Be an Ethical Entrepreneur, Marketer, and Business Builder

No one wakes up and says "I want to suck at my job today"

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

The 4 things that DRAMATICALLY improve teamwork…

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This evening my sister was working on a speech for a college class where she wanted to teach people how to improve teamwork in a business. Wow, a summary of how to improve teamwork in any business in only 5 minutes??? We’re going to have to narrow that down. So we decided on improving the productivity of a team that already exists. In other words, we’re not hiring new people, expanding a business, or firing unproductive people. So we talked it through for a few minutes and here are 5-minute’s worth of suggestions to having the best team around. 😉

  1. The most important factor in determining an employee’s satisfaction is his relationship with his direct manager. That’s more important than salary, benefits, flex time, over time, company picnics and the like. We’re talking about his direct superior and not the CEO, CFO, or departmental VP. If his manager does not have solid rapport with him, he will not be happy. This is extremely important because almost every other tip, suggestion, or improvement MUST take this first factor into account. Don’t forget it!
  2. One of the most common complaints you’ll hear from employees, if you bother to ask them, is, “I don’t know what I’m supposed to do.” Sure, she knows her title is “receptionist” or “salesperson” or “plumber”, but what does that mean she has to do every hour of every day. As her direct manager you need to define that. The best way to figure this out is to provide enough detail, goals, benchmarks, and Key Performance Indicators so that every single day your team member can easily answer whether they had a good and productive day. They should then be able to list exactly what they accomplished that made it successful and productive.
  3. Tie compensation to the Key Performance Indicators (KPI’s). The number of businesses that do this HAS to be less than 1 in 10,000. Out of several hundred businesses I’ve worked with in some capacity only 1 comes to mind that does this extremely well with a few others doing this moderately well. Most don’t do this at all. If you determine someone needs to get 8 “jobs”, “services”, “deliveries”, or “sales” done every day but you pay them by the hour, what’s his incentive to do more than 4 or more than 8 once they get those target 8 done? As a general rule, salespeople are the only ones who have jobs strictly based on commissions. Why? If an engineer designs a brake system that doesn’t work, why should he get paid the same as an engineer who designs one that is flawless? A friend who is an engineer for Penn DOT told me he was welcomed to his engineering job with “Congratulations! You have a job for life. No matter how bad you screw up you basically can’t get fired.” You think that government agency is attracting “go-getters”? Even if it did, as I respect my friend’s engineering skill, how long do you think it will be before those employees are taught to accept less than the best in their own work? Figure out a way to provide an incentive for EVERY single person on your team even if its just tied to the overall company revenue targets. Software companies often do this by providing stock to employees. Public companies do it by offering 401k plans with discounts on the company stock. Depending on the size of the company, it can be very difficult for someone to gauge the effectiveness of his work when his only non-salaried incentive is the stock price.
  4. Provide quarterly reviews with every team member. So you’ve defined for everyone on the team what makes up a productive day and you even related incentives to that productivity, now you need to review those with them at least every 90 days. Many sales managers and sales teams do this on a weekly basis. Again, why are salespeople given such strong incentives to produce and few others are? My recommendation is to get your hands on “First, Break All The Rules” by Marcus Buckingham IMMEDIATELY and use the 12 questions he’s developed from information gathered from over 80,000 managers over 20 years for your reviews. These reviews need to achieve a few key objectives:
    1. Determine the team member’s progress on meeting the goals from last session
    2. Determine whether you as a manager can do more to help them achieve those goals
    3. Set new goals for the next 90 days

    This is not a complaint session where you attack the individual and highlight all that they’ve done wrong. Numerous tests and studies have proven that mice and men both respond much better to positive affirmation than to critical attacks. Don’t say things like “Look, Bob, you did this wrong. It’s spelled out in detail in the manual so you don’t have any excuses.” You’ve immediately put Bob on the defensive, probably upset him, and didn’t score too many rapport-building points with him. Instead try, “Hey Bob I have a few copies of your TPS reports here. How can we work together to make these even better this time? Was the manual clear or should we improve it?” Now, if that team member thinks you’re a chump, then the second wording may only get you slightly farther which is why having a strong relationship and solid rapport with your team members (reference #1) is so important.

