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Visionary and Integrator: The Most Valuable Relationship in an Organization

by Andrea Grubb on Nov 29, 2017 9:35:25 AM

In October, Hal and I had the opportunity to speak about our Visionary/Integrator (V/I) relationship on VoiceAmerica’s radio program “Operationally Speaking” with Sergiu Simmel.  It was a chance to explain our unique roles at Trilogy Partners as well as showcase the benefits of having a Visionary and Integrator within a company.

The terms Visionary and Integrator are used in the Entrepreneurial Operating System (EOS®) and are also explained in Gino Wickman and Mark C. Winters’ book Rocket Fuel.  Visionaries, generally business owners like Hal, are creative, big thinking, idea generators while Integrators like me are analytical, process oriented and drivers of the day-to-day operations.  Integrators are responsible for implementing the ideas of the Visionary.

A valuable aspect of this relationship is its complimentary yin-yang dynamic.  To put it simply, Visionaries and Integrators have opposing points of view because of their inherent “wiring”.  This healthy conflict enhances an organization since perspective on issues broadens.  When the V/I partnership is in sync, more robust resolutions formulate and, under the direction of the Integrator, lead to realistic goal setting, positive results and ultimately traction.

We at Trilogy have seen many Visionaries who have tried to fill both roles.  While not impossible, we strongly recommend having a V/I partnership since it allows for the Visionary to fully concentrate on his/her own competencies.  Just think about this:  How can a Visionary’s groundbreaking idea take flight if he/she does not have the time, bandwidth or natural skill set to keep it in motion?  As Hal mentioned on the radio program, it was only until he hired an Integrator that he felt comfortable letting go of certain areas within the business and focusing on his strengths.  He also realized that the company could scale at a faster pace with an Integrator’s support which it indeed has.

The V/I relationship is built upon trust, honesty, mutual respect and requires constant communication.   The commitment to adhere to these elements is key to its success.  It is well worth the effort and investment as a Visionary and Integrator working in conjunction with varying capabilities can be instrumental in taking a company to new heights.

Interested in listening to our radio program?  Click HERE.  Let us know what you think.

If you are curious about the Visionary/Integrator relationship and would like to learn how Trilogy can provide guidance, please email me at agrubb@gettrilogypartners.com or call at 609-688-0428.

 

 

 

 

Happy People are Better Leaders – Some Proven Tips to Improve Your Happiness Factor

by Blair Turner on Oct 31, 2017 2:12:46 PM

Have you ever worked with someone that seems genuinely happy? A person that others gravitate to because of their positivity? At Trilogy Partners, not only do we address business fundamentals, we also tackle behavioral and cultural issues and have witnessed first-hand the impact of positive psychology in the workplace.

What is positive psychology? It is the scientific study of “what makes life worth living”, empowering individuals to purposely develop an optimistic state of mind to live a rewarding and happy life.

Working on how to become happier, the research suggests, will not only make a person feel better but also boosts energy and creativity, fosters better relationships, fuels higher productivity, improves the immune system and even leads to a longer life. Data shows that happy people are better leaders, negotiators, earn more money and are more resilient in the face of hardship. Yet, there is no one secret to happiness. Each of us needs to determine which set of strategies will be most valuable. The following actions are happiness-increasing strategies supported by scientific research:

  • Positive Thinking: Gratitude & Optimism – Expressing gratitude is an antidote to negative emotions, a neutralizer of envy, hostility, worry and irritation.  Building optimism isn’t only about celebrating the present, it’s also about anticipating a bright future and noticing the right rather than the wrong.
  • Social Connection: Kindness & Relationships – Helping others makes us aware and appreciative of our own good fortune. When we commit acts of kindness, we perceive ourselves as compassionate which promotes a sense of confidence, optimism and usefulness. Moreover, these social bonds provide support in times of stress, distress and trauma.
  • Managing the Negative: Stress reduction & Forgiveness – Taking care of our bodies through meditation, physical activity and proper diet makes us feel in control of our health, reduces anxiety and increases mood-lifting hormones. The process of forgiveness, while sometimes difficult, allows one to be open to build happiness.
  • Living in the Moment: Joy & Savoring – Savoring life’s joys requires stepping outside of an experience and using our senses to embrace it. Data shows that when we make a habit of hanging on to pleasant feelings and appreciating good things, we are less likely to experience depression, stress, guilt and shame.
  • Achievement: Goals & Meaning – Committed goal pursuit provides us with a sense of purpose and a feeling of control over our lives – something to work for and look forward to. Having meaningful goals bolsters our self-esteem.

