Business Planning

Business Transformation

In recent weeks we have strongly focused our messaging around “business transformation”. In particular, the need to address the client experience that is being provided in order to transform. So often, leaders regularly talk about getting the right people on board, developing the team and the leadership, having the right product, focusing the business plan, improving execution etc. These are all important dimensions; however, they are not all of it.

The key to business transformation is increasing the level of engagement of both your clients and employees. This is regardless of what business you are in or the nature of the service being provided. In 2009, there was some very compelling Gallup Research supporting this approach. This is illustrated by the graph below and the following key points:

(Click Graph to Expand)

When we interview businesses, so many readily admit they know less than 20% about their client. What would happen if they knew more than 50% about their clients? So, from an implementation perspective we believe it is key to know more about your clients. Then deliver a client centered experience by aligning your products and services to the client and then having employees who are client focused. This transformation in the alignment of your clients, employees and products can be achieved through predictive DNA behavioral insights. This is the fundamental purpose of our DNA Behavior Marketing system and Business DNA programs.

Bringing Children Into The Family Business

In my work with entrepreneurs and family business owners there are quite divergent views about whether to bring children into the family business when they are young adults, or even at any stage. Some say never and others have a desire to perpetuate the family association with the business. There are cases for both. Of course, rationality plays into it and the family legacy.

In my own case, I had to work through many of the issues because our family had a pastoral (cattle ranching) business which I eventually managed for a number of years. I enjoyed it from a business perspective but ultimately did not have the passion to make it a life long endeavor. My brother was not interested at all.

The big issue is, do the children want to be involved in the business? Then importantly, what is their passion for the business?

On one side it is wrong to force the children into something they do not want to be part of. However, is it wrong to deny them the opportunity? Often parents do not want the children in the business to avoid family problems by not mixing family and business.

I believe each case needs to be looked at on its merits. The starting point should be the DNA of the family members and also the DNA of the family and the DNA of the business. By looking at the question from the inside out, the answer will soon be apparent. If the children have a very strong passion for the business then the next issue of how they are involved should be looked at. Who can blame them if the business has been discussed around the dinner table every night for 20+ years?

In considering the involvement of the children, their aptitudes and abilities need to be examined. Passion is one important aspect, having the capability is another. Often this will come down to the role they play – certainly at the start. Thrusting them into a leadership role without experience and knowledge could be a disaster. Protocols need to be put in place for evaluation and determining their place on merit.

Overall, a family governance structure will be needed which properly regulates decision making. The decision making structure needs to be separate for each of the family, investments and business. They are all quite different areas. A key part of this will be the involvement of children in the business.

The Big Question

Last week I participated in a learning program for fast growth businesses conducted by Verne Harnish (founder of Gazelles, Inc) who is world renowned as “The Growth Guy”. Verne has run training workshops for and coached many great entrepreneurs all over the world. He has a very straightforward approach to helping an entrepreneur stay focused.

After listening to Verne for a while, and I have been in his workshops before, it became very clear to me that the Big Question we need to ask ourselves is: What is your success impediment? That is, what is getting in the way of your success? I believe we can continuously ask ourselves this question in every area of our life, at whatever stage we are at. In many instances, it is “you”. So, the question becomes what are you going to do to get out of your own way? Are you self-aware of what is in the way? A lot of this is about your DNA. A lot of the time, we are not aware of what our natural blind spots are which are a core part of our behavior. Ultimately, people succeed or fail because of their behavior. Taking this further into a business or a family, the behaviors of the team or family member will also be important.

This is why coaching is very important. If you are an entrepreneur, Verne will certainly endorse that a coach is critical to your success in business. The same is true in life generally – a good life coach can really help your quality of life. If the coach starts by asking the big question every time then your feet will truly be held to the fire and the right focus will come.

Importance of Private Businesses to Business

When one looks at business, it is easy to miss or not appreciate the importance of private businesses and entrepreneurship. How often do you look to the larger public companies for opportunities, marketing and jobs? Probably a lot. This is what many first think of doing.

I would like to suggest that you change your thinking and focus on private companies. Information from the recent G8 Summit in Italy shows that 70% of the world’s jobs are provided by private companies and 100% of job growth. This would mean the energy forces are with entrepreneurship for many business opportunities.

Think about this next time you hold a strategy session for your business.

Effective Board Behavior

In recent months I have written a few blogs about corporate governance and business risk management. I have expressed the view that many of the corporate problems we have today are related to ineffective board governance. It has been interesting being in Europe for the past 2 weeks where this subject has come up in many discussions with business leaders and in the press. Clearly, the topic of corporate governance is high on the agenda. It needs to be because this is the source of so much corporate damage.

The 2 business problems related to corporate governance getting mentioned the most are executive remuneration and then acquisitions. In both of these areas, executives have allowed their own greed to take over at the expense of the company. This is where the business leaders have really lost sight. The key point then is that the Boards have been too weak to stop them. This gets back to the structure of the board, in particular separation of chairman and CEO/President, majority of non-executives, minimal conflicts of interest and then importantly the right mix of non-executives who have the right behavioral styles to oversee the executives.

Remuneration is a hot topic because it is visible and generally reported in some way by public companies. However, acquisitions are a major issue because of the high potential for destruction. Of course, there are executive remuneration motivations by expanding the company. How many acquisitions really work? Not many and there are plenty of stats to show that. Although, some do. The business integration and financing issues are very difficult. From a governance perspective how much are the boards really looking through these transactions? To what degree has management pushed them through? What is the DNA of the leaders? What is motivating them?

As we move through these turbulent times I hope that more companies will start to look at their board behavior and make changes. This is the first step to true leadership development. Investors also need to look at these issues when making long-term investment decisions.

Identifying the Human Behavior Risks in Your Business

Back in March of this year, I wrote a blog about managing the human risks in your business. This issue has not gone off the radar screen. Identifying the human behavior risks in your business is critical to success. Every person has natural “blind-spots” which, if they go unchecked, can lead to individual performance failures, team failures, leadership failures and ultimately significant business problems. Regardless of the size of your business, the behavior of your people will influence the result. The influence will be higher the more senior the person is in the business. Look at why some major companies have failed in recent years – it is not the poor economy or financial markets, rather they have exposed the fundamental issues, particularly the behavior of leaders.

Some of the blind-spots may not seem that bad – e.g. uncomfortable to confront a problem, lack of patience, emotional decision-maker, poor planner, too driven and so on. However, these problems easily compound themselves at the individual level, then escalate when combined with others blind-spots.

Do you know where the blind-spots in your business are?

We have recently launched the Business Risk Management Report from our Business DNA profile which specifically identifies these risks. Please click here for an example.