So there’s the 5 minute performance review for your team. The next step is reviewing your company Vision, Mission, and Culture to help fill in all the blanks that are not spelled out in the company manual or in the KPI’s.

To your success, Bryan

The art of the win-win situation. Why you need to be your vendors' best customer.

As I get involved with more businesses and, in particular, with individuals who are working on my teams it has occurred to me that their are several business axioms that are very important to me and should be to all of my team members. One of those axioms is always finding a win-win situation.

In basic terms this means that everyone who is involved with a transaction should “win” when that transaction is complete. For instance, if I’m selling my house, at closing we should have a win-win-win-win situation. My house should be sold at a price I was willing to accept, the buyer should have a house that was accurately represented, and that they’re happy with, the realtor should be reasonably paid for her services, and the mortgage broker should be paid for his. Everyone got what they wanted so everyone wins.

In business you occasionally have an unscrupulous salesman who will tell a prospect anything to get the sale. You may even have instances where a boss will go to his grave spouting “The customer is always right!” when in reality the customer was wrong and the employee deserved the boss’ support. However in my experience, the number 1 area people forget this win-win philosophy is when dealing with vendors.

It first became very clear to me that you always treat your vendors well when I was a paperboy. As a paperboy with 50+ papers to deliver, almost any time it rained you inevitably end up with a few wet papers. So you have some choices. You can wait for hours as you request the newspaper company to come replace your wet papers which would make the papers late – or you deliver them as is. Generally, as long as it was only a few papers and they weren’t destroyed, I chose the latter. Now out of 50 people, who do you give those few wet papers to? Certainly not the people who are nice to you, invite you inside when its cold, and give you a big tip. Why would you take the risk of upsetting them? No, you choose the people who are mean and cheap. For me personally, mean always trumped cheap.

In one instance, I recall a customer blatantly accusing me of lying and trying to cheat them by me asking them to pay more weeks than they owed. To this day, I’m 100% certain that wasn’t the case and even if I had made a mistake, accusing me of lying was something I took VERY personally. At that point, I would have preferred to just erase their debt and lose them as a customer. However, that wasn’t an option so, from then on, they became my only customer who mailed their checks to the newspaper directly. In their minds, the problem was solved. In reality, they now received every wet and late paper I ever delivered. Since I never had to confront them again to collect money, it made it very easy for me. After all, someone had to get the late and/or wet paper, why not them?

In the “real world” of business this has rung true for me more times than I can possibly remember. As a business consultant I travel a lot and have personally worked with nearly 100 business owners. Without a doubt, a few jump out in my mind as people who have treated me exceedingly well. One client in New Mexico made a point of always taking me out to the most fancy restaurants and putting me in nice hotels. He probably spent a few hundred dollars extra per trip that he didn’t “need to.” He was also one of the only customers who always paid me with a check in full before I walked out the door to fly home – a check that he guaranteed was as solid as oak. With those 2 actions, he endeared himself to me and my boss. In return, everyone on his staff had my cell phone number and felt very comfortable using it because I made sure to always help them as soon as I possibly could. He treated me better than any other customer and so, without giving it much thought, I did my best to provide the absolute best service for him.

Personally, I work hard and enjoy “living well.” My living style is anything but “cheap.” My father recognized this and so pointed out “that the quickest way to increase profits is to cut expenses.” If you think about it, it makes perfect sense. However, there’s a limit.

