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Missing Ingredient:Training & Education (#1-28-14) Newsletter #149

Posted by Douglas A Wick on Mon, Jan 27, 2014

Education resized 600Positioning Systems and Gazelles coaches work with thousands of mid-market Growth companies from all over the world.  Top performers commit to 3 key disciplines (habits) that both differentiate them AND lead to their consistent success: #1 They consistently apply the Four Decisions content and tools to their daily operational routines; #2 They build into their leaders’ schedules a regular, ongoing commitment to executive education (learning); and #3 They develop and utilize an ongoing accountability relationship with an outside, independent business Coach.  In this newsletter we look at why training and education is so critical to growing your business: 

Michael Dell is a great example of ongoing Executive learning and education to provide Dell a competitive edge in the PC market. Michael’s quote sums it all up…”Start with smart executives and then keep them smart.

Any mid-size business that wants to be successful recognizes and applies the principles of training and education to their staff. Leadership succession, growth, and competitive edge come from growing the people in your business.  Learning today is one competitive advantage that keeps your business sharp, insures progressive improvement, breeding a culture where knowledge and action produce dynamic results.

One of my clients, Fleck Sales, a beer distributor, takes growing and educating its people seriously.  The beer industry is extremely competitive.  Craft Brands have introduced new competitive pressures and expanded SKU’s complicating and increasing inventory, turns, and obscuring the retailer’s decision-making on what products to carry.  In addition recent trends to sweeter alcoholic beverages put increased competitive pressure to improve last year’s numbers and increase market share.

It’s critical that their sales, merchandising, and delivery people have knowledge of the increasing number of brands they carry to help their retailers make the right choices to improve their bottom line and revenues.

Their distributor Miller Coors provides excellent resources for training and education.  Yet these tools are

worthless if they are not resourced and utilized by their staff.  Fleck Sales recently embarked on developing training programs not just for entering employees, but mandating each supervisor require a specific designation of courses to be completed by each employee dependent upon their experience and development level. 

Several of the staff has already truly embraced the opportunity to learn.  Can you guess where these people are headed in the development of their careers at Fleck Sales? 

With the number of selections now available with the emerging Craft Brands, Fleck recently required all of their sales staff to be tested to earn the ascending titles of Certified Beer Server, Certified Cicerone, and Master Cicerone. 

The practice of learning and education is continuous in this organization.  Monthly leadership meetings frequently conclude with the CEO providing a learning and education element.

Too many businesses profess conviction to training and education, yet fail to practice it in action.

Monthly and Quarterly Meetings utilizing Positioning Systems and Gazelles meeting rhythms process embrace and implicitly respond to this fundamental practice.  Learning and Education should be a critical part of your Strategic Learning process.

Have you experienced the disappointment of hiring a candidate whom you felt had great potential to succeed in your business, yet never realized their potential?

Perhaps the fault is your businesses inability to provide them with a path to follow to unleash their possibilities through training and education.   There’s nothing worse than failing to provide development to someone who is yearning to release their capabilities!

What restrains your business from providing the training and education your people can benefit from? 

For a limited time Positioning Systems with the help of Gazelles Growth Institute is providing our readers with several free learning courses as a gift to you.

Outlearn your competition, click here to select a class including:

Patrick Lencioni’s - The 5 Dysfunctions of a Team

Liz Wiseman’s - Multipliers

Seth Godin’s - Purple Cow

Jack Stack’s - The Great Game of Business

Fred Reichheld - The Ultimate Question 2.0

Geoff Smart and Randy Street’s - Who: The A Method for Hiring

Sign up for free and choose from these selections to present to your staff at your next leadership meeting. 

Positioning Systems is committed to helping our clients have the best people through providing top thought leadership and best practices to our clients.  Learn how you can improve your staff’s performance through education and training by selecting a class to develop your people now.   This is our gift to you.  Do something about it NOW!

Topics: quarterly meetings, Strategic Discipline, People, Training, monthly meetings

Sell Your Business: A Good Example (#5-28-13) Newsletter #141

Posted by Douglas A Wick on Mon, May 27, 2013

Busines for Sale Ad resized 600Watching my customers achieve a theme, their One Thing for the Quarter or year is an extremely rewarding part of being a Gazelles Coach/Consultant.   The pinnacle of that experience is watching your customer sell his business and be genuinely rewarded in the process for his tireless efforts and energy to do what is right for his employees and staff as well as himself. 

