Small Business Buying, Building and Selling

Have you ever hit a game-winning shot, scored the game-winning goal, or converted the game-winning touchdown?

How about setting a new Personal Record for swimming, running, biking, car, quad, or motorcycle racing while taking first place?

It feels good, doesn’t it? As a matter of fact, there are few things in life that will ever rival those feelings of accomplishment and the adrenaline rush that ensues. For the rest of your life, those moments will be remembered and often relived as you just love to tell those stories. Athletics have the power to evoke such an amazing feeling because they bring together a few main things in one place:

1. Competition – No one is letting you win or succeed. Actually there are plenty of people hoping you fail so that they can win instead.
2. Recognition – When you have the ball, or the wheel, or are on the track, it’s up to you. All eyes are on you whether it’s because you’re doing well or failing. When you succeed, they’re all cheering for you!
3. Public Pressure – You are not behind closed doors. As I pointed out in my blog asking Are you putting yourself out there for criticism? public pressure forces us to be good or embarrass ourselves trying.
4. It’s not easy – By definition, if everyone could (or even wanted to do it) there would be no competition. You worked hard to acquire the skills and talents you have, that brought you to that moment of victory. In other words, you’re doing something you are good at.
5. Exclusivity – You’re in front. Everyone else is behind you. Only 1 person can be in that position.

So what does that have to do with employee motivation and business building? Everything. If you can understand and appreciate that feeling and those emotions, you understand what motivates people.

Though I used sports as an analogy there are parallels to this feeling of accomplishment throughout our lives. Here are just a few other ones so you can see the universal appeal of accomplishment:

1. Getting the girl (or guy) – Especially if you had to take a risk to do so by approaching a stranger and your buddies were watching.
2. Closing the sale – Especially if you’re paid on commission and you’re in competition with either yourself to do better or to be the best in your group.
3. Buying a house or car or something of great value – Generally this provides a major sense of accomplishment as not everyone has the ability to do this (except for a few years during the mid 2000′s when anyone could get financed).
4. Winning a competitive bid – You proved that you are the best and it felt good.
5. Making a profitable stock transaction – You bought low, sold high, beat the market odds and beat all the “experts” while doing it.
6. Getting recruited – Instead of being “hired”, someone actively and aggressively sought you out because of your talents.

The list can go on and on… My underlying point is simply this – If you, as a leader and manager, can find a way to bring Competition, Recognition, Publicity, Exclusivity and a Challenge to your business, most people will rise to the occasion and LOVE their jobs because of it.

If you can remember back to those 2 hour practices, or twice a day camps in the summer (3 runs/day at cross-country camp), it was not always easy, fun, or painless. As a matter of fact, the majority of the time it wasn’t fun at all. However, human beings are generally willing to sacrifice and struggle through all of those obstacles because the rewards of success, particularly the feelings that come along with it, are worth it.

Again, though I use sports as my analogy, this lesson certainly isn’t limited to the sports arena so don’t let that prevent you from getting the point.

The other day in my office, I started to ask some of my team about their experiences with sports. Even the ones who “sat the bench” understood what I meant by that great feeling of accomplishment at hitting the game-winning home-run. Ironically, the one who admitted to being the bench-warmer instantly latched on to our current inter-office competition. Every day she gets so excited about it she tells me about every single customer she signs up for this program and then “trash-talks” me for not getting as many as her. She’ll even walk into my office to receive a high-five to commemorate her latest score. Talk about fun and excitement at work! What may be most impressive, is that for all intents and purposes, her job is “secretarial.” Something most of us would never consider to be competitive or exciting.

Let’s take this concept one step further. According to Marcus Buckingham in his book “First, Break All the Rules: What the World’s Greatest Managers Do Differently,” the primary motivator for most people at their job is not how much they make. The primary reason for someone leaving or staying at a job is their relationship with their direct superior (remember that coach you hated or loved?). Take a moment and recall some of your favorite stories about your life. How many of those were directly related to your income at that time? Even your stories of accomplishment at work are rarely simply “I got a raise.” The accomplishments you made to get that raise are what makes for a great story and the true sense of accomplishment. The raise was simply the reward (i.e. winning the game) for showcasing your talents.

So to take this concept full-circle, compensation should be tied to these competitions and other measures of success. This is why I’m not a fan of an hourly wage. An hourly wage does not incorporate a single one of the 5 items that motivate people to make sacrifices for success. Admittedly, several of my team members are at least partially compensated hourly. The biggest problem with this is obviously that it breeds complacency. Once you’re used to getting that $10/hour, you are no longer motivated to keep working hard to get it. It’s a given; it’s guaranteed; all you have to do is show up.  What kind of motivator is that???

