Janna Hoiberg - What Makes Innovation Hard in a Family Business?

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Welcome to the Exit Coach radio show, the show for baby boomer business owners who are looking for cutting edge information as they plan their 3 to 10 year business succession and exit. Every week we interview top professional advisors for. Their best tips, strategies, and precautions so you can be well planned. And don't miss our one minute exit coach tip of the day on exitcoachradio.com. And now here's your host, the exit coach Bill Black. Well, thanks very much for joining us today, everybody, and welcome to the Exit Coach radio show. I'm very excited about our lineup today. Let's get right into it. My first guest has been with us a couple times before. I love having her back. She has, um, she's a well known author, speaker, and award winning executive and leadership business coach, and she has over 30 years experience in managing and operating successful businesses. Uh, she's helped businesses with needs varying from increasing profits, improving systems, strengthening teams and executive leadership, and fiscal growth. Jenna Heiberg is joining us from Colorado Springs, Colorado, and Jenna, welcome back to the show. Well, it's awesome to be here. It's a beautiful day in Colorado and it's a great day to be on the show. Well, wonderful, we are so excited to have you back. You know, we got a lot of great comments on your, your past interviews with us where we talked about your book, The Family Business and how to be in business with people you love without hating them. And, and the comments range from, you know, I can so relate to that. I try, these are people I, I, I love, I want to love them, but sometimes they bring in their baggage from the relationships we have outside of the office and I. Need help in dealing with that and so I'm really glad that you're with us today to talk about that and and what you do is help people change the way they think about business. So tell us a little bit about your background and how you came to this line of work. Well, I ran businesses in Boston for about 30 years, and a lot of them were high-tech software companies, and they were high tech back then, which is very different than high tech now. I was back in the old mainframe and PDP 11, if you remember any of the digital equipment corporation days, and we had software that ran business control, so it was the accounting, it was the MRP and enterprise resource planning, and I got a chance to just see that whole business environment, but a lot of our customers were family businesses and I would sit in meetings as we try to implement software and I would see the dynamic going on in that family business. Fast forward a bit, moved to Colorado Springs for a lot of great reasons in part the mountains and in part a sunny Colorado day and had the opportunity to start my business in coaching and ran into a lot of family businesses and that's really just what um pulled it together and part of my differentiator is I've sat in their shoes. I've been in the family business. I've, I've seen the dynamics. I've been in Sales and marketing and the general manager and the operations, so it helps me just pull that all together and in part ask questions to challenge their thought process and because I'm a baby boomer, so I'm over 21 joking, it allows that expertise to for me to walk alongside them and see where things are at and allow that change to happen. Yeah, and you said something early on in that uh convers in that discussion, and that is that things have changed in technology so rapidly and I think this is this might be the crux for a lot of the. The, the issues that come up in family business, you have an older, say patriarch matriarch, the person that started the business, and then you have younger people coming in using new technology in different ways and um and and and their work habits might be very different. They might work very hard, but they're, it's they're not just if you're, you know, there's the old mentality of if you're not at the desk, you're not working. Right, and so, uh, tell us, tell us a little bit about how technology has created these issues. Well, um, that's exactly right, and if you remember when the fax machine came in, you know, that was a whole novel concept, and then the whole voicemail and email there's always been technology changes, but having been in the software industry, a. Product lifecycle could be 18 months, 2 years. It could be 5 years before you had radical changes. Now they're getting radical changes almost daily to a certain extent. My son Hap and Tufts University, and he had the opportunity just a couple of weekends to go to go to Philadelphia for what they called a hackathon, and a hackathon is they went and built software. Um, and created new products in 36 hours that these companies who are sponsors who can then take the product and build it from there. And when you've got technology changing that fast, um, us over 50 have a hard time, you know, sort of like it's going so fast we don't. Understand how to keep up with that and then even how to have the conversation with the, you