Management & Leadership lessons from my dog – Part II: Recruiting the Boss

May 14, 2009

This is the second article from my dog Slider. This time she shares her views on how to recruit a proper boss.

Dear readers,

At first, I thought that I would deal with recruiting the boss in a similar way as bosses recruit their employees: by asking for a resume.

Unfortunately, this appears rather useless very quickly, as all the candidates refer to the same great things about themselves. They have had experience with or owned dogs in the past and they can walk on two legs! For how impressive their skills and experience are, for a simple dog like me, this is not convincing, and that by a long shot. It does not tell me much about their qualities as bosses and from my experience, I am more stable on four legs than on two, so that particular skill might even be overrated; and I, too, can do some impressive tricks.

Leading is not a givenSo, let’s forget the resume, as it not giving me the right information and let’s try to see if a personality test would work better. In my doggy world, we establish who the leader of the pack is in a very simple and primal way: the more dominant one leads. Could it be any simpler than that? Although we need to take a slightly different approach with people, establishing a relationship dog-boss follow a rather similar process. We will accept you as the boss only if you are able to earn our respect. Look around and you will see all those dog owners who failed to get to that point: they simply do not have us under control. We run away, we pull in a different direction than the one they want us to go to, or we are aggressive. In short, we behave badly. Well, that is from the boss’s perspective. For us there is another truth: we behave that way because we have no boss. There is no one we respect enough to follow, so we set our own course. Does that sound familiar to you humans? Interesting, isn’t it? We do not have the ability to do politics; neither do we have any awareness of our pedigree. Therefore, respect is about all we have. Also, remember that you do not spell respect F-E-A-R. If you lead us by fear, we probably follow because we prefer to avoid the consequences, but we will not like you, we will not respect you, and when the time is right, we will turn against you; unless we just become dysfunctional and neurotic, as I have sometimes seen.

Of course, there are those who think that buying us is enough to make them our bosses. No, it just makes them our owners. We do not feel too much for hostile takeovers. The merger and acquisition process needs to happen in a firm and effective manner. Of course, some bosses deal with the problem by getting rid of the “difficult” ones among us, but they probably will experience a similar situation with our replacements anyway.

To conclude, I will sum up like this. In order to be our boss, you must demonstrate that you indeed have the ability to lead the pack, which you only will do effectively by earning our respect. Being a two-legged creature or repeating us that you are the boss is simply not enough. Once you have earned our loyalty, you will be amazed by how much you will get in return!

DSCN1492

Next time, I will return with Part III: Leading the Pack.

(The opinions expressed in this article are those of the dog only, and do not necessarily reflect those of the Happy Future Group Consulting Ltd, although they usually do.)

Copyright 2009 The Happy Future Group Consulting Ltd.

Advertisements

Intelligent growth

April 4, 2009

Everybody in the business community will tell you: you must grow your business.
But what does this mean exactly? What do you grow? How do you grow?
For having seen the good, the bad and the ugly of growth, these questions are quite important.
My answer is: Grow your business intelligently! And of course, all business leaders do exactly this, don’t they?
Well…
So let’s get back to the basic questions first!

What to grow?
This is the tricky area.
The risk for a successful business is to think that growth will be linear. In other words, if you produce x units and make a profit of y, by growing to 2x you will make 2y profit. Sometimes you do, sometimes you don’t.
Good business people want to make money and what you should grow is your profit. There is no point of selling more if you do not make more profit, as that means that you do not make money on the extra sales. Then, why invest and hire and complicate your business if you do not have any marginal advantage in doing so? This sounds obvious and yet the number of companies that do exactly the wrong thing is amazing. Volume matters within certain limits but margin must come first.

