Tuesday, October 9, 2018

Am I Part of the Accountability Problem in My Company?

[Editor's Note: True Accountability can be the biggest impediment to strong results in a company. In our last issue we asked the question:
"Is a Lack of Accountability a Problem in My Organization?" In this issue, we continue to explore why accountability may be lacking in your company.]

The Continuing Quest for Accountability -Part II 
Am I Part of the Accountability Problem in My Company?

As leaders of businesses and organizations, we typically think of ourselves as ultimately accountable for the results and success of the organization. We likewise think we hold managers and other leaders in our organizations accountable as well. But...is it possible that the culture we have created actually results in a lack of accountability?

Consider the following behaviors and ask yourself, not only how well you do these, but also, how well you encourage these behaviors in your business?
  • Do you actively obtain the perspectives of others?
  • Do you communicate openly and candidly?
  • Do you actively ask for and offer feedback?
  • Do you learn from both successes and failures?
  • Do you act on the feedback you receive?
  • How well do I align the each employee's work with the key results?
  • Do you value loyalty or tenure more than performance from employees?
  • How is the collaboration across functional boundaries in the organization?
  • Do you always do the things you say you'll do?
  • Do you track progress with reporting that is proactive and transparent to the organization?
  • Do you actively build an environment of trust?
Some business owners think that setting up and tracking metrics from their managers is accountability and do not acknowledge the importance of the above list of attributes. Some business owners or CEOs we have worked with respond with automatic "Yes" responses to these questions. Some suggest that this is "Management 101." The truth is that we find at least several of these behaviors or attributes lacking in many companies and in many business owners or CEOs. In order to get the best results in your organization, every employee needs to feel personal responsibility and accountability for the results. Can you say that exists in your organization?

Submit yourself to some self-reflection. Ask your managers how they honestly think you score on these questions. You might be surprised that others perceive you differently than you perceive yourself.
If you want to change the results in your business, you need to change to a culture of accountability. How does that change start? 

In the end...it all starts with you.

Don't let another year go by. Neglecting the next steps in your company's growth and maturity can be very short-sighted. You need to have your company firing on all cylinders. The Mead Consulting Group has helped many companies achieve greater accountability...and better results.   Contact me to discuss how we can help you do things a bit differently this next year.

Monday, October 8, 2018

The Continuing Quest for Accountability - Part I Is Lack of Accountability a Problem in My Organization?



[Editor’s Note: For over 25 years, Mead Consulting has been conducting assessments at client companies to identify barriers and challenges to growth to the next level. Lack of true accountability continues to be the most frequent issue. I thought it might be useful to address accountability in this article. If you are beginning your planning cycle, a lack of accountability may impede your progress              – dpm]
The Continuing Quest for Accountability
Part I – Is Lack of Accountability a Problem in My Organization

Speaking with a new client recently, the CEO asked me to identify the most frequent problem we see with our new clients. I responded, “Lack of true accountability.”  He seemed skeptical and suggested that we wouldn’t find that to be true at his company. So I asked him, “Does every employee feel responsible for the company’s success and know what their role is in ensuring that success?”
It occurs to me that people have become numb to the meaning of the word, accountability, and that it always seems to apply to everyone else, some other department, etc.  –“They need to be more accountable for results.”
What are some of the attributes in an organization lacking accountability?
Do any of the following look familiar?
·    Unclear Vision and Direction: Employees do not know the keys to company success – or they all have different views as to what they are.
§  Goals may be unclear, confusing,  or there are too many different goals
§  “We keep adding initiatives and projects and never take anything off the list.”
·   Micromanaging or Command and control: Employees do not feel they have control over how to deliver results
· Lack of Job Understanding or Training: “I have never been shown what is expected”; “I didn’t receive any training”
·   “I don’t know where to go for help”
·  Undervalued: “No one cares about my opinion.” People do not feel their opinion is valued – that is, every employee
·  People do not feel comfortable delivering bad news such as the “project is behind schedule” or “we have a major quality problem.” So they ignore or sugarcoat things.
·   People do not feel trusted.
§  “I am not confident my efforts will be rewarded”
§  “I suspect that my manager (the company leader) may take advantage of me”
§  “I question my manager’s (the company leader’s)motives”
§  “I am sure they will take credit for my accomplishments”
· Departments do not cooperate with each other; We constantly practice the “blame game”
·  Employees are Not Engaged - Employees do just enough to get through the day
Be honest. Do you recognize any of the above in your company? On the long personal and organizational “to do” list, accountability should be at the top of the list.  Lack of accountability can paralyze an organization and prevent it from moving forward.  If you see a fatal flaw in yourself, your current leaders, or your organization in any of the above, you should address it immediately.

In the next issue, we will address how to develop a culture of accountability and personal responsibility. Hint: It begins with you!

