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76 Posts authored by: Touchpoint
Touchpoint

When the Boss is Absent

Posted by Touchpoint Jul 7, 2014

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by Matt Krumrie.


Stephanie Laitala was diagnosed with a serious medical condition in April of 2009. Ten days later she was in surgery. In the coming months she underwent chemotherapy. Seven months later sales were up 20 percent at her company.

 

How did this happen without Laitala, president and owner of OWL Bookkeeping and CFO Services, at the helm?

 

"We didn't have anything in formal writing, anything to account for my leave of absence,” admits Laitala.

 

But in 2008 Laitala implemented the Entrepreneurial Operating System (EOS), created by Livonia, MI-based EOS Worldwide. The EOS is a simple, complete, business management system that empowers leadership teams to run successful companies. She was introduced to the EOS through a fellow business owner and that person introduced her to Mike Paton, a Twin Cities-based Certified EOS Implementer.

 

"Owl wasn't where I wanted it to be," says Laitala. "We were growing, but by teeny amounts. The kind of growth you trip over, not the kind of growth entrepreneurs crave and I was really frustrated. Mike and I met and the approach clicked. It's been the best thing we ever did."

 

The EOS doesn’t just empower the business owner only, it can set clear direction for an entire staff within a small business.


"Everybody knew what they were responsible for," says Laitala. "They knew exactly what their job was and exactly what my job and responsibilities were. Everything was covered because it was measured through the EOS."

 

But planning for an unexpected absence goes far beyond having a system such as an EOS in place, says Laitala. There needs to be someone who understands invoice procedures, can do payroll and pay bills. Someone other than the business owner should have access to key system passwords and be able to serve as a signor on checks.

 

"What will shut down the doors is not having money come in and go out," she says.


For Laitala, she was fortunate to work with a company full of accountants, so her operations manager handled the accounting and bookkeeping functions while she was out. For other companies, that might not be so easy.

 

"It's such a good idea to have at least one other person be able to access the money," says Laitala.

 

Having systems and procedures in place to prepare for an unexpected absence is critical for small business owners. Whether it’s a medical issue, accident, unexpected family or personal situation, an emergency can strike at any time. Without a plan a business can quickly lose key customers, projects can stall, and in some cases, an entire business can shut down.

 

“Planning ahead isn’t just necessary to handle the immediate effects of the boss being absent—the future of your company may depend on it,” says Paul McDonald, senior executive director of Robert Half Management in Westlake Village, California.

 

Even if you are able to weather the initial storm, if ongoing strategies are not in place, you risk suffering from the aftershocks. For example, employees may become burned out taking on extra responsibilities and begin looking to leave for new opportunities, or initiatives that were postponed may not be able to be jumpstarted quickly enough to take advantage of the corresponding business opportunity.

 

“A plan for what to do when the boss is absent prevents situations where no one knows what to do and ensures the company stays up and running,” adds McDonald.

 

One option is for the most senior manager to begin running the day-to-day operations, says McDonald. Very quickly, however, he or she should begin establishing new roles for others who can take on more responsibilities. The sooner these roles are established, the quicker the company can get back to as close to normal as possible.

 

“Make sure all key stakeholders understand the plan, can execute it and will be able to effectively communicate it to the rest of the staff,” says McDonald.

 

As president of Executive Group, Inc., a Loretto, Minnesota-based CEO peer group, Bill Mills works with over 75 CEOs across the country designing strategies that enhance personal life and freedom while producing sustainable growth and profits. About a decade ago he worked with the husband and wife owners of a Long Island, New York printing company where the couple was out extensively over several months tending to their ill son. The problem was especially acute since the son also worked at the company and was next in line to succeed his parents. 

 

The experience reinforced his belief that small businesses should create an accountability chart, says Mills. This differs from an organizational chart and provides a roadmap that clearly describes the function, role and responsibilities of each individual throughout the organization.

 

"I think that in times of crisis people pull together very well and I think that's what gets people through," says Mills. "But by having an accountability chart in place, it provides a starting point."

 

Mills works with CEOs to implement a program called the half day plan. The idea behind the plan is to get business leaders to design a program where over the course of the year they only commit to working 50 percent of their typical time. Each individual designs their own plan--perhaps working four hours a day, a few days a week or even one month on, one month off. At the end of the year they add up their hours and it needs to equal working only 50 percent of the time.

 

"Through a series of questions and planning, we break down the CEO’s job responsibilities and identify who in the organization, if the CEO suddenly couldn't be there, should take over those key responsibilities," says Mills. “This type of plan not only gives the CEO more freedom, it gives other employees  more responsibilities and prepares staff for a possible crisis in case leaders are unexpectedly out for any period of time.”

 

Business owners—and all managers—need to establish succession plans, even for temporary absences, says, McDonald. “This will ensure the business can continue running while the boss is out. Identify a successor and begin training him or her immediately before an emergency arises. 

 

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"An added benefit of a strong succession program is that it can be motivational for the successors, placing a spotlight on their value to the company and enhancing retention of these star performers," says McDonald.

 

Communicate with all constituents

Employees, vendors, suppliers and more importantly, customers, want to know that new leadership doesn’t mean drastic or immediate changes, says Margaret Spence, president and CEO of Douglas Claims and Risk Consultants, a West Palm Beach, Florida-based company that provides injury management solutions.

 

"Nothing could hurt a small business more than having the key person leave, retire or pass away and the biggest account walks away because they no longer feel attached to the business," says Spence.  "Remember, customers buy based on relationships that may have been built over time. The new person or team must quickly reach out to the customers and work on retaining them long-term."

 

Since emergency can strike at any time, a contingency plan that includes key man insurance should be in place, says Spence. Key man (also called key person) insurance helps companies survive the loss of a key leader. This is especially important for a small business because  the unexpected death of a business owner can dramatically impact the company, or even cause it to cease operating. Key man insurance covers the cost of consultants, executives, clerical, and administrative personnel to operate the business for a given amount of time.

 

"This will allow the business to hire temporary executives to run the company until long term decisions can be made," says Spence.

 

As for Laitala, her health sabbatical helped her grow as a business owner.

 

"It made me realize more about how I was leading the company," she says. "Sometimes getting away from the business allows you to see how a team is really doing. I am a visionary leader, but I realized the way I was running some things may have actually been hurting the business.”

 

Today, she leads a workshop called “How Cancer Saved my Business.” And her company has continued to grow 20 percent every year since 2009 while increasing from six employees to 37. The best part? She's now five years cancer-free.

 

“I am fortunate we had the systems in place, but I work with some really great people and they ultimately were responsible for helping us pull through,” she says.

Performance_Reviews_body.jpgby Debbie Griffin.

 

Few small business owners enjoy giving performance reviews—especially when they’re negative. But it’s important for managers to understand the most effective ways to give feedback to employees. Tom Spencer, president and CEO of Aubrey Daniels International, a 30-year-old consulting firm, helps clients do just that. His company works with business owners to understand how to do performance reviews in the most constructive way. Spencer earned a doctorate in psychology from West Virginia University and a master’s degree in applied behavior analysis from Northeastern University. He started with Atlanta-based ADI as a consultant before taking over the top spot in January. In a recent interview with writer Debbie Griffin, Spencer explains why performance reviews are important and the best ways to do them.

 

DG: Let’s start with the basics. What is the purpose of a performance review?

TS: A performance review helps to develop the person and should enable them to perform to the best of their ability for the organization. It identifies the behavior you’re looking for from the employee and ensures that workplace conditions will support it. An ideal performance review sets up multiple opportunities for reinforcement of those behaviors and should prompt a manager to look for those opportunities.

 

DG: Who should conduct a performance review?

TS: An employee’s direct supervisor should do a performance review, but it should be a two-way conversation. It’s a 50-50 responsibility to make sure expectations are clear, and it should be more performance management than review or evaluation. The purpose is to get the behavior you want from the employee and make yourself available to them.

 

DG: How do performance reviews affect the bottom line?

TS: Typically performance reviews won’t support the bottom line unless the performance goals of individuals are aligned with overall goals of the organization. Pinpoint the results you’re looking for and the behavior that will drive those results. After that, there needs to be frequent follow-up and reinforcement of the behavior required to achieve those goals.

 

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DG: How often should performance reviews be conducted?

TS: If it’s important enough to have a goal around it, it’s important enough to talk about every month, or at least quarterly. An annual performance review is a challenge especially if that’s the only time you do it. And those goals defined annually tend to be so general or broad that they’re misaligned with day-to-day activities. The goals need to be measurable, and there should be agreement on how they’re measured. The most important thing is providing frequent, positive, reinforcement of desired behaviors and opportunities to engage employees in general.

 

DG: How should a manager address issues that an employee needs to improve?

