I think there's nothing more exciting then imagining what the future holds or what your life might be like 5, 10, 15 years from now.
Some of us daydream about the trips we'll take or where we'll retire.
Those dreams might also be about what our business looks like, how much money its making or how many people it employs. Maybe its the number of cities or states where it operates or about being recognized as an industry leader.
Recently, I've met several business owners who want to exit their business in the next 5 years.
Some want to sell.
Others want to step out of day-to-day operations while retaining ownership.
Five years seems like plenty of time to make that happen.
It would be if they had been organizing and building their businesses with that end result in mind.
Don't get me wrong. These are what most of us would consider successful business owners.
They create jobs, offer award winning products and services, deliver superior results compared to their competitors, and have been around for a while. They have good bones.
But being able to exit requires more than revenue and profit.
For this dream to become a reality they need to get super clear about the current state of their business and then identify what shifts need to occur in their thinking, operations, org chart, compensation structure, and revenue model that will enable one of two things:
1. The business can run without them and generate enough net income to
- pay the owner enough to live the life they want,
- competitively pay the executive(s) needed replace the owner, and
- create sufficient profit and cash flow to support continued growth.
2. The business can be sold and
- run without the current owner without losing value,
- have sufficient resources to support long-term growth, and
- adds immediate value to the new owner's portfolio with a clear path to continued/increased profitability.
This means that any owner who wants out of day-to-day operations in the next five years needs to
- Pay themselves competitively and consistently - i.e. what they would pay someone to replace them
- Create the process documentation and invest in the technology needed to make work replicable and as error free as possible
- Invest in hiring, training, managing, coaching and advancing talented people who can execute and achieve business goals
- Work with reliable suppliers, distributors, professional service providers, and vendors
- Create a portfolio of differentiated products and services that are competitively priced
- Generate sustainable reoccurring revenue
- Diversify revenue so its not dependent on one customer or business line
- Maintain accurate and up-to-date financial records including forecasts and KPIs
- Demonstrate consistent profitability and positive cash flow
The business has to be able to run without the owner and the brand needs to be distinct, reputable, and recognizable in the industry.
Your business is only as healthy, and potentially saleable, if its customers, employees, market position, financial position, and assets are strong and reliable in ways that can be tested and evaluated. There can't be any skeletons in its closet, discrepancies in its documents, or questions about ownership or legal/regulatory compliance.
A potential buyer will also want to know about your personal financial position. They are evaluating whether or not they want to become you - the owner. It only makes sense that they would want to be confident that the business will consistently contribute to their personal wealth and not be a financial drain. Similarly, if you want to step out of day-to-day operations and retain a regular income from the business you have to replace yourself at market rate.
This last part usually means the business has to start doing what it has not yet done or probably isn't doing on a regular basis - provide you with a consistent, competitive, market rate income and generate enough profit so you have money to invest in a new senior level hire.
So if you're wondering where to start, this is the place. Make sure you're paying yourself what your job is worth. Then
- Look at what people are making to run companies like yours. How does it compare with your monthly salary and/or draws?
- If someone had to step in and run your business without you tomorrow, how hard would it be for them to keep things going?
- How profitable is the company? Specific clients or products?
- What story do your monthly financial statements tell?
Asking and answering these questions will help you get in touch with the reality of your current state of operations. No judgement. No shame. No shoulda/woulda/couldas.
You run your business. You are not your business. So anything that you find that you want to do better or differently isn't a reflection of some personal shortcoming. It just is what it is.
And it can be different if you want it to be.
Remember, no one builds a successful business alone and no one prepares for an exit by themselves.
So if exiting the day-to-day operations of your business or possibly selling it to someone else is something you might want to do, start looking at your business through that lens.
Be curious about what you learn.
Ask for help.
Forgive yourself.
Dream.
A lot of entrepreneurs I know struggle with being seen.
Most of them aren’t Elon Musk.
They’re more like Bill Gates. They let their business speak for them.
However, without a Microsoft-sized budget (and marketing team) it’s hard for your business to speak for itself without some help from you.
Being seen - through social media posts, websites, podcasts, articles, interviews, books, ads, etc. is an integral part of brand building for most small businesses.
