Be an Ethical Entrepreneur, Marketer, and Business Builder

This 1 thing would have made the $70k minimum wage successful

The Gravity Payments announcement that the CEO, Dan Price, was taking a $930,000 pay cut to pay his team a minimum wage of $70,000 has recently caught headlines again because it doesn’t seem to be working.

It would be easy to point out the obvious problem with this approach, the same one Walmart is experiencing when they raised their minimum wage, that when you pay people for just showing up, you violate the social contract that employers and employees have that more talented, hard-working employees should earn more.

In other words, when people don’t earn a raise, (i.e. it’s just given to you as a minimum) it upsets those who have earned a similar raise or a very close amount.

However, that’s not the biggest problem with the Gravity Payments minimum wage.

The biggest problem, as-is generally the case, was Price’s ego.

If Mr. Price’s primary motivation was improving the way of life for his team members and he was happy to redistribute his wealth to do so, that would truly be a noble and generous act.

To ensure it’s success he only had to do 1 thing:

NOT TELL ANYONE

That’s it.

Had Price met with each person individually on his staff who was making less than $70k/year and told them, “Hey, I think you deserve an increase in pay and we can’t afford to do it all at once but over the next few years, we’re going to work hard to bump you up to $70,000/year,” it would have likely been an extremely successful adjustment.

  • The longer term employees would not have felt unfairly treated because other, less-effective team members were now making as much as them.
  • The people who received the raises would have actually worked harder (particularly if he gave them specific, actionable feedback as to WHY they received the raise).
  • The public, political pundits and the press would have not ever known about it to debate it and his customers wouldn’t have left because of his perceived socialist experiment.

Price, unfortunately decided to take a different approach.

He setup a video camera, held a company-wide meeting, recorded himself announcing the minimum wage to his team and then shared that video with the media heralding himself as a generous and benevolent leader.

His actions fall under a simple concept I try to live by, “If you have to tell people you’re smart, funny or nice, you’re not.”

In other words, because he had to prove to the world that he is such a great guy and an example to be modeled by CEO’s everywhere, his plan backfired.

If he was a looking only to improve the lives of his team and never told anyone that he took a $930,000/year pay cut to help them, he would have been a great leader because his concern would have been solely for others.

So the question is, if it was that simple to execute properly, and it was, why didn’t he do that?

Since I don’t know Price, my insights about him come mostly from his actions however these 4 explanations are more of a reflection on shortcomings all successful entrepreneurs will struggle with at some point in our growth.

  1. Ego – “Pride comes before the fall”, are words that ring true for all of us and who wouldn’t want to become the national face of such a hot topic?
  2. Greed – Let’s face it, when you stage something like this along with video recording the meeting and interviews on national TV, you are trying to get free exposure to your business. There’s nothing at all wrong with free publicity. Unless you do it at the expense of your team while claiming it’s for their benefit. My guess is Price took a calculated risk to temporarily reduce his pay and then increase his income again (through a salary increase, dividends, a stock sale or sale of the entire business) as a result of increased sales coming from the low-cost PR.
  3. Political Agenda – Being a 31 year old with a 7-figure salary tends to inflate your self-worth so potentially he thought he could be the first person to prove socialism works. Or maybe he just thought of it as charity since he was donating his own salary and profits. (And by me mentioning this am I hypocritically pushing my political agenda? Sorry, it’s hard not to do.)
  4. Lack of leadership – As Simon Sinek reminds us, great leaders eat last. It doesn’t work the same way when you do something good so you can get personal media attention to show everyone how great you are.

This may look like I’m picking on Price…

Ok, I am.

But, unfortunately, this would be an instance of the pot calling the kettle black as I’m surely guilty of ego-driven mistakes in business.

However, when a situation this unique and popular comes to the forefront due to national media attention, it gives us the opportunity to learn.

And that’s my goal. To articulate both the good intentions and poor execution of this strategy, and separate the 2.

Dan Price appears to be a sincere, hard-working, intelligent and successful guy and his mistakes in executing a $70,000 minimum wage don’t change that.

Hopefully, this will help him, and other business leaders, consider that you CAN achieve seemingly impossible things (like a $70k minimum wage) when you become a servant leader and put the needs of your team ahead of your own ego.

Dan, if you read this, I truly appreciate your good intentions and hope my advice can help you execute better servant leadership going forward since that appears to be your goal.

To humble, servant leadership, Bryan

The 3 Non-Leadership books every Leader, Teacher and Parent should read

I realize that might title is a bit redundant.

A great leader IS a great teacher and vice-versa.
In industries, like internet marketing, where the amount of information doubles every 8 months, the ability to teach your team may be the single most important aspect of leadership.

So with that in mind, if you want to be a leader on one of my teams, these are the 3 books you need to read and live.

Mindset: The New Psychology of Success by Carol Dweck

If there was a single book that taught you how to be a great teacher and thereby a great leader, this is it.

