The Slow Slide into Shittiness

By now in your career you've probably been employed by, hired, partnered with, or competed against a company that was bought out by another company.

Think about what they were like. Roll it around on your tongue.

If you had any experience with that acquired company prior to its acquisition, no matter what your role was at the time and no matter whether that company employed you or was one of your vendors, partners, etc., chances are that you either worked for or with or against them because they were a pretty well-run company, with something that, if pressed, you might even say you really liked about them.

Until...

They were bought up or out by another (usually larger, often older, certainly more bottom-line-focused) company and run right into the ground.

It might have taken awhile, but the first signs appeared early - layoffs, management changes, mass defections, and release dates for new products and/or services either pushed back (often more than once) or shelved, with the PR folks spinning an endless cloud of vague language to try and downplay the fact that the company you liked better was now circling the drain.

The reason for this is because almost all acquisitions take place in order to grow the buyer's market share. They completely ignore what made the target company attractive enough to become a target in the first place: Customers. Loyal Customers.

When you buy a company, unless it's carved out in the legalese as a sop to the original owner(s), you get the whole thing: IP, products, employees, property, documentation, goodwill, history, and on and on. But if you only walk away with their Customer list (perhaps chopping up the rest to sell down-market) and somehow believe that those Customers are now yours, you haven't been paying attention to corporate acquisitions over the past century or so.

Something about the acquired company appealed to those Customers. It might have been their products, or how great their rep was, or their lower cost, ease of use, simple terms, terrific service, culture, inclusiveness, processes, or a hundred other things. Or (most often) a mash-up of all of those things.

The company doing the buying typically has a culture that is focused on acquisition. That's how they got so big in the first place. But as they acquire Customer lists and discard the rest, those Customers jump ship to the next company to come along that offers all of the things that were jettisoned in a race to instant gratification and the bottom line.

During due diligence, as you're looking over the books of the company that you want to acquire and figuring out how to make them part of you by forcing them to be you, with your people and methods and rules, why not do this:

• Have each of your department managers spend time with the managers and crews of the company that you are buying. Not an afternoon. A solid two weeks at least. Not to explain your company's way of doing things, but to specifically look for things that they do better than you do.
• Record everything you see and hear.
• Take all of that knowledge - that you are paying for, by the way, and now own - back to your own company. Map it against how you do things. Figure out how to adopt the things that they do better. Even if it means - horrors! - changing things in your company.
• Start doing things the new way, before the acquisition is complete, or it will never happen.
• Don't let everyone who isn't in sales leave. People are more often than not what made that company great - their knowledge, experience, ideas, attitudes, excitement. I understand that you can't and don't necessarily want to hire everyone. There are always redundancies. But what if their HR Manager or one of their line workers or IT people is better than one of yours? Trade up!

Most acquisitive companies tend to take a Darwinian view: We must be the better company, this line of thinking goes, because we're acquiring them. But this completely ignores the fact that acquisitions aren't why most companies exist. When you're a hammer, everything looks like a nail.

When you've paid all that money for another company, why leave so much of value on the table? Or, worse yet, there for the taking by a competitor with a wider view and a long-term vision?

Hey, it's your money; do what you want. I just (used to) work here.

Generational Businesses

You've got to love entrepreneurs. They're responsible for much of our Gross National Product, most of what makes America great (ie, new ideas) and almost all of the best jobs. They work ridiculous hours, often starve themselves to pay their employees in the early days, take crazy risks, fight fear with enthusiasm, and learn what they don't know by doing. Entrepreneurs are what makes the rest of the world wish they were us (that is, Americans). They may be eccentric (Steve Jobs used to soak his feet in the toilet), they may eventually become self-entitled (two words: Larry Ellison), they might be arrogant (pick your favorites here), but a certain amount of all of these ingredients are required to be the man or woman who says, "I have an idea and I'm going to make it real!"

But piss on their kids.

This isn't sour grapes. Most of us will never be founders, and that's okay. Many of us actually like being the folks who help make the vision happen; we just want someone slightly less mad than Captain Ahab to follow. It can be satisfying to be the person that figures out the 'how' without the pressure of having to come up with the 'what' or the sleepless nights spent pondering the 'why'. An entrepreneur's work is never done, but we get to go home and have lives.

But why do so many seem to mess it all up by leaving the business to their kids?

It's not that they walk into wealth (okay, maybe it is, a little). But if you work as hard as founders do and take the big risks, you should absolutely be comped for that, and making sure your kids have the best of everything that you can afford is the American Way. Send them to the best schools, buy them the best clothes, take them skiing in Whistler and snorkeling in Belize. Do it all. But never, ever leave them your business.

