Bumps n Bruises

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.

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.

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.

Has this ever happened to you? You are speaking with someone and their response is not at all what you expected based on what you said.  At least, what you thought you said! At Trilogy Partners, we frequently hear this frustration from business owners which prompts the question, do you communicate effectively?

Communication is complicated all by itself.
Imagine how complicated communication gets when we mix different cultural understandings, gender-speak, frustration, unhappiness, underlying tensions, and the pressure of expectations and deadlines. It’s amazing we get anything right with all the challenges of effective communication and these are just some of the barriers we face!

Communication ‘gaps’ create unexpected challenges – an example:
Recently, I facilitated a training class attended by leaders of a multinational company. Suddenly, there was a big “AHA moment”.  While watching videos of themselves in conversation with each other, one leader after another said, “Why do I sound like that?  That’s not the message that I was trying to convey.”

At that moment, it became self-evident that each person experienced a ‘gap’ between their intended message and their actual behavior when communicating that message.  Why does this happen?

Components of effective communication.
How we say what we say makes a big difference in others understanding or even listening to our message.  The value of our words is only one of many components of communication.  When speaking – words are not nearly as important as your tone of voice and body language.  It has been estimated that words account for only 7% of communication while tone is about 38% and body language is 55%.  (Albert Mehrabian, 1967). How we say what we say has more meaning than the words themselves.

What these leaders saw in the video was the impact of their tone of voice and their body language.  It was their tone that communicated most loudly.  It communicated how they were feeling in a way so strongly, the words did not matter. And when they added in their body language, such as rolling eyes, dropping or shaking one’s head and even the use of a cell phone, the message was even stronger.  One leader said, “I can’t believe I came across so harshly, so rude, so disrespectful. I really do like you guys, honestly!”

Remember, we judge others by their behavior; however, we judge ourselves by our intentions.  These leaders had a gap between their intentions and their behavior.

Lessons Learned:

1. Tone is the most powerful tool when speaking. Being aware of your tone is critical to make sure your intended message is received the way you want.
2. Feelings and attitudes beneath the surface show in tone and body language. Be aware that you may sound criticizing, attacking or even nasty when you are simply frustrated.
3. Rely on others and check in with each other to ensure the right messages are getting across in the intended way. Asking others for feedback about your communication style is the beginning of changing the way you communicate.

Leadership is not about doing what is easy, it is about facing challenges and committing to change.  This change needs to start with ourselves.  Ask yourself how can you become a better communicator? And consider ways to gain an outsider’s perspective on your communication style.

If you are interested in improving your communication effectiveness, email me at results@gettrilogypartners.com or call 609-688-0428.

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.

When coaching Trilogy clients, I often make a comment that you may find valuable: “In the absence of information, most people fill in the blanks, make up their own story … and usually add negative assumptions.”

As a leader, your life is full and the last thing you’re worrying about is what other people know or don’t know. However, you understand what it feels like to be kept out of the loop. It’s uncomfortable and can lead to a lot of wasted (and wrong) assumptions.

For example, let’s say George has been coming to the office late and leaving early. He’s not himself. He doesn’t seem as engaged as he used to be. He seems a little secretive. What are you thinking?

Is George looking for a new job? Is he having trouble in his marriage? Is he suffering with an addiction or medical issue? Is he engaged in a major conflict at the office? What’s going on with George?

The answer is, “We don’t know because we’re not George.” Until George speaks up and says, “My mother was diagnosed with stage 4 cancer and has been given less than a month to live,” we don’t know. He’s not looking for a new job. He’s not intentionally letting balls drop at work. He’s just dealing with the shock of losing his mother. Now, consider the time and energy given to wrong assumptions.

So, how do we get out of this conundrum? Well, here are a few ideas:

1. Remember that not everyone has access to all the information you have

One of the main reasons why this problem exists is because we fail to remember that people don’t always have the same access to the information we do. They don’t sit in the same meetings. They don’t have the same conversations. They don’t think about the same things. And that’s a problem.

You must remember to frequently communicate relevant information to your team, to encourage dialogue, minimize distractions and keep engagement high.

2. Remember that people often forget

Another common communication issue that plagues many leaders is that they tend to think that once they’ve communicated something, everyone present heard it and will remember it—two very bad assumptions.

You know that just because someone said something in your presence doesn’t mean that you heard it. And how many things have we “heard” that we didn’t remember a few hours or days later, let alone weeks or months.

Don’t worry about over-communicating! The best communicators and leaders stay on point over long periods of time because they know that information is often not processed or forgotten.

3. Remember that Alignment and Focus are rare

While we’d like to think that the “world” is conspiring for us, the reality is that individuals often have their own agenda, including your employees. And unless someone stands up and says, “This is where we’re going” and enforces alignment and focus toward that preferred future destination, many on your team will head in the way that best suits their own self-interest. Every organization needs someone at the top continually over-communicating what’s important so that there is a clarity of purpose, focus and alignment.

So, if you want to maximize understanding, focus and results, encourage communication and set the example. When possible, share information with your team that they might not have access to. Refuse to trust their memory and never assume that saying something once will keep your team in alignment. Instead, over-communicate. Keep everyone in the loop. And don’t allow your people to fill in the blanks. Remember: “In the absence of information, most people make up their own story … and usually with negative assumptions.”

So, what do you need to communicate today? For more ideas on how we can help you elevate your communication skills, contact Trilogy Partners at 609-688-0428.

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.

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.

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.

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.