Wednesday, December 24, 2008
Merry Christmas. Yes we say Merry Christmas
Merry Christmas. To my thousands of readers and followers. What a year. I would call it a good year not a great year. However, it could have been a lot worse except for my portfolio. I talked to my Broker this morning (he is also my nephew) and he informed me that my investments had increased by $14 in the last 30 days. Now I can retire.
Wednesday, December 17, 2008
Number 6 and you thought I forgot.
6. Progressively increase their responsibility until you name them President and COO. You remain Chairman and CEO until you retire. When you do this, be there to help not direct and let them lead no matter how hard it is.
Even after you have given them the title, the heir apparent should be responsible for specific things with enough responsibility and authority to make a difference yet be accountable to you and others until you see them in action. This includes being involved in Marketing Plans, Sales Initiatives, your outside council, your outside CPA and your insurance broker(s). Other than day-to-day decisions, they should not unilaterally make decisions without discussion with your team. Obviously, you and the heir apparent can, probably decide anything. However, it is always advisable to "seek the council of the wise" prior to making major, life changing decisions.
When you decide the time is right for them to assume the throne, do it right. Don't just say that you are no longer the President (or whatever). Do what you would do if you hired someone. Give them credit for a job well done, write a letter to "All Employees" announcing the change and don't joke about it. People will take it as seriously as you present it. By the way, the heir apparent will appreciate being treated as a top manager not as your relative.
That's what I think. What do you think?
ps: My wife says that I do not always have good grammer and spelling. I think I am perfect. What do you think?
Even after you have given them the title, the heir apparent should be responsible for specific things with enough responsibility and authority to make a difference yet be accountable to you and others until you see them in action. This includes being involved in Marketing Plans, Sales Initiatives, your outside council, your outside CPA and your insurance broker(s). Other than day-to-day decisions, they should not unilaterally make decisions without discussion with your team. Obviously, you and the heir apparent can, probably decide anything. However, it is always advisable to "seek the council of the wise" prior to making major, life changing decisions.
When you decide the time is right for them to assume the throne, do it right. Don't just say that you are no longer the President (or whatever). Do what you would do if you hired someone. Give them credit for a job well done, write a letter to "All Employees" announcing the change and don't joke about it. People will take it as seriously as you present it. By the way, the heir apparent will appreciate being treated as a top manager not as your relative.
That's what I think. What do you think?
ps: My wife says that I do not always have good grammer and spelling. I think I am perfect. What do you think?
Friday, December 5, 2008
The Auto Makers Bailout AGAIN!
Yesterday and today, I took a little while to listen to the automakers present their case for a "bailout". I thought that they were especially forthcoming and to the point........this time! You remember the boondoggle of arriving in Washington with hat in hand after having flown in on their private jets. I agree that was pretty dumb, they should have "jetpooled" I guess. The bigger deal though is the need to ask for money. I do not believe it especially given their propensity to largess. Let them go into Chapter 13 and reorganize.
What was more interesting was the incredibly stupid questions from the Senators and Congresspeople most of whom have not one minute of business experience. A few did, but not many. One of the interesting points was that Senator Dodd had met with a large number of car dealers ( I think 300) in Connecticut prior to the sessions this week. Smart. He found out what the car makers were telling them was true. NO ONE IS BUYING!!!! Even with outrageous incentives, no one is buying except that few people in the country can get a Dodge Charger. There is a waiting list. Why are they not buying. It is an amazing and mind boggling problem and reason for not buying. THEY DO NOT HAVE ANY MONEY AND CANNOT GET ANY!
Another case for the bailout might be that with gas prices coming down, people may soon begin to buy cars too. That is true in my view. One of the main keys to economic recovery is 'REASONABLE" gas prices. Next, stop all the government involvement except for interest rates. Rates are low, but banks aren't lending or at least they are not lending to normal people. Typical banking, if you do not need the money, the banks will lend it to you. They frown on people borrowing because they need to!!
What do you think.
What was more interesting was the incredibly stupid questions from the Senators and Congresspeople most of whom have not one minute of business experience. A few did, but not many. One of the interesting points was that Senator Dodd had met with a large number of car dealers ( I think 300) in Connecticut prior to the sessions this week. Smart. He found out what the car makers were telling them was true. NO ONE IS BUYING!!!! Even with outrageous incentives, no one is buying except that few people in the country can get a Dodge Charger. There is a waiting list. Why are they not buying. It is an amazing and mind boggling problem and reason for not buying. THEY DO NOT HAVE ANY MONEY AND CANNOT GET ANY!
Another case for the bailout might be that with gas prices coming down, people may soon begin to buy cars too. That is true in my view. One of the main keys to economic recovery is 'REASONABLE" gas prices. Next, stop all the government involvement except for interest rates. Rates are low, but banks aren't lending or at least they are not lending to normal people. Typical banking, if you do not need the money, the banks will lend it to you. They frown on people borrowing because they need to!!
What do you think.
Wednesday, December 3, 2008
A Different Christmas Poem
I really do not have anything to add to this but to say God Bless America and God Bless our troops.
The embers glowed softly, and in their dim light, I gazed round the room and I cherished the sight. My wife was asleep, her head on my chest, My daughter beside me, angelic in rest. Outside the snow fell, a blanket of white, Transforming the yard to a winter delight.
The sparkling lights in the tree I believe, Completed the magic that was Christmas Eve. My eyelids were heavy, my breathing was deep, Secure and surrounded by love I would sleep. In perfect contentment, or so it would seem, So I slumbered, perhaps I started to dream.
The sound wasn't loud, and it wasn't too near, But I opened my eyes when it tickled my ear. Perhaps just a cough, I didn't quite know, Then the sure sound of footsteps outside in the snow. My soul gave a tremble, I struggled to hear, And I crept to the door just to see who was near.
Standing out in the cold and the dark of the night, A lone figure stood, his face weary and tight. A soldier, I puzzled, some twenty years old, Perhaps a Marine, huddled here in the cold. Alone in the dark, he looked up and smiled, Standing watch over me, and my wife and my child.
"What are you doing?" I asked without fear, "Come in this moment, it's freezing out here! Put down your pack, brush the snow from your sleeve, You should be at home on a cold Christmas Eve!" For barely a moment I saw his eyes shift, Away from the cold and the snow blown in drifts..
To the window that danced with a warm fire's light Then he sighed and he said "Its really all right, I'm out here by choice. I'm here every night." "It's my duty to stand at the front of the line, That separates you from the darkest of times.
No one had to ask or beg or implore me, I'm proud to stand here like my fathers before me. My Gramps died at ' Pearl on a day in December," Then he sighed, "That's a Christmas 'Gram always remembers." My dad stood his watch in the jungles of ' Nam ', And now it is my turn and so, here I am.
I've not seen my own son in more than a while, But my wife sends me pictures, he's sure got her smile. Then he bent and he carefully pulled from his bag, The red, white, and blue... an American flag. I can live through the cold and the being alone, Away from my family, my house and my home.
I can stand at my post through the rain and the sleet, I can sleep in a foxhole with little to eat. I can carry the weight of killing another, Or lay down my life with my sister and brother. Who stand at the front against any and all, To ensure for all time that this flag will not fall."
" So go back inside," he said, "harbor no fright, Your family is waiting and I'll be all right." "But isn't there something I can do, at the least, "Give you money," I asked, "or prepare you a feast? It seems all too little for all that you've done, For being away from your wife and your son."
Then his eye welled a tear that held no regret, "Just tell us you love us, and never forget. To fight for our rights back at home while we're gone, To stand your own watch, no matter how long. For when we come home, either standing or dead, To know you remember we fought and we bled. Is payment enough, and with that we will trust, That we mattered to you as you mattered to us." PLEASE, would you do me the kind favor of sending this to as many people as you can? Christmas will be coming soon and some credit is due to our U.S service men and women for our being able to celebrate these festivities. Let's try in this small way to pay a tiny bit of what we owe. Make people stop and think of our heroes, living and dead, who sacrificed themselves for us.
LCDR Jeff Giles, SC, USN 30th Naval Construction Regiment OIC, Logistics Cell One Al Taqqadum, Iraq
By the way, we say Merry Christmas and we celebrate the birth of our Lord and Saviour Jesus Christ. If you do not know Jesus as Lord, I would invite you to comment to this blog post and give me a way to contact you and I will be happy to explain how you can have eternal life in Jesus Christ.
What do you think?
The embers glowed softly, and in their dim light, I gazed round the room and I cherished the sight. My wife was asleep, her head on my chest, My daughter beside me, angelic in rest. Outside the snow fell, a blanket of white, Transforming the yard to a winter delight.
