Anything the mind can conceive and believe, it can achieve. -Napoleon Hill

Individual Accountability in Business

By Michael Walsh

One of the core elements that allows businesses to run effectively is personal accountability.

The core element behind individual accountability is responsibility. Many people tend to think of this as a duty or obligation. I don’t. I think of responsibility as "the ability to respond" in a given circumstance or situation.

Jack Canfield, co-author of the Chicken Soup for the Soul series of books, as well as many other books and programs on self-esteem and personal effectiveness, refers to the formula:

E + R = O

E is the external event that occurs. R is your response to that event, and O is the outcome. Events occur in your business, and your life. You often don’t control what happens. What you always have control over is how you respond to what is occurring. It is these two components combined that generate the outcomes in your life.

Accountability vs. Entitlement

In today’s world, we have so much more than previous generations ever enjoyed. Advancements in technology, in science, transportation, and in a whole host of areas have made your world a much richer place. Television and the internet have allowed us to see what is occurring in our neighborhood, town, country and in the greater world. These advancements have opened our eyes to what is possible.

Technologies have also conditioned us to expect a quick fix. It seems that people encounter situations and difficulties, go through the trauma of their upsets, and resolve everything that ails them in their lives, all in 22 minutes between commercials.

News and entertainment conditioning has evolved into an entitlement mentality among some people. Some expect to be granted opportunities without working for them. This entitlement mentality gets in the way of business effectiveness.

Dan Sullivan, creator of The Strategic Coach, a program I highly recommend, talks about two decisions that anyone can make to become an entrepreneur. They are:

1. Rely on your own skills and abilities for your economic viability 2. Don’t expect any opportunity unless and until you first provide value to others

Notice that he doesn’t say that you won’t gain any opportunities; he just says not to expect any. These are based in the notion of individual accountability, not entitlement.

Holding People Accountable

Many business owners fall into the misguided notion that you can hold people accountable.  This is usually some erroneous attempt to control others, to get them to do what you want them to. The truth is that you cannot hold another person accountable. They are already accountable. There are consequences for everything you do in life; everyone in the world is subject to the consequences of their actions.

In some circumstances, you can be shielded from the accountability of your actions. Others might cover for you, or handle your duties for you, but sooner or later even that will catch up with you.
There is more truth than myth to the saying, "What goes around, comes around."

Instead of trying to control other people by "holding them accountable" (another expression for dressing them down when they make mistakes), what if you held people AS accountable. You do this by honoring the fact that they already are accountable – they will have consequences from whatever they do – and then work in partnership with them to support them in gaining the outcomes they seek.

For example, if I have an employee who is chronically late, I merely point out the consequences of this habit, not only to the team, but also to the employment agreement we made (the natural
consequences) and then look with that person to see if there are some different structures that might serve the situation better.

Risk for Reward

Entrepreneurship is about assuming a risk for a reward, by entering into an arrangement of a value exchange with one or more other people. This cannot occur unless you make sure you do what you say, and take accountability for your end of the exchange. Whether in business or in any aspect of life, accountability is core to generating results.

By standing accountable for the outcomes you seek, you will cause things to happen consistent with your intentions. That, my fellow business people, is what makes the world go round.

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A Stress Reduction Tool

By Michael Walsh

As an entrepreneur, do you ever go through high stress levels?  Ok, not you, no way, never, uh uh, life is grand, no problems, no worries, no concerns. 

For the rest of us who do encounter stress, then you may appreciate a tool that is designed to reduce your stress levels and allow you to gain more control of your faculties, generating more productive results.  All this, despite whatever stresses you may face.

DISCLAIMER:  I am not a medical doctor (that’s my Dad’s job, and I don’t want it).  I am not a Psychologist or Psychiatrist.  I am merely an entrepreneur who notices stuff.  When I notice stuff, I often research it.  Then I make my own impressions and add my own interpretations into the mix.  If you encounter stress at other than the "normal" levels (whatever that is) you might want to discuss it with someone more qualified than me.

What you are about to read is not some "universal truth" (though I will probably write it as if it is).  Actually, that is rather unfortunate.  Think what I could charge for this if it WERE some "universal truth".  Oh well.  On with our story.

Stress

So what happens when a stress suddenly enters our system?  A number of things.  We sometimes get a surge of adrenaline and nor-adrenaline, often known as "fight or flight" syndrome.  This is where the body releases chemicals (namely adrenaline and nor-adrenaline) into your system to slow down the blood flow to less immediate areas of the body in order to divert blood and energy to large muscle groups.  This allows us to either fight or flee as the case may be, with the additional energy available to support us.

