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	<title>The Family Business Blog</title>
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	<link>http://thefamilybusinessblog.com</link>
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		<title>The Six Common Selection Errors</title>
		<link>http://thefamilybusinessblog.com/?p=161</link>
		<comments>http://thefamilybusinessblog.com/?p=161#comments</comments>
		<pubDate>Tue, 09 Feb 2010 22:09:02 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Leadership/Management Development System]]></category>
		<category><![CDATA[Selecting Talent]]></category>

		<guid isPermaLink="false">http://thefamilybusinessblog.com/?p=161</guid>
		<description><![CDATA[One of the sad outcomes of my consulting work is that I’ve seen, again and again, how companies make the same mistakes in selecting employees. There are a few common errors made by a majority of companies. Here are the top six selection errors that you need to avoid...
  
]]></description>
			<content:encoded><![CDATA[<p>One of the sad outcomes of my consulting work is that I’ve seen, again and again, how companies make the same mistakes in selecting employees. There are a few common errors made by a majority of companies. <strong><em>Here are the top six selection errors that you need to avoid.</em></strong></p>
<p><strong> </strong><strong>1. Subjectivity over objectivity</strong></p>
<p>Using your gut to find great talent is fine as long as you gather facts (objective information) to confirm your gut feelings. A Harvard study revealed that the use of interviews only as a means for selection were successful 14% of the time. I bet you have experienced a quick hiring decision based on gut feeling that resulted in poor performance or poor chemistry for the organization.</p>
<p><strong>2.      </strong><strong>Making hasty decisions</strong></p>
<p>There are tendencies, in over 63% of selection interviews, to make the hiring decisions in the first four minutes of the interview. Don’t do this. It takes 90 minutes of a patterned or structured interview to get to real behavior. Many professional recruiters suggest that you not form any judgments in the first 30 minutes. If you do, you are in danger of missing out on potentially good candidates who do not interview well, or worse, hiring a poor fit because of the candidate’s ability to interview well.</p>
<p><strong>3. Accountability for selection errors</strong></p>
<p>An even worse selection error is made when managers don’t view selection as an important job responsibility. This occurs often in companies that do not train their managers in this critical leadership task.</p>
<p><strong>4. Lack of good information on candidates</strong></p>
<p>At BusinessWise, we have learned that interviewing alone is ineffective. The best selection processes include many tools like checking references, performing sample job tasks and conducting a second interview. Reference checks are often not performed and when they are, companies usually only verify information like employment dates. Most resumes are marketing tools—they often exaggerate accomplishments. In my experience, many times recommendations are positive because the person doing the recommending is hoping to move an underperforming employee out.</p>
<p><strong>5. Untrained management</strong></p>
<p>Make this error and it will lead to an organization that perpetuates degradation of talent. In other words, if someone is a 10/10, he or she will hire at best 9/10. The 9/10 will at best hire an 8/10. Over time, this erodes the depth of talent. Strong talents (10/10) will not remain in an organization when they are hired by 5/10 managers. <strong><em>People do not leave jobs—they leave unskilled and poor leadership.</em></strong></p>
<p><strong>6. The wrong people are doing the hiring</strong></p>
<p>In large organizations, you often find the wrong people are selecting new hires. Human resources sends the line manager poor talent. The manager and his team can’t get the job done because the unit’s not fully staffed or capably staffed and the manager doesn’t have the time to interview and train. This catch-22 thrives when team leaders don’t regard employee selection of talent as their responsibility. The talent problem gets compounded when HR departments cut back in difficult times.</p>
<p> To receive an overview of a selection process the works please email <a href="mailto:bclinton@business-wise.com">bclinton@business-wise.com</a> and request “Selection Overview”.  <strong></strong></p>
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		<title>The Real Cost of a Selection Error</title>
		<link>http://thefamilybusinessblog.com/?p=157</link>
		<comments>http://thefamilybusinessblog.com/?p=157#comments</comments>
		<pubDate>Tue, 09 Feb 2010 21:43:50 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Leadership/Management Development System]]></category>
		<category><![CDATA[Selecting Talent]]></category>

		<guid isPermaLink="false">http://thefamilybusinessblog.com/?p=157</guid>
		<description><![CDATA[Selection errors cost four to five times annual salary. Hire the wrong person for a $30,000-a-year job and it eventually will cost you about $150,000. The tangible costs alone of a poor hire are often quoted as a minimum of 25-35% of a year’s base salary. The costs go beyond direct salary and benefits. The costs can include materials, recruiting expenses (fees, travel expenses, management time, and advertising), training time and training materials. Other less obvious costs could be losses such as spoilage of materials, products or other resources, lawsuits and even the loss of a customer. All of these costs are quantifiable, and you probably can think of more. And not the least of costs is the time and effort to repeat your recruiting and selection process and training.

Intangible costs of a poor hire are five times the tangible costs

Intangible costs are not as easy to quantify. Here are a few that other company owners have shared with me: .....

