8 Tips to Grow A Successful Business

July 1st, 2011

Anyone can run a business during good times. When you are making money, it’s easy to overlook some of the deeper issues that are lying beneath the surface just waiting for an excuse to move to the top of your business’s list of challenges and create havoc.

Paying attention, during good times and bad times, to these eight proven concepts will help your business weather today’s storm and make sure the next one won’t hit you so hard.

  1. Reconnect to every single employee and ask them what you can do for them. Find out what their biggest challenges are and innovate ways to help them address those challenges.
  2. Identify and start tracking three critical financial indicators  in order to stay ahead of potential problems.
  3. Identify what is keeping your operation from being as flexible as it once was. Today you have to be able to respond to customer needs quickly and efficiently. If that isn’t happening, fix it.
  4. Find hidden pockets where profit is hiding.  Examine every aspect of your business with new eyes – to find those new eyes, tap into the intelligence that resides in your employees and find out what they see.
  5. Look inward. Examine your own leadership skills. Now isn’t the time to gloss over your weaknesses. Now is the time to reach deep inside and ask what other skills you can learn that will help your operations prosper.
  6. Assess your team. Not every person is a fit. Release the ones that need to move on and open the door to find new talent, new perspective, new ideas and new blood.
  7. What is your communication plan? If you don’t have one you better believe that there are vast information voids in your operations and your employees  are filling up those information voids with negative inputs. Start communicating your vision, your plan and be aggressive about telling your employees what they need to know.
  8. Look outward. Who can help you get a better understanding of how to manage your challenges? There are experts who can bring clarity, who can help you look ahead because they have been in your shoes. Don’t be afraid to ask for help.

Growing a business is hard work. It’s my belief that the current economic downturn, while impacting anyone running a business, will be fueled by determination, the ability to persevere and a business owner’s commitment to helping solve their business problems. By focusing on the right things at the right time, business owner’s  that have built their success on strong principles, customer-centered products and services and a belief in the people they employ will come out stronger than ever.

Discover a process that uncovers the hidden obstacles in your business. Learn a business strategy designed to help you navigate your own growth curve.
http://www.igniteyourbiz.com/training-programs/growth-xray.shtml

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Angel Financing for Entrepreneurs: The Good, the Bad and the Ugly

November 3rd, 2010

Angel Financing is a potential option once an entrepreneur has exhausted resources from family, friends and financial institutions. There are pros and cons in angel investing yet despite these differences, the advantages seem to considerably outweigh the disadvantages. However, a smart entrepreneur will do their due diligence before buying into outside capital options of any kind. An investors values must line up with the entrepreneurs values or the collaboration will be short lived.

The advantages of angel investing

1. Can provide the needed capital for a startup
When entrepreneurs have exhausted money from friends and family, personal savings, bank loans, and credit cards for their startups, they may seek angel investors to help them fill their needed equity gap. According to the Center for Venture Research at the University of New Hampshire, nearly 2/3 of funding for new enterprises is obtained from angel investors. Therefore, angel investor capital can provide a great source of funding for new businesses that have a high potential for growth.

2. Ability to raise capital in small amounts
Most early-stage ventures require small amounts of money, typically less than $500,000. Angel investors can provide this needed amount, using their own personal funds for the investment. Venture capitalists, on the other hand, typically pool money from different sources, generally invest in later-stage companies that have already established stability and success, and invest in enterprises in need of at least $500,000 to $1 million.

3. Flexible business agreements
Angel investors have a more informal investment criteria compared to the traditional financial lenders, including banks and venture capitalists. Because they are investing their own money, their business deals can often be negotiable. Because of this flexibility, they are more likely to be excellent sources of capital for early-stage businesses.

4. Can bring forth vast knowledge and experience to a new company
Many angel investors were once entrepreneurs themselves and have founded several successful companies under their leadership; therefore, they will not only provide the needed capital that entrepreneurs need but they can also offer desired support, expertise, and contacts in making a business grow. An angel’s insight and resources are of tremendous value for a company’s success, and an entrepreneur should always recognize the need for help, embracing the participation of their angel investor in daily business activities.

