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Posts Tagged ‘success’

How to avoid unprofitable & ineffective compensation plans

STOP burning your money!

First of all consider this question.. are you motivating your employees & sales people to drive the results your business actually needs (effective) or just to be busy (ineffective)?

  • Any equity MUST be
    • vested over a period of time (typically 2-4 years) just to be eligible, not just paid out
    • performance based in order to even qualify for vesting
    • time locked to ensure that you get the desired results within the time-frame your business needs them
    • allocated to someone who is actively contributing with effective & significant results
    • side note: always check to ensure ongoing rates
      • I’ve seen too many entrepreneurs or CEO’s give away up to 2 percentage points too much straight out of the starting blocks (!!)
  • Compensation packages must motivate individuals toward the objectives your company actually needs to achieve
    • is profitability important to your business model or stage of your company?
      • will you pay a commission or compensation just on a certain revenue achievement or must that revenue be profitable?
      • how profitable?
    • will you pay all commissions or compensation upon contract signature from your client or will you phase it to ensure better cash-flow?
      • 25% at contract signature?
      • 50% at invoice issued?
        • will you issue the invoice upon termination of service?
        • will you stagger the issuing of invoices to benefit your cash-flow?
        • will there be a warranty period on your invoicing schedule?
        • how will you reflect this in your commission payout?
      • 25% at invoice paid?
    • have different commission accelerators for activities that bring your company greater benefit
      • on products that you want to clear from stock or are strategic to your business needs
      • early, mid or late month, quarter, year if that’s when you want to bring in significant results
    • always “cap” your commission for “over-achievement”
      • motivate your staff to spread the consistent revenue income throughout the year
      • keep them hungry
    • always have a minimum achievement barrier for eligibility of a commission
      • typically 70-80% of budget becomes a trigger
        • i.e. only upon reaching 80% of achieving your sales do you qualify for 80% of your total commission and then incrementally onward
  • Objectives, goals & budgets must be S.M.A.R.T.
    • make plans clear and simple so that your staff is motivated to stretch themselves & achieve their objectives
    • instill milestones to ensure that you monitor the progression
    • create triggers / pulse checks for additional support, adjustment or facing the reality & consequences of short-falls
    • time lock the revenue targets

That last element is the simplest yet the most overlooked item of them all. I’ve seen too many passionate entrepreneurs & CEO’s set sales targets but then leave the window for achievement open.

Here’s a painful example of what can happen:

  • You’ve written into the gals contract that she’s to receive x% commission upon achieving x revenue.
  • You needed the revenue in Q1 and she hasn’t delivered, so you’ve invested in coaching & other resources to help out.
  • Q2 has gone by, then Q3 & finally in Q4 you decide to fire her for non-performance.
  • And guess what happens next?
  • The revenue you badly needed in Q1, Q2 & Q3 never came, but in Q4.. on the 3rd week of December.. a deal finally comes in.
  • Now mind you that you’ve had to lay-off valuable resources because the sales weren’t coming in.
  • If you’re an early-stage entrepreneur you’ve probably had to stop paying yourself along the way for the company to survive.
  • Your head is barely above water, and because you didn’t do your job by time-locking over what period of time the revenue needed to be generated, your gal is about to walk away with a commission check.
  • These are funds your company dearly needed just to stay afloat!

How are you feeling about your situation now?

How to UP your game to the next level

April 26, 2010 1 comment

Surround yourself with people who are smarter, better, faster & more resilient than you! Both in professional sports & business, when the competition gets tougher you inevitably get better!

How Competition Makes You Better, and Your Team Can Make You Great is a sporting example of how the undersized Bill Russell and his Boston Celtics improved their own game by playing against giants like Wilt Chamberlain. Chamberlain may have put up incredible numbers during the period in which the two went head to head, but Russell helped the Celtics hang nine NBA championship flags in the Garden in his first 10 seasons! Bill Russell later wrote: “To me, one of the most beautiful things to see is a group of men coordinating their efforts toward a common goal, alternately subordinating and asserting themselves to achieve real teamwork in action. I tried to do that, we all tried to do that, on the Celtics. I think we succeeded.”

