Leadership Lessons

Please join us on February 29 for our 20th annual Cocktails and Conversations program, presented by the Women’s Network of Miles & Stockbridge and featuring Brooke Lierman — the 34th Comptroller of the state of Maryland and the first woman to be independently elected to one of our state’s constitutional offices. We’ll kick off Women’s History Month a day early — on Leap Day 2024 — with a fabulous group of women celebrating women. And, we’ll take this “extra” day of the year to focus on making new connections, sharing ideas and focusing on the WHM theme of “Women Who Advocate for Equity, Diversity and Inclusion.” We look forward to networking with everyone while enjoying hors d’oeuvres and cocktails overlooking Baltimore’s Inner Harbor, capped off with a dynamic talk from our speaker. Register online at  

Whatever happened to the original 11 companies Jim Collins featured in his 2001 book Good to Great? As part of a review I recently Key Findings. The research team discovered many lessons along the way, but one “giant conclusion” stood above the others. Their research confirmed that “almost any organization can substantially improve its stature and performance, perhaps even become great, if it conscientiously applies the framework of ideas they [the Collins team] uncovered.” Additional lessons learned from the companies that went from good to great: Celebrity Leaders. Famous leaders with larger-than-life personalities who ride in from the outside were negatively correlated with taking a company from good to great. Executive Compensation. There is no systematic pattern linking specific forms of executive compensation to the process of going from good to great. Strategy. The strategic planning process did not separate the good-to-great companies from the comparison companies. Both sets of companies had well-defined strategic plans, used similar planning processes, and spent comparable amounts of time on long-range strategic planning. What Not To Do. Good-to-great companies focused less on what to do, than on what not to do, and what to stop doing. Technology. Technology-driven change has virtually nothing to do with igniting a transition from good to great. Technology can only accelerate a transformation but cannot cause a transformation. M&A. M&A plays virtually no role in igniting a transition from good to great. Merging two mediocre companies never make one great company. Focus on the business. Good-to-great companies create alignment and motivation by focusing on running their business rather than getting distracted by large-scale change management initiatives. No Launch Event or Revolutionary Process. Good-to-great companies had no name, tagline, or launch event to signify the start of their transformation. Most were evolutionary, not revolutionary. Greatness is primarily a matter of conscious choice. Good-to-great companies were not, by and large, in great industries; some were in terrible industries. Greatness is not a function of circumstance (i.e., sitting on the nose cone of a rocketship). What I Found Interesting. Few people realize that as unfortunate as Collin’s only high-profile bankruptcy was of his original 11 Good To Great companies, a rise-from-the-ashes story emerged shortly before the Circuit City bankruptcy happened. The Circuit City management team accelerated the spinoff of another one of their start-ups, called CarMax (NYSE: KMX), which has since grown into a juggernaut that today employs 32,647 people and generates $31.9 billion in annual revenue. It’s interesting to note that even when the original Circuit City business model was failing to keep pace with their larger rival, BestBuy, their leadership team had the foresight and was able to fund and launch the next great idea – while continuing to build both businesses for a few years until they were able to safely step off the sinking Circuit City ship and onto the CarMax lifeboat they had launched. Summary – The book organizes a highly complex, multi-year research project into groups of insightful examples using a framework that supports and explains their findings. The case studies were well-researched and easy to follow, and I appreciated the handy summaries at the end of every chapter. I was impressed with the breadth and depth of the research put forth to write the book. Based on years of empirical research, data gathering, interviews, and real-world examples, it provides an understandable path for helping companies move from good to great.

