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Male and female coworkers discuss work over a laptop.

Delegating effectively can lift the performance of both you and your company. Strong delegation skills are a vital tool, offering benefits for both the person who delegates and the team member delegated to. However, not all delegation is effective. Here are the common traps and how to avoid them.

Dear CFO,
I keep trying to delegate work to my staff, but they either do it so poorly that it’s easier to do it myself or they ask so many questions that I can’t get anything else done anyway. How can I use better communication for more effective delegation?
– Overwhelmed by Workload in Washington D.C.

Build Your Effective Delegation Skills to Avoid Delegation Traps

It’s easy to fall into what I like to call delegation traps. You may think you’re handing off work with clear instructions, but it’s easy to miscommunicate. Clear communication is the key to avoiding delegation roadblocks. Remember, not all delegation is effective delegation. Part of building your delegation skills is learning how to give clear, concise instructions that set your team members up for success.

Not sure if you need to work on your effective delegation skills? Check out these common delegation traps and see if you’re falling into them.

The Most Common Delegation Traps: Communication Roadblocks

Woman standing in front of her team, moving post-it notes around on a meeting board.

1. Failure to define the project in terms of the SMART goal.

  • The problem: Instructions given are inadequate to complete the project and will likely result in lost time and energy as the project is fixed along the way. This leads to frustration for both parties.  It’s not patronizing to lay out the instructions clearly and if they aren’t clear, it should be no surprise when the team member has additional questions. A negative response from the delegator, in this case, is both demoralizing and unproductive for the team.
  • The fix: Lay out the requirements for the project in a SMART goal format. Follow up with the specifics on responsibilities, levels of authority, reporting and monitoring requirements. Engage the team member in the process and follow through for more effective delegation.

2. Only the dirty jobs get delegated.

  • The problem: You only delegate tedious jobs which are low visibility or just plain boring. The team member may get the impression you perceive these tasks as below you, leading to low morale.
  • The fix: Show the team you are not above any work by completing some of your own tedious tasks. For those delegated, explain the value of each task and recognize although it may not bring a Disney theme park ride to mind, it’s important. This will make the task more palatable for the team member. Effective delegation skills also include recognizing a job well done, team members are more likely to pitch in willingly when they perceive the value to them.

3. Conflicting priorities.

  • The problem: A critical, high visibility project just came up and you need to delegate. Your top team member is best for the job (this, and many others) and you shuffle their pet project to someone else.  In fact, you are always shuffling tasks around; this is damaging the attitude and productivity of your best team members.
  • The fix: Stop doing this! (Just kidding.) Make sure you establish open communication with your employees, encouraging them to bring conflicting priorities to your attention without retribution. When working as an acting Controller in a manufacturing company, I had a very good and hard-working team member who would always get the job done. I wasn’t always aware of what was on her list of priorities, so whenever I assigned or delegated a new project to her, she would simply ask what tasks on her list could get a new priority.  I accepted her process and we worked together to refine priorities and shift tasks.

Blank post-it notes on a board and a woman's hand moving one note.

4. Too little delegation.

  • The problem: You do not know what to delegate or maybe how to delegate effectively, so you keep doing tasks yourself that really should be delegated. Effective delegation skills are good for many reasons: the growth of your team, freeing up your time to help the business grow, and increasing the effectiveness and efficiency of the team by finding the best person for each project.
  • The fix: Make delegation an acceptable management objective by encouraging delegation at all levels of the organization. Train everyone on best practices to develop a set of strong delegation skills in each team member. Enable teams to focus on the higher priorities with regular communication of those priorities.

5. Lack of consistent policies, procedures, and training

  • The problem: Only one person knows how to do it–whatever “it” is. Delegating is hard, even in a growth mode, if you need to start from scratch on the process each time. Up until now, all of the information related to delegation was for a specific outcome such as a project or a report. While several of the traps apply in this scenario, there is a more basic issue in the day-to-day delegation which must be addressed: How can someone step in for your Controller while she takes a vacation if there are no policies to follow? How can you shift work from your accounts payable clerk when you need her on a short project if there are no procedures for his job, nor anyone trained to do it?
  • The fix: Effective delegation skills rely on cultivating flexibility in your team culture as well as following good delegation processes. Cross-train your team members. Setting policies to allow distributed decision making will benefit the entire team.  In the company I ran, the dispatcher had the opportunity to collect past due rents before sending service. We defined what her operating perimeters (delegation) for settling accounts was and I was involved if the customer would not comply.  It eliminated a bottleneck and increased cash flow. Document procedures to assure consistent job performance, accountability and cross-training is beneficial for all jobs. 

6. Forgetting you are accountable too.

  • The problem: Team members think they can use delegation to abdicate responsibility for various policies, procedures, projects, etc. Or, you may be pursuing a big customer and lose track of the day-to-day tasks. Well-trained team members will operate efficiently and, in most cases, get the job completed.  But, it’s important to remember, you can’t delegate accountability.
  • The fix: Team members need to keep you informed whether you like it or not. Your team needs to know you require active approval of the biggest projects, significant changes in policies (those which change a risk scenario), watch financial and operational metrics and schedule regular status meetings to keep a pulse on the business.

Remember, effective delegation skills are a useful tool to strengthen any team. Building on existing skills and helping develop new ones is the key.  Delegation works best in an environment of open and clear communication where team members can give feedback, ask questions and contribute to the final results.  When delegating, remember it is a learning experience and takes practice to implement.

If you happen to fall into any of the traps, you aren’t alone. Tomorrow is a new day and the perfect time to use these tips to improve upon your delegation skills and foster a better, more productive work environment.


Wondering why idea generation is so hard? There are creative ideation techniques you can implement to help boost your brainstorming.

We’ve all hit a creative slump before. Whether you call it writers’ block, a brain freeze, or a roadblock, when it happens, you’re stuck fast.

But in the business world, idea generation is vital to continue growing and innovating within your company. Problem-solving is also the only way to cope when day-to-day challenges crop up. When you reach a stuck point it’s time to employ your most creative ideation techniques.

What is creative ideation in the first place? What is moodling? How will teamwork help you overcome your slump (and as CEO, what if you can’t rely on teamwork to solve the bigger problems)? And what are other creative ideation techniques to help you come up with fresh new ideas?

To answer these questions, we have to start by understanding creativity.

Why is Creativity Often So Hard?

Creativity is often hard, even when creative ideation techniques like group brainstorms are used
By Mathew Henry

If you’ve struggled to come up with new approaches to a business problem, chances are you’ve asked yourself the question more than once: why is it so hard to be creative?

The noted economist John Maynard Keynes stated, “The difficulty lies not so much in developing new ideas as in escaping from old ones.” We often use creative ideation techniques to start the process of escaping from our old ideas because frankly, innovative thinking is hard.

In the 1920’s Jean Piaget, a well-known psychologist theorized on how we use schemas to sort and categorize our world, easing the burden of absorbing the stimuli around us. We quickly draw conclusions within our schema (in other words, how we see the world working).

Schemas help us in many ways. We can quickly walk into a situation and draw fast conclusions about the environment. Our brains tap into our prior experience to assess the situation and decode what’s going on, they lead us to recognize aspects of the scenario we’ve encountered before. They also cause us to overlook or ignore aspects that fall outside of our recognition.

Whether you call it a schema or your operating paradigm, it’s a viewpoint that comes at a cost. These fast conclusions and judgments are hard to change. They lead us to stereotypes. Because we rely on our viewpoints so readily, we often miss information and new opportunities as we fight to hold our world within a comfortable schema. Hence, this myopic view results in the difficulty we experience when it comes to generating innovative ideas. We can’t think outside the box if we’re only aware of what’s inside.

Can we adjust our schema? Of course, but it takes work and deliberate conscientious effort because our schemas are often very deeply ingrained in our thinking. Through learning, exploring, and seeking new experience, we will eventually adjust our schemas. This is often why collaborating and other creative ideation techniques are so valuable when we’re troubleshooting a problem. Working with others helps us broaden our viewpoint.

Team Participation for New Ideas

Encourage your team to engage in creative ideation techniques
By Mathew Henry

If you want to generate new ideas and spur creative thinking, involving multiple collaborators and team members is often a good approach. If your office culture fosters an atmosphere of sharing and working together, this may already be part of your process. If not, you may find you need to open the floor to new ideas.

The classic ideation process is usually approached as a group activity. Active participation is encouraged by operating under the rule of no criticism. Every idea is considered “good” until the evaluation or selection phase.

To shake people loose from their schema, the creative ideation techniques include engaging different senses such as:

  • – Verbal/auditory (brainstorming)
  • – Physical participation (role play, kinesthetics)
  • – Visual (storyboarding, mind mapping)
  • – Writing (brainwriting, free writing)
  • – …Or actively challenging the status quo with pure brain games.

These brain games challenge participants to think differently by making new associations, questioning assumptions, or using data points to generate a new perspective.

Group ideation techniques are effective in a wide range of organizations. Nearly any industry can implement creative ideation techniques to enhance problem-solving and encourage innovation. The group ideation techniques result in many benefits such as:

  • – Active and free-flowing stimulation and association.
  • – Encouraging individuals to build on the ideas of others.
  • – Camaraderie and team building.
  • – Participation of multiple disciplines to broaden perspectives.
  • – A high volume of generated ideas to draw from in the next phase.

Of course, like any business practice, there are drawbacks to group creative ideation techniques. It’s important to be aware of these challenges as a leader, and it’s particularly important to keep these pitfalls in mind as you form groups and plan your approach:

  • – Leaders and more extroverted participants directly or indirectly (and oftentimes unintentionally) influence the flow of ideas.
  • – Groupthink might happen despite or because of the group ideation technique.
  • – The strength of the facilitator might influence the process and the outcome.
  • – The stimuli in the technique does not suit all individuals. (For example, I find it hard to stimulate my ideas with a mind mapping technique.)

Consider offering the opportunity for team members to participate using a self-selected technique individually as well as in the group. In some situations, depending on group dynamics, this customized participation may bring additional ideas to light.

Although there are hundreds of variations of creative ideation techniques, I found “18 Killer Idea Generation Techniques” to be a helpful resource. The post features an overview and explanation of each of the creative ideation techniques.

Generating Creative Ideation at the CEO Level

Oftentimes, it isn’t wise for the CEO to participate in the group ideation, as his or her participation influences outcomes. Additionally, many of the problems you need to solve as the company leader don’t fit the “public” forum of ideation. Those problems are often more challenging to resolve and require time and dedication. As the head of the company, the question becomes when do you even have TIME to think about creative problem-solving?

As CEO, you’re not only in charge of the day-to-day operations of the business. You’re constantly working on the business, as well as in the business. You’re addressing any number of mandates that you, your stakeholders, and the business book of the month espouses. Often expounding on this, busyness is viewed as a badge of honor. Whether this drive is rooted in a Protestant work ethic or has sprouted more recently, we often compete on the state of busyness.

