Every company makes mistakes. That’s one thing all businesses have in common.
That said, each mistake is an opportunity – especially if the error affects a customer.
Some companies blame anyone or anything but themselves. They may or may not correct it. They may or may not apologize. Some act like they’re doing you a favor if you ask them to correct their own goof-up.
A culture of blame exists in these firms. Their mantra is “It’s not my fault.”
Other companies immediately correct mistakes – especially for customers. They apologize. They might even offer the customer something extra to show they’re serious.
A culture of accountability exists in these firms. Their mantra is “Fix the problem to the complete satisfaction of the customer.”
Clearly, the second type of company is where you want to be. But, consider kicking it up a notch to turn costly mistakes into profitable occurrences.
Let’s say Bob’s Computer Service gets a call from their customer Big Company, Inc., telling them that Bob’s driver delivered their repaired monitor but they didn’t get their power cord back.
Bob’s has a culture of accountability, so the rep apologizes, arranges to have it delivered right away and offers a discount to make up for the aggravation. So far, so good. Even though the rep did everything right, most of Bob’s competitors would do the same, so it was good, but not extraordinary.
What if Bob’s takes the time to find and fix the root cause of the error? Now they begin to separate themselves from their competitors who, as soon as the customer’s problem is resolved, get back to their hectic routine. (Hey, if you’re busy putting out fires all day, every day, it’s tough to find time to install a sprinkler system.) This is the first way to profit – by driving repeat mistakes out of your business and enjoying the resultant productivity improvements.
And here’s one more step: bring the customer back into the loop. What if someone from Bob’s contacted Big Company, Inc. and it went something like this:
“Thank you for bringing your missing power cord to our attention. As a result of this situation, we reworked our procedures. Each product that arrives for service now gets a tag on which all accessories received are documented. Nobody – including you – should ever fail to get all your accessories back with repaired equipment.”
Almost nobody does this sort of thing. This level of dedication to quality, customer service and follow-through puts Bob’s Computer Service in rare company and helps create strong, life-long customer relationships. And, we all know the value of customers who are also raving fans.
We all make mistakes. You may as well profit from yours.
Filed Under: Continuous Improvement, Employee engagement, Growth, Leadership, Open Book Management, People management, Running your business by the numbers Tagged With:engagement, planning, strategy, work on your business
POSTED ON DECEMBER 10, 2012 BY BCSTLMOBonus Plan Best PracticesWell, it’s year-end bonus season again.
If you have a good year and want to share some of the fruits of your labor with your team, great. But to simply do so without a well planned and executed bonus plan is a wasted opportunity.
So, here’s a list of best bonus and incentive practices so you get the most bang for your bonus buck.
Get an early start on next year’s incentive program by creating it before the year starts. Then, share the numbers and generate excitement. Pick out the main numbers that drive your plan, and make them known. Create scoreboards. Encourage folks to pay attention to the progress. Talk about the plan at every opportunity. Start and finish strong.
Make the bonus “self-funding.”
This means it comes out of profits over and above your target. For instance, if you’d be tickled pink with $90,000 profit before tax, then make your bonus kick in for profit dollars above $90K. So, in this example you might consider putting 25-50% of all profits above $90k in the bonus pool.
Make the bonuses large enough to modify behavior.
The potential bonus needs to be significant enough to generate excitement, and actually get your people to help generate the profits that lead to bonuses.
Divvy up the bonuses in an equitable way.
Many companies divide the bonus pool according to base salary, so higher-paid people get a bigger percentage. You might use “shares”, just like the stock market. Make each $5,000 of base pay equal to one “share” in the pool. So, someone making $25K has 5 shares, and another making $30K has 6. If these are the only two employees in the bonus plan and the pool has $10,000 in it, there are now 11 shares total and each share is worth $909.09 ($10K/11 shares.) So employee #1 gets $4545.45 and #2 gets $5454.54. However you do this, keep it simple.
Make the first year an easy win.
Nothing will discourage your people more than starting a new bonus plan and then not earning a bonus. Set a fairly easy target in year one to show folks you are serious and to give them a taste of winning.
