Ten Steps For Implementing Empowered Leadership

Empowered Leadership is based on the work of W. Edwards Deming and William Glasser. It is a way of managing people to ensure the best quality product or service while taking good care of the human capital providing that product or service. These are the ten steps to doing so:

1. Create a work environment that is physically, emotionally and spiritually safe for employees. Eliminate discrimination and oppression. Discourage gossip and foster an environment of safe risk-taking.

2. Help employees to feel connected to the mission and vision of the agency, to their teammates, to you as their supervisor and to administration. Communicate the vision and mission often and each employee’s role in it. Care about each individual employee and make sure they know you do. Foster cooperative teamwork. Help administration see the positives of your employees.

3. Ensure your employees feel cared about-that their lives matter, not just their work output. Notice when something is off and ask about it, leaving room for the employee to keep it to him or herself if he or she chooses to do so. Provide flexibility with work/life balance. Lack of appreciation is the main reason employees give for leaving their jobs. It’s not money.

4. Listen to employees’ ideas and implement those that are possible and make sense. Let your people know you value and respect their opinions and input. Decrease complaints by requiring each complaint be accompanied by at least three possible, reasonable solutions. Respect your employees as integral, contributing workers in your company. Communicate your employee’s importance, value and worth on a regular basis.

5. Allow your employees as much freedom as they can responsibly manage. You will give less to new employees and more to seasoned workers with a proven track record. Fight the urge to micromanage. Let your workers know what you want and allow to determine how they will provide it to you.

6. Provide your employees with choices. Allowing workers at least three options will increase cooperation. People do not like feeling there is no choice in a situation. It generally breeds anger and frustration.

7. Create opportunities for employees to have fun at work. Do not discourage play-making at work unless it becomes excessive. A little fun can make the day go faster, relieve stress and consequently, improve the output of each individual employee.

8. Ensure your employees have valuable and useful training so they can not only perform their jobs but also be promotion-ready. Not having useful training is one of the main reasons employees give for leaving their jobs.

9. Communicate the usefulness and purpose of what you are asking your employees to do. They must understand how their tasks will benefit themselves and the company. People who are asked to do things they don’t perceive as useful or things they don’t understand won’t do their best work.

10. Ask your employees to evaluate and constantly improve the quality of their work. Work together with your employees to develop production standards for quality. Ask your workers to evaluate their work against the standard and constantly look for ways to improve what they and the company does.

Kim Olver is a life, relationship and executive coach. Her mission is to help people get along better with the important people in their lives. She teaches people how to live from the inside out by empowering them to focus on the things they can change. She in an internationally recognized speaker, having worked in Australia and the continent of Africa, as well as all over the United States. She has consulted with the NBA and other major league player development specialists. She is the author of Leveraging Diversity at Work and the forthcoming book, Relationship Empowerment.

She co-authored a book with Ken Blanchard, Les Brown, Mark Victor Hansen and Byron Katie, entitled 101 Great Ways to Improve Your Life. She works with individuals, couples, parents, social service agencies, schools, corporations and the military–anyone who will benefit from gaining more effective control over their lives. She has consulted on relationships, parenting, self-development, training, leadership development, diversity, treatment programs and management styles. For more information about Kim go to Coaching for Excellence.

Author: Kimberly Olver
Article Source: EzineArticles.com

Procurement Sourcing Strategy – 12 Tests That Tell You When Your Sourcing Strategy is Complete

A Procurement Sourcing Strategy is a document that fulfills a number of purposes. For example, one purpose is to succinctly summarise the rationale and evidence for how business requirements will be met and savings made. Another purpose is to act as an internal sales document that gets senior management buy-in to the strategy.

The more purposes your strategy needs to meet, the more difficult it is to decide that the strategy is complete and ready to be issued. So, here are 12 tests you can apply to see if your sourcing strategy is ready to be shared with others in your organisation.

1. Do you have a crisp, persuasive and comprehensive summary of the future sourcing strategy? If you do, then you have the “elevator pitch” (so called because it is a proposition that is short enough to tell someone the key points in the time it takes to ride several floors with a senior manager in an elevator) – that will help you “sell” your strategy to others in your organisation.

2. Does your strategy mesh with your overall department procurement strategy and your corporate strategy? If it does then you have the basis of showing others the value that your strategy will deliver.

3. Does your strategy clearly identify the business requirements it is supporting and is there clear evidence of collaborative working with others in your organisation in developing it? If it does then your strategy has a much higher probability of gaining acceptance than if you did it in isolation.

4. Is your strategy based on a sound understanding of the sourcing history for this category? This will make sure that there is a logical pathway from where you are now to where the strategy will take you in the future.

5. Does your strategy contain an analysis of prices and costs? If it does then you have the means to show how and why your strategy achieves believable savings and what cost drivers it addresses.

6. Does your strategy demonstrate a sound analysis of supply markets? If it does then it will convince others that you have factored into your strategy and developments that are taking place in the market (such as new entrants or product changes).

7. In developing your strategy have you analysed your current and potential suppliers in terms of performance and capability? If your strategy is to meet your business requirements and target savings you need to focus on the high performing and highly capable ones.

8. Does your strategy incorporate a technology map if appropriate? Your strategy should identify and exploit any changes in technology development, trends and innovation.

9. Is your strategy based on a sound understanding of supply positioning and supplier preferencing? This is needed if you are to develop the right strategy in terms of the importance of the category, its supply risk and how key suppliers view your account.

10. Does your strategy contain a vulnerability analysis? Is there evidence of an analysis of potential vulnerability, together with plans to minimise risk to acceptable levels? This is a key consideration for senior management. They need assurance that the organisation isn’t running any unnecessary risks that might destabilise it.

11. Are their clear, agreed and balanced objectives built into your sourcing strategy? These are not just procurement objectives but business and corporate objectives as well. These show how your strategy builds value and achieves buy-in from others.

12. Does your sourcing strategy clearly demonstrate the competitive advantage it will achieve for your organisation (or in the case of a public sector organisation, how it will help a transformation initiative).

Do you want to learn more about effective procurement?

If so, download my brand new free ebook “The 5 Keys to Breakthrough Sourcing Strategies” here:

http://www.SourcingStrategyWizard.com/Sourcing.htm.

Steve Carter is an experienced procurement practitioner and published author and runs online training and coaching courses.

Author: Stephen C Carter
Article Source: EzineArticles.com

7 Leadership Steps to Create High Performance in Your Organization

1. Stakeholder Surveys – You must determine a base line for your employees. You should conduct a series of surveys designed to find out what your employees know, what they don’t know and what they think they know. First, do they understand the true mission of your organization? If you think so then think again, because making money is not the mission. The mission is providing a product or service that customers will buy. Do they know the vision or the mantra of the owner(s)? These questions will take careful crafting before you distribute a survey of any kind. I do recommend that this first survey be done anonymously online, through a service like (Survey Monkey, Constant Contact, etc.) You must learn your employees, no matter how many you have. (1-1000).

2. Communication Development – We think communication is easy. We speak and they listen. No, they may hear, but are they really listening? Furthermore what are they hearing? What do you think they hear and what is really received is most often not even close to the same thing. Studies indicate that communication is the number one problem in any organization. It is also the number one solvable problem in organizations. Communication is simple, but it is not easy to improve communication. Communication is hard work. Communication is the hardest work. We have the spoken word. We have the intent or the philosophy behind our words and we have the unspoken or nonverbal communication that occurs. There is also an organizational culture that defines what it all means. Sometimes because of lack of follow-up or follow-through our words become meaningless. Have you ever heard another co-worker say “just wait on doing that-the boss will forget all about it in a day or two”. You probably said this about your parents. You have e-mail communication, memos, policy manuals, and customs. Do you really expect your staff to analyze this data? There is not a chance this will occur. Simpler is better. Drill down to the core values you wish to transfer and make all your communications validate this.

