Managing the Average Employee

"Hire the best. Pay them fairly. Communicate frequently. Provide challenges and rewards. Believe in them. Get out of their way and they'll knock your socks off." ~Mary Ann Allison

So much has been written about rewarding great employees and rehabilitating poor employees. However, the vast majority of the workforce does not fall into either of these categories. Most fall somewhere in the middle. I call them “c-employees.”

C-employees make up more than 80 percent of the average entrepreneur’s workforce. This group is responsible for the majority of output, yet they are all but ignored by most managers. Because they are doing ok, performing at an adequate level and not causing any problems, it is easy to overlook c-employees. But this is a dangerous path. C-employees must be managed – and managed well – in order for the organization to flourish.

A firm we were helping had a policy of rewarding great employees with cash incentives and a tough policy against staff that was performing poorly. C-employees were completely ignored, producing results that you would expect: morale had suffered dramatically. It never occurred to management that these c-employees would feel left out. They thought that since this group was not upset or complaining, everything must be okay.

It is natural for managers to want to work with their better employees since they typically share a similar work ethic, but they have to resist the temptation to devote all their time and attention to top performers. This is not to say that it is not worthwhile or productive to spend time with your better employees. Managers just must make sure that all employees are receiving a minimum level of attention. You simply can not neglect a staff member without paying a price.

Teamwork is not possible unless each worker feels like they are an important part of the team. It is every manager’s job to ensure that each member of their staff feels good about what they are doing, and that they are valued and appreciated.

To ensure my staff felt like an important part of the team, I always made it a point to greet them whenever I saw them and engage them in conversation about something they valued. Whether this topic was their family or a personal hobby, the point was spending quality time with each member of my staff and connecting on a personal level. I tried to go out of my way as often as I could so that every employee – top performer or otherwise – knew that I thought they were important.

Now go out and make sure that all your employees feel appreciated regardless of their performance level. Of course, you want to see them improve, but you can not expect your staff to up their efforts unless they know their current contributions are recognized and valued.

You can do this.

Focus Your Emphasis on Your Successes

“Don't wait until everything is just right. It will never be perfect. There will always be challenges, obstacles and less than perfect conditions. So what. Get started now. With each step you take, you will grow stronger and stronger, more and more skilled, more and more successful.” ~Victor Hansen

As part of my job, I have talked to and counseled thousands of entrepreneurs. Once I have established a relationship with the entrepreneur, I walk them through the process of listing their successes and challenges to identify what we need to do to fix the business problem. Most often, they want to focus exclusively on their challenges and how they can overcome them.

For some reason, our challenges carry more weight in our lives than our successes. But if improvement is our goal, focusing solely on the challenges that stand in our way is not really the best method of getting there.

In the spiritual world there is a theory known as the Law of Attraction. The premise is that what you choose to focus on determines the things that come into your life. Honing in on the negative will produce negative effects, while reflecting on the positive will bring positive results.

Many probably remember “The Secret,” a very good DVD that came out a couple of years ago. This DVD covered the Law of Attraction and provided tons of examples and testimonials. Story after story was presented as proof of the Law’s primary assertion: focusing on the negative – your weakness – will only manifest as greater weakness.

I am a frequent speaker, and over the last 15 years, I have probably given more than 500 speeches. Additionally, as a professor, I have given lectures three times a week for the last 38 years. Clearly, public speaking is a critical element of my career, and you might be surprised to learn of a very large weakness of mine.

I have stuttered since I was three years old when my mother first took me to speech instruction to get help. I can remember times in high school when my stuttering was so bad that I could not even say the word “water.” I had to say “H2O” instead. To this day, my stuttering comes and goes depending on my stress level – stress dramatically affects my vocal cords.

From medication to speech therapy, I have tried a number of methods for controlling my stuttering. Only one thing has ever worked. The approach that produces the best results is focusing on times that I have been successful.

In years past, when I concentrated on trying not to stutter, it was worse than ever. I have adopted a different approach. Instead of focusing on my weakness, I think about how many speeches I have successfully given, or I visualize how great this speech is going to be. When I focus on my successes in this way, my speeches are normally great.

Many of the entrepreneurs we work with focus on their challenges, and of course, they generate more and more challenges as a result. One entrepreneur just wanted to talk about how poorly he understood financial statements. He was great at marketing and sales, but he did not acknowledge his strengths. He just went on and on about how he could not comprehend this element of his business.