Each day we are all faced with success and failures and we respond in 1 of 2 ways:

  1. Fixed Mindset – Each mistake is validation that you aren’t smart, talented or good enough. Conversely, every success tells you that you are innately “gifted” which is very dangerous because then you stop looking for challenges where you might fail and therefore not validate your “gifted” status.
  2. Growth Mindset – Each failure and success are a means of learning. You either learned what you wanted (i.e. succeeded) or you didn’t (i.e. failed). Either way, you have more to learn, further to go and higher mountains to climb. Your mind is ever-expanding and intellect can always grow.

Our team has summarized this in our Culture Statements as:

Learning from other’s successes is extremely valuable however sometimes learning from our own mistakes is more memorable. We embrace our mistakes, learn not to repeat them, and therefore are constantly pushing the limits to get better.

If you only have time for one leadership or teaching book, Carol Dweck’s book is it!

The Talent Code: Greatness Isn’t Born. It’s Grown. Here’s How. by Daniel Coyle


It wasn’t blind luck that the greatest concentration of artists, sculptors and painters of all time just happened to live in the same area of Italy over a 60 year time frame in the 16th century.

It’s also not chance that the small, dingy school where Anna Kournikova learned to play tennis, at one time produced 4 of the top 50 greatest players in the world.

It’s by design that the Dominican Republic has an unmatched density of great baseball players and, amidst abject poverty, Brazil has produced some of the world’s greatest players and teams consistently for nearly 50 years.

There’s a system and a code to “talent”. It’s not merely innate and it’s not simply about working for 10,000 hours on something. It’s about mindset, commitment, and breaking down the skill or talent to it’s essentials.

Daniel Coyle tells you exactly how and it’s as inspiring a read as you may ever encounter.

Emotional Intelligence: Why It Can Matter More Than IQ by Daniel Goleman


Think for a second of the tests that you may have taken to measure your intelligence.

  • IQ Tests
  • SAT’s
  • ACT’s
  • College Exams
  • High School Exams

Of the tests listed above do you know which one most closely predicts success in life?
None of them. None can be correlated to job, income, happiness or any other measure of success.

But there is a test that can.

It’s called the marshmallow test.
Put a 3 year old in a room. Give her a marshmallow and say, “You may eat the marshmallow. Or you can wait a few minutes until I come back and I’ll give you 2.”

If she waits, she understands the value of delayed gratification – working hard and sacrificing now to receive something better in the future – and it will predict her future success more accurately than any other test.

That’s one of hundreds of examples that illustrate that Emotional Intelligence (EQ) is more important in our lives than IQ.

Goleman also provides great examples of how to teach 3 to 93 year olds how to improve their Emotional Intelligence and better empathize with those around us.

Those were listed in the order of importance so start at the top and work your way down.

To your success in becoming a great, teaching leader,
Bryan

Why WhatsApp is NOT everything that’s wrong with the economy

By WhatsApp Inc. (http://media.whatsapp.com/) [Public Domain], via Wikimedia CommonsFacebook recently purchased a startup with no profits for $19 billion dollars in the largest tech acquisition in history.

The venture capital-backed, tech startup world is rife with problems as I’ve blogged about before.

However, Robert Reich has brought up one of the more popularly alleged economic problems.

He claims the problem is that tech companies like WhatsApp are hurting the economy by not creating enough jobs.

In Reich’s words:

Productivity keeps growing, as do corporate profits. But jobs and wages are not growing. Unless we figure out how to bring all of them back into line – or spread the gains more widely – our economy cannot generate enough demand to sustain itself, and our society cannot maintain enough cohesion to keep us together.

In other words, Mr. Reich is saying, “55 employees were able to make a business worth $19 billion dollars serving 450 million people and that’s not fair. Why do such a small group of people deserve so much?”

Of course, he offers no solutions other than to mention income inequality implying that it’s the fault of successful companies like WhatsApp for being successful.

Venture backed start-ups with insanely high valuations, minimal revenue and no profit have all sorts of issues.

But not creating enough jobs is not one of them.

Remember the Luddites rioting to destroy new machines that made the textile industry more efficient back in the 18th century?

Richard Arkwright invented his cotton-spinning machine in 1760 which became one of the main instigators of the Luddite riots.

After all, the cotton-spinning machine would displace the jobs of all of the seamstresses who used to make the clothes by hand, right?

In 1760, there were about 7,900 persons in England engaged in production in the textile industry. In 1787, 27 years after Arkwright’s invention and only 8 years after Ed Ludd destroyed 2 stocking frames allowing his name to become synonymous with all the machine destroyers, there were 320,000 people employed in textile production in England.

Why did more efficiency results in a 4400% increase in jobs?

Because with increased efficiency came lower prices so, instead of having 2 sets of clothes, people could afford to have dozens.

The same complaints have been lodged against every major technological advancement.

Every time we progress, the Luddites come out claiming this time the new increase in efficiency is going to hurt the public by reducing jobs.

The exact opposite is true.

About two centuries ago, the majority of America was an agrarian (i.e. farming) society.

However, the invention of farm machinery didn’t result in the majority of Americans starving because they were no longer needed on the farm. In contrast, less people on the farm meant more people inventing, building, and creating other things.

At its core, economics is very simple.

If something increases efficiency it’s good for the economy. If it decreases efficiency it’s bad.

WhatsApp figured out how to connect 450 million people with only 55 employees. That sounds hyper-efficient to me.