There are a lot of business owners in the baby boomer era reaching retirement age and looking soon to divest of the businesses they’ve created.  A recent article By Verne Harnish, “Growth Guy” (author of Mastering the Rockefeller Habits) in Fortune Magazine offers tips on the tricks buyers can play.  Entrepreneurs work years building up the value in their business only to give a big chunk of it away when it comes time to sell.  Why?  Savvy corporate acquisition teams have a prescribed method for wearing down the most seasoned entrepreneurs, backing them into a corner where they have to sell for a steep discount.

It doesn’t have to be that way.  In reality a sale can go extremely well when you’re prepared and follow the advice of good advisors.  In addition you can prepare your business for a high return by investing in the business now and making it more attractive to a prospective buyer.

In fact recent indicators (Why the value of your business is going up)going up2 larger business richer offers (Built to Sell) resized 600 show that average multiple being offered to business owners is trending upwards. 

The news is better for businesses with at least $3 million in annual revenue whose average multiple is now closing in on five times Earnings Before Interest Taxes, Depreciation and Amortization (EBITDA).

Here’s a real life example of a local business owner who sold his business to offer some insight and perspectives on how things can go well when you get a legitimate inquiry that turns into an opportunity to sell.  The purchaser, their company name and the company they purchased requested we keep their names  confideintial. Please forgive this inability to give you specific names.  It should not diminish the value of this example of following a positive process for selling your business. 

A former client of mine sold his business a few years ago and can give some insight and perspective on how things can go well when you get a legitimate inquiry that turns into an opportunity to sell. 

In order to respect his privacy and the non-disclosure agreement between him and the purchasing company we will keep his name and the purchasing company’s name private.  Let’s just call him Jim and the purchasing company ABC Corp.

Jim initially received an inquiry about two years prior to his business sale closing.  They had specific interest in his company since it was vertically niched to their industry. The persistence in their approach was consistent.  They would contact Jim and then go away for a month or two but would always come back with more questions.

During this time Jim worked with Positioning Systems Business Development and Coaching firm immersing the best practices and top thought leadership from Gazelles Mastering the Rockefeller Habits.  The focus on strategic planning and specifically a process called Strategic Discipline built a routine, structured, systematic pattern that had been lacking in the business.  The result was a cadence of accountability within their leadership team, committed to annual, quarterly, monthly, weekly, and daily huddles focused Priorities, Metrics and Meeting Rhythms. 


One of the immediate benefits of the Quarterly Strategic Planning Process was a step up in customer service.  Jim’s company’s customer service rating showed a very significant improvement in the very first quarterly theme.   It was a remarkable effort that indicated how powerful focusing on One Thing can be.  An industry expert noticed the outstanding service which directly led to a prominent trade show display providing the catalyst for a 25% growth rate the subsequent year. This despite being in a mature industry segment.

ABC Corp., as a suitor, could see this reputation Jim’s company was building.  They were focused on how the company would add to their profit if purchased.  The opportunity in customer service excellence offered an area to achieve this significantly.  We’ll see how ABC Corp’s proprietary experience in their market helped them to significantly increase Jim’s company’s profit margin.

Now things began to get interesting.  Before agreeing to accept a letter of intent, Jim wanted to be sure of 2 things.  First, he wanted to understand the tax implications of any offer so he spent considerable time with his accountant to understand the tax liabilities.  This is an important matter to consider as the income tax can make a significant impact on how much money the seller actually receives.  Also, the taxes can vary a lot depending on whether the transaction is an asset purchase or a stock purchase.  So, make sure you understand this very well.


