What are the most successful businesses?  What is that they do that makes them unique?  How are they able to ride out a crisis after another crisis?

The first answer most likely is… they offer great products and services. I’d agree with that.  The second answer is… they compete in a unique market space or after a specific niche.  I’d say that is part of the answer.  The third answer is… they execute their plans to perfection.   Hmmm, okay I’d give you that one as well.  Here is a fourth answer:  These businesses have built up a tremendous amount of wealth in their relationship accounts.

What Is A Relationship Account

How Are Your Deposits?

It is the trust your customers and everyone outside your organization has in you, your brand, and your business. This account is built slowly over time and cannot be rebuilt on a dime.  The relationship account represents your integrity, your outward perceptions, and your value to the community.  A relationship account lets you get the benefit of the doubt in troubled times.

…value is delivered free through service, information, and time.

A relationship account is one of the most valuable tools for any business – heck any individual.  It begins to be built up over time through the consistent offerings of valuable products, services, and information to customers.  What compounds the interest on relationship deposits is the continuing delivery of value to anyone that passes by.  This has traditionally taken place through volunteer activities, participating social gatherings, and being involved in the community.  That value is delivered free through service, information, and time.  Now with the interconnectedness of social media you and your business can provide more value to a larger audience.  This will bring exponential deposits to your relationship account.

How Do You Build Up Your Relationship Account

Your interactions must be sincere.

You make every communication you exchange, whether it be in person or online, about your audience and not yourself.  You provide valuable information and resources that

How Much Is Your Account Worth?

your audience can use immediately.  You listen to your audience, you engage them in a meaningful way, and you thank them for their time.  Your interactions must be sincere.  You will have to be consistent in treating each member of your audience as the individuals they are. You will build a foundation of authority and credibility.

How Do You Use Your Relationship Account

It depends on the situation but it comes down to two types of withdraws from the account:

1. One you choose to make by asking for business/favor
2. One taken by the general community during a time of crisis

The first withdraw you get to choose when to use it.  It can be that you ask your customers or the general audience to follow you, purchase a product/service, or stand-up for you and your business.  If you have built up enough capital in your relationship account your audience will help you cash in.  If you have not, they will walk away and any good will you had tried to build up will quickly vanish.

The second withdraw you have no control over whatsoever.  Your audience and the general public control it during a time of crisis.  If you have worked diligently, sincerely, and openly to build up your relationship account then withdraws will be minimal keeping your reputation in good standing.  Your audience and your customers will rally around you, your brand, and your business.  If you have not spent the time to build up your account, they will be at the barricades with the pitchforks and torches.

Building a relationship account takes and time.  It is a process that is continual and must always be maintained.  Each business plan, marketing plan, and sales plan must take your relationship account in mind.  They must work to build deposits into your account.

Do you know what your relationship account status is?  How do you build up your account?

About the author:

Erroin A. Martin is a Business Advocate with the Von Gehr Consulting Group, LLC, a business coaching and consultancy provider for business owners, executives, and entrepreneurs. He has fifteen years experience working within the pharmaceutical, manufacturing, natural resources, medical devices, software, technology, business services, and agriculture industries in various levels of leadership across six continents. He has led diverse teams in sales, marketing, planning, and in the Army.  He currently coaches business leaders and physicians in the tools needed to plan for their success. Learn more about the Von Gehr Consulting Group, LLC at www.vongehrconsulting.com or call +1 203 433 8079.  You can follow him on Twitter at @Erroin

The Von Gehr Consulting Group, LLC, was founded by Erroin A. Martin to provide business coaching, business consulting, and other services to companies both large and small.  The primary goal is to have his clients be passionate about their business and reach the unachievable.

A business to survive has to have results. Typically these results are measured by the ultimate measurement: cash. The difficulty for any business in understanding this measurement is if it is a direct relation to activity or something other. Most businesses will have the belief that cash is generated solely by activity. Therefore many sales plans, business plans, and marketing plans are created around activity and not around value.

“People love chopping wood. In this activity one immediately sees results.” – Albert Einstein

Activity Is Up, But What About Profits?

