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Your Third Act

What is your end game? Your next act? What do you intend to do when you are finally done doing what you’re currently doing? Retire?

It’s your “third act”.

If you’re like me, it’s difficult to think of it as a third (or last) act. After all, we’re doing great right now: we’re contributing to a retirement fund and this is our life and we love it. Why do we need to think of anything after this? There isn’t anything after this. Is there?

Well, maybe so — if you plan for it.

There are so many reasons to be planning your third act.  The biggest one is being able to afford to do what you’ve been planning on once you’re no longer the business owner. This is a different perspective than the typical financial planning question of how much do you want to retire on. Let’s use an example.

Let’s say, you desire to buy a full-size motor home to drive around the country seeing all the national parks and monuments that you’ve always wanted to visit. You’re planning on spending three to six months every year on the road doing this. Have you done the math on this? Have you figured out the financing on this? You may have figured your financial plan based on what it will take to maintain your life style – or maybe even lowered that so you can downsize. But what about this motor home thing? This is in addition to your normal life-style costs. You must add this to the total and when you do, you’ve got to be targeting that new number as your new goal.

No matter what you want to do if it’s anything other than sitting around the house watching TV all day, it’s going to be “plus” your expected normal living expenses. So, calculate it and begin now planning on it. If you have a qualified financial planner, they can assist you with this (If you don’t have someone with this capability, we can recommend one). Once you have this revised figure, now you can begin to look at what it’s going to take to achieve that number.

So, what’s going to be your third act? What’s going to keep you living? Literally. If you intend to exit your company vertically at some point in the future, what will be your next great adventure?

I’d like to hear your next story.

Dave

Where will the resources come from for that motorhome? Take this quick quiz first.

*photos courtesy of Junior Moran and Tyler Callahan

Planning and Having a Plan—the Strength of Strategy

In the book Made to Stick by Chip and Dan Heath, there is an entire chapter devoted to the power of simplicity.  Specifically, the process of planning and having a plan.

  • Do you plan a strategy for your company?
  • Do you have a plan for your life?
  • Do you plan your day?
  • Do you plan at all?

I would say that most of you have some type of plan.

No plan survives contact

In Made to Stick, the authors tell the story of General Thomas Kolditz who led the Department of Behavioral Sciences and Leadership at the U.S. Military Academy West Point.  General Kolditz talked about strategy:

‘No plan survives contact with the enemy.  You may start off trying to fight your plan, but the enemy gets a vote. Unpredictable things happen—the weather changes, a key asset is destroyed, the enemy responds in a way you don’t expect.”

Plans are useful

Furthermore, General Kolditz said, “Over time we’ve come to understand more and more about what makes people successful in complex organizations.”

He believes that plans ARE useful.  The planning process forces people to think about the right things.

As a result of this, in the 1980’s, the Army invented a concept called Commander’s Intent (CI).  Commanders Intent manages to align the behaviors of the soldiers at all levels without requiring detailed instructions from their immediate leaders.

Give your team freedom to improvise

When people know the desired outcome, they’re free to improvise, as needed, to arrive at end-goal.

To arrive at a CI, the Army recommends you ask yourselves two questions:

  1. If we do nothing else during tomorrow’s mission, we must ___________.
  2. The single most important thing we must do tomorrow is _____________.

Not everything goes to plan

  • No plan survives contact with the enemy.
  • No sales plan survives contact with the customer.
  • No lesson plan survives contact with teenagers.

I would argue this same concept applies to businesses (and to life for that matter).  Certainly not everything goes as planned, but you must go through the process of planning and state the desired outcome in order for you, your leaders and your employees on the front-line to adjust and push forward.

“Failing to plan is planning to fail.”– Alan Lakein

Michael

 

*featured photo by Clem Onojeghuo, courtesy of Unsplash; insert photo courtesy Unsplash

Being Customer Centric with the Right Customers

In every business, success comes down to understanding and satisfying the customers’ needs and wants. Name me one where this is not true.

Ok, the government.  But I asked for a business.

In today’s business jargon, we call this being customer centric. We hear tag lines like “the customer is always right” and “we put our customers first.” These slogans are just one of the ways we use to try and to get everyone, both inside and outside of our organization, to believe we treat our customer like royalty.

What if you thought differently about who your customer really is?

While this is somewhat counter intuitive, by looking in a different direction, you might win more business and build up an important internal resource.

Your employees. They are really your first customer.