Busyness is rampant in leadership and I personally admit I operated in that mode during much of my career. I would jealously read an article by Richard Branson or see a picture of him enjoying sailing and think that’s NOT my life. I was always busy and didn’t have time to …. (you fill in the blank). It took me quite a while to internalize the concept that busy doesn’t necessarily mean productive or effective. In fact, this constant state of frenzy probably meant I had other failings in delegation, managing my time, and over-committing. Constant busyness limits our time for creative ideation techniques or innovative approaches to problem-solving.

It’s far more beneficial if we approach our business not with an action plan but with moodling. Now admittedly, when I first came across the term, I thought it was a misspelling of “noodling” — but both words capture “go to” methodologies for creative ideation and problem-solving at the executive level. Escaping your old ideas and generating new methodologies are easier if you apply both moodling AND noodling.

What is Moodling and How Does It Boost Creativity?

Moodling is a unique and effective ideation technique that works well in executive settings
By Sarah Pflug

The term moodling was coined in 1938 by author Brenda Ueland to encourage the use of idleness to spark creativity, particularly in writing, but we can apply it to business as well. In fact, moodling is an excellent creative ideation technique, particularly when employed at the executive level.

Moodling involves idly engaging in a pleasurable activity such as sitting on the porch or taking a hike and letting your mind wander. It is typically a solitary creative activity, so you’re unlikely to find a moodling group on MeetUp. Moodling requires you to put aside distractions, be in the moment, unfocused and open for daydreaming. Moodling has no mission or clear cut objective and may not produce any flashes of brilliance.

David Robinson in his article “The Art of Moodling” states, “Moodling (is) constructive idleness. This quiet looking and thinking opens the imagination; we encourage ideas to come to us by being available and receptive. What a wonderful realization! Not only is moodling enjoyable in itself, but it gives us a return in increased creativity—better ideas, whether we translate them into writing, … inventions, or business decisions.”

For some of us, the concept of moodling may prove more challenging and come less naturally. It may, in fact even take deliberate work for us to put down our phone, turn off the podcast, set aside the stack of reading and paperwork, and mute our inbox. Moodling is the counterfoil to the state of busyness many of us embrace so readily.

Sitting idly and allowing myself to daydream hasn’t been in my skillset since childhood… Ah, the memories of messing up my Grandpa’s hayfield, the smell of the hay and the warm sunshine… oh, where was I?

With meaning and value in idleness, maybe now I can stop being jealous of Richard Branson and start following his example as an excellent moodler.

What is Noodling and How Does it Differ from Moodling?

Noodling, on the other hand, is more in my think-style. Chances are, you’re familiar with the term or have heard someone say they’re “noodling something over.”

The term noodling is derived from the slang use of noodle to describe a head or brain. The creative ideation technique of noodling is slightly different from its counterpart, moodling. Noodling is a more active ideation and problem solving technique. It’s a more focused and deliberate approach.

Noodling may mean pondering your problem in an idle or speculative manner or examining the issue from a different perspective. In moodling, you let your mind wander aimlessly and you may or may not stumble on something amazing. In noodling, you loosely focus on a specific idea, concept, or conundrum. I often noodle by putting the problem into my subconscious letting it percolate under the surface, sleeping on it, or giving it a tickle over a couple of days until an answer presents itself.

As you noodle on a problem, keep in mind framing the problem is a significant part of solving it. For example, if you frame a sales growth problem as needing to add another product, you may miss an opportunity for a joint venture offering expansion in another market.

Other Creative Ideation Techniques for Executives

Creative ideation techniques are effective and efficient ways to generate creativity in the workplace
By Mathew Henry

If you have an issue you’re trying to resolve at the executive level, it may not be appropriate fodder for your team brainstorming session. This is often why the job of CEO or President is so isolating and challenging.

Look to your network for assistance when you need to think outside the box. After moodling or noodling on a problem, it’s time to bounce it off a colleague, advisor, or coach. There’s a tendency for CEOs to feel that since the “buck stops here,” you can’t ask for help or discuss challenges with others comfortably. But the insights and perspective from someone outside the situation can prove invaluable. Look for executive roundtables, entrepreneurial affinity groups, or business leadership networks where you tap into outside resources and creative feedback.

It may also be helpful to draw on your previous experience. Look at the way you’ve creatively approached problems in the past. Could any of the methodologies work on your current issue? The problem and solution may differ, but the best approach could be similar.

Ideation and problem solving simply means coming up with ideas and throwing them at the wall to see what sticks. Think of the wildest solution and as many different approaches as possible to start. Amass a collection of ideas and then, in the next phase of problem solving, you will narrow it down and decide what’s a plausible, practical, and even innovative answer to your issue.

Featured image and all post images licensed via Burst.

Wondering how to manage team vacation requests, when your staff wants time off? Here’s how to prioritize vacation and why you should promote paid vacation.

Dear CFO,
My company recently implemented a mandatory vacation policy because the CEO believes we will benefit personally from time off, and the company will benefit from a happier, healthier, and more creative workforce. I’m concerned about how to manage team vacation requests. As you know, the workload doesn’t change based on who is in the office. I’m not sure how to make time for my team to take these vacations when we’re already over-worked.
No Vacation in 5 Years, Chattanooga, TN

I can relate to your dilemma. Knowing how to manage team vacation requests is certainly a challenge for any team leader. The workload is constant no matter who is there to perform it.

With a mandatory vacation policy, most employees will (and should) opt to take their vacation. Our company policy was “use it or lose it,” and no one chooses to lose days. With two weeks of vacation, 11 holidays and two personal days, it meant that every employee was out of the office for about a month of each year.

There are two obvious potential answers to the question of how to manage team vacation requests: 1) Staff your team 10% higher to compensate for the “lost” time, or 2) Ask your team to work overtime to make up for the deficit.

While I said those were obvious solutions to the vacation request dilemma, they may not be the right solution. Let’s look at the problem from the perspective of the CEO and get creative, especially since those two costly solutions might not fly anyway.

Why Vacation is Critical for Your Team

Most of your team members are knowledge workers, especially when it comes to their specific role. Optimizing results means relying on the wisdom, experience, and unique perspectives they bring to their job. In addition, chances are high that most of your incoming team is of the Millennial generation. These 20-30-somethings are focused on accomplishment (not time at the office) and using technology to connect and contribute.

In his book The Organized Mind, Daniel J. Levitin discusses the addiction and effects of technology and the fact that the brain uses a disproportionate 20% share of the body’s energy. These two factors support the need for vacations to allow workers to unplug, refuel, and replenish the motivation and creativity needed to perform as knowledge workers.

As a leader, you set the example for your team. If you don’t take your vacation days, or if you’re only taking “working vacations” (i.e. constantly checking your email and calling in), your team knows you don’t value vacation. There is no “do as I say, not as I do” when you are in a leadership role. Additionally, the benefits of vacation extend to managers, CEOs, and team leaders as well as their staff.

Shawn Achor, the author of The Happiness Advantage, found that employees who take time off perform better. Research supports that “when the brain can think positively, productivity improves 31%…and creativity and revenues can triple.”  As a corollary, employee retention increases. Not only are your people happier, healthier, and more productive, but their attitude will influence others on the team.

Addressing the Fears of Encouraging Vacation


Work overload often makes employees hesitant to take vacation time
image via Pixabay

With all these benefits, it seems logical that employers would jump at the chance to promote vacation, but of course, the show (or in this case work) must go on. It’s easy to see the benefits of team vacations on paper. It’s quite another to manage team vacation requests that leave you shorthanded.

The US Travel Association offers some statistics that show just how common the fear is for employees when they fill out their PTO request:

  • 40% of employees are afraid of the mountain of work that they will have upon return.
  • 35% say they are the only ones who can do their jobs.
  • 25% are even afraid of losing their jobs (although the current tight labor situation may impact this stat slightly).

While you may be one of the 28% of leaders who “cringe” at approving time off or the 32% who believe other employees have extra burdens when team members take time off, the fact of the matter is a vacation is still important for morale. If you’re seeking optimal performance from your team members, you need to approve at least some of those requests.

In fact, it could be a fear of judgment or repercussions that is preventing your team from putting in their requests. Yet, if you want to encourage productivity and a positive work environment, vacation is necessary for everyone.

Cruise Planners CEO, Tanya Murphy says, “Before I owned my travel agency, I worked in corporate America. I observed that some of my colleagues wouldn’t take a vacation out of a sense that it would hurt their career ambitions. I took every vacation day I was allowed, and I was promoted several times in my 16-year career. If employees are delivering work while they’re there, then they shouldn’t worry they’ll be seen as a slacker. Take your vacation days!”

As CEO of a small company with a policy of 23 days off per year, I dealt directly with the dilemma of how to manage team vacation requests. The fears of untold piles of work, being the only person who knew the job, or worries about being replaced were very real. In a small company, there are several steps to take to relieve these fears and this is where strong systems and company culture come into play:

    • Every position should have a set of clearly outlined policies and procedures that assure consistent treatment of the company business. This would allow anyone to step in at a moment’s notice to perform the job
    • At least two people should be trained in each position. At my company, we used vacations as an opportunity for “refreshing” the skills of the backup person.
    • Process critical work while a team member is on vacation. For example, the backup person processes cash but filing can wait for the regular team member’s return.
    • Spread some tasks among other team members to alleviate the backlog. All team members recognize that the same consideration applied when they vacationed.
    • Consider hiring a temporary worker to fill the role if circumstances make the aforementioned steps too difficult. If this is a continuing issue, consider ways to streamline some processes.
    • Another option might be to allocate some of your budget to a vacation fund – that the employees may ONLY use for vacation.

How to Encourage and Manage Team Vacation Requests

Encourage your team to take vacation time and make it easy for them to plan around work
image via Pixabay

Vacation policies are usually quite clear on the “what” of the vacation, such as each employee earns one day of vacation a month for the first year, or each employee starts with two weeks of vacation. Often the policy defines the use by an anniversary, fiscal, or calendar year and other details like additional weeks at 5/10/15 years.

However, the application of the “how” of vacations may not be clearly stated in the policy. Many leaders manage team vacation requests by seniority or on a first come/first serve basis. This can be effective, but it may also lead to some tough choices.

To ensure continuity, often departments in an organization have specific times of the month or year where no vacations can be scheduled. For example, retail typically has a no vacation policy for Black Friday. Accounting departments may not allow vacation before the month is closed or at the time of inventory.

It’s important for morale that team members perceive the “how” of vacation use as fair. I found it best to be clear when you outline blackout vacation days. Lay out the schedule at the beginning of the year and allow first come/first serve requests. In my experience, we generally had a policy that two people couldn’t be out at the same time in our small organization. If there was a conflict between vacation requests, it could generally be resolved with a diplomatic conversation.

Alleviating the anxiety around employee vacations requires planning. Once the team member is assured the company has their back with cross-training, policies, and procedures, they should still prepare the team for their absence. Encouraging vacation planning best practices reinforces the message of leadership’s commitment to and the sanctity of vacation time.

