May 13th, 2013 — Owner Strategies
Seeing us – me, my employees, my managers – get bogged down with day-to-day issues. Know that as owner I should be planning and directing where the business is going. Realize that I can get myself in trouble by reacting instead of looking ahead. Also know that we can create problems by not taking action to fix it – whatever “it” is. What advice do you have to help me stay on top of priorities?
Thoughts of the Day: Identify the top objectives for the company and continuously review where you are versus those objectives. Set up systems for people to meet and share information. Celebrate progress. Organize teams to work on persistent problems.
What’s the sight-line on the horizon that everyone in your company is focused on moving towards? Get clear on that, and it’s easier to figure out if everything you’re doing is heading the company in the right direction. Without major goals it’s easy to drift off in the wrong direction.
Write down what you want the company to accomplish in the next 5 years. Consider the following:
- double revenue, triple profit
- add 1 new employee for every $150k of gross profit
- operate within budget
- reduce operating costs by 1% – 3% / year
- add enough clients each year to allow the company to dump the bottom 5% – the least profitable, most troublesome
- sell new products : old customers, old products : new customers
- expand marketing reach annually while reducing the ratio of marketing spend / revenue.
Set up a meeting schedule to review progress, discuss obstacles, agree on next actions to be taken.
Meetings can be great. Improperly managed, they can also suck the energy out of any group. Limit meetings to an hour, max two hours. Break up long days of conferences into a series of 1-2 hour activities.
Work with intention. Make sure enough of the right people are involved. In my experience, it is more likely that too few people will be invited to meet, than too many. Don’t be afraid to ask people to give up “work time” to attend meetings. People need to share information in order to function well.
Use meetings to inform, brainstorm, analyze and problem solve. Different purposes require different formats. Information sharing meetings do best if data is presented in report handouts or overheads with handouts. Brainstorming meetings need a facilitator who can document what’s being said. Analysis and problem solving meetings need to be focused towards a desired outcome: to reach a conclusion, solve a problem, etc.
It helps to understand that we remember only 15% of what we hear, 50% of what we write down, and 85% of what we hear, write down and play back. Take notes in every meeting. Start meetings with a review of the previous meetings’ notes. Know whose job it is to take and disseminate notes. Get notes out within 1-2 days of the meeting’s conclusion.
Build a culture of success by taking time to acknowledge and celebrate progress towards goals. Use checklists of to-do’s to stay on track. Recognize groups of people who are getting their tasks done according to the commitments they’ve made.
Every organization runs into problems from internal and external sources. Teach employees to be comfortable bringing up issues in meetings. Take time to brainstorm the source of problems. Assign task groups to work on rooting the causes.
Build a culture of taking action. Reward people who fix problems before they escalate into something worse. Emphasize the value of always looking to make things better.
Everyone needs space and time to think, reflect, plan. Schedule it into your day. Lead by example. Show your employees that you have the discipline and skill needed to lead the business. Make it your #1 priority to set a schedule, meet regularly, encourage information sharing and take action to work the company’s plan.
Unclear about your company’s goals and check in structure? Give us a call!
Looking for a good book? The One Hour Plan for Growth: How a Single Sheet of Paper Can Take Your Business to the Next Level, by Joe Calhoon
Want to print this article: Stop Reacting and Start Planning
May 6th, 2013 — Operations
Parts come in from lots of directions – picked up at stores, delivered to client sites, delivered to our shop. Parts also go out the door lots of ways: stocking up trucks, installed at client sites, sit around before we use them to build products in the shop. I’m sure things get lost and thrown away. We could be bleeding lots of money. Help!
Thoughts of the Day: Set up a system to check inventory in and out. Automate the connection between check in/out and accounting. Set up obvious inspection systems and reporting, so that everyone knows you’re watching. Set a goal to reduce inventory costs.
Every time a part goes somewhere other than into a customer invoice, it means the company makes less money than it could. Wasting money because there are not enough controls in place is crazy. You might as well pull some dollars out of your pocket and burn them.
Start with a system to check inventory in and out. Look at all vendor parts invoices from the last quarter. This will help you see how parts flow into the company.
Set up control systems. Issue a purchase order for each part that gets bought, whether by someone in the field, the office, or the shop floor. On the purchase order require notation as to purpose of the order: for a specific customer, for inventory on a truck, or for shop inventory. Also require the name of the person placing the order. Issue purchase orders in sequence: treat them like another check register. If people in the field need to place orders, give them a pad of sequentially numbered P.O.’s.
Make people record lost and broken parts. When something gets thrown out, it has to be reported on a form, detailing who threw it away and why. Use these forms to record any inventory that is no longer sitting around available for use. Make this the basis for inventory write offs in the accounting system.
