Entries from February 2011 ↓

The Team Is Not Right

We have problems with our staff. We’ve lowered our standards, accepted mediocrity. If a person doesn’t want to do something, we don’t deal with it. I can’t just throw more people at the problem, or I’ll go broke. How do I fix this?

At least you recognize there’s a problem. Start looking from the top down. Are there performance standards? Do special players get special treatment? Who is responsible for what, and are they doing their jobs?

Most companies have been looking at ways to cut costs, and by now they’ve pulled down all the low hanging fruit. Getting further improvement will come from increasing staff performance by having the right people, properly trained and supervised, doing specific jobs. Overlooking problems has to be a thing of the past.

Make sure managers know that they are responsible for enforcing rules, work ethic and quality. Meet with supervisors regularly to quiz them on what’s happening. Find out specifically what they’re doing to make improvements.

Resist the temptation to step in and take over. If you step in, you get busier and the people you step over learn to let you do their work. If you’re tempted to step in, it’s probably because someone isn’t doing his or her job. Deal with the core problem. Get that person to step up, or move out – and line up someone else to move in.

Set up ways to supervise performance. Spot check work. Work side-by-side with people. Find out who’s trying, and who’s making excuses.

Start with the daily tone. When people clock in for work, expect to have their full attention. Personal calls are limited to breaks. Tell people to arrive on time by being 5 minutes early. Spend time at the end of the day wrapping things up, rather than leaving problems and open issues for the next day.

When you see performance problems, address them immediately, swiftly. Tell the person who’s having the problem what’s expected. If you think they’re capable of learning, get them a teacher. If not, ask them to step down into a less stressful job or show them the door.

Many managers hesitate to ask people to leave the company. They worry about the human side, that people won’t be able to find another job in this economy. The flip side is that if someone isn’t doing their job properly, that could end up jeopardizing the entire company, and then everyone will be out of work.

Employees and supervisors must actively communicate and coordinate. Use technology to report on what’s done, and to assess profitability. Set up a schedule of meetings to insure people take time to get together. Look at systems available in your industry that can help your company share information and report on productivity, cost and quality.

As the owner, you’re a role model for everyone. Show people how to improve. Demand and give respect. Be clear what it is that you want. Be a teacher and a leader.

If you get frustrated, take a break. Step away before you do more harm than good. Avoid bullying people. Ask people to be responsible. Focus attention and rewards on those people who can meet your standards. If no one is meeting your standards, reconsider what you’re asking of everyone.

Managing personnel in a quality driven environment, takes time to build up. It won’t happen overnight. Stay on top of the details, be consistent, put your demands in writing for everyone to see. Make sure you have a no-exceptions environment, where everyone is held to the same standard.

Finally, keep in mind that now is a good time to look for new hires. Something like 85% of employees plan to seek a different job as the economy turns up. Someone’s need for change may turn into your next great employee. Put feelers out, interview constantly, and when you find someone great, consider where they might fit in your organization.

Looking for a good book? Analyzing Performance Problems: Or, You Really Oughta Wanna – How to Figure out Why People Aren’t Doing What They Should be, and What to do About It, by Robert F. Mager.

______________________________________

Andi Gray is president of Strategy Leaders Inc., www.StrategyLeaders.com, a business consulting firm that specializes in helping entrepreneurial firms grow. She can be reached by phone at 877-238-3535. Do you have a question for Andi?  Please send it to her, via e-mail at AskAndi@StrategyLeaders.com or by mail to Andi Gray, Strategy Leaders Inc., 5 Crossways, Chappaqua, NY 10514. Visit www.AskAndi.com for an entire library of Ask Andi articles.

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Losing the Growth Battle?

What can I do to get growth? Last year wasn’t bad, but we’ve been stuck in the same revenue rut for several years now. If I have another year of just making ends meet, I feel like I’ll be ready to throw in the towel.

Most businesses, like people, run into their Peter Principle – they max out what they know, and stop making progress. Most small businesses make enough to get by year after year, but that’s about it. Growing a business long term means building a growth engine.

 

When an organization’s sales get stuck, the company starts losing ground. Costs continue to rise, from overhead, transportation and materials to personnel. The net effect is that as sales and net income decline, the owners take the hit in reduced payout.