TS: You describe the behavior and the impact of the behavior on the organization. It’s important to be conversational rather than confrontational, and a manager must have employees’ respect and trust in order for those conversations to happen. For example, asking a worker to perform a particular task better but reacting adversely when he or she asks questions in order to learn actually provides negative reinforcement of a desired behavior. Conversely, good behaviors are extinguished all the time because nobody notices or says anything.

 

DG: How does ADI conduct its own performance reviews?

TS: ADI holds monthly meetings and defines measurable outcomes for each team position, some of which are tasks, while others are behaviors. Take the hypothetical examples of marketing and IT, where the measurable outcomes are more leads and improved server up-time. The behaviors or tasks involved might be meeting a quota through cold calls and implementing a server-redundancy plan on schedule. ADI has sit-down meetings, continuous one-on-one conversations, and frequent team meetings via Skype. The company uses scorecards and progress graphs to track results, measure progress, and set new goals, and the scores can earn profit-sharing money. At the end of the day, people should know if it’s been a good day or a bad day, and it’s good to have daily reinforcement.

 

Always_Interviewing_body.jpgby Erin McDermott.

 

A small business owner is already performing many roles—star, producer, and director. But how can you possibly play talent scout, too?

 

The competition for your next great employee never stops. With highly qualified candidates increasingly scarce, the task often can be even harder for smaller firms, as the fits and starts of growth make the addition of another salary a perilous financial leap. For many, it’s no longer only a rival across town that’s hiring from the same talent pool, technology has enabled national and global competitors to search out the same folks as well.

 

“With skilled-worker shortages increasing, the need to build a company talent pool is a necessity,” says Ira Wolfe, president of Wind Gap, Pennsylvania-based Success Performance Solutions and a recruiter for small firms as well as blue-chip clients. “The problem is supply and demand—small business owners want to hire just-in-time, but the supply isn’t there. You can’t think you’ll run an ad and have a position filled within two weeks.”

 

New tools like LinkedIn and other social-media sites have become a virtual resume bank and Rolodex of every colleague you and your staffers have ever known. But that seeming abundance also makes those hiring more optimistic than they should be. While these sites can be a valuable tool, they also are rife with incomplete, out of date, or outright inflated information, making searches frustrating and unreliable.

 

So how can small businesses best keep a finger on the pulse of their real talent pool? Technology can make short work of some of it, but there are also time-tested techniques and insights that small business owners, and the recruiters they work with, swear by. Here’s a look at four approaches:

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Try new technologies

LinkedIn and its 225 million users is a good place to start, but know the limits. Combined with Facebook, CareerBuilder, Monster, the Ladders, and Glassdoor, the “sharing” updates can be a 24/7 window on the comings and goings of staffers—who’s leaving, who’s unhappy, and, importantly, who’s looking. Still, it takes an effort to learn the etiquette and build a presence—time and energy that busy small business owners likely don’t have. Two new alternatives comb LinkedIn and other boards’ data and cut to the chase—for a price. HiringSolved works like a search engine, spanning global sites and industries, to constantly filter candidates and send the best to your attention. (Prices start at $199 a month.)

 

There’s also the startup NextHire, which works with small businesses to set up the search criteria, runs its algorithms across the various resume boards, then narrows down the field and presents a list of eight to 10 pre-screened finalists. It charges a flat rate of $4,000—a fraction of the 25 percent of first-year salary that many traditional recruiters command, says CEO Bob Myhal. Among NextHire’s cool tools: a one-way webcam interview with candidates that offers a glimpse of the character behind the resume. “We’ve come to realize that a resume is limited. It’s just one view,” Myhal says. “We set out to give clients multiple views. This gives another piece of the puzzle.”

 

Cast a wide net

Remember the old yarn about not putting all your eggs in one basket?  Don’t rely on a single niche job board posting, either. In the budding tech city of Nashville, talent coordinator Heather Neisen says she hits all points in search of candidates for TechnologyAdvice, an IT adviser for B2B. Her most recent list of scouting spots: local chambers of commerce, career fairs, career centers, networking events, college faculties, industry associations, paid posting boards, and even Craigslist. It’s about building a contact list and keeping in tune with which sources are the most helpful, Neisen says. “Just one is not going to be enough for a small business,” she says. “You never know where the one perfect applicant is going to come from. The answer is everywhere—there’s not one pattern that we’ve found. And that’s why you constantly have to keep looking.”

 

Keep the lines open

The minimum time to fill an open spot is 45 days, says Wolfe. Small business owners need to be constantly recruiting, watching the local openings and closings and keeping track of talented individuals who might be looking. One way to build an internal network: Set up your company’s website to always accept applications, which can build a go-to pool of preferred and interested candidates. (And even if they’re not available, they may know someone who is.) One smart tip from Wolfe: Keep an open mind when it comes to skills that might unexpectedly translate to other industries. He had an arborist client who was always looking for people available to take care of trees. Their solution: They started posting job openings at a rock-climbing center, where people who likely wouldn’t mind scampering up a tree would gather. Wolfe knows a bit more than most about abilities with other applications. He spent 15 years as a dentist before he started getting paid to find the right people for companies in need. His one common strength in both fields, he says: Diagnosis.

 

But don’t let ‘the one’ get away

Is this person smart? Someone who’s good to be around? Then hire them and the business will come. That’s the advice that family lawyer Randall Kessler says he’s followed for 30 years for his Atlanta firm (and he wrote about this recently here). It’s wonderful if a candidate has great skills, but the bigger goal is to find someone that you respect and trust to add value to your team. Kessler says it’s hard for small firms to know when the next emergency might come or when it will be imperative to add on, so he’s found it’s just wise to always keep track of who’s making a good impression. “Even if I’m not hiring, I’m keeping them in mind,” he says. “Sometimes you don’t need to post a job application to know they’re the person to tailor a job to.”

By Iris Dorbian.

 

Benefits_body.jpgIt’s a dilemma that has plagued many small business owners: Should they offer employees a benefits package? And, if so, what should they offer that would both meet the needs of employees without incurring undue financial liability on the business?

 

While some business owners have, in the wake of the recent recession, opted to either slash or cut benefits entirely, giving employees the responsibility of finding insurance courtesy of the Affordable Care Act, this could be a flawed strategy.

 

According to a recent survey conducted by the insurance company Aflac, 57 percent of workers said they would likely accept a job with lower pay but better benefits. This is a finding that reinforces the importance of small business owners offering employees a benefits program to stem workforce attrition.

 

Below are some tips to help build an employee benefits package that’s the right fit for your business.

 

Work with a benefits broker

Just as the title indicates, a benefits broker can help you design an employee benefits package that will not only be fair to your finances but to your employees’ needs as well. He or she can help you understand how much of an insurance premium you can afford to get the coverage you feel is right for your employees. They can also help you explain to your workers the value of the benefits you’re offering.

 

Karen LaCroix, founder and president of SuperiorHR, a Dallas-based human resources solutions provider for small to medium-sized companies, believes in the value of this advice. But she does note that there is “marked difference in the insurance products available to companies with fewer than 50 employees,” as opposed to larger firms.

 

However, if a small business wants to be competitive in the workplace and attract top-notch talent, it would be wise to develop a benefits package that rivals what its competitors are offering.

 

Identify all the pieces

Few would argue that health insurance is the most critical element of an employee benefits package.

 

“Health insurance provides a safety net that protects an individual or family from the high cost of a catastrophic health event,” says LaCroix.

 

She also suggests that small businesses consider including long-term disability coverage as a benefits option. “Again, this is protection from lost income should an employee be disabled for a long period of time,” notes LaCroix.

 

Mick Hewitt, CEO and co-founder of MasteryConnect, a five-year-old educational technology firm in Salt Lake City, says in his company’s sector—the tech startup culture—the typical benefits package is constantly in flux and evolving.

 

Because of this, he says, “When we put together our benefits, we looked at the extremely competitive tech talent hunt and decided that we couldn't afford to offer anything less than the best health care. So we opted to pay the entire family premium for our employees' health and dental care. We view it as an essential investment into recruitment and retention.

 

The less time and energy an employee has to spend worrying about health care, the more time and energy he or she can pour into innovating for our company.”

 

Solicit employee feedback

When building an employee benefits package, it’s a good idea to consult employees about what they would like included. In addition to health insurance, some workers might view wellness programs as critical to their needs.

 

Tom Giddens, executive vice president and director of sales at Aflac, works with many small businesses and champions this tip.

 

“Offering the right benefits package is a matter of understanding what today’s employees want and need,” he says. “To gain insight, employers can hold town hall meetings, create idea boxes where employees can submit their benefits-related requests or even conduct employee surveys. All are easy ways for employers to start benefits conversations with their workforces and ensure they offer the most appropriate, competitive and cost-effective packages for their businesses and workers.”

