The power of a close knit community

August 6th, 2010

This post has nothing to do with management consulting and yet it does.

I operate in a very close-knit community affectionately called “The County” which is really Prince Edward County in Ontario.

One of the local musicians was recently diagnosed with cancer. The folks here have leapt into action organizing fundraisers for the musician and his family and generally showing tremendous support. Some people don’t even know the man personally but are contributing because of the pleasure he has brought them through his performances.

If you are local and would like more information, please follow this link:

http://www.facebook.com/event.php?eid=146800078670194

I am one of the organizers of the silent auction and would be pleased to hear from you if you would like to donate something to the silent auction.

Karen

And how is being in a close knit community like management consulting? The desire to help others is at the forefront for both!

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Are you red or blue?

August 4th, 2010

A recent book by W. Chan Kim and Renee Mauborgne outlines the concept of a business strategy called The Blue Ocean Strategy. You can find out more at their website – www.blueoceanstrategy.com.

Most companies operate in a red ocean where there is a lot of competition for very little business. If you can make your way into the blue ocean, there are no competitors (or very few) and much greater opportunities for growth and profitability.

Red ocean companies operate in well-established industries where all the rules are set and everyone follows the same long-standing rules. Red ocean managers make incremental changes and modifications and hope for the best because of it instead of exploring transformative opportunities.

Blue ocean companies take advantage of unrecognized opportunities, are usually knowledge-based and complex. They rely on nimble acquisition of new technologies and new capabilities and encourage teamwork, critical thinking and problem solving, and have an ability to communicate a clear vision to the world of how they add value.

So, my question to you is “Are you red or blue?” Please let me know what you think!

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The Baby Boom Exit – What will happen when you are ready to sell your business?

July 25th, 2010

Within the next 5 to 10 years, the largest transfer of private wealth in history will take place as baby boomers prepare to retire. Those who are entrepreneurs will either hand their businesses over to the next generation or attempt to sell it to hopefully willing buyers. However, an overwhelming majority of business owners are caught short and are not able to get full value when they sell.

Whether you make an internal sale to family or staff or an external sale to a third party, either of these courses of action is fraught with pitfalls for those who are not prepared. We all know the basic premise of supply and demand. As baby boomers retire en masse, there will be a glut of businesses available for sale and the values for those businesses will plummet.

In order to retain value in your business if it is to be sold in this timeframe, you must do your homework and prepare the business now for eventual sale. There are as many scenarios for this as there are businesses out there, but key points include building the management team that will stay with the business, ensuring that your intellectual capital is protected and fully documented, and improving profitability now. So, start thinking about the sale or transfer of your business and setting plans in motion to ensure you are in control when it is time to sell.

On the flip side, if you are part of a management team in a business led by a baby boom entrepreneur, why not bring real value to your business owner and raise the subject – especially if you are interested in being asked to take over the business. Maybe you will be able to work out a plan to buy in over the next 10 years so it is more affordable for you.

No matter what side of this transaction you are on, it always pays to be prepared. A formalized exit plans makes it easier for all involved to understand what will happen when and to have time to understand the consequences of the transfer of the business.

I would love to hear from you about how you are approaching this sensitive but inevitable issue.

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Community of thought leadership

July 25th, 2010

As part of my participation in the County business community, I have started a networking group of business people who are willing to share their stories and mentor one another. I have belonged to a similar group in the past and found it to be quite rewarding.

The premise is that in this group of peers, you will be able to discuss your business successes as well as your obstacles in a way that you just can’t with any other group. Do your friends and family “zone out” whenever you start talking about the exciting new event for your business? If so, you need a group you can talk with who understand why you are excited about your business and actually encourage such behavior!
Another plus is that you will have access to the wisdom of the group along the way. Most business people got into business because they like helping others and this is no different.

Since this is such a small community, everyone has to come into the group prepared to follow a few ground rules:
• keep what you learn about other area businesses confidential
• be prepared to share your own stories
• be prepared to mentor others with your wisdom and experience (and you have both, in abundance, trust me!)

The group I was in worked because everyone agreed to these ground rules and because you knew the group would hold you accountable for what you said you were going to do last time.

If you are located in Prince Edward County and are interested in helping me start a second group, please let me know!

Karen@management201consulting.com

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Do you know what your conative talents are?

July 4th, 2010

I hear you saying “conative”? I think she means “cognitive”. No I don’t!

From Wikipedia: Conation is a term that stems from the Latin conatus, meaning any natural tendency, impulse, striving, or directed effort. It is one of three parts of the mind, along with the affective and cognitive. In short, the cognitive part of the brain measures intelligence, the affective deals with emotions and the conative takes those thoughts and feelings to drive how you act on them.

The term conation is no longer widely known—it is in “The 1,000 Most Obscure Words in the English Language,” defined as “the area of one’s active mentality that has to do with desire, volition, and striving”, but a closer look turns up several references to conation as the third faculty of the mind.
Conation is defined by Funk & Wagnalls Standard Comprehensive International Dictionary (1977) as “the aspect of mental process directed by change and including impulse, desire, volition and striving,” and by the Living Webster Encyclopedia Dictionary of the English Language (1980) as “one of the three modes, together with cognition and affection, of mental function; a conscious effort to carry out seemingly volitional acts.” The Encyclopedia of Psychology “Motivation: Philosophical Theories” says, “Some mental states seem capable of triggering action, while others—such as cognitive states—apparently have a more subordinate role [in terms of motivation] … some behavior qualifies as motivated action, but some does not.”

