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Sunday, 30 March 2014

How Much Do You Use Research in Your Business? It Could Change Your Whole Approach!

My good friend and former Vistage member, David Caton Roberts, recently posted a flow chart which had a great deal of resonance for me.

It said: 

·       Data--information--knowledge--understanding--wisdom. 

I would ask some initial questions and those are; what is the purpose of the search?  why do we need to know more about something?  what do we propose to do with the results when they have been established and verified? 

It reminded me of Herb Meyer, a brilliant Vistage speaker who had been in a very senior position in the CIA, who made the point very succinctly that the fist necessity is to gather as much data as possible and frankly, that is relatively simple in these days of highly effective online search facilities. 

It may well be a different matter for the CIA, NSA, MI5 and 6, GCHQ and so on where the data gathering exercise is way out of our normal reach, but for the ordinary mortal wishing to know more about salient factors in business, then it is a simple task. 

However, what we finish up with is a vast amount of uncoordinated data through which we need to trawl to establish the really important aspects of our requirement. 

That is the analytical phase of the exercise and is probably the most complex and important factor.  Unless we are able to cut through the dross (and there will be plenty), drill down and determine what is truly relevant then the whole project will founder. 

Again, each phase of the research needs to be rigorously tested against the initial questions; are we fulfilling the purpose, are we gaining from the work and will we be able to take action as a consequence of it? 

That is a significant question and one which does not appear on the original flow chart.  One must assume that the purpose of research of this nature in business is to take action on as low a risk profile as possible.   

The key is to take action and it is essential to decide at some point in the research process whether there is sufficient valid information available to mitigate the risk and to enable action to be taken. 

Having reduced the mass of data to a manageable size which can now be defined as information, the next step is to reduce it further as Heb Meyer says to intelligence and that is in the security sense. 

David Roberts’ chart calls it knowledge and in the halls of academia through which he now prowls that is a perfectly acceptable definition.  However in the business world when decisions need to be made and actioned it is better, I would suggest, to consider this phase as intelligence which permits action to be taken. 

In the true learning experience this would lead to understanding and when properly validated and used leads on to wisdom, a consummation devoutly to be desired in that environment. 

That is not to say that business leaders do not gain wisdom; rather for them it comes through the accumulated experience of success and the occasional failure and that can be a hard school. 

The ancient Jewish mysticism of Kabbalah defines the whole process as intuition leading to understanding which leads to knowledge and hence wisdom.  Perhaps we need a few more business leaders who understand the process and put it into action.  It really does work.


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Sunday, 23 March 2014

Are Your Good People Being Poached? You Need to Make Them Want to Stay!

An excellent and entertaining presentation at my Vistage CEO group this week from Adrian Furnham, Professor of Psychology at University College, London whose topic was Assessing People at Work led me to look more closely at the topic of good employee retention especially in an environment where the economy is growing and good people are hard to find. 

It has been said that an unsuccessful appointment costs, by rule of thumb, double the salary of the appointee and I would think that this can be on the low side. 

When we consider all the factors which apply such as management time, disruption, reduction in performance, the need for training of the new incumbent and much more, then the cost can be horrendous especially at a senior level in the business. 

The fact is that the whole recruitment subject is full of traps and side issues none of which really contribute to the success of the appointment and the conventional interview is probably the least effective. 

It usually consists of the two parties telling lies to each other in the vain hope that neither will be found out.  Add to that the elegantly and usually inaccurately crafted CV in reply to an advertisement which has little or no relevance to reality and you can see how successful the appointment is likely to be. 

Kenneth and Will Hopper in their grate book, The Puritan Gift, suggest strongly that promotion from inside the business is usually far more effective than parachuting someone into the business from outside with all the consequent potential issues. 

These can include lack of domain knowledge about the business, lack of existing relationships in the business and, worst of all, some hidden baggage which wasn’t made apparent at the interview. 

We all know that some people are exceptionally able interviewees and subsequently poor employees which is not normally the desired outcome. 

Oddly the downturn in the economy over the past few years has thrown up a scheme which can go a long way to mitigating this problem and it is that of the appointment of interns.  Add to that the growth or in fact the rebirth of apprenticeship schemes and many recruitment problems dissipate. 

I started my business career as an engineering apprentice in the aircraft industry at the princely sum of £1.2s.6d a week (£1.125p) although that was increased within three months to £1.5s so I must have been doing something right. 

It was an excellent scheme starting with six months of formal training in the apprentice school and then experience in most significant departments of the business for the next four years finishing with a period in the department of choice for the future. In addition we were expected to expand our learning by day release throughout the five years.

The success of the system is demonstrated by the fact that a majority of the apprentices reached high positions in technical, commercial and management roles.  Indeed I can’t recall may people at all joining the company from outside. 