The better you treat your employees, the better they will treat your customers. If you want your customers to love you, then love your employees. Show your employees how you want them to treat your customers by how you treat them.

And, truthfully, it helps your staff understand that if the company is successful, they will be successful.  Make them feel like owners and they will treat the customer that much better.

We recently discovered this unrecognized problem with a client.  It was the primary limiting factor for the company’s growth. Communicating with the customer was a very undeveloped skill. You would think this would be the death knell to the company.  Yet, surprisingly, this was an accepted behavior throughout their industry. This meant the customers really couldn’t get better treatment anywhere else. At this company, the customer could at least expect superior technical performance and results.

By treating their employees better, their business increased through better customer service.  And it was a differentiator for the company in their industry and made them, almost automatically, an industry leader.

We spend a lot of time, money and effort getting better at our technical proficiency, but we spend very little time learning how to treat our customer better.

By taking the time to focus on your internal customer, the end customer will be treated well and you will have wins all the way around.

Dave

*photo courtesy of rawpixel

How to Increase the Value of Your Business by 71%

How much did your home increase in value last year?  Depending on where you live, it may have gone up by 5% to 10% or more.

How much did your stock portfolio increase over the last 12 months? By way of a benchmark, according to Market Watch, the Dow Jones Industrial Average has increased by around 16% in the last year. Did your portfolio do as well?

Now consider what portion of your wealth is tied to the stock or housing market, and compare that to the equity you have tied up in your business. If you’re like most owners, the majority of your wealth is tied up in your company. Increasing the value of your largest asset can have a much faster impact on your overall financial picture than a bump in the stock market or the value of your home.

I’m fond of asking my clients, “Where do you want to be in 20 years?” I’m always interested in the answer and I’m always surprised at the questions I get back in response. The point I’m driving at is that no matter where you want to be, the value of your business is the asset that will most likely fund that dream.

Let me introduce you to a statistically proven way to increase the value of your company by as much as 71%.  Through an analysis of 6,955 businesses, we’ve discovered that companies that achieve a Value Builder Score of 80+ out of a possible 100 offers received to buy their business that are 71% higher than what the average company receives.

How long would it take your stock portfolio or home to go up by 71%? Years, maybe even decades. Get your Value Builder Score now and you will be able to track your overall score along with your performance on the eight key drivers of company value. Like a pilot working his instrument panel, you can quickly zero in on which of the eight drivers is dragging down your value the most and then take corrective action.

Your overall Value Builder Score is derived from your performance on the eight attributes that drive the value of your company.

  1. Financial performance: your history of producing revenue and profit combined with the professionalism of your record keeping.
  2. Growth potential: your likelihood to grow your business in the future and at what rate.
  3. The Switzerland Structure: how dependent your business is on any one employee, customer or supplier.
  4. The Valuation Teeter Totter: whether your business is a cash suck or a cash spigot.
  5. The Hierarchy of Recurring Revenue: the proportion and quality of automatic, annuity-based revenue you collect each month.
  6. The monopoly control: how well differentiated your business is from competitors in your industry.
  7. Customer satisfaction: the likelihood that your customers will re-purchase and also refer you.
  8. Hub and spoke: how your business would perform if you were unexpectedly unable to work for a period of three months.

To find out how you’re performing on the eight key drivers of company value and start your journey to increasing the value of your largest asset, get your Value Builder Score now:    SCORE-MY-BUSINESS

I’m always interested in where you’ve been as much as I’m interested in where you’re going. So, contact me and let me hear your story. Let’s see what we can do together.

Blessings,

Dave

Smartest Person in the Room

Back in my design construction career, it was always important that you had a really smart and fully engaged team.

I guess that applies to all careers, doesn’t it?

Well, it’s especially important in technical fields where a lot of times the designed or engineered solution doesn’t quite fit the actual field condition. If you’ve ever been involved in any type of construction or remodel, you know what I’m referring to. The main solution to this is to involve really qualified and experienced professionals. And the key element is “experienced.” The more times they’ve been there, done that, and seen that, the better your project is going to be.

One of the key characteristics of the best experienced people is their ability to say, “I don’t know.” Or “I’ve never seen that before.” Or something along those lines. The worst ones try to wing it and go out of their way to not admit their ignorance or appear to be all knowing when in fact, they are just as ignorant of the situation as everyone else. At this point, I’m trusting that you’re already saying, “Dave, this applies to every field and endeavor.”

You’re right, it does.

