Kubica LaForest Consulting

Retirement Preparedness

March 9th, 2012

How prepared are you to retire?

If you are over 50 years old and are a small business owner, this should be a very important question for you. And, if you are like a lot of your peers, the answer is – not very, yet…

A recent report by the American College said “that small business owners have done very little planning and saving for the time when they must transition out of their business”.

Here are some revealing statistics from the report:

One in three respondents have not estimated how much they will need in retirement
77 percent do not have a written retirement plan
Approximately 50 percent say they want to maximize their business value to help fund retirement, yet only 10 percent have a written plan to accomplish this

Steve Covey gave us an important insight when he said: “start with the end in mind”. The end, in the case of the small business owner, is transitioning out of your business and having the business contribute to funding your retirement. The other option, of course, is to just shut down the business when you are ready to retire and trust that social security, perhaps some IRAs, maybe some deferred annuities will do the trick. Well if you are like the 77 percent who don’t have a written retirement plan, you don’t know – really.

Exit planning is preparing for your end game, yet getting there successfully requires thoughtful consideration of:

Where are you financially today?
When do you plan to retire?
What do you need financially to retire?
Where will the funds come from?
Where are you in your business today?
Where do you need to be as you approach retirement?
What’s your strategy and approach to positioning your business to support your retirement financial plan?
What actions are you taking now?

Unless you are unwelcomingly hit by a biological event (i.e. serious illness, accident, death), you do know that one day you will retire and it’s not going to be a surprise. And as much as you think you would like to work “forever”, your body may have a very different opinion.

Become serious about your retirement and the role your business will play in funding it. You may not think it’s critical now, though in a few years you will be grateful that you acted when you did.

For additional information on key issues and topics on business growth, succession and exit planning, see our blogs, free articles, white papers and videos at: www.kubicalaforestconsulting.com

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Want to Grow?: The Boss Matters

February 29th, 2012

We already know that some companies are finding it difficult to recruit talented employees – especially in the technical fields. In that, there is good and bad news. The good news is that more talented employees will be willing to leave their job and join another company in 2012 (good news for good companies looking for talented employees). The bad news is – they may be leaving your company. If you are facing a talent shortage yourself, and you have issues with bosses in your company – you stand to exacerbate your talent problem.

DDI recently conducted a survey on employee attitudes toward their boss. The findings were revealing:

One out of three employees don’t feel their boss is doing and effective job
Newly half of the employees surveyed feel they could do a better job than the boss
Fewer than 40% of employees are motivated by their supervisor to give their best effort
35% said their boss never, or only sometimes, listens to their work-related concerns
54% involve employees in decisions that affect their work
Too many leaders aren’t delivering on the basics: respect, honesty and tact in their interactions with employees

Now listen to this – nearly 40% of the employees who left their job cited their boss as the reason, and nearly 50% say they are thinking about leaving because of their boss.

The proof is becoming stronger that bad bosses have a palpable negative impact in organizations. Yet, too many organizations haven’t given the consideration, time, and attention to supervisor development that they have to other components of their business. If you are serious about growth, it is imperative that your “bosses” are not the kind people fear, tiptoe around, avoid and eventually leave.

For additional information on key issues and topics on Supervisory Techniques and Leadership, Business Growth and becoming a Talent Gravity Organization see our blogs, free articles, white papers and videos at: www.kubicalaforestconsulting.com

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The Happiness Link to Better Performance

February 24th, 2012

Compelling articles in Harvard Business Review (Jan-Feb 2012) give employers a strong reason to create a positive work environment that is responsive to the needs and interests of their employees.

Research around employee well-being and happiness shows a convincing correlation to heightened productivity, sales and creativity when employees are happier. And sustained employee performance results in a growing organization.

What should you/the employer pay attention to?

At the core, it’s important to create a positive work environment built on the values of supportive relationships, civility, and an experience of learning and growth. Growth comes when the people who have to make it happen are aligned. Internal competition and contention create and then reinforce silos.

While it seems obvious that a happy employee makes a better employee, many employers underestimate or overlook their opportunity to improve business through focusing on their employee’s experience (which directly influences happiness). And small consistent experiences of happiness (i.e., positive colleague relationships and supervisory support and feedback) positively move the needle toward a more steady state of happiness.

Additionally, we believe the most progressive employers:

build in creative outlets for employees, such as music, art or quiet reflection areas or nap rooms
offer health and wellness programs through physical exercise opportunities on site and/or work time approved for health and exercise activities
promote internal appreciation and expression of gratitude through values and practices
Support employee contributions to altruistic causes

Not sure? Think this is fluff and not relevant to the hardcore, hard driving business world you live in? Well take a look at Google, Zappos, and the work coming out of the Ross School of Business’s Center for Positive Organizational Scholarship (University of Michigan). The link between employee happiness and performance is more than an assumption and it is mutually beneficial to both the employee and the organization.