Jane & Joe are a more practical example which will hit closer to home. For the past 4 years, I’ve seen their day-to-day activities result in consistent personal & professional stimulation & growth. Jane is a born entrepreneur, with her “nose to the grindstone” super positive attitude being the key behind much of her success. Joe is a corporate entrepreneur, vastly experienced in the BIG world of the corporate game, over the past years  focusing  more on bridging the two worlds of “corporates” & fast growth “start-ups”. Each night this couple share the inspiring ritual of debriefing their day, as they take turns sharing their “biggest wins, biggest challenges & key learning” from the day. During her discourse Jane will inevitably comment “you would have been proud of me today as I took a page right out of your book”, to which later you might her Joe say “when I was feeling a little lull today I thought of how driven you’ve been lately & it really kicked me in the pants to get me going”.

Both Jane & Joe are adamant believers in surrounding themselves with smarter, better, faster & tougher people than themselves. One of Jane’s favorite quotes is “the person you’ll become within 5 years will reflect the books you read & the people you’re surrounded by”, whilst Joe recently latched onto “there is little difference in people, but that little difference makes a BIG difference. The little difference is attitude, the BIG difference is whether it’s positive or negative”.

To the old saying “if you lie down with dogs you’ll get flees”, Tony Robbins can often be heard stating “most people’s lives are a direct reflection of the expectations of their peer group”.

Here are some key tips for taking your game to the next level:

  • Find online (blogs, forums, online social communities) & offline (gyms, book clubs, networking, seed camps) environments filled with people you admire and hang out there
  • Find a coach or mentor
  • Work with someone who pushes you
    • When you’re constantly asked to do things, yet don’t know how, it forces you to stretch
  • Read any and all material you can find that exemplifies the life you’d like to live
  • Compete against yourself first, and your opponent second!
    • Push yourself to be the best that you can be!

In closing, I’d like to leave you with the inspirational words of a fellow home-town hero Will Smith who bucked the odds & made it beyond anyone’s wildest dreams.. except his!

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How to build scalability into any organization

In a January 23rd post earlier this year, I briefly mentioned the Horizon 1-2-3 framework originally developed by Mehrdad Baghai, Stephen Coley, and David White, who authored The Alchemy of Growth: Practical Insights for Building the Enduring Enterprise. In it they established a view that companies that are successful in the long term have growth initiatives in three stages. Subsequently, many consulting organizations worldwide have used dozens of frameworks over the years to analyze the trends which impede their clients’ ability to grow.

Allow me to summarize for you what I’ve been seeing as the #1 culprit for limiting the growth of organizations worldwide.

Premise; The H1-2-3 framework is built around the point of view that to sustain growth, a company must maintain a continuous pipeline of business-building initiatives. Companies considered sustainable & scalable are characterized by their ability to create new business opportunities by innovating from within their core business ares whilst building new off-shoots at the same time.

Challenge; With the limited resources that the majority of modern-day companies face today, where can you find the time, resources & funding to innovate?

Solution; Identify within your organization who’s ready to operate at each Horizon, and then stimulate their development by holding them accountable.

  • (H1) is the work resulting in more consistently effecting change through improving and extending present operations (routines and habits)
    • Who in your organization is working at this day-to-day level?
      • Are they the right people / profile?
    • What monthly gatherings are you promoting to review & improve on the recently past activities?
      • How do (what proof are you collecting) these gatherings benefit your future activities, both immediate & mid-term?
  • (H2) is empowering the team to ask themselves how their daily/weekly activities & focus facilitate the creation of new opportunities
    • Who in your team is ready to step-up to the next level?
    • What weekly questioning and periodic structured pulse checks are you committed to?
    • How are you fostering increased risk taking & the capability of the team in dealing with a greater degree of uncertainty & adversity?
  • (H3) is where futures must be imagined, researched and developed.
    • Who in your organization is passionate & skilled at seeding options today for the future?
    • What is the required business acumen for understanding the related research, pilot projects, proof of concepts, etc you’ll need to succeed & innovate?
    • How are you going to measure the practical implementation of the same, both immediately & on a continual basis?

