Newsletter Archive

Question:  I plan to sell my business one day.   What suggestions do you provide businesses that are looking for a way to eventually have the owner[s] successfully leave their business?

Answer:  Recently one of my clients sold their business [November 2010].  When I’d started working with him originally as an E-Myth coach he indicated to me that was his goal.  It was a very rewarding and happy moment when this gentleman achieved his dream.  He well deserved and earned the rewards from the work he put in. 

From this example and my work watching similar business owners with the same intentions succeed and fail I feel I can offer some insights into achieving your goal.  My first recommendation would be to read John Warrilow’s Built to Sell.  In the book Warrilow describes eight steps to getting your business to sell.  One of the most important is developing a Standard Service Offering which is trainable and provides extraordinary customer value.   The steps are described in my earlier blog, Is Your Business Ready to Sell?  You may wish to take his Saleability Index Test as well. 

What I liked about Warrilow’s book is that he’s direct in how to approach your current employees.  He recommends several ideas on how to keep your current people interested so they help you achieve your desired outcome. 

One of the specific steps he recommends is hiring a sales team.  From my years as a sales person, sales manager, business owner, and business coach, this is one of the more challenging aspects of selling your business.  If you already have a good team or sales person and manager you are ahead of the game.  Our partnership with Objective Management Group puts Positioning Systems in a unique position to not only help you assess your current manager and sales team, but also to train and hire the right people to lead or build your sales.  With the business owner who recently sold his business, the evaluation and subsequent training we engaged with his sales staff resulted in a 35% increase in revenue in a non growth industry.

Let me provide some insights into how my client got his business to sell.  Warrilow recommends finding an E-Myth coach to help you build systems.  I completely agree.  Michael Gerber’s E-Myth Revisited, Why Most  Small Business Don’t Work and What to Do About it is foundational for understanding what you need to do and how to do it in order to get your business ready to sell. 

As a former Senior E-Myth Consultant for almost ten years I can tell you that until my client graduated to the Gazelles tools found in Verne Harnish’s Mastering the Rockefeller Habits he was not in position to sell his business.  At least not profitably.  The tools we initiated through the Rockefeller Habits Four Decisions and executed through Strategic Discipline were critical to getting his business elevated to a position where it was not only attractive to an outside buyer, but also where he could begin to enjoy the freedom he wanted from his business. 

Two pieces were crucial in achieving success.  First my client embraced the idea of focusing on One Thing.  Each year and quarter he and his executive team committed to one priority above all others.  Second, he had an unrelenting commitment to customer service.  This is a reflection of his humanity and understanding of human nature.  No matter what he always observed the ideal that the customer is right.  His determined persistence and resolution to ensure his service consistently achieved superior marks from his customers eventually led to his business achieving a marked separation in performance and perception above his competition.

One of the very first things he adopted was a version of the Net Promoter Score.  He wanted to know how his customers ranked him, and to make sure when his customer support team improved their response time they counterbalanced this with a balancing metric that indicated this improved customer service effort also improved customers perception of their support team. 

My client always remained diligent to the needs of his customers.  He treated his people with respect yet was demanding.  He would classify as both a Multiplier and Level 5 leader.  He is a life-long learner, committed to self-improvement, and perhaps more impressive, he committed to improving the lives of the employees who worked for him. 

In Built to Sell Warrilow recommends several steps beyond his eight to someone who wants to prepare their business for sale.  As mentioned above one of those is to learn from an E-Myth coach, another is to attend the Gazelles Growth Summit and to learn from a Gazelles Coach as well as Mastering the Rockefeller Habits.  As one of just 38 Certified Gazelles Coaches in the World, and a former senior E-Myth consultant, Positioning Systems is in a unique position to offer you the experience in both these areas.  Couple this with the tools to help you evaluate, select and train your sales team through our partnership with OMG and my personal 20+ years of sales and sales management experience you have a powerful combination that can help you prepare your business for sale. 

If your journey with your business eventually will lead you to sell perhaps now is the time to begin to plan for it.  Begin by reading John Warrilow’s book.  If we can be of help to you in growing your business to prepare for sale we’d be honored to help. 

"Once you recognize that the purpose of your life is not to serve your business, but that the primary purpose of your business is to serve your life, you can then go to work on our business, rather than in it, with a full understanding of why it is absolutely necessary for you to do so."

                                        -Michael Gerber,  E-Myth Revisited

"The purpose of going into business is to get free of a job so you can create jobs for other people."

                                        -Michael Gerber,  E-Myth Revisited

“One of the first real management concepts that stuck in my head, was that if you can’t afford the people to run the business for you, then all you have is a job, not a business.  It was like somebody turning on the light for me, because I realized that I needed to get good people in here to do this for me.  I couldn’t keep hiring people at as close to minimum wage as possible.”

