I wish I could claim authorship of the following compilation of modern strategies aimed at getting the most out of that dead horse.  These pearls of wisdom have been circulating for many years.

Tribal wisdom from pre-electronic ages says that when you discover you are riding a dead horse, the best strategy is to dismount.

In more modern times, a whole range of more advanced strategies are often employed, such as:

1. Buying a stronger whip.
2. Changing riders.
3. Threatening the horse with termination.
4. Appointing a committee to study the horse.
5. Visiting other sites to see how others ride dead horses.
6. Lowering the standards so that dead horses can be included. 
7. Hiring outside contractors to ride the dead horse.
8. Harnessing several dead horses together to increase the speed.
9. Attempting to mount multiple dead horses in hopes that one of them will spring to life.
10. Providing additional funding and/or training to increase the dead horse’s performance.
11. Doing a productivity study to see if lighter riders would improve the dead horse’s performance. 
12. Declaring that as the dead horse does not have to be fed, it is less costly, carries lower overhead, and therefore contributes substantially more to the bottom line than do some other horses.
13. Re-writing the expected performance requirements for all horses.
14. Promoting the dead horse to a supervisory position. 
15. Given such a huge investment in dead horse riding, consider that, in fact, the horse is too dead to fail. 

Enough said.  Sometimes the best strategy is to acknowledge when your product/business/service has run its course. 

(With thanks to wordpress.com). 

Melodie Zarzeczny

I clearly have selective amnesia – I have no idea how I did any of the following things before I started using email, texting, and browsing the internet:

-       plan and book any trip

-       pay bills

-       record readings on utility meters

-       find directions to any location

-       plan and execute a wedding

just to name a few.

I’m sure I phoned people, or used travel agents, or looked things up on a map, but I have been using computers, smart phones and related technology so long that I don’t really remember any of that.

And then I wake up one day and there is a “Frankenstorm” heading our way and I’m trying to find out what to do, what the weather is going to be, where it’s going to hit, and while I still can use the technology to communicate to friends and family, the radio becomes a key sources of information. Yes, I still track storm path by looking at web sites, but local information comes from the news and updates on the radio – quick information about school openings, traffic, airline status, and so on.

Internet doesn’t work when you have no power.  Radios can be battery operated and stations keep broadcasting (as long as the station’s generators are above the storm surge).

Interesting to contemplate the tremendous value of a transistor radio and a couple of double-A batteries when all our newfangled technology requires a functioning wall socket for more than a few minutes of use.  And perhaps one important reason why we should keep on funding our public broadcaster.

Christy DeMont

At various stages in their lives, a number of community minded citizens feel that they have something to offer their community as a volunteer. They may be approached by a friend or a neighbour, they make seek out volunteer opportunities, or they may be offered the opportunity to volunteer through a colleague. 

This is often how individuals are recruited to serve on a board of directors of not-for-profit organizations.  They are usually told “It will only take a few hours a month of your time.” 

Individuals who are contemplating offering their services to serve on boards of directors should ask a number of questions before making any commitment including but not limited to:

-        What do I know about Governance in the not-for-profit sector?

-        What skills and expertise does this agency require in its governance structure?

-        Can I contribute any of these skills or required expertise? What would my value added be?

-        Why does this type of volunteering appeal to me?

-        Who else is on the board?  How were they recruited?

-        What do I know about the agency’s history, its community reputation?

The demands and expectations of not-for-profit boards of directors have changed dramatically over the last 10 years.  It is not good enough to simply want to offer a few hours of one’s time by being a member of a board; this commitment goes hand in hand with many serious expectations. 

A former board member once said to me that the reason she became involved with a particular community agency was to offer some of her time to those in need – maybe to assist in fund raising.  The agency immediately offered her a position on the board of directors.  What she did not know was that the agency was in serious trouble – financial and otherwise. She was not prepared for the challenges she faced. She braved it out for two years and finally left the board not having contributed what she felt the agency needed.  She learned a very important lesson but felt frustrated and vulnerable in the end.

Susan Bihun

So often people shy away from delivering bad news or saying “no”. The reluctance to face this and communicate directly often causes more problems than delivering the news actually does. If someone has applied for a job, or delivered a proposal, or made a request of any sort, they are expecting to hear one way or the other about the decision. Uncertainty is far harder to live with than rejection.

When delivering the bad news, it’s important to provide some feedback. For example, if you have interviewed someone for a job and have selected another candidate, tell the person that “I’m sorry but we have selected another applicant. We had some very strong candidates to choose from, and we think you have very strong skills. We were particularly impressed with the insightful questions that you asked,  but we selected someone who has more experience in our industry.” This provides helpful feedback for the candidate.

If you are not able to deliver a product or service to someone on time, don’t shy away from telling them. They may choose to buy that product or service from someone else, but more likely, they will determine how to accommodate the change in schedule. If they do choose to buy from someone else, follow up with them. They may still become a customer because they now know that you are honest and care about your customers. Who wouldn’t want to do business with that kind of company?