Encourage your team to use these vacation planning guidelines:

    • If possible, plan the first day back as a half day to reboot mentally and physically.
    • Review the policies and procedures of the position to ensure that you’re up to date and perform a dry run with the back-up team member.
    • Make the boss or a delegated team member aware of open work and the status of all projects.
    • While no one can predict every concern that comes up, you should share any anticipated hiccups or challenges that might occur during your absence.
    • Clear up as many urgent tasks as possible. Often, the time leading up to a vacation can be very productive, so take advantage and leave the desk clear.
    • Set expectations for action in your emails and voicemail. I would recommend setting the away message to direct correspondence to your backup person. Keep the message brief with just a simple return date.
    • Follow-up with the boss, team members, clients and others at a one week and then three-day timeframe reminding them of the vacation. Offer management an opportunity to resolve any anticipated issues before departure.
    • Only let family or close friends know your whereabouts. There is no need to let the office know where you’re headed.
    • Truly unplug and avoid taking a phone (or at least answering it) on every expedition and excursion within your trip.

These practices encourage employees to really unplug and take a break from the busyness of their position. While it can be tough for some workers to leave the role, ensure them that the office will be just fine without them there for a few days. Focus on the importance of their refreshed return, where they’ll be able to offer a renewed perspective.

This also means, that as a manager, you need to adhere to your vacation policies. Use the opportunity to identify gaps in your cross training and delegation traps. Even when it would be easier to pick up the phone and call a team member on vacation, refrain. Troubleshoot the answer on your own and reinforce your company’s philosophy on vacation time.

Changing your mindset to one that understands and appreciates the benefits of vacation will help you think more creatively and support the full use of vacations for yourself and your team. By encouraging and learning how to effectively manage team vacation requests, you’ll promote a healthy, happy and productive work environment.

Vacations should be a regular (not a once every five years) occurrence. Best wishes that you also get to schedule some time away as you reinforce your company’s new vacation policy.

Featured image via Pixabay. All images licensed for use via Pixabay licensing.

Wondering how to unplug from work? Entrepreneurs, business owners and CEOs often have the toughest time getting a break. What’s keeping you from unplugging?

As the CEO, your job is to lead with vision and build a business that is both scalable and sustainable. If you did your job well, you hired the right people, set the priorities, and gave your team the resources they need to manage the day-to-day operations.

So, why is it so tough to unplug from work? Why do you feel your business can’t survive without you while you take a vacation? Are you afraid to see what your team will do without you there to lead them? If that is the case, you have bigger problems than taking a vacation!

Why We Can’t Unplug from Work

Today’s office culture glorifies busyness. We venerate the person who epitomizes the 60-hour-a-week “Protestant work ethic.” Yet many of us spend countless dollars on the work smarter/not harder program of the month. Add to this the proven addictive nature of technology and it’s no wonder we can’t unplug from work. The truth is, many of us are burning ourselves out and it’s time to STOP!

In the movie Top Gun, Stinger tells Maverick, “your ego is writing checks that your body can’t cash.” Is this not a perfect quote for the CEO who can’t unplug from work and runs themselves into the ground? How often have you gone on vacation (finally) and just as you are starting to relax, you get sick?

Taking time to fully unplug from work and take a vacation makes for a happier and healthier team and CEO
image via Pixabay

Your body and mind NEED recovery time. In his book Mentally Tough, James Loehr speaks repeatedly of the need for recovery after the expenditure of energy (whether mental or physical). Using a checkbook analogy, he refers to the use of energy (writing the checks) and the need to replenish (making deposits) and just like your checkbook, if you don’t make the deposits, you will go bankrupt. Whether high performing athletes or entrepreneurs, the rest and recovery cycle is critical to performance.

I proved this concept to myself when I was in public accounting and working 60 to 90 hours a week during the busy season, bankrupting my reserves. Without fail, when tax season ended every May, I would be out of commission for over a week recovering. Let’s be clear, even if you have a passion for what you are doing – as I did – it’s still energy expenditure and still requires recovery. Make vacation part of that recovery time by turning off stress systems and allowing for recuperation and repair.

Our culture dismisses the importance of vacation as shown by these Nielson Consumer Research Statistics:

  • 52% of people didn’t take all their paid vacation in the last year, leaving an average of 7.2 days unused.
  • 23% of people didn’t take a vacation in the past 12 months.

And yet:

  • 74% believe vacation to be important to their life.
  • 78% who take a vacation (at least 1 per year) are happier and more satisfied.
  • 71% were more satisfied at work when they regularly took a vacation.
  • And 86% of those who took a vacation once a year had stronger family bonds.

The Benefits of Taking a Vacation from Work

While entrepreneurship is a 24/7 job, remember that even the President of the United States takes vacations. Research and anecdotal evidence show that we are at our best when we are well-rested.

When was the last time you had a great idea while in the midst of the busyness of your day? Isn’t an “a-ha moment” more likely to pop into your head when you relax during a nature hike or a warm shower? Vacations allow you to clear your head of the minutia and make room for more creative and strategic thinking. Unplugging from work also helps you rejuvenate and improves your effectiveness when you return to the office. In addition, by stepping away from the helm, you empower your team. The company will get stronger with different thinking, new ideas and an occasional change in decision making.

Take a vacation and trust that your team is smoothly running the show back at the office
image via Pixabay

There are many additional benefits in the workplace that embraces regular vacations, including:

  • A happier team – Vacations reduce tension and stress, promulgating a better mood and higher life satisfaction. The results include a calmer, more energized and happier team.
  • A healthier team – De-stressing gives our bodies time to recuperate. A vacation promotes rest and helps people feel healthier.
  • A more productive team – Research shows that vacations support lowered job stress burnout and absenteeism. Breaks promote the feeling that less effort is required to perform the job.

Keep in mind, the benefits only come when you truly unplug from work. The same payoffs don’t emerge from “working vacations.” In fact, work that masquerades as a vacation may even result in higher negativity and greater levels of disengagement at work.

How CEOs Can Plan for a Successful Vacation

As the saying goes, “We travel not to escape life, but for life not to escape us.” While a vacation doesn’t necessarily mean an exotic locale, there’s a lot to be said for getting far enough away to avoid the internet (or keeping yourself engaged enough to ignore it).

A certain amount of planning goes into a restful vacation. The first step is deciding who you are as a vacationer and what type of vacation really recharges your batteries. Are you a tour Europe kind of person or a go fishing and enjoy the outdoors type?

Once you’ve settled on your preferred type, then get out the map and start to plan the ideal place to go. Since anticipation improves the benefits of vacation, make sure the time is on your calendar and is held sacrosanct.

Of course, the rest of the logistics of your trip are up to you. If you prefer, employ a vacation specialist like I do to make the experience truly stress-free. My idea of a vacation, when not enjoying the wilderness, is “tell me where and when to show up, give me an informed tour guide, and I will relax.” Or, if you so desire, take the vacation planning responsibility on yourself. The rule is whatever you do—make it as un-stressful as possible.

How to Prepare the Office for Your Absence

Meet with your team before your vacation to make sure everyone is on the same page
image via Pixabay

Of course, you’ll relax a little easier knowing that your team has the tools they need to carry on in your absence. Here are a few steps you can take to ensure your bases are covered before you hand over the office keys and head for the airport.

    • Give Yourself More Time: Start by extending the vacation on your calendar by at least one day at home and one day at work, if possible. Keep your vacation response turned on in your email. This will give you breathing room to unpack and manage your home duties before heading back to the office. The extra day at the office will give you a chance to reboot and shift into work mode before being inundated with what you missed. After a recent weeklong trip to Phoenix, I took a day to reset mentally for the cold weather and to get a handle on emails and other follow-ups from my time out of town.
    • Designate a Surrogate: Update whomever you choose as your surrogate with information on the status of projects and any questions or issues that you anticipate. Assign someone to review your mail and dispatch it to an appropriate team member. When you return, be sure to appreciate and not criticize the role they took or decisions they made while you were out.
    • Delegate: Delegation is the key to freeing up your time. Clear up and/or delegate as many urgent items off your to-do list as you can. Often, the time leading up to a vacation can be very productive. Get it done, hand it off, and leave your desk clear.
    • Leave Clear Instructions: Set expectations for action in your email away message and voicemail; a brief statement of limited access until your return date and who and how to contact if the issue is urgent will suffice. In today’s world, there is no need for anyone to know too many details. I would also suggest that the out of office email only directs to those in your contact list.
    • Give a Reminder: Follow-up with team members, clients, and others at one week and then three days prior to your absence to remind them you will be out of the office and unreachable. Offer an opportunity to resolve any urgent issues before your departure.
    • Don’t Make Yourself Available: If you can, only let family or close friends know your whereabouts. Avoid taking your phone (or at least answering it) on every expedition within your trip. Very few things are so urgent that they can’t be dealt with later. Remind yourself that you aren’t as indispensable as you think. Besides, most true emergencies can’t be handled from hundreds of miles away, anyway. Let go and trust your team.

“It’s important for those in leadership positions to model good vacation-taking behavior. If you never take one, or you’re always working when you do, your team will feel that’s what is expected of them too, regardless of what you say or your company policies. If your company talks the talk regarding vacation, leaders need to walk the walk,” says Tanya Murphy of Cruise Planners.

As a CEO, learning how to unplug from work will help you feel refreshed and recharged. Better yet, you’ll set the bar and lead with example. By modeling good vacation behavior, you’re showing your team that you’re sincere about the importance of vacations. Your team knows that you trust them enough to leave work in their hands. You can rest assured that your systems are working and you’ll return from your vacation a better leader who is well-rested, happy, and healthy.

Featured image via Pixabay. All images licensed for use via Pixabay licensing.


Dear CFO,
My company is embarking on its first ever strategic analysis and planning session and I’ve been asked to help the team start with a “SWOT analysis.” I am not sure how to do a SWOT analysis or where to begin.
Needing a first step in Amarillo

A first-time strategic analysis and planning process can be intimidating. It’s hard to start with a blank sheet of paper to stimulate meaningful outcomes. But, as with many business planning processes, there are tricks of the trade to help you get off to a productive start. One of the best strategic analysis tools is a SWOT analysis.

As you probably know, SWOT stands for Strength, Weaknesses, Opportunities, and Threats. Learning how to do a SWOT analysis isn’t challenging, but this simple guide is a powerful tool for visioning and strategic planning. Engaging multi-functional teams in defining the various elements of a SWOT analysis eliminates the risk of getting too focused on the perspective of a single person (the boss). Enlisting the help of your full team provides a more well-rounded view including the issues faced in the day-to-day operations of the company.

How to Do a SWOT Analysis from Scratch

To get started with the SWOT analysis, there are several approaches. Often, a company will start by performing a SWOT analysis on a competitor as a frame of reference and to get thoughts flowing. It’s usually easier to identify the weaknesses and challenges of your competitors and often they will be congruent to your own company’s challenges.