Let's start with the obvious: You understand your business because you had to know everything; there wasn't anybody else. You know how to handle employees, what makes an effective marketing campaign, how to negotiate with vendors, and how to keep Customers coming back.

Now let's look at your son/daughter: Their first job was probably working for you doing some kind of menial job. But they didn't technically report to you - thy reported to the head of whatever department handles shipping, cleanup, moving merchandise around or whatever. But they're your kid. How likely do you think that manager was to rip them a new one when they did something stupid that cost the company money? They probably didn't even tell you. And who else gets to set their own hours?

From day one, they are raised in an environment of resentment.

Now your kid gets older. You send them to college, they take a few classes, but nothing too stressful because they have a job waiting for them at home; their degree is window dressing. And they come back and you give them some kind of management job, their very first, and set them loose. And they suck, because they have no experience actually doing anything, because all of their lives you were the doer.

Trouble is, you don't notice, because everyone still comes to you, just like they always have. You don't know it, but your son or daughter is a joke, and nobody tells you, and they get used to making money - probably more money than anyone but you - for doing nothing very much. Until the day that they do something so monumentally dumb that it can't be brushed under the carpet.

And you fire them, right? Just like you would any manager that did that incredibly dumb thing. You fire them, because you realize that you should have put someone in that job with some experience under their belt, someone who'd worked for several other companies and could actually do what needed to be done. Right? Right?

"Of course not," you say. "This is my child, here. They are beautiful and perfect, even if they are a little dumb sometimes. They just made a mistake. I'll have a talk with them. It will be okay."

So you have a long talk, and they're really embarrassed, just like that time they cut their little sister's hair or put that baseball through the window, but you give them a couple of pointers, pat them on the back and, just so they know that you love them, you give them a promotion. (Tell me that you have not seen this happen.)

Time goes by. Things seem to be going okay. You're working just as hard as always, still making all the big decisions, but you're the president and that's what president means. Meanwhile, your kid has learned that the secret to keeping everyone happy is to let them do pretty much whatever they want, and to spend most of their day chatting with employees about things that have nothing to do with the business, or having meetings where there is a lot of conversation but no decisions.

Eventually, you get old. You spend a little less time at work because your son or daughter is now in a VP role of some kind, and they have to stretch their wings sometime. Everyone in the business seems happy, so things must be going well, right? Your business has become a Name, it's not as hard to fight for Customers as it used to be, and you stopped having to worry about making payroll years ago. And someday, probably much later than you promised your spouse, you retire, move to Costa Rica for part of the year, and your business is in the capable hands of the 2nd Generation, one or two or more of them, but of course they never fight like they did when they were kids, and things are exactly the way you dreamed they would be, with grandkids coming to visit you and afternoons spent fishing or antiquing or traveling with friends.

Until a new competitor with a better idea, better staff, or both moves in and eats your empire alive. Not right away, usually. There's time for your kids to hire expensive consultants to tell them what to do and to endlessly debate whether or not they should do it, and getting second opinions from still more consultants, trying to do what you always did because it always used to work, but the new guy does new stuff and, before you know it, Customers stop coming in the door. Then the layoffs begin, until finally there's no one left. Your kids have money, of course, and they made more on the sale of the business or the land, but you still remember the look on the faces of all of the employees on the day that you or your son or daughter told them when they would receive their last paychecks.

Not all 2nd Generation businesses die this way. Some last long enough to be passed along to the 3rd Generation - kids who want to do something other than work for their folks, who in fact work for someone else and build up some experience, and eventually realize that their parents are running a money machine into the ground. If they come into the business, they're all about numbers, and hire experienced managers to do most of the work. They're more like a ringmaster than a founder, with a keen eye on the books, and they make sure any children that they bring into the business work somewhere else first, just like they did, and walk in the door with ideas of their own.

So if you're an entrepreneur, rather than go through all of this, ask yourself a couple of questions (plus probably a few more), and act accordingly:

1. Did your kid(s) ever ask for your business, or is that your idea?
2. Did you ever ask them what they wanted to be when they grew up?
3. Can you get someone better for less money?

Kick Your Company Out of the Nest

I've talked about hiring friends & family, pocketing & knowledge retention, deciding whether your organization is a club or a business, generational businesses, and chain of command, all of which are difficult changes for the established, non-business-school-graduate. But the difficulty factor doubles if you're an entrepreneur, because of an added element: The business is your baby.