Get on track by assessing your firm’s sales ability:

  • What are the steps of the sales process; are they in the right order?
  • Does enough information gathering happen early on? Is there a standard list of questions that people ask?
  • Is your team always clear about who’s the decision maker, and who are the decision influencers?
  • Is the proposal a written confirmation of what’s already been agreed to, rather than a shot in the dark?
  • Is the close ratio from stage to stage good enough; what can be done to improve?

At some point, the size of your sales team needs to expand in order to bring in more business. What is the typical amount of sales an average sales person / sales team can bring in? Compare that to the amount of sales expected for the coming year. Is it time to do some recruiting in order to grow revenue?

When looking to add to your sales organization, decide if you need lead generation, or closing skills. Many business owners make the mistake of thinking they need someone who can close sales, when what they really need are more quality leads to follow up on. Do you need to find new prospective companies to do business with (hunting), or nurture existing client relationships for additional opportunities (farming)? Make sure you understand where the potential is, and hire the right person for the job.

Do you know what to look for in sales candidates? Hiring sales people isn’t like filling any other position in the company. In fact, it’s counter intuitive, and many organizations end up screening out some of the best candidates because they’re hard to deal with and pushy – which is exactly what you want in a sales person.

Many business owners shy away from working with recruiters to hire sales people, because they don’t want to pay the fees. Think about what a shortfall in sales will cost your company in net income this year. It may pay to get expert assistance to insure you get the position filled soon with a great candidate.

Once you add another person to your sales team, make sure you have a good on-boarding process. A clear set of goals, training on the sales process, and education on the company’s products or services are all essential. Lay out a 30, 60, 90 day action plan to clarify what’s expected.

Not sure what kind of growth to pursue? 15% revenue increase year-over-year is generally the most profitable way to grow – it gives you time to work on growing profits even faster than sales, which is the real game! You may be able to get away with a one time leap of 20% – 25%. Make sure you can hit an additional 15% growth the next year.

When looking at the sales plan, make sure that you’re growing the right products or services. Calculate gross profit for each product or service that your company sells. Include selling costs to support the growth of each area. Focus on those items that are going to be the easiest to manage and most profitable to sell. Give the sales force specific direction on where you want them to focus and deliver.

Looking for a good book? The Sales Growth Imperative: How World Class Organizations Successfully Manage the Four Stages of Growth, by David J. Cichelli.

______________________________________

Andi Gray is president of Strategy Leaders Inc., www.StrategyLeaders.com, a business consulting firm that specializes in helping entrepreneurial firms grow. She can be reached by phone at 877-238-3535. Do you have a question for Andi?  Please send it to her, via e-mail at AskAndi@StrategyLeaders.com or by mail to Andi Gray, Strategy Leaders Inc., 5 Crossways, Chappaqua, NY 10514. Visit www.AskAndi.com for an entire library of Ask Andi articles.

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Client Retention & Lost Opportunities

I am concerned that we’ve lost a few clients recently, and I’m pretty sure it’s our fault. We’re not doing as good a job as we used to at meeting our clients’ expectations. We’ve cut back, maybe too much, to keep costs in line. Some of our clients aren’t getting the quality of service they’re used to. And some of our staff doesn’t get how important it is that we all stretch to meet client demands and keep what we still have. Some days it just seems overwhelming. Any suggestions?

The good news is, you recognize there’s a problem. The bad news is, you’re probably right, it may not be simple to fix. This is an economy in which everyone is trying to do more with less. The winners are likely to be those companies that figure out how to do just that.

Find out how serious things are with the clients you still have. Understand what current clients want. Check on any damage to your company’s reputation. Tell your employees you expect them to step up to the plate and do everything possible to hang onto current clients.

If you aren’t in contact with your current clients, get in touch quickly. Assign people specific accounts, and ask for written reports back once they’ve made contact. Prepare a standard briefing package and a list of questions to ask. The briefing package should include:

  • key contacts and titles
  • length of time as a client
  • products or services the client purchases
  • known opportunities for additional products or services

The list of questions to ask clients might include:

  • on a scale of 1-10, how satisfied is the client with the products or services it receives (anything below 7 is unacceptable)
  • what, specifically, does the client need or want
  • has service gone up, down, or stayed the same over the past year
  • how does each client rate their overall business climate (look for co-relation between the client being in trouble, and your sales falling off as a result – which means it’s not you, it’s your client base)
  • has the client seen anything interesting from competitors that they would like your company to address
  • what can your company do to turn the client into a raving fan

Make sure to express genuine interest in keeping each client’s business.

