Posts Tagged ‘Business Growth’

How To Hold Your Team Accountable

Thursday, February 16th, 2012

Are you comfortable holding your team accountable? What does that actually mean?

Do you need to micromanage and babysit and punish every little mistake? Of course not.

Holding your team accountable means that you need to ensure they are aligned with your company’s goals and objectives. If you strategy is to provide high quality (and charge higher prices for that, which you deserve), then you need to ensure that your people, processes and performance are focused on quality. If your focus is on quality, then you might need to sacrifice speed.

After all, a drive-thru restaurant hamburger is not going to be as good as a prime rib hamburger at the fancy steak house, but it will be fast.

Holding people accountable is easy and transparent if you do these things:

  1. Have the team participate in setting their operational goals and benchmarks. For example, a production facility may set targets of units per shift.
  2. Measure the goal every day. It’s amazing how powerful this is to drive the behaviour that you want.
  3. Proactively ask the team what obstacles they encounter or foresee, and what ideas they have to overcome them.
  4. Help your team to be more successful. This is the key. Accountability doesn’t mean whacking them when they miss their goal. Accountability, and it’s a two way street, means that you are willing to be held accountable to helping them improve performance and be more successful.
  5. Celebrate success. Every incremental gain can increase confidence and momentum. This also reinforces that you are focused on rewarding positive behaviors.
  6. As a manager, beware of trouble-shooting for your employees. Part of the accountability is to develop their independence. When they present a problem or dilemma, ask them for their suggestions. If they don’t have any, give them homework and tell them to come back more prepared.
  7. It’s your job to allocate resources. Make the team come up with the ideas. Remember, with every pair of hands, you get a free brain.

Holding people accountable is as simple as keeping score of the important things in your business. The fewer things that you track, the easier and more powerful the process will be.

Copyright 2012. Phil Symchych. All rights reserved.

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My First Job, or “Stock boys are cool”

Tuesday, February 14th, 2012

As a teenager, I thought I was working for gas money and spending money. Many years later, I learned that every job that I’ve had has contributed to my understanding of people, of business and how different people lead and manage others.

I’ve worked in a variety of organizations, from a small retail store to a national bank and an international accounting firm. The cultures were vastly different and so was their effectiveness at motivating and engaging their employees.

My first job, when I was 14 years old, was working in a small department store called The Met, short for Metropolitan. We sold all types of dry goods including clothing, diapers, kitchen goods, cheap hardware, batteries, and my favourite, chocolate bars. We had to keep those under lock and key in the candy room! For some reason, the manager didn’t trust anyone with the key to the candy room. A valuable lesson learned.

My first boss, Peggy, was a great manager and she taught me a lot about treating everyone with respect, to ask their opinions and to let them think.

Now, as the stock boy, I didn’t have to think too much. But Peggy never told me how to do anything unless I asked. She told me what to do, but never how to do it. She was confident that I could figure it out. And, her confidence in me increased my own confidence, although most teenage boys seem to exceed in confidence, for some reason.

I could sweep a 6,000 square foot store in nine minutes flat. The best parts were the handyman jobs like climbing up to the roof or up on a 16 foot ladder to change the eight foot light bulbs. Did you know that they explode into a million little pieces if you drop them?

I also learned that I didn’t want to work in retail. The worst part was working in a basement inventory room, on my summer vacation, during the hot July weather, pricing school supplies. Didn’t I just get out of school? Apparently, retail works one season ahead of reality.

The best part was bagging. It was easy, you got to meet people, and I wasn’t stuck in that darn basement. I learned that just because I could fit something in the bag, it didn’t mean the bag could withstand the weight. Customers got very unhappy if their bag ripped and they dropped their purchases. The manager got really mad if the product broke and we had to replace it. Cause and effect, consequences, logic: all these were burned into a teenagers brain.

We also had ‘management trainees’ sent from head office to learn from Peggy. This was an interesting experience because the stock boy, and everyone else working in the store, knew more about the store than the trainees. The trainees tried to manage by position of power (their perception of it, at least) instead of by respect. That didn’t work very well. Actually, it caused the occasional mutiny and intentional lack of cooperation. The mutinies were an important part of their training experience.

The trainees learned a few things:

  • leadership doesn’t come from a title
  • the most knowledgeable people are front line people, not the people from head office, or their hopeful delegates
  • never let the 16 year old stock boy drive your car.

As a parent, I’m looking forward to the work experience that my teenage daughters will gain. They’re not. Working in a clothing store just might cure their fashionitis, or, they might spend all their money on clothing purchased with employee discounts. Only time will tell.

Copyright 2012 Phil Symchych. All rights reserved.

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Fear or Greed? What’s driving you?

Monday, February 6th, 2012

What’s the best motivator in business?