Check inventory in and out with automated systems. Bar code every part, and give it a specific location in the shop. It’s easier to find parts if they’re always in the same location, and easier to eyeball stock that is low if shelves are marked and inventory quantity is visible.
Make sure that what flows in from vendors, and gets checked out by employees, also gets reported to accounting. This is where an automated bar coding system can pay significant dividends. Give every part a number and scan it in and out of inventory. Put handheld scanners on the trucks and at job sits. Reporting how parts are used will increase your ability to properly charge clients. You’ll also be better able to evaluate the price and profitability of the goods you’re producing if all inventory is accounted for. Get help from the makers of your accounting system; any good accounting system maker understands the need to track inventory.
Make it obvious that you’re tracking inventory. Put cameras up, and let people know you’re using them. Report weekly on inventory status. Do regular cycle counts to identify problems before they become massive. Do annual full inventory counts. Set up charts to report on inventory issues: waste, missing parts, lost dollars, excess use in the field or the shop, etc. Cut down on losses by making people more aware, by reducing opportunity for waste.
Involve everyone in the company in inventory cost reduction. Teach people about the importance of tracking inventory in and out, controlling waste, etc. Relate it to job retention: the more waste is reduced, the less pressure to cut jobs in down cycles. Relate inventory cost reduction upside to opportunity for people to participate in the profits, as well. Have a company picnic to celebrate hitting an improvement milestone. Set up a bonus for the first group to achieve a goal.
Run the numbers. Figure out what a 10% reduction in inventory would mean to your bottom line. That number should give you incentive to work on the project.
Looking for a good book? Smart Inventory Solutions: Improving the Management of Engineering Materials and Spare Parts, by Phillip Slater
Want to print the article? Find Gold by Controlling Inventory
April 25th, 2013 — Family Owned Business
33% – 46% of new hires fail within 18 months; majority fail for attitude. More than 50% of the time hiring managers regret their decision
I was in too much of a hurry last year, and hired the wrong person. It turned into a real headache as we clashed about nearly everything, from how to do the work, to who was responsible for what. Finally I let her go. It cost me a lot of time, energy, and lost opportunity. I don’t want to go there again. What can I do different next time?
Thoughts of the Day: Assessing pre-hire is crucial, if difficult. Understand your company’s culture. Take the time to build a hiring system. Train new hires on culture as well as skill. Build bench strength. Deal with mistakes quickly.
Most interviewers focus on interviewing for job skill. Statistics indicate that hiring managers are doing a good job of figuring out which candidates have the skills needed to do the job, and which don’t. Only 1 in 10 hires fails for skill.
Spend more time learning how to perfect the attitude / behavior interviews. Recognize that every company is unique. Specific skills are needed to perform tasks specific to the company. There are also attitudes and codes of behavior unique to each company.
Entrepreneurial companies have cultures that tend towards throwing people into the deep end of the pool, asking people to solve problems with imperfect information, encouraging people who continue to learn new things and rewarding people who take initiative well beyond the defined scope of their job. That’s fine as long as you hire for those attributes. But watch out if that’s your culture and you hire someone who values a well laid out set of procedures, someone who waits for the boss to give direction, who avoids risk, and who values routine, repetitive activities. Right person, wrong company.
Make a list of attributes that do and don’t work in your company. Look at the strongest and weakest performers in your company today. Put skills aside, list successful and unsuccessful behaviors and attitudes.
Build a set of questions that help you find out where candidates are coming from, relative to your company’s success behaviors. Ask candidates questions about what they prefer. Ask candidates to describe their best and worst bosses. Ask them to relate attributes and behaviors of those bosses to what works and doesn’t work for them.
Use the same questions on every interview and keep notes on candidate answers on file. Track successful and unsuccessful hires and compare to interview answers. Look for patterns.
While you don’t want a company of robots, it is important to recognize that culture and values can be the glue that binds employees together. Put new employees through an orientation program to help them understand the company’s stated and implied rules of behavior. Assign a mentor to each new employee. Encourage diversity of backgrounds, while developing a uniform code of behavior.
As much as possible, hire from the bottom, train and promote. Have every person in the company be responsible for identifying and training their replacement. Four things will result. One, new hires who don’t make it will be at the entry level, lowest risk, easiest to fill positions. Two, employees in line for promotions will have already proven themselves on culture fit. Three, employees will know they fit and have a future within your company. Four, it will be much easier to fill open positions, focusing on skill training rather than culture and behavior.
Even with a system to hire, a sound on-boarding process, and a program to grow talent internally, you’ll still make hiring mistakes. It’s impossible to be perfect all the time. When there is a problem address it quickly. Implement skill and behavior training and look for immediate results. Assess the facts of the situation and avoid living in the land of hope. If things don’t turn around quickly, be prepared to admit there’s a mistake and encourage the employee to move on.