3. Positive Attitude Development – You may be asking yourself how you can develop someone’s attitude to make it more positive. Well, you can do this by training, coaching and rewarding the types of behavior that reveal the attitude you want from your employees. Stop rewarding bad attitudes. How can I do this you might ask? Well attitude is revealed by behavior and job performance. It’s true you can’t write someone up for their attitude, but you can deal effectively with the undesired behavior that reflects their attitude. Bad behavior must be unacceptable in your organization. First, if an employee has had such a bad day, week, month or even life, they must be prepared to turn on a “Happy Face” and act out the part they have been hired and are being paid to play. Consider for a moment a visit to Disney World. They do not hire employees, they hire actors. They have casting calls. Cast members must be willing to take on a roll and play their part at all times. “Mickey Mouse” never has a bad day. If he does he is likely to get fired. You see we have been wrongly taught that when “OLD JOE’ has a bad day, we must accept it. This is wrong, and a you don’t have to accept this bad behavior anymore. I am not saying you can’t empathize with an employee who may be going through a rough time; we all have or will at some point in our lives and careers. But we are not getting paid to have these bad days at work and if they are so bad we cannot play our part, we must ask to take the day off and come back ready to play the part we are being paid for.

4. Career Development – 50 percent of preparation for career opportunity and advancement is the responsibility of the employee. 50 percent of preparation is the employers responsibilities. If one of these parties does not live up to their part, who will suffer? If you said both will suffer, you’re right. But ultimately your life and career is your responsibility. Have you ever heard someone make the statement “If they wanting you to get that training they would send you and pay for it?” Of course you have, in fact you may have said it yourself. It’s a lie. Don’t let someone else or even your organization decide your future. They may pick a more popular person to send to training and where will you be. You must be prepared to get the desired or needed training on your own and often on your own dime if necessary. I have done this all my life and career and until a few years ago I never really gave it much thought. This was one of the best decisions I have ever made for myself. Often you are preparing for a career change or role change that doesn’t exist today. This happened to an ex-employee and close friend of mine. He had volunteered for grant writing, inventory control duties (boring) and other projects that most would not volunteer for. A brief number of years later I found a position that would fit him perfectly; that he not only did not know was available, but he would not have been looking for. He agreed to apply for the position. He was selected out of all the candidates and now has nearly doubled his salary. He is the director for a growing nonprofit organization. He is heralded by the board of directors as an excellent Executive Director. By the way, this organization had 7 seven directors in 7 seven years. He is the first male director and the first director to last more than 12 months. Let me give you this disclaimer; I am not saying anything negative about female directors, I am just pointing out he was the first male director-that is all. So always be mindful that volunteering to take on NEW roles may pay dividends in the future. A future not yet visible to you now. I know this very well myself because after 20 twenty years as cop I became a Chief Of Police, a Chief of Field Operations, and later a Vice President of Sales and Marketing and finally I now own my own Employee Training and Business Consulting Company. Several of these roles did not even appear on my radar in advance.

5. Leadership Development – It is positive connotation to be called a leader isn’t it? But always keep in mind that there are two types of leaders. The GOOD LEADERS and the BAD LEADERS. David Koresh, Adolph Hitler, Saddam Hussein were all leaders, but they were not the kind of leaders you should model yourself after if you wish to be successful in the long term. First, leadership requires reciprocal trust from you to others and from others to you. Think of leadership like building a “Trust Bank”, one deposit at a time. If you were to open a bank account today with $100.00 and then tomorrow write a check for $500.00, you would overdraft your account and be seen as a fraud. But let’s say that you had this bank account for several years and then one day you wrote a check that went over the cash you had on deposit. The bank would accept that you are a legitimate customer and that you simply made a mistake. You had built trust with them overtime. Trust is not something that you purchase, acquire or even belongs to you permanently. You must foster trust day in and day out with family, friends, co-workers and sometimes yes, even strangers. So begin today and show proof that you can be trusted.

6. Process Improvement – As soon as you believe the processes in your organization cannot be improved, you are obsolete. Processes can always be tweaked. Even if you don’t see a way to improve them at the time, failing to always be looking for improvement is a major mistake. Processes can always be improved upon. Sometimes a set of new eyes looking at an issue can help. You may even need to let someone outside the department, or even outside the organization ask questions to those close to the issues. These questions might even spark more ideas. Some processes can even be determined to be obsolete themselves. We found once for example in an organization that we were doing 3 forms when only one form was necessary. Wow, a big reduction in work load just by someone asking the right questions. Oftentimes we do what we do because that is what we have always done. Does this sound familiar? Consider this scenario and I will move on; a daughter asked her mother why they always cut off the ends of the ham before she cooked it. Her mother replied; that’s what my mother did. She then asked her grandmother why she cut off the ends of the ham. Her grandmother said; I don’t know why your mother does it, but I did it because my oven was too small to fit the entire ham, so I had to cut off the ends to make it fit. Seems to me a whole lot of ham has gone to waste because no one asked the right questions or was afraid to ask any questions at all. What do you think?

7. Coaching and Support – Coaching and support requires follow-through and follow-up. There are some questions you must ask about each and every one of your employees. First, is the employee a good person? Second, does the employee usually do a good job? If the answer to both questions is yes and the employee is currently having a performance problem then you have a coaching concern-not a discipline problem. If the answer to one of the questions is no, then you have a discipline concern. If the answer to both questions is no-then you have a discipline concern up to and including resignation or termination. Let me also say that to determine these answers you must have spent some time around your employees. You could not successfully answer these questions if you have no personal knowledge of your employees.

Here are few final thoughts; If you are the CEO, you are the “Head Coach” in your organization, like it or not. If you don’t like it, then find someone else who will coach for you. Coaching will have to occur if you want to take your organization from the “Status-Quo”, (surviving) to “High Performance” (thriving). Over 90 percent of organizations are in the status-quo or survival mode. They may be surviving but they will never thrive through High Performance without following these 7 tips. Now go coach your employees or find someone who will.

Sam Slay is a Motivational Speaker, Author, and Trainer with over 20 years experience. For more information on “Bridging the gap that exists between employees and their employers through non-traditional training and coaching.” Visit http://www.357Solutions.com Sam can bring his programs to you. You can even get FREE seats or cash by hosting one of his programs. You can purchase his NEW book “The Masters of Success” co-authored with Ken Blanchard (Author of the “One Minute Manager”). Sam is also the owner of an Employee Training and Business Consulting company, 357 Solutions, LLC. Consider inviting Sam to speak or provide training at your next event. He is only an e-mail or phone call away. He travels from Panama City, Bay County, Florida. Would you like to have your own micro-site and business referral membership? Visit: http://www.WorkJockey.com

Author: Sam Slay
Article Source: EzineArticles.com

Optimal Exit Strategy – Boom-er Bust Era

The Challenge

The Boom-er Bust

This past year has been a difficult one for business owners seeking an exit. Is this the recession, or a reflection of a longer term reality? The answer, it seems, is that exiting business owners will need to engage a new reality for the foreseeable future.

According to an article published by Robert Avery of Cornell University in February 2006, “the majority of boomer wealth is held in 12 million privately owned businesses, of which more than 70% are expected to change hands in the next 10 to 15 years.” Only a portion of these businesses will successfully “cash out”, because of a fundamental oversupply of sellers.

Key Mistakes Sellers Make

Business owners make a mistake when they allow too little time to complete a properly executed exit strategy. Another mistake owners make is focusing on the “price” while disregarding the terms and structure of an exit transaction.

Other key mistakes business owners make in exiting their companies are:

o selling to the (only) competitor who approaches them
o not using experienced advisors (hoping to save transaction costs)
o setting expectations based on personal needs and without reference to the market
o failing to explore legitimate Positioning strategies

Buyers of middle market companies don’t “buy jobs” for themselves in the way that small business buyers do, they “invest” with the expectation of a return commensurate with the risk. Nothing enhances a buyer’s perception of “value” more than:

o evidence of sustainable growth
o a capable management as the key to managing the risk

The Business owner who engages professional advisors, plans thoroughly, and negotiates to ensure that the wealth transfer mechanism chosen most closely delivers on his goals, is the business owner who will have executed the optimal exit strategy.