SWOT analysis is a team effort - everyone should be involved to help target all aspects of the business
via Pxhere

Similarly, as you’re planning how to do a SWOT analysis, consider internal framing of your perspective for strengths and weaknesses and using an outside perspective when thinking of opportunities and threats. Remember that the SWOT analysis paints the picture of where you are today. Using the strategic analysis and plan, you will then decide how to better move toward your goals and company targets. Directly address opportunities and threats within the strategic plan as it is developed. Then plan for the future by strategically pursuing opportunities that fit your goals and troubleshoot relevant threats.

Your Company culture determines the best method to develop the SWOT, whether you use four quadrants on a whiteboard, mind mapping, specific software, or flip charts. The SWOT development method isn’t as important as the content that comes from the activity. However, I recommend no matter what method you take to develop your SWOT, you approach it as a group activity, as the outcome will be more complete and you’ll create a more accurate assessment. Document the SWOT analysis both for reference and for comparison as you move forward with strategic planning.

Using Questions to Develop Your SWOT Analysis

As you’re deciding how to do a SWOT analysis, it’s helpful to develop a set of questions to guide you through each quadrant. You’ll find a set of SWOT template questions below to help as you go through the SWOT analysis exercise.

Notice that in posing the questions, they are often the mirror image of another element of the SWOT analysis. So, don’t be too concerned if a question is in the “wrong” category for your company. A question of Opportunity can be evaluated in the context of a Strength or a Threat, and a Threat may expose a Weakness or convert to an Opportunity. Each quadrant is related and intertwined.

As you might guess, these SWOT template questions aren’t comprehensive. You may wish to amend them to align with issues unique to your own business. As you decide on which questions apply, think in terms of your products, employees, customers, competitors, economy, and more specific questions will come to mind.

SWOT Template: Strengths

The first step in your SWOT analysis is identifying the strengths
via Pxhere

Examine your company’s strengths, both internally and externally. Consider your company against your own benchmarks and the market competition.

    • Does your company’s value proposition compete favorably in the market?
    • What distinguishes your product from that of the competition?
    • Are your systems up-to-date with timely and accurate information for decision-making?
    • Are your distribution channels loyal and functioning well?
    • Does your product reflect an experience for Millennial buyers?
    • Do you have a clear pipeline of new products or services?
    • Are you the market leader in any emerging markets (ex. serving the cannabis market)?
    • Do you provide a highly specialized product?
    • Do you hold patents over other intellectual property?
    • Can you get the job done faster or cheaper than a competitor?
    • Is your customer experience better because frontline employees love their jobs?
    • Can your business grow with your existing infrastructure?
    • Are there high barriers to entry in your business?


SWOT Template: Weaknesses

Identifying weaknesses during a SWOT analysis helps you better prepare for improvement
via Pxhere

Don’t be myopic when analyzing weaknesses. Take a clear step back and examine your competitors’ strengths. Look at others within your industry to expose your own challenges.

    • Do you know why your company loses sales?
    • How strong is your brand within the market?
    • How are your lead times compared to the lead times of your competitors?
    • Are your employees provided market pay, benefits, and other perks they value?
    • What complaints do you hear from customers, distributors, or employees? Do you address the concerns and what are they telling you?
    • Do your products represent a substantial enough compensation for your distributors or are you too small a fish in too big a pond?
    • Do you have a high employee turnover?
    • Do you have adequate policies and procedures to assure tribal knowledge stays within the company?
    • Do you have a clear method for facilitating the training and evaluation of employees? Do you have adequate cross-training and bench strength?
    • Do you know your product development and life cycle, especially compared to your competitors?
    • Does your company culture support changes, if they are needed?


SWOT Template: Opportunities

As a team, identify the opportunities your business has to grow and improve during the SWOT analysis
via Pxhere

As with strengths and weaknesses, opportunities exposed are considered in the context of the strategic plan (long-term and short-term).

    • Are new markets opening up that your product can address (solar energy, hydroponics, virtual reality, etc.)?
    • Have you created technology that positions your product ahead of the competition?
    • Can you accelerate your development cycle?
    • Can you capitalize on alternate marketing channels (social media, strategic alliances etc.)?
    • Can you tweak your product to meet an alternate demographic need?
    • Have you scoured your intellectual property to find new applications?
    • Can you fill a hole in your product line, distribution channel or geographic reach with an acquisition?
    • How will your customer base change over the next 3 to 5 years? Taylor Swift changed to keep her customer base, will you adapt to the new to keep yours?


SWOT Template: Threats

During the SWOT analysis, threats are the last to be identified but they're some of the most important factors
via Pxhere

Don’t forget that unaddressed weaknesses can turn into threats. Think broadly – competitors, general economy, regulations, tariffs, global reach, and product evolution.

    • Is someone eating away at your market share?
    • Are you the high cost/high service producer in a market that is moving toward price competition?
    • Are substitute products entering the market (such as what was seen in the craft brewing industry)?
    • Are you limited to servicing a specific geography (such as in the case of a franchise)?
    • Do you lead or lag in a changing economy and how does that bode for you today?
    • Did you anticipate growth and spend yourself into financial difficulty?
    • Have you addressed eroding market share?
    • Is your industry changing (such as: production moving overseas, alternate products, consolidating for economies of scale, etc.)?
    • Have you evaluated your competition in all of your markets?
    • Are competitors capitalizing on new marketing and distribution channels?
    • Are there regulations or tariffs on the horizon that could negatively affect your business or that of your customer base?
    • Are you dependent on a customer or market facing disruption?
    • Are regulations increasing overhead and threatening profitability (community banks)?
    • Are competitors entering new geographies, consolidating vertical markets or making other changes?

For each section of your SWOT analysis, rank the top five Strengths, Weaknesses, Opportunities, and Threats you’ve identified during your brainstorming session. The criteria for ranking should be the highest value at this point in time (rather than anticipated threats in the future, or past weaknesses now being addressed).

Once you’ve ranked each quadrant of your SWOT analysis, determine how to capitalize on Strengths and Opportunities. How will you move forward productively to make gains? Then address Weaknesses and Threats as you build the strategic plan. Go slow and deliberately address each item. There is no need aim for completion of every item in your plan this year. You may wish to view your plan as 1, 3 and 5-year benchmarks. In the end, the company proceeds with the elements of the SWOT analysis within the context of the vision, mission, and strategic plan.

The SWOT analysis is a great business exercise to highlight areas of importance and keep them on the radar for planning. It’s a simple tool, but one that will really paint the full picture for you and your company. Best of luck on your SWOT analysis! I’m sure it will give you a 360-degree view of where your business is headed.

Featured image via Pxhere. All images licensed for use via Pxhere licensing.

Looking for the best advice for entrepreneurs who want to succeed? There’s a lot of “noise” telling you what to do. Here’s how to build your business foundation and apply best practices.

Entrepreneurs, we’ve all heard it, haven’t we? When you talk about a stressful situation at work and someone says, “Gee I really wish I could run my own business,” or “I wish I was my own boss.”

Entrepreneurs know it’s not always fun and games. In fact, little does your pal know the 24/7 work and dedication it takes to make your business succeed. If you’re like me, you probably think, “Be careful what you wish for, buddy.”

As an entrepreneur, there’s no simple formula for success, no clear-cut path, or secret. The best advice for entrepreneurs is to learn how to tune out the noise and focus on the day-to-day progress that moves your business forward.

Does the Best Advice for Entrepreneurs Come from Books?

The best advice from entrepreneurs comes from many places; books, mistakes, and more
Image via Burst

Like many self-made business owners, you’ve probably read all the books you can find on leadership and running a business. They make it seem easy, don’t they? “Here are the 7 (or 10, or 13) steps to success,” or “get the right people on the bus in the right seats, going the right direction.” “Simplify your systems, hold people accountable and your business will thrive!” Right?

There’s a lot of books out there that claim to have the best advice for entrepreneurs—the secret formula to success. Many of these books have helpful advice and good takeaways, but it’s often nebulous or incongruent with your reality. How do these great books relate to the day-to-day of the small business? You may browse the business section at the library and wonder, have any of these authors really run a small business? How would Jack Welch or any of the others really know what it’s really like to be a bootstrap entrepreneur? 

The reality is, being an entrepreneur (especially a female entrepreneur) is tough! It requires you to think on your feet, adapt, and roll with the punches. Entrepreneurship isn’t for the faint of heart.

In my small business, I oversaw a staff of 10. This, of course, meant when one person was out, 10% of my workforce was absent. Because each person had multiple roles, as is common in a small business, one absence meant that several “departments” were missing as well. I found myself often wondering, when does a large corporation like GE have that problem? (Answer—never!)

While business experts like Jack Welch, Napoleon Hill. and Stephen Covey espouse the best advice for entrepreneurs and great management concepts, they’re often hard to sync up with the real-world challenges faced by small business owners. After all, it’s hard to imagine implementing everyone’s appropriately colored parachute, when your biggest customer now sources from overseas, one of your machines started a fire, and your controller just quit. At that point, ANY parachute will do (or perhaps a life raft). Okay, so maybe you won’t face all those challenges at once, but even one event can make you wonder how the concepts in these books apply.

As my dad would often say, “When you are up to your behind in alligators, it’s hard to remember that the original mission was to drain the swamp.”

Small Businesses Run Lean but Some Advice Still Applies

Setting smart, attainable goals is some of the best advice for new entrepreneurs
Image via Burst

Looking around your business, you may see you have an almost non-existent management team. You may fit the mold of the “E-myth;” you started a company because you were good at a certain task. Now you have to wear so many other hats and be good at so many other tasks to keep the business afloat… Or, do you? All the books, articles, and TED talks with the best advice for entrepreneurs say don’t try to shoulder it all alone. But that advice is easier said than done, especially when you ARE your business. So, why read the books and seek principles to do better? Is it even possible to do better?

Personally, I think it is. There are important principles that can still be gleaned from these books, even if it doesn’t seem perfectly congruent to your business model. I‘ve read more success books than I can count. Everything from Stephen Covey’s 7 Habits of Highly Effective People to the 13 principles in Napoleon Hill’s Think and Grow Rich, to my current reading of John Maxwell’s The 15 Invaluable Laws of Growth.

Reading and understanding the concepts within those books may not help find a new right-hand person or file and insurance claim, but the concepts withstand the test of time. They really do contain the tried and true best advice for entrepreneurs, business owners, and leaders. In fact, I’ve found that many of these books repackage the same concepts, because they’re so mandatory for success. Napoleon Hill started writing about best practices 100 years ago and many of his principles are used in more modern works. The essential truths don’t change.

Running a small business is HARD. But there are many lessons along the way. Think of the advice you’d give your teenager: learn from your mistakes. You can do the same and learn from others who have gleaned their own experiential wisdom.