I don’t know about you, but I’ve discovered that the person who always wants to be the smartest one in the room, is not always the wisest or the one I want to look to for the final answer. My rule has always been that old axiom, “if you ever find yourself being the smartest person in the room, then you’re in the wrong room.” Applying this to everyone in the room makes me appreciative but wary of the person who always feels and acts as if they have all the answers.

Trusting that you’re not this person, but you have to deal with this person, what do you do when they try and dominate every meeting with their expansive knowledge? It’s a standard problem that every leader has to deal with. The best answer is to always be working toward engaging everyone in a meeting. Even the most introverted or quiet ones. Fact is, many times, they are the ones with the answers – or better still the best questions.  But you’re going to have to draw it out of them with engaging questions of your own.

I wish I could tell you the perfect answer to dealing with the smartest person but I still haven’t found the perfect answer (to anything for that matter.) I can tell you what I have used that has at least relieved the situation to a degree:

  1. Always allow the person his or her opportunity to contribute (You’ll not be able to avoid this so dive in and accept the fact.).
  2. Once it appears that they are going to attempt to answer every question or make the first response, say something like, “Thanks for your input, let’s hear from someone else” (And here you might request input from someone specific – maybe even that quiet person that seems to never say anything.).
  3. Continue following this process throughout the meeting. You may never fully quiet the smartest person, but you can sure indicate to the rest of the participants that you are determined to get and value their input.
  4. Finally, if necessary, have a private discussion with the individual and ask them to help you draw out input from everyone else by not being so quick with their responses.

If you’ve discovered another process, I’d like to hear from you. For sure, I’m not the smartest person on this subject.

Blessings!

Dave

I or We?

Do You Say “I” or “We”?

According to a study led by Dr. Matthias Mehl, an Associate Professor in the Department of Psychology at University of Arizona, on average we speak about 16,000 words per day.  Words are important.

As a leader, what are you saying to your team, to your employees, to your company?

How are you saying it?

When you talk to your team, do you say “I” or do you say “we”?  Think about that for a minute.  What we say reflects how we act and what we do.

“I” leaders put themselves first and, as a result:

  • Put the team second
  • Decrease morale
  • Promote selfishness

“We” leaders put the team first:

  • Put themselves second
  • Inspire and uplift
  • Promote servant leadership

With a shift from “I” to “we” requires leaders to put the interest of their organization ahead of their own self interest.  When this occurs, the company has a greater chance to succeed as leaders empower and engage their employees to be their best.

In the book “Good to Great,” author Jim Collins calls these people Level 5 leaders.

What distinguishes Level 5 leaders from other leaders is that they channel their ego needs away from themselves and into the larger goal of building a great company. It is not that Level 5 leaders have a lack of ego or aren’t interested in themselves. Indeed, they are incredibly ambitious.  Yet their ambition is first and foremost for the institution, not themselves.

The failure of business leaders to make this first shift from “I” to “We” is the single most inhibitor of a company’s long-term, sustainable performance.

Michael

Finding and Using a Guide

“Have you been to Europe?”

“Where did you go?”

“How did you go?”

A friend of mine was recently asking several of us these and many other questions about his family’s upcoming vacation to Europe. I was doing the same thing about a trip to Denver recently.

In every case the exact answer to each question and much more can be obtained through a simple Google search. Yet, that’s not what was being asked. Specific facts weren’t being searched. Advice and confidence were. Do you see it? It’s surely not that all of us don’t know how to look things up on the internet. It’s that we are looking for someone that we know and trust who has gone there before. We’re looking for wisdom, knowledge and confirmation in our decision. We’re looking for a guide. Someone who’ll lead or point the way, so we can maximize our enjoyment and avoid unnecessary mistakes.

Here’s a question for you. When we’re so open and willing to seek the advice of our friends in order to guide us through important personal decisions, why don’t we do the same thing for important business and career decisions? When we’re entering into unknown territory in business like a new market, a new process, or even a new type of customer, why aren’t we taking the same approach? It’s true that in the business decision we’re looking for specific answers, but the real truth is we’re doing the same thing as in the personal example. We’re looking for wisdom, and knowledge from someone who will guide us through the process and help us maximize our efforts and avoid unnecessary mistakes.  Sometimes you can get that guide from a business friend or acquaintance like your accountant, banker or attorney. But in all cases, you’re looking for someone who’s been there before.

