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Got conflict? Build a high performing team & more productive business.
December 01, 2008
Rosemary Richardson, Associate, Scion Advisors
The Greeks did more than pass on their art of improved viticulture. They gave us models for critical thinking; skills vital to success in the crowded, competitive, and global wine business. How well your team works together, engages in problem solving and is able to think critically - become fundamental drivers of business profitability.
Business advisors and coaches are called on more and more to help winery owners shape high performing teams capable of building businesses that are worth more. This article provides the core concepts behind conflict and brings these to life through two case studies. These illustrate how wine business owners can manage conflict and deliver higher productivity.
Family businesses in transition – fertile landscape for Conflict?
It is possible and highly probable, to have organization conflict at each growth stage of your business: whether you are moving from start up to formalization or moving to maturity (see article, Stages of family businesses). In start-up mode, roles are not well defined; everyone is in each other’s sandbox, without being aware that they are.
A business in formalization or expansion mode - a period of learning new skills and increased financial management demands, is ripe for conflict. This is when family members, employees and strategic relationships need to start debating: what market to pursue, how to organize, when decisions should be made and who should make them.
A mature business can face conflict when multiple owners are contemplating a potential exit strategy through sale. For this to happen successfully the ownership group needs to get aligned against a common set of expectations and goals. They need to agree on what it will take to get the business ready for sale to a targeted buyer profile. Conflict will also tend to show up between organizations or factions who are competing for resources.
Wrought with uncertainty, risk and emotion, each transition - from one business stage to another, is fertile ground for conflict to flourish.
How to navigate transition and resolve Conflict.
What differentiates successful transition from failure? Winning executives know they have to go back to basics: define success, develop clear strategy, proactively build plans and structures, and resolve conflict head on. These types of leaders produce stronger results faster and build team confidence in their ability to manage through complex times. Their businesses tend to experience less turnover in key staff. The concept is logical: everyone wants to work with A-players.
The following cases studies depict how two winery industry leaders, facing different types of transitions, managed through conflict and moved on successfully to build stronger businesses. (see article, What type of transition are you facing?)
Case Study #1. Safe open dialogue leads to accelerated growth in cash flow
One of our North Coast clients experienced rapid and uncontrolled growth that produced conflict among several business partners. The partners were coached to communicate through a strategic planning process which allowed them to reach mutual agreement on business goals, resolving their conflict.
According to Scion partner, Deborah Steinthal, “Our approach to conflict management helped these business partners break through because we made it safe for open dialogue by discussing “topics leading to mutual gain.” This client developed a code of conduct that allowed them to communicate, build trust and move forward together.
Scion worked with the partners to stabilize decision making by launching a board of directors with outside participants. This new organization structure, with stronger leadership in place, supported the winery’s turnaround. The result was 5x growth in cash flow within 3 years.
Coaching trade secrets: All involved partners were interviewed individually. This uncovered that each had different issues and yet, similar business goals and needs. An assessment from an outside perspective is valuable in helping business partners realign goals and vision.
This simple step sometimes is enough to give a team of business leaders the courage and motivation to commit the time and resources to rebuilding a business and key relationships. Outside objective criteria allows business leaders to move beyond their separate positions and drive decisions that are good for the business.
Case Study #2. Executive coaching enables young leader to grow profits
Another North Coast winery client became a next generation owner - a major role transition that cast his dad to the sidelines. This winery leader was coached while he developed what he calls “gray hair” around the business. Our assessment of his business and market opportunity gave him insights that allowed him to craft a new strategy for his winery and build a new, skilled team to execute that strategy. He realized that a majority of his old management team no longer fit his needs for the future.
Scion partnered with this leader to strengthen his leadership approach, helping him build a strategic plan, weed out his old team and then hire and develop his new team. To take the emotions out of key decisions, he expanded his problem solving skills by using objective data from our assessments. He empowered his new team to move forward with cascading goals and more accountability for results.
The health of his business was accelerated through coaching on how to execute through people, rather than doing the work himself. The result was a 70% growth in profits in 4 years.
Coaching trade secrets: In the face of the unknown, every successful leader experiences self-doubt and feelings of vulnerability, especially when brokering tough decisions involving people who have been loyal to your family business.
Building a trusting relationship with your business coach is paramount to your ability to break through hurdles. Once you share things never before revealed, you actually achieve a new level of introspection and awareness about your options. This trusting relationship can enable you to try new things with more confidence, such as learning how to realign a team more successfully.
What next?
There is a cost to conflict that shows up in your business results. Tense relationships have a negative impact on employee motivation and commitment, hinder performance and your ability to meet financial goals. Sometimes, an outside, objective informed perspective can shed a new light on a complex issue, reframe possible solutions, provide new tools and speed up conflict resolution.
Through working with business coaches and advisors, successful wine business leaders are learning new critical thinking skills and tools that help them confront conflict and vault ahead of competitors in a convoluted wine marketplace. This is where a business advisory firm like Scion Advisors can help. We have an established track record with over 100 companies and deep knowledge of the wine industry.
Copyright 2008 Scion Advisors DBA. All rights reserved.
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