The sparkling lights in the tree I believe, Completed the magic that was Christmas Eve. My eyelids were heavy, my breathing was deep, Secure and surrounded by love I would sleep. In perfect contentment, or so it would seem, So I slumbered, perhaps I started to dream.
The sound wasn't loud, and it wasn't too near, But I opened my eyes when it tickled my ear. Perhaps just a cough, I didn't quite know, Then the sure sound of footsteps outside in the snow. My soul gave a tremble, I struggled to hear, And I crept to the door just to see who was near.
Standing out in the cold and the dark of the night, A lone figure stood, his face weary and tight. A soldier, I puzzled, some twenty years old, Perhaps a Marine, huddled here in the cold. Alone in the dark, he looked up and smiled, Standing watch over me, and my wife and my child.
"What are you doing?" I asked without fear, "Come in this moment, it's freezing out here! Put down your pack, brush the snow from your sleeve, You should be at home on a cold Christmas Eve!" For barely a moment I saw his eyes shift, Away from the cold and the snow blown in drifts..
To the window that danced with a warm fire's light Then he sighed and he said "Its really all right, I'm out here by choice. I'm here every night." "It's my duty to stand at the front of the line, That separates you from the darkest of times.
No one had to ask or beg or implore me, I'm proud to stand here like my fathers before me. My Gramps died at ' Pearl on a day in December," Then he sighed, "That's a Christmas 'Gram always remembers." My dad stood his watch in the jungles of ' Nam ', And now it is my turn and so, here I am.
I've not seen my own son in more than a while, But my wife sends me pictures, he's sure got her smile. Then he bent and he carefully pulled from his bag, The red, white, and blue... an American flag. I can live through the cold and the being alone, Away from my family, my house and my home.
I can stand at my post through the rain and the sleet, I can sleep in a foxhole with little to eat. I can carry the weight of killing another, Or lay down my life with my sister and brother. Who stand at the front against any and all, To ensure for all time that this flag will not fall."
" So go back inside," he said, "harbor no fright, Your family is waiting and I'll be all right." "But isn't there something I can do, at the least, "Give you money," I asked, "or prepare you a feast? It seems all too little for all that you've done, For being away from your wife and your son."
Then his eye welled a tear that held no regret, "Just tell us you love us, and never forget. To fight for our rights back at home while we're gone, To stand your own watch, no matter how long. For when we come home, either standing or dead, To know you remember we fought and we bled. Is payment enough, and with that we will trust, That we mattered to you as you mattered to us." PLEASE, would you do me the kind favor of sending this to as many people as you can? Christmas will be coming soon and some credit is due to our U.S service men and women for our being able to celebrate these festivities. Let's try in this small way to pay a tiny bit of what we owe. Make people stop and think of our heroes, living and dead, who sacrificed themselves for us.
LCDR Jeff Giles, SC, USN 30th Naval Construction Regiment OIC, Logistics Cell One Al Taqqadum, Iraq
By the way, we say Merry Christmas and we celebrate the birth of our Lord and Saviour Jesus Christ. If you do not know Jesus as Lord, I would invite you to comment to this blog post and give me a way to contact you and I will be happy to explain how you can have eternal life in Jesus Christ.
What do you think?
Thursday, November 20, 2008
The Auto Companies Bailout
RIDICULOUS!! Just like the AIG and Wall Street, this is crazy. LET THEM FAIL or go into Bankruptcy. That is what it is for.....REORGANIZATION. Now for those of you who think that I just do not understand how the big guys work since most of my career has been helping the little guys, the principles are the same. They are out of touch with reality, they are in cahoots with the UAW and they think they are above the law (law of supply and demand). Rubbish. The principles of honesty, integrity, less is better and a living wage still apply.
Here is what should happen:
1. The regular, hourly employees make too much. Their wages are far higher than average America. Do not cut their wages but FREEZE them for at least three years. If the UAW won't go along, let the workers vote to keep their jobs or not.
2. Simultaneously, stop making cars so fast. Either slow the line down and/or work less hours. Keeping their jobs and benefits would be better than no job at all.
3. Reduce finished product inventories. Move cars around the dealers rather than continuing production. Make what sells. If people want particular cars or really big ones, get in line. Remember when you "ordered" a car and it was a big deal to order it and wait. It was fun. If someone does not want what is in inventory, order it OR find it at another place.
4. Eliminate about 5 layers of management, especially top management. Really. It appears that the guys at the top have forgotten who they work for. Because shareholders are so diluted today because of millions and millions of shares outstanding, the guys at the top do not have to really face the shareholders so they say "screw them". We will use their money to pay for our corporate jet.
5. For the next 3 to 5 years set the maximum pay for the top guy at say $1,000,000. Now, even if your house payment if $25,000 per month, you should be able to live on a million. Then set the maximum for any other officer at half that. Reduce Directors fees to say $5000 per meeting, etc.
6. Virtually eliminate perquisites. Come on. These are tough times. Perks are supposed to be for when things are great. No planes, trains and only cheap automobiles. No Chauffeurs UNLESS they are used to car pool I am serious. Figure out ways of doing ONLY the essentials.
Remember when Lee Iaccoca went to Congress for money? A whopping $1 Billion at the time. He took no salary, lived and acted frugally and made money after Chrysler became wildly profitable, had great new ideas and everyone in the company had learned to live on what the company could make. Eventually, everyone did fine and he paid back the money not on time, ahead of time. Now I know that the CEO"s of GM and Chrysler have both agreed to be paid $1 this year. However the CEO of Ford said his $9 million was "where is should be". Maybe but I doubt it. Remember, Ford went through tough times before GM and Chrysler (because Chrysler was being propped up by Daimler Benz).
Remember it is not $25 Billion they want. It is $50 Billion. They already have $25 Billion from the Department of Energy for re-tooling to Hybrids. They want ANOTHER $25 Billion. No way. Let them file for bankruptcy protection and see what the court requires them to do in order to reorganize. Just what we need is for government to determine how they succeed. Let me go up there and run Chrysler, they will be profitable next year!!!
What do you think?
Here is what should happen:
1. The regular, hourly employees make too much. Their wages are far higher than average America. Do not cut their wages but FREEZE them for at least three years. If the UAW won't go along, let the workers vote to keep their jobs or not.
2. Simultaneously, stop making cars so fast. Either slow the line down and/or work less hours. Keeping their jobs and benefits would be better than no job at all.
3. Reduce finished product inventories. Move cars around the dealers rather than continuing production. Make what sells. If people want particular cars or really big ones, get in line. Remember when you "ordered" a car and it was a big deal to order it and wait. It was fun. If someone does not want what is in inventory, order it OR find it at another place.
4. Eliminate about 5 layers of management, especially top management. Really. It appears that the guys at the top have forgotten who they work for. Because shareholders are so diluted today because of millions and millions of shares outstanding, the guys at the top do not have to really face the shareholders so they say "screw them". We will use their money to pay for our corporate jet.
5. For the next 3 to 5 years set the maximum pay for the top guy at say $1,000,000. Now, even if your house payment if $25,000 per month, you should be able to live on a million. Then set the maximum for any other officer at half that. Reduce Directors fees to say $5000 per meeting, etc.
6. Virtually eliminate perquisites. Come on. These are tough times. Perks are supposed to be for when things are great. No planes, trains and only cheap automobiles. No Chauffeurs UNLESS they are used to car pool I am serious. Figure out ways of doing ONLY the essentials.
Remember when Lee Iaccoca went to Congress for money? A whopping $1 Billion at the time. He took no salary, lived and acted frugally and made money after Chrysler became wildly profitable, had great new ideas and everyone in the company had learned to live on what the company could make. Eventually, everyone did fine and he paid back the money not on time, ahead of time. Now I know that the CEO"s of GM and Chrysler have both agreed to be paid $1 this year. However the CEO of Ford said his $9 million was "where is should be". Maybe but I doubt it. Remember, Ford went through tough times before GM and Chrysler (because Chrysler was being propped up by Daimler Benz).
Remember it is not $25 Billion they want. It is $50 Billion. They already have $25 Billion from the Department of Energy for re-tooling to Hybrids. They want ANOTHER $25 Billion. No way. Let them file for bankruptcy protection and see what the court requires them to do in order to reorganize. Just what we need is for government to determine how they succeed. Let me go up there and run Chrysler, they will be profitable next year!!!
What do you think?
Monday, November 17, 2008
Number 5, Let the Title Begin
After some time in your business or if the heir apparent has obtained great experience somewhere eles and is coming into the business, give them a title that will let everyone know who the heir apparent is. For two reasons:
1. If you have other high level managers in the business and you know that they are not likely to become the President (top guy), you let them know so that they can either decide to stay knowing that they are not the choice OR they can go somewhere else. If they are really valuable people and you do not want them to go, tell them that. If they decide to go anyway, help them in their search by being a reference and continuing to have confidence in them.
