The usual myth of “The first generation builds the business, and the second generation destroys it” has been proven wrong.

Ferry Soetikno is the President Director of PT Dexa Medica who started being involved in the family business 18 years ago as a Business Development Manager. Under his father’s leadership, Dexa grew as a medium size enterprise. Now under Ferry, they’ve grown into a global company. According to him, the biggest challenge is earning the trust to take over the business from the Founder.

For a complete interview with Ferry Soetikno, go to www.youtube.com under the coachcyn channel and look for the video called “The Father Starts the Business, the Son Makes It Global.” (only in Bahasa Indonesia)

In any family business there’s a superhero called Dad or Mom who built the empire from nothing, zip, zero, zilch. The Founder went through hard times to make things work with very minimal resources. Unfortunately the superhero is mortal and is getting tired. But like many superheroes, they can only trust another superhero to replace them. So how does the Successor prove that he/she is the next superhero?

Founders, before you expect superhero strengths from your children, think of the difference in how you and your children grew up. Usually you started with nothing and you’re used to hard work. When you became successful, you made sure your kids had the best in life. Some of you even gave them special positions after they graduated and special un-earned power in your organization before they’re ready. Are they tough enough? Did you give them the life experience to make them tough?

I believe toughness is an essential ingredient to earning trust in taking over a family business.

So Successors, can toughness be taught? I believe it can on at least 2 aspects: survival and performance.

Survival. My cousin was in the process of earning trust from his dad. Every morning around 8 am, his dad rides to work in his nice car driven by a driver. He gets to work around 9 am. But his son starts out in the bottom of the corporate ladder. Did he get to ride in the same car? Of course not. And not even the family car. He leaves home at 6.30 am to take the bus to work and get there by 8 am. His father’s explanation was simple: “My other employees don’t get to ride in my car with me.” Successors, first earn your founder’s trust that you can survive without special privileges. You can learn the business and grow from the bottom wrung just like any normal employee.

Performance. When I meet many second-generation entrepreneurs and ask them, “So what do you do in your family business?” they answer, “I’m just helping out.” Helping out? “Umm, so what department are you in?” I persisted. “Oh, you know, I’m kind of assisting my dad to make sure things happen.” Right!

Founders, please help your Successor earn their trust, not just with you, but with the rest of the organization. How? Set them a clear role, clear KPI, clear rewards & consequences. In case you’re tempted to quickly put them in a managerial role, just think “If a candidate with this experience/skills came to me for a job, would I put them in a managerial role?” If the answer is No, then start them out at a more junior level. Remember they have to earn trust with the rest of the company, not just with you.

Successors, please note that trust is earned, not demanded. Don’t walk around the office demanding of people just because you’re the owner’s kid. Because you will look like the owner’s KID. Make sure you achieve your own performance before you expect others to achieve theirs.

Happy are those who earn their way by performing to the top. There’s less trouble exercising leadership once you get there.

Earning trust. That’s a big one. And it takes a team effort from both the Founder and the Son. I’m happy to see this video as an example of what could be. All it takes is clarity in terms of common goals, job roles, performance standards, and consequences.

Make it a good day.

Before you hire the designer to create a logo… before you sign a contract for billboard ads… before you fuss over the fancy slogan on your brochure… Before all that, let’s explore the foundation of a great brand.

For a complete interview with BMW President Director, Ramesh Divyanathan, go to www.youtube.com under the channel coachcyn and look for a show called The Secret of the BMW Brand.

Great companies rely on 2 things as a foundation to a strong solid sustainable brand: VALUES & PEOPLE.

VALUES.

The sexy logo and ad campaign usually follows after, but I want to make sure you are clear on the foundation of your brand before blowing off your budget creating something that has no solid base.

If I ask you what is the CORE VALUES of your brand, how quickly can you answer it? How much clarity do you have on what your brand stands for? For BMW, it’s JOY. For ActionCOACH, it’s RESULTS. What about for your brand? If you can blurt out 5-6 words, challenge yourself to find just 1 that really encapsulates all of it. Remember, your target market has so many brands to choose from with so little time to discern. ONE message, ONE word, ONE focus… delivered CONSISTENTLY.

Your brand has to know its core value. Why? Because a brand is simply a promise. And the reputation of a brand depends on the consistent and quality delivery of that promise. Now if you don’t know what you’re promising … or you’re trying to promise too many things… or your promise is not interesting… or your promise is to general, then what will make your brand stand out from the crowd?

It’s not about being better than the competitor, but being unique. You see, Mercedes exhibits LUXURY… BMW gives JOY… Volvo is all about SAFETY. So which one is better? It depends on what you as their customer is looking for. None of them is so-called “better” but they have carved out their niche very nicely. They’re not out to satisfy everyone and get total market share. They want to serve customers that appreciate their brand and need their promise. So think deep, not wide.

PEOPLE

So if your brand value is clear, the next question is: Does it echo consistently throughout your organization? Can your customers feel it when they interact with your people? Can your people feel it when they interact with their leaders?

