HOW TO HIRE FOR SUCCESS

iStock_000025903863_Small-768x511

In this column, I am addressing ways to hire for success.

“I am looking for a new manager for my practice. Do you have any suggestions on how to hire the right person?”

A critical hire is the administrator or manager of the practice. I have seen great managers help grow the revenues and prestige of a practice, and I have unfortunately seen mediocre leaders create a toxic culture that negatively impacted profitability.  Companies that attract and retain great talent know that hiring is important and that it should be done with great care.  I subscribe to the theory “hire slow, and fire fast.”  Great hiring is a process, not a one-time event.  I will summarize below some of the best practices in creating a first class hiring program.

Clarify Your Needs

The first step is to know what you want.  Do you have a job description in mind?  What are the specific duties that you want the manager to handle?  What could this person do to free you up more?   You want to write this description down. There are standard formats to follow, but feel free to improvise and be creative. This is your roadmap for the new employee, not a boilerplate document.   Besides just the tasks and responsibilities of the new hire, it’s also important to consider the skills and abilities that you what the employee to possess.   I consider technical proficiencies such as using Microsoft Excel as well as soft skills such as leadership and communication.  What’s interesting is that successful employers know that the real key is to hire for attitude.  You can teach technical skills and even soft skills, but I have found that trying to get people to improve their attitude is virtually impossible.

In addition to knowing what you want, you need to consider the compensation you want to pay for the position, including any bonus incentives.  I like to consider third party comparable data as well as local market knowledge to find the proper pay grade.  I also consider the impact on the budget as well as think through creating the proper financial incentives to align the employer with the employee.

Build Your Candidate Pool

Now that you have clarity on what you want, the next step is to solicit potential candidates. This can be done in a variety of ways including traditional newspaper advertising, internet search tools such as CareerBuilder or Monster, third party recruiters, and word of mouth. I often receive emails from colleagues looking for recommendations for hires. Another avenue is to get your employees to submit referrals.  Some companies even have bonus programs for employee referrals.  You have to be careful about hiring “buddies,” but it’s helpful to get referrals from employees whom you trust and that actually know the candidates.  In this solicitation phase, you are creating your pipeline of candidates.  You want to make sure that you have a clear timeline and process for intaking and following up with people.

Narrow the Field

Once you have built a good pipeline of prospects, you want to narrow the field through resume review and phone screening.  Does the candidate appear to have the background and training that you are seeking?  Can the candidate communicate clearly? Are they articulate? If you don’t have a good first impression on the phone, then your staff, patients, and vendors probably won’t either.  This process should whittle your prospect group down significantly to a handful of candidates to bring in for an initial interview. If possible, have someone interview the candidate with you.  It’s helpful to get two perspectives on the interview.  If the candidates pass through the “gate” of a first interview then I recommend a potential 2nd and 3rd interview as well as the opportunity for your staff to interview them.  It’s amazing how empowering it is to have your staff participate in the hiring process.

For candidates in critical roles such as being an administrator, I also recommend interviewing them in a social setting such as a lunch or dinner where you can see if the person behaves any differently than in the formal interview settings.  This can reveal a lot about someone that does not always come out in an office interview.  All along the way, you should be respectful of those candidates you are not going to continue with and let them know accordingly. You also want to always be clear with people about next steps and follow up expectations.  This shows respect for people as well as demonstrates the professionalism of your practice.

Trust, But Verify

Finally, you want to check references.  So many people don’t actually check references, but I have seen it help employers avoid huge mistakes by actually taking the time to check them.  Besides the best practices described herein, you also want to make sure that you are following the proper applicable legal requirements in your hiring process.  Hopefully, the fruit of your effort in this process will culminate in a formal offer letter which is accepted by your new hire!

HOW TO VETT A BUSINESS OPPORTUNITY

iStock_000059780820_Small-768x518

Like other high-income earners, physicians are often sought after sources of angel investment funds for start-up or growing businesses. I am often asked to review and analyze these business opportunities for physician clients.  In this article, I am summarizing the key considerations for evaluating potential investment business opportunities in startups or growth companies.

Vision, Values, and Strategy

Can the company’s management articulate a clear vision and strategy for the company? In other words, do they know what they stand for, and do they have a plan for where they are going?  Many companies suffer from a lack of focus.  Research supports that companies with a narrowly focused strategy will generally outperform the competition.  I am wary of any company that can’t clearly articulate their value proposition in the marketplace in 30 seconds or less.  I also look for whether management and employees are all in sync on the company’s vision and strategy.  Many companies overlook the creation of a value statement.  I prefer companies that know what they stand for.  Difficult times will face every organization.  Value statements that have real meaning and adoption provide anchors during turbulent times.