Characteristics which Appeal to Buyers

If the fundamental laws of risk and reward prevail, only the least risky and most profitable businesses will change hands successfully. With buyers focusing on businesses which represent good investments capable of operating with little or no dependence on their owners, the following characteristics will be seen as desirable:

o Businesses which have scaled beyond a total dependence on the owner
o proprietary products, services or processes
o strong, remaining management
o defensible, differentiated market position
o stable, diverse customer base
o recurring revenue business model
o business growth (opportunities)
o strong operating margins
o manageable business risk
o quality business & accounting systems
o audited annual and timely internal monthly financial statements

Defining the Exit

Exiting is more than selling

Exit Planning is a process involving the development and execution of a series of systematic steps taken to allow both the owner and the “accumulated wealth” to be extracted from the business, via one or more of the numerous available strategies, including:

o Selling the business to Partners, Strategic Buyers, Investors, Competitors, International Buyers, or the Public
o Recapitalizing the business for Partial Liquidity
o Merging the business to achieve enhance valuation and/or marketability
o Transferring the business to Family, Management or Employees
o Gifting the business to meet personal and/or tax planning goals
o Liquidating or Partially Liquidating the business

Exiting is a Process, not an Event

The Optimal Exit will be achieved through the implementation of a managed process which includes:

o Establishing a business valuation reference point
o Clarifying “Life-after-Business” Goals
o Working with a Team of Specialist Advisors
o Preparing a written Plan
o Identifying and evaluating the applicable Alternative Strategies (Options)
o Executing any necessary Positioning or Preliminary Strategies
o Executing the selected Exit Strategy

Exiting is a complex subject with many moving parts. No single advisor is an expert in all aspects, so the process should involve inputs from a team of experienced advisors, and should address the possible need to re-position the business before going to market.

Setting Goals

Don’t Pick a Play until you know the Endgame

The Exit Strategy begins with the M&A Advisor providing a likely range of the pricing, terms and structure expected from a sale in the current market. The Financial Planner or Wealth Manager then develops a plan to invest the after-tax wealth extracted from the business to meet lifestyle and life-after-business goals.

For the majority of business owners, this newly liquidated “business wealth” will constitute a meaningful portion of the total wealth driving the financial, tax and estate plans. The key, then, to beginning the exit planning process, is to clarify the endgame, taking into account the likely value of extracted business wealth.

o Legacy Goals – what will have been your contribution?
o Lifestyle & “Life-after-Business” Goals – what do you want from the next phase of your life?
o Estate Planning Goals – how will you ensure that your estate passes to your heirs in the most tax efficient way?
o Exit Strategy Goals – based on all of the above, what are the priorities to be met by your selected exit strategy as to risk, time, wealth and income?

Selecting a Team

Play the “A” Team

The M&A Advisor should assemble and coordinate a team, including existing advisors where applicable, that will ensure:

o access to all appropriate options and opportunities
o being fully informed as to the merits and demerits of proposed strategies
o having expert counsel & representation

The Team must include the necessary knowledge, skills and experience in Mergers & Acquisitions, Corporate Law, Taxation and Financial Planning / Wealth Management. It may also include specialists in ESOPs, insurance, personnel and business consulting disciplines.

Writing a Plan

Planning Precedes a Successful Execution

“Failing to Plan is Planning to Fail!” Business owners should not expect to exit successfully in the next 10 years without figuring out how best to exit and what preparatory steps should be taken…. and should not assume they can wait until they are “ready”.

While the critical execution phase will not be a problem for most take-charge entrepreneur business owners, the planning for an exit will be foreign to them as “exiting” has never been their purpose. Their purpose has been to create and build, and to consider the exit (if at all) a “retreat”.

The M&A Advisor should prepare a written Exit Plan incorporating (1) a valuation of the business, (2) a statement of goals and objectives, (3) a review of alternative strategies (options), (4) an analysis of the gap between the goals and the options, and (4) strategies for closing the gap.

Reconciling Goals and Options

Having established an indication of the Expected Wealth Transfer (the after-tax proceeds from the business exit) on the one hand, and an estimate of the Targeted Wealth Transfer (the wealth transfer required to provide the personal life-after-business goals) on the other, the business owner and the Exit Team must now reconcile the two before selecting and implementing an exit strategy.

Whether or not the expected and targeted wealth transfer values are the same, the owner should review all exit options, and should also evaluate a number of “Positioning Strategies” for execution prior to implementing an Exit Strategy.

Reconciliation or “Closing the Gap” is an iterative process of evaluating combinations of positioning and exit strategies that will yield a release of wealth (the Expected Wealth Transfer) compatible, as to quality, time, value and certainty, with achieving the specified goals and the associated “Targeted Wealth Transfer”. Closing the Gap may also involve modification of the Targeted Wealth Transfer.

BUSINESS VALUATION + POSITIONING STRATEGIES = EXPECTED WEALTH TRANSFER

EXPECTED WEALTH TRANSFER ~ TARGETED WEALTH TRANSFER

TARGETED WEALTH TRANSFER + EXTERNAL WEALTH = TOTAL WEALTH

TOTAL WEALTH ~ PERSONAL GOALS

Where “~” equates Time, Risk/Certainty, Wealth/Value & Income

Again, notice that there are two key points of inflection for matching the exit with the personal goals:

1. the ability to vary the value, timing and certainty associated with extracting the business wealth
2. the ability to vary the timing, risk tolerance, estate wealth, living standards and other variables inherent in the personal goals

A key issue business owners face in considering “Positioning Strategies” is the very central question of the “Risk – Reward Paradigm”. Positioning strategies cannot be executed entirely without risk, but manageable risk strategies may deserve consideration if they serve to better ensure that the business wealth will be delivered in the context, amount, time and certainty needed to meet the identified personal goals.

Positioning Strategies

Corporate Value Enhancement Strategies

The Team should look at the corporate structure and governance mechanisms to consider whether the business is optimally positioned for the intended exit. For instance, an asset sale from a “C” Corp could result in tax obligations at both the corporate and the individual levels. Conversion to an “S” Corp may be advantageous, but the tax benefits vest over an extended period of time.

The make-up of the Board and any Advisory Board may also have an impact on the value perceived by a buyer. Management strength is considered below.

From the standpoints of “scale”, “product or market diversity”, management strength or any number of others, the business may benefit from a combination with or consolidation into another business prior to its sale. Alternatively, it may be desirable to spin-off one or more non-synergistic or non-performing divisions to increase profitability or allow greater management focus.

Business Value Enhancement Strategies

Business Value Enhancement Strategies generally influence valuation because of their perceived impact on risk, growth or profit margins. At the top of many buyers’ lists is the need to see a strong, experienced and motivated management in place. For Financial Buyers, this often includes the need to be assured that management has “skin in the game”, typically an equity interest.

Improvements in profit margins are strongest when they are reflected in trailing (historical) earnings. More recently effected changes, or even planned changes, can also influence valuation, however, if the benefit of the changes can be quantified and demonstrated. Because of the “multiplier effect” built into earnings-based valuations, a $1mm earnings improvement may increase the valuation by, say, $5mm.

It doesn’t seem entirely logical that an exiting business owner would have unexplored opportunities available for making improvements to the business. It’s a little like living with an outdated kitchen and upgrading just before selling the house. As in the real estate analogy, the stakes are higher at the time of exit, and the focus on marketability and valuation greater, so these opportunities often do exist..

Other Business Value Enhancement Strategies include:

o Reviewing & Revising the Revenue and/or Business Models
o Implementing Product / Market Enhancement Plans
o Expanding & Diversifying the Customer Base
o Securing title to Patents & Intellectual Property
o Commissioning of Financial & Operational Audits
o Strengthening or upgrading of Systems & Procedures
o Documenting or codifying Contractual Relationships (employees, vendors, customers, debt)

Business Marketability Enhancement Strategies

If growth opportunity, managed risk and strong margins are the foundation for building value enhancement strategies, then “clarity, transparency and certainty” are the engines which drive marketability. Business performance is clearly reported and accounted for, activities and status are transparent to the buyer, and all information portrays a level of certainty about the future.

Experienced buyers know that completing acquisitions is a time-consuming and expensive exercise. Buyers will perceive greater clarity, transparency and certainty, and therefore be more motivated to engage, when the seller has:

o Audited Financial Statements
o A Business Plan with a clearly defined growth path
o An in-place sector-experienced Management
o Current Market metrics and Analysis

Multi-Step Liquidation Strategies

Reference is made above to the “risk-reward paradigm”. This fundamental reality plays out in ways too numerous to mention, including strategies elected by business owners to both (A) take cash off the table to reduce risk / exposure as in a re-cap, and (B) assume reasonable risks for an enhanced valuation as in an earn-out structure. Consider:

o The lowest price is an all cash price (not often available in today’s market)
o Waiting before selling is risky
o Participating in an industry consolidation or roll-up increases the risks and uncertainty of an exit, but potentially enhances marketability and yields a greater valuation

A classic two-stage exit is accomplished by means of a “re-capitalization” in which an investor / partner / buyer acquires part of the business with an expectation to either buy the rest of the business or to market the business in cooperation with the remaining owner at a later time and at a greater valuation. The owner “takes some chips off the table”, but retains a stake, and usually continues to participate in management.

