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Observation I
Observation II
Robert Rants


Some thoughts on...

Hiring

If you hire people who are smarter, more committed, more enthusiastic, more determined more passionate then you, then your business will always move forward.

If you want your business to die or stagnate, hire people who don't have your smarts, don't have your 'get up and go', don't have your determination or passion.

Education vs. Character

Peoples education and working experience is less important than their character. You can't teach people to show up early, work hard, be honest, go the extra mile when the chips are down...they either have it or they don't.

Show me character before education and experience and you'll have one foot in the door.

Firing & Being Fired

So many people think firing and being fired is the end of the world when in fact it is just change.

Handling change is a skill and requires confidence in yourself and those who support you. Every time our businesses lost an contract or client because of price or personality conflicts I would call that a "firing".  Anyone in business who says they have never been fired is delusional.  Business people fire and get fired all the time.

Get over it - and get good at this - you'll have a lot more fun and a whole lot less fear.

Leader vs Manager

Leadership is not management and management is not leadership. You may not agree with this but there is a distinct difference between you the person with the 30,000 ft vision of the forest growth and the folks cutting the trees for you. Never forget, one does not exists without the other for very long so you need both.

Front End vs Back End

Nothing makes me angrier than the arrogance of front office and its  perception of the back room. It reminds me of the story about the body parts arguing to see who should be boss...if you don't know the story you haven't earned the right to own a business.

Policies & Procedures

Why is it so many big companies forget what they did when they were a small company to help them grow into a big company?  Having owned distribution, engineering and fabrication businesses and been through the ISO 9001 and 14001 certification processes, I understand the benefits of  policies and procedures, but if bureaucracies prevent your staff from doing the small things which count - then break the rules and fix the handbook - because it isn't working for the benefit of your customer. 

This happened to us when given an order for a $20 commodity item.

At the time this event took place I had just gone though ordering a very expensive custom-made sleeping bag from Calgary's Integral Design.

Lets just say that it took longer to get the commodity code into the computer so it could be bought and resold, then it did to make my $900  XPD3-Arctic Series  sleeping bag.

Integral Design understands visitor servicess. They don't advertise but everyone around the world in the hard core climbing community knows who they are and the outstanding services and products they offer.

Ask who are you serving first? If its you and your company before your clients - get it fixed.

Dealing With People Who Eat their Own Cooking

Integral Design and the guys at ZCP Mfg. Inc. have one thing in common. They are one of the few who eat their own cooking. Meaning as enthusiast of their worlds - they design, make and use their own stuff. So many people you will have to deal as a business owner, will try to sell you products and services they themselves have never used. Given a choice - I always did business with people who ate their own cooking.

Share the Pain & Gain

People just want to know what's going on with the company they work for.

If you're the type of person who hides and hordes knowledge you'll find yourself knowing less and less about the world around you - and it will become so evident people will want to know what planet you're from.

Worse, you'll be the last person to know the facts. A bad place to be for those who are supposed to be leading an organization.

As a business owner doing business with other companies, you want to know the pains and gains...a company hiding it's true character is not a company to be doing business with or working for.

Learn to collaborate. 

Last Man Standing

I love this phenomenon - in a company that is spinning out of control the last folks standing are inevitably the least capable of stopping the carnage. Smart capable people will leave an organization or get fired executing their missions  before it dies. Those who don't usually have no options left but to hang in there to the bitter end until they become victims themselves. If your gut tells you the guy doing all the firing and layoffs is a dud and will be the last man around - find another link for your network because the one you're doing business with is dying.

Business Strength

You don't need confidential financial statements to see the strength of a company.

You can always tell which direction a business is going by watching human resources.

If there is wholesale layoffs and firings and no replacements - the writing is on the wall. However, just like professional sports franchises, a well run business will go through cycles and once in a while its necessary for wholesale changes in staff so long as the replacement team is at or a notch up the ladder in character and skills. Some really good folks get axed because they have been invisible...that's tough stuff but in my experience anyone worth their salt has ended up in a better place much to the embarrassment of the their previous employer.

As a business owner, you need to know who you are dealing with - your operation depends on it.

Choosing Clients aka David vs. Goliath

I once faced a decision to choose between clients.  One was a large national wholesaler whose local branch manager threatened to cut us off if we did business with a competitor. The other firm was a small family owned operation.

In Alberta, small business bank loans secured by jointly owned spousal property have to have the spouses release their dowry rights on the title. In other words if the business goes down, the spouse has no claim to their rightful share of the asset. 

I know this because my wife had enough faith in me to sign over her rights so we could obtain a loan to finance our growth, and so did the spouse of the owner operating the small businesses. 

Both my wife and I agreed that if the small business owners wife had enough faith to sign over her rights then we should do business together because together we had more to lose and fight for than the bullying branch manager who had nothing to lose. 

Eventually the owner and his right hand man became influential in the industry and a local powerhouse. The branch manager like all the bullies before and after him left the business.

