Sunday, November 7, 2010

Just Stuck in It

As a business management consultant, I would describe a lot of what I see in business families are people stuck in stupid. They are not stupid; they're just stuck in it. The primary reason they are stuck is their lack of flexibility, which inhibits change. Change, incidentally, is why people hire consultants in the first place.

I ask people "What do you do for a living?" Generally, they explain about some functionality or process they perform. I repeat the question until they to stop. "You make decisions," I say. Then I ask, “If someone is stuck in stupid, what kind of decision could they expect to make?”

Learning to ask questions is the first step out of the stickiness. For example, let’s say our Company is expanding its’ scope of work and over the next 6 months it wants to add 50% to its’ gross revenue.

The questions that need to be answered are:

· Does the Company have the qualifications to expand? [That should not be a problem if the company is currently performing in these areas.]

· Does the Company have sufficient capital or credit to expand? [A projection showing a Cash Flow would provide insight into what the cash requirements would be with the expansion.]

· Does the company have the staffing required to make such a move?

· Are additional employees required, are they available, how much training will they require, and what are the costs?

· How much competition does the company have and will the expansion enhance or hurt the Company’s position in the community?

Another issue with being stuck is what I call breathing your own ether. By ether I mean the things that business owners say to other people and to themselves like, “We’re doing just fine.” “I don’t need to write it down. I’ve got it all in my head.” And my personal favorite, “I’m an idea person.” [So are children in a playground.]

The best ether I heard recently came from a client who told me, with a straight face, that his spouse was working in the company without any pay or job title or job description. “It is saving us a lot of money because I don’t have to hire someone else.” Actually, the spouse does have a job title – Owner’s Wife. One thing is certain: the compensation plan sucks.

Let’s ask some more questions:

· Doesn’t such a situation have the net effect of putting all of their eggs in one basket?

· Is the spouse qualified to perform the duties of her functional position, like book keeper or sales manager?

· Have the owner and spouse established clear boundaries? [At what point do their business and personal lives begin and end?]

The fact is that few people ever want to admit that they do not know what they don’t know. The tendency is to claim that they have been so busy working that they haven’t been able to take the necessary time to make that discovery. Unfortunately, there is ether.

Three choices are available in these situations.

· Keep doing what you are doing.

· Stop what you are doing and go back to school.

· Hire a competent business consultant to help you.

There are sub-sections of those three choices, but I am trying to keep this short and to the point. Part of the stickiness is not admitting that some outside advice might be helpful. A person’s ego saying “I can do this better” is what starts business ventures. The same ego saying "I don’t need anyone telling me what to do” is the glue that keeps business people stuck in stupid.

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