I am certified in interpreting an index called the Kolbe (TM) A index (developed by Kathy Kolbe, www.kolbe.com). This instrument measures conation – how you will be motivated to act when you are striving or problem solving. This tendency is innate and will not change over your lifetime unlike other instruments that measure behaviours or attitudes. I have found the Kolbe (TM) A index to be an extremely valuable tool in assisting clients to understand what they and others around them bring to the table.

The Kolbe (TM) A index uses only 36 questions to arrive at an astoundingly accurate picture of who you really are and how you will act in striving situations. I am always pleased to do KolbeTM interpretations because clients are blown away by the accuracy of the report.

And, in case you were wondering, my conative strengths are that I am superb at streamlining established guidelines for fast-paced projects. I forecast end results by focusing on the big picture and I integrate my efforts into the overall plan. I couldn’t have said it better myself!

If you are interested in having a Kolbe (TM) A index done along with an interpretation of what it means, please contact me.

Karen@management201consulting.com

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What is the true cost of employee turnover?

June 25th, 2010

Opinions differ, but most contain some combination of the cost of hiring – defining the job description, placing the ad, conducting the interviews, negotiating the employment contract, and then, finally, training the lucky individual who has landed in your business.

Here is just one statistic: The average estimated cost of salary, benefits, and time spent on the hiring and training of an employee hired at a $50,000 salary, then let go after three months – $26,175 (Source: Human Resources Systems Group, Ottawa).

In fact, it goes much deeper than that. Employee turnover distracts your other employees because they have to pick up the slack in the period before the new person is hired and trained. And if a long-standing employee leaves, all of the knowledge that was in their head may be gone as well.

So, why not take steps to get the hire right in the first place? If you put a process in place around hiring, you can increase your chances exponentially around getting a candidate who really fits with your organization. These can include a discussion of your company’s culture and values, a profile or two to give an insight into what the candidate will or won’t do in given situations that is not necessarily revealed in their resume, and a process whereby you ask each candidate the same questions and write down their answers. It is also useful to have a second person in the room who can do the writing while you maintain eye contact with the candidate so that nothing is missed. And the second person provides a second opinion so you don’t hire somebody just because you liked them.

While you’re at it, small measures to keep employees engaged can reduce turnover and increase productivity. So, why not implement a few of these measures? Not sure what they might be, try asking your employees – they will be happy to tell you if they believe you are sincere!

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TEOTWAWKI

June 12th, 2010

What’s that? Teotwawki? What are your talking about?

I came across this term in a magazine I was reading. TEOTWAWKI is an acronym for The End Of The World As We Know It. It seems that there is a growing trend to believe that we are all doomed and that we should be stocking up on survival needs in the event of a cataclysmic disaster. There is a whole industry that trades on this fear.

Now, I don’t know about you, but I continue to be optimistic about the future. I think we are on the brink of outstanding breakthroughs in medical and other sciences that will solve many of the problems we currently face. I also think that we are surrounded by many, many creative people who are determined to make the world a better place.

I count myself as one person determined to make a difference through influencing and being a role model for others. This blog is one of the ways I am contributing.

So, what do you think? Doom and gloom? Cheerful optimism? Or somewhere in between? I would love to hear what you think.

Karen@management201consulting.com

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The 80/20 rule

June 11th, 2010

“The man who insists upon seeing with perfect clarity before he decides, never decides anything.” Author unknown.

“Take time to deliberate, but when the time for action arrives, stop thinking and go in.” Andrew Jackson

These two quotes illustrate what I think is a fundamental shortcoming of many business owners – the fear of taking action in case it is the wrong action. I disagree. If you have done your due diligence there is no reason not to take action.

Use the 80/20 rule. If you wait until conditions are perfect, you will never launch that initiative. As long as what you have done to date gets you 80% of the way to your intended goal, just go for it and let the remaining 20% be your next target. And just keep tweaking things until you are as close to perfect as you can get. Continual improvement can be an impressive achievement when you look back at where you were when you started.

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Achieving Focus

June 6th, 2010

An alignment matrix can be a very useful tool for deciding which projects deserve your attention. This is even more critical in tough times than in times of plenty. When you have severely limited resources available (cash or manpower or materials), every action must drive your company towards its stated goals. Before adding tasks to the matrix, screen them first to ensure the following:

Does the action take us closer to where we need to be?
Does it fit with company values?
Can it realistically be accomplished in time and with the budget we have for it?
Do we have proof that there is a demand for this new direction in product or service?
Does it take advantage of strengths already within the organization – e.g. customer service attitudes, technological ability, or innovation?

Once you have decided which items to add to the matrix assign them a score (see example for details). Only the highest scoring items will get priority right now and the rest can wait until more resources are available. The matrix shown gives equal weight to all 4 stated goals. You can add a twist and assign a greater weight to one or more of the goals.

This gives you an idea of how to set up a matrix and what types of information it should contain.

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Tell yourself the truth

June 6th, 2010

Even if you can’t tell others the truth about your situation, it is imperative that you be honest with yourself. If you don’t tell yourself the truth about your revenue figures, for example, you can’t do anything to improve the situation.

If you can tell others the truth, they may be able to help with suggestions of their own. At the very least, they can offer support and a sympathetic ear.

One caution though – don’t be too hard on yourself. Concentrate on progress, not perfection. Before you decide that you have not accomplished anything, look back to where you were a year ago, or even a month ago, and give yourself credit for the progress you have made.

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