When you have trouble making a business decision

Young businessman sitting in front of a chalkboard and trying to choose the right doorOriginally published on September 15, 2016 as a Guest Column in The Globe and Mail: http://www.theglobeandmail.com/report-on-business/small-business/sb-managing/what-to-do-when-you-have-trouble-making-a-business-decision/article31750482/

All too often, I watch business owners freeze in the process of decision making. They might be considering a big, strategic change, or shifting a few team members into new slots. Often, however, they delay making the call. It’s as if they are waiting for the perfect answer. They’re hoping for an epiphany or, better yet, a genie in a bottle to make all their business problems go away.

Well, 25 years into my entrepreneurial journey, there’ve been no epiphanies for me, and certainly no genies.

Sooner or later, we are all faced with gut-wrenching decisions that can affect the future of our business and, as business owners, the well-being of our families. But no matter how challenging or unnerving they may be, we still need to make decisions and act on them, or our businesses could come to a grinding halt.

How can you break out of decision-making paralysis? I distill the decision down to its simplest possible form, using a highly scientific process I call: “Is it yummy or is it yucky?”

Let me explain.

As a young entrepreneur, I once found myself stalled when I had to make a key decision on the direction of my business. At dinner one night I asked for the advice of a successful businessman. I was expecting a deep, analytical response – but what he said instead has stuck with me for decades. He picked up the sugar bowl in one hand and the salt shaker in the other. “I want you to make a gut decision,” he said. “Is the opportunity yummy, or yucky?”

A simple, but profound question.

Why? This experienced, self-made business leader knew that I’d done a lot of legwork leading up to this point of (in)decision. He knew that I had thought about which customers my new direction would most likely engage, and how many clients it might alienate. He knew I had studied what the competition was doing, and that I knew where my market was headed. He knew I had run the numbers backward and forward to see where a “wrong” decision might leave the company, and my family.

In short, he knew that I was fully capable of making an informed choice – or, as I now think of it, an “informed gut decision.” For me, this is when you meld your thoughtful analysis with the broad gut understanding of your business that you have developed systematically over time.

One of my clients, Greg van den Hoogen, CEO of Pharmasave Drugs (Atlantic) Ltd., likes to call this the “art and science of decision making that comes from truly knowing your business – the facts and figures, as well as the bumps and bruises that come from having worked in it for a long time.”

Ironically, decision making should be quite simple. I mean, there are only two real decisions that you can make: Yes or No. This isn’t just cheery Mary Poppins optimism. As Jack Welch, the legendary former CEO of General Electric, once said, “Simplicity is an indispensable element of a leader’s most important function.”

Yes, you have to do your homework and know your business. But that doesn’t mean you need to overcomplicate your decisions. Once you have the information you need to solve a problem, take a breath. Often, a problem appears daunting just because we’re too close to it; all we can see is the complexity. Step back and trust yourself to make a right decision, grounded in evidence, experience and thoughtfulness.

Of course, there are no guarantees. You learn to choose the sugar over the salt based on the indispensable, acquired knowledge inherent in your management style and experience.

When I learned to trust my informed instincts, the “yummy” decision quickly became obvious. No one expects you to get it right every time. But as you learn to trust your gut, you’ll find it gets easier and easier to make the best decisions for your business.

Please pass the sugar.

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North America, Europe and Brazil: Our Newest Video in Support of the Bestselling Book on Innovation, Cause a Disturbance

 

Whether your business is in transition or simply looking for an innovative spark, give it a lift with a Cause a Disturbance keynote or workshop.

Ken will show you how innovation can change your business in simple steps by walking you through the 90% Rule®: It’s a straightforward philosophy that drives you to constantly ask what’s the next 10%? What’s the next product, service or process improvement that will create a continuously engaged customer base and strengthen your organization?

One of Ken’s great pleasures when speaking about innovation is helping smart and inquisitive people to step out of their day-to-day roles and focus on new ways to push their organization’s forward. As he says to audiences around the world, “The status quo today is disruption, and if your companies don’t find new ways to educate, inform, engage and delight your customers then they’ll walk to a competitor with your bottom line in tow.”