At the end of the day, the moment of truth comes in some kind of people interaction, whether it be personal, email, phone, facebook, twitter, or whatever platform you’re using. And if your people do not exemplify the value your brand promises, then the product and logo can only do so much.

In my experience, there are so many unpredictable incidents in day-to-day business that requires people to make decisions on the spot. And in those interactions, if they are not operating under the same core value, then your people may be ruining your brand. It’s not always their fault. Are the leaders in the organization including you as the owner living the core values of the brand? Are you recruiting people who have those values? Are your training and development programs shaping those values? Are those values alive in and around the office, the plant, or in the lines of communication?

Some food for thought perhaps.

The key learning I hope you take from this issue is that SUSTAINABLE brand building starts with what we do internally, not only what we shout out externally.

Digest the learning. Enjoy the application.

That’s what your employees are thinking. That’s why the big thick book of SOP (Standard Operating Procedures) is only sitting on the shelf looking pretty. That’s why people are still following their own way of working instead of working based on your system.

The word SYSTEM stands for:

Saving Your Self Time Energy & Money.

And if your system doesn’t do that, your employees will not follow it. You can spend as much money as you’d like on your SOP, but they still won’t follow it. Think about it… would YOU follow something that makes you work harder?

So here is the challenge for business leaders: How to make my system PRACTICAL, FUN, HELPFUL, & EASILY ACCESSIBLE?

Here are just some common beliefs about systems and some questions that may help you think out of the box.

1. A business will run well if it has proper systems. I don’t disagree with this, but is that all that it needs? Are your people robots or do they want to work at something that has meaning? The best way to get your people to buy into your system is to share with them the meaning of their work, of your business, of your vision. Get people with a common vision to work with you and following a system becomes a natural thing to do.

2. Systems have to be in text form. Boring!!! Did you know that people absorb information in different ways? Some are visuals; they need pictures, diagrams, colors, visuals. Some are auditory; audio recordings, testimonials, sounds would be good. Some others are kinesthetic; they need to touch, feel, and do on the job activities. Think about a more creative way to create systems in your organization.

3. Only the leaders can revise the system. Who has a better understanding of what actually goes on in the field? You or the team? In ActionCOACH, our system uses a WIKI platform whereby any coach anywhere around the world can suggest revisions in the system based on his/her experience. What an awesome way to tap into global knowledge.

4. Only educated people understand systems. That means your system is TOO COMPLICATED! If you have simple people working for you, then how can you make it idiot-proof?

There are perhaps other beliefs you have about systems. Learn from our coaches how to create an effective and practical system that achieves your goals, instead of just looking pretty on the shelf.

Cynthia Wihardja - Firm Owner, ActionCOACH South Jakarta

Do you have a job, or do you have a business?  Are you too involved in the technical details of your business?

Today I met two sisters who owns a stationnery product line (cute envelopes, cards, wrapping paper, bags, etc) that are distributed in little point of sales in 7 different department stores.  Their products were wonderful, pretty, beautiful.  But they were limited edition only, so to say…

Why?

Because they were all hand made by THE OWNERS.  Day and night, these sisters printed, pasted, folded and wrapped all their products.  No one could do it better than them… I’m sure.

We analyzed their numbers.  They had 8100 prospects browsing and enquiring their products every month… and they serve only 80.  Their friends are begging to buy customized stationnery from them.  Their reply, “I’m sorry, I just don’t have any more time to make it.”

Isn’t that interesting?

After an hour’s talk, they realized they needed a mental switch from technician to business owner and they TOOK ACTION!! I’m proud of their spirit, I’m proud of their action.

The question is: Is your business suffering in sales & profits because you are too involved in the day to day?  Do you have enough time to think of strategies and work ON the business, instead of IN the business?

Learn to step out and let go. Learn how to do it with the least risk by following the 6 steps to build a business that runs without you.

Scenario 1: There are many companies who don’t believe in having vision statements, because it’s all just a bunch of fluff… over-reaching, high in the sky, unachievable fluff!

After some digging, we find out that the big vision or dream has never been chunked down into plans and actions.  Or if there are plans and actions, they somehow don’t connect to the bigger dream.  No wonder the vision is just fluff!

Scenario 2. A company who is busy busy busy taking action and everyone in it seems close to burning out.  Employee turnover is high, owner is frustrated… but it just seems like they’re going round and round in circles never reaching anywhere.

The question here is “Where are they going?” and interestingly, the owner doesn’t really have an answer.  In this situation, it’s a case of having a lot of busy-ness but no sense of direction… no clear dream to achieve.

So business owners, take heed!

If you want to reach your dream, whether it be personal or business, then you have to understand these 4 things:DREAMS, GOALS, PLAN, ACTION.

And YES, you have to have ALL FOUR!!

What’s your big dream for your company? What do you envision it to be 20-50 years down the road? Yes, it’s supposed to be big… it’s not supposed to be easy to achieve… it’s supposed to take time.

