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Are You Doing Things Right or Doing the Right Things?

Let’s be clear.  Doing things right is all about being efficient.  Doing the right things is about being effective.  So it isn’t an either/or situation, is it?  We want both, don’t we?  We want to do the right things and do them right.  After all, why would we want to be very efficient at doing the wrong things, or do the right things inefficiently?  Obviously, we wouldn’t.  And nowhere is it more important to be doing the right things and doing them right than in our sales process.  In his book, “The Secret to Selling More,” Mitch Gooze (pronounced Goo-zay) makes the point that most sales organizations are composed of a few top sales people along with a lot of average or below average performers.  Billions of dollars are spent annually on sales training as businesses try to bring their low performers closer to the level of their top performers.  And the improved sales performance those billions of training dollars buys?  Not much.  So if sales training is not the answer to making our sales process more productive, what is?  If you want Gooze’s answer to this dilemma, please read below.

Gooze likens this to a manufacturing environment where, if you don’t like the output (quality and/or quantity of product) you’re getting, you probably have to look at the input (design/engineering) for an answer.  As the saying goes, “An organization is perfectly aligned to get the results it is getting.”  Garbage in, garbage out.  In the same way, if you don’t like the sales results you’re achieving (the output), you should look at your marketing efforts (the input) to make any kind of real difference.

Gooze tells us that marketing has two critical responsibilities: defining the “Who” and the  “What.”
1.    First, it must define who our customer is.  Who do we expect to buy our product or service.  Who is our product or service ideally situated to serve?  Is our ideal customer short, tall, skinny, fat, young, old, male, female?  Does this customer need to be nearby or is geography not a factor?  In short, we need to get as much demographic information as we can about who we intend to be our ideal customer.
2.    Marketing must define what our ideal customer needs or wants to buy.  Note he says “what our ideal customer needs or wants to buy,” not what we want to sell him.  And we need to understand why our product or service is the best choice for our ideal customer.  What sets us apart and makes us a better choice than any of our competitors?

Now, what does all this have to do with closing the gap between our top sales people and lower performers?

Gooze contends that if marketing does a poor job of carrying out these two critical responsibilities, or does not accurately communicate them to the sales force, sales people will try to figure it out for themselves.  The top sales people are the top sales people because they have a sure sense of who needs our product or service, and what sets us apart from our competitors.  The lower performers, since they don’t have that clear vision that the top performers have, waste a lot of time trying to sell to anyone who comes across their path . . . with predictably spotty results.   So the real key to closing the gap between high and low performers is to level the playing field by making sure we’ve done a good job of defining the “Who” and the “What,” and an equally good job of clearly communicating the “Who” and the “What” to the sales force so all our sales people are armed with the same vision and understanding of our marketplace.

Try this.  Ask all of your people who have direct customer contact (field sales people, inside sales people, customer service people) to describe your ideal customer.  And just to test their complete understanding of this, you might also want to ask them who is not a good prospect for us . . . not a good fit.  Then ask them to tell you why our ideal customers choose to do business with us instead of our competitors.  You may be surprised to learn that their answers to those questions don’t align with each other, and maybe not even with you.  If that’s true, then you’ll be well-served to distill the answers of your top sales people, make sure everyone knows and understands them, and periodically reinforce them to prevent people from “forgetting” or free-lancing.

Incidentally, Gooze makes the point that the most successful CEOs do not stay behind their desks and isolate themselves from their customers.  They spend significant time in the field, talking with customers and testing their answer to the What question.  As our customers grow and evolve, their needs change, and what they needed from us yesterday may not be what they need from us today.  Smart CEOs know that, stay close to their market, and regularly test whether or not their What answer is still valid.

There’s a lot more in Gooze’s book than what I’ve shared here.  I’ve provided an executive summary of his main point, but if closing the gap between high and low sales performers is an issue for you, you should read the whole thing.  It’s fairly short, an easy read, and you’ll find it very useful.

 
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To-do’s Before Year End

January is a time of renewal.  It marks a new beginning, a fresh start.  But there are things you should be doing now, before December 31, to get you out of the blocks fast when the year turns over.  If you’re on a roll, you need to think about how to keep that roll going.  If the year ending has not been a kind one, then you need to think about how to make the new year better.  Either way, there are four things you should do before we say goodbye to the old year and ring in the new.  Actually, there are probably more than four things on your to-do list before the end of the year, so I hope the four I have in mind will be included.  For more on this, please read below.