At first glance any businessperson worth their salt would deride the above paragraph as being nonsense. To generate cash you have to have activity. That activity can be in the form of a sale, signature on a contract, or traffic to a particular website. The businessperson who thinks this is correct. The closing of the sale, the signing of a contract, and the decision to visit a website are all activities. The problem for the businessperson is really distinguishing if these activities are of value to the customer. Typically this is not the case when it comes to many businesses.

Let’s take, for example, the founder of Mint.com. This individual competes against Microsoft Money and Intuit’s Quicken. Both of those software platforms are major movers in the marketplace of personal finance. So what makes a web-based application like Mint.com different? Well for one, mint.com is focused around giving you “the user” quick information about your financial status. It is also designed to give you the information you need to make sound decisions for your financial future.  It is as a program providing value.  The competition to Mint.com are more focused around how long you spend on particular windows or other GUIs in their programs. The competitors to Mint.com are focused on activity and not real value to you to the consumer.

The good news is at least it’s activity driven.  The bad news is there is no value to anyone.

Still not convinced there is a difference? Well, let’s take a look at social media. In another blog post by Amber Naslund, she uses a quote from Albert Einstein. This quote states, “People love chopping wood. In this activity one immediately sees results.” The same is true when a business embraces social media. The belief of the business is that social media is activity driven platform. They tweet and get followers.  They build a fan page and get fans.  The more active you are the greater results your are going to get. This is a fallacy. Why? Well what is one of the chief complaints when it comes to social media? That people are blabbing on about their nonsensical lives. That right there is activity with no value to the consumer of the information. So if you are a business and you are going to spout out nonsensical information about your business, you are just as guilty as those individuals who comment about what their cats are doing. The good news is at least it’s activity driven.  The bad news is there is no value to anyone.

So how can you as a businessperson make sure that you do not get caught and in the activity trap?

First, make sure that any metrics being measured against the plan are value driven. This is easier said than done. Any plan, whether it is for business, sales, or marketing has to have metrics to measure its progress. Yet, a value driven metric is one that returns an exponential response from the customer. For example, take a look at Domino’s pizza in Chicago. They have a social media plan to communicate deals, promotions, and answer complaints. The metrics behind this plan is to foster a strong relationship between the franchises and their customers. The value behind the activity is a strong communication from Domino’s and a demonstration that they listen to their customers. The results are continued purchases and a strengthened relationship.

Second, avoid the temptation to award only activity. Many plans measure the activity of teams and/or individuals. For sales, it can be the number of calls a salesperson makes on customers. For marketing, it can be the number of impressions and/or responses to “calls to action” from campaigns. Both of these are important, but they are not the end goal of any business. The end goal is profits.  The reward should be given to the salesperson that generates the largest margin of profit for an organization. It should be an award to the marketing team that drives business with the least amount of cost. These are viable propositions for any business. A salesperson who can generate millions of dollars of business with one or two sales calls is more valuable than a salesperson who generates 100,000 dollars worth of business from 100 sales calls. If you measure activity then the second salesperson would be awarded over the more valuable salesperson.  Award the value not the activity.

It is difficult to balance activity and value.  The temptation of many companies is to double down on their activity.  They feel it will generate a ton of results.  The reality is that it generates more activity with more costs.  When companies get caught in this trap value becomes an afterthought.  The result is a lower profit margin and a loss of highly valued customers.

How Do Make Sure You Avoid The Activity Trap?

About the author:

Erroin A. Martin is a Business Advocate with the Von Gehr Consulting Group, LLC, a business coaching and consultancy provider for business owners, executives, and entrepreneurs. He has fifteen years experience working within the pharmaceutical, manufacturing, natural resources, medical devices, software, technology, business services, and agriculture industries in various levels of leadership across six continents. He has led diverse teams in sales, marketing, planning, and in the Army.  He currently coaches business leaders and physicians in the tools needed to plan for their success. Learn more about the Von Gehr Consulting Group, LLC at www.vongehrconsulting.com or call +1 203 433 8079.  You can follow him on Twitter at @Erroin

The Von Gehr Consulting Group, LLC, was founded by Erroin A. Martin to provide business coaching, business consulting, and other services to companies both large and small.  The primary goal is to have his clients be passionate about their business and reach the unachievable.