5. Involved in high risk investments
An angel investor’s capital in a new business is considered to be a high-risk investment since the new company has not yet established a solid track record of success. Since they often provide the initial funding for a new company, it can be quite difficult to determine if their invested enterprise will be successful in the long run. Despite the fact that most new businesses fail in their initial years, angel investors tend to be quite optimistic about their investment choices and often request a large amount of returns to counterbalance the risk.

6. Does not require high monthly fees
Another benefit from raising angel capital is that there are no outstanding payment rates such as the ones that bank loans and credit cards require. Many entrepreneurs enjoy this element of angel investors, concentrating their time and effort into taking their new business forward rather than worrying about high monthly payments and fees that traditional lenders enforce.

7. Community involvement
Many angel investors choose to invest locally. The capital they provide for a new business will not only assist the launch of a new enterprise but it will also create employment opportunities and help stimulate economic growth by encouraging consumers to purchase their products. Many angel investors take pride in using their expertise in giving back to their community. These are the angel investors who look beyond monetary return.

8. Are located everywhere, in practically all industries
Nowadays, angel investors can be found everywhere, not just in traditional financial centers and districts. They also invest in nearly all markets worldwide. The majority of them are involved in industry-specific investments, according to the level of their expertise. Similar to venture capitalists, angel investors tend to focus on technology, but are also attracted to other types of industries as well. Regardless of the market sector that an angel is involved in, what attracts an angel investor to a specific venture is the potential for a company’s profitability and growth.

The disadvantages of angel investing

1. Rarely make follow-on investments
The reason why most angel investors are less likely to make follow-on investments is because of the risk associated with losing even more money when reinvesting in an unsuccessful company. On the other hand, venture capitalists have a different approach to follow-on investing. They tend to spend approximately 2/3 of their funds on follow-on investments, taking the opportunity to allow companies to expand while diversifying their current portfolio firms.

2. Can actually be deceptive
While the majority of angel investors truly look beyond the promise of monetary return, there are a few angel investors who are greedy and motivated by money rather than in promoting the good of the firm. These angel investors tend to be less patient with new entrepreneurs and do not provide any mentoring or guidance during a company’s early stage of development. To avoid such complications, it is crucial that an entrepreneur obtain complete information about the character and reputation of any potential investors before pursuing and agreeing to any terms.

3. Can be costly
In exchange for providing the needed startup capital for a new company, many angel investors often require a certain percentage of stake in a company, starting at 10% or more, and expect a large ROI for their exit. From their perspective, this is a reasonable exchange since they are investing in very young and risky businesses that have not yet been established. In addition, angel investors may hire skilled professionals to ensure the day-to-day business operations.

4. Active company involvement can lead to problems
Each level of company involvement varies from investor to investor; however, it is not uncommon for an angel investor to have a certain amount of control in running a company. The entrepreneur may unwillingly be forced to give up some degree of control in order to meet their angel investor’s requirements, which can often lead to resentment on the part of the entrepreneur. Another problem that may arise is the angel investor’s lack of industry experience. This limited knowledge adds very little value to a company’s success. That is why entrepreneurs should only seek angel investors with proven experience in their industry.

5. Do not have national recognition
While there are well-documented directories of venture capital firms available, there is no national register for angel investors. Due to these differences, angel investors do not have the national recognition as their VC counterparts. They remain hidden and mysterious but choose to do so in order to have a degree of separation from entrepreneurs, who may pester them with their business plans and telephone calls.

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Business Solutions Require Clarity of Root Cause

May 4th, 2010

Focus remains one of the biggest challenges for a business owner. Finding tools that can help us get focused on the right things at the right time offers invaluable help as we navigate the dynamic twists and turns our businesses take.

A simple concept, the Three Gates of Focus, offers business owners a tool that can help them clarify issues, uncover the root cause of those issues and provide solutions that better address the problem.

Where there is confusion about the cause, there is confusion about the solution.

All issues can be put under one of these three gates of focus:

The People Gate

The Process Gate

The Profit Gate

The ability of a CEO to narrow their focus when dealing with the myriad of problems and challenges they face daily provides clarity and can lead to better decisions.

