The 2010 Winter Olympic Games begin in earnest tomorrow, February 13. (The overhyped, overwrought opening ceremony doesn’t count.) Alpine skiing, freestyle skiing, the biathlon, ice hockey, luge, speed skating, short-track skating, ski jumping…and that’s just the first day!

Some Olympic records – and a few world records – will be broken over the course of the next two weeks. You watch these athletes perform and you marvel at their power, their endurance, their finesse.

How do they do it? What makes them so special? Are they that different from you and me? Are they superhuman? No, not really. They’re just like you and me…well, maybe not now. But we all start out on equal footing.

The big difference? With a few exceptions, the athletes got their start fairly early in life. And almost from the day they laced up a pair of skates or strapped on skis, they had an ambitious, long-range goal – to be a pro, maybe even the next Wayne Gretzky or Herman Maier.

Mom and Dad encouraged and helped them. Their parents, and then their coaches, made up their plan. They knew that to get the big goal, these future stars had to accomplish a lot of smaller goals, and they had to do it in stepwise fashion.

The plan included competition, proper nutrition, and physical and mental training. Their coaches checked their performance in training and competitions. They analyzed the athlete’s performance, noted where they were reaching those small goals and where they weren’t, and revised the plan accordingly. Then, they executed the revised plan to improve performance.

They repeated this stepwise plan over and over until they reached their big goal, whether that was turning pro, making the Olympic team, making it to the medal round, or standing on the podium at the medal ceremony.

Think about that. They made a plan, executed it, checked their progress, and improved incrementally. What does that remind you of?

If you thought “Deming Cycle”, you’re right. Plan, do, check, and act — just like your organization should be doing (if it isn’t already). Your organization is just like that Olympic athlete. Improvement doesn’t happen overnight. It happens in stages, over time, following a plan.

Consider this: What are your goals for the short and long term? Do you have a plan to get there? Are you satisfied with your performance? More importantly, are your customers?

How do you get better? What will it take to make your firm stand out from the rest – to get to the Games, to the medal round, and maybe even the gold, silver, or bronze?

Are you monitoring and analyzing your performance in order to improve? Are you looking for overnight success, or are you looking for incremental improvement over time? Do you adjust your plan when you don’t meet your goals?

Enjoy the Games. And remember, as you’re watching the long hill jump – seeing that ski jumper glide down the ramp, pick up speed, then hurtle the length of a football pitch before touching down gently (we hope). Remember that it started with a plan…

So, what’s your favorite event at the Winter Games? Who’s your favorite athlete? Will they have to truck in snow? (Sounds like somebody had a plan.)

We sometimes hear from small business owners who wish to replicate their successful business and expand to one or more new locations. They often say that they “…need someone to come and package up (their) business from head to toe so we can expand.” That’s what they say — but is that what they need?

Most companies that expand successfully do so with a combination of:

• Researching and documenting “best practices“;
• Process documentation, in the form of well-written policies and procedures;
• Customized employee training; and
• Implementing a quality management system (QMS)

so they get consistent results across all operations.

After a few e-mails back and forth between the small business owner and Bizmanualz, the gravity of the situation — their “replication strategy” — becomes apparent. The process of documenting best practices, implementing policies and procedures, training employees, and implementing a quality management system is no small undertaking — any one of them alone would be daunting, let alone all four. While the owner’s first inclination may be to have someone to come in and do it, seldom are they in a position to budget for it.

Nor would it be advisable, in most cases. For most of our customers, existing staff — labor — is the largest cost, by far. When you dig down for what the owner really wants, it’s to enable the current staff to achieve the desired growth without spending more money than they’re already spending on employees and related expenses. Given our customer’s practical concerns, our approach has evolved into guiding and enabling growth, not sending in a “hired gun” to do it for them. We guide growth through training and workshops, and we enable growth with our products and services.

Saving Time with Pre-Written Policies and Procedures

Our pre-written materials save you time by giving you a starting point and a framework. But, in the case of the business owner seeking growth, he’s asking, “Which procedures do I need to customize, why are they important, and once I’ve customized them, how do I know they’re working?” These and other questions are answered in our two-day roll-out training.

In our Implementation training, we help you find the answers you need and help select the right procedures to sustain growth. That way, your staff can build the best-practice procedures you need.

