10 Mistakes to Avoid in Handing Down a Family Business

    1. Not making the time to plan early enough.
    2. Making decisions to fill key positions with family members based upon emotion and bias, rather than an actual “fit” for that position.
    3. Placing close relatives into these key positions without first getting an objective assessment to verify the inherent skills to be acting in those positions.
    4. No development program in place to advance the individual performance of your people to sustain the profitability of the business.
    5. Merely dividing business equally for distribution to several family members, without understanding that this is likely to lead to conflicts or discord, cascading into personal family problems.
    6. Holding onto the reins and refusing to let go, and waiting too long to turn over areas of responsibility.
    7. Keeping family members on the payroll that are not performing, particularly in any key position.
    8. Not trusting a chosen family member to have the skills necessary to make decisions and to advance the business when it is time to take over a leadership position.
    9. Never “really” retiring, but running or interfering with the business from outside, or continuing to show up and run the business after claiming to have turned over responsibility.
    10. Making the plan for business succession without outside guidance from a professional with an objective perspective, and without a clear strategy to implement the transition.

Family owned businesses can gain a distinct competitive advantage and sustained profitability if the business transition is planned objectively rather than emotionally.

Connect with Perpetual Development to understand how you can implement a cohesive strategy for transition.


What is Your Business Performance Potential?

There are few businesses that are taking full advantage of the true potential of their core resource, the individuals on the team. The entire group could be operating with a low performance standard set far below actual capacity. A business leader could also be operating at a lower level of energy, drive and engagement. The people in the organization can be confused or even just uninformed about the current business goals, where the business is going as a group, and are disconnected about how his or her performance contributes to meeting those goals. The degree to which the culture is performance-driven is set by the decision makers in the business.

Igniting a performance-driven culture in your business starts with you, as the leader. It also demands an evaluation of your team leaders, sales staff and the entire group. How do you evaluate the performance potential of an individual? This is a highly specialized field that identifies the various human qualities of the individual, as well as their capacity for high level performance. Are you taking advantage of the potential of your people? Do you know their true capabilities? If you could understand what they are capable of, how do you create a culture that inspires this level of performance?

Identifying the strengths of your human capital can allow you to inspire a performance-based culture in which each individual is driven, is personally accountable for their actions, and is operating at top capacity as a member of the group.

Perpetual Development employs a variety of resources to accurately evaluate individual performance capacity. Armed with this data, a strategic plan can be crafted that drives engagement, advancement and exceptional profitability. Connect with Perpetual Development for more information about performance capacity evaluations.


Rapid Growth and Fiscal Health Do Not Ensure Success

Many business owners make the fundamental error of believing that fiscal health indicates that the business is strong. Financial stability is only one of the components of a business that will achieve sustainable growth. As markets change, fiscal health can rapidly deteriorate. The decision makers in the business must have the ability to maintain a high level of focus and readiness. Each individual owner must be resilient, flexible and able to quickly adapt to the inevitable changes in the market, as well as to operate as a leader of an aligned team.

As an example, a mechanical design company with 160 employees had problems – but not financially. The business was growing quickly. The four owners were disconnected, operating without focus or any strategic plan or vision upon which to base their decisions. The CEO at the firm had concerns about the lack of alignment of the partners, and the negative impact this would have on the future of the enterprise. The partners tended to react, generally only by responding to the day-to-day challenges and problems. Critical decisions were being made independently, and the internal operations were out of alignment, creating a high level of friction within the business.

Although the company was profitable, and the internal processes were functioning at some level, the members of the team were not communicating well with each other. There was an increasing problem between the partners, who tended to avoid contact and act independently. Without alignment in the partners, with the added factor of a poor level of communication, the business was at risk. The owners needed to find a process that would get the team aligned, would restore communication, and lead to a shared vision and effective action for future advancement.

The first step in resolving this critical issue was to identify the actual challenges in the business, as opposed to focusing on the symptoms. These challenges included those in leadership, in goals, individual opinions, and the various beliefs and ideas about the business and how it should operate. With the help of a Specialist, the partners identified six existing challenges:

  • Difficulty in hiring employees that performed quality work
  • Poor training processes in place for employees
  • Poor project coordination
  • Poor utilization of resources
  • Concerns about how the business would grow in the future
  • Difficulties in putting systems and procedures into the business to manage higher volume as the business grew

As with any business, fiscal health and profitability are powerful motives. In this example, it is clear that the business was facing internal problems that would eventually destroy it. Without alignment and the ability to adapt to the natural chaos of growth, there is instability, and sustained fiscal health is impossible. Are you concerned about the performance and the low level of communication and engagement in your business?  Do you really understand the actions to take to create a cohesive, performance-driven team? It starts at the top. Your decision makers could be operating in alignment, at a high level of understanding and engagement with the team, and have the ability to inspire performance.

