Senior Night & Going Away Parties

If you are the type person who enjoys college sports, chances are high that you have witnessed a few senior days/nights during your cheering. Those who are finishing out their intercollegiate athletic careers are celebrated, given a chance to be the star, and walk out of the gym/off the field with their heads held high, regardless the outcome. In like fashion, in the business world, we often have going away parties for those moving on to new opportunities.

WHY do we have parties when someone who has been a part of our organization decides that somewhere else will make him/her happier? Unless, as may be the case, you plan to follow the departing, your reaction ought to be one of introspection. What part of the culture where you work is needing improvement so that employee engagement and retention are raised high enough that people wouldn’t think about going anywhere else?

so happy for YOU!

Recently, I had the opportunity to listen to a conference speaker (Michael Lorsch) speak about the need for organizations to be both smart and healthy. Smart is the category where most managers and employees live: services/products, strategy, marketing, finance/operations, and technology. Healthy, however, is characterized by those “soft & fuzzy” difference makers that constitute an organization’s DNA (culture): minimal politics, high morale, high productivity, minimal confusion, and low turnover. So….an organization wherein people would rather leave than stay in not healthy and, therefore, not likely to be as successful in the long run as one that is emotionally healthy.

In order to build health and overcome dysfunction, Pat Lencioni (Lorsch’s boss) recommends five roles for leaders:

  • go first to build trust
  • mine for conflict
  • force clarity & closure
  • confront difficult issues, and
  • focus on collective outcomes

Why not change your culture and make a HUGE deal about new employees? Become more engaging. Mourn when others leave and figure out why so you can work on the business instead of in it!

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Content With No Content

Does your professional services firm have a strategy to produce, distribute and repurpose content for multiple market segments? If it does, you are in the minority. Best practices are to create and disseminate content to enhance search engine rankings. Philosophically, billable professionals have insights to share and there are numerous venues for thought leadership to be established. The fact of the matter is, sadly, that the professionals simply are not easily engaged to sit down and generate the content.

The almighty billable hour, the internal metrics, and the likelihood that most would prefer to do the work than to write about it, are all reasons one may choose not to blog, write articles or white papers, or post updates ad tweets. Simply put, very few firms have much experience creating an environment that acknowledges and rewards contributions to thought leadership that do not produce an immediate return. Performance measurement and incentive compensation practices will need to be revised in order to encourage content production as a preferred behavior within the daily, weekly, etc schedule.

If, like other forms of outsourcing, the firm were to contract with a contractor to produce content on behalf of the billable professionals, it would most likely lack the technical acumen and personal passion necessary to be an intriguing, gripping read. However, contract content editors may be a very good idea. Either a staff person or outsider could help to determine themes, subjects, and nuances that would make the content more readable in layman terminology.

Revise & Refine

 

Become discontent with unsatisfactory content–both in terms of volume and quality. Find ways to change the corporate culture to celebrate the content revolution. Articulate the increased stature and visibility that authors enjoy. Recruit firm leaders to demonstrate their personal commitment to writing–even when it produces no immediate revenues. Finally, make writing an assignment. Section/niche leaders should have a scheduled slot for covering their “beats.” Those aspiring to become partners can demonstrate their drive by taking on writing responsibilities. With content editors, these activities can be managed to successfully produce great content, repurpose it for other social media uses, and promote firm expertise.

Ambiguous Marketing Budgets lead to… ambiguous results

Have you ever heard the rant of a financial executive who is fuming because marketing ROI is so hard to define? The lament is usually that “branding” is not enough–that some quantifiable return is desired, but no one really pins it down. Some argue that revenues are the only true barometer. Others feel that smaller yardsticks are better–number of new clients, number of proposals made, number of inbound calls, etc. But…what about % of proposals won, % change in inbound calls, etc to provide comparative data?

Yet…”return” still has to be measured in comparison to investment. In many cases, the investment amount is, to quote Churchill, “a riddle, wrapped in a mystery, inside an enigma.” Why is this so? In many privately owned businesses, it is because marketing dollars are enshrouded in expense reimbursements, dues and sponsorships. Actual agency costs, advertising spend, etc are sometimes separate line items on the income statement, but are often rolled up into an aggregate. In order to have credibility with the financial (& equity) folks, we as marketers need to ask for more detail. It is in our best interests to know travel & entertainment, training, and similar expenses that are charged by managers/executives and reimbursed but not clearly demarcated as marketing costs. However, because we are not considered part of the brain trust, we can be excluded from such conversations/communications.