The first thing we did was change his primary focus. Instead of honing in on the things he lacked, we focused on his strengths. This is not to say however, that we ignored his weakness. We got him set up with some great accounting help, but he came at it from a different angle, one where he focused on the things he did well.

Another entrepreneur we worked with was extremely skilled in systems implementation, but weak in the area of communications. When we focused on his strengths, his business improved dramatically, and we were able to solve the communication issue by hiring a communications director to handle the task he was not as good at.

Focusing on your strengths seems like such a simple concept, but it is one that we all tend to forget about. Most often, we dwell on our weaknesses, a practice that serves neither us nor our business.

Now go out and make sure that you are focusing on your strengths.

You can do this!

Make sure you include overhead in your pricing!

“Profit and morality are a hard combination to beat.” ~Hubert Humphrey

So many of the business owners we help have difficulty dealing with pricing. The question of where to set their prices is a critical one for every company. If set too high, the firm will not pick up much business. If set too low, they will have sales volume but no profits.

Just because a business is maximizing sales does not necessarily mean they are making money. Having revenue coming in is not the same as making a profit, but many business owners confuse the two, especially in a tight economy.

We were helping a very neat company, the owners of which really care about the community. It is important to them to do all they can to make their community a better place to live. They are constantly volunteering for so many activities, and as a result, they have added a great deal of value to the local community. In the process, they have also earned quite a bit of notoriety for their company.

While these entrepreneurs have done an enormous amount of good for the community, their business was not doing so well. They were not taking much of a salary even though the company has been in business for more than five years and is well-established. Although a tad flat, their revenues were okay, but they were not generating sufficient profits. Their net profit margin continuously hovered around one percent after paying themselves their miniscule salary

Being a service business, they were charging by the hour. They were taking just about every piece of business that walked through the door so long as they were able to cover their direct labor expenses and generate a 10 percent profit.

What they forgot to account for in their pricing model is their overhead. Fixed expenses such as rent, office salaries and utilities, to name just a few, have to be paid regardless of the amount of revenue. In the end, they were having to divert about 50 percent of their revenue to cover overhead costs.

By failing to account for overhead in their pricing model, they seriously underestimated the true cost of their services. If each customer is not assigned a fair and equal share of the overhead, one must shoulder the entire burden – or the owner loses a lot of money.

We were able to get this point across to the owners, but they still had reservations about adjusting their pricing model to include the overhead. They feared many of their customers would think their rates were too high. We suggested that the way to overcome this was to price by the job instead of by the hour. This would allow them to charge the fees they need to cover the overhead and still be competitive.

The jury is still out on this business, but the owners now have a plan for profitability that will allow them to grow and be successful. Even more importantly, they can now start taking a salary that fairly compensates them for their efforts.

Now go out and make sure the pricing model you set for your products and services is sufficient to cover all of your costs, including the overhead. If you cannot charge a high enough price to cover your direct costs, overhead and profits, you need to find another way to ensure those expenses are covered.

You can do this!

Promote Your Business

“For every sale you miss because you're too enthusiastic, you will miss a hundred because you're not enthusiastic enough.” ~Zig Ziglar

Repeat customers are invaluable. Whatever your business, you must do everything you can to encourage your customers to come back after each visit, whether online or in person.

I recently took my grandson to Five Guys, a very successful franchise that has more than 625 restaurants. Though I had never tried the restaurant before, I thought my grandson might like it. Turns out, he had been to one before, and I was right, he loved it!

When you walk in, lining each wall are large signs with quotes from newspapers all across the country. Though the words differ from one sign to the next, each quote boils down to one basic message: Five Guys is a great restaurant.

Obviously, the purpose of these wall quotes is not to bring in new customers but to encourage their existing customers to return. By posting these testimonials, I believe Five Guys is sending their patrons the following message: we are a great restaurant, and you need to come back if you want to be part of the experience.

Whether the food is good or not is immaterial to this message. They are simply making the point that eating at Five Guys is a great experience. For my part, I left wanting to come back with my grandson just to feel like I was part of this group of people who loved their food.