Lesson learned - never do business with a bully and when you're a David in a world of Goliaths, build yourself a stable of small business owners to deal with - these folks are literally fighting for lives each day and they appreciate your concern and support.

Coming Up:

Supporting your inside contacts even if their bosses don't recognize their strengths.

The importance of knowing in the beginning what business you are in.

 

The Business Plan
Copyright (c) 2007, Robert Bean

Dear New Business Owner,

Re: The Rest of Your Life

Just wanted to forward these words about your adventure.

You’ve already told me you are a business person who wants to lead a contracting/manufacturing/sales/service organization. Good start! That puts you ahead of those competitors who find they soon become employees of their own operation.

So lets begin, engineering a business plan is no different from engineering a HVAC system…one delivers comfort the other profits. Both have to work!

The way the domino’s fall in a business planning process is as follows:

The businessperson (YOU) has to first decide to be proactive and control the evolution of the business or be reactive and let the business take control.

There is not much I can do to facilitate the reactive process…but the proactive process begins something like this:

1) Purpose

a) Business owner soul searches for a way to communicate a single defining purpose of his/her business to staff, customers, business partners, industry, etc…

b) This is very critical, as it is the “root” for your existence. Can often take days or a few weeks to reduce your thoughts and ideas into a single simple sentence.

c) As the leader, you must have a solid understanding of the business’ purpose because followers need to know that you know why it is, you get up every morning and come to work!

d) Keep this mind:

i) If the leader gets up every morning because he/she needs money to pay for his/her boat/condo/jewelry/race horses (whatever) and everyone knows it - it invokes a different culture than one where the leader come to work every morning to change the world and make a difference in their life and others.

ii) The difference is the followers could care a less about the things, which do not benefit them…, but they can and will contribute to changing the world if there is a reasonable reward.

iii) Last, if you’re doing it for the money – stop. Money comes from doing everything else right. If you can’t get beyond the money part – you’ll wreck havoc in others and your life and those of your employee’s.

2) Visions

a) Business leaders should imagine a business as a puzzle, which evolves over time. Some people think vision is a single statement but I say you must have a vision for every piece of your business.

b) This requires discernment and perception; intelligent global macro foresight to see what is and what should be.

c) It is important to have an idea what the parts should look like because the leader needs to communicate this to the team with enthusiasm and passion.

d) Your ability to get people fired up and committed to bring these pieces to fruition is directly related to how clear you can see the pieces in your minds eye and how your followers feel about your commitment to help them help you.

e) The pieces are unique but as they are fitted together, the picture is unveiled.

f) The evolution of the pieces should be pictured in one, three, and five year increments.

g) Pieces of the puzzle in priority include:

i) Research and Development

ii) Engineering

iii) Operations

iv) Production

v) Public Relations

vi) Marketing

vii) Sales

h) Keep this mind

i) A business with good leadership finds the top dog playing servant to the followers because the followers have such a clear understanding of what you want and will do anything to make it happen they will ride your tail to make sure you get them what they need to succeed.

ii) If you always have to prod, bribe, threaten, or generally intimidate people to achieve what you want, you have not communicated what you want to see and / or have hired the wrong people and/or you have the wrong personality for the circumstances in which case - fire yourself and hire the right person to lead. Seriously! This is important.

iii) I can tell when a business has lost its’ vision by the stagnation in all or parts of its’ business. A business, which continually grows its’ profits without increasing sales, has either found a way for incremental improvements in efficiency with diminishing returns and / or is constantly reducing its costs. This strategy, in the absence of revenue increases, can eventually leave an operation with a bank account but no business.

iv) Without having financial statements to analyze, the next best ‘public’ observation is in human resources. Is the company hiring, stagnating or into layoffs without replacing staff.

v) Remember the old adage, when a company hires talent with lower IQ’s, less passion and no skills, in comparison to existing leadership, and management, the business is destined to eternal mediocrity.

vi) Your vision for the type and quality of people you intend on spending a good portion of your life with is the most important part of your plan - next to execution.

3) Execution

a) Business owner decides to take full responsibility, or hires someone specifically, to execute the business plan.

b) THIS IS & ALWAYS WILL BE - THE DECIDING FACTOR TO YOUR SUCCESS! Even if you have nothing else – just getting things done will deliver some success.

c) A good review of your personality profile can provide a good indication of whether you are the right person for this job.

d) A few questions….

i) Are you organized?

ii) Do you constantly meet or beat deadlines?

iii) Are you systematic in your activities?

iv) Are you flexible? Firm? Can make the hard decisions?

v) Do you have a “do whatever it takes” attitude?

vi) Are you creative problem solver?

vii) Are you driven?

viii) Do you get more things done in a day than the average person does?

ix) Do others consider you reliable?

x) Are you confident - almost to the point but not quite a narcissist?

xi) Do you move towards rewards or away from punishment? Both?

xii) Do you know when to get out of the way?

e) It’s during this part of the planning process where the identities between leadership and management are established.

i) Leadership knows what needs to happen – working on the business.

