What is this thing called 9Stucks?
9Stucks is a dynamic business diagnostic tool. It identifies nine distinct yet interrelated business challenges that cause a company to underperform.

5 Pesky Plights Hurt A Family Business (Part 1): The Seesaw

SeesawFamily-owned companies are plentiful in number and unique in character. Like any other type of company, these businesses are not immune to being infiltrated by the 9Stucks. In fact, a family business is fertile breeding ground for a unique 9Stucks mix that is often configured with a twist and a flair for the dramatic.

One blog post can’t do justice to these ‘pesky plights’ so I’ve created a 5-part series. Each post describes one misstep of family business leadership that can exacerbate the 9Stucks.

  1. Family needs vs. business needs: They are strikingly out of balance. (This is Part 1: The Seesaw)
  2. Strategic direction is stymied: Conflict over growth vs. maintaining the status quo freezes the business in its tracks. (Part 2: The Strategy Freeze)
  3. Transition/succession plan is non-existent: The owners can’t or won’t let go. (Part 3: The Handoff)
  4. Governance and decision-making at the top is concentrated and insulated: There is a weak independent board of directors/advisors, or one doesn’t exist. (Part 4: The Bubble)
  5. Sacred cows graze in the company’s organizational pasture: Top leadership spots are based on birthright or longterm ‘family favorite’ status rather than skills. These sacred cows crowd out talented non-family leaders. (Part 5: The Sacred Cows)

One caveat: This series is not intended to be a detailed discussion of all the intricacies and nuances related to management of a family owned business. There is considerable published content focused on all aspects of the family business: research, writing, business groups, websites, and magazines.

I simply want to help identify and evaluate these 5 disabling conditions – and suggest ways to get rid of them.

[Read more…]

What is this thing called 9Stucks?
9Stucks is a dynamic business diagnostic tool. It identifies nine distinct yet interrelated business challenges that cause a company to underperform.

How Scrooge and Marley Became Unstuck

Scrooge and Marley PLC was stuck.

I don’t identify my clients by name, but given the widespread publicity and overall notoriety of this particular company, I felt it would be beneficial to reveal the real ‘story behind the story’. This is a case study about how Scrooge and Marley PLC became unstuck.

Background

Scrooge and Marley was a mature, privately-held ‘counting house’. The company was founded by Jacob Marley and Ebenezer Scrooge, two aggressive, entrepreneurial clerks. There were no outside investors and no cash awards from any business accelerator programs. (Hard to imagine who might have wanted to hear their elevator pitch!)

What is a ‘counting house’? Marley called their business a ‘money-changing hole’. It was a closely held, secretive financial institution that charged high interest rates on all transactions. They were loan sharks…predatory lenders operating out of a dingy warehouse. It’s a good thing their home office was in London, otherwise they probably would have been targeted by Dodd-Frank or The Consumer Finance Protection Bureau.

Jacob Marley died while he was still employed at the company. There was no key man life insurance; they were too cheap to buy a policy. After Marley’s death, Scrooge became the sole shareholder and he decided to run Scrooge and Marley as he saw fit.

Little did Scrooge know that Jacob decided to maintain a Board observer role.

[Read more…]

What is this thing called 9Stucks?
9Stucks is a dynamic business diagnostic tool. It identifies nine distinct yet interrelated business challenges that cause a company to underperform.

CEOs: How To Deconstruct A Stuck Company Stew

Is your company’s value ebbing or declining?

Do you know ALL the reasons why your company is underperforming, or can you only pull apart some of the reasons?

Figuring out why shareholder value is deteriorating can be easy if the issues are really obvious. It can be hard and confusing if the overall situation is a quagmire.

The 9Stucks collection identifies the most common causes of why a company isn’t meeting shareholder expectations. For those of you who have looked at the 9Stucks, each standalone Stuck is straightforward and uncomplicated. Most of the significant, contributing issues that cause a company to be stuck are not hard to uncover if you know where to look.

However, the 9Stucks are usually not limited to just one or two. A stuck company always has A COLLECTION of the 9Stucks. The breadth of the collection determines the overall organizational ‘stickyness’.

