Category Archives: Growth Consulting

Spring Colds and Business Lethargy

Have you ever battled one of those seasonal colds that seems to set in just as the quarter changes? The kind that start out innocuously and, within a day or two, take over your body are the worst. With a stopped-up head, compounded by the medicine-induced slowdown of brain activity, perhaps a headache…you simply feel immobilized. Try as one might, even simple tasks require Herculean effort. Truly demanding focus–be it mental, emotional, or physical–wears out and leaves us exhausted.

In business settings, we can experience the onset of lethargy similar to the seasonal cold in cycles not unlike the changing of the seasons. Consider: when you finish your busiest season of the year, the week or so following can be extremely slow and unproductive; or a project comes to a close and your team is worn out; or your work group has just added a lot of new staff and some of your job is now done by others. While all of these situations seem to describe events that lead to a lack of work, what else can lead to job boredom?

Underemployment is a huge contributor to work environments in which employees (and management!) is under-motivated. How does this occur? Usually, when we take a position with an organization, we agree to a certain job description, rate of compensation and benefits package. However, we rarely talk about the career path, opportunity for advancement, and milestones that trigger promotion. If these items are discussed, they are discussed on the front end briefly because we read that we should. How can we keep the topic matter “front and center” throughout our relationship with an employer?

Much of it boils down to culture. Does your organization have intentionality/purposefulness about its culture? Is it “tuned in” to the needs of its employees, or only looking out for shareholder interests? While financial and accounting textbooks encourage us to only think about the “bottom line,” we all know that boring workplaces can be a downer and that culturally blase organizations lose talent, customers, and market share in the long term.

Either join a group that has a culture that values the employee, or be a change agent to help it become such! Speak with your supervisor, HR contact, etc about ideas that you have to enhance employee engagement. It has been our experience that, in many cases, executives have not only heard about progressive corporate cultures within their industry, but would like to have a reason to begin migrating in that direction. Keep in mind–“baby steps” are still walking! Perhaps you will be asked to join or facilitate an employee group to explore ways to make your office a better place to work. If so, you can escape the lethargy and begin to enjoy your avocation. Congrats to all who dare to embark on the journey from “medicine head” to lucidity!

Float Like a Butterfly, Sting Like a…?

In watching the rerun of “Ali” over the weekend, I was transfixed by the man on a mission, the fighter originally known as Cassius Clay. Muhammad Ali was motivated by multiple factors. He fought for Allah…for the repressed…for black men and women who yearned to be free…for his own self-worth. Stronger, more experienced fighters were knocked down and out time and again by this focused innovator of the boxing ring. Ali had the incredible footwork that made him elusive and seemingly able to “float like a butterfly.” Added to the footwork, he had a lethal left hand that, in his words, “stung like a bee.” This formidable combination proved almost unstoppable throughout a career that spanned a couple of decades.

In what ways is a prizefighter like a business executive? There’s the obvious–not everyone will agree with your beliefs and practices. Sometimes, we are called to make a stand on a life issue that is much bigger than ourselves or event the moment of competition. For many, a career pursuit is an opportunity to find fulfillment as we exercise our gifts and abilities and hope that our contribution to society has been positive and enduring.

But, beyond the esoteric comparisons, what else can we as business leaders derive from Ali and his legacy? He came into boxing at a time when standing toe-to-toe and slugging the other fighter into submission was the conventional wisdom. What did he do differently? He changed the game! By incorporating speedy footwork designed to force others to come to him, emphasizing endurance, and furious arm/hand speed, Muhammad Ali demonstrated that brute force could be overcome, just as other methods of warfare have been replaced over time. The “sting” of Ali was his counterpunching capability–to absorb what the competition threw his way, and to come back with a vengeance and knockout blow to the head.

In what ways have you undertaken a game-changing strategy? When your industry, product, service, talent, etc would dictate the terms to you, do you roll over and take it? Or, do you devise a unique approach that suits your unique competitive advantage and exploit it to gain an upper hand? Are you daring in the face of such long odds? Most of the innovators of our time have been

As to your counterpunch, do you have what it takes to observe the competition’s best effort, take it in stride, and initiate your own offensive? Does it deliver a “sting?” Or, is it benign and overlooked for lack of potency? Arise and conquer! Find a way to “punch” back when your adversary is resting on laurels. Develop your own effective means to TKO them and win your prize.

May you develop the knack to float like a butterfly and sting like a…

 

Do You Want a Chinese or Indian Fender?

Fender Musical Instruments Corp’s announcement that they will seek an IPO to raise cash to pay down senior debt is not so newsworthy. The other intended uses of proceeds are, however, very interesting. Fender is looking ahead to emerging market growth as a source for sales to take the company from the $1BB annual revenues level. China and India are warming to guitar music and Fender wants to promote electric guitars to all who will jump on the bandwagon.

Fender was sold  by its founder to Columbia Records in 1965 and then it was purchased by current ownership in 1985. Currently, 47% of sales come from outside the United States and are distributed among 85 countries. Gibson is a major competitor on the new guitar front; resellers like eBay on the used. The brand legacy in rock ‘n roll is ingrained in the American pop culture, with musical icons like Eric Clapton counted among enthusiasts. In fact, a Clapton Stratocaster sells for $2,000+. As emerging markets embrace capitalism and portions of Western culture, consumer products companies like Fender want to make sure they explore market opportunities.

