Questions? Call us now at 609-688-0428

What’s the “Real” Business Challenge?

by Trilogy Partners on Dec 04, 2018 1:59:04 PM

What holds a business back? Unfortunately, it’s not uncommon to see even successful companies struggle to grow. When working with Trilogy clients, challenges typically surface in the following categories:

  1. Fundamental business issues
  2. Culture of the organization
  3. Attitude towards change

Let’s explore each of these critical areas in more detail:

1. Fundamental business issues can be defined in two categories:

Growth: Strategy, Sales/Marketing and Organizational
Sustainability:
People, Financial and Processes

Examine the company and ask the following questions:

  • Is there a clear, concise written strategic plan that is aligned by all members of the team?
  • Are marketing and sales efforts being tracked, measured and getting consistent results?
  • Is there a current and future organizational chart outlining expectations, gaps and opportunities for advancement?
  • Is recruiting, training, onboarding, and compensation putting the right people in the right seats?
  • Does leadership understand what is “behind” the numbers and utilize a financial dashboard to guide decisions and increase the bottom line?
  • Are processes current and effective, making the business more competitive and more profitable.

2. The culture of the organization as measured by the following characteristics:

Foundation: Trust, Conflict, and Communications
Results:
Accountability, Courage, and Passion

Consider the following questions:

  • Is there real trust; that is, the ability to tell one another the hard truth and not be afraid to offend because of the positive intentions?
  • Is healthy conflict encouraged to get the best ideas from different point of views?
  • Is there 2-way communication that is understood at all levels of the organization with clear expectations?
  • Are all employees consistently accountable to specific measurable results?
  • Does everyone in the organization have the courage to make tough decisions and admit to mistakes?
  • Are people engaged and passionate about the company’s vision?

3. Attitude towards change

Change can be intimidating and can mean many things. When we talk about change, we focus on a willingness to embrace change, how much change can the organization handle, and what rate of change is acceptable?

What is the company’s attitude toward change? Consider the following:

  • How much change can the organization handle with its current employees, processes, technology and resources?
  • How fast can the company change emotionally, financially and organizationally?

For change to take hold, leadership must address these questions otherwise, any fundamental or cultural initiatives will fail.

So, what’s the “real” business challenge? It’s rarely ever just one thing but rather, some combination of the questions above. At Trilogy, we don’t believe that these challenges should hold a company back. Rather, addressing common issues can give a business the boost it needs. Find out how we can help; call Trilogy Partners at 609-688-0428 for a complimentary consultation.

 

 

School Smarts + Street Smarts = Success

by Trilogy Partners on Oct 01, 2018 12:46:28 PM

When working with Trilogy clients, I often tell them the story of Mitch and Jack, two high school friends with contrasting personalities.  Mitch was a loner, a straight-A student who always completed the extra credit homework and was essentially the pompous, go-to answer man when the rest of us stared back at Mr. Carmen with dazed expressions.

Jack, on the other hand, was a good student who finished his homework during lunch, right before class.  He often showed up a few minutes late, usually detained by friends seeking his brotherly advice. Jack was a very good listener and involved in many school and community activities.

Many years after graduation, I saw both men at a high school reunion.  I found it fascinating to learn how their lives had evolved. Mitch graduated at the top of his class from an Ivy League school with a law degree.  He had moved around and through various prestigious law firms as well as three wives.  His continual complaining and negativity turned off our classmates and sadly, they drifted away from his table.

Conversely, Jack earned his Associates degree and started working at IBM where he was able to complete his Bachelors.  Through the years, he moved with the company and had been promoted many times.  He now led a huge regional sales team, was married with two children, had settled into a new home and was thankful he could become more involved in the community.  The same classmates who sought his brotherly advice decades earlier were still his friends.

Like many, I grew up believing that success in school equaled success in life and in the workplace.  Intellectual Quotient (IQ testing) dominated society’s view of human potential for a hundred years.  People with school smarts or high IQs, were analytical, logical, rational and could retain and recall information at high levels. At the time of my reunion, I was reading about street smarts or people with high Emotional Intelligence (EI) who can recognize, understand and manage their own emotions and recognize, understand and influence the emotions of others.

This new concept of emotional intelligence was clarified when I reflected on how Mitch and Jack’s lives transformed into such dissimilar directions.

So why is EI important for business owners and their employees? Scientific data shows a correlation between emotional intelligence and proven success in our personal and working lives.  Daniel Goleman, who first published Emotional Intelligence in 1995, shares that Johnson and Johnson found that in divisions around the world, those identified at mid-career as having high leadership potential were far stronger in EI competencies than were their less-promising peers. This is further supported by Travis Bradberry, author of Emotional Intelligence 2.0, who wrote, “Ninety percent of top performers are also high in emotional intelligence.” and states that there is a direct link between EI success and earnings.