For instance, a lack of sales could quickly be laid in the lap of the sales team. By being willing to ask the question: Is this a People Issue, a Process Issue or a Profit Issue and generate discussion with key employees, a leader will more likely find the root cause of the problem and find a longer term solution.

By further asking, in the case of a lackluster pipeline:  Is this a resource issue — have we put enough financial resources into this area; Is this a training issue — have we provided exceptional training opportunities; Is this a problem with work flow — do we have proof that the process works, a better idea of how to solve the problem pops up quicker and with greater clarity.

Every single problem, issue or concern that a company faces can be put into one of the Three Gates of Focus. And just starting from the beginning to ignite the focus of a team on the right Gate can save time, money and headaches.

Here’s what it means to Focus on the People Gate
You are focused on building competency, staff satisfaction, performance and innovation through the conscious development of people. Areas of focus include, but aren’t limited to:

Effective hiring practices
On-going and consistent training
Competitive benefits
High voltage
Development of a vision and core values
Performance indicators
Intentional decision making

What it means to Focus on The Process Gate
You are focused on transforming complexity into clarity through systems. Examples of those systems include:

Sales systems
Marketing systems
Financial systems
Customer service systems
Operational systems
People management systems
Risk management systems

What it means to Focus on the Profit/Revenue Gate
A company is focused on predicting growth by maximizing and anticipating profit/revenue protection and capacity issues. Examples include but aren’t limited to:

Sales capacity
Facilities capacity
Fulfillment capacity
Production capacity
Product development capacity

There is an advantage in explaining to your company what each Gate of Focus represents.  There is an advantage in using the language of growth to identify issues under one of these three gates. The ability to uncover the root cause of a problem leads to quicker resolution of those problems. And a company with fewer problems will always keep that company ahead of the competition.

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The Awareness of Change

April 7th, 2010

As a business growth specialist, I strive to bring the best and
most effective information to my clients. If you’ve been in this
amazing field of business consultancy for very long, you know
our clients don’t always take our input. Rightly so. It’s their
business and they have every right to choose which path they
want to traverse.

2009 was a tough year. And I believe it created an atmosphere
of delivery that will force all of us to rethink our businesses,
our services and how to best help our clients come out of a very
difficult time.

Was reading some information on the teachings from Anthony De
Mello who was born in India in 1931 and passed away at the young
age of 56. De Mello’s rants were about ‘waking us up’ and his beliefs
were that increasing our awareness would increase our ability
to stop ’sleepwalking’ through life, to truly ‘know thyself’.

I realized that in certain situations, I was ’sleepwalking’ through
engagements with clients. I always delivered more than expected and
clients seemed satisfied. However this article mentioned how
difficult it really is to live in awareness and in fact, people in
‘unawareness’ are not conscious of their actions or their words.

Whew. How many times did I leave a presentation or a workshop and
as I was walking back to my hotel room or to my car have a moment
of thinking ‘what exactly did I say’?

Ed Bassett, senior vice president at DuPont is quoted as saying:

‘The secret of leading in a rapidly changing environment is to be
committed to living the examined life; oneself.’ And the great
Confucius said, ‘The one who would be constant in happiness must
frequently change.’

There is a strong lesson here that I am going to take away and it’s
simply this:

– I will not just ask my clients to recognize change in themselves,
I will strive to increase my own awareness of everything around me.

– I will listen even more intently to my clients but I will also
listen intently to myself in order that I may hear those clients
more completely.

As Stephen Covey writes: “Between stimulus and response, there is a
space. In that space lies our freedom and our power to choose our
response. In our response lies our growth and our happiness.”

I’m going to learn how to put that gap into my conversations, my
actions in order to improve my life which in turn will improve the
lives of people I strive to help.

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Business Lessons and Skiing

March 2nd, 2010

Without going into too much detail, my older sister and her husband moved to Durango last year after spending over 20 years in sunny, warm California.

They moved because their daughter and her husband become business owners for the first time, buying a business in Durango. There are grandkids involved so hence the complete desertion of the California lifestyle.