Having read too many books to count, (spoiler alert), the majority contain universal truths. Across the board, they all encourage you to:

  • Identify your core values and those of your business. Are you honest, loyal, trustworthy? What do you want to represent? What do you want your company to represent?
  • Define your role and purpose in the market. Do you want to be business that’s the fastest, cheapest, or highest quality? Do you want to serve your customer base better than any competitor does?  
  • Set aside time to identify and plan for:
    • Your long-term vision (3 to 5 years). Do you want to be the market leader or low cost producer? Do you want to change your level of customer dependence, so that no single customer comprises more than 10% of your sales? Do you want to reduce your company’s supplier dependence? Is there anyone that you think would add value to your team that you want to start a dialogue with? Where is your industry going and are you prepared to lead or follow?
    • And, short-term goals (<1 year). How much does your business want/need to sell? Will your staffing support the level of sales and do you have the cash flow to pay the staff, and cover operations, inventory, etc.? What are your contingency plans, should an emergency arise? What are your areas of risk? 
  • Use a defined process to set targets and goals, define specific actions toward their achievement, and hold people accountable within the process.
  • Select a form of project management that fits your team.
  • Recognize that any business plan you develop needs to add competitive differentiation.
  • Motivate and encourage your team. Team members must be aligned to achieve the goals.
  • Realize that your leadership defines the success or failure of your business.

Often, authors offer an abundance of advice on what you should or shouldn’t be doing, and not as much advice on the logistics of “how” to get achieve it. There are two books I’ve found that incorporate the “how” very well and offer some of the best advice for entrepreneurs. The current go to book is Traction: Get a Grip on Your Business by Gino Wickman, explaining the EOS© system. While many reviews talk about the usefulness of this book in the context of start-ups, I believe this a great tool for any small business. Another older resource is Mastering the Rockefeller Habits by Verne Harnish. Harnish does a good job of explaining how to simplify processes and accomplish each business objective based on the practices and teachings of John D. Rockefeller.

How Do You Apply the Advice to Your Own Business?

Fortunately, there are many excellent books out there and we can all find value from various resources that apply to our business.

While the two I mentioned above have some great core advice and offer a “how-to” approach, the real secret is to pick and apply what works best for your business specifically. The basic principles outlined in most best-selling business books hold up over time. A key element in transitioning from the entrepreneur with too many hats to a competent leader is applying the skills preached in the books.

Many entrepreneurs have a plan for this business in their head, but it's getting it into a comprehensive attainable plan that's a struggle
Image via Burst

Many business owners believe they have a plan for success, but when it’s in their head, it’s hard to develop a competent management team with a cohesive mission and strategy to take the plan to fruition. If you want to achieve your plan for success, simply choose a method that’s clear, uncomplicated, and inspires you to lead your team to complete action items, taking you closer to your goals. And, as Nike says, “just do it”.

It is your responsibility to work ON your business, work with your team to establish clear, achievable (SMART) goals, set timeframes, and hold team members accountable.

So, if you’re ready to go, start now. TODAY, get your calendar out and schedule time for yourself (1- 2 days) offsite to really think about your business. This will help you get your vision sketched out and in order. Once you’re clear on your vision, share it with your team. Enlist their help on the process and path to success.

Work out the logistics of “how” by scheduling an offsite strategic planning session where you:

  • Set (in the initial) goal and then review your company’s 3-5 year goals.
  • Decide 1-3 annual company objectives (1-3 is a guideline for small organizations).
  • Establish 5-7 steps to achieve the objectives.
  • Determine the cross-functional teams.
  • Set timelines and a process for reporting.

As you work ON your business, apply the advice and best practices you’ve discovered to identify and address roadblocks as well. Does your company culture allow for all team members to speak honestly and openly about their concerns? Don’t forget that part of the strategic planning process includes identifying areas of concern so that over time you can mitigate risks and bolster strengths. Long-term planning lets you anticipate future hiring needs. When you work with vision, you can look ahead and set strategic actions, like networking and “getting to know” a targeted hire.

Again, like books with the best advice for entrepreneurs, the concepts often sound simple:

  • Priorities defined to allow focus, progress, and management.
  • Data available to manage the Company (firsthand and immediate).
  • Rhythm to maintain alignment and drive accountability.
  • Systems and structures in place to handle complexity.

The challenge is often not finding great advice or the best business practices, but in reining yourself in.

If you are like most entrepreneurs, you will bite off more than you can chew. I would like to encourage you to be conservative (ok, maybe a bit of a stretch) in this first round of strategic planning. This ensures you can achieve your goals and celebrate the success along the way. As you apply the advice, slowly and deliberately, you will see positive change. You’ll be leading and managing not by the seat of your pants, but with intention and inspiration.

Finding success as an entrepreneur means being open to learning more every day. It’s not about finding and applying the very best methodology, goals, and team. Simply pick something and get started. Keep your plan and objectives on the top of your mind. Schedule regular reporting as part of the process to ensure follow-through. Your life will get easier and you’ll find a better balance as you set expectations and manage the business against a set of goals and with accountable team members.

The best advice for entrepreneurs is to keep learning. Whether it’s from the words of wisdom written by business leaders or from your own mistakes. Growth-mindedness will keep you moving forward on the path to success.

Featured image via Burst. All images licensed via Burst licensing.

Finding and implementing an ERP system is a big job! Here’s what you need to know to get through the ERP system selection and implementation process.

Dear CFO,
Our company is looking for a new ERP system. My CEO just informed me that I am leading our ERP system selection process as well as participating in the implementation team once we find the right fit. I’ve purchased accounting software in the past but selecting an ERP system seems like a BIG job. Can you give me some tips to help in the process?
ERP System Searching in Idaho

First, let me congratulate you. Obviously, your CEO believes that you are capable of leading the team through the ERP (Enterprise Resource Planning) system selection. You’re right—ERP system selection and implementation is a big and important task. You’ll need to do plenty of homework to select the best system for your company.

Before you begin, there’s one matter to get out of the way: you need the authority to accomplish the objective. So, the first order of business is to make sure the CEO puts the proper priority on the ERP system selection project and participants (in person or via other communication) in the project management and implementation process. If those who are not direct reports miss deadlines during the selection and implementation process, the CEO must validate your authority. The CEO is also responsible for fixing any business issues that exist from lack of discipline to cash flow issues. Frequently the financial department is responsible for taking the lead in ERP system selection, because the system dovetails into the company performance, and enables the reporting management desires.

Before Starting ERP System Selection

There are a few steps you should take before you begin the ERP system selection. These steps will ensure that you know exactly what you’re looking for once you begin your search.

Coordinate communication with your CEO.
Take steps to ensure you’re consistent in your communication cycle on the new ERP system–setting expectations and keeping appropriate team members in the loop. Be prepared to continue with status updates, both formal and informal throughout the ERP system selection and implementation process.

Obtain or create the current workflows for all company operations affected by the new ERP system.

  • If fancy flowcharts exist, use them. If not, a quick and dirty flow chart draft will suffice – it’s highly likely the processes will change with a new system anyway.
  • Documentation should include the details of who, what and where for each step and identify the data collected. Be sure to distinguish what processes are automated today and which ones are manual; that will assist in defining staff needs and systems required to close gaps.
  • The information included in the workflows will guide the system evaluation, including needed changes and system improvements.

Engage the ERP system selection participants.
These team members are usually selected by the CEO and/or department heads in the project planning process; this includes subject matter experts (SMEs) from each area affected by the proposed new ERP system.


Researching and Finding the Right ERP System

When selecting a new system, create a list of needed features to help narrow down what kind of system you need
Image via Pixabay

During the research phase, you’ll be setting up metrics, checks, and balances, so you’re sure to be successful in your ERP system selection. This phase of the process is as much about finding the “best” software as finding the RIGHT software for your company.

Needs / Wants / Nice-to-Haves

Define the needs, wants, and nice-to-haves for each area or department. This is a critical step and worth the time. You will want to make sure that, at the minimum, the software meets the absolute needs of each area of the business. The workflows are a good resource for setting the baseline, but think broadly – you are looking for a new ERP system to improve your business. It’s important to find a system robust enough to carry your company forward. Separate out the needs, wants and nice-to-haves:

  • Needs – Elements critical to performing the operations of the business, eliminating significant pain points, or meeting government or internal reporting requirements. Your business will probably have unique needs that may not be available features in off-the-shelf software.
  • Wants – Elements that improve processes or facilitate reporting but aren’t critical to the regular operations of the business.
  • Nice-to-haves – Items that, if the cost/benefit makes sense, could improve some aspects of processing or reporting.

Score System Features

Set up the needs definition as a scorecard to evaluate each need/want/nice-to-have against the various ERP software features. Be sure to weight the scorecard based on the needs; are all the needs of the same value? Is the end-of-day balancing of the same importance as regulatory compliance or daily reporting? If so, they get the same weight but you may find that the needs have several levels of importance within them.

Data Transfer

Decide how much historical data will transfer to the new system. Frequently, data from older systems isn’t as easily transferable. Companies may decide to keep old systems running for a period of time to provide reference or historical information. A corollary of this is setting a timeline and selecting the expected date of transition to the new system.

Data Clean-up

Begin cleansing your data. For any data exported from your old system, this is the time to clean it up. Start tidying up your data for consistency (addresses, naming conventions) and completeness (adding email addresses, phone number, or other missing data). Once the new ERP system is selected, the data available from the old system is mapped to the new system fields and this may highlight additional data element needs.

Demo Testing

Develop “use case” scenarios to test the demos and evaluate how well the software meets your needs. These should be the exact processes that you use in the business on a regular basis. Provide real data (changing names or identifying information). Some vendors will upload your data to the new ERP system so you can test it in a “sandbox” format.

Enlist Subject Matter Experts (SMEs)

Subject matter experts can help determine what kind of system you need to work across all levels of your business
Image via Pixabay

Engage the SMEs within your company to set up a preliminary project plan and timeline.  You may wish to use a project management tool or simply list the plan in Excel for the initial run.

  • Brainstorm every task required for ERP System implementation – this should be as detailed as possible.
  • Identify the SME for every task.
  • Put the task list in a sequential order.
  • If the details or steps are significant, consider breaking each into sub-projects. There might be sub-projects for every segment of the business. For example, manufacturing’s project might include renaming the inventory item master, updating bills of materials, integrating machine software, training staff, designing reports and dashboards.

Build Excitement

Start to build excitement for the new system amongst your staff and team. The people factor is critical to the successful ERP system implementation. Keeping your team members engaged, informed, and encouraged is important in the long process of ERP system selection and implementation.


The ERP System Selection Process

Once you’ve identified your needs and done your homework, it’s time for the official ERP system selection. This is a big step as you weigh all the factors—cost, capacity, user-friendliness, and more.

Narrow Down the Field

  • Identify industry software within your budget, if available. Recent hires into the departments may able to shed light on other systems they used at previous companies and how well the systems performed. Identify industry association or other comparisons of potential software. For example, the AICPA offers an annual review comparing tax software. Keep in mind, most of the reviews only cover the most generic functions of the software. Also, long-standing industry software may still be operating on “old technology” behind a modern-looking interface. I don’t view this as a deal breaker unless the reporting is too old school.
  • Choose the finalists. Once you have identified several software options, try to quickly narrow down the choices to five (or fewer) and only delve deeply into those finalists.

