January 13, 2019
The Three Cs, Part 5
The Three Cs, Part V – Comfort By Chuck Violand January 14, 2019 Of the three Cs, perhaps the leading determinant of a company’s ultimate size is the owner’s level of Comfort with his personal security, lifestyle, and business. Comfort isn’t determined by the economy, the market’s demands for our products and services, our competitors, or even tight employment markets. These trends and influences come and go over the years, and we see them in various forms throughout our professional career. Instead, an owner’s comfort and accompanying motivation to grow his business is loosely tied to a theory of human motivation introduced by Abraham Maslow in 1943 as Maslow’s hierarchy of needs. In other words, as long as a business owner is satisfied with the physical and emotional comforts his business provides, he has little motivation to change anything. Conversely, when he is uncomfortable with his current situation, he is more motivated to change. It takes a lot of effort to dislodge someone from a comfortable situation and convince them to become uncomfortable or endure financial and emotional risks in order to grow their company. It would be a mistake to think of an owner’s comfort from a purely financial
December 31, 2018
The Three Cs, Part 4
The Three Cs, Part IV – Confidence By Chuck Violand December 31, 2018 Having the Competence to drive a business forward is one thing. As discussed in Parts II and III of this series, a business leader can develop both the Emotional and Technical Competence needed to grow a successful larger business. Having the Confidence to make the necessary decisions to drive that growth, and then execute on the actions that follow, is quite another. In my opinion, the second reason for a company’s ultimate size, or the second “C” is the owner’s Confidence in the business decisions he makes. A lack of certainty usually involves words like fear, risk, and change. At first blush, it might seem odd to think that an entrepreneur would be hampered by avoiding risk. After all, he accepted a pretty big risk when he started the company. But, sometimes starting a business has little to do with evaluating risk. Instead, it has to do with being overcome with emotion, excitement, or pain; what author Michael Gerber refers to as an “Entrepreneurial Seizure.” Many of us didn’t evaluate the risks involved in starting a business; we just acted! While this might work with a company
December 17, 2018
The Three Cs, Part 3
The Three Cs, Part III – Technical Competence By Chuck Violand December 17, 2018 As explained in Part III of this series, an owner’s Competence can be divided into two broad categories: Emotional Competence and Technical Competence. Emotional Competence includes a person’s emotional stability to run a business, the personal behaviors they bring to their jobs, and their personal values and character. Technical Competence, on the other hand, deals with an owner’s grasp of the technical elements of the business and the demands of his specific position within it. Just as with an owner’s Emotional Competence, the Technical Competence required to drive a successful business changes dramatically as the business grows. In the early years, Technical Competence frequently involves performing just about all the tasks needed to run the business. And while Technical Competence includes understanding and delivering the company’s services or building the products the company produces, these are never the only technical factors to consider. Technical Competence also includes collecting and managing the company’s money; managing the books; selling the company’s products and services; and, ultimately, hiring additional people. As the company grows beyond the survival or owner-centric phase the Technical Competencies grow as well. Once other people
December 3, 2018
The Three Cs, Part II – Emotional Competence
The Three Cs, Part II – Emotional Competence By Chuck Violand December 3, 2018 A good place to start discussing the three Cs is with the easiest of them to address: the owner’s Competence to grow their business. And while it’s the easiest of the three, it isn’t necessarily easy. Don’t make the mistake of confusing an owner’s competence with his intellectual intelligence (IQ). We can all cite examples of people who were brilliant, with advanced degrees from prestigious universities, yet who struggled with managing people or growing a business. As a result, their businesses settled into a size that fit their individual competencies. On the flip side, most of us are also familiar with owners who never completed high school, yet built significant companies employing hundreds of people while becoming respected business leaders. So, while an owner does have to be intelligent enough to grasp business concepts, their competence isn’t necessarily dependent on intellectual intelligence or formal education. If we divide the competences needed to grow a successful business into two broad categories it might be easier to grasp. We’ll call these categories Emotional Competence and Technical Competence. The Emotional Competence of the owner is related to his personal
November 19, 2018
The Three Cs, Part I
The Three Cs, Part I By Chuck Violand November 19, 2018 With as much media coverage as the stock market gets, it’s hard to imagine that there are fewer than 4000 companies whose stocks are actively traded on it. There are another 15,000 whose stocks are traded over the counter, but not on the New York Stock Exchange. In total, this makes fewer than 20,000 publicly traded companies in the U.S. Considering the U.S.’s roughly 30 million companies, this means that far less than one-half percent of all companies in the U.S. are publicly owned, leaving more than 99 percent privately held. Companies are usually privately owned for very specific reasons. The owners don’t want to be accountable to a board of directors. They don’t want to answer to a group of stock holders they don’t know and who usually weren’t involved in growing the business. They don’t want to be responsible for reporting quarterly earnings when they might have higher personal priorities than focusing on the next quarter’s earnings. The list of reasons is endless and as varied as the people who own the companies. These are what could be referred to as “lifestyle businesses”—those set up and run