(1) Imagery (2) What if’s (3) Gut feelings (4) Analytical (5) Inquisitive (6) Looks at the forest

ii) Management knows how to make it happen – working in the business.

(1) Policies (2) Procedures (3) Implementation (4) Track Results (5) Feedback mechanics for leadership (6) Looks at the individual trees.

f) Keep this mind

i) When leadership is caught up managing - stagnation in the business occurs because rather than establishing direction and keeping an eye on the horizon – creating new stuff – solving problems with new ideas - the leader gets sucked up in the day to day vortex. In start-ups you have to be all things so the trick is knowing when to get out of managing your business and begin leading…letting go will be the hardest and best thing you can do provided you hire the right people.

ii) Hire the right people (smarter and more enthusiastic than you ), communicate the opportunity, give them your vision, support their needs to make it happen then get the heck out of the way.

4) Goals

a) Business owner works with his/her team to establish goals – (VISIONS with DEADLINES).

b) These objectives must have a time line and it’s important to involve your team with setting the deadline as it’s a key methods in having them take ownership of its success.

i) Example: By August 30th, 200X, ABC INC. will have product line x developed, complete with supporting documentation and approvals.

ii) Example: By October 31st, 200X, ABC INC. will have developed and approved a budget to display product x at the y show.

iii) Example: By January 28th, 200X, ABC INC. will have sample test sites operating and have had a, b, c magazines on site for a demonstration of the new technology.

c) Again a goal must have a deadline preferably with some pain or gain attached to it.

d) Regularly failing to meet deadlines is suicide. Fire yourself or the person responsible and get someone who excels at this vital activity.

e) Keep this in mind

i) Would you rather have renters or owners taking care of your most important assets?

ii) Renters are like campers…just there for the least amount of effort. For critical stuff hire climbers and owners – they understand effort, living lean and life and death circumstances.

iii) Rewards for reaching goals has to be congruent and supportive with the objective. Example if you establish a sales target for a sales organization and then restrict their reward at a certain benchmark you may reach the benchmark but there is no incentive to do anything more. This is applies to everything and everyone up/down and sideways in the business.

5) Missions

a) Business owner works with his/her team to establish the missions needed to fulfill the goals.

b) These are specific activities, assignments, or objectives you and your team will accomplish to reach your goals.

c) Sometimes you will be part of the mission as a leader, other time you may be a follower.

d) Each of the parts of the business will have its own missions to accomplish.

i) Example: Marketing would have a mission to identify the specific customer targets for your product/service ideas.

ii) Example: R & D would have a mission to develop the specific widget for opportunity targeted by marketing

6) Strategies

a) Business owner works with his/her team to establish the specific strategies required to accomplish the mission.

b) Strategies can be viewed as the planning, directing or approaches to completing the mission.

c) It is an evaluation of the mission details and sequences.

i) Example: Marketing would review current sources of problems and solutions provided by competitors or better yet identify a problem(s), which there is no current solution.

ii) Example: R & D would assemble a team from marketing, engineering, operations, sales or hire a specialist to work with them on developing the widget framework such as the industrial design, features, and benefits etc...

7) Tactics

a) Business owner works with his/her team to establish the specific tactics required to support the strategies used in a particular mission.

b) In the early days of the business, the owner is often part of the tactical team as its mission leader.

c) As the business evolves the business leader becomes more selective on what tactical teams to participate.

d) Tactics are the actual implementation, the technique of deploying and directing, or the engaging of your resources and assets.

i) Example: R & D identifies and engages the procurement of parts and services to develop the prototype and assembles the components via some method to meet the objective.

ii) Example: Operations creates a simple, systematic process for tendering, reviewing, and procuring services and parts to build the widget.

e) The speed at which a complete plan is developed is directly related to your commitment to make it happen. It could take as little as a week to pull out all the ideas, details and put it all in a written format.

8) I would also suggest you seriously consider hiring an industrial psychologist to evaluate you and your key team member’s personality profiles. This would take less than a day and would give you a huge insight on how your team will interact with each other, your customers and how they will respond to specific events. It may sound strange to have a shrink do a profile on the team but it will become one of your best investments. Even going through the profile exercise gives you an insight on how and what personality traits to look for as you add people to your team.

9) Once you have this stuff corralled with clarity, it is time for a visit to your accountant to analyze the financials, forecast the costs, revenues, cash flow and profits. At the same time your lawyer should provide a legal strategy (estimate of time and fees) to deal with patents, title and name searches etc. and together with your accountant make recommendations for insurance on your assets, liabilities, partnership, etc..

10) Once you have your business plan, team profile, and asset/liability base covered you should be able to approach any banker or venture capitalist for funding or at the very least - if your financial angel already has given or is considering funding your operation, - he/she will have greater security knowing you at least know there is more to ponder than just creating products and services.

Sincerely,

Robert Bean, R.E.T.
Your Biggest Big Fan and Supporter


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