Our knowledge-based economy has seen the fastest and greatest improvements in efficiency and leverage the world has ever known.

The end result of that increased efficiency is always an improvement for society.

Massive fortunes were made by Rockefeller, Ford and Carnegie when we transitioned from an agrarian to an industrial economy.

More recently, Gates, Zuckerberg, Page and Brin have been richly rewarded in our transition from an industrial to a knowledge economy.

Would we all be better off if none of them were allowed to reap the rewards of their creations?

You have 2 options

Become a Luddite, slow down technological innovation, and reduce the reward for being an innovator by asking the government to intervene.

OR

Learn what it takes to excel in the knowledge-based economy and join the successful companies that are improving our lives.

Time will prove, once again, that Robert Reich, despite all of his experience, power, and prestige, is no different than Ned Ludd whose name became synonymous with the machine destroyers’ failed attempt to halt progress.

The problem is education

The problem is not our exponential increases in efficiency.

The problem is an education system that was built at the beginning of the industrial revolution and is still designed to teach students to be good “workers” instead of great thinkers.

As the owner of a marketing tech company who has been almost steadily hiring for 2 years, I can assure you that the education or degree of people who succeed on my team is irrelevant.

A particular degree, or college education at all, cannot predict job success as well as cognitive reasoning abilities, emergent leadership, the ability to learn quickly, a passion for your expertise and a willingness to make mistakes while admitting when you are wrong.

Google recently revealed their top 5 hiring attributes and indicated that the number of people at Google without degrees is increasing.

So whether it’s Twitter, Google, Facebook, WhatsApp or my company, Optimized Marketing, fast growing companies that understand how to leverage technology are coming to realize that relying on someone’s particular degree or level of education is not a good predictor of future job performance.

In other words, our education system isn’t reliably producing people with the skills we need.

The problem isn’t successful companies.

The problem is we haven’t yet learned how to educate students for the knowledge economy.
Don’t blame successful entrepreneurs for not making more jobs.

Celebrate their success and start teaching more people how to do the same thing.

There’s a reason Ken Robinson’s below TED talk explaining how schools kill creativity is the most popular TED video ever with over 25 million views.

Mr. Robinson’s talk is popular because he’s right.

Whether creativity comes in the form of becoming the dance choreographer who wrote Cats or the founders of a successful startup company that sells for billions, creativity is the solution.

Taking away the rewards of creativity, as Mr. Reich seems to be implying, would further hinder creative pursuits and not help anyone.

Imagine what the next 100 years will look like if we are all allowed to “come up with original ideas that present value”, as Mr. Robinson defines creativity.

To your passionate, creative success,
Bryan

P.S. For more examples of technology increasing employment in various industries, check out Henry Hazlitt’s Economics in One Lesson.

Your “experience” is what’s holding your managers back and limiting your growth

If you hired the right managers, who are better than you in their areas of expertise, then the key to getting them to excel is simply to unleash them.

In other words, get out of his or her way!

You just need to let him make his own decisions, his own mistakes, and allow him to lead his own team. Once you realize that your “experience” and knowledge is actually holding your team back, then real growth can start.

If you’re doing ANY of the following, you’re holding your leaders back:

  1. Addressing issues with the team members who should report to him. This should be clearly defined in your organizational chart.
  2. Addressing issues from customers who should be talking to him. If your customers have been trained to go to you to get the best deal, then un-train them by making sure all pricing goes through your chosen leader.
  3. Vetoing ideas and making decisions in his department. Your job as the CEO, Owner, President or Team Leader is to explain why you think something will or will not work. Not to make the decision.
  4. Dictating that leader’s schedule. Sure you can ask him to take care of an issue or help you with something, but dictating a schedule without his approval is more like putting on a choke collar and then asking him to chase away the rabbits. He can try as hard as he wants but he’s never going to get the job done.
  5. Second-guessing or analyzing every decision. The details are not important to you, only the results are. Allow him to work out the details. (I explain below what to do if you think he’s going to implement a bad idea.)
  6. Holding regular meetings to ensure you ultimately get to make the “big” decisions. Quite often this is done indirectly. You might never come out and say, “It has to be done this way because I said so.” But saying, “You know, I really think that idea won’t work but it’s up to you,” is interpreted as “You better not try that!“, when it comes from most bosses.
  7. Ignoring mistakes that are made. This is a major misconception. Allowing people to make mistakes, in and of itself, is pretty worthless. Not addressing those mistakes is downright harmful to your business and the mistake maker. Mistakes should only be made once and the only way to ensure that your leader knows that it was a mistake, and has a way to prevent it from happening again, is to openly discuss mistakes. Biting your lip because you’re afraid to hurt his feelings by pointing out a mistake, is a sign that you still have him on a leash.

So how do you keep tabs on your newly free leaders?