But wait! There’s more! With the training, you get a year’s worth of phone consultations. Once you’ve taken the Implementation training, pick up the phone and ask us anything you want. Contact us, or download a one-page flier about the roll-out training.

The training will show your team how to build — and sustain — a system of best practices for growth. We’ll help you select, modify, and apply our procedure templates to improve your current operations, making it cheaper for you to provide your service to your customers. Not only do you make your operations more effective and more efficient — saving you money and increasing your profits. In this tough economy, you’re better able to answer price challenges from competitors.

Supporting your Growth and Expansion with Software

Our customers have taught us that when their businesses expand geographically, they often face challenges in coordinating, controlling, and distributing their policies, procedures, and best practices among their locations. That’s why Bizmanualz is currently testing a new software platform that will help you handle these challenges. Once this platform is available, you’ll be able to rent access to our software platform and upload your procedures so that when you’re ready to expand, all your locations can access controlled releases of policies and procedures, as well as other key documents.

Furthermore, you’ll pay only for what you need! Billed monthly, our web-based software will be particularly cost-effective for our small-to-medium-sized customers. You’ll get the convenience, control, reporting, and smooth operations that you want, with none of the hassles of maintaining the software in-house. It will come pre-loaded with your Bizmanualz policies and procedures. All you’ll need is an Internet browser.

If you want to help us test our upcoming web-based policies and procedures management software release, please comment below or contact us via the Web. Our job is to help you grow efficiently and with as little risk as possible. Share your growth challenges with us, and we’ll reply with ideas and products to help you.

Business continuity management — more commonly known as “disaster recovery”, even in the present day — used to be about worst-case scenarios.  That is:

“What is the worst thing that could befall my company, and how do I ensure minimal to no disruption of the company’s operations if that happens?”

Aftermath of 1906 San Francisco Quake

“What could happen” has traditionally centered on such events as:

• Natural disasters (fire, flood, storm, earthquake);
• Disasters of the human kind (terrorism, rioting, looting, etc.);
• Major utility outages; and
• IT system problems (malware attacks, hardware failures, etc.).

While the likelihood of such a catastrophic event is believed to be very small, its impact - if it occurred - would probably devastate the business, causing it to fail.

As computers have insinuated themselves into every facet of every type of business, and the importance of alignment of strategy and operations has been realized, the scope of “disaster recovery” has broadened.  More complex recovery systems have been devised to address companies’ needs on a more comprehensive basis.

However, we’re still focused primarily on disaster recovery — assuming that only the worst will happen – rather than using a truly comprehensive, risk-based approach to crisis and continuity management.  Instead of dwelling on the most unlikely of possibilities, we ought to be more concerned with:

• What threats are more likely to take shape than others?
• Which of those threats, if manifested, will have the greatest impact on the company, which will have the next-greatest impact, and so on?
• How will the company act to prevent those problems or minimize their effect?

I’m not suggesting that your company has to completely give up on the doomsday scenario.  However remote the possibility of a cataclysmic event, you want to be prepared.

I am saying that your business continuity management plan ought to cover the risks inherent in conducting day-to-day business as well as the remote possibilities…things like the current brittle economic environment, or risks to our business structure and processes (e.g., cloud computing, embezzlement, misuse of company information, swine flu).

What do you think?  Could your crisis and continuity management plan take a more comprehensive, risk-based approach? Are you satisfied with your current plan?  Do you even have a plan?

Or, are you counting on the world to end in 2012?  (In which case, I suppose, the whole crisis and continuity exercise is moot.)

As 2009 limps — bloodied and beaten — toward its conclusion, here are a few issues that are possibly weighing heavily on HR managers’ minds:

