Archive for the ‘Succession planning’ Category

Gaining Respect As a Leader

Posted: September 4, 2012 in Brilliant Manoeuvres, Ethics, Leadership, Leadership Principles, Management, Military Lessons, Personal Development, Succession planning
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By Richard Martin

Note: This article has previously been published on AllHealthCareJobs.com on 21 Aug 12. Republished on ExploitingChange.com with permission.

One of the keys to being an effective leader is to have the respect of superiors, subordinates and peers. Unfortunately, many new managers and supervisors – and sometimes even experienced ones – focus too much on trying to please everyone. They try to be liked, or even loved, rather than simply doing their job.

Here are the six most important techniques and principles to ensure you gain and maintain the respect of followers, superiors and peers alike.

1. If you want respect, you have to give it. This is probably the hardest one of all. Specifically, you should endeavor to show respect and loyalty to your own superiors, and refrain from gossip and any form of speech that can be construed as undermining the authority of other managers and supervisors. You must also be fair but firm when dealing with disciplinary or performance issues, and refrain from upbraiding people in public.

2. Listen to your followers. This requires you to stay open to constructive criticism, suggestions and questions. The two best ways to achieve this are to meet regularly with your staff and open the floor for questions, or to simply walk around and converse in a friendly manner with your staff, asking them questions about their work, how they understand your approach and direction, answering any questions in the process. If you can’t answer the questions immediately, then tell them you will look into it and get back to them.

3. Provide clear and consistent direction. Ensure everyone in your team knows what is expected of them as individuals and as a group. Give ‘mission’ type direction to experienced people. This is direction that is focused on the end to be achieved rather than the means to achieve it. For less-experienced personnel, there may be a need to provide more detailed guidance that includes how to achieve the objectives. Make sure everyone is aware of and understands the organization’s mission, vision and values. Provide regular updates on the situation, especially if there has been a change.

4. Focus on managing well. Management is the art and science of planning, organizing, directing, coordinating and controlling (i.e., providing feedback). There is nothing that drives people crazier or undermines respect more for the authority and competence of a manager than an inability to do the basics of management well. Work planning, scheduling, providing clear direction, ensuring orders, directives and standards are all critical management skills and form the backbone of sound leadership.

5. Provide constant and consistent feedback. A supervisor or manager should provide performance feedback to all her direct reports regularly and as needed. Regular feedback is best provided monthly or quarterly, using a short written form and face-to-face meeting. This should be supplemented by an annual performance review which is more detailed and formal, and that is integrated with the organization’s performance reporting system. Informal feedback should be given whenever performance exceeds or fails to meet expectations. It is best given verbally ‘in the heat of action’ or shortly thereafter.

6. Take care of your people. Stand up for them with higher ups in the organization if it is justified. Provide developmental opportunities and regular feedback. Ensure they have proper equipment, training and supervision to do their jobs properly. Encourage them, and stay open to questions and constructive criticism of you, your management style or the organization.

© 2012 Richard Martin. All rights reserved.

Roberta Matuson Interviewed on Her Book Suddenly in Charge

Posted: July 26, 2012 in Announcements, Entrepreneurship, Leadership, Management, Marketing and Business Development, Personal Development, Succession planning
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My good friend Roberta Matuson, human capital and leadership strategist extraordinaire, has been interviewed by David Dalka about her book Suddenly In Charge. You can check out the interview in the following link.

http://www.daviddalka.com/createvalue/2012/07/25/suddenly-in-charge-roberta-chinsky-matuson-book-interview/

© 2012 Richard Martin. Reproduction and quotes permitted with full and proper attribution.

Family Ties that Bind

Posted: April 16, 2012 in Business, Entrepreneurship, Exploiting Change, Leadership, Management, Personal Development, Small Business, Succession planning
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Tolstoy’s novel Anna Karenina starts with one of the most famous lines in all of modern literature: “All happy families are alike; each unhappy family is unhappy in its own way.” In the case of family businesses though, we can safely assert that most of the unhappy ones tend also to be unhappy in the same way. It usually boils down to who gets how much and who is in charge of what.

When the founder of a company brings family members into the business, this can increase the potential for internal conflict by a significant factor. One of the most common manifestations of this phenomenon occurs when the owner—usually, but not always, the father—offers management positions to some or all of his children. When the children are also part owners of the business, the problems compound. And when the company transitions to new leadership, as when the founder retires and selects one of the siblings to run the company, the potential for conflict goes through the roof.

Here is a case in point from my own consulting practice. A younger sibling was appointed as general manager of a small company while an older sibling continued in a subordinate managerial position within the structure. The older sibling was somewhat miffed at not being considered for a higher position, especially that of general manager. The older sibling was starting to take out that frustration on the younger sibling. Conversely, the younger one was starting to act in a dictatorial manner in order to make clear to everyone “who the boss is.” A rivalry that had been seething beneath the surface for years now had the potential to erupt into a volcano of disruption that the company could ill afford.

