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Passing Your Business to the Next Generation

Passing Your Business to the Next Generation

Should you pass your business down to the next generation? When you have family working in your business, it is a wonderful thought that your family can carry on what you have put so much energy, sweat, tears and love into. But statistics show that only one-third of all family businesses are successfully transferred to the next generation and only 13% are successfully transferred to the third generation. Why is this? Many family business consultants say the primary reason for the low survival rate is the failure to develop and effectively plan for the transfer of ownership and management of the family business. Here are some of the reasons that so many of these well-intentioned transfers fail. The next generation may not have the same drive and commitment the founder had when he or she built if from scratch. If the business has been successful, they may have had a very different life style than the founder did when the business was started.  You’ve seen examples of this in businesses, haven’t you? They may not even want to run the business. They may feel it is expected of them but not what they really want to do. Can you see how unspoken expectations can cause resentment within the family? They may not be capable of running the business. Have they been trained in the skills necessary to run the business? Do they have the leadership and management skills to deal successfully with an ever-changing business climate? Another big challenge is trying to balance fairness in employing many children or even grandchildren in a family business with various skill levels,...
Creating Healthy Work Boundaries

Creating Healthy Work Boundaries

Unhealthy work boundaries create hurt feelings, unrealistic expectations, lack of accountability, to name a few. In family businesses, unhealthy work boundaries may go unnoticed as cause for business issues. When these problems are solved, businesses transform. Fixing the unhealthy boundaries may be difficult, but repairing them is worth it. Friend and family relationships are complex, with the past experiences and shared history. When people bring relationships to work, the complexity multiplies. It’s difficult enough to confront an employee who is not doing the job. Just imagine when the employee is a friend, relative, or spouse!  Accountability goes right out the door, doesn’t it. You want to be liked by friends or family, but in business, feelings affect constructive feedback. What’s the best way to run a business with friends or family? Consider these ideas: Business is an Agreement Customers agree to exchange money for goods or services. Businesses agree to provide goods or services. Employees agree to provide service for payment. A successful business transaction happens when both keep agreements. Competence First, Connection Second In personal relationships connection is the guiding principle. When business and personal dynamics mix, dealing with issues is challenging. Competence is first in keeping agreements to create healthy work boundaries. No Friends or Family on the Organization Chart Your business is made of people in positions. Positions have functions that produce results. Results keep the business’ agreement. It’s irrelevant if the person in the position is friend or family. Every box on a chart is an agreement to do a job. That agreement is higher than personal ties as a commitment to competence first. Swinging...
Why Is Delegation So Difficult?

Why Is Delegation So Difficult?

Eli Broad is quoted as saying “The inability to delegate is one of the biggest problems I see with managers at all levels.” I see that as well.  There are two major reasons why managers avoid delegation: they don’t want to lose control and they believe no one can do the task as well as they can.  Do you relate to either of these? I recently had a phone conversation with a client who had both of these issues. He runs a printing and mailing operation that is in a lot of chaos. We were discussing how he delegates to his employees and he shared this recent example. “The two people in the production area decided to organize the inventory. We needed this to be done, he said, but they weren’t doing it the way I thought they should. I was on them every day to do it better; to do it my way, not their way. They were slow; they didn’t have a process to follow, and in fact, it seemed like they didn’t know what they were doing.” I asked him how they reacted to his input and he said it built resistance in them. I shared with him the steps to delegate properly, have an agreed upon deadline, have an agreed upon reporting system on progress, and have agreed upon results. When I asked if he had used this process – well, you know the answer, right? No, he didn’t, which left his employees feeling micromanaged and belittled. I suggested he put aside his belief that no one could do it as well as he could...
Guidelines For Effective Delegation

Guidelines For Effective Delegation

Contrary to popular belief, delegation is not “dumping” work on other people.  Make it a part of your management system for getting work done through other people by creating an environment in which they want to do the work and are able to do the work. There are four steps in the delegating process: 1. Identify the work or result you want to delegate and determine to whom you’ll delegate it. You can delegate almost anything, with the following exceptions: You can’t delegate the overall result of your position (unless you’re leaving your position). You can’t delegate the work or results of someone else’s position (unless you have their agreement). You can’t delegate work or results that have been delegated to you and that you’ve agreed to do yourself. When it’s time to delegate, determine which position is appropriate for the task. Not the appropriate person, the appropriate position. Many business owners and managers have a tendency to delegate everything to the same persons, over and over. They are the ones who have come through for you before. What’s the remedy? Pay attention to your own habits. Notice if you’re stuck in a comfort zone of habitually delegating to the same people. Invest managerial time in creating systems and training people how to run them. Force yourself to trust people to do their jobs. 2.  Put the delegation in writing, with the due date. Once you know what you’re going to delegate and have identified the right position and person, you need to write the delegation down with as much specificity as possible. When you put something in writing:...
Five Basic Principles of Working Relationships

Five Basic Principles of Working Relationships

Unless you’re a sole proprietorship, you’ve probably seen the effects of working relationships that don’t work. Working relationships that do work are characterized by open and respectful communication, accountability and trust. Many business owners, managers and perhaps even you, think there’s not much you can do to improve the quality of communication, accountability or trust in an organization, right?? Well, you can! Although you can’t force someone to be better at things, such as communication, accountability and trust, you can create an environment where these qualities are valued and where systems are in place to promote and help cultivate them. This can be accomplished by setting out principles for the way people work together. Let’s start with an overview of the fundamental Principles of Working Relationships. Once you understand, implement, and integrate them into the way you do business every day, you’ll find people throughout your organization work together more cooperatively and harmoniously than ever before. That means they can invest their energy and attention in getting results for your business rather than dealing with interpersonal issues with each other. The Principles of Working Relationships presented below are an initial set of guidelines that will help people work together harmoniously and avoid many common misunderstandings and frustrations. There are five basic Principles of Working Relationships: Management by Agreement. Managers and employees agree to produce results together. Employees agree to accept their accountabilities and to do the work according to existing systems and agreed upon standards. Managers agree to provide their employees with the training, resources and support they need. Can you see how this is a win/win? Management by...
Building a High Performance Environment