  1. You need some “Rules of the Game” in the form of a written Vision, Mission and Culture. Think of these like your 10 Commandments of business. Everyone on your team doesn’t need to memorize them. However, your key leaders do need to know what’s expected of them and the clearest way to do that is in writing.
  2. You must have a Weekly Action SnapShot (WacSnap) so you can keep regular tabs on the key areas of your business. Depending on your function on the team, this may be included in a weekly meeting with your key leaders.
  3. You need Key Performance Indicators for each leader. For example:
    1. Service leaders need to demonstrate a profitable service department with minimal call-backs and customer complaints.
    2. Marketing leaders need a target acquisition cost, marketing ROI, number of leads, and conversion rate.
    3. Sales leaders also need to know conversion rate along with average dollar sale and lifetime value of a customer.
    4. Finance leaders need to know cash on hand, cash in receivables, and pending payables at all times. She also needs a target goal for savings and capital available for upcoming large purchases.
  4. At least twice a year you need to conduct a 12 Questions survey with each leader.

What if a leader is going to make a bad decision?

Have you ever made a bad decision? Since you’re reading this, then you somehow managed to survive it. Most poor decisions will fall on that side of the coin – They’re survivable. Keep that in mind.

  1. Ask him (don’t tell him) why he thinks X will work out well.
  2. Ask him if he knows of anyone else who has implemented it successfully. If not, and you have a resource for him to talk to on this topic, then offer it. You don’t have to pretend to be the expert on every topic. It’s much better to have a list of resources available.
  3. Let him know you’ve tried something similar to that before and ask if he’d like a few ideas.
  4. Find out how he plans to measure if the idea is successful or not. Every idea should have a measurement for success and just defining that allows most people to see the flaws in their own ideas.
  5. If he still thinks it’s a good idea, no one is going to die, the business isn’t going to go under, and an account worth more than 5% of your gross sales doesn’t have a highly likely chance of getting lost, back off and let him implement the idea.
  6. Once he realizes he’s made a mistake (which will be obvious if you did step #4), ask him what went wrong. Again, don’t just tell him. If you ever want him to think critically and figure out how to catch mistakes before they’re ever made, you have to stop spoon-feeding him all the answers. 
  7. If the idea does work, congratulate him on a job well done! Now go celebrate because allowing a leader to do something you didn’t think would work and being proven wrong, just helped you take a giant leap towards growing your business without it depending solely on you.

Won’t that take more time than me just making all the decisions?

Yes. At first.

You can only physically make so many decisions so your growth will be limited. Additionally, your freedom and ability to take vacations will also be limited.

More importantly, the ability for your team managers to be fully engaged and satisfied with their work will also be very limited.

One last thought…

For some people, “unleashing” your managers is going to be a BIG change. You’re not quite ready for it and they don’t quite believe you’re serious.

So during this transition, when someone comes to you to ask a question, don’t assume she wants your opinion. Chances are she doesn’t. She just doesn’t fully believe the decision is in her own hands and still doesn’t want to do something you won’t like.

Before you answer her question, you need to ask directly, “Are you looking for my approval or my opinion? If you want my approval, you have it. If you want my opinion, I’ll only give it to you if you treat it for what it is. Ultimately, it’s up to you to make the best decision for your team.

More importantly, when you say that, you better mean it!

To your success in unleashing the talents within your leaders, Bryan

Happiness leads to better Employee Productivity… Not the other way around! [VIDEO]

TED speeches are a secret obsession of mine. On any given week I’ll watch 2-4 of them. Out of the dozens and dozens of speeches I’ve watched, this speech by Shawn Achor is only the second I’ve ever shared on my blog. Why?

  1. It’s powerful and extremely effective.
  2. It’s simple to learn and easily IMPLEMENTED.
  3. It’s backed up by science.
  4. Few small business leaders have this concept on their radar.
  5. It’s actually quite entertaining.

[Read more…]

How to Implement a Compensation Plan Based on Productivity AND Customer Satisfaction

It’s the holy grail of service-based small businesses. But it’s never quite that simple, is it?

If you pay for productivity or performance, customer service suffers because everyone just tries to fix as many widgets as fast as possible to make more money… Or pay based on customer satisfaction and now it takes your technicians 3x as long as normal so they can “take care of the customer.” Plus it adds a whole new dimension of work for your payroll department.

Upset Customer

Not the happy customer we're looking for...

However, what if you COULD do both?

And without adding a mountain of paperwork to your payroll department each payday…

Here’s my experience with companies paying their team based on productivity and customer happiness

In 2006 I had cable internet installed at my home in Pennsylvania and had a few issues along the way. And true to the stereotype for that industry, service was less than stellar. Around that time I had a good friend who worked for them and confirmed for me that they paid a straight hourly wage. A very high hourly wage in fact. However, for some reason, paying more than the average hourly wage didn’t translate directly to better employees or better customer service.

[Read more…]

Customer loyalty isn’t about your product – It’s about your PEOPLE…

When I work with small businesses nearly coast-to-coast one thing we do is collect and review testimonials from customers. What I’ve learned from this exercise is that your customers will become fiercely loyal and gladly recommend you primarily because of YOUR PEOPLE, not your products…

Here’s a quick sample of actual testimonials:

Our service guy goes above and beyond the call of duty.

The girl in the office makes me feel like she knows me.

Our rep doesn’t try to sell us stuff we don’t need.

Our service man is wonderful – wouldn’t change him ever!

Or how about, “We love their business because they have such great personalities.

I didn’t make that last one up! It’s a real testimonial that we received for a small business.