These strategies may sound trivial, yet Positive Psychology researchers have empirical data showing that when effort is put forth, they have been highly effective and are represented in the thinking and behavior patterns of the happiest participants.

Want to infuse more positivity in your personal or professional environment? Contact Blair Turner, Trilogy Alliance Partner, at bturner@gettrilogypartners.com or (609) 688-0428.

 

What Accrual Basis Accounting Can Do For You

by Tom Aiken on Sep 29, 2017 10:59:45 AM

Many early stage companies and small businesses use elementary cash-basis accounting, a simple method by which income is recorded when cash is received and expenses are recorded when cash is paid out. Often, there can be a significant time gap between recording the action (sale or purchase) and its result (payment or receipt of money).

While a small business may prefer cash-basis accounting, Trilogy Partners recommends using accrual accounting if it ever seeks additional investors, bank loans, or contemplates a sale, merger or acquisition.  In this case, the company will need historical financial statements, prepared on an accrual basis, in compliance with Generally Accepted Accounting Principles (GAAP).  Typically, these financial statements are required for the three preceding years and are also necessary if the company is required to be audited by a public accounting firm.

The complexity of recreating historical financial statements in compliance with GAAP can be both costly and time consuming especially when combined with a public audit. Any delay can prevent a timely closing of a strategic transaction and can exacerbate a cashflow problem. It is more prudent to initiate accounting methods and prepare GAAP compliant financial statements from the very beginning.  Thereby, the company will always be ready for any future financing or strategic transaction. Financial statements prepared for tax return purposes typically are not prepared on an accrual basis and will not suffice.

Consider ABC Company whose accounting records were being maintained for tax purposes only.  They acquired two companies in two years and never recorded the purchase accounting.  In addition, they utilized office space and other properties owned by the CEO and did not record the liabilities.  Subsequently, there was a downturn in the industry resulting in a liquidity crisis and ABC decided to sell the business. They found a buyer who required, among other due diligence, audited financial statements.  ABC Company attempted to engage an audit firm, however there were no financial statements prepared in accordance with GAAP. After defaulting on bank loans and paying high fees for accountants to create GAAP financial statements reflecting proper accounting for the two acquisitions, an audit was successfully completed.  During that period, the prospective buyer provided a bridge loan at punitive rates.  After four months of attorneys, outsourced accountants and auditors, ABC successfully closed a deal however, the sale was at a significantly lower purchase price all because they did not maintain financial statements that could be audited in a timely manner.

At Trilogy Partners, we believe it is better to plan for the future and BE PREPARED for opportunities when they arise.  If you’d like to learn more about accrual basis accounting and GAAP, contact me at taiken@gettrilogypartners.com or (609) 688-0428.

Trickle Down Metrics© and Why Companies MUST use Data to Drive Growth

by Jeff Bruno on Sep 06, 2017 11:59:14 AM

How do you stay competitive and manage growth? Trilogy Partners encourages its clients to rely upon data to analyze business trends. The purpose of data is to create an ongoing analysis of intelligence and the outcomes can provide impactful insights for decision making. I maintain that the key for any owner is to be able to clearly identify which Trickle Down Metrics© are the most critical drivers for their business and to focus their limited resources on monitoring these for the best outcomes.