know, the 20s, the 25s, the 35 year olds that are bringing this new technology in because it's, you might as well be teaching a foreign language. So is is this a damper on innovation in the family business? What makes it so hard in the family business for innovation to happen? Innovation is very hard in the family business unless you're in, you know, there are family businesses that are high tech companies, and innovation is a lot easier in those environments. But for long time generational, you know, 12345 generations, there's far more of a mentality of we've always done it this way. And that can be a death knell to a business and it's even more a death knell to the family business because you're in a lot of businesses, if a CEO isn't keeping up with technology, they put a new CEO in. They put a new CIO in, they put a new CFO in. They get somebody else. That doesn't happen in family business. And if that current generation isn't open to looking at things in new ways, it becomes very hard for the current generation to relate. Yeah, and is, is this relates back to uh a level of trust and or distrust, um, especially I see a lot of older business owners that. You know, the upgrade to an Excel based accounting program was was as far as they want to go with technology. They, they used to keep track of things, you know, in a, in a ledger and now the ledgers in Excel in there so it works. We don't need to do any more than that and there uh is there a lot of closed minded thinking at the top? Is that what we're finding? There is an aspect of closed-minded thinking. I think a lot of business owners. We want to do new things in new ways. We want to be open-minded, but we don't know how to be open-minded when things are changing so quickly. because decisions have to be made quickly to go get things to the next level. I have a small business um around here that is doing some work with, you know, athletes and the like. Well, I've just realized in something that I found out that because it's he's being so slow in rolling this new technology out that there's actually new technology that is has leapfrogged where he's at. And puts his business at risk as a result. So it's being able to be fast and nimble. now the balance is. Those of us who are over 50, we've understood that sometimes you've got to be, you've got to check things out before you move on, and that's what's kept us in business. But we've got to release those reins on the new generation to be innovative so that they can also go learn their learn and make mistakes because not every decision they make is going to be the right one. And guess what? Every decision we made wasn't the right one either, but that's how we learned. Great point. Let's go back to that issue. Accountability. So I, I talked about, I've had several situations where the, the older owner says, you know, my sons is never in my son is never in the office. I talked to the son, the son says, I am always working, but I'm not going to miss the soccer games that my kids, like my dad did. I'm going to do all that stuff and then I'm going to work at night. I'll I'll work from my phone. I'll work from all these mobile platforms. How is that changing accountability in the family business and what are some of the issues that you see? Well, a lot of it is you still have to measure on results. So measuring on results is not necessarily going to be on the 9 to 5, and I do love it, and I did exactly the same thing is I would go work 6 hours. I would pick my son up from school. I would go to games. I would participate in that stuff. We'd come home, have to have dinner, and I would do a lot of the work at night. That doesn't mean I'm expecting an answer for you from you at 11 p.m. But you are getting the answer. It's not a 9 to 5 world from that side of things, but accountability is looking at results. Not did I get this done while I was physically sitting in the office. Did I physically get it done? So that's why there's an aspect of management. You still should be on what I call key performance indicators. OK, here are the things you need to get done. Did you get those done? If you got those done, I don't care what part of the 24 hours a day you did them in. But and we don't need to see and feel now. The reality is not everybody, including millennials, including Gen X's, are good at not working in that structure. I've run into a lot of people that says I've tried to work from home. I've tried working out of the office, and I don't have the attention span and the focus, and I get too many interruptions. So part of this needs to be geared toward what is the strength of the individual. So we'll take it back to the family business. You've got a son and a daughter. Son gets distracted all over the place, and he doesn't get anything done if he's not in the office. Daughter, however, has got great ability to multitask, and she gets everything done whether she's in the office or not, and then those roles can be switched. Does that make sense? Yeah, yeah, it does, it makes a tremendous amount of sense. I think the question that I have is how, how does one qualify or quantify that, uh, you know, what the tributes of one