When working for somebody else, my goal had always been to make the company successful. I was not content unless expectations were exceeded. The employer provided valuable benefits that protected my family and me. I obviously took 401K contributions, stock options, and full medical coverage for granted because when I become an owner, I did not adequately attend to my own security. The business came first—for example, I did not budget for a defined pre-tax profit, there were few unfettered holidays, and I had no end-game in mind—other than short term success and making ends meet. Company needs were all consuming to the point of negatively impacting my family. As a husband and father, I wasn’t at home even when I was there physically. The business prospered, but unintentionally I placed my family, health, and our financial security in harm’s way. I succeeded because of luck, not good judgment. I had no planned end-game, just the good fortune of an acquisition-oriented conglomerate shopping for a company like mine. Had I been prepared for the possibility of acquisition, the transaction would have been more effective.

The key underpinning of my consulting practice changed radically once owner needs came onto my radar screen. For example, while coaching Black & Decker’s senior team, I introduced a concept called Managing the Partner Chain to overcome their practice of calling employees “internal customers”. I argued that there could only be one customer—the person spending his or her money to acquire goods and services. My model suggested that every department within a business should focus on delighting customers while meeting the needs of all partners in the service chain—the funding partners (investors and bankers), internal partners (employees) and external partners (suppliers, accountants, and strategic allies such as subcontractors.) The partner chain analogy legitimized the funding partner’s need for profit and influenced executives, managers, and employees to be more understanding about profit demands from head office and their investors. It also reminded everybody that a company was only as sound as the chain’s weakest link.

My latest consulting foray is with the owners of small to medium sized privately-owned or tightly held companies—some of whom are multi-generational. I add value because of my leadership and coaching expertise, but more so because of a 15 year history as a business owner. It takes a former owner to really understand the challenges facing business owners. As a Director of Sales and Marketing, I made million dollar decisions but they were funded from corporate coffers. It was quite different once everything I owned was on the line. The impact of risk taking on business owners must be lived to be fully appreciated. My tenure as an owner/manager would have been less stressful, more profitable, and more enjoyable, with access to experienced advisors. The following is what the hard knocks of ownership taught me.

Tips for Owner/managers

• Have an end game in mind—it may change, so qualify your thoughts as current best thinking. Always be working towards ensuring that your exit strategy remains doable. Know what your business is worth and what actions will increase or decrease its value. REMEMBER…if you are the only glue holding your business together, your business (and your family) is at risk should something happen to you. Also, the enterprise will be worth much less to prospective buyers or “next generation” family members.

• To add value, manage strategic processes rather than by departments. This minimizes silo turf wars and reduces waste/rework (using a continuous improvement system). Focusing on process aligns everybody behind the customers total experience. There are four generic strategic processes: 1. Getting and retaining customers, 2. Serving the customer, 3. Supporting the partner chain, 4. Forward thinking. For more visit www.batonmanagementsystem.com

• Surround yourself with a team of solid professionals. Demand performance and confidentiality. You’ll need a good accountant, attorney, an IT resource, and some owner experienced advisors. A group of non-competing CEOs such what Vistage International provides is an excellent advisory resource. Measure the performance of your advisors and shop alternatives to ensure that you are receiving maximum value.

• On top of a salary for running the business, budget to compensate yourself for the capital you have tied up. Make it a line item on your P&L (above the bank interest line). They get paid monthly…why not you? Your capital investment is listed on the company’s balance sheet. Consider using a rate equal to prime plus a risk factor. Use this ROI to build an independent source of wealth–avoid carrying all your eggs in one basket

• Hold yourself accountable for the production of results and pay yourself in line with what the local employment market would demand for a similar contribution. If you sell the business, new owners will have to hire a replacement for you and still produce a profit.

• Place key-person disability and life insurance on hard to replace employees—including yourself…with the company as beneficiary.

• If the next generation is to take over, implement sound management and leadership disciplines. Expose the next generation to all facets of your business, build on their natural talent, and train them to become responsible managers. Declare the terms of ownership transfer and ensure that your retirement needs will be met without over-burdening the business.

Comment art@artmcneil.com or visit www.batonmanagementsystem.com

Nature hates empty spaces, and works hard to keep them filled. The phenomenal capacity of the human brain to fill empty space with imagined possibilities differentiates us from the rest of earth’s creatures.