Focus on Usability Specific to YOUR Business

  • Be sure to look at the reporting tools. How flexible are the reports? Are there third-party report add-ons that integrate with the system? Will you be able to generate the reports that management requests (and is it efficient to do so)? For example, behind the scenes, Great Plains Dynamics was 20+ years old, but they updated the reporting to make it very adaptable and user-friendly. Be sure to understand the skill sets required to build reports. Do those skills exist amongst your team or are the requirements new?
  • Make sure the data collection in the system is complete for your needs. For example, if you’re required to file governmental reports on minority contractors your company uses and there’s no data field to identify the minority contractor, you will need a workaround.
  • Provide your “use case” scenarios to the vendor and request a demo version of the software to test. Test under the Pareto principle: meet the exact needs of 80% of your transactions, don’t try to identify and make the ERP system selection based on the outliers. With larger ERP systems, the vendors will typically be more accommodating than vendors of smaller cloud-based software. Don’t believe a task can be done by the software system unless you see it for yourself. If a vendor claims it can be done always say, “show me!”
  • Prioritize when you select software. When using the Pareto principle, measure by several facets: first by cost, then importance. Make sure the most expensive processes are covered by the ERP system, while simultaneously ensuring the most important processes are covered as well (whether they are regulatory or business-driven).
  • Identify how long the software provider has been in business, how many users the company has, and request their upgrade release schedules. If you are under regulations such as HIPAA or GDPR, verify that the software is compliant. Identify the size of the development team that created the ERP system you’re potentially buying. If it was engineered by a small team, you may need to ask about retention packages for key individuals.

Enlist SMEs for More In-Depth Systems Research

  • Obtain three current users for each ERP system you’re exploring and contact them for insights and references. Be sure to have your SMEs talk to users in all areas of the company. If possible, an in-person visit and demonstration is even better. You will be able to see the software in action.
  • Ask about all aspects of the software and user experience. In addition to the use case scenarios, vendor history, and user satisfaction, ask about:
    • User security levels (set-up, access within functions, etc.). Larger systems can offer security on the field level whereas smaller systems may secure access at the module or transaction level.
    • Customer support and maintenance. What is included if you buy a customer support program? How much support is available in the initial learning phase?
    • Set-up process and requirements. In my opinion, this is one of the most important points. The set-up is critical to the successful implementation of a new ERP system. Whoever guides you through the set-up process needs to be intimately familiar with the effects of any choice made in the set-up. Bad set-up creates long-lasting pain. Examples might include: thinking serial number control might be good and then finding out that every single transaction needs the serial number to move it through the system, causing added workload; deciding to treat an item as non-inventory without recognizing that limits the ability to track it; or a simple misidentification of the type of account resulting reporting errors.
    • Release schedule and what might be coming out during your implementation period.
  • Determine the need for all modules of the software based on the interviews with references and your team’s evaluation. This is also the time to decide on the ERP system implementation process: phased or “flip the switch.”

Select Your Finalists

Narrow down your choices. If only one software meets your needs and falls within your budget, you can skip this step. However, if you have 2 or 3 finalists that meet your needs and price seems to be the deciding factor, set up an analysis to compare total costs over a 3 to 5-year period. Consider the following:

  • Maintenance coverage may be included in the first-year implementation plan of some options, but not others.
  • Necessary hardware upgrades to satisfy system requirements; be sure to include software expense for all regions. Typically, software users have to buy a production region, test region, and perhaps others based on the size of your organization.
  • The need for any add-on products such as reporting tools to fulfill the needs analysis.
  • Ongoing annual maintenance costs, user fees, per seat costs, or historical price increases.
  • Consulting or other out-of-pocket implementation costs.


Planning for ERP System Implementation

Creating a visual workflow for your system transition makes it easier to plan the next steps
Image via Pixabay

Once you’ve settled on an ERP system selection, you’re ready to begin implementation. A little foresight and planning will help you avoid any issues as you move forward.

Create a Workflow

As you work on creating or restructuring the workflow for the new ERP system consider:

  • Entering data at the point where you create data.
  • Eliminating multiple touches on the data.
  • Creating exception or control reports to verify processing (for example, cash deposit reports, payroll payments exceeding a certain dollar amount, employee utilization under a certain percent).
  • Eliminating multiple check or approval points (this may involve security levels for managers different from front-end users).
  • Performing comparisons within the system.
  • Optimizing the system capabilities to eliminate redundancy.
  • Standardizing and using file naming conventions and electronic filing capabilities.

Watch Out for Implementation Issues

Be on the lookout for common issues in implementation. Some of these implementation issues include:

  • User security levels are set too tight or too loose. I prefer setting the security levels tight and as the user encounters a roadblock, freeing that capability. This security assures access is available only to the needed parts of the system. Even though some companies prefer more lax security limitation, HIPAA and GDPR considerations should drive set-up and security.
  • Even with thorough evaluation and testing, there will be transactions or reporting that require workarounds. No system meets all the requirements.
  • Team members complain about change, the workload, learning – you name it. This is normal and shouldn’t be discouraging. Continue to communicate the why and the benefits to the company and the user.
  • Something wasn’t set-up right. Many elements of set-up can be changed after implementation, but some are set for life. Hopefully, the problem is correctable. Make sure you know what is administrable and what is not. Have multiple people trained on maintenance during implementation.
  • If you do a data conversion, make sure the team knows how the data migrated, then test the system extensively.

Outline a Transition Plan

Define and outline the transition plan to the new system during project planning (and leave room for adjustments). Transfer of historical data (manual or electronic) is part of the transition to the new ERP system. Some of the detailed information for the implementation may not become available until the software system is purchased. These variables may include transaction volume, staffing, and training. Typically, there are two ways to transition to new software:

  • Concurrent processing for a period – This means the data goes in both systems and the results are compared for agreement prior to fully switching to the new system. Keep in mind, most companies are running lean and concurrent processing puts an undue burden on staff.
  • Cold cutover – This means the use of the new system begins on a specified date. With adequate training and testing, I believe the cold cutover works more efficiently and can save extra work from your staff.

Adopt a clear plan for customer/vendor portals. Opening client or vendor portals involves developing a communication plan as well as a training plan. This will vary from an email to a personal session depending on your customer and vendor base. Most portals are easy to use but don’t neglect the communication of the how and why. Highlight the benefits to their business or organization. This transition to a new ERP System should improve their interactions with your company.

In the most recent ERP system transition that I oversaw, we developed the procedures for each process prior to training. Each person’s training verified the documentation of the procedure and we edited as necessary. Using the procedure outlines and previously processed transactions, we built the historical data using it as training material for the new system.

During the transition to the new ERP system, all team members trained and after each month’s data entry, we ran reports to verify the accuracy and completeness of the processing in the new system. The team was working on real transactions and issues that would arise every day were part of the training. This involved some additional work, but it assured that the training was real world and made for a successful ERP system transition.

ERP system selection and implementation require cross-functional interaction and agreement. When done well, it can be very smooth and will result in real gains from the new system. Good Luck!

Featured image via Pixabay. All images licensed for use via Pixabay licensing.

Considering selecting a new system for your business? Whether it’s a new accounting system, CRM or ERP, here’s how to ensure your upgrade is a move in the right direction.

In the business world, we’re all about systems. Software and programs help us manage all aspects of our office life. But, of course, as time marches on, systems become outdated. If you’re considering an upgrade or update, there’s an art and a science to selecting a new system.

No matter which business system you are trying to replace, your process should always start with exploration. Before you consider selecting a new system, there are some basic questions you need to answer. I may sound like a broken Simon Sinek record, but nearly every business decision you make from acquisition negotiations to systems selection should start with why. Before starting the search for a system, analyze all the reasons why you are seeking to upgrade, replace, or add a new system for your company.

Often, the process of selecting a new system starts with researching on the internet to “find the best investment,” rather than an evaluation of what you are trying to accomplish with the new system. Research-first, ask why later is not a good strategy. You’re setting your company up for extra work, if not a failure.

Without identifying your needs and then evaluating how the new system will potentially meet those needs, you’re susceptible to the sales pitch and biases of the individuals involved in the selection process. Selecting a new system requires self-awareness and analysis—know what’s working and what areas of the business need attention. Be aware that a new system will not solve organizational dysfunction. It can, however, be used as a catalyst for change and improved efficiency you desire. This is why you must start with the big questions before selecting a new system.

Why are you going to invest in the new system?

Selecting a new system for your business operations is a big choice that take a lot of consideration
Image via Pxhere

The question of why is the most important one to ask at the beginning of any new business process. The most common reason for the selection of a new system is to improve the efficiency and the effectiveness of the business in some aspect. That’s a very broad umbrella and unless you define what that looks like in much more detail, the system selection or implementation goals will fall short.

Selecting a new system need not be a big project because, as you know, entrepreneurs tend to be action driven. In an entrepreneurial business, slowing down the action for some deeper thinking makes the entire process easier.

What are the considerations and outcomes expected in changing systems?

Depending on the size of your business, the amount of your day-to-day participation in the actual system change will vary. Depending on your delegation skills and preferences, you may be very involved or fairly hands-off. As CEO, you need to make sure your team has answers to their questions, especially the questions of why and what when selecting a new system and during the implementation process.

Before You Start Researching a New System

Before you start “Googling,” it’s important that you define the need. Are you looking for an accounting system, an HR system, a timekeeping system, or a fully integrated ERP system? Know what solutions you’re seeking and which systems you need to improve before you start your search. If your identified needs change during the process (you started looking for an accounting system, but see the benefits of the ERP), go through the full exercise of exploring why the change once again. You started with an initial rationale and now it’s different — why? Should you still go forward with the change?

Once you’ve explored the why, there are other questions you should explore as you assess your need for a new system:

    • What are our current processes and workflows? How will the new system revise the workflow, and do we have an evaluation and documentation process in place? Do we know the internal costs of our current processes? If not, how can we measure and assess any improvements?
    • Is there discipline and order in the existing processes? Does the right information get in the right place in a timely manner? If not, how will the new system improve discipline? Or, more importantly, how will we need to change our management and expectations to encourage this discipline and ensure success?
    • Are we only trying to eliminate manual processes or are we trying to improve the processes as well? If we “computerize” manual processes, have we missed out on an opportunity for improvement? Should we be following the current processes, altering them for efficiency or even eliminating them all together?
    • How will the selection and implementation impact existing business operations and how will we accommodate the disruption? Can we afford to pay our staff overtime during the new system implementation? What incentives might we consider for staff who puts in extra effort on the system?
    • How will the new system change impact our customers? Will they receive information faster? Will it be more secure? Will there be a lower likelihood of errors? Will our customers even notice the change?
    • If the new system is creating efficiencies, whether in processing or IT, how will we position those efficiencies within the current staff? Will they lose their jobs due to automation, or will they simply move to a different role and take on new tasks? What motivation will current staff have to help with the new system implementation if they could potentially lose their job?

Getting Ready for Selecting a New System

After exploring some of the challenging background questions about your company and the need for the new system, it’s time to start the process of selecting a new system. Once again, taking a deep dive on self and company-assessment on the front end will prevent many issues from cropping up down the road.