]]></description>
			<content:encoded><![CDATA[<p>Selection errors cost four to five times annual salary. Hire the wrong person for a $30,000-a-year job and it eventually will cost you about $150,000.<strong><em> </em></strong>The tangible costs alone of a poor hire are often quoted as a minimum of 25-35% of a year’s base salary. The costs go beyond direct salary and benefits. The costs can include materials, recruiting expenses (fees, travel expenses, management time, and advertising), training time and training materials. Other less obvious costs could be losses such as spoilage of materials, products or other resources, lawsuits and even the loss of a customer. All of these costs are quantifiable, and you probably can think of more. And not the least of costs is the time and effort to repeat your recruiting and selection process and training.</p>
<p><strong> </strong></p>
<p><strong>Intangible costs of a poor hire are five times the tangible costs</strong></p>
<p>Intangible costs are not as easy to quantify. Here are a few that other company owners have shared with me:</p>
<ul>
<li>            Loss of company reputation</li>
<li>            Loss of potential clients and referrals</li>
<li>            Loss of employee morale</li>
<li>            Loss of team productivity</li>
<li>            Loss of credibility with other team members</li>
</ul>
<p>One poor hire can also cause the turnover of productive team members. Remember, people join a company, but they tend to leave a poor leader or manager. When I facilitate a discussion of average turnover costs with company owners, we never reach a total cost of less than $8,000 in tangibles and $40,000 in intangibles.</p>
<p><strong> </strong></p>
<p><strong>Selecting the wrong manager is worse</strong></p>
<p>Worse than poor hiring decisions are poor management selection decisions. Select a poor manager and your turnover costs are the number of people managed times the average cost per turnover.</p>
<p>Time and time again, I have witnessed the loss of an office or that entire profit center because there is a poor manager or leader in place. In the case above, if the team has eight members and we assume that they produce a million dollars of revenue, then losing this unit is a million dollar loss! This is only the “opportunity cost” for each year.</p>
<p>The question I often ask CEOs and business owners is: How much do you budget for staff turnover? They always answer, “We don’t.” My follow up question is, “Where does this loss appear?” The answer is: “From bottom line profit.”</p>
<p><strong> </strong></p>
<p><strong>My own real life success story </strong></p>
<p>Do you wonder how the selection process you’re about to discover works in real life? Wonder no more. Before I learned and implemented the selection process outlined here, I ran a sales office with 32 part-time and full-time employees. By using this process, I doubled my sales with a much leaner staff of just 12. A commitment to hiring only high quality team players who were the right fit and could produce made a huge difference in the success of my business</p>
<p><strong>Great talent isn’t retained without this</strong></p>
<p>When I conduct organizational studies, part of my process is for all managers to write their perception of their job by listing their key activities. Having read hundreds of these responses, I’m sad to report that there’s no reference to staffing their team and no reference to recruiting as an activity. Great talent is not going to be retained if management does not recognize recruiting and selecting great talent as a key leadership activity.</p>
<p>The bottom line is that when you select great talent, your organization will grow and prosper. When you do not, you end up with morale issues, lower production, slower growth and lower profits long term. Selecting great talent also gives you more options at the time of succession due to the depth of talent within your organization.</p>
<p>The right person in the right position will be a great asset. The right person in the wrong position will be a detriment to the organization’s success. The right person in the right position is easily trained, develops naturally and will accomplish the job objectives.</p>
<p> To receive an overview of a selection process that works please email <a href="mailto:bclinton@business-wise.com">bclinton@business-wise.com</a> request “Selection Overview”.</p>
<p><strong> </strong></p>
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		<title>What Top Producers Require from Their Manager / Leaders!</title>
		<link>http://thefamilybusinessblog.com/?p=152</link>
		<comments>http://thefamilybusinessblog.com/?p=152#comments</comments>
		<pubDate>Tue, 09 Feb 2010 21:17:25 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Leadership/Management Development System]]></category>

		<guid isPermaLink="false">http://thefamilybusinessblog.com/?p=152</guid>
		<description><![CDATA[Here are a few rules to consider when selecting someone to lead a team. You may view some of them as common sense, but don’t let that fool you. My 30 years of experience with both great and poorly performing companies has convinced me these rules are not commonly practiced, yet they are extremely important for building great teams.

]]></description>
			<content:encoded><![CDATA[<p>Here are a few rules to consider when selecting someone to lead a team. You may view some of them as common sense, but don’t let that fool you. My 30 years of experience with both great and poorly performing companies has convinced me these rules are not commonly practiced, yet they are extremely important for building great teams.</p>
<p><strong> </strong><strong>Give the support of respect and trust</strong></p>
<p>If you choose someone from a production role to become a team leader, you and your entire management team must give the new leader respect and trust. The new team leader’s past achievements and successes will influence his/her success in this new role. This will be certainly true of all line managers you need to select. This is a given. But there are some behavioral characteristics that also need to be considered in addition to top performance and loyalty when identifying and choosing a team leader or manager. Think about the best leaders you have known in your business career. I believe you will find the following three characteristics accurately describe best of breed team leaders:</p>
<ul>
<li><strong>            </strong><strong>Professional—knows how to select talent </strong></li>
</ul>
<p>The best leaders know how to select talent for their team. They are good trainers and develop the job skills and abilities of their people. They know how to hold employees accountable to stated objectives and they also know how to provide a positive motivational atmosphere. They are skilled at professional management and leadership.</p>
<ul>
<li><strong>            </strong><strong>Available when needed</strong></li>
</ul>
<p>Great leaders are available when needed. These leaders have a sense of timing and are readily available during tough times or times of critical need. They don’t run away from problems. They do believe problems are opportunities in disguise.</p>
<ul>
<li><strong>            </strong><strong> Understands each individual</strong></li>
</ul>
<p>The best leaders understand each individual’s needs and work style. They are aware of individual goals and strive to help individuals meet their goals as the business meets its objectives. They know that no employee is perfect and they work perfectly well with all types of employees.</p>
<p><strong> </strong></p>
<p><strong>Unique behavioral characteristics found in top managers/leaders</strong></p>
<p>Those three characteristics describe your best candidates for new group leader roles. Here are some other characteristics you’ll find in the best of the best.<strong></strong></p>
<p><strong> </strong></p>
<p><strong>1. A need to lead</strong></p>
<p>Great leaders have a burning desire to see others grow and learn. Natural line managers or leaders have the ability to sublimate their ego for the benefit of others. They are willing help team members break their own personal sales record.</p>
<p><strong> </strong></p>
<p><strong>2. A need for power </strong></p>
<p>These leaders are comfortable with and seek out responsibility. They have the ability to take charge, pursue problems, hold people accountable and make unpopular decisions. This is the “iron fist” within the “velvet glove”.<strong></strong></p>
<p><strong> </strong></p>
<p><strong>3. A need for people- sensitivity</strong></p>
<p>Top managers want to be around people.<strong> </strong>They respect others and want to see them succeed.<strong> </strong>They understand and listen to others. They earn trust. They know when to push and prod and when to compliment and ask. This is the “velvet glove” of people sensitivity.</p>
<p>To better determine how we may clone your top leaders email <a href="mailto:bclinton@business-wise.com">bclinton@business-wise.com</a>  and request a free 30 minute conference on “Identifying Leadership Talent”.</p>
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		<title>Evaluating the Strength of Your Family Business</title>
		<link>http://thefamilybusinessblog.com/?p=148</link>
		<comments>http://thefamilybusinessblog.com/?p=148#comments</comments>
		<pubDate>Tue, 09 Feb 2010 20:15:00 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Family Business Systems]]></category>

		<guid isPermaLink="false">http://thefamilybusinessblog.com/?p=148</guid>
		<description><![CDATA[Do you know your organization’s most vulnerable link?

