Make Effective Decisions

Effective executives do not focus on making a great many decisions but rather try to make key decisions well founded. They concentrate on what is important. They try to find the constants in a situation, to think through what is strategic. They want to know what the decision is all about and what the underlying realities are which it has to satisfy.



Here are a few steps to consider to improve decision making for the organization.

1. Classify the Problem
Is the issue unique, exceptional or generic? Or is it the first instance of a potentially recurring situation. A fundamental issue may generate a decision process different from a single stray event.

2. Define the Problem
What is this all about?” “What is pertinent here?” “What is the key to this situation?” Questions such as these are familiar. But only the truly effective decision makers are aware that the danger in this step is not the wrong definition; it is the plausible but incomplete understanding of the facts to consider.

3. Make the Right Decision
The effective executive has to start out with what is “right” rather than what is acceptable precisely because a compromise is often necessary in the end. But if what will satisfy the objective to be decided is not clear, the decision maker cannot distinguish between the right compromise and the wrong compromise. There has to be certainty in what the objective is and goal to be accomplished.

4. Provide an Action plan to execute the decision.
What does the action commitment have to be? Who has to know about it? A decision will not become effective unless the action commitments have been built into it from the start. In fact, no decision has been made unless carrying it out in specific steps has become someone’s work assignment and responsibility. Until then, it is only a good intention.

These are but a few considerations that I hope help a business structure strong, positive decisions to improve operations.

Let me have your thoughts: gerry@polarisgroupmc.com

Let’s Increase the Value of our business

Most businesses with under $1 million in revenue (which is most businesses) sell at a very small multiple of earnings when their owners decide it's time. Typically they get two or three times their pre-tax profit, if they're lucky. How can you get more juice out the company you've spent years developing?




Here are a few ideas that may help grow that important valuation.

1. Recurring revenue: demonstrate that your customers come back to purchase regularly and you'll drive up the value of your business because buyers will have confidence your sales will continue long into the future.

2. Revenue growth rate: acquirers will look at your top line revenue growth and project how large your business will grow in the future. Revenue growth rate may be even more important than profit growth for driving value. Buyers know how to squeeze margin to increase profitability but it is difficult to replicate the formula you have that makes someone want to buy your product.

3. Positive cash flow: if your company takes in money before it has to spend it, buyers will pay more for your business. Acquirers look at opportunities by measuring the return they'll get on the money they need to invest. If your company generates cash, they will not have to put much of their own into funding your day-to-day operations. The less cash they inject, the better the potential return on their investment.

4. Succession: You may want to consider firming up plans for a successor to your leadership position. Having a second-in-command will help you show the business can continue on successfully without you. If you can't afford an entire management team, at least find and groom your right hand person.

5. Differentiate: you'll get a higher multiple for your business if your product or service is truly unique in the market. Acquirers will graft your product onto their distribution channels and estimate just how big your company could be in their hands. That only works if you have a truly different product or service.

I hope these few tips provide some insight into steps you may take to present a positive opportunity as you reach a stage where you may want to move on to newer challenges.

Business Management

Challenge Employees for Growth

Managers should never manipulate employees to attain a certain level of performance and the challenge is knowing how to ethically motivate and encourage behavior that produces the results any company hopes to achieve.




Here are a few ideas to help employees perform to their highest potential.

1. Why
Employees need to know why the work needs to be completed, what the goal is, and how they can contribute. Management should share their vision and how each employee contributes to the overall success.

2. Develop
Opportunities to advance usually correlate with improved performance. Allowing employees to determine how they can improve their job and build challenges for the future should be encouraged. This can raise overall standards.

3. Clarify compensation
Performance increases when employees understand their work is compensated commensurate with contributions made to the business. Communicate with employees so they understand how performance is measured and rewarded.

4. Seek Input
Management does not always have to develop the answers. If you enlist support from employees that will generate increased enthusiasm and commitment.

5. Build employee confidence and loyalty
Encourage positive communication among all employees and eliminate where possible negative criticism of staff and their work. Develop goals that challenge staff without creating unreasonable demands and trust employees to participate in goal setting. If employees own the objectives they will gain greater feelings of achievement and this buy-in also develops stronger loyalty to the firm.

6. Include opportunities to learn, fail, and grow.
Employees are motivated by learning. Sometimes this involves taking risks and perhaps failing. This can be a positive experience for the business and the employee if the lesson learned helps move the business forward in an atmosphere where employees are encourage to continue efforts to improve.
These are but a few opportunities to provide a work environment that can challenge employees to play an increasingly important role in growing the business. Take the opportunity to grow the business and employees together.

Let me know your thoughts: gerry@polarisgroupmc.com

Managing Change

We face change all the time, driven both by internal or external influences. Growth, innovation, redundancy, outsourcing, relocation, diversification and competition all can force change in a business.


In is important to make the necessary changes before they are forced upon you – minimising change that can impact on profitability and maximising change that creates opportunities. Most people, in particular employees, are uncomfortable with change because it interferes with their routine and exposes them to the unfamiliar.

Drive Change
It’s better to drive change than let change control your business. It’s also important to identify any need for change early on. Think ahead to where your business needs to be in one, three and five years’ time. What do you need to do to get there?

Prioritize
Decide which changes are most important and focus on the changes with the biggest potential benefits – not the easiest ones to implement.
Aim for continual smaller changes rather than a few large ones. Large changes are harder to digest and can interfere with one another, while small-scale changes are easier to manage.