What's Your Measurement?

 

Once we are able to acquire access to the true marketing financials, we can perform an ROI analysis more effectively. (I prefer to describe this as an “ROM.”) Then, tradeoffs can be evaluated. There may be some in the organization who are unwise in their expense management to the point that allowing them to ring up reimbursable costs is not an investment at all, but a distraction from effective, accountable marketing.

Having the frank conversation with the top financial executive/business owner(s) can set the stage for your voice to gain credibility. No longer may you be perceived as the “soft and fuzzy” management team member, but rather a strategic contributor to business performance. If you are savvy enough to learn what your industry standards are for marketing as a percentage of costs/revenues, then you can help set the budget requisite to drive growth and carve out better market share.

As the marketing budget becomes a management accountability tool, results are easier to predict. Sensitivity analysis can then yield insights into the levers that drive revenue performance. Congratulations–you are then on your way to concrete rather than ambiguous conversations and may soon find that the frustration of not being heard begins to fade away…!

One-man rule vs. One-man band

Businesses often can be managed by a strong leader who seems to be involved with every significant decision. In some cases, this type of one-man band is almost unavoidable (e.g. a company with less than five employees, four of whom are in support roles.) However, in organizations that have been fortunate to grow, add management teams, and have complex issues, the controlling leader can either be an icon or an albatross. When is it good–and when is it bad–that the proverbial “buck” stops on one person’s desk?

art by Eldon Doty

 

Chief executives who make decisions without the input of colleagues engage in one-man rule. This practice is a two-edged sword. While few will argue that group management can slow progress and that one can move more nimbly than many, there is always the latent risk that decisions that are made lack depth, insight, and the benefit of buy-in. The biggest travesty of the urge to “go it alone” is that it undermines management succession by depriving others from the opportunity to make meaningful choice on behalf of the enterprise.

Management depth is always in the list of prime characteristics of best managed companies. Management change then, by default, becomes a disorderly process, at times exacerbated by recession or prosperity. The entire organization is often thrown into chaotic operation and often requires a turnaround thereafter.

Instead of putting one’s peers–and, perhaps, one’s own retirement via earnout/sale–at risk, better to avoid one-man rule and seek to engage others. This concept holds true in may of the sexy technology start-up models as well, wherein the “one-man” is equivalent to the group of initial founders who can function as to inhibit the contribution of successive hires. Often, these top executives are extremely bright and have a very high IQ, but lack the EQ (emotional quotient = emotional intelligence) to build out the model and achieve the important milestones due to an unwillingness to invite the input of others.

More to come on how to build out the management team and empower them to make meaningful contributions…

Succession is Passing on Enterprise Capital

What Does It Look Like to You?

Usually, succession planning is done with the assumption that the family intends to pass a singular business to the next generation. But, in an article published in Family Business magazine (Summer, 2011, pp. 60-62), Greg McCann and Rich Morris encourage a different construct. Proposed is the thought that, instead of passing The Business down, the capital can be passed along. By capital, they mean:

  • Values
  • Knowledge
  • Professional Team
  • Financial Assets &
  • Family Legacy

Their perception is based on macro trends in the business world regarding innovation and the implications for privately-held (family-owned specifically) businesses in particular. Trends that are referenced include globalization, technology, and diversification. Combined, these trends necessitate greater innovation than ever before to stay competitive. “Traditionally, family enterprise has been thought of as three generations operating one business. In today’s marketplace, it’s wise to think about three business concepts for each generation to come.” (McCann & Morris)

What do they mean about three business concepts for each generation? The Family Firm Institute, in a study funded by FFI member Joe Goodman on family business longevity, found the following:

  • 10.6% of the families studied controlled only one business.
  • 21.3% of the families controlled five or more businesses.
  • Over the history of the participating families, they had owned an average of 6.1 firms.
  • The families added an average of 2.7 firms through M&A.
  • Over the history of the families’ business activity, their main industry shifted an average of 2.1 times.
  • Over the families’ history, they spun off an average of 1.5 companies.

If privately owned businesses can take note of these facts, different strategic plans will be developed. More focus on the entrepreneurial spirit of the founder, awareness of market shifts, adaptability, and resource stewardship will yield strong results that help make smooth succession a more realistic goal.