Andrew O’Connell reported on HBR today:
Three-member teams on which at least 1 person was in a good mood were more than twice as likely to collectively solve a murder-mystery puzzle as teams on which all members were in neutral moods, according to an experiment by Kyle J. Emich of Fordham University. That’s because people in good moods are more likely to seek information from others and to share their own knowledge. So if you start a meeting with a funny story or do something else to put people in a good mood, you may get better exchange of information and better decision making, Emich suggests.
Picture credit: reachforthestjarnor.wordpress.com
Over the past 25 years I have seen hundreds of people fail to earn a living in the M&A industry. Probably 80% left without making any money, mainly because they approached the effort as if M&A is a business. That mistake was fatal. M&A is not a business; rather, it is a sport. It’s much like big game hunting, in fact.
Along the way I discovered that M&A is defined by paradoxes. Beyond the majority of business owners who believe their businesses are worth double what the market will pay, these paradoxes make it extremely hard to earn a living.
The following are the paradoxes that have cost me the most money.
John Warrillow discusses Steven Covey’s importance/urgent chart in his most recent post sub-titled How to Hardwire Your Success Patch. John writes:
Covey on doing what is important, yet not urgent
Stephen Covey provided us with a framework to think about how we spend our time and warned of the dangers of ignoring what is important yet not urgent. Do you remember his four quadrants?
Covey’s central idea was that how we spend our time ultimately defines our results. Covey encouraged us to think of our tasks along two dimensions: urgency and importance.
Covey warned that we all naturally deal with things that are urgent and important first, but it is what we do next that defines our ultimate success. Once the important fires are out, most of us switch to tasks that are urgent yet not important because we get a mini endorphin rush from completing each task.
Covey went on to say that the most successful and effective people spend the majority of their time in the top right quadrant, which focuses on projects that are important, yet not urgent. Continue Reading
In business succession planning it is important to ensure that the wills of the participants align with the succession plan. An issue that is easy to overlook is the capacity to make a will. This article gives a good overview of the principles in determining capacity. If there are questions then professional advice should be obtained.
PRINCIPLES BEHIND CAPACITY ASSESSMENT
“The first broad principle behind capacity assessment is that two cognitive functions are behind every capacity, namely the understanding of relevant facts and the appreciation of the reasonably foreseeable consequences of a decision or course of action. This involves cognitive functions such as episodic memory and frontal-executive functions that subsume judgement and impulse control. Continue Reading
The article Setting Aside a Prenuptial Agreement – LeVan v. LeVan neatly summarizes the disclosure requirements in the context of pre-marital contracts in Ontario. Handling this issue requires care when a family business or family farm is in issue.
Although it seems impossible to know when or how to give this advise – it seems that where there are disclosure issues based on a concern of fear of consequences – then one should question the entire premise of the marriage.
In November of 2012 CIBC Bank published a report describing the macroeconomic threat posed by inadequate succession planning. CIBC reported that in Canada, 550,000 businesses with a total value of $3.5 trillion dollars will transfer or transition in the next 10 – 20 years.
There is a lot of marketing by financial institutions who are looking to capture the dollars flowing out of these transfers and transitions. But there is not a lot of good quality guidance available to assist the owner or advisor with how to actually transition a business.
50 Hurdles – Business Transition Simplified is a valuable addition. Lead author Ian R. Campbell has previously authored leading valuation texts accepted as authoritative guidance on the subject of business valuation in many Canadian court cases.
So it is certain that 50 Hurdles emanates from voices of deep experience. The difference however is that Campbell has put in a lot of effort to make the book readable and accessible to business owners and their advisers. You can consider this book as authoritative guidance written in an accessible manner. Based on my own deep interest in the subject I could not put the book down, and read it one sitting. This does not mean 50 Hurdles reads like an Agatha Christie novel, but it is not a formal textbook either.
The fifty hurdles to successful generational business transition discussed in the book each are issues that must be considered along the generational transition path. The book makes the point that a hurdle is an obstruction that you can jump over; whereas a barrier is a wall that stops you. Reading through 50 hurdles will help you identify barriers that may exist in your unique family and business, and in turn may fundamentally dictate your strategic choices. Continue Reading
The article Is now really the “perfect” time to sell a business? offers some important considerations for the owner who is considering selling.
“It seems everywhere you look, valuations are up. All this froth could lead a business owner to say that now is the perfect time to sell. Maybe. But most owners who sell will have to do something with the money, which usually means buying into an equally inflated asset class. ”
For lifestyle requirements, funds should be in low risk or guaranteed investments. Legacy is best dealt with by life insurance.
by Gary P. Pisano
This article contains very practical advice on innovation. The conclusion is:
In creating an innovation strategy, managers should strive to achieve the optimal balance between disruptive and sustaining efforts. There is no magic formula. Young start-ups are not going to beat an Apple or Google at its own game. They need to find an alternative value proposition, and disruptive strategies are likely the only route there. (This is why it makes sense for venture capitalists to obsess about disruption).
But once a company is established, innovation strategy means understanding how to leverage distinctive existing strengths to generate value and capture value. It means understanding how your repertoire of R&D skills, intellectual property, operating capabilities, relationships, distribution channels, and brand can protect and extend the value from innovation.
Collins Barrow has published The “Evils” Of Alternative Minimum Tax. This article is a good summary of the issues arising out of Canada’s alternative minimum tax which is an issue that surprises many: farmers who are selling qualified farm property; and, business owners who are selling qualified small business shares.
In this HBR article Where There’s No Margin for Toxic Leadership author Robert Sher discusses the significant effect that bad managers can have in smaller companies.