 


Resilient Business Leadership: Developing a Performance-Driven Culture

As a business owner, you set the pace in your organization. Are your people driven to perform? Are they operating outside their comfort zone? Are they meeting or surpassing your performance expectations in sales? Exceptional profitability is the outcome of developing and sustaining a performance-driven culture. Your ability to adapt, and your resiliency in dealing with adversity while sustainably driving performance are a measure of your leadership performance.

Are you a resilient leader that is able to maintain your focus on your business goals, and rapidly adapt to the daily pressures and problems inherent in starting or building a business? You can develop and enhance your leadership resiliency and performance. A high performance leader is measured by outcomes in exceptional profitability, advancement and sustained growth.

Ask yourself these questions about your level of resilient leadership:

  • Are you persistent, pursuing your goals despite the obstacles that arise?
  • Are you able to handle rejection and listen to criticism with objectivity?
  • Do you take initiative to engage your core resource, your people, to help you achieve your goals?
  • Are your problem-solving skills affecting positive change and advancement in performance and profitability?
  • Are you flexible, and able to adapt to new challenges and circumstances easily?
  • Do you feel personally accountable for the attitudes and decisions you make in your business?

10 Tips to Advance Profitability in Family-Owned Businesses

  1. Keep your people consistently informed about your business goals in a weekly meeting.
  2. Reward high performers – not your friends, family or favorites, unless they are the top performers.
  3. Take sufficient time to plan out a comprehensive, achievable strategy for the next quarter.
  4. Put your people in the picture about the current business goals, and continue to keep them informed of the advances towards those goals.
  5. Allow your team to offer and implement process changes that could advance profitability and performance.
  6. Act – don’t spend your day reacting to the latest crisis.
  7. Insist your people come to you with solutions when a problem is presented.
  8. Reward any team member who was a high level performer that through their actions, helped to reach weekly, monthly and quarterly goals.
  9. Take an objective look at your current culture. Is it working? Make the decision to become an inspiring leader and act accordingly.
  10. Listen to your people. Ask the right questions to identify the real problems in your processes, whether communication, lack of alignment of work teams or other issue.

Perpetual Development works with business leaders in family owned businesses. Connect with Perpetual Development to gain a real understanding of the needed actions to advance and transform your business into a performance-driven, aligned team, and gain a distinct competitive advantage.


Family Owned Businesses: Culture and Profitability

Your family owned business has a unique culture. Are you certain you understand it? The energy, focus, spirit and level of personal accountability of the people in your organization are indicators of your current culture.

Are you, as a leader, spending all of your time solving problems and reacting to adversity? Are you prepared to get an honest, objective assessment of your culture?

You may be uncertain about the actual performance capacity of each individual on the team, and why performance doesn’t meet expectations. Your people can withhold their best efforts, impacting every process in the business, including sales performance.

Are you ready move forward and make the necessary changes to transform into a performance-driven, aligned team?

You, as a business owner, have achieved some degree of earned respect in your business.  This respect is the direct outcome of your spirit, decision-making, purpose and drive. You set the pace, and your actions inspire and advance performance. Do you know where you stand? An assessment can identify the strengths and limiting elements in your current culture. Understanding the current culture in your business is the first step in profitability advancement. Transform your business from a disconnected group to a focused, energized performance-driven team.

Your leadership skills should be assessed as part of the process. By an objective assessment, specific actions can be taken to assist you to move from being a reacting leader to a thinking leader that inspires.

These fundamental issues are at the core of sustained growth and accelerated profitability for a family owned business. Maximize the strengths and minimize the limitations in your current organizational culture.


Your Company’s Culture and the Impact on Performance and Profitability

The culture in your business is a measurable quantity. Performance levels, energy and intensity are key elements in your company’s current culture. These can be quantified. A focus on tactical actions that affect the performance, people and alignment within the organization are essential to increasing profits.  Profit is the outcome and measure of how well a company does in all things, including the actions of the people, the internal energy generated in the culture, performance, understanding, alignment and advancement. Your people are the core resource of your company. As a leader, do you inspire and advance performance growth?

Mis-Aligned or Underperforming People

Are you concerned about the performance levels in your company? Underperforming people tend to blame others or internal situations, and usually have no personal accountability for what they do (or don’t do). “Do it because I say so!” – will have no positive outcome. Owners could be viewed as ineffective, unwilling to listen, disconnected, or are not acting in a leadership role that inspires performance advancement. This is true in family-owned businesses, privately held corporations, and many other organizations.

