As an Exit Planner, most of my engagements involve assessing a management team. They may be the intended buyers of the company, or else they are key factors in the saleability of the business.
The biggest and most frequent complaint I hear about managers is that they don’t know how to THINK. Business owners lament the inability of employees to discern critical paths, assess alternatives, or analyze complex problems.
Examples of Thinking Shortfalls
A CPA is doing a final review of a client’s tax returns, as prepared by an associate. As with many business owners, the client has two related entities, one acting as the management company for the other.
The reviewing partner notices the income from management fees in one entity, but no corresponding expense deduction in the other. The associate explains that the client’s books didn’t show the offsetting expense, so he ignored it.
The owner of an IT services company receives an irate call from a client. His technician has just spent two billable hours on the client’s PC, and it still won’t print his documents.
When the employee is asked for an explanation, he points out that the client said he needed updates to his printer drivers, and that is exactly what he (the technician) did. At no point did he try to determine whether updating the drivers would solve the customer’s problem, or even what that problem was.
The customer made a request, and the technician complied. He didn’t perceive the customer’s lack of technical knowledge as a factor.
As the adage goes, “When someone asks you for a drill, what he really wants is a hole.” If you are in any business where the customer expects you to be more knowledgeable than him (and why would he hire you otherwise?) thinking is a core competency.
I Can Look Up the Answer
Numerous educators and managers have related to me the effect of the Internet. Students resist rote learning. Employees refuse to train in procedures. Their answer is ubiquitous; “Why do I have to know that? I can look it up whenever I need it.”
In some circles, gaining “knowledge” is a game of speed and skill. Participants in a conversation whip out their electronic lozenges upon any reference to a historical fact, person or thing name, geography question, et al, ad infinitum. (Don’t know Latin? No problem. Google it.)
What is eroding is the concept that an answer may not be the best answer, or even a good answer. It’s just an answer.
Life isn’t “Fill In the Blanks”
Getting an answer doesn’t mean you’ve solved a problem. What we are losing is the ability for critical thinking. For saying “Wait a minute. That is one approach, but might there be others? Is there a better answer?”
We used to have to work through that step by step in our brains. Now we are becoming conditioned to accepting the answer on a little screen as the final word. It’s great for learning how to change a faucet, but maybe not so hot for solving a customer complaint.
Your management team is the most important factor in realizing value for your business. If you are planning a fully controlled (time, method, and proceeds) internal transition, they are your buyers and the guarantors of any financing you may underwrite. If you are selling to an external buyer, he or she wants to see a business capable of running (and making good decisions) without you.
Either way, you need to teach them how to think.
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John F. Dini develops transition and succession strategies that allow business owners to exit their companies on their own schedule, with the proceeds they seek and complete control over the process. He takes a coaching approach to client engagements, focusing on helping owners of companies with $1M to $250M in revenue achieve both their desired lifestyles and legacies
great article John. Hope you are doing well.
Excellent article, John! You are so right – skipping steps is like not building a foundation. Simply getting to the answer is like not addressing the problem. Thanks for your insights.