How do you Manage Growth?

When managing growth there are critical factors to consider.



1. Plan. Without a plan success may be a challenge. Planning will include a regular review of all operations, competition, financial results, and new technologies.
2. Adapt. Keep flexibility in the organization to be positioned to take advantage of strategic growth opportunities.
3. Challenge. Owners involved in managing growth need to know what questions to ask, when and how. Motivate managers to have an “entrepreneurial “approach and reward those who enhance growth.
4. Share. Management must communicate the growth vision so team members understand the role, direction and philosophy of the business.
These are some elements of managing growth and there are others depending on the nature and size of the business. Building a solid foundation and showing leadership are key responsibilities for owners to assume as they provide the resources and direction needed to implement changes as the business grows.
These are a few of my thought. Please let me know what you think.
Gerry@polarisgroupmc.com

Business Leadership

How Do your Business Leadership Skills Measure Up?

Successful businesses, almost by definition, are led by individuals with strong leadership skills. Among strong leaders you will find values that permit them to convince others that their vision is worth following. Traits found include:

1.     Clear communications

A clear vision is essential but communication of that vision is paramount. Providing employees with a clear plan gets everybody working on the same page. Poor communication may lead to missed opportunities.

2.     Delegate for Growth

Don’t let ego get in the way of delegating and allowing employees to develop and grow. The leader does not need nor should the leader want to “do it all”. Delegating, sharing, allowing contributions from others contributes to growth and excitement that often generates new ideas. 

3.     Think Strategically

A good idea and boundless energy is not enough to succeed. Leaders develop strong plans that outline where you expect the business to be in 5 years and then work with the team to execute the plan. 

 

4.     Hire and Retain top Talent

Strong leaders have a talented management team surrounding them and when treated fairly they will remain loyal. Continuity of management is an important element to consistent growth and strong leaders seek top talent for key management roles.

How do you measure up? Let me know your thoughts.

Gerry@polarisgroupmc.com

Implementing organizational Change

Implementing organizational change effectively requires changing employees attitudes and behavior from a current state to a new level of behavior with a minimum of cost in terms of performance and morale.
Here a few ideas on implementation to mitigate disruption to the business.
1. Understand the issues. Identify the problems, prioritize and deal with the most important, and clearly define the solution or change needed.

2. Communicate. Conveying the vision of the intended structure to all employees is critical. Make the entire team part of the process to optimize success. A clearly structured plan must be developed to ensure employees see the intended path forward. Maintain stability and retain the overall mission or key personnel to reduce anxiety within the organization.

3. Implement carefully. Manage the transition by allocating appropriate resources and appoint a key person with responsibility for the change process. Key managers must lead by sharing the goals and vision and they must serve as role models. Take small steps initially to achieve success and set the stage for larger more important steps in the plan.
Ultimately as an organization grows and matures change becomes necessary. The methodology used by the organization to implement the change will determine the level of disruption to employees and to productivity.
Plan carefully, choose the path ahead wisely.

Those are my thoughts; I look forward to your comments.
Gerry@polarisgroupmc.com

Business Management

Creating value in the business

Value of a business is not just the price paid to purchase it or what it might sell for. Different values can be created depending on operational factors.
Here are a few factors that can influence the value of your business whether you are selling or not.


1. Performance
Value will be more dependent on future projections than past performance. History helps set the base but future plans are of more value. Cash flow is the most important factor. Revenue is secondary but a company with higher cash flow is more highly valued. Cash Flow drives value more than Profits.
Other factors affecting performance will include customer loyalty, brand strengths, industry trends, and capacity of the facility used.
2. Leverage
Value of the business can be influenced by financial leverage that can be generated. A business with a high asset base may have greater borrowing capacity or credit capacity.  This will enhance value as it may facilitate financing growth. Assets of the business are an important factor in determining value. State of the art equipment is important as it puts the position of a new buyer not having to further invest upon acquisition and at the same time it allows the seller to expect a higher selling price.
3. ROI
A buyer looks at value in the context of expected Return on Investment. The higher the expected ROI, the lower the business has value. A number of conditions can influence the expected ROI including strength of the balance sheet and financial history, strength of the management team, quality of the product line and distribution, and property values.