You mean people are choosing their vendors based on the personalities of that vendor? Yes! Believe it or not, people want to do business with other PEOPLE!  In case you haven’t noticed, these days in the USA we aren’t real fond of doing business with our government or big corporations.

Now keep in mind, if the product or service you promised to deliver is sub-par, then you have a problem. If the customer enjoyed working with your people, chances are very high they’ll give you the opportunity to fix the problem. If not, good luck.

However, if you deliver just what you told them you would, or a little more, then it’s your people who will turn those regular customers into raving fans. Once they have your product or service there’s virtually nothing else to set you apart from everyone else who provides a product or service for them. You said you would deliver X, you delivered X, and the transaction is over.

Let’s look at a dramatic example…

The banking industry has some of the highest retention rates of any industry bordering on 90% retention of customers. You’re much more likely to get divorced than to change banks once you get married.

But, believe it or not, it’s not the free checking, savings account interest rates, or debit card rebates that get people to stick with a bank…

My mother got married when she was 19 and moved 1500 miles across the country to do so. She was in a new area and didn’t know anyone aside from my father and his family. In those first 6 years of marriage she had 5 children and guess who were often some of the first people to meet her new babies?

The tellers at the bank!

Sounds crazy, right? But in the days before direct deposit, every 2 weeks she’d have to go to the bank to deposit a paycheck and every time she’d see the same ladies. They obviously would chit-chat about her current child or the one on the way and what women don’t love to see cute little babies?

The point is, to this day, nearly 30 years later, she couldn’t tell you a darn thing about the programs or services or interest rates of that bank, but she remembers the tellers AND the bank.

If your business has any sort of regular interaction with your customers (and it should if you have recurring revenue) then the same can be true for you.

Here’s how:

  1. Provide great service to YOUR team members – One of the keys to great employee productivity and retention is if they, “feel like someone at work cares about me as a person.” Call it touchy-feely, but I’m an engineer and if the science didn’t back it up, I wouldn’t point it out.
  2. Collect testimonials and reward people for doing so. Not only does that show how important happy customers are to you (actions speak louder than words) it’s actually very uplifting and exciting for the people gathering the testimonials. They’re also a great marketing tool.
  3. Track customer complaints. Review each one of them, immediately resolve the problem, and review with your team what happened and how we can prevent it from happening again. If you care about mistakes being made, they will too.
  4. Develop a great small-business culture. The advantage to your customer in dealing with a small business is that they get to deal with real, local people and not bureaucracy. The same needs to be true for your team. If they have an issue, question, or suggestion they need to feel comfortable talking to the head-honcho. To do so, each of your team leaders needs to have regular reviews with their team members at least twice a year but ideally every 90 days. Separate those reviews from pay. The goal is to build a relationship between the 2 parties, not to bash someone.

To truly develop a team culture that promotes great service, you need to do a bit more homework. You are welcome to contact me and I’ll show you how to transform your small business culture.

Or read the following books and try to implement the changes on your own:

To your success fostering loyal customers, Bryan

How to guarantee you’ll NEVER be unemployed

It amazes me that amidst a recession and 8%+ unemployment that small business owners have such difficulty finding quality team members. Because of that, at almost any good business they’re literally always hiring great employees. They can’t afford not to. It’s so hard to find productive, professional, reliable people that, when one comes along, you have to snatch them up before someone else does.

Granted it will be your responsibility as the business owner or Team Leader to convince them to join your team

So even though businesses are generally always looking for great people, there is one position that is particularly difficult to fill… I’ve spoken with business owners all over North America in a handful of different industries including B2B, B2C, service-based, in-home, in-store and about everything else and there is one position that is far and away the hardest to fill…

Every small business owner has trouble finding high-quality, ethical Sales people.

In my personal experience I’ve seen sales positions advertised in markets with 200k+ people with no response whereas a market 1 hour away with a 20k+ population base will receive 2 dozen inquiries for an administrative assistant.

I’ve seen small business owners living in a market with a million people invest in national marketing campaigns and then try to convince someone to move to their area for the job because they can’t find someone locally for a $60k-$90k/year job.

I know of a business that has open sales positions every day of the year. They have opportunities up and down most of the east coast to fill positions where their top producers are making over $100k per year, set their own schedule, work out of their homes, have a base pay, and are home almost every evening to be with their families. Does that not sound like a great opportunity???  So why is it with 8.4% national unemployment they cannot find the right people???

As a matter of fact, if you live between Miami and Washington, D.C., have sales talent and strong character, and that career interests you, contact me and I’ll put you in touch with them.

Because it’s so hard to find quality sales people:

  1. Most small business owners are salesman themselves (out of necessity).
  2. In small businesses, the salesman is the highest paid position.

When I say, salesman, I’m also including sales women as in most organizations and industries, the top producers are female. Studies show that both women and men trust female sales people more than their male counterparts even in industries typically dominated by males such as automobile sales. If you have some sort of bias where you think your industry is “too technical” for female sales representatives, think again.