Great coaches, great leaders, and great managers find ways to motivate their team members to do their best by rewarding them for their talents.

To your “motivational” success, Bryan

P.S. Since you’re the coach of your team, make sure your competitions and motivators encourage both individual and team performance. ER9Y2V4W6YK5

In my last blog, we reviewed the 2 most basic types of people in any organization. Of course there are more specific and scientific personality tests and reviews along with detailed methods of how to best communicate with the 27 personality types, however who is ever going to remember 27 personality types let alone how they best interact with your own type? Moreover how are you going to remember exactly which person fits which type?

In contrast to that, my idea is simple, quick, and easy and though it won’t get you a perfect result every time, it’s certainly better than lumping everyone (including yourself) into one category.

That being said, in Marcus Buckingham’s book First, Break All the Rules: What the World’s Greatest Managers Do Differently, he lays out the exact 12 things that every person requires to be effective at their job. I have probably recommended that book half a dozen times in my blog and if you’re a leader or manager for any business you need to read it. So let’s get a quick and simple review of what Buckingham’s exhaustive research points out. All team members require the following:

1. Vision, Mission, Culture guidelines – What’s the big picture?
2. Job Description – Obviously this will be very detailed for intrapreneurs and more flexible for entrepreneurs. Absolutely no one can
3. Positive Reinforcement – Do not underestimate this power.
4. The right tools to get the job done – Nothing can be more frustrating. Intrapreneurs will have more tactile tools while the tools of an entrepreneur may just be pointing them in the right direction.
5. Someone at work they can trust – this is universal
6. Progress reports – everyone wants to know how they’re doing and how they can do better. No one wants to suck at their job.

He has 12 items on his list. I cut it down to 6 overall so read the book to learn how to determine if your business is setup for maximum profit and productivity. The point of this exercise is to point out that no one can manage themselves. No matter how entrepreneurial someone is, if they have a boss, they need direction. Period.

Another commonality is goal-setting, though the way that goals are set can be different. According to a Yale study from 1953, the 3% of graduates who had written goals had amassed more wealth than the other 97% of classmates years after graduation. So regardless of your personality, written goals are extremely valuable.

Everyone should have written, measurable, time-sensitive goals. Those goals should include levels of education, income, savings, type of work, family matters, travel ambitions and everything in between. I’ve gone as far as to make a list of all of the motorcycles I’d like to own in my lifetime. Several are already checked off however the list seems to be growing faster than I can control at the moment.

Now most people have a general “big picture” idea of what they want. Things like, I want a family, I want a job that I love, I want my kids to respect me, I want to retire at 65 with $2 million dollars, I want to see Paris, etc. etc. etc.  Now if you have all of that written down and you reference it often that’s a BIG step in the right direction. However you can do better. Here’s a quick 3 step process to setting goals:

1. You need to put everything into Do x Be = Have perspective.
2. You need to assign time frames.
3. You need to take into account your entrepreneurial or intrapreneurial tendencies.

The 3rd item is what we’ll address right now. As an extreme entrepreneur, my goals have time frames, but they are honestly relatively vague. For instance, in my lifetime I want to own at least 5 businesses, become a “young millionaire”, and write at least one book (though I have 4 in mind at the moment). As an entrepreneur, my immediate goal is to always find the best opportunity right now. That means in the next 12 months, I may write the book, buy another business, or get more schooling to help me learn more of the things that millionaires might know that I don’t. My point is, that my personality thrives on making the most of the moment. So instead of saying “I want to write a book by 2011″, I work on all of my goals at once and then go after the opportunity that’s best today, this month, or this year. In 2010 that may be writing that first book, or it may be visiting all the countries on my goal list, or it may be the next business. I’ll be working on all 3 and choose the path that is best at the time.

So how is that different than an intrapreneur? Intrapreneurs are more of the details individuals. They need specifics and they need specific time frames and they need a specific way to get there. Whereas I just need a “big picture”, an intrapreneur needs smaller goals to help achieve the larger ones. So if we take the same example of becoming a “young millionaire”, the successful intrapreneur will have a more specific goal list to achieve those goals.

For instance, their sub-goals to achieve the goal of becoming a millionaire might look more like this:

1. Buy a business with vendor financing in the next 12 months that has the potential to double in profits within a year with only the $5,000 I can drum up from selling my stuff and from savings. I must pay no more than annual cashflow plus assets for the business. It must have the possibility of paying me enough to live on while I’m growing it.
2. Build the business for less than 12 months and relist it on the market. It must have the potential to make me $100,000 profit when sold.
3. Reinvest the $100,000 in another business under the same criteria but with the ability to potentially sell for $300,000 profit within a year.
4. Of the $300,000, put $50,000 into down payments on cash producing real estate, $50,000 into the stock market and the other $200,000 into another business with the potential to be sold for $500,000 profit within 1 year.
5. Reinvest as much as necessary into a business that can either produce sufficient cashflow to make me a millionaire within 2 years of can be sold for $1 million in profit. The rest will be split between additional real estate and securities.