Consider paying the bonuses 30 days after the end of the quarter to help cash flow.
After all, your customers don’t pay you until after 30-45 days. Maybe more. So why not cut the bonus checks after that same amount of time? It’s a great real-life business lesson for your team.
Keep the bonus separate from regular pay.
I strongly recommend bonuses NOT be put on a regular paycheck (but of course you must take out payroll taxes.) Do a separate check run, so it isn’t perceived as pay. Make it clear that this is an additional reward for achieving a goal and is NOT an entitlement.
Your incentive plan can be a business drain or a business gain. Take the time to get it right.
Filed Under: Bonus Plans, Employee engagement, Financial/Business Literacy, Open Book Management, People management
POSTED ON NOVEMBER 25, 2012 BY BCSTLMOEngage your Employees to Beat a Business Downturn“I have recently had to let some people go. They were great people, but with our financial projections, we had to downsize. Some of my current staff has begun to get a bit discouraged about the company as a result of slowing sales and their friends no longer working here. What are some ways that I can make sure my remaining team stays excited and engaged during a tough time?”
– Worried Business Owner
Get your people involved in the come-back.
Have a meeting and show them the numbers – where revenue was the last few years, and how much it’s dropped off. Explain the relationship between sales, headcount, and profits. Take questions, give straight answers, and encourage discussion.
Share your vision for the future. It might be emerging from the recession stronger than ever, or simply surviving. Regardless, give them the unvarnished truth. And, be sure to set the tone as positive and optimistic.
Ask for their active participation and support. First, banish the rumor mill and negativity. If your people have concerns or complaints, they should voice them in company meetings, to a supervisor or to you. No grousing around the water cooler.
Put a mechanism in place to collect ideas for improving the situation: Customers. Marketing and sales activities. Cost of goods. Overhead expenses. Productivity. Receivables. Cash.
Of course, your team will want to know how things are going. Have regular follow-up meetings and post results on the wall. Show them that their ideas are being implemented. Share the results, and acknowledge those who submitted ideas. Learn from mistakes and celebrate even small wins.
That’s it. Transparency, engage your team, be smart and work hard.
Filed Under: Employee engagement, Financial/Business Literacy, Leadership, Open Book Management, People management, Running your business by the numbers
POSTED ON SEPTEMBER 1, 2012 BY BCSTLMOStop Pouring the Wrong Coffee
Ever been to a restaurant with someone who drinks decaf coffee? You sit down and order drinks. Someone at your table asks for decaf coffee. Your server fills the order as requested. So far, so good.
Pretty soon, your food arrives and you dig in. The drinks are getting low, so either your server or someone assigned the mission-critical task of keeping drinks topped off swoops in. The coffee gets refilled, but not with decaf. Luckily, the decaf drinker notices that the server isn’t wielding the familiar orange color-coded pot and brings the mistake to the server’s attention. A mumbled apology is offered, and the server takes the cup to the kitchen to swap it out for the right stuff.
No harm done, right? Happens all the time.
Let’s take a look at the effects of this minor incident on the parties involved:
Virtually all restaurants use orange color-coding to designate decaf coffee. Astonishingly, though, most still rely on memory or ESP to determine whether a customer gets regular or decaf.
A very few food service operators have eradicated this problem by placing a telltale coaster under each cup of decaf.
No more doubt. No asking the customer about the contents of the cup. No more mistakes, or wasted time, or wasted product, or eroded customer relationships.
What a simple, foolproof, and inexpensive solution to a widespread problem.
Two quick questions:
1 Why the heck doesn’t every restaurant do this?
2 What’s your version of this problem in your business?
Now, I know that not all problems in business are this simple or this cut-and-dried. So, regardless of the severity or complexity of your oft-repeated errors, how about using an old saying to give this phenomenon a name?
“We never have time to do it right, but we always have time to do it over.”
Here are two important take-aways from this discussion:
Use systems to avoid future mistakes.
If your approach to errors is people-centered, I recommend that you raise your sights a bit. While mistakes do happen and they can often be attributed to human error, a lack of systems and procedures is more likely in most cases.