Here are some important areas to explore as you get ready for selecting a new system:

    • Have we defined what we need from the new system? What are the needs/wants/nice-to-haves that we will need to evaluate the new system against? Are there software comparisons and assessments online that we can use as an assessment starting point?
    • Do we have the right people defining the system needs of the company, to create a comprehensive view of the new system’s impact? Each department carries biases whether financial, manufacturing, marketing, HR, or another area, and these biases can affect their perception of the need for the new system.
    • As we’re selecting a new system, what is the budget range to meet our objectives? Should we determine a hard budget before beginning our search and selecting our new system, or should we seek information first to decide on a relevant budget range? What do we need to consider if we can’t find a new system within our target budget range? How will we determine Plan B?
    • Do we have the right on-staff talent internally to create a decision matrix and facilitate the review process for selecting a new system? Do we need to look externally for an objective resource?
    • If our company is buying a large system, can we request and schedule an onsite demo? In my experience, most demos now take place online. Not unlike those onsite in the past, every system manufacturer claims that “the system can do it all,” so buyers beware. Demand a demo when possible, especially for a large investment in a new system.

Smoothing the System Selection Process

Once you’ve decided on your internal factors like budget, staff, and workflow, it’s time to start selecting a new system. This process includes shopping around and narrowing down your choices.

Here are the steps for selecting a new system (especially) if you have several options to choose from:

    • Which systems are our industry peers and competitors using? Compare the systems not only of your direct peers but of businesses that are the size you aspire to grow into.
    • Do we need to select a new system that’s industry-specific? Do we need to integrate features for manufacturing operations or timekeeping? Will extra features and integration capacity add value to our new system or just complexity?
    • Are we seeking a fully integrated system or integration of multiple “best in class” options? What is the downline cost of each alternative – more conformance to the system, more manual reporting, or systems integration costs? Do the various best-in-class system options integrate and how complex is the process? If we decide on the best-in-class option when selecting a new system, do we have an IT team that can support the 24×7 nature of the new systems? Is our organization moving toward cloud-based systems or SaaS models? Do you prefer to host information as sensitive as finance and HR data? Do you have the system security protocol in place to protect customer data?
    • What are the reporting tools available in each of the new system options, and how do we expect to use the tools?
    • Can we quickly narrow down the new system selections to 2 or 3 choices and only delve deeply into the finalists?
    • Can we contact current users of the new software options and preferably visit them onsite to see how they actually use it? If not, why not?
    • Is the new system we’re considering the right size (cost and complexity) for our current company? Is it scalable to our growth, and will it support where we plan to be in the next 5 years? Can we use the new system in either its most simple or complex form? Are we buying a more robust system than we need or would ever use?
    • How will we evaluate the total cost involved in selecting a new system and the implementation process? Do we have benchmarks? (For example, multiply the system cost by 2 to estimate the additional cost of consulting.) Be sure to include hardware and software costs. Don’t forget the depreciation expense of the new system in your costing models. Areas that are often missed in the cost assessment are the testing regions needed before implementation of the new system and all the development to integrate the new platform. Whatever you estimate for hours, assume 2x. After selecting a new system, your business will likely change during the changeover and implementation process. Incremental changes will need to be accommodated that were not anticipated at the beginning.
    • What are the ongoing costs of the new system? Are there monthly per-seat costs, annual upgrades, etc., and what options do those costs include? In my experience, if you are comparing two or more systems on cost alone, you should consider a 3 to 5-year horizon. For example, if you have a first-year maintenance plan included on one and not the other, or if you need hardware upgrades or additional reporting tools to accommodate one of the systems, be sure to include those costs when selecting a new system.

Planning for the Implementation of the New System

Once you’ve decided on the best new system for your business, the next step is planning for the implementation. There are several assessment questions to explore that will help you create a smooth implementation.

Here are the questions to ask:

    • How will we switch to the new system–running a concurrent system for a timeframe or a cold cutover? Who will decide and what will the decision be based on? If it is a concurrent switch, there is an additional workload to consider? What kinds of testing and preparation are needed for the system change?
    • Do we need to convert customer and company data from the current system to the new system? Data conversion can be costly and time-consuming. It’s rare that data will convert seamlessly from one system to another.
    • Does your data need to be replicated to a database for reporting? Don’t forget to estimate staff time and efforts required for reporting.
    • Who will decide the staff training plan required on the new system and develop the documentation? How and when will process changes be incorporated into the system documentation and training?
    • What should our customers and vendors know about our change? Will the system change be transparent? Will customer or vendor interaction change? If there are differences, how will customers and clients learn how to use the system? Do we need to plan on training? What is the communication plan?
    • Which processes are we willing to change and adapt based on the best practices built into the selected system? Do we need to adjust a “we’ve always done it that way” mentality?
    • Can we move the data into the new system at the time it is created? Can we eliminate extra touches on the data entry process by authorizing appropriate access to the new system for any individual involved with the process?

Selecting a new system is truly an art and a science. System feature implementation varies by the personality and culture of your company. Some companies prefer to seek out ALL possible features available in the new system and attempt to implement the features into the company processes. Other companies may find the skeleton to be enough for their business at first.

Selecting a new system is a science, so make sure you're addressing every component
Image via Pxhere

Since most systems are designed around the common denominators, it will not meet all the needs/wants/nice-to-haves of everyone in the company. Remember there will be trade-offs when selecting a new system. Reporting and integrations with other software systems are often critical to the performance you want to achieve.

It’s important for leadership to be cognizant of the fact that new systems create change and change creates uncertainty. Uncertainty fuels the rumor mill. To counteract concerns and allay fears, as soon as possible, start the communication cycle on the new system. Start setting expectations and giving notice to those who might be involved in selecting a new system and in the implementation process. Explain the why and the what. Continue with regular status updates, both formal and informal.

As with any other new process, setting expectations is key. New systems do not solve business problems. A new system implemented with poor discipline and incorrect data simply means you get bad information faster. Cash flow problems don’t go away with a new system either. However, new systems, when implemented with due diligence on the front end will improve effectiveness and efficiency in the organization. Use the system change to your advantage; a new system is often the catalyst for changes you want to achieve.

Featured image via Pxhere. All images licensed for use via Pxhere licensing.

Your business made an acquisition…now what? Navigating through post-acquisition territory can be a challenge. Here’s how to plan for this critical time.

Your company made an acquisition. Now what?
Now comes the easy part – NOT!!  Successful post-acquisition integration is more of an art than a science, but a solid implementation plan is critical.

Large companies typically have experienced integration teams that are trained to handle post-acquisition planning and still a significant number of acquisitions fail to perform as expected. Even with the right planning, running your company post-acquisition is a challenge.

How disruptive will the acquisition be to your day-to-day operations? The interruption often depends on the type of acquisition. If the acquisition is stand-alone, there may be little impact on the day-to-day function of your existing operations, whereas integration of a product line or acquisitions for economies of scale may be quite disruptive.

No matter what, as the CEO, you have a significant role to play.

Understanding the Impact Post-Acquisition

Any acquisition is culturally, economically, politically, and to some extent, personally disruptive to every team member of both companies. No matter how solid your team culture, expect some waves. An acquisition also creates uncertainty that often drives employees to exhibit self-preservation behavior.


Post-acquisition is the best time to sit down with your team and get on the same page for moving foward
Image via Pixabay

To counteract fear of change, it’s incumbent on leadership to communicate with the team. Clearly define the why and what of the acquisition plan. Work to create a shared vision and an environment of trust in the negotiation process. These actions will set up the basics for transparency and form a base of communication. Post-acquisition, this need for transparency still stands. Remember, once the acquisition is complete – communicate, communicate, communicate!


Timeliness of the communication during and post-acquisition is also critical. Immediately after the close, share the company vision with the entire team; explain the expected benefits for all members of the combined organization. Ensure consistent messaging throughout the entire organization.

Don’t make the mistake of assuming people will believe you. I was told that I would survive a merger at one point and, as you might imagine, I took a “we’ll see” attitude and covered my bases anyway. It’s instinctive for employees to protect their own interests.

Communication needs to be consistent, frequent, and ongoing. Err on the side of under-promising and over-delivering. To the extent possible, make any drastic changes within the first 30 days. Whether those changes include replacing management, eliminating duplicate positions, or selling off a product line, get the change over with! If there is unexpected bad news, be transparent explaining potential impact and your planned response.

If the acquisition is a stand-alone, you bought it (at least partially) for the management team; stay out of micromanaging operations and team communication. This does not mean abdicate. You should focus your role of bringing together the resources to gain the expected benefits such as purchasing power improvements or consolidated finance and accounting functions.

If the acquisition is fully integrated, the planning and process pre and post-acquisition are much more complex, broadly affecting the entire organization. Provide resources and tools to enable your team to implement the integration plan, optimize performance, and measure the benefits.

The Role of CEO Post-Acquisition

As the CEO, the team looks to you during a time of transition
Image via Pixabay

Chances are the acquisition was your brilliant idea, so now what?  In your role as CEO, you will guide the overall success of the acquisition. According to McKinsey, handle the integration well and you can expect 6 to 12% higher returns than those who don’t. Sounds hard, right? That’s why careful strategic planning is critical to your success.

Create DAY 1

As you negotiated the contract, certain performance will be required DAY 1. Creating DAY 1 means making sure that everyone hears the same message. DAY 1 is THE opportunity for a first impression.

  • Celebrate!!!! Whether individual events at multiple locations, a company sponsored lunch, a small gift or remembrance, or a giant teleconference, let everyone know DAY 1 is an important and exciting day. Acknowledge uncertainty, share pertinent details and set expectations. Explain the why and the what. Outline how the acquisition answers those questions.
  • Identify and introduce the integration team. Set the 3 top goals on the agenda for the transition.
  • Communicate directly with customers, vendors, and other stakeholders (using the stakeholder blog), prior to public announcements.
  • Issue the press release and let the world know of your new adventure. Use your social media platforms and website to share the message.
  • Perform formal onboarding for new team members.
  • If possible, meet individually with new team members and provide them with an overview of the vision, mission and their role in the combined company. Remember people often fear change. Explore their concerns and be prepared to address them as soon as possible. Be prepared for skepticism.

Pick Your Top 3 Post-Acquisition Goals

With your new management team, select the top 3 priorities for the post-acquisition integration. These should reflect the why that the acquisition answered. Once selected, engage SMEs (subject matter experts) in the areas of integration to build the timeline. This may mean directing Purchasing to renegotiate purchase contracts with your vendors, consolidating buying power, or conversion to a new ERP system.

Getting everyone to share the same vision and move in the same direction should occur within a 90-day window. The longer the timeframe it takes to implement, the more resistance the company may face internally. Don’t miss the opportunity to revamp and optimize systems. Limited resources mean selecting the best strategy to get the most done in the shortest time.

Pick the Right Team

Picking the right team for your post-acquisition goals is a key step in making an acquisition a success
Image via Pixabay

In my small company, my controller and I were the acquisition team. If possible, select people from both organizations as team leaders and make sure they understand the vision. Getting unbiased input is important, but you don’t need skeptics in leadership roles who are undermining the process.

