Why most team building fails

August 6, 2012 Leave a comment

The business benefits of having a high performing team cannot be understated. There is immense power in a common purpose, shared goals, clear individual roles, mutual accountability and a strong commitment to each other – just ask Tour De France winner Bradley Wiggins and the increasing number of GB teams that are collecting golds at the Olympics. Yet, in business, the high performing team holy grail is hard to find and to make it worse many people waste a lot of time, effort, money and goodwill along the way.

The phrase “we’re doing some team building” is often met with an audible, or silent, groan. Images of getting drunk with the boss, building rafts, climbing through trees, crawling through the forest and being colour-coded through some psychometric test quickly come to mind . Whilst people might have some fun and good photos in the process the business impact of these types of activities is very much in doubt.

The main thing to realise is that teams form around a specific task. The way that teams need constitute themselves and how individuals need to perform and behave within the group is completely driven by the task. Yet despite this obvious fact, most team building activities that business owners or leaders undertake are abstract and lack any reference or involvement of the business tasks required to be successful. Personal lifelines, psychometrics, trust walks, feedback, etc. are only helpful in the context of enabling the right behaviour required for the task.

It is therefore no surprise that we find that many of our clients’ management teams feel much closer and more able to operate as a team when we have helped them (as a team) to develop their strategic plan for the business and to identify their team priorities.

If you want your team to be a high performing one perhaps you need to get them working on some team tasks that grow the business. Therefore, some questions you might want to ask are:

  • To what extent was/is your team involved in the creation of your strategic plan?
  • What are your team’s common purpose, values and vision?
  • Where are the real opportunities in your business to work as a team?
  • How could you get more from the capability and experience that sits within your team?

Filed under Themes of sustainable success

Growing your business with other people involved

June 21, 2012 Leave a comment

Through our Compass Meeting on 14 June 2012, (Agenda for Compass Meeting #7) and various online discussions, we’ve spent the last two weeks exploring and developing the theme “Two from the top please Carol”. It has been an enlightening and interesting exploration of essentially what is required at the top of a growing SME to make it successful in the long-term.  What seems to have emerged from the discussion are two choices and some tricky middle ground:

  • The original theme highlights one of these – partnership and the ever evolving fusion of two distinctly different but connected parts.
  • The debate put forward the second choice – strong leadership backed up by an employed but committed and empowered management team.
  • And, the conversations unearthed the middle ground – a strong individual trapped between a desire to delegate and a fear to let go.

Partnership in its truest sense

By partnership, we essentially mean two (maybe three) people who provide the ying and yang described in “two from the top please Carol”. Amongst this population we hear some common phrases:

  • “we are not the most natural fit with each other – on paper it shouldn’t work”
  • “I wasn’t sure if I could trust him to begin with but I began to realise that he delivered on what he said he would do and the trust built from there”
  • “sometimes it feels like the staff treat us a bit like mum and dad – going from one to the other until they get what they want – but we’ve learnt to adopt a united front in public and ensure  our strongest debates happen in private”
  • “we are really clear on the goals and the direction – the constructive debate comes in how we get there”
  • “it really is a partnership of equals in every sense – when he says something I know there must be something in it, even if I can’t see it straightaway”
  • “we are very lucky to have found each other”

For this approach: perhaps the greatest strength is someone who is there to bounce ideas off, share the burden and reap the rewards together? And the greatest weakness is the lack of ease with which you can bring others into this dynamic duo environment?

Reflecting on the feel of the partnership, it seems to have an informal and organic nature – a relationship that has developed over time with firm roots that allows it to sway in the breeze.

Strong leadership supported by strong management team

In this scenario the same ying and yang is achieved through different means. There is a clear and strong leader and a loyal serving management team. The leader owns the direction and the vision, management the implementation and resource. The collective of the management team challenges the leader on the direction and vision, whilst the leader holds the management team to account.

Whilst we did not explore this in depth during the conversation, we have previously heard comments like:

  • “it is my business and whilst I am willing to share in the success I am clear that is my business”
  • “we are really clear about roles – the management team know what decisions they are empowered to make and when they need to involve me”
  • “we spend two weeks of the year out of the business developing, agreeing and monitoring our plans to achieve the vision”

For this approach, perhaps the strength is a sense of security and knowing where you stand? And, the weakness that you never fully empower people to take the lead?

Reflecting on the feel of the relationship, there seems to be a stronger sense of formality – structured planning processes, a clear delineation of role descriptions and a team process that works.