At what job level is your practice or company most vulnerable? Different experts will give different answers to this question. I believe the lowest level of your management or leadership team is your most vulnerable link. This group, line managers— works closest to the client or end product. This is the point where the owner’s vision, mission and values are passed on to the employees closest to your client or product. The ability of the line manager to recruit, select, develop, maximize and retain talent is paramount to building a great organization.  


Other ways to evaluate the strength of your organization.....

]]></description>
			<content:encoded><![CDATA[<p><strong>Do you know your organization’s most vulnerable link?</strong></p>
<p>At what job level is your practice or company most vulnerable? Different experts will give different answers to this question. I believe the lowest level of your management or leadership team is your most vulnerable link. This group, line managers— works closest to the client or end product. This is the point where the owner’s vision, mission and values are passed on to the employees closest to your client or product. <strong><em>The ability of the line manager to recruit, select, develop, maximize and retain talent is paramount to building a great organization.  </em></strong></p>
<p><strong> </strong></p>
<p><strong>Other ways to evaluate the strength of your organization</strong></p>
<p>Additional indicators of strength are your Per Person Profit and Per Person Production and the number of strong managers/leaders you employ. If you have a large sales organization, rank each salesperson in order of their productivity over a similar time period. Let’s assume you have eight sales people. Divide them into four quarters (quartiles), add up their personal productivity in each quartile and then divide their total production into each quartile to determine the percentage of the total they represent.</p>
<p>For example, assume there are eight salespeople and a total production of 800 units. The top quartile (two salespeople) produces 400 units. That means 50% (400/800) of the total productivity comes from the top quartile of the sales staff. If salespersons three and four (the second quartile) produce 250 units, then they account for 31.25% of total production (250/800). Combining the production of the top and second quartile shows that the top 50% of the sales force accounts for 82% of the productivity. Ideally, you want to see the sales production distributed more evenly over the total sales staff. A balanced production signifies depth in talent and that is a good way to be!</p>
<p>When you have depth in sales talent you will ideally see the productivity more evenly divided among the quartiles. If the top two quartiles (50%) account for more than 70% of the total, you may need to work on upgrading your sales team. This exercise can be done for any group of people who hold the same job position to get an indication of talent and performance depth.</p>
<table cellspacing="0" cellpadding="0" width="100%">
<tbody>
<tr>
<td> “The best executive is the one who has sense enough to pick good people to do what needs to be done, and self-restraint enough to keep from meddling with them while they do it.”                  <em>—Author unknown</em></td>
</tr>
</tbody>
</table>
<p> </p>
<p><strong>The irony of building a great organization</strong></p>
<p>In a privately owned business, all managers/leaders need to be better skilled in leadership processes—recruiting, selecting, developing and maximizing talent—than their counterparts in large publicly owned businesses. There are a couple of reasons for this. Privately owned businesses and professional practices don’t have the resources that have been assumed by HR departments in larger companies. Often, the larger organizations forget these skills as their critical mass or size makes them seemingly unessential to their growth. In family-owned businesses, the people processes need to be more objective or they run the risk of placing a family member in a position where he/she will be detrimental to the success of the organization. The Bilco Company, a large privately owned family business, requires family members to apply for a position and it has been said by a key family member and executive that a family member may need to be more qualified than a non family member to gain a key position&#8230;</p>
<p>To get a copy of your unique role as a CEO of a family owned business- request the CEO Job Description at the top right of <a href="http://www.thefamilybusinessblog.com/">www.thefamilybusinessblog.com</a> or email me at: <a href="mailto:bclinton@business-wise.com">bclinton@business-wise.com</a> .</p>
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		<title>Understanding Where You Are In Your Organization’s Growth Stage</title>
		<link>http://thefamilybusinessblog.com/?p=142</link>
		<comments>http://thefamilybusinessblog.com/?p=142#comments</comments>
		<pubDate>Tue, 09 Feb 2010 19:14:51 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Family Business Systems]]></category>

		<guid isPermaLink="false">http://thefamilybusinessblog.com/?p=142</guid>
		<description><![CDATA[The logical place to begin our journey is to examine how privately owned businesses and professional practices grow. There is a natural and predictable set of stages into all companies fall... Here we will cover the four major stages of business growth: Entrepreneurial, Personal, Organizational and Beyond.

The personal goals of the owners drive business decisions and ultimately form the basis of the growth stage where the business will reside. You do not need to attain a certain growth stage nor must you go through all these stages. You may start and indefinitely remain in the entrepreneurial stage. That is your choice and I place no value judgment on your conscious decision. That said, progressing through these stages is the surest and clearest path to greatness.