Merging the business into one or more other businesses before exiting can lead to increased marketability and even an improved valuation sometimes referred to as “multiple bump”. Consider a $20mm revenue business with earnings of $3mm which commands a valuation of $15mm (or a 5 multiple). Combining that business into a $100mm business with earnings of $15mm and which commands a valuation of $90mm (a multiple of 6), now values the original company’s participation at $18mm, and the consolidation strategy has yielded a $3mm valuation gain.

Transaction Structuring Strategies

Every step along the complex path of executing an exit strategy demands access to advice from professionals who have “been there” and who know the opportunities and the pitfalls.

Even though the structuring of the exit transaction comes toward the end of the process, structuring is included here as a “positioning” strategy because it impacts the value of the Expected Wealth Transfer.

Key structuring considerations include:

o Considerations of risk and reward (as discussed above)
o Tax considerations
o What incomes and expenses are “included” (i.e. belong to the transacted business)?
o What assets and liabilities are included or excluded?
o What pre-transaction liquidation, settlement or exclusion opportunities exist?
o What relationships between buyer and seller arise? (employment, advisory, landlord, supplier, partner, etc.)

The majority of middle-market businesses bought and sold derive their valuation, at least in part, from cash flow or earnings. The very key question then arises: “What assets and liabilities are essential to and an integral part of the ongoing enterprise, thereby supporting the established earnings flow?”

Exit Strategies

The business owner should have his M&A Advisor prepare an analysis of the fit and applicability of each of the exit strategy options to the stated goals and objectives. Not all options will fit every business or every set of goals.

Key qualifications for individual strategies might include:

Sale:

To Partners; Available funding

To Competitor; Manageable confidentiality; synergy

To Strategic Buyer Synergy; identifiable business purpose

To Financial Buyer; Management; financial performance

To International Buyer Scale/size; international orientation

To the Public Scale; integrity; prospects

Re-Capitalize: Growth; Cash flow; leveragability

Merge:

Target(s); strategic fit

Transfer: To Family Capability of transferee

To Management; Management strength; commitment & buy-in

To Employees

** Management; market strength; leveragability Gift
**Personal goals

Liquidate: Modest or negative return on assets

** Specific qualifications must be met as preconditions to accessing the designated tax benefits.

Benefits of a Planned Exit

The primary purpose of approaching a business exit in a systematic, goal-focused and planned way is to dramatically increase the likelihood that the outcome will be optimal to the stated goals.

The employment of a team of professional and experienced advisors will add a cost of, say, 3% – 6% of the wealth transferred, but will potentially add considerably more value by:

o mitigating against a failure of the mission
o dramatically expediting the mission
o Intermediating the process to eliminate the risks associated with direct negotiations between principals
o increasing the negotiated value of the mission
o reducing the income tax burden
o helping to reconcile the Expected Wealth Transfer to the Targeted Wealth Transfer

… not to mention providing the knowledge and human resources to navigate a complex and time-consuming labyrinth of decision making and task execution.

Peter Heydenrych, CEO
Corporate Finance Associates
T/ 949.457.8990
E/ peterh@cfaw.com
W/ http://www.cfaw.com/los-angeles/

Author: Peter Heydenrych
Article Source: EzineArticles.com

Transformational Leadership Theory – The 4 Key Components in Leading Change and Managing Change

Transformational leadership theory is all about leadership that creates positive change in the followers whereby they take care of each other’s interests and act in the interests of the group as a whole. James MacGregor Burns first brought the concept of transformational leadership to prominence in his extensive research into leadership.

“Essentially the leader’s task is consciousness-raising on a wide plane. The leader’s fundamental act is to induce people to be aware or conscious of what they feel – to feel their true needs so strongly, to define their values so meaningfully, that they can be moved to purposeful action.”

In this leadership style, the leader enhances the motivation, moral and performance of his follower group. So according to MacGregor – transformational leadership is all about values and meaning, and a purpose that transcends short-term goals and focuses on higher order needs.

At times of organisational change, and big step change, people do feel insecure, anxious and low in energy – so in these situations and especially in these difficult times, enthusiasm and energy are infectious and inspiring.

And yet so many organisational changes fail because leaders pay attention to the changes they are facing instead of the transitions people must make to accommodate them.

In my view it is the responsibility of the director leading the change to supply an infusion of positive energy.
The transformational approach also depends on winning the trust of people – which is made possible by the unconscious assumption that they too will be changed or transformed in some way by following the leader.

The transformational approach also depends on winning the trust of people – which is made possible by the unconscious assumption that they too will be changed or transformed in some way by following the leader.

This is often seen in military commanders and wartime political leaders. An example of this would be the way in which Lady Thatcher – as Prime Minister of the UK Government during the Falklands War in 1982 – was able to engender an enhanced feeling of British national identity amongst the UK population.

Sounds like this leadership style is ideally suited to change management, doesn’t it? However – this approach requires absolute integrity and personal behaviour that is consistent and resonant with your vision and message.

I can recall a ridiculous situation, at one UK company I was involved with, where the directors were attempting to effect a culture change of greater inter-departmental trust and communication yet still retained a separate directors dining room and specially allocated car parking places closest to the office front door!

OK here’s the important bit – how NOT to apply transformational leadership theory to change management

– Be preoccupied with power, position, politics and perks
– Stay focused on the short-term
– Be hard data oriented
– Focus on tactical issues
– Work within existing structures and systems
– Concentrate on getting the job done
– Focus processes and activities that guarantee short-term profits

Doesn’t all this just sound like a description of a typical good project manager with a task driven mentality?

And hey, I have nothing against this style of leadership and management. There is a time and place for the Attila the Hun school of leadership. I have done it many times myself and very effectively – and with no regrets.

But, this leadership style is not enough in a change management situation and particularly in the current climate.

The four components of the transformational leadership style are:

(1) Charisma or idealised influence – the degree to which the leader behaves in admirable ways and displays convictions and takes stands that cause followers to identify with the leader who has a clear set of values and acts as a role model for the followers.

(2) Inspirational motivation – the degree to which the leader articulates a vision that is appeals to and inspires the followers with optimism about future goals, and offers meaning for the current tasks in hand.

(3) Intellectual stimulation – the degree to which the leader challenges assumptions, stimulates and encourages creativity in the followers – by providing a framework for followers to see how they connect [to the leader, the organisation, each other, and the goal] they can creatively overcome any obstacles in the way of the mission.

(4) Personal and individual attention – the degree to which the leader attends to each individual follower’s needs and acts as a mentor or coach and gives respect to and appreciation of the individual’s contribution to the team. This fulfills and enhances each individual team members’ need for self-fulfillment, and self-worth – and in so doing inspires followers to further achievement and growth.

Transformational leadership applied in a change management context, is ideally suited to the holistic and wide view perspective of a programme based approach to change management and as such is key element of successful strategies for managing change.

And, to ensure that you ARE employing successful strategies for managing change – that are appropriate to your organisation – you need to know how to apply: (a) these transformational leadership skills, AND (b) how to apply the supporting programme management based processes – to ensure that you avoid the catastrophic 70% failure rate of ALL business change initiatives.

For more on this: ” Transformational leadership theory

I invite you to take advantage of this FREE download: Starting the Change Process

Find out the 3 main reasons for the 70% failure rate of all step change initiatives and how to avoid it. This FREE 29 page document offers a brief introduction to some of the key themes and key points that you need to consider in starting the change process.

Stephen Warrilow, based in Bristol, works with companies across the UK providing specialist support to directors delivery significant change initiatives. Stephen has 25 years cross sector experience with 100+ companies in mid range corporate, larger SME and corporate environments.

Author: Stephen Warrilow
Article Source: EzineArticles.com

Strategy Execution

Strategy
Steps to Success

It is one thing to develop a top business strategy and quite another to see that strategy effectively executed. Simply view this glaring figure from Fortune Magazine, which recently stated that “less than 10% of strategies effectively formulated are effectively executed.”