1. Salary budgets are reportedly set for modest increases, at best, but given the last couple of years, for most of us any increase - however modest - is welcome.  According to one survey, increases for this last year averaged 1.9% worldwide and are expected to rise another 2.9% in 2010.  (However, at this time last year, they called for 3% and got two, so take a grain of salt. Another thing…how much is the financial sector skewing those numbers?)
2. Of course, this is the time of year for benefits reenrollment, for the declining numbers of us who still have company benefits.  In this corner, benefits aren’t being reduced, but we’re going to pay 5-10% more for them. (There went the salary increase.)
3. Speaking of health, GINA (the Genetic Information Nondisclosure Act) has just been introduced to the USA. A number of countries (e.g., Sweden, Israel) have had genetic privacy laws on the books for some time, but the US is taking a slightly different tack, not really playing catch-up.  HR departments will have to get the word out to hiring managers…for when they get around to hiring again.
4. How does a company retain its best and brightest if it can’t give salary increases?  Training?  Guess again.  Training budgets declined an average of 14% in 2009, according to “Chief Learning Officer“ magazine.  CLO also looks for an average 4% increase in training budgets in 2010, spent mostly on “efficient” delivery methods, like e-learning.  The ASTD (American Society for Training and Development) says that retail, government, and businesses operating on narrow margins are cutting back on training or cutting it out entirely.
5. Funds from the American Recovery and Reinvestment Act (ARRA) have been handed out at a glacial pace (it’s the government, after all), though it has had an immediate effect on unemployment benefits.  Stimulus funds don’t appear to be having an effect on employment rolls, according to the news on mounting job losses across the board.  Look any day, on any news site you favor — a few thousand jobs lost here, another few thousand there.  Yet, the Federal government reports more jobs being created each day.  Who’s right? In any case, HR departments don’t appear to be preparing for a return to pre-recession employment levels.
6. H-1B visas.  Always a touchy subject in the USA, the numbers have risen and fallen with the state of the economy so, of course, they’re down now.  High-tech firms, health care institutions, and educational institutions appear to profit most from H-1B workers.  The current annual cap is 65,000, according to the USCIS (excluding various exemptions).  If the job market keeps on its current unsteady course, expect the “hire American / hire H-1B” tug-of-war between labor and employers to intensify.
7. The Health Care Bill before the U.S. Congress: What will its final form be and how will it affect HR managers in the years following 2010?  Will it actually put the brakes on employment growth, as some prospective employers suggest?  What will be the ripple effect, if any, on commerce?

While we seem to be dwelling mainly on the USA, most of these issues weigh heavily on the minds of HR managers around the world, as well.  (”It’s A Glo-bal E-co-no-my / Af-ter All…”.)  These and other concerns don’t have an easy or quick resolution, either, yet we continue to be optimistic about the days ahead.  As a friend said to me just today, “We must have hope.”

HR specialists and managers out there…is there anything else that concerns you as 2010 approaches?

The Securities & Exchange Commission is scheduled to decide before the end of 2011 whether US companies will be required to prepare their financial reports according to international financial reporting standards, or IFRS, rather than according to generally accepted accounting principles, or GAAP.  If the SEC takes this step — and most every indication is that it will — the largest public companies would begin reporting according to IFRS in 2014.  All public companies would have to implement the international standards at some point in 2016.  That means that large companies could begin implementing IFRS as early as 2011.

Some multinationals are in the process of switching to IFRS in their American operations.  They’ve been using IFRS in their non-US operations and financial results reporting according to a single set of standards promises greater efficiency and, therefore, less cost.  A move like this, if undertaken by many more companies in the next year or so, may make the decision to switch accounting standards easier for the SEC.

What about private companies, though?  What about companies with just a few hundred employees, or fewer?  Well, there’s been some talk (but not a lot) that small-to-medium enterprises (SMEs) — companies with fewer than 250 employees — might not be required by Federal law to use the IFRS standards.  However, market forces alone promise to exact a toll on the company that wants to stick with GAAP since commerce in some quarters has been global for decades and is becoming increasingly so in virtually every area.  We see stories all the time about small, family-run businesses eager to sell overseas.  If switching to IFRS helps them achieve their goals, they’ll use it.

The FASB and the AICPA have been working closely with the IASB in preparing for the conversion and between them and the IRS, there isn’t much enthusiasm for managing two sets of standards.  Just last week, the IASB and FASB talked about their continuing commitment to the improvement and convergence of IFRS and GAAP.  The AICPA has already developed courses so that accountants in the US can make the transition.

Small companies ought to be able to make the switch easier than public ones.  To make the conversion even easier for small-to-medium enterprises, the IASB published a slimmed-down version of the IFRS earlier this year.  Simply titled “IFRS for SMEs”, it comes in at around 230 pages, so it appears the IASB really wants to get all types of businesses (and their accounting firms) on board.