First, you need a written annual plan that outlines the three to five strategic initiatives you intend to implement next year to move your company forward.  Hopefully, this is already done, but if it isn’t, there’s still time.  This needs to be done thoughtfully, but it need not be a complicated or time-consuming task.  A single page per strategy should do the trick.  Just start with a paragraph that describes the strategy, explains why you’re implementing it, and lays out the benefit(s) you expect to come from it.  Then break the strategy down into individual tasks, assigning responsibilities and deadlines for each, and TA DA!   . . . you’re good to go.  I assume you would be making this plan with the help of key managers, but if you’re very small and doing this solo, then run your plan by your attorney, banker, accountant, or other trusted advisor for their input.

Second, you need a Profit Plan . . . sometimes called a budget.  I prefer Profit Plan because “budget” has a negative connotation.  It sounds restrictive, confining.  Profit Plan, on the other hand, is more positive.  It says, “Here’s the profit we intend to make next year, and here’s how we intend to do it.”  Start with a month-by-month sales forecast which is always the dicey part because sales forecasting isn’t an exact science.  Be guided by your sales history, adjusting as necessary for current conditions.  The trick here is to come up with a forecast that’s realistic, neither unduly pessimistic nor overly optimistic.  Once you know what you expect to sell, determining your costs to complete your Profit Plan is relatively easy.  If necessary, get help from your accountant.  The strategic initiatives in your annual plan will almost certainly have cost and revenue implications, so be sure your Profit Plan takes those into consideration.

Third, do a customer review with the objective of ferreting out unprofitable customers.  You know who they are.  They’re the ones who demand $100 worth of service for their $10 order.  Wouldn’t it be nice to start the new year by making those problem customers available to your competitors?

And finally, do an audit of your general ledger.  In part, you’ll be doing this anyway to prepare your Profit Plan.  But this additional scrutiny will tell you if any waste has crept into the system that needs to be curtailed, or if costs are creeping up and need to be more carefully controlled.  You can almost always find something here to add to your bottom line.

So those are the four to-do’s I recommend before December 31.
•    Write an annual plan covering three to five strategic initiatives.
•    Create a Profit Plan to act as your road map to the profitability you expect.
•    Do a customer review and get rid of those who are not a good fit for you.
•    Audit your general ledger looking for waste and/or spiraling costs.
As I’ve said, this is not intended to be a definitive list of all the things you need to do before the year is out, but if you do these four, I guarantee you’ll have a better year next year than you will if you don’t do them.

For some small business owners, all this planning and financial stuff can be a bit intimidating.  If that’s you, call me.  We should talk.

 
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Be a “winning workplace”

Comedian Jeff Foxworthy’s signature standup bit is, “You might be a redneck.”  It’s a whole series of if/then jokes aimed at helping you discover if you could possibly be a redneck.  For instance, “If you’ve been married three times and still have the same in-laws, you might be a redneck.”  Or, “If you own a home that is mobile and 14 cars that aren’t, you might be a redneck.”  On and on.  I liked his “if you do this, then you might be that” approach and thought it might be an experiential way for describing business activities.  Specifically, I thought it might be a way of describing a business that is employee centric, or what I would call a “winning workplace” . . . probably not as funny as Foxworthy’s schtick, but might nonetheless be instructional.  For more on whether or not you are presiding over a “winning workplace,” please read below.

I was recently involved in a company’s annual management meeting.  One of this company’s core values is “People” which they define as being “the employer of choice.”  I thought that was very interesting.  Instead of saying “our employees are lucky we chose them to be working here”  (company centric), they’re saying “we’re lucky our employees chose to devote their working lives to us” (employee centric).

Southwest Airlines is very open about the fact that they place employees first.  Their reasoning is that if people feel content and energized by their work, they will be more efficient and effective, but even more importantly, they will interact with customers more positively and customers will enjoy a better experience.  So in the Southwest model, while it may seem a little counter-intuitive, the best way to deliver superior customer service is to put employees first.

Among companies that are considered “winning workplaces,” productivity could be up by as much as 30 per cent over their unenlightened competitors.  In addition, turnover rates are lower and retention rates are higher.  So if creating a “winning workplace” feels a little too touchy-feely and conjures up images of holding hands and singing Kumbaya, just remember, this isn’t just altruism at work here . . . better customer service, increased productivity, and reduced turnover are pretty hard-headed business reasons for wanting a “winning workplace.”

