Training: Step 1 is to Prime The Pump For Results

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Training, like most words in business conjures up various images:

  • Class Rooms
  • Work-books
  • Certifications
  • Boot Camps
  • Lectures

I think of training in 2 buckets:

1)  Formal

2)  In-formal

The bullet points above are formal.

Formal, structured training certainly has its place in business.  There’s a tendency for senior management to expect immediate results or a “spike” in productivity, like some type of sales promotion increasing sales in the short-term.

In-formal training is where the action is.  It happens off the cuff.  Spontaneous.  Un-predictable.  Free-flowing.  Back and forth.  Sounds a bit like everyday life doesn’t it?

If you want to know how the lion lives, don't go to the zoo, go to the jungle.

 

The purpose of any training program needs to be about growing people, and then as a result, business growth becomes easier.[Continue Reading…]

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An Entrepreneur’s Lesson: Ditch the Data Room

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I don’t think I remember anything pleasant growing up and thinking about Homework.  Or Medicine.  Or Doctor Visits.

The entrepreneurial equivalent of Homework is a fancy term called “Due Diligence” (DD).  Think of it as homework on steroids, where $’s, jobs and cultures are all on the line when a business acquisition is taken place.  It typically happens after signing a Letter of Intent (LOI) to purchase the business, for a defined period of time, say 90 days.  

Chances are, if this business is bigger than “Mom & Pop” (say greater than a couple million in revenue), you may have access to a “Data Room.”  The Data Room should have plenty of info to do your homework on the business:

  • Financial statements, Tax records
  • Legal documentation
  • Marketing/Sales Collateral
  • Employee records, policies, grievances
  • Hard assets, including property, equipment, building info
  • Management reports:  Sales trends, costing info, customer info, suppliers, etc.

Exhaust the data room, know the info cold and keep your notebook of key questions and insights.  More importantly, give other trusted advisors access to it, you can’t catch everything in there.  Something will be viewed through a different lens, and you need that additional insight.

Then the most important lesson of them all?

Ditch the Data Room.  Quickly.  

A former colleague I had the privilege of working with had a favorite saying:

If you want to know how the lion lives, don't go to the zoo, go to the jungle.

The jungle is where the value is currently created in a business.  

It’s also the springboard, or quick sand for future value creation.

It is nearly impossible to understand a business by populating a data room with “Culture.”  By definition, culture is hard to put your finger on, but it means everything.

A toxic culture will swallow any value creation plan.  Develop a strategy early for unwinding the culture.  A few pieces I’ve written on Culture.  

The biggest challenge with assessing the culture?  It can’t happen by a simple “walk through” the operation.  You need to be imbedded, as if you worked there, so find a way to “get on the inside” as quick as possible.  

I would build into your Letter of Intent that you need at least 4 weeks inside access to the business as part of your DD, as the last and final step, and as a springboard to hit the ground running after close.  

Most owners will be hesitant here.  Stand firm anyway.  If you need to make concessions, concede the post time transition support.  If you can’t gain formal inside access as part of DD for at least a week, what does THAT say about what you are buying?  

It IS customary to have owner transition support for extended periods of time AFTER close.  The problem with this is obvious:

  1. The money is already spent.  Your investment thesis will likely change AFTER you get in the jungle.  Surprises alter ROI.
  2. What perspective will existing ownership lend AFTER the close?  THEIR perspective.  What THEY know, has already produced what’s already in the data room.

What matters is how NEW leadership will impact (good, bad) an existing culture.  The unknown for the entrepreneur is not their own leadership style, it’s the company and culture they will be inheriting.  Existing employees hold the keys to unlocking those unknowns.

On the “inside” means exactly that.  You are essentially parked inside the business, all day, full working hours.  It’s not complicated, but you need to do some basics…..

  • Invest in personal rapport first.  Get to know THEM, and start to establish trust.
  • Find the opinion leaders, connectors and people that know how the place runs, where the skeletons/challenges may be, how the morale meter registers.
  • Make sure you are listening 2x’s more than your talking.
  • Customer meetings and trade shows are the best way to go to get a feel for the “whys” behind the revenue line, so take advantage of all of those opportunities.

In short, you’re trying to find the “WHYs” behind the WHATs you learned from the data room.  Then, you’re developing your plan for the future.  Part of that plan is confronting the realities of the culture, and eliminating surprises. 

Business is fraught with opportunities to get caught up in Paralysis by Analysis.  If you’re going to be paralyzed by analysis, make sure you’re sitting in the jungle, NOT the data room.

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The Ultimate Inspiration For Action?

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Image credit: http://timemanagementninja.com/

 

DEADLINES.

Simple isn’t it?  The best, most effective tools to drive you towards your goals often are.  Simple tools usually drive results.

Unfortunately, Deadlines usually conjure up thoughts of stress.

Some may think about their college days and the “all-nighter’s” that were pulled to crash study for an exam at 8am.  In the real world it could be a product launch with a hard date.  Or a critical delivery needed for a customer.  Or just a last minute “fire drill” that disrupts a methodically planned day.

Any way you slice it, deadlines drive behavior as good as any “tool” in the business world.

Deadlines fall into 2 categories:
  1. Imposed by OUTSIDE forces –  These deadlines  act on YOU.  Your boss, customer, team, co-workers, basically anybody OTHER than you
  2. SELF-imposed – You act on IT.  Set by you, for a simple reason: To drive your actions towards an important goal, result, outcome.

