ARE YOU A BAD BOSS?

Your staff avoids you. No one stops by your office, desk or “skypes” you to check-in. This is a probable sign that your employees are afraid of you or have simply lost confidence in your leadership.

Inability to make decisions without your input. You staff constantly asks you for advice on the smallest details. It’s likely you haven’t empowered your employees, or they’re just too afraid of potential consequences if they don’t approach you on everything. There’s definitely a balance so make sure you check out my colleague’s post (Stephen Lynch) about having an open door policy.

A high turnover. Look at how many people you’ve directly or indirectly managed and have resigned within 1-2 years. Leaving for more money is likely not the initial motivator. People typically leave their boss not the company (unless you have a terrible company culture). Quite obvious, but few fail to face this reality.

Former employees disappear, forever. Nothing says it more than anything if your ex-employees don’t keep in touch or you don’t get recommendation requests. Good bosses typically become mentors or role models for ex-employees.

Lack of feedback. You fail to communicate with your team and may not have set expectations, goals or timelines. Bad bosses often change their mind frequently leaving their team feeling off balance. You’re also not available to receive feedback about yourself. Most people like to see progress and to progress in their careers. It’s important that you provide timely feedback. Positive feedback is typically best and constructive feedback is important if something needs to be improved or corrected.

If any of the above is true, here are 4 simple tips you can use to engage your team and help you get out of that bad boss category:

1.     Create transparency. Don’t keep your team in the dark. Share your company's performance, track and communicate progress. It will help your team understand that the things they work on directly impact the company’s success and ultimately their own.

2.     Make work meaningful. Reinforce the importance of everyone’s role. Provide clarity and direction by defining both team and individual goals. Avoid ambiguity at all costs. This will help foster ownership and will help get things done.

3.     People-Focused Culture. Promote the sharing of ideas, suggestions and improvements. Recognize people for their achievements. Live your company core values and have your team nominate colleagues who meet different core values.

4.     Nurture employees and create a path for growth and opportunity. Create opportunities for career development and progression. Talk to your employees about their career plan. Does their current role make full use of their strengths and abilities? Provide feedback (both the good and constructive) sooner than later.

CONCLUSION:

Take the time to think about the points above and keep in mind that highly engaged employees are 26% more productive and on average their company’s earned 13% greater returns. Creating a more engaged workforce benefits the company, your team, and yourself.

EXCERPTS FROM WARREN BUFFET’S ANNUAL LETTER

"Investment is most intelligent when it is most businesslike." --Benjamin Graham, The Intelligent Investor

This tale begins in Nebraska. From 1973 to 1981, the Midwest experienced an explosion in farm prices, caused by a widespread belief that runaway inflation was coming and fueled by the lending policies of small rural banks. Then the bubble burst, bringing price declines of 50% or more that devastated both leveraged farmers and their lenders. Five times as many Iowa and Nebraska banks failed in that bubble's aftermath as in our recent Great Recession.

In 1986, I purchased a 400-acre farm, located 50 miles north of Omaha, from the FDIC. It cost me $280,000, considerably less than what a failed bank had lent against the farm a few years earlier. I knew nothing about operating a farm. But I have a son who loves farming, and I learned from him both how many bushels of corn and soybeans the farm would produce and what the operating expenses would be. From these estimates, I calculated the normalized return from the farm to then be about 10%. I also thought it was likely that productivity would improve over time and that crop prices would move higher as well. Both expectations proved out.

In 1993, I made another small investment. Larry Silverstein, Salomon's landlord when I was the company's CEO, told me about a New York retail property adjacent to New York University that the Resolution Trust Corp. was selling. Again, a bubble had popped -- this one involving commercial real estate -- and the RTC had been created to dispose of the assets of failed savings institutions whose optimistic lending practices had fueled the folly.

Here, too, the analysis was simple. As had been the case with the farm, the unleveraged current yield from the property was about 10%. But the property had been under-managed by the RTC, and its income would increase when several vacant stores were leased. Even more important, the largest tenant -- who occupied around 20% of the project's space -- was paying rent of about $5 per foot, whereas other tenants averaged $70. The expiration of this bargain lease in nine years was certain to provide a major boost to earnings. The property's location was also superb: NYU wasn't going anywhere.