Assign someone the job of finding out where the lost accounts went, and why. Look for themes. Find out if you’re the target of a competitive attack. Ask past clients to come back.

Check on your company and industry reputation. Do an online search for both, combined with words like, “complaints” and “problems”. If something comes up, fix the problem and get help with damage repair. Make certain that all complaint letters land on your desk and get top priority viewing.

Insure that all of your employees understand how critical it is that clients’ needs be met. If you’re hearing complaints from staff, address it openly. With limited resources, everyone has to be on board with helping to secure clients by keeping them satisfied. Be adamant. Don’t accept excuses. If necessary make staffing changes – you can’t afford to lose more clients because of employee problems.

Once you have a better handle on why clients left, where your current clients stand, and your employees understand the urgency of the situation, it’s time to put longer term solutions in place. Decide if you have to add products or services, or simply increase the volume of what you already provide.

Consider acquiring another business, to pick up both revenue and talent. Look for businesses to partner with, selling related but not identical services or products. Combining forces may allow you both to provide more support and increase sales for each other.

The sooner you lay out a plan of attack, the better your chances of survival. Get your foundation laid. Then decide on where you want the business to go next, and start making it happen.

Looking for a good book? Satisfied Customers Tell Three Friends, Angry Customers Tell 3,000: Running a Business in Today’s Consumer-Driven World, by Pete Blackshaw.

______________________________________

Andi Gray is president of Strategy Leaders Inc., www.StrategyLeaders.com, a business consulting firm that specializes in helping entrepreneurial firms grow. She can be reached by phone at 877-238-3535. Do you have a question for Andi?  Please send it to her, via e-mail at AskAndi@StrategyLeaders.com or by mail to Andi Gray, Strategy Leaders Inc., 5 Crossways, Chappaqua, NY 10514. Visit www.AskAndi.com for an entire library of Ask Andi articles.

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I am concerned that we’ve lost a few clients recently, and I’m pretty sure it’s our fault. We’re not doing as good a job as we used to at meeting our clients’ expectations. We’ve cut back, maybe too much, to keep costs in line. Some of our clients aren’t getting the quality of service they’re used to. And some of our staff doesn’t get how important it is that we all stretch to meet client demands and keep what we still have. Some days it just seems overwhelming. Any suggestions?

The good news is, you recognize there’s a problem. The bad news is, you’re probably right, it may not be simple to fix. This is an economy in which everyone is trying to do more with less. The winners are likely to be those companies that figure out how to do just that.

Find out how serious things are with the clients you still have. Understand what current clients want. Check on any damage to your company’s reputation. Tell your employees you expect them to step up to the plate and do everything possible to hang onto current clients.

If you aren’t in contact with your current clients, get in touch quickly. Assign people specific accounts, and ask for written reports back once they’ve made contact. Prepare a standard briefing package and a list of questions to ask. The briefing package should include:

  • key contacts and titles
  • length of time as a client
  • products or services the client purchases
  • known opportunities for additional products or services

The list of questions to ask clients might include:

  • on a scale of 1-10, how satisfied is the client with the products or services it receives (anything below 7 is unacceptable)
  • what, specifically, does the client need or want
  • has service gone up, down, or stayed the same over the past year
  • how does each client rate their overall business climate (look for co-relation between the client being in trouble, and your sales falling off as a result – which means it’s not you, it’s your client base)
  • has the client seen anything interesting from competitors that they would like your company to address
  • what can your company do to turn the client into a raving fan

Make sure to express genuine interest in keeping each client’s business.

Assign someone the job of finding out where the lost accounts went, and why. Look for themes. Find out if you’re the target of a competitive attack. Ask past clients to come back.

Check on your company and industry reputation. Do an online search for both, combined with words like, “complaints” and “problems”. If something comes up, fix the problem and get help with damage repair. Make certain that all complaint letters land on your desk and get top priority viewing.

Insure that all of your employees understand how critical it is that clients’ needs be met. If you’re hearing complaints from staff, address it openly. With limited resources, everyone has to be on board with helping to secure clients by keeping them satisfied. Be adamant. Don’t accept excuses. If necessary make staffing changes – you can’t afford to lose more clients because of employee problems.

Once you have a better handle on why clients left, where your current clients stand, and your employees understand the urgency of the situation, it’s time to put longer term solutions in place. Decide if you have to add products or services, or simply increase the volume of what you already provide.

