By Janna Hoiberg--From my upcoming book:"The Backpacker's Guide To Business Success"

"It isn't what you have or who you are or where you are or what you are doing that makes you happy or unhappy. It is what you think about it." - Dale Carnegie

Curiosity is critical in business. Accepting status quo, what others tell you is right and looking at the world the way everyone else does will and does get you in trouble.

Instead we need to step back and watch a 2 year old. What do they do?

• The explore everything, hold it upside down and look at it in every way possible.

• They challenge what others say and ask WHY? and keep asking WHY?

• “I can do it myself” is their mantra (well maybe we need to moderate that perspective.)

• There is nothing they can’t do in their mind.

• They are ready to take on the world.

Have you lost your natural desire to be curious, ask questions, challenge how others think you should act? If so then stop, slow down and watch a 2 year old. Start exploring your own world. There is so much at our fingertips that passes us by every day.

Curiosity may have killed the cat – but it will grow your business!

Control freak is often an apt description of business owners. We like the ability to control our destiny, make our own decisions and see the impact of what we accomplish. The challenge comes with:

• understanding how little control we actually have – just a perceived control,

• learning how to relinquish control i.e. delegate, for the business to grow and

• how to leverage our controlling nature into something successful.

An employee kept watching how the business was being run, the waste that was taking place within the business, how customers were being treated and the lack of profit being generated by the business. These frustrations led to his determination to start his own business. His premise was he would treat employees much better than his current employer, eliminate the waste taking place, treat his customers better and generate more profit. In essence, he wanted control over the areas his current employer struggled. He accomplished those goals. He learned a number of lessons in the process. These were his and others primary drivers for family business ownership (and possibly entrepreneurship in general). The business owner is tired of:

• Following someone else’s lead/orders

• Believes they can serve the customer better

• Has different ideas on how to implement the product or service

• Desires flexibility in their day to day lives and a stronger balance between work and home and

• Can make more money, i.e. profit

The lessons learned are:

• Their new boss (themselves) is not the wonderful bosses they thought they would be and they have a great deal to learn. Looking in the mirror at the new boss isn’t always a pretty sight. It is the age old statement of “the grass is always greener on the other side of the fence.”

• They can serve the customer better, but it is much harder than they thought and they start to understand their old company better. Customers can and often are demanding. Their interpretation of quality is different than yours. You may see value in something that the customer doesn’t care about.

• They do have different ideas on implementation – some of those ideas work and some don’t

• Flexibility is fantastic – you can work any part of the 24 hours per day that you want. Yes, you do have flexibility to take kids to school, pick them up, go to games etc., but there is a cost and that cost is often working evenings and weekends and other times that you didn’t previously work.

Reality:

What makes great entrepreneurs is the desire for control, but understanding less is more. To have the utmost control, we need to leverage our skills and have others in place to do the work – therefore we stop being the bottleneck to success.

The more we want and think we have control, the less we have. There is always someone else who truly has more control. It might be customers, government, laws, acts of God. It is that desire for control that if not managed well drains the business. Lack of an ability to delegate is the result of the business owners desire to have control. They can do it better than anyone else. We serve the clients better, they know the product better, therefore they don’t delegate. We truly want the control and the ego lift that comes with it. Stop it NOW. Learn to delegate and delegate wisely. 

Marketing without sales is a waste of time and money.  Yet, as a business coach, that is what I see continually in businesses I meet.  The marketing team (even if it is a team of 1) does the marketing activities: advertising, networking, strategic alliances etc.   Yet, when the phone rings does the sales team know how to close the sale?  Statistic indicate that almost 70% of sales are not closed due to the sales person never asking for the sale.  If you don’t ask for the sale, you probably won’t get it.  The sales team needs training.  I have joked that the sales team needs WEEKLY training, only to have sales people agree with me.  It isn’t a joke, train your sales team, train them well and train them often!

Who is your sales team?  My answer – every employee in the company?  Who needs sales training – every employee.  Who is the core sales team?  The team of people who regularly talk, meet with customers and prospects.  That includes receptionists, customer service, Presidents, management etc.  All it takes is one word to make the difference in a sale.