2. People need to know what is going on and the heir apparent needs to gain the authority to go along with the responsibility of the job. Do not phase them into the job. You should have already done that in their training or experience. They either are or they are not. You will know soon enough if they get the big head over the title. If they do flaunt their position, demote them or terminate them. A very little of the big head can destroy years of building a business. Have the guts to tell them what you see and ask them(tell them) to stop and change. If they suddenly won't fwork or don't think that they should have to work as hard as everyone else, you have made the wrong choice. Now do not make the mistake of mistaking delegation for not working. Your heir apparent may be a better delegator than you are and he may have other priorities. Evaluate that BEFORE you promote him. A good delegator is usually a good manager with forward thinking and strategic mindedness.
So, give 'em the title and set them up to succeed. If their significance gets tied up in their title, they are the wrong person for the job and change it. NOW!
What do you think?
1. If you have other high level managers in the business and you know that they are not likely to become the President (top guy), you let them know so that they can either decide to stay knowing that they are not the choice OR they can go somewhere else. If they are really valuable people and you do not want them to go, tell them that. If they decide to go anyway, help them in their search by being a reference and continuing to have confidence in them.
2. People need to know what is going on and the heir apparent needs to gain the authority to go along with the responsibility of the job. Do not phase them into the job. You should have already done that in their training or experience. They either are or they are not. You will know soon enough if they get the big head over the title. If they do flaunt their position, demote them or terminate them. A very little of the big head can destroy years of building a business. Have the guts to tell them what you see and ask them(tell them) to stop and change. If they suddenly won't fwork or don't think that they should have to work as hard as everyone else, you have made the wrong choice. Now do not make the mistake of mistaking delegation for not working. Your heir apparent may be a better delegator than you are and he may have other priorities. Evaluate that BEFORE you promote him. A good delegator is usually a good manager with forward thinking and strategic mindedness.
So, give 'em the title and set them up to succeed. If their significance gets tied up in their title, they are the wrong person for the job and change it. NOW!
What do you think?
Saturday, November 8, 2008
Veterans Day
Earlier today I sent an e-mail that I had received from a friend from church in which it reminds us tht we have our freedoms not because of the people performing that freedom but because of the veterans who have insured our freedom from tyranny over the years. I sent this e-mail to people I know who have sons and daughters in the military right now in a feeble attempt to say thank you.
In our church, we had a couple both of whom were Dentists. We had their daughter in Sunday School. When the Iraq war started, they sold their practice and both joined the military and both have served together and separately in Iraq and Afghanistan. I am so proud to know them and their commitment to our country. When they left, our church prayed over them and I am glad that we did.
My son, who is a surgeon, just left the military in July. He was deployed to Kyrgyzstan. Even though he was not in the main battle theatre, it was a scary time for him and for us. But, he wanted to go. His education was provided by the military and he felt and obligation to serve. Secondly, he wanted to have been where he could help. I am proud of him for being a soldier and willing to protect our freedoms.
God Bless America and God Bless our Vets! What do you think?
In our church, we had a couple both of whom were Dentists. We had their daughter in Sunday School. When the Iraq war started, they sold their practice and both joined the military and both have served together and separately in Iraq and Afghanistan. I am so proud to know them and their commitment to our country. When they left, our church prayed over them and I am glad that we did.
My son, who is a surgeon, just left the military in July. He was deployed to Kyrgyzstan. Even though he was not in the main battle theatre, it was a scary time for him and for us. But, he wanted to go. His education was provided by the military and he felt and obligation to serve. Secondly, he wanted to have been where he could help. I am proud of him for being a soldier and willing to protect our freedoms.
God Bless America and God Bless our Vets! What do you think?
Number 4 is for Sales and Marketing
Well, Well. This may be the toughest one. Your heir apparent must "carry the bag' or, in other words, must be in or have experience selling. Not Marketing, selling. What is the difference. Selling is going out and talking to customers face to face or on the telephone with the objective of building a relationship and SELLING them your product or service. Marketing is the effort to inform the world of who you are and what your products are via brochures, ads, training/education and most significantly, is planned. How are you going to get to the market you are after. I have asked this question of all the companies that I have consulted with. Most had not idea except the same ol', same ol'.
If possible, I would suggest that the Strategic Planning effort include the basics for the Marketing Plan. Having your heir involved with Strategic Planning and Marketing and then, actually, selling is the best possible experience and will provide them with the "global" view of your buisness that you have, probably, always had. They may not want to do it, but make them. NO matter what! I promise that it will be the single best thing you do for them in their training.
If possible, I would suggest that the Strategic Planning effort include the basics for the Marketing Plan. Having your heir involved with Strategic Planning and Marketing and then, actually, selling is the best possible experience and will provide them with the "global" view of your buisness that you have, probably, always had. They may not want to do it, but make them. NO matter what! I promise that it will be the single best thing you do for them in their training.
Number 3 in the series
I was caught between wanting to get this blog caught up and commenting on the Mr. Obamas first news conference yesterday (November 7). The fact is that I saw a different Mr. Obama. Perhaps for show, but I saw him as well organized, decisive and prepared. A reporter asked him about his security briefing the previous day and wanted to know what he might have learned. He told the reporter directly that he did learn somethings and no he would not discuss any of it. Period! When they asked him about an economic stimulus package this year or next, he said he would like to see it this year but this country has only one President at a time and right now it is George Bush so it was in his court; and it is. In typical, liberal reporter style, they asked him about his input into who will be his Senatorial successor. He said it was not any of his business it was the Illinois Governors call. Right on man, keep it up!
Now for number 3 on preparing your successor in a small or family owned business. In number 3 in the earlier blog, I indicated that the heir apparent should would in all functions/departments within the company and be paid accordingly. They may be good at sales or accounting or productioon or other functions, but if they are going to manage when you leave, back off or retire, they need to appreciate the fact that it takes all the departments working together to get the job done. Probably the biggest thing to remember is that what you do to keep track of your business, your heir needs to do too. They may do it differently, but they will do it on some basis, or they should.
In my experience there are two major battles to deal with.
1. Sales people think that they are far and away the most important aspect to the business. To some extent they are. No sales, no business. However, if you had all the sales in the world and no accounting, no production/purchasing, etc., so what! It takes everyone. After saying all that, no one should ever run a company, in my opinion, with having "carried the bag" so to speak or, in other words, have ACTUAL selling experience. This is especially true if your sales people travel. Travelling and selling on the road is not the glamorous job everyone thinks it is. I know. I had over 200,000 miles in the air one year.
2. Accounting people tend to be "bean counters" and are viewed as disruptive to the business. The heir needs to understand a balance sheet and P&L aw well as the accounting people, in my view. I am not an accountant but I bet I understand and know the ins and outs of accounting better than most accountants. Not because of formal training necessarily, but because of EXPERIENCE. Proper accounting is of monumental importance. And, if you are large enough, the Sarbanes/Oxley Act requires controls and a CFO position and that is good.
So make them work in all departments. If they don't want to, they are not the heir apparent. They do not have to like it, but they have to do it.
What do you think?
Now for number 3 on preparing your successor in a small or family owned business. In number 3 in the earlier blog, I indicated that the heir apparent should would in all functions/departments within the company and be paid accordingly. They may be good at sales or accounting or productioon or other functions, but if they are going to manage when you leave, back off or retire, they need to appreciate the fact that it takes all the departments working together to get the job done. Probably the biggest thing to remember is that what you do to keep track of your business, your heir needs to do too. They may do it differently, but they will do it on some basis, or they should.
In my experience there are two major battles to deal with.
1. Sales people think that they are far and away the most important aspect to the business. To some extent they are. No sales, no business. However, if you had all the sales in the world and no accounting, no production/purchasing, etc., so what! It takes everyone. After saying all that, no one should ever run a company, in my opinion, with having "carried the bag" so to speak or, in other words, have ACTUAL selling experience. This is especially true if your sales people travel. Travelling and selling on the road is not the glamorous job everyone thinks it is. I know. I had over 200,000 miles in the air one year.
2. Accounting people tend to be "bean counters" and are viewed as disruptive to the business. The heir needs to understand a balance sheet and P&L aw well as the accounting people, in my view. I am not an accountant but I bet I understand and know the ins and outs of accounting better than most accountants. Not because of formal training necessarily, but because of EXPERIENCE. Proper accounting is of monumental importance. And, if you are large enough, the Sarbanes/Oxley Act requires controls and a CFO position and that is good.
So make them work in all departments. If they don't want to, they are not the heir apparent. They do not have to like it, but they have to do it.
What do you think?