Take the coffee example. If the manager happens to witness the decaf error, a brief conversation with the server might help avoid such mistakes for a while. The boss might even go so far as to convene a meeting of the wait staff, where they explore the importance of remembering which customer gets what coffee.
All well and good, but why not put a system in place (like the coaster) to remove as much human error as possible?
So I again ask, what’s your version of this problem in your business? Can you fix your nagging, recurring mistakes with color-coding, forms, templates, systems or procedures?
Every mistake is an opportunity to improve your company.
Mistakes are costly. They waste time, money, productivity and resources. They aggravate employees. They lose customers. Even so, each and every one is a golden opportunity for improvement.
Every time a mistake happens, ask: What can be done to prevent this same type of error from happening in the future? This is “root cause” thinking. You and all your people should get good at looking for the root causes of problems.
It’s not about blaming the individual employee. When errors occur, the person involved needs to admit it without fear of reprisal.
Drive individual blame and cover-ups out of your company. Replace them with willingness to admit mistakes, so you can find the root cause of errors and prevent them in the future. Learn from mistakes.
Make it the job of everyone in your company to identify and attack the root causes of errors.
Stop pouring the wrong coffee. Stop doing it over. Instead, start doing it right the first time.
Filed Under: Continuous Improvement, Culture, People management
POSTED ON APRIL 29, 2012 BY BCSTLMOIt’s Free!
It’s a typical day at Bob’s Company, Inc. Bob notices that a recently-hired employee is now eligible for dental benefits. So, Bob hands her an application. As he walks away, she asks, “What’s the cost?”
Bob’s reply? “It’s free. The company pays for it.”
If this was a movie rather than an article, the startling shower music from “Psycho” would come on at this point.
Or maybe it would turn into a take-off from “Young Frankenstein.” Instead of “It’s alive!” the line could be “It’s Free!”
Shame, shame on Bob. He wasted a terrific opportunity for a “teachable moment” with a new employee.
Of course it’s not “free.” Every benefit provided by the company costs good money.
Free. What was Bob thinking? He should have responded something like this: “Our dental insurance costs about $25 per month. The company pays for it. It’s part of your compensation – just as our other benefits are.”
Too often employees think only about base wage or salary when the subject of compensation arises. This happens because we business owners and employers let it happen. You’re likely to hear something like “I make $35,000 per year.” You are very unlikely to hear an employee say, “Well, my base is $35,000, but on top of that my employer generously pays another $12,000 for my health insurance. Counting my paid time off, my other benefits and my payroll taxes, I cost my employer a whopping $58,000 per year.”
So, how do we get our “bang for the buck”? How do we get our employees to recognize and appreciate all aspects of the compensation package – so the company can enjoy a fine ROI in the form of increased employee satisfaction, improved productivity and reduced turnover? How do we drive the “entitlement culture” out of our companies?
Here are some approaches to use:
PS: Bob’s story has a happy ending. He realized the error of his ways and corrected his statement to his employee.
Filed Under: Employee engagement, Financial/Business Literacy, Leadership, Open Book Management, People management, Running your business by the numbers, Training/Teaching/Learning Tagged With: business, leadership, management, people
POSTED ON APRIL 22, 2012 BY BCSTLMOTalking about Values is Good BusinessWhat do “values” have to do with business? Everything!
This isn’t about “touchy-feely.” I see core values as a hard-nosed business practice, just like reducing costs. It’s simply a way to ensure that everyone on the team knows what is important.
As owner, you can – and should – shape your company’s culture. You can let it happen or you can make it happen.
So, what makes up a culture? All sorts of things. Fun versus serious. Honest versus dishonest. Friendly versus confrontational. Lunch with others or eat at your desk. All this and much more is the stuff of company culture.
A big part of a business’ culture centers on its values. You may not care whether your employees eat at the desk or go out, but you darn sure better care whether they are being honest with your customers.
My recommendation: Determine what principles are important to you, and then inject them into the workplace.
If you don’t spell out what’s important, then the implication is that either nothing is important or everything is important – trouble either way.
