You must plan your business to grow!   I've known many small businesses who didn't really want to grow, they just wanted to get back to where they were before the hard times came.  That kind of planning seldom works.  For one thing, even "getting back" is hard to do.  During hard times, conditions change.  Customers and competitors get smarter.  Big companies absorb little companies.  Many customers and competitors go away, and usually it's the better businesses that survive.  Your markets and your adversaries will never be the same again.  So, if you don't get better at what you do - which means doing things differently - your chances of just "getting back' are very slim.  You'll have to improve how you work, and that means you'll have to be able to grow.
            To plan for growth, you have to think ahead, not back.  You have to question all of your processes, your people, your products - all of your resources.  And you must have a vision of what your business will be like in the future in order to figure out how you must change.
            Surely, you can build on your strengths.  But in a new economy, a strength is something that will help you grow.  It may not be something that worked in the past.  For example, many companies extend their borrowing when times get tough.  They borrow more money or forego their payments on loans, just trying to stay alive.  Even if your lenders let you get behind or "refinance" your loans, they'll expect you to pay them as soon as you can.    But now, when times get better, you have a bigger and longer debt to satisfy.  You have to make more money than you did before.  You have to work harder and better.  You have to be able to grow.
    
            For many businesses, expecially those with a long history, this is one of the hardest ideas to get across.  We'll keep talking about it.
                    Email me if you want help, at: rmp@parkersolutions.com.

            

    Welcome to my blog if you want a better business .    This blog is written for small and medium-sized business owners and managers, whether for-profit or non-profit, who want to come back stronger than ever from the current bad times.  In  more than 50 years of business practice, observation and teaching I've seen many organizations emerge from recession better, stronger, sharper and smarter.  They learned lessons that made them winners in the better times that come.  

    I have two goals with this blog: 1) to pass on some of the lessons I've seen good leaders learn, and 2) to show how you can use them to get better coming back.  The blog format seems ideal for this, because you and I and others with interest can talk with each other.  If you have a question or an observation on something you see, just post a comment on my blog.

    This recession won't last forever.  None have lasted forever.  This blog is about making your business better when times get better.  If your market is slow these days, use this time to think about and plan how you will improve your organization and how it works.  When the turnaround happens you must be stronger than ever.  A recession teaches lessons to smart people; competition will be tougher - many of the weak will be gone - and customers will be smarter (buyers learn lessons, too!)   

    Coming back better depends on you!  If you are a strong leader - or if you want to become a strong leader - you can make your business better.  Living through tough times can make your organization stronger, but only if you learn the lessons of leadership that tough times can teach.  I hope to show some of those lessons, and to help you become a better leader of a better business.

    So, what do good leaders do in tough times?  James Kouses and Barry Posner, in their great book and workshop series called "Leadership Challenge,* say that exemplary leaders, when working at their best, demonstrate these five practices:
    1) They Model the Way,
    2) They Inspire a Shared Vision,
    3) They Challenge the Process,
    4) They Enable Others to Act, and 
    5) They Encourage the Heart.
    Other authors and teachers have use different words to describe the practices of great leaders, but this is as good as I've seen.  In fact, it's interesting that writers on leadership have said essentially the same things for at least 50 years.  These practices, stated in several ways, will be the basis of this blog.  I can only hope to help you understand how you can become a great leader through tough times, and Come Back Better.

*Kouser and Posner, The Leadership Challenge, Jossey-Bass, San Francisco, 2007.

     Our next post - Establish Your Leadership Image - will explore how to demonstrate (model) in your own organization, the attitudes necessary to be better.

Bob
    

    