So with apologies to Jeff Foxworthy, here are some ways you might start to figure out whether or not you’ve got a winning workplace.

If your employees embrace your corporate values and are positioned within the company so they can use their greatest talents, you might be a winning workplace.

If your employees routinely encourage friends and family to apply for job openings, you might be a winning workplace.

If your employees feel that their opinions are heard and valued, you might be a winning workplace.

If your employees enjoy being with one another, even socializing together, you might be a winning workplace.

If your employees get regular recognition for doing good work, you might be a winning workplace.

There are more, many more conditions that need to be met for yours to be considered a winning workplace.  You might notice, none of the above examples talk about pay or benefits because those are a given . . . if you don’t have a competitive pay and benefits package, yours is almost certainly not a winning workplace.

The real key to being a winning workplace is commitment.  If you put being a “winning workplace” right up there with all your other important goals and strategies, if you renew that commitment year after year with fresh programs and initiatives, and if you invite regular employee feedback about “how we’re doing,” you will be well on your way to being a winning workplace . . . and to enjoying all the business benefits that will come from that.

 
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WIIFM? Huh?

As human beings, we are all creatures of motivated self-interest.  That’s right, we are all egocentric.  Sounds pretty cynical, doesn’t it?  But it’s not.  It’s just the way we’re wired and the way we make decisions.  Should I do this or that?  Should I pick A or B?  Should I turn left or right, or should I just keep going straight?  What will give me the best result?  It’s all about me and satisfying my needs.  But that’s not all bad.  In fact, it’s often very good.  Let’s say I help a little old lady safely cross a busy street.  How can that be a selfish act?  Because (maybe unconsciously) I get a feel-good rush when I help others.  It helps me keep my “good guy” self image in tact.  So yeah, it’s all about myself, but it’s not just about my material self, it’s about all my selfs . . . my spiritual self, my family self, my professional self, my social self, and on and on.  Everything you and I do is aimed at protecting, bolstering, or satisfying the needs of all those selfs.

OK, so what does all this have to do with business?  For that answer, please read below.

Even in this texting day and age with all it’s abbreviations, some won’t recognize WIIFM.  It stands for “What’s in it for me?,”  and we deal with it every day in business.  Our customers want to know “What’s in it for me” if I do business with you.  So all of our advertising, promotion, and customer contacts are aimed at answering that question.  That question also becomes the hurdle our own vendors and suppliers must get over.  And of course, that question goes both ways in our hiring process.  The employer wants to know “What’s in it for me, Mr. Candidate, if I hire you?,” in terms of skills, training, and experience you will bring to us.  And the candidate wants to know “What’s in it for me if I come work for you?,” in terms of pay and benefits.  Unfortunately, where employees are concerned, that “What’s in it for me?” conversation often ends on the day of his or her hiring.

We live in a time of rapid change . . . changes in our customers’ needs, changes in competition, changes in technology, changes in our processes and procedures . . . and the pace of change is accelerating and will continue to accelerate.  Our businesses, and therefore our employees, must adapt to these changes or we risk falling behind and ultimately, failing.  The problem is, as jobs become more complex, demanding, and stressful, employees are asking, “If I shoulder this burden you want me to bear, what’s in it for me?”  But that question isn’t always being adequately addressed by business owners.

At the height of the recession when layoffs were everywhere, surviving employees were being asked to pick up the work of one or two, maybe even three or four, of their departed colleagues, and take a pay cut in the process.  In those circumstances, the answer to the “What’s in it for me?” question was obvious.  “At least I’ve got a job.”  But as the business climate improves (albeit slowly), and the job markets improve (albeit slowly), “At least I’ve got a job” may no longer be an adequate answer.  At some point of work-induced stress, an employee will do the mental calculus and say, “The cost to me of doing this job exceeds the benefit I’m getting from it.”  At that point, the employee will begin to look for options.

So what are we supposed to do, give employees a boost in pay every time we ask them to do something?  No, of course not.  But over the long term, we need to satisfy ourselves and our employees that the cost vs. benefit proposition for their jobs is fair and equitable.  Part of that calculation will involve, not just money and benefits, but soft benefits such as working conditions, a reasonable work week, and in general, a recognition that they have lives and interests outside of work.