The second thing Jim wanted to be sure of was that there were no surprises when it came time for due diligence.  Due diligence can be very time consuming and can open a can of worms if the purchaser finds something that would be detrimental to purchasing the company.  Keep in mind, that during due diligence you are legally required to divulge anything and everything about your company, even if it is negative.  So, Jim chose to discuss considerable detail with the purchaser about his company, especially those things that he thought might jeopardize the sale.  “Show the purchaser all your pimples.  Don’t hide anything,” says Jim.  In addition, he requested as much detail as possible about the terms of the purchase from ABC’s perspective.  Once these details were out in the open, then Jim felt comfortable that signing a letter of intent would in fact result in the sale being consummated without major problems.  Gathering these details also gave Jim information to discuss with his accountant and attorney.

Jim did not use the services of a broker.  He had been negotiating with two, however when ABC made what was a fair offer he backed out of looking at a broker.  ABC was right in the ballpark of what the brokers were estimating so he didn't feel he needed to work with a broker at that point.

Jim doesn’t recall a specific discussion of EBITDA, but of course they looked at some form of that.  “They always want to look at earnings before interest, taxes and amortization, also, depreciation.  So they definitely were looking at those types of numbers, but not exactly in that form.”

Looking back on the sale Jim still feels very good about it to this day.  The company has remained in the same location, many of the employees remaining and flourishing, although there was some minor attrition due to the changes and some corporate adjustments in functions.   Several of the company’s people have stepped into more responsibilities and the company is enjoying continued growth and success, allowing them to earn more responsibility and earning capacity.  It’s good to feel the employees he hired, nurtured, and trained are doing so well.


If there was one area Jim had reluctance addressing at times it was the cost to his customers of ongoing customer service.  Early on as a consultant we worked to get his customers to pay on time for support.  We often discussed increasing the fee structure for their monthly support; however Jim felt uncomfortable raising this structure perhaps out of fear of losing customers and revenue.    As it turns out with their growing reputation he could have doubled his support fees and not had much attrition.

In fact ABC did exactly that the following year providing a substantial profit base for the business.  Jim’s company had previously relied on new software sales to generate most of its profit each year. 

That doesn’t diminish at all how Jim feels about his sale.  The comfort of completing it quickly, offering his employees the opportunity to keep their jobs and be providing greater opportunity, only is minimized by the rewarding feeling of having built something that someone else saw as having significant value to others.

Considering selling your business in the near future From Verne Harnish’s Fortune article, here are some of their dirty tricks to watch for from buyers.


The first step is counterintuitive, which is why it’s so effective. The buyer offers the entrepreneur an insanely large price for the business and suggests the deal can close in weeks. 

The offer--always expressed as some multiple of EBITDA, to condition the entrepreneur to become overly sensitive to expenditures--will be a price that is 50% to 200% more than what even the entrepreneur thinks the business is worth.  It looks like the deal of the century.

Why would buyers do this? To get entrepreneurs to drop their guard.  Nothing builds a temporary relationship faster than offering a premium price for the business. I say “temporary,” because entrepreneurs are not likely to stick around after the sale.

It also gets entrepreneurs and their spouses dreaming about the life they’ll lead after the sale – the houses, boats, and vacations – and planning for what they’ll do once they have a boatload of money. 

More importantly, buyers do this to entice sellers to sign an exclusivity agreement that prevents them from talking with other potential buyers for six months during the due diligence period – which they promise will go quickly.  Entrepreneurs will usually sign on the dotted line, relieved that they are going to get a great price—even if it is ultimately half of what’s offered--and not have to deal with other buyers--which is extremely time consuming.  But that’s the beginning of their downfall.


Once the document is signed, buyers will drag out due diligence for months, while promising that everything should be wrapped up shortly.  If I had a nickel for every time an entrepreneur heard “It’s just a couple weeks more” we could all retire.

And as due diligence gets dragged out, because the buyer tied the selling price to some multiple of EBIDTA, the CEO starts putting off key expenditures that she would otherwise make to keep the business humming along – a key hire or media purchase or training session.


To make matters worse, the buyer starts disrupting the entrepreneur’s rhythms and life through the infamous “emergency meeting.” The evening before an entrepreneur departs for a family vacation or major trade show, the M&A team will call to say that there’s been a problem with the deal and demand that he or she show up for a meeting the next day to straighten things out.

Afraid to derail the deal, the frazzled entrepreneur will cancel plans at the last minute. As a result, both the family and business team will start leaning on the owner to get the deal done.  The pressure will continue to mount.