When you enter the planning phase – whether it is business planning, launching a product, or marketing plan – you cannot be limited.  You need to be willing to explore untried paths and find inventive ideas.  There should be no sacred cows and you  have to put blinders over the “not invented hear” crowd.  This video discusses what goes into great planning and how you need to free your mind.

Watch Free Your Mind For Planning in Educational & How-To |  View More Free Videos Online at Veoh.com

When you engage the services of a business coach you want to be assured that you are getting the best return for your investment. The financial returns are easily measured by how much you put in and how much you earn after your business coaching engagement. There are other benefits, that could be considered less tangible, that result from a business coaching relationship. These tend to be considered soft skills or soft metrics that are measured more in how you feel and how others perceive your actions.

Primary Benefits (80% positive change or higher): This is a benefit that results from virtually all coaching regardless of type or primary objectives. — International Coach Federation 2009 Study

To understand what the benefits of are coaching, you first have to understand why individuals are selecting a coach. This article will not delve deeply into why individuals choose a coach. That article has already been written. Instead think about why you or someone else seeks the services of a business coach. Typically it is because they want to change behavior, improve upon a new career transition, or build better lasting teams. Of course there are many other reasons a person will choose a business coach but for the purposes of this article will look at the benefits to the individual.

Business Coaching Is A Relationship With Many Benefits

Assume there is an executive that seeks to change their behavior. Perhaps they are too authoritarian or they tend not to listen to the needs of their employees. They hire a business coach to help them overcome or improve upon their weaknesses. During their sessions with the coach the executive discovers other areas in their professional life can use improvement. This is a benefit of the business coaching relationship. Helping the client understand that many areas are affected by the poor performance in the problem area. Through the action plans agreed upon by the coach and the client, improvements manifest themselves in those secondary areas as well as in the main problem. Unlike other services, the coach typically does not charge extra for these improvements.

During their sessions with the coach the executive discovers other areas in their professional life can use improvement.

The executive that started out seeking an improvement in the poor behavior or team relationship begins to experiences in improvements in other areas of work as well. Typically new career opportunities open up, better performance is seen at work, and their life outside of work improves too. If you have some doubt about all this, there is data to back it up.

Benefits of Business Coaching

The data behind this is very strong. In a study funded and published by the International Coach Federation that examined 2130 global responses, it was discovered that 80% of those coached saw improvement in their primary reason for being coached. What was interesting in the study is that the responders also saw benefits in other areas. Many of them while seeking professional services saw benefits in self-esteem (80%), communication skills (72%), interpersonal skills (71%), improved work performance (70%), and an overall improvement in their work/life balance (67%). The responders also noted that when it came to niche areas, such as team effectiveness and/or corporate culture improvement, the coaching resulted in benefits that could be considered unrelated to the event. Such as improvements in wellness (63%), organizations (61%), and increased career opportunities (61%). The overall conclusion of those studied was that a business coaching relationship was a holistic approach that improves teams and individuals. Unlike consulting, which focuses on a specific problem, a business coaching relationship addresses all problems related to the primary concern. This resulted in their reply that 96% of them would use a coach again if the need arises.

The take away is that coaching provides more benefits and improvements to teams and individuals. Business coaching is a service that seeks to understand the overall individual recognizing that their environment and behaviors are typically interconnected. That improvements to one skill and/or set of behaviors can have a lasting impact in other areas for individuals as well as teams.

So when you seek out a business coach for a particular item to be improved upon, you will know that you will receive many benefits in return.

About the Author

Erroin A. Martin is a Business Advocate with the Von Gehr Consulting Group, LLC, a business coaching and consultancy provider for business owners, executives, and entrepreneurs. He has fifteen years experience working within the pharmaceutical, manufacturing, natural resources, medical devices, software, technology, business services, and agriculture industries in various levels of leadership across six continents. He has led diverse teams in sales, marketing, planning, and in the Army.  He currently coaches business leaders and physicians in the tools needed to plan for their success. Learn more about the Von Gehr Consulting Group, LLC at www.vongehrconsulting.com or call +1 203 433 8079.  You can follow him on Twitter at @Erroin

The Von Gehr Consulting Group, LLC, was founded by Erroin A. Martin to provide business coaching, business consulting, and other services to companies both large and small.  The primary goal is to have his clients be passionate about their business and reach the unachievable.

