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Defend Your Property (by Tom McKaskill)

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					                     Defend Your Property (by Tom McKaskill)
Knowing your weak spots is the first step in preventing your business assets from walking
                                       out the door.

Few companies like the disruption that happens when a key executive or employee
leaves, but they really get upset when that person undermines the business by using
company knowledge to compete against them. It is not just knowledge that can walk
out the door; staff, business ideas and prospective customers often follow. Most
companies fail to take adequate steps to protect their intellectual capital or intellectual
property.


The value in your business is not simply tied up in things you can touch or that are listed in
the balance sheet. For most companies, the business capability is tied up in the
knowledge that staff have. Your competitive advantage is more likely to be found in
your business processes than in your equipment, and the long-term sustainability of the
business is most often in your relationships with your best customers and your main
suppliers. Just think how sensitive your business might be to the loss of some important
individuals, customers or suppliers. Could your business survive the disruption of the loss of
your main customer or supplier? Understanding where your vulnerability lies is the first step
in developing a plan to protect the value in your business.


Few employees understand the legal relationship between employer and employee,
and have no appreciation of their legal standing if they were to leave with customer lists,
process manuals or knowledge of partly developed business initiatives. As an employer,
you have the legal right to protect confidential information and seek damages if it has
been used in a way that disrupts or harms your business. Your first line of protection should
be to ensure that employees fully understand these rights and obligations and the
actions you could take if there is a clear violation. A written assignment of intellectual
property for all employees also ensures that you retain the right to exploit innovations that
you have paid for. It also informs them of their obligation to disclose to you relevant
business ideas and inventions.
You then need to protect your customers from being enticed away. If the only value you
offer to your customers is the lowest price, any competitor that recruits your staff can
simply undermine your future revenue by offering a lower price. Only by adding value to
the customer relationship beyond the product or service can you hope to keep the
customer. That relationship cannot rely on just one person. Entangling the customer in
your business through multiple relationships and multiple points of contact is the best
protection from encroachment. Is your customer involved in your strategic planning? Do
you get your customers together with your staff to share ideas or to support community
interests? Do your customers feel they are important to your business on a personal and a
business level? Long-term preferred-customer agreements, long-term contracts and
loyalty programmes can also be a buffer against encroachment.


Protecting your business knowledge is more difficult. Where possible, you need to protect
intellectual property by having it registered as patents, trademarks or copyright. Ensuring
that processes are documented, that succession planning and cross-training is
undertaken, and that the business is not overly dependent on a few people, is critical to
sustaining the business when important staff leave. Securing important documents and
controlling access to confidential company information is also needed to protect the
value in proprietary information.


Quite often, good staff will follow a key executive to their next employer. This suggests
that their loyalty is more to that person than to your business. Staff who enjoy their work,
have multiple friendships within the business, work in a supportive team and are
supported and encouraged to achieve their personal and career goals through the
business are less likely to be enticed away.


Paying a proper market salary, providing opportunities for personal and career
development and ensuring that each person has multiple points of involvement within
the organisation for business and social interaction is fundamental to keeping staff.


Are you as an owner personally involved with your most important customers, suppliers
and staff? You need to ensure that they all feel that they are important to your business
and that their role is recognised in the way you treat them and deal with them on a
personal and business level.


If you leave the important relationships in your business to others, you may find that they
walk out the door with the next person who leaves.

				
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Description: Defend Your Property (by Tom McKaskill)