What feeling do you have when you see something different in the workplace? What about encountering a new experience? What if someone suggests something that is “off the wall?” Is someone laughing when you do not know what is funny making you feel left out? Do you have an impulse to make fun of something that is new or different? Is your response to deride someone or something new or different? Realize that when your reaction to change is emotional and results in derisive actions, often that reaction is based on fear.   I once had a trial lawyer friend of mine tell me that he knew he was doing well in the courtroom when the opposing lawyer started raising his voice. He smelled the fear.   Wild animals are most dangerous when cornered and afraid. You can smell the fear. The remedy for the situation is to back off so the animal no longer fears being cornered. Most wild animals when given the chance will simply run away.   Many of the traits associated with arrogance, such as acting in a derisive manner toward people who are different or rejecting out of hand suggestions offered that are new, are actually ways of masking fear of inadequacy. Actions displaying arrogance often come from someone feeling cornered and attempting to hide concerns about one’s ability. You can smell the fear.   Contrast that with the actions of a humble person who has respect for the thoughts and feelings of others. The person who exhibits kindness and respect toward people representing change shows confidence and courage. These actions do not mean that there is agreement or acceptance of any given situation, but it does support an opportunity for dialogue that is necessary in a group decision-making environment. Where respect is the basis for communication, you cannot smell the fear.   When I am in situations where people are being derided or new ideas are being ridiculed, I can smell the fear. What I ask is: where is the fear coming from? What is the inadequacy that is being masked by abusive behavior? How can these fears be addressed? Realize that these actions are acts of cowardice and fear. Try to understand where the fear is coming from and address those concerns. Allow space for understanding by modeling the humility, courage, and confidence that should replace the fearful actions.   Unfortunately the reaction to boorish and aggressive behavior is often anger, which leads to a mirroring of the boorish and aggressive behavior. The urge is to be aggressive and corner the person who is acting out. It is better to recognize the fear causing the arrogant behavior and act in a humble way to allay it and foster future and more productive communication.

A traditional business plan determines action to be taken to accomplish the plan goals and monitors the effect of those actions in reaching the plan goals. If the goals are not reached, the plan is revised and the process repeated. The launch of the business plan is much like the launch of a missile, a rocket that is launched by aiming it and then launching. Of course, a higher level of performance is reached with a guided missile, a rocket that uses a guidance system to steer the missile to a target after the missile has been launched. The guidance system corrects the path of the rocket in flight to assure it intercepts the target. This guidance system may use radar, infrared, laser, or GPS technology, but what is important is that when the missile is launched, the guidance system activates, and the path to the target is tracked. The guidance system will control the missile’s flight path to make adjustments to the missile’s trajectory so that it hits the target. Similarly, a business plan becomes dynamic when the operational decisions made to take actions to accomplish the goals of the plan and results from monitoring these actions are instantly communicated to all involved in the plan such that the actions can be revised to assure plan goals are met. With the traditional business plan process it can take months before monitoring information is reviewed by the policy making group with plans often being revised on a quarterly or even annual basis. A dynamic business plan, like the guidance system of a missile, can allow the actions of the plan to be altered in a timely way to achieve the desired results, even if the initial aim is shown by monitoring to be off target.   The business planning process starts with a strategic idea that develops into a written plan after decisions are made by the policy-making group. The documented plan is communicated from the policy-making group to executive managers who create and implement an operational plan to carry out the plan by meeting its benchmarks (metrics) and goals. At some point, the experience of carrying out the plan as monitored by the executive managers will suggest that the plan be revised by the policy-making group. Traditionally, the segments of the business planning process (strategic, operational, execution, and monitoring) have been viewed as separate activities. This primarily has to do with the traditional means of communicating the plan. The creation of the operational plan by executives will be an iteration of the strategic plan which will alter the strategic plan in a variety of ways that are necessary and appropriate but those changes will not be known by the policy-making group. When the operational plan is initiated and communicated in various ways to the productive elements of the business, as a matter of practicality the effect of the business environment will also cause changes to the plan. These changes also are not brought to the attention of the policy-making group.   The more fluid and dynamic the business planning process, the more the policy-making group will be involved and the more effective the plan will be. The more segmented the planning process, the more restricted the information will be to the policy-making group and the less effective the plan will be. To the extent that the strategic plan is different from the operational plan and does not consider the realities of the marketplace, the success of the plan is in jeopardy. When the plan is changed, either by the drafting of operational planning or the practical aspect of experiencing the reality of the marketplace, it is the reaction to these changes by the policy-making group that will result in the success of the plan by keeping the actions taken to reach plan goals on target.   For a dynamic planning process to exist, any reaction to implementing actions taken to reach the goals of the strategic plan must be communicated to all involved, especially the policy-making group, in a timely manner. Whether this occurs has to do with the communication between the policy-making group, the managers, and the productive elements of the business. What format of a business plan will allow information to flow instantly between these business elements in all directions? Traditionally, it was not unusual to see a strategic plan documented in a three-ring binder that must be handed to an executive group to be read, then communicated to managers by a different means often without documentation, and then placed on a shelf. In due time, managers reported back to the policy-making group after installing and monitoring benchmarks and metrics. Then, the notebook would be pulled off the shelf and revisions would be considered. If the plan is in a three-ring notebook or a PowerPoint slide presentation, the communication of the plan provides an obstacle for the fluid implementation of the plan.   Where a dynamic planning process is in place, the same communication instrument contains the strategic plan, the operational plan, and reflects the monitoring of benchmarks. Deviations from the strategic plan indicated by the drafting of the operations plan, the establishment and monitoring of metrics, and the experience of the marketplace will be communicated to all parties, especially the policy-making group. The planning process (strategic, operational, execution, and revision) is be based on continuous communication. This communication can be done on planning format such as a spreadsheet or perhaps more elegantly by the use of business software such as Microsoft Teams.   Effective execution of the plan is improved where there is overall communication involving the policy-making group and immediate revision to the plan as the necessity is perceived. Like a guided missile.  