This tactic also gives workers more of a proactive and less passive role in customizing a benefits package conductive to their needs.

 

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Decide whether you need to offer benefits

If you operate a business that relies on seasonal, part-time or even contractor help, you might not need to offer benefits. Be realistic with what you can—or cannot—afford.

 

For uninsured workers, the ACHA’s Health Insurance Marketplace, provides a range of options. Plus, depending on their income, workers might qualify for a subsidy that can reduce their monthly premiums, thus making insurance affordable and accessible within their means.

 

But small businesses might be subject to penalties if they opt out of offering full-time employees health insurance.

 

Hewitt of MasteryConnect, has 35 employees, and says small businesses need to carefully consider the repercussions of not offering employee benefits.

 

“Companies have to weigh the cost of those penalties versus the cost of providing insurance,” he says. “If you neglect to offer a good health plan, you've got problems beyond financial penalties: No one will want to work for you. In our case, the AHCA ended up being a non-issue because we would never consider eliminating those benefits.”

Hiring_Best_Practices_body.jpgby Iris Dorbian.

As CEO of Steinreich Communications, an 11-year-old PR firm in Fort Lee, New Jersey, Stan Steinreich often works with headhunters. Usually they are tapped to help him fill top-level spots at his firm, such as media relations professionals or department heads. For the most part, this hiring strategy has worked out well for Steinreich although he does offer a few words of caution to small business owners:

"Use headhunters for very specialized or targeted searches," he says. "When they're selected in that context, they can be very valuable and really add an expertise to those different situations."

Yet not all extol the use of headhunters for small business hires. Tom Armour, co-founder of High Return Selection, a consulting firm that helps small to medium-sized businesses attract and retain talent, feels that headhunters have become largely antiquated thanks to professional social networks such as LinkedIn.

“Fifteen years ago before social media, you needed a headhunter to access a network,” he says. “Now with LinkedIn, that network of accountants is totally searchable.”

How then can a small business owner determine if it’s worth the time and money to retain a headhunter? Here are a few tips to consider before bringing on a recruiter.

Communicate expectations clearly
When meeting with a recruiter to discuss a possible working arrangement, be clear. State specifically what you are looking for in a job candidate as well as your expectations for the agency.

Elisa Sheftic, president and managing partner of The Right Executive Search, a four-year-old, search firm, concurs. Early on, she says, there needs to be “a conversation that defines expectations on both sides.”

She continues: The client needs to know: How long will it take to receive viable candidates? How do you source and screen candidates? What is the fee structure? What is the guarantee period? Do you do a background check or drug testing?

“[Similarly], the agency needs to know the skill requirements for the position and the compensation parameters. What is the interview process? How long will the interview process take? What is the process for submitting candidates? Will there be feedback in regard to each candidate so the agency can tweak the search if need be?”

Once all these questions have been answered, get it in writing. A contract, signed by both parties before the search begins, ensures that each side is clear on what to expect from the other.

“[A small business] should not work with any agency who cannot clearly define their process verbally and on paper,” insists Sheftic.

Consider the expense
Before signing on with a headhunter, determine if you can afford it. Recruiters usually get paid one of two ways: either upfront on a retainer basis, or on a contingency basis, which means after the client has hired one of their candidates. For the latter, the headhunter often takes a certain percentage of the hire's salary as well as any related cash bonuses.

Armour says the cost for a contingency search “typically ranges from 15 percent to 25 percent depending on the person they hire.” For a position that pays $100,000 a year, that fee can amount to anywhere from $15,000 to $25,000. Although some small businesses can afford it, that sum may be too steep for many.

Don't rush the interview process
Once a headhunter begins sending over viable candidates, be sure to do your part. That means taking an appropriate amount of time to meet with and evaluate each person. It’s a smart idea to bring other people into the process as well.

Steinreich says at his firm, job candidates, even those interviewing for junior-level spots, always meet with three or four people first before getting hired. The team will then discuss the strengths and weaknesses of each candidate—a committee approach that Steinreich maintains is essential to the vetting process.

Further, Steinreich says he will meet with job candidates during the first round of interviews as opposed to later on. The reason is simple: “I don't like being in a situation in which my team members have invested a lot of time in looking for somebody and that person gets to me and I say [to myself], ‘Oh my goodness. What were they thinking?'”

Trust the headhunter’s judgment—and yours
Hire a recruiter who either specializes in your industry or has a keen understanding of the nuances of the job you want to fill. Because they’re familiar with the kind of business you have, their recommendations of candidates should be trusted.

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“A headhunter saves us a lot of time because they know who's out there and who's available,” explains Steinreich. “By the time we get those couple of candidates to come and see us, they are all fairly qualified. We know that in advance. It actually is very cost-efficient in that situation for us to go with a recruiter.”

In addition to trusting your recruiter's judgment, you should also trust yours. If you have a question about a candidate being the right fit for your business, ask him or her about it during the interview. In addition, do your own due diligence. Search engines such as Google or other social media can be used to verify an applicant's credentials.

The hiring process is never easy and a recruiter—when chosen wisely—can be a tremendous asset. Taking the time to be as selective with a headhunter as you are with a job candidate is smart business and can prevent costly hiring mistakes.

 

OrgStructure_body.jpgby Erin O’Donnell.


Your business might be small, but the way you structure it is a big deal.


Organizational charts aren’t just for big companies. Defining the structure, roles, and processes in a small business can make it more efficient, clear up communication issues, empower employees to make decisions, and keep the team accountable.


That’s certainly been the case for Sara Sutton Fell. She started FlexJobs.com from her home in Boulder, Colorado, in 2007 to create a better resource for freelance and telecommuting jobs. Today, the company has 40 employees who work virtually, just like their clients do.


Yet, even with such an unconventional arrangement, Fell realized her growing business needed some basic structure. Today, FlexJobs is organized functionally. The company has a layer of directors in areas such as client services and job research, with employees like writers and researchers reporting to them. “As entrepreneurs, we’re always wearing most of the hats,” Fell says. “I needed to have other people help me with the hats, or take over the hats. When you’re used to having your hand in everything, it’s hard to delegate.”


Define roles

Creating structure allows business owners to institutionalize the things they take for granted and the expectations they may not have expressed, says Dr. Michael Woodward, an organizational psychologist who coaches entrepreneurs and executives. “You can’t just tell somebody ‘Your job is everything,’ because then it becomes nothing,” says Woodward, author of The YOU Plan: A 5-Step Guide to Taking Charge of Your Career in the New Economy.


Woodward says structure provides clarity, consistency, and certainty. Your employees trust you when your expectations are clear and you’re consistent with them. Uncertainty is a hallmark of small businesses, but “as the owner, it’s up to you to shoulder that and create certainty for your employees,” Woodward says.


Types of organizational structure

Most businesses organize in one of four main ways:


  • Bureaucratic: The classic org chart setup, with top-down authority and one or more layers of managers. Most large businesses are still structured this way because their hierarchy is very tall, flowing from the CEO, COO, and CFO.
  • Functional: Employees are grouped by their functions, such as production or marketing. This works for small companies that specialize in a single product or service. The functional units aren’t accountable to each other, only to the top authority.
  • Divisional: Teams are organized by product lines or markets. Each division is somewhat independent, and the company has flexibility to create new products or expand into new regions and markets.
  • Matrix: A blend of functional and divisional. Employees are grouped by roles and divisions in teams that work on a project basis.


The risk of no structure

Business coach Mandi Ellefson says organization flows from your mission and values. Make sure both are well defined and known to all. “It empowers your employees to make good decisions based on your value system,” Ellefson says.


The biggest mistake you can make is having no structure at all, Woodward warns. Your staff might be small, but is your customer base? What about your vendors? Organization makes things clear for your external audience, too. They’ll know who to contact in any situation, instead of getting passed around. Says Fell: “It can be very disconcerting when it looks like you have too many cooks in the kitchen.”


Business structure experts recommend that small business owners put functionality ahead of personality. “Don’t mold things around people too much,” Woodward advises. “People gravitate to what they like or what suits them. And then you have a lot of things fall through the cracks because nobody owns it.” Without a structure for accountability, all decisions have to funnel through the boss, and that causes efficiency to plummet.


A process for everything

The proper organization also helps to define the processes that run your business. That, in turn, can make you more efficient. When Paul Kortman started digital marketing firm ConnexSocial three years ago, he employed a handful of contractors, but was still heavily involved in the day-to-day operations.


OrgStructure_PQ.jpg

After listening to a podcast about creating strategic operating documents and processes, he changed his whole approach. “It warmed me up to being strategic about my business and having processes in place to have people do these things for me,” he says.