Monday, August 13, 2018

Don't Miss the opportunity to sell during this upcycle


We missed the selling boom during the last positive cycle and were determined that we would not miss another opportunity.
In one of our Breakfast briefing series a few years ago, Dan McCallin former owner and CEO of Timberline Steel made an interesting statement: "We missed the selling boom during the last positive cycle and were determined that we would not miss another opportunity to sell during the next upcycle. We decided to take the steps so that we were prepared." While Dan originally made that statement during the recession of 2002, and later sold the business in early 2006, the message could certainly apply today. We are in the tenth year of this upcycle. We have all learned that economic cycles don't last forever.

The process for you to exit your company may take the better part of a decade. With interest rates still near record lows, the economy still in expansion mode, and sales multiples at high levels, there may be a tendency on the part of business owners to think that the good times will continue for the foreseeable future. While some business owners may believe they can pull the string when they are ready, the truth is, for many business owners, the exit sales cycle may take several years to execute. Professionals will tell you that in order to sell at highest value, the process includes 1-3 years to get ready, 1 year for the transaction, and then you may have to spend up to 3 years with the company after the sale.

Companies can focus on making fundamental improvements to their business that will help them make their company healthier and more attractive than their competitors.
1. Focus on customer net profitability
2. Upgrade management
3. Cleanup business processes
4. Develop a strategic growth and execution plan
5. Position the company to succeed in any part of the business cycle

Focus on customer net profitability. The tendency is to cling to any customers and revenue no matter the profitability level. A common comment is that "at least they absorb overhead." The notion of unprofitable business absorbing overhead may be one of the greatest false beliefs in business. In many cases, overhead that has been viewed as fixed is really a cost that can be minimized or shed. Carrying unprofitable business will be a continuing cash drain that may inhibit your business' ability to grow as the economy improves.

Upgrade management.  While talent availability may be tightening, take advantage of the opportunity to improve. Similarly, this is a great opportunity to review all of your employees and weed out those with below average performance, poor potential, or unrealized potential. Our clients use a simple tool to rank all employees in terms of potential and performance - the results make it very clear which ones have been a drag on the company.

Cleanup business processes. During boom times, many companies claim they are too busy to scrutinize business processes to make improvements and to streamline in order to increase throughput. That "excuse" can ultimately cost you when you try to sell.

Develop a strategic growth and execution plan. You need a plan that will allow you to be agile enough to take advantage of opportunities in the marketplace. There may be market segments that have been slow to come back; some may never come back the same way. Other market segments, however, may present huge new opportunities. Your organization needs to develop a plan and be prepared to execute.

Never waste the opportunity to improve. Take the opportunity to examine everything, reduce unnecessary expenses, trim those underperformers, examine unprofitable business, streamline business processes, etc. 
   
Take a lesson from the Boy Scouts: Be prepared. These steps can add value to your business. Your business can accelerate faster and be well- positioned to succeed in any market. The market for selling a business will likely continue to be ripe through most of 2019. Those businesses that are prepared and ready are finding a hungry group of buyers and investors with lots of "dry powder" that they need to invest. 

The Mead Consulting Group has been helping middle market companies for over 30 years to add value and prepare for a successful transition. Our clients have consistently enjoyed better results. Investment bankers have told us that our clients are among the best prepared they have ever represented.

Monday, July 23, 2018

The "mayhem" guy is back! Protect your company from mayhem

 The "mayhem" guy is back! In a popular series of television commercials for a property and casualty insurance company, there is a "mayhem" character who causes unexpected disasters for auto owners. In one spot, he's a buzzing mobile phone that falls between the seats. A crash results when the distracted driver starts searching or it. Another has a satellite dish falling on a car; in yet another a navigation systems goes haywire causing a crash. The underlying message is that since mayhem is unavoidable, you need insurance. 
It struck me that companies generate their own versions of mayhem - things that may, on first blush, seem to occur unexpectedly, or are just considered unfortunate.
Here are some examples:
  • Discovering that you don't have the rights to use the trade name you've been using for 15 years
  • Discovering that your employees have been plagiarizing content that is used in your product
  • Employees that are developing your blockbuster new product all leave at once
  • A new competitive product offering undercuts your price by 60%
  • Your customers discover that one of your key suppliers has been substituting a hazardous or substandard material resulting in product malfunction or customer injuries
  • A new business model renders your product irrelevant
  • Discovering that new regulations no longer allow you to ship your product
  • Learning that there is no liability insurance for all the products in the field that you've made for the last 10 years...and a dangerous latent defect has just been discovered
  • Discovering that a "trusted" accounting clerk has methodically stolen $800,000 over the last 10 years
All of these are real stories. Some might say, "back luck." Synonyms for mayhem are chaos, disorder, confusion, turmoil. The dictionary defines mayhem as "needless damage." In truth, all of the above examples could have been identified ahead of time and most could have been avoided, or significantly mitigated. In strong economic times, companies can be myopic and can ignore the need for strategic planning, competitive scanning, and can defer implementing business processes and controls.