Results; A client of mine is currently putting this model into effective use. The Managing Director is a visionary and he needed to break himself away from the daily routines that were keeping him from affecting the broader & longer term results of his organization. Last year he asked one of his next-line management to step-up & shadow his responsibilities. After one quarter, this 1st line executive had gained deeper knowledge & understanding of what it took to “play at the next level”.

Having also experienced professional growth & personal development, he was tasked to find someone one level down & do the same exercise. At the same time he was sharing with his immediate management colleagues the direct & indirect benefits of this experience. Each quarter the Managing Director rotated his direct reports through this process. Whilst he gradually freed himself to a level at which he significantly impacted the broader scope he desired, this exercise permeated throughout the organization giving more voice to many more layers of management & personnel in general.

Whether you’re staffing levels are 5, 10, 50, 100 or 1,000, what can you learn from this exercise? What are you holding onto that you should let go of? Who’s growth are you debilitating by continuing to carry on the way you do today?

Surviving a resource crisis – Getting past “overwhelmed”

Last week I ran into an entrepreneur who was clearly on edge! For the sake of confidentiality, let’s call her “Jane”, who is typically a burst of energy & sunlight whenever she walks into a room. Concerned over her current state, I asked what I could do to help.

Jane replied that she was just over-tasked! She has recently lost some key members of staff and until they got replaced it’ was going to be long uphill climb. 😦

I delved deeper and asked her to recount her day, especially the parts she found most stressful.

  • Just moved into a new office & a lot of unpacking to do
  • 3h meeting with a key investor who’s helping on a part-time basis to re-align / re-prioritize the product strategy
  • Detailed account management & work-plan hand-over from exiting staff
    • distributed amongst early, mid & late stage opportunities
  • 3-4 phone calls with prospective new accounts
  • 2-3 phone calls with existing accounts
    • early, mid & late stage
      • 45m to 1h each
  • 1h phone call with key board member & investor
    • followed by 1h brainstorming session to come up with 4 alternatives for a new client
  • Planning & booking next weeks day-trip abroad for fund raising
  • 1h phone call with a prospective Technology Partner
  • 60 new e-mails
    • 30 were of which addressed
  • Follow-up on meetings from the previous week
  • Scheduling interviews for new staff

As she took a deep breath, I said “so in others words.. you had a pretty busy day.. eh?” 😉 I needed to break the tension in the air after her intense recount of her 12 hours that had just passed!

Fast-forward to the solutions we came up with:

  • Let’s start off with the fact that to Jane’s benefit, she walks to work (about 30 minutes each way)
    • Giving her time to decompress & put things into perspective
      • ACTION; It’s already a great practice! You might want to take along a tape recorder to document your thoughts for later action
        • HINT; Once you’ve addressed something, regardless of how daunting the task, you automatically reduce the stress associated with it.
        • When you write something down, like an action plan, it’s emotionally relieving.
  • Upon inquiring about her energy levels during the day, we came to the conclusion the 3h intense product meeting took place early in the day when her energy was still low
    • Jane is typically a late morning / early afternoon person and therefore this intense “brain zapper” early in the morning had conditioned the rest of her day
      • ACTION; Monitor this situation 2 more times & if the affect is the same, reschedule these types of activities for later in the day
  • The 3-4 Account calls, along with the account management / work-plan hand-over process was made extra draining as early, mid & late stage situations were all addressed at the same time
    • Like-minded tasks require less energy to process, and the thought / solution process required to address all three stages made it that much more difficult to cope with the mounting challenges of the day
      • ACTION; Whenever possible, group like-minded activities to facilitate  your execution of the same
        • HINT; take one stage in the morning, another stage around mid-day & the 3rd stage late in the afternoon
          • By grouping your activities, you get your brain into “auto-pilot” and become more effective due to the “repetitive assimilation / thought process”
          • Group phone calls: block out a 2-3h patch of time if necessary, but try not to spread phones call through the day
          • Group inter-personal activities: performance reviews, business meetings, business / non-business lunches
          • Group meetings that require travel: don’t fly off to Paris for the day & only one meeting, try to fill the day with prospecting activities if no further meetings are possible
            • just like you shouldn’t book meetings all over town unless there is a favorable pattern , like starting from home & ending in-town where you’ll have dinner
  • Schedule your e-mail time & action them immediately!!!
    • This has been my personal biggest learning over the course of the last few years!!
      • ACTION; Turn off the “automated push” in your e-mail & manually retrieve it when you’re ready to deal with it
      • Likewise, turn off all pop-ups & alarms, especially Skype or Instant Messagers
        • HINT; Don’t allow e-mail to follow you on your mobile phone! Personally, I only access e-mail on my iPhone when I have “time to kill”, which is rare, and even then I focus mainly on my personal e-mails
          • Educate your clients & colleagues as to the hours you check e-mail and in case of an emergency have them sms you with the header of the e-mail you need to action
            • discipline yourself to only view & action those limited emergency e-mails
          • Time-lock your e-mail viewing!
            • I review my e-mail twice per day at 10h00 & 17h00 for 1h block each time
          • Action your e-mails on-the-spot, or schedule time in your calendar to carry out the respective action if you first need to research / investigate of have someone get back to you with more details
        • HINT; Block out your calender for “to-do’s”!!
          • Unless you “make / reserve time” to do something, the likelihood is that it won’t get done!
            • STOP (!!) using “to-do” lists
          • Make sure you build rest / compensation blocks into your daily calendar
          • 5-10 minute window for unwinding / regrouping
          • 10-15 minute window in-between meetings when travel is not required
          • 15-30 minute window in-between meetings when travel is required