Now, my questions to you, the audience:

• Are you looking into IFRS compliance?
• Are you already taking steps to comply with IFRS?
• What are you doing to drive compliance to accounting standards?  What tools are you using or what do you plan to use?
• Which of your Accounting Procedures and Processes — as well as other processes – will need to change?
• What accounting internal control issues are most important to you?
• How can we at Bizmanualz help?

As the Chief Financial Officer (CFO) of your company, you are responsible to the company’s Board of Directors for all accounting and financial matters.  You must establish company-wide objectives, policies, procedures, processes, programs, and practices to assure the company of a continuously sound financial accounting structure.

1. Cash Flow.  As a new CFO, your job is to control the cash flow position throughout the company, understand the sources and uses of cash,  and maintain the integrity of funds, securities and other valuable documents. You receive, have custody of, and disburse the company’s monies and securities. New CFO responsibility includes the authority to establish accounting policies and procedures for credit and collections, purchasing, payment of bills, and other financial obligations.  Cash is king and the flow of cash, or cash flow, is the most important job a new CFO has in any company.
2. Company Liabilities.  After cash flow, the new CFO must understand all of the company’s liabilities.  A company has many legal contracts, hidden liabilities in the form of contingencies, leases, or insurance summaries, and expectations from loan covenants and/or the board of directors.  As a new CFO, if you’re not watching out for the liabilities, who is?
3. Company Performance.  The new CFO must understand the company business model for generating customer value and translating the operational metrics into measures for performance.  The new CFO is the company scorekeeper using tools like the balanced scorecard, dashboards, and financial statement ratio analysis to communicate the company’s financial performance.
4. Department Supervision.  In a small organization, the CFO is the supervisor of Accounting, Finance, HR, and IT.  In a larger company, the CFO may only be responsible for the Accounting and Finance functions.  Either way, the new CFO supports the company’s accounting and financial functions using job descriptions, policies, and procedures.
5. Budgeting and Expense Control.  Budgets are a fact of life, and the new CFO is responsible for overseeing the budget process, collecting the inputs, and comparing the company’s actual performance with estimates (the budget).  It is an ugly process that falls within the CFO area of control.
6. Financial Relationships.  As a new CFO, you establish and maintain lines of communication with investment bankers, financial analysts, and shareholders in conjunction with the President.  You administer banking arrangements and loan agreements and maintain adequate sources for the company’s current borrowings from commercial banks and other lending institutions. In addition, you invest the company’s funds and administer incentive stock option plans.
7. Finance or Raising Capital.  You would think that finance is one of the key roles of the Chief Financial Officer.  Yes, it is important, but it comes after other more pressing operational issues, like those listed above.  The new CFO will establish and execute programs for the provision of capital required by the company, including negotiating the procurement of debt and equity capital and maintaining the required financial arrangements.  As the new CFO, you’ll coordinate the long-range plans of the company, assess the financial requirements implicit in these plans, and develop alternative ways in which financial requirements can be satisfied.
8. Financial Obligations.  As the new CFO, you need to approve all agreements concerning financial obligations, such as contracts for raw materials, IT assets, and services, and other actions requiring a commitment of financial resources.
9. Record Control.  The new CFO is responsible for the financial aspects of company real estate transactions and executes bids, contracts, and leases.  The CFO also provides insurance coverage, as required, ensures the maintenance of appropriate financial records, and prepares required financial reports.  The CFO has primary responsibility for ensuring company compliance with financial regulations and standards, like Sarbanes-Oxley, the IRS Tax Code, and GAAP (and soon, IFRS).
10. Shareholder Relations.  A new CFO analyzes company shareholder relations policies, procedures, and information programs, including the annual and interim reports to shareholders, as well as recommends to the President new or revised policies, procedures, or programs when needed.

The Top Ten Responsibilities for the New CFO:

1. Cash Flow
2. Company Liabilities
3. Company Performance
4. Department Supervision
5. Budgeting and Expense Control
6. Financial Relationships
7. Finance or Raising Capital
8. Financial Obligations
9. Record Control
10. Shareholder Relations

As a new CFO, sample accounting policies and procedures would be helpful to serve as a model, or framework, for your own accounting policies and procedures.  Save time.  The CFO Accounting Policies and Procedures Manuals set contains 239 procedures you can use to address the ten accounting cycles within your responsibility.