Have you ever watched a tiger at the zoo? All its needs were being met; food, safety, free health care, and for a lucky few…a dating service. But like all caged creatures, it was dull-furred, dim eyed, and lethargic. Activity was relegated to pacing back and forth within its unnatural confine. Compare that sorry looking animal to its wild cousins. In their natural environment, tigers are majestic, alert, fast, and fit. When tigers are “tigering” they hunt—that’s what they were created to do. When humans are “humaning” they pursue dreams. Dream-focused people are like tigers in the wild…alert, fast, and fit. That great American philosopher Jiminy Cricket had it right, “when your heart is in your dream, no request is too extreme.”

Let’s take a closer look at the “humaning” factor. You produce a continuously-running movie in a space between your ears—a creative vacuum that presents mental pictures of both wanted and unwanted possibilities. Your personal theater will command attention 24/7 (whether you want the pictures or not). Most of your show runs at the subconscious level. According to the late Dr. Ronald Lippitt, we were programmed at a ratio of 12:1 negative, before the age of five. That means if left unattended, the space between our ears can be a huge liability. When a consistent theme is playing in your theater, that’s the direction you will be predisposed to follow. The choice is simple—fill your creative space with positive pictures of a preferred future or remain confined in the numbing cage of “chattermind”.

Vision is the future tense of values. Only when people share a set of common beliefs will they imagine positive possibilities. Groups whose members do not share *cultural-values are destined to imagine, and eventually create dysfunction—intentionally or unintentionally.

*culture=a collective set of habits used by a specific group of people to get things done

Great achievements are started by men and women who are focused on a powerful dream. They find the courage to act on their dream and help others paint themselves into the picture. Conversely, powerful civilizations crumble once the original vision (cause of their success) is forgotten. Collective vision is an essential part of healthy cultures at home, at work, in the community, and within nations. Without vision, “dead men walking” are destined to lives of lethargy and discontent.

Early explorers never expected to reach the North star but could use it to travel anywhere. When blown off course, navigators would sight on the North star and regain their bearings. Access to a stable, super-ordinate position during turbulence allowed our ancestors to travel unfamiliar territory. We need the equivalent of a North star today. In a radically changing world, people feel less threatened when they share a “reason for being” with likeminded others. Vision fosters courage because it promotes faith that after any crisis, the group’s North star (shared vision) will still be there.

A perfect example of leaders using a “North star” to shape a high-performance culture was America’s founding fathers. They wanted their country’s journey to remain above the turbulence of human foibles. Most of America’s current problems can be traced to officials from all branches of government who are not navigating by the constitution.

“Where there is no vision the people perish” Proverbs 29:18

Comment www.artmcneil.com

Performing activities at home, at work or in the community; without the active use of your imagination, relegates you to engaging life as a human doing, rather than a human being. The psychoanalyst Sigmund Freud assumed the primary human drive to be the pleasure experience. Pleasure is a chemical process brought on by endorphins released when the body sheds tension. For example, food eases the hunger tension, creating a pleasurable sensation that hopefully, will encourage you to eat again. The tension/pleasure process is nature’s way of promoting essential functions that preserve us as individuals and as a species.

A Nazi concentration camp survivor named Victor Frankel, observed people facing life and death situations over an extended period of time. His conclusions came from noticing the difference between people who died and those who found the courage to hang on. Frankel identified meaning not pleasure-seeking as the key to a healthy human existence. A dysfunctional person by contrast, has no purpose. They drift through life as creatures of habit, mindlessly filling then voiding mind and body; hoping to capture a modicum of pleasure. Others become addicted to adrenaline rushes and seek instant gratification in activities such as competitive sports, mountain climbing, or bungy jumping. They too are trapped as “humans doing”. The only difference between them and their mundane counterpart is their need for ever-increasing quantities, speed, power, and variety in order to sustain the pleasure experience. Unfortunately for them, yesterday’s rush is never enough.

Creativity comes from somewhere between the imagination and production: A small boy who regularly visited the studio of Michelangelo, asked the great artist how he knew that his classic statue “David” was buried in the original block of marble. What started as a vision was actually created by the arduous task of removing every piece of stone that didn’t look like the creator’s mental picture. When human’s are in the being mode, they inhabit a creative space that exists somewhere between the imagination at one end and their capacity to transform thought into productive activity at the other end.

People will experience spiritual numbing from a “human doing” condition, if they take up permanent residence at either end of the creativity continuum. For example, at the visionary extreme, they become chronic dreamers who can see the possibilities but are incapable of getting anything done. At the other end, people are relegated to the treadmill of uninspired production. Balancing one’s self between imagination and production is the essence of successful living. Humans become beings (i.e. life has meaning) when they are creating/contributing from a sense of purpose.