Consistent in both worlds

In reality, these two worlds have a subtle difference and essentially achieve the same result. The success of each appears dependent upon some common elements:

  1. Sounding board for leadership – inside or outside the business
  2. Absolute clarity on the future direction and needs of the business
  3. Self-awareness in leadership’s strengths or weaknesses
  4. Willingness to work with people who are better than you
  5. Time to explore and have the debate
  6. Evolving a sense of trust – delivery on promises
  7. Two-way street – the interdependent ability to unlock and work with diverse points of view

Avoiding the trap

During the rewriting of this theme, we were reminded of Katzenbach and Smith’s work on the Wisdom of Teams and their exploration of working group or team.

Perhaps the dangerous middle ground is reflected by an ambitious business owner struggling with the transition of holding individuals accountable for their roles and wanting the team to work together?

As ever with these themes, we often seem to rediscover learning through the ages and apply it to a specific context – after all, two heads are better than one and too many cooks spoil the broth! And, elements of this certainly appear to be reinforced by others.

So, if you are an ambitious business owner looking to grow your business and achieve enduring success, some important questions worth asking are:

  • To what extent do you have ying and yang represented in your business?
  • What are you doing to contribute to (or hinder) a sense of partnership or team?
  • How will you create a strong sense of common purpose, values and vision with the people that are critical to the long-term success of your business?
  • How can you make more of the difference that resides within your partnership or team?
  • Who is your unbiased sounding board?

If this theme, or others have interested you and you would value exploring it further, please do not hesitate to contact us adamcampbell@telospartners.com. For more information, click here.

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Two from the top please Carol

June 8, 2012 3 Comments

The writing of this theme started when we came across a blog of someone who we have worked alongside for the last 8 years . It sparked a thought that we have held for a number of years:

  • Bill Gates and Paul Allen
  • Steve Jobs and Steve Wozniak
  • Bill Hewlett and Dave Packard
  • Richard Branson and Will Whitehorn

It seems that success is quite often a factor of two. So, is it the case that behind every great ambitious business owner is a great number two?

Perhaps, the term number two is less than useful. Perhaps, we are talking about a partnership that essentially is equal, certainly in terms of reciprocal value. Perhaps, it is a partnership with important distinct roles and offerings, yet also a partnership that becomes a powerful whole. Perhaps, it is as much about Ying and Yang; Pilot and Navigator; Morecambe and Wise!

In those businesses that we have observed to go on to great things, these types of partnerships seem to be an important characteristic. Within the partnership there is a level of trust and a clear understanding of confidentiality, which allows the unspeakable to be spoken, pressures to be genuinely shared and offloaded. Importantly, along with support, there is the opportunity to challenge and disagree with mutual respect, attention and a valuing of different perspectives.

In our minds, we often see one as up in the crow’s nest, off visiting foreign lands, experimenting and visioning, whilst the other  is “holding the ground”, covering the bases, running the show.  Perhaps the roles are important, who has which and with what blend less so. If we return to the idea of the Ying and Yang however, we might remind ourselves that at the centre of one shade or texture we find the other. There are distinctions and similarities, overlaps and the ability to operate in both roles and of course, if needs be, take the helm alone.

So, if you are an ambitious business owner and if this type of partnership is fundamental:

  • What does this tell you about your quest for enduring success?
  • If you already have this partnership, what do you need to do to capitalise further on it?
  • To what extent do you both share the same sense of ambition, purpose, values and vision?
  • If you don’t have it, how might you find it?

Perhaps, one final thing to say is that this is not about succession planning – a great number two does not necessarily make a great successor.

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Simply better – hits the nail on the head

March 21, 2012 2 Comments

The post ‘what is unique about being unique?’ was born from our observations of ambitious business owners who create and grow businesses that stand out from the crowd, punch above their weight with larger organisations and grow faster than their peers. On 13 March 2012, our sixth compass meeting for ambitious business owners built upon this theme and explored what you need to do to create such an outstanding business. The conclusion was remarkably simple – be better by:

  1. doing the hard yards by working out what customers really value and are willing to pay for
  2. being passionate about why you want to, and how you can, deliver that value
  3. being focused [obsessed] on delivering that value time and time again
  4. ensuring your marketing and communications clearly and concisely demonstrate all of the above so that you can deliver more of this value to more these types of customers

If you want to create your own outstanding business then the Simon Sinek TED video ‘how great leaders inspire’ seems to be a good place to start and the questions below appear to be important ones to develop answers for.