Customer want to connect with the person behind the brand.
You want people to understand your passion and drive- why you do what you do and why they should care enough to buy what you’re selling.
Yes, the more visible you are the more likely it is that you may attract some detractors, perhaps even some haters.
On the flip-side, say nothing and the people who are already looking for you and what you do can’t find you.
And they will do business with the people they can find.
So, if you care enough about your idea to create a business.
And you care enough about your business to make it profitable.
It’s time to be seen.
Not sure where to start, follow my lead!
I was recently featured on the Innovabuzz podcast hosted by Jurgen Strauss.
https://youtube.com/watch?v=j_rkYQp8oME%3Fwmode%3Dopaque
And in August you might have seen/hear me on Conversations in the Nic of Time with Nicci Roach.
https://youtube.com/watch?v=avUocdfMiCY%3Fwmode%3Dopaque
And Yinka Ewuola was kind enough to experiment with a Cash Chat live on LinkedIn a few weeks ago.
https://www.linkedin.com/video/embed/live/urn:li:ugcPost:6987814075288141826?wmode=opaque
At some point since you launched your business you’ve probably asked yourself
Does every business owner and entrepreneur feel like this or is it just me?
It’s not just you. Every client or colleague I talk to has thought to themselves
- When does this get easier
- I’m doing so much, so why do I feel like I’m not getting anywhere
- Am I doing the right things
- Why am I’m exhausted and feel like I don’t have much to show for it
- I have so many ideas, how do I choose which one to pursue
- I know what to do, why can’t I do it
- Why am I doing this
Feel better knowing you’re not alone?
Good.
Ready to feel different moving forward?
Great!
To help you get started, I recommend using this end-of-year/beginning-of-next reflection time to
- Celebrate all the things you’ve accomplished (especially the small things that often get overlooked)
- Sharpen your vision for your business by getting as specific as possible about your desired end-result - what success looks like for you
- Translate your desire into action by setting specific goals for the year and working backwards by quarter, month, and week to dial in your focus
It’s usually with steps two and three where you may want some help.
That’s why the next step is incredibly important.
Now ask yourself, am I ready to do something different? Am I ready to work with someone who can help me feel more confident, capable, and competent in my role as a business owner?
In my experience, the best time to engage a business coach is when you’ve decided
- I don’t like how I’m feeling, and
- I’m ready to work with someone to get different, better results than I’m getting on my own.
To help you identify whether you’re ready to start talking to coaches to find the right one for you,
I’ve created a short self assessment to help you tune into what you’re feeling and get more clarity about what changes you want to make to take your business from where you are to where you want to be.
It’s a mix of questions that I hope will help you get in touch with your feelings about what you’re experiencing and whether you’ve had enough. Likewise, if you’re ready to do different things to get different results, this will help you start to identify which improvements will produce the biggest result for you.
If you’re not ready, that’s OK. This exercise will still help you decide where to focus your efforts moving forward.
But if you’re ready to start talking with coaches to find someone you think can help you get the results you’re looking for, now you’ll have a good idea of what you’ll want to accomplish together and what successful outcomes will look and feel like for your business. There’s nothing more you need to do to prepare to engage a coach.
Ready to explore your coaching options?
Send me an email and we'll talk about how I can help.
You’ve been running your business for a while.
In a lot of ways, it’s given you what you wanted – more time for family, flexibility, autonomy, and independence.
But you’re still not paying yourself consistently or as much as you want.
Being a business owner is some of the hardest and most rewarding work you can do.
I want to help you make every ounce of time, energy, passion, and creativity you pour into your business pay you back 10-fold in financial abundance and personal fulfillment.
I want to help business owners do more than replace a paycheck.
I think it's important to start the conversation by asking: What you want your business to do for you financially?
Not what it has done or what it can do.
What do you WANT and DESIRE for it to do?
Think about near and long-term financial goals. But don't let current circumstances (or imagined future circumstances) stop you from getting crystal clear about what financial rewards you want your business to create for you, your family, and your community.
Think about how much money that will allow you to take home to pay for day-to-day expenses. How much you want to save for retirement, vacation, or home improvements. What kind of financial future you want for your children or the resources you want to be available to help you take care of older relatives. How you can support the people and causes you care about most.
