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
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
"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
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
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
Who are the Real Business Performers?
A business owner told me a story the other day... "After I was in business a few years, a large corporation made me a terrific offer to come work for them. I left my company in the hands of my manager, and accepted the offer." "A friend who works for a large corporation said 'You will do a great job, but you will fail. You just don't understand the politics.'" "A few years later the company ran into some difficult times. We knew that cuts would be coming. I was unconcerned, because my team, despite...more
The Third Factor- A Third Eye?
For several years my writing and speaking has focused on two factors that are indispensable for entrepreneurs; creativity and tenacity. Creativity is the drive that not only makes entrepreneurs see opportunities, but also makes them consider every problem or challenge as solvable. It is the part of the business that entrepreneurs enjoy so much. That's why so many of them are poor managers. Tenacity is the refusal to accept failure. Any successful entrepreneur has been told at some time that it...more
When a Good Employee Fails
One of the most difficult challenges facing any entrepreneur is correcting a prior promotion that didn’t work out. Sooner or later it happens to every business owner. You promote employees because they’ve worked hard, were senior in their position, or showed a lot of ambition. You had an opening for someone who could handle more responsibility, and you tapped the best resource available. Before too long, you realize that you’ve made a mistake, and you’ve put someone in a job they just can...more
Cancer in the Workplace
It was my first ownership of a business. I had moved to California to take over a failing auto parts distributor, and the deal came with a minority share in the business. I was just 30 years old. The housecleaning that preceded my arrival included the entire sales team, and I needed knowledgeable parts people fast. I found one in New York, a dealership parts manager who had been fired. Another was from Florida, and a third in New Jersey. All of them worked hard, and we were pretty successful....more
Your Fault. My Consequence.
My friend Larry Linne, the author of "Make the Noise Go Away" has a great saying about employee mistakes."Your Fault. My Consequence." A good employee will accept responsibility, and be accountable for screwing something up. Unfortunately, it is still the owner's consequence. As the owner, you have to spend the time, the money, and the effort to resolve an error you didn't make, and probably wouldn't have made."Your fault, my consequence" is felt by owners universally. It often leads to anger and...more