Another form of self-promotion is the on-hold telephone message. A study showed that 70 percent of business callers are put on hold sometime during their call. To take advantage of this time with their customers, many firms use these recording to softly sell their products or services. Since the customer has to listen, it is a great opportunity to pitch your products, but again, it must be a soft sell.

Many vendors provide this service, and you can locate them simply by Googling “on-hold advertising.” Costs range from $50 to $200 or more per month. Included in this cost are periodic updates and many of the front-end production expenses. It may seem pricey, but users of on-hold advertising say that they recovered the cost almost immediately and continue to see a return on investment over time.

Both of these methods allow you to promote yourself to your existing customers in a very inexpensive way. Of course, there are many other approaches, and you just need to find the vehicle that works best for your company. The critical issue is that you must make a continuous effort to transform current customers into return customers.

Now go out and find ways to promote your businesses to your existing customers!

You can do this!

Hiring Consultans

"I am a little concerned that some of the measures that are proposed may simply increase the number of consultants who are telling businesses what they already know." ~Alasdair Morgan

At one time or another, every business will need assistance from a consultant to grow, merge, improve profitability or address some other area of concern. Small businesses just cannot afford to have an IT or HR expert on staff. Consultants provide a very effective alternative, enabling small business owners to access the expertise they need without having a full-time employee dedicated to the specific area in question.

Before hiring a consultant, you must first determine what the real issue is. In many cases, this is much more difficult than it sounds. We are frequently called in to help an entrepreneur with a marketing problem only to discover that the critical issue is actually cash flow. The entrepreneur did not realize cash flow was the problem until we asked some critical questions and examined relevant data.

Some issues such as producing an employee manual are easy to match with the appropriate consultant, but most issues are not nearly as clear. Through careful evaluation, you must identify the correct problem and hire the correct consultant.

As with any expense, you should exercise due diligence when selecting a consultant. Just because one comes highly recommended by a friend or fellow entrepreneur does not mean that they are the best option for you. So much about selecting a consultant involves personal chemistry. To be successful, the consultant must have a good rapport with you and your staff. If chemistry and trust are absent, neither you nor your staff will accept the consultant’s advice.

Price or hourly rate is not the most important factor to consider when hiring a consultant. Frequently you will find that the quality of the consultant correlates with the fee they charge. That is to say, the consultant who charges the lowest fee is often the worst one you can find.

Rather than focusing on the cost, you should consider the value of their results. It is so much better to pay more and get more value than to go for the bargain basement consultant just to save a few bucks.

Another vital consideration when hiring a consultant is your willingness to accept the results. After meeting with an entrepreneur and making suggestions for improvement, we frequently find that they have received the exact same recommendations from a former consultant. When we ask why they did not follow through with the suggestions, they typically say they were too busy.

Bottom line here is if you are going to hire an expert, you must make a commitment to try the recommendations. If they do not work, jettison them, but not even trying is neither effective nor constructive.

When you find yourself in need of an expert’s services, hire a consultant that will add value to your company. Before you make a selection, however, make sure that you have identified and defined the problem that you would like them to address with some degree of specificity. Additionally, make a commitment to follow through and give their recommendations a try.

You can do this!

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Email: A Blessing or a Curse?

“Take advantage of every opportunity to practice your communication skills so that when important occasions arise, you will have the gift, the style, the sharpness, the clarity, and the emotions to affect other people.” ~Jim Rohn

Of all the technologies that have emerged for communications in the last couple of decades, email is among the most revolutionary. It has completely changed the way we communicate, making it so much easier than any other method that has been available in the last 20 years.

At one time, typewriters were a critical element for communicating via U.S. Mail. It was such a slow and cumbersome process. I still remember struggling to align the paper, and making a correction was very, very difficult.

However, despite all the improvements and efficiencies email brought with it, there are a number of issues that users should be aware of. By far, the most important of these is that once you hit send, it is nearly impossible to recover or amend the message.

In light of this, proofreading is absolutely critical. And more than just checking for grammatical errors, you should be verifying that you have said exactly what you mean and are aware of how your message might be interpreted.

Additionally, email and emotion are a dangerous combination. If you are having strong feelings of any kind – positive or negative – it is best to wait until your emotions settle before hitting send. The fallout from an inappropriate email can be devastating.

I have seen managers send out an angry email to a staff member who messed up, only to realize later that they acted before they had all the facts. The damage from this kind of email can never be repaired.