Think about how it will feel to have financially abundance - so much so that your cup runs over with choices and opportunity. Imagine how you will spend, save, and invest to grow your business working only as much as you want, when you want, and with whom you desire.
Write down how it feels and what it looks like. Visit this place often. Use it as your guide. It will help you identify what actions will move you closer to that reality.
Write down the numbers. Think about where you are, where you want to be, and what it will take to get there.
Not sure about that last part?
I've created a spreadsheet to help you work backwards from what you want to spend and save, to figure out what your revenue and profitability goals need to be.
You can download the spreadsheet template here and find a short video tutorial here. (passcode 7Vidfqo&)
This example is a place to start.
Maybe the revenue you're generating and what you're paying yourself isn't where you want it to be.
Or perhaps you're already doing WAY more than replacing the paycheck you had at your last employer.
In either case, I hope you'll use this template to visualize the revenue needed to take you to the next level.
I hope this exercise gets you excited about what's possible and thinking beyond what your business is doing for you right now.
Your goals can be as modest or as ambitious as you want them to be. The important thing is that they're yours and that they're based on what you desire, not necessarily on what is currently true.
Are you excited?
Let's channel that excitement into figuring out how to make these goals real.
This means more thinking (and some calculations) about your
- Product and/or service mix
- Pricing assumptions
- Client/customer mix
- Marketing strategy
- Sales strategy
- Renewal and upgrade strategies
And, of course, the expenses related to making, marketing, selling, and delivering your products and/or services.
After that, it's all about consistent execution fueled by your excitement and enthusiasm about what's possible.
I know you'll start strong.
And I know staying strong is a struggle.
As an owner operator and player coach, you're probably working in your business far more than you're working on it. You're probably used to making a plan, getting started, closing new business, and then pausing your business development activities to take care of the business you just closed.
At some point, those projects end, clients cycle out, or you realize you still need more new business to hit your revenue goals.
To generate something means to cause something to come about or to bring into existence.
To generate revenue you have to consistently do the things we call marketing, sales, and customer service to create the result you want.
Knowing this and doing this are two different things.
I have no doubt that you know this. That you believe this. And that it is incredibly hard for you to do this.
It's ok. You're human. This is normal.
Every high-achieving person has someone (or many someones) helping them do the things they know are necessary for success. People like me in myriad industries and parts of life love helping people like you plan and execute a pathway to success on their own terms.
It's never too late to get started.
We're experiencing inflation.
There's talk of recession.
You're getting nervous.
You're a planner. And you plan top get ahead of this.
A quick search for ideas leads you to countless articles with "5-steps" to take to prepare your business for the recession.
Recession or no recession, there are some things you can always be doing to make your business more resilient.
First, what does having a resilient business mean?
For me it meant building business and financial models that could weather a 128% decline in revenue from 2019 to 2020 and still sustain me, my family, and my business.
A business that in 2021 could recover most of revenue lost the year prior and increase 2022 revenue by 48% over 2019.
I’m not saying I knew I could make it through the pandemic relatively unscathed and bounce back.
What I knew was that if I was going to own my own business - be my own boss - I had to be clear about a few things right from the start.
- I wasn't replacing a paycheck. It had to do more.
- I wasn't going to live client-to-client or fiscal year-to-fiscal year.
- I wouldn't grow the business at the expense of not paying myself.
- It was my responsibility to make sure the revenue and expenses were managed well.
Were all things things true from the outset?
No. But it wasn't long before they were.
And I'm still getting better at creating a business that consistently gets better at attracting my ideal clients - interesting, driven, creative business owners who I can help build sustainably profitable companies.
So what does this have to do with building a recession-proof or resilient business?
Let's break this down a little more:
MORE THAN A PAYCHECK
I didn't want to replace my income. I started my business to make more money than my current job was paying or a comparable job would pay me in the future.
When I think about what my business needs to do for me, my family, and my community the answer is that it has to provide MORE than enough.
For me and my family that means being able to generate I want to take home every month to pay the bills, add to short-term savings, increase retirement savings, and to pay the taxes on my net income.