One out-of-state client I worked with happened to be located very close to a handful of friends and the university I attended. Because of that, I got to know them exceedingly well and routinely stopped by their office to make sure everything was going alright. I never charged for any of these services and in exchange received some free water (total value of the water was about $200 and at that point 2 hours of my time was worth that so they were WAY ahead on the deal). They had my cell phone number and used it when they needed and I helped as I could. Quite literally I spent more time with them than any other customer, including my father’s business, for several years. In one instance, I was visiting their office and emailed the General Manager ahead of time indicating that on this trip I’d stay with friends so all he had to worry about as far as travel expenses was my mileage for me to get there. When we spoke on the phone he agreed. When the owner of the business got the bill and learned that while visiting that customer I also took time while I was in the area to sell my house, he refused to pay. The house was sold 3 days before I even showed up in the office and because of that it allowed me to be in their office bright and early at 8am instead closer to noon if I would have driven directly to their office that morning. We’re talking about probably less than $200 (I can’t even remember the exact amount). Easily less than I had saved them by staying with friends for a few nights. So I spoke with the owner who happened to, at one time, be the CEO for a large international organization and apparently a staunch believer in “cutting expenses is the fastest way to increase profits.” I emailed the owner a copy of the emails that the GM had received and clarified that I told him ahead of time about the expenses and the GM had agreed. The GM lied and said that was not the case and the owner refused to pay saying that my emails didn’t matter since he had to backup his GM. Before this event, I would have considered this owner to be one whom I respected nearly the most out of all of the owner’s I had dealt with. In the end, my boss allowed them to not pay (though my boss did still pay me) and I felt cheated and taken advantage of. Over 3 years later and I still will not take a phone call from them and refuse to work onsite in their office again. I have no time to deal with unprincipled behavior and the money I could make by continuing to work with them would never be worth it.

I have dozens of stories to further illustrate this point – from the gentleman in Massachusetts who sends me cheese every year for Christmas, to the owner in Texas who forgave me when I billed him too much for gasoline. The people who have treated me the best, have received priority service. That is how it should be. Always treat your best customers the best. This also means that, your vendors should consider you one of their best customers for you to receive the best service.
This is NOT true for most businesses. In most businesses, the customer who screams the loudest receives the most attention. The employee who causes the most trouble receives the most attention. This irritates me to no end because it honestly makes no sense. If you want to bring ethics into the picture you could even argue that its unethical to treat superior customers as anything less than superior. In essence, it’s not “fair” to treat them as anything less. Criminals are treated as criminals. War heroes are treated as war heroes. Superior customers deserve to be treated as superior customers.
When you treat your vendors poorly, you will always lose. I know of businesses where particularly difficult customers will literally get billed EXTRA for being a pain in the butt! I’ve seen it happen time and time again.

So the lessons I’ve learned from all of these and many more experiences that every one of my team members should understand are:

  1. When dealing with vendors, paying the least amount of money is NOT always getting the best deal.
  2. In every situation, every party involved should have a “win” and be very excited about doing business with you again. If not, rework the deal.
  3. You give your best team members (employees) and best customers your absolute best service.

As for #3, most business people have probably learned the 80/20 rule where the top 20% of your customers generate 80% of your profits and the bottom 20% of your customers generate 80% of your problems. After going through the situation with the client who refused to pay my mileage, I told my boss I could care less if we lost them as a customer and I sincerely meant it.

I’m not the only one who thinks this way as Brad Sugars talks about “grading your customers” and getting rid of those customers with a D or lower and possibly even those graded with a C. Literally sending them a letter indicating you will no longer serve them and offering some suggestions for who may. He has personally owned over 50 businesses and claims this is true for every business in every industry.

A few years back Sprint sent notices to thousands of their customers that they had 30 days to find a new cell phone company because Sprint would no longer service them.

Marcus Buckingham talks about how one of the “rules” that should be broken is always spend the most time with the people who need the most help. Instead, he says that you will always reap a greater reward by spending the most time with your best people.

Admittedly, when I was 16 years old running my paper route, I hadn’t read any business books or had anyone teach me that you treat your best customers the best. It just seemed to be common sense. If that’s the case, then why do so many businesses I visit spend so much time taking care of their worst customers and employees instead of finding new ways to serve their best customers and employees?

If you’re ever lucky enough to work with me, make sure you remember these lessons. 😉

To your success, Bryan