The Trickle Down Metrics© of a company are the key performance indicators that permeate throughout all aspects of a business and drive the company towards the ultimate goals of the CEO and the organization.

Consider ABC Company, an application development company that creates custom software and applications for small-to-medium businesses at a fixed fee rate. The CEO built the company up to $2MM in revenue and $200K in annual net income within a few short years with grit, direct sales, and gut calls. His goal is to expand his team and diversify product offering within two years by increasing revenue, maintaining or increasing profitability, and reinvesting those profits into the new revenue channels.

Before acting, ABC Company identified its Trickle Down Metrics©, the data that would be used to drive decision-making:

  • Utilization Rate of Direct Labor – the percentage of a person’s total hours used to generate revenue and how much money is lost via unutilized hours
  • Booked Sales – total value of contracts closed within a given period, more pertinent to long term business health and long-term cash flows
  • Gross Profitability by Project – the gross profit of each project available to satisfy overhead expenses (total billed per project less all direct costs)
  • Billed Sales – total of value of contracts billed within a given period, more pertinent to short term cash flow

The CEO analyzed billable versus non-billable labor hours and found that his Utilization Rate of Direct Labor was around 90%, higher than industry average and an indicator that they would soon be overwhelmed. The CEO used this knowledge to confirm his decision to hire new direct employees.

The CEO then hired a VP of Sales and a Sales Administrator to ensure that his new employees would have consistent work. The two new hires spent six months closing an acceptable number and revenue of Booked Sales, however they mistakenly miscalculated the fixed fee contract.

This pricing error began to eat into Gross Profitability of Projects and some of the smaller projects weren’t profitable at all! However, by monitoring the issue over time, the CEO could isolate the issue and act before it worsened. The CEO hired a project manager sooner than originally planned to handle the estimation duties and keep labor costs down.

Billed Sales had increased 40% to $2.8MM, but ABC lost slight profitability in the short-term due to the estimation issues. Outside this slight bump, they are on track towards their goal of maintaining profitability and reinvesting cash into new revenue channels.

At Trilogy Partners, we believe that with data, decision making is focused and deliberate rather than subjective and arbitrary. If you’d like to like to learn more about using Trickle Down Metrics© to drive growth in your business, contact me at jbruno@gettrililogypartners.com or (609) 688-0428.

Strategy – What’s your ONE Idea?

by Mark Hodges on Jul 31, 2017 2:46:29 PM

It may not be a surprise that business owners often juggle multiple strategies when planning for the future. What I have found is that having many strategies can create inconsistency, ambiguity and misalignment within an organization. As an Alliance Partner at Trilogy Partners, I urge owners to focus on one single idea to drive decision making and growth.

In his book, Good to Great, Jim Collins supports this approach stating that organizations are more likely to succeed if they focus on one thing and do it well. Collins contends that answering three questions is essential to creating an effective, unifying strategy for any company. They are the keys to making a great company out of a merely good one.

#1 – What are you deeply passionate about?  All of us know that to succeed in any business, you must be passionate about it, particularly in the competitive world in which we operate. But what specifically are you passionate about as you lead your company? Is it customer delight? Creating a great place to work? Designing unique products? Achieving operational excellence? The task here is not to create or inspire a new passion – it is to discover what truly makes you passionate about your business.

#2 – What can you be the best at?  No business leader wants to be “pretty good” at their business, but few have a deep understanding of their company’s strengths, core competencies and, most important, potential for greatness. As you create a strategy for your company’s future, you must come to a deep understanding, not only of what you want to be the best at, but what you can be the best at.  This awareness will provide the unique competitive advantage that can propel your company’s growth and prosperity. It will require honesty, courage and determination to make the changes necessary to achieve “best in industry” performance.

#3 – What drives your “economic engine”?  There are countless benchmarks for measuring your company’s economic and financial performance. What is most important is that you must select the single driving economic denominator from which all your strategies and tactics will derive. Is it pure bottom line profit? Profit per product line or per customer? Many possibilities exist based on your operating model, financial resources and long-term goals. Selecting your economic denominator is an essential step in building your growth strategy as your future investment and tactical decisions will be made accordingly.