For my community it means having more than enough to make donations of time, talent, and treasure.
For my business it means having what is needed to fund operations, maintain a reserve, and have profit left over for whatever I want.
I didn't replace a paycheck. So in response to the pandemic, inflation, or a recession I have more than a paycheck to fall back on.
PLANNING
I know what it's like to worry about making payroll.
And I know how easy it is to spend the money when times are good.
I also know it often feels like you have little control over whether its feast for famine.
BUT you do!
That's why with every client I discuss and often help build financial projections.
By projecting your business into the future and imaging what you want its financial future to look like, you’re able to see beyond where you are to where you're going. It maps the way to turn the desire for more than a paycheck into a reality.
With regard to resiliency, it gets you in the habit of exploring What if scenarios while you have time to be curious and creative.
It takes theoretical revenue numbers and make them real, backed up by business development strategies that require clear actions tied to and aligned with expenses.
It gives you an anchor that keeps you tethered to your goals even when a storm makes it harder to stay focused.
SAVING
And financial projections are a great tool for figuring out what it will take to save enough money to cover 3-6 months of expenses AND build a reserve from which you can take your regular owner's draw should sales dip, payments lag, or COGs increases more than revenue.
Similarly, finding ways to save time and gives you the flexibility to evaluate your options and make new choices.
By pro-actively managing cash, credit, and savings you increase your resilience and ability to survive a recession.
- Get credit before you need it. Don't just think about banks. Suppliers can extend credit too.
- Refinance and repay debt.
- Build a reserve.
- Manage cash flow. Take a hands-on approach so you know when money is coming into and going out of your business. Some expenses "hide" on the balance sheet. Your income statement only tells part of the story.
- Invoice on-time to get paid on-time.
- Follow-up with people that owe you money. Collect.
- Create contracts with payment terms that get you paid early and often, with late fees and other penalties for when that doesn't happen.
- Cutting expenses only goes so far and you do have spend money to make money. Know what you're spending money on and why.
- Negotiate.
- Look for and leverage economies for scale for buying power (like group purchasing through associations.)
- Reduce waste and rework. Neither show up as line items on your financial statements but they cost you real money.
- Automate what you can.
Feeling overwhelmed or burned out?
Hoping the proverbial train hits you so you don’t have to make it to the light at the end of the tunnel?
I feel you.
I have a long history of putting my head down and holding my breath hoping to make it to the other side of whatever it is that I’m trying to accomplish before I collapse.
I’ve worked myself sick.
And I know that
It sucks.
It’s not sustainable.
And I don't want me or my clients to keep doing this as we build the businesses and lives we love.
Yes, building your business takes extraordinary amounts of time and effort. It calls on us to be resourceful and persistent. Usually, it requires us to have lots of irons in the fire, running parallel tracks to achieve our goals.
And we are bombarded by all sorts of societal ideas about hustle and start-up culture, unicorns, and college drop-out CEOs.
Yet we have to remember who created the rules of engagement. How one does business today has its roots in how white men created their businesses in the early 20th century. How we finance business today is the product of how white, male technology entrepreneurs financed their businesses in the mid to late 20th century.
This is not ancient history.
It hasn’t always been this way.
And none of these norms were created by or for women, especially Black women who now make up the largest segment of new business owners in the U.S.
Being able to define the terms of engagement - the culture of their business - is the one of the main reasons women start businesses. For Black women who want to lead, starting their own business is often a chosen path when corporate advancement is delayed and denied, when, by definition, the rules of work don’t work for them.
Replicating the norms of businesses built and led by others doesn’t unleash leadership, wealth, health, satisfaction, and achievement. So if we start our own businesses in order to create a life we love, we have to create new rules and ways of doing business.
Of course, our clients may not be thinking about rewriting the rules of business. For many, the status quo isn’t seen as broken. And the behaviors that do the most damage to our bodies, minds, and spirits are culturally defined as the attributes of success.
As a result, everyday I coach clients who struggle to
- set and keep boundaries
- avoid overworking contracts
- resist the urgency of others that pushes them to make fast decisions or commit to unreasonable timelines
- prioritize their own business plans when faced with client demands
- define success on their own terms
- embrace their ambition and demand their economic worth
They deserve to make choices from a place of calm confidence, not fear or scarcity.