Coming Back Better requires that leaders show the way.  I believe that the image projected by its leaders makes improvement possible or impossible.  That's why we're talking about your leadership image before any of the other "how to's."  Here's my logic:  You won't change your business for the better unless your people believe in the process.  They won't believe that change is for their advantage unless you show them how.  You can't show them how to work the process unless you believe in it, and can articulate it, and are being honest with them.  So you have to believe that your business can change, and that it will be better when good times come back.  For many small business managers, believing in it is the tough part.  But doing so is what changes your image, and that's essential to make the process work.    
    I admire and respect small business owners and managers.  I think that people who start and manage and protect and promote and improve small businesses (just arbitrarily, I'll make that less than 200 employees) are today's American heroes.   People who lead family-owned and managed companies, and people who run small agencies that help needy people, are the heroes of today.  People who fore-go the salaries and benefits and security and safety of either big business or government employment, hoping to support themselves and provide employment to others; those are my heroes.  Those are today's pioneers.  They are the people for whom I'm writing this blog.
    I also know that small business owners and managers, and executives of nonprofit enterprises, are not likely to have had much formal or sponsored training in management.  Many of the just fell into, or were born into, the organization they now must run.  They may not have had much choice about taking the job.  But they are determined not to fall down and let it fail.  Where to turn?
    Or, they may have been the head of some technical specialty of a social service agency, and, through no fault (or initiative) of their own, now find themselves in charge of the whole or some part of the operation.   Their business (for it surely is a business) may be short of funding.  Tax revenues may be down, and their competitors may be going ravenously after the few traditional donors in their field.  Where to turn?
    Or, they might have succumbed to the promise of ownership after sad and disappointing experience in a big enterprise and have bought or started a small business at what seemed a bargain price.  But then came hard times!  I've been there, more than once!  So now what to do?
    You have to believe that you and your organization can be winners!    And one of the tests of winners is that they know the things they are good at and the things they don't do well.  Winners know what might be their chances for success, and the hazards - competition, costs, lack of skills, decrepit facilities, poor location - that the business must somehow overcome.  When your people think you know these things you are on your way to success and you have the image you need. 
     How to know if you're projecting the right image (Modeling the Way) for comeback success? For one thing, you will be convinced that your team buys into the process.  They will be enthusiastic about working for a vision of the future that will move them toward success.  They will participate, as their position suggests, in analyzing your SWOTs. At this point you won't have a shared vision, but you will have convinced them that you all need one. They will understand that you can and will lead them to that vision.  If you're going to use outside help, such as a consultant or some respected advisors who understand visioning, you should have shown them how you expect your team to benefit from the knowledge you'll gain.  When you sense that your team is with you, you have the right leadership image.

  What do you need to know to start the Vision process?   That's what my next post is all about.

Bob

    You have to look out, but first you must look in the mirror!  If you're the leader of your organization, it is absolutely essential that you know the strengths and weaknesses of your organization.  
    The first management book I read after college, way back in the early 60's, was Tough Minded Management, by Joe D. Batten.  It is still one of the most popular management books.  Joe said: "Build on every employees' strengths and possibilities, instead of weaknesses." You may have heard the phrase  "Tough Minded Management."  Today, after almost 50 years, most of us don't know exactly what it means but we know what we think it means.  It's a very common phrase in management literature.  Google it, and see how many results you get.  I just got 159,000! 

"Build on every employee's strengths and possibilities, instead of weaknesses," Joe said. In the '60's, that was news in the management business.  It was what we called a "pregnant statement," meaning that it said more than was obvious.  One of the things Joe meant, but that you wouldn't know unless you read his book, was that you had to know the what were strengths and what were weaknesses.  Joe Batten was one of the first management gurus who pointed us to that distinction.  Joe's statement is good on its surface, but the best effect has been to focus us on knowing which is which.

Know Thyself!  Before you can analyze your organization, you must analyze your own strengths and weaknesses.  All of us have strengths and weaknesses.  Every strength is a resource and every weakness is a challenge.  The strongest leaders, and the strongest businesses, take advantage of their resources and meet the challenges of their weaknesses. Most small business and service agency leaders have face serious challenges.

 A very common challenge is the lack of financial wisdom.  Many small business leaders are “techies,” very good at some technology or talent, but with little knowledge of financial realities.  Accounting is the language of business.  Sure, accountants and controllers can be hired, but if the leader doesn’t understand the workings – Income Statement, Balance Sheets, and Cash Flow Statements, etc., he or she will always be at the mercy of the accounting “techies.”  That can be very, very dangerous.  Should you ever need to go into the market for money – funding – you’d better understand the language spoken by the money people; bankers, lenders, and investors.  For another thing, being “techies” of a sort, most accountants have a hard time recognizing operational opportunities.  To Come Back Better, you’ll need that skill and you’ll need to be able to translate opportunities into the language of business.  Here are some other small business leadership challenges.  If you share any of them, you should do something about that, now.
    

    I have another blog, http://blog.parkersolutions.com, that is all about business Vision and SWOT analysis is a big part of it.  So I won't get deep into it here.  Having an "attractive, worthwhile and achievable vision of the future, widely shared," is probably the most important part of Coming Back Better Now.  It makes everything possible.  Go read and think about it, and let me know what you think.