This article foreshadows what to expect as you expand your organization and build toward greatness. If you are frustrated or stuck in your growth cycle, this article may help explain why that is and what you can do to move forward to more fun and profits...
]]></description>
			<content:encoded><![CDATA[<p>The logical place to begin our journey is to examine how privately owned businesses and professional practices grow. There is a natural and predictable set of stages into all companies fall&#8230; Here we will cover the four major stages of business growth: Entrepreneurial, Personal, Organizational and Beyond.</p>
<p> The personal goals of the owners drive business decisions and ultimately form the basis of the growth stage where the business will reside. You do not need to attain a certain growth stage nor must you go through all these stages. You may start and indefinitely remain in the entrepreneurial stage. That is your choice and I place no value judgment on your conscious decision. That said, progressing through these stages is the surest and clearest path to greatness.</p>
<p> <strong><em>This article foreshadows what to expect as you expand your organization and build toward greatness. If you are frustrated or stuck in your growth cycle, this article may help explain why that is and what you can do to move forward to more fun and profits.</em></strong></p>
<p><strong><em> </em></strong>Take special note of the final stage of growth as described in this article. I call this stage, “Beyond.” It’s the growth stage of business perpetuation—an earned right. As you begin to grow into this stage, begin to plan for your exit. Start this process early to give your business and yourself the most options.</p>
<p> I have shared these stages with hundreds of company owners in seminars. As you read through them, think about your own company and its history. Identify which stages you have experienced and which stage your company is currently experiencing. You may discover that you thought you were in one stage of growth, but actually are functioning in another.</p>
<p><strong> </strong></p>
<p><strong>E</strong><strong>ntrepreneurial or Startup Stage: Generally a 1- or 2-Person Show</strong></p>
<p>In this stage, the reason for your business may not be the best reason. Perhaps you started the business to challenge yourself, or because of your dissatisfaction working elsewhere or unfair treatment you received at your previous company. Many entrepreneurs establish their own practice or business because their old company<strong> </strong>goes out of<strong> </strong>business; there’s no room for growth; they have a personality conflict; or they desire more<strong> </strong>dollars. Others in this stage want to prove themselves; can’t work for anyone else; or don’t like their former boss.</p>
<p>The behavior of a company owner who operates in this development stage is easy to spot. You, as the entrepreneur, usually can be described as driven and as having an insatiable appetite for growth. Other common characteristics are: risk taker, skilled survivor, impatient, in need of new challenges, easily bored, demanding in the details he or she wants from others, intuitive, desiring recognition, aggressive, ambitious, innovative, charismatic, creative and energetic. To owners in this stage, loyalty means a lot and is an essential element in promotion decisions. <strong><em>But this can be your Achilles’ heel. I’ll explain why when we discuss the next stage</em></strong>.</p>
<p><strong> </strong></p>
<p><strong>P</strong><strong>ersonal Stage </strong></p>
<p>Organizations in the personal stage have a founder who has built the first business universe with supplementary talent. Perhaps the company has expanded by adding administrative or sales support employees. In the beginning, communication is good; the owner hires compatible people, trains by imitation, leads by example and makes all decisions. This is fun. The company is charting new ground. Success depends on the entrepreneur. As the entrepreneur goes, so goes the company.</p>
<p>If your organization is well advanced in this personal stage, you’re always looking to expand. You have to add staff rapidly to keep up with business growth. Once the head count or business universe grows to more than 10 or 12 people, the owner is obligated to create a new position—a manager—and turn over some responsibility and start delegating many more duties.</p>
<p>The decision to promote someone into a management role is based on rewarding a top producer who has demonstrated loyalty. Owners in the personal growth stage of their business demand loyalty and reward loyalty. Here’s where this trait can be the company’s Achilles’ heel: The owner assumes this loyal employee is prepared to manage, but when things are not done correctly or the way he would do them, the owner jumps in to do the task himself in this way, the owner intentionally takes back the responsibility and undermines the new manager’s authority.</p>
<p>Imagine a 500-pound parrot (they could really make a mess in their cage couldn’t they?) taking command and undermining the manager by breaking down the chain of command. The beach ball of ownership expands to the point where the owner can hardly get his arms around it.</p>
<p><strong><em>Choosing the wrong manager and then breaking the chain of command sets off a tragic series of events</em></strong>. A poor management selection decision will result in poor recruiting and selection of new staff. Training will be inadequate. There will be little or no supervision. Employees will sense a weak motivational environment.</p>
<p>At best, a strong economy may be robust enough to carry along an organization in this state. But the company is limited in growth because you—the owner— must make up for your poor management/leadership selection. <strong><em>You have created a sterile hybrid—you cannot reproduce or grow your organization. </em></strong> </p>
<p>This is very frustrating. In the worst case scenario, the economic climate changes and you do not have the depth of talent to survive the business downturn. At the very best, the business will own you and steal your fun and enjoyment. The personal goals that drove you to start your business and to succeed at first are not being achieved.</p>
<p><strong> </strong></p>
<table cellspacing="0" cellpadding="0" width="100%">
<tbody>
<tr>
<td>“Our chief want in life is somebody who will make us do what we can.”<em>—Ralph Waldo Emerson </em></td>
</tr>
</tbody>
</table>
<p><strong> </strong></p>
<p><strong>O</strong><strong>rganizational Stage…Where Both Fun and Profit Co-Exist!</strong></p>
<p>This phase of growth is characterized by the organization’s ability to reproduce significant depth of leadership and management talent. In the organizational stage, there’s a solid, healthy bridge between the owner and all employees. This bridge is the owner’s ability to systematically select, develop and manage people capable of leading.</p>
<p>If your business has reached this stage, then you probably recognize that only one in seven top producers possesses the capacity to be a good manager or leader. In this stage, you will likely reward employee loyalty and job achievement, but not by blindly putting top producers into management roles. The latter is a mistake commonly seen in the <strong><em>Personal Growth Stage.</em></strong></p>
<p>Your job at this stage is to build a team of autonomous leaders and this is challenging. But you know you can’t make every decision and you value having good leaders, independent thinkers, around you. Your autonomous managers have authority and responsibility over people, production and profit as described in your written company policies and procedures. In the organizational stage, you create more formal business processes and learn how to develop leadership talent. </p>
<p><strong> </strong></p>
<p><strong>B</strong><strong>eyond…Your Exit Strategy</strong></p>
<p>This stage is not a given. It is an earned right. If you are the owner of a company in the Beyond stage, then you have the ability to transition away from the day to day business. You have a trained and capable team that can run the business profitably with or without you. You can retire or pursue other challenges.</p>
<p>Organizations in the Beyond stage have many business models in place and a depth of leadership talent within the company. Many of the necessary talent development processes your company needs to meet the challenges unique to this stage will be developed in this book.</p>
<p>I have worked with many owners who have successfully achieved the Organizational Stage and are becoming somewhat unchallenged or bored in their own business. In this case, they have worked themselves out of the day-to-day operations or at least are in a position to make this transition. This is the signal to begin to plan your exit plan. The danger in being bored is that many owners like to be their chief problem solver and therefore need to create a problem to become active and needed. </p>
<p>Another aspect reflective of the current economic period is the shortage of capital, which means the days of cashing out of your business without continued risk and involvement have disappeared. A new view of a privately owned business is one of a retained family asset. This has made the Beyond stage a bit more complicated, requiring owners to build depth in leadership talent and to utilize a team of professionals to help develop and secure their succession plan.</p>
<p>Request how you may evaluate how your organization rates in the characteristics of great organization. These characteristics were developed form polling hundreds company CEOs like you over my 30 plus years of consulting. Email me at <a href="mailto:bclinton@business-wise.com">bclinton@business-wise.com</a> and request “Characteristics of Great Organizations”.</p>
<h4> </h4>
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		<title>Ideal Client…. Discover Hidden Opportunities Yielding Higher Margins</title>
		<link>http://thefamilybusinessblog.com/?p=138</link>
		<comments>http://thefamilybusinessblog.com/?p=138#comments</comments>
		<pubDate>Tue, 09 Feb 2010 18:35:33 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Sales & Marketing Process]]></category>