Execution

This is one of the hardest things to actually find out in due diligence, but probably the most important.  Here, I am trying to determine whether the management team can actually execute the company’s strategy.  Many people confuse effort and activity with execution.  Successful companies have high functioning teams that execute with purpose and passion to get things done.  I ask questions about how management creates accountability in the organization or look for examples of past execution to try and determine whether the management is execution-oriented.  Other clues to whether a management team can execute is the level of organization, timeliness, and if they are goal oriented.  I like to see clear written goals and action plans.

Products/Markets

People raising money for a company should have a clear command of the marketplace they are competing in and how their products and services stack up against the competition.  Is the company swimming in the “red ocean” of a very competitive market or the “blue ocean” of new and untapped markets?   If they are in a very competitive market, then can they clearly articulate why their product/service is differentiated from the competition?  In a new market, how are they pricing their products and gauging the overall market opportunity?  Many companies venture out and find that their market is actually much smaller than they thought. It is helpful if the company’s industry has solid data on size and growth.  High growth companies need large and growing markets to thrive.  I look closely at the price sensitivity of the products/services and the barrier to entry of other people to compete.   I also prefer recurring revenue companies versus companies that only have one-time sales.  Is the company a one trick pony or is there a pipeline of other products/services?

Management

No matter how good the products and services a company may offer, ultimately the success of a business depends on the quality of the people.   When you invest in a company, you are really investing in the management team.  Most companies in early funding stages lack a complete management team. I try to determine the strengths and weaknesses of the management group, and I want to understand how they will shore up the deficiencies in the short term and what their long-term plans are for fully staffing the management team.   Does the management group complement each other or is there too much overlap?  Are any of the founders part of the management that may soon have to be replaced?  Replacing a management team member can be a time consuming distraction for a company.  I prefer managers who have experienced both success and failure.  We all know we learn more from our mistakes than our successes.  I would prefer that a management team not learn their failure lessons with my investment.  Great managers are great leaders.   They are high performers and can attract top talent.  I have found that the best leaders are great coaches and know how to get the most from their employees.   You want to avoid know-it-all’s and micro-managers because they will ultimately prove to be poor leaders and will run off talented employees.

What is the Exit?

Most investors eventually want their money back out of the company in a reasonable amount of time.  A typical time horizon is 5-7 years.  What are the long terms plans of the company?  Are the founders creating a lifestyle business or a high growth company?   Typically, lifestyle companies will have slower growth but greater profitability.  High growth companies, often referred to as gazelles, usually focus on top line revenue growth.  These companies will typically lose money at first.  I look carefully at the “burn rate” of these type companies and want to understand when profitability will occur.  It is critically important that the owners and management all be in sync on the trajectory of the company and the goals for exit.

The Deal

Ultimately, the opportunity to own part of the company must be for the right price tag.  All pro-formas tend to look alike with slow growth in the early years and then the proverbial “hockey-stick”  high growth in the later years.  The investment and corresponding ownership should be reasonable based on very conservative financial projections. There are also a number of ways to creatively structure a deal to provide additional risk mitigation for investors.  In addition, the legal terms and conditions of the corporate documents you will be signing are a major factor to consider.  Structuring the financial deal and key terms and conditions will be explored in more detail in a future column.

While this is an abbreviated list of due diligence considerations when vetting investment opportunities, hopefully it will provide you a framework to begin to consider future investment deals.  For an easy checklist summarizing these points and others, feel free to email me, and I will send you a copy.   Good luck in your investment future!

SECRETS OF TIME MANAGEMENT FOR BUSY ENTREPRENEURS

iStock_000064989751_Small-768x511

Time is a precious commodity for most of us and particularly for entrepreneurs. 

Trying to juggle the various roles in life while starting a new venture can be overwhelming.  We all have 1,440 minutes a day to maximize and allocate as effectively as possible.     When you think of great achievers in history like Bill Gates, Mother Theresa, and Leonardo da Vinci, it often seems like they somehow had more time to spend than the rest of us.  However,  as author Stephen Covey aptly stated “The key is in not spending time, but in investing it.”   The truth is that time management is really an elusive concept.  High performers know that self-management is the real key, and they wisely manage themselves to invest their time wisely.

Bridgforth Rutledge is a busy guy.  With six children, a full time law practice as a partner with Phelps Dunbar, a number of commercial and residential real estate investments, and eight restaurants, 37 year-old Rutledge seems to be one of those who somehow has extra hours in the day.   The secret is how he has chosen to invest his time. As Rutledge noted, “I try to be intentional in my use of time.  This allows me to focus on what is most important.”  Rutledge began his entrepreneurial journey at age 20 when he bought a HUD house and renovated it.  At age 25, when most of us were still figuring out what to do with our lives, Rutledge secured the land across from the University Medical Center on State Street in Jackson and convinced the CEO of the Back Yard Burgers franchisor to let him open up a franchise restaurant. Rutledge now has seven BYB franchises and has twice been recognized as having the #1 BYB restaurant in the country.  There are a few core principles that have helped Rutledge in juggling a busy life and to be so productive which I have summarized below.

