In a book called Necessary Endings by Dr. Henry Cloud published by HarperCollins, NY, 2010, the author discusses how we can change our perspective and go past the necessary endings.

In this column, the pruning will be discussed in greater detail. Too properly prune, you need to see what is the desired outcome? Why are you cutting the limbs of the tree? What are you hoping to see in a few months? Those questions can be asked of anything, including in your business. At times it is necessary and desirable to focus on the future and ask what do you expect to see? If you are managing people, what levels of productivity do you want them to accomplish? Sometimes the answer is in training; sometimes the answer is an ending because the person does not accomplish the goal you need them to.

Sometimes the desired outcome is to cut a business division; sometimes the division should be sold. Keeping a division which does not fit into your vision means you are putting people and resources to waste in hope of turning it around. At what stage should it be let go? There are few easy answers because someone has an attachment to it – both the people and who runs it and who has run it.

In the book there is a wonderful story about a health care provider company called Welch Allyn which is a family owned company. In the doctor’s office you may have used some of their products. The company has a variety of lines and most were profitable. The business was good – sustained growth and profits, strong and stable market share, brand recognition and industry standing, satisfied employees and loyal and well-cared customer base. It was a company that changed technology but was generally a steady as she goes business. The new CEO was driven by something else, what happens when companies do not see a necessary ending? The business is good, why change or innovate to something else? The new CEO wanted the company to change operating systems because all their products were running on different operating systems. What if customers could run their products on one operating system it would allow them to have better communications. For the company, the single operating system could mean the company was setting the industry standard which was one their strengths. The new CEO Julie Shimer needed to sell the strategy to the Board and sell the new vision of reality. In Ms. Shimer’s reality the medical care system was going to change. The future was doctors and nurses would have to do more with fewer resources, with sicker patients who needed recommendations faster. A better solution to the clients problems was to do use the Welch Allyn devices seamlessly or one operating system.

The 3 steps in the process are:

1. Does a gut check to see how you feel about pruning in general and identify any potential intellectual or emotional resistance?
2. Make the concept of endings a natural occurrence and a normal part of business and life, so you expect and look for them instead of seeing them as a problem.
3. Identify the internal maps that keep you from executing necessary endings.

Linking to dividend paying stocks, companies are run by people and we have attachments as well as we see or do not see reality. There are numerous examples of companies who were earning good profits however their world changed very rapidly as they tried to hold on to their market share. One of the most famous is Kodak pictures, but there are many many others. When you own a dividend paying stocks, one of the reasons you own it because it makes profits and has a large market share. The key then is to ask is it sustainable as the economy changes? What is their vision and does it match your reality?

There are more questions than answers, till the next time – to raising questions