Wednesday, November 5, 2008
Wew! The election is over!
Well it is over. Obama has won, unfortunately. However, I will support Mr. Obama as our new President and pray for him regularly. (He needs the prayer and I need the practice!)
As I have mentioned in this blog before, there is really very little a President can do without the approval of Congress. Of course, in Obamas case, the Democrats have a majority so he can, hopefully, make good on his promises. My personal opinion is that if you think spending was great under Bush, hold on!
The enormity of the task and the shear power of the position will, in all likelihood, cause Obama to surround himself with competent staff. Again, hopefully, he will not fill his staff with yes men. My personal opinion is that he will do that. His campaign was very well organized and very well run. Probably not by him, but by his selections to run the campaign. That is a good sign because he delegated responsibility and granted necessary authority to his head honchos. No President can succeed without that.
Thanks for stopping in and I would like to know what you think. Respond where it says "comments" below or e-mail me at dennispcarey@yahoo.com.
As I have mentioned in this blog before, there is really very little a President can do without the approval of Congress. Of course, in Obamas case, the Democrats have a majority so he can, hopefully, make good on his promises. My personal opinion is that if you think spending was great under Bush, hold on!
The enormity of the task and the shear power of the position will, in all likelihood, cause Obama to surround himself with competent staff. Again, hopefully, he will not fill his staff with yes men. My personal opinion is that he will do that. His campaign was very well organized and very well run. Probably not by him, but by his selections to run the campaign. That is a good sign because he delegated responsibility and granted necessary authority to his head honchos. No President can succeed without that.
Thanks for stopping in and I would like to know what you think. Respond where it says "comments" below or e-mail me at dennispcarey@yahoo.com.
Wednesday, October 29, 2008
Number 2 begins now
You should begin training the family member who is going to take over now. Many times I have gone into a company and Dad is really frustrated because Son or Daughter are not ready in his opinion. Usually it is because he has been treating them like a Son or Daughter rather than an employee/heir apparent.
If they are in the training phase and in some department or function within the company, they should be held to the same level of competency that any employee would. If they are acting like children or cannot do the job, either transfer them or discipline them or maybe both. They will never learn if you coddle them and allow them to be not held to the same level of maintaining the rules as anyone else. If they are doing well, promote them like anyone else, pay them like anyone else and give them the praise they deserve.
After working in all the functions in the business in one capacity or another, then bring them along with increasingly responsible positions. Remember you should have already told your top management what you are doing. They should know your intentions. That may create a problem. If you have someone really good and you really trust them and they are doing a great job. increase their responsibilities too. Probably, have your heir apparent report to them to learn how to manage and gain the respect of others. Your family member may become frustrated because they have to follow someone else's orders and, after all, they are family, they are flesh and blood. Well too bad. Until they act like and perform like the best employees you have, they should not be promoted or given any special treatment. I promise you, the children of owners that have been left to their own devices loose the respect of the employees, never get the respect of suppliers/bankers/investors and they never experience the business like they should. Sure it is tough, but was it easy for you? Did you have to work hard for what you have? So should the kids.
Finally, if the family member is anxious to take over, you should be excited for them and glad they are so interested, but do not give in. Make sure, no matter what, they are fully integrated, have the respect of their peers and are as knowledgeable as anyone else in the company on its products/services, methodology, strategic plan, strategic initiatives and the budget/financial statements. They can do it, but you must be the overseer of their training and make sure they become an owner at the right time.
What do you think?
If they are in the training phase and in some department or function within the company, they should be held to the same level of competency that any employee would. If they are acting like children or cannot do the job, either transfer them or discipline them or maybe both. They will never learn if you coddle them and allow them to be not held to the same level of maintaining the rules as anyone else. If they are doing well, promote them like anyone else, pay them like anyone else and give them the praise they deserve.
After working in all the functions in the business in one capacity or another, then bring them along with increasingly responsible positions. Remember you should have already told your top management what you are doing. They should know your intentions. That may create a problem. If you have someone really good and you really trust them and they are doing a great job. increase their responsibilities too. Probably, have your heir apparent report to them to learn how to manage and gain the respect of others. Your family member may become frustrated because they have to follow someone else's orders and, after all, they are family, they are flesh and blood. Well too bad. Until they act like and perform like the best employees you have, they should not be promoted or given any special treatment. I promise you, the children of owners that have been left to their own devices loose the respect of the employees, never get the respect of suppliers/bankers/investors and they never experience the business like they should. Sure it is tough, but was it easy for you? Did you have to work hard for what you have? So should the kids.
Finally, if the family member is anxious to take over, you should be excited for them and glad they are so interested, but do not give in. Make sure, no matter what, they are fully integrated, have the respect of their peers and are as knowledgeable as anyone else in the company on its products/services, methodology, strategic plan, strategic initiatives and the budget/financial statements. They can do it, but you must be the overseer of their training and make sure they become an owner at the right time.
What do you think?
Friday, October 24, 2008
The Family Business Helper Part 1
As a consultant and business owner, I have been in 12 family owned business in one capacity or another-23 different assignments. In that time, I have seen good ones, bad ones, successful ones, unsuccessful ones, well run and poorly run, profitable and unprofitable, those that keep up with the times and those that do not and, unfortunately, most of all....... businesses that were fairly well run and profitable turned over to the kids only to be run right into the ground. Some times I have come in to save them, some times to reorganize them and sometimes to put them in bankruptcy and see what could be salvaged (have actually salvaged the entire business on occasion).
So here is my advice if you have a family business:
1. If you have a successor, decide who that is right now. If you do not, see #7 below.
2. Begin training that person to replace you right now.
3. Make that person work every function in the company until they realize that it takes all the functions in the company to make it work. Pay them like everyone else in those categories. If they need special treatment or arrangements, do that only if you have to and do confidentially even if you have to do it personally.
4. Make sure, no matter what, they get sales experience and know the difference between sales and marketing. Even if they are not sales people, make them do it, make them "carry the bag" if you will. It would be great if they had to make cold calls and travel.
5. When the time is right (I will describe that later) give them a title that lets everyone know they are the heir apparent. Not such a large title that they cannot be promoted through a series of events, but something significant.
6. Progressively increase their responsibility until you name them President and COO. You remain Chairman and CEO until you retire. When you do this, be there to help not direct and let them lead no matter how hard it is.
7. If you do not have a relative that is going to take over, begin looking for your heir at least 5 years before you are going to retire. It might take more than one to work out. Family owned businesses have their own idiosyncrasies usually some of which are not normal business methodology so be ready to change.
So lets elaborate on #1. If you have kids in the business and you want one of them to take over (they cannot all take over) make sure that they REALLY want to stay in the business. Do not ASSUME that they all want to be in the business. All of Warren Buffets children could have been in the business I suppose, but only one is. If there is more than one, without regard for age/education, pick the one who works best with your people after you have seen them all in action. If you only have one child and he or she wants to be in the business, get them a great education (as far as they can go) and begin training them right now. Let them work summers, Christmas holidays, etc. Then start them out learning the product/service and work their way up through all facets of the business. If you are 20 years from retirement, it is not too early to start.
Next make a plan for the heir apparent to assume the throne (the job not the executive bathroom LOL). Identifying the person becomes the easy part, training them according to a plan may be tougher, but in my experience the single biggest reason children assuming the helm of a company is that they were not properly trained and the owner/founder/parent was so busy running the business the way they always have that when they were ready to back off/retire the kids were not ready to take over. Most of the businesses that the kids ended up running into the ground were because they did not know the intricacies of running the business that the owner held dear and did not pass on OR the business needed so much upgrading that by the time the kids tried it was too late. Even more common was the kid had be coddled through the business and put in charge right away. They were GIVEN EVERYTHING and then GIVEN the business and they had no idea of the fiscal responsibilities of the business.
So choose early, train properly, treat them like employees at first and then as owners and then get out of the way!
What do you think?
So here is my advice if you have a family business:
1. If you have a successor, decide who that is right now. If you do not, see #7 below.
2. Begin training that person to replace you right now.
3. Make that person work every function in the company until they realize that it takes all the functions in the company to make it work. Pay them like everyone else in those categories. If they need special treatment or arrangements, do that only if you have to and do confidentially even if you have to do it personally.
4. Make sure, no matter what, they get sales experience and know the difference between sales and marketing. Even if they are not sales people, make them do it, make them "carry the bag" if you will. It would be great if they had to make cold calls and travel.
5. When the time is right (I will describe that later) give them a title that lets everyone know they are the heir apparent. Not such a large title that they cannot be promoted through a series of events, but something significant.
6. Progressively increase their responsibility until you name them President and COO. You remain Chairman and CEO until you retire. When you do this, be there to help not direct and let them lead no matter how hard it is.