When a new leader takes the helm, their decisions and maneuvers can cause a ripple effect that can be felt throughout your organization – especially regarding technological infrastructure. Even the most minute change can affect the delicate balance of technology within your organization and impact your control environment. During a leadership transition, CFOs have an opportunity to play a critical role in ensuring the passing of the baton is smooth and secure. Taking the proper steps to ensure consistent operations of critical controls during times of change is essential to keeping every aspect of your company secure. Where Do Things Go Wrong? Many scenarios could occur for a leadership change to create a technological disruption. Perhaps your new CEO doesn’t have a strong technological background, so they’re not focused on strengthening internal control processes, which increases the possibility of preventable risk. Or, they want to shake things up from the beginning, introducing new services or technology. Switching vendors or adopting different software tools without proper planning, vetting, and evaluation can create vulnerabilities. Recent headlines demonstrate changes in leadership have the potential to call digital operations into question. For instance, consider the recent takeover of one of the most prominent social media companies. Immediately upon acquisition, the new CEO took a hard-lined approach by significantly restructuring staff and fast-tracking product updates. In situations where such moves occur, leaders will want to be mindful of a potential public loss of confidence or resulting operational issues, which can result in negative publicity. This can have down steam impacts: remaining staff can be left scrambling to plug vulnerabilities and shoulder the added workload left by those let go. Meanwhile, frustrated users of the company’s applications can face glitches, bugs, and other disruptive issues. Another example is the recent collapse of a well-known cryptocurrency exchange group. The absence of a robust control environment led to the first crack in its fragile framework. For businesses looking to safeguard operations with potential leadership shifts in mind, some basic business process controls can help stop or identify issues in control environments early on. While navigating a leadership change, risk management is essential to continue operating ethically and remaining compliant. With the proper considerations in place, you can position your company to be as best prepared as possible when it steers into the unknown. How to Avoid Technological Pitfalls As many CFOs know, when leadership changes in an organization, everything could change, or nothing could change. Being proactive instead of reactive is the key to being prepared for any scenario. You must ensure all your bases are covered if changes are made to processes and technology, and perform due diligence to confirm other areas aren’t affected. When anticipating a change in leadership, consider how that change will affect your organization’s processes and technology and the continued operation of your internal controls. Be ready to address any potential problems swiftly and with proper communication from the top. Conduct an assessment of all IT systems, and evaluate and audit security protocols. Also, be sure to equip your team with the necessary knowledge and tools required for data protection today. And finally, analyze how third-party services might help reduce risk during times like these when changes require you to depend on them more than ever before. Having an independent party study your controls to ensure they’re secure and ready for a leadership transition can help increase consumer and stakeholder confidence. Furthermore, Connect with our seasoned experts today. Copyright © 2023, CBIZ, Inc. All rights reserved. Contents of this publication may not be reproduced without the express written consent of CBIZ. This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. The reader is advised to contact a tax professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein. CBIZ MHM is the brand name for CBIZ MHM, LLC, a national professional services company providing tax, financial advisory and consulting services to individuals, tax-exempt organizations and a wide range of publicly-traded and privately-held companies. CBIZ MHM, LLC is a fully owned subsidiary of CBIZ, Inc. (NYSE: CBZ).

“So far I have been a great CEO, but I am not sure that I am the best person to take my company to the next level,” confided this CEO of a fast-growing company. It looked like his recipe for success didn’t work anymore: he was constantly fighting fires and couldn’t streamline his operations. He was trying though – unsuccessfully. In short: he felt stuck, overwhelmed, and doubted his ability to improve the situation. I hear similar stories of “imposter syndrome” from many CEOs. The imposter syndrome is the belief, grounded in self-doubt and fear, that you don’t belong where you are. Often these CEOs’ reaction is to work harder to prove that they deserve to be in their position. Unfortunately, this negatively impacts their performance: they are not at the top of their game because of increased self-doubt, persistent fears of failure, and long working hours. If you experience imposter syndrome, you need to tackle it head-on. In a few instances, they are not the right person in the right seat indeed. Very often though they just lack tools, methodologies, and self-confidence to clarify their priorities to move more decisively toward their goals. Many CEOs experience imposter syndrome Many more CEOs and successful people than you may think experience at some point the imposter syndrome – even though few admit it openly, as Starbucks’ CEO Howard Schultz put it: “Very few people, whether you’ve been in that job before or not, get into the seat and believe today that they are now qualified to be the CEO. They’re not going to tell you that, but it’s true.” Tom Hank once shared: “No matter what we’ve done, there comes a point where you think, ‘How did I get here? When are they going to discover that I am, in fact, a fraud and take everything away from me?” Research estimates that 70% of the US population experiences it at some point in their life, and it disproportionately affects high-achievers: Facebook’s former COO Sheryl Sandberg admitted: “Every time I excelled, I believed that I had fooled everyone yet again. One day soon, the jig would be up. There are still days when I wake up feeling like a fraud, not sure I should be where I am.” David Bowie struggled with self-esteem too: “I had enormous self-image problems and very low self-esteem, which I hid behind obsessive writing and performing. I really felt so utterly inadequate.” Even Agatha Christie, despite selling two billion copies of her books: “I don’t know whether other authors feel it, but I think quite a lot do – that I’m pretending to be something that I’m not, because even nowadays, I do not quite feel as though I am an author.” Practically speaking: What can you start doing today? Find out practical ways to deal with your imposter syndrome here:

