better business blog

Tips and stories to add value to you and your organisation

Successful Contracting #3 …Know Your Stakeholders

7 November 2010

When you walk into a business do you ever stop to think who really owns it? I ask this as I was reminded this week of a business buy-out story that came about when I was coaching a senior manager.

The senior manager had built a new factory in Wales, had solved a myriad of technical and logistical problems and was slowly knitting together her operators and charge-hands into a respectable crew. Naturally, she was very pleased at her success and consequently delighted when the owner approached her and said he was thinking of retiring and…

I’ll pause here, because whenever a client tells me one of these stories, and I’ve heard a few over the years, I inwardly shudder, because I know what’s going to happen next and it’s never what the client expects…

…and would she like to buy him out and own the business?

Wow, what an offer! The dream of many senior managers come true. The opportunity to short cut the difficult and risky business of actually building a business from scratch and just parachute in to one already steaming along. The chance to avoid doing grubby things like learning how to sell, how to network, how to manage cashflow (do you have a cashflow forecast to hand?…I bet not) …and just waltz in to the big swivel chair and upgrade your business card from manager to managing director.

You might just catch a whiff of cynicism in that last paragraph because there are few short cuts in business worth taking and this is one of them. Taking short cuts reduces learning and increases the chances of later failure.

In the example above, the senior manager had already started to invest time and money in financial advice, legal advice and business planning advice and had overlooked one crucial factor in any contracting process, for that is what this is all about, once you strip away the businessy veneer.

And that factor was that the owner was married. He owned all the shares, but Mrs Owner owned all the lifestyle options. The ritzy BMW, the cafe and fluffy-shopping weekly rota and most importantly the ‘wife of successful businessman social status’. She was in effect a sleeping shareholder, in that she slept with the owner and had a say in the decision making process.

I suggested to my client that Mrs Owner would soon calculate that the large sum of money gained from selling the business would only last for five years and then it would be gone. What would she do then? And if the owner had made the business his life, would she want him under her feet all day? I think not.

In the end, of course, you know how the story ended…the senior manager spent several thousand pounds researching a sale that was never going to happen, because the owner’s wife vetoed the idea.

When you’re contracting you need to make a map (or a family tree) of all interested parties and how they connect to each other AND you need to make sure each pair of connections has a robust and mutually agreed contract in place (see previous posts).

If the senior manager had done this, she would have immediately realised that Mrs Owner needed to be part of the discussions. A five minute telephone call would have told her all she needed to know and she could have then saved herself time and money.

So, the message for the week ahead is – be careful: businesses are run by owners and their unseen wives, partners, relatives, children and other stakeholders. When you’re contracting it pays to find out who these people are and to make sure you know if they need to be included in the contracting process. If you leave them out, you could easily be heading for the edge of a cliff….

If you want to see this in action, just think about how you organise a family get-together over Christmas time. Who do you need to call to make sure everyone knows who is stuffing the turkey, who is bringing the sherry, and who is running Aged Aunt Agatha home afterwards…???

Have fun!

Have you seen Brian yet?

Los Penguin Productions have posted the  Job Hunting Blues video on YouTube so please click through and enjoy it. It features Brian, our resident stunt man and he was great to work with, a real pro. Do you like his boots? And he was very happy to be able to read his own special, little copy of the book Job Hunting 3.0. If you know someone who is looking for work then please point them at Amazon where they can read reviews and order a copy of the big book.

Also, if you know someone who would be interested in this blog post please forward it to them, or ReTweet it, or let them know they can subscribe to regular emails via the box on the homepage. Many thanks.

Next Week

We will take a look at modern selling skills, which if you’re an owner-manager, or someone looking for a job, could give you an edge over your competition!

Tags: contracting

Successful Contracting #2 …Make Contact

31 October 2010

A phrase which isn’t mine, but which I wish was is ‘Contact Before Contract’. My TA chum Trudi says this to remind us that we’re dealing with people and that they need to ‘enter the room’ before we hit them with the task of agreeing contractual terms. (This applies to all agreements, even if it’s just to agree what time to be back from the pub).

Now, what I mean here is that although we may be physically present, our minds may be elsewhere. We come bowling in to a meeting with our heads full of diary dates and priorities, kids’ homework requirements, a lengthy to do list and the nagging feeling that we’ve forgotten something important. Like taking the chicken out of the freezer to defrost for dinner.

Because our heads are buzzing we need to be allowed to settle into our current environment and focus on the person whom we’re meeting with. This is why it’s really important to give people contact-making time. Meetings that start NOW just jar. People can feel flustered as their mind is still processing their previous conversation and as a result they won’t be thinking clearly about the task in hand.

You only have to watch The Apprentice, on BBC1, to see this in action. Normally bright and thoughtful people get pounced on and make terrible snap decisions because they’re given no time to settle into the space and warm up their thinking.

When we make contact with people we also warm to them and that helps to build connections at a deeper layer. This is a cornerstone of trust, which has to be present for any contracting work to be successful. If we chat, we relax and we forge little bonds that mean we want to stay put and complete the discussion.

It’s like when we walk into a swimming pool. We test the water a bit with our toes whilst we are chatting to our partner. At one level we are talking, but at another we are noticing if the water is hot or cold. If it’s cold we will tend to break off the conversation and exit for a warm shower! We tend to trust our toes!!

Making contact is easy and the trick is to think of it as productive work, and not just idle chit-chat. Three ways to allow people to settle in are:

1) Find out about them. Asking questions to find out about how they are, what they’ve been up to, what they did at the weekend are all known as ‘unconditional strokes’. (See my previous strokes blog). These little units of recognition are about us and not directly about our work, so make us feel warm because the other person is interested in us.

2) Allow enough time. How much is enough? I’ve found that 5-10 mins for every hour of planned meeting works well. Machine-gun style management is pointless and might look efficient, but just gets people riled. Build in some chat time in your meetings and you will tend to get better thinking outcomes from your teams.

3) Notice commonality. When the other party says something about a subject you are interested in then comment on it and let them know you like it too. This ‘noticing’ forges little bonds between people and helps to make strangers feel more like friends.

The message for the week ahead is to allow yourself time to be interested in the other person. A few minutes of making contact at the head of a conversation can be the biggest deciding factor as to the outcome…it could decide whether you get to go down the pub, or not!

The Promo Video…have you seen Brian yet?

Los Penguin Productions have posted the  Job Hunting Blues video on YouTube so please click through and enjoy it. It features Brian, our resident stunt man and he was great to work with, a real pro. Do you like his boots? And he was very happy to be able to read his own special, little copy of the book Job Hunting 3.0. If you know someone who is looking for work then please point them at Amazon where they can read reviews and order a copy of the big book.

This week: Would you find a friend for me please?

If you know someone who would be interested in this blog post please forward it to them, or ReTweet it, or let them know they can subscribe to regular emails via the box on the homepage. Many thanks.

Next Week

Is the third part of our trilogy on Contracting. Tune in next Monday, to complete the set!

Tags: contact, contracting, The Apprentice, Transactional Analysis