Fundamentals of Investing:

• You don't need to be an expert in order to achieve satisfactory investment returns. But if you aren't, you must recognize your limitations and follow a course certain to work reasonably well. Keep things simple and don't swing for the fences. When promised quick profits, respond with a quick "no."
• Focus on the future productivity of the asset you are considering. If you don't feel comfortable making a rough estimate of the asset's future earnings, just forget it and move on. No one has the ability to evaluate every investment possibility. But omniscience isn't necessary; you only need to understand the actions you undertake.
• If you instead focus on the prospective price change of a contemplated purchase, you are speculating. There is nothing improper about that. I know, however, that I am unable to speculate successfully, and I am skeptical of those who claim sustained success at doing so. Half of all coin-flippers will win their first toss; none of those winners has an expectation of profit if he continues to play the game. And the fact that a given asset has appreciated in the recent past is never a reason to buy it.
• With my two small investments, I thought only of what the properties would produce and cared not at all about their daily valuations. Games are won by players who focus on the playing field -- not by those whose eyes are glued to the scoreboard. If you can enjoy Saturdays and Sundays without looking at stock prices, give it a try on weekdays.
• Forming macro opinions or listening to the macro or market predictions of others is a waste of time. Indeed, it is dangerous because it may blur your vision of the facts that are truly important. (When I hear TV commentators glibly opine on what the market will do next, I am reminded of Mickey Mantle's scathing comment: "You don't know how easy this game is until you get into that broadcasting booth.")
• During the extraordinary financial panic that occurred late in 2008, I never gave a thought to selling my farm or New York real estate, even though a severe recession was clearly brewing. And if I had owned 100% of a solid business with good long-term prospects, it would have been foolish for me to even consider dumping it. So why would I have sold my stocks that were small participations in wonderful businesses? True, any one of them might eventually disappoint, but as a group they were certain to do well. Could anyone really believe the earth was going to swallow up the incredible productive assets and unlimited human ingenuity existing in America?

Summary

When Charlie Munger and I buy stocks -- which we think of as small portions of businesses -- our analysis is very similar to that which we use in buying entire businesses. We first have to decide whether we can sensibly estimate an earnings range for five years out or more. If the answer is yes, we will buy the stock (or business) if it sells at a reasonable price in relation to the bottom boundary of our estimate. If, however, we lack the ability to estimate future earnings -- which is usually the case -- we simply move on to other prospects. In the 54 years we have worked together, we have never forgone an attractive purchase because of the macro or political environment, or the views of other people. In fact, these subjects never come up when we make decisions.

LEARNINGS FROM PRIVATE EQUITY FIRMS

Existing leadership teams can become too attached to decisions that were made in the past, particularly if the existing leaders were involved in making those decisions. If a Private Equity firm (or other external investor) were to take a financial stake in your company tomorrow, what changes do you think they would want to make?  

You don’t have to wait for someone to invest in your company to experience the benefits of seeing your business from an “outside in” perspective. Here is my take on an article from Booz & Co on the key lessons the world’s best performing Private Equity firms can teach business leaders.

Cash is King

If a Private Equity firm were to acquire your company, they often use debt financing to fund the purchase. This creates a real urgency to optimize the cash flows of your company to help repay the debt. To do this, they would aim to tightly manage your accounts receivables, streamline and optimize your inventories, and scrutinize all discretionary expenses.

Put yourself in their shoes. Imagine you have just invested in your business. Examine every expense item and categorize them into three buckets.

1. “Must have” (required to keep the lights on)

2. “Smart to have” (creates a future strategic advantage)

3. “Nice to have” (everything else).

The next step is to eliminate as many of the “Nice to Have” expenses as you can.

Core vs. Non-Core?

Optimizing cash is all very well, but building the long-term value of your company means going beyond financial engineering and cost cutting. In order for a Private Equity firm to successfully exit their investment they need to convince future buyers that they have positioned your company for long-term growth and profitability.

It seems counter intuitive, but as management thought leader Peter Drucker said, “The first step in a growth policy is not to decide where and how to grow. It is to decide what to abandon. In order to grow, a business must have a systematic policy to get rid of the outgrown, the obsolete, and the unproductive."

