Getting people focused and committed on implementing a strategy has never been more difficult as von Moltke said:
Strategic plans do not survive first contact with the enemy, and hence must be always open to revision.
In today’s competitive environment every action has many reactions that aren’t easily anticipated. This is probably a major factor why 60% of change initiatives fail in North America and why something is going wrong with strategic planning.
One area that many executives either ignore or only pay lip service to are the cynicisms that previous initiatives strategic planning have accumulated in the organizations psyche. Here are some that you ignore at your peril
Crucial to understanding your people, as Peter Senge describes, is identifying where people are on the apathy-commitment continuum. He identifies two areas of personal need that they want satisfied in their working lives:
personal benefit which comes from compensation, benefits, position, recognition, or other non-tangible benefits
personal sense of fulfillment of their life’s purpose, vision, or calling.
Leaders need to grasp how well each person’s attitude and their contribution is met directly by company goals or objectives. Then they can assess where people sit on the apathy/commitment continuum. Any misalignment between personal needs and your strategy will generate unproductive or counterproductive behavior, if not actively managed
A key finding of our research in a large mortgage loan client (Nick Anderson and Linda Marsh) was that 40-50% of mortgage loan customers surveyed had concerns about their house buying process. Unfortunately, Mortgage Loan Officers recognized only half of these people had such concerns. Also, Mortgage Loan Officers thought that half the people who didn’t have concerns did.
So, one key factor on offering help and advice is correctly identifying people
who have concerns they need help with.
People problems are very varied; they can also be complex. There is no all-embracing theory for
understanding them and no magical formulas guaranteed to solve them. The problem-solver, where people problems are concerned, must be an experimenter. There are, however, a few guidelines which, if observed, will help to save the problem-solver from wasting time and effort on ultimately unprofitable activities.
This month I continue to look at different industries that have difficulty in implementing successful change. Last month we looked at the problems cutting red tape in local government, this month we look at large Oilsands construction projects
Ugh?? Why? Bear with me readers….here’s some facts
Fact: Canada has the largest reservoir of crude bitumen in the world. Making Canada’s total oil reserves the second largest in the world, after Saudi Arabia’s.
Fact: Crude oil prices will go through the $100 pbl this year. Making Canada’s oilsands economically viable once again, especially with advances in production technology.
Fact: Forecasts say Canada will 5.0+ million barrels per day by 2035
Fact: In the last boom (2005-08) these projects ran notoriously over budget and behind schedule.
So, what’s going to happen in the next boom AND why should anyone care about what happens in the barren lands of Alberta?
Basically, the more delay in these projects, the greater the cost and guess who’s going to end up paying at the gas pump. Here’s some disturbing evidence. In a recent survey of Oil & Gas Industry executives,most said they were:
Dissatisfied with project performance (40% of capital projects overrun); Highest ever level of dissatisfaction
Agreed that poor project performance is not acceptable when the market expects predictable strong returns.
Agreed that they can’t afford to miscalculate project risks, yet they don’t have a good grasp of how manage them.
(Booz Allen Hamilton “Capital Project Execution in the Oil & Gas Industry”)
You would think these executives would have their act together by now. What sorts of things did the survey identify were going wrong?
Good question. Another survey identified several things, including:
1. Late scope changes
2. Insufficient resources
3. Poor support
4. Poor contracting strategies
5. Poor communications
6. Poor project processes and controls
7. Poorly developed teams
8. High Team turnover
9. Lack of stakeholder identification and engagement
(PriceWaterhouseCoopers 2004)
It strikes me that lot of these come down to people not being on the same page. For example, to what extent are late scope changes the result of inadequate communication between different groups?
Quite often. We find people in construction projects aren’t aligned early enough. For example, the owner may expect the Contractor (EPC) to have conducted a thorough review of specifications prior to start of drafting only to find out later the review was inadequate. Andthe longer specification mistakes remain uncovered the more expensive they become to fix.
The key problem is layered change. It builds pressure to “to get on with it”. Under stressful conditions, the ramifications of meeting the latest change order are not fully considered. So, more change orders are approved without sufficient time or budget for professionals to consider their impact and cost. This sets up “wicked problem solving” – you “solve” one problem but create five more – and so on.( C. West Churchman, 1967)
We have seen this happen when three projects were running in parallel on the same site where increasing Change Orders led to increased Requests for Information (RFIs)
It reminds me of a Monty Python sketch – Mr. Creosote. Creosote is an impossibly obese man who is served an enormous amount of food After being persuaded to eat “just one more mint wafer”, he explodes in a very graphic way.
