How To Be A Good Employee

Respectful communication is essential to a happy, productive employer – employee relationship.

Here are some tips:

-          Communicate your limitations: If you are able to communicate the lack of a particular required skill, your employer will better understand your abilities. For example a good employee might say, ‘I’ve never edited a video before, so it might take me a bit longer to complete the task.’

-          Express your willingness to learn: A goal of many business owners is to shift some of their responsibilities. A good employee is open to new challenges! This willingness could result in improved job satisfaction, more freedom, a promotion or an increase in income!

-          Communicate your needs:  If there is an area of your job that could be made easier (and more productive!) with better tools, it is important that your employer is aware of this need. A good employee might say, ‘I just want you to be aware that if I had the updated version of this software, I estimate I could be 15% more productive.’

-          Share your personal goals: Employers want happy and productive employees. If there is an area of your job that negatively impacts your home-life, your employer may offer solutions that are mutually beneficial.

-          Be aware of your communication style: Because 80% of communication is non-verbal, be sure that you practice good email etiquette.

-          Think before you speak: It’s important to not interrupt or make assumptions. Try to be sympathetic and understanding. If you are unclear about something, you should ask for clarity. Remember: Grey and fuzzy creates problems – black and white solves problems – and increases your productivity and satisfaction.

-          Clearly state deadlines and expectations: If required to perform a task, let your employer know when to expect completion, and try to exceed expectations.

The leadership style of the business owner affects employees and conversely, I believe good employee behavior can actually improve the leadership style of the business owner.

Essentially, being a better employee benefits the employer and the employee – so why not give it your best effort?

Employer – Employee Dynamics

There is one management philosophy that says you need to have control over your employees, some need strict supervision in order to for them to be productive.

There is another management philosophy that says employees will take responsibility for themselves if you provide a culture of trust, respect and support, but provide them freedom to be productive without supervision.

Which one is right?

Both of them!  – Here’s why:

The controlling boss style works for the controlling boss. When he or she hires employees they know the management style. If they decide they would like to shun responsibility, they keep their job and work in the controlled environment the boss manages. This reinforces the management style is the true reality to the controlling boss. The other factor that reinforces the environment is with respect to communication styles. If you act like a ‘parent’ in your communication to another person, it often creates a ‘childish’ response. One of the big reasons the ‘parent – like’ controlling boss has such immature employees is because he or she creates the childish responses with ‘parent- like’ actions! And since 80% of your communication is non-verbal, it show up as ‘finger-pointing’ or ‘arms on the hips’ body language or in a ‘parent- like’ tone.

By the way, a childish communication from a boss can also trigger a childish response!

The other management style is to act ‘adult – like’ as the boss. This requires mature, respectful and trusting interactions. If you seek out potential hires who like this particular style, the ones who respond well to it will come work for you. The development of this ‘adult-like’ culture will grow at your business as a result. The culture won’t accept ‘parent’ or ‘childish’ behaviors. Each time the boss or the employee communicates ‘adult-like’, the response will tend to be ‘adult-like’.

The management style must also be consistent. It is easy to be ‘adult’ on a good day when everything is going well. The key is to also be ‘adult – like’ during the challenging events and communications about conflicting points of view.

In fact, I would be willing to argue the only time the management style really matters is during the challenging interactions.

So which camp do you fall into? Are there childish employees at your workplace?

Acting Versus Thinking

Today marks a significant milestone at The Business Therapist Inc. This is our 100^th blog post!

Here is a little history of how we got here:

a)      I talked about doing a blog for about 2 or 3 years, sometimes I thought really, really hard about it and it came near the top of my to do list a few times.

b)      I read two books on blogging (I would call this walking around the bike instead of getting on the bike and trying to ride it).

c)      I set up a WordPress blog myself (with some help). By the way, WordPress is a popular platform for creating blogs.

d)      I wrote and posted four blog posts in 2009.

e)      In 2010 I thought more about getting serious about the blog thing. Sometimes I thought really hard about it.

f)       In the summer of 2010 I got some professional help to revamp my entire web presence. We spent the next six months planning the marketing, the branding, the business model and our plan crystalized.

g)      In April, 2011 we relaunched the website and the blog is an integral component of it.  I committed to post to my new blog twice a week. Every Monday and Thursday.

h)      I surrounded by a great team to edit, post and keep me accountable to my commitment to action – and I actually did it!