You started your business in your garage, spare room , or attic, but it really began as a dream. Your spouse and kids probably helped you, at first, and then maybe a friend or a neighbor, because you couldn't afford anyone else. As time went on, your growing infant organization ate up more and more of your time. Eventually, things got to the point that you slept only when you fell over, sweated the books (you're still sweating the books), never took a day off or a vacation, and made every sale yourself because there wasn't anyone else. And finally, after all of that work, you join the ranks of the less than 1 in 10: A start-up business that lasts for more than a year.

Year two, you maybe hire a high school kid or two to work part time. You miss your kids' school plays, concerts, and games because you have to work. You always have to work; you no longer even seriously think about doing anything else. But you start to see a little success, so you reinvest that and go to a trade show or a networking event where word of mouth grows. You eventually have enough money for your very first ad, which does nothing, but that's okay because you learned from it, and your next ad gets some attention and pretty soon, you can actually hire a couple of real employees and learn to sweat over payroll.

Another year or 2 or 3 go by, and you have a full-time work force. Each person wears 10 hats because there are no hat stands. Everyone works late (but never quite as late as you); no one claims overtime. You have shared your dream and these people believe it, fearless because they don't know any better, and clueless enough to do everything wrong over and over again until they eventually find a method that works.

And now, 5 or 6 years in, you can finally afford to hire someone who can actually tell you what you're doing wrong: Your very first consultant. It's almost like a first kiss, what we used to call 1st base, in that it promises bigger and better things to come. And then, day of days, you hire your very first employee who has actually done this before, and maybe even many times before, which is the entrepreneur's equivalent to 2nd base, and then another and another pro join up, 3rd base and now the bases are loaded with people who know what they're doing, and...

... you jump out of the back seat and say, "Take me home!"

I understand. Like any new, extremely emotional experience, letting your company go is like sending your son or daughter off to prom or spring break. You had control, and now a bunch of pencil pushers are trying to tell you how to run your own company. Things used to be so much easier, back when you didn't have to get approval or document or assess readiness. And the thing that sends you over the edge is this: The very first dip in revenue.

Panic! Someone is groping your child! All of these people are going to kill your kid!

Stop. STOP! Take a deep breath. You hired these people because they know what they're doing, right? And they've managed not to destroy previous employers. And you agreed that, to make this whole thing work, you have to get the hell out of the way and let them do their jobs. And you know that - you know it - but you don't feel it.

This is the glass ceiling where the 10% who made it through year 1 fail: They can't let go. And while their business doesn't die right away, they begin to lose people by the truckload, because they see it even if you can't: The company has stopped growing because you are standing in the way. That's right: You have become an obstacle for your company to overcome, and there are only 2 ways that things can go from here: You can fight to regain control over your teenage company and lose its respect, loyalty, and love, or you can do what all good parents do:

Trust that you brought it up right, and finally take that vacation you promised your spouse so long ago that you can't even recall doing it. Tell no one where you go. Take no phone. Watch no news. Stay gone at least a week, but preferably a month. If your business really can't live without you that long, you've already failed. But when it does, it will thrive and blossom into a strong, functional adult, stepping right out of its diapers and into its first acquisition, merger, or IPO.

And isn't that what every corporate parent really dreams of?

Databases for Dummies

Have you ever noticed that database people are fussy? Really, really fussy. (It's okay for me to say this, first because it's true, second because I am one.) It's because we have to be, because literally everyone else in the company constantly tries to mess everything up. Our lives are spent rolling our eyes and fixing problems that cost you a tremendous amount of money and lost man-hours, and that never should have happened in the first place.

If you don't have a database of your Customers and prospects, it's time to create one. If you do have one, it's time to clean it. The first will help you make money; the second will help you save money.

A database, for the purpose of today's topic, is a place to save Customer information. There are 5 main must-do's when creating a database:

• Only have one database, ever.
• Figure out in advance what information you want to save in your database, now and in the future.
• Create clear, meaningful names for each database field, with no redundancy.
• Decide which data fields are mandatory and what constitutes acceptable data for each field.
• Require that everyone use the database, always (especially salespeople).

And there are 2 must not's:

• Never, ever use Excel in place of a real database.
• Never, ever use Act in place of a real database.

The reason that you only want one database is to avoid pocketing and the cost & aggravation of having to merge dozens of databases later (trust me; I used to do this for a living). You have to figure out in advance exactly what information you want your database to include, now and in the future, because of a triusm that applies to a lot of things in business:

Plan carefully now, or regret expensively after.