Consider acquiring another business, to pick up both revenue and talent. Look for businesses to partner with, selling related but not identical services or products. Combining forces may allow you both to provide more support and increase sales for each other.

The sooner you lay out a plan of attack, the better your chances of survival. Get your foundation laid. Then decide on where you want the business to go next, and start making it happen.

Looking for a good book? Satisfied Customers Tell Three Friends, Angry Customers Tell 3,000: Running a Business in Today’s Consumer-Driven World, by Pete Blackshaw.

______________________________________

Andi Gray is president of Strategy Leaders Inc., www.StrategyLeaders.com, a business consulting firm that specializes in helping entrepreneurial firms grow. She can be reached by phone at 877-238-3535. Do you have a question for Andi? Please send it to her, via e-mail at AskAndi@StrategyLeaders.com or by mail to Andi Gray, Strategy Leaders Inc., 5 Crossways, Chappaqua, NY 10514. Visit www.AskAndi.com for an entire library of Ask Andi articles.

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The Ups and Downs of Managing a Family Business

My wife, my children and I own a business together. My wife and I started the business, and we’re delighted our children chose to join us. Unfortunately we don’t always see eye to eye about things. Any suggestions you have for managing a family owned business would be appreciated.

Family owned businesses are the predominant business form in the United States, in terms of numbers of businesses operating. The running of a family owned business can sometimes seem non-stop. From the time you get up, conversations at breakfast, the hours you spend at work, discussion over the dinner table, and even pillow talk at night, for many families the business never seems far away.

Keep things on track by being clear about where the business is going, how it is governed, who has decision making authority over which decisions. Keep the peace by respecting differences in decision making and actions, while monitoring what gets done and identifying where to pitch in to help. Recognize that businesses and people need to make mistakes to learn and grow – encourage risk taking within boundaries. Finally, remember, very little goes wrong that can’t be corrected – have patience and care for your business partners / family members.

If your family owned business is like most other businesses, you may talk about where you’re going, but there’s very little in writing. A clearly written set of short and long term goals can keep everyone headed in the same direction. An action plan, with specific next steps, dates and assignments can make it clear who will be doing what. Regular meetings to review progress can clarify what’s done, what’s next, and who might need help.

Use governing principles to guide the business:

  • set short and long term goals for all areas of the business
  • build specific action steps lists, so everyone is aware of what’s expected
  • meet weekly to review and update plans and action steps
  • set a growth rate of 15% year over year – and then hit it every year
  • focus on growing profits faster than revenue
  • maintain reserve funds worth 3+ months of expenses
  • build a forecast and a budget – and then use them to run the company
  • be able to sell half again as much as is needed each year
  • sell old products to new customers and new products to old customers
  • develop a multi-pronged marketing plan, measure payoff regularly
  • define the organization chart, responsibilities and pay structure
  • regularly review individual performance, in writing
  • ask each person to build and implement an individual education plan
  • define the exit strategy for the senior generation

By now, you may be thinking, this list sounds just like a list of governing principles for any business, not just family owned. That’s the point. Run it like any business, and the company will likely prosper.

One skill to practice, especially in a family owned business, is learning to keep your mouth shut and wait until your input is requested. It’s so tempting to interrupt when you see a need for advice. But if it’s not your area of responsibility, butting in may be seen as just that – un-asked for assistance that’s not welcome.

Parents especially have a desire to help their children by protecting them. Unfortunately in the world of business, like life, it’s often the rule: that which doesn’t kill you makes you stronger. Encourage people to build strength and skill by making mistakes and learning to recover.

Before you try to step in, ask yourself this: is what’s going on likely to permanently jeopardize the business in a major way. If the answer is, “No” or “Not likely”, then let things play out. If the answer is, “Yes”, or “Very possibly”, then call a meeting to discuss your concerns. If there’s serious disagreement, ask the group to participate in decisions about how far to go, and where to draw the line. And be prepared to respect the wishes of the group.

Looking for a good book? Family Business by Ernesto J. Pozza.

______________________________________

Andi Gray is president of Strategy Leaders Inc., www.StrategyLeaders.com, a business consulting firm that specializes in helping entrepreneurial firms grow. She can be reached by phone at 877-238-3535. Do you have a question for Andi?  Please send it to her, via e-mail at AskAndi@StrategyLeaders.com or by mail to Andi Gray, Strategy Leaders Inc., 5 Crossways, Chappaqua, NY 10514. Visit www.AskAndi.com for an entire library of Ask Andi articles.

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