Jackie Zach
January 25, 2024
In another insightful discussion, Mike McKay and Jackie Zach explore the importance of formalized processes in family-owned businesses and the challenges that arise from a lack of structure. They emphasize that many family businesses operate with informal, inherited methods that can lead to inefficiencies, ambiguity, and stagnation. This lack of systematization hampers growth, as employees and customers face unclear expectations, ultimately impacting both productivity and profitability. Mike and Jackie stress that businesses should develop clear processes, embrace technology, and create repeatable systems to function without the owner’s constant involvement.
The hosts further highlight the necessity of strategic planning, noting that businesses should look ahead five to ten years and develop a roadmap for the future. Without a strategic plan, businesses may find themselves distracted by non-essential tasks rather than focusing on long-term goals. Jackie encourages family business owners to establish a clear succession plan and to take actionable steps toward growth and efficiency. Mike emphasizes that a strategic plan is essential for professional entrepreneurs and can be created quickly with the right support. The episode concludes with a call to action for business owners to prioritize planning and structure to build a lasting legacy.
Is your family business in need of formalized processes? Take advantage of a complimentary business strategy session to discover the opportunities in your business! http://makemoreworkless.actioncoach.com/mmwl-diag-and-questions/
Podcast Transcript:
Mike McKay: Welcome to the Make More Work Less podcast, where we give a little tough love to business owners. I’m Mike McKay, and I’m here with my co-host, Jackie Zach. Today’s tough love is aimed at family-owned businesses. Jackie, what are we discussing today?
Jackie Zach: Today, we’re talking about the lack of formalized processes in family-owned businesses. And just to clarify, everything we discuss applies to non-family-owned businesses as well. Often, the way things are done in family businesses gets passed down from generation to generation without much formality. The decision-making process is informal, which can lead to inefficiencies and ambiguity. When it comes to implementing strategic initiatives, it’s almost impossible because nothing is clearly defined.
So, when you look at your own business, especially if it’s family-owned, ask yourself: are you doing things just to get by, or because you had to create a role for Uncle Joe?
Mike: Ah, good old Uncle Joe.
Jackie: Right! So, this applies to all businesses, really. Growth and scale depend on systematizing your operations so people know what to expect. Take McDonald’s as an example: it’s not the best food out there, but it’s the biggest restaurant brand in the world because everything is consistent.
Mike: Exactly. Customers know what to expect.
Jackie: Yes, and if Customer A has a great experience and refers Customer B, but Customer B has a bad experience because they talk to Uncle Joe, who’s grumpy, that could ruin your relationship with both customers. If you’re constantly scrambling to get everything done, then you probably don’t have enough processes in place. It’s not an accusation, but it’s essential for growth. People need to know their roles, and customers need to know what to expect.
Mike: Unless you’re making custom art tables worth $100,000 each, and customers are happy to wait for them, this applies to you. There are probably only two people in the world who fit that description, but hey, maybe you’re one of them!
Jackie: Exactly. So, take a look at your own business. Are you still doing things the way they’ve always been done just because that’s how you learned? I’m surprised at how often people still use pen and paper because they don’t know how to use a computer. It’s okay if the original idea behind those methods was good, but automating and improving efficiency so that anyone with the right skills can do it is key. Plus, employees need clarity. Too much ambiguity causes confusion and inefficiency. Without clear expectations, outcomes won’t happen.
Mike: Your business should be getting easier to manage over time. If it’s not, then your systems are either not working, or you don’t have systems in place at all. It’s fine if you’re running a business with no plans for growth, like if you’re 65 and planning to sell your building and retire.
But if you’re building a business you want to grow into a profitable, commercial enterprise that works without you, you need systems. My wife always reminds me that there’s no “thought bubble” above my head to show what I’m thinking, and I wish there were! It would make things so much easier if everyone could just read my mind!
Since that doesn’t happen, you need a process. You can blame the people around you, but it’s better to look in the mirror. If you haven’t made things repeatable and replicable, you can’t expect the business to run any easier. If you’re not willing to do that, that’s fine, but you’re paying a price in revenue, profitability, and probably in hiring.
Right now, the next generation of hires wants technology. It doesn’t matter if Uncle Joe doesn’t care about it—he won’t be around in 20 years. But Young Joe, the one you just hired, needs to be supported if you want your business to become a lasting legacy. A business should be a profitable enterprise that works without you. It’s not your job to keep everything going. If you truly want to own a business, it must function without you using your 30, 40, or 100 years of experience to get things done. That’s not a business—it’s barely even a job.
Jackie: Exactly. Another important aspect of formalized processes is planning. Are you planning five years ahead? Do you have a roadmap? Do you know where you’re headed? Too often, I see family businesses passed down from generation to generation where they just put their heads down and try to get through the next quarter. Instead, they should be thinking, “Are we looking forward?” The more time you spend in confusion and inefficiency, the less time you have to implement strategic initiatives that will get you where you want to be five years from now.
Mike: Step one is to know where you want to go.
Jackie: Absolutely. Know where you want to go.
Mike: This is interesting because I’m actually writing about strategic planning this week for the Daily Dose of Business. I found one article that claims small businesses don’t need strategic plans, but ironically, the entire article explains why they should. The title says, “Small businesses don’t need strategic plans,” but the body says, “Here’s how small businesses can plan strategically.” So there’s no literature suggesting that it’s best to run your business on the fly, on a napkin, instead of spending time creating a proper strategic plan.
Jackie: Right.
Mike: It’s unwise to run a business without a strategic plan—five years out, period.
Jackie: Yes. And as the self-proclaimed family business navigator, how are you going to create a legacy for the next generation if you don’t have a five-year or ten-year plan or a succession plan?
Mike: I was watching one of the Pirates of the Caribbean movies, and when you said that, I thought, “You’re Captain Bligh.” If you’re the business owner, your family and business are in the same boat. If you’re both just sailing around in circles, you can only expect to keep doing that. Without a strategic plan, everything gets evaluated, and you get busy with ideas that may not even be worth your time. You need a filter to focus on what’s actually a problem, not just distractions.
So yes, you need a strategic plan. I don’t care if you’ve never done one, or if previous ones didn’t work. If you want to be a professional entrepreneur, you must have a strategic plan. There’s no excuse for not having one. They’re inexpensive and time-effective. We can help you create one in two days. Or you can go through a lengthy process with consultants if you prefer. If you want to do it in two days, give Jackie a call. But remember, it’s your compass. To guide your family business in the right direction, set your goal and let Jackie assist you in getting there with minimal hassle and fuss.
Jackie: Right. So if you’re sitting there thinking, “Oh, they’re speaking directly to me,” and you recognize this in yourself or your business, click the link below and let’s talk. Until then, go kick some ass!