A hypothetical CEO was leaving work one Friday afternoon when he noticed Old Joe still working away at his desk.  The CEO thinks to himself, “Good Old Joe.  He’s done the work of his entire department since we had to lay off everyone else.  Don’t know what we’d do if we lost Joe.  But hey, we’ve been getting by this way and we’re saving a boatload of money, so it would be silly to go back to our old, inefficient way of doing things.”  So the CEO wished Joe a good evening and headed out the door for the weekend.  Monday morning, as the CEO arrived and passed Joe’s desk, he noticed Joe’s chair was empty and his desk was clean except for a note that read, “Gone fishin’ and I won’t be back.”

Don’t let that happen to you.  But if your employees believe you have let the cost/benefit equation of their jobs get out of balance, it will.

 
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Price is an Evil Mistress

Price is an Evil Mistress

Setting our price is a conundrum, isn’t it?  If we set our price too high, customers go elsewhere.  If we set it too low, we leave money on the table.  So it’s a tough line to walk, but we all have to walk it.  Wait a minute though, is price all there is?  What about value?  Doesn’t that count for anything anymore?  Yes, as a matter of fact, it does, but thanks to the internet and the ability of customers to compare prices quickly and easily, price has become an even greater part of any marketing strategy.  For more on the yin and yang of price vs. value, please read below.

Sam Bowers, a business professor and lecturer, tells us, “Looking for a place where price is not a factor is going to be a long lonely search in dark jungles.”  And General Electric’s Jack Welch adds, “If you can’t sell a top quality product at the world’s lowest price, you’re going to be out of the game.”
Warren Buffet’s take is, “Price is what you pay.  Value is what you get.”  And this from an unknown writer: “The bitter taste of low quality lingers long after the sweet taste of low price has faded.”
In this tug-of-war between price and value, value does have its place.  After all, if price was the only consideration, everyone would be driving a Chevy and no one would drive a Mercedes.  Think about a restaurant you may have tried where the prices were low but the food was mediocre and the service was lousy.  Would you go back?  Or think about online retailer Zappos.  You can certainly find lower prices than theirs, but they make shopping so easy and customer-friendly, why would you?
A recent article in the Chicago Tribune discussed a strategy by Williams and Sonoma, the upscale retailer of kitchen products, to lure their customers away from online shopping and back into their stores.  The plan is to offer more in-store product demonstrations and cooking classes, thereby making a Williams and Sonoma shopping experience richer, more entertaining, and more educational for their customers than an online experience would be.
So the trick, apparently, is how you communicate, promote, and execute your value proposition.  If your value proposition is, “We’ve got the lowest prices in town,” better be careful.  By definition, there can be only one low-price leader, and there will almost always be someone trying to undercut you and win that dubious crown.  So unless you’ve got the size and volume to be a real low-price contender, you’d be wise to find a better value proposition.
Whatever your product or service, price is important, but it’s rarely the sole consideration.  Remember, while people may argue that your price is too high, they vote with their feet . . . if they’re still talking to you, it means they see value in your offer that they don’t see in others.  Obviously, they would like to get your value and the other guy’s price, but you’d be a fool to make that deal.  Your value, your price.
Make no mistake, people will pay for what they want, and what they want is usually not your bare bones product or service.  They usually want something more.  It may be convenience, it may be selection, great customer service, a fun, customer-friendly experience, deep product or service knowledge, or a lot of other things.  That’s for you to figure out.  So get clear on the totality of what your customers want, structure your value proposition based on that, and set your prices accordingly.

 
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“Time kills deals.”

“The longer it takes to close a deal, the less likely it is to happen; time kills deals.”
– Marisa Pensa

During the “Great Recession,” a lot of merger and acquisition work came to a screeching halt, particularly where small businesses were concerned.  In an uncertain business climate, buyers stopped buying, and sellers, fearful that they wouldn’t be able to get a reasonable price for their business, stopped selling.  Now, although the flood gates haven’t exactly opened, some entrepreneurs are peeking out of their bunkers looking for acquisition targets.  So now may be a good time to offer a few thoughts about merger and acquisition activities.  For more on this, whether you’d be a buyer or a seller (now or in the future), please read below.

There are all sorts of aspects to M&A work we could talk about, but for now, we’ll limit ourselves to the proposition that “time kills deals.”