As this statistic easily shows, organizations too often fall within the majority rather than the minority when it comes to strategy execution. Many strategic plans are doomed during the initial stages of development because they lack foresight or fail to incorporate all areas of operations. And even if a strategic business plan is well-developed, seeing it out requires at least as much or even more dedication.

Like anything in the business world, strategy execution requires persistence, patience, and flexibility among many other things. With the everyday demands that come with running a business and performing ongoing work tasks, it is quite easy for strategy execution to fall by the wayside. Yet studies (and common sense) indicate that organizations able to execute mediocre strategies far outperform those with brilliant, yet poorly implemented strategies.

If strategy execution has proven itself to be so difficult, what can management teams do to better ensure success? They can focus on “Enterprise Strategy Execution,” a proven, ongoing process that encompasses a series of stages, steps, and methodologies, which together help organizations evolve toward a more performance-focused, strategically-aligned, results-driven culture.

So what exactly is Enterprise Strategy Execution? Basically, Enterprise Strategy Execution (ESE) empowers every employee toward a common strategy by focusing on a continual process of prioritization, improvement, and control.

In other words, ESE solidifies your workforce towards contributing to the development and implementation of a successful strategy via these three important parameters. Your organization plans and deploys strategic objectives during prioritization, while employees and management continually fix performance gaps in the most critical areas throughout improvement, and subsequently lock-in on improvement gains during control.

Each of these three major areas contains sub-sets or specific focus areas that help an organization progress:

PRIORITIZATION

o Exposure and Epiphany – where a critical organizational need creates an impetus for change (an “ah-ha” moment occurs within the leadership team)

o Executive Buy-in & Support – where additional leadership approval is gained to continue the focus on Strategy Execution (this typically occurs among the executives charged with developing strategies and/or carrying out operational tactics to achieve them)

o Strategic Planning & Mapping – during this phase, a strategic plan is developed to lay out the short- and long-term direction for the organization, and a “strategy map” is created, which distills the often-unwieldy strategic plan into a simple, visual depiction of this year’s plan. The strategy map is an important step in encouraging the organization to focus on the critical few priorities.

o Top-Level Balanced Scorecard – this tool takes the prioritization of the strategy map one step further, making the organization’s top objectives both visible and actionable by identifying ways to measure progress of the objectives against agreed-upon targets. This begins to take the Strategic Planning Process from what can be an academic into a tactical plan for achievement.

o Cascading Balanced Scorecards – where your organization builds a more comprehensive framework upon the foundation of the Top-Level Balanced Scorecard by creating layers of linked, related, but not identical versions of the Balanced Scorecard, down and across the organizational hierarchy. This results in organizational linkages and alignment to strategy, as well as a means for achieving cross-functional strategic goals.

IMPROVEMENT

o Performance Improvement – during this stage, your organization learns to systematically identify the root causes of critical performance gaps (made obvious through the cascaded Balanced Scorecard framework) and then execute improvement initiatives to permanently remove the root causes. By focusing improvement efforts on the priorities identified in the Balanced Scorecard framework, rather than on bubbled-up fire-drill issues, your organization learns to apply its valuable resources to the highest impact needs.

o Scorecard Business Reviews – where an organization’s business reviews transform from superficial examinations of stale reports into productive, real-time, scorecard-based reviews that allow executives and managers to drill down from high-level problem areas, across and through contributing factors to ensure root causes have corrective actions in place.

CONTROL

o Process Management – where leading, causal measures are identified, performance or process improvements are locked-in, and all information needed to manage the business process successfully and predictably are identified.

o Employee Goal and Compensation Alignment – where employees work with their supervisors to develop personal-level goals, such as training and development objectives that will contribute to departmental and organizational needs and strategy, rather than the typical employee development goals, which too often focus on an employee’s unrelated interests. Ideally these should be tied into incentive compensation programs, further emphasizing how an individual’s contribution impacts the organization’s top- and bottom-line performance.

o Budget Integration – where Strategy Execution is truly integrated with the day-to-day business operations and their financial foundations. This stage ensures that performance and process improvement projects deemed necessary for executing the current year’s strategy have the appropriate resources allocated.

As you can see, organizations cannot flip a switch and achieve Enterprise Strategy Execution overnight. Rather, it is much more of an evolutionary process, which must be approached in steps. Trying to tackle all of these areas at once is not feasible and rather counterproductive, since strategy execution requires the continual development of new skills and behaviors. But the good news is that each of these steps comes with incremental benefits. And an ongoing dedication to Enterprise Strategy Execution gives organizations the absolute best odds for long-term results.

Learn more about the specific tools, steps, and even history of strategy execution with the articles below, and visit ActiveStrategy.com for all of your strategy execution needs. No matter where you are on your own Strategy Execution evolution, we can help you improve your results faster.

Discover more about Strategy Execution [http://www.activestrategy.com/strategy_execution/]

Author: Richard Ferguson
Article Source: EzineArticles.com

Strategy Implementation

Are you really ready?

Nine out of ten strategies fail to be implemented successfully. We are starting to understand the very important lesson that implementing strategy is harder than creating the right strategy from the study of success and failures of previous strategy implementations.

When we triumph over implementation it can become a blue ocean strategy – that is a competitive differentiation and while there are many tools and techniques for crafting strategy there are very few for implementing it. Rosabeth Moss Kanter put it very eloquently when she said: “Ethical standards and our ability to groom future leaders inevitably decline. That’s why execution, or “making it happen,” is so important. Execution is the un-idea; it means having the mental and organizational flexibility to put new business models into practice, even if they counter what you’re currently doing. That ability is central to running a organization right now. So rather than chasing another new management fad, or expecting still another “magic bullet” to come along, organizations should focus on execution to effectively use the organizational tools we already have.”

To further support Rosabeth Moss Kanter comment, consider the fact from Barons that only 15% of the 974 programs reviewed in Fiscal 2005 were rated effective.

In addition, from 1917 to 1987 only 39 of the original Forbes 100 survived and only two outperformed the market, GE and Eastman Kodak.

Many strategies are expected to deliver growth. This creates even more issues due to the “Growth Paradox”. As businesses grow they create new and larger challenges which again emphasizes the need to be good at strategy implementation.

It is time to switch the focus from just crafting strategy to crafting and implementing it. If for no other reason, it is estimated that U.S. managers spend more than $10 billion annually on strategic analysis and strategy formulation. If 90% fail then that is a waste of $9 billion.
Strategy implementation is a relative new field that’s genesis was the high failure rate and lack of a framework. The field is about 10 years old and the research on the subject is just being gathered. There has been various research:

1. Kaplan and Norton, the originators of the Balance Scorecard, published also that 90% of organizations fail to execute their strategies successfully.

2. In a study of 200 organizations in the Times 1000, 80% of directors said they had the right strategies but only 14% thought they were implementing them well, no doubt linked to the finding that despite 97% of directors having a ‘strategic vision’, only 33% reported achieving ‘significant strategic success’. (Source: Why do only one third of UK organizations achieve strategic success?)

3. Harvard Business School teaches that at least 70% of all change initiatives fail.

4. A long term study by Newcastle University, (1973 – 1989) showed that business success is governed more by how well strategies are implemented than how good the strategy is to begin with.

5. The Economist Intelligence Unit reported that organizations realize only around 60% of their strategy’s potential value because of failures in planning and execution.

With the pendulum now swinging away from leader’s main responsibility of crafting the strategy to the recognition that they are also responsible also for its implementation and that can be even harder, there is a fast growing global interest in the field.

Strategy implementation is defined as the actions an organization takes today to deliver the strategy, tomorrow. The key word is “action”. People in an organization are always taking action.

The critical question is, “Is it the right action?” Are the actions that their staff members are taking today driving the implementation forward? We know staff members are always busy and frequently have more work than they have hours in the day but strategy implementation is the collective individual actions taken every minute of every day by every staff member. If there are not enough of the right actions being taken then the strategy is heading for the graveyard.

“One of top management’s biggest blind spots is the failure to recognize that any significant shift in strategy requires changes in day-to-day activities throughout the organization. Small shifts may require only minor changes. Significant shifts require significant changes-from subtle to sweeping-that can only be successful if implemented systematically. And people at all levels can either help or hinder the transition.”