My formal education is in mechanical engineering so my predisposition is for math, science, and spreadsheets. However, my father made sure that I understood that no matter what I do in life, I need to learn how to sell. Whether that’s to sell my engineering idea, sell myself in a job interview, sell a product I invented, a business I’ve built, or a service I’m offering… No matter what you do in life, you need to learn basic sales and persuasive communication skills.

If you’re a small business owner, what do you do? Quite frankly, I’m not entirely sure but I have tried and have witnessed a few solutions.

  1. Steal quality sales people from other businesses. You always have to keep your eyes open. When you see someone who’s good say, “You’ve done a really great job and have been very professional. My business is always looking for people with skills like yours. Do you have any friends who are as good as you who might be interested?” They’ll usually indicate they might be interested so give them your card and ask them to call or email you.
  2. Create your own sales people. I’m aware that the stereotypes are that people under 40 have no work ethic. Unfortunately, a lot of times that is true. However, not always. There are still plenty of younger individuals not making a lot of money who could easily be taught and groomed to be great salespeople even if they’ve never considered it before.
  3. Always be recruiting. Take advantage of free advertising on Facebook, LinkedIn, Craigslist to let people know you’re always recruiting.
  4. Promote from within. If you have someone in another position in your company who would be great at sales then stop having them do something else. No sales = no business so give it the priority, perks, and pay it deserves.
  5. Don’t call it “sales”. In reality, no one wants to be sold something so there are a lot of people who think negatively of sales people. Somehow they miss the fact that they wouldn’t have a job without sales people but that’s another discussion… If you don’t call the position a “sales” position you’ll have more interest. Call them an Expert, Specialist, Technician or something else. In many businesses, owners will tell me that a selling service technician is also their best sales person because people instantly trust them. Kind of like plumbers used to be before they started selling you a bunch of stuff you didn’t want and we all caught on.
  6. Set yourself apart. Every business owner hates paying sales people a base salary while every sales person hates being 100% commission. Setup a pay structure where your sales people have a base dependent upon a relatively easy quota. Unless they can be fully trained to close deals in less than a week, you’ll need to pay them some sort of base for training. The “old school” sales managers will tell you to only bring in people hungry enough to work for free for a while and fight their way through it… Sure, that can work. But that can also be a way to only get sales people who are desperate and, as I’ve pointed out in this blog, great sales people are never desperate.

In reality, I’ve seen these ideas both work well and fail. There is no “perfect” solution to finding great salespeople. You have to do as many as possible and on a consistent basis.

If you’re a great sales person looking for a job nearly anywhere in the lower 48 states, let me know. Chances are I’ll be able to put you in touch with someone in your area looking to hire even if they’re not advertising the opening.

To your sales and sales recruiting success, Bryan

Small Business Marketing System – Vision, Mission, and Culture

In my last blog I introduced the outline and game plan for your system for marketing in your small business – your Marketing Manual. Now we’re going to look at each of the 5 levels of your plan in more detail starting with your Vision, Mission, and Culture.

Your company vision, mission, and culture define not only WHAT, but WHO you are as a business. Every business decision you make should stem from these values. Your marketing is no different. One of the primary findings in, Built to Last: Successful Habits of Visionary Companies, that contradicted the teachings of almost every MBA program on the planet, is that the businesses that survived and excelled over time were often the ones that were centered around a core business concept, not a great product. That’s what your Vision and Mission are all about… That one core business concept that makes your business unique. Something behind which you can rally the troops and lead them.

In the early 1900’s Ford’s vision was to, “Democratize the automobile.” That’s very crisp, tangible, and conclusive. The engineers now had an overlying goal when designing new models; new designs must obviously have mass appeal, be easy to manufacture, and easy to service. It helps the marketing department define their target customer as the average family with approximately the median income looking for reliable, safe transportation. They know they’re not marketing to the ultra-rich or the homeless. It helped every independent dealer and salesman throughout the country understand what their company stood for in 3 simple words. Unfortunately, their vision today is, “To become the world’s leading Consumer Company for automotive products and services.” I say unfortunately because it just isn’t all that exciting and doesn’t really say anything… And who talks like that? For instance, how would you define “world’s leading”? Does that mean most profitable? Highest in sales? Least deaths per mile driven?

The trick, of course, is to have a vision that’s specific enough to have teeth, but broad enough to not limit you…  That being said, I’d rather be specific, achieve our Vision and then rewrite it instead of starting with such a broad vision that it’s meaningless.

Boeing did a similar thing with their vision in the 50’s by making it very concrete: “Become the dominant player in commercial aircraft and bring the world into the jet age.” They achieved their vision and created a new one: “People working together as one global enterprise for aerospace leadership.”  If you were an employee at Boeing, which one would me more helpful when making tough business decisions?

Your Vision is that underlying principle that dictates why you exist. Writing a company vision is one of the most difficult tasks for a business. After all, if multi-billion dollar organizations rarely do it well, how can you be expected to do any better? It has to be specific to your products and services and yet exciting enough to inspire people…  One company that I’ve always admired that I thought would have a tough time with a vision since they do so many different things is 3M. Even though their corporate Vision, Objectives, and Strategies page lists all kinds of different ideas, I think they’re Brand Identity sums it all up very well, “Practical and ingenious solutions that help customers succeed.” Now if I’m an engineer sitting in a lab working on some new inventions, that can certainly help guide my creativity.