Some thoughts as you begin to prepare for 2019:
Develop a strategic growth and execution plan (Please - not another retreat, but a meaningful plan for execution).
  • Do a realistic assessment of where you are (exploitable strengths, weaknesses, opportunities and threats)
  • Perform a competitive scan, looking at traditional competitors as well as possible disruptive threats
  • Develop some scenarios of the future (including those at the extremes) and actions to be taken as these might play out
  • Plan how you might react to potential geopolitical events or the next economic downturn
  • Take a hard look at your culture - Are you living your values?
  • Develop specific actions, metrics and accountability to shore up the weaknesses, fill the gaps, address the risks, and take advantage of the opportunities and strengths
Don't let another year go by. Neglecting the next steps in your company's growth and maturity can be very short-sighted. You need to protect your company from mayhem! Contact me to discuss how we can help you do things a bit differently this year.

Monday, June 25, 2018

"If you don't do anything different, what will life look like around here in 12 months?"

"If you don't do anything different, what will life look like around here in 12 months?"

[Editor's Note: As I was reading a blog recently by my friend - that great sales leadership expert, Colleen Stanley - I came upon the above quote. It made me think that this is the big question all of us, as business owners and CEOs, should be asking ourselves. We hear repeatedly from clients - "We should have done this last year"...or years ago.  I hope you find this article though-provoking.                                -dpm]
  
Procrastination is defined as "the action of delaying or postponing something." We all fall prey to occasional procrastination, feeling that we don't have enough information, hoping that the situation will improve by itself, or an employee will finally improve a problem behavior. Do you see yourself or someone you know in the following comments:
  • We're doing as well as industry averages
  • Everyone's going through the same problems
  • We identified this several times but we didn't follow-through
  • He/She has been really trying to improve. Let's give him/her a bit more time.
  • We're going to wait until we hire the new manager/director/CEO
  • If we let that problem/under-performing person go, we'll never be able to replace them
  • We have too much going on, to be able to tackle this now
  • We're going to stay where we are ...for now
If we defer taking action or making difficult decisions, it seldom results in a better situation. Twelve months later, we are faced with the same situation, one that usually looks worse after 12 months of aging. If we keep repeating the same things and expecting different outcomes - well, we know what Einstein reportedly said about the definition of insanity. 

Business owners and CEOs typically know where the problems are. They may be frustrated because, while the issues have been raised previously, the solutions have not been implemented. Many times, having an experienced, objective outside party can be very effective in not only pointing out the obstacles or issues, but also in keeping the business owner/CEO and the organization focused on execution. 

Are you going to use the same approaches next year or try something different? So...as you begin to think about planning for 2019, are you going to approach it the same as you have in the past. How has that worked? Were you able to identify new opportunities or turns in the market? Were you able to embark on new initiatives that provide your company with new competitive advantages, or an improved cost structure, or an intriguing new business model? As you approach the summer months and planning for 2019, ask yourself the question,  "If you don't do anything different, what will life look like around here in 12 months?"

The Mead Consulting Group is focused on helping business owners and CEOs identify and overcome obstacles to growth and profitability. In short, we help business owners and CEOs "think, plan, and act strategically." Contact me to discuss how to do things a bit differently this next year.

Monday, June 4, 2018

Ten Deadly Sins of CEOs and Business Owners¹

[Editor's Note: Being the CEO or business owner can be a lonely job. It is important to get good feedback so that you can keep a balanced perspective. Below are just ten of the deadly sins that can be committed by the guy or gal at the top. I have been at the top or owner of eight companies - and I know it's not always easy to see yourself clearly. This is a reprint of a previous Issue for Growth. I think it still holds true. As always, we welcome your comments.  - DPM]
                                                                                                                                 