This is quite a useful survival mechanism if you think about it.  After all, it has only been about 35,000 years ago when we "dropped from the trees" in our evolutionary quest (for those who believe in evolution).  The more energy you could divert to your legs when it was time to run, the better your chances of eluding those that might add you to their menu on the food chain.

Other responses to stress include fear, anger, anxiety and aboulia.  For those of you who do not know, aboulia is a condition which occurs when you have chronic indecision by making decisions about everything else than that over which you need to make a decision.  In other words, doing other stuff to avoid something.  Ever notice how clean the garage, the basement, and maybe even your desk get when it’s time to do your taxes? Everything gets done except the taxes.  That’s aboulia.

ORJI:  Observation, Reaction, Judgment, Intervention

When stress hits us, we tend to react.  Then we immediately jump into an intervention.  99.997% of all non-life threatened, reaction-based interventions are inappropriate and dysfunctional.  The other 0.003% are coincidence. (Did you know that 44% of all statistics are made up?)

Have you ever seen someone get cut off in traffic, and then start passing back unpleasant hand gestures?  For a while in Los Angeles, they were just as likely to shoot you.  Now that is clearly a case of reaction-based intervention!

What if you could stay in "observation" long enough to work past your reactions?  That way, instead of intervening in an inappropriate manner, you could make further judgments that lead to more productive outcomes.

Staying in Observation (or staying in "O" as we like to call it) is easier to say than to do.  Yet by slowing down, and not jumping in, the results are often quite remarkable.  When there is anxiety in a sales situation, often people over-talk in a nervous reaction to an objection they are surprised by.  What might happen if you were to stay in "O" and get some additional information? Stopping yourself from over-talking as a reactionary response to an issue is almost always the preferred route to take.  How do you get into (and stay into) "O"?

Safety Tip:  Getting into, and Staying in "O"

One of the best ways we have found to get into "observation" mode is to ask yourself a question.  Now there are effective questions and there are ineffective questions.  Your sub-conscious brain does not know the difference.  If you asked yourself, "Why am I so stupid?", your brain would actually get to work on this issue.  "Maybe you fell down the stairs as a child" it might speculate.

WITPO and WITCO

However, if you ask yourself a productive question, such as "What is the purpose of . . ." (or WITPO for short) or "What is the Cause / Cost / Consequence of . . ." (WITCO), then your brain would get to work in a far more productive manner.

By asking yourself a question (preferably a "What" or a "How" type question rather than a "Why" type question), you slow down long enough to move past the initial reaction, thereby increasing the likelihood of a productive response.

As an exercise to practice this tool, notice over the course of the next week, other people who react to stressful situations.  It is generally easier to see it in others first.  Notice who moves into a reaction-based intervention, and who stays in "O".

The more awareness you can generate with this tool, the more effective you will be as an entrepreneur, and the more enjoyment you will gain in life.
 

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Don’t Spill Your Candy in the Hallway!

By Michael Walsh

Have you ever been in a gymnasium full of young kids who are awaiting an appearance by Santa Claus at Christmas time?  I have, and it is quite an experience!  The energy in the room is just electric.  There is a buzz in the air.  You can just feel the anticipation . . . . . . . then, someone hears some bells from outside the door.  They seem to be getting louder, and a very deep and jolly voice starts chanting “Ho Ho Ho!”

Like many of us, I have been witness to a number of these events over the years.  There were two specific incidents, however, that really stuck out in my mind.  One was tragic and the other, masterful.

Oops!

In the unfortunate circumstance, the Santa had arrived with much fanfare only to trip outside the gym door.  His bag of candy canes filled the floor in the hallway.  A few of the kids at seeing this, quickly scrambled out the door to grab the candy.  Soon, all of the children had scurried out and had filled their fists with the good stuff.

After that, the Santa had very little appeal to the children.  They had gotten what they discovered he was to provide that Saturday morning, so their interest in Jolly old St. Nick evaporated just like that.

Mastery in Action

At another such event, I was fortunate enough to witness a clearly experienced fellow.  Not only did he manage to get through the doors of the gym unscathed, but he really put on a show for the kids.  He would look into his bag, and then back at a little boy.  Then back into his bag his eyes would gaze, and then once again to the anxious child.  Then slowly, he would reach his hand into his bundle, and after shuffling things around in there for what appeared to be an excruciating length of time, he would pull out a piece of . . . . .candy!  His eyes would open wide with excitement as he handed the treat to the little tot, whose own excitement was just about to explode.