The next morning I got an sms from Jane, thanking me for our conversation! She had taken a lot of the key-points on-board, and even though the day was busier than before, Jane was having a very powerful & rewarding day!! 🙂

These actions will make the difference between you being able to manage your energy & time, when the same is limited. Time & energy, just like money & people are “resources”. You have to carefully plan & adjust the resources you have if you’re to use them at optimum levels. In this fashion, you’ll more easily be able to distinguish between urgent & important, thus you’ll get the right things done right at the right time!

Sacrifices in Business – Having your cake & eating it too!

I love the quote “every point of refuge has it’s price“. Another one that rings true is “nothing comes for free“.

No where is this more evident than in the world of fast growth business!

What have you had to sacrifice lately? Has it been your percentage of dedication to life or work? How many people do you know that work 8h or less? How many people do you know that are conscious of the true sacrifices they are making each and every day?

This article is more than just about time, energy or strategy management, it’s a “wake-up call” to anyone who thinks that any success comes easy!

It takes courage, moments of truth & at times allot of blind faith to take the necessary measures required to achieve the success you desire. Most of all, along the way, it takes allot of personal sacrifice to make your professional career eventuate into part of the formula which equals “work-life balance”.

A client & I were speaking last week when he shared with me the incredible amount of pressure that he’s under at work. He continued to share how he has recently tried to delegate to his next immediate level of management, hoping to help them grow. Upon reviewing his results, he was astonished at how he was able to deal with so many diverse situations within his workplace. His area is one of the most intense work environments of his entire global organization, and still they provide solid & leading results day-in day-out.

None of this surprised me! From the first time we started our Executive Coaching relationship, I had noted how stringent he was on his work-life balance. For the sake of confidentiality, let’s call him “Joe”, and he can celebrate his balance today because he prepared, trained & practiced for it. Most of all, he paid his dues earlier on & sacrificed when he needed to!

You don’t just wake up one day & have a balanced life! It takes hard work, sacrifices, dedication & lots of practice!

Today he typically splits his time working from home & office. He takes every opportunity to enjoy long weekends with his family. He has a ground rule not to mix work with pleasure on weekends, or after a certain hour of the day. He’s conscious that time is precious and that his young boy will quickly become a young man before the blink of an eye, and so he prioritizes his intensity very carefully. As we discovered, it’s all about energy management!

As an outside observer I had noticed that just like a body builder who rests certain muscles masses in-between workouts to witness effective growth, Joe was resting his brain and giving it different stimuli by engaging in non work related activities on the weekend. By not using the “work” part of the brain over the course of 2-3 days, it enables him to be that much more sharper Monday through Friday. It enables Joe to get allot more done in less time than before.