With the entrepreneur mentally checked out of the business in anticipation of the sale and worn out from missing vacations and the grind of due diligence—and the business suffering from a cutback in critical expenditures to pump up EBITDA—the business unsurprisingly suffers a temporary slump.  It’s all part of the buyer’s game plan.

The corporate buyer wants the company’s performance to suffer a little so it can use it as a giant sledgehammer to drive down the price at the 59th minute of the eleventh hour. 

Beat up by the entire process, the entrepreneur will begrudgingly give in to all kinds of last minute demands and concessions affecting the final price of the business. 


So what do you do to avoid this scenario—and still unload your business? First, enlist a good business broker (This is no time for amateur hour) to set up an auction for you. Don’t let a single potential buyer call the shots.  One friend identified 23 strategic buyers, of which 7 came to the table to bid for the business.

As noted, Jim didn’t have this type of conversation with a broker.  He didn’t understand what the offer would be.  However he did get an evaluation and the broker and ABC, ended up being in the same ballpark.  

If a serious prospect wants an exclusivity agreement, limit it to  30 days and require a big deposit—say $250,000—that will be forfeited if the deal isn’t completed in that window.  And have “the box” of materials prepared in advance so you are bulletproof during due diligence.

Last, as best you can, insulate yourself from the transaction. Have your CFO or another trusted executive work with your broker as a go-between with the buyer, so you don’t get distracted from leading your team. Push back against last-minute demands for meetings. You want to be calm and thinking clearly every time you negotiate—and not fresh out of a fight with your spouse about cancelling the family vacation.

Overall, keep your head in the game and keep running the business as if the deal isn’t going to happen up until the moment you cash the final check!!



Aspiring to sell your business?  Click here to download Gazelles White Paper “Begin with the end in Mind: Sell your Business the Right Way which includes a list of key players to have on your team and strategies to help you sell.



 "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
Rule #1: Never lose Money.   Rule #2: Never forget Rule #1
- Warren Buffett
“Chase the vision not the money. The money will end up following you.”
-   Tony Hsieh, Co-Founder Zappos

Topics: customer service, Strategic Discipline, SELL YOUR BUSINESS, Culture of Discipline

Rinse Cottage Cheese – Advance or Retreat on Discipline Newsletter #133 9-25-12 (Example)

Posted by Douglas A Wick on Tue, Oct 16, 2012

One of the stories in Jim Collins Good to Great is about a disciplined world-class athlete named Dave Scott, who won the Hawaii Ironman Triathlon six times.  Despite having a training schedule that would burn at least 5,000 calories per day Dave Scott would still rinse his cottage cheese to get the extra fat off.dave scott2 resized 600

How many of you in our businesses have the discipline, commitment and dedication to achieve this level of excellence?

Rinsing your cottage cheese is an obsessive activity that few athletes undertake.  Does it give Dave Scott an advantage?  Of course it does!  If not physically then psychologically. 

The requirement of Strategic Discipline is not something that a good company may wish to consider.  It is the recipe for only those who wish to be Great!  If you recall Collins pointing out in Good to Great, “Good is the enemy of Great!”   You must have a sincere, burning desire to be great in order to undertake the disciplines required to achieve Strategic Discipline and meet or exceed the fundamental principles of the Rockefeller Habit Checklist.

In Dan Greer’s blog, Rinsing Your Cottage Cheese he states, “From a business planning model this represents the last 10 percent of work that most people are not willing to do or even know exists to make their project or program the best it possibly could be.  Most people are willing to settle for 75-90% effort and feel that should really represent the best they can produce.

Sometimes the last 10% represents seemingly little things like a spot on the carpet or windows that have not been cleaned.  However that can be the very thing that a customer will notice and come to the conclusion that if you do not care about those areas what else are you not doing to be your best that they cannot see."

Collins writes, “Everyone would like to be the best, but most organizations lack the discipline to figure out with egoless clarity what they can be the best at and the will to do whatever it takes to turn that potential into reality.”  Bottom line they lack the character and the discipline to rinse their cottage cheese.”

So why don’t companies have the character and discipline to rinse their cottage cheese?