Then on to the next child he would go, repeating the whole escapade to the immense delight of all.  I have to say, I was never so impressed at how well a Santa could generate so much excitement, and genuine happiness and satisfaction from a whole room full of children with little pieces of candy!

How does this apply to sales and customer acquisition?

I have seen over and over again, situations where people will “spill their candy in the hallway”.  They go on and on about their stuff and deliver all the good stuff prematurely, robbing their customers the opportunity to build a relationship sufficient to do business.  Too much too soon is not necessarily a good thing. 

Our next entry will include a stress reduction tool that may be very useful to you at this time of year.  Happy holidays!
 

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Elements of Effective Negotiation (Part Three)

By Michael Walsh

What’s missing too often in negotiation?

Preparation. 
There are three primary reasons why negotiators are
unprepared:

1. They assume that "just talking" is low risk.
2. They think that preparation takes too much time.
3. People don’t know how to prepare well.

There is a systematic approach available to preparing for a negotiation.  By following the seven steps listed below, you will find that you can prepare for a negotiation within a 20 minute time
period:

1. Focus on interests (rather than just positions)

2. Options – spend time clarifying many in advance

3. Alternatives – be clear on your Plan B and your worst case scenario

4. Legitimacy – use external standards to keep it fair.  I was once in a share purchase negotiation where the vendor pulled out part way through because the clause stating the interest on the amount outstanding was listed at 8%.  Instead we changed it to prime + 2% and the vendor was happy again.  At the time, prime was 6%, so it made no difference to the actual deal, except to protect the vendor
is rates rose.   Using an outside source legitimized that portion
of the arrangement.

5. Communication – listening, clarity in speaking.  Be careful to say only what you mean.  We had one client once who was buying the rights to a phone number from a third party.  He had decided that we would pay up to $20,000 for this number, but wanted to pay as little as possible.  The third party wanted access to our client to do more business in the future.  We were negotiating with the third party at the level of between $8,000 and $10,000 with additional provisions to provide the third party with access to our client (which was no problem for the client).  Everything was going fine, until the client let it drop that there was no way he could go higher than $20,000 for the rights under question.  His little "faux pas" in the discussion cost him dearly.  The third party immediately got inflexible, requiring $20,000 (instead of the $10,000 she was previously seeking) in addition to access.  The client, realizing he was beaten, consummated the deal and learned the value of watching what is communicated at the negotiation table.

6. Relationship – will the outcome damage or enhance the relationship?  Good outcomes enhance relationships.  By looking at this item and asking yourself the question, "Will this outcome damage or enhance the relationship?" sometimes that is enough to check, and subsequently alter strategies, and the results as well.

7. Commitment – think through in advance what specific promises you are willing to make and what you require of the other party.  Too often we see situations where after a long negotiation, one party says, "If you just take out this one clause (or add this one
clause) we have a deal."  The only problem is that the clause in question may change the entire workability of the deal.  This is where good deals turn bad, or where deals are lost unnecessarily.

Unprepared people promise too much without thinking, or hold back and lose the deal.

Sudden Preparation Template

Here is a list of 8 questions you can ask yourself when preparing for a negotiation.  These questions form a template to generate quick preparation for any negotiation.

1. What are my intended outcomes (interests)?
2. What are the other person’s (possible) interests?
3. What are some of the options of agreement?
4. What is my Plan B?
5. What is my worst case scenario?
6. What are some possible external standards?
7. What is/are my reserve price / terms / limits?
8. What is my game plan?

By following these steps, you will be better prepared for your negotiations while you seek to gain and keep more customers at a profit, as you grow your business consistent with your goals and commitments in life.

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Elements of Effective Negotiation (Part Two)

By Michael Walsh

The most effective negotiation strategies occur before you are ever at the negotiating table.  They are as follows:

A. Know your Plan B and you Worst Case Scenario, in the event that the negotiations don’t generate the results you seek.

B. Set your reserve price / terms / floor / ceiling / limit

C. Love 3 Houses

Know your Plan B and your Worst Case Scenario

One area that many people avoid is the reality check on what to do if the negotiation doesn’t turn out the way they want.  We all know intellectually that sometimes things work out and sometimes they don’t.  Yet emotionally, we are surprised and upset when things don’t go the way we want.  The way to protect our confidence in these situations is to use the intellect instead of the emotions.