This perhaps is one of the most important questions you can ask yourself when you are seeking out a business coach. The good news is that there is plenty of data out there that help you paint a full picture of who seeks a coach.

In the middle 2009 the International Coach Federation published a worldwide study on coaching. This study looked at the demographics of who chooses a coach, why they seek to coach, and what was her overall return on investment. Some of the data is quite surprising as to who chooses a coach and for what reasons.

…it is typically the individual who seeks out a coach.

First, let us look at who chooses a coach. The conventional wisdom is that a coach is hired by corporations to help their executives. The study discovered that it is typically the individual who seeks out a coach. These individuals tend to have university or postgraduate degrees. Many of them are in leadership positions, if they are not business owners themselves. When it comes to gender 65% who select a coach are women. This tends to make sense as more women have increasing management responsibilities in corporations and are the leading founders of small businesses.

Coached To The Top

Second, the conventional wisdom would tell you that a business coach is hired primarily by corporations. While in the past a corporation would hire a coach to curb the bad behaviors of a particular executive, it has now become a badge of honor for many executives to hire a business coach. The reasons for hiring this coach are many but if you come in ones stick out. The number one area for hiring a business coach is to improve their work performance of the executive or of their team. This was followed by improving conditions for career opportunities and improving business management or relationships.

The business coach is no longer seen as a stigma or a stain on a permanent record.

Looking at the data clearly demonstrates that those individuals and companies seeking on a coach realized that interpersonal or “soft” skills that are important to successfully take advantage of any business or career opportunities. Business coaching helps transfer the important fundamentals necessary to have their clients achieve these goals. Coaches are seen as delivering action plans that deliver value as opposed to an “on the couch” process. Unlike therapy or other methodologies, business coaching is a contractual relationship. Sessions last an hour in duration and the business coaching relationship is typically under six months. This appeals to the business owner and the busy executive who must juggle multiple responsibilities.

The business coach is no longer seen as a stigma or a stain on a permanent record. Establishing a business coaching relationship is seen more as a badge of honor and pride for many business owners and executives. As shown above the use of a business coach is not the exclusive province of large Fortune 500 companies. Instead it is a tool for the individual who wishes to exceed their current position and achieve new goals. It is a small business owner and individuals that are seeking a business coach.

About The Author

Erroin A. Martin is a Business Advocate with the Von Gehr Consulting Group, LLC, a business coaching and consultancy provider for business owners, executives, and entrepreneurs. He has fifteen years experience working within the pharmaceutical, manufacturing, natural resources, medical devices, software, technology, business services, and agriculture industries in various levels of leadership across six continents. He has led diverse teams in sales, marketing, planning, and in the Army. He currently coaches business leaders and physicians in the tools needed to plan for their success. Learn more about the Von Gehr Consulting Group, LLC at http://www.vongehrconsulting.com or call +1 203 433 8079 and receive a free hour of business coaching. You can follow him on twitter @Erroin.

Before you start smirking and thinking that I have gone stupid, give me at least the next three sentences to bend your ear.  I am not talking about being mean to one customer and super nice to the other.  I am not saying that you should have extreme differences in how you service your customers.  Instead you should start treat them how they want to be treated.

…give me at least the next three sentences to bend your ear.

Going Over Market Research

Companies spend large amounts of cash to segment their markets and define who their ideal customers are.  When it comes to the execution of their marketing and sales plans all that research gets thrown out the window.  Customers that are treated to exactly the same messaging costs companies millions and more in lost sales.

Treating your customers the same can and will result in leaving money on the table.

Still think I am little off?

Run this little exercise.  Take a look at your top performing customers.  Then look at the other eighty percent that make up the rest of your customer base.  Have those customers responded to your latest marketing and sales efforts?  Have they made a move in buying just like your top performers?  (I will give you a hint: the answer is most likely no.)

Companies spend large amounts of cash to segment their markets… then throw all that out the window when it comes to execution.

Now look at the marketing and sales message that you are currently using.  Your top customers are responding to it.  The rest of your customer base is not.  The messaging you are running with is the same… FOR EVERYBODY! You are losing potential sales and new fans because of it.

Male executives will take a product launched to men and just “make it pink.”