Next thing you know, we are at 100 blog posts! I find it easy to create content just by interacting with my clients (the names are withheld to protect the innocent).

If there is some learning in my experience of getting to 100 blog posts, I would summarize it as follows:

“You can’t think yourself into a new way of acting, but you can act yourself into a new way of thinking!”

Thank you to everyone for your support and comments on this journey so far!

The Lean Startup – Pivot or Persevere

I just finished reading one of the best books I have read in a long time (and I read a lot of books). It’s called The Lean Startup by Eric Ries. Eric provides a scientific and proven approach to creative and innovative product developments. Although the context is for a startup business, it is just as relevant for an established business that wants to innovate. In fact he gives some good examples of large corporations using his methods to develop new products.

Eric Ries suggest you look at each new idea as a hypothesis or multiple hypotheses. At The Business Therapist we have lots of hypotheses. One of them is as follows:

We believe we can package good business advice as ‘knowledge as a product’ and provide it for sale on our website. By providing this advice at a fraction of the price that it would cost in the traditional business advisory world, it offers great value to the smaller end of the business marketplace.

He also suggests we only develop the product to the ‘minimum viable product’ stage before getting out in front of real customers. The longer the product development cycle takes, the more investment of time and resources is consumes. His methodology encourages the shortest possible feedback loop in a ‘Build Measure Learn’ process. In other words, turn your visionary idea into a product as fast as possible and then get it out in the marketplace to test your hypothesis. By doing this, you don’t waste money developing a product that nobody wants. He also describes non-traditional ways to measure the success of the idea in the marketplace.

An excellent idea in The Lean Startup is the ‘pivot or persevere’ decision. Since entrepreneurs are typically emotionally attached to their product ideas, there is a tendency to hang in there too long. This wastes time and money. The pivot or persevere process forces a non-emotional business like review of the hypothesis.

At The Business Therapist we just did a major ‘pivot’. Through testing of our Vision Self Study Program, it became crystal clear that presenting the knowledge utilizing video was much more appealing to small business owners than asking them to read 25 pages of great printed knowledge. This pivot saved us from wasting resources creating great pieces of paper that few people want to read.

In summary, the book is a comprehensive approach to business innovation for the current reality.  He makes a good case why some of the existing management models and assumptions are out of date.

I would only recommend you read this book if your business wants to be creative and innovative in a successful and efficient way. Having said that, it makes me wonder who doesn’t think that way?

Mutual Respect in the Workplace is Free

Ask a business owner what the most important thing to their employees is, and the majority of business owners will say, ‘money’.

Have the business owners ever actually asked the employees?

If you survey the employees of any business and ask them to rank what is important to them – one fact is consistently true – ‘Respect’ always ranks higher than ‘Money’. As a result of this fact, ‘Money’ has never ranked first in any of the surveys, and sometimes it ranks third or fourth.

Now if you are a business owner and thinking, ‘Why should I give respect when I don’t get any back?’  That is a good point, but it does confirm a lack of respect exists in the business.

I anticipate the next thought of the business owner might be, ‘But my employees are different’. I would be glad to survey them for you to find out the truth. For now, let’s explore the benefits of a respectful workplace.

The solution is Mutual Respect – The boss respects the employees and the employees respect the boss. Since I believe “the fish rots from the head down”, then respect improvement programs have to start with the leadership (the head of the fish). The desire for mutual respect should be genuine and consistent. It is best to shine a light right on the situation and attack disrespectful activity head on.

Consider the following communication:

“Hi everyone, as the boss of this business I would like to make sure I demonstrate and behave respectfully in all my interactions. I welcome your feedback on this topic. In return, I ask each of you to also act respectfully. Does that sound fair to everyone?”

There is nothing bad that could come from this action (unless you aren’t actually respectful!). The other huge gain is that this type of effort costs you nothing – it’s free.

However, the benefits to your employees are more valuable to them than more money! 

Focusing on Customer Retention is Profitable

If you would like to increase the number of customers your business has, the default thinking is to add more new customers. This is your customer acquisition rate.

