Run Your Business, Don't Let It Run You: Learning and Living Professional Management

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Millions of business owners and leaders need help making the transition from a start-up or founder-centered firm to professional management. This book teaches them the best ways to make this transition.

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One. Is Your Business Running You?

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Wes started his IT business as a way to raise money to go to medical school. He never thought about it as his career or his future until he was in the midst of it. The business took on a life of its own with growth through what he described as “brute force.” Wes was energized by every opportunity that came his way. He snapped up every new project despite the pressure that it put on his resources and the toll that all this growth had on everyone. His employees went home drained at the end of each day. Wes knew that he risked losing key people if he kept pushing them, and his family barely had any time with him.

Jim’s experience as president and owner of a security services firm had all been growth. He’d never known anything but the upside until October 1, 2008, the first day of his fiscal year, which happened to coincide with the beginning of the Wall Street meltdown and an economic recession. His phone started ringing incessantly, and every caller had the same message: “We need to cut our budget.” His company lost 18.5 percent in a matter of months. He had no idea what to do during those market conditions, no experience, no plan, and no one to advise him. He felt powerless and alone. His fears of failure and his isolation mounted daily. Although no one else knew it, he feared that he’d fail to make the payroll. Lying awake most of the night and retreating from his family, he was spending all his time at work worried.

 

Two. Shifting to Professional Management

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Professional management—a way to run a business employing proven fundamentals and disciplines that empower a business to continually reach new levels of growth, as we have defined it—has been around for a long time. Many books have been written about it by a host of thought leaders who specialize in the subject and express differing viewpoints on its various aspects. Business schools teach it. Management schools do, too. In fact, there is so much information out there that trying to take it in and make sense of it can be overwhelming.

In my early days as sole owner at Iams, as I was seeking the learning I needed to help me, I came across the idea of professional management. I believed it offered a viable solution. I took a course, I worked with consultants, and I applied what I learned. You could say that I became a perennial student of it. Throughout my years in business I’ve read many books, and I have been most influenced by the theories of Peter Drucker, W. Edwards Deming, Leon Danco, and, more recently, Patrick Lencioni. However, what I learned that has been most valuable has come from putting ideas into practice. Through a great deal of trial and error, I found that some parts of professional management worked better for me and for the Iams organization as we grew. I kept refining and developing our application of professional management as I learned from results and what was happening around me. We crafted a system that worked great for us.

 

Three. How You Lead

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When Iams opened its first new plant, I took a big step toward letting go by investing in hiring the right manager. I believed we wouldn’t be small for long, so with the help of a headhunter, I deliberately hired above our needs. I recruited John, who was managing a plant producing 10 times the volume of our seven-person, one-shift operation.

John was a great hire. He helped us to achieve all of our growth targets and more. But in the process, he had to remind me more than a few times to step back, get out of his way. At one point, he asked, “Clay, when do you plan to let me do the job you hired me to do?” That was a great question, and it jolted me into realizing that I had to break my old habit of forcing my own will and way of doing things on others. I learned that letting John do his job was a way of respecting him. After all, I had hired him for what he could bring to the organization—skills, experience, insight that we didn’t have. He was better than I was at some things, and he was overqualified for the present job, but he was equipped to handle the growth that lay ahead. I needed to get out of his way and my own. This was one of many lessons I needed to learn.

 

Four. Your Dream with a Plan

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Strategic planning has gotten a bad rap with some business owners. Perhaps you are among them. You like feeling that you have flexibility, the room to move from one opportunity to another, and you assume that planning places tight constraints on you. You may think that planning strips away your entrepreneurial spirit. There is this misconception that planning means getting your wings clipped, losing freedom, giving up spontaneity and the thrill of the “Aha!” moment. The notion of planning, thinking ahead, and committing smacks of a bureaucracy that you want to avoid, and it seems futile to invest in a weighty plan when the world and the marketplace can change quickly.

In our fast-paced, complex, changing world, it feels as though many things are changing so rapidly, why bother to plan? How can we plan and not feel that our plans are outdated before we put them into action? What good is planning in a global marketplace where things can change in an instant, where instant messaging and instant gratification have become the norm?

 

Five. Grow Your People, Grow Your Business

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People are your most valuable asset, so it makes sense that one of your most important roles is to develop them, each and every person individually, as part of teams and as an essential part of the organization. Investing in your employees by expanding their responsibilities, giving them opportunities for new learning, encouraging them to set goals and have development plans, providing coaching and feedback, and holding them accountable will build trust, commitment, and passion toward your mission and vision. A committed, passionate workforce will deliver your long-term business goals and move you closer to realizing your vision.

This chapter explores ways in which you can tap into your employees’ talents and unleash their potential in ways that can mutually benefit the employees and your business today and in the future. People development is essential for operationalizing your strategy.

The commitment to developing people needs to be a high priority. It is so significant that it needs to be a central focus, with a goal of building the best workforce in the industry. This is a collaborative process that fosters an intersection of the needs and desires of individuals with the current and future needs of the company as it grows. In fact, the more intertwined this process is, the more likely you are to be successful at building a truly sustainable enterprise, because it is through this process that individuals see and feel the connection of their own passionate purpose and valuable contribution with the mission and vision of the company.

 

Six. Aligning Your Business with Your Vision

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Having a strategy with goals and priorities with which to set direction is only part of the equation for professionally managing your business. That’s why the O (Operation) in DOC includes Business Structure. The heart and guts of your business is the structure you create that helps people bring your vision to life. Having an intentional business structure is organizing your business in a way that helps everyone to be successful.