Sheila Hamilton

Dalton McGuinty just announced plans to retire as Premier of Ontario opens the opportunity for meaningful revisions to the current Governments’ programs that contribute to the growing Provincial debt and deficit. Here are two that can save billions.

Universities: Ontario plans to create 40,000+ new undergraduate university spaces and 3 new campuses by 2016. At a current cost per student of around $14,000, that is another half billion dollars the government does not have the revenue to support. During the same time period there will be 50,000 fewer high school graduates. Rather than warehousing young people in university, what about revamping the co-op and apprenticeship skilled trades programs with private business  at nominal cost to the taxpayer.  There is a shortage of skilled trades people and a big over supply of arts and education university graduates.

Electricity: Ontario has gone from one of the lowest cost continental North American electrical systems to  2^nd highest( Long Island is still higher but not for long). Ontario has committed $35 billion for new nuclear generation that will cost homeowners at least 15 cents per kWh plus delivery, stranded debt, etc. Quebec has hydro for sale from its northern rivers for 6.5 cents per kWh and you only pay for what you use.

Time to get real at Queens Park and stop beating teachers for sick days for pennies and save billions on the big items.

Bob Fisher

Most succession plans and strategies deal with selling a business and investing the proceeds to live well through retirement.  Not much or any real thought is given to what the business owner wants to or can do with her or his time, post exit. Maybe a “bucket list” exists or the few non work activities developed over their career are still of interest.  These won’t fill the life of what has been to-date an entrepreneur mostly consumed with work. The business owners I have known all lived their work, initially out of necessity and then from habit. They literally took their identity from this business that they created, nurtured and needed to sustain their desire to build a thriving enterprise.

And then I am seeing more “young” business owners who sense it’s time to get at some of the other important undone adventures of life. As Rick George is quoted in this past weekend Globe and Mail (he has just at 62, stepped down as CEO of Suncor)``Suncor, after swallowing Petrocan, had started to become that kind of place (referring to huge Exxon Mobil Corp.) where procedures began to rule over personal initiative. The fun was gone.  According to the article he has a full post succession agenda.

One business owner commented to me that he imagined himself sitting on a plane and, upon being asked by someone what he did, having to say that he spent his time fixing up old cars. Which he does quite well in fact however he didn`t see it as his identity. He`s still running his business by the way.

So each business owner needs to spend some quality time addressing the question, ``and what now my friend?”

If a return to skiing is contemplated maybe getting into the gym with a trainer will be needed.

If the urge to “give back” is present, the way in which the proceeds from the sale of the business are invested may have to be structured to enable philanthropic gifting.

Whatever the plan, understand that going from being an owner, with important, time critical business to do, to an idle, perhaps wealthy but none-the-less idle, individual, is not healthy or after a short rest, life fulfilling.

Like the more tangible parts of the succession plan, the post succession bit needs some critical thinking and will always benefit from inputs from those close to you.  Then you will be able to say, as Mr. George does, “Life’s been full actually. I haven’t been resting on my laurels at all. And I’m quite excited about what we’re doing next”.

John Bielby

I once worked for a CEO who didn’t believe that written policies were necessary. He thought that too often, policies prevented managers from exercising flexibility and doing what was right for their employees and the company. It was a small company and usually this approach worked because he didn’t violate legislation and he hired managers who worked together to ensure consistency.      

I have seen the other side: policy manuals the size of a phone book; a policy and practice for every contingency and managers who blindly follow the policy. While I’m not advocating for zero policies, I think the CEO of that small company might have been on to something. Sometimes less is more, sometimes fairness means treating people differently and sometimes managers should have the flexibility to do the right thing.

I’m not recommending that you toss out your policy manual. However, perhaps an inventory and overhaul is in order to ensure your policies fit your company.   

1. Are some of your policies dated from the 1990’s?  You’re not alone. It’s important to review and revise your policy manual annually.  This is a requirement for Health and Safety Policies and some others regulated by legislation.  And don’t forget to update the Revision Date.
2. Do your policies reflect recent legislative changes and additions? The Human Rights Code was changed this year, AODA came into effect and Health and Safety legislation is constantly under review.
3. Do your policies have references and terminology that no longer makes sense?  If you have a policy that references teletype machines and typewriters, it’s time to update and include the latest on social media and smart phones.  
4. Are your policies so detailed that there is no room for management judgment or flexibility?  Consistency is important but sometimes treating people fairly does not mean treating everyone the same.  Policies should allow room for management discretion and sound judgment.
5. Who is your audience – your employees or lawyers?   It’s difficult to communicate the intent of a policy and hold people accountable when the language is too legalistic.  Keep it simple.  Write clearly.
6. Do your policies reflect and reinforce the values and culture of your organization?  While it is tempting to borrow policies off the internet or from other companies, the best policies reflect your company’s culture.

A policy manual will never cover every contingency and should not try. In the end no policy manual will ever take the place of sound decisions and good governance.   

Donna Brazelton

“There ain’t no such thing as a free lunch.”