Advancing Performance: Understanding Your Company’s Culture

Your company is an intelligent organism, and must be evaluated and understood from this perspective. Successfully shifting an organizational culture begins with evaluating the organism and the opinions of those within it, on a completely confidential basis, with the right questions. Only then can a strategy be understood, developed, executed and advanced to instill energy, advance performance and lead to personal accountability. This transformation will lead to quantifiable results.

The objective is to maximize the positive elements of the organizational culture, while increasing performance growth. There is a natural outcome of an increase in profitability. Companies that require rules, regulations and standards as a way to regulate and manage people and outcomes to the minimal defect and error rate are companies destined to create a cultural disconnect. When individuals say people are valued, but actions do not support the words, you inhibit performance advancement. People, your core resource, can be regulated and managed, with very temporary results.

What is the common language of the culture to inspire and advance performance in the people that define your culture? An owner observing low performance, lack of energy and focus and people that have no personal stake in the company’s success must make smart decisions. The first step is to accurately identify the internal barriers to sustainable performance.

A shift in the existing culture to an environment in which all of the people are aligned in purpose, and are personally driven to high level of performance naturally leads to profitability. A spirit and culture that includes a company-wide engagement in achievement can transform your company.

Growth Smart Business

How do you shift a culture that has lost its intensity, drive and energy to an aligned team that is engaged, effective, and focused on performance? When people within a company begin to fully understand, acknowledge and measure how they contribute to profitability, they have taken the first major step toward owning personal accountability and the performance of the company.

How will you make the transition from being a tactical “doing” leader to a thinking advancing leader? Your people, culture, performance and profit require you to know the answer. Profitability is the sum total of the aligned actions of the people in your company. Without engagement, alignment and personal accountability for performance advancement, there is no long term sustainability.

When profits falter, or are stagnant, sales results don’t equal sales expectations, or the owners are focused on internal problems, it is time to make the smart, effective decisions. It starts with an analysis, based upon the objective understanding of your current culture. The energy and engagement of the people in your organization is your greatest untapped core resource.


Perpetual Development works with business leaders in privately held companies and family owned businesses. Connect with Perpetual Development to understand how you can advance or transform your company’s culture to gain a distinct competitive advantage.


What’s the Readiness Index of your Salespeople?

Readiness defined is referenced as the state of being fully prepared for something. Index defined is referenced as an indicator, sign or measure. So here’s the question: What’s your sales readiness index?

Advancing Sales

The best way to identify salespeople with a high sales readiness index is by what they do instead of what they say. (Look at their behaviors rather than their words; although words can be revealing.)

High readiness index salespeople create action that is exceptionally alert, externally oriented, relentlessly aimed at winning, making progress each and every day, and constantly eliminating low value-added activities – all by always focusing on their sales disciplines and preparedness.

They pay much more attention to what is happening externally rather than internally. They move at the “speed” needed to succeed and recognize that you can take fast and make it faster. They initiate and truly own their sales performance with the measured attribute of personal accountability. Most of all, they constantly re-invent and re-examine and don’t rely exclusively on what has worked for them in the past.

Preventing Complacency

sales-approach-sales-performanceA low sales readiness index and complacency can be the product of success or perceived success. Both can live long after success has stopped occurring or disappeared entirely.

Salespeople with a low readiness index, never think they are complacent. “I’m doing what’s right.” “The real problem doesn’t reside with me. The problem is being created elsewhere or by someone else.” (The measured attribute of personal accountability is significantly lower than in high capacity salespeople) At a very gut level, low readiness salespeople are content with the status quo.

A High Sales Readiness Index Contributes to Results
Being fully prepared and measuring that preparedness leads salespeople to a High Readiness Index. It allows them to fully engage around their chosen sales strategy and approach.  As the points below suggest, there is a clear connection between a proactive approach and the readiness index of salespeople.

  • Continually evaluate sales effectiveness – maximize strengths and minimize limitations, discuss best practices with top performing peers and utilize internal and external expertise to grow individual sales knowledge and perspectives.
  • Clearly define priorities and self-created performance expectations.
  • Communicate often about the successes, challenges and opportunities impacting customers. Utilize product, service and all other strengths to achieve great results for you and customers.
  • Maximize the use of reporting, tracking and measurement to achieve optimum sales results and financial reward.
  • Be intolerant of a low performance and sales readiness index.
  • Strive for consultative and stronger customer relationships; using a value proposition that is based on a trusted advisor status related to product and service opportunities.
  • Use product and service strength to convert customers who are currently doing business with the competitor.
  • Establish and focus on defined pricing, targeted margins and minimized discounting.
  • Shorten the sales cycle through behavioral awareness of customers and prospects.
  • Regularly assess and review personal performance to make sure that your approach, behaviors and actions reflect that of a sales professional with a High Readiness Index.

The sales readiness index of your salespeople has a direct impact on advancing the performance, culture and profitability of a company.