the process). The interesting thing is that once he started seeing results, the process became not only easy, but fun.

So do you really want to effect change in your life, your relationships and your business in 2011? Have you had your ‘Harajuku Moment’ yet? If so, then just do something. Getting started is always the hardest part and once you do, and start noticing the small changes, it will be easy to work towards those huge goals you’ve always wanted to accomplish.

Happy New Year everyone!

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10 Business Strategies for the New Year

How does 2011 look for business? The best answer is perhaps the age-old response ‘it depends’. And that’s probably the good news. This time last year, most would agree that the economy was still in the dumps with only fleeting thoughts of recovery in 2010. I’m seeing more optimism this time around but mixed with the realization that we may never see the economy as robust as it was the decade or so prior to bailouts, falling stock and real estate values and the tanking of consumer confidence.

So yes, it depends upon your industry, the length of time you’ve been in business, your cash position, your marketing prowess and a lot of other variables. Regardless of where you fall within those areas, here are 10 areas that every business should look at in preparation for 2011:

1) Strategic Planning – Whatever your expectations were for 2010 and indeed, for the past couple of years and beyond, they are probably different know. Challenge the assumptions you had from previous years. Where is the market going? Who can you partner with? Is there an ancillary market or ancillary products/services you can offer? Leave no stone unturned. A good strategic plan will keep you focused for the year to come while watching for new opportunities within your area of expertise.

2) Quit Doing What Doesn’t Work – Sounds obvious but you might be surprised at the number of people who continue to beat their collective heads against the wall trying the same old things (remember the definition of insanity?). The corollary to this concept, of course, is to focus on what works and that is the real key. What are your most profitable products or services? Why are they the most profitable? What can you do to expand within this area of profitability?

3) Brainstorm – You may note a recurring theme here. This is no time to be afraid to ask for help. There is nothing wrong with asking for suggestions from your employees. When was the last time you surveyed your customers or had a client roundtable discussion? Not only can new ideas come from this type of exchange but the interaction and involvement with customers and employees show both sides how important they are to the success of the company.

4) Know Who to Fire – Customers, that is. I’ve talked with so many business owners who keep catering to their worst customers who continue to be a drain on resources, affecting both personnel and finances. My wife says you have to be careful when you encounter what she refers to as a ‘black hole’ personality type at a dinner party. They suck anyone close to them into a negative conversation or no conversation at all. Customers can be a ‘black hole’ as well. At a dinner party you have to tolerate bad guests. You don’t have to tolerate bad customers, especially the ones that aren’t paying their bills.

5) Leverage Your Network – In good times, business seems to roll through the door. In difficult times, it takes hard work and a lot of it. Take advantage of your network and let them be relationship brokers on your behalf. A third party can offer introductions in a non-threatening way that doesn’t come across as a sales call, nor should it be. This is about helping each other connect. Some connections lead to business, some lead to referrals and some lead nowhere, at least initially. It’s all good if it gets people talking and working together. People like helping people as long as it is reciprocal. Just watch out for the ‘black holes’…

6) Break Through the Barriers – In this type of economy, customers are always looking for better deals. What can you do that breaks through traditional barriers, excites the customer, delivers the unexpected? Provide something stellar and watch your customers become advocates for your business. I observed closely as a new frozen yogurt shop opened in our area just as the season changed and cold weather hit. What a lousy time to open a frozen-anything eatery. Yet, the product is so good that word spread instantly. Every time we’re there, we see friends and acquaintances, even with winter weather upon us. I know my wife alone encouraged a dozen or so families to try it out. Multiply that by 20 raving fans and you’ve developed a nice little core business.

7) Engage Your Employees – I talked with the owner of one of the largest financial management practices in our area. She can’t understand why her employees aren’t meeting her expectations. Then I learned that she rolls in around 10am each day, leaves by 4 in the afternoon and takes every Friday afternoon off. I’ve seen it in other businesses as well where senior employees come and go on their own schedule and newer employees simply mirror the behavior. Not exactly great for productivity. In both instances, expectations need to be clear, roles defined and understood and performance standards in place for each level of employee and management. Including owners. It’s our responsibility to encourage and engage our employees so they understand what success looks like for them as well as the organization. They also need to know what the prize looks like when success is realized.