Everyday I learn from my clients, friends and colleagues new ways to show up to work and build businesses that honor our need for
- purpose
- dignity
- rest
- challenge
- impact
- learning
- connection
- love
I’m inspired to reimagine work by my colleagues at Gladiator Consulting who are just finishing a two-week, company-wide pause (a purposeful, unapologetic interruption of work) as they prepare to do their mid-year retreat.
And by clients like McDaniel Nutrition Therapy who recommended the the book Four Thousand Weeks which offers a sobering perspective on the limited time we have, the limited control we have over it, and how that clear-eyed approach to understanding and being present in our current reality can help us make critical choices about how to spend time doing what we want and have to do to achieve our desires.
And by my coach, Dixie Gillaspie, from whom I am learning about what it means to be the primary creator in my life and choose to live a life I love.
I believe that by making intentional choices (over and over again) and focusing on creating new systems and structures rather than trying to fix those built by others to serve purposes that do us more harm than good that we truly have the power to transform what it means to own, run, and scale businesses, and redistribute wealth and power.
As a business owner, you're the chief architect of your company's culture.
And it's probably the thing you've put the least amount of time and energy into developing.
For many owners I know, culture isn't one of their top priorities despite the fact that "people issues" take up a considerable amount of their time.
Thankfully, it's never too early and you're never too small to be purposeful about designing your company's culture.
Even small teams and solopreneurs have challenges because humans are humans.
If we agree that culture is the combination of shared beliefs and behaviors about how owners, managers, and employees interact and make decisions, then we can understand how important culture is to the success of our company.
And we can get intentional about
- WHAT our purpose and values are
- WHO shares a commitment to our purpose and alignment with our beliefs
- HOW we want those people to work together
- WHAT we’re going to do to create an environment where everyone can do their best as individual performers and as a team
It all starts with you.
1. Start with the core: get super clear about your purpose and make sure anyone working with you knows
- Why you exist
- Who you serve and how you serve them
- Your vision for the impact your business will have in the world
- The values you think are most important when making business decisions and choosing how to act
- What it looks like when your living your values
Rachel D'Souza Siebert normalized bringing her kids to work meetings and events from the very beginning. As her team grew, so did this practice. If you do work with Gladiator Consulting as a client, employee or contractor, don’t be surprised if some small co-workers join your next Zoom call.
2. Be clear about who does what and how: explicitly communicate (in writing and through direct conversation, training and coaching)
- Your expectations regarding core competencies, responsibilities and expectations for specific jobs and roles in your company
- Document your processes so everyone can follow standard operating procedures
- Use tools like peer agreements and team charters to make working norms explicit and clear
- Overshare. Don't hoard information or share on a need to know basis.
Stephanie Haenchen has a mix of seasoned and young professionals on her team. Her focus has been on clearly communicating the core competencies everyone needs to demonstrate and providing coaching, technology and documented SOPs to support them in working optimally with each other and on behalf of Pace Marketing’s clients.
3. Get to know your people: In addition to technical skills, professional experience, and unique talents, employees and contractors have hopes and dreams, as well as wounds, fears, and basic emotional needs.
- Find out what people care about, what drives them, and what inspires them
- Understand what they want to learn, how they learn best, and the ways they want to grow
- Ask how people want to receive feedback and be recognized for their contributions and accomplishments
Amy Mills is heiress to the legendary 17th Street Barbecue legacy. With two restaurants, a factory, catering, mail order, and new cafe operations to lead, she knows her company is only as strong as her team. When we started working together one of the many things we did was facilitate a conversation with her leadership team about vision and values. They set ambitious 5-year goals that have helped energize the team after a very hard two years dealing with COVID’s impact on the business.
4. Make the "people piece" a priority: Managing people can't be an ancillary activity. People are the heart of your business and need to be treated accordingly.