                                - Doug Harrison, CEO The Scooter Store

What’s your One Thing?    Click here to download the "Four Decisions” Gazelles White Paper on the Four Decisions you need to get right in order to put your business in a position of salability.      

Question:  The first quarter is over.  I don’t feel my team and business is gaining traction or momentum.  What can I do to build momentum and still make progress this year?

Answer:  You can gain traction and momentum in a quarter, however, the challenge is to realize the result on the bottom line or against the priority you established for that time frame. 

The key question is, what’s your priority?  Did you decide on priorities for the year?  Did you narrow those down to what you need to prioritize for the quarter?  Did you communicate it to your team?  Did you get everyone to agree and commit to it?  What are you doing to measure progress?  Did you create a dashboard and accountabilities and require everyone contributing to your priorities to report on their progress, daily, weekly and monthly? 

Too many times we have too many priorities.  Verne Harnish reminds us that, “A company with too many priorities has no priorities.”

It’s essential to determine what your One Thing is for your 3-5 year plan, the year, and for the quarter.  Your quarter One Thing should tie to the Annual Priorities so you are moving in the same direction. 

Identifying your One Thing and priorities for the year should be the function of an annual strategy and planning session. [Note I mention strategy and planning since the two are distinctly different.  See Strategy or Plan for more.] 

Quarterly your team should meet to review your annual plan and determine whether you’re on course to meet your annual priorities or if there is a need to adjust or change course.  [See Without A Plan: Expect 40% Less for how critical this is.]

Once you’ve determined your priorities then your strategy and plan come down to execution. 

Execution is methodical, disciplined, and routine.  It requires meeting rhythms that continually orchestrate your team around the metrics and priorities you decided to achieve.  Methodical means it’s systematic.  Positioning Systems and Gazelles meeting rhythms mean every meeting has a specific agenda, purpose and time frame to keep your team focused on results.  Disciplined means these meetings include metrics.  They have rules and require strict enforcement of consequences.  Failure is not an option.  Obedience to these policies is a commitment that each team member agrees and adheres to because they recognize the contribution it makes to the good of the organization.

Routine in this sense is simply the habit of being on time, following the agenda, and coming to the meetings prepared to provide your input, feedback on employee and customers and results your team is contributing to the quarterly priorities.  Routine in a growing organization provides the stability that is necessary to balance a fast growing environment. 

To gain traction and momentum for the remainder of the year requires getting your management team to agree on your priorities for the remainder of the year and then set a routine of meeting rhythms to keep everyone accountable.   It may even require developing themes and incentives to present the priorities in a fashion that will help them to stick and get everyone on board and contributing. 

At Positioning Systems our focus on Strategic Discipline through our partnership with Gazelles and formerly with the E-Myth puts us in a unique position to help you establish these execution disciplines in your business.

If you’re interested in learning more on how to accomplish this consider attending the One Day Four Decisions Executive Workshop on April 19^th in Cedar Rapids.  Taking time to learn, step back and be more objective with your business is how the best companies continue to outperform their competitors.  They understand that learning, growing and keeping their people smart is the key to competitive advantage. 

“A company’s goals and priorities won’t be successful in driving the organization if they’re easily forgotten or ignored. Once you’ve established what’s important for your workforce to accomplish in the next quarter or year, you’ve got to do something to help your associates make the necessary emotional connection that generates commitment.”

-- Verne Harnish, Mastering the Rockefeller Habits.

"I learned that we can do anything, but we can't do everything.. at least not at the same time. So think of your priorities not in terms of what activities you do, but when you do them. Timing is everything."

-- Dan Millman, Author

"Careful planning helps us maintain a sense of perspective, purpose and ordered priorities."

-- Stephen Covey, Author and Speaker

"The key is not to prioritize what is on the schedule, but to schedule your priorities." 

-- Stephen Covey, Author and Speaker

"I would have one priority above all others: to acquire as many of the best people as I could. I'd put off everything else to fill my bus. The single biggest constraint on the success of my organization is the ability to get and to hang on to enough of the right people."

--Jim Collins, Good to Great

A dashboard to track priorities is essential to your quarterly progress.   Simply click here to receive a quarterly financial dashboard example and a dashboard template in Excel....

http://strategicdiscipline.positioningsystems.com/sample-dashboard-and-template/

Question:  How can I get my employees to be more accountable?

Answer:  Accountability starts with your selection process for hiring candidates.  The first question to ask is whether or not the people you have working for you demonstrated accountability in their previous positions.  Is your hiring process capable of determining whether or not the person you are interviewing is responsible? 