When I first entered into the consulting world, I had an associate that cautioned over and over again about giving our services away for free over a casual conversation. I was never comfortable with that advice and have come to realize just the opposite.  These conversations can sometimes quickly help someone who is just simply looking for that word of encouragement and get them back on track. (Like my friend who just wants to be confident in his decisions booking his trip to Europe). At other times, they can also reveal a much more serious need that our team can help with. Whatever the situation, I’ve discovered that I’m the one blessed with every opportunity to help.

If you have found yourself in a business situation where just talking it out with someone who’s been there and done that, I’d be pleased to listen. Who knows? You might just find yourself freed up to go to Europe.

Dave

They didn’t tell me anything new, but…

Sometimes the answer is right in front of us we just need to talk it through or have it told us in language we understand—and may have heard before.

Sound familiar?

So it was with Michael Smith at MD Engineering.  He had a successful, growing company, but something was missing.  And it was really in front of him all along.

“The New Paradigm Advisors (NPA) team came in and really spent time with us,” Michael recounted. “The things they told us we had heard before just not in that order or with the emphasis they gave it.”

New Paradigm Advisors is a business consulting firm that helps determine a company’s value by helping shape it.  NPA came in to help Michael shape his company at a time when it needed shaping.

“One thing I was missing was an advisory team,” he continued. “As a privately held single partnership, I didn’t necessarily have any collaborators.  The New Paradigm team helped me select and shape an executive team.”

Subsequently, Michael put together a team that help guide decisions important to the company’s present and future.  This team includes:

  • Michael, the CEO
  • The company controller
  • An industry visionary from within the company
  • A next-generation employee

This team is anything but a collection of “yes” people. Quite the contrary, Michael says.

“Anything is open for discussion to allow the smartest and most clear decision to be made. They all are allowed to push back.”

This one innovation has gotten the company excited again.

New Paradigm Advisors is a value-assessment and consulting firm based in Dallas, Texas.

Just What Do I Want?

Many of us in business are working hard to shape and grow our business.  We’ve built up this thing we call a company and hope to see it through to…to what?

Just what do you want?  Is it “how much?” Or is it a legacy?

These are the questions Bruce Bernbaum asked himself not long ago.  Bruce is a co-founder and partner in Bernbaum-Magadini Architects in Dallas.  At his age and where he is in his career, Bruce has some decisions to make.  But where to start?

“The New Paradigm Advisors team gave me this Value Builder’s ‘quiz’ that allowed me to assess my business,” Bruce recounted. “And it caused me to stop and think long and hard about the value of our company.”

New Paradigm Advisors (NPA) is a business consulting firm that helps determine a company’s value.  Dave Sykes of NPA met with Bruce informally to ask some critical questions.  It was the Value Builder’s Assessment that really got Bruce’s attention, particularly with one question.

“When I got the score back I had a zero on one point,” Bruce recounted. “’That can’t be,’ I thought.  But it was enough to stimulate a discussion with Dave to help me set some goals.

Between the assessment and the ongoing discussion, Bruce has used his time with the New Paradigm team to be better at planning and forecasting.

“The team got me working on my business rather than in it.”

New Paradigm Advisors is a value-assessment and consulting firm based in Dallas, Texas.

Part of the Company

If you had been part of large companies all of your professional life and then struck out on your own, what would do to start your company?

That’s what Roger Pavlovich asked himself when he started his own construction services company.  Roger had been an officer or project manager at several large construction firms. He had all of the experience and energy to start his own concern.  But something was missing.

“I needed an outsider on the inside,” Roger said. “Actually, the NPA team is my security blanket and the guys I go to when I need to bounce something off a collaborator.”

NPA is New Paradigm Advisors, a business consulting firm that helps determine a company’s value by helping shape it.  New Paradigm Advisors came in to help Roger shape his company from its beginnings.

“We got the NPA team involved on a weekly basis, though I do talk with several of them almost daily,” Roger continued.  “The team sits down with us at least once a week.”

Some of the things New Paradigm has done for Pavlovich:

  • Helped produce a 3-year look-ahead plan and an associated monthly review process.
  • Offered daily collaboration.
  • Defined processes and systems for the young company.

Pavlovich Construction is a design-build construction consulting firm specializing in light industrial projects in the food processing and distribution segments.

“Because Roger and I knew each other from more than business, we had a mutual trust,” Dave Sykes of New Paradigm added.  “That gives us a bond that really ensures success for both of us.”

New Paradigm Advisors is a value-assessment and consulting firm based in Dallas, Texas.