Why does the intrapreneur need so many sub-goals? Because something vague like “become a millionaire” seems so daunting an unattainable however when you break it down into small steps with specific time frames and details it becomes a whole lot easier for them to accept. Entrepreneurs can often feel much more comfortable and in-their-element with goals that are more vague. The exact details can at times make us feel trapped. That being the case is a detailed list bad for an entrepreneur? Of course not. As long as he can appreciate that it’s a guideline and the numbers and time frames will never be exact.

So my last question is, how does this help leaders better lead their teams?

As leaders, it’s our responsibility to provide progress reports, to develop job descriptions, and to help develop goals for team members within your organization. By now, I hope that it makes sense that those job descriptions, review sessions, and goal-setting meetings might be quite different for the 2 basic personality types.

To you success in providing the foundations of the common ground, Bryan

P.S. If you’re curious why my steps to becoming a young millionaire are primarily contingent upon buying, building, and selling businesses check out my blog on the topic.

Every business is comprised of 2 basic types of people.

Entrepreneurs and Intrapreneurs… Those who want risk, reward, challenges, and the excitement that comes with that and those who want stability, direction, consistency and the security that may come with that. Of course there are also those who just want a free ride and try to skirt responsibility, cut every corner, and get away with the highest pay for the least amount of effort, responsibility, or risk – but we’re going to skip over that lesser type and focus on the positive parts of an organization.

Before we delve into these 2 types, keep in mind this is an exercise in simplicity. It’s helped me determine and target which individuals I need to hire for which positions and it’s also helped me tailor, structure, and respond to those already on my team. Probably more importantly, it’s given me a greater understanding of my own requirements, desires, and motivations so that I can keep myself passionate and effective.

So which are you and how do you identify those around you?

Intrapreneur - These are the 9-5ers. The team members who don’t want to come earlier than starting time or stay late (though sometimes they may). They want to know exactly what they’re going to do that day, and know that next week, next month, and next year their paycheck will be there. For these types of individuals it’s very important that your leadership is consistent, fair, and direct. They want detailed, specific training. They want all the right tools and they want to know how to address any situation. These individuals are risk-averse and generally prefer repetition in their tasks so they know they’re doing what they do best constantly.

Entreprenuer – According to dictionary.com, entrepreneur is “a person who organizes and manages any enterprise, esp. a business, usually with considerable initiative and risk.” Within your team, whether they are leaders or not isn’t significant. They’ll naturally gravitate to the leadership positions and get people to follow their lead whether they’re given the title or not. They want excitement and a challenge. They are proud of their creative talents and want a forum to showcase them. Responsibility and appropriate reward for their risk-taking is very important. They hate being stagnant. If you aren’t helping them get better, faster, and smarter constantly, they won’t stay. Appropriately these are the traits of entreprenuers who venture into their own businesses, however with an environment that provides them the benefits of self-employment these individuals can thrive within an organization owned by someone else.

So why understand these classifications? As I mentioned above there are 2 main reasons:

1. To identify for yourself which one you are so you can understand your own strengths and weaknesses.
2. To identify which your other team members are so you can structure your communications with them to meet them on their level.

Let’s look at #2 first. What would be the difference between an Intrapreneur and Entrepreneur as far as appropriate compensation? The following video discusses some science that helps us better understand how to answer that:

The ROWE work environment is GREAT for entrepreneurial individuals. The studies he mentioned demonstrated that with those type of individuals working in complex, changing, challenging environments where “thought” is the primary value of the team members, compensating based on performance is counter-productive. However, intrapreneurs, who value consistency, will respond much better to simple tasks with compensation tied directly to their performance. Which is why in my organization, I work hard to incentivize those simple tasks.

So let’s jump back to #1 so we can better understand how introspection and clarification can help us perform at our peak. This is broken down into 2 sub-categories:

1. Our interactions with other team members.
2. Our goals for ourselves.

Let’s take a scenario and see how it might differ based on the circumstances. Let’s say you’re the leader and you’re implementing a new, exciting product in your business. Since your team members are in front of customers all day every day you have to get buy-in from all of them so how do you present it to an intrapreneur and an entrepreneur?

The intrapreneur will require a LOT of hand-holding. They want instructions, scripts of what to say, Frequently Asked Questions with the appropriate responses and all the benefits listed out so they can reference and recite them.

Entrepreneurs, on the other hand, need excitement. If they believe in the product and are excited about how it can help them and the customers whom they interact with, they’ll figure out the rest. They’ll learn how to answer the tough questions and the best way to present it in a way that’s comfortable and yet effective.