Executing Your Strategy, Morgan, Levitt & Malek

Leader’s also have a fundamental responsibility to create the right conditions in the organizations. They must, for example, encourage the right people; clearly communicate the strategy objectives, create the Key Performance Indicators (KPIs); align the culture to the implementation; redesign processes, change the way staff members are reinforced to encourage the right behaviors and actions for the new strategy to be implemented and then review the strategy implementation every two weeks. This can be an overwhelming list but if it was easy to deliver the promises of a new strategy then nine out of ten implementations would not fail. And the pass mark is when the leaders deliver at least 50% of the objectives of the new strategy.

The leaders must identify what needs to be done and where to put the organization’s focus.

Although it is not unheard of for two organizations to have the same strategy, for example number one in the industry or differentiate through customer service or leading product, each organization’s implementation of the strategy is unique and the leader must first identify what needs to be done and then lead staff members to perform the required behaviors and actions. The leader’s role is to translate the strategy in to daily actions that staff members can take. Strategy implementation is not the same as change management.

Change management is a systematic approach to dealing with change, both from the perspective of an organization and on the individual level. It is applied as the solution for running out a new sales program as it is for strategy. Strategy implementation is a specific approach which drives the right actions today to deliver tomorrow’s strategy. The challenge is for leaders to stop doing what doesn’t work.

Change management is flawed as a methodology for implementing strategy as the research is revealing. If we keep doing the same thing then no wonder we keep failing and the strategy fails! It is time to change the way we think about change. We must go beyond change management as we know it and focus on implementation.

Consider that 30 years ago management was about control and change management was designed as command and control. But business has dramatically changed. We have moved to empowerment and a teaming methodology. Many leaders use change management out of ignorance, as they are not aware of an alternative and end up taking the wrong the actions.

After crafting the strategy for the organization’s future the leader’s role is to ensure that staff members are set up for success in its implementation by being guided by the leadership on what actions to take. The problem on many occasions is that even the leaders do not know what the right actions to take are. In addition leaders often have the wrong mindset. Leaders often underestimate the implementation challenge and what is involved. They believe that once they have created a new strategy, the hardest part is over. Not true. The hardest part – implementation – is just beginning.

In the 10 per cent of organizations that successfully implement their strategies the leaders double the effort compared to what they had spent crafting it. In some cases, leaders are cognizant that implementation requires extra effort. In reality, however, very few are able to free up valuable time and resources to do justice to the implementation process. In other cases, leaders become so caught up in managing the day-to-day business that they lose sight of their goal to implement the new strategy and as such are taking the wrong actions.

The research in the field of strategy implementation started to become part of the mainstream awareness in 1999 when Fortune Magazine ran a front page on “Why CEO’s Fail”. The article, which has since been quoted on numerous occasions, explained that “organizations fail to successfully implement strategy not because of bad strategy but because of bad execution”. This was one of the first times the field of implementation (execution and implementation are interchangeable), had received major exposure.

In 2002 Ram Charan followed up the article by co-authoring with Larry Bossidy Execution: The Discipline of Getting Things Done, Crown Business, 2002. The book made execution a common word in business conversations. Since its publications there has been a greater focus on the topic by leaders and a handful of books and articles have followed on the same topic.

There is, however, still a vast gap of knowledge, techniques and tools in the field.

For much of the last 40 years the focus in business has been how to create the right strategy and quite rightly. It is the leader’s responsibility to create strategy, it is what they are paid the big bucks for and it is critical to the success of the organization that they get it right. A plethora of tools and techniques have been created to assist in the strategy formulation. Hundreds and even thousands of books have been written on the topic and in every city, consultants are standing by to offer leaders their support and wisdom.

As a result we have improved at understanding strategy and how to create it. Although it is worth noting that even strategy is still being developed. Consider the simple fact that we do not have a globally common definition for the word “strategy”.

There is a change in the wind. In the last ten years we have started to ask, “What happens after we create the strategy and why are there so many failed strategy implementations?” These questions are just starting to be asked because we are just discovering from the research that so many strategy implementations fail.

Instinctively most leaders know that implementation is tough and can recall at least one corporate wide implementation; they participated in, that failed. It is, however, only in the last few years that strategy implementation has started to become a recognized field in its own right. We are starting to understand that implementation fails not because we have the wrong strategy, in most cases, but because the challenge of implementing the strategy is tougher than most CEOs and leaders anticipate and they underestimate the whole challenge.

Professor Joseph Bowler of Business Administration at Harvard Business School http://harvardbusiness.org/ recently said, “One of the criticisms we would have of some of our colleagues who have studied strategy (and some consultants who advice on strategy) is that they assume that once you design strategy it gets executed. They don’t look inside the process and realize that it’s much more complicated.”

 

Leadership And Culture

It is the responsibility of leaders to bring about shifts in behavior by having both a vision of integrity for the organization and a strategic plan for ensuring such integrity. This vision must be articulated in a way that is relevant and actionable by employees. A vision that aims too high will not be taken seriously while one that is too pedestrian will not motivate employees. With the spectacle of court TV to avoid, what should a board of directors use to generate a proper picture? The style (or stance) of leadership the board wants to promote demonstrates a capacity to energize subordinates and the public to believe that the organization has risen above its singular contractual obligations and performs at the level for mutual benefit of civil society and stakeholder.

The principal finding of a McKinsey Quarterly survey of more than 1,000 board members is that having focused for a time on accounting-compliance issues, boards are now determined to play an active role in setting the strategy, assessing the risks, developing the leaders, and monitoring the long-term health of their companies.

At one level, the survey underlines the way the Sarbanes-Oxley Act is holding boards–not only in the United States, but also around the world–more responsible for meeting high standards in reporting and controlling the financial affairs of their companies. Yet the implications for governance are even far more reaching. To achieve as much involvement as directors say they want, they will have to use their time in meetings more effectively and develop a new understanding of their roles and responsibilities; otherwise, they will give management the impression they intend to take on day-to-day roles. Moreover, the composition and culture of boards, as well as the agendas of board meetings, will require fresh thinking.

Understanding and choosing the style of leadership necessary to create the desired environment for the organization begins with understanding the various leadership roles available to organizations today.

Leadership as Management: Developed by Friedrich Taylor, this is a managerial role that asks leaders to ensure group activity is timed, controlled, and predictable. This mind-set says little, if anything, about the leadership task of building shared values, trust, and vision. It is silent about the animating essence of business and business people. By relegating workers to the status of “cogs” in the corporate machine, it has scant appeal to the better educated, more aware, and ever-more-wanting people entering the workplace. The need to be rapidly responsive to changes in customer demand for products and services places a strain on the rigid, procedural, control mechanisms developed by this managerial mind-set — to produce traditional outputs with multiple units of the same product to high tolerances and low margins.

Leadership as Excellent (good) Management: This view of leadership, while maintaining the mechanistic operational inclination of the firm, changes the character of the core follower (responding to the pull of the quality movement) and enlarges the domain of the manager. Essentially it retains the idea that leaders and managers do much the same thing. It limits the scope of leadership to just one function — quality improvements — and ignores the full range of capacities of both leader and follower. It does not address the needs of the corporation beyond a focus on high quality.

Values Leadership: This conception of leadership is rooted in the reality of human nature and conduct. The essential human nature is simple; everyone has values and these values trigger behavior. Even as it recognizes the use and importance of values in shaping behavior, out of a false desire to let each person choose their own values, it refrains from advocating any values or even discussing relative merits of alternative value systems. Indeed, it teaches that any value is equal to any other. So it recognizes that values are shaping our lives but fails to address that we do not know how to consciously set our own values systems or evaluate the merits or results of those we see in others. Values leadership clearly has set aside a space to articulate values but seems too timid and unsure to make full use of the space.

Trust Leadership: This view sees its role not so much as a function of the individual leader but as a condition of the group culture. Leadership may be spontaneous at times. Most often, it is a result of specific, planned actions to create a culture conducive to internal harmony and interpersonal trust. The leader’s task is to build a culture of shared values where people can come to trust each other enough to sublimate their differing values so that they can work together. Those accepting this leadership reality see the need for a unified, effective, harmonious culture characterized by mutual trust that allows leadership to take place. It is a collective activity, shaped and controlled by the values-laden notion of harmony as defined by its history of domination by the majority culture. Without a broad and adroit set of critical skills, the trust leader’s search for unity will tend to exclude many important insights, tactics and especially people. This view is likely to accept conformity as consensus or, even worse; it needs conformity and needs to call it consensus.

