the end game » business story

family business and a joke

Michael Oleksak — Wed, 17 Nov 2010 15:09:02 +0000

An owner walks up to his son and says, “Son, I’ve been thinking, I’d like to give you half of this company. I’d like you to learn the business starting on the plant floor with production.” Son says,” Dad, that’s not really interesting to me.” Father says, “OK, son, work in the office with me and learn finance, sales and marketing.” Son replies, “That doesn’t sound very appealing.” The father, frustrated, then said, “Well, what do you suggest, son?” The son replies, “Why don’t you just buy out my half?”

Former owner and now family business advisor Scott Wakeman, told this joke at our first Owners Academy session at last month’s Exit Planning Exchange (XPX). At this event, owners were invited by XPX members to hear other business owners talk about their various experiences in owning, operating and exiting their own businesses.

Another former family business owner, and now investment banker Andy Crain, explained how his family was somewhat insular and less inclined than other companies to get good outside advice from a board of advisors. This is actually common with family businesses – to keep it ‘inside’ and figure it out without help from the ‘outside’. Luckily, Andy isa smart guy and was able to lead the family business out of trouble, but some family businesses aren’t so lucky.

Maybe not everyone would find Scott’s joke to be that funny. But I think it proves the point that family business is such a unique and special entity. You can understand business, but that doesn’t mean you understand the first thing about a family business – so maybe it’s safer to consider this an inside joke.

Reading List: Sustaining the Family Business by Marshall B. Paisner

Michael Oleksak — Tue, 24 Nov 2009 23:36:43 +0000

A few years ago, Marshall Paisner, founder of the ScrubaDub car wash franchises in Massachusetts, passed the ownership of the business to his two sons. In his book Sustaining the Family Business written after the transition, Paisner reveals the process he used to bring his sons into the business.

He shares recommendations for others on how to decide whether this is the right course of action, and offers case studies of many other businesses. Paisner is passionate about how to successfully keep a family’s next generation in the business. This is an enlightening read for anyone interested in this large segment of American business and why it is a viable exit strategy when done correctly.

Reacting in Tough Times

trekco — Tue, 24 Nov 2009 20:41:41 +0000

The stock market has cratered. GDP figures are negative. The outlook is bleak. While some are playing the blame game, you have to deal with the new realities every day.

Like many of you, our clients have reacted to the credit crunch and the continuing decline in spending. Here are a few examples of steps they’ve taken so far:

A construction-related business has decided to unload any excess inventory in the warehouse by selling it through the Internet. This should make their end-of-year physical inventory easier, clean out some space for new materials, and generate cash flow.
A service business has reduced the last steps for on-boarding new clients, shortening the documentation process for clients to go live. This approach hopefully will reduce the risk of losing a client at the last moment and speed up the billable period.
A marketing agency has redoubled its sales efforts. This means more networking, greater attendance to industry events, and the calling-in of some favors. These efforts are designed to offset the potential loss of clients in coming months.
A video production company has lost three people through normal attrition since the summer. Some of their development and production duties have been assumed by others internally and others outsourced. But they have held off hiring full-time replacements.

Many industries will have no choice but to cut jobs. A recent Boston Business Journal survey estimated that 7,200 jobs will be lost in finance alone in New England. Nationally, the manufacturers and distributors of high-ticket items like big boats and automobiles will surely suffer. Most small to medium-size businesses will tighten up and try to survive. More than likely, the ones that do will emerge leaner and stronger, ready to take advantage of the inevitable upturn in 2009. Mike Oleksak 2008

Upgrading Tangible and Intangible Infrastructure

trekco — Tue, 24 Nov 2009 19:55:53 +0000

Changing Cars on a Moving Train -

This particular assignment involved a company that had grown rapidly. Its tangible and intangible infrastructure was maxed out—they had outgrown both their facility and their systems. Tensions were running high and some people had reached the breaking point and left the company.

The physical challenges were the easiest. The search and move to a new site took, from beginning to end, seven months. With more space, they had room to do what they needed to do. There wasn’t a lot of adjustment needed.

But the intangible infrastructure was harder to change. Even though the systems (software, hardware and business processes) did not meet the needs of the business, they were familiar. And nobody wanted to change when the company continued to operate (thankfully) at higher and higher revenue levels—certainly not an over-taxed staff that already had too much to do. But it was the correct decision.

It was only later, after we had nearly reached the end of the assignment, when we came up with the train analogy. But in retrospect, we realized that it was a good description of what we had helped them do—replace their systems bit by bit, one car at a time. It was never a drastic enough change to necessitate stopping the train, but significant enough that (when it was all over) there were new buildings, software and processes to replace the old ones. The new changes meant the train was prepared to handle an even faster speed going forward. - Mary Adams 2007

Reading List: Midas Managers by Rob Slee

trekco — Sun, 22 Nov 2009 19:50:41 +0000

Rob Slee is a fun and thoughtful author. The power in his writing comes from his twenty years as a middle-market investment banker. His first book, Private Capital Markets, filled-in a huge gap in business literature on the private markets, and we have actually seen it being used as a business textbook. That book methodically outlined the functioning of the private capital markets that support the biggest, but least noticed segment of our business markets.

