Monthly Archives: February 2011

The Risks of the “Accepting The Devil You Know” Strategy

LinkedInTwitterGoogle+FacebookShare

Cash was always “KING,” but now it is “QUEEN”, “PRINCE” and “DUKE” for a heck of a lot of companies.  Instead of business leaders looking to optimize opportunity, partner with new players, and aspire to new approaches, most seem to be seeking survival, reducing risk, and controlling change. You are not alone if your recent business decisions have felt like accepting the “lesser of two evils” or being stuck working with “the devil you know.”

But it’s not OK.

This extended recession has done some significant damage.

I am becoming particularly concerned about family owned businesses as they huddle around one another and act like it is “us against the world.”  The old premises are resurfacing. You know the ones I am talking about…no one outside the family can be trusted and only immediate family members would care enough.

You have a lazy brother who refuses to learn to use new technologies or an emotional sister who wants to give extra discounts to her friends or a cousin who assumes you will establish a new location in Colorado so he can go skiing more. Just because they are relatives, are these people all automatically better than considering strategic alliances with an up and coming firm or bringing in a CFO who actually understands growth financing or considering a new channel of distribution (because you know the way you currently do things hasn’t been working for YEARS!)?

Maybe your family has passive aggressive behavior, long term indecision, difficulty holding one another accountable, confusing compensation formulas, or conflicts over succession.  If so, selecting business strategies that emphasize maintaining the status quo will compound those problems…not solve them.  Please, do a gut check.  Are you becoming more introspective, less open to negotiations, less willing to hear new proposals, and less willing to meet new people?

This is scary stuff!  It sounds trite, but we have to regain our entrepreneurial spirit, quest for quality, and love of learning!  We just can’t let the lousy economy set us all back dozens of years!

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST™. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB service, technology, and distribution clients get on…and then stay on…the published lists of the fastest growing privately held companies. All of her own service businesses (strategic planning, executive advisory, growth financing, radio show, speaking, search) help privately held midsized companies achieve accelerated growth with sustained profitability.™ Ambler is in her 7th year hosting a weekly peer-to-peer-to-peer on line radio program at www.Business.VoiceAmerica.com and www.growthstrategistradioshow.com that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. Family owned businesses will be emphasized in 2011. Ambler can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com

It’s Time to Address Two Expensive Executive Behaviors

If you read my weekly blogs, you undoubtedly also know that I host a weekly on-line radio show called The Growth Strategist™. I’m in my seventh year hosting it and just LOVE hearing about what people have done to make growth strategies like acquisitions, franchising, market expansion, etc really work.  My guests are all Presidents/CEOs of midsized companies (typically $20 -200Mil/yr) so they are all bright and experienced. Most convey enthusiasm and are articulate.  We are coming up on our 300th show soon (YEAH!) plus I’ve provided strategic guidance to over 800 consulting clients over the years.  The point is…by now I can hear some distinctive patterns. Some of the patterns may not be surprising.  But in a way, if they are so predictable, wouldn’t you think that more executives would be addressing them by now?

For example: When I am rehearsing with the President/CEO of a family-owned business, I usually get candid responses to questions about target markets, primary customers, and key products.

Don’t get ahead of me here.  Of course, I can’t start with questions about succession, exit strategies, or executive compensation.  Heck…an executive doesn’t have to be running a family owned business to be reluctant to talk about all of that.

Take a step back from all of that. The answers from executives of family owned businesses seem strained when the topics of strategic alliances, joint ventures, or acquisitions come up. The implication is that internal relationship issues make negotiations with outside entities more difficult.  These days, that fact would certainly turn “family owned” into a handicap because customer expectations are going up and up.  The cost of trying to do everything yourself is becoming prohibitive.  Plus the world is getting smaller and smaller.  Today, a family must proactively address relationship issues that slow down strategic analysis or decision-making.  It sure comes across in media interviews. The radio guests who attract new business opportunities as a result of appearing on my show have conveyed openness, clarity of direction, a capacity to interact with a wide range of people, and an understanding of how deals are struck.

I’ve also noticed that most of the female executives avoid directly answering questions about strategy. I repeat, my guests are all Presidents/CEOs of midsized companies. These are accomplished executives!  I’ve been amazed how many times I have had to encourage (no, plead) with the female guests to share the logic behind major decisions like acquisitions, new products, or geographic expansion. Several have been reluctant to directly respond to the straight forward question about their gross revenue… even though the numbers are plastered all over press releases and resources on the Internet.  And when these reluctant female executives do share their gross revenue, they provide too much explanation. It sounds almost like an apology.  Some of them are running $Bil businesses!  Why on earth are they apologizing to anyone?