This usually means analyzing your product lines, service offerings, and office locations to assess their future profitability and growth potential. Some activities might be “Core” to your business right now, but they may not be the right activities for you to be investing resources in going forward.

I often say to clients, “You must continually pull the weeds to create a beautiful lawn”. It takes real courage to make these strategic decisions, but when you do, it frees up resources to focus them on the right “Core Activities” that will drive your long-term success.

Get it Done

In the first one hundred days of ownership, Private Equity firms have little appetite for socialization and consensus building. They feel a sense of urgency to implement the strategic changes they have identified.

Business leaders can learn a lot from the Private Equity firm’s need for speed. Yes, getting consensus and alignment about these changes is ideal, but you can’t please everyone, and waiting too long to implement the necessary strategic changes can profoundly impact your company’s future outcomes.

Right Management in The Right Bus, Going The Right Direction

Private Equity firms know that a strong management team is critical to business execution and the ultimately the success of their investment. Sometimes they invest in a company based on the strength of its management talent. Otherwise they will act swiftly to put the right management team in place. Research has shown that middle managers are the key to successful business execution.

As RESULTS.com CEO Ben Ridler says, “As a CEO, getting the right front line managers in place is critical to success. You have two jobs. Either you are coaching and developing these managers, or you’re looking for their replacement.”

Align Incentives

Private Equity firms pay modest base salaries, but add incentives to align everyone’s interests so that the staff share in the upside. They also share in the downside. Private Equity firms will reduce or even eliminate incentive payments if the company fails to achieve the agreed targets. Often time’s staff are given real “skin in the game” in the form of equity in the company. Because this equity is essentially locked up until the Private Equity firm sells your company, or lists it on the stock market, it aligns everyone’s long-term interests.

Make Performance Visible

Private Equity firms pay rigorous attention to a carefully chosen set of Key Performance Indicators (KPIs) that will drive the success of your business model. They make this performance visible, and to keep the managers and their teams focused on the most important metrics and projects that will move the business forward. Radical transparency drives business results.

Conclusion

Take a few minutes today to imagine yourself in the shoes of an outside investor who is performing due diligence on your company with the intention of investing in you. What would they identify that needs to change about the activities your company is currently performing, or how it is currently managed?

KEYS TO EFFECTIVE COACHING

Business coaching has gone from fad to fundamental. Leaders and organizations have come to understand how valuable it can be, and they’re adding “the ability to coach and develop others” to the ever-growing list of skills they require in all their managers. In theory, this means more employee development, more efficiently conducted. But in reality, few managers know how to make coaching work.

According to the 2010 Executive Coaching Survey, conducted by the Conference Board, 63% of organizations use some form of internal coaching, and half of the rest plan to. Yet coaching is a small part of the job description for most managers. Nearly half spend less than 10% of their time coaching others.

With such limited time devoted to coaching, organizations need to be sure their managers know how to do it right. To improve the quality and impact of your coaching efforts, start by giving your individual managers tangible information about how to coach their direct reports. Typically, managers meet their coaching obligations by giving reviews, holding occasional meetings and offering advice. For coaching to be effective, they need to understand why they are coaching and what specific actions they need to take.

Coaching focuses on helping another person learn in ways that let him or her keep growing afterward. It is based on asking rather than telling, on provoking thought rather than giving directions and on holding a person accountable for his or her goals.

Broadly speaking, the purpose is to increase effectiveness, broaden thinking, identify strengths and development needs and set and achieve challenging goals. Research has boiled down the skills managers need to coach others into five categories:

1.     Building the relationship.

It’s easier to learn from someone you trust. Coaches must effectively establish boundaries and build trust by being clear about the learning and development objectives they set, showing good judgment, being patient and following through on any promises and agreements they make.

2.     Providing assessment.

Where are you now and where do you want to go? Helping others to gain self-awareness and insight is a key job for a coach. You provide timely feedback and help clarify the behaviors that an employee would like to change. Assessment often focuses on gaps or inconsistencies, on current performance vs. desired performance, words vs. actions and intention vs. impact.

3.     Challenging thinking and assumptions.

Thinking about thinking is an important part of the coaching process. Coaches ask open-ended questions, push for alternative solutions to problems and encourage reasonable risk-taking.