Spiritual Leadership: This view concludes that leadership is a function of the leader’s concern for the whole-soul — the inner sense of spirituality of self and others. The belief is that leadership comes out of the leader’s true self — his/her inner spiritual core. This inner framework, not facts or situation, determines what is good and true and beautiful, and therefore worthy of action. From this view, the notion of only looking at profit and productivity is unsatisfying as the guiding values focus on feeding the soul. It presumes that people are hungry for meaning in their lives and feel lost and empty. To fill this void, it attempts to blend an internal representation of the soul and the firm’s economic needs. This view represents one of the oldest of rationales in Western culture, that of Emanuel Kant. It understates the social value of being the best for an external customer in favor of the inner most space of the internal market — the soul. It may be true that the key operation is metaphysical but to link to a unified soul denies the multiplicity of the forces in action. What this view is especially good at is focusing all of its attention of an empowering relationship. A leader of a metaphysical experience defines a sense of one’s own spirituality and that of co-workers so as to have a greater transformational effect on the organization, its forms, structures and processes.

Contextual Leadership: This view is a celebration of “maturity”. Contextualism is a view of life that takes seriously the idea of maturity — a wide base of knowledge and a life filled with challenge. Maturity expresses a commitment to courageously choose to define and protect ones social space in the presence of hostile forces while maintaining an adroit process of self-criticism and accountability for those choices. A wide base of knowledge infers more than a mere accumulation of data but rather an ongoing quest to be conversant with the many discourses and varied articulations they entail. Challenge-filled refers to a belief in a bursting forth of possibilities. This belief in open possibilities, limited by responsibility, explains the relationship between management and contextual leadership. Simply put, contextual leadership calls into question the very core of historical management rationale that emphasize rules, universality, and impartiality over contingent ways of reasoning that emphasize relationships, particularity, and partiality. Most management systems seek to transcend the individual. Contextual leadership delights in the play of unfixedness, incompleteness, and temporally. From this view, the spectacle of the open forum represents the true reality of our time. All other versions of reality that call for the unity, objectivity, or a wholeness of social bodies as presupposed in most management systems, are systems used for domination and repression.

Style Creates Context: Each leadership style brings distinct philosophies and value systems to the practice of operating and leading an organization yet they all fail to address the experience of the leaders themselves. We believe that the keys to effectively leading transformational activities in an organization are first to recognize one’s own leadership style along with its strengths and weaknesses. Second, to identify the likely opportunities and issues created within the organization’s culture and its ability to be transparent and effective in and for society associated with that leadership style. And finally, to develop a point of reference, or “place to stand,” that allows leaders to act with confidence and consistency.

While the activities of transforming the ethical and compliance culture of an organization are important, fundamentally, the approach leaders take to demonstrate integrity and transparency will determine what the real cultural context will be.

It’s Up to You: Your leadership, its style and basis, create the context for the organization and guide the development and evolution of your organization’s culture in powerful and far reaching ways. As leaders, it is easy to become consumed by the day-to-day activities required by our roles within the organization. Meetings, clients, staff, and those we report to, all place demands for time and attention. Without the ability to create space for reflection and purposeful preparation, we simply lead based upon our historical experience of other leaders or, even worse, simply take as a given the historical culture of our organizations. While this may have been adequate in the past, the dynamics and demands of modern social expectations and the heightened expectations of compliance and oversight systems make that approach inadequate for the future. Whether you exercise your leadership as part of a Board of Directors, as a C-level executive, or as a leader responsible for a segment of an organization, you, more than any other person, have the ability to create a powerful context and culture that celebrates transparency, receives and demonstrates trust, and effectively guides employees as they make the myriad daily decisions necessary to grow and evolve your organization. Ultimately, compliance and risk management is a product of the choices made by individuals. Their guide through this minefield of temptations and challenges is the cultural context you have established supported by the policies, practices, and resources available to them.

I’m what my handle states – an Oldude. The problem with this acknowledgment is my thinking and ambitions have not quite got the message of my “oldness”. I’ve started an online behavioral clinic and my rant is about how to improve long term happiness – For the World. My thing, I believe I can change the world – isn’t that a hoot. The way I intend to change the world is to foster a wider and deeper appreciation for “hipness”: The daring, flair and grace of Jay Z; the political savvy of Cornel West; the creativity of Mos Def with the business and cultural daring of Richard Simmons. I’ve thought enough – being a philosopher of sorts – and trained hard with some of the sharpest minds ever on the planet – Cornel West and Michel Foucault to know the total absurdity of trying to change the world – but I do and I will. There it is showing my age again.

Author: Levy Rivers
Article Source: EzineArticles.com

How to Keep Workforce Efficient During Periods of Change and Transition

The most important factor in the outcome of any major reorganization is the human factor. “There is no such thing like over-communication during phases of change”. Even if all facts are presented in an all-hands-meeting, messages require frequent repetitions. Employees need to receive and understand the information provided. The following guidelines for executives, managers and supervisors help to improve communication during periods of change.

What is the reason for change – and why now? Even if employees may know the difficult conditions that led to the new situation, many adhere to the past. They may blame external circumstances rather than internal factors for it. The real situation needs to be explained in clear and credible language. Shorthand statements like, “With this measure we will increase our equity base”, even if correct, do not help to understand why change is necessary now.

Repeated information sharing. Often, people do not hear or understand a message right at the first time. This can be overcome with repeated communication – despite the fact that managers’ time is already stretched thin during periods of transition. Information not provided or understood will be replaced with grapevine. Obviously, such substitutes distract employees even more.

Frank information and courage to say: “I don’t know”. In situations of massive change, employees weigh every word from management. It is best to ask employees if they want to hear available information even if it may change in the future, or if they prefer to wait until information has become fact. Employees will assure that they want to hear all available information.

Careful use of language. Phrases like, “it is business as usual” are far too often used by management. The intention is well meant, soothing and taking away employees’ fears. The situation during major organizational change is however not at all “usual”. Managers who resort to such phases may easily be stamped “incredible”. Statements like, “let’s stay focused on work” are much more advisable under such circumstances.

Assurance of what is not changing. Even if the focus is on the transition, explaining which characteristics of the former organization remain helps reducing employees’ fears and makes it easier for them to cope with stress that inevitably accompanies transitions.

Information over form. Information must not be delayed because forms are not available, or the final presentation template has not been agreed to. If information is valuable to employees, it should be provided as soon as possible. Even if available information is incomplete, providing two memos is better than causing “information delay”. Employees will always appreciate management’s efforts to get information to them as soon as possible, even if the form is not yet perfect.

Diligent and realistic transition planning builds the foundation for a successful, in time realization. Execution as a team leads to motivated employees, which results consequently in more efficient, more competitive organizations. Employees build the backbone of most companies. They carry pride in what they do and have usually very keen interest in contributing to make “their” company successful. Communication is a very simple, yet very powerful element of change management to make this happen.

Deiton.

Wolfgang “Deiton” Damm can build on over 25 years of management experience in different industries. With engineering and business degrees, Deiton embraces managerial, organizational, marketing and technical disciplines. He is author of a book and patent holder. Deiton writes articles and blogs about better business practices.

Author Links
Blog URL: http://deiton.com/Wordpress
LinkedIn: http://linkedin.com/in/wolfgangdamm

Author: Wolfgang Damm
Article Source: EzineArticles.com

Strategy: Simplified

We all read about it regularly & gain insight into the depths of one of the most important aspects of the business world, strategy. But what we generally come across is probably a jargonized version. All the academicians, consultants, researchers & writers talk & describe strategy in a very complex way, as if it were something that was complex & hard to imagine monster of some kind. But the fact is, Jargon sells. So everyone writes about it in a way to make it look impressive & to increase its cost price. In the following article, I will describe corporate & business strategies in a way which everyone will understand easily. I will demystify the jargonized phrases & explain each sub topic in a simple way, as I believe in the ‘keep it short & simple’ ideology of explaining things & concepts.

