Sunday, October 25, 2015

Sharing Information Is Critical To Corporate Success - Dealing With Information Hoarders

Sometimes in business, we encounter Managers that are control freaks and information hoarders.  I am not talking about sensitive personnel information, or other information that cannot be shared for privacy, or other good business reasons.   I am talking about information that is necessary to team work and the ability for others to do their jobs.   When this is encountered, the Manager involved must be counseled because information hoarding is a source of organizational stress.  In addition, when discovered and it will be discovered, information hoarding creates distrust among other Managers, since for better or worse,  an ulterior motive will be assumed. 

Clearly, mutual respect and open communications are absolutely critical for an organization to grow and perform optimally.  Managers that hoard information usually have a problem with delegating responsibilities as well, which is very counter productive.  Work, or tasks should always be delegated to the lowest level employee possible to achieve maximum productivity.  Higher level employees that can't delegate, using training to replicate their capabilities, usually fail at management.

When senior management sees Information Hoarding happening, which is counter productive to the organization, senior management must step in to open communications.  This may require a formal process to force interaction; but short of terminating the Information Hoarder, who may otherwise be a good performer, what other alternative is there. 

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Wednesday, October 21, 2015

See The Train Coming Before It Runs You Over

Very often in business, it is easier to do nothing than to deal with issues causing problems, which may require confronting other managers, whether internally, or externally.   That is really faulty thinking because ignoring an on coming train is a sure way to get run over by the train.  When that happens, it then becomes necessary to raise a bloodied hand in an attempt to solve the problem in a reactive mode, rather than a proactive mode.   By that point, trying to solve a problem in reaction to it, is that much more difficult because of the emotions that often come into play. 

It is much better to be proactive to address issues, or problems before they are evident and that includes process improvements that may be needed to improve service, or products.  Sometimes these things occur because of some change in the law, or other circumstance that makes business as usual problematic.  There is no point in waiting for the particular situation to occur before addressing the issue.  Instead, the best time to address the issue is before it becomes a service problem.

This means having a big picture orientation and understanding of how all the pieces of a puzzle fit together so that when something changes, the disconnect becomes obvious.  As soon as that happens, bring people together, that are important to decision making, to address the issue and change course, even if it means forcing the discussion.  It is critical that this be done to avoid internal frustration and organizational stress.  Successful managers are proactive, rather than reactive.       

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Tuesday, October 20, 2015

Managing Business Partnerships To Close New Business

From time to time, company's are asked to partner with other organizations to sign new business.  This can be mutually beneficial as long as everyone understands the rules and ego's don't get in the way.   First, both companies must recognize that the potential client is driving the discussion.  It is pretty easy to determine the basis of the deal by just reviewing the Request for Proposal.  It really does not matter who owns the business relationship, provided the long standing relationship does not get in the way of signing the new business.  In other words, in every deal, there is a dog and there is a tail.  The tail can never be allowed to wag the dog, even if the tail has the business relationship with the client. 

We have certainly learned this lesson the hard way.   In one instance, we dealt with a business partner with a very arrogant, obnoxious, rude sales guy, who was the Account Manager for the particular client.  As such, he wanted to control all aspects of the bid process, even though he was ill prepared to do so and the client was not bidding his services.   That was not only evident in the RFP; but became particularly obvious during the Best and Final Presentation when the client contact made it clear that this bid was all about our services, rather than the services provided by his company with the existing relationship.  As such, the BAFO Presentation, controlled by Mr. Obnoxious, missed the mark.  Though we tried to quickly recover during the BAFO, by switching gears, it must be assumed that the prospect surmised that we did not respond to their needs, since we were not selected to provide our services.  Though Mr. Obnoxious protected his commission and his company's business interests, the deal for our services went to one of our competitors.  Given our investment of time and resources, never again, never again will we allow another company's salesman to control our company's fate.   