In their book The Execution Premium, Harvard’s Norton and Kaplan stated that 80% of companies never achieve the full value of their strategy.  That is a frightening statistic.  In our experience, the greatest reason is that short term needs take precedence over long term strategic choices. So, what can leaders do differently to be among the 20% that achieve all your strategic objectives? Embrace the discipline of strategy management. Consider these four principles of strategy management: Focus – Strategy provides focus to make the complex more manageable. It helps to manage the allocation of resources toward the most promising opportunities. Alignment – Focus results in organizational alignment. A clearly articulated strategy brings everyone together—owners, family, management, and employees—to work collaboratively to achieve the strategic objectives. Commitment – Alignment results in commitment to achieving the Mission, Vision, and Objectives. Commitment builds confidence and drives excitement about the future. Accountability – Commitment creates an environment where employees will hold each other accountable to deliver on their personal responsibilities. By embracing strategy management, you can become part of the 20% of companies to achieve the full value of your strategic plan.  Do you have an explicit strategy that you can clearly communicate to all your employees?  Does everyone understand their role in making strategy happen?  Are you holding everyone responsible and accountable to achieving the full value of your strategic plan?  Let us know what you are doing to make strategy happen. Please share this newsletter with your friends and associates as you see fit. Quote: “Without strategy, execution is aimless. Without execution, strategy is useless.” — Morris Chang, CEO of TSMC

Do you provide an employee orientation? That is great news, now what about onboarding?  If you are leaving this one out you are missing part of a winning team performance structure.  What is the difference and why utilize both?  One is informative and one is integrative, both are intended to get your new employees off to a great start.  What you really want is a simple way to engage and retain your employees so you can continue to grow without performance set-backs, so here is what you need to know. Let’s get a few current catch phrases out of the way.  Quiet Quitting is a symptom of the Great Resignation.  It simply means that employees are doing their expected work but they are not investing time in achieving broader company goals.  There are many reasons for this sentiment and it is not a new condition of the American workforce, except that post Covid, the personal need to engage in something more than a set of responsibilities has become top of the mind and it is driving employment decisions.  If your employees feel they are doing a job, they are functioning as a job holder, this weakens your business model.  A transition to business contributor roles across your company will strengthen your biggest asset and your best competitive advantage in meeting and surpassing growth goals.  No more quiet quitting. People are a moving target and talent must be nurtured in order to avoid performance set-backs.  Getting the right people in the right position and keeping them, requires a simple and effective process for retaining the interest of new members beyond an offer letter or employment agreement.  If you want them to stay, you need to bond new hires to your company starting day one.  Building long-term associations begins with orientation and onboarding. One of these is about the company and one is about the person and the role.  Employers often use orientation and onboarding interchangeably, and that is risky business.  The processes are related, but different.  Understanding the elements of a structured onboarding process vs orientation can help you to prepare new employees for success and encourage them to stay with you long term.  The onboarding process will enable new employees to achieve success in their new role and boost bonding as they accomplish each new level outlined in their personalized plan. Making your best day-one impression and turning that impression into a true and lasting bond with your organization, requires visualization of the new role, an agenda for learning, knowing with whom you will collaborate, and time required for each learning and doing segment over a 90-Day period. Employee orientation provides new hires with company information.  There might be some interactive elements, such as tours and question-and-answer sessions, but it’s primarily designed to give employees the information they need to get started quickly. Onboarding engages new hires in their role, including what is learned, how work is executed, and what they will lead, all of which are planned with written and verbal learning, and hands-on experience. The onboarding process will include one-on-one training, meetings with supervisors, group training and other customized processes based on what each employee needs. Benefits of employee orientation Aimed at introducing new employees to the company policies such as breaks and lunch times, required meetings and general code of conduct, usually found within an employee handbook. Your new hires will set up benefits, systems log-ins, and payroll. All new hires typically go through the same orientation. Benefits of employee onboarding Onboarding engages talent as soon as a new employee starts working at your company. It helps a team member learn the role in an organized fashion and increases productivity. Boosts new hire confidence in their role with regular feedback and ongoing support. Encourages early relationships between new hires and current employees. Reduces the chances of miscommunication and confusion about individual and collaborative work. Onboarding is personalized for each new member and the plan is edited, based on their progress over the first 90 days of employment. The process can be extended to six months or a year based on an employee’s progression. Observing less than desirable performance, such as misaligned efforts, from a new employee? It may be due to the lack of a structured onboarding process.  Skipping the onboarding process will have costly consequences.  Leaders experience lack of productivity, increased inefficiencies, higher rates of employee turnover, reduced employee morale and engagement, and difficulty meeting strategic goals. Remember, the employee experience on day-one either seals the deal or erodes a new employee’s confidence in their decision to join your company.  Orientation and onboarding are complementary processes to help your new employees succeed.