What is my "Plan B", or my best alternative, if this negotiation doesn’t work out?  What is my worst case scenario?  By answering these two questions, we are better armed to deal with the uncertainties of a negotiation, and we will be clearer on how to conduct the interactions when the time comes.

Set your Reserve Price / Terms / Floor / Ceiling / Limit

Once you know what your Plan B is, and what is your worst case scenario, then you can set your limits.  The limits you set are the ones you will not go past.  They represent your "bottom line"
requirements for the negotiation to progress to a conclusion that you deem acceptable.

By setting your limits, this does not compel you to share those with the other party(ies) involved in the negotiation.  It is a level of planning that you do for your own benefit.  If you are unclear about the financial and non-financial consequences of your arrangements, then you may end up with arrangements that you later decide are unacceptable.  By formally setting your boundaries for the terms and conditions of any deal you strike, then you are forcing yourself to qualify for yourself, in advance, when to walk away. 

Sometimes the best deals are the losses we avoid by passing up the wrong arrangements.  By clarifying your limits, you will be ensuring that you do not get stuck with unprofitable deals.

Love 3 Houses

Norm and Marjorie were in the market for a home in a particular neighborhood.  They were very excited by the possibilities that one particular house offered, and decided to explore it in a Sunday afternoon Open House, being held by the realtor involved.

While Norm was having a brief chat with the realtor in the living room, Marjorie was checking out the rest of the place.  Norm was already working on the price, mentioning that the living room was a little dark, and that this house was on a particularly busy street, when a loud sound came from the kitchen.  Marjorie, obviously thrilled with what she was seeing, shouted to Norm, "Oh look at this view!  I love this kitchen!  Norm we have to have this home!"

The realtor quietly smiled, knowing that the price negotiation just ended.  The price would become firm, and he knew they would still buy.

The Love 3 Houses tool refers to the strategy of actively developing options and alternatives to your initial, most preferred arrangement.  By developing a number of options, you will not generate such a strong emotional link to the first option as to get in your own way during a negotiation.  This is somewhat different from the Plan B planning, as the purpose of this tool is to support you in separating yourself emotionally from any particular outcome long enough to avoid letting emotions get the better of you during a negotiation.  Access to your intellect will serve you well, but only if it is not clouded by irrational thoughts.

Too often I have seen people pay too much for things or enter into bad arrangements because they could not park their emotions (or sometimes their ego) long enough to do what made the most sense for them.  This is one of the sources of "Buyer’s Remorse", that feeling just after a purchase or transaction where you feel, "Oh my gosh! What have I done?" 

If you "Love 3 Houses", you will have a number of options to you, and you will enjoy the negotiation process more, and be more settled with the outcome, no matter how it turns out.

Stay tuned for Part Three of this series!

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Elements of Effective Negotiation, Part One

By Michael Walsh

Almost everywhere you go in business you hear about the great deals that were negotiated.  It seems that negotiation is a larger and larger part of our business reality.  Yet, we seem to differ widely on just what it entails.

What is negotiation?  Is there always a winner and a loser?  What about this "win-win" that people talk about?  How do you do that, anyway?

Definition

Like so many words, negotiation is used in different ways for varying situations.  The formal dictionary definition of negotiation is: to discuss with the view of reaching an agreement; to settle (a transaction, treaty, etc.). 

In order for negotiation to be present, there must be a real or perceived disagreement either present or possible.

It has been said that every human interaction has the potential to turn into a conflict.  If this is true, then a working definition of negotiation might be: managed conflict.  The best time to manage conflict is before it arises, so that conflict never shows up.

There are two main types of negotiation.  These are:

1. Dealing with problems, issues, and concerns.  This may include conflicts with co-workers, customer concerns, or difficulties with suppliers, to name a few.

2. Tapping opportunities.  Examples might be seeking a new promotion or pay increase, up-selling a customer or securing a new account.

How do you keep negotiations effective?  There are three main elements to consider:

1. People versus Issues

2. Positions versus Interests

3. Protect the other party’s self-regard

People versus Issues

One of the traps we fall into in human interactions is to collapse the distinction between people and issues.  While this is a natural inclination many of us have when emotionally stressed, it camouflages what the real issue is, and increases the chances for potential conflict to turn real.

"Joe is such a jerk!  He never shows up on time.  We end up waiting around for him to waltz in whenever he pleases.  What an insensitive jerk!"

What is the issue here?  Joe may be a jerk (or maybe not . . . we haven’t heard Joe’s side yet), but the issue is that he is late, and that people have to wait.  By setting aside attributions and judgments about the people and sticking to issues, it is far easier to implement effective negotiations to resolve conflicts and to move situations forward on a productive footing.