Looking for a good book? Hiring for Attitude; A Revolutionary Approach to Recruiting Star Performers with Both Tremendous Skill and Superb Attitude, by Mike Murphy.
Here’s the PDF: 4.25.13 – Don’t Rush to Get a New Employee On Board
April 15th, 2013 — Sales
48% of sales people never follow up with a prospect, 25% make the second contact and stop, only 12% of sales people make more than 3 contacts. 80% of sales are made of the 5th to 12th contact.
I’m trying to get my sales force into shape. One of my people is not a tigress at prospecting; another will call on existing contacts and referrals, but if I send him to a networking event, he might leave without picking up any contacts or business cards. We need qualified leads and it’s taking too much time, trial and error to learn how to get them.
Thoughts of the Day: Make it clear what’s expected. Build a complimentary team. Make sure marketing is doing its part to deliver opportunity. Review results and get people into the right jobs.
Lay out expectations from day one. With existing personnel assigned to sales, go over the basics. Develop a weekly report that people have to complete and talk about.
We use an excel spreadsheet, with rows for the activities expected, and columns for the weeks. Rows include networking, cold calling, sales class, intro letters sent, intro calls made, weekly sales lead group, referral meetings, trade shows. We have 2 rows for each: the first row is to check off if they did the activity. The second row is to record contacts uncovered through those activities. The bottom of the report is where they recap the number of leads identified, qualified, moved into the sales process, and closed.
We show this report to prospective sales people. Existing sales people review it weekly in our staff meetings. Making it clear what’s expected, and that activity, or lack of activity will be visible, helps people who want to be in sales know this is a serious opportunity.
Try to get a mix of people, and get them working together. Include people in operations, who will be talking to customers all the time. On the team you want some people who are good at opening doors, effective networkers: picking up contacts and information about where work is likely to come from. Others on the team should be good at follow up and closing. Consider putting someone from the back office on the job of keeping track of a database of prospects, and review progress weekly.
Check on the number of leads that the company produces for the sales people to follow up on. If it’s very limited, put some more dollars into marketing. The most expensive part of sales is usually door opening. Try to reduce the cost of making new contacts by investing in programs that will identify warm prospects. Letter and mail campaigns, outside vendors assigned to make calls, booths at trade shows, etc. are all ways to get warm leads for the sales people to work on.
Take a look at the spreadsheet after it’s been in use for a couple months. Look at who has been effective at various activities. Make sure you have people assigned to work in the right part of the sales funnel. Someone who’s always going to networking events but never identifying leads either needs training, or needs to spend time doing something more productive. Someone with a lot of leads and very few closes may also need training, or may benefit from being teamed up with a closer to learn how to make things happen more quickly.
Keep in mind that everyone seems to run through hot and cold spells. If someone has low results for a couple of weeks, don’t panic. Take time to talk about what’s going on, and see if there’s some other activity that can be added to the mix that will lead to more results. Give it another couple weeks to take hold. If a drop in results persists, check to see if it’s a warning sign about the viability of the market the person is calling on. Or, is this person just souring on sales altogether, in which case it may time to make a change.
You job as manager is to step back from the action and keep an overview of what’s going on. Move people around. Push up on marketing efforts. Make sure that new activity is flowing steadily through the pipeline. Learn to read the reports to see what’s going on.
Looking for a good book? Talk Less, Say More: Three Habits to Influence Others and Make Things Happen, by Connie Dieken
PDF Version:Ask Andi – Build a Tip-Top Sales Team
April 8th, 2013 — Marketing
It’s embarrassing. Last fall we almost missed out on a trade show that all of our clients and competitors go to. And when we were there, we didn’t do very well at setting ourselves apart. Now the spring shows are upon us, and I want to be sure our firm is represented. Can you help?
Thoughts of the Day: Build a list of target shows. Investigate who goes, and why. Define goals and decide who to send. Figure out how your company can stand out at each show. Review results every month, post show, to insure you get what you want.
Don’t just focus on the shows you go to for your own industry. That’s like being in a room full of competitors and hoping a prospect will pick you. The odds aren’t in your favor.
Build an expanded list of possible shows by asking customers where they go. Do research on your target market’s trade show preferences. Put the data into a spreadsheet organized by show. Winnow it down as you find out who goes where, and why.
If you want to talk to senior financial people, search on the internet for CFO Trade Shows. Looking to sell to IT people? Search for IT Trade Shows. There are also trade show and conference directories to look through for ideas on shows that attract your target market.
Contact event organizers and people who have gone to shows before. Here’s a list of questions to ask:
- Can non-industry companies like ours attend events; any restrictions?
- Are there opportunities for companies like ours to speak or sit on a panel?
- How about hosting or sponsoring an event?
