Category Archives: small business talent

3 Simple Steps To Hold People Accountable

Great leaders and managers know these 3 Simple Steps To Hold People Accountable

There is a common theme that many leaders struggle with: they don’t know how to hold their people accountable. Even if they are great at hiring A players, many leaders still are left with that feeling that their people could be doing more or better work.

Rather than first finding fault with the employee, a great leader looks first at him or herself. And when you take that look in the mirror, you might find that you have not been effective at holding your people accountable for their results.

The good news is that you can rectify this today and become a better leader with the help of three simple steps: Continue reading 3 Simple Steps To Hold People Accountable

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5 Trends That Will Impact Your Business in 2018 (You Might Already Know No. 3)

With the New Year right around upon us, here are 5 trends that will impact your business in 2018 and beyond:

  1. Lack of “Place” Accelerates

In the coming year, we will continue to see a diminished importance of the need to have a physical location to work in. Thanks to the widespread evolution of mobile platforms, where we now have high-performance computers in our hands, most of us can now work from anywhere.talk to us Continue reading 5 Trends That Will Impact Your Business in 2018 (You Might Already Know No. 3)

How to Scale Your Company By Shifting From Talent to Systems

 

Eventually you can’t count on superhero employees and have to deploy systems if you want to scale.

In the earliest days of most companies, entrepreneurs can’t afford the systems that exist in bigger companies. Instead, entrepreneurs rely on hiring super-talented people skilled in doing everything from serving clients and delivering products to closing the books.

Continue reading How to Scale Your Company By Shifting From Talent to Systems

Are Your Employees Firefighters or Snow Cones?

Every business has the occasional fire. When it hits, you should have plenty of people who we call “Firefighters” while avoiding folks we label “Snow Cones.

“Every business, from successful startups to well-established corporate giants, hits a rough patch or two. It’s just a part of doing business.

But if you’re going to weather those storms as an organization, you’ll need people who can handle the heat and won’t melt under pressure. In other words, you should be hiring plenty of who we might call “Firefighters” while avoiding bringing on folks we might label “Snow Cones.” Let me explain.join_now Continue reading Are Your Employees Firefighters or Snow Cones?

Mercenary or Patriot–Which Should You Hire?

When you’re hiring, think beyond the skills and experience a candidate might have and assess whether you want a patriot or a mercenary.

When you’re thinking about hiring people, especially those in mission-critical-type positions, you need to use caution because the stakes are so high anytime you make a bad hire. But beyond whether they are an A, B or C Player and the skills and experience a candidate might have, you also need to assess whether they are a patriot or a mercenary. Let me explain.talk to us

The Patriot
Patriots are employees who seek to join your company because they believe in your organization’s purpose and mission. They want to contribute to the cause. Maybe they are drawn by what your company does or how you do it because it resonates deeply with their own personal beliefs. This can be a very powerful draw for some job candidates, many of whom might even be willing to make personal sacrifices like taking less pay, relocating their family or even working long hours for the opportunity to be part of your organization. Patriots are also deeply loyal to the organization and tend to stick around even when times are tough and the bullets start flying. We often see startups filled with people like this who choose a job based on its higher purpose rather than higher pay because the organization doesn’t yet have the resources to offer much in terms of compensation.

The Mercenary
Mercenaries, on the other hand, choose their next job based on how it will benefit them as an individual. You can identify a mercenary right away just by looking at their resume, where you’ll find lots of short tenures and plenty of job-hopping – something that’s common in job areas like sales and software developers. That’s not to take anything away from a mercenary’s skills: they are usually very talented and in demand. The tradeoff is that, unlike the patriot, if a mercenary’s personal needs aren’t being met, they are likely to jump ship at the first sign of trouble. Usually, they are just there for the money.

Why The Distinction Matters
One reason its critical to understand whether you are hiring a patriot or a mercenary is that your choice will impact your culture. Patriots are the people who live your culture on a daily basis and do things the way you want them done. Mercenaries, on the other hand, don’t always think the rules apply to them – especially if they are producing results.
While mercenaries can be very valuable to the growth of your company, you need to understand that they also carry a risk to your culture – at least depending on your business model. If you run a bond trading firm, for example, you might rely on a staff of 100% mercenaries – and that’s a good thing. But for most of us, especially those of us who want to build a company and a culture for the long haul, we need to be careful about how many mercenaries we have on staff relative to our patriots.

Consider the example of a company a friend of mine owns that operates in the government contracting space. It’s a tough business that relies a lot on relationships and social networks to be successful. That means that having a top-notch business development person is critical to any company’s ability to land new business. These folks have a very specialized, and valuable, skill-set – which means they can be hard to find and retain.