How do I know this is true? As one example, in my business we just started Platinum Care Plans which are simply extended warranties including all necessary maintenance. My entreprenurial individuals ran with it. My intrapreneurial individuals, at best, have started mentioning it to customers but have not sold one Platinum Care plan. Why? Because I didn’t present the information that they needed in the way that they appreciated so that they were comfortable enough to sell it.

Now here’s the real kicker, considering that I’m the entrepreneurial type (squared), is it any wonder that I presented the information in a way that was more digestible for the entrepreneurial team members??? Of course not. Which is exactly why we must understand how we fit into this scope. Next time I’ll do a better job of helping my intrapreneurs right from the start of a new product.

More importantly, understanding our own basic tendencies can help us more fully understand how to structure our business and personal goals. For instance, if you’re exceedingly entrepreneurial, at some point you’re going to want to go out on your own. You’re going to want your own business or be in charge of your own team with minimal oversight and you’re going to structure your education, contacts, and career choices to get you closer to that goal. If you’re exceedingly intrapreneurial, you’re going to generally look for a skilled trade and a reliable, predictable business where you can work. Now that skilled trade can be computer programming, accounting, or plumbing. It doesn’t matter much, you just want stability and the comfort that comes along with that.

Since this post is getting long, I’ll continue my next blog with more clarifications on what BOTH intrapreneurs and entrepreneurs have in common and require from their leaders.

To your success, Bryan

In the book, In Search of Excellence: Lessons from America’s Best-Run Companies they talk about a study conducted in a manufacturing plant to improve employee productivity. One of the managers theorized that by improving the lighting conditions productivity would go up because they would be creating a more positive environment for the workers. Well after turning up the lights productivity did increase. So he said, well if the lighting was the cause, if we turn down the lights productivity will return to normal. So they turned the lights back down and productivity still went up! So what happened???

The people who conducted the study discovered that what management does to improve morale makes little difference as long as your team members feel that someone cares about them.

I’ve lauded Marcus Buckingham and Curt Coffman’s research in First, Break All the Rules: What the World’s Greatest Managers Do Differently several times and his research seems to correlate directly with the findings in In Search of Excellence. For that reason Buckingham and Coffman’s 12 questions that “measure the core elements needed to attract, focus, and keep the most talented employees”, include:

1. Does my supervisor, or someone at work, seem to care about me as a person?
2. Is there someone at work who encourages my development?

With those pearls of wisdom in mind, my first change at my new business was to implement a mandatory weekly team meeting. The team meeting is presented as a great way for me to educate the whole team on marketing programs, price changes, and other changes while providing everyone an opportunity to voice what changes can be made to improve issues. Generally the issues that need to be addressed are brought up by me based on problems we encounter during the week or through researching issues from analyzing our database. We then brainstorm on how to improve them.

We’ve had 3 so far and I can’t imagine implementing changes without them. How else can you possibly get the whole team on the same page??? I’m still in the process of fine-tuning our process, however right now it’s composed of 4 pieces:

1. Review of last meeting
2. Service/Delivery Issues
3. Marketing/Sales Projects
4. Team Building Exercise

An added benefit that I didn’t expect from the team meeting is that it has actually encouraged competition between our service technicians. Our team includes 4 technicians including 1 who is extremely thorough, at the cost of expedience and another technician who is very fast, but sometimes sacrifices quality. They routinely challenge each other when we talk about the number of callbacks (i.e. service calls where we have to go back to a customer for the second time because the issue wasn’t fixed the first time) that are acceptable or the length of time it should take for routine service. You’ll never hear me suggest that healthy competition isn’t positive.

After being onsite for about 3 weeks and making lots of small changes designed to help improve operations, I’ve made it very clear that if everyone on our team is succeeding, I’m succeeding. My title is even “Team Leader” instead of General Manager, VP of Operations, CEO or whatever other titles come up with these days. For the first time in quite a while, the entire team realizes that someone not only cares about how well they do each day, but is willing to work very hard to make sure they are able to do their best.

The result of all of this “touchy-feely” teamwork building stuff and a new focus on our vision to be the absolute best in our market by consistently exceeding our customers’ expectations??? How about the highest household sales for the month of April in the entire 60 year history of the business? That also indicates one of the top 6 grossing months in the entire company history for household sales. Alright, so 3 weeks on the job and it may be a bit premature to assume the team building exercises and the great sales performance are directly related.

Over the next few weeks as we start NLP (Neuro-Linguistic Programming) training, Mission Statement and Culture Statement reviews, and performance based bonuses, we’ll see if sales and profits still increase by investing more time in the team.

To your success, Bryan