Archive for the 'family business' Category

Are partnerships really only good for two things?

When a partnership works, it’s a beautiful thing. When it doesn’t, it defines ugly.

Once, during a conversation with a mentor about partnerships, he made this declaration: “Partners are only good for two things: sex and dancing.”

My mentor’s personal experience led him to make that indictment. My experience has led me to be more thoughtful, but I still advise anyone planning a business partnership to consider his rude but worldly comment as a handy caution to purge their plans of naivete.

A business partnership should be entered into with a healthy dose of reality about the human element involved. My friend, David Gage brings sunlight to this reality in his book, The Partnership Charter, wherein he writes, “Business people are experts in what they do, but they’re not in how to be partners.” Boy, howdy, is that true!

If you’re considering a partnership structure for your business, Gage recommends asking yourself, and your potential partner, the three questions below, which are followed by my thoughts.

1. Why do I want a partner?
Having a partner means you can share the work and the risk. But it also means you have to share the decisions and the rewards.

For a partnership to work, all parties must place a higher value on the advantages of shared work and risk than on the efficiency of making unilateral decisions and keeping all the loot.

2. Are there better alternatives to taking on a partner?

Just like in a marriage or any other relationship, both parties have to bring something of value to the table. Examples could range from experience, to skills, to contacts, to capital.

The advantages of each partner to the endeavor should be identified, quantified and valued. Then each partner must determine if other alternatives to acquiring these benefits - and there are always alternatives - are more or less valuable than those of a partnership.

3. Is my prospective partner the best candidate?
If, after thoughtful and analytical evaluation, you determine that you prefer the partnership option, remember, that decision isn’t the same as who should be your partner.

When President Lincoln said at Gettysburg that “…all men are created equal,” he wasn’t talking about business partners. The person you’re considering may not be suitable for your, or any other partnership.

Now here are three of my quick partnership questions.

4. Work ethic: Are we compatible?
All small businesses have more work to be done than people to do it. Don’t take a partner unless you know he or she understands and accepts this commitment.

5. Vision: Is ours compatible?
Your views on the development, growth and ultimate dissolution of the business don’t have to be identical, but they must be compatible.

6. Values: Do ours align?
If you had to rank all the considerations for forming a partnership, most of the factors could be moved around, depending on the circumstances. But the issue of shared values is always going to be the numero uno, default, go/no-go factor. No exceptions. Immutable. Non-negotiable.

If your values are misaligned, all the money and success in the world won’t result in a successful partnership. Believe me - I’ve seen more than one misaligned-values train wreck. It’s as ugly as ugly gets.

Value factors to consider include, but are not limited to: devotion to ethical behavior; how to treat employees; is regard for customers transactional or relational; intellectual honesty and sense of fair play.

Last two points: Don’t begin your partnership without a plan - in writing - of how it will be dissolved. If you read my recent column about neurotics and character disorder, never go into a partnership with someone who has the latter. Every problem will always be your fault.

Write this on a rock … Do the same due diligence on acquiring a partner as you would a business.

Are you looking for answers in the wrong places?

This is a story about three small business owners who had one thing in common: a wise man named Luther. Oh, by the way, Luther is their janitor.

On Mondays, Luther cleans the offices at National Supply Co., Inc. Sometimes he talks with the founder, Mr. Gilbert.

One Monday afternoon Mr. Gilbert said, “Luther, I don’t know how long I can survive.”

“What’s wrong, Mr. G?” Luther asked.

“It’s those big-box competitors,” Mr. Gilbert said. “I’ve looked under every rock for ways to lower our prices and increase advertising, but I just can’t compete with those guys.”

“Maybe you’re looking in the wrong place,” Luther offered.

“What do you mean?” Mr. Gilbert asked.

“Those big competitors will always be with us,” Luther reminded him. “Why don’t you emphasize the value of the human connection and customized service that only a small business like yours can deliver? Those two things alone are worth more than anything the Big Boxes offer.”

On Wednesdays, when Luther cleans the offices at Central Data Corp., he often visits with the owner, Sarah.

“Luther, I always assumed my kids would take over my business, but now it doesn’t look like that’s going to happen,” Sarah lamented one day.

“Why aren’t they interested in the business?” Luther asked.

“I’m stumped, she said. “I’ve shown them the opportunity and how profitable the business can be. What else can I do?”

“Maybe you’re asking them to look in the wrong place,” Luther suggested.

“What do you mean?” Sarah asked.

