Every new year means new challenges and new opportunities. This new year, 2023 is no different! When we asked 204 C-level executives for their 2023 predictions, their responses reflected five clear business trends:
Let’s take those one at a time.
There are some family businesses that have been around for 100 years and continued to thrive under the leadership of 5 or more generations. But they are rare – as rare as a child who loves basketball making his way to the NBA.
So notes John Messervey, an organizational behavior consultant who counsels high wealth families through very difficult conversations about their family dynamic, their family business, and their hopes for the next generation.
His years of experience working with family businesses and entrepreneurs led him to develop these 12 lessons for family business success:
The pandemic had one positive effect on family businesses: More of them developed formal business succession plans. That’s according to PwC’s 10th Global Family Business Survey. The report says that 30 percent of the family firms it polled now have a formal plan in place, up from just 15 percent in the 2018 survey.
Perhaps it shouldn’t be all that surprising that so many family-owned small businesses lack a formal plan. Creating a succession plan requires having difficult discussions around emotionally fraught family dynamics:
Despite widely quoted statistics that say that only 30 percent of family businesses successfully transition to the second generation and only 13 percent survive through the third generation, a Harvard Business Review report says that is not true.
InterimExecs founder Robert Jordan learned early the tremendous weight an entrepreneur must bear: “When you own the company, it’s nothing like being an employee,” he writes in exploring the sacred trust of ownership. “You might as well compare lifting up a hundred pound weight versus a feather.”
Jordan, who founded his first small business at age 26 and “hit every speed bump you could possibly think of, and then a couple more just for creativity points,” has learned a lot along the way. Among the most important lessons: while business exit planning is critical, it is usually neglected – at the owner’s and board’s peril.
Alejandro Cremades agrees. His new book, Selling Your Startup: Crafting the Perfect Exit, Selling Your Business, and Everything Else Entrepreneurs Need to Know, hit bookstore shelves in July 2021, just as the COVID-19 pandemic was heading into the Delta phase.
He believes that an economic downtown is coming because, he says, the way “governments have been printing money” to fight the pandemic is “just not sustainable.” That means the cash small business owners need to survive could dry up quickly.
And that, in turn, will lead to wave of mergers and acquisitions, he believes, making it all that much more important for a company’s management team to add “crafting an exit strategy” to their business goals.
Every business owner is looking for ways to improve company performance. But where to start? Management consultants talk about KPIs and workflow, business strategy and culture. All important, to be sure. But in a rapidly changing world, owners and managers do well to ask themselves how they can improve business performance — even when financials look great at the time.
Often, by the time a company calls us for help, the signs of peril have been lurking or shouting out for months or years. The bottom line is that the leader missed or ignored signs of pending crisis because they failed to ask themselves critical questions.
“To satisfy the customer is the mission and purpose of every business,” said Peter Drucker, the godfather of the field of modern management. Each year, the Drucker Institute identifies the best-managed public companies in the US. The ranking gauges America’s largest publicly traded companies according to Peter Drucker’s principles of effectiveness: “Doing the right things well.” One of the metrics for performance is high quality customer satisfaction.
And it’s easy to see why customer service matters. How often do you get fed up with long call wait times, or sites that are unbelievably hard to navigate?
The days when big companies had a monopoly that meant they didn’t need to worry about customer retention are long gone. Today, customers demand that all companies — large businesses as well as small businesses — cultivate a strong positive relationship with them.
In today’s hyper competitive business climate, deeply understanding what motivates your customers and leads to customer retention must be a non-negotiable business goal.
To thrive in this economy, businesses need to take a close hard look at how customer engagement and customer satisfaction can be improved. That could mean conducting focus groups, managing a social media listening program, implementing IT initiatives to improve customer wait times, improved sales training, and/or regular customer check-ins. Every company should have a customer experience performance improvement program in place.
Knowing how well you’re serving customers right now and what you need to improve is a key measure of whether your business will be successful in the future.