- Set annual goals for everyone on your team - including yourself
- Schedule regular meetings (bi-monthly or quarterly) to have 1:1s with each person on your team
- Have weekly team meetings - with agendas - to maintain clarity and open lines of communication
- Use communication tools like Slack and/or project management tools like Asana to improve work flow and communication
- Expect to spend the majority of your time providing the people on your team with the guidance, coaching, training, and support they need to perform at their best so your company can grow and be sustainably profitable
Having doubled the size of Roanoke Construction, Kevin Buchek and Mike Duffy found themselves with exponentially more people needing their time and attention. This year has been about investing in their infrastructure through a combination of a mission/vision/values reset, process and procedure documentation, improved use of technology, core competencies alignment, and intentional career pathing to empower their team to work toward common goals as efficiently and collaboratively as possible.
If you have a large enough team, you might actually have someone whose job is communications. They're responsible for managing what information is shared, how, and with whom.
For most of us, that job falls among our "other duties as assigned" though it's rarely named as a job requirement or performance expectation.
And yet the ability to communicate ideas, information, knowledge, expectations, feelings, perceptions, and understanding is a competitive differentiator for leaders of successful businesses.
Don't believe me? I dare you to find a business book that doesn't recommend strategies and tactics for success that require superb communication skills.
It's not just sales and marketing. HR, information technology, finance and accounting, customer service, production, service delivery, procurement...you name it. They all require their own subset of communication skills, knowledge, capacity, and aptitude.
You thought you were building a business, right? It turns out, that requires building an organization that excels at communication and it all starts with you. No pressure!
The good news is that you've been communicating all your life. You actually know a lot about what good and bad communication looks and and feels like. Now its time to think of yourself not just as CEO but also as CCO - Chief Communication Officer. Let's get started.
Understand your audience
I know that you know the importance of communicating with prospects and customers. Hopefully, you've put considerable time into understanding your target audience and honing your messaging so it conveys your deep understanding of what problem they are trying to solve and your ability to help them solve it. If you're really dialed into this you've probably figured out what feelings are driving their decision making and how to tap into those feelings to connect.
Now tell me how well you do that when it comes to vendors? Employees? How well do you understand how to help them be successful and are you able to both provide that understanding as well as provide them with the information they needs to achieve success?
It's often not about choosing to share some information with some people and not others. It's about sharing the most meaningful information with people clearly and frequently enough so they can act on it as needed. And sharing more information as they express interest.
Marcus Sheridan's entire approach to They Ask You Answer is to tell prospective customers EVERYTHING you know about your industry and business. Not everyone will care. But those who do will appreciate that you respected their desire to know more and your willingness to share. He's proven that you can be transparent about everything from what factors impact pricing to the things your competitors might do as well or better than you AND will people's business.
If you can be that transparent with customers, you should be that transparent with employees, vendors, and others involved in the success of your business. I'm not asking you to share your P&L with everyone but I am asking you to think about what information might help people better understand the financial decisions you're making and how their role contributes to the bottom line.
Notice, I didn't ask you to think about what they "need to know." Rather I want you to think about what you can share and how you can share it so that people feel empowered to act in ways aligned to your business goals. What can you share that make them feel included and appreciated? Or capable of making making decisions? Or comfortable doing business with you?
Overshare
When in doubt, always share. I go through my calendar every week with my VA, not so she can keep tabs on me but to share the story behind who my clients are, what we're working on, and why it matters. That information gives her the insight she needs to make critical scheduling decisions like who needs to get bumped up vs meetings that can be scheduled a few weeks out. It also makes it easier for us to do monthly invoicing when she understands the nature of our contracts. And it makes her feel included, part of the team.
If your expectation is that every employee or contractor working for you makes your customers feel welcome, appreciated and well taken care of...
If you want customers to feel connected to your business and invested in your success...
If you want even the smallest task to be done with the utmost care and attention to detail...
If you want happy clients to make referrals...
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What information, knowledge, and insights have you shared with everyone so they feel capable of living up to those expectations?
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Do they understand why something is important?
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Do they understand how decisions are made?
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Do they understand their part in the process?
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Have you told them the same information many times and in many ways? Are you committed to continuing to do so?
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Have you made it easy for them to find and share information on your behalf?
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What have you asked those receiving that information to do to confirm/affirm their receipt and understanding? How have you rewarded them when they do?