What do you train the sales team on?

1. Conversion rate – The phone rings – a prospect – everyone is excited (or at least they should be).  How do you talk to them?  What questions do you ask PRIOR to your answering their question?  As prospects very few of us really know what we want to purchase.  We just think we know.  If you don’t help to educate us – we will then buy on price.
2. Products – You know your products (or do you).  How do you describe them?  Do you create emotion as you share the value of your product to me?  Do you know how to create emotion for your product?  Does everyone really understand the value of the product?  For 98% of companies I believe the answers to the above questions are no.  Changing those answers will make a difference.
3. Customer – Do you know what the customer wants?  Not what YOU think they want, but what they truly want?
4. Competition – Who are your competitors and how are you different?  Why should they buy from you and not them?  If you are more expensive then why, if you are less expensive – then why.  Know your competition – they probably know you.

Excerpt from "The Backpackers Guide to Business Success".

 When on the trail I am the one that looks ahead.  I am always watching for what is next - looking at the scenery, taking pictures of the flowers.  I love reaching the top.  As I look ahead I see a crowd of people stopping.  There is a flat spot and they are resting.  I get excited - is this the top? Are we really there already?  Now, if I have been checking my map, the compass and the GPS- I will know that we aren't there yet.  Although all the signs confirm that the top hasn't been reached, my heart wishes I was there.  I keep climbing until I reach the spot where everyone else has paused and I confirm again that, no, it isn't the top.  There might be a view; yet I haven't really arrived.

The letdown is brief; the break is short and I continue the climb.  When we are kids we start school at the bottom and, depending on the school, we reach the top at 5th grade only to start a new school. In 6thgrade we are at the bottom again; the process repeats in high school, then college, then your first job, then your second job.  At some point you keep looking out and wonder - is this truly the top and will I ever get there?  If I arrive, how long will I stay?

All too often, I hear excuses for why something did not happen the way it should have. People always search for ways to absolve their guilt by blaming their issues on something else. I have found throughout my career that there are three major categories of excuses:

The “It’s good enough” excuse

This is one of the most common excuses. Someone will do a passable job, scraping by, but quit as soon as possible with the excuse that what they accomplished is good enough. They are not striving for an “A” or for real quality work.  Merely scraping by with a “C” or adequate work is good enough.   However, if you want to make your business truly exceptional, meaningful, a true world-changer, this is not acceptable. You will never get ahead with “good enough”.  Would you yourself do business with just “good enough”?

The “I’m new at this” excuse

Along this same line, people who are new at something feel that they have a right to give themselves a bit of slack. Although there is something to be said for the learning curve, all too often it becomes an excuse to slack off your first few months.  However, the opposite is true; you need to be ready from day one. Otherwise, you get trapped in a cycle where the “I’m new at this” excuse becomes a “good enough” habit.

 The “I didn’t plan for that” excuse

We all have moments that make us go “Oops!” If you have any doubts about that, I have a board game called Leverage to show you. Even though there are some unexpected developments, you cannot simply say “Oh well.” You need a plan B, as well as a Plan C, D, & E. Be prepared for any and all eventualities, because you never know what will happen in the future. An employee may walk out on you, or there may be a sudden shortage of your product. When that happens, what will you do? Seriously think about a variety of scenarios and create plans to put in place before you need them.

Ultimately, complaining about a situation does nothing productive for you or your business. What you need to do is isolate the problem and identify a solution. Don’t waste ages explaining your problems to your friends and colleagues, only to ignore their advice. Instead, get to the root of the problem, follow through with the corrective solution, and move on with your business. The art of self-correction is among one of the most important business lessons you will ever learn.

You started out with a great idea, one that seemed to be desirable by a number of clients, and it paid off.  You truly found what you loved to do and are able to get people to pay you for it!  Congratulations.  Now, how are you going to sustain your business?  You may be fantastic at developing widgets, but how are you at the actual business competencies that will sustain your business over the long run?  