Enough said, we are off to help more ambitious business owners (as one of our clients said) ‘to chart and to navigate their way to long-term business success’. If you want to find out more about how we can help you to achieve this please contact adamcampbell@telospartners.com.

inside OUT

  1. What problem is your business here to solve?
  2. Why do you want to solve it?
  3. What do you passionately believe in?
  4. What difference do you want to make?

OUT side in

  1. Who are you targeting as your ideal customer?
  2. What problem are you really trying to solve in their eyes?
  3. What do they really value?
  4. What does ‘world class’ delivery of this value look like?
  5. How will they judge success?
  6. How well do you deliver this value?
  7. How could you deliver this more?
  8. How can you do this more consistently?

stand OUT

  1. Who are your real competitors?
  2. How do you stack up against them?
  3. How will you win beat them?
  4. How can you demonstrate that you are better?
  5. What work would you never take on? Why?

OUT standing

In a sentence, describe why your customers will want you and your competitors will fear you

And finally, what can you do for your existing and potential ideal customers to allow them to experience your outstanding business?

For more information please see the attached file for a summary of the conversation.Compass meetings #6 – summary of outputs.

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Getting beyond the point of no return

March 6, 2012 1 Comment

This theme is aimed at those people who are thinking of setting up their own businesses. It begins to explore the things that need to be considered for sustainable success even before the business exists.

I have lost count of the number people I have spoken to who, early on in the conversation, say ‘I’ve been thinking of going into business myself’ or ‘I’ve just started a business with a friend’ or ‘I’d like to start my own business’. For the majority that I meet, I get an overwhelming sense that it is never going to happen. It might be in their tone of voice, the look in their eye or the way they ramble on about the business idea, but, I just can’t help but think it is never going to happen. And, for those people that I have kept in touch with, I can’t think of any of them who have gone on to really do it. They might start a business, they might even do some business, but, eventually the thought, idea or dream slips away “well at least I gave it a go!”

On rare occasions, I meet someone who I really believe. Somehow, you just know it is going to happen. And sure enough – it does! I have often wondered what lies within this difference and in my occasional moments of reflection, three phrases spring to mind: moments of commitment; opening up options; and, getting beyond the point of no return.

When setting up a business, you will face many moments of commitment – consider them hurdles. These hurdles vary in height and difficulty. They might include a lack of full (or perceived) support from your partner/spouse, through to, obtaining funds to take your idea to market. Those business owners who go on to great things, seem to find ways to use these hurdles to fuel their business idea and ambition “each time I heard the word ‘no’ it made me more determined to make it happen”. Whilst, those whose ideas and business that fell by the way side saw these hurdles as an ever increasing size ‘I’ve worked out that I now need to raise £5m to get this off the ground’.

In addition to this, there seems to be something important in the way that successful business owners go about this exploratory phase. Let me give you a very simple example. It comes from how two close friends (both now running successful businesses in their own right) went about choosing a name for each of their businesses. Both of them were able to describe what they wanted the business to stand for. Both of them knew the gap they wanted to fill in the market place. Both of them used people outside of the business to come up with a name. Both of them tested these names with lots of people. Both of them ended up with a very clear favourite that they felt described what they wanted the business to truly stand for.

Successful business owners seem to open up options. They have a core idea that they want to test and evolve. They know what it is but they can’t really describe it. They take this idea and throw it open to other people. They are willing to gather other people’s ideas/thoughts and explore all possible options – before closing things down and focusing back on their core goals. It is a process that they adopt for many aspects of the business before it even starts. From the business structure, through financing and even taking on employees, they invite people into their challenge.

Compare this to the others who don’t make it (including myself on a couple of occasions!). They have an idea, think of a name, start a business to register the name, and start saying ‘I’ve got my own XXX business’ or ‘I am opening up a XXX’. They close down options and almost become protective of their original idea. They lack the confidence to take on board alternative points of view. Consequently, they don’t find alternative routes over, through or around the hurdles.

Perhaps these initial two aspects of this theme are about people dipping a toe in the inviting, but freezing, crystal blue waters of a swimming pool on a baking hot day. However, if you want to go swimming, at some point you have to commit fully, you have to immerse yourself in those icy wateres and have your breath taken away.