A…Attitude:
In a fast paced world, you must constantly reinvent yourself and redefine working relationships on an ongoing basis. Think of yourself as owning your own Corporation and working under contract to a paying customer. As long as your employer (customer) has work, and pays adequately for your service, the partnership is viable. Customer relationships are not entitlements. They can end without warning from either party. You should routinely assess your employer/customer’s short and long term need for the work you do—also evaluate your employer’s ongoing capacity to pay. Your company, “ME INCORPORATED”, has only two strategies to choose from:
1. To provide services by negotiating a contract with a single organization. It is your responsibility to ensure the contract evolves to keep yourself “right priced” (in line with the competition).
2. Develop multiple markets for your service by negotiating shorter term contracts, perhaps with several employers. Go where you will get the best deal—moving as opportunities/problems present themselves.

B…Boundaries:
Paternal loyalty from organizations is no longer an option and should not be expected. Your employer’s intent may be honorable, but as IBM learned, companies cannot assure perpetual employment. It’s healthier to develop a reality-based partnership–a partnership that remains intact only when both parties are profiting. Employers and employees will continue to develop caring alliances, but everybody should realize that they are in a business relationship—not part of an extended family. In the emerging marketplace, you will probably have to accept personal responsibility for the performance and security of your own career, investments, health care, and a retirement plan. Do not assume there is an entitlement of permanent employment from any organization. It is self-defeating to hitch your wagon to a star that could burn out or change positions on you.

C…Collaboration:
Permanent teams are giving way to ad hoc groups that form and disband as required. “Transient teaming” is the watchword for how people will be organized for work. Intense competition for jobs and a quicker-paced economy demands new skills on your part.

To survive and prosper learn how to:
• start, maintain, and end a project.
• embrace new concepts, people, and ways of doing things.
• choose how and when to effectively confront others.
• take the initiative to resolve conflicts.
• trust others and earn their respect by having high integrity.
• not be afraid to ask for help.
• maintain your ”perceived value” in a competitive environment.

Leadership is everybody’s business
“Those choosing to lead in the post industrial age, must make a 180° shift from a mindset of knowing, to an attitude of not knowing…replacing their trust in knowledge and experience, with processes for finding out and taking action faster than the competition”.

Contact art@artmcneil.com Visit www.artmcneil.com

Companies achieve market dominance by introducing innovative products or adopting a unique way of doing business that their customers perceive as adding value. A timely innovation often changes the rules of the game and creates a barrier to entry for the competition. But success associated with a major innovation is not achieved because of market impact alone. If the innovation is sufficiently powerful, congruent patterns of behavior form around the breakthrough and the innovator evolves a supportive corporate culture*. As the innovative company adapts to capitalize on its advantage, the cultural alignment creates focus and clarity of purpose. Profit is realized because alignment fosters operating efficiency. Compatible ideas, products, and decisions are embraced, while the ‘out of the box’ suggestions of nonconforming challengers are rejected.

Unfortunately a caveat is attached to innovation based success. Military history is riddled with evidence that the majority of victors do not live happily ever after. That’s because winning generals are prone to reuse technology, strategies, and tactics that helped them win previous battles. Sticking with yesterday’s advantage when the situation has changed is a recipe for disaster. Germany conquered Europe with a new strategy called blitzkrieg (lightning war—a sudden swift military attack). Fixed embattlements such as the Maginot line, once thought to be impenetrable, did nothing to impede the rapidly moving invader. When a culture becomes centered on a specific advantage, there is great risk that ideology will take over—and ideology is anathema to change. During WWII, while Poland was in the process of being invaded, a defending cavalry officer wrote in his field dispatch, “the idea of huge armored vehicles rolling down roads at a fast pace is a dream.”