Every CEO strives to be a strong leader and push their company forward, but when it comes to determining what the mindsets and characteristics of a successful CEO are, opinions vary. It’s hard to be all things all the time and many CEOs struggle to know where to spend their time, how to allocate resources, and what’s really going to drive shareholder value. They’re left feeling frustrated, worried, and fearful that they might make a wrong decision. Every CEO deserves to have a business with a strong financial future. To be a successful CEO, it appears that’s no roadmap, no playbook, no Wizard of OZ pulling levers behind a green curtain. It takes an exceptional set of mindsets that precede any skill set a CEO may possess. A CEO doesn’t need to excel in all the mindsets; they can excel in a few. But, they do need to have some level of proficiency in all of them according to Dewar, Keller, and Malhotra in their book, “CEO Excellence”. The first mindset is around setting company direction and being bold. Continue reading:

How to shift from doom to possibility so you can serve your clients well during this uncertain time.  I say it all the time, but I want to gently remind you.  Your mind’s activity works in a way that sometimes is NOT helpful.  Especially in these days, living in the catastrophe’s and pandemic life right now, our minds are on overdrive protecting us.  How in the world do we stop worrying and fretting right now? Remember that Circumstances trigger not only thoughts but stories.  I.e. the stock market dips and our mind says we are going to lose everything.  Our mind is a frickin’ drama king/queen. And it steals our joy and our ability to be focused on the people and the activities we love.  It robs us of our flow/productivity at work. What’s a person to do? Interrupt the story, get curious about the story, give yourself some grace while you peek in and look at what your mind is doing there.   The action of interruption is powerful. What does interrupting, getting curious look like? 🗣In conversation: “Wow, with all that is going on today, I am making some really crappy conclusions.” SPEAKING THE THOUGHTS OUT LOUD helps you to look at them instead of think them, believe them. ✍🏽In journaling:  Listing everything that you’re thinking and reading it over, can create a powerful awareness instead of BEING IN those thoughts. WE DO NOT HAVE TO THINK DIFFERENTLY. Just watching and observing our thoughts creates a powerful agency over ugly thoughts. 🧠In your mind:  Ask better questions.  Ask open ended questions and keep them coming until you feel a shift to a less dire state.   OPEN ENDED QUESTIONS disrupt powerfully, pointing the brain in another direction.  What is possible here? What shift could I make? What’s another way to think about it? Could I give myself some grace here? Lean into 🧠✍🏽🗣 and see what works for you here. Diana Mindset/Life Coach for Expert Advisors and Owners in Exit ps I discuss all of these issues on my podcast.  Here is one of my favorite recent episodes on building momentum. pss my website is full of resources:  dianamurphycoaching.com