What’s your next step in promoting your employee’s happiness?

For additional information on key issues and topics on Leadership and Business Growth see our blogs, free articles, white papers and videos at: www.kubicalaforestconsulting.com

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Remarkable Companies Innovate

February 15th, 2012

If you want to grow your business and especially if you want to be remarkable –you need to innovate. Otherwise you will float rudderless in the sea of sameness.

Many business owners we talk with misunderstand the idea of innovation. They think they have to come up with something big and new: a new product, a new service, a brand new something. Well fortunately, innovation doesn’t require new; it requires better; it requires meaningfully different. In etymology, the word innovation derives from the Latin word innovates which is the noun form of innovare “to renew or change“. We believe this is an important clarification regarding the common confusion between innovation and creation / invention,

Simply put, innovation can be:

A better approach to customer service
Faster response time
Less errors
More efficient process that reduces cost without impacting service quality – and may even increase service quality
A branding approach that resonates with potential buyers
Having a person answer the phone!

If you sell insurance for example, why should someone do business with you and not another agent? If you sell a training program, why should the client choose you? What makes you special; what makes you stand out; what draws clients to you that represents more valuable to them than what your competitors provide?

Remember that when you innovate you will end up doing something different. It may be a small re-calibration that will pay great dividends. Something better in the mind of the customer, but different from the way you’ve done business in the past.

Innovation is the ability to change and transform your business practices within your company. To innovate successfully you must impact the two sides of innovation: the customer facing side and the employee delivery side. Leave one out and all you have is an unsuccessful project.

For additional information on innovation and other topics on Business Growth see our blogs, free articles, white papers and videos at: www.kubicalaforestconsulting.com

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Employees – Expense or Investment?

February 8th, 2012

While this seems a simple question for employers and business owners—it is loaded. Because, how you see and reference your employees is a window into how well you compete and how effectively you grow your business.

What’s in a word – a lot! Based on the word you use your behavior (and expectations) are markedly different.

You manage expenses; you control expenses; you minimize expenses. You focus on productivity – how many things get done per unit of time. Employees do what they are told and stay in their sphere of “efficiency”. Independent thinking is not encouraged as it may increase expenses.

Investments on the other hand are what you do to develop new ideas, to be creative and innovative, to find new (and novel) ways to do things – to grow.

We have been blogging on Talent Gravity Organizations and how they lead to growth. And based on our work with clients, a common point we see is:

how you see your employees (as an expense or as an investment) defines who you hire and how you treat them;
and who you hire and how you treat them defines your culture, retention, customer service, quality, and growth.

As we have said before, high quality talent has choices. And one choice they choose not to make is to be seen as an expense.

For additional information on key issues and topics on Talent Gravity Organizations and Business Growth see our blogs, free articles, white papers and videos at: www.kubicalaforestconsulting.com

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Generational Succession in Family Businesses

February 1st, 2012

Family run businesses should be like any other businesses. But in most cases, they are not.

Family owned businesses have a significant impact on our economy. According to the Family Firm Institute (http://www.ffi.org/?page=GlobalDataPoints):
• Family firms comprise 80% to 90% of all business enterprises in North America
• Family owned businesses employ 62% of the U.S. workforce
• More than 30% of the family owned businesses survive into the second generation, and internationally, these numbers increase.

It’s clear that family-owned businesses are a big deal to our economy. It’s also apparent that the approximate 30% that survive into the second generation also means that approximately 70% don’t.

Would better survivability matter? In our opinion it would, especially since survivability implies longer-term employment and more economic stability.

There are common reasons why approximately 70% of family owned firms don’t survive into the second generation, such as the children and other relatives aren’t interested in the business, or are working there but aren’t really invested in it or their role. It’s also interesting to note (as reported by the Family Firm Institute) that only 37% of family owned businesses have a strategic plan, and 85% of those businesses that have identified a successor say it will be a family member.

Which gets us to an important point – employing family members in the business. This may seem obvious – of course family-owned businesses will employ family members. But the real questions are:
• Are they qualified and capable?
• In what role?
• Did they earn their position?

There is an interesting article in the January-February 2012 issue of Harvard Business Review titled: Avoid the Traps That Can Destroy Family Business. The authors listed three traps:
1. The trap that “there is always a place for you here”.
a. To address this be sure that you are hiring family members who are at least as qualified as non-family candidates
2. The reality that many businesses can’t grow fast enough to employee the family members for are seeking employment (or whom you may feel an obligation to employ)
a. To address this it’s important to manage the entry of family members into the business
3. Family members remain in silos based on bloodline
a. This prevents cross-functional training and the way to address this is to appoint non-family members as mentors

Family owned businesses are a major contributor to our economy. Many are small, but some (like Ford Motor Company, Wal-Mart, Levi-Strauss and Nordstrom) are large and well known.