It is your final moment of commitment – it is the point at which you have to get beyond the point of no return. ‘I’ve told so many people what I am doing, I’ve got so many people interested in the results, that I really have no choice but to make it work – I will feel a failure if I don’t do it’.

Below are some phrases or thoughts that I might expect to hear from someone who is truly ready to start their own business. They are indicative rather than exhaustive or exclusive. I am sure many business owners have started businesses without doing this, but I am convinced that those that went onto greater things got to this point (or an equivalent) first.

I feel that I have no other choice but to do this myself

  • I have tested my business idea with lots of people, taken on board their critical feedback and it has heightened my belief that I have to do this now
  • I have a written this down in a plan for the business and have set out some financial targets
  • I have thought deeply about the business name, I have tested lots of different names and chosen a name that truly highlights the nature and ethos of the business
  • I have thought deeply about the business structure and governance and I am sure that this will allow me to explore future avenues for growth
  • I have enough money in place to fund the first 12 months of the business
  • I know that it might take longer than I want and that it will be harder than I think but I feel ready to take on the challenge
  • I have a clear action plan for the first 6 months of the business
  • I have sufficient access to the right advice and support

To summarise, I’d like to use the analogy of a magnetic attraction. The more that a successful business owner gets into the detail, the greater is the level of attraction. Eventually, the attraction becomes so strong that the two entities (business owner and business) can’t help but stick together. Whilst with the others, the experience is much more like magnetic repulsion. The more you pushed them towards their idea the greater the desire they had to move away from it!

So if you are thinking of setting up your own business, what are you doing to increase your sense of attraction to your business idea? Some additional questions worth considering:

  • What are my possible routes for exit?
  • How does the ownership structure of my business enable or inhibit these routes?
  • If you are considering working in partnership with someone, what difficult conversations have you not yet had?
  • What stepping stones can I create to eliminate some of the risks or accelerate my progress?
  • What skills, capabilities or people do I need in order to give my business the greatest possible chances of success?
  • What will attract them to the business?
  • What are you willing to give up in return for their contribution?
  • How will you create a business that stands out in your market place? (click here for more information)

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What is unique about being unique?

February 10, 2012 1 Comment

Recently, I was privileged enough to be invited to form part of a panel of ‘so called experts’. It is not my preferred way of engaging with business owners, large-scale talks tend to have a limited long-term impact, but I was honoured to have been asked.

We were speaking to expectant business owners at a Fitness Industry convention, the dawn of the ‘budget club’ had well and truly arrived. Having spent years competing with national operators, the 150, or so, people in the audience now faced a real challenge ‘if I can’t compete on facilities and I can’t compete on price, what can I do?!’

Each esteemed and, might I say, carefully selected expert had been asked to prepare a 3-minute introduction to kick-off the discussion. I spent hours preparing mine, well, most of the two hour train journey to the NEC. Imparting my ‘distilled wisdom and simple truths’ I found myself telling the audience ‘you have a fantastic opportunity to compete and carve out your niche in your market place’ – I made a strong emphasis on your to infer that they were in charge of their own destiny. I went to summarise my key lessons as ‘be unique, target your customers and make it easy for them to buy’ And, using their own language, so did pretty much every other panellist. In fact, three of us had made reference to the parallels of going fishing… not much uniqueness in that!

Perhaps the consistency of the message is important – there are no silver bullets – but it got me thinking. What is unique about unique? What do we mean by real difference? What are the implications for the long-term (as well as the short-term) success of your business?

Many business owners start a business because: they intuitively feel there is a gap in the market ‘I couldn’t get what I wanted, so I started a business myself’; or they believe ‘I could do a better job and make more money, if I left this company and did it myself’. The driving force to do it is emotive and strong, often a massive sense of dissatisfaction with the status quo. In their heads they can see it and define it, but articulating it and communicating it is a real challenge. Over a period of time, they develop smart and complicated answers to a question that they often get asked ‘what do you do?’ But ‘people never quite get it’ and the more that this happens the more they take on whatever work they can get for whatever the price – bang goes their uniqueness.

Instead of trying to be unique, perhaps the question ambitious business owners should be asking themselves is how to create an outstanding business? Creating a business that stands out from the outside in and the inside out. It is the obsessive pursuit for the alignment of business purpose and values and the delivery of the customer experience that successful business owners appear to focus on.

