The Facts of Business Life

by Bill McBean

  Again, these are not all the questions that require answers, but they do provide a framework for your decision making. The bottom line is that if you neglect to ask all of these questions, that is, if you don’t analyze what’s occurred, whether positive or otherwise, you are passing up an opportunity for continued success. At best, you might be dooming your company to an erratic and nerve-jolting ride along the survival–success spectrum. At worst, you could be setting yourself up for failure. However, if you focus your company on goals, objectives, and results management, you are much more likely to reach the success end of the spectrum and to remain there.

  Building and Maintaining a Team at Level 3

  The discipline you develop from leading, and managing results based on goals and objectives, sets the company up for continuous improvement, future success, and greater profits. That is, it will take you and your company to the success end of the survival–success spectrum, which is the goal of Level 3. However, if you want exemplary profits, there is another step you can take, and that’s using the successes and discipline of results management to build a team in your company. Goals, objectives, and management of the results create the kind of solid foundation on which successful teams are built.

  A team is essentially a group of people who know what the company’s goal is and can successfully implement all the various processes designed to achieve that goal. In other words, a team is effective only when the company’s expectations, processes, and performance are in sync with each other. For example, a football team’s goal is to win. It does the team little good if its offense is above average but its defense is the worst in the league. Unless the processes—in this case the offense and the defense—support each other, the team can’t win with any consistency, and neither can a business. Similarly, even if a restaurant offers the market’s best selection at attractive prices, it’s not going to mean anything if the kitchen is painfully slow in getting the food out to its patrons. However, if the kitchen’s cooking processes can keep up with the demand, the restaurant is likely to be an extremely strong business.

  Of course, no matter how strong and supportive the processes are, at some point people have to be involved, and it’s ultimately people who create a team—or not. But having people who are “easy to work with” or can be described as “team players” isn’t necessarily helpful when you’re trying to build a team. You obviously want to work with people who have integrity and character, but teams are ultimately successful because they are made up of individuals who can produce results and in turn help everyone make more money. Think about that football team again. Let’s say you’re a player who has battled throughout the game and given it all you have. There are a few seconds left and you’re down by two points, so a field goal can give you a win. Who do you want to kick the field goal, the team’s most popular player or the one who has a history of making “pressure” kicks to win games?

  If you are interested in building a team, and you should be, the first thing you need to do is create an atmosphere in which a team can thrive. And there are several ways this can be accomplished. For example, successful teams don’t thrive operating in a dump, and while not every business can operate out of a glass tower, every business can be clean and continuously maintained. Every business can also make sure its equipment is in proper working order, both for safety reasons and to ensure employee efficiency. As the owner/leader, you can also foster team building by showing that you care about and respect your employees. One way you can do this is by training your employees, and rewarding good behavior and results—as well as punishing poor behavior and attitudes. Another way is to sponsor your employees’ children in afterschool activities or help employees out when they’re dealing with family emergencies. If the people who work for you know you have their backs, they will in turn have yours, which is a fundamental aspect of any team. Finally, you can encourage teamwork by making sure your managers and supervisors understand that their personal performances take a backseat to the performance of their direct reports. In other words, they will be judged on the “we” rather than the “me.”

  As all of this suggests, creating teams is not as difficult as some believe. And the good news is that if you want to do it, you don’t have to reinvent the wheel. There are plenty of successful businesses you can learn from. The even better news is that if you are willing to make the effort, you will in all likelihood find yourself, and your business, in a position to attain a level of success that only a small percentage of companies ever reach.

  Developing the Individual at Level 3

  As I have said several times, good processes and systems are an integral part of every successful business. However, because neither processes nor systems can smile at customers or form relationships with them, they are of little value without the people who operate them. In fact, one of the main ingredients of any business’s success is the relationship it has with its customers. Customers like businesses that welcome them, show them they are important, do little things like ask if they need assistance, and thank them for their business. But none of this happens by accident. And the only way to make sure that it does happen is for owners to establish standards for employee conduct and find creative ways in which to draw out the talent that lies within most employees.

  One of the things that separates the experienced from the inexperienced owner is that the former knows the one thing you can’t teach is attitude. No matter how talented an employee may be, if he or she has a bad attitude toward coworkers, customers, or life in general, you would be better off letting him or her go work for one of your competitors. Not only are people like that unlikely to change their attitude, but a bad attitude is like the measles, and the last thing you want is for that kind of contagion to spread. Of course, it’s best if you hire people with positive attitudes in the first place, but even that’s no guarantee that they will maintain those attitudes. That is, while some people seem to be positive no matter what’s going on, most people have to have some reason to do so.