One of today’s biggest business challenges is based around talent. Leaders are attempting to overcome employee turnover and a finicky talent pool. The hiring process can be tedious and owners have a tendency to short-cut the effort by talking with colleagues and networking to get a great referral. This is not a good option for achieving long term success. Recruitment and selection are commonly used terms.  These distinct efforts can be viewed as the same thing, although they are quite different in meaning and function. The process of searching, screening, and then hiring for a role is recruitment. The more specific your methods for recruitment, the more value it will lend to ongoing company growth. Recruitment creates appeal about your company and the position.  Effective recruiting requires the right information about your company and a role in order to attract the right applicants. Spend time on this, use the right tools, and gather input from those who evaluate the role for which you want to fill. Please avoid the laundry list of tasks or duties as a job description. This does not express the requirements for success in a role and it does not help the recruitment process. After screening applicants some may graduate to the candidate status. This is your short list of finalists to consider before hiring. In this stage, final candidates should begin to learn more about the role, your business culture, and their career potential. The selection process is where serious vetting takes place, to ensure a candidate should be considered for a role in your company. Every role in a small business is a key role to sustaining company growth. The decision to work together, or not, should be a mutual process whereby you and the final candidate are confident about the opportunity for a long-term association.  Selection is the choosing of suitable candidates and vetting a shortlist of finalists. Selection actually happens in advance of, and in between recruitment stages. Before you can search for candidates you must have a well-defined role description. The better your role description the more accurately your recruiter can find appropriate candidates. Use selection tools to target personal attributes that will increase the likelihood that a candidate will succeed in the role. Both Recruiting and Selection processes are critical to establishing top performing teams. By recognizing the distinction between Recruitment and Selection and defining your processes for both, you can establish a strong and successful attraction and retention framework. The strength of the recruiting and selection processes can overcome and/or avoid high turnover, control costs and enable high performance, necessary business values. If you like this post click 

Popular

What's Trending

As an advisor, your role is to help clients prepare to exit their business, yet many people resist thinking about the future because it involves so many unknowns, decisions, and choices.  And emotions typically complicate matters further, sometimes derailing the process altogether.  Here are some questions that can help you establish rapport with your clients, learn more about their concerns, and move the conversation forward. How are you feeling about your work/profession/business these days? Which aspects of work are you still enjoying, and which are you ready to leave behind? Do you envision retiring from work at some point, or are you contemplating an encore career? What part of planning for your future feels most challenging? How do you imagine your life in retirement will be different from how it is now? What process are you using to figure out what you’ll do next after you retire? What would you like to see happen with your business long term? What options have you considered for the transfer of your business? What steps have you taken to make your business more attractive to a potential buyer? What are your concerns about transitioning your firm to new ownership? What would be your ideal scenario for transitioning out of your company? What topic(s) have we touched on today that we should put on our agenda to revisit? So, what happens after you pose a few of these questions and your clients open up about emotional matters?  Remember, the most helpful thing you can do is to listen attentively.  You’ve created a valuable opportunity for them to talk about things they may not share with other advisors.   Here are some tips for managing the conversation when clients raise emotionally loaded topics: Don’t try to “fix things” by immediately offering suggestions. Doing so sends the message that you’re uncomfortable hearing their concern.  You can offer suggestions but do so later. Don’t say anything that conveys the message that their feeling or concern is unwarranted. “There’s really no need to feel that way” or “I’m sure it will be just fine” may sound reassuring to you but could be experienced as dismissive by your client. Don’t immediately offer a logical counterpoint to your client’s emotion. Remember, feelings don’t have to make sense; they’re “as is”.  Put another way, if feelings made sense, they would be thoughts. People report concerns and characterize their feelings differently from one another, so it’s in your best interest to seek amplification and clarification by inquiring as follows . . . “I want to make sure that I understand exactly what you mean by ___.  Can you tell me more?” “People sometimes mean slightly different things when they talk about ___.  What does ___ mean for you?” “Before I suggest anything, I’d like to learn more about it from your perspective.” It’s possible that during early conversations your client may hint at mixed feelings about exiting their business.  That’s perfectly normal, but you need to bring it out into the open.  You want to foster an atmosphere such that your client keeps you apprised about where they’re at.  If they keep their ambivalence to themselves, it has greater potential to blindside you and complicate the sale.  You can say: “In my experience, it’s normal to have some mixed emotions about selling.  Those thoughts may not always be top of mind, but when they do pop up let’s be sure to talk about them.  Believe it or not, they can help inform our process and alert us to aspects of the sale that are important to you.” You may also find that your client is overly risk averse.  If so, consider saying the following: “Our work together won’t be comprehensive if we only plan for what could go wrong.  That’s just half the equation.  It’s fine to be conservative and err on the side of caution, but to be truly realistic we should also consider a range of possibilities both good and bad.”   Author’s Note:  The concepts in this article are derived from Robert Leahy’s book, Overcoming Resistance in Cognitive Therapy.  New York:  Guilford