The younger sibling had the foresight to get my advice about managing the working relationship. My advice was simple: “You are the boss, so act like it. That doesn’t mean to be insensitive or harsh, but you are the one who has to answer to ownership for the company’s results, not your sibling. We need to talk together to ensure that you both know where you stand and the dynamics of your personal relationship don’t hinder the dynamics of your business relationship.” Is that a tall order? Perhaps, but what are the alternatives?

The key method I advocate for dealing with these issues is what I call ‘The Outsider Test of Behavior.’ Simply put, if a family member is behaving or performing in a manner that would be deemed unacceptable for an employee or manager that doesn’t have a familial relationship with the company’s ownership or senior leadership, then that behavior or performance is probably unacceptable, even though that person is one of the family.

Therefore, if family members have an ownership stake or occupy various management positions within the company hierarchy, they still have to let whoever is in management do their job, whether those people are family members or not. They can’t just decide to change things because they happen to have a familial relationship. Nor can they question the authority of other executives and managers, reverse decisions unilaterally, or otherwise disrupt the good functioning of the company, all simply because they happen to have the ‘right’ DNA.

The company has a fiduciary responsibility to employees, clients, suppliers, and financial backers (e.g. the bank and outside investors), and family members have to work within that reality. If they are part of ownership, they can exercise their responsibilities as shareholders through the board of directors (if they are a member) or at the annual meeting, just like any other shareholder. If they are part of management, they have to exercise their managerial functions and carry out their responsibilities in the same manner as any other manager in the company, all the while respecting proper rules of authority, responsibility, and decorum. They should also be held accountable for performance and behavior just like any other member of the company.

Of course, all this assumes that the family member who is in a managerial position within a family business is actually capable of exercising the functions of that position. If not, then the CEO or senior manager overseeing that person must work with the rest of the management team, ownership, and possibly the board, to ensure that that person is either removed from a position of authority, or removed completely from the company.

All of this can be very hard on the family member who has the ultimate leadership responsibilities, whether it is still the founding family member or the one who has succeeded the founder. It can also be hard on family members who are in positions or who have ownership stakes that they feel are unjust given their status within the family or self-perceived capabilities. But like I said above, what is the alternative, run the company into the ground?

Family members who are privileged to be involved in a successful business should realize how lucky they are to be in that position. Most people aren’t born on third base, much less second or first, so the situation must be seen for what it is: a great opportunity for individual and collective growth in a win-win dynamic, not a bone of contention within a scarcity mentality.

© 2012 Richard Martin. Reproduction and quotes permitted with full and proper attribution.

Leadership Principle # 6 – Know your soldiers and promote their welfare

Posted: February 27, 2012 in Brilliant Manoeuvres, Business, Crisis Leadership, Enterprise Robustness, Entrepreneurship, Leadership, Leadership Principles, Management, Military Lessons, Personal Development, Succession planning
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I’m continuing the list of leadership principles that I will be discussing in one of the chapters of my forthcoming book,Brilliant Manoeuvres: How to Use Military Wisdom to Win Business Battles.

In this principle, it’s obvious that one needs to substitute the word subordinates or followers for ‘soldiers.’ The point though, is that too many managers and executives in responsible positions simply don’t know who they are leading. They make people decisions without knowing the most basic facts about their subordinates’ strengths and limitations, their goals and aspirations, their personal and professional circumstances. Instead, they just assume that everyone is a replaceable cog in the machine.

The best and easiest way to get to know your people is to talk to them. Ask them what they are working on and why they are working on it. Not in an investigative manner, but as a simple conversation. Ask them where they are from, what their goals are, what their understanding of the company’s goals are and how they fit into that scheme. It’s amazing what will happen when you simply ask people to talk about themselves.

It is also critical to promote the welfare of your subordinates. This doesn’t necessarily mean giving them everything they want. Sometimes tough love is needed to get a person on the right track, to provide the learning and development they require by getting them outside their comfort zone and pushing them to perform at a higher level. To do this, you need to know what makes them tick, what they need to improve, and how to best employ them to their best potential. The German World War II general Erwin Rommel said that the best form of welfare for his troops was first class training. By this, he meant that they had to be developed to their utmost capabilities, both as individuals and as teams. This is what would ensure their success and their survival in battle.

© 2012 Richard Martin. Reproduction and quotes permitted with full and proper attribution.

How Robust Is Your Business?

Posted: October 26, 2011 in Business, Business Continuity, Contingency Planning, Enterprise Robustness, Entrepreneurship, Small Business, Succession planning
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CBC News is reporting this morning on a TD Waterhouse poll result indicating only about a quarter of small businesses have a succession plan in place for when the founder/owner retires.