With Ellefson’s help, Kortman began writing processes for everything, then delegating those tasks. Within six months, he had 40 processes, and a staff of eight people following them.


Ellefson says the role of the owner or president is to build the structure and then hire the right people.  “It’s not the owners’ job to do the processes, but to understand them, so they can create the structure,” she says. “Business owners need to get out of the mindset that they are going to be doing the work. That’s micromanaging.”


Coach or quarterback?

Woodward says business owners must also accept that they’re no longer the star players of their team; they’re the coaches.


“It’s rare you will find a great coach who was also a great player,” Woodward says. “There’s a reason for that. Star players get their glory out of scoring the goal, being the one to do what they have to do in a clutch situation. Coaches enjoy seeing people go out and do what they taught them.”

Leanne King faced that choice in the early stages of her human resources firm, SeeKing HR. Founded in 2007, the San Antonio-based company provides third-party HR to other small businesses.


“I had to figure out, did I want to be a business owner or an HR consultant?” King says. She chose to be the president and stick to the numbers side of the business. Then King hired a second-in-command who is strong where she is not, in roles such as networking.


Today, SeeKing HR has 15 employees in three divisions: HR program management, employee development, and employment service. As the company grew, King knew she had to honor the structure she had imposed, which meant she had to redefine herself to her oldest clients. “They still think of me as their rep, and I can’t be,” King says. “I can’t be the point of contact for every single employer, but I’ve been the constant.”


Structure can be flexible

Woodward says structure doesn’t have to be rigid, as long as it provides a reliable framework.


Tennis friends Jayne Drew and Kelly Daugherty started Smashing Golf and Tennis in 2009 because they couldn’t find athletic clothing with built-in shapewear. Both came from industries that organized around projects, so that’s how they structured their company.  But they had never mapped out their organization until they decided to seek funding. “Our lines were going everywhere. We realized we were doing a classic matrix management and we didn’t even know it,” Drew says.


Smashing has about 10 employees who come together in teams around projects, then reform to work on others. They report to whichever partner oversees the type of work they’re doing. Drew says they have learned to be very detailed about assignments. An employee juggling multiple projects, for example, will be told how many hours to spend on each.


“I’m sure a lot of small companies have figured out how to make it work with a more traditional structure,” Drew said. “We look for people who are more willing to work in this kind of environment.”

 

QAKessler_Body.jpgby Erin McDermott.

 

The critics are clamoring and the press wants a comment. Face it, you need help dealing with your company’s crisis. Enter Karen Kessler, a public-relations specialist who works to mitigate some of the toughest situations imaginable. (How delicate? Even the producers of TV’s “The Good Wife” have sought her out to consult on their show.) Writer Erin McDermott recently spoke with Kessler, the co-founder of Evergreen Partners, about silencing Twitter fights, avoiding the drip of bad news, and the absolute worst thing a business owner can say to the media.     

 

EM: How did you get into crisis management? Were you always the girl who kept the coolest head when you were growing up?

KK: In many ways, it fit who I was, it fits who I am, and it fits what makes me feel comfortable. I’m dealing with people in very high-stress situations. I think if you can offer people some comfort when they’re in those situations and get them to dial down the drama and dial down the impulsive behavior, there’s a sense of relief for them in that. And if I can offer that sense of relief, it’s really very comforting and satisfying to me. That’s the psychology of it.

 

I kind of backed into it. It never was a field you could study when I was in school. I started out in a fairly traditional public relations background and then was hired as vice president of corporate communications at the New York Stock Exchange. I reported to Arthur Levitt, who went on to be the head of the Securities & Exchange Commission. In the course of that I worked with companies who were publicly traded and they had responsibilities to report changes in management or organization that might impact their stock price. I learned a lot about how the public reacts to news and when they react. When I started my own business, I found there were a lot of companies that started out thinking they had good news to share—but when you peeled back the layers, there was other stuff they weren’t sharing.

 

QAKessler_PQ.jpgEM: When a potential client approaches you, what happens? How does it work?

KK: Most times, we get our clients through attorneys that are working with companies and think that whatever’s going on has the potential to be unmanageable, either with customers, the public,  the media, or potential jury members. Other times, they come directly to us because they’ve heard of us or are referred.

 

The very first thing we do is ask to sit down with them. After we provide a little bit of comfort, we ask them to tell us everything that’s going on. Let’s talk about anything that can come out later so that we can begin to put together a plan to mitigate it. And what we find is, despite our request that it all comes out at once, it generally comes out piece by piece. Most people have a very hard time acknowledging what’s going on in the most direct fashion.

 

EM: Is really possible for an organization to think ahead about damage control?

KK: Absolutely. Can you envision every scenario that could possibly come and be prepared? No. But are there certain kinds of things and information that you can pull together—certain kinds of approaches you can instill in your employees, or values that you can emphasize or written policies you can put in place that will help you in these situations? Absolutely. Do most companies have them? Absolutely not.

 

EM: Social media must have seriously altered the landscape for you.

KK: It did. It’s more voices, and no deadlines. Now, it’s a race to get it up online. As we’re talking, they’re typing.

 

EM: What’s the worst thing a company can do in a crisis like this?

KK:  Use the phrase ‘no comment.’ That’s our least favorite thing in the world. If you say ‘no comment,’ you might as well write the word ‘guilty’ on your forehead.

 

SBC newsletter logo.gifEM: There are plenty of examples in the news of tiny companies coming under fire for public blunders. In cases like that, how do you tailor your services to small businesses?

KK: With small businesses, it’s often public missteps that might come off as tone-deaf—it’s not intentional on these kinds of things. It’s not earth-shattering, like putting out a product that’s going to hurt people or make people ill. It’s just a misstep or something that doesn’t work out. Or it’s a dispute with an employee—something between two people that gets escalated.

 

Right now, we have a very small organization we’re helping in which two people, one of whom is a former employee, are in a Twitter fight. Neither of them recognizes that this isn’t like 30 years ago, when you both just picked up the phone and yelled at each other. When you’re in a Twitter fight, it’s a public situation. We see these things all of the time now. Take 10 minutes and walk away before you decide to jump on your keyboard, because then it is forever.

 

This interview has been edited and condensed for clarity.

Touchpoint

Stop Hiring Like a Startup

Posted by Touchpoint Oct 17, 2013

StartUpHiring_Body.jpgby Erin O’Donnell.


One of the biggest transitions for any entrepreneur is making the leap to employer. While it’s important to know how you’ll handle the cost of adding staff, recruitment and human resource professionals say there’s much more to figuring out whom you should be adding to your company, and when.


When you’ve been doing it all yourself, the challenge is learning how to let go, and what to let go of, says Scott Ragusa, president of contract staffing for WinterWyman, a recruitment firm based in Boston and New York City. For the passionate entrepreneur who has been living and breathing his or her business from day one, this marks a huge shift in thinking. It requires planning, self-awareness, and trust.


“An entrepreneur will hold onto the parts of the business he or she is not built for longer than they should,” Ragusa cautions. “The reality is, if Bill Gates was writing all the code, Microsoft would not have become Microsoft.”


Investing in people: the opportunity cost

As executive director of human capital services for TriNet, a third-party HR solutions firm based in the San Francisco Bay area, Debra Squyres guides startups and sole business owners on planning for staffing and growth. She sees entrepreneurs confronting the same dilemma over and over: they feel divided between selling and delivering their product or service. They experience peaks and valleys because they can’t sustain both in a scalable way. They realize they need help, but they’re worried about the cost.


Too often, she says, they haven’t forecast for staffing needs. “So many people default into growth, as opposed to having a strategy and a plan around it,” Squyres says.


When you realize you need help, that’s the perfect time to take the long view on your financials. Squyres recommends looking well beyond your month-to-month revenue and instead look at profit projections into the next two years or longer. Calculate revenue and profitability for each employee you want to hire, and build toward that.


Cliff Dank understands this both as a recruiting professional and as an entrepreneur. Three years ago, he started Elm Talent Group in New Haven, Connecticut, and now serves as the boutique recruiting firm’s president and managing partner. Dank says most small business owners are constantly looking at the opportunity cost of any investment, of time or resources. They should view staffing the same way.


“What would you otherwise spend this money on?” Dank asks. “If you include people as an investment, you can contrast that against other opportunities.”


Small businesses are necessarily frugal, but Ragusa cautions against going overboard. He urges business owners to view hiring not as an expense but as a revenue generator. Consider how extra staff will drive your production in six months, a year, or two years.


“Companies that do this well continually think about the future, not just about their exciting product but what it’s going to take to bring them to the next level. They’re not afraid to trust other people to help them with that,” Ragusa says.