But it wasn’t always like this! Joe is the exception to the rule, and he has also “been at it” for the greater part of the last 15 years! It takes personal and or professional sacrifice to become really successful at something.

As evidence, I give you Malcom Gladwell’s CNN interview regarding his book Outliers, he briefly touches on the concept of the “10.000 Hour Rule”. I especially love his other interview comparison with The Beatles.

To put this into perspective, 10.000 hours of “practice” is the equivalent to

  • approximately 417 days (or 1.14 years) if you didn’t sleep at all
  • 625 days (or approximately 1.71 years) if you slept for 8 hours & dedicated the remaining 16h to a single task
  • 1.250 days (or approximately 3.42 years) if you only dedicated 8 hours to a single task

In comparison, how much time are you dedicating to what you want to be really good at?

People on many levels of an organization want their cake & eat it too, but contrary to Joe, they aren’t willing to make the necessary sacrifices!

There’s the entrepreneur who makes personal sacrifices on multiple levels just to keep his dream alive, running his start-up “on the smell of an oily rag“. It’s been a hard road but he’s within reach of his dream now!

There was the fast-climbing corporate executive that didn’t have time for a relationship because of the intensity of their business. Any wonder why they’re still “home alone” & without a life-partner at this stage?

Then there’s that guy who felt it necessary to hangout with his friends until the wee hours of the morning having a few beers & exchanging tall tales. Any wonder he typically didn’t get up to speed until noontime at work the next morning? Any wonder why his moments of brilliance were just that, limited to “moments”, even though what was required was more consistency? There are even more countless tales of people who “had the potential but just never materialized it consistently“. It all takes it’s tole and requires a delicate balance if you’re to have your cake & eat it too.

So where can you start?

  • Visualize the life or objective (professional & personal) that you want in 2-3 years (i.e. success.. “your cake”)
    • Make it really visual, to the point where you can smell, taste & almost touch your visualization
      • Quick Tip; Fill it with as many facts & details as possible
  • Visualize your current “reality”
    • If this is going to work, you’ll have to be brutally honest with yourself
      • Quick Tip; This will be the last time you “focus” on your “reality”
        • Focus on your objective, raising your reality toward it instead of focusing on your reality which will only downsize your objective
        • Remember that your reality is merely the accumulation or consequences of your past actions in life, and whilst it might influence the speed at which you can break free of your reality, it does not condition the achievement of your objective
  • Determine “what” is required to bridge your current reality to your visual image of success
    • If you can’t figure this out, get help form someone your trust
      • Quick Tip; Do an inventory and address it
        • There are only two things that stand in your way of success
          1. Limiting beliefs (in yourself or another)
          2. Lack of a strategy
  • Set a time-line to acquire the skills, network or resources you require to achieve your objective
    • Determine “what” activities you’re willing to sacrifice or give-up completely during this period to achieve your success
      • Quick Tip; What is non-negotiable?
  • Now set-up a discipline for yourself to measure your progress along the way
    • Make time in your calendar for reflection on your daily, weekly, monthly progress & make the necessary adjustments
      • Quick Tip; What isn’t measured doesn’t get done!

If you follow these basic guidelines, work hard at them and realize that there are NO SHORTCUTS (!!!), than I guarantee you too can have your cake & eat it too. I can also promise you it won’t be an easy journey! Why? Because “every point of refuge has it’s price“.

A Social Contract – Why you won’t survive without one?

When was the last time you found yourself all alone.. in a dangerous dark alley.. and on the wrong side of town?

You’ve been strolling down a beautiful path of endless optimism, hope and opportunity. Suddenly you realize something has just drastically changed! You’ve made a sudden wrong turn and now find yourself, with the exception of the “thugs”  that intend to provoke physical and emotional harm, all alone in an obviously dangerous place!

What do you do? Who’s got your back? Who’s going to help you get out of the predicament you’ve just found yourself in? Who’s going to stand with you and deal with what’s to come?

Does this sound like a scary scenario? Unfortunately it’s all too frequent!