Another good example are Poor Partnering Strategies – Normallyperformance guarantees and risk sharing are agreed to contractually between, say, Contractor and Sub-contractor. But, invariably no one then takes preventative action align specific expectations to avoid their use. As many say, “if you have to get the contract out then we really are in deep do-do!”
What have you found to explain this a lack of specific expectations and how it contributes to these problems?
At the start of a project, construction people are under enormous pressure to “get on with it!’. So, they agree too readily to others’ expectations of them and accept others’ agreement of their expectations. This ready acceptance of expectations is especially true between professional disciplines and companies. The problem is people don’t really specify what is being agreed to. This only emerges when the expectation’s Receiver doesn’t deliver what was expected by the Originator and then the remedy is usually expensive. At its core is a lack of understanding of what alignment is really about. Alignment requires a Responsibility Shift between an expectation’s Originator and Receiver. Let me explain.
The Alignment Responsibility Shifts
When the Originator has an expectation, they are responsible to initiate discussion with the Receiver(s) (70% of the time this doesn’t happen – LOL)
Shift 1. If the Receiver agrees to the expectation, then the responsibility shifts to the Receiver. To tell the Originator what they will and will not deliver to meet the agreed expectation.
Shift 2. Now, the Responsibility shifts back to the Originator to assess the Receiver’s need for help to meet their expectation. (Contrary to what common sense would indicate):
Shift 3.and most importantly the Originator still has the responsibility to provide that help. For example, like briefing, coaching, advice, support etc.
Now, Originator and Receiver stand a chance of being aligned. The key is that success is more likely, replicable, faster and at reduced cost.
Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime. (Chinese Proverb)
Why don’t project management processes cope with this sort of problem very well?
Two factors. As someone once said:
“If everything is going according to plan, something somewhere is going massively wrong’
First. There is an over-reliance on such processes like accountability matrices (A grid of who does what, who they should consult and inform etc.). They fail to reflect the dynamics of a complex construction project. Back to Mr Creosote….it’s not so much about adding more! (Reporting, processes, communication etc.) but having clear expectations on how we handle problems and opportunities as they arise. Such rational planning processes needs strong emotional glue to be really effective. Let me explain.
Emotionally intelligent glueconsists of compounds like trust, constructive criticism and holding each other accountable. And like glue needs “curing”. It needs controlled heat, and a blend of team members to initiate and harden commitments, just like using high-performance adhesives when you need strong bonding.
The second factor compounds the problems of over-reliance on traditional project management processes. It’s the number of lines communications and deciding which are needed under pressured dynamics. Just take a 100 person project, potentially you could have 9,900 possible communication links. Regardless of matrix, project or siloed command structures, you still need a way of managing the myriad number of cross functional, organizational and contractor expectations. And if not surfaced and managed will negatively impact project execution.
How do you respond to those that say, “ This is why we have all this technology available so that all those involved have access to what everyone else is doing?
But, somebody has to feed the technology. More reporting what’s been done comes at a price – Time and declining utility. Unfortunately technology has become a two-edged sword….efficient yet overwhelming. It produces so much data that it dilutes information and makes sense makingdifficult. This then hobbles a team’s ability to cope with problems, delays and change and what they need to do.
Teams are most productive when they are bonded by the following curing process:
1. Sustainable Trust leads to
2. Healthy Conflict which leads to
3. Solid Commitment which builds
4. Owning Accountability which enables
5. Keeping Focused under the pressure of delays and problems
If these are not present cracks appear and quickly team adhesion fails. These cracks occur because expectation gaps and misalignments are not addressed early enough.
Let me explain how team adhesion is lost:
Lack #1: Trust
When team members get unsure what others really expected of them; as opposed to what their company has committed them to legally. This uncertainty is then compounded by cynicism from previous project experience. A typical cause of which is when:
“People get so absorbed in what they are doing that Key Stakeholders are not actively involved. This has led to tension between them and the project team”
Lack #2: Conflict
Lack of trust stifles teams engaging in unfiltered, passionate debate about key issues. This can develop into resistance to following through with expectations. Negative attitudes and unstated resistance occur evidenced by politicking, and regressing into pure self interest. Effective teams need to have:
“Iron sharpening iron, so one person sharpens the wits of another. (after Proverbs 27:17)
Lack #3: Commitment
Without conflict, it is difficult for team members to commit to decisions and ambiguity becomes the default. The resulting lack of direction and commitment can make project partners and teams disgruntled, falling back on required formal communication and lead to slower response times.