4.     Supporting and encouraging.

As partners in learning, coaches listen carefully, are open to the perspectives of others and allow employees to vent emotions without judgment. They encourage employees to make progress toward their goals, and they recognize their successes.

5.     Driving results.

What can you show for it? Effective coaching is about achieving goals. The coach helps the employee set meaningful ones and identify specific behaviors or steps for meeting them. The coach helps to clarify milestones or measures of success and holds the employee accountable for them.

You should seed your organization with coaching role models. All managers need some guidance on the whys and hows of coaching, but most organizations can’t afford to train them on a large scale, so the least you can do is make an effort to create a culture of coaching. The key is to create a pool of manager-coaches who can be role models, supporters and sustainers of a coaching mindset.

When you select the right people and invest in their development and position them as coaching advocates, you plant the seeds for expanding coaching well beyond the individual manager-direct report relationship. Your role models demonstrate effective coaching both formally and informally, and they help motivate others to use and improve their own coaching capabilities.

Always link the purpose and results of coaching to the business. Managers have to know the business case for coaching and developing others if they’re to value it and use it effectively. Where is the business headed? What leadership skills are needed to get us there? How should coaches work with direct reports to provide the feedback, information and experiences they need to build those needed skills? Set strategic coaching goals, tactics and measures for the organization as well as including coaching as an individual metric.

Conclusion:

Finally, give it time. It’s not surprising that managers feel they don’t have enough time for coaching. Even if you make learning and coaching explicit priorities, time is tight for everyone. But as your coaching processes and goals become more consistent and more highly valued, in-house coaching will take root. Your managers will have a new way to develop and motivate their direct reports. Individuals and groups will strive to build new skills and achieve goals. And your business will be on track to a more efficient, comprehensive system of developing people.

NOT SUCCESSFUL AS YOU SHOULD BE

So with January behind you, how are those 2014 Goals coming along? Feeling down about your business these days? Is the broken economy hurting your sales and keeping you up at night? Need some motivation and tough love to help you stop pitying yourself? Well, here you go, here are13 reasons you might have in your head about why you're not as successful as you should be.
 

#1 Reason You Are Not As Successful As You Should Be – LAZINESS!!

I don’t think there’s an easy way to put this. I have to assume that you’re lazy. Every single successful person works their butts off to get where they are. It’s ok to be lazy. Just admit it. But don’t whine about not being rich and successful, Ok?

#2 Reason You Are Not As Successful As You Should Be – ENTITLEMENT!!

Only a few people in the world are part of the lucky ‘Reproduction Club’, neither You and me. We have to work to get what we want. Quit thinking you are owed something. You’re not. Get to work Now!

#3 Reason You Are Not As Successful As You Should Be – FEAR!!

You are afraid, plain and simple and afraid of looking silly. Afraid of what your friends and family will say. Are you afraid of everything? Look, you’re either going to stop being afraid, or you’re not. Nobody can convince you to stop. Imagine though... what awaits you when you stop with the fear excuses?

#4 Reason You Are Not As Successful As You Should Be – NEGATVITY!!

You may not realize it, but the people you associate with might be negative. They could be soul-sucking beings who don’t want anyone to be successful. Get rid of them, now! Surround yourself with successful people. People you want to be like.

#5 Reason You Are Not As Successful As You Should Be – STOP THINKING, START DOING!!

How much do you want to bet you have Analysis Paralysis? You think way too much about what you could or should do. Doers get what they want, and everyone else gets what they get. Stop Analyzing and start Doing.

#6 Reason You Are Not As Successful As You Should Be – NO GOALS!!

You plan nothing. You believe that someway, somehow, everything you always wanted will just magically happen. So you “play it by ear” and wait. You need goals to shoot for. Otherwise, you’re just treading water.

#7 Reason You Are Not As Successful As You Should Be – “THEY”!!

There’s no “They”. There’s no secret group of people that controls your success or failure. You’ve made that up to make you feel better about yourself. The truth is you, and you alone, control your success in life/business/everything. It’s easy to blame “Them” though, isn’t it? Don’t be Weak.

#8 Reason You Are Not As Successful As You Should Be – THERE IS NO “X” FACTOR!!