 An October 2012 report on Sustainability and Leadership Competencies for Business Leaders identifies top competencies as follows:

• External awareness and appreciation of trends
• Visioning and strategy formulation
• Risk awareness, assessment, and management
• Stakeholder engagement
• Flexibility and adaptability to change
• Ethics and integrity

 Business owners need to provide themselves with learning opportunities that will strengthen each of these core business competencies.  This education can be accomplished through reading, formal training, or most effective, by utilizing a business mentor or business coach that can hold business owner accountable for actually implementing stainable changes in their company, ones that are customized to meet their company’s specific needs.  However you choose to receive your small business advice and continue your education as a leader, make a plan and follow your plan to ensure you are a perpetual learning leader.

An old adage goes, “Rules are meant to be broken.” In many ways, this is absolutely correct. Simply following the rules, doing the same thing over and over, won’t get you anywhere. Albert Einstein once said, “We cannot solve our problems with the same thinking we used to create them.” Every truly great, major innovation in history has come about as a result of new thinking.

 So let’s say you’ve set up your business, and are doing fairly well. You have a steady stream of revenue, a good customer base, efficient systems in place, and everything is going great. What do you do next? Often, businesses will plateau. They will improve up to a certain point, but things won’t get better from there. Once a plateau is reached, new thinking is required if you want your business to grow-which you should. Now, you should not throw your old playbook out the window, however, change is needed, and in many cases this change is rather unconventional. You need something that sets you apart.

• What could you be doing that none of your competitors are?
• What markets are you not tapping into?

Find that niche, and utilize it. Do something new, something different, and blow everyone away with your creativity and innovation. 
(Picture credit:Freeditigalphoto.com)

The Law of Consistency is the difference between motivation and discipline.

• Motivation is easy to generate.
• Motivation gets you going.

However, what happens when the road gets rough, the rocks get bigger, and fatigue sets in?  That’s where discipline steps in. Without discipline, motivation is useless.

• Consistency becomes a differentiator between winners and those who don’t reach their goal.
• Discipline is the bridge that gets you over the hump to where you want to be.

The Law of the Environment is where your growth happens.

• Growth happens best in conducive surroundings.
• If your surroundings are holding you back, then change them.

It can be as simple as rearranging the furniture or as complex as moving your office. If you live in confusion and chaos then make the changes necessary.  If lack of organization keeps you from moving forward then get help to get organized.  Learn new skills to make the change.

Personal development cannot be in a small-minded environment.  You need to think big and dream big.  Our society creates more negative than positive messages on a daily basis.  The news, the economy, and often our friends and family, will tell us all the reasons we can’t succeed but not the reasons we can succeed.  It is up to you to find fresh thinking, find new things, and create your new environment.

The seventh law is the Law of Design.  To maximize personal growth you must intentionally develop strategies. Think -

Keep the Happy in Your Holidays

[Recently, I discussed taking time out for yourself to relax and take a break (Read: “Seeing the Forest Through the Trees!”). This week, I’d like to elaborate on this topic and incorporate it into the holiday season.]

It’s the most wonderful time of the year! And also the most hustling, bustling, hectic, lose-your-mind-because-you’re-so-crazy-busy time of year. Running a business and making time for festivities and celebrations can be a challenge. In between the potlucks, get-togethers, cookie exchanges, and ugly sweater parties are invoices, year-end financial statements, payroll, budget forecasting, planning and hundreds of other tasks to complete before the new year.

Here are some helpful hints to get you through the season with your sanity intact:

• Maximize Your Time: Each of us has our own rhythm of peaks and lulls throughout the day. Find what times of day work best for you and schedule around them for peak performance. Focus on your most important or most time-consuming tasks during the parts of day when you are most clear thinking, energetic, and decisive. If you work best in the mornings, then maximize that time by waking up earlier. If you work best in the afternoons, then schedule your most important appointments during the lunch hour. If you work best in the evenings, then maximize that time by staying up later.
• When you are setting deadlines for yourself or your clients, build extra time in your schedule to serve as a buffer for unexpected circumstances or tasks taking longer than expected. It’s better to under-promise and over-deliver than to over-promise and under-deliver.
• If you feel that you are already maximizing your time, but still can’t fit in every task, then consider investing some money to hire additional help, for instance a virtual assistant or courier service.
• Schedule in Downtime: Designate specific days and dedicate them for date nights, family time, and days for yourself. Block off these special days in your calendar to visually highlight and distinguish them as scheduled days off.
• Set up an automatic reply on your voicemail and email to inform your clients that you are occupied. For example, “Thank you for contacting me. I am currently out of the office and will return on [day]. I will get back to on [tomorrow, next week, etc.].” And there is nothing wrong with posting a good old-fashioned Do Not Disturb sign on your door!
• Eliminate distractions: Sometimes a small distraction can serve as a mental break, but not if it becomes all consuming—then it’s nothing but a time-waster. Turn off your notifications for email, Internet feeds, and social media updates if you find yourself unable to stay focused on the task at hand. It may even help to completely unplug and keep your computer turned off.

The holidays are meant to be a break from the everyday routine. These are the days when you can focus on spending quality time with the people in your life who matter most. Your time is valuable, and unlike money, you can’t obtain more of it—what you get is what you get! With some proactive planning and time-management, you can enjoy the challenges and rewards of working for yourself AND enjoy the holidays too! And from me it is Merry Christmas to you.

The whole concept of accountability is tainted with misperceptions, frustration and blame.  It is so often someone else’s fault.  Within the family constructs, this dynamic is even more frustrating and brings along tension, “stories of why” and more excuses.

Accountability at its core is “doing what you say you will do, when you say you will do it”.  The foundation lies in the communication cycle and the definition of the deliverable.  Let’s start with the communication cycle and with an example we can all relate to; taking out the trash.  Mary asks Jim to take out the trash before dinner.  Jim says yes.  He knows that dinner is scheduled for 6pm, it is now 4pm.  He will get to it.  Mary however wants the trash taken out now, not in an hour, although she didn’t communicate that specific detail. Mary is also expecting not just the kitchen trash, but the rest of the trash in the house will be collected, since “everyone” knows that the weekly trash pickup is tomorrow morning.  Stress and frustration builds.  Mary doesn’t understand why Jim didn’t do it immediately and why the job wasn’t complete.  Jim doesn’t understand why Mary is suddenly upset.  Sound familiar?  I am sure it does. 

Now apply that same scenario to the work environment.  You may not be asked to take out the trash, however the joy in preforming your duties and the communication concepts are still the same.  Your priorities and that of your co-workers might not always weave together well.  You get the project completed; however it is later than desired and not to the quality expected. Tensions rise, delivery date to the customer is missed, and quality suffers.

What is the solution?   

1. Communicate and Ask Questions – Often lack of accountability comes not from insubordination (if it does, then that is a separate discussion), but from the lack of clarity regarding what needs to be done, when it needs to be done and the specific details.  Too often assumptions are made regarding the individual’s ability to both tackle and complete the task.  One of my friends has been in Information Technology for probably 25 years.  He was asked by his supervisor to conduct a project that was fairly large in scope.  He was more than willing to take on the project; however he had no idea how to start or what to do to accomplish the projected outcomes.  His manager made the assumption that he had actual experience with this type of project in the past and would therefore be successful.   Nothing was further from the truth. 
2. Set Expectations – Set a deadline for when the project needs to be completed, when will you touch base to ensure the project  is proceeding as expected, and how long should it take (this goes to both a time and financial budget).
3. Understand your audience – The question is often asked, “How do you eat an elephant?”  Answer; one bite at a time.  The follow-up to this story, however is that the elephant is still in the room, it is still big and too many people really don’t know how to break that “elephant” down.  We need to take the first bite, yet we don’t know where to start and therefore become paralyzed.  This is where quality leadership and people management makes the difference in success and failure. Good leadership will ensure the person knows what and how to accomplish projects.  For individuals who have delivered consistently and have a proven track record, the job is easier.  For those who haven’t, it’s the leader’s responsibility to guide them along the path.