“We are reactive and respond too quickly to changes to understand the implications and impacts on other elements and groups”
Lack#4: Accountability
When teams don’t commit to a clear plan of action, even the most focused and driven individuals hesitate. They hold back from calling their peers on actions and behaviors that are counterproductive. This procrastination means correcting a situation becomes very difficult without direct confrontation of the issue for the overall good of the project.
“We could be better at identifying problems and their solutions before they actually occur. We are too reactive and this slows us down”
Lack #5: Focus
Now the lines are drawn. Project team members circle their wagons. They fall back into the distraction of putting their own needs first. If a team has lost sight of the need for collective achievement, the project will ultimately suffer.
“We don’t reuse what has been done before – “Reinventing the Wheel” is costly and takes time” “Measuring the impact of what we do is too subjective and lessens our ability to stay within budget”
These five cracks are rooted in problems of not aligning and managing expectations.
“Expectation Gaps are like pot holes, the more you leave them the deeper they get. The impact of misalignment leads to cost and time overruns and then bleeds over into subsequent projects” (Nick Anderson, PDS Group LTD)
Successful projects are founded on:”Get Personal before you get contractual!”
In summary, no matter how well a project is planned, it is executing the plan that ultimately determines success. Project success demands authentic communication to align expectations and then track them methodically. Tools needed to measure, manage and facilitate easier communication and alignment of critical expectations among project participants
So, you’re saying that those managing complex projects, like oilsands, need to stand back and consider what they do differently…..if past delays and overruns are to be avoided?
Certainly, there’s a case to answer and look at a new way of Expectation Alignment for More Effective Project Management. Let’s face it, You Can’t Manage What You Cannot Measure
As many project people will us:
“Building the thing is not difficult compared to managing all the people involved”
So called “soft” skills need hardening. Effective Communication should not only be acknowledged, but recognized as a cornerstone of successful project management. Why then is it so metric and data starved? How can we manage what we cannot measure?
So, here are the questions that took us 10 years to answer effectively:
How do we develop measurable ways of effective Teamworking?
How do we assess people’s expectations of others with those others have of them?
How can we drive performance discussions between groups and individuals on their expectations and assumptions that result in:
Specifying clearer performance criteria against which individuals/groups will be measured
Removing expectations that are non-value added and not strategically aligned
Identifying significant issues to address for project advancement
Creating an accountability framework
How can we help people be more aligned and focused?
I guess the question in readers minds is: If you make such an investment what do I get in return?
The ROI for Oilsands Projects – Sources of Payback
Expectation Alignment has been successfully employed midstream to “projects in crisis”, but its highest ROI is realized as preventative medicine used in real time to ensure proper project planning and execution.
We’ve covered Late Scope Changes and Poor Partnering Strategies of the 9 sources of failure. Let’s see how the others can be avoided or protected against by applying Expectation Alignment:
Optimized resources / Better support – Early definition of resource expectations all the way down the chain of command can avoid costly delays and expenditures. Similarly, competency gaps can be identified sooner by engaging in expectation alignment processes.
Improved communications – With numerous stakeholders involved in an oilsands project, static project charters and the like are not designed to manage the thousands of changing expectations. Successful project execution rests on agreeing, discarding or identifying the unresolved… Expectation alignment methods identify teams and managers who are especially strong or weak at communicating . Coaching or other remedial actions can thus be undertaken and the results monitored.
Accountability Tracking – Expectation Alignment’s regular and measurable process of developing and agreeing project expectations are taken to a level needed for a given project. Unlike project reporting which can often identify symptoms, Expectation Alignment tools also make accountability for task execution highly visible. Expectation Tension Ratings may also reveal important tasks that are not necessarily on the critical path but can have huge ramifications to project schedules or budgets.
Better Team Development– The Expectation Alignment process demands that Expectation Originators ensure that Expectation Receivers have the competency and resources to complete the required tasks. In situations where senior managers are working with junior personnel, assumptions are often made on their level of process knowledge and industry practices. Expectation Alignment addresses these issues by facilitating the alignment conversations that reveal experience gaps early enough to develop people and avoid later termination.
Effective Contracting Strategies – Incorporating subcontractors and key suppliers in the Expectation Alignment process often reveals owner expectations and other stakeholders are not captured in specifications and contracts yet play a significant part in them being effective
Reduced Team Turnover – Again consider the 5 key” Project Dysfunctions”. (Absence of trust, fear of conflict, lack of commitment, avoidance of accountability and inattention to results). Getting teams participating in facilitated expectation alignment sessions creates an objective assessment of team stressors and progressively builds a more robust and productive project team culture.