Is there someone like Mitch in your organization? Self-perception, Self-expression, Interpersonal skills, Decision making, Stress management and Happiness can all be assessed in an emotional intelligence test and these skills can be improved no matter our age. At Trilogy Partners, we identify barriers and help develop emotional brilliance. To learn more, call us at 609-688-0428 or email results@gettrilogypartners.com.

 

 

 

 

 

 

 

 

Navigating your Family Business from Conflict to Accomplishment

by Trilogy Partners on Jul 09, 2018 9:50:47 AM

When working with family members in business with one another, something reveals itself over and over – the ties that bind also serve as stress points for potential unraveling.  With expertise in group and family dynamics, conflict management, and behavioral science, I am often asked to provide consultation and coaching to Trilogy clients with family-owned businesses who recognize that “things could be better” from both business and personal perspectives.  Does your family experience any of these issues causing conflict and misunderstanding?

  • Decisions about the future direction of the business.
  • Differences in leadership styles, practices, and core business values.
  • Permitting undesirable and potentially destructive workplace behaviors to (erroneously) maintain harmony.
  • Differences in performance and time commitment.
  • Compensation of those actively vs. passively involved in the business.
  • Fairness, equity and expectations around time off/time away from the business with maintenance of core business activities.
  • Agreement about reinvestment of profits and the payment of dividends.
  • Clarification on how family shareholders exit the business and agreement on the basis valuation of shares in the business.
  • Identifying the next generation of leadership.
  • And, quite possibly the hardest to do but most important to address: the inability to have radically candid conversations to address ‘past hurts’ and ensure communication free from anger, spite, and/or indifference.

If not addressed in a timely fashion, any of the above concerns can accelerate loss of reputation, structure, and wealth.  However, with a thoughtful and comprehensive evaluation including collective business goals and individual hopes and dreams, there are options to increase success, satisfaction, and engagement for your family.  Below, are four approaches proven to minimize conflicts and misunderstandings:

  1. Establishing formal and informal rules for family member engagement. Creation of a family council or shareholders’ group allows establishment of a set of rules based on shared values to address key ownership issues. When seeking guidance around particularly thorny issues, this formal structure is invaluable. These values are often referred to as the family constitution.  Equally important are the informal rules that speak to the ways family members want to behave with one another. These behaviors are often referred to as the family working agreement.
  2. ‘Baking-in’ the concept of fairness and the practice of conflict resolution into all family business activities. A highly emotional response by a member feeling that others are benefitting at the expense of the family business can easily create an inhospitable environment for success. Commitment to fairness assumes that family members both appreciate how perception of inequality – of time, effort, resources, etc. – can undermine progress, and, requires a method to resolve these differences. Through the adoption of conflict resolution techniques, your family will be able to deal with business matters in a fair and equitable manner.
  3. Investing in leadership and board coaching for those actively engaged in the business. Running a family business can feel like an interminable walk about a tightrope. Competition, increased product and labor costs, shifting regulatory environment, changes in technology, problem du jour, you name it…all serve as challenges, as well as, opportunities for savvy family business leaders.  Coaching, whether it is at the level of the individual, executive team, or family board, provides high level thought partnership, creative problem-solving solutions, and can re-energize your view on yourself and others in the work.
  4. Evaluating the next generation using a thoughtful and disciplined approach. As tempting as it may be to believe that your son, daughter, niece, nephew, son-in-law, daughter-in-law, is the “perfect fit” to propel forward the interests of the family business, research and experience suggests there is much more nuance in making a good decision. While experience working in the business, ideally that which is both broad and deep, is desirable, there exist several other factors that relate to successful succession. Assessment by a competent evaluator can provide deep information about interest in taking on expanded responsibilities, possession of necessary skills sets, aptitude for requirements of the role, and, prediction about long-term success.

If you would like to learn more about how you can minimize conflict to increase growth and success in your family business, please contact Trilogy Alliance Partner Marc Celentana at (609) 688-0428 or mcelentana@gettrilogypartners.com.

 

It’s Time for a Plan!

by Trilogy Partners on Jun 05, 2018 10:04:50 AM

Companies large and small often deliberate on the need and/or depth for a strategic plan or roadmap. Is there really any reason not to have a formal plan documenting where you are; where you want to go; and how you will get there?