Trilogy Partners can help you answer these questions to shift your company from good to great. If you need guidance unifying your strategy, contact me at (609) 688-0428 or mhodges@gettrilogypartners.com.

 

 

Seize the Moment: Recognizing how Initiative can Grow your Organization

by Marc Celentana, PhD on Jun 30, 2017 2:05:29 PM

“Initiative is doing the right thing without being told.” – Victor Hugo

Who in your organization has the requisite initiative associated with high performance?  Do any of your employees and colleagues seem to lack initiative?

If either of these questions resonate at some level, it may be time to identify and develop leaders that can create the organization you envision.  Often, tension is associated with ensuring that we have the right people, on the right projects, at the right time.  Failure to properly attend to one or more of these variables can render even the most well-intentioned effort a money loser, morale crusher, or worse, a death knell for the organization.

When you have high performing, motivated employees engaged in meaningful, transformational projects, those who are holding the company back are clearly recognizable. Simply stated, cultivating the strengths and talents of those who demonstrate high initiative is the best insurance for sustainable organizational success.

The descriptors of high and low initiative are provided below so that you may begin to assess those in your organization on this important construct.

High initiative

Seeks responsibility above and beyond the expected
Will go the extra mile to help others
Strives to add value in all that they do
Follows through on tasks with consistency and tenacity
Appreciates the need to take reasonable risks

Low initiative

Requires considerable specific direction
Frequently adopts a “not my job” attitude
Prone to reacting to situations rather than anticipating them
Fails to persevere when faced with challenges
Postpones decision making and misses opportunities

In his book, How to Be a Star at Work: 9 Breakthrough Strategies You Need to Succeed, author Robert Kelley suggests that taking initiative involves more expansive thinking than going after ideas that make you more productive at your own job. It is a desire and willingness to move beyond a job description to reach a goal that benefits the team. Kelley asserts that an individual can be evaluated for performance on any given project by the following five standards:

  1. Doing the job well.
  2. Ensuring that others benefit from their efforts.
  3. Understanding how the project pleases customers and clients while proving profitable to the organization.
  4. Developing focus on increasingly high-level efforts.
  5. Appreciating the potential payoff in light of risks and costs.

Taking on more responsibility, active problem solving, taking risk and adding value are behaviors we want to promote and develop. If you want to learn more about how leveraging initiative can advance your most important projects and your organization, please contact Trilogy Alliance Partner Marc Celentana at (609) 688-0428 or mcelentana@gettrilogypartners.com

Shut Up and Lead!

by Bill Ehrhardt on May 31, 2017 9:38:36 AM

Have you ever thought, this would be a great place to work if we didn’t have any employees? Truthfully, it has crossed my mind on a few occasions over the years. How can any leader have such thoughts about our most valuable assets? The answer is simple, we shouldn’t. John Maxwell states “a leader is one who knows the way; goes the way; and shows the way.” Effective leaders will model the expected behaviors through actions, not words, leading to the concept of “shut up and lead.”

During the early 1990’s, Zenger-Miller published The Basic Principles for Success. Since then, I have adapted these principles as the foundation for professional relationships and the paradigm for expected organizational behavior. The principles are truly basic in concept but often difficult to achieve. They require faithful modeling from the highest level within the organization for success.

Principle 1: Focus on the work process, issue, or behavior, NOT the person. It’s human nature to make things personal in the workplace but this automatically brings emotion into the equation. Principle 1 will drive an objective approach allowing for better problem solving and decision making. My observation is that Principle 1 is more difficult in closely-held and family businesses however the results are often more powerful when practiced consistently.

Principle 2: Maintain the self-confidence and self-esteem of others. Leave sarcasm at the door! It is the greatest form of aggression in the workplace and highly demotivating. Contributing fully and risk taking is easier in a climate of trust and acceptance.