If you still think I am wrong, look at the recent article in the Wall Street Journal, about a Boston Consulting Group survey of 15,000 women and 5,000 men across 22 countries.  This survey discovered that male executives make large mistakes by treating their female customers the same as their male customers.

Bartering Prices

One of the most obnoxious points: male executives will take a product launched to men and just “make it pink.”  The executives fail to address even the basic needs of this customer segment and treat the female shopper the same as the male shopper.  (There are nine other mistakes that are made when marketing to female customers mentioned in the article.)

What can you do to avoid these mistakes and not lose potential sales?

• If you are in marketing, test your message with the different customer segments.  Pay attention to what they like and dislike.  Be willing to market to them in how they want to be marketed to.
• If you are in sales, use your pre-call planning to make sure you fully understand your customer.  Do you know where they come from and how they got where they are today?  Can you detail all their biases? Do you know how they make their decisions? Those are just a few questions, but there are many more.  If you cannot answer those three… ask your customer to tell you and then listen!
• Speaking of listening… Listen. Listen. Listen.  Your customers are telling you how they want to be treated.  They tell you in person, in social media, and by where they use their ultimate voice: their currency to purchase from your competitors.  If you still cannot figure it out, ask them and listen.

Treating your customers the same can and will result in leaving money on the table.  Get to know them, understand them, and treat them they way they want to be treated.

Still think I am nuts? I look forward to your comments!

About the author:

Erroin A. Martin is a Business Advocate with the Von Gehr Consulting Group, LLC, a business coaching and consultancy provider for business owners, executives, and entrepreneurs. He has fifteen years experience working within the pharmaceutical, manufacturing, natural resources, medical devices, software, technology, business services, and agriculture industries in various levels of leadership across six continents. He has led diverse teams in sales, marketing, planning, and in the Army.  He currently coaches business leaders and physicians in the tools needed to plan for their success. Learn more about the Von Gehr Consulting Group, LLC at www.vongehrconsulting.com or call +1 203 433 8079.  You can follow him on Twitter at @Erroin

The Von Gehr Consulting Group, LLC, was founded by Erroin A. Martin to provide business coaching, business consulting, and other services to companies both large and small.  The primary goal is to have his clients be passionate about their business and reach the unachievable.

In my previous blog about business planning, I discussed the method of backwards planning.  Whether you are planning a marketing campaign, a social media initiative, a sales plan, or even something unheard of yet… it is best to execute those items in manageable pieces.

…break up the tasks into those easily executable, manageable chunks.

It is best first to understand that backwards planning sets your milestones.  It helps your lay down the timeframe expectations for the various pieces of your plan.  Now you have to execute it.  This is where the principle of the 30 60 90 day execution comes in.

Strategy & Planning

There is no secret sauce to this. No eleven herbs and spices.  No special cola formula to using a 30 60 90 execution plan.  You look at your backwards plan and you break up the tasks into those easily executable, manageable chunks.

Where people go wrong in using a 30 60 90 day execution plan is when they overload the first thirty days with too many tasks to complete.  What was once a manageable tool is now filled with traps of failure of “too much.”

…you need to cross off what is completed and update it at a regular interval.

The next area where business executives tend to fail using this execution plan is that they forget it is a rolling plan.  Once you make it the clock starts.  The thirty days starts now and when they pass, what was on the 60-day portion becomes the 30-day portion and the 90 the 60.

To ensure that you do not stack too much in the first thirty days break it into three buckets of what needs to get done.  So think of the 30 as what needs to get done now.  Think of 60 as what can get done later.  Think of 90 as what can only be accomplished after 30 and 60 get accomplished.  This helps you make sure that you do not stack too much in the first thirty days.

Remember backwards planning is assigning a date and time of when you want to accomplish a particular goal, finish a project, or meet a deadline.

To avoid the second pitfall, forgetting that this plan is rolling, you need to cross off what is completed and update it at a regular interval.  Every month is definitely not a proper interval.  If you do that you are not really looking at or utilizing your plan.  Every day is obviously overkill.  It is best to pick a day in the week.  I am keen to Sundays as this is when I begin looking at what needs to be accomplished for the upcoming workweek.  Sunday I review what I completed (or not, I am human) and update my execution plan for the next 30 60 90 days.