Positions versus Interests

Regardless of your stated position in a negotiation, or the stated position of the other party, where agreements are reached is at the level of your (and their) interests, not the positions.  What is it that they really want out of this negotiation? 

Statistics indicate that 23% of the buying public makes purchase decisions based upon price alone.  The other 77% use some other measure of value.  However, absent some other measuring stick (for value), everyone will start with price as the differentiating factor.  A shopper may be asking for a reduced price, but through active listening you may detect that she is really interested in high quality, and to feel important as a customer of yours.  One way to feel important is to gain a preferential price.  However, there are many others ways to accomplish this "interest" which do not reduce your profits. 

By discovering what the interests of the other party are, and overlaying those with your interests, you are much more likely to achieve an outcome that will serve both sides better.

Protect the other party’s self-regard

Maintaining safety in an interaction is critical to keeping it productive.  By actively protecting the other party’s self-regard, you will increase your ability to keep people and issues separated, and focus on interests, not just positions.

Stay tuned for part two of this three-part series on negotiation.

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Enhance Your Business through Customer Selection

By Michael Walsh

Customer selection is one of those areas that many entrepreneurs dream about ("Wouldn’t it be nice if we could pick the best customers…"). Then they go on and take whatever customers they can get.

Customer selection is an area that has a large impact on how a business grows.  If you want a business that serves your goals and commitments in life, then you may want to handle your customer selection issues right from the start.

Background

The biggest threat to entrepreneurs is time. There’s too much to do, and not enough time to get it all done. Customer selection plays a very large role in how effectively your time is spent as you go about the business of working on and growing your business.

Poor customer selection doesn’t just waste your time because you’re dealing with difficult customers. One of the most powerful methods of gaining new customers is through referrals. Given that you always need a relationship sufficient to do commerce, referrals help to speed up the process of relationship development. When you are introduced to a new potential customer from an existing one, you borrow the relationship that your existing customer shares with this new person until you can develop your own relationship with that new person. You start with an advantage!

There are over 6 billion people in the world. There are so many thousands or million people in your market area. You don’t need all of them to be your customers. You don’t even need most of them.
You only need a few. How many customers (by our expanded
definition) do you need in the next twelve months to be happy with your progress? Write it down…

So why not pick who you want to deal with (the people who give you energy and help you grow your business) and pass on the people who drain your energy without adding to the business?

Importance

What’s important about customer selection? People of a type or group will refer similar people.  People will refer other people just like them, more often than not. If you are dealing with a person who is well-funded, can afford the most effective solution you can propose, and appreciates the work you do, he/she will probably refer other people just like him/her.

Similarly, if you are dealing with a "P.I.T.A." (a highly technical term, meaning "pain in the assets"), this person will likely refer people just like him/her. If you build your business through word of mouth, not only do you waste time dealing with the wrong customers, but you waste even more time dealing with all the similar referrals you get.

Have you ever been in a situation where someone approaches you and tries to cajole you into giving such a big discount that you make little or no money on the transaction? The attempt usually includes some element like this: "I know a lot of people. If you give me this deal, I will recommend you to everyone I know. And honest, I won’t tell anybody about the pricing you gave me. It will be our little secret (nudge nudge wink wink). Just consider it as a marketing expense for all the business I will be sending you."

Those of you who have gone for this ruse in the past have probably also experienced the other side of this situation. That is, the referred party comes in, quoting the discounted price and demands to be given your product for the same price.

Is this surprising? Not at all. Who does this person know better and trust better, you or their friend?

By spending time identifying who you want to do business with and who you don’t, you will save a great deal of time, which in turn can be redirected in serving your best customers better.

How To

The first step in customer selection is to decide who your desired customer is. List all the criteria you have for the customers that you enjoy dealing with, and who help you grow your business profitably.  Then list the factors present when you have a customer you really don’t want.

You cannot select the best customers unless you know who they are.

After these steps, you will then notice that there are a number of customers who fall into the "grey zone". They may be difficult, but they give you a great deal of money, so it’s hard to say no to them.

Or it is a customer who might only do small volumes, but you still like serving them. That’s ok. You get to decide who you want to deal with. In each business, there needs to be judgment calls made as to what the tolerances will be. Where do you draw the line? Only you can tell, but as your business grows, don’t be afraid of making the parameters tighter and tighter, leaving you more time to serve your best customers better.