For five decades, the southern United States has been an attractive location for automakers to open plants thanks to generous tax breaks and cheaper, non-union labor. However, after decades of failing to unionize automakers in the South, the United Auto Workers dealt a serious blow to that model by winning a landslide union victory at Volkswagen. In an effort to fight back, three southern states have gotten creative: they passed laws barring companies from receiving state grants, loans and tax incentives if the company voluntarily recognizes a union or voluntarily provides unions with employee information. The laws also allow the government to claw back incentive payments after they were made. While these laws are very similar, each law has unique nuances. If you are in an impacted state, you should seek local counsel. In 2023, Tennessee was the first state to pass such a law. This year, Georgia and Alabama followed suit. So why this push? In 2023, the American Legislative Exchange Council (“ALEC”), a nonprofit organization of conservative state legislators and private sector representatives who draft and share model legislation for distribution among state governments, adopted Tennessee’s law as model legislation. In fact, the primary sponsor of Tennessee’s bill was recognized as an ALEC Policy Champion in March 2023. ALEC’s push comes as voluntary recognition of unions gains popularity as an alternative to fighting unions. We recently saw this with the high-profile Ben & Jerry’s voluntary recognition. Will this Southern strategy work to push back against growing union successes? Time will tell. Brody and Associates regularly advises its clients on all labor management issues, including union-related matters, and provides union-free training.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.  

I once had the thrill of interviewing Jerry West on management. He was “The Logo” for the NBA, although back then they didn’t advertise him as such. Only the Laker followers knew for sure. In 1989 the “Showtime” Lakers were coming off back-to-back championships.  Pat Riley was a year away from his first of three Coach of the Year awards. 

Can you Offer Too Many SKUs to Your Customers? The short answer is YES! A SKU, or Stock Keeping Unit, defines each different product version that you sell and keep inventory of.  There may be different SKUs of the same overall item based on size, color, capacity (think computer or cellphone memory), features, and many other parameters.  For build to forecast businesses, that number of variations can quickly explode and become difficult to manage. Your customers are busy and want ordering simplified. Of course, they may need (or want) more than one variation of a product. That is reasonable and a common aspect of business – one size does not fit all! But there is a point where too offering too many SKUs is not value added either for your customer or your business.  In his April 30, 2013 article “Successful Retailers Learn That Fewer Choices Trigger More Sales” in Forbes, Carmine Gallo discusses his experience and a study about “choice overload” by other authors. He writes about a retailer that “has discovered that giving a customer more than three choices at one time actually overwhelms customers and makes them frustrated…when the customer is faced with too many choices at once, it leaves the customer confused and less likely to buy from any of the choices!” Choice overload is well-documented in consumer studies but can apply in B2B as well. While customer satisfaction is important, another key concern is the often-hidden costs associated with a business offering and managing a large number of SKUs for a given product type. These costs include holding inventory, S&OP (Sales and Operations Planning) team time, small production runs, and scrapping inventory. Holding inventory takes up space, which may come with a cost or utilize racks that could be used for other products. Scheduled inventory counts take up employee time and may result in blackout periods when the warehouse is not shipping product.  The more SKUs there are, including extra SKUS, the greater the potential impact. The Sales team’s forecasting and the Operations team’s purchasing reviews that are part of the S&OP process can occupy more of their valuable time if they need to consider these times. If small orders or forecasts require a new production run, this could be costly and create excess inventory. Whether from this new production or past builds, eventually it will make sense to write off and scrap old inventory, another cost impact to the company. How do you know which SKUs to focus on if you wish to look at reducing your total number of SKUs? Start by examining SKUs that have: Low historic sales over a period of time Small variations between SKUs that customers do not value Older technology or model when newer option SKUs are available This requires a true partnership between Sales and Operations. It starts with educating both teams on the costs involved – neither group may be aware of the money and time impact to the company. Periodic (such as quarterly) reviews of SKUs that meet the above descriptions should become a fixed part of the calendar. A review of the data and other available for sale options should result in the identification of SKUs which may not be needed. At that point, it is helpful to have a customer friendly EOL (End of Life) Notice process by which you inform customers of last time buy requirements for this SKU and alternates available. It is usually best to provide some time for the last time buy in the interest of customer satisfaction, although that may not always be necessary. At a company that designed and sold electronics, a robust SKU rationalization process was implemented to help address these issues. A representative from the Operations team analyzed SKUs that met a version of the above criteria and suggested candidates for the EOL process. Next, a member of the Sales team reviewed them and, where appropriate, issued product change or EOL notices to customers, providing them time for last time buy orders when needed. These steps helped reduce the work involved in maintaining these SKUs while not leading to any customer complaints. A final note – sometimes it makes sense to continue offering low selling SKUs – to support customers buying other items (hopefully in larger quantities). It may be worthwhile to encourage them to keep coming back to you for all of their product needs and this may be a way to accomplish that. But it helps to understand that this is truly the case and not assume that this customer would not be equally happy with another, more popular, SKU.   Steven Lustig is founder and CEO of Lustig Global Consulting and an experienced Supply Chain Executive.  He is a recognized thought leader in supply chain and risk mitigation, and serves on the Boards of Directors for Loh Medical and Atlanta Technology Angels.