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Being a successful business owner also requires you to offer explanations even when you don't have to.
It may be your prerogative as owner to show up when you want, do things your own way, change your mind, go off script, ask people to do new and different things, add new people to the team, or make an exception to a rule. When you do so with out context or explanation it creates confusion and distrust.
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When I don't know why the plan has changed I feel confused and left out.
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When I don't know why I'm being asked to do something (in addition to everything else I already have to do) I feel overwhelmed and underappreciated.
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When I'm expected to meet deadlines and I can get what I need to do so I feel like I'm being set up to fail.
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When some people seem to know things that I don't I feel unimportant.
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When I don't know why things are changing I feel confused and scared.
Always share your WHY. Not to justify your decisions. Because in the absence of information, people will make things up and act on their stories or what they believe to be true.
Walk the talk
Nothing negates your word faster than your actions betraying your words. What you do matters WAY more than what you say. It's one of the loudest and clearest forms of communication.
Take a look at your vision statement and company values. Now look at things like your policies, procedures, workplace environment, compensation decisions, supplies and materials sourcing, and contracts. Are they aligned? Do your actions reinforce what you say you want to create and they way you want to create it?
Decisions, as well as the lack thereof, are forms of communication.
Don't Assume
Often times, especially in small organizations or tight knit teams, we rely on informal communication styles. Sometimes we assume one person share information with everyone else on the team. Or we rely on proximity to each other to replace formal communication mechanisms. We assume people know things and that sharing will occur.
Don't assume. Good communication requires us to be clear, consistent, intentional and explicit.
If we don't set up workflows and define expectations early on we waste a lot of time and money. We also make it harder to grow.
Miscommunication or lack of communication contributes to rework, duplication of work, misunderstandings, errors and omissions, and business-critical knowledge leaving when someone leaves the organization. It leads to delays, causes bottle necks, and breeds workarounds.
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Make sure everyone understands how to communicate as a team - what platform to use (email, phone, text, Slack, etc.), as well as expectations about frequency, detail, format, etc.
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Be specific about what information to share, the method to store and share it, how to share it, and with whom.
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Design templates, forms, scripts, agendas, and minutes to capture and share information, follow policies and procedures, and document processes and decisions.
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Train staff on how to communicate as a leader or manager, to peers, with supervisors, and to customers. We all have different work, school and family experiences. My expectations about what good communication looks like may differ from what others think.
Explicitly communicate about communication.
Listen and Respond
When we communicate we both share and take in information. As leaders we have to make time and space to receive feedback on what's being communicated and experienced, and to actively solicit information from our clients, employees, and other stakeholders.
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Create opportunities to listen and observe.
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Ask specific, open ended questions to learn and deepen your understanding.
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Be clear about how information will be used.
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Acknowledge receipt and understanding of the information that's received. No black holes where surveys and forms go to die.
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Make it personal. One-on-one interactions turn communication into connection.
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Demonstrate what you've learned and how it has influenced decision making.
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Show appreciation for compassionate candor.
I've lost my car in a parking lot.
I've tried to open the door of a car that wasn't mine.
Each time this happens, it’s because I've failed to pay attention to what was going on around me.
Situational awareness is an underrated and hugely important skill - especially in a world of distractions.
It allows you to find your car after exiting a store.
And stay safe when walking from the store to the car.
It also allows you to make meaning out of what you're observing and predict what might happen next.
Psychologist Mica Endsley developed a situational awareness model that explains how we perceive what's going on, make meaning of that information, and then anticipate what will happen next so we can make decisions and take action.
Situational awareness is a common term and concept in the military where honing these skills can mean the difference between life and death.
It's much less common in business circles. We may talk about running scenarios and strategic planning, but we also rely heavily on dashboard metrics that often tell us about what happened (past tense) using lagging indicators. We're not often challenged to make real-time observations, predictions, and decisions unless we're in crisis.
What if you, your leadership team, and your staff all honed your own situational awareness skills and applied them on a daily basis? What would that mean?
First, we all have to agree on what deserves our attention.
What is our situation and what does it mean to be aware? That starts with everyone having a common understanding of the company's purpose, vision, values, and current strategic priorities.
