We’re not from the government but we ARE here to help!

The Fremont Group is a non-profit organization with the mission to support small business owners.  Persons who are familiar with SCORE, an agency established by the SBA to do much the same, is therefore familiar with us—with one difference.  The Fremont Group can stay with you and provide much more intensive assistance than SCORE.  To meet us, try a customize webinar.  Contact us and together we will pick an issue.  The issue could range from sales and marketing, to operations, to employee productivity, to cash flow forecasting, to creating and using your budget.  Then we will develop a webinar customized for you to address this issue.  Like what you hear and we can come in for a day and do a Business Assessment creating an Action Plan to take you to your next level.  Best of all—the webinar is free!  We want to help you—let us!  Give us a call at 303 338  9300 today to talk about it—talk is cheap!

CASE STUDY: MANAGEMENT BY COMMITTEE

Consulting firms who want to post a case study must complete on of our two standardized forms dependent upon whether or not the client has waived confidentiality.  Contact us at 303 338 9300 or by email at admin@tfginfo.org to post your case study.  Use the same format to contact this consulting firm about similar issues.

The Fremont Group works extensively with franchise owners.  In a recent engagement they encountered a franchisee who, despite being in the franchise’s top quarter of producers, had been losing money for the past year.  The initial assessment showed that morale among employees was very low; theft had occurred but not acted upon; their volume had significantly fallen off after their purchase one year prior; and three of the four owners had very little confidence in the fourth who handled the daily operations.

The Fremont Group immediately implemented actions to improve morale and terminate the employee who had been stealing.  Communications were significantly improved and employees were given a daily “focus point” for their work.  A monthly meeting was implemented to reward good performance and to obtain their “buy in” to improvement.  The managing partner was evaluated and found to be competent but not a strong “leader” in part because of his age and also due to the family situation that he faced on his board.  The company had no real concept of how their financial statements worked so sessions were done to teach them what they mean and to create key profit variables that they would track in a flash report.  This was implemented but two larger problems emerged: (1) the four owners were all family members and had a very difficult time putting aside their “baggage”; and (2) the accounting upon which the flash reports were based was extremely inaccurate.

Counseling the owners improved their ability to function.  They communicated better and were able to put aside some of the family issues.  Unfortunately, the partner responsible for accounting (also the daughter of one owner, sister of another, and sister-in-law of the managing partner), simply was not capable of producing accurate statements.  Both the managing partner and the accounting partner were being paid in excess of what the company could pay to have their services performed by third-parties—but this was in part why the four of them bought the business to begin with!

Recommendation:  Significantly cut the hours of the managing partner, pay him hourly, and have him complete the essential functions that the current employees could not perform.  Terminate the services of the accounting partner and contract for them at market.  These actions will reduce the overhead of the company to a level where profitability can be achieved.  All four partners must then cooperate to implement a marketing plan.

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Making 2011 Different—Management Retreats

The Fremont Group recently surveyed small business owners and found the following results: only 5% of small businesses held an annual management retreat however those companies that did listed it as one of their most beneficial activities. The Fremont Group routinely facilitates management retreats for companies with fewer than 100 employees—some with only 5—and finds that a properly run management retreat was a critical part of their success. They also felt that it was most important in times of difficulty (i.e. recession).

What is a management retreat? It really is as simple as taking your key employees away from the office—sometimes for only the day but more likely for two days—and, with a set agenda, involving them in the planning process of the company. For the companies that do this they get ideas and buy-in from their key people that is invaluable. The Fremont Group consultants are trained in facilitating such events. They meet with you and together determine an agenda and a budget and then are the facilitator in the meetings. They also host some part of the sessions in which you are not present. Following the retreat they assist with the follow up.