Consequences

One of the most asked questions during an accountability discussion is what are examples of consequences and how do they get enforced.    Consequences must be appropriate to the situation.  Firing for being late the first time due to a large traffic jam is not appropriate.  Here is a story of a large company that doesn’t have the best reputation for how they treat their employees.  The CEO of the company had stated that employees must be at their desk by 8:00 am.  One day he went to the parking lot of the company at 8:30am and anyone who was just arriving to work was told to go home.  He didn’t even allow them inside the building.  Did he make a point yes, people in this company are to be at work by 8am.  Is this the type of employer I would want to work for – no! 

Yet, I will give him credit for stating the rules for the company and for being willing to stand for what he believes and then enforces the rules.  He also has employees that have worked with him for decades and the company continues to grow and is profitable – so something must be working.

Consistency 

Consistency is critical.  Treating every situation different creates a divisive environment for an organization.  Allowing one person to “get away” with not following procedures, not getting things done etc.,  does more to erode employee morale than the example above where the employer sent everyone home that was late.  They knew his policy, they knew the rules.  They chose to break them, or get away with things, and it didn’t work.

Most companies I work with on this topic find that everyone complains about the lack of accountability.  However, when the organization starts to implement true accountability, people begin to complain about being held accountable.  The reality is that everyone wants it for someone else, but not for themselves.  It is hard to change, yet worth every step.

The choice is yours.  The solution sits in your lap; you can choose to take the challenge of being personally accountable or sit back and complain about the lack of accountability.  What is your choice?

The family business; it’s the foundation of the small business world in the US.  Approximately 80% of small businesses are family owned.  That can mean brothers, sisters, parents, grandparents, aunts, uncles and children.  Why are there so many family owned businesses?  One reason – blood is thicker than water.  There is a trust factor that comes with working with family.  I hear laughter from some of you.  Some of you wouldn’t trust your family with a dollar let alone own a business with them.  While that can be true, the reality is even where the family has a trust and verify.  The family business has a set of dynamics that are unlike any other.  Think of your family – what would it be like to work with them every day?  Then, go home each night.  Now I have you thinking…  Yes, that is the joy and challenge of family business.  It is often hard to:

• “leave it at the office”
• Ensure there is work/family balance
• Handle the up and down times of revenue and profit
• Ignore that irritating habit of the family member when they are always around
• Yet, it is wonderful being able to:
• Share the joys of success
• Have your family understand the business
• Be able to know the “team” members strengths and weaknesses
• Work alongside someone you truly like
• Share ideas and trust them to look out for your well-being.

The list goes on for both sides.  If you are considering starting a family business congratulations – you will love the journey.

What have your experiences been with family businesses?  Are you in one?  Have you done business with one?  Share them with me; I would love to hear the stories.

Conflict is part of everyday life. If you have a business, marriage, or relationship without conflict then you essentially are an ostrich with your head in the sand.  Avoidance of conflict is the equivalent to being a yes man – which means you agree to things even if you don’t agree to avoid conflict – which is in and of itself conflict. One class I would recommend every business owner take is a mediation or conflict resolution class. There are books on the subject. One is “Getting to Yes: Negotiating Agreement Without Giving In” by Roger Fisher. For me it was a hard book to read – but I really enjoyed it on audio. The sooner you learn how to deal with conflict the better off life will be.

Basics are critical. Innovation is paramount.  However, if innovative ideals are built on a rocky foundation, the whole business may fail before you know it. The foundation of your business requires the same structure as the foundation of a building. If the wrong materials, wrong design, and/or wrong measurements have been used, then the foundation will begin to crack under the pressure.

Pressure on a building can be caused by weight, weathering, erosion of the soil and much more. The crumbling of a business can also come from pressure; pressure that is caused from of the growth of the business. Cracking may appear when systems are not in place to handle the growth or changes in the business. How do you know if the basics are failing within your business?

Key Business and Sales Performance Indicators:

• Are your leads increasing or decreasing? If you don’t know then that may be your first sign that the basic foundation has a few cracks.
• Do you measure your closing ratios now vs. a year ago, last quarter, last month? Do you measure them by sales person?
• Are you aware of the origin of each lead that you receive? Was it a referral from a customer, generated by networking, an ad in the paper, pay for click, SEO etc.?