StartUpHiring_PQ.jpgFind the utility players

When you’ve been a one-man band for a while, it’s hard to know which part to hand off to someone else. Squyres says this is the time to review your strengths. Then, invest in someone who will complement your skill set. “It’s critical in the early stages of development that business owners look for utility players, as opposed to specialists,” she says.


You’re not looking for your polar opposite. An entrepreneur needs to surround herself at first with other people who can also wear many hats, be flexible, and share her love of the bootstrap spirit. The workload will still be heavy.


Squyres recommends an exercise to get some perspective on where you might need help. Keep a time log for at least a month, and track what you spend your time on. Be sure to span a few periods of high and low activity to be as comprehensive as you can. As you analyze the log, key pivot points will begin to emerge.


“Look for what can easily be outsourced or delegated to someone you can hire at a reasonable salary so you can focus on activities with the greater ROI,” Squyres says.


For Dank, a different writing exercise helped with his clarity. When considering where you need help, think about where you might be the bottleneck in your process. Write down all the ways that additional staff could help you get unstuck, he says, and quantify which would be the most valuable thing to free up.


“Any effort toward being analytical is better than none,” Dank says.


Hire or outsource?

If you feel that the business of running a company is pulling too much of your focus, you may be able to move back-office functions off your plate through outsourcing. “That’s what those sole practitioners get bogged down in,” Squyres says. “They’re so busy selling and doing the work that there’s no one to send out the invoices or pay the electric bill.”


You may not need your own people to do the books, the billing, human resources, or risk management. More and more small businesses are turning to third-party companies to handle these functions. The National Association for Professional Employer Organizations (NAPEO) estimates its industry grew by $10 billion in gross revenues in 2010. About 110,000 small to mid-size U.S. businesses use a PEO.


Depending on the nature of your business, an independent contractor may also make for a good alternative to a full-time employee. In one survey, the Bureau of Labor Statistics found 7.4 percent of the U.S. work force was made up of these freelancers, consultants, and other “alternatively employed” workers who typically work on a project basis.


Ragusa says a common mistake among entrepreneurs is thinking you can continue to do everything singlehandedly just because you’re doing it now. “It’s not so hard being the accountant when there’s only one employee. But can you do that forever?” he says.


The hiring advantage of startups

Squyres watched one startup grow ambitiously, hiring top talent away from Fortune 500 firms. Problem was, they paid like they were already one of them. Those generous 95th-percentile compensation packages ultimately sunk the company.


The moral of the story is, you don’t have to pay top dollar to attract top talent. Squyres says small businesses commonly misjudge just how attractive they are to people looking for that kind of work environment. Stick to your budget and you can still hire talented, passionate people.

“What you find is that not everybody makes a decision based on compensation alone. You have to be competitive, but you don’t have to lead the market,” Squyres says. “Owners underestimate the value proposition they have to people who are hungry to be a big fish in a small pond.”


You want to find the people who are drawn to the energy and promise of a startup—and they’re out there. Like the entrepreneur, Ragusa says, they’re forward-thinking. They will relish the chance to touch many aspects of the business. Or they may be enticed by the chance to share in your future success.


“Someone who thinks, wow, if this thing takes off, what is my stake in it? That’s the person you want to hire,” Ragusa says.

MandateP2_Body.jpgby Erin O’Donnell.


Part 1 of our series on the Affordable Care Act explained that businesses with 50 or more employees now have an extra year to fulfill the employer mandate of the ACA. That means these businesses now must meet a Jan. 1, 2015 deadline to offer affordable health insurance or pay a penalty. Below, we explain the best ways for companies—especially those with seasonal workers—to figure out how to account for employee hours under the new law, and how affordability is defined.


CBG Benefits principal and founder Chris Costello says the employer mandate delay gives businesses more time to plan, but he warns against procrastination. “This is especially true for companies that are approaching the 50 full-time employee threshold or that hire a lot of seasonal workers,” Costello says. “I would strongly advise them to start taking action now.”


Employers in seasonal businesses have a complicated road ahead as they try to account for employee hours under the new law. They should start tracking now, because FTEs are counted by hours, not individuals. Seasonal hours are accrued, adding up to equivalents of full-time employees. If that number reaches 50, the company is subject to the pay-or-play mandate. The IRS has compiled a guide to determining FTEs, along with answers to other frequently asked questions about the health care tax credit for small businesses.


The FTE formulas can also help firms with 25 or fewer employees to determine if they qualify for a tax credit available to employers that pay a portion of their workers’ health insurance premiums.


Michael Taggart, president of Empyrean Benefits Solutions in Houston, says employers should start measuring hours for variable hour employees as early as October 3, 2013. That will allow them a full 12-month measuring period plus the full 90-day administrative period allowed under the law’s “safe harbors” provision for the pay-or-play rules.


The next steps Costello recommends for employers include contacting their benefits broker, attending webinars and seminars on the ACA, and making use of tools that allow them to track employee hours.


Exchange confusion

To ensure employers don’t try to avoid complying with the mandate, the law stipulates that if even one employee buys a government-subsidized individual policy on one of the state or federal exchanges, the company they work for will be subject to escalating tax penalties.


The government is encouraging employers to make voluntary reports to the IRS in 2014 and 2015 about their health coverage, says Heidi Savage, a former human resources professional who counsels small businesses on health care reform and also blogs about it. To avoid penalties, employers with more than 50 workers must offer a plan that meets two criteria:

  • Affordable: The employee’s share of the annual premium for self-only coverage is no greater than 9.5 percent of annual household income.
  • Minimum value: A plan that pays at least 60 percent of the total cost of medical services for a standard population.

 

If their plan does not meet those standards, then employees may qualify for government subsidies on the health care exchanges, or marketplace. Savage notes that people who decide to shop on the exchanges will have to supply their employer’s tax ID number, and this is how the government will be able to check whether the employee is eligible for subsidized coverage, or whether they should be covered instead under the plan they’re offered at work.


MandateP2_PQ.jpg“Anyone can shop on the exchanges, but the subsidies aren’t available to you unless your employer plan exceeds 9.5 percent of your household income,” Savage says.


Savage posts a four-question test for employers on her blog to help them stop ineligible employees from applying on the exchanges.

There’s a chicken-and-egg quality to the employer mandate delay, because some employers are looking to the insurance exchanges for guidance on what health plans will cost. However, a business that is already offering insurance is welcome to shop around for something better on the exchanges. That will help them decide which makes more financial sense for their firm: to pay for coverage, or pay the government $2,000 per employee.


The extension until 2015 is meant to give businesses a chance to better prepare for implementing the ACA’s rules. And Taggart warns employers not to squander this time, but to use it wisely by making necessary changes to their record-keeping systems. He and Savage note that by 2016, the IRS will require reporting about the employer-provided coverage, and to whom it’s offered, under sections 6055 and 6056 of the tax code.

“Your accountants will need this information,” Savage said. “Ultimately, it’s a risk management decision for the company.”


Disclaimer: Since the details of your situation are unique, you should always seek the services of a professional for advice specific to your business.

MandateP1_Body.jpgby Erin O’Donnell.


Note: This is Part 1 in a series on the Affordable Care Act. Part 2 can be read here.

 

The Obama administration announced in July that businesses would have an extra year to fulfill the employer mandate of the Affordable Care Act. That means companies with 50 or more employees now must meet a Jan. 1, 2015 deadline to offer affordable health insurance, or pay a penalty.


“We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively,” wrote Mark Mazur, an assistant secretary at the treasury department, in a blog post announcing the delay. “We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so.”


The announcement came as a surprise to some small businesses, but for many it only added to confusion about their obligations under the ACA.

“Many employers have mistakenly interpreted the employer mandate reporting delay to mean that the ACA itself is delayed for a year,” says Matt Thomas, president of WorkSmart Systems, which provides human resource services to about 300 small and medium-sized businesses in 37 states.


MandateP1_PQ.jpgOnly the “pay or play” provision is affected, Thomas says, and even that affects only a small percentage of small businesses. According to a the latest annual survey by the Kaiser Family Foundation and Health Research & Educational Trust, 91 percent of firms with 50 to 199 employees already offer group health plans.


According to the law, here’s what employers still must do by January 1, 2014:

  • Make sure their health plans are compliant with the ACA. (Visit the U.S. Department of Labor)
  • Adjust their health insurance waiting period to be no more than 90 days.
  • Make sure that employer contributions to health insurance plans are equitable to all eligible employees.
  • Distribute notices to employees about the Health Insurance Marketplaces, or exchanges, by October 1, 2013. Open enrollment for private insurance through the marketplaces begins in October 2013 for coverage starting as early as January 1, 2014. The marketplaces were created to help companies and individuals comparison-shop for private insurance plans.


For businesses that don't offer a group plan, the government has created a model notice to be given employees, available for download here.

