Starting December 1, 2016, our industry faces potential impacts from new labor laws, one of which includes creating additional retention challenges to our already stressed talent pool in the franchise industry. The Fair Labor Standards Act (FLSA) of the U.S. Department of Labor (DOL) is making significant changes to overtime pay for employees. As outlined in the article, “New Overtime Rule Compels Problems for Franchisees,” the change means that it is going to force employers to shift the pay status of their employees from salaried to hourly.
Competition in business is what helps to keep us focused on strategic growth. However, in today's landscape, competition is bigger, stronger, wider, and more present than ever. Innovations in technology give your customers access to similar products and services from companies that are not located in their geographic footprint. With a click of a button, an order can be placed, shipped, and received to a buyer that should have been yours.
Multi-unit franchisee businesses, regardless of the concept, location, or size, all strive to build value, create longevity, and generate success. Ultimately, with value, longevity and success, the world is your oyster. No matter your short or long term vision, whether it be a high value sale or transfer to a key manager(s) or family.
Some things in life are actually fun to plan - weddings, vacations, and special celebratory events. The planning that goes into the event usually leads to a happy outcome, even when there are bumps along the way.
Business Planning, however, usually gets a bad rap. Mention business planning to a multi-unit franchisee entrepreneur or a fast moving, high-energy executive and watch their eyes begin to gloss over. So how do we make business planning fun, exciting, and worthwhile for those involved?
On a limited basis, The Rawls Group provides Successor Development Forums (SDF) for prospective leaders who feel they need coaching and education on the unique challenges of successor development. An SDF is not intended to be a "lucky sperm club;” it is intended to be a “work group" for successor candidates who are seeking coaching that they cannot get at home.
Succession is dependent upon success. Therefore, mediocrity is not a succession option. In order for you to have confidence your successors can survive the predictable distractions, issues and problems associated with the transfer of ownership and management control your business must perform above benchmark to assure that there is adequate margin for a dip in productivity.
Take stock of the employees in your company; most likely you have already mentally classified them into categories of nonperformers, underperformers, average performers, or super performers. Hopefully, you have the majority of your people in the super performer bucket, but in all likelihood, you have a mix of all four types.
As the business environment becomes more complex and even more litigious, it's important to know how to deal with each of the 4 groups for two very different and yet related reasons: Risk Management and Productivity Management. With the concept in mind that you are only as strong as your weakest member the following will provide insight into how to address those in the non performer and under performer buckets.
When working with a team of business leaders, one of my first questions is "How many of you are ready to go to the next level?” Either a lot of hands go up or there is a chorus of "Absolutely." And then I ask them "How many of you know what the next level looks like?" The near to total silence is deafening. They don't know what the next level looks like; and there is some concern that somehow, it might require more work and effort.
A client and I were walking back to my car when she asked, “When should we start to get concerned about our business reputation?” After a few seconds of thought, I answered “Well, if you wait until you have one, it could be too late. So I suppose the best time to be concerned about your reputation is before you actually have one. Then you still have time to help shape it rather than recover from it.”
To make sure your business processes positively impact your reputation, you need to choose what you want to be best known for in the marketplace: operations (cost and speed); innovation (cutting edge of the industry); or customer relationships (ease of doing business). Your business processes reflect favorably or unfavorably on which brand designation you choose.
The third step to navigating in-law in the family business is to avoid giving off the appearance that you are motivated by the opportunity to live on “easy street.” If you see an opportunity to work in your spouse’s family business as just one of many options, and that the job in the family’s business is the best opportunity to fulfill the expression of your talents, strengths, capabilities, and training, then you may achieve success. If it doesn’t work out, that’s okay with you, as you will just move on to the next best option. This will position you to make an unreserved commitment to the mission of the business and the existing leadership, which will provide for you the highest probability of success.
I was interviewing the 4th generation son of a business owner recently and asked about his vision for the company. He described a very aggressive vision for growth through acquisitions and diversification into other locations and channels. This kid has been in the family business all of two years! The business has afforded him a very lucrative and flexible job during difficult economic conditions. Having never even been responsible for running a department within the business, I found this vision astounding.
Business success and succession are dependent upon financial success. Therefore, before succession can occur, your business must first achieve and maintain a high level of performance.
As a sports enthusiast, when I hear the term "360 slam dunk," images of Michael Jordan soaring through the air high above the rim in a Chicago Bulls jersey flash through my mind, which I assume is the case for some of you as well. Unfortunately, this article is not about how to do a 360 dunk a la Michael Jordan but rather the benefit of utilizing a 360 Assessment as a successor preparation tool. The utilization of a 360 Assessment to help identify leadership gaps and coaching opportunities for prospective successors can be an invaluable tool.
Recently a client – Steve – expressed great concern about complacency. “I think it’s creeping into the organization and the family; and I’m not sure I know what to do about it. Our numbers still look good, but we seem to have lost the ‘fire in the belly’ that drove us for so many years.” When I asked him to be more specific, he talked about “cruise control” management; “no one is as good as we are and we’ve paid our dues attitudes”; and entitlement episodes among immediate family members.
There is another Dan Schneider walking around somewhere is the U.S.A. I don't know where he lives, but I know a little bit about what he does. Apparently his skill sets include acting, television productions, and related work that particularly attract the attention of early teens.
I know this because someone who publishes celebrity phone numbers on the web has posted my office and cell phone numbers on that site. So, when I get calls now asking if I am the "famous Dan Schneider", I simply say "Yes, I am the famous succession planner; the other guy is the movie star/television producer."
Now most of these callers have no idea what succession planning is all about, so the calls do not usually last very long; and the caller is almost always disappointed that I cannot make them a screen star.
Sometimes a telephone ring sounds ominous. When I answered a call from Cliff last Wednesday, that proved to be the case. "You're not going to believe what just happened. Jack came into my office and told me he is leaving in two weeks! I can't believe it - he's the person I've been counting on to be my successor! Now what do I do?"
"You start looking for another one," I replied. "And this time, let us help you find someone who really wants to be number one of your organization and fits your culture. Ambition may open the door. It's commitment that keeps what's inside appealing."
I am often asked what the difference is between strategic planning and succession planning. Strategic planning and succession planning have significant similarity, both being long term endeavors with significant overlap. The stakes are high in each endeavor. The success or failure of either will have a long-term, lasting impact upon the business. Likewise, unawareness of the importance of the initiatives or an unwillingness to address either initiative will also have an undesired, lasting impact. Therefore, this is a legitimate question meriting an extended answer to avoid confusion.
Strategic planning is an important component of succession planning and is one of the ten interdependent factors of the Succession Matrix® that also includes: Owner Motivation and Perspective; Successor Identification and Preparation; Key Manager Motivation and Retention; Teamwork and Synergy; Business Structuring; Personal Financial Planning; Family Governance; Leadership and Management Continuity and Family Communication and Harmony. Each of these factors and their interdependence are explained in more detail on our website.
As I discussed in my last post, strategic planning and succession planning both are long term endeavors with significant overlap and many similarities. However, the defining and distinguishing characteristics of succession planning are reflected in the differences in these two very important leadership and management initiatives.
The differences are reflected in the goals, scope, focus and the term of these two endeavors. The purpose of strategic planning is the confirmation of goals and priorities and the optimization of business performance through the effective alignment of business resources with performance objectives. Business resources can be broken down into three general categories: time, people and money. Strategic planning endeavors to optimize synergy, productivity and efficiency by confirming priorities and establishing compatible plans for the achievement of realistic performance benchmarks.
Sign up for our E-newsletter to recieve resources on a monthly basis
© The Rawls Group. All Rights Reserved