Most M&A deals never close.  There are lots of reasons for that:
•    The seller is not motivated to sell or gets cold feet.  His or her head says selling is the right thing to do, but the heart says, “Nope, this is my baby and I’m not giving it up.”
•    The buyer is not motivated to buy or gets cold feet.  He or she talks a good game but is in fact just a tire kicker . . . when it comes time to write the check, the buyer decides it’s too risky and backs off.
•    Buyer and seller can’t agree on price.  The seller has an inflated view of the company’s value, or the buyer is a bottom-feeder who will only buy if it’s a steal.
•    Buyer and seller can’t agree on terms.  Buyer wants to pay in installments over 20 years, seller wants all cash up front.
•    Something turns up during “due diligence” that blows up the deal.

There are many other reasons that deals don’t close, but the fact is, most don’t.  So here’s the problem: a blown deal is expensive, not only in dollars (lawyers, accountants, other professional fees), but more importantly, in wasted time and effort.  Whether you’re a buyer or seller, once the process starts, your focus, and probably that of your management team, is on “the deal.”  Meanwhile, the company is just treading water, and is probably missing opportunities.  I know of one seller who danced with a would-be buyer for a full year before the deal was finally declared dead.  The seller’s chief regret was that while the dance was going on, the company lost a full year of growth.

So as we’ve said, time kills deals.  The longer the negotiation and due diligence stretch out, the more likely the deal is to fail.  Obviously, it would be foolish to rush headlong into a deal without taking time to understand all the ramifications of it, and to make sure that it’s fair for you and all your stakeholders.  Naturally, big, complex transactions are likely to take more time than smaller, simpler ones.  But there’s taking appropriate time, and there’s taking too much time.  Too much time is the killer.

There’s probably little to be done to increase the number of deals that actually close.  But working with your professional advisors . . .

. . . by the way, you are going to use professional advisers who have extensive M&A experience, right?  Not your regular corporate attorney who has no M&A experience or your accountant brother-in-law who does mostly personal taxes, right?  OK, just checking. . . .

. . . so you can’t increase the likelihood that your deal will close, but working with your professional advisers, you can develop strategies that will limit your exposure and ferret out dead deals as early in the process as possible.  Do everything you can to vet the other side, to make sure they’re legitimate players and that they are as committed as you are to getting a deal done as expeditiously as possible.  Sounds obvious, doesn’t it?  Yet the deal I mentioned above that took a year before crashing is not an isolated incident.  It happens.

Time kills deals, so watch it like a hawk and be intolerant of unnecessary delays.

 
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eHarmony in the recruiting business? Really?

An article in the September 16, 2013 issue of Time magazine noted that eHarmony, the dating service, will begin offering a job-recruiting service sometime in 2014.  Seriously??

Apparently so.

Not only that, but the article goes on to say that in addition to eHarmony, there are a bunch of startups who hope to use matchmaking algorithms to help pair up jobseekers with appropriate employers.  Is this crazy?  Maybe not, but one thing’s for sure . . . there is a part of our hiring process that deserves much more attention than it usually gets.  For more on this, please read below.

Think about it.  According to the Time article, “Though the weak job market has lowered churn, as recently as 2007 about 3 million workers were voluntarily leaving their jobs each month.  Today, fully 70% are said to be dissatisfied in their jobs.”  Three million workers bailing out per month?  Seventy per cent dissatisfied?  That’s a lot of unhappy campers!  And that churn, says the Time story, fuels a $400 billion global recruiting industry.  While that’s a big number, it’s not necessarily all that surprising.  It’s no secret that filling a job is an expensive proposition.  So if we can find ways to reduce churn, there’s a lot of money on the table to be saved.

For me, the key line in the Time story was, “soft skills and ‘cultural fit’ can be better predictors of a good hire than education and experience.”  But there’s the rub for the would-be technologist matchmakers.  They admit they’re having a tough time reducing a company’s culture to an algorithm.  And they worry about sub-cultures within the same company.  Is the “culture” the same in the accounting department as it is in the sales department?  And what about senior managers?  Do they exert more influence on a company’s culture than the rank-and-file?  Long story short, there are a lot of variables and moving parts here, so don’t look for matchmaking technology to be available at Best Buy anytime soon.

The real story here is not that matchmaking companies want to enter the recruitment market, it’s that their focus in trying to do so is squarely on personality traits and characteristics of the jobseeker, and personality traits and characteristics (culture) of the hiring company.  Those will play a much larger role in a good hire than will having attended the “right” school and having gained the “right” experience.  Not that those things are unimportant, it’s just that they are poor predictors of a good hire.