What gets done? Think of it like this—we often go to individual employees and ask them, “What could be done to help them in their job? What are their goals? How do you think you could achieve those goals?” This type of questioning often brings out key information that help you run the company. At a management retreat we are doing the same thing only doing it by department instead of by individual. When tied down the department managers almost always set the bar higher than we would have ourselves. Then we develop a plan to accomplish these goals and train them to “trickle down” the actions to the individual employees in their department. This creates a focus upon significant change and upon “their” results. A second, and equally important benefit is the elimination of communication barriers. Your key people feel more informed and empowered and therefore produce more.

Who should attend? Your management team members are your “climbers.” The management retreat is one of their ladders. Invited should be (minimally) the head of sales, operations and finance. They, together with their key people, will get out of the office and come back more focused and productive then ever.

Cluster or Network?

Over the past week we’ve seen the big differences between cluster liberals and network liberals. Cluster liberals (like cluster conservatives) view politics as a battle between implacable opponents. As a result, they believe victory is achieved through maximum unity. Psychologically, they tend to value loyalty and solidarity. They tend to angle toward situations in which philosophical lines are clearly drawn and partisan might can be bluntly applied.

Network liberals share the same goals and emerge from the same movement. But they tend to believe — the nation being as diverse as it is and the Constitution saying what it does — that politics is a complex jockeying of ideas and interests. They believe progress is achieved by leaders savvy enough to build coalitions. Psychologically, network liberals are comfortable with weak ties; they are comfortable building relationships with people they disagree with. …

The above is the introduction from David Brooks’ weekend editorial.  He is classifying politicians as “Cluster” or “Network” politicians.  This however is not a political blog, rather a small business management blog.  If you want to lead an interesting discussion between yourself and other business owners—or possibly with other high-level management personnel—as if your management style is “Cluster” or “Network.”  Ask which is better and if there are appropriate times for both.  And examine which is best suited for your organization.

Do you own a job or a business?

Working in the business means doing the tasks that should be done by and employee. Working on the business means doing the tasks that should be done by the owner. The owner doesn’t own a business he owns a job.

An owner starts his own business in order to achieve his goal of being his own boss. He discovers that he may not have a direct supervisor anymore but his income is still dependent upon him performing the same tasks that he performed in his employment and in addition to that he is swamped in “paperwork” and employee problems. He may (or more likely may not) have a greater income, but his hours and responsibilities are so greatly increased that all he has is a bigger job than the one he left. If he had put in this many hours and this much effort for his former employer he would probably be ahead of where he is now. All that he tried to achieve was self-employment and he has achieved that.

There is a significant difference between owning a business and owning a job. Having a business means that he makes his money off the efforts of others, rather than off the efforts of his own. You should make money off of every employee; therefore any business with employees should make money.

Owning a job

Some people are content with a job. As long as they are content with the hours, inability to get away, and their current compensation then they need not be changed. When a person has a job they end up with excessive work hours. They are doing the job of one or more employee and trying to do their own job (run the company). They cannot get away because systems and controls have never been established that allow them to delegate the functions of operations to others. They have no way to really know that the functions are being properly done without being there. Their compensation is limited to the number of hours that they are willing (or able) to work. They have no hope of opening a second location because the operations depend upon the personal attention of the owner and he can only be in one place. They can never sell their business because they are the business. If they left, there would be no business. Eventually the assets are sold but they years of sweat equity go uncompensated. They are good at some of the tasks and not as good at others. As their business grows they are required to do more and more tasks that they are not good at. Eventually they get overwhelmed, fail to grow and die.

Owning a business

A business owner owns a few hard assets and his systems. Why does a 1000 square foot building sell for hundreds of thousands of dollars if it is a McDonalds? Because it has ironclad systems that produce a pre-determined return based upon location. McDonalds is completely SYSTEMS DEPENDENT. Most small businesses are PEOPLE DEPENDENT. McDonald’s systems allow for the least qualified person in each position and they are so strong that the people are irrelevant to the success of the business. Most small businesses purposely become dependent upon the most qualified person in each position and become held hostage by their employees. Since the value of most small business pales in comparison to the value of McDonalds, we can assume that a SYSTEMS DEPENDENT business is better than a PEOPLE DEPENDENT business. This can only be achieved through a conscious effort on the part of the owner to do his job rather than other people’s jobs.