This tangled, unique mix of the 9Stucks acts as a significant impediment to figuring out the real, challenging issues in the organization because it is often difficult to extricate and isolate the individual components of the mix, let alone fix them.

I call the mix Stuck Salmagundi.

Salmagundi…?

[Read more…]

What is this thing called 9Stucks?
9Stucks is a dynamic business diagnostic tool. It identifies nine distinct yet interrelated business challenges that cause a company to underperform.

CEO: Does Your Team Have Control of the Ball?

The team watching the ball slip away...

“The only players who survive in the pros are the ones able to manage all their responsibilities.” – Tom Brady, Quarterback of the New England Patriots

Football, rugby, or any other sport organized around a finely-tuned playbook, requires players to understand roles and execute plays in both familiar or unplanned situations. Each player has defined roles and responsibilities based on his skills; that player is fully aware of his role, the roles of others and has studied the plays. A solid playbook enables a cohesive team to maintain control of the ball and win.

Does your company’s playbook have:

This all too common, weak people/process combination creates lots of broken plays. Basic things like roles, skills, processes really should be a given in any organization.

But if that’s what’s ‘supposed to be’, then why have I regularly seen many corporate fumbles, pigpiles, tangled situations and outright conflict over ‘who does what and how’?

[Read more…]

What is this thing called 9Stucks?
9Stucks is a dynamic business diagnostic tool. It identifies nine distinct yet interrelated business challenges that cause a company to underperform.

How To Boost Cash Flow: 11 Recommendations That Worked

Want more Benjamins? Read below.

BuildingCo was constantly in a cash crunch.

The company manufactured a line of building products, had one production facility that supplied 12 regional warehouse/distribution centers and was founded by two entrepreneurs. BuildingCo was well positioned in a steadily growing (at the time) geographical region of the US. To help fund the company’s growth, management used a combination of outside capital from 2 private equity groups, mezzanine and senior debt.

However, as the velocity of growth accelerated, the company regularly bumped up against their line of credit availability.

They were running on cash fumes.

Pete, the CEO/Co-Founder, grew weary of his company’s cash flow problem. He had a simple solution…get a new slug of equity into the business from the 2 private equity funds and BuildingCo would be free from their growth shackles.

Sounds like an easy solution. Draw up the paperwork.

However, the private equity guys ‘suggested’ a different approach to Pete.

[Read more…]

What is this thing called 9Stucks?
9Stucks is a dynamic business diagnostic tool. It identifies nine distinct yet interrelated business challenges that cause a company to underperform.

Emotional Venting in a Stuck Company. Episode 3: Operations

This is the final post in the three-part series:

‘Emotional Venting in a Stuck Company’

This final episode explains emotional venting related to internal confusion over the company’s OPERATIONS. When I stick my head under the hood of a company and listen, I often hear lots of clanking, banging and rustling from the CEO, Board, and investors about:

  • the overall business model
  • cash (or the lack thereof)
  • the capital structure (translation – too much debt, not enough equity)
  • pricing
  • costs: fixed and variable
  • business processes, weak systems, old equipment
  • the basic forces of producing and executing

Recap of Episodes 1 &2: Episode 1 pointed out the emotional ebbs and flows associated with LEADERSHIP in a stuck company.  Their voices express what they live everyday.

Episode 2 gazed outward at the emotional toll inflicted on the business by a host of ever changing dynamics broadly called EXTERNAL FORCES. What’s happening to us?! Can a company be a victim? Maybe so, but maybe not…

The 9Stucks that relate to business OPERATIONS are Fog, Maze and Rough. The comments I hear from leadership teams about these stucks reveal a lot about the nitty-gritty functioning of the company.

Listen to what people have said when OPERATIONS are contributing to underperformance…here’s a peek at my notes from initial client meetings:

[Read more…]

What is this thing called 9Stucks?
9Stucks is a dynamic business diagnostic tool. It identifies nine distinct yet interrelated business challenges that cause a company to underperform.

