Saturday, November 27, 2010

A Winning Business Keeps the Team Highly Engaged

By David Shedd

Is your team fully engaged to give their best, day in and day out? In a recent study by TowersWatson, an international HR consulting firm, fewer than 21% of employees surveyed described themselves as “highly engaged,” down from 31% in 2009. 8% admitted to being fully disengaged. Having only one-fifth of your employees highly engaged is not the hallmark of a “Winning Business.”

Other studies show that employee engagement derives from three important factors:

  1. Alignment of the employee with the goals and vision of the company.
  2. Faith of the employee in the competence of management and their commitment to realize the goals and vision.
  3. Trust in their direct supervisor that he or she will support his or her people and help them to succeed.

It has often been said that employees rarely quit companies. Instead, employees quit their managers or supervisors by leaving the company. Mark Herbert, a consultant focused on engagement, says: “Engagement lives and dies on the front line of your business.”

Increasing positive managerial behavior and reducing negative managerial behavior will go a long way towards improving employee engagement. When your talented employees are engaged, they are able to perform spectacularly and build and improve your winning business.

Here I offer a short list of “do’s and don’ts” to get managers and supervisors started in focusing on ways to improve engagement (and to be better managers). The list is not exhaustive. I welcome additional thoughts and ideas from you. First are the don’ts:

  • Don’t get angry. “Getting angry is easy. Anyone can do that. But getting angry in the right way in the right amount at the right time, now that is hard.” (Mark Twain) Anger does not belong in your managerial kit bag.
  • Don’t be cold, distant, rude, unfriendly. Especially in difficult times, employees take cues from their immediate supervisors and need to hear from them. As such, your team will judge you by your action, moods, and behaviors, not by your intent.
  • Don’t send mixed messages to your employees so that they never know where you stand. Keep your message simple, focused and prioritized. Too many messages and initiatives just confuse and alienate people.
  • Don’t BS your team. This includes saying things that you don’t believe in. This includes hiding information and just plain lying. By the time each of us is in our early 20′s, we have all developed very well-tuned BS detectors.
  • Don’t act more concerned about your own welfare than anything else. Your success will come through the success of your team. “Self-serving detectors” are also very well-tuned in most employees.
  • Don’t avoid taking responsibility for your actions. You are the boss. As such, you are accountable and the buck stops with you. You are trying to develop accountability throughout your company. So, lead by example.
  • Don’t jump to conclusions without checking your facts first. A few years ago, I watched in horror as a colleague of mine started screaming at an employee of his who had missed an important meeting that morning. After several minutes, the employee responded: “I apologize and should have contacted you. But, I just got back from the hospital as my mother has been diagnosed with terminal cancer.”

Here are the do’s, which are even more important than the don’ts:

  • Do what you say you are going to do when you are going to do it. There is no better way to communicate the message that you are accountable for your promises and that everyone in your company should be accountable as well.
  • Do be responsive (return phone calls, emails). As a manager, your team can be considered to be your customer. You want your sales team to punctually respond back to customer requests, so you should do the same.
  • Do publicly support your people. Your disagreements and disappointment with your employees can be communicated later and in private. Nothing appears so hollow as your attempt to blame your team for failures.
  • Do admit your mistakes and take the blame for failures.
  • Do recognize your team. “You can never underestimate the power of simple recognition for a job well done.”
  • Do ask and listen. “The manager of the future will know how to ask rather than how to tell.” (Peter Drucker) Some of the most dangerous words for a manager to ever say include: “But, you just don’t understand…” “Because I said so…”
  • Do smile and laugh. Have some fun. But, be genuine; programmed fun and faked laughter is worse than doing nothing. When appropriate, laugh at yourself; it will humanize you.

Employee engagement is a pre-requisite for a winning business. By addressing the actions and behaviors or the managers and supervisors throughout your organization, business leaders can go a long way to enhancing the dedication, commitment, and engagement of their most important asset: their good people.

###

Today’s blog is presented by my friend David Shedd, now living in Phoenix, Arizona, who is an experienced corporate executive, and a consultant specializing in winning B2B leadership. See more articles by him at http://davidsheddblog.com or contact him directly at davidshedd@cox.net.


Share/Bookmark

Saturday, November 20, 2010

Making the Transition from Entrepreneur to ‘Boss’

By Mark F. Herbert

Making the transition from individual contributor to manager, or entrepreneur to “corporate” executive, is one of the most difficult shifts most of us will face in our careers. A study conducted by a national management consulting firm a few years back indicated that more than 40% of newly appointed managers fail in their first 18 months on the job!

As a consultant working with many entrepreneurs attempting to grow their businesses either for continuity purposes or for sale I see them experience many of the same issues.