7. If you do not have a relative that is going to take over, begin looking for your heir at least 5 years before you are going to retire. It might take more than one to work out. Family owned businesses have their own idiosyncrasies usually some of which are not normal business methodology so be ready to change.
So lets elaborate on #1. If you have kids in the business and you want one of them to take over (they cannot all take over) make sure that they REALLY want to stay in the business. Do not ASSUME that they all want to be in the business. All of Warren Buffets children could have been in the business I suppose, but only one is. If there is more than one, without regard for age/education, pick the one who works best with your people after you have seen them all in action. If you only have one child and he or she wants to be in the business, get them a great education (as far as they can go) and begin training them right now. Let them work summers, Christmas holidays, etc. Then start them out learning the product/service and work their way up through all facets of the business. If you are 20 years from retirement, it is not too early to start.
Next make a plan for the heir apparent to assume the throne (the job not the executive bathroom LOL). Identifying the person becomes the easy part, training them according to a plan may be tougher, but in my experience the single biggest reason children assuming the helm of a company is that they were not properly trained and the owner/founder/parent was so busy running the business the way they always have that when they were ready to back off/retire the kids were not ready to take over. Most of the businesses that the kids ended up running into the ground were because they did not know the intricacies of running the business that the owner held dear and did not pass on OR the business needed so much upgrading that by the time the kids tried it was too late. Even more common was the kid had be coddled through the business and put in charge right away. They were GIVEN EVERYTHING and then GIVEN the business and they had no idea of the fiscal responsibilities of the business.
So choose early, train properly, treat them like employees at first and then as owners and then get out of the way!
What do you think?
Monday, October 13, 2008
I was asked, so here is my answer on election and economy
My nephew sent me an e-mail that said "I have a friend is is unsure who to vote for and she is very concerned about how they might handle the economy in the next 4 years.". I wrote the following answer:
Well, I would tell her not to panic, first of all. The market will survive and so will the economy. Neither candidate for President can do ANYTHING on their own. Whoever is elected must work with Congress to make things happen. So be very careful who you vote for for the House of Representatives and Senate. The President, by himself, can do nothing!!!
Secondly I would tell her to vote for the person who is telling the truth as best we can determine it. Thirdly, vote for the person who is a proven leader who will keep us safe and will surround themselves with the most experienced people who are not yes men. Lastly, I would vote for someone who has a proven record of working with both parties in the country's best interest. (By the way, Sarah Palin might be the best leader of the bunch!) Someone who is not afraid to pray and allow God to be part of the process.
We should pray for the country right now and for this election. Remember the Bible says that the effective, fervent pray of His people avails much!
I do not have any problem not voting for Obama but I did have a problem voting for McCain! Then I heard his interview with Rick Warren at Saddleback Church early in this campaign. Obama talked from the theoretical, McCain talked from the experiential. Once I got past the rhetoric of Obama (I still think he is a closet Muslim and aspires to Rev. Wrightesq view of America and only talks patriotically when is to his advantage) and became very satisfied with the decisiveness and relative candor of McCain.
Sorry for the long answer. You are probably sorry you asked, huh?
Thanks for asking! In the next couple of days I am going to deal with this from the small business perspective in my blog.
From a small businessman's point of view and also that of a "normal" citizen, I blows me away to hear the candidates telling us what they are going to do for the economy. As President, by themselves, what can they do?!? NOTHING. They cannot change laws, pass legislation, interpret the Constitution, set up new methods, add or delete departments or determine what government intervention is going to occur tax-wise or economy related. In order to do these things they must cajole, collaborate and work with Congress. IT TAKES LEADERSHIP NOT RHETORIC! Can he add staff, move staff, eliminate staff, sure---below a certain level. Above a certain level that also requires Congressional approval. I mean no disrespect to the President at all. As a matter of fact, I have incredible admiration and respect for the position of President of the United States. Bill Clinton was a terrible person with little or no morals and he was a scheming, conniving and impeached person, but I still respected him in the position of POTUS (President of the United States).
See, all the promises they are making and all the speeches they are giving and all the things they say they are going to do are not worth the air they take up if the person is not honest, of great character and has integrity. Incidental, honesty and integrity are not relative terms. You either are are you are not. Someone told me once that they were "basically honest". That means they were dishonest. You either are or you are not. So, instead of listening to what they say they are going to do. try to determine who is being honest and who has integrity. Who would lay their life down for the country, who would put country first no matter what, who has experience (not experience being President, nobody has that until they get in the office unless they have been President before) in life and who will stand up for "what" is right, not "who" is right when it comes to our national security and our electorates best interests.
Next, basically leave the economy alone. The panic we are seeing in the minds of the Congress is conjured up in order to cast blame on party lines. Are there problems? Absolutely. Does it require government intervention? Possibly but not permanently. Do we need some more regulation on Wall Street? Unfortunately, yes. Without some restraint, GREED takes over. The entire Wall Street debacle that is really hurting Main Street, is as a result of GREED. GREED! Not George Bush or the last 8 years (2 of which had a Democratically controlled Congress remember). What can a guy do who makes $130,000,000 per year that he could not do at $3,000,000. I could easily live on either couldn't you? I am a Free Enterprise person, but the people we trusted in business got GREEDY and it affected us all. That is exactly what is happening to the automotive industry now. GREED but this time not only by the CEO's but by the unions as well. Sure they should want the best for the people they represent, but not a the expense of everyone else in the country and maybe the world.
As Kelly Ogle (Oklahoma City news anchor)would say, "That's my 2 cents"! What do you think?
Well, I would tell her not to panic, first of all. The market will survive and so will the economy. Neither candidate for President can do ANYTHING on their own. Whoever is elected must work with Congress to make things happen. So be very careful who you vote for for the House of Representatives and Senate. The President, by himself, can do nothing!!!
Secondly I would tell her to vote for the person who is telling the truth as best we can determine it. Thirdly, vote for the person who is a proven leader who will keep us safe and will surround themselves with the most experienced people who are not yes men. Lastly, I would vote for someone who has a proven record of working with both parties in the country's best interest. (By the way, Sarah Palin might be the best leader of the bunch!) Someone who is not afraid to pray and allow God to be part of the process.
We should pray for the country right now and for this election. Remember the Bible says that the effective, fervent pray of His people avails much!
I do not have any problem not voting for Obama but I did have a problem voting for McCain! Then I heard his interview with Rick Warren at Saddleback Church early in this campaign. Obama talked from the theoretical, McCain talked from the experiential. Once I got past the rhetoric of Obama (I still think he is a closet Muslim and aspires to Rev. Wrightesq view of America and only talks patriotically when is to his advantage) and became very satisfied with the decisiveness and relative candor of McCain.
Sorry for the long answer. You are probably sorry you asked, huh?
Thanks for asking! In the next couple of days I am going to deal with this from the small business perspective in my blog.
From a small businessman's point of view and also that of a "normal" citizen, I blows me away to hear the candidates telling us what they are going to do for the economy. As President, by themselves, what can they do?!? NOTHING. They cannot change laws, pass legislation, interpret the Constitution, set up new methods, add or delete departments or determine what government intervention is going to occur tax-wise or economy related. In order to do these things they must cajole, collaborate and work with Congress. IT TAKES LEADERSHIP NOT RHETORIC! Can he add staff, move staff, eliminate staff, sure---below a certain level. Above a certain level that also requires Congressional approval. I mean no disrespect to the President at all. As a matter of fact, I have incredible admiration and respect for the position of President of the United States. Bill Clinton was a terrible person with little or no morals and he was a scheming, conniving and impeached person, but I still respected him in the position of POTUS (President of the United States).
See, all the promises they are making and all the speeches they are giving and all the things they say they are going to do are not worth the air they take up if the person is not honest, of great character and has integrity. Incidental, honesty and integrity are not relative terms. You either are are you are not. Someone told me once that they were "basically honest". That means they were dishonest. You either are or you are not. So, instead of listening to what they say they are going to do. try to determine who is being honest and who has integrity. Who would lay their life down for the country, who would put country first no matter what, who has experience (not experience being President, nobody has that until they get in the office unless they have been President before) in life and who will stand up for "what" is right, not "who" is right when it comes to our national security and our electorates best interests.
Next, basically leave the economy alone. The panic we are seeing in the minds of the Congress is conjured up in order to cast blame on party lines. Are there problems? Absolutely. Does it require government intervention? Possibly but not permanently. Do we need some more regulation on Wall Street? Unfortunately, yes. Without some restraint, GREED takes over. The entire Wall Street debacle that is really hurting Main Street, is as a result of GREED. GREED! Not George Bush or the last 8 years (2 of which had a Democratically controlled Congress remember). What can a guy do who makes $130,000,000 per year that he could not do at $3,000,000. I could easily live on either couldn't you? I am a Free Enterprise person, but the people we trusted in business got GREEDY and it affected us all. That is exactly what is happening to the automotive industry now. GREED but this time not only by the CEO's but by the unions as well. Sure they should want the best for the people they represent, but not a the expense of everyone else in the country and maybe the world.
