I am often asked to help businesses where there appear to be problems of communication between the directors and their executive teams.
This is unsurprisingly a very common problem
I have experienced it myself several times, especially when it arises in a “partnership model”.
What often transpires is that the problem starts at the very top, between the partners, the shareholders, and also the directors.
As I mentioned, in professional partnerships this is particularly rife.
Peacocks and Partnerships
A partnership can often be a collection of “self-employed individuals” masquerading as a partnership.
I often refer to these individuals as “peacocks” and their department as “the peacock cage”.
In theory, they have a common goal but, in practice I find that as long as they are earning “enough”, too many often tend to pay lip service to “the common goals” and just concentrate on fluffing their feathers and concentrating on matters arising in their own cage.
Although this is common in partnerships, it is not uncommon in Limited companies where ownership and control is “shared” between two or more individuals, especially if it is a family business.
To cut to the chase, what it often boils down to is “you cant run a business by committee”, you need to have a clearly defined leadership and management structure, with roles and responsibilities and consequences for lack of performance, as well as rewards for good performance.
I sometimes meet with 50:50 equally owned shareholder directors who are completely different types of character, which can often be a good thing when they complement each other’s strengths and weaknesses, but it can also be a source of frustration, and sometimes tension.
Quite often, I will soon realise that the main issues arising are not just about communication, but first and foremost about a lack of clarity and prioritisation, which can in turn create chaotic conditions in which to manage and communicate
I do realise that if communication needs to be improved , then that can be part of the cause for lack of focus and prioritisation – so it can be a bit of a chicken and egg situation
So what would I suggest as a possible way forward, in circumstances like this?
The answer can often be relatively simple and straight forward, but nevertheless often not easy .
Fit business around their lives
First I would ask all parties to go away and to reflect about what they really wanted in the future from their business and how they felt their lives would ideally fit into this business , and vice versa – how ideally they would like their business to fit into their lives.
In order to achieve this “ideal position” I would encourage them to think differently and consider their split roles as owners, differently from their roles as executive directors. For example, if we subsequently were to arrive at the conclusion that to achieve “their ideal” there might be someone else they could or should employ to do the job better for them – question – if that happened, would they be prepared and ready to accept that ?
Future Exit Routes – starting with the end in mind
Similarly I would urge them to think about a possible future exit, either partial or total.
I do urge all business owners and directors to think carefully about “starting with the end in mind” because in my experience this does help us to ask completely different strategic questions, especially about recruitment.
Often it will become apparent that one person’s ideal end might look different to their other colleagues’ ideal end – this is common, but I emphasise the need to work on this further and try to eventually reach an agreed conclusion, though it can be “parked” for some time , while other matters are looked at – but it can’t go away – it is crucial for this process of agreeing a way forward, with which they will all be happy
So in simplistic terms, before everyone involved allows themselves to get diverted into the “nitty gritty” of “how” (this is always tempting to do, and does happen most times), I strongly emphasise the need to do our best initially to think and plan carefully, and to be clearer about their “what” or “whats”.
I would then ask them and test them carefully about analysing their “reasons why” to check for transparency, congruence, and consistency between all the main parties involved, which can also involve spouses, who are sometimes mistakenly forgotten in this process.
In order to be able to help them more effectively, I normally will need to better understand their business and how the operations actually work , as well as how they do not work.
I am never sure how happy all the parties will be to share their financials with me, but this is paramount to understand what other drivers, pressures and significant hurdles exist in the business.
Naturally, everything that is shared with me is treated with the highest level of confidentiality, but many are initially nervous at exposing any potential financial vulnerability to me.
I also believe it is necessary, if I am allowed, to make it my business to understand better about all other leading team members, because if there is a perceived communication problem, as part of the exercise I might be able to find a way to help them understand better what they need to do to succeed , if I had a clearer understanding of their roles and what should be demanded of them in terms of results
To do this I also would need to quickly understand who and what generates the profits in the business.
I would normally ask to understand the various “sales mix ” patterns in the business showing the profit contributions and margins (not just the revenue), generated by each different section segregated by type of service or product range as well as by geographic area, so I can understand how much each service/product is contributing to the direct support teams and also to the cost of any “central head office” support teams.
In the end, whether we call it a cost or an investment , we need to ensure the business management make the right decisions at the right time to generate sufficient “profits” from all activities to sufficiently reward the initiative and innovation invested by them to date in the business, and also to reinvest in the future growth of your business
If necessary, sometimes I might be able to assist with the appropriate software to help them do this, if their systems are not currently set up to do so
Profit Centres and Cost Centres
If that information is available for me to review, I would then suggest that the next step is to meet to map out and analyse the business streams of profit centres and cost centres, identifying strengths and weaknesses ( trying to identify whether there are “roadblocks or mountains” to be worked around)
Only at that stage, and not before, would we then be in a position to be clearer and to be able to prioritize about what ideally the owners would like to achieve, double checking and testing about what is practical , and also performing a reality check to be absolutely sure that the priorities fit in and are congruent with their “reasons why”
With that knowledge, we will be then able to make some initial decisions about what needs to be done, before we start getting stuck into the “how” , which will involve identifying “who” will responsible , “where”, and by “when”
Measuring what matters
If we can build that clearer plan, we can create paths of responsibility, accountability and timelines which can be shared with senior team members, and we will be able to decide what underlying success drivers actually need to be measured.
This will involve the necessary prioritisation clarity and focus for everyone in their team to be clear about what is expected from their roles , both quantitative and qualitative, and in my experience this will then generate interesting discussions from management and supervisory teams who will realize they will have to report back with their performance, which will mean they will have nowhere to hide.
In turn, it would be vital for us to agree the roles each of the owners will play as directors, completely separate from their role as owners, and we will need to work out what support each will require to allow them to successfully perform these roles because, in my opinion, once we have started to improve “the momentum of the business’ hamster wheel”, the two owners will need to focus more on strategic management and less on operational management.
The temptation is to get on with the “doing” and put the cart before the horse, but you cant do that until the horse has started to trot.
It is not only lonely being an owner and a leader, but it can be very very frustrating and, in my experience, unless you do the right strategic “thinking and planning” first, you will generally ask yourselves the wrong questions, which will only give you the wrong answers causing you to make the wrong decisions for your ultimate success.
Of course, once you start working on the “how” you will never stop – it is a never ending process, especially if part of your “how” is actively looking to find the “wow” in your processes, in your team, and in your “customer interaction” so that you can prevent your business from being commoditised by the approaching tsunami of artificial intelligence and robotics. But that is for another blog.
Call me if you wish to discuss how I might be able to help you to make your business leadership more effective