Here’s an example: Barry is the new guy in sales. He was put place with no orientation on what’s important to the company. He brought some bad habits, including breaking promises to customers. His manager doesn’t find out until a furious customer calls him.
But George works at a company where breaking promises to customers is unacceptable. The owners and managers “walk the talk”, setting the example for others. It’s discussed in meetings and in new employee orientations. It’s used in performance reviews and job descriptions. Do you think George shares Barry’s cavalier attitude toward commitments to customers?
This is the difference between ignoring what’s important and building a values-based culture on purpose.
Adopting a set of values is not about picking a litany of lofty goals that nobody can live up to. A company must identify those principles that the top people are passionate about and can adopt without hesitation.
What values to pick then? Each company must answer that question for itself. The answer may be found in things like the founder’s personal values and vision for the company.
Whatever values are chosen – and a handful is plenty – the company needs to really work at making them second nature for all employees. This doesn’t happen overnight. About the time you think your staff is getting tired of hearing a message, that’s about the time it’s just starting to soak in.
Here is perhaps the most powerful sign that it’s working: Your employees start enforcing the culture. When you hear one of them tell another, “That’s not how we do things around here”, you’ll know your work is paying off.
Adopting and living up to a set of guiding values can literally transform your business. Don’t assume your people know what’s important. Tell them. It’s hard work and a long process, but it will eventually have a positive impact on your bottom line.
Filed Under: Culture, Employee engagement, Hiring, Leadership, People management Tagged With:guiding principles, leadership, people, values
POSTED ON FEBRUARY 25, 2012 BY BCSTLMOTransparency and Leadership: Avoid Emily Litella SyndromeEmily Litella, in one of her typical on-air rants: “What’s this I hear about computer parking lots? We’re in a recession, people are losing their jobs, and now we have parking lots for computers! It’s an outrageous waste of land and money!”
Jane Curtin, with her typical disdain for Emily: “It’s commuter parking lots.”
Emily: “Oh … Never mind.”
A note to those of you too young to have experienced Saturday Night Live’s original cast from the 1970s: Look up Emily Litella on Wikipedia. Better yet, see her on YouTube. Played by the late, great Gilda Radner, Emily was a commentator for the SNL Weekend Update news. Emily always jumped to rash and incorrect conclusions because she never had the right facts.
Do your employees do the same thing?
I constantly encounter business owners who are worried that their employees will find out either how well or how poorly the company is doing. Of course, lately it’s trending toward the “poorly” end of the spectrum – but either way, here’s my usual response:
“Your employees aren’t dumb. They’ll probably figure it out. But even if you can hide the truth, why would you? In the absence of facts and information, your employees will make assumptions and jump to conclusions. Their decisions and behaviors will be based on these false assumptions. How do you expect that to work out?”
A little transparency goes a long way.
That word – transparency – seems especially relevant today, given our current state of affairs. Think about the world of big-business, banking, and high finance. A string of crumbled companies, bankruptcies, lost pensions, mass firings, devastated families and broken dreams. Don’t even get me started on Congressional “leaders” who make deals behind closed doors and ram legislation through without even allowing their members to read bills before voting.
Many of America’s economic woes could have been avoided, but for a lack of transparency.
I’d argue that transparency gives rise to leadership.
In an open environment, leadership is a must. It requires you to carefully choose the “people on the bus” who are worthy of trust and who will act in the business’ best interests with the information given to them. It also means that you’ll have to explain the information – to mentor and train your team – so they’ll know what it all means.
Transparency allows full and effective delegation. “Here’s the goal. Go make it happen.” Knowing the organization’s goals, financial status, and available resources allow confident decision-making.
Integrity – a cornerstone of leadership – goes hand-in-and with openness. Shady business practices are like fungus and vampires. They don’t thrive in the bright light of day.
Business owners who worry that their employees will know the company’s status are withholding information and keeping their employees in the dark – and still expecting good results. It’s much like asking someone to play a sport without keeping score.