8) Financial Management – This is a subject that some owners would rather ignore than face. Believe me, the big bear in front of you doesn’t go away if you cover your eyes. If you don’t understand your company financials, sit down with your accountant (hiring an accountant would actually be a great first step) and have them explain the basics – Balance Sheet (Assets & Liabilities), Income (Profit & Loss) Statement and Cash Flow Statement (movement of cash through the business). There are books and short courses available that can also help you here – let Google be your friend.

9) Negotiate Deals – From rent to purchasing supplies to locking in long-term purchase contracts, many vendors are willing to negotiate to maintain customer retention, even if their profitability suffers. Retailers can upgrade space for the same or less than they’ve been paying in many cases. Bulk ordering can improve pricing but I’d rather see businesses place smaller orders while negotiating bulk rates unless it’s raw materials that you know you will use in the long term. Banks are still tight with their money but the better financial records you maintain, the better the improvement in sales and receivables, the better chance you have at negotiating a loan if you really need extra capital.

9.5) Bonus! – It’s really number 10 but by calling it 9.5, you feel like you’re getting a bit extra, right? Let’s hope so. I wanted to call this “Know What You Can Steal” but that sounds a bit wayward. The economy isn’t really expanding so stealing customers from your competitors is the one place to find new business while retaining your current customer/client base. It’s also a great time to steal the very best employees you can find. If you have done a great job at numbers 1 through 9, you should have a great environment to offer new employees – a solid, profitable company with a good future.

10) Surprise! – There really is a 10. How do you relay your marketing message? Website, social media, PR, advertising,coupons? All great avenues, when appropriate. Consider adding a video component to your marketing activities. I know a good platform that makes it easy. For this or any other area where you might have questions or need help, give me a call.

To learn more about video marketing, click here –> Video Marketing Made Easy

David Weaver    678.620.3990

What Are Your Challenges in Todays Economic Environment?

How do I plan for the future when I don’t know what the future holds? How can I best identify and attract good customers? Is social media really the way to go? What are my options? When I do grow, how do I fund that growth? How are current and future tax laws going to affect my business? Are there legal issues I need to be aware of?

So many questions – where do I go for answers from qualified experts? Glad you asked – keep reading!

Getting Answers

I don’t want to attend a bunch of seminars!

We understand. That’s why we assembled the best advisors from different specializations who can answer those questions and challenge you to ask even more of yourself and your business.

Intoducing The Georgia Business Resource Alliance

On Tuesday, September 28th, you will have the opportunity to tap the minds of specialized advisors to answer your most pressing questions about handling business in the current economic environment!

From 11am-3pm, the Georgia Business Resource Alliance is hosting an elite group of advisors who will address critical business issues. You won’t want to miss this opportunity to get answers to your important questions all in one place!

Maggiano’s Lunch

Did I mention that for your incredibly small entry fee, you also get to enjoy Maggiano’s Buckhead 5-Star all-you-can-eat lunch? That’s worth the price of admission alone!

Topics and Speakers

Legal Issues You Need to Know for Small Businesses – Mark deAndre, deAndrade Callahan, LLC

Identifying, Attracting and Retaining Your Best Customers – Dave Banko, President of Loyalty Marketing Solutions

Harnessing the Power of the Social Media Sphere – Emma Loggins, LNP Studios

Developing a Business Plan for Success – David Weaver, Managing Partner, The Weaver Group

Investment Strategies in an Ever-Changing Economic Environment – Darryl Dyche, CFP, Compass Financial Services

How Tax Laws Are Affecting Businesses – Ben Loggins, CPA, Loggins & Associates

Small Business Challenges in Today’s Banking Environment – Billy Lovett, Co-Founder, One Georgia Bank

Learn more about our speakers and topics here.

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Each advisor can only admit 20 attendees and I’d love to see you there. But….this newsletter went out to hundreds of contacts in metro Atlanta, so please, order now to ensure your seat!

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The top question to ask yourself before starting a new business

My guest post on Mike Michalowicz’s Toilet Paper Entrepreneur blog answering the question: What is the top question to ask yourself before starting a new business:

“What are you willing to risk”… to be successful, to meet your goals, even just to survive? You may be spending more time away from your family, you will need to expand your knowledge and do many things you don’t enjoy just to be in the business you enjoy! The business will cost more than you have planned. Are you willing to dip further into your savings? Can you handle defeat? If you can answer yes to all, you are off to a good start!

So what do you think is the top question you should ask yourself before starting a new business?