Steps To Success

One of the keys to making this work is that you need to cross off items as you complete them.  It keeps you looking at your plan and not letting things pile up on you.

Remember backwards planning is assigning a date and time of when you want to accomplish a particular goal, finish a project, or meet a deadline.  You are working from that point in time backwards to where you are now so that you can align your resources, assign teams, and avoid unnecessary tasks.  Think of this as a walking the field before the big game or match. You are getting a lay of the land before you actually play.  The 30 60 90 day execution plan is a forward looking business planning tool that works within the frame work of the backwards plan to meet your major milestones.  Think of this as the actual plays you are executing during the game.

I am always interested in know how other people plan and execute their work, how do you plan?

About the author:

Erroin A. Martin is a Business Advocate with the Von Gehr Consulting Group, LLC, a coaching and consultancy provider for businesses and medical practices. He has over eleven years experience working within the pharmaceutical, manufacturing, technology, business services, and agriculture industries in various levels of leadership across six continents. He has led diverse teams in sales, marketing, planning, and in the Army.  He currently coaches business leaders and physicians in the tools needed to plan for their success. Learn more about the Von Gehr Consulting Group, LLC at www.vongehrconsulting.com or call +1 203 433 8079.  You can follow him on Twitter at @Erroin

Happy New Year!  In an effort to join the chorus of blogs, posts, and tweets wishing you success and tips for planning for your resolutions, I am going to add a bit of twist.  When it comes to your business, especially when it comes to your business plans you should build into this New Year the concept of backwards planning.

Backwards planning is a method.

What is this planning backwards you ask?  Well, it is a method used when you have specific date(s) in mind.  Let’s say you are launching an herbal and alternative health business.  You plan to hold a Grand Opening for your new business venture on the first of April.  You are smart, you know what items you need to make this Grand Opening a success.

Business Planning Meeting

You need advertisements, fliers, mailers, business cards, a website, press releases, and etc.  Without adequately knowing how long each of the above items can take to completion or believing that everything can get quickly accomplished before the big day can lead you, and your business, to a very poor start.  So, you apply the principles of backwards planning.  You research how long each piece of your Grand Opening will take.  You take into consideration back ups just in case something cannot be completed on time. With this information in your hands you can assign the resources needed to make this Grand Opening the best loudest mother of all Grand Openings ever experienced.

To plan effectively you need to know how long everything takes.

The above was just a glossing over of what is involved.  Here are the nitty gritty details to backwards planning.

With the Grand Opening date set, as we said April 1^st, and the information on how long each part of the project can take you from your research (see figure 1), here is an example of what backwards planning looks like:

Figure 1

April 1 – Grand Opening

March 27 – Advertising Campaign Begins

March 29 – Wave 4 Mailings

March 25 – Wave 3 Mailing

March 15 – Wave 2 Mailings

March 1 – Wave 1 Mailings (Save the Date)

March 1 – Website launched

February 22 – Final Mailing List Delivered

February 15 – Mailing List Broken into Waves

February 8– Proof Mailing List

February 1 – Mailing List Building Begins

Now of course actions would be assigned to members of your team and capital resources determined ahead of time to keep costs down.  There would also be more detail.  With a calendar in hand (which is an essential tool for backwards planning) you can mark down when the events or milestones should be met.

It allows you to clearly see targets.

To refresh, the concept of backwards planning is that you work backwards from the date you want to achieve a specific goal or task.  It allows you to clearly see when targets should or must be met and allows you to quickly assign resources to the most prioritized tasks.  The best part of this business planning tool is that it allows you to get rid of the non-essential items that waste time and resources.

Goal for Business Plans

Unlike GANTT charts, which plan items in a forward looking fashion, therefore allowing items to creep in and cause delays, this tool is easy to grasp and use.

How do you plan for your business?

About the author:

Erroin A. Martin is a Business Advocate with the Von Gehr Consulting Group, LLC, a coaching and consultancy provider for businesses and medical practices. He has over eleven years experience working within the pharmaceutical industry in various levels of leadership across six continents. He currently coaches business leaders and physicians in the tools needed to plan for their success. Learn more about the Von Gehr Consulting Group, LLC at www.vongehrconsulting.com or call +1 203 433 8079.  You can follow him on Twitter at @Erroin

An article in the recent edition of the Harvard Business Review talks about the need to bring conflict into the workplace.  Picking a fight about the future direction for a brand, product, or company can be key in bringing out innovation and a stronger plan.