This was a lesson well learned by all concerned.  First of all, don't partner with an arrogant, obnoxious, rude sales guy because doing so rarely ends in a positive result.  In this case, we could see these behaviors right from the beginning of this process.  And second, though this should be obvious and pretty simple, just listen to the prospect/client and respond to the Request For Proposal.  No doubt, we may find our company someday being the tail, with the existing business relationship.   Hopefully, we will be smart enough to collect a booking commission, or referral fee of some kind for referring the business to another company, when the client is asking for the dog.  In doing so, the best thing we can do is to make the introduction and endorsement, be present at meetings and just get out of the way and let our business partner close the deal.  This is another one of those lessons in business learned the hard way.   

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Monday, October 5, 2015

No Fear Allowed - An American Dream Story and Book

Perseverance is NOT just a word. It is a belief system, a way of life fortified by the battle cry of No FEAR ALLOWED. That is what Entrepreneur Laura Herring has that enabled her to grow her company from just an idea to a $50 Million organization.

Herring's book, NO FEAR ALLOWED, A STORY OF GUTS, PERSEVERANCE & MAKING AN IMPACT, comes out TODAY, Oct 6th. This is a book worth buying as it tells an amazing story of the American Dream of starting a company with nothing more than an idea to help others. Laura Herring turned her idea into a global company serving over 250 Fortune 500 companies.

Laura was a psychologist and just wanted to help relocating families have a smooth transition. But her journey took her far beyond and is a great read for anyone wanting to fulfill their dreams-any dream! The secret to her success is her unfailing passion to make a difference and her unrelenting perseverance to keep going. Herring openly shares her failures that would have stopped most people in their tracks. Laura Herring failed numerous times and does not hesitate, nor apologize for those failures. Instead, she shares with her readers the lessons learned at the end of each chapter, in hopes of preventing others from making the same mistakes.

At first glance, most people would think this book is just for entrepreneurs. However, several people have said they loved the story so much and kept rooting for Herring's success, that they are buying copies for each of their children and their nieces and nephews because they want to show what persistence truly looks like. Those buying this book want to help future generations understand that success is possible, in spite of numerous failures.
This Blogger can recommend this book as a perfect case study for budding entrepreneurs in entrepreneurial studies at colleges and universities. Others say, it is just a good read, filled with stories that will have you cheering for Laura Herring's success.

Laura Herring is fearless. In this book she teaches others how not to just be fearless, but how to find their passion and make NO FEAR ALLOWED their battle cry. She teaches how to turn fear into your personal GPS that allows you to : STOP, EVALUATE, CALCULATE AND THEN ACTIVATE A PLAN to move forward.

Laura Herring's journey is a great lesson in American business and how anyone can make it, even after failing numerous times. You just need guts and perseverance. This is an important lesson for today's young people. With heavily financed start ups and fancy mezzanine financing, this book shows how, if your goal isn't about making money fast, but serving others, you can patiently make your way to financial success.

You can go to Nofearallowed.comtoday and order your copies. Herring is offering special bonuses, if the book is purchased on October 6 for ordering from her site. Most important, Laura Herring is donating 100% of her profits from the sale of her book to Breast Cancer Research. A two time breast cancer survivor, Herring is tenacious about finding a cure for Breast Cancer to prevent this disease from impacting other families.

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Thursday, October 1, 2015

Free Market Capitalism & The Profit Motive

Free Market Capitalism is under attack.  Of course, those that promote Socialism and Communism have always hated Free Market Capitalism because they believe in government control and redistribution of wealth, rather than individual control of wealth.  The only problem is that wherever these ideologies have been practiced in world history, Socialism and Communism have resulted in poverty, misery and in same cases even murder.  The reality is that Free Market Capitalism, with all its warts and boom and bust cycles, has created more wealth for more people than any other economic system in the world. In addition, Free Market Capitalism has done more to eliminate poverty than all the government programs that have ever been conceived.