Trialling the on-the-job abilities of potential employees is by far the best way forward and both the intern who is generally unpaid apart from expenses, and the apprentice, which is a paid position, give the employer time to get to know the abilities and the drive to succeed in each case. 

Ideally management should instigate a regular examination of the talent in the business and given some courage on the part of the leadership, promotion of the really competent people irrespective of their current role and the grade of the new appointment. 

There is always hidden talent in a business. Take time to seek it out, cherish it, develop it, and promote it so that the dance of death at the interview can be a thing of the past.
 
 
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Sunday, 16 March 2014

Are You Running One of the 3 Million UK Family Firms? Is It a Blessing or a Curse?

There has been a flurry of activity and discussion of late on the networking media about family businesses; are they a blessing or a curse?  There is no doubt that they form a vital part of the economy as is shown by The Institute for Family Business (UK) as follows:Family firms account for two in three private sector enterprises in the UK economy - 3 million firms.
  • Family firms provide jobs to 9.2 million people - two jobs in five in the private sector
  • Family firms make a very large contribution to the UK economy with a £1.1 trillion turnover, almost a quarter of GDP
  • Family firms make up nearly half of all Mid-Sized Businesses (£20m - £500m turnover) in the UK.
 (Source: The UK Family Business Sector, Oxford Economics, November 2011)

Over the years chairing Vistage peer groups I have had several members who would describe themselves as running a family business but it is enlightening to note how very different are the ways in which they operate and how very different are the issues in each case. 

Examination of a few of them might demonstrate the wide range of blessings and curses which they experience on a daily basis. 

Case 1:   The business, a retailer with a manufacturing arm, is now being run by two brothers, the third generation of the family.  Father has retired and has set up a trust for the shares to avoid arguments and to cover against possible marital break-ups. 

He still likes to come in a wander round.  Naturally he comments from time to time on what is going on and people tend to take these comments as directions.  This irritates the brothers because they see it as interference which, in truth, it isn’t. 

Case 2:  A large retail business wholly owned by the CEO who bought the business via a management buy-out and subsequently has built it into a very successful and well regarded retailer. 

He has brought his two sons into the business and has constructed an executive board on which they both sit.  They are very competent and fit well into the whole ethos of the company.  However, the business is still wholly owned by the father and unless some note is taken of how the shares are to be allocated at a later stage, there could well be problems. 

Case 3:  Father, now no longer with us, bought this chemical business and ran it successfully until he decided to let two of his three sons take over.  He decided that the middle son should be Managing Director which immediately caused friction and then compounded the problem by giving each of the sons a one-third share in the business. 

It has taken many years to sort this out and eventually the MD is buying out his brothers. 

These cases are all very different but they all exhibit a remarkable ability to cause problems for those who are now tasked with running the business. 

If a family is dysfunctional (and it does happen from time to time) and then bring a dose of dysfunctionality into the business, how can it be expected to operate effectively? 

It is sensible to say that family issues must be left at the office door but that is easier said than done.  A recent series of programmes about family businesses on BBC TV illustrated the traumas which can engulf families when business issues clash with the varying personal demands of the family. 

All of this is not to say don’t bring the family into the business.  However the Family Business Institute (USA) quotes statistics for succession planning as follows: 

“88% of current family business owners believe the same family or families will control their business in five years, but succession statistics undermine this belief. Only about 30% of family and businesses survive into the second generation, 12% are still viable into the third generation, and only about 3% of all family businesses operate into the fourth generation or beyond”
 
These figures are startling and need to be very carefully considered in succession planning.  Every single instance will be different from the others and in the end if it is the right thing to do, then do it. 

The acid test is: what will the atmosphere be like at Christmas Day lunch next year?
 
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Sunday, 9 March 2014

Planning For Growth in Your Business? First You Must Grow Your People!

A recently appointed CEO of a large professional practice said when asked about the growth potential of the business: 

“About 5% this year, 6% next year and possibly 8% the year after” 

Hardly a ringing call to arms to engender a bout of enthusiastic energy among the troops.  How can anyone get excited about the future with a forecast like that? 

The fact is that we have just come through the worst recession in living memory and this one will certainly stick in the mind for a long time.  However the “this too will pass” syndrome usually works and apparently we are now in growth mode.  Cheerful economists still say, with a shake of the head, that it’s the wrong sort of growth and it isn’t likely to be sustainable. 

Whatever, there is a distinct feeling of optimism among the SMEs with whom I work and the magic word “growth” is on most people’s agendas (agendae?). 

So what sort of growth are we looking for?  Why should a relatively cautious forecast not be just what is needed at this time?  How indeed do we encourage people to accept that the economy is turning for the better and everyone will benefit? 