In our new video, Ken highlights how organizations can unlock the secrets of innovation to continuously delight their customers using a straightforward, six-step process:

  1. Engage emotions, not numbers
  2. Change customers’ lives
  3. Connect the dots
  4. Identify and rank opportunities
  5. Build the plan
  6. Communicate the plan

Everyone knows – and everyone talks about – how important innovation is in the competitive battle to find, delight and keep customers and yet, far too few achieve it. As Ken explains, “There’s a big difference between an occasional spark of innovation and an eternal flame.” But the reality is different; most firms struggle to consistently innovate.

All of that can change. Contact us today to book a keynote or workshop for your organization.

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Why you need to be selling your company every day

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Originally published on August 2, 2016 as a Guest Column in The Globe and Mail: http://www.theglobeandmail.com/report-on-business/small-business/sb-managing/why-you-need-to-be-selling-your-company-every-day/article31141189/

About a year ago, I was listening to a prominent accountant speak to a room full of business owners. His message was both clear and simple: “Each day you should run your business like you are in the process of trying to sell it.”

This simple message created many frowns and furrowed brows. Clearly, people in the audience wanted to respond, “But I’m not selling my business, and I don’t plan to any time soon.”

Not the point.

It doesn’t matter whether you’re thinking of selling your business. Some lucky owners get to simply pass it on to the next generation. But the real point is this: You need to think and act like you are selling your business, every day.

Why? Selling a business is an extended process, often a gruelling one. Compare it to selling a house. The first step is to “stage” the property. This means taking a hard look at your surroundings with fresh eyes, to help you recognize which furnishings and decorations add to your home’s ambience, and which are just clutter.

It’s a tough thing to do. For most people, everything in their home represents a memory or a milestone on the journey of raising a family. Prospective purchasers care nothing for memory or sentiment, seeing every unnecessary element as a flaw that diminishes the value of your home.

When you are selling a business, the process is little different. Prospective buyers go through your numbers, your assets and your records with the diligence of a home inspector. They will scrutinize your sales, margins, inventory, returns, client list, receivables and payables. They will dig through your sales history and your new product or service pipeline, looking for any irregularity, liability, trend or threat that could detract from the value they are paying for your company.

While some may see this as a tedious, time-wasting process, I see due diligence as a very positive exercise. It’s a way to identify issues before they become problems. In fact, this process shouldn’t just be limited to when you buy or sell a business. I believe that entrepreneurs should initiate a mock due-diligence process every year, preferably just before their company’s annual retreat or strategy sessions.

Think about it. Your goal as the owner or manager of a company is to increase its intrinsic value (how much the business would be worth if it were going to be sold). By rigorously and formally questioning all of your business’s habits, assumptions and processes, you’ll develop a culture that embraces change and continuous improvement – and increases the value of your business on an ongoing basis.

In my opinion, your company’s value is the single best measure of how well you are running and building your business. Value incorporates all key time horizons that buyers and evaluators employ when assessing a business – how you are running your business today, what you are doing to keep it relevant and meaningful to your customers in the short term, and how you establish and execute on your grand, long-term vision.

“When it comes time to sell their business, many business owners are surprised to receive a lower valuation than what they had expected,” notes Murad Bhimani, a Toronto-based partner with accounting firm MNP LLP. “That’s why we recommend to our clients that they should operate and build their business as though they could sell it any minute. This keeps you focused on what is critical every day, such as sound operations, diversity of customer base, building a strong management team, and proactive product development.”

If your kitchen’s ceiling is leaking, you wouldn’t wait for a home inspection to find the cause and fix it. Don’t wait to see whether your company is leaking opportunities and profits. Whether or not you’re planning to sell, take a good long look at all of your key performance indicators on a regular basis. Your bottom line (and your wallet) will thank you for it.

And some day your children may, too.

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