One method of enhancing your customer selection methods is to identify the roadblocks to sticking to the customers you want. What stops you from saying no to doing business with a "P.I.T.A."? List the roadblocks and do not stop until you have them all.

Then for each roadblock, identify three strategies that you might use to overcome this obstacle. You will be amazed at how creative you can get once you clearly define an obstacle for your mind to work on.

The single biggest screening method we use at Kaizen Consulting is called the "Dinner Table Test".  If we have any ethical or moral issues with someone such that we would not invite them to our dinner table with family present, then we don’t invite them to the boardroom table either.

In our business, we spend so much time with our clients, assisting them to grow their businesses, that it is important that we feel comfortable with them, and that they feel comfortable with us. We never want a situation where we don’t want to take the call of a client. That doesn’t serve us, and it doesn’t serve the client.

These parameters may be quite different for you in your business, especially if you deal with a product rather than a service. Whatever the criteria are, by getting clear on your desired customers and saying no to those who waste your time, you will free up you time to make your business stronger.

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The Top Seven Business Growth Inhibitors

By Michael Walsh

We believe that productivity in business is a function of design and structure. Intent and enthusiasm are valuable, but without an adequate structure, a business will be limited in its growth.

There are 4 main types of people in business. Let’s look at this from a systems perspective.

                            E                   B
                          (In)               (Has)

                            S                   I
                          (Is)               (Funds) *

* Source:  The Cash Flow Quadrant by Robert Kiyosaki.

E = Employee: This person works IN the system. This applies to most of the employees in companies.

S = Self-employed Person: This person IS the system. Business owners and professional practitioners with revenues anywhere from start-up to between $1 million and $2 million in sales generally fall into this category. If the entrepreneur/professional were to leave for more than a couple of weeks, the business would start to run into problems.

B = Business Owner: This person HAS a system. The system is capable of operating without the daily control of the business owner.
Businesses that grow from $1 – $2 million anywhere up to $10 – $12 million evolve into companies that fall into this category.

If an owner can leave the business for 3 – 6 months or more and…

- First, have a business to return to;
- Second, have it be just as, if not more profitable than when they left it;

…then that person HAS a system, and a "B" type business.

I = Investor: This person FUNDS the system. Investors work with their businesses to increase the asset value, and to serve the owners’ personal goals and commitments in life.

7 Reasons People Get Stuck in "S" and Never Get To "B"

Most small business owners never get past the equivalent of a self-employed practice with help. Businesses with up to 10 employees are usually oriented around the skills of their owners.
The other people assist and the business owner provides the core talent to deliver client or customer results.

Where there are two or three owners, sometimes this may grow to 20 or 30 people, but the same point holds true. You usually find that you have one owner for up to 10 employees, or "helpers". This still falls into the "S" category, identified by Kiyosaki in his book The Cash Flow Quadrant.

Why do small business owners get stuck into "S" type businesses? We have identified 7 core factors that account for this unfortunate
truth:

1. Small business owners are good at serving their clients and customers, not at growing businesses. They have their success due to their diligence at plying their skill, whether it be in dentistry, landscape architecture, or hanging door frames. The skills at generating customer satisfaction are where these entrepreneurs thrive, not in growing a business that offers that service.

2. These people have never grown a "B" type business before. I rarely meet anyone who currently has a $1 million, a $2 million, or even a $5 million business who has experienced owning and operating a $10 million business in the past. This lack of experience in running a larger business shows. People just aren’t sure how to grow. This keeps these owners stuck in their smaller businesses, unable to grow them to the size they want.

3. Many small business owners are under the misguided notion that hard work and plenty of it will get them their goals. This is simply not true. Productivity is a function of design and structure, not your good intent, and not your hard work. Hard work just won’t get it done. Like it or not, that is a fact. Without the appropriate structure, you can work all you want, but you won’t achieve the results you desire. Most small business owners fail to recognize that fact.

4. Most small business owners get caught in a "success-trap" within an "S" type business. I have seen it often, where people are so good at what they do that they attract many loyal repeat and referral customers to them, all with individual needs that must be addressed. This increased demand eats up the owner’s time, leaving little if any time to design and grow the new, larger business.
Yes, success can be a trap that thwarts you from your goals.

5. Most business owners don’t know how to train others or transfer what they do to other staff. You may have gained a loyal following from your intuitive skills, but that is very different from a distinct set of skills called training and transferring your knowledge to teach others your profession. Without this additional competency, it is very difficult to scale at the level needed to become a "B" type business.