We could start with a leader that doesn’t care, however I simply don’t believe there are many people in leadership positions who don’t care or at least care for the right things. 

Rather I believe the fault lies in the CEO/President/Leadership position failure to recognize how their ego is limiting their company’s growth.  Most of these leaders have come by their ego, through great sacrifices exhausting self-discipline, supreme confidence, and the illusion that all was accomplished without the significant help of any others.

It blinds them to the need to establish discipline within their organization.  They may have great, even extreme personal self-discipline yet this same discipline it not evident in the organization.

Remember Collins path from Good to Great, Build Up to Breakthrough requires Disciplined People, Disciplined Thought and Disciplined Action.  It should be achieved in just this order.

A company I worked with for a short time had several family members within the leadership group of their organization.  The difficulty this brings to determining objectivity is often unrecognized by the leader.  No matter how objective we are, children when in your business organization are almost impossible to judge objectively, and the workplace environment only makes this more challenging. 

In fact even if the President remains objective, the problem isn’t with the children skills, talents and capabilities,  it’s the people surrounding them that always feel that the family members are getting preferential treatment.  It’s difficult to curtail petty jealousies in a group without family ties, imagine the challenge this presents with them.

My short time with this President we made many strides in helping him and his company become more productive, yet he refused to allow us to move to the next step to get his leadership team involved. Was he protecting himself from objectively viewing the performance of his children in the organization?  It’s not clear to me whether that was true or perhaps he didn’t feel my contributions measured up to his expectations and that my involvement would serve as a catalyst to push the leadership team beyond their present performance levels.

Another business I worked with had a similar situation where a family member was involved in the organization.  His performance was stellar and many of his ideas served to catapult the company forward where the necessary manpower, ideas and resources had been lacking before.  He was strong willed and his influence on the leadership team at first I thought impeded them from speaking more openly.  

Yet in this same leadership group, father and son would openly disagree and have conflicts.  The value of having this occur in these weekly meeting rhythms encouraged the rest of the team to step up and voice their opinions as well.  When they realized the son could speak out and be overruled their confidence grew that their opinions mattered and that at worst their ideas could be shot down as well, however at least their input would be received.

The team grew through these meetings, the DNA of the leader, Dennis Haefner (See Ideal Computer Systems Story was passed on and eventually when the businesses was purchased this leadership team was seen as a source of strength by the purchasers and everyone maintained an important role in leading the company under the new ownership.   

Developing a strident discipline of meeting rhythms, dashboard metrics to measure your performance and achievement of priorities demands more from leadership and the executive team than many companies are willing to become accountable for.  Often this has been compared to disciplining our children.  Too frequently we allow them to perform at standards lower than what was demanded of us as we grew up, under the disguise of “their good kids.” 

We fail to discipline not because it will hurt them, rather we lack the energy and commitment to realize how important discipline plays in the role of helping our children achieve.

Discipline in our homes, with our businesses, demands a higher standard.  Reaching the apex of our capabilities is not for the weak, but for the determined and courageous who seek to become more than what we believe is in us. 

A Gazelles coach can be a healthy objective observer to help your company raise the bar on performance and establish a standard of discipline that you did not believe you were capable of.

Is your business retreating or advancing toward discipline?   Can you truly tell?  Have you had your team complete the Rockefeller Habits Checklist recently?   More importantly have you had your team complete The Advantage’s Organizational Health Survey, or perhaps assess your business sell-ability score through John Warrilow’s Built to Sell Website. 

Perhaps it’s time to consider acquiring a coach for your business to help you remain objective and achieve the vision you’ve had for your businesses growth.  If so you may wish to also consider a Positioning Systems Needs Assessment

Topics: Discipline, Good to Great, Strategic Discipline

Innovation Involves Risk #8-28-12 (Example) Newsletter #132

Posted by Douglas A Wick on Sun, Sep 9, 2012

Every business leader faces the currents of change.  Today’s business environment is full of sweeping changes from social media to health care reform.  describe the imageMaking good decisions in these challenging times requires leadership that listens to their employees and customers for feedback and then has the courage to change. The following is an example of one of my clients who has consistently beaten challenges and recently made a remarkable innovation that required considerable risk.  First a little background on All County Music and Fred Schiff’s leadership capabilities.