I advocate group decision-making, but am often asked: “what exactly is the role of the leader where there is a group involved?” Not understanding that leadership role can lead to humiliation and lack of credibility – not to mention bad results. By understanding the leadership role in group decision-making and waiting for the fork, you can elevate your practice of leadership from rote activity to an art form. It is that leadership art that can bring excellent business results. Leadership cannot function in a vacuum. For business success optimization there needs to be an established decision-making structure embedded in the business. The resulting decisions should be documented, communicated, and understood by the executives as they are made. This is the essence of dynamic planning, the most effective planning method. To make the best decision-making process, a small group of diversely informed individuals should aggregate their judgments and provide that wisdom to the decision-maker charged with determining and setting forth the policy. This group should be formed to include the elements of diversity, independence, and decentralization. Using a group in the decision-making process does not mean the group makes the decision. Where a group makes the decision, the process is too slow for most business situations. For the effective business process, group decision-making requires that an individual have the authority and responsibility to make the decision after consolation with the appropriate group. It is not always clear how that individual, the leader, evolves in the group decision-making process. The term “fork” is used in the development of open source code for a software project, where developed code is used as the base for a new software project. To start the new project you fork the existing code by making a copy and work on the new software from there. The fork concept is analogous to the time when leadership can make the difference in the business decision-making process. If you have watched, listened, asked questions, and learned, as well as refrained from stating your belief rather than cultivating a group concept, then when something new becomes your vision, that background can allow you to fork (use that which has been developed) and take the team with you to build the new vision upon it. Great leaders recognize when to fork, and, having built trust and credibility with the team, bring the team to a place where they would not be were it not for the leader. The leader must also manage the risk. In a business where dynamic planning is in place, where decisions are made through a group decision-making policy and immediately communicated to all involved, risks can be handled through revisions of planning when the need becomes apparent. As with most things in life, the greatest rewards go to those willing to take reasonable risks. Reasonable risks are those where actions can be taken to revise and correct based on monitored results. It is also in the art of the leader to see the fork opportunity, to understand the risk, and manage the risk. The leader who waits for the fork, acts on the vision of the opportunity, has the trust and reliance of the team, and manages the risk can realize exceptional business results.

Most businesses are founded on assumptions. Founders with a common purpose initiate the business, and, upon its profitability, assume that all owners share the same goals and interests. What do you know about your co-owner’s plans for the business? Have you simply assumed that all of the other owners have the same interests and desires? What if this assumption is incorrect? When the assumption that all owners want the same thing proves to be wrong, there is inevitable conflict. To prevent this conflict, owners need to communicate about their values with respect to the business and develop strategic plans which honor those values. The understanding between owners should rest on conversations and not assumptions. Those conversations need to be about values with respect to the business. A value is a normative principle that informs and shapes thoughts, desires, feelings, choices, and behavior. A value is not a preference, but an enduring and essential attribute of character. Most owners are only vaguely aware of the standards and concerns that compose their personal value systems. Most unthinkingly embrace an array of normative standards to which they assume most caring and intelligent people adhere. To bring clarity and order to the owner’s personal value system, the owner should reflect on the circumstances and experiences that have informed and shaped the owner’s hopes, fears, and perspectives. The product of this reflection should be memorialized in writing. The writing should be reviewed and altered from time to time to reflect changing circumstances and perspectives. In addition to not thinking about their personal values, most owners have given little thought as to how the business they own fits with those values. Few owners have consciously attempted to resolve the tension that inevitably arises when their personal values conflict with the conduct of the business.  The owners as a group provide the strategic planning for the business. Each owner should understand his or her value system and be able to bring an articulation of that value system into conversations regarding the conduct and ownership of the business. The discussion about owner values should establish the goals for the business. Owners will not all have the same values, and the goals for the business will have to respect those differences. When that is not the case, the discussion should turn to how can the owners go forward given the differences in values. While this may result in a separation of interests involving a change in the business, it will avoid a conflict or dispute involving a traumatic event and damage to the business interests of the owners. Where there is no dialogue about values, realistic goals not set, and strategic planning not done, then when initial assumptions are found to be inaccurate, emotional responses will create an environment of conflict between the owners and traumatic disruption for the business. To begin to have a dialogue with co-owners about value, ask all owners to reflect on the circumstances and experiences that have informed and shaped the owner’s hopes, fears, and perspectives. Create opportunities for the owners to articulate their value to one another. Based on those discussions, focus on the goals for the business such that those goals fit with the values of the owners. If you need help implementing this agreement among the owners, visit https://btcllc.net/shop.