In preparing for a two day workshop this weekend a client asked me to dedicate more time to Topgrading. He recognized the need for better people as the key to raising the level of performance at his growing business. The issue of accountability is a prominent feature in developing a scorecard for prospective candidates.

If you’ve not accepted and are not using the Topgrading process for hiring you are missing a major success element to provide your business with responsible employees and set the stage for greater growth.  The screening process alone will help you recognize who are the performers in the group that apply.  Once you’ve narrowed the field you should have created a scorecard for the position which included developing a list of measurable accountabilities for the position you are hiring for.  You should also have identified a short list of competencies that you expect the right candidate to possess and the mission or purpose of the position. 

The scorecard is not only a guide for hiring the right person, it should be a measuring stick for grading your present staff that functions in this position.  It’s like a job description only better, since most job descriptions don’t provide metrics to measure the position’s performance. 

Topgrading sets the bar high.  Is your company expecting the right level of performance?  Most companies don’t set the bar high enough.  “A” Players are those that perform at the top ten percent for their position and compensation level.  The accountability measures you set on your scorecard should be benchmarked at this “A” player level.  You can’t expect high performance and accountability unless you ask for it and outline what it looks like.

Even if you’re not hiring, this scorecard is an excellent tool to determine whether or not your present staff is performing to your expectations.

In many cases the reason you’ve not been able to achieve accountability is you’ve simply not set the bar for them to know what’s expected.  If you’ve clearly identified what you expect, and they are not achieving your standards, then shame on you!  Why are you still coddling this person?  Why haven’t you warned them and then followed through with the consequences for not meeting the desired outcomes?  You did offer consequences for non-performance right?

Roger Vorhies of Schaus Vorhies Contracting in Fairfield, Iowa, attended our Rockefeller Habits Public Workshops, and swears by Pearson’s Law.  It is one of a number of tools we share in these workshops.  Pearson’s Law simply states that when performance is measured performance improves.  It further states that when performance is reported back, performance improves dramatically.  Roger has seen a 15% increase in his team’s performance simply through measuring them against standards they expect.

Most people want to perform, yet very few companies take the measures to be clear about what is expected of them.  Furthermore our employees often get mixed signals about what is important and what should be a priority.  We sometimes send our people off on goose chases to get things done and then wonder why they haven’t performed to our level of expectation on the accountabilities we assigned them.  Worse yet is expecting them to perform to standards you have never clearly communicated to them.  How many of your employees go home at the end of the day knowing whether or not they meet their performance targets?

Clear expectations start with the hiring interview.  One of the questions asked in the Topgrading screening interview is to discover what were the expectations for your previous position and how did they change?  In many cases the position we hire people for and the expectations we expect fail to be achieved because we change the playing field. 

How much of the lack of accountability for your people’s performance is your responsibility?  In most if not all the lack of accountability comes from your lack of setting expectations clearly for the position.  If you’ve not determined this, you’ve not established metrics to measure their performance.  Without clear measureable expectations your staff is unclear as to what to do to perform to your standards.  

Finally if there are clear standards, if there is a clear system for them to follow, then why are you accepting mediocrity?   Either change the system so they can perform to the standard you expect or find new people who can meet the present standards.

How do you make sure your people continue to be accountable?  Strategic Discipline provides meeting rhythms like the daily huddle requiring each employee to deliver daily metrics to keep them accountable and bring the pressure of their peers to increase performance.  If accountability is absent in your business, don’t expect it to suddenly appear.  You and your managers will need to raise your expectations, increase discipline, and develop new more positive habits and rituals. 

By no means is this newsletter intended to be a complete list of methods to produce accountability.  Our May newsletter People Lazy or Exhausted discuss how to discover what you may perceive as your employees being inattentive or apathetic is really exhaustion due to change.  This is explored in the book Switch as well as in a new book by Tony Schwartz Be Excellent at Anything, which explores further ways to make yourself and your team more accountable.  I’ll be examining the books and its ideas in my blogs in the coming weeks.

If you’re interested in learning more about how to apply Gazelles tools and the Rockefeller Habits to your business you’re invited to a special one day Four Decisions Rockefeller Habits Workshop, Tuesday, April 19^th in Cedar Rapids, Iowa.  Hope to have the opportunity to meet you in the near future.

What’s a Job Summary Scorecard look like?   Simply click here to receive an Adobe file example of the Topgrading Chief Talent Officer Job Summary Scorecard.

Question:  My Company just completed our Annual Planning.  While we have a solid plan for the year, we didn’t seem to spend much time strategizing.  Is strategy and planning two different activities?
 
Answer:  Planning and strategy are two different cycles.  Most companies are fair to excellent on planning, few are competent at strategy and only the best recognize the difference between the two and actually accomplish both.  