Delegation? A secrecy-cloaked environment throws a blanket over every potential solution. Aside from the top leaders, nobody has the big picture: “What should I do? What can I do? What resources are available? What methods make sense for our current financial situation?” The lack of information will result in questions, false assumptions, and faulty decisions … making micro-management necessary.
So often, the small business community looks to the captains of industry for answers. It sure seems to me that the example set lately by the big business community calls for a shift in thinking.
Why can’t the small and mid-sized business community set the tone for a change? Let’s start a revolution of our own. Let’s be the example-setters. Let’s be the poster-boys and poster-girls for transparency. For integrity. For solid business practices. And for leadership.
The Emily Litella act was funny on TV. It’s not funny in your organization. Open up and get Emily off your payroll.
Filed Under: Culture, Employee engagement, Leadership, People management Tagged With: integrity,leadership, open book, transparency
POSTED ON FEBRUARY 20, 2012 BY BCSTLMOIt’s Not My Fault!“It’s not my fault!”
How many times have you been a customer and heard that line?
It usually happens right after you bring a product or service defect to the attention of someone at an establishment where you’re spending your hard-earned money.
I was on the receiving end of this statement recently. It was tempting to give a customer service lecture to the person in front of me, faultless as he may have been.
This particular situation involved receiving the wrong fast food order. I had ordered the medium Unrecognizable Chicken McParts and instead received – and was charged for – the aptly named Super Sized version. For a moment, I thought perhaps they’d brought me the entire crate of McParts straight from the walk-in freezer but they assured me this was indeed packaged for individual sale and consumption. (Disclosure: While I may find it amusing to poke fun at the fast food industry, that’s where I had my first job. Accordingly, I’m somewhat sympathetic to fast food employees. Even so, until they start putting the right stuff in the bag, they will be the target of my “how-not-to-do-it” business lessons.)
As a small business owner, I pay special attention to the way service is delivered when I’m the customer. Most folks reading this are probably equally aware of nuances that might be missed by others: The words that are said and how they’re said, body language, the care with which transactions are handled, and so on.
It’s almost unfair to use fast food joints as examples of how to (or how not to) conduct business. After all, they make it awful easy to identify faults.
So, let’s raise the bar and discuss another industry. In fact, let’s discuss your own company.
Have you had the “it’s not my fault” talk with your people lately? Have you ever had it?
Chances are, if nobody has had a direct discussion with your employees they don’t intuitively know that the customer doesn’t care whose fault it is. Even if the customer does know who’s to blame, “blame” isn’t on the agenda. Getting the problem fixed quickly is.
Here’s a good discussion to have with your troops:
Banish “It’s not my fault!” from your workplace. Replace it with confident, competent service that keeps your customers coming back.
Filed Under: Continuous Improvement, Culture, Delegating, Employee engagement, Leadership, People management, Policies & Procedures, Training/Teaching/Learning Tagged With: blame, customer service, fault, improvement
Leadership. What the heck is leadership anyway? And why should a small business owner care?
Some folks use the word “leadership” as a synonym for influence. Let’s expand that definition to include a couple of other important activities:
There are many kinds of influence. A screaming child in a restaurant is influencing the embarrassed parents.
You can use various types of influence over your staff. But we’re not talking about domination. Of course your position of authority is real so you can’t (and wouldn’t want to) turn that off. But how about simply asking your team – individually and collectively – to deliver the desired behavior?
Years ago, I had two employees who became hostile toward each other after a previously harmonious working relationship. It was jarring for their team members, because they both were considered friendly and easy-going. Quickly it became apparent that this wasn’t going away.
Sitting down with both of them, I pointed out that they likely spend more time at work than with their own families, and a troubled relationship affected everyone around them. They got it, and all returned to normal soon after that.
But it’s not always that easy. A similar situation later erupted with two other employees, and it required more firm and direct language: “You don’t have to like each other but you must work together in a professional and congenial way. Otherwise one or both of you will have to leave.”
You’ll develop your own style over time, but don’t shy away from issues in your business – deal with them directly and quickly.
This one’s pretty self-explanatory. Nothing will spoil your good leadership efforts faster than “do as I say and not as I do.” This doesn’t mean you have to become “one of the guys” but know this: Your people watch you like a hawk. Model the behaviors you ask of your team.