“Sarah, I’ve noticed how much you love what you do,” said Luther, “even when times were tougher and things weren’t so rosy. From what I’ve seen, being an entrepreneur is as much about nourishing the spirit as growing the bank account. Help them think about that.”

On Fridays, Luther cleans the offices at Westco Dynamics, Inc. Mr. West usually talks with Luther for a few minutes, but he seemed pensive today.

“Luther, my family was so poor that we struggled just to survive,” Mr. West said. “When I left home, I vowed to never be that unhappy again.”

“Mr. West, it sounds like you’ve got something stuck in your craw,” Luther observed.

“Aw, it’s nothing,” Mr. West fibbed. “It’s just that, with all my money and stuff, I still can’t stop looking for ways to make sure I’ll never be poor again.”

“Maybe you’re looking in the wrong place,” said Luther.

“What do you mean?” Mr. West asked.

Then Luther said, “You’ve been motivated by the fear of being poor instead of the joy of creating something from nothing. Try finding happiness in knowing that you provide valuable products and services for your customers, and jobs and income for your employees and their families. Remember, money and stuff only give you options, not happiness.”

Write this on a rock … When you’re looking for answers, make sure you look in the right places.

Why trust is a business best practice

Are you familiar with the term “dysfunctional family?”

The simple definition is, a family whose members don’t work and play well with each other. Such relationships typically create emotional, mental, sometimes even physical distress, and/or estrangement.

Sadly, we humans also create dysfunctional businesses. Perhaps this definition will sound familiar: A dysfunctional company is one whose teams don’t work and play well with each other. Such relationships typically create emotional, mental, sometimes even physical distress, and a casualty list.

Someone once said, “Friends we choose – family we’re stuck with.”  Since we get to choose where we work and who we hire, why are there dysfunctional businesses?

The answer is actually quite simple, and it’s the common denominator in both businesses and families: human beings. If your family, or company, is dysfunctional, it’s because of the behavior of the humans.

Humans aren’t inherently bad, but we are inherently self-absorbed. And one of the by-products of self-absorption is self-preservation. When self-preservation shields are up, mistrust flourishes, goals go unmet, and failure is likely. When shields are down, productivity, creativity, and organizational well-being are evident. But the latter only happens if the stakeholders believe there is a basis for trust.

If your organization is not accomplishing its goals and making progress, look around to see if there’s more self-preservation going on than teamwork. Where evidence of individual and departmental self-preservation is found, you’ll also find lots of dysfunction, but not much trust.

In his book, “Built On Trust,” my friend, Arky Ciancutti, goes so far as to say that trust is “…one of the most powerful forces on earth.” He further states that the two most powerful trust-building tools are closure and commitment.

Closure is implied when there is a promise to deliver by a stated time. It manifests when performance happens or, in the alternative, a progress report is delivered in advance of the date.

Commitment, Arky says, “is a condition of no conditions.” When the relationship between two parties is built on trust, there are no hidden agendas. And while commitment may not always deliver the end product, it does guarantee a report about the progress.

Even though closure and commitment are skills that often must be learned, you’ll find willing participants in your employees, because human beings desire trust.  If your organizational culture isn’t built on trust, it’s not the employees’ fault. Trust and dysfunction have one key thing in common: they’re gravity fed. They start at the top and roll downhill.

Humans perform better in organizations built on trust.  Knowing this, successful managers demonstrate trust-building behavior and instill it in others as not only the right thing to do, but as a business best practice.

Write this on a rock — If organizational dysfunction is a poison, trust is its antidote.

Jim Blasingame is author of the award-winning book, The Age of the Customer: Prepare for the Moment of Relevance.

A father’s tough love is the harder job

This is Jim’s traditional Father’s Day column.

As the father of an adult daughter and son, plus the grandfather of four knucklehead boys (Hurricane, Tornado, Crash and Train Wreck), I’ve learned some things about love.

All the hours logged as Dad and Poppy have often caused me to contemplate how different are the roles of mother and father, especially in the overt demonstration of parental love.  It’s fascinating how the manifestation of this love differs between mother and father-biologically, emotionally and experientially.

A mother’s love, at once sweet and fierce, is observed in almost all animals, not just humans. No doubt you’ve heard this metaphor: “… as sweet as a mother’s love,” and this warning: “Don’t get between a momma bear and her cub.” I have been a witness to, and the recipient of this kind of love, and there truly is no other force in nature like it.

But it troubles me that there are no corresponding sweet references to a father’s love. In fact, a human father’s love is more often associated with unfortunate references such as, “tough” and “discipline.” And here’s a warning no one has ever heard: “Just wait ’till your mother gets home!”