Even with the employer mandate deadline extended by 15 months, Thomas says employers with 50 or more full-time employees should start working toward mandate compliance sooner rather than later. They’ll need that time to find affordable coverage and to plan for their variable-hour work force. And key point to reiterate: firms with less than 50 workers are not subject to the employer mandate.


Disclaimer: Since the details of your situation are unique, you should always seek the services of a professional for advice specific to your business.

QAsharonarmstrong_Body.jpgby Robert Lerose.

 

Over this past summer, the unemployment rate has slowly been ticking down and, increasingly, employers seem to be in a hiring mode. But as small businesses restart the hiring process, the challenge to find qualified candidates will likely take up more of their time and energy. Where should small business owners look for new hires? How should they assess applicants? What skills are important today? Recently, business writer Robert Lerose spoke with Human Resources expert Sharon Armstrong, president of Sharon Armstrong and Associates, a Washington, D.C.-based career coaching firm and referral network. (Armstrong's report on how to master behavioral interviews100 Best Interview Questionsis available as a free PDF download.)

 

RL: What, if anything, is different about hiring today than before the recession?

SA: I think it's almost getting harder to do. Years ago, you just ran an ad in the newspaper and applicants mailed in a résumé or applied in person. But now, you're hearing from many more folks. So number one, there are more job hunters in the market. Number two, applicants have access to your job listings through the Internet, so you're being bombarded. It puts the onus of that search on the employer—where it always was—but you've got to be even more diligent. To make a successful hire, you want to do some pre-work.

 

RL: Could you elaborate?

SA: You want to make sure you have a clear understanding of the job you're filling and the skill sets you want. Make sure you have written or updated a job description to match that, and then think about the most cost-effective ways to get word out. Because there are so many people in the market, employers have the opportunity to be selective in their initial screening. 

 

RL: What are your thoughts about interviewing?

SA: Interviewing is a group sport. I think it's a good thing to have different people talk to applicants and then fill out some type of applicant evaluation form separately. Then come together to evaluate what they heard and reach some consensus as to who might be the best fit. I love that process.

 

QAsharonarmstrong_PQ.jpgRL: Tips for interviewing?
SA: You've got to prepare what I call targeted behavioral interview questions. Behavioral interviewing is an interviewing technique based on a principle that past performance is the best indicator of future success. So it's a way for interviewers to fashion questions that will draw out from individuals exactly what they've done, to prove that they'll be able to do that for you. The key—it's in my free PDF—is the four ways to start a good interview question that forces the interviewee to give you real examples. If the applicant can't, then they haven't prepared for that interview sufficiently, so they're probably not someone for you either.

 

RL: Are there some essential questions that should be asked?

SA: There are four questions that employers should ask in some form: Can you do the job? Are you going to fit in? Do you want the job? Can we afford you? So no matter what employers are actually asking, those are the things they need answers to. And you've got to be a good listener—that has not changed. Then get down to the business of interviewing people. That's where I think a lot of small businesses might need help. I'm not sure managers are as skilled in doing good interviewing. Big companies fall into this trap, too.

 

RL: How can a small business distinguish itself in the minds of job applicants?

SA: I think a small company needs to stress the benefits of working for their company—what sets their small business apart from others that are hiring for the same type of position. They've got to tell job seekers something that is going to excite them enough to contact their organization: the job requirements, what's expected of that applicant, but also why they might be an employer of choice. What are some interesting or unique benefits they might offer that a bigger company can't?

 

RL: Are there particular job search sites that you like?

SA: My favorite one is Indeed. It will give you pages and pages of jobs that it pulls from different sites. ZipRecruiter is another one. I'm going to make you laugh with one of them: Craigslist. Believe it or not, Craigslist is doing everything, and they are also in the job listing space. LinkedIn is a critical job search tool. I push all my clients to get on LinkedIn. From a small business point of view, they should be looking at that individual's LinkedIn profile. There are also some sites that you pay for, but I don't recommend them.

 

SBC newsletter logo.gifRL: Some unpaid interns recently made news by successfully suing their employer for wages. What advice would you give to a small business that is thinking about bringing on an intern?

SA: I would have them check out the FLSA—the Fair Labor Standards Act—at the Department of Labor. The other place I would recommend small businesses get familiar with is the Society for Human Resource Management, which can answer questions like that. But I'm always of the mind that you want to have a good labor lawyer in your pocket, no matter what size business you are. You might even have an outsourced HR person that you can tap.

 

RL: Final advice?

SA: All businesses—big or small—have to have a clear understanding of the job, they have to prepare the targeted behavioral interview questions, and they have to be good listeners. During the interview, their job is to objectively assess the applicant by describing the job and the work environment, positively and honestly. They ought to also want to create goodwill for their company, whether the applicant is hired or not. And lastly, once a candidate is hired, it's time to celebrate with them and orient them thoroughly and assimilate the new staff member. Give them all the tools they need to be successful.

 

This interview has been edited for length and clarity.

Culture-Fit_Body.jpgby Erin O’Donnell.


Finding employees that mesh well with your company’s culture is just as important as matching up a résumé to a job description–maybe even more so. Research shows that ignoring your culture can cost you, in real dollars, as it influences everything from people to profits.


Gallup, which has been surveying American businesses about employee engagement since 2000, defines engaged employees as “those who are involved in, enthusiastic about, and committed to their work and contribute to their organization in a positive manner.” In this biennial analysis, Gallup research has shown time and again that engagement leads to better productivity and profitability:


  • The top 25 percent of teams, the most engaged, had nearly 50 percent fewer accidents and 41 percent fewer defects in quality, compared to the bottom 25 percent surveyed.
  • Firms with an average of 9.3 engaged employees for every actively disengaged employee in 2010-2011 experienced 147 percent higher earnings per share compared with their competition in 2011-2012.
  • Companies with high engagement also tend to have lower healthcare costs.


But according to the organization’s 2012 analysis, 70 percent of American workers are not engaged or, worse, actively disengaged. And a bad hire can cost you. The U.S. Department of Labor says the average cost is nearly one-third of that worker’s first-year potential earnings—a $15,000 loss for an employee making $50,000 a year. It costs about $10,000 to replace a mid-level employee. About 49 percent of new hires quit within the first 18 months because of a poor culture fit, according to the Corporate Leadership Council.


Predicting engagement

Hiring managers and recruiters are turning more and more to technology and tools that claim to uncover a job candidate’s personality, teamwork traits, and leadership style, to name a few. They use surveys, role-playing, and mini-projects to gauge what lies beneath a skill set.


At Situation Interactive in Brooklyn, New York, job candidates are screened for signs that they’re adaptive and collaborative, traits that are embedded into the company’s core values. “If someone is not adept at change or needs a very structured environment, they’re not going to succeed here,” says Beth Taylor, human resources supervisor.


The digital marketing agency specializes in experiential brands, like Broadway shows and special events in Las Vegas. Launched in 2001, the agency now employs more than 50 people. Taylor says the firm gets high marks for employee satisfaction and enjoys low turnover because of a culture that values passion, risk-taking, and accountability. “When you’re a small agency, everyone is very visible about what they do,” she says. “You can’t hide behind mistakes or try to point your finger.”


Culture-Fit_PQ.jpgKnow your culture

Before you try to find employees that will fit within your culture, you’ve got to know what your culture is. Often, that’s easier said than done, which is why tools have emerged to help small business owners with the challenge.


Kelsey Conophy says most companies focus on their perks, benefits, and broad mission statements to identify their culture. But if you’re not asking employees about it, you’re not getting the true picture. That’s why she founded workZeit, an online tool designed to help companies zero in on their internal culture much like they would their own brand.


The workZeit metrics go beyond the old Myers-Briggs personality test, which catalogued and compared individual traits, such as extrovert vs. introvert or judging vs. perceiving. Using workZeit, you can measure complementary factors, such as how one new person changes the dynamic of a group. It starts with an online assessment of what they call the Cultural Fingerprint—a unique profile of work style, preferred work environment, and the process with which a group or individual works best.


The goal is to aggregate years of research by organizational psychologists and HR managers and deliver a more simple and manageable tool for hiring. “We’re enabling them to all speak the same language,” says Conophy, workZeit’s CEO.


Some of that research originated with behavioral scientist Dr. Janice Presser, CEO of the Gabriel Institute. Presser is the co-inventor of the Teamability metric, which uses a role-based approach to aptitude and predicting how people will perform in a group dynamic. People tend to fulfill the same roles whether they’re in a boardroom or a book club, Presser says, and each role benefits an organization in different ways. For example, the CEO may be a brilliant idea person, but she’s going to need a chief strategist to get things done.