This pattern brings up an interesting question–how has your business embraced globalization, and to what degree? Are emerging markets (including the “BRIC” nations of Brazil, Russia, India and China) on your radar? How might they become more germane to your business strategies? Many readers may have seen the “Shift Happens” slideshow what trumpets the rate of change in our world, the shifting balance of economic power, and the surge in education in countries that did not used to be democracies. One of the sure-fire take-aways from the slideshow should be that we need to embrace new paradigms for almost every area of life if we are to remain competitive.

What types of innovation and change are you contemplating? Even with a solid history of selling Telecasters and supplying the like of Jimi Hendrix with musical equipment, Fender continues to push the envelope. Acquisitions of other brands including musical instrument accessory distributors, launching of a new handcrafted guitar brand, and co-branding deals with Apple and HardRock Cafe all are indicative of a commitment to continuously change the competitive landscape.

Again, are most of us using an old wineskin, or do we embrace new opportunities–even seek them out? How bold are you in the strategic moves you are contemplating right now? Think purposefully about whether your business model could use some innovative approaches. Determine to do whatever it takes to create value–you will be so glad you did!

Tsunami On Hold

In a recent article, “Six Reasons the Tidal Wave of Business Transitions Has NOT Happened,” Wayne Rivers of The Family Business Institute in Raleigh NC suggests why the huge predicted transfer of closely held business ownership and management has not occurred. He writes of delayed retirement, lack of specific vision for retirement, and inability to sell the businesses as key factors. The result is that the outcomes anticipated have been put on hold–but it’s still a question of when and not if.

We concur with Mr. Rivers’ assessment that most businesses are not ready for sale. Some do not generate enough top line revenues; others do not create enough earnings/profits. As we have mentioned in prior posts, a critical part of any business–be it a family-owned one or professional services firm, or any of a myriad of other combinations–is the executive acumen of the team leading the business. If too many decisions are made by to few people, the business is flat out worth less money. Since the person/people selling are planning an exit, what executive prowess exists prior to the sale either will not persist in the near term or soon thereafter. Any buyer studying this phenomenon would have to be wary of buying a controlling position or entire company under these conditions. The buyers, in most cases, do NOT want to manage the company; they want a qualified team in place who can manage it well on their behalf.

When privately held business owners recognize this major hurdle, they can begin to devise a way to leap over it. Often, the advice of a consultant or coach can help in multiple ways. First, by preparing the management team to grow in their authority and decision-making. (The team must, of course, be committed to stay as well.) Secondly, the senior and retiring leaders can be coached to build a new future for themselves that is challenging and rewarding. Finally, a plan can be developed that takes into consideration how to prepare the various stakeholders for the transition to come.

For those who prepare their business systematically for sale, there is better news on the horizon. Private equity groups have money to invest, are paying more than they have in four years, and are looking for opportunities to build a segment presence through roll-ups or narrowly focused portfolios. According to a mergermarket.com report last year, 19% of deals were in industrials and chemicals, 18% in services, and 15% in technology, media and telecommunications in the twelve month lookback period.

In the same mergermarket report, private equity executives said that inadequate management reporting was a top problem 47% of the time and management capability limitations 33% of the time. Shore up your management methods! Prepare to ride the tidal wave of interest in buying private companies as an outcome of the hard work you perform to get your leadership team up to speed to lead without you.

 

 

Super Blues Day

When we are in a presidential election year, the first Tuesday in March brings a flurry of primaries and caucuses that are a strong influence in the nomination process. Often, the candidate who does exceptionally well on that date is propelled into a position of strength at the convention due to the results. The other candidates can be left “singing the blues” if their candidacy is negatively impacted by their showing. In many ways, business performance has its own “Super Tuesday” impetus.

The budgeting process in professional services firms can be likened to the Super Tuesday effort. Once per year, strategic planning leads to goal setting and the development of the financial plan for the upcoming fiscal year. Decisions are made to invest in recruiting, professional development, marketing, client development, client retention, and the other line items that constitute the operating accounts of the firm.

Champions of the first five listed disciplines are almost pitted against one another in vying for limited “discretionary” funds. The opportunity to articulate a business case for greater investment in the category of one’s specialty is a beauty pageant “won” usually by the fortunate individual(s) whose programs align with where the executive committee is motivated to invest. Those who do not receive the funding they would like are similar to political candidates who do not win enough states–their careers are not over, but they realize that they have suffered a setback that is visible to all.

To avoid the “bluesy” sense of winning and losing, firms need to become more savvy in the way they approach the process. Many firms with less than 50 total employees don’t have the luxury of having full time staff for even one of these very specific roles. There may be a generalist who oversees multiple categories (e.g. an HR director, firm administrator, or combo marketing and business development person), but not specialists with an experience base as deep as the billable professionals have in their own respective fields. What’s a firm to do? How about hiring the expertise on a fractional basis? In this modern age of telecommuting, contract workers, and flexible work environments, chances are high that one could secure insightful contributors without having to provide benefits or create a new full-time position.

The bigger challenge, however, is not simply getting professional (in their own field) leaders, but changing the strategic planning process to become more inclusive. Having these leaders participate earlier in the strategic planning process can yield great results for your firm. It may very well be that they would bring competitive intelligence about what other peer firms are doing. It is likely that they can sharpen one another’s areas by hearing what is of concern and passion. At the very least, they become more actively engaged stakeholders in the decisions that are made with regards to goals, budget and direction.

Avoid the post-budgeting blues by changing the way you develop your strategic plan and goals. Professionalize the management of your firm through intentionally building a team of smart leaders in the “back office.” Create the culture where your firm looks forward to your internal Super Tuesday season as a way to coalesce and build momentum!