Innovation in your business is paramount. If you have always done something the exact same way, it may be that you need to stop and consider a new way to address the situation. Even a 1 degree difference can make a tremendous difference in the future and especially the profitability of your business.

We are quickly headed into fall which usually creates a time of review for me.  Where has the year gone?  It seems to move faster every year.  Yet it is that review that causes me to stop and ponder a few recent events.

Do you ever get that feeling that just about the time you get it all together, someone comes along side and sort of hits you in the head?  One of my clients had just that thing happen this week.  They were making great strides in their business only to have a key employee decide the grass was greener at another company.  The employee said they didn’t want to leave, but they couldn’t turn down the offer.  Wow, that was the preverbal baseball bat alongside the business head – which feels pretty personal. 

What could have been done to change the outcome?  They tried to create a counter offer.  It didn’t work and often doesn’t.  In many cases, there isn’t anything you can do, yet I am not one to stand by the sidelines and say, “Oh well, nothing to learn here”.  Here is what you can do:

• Talk to your team members, especially those key players and find out what they love and don’t love about working with you.
• Ask key questions:  What would cause you to look elsewhere?  Dangerous you say – yes it is, but not asking can be more dangerous.  Just ask the business owner who just lost a key player.
• Ask yourself – what would you like or dislike about working for you.  i.e., put yourself in their shoes, what do you need to improve in the work environment to keep them?  Make sure that mirror you hold up in front of yourself has been cleaned recently so you see a clear reflection.
• Make sure you do annual reviews, both salary and financial.  Get creative bonus plans.
• Make it a habit to tell your employees, how much you appreciate them, rely on them and wouldn’t want to be without them.  In other words, make sure you verbally communicate the message and when I say regularly, that isn’t once a year, or once a month.

Turnover is hard, yet your attitude is critical in how you weather the crisis.  Know that there is someone else out there who can do the job just as good if not better.  When you find them, determine what you can do to encourage greater job satisfaction and make it happen.

It has been a few years since I traveled on a regular basis for business.  When I changed careers and knew that weekly travel would no longer going to be a part of my weekly routine, I rejoiced.  No more waiting in long lines at the airports, no more issues with security, TSA, or eating airport food.  Forget all those airline delays, joyful flight attendants and endless excuses for flight delays.  Sounds good doesn't it.

Yet, I am now sitting on a plane returning home from pleasure travel and have realized there is one thing I do miss about airline travel.  That uninterrupted time of 3, 4, 5 hours or more where I can unwind, think, read and ponder life.  I have never been one to watch movies while sitting on a plane.  I have always read, completed planning, organized action items or enjoy a nap.

It is this time when nothing else can be done, that I unwind, stop the busyness of just doing things, and ponder what is next.  My pondering from this plane ride resulted in the following wisdom:  I need to start creating more time to ponder, unwind and think.  It is my time away from distractions, of "doing".   Most would describe me as "action oriented" (even my radio show is called "Action in Business with Janna Hoiberg").  I’ve challenged myself to consider, “Does the action of my “doing” get in the way of creative thinking?  Will taking more time to stop and rewind allow me to consider new opportunities, new ways of handling current challenges? I believe it does. 

What do you do to stop, ponder, consider and then create an action plan?  Are you like me - one that has a hard time slowing down?  Or are you one that slows down too easily and has a harder time speeding up and taking action? The later can also benefit from the "plane" time, however from another perspective, that of using the time to focus and make the decisions needed to speed up and make things happen.

For those of us who don't seem to slow down and are often chasing the latest "squirrel" (that new idea that sounds much better than the last one), we need to become more intentional.  We need to walk away from the day to day on a regular basis and get on our "plane", clear our mind, take time to focus and make the changes that will help us achieve our goals (or in some cases create the goals).  For me, it is hour 3 of a 4 hour flight that this pondering popped into my head.  It also happened on the return trip after a weekend away; note that good ideas come most often when the mind and body have relaxed and opens itself to new ideas.  On this flight, I have read 3 newspapers, a book, played some card games, and taken a nap.  It was then and only then that my thoughts could expand and be open to something new.