Building a High Performance Environment

Building a high-performance organization requires vision, structure, and tools. An old adage suggests that the more things change, the more they stay the same. The truth is, the more things change, the more they change. Sometimes you plan and invite the change but more often than not it arrives unannounced, leaving you scrambling to respond. Change is the one constant for every business in today’s global economy. Your success will depend as much on your ability to embrace change and use it as a resource as it will on the production of your product. To create a high-performance work environment, it‘s important for you to focus on vision, structure, and tools. Clarify your strategic vision and integrate it into your company’s daily life. Create a structure that’s designed specifically for the results you want, and give your people the tools they need to perform their jobs at the peak of their abilities. Once you identify the elements of high-performance, you can begin to create an environment that uses them in your organization. No two businesses will do it in the same way. The object is to encourage a culture and build a structure that’s best suited to accomplishing your Vision. Here are the fundamental steps that will help you: First  –  Integrate the vision. There are a number of ways to build your vision into the culture of your organization. The most effective strategy is to broadcast and reinforce the vision at every opportunity, and to systematically include it in all your activities. Second –  Build the structure. You’ll be tempted to look at your company’s structure solely through...
Elements of a High-Performance Environment

Elements of a High-Performance Environment

The real hallmark of a high-performance organization is its employees’ ability to see change as a resource. Change provides an opportunity to test your assumptions and those of your team, and to grow your business. Change creates opportunities to see things in ways you don’t ordinarily see them, and to do things in ways you don’t ordinarily try. If you can use change to your advantage, it can fuel your company’s growth in ways that money and technology can’t, because it moves everyone out of their comfort zones, frees them to take a fresh look at the business, and drives invention and innovation. Constructing an organization that relishes change requires thought, planning and the willingness to stay with it until you get it right. Your efforts will pay off for everyone involved, not just employees. A high-performance company will draw-in customers, motivate vendors, attract investors, and assure lenders. Their energy and vitality inspire confidence in everyone they touch. To get you started, think about what your business would look like if it were a high-performance environment. Change is the one constant for every business in today’s global economy. Your success will depend as much on your ability to embrace change and use it as a resource as it will on the production of your product. It all starts with you Integrating the company’s vision into the daily life of the organization starts with the leader. The leader is in charge of articulating the vision, reinforcing and protecting it every step of the way. There are a number of ways to integrate your vision into the daily life of your...
Your Organization Strategy is Your Bridge to Your Future

Your Organization Strategy is Your Bridge to Your Future

No system you create in your business will more powerfully represent the progress toward your company’s Vision than your company’s organization chart. An organization chart is a graphic depiction of your company’s organizational strategy. It’s your plan for how systems and work need to be structured so that your Vision will one day be realized. In your organization chart you can plot your future with a few simple, well-placed boxes and lines The impact of having a well-conceived organizational strategy is felt by everyone in your company. For you: a plan for clear communication of accountabilities, uncompromised by individual personalities, and a reliable guide for growing your staff and developing your systems companywide. For your employees: the reassurance that comes from clarity, stability, and an honest view of where they stand and what’s to come, plus a way to see possible opportunities for their own professional development. As you work with this process to develop your organizational strategy, you are creating the framework for growing step by step, system by system, and position by position, toward your Vision. Double Vision — not a Malady, but a Necessity Double vision is your ability to see and make decisions based on two realities at the same time. The first reality is your current situation: your current employees, customers, commitments, and resources. The second reality is your dream, your vision, and how your company will look, act, and feel when your Vision is finally realized. Create your organizational strategy as it will be when you’ve achieved your Vision, and immediately begin aligning your decisions and activities with that strategy. It’s that simple....
5 Steps to Key Strategic Indicators

5 Steps to Key Strategic Indicators

“Not everything that can be counted, counts, and not everything that counts, can be counted.”  – Albert Einstein This quote, attributed to Albert Einstein, applies to us today! In our world, there’s no shortage of data. Instead, our challenge is creating good key strategic indicators that measure both those items that can be counted and the more intangible items that are harder to quantify. Establishing milestones and key indicators that provide valuable insights into our businesses, keeps us on track and moving forward. The strategic thinking plan that follows enables a higher rate of accomplishment as we evaluate the key components. The process has five parts: Identify the Key Components of Your Vision Carefully view your Vision Statement and identify its key components. Typically sales and profit margins are included as key components. When someone uses your service or product, consider what follow-through process is implemented to assure clients of the investment they have made in doing business with you. Do you offer a guarantee? Do you ensure consistency of service? Depending on your business, other components would include benefits to customers, positioning in the marketplace, company values, and efficient use of technology. Be sure to address protocol, staff expertise, work environment and communication. Determine which components are tangible and intangible. Establish Key Tangible and Intangible Indicators Using the components you have identified in your Vision, establish your Key Tangible and Intangible Indicators, and record them in a Progress Tracking Worksheet. An excel spreadsheet works well for this. Sort the tangible from the intangible then transfer them to the Progress Tracking Sheet. Examples of Tangible would be those components...

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