You always want your database fields to have real-world names, without cryptic acronyms. Otherwise, you are just begging for people to put the wrong info in the wrong fields, means turns your database into worthless crap. Never use the same field more than once. You've already asked for the info; why do you need it twice? Some fields can be optional, like the Customer's birth date, but you should set most so that they have to be filled in. What good is a Customer name without an address, phone number, and email address?

Also, don't allow anyone who uses the database to use abbreviations, or I guarantee that you will have duplicate records. If your Customer's name is 'David', use 'David' and not 'Dave'. If he likes to be called 'Dave', put that in a 'Nickname' or 'Goes By' field. Otherwise, when you buy lead lists or someone else enters him under the other name, you'll have duplicate records. Also, always spell out street names, city names, and country names. (I once had to work with a database where a single city name appeared as 6 different abbreviations, plus spelled out correctly, which meant the company was spending money to send the same mailer to each Customer 7 times. Now imagine if the street names and county names were sometimes abbreviated, too.)

If you already have a database, now you know why you need to get someone to clean it. The sooner the better.

If your organization has salespeople, I'm going to suggest that you create a new rule, if you haven't already: Any sale that takes place before a Customer is entered into the database belongs to the company. No exceptions, period. This will ensure that every Prospect is entered into the database, because there are salespeople who have a bad habit of sandbagging leads, in the mistaken impression that your Customers 'belong' to them.

Customers belong to the company. Period.

Not only will this create a more flexible corporate culture, it will also make things much easier when you have to reassign a Customer to another salesperson or split a territory.

And, while everyone who touches Customers should have access to your database, only Sales, Customer Service, Accounting, and Tech Support should be able to enter or change data. Not only that: any good database should also record who entered or changed that data, and when.

Finally, why not use Excel or Act?

Excel is not a database; it's a spreadsheet (duh). Microsoft puts all kinds of code in each field that you can't see to make it work well as a spreadsheet. Unfortunately, this code makes it difficult to do anything with the data if you try to use it for anything else, and a costly conversion if you have to convert it to a true database format when you eventually move up to SQL or some other real database, and someone has to manually clean out all that gunk (and your pockets, while they're at it; remember the Leaky Roof rule).

Act, while easy to use and great for a self-employed, standalone salesperson, does not share data well across a network - the whole point of having a database.

One Trick Ponies

When was the last time you used a standalone camera? I don't mean your phone or PC or tablet - I mean a camera that only takes pictures. With film. A still image camera.

In 1976, Kodak owned 90% of the film market. It's name was so much a part of our culture that the phrase "Kodak moment" became synonymous with photography. Everyone knew what a "Kodak moment" was. The company was founded in 1889, so they understood how to successfully manage a profitable business. In fact, for decades, Kodak was considered a must-have blue chip stock that no portfolio was complete without. Yet 2007 was the last year that Kodak turned a profit. On 1/19/12, Kodak finally filed for bankruptcy, and no longer makes cameras, digital photo frames, or pocket video cameras.

Lest you think that Kodak didn't try to change with the times, the company actually invented the first digital camera in 1975, and sued to protect its patents. And, even if they had dived into digital cameras full throttle and right from the start, bear in mind that, as I write these words, you can't give digital cameras away.

The real problem wasn't that Kodak changed too slowly. The problem was and is that Kodak is a one-trick pony in a world that demands that gasoline - as "old economy" a product as you can get - serves more than one function (cleaning your engine while powering your vehicle). We live in a time when even toilet paper manufacturers better come up with a few more ideas if they don't want to go down the drain.

The days of the single purpose product are over. Do you really believe that books will still be printed on paper 20 years from now? (Maybe 10.) Cars are another product ripe for a paradigm shift; even the manufacturers ran out of anything new to say decades ago. If it doesn't fly or teleport, a car is essentially a car, and sliding brand loyalties show that Customers know that. (Tupperware, I'm talking to you, too.) Even multipurpose products like Blackberries are falling by the wayside because they aren't multipurpose or intuitive enough.

It's no longer enough to simply buy a smaller, sexier company on the edge of technology to drive your share value. Shareholders understand that it's a ploy, and that you're only going to ignore the acquisition to death while you conduct business in the same old legacy organization way. Even the old mantra "Adopt, adapt, improve," will only keep your doors open for so long.

Spread out to reduce risk caused by downturns in one segment of the economy. That includes spreading out so that you cover more Customer demographics. Don't underfund or overfocus on particular segments, divisions, or departments. And, perhaps most important, don't share revenue.

