The Value of Mentoring Youth

[Editor’s Note: As we enter the season of giving, I thought it might be appropriate to share an article about giving back. I have been concerned about the lack of role models and adult guidance for many of our youth and it has been demonstrated that youth who have a formal mentoring relationship do better in school, stay in school, have lower incidence of substance abuse, and lower incidence of crime, not to mention an overall better future. As I began to investigate the statistics about the value of mentoring, I found that the results are compelling. Mentoring benefits not only the individual and the community, but also employees and businesses.

Most successful people know the value of mentors – I know I have been fortunate to have had several key mentors over the course of my life and career.

One of the things my mother used to say: “If something concerns you, stop whining about it and do something to make it better.” Years ago, I was a Big Brother for several years and it was very rewarding. I wanted to have a bigger impact. So, I joined the Board of Mentor Colorado (Colorado Mentoring Partnership). In Colorado almost 300,000 young people do not have a formal mentoring relationship. Mentor Colorado (Colorado Mentoring Partnership) is the support organization for the 60+ mentoring organizations to help them in scaling their activities with adoption of best practices in recruiting, training, and supporting mentoring relationships. There are mentoring partnerships in 26 states. Mentor Colorado is one of the most recent states to form an organization. The models Colorado is following are the organizations in Minnesota, Massachusetts, New York, and Pennsylvania which have dramatically increased the number of quality mentoring relationships. – dpm]

In 2015, The National Mentoring Partnership and Ernst and Young sponsored a 2015 report Mentoring at the crossroads of education, business and community about the value of mentoring to the individuals, the community, and to businesses. As the report states it, “Mentoring is changing the trajectory of thousands of young people’s lives.” 

Value to the individual and community.  Some of the benefits to the individual and the community include:

• Better school performance.  Improved attendance,  higher graduation rates, and more likely to go on to college

• Less Substance Abuse. Mentored youth are less likely to start using illegal drugs and alcohol.

• Lower Crime rate. Fewer disciplinary problems and lower incidence of criminal behavior

• Better jobs and much less likely to be dependent on entitlement programs

Value to companies.  Key reasons companies engage in youth mentoring:

• Fostering employee engagement, satisfaction and retention. Today’s employees are strongly attracted to companies that are purpose-driven and that offer opportunities for engagement.

• Cultivating and developing their future workforce. Prepare a more productive workforce

• Supporting vibrant communities (which include viable customers) 

• Branding
• Improve its image in the community
• Increase community awareness of its mission

Mentor Colorado can help your company get started.

Many organizations have a fragmented approach to not-for-profit activities. Other companies may not know how to get started. Mentor Colorado is helping sponsoring companies with the development of mentoring programs, training, and managing mentoring activities.

Become a Founding Sponsor and make a lasting difference.

To get involved:  

If you would like more information about how you and your organization can get involved (and make a positive difference), please contact Dave Mead or Executive Director, Brad Strong.

 

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 BHOG (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 Others. CEOs 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 Summaries.  A 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 homogenous, 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.

¹Excerpted from 12 CEO Diseases and How to Treat Them, Dr. Robert Lawrence Kuhn, CEO Magazine, October/November. 

Why demographics may drive business owners to sell: Re-evaluating your transition and exit

[Editor's comment: Many business owners and CEOs have been delaying the process of preparing to sell... thinking that it is some point off in the distant future.  It has occurred to me that perhaps the actual best time to sell might be a lot closer than they think and may be more dependent on demographics than economics.  - DPM]

Have the markets for transitioning your business fundamentally changed? In the early 2000's there was a robust market for selling businesses.  The economy was strong, the market was flush with private equity, and the opportunities to grow businesses seemed endless. Then came the great recession of 2008 - 2012.  Was this recession a blip? Will we be soon returning to robust economic times over the next few years? Many will be hopeful leading up to the 2016 presidential election cycle. Regardless of your political leaning, there may be forces at work that neither candidate could overcome.

Demographics have a profound impact on business cycles. Twenty years ago, I attended a conference with the keynote address given by noted demographer, Harry Dent, who forecast several major economic cycles over the past several decades including the early 1980's and the current recession starting in late 2007. Dent's basic premise is that business cycles and opportunities are driven by demographic-based economics. Since 70% of the economy depends on consumer spending, he reasons, tracking consumer spending volume is a key driver. Spending habits, life decisions, etc. are driven by significant demographic changes. If you follow the bulge of baby boomers through the lifecycle, the last of the baby boomers reached age 50 in 2015 - a time in life that starts a decline in overall family spending.

See the graph below which shows peak U.S. family spending. While it shows a slight spike, coincidentally in the 2016 election year, Dent shows that the next decade will decline, bottoming in 2023.

Demographic spending patterns may indicate 8-10 more years of decline. Whether or not you believe Harry Dent's many other conclusions, it is interesting to note that in recent years economists have become focused on economic trends caused by demographic extremes. Declining birth rates and aging populations in Europe and Japan foretell long-term economic decline. Issues with a dramatic imbalance of males and females in China due to the 1-child rule (mostly male) are causing predictions of a serious aging population within the next 20-30 years, etc. The truth is, politics and policy aside, that the next decade could continue to be one of decline in the U.S. until the spending impact of the echo baby boomer generation (2024 -2050) takes effect.

Baby Boomer Business Transition Bubble.  The number of baby-boomers who own businesses who are at (or approaching) retirement age who need to sell to provide liquidity for retirement is at an all-time high. Consider this - in 2001 the number of business owners with businesses between 5 and 500 employees that needed to sell was 50,000. That number reached 350,000 by 2006 and 750,000 by 2008-10. There were relatively few sales in 2008-2012. Today, with that four year pent up supply of sellers, the number is estimated to be between 1.2 to 1.5 million.

What does all that mean to you, as a business owner? If you are in your forties or early fifties with many work years ahead of you, your business is performing well, and are in an industry with strong growth, you should focus on strategies that will help you continue to grow and expand. However,  if there is little growth in your industry, or if your industry depends on robust overall economic growth, perhaps now is the time to prepare to exit.  In these situations, it is possible that the value of your business may not be higher in 5-10 years - it may actually deteriorate.

If a business owner is in his/her mid-fifties to mid-sixties and the business has strong EBITDA over the past 12 months, consider planning to exit as soon as your company can be prepared. As we have outlined in other articles, it may take 12 -30 months to prepare and execute a sales transaction. Investment bankers, report that companies in this situation are commanding valuation multiples at near-record levels and are in high demand. So you could take some chips of the table.

Knowing when to harvest your business may be your most important decision  

If you would like to have a no-obligation conversation about building value in your business and evaluating the optimal path and timetable for a successful transition and/ or exit, please contact us at Mead Consulting Group. Our senior consultants have been involved with helping dozens of business owners maximize value as well as having the experience of previously navigating their own businesses through successful exits.  www.meadconsultinggroup.com