Now my challenge is to be intentional without physically getting on a plane.  Or, I will just need to take more vacations and embrace something I thought I was happy to leave behind.

In Part IV of this series, we continue our look at some of the major reasons why many family businesses have failed and may fail yet if such issues are not effectively addressed.

We've Always Done It Like This: Failure to Innovate

Sometimes a family company that has enjoyed decades of success feels quite confident in its formula for success, so much so that it may not recognize when change would benefit it immensely.  While some second or third generation owners can't wait to change the running of the business when it becomes theirs, others refuse to do anything differently which, in time, can result in an operation in dire need of an update.  Social media is a good example where some businesses have rushed to take advantage of its platforms while others have ignored these networks to their peril.  Failing to establish an online presence is a conflict that many family-run businesses now face.  Of course, innovation or change takes many forms, but the family business is often challenged to embrace the business need to innovate.

 No Structure, Little Strategy

For some family businesses, the only structure is the family structure.  Perhaps there is one leader or a leading couple--husband and wife or siblings, for example.  Sometimes a business will thrive without a business-type structure for a generation, but often this will change after succession and with the growth of the family.  Without clearly defined roles, problems tend to arise.  Secondly, a lack of long-term strategy is an obstacle for many family businesses.  Is there a five-year plan?  Is there a plan to operate regionally? Globally?  Designing an effective strategy and working towards its business goals is a tenet of many businesses, but one that is often neglected by family-run businesses.

 Every business faces vulnerabilities.  Often the challenges come from the outside such as the economy.  The family owned and operated business comes with a set of challenges, however, that don't typically apply to other types of businesses.  Family firms that are able to successfully navigate these challenges into their third generation, therefore, have much to be proud of--and possibly much to teach other families struggling to keep their businesses afloat.

In Part III of this series, we continue our look at some of the major reasons why many family businesses have failed and may fail yet if such issues are not effectively addressed.

I Love You, You're Hired

Many family business owners simply can't help but hire those family members they love best and provide them with the best roles.  In their vision, the ideal reality is a child that takes the helm after them.  Sometimes the owner's children or other close relatives aren't the best candidates.  Sometimes an owner is persuaded to hire a family member for a certain role that would suit the talent and skills of another far better.  It is often difficult for family business leaders to effectively assess the skills of another family member because they are blinded by love and their own desires regarding the business.

 Conflict and Emotion

In non-family business a work conflict remains a work conflict.  In a family business, a conflict that erupts at work goes home and vice versa.  There is a decided emotional vulnerability that is connected with the family business platform.  There is no way to get away from the boss or people at work when you may live with them or are in close proximity to them.  Many people find this constant connection to family members stifling.  Others cannot recognize the need for boundaries--for giving other family members their personal space even though that separate time could be therapeutic.  Work conflicts, in short, are personal conflicts and nearly always emotional, always threatening the foundation of the business.

In Part II of this series, we continue our look at some of the major reasons why many family businesses have failed and may fail yet if such issues are not effectively addressed.

 Lack of Grooming, Lack of Succession

When the head of the business neglects training someone as a replacement or does not effectively consider a succession plan, a level of business chaos can ensue when the business lands in the lap of the second generation and quite frequently by the third.  Sometimes an owner will simply 'groom' the wrong person, a family member not equipped to manage the business or staff well.

Other times the leader is simply too busy to mentor the second generation in a meaningful way.  The longevity of a family business depends upon effective management training.  Ignoring this aspect can result in the business falling into a family member's hands with no adequate experience for holding the reins.

Non-Family Need Not Apply

Sometimes a family business fails by failing to recognize when it needs to bring in outside help to fill some pivotal role.  Of course, even when someone from the outside fills a pivotal role there may be considerable unease among the other family members who did not sanction the decision to hire from the outside.  It often happens that family members of an existing business do not have the skills or talent needed to move the business forward.  In such cases the business can stagnate while its competitors roll more effectively with the changing times.