Hurricanes, recessions, big box competitors, Fred Schiff of All County Music has faced it all. With each challenge Fred has learned lessons, remained true to his principals of foundational business practices and weathered the storm. 

Hurricanes are part of the weather challenge that every business in the southeast coast ofFloridaface. In the mid 1990’s what’s been called the chain store blitzkrieg era, a large competitor, Mars opened a location 7 miles from All County Music’s main location.  In quick succession Sam Ash and Guitar Center opened as well close to them, all large chain stores with major muscle to hurt Fred’s core business.  And they did, in fact more stores opened to compete with All County and each time Fred noticed as much as a 30% drop in his monthly retail business.

All this activity gave Fred many sleepless nights, but instead of sitting back and taking the next hit, Fred hit back.  Band rentals and supporting school band programs has been the backbone of All County Music’s business.  That’s where Fred focused.  He developed a plan that met or exceeded the school rental programs that Mars provided solidifying his position with school instrument rentals. 

The chain stores came after his people, and instead of allowing them to leave Fred counter offered effectively, not losing a single key employee to his competition. 

In Leadership Requires Vulnerability we discussed the importance of the business leader being vulnerable in discussing their weaknesses and mistakes with their leadership team and staff.  Fred is no stranger to the courage required to take risks and initiate plans that may not have predictable outcomes. 

In early 2011 Fred put together a plan to remodel his Tamaraclocation showroom, designing a custom-made maple cabinet, hardwood floors and glass doors to reveal his latest specialization project, Florida Flutesdescribe the imageFred intuitively understood (quoted in an article from Music Inc), “There are certain parts of the market that want to be niche, where [customers] want to experience something they can’t get somewhere else.”  Investment in this innovation was $10,000 not including his stock.

It was a bold attempt to predict where the market is going.  Fred anticipated that excellent band students were looking for a business that could serve their individual needs.  To help them improve their sound and performance by offering step up flutes, accessories and service.  “It’s a group of musicians who really want to fine-tune and be able to play different options.  …once parents hear what their children are playing and how it makes a difference in their sound they’re going to be more apt to purchase that and understand the difference between a $5,000 and a $15,000 flute.”

Has Fred’s innovation been right?  Fred’s Florida Flute’s project got up and running in January, including a website dedicated to this instrument specialization.  Through the middle of August flute instrument sales alone had nearly exceeded the forecast Fred had made at the beginning of the year.  describe the imageAccessory and flute service repairs have far exceeded is projections.  The initial investment has been earned back.

It should be pointed out that Fred is a master at developing relationships.  Whether it be a drop-in customer or a flute instructor from a local college or university, Fred’s empathetic approach and concern for doing what is in the customer’s best interest builds immediate rapport and develops long term relationships that grow raving fans and a strong referral base. 

Fred also understands that a business is built through the service after the sale, and he’s committed to meeting his customer’s service needs with a dedicated group of service technicians that are expected to meet very high standards in terms of quality and quantity of performance. As part of the company’s dedication to Florida Flutes they’ve set aside a dedicated bench solely for flutes.  Florida Flute customers are given tours of this section of their service department to ensure they understand the commitment and security they will have for their flute when purchasing it from Florida Flutes.

Again Fred backed his innovation with a commitment to his customers, “If you’ve got a $20,000 flute, you don’t want to put it in the mail for service.  You’d like to bring it somewhere.  And if it means you have to travel a couple of hours to do that, that’s certainly better than having to ship it.”

Building your business requires risks.  Fred Schiff at All County Music understands that vulnerability is part of any business owner’s life.  He’s already planning his next innovation niche move for his business, a similar  move like Florida Flutes but for a different instrument.

Is your business innovating at a pace that anticipates and beats your competition?  Strategic Discipline offers a valuable set of meeting rhythms that offer customer and employee feedback as the backbone of weekly meetings. These feedback areas offer many options and opportunism for innovation if we as business owners take the time to listen. 

Is it time to improve your system for innovating and gather ideas on where your opportunities are? 

Topics: Customer Feedback, Employee Feedback, weekly meetings, Strategic Discipline


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