6. Owners of "S" type businesses don’t know the perspective that is required to develop and operate a "B" type business. People who own and run "B" type businesses think of things from a much different perspective. While an "S" person, when faced with a challenge, will think, "How can I get that done for my client", a "B" type person will look at the same issue and say, "How can my business be structured (without me) to tap this opportunity for all future clients?" Subtle, but very different thought processes leading to vastly different results.

7. There hasn’t been a place to go to learn how to take a business from "S" to "B". Most available training either require small business owners to adopt large business methodologies (which do not usually work in smaller businesses). They are expected to stop their own companies and try to build their own business like a franchise of hundreds of locations, while still trying to make ends meet. None of these strategies has proven to consistently work to move the owner of an "S" type business into the "B" realm.

Our goal at Kaizen Consulting is to do just that: support people who own "S" type businesses in growing them into strong and profitable "B" type businesses. We have found that if an owner is effective at delivering a strong customer experience of value at their current size, we can help them meet their goals for growth.

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Filed under Business Advice, Grow Your Business by Michael Walsh.

Increasing Employee Effectiveness

By Michael Walsh

Over the last 25 years, the Gallup organization conducted interviews with business owners, sales managers, and division managers in a number of different companies.  They interviewed over 1 million employees and over 80,000 managers.  The biggest single survey ever done.

The 12 Questions

The people at Gallup made a discovery that measuring the strengths of a workplace can be simplified to 12 questions. These questions don’t capture everything that you may want to know about a place, but they do capture the most important information. They also measure the core elements needed to attract, to focus and to keep the most talented employees. So when you are looking at building or growing an effective team, you don’t want to overlook these questions.

Here they are:
 

  1. Do I know what’s expected of me?
  2. Do I have the materials and equipment I need to do my work right?
  3. At work, do I have the opportunity to do what I do best every day?
  4. In the last 7 days, have I received recognition or praise for doing good work?
  5. Does my supervisor or someone at work seem to care about me as a person?
  6. Is there someone at work who encourages my development?
  7. At work do my opinions seem to count?
  8. Does the mission or purpose of my company make me feel my job is important?
  9. Are my coworkers committed to doing quality work?
  10. Do I have a best friend at work?
  11. In the last 6 months, has someone at work talked to me about my progress?
  12. This last year have I had the opportunity at work to learn and grow?

They found that many of the questions contain some version of an extreme. Notice it doesn’t say do I have a friend at work, it says best friend. They looked at the wording of the question and distinguished the best from the rest. Question three says every day. They also used an answer scale of 1-5.  Five being strongly agree and one being strongly disagree, with 3 as neutral.

What they found is that the places that are hitting 5 on these questions are stellar environments.  The correlation was very, very high.

Marcus Buckingham and Curt Coffman published the results in 1999 in the book, First Break All the Rules.  What they’re saying is that there are no rules for effective management. Different people manage differently, but the long and the short of it is, "What are you doing to foster your employees?"

This falls right into line with treating your people and salespeople like customers. Customers need certain elements of support concerning the goods or services that they purchase from you. Your people also need this support.

Some of these questions are simple. Do I know what’s expected of me at work? Do I have the materials, etc.? Do I have the opportunity to do my best each day? Straightforward questions but Gallup did not often find situations where people were answering fives on a consistent basis. The places that did had results that kicked butt over the competition.

Nowhere on this list does it say anything about money. Money is a satisfier, it’s not a motivator.

There are certain things that are motivators and others that are satisfiers. If you’re 20% below the market, you’re going to have disgruntled people and problems. You also don’t have to be the highest paid to keep great employees.
One thing is that people join companies and leave managers.

There is not just one corporate culture in a company; there are as many cultures as there are managers. You might think that since you’re a small company and you only have 11 people, you have one culture. If you have two or three managers, you have two or three corporate cultures.

The manager’s actions make a huge impact on the culture within an organization. Now, putting the wrong people in the wrong role generates frustration as well. So it’s not just having this pleasant, cushy environment. Have you got the people in the right roles and are you looking at how to support them and run interference for them?

You want to have the above questions filled out and handed in after a meeting. Take the time to see where you stand on these things.
You don’t want to be surprised by this.

A danger is, if I was an employee and my employer handed me those questions and asked me to fill it in, I don’t think I would answer it honestly. If someone from outside came in as an evaluator, I would be much more honest. You might want to bring in an outside evaluator to provide some confidentiality.

This is about supporting the person, demonstrating care, and allowing them to do their best. It’s not only about tracking numbers, etc. It’s about making sure that they feel supported and praised. It’s making sure that those things are done and that the person feels that that is how they are going to access the best performance.