Where is most of the stress?  No brainer, the ones that are NOT self-imposed.

What do average or poor performers focus on?  #1

What do top performers focus on?  SELF-imposed deadlines.

Top performers have common traits when it comes to managing their time.
  • They BLOCK OUT “thinking time”.  Could be for planning, goal setting, or reviewing their 20% of activities that are generating 80% of their results.  
    • Some companies actually structure this into their employee’s week.  Google is famous for allowing their employees to spend 20% of their week on discretionary activity.  You want innovation; you need to allow time for it.
  • They match the most important activities at a time of day when their energy is highest.
    • Morning people don’t schedule critical, high mental energy activities at 7pm.
  • The “big goals” are broken down into smaller steps.  Those smaller steps have deadlines.
    • How do you eat an elephant?  One bite at a time.  If you want to start eating it, give yourself a series of deadlines.

Excellence and learning from other’s go hand and hand.

To learn about other people’s habits, you need to get in the rhythm of asking solid questions that help YOU learn things that will make a difference in your results.  

Ask enough different people great questions and you will see some themes emerge.  Some starters….

  • How do they structure their day?  Their week?  Their month?
  • What % of their deadlines fall into bucket #1 vs #2?
  • Is their planning methodical or random?
  • Do they consider themselves organized or not?  How do they define “organization?”

You will likely find elements that extend beyond my big 3 common elements of block out, matching energy, and breaking down.

I would love to hear what you learn or see as other common traits of effective time management….drop me a comment at the bottom of post!

 

Image Credit & A Great Resource for Time Management:

http://timemanagementninja.com/

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4 Reasons the College President Sleeps Well at Night….While Their Industry Awaits Disruption

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I can’t think of another industry that is more “ripe for disruption” than the higher education market.  

I’m not sure if being the President of a University would excite me or leave me up at night in cold sweats.  Probably both, but I suspect that most Presidents are sleeping well at night.  It reminds me of  the music, book, and traditional retailing industries overall.  These are industries that have long histories of stability that were turned on their head when a better, sometimes more efficient (ie cheaper) alternative came along.  I’m sure those companies did not see the disruption coming either.

While positive changes in higher education are certainly happening, it does not  seem to recognize the magnitude of what could lie ahead related to “disruption.”  So I will write this post as if I were the President of your beloved Alma Mater, commenting on his or her ability to sleep at night.

What Excites Me Leading The University:

1)  I sell a product that falls into the “no brainer” camp called a college education.  Employment opportunities, lifetime earnings and the overall “intangibles” of a college education (vs not having one) are numerous and in black and white numbers reported by the US census.

It’s worth PERSONALLY envisioning where YOU would be, had you NOT spent your time in college, and compare that to where you are now.  Chances are, you feel great about your college investment.  While your college experience may not be credited with 100% for all your life’s blessings, I do suspect it would be high on most people’s list.  As a result, these good feelings tend to be generational and self-sustaining, creating long term inertia and little need for fundamental change in the industry.  If it worked for me, than by golly that’s what I’ll do form my kids!  It is a self perpetuating cycle that leads to more of the same.

Unemployment and Earning comparison of education levels

 Back to the President….

It’s fun to market a “no-brainer, gotta have!” product that is universally recognized as being the link to “game changing” life outcomes as an advanced education is often linked too.  So my faith in PRODUCT, scores a perfect 10 on my ability to sleep at night.

2)  Don’t take my word for it, the population recognizes these facts, and their actions prove it over the past 50 years.  In 1950, about 5% of the population had a bachelor’s degree.  Today, that number approaches 1/3.

More importantly, that means there are tons of growth opportunities that lie ahead.  While there has been massive growthnearly 2/3’s of the population have NOT obtained that bachelors degree.  Plenty of HUNTING ground for new customers.  It’s great to be in the 3rd inning of a game that looks like we are winning by a wide margin.

Education Attainment of Population 1947 to 2003

 3)  When you have a GREAT product proposition, and more and more customers flocking to your door, the laws of supply and demand tend to be in your favor.  What does this mean?  PRICING POWER.  When you have the ability to price your product north, that creates more opportunities for re-investment (faculty, buildings, technology, marketing), and is simply less stressful than industries engaged in the race to the bottom.

And how has college tuition/fees been priced relative to overall inflation?  This chart sums it up.

College inflation vs overall inflation

 What’s important to Note:  While my factors #1 & 2 could RELATE to the pricing reality, it may not necessarily have DRIVEN the price of college increases.  In statistics, there is a saying:  “Correlation does not imply causation.”  Nevertheless, if I’m the President, I would rather see this chart than the reverse.

4)  There is a “big brother” in our corner, called the federal government.  They recognize the USA’s competitive position in the global economy is linked to a highly skilled and educated work force, and they put their money where their mouth is with grants, cheap loans, etc.  “Making college affordable” is a theme that does not seem to be going away anytime soon.

Abundant money supply with a growing consumer base also provides a “sleep well at night factor” that approaches a 10.

Incidentally, this may be a contributing factor to cost escalation as well.

Those are 4 big factors as President of this esteemed University I feel great about.  I have a great product.  More and more customers show up every year.  I can grow rapidly, as more people haven’t experienced this product than have.  And  I can price it strong, and while I wouldn’t abuse it, there seems to be no limit to pricing well above the overall inflation rate, the past 15 years prove it.  It’s also nice to have a pretty big check-book in my industries corner called the federal government.

Are there things that concern me?  [Continue Reading…]

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