As kids growing up in Fort Collins, CO, we were hitting the ski slopes at a very young age. Throughout my teen years I skied quite a bit but never considered myself a great skier. Then in my late 30s and early 40s I took it up again with a determination to excel at a sport I had been very tentative about. I took lessons at Vail, CO and was soon skiing down black diamonds and skiing moguls — something I never thought I would or could do.

I got the call last December, just before Christmas. My sister had signed up for ski lessons at Durango Mountain (what us locals still refer to as Purgatory). Really, I said with a bit of hesitation. Since she had never been a serious skier I gave her all the caution about being careful, you’re too old to be breaking any bones, I joked.

It was after I hung up the phone that the thought first entered my brain. If she can do this, so can I! I didn’t think that much about it until the first of February. I called and said I’d be there on a Wednesday in February and I’d attend her morning lesson, then we’d ski together the rest of the day.

As I drove from Sante Fe, NM to Durango, I remember thinking that it had been 10 years since I had last stepped into a pair of skis and hit the slopes. Nervous energy surged as I thought about that first run which I knew would be down a very gentle slope — but still, I was not at all in the same shape I was in when I was tackling those Black Diamonds.

On the chair lift, I joked with my sister and my niece about taking it slow. Getting off the chair proved harder than I remember and I didn’t appreciate it hitting me as I stuggled to get out of its way. My thought was: go easy, keep your weight forward, stay in control.

It only took me about 10 minutes of taking it easy that I knew that plan would get me hurt. I started becoming very intentional about what I was doing. I knew what to do. I had always known what to do. And as soon as I started skiing with intention, I started skiing. I couldn’t wipe the smile off my face as I schussed down that first hill. Poling, gliding and turning as I attacked that bunny slope with confidence and wonder.

There was a lesson in this, I thought as I rode the chair back up for a run at a Blue. As business owners we sometimes lose our confidence. We sometimes forget what we know and we allow self doubt and fear to affect our ability to make decisions. We may have ‘been off the slopes’ for awhile because sales were down, a client went away, we lose good people, we have to start over. Those are the times when it will do us no good to be tentative.

We have to attack our businesses with intention every day so we don’t lose our edge. We have to believe we know what to do and then go do it. I didn’t do any Black Diamonds that day on the slopes but I’m confident I will. After all, Green, Blue or Black, the difference is the slope and with the right gear and the right technique, anything is possible.

So it is with our businesses.

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The ‘Key’ to Conquering Fear

March 1st, 2010

It’s an early Thursday morning and I’m making my typical trip from Westminster, Colorado to Santa Fe, New Mexico. My husband is working on a large project there and I tackle the 400 mile journey often in order to spend time with him.

I travel with our two dogs, Classy, an australian shepard and Dixie, a heeler/aussie mix. They are easy traveling companions, use to the two stops we make along the way so they can ‘take care of business’.

At our first stop, the rest area outside Colorado City, I do my routine. My routine is designed to conquer the fear I have of either locking my keys in my car or losing my keys. It’s not an entirely irrational fear as I have locked my keys in my car on more than one occasion. So knowing that I’m traveling on my own, it’s a real fear.

This morning, no one was at the rest stop and I knew I wasn’t going far from the car, so I didn’t lock the car. Classy, Dixie and I head out and within 5 minutes they have both done their duty. I walk them back to the car to get their water bottle and traveling water cup out to give them a drink and then it happens.

I can’t find my keys. They aren’t in my front pocket of my jacket. They aren’t in my jeans pockets. I frantically open the back door of my Jeep and see if I dropped them when I took out the Classy and Dixie’s leashes. Nothing.

I’m telling myself not to panic but I am. My worst fear just came true. I’m living a nightmare I’ve imagined more than once over the last 18 months that I’ve been making this drive.

I calmed myself down and retraced my steps and at the point where the dogs ‘did their thing’ lying on the grass were my keys. You don’t need to hear the conversation I had with myself as I walked back to the car.