Let me take you back a few weeks when I had the privilege to be amongst illustrious fellow mentors at the Barcelona mini-seed camp. The night before, as I looked over the agenda, my excitement peaked when I realized that I would be in close quarters with the “legendary” Fred Destin of Atlas Venture. “Legendary” you ask?!?! Well, anytime highly successful entrepreneurs refer to a VC as someone they hold in high regard and respect, first my eyes open wide, then my ears perk up and finally I sit at attention ready to listen!

The very next day this reputation was cemented based on Fred’s shared view of “Social Contracts”. In turn I redefined how I viewed this critical catalyst for success. What I would later read in Fred’s blog couldn’t have prepared me for the wild and wacky, sometimes borderline ethical, tales of business dealings that go on between entrepreneurs and VC’s.

A few days later, Fred agreed to a Skype call, generously shared his perspective on Social Contracts, and here’s what I came away with:

  • A Social Contract is an “understanding” or gentleman’s agreement between two parties
    • To be effective, it supersedes the required legal contracts that govern a relationship
  • A Social Contract is bound by honor, integrity and will become most relevant during critical “moments of truth” yet to come
    • It will get all parties safely through the tough times and hard decisions that are guaranteed in any venture
  • You establish a Social Contract based on a firm hand-shake, a confident stare into the white of the eyes and a mutual respect that you’re both in this journey for the “long-haul”
    • It’s two “human beings” coming together to form an “enterprise”
    • It’s a relationship where either party recognizes the requirement to stand-up against pressure that is sure to come from business and likely life partners, as the journey get’s complicated and the waters become muddied
  • A Social Contract isn’t something entered into lightly and often needs to be the preceded by a multi-hour brainstorming session to guarantee the like-minded intentions of both parties
    • It’s the basis of how you’re about to govern your relationship whilst executing on an agreed 12 to 18 month business plan
    • It has little to do with the financial plan and more to do with the necessary “pivoting of strategy” that is sure to come
  • It’s an investment into the long-term strategy and is based more on the soft assets that are critical in a “moment of truth” vs. the hard assets that traditionally formulate a Business Plan

Our conversation reinforced the practical nature of “working agreements” that I’ve always felt are necessary for any engagement. I take relationships very seriously and just as I would expect my “friends” (vs. acquaintances) to never leave me stranded in an unfortunate circumstance, regardless of who’s at fault for getting us into the mess, I also expect my Social Contract counterpart to stand-up and fight with me regardless of the danger we’re about to face.

Practical Experience

1- The Entrepreneur and their Partner; In similar situations, within the past 12 months I can recount two separate entrepreneurs that “were left hanging” when their supposed partners “parked-it” and quit on them in the midst of the most significant challenges the venture was experiencing. In both cases the entrepreneur was at fault for getting themselves into trouble, more based on inexperience than reckless abandon, yet the partner “checked-out” and left them “hanging in the lurch”. They tried to make it about who’s right or wrong, over-looking that they were both, along with other investors, about to loose their shirts! Fortunately, the entrepreneurs’ resilience, along with a strong network of friends and allies helped pick themselves up by the boot-straps and out of immediate danger.

Both entrepreneurs paid a significant and costly price by either missing time-to-market or suffering a significant devaluation in equity, but most importantly, they learned a crucial lesson in Social Contracts.

2- The Employer and their Employee; Recently I’ve seen the same thing happen in three separate organizations with Senior Executives. This is yet another reason I identified so strongly with the core concept of Fred’s Social Contract. Too often the employee/employer relationship hasn’t been tested under difficult circumstances and when the moment of truth finally comes, especially in a critical situation such as a start-up or hyper-growth environment, the “paid/contracted resource” isn’t up to the task of facing the required adversity! Rather than having the courage to support their leader, or quit outright, they “park-it”, leaving their leader and their company “out-to-dry”. Later, they move onto another company, never taking full responsibility  to the true consequences of their actions, or lack there of.

I always share with employers that often it’s more important to know what NOT to count on than assume what you believe you can count on. Unless the relationship has been tried and tested under adverse conditions, you’re better planning off for, and expecting the worst, whilst hoping for the best.

