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UFB Newsletter Issue #044 Innovation
September 15, 2005

"The key to family business success"
ISSN 15465640

A free monthly e-zine with articles and tips from Family Business Experts who understand family values and business systems.

September 15, 2005 Issue #044 Family Business Experts

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In This Issue...

1. Our Managing Director Announces -

2. Business first family...Family first business

Innovation in Familly Businesses

3. Legacy through Leadership

LP18. Developing Associates

4. Around the Family Business Experts web sites

1. Our Managing Director Announces -

Still dodging hurricanes, some travel, and recently we've been busy helping locally with folks in our areas who have been forced from their homes and communities by Katrina.

Our hearts and thoughts go out to all of the hurricane Katrina victims in Alabama, Mississippi and Louisiana - What a mess.

The problems in New Orleans added yet another complication - the long-term evacuation. In previous hurricanes, while some of the business structures were destroyed, many were able to make some temporary repairs and were back up and operational in a relatively short period of time.

Can you imagine having your work force living in shelters spread across the country? How many may never come back to the business where they worked?

Can you imagine not being able to stay in touch with customers and vendors for several weeks/months? How many customers will have found other suppliers of products and services?

Can you imagine having your entire inventories of raw materials and finished goods - all destroyed?

Can you imagine losing all your dies and machine tools - much less not having the machines themselves?

We urge all of our readers to revisit and update their Risk Management Plans, should a catastrophic event occur to your business. You can read more about Risk Management strategies on our web site.

On behalf of all of my colleagues at the Family Business Institute & our Internet organization Family Business Experts - to the families and businesses dealing with Katrina - Godspeed.

Caribbean Shipping Services became an Inc. Magazine fastest-growing inner city business by discovering and servicing a niche. Learn how keeping an eye on the future is a secret to their success.

Caribbean Shipping Services

We continue with the Leadership Practices series, since these practices are the foundation for the processes that must be in place in order to achieve success.

Reminder: We've developed a couple of quick diagnostic assessments to help you. They are both fr*ee [at least for a while] and we try to deliver 48 hour turnaround of our analysis. Try them!

The Holonomic Top Down Assessment asks you about a combination of the 12 Main Enabling Processes that an effective organization has to have operating in order to achieve the 6 Desired Organizational Characteristics of effective organizations. Where your assessment indicates one or more of these are not working in your organization, we'll feed back suggestions as to the underlying Leadership Practices that might not be working.

Take our fr*ee Holonomic Top Down Assessment to see what underlying practices might be at fault and causing problem symptoms in your family business .

Diagnosing from the other direction - Bottom-Up - we ask you to identify which of 29 Leadership Practices aren't present or working. From that, we point you to Enabling Processes and thus Desired Characteristics that probably aren't functioning.

Take our fr*ee assessment on the 29 Leadership Practices to see how they affect your family business.

Whether to contribute, challenge (or hopefully even praise) our newsletter, I encourage you to contact me directly Don, or our editor David.
Enjoy, and here's wishing you, your family, your clients... much success and a relaxing and memorable Memorial Day!

Don Schwerzler, Managing Director Family Business Experts

2. Business first family...Family first business:

Innovation in Family Businesses

Innovation is a curious element of many family businesses. Very often innovation was the driving force behind the inception of the business. The founder of the family businesses often identified a new market, a new manufacturing process, a new product. Based on those kinds of insights, the family business was launched.

Our experience is that these entrepreneurial business builders tend to be inventors or men and woman who liked to "tinker" - the better term might be innovators.

But one of the recurring criticisms of family-owned businesses is that they are slow to change - victims of the philosophy "if it ain't broke, don't fix it". They insulate their business from new innovations in markets, products, technology and human assets.

When we begin our work with family businesses, one aspect of the operational assessment is to study the number and types of new customers that are being targeted and acquired and the number and types of customers who have left.

One of the issues we are hoping to illuminate is the cost of new customer acquisition. And of course the flip side of that issue - What does the company need to do to keep from losing customers.

When we are brainstorming that issue, the usual responses are things like improved customer service, including more "value added" opportunities, and reducing prices.

Each of these approaches can produce new innovations and ideas for improvement.

I am always fascinated that when I ask about their customers and the products and services provided by our clients, they generally talk about why the customer uses their products or services - but rarely do they know understand "how" the customer uses their services or products.

I think knowing the "how" is a critical piece of intelligence that can create huge innovative insights and that results in significant increases in customer retention.

The point I am working towards is that innovation is a strategy that can be an internal change; but it can also be "outside of the box" when one learns "how" customers use products and services.

The same type of external innovation is to communicate "how" a purchased product is produced. By exploring and understanding with vendors and suppliers 'How" their products are produced, you may be able to take advantage if innovations made to their operations offer better options for you.

One example of this type of innovation occurred with a family business client in the textile business. Their customers sent fabrics to them in material handling containers. The first step when our client received the material was to transfer it to a material handling container that fit their operation - it was an expensive and labor intensive operation. After the owner and I visited the customer, we realized that if we could provide his material handling containers to the customer, we would be able to eliminate a very expensive step in the operation - plus it improved the turnaround time our client was able to offer to his customer - a win-win situation!

So, whether it's to gain advantage from their changes or adapt to them, we recommend to our clients that they routinely visit customers and suppliers.

And by the way, I learned years back from Roberto Goizueta, former CEO at Coca-Cola, an observation that underscores the importance of innovation. He said, "If it ain't broke - break it". That makes sense to me!

Our Tips and Recommendations

Easy-to-understand wealth transfer planning guide for entrepreneurs, business owners and members of a family business

A proven holistic model for financial, tax and legal advisors to expand their family business practice

Becoming a Wealth Transfer Specialist

3. Legacy through Leadership

There are 29 Leadership Practices [LP] that are really the foundation upon which 12 holonomic or enabling processes[HP] are built, and which, in turn, produce 6 desired organizational characteristics [DOC]. We'll look at each in this section.

LP18. Developing Associates

Developing Associates is the administrative process that encourages Associates to go beyond specific job requirements, to exhibit initiative, and to actively prepare themselves for skills and knowledge beyond current job specifications. Additionally, this process ensures that Associates are involved in making plans at their level within the organization, their knowledge, the strategic direction, and their roles in implementing the plans.

Take our fr*ee assessment on the 29 Leadership Practices...

4. Around the Family Business Experts web sites

Search the entire content site
in two different ways

1. A search engine powered by ATOMZ has indexed all the pages on the site and will link you to those relating to any search term you enter.

2. A 'Table of contents' listing that will link you directly to any page / article you select. Use the Site Map Navigation Button from any major page on the site.

Check out our new profile:

Caribbean Shipping Services.

Don't forget that you can complete our Family Business Profile Questionnaire form to have your family business or client profiled.

Background information, testimonials to our service and understanding, and answers to FAQ's [Frequently Asked Questions]. Family Business Experts

There are many articles accessible from this page on the left side navigation bar.

Read the review of The Practitioner's Guide for Organizing an Organization and click on its ASK THE EXPERT link to contact Dr. Byrne who is an experienced user of the diagnostic tools.

Take our fr*ee assessment on the 29 Leadership Practices to see how they affect your family business.

Take our fr*ee Holonomic Top Down Assessment to see what underlying practices might be at fault and causing problem symptoms in your family business .

And remember about our convenient new online billing with 100% assurance! Another step in our process of starting online business. Secure online payment

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Contact Don Schwerzler
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