If you own or run a family business, take a moment to think about its current state. What are you doing now to ensure that the business survives and is set up to thrive after you leave? To help you address this, we advise family run business executives to start by asking themselves:

• Do you have a plan for business growth?
• As the key leader, do you have a personal exit plan?( Remember, biology and accidents often trump the ideal planned exit.)
• Do you have viable successors for key roles?
• And, how are you preparing potential successors?

For additional information on succession planning and other topics on Business Growth see our blogs, free articles, white papers and videos at: www.kubicalaforestconsulting.com

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Oh You Mean We Have To Do It?

January 25th, 2012

Planning can be fun. At least it is most of the time. The executive team or management group gets together and talks about what is and what could be for the company.

And here’s how the process usually goes:

You look at the current state of the company
You discuss and spend time on the daily issues and micro-issues within the company (aka – side bar conversations)
You start looking at what you need to do as a company
You create a list of all the things you mustdo – usually on a white board or flip chart – the list is long because there is so much to do
- Oftentimes the list of “must do’s” is not based on actual data: (employee surveys, client/customer surveys. market research – but on the general impressions of the people in the room)
- You assign people’s names to things to do
- Everyone walks out with their list

Next day, everyone goes back to their job and it’s business as usual. There may be a few follow-up meetings. But the reality is that there is way too much day-to-day work to do.

And here are snippets of conversations we hear in the meetings, at the breaks and afterward back on the job:

How can we possibly do all this when I have too much to do already
Things really aren’t going to change around here – it’s just the same ole – same ole.
Tell me what I shouldn’t do
These actions really won’t help and I don’t think they are worth spending my time on (uttered by people who disagreed with the conclusions and the go forward action plans)
If I do what they propose, I’ll be out of a job (frequently a complete misconception)

And another year passes.

What we’ve just described are businesses that lack discipline, focus and effective leadership. These businesses may or may not be affected by the economic conditions in the marketplace, but they are all infected with a disease we made up called complacertiaosis (complacency and inertia).

Now just to be fair, there are organizations that do an outstanding job with planning and they do it the right way and their follow-through is exceptional. These are usually the more successful companies.

As a business owner or executive, planning, and then implementing the necessary changes to realize the plan, takes thoughtfulness, time, leadership and courage. And your people, the ones who will be charged with implementing your plan, are by far the potential weak link in the planning chain. How you prepare then, how you support them, and how you reward them will directly relate to how successful you are. Miss this and you have wasted money, wasted time, disrupted the organization, and maintained business as usual.

For additional information on key issues and topics on Strategic Planning, Leadership and Business Growth see our blogs, free articles, white papers and videos at: www.kubicalaforestconsulting.com

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If the Shoe Fits … A Key Consideration When Hiring Your CEO or Buying a Company

January 20th, 2012

We’ve all heard this – right. We probably even finished the sentence in our head without realizing it; it’s automatic.

But the idea of fit is not so automatic when it comes to vetting and hiring CEOs or acquiring companies. Fit doesn’t only apply to shoes. And unfortunately it is often overlooked.

When the Board hires a new CEO – it expects he or she will be successful because they have been. When one company acquires another company, the acquiring company expects the transaction will be accretive to their organization. Yet more often than anyone wants – it’s not.

When we hire a CEO, or any key position in the company for that matter, what do we look for? We look for technical skills, managerial skills, history of doing the job (or a similar job). Less often do we look for temperament; and even less often than that do we look for fit. That is, how likely is this candidate to fit into our organization?

When we look to acquire a company, we “run the numbers”. We perform a due diligence. Yet how often do we accept or reject a deal based on fit? Not very often.

And what’s the success rate of CEO’s and acquisitions? Poor. One survey result published in the Harvard Business Review reported that 40% of executives fail within 18 months. And the success rate of acquisitions is even worse. A number of studies report success rates below 50%.

So what’s going on? Well one of the things that’s going on is this thing called fit. That is – how well does the CEO fit into the culture of the organization; and, how well does the acquired company fit into the culture of the acquiring company?

Fit is based on values, and unless you know the values of the leader and the values expressed by the company culture, it is near impossible to gage fit. And if you can’t gage a critical component of a successful hire or a successful merger, then your might as well just flip a coin. And it’s so much less expensive for a similar outcome.