It’s interesting because we focus on measuring and managing.
Clarity on your numbers and on what is happening, both at the level of activities and results, certainly makes a huge difference.

When you set goals together on your outcomes and you support your staff and sales staff on their processes to meet their goals, it does make a big difference for the financial productivity of the company.

Business valuations have more to do with the human capital component then ever before. The number is up to 35% of the valuation of a business, especially for larger businesses. It is based on factors other than just the things that show up on a financial statement. As a result, people are getting serious about the impact of human capital on the value of a business.
 
You might think that the question which asks, "Do I have a best friend at work?" is controlled by the individual. On the surface it might look like that. Yet the manager can generate environments that are more conducive to that.

Will they become best friends? Hard to say. I agree that in many ways, it’s still left to the individuals. You can keep an eye on the interpersonal dynamics between and amongst various people. If somebody has a best friend at work, they are less likely to quit.
In small organizations it may be tougher. However as an organization grows, people bond with each other.

For example, if you’re frustrated, you’ll speak to the person that you know and trust in the business. They’ll temper what you come up with. Where an outsider might say, "Yea, yea, you should just quit."  Someone inside the company can settle you down, interact and can relate to where you are. That has an affect.

No organization is perfect all the time. There are ways that you can get people together to interact with each other. Get them to know each other better so that you foster a friendly environment.
In a small company it’s harder, but by keeping an eye on those things you can encourage it.
 
If you have somebody who is actively disengaged, walk through this list about that person. You might find that the answers are woefully inadequate.  This gives you access to some of the things specifically that you could do, that might make a difference.

Filed under Business Development by Michael Walsh.

Developing Business Relationships

By Michael Walsh

Don’t Spill Your Candy in the Hallway!

Have you ever been in a gymnasium full of young kids who are waiting on the appearance of Santa Claus?  It’s quite an experience! The energy in the room is just electric. You can just feel the anticipation.  Then, someone hears some bells from outside the door. They seem to be getting louder, and then a very deep and jolly voice starts chanting "Ho Ho Ho!"

Like many, I have been witness to a number of these events over the years.  There were two specific incidents however, that really stick out in my mind.  One was tragic and the other, masterful.

Oops!

Santa arrived with much fanfare – only to trip outside the gym door! His bag of candy canes filled the floor in the hallway. A few kids seeing this, quickly scrambled out the door to grab the candy.
Immediately all of the children had scurried out and had filled their fists with the good stuff.

After that, Santa had very little appeal to the children. They had gotten what they wanted him to provide, so their interest in jolly old St. Nick evaporated — just like that!

Mastery in Action

At another event, I was fortunate enough to witness an experienced Santa. Not only did he manage to get through the doors of the gym unscathed, but he really put on a show for the kids.

He would look into his bag, and then back at a little boy. Then back into his bag his eyes would gaze, and then once again to the anxious child. Then, slowly, he would reach his hand into his bundle, and after shuffling things around in there for what appeared to be an excruciating length of time, he would pull out a piece of… candy! His eyes would open wide with excitement as he handed the treat to the little tot, whose own excitement was just about to explode.

Then on to the next child he would go, repeating the whole escapade to the immense delight of all. I have to say, I was so impressed at how well a Santa could generate so much excitement, and genuine happiness and satisfaction from a whole room full of children with little pieces of candy.

How does this apply to sales and customer acquisition?

I have seen over and over again, situations where people will "spill their candy in the hallway". They go on and on about their stuff and spill all the good stuff prematurely, robbing their customers of the opportunity to build a relationship sufficient to do business.

Too much too soon is not a good thing. Too much in one direction is not a good thing. There has to be an interaction in order to build connection. As Voltaire said, “The secret of being a bore is to tell everything."

As a business professional ask yourself: "What business am I in?"
If your business has anything to do with people, you are at least partly in the business of building relationships.

Some people think that they are in the business of selling. Really, they are in the business of building relationships, because that’s the basis of how you sell things. Managers are also in the business of building relationships, because that’s how you turn talent into performance.

How do you build a relationship? The best way is to know it’s all about them. You move your curious lever to maximum and find out what’s important to people. Then how can you setup success for them?

To build trust, share ideas and connections that help people. When you meet somebody, give them something educational that they can use, whether they buy or not. Just as important is to reach out and connect with people. Opportunities to make new contacts and connections are all around you. Make the effort and reap the rewards!

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Filed under Business Development by Michael Walsh.