This information alone should give most employees the context they need to make real-time decisions aligned with company goals and culture.
Add this shared context and clarity about one's individual role in achieving company goals to the regular practice of noticing what is happening around them (internal and external to the organization and industry) and you enhance everyone's ability to avoid mistakes, reduce rework, improve efficiency, lower costs, control financial and reputational risk, and to head off potential problems before they occur.
For leaders, it's especially important to hone your situational awareness so you can make meaning out of all the data that's available and use it to make decisions and take action. Making decisions and directing your team on how to take action is your primary job. The better you get at cultivating your future-focus by being intensely aware of what's going on in the present the more likely it is that you're company will be prepared to create opportunities while your competitors react to disruptions and crises.
Situational awareness requires ongoing practice.
You can start by doing the following:
- Noticing - Make it a regular happen to ask yourself "what's going on here?" Things aren't always what they seem and without getting properly oriented to your surroundings you might try to solve the wrong problem.
- Grappling - This requires you to wrestle with the information you're receiving and what your analysis is telling you about what might happen next or what you can create moving forward. This is where thinking is doing.
- Predicting - The idea of prediction puts business owners in the role of creator vs. problem solver. Run the scenarios. Which one do you prefer? What future do you desire and are willing to create? What decisions and actions will that require?
- Deciding - Action that occurs without intentional decision making obscures what we believe to be true about the situation, what decision is underlying the action, or what decision the action implies. Without focused attention on decision making, you may fail to decide or act, act without intention, or act without first considering what unintended consequences may occur. Make a clear decision and provide the rationale for that choice. Then share it with your team.
- Acting - Now everyone has the clarity they need to act in focused, purposeful ways to produce the results you desire. These actions will change the situation in some way. As a result, your situational awareness will change too.
- Reassessing - Your actions have changed the situation, so it's time to reassess. What changes do you notice? What new meaning and understanding do you have? What are you noticing?
Repeat.
Now, where's my car?
Change is constant, so it should be no surprise that despite your best efforts to predict the future, things aren't going exactly as planned. I'm sure something has/is happening in Q1 that you had not anticipated.
Since we can't stop change, we have to look at how best to manage our reactions to it. Planning gives us an anchor, a touchstone to come back to that reminds us of what we hope to accomplish even if the methods need to change due to new circumstances and conditions.
Perhaps your Q1 brought a slew of new qualified leads and new business. This may have accelerated your plans to add staff or technology and tabled some of your prospecting and marketing efforts.
Or maybe supply chain slow downs are making it hard to hit fulfillment goals and you are spending more time on client relationship management and procurement at the expense of documenting policies and procedures.
Most of us would think of scenario A as a "good" change in plans and scenario B as a "bad" one. In fact, they're neither good nor bad, they’re simply the circumstances at hand.
Both create disruptions.
Both can take focus off the areas of your business where you have determined need attention.
Both can distract you for longer term goals if you let them.
I can't tell you how many times I've heard, "we had a marketing and sales plan but then we got a new client and it got tabled." I hear this when the owner is now looking at an empty prospect pipeline and wishes they hadn't put off business development efforts yet again.
Or I talk to an owner when a crises like supply change delays is resolved and how they have to ramp up operations to manage a backlog of work only to find that their imperfect, idiosyncratic processes and workflows are causing the same old problems now at a larger scale.
Changes in circumstances may alter how your plan is executed. But it can’t be an excuse to throw your plan out the window.
Because change can also create opportunities.
Cue your creativity: You’ve been handed a great opportunity to use your plan as a lens for shaping your response to change and a guide for creating new paths forward.
As you wrap up Q1 it's a great time to revisit your goals and update your plan based on real-time information.
- Acknowledge how the unforeseeable is impacting business as usual and decide how best to leverage the circumstances to stay aligned to your vision.
- Focus on the things you can control.
- Stay committed to projects you know will make your business stronger and more profitable over time.
- Bring together your trusted staff and advisors to give you new perspectives.
- Give yourself and others grace.
- Slow is better than stopped.
Remember, your job as owner is to see beyond and motivate an aligned team toward a shared vision. That can be harder to do when things aren't going as planned.
But it's not impossible.
Stay the course.