Based on this foundation , Expectation Alignment becomes an effective tool to getting new people up to speed and address competency gaps before their credibility is damaged
Improved Stakeholder Engagement – while inclusion of all stakeholders seems an obvious remedy to avoiding later project problems, the explicit definition of mutual expectations, especially of external stakeholders can yield big paybacks. The process that enables external stakeholders to explicitly state their expectations and have them acknowledged also build good relations both in the current and subsequent projects.
In summary, where project delays are millions of dollars per day, the simple alignment and monitoring of expectations to make the many thousands of required daily decisions more accurate, is strongly beneficial and has been shown to result in very tangible savings.
Tip of the Blog
Here are some questions that are crucial to successful project execution. The above benefits accrue when all people understand:
What is expected of them
What they can expect from others
How well they are strategically aligned
How their performance is measured and compensated
What they can stop doing
What they need to focus on
What information and resources can be used to achieve their goals
This is probably the first thing on your mind after reading this Blog. How about asking us? The first call is free! Just email me to set it up. Don’t wait, get PDS working for you!. If our conversation leaves you needing more, we offer at a reasonable fee telephone and video coaching on change, alignment and executive performance that improves the bottom line. If that still doesn’t do it, we’ll work with you on a solution.
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________________________________________________________________________________________________________ For Help in Getting Your People on the Same Page Nick Anderson, Senior Partner, PDS Group LTD E-mail I Web I Linkedin
It’s a statement of the obvious ….. We live in turbulent times… I got to thinking what are the challenges of leadership in the times we are living in. Some years ago I noted this quote:
“Business is now so complex and difficult, the survival of the firm is so hazardous, in an environment increasingly unpredictable, competitive and fraught with danger, that their continued existence depends on the day-to-day mobilization of everyone’s intelligence” (Konosuke Matushita, founder of Matsushita Electric)
It struck a chord…to mobilize everyone’s intelligence… for regular readers you will recognize a theme in our work at PDS…releasing and focusing people is still a crucial ingredient to survival and sustained sucess
So, my focus this month is the Leadership Challenges in Turbulent Times
What’s the core to these challenges that leaders face….it’s Bravery…
Bravery is the capacity to perform properly even when scared half to death. (Omar N Bradley)
The first step “walk and talk – – – the same talk” constantly. Alignment between attitude, philosophy and actions is key! Such consistency is hard to find, particularly since producing a payoff in changeis often more about emotion and intuition than it is about analysis and logic. Where’s the bravery you ask? Try making emotional and intuitive decisions which may or may not be born out by analysis and logic!
Yet I like, Peter Senge’s viewpoint:
“high levels of mastery….leaders cannot afford to choose between reason and intuition, any more than they would choose to walk on one leg and see with one eye”
It’s that outward calm of seeing a swan glide across the water, yet below the water line…furious paddling..
It’s about not losing your head while those around you are running around like chickens with their heads cut off…..what are we going to d!….what are we going to do!
The bravery comes to challenge how your company operates, its implicit beliefs and philosophies (e.g., The unspoken creed…once in automotive always in automotive). Your culture can create its own distractions which interfere with what seems right, intuitive and obvious. Many times, discussing this tension is repressed so that “we don’t take our eye off-the-ball,” or so we don’t offend others. Consequently, leaders often focus on the seemingly “urgent” and let the critical issues slide. They take refuge in “safe” financial performance targets that can’t be easily disputed. These targets rarely support desired behaviors or intuitive outcomes.
Yet there are automotive dependent manufacturers in West Michigan that are wondering how to “keep it shiny side up!”
So in this fog of war, where do leaders look to survival?
If you look at successful companies, they have varied strategies, structures and systems. However, their leaders do have something in common. They share surprisingly consistent philosophies.
These successful leaders have moved away from over reliance on very formal ways of running their organizations (like articulating strategies, building structures and developing systems). They have moved toward using more organic ways of managing (like engaging people in defining a purpose, implementing through necessary and defined processes and developing people).
So what does this point out? It goes to the root of why so many change initiatives fail (60% +) even after overdosing on business re-engineering and other scientific management techniques. Many Leaders manage what is easy to manage (like managing numbers and not people). They’ve been trained in the scientific disciplines. They forget they are managing an “organism.” They dismiss the small and gradual steps associated with real change for grandiose strategies
So, let’s put this into perspective. Successful leaders recognize that an organization’s purpose is more important than short-term outcomes. Why? Outcomes change – their purpose does not! Their focus is on how they can create committed members of a purposeful organization. Putting purpose above outcomes, allowing new improved outcomes to take precedence and promoting different things to be done takes bravery.
