Avoid Being Distracted by Shiny Pennies

iStock_000014402814_ExtraSmallA common challenge for business owners and executives is to avoid “tripping over shiny pennies.” What does that mean? It is the attraction and distraction of the newest, latest, greatest shiny object in our path.

We all seem to have a trained eye to spot the bright copper commodity at our feet, no matter where we are headed. The shine is overwhelming. We stop. We pick it up. We put it in our pocket. Then we declare our latest “find” to be lucky. A sign of great fortunes to come.

Shiny pennies reflect a fiery glow that is hard to avoid. Old pennies lack the shine and sleekness that keep our attention. They seem drab. They are tried and have traveled far, gathering dirt and grime along the way. They often find homes in jars, drawers and bottles. New pennies have power. We have willed the new penny with charm, a source of inspiration, as we traverse along the pathway of possibilities.

The penny is representative of all the ideas and opportunities that land in front of us, one right after the other. Every time we stop to evaluate a new idea, we are taking our attention away from our current plan of action. Navigating through the countless opportunities, or shiny pennies, requires determined focus and unbridled commitment to a planned strategy. Unfortunately, in business the sparkling object we stop and pick up is often worth exactly the minted value – ONE CENT. Consuming ourselves by the possibilities of what the perceived lucky penny might bring can actually cost a business many pennies, if not fortunes.

New is not to be avoided. New keeps us innovating and trying to do more. However, the overwhelming desire to continually focus on the new penny in our pocket, can be a big distraction from working on the current business plan. Shiny pennies have a time and place. Some will need proper evaluation and careful consideration. If you are feeling consumed by all the shiny pennies, set a time in your day or week to focus on these new ideas. Plan for “new” and budget accordingly. Use a defined process in your calculation of the promise and upside.

Apply the “penny test” in your course of evaluation.  What is the real cost associated to adding this penny to your jar of other shiny pennies?  Will you spend more in product development, sales and marketing?  Is it technically feasible? How will it change your business model? Is there an impact in supply chain and distribution?  How will customers respond?  Every new penny that you stop to pick up needs thorough testing and vetting with an effective cost-benefit analysis. The amount of work to evaluate the penny is expensive, so not every penny is worthy of your valuable attention.

Be cautious of the allure of the sleek and sparkly new penny. After all, it is just one cent – shiny or not.  If you are always tripping over pennies, you might fail to see the dollars falling from the sky.

“If had a penny for every strange look I’ve gotten from strangers on the street I’d have about 10 to 15 dollars, which is a lot when you’re dealing with pennies.” – Andy Samberg 

Jamie Glass, President and CMO at Artful Thinkers

Advertisements

Ready to Hand Over the Keys to Your Business?

Business owners can easily be consumed by the short term activities of day-to-day operations.  Sole focus on immediate outcomes exposes any business to long-term financial risks.

Every business leader needs to mitigate risks associated to being the one in charge.  The value of a business is built upon the sustainability of the operating plan, with or without it’s leader.  As an owner or CEO, have you asked yourself the “what if” question?  Are you fully prepared to hand over the keys to your business today?

You may have imagined that some day you will be transitioning your leadership to a partner, an investor, the next in line or even family member.  You may see your fabulous retirement life through the eyes of selling your business in multiples above your investment. In order to realize your dream, you need to spend time and commit resources to adequately prepare for a favorable transition. When? Now.

Succession planning is critical to an effective transition.  Achieving optimal outcomes in transitioning a sustainable business requires years of preparation.  How confident are you in handing over control of your business to your successors today?  A successful transition plan gives the new leaders a complete operating manual.  They need to be adequately prepared to operate the business day one.  They need to be able to take your business forward to protect your investment and to benefit your employees, stakeholders, customers and partners.

Some owners avoid planning for the end of the business because of the time it takes away from working “in” the business right now.   The lack of preparedness puts your business value at risk. It is never too early to prepare for an exit.  Whether you are a small owner-operated business, mid-market company or family-owned enterprise, you need a definitive succession plan.  It should be part of your standard business.

Here are some tips on how to start your succession planning:

1.  Document company processes and procedures.  Everyone is not replaceable. Unfortunately, when a person leaves the business they take institutional knowledge.  Key personnel that do not document their knowledge or share it with their direct reports, cost your business long-term and expose you to great risk.  This includes the owners and founders.  You can mitigate that risk by making sure every employee documents their processes and procedures.  Start with key roles.  This is not a job description, it is a “how to” operating manual for every role in your company.

2.  Review your wealth preservation strategies with your advisors.  Meet regularly with your personal and professional financial team members to analyze your current situation and review your short and long term goals.  Be “in the know” at all times of where your business stands financially.  Use strategy and growth advisors to help you pivot the business, so that you can exceed your goals.  Update your business evaluations annually.

3.  Build a culture of knowledge sharing.  Create internal social exchanges and information sharing networks.  Use your company meetings to have one department or key player provide a highlight of their role and what it means to the business.  Reward employees for creatives ways they educate others.  Commit one hour a week per employee for education and cross-training.

4.  Host quarterly strategy updates with key personnel. Spend time with your “next generation” of leaders to share business plans, KPIs, lessons learned and company strategies.  They are the future leaders of your business and they may be executing your business plan.  Keep no secrets.  Share your wealth of knowledge.  Sharing keeps people engaged and actively participating in achieving business goals.

5.  Reward excellence in execution.  Find opportunities to reward performance for those that take initiative and demonstrate they are prepared to lead.  A business full of up and coming leaders, results in sustainability.

Exit planning helps you increase the value of your business today and in the future.  Investors and bankers should ask to see your succession plan.  As you plan your beginning, you need to plan for the end.  Make your investment of time and energy pay off more than you imagined.  Plan today to realize a profitable, rewarding and fulfilling end.

Jamie Glass, CMO & President of Artful Thinkers and Managing Director of Sales & Marketing Practice at CKS Advisors.