CUT THE FAT

Early on, Rutledge realized that he would have to be very efficient in his use of time.  For example, his family does not have cable and rarely watches television.  While an avid exerciser, he does not indulge in time consuming hobbies such as golf.  For each person, they will have to determine where the “fat” in their life is that needs to be cut.   The key is to understand your priorities and to diligently rid yourself of time wasting habits that are inconsistent with your goals.

DELEGATE

Similar to the location, location, location mantra in real estate, the same could be said for delegation.   Most entrepreneurs tend to start off trying to do everything themselves which ultimately proves frustrating and unsustainable. As Rutledge affirms, “Delegation has been an acquired skill that did not come naturally at first; however, it has been a critical part of my ability to grow my businesses.”  Like other successful business people, Rutledge believes in taking the time to find the right people and paying them well.  While being very selective is more consuming on the front end, it pays large dividends on the back end by having “A” players on the team who you can trust.

TAKE THE LEAP

When you look at his accomplishments at such an early age, it is apparent that Rutledge has been willing to take the leap and move forward on projects that involve risk. Many people talk and think about taking the leap into entrepreneurship, but stop short of taking the first step.  Usually the concerns over “not enough time” and fear of failure are the two main limiting factors.  Rutledge encourages people to take calculated risks and follow their dreams.

As Benjamin Franklin stated “You may delay, but time will not. So never leave for tomorrow which you can do today.”

In our fast paced world, the ability to manage one’s self and make effective use of time is a critical skill. Bridgforth Rutledge is a great example of what can be accomplished when your life is lived with intentionality and purpose.  I anticipate that we will be hearing about his contributions to the Memphis business community for a long time.

BUILDING A CUSTOMER SERVICE CULTURE

After an unplanned hiatus from much airline travel, I have recently begun once again frequenting the “friendly skies.”  As with many service businesses, I am struck by the wide variance in customer service among the airlines.  While some companies acted like they were doing me a favor to let me travel with them, others actually made traveling fun.  Having been involved with service businesses for almost twenty years, I am fascinated by how some companies seem to make customer service look so easy while most others glaringly fall short.

Shining examples of stellar service include Chic-fil-A, Southwest, and, of course, Disney.  In fact, a friend recently shared with me a classic Disney experience.  After several tense minutes at the front desk trying to check into their room, they were shocked to find out that they had been randomly picked to be upgraded to a luxurious suite for their weeklong stay.  That’s service!  No telling how many people they have shared that positive Disney experience with.

What’s the secret? Why do some companies just seem to do it better than others?  On individual basis, it obviously starts with great people.  I read an article in the Wall Street Journal about an airline pilot who displays exemplary customer service. Capt. Flanagan routinely takes pictures of stowed pets to let the owners know they are on board and safe; calls the parents of children traveling alone to reassure them; and writes notes on his business card to first class passengers to thank them for their business.  In fact, when storms detour his flights to unplanned destinations, he will often call ahead and order food for his weary passengers. If only the rest of United Airlines’ pilots shared his passion they would dominate the market.

Secret Service

John Dijulius in his book Secret Service  gives us some great practical guidance.  Dijulius has studied many of the great customer service companies and applied their best practices in his multi-location spa/salon business located outside of Cleveland, Ohio.  Using practical illustrations, he examines what truly allows some companies to excel.  He describes how every company has their own customer experience cycle. For example, how does a prospective customer first interact with your business? How is your product or service delivered? What follow up occurs with each customer? Diagramming this process will allow you to see what your particular business’ customer experience cycle looks like and who plays the critical roles in its success.  Only then can you design a world class customer experience cycle that you can implement in your business.

Creating the Experience

Almost every business can benefit from enhancing their customer’s experience.  Think about your own interactions as a customer. Where was the last place that made you say Wow!  Where did you last stop and take note of the outstanding service that was being provided?  Was it at your physician’s office or car repair shop? Was it maybe during your last dining experience or retail excursion?  Think further about who consistently Wow’s you.  Where can you go time and time again and feel like you are truly appreciated and taken care of as a customer?  Disappointingly, in my experience, there are too few of these. The key for business owners is creating a quality and repeatable customer experience.