At Trilogy Partners, we guide business owners through the strategic planning process, allowing the organizational leadership to get out of the day-to-day and look at the business from “the clouds” or using the cliché, “working on the business, not in the business.” There is an essential difference between tactics, operational effectiveness, and strategy and we have seen first-hand how strategic planning improves overall organizational performance.

In the past, strategic plans were onerous to develop and often sat on a shelf; dusted off only when the plan was requested by a significant stakeholder. Today, the plans are living documents with magnitude and direction. Although plans are specific to each organization, here are 4 initial steps to consider:

  1. Who should participate in the process? Develop a preparation timeline with accountability.
  2. What are your core values? These are your current values, not the values you aspire to be.
  3. Is your vision or mission clearly defined? The vision is an aspirational description of what the organization would like to achieve in the mid or long-term future. It’s a guide for selecting courses of action. The mission statement defines the organization’s core purpose and overall direction. The vision is the cause or pursuit and the mission is the means to achieve the cause. Many companies are combining the vision and mission into one statement.
  4. Do you understand your Strengths, Weaknesses, Opportunities, and Threats (SWOT)? A SWOT analysis is a powerful tool to learn more about your business, people, and many other factors.

These four points create the foundation from which your plan will develop.

So, what does this look like? I worked a company on the 4 steps outlined above and from this, we identified that that growth required an investment in their people and their facilities. One year later, they have hired the right people, expanded their facility and have seen an increase in revenue and a moderate increase in profits. They are encouraged and expect that both revenue and profits will continue to grow.

Trilogy doesn’t only help you develop your plan, but we work with you to ensure that it is put into action. It’s energizing to see the results when a roadmap is not just an exercise but rather, a guiding tool that provides focus, unlocks potential and brings about necessary change. With a roadmap in place, purpose is understood, and it is easier to make critical decisions, differentiate your business, and create a more sustainable organization with higher levels of employee engagement.

So, is it time for your plan? For help with strategy and ensuring that everyone on your team is moving in the same direction, call us at 609-688-0428 or email results@gettrilogypartners.com.

 

 

Fix the Toaster

by Trilogy Partners on Apr 30, 2018 2:35:47 PM

At Trilogy Partners, we often have to ask, do you want to fix the toaster or keep scraping the burnt part off the toast? It seems like a simple question but hear me out.

How seamlessly does your organization really operate? Can you cite examples of non-productive behavior caused by the way you’re doing business now? Where are people in your organization falling further behind serving customers, making shipments, or completing their work because process improvements were not put in place?

I am prompting you to go much deeper in your thinking process than whether or not you have an up-to-date organizational chart. You and your top team need to examine if your organization is really coalescing around the best ways to get things done.

Do you need to fix your toaster?

Business Process Improvement is improving quality, productivity and response time by removing non-value adding activities and costs through a set of steps or tasks that your team uses repeatedly. If your organization has not made process improvement initiatives a priority, it’s time to take a fresh look at opportunities. While looking for areas to explore, here is a suggestion. Take a look at how your senior executives are running the business.

Observing how things are actually getting done in a department or division versus how they are supposed to be done can be quite enlightening. Often, executive leadership is shocked to learn that many of the checks and balances they thought were in place are being ignored for the sake of expediency.

Where do you expect your firm to be on that continuum of discovery when you take the time to examine it? If the answer is not what you had hoped for, look at how easy it is for someone at any level to get things done. Examine your processes for efficiency and effectiveness both vertically (relationships with people above or below in the hierarchy) and horizontally (across functional disciplines).

Are you going to fix the toaster, or do you want to keep scraping the burnt part off the toast? Contact us at results@gettrilogypartners.com if you would like to learn more about how we help owners create process for improved efficiency, productivity and employee and customer satisfaction.

An Alternative to Ownership Transition – How to be a Successful Absentee Owner

by Trilogy Partners on Apr 02, 2018 1:57:26 PM

At Trilogy Partners, we often talk with business owners about the key considerations they need to make when they transition ownership of their company to one or more people, or to another company.  However, there is an alternative to selling your ownership interest: You can systematize its operation so that employees can run it “on autopilot,” meaning that you will no longer need to steer it on a daily basis.

Putting your company “on autopilot” allows you to put off selling if you’re not yet ready to fully retire, and it expands your options for selling your company on better terms.  For example, perhaps none of your employees stand out today as the obvious choice to become the new owner. However, in 3-5 years, personal growth and increased self-confidence can change that picture.

A few decades ago, Michael Gerber wrote “The E-Myth,” a book about systematizing businesses to make the owner’s life a lot easier, while increasing both profit and sales.  The concept was popular with owners who wished to get top dollar when selling their business because turnkey businesses, where the buyer doesn’t need the seller to stay on an employee, are worth more.