		<guid isPermaLink="false">http://thefamilybusinessblog.com/?p=138</guid>
		<description><![CDATA[My margins have changed, I have more customers than before, but I am working harder and my accountant tells me my profit margins are down.  What shall I do, even my staff is beginning to view each new customer as a problem rather than an opportunity?  I sense that we are serving our clients well at great expense to our employees’ job satisfaction- this cannot continue without something cracking.  Maybe I should add people- but how can I do this when my profits are eroding?

There are many businesses that have gone through a review process and ended up with less clients and made more money.  Much has been written about the value of keeping your clients and that the best source of new business is from your existing clients.  Also, as business owners we know that to meet our growth goals we need to develop new business also.  How do we maintain the balance of servicing our existing clients and grow our business in a cost effective manner?

It is time to review your customers and determine which ones are better and why.  ]]></description>
			<content:encoded><![CDATA[<p>My margins have changed, I have more customers than before, but I am working harder and my accountant tells me my profit margins are down.  What shall I do, even my staff is beginning to view each new customer as a problem rather than an opportunity?  I sense that we are serving our clients well at great expense to our employees’ job satisfaction- this cannot continue without something cracking.  Maybe I should add people- but how can I do this when my profits are eroding?</p>
<p>There are many businesses that have gone through a review process and ended up with less clients and made more money.  Much has been written about the value of keeping your clients and that the best source of new business is from your existing clients.  Also, as business owners we know that to meet our growth goals we need to develop new business also.  How do we maintain the balance of servicing our existing clients and grow our business in a cost effective manner?</p>
<p>It is time to review your customers and determine which ones are better and why.  This is best done by forming a task force of key people within your organization who regularly interact with the clients you serve.  There are two basic pieces of information this team needs to develop: the key characteristics of your best client relationships and how your business and the client arrived at this favored level of a business relationship. Once you complete this exercise, you will have identified the key characteristics that define your target ideal client and what were the key events that develop or grow this key client relationship and who is responsible for proactively performing this role in each step of your key client development process.</p>
<p>Here are some key steps you may take to develop your Ideal Client Development Process.  Once you complete this exercise you will discover that the marketing and sales process of developing the Ideal Client involves many or all of your staff performing a chain of events interdependent on each other in a proactive manner.  Your responsibility as an owner/manager/leader is to develop, lead, and manage this process.</p>
<p>Here are some key actions you may want to consider:</p>
<ol>
<li>Form a team of key people who know and interact with your current client base</li>
<li>Assign individual team members with identifying from their point view the better clients and why they have   been identified as better or more Ideal Clients over others</li>
<li>Have members share their identified Ideal clients and note their common characteristics: looking at such things as: volume of business, cost to serve, profit contribution and relationships.</li>
<li>Once the list has been shared list the common traits found in your Ideal Client – you now have developed your target client.</li>
<li>Now that the key clients have been identified go through each key client and list the key events and who was involved in their history that moved to them to Ideal Client status from their initial contact to the point of being Ideal</li>
<li>Determine common events that occurred, give them a defined name and who was involved in this defined event and their responsibility</li>
</ol>
<p> </p>
<p>You now have a model to assign the authority and responsibility in your organization to proactively grow your Ideal Clients.  You will be best served to have someone facilitate this process.  Periodically you will need to review your clients again to monitor their progress and to determine the proactive actions needed to move them the next level.  You may also set up feedback systems with key indicators to quickly note your progress in acquiring and developing Ideal Clients.  Once the Ideal Client Model is implemented, you will have a more efficient and effective way of growing profitable sales.</p>
<p>To have a free discussion of this process email <a href="mailto:bclinton@business-wise.com">bclinton@business-wise.com</a> and reference “Ideal Client Discussion”.</p>
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		<title>Business Succession…Transition…The Rules Have Changed Owner’s Options</title>
		<link>http://thefamilybusinessblog.com/?p=133</link>
		<comments>http://thefamilybusinessblog.com/?p=133#comments</comments>
		<pubDate>Tue, 09 Feb 2010 17:48:35 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Succession Planning Process]]></category>

		<guid isPermaLink="false">http://thefamilybusinessblog.com/?p=133</guid>
		<description><![CDATA[Recently, a group of advisors offering diverse services to owners of privately owned businesses were discussing the state of affairs.  We all know that the economic environment is difficult and challenging.  The capital structure has vanished.  Banks are not lending and when they do lend it will be with many stipulations.  Interest rates are down – but still money is not flowing.  Private equity firms are forced to use capital to keep their current investments alive.  Only a few businesses are capitalized well enough to make strategic acquisitions and if they do, they are at bargain prices.  Owners are forced to sell well below their expectations.  It is not pretty, but all owners need to mitigate their risk of transition.  They will not be getting a lot of cash in any near term transaction and they may be forced to finance any transition.