That’s pretty bad, in and of itself. But even worse is the fact that right now, most small businesses are completely reliant on their founder/owners as principal marketer and salesperson, operations head, director of HR, head of procurement and supply, production manager, etc. etc.

It’s inevitable that a small business owner will do most if not all of the work at the beginning, but as the business grows, the company’s knowledge, skill set, and processes must be progressively systematized. The key is to get what is in the owner’s head out into the systems and processes and structures of the enterprise. This is so that employees can act and innovate based on the owner’s knowledge and acumen.

A few years ago, I was chatting with the president of a small tool supply business. The owner, a man in his early 50s, had succumbed to a massive heart attack and died on the job. When everyone in the company got over the initial shock, they realized that everything of consequence about running that business was in the owner’s head. We’re talking processes, supplier lists, client contacts, stocks, financials. Everything. The new president admitted freely that the company almost went under, simply because no one knew who to contact upstream or downstream, or even the full picture of the business. Disaster was averted (beyond the death of the owner), but it could easily have been otherwise.

Companies, even very small businesses, need to think about worst case scenarios. For a small business, the worst case is always the permanent or temporary loss of the owner/president. Can the company operate for a length of time without it’s principal impetus to action? Would employees know who to call at clients or suppliers? Do they know who the insurance brokers are? Do they have a relationship with the banker? How about the accountant?

The owner doesn’t need to die for this to be a major hindrance to the company. It could be personal or family illness, injury, or just overwork, leading to the principal not being at his or her personal best for a length of time.

The time to prepare for these situations is now, when everything is operating smoothly. Even small businesses must improve their robustness. This is the ability to survive and even thrive in adverse circumstances.

© 2011 Richard Martin. Reproduction and quotes permitted with full and proper attribution.

Don’t Become a Prisoner of Your Business

Posted: July 6, 2011 in Business, Entrepreneurship, Management, Personal Development, Strategy, Succession planning
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A few years back I met with prospective client to discuss his objectives for his business. He was in his late sixties, and wanted to retire. Unfortunately, he was the only one who could close business. He had also associated himself with another shareholder who was supposedly brilliant (i.e. the inventive one) but also increasingly erratic in his behaviour with others in the company and with clients. To put a cherry on this particular sundae, the business was also owed a significant amount of money by a major client, with severely hampered cash flow. My prospect told me point blank, “I want to retire, but I’m a prisoner of my own company. I can’t sell it, because it’s worth nothing without me; I have no one to take over from me; and I’m owed a significant amount of money to get at least something out of it if I were to liquidate it.” He figured his best option was to bring in one of his technicians to run the company, someone with little actual business experience, and who was also very young (about 25 years old). I tendered a proposal to help him get out of that mess, but he claimed he didn’t have the money to pay me.

All in all, not a pretty situation. Though it’s admittedly extreme, in my work with small business owners and entrepreneurs, I repeatedly encounter owners who, though not necessarily a prisoner of their business, could be reckoned fairly close to being so. In my mind, there are two basic prosperity models for small business owners. One is to build a machine, a business that can be passed on to one’s children or associates, or otherwise sold at a reasonable profit. The other model is to operate a business for a number of years, drawing a salary and dividends commensurate with one’s overall revenues and personal objectives.

In the first, you realize that you have to create systems and processes and to surround yourself with people who can eventually run the business without you. You can then choose to scale back your activities in the company, or to sell or transfer it. The bottom line though is that you are no longer required to be there on a day-to-day basis to make it work. The most important area of course is in sales. Finding sales talent is not easy, and it’s a challenge to compensate good salespeople in a small business. The most common way to do so is to ensure they have a stake in the business, either through bonuses or an ownership position, although that can sometimes create a whole other raft of issues.

Not all businesses can be successfully turned into a machine, so it’s important to know if your business falls into that category. In many, perhaps most, cases, it doesn’t. That’s why it’s important to be realistic about your prospects for selling or transferring a business that would have to be a going concern without you. Also, many small business owners make the mistake of overestimating the value of their business for selling. Many entrepreneurs think it will be worth two or three times annual revenue, when in actuality they would be lucky to get one year’s revenue for it. In many cases, it’s more like 25% to 50%, and there is often a need for the seller to remain with the business for a number of years in order to maintain client relationships or transfer them to the buyer.

It’s important to be realistic about these matters. In many cases, you’re better off to take a salary and dividends, and build a retirement nestegg outside the business. That way, even if you can’t sell the business for a lot of money, or if you can’t sell it at all, then at least you have built up your retirement fund.

There are numerous advantages to owning a business and being an entrepreneur, but it’s not when you’re 65 and wanting to retire that it is time to start planning for your retirement or extrication from your business.

© 2011 Richard Martin. Reproduction and quotes permitted for non-commercial purposes with full and proper attribution.