You have decided you need policies and procedures, but which business policies and procedures do you need?  Assess the business impact of each of your core business processes to generating revenue or introducing risk and then rank the results.  Core business processes that greatly impact your revenue or risk are where you want to start.

The Bizmanualz CEO Company Policies Procedures Manuals are designed with your core business processes in mind.  The nine business procedures manuals in the series provide your entire company with examples of the primary procedures used in writing your company procedure manuals.  How do the nine procedure manuals address the core business processes?

1. Customer Strategy & Relationships (Marketing) is a good place to start.  Most businesses talk about the customer being the most important part of any business.  Well, if your customer is so critical, have you mapped out a clear customer strategy and customer relationship process?  Do you have customer strategy procedures for developing awareness and education of your business in the marketplace?  The Bizmanualz Sales and Marketing Policies and Procedures Manual provides sample policies and procedures to help you set marketing strategy, marketing tactics, and marketing planning to cover the first part of your marketing sales funnel — awareness and education.

2. Employee Development & Satisfaction is essential to your business because your employees are the ones that talk to and develop your customers.  The Bizmanualz Human Resources Procedures Manual provides example procedures for hiring, administration (e.g., personnel records, compliance), compensation, and — the most important part – developing your employees.

The HR manual also includes a sample Employee Handbook and an HR Manager’s manual to provide a complete discussion of human resources.  Keeping employees and facilities safe is the focus of the Bizmanualz Security Procedures Manual, which includes coverage of guard force management, employee conduct, emergency operations, protection, and safety.

3. Quality, Process Improvement & Change Management is driven by competition, your desire to excel at what you do and make your customers happy.  The Bizmanualz ISO 9001 QMS Procedures Manual provides a sample quality manual, the six quality procedures required by ISO 9001, and additional supporting procedures to provide a foundation for your process improvement and change management initiatives.

4. Financial Analysis, Reporting, & Capital Management is critical to fast growth companies.  Cash is the lifeblood of your company and a fast growth company consumes cash quickly.  The Bizmanualz Financial Procedures Manual has example procedures for financial administration, raising capital, managing capital, financial statement reporting, and the internal controls necessary in a fast growth company.  A controllers manual is included to provide the direction and organization for controlling your company cash.

5. Management Responsibility addresses all of your core business processes and is integral to every area of your company.  Every manual in the “CEO Company Policies Procedures Manuals” covers the management of that departmental area.  Each manual provides a departmental (functional) manager’s manual that describes the departmental organization structure, major responsibilities, departmental guidelines, ethics, policies, and - of course - the primary business processes for that department.  The Bizmanualz Business Procedures Manual provides a simple, fast, and easy way to provide immediate oversight for all of your operations.

6. Customer Acquisition (Sales) is about engaging the customer and closing the sale.  The Bizmanualz Sales and Marketing Procedure Manual contains procedures for the entire sales funnel, sales process, sales administration and sales management common to organizations that have to oversee a sales force.  The Bizmanualz Accounting Procedures Manual contains procedures for controlling cash and the revenue cycle, which is a parallel and supporting activity to the sales process.

7. Product Development must obtain requirements from sales and develop products that satisfy the customer.  Therefore, product development procedures are found in both the Bizmanualz Sales and Marketing Procedure Manual and the Bizmanualz ISO 9001 QMS Procedures Manual, which contains procedures for customer requirements, as well as the design and development of new products.

8. Product/Service Delivery The Bizmanualz Accounting Procedures Manual contains procedures for shipping, receiving, and inventory control.  But since delivery is part of ISO and quality, the Bizmanualz ISO 9001 QMS Procedures Manual also provides coverage of this critical customer facing area.

9. Accounting Management is about accounting transaction management, as opposed to finance which is focused more on raising, managing, and using cash effectively.  The Bizmanualz Accounting Procedures Manual focus is on controlling operating cash receipts, cash disbursements, inventory and assets, the revenue cycle, and general accounting administration.