If you have the right mix of roles, Presser says, you get a coherent organization. If not, chances are you wind up with a culture of high stress, which is essentially fear-based. Top-down, rigid companies like this don’t have what she calls a coherent human infrastructure. “Even if you’re in a tent, you want the walls to meet and be interdependent,” she explains. “When people are interdependent, they are supporting each other for the achievement of something bigger.”


Interviewing for fit

Once you have a grasp on your culture, or what you want it to become, you can improve your recruitment and interviewing process. Elizabeth Lions, author of Recession Proof Yourself, recommends benchmarking your best people before searching for coworkers to complement them. Who are your top performers? What are their traits, skills, and attitudes? When you know, you can look at resumes and ask interview questions that seek out good matches. “This gets the guessing game out of hiring,” Lions says.


SBC newsletter logo.gifAt King Retail Solutions in Eugene, Oregon, job candidates go on a bit of a test drive. Andrew Swedenborg, EVP for corporate development, is a fan of creating “working projects” for people who interview with the company, which designs retail spaces. Clients include major corporate brands like Safeway, Walgreens, and Starbucks. After a phone interview, the candidate gets a little homework—a task to complete in a couple of hours that simulates a challenge they might face in that position. It’s especially useful, Swedenborg says, with positions in accounting or marketing that don’t come with a built-in portfolio like designers do.


“The purpose isn't to use the end result, but to gain insight into their problem-solving approach, the quality of their work, and their overall thought process,” Swedenborg says. “Often, people abandon ship when asked to do this kind of project, and that's actually great. We want the go-getters.”


As culture evolves

Conophy says companies should continue to take their cultural temperature on a regular basis just as they would plot the ROI of a marketing campaign.


At Situation Interactive, where flexibility is highly prized, the company’s core values remain constant. But the culture conversation goes on. Human Resources supervisor Taylor says when she was hired, she assumed her role would be the conventional one: recruitment, payroll, and benefits. The company president had other ideas.


“He hired me to be the voice of the people, from more of a cultural standpoint,” Taylor says. “I think people need to start using HR in that way, to be the voice of the team, especially in a small agency. It changes what HR can do.”

MultipleLocations_Body.jpgby Robert Lerose.

 

When Hurricane Sandy hit the Northeast last year, thousands of businesses suffered devastating damages, prolonged power outages, and disrupted sales. Now, imagine a small business owner who operated at multiple locations, some far removed from the hurricane's path and you'll see an unexpected benefit from having several business locations.

 

Of course, avoiding a natural disaster is probably not the first reason that a small business owner would open secondary locations. But whether you set up in a distant geographical area or just across town, success in managing multiple sites ultimately comes down to formulating prudent strategies, installing competent people in leadership roles, communicating clearly and frequently with key team members, and tracking results.

 

Consistent procedures

Expanding your business provides many advantages, such as not starting from scratch. You can use some of your existing infrastructure and systems already in place for the satellite locations.

 

"If you open up another location, most likely you aren't going to have to duplicate everything that's in the company," says Tim Smith, principal of The Plaid Group, a Houston-based operations consultancy. "You could add sales by building on what you have without having to increase as much back office [support]."

 

Putting some standard operating procedures in place can result in a consistent, streamlined organization that delivers the same efficient response at each location. For example, Smith says, having a procedure for handling seven to ten core daily activities of the business is a great foundation.

 

Establishing measurable targets and making sure that every employee knows what the business owner expects is vital. "The person who is responsible for the second location needs to share the definition of what good performance looks like," Smith says. "It could be customer service, profitability, on-time performance—whatever criteria the owner uses to determine that the second location is doing well."

 

https://smallbusinessonlinecommunity.bankofamerica.com/servlet/JiveServlet/downloadImage/4542/Image-CTA-v2.1.gifSmall business owners must also stay in touch regularly with the teams in the branch locations. In one scenario that Smith was intimately involved with, the operations manager at an industrial distribution company has a conference call with the managers at all his locations every other week. On off weeks, the ops manager checks in with the branch managers individually. The calls serve multiple purposes: they announce initiatives that are underway, and they also allow managers the opportunity to talk about things that they might be wrestling with. "It creates collaboration," Smith explains. "The next time that a branch manager has a problem, they'll turn to their peers before they go to the owner to borrow his time."

 

This kind of collaboration and relationship building can lead to handsome payoffs. For example, Smith once worked with a company that was suffering because it had 15 locations, and each one had their own individual protocols. Smith got all the branch managers to hammer out consistent procedures for their core activities, document them, and train everyone uniformly across the company.

 

"One of the concrete benefits that came from that is we reduced inventory losses by 75 percent within two years," Smith says. "We also improved our relationship with our suppliers, because the accounting department now had proof that they received the product and could pay the invoice."

 

MultipleLocations_PQ.jpgPractice the basics

Besides a hedge against turbulent weather, having more than one location may increase your buying power.

 

"Since you're buying for multiple locations, you should be able to participate in some additional discounts from your vendors," says Bert Martinez, president of Bert Martinez Communications, who operates offices in both Houston and Phoenix.

 

In some instances, it may not be possible to come up with a mirror image of the main office in an outside location. "The mistake most people make is that they don't investigate the new area enough," Martinez says. "Opening up that second store needs to be treated like a brand new business—not like you're duplicating an existing business—because typically that new store has a new neighborhood and a new set of demographics. You might have to market that business slightly differently."

 

Still, like Smith, Martinez sees the big secret to success as having a documented system that can be replicated and taught to the key people in your workforce—then verified that they are using the system properly. For example, retail small business owners could send a secret shopper into a store location to see if sales members are following established selling procedures. Or, have a friend call a business site and take notes on the conversation to see how the in-office customer service team handles phone calls and other issues. Lastly, test your managers—literally.

 

"When you're having your weekly meeting, drop down a pop quiz," Martinez explains. "And be open-minded enough to know that you might have to make a system change. Little problems can be addressed and dovetailed right into the system."

 

Managers who depart from proven protocol on their own might be surprised at how fast things can turn sour. For example, Martinez was hired by a CBS affiliate in Los Angeles to improve the sales for one of their radio programs. After implementing a comprehensive new set of procedures, sales jumped from around $10,000 a month to $50,000 a month in only three months. But when Martinez did an audit of the program six months later, he discovered that the manager had begun to deviate from the system and to cancel the weekly meetings. Result: sales plummeted by almost half.

 

"Your results get better and better and better as long as you continue to get brilliant at the basics," Martinez says. "The system is responsible."

 

Trust others

On a personal level, small business owners also need to be honest with themselves and accept that they will have to trust others to oversee operations without their direct supervision.

 

"If you like to micromanage, then you're probably going to be frustrated," says Randy Moon, president of RMoon Consulting in the Dallas-Fort Worth area. "Don't be afraid to hire someone smarter than you or better than you in other ways. Combined, you can be a powerful team."

 

When Moon consults with a business about expanding, he does an assessment on the industry itself to see if there are other cases of stores that operate multi-site locations in the same niche. He also recommends that small business owners take full advantage of technology to stay in touch, whether in a video chat on Skype, or by cell phone or email. That said, it is critical that owners still show up regularly at their various locations.

 

"You have to make your presence known periodically, especially in certain types of labor intensive businesses where there are a lot of employees," Moon says. "They expect to see the owner. When the owner shows up or has lunch with the employees, it makes people feel that they're not out there on an island."

QAWeinschenk_Body.jpgby Erin McDermott.

 

Want to get something done? Well, stand up straight when you’re talking. Keep your hands with open palms at a 90-degree angle from the body with your fingers together. And here’s a bonus: Remember that you don’t just like chocolate—you are a chocolate eater. Those are a few of the clever, sometimes-subliminal tricks described in How to Get People to Do Stuff: Master the Art and Science of Persuasion and Motivation, a new book by behavioral psychologist Susan M. Weinschenk. The Psychology Today blogger and business consultant known as “The Brain Lady” has mined academic and scientific journals for the subtle psychology that helps people better communicate their wants and needs, and the art of slyly getting others—like employees and customers—to do what you want them to do via physical and verbal cues.

 

Among her strategies:

 

  • People unconsciously interpret and react to body positions in conversations. Face your colleague directly (it shows confidence), don’t tilt your head (an angle can convey submission), and keep your weight balanced on both feet (slouching undermines your authority).

 

  • When you’re talking to a group, keeping your palms open and at a 90-degree angle from the body with fingers together shows you have confidence and expertise about what you’re saying, Weinschenk says. But touching your face, hair, or neck makes you look nervous or tentative, as do hands grasped together in front of you.

 

  • When asking people to do stuff, use nouns rather than verbs. When you invoke a sense of belonging to a group, people are much more likely to comply with your request. For example, research shows that if people say: “I am a chocolate eater” versus “I eat chocolate a lot,” it affects the strength of their preference for chocolate. “Eater” is a noun. “Eat” is a verb.