    Next, we'll think about People Problems.
Bob



    

    A Very Sensitive Issue;  Will your people get you to your Vision?  This is an important issue in every organization, regardless of size.  But it is a matter of life and death for the competitive small business.  Especially and crucially in hard times.  
     By definition, small businesses don't have many people.  Still, they must perform almost every function that's performed by a big organization.  Some small companies or agencies have a few very competent people - maybe even some outstanding experts - in some fields.   But most have some functionaries that are only average, or worse, in performance.  I've seen this often in family-owned and operated small business, and in non-profit agencies in small communities.  I don't need to talk about why that's true, if you are one, you know it.  
    But when tough times have taken out weak competitors and left you with nothing but tough challenges, can your organization thrive with some "weak sisters?"  Is it fair to keep paying them when others must extend themselves to the limit?  Can you Come Back Better if you don't improve those weaknesses?  Can you better use those resources in a more advantageous area?    
    Sometimes that last question is the most demanding.  I suspect that tough times have caused you to cut back in some expenses.  We often protect our people until we just can't avoid letting some go.  Do we let the good ones go and keep some who are not great contributors?  The very best organizations, those who Come Back Best, look to the future and don't protect their weaknesses. In the long run, they provide more employment and more job satisfaction than the protectors. 
    This judgment is one of the most important tasks for a leader. Your criterion should be:  Who will contribute to your prosperity - your ability to get good customers and make good decisions and excel in the new markets? 
     Sure, there are ways to "cushion the blow."  Their effect may depend on your personal relationships, or on the situation in their lives.  But your responsibility is to make your organization strong, to make it Come Back Better!  That's what counts!  If you have trouble with this issue, bring in an outside coach to help with it.

I wrote this section because in 50 years this has been one of the most common reasons for small business leaders to talk to me.  I now it's one of the toughest problems they face.  It's one of the toughest I've had to face, too.  It's really tough when I'm coaching clients that are my friends.  It's a problem that is.

    In a time of low demand, Question Your Process.  There are really only two business cycles; the Up Cycle, when you can't seem to keep up with the demands of customers, and the Down Cycle, when there is just not enough demand to keep your organization busy.  The Down Cycle is where most of us are now.   Because by definition we are "not busy," now is the time for us to question the way we do business if we want to Come Back Better.  There will never be a better time.
       Any business enterprise, whether a social service agency, a supplier of goods and services for profit, or a professional service, has a business process.  It may be a combination of many processes - finance, sales, marketing, production, delivery or research.  An enterprise that has a history will use some processes that are purposely designed and some that "just happened."  Some were very effective when first used and some happened because of an inspiration or a particular stress that indicated the need for a change in our original process.  Some have stood the test of time and some may not serve our purposes today.  We need to question all of them.  Our criterion for evaluation should be "Can this process be done better?"  
    Here's what I mean by the term "process:"  It is the way you do a business function.  It is method, procedure, tactics.

    Rules for Questioning.   The goal in the questioning process is an improved business.  Improving means changing.  Your enterprise will not Come Back Better if it does not change.  It's probably true that every function in your business process can be improved.  Overlook nothing.  Keep these rules in mind:

1. Get a coach.  This is not an easy process, and the older your business the harder it gets.  Bring in an outsider, experienced in business and completely confidential, who will help you see objectively.
2. Record your thoughts.  You can use notes or verbal recordings.  If you do your questioning in meetings, make sure there is someone who will record what's said.  Just make sure that you can go back to question the decisions you make while evaluating your processes.  
3. Question every function before you make priority decisions. 
4. Use the standpoint of the future, not whether that function worked well in the past.
5. Consider your competition.  Are there other organizations in your industry or service area that do some things better than you?
6. Pay special attention to your use of technology.  There is no doubt that the greatest change in business in the last few years is in the use of new technologies - for communication, for analysis, for record-keeping.  Those changes are accelerating, not slowing.  Are you confident that your business functions are using new technologies adequately?  Are you leading or following?  To Come Back Better you must prepare to win using technology, because others will do that.
7. Consider your age.  Not only the age of your processes, but the vitality, in the future, of the people who make them work.  Many small businesses and service agencies are staffed with people who will not be at the top of their games in a few years.  What can be done about that?  This is a much tougher question for small business than for enterprises who can continually sustain an influx of new talent.
8. Schedule change for every function.  If you decide not to make radical change in any business process, decide when that will be necessary. Plan for review of each process before that date.

   Email me if you have questions:  rmp@parkersolutions.com