There are undoubtedly several understandable reasons for the reticence to just talk, but frankly, my experience as a talk show host has given me new insight about why so many corporations have been reluctant to appoint successful women business owners to their corporate boards. The major search firms who are looking for board members screen shows like mine. They must be concluding that the female guests CAN’T think strategically or CAN’T keep up with a high level discussion. That’s very sad.

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST™. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB service, technology, and distribution clients get on…and then stay on…the published lists of the fastest growing privately held companies. All of her own service businesses (strategic planning, executive advisory, growth financing, radio show, speaking, search) help privately held midsized companies achieve accelerated growth with sustained profitability.™ Ambler is in her 7th year hosting a weekly peer-to-peer-to-peer on line radio program at www.Business.VoiceAmerica.com and www.growthstrategistradioshow.com that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. Family owned businesses will be emphasized in 2011. Ambler can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com

When You Can’t Seem to Move Beyond “Business as Usual”

It has become apparent to just about everyone in your midsized family business that your customers want/need/expect you to utilize faster more customer-centered technology.  You may even know what hardware, software, and training will be needed.  But, where will you ever come up with all of the money that would be needed?  It’s difficult enough to handle what you are already doing, so the technology upgrade project gets put on the back burner and things keeps going …business as usual.

Sound familiar?

Chances are very good that technology isn’t your causal problem.

An inability to face the need to dramatically upgrade technology (or take on other similar strategic initiatives) is a symptom of poor communication, lack of accountability, and/or incomplete leadership development.

Think back about the last time your family business tried to do real strategic growth planning.  If your team couldn’t remain optimistic, constructive, and future-oriented, you might want to first bring in outside assistance to strengthen your executive communication, accountability, and leadership development.

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST™. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB service, technology, and distribution clients get on…and then stay on…the published lists of the fastest growing privately held companies. All of her own service businesses (strategic planning, executive advisory, growth financing, global radio show, speaking, and executive search) help midsized privately held midsized companies achieve accelerated growth with sustained profitability.™ Ambler is in her 7th year hosting a weekly peer-to-peer-to-peer on line radio program at www.WorldTalkRadio.com and www.growthstrategistradioshow.com that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. Family owned businesses are being  emphasized in 2011. Ambler can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com

Are Multiple Locations Driving or Draining Your Profitability?

You probably know a few family owned businesses that are headquartered in the northern half of the United States that have a second office in Florida or Arizona.  If your company has viable prospects and/or customers in Florida or Arizona, the second location pays off in two ways. Real business growth can be accomplished plus the second office can help the founder of the business spend winter months in a warmer climate, ease into retirement, and deduct at least some of the costs associated with the second location.

But, recently, I was brought in to help a 4 location family owned business with its strategic thinking and implementation planning. During a speech, they had heard me say that “one secret to achieving accelerated growth with sustained profitability™ is to reverse the phrase.” So, they were not surprised when I started our discussion with questions about what drives their profitability.

It didn’t take long to discover what has been draining their profitability.  The four locations!

The Colorado location was selected because one son enjoys skiing. The Florida location was selected because the father enjoys golf. The Manhattan location fed the daughter’s Broadway show and retail therapy habit. The youngest son enjoyed surfing, so you probably have already guessed that their fourth location is in California.  Hey…it could have been Hawaii!

Not to be harsh…but let’s ask the honest question about the real purpose of this family business.  Apparently, the business serves as a mechanism to fund/support preferred lifestyles for members of the immediate family. But once that self serving goal has been met, can the business ever really grow?  It wasn’t surprising to learn that profitability and limited cash flow were chronic recurring problems for them.  Imagine how de-motivating this pattern would be for their employees.  I wondered if this family actually believed that their customers hadn’t picked up on their real motives.

It would take a little while to add more customer-centric thinking to this family owned business, but it is possible.

It is one thing to make sure your family business rewards the hard work of relatives who increase the value of the enterprise on a daily basis. It’s another to make business decisions with little consideration of customers and employees.

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST™. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB service, technology, and distribution clients get on…and then stay on…the published lists of the fastest growing privately held companies. All of her own service businesses (strategic planning, executive advisory, growth financing, radio show, speaking, search) help privately held midsized companies achieve accelerated growth with sustained profitability.™ Ambler is in her 7th year hosting a weekly peer-to-peer-to-peer on line radio program at www.Business.VoiceAmerica.com and www.growthstrategistradioshow.com that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com

Growth Strategy Tip

Testimonials

Aldonna has been a very valuable business confidant, advisor, motivator and mentor. It is very obvious to our management team that she has a keen insight into and genuine interest in our business and our success.

Mary Casey
Former CEO, HealthBridge, Inc.

Schedule a FREE initial consultation with Aldonna to find out how she can help you work through your challenges and take your business to the next level. Click Here