Often the primary long-term goal of business ownership is to increase personal wealth to achieve financial independence. Wealth can consist of non-financial assets valued to show a high net worth. But financial independence requires liquidity. Liquidity is achieved when readily available liquid assets are held at a low risk of loss. Non-financial assets such as home equity and business equity are non-liquid and held at risk, as are financial assets such as stock and bond portfolios. How does the business owner reach this goal of financial independence? The simple and direct answer is to sell the business interest to convert non-liquid business equity to liquid assets. The more you prepare to sell your business, the more it will be worth when the business interest transfers. This perspective is prior diligence, a unique method for analyzing your business. Manage your business to be ready for sale at the highest value.

Governance of businesses generally consists of two structures: hierarchical (pyramid) or nonhierachical (flat). Can it be determined that one structure is more conducive to effective decision-making than the other? The hierarchical structure is the traditional legal governance structure of the corporation. That structure creates an overall executive officer (president or chief executive officer), a vice president, secretary, and treasurer. Other officers are added to the structure for administration of other common departments such as human relations and technology. Below the officers in the structure are managers who are charged with operations and report to the officers. This structure may be multilayered and quite complicated. Nonhierarchical structures generally use teams, where each team has a responsibility or project. Team members are encouraged to self-direct and to be innovative. There are few levels of authority. Multiple teams can make organization and coordination of teams difficult. Advocates of nonhierarchical structures believe the structure makes businesses more adaptable and able to act quickly. Examples of businesses using a nonhierarchical structure are Google, Zappos, Altassian, and Netflix.  

Most would immediately doubt the wisdom of a plan to place a building on the top of an active volcano. Yet, a majority of businesses consisting of more than one owner are built on a base that will erupt like a volcano. As with the volcano, the exact time of eruption or how much lava will flow cannot be predicted, but a major disagreement among business owners is probable and can erupt to destroy a business. There are things that can be done to keep the eruption from occurring. If you have built a business on the volcanic base of unexpressed assumptions and inadequate communication, all is not lost. Of course, if you do nothing, then the passage of time and the disruption from a major disagreement will determine your fate. But you can prevent a future disaster by starting to communicate with your fellow owners. This takes serious work from each owner, but that work will strengthen the base for the business. If after reading this you need help to start, guidance can be had for as little as $100 (https://btcllc.net/shop/). The effectiveness of the decision-making procedure of a private business is dependent upon the ability of the owners to articulate their values. Many private businesses do not have specified decision-making procedures, and the idea of expressing values is not commonly recognized. Owners can develop the ability to articulate values, first to themselves and then to one another. Where values are not defined or articulated, owners will still have a sense of what they are. Decisions (express or implied) that conflict with the owner's values will not seem right and not be satisfying to the owner. Most owners are only vaguely aware of the standards and concerns that compose their personal value systems. Most unthinkingly embrace an array of normative standards to which they assume most people adhere. Few have consciously attempted to resolve the tension that inevitably arises when those standards and concerns conflict with the expressed or unexpressed decisions of the business. That tension can lead to unresolved business disputes that tear the business apart.

The owner agreement – that understanding between multiple owners of a business – is the fabric of the business and is the basis of how the business may be sustained. This owner agreement fabric has many threads consisting of the communications between the owners. These communications, including oral, written, and experiential, are woven together to support the decision-making to operate and sustain the business. There are not many businesses that can sustain long-term operation where there is conflict among the owners.

The time-change continuum at once motivates a business to plan and prevents the planning from being effective. In a competitive marketplace, where change may be exploited for economic advantage, to sustain profitable performance over time a business must change. For the purposes of this discussion we simply recognize as axiomatic that as time continues, change at some variable pace will also continue. We can call this the time-change continuum. A business can respond to the time-change continuum in two ways: it can anticipate the change or it can react to the change. Business writers have used the terms “proactive” and “reactive” to describe these actions. A business that is proactive plans for a perceived change and may therefore deal with the change when it occurs with more effectiveness. A business that reacts to change may not act quickly enough to sustain profitable operation.

It is not what you say, but what you do. Many founders of businesses who are now owner-managers of the business they founded, will tell you they want to make their businesses more valuable. But is that reflected in the actions they take? There are established actions business owners can take to make a business more valuable. What do these actions tell you about whether you really care about making your business more valuable.