When it comes to careers, business owners are a minority of the population. In conversations this week, I mentioned the statistics several times, and each owner I was discussing it with was surprised that they had so few peers. According to the Small Business Administration (SBA), there are over 33,000,000 businesses in the US. Let’s discount those with zero employees. Many are shell companies or real estate holding entities. Also, those with fewer than 5 employees, true “Mom and Pop” businesses, are hard to distinguish from a job. The North American Industry Classification System (NAICS) Association, lists businesses with 5 to 99 employees at about 3,300,000, and 123,000 have 100 to 500 employees (the SBA’s largest “small business” classification.) Overall, that means about 1% of the country are private employers. Owners are a small minority, a very small minority, of the population. Even if we only count working adults (161,000,000) business owners represent only a little more than 2% of that population. So What? Where am I going with this, and how does it relate to our recent discussions of purpose in business exit planning? It’s an important issue to consider when discussing an owner’s identity after transition. Whether or not individual owners know the statistics of their “rare species” status in society, they instinctively understand that they are different. They are identified with their owner status in every aspect of their business and personal life. At a social event, when asked “What do you do?” they will often respond “I own a business.” It’s an immediate differentiator from describing a job. “I am a carpenter.” or “I work in systems engineering,” describes a function. “I am a business owner” describes a life role. When asked for further information, the owner frequently replies in the Imperial first person plural. “We build multi-family housing,” is never mistaken for a personal role in the company. No one takes that answer to mean that the speaker swings a hammer all day. Owners are a Minority We process much of our information subconsciously. If a man enters a business gathering, for example, and the others in the room are 75% female, he will know instinctively, without consciously counting, that this business meeting or organization is different from others he attends. Similarly, business owners accept their minority status without thinking about it. They expect that the vast majority of the people they meet socially, who attend their church, or who have kids that play sports with theirs, work for someone else. There are places where owners congregate, but otherwise, they don’t expect to meet many other owners in the normal course of daily activity. This can be an issue after they exit the business. You see, telling people “I’m retired” has no distinction. Roughly 98% of the other people who say that never built an organization. They didn’t take the same risks. Others didn’t deal with the same broad variety of issues and challenges. Most didn’t have to personally live with the impact of every daily decision they made, or watch others suffer the consequences of their bad calls. That is why so many former owners suffer from a lack of identity after they leave. Subconsciously, they expect to stand out from the other 98%. “I’m retired” carries no such distinction.       This article was originally published by John F. Dini, CBEC, CExP, CEPA on

Previous
Next

Explore the Knowledge Exchange

Search