To be successful, every segment must support itself from day one.

Give each segment the autonomy to make its own decisions and build its own infrastructure. All you should care about is whether or not the segment is profitable. Once you have one or two that are, listen and watch how they do things to see if their way of doing business can be applied to less successful segments. And do your best to make sure that the people who run each segment are new people, not your cronies, and that they come from outside your core industry. (Why in the world would you want to create a line of unsuccessful clones?)

Sooner or later, every market and every product goes away.

Making your products perform multiple functions that increase Customer convenience and that don't require an owners manual because they are instinctive to use as a hammer will increase your company's lifespan, but they won't make you immortal. To do that, you have to keep creating, finding, and funding wildly creative answers to problems that consumers don't even know they have.

And just so you don't think that this concept only applies to the GM's of the world, even if you build funky wooden shelves that you sell at art fairs, how many other out-of-work guys do you think go into that business every year, or women who think they can make jewelry for a living, or couples who think they can make a go of a restaurant? Almost all of these businesses fail. They have no POD's. They are all one trick ponies. But how about some earrings with built-in wireless ear buds or a bluetooth headset, a shelf with a built-in iPad charger/stand you can watch a movie while cooking, or a restaurant that has treadmills instead of chairs?

Take a look at Kickstarter.com to see what John Doe thinks is worth funding. There's a lot of noise, but there are some gems there (not least the whole idea of crowdsourcing venture capitalism). Many of the ideas are already out there.

The secret is not to be first. The secret is to be best.

Mothers & Daughters, Fathers & Sons

We've talked about not hiring (or being hired by) friends and family, yet one of the most common small business types in the U.S. is the family business. Obviously, for many reasons, if you can pass a business on to your children, it can prove to be a good move - provided that it's done right. By now, you've probably seen it done wrong at least once. (And there's no such things as doing it a little bit wrong, is there? Every example that I can think of from my own experience has been spectacularly bad. )

Here are some tips on doing it right. Write these down and chant them for the next month or so:

• First, make sure that your son or daughter wants to take over the business. If they don't, don't push it. Remember: They are not you. Starting this business was your dream. They have dreams of their own.
• Start them early and start them low. I have made it a practice to sit with the Customer Service team for at least a couple of weeks when taking on a new position. Everything, good or bad, eventually flows through Customer Service, and they often know more about what's really happening in an organization than anyone else.
• If you can, rotate them through every department and job function. You learned the business by doing all of these jobs yourself, before you could afford someone else to do them. There is no better way for your son or daughter to learn them than hands on. Not only that: By actually getting their hands dirty, they will earn street cred with employees and open up communication pathways that have long been closed to you.
• Just because you would perform a task a particular way doesn't make their way of doing it the wrong way. From what I've seen, this is the hardest skill for entrepreneurs to master: Shutting up.
• Your child is going to make mistakes. Let them. If they do everything correctly, how will they ever know what to do when things go wrong? You made mistakes. Let them make their own mistakes, too, and profit by the lessons they learn from them.
• Don't call them by demeaning names in front of employees. You know what? Scratch that. Don't call them by demeaning names at all. They are adults, they are employees, they will be the boss one day. Treat them with the same respect that you expect. I've never been "Davy". Would you like for them to call you "Old Fart" or "Evil Stepmother" all the time?
• Let go. Don't hang on forever. Agree on a firm date that you will either retire or expect them to knife you, then stick to it. As long as you are around, employees will still go to you, no matter what title you have or what title you give your son or daughter.
• Never, ever, ever countermand anything that your son or daughter says, ever. Even if it is wrong. Employees cannot for one moment think that they can go to you to get a reversal on a decision, or they will do it all the time - and vice versa. How would you like it if your spouse did that with every rule you set for your children? If you want your children to run the business, you have to be able to let go. If you can't, your son or daughter has to find something else to do for a living.
• Make certain that your son or daughter takes (and passes) classes that are relevant to running a business, including as many management classes as possible. Leading people is a science; it can be learned. Working for you will only expose them to what you know, much of which may be out of date. Let them be exposed to other ideas, and your company will only benefit from the result. 
• The first time your son or daughter has to manage a team, after they have had management classes, make certain that they have a mentor. Most first-time management positions do not include this. As a result, many employees who had excellent management potential floundered in their first management role. The mentor doesn't have to be at another company (although that helps), but they absolutely can't be you. The temptation to tell them what to do is simply too strong. LinkedIn and other networking groups are an excellent place to find mentors. I know that you want to impart all that you have learned, but the time to do that is before they became a manager.
• Be supportive. You'd think this one would be obvious, but it's not. I have been in management positions where the original owner asked me to lie to their child about what they were doing because they knew that their child - who was the CEO (at least in name) - would disagree with it. Holy King Lear!