Fear means that you’re trying to retain existing clients and business. It’s like you’re trying not to lose and most sports teams know this is a lousy strategy that rarely works. You can’t score touchdowns when you’re trying not too lose.

Greed means you’re trying to grow and gain new clients and business. You’re trying to put points on the board. Furthermore, the natural desire of a living organism is to grow. It’s part of our DNA to grow. If you find someone who doesn’t want to grow or learn any more because they think they know everything, well, that’s not a healthy perspective. Isn’t that how you define arrogance?

Greed is a negative word, but who cares.In my opinion, greed is great. If you have to pick one….

Our goal in business should be to grow. If your business is in decline, I hope that position is not intentional or permanent.

Here are signs of a business (or a business owner) driven by fear:

  • They are strict rule followers and have a policy or procedure for everything.
  • They punish failure.
  • They assign blame, almost with glee.
  • They have been through tough times and may still be in shock.
  • They are unwilling to take risks.
  • They aim very low.
  • They don’t aim for anything.

Here are signs that a business or entrepreneur is driven by greed (remember, greed is great!):

  • They have clear principles and values but don’t need rules for everything.
  • They celebrate and reward failures because they learned something new.
  • They blame the process (and fix it) instead of blaming a person.
  • They have been through tough times and know they’ll survive the next ones, too.
  • They’re willing to take risks and are bored or unsatisfied with the status quo.
  • They aim high and their trajectory, even if they miss, still lands them in a higher place.

Greed is great. How are you using greed to achieve more in your business and your life?

Copyright 2012. Phil Symchych. All Rights Reserved.

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Know Your Numbers by Phil Symchych

Monday, January 16th, 2012

The best managers, running the most profitable businesses, know their numbers. Do you know yours?

Here are several key questions that, when answered, will give you a powerful insight into your company’s profits.

  1. What are your top three products or services, as a percentage of your total revenues?
  2. What are your gross margin percentages for these top products and your company average?
  3. How much of your total gross profits do these top products contribute? Remember, the 80/20 principle can apply here.
  4. What is your overhead rate by hour or person or unit of production?
  5. What is your break-even sales figure each day, week or month?
  6. Who are your most profitable customers?
  7. How much time and resources do you spend building relationships and selling to your most profitable customers compared to other customers or non-customers?
  8. What percentage of your revenues come from proactive selling vs. reactive order-taking?
  9. Which customers pay the fastest or the slowest?
  10. What is your days to cash? That is, how fast do you collect your cash. To calculate: Divide your accounts receivable into your annualized sales and then multiply by 365. The lower the number, the faster you’re getting paid.
  11. Are you actively promoting your most profitable products and services to your most profitable customers?

Knowing your numbers can reduce your risk from guessing and improve the probability of producing profits.

Copyright 2012. Phil Symchych. All rights reserved.

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Don’t Aim For Yesterday

Friday, January 13th, 2012

SUMMARY: Aim high. Encourage risk taking and support failure. Hold people accountable for results. Provide constant feedback. Banish excuses. Pay for performance.

If you want to achieve success, you have to aim for success. That means that you need a marketing plan and a budget that push your people to achieve more. You won’t replicate last year’s success because the market keeps changing so don’t aim for yesterday. You need to aim higher and then innovate and implement your way to success.

Never tolerate a break-even scenario. There’s no such thing in the entrepreneurial world. If you’re not gaining, you’re losing.

Employees think and act differently from entrepreneurs and owners, as we all know. They are scared to fail. Give them permission to fail! They will learn that failure isn’t fatal and that you will support them. This is how they learn and how they will eventually start hitting home runs for you.

Constantly challenge your people to perform more, better and faster. They’re not motivated by a paycheque (but some can be, see below for more). They need challenges and feedback on their progress in order to raise the bar.

Listen for excuses and then observe your own behaviour. Are you tolerating, or even encouraging, excuses? Your business value, profit and performance are all your responsibility. No excuses!

Once you’ve got them focused on raising performance, as determined by measurable outputs and business results, then align this behaviour with performance based compensation. Don’t give them an annual raise because the price of eggs and milk went up, start adding performance compensation to their base. If they are in sales, most if not all of their compensation should be variable. After all, as a business owner, all of your compensation is ultimately variable, based on your business performance.

You will achieve more success by trying to win instead of trying not to lose.

Copyright 2012. Phil Symchych. All rights reserved.

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Start-ups: are you a sprinter or a marathoner?

Monday, January 9th, 2012

There are two kinds of business start-ups: sprinters and marathoners.

Both have courage. Both want to control their destinies and both want to be successful. However, there are some key differences.