Why is bravery so important?
It takes bravery for leaders and executives to address seven critical challenges. Without question, addressing them is about not acquiescing to “legacy tendencies” but about incorporating “what now works” into the development of “tomorrow’s legacies”! Bravery is about doing “different things,” not about making excuses as to why you can’t do different things.
Getting above the white noise of excuses is not for the faint hearted….getting up with clamor of resistances and fear
Where do we start with these challenges? Is there a sequence or are they inter-related?
They are interelated but a logical place to start is:
1. Embedding Purpose
Is your purpose Ill-defined or Conceptual Clear, well articulated & translated?
So, you’ve written and articulated the corporate purpose! But, do the troops actually understand what this means to their everyday behavior and actions? So often the organization states its purpose without regard as to whether or not it has created any ownership in that purpose.
Essential Questions:
How will you gain widespread organizational support for your purpose?
How will you ensure new activities, actions and behaviors invigorate your purpose?
How will you ensure your expectations are aligned with what people assume is expected of them?
2: Removing Distractions
Are your distractions unidentified or well identified and managed?
There are always distractions that deflect an organization from its “appointed” tasks. If these distractions go unidentified, they grow stronger. Distractions don’t just miraculously disappear. The longer they last the more they clog corporate arteries. Executives need to lead the “charge” in identifying and eliminating distractions.
Essential Questions:
How will you convince people to dismiss actions, operations and processes which stimulate doing old things?
How can you eliminate duplicate processes and reports that slow the organization down?
Who will oversee the distraction-elimination process; and, what authority will they have?
I can see how that would help but does this really get over the fog of war that we face today?
Not unless you integrate it with the next challenge…
3: Aligning Organizational Expectations
Are you expectations unstated or defused or well focused & aligned?
Over and over again, employees say, “I wish someone had told me exactly what was expected.” Have you ever considered that others’ assumptions of “what is expected” might be counter productive to your purpose or outcomes? Are people doing what you expect or what they think you expect?
Essential Questions:
What are the key components that reveal your organization’s direction and success?
How will you translate these words into actions, competencies and behaviors that can be managed?
How will you measure the degree of alignment with your purpose, and what evidence of alignment are you looking for?
Doesn’t this demand more from a leader than just stating the facts?
Yes. It’s about lt’s making clearer emotional connections. It’s alarming how one individual can undermine a change simply by being out of touch with intuition and empathy. One of the most overlooked yet common ways leaders fail, albeit unintentionally, is not to express appropriately, candidly and consistently what we feel as well as what we think. This is known as unintentionally ambiguous behavior. It gives mixed messages and next to aggressive behavior, ambiguous behavior can cause the most tension between leaders and others. (Adapted from Robert Cooper’s book, Executive EQ).
What is the context for well focused & aligned exepectations?
4 Creating Differentiation
How vulnerable are you to being seen as “same-o,same-o” or clearly differentiated from your competition?
If you feel like you’re the same in the marketplace, odds are that’s how the customer sees you. As a leader, you are responsible for creating a climate of differentiation.
Essential Questions:
How will you ensure that customer contact people and others connect with one another to develop differentiable approaches?
How will you measure the degree and profitability of differentiation?
How will you leverage differentiation to lead your market place?
I can see how these first four create a platform for success…but how do leaders get this to stick and not just be another “flash in the pan”
5: Coaching
How would you describe the coaching process in your organization…Isolated or Cascaded
We know, we know …. your people coach! The real question is, do your people coach with the right intensity and frequency to replicate successful behaviors? Or, is coaching infrequent, informal and isolated?
Essential Questions:
What will you do as a leader to establish your coaching cascade?
What is the right intensity and frequency of coaching needed under present competitive conditions?
How will you know that coaching is effective?
6: Replicating Success
How reliant are you on using Lagging Indicators as opposed to Leading Indicators?
The words, “best practice” seems to have permeated the corporate world. Your people undoubtedly have their own practices of choice, honed by years of personal experience. Often corporate rewards go to these people rather than to those who demonstrate the “best practices” that everyone can adopt and benefit from.
Essential Questions:
What will your real best practices look like?
How will you tie best practices to behaviors which can be evidenced and replicated without alienating the productive “lone rangers?”
How will you use your “language of leaders” to make managing easier and more measurable?
7: Rewarding Change
To waht extent does your reward system reflect what worked in the past rather then being liagned with your current direction?
