Competing In Challenging Times
Competition is the keenest, customer demands are the meanest and lenders are the flintiest that have been seen in years. No one is pretending that this will change soon. So the stakes are high on competing effectively. Where do we turn for competitive effectiveness? Even if the business is a lights-out totally automated factory, it’s people, the employees [that make competition effective].
In the book Good to Great, Jim Collins uses the metaphor that business is a bus. “There are going to be times when we can’t wait for somebody. Now, you’re either on the bus or off the bus.”Are the right people on the bus? Are they in the right seats?
Competing Requires Discipline
In tough times, family businesses tend to hunker down. They make tough decisions, take steps to improve productivity and do what it takes to survive in the short-run. Surviving is very important but will the resulting organization meet the needs of the business 18 months from now?
This is the time to take an objective look at the long-term challenges to long-run survival. For the family business, the source of objectivity may need to be outside the company. Structures for objectivity range from ongoing advisory boards to specific project experts.
It’s also time to define what each position in the business needs to accomplish, as well as ask whether the incumbent can do it. Sure, everyone is working hard, but are they doing the right things? And what backup exists for key functions? Are employees being developed for the future? The work of answering these questions is the easiest way to achieve long-term success.
The Right People
It is always difficult to put someone off the bus. But doing so is understood best when the standards of performance are clearly communicated. When someone does get off the bus, conform the position requirements to the long-term needs of the company before filling the void. Promoting from within, even when it is a stretch, sends all the right signals when selection criteria are known and merit is rewarded.
Internal promotion also creates old-fashioned loyalty, which can be a powerful competitive advantage. But when the stretch is too great, “business first” requires looking outside.
The process for an outside hire should be the same as for the internal promotion: a clear position description, up-front consensus on the experience and selection criteria, as well as a consistent interview process involving those who interface with the position. Everyone, candidate included, needs to be clear about what must be accomplished by the person in the position during the near term to achieve success. Assessment tools and training the selection team on interview methods add consistency to the process and exemplify fairness in the company culture. Passion and past performance should trump pedigree in the selection process.
The Right Seats
Competitive performance is multiplied when people are doing work that plays to their strengths. We have all heard the story of the best salesperson being promoted to sales manager with negative results. Knowing the skills required by the position and the skills possessed by the aspirant is critical to getting the right people into the right seats. Also positions descriptions that have developed over time may have an inappropriate collection of tasks. Examining job responsibilities against the current market realities and needs can uncover redundant tasks and conflicting responsibilities that confuse or defocus otherwise productive employees. Even well-crafted position responsibilities may profit from an analysis of the skills required to avoid mis-assigning talent.
Competing Requires Future Leaders
A company culture that values developing people also creates competitive advantage. Successful family business succession rests on developing future leadership.Whether formally or not, every organization has leaders who coach and mentor. Likewise, there are elements of every business that must be thoroughly understood before sound executive decisions can be made. Identifying rising talent and assuring assignment to critical knowledge jobs as well as mentoring by the right leader, are the foundation for the future. Experience is the best teacher and assignments that stretch an employee can create it.
Installing and maintaining the processes to select, train, assess and recognize employees creates a sustainable business.
Reprinted with permission from The Family Business Report sponsored by the Goering Center at the University of Cincinnati College of Business Administration.