“The enterprise must be able to give [its employees] a vision and a sense of mission. It must be able to satisfy their desire for a meaningful contribution to their community and society,” Drucker said.
This is not your father’s world. Hiring someone who stays with a company 25+ years is no longer a realistic goal. But there still are ways to improve employee performance, employee satisfaction, and employee productivity. What do your team members value? Gen Zers are likely to be looking beyond pay as an incentive to engage. They want mentoring, they want some say in decision-making and they want to know that they are making an impact.
If your employees are reporting low morale, lack of communication, or turning in poor work performance, it may be because they do not feel connected to your mission and vision.
Every employee should know what your organization is trying to accomplish, why the mission and vision are good for the organization and good for them, and how they can play a part in making that mission and vision come to life.
How can you better nurture and develop talent within your team?
Every business needs to spend cycles to evaluate products, services, processes, and markets. They must prune ones that are no longer relevant, and build on the success of others to continuously improve or innovate.
No sector will be spared as technology and IOT changes how we interact with products and services. Case in point: Taxis have been around for more than half a century, unchanged. Then Uber disrupted the marketplace. Hotels were the de facto go-to until Airbnb hit the market, giving consumers options to rent a whole house for the price of a cramped hotel room.
Certainly, ramping up innovation can be a challenge. Oftentimes, bringing in a fresh perspective can do wonders. There is plenty of valuable expertise in your company, but the ability to see beyond daily performance management processes and optimize for new, potentially high-performing opportunities takes a new perspective. Even if your staffs possesses the necessary skill sets to innovate, sometimes the best thinking for your business, even your industry, will come from other sectors.
What resources will you commit to R&D to learn what is working and what needs business improvement in the short-term and over a longer time frame?
If living through two years of a worldwide pandemic taught us nothing us, it’s that we are all connected. The Drucker Institute report says that management must take responsibility for the impact of their organization and do what is genuinely in the public good.
Taking time to review how your company is socially and environmentally conscious can reveal whether you are running your business as effectively as possible. What are your core values? Do people know those core values and adhere to them as to not exploit people and resources? How are you giving back to the community and your employees?
It is a priority that cannot be dismissed today. Employees as well as customers expect it.
Can you set goals that prioritize social responsibility?
Financial strength is, of course, the key to corporate effectiveness. Without it, there will be no company.
“There is only one appropriate yardstick of business performance. This is the return on all assets employed or on all capital invested,” Drucker said. “To be a marginal producer is always dangerous.”
Financial numbers alone do not paint a proper picture of a company’s management style or its health, but they cannot be overlooked. Look at your company’s financial performance against where you could be operating. Are you hitting your goals and metrics?
A well-run company is a sum of many parts, and the Drucker Institute report highlights the most important pieces you must assess to determine if your business is running optimally. A weakness in one area can easily have a domino effect, negatively impacting other areas of a business.
Owners, entrepreneurs, and management teams should conduct a business assessment to get a snapshot of the health of their organizations. If there is a lack of time and leadership resources, proactive businesses find an outside leader to conduct their needs assessment.
Harvard Business Review reports that an organization has less than a 10% chance of ever recovering from a stall in growth whether it’s due to problems with execution or failing to pivot away from a core strategy that isn’t working. To avoid being one of the statistics, ensure you are in touch with where your organization sits, and what you can consistently be improving to charge into the future.
Reach out to us for a confidential consultation to assess how an interim CEO, CFO, CIO or CMO can help improve your company’s performance.
Get excited! We are thrilled to announce the launch of our new book Right Leader Right Time: Discover Your Leadership Style for a Winning Career and Company, set to hit Amazon and other outlets, March 29. First a little backstory:
Since 2009, we have had the good fortune of speaking with thousands of executives, owners, and investors. If you look at interim as a specialty, it almost always is associated with some type of change happening within an organization. Maybe exponential growth is on the horizon. Or the opposite and the building is on fire. It could be competition is looming and fresh thinking is needed. In matching executives from the RED Team with companies big and small, we saw firsthand that the biggest predictor of success always came down to one thing: leadership.