4. Exit Strategy
Value of the business will be influenced by the circumstances of the intended sale. If urgency is involved because of death, illness or pending retirement of the owner the value could be depressed. If a longer time horizon is in play and the owner can play a role in financing the purchase through a vendor take back there me be a positive influence on value.
These are some of my thoughts on factors influencing business value.

Please let me know your comments.
Gerry@polarisgroupmc.com

Management retention

 Are you retaining key managers?

Many business owners talk about hiring top talent and retaining them as key components to build the business with. Nevertheless, the process for training, developing and retaining a strong senior management team seems often elusive.

Why do key managers leave and cause owners to restart the expensive talent search for replacements?

Here are a number of factors that may cause management turnover.

·       Lack of challenge

It is important to ensure you gain commitment from senior managers and one way is to ensure their aspirations are aligned with corporate goals. Challenge senior managers so they don’t slip into a boring job routine.

·       Skill development

Development is a continuing process and there should always be ways to use a manager’s creativity to ensure additional growth and development occurs. If you limit growth the manager is only more encouraged to seek challenges elsewhere.

·       Leadership

As owner or president, do you lead? If owners fail to provide leadership and that includes listening so other managers have a voice to express ideas, then strong managers will leave for a place where their talent is more appreciated.

·       Recognition – Rewards

The best organizations don’t take credit for success they give credit to key people and then reward them for special contributions. Failing to recognize this is only a step away from asking a manager to leave.

Successful businesses spend time developing, training, and recognizing key employees and the bi-product is that they are less required to spend time and money acquiring new talent. Turnover is expensive and counter-productive to growing the business.

 Those are my thoughts. Yours?

Business Start-up

Watch for Start-up Hazards

 Are you planning to start a new business?  There are many hazards that might be faced and avoiding these can help improve the chances of success.

Here a few hazards new entrepreneurs should try to avoid.

1. Zero Capital investment

This may seem obvious but it can overcome easily. Don’t open for business until you can prove customer validation of your concept and see real potential traction. Even if outside financing can be obtained, without personal skin in the game there may be less commitment. 

2. Indecision

Information overload can cause “analysis paralysis”. There is a finite number of ways to look at issues so make a decision a get on with the business. There is no perfect answer and many ways to move forward so don’t procrastinate.

3. Fear of Failing

It is natural to have some fear that the business will not succeed and certainly problems will arise and challenge your business acumen. However, if the concept is strong and validated you should not let fear of failing stop you from trying to live your dream.

4. Isolation - Disorganization

Don’t be afraid to admit when you need help. The business will be stronger and more successful if you take advantage of advisors and team members. Relationships should be built continuously to enhance the health of the business.

5. Cash flow shortage

Avoiding the initial investment issues does not prevent running out of cash later. It is essential for owners to know the numbers. You cannot avoid balance sheets, income statements and cash flow projections and achieve success easily. Cash should be held and parted with reluctantly. Make sure you understand where new cash reserves can be built before spending existing reserves.

Well these are some hazards you may face in starting a business. There are others but avoiding these may help improve you chances of a successful start in business. I hope this helps you get underway. Let me know.

gerry@polarisgroupmc.com

Personnel Management

Should I Hire an Employees or Contract Service?

In today’s economy, business is often faced with the question of filling manpower needs by hiring an employees or using outside contract services. There are benefits with each option and this article should provide insight into some of the benefits of each approach.

Hiring employees:

The primary benefit may be with control over the employee. The business has the right to hire/fire, determine salary and working conditions. Generally with employees there is a higher level of commitment to the organization and a desire to contribute and help the business grow over the longer term.

Employees will be seen to be more a part of the team and individuals work harder at establishing strong inter-personal relationships with other employees. Loyalty and commitment increase.

In smaller organizations, employees often fill multiple roles. This increases learning opportunities and can increase productivity.

Contracting for service

This approach is simpler and may be less expensive. The business does not have to provide benefits so there is an immediate and potentially long term savings. Overhead costs are reduced.

Management of the process is simplified, the employer does not have to withhold income taxes, or pay a share of CPP or EI.

There is a tax advantage that accrues to the employer as a result of the potential tax deduction for contract services.

There is greater flexibility in controlling the term of service.

These are a few of the issues to consider. You may have other thoughts to share. Please let me know.

gerry@polarisgroupmc.com