]]></description>
			<content:encoded><![CDATA[<p><strong>Summary: </strong>Until recently business owners had many options to exit their business. This has changed for the foreseeable future.  Now they need to approach their business as though they will retain it or be the source of financing for the transition.</p>
<p>Recently, a group of advisors offering diverse services to owners of privately owned businesses were discussing the state of affairs.  We all know that the economic environment is difficult and challenging.  The capital structure has vanished.  Banks are not lending and when they do lend it will be with many stipulations.  Interest rates are down – but still money is not flowing.  Private equity firms are forced to use capital to keep their current investments alive.  Only a few businesses are capitalized well enough to make strategic acquisitions and if they do, they are at bargain prices.  Owners are forced to sell well below their expectations.  It is not pretty, but all owners need to mitigate their risk of transition.  They will not be getting a lot of cash in any near term transaction and they may be forced to finance any transition.</p>
<p>The rules of building value are still the same; however, one underestimated part of the equation now comes to the forefront.  The top leadership team (which was always important) and the depth of leadership / management talent are now critical to the owner.  The owner will have a key family asset being managed by others.  In the past leadership depth was always important, but now it is a necessity for the long term survival and growth of the business entity.  You now have an illiquid asset that will need care beyond your interest or life span. How can you obtain the most options?</p>
<p>The first step is to take a quick look at your direct reports and perform a subjective assessment.  Evaluate each direct team member in three areas: shared business values, productivity and communication with you and others on the team.  Each area can have a maximum score of 5 points as a strong score.  The maximum score of top team members is 15.</p>
<ul>
<li>Once you have evaluated each of your team members take clean piece of paper and place dot in the center of paper.  This represents you as the leader and center of the business universe.  Read carefully the next actions as they may counter-intuitive.</li>
<li>The team member with the highest score will be the closest to you via straight line to 12:00. </li>
<li>The person with the lowest score will be the farthest from you represented by a straight line to 6:00.</li>
<li>Next draw everyone else in the same manner relative to their scores which fall in between the highest and lowest scores in other straight lines to you in different positions around the clock. </li>
<li>Finally, after all your team members are placed in their relative positions draw a circle with you at the center representing an acceptable culture line.</li>
<li>Note those team members which have fallen outside of the culture line. They are not really on the team.</li>
<li>Problem solve why certain members are outside of the acceptable culture line. </li>
<li>Develop a plan to improve your team.</li>
</ul>
<p> </p>
<p>There are many reasons for someone to fall outside of the culture line.  Certainly one could be performance in that they may have been placed in a position where they are not productive.  Where communication is an issue, you may not have spent quality face time with certain team members and you have drifted apart.  Another possible cause is: the job has new requirements which the incumbent is not equipped to fulfill. There are many other possibilities.  It could be that you have too many direct reports and this prevents you from building a team.  Every situation has its own uniqueness. </p>
<p>If the new rules of transition require greater depth of strong leaders, this is the first step. The purpose of this exercise is for you to take the initial step to determine how much work is ahead of you and then begin to make incremental improvements over time to strengthen your depth of leadership talent. The benefits to you are many.</p>
<ul>
<li>Peace of mind as you step away from the day to day</li>
<li>Sustained financial health for your business</li>
<li>A higher evaluation when buyers eventually return to the market</li>
<li>The ability to purchase at a bargain additional markets via acquisitions</li>
<li>Remain in a strong bargaining position with the most options</li>
<li>More comfortably take back financing with an employee or generational buyout</li>
</ul>
<p> </p>
<p>I do not know of any great organizations without depth in great leadership talent.  These organizations see a difficult economy as offering opportunities.  Great leadership is able to discover, develop and maximize talent to make the opportunities a reality.     </p>
<p>For a free confidential discussion of your findings please email:</p>
<p><a href="mailto:bclinton@business-wise.com">bclinton@business-wise.com</a> and request “Owner Succession Team Discussion”</p>
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		<title>How Do I Select The Right Assessment For My Organization?</title>
		<link>http://thefamilybusinessblog.com/?p=129</link>
		<comments>http://thefamilybusinessblog.com/?p=129#comments</comments>
		<pubDate>Tue, 09 Feb 2010 17:18:09 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Leadership/Management Development System]]></category>
		<category><![CDATA[Selecting Talent]]></category>

		<guid isPermaLink="false">http://thefamilybusinessblog.com/?p=129</guid>
		<description><![CDATA[You have heard a lot about assessments from assessment company articles, email, Internet etc- I am confused with the information… As a small to medium sized company owner, how do I select the right assessment for me to use?

As a company owner, I used assessments to help me make decisions on who to hire and who to promote and found them helpful.  As a consultant to small business owners, I looked carefully before I selected an assessment company.  I set up criteria that were helpful from my past experience as a company CEO.