If the recognition and reward systems of your company run on the “legacies of past success” it will only encourage doing things differently, not “doing different things!” To change, you need to consistently reward the new behaviors, not the “reward legacies” of the past.
It’s like traning people to use the longbow,used in the Middle Ages as a weapon of war.A trained army archer could shoot upwards of ten to twelve arrows in one minute, making him the world’s first “machine gun” in some ways. Today how ever, the fastest rate of fire a 36 barrell Prototype mini gun, and can shoot 1,000,000 rounds per minute
Essential Questions:
What proportion of people’s compensation should be tied to adopting the new behaviors?
How will you measure and reward those who support your purpose?
How will you “raise the bar” so that over time people demonstrate excellence in the new behaviors?
Where do you go from here?
Ensure that your “walk and talk” are consistent. This relates to your language, how you reward excellence, how you coach and how you react when things go wrong! Bravery means displaying an attitude of distinction.
Create a cascade of conversation and coaching that gets above the “white noise” of legacy…..that’s doing different things!
Align the expectations of the organization. Bravery is found in exposing misalignments and distractions for immediate correction.
Tip of the Blog
Look at your team/colleagues…whose up for a fight
“He that outlives this day, and comes safe home,
Will stand a tip-toe when this day is nam’d,
And rouse him at the name of Crispian.
He that shall live this day, and see old age,
Will yearly on the vigil feast his neighbors, And say ‘To-morrow is Saint Crispian.’
Then will he strip his sleeve and show his scars, And say ‘These wounds I had on Crispian’s day.’
Old men forget; yet all shall be forgot,
But he’ll remember, with advantages,
What feats he did that day. Then shall our names,
Familiar in his mouth as household words”
(St. Crispen’s Day Speech William Shakespeare, 1599)
Great, but how can this help me?
This is probably the first thing on your mind after reading this Blog. How about asking us? The first call is free! Just email me to set it up. Don’t wait, get The Crispian Advantage working for you!. If our conversation leaves you needing more, we offer at a reasonable fee telephone and video coaching improve bottom line results. If that still doesn’t do it, we’ll work with you on a solution.
_____________________________________________________________________ For Help in Getting Your People on the Same Page Nick Anderson, The Crispian Advantage
I was reminded of the topics we covered two years ago through a number of conversations with Financial Planners. Two things stuck out in terms of their frustrations, especially with business owners.1. Clients don’t want to reveal all their assets the planner2. Clients will “dither” on the end game. Some listeners will be thinking, rather skeptically, about the self interest motivating such frustration. But, for a minute, most financial planners are well motivated and they can’t build a book of business by not doing two things really well:1. Know their clients really well2. Act in their best interests
Other related conversations with businesses owners about when and how to transition:
A fast expanding food broking business which is rapidly expanding and the founder is59yo and his son is 32yo have no transition plan
A printing company where the 52yo owner was returning to work after a major illnessand his 28yo son ran the business very well in his absence. The owner wants to retireat 60 yet thinks it is too early to plan his transition
A environmental remediation company’s owner got caught by the recession and had topull back control from his inexperienced management team.
So, Nick, what is your theme this week?
“May you live in interesting times” Old Chinese curse. Readers don’t want another recital
of the recession litany. Yet, there is opportunity in any downturn.Yes, conditions are unpleasant with loads of “turbling” BUT….
“If you can keep your head when all about you are losing theirs and blaming it on you; If you can trust yourself when all men doubt you, But make allowance for their doubting too; . . . If you can meet with triumph and disaster AND treat those two impostors just the same . . Yours is the Earth and everything that’s in it.” (Kipling)
My message is for business owners in this blog is –
Don’t waste time worrying about things you can’t change – Direct things to things you can control: this choices on how are you going to move forward.
That’s easier said than done, in this economic climate
Oh, I am not talking about easy but I am talking about the need to be proactive…
Since the recession started, for Baby-Boomer business owners face the same dynamics of their condition.1. 78m Boomers of whose wealth is held in 12m privately owned businesses2. 70% will change hands in 10-15years3. Trillions of dollars will transferNow think of the business owner with 180,000 hours, say, invested in their business;
What are they thinking?
Will I be able to work less in next five years?
Consider leaving the business?
How do I get out?
I don’t know what the business is worth?
What is the best time to sell?
Surely, though, most owners are in survival mode and need to protect their business these days
Why not combine the two?Expand strategy to accomplish both – the reality is they are not mentally exclusive.
In fact, there are real problems if you don’t keep them integrated.Remember the quote “keeping your head”
This is not the time to abandon business planning.It takes at least 2-3years to successfully implement in NORMAL Times. You can argue now
is the right time to put in place tactics that will increase business value when the recession ends.