In order to own a business you must try to own a business. That means that significant time and resources must be spent working on the business rather than working in the business.

The Fremont Group Business Operating System™

Your computer has an operating system.  It is the combination of software that allows other programs to run and makes a worthless pile of plastic and metal morph into an efficient tool.  it is time that your business also had an operating system.  Starting in 2004 The Fremont Group has been iimagen the process of developing a Business Operating System.  As of August 1st the clients of The Fremont Group can purchase an operating system for their business.  The system includes a team of professionals—some part of The Fremont Group, some who are not—who guide you in every aspect of your business.   For a flat monthly fee you receive:

  • Up to 40 hours per month of time from the TFG Professional (eight sessions per month) where the following is completed:
  • The development of a full, usable Business Plan to keep your business focused
  • The development and use of a cash flow forecasting system
  • Development of a budget and monthly review of financial results and benchmarks from the Business Plan
  • On-going mentoring, coaching, of key staff—including yourself
  • Training for software implementation
  • Development of a sales system and training of sales staff
  • Development of Employee manual, job descriptions, reviews and other HR services
  • CRM and Operational software for full business use
  • Addition of a trained and managed, part-time Outside Sales person working on expenses and commission only (when possible)
  • Increased internet exposure to sales and marketing with the potential of referral fees for the referral of work to other trades or companies
  • Implementation of a “sales system” that includes world-class customer service through significantly increased information flow
  • Monthly analysis by a CPA of your financial statements for review with your TFG Professional
  • An annual review of your tax strategies with recommendations
  • An annual review of your insurance coverage with recommendations
  • Free legal document review by a local attorney
  • Free access to training seminars on numerous business topics
  • Free telephone consultation with a local attorney on virtually all business topics
  • Free one letter per year from a local attorney regarding virtually any business issue
  • Up to 10 initial collection letters per month from a local attorney
  • HR management software
  • And other services

All for considerably less than you would pay for an assistant general manager—or for one-day of consulting from some of the high-priced, high-pressure national consulting firms!  All programs are customized to your company and priced to match the size of your company!

Who’s got the monkey?

AN ANALOGY THAT UNDERSCORES THE VALUE OF

ASSIGNING, DELEGATING AND CONTROLLING

William Oncken, Jr. and Donald L. Wass

In any organization, the manager’s bosses, peers and subordinates, in return for their active support, impose some requirements, just as the manager imposes some requirements upon them when they are drawing upon his or her support. These demands constitute so much of the manager’s time that successful leadership hinges on an ability to control this “monkey-on-the-back” effectively. Mr. Oncken is Chairman of the Board of The William Oncken Company of Texas, Inc., a management consulting firm. Mr. Wass is President of the company.

Why is it that managers are typically running out of time while their subordinates are typically running out of work? In this article, we shall explore the meaning of management time as it relates to the interaction between managers and their bosses, their own peers and their subordinates. Specifically, we shall deal with three different kinds of management time:

Boss-imposed time – To accomplish those activities which the boss requires and which the manager cannot disregard without direct and swift penalty.

System-imposed time –To accommodate those requests to the manager for active support from his or her peers. This assistance must also be provided lest there be penalties, though not always direct or swift.

Self-imposed time – To do those things which the manager originates or agrees to do. A certain portion of this kind of time, however, will be taken by subordinates and is called “subordinate-imposed time.” The remaining portion will be his or her own and is called “discretionary time.” Self-imposed time is not subject to penalty since neither the boss nor the system can discipline the manager for not doing what they did not know the manager had intended to do in the first place.

The management of time necessitates that management get control over the timing and content of what they do. Since what their bosses and the system impose on them is backed up by penalty, managers cannot tamper with those requirements. Thus their self-imposed time becomes their major area of concern.