The most difficult part of being an absentee business owner is that you must work yourself out of your job as the “face of the company” and allow others to step up and take over.  You may need to hire a new leader if you can’t cultivate one of your employees to do it, because not everyone wants to be the leader, and most people aren’t wired for it.  If you’re going to step all the way out of your business, you may have to develop or hire two leaders: one who is a visionary who can grow the business and develop new markets and large customers, and another who is the integrator who manages the daily operations.

Get Professional, Experienced Help

Trilogy Partners helps business owners to sustainably maximize their cash flow while they back out of their business, either to sell or enjoy owning from a distance.  The main thing you’ll need to do is to allow us to help you step away in a planned fashion.  That’s easier said than done for most owners, so that’s where we enter the picture: unlike other consulting firms, Trilogy Partners doesn’t prescribe recommendations and then leave you to make it all happen.  Instead, we partner with you long enough to ensure that the implementation is sustained.

If you are considering a future ownership transition or if you would like to explore how to become an absentee owner, please contact us at results@gettrilogypartners.com.

 

A Business Case for Courage

by Trilogy Partners on Feb 01, 2018 9:11:13 AM

Business growth is directed through strategy.  This should not be news. Most business leaders have varying levels of implementation around strategy, but most agree that something has to be done with forethought and purpose.  But what really fuels this? At Trilogy Partners, we believe that COURAGE leads to passion that inspires growth.

In August 2015, Forbes published an article (A Measure of Courage) highlighting the American Courage Index.  The article outlined business-related questions geared towards courage, as well as those questions that spoke to the social, moral and emotional aspects of courage.  Not surprisingly perhaps, the results showed that business owners are more courageous than the rest of the US population.  And further, emotional courage increases with age.  Conceptually, these outcomes make sense and jive with many of our personal experiences in the business community.

However, not everyone who works for us is a business owner or of a certain age.  What do we do about measuring and developing courage in those folks?

Courage is a difficult trait to measure.  How do we measure fortitude or fearlessness?  What about bravery or gumption?  The metrics for those should be high in those leading organizations through advancement and change.  But how do we know who has it and who doesn’t?

The arc for this type of measurement is best found in situational and behavioral study.  Measuring based upon a range of responsiveness will serve to illuminate those innate skills and aptitudes.  Survey questions are fine as step one in the process, but it should not serve as the final marker.  Those questions should challenge people to face scenarios.  Those situations should force the responder to make a choice; refrain from the “middle of the road” options as much as possible.  By doing so, we can uncover the heart behind the answer.

To reveal the emotional understanding takes conversation.  These surveys ought to foster conversation.  “What did you pick and why?” is a great opening question.  And while this may seem overly simplistic, it is valuable to the natural responsiveness needed.  It won’t be manufactured if the question is open-ended and completely based upon personal action and opinion.  People like to share what they are thinking, by and large.  And having had a written survey already done gives the employee a heads-up as to what will be reviewed.

As a commodity, courage is something to cultivate.  It’s part of the fabric that organizations often are lacking. We’re such a fear-encouraging culture – retaliation, over-compliance, bad press – that we tend to stay in our lanes and avoid risk.  That fear cripples an organization’s growth.  We are even afraid to dream.

It is a business necessity to foster courage and at Trilogy, we tackle the behavioral dynamics that often hold businesses back. We believe competitive advantages are often born out of fearlessness, risk and passion.  It takes courage to walk such a path, and it takes a courageous company to light that path.

Ready to promote and cultivate courage in your organization? Contact us at results@gettrilogypartners.com or 609-688-0428.

Visionary and Integrator: The Most Valuable Relationship in an Organization

by Trilogy Partners 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.

 

 

 

 

What Accrual Basis Accounting Can Do For You

by Trilogy Partners 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 Trilogy Partners 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.

The Latest

What’s the “Real” Business Challenge?
What holds a business back? Unfortunately, it’s not uncommon to see even successful companies struggle to grow. When working with Trilogy clients, challenges typically surface in the following categories: Fundamental business issues... read more
Maximize your Business Value
I enjoy working with Trilogy clients, helping them to better understand their financials to set strategy and drive growth. But what happens when owners want to exit the business? How can they ensure that they get the highest value for the business... read more
School Smarts + Street Smarts = Success
When working with Trilogy clients, I often tell them the story of Mitch and Jack, two high school friends with contrasting personalities.  Mitch was a loner, a straight-A student who always completed the extra credit homework and was essentially... read more