Sprinters

  • Have experience and expertise in their business and industry
  • Have learned the ropes on someone else’s dime
  • Have good relationships with customers or prospects
  • Generate sales and cash flow quickly
  • Develop their operating policies and procedures on the fly, but get them on paper
  • Focus on their core strengths and competencies, in other words, their ’sweet spot’
  • Are comfortable saying “No” to requests or opportunities that don’t fit their sweet spot
  • Have a culture of performance, accountability and success
  • Attract great people and customers because of their positive attitude
  • Are focused on a couple of key strategic goals; especially generating revenues and providing a great customer experience (quality, service, consistency, breadth, convenience)
  • Can generate positive cash flow from zero to 60 days

Marathoners

  • Have diverse experience but don’t have expertise in their new venture
  • Are learning the ropes on their savings, investor’s or banker’s dime
  • Think that their management skills are transferable to any industry or business
  • Have good relationships with referral sources or prospects
  • Generate sales slowly and steadily
  • Are too busy marketing and selling to develop operating policies and procedures
  • Try to keep everyone happy and will do just about anything for cash flow
  • Have a culture of sales and customer focus
  • Try to minimize their wage expense until they can afford to hire great talent
  • Are focused on growth for growth’s sake

I’ve played lots of sports including hockey, tennis, golf (well, some people think golf is a sport, especially golfers), and participated in endurance sports such as triathlons. As soon as I was in a triathlon race, I was figuring out how to conserve my energy so that I could finish the race. My strength in cycling didn’t make-up for my swimming and running.

It’s the same in a start-up. You can’t think about endurance, the long-term or trying to do everything yourself. You have to focus your team on creating short-term success, like a hockey shift or a tennis rally or a hundred yard (meter) dash, in order to grow your business.

The critical success factor in start-up success is speed: attracting customers, generating sales, converting sales to positive cash flow, reinvesting in your business, achieving profitable growth. These are a series of sprints. If it feels like a marathon, something is wrong.

Can you see the finish line or are you climbing yet another hill with no end in sight?

Copyright 2012. Phil Symchych. All rights reserved.

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Growing too fast?

Thursday, November 3rd, 2011

Here are some questions to ask that will help you grow profitably, at any speed.

  1. What are the growth dashboards and metrics? How fast are you growing?
  2. Leadership-do the leaders really want to figure this out along the way, or do they want to grow into a long-term, sustainable, scalable model? What leaders can they hire who have been there and done that?
  3. Cash-are they creating or consuming cash? When will they run out? What are the financial assumptions? What is the financial reality?
  4. People-what kind of culture do they have now and want in the future?
  5. Processes-are the processes standardized, measurable and replicable? Where are the bottlenecks? Do the bottlenecks keep going in circles because improvements are minor and incremental instead of significant?
  6. Information-how do they keep control, how are performance and output measured?
  7. Capacity-are they growing within their capacity or running constantly at the red line without any down time for maintenance?
  8. Scalability-are they going to expand by replicating existing operations or are they going to continually expand the existing operation?
  9. What’s the motivation for growth? Competitive opportunity? Top line revenue growth? Market share and customer acquisition? Bottom line profit and cash build up?
  10. What can go wrong and what are the contingency plans?

Your business is an organic entity and its natural inclination, if it is healthy, is to grow. Remember, though, that high performance athletes rest regularly so they can compete and perform at their highest levels. You need to make sure that your team is healthy so that your business can be healthy, too.

Copyright Phil Symchych 2011. All rights reserved.

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Phil’s Profit Point 27 Podcast – Thought Leadership

Wednesday, October 26th, 2011

And now also on iTunes

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Phil’s Profit Point 26 Podcast – Innovation

Wednesday, October 19th, 2011

And now also on iTunes

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Growing Pains

Friday, October 14th, 2011

A good friend was explaining the daily challenges of growing his business.

“Why does it feel like my face is in a fire hose?” he asked.

“Well, there are people running multi-billion dollar companies, with the same 24 hours in a day we have,” I replied, not sure if he was asking for advice or venting.

“Yes, and they have people they can delegate to,” was his response, and then he heard the wisdom of his own words.

“So, there’s your answer,” I suggested, realizing it was simple but not easy.

The key factors in growing your business are resources: time, people and money.

Money, which comes from profit, allows you to hire great talent, to whom you can delegate. The critical path starts with having a profitable business model. If your business isn’t as profitable as it could be or should be, then you need to evaluate your business model from the customer’s perspective.

How much value are you providing to your customers?

Another entrepreneur asked “when should I hire extra help around the house while I’m juggling parenting, running the house and building a business?” As soon as possible!

It comes down to the opportunity cost of our time. If we can delegate or outsource tasks that we don’t like, that we don’t need to do and that aren’t important to our roles and relationships, then we should do so. This applies to both our professional and personal lives.

What can you delegate, outsource or stop doing in order to create more capacity for important things in your life?

Copyright Phil Symchych 2011. All rights reserved.

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