As the business owner, you’re the main resource provider. Here’s a good way to find out what obstacles are in your team’s way: Ask ‘em.
How about having your employees create a “Stop Doing” list, or a “Hassles” log? What resources do they need? What procedures are outdated?
So, a simple formula for small business leadership includes using your influence to promptly deal with problems, setting the example and removing obstacles. Let me know if you’ve got more to add to the formula.
"The difference between something good and something great is attention to detail.” – Charles Swindoll
An alien spacecraft lands near a mobile home park (as alien spacecraft are prone to do) and abducts an earthling. As the extraterrestrials examine the human, they’re fascinated that one toe on each foot is much bigger than the other four.
Why aren’t we earthlings similarly surprised when we see another person’s foot for the first time? Because it’s the norm. Like water to a fish. Ho-hum.
And so it is with many of the line items on your financial statements. We take some things for granted, and look right past them. Sometimes, it’s familiarity. Maybe you’re used to glossing over training expense because you always spend less than you budgeted. Sometimes it’s your perceived lack of influence over certain numbers. No matter what you’ve tried, that one number “is what it is.”
One of the first steps to improving your financial results is to start looking at each line item as if you were seeing it for the first time. Letting them become ho-hum is a formula for decline.
Of course, every section of your income statement is an opportunity for improvement, but here we’ll focus on your Cost of Goods Sold, or COGS.
COGS is defined as the direct costs that go into creating the products or services that a company sells. For example, an automaker’s COGS would include the material costs that go into making the car plus the labor costs used to build it. The other costs that don’t directly go into producing cars, like office supplies, support staff and utilities, are considered Overhead Expenses … another topic for another day.
If you’re a service-only business and don’t sell goods, you probably call it Cost of Sales, or COS. Even if your P&L just shows revenue less expenses, and doesn’t include a COS section, you really do have COS … it’s the direct labor cost associated with your billable staff.
Some great reasons to mine your COGS for improvement opportunities:
Do a detailed analysis of every line item in your COGS, and you might be rewarded with an out-of-this-world profit improvement.
“What gets measured gets managed.”
It’s hard to argue with that piece of wisdom. That said, here’s another old saw to consider:
“If everything is important, then nothing is important.”
Between these two valuable quotes is a balance and a guideline for business owners.
All businesses have certain numbers that define success. Some, like profit, are universal. Every business must take in more than it spends, so an argument could be made that this number – profit – is a definition of success for every business.
But what about other numbers? There’s certainly no shortage of other things to measure – sales, costs, margins, cash … the list goes on and on.
They’re all important. But don’t forget: “If everything is important, then nothing is important.”
Focusing on a small, carefully-selected handful of numbers and actually doing things to improve them is much more likely to lead to overall success than scattershot oversight of dozens of different numbers.
Some business owners create a scoreboard or “dashboard” of metrics – to pull selected numbers out of the blizzard of income statements, balance sheets and other reports – and single them out for an appropriate amount of attention.
This is how the “What gets measured gets managed” piece comes into play.
So, how do you cut through the scads of potential metrics which might be worthy of your undivided attention, and discover the select few which will truly make a difference?
Think about your business. Two questions:
1) Are there things related to your specific business model that are absolutely critical to ongoing success? For instance, if you are the low price leader, then cost of sales is likely a primary area of focus.
2) Are there things going on in your business right now that deserve attention? Examples might include things like declining quality, too much dependence on one customer, or high employee turnover.
If you find that there are specific things that warrant a permanent place on your scoreboard, then add them and leave them there. Or, perhaps you’ll discover that a temporary issue needs attention – so it gets a spot, only until it is resolved.
In most cases, these big-picture, corporate-level “critical numbers” will have underlying “drivers” – activities which must be done to move the number in the right direction. A simple example: weight loss. If your critical number is pounds, the drivers would be calories in (eating) and calories burned (exercise.)
The best drivers measure activities and behaviors, as in this weight loss example. If you want to change a number, you’ve got to change someone’s activities or behaviors.