If you start the year with 1,000 customers and your acquisition rate is 15%, you can’t assume your customer count will go up to 1,150. The reason is that you also will lose customers during the year. This is typically called the attrition rate.

The opposite of the attrition rate is your retention rate. If your attrition rate is 20%, then your retention rate is 80%.

Your customer base is therefore a function of the new customers you add but reduced by the existing customers you fail to retain (attrition).

In order to grow your customer base, you should focus on ‘retaining’ your existing customers as well as attracting new ones.

When you compare the cost of acquiring new customers to the cost of keeping your existing customers, the estimates range from $6 of $7 of cost to acquire a customer for $1 you could spend retaining your existing customers.

In order to properly measure your efforts to attract and/or retain customers, it is best to start by determining three things (typically for a fiscal year):

1)      The current number of customers you started the fiscal year with

2)      The number of new customers you obtained (your acquisition rate)

3)      The number of existing customers that left (your attrition rate)

Since we determined the most profitable way to increase the number of customers is to reduce the attrition rate, I would focus time and efforts at reducing attrition. If you’re not sure why the customers are leaving, it would be a good thing to research. An old fashioned telephone call from the business owner might be a good place to start.

I think there is a lot to discover from this effort, with very little additional cost invested. You already invested the money to attract the customer in the first place, so why not spend a little more and keep them around? 

Pricing Strategy – Be Different

For a small business, your pricing strategy should not be only about price. It should be about being different! Here’s why:

If your offering is the same as your competition then you allow ‘price’ be the deciding factor. If you are different than your competition, and your customers value that difference and they will pay for that value.

If you are getting beat up on price, it means your business isn’t being perceived as ‘different’.

There are two solutions:

1)      Be more different

2)      Drop your price

Do I need to ask you which option is better?

For greater clarity – Pricing strategy is simply about being different! The difference must be in the minds of your potential customers. How do you be perceived as different?

There are actually 3 types of differentiation:

1)      Actual differentiators – This is what is genuinely unique about your products and services or the way you deliver them. An example would be a real leather product compared to a vinyl product made to look like leather.

2)      Created differentiators – This is something you create to differentiate your business from the competition. An example would be the best guarantee in your industry.

3)      Perceived differentiators – Since perception is reality, it is possible to create a perceived difference just by being the first to position part of your offering as being unique. A great example is when Fed-ex stated they could get any parcel to its destination by 10:00 a.m. the next morning. Other courier companies were capable of doing this equally as well as Fed-ex, but by being the first to position this differentiation strategy to the marketplace, they were able to convince the market they are the shipping business of choice when your package really has to be there the next day.

The Fed-ex example brings me right back to my point. When you really need to get your package there the next day, are you thinking about the lowest courier price or are you thinking about who will get it there on time?

Pricing strategy is simply about being perceived by potential customers as being different.

Simple Advertising Advice for Businesses

Here are two examples of advertisements to demonstrate what I think are the two most important elements of an advertisement. First take a look at these advertisements:

‘Call Your Broker’

And ’Clarity Defined’

The most important part of any advertisement is the HEADLINE. These are the words intended to grab your attention. In the first advertisement it is hard to determine the headline and nothing really ‘grabs’ you.

In the second ad, DESTINATION CLARITY is the headline. How does it grab your attention?

Since the real purpose of an ad is to generate a response or an inquiry, and once the headline grabs you, you should then be directed with a CALL TO ACTION. In the first ad, the call to action is pretty clear ‘call your broker’.

The second ad is a little more puzzling. If DESTINATION CLARITY grabbed your attention, what do you do then? Not that you would have time to read the small print on a bill board but there is more information:

“Audit-Tax-Advisory – Clarity Defined”

All this talk about clarity, but unfortunately it isn’t clear to me!

Now that we see what not to do, here are the two things to review with your advertisements:

1)      The Headline – Does it describe the need or frustration of your potential customer, for example: ‘leaky basement?’ or ‘Is your business vision fuzzy?’ or ‘Gas and food – easy on and off the freeway’.

Just look at the ads around you and see which ones grab your attention.

2)      The call to action – If the headline works, why not provide your phone number or website? Shouldn’t it be easy to get in touch with your business?