OK. So what can business owners do now?
Well, the business cycle is alive and well, there’s still timing when you business is at its optimal value.
If you don’t think ahead: you will be in the herd!
9 out of 10 owners who don’t get anywhere close to what they expected or want for their business, delay in making a decision and for mature businesses “dithering” erodes the transaction value.
The fact is that less than 40% of businesses successfully transition their business…. Yet,
84% say the need the proceeds to finance their retirement.
There’s been no change to owners lack of urgency:
58% don’t have any plan
33% informal
Only 9% have a formal written plan
Ummm, what’s the connection between 1 in 10 get what they want and 1 in 10 have a formal plan.
When are owners thinking of exiting their businesses?
28 % within 5 years, 52% plan on exiting within next 10 years.
Like retirement and personal planning, transition planning works best the longer the timeline to plan and
implement = optimal value.
With such compelling stats for just how much is on the line, what’s holding people back?
There are the three fears of transition:
Fear of Loss Wealth
Fear of Loss of Control
Fear of Conflict
What are the main reasons for not having a succession plan?
It’s a bit like Letterman’s Top Eight Reasons (Excuses) for not getting the right return on 180,000 hours of:
“Blood, Sweat, Toil and Tears! (Churchill)
Top 8
8. Too scary
7. Thoughts of the end
6. Family/Employee conflict
5. Don’t want to think of leaving
4. Can’t get adequate advice
3. Too complex
2. No Time
No. 1 – No time to plan!
In this recession why has transition planning become even more important?
Good question,There will be more market competition – fewer buyers than sellersWith downward pressure on business values a premium will be placed on well run businesses that stand out
from the pack and can differentiate themselves in the market placePlanners – IO Non-Planners – O Which team do you want to be on?
How does the Family put a brake on transition planning?
Well. Many owners consider passing their business on to their children,It’s one of the most challenging
decisions a parent-owner faces.Impartiality is critical in addressing these emotional family issues and the effects on the business
What are the main reasons for no or little planning?
Sadly, many family-owned businesses are shut down because the Family didn’t handle the succession issue: Why?
Parents stays on too long
Parent steps down too soon before successors are trained or sufficiently experienced in the leadership roles
Fail to face the realities that many children don’t want to be involved with the business or at very least shouldn’t be forced into working together
The reality is that the odds are not stacked in their favor:
30% – 2nd Generation survival
12% – 3rd Generation survival
3% – 4th Generation survival
My Blog Tip
Ask Yourself:What comes first? The Transaction?OR The Management of the Transition?OR The Strategy for the TransitionDon’t put the Cart before the Horse.Talk to your trusted advisor – CPA, Lawyer etc. and ask”Who do we need to create and implement the plan?
Great, but how can this help me?
This is probably the first thing on your mind after reading this Blog. How about asking us? The first call is free! Just email me to set it up. Don’t wait, get The Crispian Advantage working for you!. If our conversation leaves you needing more, we offer at a reasonable fee telephone and video coaching improve bottom line results. If that still doesn’t do it, we’ll work with you on a solution.
_________________________________________________________________________ For Help in Getting Your People on the Same Page Nick Anderson, The Crispian Advantage
Clarifying and improving performance contracts between critical relationships, such as:
Architects and their Design Engineers
General Contractors and their Sub-Contractors
Managers and Subordinates
Leadership Teams
Cross-functional groups
Groups have successfully used AlEx™ to:
Improve competitiveness
Deliver more customer-focused solutions
Deliver a building on-time, on-budget and no legal
issues
Accelerate and build partnerships
Integrate new Architects
Streamline Change Order & RFI Processes
Potential Benefits of the Eternal Triangle: Owner, Architectural Design Team & General Contractor
The Goal: a perfect building with proper design, highest quality, constructed on time and last but not least, built within budget.
Introduction
What follows are three areas where AlEx™ can potentially help the “Eternal Triangle” of tension and mistrust that pervades many construction project relationships
1. Managing Conflict and Relationship Tension
2. Managing Complexity
3. Improving Building Performance
1. Managing Conflict – Benefits of AlEx™
Helps develop a healthy attitude to managing rather than hiding conflict.
Reduces the distracting and destructive products from poorly handled conflict situations.
Helps harness diverse views and experience in the project team for the good of the overall project and Owner.
Helps handle change as the project progresses and manages the constant flow of information between Owners, consultants and contractors.