Moving Past Good Intentions

Most business owners I know want to please their customers. They know that their customers are the lifeblood of their business.  The problem is that great customer service is great in theory but tremendously difficult to consistently execute on.  I see many companies that start off with high aspirations and great intentions regarding customer service.  However, for many business owners, the day to day demands of payroll, rent, and staffing tend to overshadow proactive customer service activities. Before losing hope, remember that it can happen – you really can have great customer service.  The key is to put yourself in the shoes of your customers and truly understand your company’s unique customer experience cycle.  Once you design a great customer experience, then it takes good hiring, lots of training, and accountability systems to make this a reality.  Customer service can’t be left up to chance but must become a non-negotiable systemic part of your business.  Applying these and other customer service best practices will help you create a competitive edge in the marketplace.

TOP GRADING YOUR TEAM

Topgrading® is a recruitment and interviewing philosophy developed by Bradford D. Smart.

It is a highly structured approach which is designed to ensure that only the highest performers – what Smart calls “A” players are hired. According to Smart, Topgrading is “the practice of creating the highest quality workforce by ensuring that talent acquisition and talent management processes focus on identifying, hiring, promoting, and retaining high performers, ‘A’ players, in the organization.”  When you Topgrade, you are packing your organization with high performers at every level. 

In surveys, companies report that only 20-25% of their hires are high achievers.  By design, Topgrading is designed to improve this to 90%.  From an organization’s standpoint, that is a huge difference.  For a typical medical practice, if each staff position was filled with an “A” player then patient care, employee satisfaction, and financial returns would be significantly enhanced.  Topgrading has been used for years in organizations like GE, Honeywell, and the American Heart Association.

The language of Topgrading refers to A, B & C employees.  An “A” player is defined as someone who is in the top 10 percent of the talent available for the job; “B” players are the next 25 percent; and “C” players are in the bottom 65 percent.  The reality is that “A” employees won’t work for long for “B” and “C” players, if at all.  Therefore, you need to make sure your leadership and hiring team are “A” players themselves.

Smart’s book “Topgrading” is a 650 page fact and example filled read.  His son, Geoff who works with him, has written a more easily digestible book called “Who.” In this book, Smart and his co-author Randy Street lay out their process for hiring “A” players.  In this disciplined approach, there are four key components –

(a) Creating a scorecard for performance for the role

(b) Sourcing for the slots to fill

(c) Selecting the right employee through structured interviews

(d) Selling “A” players on the opportunity.

In developing a scorecard, you want to define the mission of the job.  This is an executive summary of the job’s core purpose.  The scorecard should also define the outcomes which define what must get done by the person in this role.  This is like a job description but focuses on outcomes versus activities.  Finally, the scorecard details out the competencies needed in the job which define how you expect a new employee to operate in fulfilling the job and achieving the outcomes. This process should also include an analysis of the culture of the organization so you know if someone is going to be a good fit.

Sourcing quality candidates is a key component of Topgrading.  The first choice is to source through your personal and professional networks. “A” players know other “A” players so ask them first.  Smart and Street encourage employers to make sourcing of quality candidates part of the responsibilities of employment. This helps turn your team into talent scouts.  Smart and Street also encourage employers to think about their sourcing on a regular basis.  Like many other things in life, if you wait until you need it then you are probably too late!

The interview process itself is obviously a key part of the Topgrading methodology.  Smart and Street recommends in “Who” a four step process of a screening interview, a Topgrading Interview, a focused interview, and a reference interview.  This is a very structured process.  For example, in the screening interview, Smart recommends the following questions: (a) What are your career goals? (b) What are you really good at professionally, (c) What are you not good at or doing professionally? and (d) Who were your last five bosses and how will they each rate your performance on a 1-10 scale and when can we talk to them?

One of the key aspects of this system is that you ask interviewees to coordinate reference conversations with prior employers.  This creates a reality check and it allows you to actually get meaningful information from prior employers versus the typical employment confirmation only.  This “threat” of reference check helps ensure honesty in the interview process.

Smart and Street suggests that after your interviews you want to decide if you want to continue with the interview process.  They recommend evaluating candidates on both their skill and their “will” for the job. They suggest that you know you have the right hire when (1) you are 90 percent or more confident that a candidate can get the job done because his or her skills match the outcomes on your scorecard, and (2) you are 90 percent or more confident that candidate will be a good fit because his or her will matches the mission and competencies of the role.

Finally, you sell the potential “A” employee on the what Smart and Street call the 5 F’s of selling – fit, family, freedom, fortune, and fun.  They encourage employers to make sure that they are consistently selling potential “A” candidates through the process and are purposeful in what they are communicating about the opportunity.

While all of this may seem time intensive, it is consistent with the philosophy of “hire slow and fire fast.”  In reality, we tend to do the opposite.  We have an interview or two, maybe check a reference, and hope for the best.  Once hired, even “C” employees tend to linger around because of the headache involved in firing people.  In your business, every role is important, regardless of wage.  I encourage you to learn more about Brad and Geoff Smarts’ work in Topgrading and invest the time and energy and creating an all-star “A” team.