What seems to be required are some different questions:

From the inside OUT

  • What problem are you really trying to solve?
  • Why are you trying to solve it?
  • What do you really believe in?
  • What difference do you want to make?
  • What capability, knowledge, relationships or experience do you have that no-one else can replicate?
To being OUT standing
  • Who are you targeting as your ideal customer?
  • What do they really value? What problem are you really trying to solve in their eyes?
  • How will they judge success? What does ‘world class’ of delivery of this value look like?
  • How well do you deliver this value? How could you deliver this more?
To standing OUT
  • Who are your real competitors?
  • How do you stack up against them? How will you win?
  • How can you demonstrate that you are better?
  • What work would you never take on? Why?
Back to OUT side in
  • In a sentence describe why your customers will want you and your competitors will fear you
  • What can you do for your existing and potential ideal customers to allow them to experience your outstanding business?

If you want a different take on the same subject please look at this video.

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Managing a cash flow crisis

January 11, 2012 4 Comments

With tough trading conditions many people are facing a cash flow crisis and some tough decisions. Here are some insights that we have gained over the years.

At some point during your journey as an ambitious business owner, you will face a cash flow crisis.  In the heat of battle and when the chips are down, it is very difficult to keep your head and do what is really needed. With this in mind, here are some quick tips on what to do:

Look for it coming

If you have the slightest nagging doubt, rather than bury your head in the sand do some proper planning and forecasting. Ideally, this will be a regular finance function within your business – a leading indicator that warns you of rough seas ahead. If you don’t have it in place, now is the time to lay down the future foundations. What is your sales forecast? When will these sales be realised as cash? What invoices / payments are due? What is the actual shortfall of cash that you face?

You want an honest and real picture. Look for the worst case scenario. Don’t count on ‘possible’ or ‘maybe’. If they do happen to come in, it will be a bonus.

Collect what you are owed

In the heat of the moment, most people focus on getting new sales in and forget to collect what is owed to them. Are you doing all that you can? Has everything that you have delivered been invoiced? Has every invoice been paid? Who in your team is on top of this and making sure that it happens? Get in touch with your debtors, find out what is happening, check if everything is in place for the payment to be made, and then be fair but firm on obtaining the payment. Most people value an honest and adult conversation. Sometimes this can reveal the most astonishing and silliest things that are stopping payment.

If things are difficult for your customers, consider a payment spread. It is better to get some in now (and the rest later) than not at all. Consider adding interest but never discount.

Complete a robust review of your sales pipeline

Take a moment to step back and prioritise your sales activity. What does your sales pipeline really look like? What can be done to bring more in, earlier on? Most of the time, it is people that you already know who are going to give you sales in the short-term.

A few extra sales can be worth vastly more than even the keenest cost-cutting – though a bit of both doesn’t go a miss.

Step back and review the whole picture

Now you have taken initial action, step back and consider the root cause of your problem. Challenge your perceptions, get perspective and consider your motivations and impact.

What is the real cause for your cash flow crisis? What has led you to this situation? What is your contribution to the current picture? What is the one thing that is required to enable the sustained success of your business?

Spend what time and money you do have on the right things

Now you have established the root cause look at where you are spending your time and money? Are you spending it on the right things? Is it getting the results that you want? What needs to be done to address the balance? Where must you spend time/money to give yourself a future? Where can you save time/money? Where must you stop spending time/money?

Look for the opportunity

Once you have done all of this. Take another step back and look for the real opportunity. Crisis is often a stimulus for growth and a chance to leap on to a new curve. What have you been avoiding in the hope it would sort itself out? What can you learn about your desires, values and ambition? What changes in your business can this enable? What does this tell you about your future focus?

Make the decision that you need to make

Now you can make the decision that you need to make. What is the difference that will make the difference?

Communicate, communicate, communicate (internal and external)

It is better to be on the front foot with communication than on the back foot. Share people your view of the world but involve them in the creation of a solution.

Internally, engage their hearts and their brains in the process you are going through and the answers that you are developing. If you can’t tell them what will happen, tell them what they need to focus on and what they can influence now. Provide a shot of reality with a dose of optimism and direction.

Externally, plan for and have  ‘adult conversations’- do your homework, be clear on what you want from each conversation, present a clear picture of reality, have some suggestions/solutions up your sleeve, ask them for their ideas and remain focused on the outcome that you want to achieve.

Share the load / burden

As the business owner you are most likely to feel obliged to put other people first, make sure you have an outlet for yourself. Find someone who is outside the problem and with whom you can ‘speak the unspeakable’ and who can help you see the wood for the trees.