In the case of my friend’s company, he was fortunate to hire one of the best business developers around. And this guy delivered: he landed several large orders for the company (that he was well compensated for, by the way.)
But it also became apparent that digesting the work involved with those contracts was going to take my friend’s company at least a year to work through before they would be able to go out and bid on any new business.

Guess what happened? My friend’s business developer jumped ship rather than risk earning less by waiting for the company to chase new work.
This is a classic case of what happens when you hire a mercenary versus a patriot, someone who would have been willing to shift roles or jobs in the interim as a way to stay with the company and be part of its success over the long haul.
Both patriots and mercenaries can play important roles in your organization’s success. Just know what you’re hiring up front so you can plan best for the long run of your company.

Why You Need to Honestly Assess Your Talent

Many companies rate their talent well above average. Besides being untrue, this is a dangerous strategy as your top performers will leave you if you do.In the mythical town of Lake Wobegon, made famous by Garrison Keillor on National Public Radio, it is said that all the children are above average.While you might laugh at that joke, it’s worth asking: are all the people in your organization rated above average and how do honestly assess the talent in your organization?

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Continue reading Why You Need to Honestly Assess Your Talent

Run Your Business Like You Are Never Selling

To get the best value when sell your business, keep your focus on building a great business, serving your clients, growing your revenue and profits and exit will take care of itself.

Many of the CEOs and leadership teams I have worked with over the years have fallen into the same trap: they get overly focused on selling their company to a strategic or financial acquirer or worse, going public. At one level this is understandable since it is a dream for many, if not most, entrepreneurs and leaders to create a lot of personal wealth through a wildly successful exit from their business. That’s why it’s so common to meet business leaders who seem to think of nothing else.

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But if you make the notion of selling the primary driver of your business, at the expense of continuing to grow a great enterprise, you’re making a critical mistake.

All too often I hear business leaders tell me that they can’t make that new IT investment or ask an under performing executive to leave the business because they are just treading water until the sale of the business closes. No one wants to spend any money, or rock the boat when it comes to key personnel, because they don’t want to jeopardize their big payday.

Strategic buyers and investors are looking to buy companies who have great executive teams in place that not only deliver results in revenue and profits now, but who also have built in the upside to deliver growth into the future. And a pile of recurring revenue is sure to help!

So when a potential acquirer looks at a business that is clearly doing its best just to keep the status quo and not making the right moves and investments, they will see right through that and wonder if the company is now too risky to invest in. Smart buyers and investors look for companies that are continuing to thrive, grow, and make smart decisions – not those who are just passing the buck.

What do you think would happen if an investor approaches your company and asks which members of the executive team they should hang onto – and which ones they shouldn’t? If you immediately give them the name of a vice president who isn’t performing, you can bet the investor’s first question will be: “Why haven’t you gotten rid of them already then?”

Or, let’s say you have been holding off on making that big investment in a new IT system your team has been begging for. What you will find is that when an investor learns about that, they will discount their offer price for your business by the amount it would take them to make that same investment at the very least.

That’s why the best strategy to get the best price for your business is to continue to focus on building a great company – not on trying to sell it. If you were to make the investment in the IT system now, you might even be able to extract a premium from a potential buyer because you have laid the foundation for future growth because of that investment.

Believe me I speak from experience. A few years ago, I, too, was in the process of selling my company. We had received such a rich offer from a public-traded company we couldn’t say no to. At the time, my CFO and I were the only ones who knew the transaction was in the works. As it happened, my VP of engineering wasn’t performing at the time. I had him on an improvement plan for the prior few months and he just wasn’t getting any better. I knew it was time to make the move and help him leave the company. But rather than worry that I would scare off our potential buyer, I let them know what I was doing and why. I told them I was making a decision that was in the best interests of the business – and that was going to be my focus regardless of what happened with our transaction. The buyer was impressed: they told me they appreciated it. The deal eventually went through, before we even replaced that VP.

If you want to get the best price or value when it comes time to sell your business, keep your focus on building a great business, serving your clients, growing your revenue and profits and the great valuation on the exit will take care of itself.

 

The 1 Best Question to Use in an Interview

There is a single question that you can use to assess whether candidates understand the job and if they are A or C players.

The secret to hiring your next great employee might come down to how someone answers a single question. And you won’t be asking what kind of tree the person would be or about her Myers-Briggs profile. It all comes down to measuring performance. Let me explain.talk to us

The authors of the book Who suggest you can immediately begin to distinguish A players from B and C players, beginning with your initial phone screen. You do so by telling a candidate exactly how you will be measuring his or her performance in the job you’re hiring for.