I wonder how many people finally were grabbed by the headline ‘destination clarity’ and then didn’t know how to get it, as a phone number or website isn’t provided? At least with the first ad you were directed to call your broker – assuming you have one!

By the way, if anyone could give me some clarity or direction on the ‘destination clarity’ ad, I would really appreciate it! You can call me at 519-776-4869 or email me at paul@thebusinesstherapist.com.

Twitter

I am excited to report The Business Therapist has surpassed 500 Twitter followers and over 1,000 Tweets. How and why did this happen?

First – How to Tweet

Not every business owner has the personal attributes to be successful on Twitter. It may surprise you but I am one of those business owners. However, once I recognized this shortcoming, I worked closely with Liz Grady, our Director of Digital Communications to make it happen. In short, she actually does most of my Tweets. She also manages Facebook, and certain aspects of LinkedIn. Although I write all the content for my blogs myself (she has done a couple of guest posts), she edits, optimizes and posts the blogs. Since we have spent quality time working on planning, sharing philosophies and maintaining good communication, I am comfortable that she can provide valuable and respectful Tweets that are aligned with our business advisory thinking.

I wonder what percentage of Tweets are made this way? It is interesting that the 500^th Twitter follower was ljensencpa – A Chicago CPA firm that has 7,822 followers on Twitter! I would be impressed if Leif did all his Tweets himself!

Second – Why Tweet?

I am tempted to answer simply and philosophically – “Why not Tweet?”

To expand on that a little bit, I think it is important to build a complete network for the world to find you. If someone re-Tweets some useful info, it is only one click away from connecting their followers to your website. It is one of many potential connections but it is not mandatory to be part of your offering.

It is impossible to plant an acorn and expect to have an oak tree the next day. First you have to start by planting the acorn. Second you need to continue to give it nutrients and sunshine. By hitting 500 Twitter followers, I feel it is like a small oak sapling instead of bare ground.

In summary: “There are only two good times to plant a tree (or start Tweeting) – today and twenty five years ago!”

Don’t Avoid Firing an Employee

Don’t avoid the ‘bad apple’!

Warning – This post may suggest an action that could be personally uncomfortable but surprising profitable shortly after execution! If you would rather just avoid personnel challenges, then stop reading now.

As a business owner, dealing with employee issues can be difficult, but not dealing with them can be worse. The specific problem I would like to discuss is a hiring mistake. As a result you may have a current employee who is considered to be a ‘bad apple’. 

Situation 1 – You have a bad apple but you don’t know it. This is surprisingly common. This kind of bad apple does their work of ‘spoiling the bunch’ behind your back. In order to find them will require a little detective work. One place to inquire may be the most recent former employee. Current employees are reluctant to speak, but a former employee may talk. Officially it is called an ‘exit interview’, but it doesn’t have to be that formal. However you do your detective work, it’s probably better to have an independent person help you.

Situation 2 – You have a bad apple, you know it but you avoid dealing with it. Surprisingly, this is not the most common personnel problem. This problem may occur because you think you can’t run your business without the skills of the bad apple. It is also easier to just avoid the problem. You just adjust to it and try and work around it. When you adjust a little bit each day, you tend not to realize how big the change is.

The reality is that one bad employee may ‘spoil’ other employees, or possibly already has. It is not fair the rest of the staff to keep them around.

Here are a couple tips to dealing with bad employees that must go:

1)      Consult with employment law professionals before you act. The only time to get advice on a termination is before you do it. There is often a cost to making the termination. It important to compare this to the cost of keeping the employee and spoiling the rest, making everyone miserable and causing unnecessary stress. It may be hard to quantify, but a fun and stress free workplace is very valuable.

2)      Act quickly once you make up your mind. It is best to terminate someone first thing in the morning. If not, you think about it all day long and it stresses you. Just do it and spend the remainder of the day enjoying the rest of the employees – who may be thanking you for dealing with the problem.

After you have dealt with the bad apple, you might as well take a little time looking at your hiring practices. This review will help you develop techniques for not hiring bad apples in the future! There is one simple rule that seems to work well:

“Hire for attitude – Train for skill!”

Let me know how it goes