One last example of a Vision is the one I created for my Small Business Engineering. It is, “Teaching Entrepreneurs how to Engineer a Business that Works Without Them.” In a single statement my goal is set myself apart but also concretely define how my business is different. I hope that statement does just that. What do you think?

Your Mission statement is an extension of your Vision. It’s generally a bit longer, maybe a few paragraphs, that talks directly about the values of your company.

The final piece is your culture. Your Culture Statements (as Brad Sugar’s calls them) or Operating Principles (as Sam Carpenter) refers to them, define the culture of your organization. It helps define how your team acts, interacts, dresses, eats, hangs out… Your culture can be like that of the blue suits and company songs at IBM or the shower sandals and bean bags at Facebook. Tony Hsheih, co-founder of Zappos.com, had a different approach to culture. In his book, Delivering Happiness: A Path to Profits, Passion, and Purpose, he describes how his culture developed naturally and, like most businesses, was molded roughly after his own personality. After they had grown to a few thousand employees he decided to more actively define and cultivate his culture. So he put out a company survey to ask his team what they felt Zappos culture was all about and came up with the Zappos Family Core Values.

Now this is starting to seem like an awful circuitous way of getting better at generating leads, isn’t it? After all, what does this have to do with my radio ad? Everything! You see, without a defined vision and goal in mind, you can’t accurately determine if any decision in your business is heading you in the right direction. That includes your marketing. Yes, of course, you can shoot from the hip with a vague, fluffy vision that’s floating around in your head… But if you want to create a business that runs without you, it needs to be in writing so that as you recruit the help of Ad Agencies, marketing experts, web designers, radio personalities, and sales people, they all know the big picture on Day 1. Do you think you might get better results from your Ad Agency when they have a more clearly defined picture of your entire business Vision? If so, just imagine how that can help your own team members and even you make better, more-targeted decisions.

To your visionary success, Bryan

 

Employee Performance reviews should be like a GOOD wedding anniversary

If you’ve ever been responsible for giving a performance review, my title doesn’t sound anything like what you picture or what you’ve ever done, right? After all, performance reviews are how we determine pay raises and you can’t exactly throw a celebration if their performance just isn’t up to par… Correct. However a performance review isn’t just about how well they’re doing… It’s about how well you, the manager or leader, is doing…

This is one of my longest, yet most powerful blogs so read all of it and offer your comments whether you agree or not. 🙂

Let’s start at the beginning. What are the goals of a performance review in most instances:

  1. Assess Performance
  2. Implement Raises according to number 1.
  3. Set goals for next year.

If those are your only goals, you may be missing the most important part… The primary goal of a performance review should be to determine if you’re getting the absolute best out of your team member and if not, what can be done to do so. That doesn’t mean you should ignore a performance assessment…

Before we get to the performance assessment, it’ crucial you, the leader, understand that according to First, Break All the Rules: What the World’s Greatest Managers Do Differently by Marcus Buckingham, the number one factor that affects employee satisfaction and performance is their relationship with their immediate supervisor. That’s significant enough that it needs to be repeated. The only way you will ever get the best from a team member is if they have a strong relationship with you, their boss. That’s number one. Keep that in mind when we review everything else in this blog. Your ability to foster a strong relationship is the key to this puzzle… Is your performance review designed with that in mind??? We’ll get back to that in a bit…

Let’s start with the performance assessment by considering how we measure success in school. Like it or not, all of your employees went to school at some point and were graded according to his or her performance with either letter grades or percentage grades. That’s how we teach our children to know if they are doing well or not… In sports we learn that points, wins, and stats for your position are the proof of doing well. And then we move into the “real world” and people like Michael Masterson suggest your top 7 people in a Stage 1 organization should have a job description of “taking care of customers”. Or something equally vague but in theory “empowering”. Even if you do have a job description, it’s loaded with vague descriptions like, “dress professionally”, “interact positively with coworkers”, “present our products in a positive manner”. So we teach our children (and every one of your employees were once grade school children) to grade and measure performance down to fraction of percentage results on tests and in youth sports and then we put them in the work force and tell them to do a good job. So you have 2 options… First, you can attempt to reform the schooling system to implement more fuzzy methods of measuring performance… OR, Secondly, you can develop more concrete ways of assessing performance with actual numbers and grades. Why do you need to do this? Because according to Buckingham, under-performing and unhappy employees are partially that way because, “they don’t know what’s expected of them at work.” In other words, when they leave work for the day, they have only a vague idea of whether they did a “good job” or not. “Well, I didn’t wreck my truck and the boss didn’t yell at me so I must be doing a good job.” In some form or another, that’s how the majority of the workers in America assess their days.

This blog doesn’t have the time to address how to develop these performance benchmarks and report cards since its focus is performance reviews, however I’ve discussed it a bit before in a previous blog.