In many cases these issues boil down to developing and maintaining effective relationships.Our educational system has a bias towards “technical” skills and individual achievement. Winning means getting the best grades and “setting the curve” as an individual.

Here are some of the most common mistakes I have observed in “new” managers:

  1. They fail the “politics quiz.” Organizational politics are a fact of life. Don’t sacrifice key relationships because a colleague or subordinate has a talent for getting face time.

  2. Don’t try to “clone” yourself. Of course you’re brilliant, that’s why you were promoted. However, good management is getting the best out of the staff you have. Improving employee performance is a process not an event.

  3. Failing to communicate. You avoid giving feedback because you are sensitive to past relationships. People desperately need and desire good, balanced feedback.

  4. The Sprint. Don’t try to accomplish everything on day one to validate management’s decision. Learn your staff and their capabilities. All priorities aren’t equal.

  5. Trying to be Dr. Feelgood. Everybody wants something and it’s hard to say no. Special, confidential deals never stay that way. Your job is to be the boss, not their friend.

  6. You’ve arrived. Management is a continuing improvement and learning process. Seek out opportunities to improve your skills and refine them.

  7. You’re the star. It is very tempting to fall back into doing the “technical” things you did before. You were good at it. Competing with your staff is bad management. You need to transition from player to coach.

When you look at that list I have seen a number of those and a unique set of challenges for the entrepreneur. The common entrepreneur’s issues from my list are number 2, number 3, and number 7.

Even more so than the newly promoted manager, the entrepreneur is the business. There is a tendency to attempt to replicate yourself or in some cases turn the business over to a family member who doesn’t share your passion or acumen.

One of the things we learn in large organizations is that different leadership styles are appropriate in different stages of the business. The passion, vision, and daring of the entrepreneur often need to evolve to the calm hand and head of a professional manager.

Feedback often times is especially difficult for the entrepreneur. It is either provided inconsistently or not constructively. The business isn’t a hobby to them it is their life and others lack of “engagement” can be frustrating.

Similarly, transitioning to “coach” is difficult. Typically the entrepreneur makes all or most of the key decisions. Delegating those decisions is hard, especially without the skills to support effective delegation. Equally difficult is that some of your responsibilities will probably be have to be shared by more than one person. That can be especially difficult.

The entrepreneur also keeps much of the most critical information in their head and within their personal control. Giving up that control and trusting is hard!

As I summarized here, this transition is a difficult one. Achieving results through others is usually a critical component to long term success. As a corporate person it is the key to advancement. As an entrepreneur, if you are the business, the value leaves with you, or its ability to grow is gated by your personal skills. Either way, this is a critical transition.

###

Today’s article is presented by my friend Mark F. Herbert, now living in Phoenix, Arizona, who is an experienced corporate executive, and a consultant specializing in optimizing organizational performance. Find out more about him at www.newparadigmsllc.com or contact him directly at mark@newparadigmsllc.com.


Share/Bookmark

Sunday, November 14, 2010

Startups Need the Eight P’s for Successful Funding

By Joseph A. Bockerstette, Main Street Venture Fund

As I outlined last week, trophy angel investors are always looking for trophy entrepreneurs. In many areas, not enough entrepreneurs meet the criteria, so it’s still a buyer’s market. The result is that the Main Street Venture Fund consistently has more money available than good opportunities for investment.

After considering about 200 investment opportunities over the past two years, we have established a decision making process to identify trophy entrepreneurs and startups. It consists of eight major criteria, which we call the “Eight P’s for Successful Funding”.

  1. Proposition. A poorly understood value proposition causes false starts, lost time, costly mid course corrections and general frustration for all stakeholders involved. The value proposition is a short statement that clearly communicates the target customer, the customer’s problem and the pain that it causes, the unique solution that addresses this problem, and the net benefit of this solution (value derived versus relative cost) from the customer's perspective. Creating a strong value proposition requires substantial customer insight, thorough study, an understanding of the real value of intellectual property, thoughtfulness, and several iterations.

  2. Potential. Once we understand the target customer and value proposition, we need to know how many of these customers exist and how often they will buy the company’s products or services. While most entrepreneurs want to prove an enormous market size potential, rarely does the entrepreneur know how many real customers exist and how many products they could potentially buy over a period of time.

  3. People. There is no product idea good enough to overcome bad partners. We look for many attributes amongst the team, including communication, leadership and management skills, subject matter knowledge, business expertise, relevant experience, openness to influence, team cohesion, motivation, integrity and credibility.

  4. Plan. Unfortunately, we read far more poorly written business plans at Main Street than good ones. Entrepreneurs tend to write business plans that are difficult to read, heavy on technology, and give little thought to the business model and commercialization strategy. A good business plan should be no more than 20-25 pages long and tell a compelling, cohesive and complete story about the proposed business. Repetition will kill an otherwise acceptable business plan. Supporting detail should be included in an appendix, where the reviewer may read it if desired.