Selection Criteria:
•	Does the company have ..........]]></description>
			<content:encoded><![CDATA[<p>You have heard a lot about assessments from assessment company articles, email, Internet etc- I am confused with the information… As a small to medium sized company owner, how do I select the right assessment for me to use?</p>
<p>As a company owner, I used assessments to help me make decisions on who to hire and who to promote and found them helpful.  As a consultant to small business owners, I looked carefully before I selected an assessment company.  I set up criteria that were helpful from my past experience as a company CEO.</p>
<p><strong>Selection Criteria:</strong></p>
<ul>
<li>Does the company have ongoing reliability and validation studies with good scores?  This just means does the assessment assess what it is supposed to and does it consistently?  Some companies do not keep up with some of the language and cultural standards and may not be able to provide executive summaries of their validation and reliability studies.</li>
<li>Is the assessment adaptable to my company culture and industry?</li>
<li>Can the same assessment information be used for other positions in my company?</li>
<li>Can I get multiple reports on people once they have taken an assessment?</li>
<li>Is this Internet based or do I have to buy software?</li>
<li>What kind of customer support is offered?</li>
<li>If the salesman leaves, will I still be supported?</li>
<li>What kind of training is offered so I can get it implemented in my company?</li>
<li>What is the cost versus the information and number of reports available?</li>
<li>Some assessments are best used for team building or existing staff and not for selection- be sure that it can be used for both!</li>
<li>Does the assessment have a way of measuring distorted information presented by the taker?</li>
<li>How user-friendly are the reports?  Many assessments are not developed for the business environment and require interpretation by the company!</li>
<li>What is my turnaround time to get assessment results?</li>
<li>Do they offer a virtual assessment center where data is available to me on all of my company?</li>
<li>Can I monitor this process of assessment use without being personally involved in every selection?</li>
<li>Is there a simple scoring system that would give me an indication of “fit” of a candidate for positions within my company?</li>
</ul>
<p> </p>
<p><strong>Concluding remarks:</strong></p>
<p>You could pay as little as $25 per assessment to over $200.  If the assessment is what you need and is robust and both valid and reliable either end of the spectrum of pricing is not too much.  The cost of a hiring mistake: which means hiring the wrong fit or prematurely exiting candidate with the right fit from your process are both equally costly.    They signify loss of opportunity for your organization easily translated into thousands of dollars per hiring mistake.  Building long term value is dependent upon management’s ability in:  finding, developing and maximizing human talent.  A well selected assessment product(s) can give leadership an edge against its competition.  Great companies have great people.</p>
<p>To explore how assessments may help your organization select, develop and retain great talent email: <a href="mailto:bclinton@business-wise.com">bclinton@business-wise.com</a> request “Free assessment discussion”.</p>
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		<title>How To Recruit Qualified People Anywhere… Anytime!</title>
		<link>http://thefamilybusinessblog.com/?p=125</link>
		<comments>http://thefamilybusinessblog.com/?p=125#comments</comments>
		<pubDate>Tue, 09 Feb 2010 16:56:10 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Finding Talent]]></category>
		<category><![CDATA[Leadership/Management Development System]]></category>

		<guid isPermaLink="false">http://thefamilybusinessblog.com/?p=125</guid>
		<description><![CDATA[As president of your company you often see talented people that “your gut tells you” they would be great in my business and…..  Some of them are friends, others are casual acquaintances and some believe it or not are related by marriage.  I wish I had a low risk way or just a way I could approach people.  I don’t want to hire a friend or relative and not have it work and I don’t want to not approach them.

First of all, you are to be congratulated on wanting to bring in talented people to your organization that will be successful in your environment.  I do not know of a successful company owner who was not a good recruiter for their business.  At the same time, I also know of relatives and friends who appeared to be a good fit, but sadly were not.

In this article, I will take you through an approach that will allow you to recruit talent you have identified and why it is essential that you have your management team adopt this .......]]></description>
			<content:encoded><![CDATA[<p>As president of your company you often see talented people that “your gut tells you” they would be great in my business and…..  Some of them are friends, others are casual acquaintances and some believe it or not are related by marriage.  I wish I had a low risk way or just a way I could approach people.  I don’t want to hire a friend or relative and not have it work and I don’t want to not approach them.</p>
<p>First of all, you are to be congratulated on wanting to bring in talented people to your organization that will be successful in your environment.  I do not know of a successful company owner who was not a good recruiter for their business.  At the same time, I also know of relatives and friends who appeared to be a good fit, but sadly were not.</p>
<p>In this article, I will take you through an approach that will allow you to recruit talent you have identified and why it is essential that you have your management team adopt this process as you grow. (In interviewing thousands of managers in closely held businesses and professional practices- virtually less than 2% have indicated recruitment of talent as an important job function- most times omitted in describing what their job entails!!!)  Future articles will add to how you bring the targeted people through a process of selection that will reduce the risk of hiring a “poor fit” for your organization and at the same time make all parties feel good about the process if they were selected or not.  Notice I said “poor fit” rather than a bad hire which assumes bad person or bad company.  Let’s discuss the mind set that you need to have and some of the ingredients you need in your initial contact with someone you have identified as potential for your organization.</p>
<p>Here are a few realizations that I have come to along with other successful company or private practice owners:</p>
<ul>
<li>Often best people are not looking for a new job they are currently working</li>
<li>Many people do not register on job boards or read help wanted ads</li>
<li>Many if not most of the talented people have not written a resume in years</li>
<li>Almost everyone goes through a least a minor dissatisfaction phase in their job yearly</li>
<li>Recruitment agencies are really working at cross purposes with you and your goals</li>
<li>When you properly approach a targeted person for your company, you are actually marketing your business</li>
<li>Adjusting how you look at recruitment and selection is necessary to win the talent war</li>
<li>Committing to “candidate philosophy” and “take away technique” are keys to hiring strong people.</li>
<li>Many talented people have been hired via an indirect approach-(this been a personal favorite of mine)</li>
<li>Recruitment is an ongoing process for all management- you need to identify talent before you need a person</li>
<li>We need to learn to hire slowly and fire more quickly and being a good talent recruiter allows you to do this</li>
<li>A good recruiter is not a prisoner of poor performers on his/her team- you are in strong leadership role of raising the performance bar.</li>
</ul>
<p> </p>
<p><strong>Mindset:  </strong>If I were to adopt <strong>“the candidate philosophy”</strong> as the basis of my selection process, I can explore a business opportunity with anyone directly or indirectly.  This philosophy is based on the mature and mutual exploration of a business opportunity where either party can opt out once they sense the opportunity may not be a good fit or continue the process to its natural conclusion.  This allows you as an owner/manager to approach anyone if they are willing to be a candidate.  Approaching people with this philosophy places a heavy emphasis on identifying people who possess the right mix of behavior, chemistry, interests and experience for your organization.  It allows you to approach seemingly qualified people who are already employed, with the knowledge that they do not have to be unemployed to be approached and that in the timeline of a year the candidate will experience at least some mild dissatisfaction and will then become a candidate. </p>
<p>The <strong>“candidate philosophy”</strong> is also “a takeaway” for a hotshot producer.  Let’s assume that you are approach a highly successful sales person.  Because of their reputation and track record, they have received many offers.  Your approach is entirely different as you are offering nothing but the mutual exploration of an opportunity.  You want to be certain that the candidate will be more successful in your environment that where the candidate currently resides.  By doing this, you are developing a certain amount of control early, which is necessary.  If you can not manage this process with the candidate, how are you going to manage/lead the candidate once they are hired?  You know what is like to manage a maverick that produces revenue and turns the whole organization upside down in the process!  Good strong candidates will respond positively to a mutual exploration of a business opportunity.</p>
<p>To get more information on how to recruit “candidates and market your business at the same time” email: <a href="mailto:bclinton@business-wise.com">bclinton@business-wise.com</a> and request “C of I Process” </p>
<p><strong> </strong></p>
<p><strong> </strong></p>
<p><strong> </strong></p>
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		<title>How Do I Conduct A Screening Interview?</title>
		<link>http://thefamilybusinessblog.com/?p=121</link>
		<comments>http://thefamilybusinessblog.com/?p=121#comments</comments>
		<pubDate>Tue, 09 Feb 2010 16:26:47 +0000</pubDate>
		<dc:creator>admin</dc:creator>
				<category><![CDATA[Leadership/Management Development System]]></category>
		<category><![CDATA[Selecting Talent]]></category>

