Sunday, December 19, 2010

Friends as Employees

“Who ceases to be a friend never was one.” ~Greek Proverb

Every entrepreneur wants to get the best help he or she can. However, hiring friends or befriending employees is a recipe for disaster and should be avoided if possible. Do not mistake being “friendly” and being “friends” as one in the same. You want to be friendly with your staff, but you do not want to be friends with them. There is a vast difference between the two.

Five years ago, a wonderful entrepreneur hired an office manager. This employee’s birthday happened to fall three days after she was hired, and she mentioned to her employer that her parents never really gave her much of a birthday. Hearing this, the entrepreneur went out and bought balloons, flowers and a very nice gift, and even took her out to a very nice lunch. This became a tradition that continued year after year.

The entrepreneur treated this employee as a member of the family and frequently asked her to come along on family get-togethers. Additionally, the entrepreneur kept giving this employee raises as she just could not say no to her friend. Consequently, the employee was being grossly overpaid for the work she was doing.
Over time, as the line between “employee” and “friend” became increasingly blurred, the entrepreneur began to see issues with the employee’s performance. She frequently found work that the employee had not done, but she never brought it up because she feared hurting the employee’s feelings.

The obvious solution was to let this employee go – these issues were more than sufficient to justify termination of a normal employee. But this entrepreneur had not treated this worker as a normal employee. She was a friend, and the entrepreneur was reluctant to take any action knowing the friendship would be lost.

In addition, the employee and entrepreneur shared a strong bond reinforced daily by their close working relationship. Their desks were adjacent to one another, and the entrepreneur just could not see herself running the business without this employee. She felt she was invaluable to the firm.

If not for the economic downturn, this cozy relationship would have continued indefinitely. However, as cash became tight, the entrepreneur was forced to look at all possibilities for cutting costs. As it turned out, the only element she could really control was this employee’s salary.

This was a very difficult decision for this entrepreneur, and I spent a lot of time working with her. Once I was able to articulate that all of the problems they were experiencing with the business revolved around this one employee, the entrepreneur understood what was necessary.

Did I say anything that the entrepreneur had not already considered? No. All I did was reinforce what she knew to be true. That is why advice from an outside consultant is so useful.

The entrepreneur is now in the process now of finding a replacement at a much lower salary. She has promised me that she will not make the same mistake again by befriending the new employee.

Now go out and see if a friendship you have with an employee is negatively affecting your company’s morale or the employee’s performance. If it is, you must either step back into a more professional relationship or consider letting this employee go. This will not be easy, but these issues must be addressed for the well being of your business.

You can do this!

Sunday, December 12, 2010

Employee Input Or In The Catfish Line

“It takes a great man to be a good listener.” ~ Calvin Coolidge

There is no question in my mind that listening to your employees is almost as important as listening to your customers. Time and again, I see entrepreneurs underestimate the value of their employees’ opinions. Many times, entrepreneurs think they are the only ones who know how to improve their business, and it never even occurs to them to ask their staff how they might make it better.

Ignoring your staff is equivalent to a physician ignoring a patient’s concerns. In both cases, valuable information is lost and major damage can be done.

There is a neat company called King Arthur’s Tools. The company is run by Arthur and Pamela Aveling, who in the interests of fair disclosure, are also my good friends and clients of the Jim Moran Institute for more than 12 years.

King Arthur’s sells woodworking tools to both distributors and hobbyists. They either buy or manufacture to their specifications the various components of these tools. When an order is received, a packing slip is generated and sent to the warehouse, where most of the packing is handled by Warehouse Manager Henry Williams. A very loyal and hardworking employee, Henry has been with King Arthur’s for more than three years.

At one of King Arthur’s retreats, the staff was working on the company’s core values. After much discussion, Arthur asked Henry if he could think of anything that could improve his operation. Without hesitation, Henry said that he would like to have cards made identifying him as the one who packed the goods. He thought doing so would reduce the rate of error.

Everyone agreed that this would be a neat idea, and Henry and the staff got to work making the cards the very next day. They came up with three versions. Each version had a different message on it, but all of them included Henry’s picture and the phrase, “Packed with care by Henry.” The three alternate messages were as follows:
1. It was my pleasure assembling your order, and I hope you enjoy using your King Arthur’s tools on your project.
2. Your order was packed with care by Henry. Thank you.
3. King Arthur’s Tools loves to see what customers make with their tools. Post your photos on Facebook.

The response to these cards has been overwhelming. So many customers have commented on how much they liked them and what a neat concept it was. Many customers even called to thank Henry personally for their order.

The cost of implementing this idea was minimal, but the value was considerable. It improved the company’s relationship with their customers and made Henry feel good about what he is doing. It all came about because Arthur and Pamela Aveling were willing to listen to their staff.

Now go out and make sure that you are listening to both your customers and your employees. The best way to get input from your employees is simply to ask for it. Ask your staff if there is anything they think the company can do better. Even if some do not have something to contribute, they’ll know you welcome their input, which is invaluable.

You can do this!

Sunday, December 5, 2010

In the catfish line.

"Trust is the lubrication that makes it possible for organizations to work." ~Warren Bennis

Business is about relationships. These relationships can be with employees, customers or potential customers, and a host of others. Most people would rather deal with someone they know and trust than with a stranger. Just like the old cliché says, it is not what you know, but who you know that determines success.

So many times I have seen struggling entrepreneurs happen to mention their business problems to an acquaintance, who gets them connected with large potential customers. All this comes about because of a relationship between two people.

For this and so many other reasons, relationships are vital to each and every business, and you just never know when or where a relationship will be formed. You must constantly be on the lookout for opportunities to make connections.

About a year ago, I attended the Broward Urban League Gala as my new job with JMI has me helping minority entrepreneurs at Broward College. At the gala, they had multiple serving lines, one of which was for fresh fried catfish.

While standing in the catfish line, I started talking with the very nice couple ahead of me. The man’s name was Ed Key, and he was employed as an administrator at Broward College. We hit it off, so I suggested that we have lunch in a couple of days.

During this lunch, I mentioned that we were coaching minority entrepreneurs and organizing a minority business conference. Without me asking, Ed put me in contact with Norm Seavers, the head of their Entrepreneurship Institute. When I met with Norm, he stepped in and agreed to allow us to hold our minority business conference at their venue and to provide so much other assistance that we needed.

I began mentoring Ed, meeting with him every month during my visits to South Florida. During one of our meetings, he brought a friend of his, Marcell Haywood, with him. Marcell is a very successful entrepreneur, the owner of a company called Dirt Pros EVS. Starting only five years ago with a $300 investment, he has grown this business to over $5 million in sales.

I was so impressed with Marcell. Though he holds a master’s degree, he does not have a formal education in business, yet he has been so successful. During lunch, I asked Marcell if he would be the keynote speaker at our conference, and he agreed.

Our conference was a great success, and Marcell’s talk was the hit of the day. This outcome can be attributed, in large part, to a conversation I had with a stranger in the fried catfish line.

Now go out and work on improving as many relationships as you can. You never know how they will pay off.

You can do this.