It hit me as I drove South, with the sun just coming over the horizon in the East, that I just proved how strong an emotion fear is. I allowed fear to dictate my behavior and I wasn’t even aware of it.

How often do we allow fear to dictate how we run our businesses? Are we so afraid of a negative consequence that we worry that consequence into reality?

Since that trip, I have changed my mindset. I now have a process on how I handle my keys. It’s worked and the fear is gone. I now have trust in my process and feel liberated.

I wanted to write this experience down and share its powerful impact because I’m not a person that lets fear determine my life. I take on challenges left and right in my business every day. I took on Red Mountain Pass in the dead of winter even though I’m terrified of heights. I rode my CanAm Spyder Roadster up Mount Evans, the highest paved road in the U.S. during a horrible hail storm. So I know fear can be conquered.

But I allowed the fear of losing my keys to actually alter a behavior subconsciously. My fear won out.

What’s the point? That one little incident made me realize that as business owners we may allow our subconscious to dictate our business success more than we know.

What fear is keeping your business from exceeding your expectations?

Got to run. Need to go make 6 more sets of keys to put in every jacket I might ever wear on that drive from Westminster to Santa Fe!

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10 Reasons Your Company Isn’t Growing

January 8th, 2010

Basics. They aren’t pretty. They aren’t necessarily exciting. They take a lot of focus. You can’t delegate any of it. The basics behind growing a successful company don’t change. Many things do change in the myriad of challenges that go along with growing a business, but short-cut the basics and you will regret it.

It was around 2 in the morning on a fall evening in 2001. I had turned in my resignation to my business partner at the company I had helped grow from 2 people to over 120 people, up to $12 million in sales. Life has its way of waking you up and in this situation, my concern over what I would do now that I was unemployed after 28 years of working, the last 14 at this marketing communications company, had me, to say the least, nervous.

I wanted to help other business owners grow their businesses based on the lessons I had learned. The thought that raced through my brain at 2 a.m. was ‘what made us successful?’ What were the key lessons we had learned, the hard way, I might add, that turned our small start-up into a multimillion dollar enterprise?

I literally jumped out of bed, raced to my office and captured these concepts. Nine years have passed since that day in 2001. I continue to pull out these ‘basics’ in all aspects of the work I’ve been doing with business owners. And I still witness the impact that ignoring any one of these has on a company’s ability to grow.

#1:  You don’t have a vision or if you do, no one else knows about it.

#2:  You haven’t taken the time to define and articulate your values.

#3:  You haven’t built a strong management team.

#4:  You are uncertain about how your company will grow, unaware of growth’s impact.

#5:  You have abdicated financial responsibility to someone else.

#6:  You don’t have a defined customer success program in place.

#7:  Your communications aren’t intentional, they are sporadic and not consistent.

#8:  There isn’t a defined culture.

#9:  Training takes a back seat to almost everything else.

#10: Employees aren’t engaged because they don’t think you care.

You notice that I call these the 10 Reasons Your Company Isn’t Growing. You might also notice none of them focus on marketing and sales. It’s not because marketing and sales aren’t critical to your company’s ability to grow. It’s because I’ve not encountered a CEO who wasn’t focused on marketing and sales. That isn’t to say they had it wired. But they knew that without a solid marketing and sales plan, their business wouldn’t generate income.

However, when it comes to having a clearly defined vision and making sure the entire company understands it — not so good! The same with the other 9 aspects that I know, from experience, are critical to setting up a foundation that will support a company’s growth plan in good times and bad times.

Follow my blog posts as I go into more detail on each of these 10 critical strategies that may not get a CEO pumped every day, but are critical to creating a company that can sustain profitability, productivity and performance.

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Tips and Tactics December 2009: Getting Ready for the New Year

December 17th, 2009
May you enjoy this holiday season and relax, rejuvenate and remember what you have to be thankful for.

Are you optimistic about 2010? I am. But that is my nature. Even though my revenues are down from 2008, my profits are up. That was at least encouraging because like many of you, I sort of hunkered down, watched what I spent and tried my best to capitalize upon every revenue-generating opportunity.