The manager’s strategy is therefore to increase the “discretionary” component of their self-imposed time by minimizing or doing away with the “subordinate” component. They will then use the added increment to get better control over their boss-imposed and system-imposed activities. Most managers spend much more subordinate-imposed time than they even faintly realize. Hence we shall use a monkey-on-the-back analogy to examine how subordinate-imposed time comes into being and what the superior can do about it.

WHERE IS THE MONKEY?

Let us imagine that a manager is walking down the hall and he notices one of his subordinates, Jones, coming up the hallway. When they are abreast of one another, Jones greets the manager with “Good morning. By the way, we’ve got a problem. You see….” As Jones continues, the manager recognizes in this problem the same two characteristics common to all the problems his subordinates gratuitously bring to his attention. Namely, the manager knows (a) enough to get involved, but (b) not enough to make the on-the-spot decision expected of him. Eventually, the manager says “So glad you brought this up. I’m in a rush right now. Meanwhile, let me think about it and I’ll let you know.” Then he and Jones part company.

Let us analyze what just happened. Before the two of them met, on whose back was the “monkey”? The subordinates. After they parted, on whose back was it? The manager’s. Subordinate-imposed time begins the moment a monkey successfully executes a leap from the back of a subordinate to the back of his or her superior and does not end until the monkey is returned to its proper owner for care and feeding.

In accepting the monkey, the manager has voluntarily assumed a position subordinate to his subordinate. That is, he has allowed Jones to make him subordinate by doing two things a subordinate is generally expected to do for a boss – the manager has accepted a responsibility from his subordinate, and the manager has promised her a progress report.

The subordinate, to make sure the manager does not miss this point, will later stick her head in the manager’s office and cheerily query “How’s it coming?” (This is called “supervision.”)

Or let us imagine again, in concluding a working conference with another subordinate, Johnson, the manager’s parting words are “Fine. Send me a memo on that.”

Let us analyze this one. The monkey is now on the subordinate’s back because the next move is his, but it is poised for a leap. Watch that monkey. Johnson dutifully writes the requested memo and drops it in his out-basket. Shortly thereafter, the manager plucks it from his in-basket and reads it. Whose move is it now? The manager’s. If he does not make a move soon, he will get a follow-up memo from the subordinate (this is another form of supervision). The longer the manager delays, the more frustrated the subordinate will become (he’ll be “spinning his wheels”) and the more guilty the manager will feel (his backlog of subordinate-imposed time will be mounting).

Or suppose once again that at a meeting with a third subordinate, Smith, the manager agrees to provide all the necessary backing for a public relations proposal he has just asked Smith to develop. The manager’s parting words to her are “Just let me know how I can help.” Now let us analyze this. Here the monkey is initially on the subordinate’s back. But for how long? Smith realizes that she cannot let the manager “know” until her proposal has the manager’s approval. And from experience, she realizes that her proposal will likely be sitting in the manager’s briefcase for weeks waiting for him to eventually get to it. Who’s really got the monkey? Who will be checking up on whom? Wheel spinning and bottlenecking are on their way again.

A fourth subordinate, Reed, has just been transferred from another part of the company in order to launch and eventually manage a newly created business venture. The manager has said that they should get together soon to hammer out a set of objectives for the new job, and that “I will draw up an initial draft for discussion with you.”

Let us analyze this one too. The subordinate has the new job (by formal assignment) and the full responsibility (by formal delegation), but the manager has the next move. Until he makes it, he will have the monkey and the subordinate will be immobilized.

Why does it all happen? Because in each instance the manager and the subordinate assume at the outset, wittingly or unwittingly, that the matter under consideration is a joint problem. The monkey in each case begins its career astride both their backs. All it has to do now is move the wrong leg, and – Presto! – The subordinate deftly disappears. The manager is thus left with another acquisition to his menagerie. Of course, monkeys can be trained not to move the wrong leg. But it is easier to prevent them from straddling backs in the first place.

WHO IS WORKING FOR WHOM?