		<guid isPermaLink="false">http://thefamilybusinessblog.com/?p=121</guid>
		<description><![CDATA[I seem to be getting great people to interviews and they seem to be very qualified and impressive and I like them right away…..but when they join the company they are not the same….I must have missed something.  One of my lessons when managing my sales force hit home many times, when I only hired experience or on superficial impressions- I learned that two other key items came with the new hire; chemistry and behavior!

]]></description>
			<content:encoded><![CDATA[<p>I seem to be getting great people to interviews and they seem to be very qualified and impressive and I like them right away…..but when they join the company they are not they same….I must have missed something.  One of my lessons when managing my sales force hit home many times, when I only hired experience or on superficial impressions- I learned that two other key items came with the new hire; chemistry and behavior!</p>
<p>I lot of my clients have a selection process that they go through- they spend a lot of time initially in their first interview and then less time in future interviews.  There was a study conducted by a major university about flawed interviewing processes- in 68% of the interviews, the interviewer had made a decision on hiring or not hiring the interviewee in the first four minutes of the interview!!  We know that when we step back and think about it, when this happens, the selection process is superficial and purely subjective.  However, don’t beat yourself up if has happened to you.  You probably have had very little formal training on interviewing and you as an owner are very passionate about your organization and can not wait to tell your story.  So, as soon as you get a signal that you like this person, you begin talking.  In fact you may spend 80% or more of the interview talking rather than listening.  It should be reversed with 80% of your time listening.</p>
<p>If the above seems to describe what you have experienced or what your manager’s experience when interviewing potential hires, you are potentially hiring the wrong people and even worse, you maybe ruling out talented people too quickly.  There is a need to make your interviewing process provide you with objective information so you may determine if the person being interviewed matches or fits your position requirements.</p>
<p>I am going to give you a screening interview with sequenced questions that will allow you to determine if the person being interviewed has skills, behaviors and knowledge that are able to be applied in your job opportunity.  This is based on the assumption that you understand the behaviors, skills and knowledge that are currently needed for your position.  The questions that I will suggest go from easy, to difficult to tough in sequence.  They are designed to provide the following:</p>
<ul>
<li>Specific job related information</li>
<li>Based on real time job information</li>
<li>Transferrable skills, knowledge and behaviors</li>
<li>Thread of success that can be used in your position</li>
<li>A thirty minute to forty five minute interview that could be conducted at anytime    </li>
</ul>
<p> </p>
<p>Here is the sequence of questions:</p>
<p><strong>Easy- warm up questions:</strong></p>
<ul>
<li>Tell me about your current and past positions</li>
<li>What are some of positions or situations you really enjoyed?</li>
<li>Why?</li>
<li>What are some of the situations you did not enjoy?</li>
<li>Why?</li>
</ul>
<p> </p>
<p>I know you are thinking that you do this now as they are pretty basic questions found in all interviews.  That is what makes it easy for the person being interviewed too- more comfortable in answering your questions and lowers their defenses.  Although the info by itself is standard- when combined with the next few questions it becomes very meaningful and will give you information as to how to powerfully and quickly sell your opportunity if appropriate at the end of the interview.</p>
<p><strong>Job related or more difficult questions:</strong></p>
<ul>
<li>Tell me about some of your achievements that you are proud of: don’t be modest</li>
</ul>
<p> </p>
<p><strong>Difficult questions follow each shared achievement:</strong></p>
<ul>
<li>Tell me how you contributed to this achievement- what did you do in achieving…?</li>
</ul>
<p>Here you are looking for specific actions that they undertook</p>
<p>Decide if the demonstrated skills, knowledge and behavior are a good fit for your position.  If the person fits or shows a thread of success you may offer a brief description and sell of your opportunity and ask if the would like to explore this opportunity further together as mutual candidates.  Notice, you are not offering a position, you are only deciding to invest further time in the selection process with this person.</p>
<p><strong>Summary:</strong>  If you experiment with these questions you will get specific relevant information about the candidate and their key behaviors, skills and knowledge.  It is what they have done and how they did it that is meaningful information.  This will make their resume relevant and get to the heart of who they really are and their potential fit.  There are a lot of other key elements in a successful selection process or discipline that will be shared in future articles.  Now you know how to get relevant information from a screening interview and apply it- you are better than most interviewers.</p>
<p>For a free thirty minute discussion and evaluation of your current selection process please email: <a href="mailto:bclinton@business-wise.com">bclinton@business-wise.com</a> and request “Selection System Discussion”.</p>
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