This must be one of the simplest formulations of an economic rule. This phrase describes opportunity cost – that getting something that we want usually requires that we give up another thing that we also want (although presumably not as much, or not as urgently). To say it more precisely, we trade off one goal or objective against another.

In the IT world, this situation comes up all the time.  Typically, the tradeoffs you have to make are between 3 objectives:

1)   Getting a set of systems implemented that have some defined business benefit, usually revenue increases or cost savings;

2)   Meeting budget (i.e., you have a finite amount of people, money and equipment to work with)

3)   Achieving work delivery goals (i.e. getting work done within a defined period of time).

Let’s say that that you have a slate of 10 projects (objective 1) that need to be completed by your team of 15 people (objective 2) within the fiscal year (objective 3).  You and your team sit down and look at this slate of projects and determine that the work required would take the equivalent of 20 work-years. 

So you are going to have to choose between these 3 objectives, as you can’t fulfill them all. You have 3 options:

Reduce the number of projects

Relaxing objective 1 and implementing fewer solutions will cost the organization the benefits that would arise from the projects that have to be taken off the current workplan.  So the thinking here is to find the projects that make the least contribution to the success of the organization, balancing long term and short term needs.  It’s important here to guard against putting too high a priority on the urgent or short-term work over the important but long-term work.

  Increase the resources allocated to this work

Relaxing the budget constraint can alleviate the pressure, but may not always be possible if, for example, the organization has limited financial resources to work with. Other risks are taking on temporary staff to get work done and then not having the resources and skills to do ongoing management, and increasing the base maintenance demands on the team which limits the new work that can be taken on in future years.

Lengthening the schedule

The final option is to take longer to do the work – keep the projects on the list, keep the budget the same, but extend the schedule. As this means that some benefits will take longer to arrive, making this choice also has to look carefully at which projects get slowed down and implications for the business.

As you think through this process and make recommendations for changes, be sure to talk to your colleagues in the business so that they know your thinking and can support it, and to ensure that you haven’t overlooked anything in your analysis.

Questions?  Want to give me some feedback? Send me a note at cdemont@osborne-group.com.

Christy DeMont

Within the coming 15 years, more than half of the country’s current small business owners are expected to retire.  Only two in five small business owners have a clear plan for exiting their businesses.

Good succession planning increases your chances of business success.  It is the best way to secure your company’s continuity.  You can always make better business decisions by planning ahead. If you start to think about succession planning early, you can take a more objective look at your future needs and avoid last-minute decisions.

An effective succession plan will help you in a number of ways.  A succession plan has many benefits, regardless of the size of your business and what stage of the business cycle it's in.  By thinking through your plan, you can minimize the tax costs of any transition in the company’s ownership and management, work to maximize the value of your business before transition, structure the most effective retirement income for the retiring owner and have the best chance of a smooth transfer of your business.

A succession plan consists of a series of basic steps, such as setting your financial goals, determining legal requirements and establishing your objectives with your family or successor. Every situation is different, and it can often be complex and an emotional process for a business owner.

It is never too early to start the planning process.  A good succession plan can take many years to formulate, formalize and put into action.  Using expertise, as provided by the Osborne Group, can help you establish the structure of the overall plan, as well as assist in the coordination and implementation of the important transition steps in this very important area.  If you don’t already have an up-to-date plan, contact us.

Ken Goodwin

The Grandkids have just started school, the leaves are beginning to fall and the youngest Baby Boomer is turning 46 having spent over 20-25 years in the workforce.  Soon they will be looking to pursue other interests in the next two decades.

The first of the Baby Boomers as defined by David K. Foot in Boom, Bust & Echo has just turned 65. While many demographers, including Foot have forecasted a skill shortage in the future, that time has come and many organizations will be facing skilled labour shortages as the Baby Boomers begin to exit the labour force.

Currently in Canada the Baby Boomers account for 50% of the labour force over 25 years of age and 50% of the Baby Boomers labour force is over 55. While there is no longer any mandatory retirement at age 65, organizations are going to have to deal with a very huge skill and knowledge gap as individuals with 35-40 years’ work experience begin to leave their organizations.

So as a leader of an organization or an owner of your own business it has never been more important for you to have a well-developed and thorough succession plan in place for the key roles within your organization.

A solid succession plan will avoid surprizes. You don’t want to be forced due to health issues or an untimely death to do something that is not in the best interests of the business. Having the next leader ready to step in will maintain stability in the organization during turbulent times.

A good succession plan takes time to develop and implement. Not only do you need to identify the right candidate to succeed the current leader,  you also have to allow those individuals time to get the right opportunities in advance of their succession so they will truly be able to succeed once they take on the role.

Finally a well thought out succession process will maximize the return on investment that you are making in both the business and the individual. Remember it has taken years for you to gain the knowledge that allows you to be successful.  It would be a shame not to provide your replacement with that same opportunity.

We will have another blog later this month that will focus on the importance of succession planning when it involves a family run business and the need to properly focus exiting the business or passing the business on to the next generation.

Mike Dick