Principle 3: Maintain strong partnerships with your internal and external customers. Everyone knows how they want to be treated as a customer. Think about the potential if every employee within the organization was a customer of each other. How about other strategic partnerships and connections? The possibilities are endless for constructive and effective relationships.

Principle 4: Take the initiative to improve work processes and partnerships. Don’t only take the initiative, encourage others to do the same. Acknowledge and respond to all initiatives so your employees know that you welcome ideas and feedback.

Principle 5: Hold yourself and others accountable for commitments. Make sure there are identified positive and constructive consequences and be consistent in all interactions.

Principle 6: Lead by example. Employees want you to “know,” “go,” and “show” the way through your actions, not words. Leaders have much to gain when they can model the needed actions and attitudes to deal with the demands of business and relationships.

Effective leaders strive to practice The Basic Principles in their daily interactions. I have found that adhering to these principles will allow you to “shut up and lead” more confidently and with greater optimism to achieve your desired results.

If you are interested in implementing these principles to create an atmosphere of trust, cooperation, and positive action, contact Trilogy’s Alliance Partner Bill Ehrhardt at (609) 688-0428 or at behrhardt@gettrilogypartners.com.

Driving Accountability in Your Business

by Rip Tilden on May 01, 2017 12:05:56 PM

One of the most common concerns raised by business leaders is the desire to strengthen accountability in their organization.  When Trilogy Partners examines this concern with them, we often discover that each business owner has his or her own definition of accountability, and they all have very different views on what accountability looks like.  Let’s take a closer look at what the term means and the leadership behaviors you can focus on to strengthen accountability.

We define accountability as accepting responsibility; disclosing results in a transparent manner; being candid about your actions and the actions of others.  We recognize that defining the term is much easier than bringing it to life inside an organization.  The place to start is to look in the mirror.  Are you creating a team environment where accountability will flourish?

Patrick Lencioni, author of The Advantage, has defined four disciplines to help build healthy teams.  We turned these into four key questions that you should ask yourself as you examine the level of accountability in your organization.  If you can say “YES” to each, you will be driving accountability:

1. Have you built a cohesive leadership team?

To create an environment inside your company that will foster accountability, you must start at the top – by assembling a healthy leadership team.  That is, a team with a high level of trust and mutual respect, a team that lives by a set a well-defined core values and that is comfortable with healthy conflict.  A team with those qualities is passionate about addressing the truly tough issues facing the business and resolving them.  Team members believe in using data to drive their decisions, and they focus on team results more than individual accomplishments.

2. Are you creating clarity?

Have you answered these questions with your leadership team?

  • Why does our company exist?
  • How should we behave with each other, our customers and our vendors?
  • What is our core focus?
  • What does good performance look like? How will we succeed?
  • What is most important to do, right now?
  • Who must do what?

3. Are you overcommunicating clarity?

About the time you feel your answers to those questions have been well communicated, your team is just beginning to hear you.  It is essential that you define consistent answers to those questions and that you never stop asking and answering them.  In Lencioni’s words, you must be your own “Chief Reminding Officer”.

4. Are you reinforcing clarity?

You will reinforce your clear messages if you recruit, hire, orient, evaluate, compensate and reward your team members around the core values you have defined, and constantly discuss the answers to the questions listed above.

If you want to answer “YES” to these questions, contact Trilogy’s Alliance Partner Rip Tilden at rtilden@gettrilogypartners.com or at (609) 688-0428.  We have tackled the issue of accountability with many clients and as one noted, “Trilogy has helped our firm build a culture based on truth, knowledge, constructive debate, a passion to win, and the courage to face and fix mistakes.”

 

Ownership Transition – Key Things to Consider

by Peter Lachance on Apr 02, 2017 8:50:33 AM

All of our clients own businesses, and a recent Washington Post article claimed that sales of small businesses hit a record high in 2016.  From time to time, business owners get to a point in their lives when they want to map out an effective exit strategy for at least two reasons: 1) they would like to enjoy themselves while they’re still in good health; and, 2) they want to ensure their company’s legacy for the sake of their employees (and customers).