Another shortcoming of email is that it is a flat form of communication. Consisting of nothing more than words, it is impossible to communicate emotion via email. People often forget this fact and send email messages that really should be delivered in person.

Sending an email to congratulate a team member on some accomplishment, for example, may fall short of the mark since you can not really express your feelings of joy. You would really want to deliver a message like this in a face-to-face meeting or in front of his or her entire team.

Most people, including me, get way too many emails, and one thing that absolutely drives me crazy is receiving a message that covers three or four different items. Sending a message like this significantly impairs the receiver’s ability to respond quickly.

When I receive emails that cover more than one topic, it automatically drops down on my priority list because I have to save the message until I have more time to respond. For this reason, it is so important to cover only one point in each message. You will find that people will respond much more quickly to one-topic emails.

Another of my email pet peeves is long narratives. Most decision makers want just the facts. Email is not a good place to practice elegant writing 101. I want an email that is no longer than one paragraph so I can quickly respond with a short answer. Most people are so limited on time that brevity must be the rule and not the exception with this medium.

The subject line is another critical element. In order to get your message read, the subject line must be both precise and accurate. One entrepreneur wrote “important” in the subject line of every single email she sent. Eventually, her staff began ignoring her messages. The more precise your subject line, the more successful the communication will be.

Lastly, email should not be used to communicate anything that is really important or personal. If you want to tell a staff member about a problem you are having with their work, email is just not appropriate.

For instance, if I have an employee that has not been meeting their sales goals, sending them an email about improving their numbers is going to do more to irritate them than accomplish anything of value. It really is best to address an issue like this in a face-to-face meeting that allows you to discuss how you can work with them to improve their sales.

Overall, email is a very effective communication tool, but it should not be your default. It is just not always going to be the appropriate choice. Now go out and make sure that you are using emails effectively in your organization.

You can do this!

Customer Service Facts

"The single most important thing to remember about any enterprise is that there are no results inside its walls. The result of a business is a satisfied customer." ~Peter Drucker

Because customer service errors are so glaring and so easy to fix, I focus heavily on this topic in my articles. Recently however, a reader wrote to me (I respond to every email) saying that while she was a believer in the power of great customer service, her boss needed some convincing. She wanted to know what facts I could provide to persuade her boss that improving customer service would increase the company’s ROI.

Right then and there, it occurred to me that for all the time I spend writing about this topic, I have failed to give enough empirical data to support the merits of improving customer service.

A very impressive company named TARP (completely unrelated to the government bailout of banks) has been providing a great service since 1971. This company works with the most renowned firms in our country collecting data on customer service. Their website, http://tarp.com/home.html, offers an ROI calculator that computes the ROI you can anticipate when improving customer service.

TARP reports that 68 percent of customer defection results when customers feel they have been poorly treated. In a similar situation, a friend of mine walked into a store to buy some new running shoes. His feet tend to overpronate, which means he needs shoes that have special support features built in or else he will wind up running on his ankles.

The two salesmen (the term is used very loosely here) were both 16 years old and utterly devoid of any knowledge about the shoes or my friend’s condition. They were clueless about how to help. My friend would love to shop locally, but if he can not get the customer service he needs, he will simply do his research and order his shoes online.

Lee Resources reports that for every single customer complaint you receive, there are 26 others that remain silent. From this statistic, we gather that we must investigate each and every complaint in order to ensure the problem is not more widespread. Think of a customer complaint less as a “problem” and more as a “blessing.” It gives you the chance to correct a situation before it gets out of hand.

NOP Worldwide reported that a one percent reduction in customer service issues could generate an extra $40 million in profit for a medium-sized company over five years’ time. This solitary fact was earthshaking for me because it so vividly illustrates the considerable impact customer service has on the bottom line. Customer service is not an expense. It is a profit center in its own right.

Another interesting fact reported by Lee Resources is that 70 percent of complaining customers will continue to do business with you if you resolve their complaint. Ninety-five percent will continue to do business with you if you resolve the problem immediately. Too often I see businesses ignore customer complaints rather than dealing with them. Customers really want to stay with you even if there is a problem. If you want to keep these customers, it is crucial that you to make sure you rectify the problem quickly.

Now go out and make sure your customer service experience is great, and that you recognize its true value to your business.

You can do this!