Now take that dream and determine the shorter term goals, say 3-5 years.  What would you have to have achieved within that time frame in terms of Finance, Sales/Marketing, Operations, and Human Resources?

Next, plan out the next 1 year in more details.  What projects would you need to finish in the next 1 year in order to bring you closer to that 3 year goal?  What resources would you need? What activities would need to be done?

Finally, take action!  What do you need to do daily, weekly, monthly in order to achieve that?  Where’s the project time table? Who’s in charge? How will progress be monitored? What are the critical drivers that need to be measured on a regular basis?

Implement these steps and watch your business start to take shape.  Start to feel your actions turn into productivity, not just activity!

Good luck and good business!

Are you using people to build your business, or are you using your business to build people?

What do you consider is your role and contribution as a business owner?

Business owners, your role and contribution goes beyond buiding your own wealth.  Owners who have self-centered visions usually have trouble getting their teams to support them wholeheartedly.  After all, why should they?  They are just being used as tools to make you rich! Aren’t they?

I hope you disagree with me on that statement.

The best and most successful business owners out there usually have a vision beyond themselves.  They see their role as bigger than just making money for themselves.  They have a wish to improve the lives of the people around them.  No wonder they get a lot of support and loyalty from their employees!!

Owners who use their business to build their people end up with a successful business.  At the end, their loyalty to people development has led to successful and sustainable business development.

On the contrary, owners who use people to build their business end up with doers and order taker mentality in their staff.  They find it difficult to trust people to do the work.  They are not willing to support risk taking and in turn there is no way to build leadership among the team.

No matter what industry you’re in, we’re all in the same industry.  The People Industry! A great lifestyle comes from great business results.  Great results come from a great team.   A great team is formed by a great leader.  Great leaders have a great vision and passion beyond themselves.

Be a great leader and your business will soar!

It’s hard to find good people these days, isn’t it?

The real question is: “Why should good people work for you?”

Many business owners and managers complain that finding and keeping good people is difficult.  What they don’t realize is that their organization is not attractive to good people.

You want a professional team, but you don’t act professional.  You want disciplined people, but you don’t even come to work on time.  You want ambitious people, but you don’t give them a clear direction of where the company is going.

Let’s explore the 7 things that good employees expect:

1. A respectable leader.  Someone they can look up to and get inspired by their passion behind the business. Someone who is congruent in their actions and cares about those around them.

2. A nice working environment.  Do they like their colleagues?  Is the office space big and clean enough to get work done?  Do they feel comfortable coming to work?

3. A good income.  The salary is the “buying price” of the employee’s services.  Good employees value themselves well and as employers, you need to appreciate that.  Also realize that they need room to grow their income.  What performance incentives have you offered to them?

4. An inspiring vision.  Good people love to perform and under their care, your business will grow.  The question is: grow to what? till when? how long? how big? Set an inspiring vision for the company and watch as the good people rise up to the challenge.

5. Challenge.  Without an inspiring vision, a company may cease to grow or find itself moving in routine circles.  Good people typically need challenge to keep them motivated, achieving, and excited to be part of the team.  Is your vision big enough to incorporate that?

6. Appreciation.  Good people need to know that you appreciate them. There are plenty of people outside your company who are appreciating them to get them to move over, but they’ve decided to stay with you.  So what will you do to recognize

Are you losing good people? Are you attracting bad ones?  Leaders shape the type of team you have.  With a leader like you, what type of team are you shaping?

What will you need to change about your leadership to enhance the quality of your people?

One of the reasons companies close down is mismanagement.  This includes improper (or lack of) management structure, lines of authority, and rules of decision making.

Especially in family businesses and partnerships, they do not separate shareholding and executive roles.  At every meeting, the largest share holder can seem to dominate decision making just because he/she has got more money in the game.  Usually, the smaller shareholders feel uninvolved or perhaps forced into complying into the decision.  What is the percentage of buy-in, do you think, in these situations?  Close to nil.

So what happens afterwards?  Could be mutiny, false harmony, or the end of a possibly good partnership.

So what can be done to prevent this?

1. Realize that shareholding and executive positions are two different things.  You may have the biggest shareholding, but if you have been assigned the role of a Sales Director, you must respect the decision of the CEO (even though he/she is holding the smallest amount of shares)

2. If the partners still has to remain active, appoint the right person for the right job.  If your strength isn’t being a CEO, don’t put yourself at the CEO level just for the sake of being in charge.  You will make the company fail!

3. Gradually transition out into professionals.  Build your business so that it can work without you. At the end of the day, we’re only humans!  It’s hard to wear different hats and 100% never have a conflict of interest between our shareholder role and our executive role.  That’s why the best companies have chosen to build their foundation and systems, and hand the executive positions over to the professionals.  In this way, the shareholders then focus on creating and expanding the vision and keeping the executives accountable.

Clarifying roles is probably the most important things to do in order to start reaching your company vision.  There’s nothing like bad management to bring down a great company.

What’s not clear in the roles of the people working in your company?