So, what is business structure? How does it help you and others in practical, meaningful ways? I think of it as the who, what, when, where, why, and how of business. It brings together your vision and mission with the people and the work. It operationalizes your goals. An effective structure reflects how decisions are made, how work gets done, how roles and relationships are defined, and where boundaries lie among departments and people. The goal of a good organizational structure is to provide a framework for putting your business’s strategy into action.

In this chapter, we will discuss structure in these forms: business model, operational planning, organizing people and work into areas of responsibility, and performance standards. We believe that intentionally developing these structures or processes is practical and meaningful in achieving growth and sustainability, and it plays a huge role in making sure that you are running your business instead of feeling like your business is running you.

 

Seven. The Keys to Accountability

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Performance management is a process of setting up metrics and routines for measuring, monitoring, and reviewing information relevant to goals, and of examining that information against strategy, effort, and performance. This process is the basis of holding everyone accountable. It is most successful when you connect strategic goals to operational goals, operational goals to business results, and results to monitoring tools and a review process that helps you to see clearly where you stand in making progress toward your strategic goals. This is the most practical and meaningful way to plan for growth and account for everything and everyone that played a part in helping you to get there. Performance management is the ongoing process of measuring, monitoring, and reviewing the structures you put in place to operationalize your goals.

In this chapter, we’ll explore how internal controls, key performance indicators, and a continuous improvement process can connect everything: your goals and every employee’s contribution and performance in making progress toward meeting those goals. Your internal control process is a way to “control” results instead of people, to use practical metrics and tools for monitoring progress toward goals, to evaluate performance and examine strategy in light of results, and to connect everyone meaningfully. It is the operational check on everyone and everything going in the same direction, making progress toward your goals and ultimately toward your vision.

 

Eight. Culture—the Engine Moving Your Business

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Ben wanted the value of continuous improvement and innovation to become embodied in every part of his company. He wanted everyone thinking about better ways to do things. To start the ball rolling, he decided that he would talk, one-on-one, with as many people in the company as he could. One day he met with a manufacturing manager, and another day he met with a janitor. He had a conversation with the person who was the last one on the line before the product went to the customer, and he talked to the customer-service representatives. Every day he talked to someone. During these conversations, he asked two questions: “What do we do well? What do we not do well?” Quickly, he realized that he learned more valuable information via the second question than the first. Jotting down notes as he listened, he made certain that after each conversation, he took action by initiating changes or at least exploring the issue, based on what he learned. When possible, he involved the employees and gave them the responsibility of holding him accountable. Pretty soon, the word around the organization was that the owner really cared what the employees thought. He really listened, and what people said mattered. They became eager to talk with him and to step forward with ideas.

 

Nine. The Gift That Keeps on Giving

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Few of you would turn me down if I offered you a resource that would help you to gain market share, improve profitability, and make better decisions. Yet among the thousands of business owners I’ve met, mentored, or addressed over the years, four out of five do just that when they fail to set up an outside board.

If you ran a popcorn stand on the corner of Third and Main in Dayton, Ohio, I would still suggest that you have an outside board. By that, I don’t mean a panel of family members, paid advisors, or retirees; I mean a board made up of executives you respect—impartial outsiders actively involved in the management of other companies at least as large as yours. If you’re willing to work hard to make a board effective, and you’re willing to subject yourself to scrutiny, it’s the best investment you can make.

This chapter examines some common misconceptions about what effective boards in private enterprises do and don’t do. It offers examples of the benefits these boards can bring in the form of better decision making and planning. It also shows why some issues are too complex or difficult to handle well without a board.

 

Ten. The Business of the Family

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I believe it is imperative to invest as much care in the business of the family as you do in the family business. What does that mean? I think it means acknowledging that your business has an impact on your family and purposefully managing that impact, proactively determining how the family will be involved. In this chapter, we will look at some of the more common issues.

When you put your capital at risk to grow your business, your family has a stake in that risk, too. Everyone will be affected by long workdays or time spent away, by worries and accomplishments, by all the changes that growth brings. In their own way, whether or not they are employees of your business, your family members play an important role. They do their jobs so that you can do your job. It’s all part of having a whole, authentic, and balanced life.

Just as you don’t walk out your door for work and leave your family behind, you don’t come home and leave work completely behind. Although some business owners try to do so, you don’t have to split your life in half. You can consciously connect all parts of yourself—your family and your business—and find a good balance. Share this part of yourself with your family, but do it consciously. Look at the bigger picture, get perspective, and incorporate your values. Partner with your spouse, and talk to your children as appropriate; share with them, and let them know you—all of you, not just certain parts. And if necessary, bring in expert advisors to help you. As a result, you will have more meaningful relationships with your family members.

 

Eleven. Sustainability and Succession

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Since planning and setting direction for the future is integral to professional management, succession planning and sustainability are a natural part of it. But it is common for business owners who are otherwise capable planners—who produce forward-looking vision and mission statements, create bold strategic plans, and do a good job of scanning the horizon for change—to fall short in this area: they run their companies as if they’re never going to retire. Many business owners avoid rather than address this crucial responsibility.

Have you thought about an exit plan for yourself? Do you want the business to stay in the family, and if so, do you want to pass on management of the business, ownership, or both? If not, what prospects do you see for management and ownership? What happens to the business if something happens to you and you can’t run it anymore?

I didn’t know the answers to these questions when I was building my business. Not many business owners do. But if you don’t figure out the answers yourself, someone else will do it for you. If the business owner “does not have the courage to face the problems of the future, then his banker and attorney will do it for him on the way back from his funeral—four cars back from the flowers,” Leon Danco says.1

 

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