person might be over another as far as the ability to get things done. It'd be great if there was a litmus test, but like you said, results are what matters, um. Uh, it, it's just hard for it's hard to supervise someone that you can't see and and go over and talk to, uh, quickly. So, uh, go, go back to the KPIs. So, so is that the key is setting up and monitoring the KPIs for each individual and in their divisions in the business? I, I, I'd say there, there's, there's two pieces of it because there's a, a piece that you mentioned that is critical. If there, there should always be a part of the day that you're requiring. Key decision makers and participators to attend. So if you're going to have meetings at 10 o'clock in the morning, Junior can't be out doing something else and not participating in those meetings. So that becomes the rules of the game that we're going to have meetings and you need to participate and of the 6 meetings. Three of them need to be face to face. 3 of them you can dial in. So there's, there's an aspect of knowing and understanding from there that I think is a key part to having that confidence and the big word. It's a 5 letter word, not a 4 letter word of trust. I trust that they're going to be doing the things. Now from there the key performance indicators are if Junior is responsible for sales, you know, what are the leads, what's the conversion rate? What's the average dollar sale that they're bringing in this slies to every size of business and every type of business, and what results are you coming in with if you're in charge of customer service? OK, what's the, you know, how is service and key performance indicators to see where things are at. And working outside of the office, I will still say is very much a privilege, and if you're not able to do it, that privilege needs to be taken away. OK, yeah, absolutely. So measure, measure requires some physical presence and, and then just watch, watch, watch and see what happens. Now let's, let's flip it around for a second, Jenna, let's talk about the, the the business owner who feels a. Tremendous amount of guilt if they're out of the office for any period of time, and yet they need to work on that succession plan and they need to probably step back some and transition some of their duties. How, how and when should a family start the succession planning exercise and how much time do they devote to that planning? The answer that I give to that is very much dependent on the family environment that you have. If you've got 3 or 4 brothers and sisters running a business and you're gonna have essentially cousins stepping in to do that. Then they need to start grooming them multiple years, 5, 10 years before that happens. So that you understand the skills and they can grow into it. There's part of me that says, in the best succession planning that ever happens, it starts when they're, you know, about age 5, and they begin to understand the inner workings of the company, and that doesn't happen to all companies. But if a Business A sibling decides to come in and that they want to be the next heir apparent in there, you really need a good 3 to 5 years to do it gracefully. Now, the reality is sometimes a parent will die and the sibling steps in and they have to do what they have to do. So it really, there's, it all depends on the siblings and the environment, but the more planning you can do, the better off you're going to be. It goes to, I think it's Stephen Covey that says begin with the end in mind. If you want them to do it, you need to be grooming them for years so that the takeover is easy. It's probably not what everybody wants to hear. Well, I have a standard answer. You wanna hear what my standard answer is? I, I would love to hear your answer. The best time to start this planning was 5 years ago. The the second best, the 2nd best time is now because a lot of people don't, they, they wait and wait and wait and then something happens like you said, a tragic event or they just get to a point where things get very, very busy and out of hand or an offer comes in and they haven't done enough and they lose, they lose a potential. Sale offer they lose a potential opportunity to retain a talented key employee because he or she gets picked off by a competitor and they didn't plan for that. There there's just a lot that can happen. Uh, nothing good comes from lack of planning, but here's the issue and here's the question is it a lot of business owners say, yeah, but I'm so busy running this thing. I just don't have time to start that planning so what do you, what do you tell people about that, about, about making the time or taking the time to do this kind of planning? How much time do they need to put into this? Well, I, well, I will say in general, a good business owner should be spending 60% of their time planning. And now most people go, go and look at me like you've got to be kidding. There's no way I'll get all this stuff done. Well, here's the reality, and I've seen it in businesses that I've run. The lack of planning creates the urgency of what has to be done today because I didn't do a good job of planning the new software release, so I'm