How candidates react will tell you plenty about them. C players, for example, probably won’t be able to hang up the phone fast enough, since they don’t want any part of being measured. A players, on the other hand, will take your bait and get excited for the chance to excel. They might even up the ante by asking you what’s in it for them if they really crush it and exceed your expectations.

It turns out there’s an even better question you can ask candidates to help assess if they are true A players once you have them in for an interview. I learned about this magic question from Joel Trammell, the CEO of software company Khorus, who I wrote about in my book Great CEOs Are Lazy.

Joel believes that CEOs can’t delegate hiring decisions to someone else like HR. He perfected his hiring method by interviewing every single one of the hundreds of employees in his company.

Doing those interviews, Joel found that there was a single question that helped him assess whether a candidate understood the job being applied for and what he or she needed to do to excel in it.

“If I was to hire you, how would I know if you were doing a good job?”

This is a great question because it forces the candidate to put herself into the job and be thoughtful about how she might be measured by you, her boss. The answer you get will tell you a lot about the candidate’s maturity and comfort level with having her performance measured.

If you ask a C player this question, for instance, you might get some stammering followed by some noncritical metrics such as he will show up for work on time and not take extended lunch hours.

A players, on the other hand, will give you exactly what you’re looking for. Let’s say you are hiring a software engineer. When you ask an A player the magic question, he might respond by saying you will know whether he is doing a good job by using three metrics: the total volume of software code he produces on a weekly or monthly basis; the quality of the code based on a limited number of bugs; and his on-time delivery rate in which he hits the targets he said he would.

This would be a great answer because each of the metrics is measurable and quantifiable. You know if you had a group of engineers who were all willing to be measured on those metrics, you’d have a high-performing team.

Similarly, if you were hiring a salesperson, you might want to hear her answer the magic question by saying that you could tell she was doing a good job if she was exceeding her quota and selling profitable business, and her customer satisfaction rating was off the charts.

A key point here is that while you might know what you want to hear from a candidate, leave some wiggle room to be surprised and to learn something new about the position from an A player–someone who might think of a metric you’ve never considered.

The beauty of asking the magic question is also that, after the candidate gives you his answer, you pause for a second and say: “Let me write these down because, if I hire you, this is exactly how I will measure you after you start your new job.”

In other words, you can use the answer to the magic question as a great onboarding tool in which you have eliminated any chance that your new hire will be surprised about what is expected of him after he starts his new job.

How magical is that?

Why Netflix Doesn’t Tolerate Brilliant Jerks

What do you do when someone who is unquestionably brilliant is also a jerk?

We all work with someone who is unquestionably brilliant. You know the type: the person who consistently comes up with great insights and ideas and who can cut to the quick far faster than anyone else in the organization. It’s hard not to step back and admire how the person’s brain works.contact us now

At the same time, such people can begin to think their gifts place them above everyone else in the organization. They tend to hog all the airtime at meetings by intimidating and maybe even ridiculing those who might have the audacity to offer their own take on a situation–thus suppressing collaboration and participation throughout the rest of the organization. They also follow their own rules and are evenabusive to the rest of the staff. They aren’t nice people to be around. In other words, these people are jerks–which creates real issues within your organization.

But since they are brilliant, what should you, as the leader of the organization, do about it?

Netflix CEO Reed Hastings has been very clear about what his organization does with its brilliant jerks: It gets rid of them. As he has said in the past about them: “Some companies tolerate them. For us, the cost to effective teamwork is too high.”

What Hastings came to realize is that regardless of how smart or even how productive such employees might be, they can actually begin to rip an organization apart from the inside if they don’t buy into the organization’s values and embrace working collaboratively.

In my upcoming book, Great CEOs Are Lazy, I call these folks “cultural terrorists” because of how destructive they can be to an organization. Certainly, your first option should potentially be to use coaching as a way to polish a brilliant jerk’s prickly edges. Obviously, you can’t make anyone a nicer person, but perhaps you can make the person aware of how damaging her behavior is to peers and see if she is willing to make changes accordingly.

If these folks are unable to change their behavior, however, then they leave you no choice but to exit them from the organization. By doing so, you’re making a powerful statement to the rest of your team about how important your culture is–what is tolerated and what is not. The longer you let them remain, the more damage they cause inside your culture and to your own reputation as a leader. People will lose trust in your abilities, which can undermine all the hard work you’ve done to build a strong team in the first place.