Next week: I Love You, You’re Hired

Family owned and operated businesses have been part of the American fabric and are certainly a tradition alive and well in many parts of the world.  Knowledge of merchandise or the skills associated with a particular craft are passed from one generation to the next as the elder generation fosters the younger to ensure continuity and success. While all businesses face obstacles, the family-run business is associated with some unique challenges.  According to the Family Firm Institute, in fact, only about a third of family businesses will thrive under the management of the second generation.  The challenges outlined here are among some of the major reasons why many family businesses have failed and may fail yet if such issues are not effectively addressed.

The Unshared Dream

So often the main issue that a family business faces is that the business is not the family's dream at all but, instead, belongs to just one family member.  For that one member, the business is a dream, a lifelong pursuit, and even a passion.  Yet to other family members, the business may merely be a job--and one they may not especially like.  When the founder relies upon others to share a vision and work ethic they do not have, this tends to erupt into problems.  Sometimes this dilemma can be warded off when the main owner allows other family members authentic ownership of their roles.  People tend to care more about their jobs when they feel safe to emotionally invest in their work.  A tendency to micromanage is almost always a surefire way to alienate other family members, to prevent them from feeling like true stakeholders.

Next week: Lack of Grooming, Lack of Succession

Every manager has experienced the need to fire an employee, and every business owner has experienced the need to fire a vendor.  Most family owned business owners have experienced the desire to fire a family member, and almost everyone who has dealt with an obnoxious customer has experienced the desire to fire that customer.  Yet so often we don’t follow through on the evidence provided, nor the instinct that tells us that this person can only bring a caustic relationship to our business.  We allow the tension to continue to build, often causing our profits to erode and productivity to be impacted.  When is enough, enough?  When should you fire that customer and how do you accomplish the task – professionally?

Before you make a final decision, let’s look at a few aspects of your business that might provide some additional perspective.  The four “M’s” of parting ways with a customer include:

• Mindset
• Mirror
• Measurement
• Movement

Mindset is the foundational issue for almost all relationships with people.  No, not their mindset, yours!  Reflect back in your or your company’s relationship with that specific customer.  Have they been treated (serviced) the way you want your company to be known for treating clients?  Were they treated the way you personally would like to be treated?  Has the client’s issues been clearly heard; or does fear get in the way of your ability to listen to meaning of their explanation, not just the words?  Very often it is our mindset, perceiving what the client knows or experiences, which is the actual stumbling block to delivering that WOW service you expound upon.

Mirror implies a reflection, in this case of oneself. Have we trained our employees to provide the best service possible or are they “mirroring” what they see leadership providing? Once our mindset is open to new perspectives, we can take a more honest look at our business.  In many situations, our worst customer can be converted to our best customer just by listening and understanding where the customer is coming from and making a necessary change that can bring satisfaction.  In a family business, we might find ourselves wanting to fire a family member because of what we “perceive” as their inability to work well with us.  Sometimes this leads to our treating a family member with less respect than we do our employees.   However, if we stop and listen to them, understand issues from their perspective, we may find a resolution that will bring a greater buy-in and respect on both sides.

Measurement of the cost for parting ways with a customer has to be considered.  Is it costing more to keep the customer than to recommend they used someone else?  Does the emotion of dealing with the situation impact all aspects of the business because everyone hates coming to work when that family member or customer is around? Caustic people and situations do leave lasting results if not dealt with in a timely and reflective manner.  The outcomes of what to address and how to address issues needs to be weighed and measured. 

Movement, taking the initiative to take action and make something happen is critical.  Once you have checked your mindset and attitude; you have looked at yourself in the mirror and you have moved by making adjustments in the way you manage people in your business; the next step is addressing challenging behaviors.  If you still have the employee who just doesn’t want to change, the vendor that still doesn’t deliver the quality you expect, or maybe the problem customer continues to verbally abuse everyone they come into contact with in your business, then this is time to actually take the final step.  Fire them, do it professionally, but stop procrastinating.  Everyone; employees, family members, and even other customers will thank you for taking action.  Once you’ve followed through, you will wonder why it took so long for you to actually do it in the first place!