My financial advisor sends out an informative email every other week. This last update caught my attention. Here’s why.

The article made a statement that read:
“THERE IS A DIFFERENCE BETWEEN LUCK AND SKILL and knowing when you are just lucky and when you are successful due to skill is of paramount importance as an investor.”

I got to thinking. Take out the word ‘investor’ and insert ‘leader’ and the point is the same. At least that’s the opinion I share on my blog post.

Read it at http://igniteyourbiz.com/blog

I want to thank all of you who have read my free online newsletter during 2009. I will be offering more programs and services in 2010 designed to:

1) Help you Think Differently about your company,

2) Adapt your Skills to the needs of your company as it grows,

3) Help you Predict how Growth will impact you.

Remember, if you aren’t growing you are dying. Don’t let growth define you. Figure out what areas of your company are dying and take a proactive approach to addressing those issues in 2010. It’s never too late to be improve your focus on People, Process and Profit/Revenue!


Yours in Growth,
Laurie Taylor


What do you think will help your business the most in 2010?

What 5 things can you do right away in January 2010 that will help you get focused and financially grounded as the New Year unfolds?

Read my article on ‘Leadership Tips for 2010′.

And then leave your ideas on what you are going to do to make sure your business thrives not just survives in 2010!

There are companies that are ‘getting by’, there are companies that are driving solid revenue, and there are companies that are still making a profit.
The reality is there isn’t any silver bullet but solid leadership skills always pay off.

What are you doing that is working?

Align Your Team for 2010 Before You Align Your Goals

I’ve witnessed too many examples of great goals gone bad because the CEO didn’t have alignment within their team. If you are getting ready to begin your strategic planning for 2010, here are 5 steps a CEO can take to make sure a team is aligned BEFORE goals are set.

1) Make sure you, the CEO, are very clear on what you want for the company going forward. Your team will look to you for direction.

2) Be aware of CEO Disease — when people withhold information from leaders, especially negative information. Don’t let people off the hook too easily. You may have to ask the tough questions.

3) Hire an outside facilitator that can objectively help you and your team approach all issues, not just the ones that are easy to talk about.

4) Ask your management team (or key employees) to jot down their ideas and submit them to you at least a week before the planning session — this forces them to do their own thinking and lets you know in advance what their ideas are.

5) Take the planning group out to dinner the night before and let the socialization of the evening help people to laugh and enjoy each other in a relaxed setting.

Planning sessions are tough. They require a lot of focus and a willingness on the part of the players to be honest, forthright and objective. Your ability to maintain the traction to address the goals for 2010 will be dependent upon your team believing in the plan from the start.

For years, FlashPoint! has worked with CEOs through the Stages of Growth XRay, an alignment tool that allows the CEO and his/her management team to address issues based on past, current and future stages of growth challenges.

This process takes the guesswork out of planning by providing research-proven information critical for each stage of a company’s growth. And with the 5 stages of growth assessments that all partipants complete prior to the planning session, everyone’s top issues are uncovered.

You aren’t pulling ideas out of the air. These are real issues felt by each participant.

The final planning tool isn’t a ’sit on the shelf’ set of planning documents. It’s the company’s own visual Growth Map outlining the top 6 – 8 initiatives that align with the company’s current stage of growth. Issues that were relevant, clearly stated, with an agreement from the group on each priority.

To learn more about FlashPoint!’s Stages of Growth XRay, contact Laurie at laurie@igniteyourbiz.com.

Navigate Your Own Growth Curve

Einstein

If you are looking for a leadership strategies that give you a roadmap to success, you’ll find it in James Fischer’s book, Navigating the Growth Curve: 9 Fundamentals that Build a Profit-Driven, People-Centered, Growth-Smart Company“.
It’s a mystery novel and a business book all in one.
Dr. Ivan Misner, Founder and CEO of BNI highly recommends this book and says:
Navigating the Growth Curve is a tremendous read. It has fresh ideas and practical solutions that any business leader could use in growing their company. I highly recommend this book.”
Fresh ideas and pratical solutions — what business owner would turn that down?

This makes a GREAT Christmas present for clients, employees, and business friends!