As Kelly Ogle (Oklahoma City news anchor)would say, "That's my 2 cents"! What do you think?
Wednesday, October 8, 2008
Family business-how is nepotism working?
I have been in several family owned businesses. Some of them good, some of them not so good, some of them bad. No matter what the assignment is that I have taken at the family owned company, almost always, the owners want me to comment (or analyze) how the family is doing ESPECIALLY if they are employing their kids. It is very dangerous for a consultant because seldom do the answers please the owners.
Let me give you my perspective on employing family members in a family owned business. It is threefold:
1. If you do it, do it right. The best way is for the relatives, especially kids, to function in the business is for them to start at the lowest levels in the company and gradually move up. It is really good if they can work is many areas of the company. I was involved with one company where all 3 sons were in the business and all 3 had to work in Sales, Accounting, HR, the warehouse, go out in the field and work all shifts. Soon they discovered who was there to build a career and who was there to get on Daddy's dole.
2. If the family member is getting special treatment, tell everyone up front. When I coached Baseball, I would have a meeting every year with the parents. It was a mandatory meeting. In that meeting I told the parents that although I loved Baseball, I was coaching because I wanted to coach my son. I told them that he would play every game unless he was hurt or ill and if they didn't like that, they might be better served by another team. I coached that team for 13 years and had 8 of the original 14 boys the last year. If your kid (or other relative) is going to get his positions because he is related to you, tell people and then they will learn to live with it. If your kid or relative is a jerk, either terminate them or otherwise remove them. My son understood on our ball team that I expected him to set the example for everyone else. If your kid cannot do that, do not put them in a job of any kind.
3. Blood is thicker than water, as the old adage states. It really is. If you cannot terminate your relative, especially your kids, do not hire them at all. I recently had a client that had children, brothers, uncles, and a grandfather employed. They, except for one, were model employees because they had seen their Mom and Dad terminate relatives who thought that they were entitled to their job and above the rules. The employee manual should apply to everyone including the family or you will loose the good employees and others will just tolerate the family.
What about pay. Pay them according to their need and what you agreed to. Pay them what everyone else in that job would get. If you are going to pay them more or give them more or different benefits, don't brag about it and don't let the relative brag about it. If they are getting an extra few days vacation because they are family, when someone asks why, tell them it is because they are family and being part of the family does have it's privileges. That assumes, of course, that the relative isn't rubbing every one's nose in his being favored. If he does, fire 'em.
So, with that said, it has been my experience to be very careful answering the question about how a relative is doing, especially a kid. But answer I must and I do it frankly and to the point. What I usually try to do unless the kid is a total jerk, is tell them what the relative is doing that is good and what is bad and what can be done to improve them. Improving them might be suggesting that they go to work for someone who is not family and see what the real world is like. Usually relatives coming into the business after having worked at other places are respectful of others and understand their position. If they do not understand how to assimilate themselves, terminate them quickly.
What do you think?
Let me give you my perspective on employing family members in a family owned business. It is threefold:
1. If you do it, do it right. The best way is for the relatives, especially kids, to function in the business is for them to start at the lowest levels in the company and gradually move up. It is really good if they can work is many areas of the company. I was involved with one company where all 3 sons were in the business and all 3 had to work in Sales, Accounting, HR, the warehouse, go out in the field and work all shifts. Soon they discovered who was there to build a career and who was there to get on Daddy's dole.
2. If the family member is getting special treatment, tell everyone up front. When I coached Baseball, I would have a meeting every year with the parents. It was a mandatory meeting. In that meeting I told the parents that although I loved Baseball, I was coaching because I wanted to coach my son. I told them that he would play every game unless he was hurt or ill and if they didn't like that, they might be better served by another team. I coached that team for 13 years and had 8 of the original 14 boys the last year. If your kid (or other relative) is going to get his positions because he is related to you, tell people and then they will learn to live with it. If your kid or relative is a jerk, either terminate them or otherwise remove them. My son understood on our ball team that I expected him to set the example for everyone else. If your kid cannot do that, do not put them in a job of any kind.
3. Blood is thicker than water, as the old adage states. It really is. If you cannot terminate your relative, especially your kids, do not hire them at all. I recently had a client that had children, brothers, uncles, and a grandfather employed. They, except for one, were model employees because they had seen their Mom and Dad terminate relatives who thought that they were entitled to their job and above the rules. The employee manual should apply to everyone including the family or you will loose the good employees and others will just tolerate the family.
What about pay. Pay them according to their need and what you agreed to. Pay them what everyone else in that job would get. If you are going to pay them more or give them more or different benefits, don't brag about it and don't let the relative brag about it. If they are getting an extra few days vacation because they are family, when someone asks why, tell them it is because they are family and being part of the family does have it's privileges. That assumes, of course, that the relative isn't rubbing every one's nose in his being favored. If he does, fire 'em.
So, with that said, it has been my experience to be very careful answering the question about how a relative is doing, especially a kid. But answer I must and I do it frankly and to the point. What I usually try to do unless the kid is a total jerk, is tell them what the relative is doing that is good and what is bad and what can be done to improve them. Improving them might be suggesting that they go to work for someone who is not family and see what the real world is like. Usually relatives coming into the business after having worked at other places are respectful of others and understand their position. If they do not understand how to assimilate themselves, terminate them quickly.
What do you think?
Tuesday, October 7, 2008
Shake things up!
Really? Not usually. In small and family owned businesses, the owners/senior management are usually proud of what they have done and bring a consultant in to hear that said to them. In my experience these people (especially owners) may have a single problem that has their attention and they do not feel that they will get an objective opinion from the current staff (or they lack adequate staff) so they call me. With a few exceptions, when we agree on what I am going to do, I am almost always asked to "shake things up", "look at what you need to" for resolving this problem and while you are at it, look at the management staff and do not be their friend.
One of the things, among many, that I do well is that I am a quick study. In my last assignment, for example, they wanted a preliminary report in 30 days. They had one in 6 days. We had a plan in place in 2 weeks and were working that plan almost immediately. At the end of 30 days I called a meeting and presented a comprehensive plan that included not only solving the problem and a reorganization plan for that function as well, but also a plan for the future that would help them grow or be ready for growth. The plan was approved and we moved on to the "shake things up" part of the deal. That is where the rub came in. I received accolades, complimentary e-mails and they discussed the possibility of me coming on board as a full time employee. Things were great.
A couple of weeks later I had a meeting with the CEO, President and EVP. I had had individual meetings with each of them and had told them about organizational flaws I had discovered, procedural and policy inconsistencies that existed and little or no real honest to God Sales and Marketing effort (most of which was, ostensibly, being done by the owners kids). Now I was in trouble. I gave them a "shake things up" plan and suggested methods for developing a Strategic Plan supported by certain Strategic Initiatives. It was my opinion that they had built a good business based not on sound business principles, but by the grace of God. Although they responded well to Strategic Plan idea and hired a person to spearhead that effort, they did not like being confronted with decreasing market share, little or no sales training, at least one top manager who was so enamored by his title and power, the CEO had, over the years, taken away all departments reporting to this person except for one. Why? Because no one could work for him. He thought that he was "second in command" and acted like it. Although everyone in the company respected his title, they did not respect him.
So, they decided that I should continue the Interim Executive position until a determination could be made about the person they wanted to take the job. They had actually given him the job and then taken it away from him. I worked with the guy and determined that their criticisms of him (lack of initiative, poor leadership, too much attention to detail, family problems and ability to manage) were only partially well founded. They had provided him no training, had done what Laurence Peter called in this book "The Peter Principle", lateral arabesque by promoting him rather than deal with him. He had tremendous knowledge of their computer system, the departmental functions but had always worked for someone who made the decisions for him. I changed that, worked with the guy, gave him necessary training, made him be involved in all decisions and refocused his view from that of a Supervisor to that of a VP. I taught him to have a company view rather than only a department view. When management asked him a long term question, he answered it with details rather than a plan. Finally, I told their management that this man was capable of being the head of the function. However, they needed to set the example by having company goals and objectives based on Strategic Plan. They needed to invest in him and provide him with the opportunity to be successful not just dutiful.