Most companies have what you might call a military command and control approach to planning and management.  They see management’s role as forecasting and planning, organizing, command, coordinate and control.  The objective is to create order, cohesion, harmony and predictability.   

Their strategic planning is anchored in this thinking.   

Willie Pietersen’s book Strategic Learning points out that this would be great if the environment our businesses live in were stable.  His description of today’s environment is described as VUCA: volatile, uncertain, complex, and ambiguous.   Does that aptly describe today’s competitive environment to you?  

Planning in this environment is strictly a numbers game.  In reality strategy is discovery.  The planning approach to strategy makes no provisions for generating ongoing adaption.  Pietersen points out this practice can be fatal in today’s dynamic conditions.  
As I noted in my November newsletter Without A Plan: Expect 40% Less my client who recently sold his business completely readjusted his strategy and plans for 2010 as the first quarter ended due to one of his competitors merging with another competitive company.  It resulted in improved focus, actually increased their momentum resulting in 35% sales increase and a 500% increase in profits.
 
As this example proves, strategy is about competitive rivalry.   
 
Your planning process needs to have a strategic approach to allow you to make necessary adjustments at least every quarter.  In today’s VUCA environment, without the ability to change you may discover you are too far behind to impact what the economy or competitors are affecting on your business.
 
Throughout my blogs and newsletters I’ve emphasized the importance of Strategic Discipline.  Pietersen warns you must have a systematic method for strategic thinking.  Collective excellence is achieved through repetition, deliberate practice, and effective learning to continuously improve the desired outputs of this process.  

Nature he points out is our best teacher.  99% of all the species that ever existed are now extinct.  As Charles Darwin noted, “It is not the strongest of the species that survive, or the most intelligent, but the one that proves itself most responsive to change.”  

We have an advantage over other organisms - the power to think and learn.  Harvard Business School Press author, Arie de Geus observes, “In the future, an organizations ability to learn faster than its competitors may be its only sustainable competitive advantage.”
 
The best companies recognize the importance of continuous learning.  Companies like GE, Dell, Microsoft, Intel and many others require their leadership and management teams to deliberately and consistently improve their knowledge base.  It’s why one reason why Gazelle’s offers two Growth Summits annually to provide our clients with the top thought leaders and best practices to learn and improve their businesses.
 
Pietersen asks managers to analyze the strength of their organizations method of strategy creation with a quick exercise on Strategy and Planning.  I’ve included it as a takeaway for this newsletter if you’d like to get a copy of it.  Simply request it below.  

Strategic Learning is about becoming smarter than your competition and being able to turn key insights into competitive advantage.  In today’s over communicated society, knowledge is no longer key; being able to interpret the vast amount of data that’s available and turn this into insights provides the competitive advantage.  If you and your people do not have a systematic method for strategic thinking, how will you achieve insights that will allow you to gain a competitive edge?  

Your business today must be an adaptive enterprise.  Pietersen offers Five Killer Competencies to move your business into this stage.   Positioning Systems coaching/consulting practice is uniquely positioned to provide a systematic Strategic Discipline to help your business achieve strategic thinking and the capacity to achieve insights into the trends in your industry and the economy.   

If you’ve completed your planning for 2011, consider whether or not you’ve achieved strategic discipline, and if you can change your plans in time to respond to changing economic terms or a competitive attack.   

As a basis for strategy if you’ve not read Verne Harnish’s recent article, Seven Strata of Strategy, we’ll include it with your request to analyze your organization’s Strategy Creation efforts.  
Recognize the importance of strategy and planning as two separate disciplines for your business success.  Realize that insight and learning are two of the greatest competitive advantages your business can have and absolutely requires in today’s changing environment.   

“Most business failures are not the result of things being done poorly.  Businesses fail most often because the assumptions on which the organization has been built and is being run no longer fit reality.”  -Peter Drucker, as noted in Strategic Learning by Willie Pietersen
 
“A war is won or lost before the first battle is fought.” -Sun Tzu, The Essential Art of War
 
“Never underestimate your competition…We may think they’re doing a bad job, but unless they are failing to serve customers in some perceivable way, they’re not vulnerable.  Never overestimate the competition…Even a dominant competitor can be extremely vulnerable.” -Mark Kassof, Mark Kassof & Co.  
 
How good is your organizations method of strategy creation?

Simply click here to send us an email and place "Strategy VS. Planning Assessment in the subject line to determine how well your company is at strategy creation.  We’ll include Verne Harnish’s recent article on the Seven Strata of Strategy to help tune you in to what strategic creation your business needs to be discovering to compete and grow in today’s environment.