To make what follows more credible, let us suppose that these same four subordinates are so thoughtful and considerate of the superior’s time that they are at pains to allow no more than three monkeys to leap from each of their backs to his in any one day. In a five day week, the manager will have picked up 60 screaming monkeys — far too many to do anything about individually. So he spends the subordinate-imposed time juggling his “priorities.”

Late Friday afternoon, the manager is in his office with the door closed for privacy in order to contemplate the situation, while his subordinates are waiting outside to get a last chance before the weekend to remind him that he will have to “fish or cut bait”. Imagine what they are saying to each other about the manager as they wait: “What a bottleneck. He just can’t make up his mind. How anyone ever got that high in our company without being able to make a decision we’ll never know.”

Worst of all, the reason the manager cannot make any of these “next moves” is that his time is almost entirely eaten up in meeting his own boss-imposed and system-imposed requirements. To get control of these, he needs discretionary time that is in turn denied him when he is preoccupied with all these monkeys. The manager is caught in a vicious circle.

But time is a-wasting (an understatement). The manager calls his secretary on the intercom and instructs her to tell his subordinates that he will be unavailable to see them until Monday morning. At 7:00 p.m., he drives home, intending with firm resolve to return to the office tomorrow to get caught up over the weekend.

He returns bright and early the next day only to see, on the nearest green of the golf course across from his office window, a foursome. Guess who?

That does it. He now knows who is really working for whom. Moreover, he now sees that if he actually accomplishes during this what he came to accomplish, his subordinates’ morale will go up so sharply that they will each raise the limit on the number of monkeys they will let jump from their backs to his. In short, he now sees with the clarity of a revelation on a mountaintop, that the more he gets caught up, the more he will fall behind.

He leaves the office with the speed of a person running from a plague. His plan? To get caught up on something else he hasn’t had time for in years: a weekend with his family. (One of the many varieties of discretionary time.)

Sunday night he enjoys ten hours of sweet, untroubled slumber because he has clear-cut plans for Monday. He is going to get rid of his subordinate-imposed time. In exchange, he will get an equal amount of discretionary time, part of which he will spend with his subordinates to see that they learn the difficult but rewarding managerial art called “The Care and Feeding of Monkeys.”

The manager will also have plenty of discretionary time left over for getting control of the timing and content not only of his boss-imposed time but of his system‑imposed time as well. All of this may take months, but compared with the way things have been, the rewards will be enormous. His ultimate objective is to manage his management time.

GETTING RID OF THE MONKEYS

The manager returns to the office Monday morning just late enough to permit his four subordinates to collect in his outer office waiting to see him about their monkeys. He calls them in, one by one. The purpose of each interview is to take a monkey, place it on the desk between them, and figure out together how the next move might conceivably be the subordinate’s. For certain monkeys, this will take some doing. The subordinate’s next move may be so elusive that the manager may decide, just for now, to merely let the monkey sleep on the subordinate’s back overnight and have him or her return with it at an appointed time the next morning to continue the joint quest for a more substantive move by the subordinate. (Monkeys sleep just as soundly overnight on subordinates’ backs as on superiors’.)

As each subordinate leaves the office, the manager is rewarded by the sight of a monkey leaving his office on the subordinate’s back. For the next 24 hours, the subordinate will not be waiting for the manager; instead, the manager will be waiting for the subordinate.

Later, as if to remind himself that there is no law against engaging in a constructive exercise in the interim, the manager strolls by the subordinate’s office, sticks his head in the door, and cheerily asks “How’s it coming?” (This time is discretionary for the manager and boss-imposed for the subordinate.) When the subordinate (with the monkey on his or her back) and the manager meet at the appointed hour the next day, the manager explains the ground rules in words to this effect:

“At no time while I am helping you with this or any other problem will your problem become my problem. The instant your problem becomes mine, you will no longer have a problem. I cannot help a person who does not have a problem.”

“When this meeting is over the problem will leave this office exactly the way it came in – on your back. You may ask my help at any appointed time and we will make a joint determination of what the next move will be and who will make it.”

“In those rare instances where the next move turns out to be mine, you and I will determine it together. I will not make any move alone.”

