Many business owners say that their people are their most valuable asset. Without family members, business partners, and good employees possessing a range of talents, the business cannot grow or operate at scale. Baseball teams need pitchers and outfielders as well as those who can score.

An agriculture business might need a person adept at mechanics or technology, a family member who understands accounting or an owner who excels at building relationships. Being business partners or hiring good people with diverse skills -- and taking care of them -- allows you to leverage your strengths, knowledge and talents to grow the organization.

If you switch gears and think about finances, you know that a portfolio is an array of assets or investments. Financial advisers often suggest that a mixture of assets reduces the risk and lowers the volatility that comes with concentration in a particular asset class. Diversity allows a portfolio to weather storms while still participating in more positive market conditions. When you review your financial portfolio, you often look for gaps in which you have too much or too little of a particular asset.

Now put the two concepts together: If people are an asset in your family business, how diversified is your talent pool? How complimentary are the strengths of your employees and partners? Do you have the range of skills and perspectives necessary to take your business to the next level? Do you have a deep bench?

A talent portfolio review is especially helpful when considering succession. Understanding the strengths of the retiring generation and lining them up against the succeeding partners' attributes provides a more structured approach to the discussion, reinforcing that you are on the right track in your transition process, or suggesting that you need to cultivate some additional skills.

Just like financial investment categories (small cap, large cap, value, growth, etc.), there are several categories to consider as you look across the people in your business. Technical knowledge is important as you consider the science of agriculture and animal husbandry. Leadership and supervisory skills are critical to the effectiveness of your staff. Relationship skills are necessary for teamwork, customer and family interaction. Mechanical skills keep things in working order. Financial understanding facilitates managing capital. Marketing and government policy knowledge can provide for better risk management. Organizational skills allow you to keep all of the business activities in motion.

As you consider those with whom you work, there are several ways to use the information gleaned from a talent portfolio review. One is to understand whether you have adequate depth or certain gaps in a particular area. For example, in some operations with which I'm familiar, the financial knowledge is either not deep enough, or too concentrated in one person, which ultimately risks business continuity. As farms scale up in size, they are hiring part-time CPAs or sharing chief financial officers to improve the quality of their financial reports for decisions like land and equipment purchases, affordable cash rents or better terms on their bank loans.

Another family business client is working to spread landowner relationships to other family members with good people skills. Several organizations I know are working to improve the supervisory skills of family members to lessen the risk and costs of losing good staff. As a result of this kind of review, you will likely improve your cross-training efforts and sharpen your focus in the hiring process.

Another way to use a talent portfolio review is to understand which strengths need to be leveraged. (Focusing primarily on a person's weaknesses, in my opinion, only improves your odds of achieving mediocrity.)

In one instance, a family member with strong organizational skills is being considered for a more strategic management role. Yet another family business is looking at the negotiating savvy of one partner and is considering how they might focus more time on "doing deals" for the benefit of the whole business instead of just their division. Talking about people's strengths also builds confidence and increases motivation in your team members.

The discussion about talent is often a straightforward discussion in larger and non-family businesses, but in the family enterprise it can generate discomfort due to the family relationships, the awkward process of "assessing" a loved one, the attachment to historical roles and the emotional ties to the business. Adaptation, however, requires that skills and strengths be constantly evaluated and developed to move the business forward. Evaluating your talent needs for the future and reviewing your current assets will offer ideas and insights you can use to improve your organization.

EDITOR'S NOTE: Lance Woodbury works as a consultant to family owned and closely held businesses in Garden City, Kan., with a special emphasis on business planning, mediation and conflict resolution. He also maintains an interest in his family's western Kansas ranch. E-mail comments or suggestions for this column to lance@lancewoodbury.com.

(MZT/AG)

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