LEADING BY EXAMPLE

Leadership is such a commonly used term that its meaning has become quite nebulous.  I can identify with the quote about leadership, “I can’t define it, but I know it when I see it.”  During the recent economic downtown, I have seen first hand how important real leadership actually is.  When times are tough, it is easy for morale to slip which only compounds problems in an organization. It takes real leadership to keep management and employees focused, aligned, and working hard to succeed.

According to an extensive study conducted by Hay Group, a global management consultancy, trust and confidence in top leadership was the single most reliable predictor of employee satisfaction in an organization.  When you read military histories, there are countless examples of soldiers continually risking their lives to follow leaders they trusted.  Even when times are tough, great leaders will have people that will follow them into “battle” because of the trust and confidence that they have in their leadership.  This kind of trust and loyalty does not happen accidently.  It is the result of leaders who continually invest themselves in their people. One of the most impactful ways to develop this type of employee commitment is to lead by example.  As any parent knows, the old saying “do as I say and not as I do” is a recipe for poor performance.

Don Primos is a 3rd generation entrepreneur and restaurant owner in the Metro Jackson area.  His grandfather Angelo “Pop” Primos founded Primos Bakery in 1929 and the Primos restaurants have been a part of the community ever since.  When 60% of restaurants close within five years of opening, it is worth noting the long-term success of the Primos restaurants.   While there are several factors that have contributed to the success of the Primos restaurants, one of the key reasons is the “hands on” leadership style of the Primos family in their restaurants.   While the days of always having a Primos at the cash register are gone, you will still find Don Primos most days working side by side with his staff. As Don describes, “I don’t ask my employees to do anything I would not do myself.” Don grew up in the family restaurant business and learned first-hand this type of leadership style.

In 1977, at the age of 22, Don formally entered the family business with his father Kenneth and his brothers Will and Ken to operate the Northgate Primos which was a popular restaurant and meeting place for many years until its closure in 2001.  While his brothers and father eventually exited the business, Don has continued the family enterprise.   According to Don, “As my family left the business, I knew I needed to surround myself with a loyal management team to help me meet the demands of the restaurant.”  Don’s leadership by example and personal interest in his employees has led to the creation of a family atmosphere amongst his staff.  Building a loyal team allowed Primos to successfully open a new concept restaurant, Primos Cafe, on Lakeland Drive in 2001 and a similar style restaurant on Lake Harbour Drive in 2006.

Don’s leadership by example sets a great model for his staff and encourages a team atmosphere which he emphasizes.  A good leader helps set the pace and tone of the organization.  I continue to be amazed at how much employee’s gear their performance around the expectations and example of their leaders.  Noted leadership guru John Maxwell aptly stated, “ A leader is one who knows the way, goes the way, and shows the way.”   I am sure that Don Primos will be showing the way for his team with his hand-on approach for many years to come and continuing to build upon the Primos entrepreneurial legacy.

THE VALUE OF CULTURE

I must have looked lost as I was meandering down the food aisle at a Publix Super Market.  As I was unsuccessfully trying to pick up a few items off my “honey do” list from the grocery store, I heard the words from a friendly Publix employee, “Can I help you find something?”  I was a little caught off guard because I couldn’t remember the last time I was asked in a grocery store if I needed some help with my shopping.  I was prepared for some directions on where I could find the missing item; but instead, the employee insisted on retrieving the product for me while I continued my shopping.  WOW!  I was blown away.  As a business coach and consultant, I take note of great service.   I was also intrigued.  What kind of organization was this with employees who were so passionate about customer service?  As I was in the checkout line, I shared my positive experience with the checkout clerk (who was also very friendly).  I asked to speak to the manager of the store so I could report this excellent customer service.

I learned a lot in my brief exchange with the store manager.  This young man shared with me that this was normal behavior for their employees.  I learned that he had been with the company for over twenty years and started as a part time employee in high school bagging groceries.  As I pressed in for the secret sauce to the great service, he pointed my attention to their secret – THE CULTURE!  He shared with me how important the company’s culture is and how much attention they pay to cultivating and reinforcing it throughout the organization.  The focus on culture has paid off for Lakeland, Florida based Publix. It is the largest and fastest growing employee owned super market in the country.  With over $27 billion in sales, 1,056 stores, and 157,000 employees, Publix is ranked 106 on the Fortune 500.  What caught my attention though was that the company had been on FORTUNE magazine’s “100 Best Companies to Work For” for over 16 years.