The manager follows this same line of thought with each subordinate until at about 11:00 a.m. he realizes that he has no need to shut his door. His monkeys are gone. They will return, but only by appointment. His appointment calendar will assure this.

TRANSFERRING THE INITIATIVE

What we have been driving at in this monkey-on-the-back analogy is to transfer initiative from superior to subordinate and keep it there. We have tried to highlight a truism as obvious as it is subtle. Namely, before developing initiative in subordinates, the manager must see to it that they have the initiative. Once he takes it back, they will no longer have it and the discretionary time can be kissed good-bye. It will all revert to subordinate-imposed time.

Nor can both manager and subordinate effectively have the same initiative at the same time. The opener, “Boss, we’ve got a problem,” implies this duality and represents, as noted earlier, a monkey astride two backs, which is a very bad way to start a monkey on its career.

Let us, therefore, take a few moments to examine what we prefer to call “The Anatomy of Managerial Initiative.” There are five degrees of initiative that the manager can exercise in relation to the boss and the system:

1. WAIT until told (lowest initiative);

2. ASK what to do;

3. RECOMMEND, then take resulting action;

4. ACT, but advise at once; and

5. ACT on own, then routinely report (highest initiative).

Clearly, the manager should be professional enough not to indulge in initiatives 1 and 2 in relation either to the boss or to the system. A manager who uses initiative 1 has no control over either the timing or content of boss-imposed or system-imposed time, and thereby forfeits any right to complain about what he or she is told to do or when. The manager who uses initiative 2 has control over the timing but not over content. Initiatives 3, 4 and 5 leave the manager in control of both, with the greatest control being at level 5.

The manager’s job, in relation to subordinates’ initiatives, is twofold; first, to outlaw the use of initiatives 1 and 2, thus giving subordinates no choice but to learn and master “Completed Staff Work”; then, to see that for each problem leaving the office there is an agreed-upon level of initiative assigned to it, in addition to the agreed-upon time and place of the next manager-subordinate conference. The latter should be duly noted on the managers’ appointment calendar.

CARE AND FEEDING OF MONKEYS

In order to further clarify our analogy between the monkey-on-the-back and the well-known processes of assigning and controlling, we shall refer briefly to the manager’s appointment schedule, which calls for five hard and fast rules governing the “Care and Feeding of Monkeys.” (Violations of these rules will cost discretionary time.):

RULE 1 Monkeys should be fed or shot. Otherwise, they will starve to death and the manager will waste valuable time on postmortems or attempted resurrections.

RULE 2 The monkey population should be kept below the maximum number the manager has time to feed. Subordinates will find time to work as many monkeys as they find time to feed, but no more. It shouldn’t take more than 5 to 15 minutes to feed a properly prepared monkey.

RULE 3 Monkeys should be fed by appointment only. The manager should not have to be hunting down starving monkeys and feeding them on a catch-as-catch-can basis.

RULE 4 Monkeys should be fed face to face or by telephone, but never by mail. (If by mail, the next move will be the manager’s, remember?) Documentation may add to the feeding process, but it cannot take the place of feeding.

RULE 5 Every monkey should have an assigned “next feeding time” and “degree of initiative.” These may be revised at any time by mutual consent, but never allowed to become vague or indefinite. Otherwise, the monkey will either starve to death or wind up on the manager’s back.

CONCLUDING NOTE

“Get control over the timing and content of what you do” is appropriate advice for managing management time. The first order of business is for the manager to enlarge his or her discretionary time by eliminating subordinate-imposed time. The second is for the manager to use a portion of this new found discretionary time to see to it that each subordinate possesses the initiative without which he or she cannot exercise initiative, and then to see to it that this initiative is in fact taken. The third is for the manager to use another portion of the increased discretionary time to get and keep control of the timing and content of both boss-imposed and system-imposed time.

The result of all this is that the manager’s leverage will increase, in turn enabling the value of each hour spent in managing management time to multiply without theoretical limit.