Encourage the adoption of best practices from both organizations as the post-acquisition project plan is developed. As with any project plan, there should be SMEs involved from any area or subject affected by the acquisition. A detailed implementation plan is critical to successful integration. While a significant amount of the post-acquisition implementation can be boilerplate, it needs to reflect the negotiated items from the contract.


Your team looks to you, the CEO, as the rudder of the ship. The team wants to know the captain has the situation under control. Set expectations, measure results, keep the end in mind as the company navigates through the integration. Celebrate milestones and share progress reports (good and bad). Communicate.

Engage heavily with the new management team members to develop their trust. Engage new team members with existing team members both formally and informally to foster relationships and collaboration. Encourage broad communication of the messages up and down the organization. Participate.

Throughout the post-acquisition integration, encourage discourse on best practices, issues, changing roles, expectations, and concerns. Listen.

An acquisition could be a smart move for your company, provided it’s approached with deliberate planning and an understanding of the struggles that will arise. As the CEO, once you’ve started considering an acquisition, your work as a leader has just begun. Clear, consistent communication and planning are key. With the right approach, your company can emerge stronger and even better post-acquisition.

Featured image via Pixabay. All images licensed for use via Pixabay licensing.

To acquire or not acquire, that is the question. Before you set your acquisition strategy, you need to explore the reasons and benefits.

Companies seek acquisitions for many reasons, some of the most common reasons for acquisition are:

  • Geographic expansion in the same line of business
  • Consolidation of competition in the industry
  • Acquire R&D or other intellectual capital
  • Streamline operating costs by plant, people, and/or technology consolidations
  • Gain economies of scale in purchasing power, distribution channels, and/or market
  • Improve competitive advantage against larger players
  • Obtain a niche synergistic or complementary product
  • Customer acquisition

For smaller companies, facing a decline in organic growth often opens the conversation of an acquisition. Even if an acquisition opportunity drops in your lap, setting a solid acquisition strategy is important. Start the process by exploring questions on the “why” and the “what” of the acquisition. Lastly, exploring the “how” the acquisition will result in a better outcome for your company and employees, no matter how good the acquisition deal looks on the surface.

Exploring the Why and What of Company Acquisitions

Acquisitions are costly and often fail to meet expectations. They aren’t always the best answer for the company, so it is a good idea to thoroughly explore any alternatives available before you take the plunge. Examine the driver behind your desire for the acquisition. Have you considered lower-risk, alternative paths to achieving your goal without acquiring a company?

Some reasons for acquiring a company and questions to explore before choosing acquisition:

  • Slowing organic growth – Can you extend your own product line into new markets, new geography, or open to new customers? Can you buy a complimentary product line or open a new distribution channel? Can you cross-sell your other products in your existing markets?
  • Industry consolidation is making competition more difficult – Can you acquire, or can your company be acquired at a favorable price? Can you narrow your niche? Could you amend your product to address an additional niche?
  • Government regulations are creating higher cost burdens – Can compliance be outsourced to keep individual costs down?

Asking strategic questions will help you gain a new perspective. Analyzing why you want to acquire versus the alternatives will force a clearer picture of what you are really trying to accomplish. This exploration will help you to set parameters and define an ideal candidate for acquisition. This exercise will also help you avoid excess costs by eliminating those candidates that weren’t really a good fit to start.

In clarifying the “why” behind the acquisition, the definition of the “what” becomes clearer. The process of defining the “why” and “what” is often assisted by a business broker, lawyer, or other M&A professional. These professionals know the market, pricing, available deals, and businesses to approach and they can greatly assist in defining potential targets.

As you outline your acquisition strategy, it’s important to define what metrics will determine if the acquisition is a success. ROI is one measure, but not the only factor to examine. Consider other metrics that relate to the reason why. Did we succeed in accomplishing the why? Did it result in sales increases, overhead reduction, monetizing intellectual property, or was product line extension successful?

Setting Up Your Acquisition Strategy: Understanding the How of Acquisition


After hiring a team of advisors, including an experienced attorney and business broker or M&A Specialist (usually dependent on the size of the deal), the process of identifying candidates that fit your criteria begins. These may or may not be companies that are for sale. The formal search might include competitors, existing or potential partners, and those companies presented by brokers. The advisors help define candidates that meet your criteria and assist in pricing evaluation.

Letter of Intent (LOI)

A businessman signs a letter of intent, which is an important part of an acquisition strategy
Image via Pxhere

After identifying a candidate and assessing their interest in a transaction, the LOI defines the basics of the transaction, stating the legal names of both parties and the intent or purpose of the transaction. It will include the stated intent (purchase the business), a purchase price, closing date, and specifics of price adjustments. It should also outline any special circumstances of the deal as negotiated. This is a legal document and should be drafted by an experienced transaction attorney.

Once the LOI is signed, both sides should be biased toward closing, not looking for ways out of the deal. There will be emotions and plenty of surprises during due diligence – not all of which should cause the buyer and/or the seller to walk. If you’re looking for the perfect deal, it doesn’t exist.

Due Diligence

Due diligence is designed to verify the investment thesis for the acquisition and in so doing, to drive the integration checklist. Depending on the size of the deal, due diligence may be carried out by outside advisor’s team or by the internal team, if they are qualified.

Acquisition Negotiations

Before starting the process, keep in mind that there are many concerns that may arise as your company prepares to make an acquisition. The negotiating process is the time to hash out these concerns. It’s important to keep in mind that negotiations are often broader than simply agreeing on the financial aspects of acquisition. Concerns that arise during the acquisition strategy and discussion may include:

  • Due diligence – extent, timing, data room availability, and control. Access to customers and vendors, employee involvement needed.
  • Personnel-related – position eliminations, benefits (insurance, PTO, sabbaticals, leaves of absence, etc.), golden parachutes, termination payouts, rewards for completing the transition.
  • Physical-related – closing or consolidating locations, inventory changes (obsolete, excess).
  • Assignments of contracts – leases, purchase orders, sales orders, software licenses.
  • Timing and type of notifications – press releases and their approval, employee, customer, and vendor notices, cash commitments, and delivery.

As I often say, an acquisition isn’t a DIY project. Having professional support drafting letters of intent, arranging due diligence, and negotiating deal points will ease the initial burden of acquisition.

Good representation and advice in the negotiation is critical to your overall acquisition strategy. Your advisors bring experience to the table. They’ve seen many deals and thereby understand the parameters. They’ll use their experience to help prevent mistakes and improve your negotiating position. A well-negotiated deal and professionally drafted documents assure that both parties are on the same page and agree on the specifics of the acquisition.

Having fair and knowledgeable representation during acquisition negotiations is an important part of a solid acquisition strategy
Image via Pxhere

In my personal experience, I worked on an acquisition with my boss, another owner, and their CFO in a small conference room. During the negotiations, the CFO and I both heard the same “yes” to a high-level point, but it was our responsibility to work with the lawyers to get the deal into the legal documents (as the bosses went to dinner). When we began to discuss the point, we realized we each heard a different “yes” based on the myriad of conversations with our respective bosses. In this case, “yes” didn’t mean the same thing, and we both had different interpretations of what each owner meant.

The lesson from this acquisition negotiation aided me greatly in future negotiations. It’s important to remember that agreements between the two parties need to be extremely clear. Outline the points, ask questions, reiterate for clarification. Do the detail work and get down to the nitty-gritty, rather than relying on generalizations. Extra diligence in the acquisition strategy and negotiation phase will help you avoid expensive renegotiation and redrafting down the road.

Your advisors will also have input on the types of clauses that are standard in acquisition and transactions. They will share where they saw pitfalls in the past, evaluation of pricing, as well as assistance in structuring debt and/or seller financing (if you don’t have as much cash sitting around as Apple). You just don’t know what you don’t know! Therefore, trusted advisors are vital to acquisition strategy.

In one of my acquisitions, the seller, a large local company, issued a press release stating we were closing the location. This statement was false, and I spent the first day post-acquisition on damage control. It is very important all key players are part of the acquisition strategy and negotiation. Again, your advisors offer transaction experience to avoid missing important transition items. Advisors will also typically suggest that you include a catchall clause in the contract to allow cleanup for insignificant items.

Building Trust and a Shared Vision

The details of the aforementioned acquisition strategy and negotiations will go much smoother if the seller and buyer can agree on a shared vision. The vision varies, whether it is a portfolio company, stand-alone add-on, or a fully integrated strategic combination. This sets the stage for a cooperative rather than adversarial relationship.

Combining two organizations is a complex process with many moving parts. In many ways, it’s not unlike a second marriage where the family grows well beyond the couple themselves (blood relatives, exes, steps, in-laws, etc.). If both parties focus on the success and benefit of the new organization, expected outcomes drive negotiations. Honesty and transparency lead to trust, which bodes well for the consummation of the deal.

Pitfalls to Avoid During Acquisition Strategy and Negotiations

There are many pitfalls, both legal and logistical, to avoid as you work through your acquisition strategy. Possibly the biggest pitfall isn’t due to a failure to plan out the moving pieces. One of the major stumbling blocks of an acquisition comes from a failure to consider the human and emotional side of the negotiation process.

People feel passionate about their livelihoods, especially when facing change. There’s often a great deal at stake for both parties. Beware of buyers and sellers falling into emotionally driven acquisition negotiations; these can happen in a few ways, but two of the most common are when:

  • The buyer often “falls in love” with the acquisition, thereby creating many blind spots in the evaluation of the potential acquisition risks. In this case, it’s the advisors’ role to keep the desired outcomes as defined in the why and what in the forefront of the conversation. It’s your role as CEO to listen to your advisors.
  • The seller, especially if an entrepreneur or founder, created the business from nothing, developed, and grew the business with years of blood, sweat, and tears. The sale of their business feels like they are selling a piece of themselves–their child. Deals fall apart if the seller did not thoroughly examine the “why” and “what” before they get to the negotiating table. Again, an advisor will help you navigate through these waters.

There are other pitfalls as well. Beware of poorly represented sellers who hire their “every day” advisors to work on a transaction that requires specific deal experience. Without knowing the standard and customary clauses and expectations, attorneys can derail a deal with unrealistic expectations. Even experienced attorneys can fall into the trap of forcing the abdication of a business deal point rather than protecting the point legally.

Beware of “fast-tracking.” If someone is in too much of hurry to close a deal, this should be a red flag. Consider a higher level of due diligence before the negotiations start. A party that is moving too slow is also a warning sign.

Setting up a strong acquisition strategy will lead to a successful deal for all parties. It’s important to the long-term health and well-being of your company that you maintain your reputation for fairness, honesty, and transparency throughout the acquisition.

Bring on trusted advisors to help steer you in the right direction with their insight and experience as you navigate the acquisition strategy and negotiation process. As a CEO, it’s your job to listen to your advisors and carry out a strong plan for the future of your business.

Featured image via Pxhere. All images licensed for use via Pxhere.