Are Mistakes Good?
"Experience is a dear teacher, but only a fool will learn from no other." Benjamin Franklin Business owners learn a lot from their experiences. As a friend says, "Experience is what you get when you don't get what you want." In many companies, you can trace the history of their employee issues through their handbooks. The dress code says that Fridays are casual days. Then it goes on to say that casual dress does not include ripped jeans, low-cut blouses, flip-flops, shorts, sleeveless t-shirts...more
Employees aren't Partners
Many of my clients are recovering from the recession. They are running lean, and have restored their profitability, even if at lower revenues than prior to 2008. Those that had to reduce or freeze employee compensation are seeking ways to share their recovering success. When cuts were made, whether layoffs, wage reductions, curtailed working hours or just freezing costs, profitability was the universally quoted reason. "We are losing money" or "We have to maintain a safe operating margin" were...more
Another Lost Generation?
I had the opportunity to present "Beating the Boomer Bust" twice this week, one of which was recorded for a Texas Public Radio show this weekend. For those who aren't familiar with the piece, it discusses the massive changes that are unfolding as Boomers retire from their businesses. As usual, members of the audience said afterwards "I knew all those things, but I never thought through the implications before." A quick recap before I get into today's topic. "Beating the Boomer Bust" is a look...more
Turning Plans into Realities
We've discussed some simple steps to getting started on your annual business plan. (see previous post: The Seven Questions of Simple Planning). Once you have the questions answered, you can begin moving towards the actions that transform your plans into realities. The first two of the Seven Questions ask what your revenue goal is, and what needs to happen for it to be reached.Let's say the target is a 10% increase, and the "need to happen" is expanding to a new geographic territory. For most business...more
The Seven Questions of Simple Planning
The Creation In the beginning was the plan And it sprang from the assumptions And the assumptions were without form So the plan was void of substance And darkness fell upon the face of the workers And the workers spake unto their supervisors, saying “This is a crock of shit, and it stinks!” So the supervisors went to their managers, and told them “This is a pail of dung, and none can abide the odor.” So the managers went to the division heads, and said “This...more
Getting Smart about SMART
It is approaching 2012, and (hopefully) most of us are finalizing our plans for the upcoming year. In our groups of The Alternative Board, we are asking each member to state their sales and revenue objectives. We all know that goals are supposed to be SMART, the acronym for setting a goal that is well...smart. When I ask an owner whether he or she sets SMART goals, they usually reply "Oh sure. That's Specific, Measurable, and uh...uh..." Not knowing the acronym past the first two words isn't...more
When is a Bonus not a Bonus?
"And yet, you don't think me ill-used, when I pay a day's wages for no work." That statement by Ebenezer Scrooge to Bob Cratchett in 1843 recognized the then relatively new custom of letting wage-earners have a day off for Christmas without docking their pay. One hundred and seventy years later, business owners aren't just expected to pay for a day of leisure. Now we have the tradition of the "holiday bonus," where employees are given additional money beyond their salaries at the end of each year...more
Three Circles of Family Business
What is a "Family Business?" A large percentage of small companies have some family involved. For most, it is simple a case of providing employment to family members. If the founder of the company is also the principle revenue generator, it may be a spouse (most often the wife) who keeps the books and runs the office. Employment of children who can't (or won't) find another job is common, and more so in the current economy. In most instances it is just a matter of income transfer with some value...more
You Don't Know What You Don't Know
This past week I've been interviewing prospective participants for our new "Noise Reduction System®" training which was created by Larry Linne. It focuses on teaching Second-In-Command (SIC) managers (anyone who answers directly to the owner, the First-In-Command or FIC) how to communicate, lead and think more effectively. Last week in "Never, never, never, never give up" I discussed the resistance we get from employees to change. How your employees prefer to learn one way of doing things, and...more
Never, never, never, never give up.