10. Technology Management is about all of the technology in your company.  The Bizmanualz Computer, Network and IT Procedures Manual contains procedures for IT administration, IT asset management, IT training, technical support, IT security, IT disaster recovery, and software development.  More in-depth continuity planning coverage is provided with the Bizmanualz Disaster Recovery Procedures Manual.

Business Process Policies Procedures

The Bizmanualz CEO Company Policies Procedures Manuals collection is the best overall deal — you save 45% when you buy the set, compared with purchasing all nine manuals individually.  The series covers all of the core business processes in one simple bundle.  It includes manuals for:

• Financial Policies and Procedures
• Accounting Policies and Procedures
• Computer & IT Policies and Procedures
• Human Resources Policies and Procedures
• Sales & Marketing Policies and Procedures
• ISO 9001 Quality Policies and Procedures
• Security & Disaster Policies and Procedures
• Business Policies and Procedures Sampler

Every critical area of your company is now covered with the Bizmanualz CEO Company Policies Procedures Manuals set.  Coverage is now easily at hand for Accounting, Administration, Customer Service, Disaster Management, Engineering, Environmental Management, Finance & Credit, Information Technology, Manufacturing, Personnel, Sales & Marketing, Security Operations, Shipping, Purchasing, Inventory, and ISO 9001 conformance.

More than one son or daughter of a company founder has been coaxed into the family business in the years before dad’s retirement. Dad wants to back away from the business. “Planning for a graceful exit”, he says. “And”, he continues, “You are the heir to the company business.” Dad says that he realizes that it will take some time to transition out and transition you in.

From your corporate experience, you will bring new ideas to the family business like concepts about intellectual property and compliance. In the corporate world, key inventions, know-how, customer lists, and the like are documented, managed within information systems, and counted as assets.

Similarly, those corporations mitigated risk through auditing to compliance standards and then sustaining compliance through development of clearly written procedure manuals. Documentation was coupled with staff training which reinforced comliance with the procedures. At the corporation, decisions were arrived at in working groups, with key functions in the company agreeing on how they would support a change. New technology? Has Engineering approved the design? Has Legal protected the intellectual property? Has Marketing positioned the change in the marketplace. Has Sales introduced the concept to key customers and provided them with a beta product to evaluate? Eventually, change was adopted and enforced by the chain of command.

Arriving at the family business, you may find a troubling lack of documentation of core know-how, and a lack of internal controls and cross-checks you were accustomed to in a public company, at least since passage of the Sarbanes-Oxley Act (SOX) law. But when you bring up lax controls with your father, he may shrug it off. You start to realize that he is the center of everything at the company. The company was built on his great invention and know-how. He personally manages all the key accounts. He watches over the books and bank balances.  He is the company’s knowledge management system. When he does delegate, it is usually to loyal, trusted staff, whom also are approaching retirement. It begins to dawn on you that your presence may be the first tangible sign of “succession planning” within the family business.

You begin to realize that the company is designed around your father. Separating the business knowledge from your father will be something like surgery. Is he even sincere about backing off? And if he is, you’re not sure that filling his central role is what’s best for the future of the company.

So you’re left with this realization: How do you capture the business processes, policies, and procedures from your father. And how do you do so without draining the personality out of the business?

Sell Progress as a Retirement Plan for Dad

So if you’re that son or daughter stepping into the family business, you probably realize by now that if you want the business to grow profitably and continue as a leader in its markets after dad leaves, he can’t remain the personification of all company know-how, relationships and control. He has to gradually entrust the essence of his company to your efforts to document policies, procedures, systems and controls. And your job, as it’s shaping up, is like a cruise director that can organize all the right get-togethers, but can’t make anyone come to them.

Deep down, you know this. Trying to fill your dad’s shoes is not the way to go. And you couldn’t do it anyway, because you’re not your dad and not one of the employees would pretend that you were.

But first things first. You sense that your first customer for this change is your dad and other family currently with hands-on control of the closely held business. You’re going to have to sell it to them on the idea of replacing personalities with process.

So, how do you sell something to your father that he never embraced? And why would employees accept any policy or process so long as your dad is still there at the center of everything? They can always just ask him, right?