So for the time being, we’re stuck with the tools we have to uncover the secrets of cultural “fit.”
•    Thoughtfully identify the traits, characteristics, and values that make up your culture.
•    Carefully craft interview questions that will expose the traits, characteristics, and values you’re looking for.
•    Think about using a personality profile instrument.  There are a lot of them available, and while none are perfect, they may point to some areas you want to explore in an interview.

Crude as they are (compared to an elegant algorithm), those are the tools we have to work with.  Use them wisely or you will end up leaving a lot of money on the table.

 
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“OK, but let’s look on the bright side . . . .”

In their best-selling book, “Switch,” brothers Chip and Dan Heath discuss why it’s so difficult for us to change, whether we’re trying to change the way we eat or change the way we do business.  The culprit is a fundamental conflict that’s hardwired into our brains.  But once you understand the conflict, you can find ways to manage it.  If you have concerns about your ability to effect transformative change, in either your personal or professional life, please read below.

According to the brothers Heath, our minds operate with two different systems.  Our “Rational Mind” is the part of us that is deliberate, thoughtful, cautious, and analytical.  But left to its own devices, our Rational Mind will get bogged down in analysis paralysis.  It will think, ponder, analyze, and play “what if” games endlessly, but won’t take any action.  On the other hand, our “Emotional Mind” is all about action.  It doesn’t want to spend time thinking about stuff, it just wants to get the show on the road.  Unfortunately, without the offsetting influence of the Rational Mind, the Emotional Mind may get the show on a road to nowhere with no gas in the tank.  So we have this constant internal conflict or tug-of-war.  The Rational Mind knows we need to lose weight, the Emotional Mind wants beer and pizza.

When you’re trying to implement significant change, the trick according to the Heath brothers, is to find a “Path” that satisfies the Rational Mind and still excites the Emotional Mind.  But finding such a Path can be easier said than done.  As you would expect, the intrepid Heath brothers have a way.  They advise looking for “bright spots” or “exceptions.”  Here’s what they mean.

Let’s say we’re trying to roll out a new product or service offering.  In 98% of our market area, sales are dismal.  A normal response to a problem like this might be to review all our marketing materials, talk to our sales people about what they’re encountering in the field, and try to find a reason for our lackluster sales results.  The Heaths response would be different.  While this can be somewhat counterintuitive, they recommend looking at the “bright spots,” in this case, the 2% of our market area where sales are at or above expectations.  Instead of trying to figure out why the 98% are failing, let’s figure out why the 2% are succeeding and that will be our Path for success with the 98% as well.

In another example, a healthcare worker was trying to help malnourished kids in a primitive part of the world where the main problems were poverty, poor sanitation, and poor access to clean water.  With almost no budget or manpower, the worker couldn’t hope to follow a Path that would even make a dent in such large, intractable problems.  So he went looking for “exceptions” or “bright spots.”  He went looking for kids who, even though mired in the same problems, were healthier and better-nourished than other kids.  He studied what their parents were doing that the parents of malnourished kids were not, and developed a Path that would help all parents adopt practices that were within their means and that would keep their kids healthier and better fed.

So when you’re faced with enacting significant change or solving a big problem, remember that neither part of your mind can do it alone.  Give yourself a Path that will give clear direction to your Rational Mind, and an exciting outcome to your Emotional Mind.

This really only scratches the surface of the Heaths’ great book, “Switch: How to Change Things When Change is Hard.”  If you want the full story, pick up a copy.  Highly recommended.

 
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“Trust is the glue of life.”

Trust is the bedrock of leadership.  While there are many other important aspects of sound leadership, trust is foundational.  Without it, nothing else matters.  Regardless of how charismatic a leader may be, without trust, he or she will have no followers.  And the reality is this: trust is very fragile.  It must be carefully built and nutured, yet one false step can seriously damage or even destroy it.  There may be a few of us who give our trust freely until that trust is violated, but for most of us, it’s the other way around . . . we withhold our trust until it is earned.  So how does a leader earn that trust?  Please read below.

“The task of the leader is to get his people from where they are to where they have not been.”
–    Henry Kissinger

Consider a quote from another thought leader, Stephen Covey.  “Trust is the glue of life.  It’s the most essential ingredient in effective communication.  It’s the foundational principle that holds all relationships.”  So we put Kissinger and Covey together, and we see that without the “glue” that binds leaders to followers, a leader cannot get his people “from where they are to where they have not been.”  In short, the leader can’t do his or her job.