I kind of see everything as connected. Last week we hosted Larry Linne, author of "Make the Noise Go Away," a book about the roles of first-in-commands and second-in-commands. I will be writing about a couple of things Larry said in his presentation in the next few weeks. One Larry's key points was about the tendency of a first-in-command to give up. Not giving up on the business, or on working hard, but giving up on change. We get so much push back from those we employ. "Not another change!...more
Fighting on Level Ground
Poland has been conquered numerous times in history. Since the 11th century, it has been partially occupied, partitioned, or fully subjugated by the Germans, Russians, Austrians, Mongols, Tartar Muslims, French (under Napoleon), Prussians and Hungarians. The Poles aren't a timid people, and they have given good account of themselves in numerous battles. Their role as repeated door mat is largely due to a single factor. Bad luck. First, Poland straddles a historical divide between western Europe...more
Being Brave in a Brave New World
In the first three posts in this series I've outlined a number of reasons why the American economy is unlikely to grow in the next few years. All of my reasons are factual. The numbers don't lie, and these numbers can't be fixed by looser monetary policy, or stimulus bills, or consumer confidence. They will only be cured with time. One client accused me of trying to "scare" him out of expanding. Nothing could be further from the truth. There is an old trader's axiom: "When there is blood in the...more
Raises and bonuses- sharing a recovery
Your business is starting to recover. You are again profitable. If you were smart and agile, you remained profitable or perhaps even increased margins during the downturn by being "lean and mean." One advantage of a financial recession is that employment trails the recovery. So while businesses rebuild their earnings, jobs remain scarce. Most small business owner don't see their employees as part of a statistical anomaly, though. If you froze increases in 2009, they haven't had raises in what seems...more
"Intuitive" Doesn't Work for Organization
Apple Computer has become the most valuable company on the planet by making products that are "intuitive." Most Apple fans brag that you don't even need a user's manual to get started on their products. Intuitive is a relative term. With Ipods and Macs, it means that you can figure out commands without guidance. It presumes, however, that you know what the commands are before you start. Turn on. Look through the files. Start. Stop. Reverse. Copy. Save. Organization isn't intuitive. How a group...more
The Man (or Woman) Who Knew Too Much
Most businesses need salespeople. Most salespeople need to know what they are selling. This leaves many owners on the proverbial horns of a dilemma. Should they hire a great salesperson and teach him the business, or should they take someone who knows the business and teach her how to sell? When I have this discussion with clients, they often seek a third way- finding a competitor's top salesperson; one who knows the business, and whom they can steal away. That tactic comes with a big price tag...more
Leadership vs. Management
What is the difference between a leader and a manager? We talk a lot about managing employees, but no amount of management will direct employees who don't know what they are supposed to be doing. Simon Sinek on TED.com talks about the golden circles of leadership. What we do is easy. How we do it is more difficult. Why we do it is the most important thing we can verbalize as leaders, and the one that is neglected most often. In the Star Trek television shows and films, Mr. Spock is indisputably...more
Performance Reviews- Best Practices
Performance reviews are a pain. In my nearly 40 years in business they have always generated the same complaints. Managers hate to do them. As a consequence, they are frequently over due. They provide the employee with little information on how to improve. They are written to match decisions that were already made, like a promotion, a big raise, or a small one. I was auditing one of our business owner peer groups (The Alternative Board®) when one of the members presented his issue. His family...more
It's Time for the Boomers to Step Up
Why I Need to Say This Three years ago I wrote an open letter titled "Last Chance to Save America" and sent it to my entire email list. It went viral, and I received almost a thousand emails in reply. I also promised not to send another letter to my entire contact list, ever. So today I am using my blog, with the hope that you will forward a link to others if you agree with me. Like before, discussing a complex and important issue can't be done in a few hundred words, so please bear with me....more
Credibility in the Lobby
I typically visit over a dozen businesses a week. Only a few have media articles about themselves in the lobby. When I ask the others, they typically answer "Oh sure. We were written up a few years ago. I have it around here somewhere." Attention from the print media is infrequent, but it can have a very long shelf life. I have a front page article about my business in our lobby. It is ten years old. No visitor has ever mentioned the age of the article, although many have read it. Regardless...more
Employee Communication- "Why is it so difficult?"
I facilitated a recent meeting of business owners where the conversation turned to internal communications. It was a hot button for everyone in the group, and most of them expressed considerable frustration. “I do everything I can think of to keep my employees informed,” one said. “We have a newsletter that is offered in both print and email versions. There are monthly department meetings where we go over new information. I send out email bulletins, and write a quarterly Letter from the President...more