How do you grow?
The first thing you need to know is how big is the market, who are your competitors, what do they plan to do and how do you compare with them. If they are stronger than you , maybe you should keep a low profile and not go into a frontal confrontation with them.
If you are the stronger player, as most CEO’s like to think of their companies, realize that this does not make you invincible.
The key is a sound and realistic business plan.
Start with the sales plan: how much more can you sell for a profit in the market? Then you have an idea about the required volume of your operations.
Then review all the costs implications that the new situation will create and look at the bottom line. Here the key is to not do any wishful thinking or to make the numbers match because your boss demanded some bold performance from you. A helpful rule of thumb is that you probably will sell only half of the extra volume for the profit you think you can make, and the extra costs will be double of what you expect. Enter these revised numbers in your P&L budget and see what comes out.
Base your assumptions on ambitious but realistic data, and while having a dream is nice, do not let you lead by vain objectives. It is nice to be the largest, only if it makes your company the richest, too. Market share is nice, but it is not an indicator of success, never forget that the force that will drive your ability to get the price you want is the law of offer and demand. Even if you had a market share of 90% but had grown the business beyond what the market can absorb, you will not be able to keep the prices high, and depending on the elasticity for your product, you can very well end up selling at a loss. Always be market-driven!
There is nothing wrong with being conservative. There is much wrong in having your organization taking too many risks.
Another key point in your growth plan is the phasing. You need a longer term view on where you want to be and set yearly goals for your growth plan. Be aware that you can go only one step at a time and that you cannot skip steps. Like with building a house, you start with the foundations, then build the floors one after another, and you do not build floor#2 before you have finished floor#1.
And finally, you have a choice of either growing organically or acquiring another company (see my previous article on M&A).

Remember that the most important for a business is to keep existing, and growth is only one of the ways to achieve this.

Copyright 2009 The Happy Future Group Consulting Ltd.


Mergers & Acquisitions: Buy wisely and manage efficiently!

April 4, 2009

Your business is successful and the next step for growth is to buy other businesses. This is a great opportunity for your company to get to the next level, but be aware that an acquisition can be risky. About 6 out of 10 acquisitions fail to deliver the expected results.

Buy wisely!

Do not rush and do your due diligence to know what you are buying, what the value is of the company you are interested in. Know about the history of the company, how many times it has changed owners and the reasons why.
A cheap company is not necessarily a good deal. If the current owner is selling at a discount, he must have a good reason and you’d better find out.
The best takeovers are acquisitions of well-run companies with a good track record. They have the least amount of potential trouble entering your business and their staff have a positive attitude. Only drawback for the short-term for you is that such good businesses are not cheap. However the return on the investment is likely to be quite good. Poorly performing companies sold cheaply, on the contrary… Should you choose to go for such wrecks, make sure you know how to fix up a business and first of all, get rid of all the managers that have brought that company in its current state, they only would undermine your company.

Manage efficiently!

Once, you have bought your takeover target, make sure things go very fast.
Although you might have not yet decided who should get which position in the new company, you must have already decided how the final organization chart should look like. Move toward this structure as quickly as possible, but do not rush into that either. Make sure you know the potential of all the staff you will now have. Do not lose talents, but find ways of making a good use of it; this is easier than having to go look for them again in the future as they might not be available anymore.
The key for a successful merger is intensive communication, a very hands-on and practical approach. Tell everyone what your vision is, how you see it getting executed and be open to challenging remarks, as there will be many of them. Intensive communication prevents insecurity, gossip and politics. On this last point, have a zero tolerance policy: do not allow politics of any kind, especially when you risk to have a poisonous conflict between newcomers and existing employees from your original company.
Do not spend much time on philosophical and intellectual activities about company cultures, the theory of mergers, hollow slogans such as “mergers of equals”. You need the right structure with position filled by the right people to execute the strategy and that is all.
When you hire new people, you do not waste time telling them about the theory of job hunting or treat them with false compassion. You just do it.
If you have to figure out the strategy after the merger, clearly you bought without a plan. Remember that the failure of preparation is the preparation of failure.
Good luck with your next acquisition!

Copyright 2009 The Happy Future Group Consulting Ltd.