There is no easy answer to this. Clearly it’s a journey of small steps for everyone. Your job will be twofold: helping employees develop and adopt policies, processes and controls that will govern their work lives; and coaxing your dad to encourage decisions to be made by consulting policies instead of him. Work with employees to develop policies and controls and they will support them. Then work with your dad to accept policies, procedures and controls as codification of his way of doing things that have made the company successful.

This is the hard work of business succession planning. You face the task of transplanting your dad’s way of doing things into the people and processes of the company. Bit by bit, the man can be separated from the company, and the company will continue to function successfully.

What Business Buyers Are Looking For

Buyers will look to see if the founder is separable from the business. Replacing the key man with policies, procedures and systems transforms the company in the eyes of potential buyers into an asset that can sustain and grow without the founder. Will sales dry up or key know-how vanish when the founder clears out of the corner office? If they will, the company can’t compete in the buyer’s mind with other buying opportunities where the intangible assets of the company have been corporatized into the documentation, policies, procedures and systems of a company.

How will buyers know? In their due diligence, buyers will look to see if the company has up-to-date procedure manuals. They will look at HR and accounting compliance and evaluate the company’s vulnerability to legal trouble should allegations of harassment, fraud or abuse arise. What is the risk that management attention and capital will be tied up in law suits, allowing competitors to pull ahead? Buyers will talk to employees and observe how decisions are made. They will observe the operation and size up the viability of the company without the founder.

Your Leadership Style Should Build on Your Strengths

If our Baby-Boomer parents counted on hard work to get ahead, we Millennials have learned that they also have to work smarter. They have learned that they don’t have to make all the decisions. Millenials built careers on the leverage of teams, systems and controls, and relied less on a personal hard-driving style like their parents did. As the next in line, your leadership style nurtures continuous improvement: You expect those closest to the work to make decisions and act on them. You have more patience for mistakes than inaction or constant checking-in with the boss. Examine your leadership style, and how you lead differently than your dad. Work to your strengths.

The Management Layer - a Mirror for Dad’s Management Style

Of course leading a transition will take some time. Will you have enough? As if you were a buyer sizing up the compnay, you should also size up the risk of challenge.

One indicator of how serious dad is about ceding management of the company, is the approach taken by his management staff in place today. They have had many years to develop patterns of work and action in response to your dad’s leadership style. Is the management independent-minded? Are they making real decisions, and acting on them? Or do they complain and shrug their shoulders about what they would like to do, but cite dad’s lack of support. Do they get in line with dad as quickly as possible?

Is the management staff fundamentally weak and simply implementing whatever dad wants, or is the management commitment there for it to work? Are they proactive and focused on meaningful change? Does every decision have to go through dad, or are there policies and procedures in place to govern decision making? In short, do managers manage or do they react to dad?

So above, in broad terms, we have laid out the challenge — can you perform the transplant surgery without cutting out the heart of the business? But we have not gotten into specifics about what you do in HR, what you do in accounting, in procurement, sales, marketing, etc. Describing development of policies and procedures in each function of the business will be addressed in a series of future articles, one per function.

Jerry Sweas contributed to this article jerry.sweas@comcast.net.

Dateline: Utopia, Somewhere in the Near Future

In Utopia, we define our business processes as we develop them.  We plan for the inevitable by formalizing many of our processes.  Granted, there are some processes that are so simple, it doesn’t make sense to document them.  Where it makes sense, we document our processes – we write procedures – so that, among other things, we (a) have a baseline for improving them and (b) can train people, should the need arise.

However, we don’t adhere to our procedures so rigidly that we’re unprepared for change.  We review our processes routinely – as we’re in the midst of them, and on a periodic basis – so we know if we’re getting the results we want. This way, we also know if we’re making our customers happy, if we’re staying abreast or ahead of the competition, and if we’re taking advantage of every opportunity.

Some time ago, we were fortunate enough to learn from some of our mistakes.  One of those mistakes which almost cost us dearly was writing our procedures without knowing where we were coming from or where we were headed.  Basically, we were told to document key processes in order to be compliant, so we jumped in to document those processes without a plan.

We didn’t take a look at the big picture, at first.  We didn’t understand that we were starting a continuous journey somewhere in the middle of it.  It was like being set down in uncharted territory without a plan, let alone the proper provisions and tools.