For additional information on key issues and topics on Leadership and Business Growth see our blogs, free articles, white papers and videos at: www.kubicalaforestconsulting.com

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Tags: A Key Consideration When Hiring Your CEO or Buying a Company
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Four Metaphors: What the Most Effective CEOs Embody

January 11th, 2012

Peter Fuda and Richard Badham wrote a fabulous little piece that we’d like to expand upon called How Leaders Spark and Sustain Change (Harvard Business Review, Nov. 2011). We find this particularly helpful for CEO’s and emerging leaders to not only consider but also ideally internalize to assist them in being successful leaders. And Fuda and Badhan go so far as to say that in studying ineffective CEO’s, they find that these ineffective leaders can in fact transform themselves into successful leaders through actionalizing four common metaphors.

The first metaphor is “fire” and it represents a burning ambition. Far too many people lack or have lost the fire for what they do. This is noticeable and uninspiring to others and becomes apparent in their (under) performance. This means that leaders need to identify and align their efforts with what they do best and what they have passion for. No passion, no fire, results in a low burn in value and impact.

Second, is “a snowball”, and it represents a cycle of momentum. Jim Collins, in Good to Great, references momentum as a fly-wheel. Leaders need to demonstrate and create “mutual accountability that creates momentum for change”. We find that low accountability in organizations results in inconsistency and poor output. And worse, a culture emerges that results in a destructive environment of infighting and competition.

Third, is “the mask” and it represents the false persona that people adopt to protect themselves from vulnerability. Fuda and Badham state that leaders must reveal their persona that they believe conceals their flaws – thereby allowing authenticity and genuineness with others to emerge. We find this is a tremendous enabler for developing real relationships. And it’s real relationships that promote trust.

Fourth, and lastly, is “the movie”. This is an area that we preach and strongly believe in; it has to do with a process (not an event) of truthful self-assessment: reflection, evaluation, and course correction.

It’s a wonderful thing to know that strengthening your performance and being your best is really, fully in your control. And we believe that being a successful leader is congruent with being a “happily successful leader.” Left unattended, you are likely to find yourself in the “unhappily successful” category, or worse, the unsuccessful/ineffective category. It’s your choice.

For additional information on key issues and topics on Leadership and Business Growth see our blogs, free articles, white papers and videos at: www.kubicalaforestconsulting.com

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Pay for Performance: A Great Premise Used Wrongly Results in Mediocrity

January 4th, 2012

We hear and read a lot about pay for performance. We see it in large corporations, in healthcare (physicians and hospitals) and even in small businesses.

And if you want to take one step toward mediocrity – put in a pay for performance system.

Now don’t get us wrong, pay for performance is a sound idea. Who in their right mind could or would be against the premise? The problem we have is that we don’t have pay for performance systems in many organizations that claim to. What we really have is a modified unearned bonus structure disguised as pay for performance. And the crux is that it all depends on how you define performance.

We have seen pay for performance ending up being an artificial intervention into an otherwise dysfunctional system to start. A system that can’t effectively perform on it’s own so we decide to pay for it (performance, that is). It’s like having your children behave badly in front of guests and paying them to behave nicely. And worse yet, paying them whether they behave nicely or not!

Another problem is pay for performance often becomes a dual cast system: those that get it and those that don’t. And when you end up paying for poor performance, as you often read about, just imagine how the employees feel when company performance tanks, jobs are lost, and “performance” is richly rewarded (for those executives on a pay for performance plan).

Now this certainly sounds like a rant. Perhaps it is. But we also want to reinforce that sometimes good and well-meaning ideas go terribly wrong; It’s what is referred to as the Law of Unintended Consequences.

We’ve written recently about becoming a talent gravity organization, about drawing high-potential talent to you. Well, there is absolutely no way you will do that if you have a pay for performance system that truly doesn’t reward good performance, or where performance is poorly defined, or if poor performance is really a cast system. Now change the “or’s” in the previous sentence with “and’s” and you simply have a bad policy in a poorly performing company.

If you truly believe pay for performance is a good idea, fine, put it in, but put it in for everyone. Clearly define performance as meeting or exceeding aligned company goals, as working together to focus on customer needs, as breaking down silos. But again, then you can just development a culture of alignment and performance and watch your company, careers and compensation grow.

For additional information on key issues and topics on Leadership and Business Growth see our blogs, free articles, white papers and videos at: www.kubicalaforestconsulting.com

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Retirement Preparedness

Want to Grow?: The Boss Matters

The Happiness Link to Better Performance

Remarkable Companies Innovate

Employees – Expense or Investment?

Generational Succession in Family Businesses

Oh You Mean We Have To Do It?

If the Shoe Fits … A Key Consideration When Hiring Your CEO or Buying a Company

Four Metaphors: What the Most Effective CEOs Embody

Pay for Performance: A Great Premise Used Wrongly Results in Mediocrity