Midas Managers shows the power of story to teach. The eighteen stories in the book describe some of the all-star managers that were clients over the course of Slee’s investment banking career. After telling each story, Slee converts the lessons into a formula that, he hopes, the reader can replicate. The stories are broken down into three major categories: Arbitrage, Business Models, and Private Finance.

Slee has a lot of passion for helping American businesses succeed in a competitive global market. That passion comes through in his stories. But he also has a great sense of humor that is sprinkled throughout, especially in the “Investment Banker Man” cartoons that he also wrote.

Many of our readers are, like the entrepreneurs profiled in this book, private business owners and managers. But everyone will be able to relate to these stories which are told from their point of view, in the context of their lives and about their journey to create value. Slee expresses something we are always preaching in an especially succinct way, that “value is just unrealized wealth.”

You can read more about this book on the book’s website.

Industry Snapshot: Something More Than Bullets

trekco — Sun, 22 Nov 2009 19:08:05 +0000

Ever since we read Made to Stick, we have been reading the authors’ blog. They pointed their readers to a presentation contest sponsored by a slide sharing website with the caveat that they thought the winners were beautiful but probably not necessarily “sticky” or memorable. Nevertheless, for those of us that are struggling to leave something behind other than bulleted lists as a form of communication, these presentations are thought-provoking and inspiring. We first were turned on to the idea of using stock photo sites (istock.com being the one we use the most) some time ago by a consultant who specializes in presentation communication. His advice is as salient as ever and meets the standards set by the Heaths: Tell a good story and use pictures on your slides to connect with the reader.

Reading List: Made to Stick Why Some Ideas Survive and Others Die by Chip Heath & Dan Heath

trekco — Sun, 22 Nov 2009 16:55:35 +0000

The jacket cover of this book is embossed to look like it has a jagged piece of duct tape stuck on it. This image tells you a lot about the communication strategies that these brothers and co-authors espouse—that ideas that succeed are easy to understand and memorable. One of the most powerful concepts they outline is the “curse of knowledge”—that what we know gets in the way of our ability to communicate what is really important. They break through this curse with six principles for sticky ideas:

Simple
Unexpected
Concrete
Credible
Emotional
Stories

There is no way to summarize the many, many great stories in this book that help you understand and remember these concepts. There isn’t a businessperson around who wouldn’t benefit from this book.

To learn more about this book, visit the authors’ website.

Reading List: Freakanomics By Steven Levitt and Stephen Dubner

trekco — Sat, 21 Nov 2009 21:58:38 +0000

Released about six months ago and currently number two on the New York Times Non-Fiction bestseller list for business books, Freakonomics asks tough questions and tries to answer them through analytic methods used by economics. Freakonomics is a light and entertaining read. It tackles topics like drug dealing, crime rates, real estate agents, children’s names, the Ku Klux Klan, and life insurance. It offers statistical evidence to support its findings. What we like about the book is that it uses statistics to find answers, as opposed to having a pre-conceived notion of expected results and crafting statistics to back them up. Some of its conclusions (such as the effect of Roe v. Wade on the crime rate) have come under fire from critics, but if you read Freakonomics to learn new thought processes, it’s worthwhile.

To learn more about this book, visit the author’s web site at: www.freakonomics.com.

Industry snapshot: Visual Presentation Techniques

trekco — Sat, 21 Nov 2009 21:49:39 +0000

We attended a recent presentation at the Society for Professional Consultants given by Brian Mullins, the President of Visually Speaking.

Brian made a powerful case for taking a tack that is different from what most people do when preparing a PowerPoint presentation. He recommended the following steps:

Plan to tell a persuasive story.
Create a storyboard to use visuals that support your story, not repeat it.
Use high quality images that engage your audience emotionally.
Create a PDF file of the notes pages as a leave behind.

Many of you probably have heard this before, but still may be filling pages with bullet points. The difference is that Brian has clued us in to the existence of low-cost, royalty-free stock photography on the web. One of the sites he recommended was iStock. They have 669,000 images, with prices starting at just $1. There are plenty of other sites out there like this as well. So make the leap to better presentations…what are you waiting for?

Industry snapshot: Hewlett Packard’s New Strategy Story

trekco — Fri, 20 Nov 2009 22:08:08 +0000

HP is a company that could use a good strategy story. Following its merger with Compaq, it now provides a huge array of products, ranging from printer toner to high-end servers. But today, 85% of its profits come from its printer business. New CEO Mark Hurd recently stepped in, following the departure of Carly Fiorina, and he is taking a very different approach than his predecessor. This is our version of his current story based on the initial reporting of Hurd’s strategy:

Hewlett Packard has a long, proud history as a technology leader. Today there are those who would say that our rich portfolio of products is unwieldy and unmanageable. They are wrong. We have the legacy of the HP culture from Bill Hewlett and Dave Packard—the accountability that made us one of tech’s most consistent performers. We can use that culture and give each product group control and responsibility to deliver the performance our shareholders expect. Our job today is to execute.

(adapted from Business Week, September 12, 2005)