Publix’s emphasis on its culture dates back to 1930 and the company’s founder George Jenkins. Jenkins held himself to the high standards he expected of others and created a culture of service “not only to the customer who came into the store to shop, but to every associate as a customer of another associate.” Jenkins and other leaders believed that “people want to help, and, if given the resources to do so will provide extraordinary service.”   One of the ways they create such loyalty is by promoting from within.  The current CEO and President each started out in Publix as front-service clerks over 25 years ago.  I also took note that, the average tenure at Publix for store managers is 25.1 years, retail hourly workers average about 5.1 years, and hourly support workers average about 9.1 years.

As I have studied companies like Publix, I have become convinced that building a great culture is absolutely one of the keys to building a great company.  It is particularly important for any company that wants to grow and expand with people.  For some, talk about culture may sound “soft” or of secondary importance.  These type naysayers may believe that having a great culture is a “nice to have” versus a “must have.”  Very few companies can afford to ignore their company culture.  If your company involves people interacting with people, then you should be paying attention to your culture.

 For definitional purposes, I describe a company’s culture as the shared values and practices of the people in the organizationThese are the common beliefs and habits of the organization.  Here is the critical part – your employees represent YOUR BRAND.  They are the living, breathing implementers day to day of what your company stands for.  In other words, they are the front line in creating your brand in the marketplace.  Companies can spend millions on positive advertising but one bad interaction with a representative can destroy the customer’s feelings about the company.

I was attending a conference at the Ritz Carlton in New Orleans recently, and as I was leaving a member of the housekeeping staff stopped me on my way to the elevator and wanted to make sure I had enjoyed a great stay at the hotel and wished me safe travels on my journey home.  She did not have to do that.  It was probably not part of her job description.   However, with a smile and genuine sincerity she made a point to wish me well on my way.  I have shared with dozens of people about this simple exchange and how that positively reflects on the brand of The Ritz Carlton.

Gregg Lederman, founder of Brand!ntegrity and author of the book entitled Engaged! Outbehave Your Competition to Create Customers for Life, travels the country helping companies realize the value of culture and how important it is in developing their brands.  He notes, “Branding is not part of the business, it is the business. Every interaction with an employee, with a coworker or a customer has the power to strengthen or hinder the brand image of your company.”  Lederman emphasizes that branding is about experiences and not logos and taglines.  He teaches companies that the little things that they do daily are more important than the big things they may say about themselves.  I believe and share with my clients that every day their doors are open is “Game Day,” and they should treat it with the opportunity for greatness.  Unfortunately, for too many companies it becomes like “Groundhog Day,” and mediocrity can creep in.

I recently discovered Lederman’s company and work, and I have been impressed.  In addition to his thought leadership on this subject, his company has come up with something truly unique in my opinion.  They have created a proprietary software system that actually allows companies to better manage their brand by tracking and measuring customer satisfaction, employee engagement, and financial results. What they have accomplished is the linking together of these critical aspects of the business in a quantifiable way that encourages the right behaviors.  This use of metrics and creative ways to reinforce positive behaviors strengthens and builds the culture, and it is all tied back to the company’s profitability.   I believe in the future we will see more and more organizations focused on building powerful brands, and I think we should all start to consider what is our R.O.C. – Return on Culture.  

THE POWER OF TRUST

I admit that I’m a nervous online shopper.  

Several years ago, a credit card number of mine was “stolen” online, and I had to sort through quite a mess to clean it up. Since then, I’ve been careful about doing business on the web.   If you’ve ever shopped online, you’ve probably noticed the checkmark logo from VeriSign that appears on web commerce sites utilizing their SSL encryptions services.

A recent case study demonstrated just how powerful this little logo can be. With more than 500,000 online and local stores responsible for more than 400 million products sold, TheFind is the world’s largest online shopping center. This virtual shopping mall has more than 17 million unique monthly shoppers. TheFind’s analysis showed that companies displaying the VeriSign seal received 18.5% more click-throughs than similar companies that did not display the VeriSign seal. Interestingly, Symantec, a software company known for its security products, and VeriSign recently announced a deal for Symantec to purchase VeriSign’s identity and authentication business, which includes SSL Certificate and Public Key Infrastructure (PKI) services, for $1.28 billion in cash. One of the key drivers in this transaction is the brand recognition of the VeriSign seal being acquired by Symantec.

What does that VeriSign seal really seal stand for? Trust! The web commerce sites using the VeriSign seal benefit from consumers like me, who trust that if I provide my credit card information, then I don’t have to worry about someone going on a spending spree of plasma TVs in a third-world country on my dime. This is just one example of the power of trust in business.