We wrote Right Leader Right Time, to share our lens on leadership and to help leaders and organizations move toward bigger and better opportunities. Let’s jump into just a few key insights:
As we reflect on the past year, we are grateful to the incredible executives that make up InterimExecs RED Team, as well as our clients who have put their faith in us and the leaders we deploy. We’ve jumped into companies from fintech to healthcare to manufacturing. Some struggling with declining revenue, lack of systems and process, or high turnover. Others experiencing big growth — maybe even spurred on by the last two years in a pandemic and changes to consumer behavior.
We’ve wrapped up a few top highlights from the year here: 2021 Year in Review
Wishing you and your families happy holidays and a prosperous New Year!
Low price is the last refuge for marketers who don’t have the patience or guts to demonstrate value for those that need it. – Seth Godin
When it comes to buying gas for your car, fertilizer for your lawn, or for that matter the price Apple pays for the copper in your iPhone, lowest price makes sense. These are the classic definition of the word commodity – something which comes from the ground and whose price rises and falls with supply and demand.
Unfortunately, we all now use the word commodity to mean much more, applying the sense of generic-ness to just about every product and service available to us. If you are marketing soap, for example, you face over 1,000 competitors on Amazon. If however you’re the marketer behind Tesla or NetJets or the Chicago Bears football team, your job is simpler. You won’t sell as much, but your product is so highly differentiated that when your customer wants you, there’s no close substitute. You are not a commodity. You are unique.
Many company owners and board members are familiar with some aspect of litigation – or at least the threat of it. The paperwork, the Zoom calls, the meetings, hearings, depositions, the back and forth, the cost—democracy might promise a jury of our peers and having your day in court, but adjudicating a dispute the traditional route is for many, impractical, long, and expensive.
Shutdowns during the pandemic made that point all the more clear. Since the start of COVID-19, the volume of disputes has increased by more than 65% for companies over $1 billion, 50% of in-house legal teams are being pressured to spend less, and 75% of corporations want new preventative dispute mitigation procedures.
“The first question is never, ‘What is every single thing we can fight about?’ The first question out of any executive’s mouth is always, ‘This is a distraction—how quickly can we get this done and behind us?’ says attorney Rich Lee, whose 15 years in the field include general counsel roles at Livevol and Civis Analytics, a data science company stemming from Barack Obama’s 2012 re-election campaign. “Nobody, when you’re on the business side, ever relishes that dragged-out fight in any form.”
That’s why Lee teamed up with two fellow general counsels and a legal operations exec to form New Era ADR, a private arbitration and mediation platform rooted in efficiency, transparency, experience, and innovation. He says their process is 90% faster and up to 90% cheaper.
“Anytime there’s a potential dispute, it’s a massive distraction,” Lee says. “It costs the company a lot of money, a lot of time, and frankly, I think the worst part that’s immeasurable is that attention that you end up devoting to navigating a potential dispute. You could be in a sales meeting and you’ll be thinking about that dispute. It’s our firm belief that it just doesn’t have to be that way.”
We spoke with the New Era CEO and co-founder about the intricacies of arbitration vs. mediation, how to de-risk your transactions, and the best ways to protect yourself from arbitrary outcomes.
When teams struggle, it affects their productivity and the company’s bottom line. As part of a research team that evaluated the effects of another “Black Swan” event, Hurricane Katrina, I can draw direct inferences from those effects to the impact of COVID-19 and the time that it will take teams to recover.
We know how important this issue is because we hear the refrain from business owners and executives every day: You’re exhausted. Your teams are exhausted. And you worry that there’s far more under the surface, things your teams are experiencing that they’re just not talking about.
Chances are, you’re right.
Do you know whether your team might be experiencing these effects?
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