going back to my history, because we didn't do a good job planning the software release. And we released it before it was ready. We didn't have time to do it right the first time, but we do have time to go fix every single one of our customers and put patches in and do bugs and fix messes. Which one takes the most time? Well, obviously the second one, but if we'd stepped back and done a better job of planning, we wouldn't have the mess that we had because we hadn't done the planning. OK, so 60% of time for CEOs should be planning, and I've heard in the past that 40% of their time should be in thinking about and developing new business opportunities, new growth opportunities for the business. The problem is there's 100% of the time and most, most especially the heads of smaller companies are, are too busy doing things that they shouldn't be doing. Would you, would you agree with that? Absolutely, but I would say some of that 40% really does go into the planning because if you're looking at new products, you know, where the company is going to be, as far as I'm concerned, that's planning. You're looking out to where the business owner needs to be that visionary, you know. I say that there's, you know, in a broad picture, three types of people. There's a person who runs into the brick wall because they didn't see it. There's a person who sees the brick wall, stops and says, OK, here's the way to get around it. And then there's the person that sees the potential of a brick wall and totally avoids it. The business owner needs to be the person who sees the potential and avoids it, and that can be new products, new services, new ways of doing business, you know, ways of being out there, and that is planning. Great point. I love that analogy too. See the potential brick wall ahead and plan for that. How are you gonna get around it? Are you gonna, are you gonna try to break through it or you're gonna get a ladder and climb over it? Right. Well, I, I love talking with you, Janet. Tell us about your, your book and uh the family business, how to be in business with people you love without hating them. Um, why would someone, uh, what are they going to get out of reading this? Tell us a little bit about why you wrote it and what they get out of it, and where they can get it. Why I wrote it is I really saw a need for business owners to have a little bit of that guy that says, OK, here's how I run my business. Here's another way of looking at it. So it goes back to my change the way you think about business. Oh, all it takes if I just did this. Things would change in my business. So it's that practical manual that you can go through and you can read again, and one chapter will apply now and another chapter will apply in 6 months because of the stage that you're at. It was really just to be a service to the business owner. And to be honest with you, even if you disagree with something I say, that's awesome because it's forcing you to think and it's forcing you to challenge what you're doing. And I just love the challenges of small business owners. I'm passionate about it for them. You can get the book off of my website, which is janaHoiberg.com. J A N N A H O I as in interest, B as in boy, E R G, or you can get it off Amazon as well and you know, um purchase it from there both in a Kindle version as well as a hard copy. Janna Hoiberg, I actually, I absolutely love it when you come onto the show. You bring us great ideas and great insights. Thanks so much for joining us today, and I look forward to the next time and I hope you have, uh, I hope the rest of your week is beautiful in Colorado. One day, one day is great, but let's make it the whole week. How about that? Well, the forecast is for sunny skies and in the 50s and 60s for the next 10 days, so you know something, I'll take it. You have an awesome day and thank you again for having me on the show. Fantastic. Thanks very much. We're going to take a short break. We'll be right back after this, so please stay tuned. You're listening to Exit Coachradio.com, the information station for age 50 plus business owners, where we're interviewing top advisors for their best tips, ideas, and precautions so you can be well planned. We upload new one minute tips every day. Exitcoachradio.com. Come listen for a minute. Thank you for listening to Exit Coach Radio. Men, if you're ready to reclaim your edge, listen up. I used to be held back by constant bathroom trips with multiple wake-ups during my sleep and looking for restrooms whenever I was out. Then I discovered better man. After just two months, I started experiencing fewer trips to the bathroom, less urge to go, and I even slept through some nights. I feel a noticeable boost to my overall well-being, even. Sexual stamina. It gives me the freedom and confidence to live life on my terms. Betterman is clinically tested and trusted by thousands of men over 25 years. Ready to take back control? Go to Bebetternow.com to order your supply today. That's Bebetternow.com. These statements have not been evaluated by the FDA. This product is not intended to diagnose, treat, cure or prevent any disease. Use as directed. Individual results may vary.