The article gives you the tools you might need to set the conditions and manage the fight within the organization.  Allowing for controlled and open “combat” can let the company challenge assumptions and keep “lemming thought” under control.

An Earnest Fight For The Future

While a company will benefit from the open conversation and honesty that comes with fights, if it is not clear that the winning side has total victory the grudges will lie in wait.  This means that the leader must have clear rules on who wins and who loses in the fight.  The losers must set the example that once they have lost the fight they will follow without question.  The winners, after winning, will not gloat.

We have two examples to draw from here that demonstrate the pros and cons of fighting within an organization.  The first is from the fashion industry and the second from history.

“…after the clear winner was chosen the other three fell in line…”

A fashion designer takes her woven sweater design to a Chinese knitting factory.  In order to determine the best method in making the sweater, the factory owner assigns four master seamstresses to make the sweater by hand through their interpretation of the design.  After one day all four seamstresses came back and shared their knitted product with the designer and the factory owner.  After inspection the designer picked one winner.  The other three seamstresses matched the winner’s style and duplicated the sweater. The lesson here is that after the clear winner was chosen the other three fell in line and followed the plan of action for the launch of a successful sweater.

“They, the defeated, paid him back through the ultimate boardroom revolt.”

A look at history is strewn with lessons of losers holding grudges and winners gloating over the defeated.  We will pick just one for today’s blog, Julius Caesar.  One could argue that the civil war between Julius Caesar and the Senate was an organizational fight over power in Rome.  Caesar’s victories over the armies of Pompeii Magnus and the Senate were total and complete on the battlefield.  Yet, Caesar did not follow the clear Roman rules of dealing with the defeated, which usually meant killing them.  Instead he “forgave” them of their offenses and tried to co-opt them.

This did two things.  The first is that it did not give the signal of a total victory and second, it made the defeated feel beholden to Caesar and therefore stoking their feelings of revenge.  Each action Caesar took after his battlefield victories looked as if he was gloating over the defeated.  They, the defeated, paid him back through the ultimate boardroom revolt.

How do you apply confrontation to the betterment of your business?

Listen to our podcasts

In a recent article in the Wall Street Journal on September 21, 2009, discussed how larger companies like Starbucks and Avon are consolidating the power base into the CEO.  This is done by combining the CEO and COO positions and/or President positions under one person.  In essence the combination of those positions eliminates the #2 person in the organization.  What was once a clear line if succession has become a bit obscured.

The benefits in eliminating the #2 position in a large company are as follows:

• The CEO can be more involved in the daily operations of the business.
• The CEO will have a greater grasp on the major issues facing the day-to-day business.

The faults in such a combination of power are as follows:

• The CEO has more power consolidated within the company and can be swamped with too many decisions to make.
• A power vacuum can result with the abrupt loss of the CEO — not know who will follow can create quite the controversy, paralyzing an organization.
• Lack of a succession plan can indicate to investors that the company is not invested in the long term growth or does not see a future for growth.

While larger companies, given their depth of capital and long line of investors, can play with the fates a smaller company does not have that luxury.  It is in the best interest of a small company to have a succession plan in place.  If a family owned business a clear path of succession can make it easier for all family members involved to know what happens after the owner retires or passes away.  Does that eliminate conflict? By no means does it whatsoever, but it does lay out a clear vision for the future of the small business.   It also signals to potential investors, lenders, etc. that the business has a plan for the future and anticipates a leadership change.

A great example about the need for a strong succession plan by any company can be seen in Apple, Inc.  When Steve Jobs was ill and disappeared from the daily operations of the business Apple quickly placed the number two person at the helm. The result was the continuation of innovation, new product launches, continued profits and a well deserved stock price.  While Mr. Jobs is the embodiment of Apple, the company is much larger than him.

While we all wish that we could live forever, the reality is quite different.  A company that plans for the definitive change that will occur will be better off than companies that do not.

Learn more by listening to our Podcast.