Hostess Brands: Stuck in Their Own Twinkies

“Serving up family time, one smile at a time.”

- Tag line from the home page of the Hostess Brands website

Today I’m announcing that …

Hostess Brands Joins the Top 20 Stuck List

The creator of Twinkies becomes the latest iconic corporate brand to ‘get listed’. Here is my Top 20 Stuck List ranking so far:

  1. Hewlett Packard – Call the Handyman: These Garage Doors are Broken
  2. Yahoo – What Marissa Mayer Should Do To Unstick Yahoo
  3. Hostess Brands
  4. TBA (Hint: baseball team from Boston)
  5. Numbers 5-20…More to Come (any suggestions?)

Hostess filed Chapter 11 (again) this year. Do you Wonder (sorry, bad pun) what happened to drive them back into court a second time? How is it possible that a well known, ubiquitous US corporation that sells millions and millions of sweet, spongy, crumbly, powdery, chocolate and squishy things each year can’t pay its bills?

Find out why Hostess is Stuck and my Top 10 recommendations to fix the company once and for all.

[Read more…]

What is this thing called 9Stucks?
9Stucks is a dynamic business diagnostic tool. It identifies nine distinct yet interrelated business challenges that cause a company to underperform.

Stuck in the Rough: Is Your Company Overgrown With Weeds?

Growth is great, but not when unchecked growth sprouts weeds in your company’s halls, cubicles and production space.

I recently worked with the CEO (Rob) of a company (ServiceCo) that provides outsourced business transaction services to large corporations.  Rob should have been ecstatic with his record level order backlog.  Carefree, happy days were ahead!

But Rob wasn’t happy. He was pretty glum and for good reason. Two factors created the huge backlog:

  1. lots of new orders (great)
  2. the company’s collection of clogged operational practices worked against timely order completion/shipping. It was taking forever to get an order out (not great).

ServiceCo was infested with weeds; they were Stuck in the Rough. Why?

[Read more…]

What is this thing called 9Stucks?
9Stucks is a dynamic business diagnostic tool. It identifies nine distinct yet interrelated business challenges that cause a company to underperform.

Customer Satisfaction: Can I Take Your Order Please?

There should be no confusion about what a customer expects from the business relationship with a supplier.  A critical aspect of a company’s go-to-market tactics is having clear processes and effective systems that create strong connection points to the customer.

What are you most critical business processes?  How are these related to customer satisfaction?

Who owns these processes?

These four successful companies who used the 9Stucks approach have radically different business models:

  • Manufacturer of large, custom test equipment
  • Engineering services consulting firm
  • Printer of trade magazines
  • Manufacturer of precision electronic assemblies

Even though they are very different businesses, there is ONE critical thing they all had in common:

They all had one customer-centric, internal process that had no clear ownership.  

Each one of them lacked distinct accountability and ownership by ONE person over ONE important process linked directly to their customers. [Read more…]

What is this thing called 9Stucks?
9Stucks is a dynamic business diagnostic tool. It identifies nine distinct yet interrelated business challenges that cause a company to underperform.

Sacred Cow Disease aka Bad Bovine Blight

 

Let’s have a roundup and herd some cattle together.

I know you’ve run across Sacred Cows (“SCs”)…we all have in our business careers or personal life.

Dictionary.com defines a Sacred Cow to be: “an individual,organization, institution, etc., considered to be exempt from criticism or questioning”

There are good Sacred Cows, like Fenway Park, or long established brands or business practices that should not be changed.

There are Sacred Cows that are not good…these bad bovines are the people, rules, business processes, habits and/or policies that hurt company performance.

This is my first post about the ‘bad’ SCs, the ones that:

  • are difficult to change
  • are hard to get rid of
  • can’t be spoken about

The hush hush aspect of these SCs is like when Lord Voldemort (“You-Know-Who” or “He-Who-Must-Not-Be-Named”) is mentioned in the Harry Potter books – they can’t be openly discussed for fear of what might happen.

You might be thinking: “What’s the big deal – SCs will always exist so move on.”

[Read more…]