3- The Friend and the Bar Room Brawl; Several years back, I’d like to think it were only a few ;-), when I was still living in Philadelphia and a few years “younger and innocent”, I was hanging out on South Street in South Philadelphia with 4 “close” friends. We had entered an outside bar that was protected from the street walking traffic by 2 meter high iron gates. In essence, no easy way out! We had all had a few drinks however one particular friend had too much to drink when he decided to cause trouble.  I bet you can imagine what happened next. First I tried to refrain him from being an absolute idiot, but he insisted. Then I tried to mediate the situation before it was 6 against 2! 6 guys staring me and my mate down. Where were my other two friends? They had “checked-out” and left the bar as soon as they saw we were out-numbered and headed for trouble. Later they justified that they hadn’t started the trouble so therefore they shouldn’t have to “face the music”.

The end result were some broken chairs, broken tables and my friend and I were barred from South Street for the next 6 months by the Philadelphia Police Department. We walked away with a little more humility and a few bumps and bruises to show for our stupidity. I slapped my mate over the head and promised to kick him in the pants if he ever did that again! The relevant fact was, I didn’t leave his side, neither would he have left mine. See, we had a bond stronger than words or any legal agreement! We had a Social Contract that we had entered into a few years before, which was to stand-by each other, be the times good or bad, regardless of who stuffed-up. Much like how most marriages are supposed to work! 😉

My closing questions to you are;

  • How secure is your Social Contract with the partners you have in your business or life?
    • Have you faced any moments of truth lately?
      • How did your partners stand-up in the face of adversity, regardless of who was to blame for the mess you found yourselves in?
    • What lessons can you take from that situation?

Reducing your Employee Churn/Burn Rate & Getting Results

What is the most value asset you have in your company? You shouldn’t have to think too hard! It’s the people that execute on your strategy.

So why do you always seem to be “the last man left standing” in your organization?

I’ll share with you the answer, followed by two key lessons & one practical example/result as to the “why” of so many company’s having challenges in retaining staff these days. An especially complex issue to understand, given the current economical crisis, is the unemployment rates around the world are still incredibly high.

The Answer is that we, as leaders, typically do a very poor job of recruitment, induction, ongoing management & assessment of our most valuable assets. And the general root cause is through poor communication and lack of courage!

Personally, even though sometimes hard to swallow, I firmly believe in the 90/10 rule, which states that if one of your staff isn’t working out, it’s 90% YOUR fault.. & only 10% theirs!

Do you think I’m being harsh, unfair & unrealistic? Well, consider this.. who’s in the drivers seat?

  • Who (ultimately) did, or approved the hiring?
  • How clear were you in defining and communicating the Mission & Vision of the company?
    • Did you receive acknowledgment, or other form of undeniable proof that you were clearly understood?
  • How clear were you in defining the role to be fulfilled & the specific outcomes to be expected of the role?
    • Key words being “role & specific outcome”.. forget job description!
  • How clear were you in communicating the behaviors you expected whilst your team executed on your plan?
    • How did you manage the first signs of lack in performance or alignment with your vision, message and/or expectations?
  • How often did you sit down to agree S.M.A.R.T. objectives/goals?
    • How frequently did you follow-up to make necessary adjustments?
    • How quickly did you put someone on a performance plan when they didn’t deliver on what was agreed?
  • How much planning & thought went into the induction, education/training, mentoring or skills acquisition process the individual needed to succeed?
    • How much coaching or mentoring did you consider to be required from yourself, or senior/more experienced staff?
  • How quickly, and how brave were YOU in having “the difficult & uncomfortable conversations”?
    • Are you paying & rewarding your staff to perform?
      • Are you doing the opposite?
      • How are you motivating/encouraging non-performance/conformance?

I could go on & on.. but I think you get the point! It’s YOUR company, YOUR department or YOUR team, and therefore YOU are the ultimate responsible person for the outcome/output of everyone’s role. If things aren’t working out then look inward before you look outward, and once you’ve completed this assignment take responsibility to make the immediate & necessary adjustments.