These are the numbers that deserve a significant amount of time and attention. That’s not to say other numbers aren’t important. They’re just not as important.
Identify and break out your critical numbers and drivers. Get them on a scoreboard for all to see. Talk about them. Teach and learn about them. Assign responsibility for them. Track them. Most importantly, be sure to move them in the right direction.
Your business will be more successful for the effort.
The trust of the innocent is the liar’s most useful tool.” – Stephen King
We all have people we trust. And they trust us in return. In some cases, that trust has been earned via confidences kept and commitments achieved. In others, it’s possible that the mutual trust is there because … well, just because.
Among my friends are two entrepreneurs who have been harmed by being too trusting, and perhaps too eager to offer others the opportunity to benefit from their businesses.
We all know people we describe as “the nicest people.” While this may well be an over-used phrase, in this case it’s true. These two folks – who by the way don’t know each other – are easily the most kind, gentle, nice and trusting people I’ve known.
For each of these two people, a positive characteristic – trust – turned into an Achille’s Heel.
What happened? In both cases – despite their very dissimilar businesses – there was a common thread: Each of these entrepreneurs sought outside help in advancing the business.
For one, it proved fatal for the business. The offending party offered to provide cash and a building in which to grow the operation. But after making those investments, the villain seized the business, leaving my friend out in the cold and wondering how this could have happened.
For the other, the culprit posed as a potential buyer of the company, only to copy the products and steal the customer list. The scenario is ongoing as this article is being written.
Both situations, I’m 100% convinced, were premeditated.
The impact on these people is predictable: Anger. Embarrassment. Financial loss. Uncertainty about the future.
What could these two overly-trusting entrepreneurs have done to prevent such skullduggery? Of course, the short answer is to get a lawyer involved. Hindsight, it is said, is always 20/20.
How does one know when to seek legal help? (A note to my attorney friends: The correct response is not “early and often.”) Certainly, there’s a time to bring in the lawyers, and having a competent – dare I say “trusted” – attorney at the ready is a must-have for any business owner.
Who wants to go through life thinking there’s a business-stealing boogieman around every corner, waiting to pounce?
But there’s a brutal reality: the boogieman is real. He sucked the blood from these two wonderful people.
Like it or not, a healthy amount of suspicion and skepticism goes with business ownership.
Each of us has to find a comfort zone. For some, it might mean cynicism and sliding a non-disclosure agreement across the table to every new acquaintance. For others, it may be a reluctant admission that some folks are scallywags.
So, be nice. Be generous. But be careful out there.
“Trust everybody, but cut the cards.“ – Writer & humorist Finley Peter Dunne
“Never trust anyone completely but God.” – Lawrence Welk
“Trust, but verify.” – President Ronald Reagan
Ever heard someone say, “There’s no such thing as a short-sleeve dress shirt”?
The pocket protector crowd (think of Dilbert) might disagree with that statement, but those who know far more about workplace apparel than I do accept it as gospel. To quote anchorman Ron Burgundy, “It’s a given.”
There are many “givens” in business. Time is money. You only get one chance to make a good first impression. Cash is king.
Here’s another one to add to the list:
“If you’re the owner, nobody cares as much as you.”
Many business owners haven’t yet heard this valuable fact. Or, they’ve heard it and refuse to believe it. As a result, they have unrealistically high expectations for their people. Then, when their employees fall short of these lofty expectations, the owner is disappointed, surprised and maybe even angered.
Ultimately, in a situation like this, the employee leaves – either voluntarily or through termination for “poor performance.” Of course, the owner’s expectations were never clearly defined, never written down, never explained and were very likely a moving target.
Let’s run down the list of what the business means to a typical entrepreneur. We’ll call him Bob. For Bob, the business is:
Now let’s make a list of what the company means to Joe, one of Bob’s employees:
OK, Joe may think of it as a career. Joe may be emotionally attached to the company and may be a big part of its success. Even so, you have to admit that Joe’s list is much different than Bob’s.