So much for shaking things up. Remember the e-mail to the President from yesterdays posting? That, coupled with the "shake up" plan did me in. They enjoyed talking about what a great company they had, what hard times they had had, how well known and respected they were among their clients (the 4 largest of which had left for the competition in the last 12 months) and they were perfectly organized as is. End of contract! You know, the fact is that they did have a very good company but not a great company, they had business for the foreseeable future, but they were not built to last and they had some really good people, but many had reached their levels of incompetence (see "The Peter Principle" again). They did not want help they wanted to be stroked. I tried to do all the stroking I could, but, if my objective was a long term deal, I should not have taken the "shake things up" instruction seriously. They will still tell you today that I really helped them and they are doing the things I suggested. I received an e-mail from the President last week saying those exact same things. Amazing.
The beauty of consulting. You get paid whether or not they agree. But, it is hard not to be personally disappointed when you know what you are telling them will work and the reason they do not do what needs to be done is because of ego or just no guts!
What do you thing? Tomorrow number 3!
One of the things, among many, that I do well is that I am a quick study. In my last assignment, for example, they wanted a preliminary report in 30 days. They had one in 6 days. We had a plan in place in 2 weeks and were working that plan almost immediately. At the end of 30 days I called a meeting and presented a comprehensive plan that included not only solving the problem and a reorganization plan for that function as well, but also a plan for the future that would help them grow or be ready for growth. The plan was approved and we moved on to the "shake things up" part of the deal. That is where the rub came in. I received accolades, complimentary e-mails and they discussed the possibility of me coming on board as a full time employee. Things were great.
A couple of weeks later I had a meeting with the CEO, President and EVP. I had had individual meetings with each of them and had told them about organizational flaws I had discovered, procedural and policy inconsistencies that existed and little or no real honest to God Sales and Marketing effort (most of which was, ostensibly, being done by the owners kids). Now I was in trouble. I gave them a "shake things up" plan and suggested methods for developing a Strategic Plan supported by certain Strategic Initiatives. It was my opinion that they had built a good business based not on sound business principles, but by the grace of God. Although they responded well to Strategic Plan idea and hired a person to spearhead that effort, they did not like being confronted with decreasing market share, little or no sales training, at least one top manager who was so enamored by his title and power, the CEO had, over the years, taken away all departments reporting to this person except for one. Why? Because no one could work for him. He thought that he was "second in command" and acted like it. Although everyone in the company respected his title, they did not respect him.
So, they decided that I should continue the Interim Executive position until a determination could be made about the person they wanted to take the job. They had actually given him the job and then taken it away from him. I worked with the guy and determined that their criticisms of him (lack of initiative, poor leadership, too much attention to detail, family problems and ability to manage) were only partially well founded. They had provided him no training, had done what Laurence Peter called in this book "The Peter Principle", lateral arabesque by promoting him rather than deal with him. He had tremendous knowledge of their computer system, the departmental functions but had always worked for someone who made the decisions for him. I changed that, worked with the guy, gave him necessary training, made him be involved in all decisions and refocused his view from that of a Supervisor to that of a VP. I taught him to have a company view rather than only a department view. When management asked him a long term question, he answered it with details rather than a plan. Finally, I told their management that this man was capable of being the head of the function. However, they needed to set the example by having company goals and objectives based on Strategic Plan. They needed to invest in him and provide him with the opportunity to be successful not just dutiful.
So much for shaking things up. Remember the e-mail to the President from yesterdays posting? That, coupled with the "shake up" plan did me in. They enjoyed talking about what a great company they had, what hard times they had had, how well known and respected they were among their clients (the 4 largest of which had left for the competition in the last 12 months) and they were perfectly organized as is. End of contract! You know, the fact is that they did have a very good company but not a great company, they had business for the foreseeable future, but they were not built to last and they had some really good people, but many had reached their levels of incompetence (see "The Peter Principle" again). They did not want help they wanted to be stroked. I tried to do all the stroking I could, but, if my objective was a long term deal, I should not have taken the "shake things up" instruction seriously. They will still tell you today that I really helped them and they are doing the things I suggested. I received an e-mail from the President last week saying those exact same things. Amazing.
The beauty of consulting. You get paid whether or not they agree. But, it is hard not to be personally disappointed when you know what you are telling them will work and the reason they do not do what needs to be done is because of ego or just no guts!
What do you thing? Tomorrow number 3!
Monday, October 6, 2008
Tell me what you think? How to do it.
Probably, my most asked question from a client. Usually clients say three things to me at the outset of an assignment:
1. Tell us what you really think.
2. Shake things up. We are tired to the status quo!
3. This is a family owned business. I want to know about my kids (or other relatives) in
the business and how they are doing.
Very seldom, maybe never, do they really mean that. What they are really saying is:
1. Tell me what I want to hear!
2. Things are just fine the way they are, do not rock the boat.
3. My kids (or other family members) are immune from criticism or evaluation.
I thought that I would give you an example of all three of these from actual experience. Obviously, I have changed the names to protect the innocent. There have been many times that I believe that I have had my contract terminated because I answered these questions honestly and directly. Most of the time I try to "speak the truth in love" (that is from Ephesians in the Bible for you heathens LOL). Does not matter! It is always taken personally and usually dreadfully. Not always though. Some people appreciate not being a "yes man" and those have been really rewarding for everyone.
I wrote a letter to a company CEO that I had heard was having some internal problems. He and his wife owned the company and had done a very nice job of building a company with a great product/service, fair pricing and some pretty good people. The CEO called me and asked me to come in. I did and we agreed that I would be hired as an Interim Executive on a consulting basis. After being there about two months, I received an e-mail from the President (wife of the Chairman and CEO). She asked me to tell her my heart on an issue. I made two mistakes:
1. I should have called a meeting and talked to her face to face. That is what I am known for and what I usually do. But this time I responded via e-mail.
2. She did not want to know my heart, she wanted me to say that she had handled the situation well and everyone else was wrong. I did not do that. She was dead wrong and I told her so.
Should I have been kinder? Maybe. Should I have been less direct? Never. She took my comments as an accusation of misconduct and if we had been face to face, I am sure that what I was trying to get across would have been much clearer and much less accusatory. She could have seen my reactions and body language and I could have seen hers. She was a very direct person too. Usually direct, senior management people do not like being dealt with directly. They say they do, but what they really want is to be stroked for their brilliance or for building such a wonderful business. Usually, they do not like being wrong. In this case, the entire company had a huge problem with their identity as people being tied up in their titles. That is a subject to be dealt with later.
Always tell the truth, always be straight forward, but always do it in person.
What do you think? Tomorrow number 2.
1. Tell us what you really think.
2. Shake things up. We are tired to the status quo!
3. This is a family owned business. I want to know about my kids (or other relatives) in
the business and how they are doing.
Very seldom, maybe never, do they really mean that. What they are really saying is:
1. Tell me what I want to hear!
2. Things are just fine the way they are, do not rock the boat.
3. My kids (or other family members) are immune from criticism or evaluation.
I thought that I would give you an example of all three of these from actual experience. Obviously, I have changed the names to protect the innocent. There have been many times that I believe that I have had my contract terminated because I answered these questions honestly and directly. Most of the time I try to "speak the truth in love" (that is from Ephesians in the Bible for you heathens LOL). Does not matter! It is always taken personally and usually dreadfully. Not always though. Some people appreciate not being a "yes man" and those have been really rewarding for everyone.
I wrote a letter to a company CEO that I had heard was having some internal problems. He and his wife owned the company and had done a very nice job of building a company with a great product/service, fair pricing and some pretty good people. The CEO called me and asked me to come in. I did and we agreed that I would be hired as an Interim Executive on a consulting basis. After being there about two months, I received an e-mail from the President (wife of the Chairman and CEO). She asked me to tell her my heart on an issue. I made two mistakes:
1. I should have called a meeting and talked to her face to face. That is what I am known for and what I usually do. But this time I responded via e-mail.
2. She did not want to know my heart, she wanted me to say that she had handled the situation well and everyone else was wrong. I did not do that. She was dead wrong and I told her so.
Should I have been kinder? Maybe. Should I have been less direct? Never. She took my comments as an accusation of misconduct and if we had been face to face, I am sure that what I was trying to get across would have been much clearer and much less accusatory. She could have seen my reactions and body language and I could have seen hers. She was a very direct person too. Usually direct, senior management people do not like being dealt with directly. They say they do, but what they really want is to be stroked for their brilliance or for building such a wonderful business. Usually, they do not like being wrong. In this case, the entire company had a huge problem with their identity as people being tied up in their titles. That is a subject to be dealt with later.
Always tell the truth, always be straight forward, but always do it in person.
What do you think? Tomorrow number 2.
Saturday, October 4, 2008
Owners: Do you want the truth?
I was talking to a small business owner client of mine the other day and he was complaining about what a terrible problem he was having with business falling off rapidly because his customers were so "annoying". I could not believe my ears. They were his customers, CUSTOMERS! Let them be annoying provided they still are customers and provide his living.