You can order the book on FlashPoint!’s website or contact me directly for quantity discounts.
Quantity discounts send an email to Laurie@igniteyourbiz.com
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Leadership Tips for 2010

December 14th, 2009

Nothing will help your company improve in 2010 if you aren’t looking for ways to improve your own leadership skills.

Sounds a bit harsh? Sorry. But the companies that are doing well even during this difficult economy, are doing well because the leadership of the company has these things going for them:

1) They have surrounded themselves with capable people — to do that they focused on asking the question — what do I need talent-wise that I don’t have? Then they hired to acquire needed strengths.

2) They enjoy working with people and they respect the talent they have on board. That respect manifests in people treating the company as if it is their own and stepping up in difficult times to provide solutions.

3) They have a solid decision-making process in place and use it to consciously evaluate business decisions on a regular and intentional basis.

4) They are financially aware of how they make and keep money and have always kept a firm handle on financials.

5) They appreciate the value of communications and communicate often to all employees to keep people aware of how the company is doing. They don’t sugar-coat issues, but let everyone know about the company’s strategies, even if the information isn’t always good.

What leadership tips have worked for you?

What would you tell a fellow CEO about your approach to weathering these tough challenges?

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Leadership in tough times — is it luck or skill?

December 9th, 2009

I receive a weekly financial update from my financial adviser and the one I read this week started me thinking about leadership skills and the leaders who weather downturns better than others.

The article talked about an investor who anticipated the housing blow up before it hit and made himself and his clients millions of dollars. He went on to write a book about his experience and has another ‘prediction’ regarding gold in the works. The article went on to explain that there will always be investors who hit ‘hot streaks’ and begs the question: are  ‘hot streaks’ Luck or Skill?

From the article:

THERE IS A DIFFERENCE BETWEEN LUCK AND SKILL and knowing when you are just lucky and when you are successful due to skill is of paramount importance as an investor.” My addition is to use Leader instead of Investor.”

That concept, Luck or Skill, resonated with me on several levels.

One: Leadership is a skill. But many leaders simply rely on luck — they were in the right place at the right time.

Two: Anyone can run a business in good times. When times get tough, a leader who simply relies on luck can have a negative impact on many lives when layoffs occur.

Three: It’s a proven fact that leaders have more trouble than anyone else when it comes to receiving candid feedback, particularly about how they are doing as leaders.

The article made me think about this phenomenon we call Luck and Skill and how it related to Leadership. There are companies who might be struggling but are still around. They are still keeping the majority of their employees. The leaders of those companies continue to hone their own skills and by doing so, they have better weathered this economic tsunami.

I cite this because I continue to interact with hundreds of CEOs as I deliver business topics to business audiences. And there are success stories out there.

We don’t hear about them because our media tends to focus on all the negative stories that further fan our fears. However, I believe there are literally thousands of companies that are weathering the downturn and they are successfully doing that because of the skill of their leadership. Luck can and does work when times are good. I’m less inclined to believe luck can persevere when the going gets tough.

The article goes on to say:

“With millions of investors, odds are that some of them will make winning investments numerous times in a row. If these winning investors were, in reality, just lucky, but they think they were actually skillful, then that is when the situation turns problematic. The lucky investor may start to think they are infallible and get stubborn when the market turns against them. Eventually, when the lucky streak ends, it will likely mean serious losses for the investor.”

Again, insert the word Leader for Investor and it makes a worthwhile point.

Leaders who think their success is based on skill not luck may decide they don’t need to hone their skills, i.e., learn how to delegate, learn how to handle conflict, learn how to build relationships, learn how to build an aligned team, learn how to trust — and that myopic view creates problematic situations for the people who work for them.

Successful leaders are learning leaders who are willing to admit they don’t have all the answers and are willing to turn to the people they have hired and truly utilize all the intelligence of that organization to help successfully navigate good times and bad.

“If we become increasingly humble about how little we know, we may be more eager to search.”

– John Templeton

Article attributes courtesy of Lawrence Finch CPA, Priniciple, G5 Financial Group, Inc.

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