When you exit a cultural terrorist, it should be known within the organization that the person is no longer with you because of her behavior, not due to her performance on the job. This will set a tone about the kind of culture you want to build and the kinds of behaviors you’ll accept–and the kinds you won’t.

There are organizations where brilliant jerks are welcomed and where they thrive. For example, I know of several prominent consulting firms where individual contributions are valued more than teamwork. And that’s OK if that’s the kind of organization you’re trying to build.

But if you’re like Netflix and believe there is greater collaborative power through teamwork, then you need to act now when it comes to dealing with your brilliant jerks. You can’t afford to wait until after the damage has been done.

 

One Trial Learner Failure Isn’t an Option

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Great CEOs accept that in order to innovate, then failure isn’t an option – it’s required and part of a healthy learning process. However, they make sure they are a “One Trial Learner.”

If you hang out with CEOs all the time like I do, you hear a lot of talk about some are worried about making mistakes. I’ve found that some CEOs spend a lot of time trying to avoid making them–then find themselves stuck in a loop of over-analysis.

Great CEOs, on the other hand, think very differently about mistakes. They have accepted that if they want to innovate by doing things better and more profitably, they will inevitably stumble at some point. They also make sure that they are a “One Trial Learner.”

What I mean by this is that great CEOs try a lot of different things–many of which don’t pan out. They make mistakes. But the goal is to use those errors as learning experiences that will help you avoid making those same mistakes again in the future. They are also careful to make sure that those mistakes are not below the water line–ones that can sink the business.

I remember one CEO sharing a great piece of insight with me when he said: “I will make a lot of mistakes, but my goal is to make none more than once.”

This is not only a great mantra for personal productivity, but also for organizational productivity. To be an innovative organization, you need to embrace the concept of being a One Trial Learner which means you as an organization need to be trying lots of things and making lots of mistakes along the way. The trick is to learn from the mistake and not make it again.

If you want to innovate, you need to be willing to make mistakes–only you shouldn’t be making the same one twice. It’s all about taking what you learned from the experience of making the mistake and integrating that into advancing your organizational thinking. This turns rapid failure into rapid learning.

Don’t Touch the Stove!

It’s like back when you were a kid and your mom told you not to touch the stove whenever it was on. But you did it anyway, right? But most likely, you did it only once because you learned from that mistake with a burnt finger. That’s what being a One Trial Learner is all about.

New Coke Died Quickly

The beverage giant Coca-Cola certainly acted like a One Trial Learner in the wake of its disastrous introduction of New Coke back in 1985. But with some hindsight we can understand why they made the decision to launch the new product, and ditch the “classic” version they had built the company around, because taste tests showed that consumers wanted a sweeter flavor comparable to what Coke’s rival, Pepsi, was offering.

Coke was trying to innovate and reinvent itself–which is actually a commendable strategy that too many firms don’t have the courage to undertake. Yet in this case, New Coke ended up becoming a gigantic mistake because the folks at Coke underestimated the brand loyalty they have developed among their customers for that original flavor. When they ditched that in favor of the new recipe, it quickly became a nightmare of epic proportions for the company.

But Coke quickly rebounded by bringing back the original recipe in less than three months, then called Coke Classic, and also ditched New Coke a few years later. While every business school professor out there uses this story as a lesson of what a company shouldn’t do, Coke did learn from its mistake because it has never messed with its flagship recipe ever again. They proved to be a One Trial Learner.

Ryanair Listens and Learns

Another example of a One Trial Learner in action involved the budget European airline Ryanair. The company’s business plan is all about offering a bare bones option: to keep their fares as low as possible, customers basically have to pay for just about everything, including food, beverages, and their baggage. But the airline apparently went one step too far when it talked about introducing a plan that would require customers to actually pay to use the lavatory on the plane. While it made sense on paper–that certainly would have become another profitable revenue line on each flight–it was simply too much for its customers: they basically revolted at the very notion of paying to go to the bathroom.

To their credit, Ryanair listened to their customers and ditched the pay-to-pee idea and began looking for other ways to both shave costs and make money. And they did it quickly.

Learning Culture

The final point is to build a culture that embraces smart failure and quick learning. You cannot shoot the person that dares. Rather–they should be celebrated and the organization should seek to learn from the risk they took, and create something better. The only thing people should be castigated is taking stupid risks or worse, making the same exact mistake multiple times.

The point is that if you want to build an innovative organization capable of cutting-edge breakthroughs, you need to be willing to make mistakes and learn from them – that’s what being a One Trial Learner is all about.