So I met with an associate of his and it turns out that the employees look bad, act bad and are condescending to the customers. They cuss, smoke and when they do provide service it is begrudgingly. So, I talked to the owner again. It was time for an attitude adjustment. Guess how the employees got such a bad attitude? From the owner and his management team. They all act like they are doing the customer a favor by being in business.
As usual, the owner asked me to "tell me what you really think". When am I going to learn. What they are really saying is "tell me what I want to hear", which I do not do. So I told him and his staff that they were the problem. They need to be customer oriented and provide the best possible service available. After all, what separates them from the other choices they have for the same service? The level of customer service and the desire for customer satisfaction.
Well it is too early to tell if they are going to take my suggestions or not. The beauty of being a consultant is that I get paid whether they take my advice or not. They appear to have understood and there are changes in process. I just hope it is not too late.
What do you think?
So I met with an associate of his and it turns out that the employees look bad, act bad and are condescending to the customers. They cuss, smoke and when they do provide service it is begrudgingly. So, I talked to the owner again. It was time for an attitude adjustment. Guess how the employees got such a bad attitude? From the owner and his management team. They all act like they are doing the customer a favor by being in business.
As usual, the owner asked me to "tell me what you really think". When am I going to learn. What they are really saying is "tell me what I want to hear", which I do not do. So I told him and his staff that they were the problem. They need to be customer oriented and provide the best possible service available. After all, what separates them from the other choices they have for the same service? The level of customer service and the desire for customer satisfaction.
Well it is too early to tell if they are going to take my suggestions or not. The beauty of being a consultant is that I get paid whether they take my advice or not. They appear to have understood and there are changes in process. I just hope it is not too late.
What do you think?
Tuesday, September 30, 2008
Executive Compensation
Well with all the yelling and screaming in both Washington and New York, it appears that the "emergency" requiring "immediate" action will have to take at least a little more time. The measure did not pass. Although I say "good" it is tempered by the knowledge that something will get done. I hope the markets and the financial industry figures it out on their own without the "help" from the government. One of the provisions that needs to be in whatever they finally do relates to Executive Compensation.
Having been around, mostly, small and family owned businesses all my business life, what some of these people get paid and the Golden Parachutes" they negotiate is pure greed. I am a free market person, but this is crazy. What can you do with $30 million that you cannot do with $15 million, or $5 million, etc.Can you imagine a company that is doing say $20 million in annual sales paying its CEO $1,000,000. Probably not. At this level the President would have to live on say, $300,000 per year or $25,000 per month. I could make it on that. Let's say the company is doing $50 million in annual sales and the CEO is getting $1 million or a little over $80,000 per month. Can you live on that?
The bill Congress proposed would have limited executive compensation to $500,000 if they were a bailout company. I think that is to low and maybe the limit should be maybe $4 million per year (or so says my barber). I agree. Again the Congress went overboard. How are we to believe them. They react so irrationally. Perhaps because of the Treasury Secretary and the head of the Federal Reserve did so too? Could you imagine Alan Greenspan reacting like this?
If you own or are involved in a Small business (annual sales of less than $25 million) or a family owned business of any size, use reason not greed to determine executive pay. Sure there can be perks, and should be, but if you keep it within reason nobody will fault you for being excessive and then at the end of the year if you have a pile of money left after all accruals and saving for a rainy day, do what Lincoln Electric (largest maker of arc welding equipment in the world) divide it up among all your employees. You want loyalty and quality, try doing that and see what happens.
What do you think?
Having been around, mostly, small and family owned businesses all my business life, what some of these people get paid and the Golden Parachutes" they negotiate is pure greed. I am a free market person, but this is crazy. What can you do with $30 million that you cannot do with $15 million, or $5 million, etc.Can you imagine a company that is doing say $20 million in annual sales paying its CEO $1,000,000. Probably not. At this level the President would have to live on say, $300,000 per year or $25,000 per month. I could make it on that. Let's say the company is doing $50 million in annual sales and the CEO is getting $1 million or a little over $80,000 per month. Can you live on that?
The bill Congress proposed would have limited executive compensation to $500,000 if they were a bailout company. I think that is to low and maybe the limit should be maybe $4 million per year (or so says my barber). I agree. Again the Congress went overboard. How are we to believe them. They react so irrationally. Perhaps because of the Treasury Secretary and the head of the Federal Reserve did so too? Could you imagine Alan Greenspan reacting like this?
If you own or are involved in a Small business (annual sales of less than $25 million) or a family owned business of any size, use reason not greed to determine executive pay. Sure there can be perks, and should be, but if you keep it within reason nobody will fault you for being excessive and then at the end of the year if you have a pile of money left after all accruals and saving for a rainy day, do what Lincoln Electric (largest maker of arc welding equipment in the world) divide it up among all your employees. You want loyalty and quality, try doing that and see what happens.
What do you think?
Friday, September 26, 2008
The Bailout
Since it is in the news so much, I decided to give you my opinion of what should be done relative to the "Bailout". I believe that the government should let them fail if they will. I do not think they will and I do not think it would be bad if they did. For years they made millions and evidently did not believe that the bubble would ever break. SURPRISE! Especially with Mortgage Backed Securities and Derivatives and default swaps(really unregulated, unloss reserved insurance); all of which are side-bets in my mind. I guess they did not "hedge" well enough. Based on the money that they made during this time, it seems that they would have amassed a large "loan loss reserve" in their own books and made arrangements for failure. Aren't these investment houses suppose to be able to help us plan for the future and increase real wealth? Huh, huh, huh?
So let them fail. I do not think that will happen. I think that they will find a legal and creative solution to the problem without government intervention and my $5000 dollar commitment. That is what it will take for each person in the US over 18 to pay for this Bailout. I am not sure of the details of the House Republicans plan submitted in contrast to the Treasury Secretary's plan, but it sounds pretty good. Granted I do not know all the nuances of this deal, but using fear tactics and moving so fast is also not good. In my business career there were very few situations where my senior managers came to me and said "We have to do this immediately" where I didn't say "well, then let's wait a day or two!"
The basic fear is that credit will dry up and businesses will not be able to do what they need to do credit-wise to meet payrolls, buy goods and services and purchase adequate inventories. Baloney!! If liquidity is the problem, and it is, they operate with less, sell off assets, reduce staff or in other words "hunker down" (Those are words being taught in finishing schools instead of the words cut back and spend less). Remember those words big, big investment banks! You have operated with such largess and lack of self control that you now want to be bailed out by small business and family owned businesses that operate day to day. Again, Baloney!
And finally. The word that describes the whole mess? GREED!
What do you think?
So let them fail. I do not think that will happen. I think that they will find a legal and creative solution to the problem without government intervention and my $5000 dollar commitment. That is what it will take for each person in the US over 18 to pay for this Bailout. I am not sure of the details of the House Republicans plan submitted in contrast to the Treasury Secretary's plan, but it sounds pretty good. Granted I do not know all the nuances of this deal, but using fear tactics and moving so fast is also not good. In my business career there were very few situations where my senior managers came to me and said "We have to do this immediately" where I didn't say "well, then let's wait a day or two!"
The basic fear is that credit will dry up and businesses will not be able to do what they need to do credit-wise to meet payrolls, buy goods and services and purchase adequate inventories. Baloney!! If liquidity is the problem, and it is, they operate with less, sell off assets, reduce staff or in other words "hunker down" (Those are words being taught in finishing schools instead of the words cut back and spend less). Remember those words big, big investment banks! You have operated with such largess and lack of self control that you now want to be bailed out by small business and family owned businesses that operate day to day. Again, Baloney!
And finally. The word that describes the whole mess? GREED!
What do you think?
Tuesday, September 23, 2008
Here we go.
Well I have wanted to do this for some time. After having been a consultant, business owner and top management employee for over 40 years, I decided that the world needed to hear what I have to say. That is not to say that I am always right, but I almost always have an opinion that is either right or very close to right.
So who am I. What follows is my brief Functional Resume. This will give you some idea of the scope of my experience and the industries I have worked. What is does not show is all my consulting assignments. Some of those companies are confidentials but the situations/problems handled have provided (along with the experience) an extremely wide variety of solutions, answers, knowledge and practical ways of managing.
I am going to tackle various business situations and areas of ongoing concern for small (under $50 million in annual sales usually) and family owned (includines spouse, children, inlaw and outlaw participants) businesses. So, please ask me anything. Really, anything about problems, planning, accounting, finance, HR, sales, marketing, supply chain, infighting, poor performance, hiring, firing, anything. If I do not know the answer (highly unlikely), I will find out or direct you to the right place.
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