After several unsuccessful attempts to make deadlines and meet other ill-defined or undefined requirements, we came to the realization that we were starting our journey in the middle without a clear view of where we came from, where we were headed, or how we would get there.  Without a clearly defined project plan, our process journey was always arriving at the same destination: Failure.

How many times have you had to document a process and wished you had a map showing “You Are Here”?  Or, wished you’d started with a better plan?

The swim lane and document maps that we blogged about recently are useful for describing processes.  The swim lane map showed us who was responsible for what: Dad was driving, Mom was navigating, and in this scenario our kids were the customers.

Information flow was better captured in the document map.  It identified the documents handed off at each step of the process.  It also showed when status or other information was not in document form, but was spoken.

Swim lane maps and document maps are descriptive rather than prescriptive: we use them to communicate what is happening today, not what we’d like to happen or what should be taking place.  To change the existing process, we need to map the activities at each step and critique them for the value they add to the process.  One way we can do this is with an activity map.

When It Comes to Making Changes, Start with the Small Things

Activity maps and “value stream” maps help us capture what is happening in the workplace (or, in my example, the family minivan).  Activity maps are great for identifying areas ripe for streamlining or eliminating — if the activity/process doesn’t add value, it probably doesn’t belong.

Using my family vacation example, I could call a family meeting, tape our swim lane and document maps to the dining room wall, and engage my wife and kids in a conversation about the process of driving to summer camp.  I would ask them for their opinions and insights about each process step, to identify opportunities for improvement.  (How popular this would make me!)  

We dig past generalities down to the tasks that we each perform.  We look at each task and determine what’s not necessary – see if we can skip or eliminate steps.  Would we get there faster?  Would we each let go of “non-value-added” activities?  I don’t know, but I know that an activity map could help us get the issues onto the dining room table. (Selling our analysis, conclusions, and the resulting change might require a rendered map, which I’ll cover in upcoming articles and blog posts.)

Here’s the driving process presented in an activity map:

The first row is the process step as appears in the swim lane and document maps for the “Driving” process. Second row is a tally of activities per step and the number of lean value-added steps. Next row is color-coded by responsible party. Green activities are value-added. Red represents waiting or other waste. All other activities (in white) should be reviewed for their necessity and potential improvement.

Green steps transform the product (travel) that the customer (passenger) is receiving. These steps add real or perceived value to the product, in the customer’s eyes, so they’re called “value-added” steps.  The green steps help transform the end product, whether or not the customer is aware of the transformation. 

The “check/fix car” activity (at the top of the “Drive” column) is an example.  Preventive maintenance in advance of the trip assures my customers a trouble-free trip, though they may not be informed of the oil change, tire rotation, fluid check, etc.  Other green steps – loading/unloading luggage, occasional status reports, driving — are readily apparent to my customers.

Few would argue that waiting doesn’t add value.  Any waiting “activity” (shaded in red) is a non-value-added step.  Today — “Star Trek” notwithstanding — it is impossible to arrive instantly at a destination.  Ideally, we would look to cutting “wait time”, but in our scenario it’s unavoidable.  (Dad could go faster, but the minivan and the law enforcement authorities have their limits.)  We note that some wait time is unavoidable in this case, and we proceed with the analysis.

The remaining activities (in white) will lead to further discussion and analysis.  We acknowledge that these individual activities are not what the customers are buying — they’re buying the whole experience.  But we can’t call all of them waste — some of them are necessary.

Can We Cut Activities?

In hindsight, the activity “Plan alternate route in case of trouble” could be considered waste.  We don’t know that we will run into slowdowns, detours, open drawbridges, or inaccuracies on the roadmap/TripTik.  You could cut that activity.

But we ran into all those problems.  Good thing we didn’t cut the activity. However, the activity is not value-added to my customers.  I could tout my wife’s exceptional planning skills and convert a non-value-added activity to a value-added one, in my customer’s opinion.  If road delays were rare or unlikely, I might argue for cutting that activity.  Either way, the Activity Map is the tool that helps make the conversation meaningful.

I thought a local route near Saugatuck, MI, would save us few miles and some time. I learned that you can’t always get there from here in coastal Michigan. Good thing that my navigator had a backup plan.