  Just as you have to create an atmosphere that’s conducive to building a team, you have to create one that will encourage people to be positive. One way to do that is through increases in pay, bonuses, and other forms of meaningful recognition. To accomplish this, though, you must start by clearly defining each employee’s job and exactly what is expected from that employee. And when they succeed, you must reward them. At the same time, if they don’t succeed, there must be consequences. This is important in employee development, because people have to see the benefits of a job well done, as well as what happens when they don’t do their jobs well. In fact, a little fear of the consequences of poor performance is not a bad thing.

  You can also help develop positive attitudes among your employees by empowering them with greater responsibilities and promoting from within the company. This type of transparency has a positive effect not only on the employees who receive these benefits but on the company as a whole, because other members of the staff see actions like these as additional encouragement to do their jobs well. Finally, and this may surprise you, another way you can develop individuals is by making sure your company is successful and has a good reputation in the marketplace. The fact is that, even in an age when people tend to move frequently from one company to another, many employees want stability and a place where they can build their careers. So in addition to the many other advantages of building a successful business, doing so helps you attract and keep good employees.

  At the end of the day, employees want to have meaningful work, to enjoy and have satisfaction in what they do, to have fun, to respect those they work with and for, to be safe and secure in their jobs, and to be fairly compensated and recognized for the good work they do. Satisfying these basic needs of employees and developing those employees to their full potential is not easy, but it is doable. Just ask the successful owners you know.

  Level 4: Maintaining Success

  A strange thing happens when you realize you have re
ached the success you dreamed about when you first started out—you begin to reflect on where the business started, how far it’s come, and where it is today. This reflection usually leads to the realization that your success is largely due to the leadership skills you developed. In fact, it’s really only at this point that you can begin to fully appreciate the significance of leadership and the role it’s played in your business’s success. If you have brought your company to Level 4, it’s because your leadership abilities have enabled you to achieve three things. First, you have successfully captured—and more than likely expanded on—the opportunity you chose to pursue at Level 1. Second, you have created the business’s DNA, which now drives the company and guides the implementation of the processes you developed. And, third, you have defined the business’s destination, developed goals and objectives to get you there, measured the results, and in the process created a disciplined management system that has produced consistent profits.

  Now, having attained your initial goals, you are likely to feel that the hard work has been done and you can sit back and reap the rewards. And that’s entirely understandable. There is, though, one thing wrong with that idea—it’s not true. The truth is that once your business becomes consistently successful, that success itself creates some particularly cruel traps. And it’s these traps that make Level 4 one of the most challenging levels for owners. Among the various traps lying in wait for successful owners are arrogance and the belief that success will continue no matter what they do, losing discipline and forgetting the importance of managing results, internal apathy, competitors’ reactions to your business’s success, losing the fear of failure and the motivation to be great, and losing enthusiasm for solving nagging problems and searching for opportunities. All of these traps represent serious challenges, and overcoming them requires the kind of leadership only an owner can provide.

  The fact is that your business can’t just stay where it is—neither these traps, not your competitors, will allow that to happen. What this means is from this point on there are only two ways you and your company can go. One, of course, is to go backward. And if these traps aren’t dealt with, or you procrastinate about dealing with them, that’s exactly what will happen—your business will begin to slide back along the same spectrum you worked so hard to move forward. In fact, I’ve even seen companies slide so far back that they end up at the survival end of the spectrum again. The other way you can go is forward. Deciding to do this, though, isn’t easy. Moving ahead means your leadership skills will be tested as never before. You may, for example, find yourself in a position in which your personal loyalty to people in the company will conflict with your responsibilities as a leader. You may also have to risk a significant amount of the profits you have accumulated to enlarge your facilities, add more inventory, or buy some expensive equipment to make your business more efficient. Situations like these can be very difficult to deal with. Even so, unless you want to give up all you’ve fought to achieve, you have little choice other than to move ahead.

  The Benefits of Leadership at Level 4

  Being a leader enables you to give the company focus and renewed purpose even after success has been achieved.

  Being a leader helps you identify the traps awaiting your company at this level.

  Being a leader enables you to drive a sense of urgency in the company.

  Being a leader drives change, and change keeps a business fresh.

  Being a leader enables you to overcome the traps of success.

  Being a leader helps you use the power of teamwork to move the company forward.

  Being a leader helps you develop individual leaders, which in turn strengthens the company and helps move the company ahead in a controlled fashion.

  Being a leader helps you prioritize which of the traps to tackle first.

  Being a leader helps you and your staff continue to focus on goals, objectives, and managing results.