 

How to Get is a great read for anyone trying to lead people. Writer Erin McDermott recently chatted with Weinschenk about the strategies she describes, adopting a “persona” to get things done, and how all of these behaviors can translate online.

 

EM: Is there one physical gesture or stance that you think is paramount for leaders to consciously think about? And one they should also avoid?

SW: It’s so hard to pick just one.  I think eye contact is critical, as well as a hand gesture for when they are sure of what they are saying. Men should avoid putting their hands folded in front of their body. Women should avoid tilting their head.

 

QAWeinschenk_PQ.jpgEM: I had a doctor tell me about his ‘doctor authoritative persona’ that he adopts on the job. How can a small business owner find that “voice” and stick to a persona, particularly if they’re not so authoritative outside of the office?  

SW: Some professions have certain types of influence ‘built in,’ for example, the doctor you mentioned. Doctors can easily use authority. But other professions may need to try a different method. You should use what comes naturally to you. You want to amplify your own persona so that it comes across as natural and sincere.

 

I had a client whose natural persona was very high-energy, and kind of funny and clever. He thought that to be a successful consultant he had to be very serious, calm, and authoritative. I convinced him to try being more himself, and showed him how to use his naturally high-energy level, sense of humor, and cleverness to be effective. I had him practice by answering questions and presenting on camera and then we would watch the videos together, so he could see what he was doing and what impression he was making.

 

EM:  How can you deal with someone who resists being “shaped”?

SW: If you are doing shaping correctly, there isn’t resistance. The key is to pick reinforcements that match the person—that are what the person really wants.

 

Image-CTA-v2.1[1].gifLet’s say I’m trying to get one of my employees to speak up at group meetings. He seems reluctant to do that, so what I do to shape the behavior is to “reward” him—offer reinforcement—when he looks like he is engaged in the conversation. If he’s looking down at his notes, I don’t reinforce that behavior, but if he looks attentively at the people talking, then I do offer reinforcement. But what should the reinforcement be for the first step of this shaping behavior? If he doesn't like speaking in front of the group, if he doesn't like being singled out, then calling on him, or calling attention to him might not be reinforcing. So I don’t want to say, ‘Kevin, you look like you have an idea. What do you think about this?’ Instead, I might decide that what Kevin really wants is to feel like he fits in and that others like him. Therefore, I might try just a small fleeting smile in his direction when I notice that he is actively engaged with eye contact with others. It’s subtle, but it’s an important difference.

 

EM: How can a teacher/manager learn to control their instincts, which may be to correct what an employee is doing wrong at each step of an instructional process? And if the mistakes continue, what’s the best way to address them so that it stops?

SW: Being a good teacher means applying the science. It means working on it over and over until the “right” behavior on your part is the new instinct. You have to train yourself before you can teach others.

 

Let’s say that a manager is constantly correcting each small step and you want them to wait and only correct after the task is completed. First, draw their attention to the fact that they are interrupting with constant feedback. They may not realize they are doing this. Then model for them—for example, with role play—how and when you want them to interrupt with feedback. Now practice in a simulated situation where they are giving feedback. Every time they do it “wrong,” ignore them. Every time they do it “right,” reinforce by letting them know they’ve done a good job. Keep track of their progress—to invoke the desire for mastery—until they are only interrupting at the correct intervals.

 

EM: You’ve also done a lot of work with user interfaces and design in the digital world. So one natural question arises from your book—how do you get people to engage with a small business online, whether it’s social media or a blog?

SW: Everything in the book can be applied to the digital world. Think about which of the seven motivational drivers will speak to your particular customers, and then decide how to use that driver. It’s different for each small business. For some small businesses, their customers will be most motivated by belonging to a group, and for others it might be that the desire for mastery is the strongest motivation. Do your homework and understand which of the seven drivers are the most important for your audience.

 

This interview has been edited for length and clarity.

PetsAtWork_Body.jpgby Heather Chaet.

 

You’ve heard it over and over again: office life today is much different than a generation or two ago. Jeans? Once forbidden, they are now perfectly acceptable to wear to a board meeting. Working from home? No longer frowned upon, but openly encouraged. And now added to the list of newly accepted practices—bringing your dog or cat to the office. But how do you know if your company should institute a Fido-friendly policy or be a pet-free workplace? We’ve detailed the pros and the cons of having furry friends curled up in the cubicles.

 

Pets = Productivity? 

Many large and extremely successful companies allow pets at work–Google, Amazon, Ben & Jerry’s to name a few—and they have research to support their pro-pet choice. Studies have shown that if Molly the beagle or Cindy the calico accompany workers to the office, they are more productive, efficient, and happier. Trupanion, a pet insurance company based in Seattle, Washington, has been pet-friendly since its beginnings in 1999 and currently, with 250 employees, has a one-to-three pet to employee ratio, one of the highest in the country. “We recognize the benefits every day of allowing pets in the workplace,” says Trupanion’s founder and CEO Darryl Rawlings. “When we need to take a minute to process our thoughts, our furry friends are right by our side for petting,” he explains. “When we're meeting a new co-worker, our pets help break the ice. And if we need to work late, we don't have to worry about rushing home to a lonely pet.”

 

Granted, for a pet insurance company, having an open doggie-door policy may seem an obvious choice. However, other small businesses not tied to the pet industry also encourage their employees to bring pets to the office for similar reasons. “A simple touch, a look of contentment, a break for a little playtime...all work toward a more laid-back atmosphere where creativity can flourish,” says Dick Grove, CEO of INK inc., a public relations firm based in Kansas City, Missouri.

 

Not For Everyone

Just because you don’t allow pets in your office doesn’t mean you are anti-pooch. Many small business owners love their pets but have found four-legged friends and their workspace just didn’t mix. “Having your dog hang around you all day while you're unavailable to give him/her the attention they deserve isn't really fair,” notes Gregory Ciotti, marketing director at Help Scout, a Boston-based email support software company. “It’s also unfair to assume that all of your co-workers are comfortable having your pet around all day, let alone the distractions they might cause.”

 

Although many companies cite an uptick in creativity and productivity when pets are around, Shreyans Parekh, director of business development and marketing for Koyal Wholesale, the world's largest wedding and event-supplies company, discovered the opposite. “We ran an experiment allowing dogs at work to lower stress levels and increase productivity,” says Parekh. “After four months, we eliminated it. Productivity, quarterly numbers, and error rates did not improve with the pets being present—in fact, [they] dropped during some weeks.”

 

Often, health concerns take priority over pet-friendly policies, especially when space is an issue. Self-proclaimed dog lover Kim Laudati owns two luxury beauty clinics, both of which are located in prime real estate areas of Manhattan. “At both locations, the subject of pet allergies is of great concern,” says Laudati. “I really wish that I had the square footage to have a dog sitting space so owners could bring their pets, but square footage is a premium in any big city, and much more so here in New York City.”

 

PetsAtWork_PQ.jpgBones of Thought to Chew On

No matter what you decide, guidelines regarding your pets in the workplace policy should be in place on the first day you start your business. If you keep your company animal-free, one or two lines stating that in the company handbook is fairly simple. However, allowing furry friends in the office requires detailed policy guidance to create an environment that is healthy and happy for both the pets and employees. Dr. Mallary Tytel, president and founder of Healthy Workplaces, LLC, works with small businesses to develop and sustain positive, productive, and successful work cultures. She says welcoming pets in the workplace is not for every business, but those that do need rules to ensure comfort and safety of both the employees and pets. “Most of the rules will be common sense, but paying serious attention to proper office etiquette is critical,” says Tytel.

 

What to outline in that pet policy? Everything from detailing the criteria on how animals are deemed acceptable to bring to the office to requiring up-to-date files on vaccinations and certificates for every pet that comes through your doors. “Communicate and enforce standards of behavior,” says Tytel, “One example is three accidents and you're out. [Also, be sure to] uphold a zero tolerance policy for any aggressive pets.” Tytel also suggests designating areas where pets do not go. “Identify and implement pet-free zones. These can include meeting areas, conference rooms, employee break rooms, cafeterias, and rest rooms,” she says.

 

Trupanion’s Rawlings agrees that implementing a finely tuned office policy is vital to reap the benefits of having pets at work. “We developed and tweaked our office pet rules to create a safe and productive environment for both employees and pets,” he says. “We have a designated Pet Team of employees, including those with veterinary clinic and pet care facility experience, who provide guidance and review incidents. Employees at Trupanion have a clear understanding of our office pet rules which apply equally to everyone from interns to executives.”

 

Though not as vital as that health insurance plan, definitive guidelines about pets in the workplace are key to the success of your company. And, remember, if furry friends are a no-go, yet you yearn for a pet in the workplace, there’s always Plan B: Bubbles, the beta fish.

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