Shaking the Tree

It is always a good idea to change territories, customers, etc. Why?

1. Initially, to even out the number and size of the accounts that each rep is responsible for. Everyone deserves an equal opportunity. And remember – the sign of a fair settlement is that neither party is entirely happy with the results.
2. Comfort is the enemy of a good sales team. It inevitably leads to sloth. Because of this, it’s always a good idea to shake things up, and on a regular basis. It forces you to snap out of comfort zones, to grow, and to really think again. Change should be constant – an endless refinement of the engine.
3. If your reps have physical territories or repeat customers, over time there is a tendency to offer discounts before the customer asks for them – a variation of Helsinki Syndrome. The rep begins to identify more with their long-term customers than with their organization, shaving margin to “stay friends”. Shrinking margins – especially self-inflicted shrinkage – are death.

If you happen to run a call center (sales, service, or support), once a quarter or so, make everyone change desks. You can either randomly assign the new seating or (my preference) choose who sits next to who based on each employee's development stage. Here's the reasoning:

• You have one rep who is consistently the best on the phone. Why not put everyone on the team next to them, one at a time, so that a little of their competence rubs off? 
• Call center reps who sit next to each other too long have a tendency to get chatty. Don't get me wrong - you want some chatter, because congruity is part of your culture - but not to the point that it gets in the way of work. 
• Every rep does things slightly different, and every rep has different areas of expertise. By exposing your reps to everyone else on the team, you help to 'homogenize' the call process and prevent knowledge 'pocketing'. 
• Moving reps around helps to prevent the development of cliques (remember those from high school? remember how badly they sucked?), which inevitably lead to conflict. 
• Anyone who complains about sitting under an air vent, not sitting next to a window, sitting next to someone who is a loud talker, sitting in the cube that smells funny, etc., you officially get an equal shot at every seat in the house. For awhile. 
• Excitement. Call center life is dull, dull, dull. Anything different is good. 
• Bonus: When people change desks, they clean. Everything. That means that the rep who's been using that outdated price list that's been up on their cube wall so long that it's grown a beard throws it away and asks to copy someone else's updated price list. It also means that people re-evaluate what's really important, because who wants to move junk? Ditto those old salad dressing pouches and dusty memos.

Pocketing & Knowledge Retention

Two of the most frequent communication failures for organizations are pocketing and knowledge retention.

Pocketing occurs when an employee - anyone from an entry level hire to the CEO - learns something new and does not share the information. This is most frequently unintentional. In many cases, they may assume that what they have just learned is something that everyone else already knows. Even if they do share this knowledge, it is unlikely to travel beyond their immediate working group or hierarchical strata. As a result, their knowledge exists in a pocket. Unfortunately, oftentimes this knowledge is something that would have helped the organization make or save more money.

Knowledge retention works like this: You spend a great deal of time, money, and effort training new hires. The longer they stay, the more they learn on their own. Because of pocketing, when layoffs occur or when a knowledgeable employee leaves the organization for other reasons, their accumulated knowledge goes with them. The loss of this information often costs the organization money, if for no other reason than that anyone new is likely to make many mistakes learning the same lessons on their own. Leaving aside the cost of having to train someone new from scratch, why in the world would you want to keep reinventing the wheel?

There are two solutions, and both are necessary: First, run your organization as lean as you possibly can - especially mid-level and senior management staff, where costs and knowledge tend to pool. Second, invest in a shared knowledge base.

Originally, knowledge bases were the province of technical support. Today, any organization without one operates at a serious deficit. Whether a full-blown wiki, intranet, or something as simple as a collection of Google Docs, encourage everyone to contribute (and I do mean everyone), and make sure that everyone has access to view everything (but limit edit rights to each document's author or work group). Make it a living, breathing resource, with someone in charge of keeping it organized, up to date, and eliminating redundancies.

Think of it this way: What would happen to your organization if you were hit by a bus tomorrow? What if it was your head of sales, marketing, product development, or a key member of your sales, customer service, or technical staff? The amount of information that goes into your knowledge base should be complete enough that if this actually happened, your replacement (or theirs) could walk in tomorrow and immediately take over, with minimal impact on the organization.