Growth in a business is a two part exercise.   I recall years ago making the point that we can’t expect dissatisfied people to give great service to customers. 

In the same way, while a little creative accounting can often show that a business is growing, until the people are absolutely on side, feel that their contribution is valued and valuable, and above all know where the business is going then sustainable growth is not on the horizon. 

So what needs to be done?  Cautious forecasts are usually achieved and even sometimes exceeded to nobody’s surprise and do little to excite the people. 

The concept of the B-HAG, the Big Hairy Audacious Goal (that’s the clean version) will do much more to excite people even if they say at the outset that it can’t be achieved for many and various reasons.   

In fact, as long as the business objectives are clear, well communicated and include what is needed to be done to achieve the objectives then anything is possible. 

Henry Ford said: 

“If you say you can and you say you can’t you are always right” 

There is a difference between growth of a business and that of an individual.  In the case of the individual growth is very personal and really says that as we learn more we grow in intellect and consequent stature.   

The lesson for leaders is to ensure that everyone in the business is given that opportunity; to learn is to maximise the contribution to the future of the business, so send people on relevant courses, bring in speakers to the business and start a library both physical and online open to all at any time. 

Encourage innovation by asking people their opinions about situations which could be improved and how they would solve a problem.  Use brainstorming techniques to show people that their contribution is valued and make their solution visible to everyone. 

Above all, remember that people want to know how they are doing and where the business is going.  That means that as many people as is feasible should contribute on some way to the strategic thinking and when the short and medium term objectives have been set, performance should constantly and regularly be communicated so that everyone knows where we are going. 

Dissatisfied people do not contribute to the success of a business. 

Involved, engaged and aligned people whose opinions are given the respect they deserve working in an atmosphere of transparency and clarity can achieve and even exceed that B-HAG.
 
 
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Sunday, 2 March 2014

How Do You Control Use of The Internet in Your Business? Ask Your Gen-Y Employees What to Do!

At a recent meeting of my Vistage group the question of (and I use the description reluctantly) Internet Policy was ventilated. 

It was interesting to see the different approaches in the businesses in the group.  Some had a “policy” which was communicated to everyone in the business, some had rules of engagement which apparently are less prescriptive and some had nothing at all. 

It is worth examining the whole situation as far as use of the web is concerned in a business and even more importantly to realise that the rate of change is generally far quicker than the majority of us realise and can manage. 

The first and the most important factor to understand is that however we whinge and complain about the mass of emails which land in the inbox daily and the consequent time taken to deal with it, it isn’t going to go away and indeed will certainly increase rather than decrease. 

Secondly we who happen to have maturity on our side tinker round the edges of the thing and hope that we are keeping as much up to date as we can manage.  If in doubt pass it to the IT department and hope that they can do something to help. 

The sad and sorry fact is that if we are not Generation-Y we use the facilities of the wed and the internet simply because it is there and, as I said before, it isn’t going to go away so we had better use it. 

The imposition of an “Internet Policy” usually results from management noticing that some of the younger Gen-Y members of staff seem to be on the system a vast amount of time and therefore some rules need to be laid down. 

It must be said that most “policies” tell people what they can’t or mustn’t do rather than showing the positive side.  When we don’t fully understand what is going on the first and easiest option is to restrict it and lay down the rules to achieve it. 

We need to understand that if we are much more than 30 and probably 25, we just don’t understand that for Gen-Y a smart phone, a tablet or a computer isn’t just a piece of equipment at the office, it is way of life. 

I know of Gen-Y users who never use email; their preferred method of communication is through Facebook or Twitter and no doubt from another fashionable piece of software which will be launched any time now. 

Vistage speaker Herb Meyer says that the rate of change in terms of the expansion of the available knowledge base is exponential whereas our ability to keep alongside is linear.  All that this implies is that the gap between available knowledge and us grows ever great by the minute. 

If we take Gen-y on to our staff we now have to expect that their approach to technology is almost certainly diametrically opposed to ours and the way that they embrace this technology is vastly different from ours.

If we accept that this is the case, that things will change and we won’t know about them because we don’t use the technology in the same way, then we have a chance to achieve a positive outcome. 

It can and will be rather disconcerting to realise that some youth who we probably would dismiss as inarticulate and hence not over bright, is almost certainly streets ahead of we mature ones when it comes to the crunch. 

The answer?  Don’t bother with “internet policies”.  Bring the youth into the fold and use their abilities for the good of the business and the people in it.  In another ten years many of us will no longer be as involved as we are now and our places will have been taken by the current Gen0Y intake. 

We must harness the abilities of this generation because they are better at doing things than we are.  They are not a threat, they represent a great opportunity and we need to accept and exploit it.
 
 
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