Upon reflection, you see how truly important trust is, both in the business world and life in general. If I don’t trust my wife, then I will make our lives miserable by always wondering what she’s doing.  If I don’t trust my employees, then I will micro-manage their efforts and keep them in a state of dependence and little self-confidence. If my business partners and I don’t trust each other, then we’ll waste valuable time and resources looking over our shoulders.  If my clients don’t trust me, then they won’t be willing to pay me for my services.

In leadership, trust is critical.  How inspired are you to follow someone you can’t trust? Conversely, when we trust someone, we’ll go to great lengths to sacrifice personally to support the cause of the leader.  Too often, we betray our trust through self-serving behavior.  Trust, like friendship, is something you have to be willing to give if you want to receive.  As George MacDonald noted, “To be trusted is a greater compliment than to be loved.”

While trust has always been important in business, I believe that it’s increasingly becoming paramount to success in business. Jim Burke, former CEO of Johnson & Johnson noted, “You can’t have success without trust.”   Similarly, Robert Eckert, former CEO of Mattel, stated, “As you go to work, your top responsibility should be to build trust.” There are confluences of factors that have increased the need for trust today in business.  First, we have a more dispersed workforce. Instead of rule-driven factories, we work in an increasingly virtual world.  Many employees work from home today and manage flex time schedules.  As managers, it’s more difficult to micro-manage employees that are 1,000 miles away.  More than ever, companies today have to center their corporate culture on shared values and trust.

We also live in a transparent world.  Companies used to be able to keep secrets.  Today, anyone with a camera phone or a computer can be a whistleblower.  Any customer with a problem can litter blogosphere with negative things about a company.  As Dov Seidman pointed out in his book, How, today it’s more important how companies operate than what they do.  His point is that the greatest strength of a company today is its trustworthiness.  In the wake of the financial collapse, financial institutions are having to go to great lengths to restore the trust with customers.

If, as leadership guru Warren G. Bennis asserted, “trust is the lubrication that makes it possible for organizations to work,” then perhaps we should start to consider how to increase our trust individually and organizationally. While trust can be a nebulous concept, it essentially means that I have confidence in you, and I’m willing to put myself at risk to “do business” with you.

Even though one can employ manipulative tactics to gain another’s trust, I believe we’re much better served by truly becoming trustworthy people. This means we need to act with integrity.  We can’t be saying one thing and acting out another.  We need to be reliable.  When we make promises, big or small, people need to be able to count on us.  We have to be capable. This means that we have to actually be able to deliver on what we say we can do.  Capable people are lifetime learners who are always striving to get better.  We also have to be “others focused.”   When we are simply out for No. 1, it shows through.  We genuinely have to increase our ability to know and understand the people we work with and desire to serve.

As we hopefully continue to come out of this financial malaise, we all have a level of fear and uncertainty.  As businesspeople, now is the time to truly help others work through their uncertainties and be known as a trusted resource. Becoming trustworthy is a noble journey with substantial long-term dividends. It’s certainly not an easy path, and we’ll all stumble along the way.  However, the bilateral transaction of trust is essential to success in life and business, so hopefully we’ll encourage one another on this journey and learn to trust each other more.

THE MAIN THING

In the 1991 box office hit City Slickers, Billy Crystal’s character Mitch Robbins is going through a mid-life crisis. His two buddies played by Daniel Stern and Bruno Kirby are not much better off and sign the three of them up for a two week old fashioned cattle drive in the great Southwest.  For the New Yorkers, it is quite a culture shock particularly dealing with their seasoned, hard–nosed trail boss Curly Washburn, played by Jack Palance.  In a classic scene, Curly holds up his finger and shares with Mitch that the secret to life is to focus on the “one thing.”  Of course, Mitch wants to know what that one thing is, but Curly informs him that he has to figure out what that one thing is for his own life.  In a medical practice or any other business, it is easy to lose track of what that “one thing,” or stated differently, the “main thing” really is.

I find that too often there is a lack of clarity among employees regarding what the main thing is, so organizations lose focus. Business is hard enough, but when everyone is not “on the same page” then it becomes that much more difficult to succeed. The first step is to get clarity about what the main thing is for your organization.  Perhaps your organization has a mission statement.  That is good start.  Maybe in that statement it is clear what the main thing of the organization is.  For example, the mission statement of the Mayo Clinic is, “To inspire hope and contribute to health and well-being by providing the best care to every patient through integrated clinical practice, education and research.”   MD Anderson Cancer Center’s mission is, “To eliminate cancer in Texas, the nation, and the world through outstanding programs that integrate patient care, research and prevention, and through education for undergraduate and graduate students, trainees, professionals, employees and the public.”

There is not one right answer for what the main thing needs to be.  The key is that it needs to be clear and concise.  Everyone should know and understand the main thing.  Looking at the two mission statement examples above, I find that the MD Anderson mission is clearer.  I would guess that their main thing is to “eliminate cancer.” That creates focus.  Employees can rally behind that cause. Your main thing should be clear to not only your employees, but also your customers, partners, and suppliers.