Embed the learning

Once you have seen it through, make sure you embed the learning in your processes and behaviours going forward. Financial discipline, prudence and planning is a key element for sustained success. Get yourself some early warning systems.

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Building resilience to crises

December 6, 2011 1 Comment

For many ambitious owner managers, crisis is a stimulus for change and growth. For some, crisis may be too strong a word. For others, it may describe exactly how it felt.

“We turned up to work that morning and had a choice to make. Do we give in and close the business? Or, do we make the tough decisions and see what we can rescue? We went for the latter.”

“The (then) FD told me that we were insolvent. He was wrong. He didn’t understand our business model (that is why he is the then FD!) It was a real shock to the system.  I knew we had to do things differently.”

“We nearly went bust in 2002/3. In 2007/08 we posted a profit of £7m.”

“Crisis forced me into making moves. Sometimes you need a push – redundancy is a strong driver!”

Crises in business appear inevitable. In 1972, Larry Greiner defined his Growth Model consisting of periods of relatively stable growth followed by a ‘crisis’ – where major change is needed if the company is to carry on growing.

Whilst these crises hold the potential to provide significant learning and the stimulus for growth, they can also break the business. So how can our knowledge of them drive sustainable success?

If a smaller, growing business is to be sustainable, it has to build resilience to crises. What appears fundamental is the ability to take early action – a phrase that we’ve come to know as ‘confronting the brutal facts’. However, to confront these facts, you first have to see and to accept them.

For some, the signs of crises were clear but they just didn’t follow through: “I wish I had trusted my gut more – no advisor has been as good as my own instinct”. For others, they are lacking information and carrying on blissfully unaware: “it wasn’t until I went on a finance course and had to look through my accounts that I realised that we were on the edge of going under”.

Given that this is the case, some key questions worth asking are:

  • What are you doing to build your personal and business resilience to ‘crises’?
  • What have you learnt from your previous ‘crises’?
  • How have you used them to stimulate progress within your business?
  • What is the next potential ‘crisis’ within your business?
  • What are the signs and symptoms and how are you measuring them?
  • What is your ‘gut’ telling you about your business?
  • What brutal facts do you need to confront?
  • What early action are you taking?

Compass meeting # 2 – building resilience to crises

Filed under Business Growth Networks, Themes of sustainable success

Creating options for successful exit

December 6, 2011 2 Comments

All business owners dream of exiting their business. The timeframe for the occurrence of this dream tends to differ from one owner to the next. For some, it is before the business exists. For others it is the result of conversations with other business owners who have managed to ‘realise the value’ of their businesses. For those remaining, it is normally the result of years of draining hard work and the desire to create a different, alternative life – quite frequently labelled ‘retirement’ – not that they actually go on to retire!

Whilst the dream is enticing, the reality of exiting the business is a somewhat difference experience.

Imagine, that you have worked your whole life to develop something then all of a sudden the moment comes, the sale is agreed and the business is no longer yours. You feel a sense of achievement, a moment of relief, but the business still feels like yours.

The new owners arrive. You may have an earn-out clause as part of the deal or, you may just be keeping in touch with the people in the business. Very soon, you start to feel “a real sense of loss”, “guilty that I’ve let the people in the business down”, “annoyed that the new owners want me to report on my business progress” or, “regretful that the new owners are destroying the very business I’ve spent my life creating”.

Eventually, the owner leaves the business fully, with a sense of remorse, a sense of unfinished business and a sense of bewilderment that results in some serious soul searching – “what do I do next?”. Frequently, they go on to invest their new found wealth in fresh ventures or younger, more energetic, ambitious entrepreneurs.

Meanwhile, on the other side of the fence, the new owner of the business is often left wondering “how am I going to realise value from this business”, “the people have too much loyalty to the owner”, “the owner is becoming an obstacle to growing the business”, “can’t they see the potential for growth that we can?” and, “there are a few more problems here than we realised”. Soon the ‘fixers’ descend upon the business and implement the ways of the new world, casting aside all reminders of the past. People leave. Those who remain hanker after ‘the good old days’.