Success can be a precursor to failure in the business world as well. American Express suffered a near fatal blow when they did not respond to challenges from the banking industry. Amex had evolved a perfectly adapted collective set of habits, to exploit a credit card market of their own creation. But the advantage came with a blind spot. Executives failed to recognize that “upstart” bank cards were changing the rules of the game. Amex resisted lowering the rate charged to retailers—in spite of radically shrinking market share, and would not reduce what business owners viewed as an inordinately long compensation interval. The oversight was not corrected until a new CEO addressed their cultural problem head on. The company had originally become a dominant force because of service innovation—but slipped from dominance when second generation executives allowed the core-value of service to mutate into a change resistant ideology. Senior management saw themselves as care-takers of a great legacy (aka ideology) rather than values driven leaders charged with helping employees respond to evolving consumer needs. Once Amex clarified core-values and once more started using them to refocus their corporate vision, the arrogance associated with ideological mutation was replaced by customer responsiveness—and a once powerful culture was restored.

by Art McNeil

What’s your end game?  Business owners seldom have an answer to that question—they usually lament about being too busy to even consider possibilities.  It’s an undeniable fact that your game will end.  Will you sell the business…turn it over to the next generation…or perform a daily grind until you die—leaving your family and the government to sort things out?

When transfer time arrives, what will your business be worth?  Ignoring this critical issue means you probably behave like you own your job…not the company.  Unfortunately, potential investors have no interest in buying a job.  The introduction of management and leadership disciplines will make your company more profitable, secure, and valuable—you might even reclaim more of your personal life in the process.

We have entered what futurist David Hule calls “The shift Age.”  The ground is and will continue moving under our feet and there’s no going back.  You were either raised in the industrial age or influenced by people who were.  That makes you vulnerable.  Remnants of that bygone era still exist in many companies—showing up as profit and growth inhibiting attitudes and behavioral patterns that typically exist below the CEOs conscious awareness.  A corporate exorcism may be required to eliminate industrial-age ghosts that are haunting your halls.  While reading the following, think of me as your “corporate exorcist”.

Step #1: Applying leadership discipline:

…starts with clarifying cultural values in a way that generates corporate energy and launches a powerful profit tool that is actually used by everybody. All too often, value efforts regress to become meaningless words stored in desk drawers or on lobby walls.  Values-directed leadership by contrast, inspires people by answering fundamental questions like: what’s special about us, where are we going, what do we believe, how solid is our ethics platform, and what are the performance consequences?  For example, Integrity is a cultural value used by my company.  Its related ethical platform “we never miss a commitment or fail to tell the whole truth” clearly draws a behavioral line in the sand.  What companies say they believe is irrelevant.  True corporate values are expressed by what the CEO tolerates day in and day out.  And they’re on display for everybody to see.

The largest determinant of how employees perform today is their conscious or below conscious expectation of what the future holds in store.  A major problem is that people will not see what they don’t believe.  Subsequently, vision is the future tense of values.  Energy is generated by focusing the company’s vision—but before a critical mass of employees will see possibilities, they must observe from a shared platform of the company’s cultural-values.

Once cultural values have been action-oriented, mastery of two leader skills are essential to keep it going.  The good news is that skills (#1 how to recognize a cultural-values contribution…in a way that inspires, and #2 how to correct problem-performance…in a way that disciplines) can be taught in less than an hour.  The bad news however, is that their ongoing application depends on the CEOs willingness and capacity to hold management toes to the fire.

Step #2: Applying management discipline: (disciplined leadership  is a prerequisite)

…means aligning employees behind the total experience of the customer.  This is accomplished by managing strategic processes rather than departments.  Process autocracy (not the supervisor) tells people what to do.  Personal authority is redirected towards ensuring that tasks are executed properly and that objectives are met.  Management discipline minimizes waste and rework, focuses the sales effort, improves cash flow, establishes meaningful measures, introduces performance consequence, encourages effective hiring and firing, develops the CEOs capacity to forward think, and engages employees in continuous improvement.

During a stint in telecommunications, I was assigned the responsibility of helping executives and senior engineers bridge a huge performance gap as they transitioned from monopoly to a competitive marketplace.  In spite of extensive training, many talented people remained stuck in denial—navigating from a mental map of a world that no longer existed.  The experience taught me that ”knowing is not doing”.

As an executive coach I experience senior team dysfunction—more a norm than the exception.  CEO behavior is often the root cause of problems such as; attachment to the status quo, less than stellar decision making, poor morale, departmental turf wars, CYA defensiveness, and debilitating levels of stress.  Successful CEOs accept a classic line from the comic strip POGO, “we have seen the enemy and he is us.”

In Conclusion:

If you are values directed and have the tenacity to follow process, you can take your company to the next level while at the same time creating transferable wealth.  Before proceeding on such a venture, I strongly recommend that you join a group of non-competing CEOs such as Vistage.  Personal coaching from a trained chairperson (most of whom have been CEOs themselves) and having fellow members hold you accountable for meeting commitments is an invaluable performance enhancer.