Could this be why Father’s Day is not quite as big a deal as Mother’s Day? I’m just saying …

Mothers occupy the pinnacle of parental love-with justification. And not to take anything away from them, but let’s be honest: since a mother’s sweet love is as primal as the miracle of birth, they don’t have to work too hard to deliver it. But there is a uniqueness about a father’s love that deserves a better rap. Here why:

Unlike a mother’s sweet love, a father’s tough love does not exist outside of homo sapiens.

When a father’s parental toughness is required, especially when applied to an indignant recipient (read: teenager), it requires a love that has found the courage to endure a negative response and a willingness to defer gratification-sometimes for years.

No one is more keenly aware of the distinction between the application of these two demonstrations of love than a single parent (especially a single mom), where both kinds are required of the same person, perhaps within minutes.

Mothers, please forgive any paternal bias you may detect, but here is my conclusion about parental love: The only force in the universe that comes close to a mother’s sweet love is a father’s tough love. But the latter is the harder job, and the return on investment almost always takes longer.

Write this on a rock … Happy Father’s Day, Dads. You’ve earned it.

How vacations reveal American Dream may be in jeopardy

For several years we’ve polled our small business audience weekly about issues and conditions that impact them.

Whenever a question is seasonal or a recurring issue, besides serving that poll, the responses often produce a bonus. For example, the potential to identify year-over-year trends, or illuminate a current market trend.

In last week’s poll response, we scored both of these bonuses. The subject was a seasonal one that’s almost unique to small business ownership – “Will you take a vacation?” – with three response options: 1) “I’ll take an entire week off;” 2) “Only mini-vacations, like a long weekend;” and 3) “Vacation? I can’t even take a day off.”

This year everyone moved. Historically the real vacation group fluctuated close to 50%. I was happy to see our new poll had almost six of ten (59%) respondents allowing they were taking a week off, whether to go incommunicado, or expecting to check in. The long weekend responders in the middle thinned out compared to past years, while the sarcastic, “What’s a vacation?” bunch increased.

The classic evolution of time off for a business owner looks like the inverse of our response options. In the beginning it’s, “What’s a vacation?” then you graduate to long weekends as the business matures, and finally to a full week off, or more, at maturity. Maturity means having your organizational and capitalization stuff together.

This week’s response also supports two forecasts I made in 2009.

As the Great Recession technically ended, I predicted small businesses would increasingly diverge into two categories: they would either become stronger, or inevitably erode their equity and credit and go out of business. That’s what I’m seeing in the responses to our vacation poll this week. The sector that formerly could only take off a few days is diminishing because they’ve either joined the organizationally and financially stronger ranks, or gone the other way toward extinction.

Historically speaking, it would be intuitive and accurate to think that the no vacation group would include startups, rather than just declining businesses. But I also predicted in 2009 that there would be fewer startups in this economic recovery cycle. As you may have seen reported by real research organizations, my startup prediction, unfortunately, has come to pass. According to the U.S. Bureau of Labor Statistics, there has been a steady, 10-year decline in businesses less than one year old, and the category total is 10% fewer today than 20 years ago.

So our vacation responses indicate a barbell effect happening on Main Street. And it’s good news that so many small businesses have survived and become stronger. But since every business, large and small, begins as a startup, the overall decline of entrepreneurship in the U.S. does not bode well for the future robustness of the U.S. economy or the business ownership component of the American dream.

Write this on a rock …
If small businesses were a plant or animal species, it would currently be classified as threatened, on a path toward endangered.

POLL RESULTS: Will you give your business a vacation from you this summer?

The Question:

Will you give your business a vacation from you this summer?

28% - I will completely disconnect for at least a week.

31% - I will take a week off, but will be checking in.

25% - I can only handle long weekends this summer.

16% - Are you kidding? I can’t even take a day off!


Jim’s Comments:

Almost every year since we’ve been doing this online poll, we’ve asked about vacation for small business owners. Looking at these historic responses we saw that taking a whole week off has generally fluctuated on either side of 50%. But this year, I was happy to see that almost six of ten of our folks were going to take a week off, either to completely disconnect or to check in. This year, those who can only handle a couple of days at a time dropped, while those who can’t take any time off increased.

I’m going to have more to say about this in next week’s Featured Article, including how what I believe is a connection between these responses and the current condition of the Main Street economy. Stay tuned and thanks for contributing. Don’t forget to take our new poll below.




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