Once you have clarity about what the main thing is, you can’t simply take it for granted that everyone is going to remember it.  Leaders within organizations have to repeat, repeat, and repeat what the main thing is.  Great leaders communicate what is important to the stakeholders of the organization. Organizations naturally tend to drift, but great leaders keep everyone focused and aligned.  In other words, they “keep the main thing the main thing.”

Once there is clarity, you can strip away those things that are not consistent with the main thing. This is easier said than done and takes tremendous discipline and courage.  You will upset people because you will have to say “no” more.  However, unless we say no more, you can’t put your full energy on the important things you have said “yes” too.  When you have clarity about your main thing then it helps in making critical decisions.  You have to ask yourself, “is this decision going to help us achieve our main thing.”  If not, then the answer is no.

In one of his latest books Great By Choice, Jim Collins examines a set of major companies that achieved spectacular results over 15 or more years while operating in unstable environments which he calls “10Xers” because they provided shareholder returns at least 10 times greater than their industry.   About Apple®, Collins noted, “Steve Jobs didn’t so much revolutionize the company as he returned it to the principles he’d used to launch the company from garage to greatness two decades earlier.”   There is a recurrent theme in the book about sticking to the basics that made you a success.  The 10Xers all had what Collins’ calls Level 5 Ambition –  “the passion for a cause larger than themselves and infused with the will to do whatever it takes to make good on that cause.”

While the language may vary, the principle is the same, great organizations have a “cause”, or a “main thing” that is the focal point for all that they do.  The opportunity for us is to bring clarity into our organizations, and make sure that we have this type of motivating Level 5 Ambition to rally around.  As this is a journey and not a destination, we will also have to make sure we are diligent to realize when opportunities may take us off course.  Whenever you are feeling your organization starting to drift, think about old Curly and remind yourself to think about “what is your main thing!” 

LEADERSHIP RESOLUTIONS

The New Year brings a sense of renewal and change.  Studies show that almost half of Americans make New Year’s resolutions. Unfortunately only about 10% of those will actually achieve their goals. As you might imagine, resolutions to improve health and finances rank at the top of the wish list.  One of the key ways to achieve resolutions is to let them become a habit.  Psychologist Williams James noted, “All our life, so far as it has definite form, is but a mass of habits.”  While it is frequently said that it only takes 21 days to make a new habit stick, my review of the scientific literature on the subject indicates that it takes our brains closer to 60 days to actually rewire around a new habit.  As we enter 2015, here are a few leadership ideas to consider making a habit.

Just Say No

It’s tough to say no.  We might offend someone or miss an opportunity.  A friend of mine describes the need to “chase shiny things” versus staying focused.  However, great leaders know that the ability to say no is critical.  As Gandhi said, “A ‘No’ uttered from the deepest conviction is better than a ‘Yes’ merely uttered to please, or worse, to avoid trouble.”  Leadership expert Tony Schwartz similarly emphasized, “Saying no, thoughtfully, may be the most undervalued capacity of our times.” We have more options than ever and countless opportunities vying for our attention.  It is more important than ever to be purposeful about what we say yes to.  However, this is no easy task.  We often have to say no to many good things.  However, unless we say no to the “good” then we will never be able to focus our time, talent, and energy on the “great.”

Show Appreciation

Studies have shown that for knowledge workers, money alone is insufficient to motivate performance.  Dan Pink summarized this research in his book Drive and noted that workers are best incentivized by creating an atmosphere of autonomy, mastery, and purpose.  In addition, I believe that people need authentic and genuine appreciation.  As I interview employees in organizations, I am amazed at the number of them who have never been shown appreciation in any form.  Appreciation is like a gift.  There is no reason as a leader to be stingy with this gift.  Whether a subordinate, co-worker, or a boss, I highly encourage people to get in the habit of showing appreciation.

Follow Up

I believe one of the most difficult aspects of leadership today is living by the motto “say what you are going to do, and do what you say.”  As I was beginning my career, a wise businessman told me that if I would do good work, return phone calls, and do what I said then I would always have plenty of work to do.  I believe there is great truth in his advice.  As leaders, we need to make a habit of being excellent at follow up and execution.  In addition, if you have people that you are delegating to then you need to be very intentional about follow up.  One of my early mentors kept a legal pad where he wrote down every promise someone gave him regarding delivery on a project or task.  If you missed a deadline, you could expect an immediate phone call from him.  My observation was that his team knew that when they were assigned a task and deadline that he meant it.

I hope these ideas will be an encouragement to you to be the best leader you can be in 2016.

Creative design from the South

Get in touch with us!