Today, we hear about income inequality with the assumption that the poor are poor because the rich are rich.  Nothing could be further from the truth.  The poor are poor because they very often lack fortitude, job skills and education.  And, many of the poor live in dysfunctional families, impacted by substance abuse that makes getting out of poverty even harder.    The best thing that can happen for the poor is economic development that comes from lower taxes and less regulations to create jobs.  There is no poverty program better than a job.

We hear people attack the Profit Motive as though making money is bad.  The fact is that without Profit, there are no government tax revenues,  or money to invest in new businesses.  Pre-Tax Profit is the difference between Revenue and Expenses.  In most cases, employee compensation and benefits make up 70% or more of a company's expense line.   So of the revenues generated for a product, or service, 70% is often going to pay employees. Companies are very lucky if they have a 5 - 15% Pre-Tax Profit, which then is taxed by state and federal governments.  What is left can be used to make additional investments to create jobs and or to pay dividends to shareholders, the owners of a company. 

Finally, successful people today are often under attack being referred to as selfish or even greedy, which is ridiculous.  Successful people, particularly if they are self made, work very hard for years and often make incredible sacrifices to achieve success and presumably wealth.  This CEO knows many wealthy people that support the arts and numerous charities; not to mention being the job creators in our country.  No one ever got a job from a poor person.  I don't know any of these "selfish and greedy" rich people that are often vilified by those that hate Free Market Capitalism and the Profit Motive.  All the rich people I know give back to the communities they live in and way beyond. 

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Sunday, February 22, 2015

Establishing a Company's Annual Budget

Well run companies are focused on managing to an Annual Budget.  This CEO Blogger has always been rather conservative when establishing our Annual Budget.  I don't believe in spending money we don't have, borrowing extensively to fund the company, or pie in the sky budgeting.  That means we budget based on business we know we have; not business, or assumptions, that might never materialize.  We budget based on the desired Pre-Tax Profit we would like to earn.  In some cases, that could mean Rightsizing the Company, which is just another term for potential lay-off's when necessary.  Since generally in service companies, people represent 65 - 70% of overhead, it is the first place we must look when budgeting to determine our expense line. 

Marketing expenses, not to be confused with Marketing staffing, are completely discretionary so they are another place to look to find savings if and when necessary.  Finally, occupancy cost make up a good percentage of overhead.   An aspect of Rightsizing also involves getting rid of excess space that is no longer needed and as quickly as possible to impact the budget year. 

For our company, the budget process actually starts no later than September of each year for the next year as we anticipate what we will face in the new year.   If we have to make cuts to expenses, they often start in the fall of the preceding year so that we get the full impact of those cuts in the new year.   Sometimes the budgeting process is used to change the company's direction.  Establishing a budget each year is critical to running any business.  Cards talk and numbers don't lie.   The Annual Budget usually tells the company story in real terms.  

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Friday, February 13, 2015

Performance Reviews - Talent Management By Another Name

Most well run companies use annual Performance Reviews to judge and rate employee performance related to specific objectives for the job.   Ratings, or scores, are often used to determine a merit increase percentage and or bonus potential.  Performance Reviews should also be used to identify areas for improvement.  These discussions, if done properly, are really Talent Management, by another name.  This CEO Blogger has been managing people, in one capacity or another, for more than 40 years.  I have worked through all the Human Resource jargon, with the latest being "Talent Management" to basically do the same thing. 

A manager, who has direct reports, has as a primary function, the role of helping people grow and develop.  Constructive criticism, within an annual Performance Review, is a good thing.  In fact, employees interested in promotional opportunities should ask for it.  Every employee, even "A" players, can improve their performance and contribution to the company.  In providing suggestions for improvement, the manager does the employee a great service. 

Performance Reviews should be taken very seriously.  They are not just about determining the merit increase percentage, or bonus potential.  Performance Reviews should be used as an integral aspect of Talent Management in building a bench within the company.   That bench is the basis for Succession Planning as people retire, or otherwise leave the company.  Performance Reviews should be used to identify and promote long term employee growth and development.  The time spent on Performance Reviews, which can be considerable, is time well spent.          

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