You can’t do it because you’re not pretty or smart enough. Or don’t have a strong personality? You don’t have the “X” factor? Wow, what an unbelievably lame excuse. The truth is that even jerks, idiots and boring people can be just as successful as anyone else. Your problem is you don’t believe it yet.

#9 Reason You Are Not As Successful As You Should Be – ARE YOU A TIME WASTER?

You’re a classic time-waster. You spend hours and hours every day working on not-working. You do things that aren’t productive. How are you ever going to get anything done, or reach any goal if you keep wasting time? You’re not. So you might as well give up now if you’re going to keep this path.

#10 Reason You Are Not As Successful As You Should Be – SOCIAL MEDIA IS B.S.!!

You spend way too much time in social media land.  You waste probably about 50% of your productive hours of the day doing this. The sad part is, you know it, but you can’t Stop. So, you can’t get anything done that matters.

#11 Reason You Are Not As Successful As You Should Be – YOU ARE THINKING TOO SMALL!!

You think way too small. You are constantly looking only a day or a week ahead instead of years ahead. Because of this, you never get anywhere, and you never lead; you always follow.

#12 Reason You Are Not As Successful As You Should Be – YOU DON’T WANT IT BAD ENOUGH!!

You don’t really want to be successful. Sure, you like to dream about it like everyone else. But in your heart you are afraid of what might happen if you really get it. That’s B.S. fear your brain is feeding you. Success is change, and it feels really, really good. Tell your brain to shut the [foolishness] up.

#13 Reason You Are Not As Successful As You Should Be – YOU DON’T BELIEVE!!

You never believed that it’s possible. Society taught you that only a few “exceptional” people get what they want. Everyone else should just settle. If you really want to believe that, go ahead. The rest of us will be at the front of the line because we believe. Believe and you will Achieve.

Jim Kukral latest book is Business Around a Lifestyle Volume 2.

PRIDE

John Maxwell writes, when you think of the word pride, does it strike you as positive or negative? There are certainly many positive types of pride. It’s good to “take pride in our work.” We like it when someone tells us, “I’m proud of you.” And nearly everyone wants to live in a neighborhood where people display “pride of ownership.” All of these expressions communicate a positive kind of pride: dignity, respect and honor, traits that we all can embrace.

But pride isn’t always positive. Pride can also mean conceit, arrogance, or superiority. This kind of pride is based on self-centeredness, and it’s destructive.

Selfish pride is especially destructive to relationships. That’s because the opposite of loving others is not hating them but rather being self-centered. The great writer and apologist C.S. Lewis had this to say about pride:

“The point is that each person’s pride is in competition with everyone else’s pride. It is because I wanted to be the big noise at the party that I am so annoyed at someone else being the big noise…. Now what you want to get clear is that Pride is essentially competitive, is competitive by its very nature, while the other vices are competitive only, so to speak, by accident.”

Pride gets no pleasure out of having something, only out of having more of it than the next man. We say that people are proud of being richer, or cleverer, or better looking than others. If everyone else became equally rich, or clever, or good looking, there would be nothing to be proud about. It is the comparison that makes you proud: the pleasure of being above the rest.

So how do we solve the problem of pride? I believe there are several steps we can take to counteract our tendency toward self-centeredness.

1. Recognize and Admit Your Pride.

C.S. Lewis said about acknowledging pride: “If anyone would like to acquire humility, I can, I think, tell him the first step. The first step is to realize that one is proud. And a biggish step, too. At least, nothing whatever can be done before it. If you think you are not conceited, you are very conceited indeed.” You will not solve a problem that you don’t know exists.

2. Express Your Gratitude.

Henry Ward Beecher said, “A proud man is seldom a grateful man, for he never thinks he gets as much as he deserves.” There is something about saying “thank you” that takes our eyes off of ourselves and puts them back on the blessings we’ve received and the people who’ve blessed us.

3. Practice Servanthood.

A person who is truly great is always willing to be little. But pride fights against servanthood, because a proud person demands to be served. Serving others requires us to focus on their needs rather than our own, and this also reminds us of how we are part of something bigger than ourselves.

4. Laugh at Yourself.

There’s an old saying, “Blessed are they that laugh at themselves, for they shall never cease to be entertained.” Once you begin to look for the humor in your behavior and situation, you find it everywhere. Prideful people take themselves way too seriously. By laughing at yourself, you begin to see how absurd we can all be sometimes.