Talking Too Much. You never learn by talking, but some CEOs imagine the world to be in desperate need of their constant wisdom. It is a rare subordinate who will risk stifling a CEO. Be inquisitive, ask questions, and listen at least 75% of the time.
Goals Are Too Aggressive. It is wonderful to have a BHAG (Big Hairy Audacious Goal) or vision. It's another to develop overly aggressive goals on a routine basis. Unrealistic goals "demotivate," especially when compensation is involved. One CEO expected his company to continue its 30 percent annual growth rate, not appreciating that with a larger base and a rapidly maturing market their era of high growth in that market had to end. The result discouraged managers.
Personal Power Building is More Important than Value Building. Some CEOs tend to make decisions that enhance their scope and influence, even at the expense of increasing shareholder value. This can be paradoxically true even when the CEO is a large shareholder or the business owner. Dr Robert Kuhn puts it this way: "I want a CEO whose greed exceeds his ego. Good CEOs and business owners should be motivated more by amassing wealth for their shareholders rather than by building empires for themselves."
Not Respecting or Recognizing the Ideas of OthersCEOs and business owners can be egotistical. Highly successful almost by definition, many CEOs would seem to have every right to be self-impressed. However, when you hold the top spot, puffing yourself up at the expense of subordinates impedes the organization. You benefit when your people are encouraged and empowered to generate novel ideas. Recognition of these good ideas breeds more ideas.
Not Focusing on Accountability and Execution. Some CEOs and business owners love new ideas, programs, and initiatives. They introduce change for the sake of change. One company we looked at recently had seventeen (17) major strategies for an upcoming year. Focusing on a executing well on a few carefully selected strategies, developing clear objectives, and holding managers accountable, can be the difference to success.
Managing by SummariesA CEO should perceive the world as it truly is; if cluttered and chaotic, so be it. When information is always "high level," predigested by staffers, a CEO may perceive an artificial world, a virtual reality as it were, of cleanly manicured lawns. Most CEOs have great instincts about their businesses, and such instincts should be nourished by raw data, like, for example, call reports of customers.
Don't Fall in Love. When you sit in the corner office, follow your head not your heart. Every business must have a strategic or financial purpose, and if a business happens to make you feel good that's fine as long as your emotional attachment doesn't interfere with your rational decision-making. CEOs are notoriously vulnerable when making acquisitions.
Feeling Invincible.  CEOs must have superb track records-some are almost unblemished -so they have a proclivity to imagine themselves as invulnerable. The natural corollary is a robust confidence, even if subconscious, that past success assures future success. I can't tell you how many dozens of CEOs I've seen who refused to sell their companies at what would turn out to be, in hindsight, their peak market values, simply because they were convinced that tomorrow's prospects would mimic yesterday's triumphs. Looking backward and looking forward, a humble, healthy respect for the subtleties of serendipity is the beginning of wisdom.
Halo Hiring. In some organizations, many of the senior executives look like the CEO. I mean this quite literally and it can be very funny. Not just obvious characteristics like gender and race, but also personal traits like size and stature, political philosophy, sporting interests, demeanor, even style of dress. In a globalized world where customers and suppliers may be very different kinds of people, it is not wise for the executives of a company to be homogeneous, and hence, uniform in their thinking.
Beware of Averages.  Averages can deceive. For example, assume that, in a pharmaceutical company, prices are declining for one-half of the drugs and increasing for the other half; the fact that the average price of all drugs has remained steady is worse than meaningless information. Strategies for drugs that kept prices steady might not work at all with those whose prices were decreasing or increasing. The same is true for net profitability on an individual customer basis. Averages hide meaningful information. The information extremes or "skew" is your friend.

Could you benefit from having a strategic business coach?  Contact me to discuss why having one of our coaches who is an experienced CEO / business owner could help you be a better leader and could make a world of difference in your company's results.  

Monday, May 7, 2018

Attributes of a Lifestyle Business or an Equity Value Business?




[Editor's Note: In the last Issues for Growth, "Which do you have - a Lifestyle Business or an Equity Value Business" we outlined the major differences between a lifestyle business and an equity value business and why it was important to be clear about the "purpose" or intent of your business because the way a business owners  approaches building a business must be very different depending on how you will define success. A number of you who have heard me speak about this issue asked me to publish the matrix of attributes comparing a lifestyle vs equity value business. So, here it is below. I hope you find it helpful.           - DPM]
 


Lifestyle Vs Equity Value Attributes Matrix 
Attribute
Lifestyle
Equity Value
Focus
Short-term Lifestyle; Run for Owner's compensation
Long-term Equity Value; sacrifice short -term comp
Pace
Owner's pace
Dictated by desired outcome
Management style
Command & Control; Centralized
Decentralized; individual decision-making
Owner Management
Can tend to be viewed as inconsistent, capricious and changing
Consistent with overall strategy and core values
Expense Control/ Spending decisions
Tightly controlled at top
Managed through approved dept budgets and policies
Outside Capital
Debt; Investors not interested; Growth may be restricted due to availability of capital
Equity investors
Empowerment
Limited; Loyalty Rewarded; Small circle of trust
Expansive; Performance rewarded; Systems to enhance empowerment
Objectives
May change at owner whim
Clearly outlined; transparent
Employee Equity
No
Yes; equity awarded
Career Development
Limited upside
Significant upside
Employee Capability
"Steady Eddies" Thrive here
High performers thrive here
Sale of Business
Usually only to Employees or Family
To third-party Buyers (Strategic or Financial)