Network
Change usually involves going into unknown territory, but others will have been there before you, so seek their input and advice. Talk to business associates and learn from the experience of people who have made similar changes.

Communicate
Whatever the area of change, you will need the co-operation of your employees. However, resistance from employees is often the biggest stumbling block to successful.  The key to managing change successfully is to keep staff informed. Start communicating the change as early as possible, so people have time to come to terms with it.

Even small changes can backfire if they’re not handled sensitively. Consult with those affected before implementing any changes. Those involved may be able to suggest alternatives that deliver the same results more effectively or more efficiently.

Remember Life in Business is about change. Growth is optional. Choose wisely.

I hope these thoughts are of value as you move your organization ahead through change.

Please let me know your thoughts. gerry@polarisgroupmc.com

Business Management

Is Time Management an Issue?

Do you feel the need to be more organized and/or more productive? Do you spend your day in a frenzy of activity and then wonder why you haven't accomplished much?

Time management skills are especially important in small business where owners often handle many responsibilities.

Here are a few tips to increase productivity and to stay calm and cool throughout the day.

1. Manage
No matter how organized you are there are only 24 hours every day. Focus on managing yourself and what you do with that time.

2. Time wasters.
It is easy to be side tracked and waste time “surfing the net”, reading emails, interruptions. Track your personal time so you can see where the focus of efforts are and how to improve time usage.

3. Plan.
Develop a plan to focus on changing behavior not changing time. Start with eliminating personal time wasters like taking personal phone calls at work. This will help improve productivity and reduce stress.

4. Prioritize.
Start the day with prioritizing tasks and benchmarking performance. If you have a list of 20 items, how many must be done that day?

5. Delegate.
Every effort should be made to have others share the work load. A review of activity will help determine what can be delegated or outsourced and allow you to focus on priorities.

Remember, time is one of the resources business owners have that is scarce, cannot be replaced once spent, and it cannot be borrowed or purchased. Manage it judiciously.

Business Management

Do’s and Don’ts for Managers

It has often been said that employees rarely quit companies. Instead, employees quit their managers or supervisors by leaving the company. Increasing positive and reducing negative managerial behavior will go a long way towards improving employee engagement.
When your talented employees are engaged, they are able to perform better and improve your business. Here are some Do’s and Don’t’s to consider in order to get managers and supervisors started in focusing on ways to and improve manager’s performance.

1.  DO what you say you are going to do when you say you are going to do it.
There is no better way to communicate the message that you are accountable for your promises and that everyone in your company should be accountable as well.

2. DO be responsive (return phone calls, emails).
As a manager, your team can be considered to be your customer.
You want your sales team to punctually respond back to customer requests, so you should do the same.

3. DO admit your mistakes ...
...and take the blame for failures.

4. DO recognize your team.
"You can never underestimate the power of simple recognition for a job well done."

5. DO ask and listen.
"The manager of the future will know how to ask rather than how to tell." (Peter Drucker)

6. DO smile and laugh.
Have some fun. But, be genuine; programmed fun and faked laughter is worse than doing nothing.
When appropriate, laugh at yourself; it will humanize you.

At the same time………
1. DON'T get angry.
"Getting angry is easy. Anyone can do that. Anger does not belong in your managerial kit bag.

2. DON'T be cold, distant, rude or unfriendly.
Especially in difficult times, employees take cues from their immediate supervisors and need to hear from them. The team will judge managers by their action, moods, and behaviors, not by their intent.

3. DON'T send mixed messages to employees so that they never know where you stand.
Keep your message simple, focused and prioritized. Too many messages and initiatives just confuse and alienate people.

4. DON'T BS your team.
This includes saying things that you don't believe in. This includes hiding information and just plain lying. By the time each of us is in our early 20′s, we have all developed very well-tuned BS detectors
.
5. DON'T act more concerned about your own welfare than anything else.
Your success will come through the success of your team.
"Self-serving detectors" are also very well-tuned in most employees.

6. DON'T avoid taking responsibility for your actions.
You are the boss. As such, you are accountable and the buck stops with the boss. You are trying to develop accountability throughout your company. So, lead by example.

These are just a few ideas to help structure a positive working environment. I hope you share these with your team. Let me know what you think. gerry@polarisgroupmc.com

Know your Competition

In order to compete effectively and outperform competition you need to know their strengths and weaknesses. Your product or service has to be unique or stand out against prime competitors.
To test your competitive intelligence; ask yourself:







1. Product mix
What products do you offer that competitors don’t offer? Is there a market void you can fill?

2. Training
Are your employees as well trained to service customers as your competitor? Can your employees answer questions about your competitor’s products? Can you identify competitive weaknesses? Are you vulnerable in any way?

3. Promotion
Are you familiar with competitive messages? Check their websites, brochures and promotion material to understand their positioning and how it affects you. Does your competition spend more advertising and promotion that you do? How does that affect how you compete?

4. Supply lines
Do you know your competitors customers, suppliers and distributors? You need to know how strong their relationships are to know how you can compete most effectively.

Understanding your competition not only allows you to understand where you compete best but may offer the opportunity to collaborate in areas in which you do not directly compete. A competitor may be willing to refer customers to you if you offer a particularly unique product or service. This can only happen if you know your competition and develop a relationship of trust between you.
In the end use this knowledge to strengthen your own position and build your strategy and a place in the market.