MEANING:

Strategy!! According to the online Oxford dictionary (oxforddictionaries.com), strategy means:
A plan of action designed to achieve a long-term or overall aim
The art of planning and directing overall military operations and movements in a war or battle
The Origin of the word dates back to the early 19th century: from French stratgie, from Greek stratagia ‘generalship’, from stratagos.

The underlined definition (first one) above is the simplest meaning of the word. So, if we dwell a bit deep into the meaning of the sentence itself & try to read between the lines, it suggests that Strategy is:
1. A plan of action
2. To achieve a long term aim

In other words, the 1st sentence suggests that Strategy is a plan of the actions.
Now think a while on that & some questions arise regarding the 1st part of the sentence:
Plan???
What plan?
How is it decided upon?
What is the plan set for?
Who sets the plan?
Why is the plan set?
What are the elements of the plan?
When is this plan set?
What are the actions?
How are they decided upon?
Who decides these actions?
When are they decided?
Why do we need to take actions?
How are they related to the long term goals?
Etc. etc. etc. One can go on & on.

The second part of the sentence talks about the long term aim to be achieved. Here too, like above, some questions arise:
Long term aims for what?
What are these aims?
How long is – long term?
Can they be short term also?
How short?
What are these aims for?
How are they decided upon?
Who sets them?
Why are they set?
How is they decided upon?
What are the elements of the aims?
When are these set?

The list of questions above is basically asks the following questions, regarding the aims & the duration (also called strategic horizon period):

What?
Why?
How?
When?
Who?
For Whom?

So, whenever you hear the word strategy, it would mean that a plan is being talked about. Someone saying ‘I look after the communications plan for the XYZ Corporation’ would mean that he/ she takes care of formulating & implementing the communication plan to advertise or communicate about XYZ Corporation or its products.

Let us see an example. Suppose I tell you to go to the supermarket & buy some vegetables. What is the process you will follow considering you are in your own home? Let’s see some questions to be considered:
Which vegetables?
How much?
What’s the budget?
Who will give the money?
By when are the things required?

Etc. etc. etc. Now if you get answers to all the questions & finalize the plan to go & buy the vegetables, it would be called your ‘vegetable buying strategy’ for that day.

Now if I change the setting a bit & say that you are in my house in a different country. Would your approach change? Would the list of questions increase? I am sure it will.
Which vegetables?
How much?
What’s the budget?
Who will give the money?
By when are the things required?

New extra questions:

Where to buy from?
Name of the shop/ store?
What is the local language here?
Do people speak English?
o Can you write it down on a piece of paper in the local language, in case someone doesn’t understand English?
o Can you jot down the list of items in the local language for the store?
What is the currency & denominations?
How to get there?
o Personal transport

Is there enough fuel for the round trip

Where will I park the car there?
o Public transport

How much money would be required for the round trip?
How much time will it take to go there?
Do you have any other information which might be useful to me?

Etc. etc. etc. Now if you get answers to all the questions & finalize the plan to go & buy the vegetables, it would be called your ‘vegetable buying strategy in new market’ for that day.

THE BASIC THOUGHT PROCESS:

The basic thought process to develop a strategy is to think about & answer the following:

Where are we now?
Why are we here? What are the good things & the bad things that have happened in the past due to which we are here?
Where do we want to go?
What do we want to achieve?
Why?
How?

There are many questions to be asked, a lot of data to be gathered, loads of information to be culled out & a good deal of analysis done before one can answer those questions.

TYPES:

So, now we know the meaning & elements of strategy. But what are the types?

Even though the word strategy can be added as a suffix to any term (like technology strategy, innovation strategy, resume strategy, people strategy, road crossing strategy etc.) but, from a business perspective, it’s mainly classified into:

CORPORATE STRATEGY

It talks about the plans of the corporate unit as a whole. A corporate unit consists of many businesses & is in-charge of running them profitably. Corporate groups generally have varied business interests& that’s why they set up many businesses in different sectors to leverage the business opportunities that come up from time to time.

Sam Walton saw a big opportunity in retail & thus set up Wal-Mart. Nokia saw a huge opportunity in mobile market & set up its handset making factory, totally changing focus from its fishing rod making business it was previously in. GE & Virgin groups run hundreds of businesses under their corporate structure.

BUSINESS STRATEGY

This means to plan for successfully running a business. It may be a part of a corporate structure or may be a standalone business.

Body Shop is in the business of personal cosmetics whereas Nissan is in the automobile sector. Whereas Nissan is a part of a corporate group, Body Shop is not.

FUNCTIONAL STRATEGY

This takes care of the individual departments/ functions in a business, like marketing, finance, human resources etc. Every function has various elements which form an integral part of that function. For example, sales, after sales, product, advertising, pricing etc. are the elements of the marketing function. Each of these elements is run by managers & their juniors. These people are often called operational resource because they are the ones who do the job or perform the operations. There is strategy for each of these elements also, but it is called by a different name, objectives. Each of these elements takes care of their objectives. It is worth mentioning that the strategy, goals & objectives, all are measurable & can be quantified against set targets.

Vision & Mission of the group guides the strategic process. The corporate strategy is aligned to the purpose of the organization.

The various interlink-ages, which joins each of the types described, & the strategy framing process, above are:

1. Corporate strategy
2. Business strategy
3. Functional strategy
4. Elemental strategy
5. Individual goals

The process flow depends on the organizational culture. Some follow it 1 to 5 (the drip down approach) others set it from 5 to 1 (the bubble up approach). In the former, the corporate strategy is set & then the chain follows down to individual objectives. For example the Chairman says that next year we shall grow by 5% in our turnover (now he doesn’t say it just like that. He has his own way of gathering information about the economy, the sector etc. & based on these facts he draws the conclusion). This statement sets the process & targets for businesses which may be a part of the group & it goes down to the level of setting the individual targets.

In the latter, the individual targets are set & they lead to the setting of the corporate strategy. For example, the individuals in the sales department are asked to set a target for themselves, in consultation with their managers & thus collating of all targets gives a basic guideline for setting the corporate strategy.

No matter what the approach is, every objective & target is linked to the overall objective of the firm, the corporate strategy which in turn is aligned to the Vision of the group.

DURATION:

The duration is also called the strategic horizon period.

There are short term & long term goals for all the five types of interlinking elements, mentioned above. The duration depends on the organization. Generally short term refers to less than one year & long term refers to a period of five years.

ANALYSIS TO BE DONE:

There are some analysis that have to be done before we can actually draw a strategy. These are classified as:

Internal analysis

o Strengths

What are our strengths?

o Weaknesses

What are our weak points?

o Core competence

What are we best at?

o Product portfolio analysis

What is our product range & their performance from a financial& growth aspect?

o Market portfolio analysis

Which markets are we serving & what is their performance from a financial & growth aspect?

External analysis

o Opportunities

What are the current opportunities we can take leverage of?

o Threats

What are the threats that need to be seen & considered? & in which areas?

o Competition

How is competition doing vis–vis us? Who are the players?

o Economy

How is the economy performing? What is the forecast?

o Legal
Are there any policy changes recently? What is the forecast?

o Socio cultural

Is the demography of our target customers stable or is it changing? How?

o Political

What is the political scenario & forecast? What are the issues & stability factor?

o Technological

Is the technology we are using current? What are the new technologies in the market?

THE STRATEGY PROCESS:

Data gathering
Data analysis
Data refinement
Insights
Implementation
Review progress
Further refinement

THE BOTTOM LINE:

Corporate Strategy setting is basically looking a group from a bird’s eye view. & similarly business strategy would mean to look at a business from a bird’s eye view. If you start imagining this, then you would only see a business unit & its functions & elements. How are they performing, & how they can be improved? This is the basic meaning of strategy.

People who frame strategy are information seekers & data analyzers. Above all they are great thinkers. They have the ability (or develop it) to think the very minute details of all the elements that form strategy at any level.

Information is the key to all decisions. Only time & results decides the rightfulness & the effectiveness of a decision because there are infinite variables & we cannot take care of every one while forming a strategy. All we can do is to put a sincere effort, be prepared for any situation & be responsible & accountable for our decisions.

Information is the key to success & more important than that are smart thinkers.

Gurdeep S Raina
New Delhi

Author: Gurdeep Singh Raina
Article Source: EzineArticles.com