OK then, what does it take to develop this “glue?”  Here are some thoughts.

•    Keep your motives pure.  When you pursue something that benefits the entire group, you strengthen the glue . . . self-serving motives weaken it.
•    “Do as I say, not as I do,” has never been a good leadership practice, nor is it here.  To build trust, you need to do more than talk the talk.  Lead by example.
•    Be true to your word, consistently.  Do what you say you’re going to do, when you say you’re going to do it, always.
•    Trust is a 2-way street.  Your people won’t trust you unless you demonstrate that you trust them too.
•    Learn to be a good listener.  Don’t dismiss other people’s ideas out-of-hand.  People will be more willing to follow your ideas if they know their ideas have been heard and considered.
•    Give it time.  If you believe that trust has to be earned, then don’t expect full commitment based on a single promise kept.  Your people will want to know that you’re not a one-trick pony . . . that you deliver on your promises consistently over time.
•    Don’t shift blame.  If you screw something up (and we all do), own it.  When you admit to failures or mistakes, you strengthen the trust “glue” because you show up as authentic, not as a phoney.

And one more thing.  According to business guru Tom Peters, “Leaders don’t create followers, they create more leaders.”  Don’t assume this is just about you getting your direct reports to follow you.  Insist that your people practice these behaviors with their people and on down the line until your whole organization is practicing these behaviors.

The bullet points above are not intended to be a comprehensive list of everything you need to do to engender trust, but they are the most impactful.  Faithfully adopting these behaviors will go a long way toward guaranteeing your success as a leader.  Ignoring them will surely guarantee your failure.

If you feel the need to strengthen trust within your organization but don’t know where to start, call me.  We should talk.

 
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Learn to delegate

I’ve written about delegation before, but I continue to think about it because so many small business owners don’t do it very well.

Entrepreneurs often like to pull all the significant levers in the business and push all the important buttons.  They built the business and know the critical parts of it better than anyone, so they don’t hand off any core decisions, responsibilities, or activities to anyone else.  Yet by failing to delegate, the owner is unable to keep good people and unable to grow the business beyond his or her personal limitations.  If this is a problem for you, please read below.

In the end, effective delegation is a trust issue.  What if I do hand off something important to someone else and they screw it up?

Here’s a way to limit your risk and gradually learn to delegate effectively.

Divide the all the company’s identifiable, distinct decisions, responsibilities, or activities into four categories: A, B, C, and D.  When you assign a D responsibility to someone, instruct that person that this responsibility is theirs and theirs alone.  They should just go ahead and carry it out.  Don’t call, don’t write, don’t report to me when you’ve done it.  Just do it.

When giving out a C responsibility, you instruct that person that this is still a responsibility that is theirs, and they don’t need get permission in advance, just go ahead and do it.  But in this case, you want to be notified when it’s done.

B responsibilities are moving up the ladder another rung.  You should instruct the person with these responsibilities, “These do require a consultation, so before you pull the trigger on one of these, we need to talk about it.”

You can show your subordinates a list of A responsibilities, but you don’t give those out.  Those are the decisions, responsibilities, or activities that you will continue to reserve for yourself.  Ideally, over time, these will be the long-term, strategic decisions you are making for the company.

If this is done in a clear, well-defined way, you will have drawn very effective boundaries for your people.  You shouldn’t have anyone going off the reservation and doing things he or she has no authority to do.  In short, you maintain control.  But better yet, you begin a process of delegation that can grow over time.  Again, this is a trust issue.  So you build trust as you see how effectively your subordinates handle the responsibilities you’ve given them.  Then more of your A responsibilities can become B responsibilities and given to someone else.  Likewise, a B can be transformed into a C, or a C to a D.  It’s just a way to avoid throwing someone into the deep end of the pool before they’ve proved they can swim.

One other caveat: when you delegate something to someone, judge the results they achieve, not their methods.  They may carry out a responsibility differently than you would have done it, but if they get the desired result, who cares?  Don’t micro manage.  Give them some latitude to do things their way, to bring something of themselves and their creativity to the process.  Who knows?  If you let them alone, they may even figure out a way that’s better than yours.

This is an evolutionary way to build delegation into your company’s culture.  Ultimately, your subordinates will be doing the things they are qualified to do, and you’ll be left with only those things that truly belong on your plate.

 
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