5. Addresses the tensions in managing the dynamic and transient nature of the project life cycle process.
Recognizes that as work precedes the relative bargaining strengths of the parties are constantly adjusting. Standard approaches to contracting simply do not take this into account.
Overcomes, the inflexibility inherent in standard building contracts. For example, one contract assumes that the design is complete at the time of bidding and that the contractor employs most of the resources that will be required for the project. The fact is, design is rarely 100 % complete at the time of bidding and contractors subcontract most of the work.
Develops Project Teams while recognizing their different rules of engagement. AlEx™ recognizes and helps facilitate different project needs and rules of engagement, like:
Changing Owner demands
Rapid learning
Generating and maintaining effective interaction between team members so that they can exchange views and debate the consequences of their decisions in an open and honest forum.
Changing circumstances over the project’s life cycle.
Shifting relationship tensions between the major members of the project team.
Building trust for when things do not go as planned.
2. Managing Complexity – Benefits of AlEx™
1. Designs in flexibility in management structure and style that is essential in dealing with complex and changing business environments.
2. Deals with the reality that construction contracts are based upon industry-wide standards that often are hastily modified and executed during a hurried design and bidding process. AlEx™ picks up where the contracting process stops. Every project needs a legal contract and a guide to monument – AlEx™ is the formative process to get the contracting parties into alignment.
3. AlEx™ helps harness conflict that causes the distress and low productivity associated with escalating conflict. AlEx™ helps to develop open, skillful discussion that is needed to turn differences into synergistic gains rather than squabbling losses.
4. The use of AlEx™ helps project teams build Partnering, a process of building up long term business relationships that reduce the adversarial nature of construction. The expectations approach helps shift the emphasis from a contractual focus to a results orientated management focus.
5. AlEx™ takes the heat out of how to convert business deals into good contracts which produce lasting positive relationships.
6. Helps develop the close working relationships needed between all designers and contractors in order to produce an integrated building in which all building services, structural and building elements are fully planned, systematically organized and combined, and brought to fruition as required by an Owner. It really produces teams that actually communicate effectively with each other.
7. Helps develop the processes needed to cope with the growing complexity of design and Owner needs, e.g. as hospital buildings grow in size and complexity, building services also tend to be more sophisticated and difficult to manage from design to certificate of occupancy.
8. Helps develop coordination to ensure that services and other building elements are properly planned, managed and coordinated.
9. Develops protocols for coordinating multi-head Owner, changes of design, conditions of engagement of designers and contractors, division of design responsibilities, allocation of risks, early incorporation of specialty contractors/consultants, forms of contract and quality of design and construction management. AlEx™ can also have a positive effect on coordination of building services within the General Contractors office.
10. Examines ways in which Owners and various designers, contractors and equipment suppliers can work together as a team in line with the projects procurement path or strategy (The whole process of creation, communication, response and integration in the context of the project can be defined as procurement).
11. Helps develop Procurement Strategies by guiding decisions early in the project influencing risk allocation, design strategy and consultant/contractor hiring. This ensures that throughout the project the following are all consistent with the selected procurement route:
Roles and relationships
Project management approach,
Communication channels
Information systems,
Forms of contracts, and
Overall management of the project organization
3. Improving Building Performance – Potential Benefits of AlEx™
1. Identification of problems and their solutions before they actually occur. This is a proactive approach toward building solutions to performance issues.
2. Improved space utilization and feedback on building performance.
3. Improved attitude of building owner through active involvement in the evaluation process.
4. Understanding of the performance implications of changes dictated by budget cuts and scope changes, add-ons, contract extensions, and government intervention.
5. Built-in capability for facility adaptation to organizational change and growth over time, including
Recycling of facilities into new uses
Significant cost savings in the building process and throughout the building life cycle.
Accountability for building performance by design professionals and owners.
Long-term improvements in building performance:
Improved measurement of building performance through quantification.
Exposing and Expelling Pre-Conceived Notions
Project Owners believe Contractors to be _____________.
Architects believe Contractors to be _________________.
Contractors believe Architects to be _________________.
Contractors believe Owners to be ___________________.
Great, but how can this help me?
This is probably the first thing on your mind after reading this Blog. How about asking us? The first call is free! Just email me to set it up. Don’t wait, get The Crispian Advantage working for you!. If our conversation leaves you needing more, we offer at a reasonable fee telephone and video coaching on change, alignment, and personal and executive performance that improve the bottom line. If that still doesn’t do it, we’ll work with you on a solution.
st Churchman
lligent glue
The ROI for Oilsands Projects – Sources of Payback
The Crispian Advantage 