- Were shows well attended last year? Was the advertised target market there (i.e. CFO’s if it’s a CFO conference)?
- Is a list of attendees available before the show? Or after?
- Do attendees have time to meet with vendors?
If you’re considering exhibiting:
- What should an exhibitor expect to pay for access to attendees?
- How many days / hours is an exhibitor likely to have with show attendees?
- Where is the trade show floor located? How far is that from the event registration desk? How far from where the main events are happening?
- What percent of attendees typically visit the trade show floor?
Whether you’re speaking, attending or exhibiting, you can create visibility. Develop a thought leadership theme for each show. Brainstorm what makes your company special, different, important to this group of attendees. Use social media, hand outs, scripts for people walking the floor to get your point across. Press hard to get speaking and panelist opportunities that make your company stand out.
Set goals for each show: # of contacts, # of deals, information gathering, visibility. Review potential trade shows to see which ones fit your company’s goals. Match potential payoff with cost. Factor in travel costs. Project an ROI for each show.
Decide where to go. Select who to send from your company based on likely show attendees. Your sales and customer service people should be with their clients and prospects. Send marketing people to gather intelligence. Resist the temptation to go, just because you’re the owner.
Be organized. Plan to arrive early and stay late. Bring lots of business cards. Have people scheduled to attend specific activities. Use post-card hand outs. Send a card scanner. Have an email follow ready to go. Arrange for secretarial support so your people can work the show all day and evening. Compile a list of contacts and what they need next, to use for post-show follow up.
Review results once people come home. Stay on it. Check in monthly for a year. Make people prove the show was worth it.
Looking for a good book? The Social Trade Show: Leveraging Social Media and Virtual Events to Connect With Your Customers, by Traci Browne.
PDF Version: 4.8.13 – Getting Ready for Trade Shows
April 1st, 2013 — Owner Strategies
The older I get, the more frustrated I get – things come up in the business and I find I just don’t want to deal with them. Seems like sometimes there’s an unwillingness on my part to address the seriousness of the issues at hand.
Thoughts of the Day: Along with ownership come certain responsibilities. When you don’t want to deal with something, figure out why. Lay out a standard way to handle issues, and learn to follow the path you’ve laid out. Give yourself time off.
Business owners have more than one job. The obvious job is selling, making and delivering the sausage – the goods or services of the business. The job behind the job is all about what it takes to keep the business on track and productive. That’s where dealing with underlying issues and challenges comes into play.
Spend time defining your job at the top of the organization. Include in your job description: goal setting, regular review of the company’s overall performance, looking forward to identify new opportunities and ways of doing things, securing the company’s assets and building additional ones for the future. Keep your focus on the big tasks that drive your company forward. Hand off the rest so the company can grow.
Go through your daily routine and identify tasks that get in the way of doing your job as CEO. Are you too deep into details? Assign responsibilities to others. Is there no one to delegate to? Train or replace. Do you get distracted or interrupted? Schedule your time in blocks to help you stay on point.
Set up meetings where you ask people to take action and report back on results. Coach them on what they could do next. Stay out of the mix personally.
Learn to step back and wait it out. Challenge the people around you to deal with more glitches on their own. Remember that a dozen people working to solve problems are likely to accomplish more than you can by controlling all the decisions and actions.
Trying to push forward without perspective can be unproductive. Few problems have to be resolved as quickly as you might think they do. It may be that your desire to delay is actually a helpful trait that gives you time to observe, reflect and decide. Take a look at why you’re delaying. Is it avoidance? Or are you simply giving the situation time to play out?
Find someone you can talk with who is level headed, observes accurately, and helps you sort through options. If you’re alone at the top of the organization find an employee who fills the role of confidant. Have someone who can help you keep things in proportion.
Focus your efforts on becoming a problem diagnostician. There are lots of reasons why things don’t go right in a business. And often the obvious signs are just symptoms covering over bigger issues.
Set up a system to identify and assess problems. List issues on a white board. Map out the obstacles that contribute to, or result from, the problems. Document lessons learned as people deal with the issues that crop up.
Look for common threads. Check in with owners of similar businesses to see if they’re having the same kinds of problems and to find out how they’ve put issues to bed. When issues crop up persistently consider hiring outside expertise to get another view on how to put things back on track.
Ask employees for their advice on how they would solve persistent problems. Get them engaged in the debate and resolution of issues. Teach them to be problem solvers.
When the business goes through a challenging period it’s common to feel a sense of frustration, of burn out, of avoidance. If you feel overwhelmed, give yourself a break. Get away, even for a long weekend. Let others take care of things for you while you take a time out to recharge your batteries.
Looking for a good book? The One Minute Manager Meets The Monkey, by Ken Blanchard.
PDF Version: 4.1.13 – Dealing with Being Boss