Trilogy Partners is currently working with a number of clients to transition business ownership either to internal hands (remaining owners, employees and/or relatives) or external hands (other companies or entrepreneurs).  In both instances, the owner is usually interested in maximizing the sales price, while also ensuring that the business can afford to survive.  In my experience, what’s not obvious to most business owners is that they must work themselves out of a job in order to maximize sales price and let others take over their legacy where they left off.

The idea of working themselves out of a job – even to maximize the sales price – is a tough pill to swallow for most business owners, especially for founders.  It’s not that the founder’s talent, skill and knowledge go unrecognized; it’s just that the new owners want to run the business, and they really can’t have anyone standing in the way.  Your mere presence may cause confusion to employees and customers.

Your business has to be sustainable without you in it if you want to achieve the best sales price and the best contractual terms as well as to ensure that your legacy will live on.  The business buyers you desire will view your business as a stream of cash flow, so the more confident they are that the stream won’t dry up, the more your business is worth to them.  Obviously, remaining successful will require that your best employees stay on to operate the business.  Smart buyers will provide incentives to those employees to entice them to stay on, and they won’t micromanage them.  If you value your legacy and your employees as much as you value protecting your net worth, keep this in mind when selecting a buyer.

Is Your Company Ready for Your Departure?

Here’s a simple test to discover how ready your business is to sustain itself without you in it: If you died today, what would become of your business?  Be honest with yourself (and write it down).  List what you must do to achieve a better outcome.  Don’t be surprised if it looks daunting.  With good professional help, and plenty of willpower on your part, you can create a sustainable business that runs without you in it.

Get Professional, Experienced Help

If you want to ensure that your legacy lives on and take a vital step towards maximizing the sales price of your business, get experienced help to prepare your business for sale.  At Trilogy Partners, we work with clients to ensure they have a sustainable business strategy, an organizational structure designed to implement that strategy, and the right people in the right seats.  We also help our clients clarify personal motivations and goals which in turn helps them to make better decisions when navigating the complexities of selling their ownership interest.

If you are considering a future transition and want to know how Trilogy Partners can help, please contact Peter Lachance at 609-688-0428 or at plachance@gettrilogypartners.com.

The “DIY” Approach to Business

by Sal Levatino on Mar 03, 2017 10:54:12 AM

Most people who start a business, particularly a small business, begin with just themselves.  They typically take on all key roles and areas, including attorney, accountant, marketing, sales and operations.  It’s usually justified based on cost since money is tight and every dollar not spent is a good thing, right?  Given the internet resources available, it seems that this concept is perfectly reasonable.  This is the Do-It-Yourself approach to business and there are some owners that can succeed with this model, but unfortunately, most do not.

As the business evolves things begin to happen that will change that model.  Perhaps the owner is successful enough so that his/her taxes become too complicated or maybe some legal or insurance issue comes up and internet resources prove totally inadequate so the owner calls on outside experts.  Outside of these kinds of specific concerns, many small business owners still expect themselves to be everything else for their business.  Over time, frustration and burnout occur and many owners find themselves losing traction.

As an alternative to the Do-It-Yourself approach, forward-thinking business owners begin to identify areas in their business where their time is not well spent.  Either because it is a low value task or it is outside their ability to perform it at a high level.  Sometimes they just need help implementing the great ideas they never have time to incorporate into their business.  They begin to see relative value in various tasks and, in order to free up their time, consider making an investment in some services.  They begin to think about spending time working “On” their business, not just “In” their business.  That’s the beginning of turning a business from Good to Great.

Trilogy Partners specializes in helping business owners shed the Do-It-Yourself approach.  We have a wide range of highly competent professionals who can guide business owners on the path from Good to Great. Take a look at these seasoned Alliance Partners on our website and make the first step to being on that journey.

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