Of course, all business sales are not the same. Not all have the same drivers. Not all have the same business model. Not all have the same personalities involved. Not all are extremely felt as those described above. However, those that go better than others do seem to have some consistent themes:

  • It allows the owner to realise an appropriate amount of value
  • Selling the business better allows the business to fulfil its founding principles – it is the right time to sell
  • Time is spent co-creating a new future for the business
  • The original identity of the business is nurtured and evolved rather than destroyed
  • Time is spent on engaging people in both businesses during and after the acquisition
  • The integration is viewed from a long-term perspective
  • The seller plays an important role in the transition of leadership
  • The original owner is supported in discovering a new role/life for themselves

Given this, some important questions to ask might be:

  • What type of ownership/leadership does your business now require to fulfil its purpose?
  • Rather than investing in them when you have sold, how might your business benefit from bringing in fresh entrepreneurial energy now?
  • What are your criteria for an ‘ideal buyer’?
  • What would you actually do if you left your business? No really, what would you DO?
  • How will you ensure you maintain ambition and drive during an earn-out period?
  • How would you avoid developing sense of seller’s remorse?
  • What would you do to work with the new owners to nurture and evolve the identity of the business?
  • How would you work with the new owners to create a new direction and future for the business (in a way that you couldn’t do before)?
  • How would you support the people in the business ahead of/during the sale so that they could be successful in the new organisation?
  • What role will you play in the transition of leadership?

Compass meeting # 4 – creating options for successful exit

Filed under Business Growth Networks, Themes of sustainable success

Entrepreneur as leader

December 6, 2011 4 Comments

At a recent workshop, a room of business owners were asked, ‘do any of you know what your role is?’ The room was filled with an awkward silence. The silence you get when you realise a good question has been asked by mistake. The silence that fills the person being asked with a mild sense of panic – a realisation that they should be able to provide the answer! After a few moments, someone replied “deal with all the c**p that my staff leave me with!”

What is the role of the business owner? Or, more specifically, how do they make the transition of entrepreneur to business leader?

It goes without saying that the energy needed to start up a business is not the same as the energy required to lead a growing business. One requires a ‘just do it’ mentality, whilst the other requires a whole lot of stuff and patience that many business owners often struggle to deal with. “If I am not doing ‘stuff’, then what is my role?”

To answer this question, we often find ourselves exploring the functions of leadership (referred to in the book Reflections and Challenges – see http://www.telospartners.com/index/reflections.php).

Those business owners who we have observed take significant leaps forward seem to have a canny knack of ‘managing the present’. They do it in a way that allows them to work and provide clarity on ‘creating the future’ and ‘nurturing identity’. “Some of the most valuable time I spend in my business is staring at a blank wall. It is then that my thoughts and ideas crystallise.”

Without doubt, the transition towards business leader moves the business forward – “each time I have let go of stuff, to focus on where I can add real value, the business has jumped to the next level”. It is a transition that has real challenge – “the reason I set up the business – autonomy and control – is the very reason I find it difficult to let go of stuff”. It is a transition that requires a certain leap of faith – “I wish I had managed to trust my team sooner”. It is a transition that is particularly challenging when family is involved – ask any son or daughter who has taken over the business from their mother or father.

The transition appears easiest in those businesses that have a clear plan for the founder to exit the business: “I realised I needed to manage my exit”. And, in planning this exit, they aim to create, to build and to sustain a legacy that lasts beyond the founder.

To do this requires a need to “be bolder about paying for and hiring in the best talent available”; “build a team with everyone on the bus doing the right roles without pandering to individual wants and needs – a clear focus on the ambition and the vision”; “find a way to articulate your vision and values and get your team to develop and create a strong brand together”; “focus, focus, focus – ask the right questions of those who want to help you”.

And of course, to do this requires a need for the founder to behave differently themselves: “entrepreneurs must be confident to lead the business and not so confident that they can’t ask for help and stand in the way of success.”

It is important to note that exit doesn’t always mean sell. On a number of occasions, we have observed entrepreneurs suffering from ‘seller’s remorse’ – a sense of loss and regret that has occurred once the business has been ‘taken away’ from them. Perhaps this a sign that they have not properly thought through the process of ‘passing on’ the business – an insight that we may find develops further with time.

In the pursuit of sustainable success there is a need to think about passing on the business. Given this, some key questions worth asking are:

  • What does exit mean to you?
  • What heritage are you trying to create?
  • What role does your business require you to play (now and when you exit)?
  • What is the real value that you can add to the business?
  • What do you need to do differently to perform this role?
  • Who are your potential successors?
  • What are you doing to develop them further?
  • How will you manage the transition?

For more information, please review the discussion of our compass meeting # 3 Entrepreneur as leader

Filed under Business Growth Networks, Themes of sustainable success

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