If your pride pushes you toward performing with excellence, doing your best, and finding joy in the accomplishments of others, it’s probably helping you become a better leader. But if there’s even a hint of competition or self-promotion in it, it’s probably having a negative effect on your relationships. That can hurt both your life and your leadership. If that’s true, do what I try to do: shift my focus onto others and follow the tips above.

SUCCESSFUL PARTNERSHIPS

Many of our clients are in business with partners. They include: husbands and wives, brothers and sisters, fathers and sons, mothers and daughters, people who’ve been best friends since elementary school or associates who went into business because they happened to have their entrepreneurial moment together.

A successful partnership boils down to three things: communication, structure and the best person in the right job. Communication must be regular, open, non-assumptive, listening-based communication in order to maintain a foundation of respect and collaboration. Equally important is creating a mutually agreeable structure so that all partners understand their roles.  Lastly, is to identify the specific talents of the each partner and put them in the best position to leverage these talents.

Communication

Success lies in staying aligned and not falling into the non-communicative trap, is usually the first critical error that destroys partnerships. Communication continues to be one of the biggest obstacles for all business partners.

You probably ‘talk’ to your partner, however you might feel that you talk to them without address those critical issues, because you just don’t want to start a problem. But that doesn’t mean you’re communicating. True communication involves active listening; it’s about being open and non-assumptive. It’s essential that you hear your partner and understand his/her point of view on the business.

As partners, you should meet regularly with a clear agenda and defined objectives. If you have a board of directors, you include them. Either way, this regular meeting should be a coming together with the purpose of discussing vision, strategy, execution, implementation and plans.  From the ownership perspective, a regular meeting like this creates trust and unity. It also creates an environment to have deep discussions and sometimes confrontation in a safe environment with the partners and key persons involved. You emerge with a clear set of shared goals, values and direction for the company. This ownership meeting is a place to practice authentic regard for your partner and acknowledge each other’s contribution. Like most people partners need validation and appreciation and the best way to receive it is to create an environment to facilitate correct air of sharing and growing.

Structure, Structure, Structure

Next to lack of communication, the lack of structure is the second biggest obstacle facing business partners. By creating a structure this allows a regular venue to communicate as owners out of the business.  Furthermore, you define specific roles in the organizational structure so that you know who does what and who reports to whom.

The “owner” is not a position in an organization. Sure, you can get by with calling yourself that with your first or second employee, but as you grow -- and particularly when you have a partner -- getting organization and ownership clarity is critical. When you’ve defined responsibilities, each of you is freed to excel with purpose and direction.

You both can’t be CEO's

Co-CEO’s just don’t work. But, there’s always an exception to the rule – but it is not recommended. It seldom works and you can avoid a lot of difficulty by accepting it. Someone has to take on the chief leadership role and the other partner or partners need to report to them to replicate the proper structure.  Do you have a formalized system to identify the ‘best’ person with the ‘best’ talents to assume the role of the CEO?

Being in a business partnership presents challenges, especially when you add the emotional aspects of a family or friend relationship business logic seems to evaporate from the conversation.  But if you share similar values and vision, if you meet regularly as owners, create a united leadership and have clarity and agreement in your organizational structure, you’ll have a very strong foundation from which to grow your business.

What is your Exit Strategy?

When does your Exit Planning start?  Answer: The day you start your business.

Attorneys practicing Business Law have large billable hours from unhappy business partnerships that fail to properly plan for selling, transitioning or exiting the partnership.  Statistics prove that the majority of businesses fail to survive past five years, so why not have an Exit Strategy plan in place to make allowances for this provision? 

Have a plan or strategy in place for the “5-D’s” in Exit Planning:

·       Death

·       Disability

·       Divorce- Personal

·       Divorce- Business

·       Departure (or retirement)

It is also recommended that you sit down with your Financial Advisor, your Attorney, your CPA and your Business Coach annually. This annual review includes scrutiny of your:  Partnerships Agreement, Wills, Key Person Insurance, Buy-Sell Agreement, Exit Plan, Directors and Officers Insurance, Differed Compensation Plan, Long Term Disability, and Retirement Plan.

When was the last time you updated YOUR Plan, and make the provisions for “What If . . . .”