  Achieving the Objective or Goal at Level 4

  The first leadership goal at Level 4 is to keep the company operating successfully and delivering profits as expected. To accomplish this, you must continue to determine the company’s goals, create objectives and steps to meet the goals, record the results, and manage those results. As I mentioned previously, this represents the everyday blocking and tackling of a business, and is something that every business must do if it hopes to maintain its success. However, there is also a new goal at this level that every owner must establish, that is, finding or developing a competitive advantage and exploiting it. Competitive advantages include things like:

  Buying a competitor.

  Starting an entirely new business that has some relationship—and can provide benefits—to the current business.

  Purchasing or leasing new facilities in a better location.

  Buying new and more efficient equipment.

  Upgrading current facilities.

  Creating a complementary or parallel business, or buying your distributor so that you can take control of your supply chain.

  Although it may seem that ideas like these are limitless, in reality they are not. There is only so much excess cash available, only so many opportunities that can provide support to a business, and only a few of these that will create a competitive advantage. But finding or developing a competitive advantage is a “killer” weapon for securing a business and creating additional incremental profits, and if you want to maintain your business, it is imperative that you try to develop this kind of weapon.

  Building and Maintaining a Team at Level 4

  Common sense tells us that a group of individuals working together to achieve a common goal is more efficient than a group of individuals working in their own interests. And it’s this belief that has made the word team so widely accepted and used. But simply saying “We are a team” doesn’t make it true. Creating a business team and maintaining it is actually extremely difficult to accomplish, which is why real business teams are few and far between. And in fact, the only way to build an effective team is through leadership, that is, through an individual who is willing to accept the responsibilities of leadership, who is prepared to make hard decisions for the common good of the business, and who is proactive. As an owner, taking on this role is your responsibility.

  Despite the difficulties, there are several good reasons to develop a team at this level. First, one of the results of doing so is creating a dominant company that generates exceptional profits. Second, since it’s hard to do, your competitors probably won’t do it, which will be to your advantage. Third, having a team will help you overcome the traps of success. And, finally, teams help build individual leaders, and the more leaders you have who are focused on the right things, the more likely you are to succeed.

  There are several things you can do as a leader to help build a team in your company. First, since teams are made up of individuals, the people you choose to work in your business are very important. You should accordingly look for people who have leadership qualities, such as being proactive, being willing to take responsibility for their actions, and having a positive attitude. Second, teams need to have a common, meaningful purpose, and you can provide them with that purpose by making sure they know how you define success and what you expect them to do to help achieve it. Finally, teams need to be coordinated, that is, every department’s objectives have to support and promote the overall company’s goals, and supplying that coordination is one of your responsibilities as a leader.

  In other words, creating a business team isn’t just dependent on one thing, it’s dependent on a number of things. There are two common denominators, though. One is that a team can be built only by a leader, and as the owner you must be that leader. The second is that results must be the focal point; that is, individuals have to know what is expected of them and produce it. If these two things don’t happen, trying to develop a team will be pointless.

  Developing the Individual at Level 4

  As at every level, at L
evel 4 building a team and developing individuals goes hand in hand. But it’s especially true at this point in a company’s life cycle. For example, at Level 4 most owners are getting tired, and a fairly large percentage of them are losing their passion and drive. So the more employees you have who can help with the heavy lifting of leadership, the better your results are likely to be. Similarly, a lot of successful companies outgrow their owners; that is, after a certain point, the owners’ abilities are no longer sufficient to guarantee the company’s long-term success. Developing people who have different skills and can pick up where the owner’s abilities leave off can only be to the company’s benefit. In addition, in the event that something should happen to the owner and he or she is no longer able to manage the company, developing other people who could take over if necessary can serve as a kind of insurance policy for the owner’s family. At the end of the day, though, it just makes sense to develop individuals in your business because the more leaders you have pulling together for a common purpose, the stronger the company will be.

  The key to developing leaders is empowerment, which is enabling leaders to work without the day-to-day interference of the owner and showcase their abilities. But empowering employees is a two-edged sword, because even though it lightens your load, it comes at the cost of giving up control. And after many years of running a business, that can be very hard. Some owners find it difficult because they have favorite things they like to do, and some because they have been burned in the past when they ceded control to others. But regardless of why you may be reluctant to give up control, if you want more leaders, you have to give them responsibility. It doesn’t work any other way. Fortunately, there is one factor that should make relinquishing control somewhat easier. By the time you have reached Level 4, the chances are that you’ve already put sufficient controls into place to make sure that unpleasant surprises are unlikely to occur. And in the meantime, by developing multiple leaders and helping them learn and grow, you will have built your business into the strongest company it could possibly be.