So now that you have the Key Performance Indicators, this portion of the performance review becomes almost moot. Why? Well do you remember in school when you got your report card at the end of the quarter or semester? Were the results a surprise to you? Sure you might wonder if you were going to get an A or B since you were on the border, but you knew you weren’t getting an F. Well the same becomes true at work. When you go down the list during your annual review the results are mostly expected and so aren’t a negative even if they are negative. Moreover, if they’re failing in every important category then shame on you because you should have done them a favor and gotten rid of them a long time ago. If they’re failing in some areas but doing very well in others that gives you a great opportunity to be positive about their strengths and then positively ask (don’t tell) how they can do better in the other areas.  Or you can always readjust their job description so they’re only doing the things they are really good at and drop out the things they are struggling with. Review my blog on hiring based on the job description you write after the interview for more details.

Now it’s time to determine raises. Well do you think it’s going to be easier to create an incentive-based pay system AND accurately determine fair and reasonable raises if everything is outlined on a report card? Yes. So implementing raises also becomes a non-issue. This is almost too easy isn’t it?

The most important part, however, is getting the best out of your team member. I also mentioned that very long, detailed, and exhaustive studies show that the number one contributor to that is the team member’s relationship with their direct supervisor…  Which means, to get the most out of your performance review you need to know how your relationship stands AND you need to strengthen it! Are you starting to see how making it like a good wedding anniversary, in other words, an exciting celebration of a great relationship, is crucial. How do you improve this relationship?

  1. Focus on positive and not negative. Look, if this is an annual review and you’re bringing up a screw-up from 8 months ago, you just aren’t getting the point. When someone screws up, you address it IMMEDIATELY along with a way to prevent it from happening again and you forget it (of course you can keep it in their company file in case the relationship ends up in divorce later). Think of it this way, is your anniversary dinner going to be a lot of fun when you sit down and your spouse brings up all of your screw-ups from the last year? Of course not! So why would you do that in a review where you’re main goal is to build a relationship???
  2. Have quarterly performance reviews. Do you honestly think you can build a relationship with an annual assessment? That’s just silly so stop it.
  3. Use the 12 questions from First, Break All The Rules. You may be afraid once you read them because they have nothing to do with the employees performance… They have to do with how well YOU are doing at providing them with an environment in which they can excel. Hopefully by now you understand that that is exactly what we want.
  4. Call it a Quarterly Chat so people don’t fear it and actual look forward to receiving 20-30 minutes of undivided attention from their boss.

Think of this from a different angle… Think for a second about your favorite 3 teachers from grade school. Do you have a good mental image? Are you smiling just thinking about them? Great! Now tell me, what grade did they give you in the second quarter when you had them? Uh…. You don’t remember? Well they were your favorite teacher why wouldn’t you recall how well they taught you? Because that wasn’t how they built the relationship with you! Teachers build relationships with students in many ways, but grading is not one of them. We understood as children that the grading was a necessary evil however it wasn’t what made us love or hate a teacher (usually). Right now I can think of teachers I liked who didn’t necessarily give me the best grades and ones I hated and had no respect for who gave me straight A’s. Why? Because I EARNED my grades based on my own effort however my relationship with my teacher was something she EARNED with me separately. Granted, if she was a terrible teacher and never actually taught me anything useful, that might taint the relationship. Think that might be true of your direct-reports as well?

That’s the context in which you need to consider your performance reviews. Assessments and raises should be tied to such clear definitions of performance that it’s obvious before you ever have your review what the results will be and those results will have no affect on your relationship. That’s not entirely true… Your team member will respect and appreciate you more for your direct, simple honesty.

Let’s say you’re on the other side of the coin and you’re the employee who is stressed because your review is coming up and you have no idea what to expect or if they’re going to bring up screw-ups from your past year one-by-one. Before you start looking for another job here are a few things you can do:

  1. Buy your boss a copy of First, Break All the Rules and tell them you read the book and thought they’d really enjoy it. If you think your boss is going take it as a personal insult as if you were saying, “You don’t know how to do your job so you need this”, it may be time to look for a new boss. Simply say you read it, were super impressed, and know they’re always looking for great new ideas so thought they might enjoy it.
  2. They will have some sort of checklist or score sheet or something to review you “objectively” with. Ask for a copy. Look, if you don’t know how you’re being graded, how can you do your best to get good grades? And that’s exactly what you should say to your boss if they ask why you want a copy.
  3. Review your job description and make sure you can highlight how you’re doing really well on each point (with specific stories to illustrate if time permits) and point out that you did make a few mistakes, but you aren’t making the same mistakes twice. You’re making new mistakes and the company mission, culture, or you job description (hopefully) indicates that you’re supposed to be innovative and even take a few risks and try new ideas. In other words, turn your negatives into positives.
  4. Ask to have reviews quarterly so you know where you’re standing throughout the year and can work to get better without having to wait till the end of the year when your raise is on the line.

The bottom line is this, you want to do a great job and you may need some help from your boss to determine exactly how to do that. That should be the focus of your review particularly if you feel you’re being unfairly reviewed and held back from raises. If none of those suggestions make any difference, it may be time to look for a new job because you obviously don’t have a strong relationship with your boss.

So whether you are the reviewer or reviewee (yep, just made that word up), you need to focus on ways to improve your relationship and the system your company uses for evaluations.

To your performance-reviewing success, Bryan

P.S. I’m aware this is a rather unique idea… If you don’t like it (or absolutely love it) leave me a comment to tell me why.