Here’s my point: Business owners must adjust their expectations to the givens of the workplace. If you learn to accept “Nobody cares as much as you” as a given, you’ll save yourself from the inevitable aggravation and consternation: Anger. Firing. Recruiting. Rehiring. Retraining. Low morale. Missed opportunities.
Get real and get used to it. Nobody cares as much as you. It’s a given.
Some readers may find this attitude to be in contrast with my position that employees can think and act like owners. It is not. Many employees can and do think and act like owners. They will rise to the challenge and accomplish the most incredible things. I see it all the time. But there is one indisputable difference between an owner and an employee:
If the business fails, the employee experiences a job-changing event. But for the owner, failure is a life-changing event, potentially bringing total financial ruin on the owner’s family.
Yes, employees can be wonderfully loyal, incredibly hard-working and intensely dedicated. But the fact remains that if and when the hammer comes down on the business, it is the owner who takes the biggest blow. It stands to reason, then, that the person with the most on the line – with all respect to faithful employees – will care the most. After all, the owner’s connection to the business goes far beyond livelihood and career.
Consider the following simple formula for effective leadership:
So, do what it takes to foster loyalty, hard work and dedication among your team. Return their gift of loyalty by being loyal in return. Create a win-win work environment. Share information and solicit their opinions. Thank them for a job well done and reward them for exceeding goals.
Help them learn to think and act like owners. But remember, they are not owners. You’re the owner. Don’t blame your employees for drawing a line.
Again, have realistic expectations. You owe it to your employees, to your business and to yourself.
The best numbers to put on your dashboard are the specific numbers that define success for your company. Look at the things going on in your market and industry. What are your company’s trends for the last few years? What are your customers and employees saying? These answers will help determine your dashboard metrics.
Keep the amount of information to a handful of critical numbers so your attention isn’t diluted. Just because you CAN measure something doesn’t mean you SHOULD. Less is more.
Don’t focus only on financial measures. Operational numbers (web hits, turnaround time, customer satisfaction, etc.) can be especially helpful in analyzing progress toward your most important goals.
Finally, once you have a dashboard, use it. It’s not decor – it’s an accountability tool. Put a name next to each number – the person who “owns” that result. Go over the numbers regularly with your team and strive to achieve each target.
Unless you’ve just been released from a long incarceration in a Turkish prison, you know that the concept of working on your business – rather than in it – was popularized by Michael Gerber in his mega-hit book, “The E-Myth Revisited.”
Gerber made many great points (which explains the “mega-hit” part), but the on/in distinction is the big take-away for most readers.
Here’s an excerpt:
“Go to work on your business rather than in it, and ask yourself the following questions:
Well, one of Gerber’s main themes is the idea of systems. Systemize everything. Manage systems, not people.
It’s terrific advice, of course, but many small business owners still struggle, even after reading E-Myth. What’s a system? What systems are needed? Where do you start?
My answer: Anything can be a system. A system is simply a way to avoid NOT making things up as you go along.
Simple? Yep. Like I said, anything can be a system. Not all systems are this simple, but you get the idea.
Beyond creating and installing systems, how else can you work on your business?
Perhaps more to the point, how can you find the time to work on your business when you’re consumed by it all day, every day?
Here’s a way to let the ideas and time find you: Constantly be in “improvement opportunity mode.” Every time an error or crisis occurs, stop. Avoid the temptation to put out the fire and get back to work. Analyze what just happened. Was it human error, or could a system – even a simple one – prevent future recurrence? If so, create it right then and there. In many cases, you can do this sort of “post-mortem” work in a matter of minutes.
Planning is a great way to work on your business. As an early riser, my favorite planning time is early Sunday mornings, before my wife gets up. And business trips can turn into mini planning retreats … if you keep the TV turned off in your room.
I know a business owner who tells me he likes thinking about his business while on his riding mower. Some folks really embrace this concept by taking their teams on annual out-of-town planning retreats.
Exactly what you do is less important than developing the habit. Start working ON your business today.
“Do it. Do it now!” – Arnold Schwarzenegger
I write about business, small business, marketing, management, leadership, a little bit of travel & other topics of interest to business people.