Lesson #1

  • Be crystal clear on Your Vision & communicate it… communicate it… communicate it…
    • Who needs to do What, How & by When?
      • This requires acknowledgment & buy-in, however remember you’re the boss (90% responsibility), so make sure that “your team” buys into “your plan”, even if you need their help in constructing it, and not the opposite!
    • Where do you want your company, area or department to be?
    • When do you expect specific results?
      • When do you expect escalations when things are in danger, or aren’t going according to plan?
    • How do you want (expect) your employees to behave, handle themselves and handle adversity (which is sure to come)?
      • What are the rules of engagement?
    • What are the boundaries & non-boundaries that you expect people to respect & understand?
      • What are the focus areas they’re supposed to be focused on in order to achieve success?
  • Be crystal clear on Your Mission… & communicate it… communicate it… communicate it…
    • Why do you want your people to behave in a certain manner?
    • Why do you need your people to achieve certain results?
    • Why do you require specific results within specific time frames?
    • Why is the company in business to begin with?

I’ve embedded the Core Values, which are the “behaviors” or “rules for the road” within the context of the Who, What, Where, When, Why & How above. That, in short, is your Core Ideology!

Lesson #2

The next biggest lesson you might have to learn, is regarding COURAGE. Courage to stand-up to the “know-it all’s” who’ve never run an enterprise but have every theory in the book as to how your organization should run! I find these days far too many companies have “grayed the line” between “boss & employee” and between responsible for direction & responsible for execution. If you’re going to take 90% responsibility for the failure of an organization, you need to get straight, and clearly understand, who’s “experienced” and better still “paid to run the show”.

In order to deliver on the above, you need the right skill-set that’s for sure, and you also need to have the backbone to “listen first” and “act accordingly second”. Acknowledging someone’s perspective and giving them voice doesn’t mean that you have to take their advice or recommendations over your own experienced opinion or gut instinct/intuition. It only makes you more responsible and accountable to the eventual decisions you make.

Once you’ve guaranteed success, then you can stand back, be humble and allow your team to bask in the glory of having executed excellently on a plan. Take 90% of the responsibility, give 90% of the credit and you’ll have an effective & motivated team!

I’ve spent hours-upon-hours giving practical workshops to MBA students who have paid a pretty penny to gain a highly valuable education, just like I’ve spent hours-upon-hours with both managers and employees who’ve read the latest books containing magical and earth moving experiences. What I always share with them is that “now you have the logic, it’s time to go out into the real world to implement and execute”.

The execution of an idea is always more important than the brilliance of a thought, or even a strategy. A brilliant thought without effective execution is merely an illusion. A brilliant strategy, without effective execution, is merely a waste of everyone’s energy & time.

Practical Example/Result

I recently walked into an assignment that demanded many changes in a short period of time. Multiple colleagues had just been fired for non performance and conformance. I was walking into an understandably hostile environment!

I stood in front of a room and shared my “what” followed by my “why”. Then came my “how”, where I told them that I only expected  1/2 (!?!?) of the output, dedication and commitment that I was willing to put in myself! However, I also advised them that I typically give 300% to every assignment!!

I explained that I would give them 48 hours to go through the grieving process of having lost their colleagues, followed by 15 days to be at 80% or better, and showing signs they would be at 150% by day 30.

I committed myself to complete transparency & communication, just as I would to holding them as accountable (where & when) as I would hold myself. I shared with them that there would be 2 day, 15 day & 30 day milestones, at which time I would have conversations with non-performers & either implement a performance plan or retire them. I would also make it a regular habit to commend the good performances along the way.

I shared with them that in a 24 hour weekday, I’m hoping you have 8 hours of sleep, and I’ll guarantee you that more than 50% of the remaining 16h will be based on, or thinking about, “work”. Therefore, if you’re going to dedicate more than 50% of your “awake” time to “work” during a 5 day work week rather than to your loved ones & special interests, it’s absolute lunacy to work in a place where you’re not motivated and inspired. As a consequence, if I ask you or if you decide to leave, then we’re only doing each other a favor based on a general concern & well-being for all.

Result

One person left within 48 hours, a few more within the first 15 days, then a few more within the next 15 days. Along the way change happened, a pride which previously didn’t exist filled the department! Results, followed by customer satisfaction, started to sparkle where it didn’t exist before. THEY, the last ones standing, did all of the work. I merely gave them direction and the opportunity to be everything I already knew they could be.