  5. Profit. The financial plan should include a profit and loss statement, balance sheet, and cash flow statement that ties together and is consistent with the business plan narrative. This area can be especially challenging, as the skills required to complete a competent financial plan often exceed the entrepreneur’s ability. Particularly important is the capital structure plan that the business intends to follow as it moves toward commercialization.

  6. Price. We see many entrepreneurs who grossly over value their company when attempting to obtain outside investment. The trophy investor wants to know how much money is needed, where the money will be spent, how long it will take to spend it, the long term strategy for future spending and funding, and how the valuation will grow over time. Planning for valuation growth and investor exit should begin prior to the investment.

  7. Participation. Main Street members consider our involvement in our portfolio companies as important as our investment. A Main Street member typically joins the board of directors and actively participates in corporate governance and as an advisor to management. If needed, we will also take a more active role in the company in the area of business planning and execution monitoring.

  8. Partnership. Main Street has a desired investment term of three to five years. While our members invest individually, their interests are represented collectively through our board of director seat. Our board member monitors the company’s progress monthly and reports back to the members. We have learned that even with successful relationships, the time, attention and support required to create a great company is inevitably greater than we had estimated.

So, if you want to attract a trophy investor, first do your homework and hone your skills on these eight P’s. Then you too can be a trophy entrepreneur, with dollars raining down on you.

###

Today’s article is presented by my friend Joseph A. Bockerstette, now living in Phoenix, Arizona, an active investor, business advisor, and a founding member of the Main Street Venture Fund. You can contact him directly at jbockerstette@me.com.


Share/Bookmark

Sunday, November 7, 2010

Trophy Entrepreneurs Can Land Trophy Investors

By Joseph A. Bockerstette, Main Street Venture Fund

Angel investing in most parts of the country remains a relatively informal and unstructured process. The depressed economy has dampened the angel community’s appetite, making the identification of the trophy investor more important than ever. Professional angel investing takes time, knowledge, skills and resources. The trophy investor understands these challenges and has developed a professional process to manage his investments.

Main Street Venture Fund LLC, an angel fund of about 25 private investors, was formed by Ruffolo Benson LLC in northeast Indiana with the intention of bringing together area entrepreneurs and private investors to create economic value for the region. I will share several of our group’s insights from the past two years.

For an angel investor, it’s a buyer’s market. At Main Street, we consistently have more money available than we have found good opportunities for investment. The ideal angel investor possesses a variety of personal characteristics that likely have contributed to successful achievements in his or her own careers. In seeking the trophy investor, consider these traits:

  • Financial capability. The investment amount under consideration should be comfortable for the angel investor. The investor must see this class of investment as completely discretionary, where all of the money may be lost, but the experience will be one that the investor benefits from and enjoys nonetheless. If the investor stresses over the investment, the interests of the investor and entrepreneur can easily grow at odds with one another.
  • Business wisdom. Prized angel investors not only contribute money to an opportunity, but also important wisdom acquired from prior experience in areas such as stakeholder relations, employee hiring, and strategic planning. Ultimately, it’s this intangible capability that can add the most value to the company.
  • Emotional maturity. Entrepreneurship is inherently full of mood swings. A trophy investor is a great coach and mentor, sometimes providing the only shoulder an entrepreneur can cry on during difficult times. Good investor/entrepreneur relationships often grow informally into regular communications covering a wide range of topics. This mentoring can be particularly useful to the entrepreneur working through the personality issues that tend to dominate start up companies.
  • Expertise. Along with business wisdom and emotional maturity, the trophy investor will possess specific expertise in the business. Some angel investors only invest in industries where they have knowledge and prior experience. The more industry experience an investor has, the more useful she can be.
  • Network. The trophy angel investor typically participates in networks of other angel investors and venture capital firms that are available for evaluation, feedback and syndication. This access can be extremely valuable to an entrepreneur attempting to find additional funding.

As we have considered about 200 investment opportunities over the past two years for the Main Street Venture Fund, we think of our decision-making as a process based on eight major criteria, which we call the “8 P’s for Successful Funding.” I’ll be outlining these in a follow-on article.

Successful entrepreneurs have many skills that play important roles at different times during a company’s life cycle. The skills required for obtaining funding, such as business plan writing, pitch presentation and group communication are different than the skills needed to grow and operate a successful business. Entrepreneurs who ignore their weaknesses and hope investors don’t notice are making a mistake. Landing a trophy investor requires the personal skills, competency, integrity and experience that comes from being a trophy entrepreneur.

###

Today’s article is presented by my friend Joseph A. Bockerstette, now living in Phoenix, Arizona, an active investor, business advisor, and a founding member of the Main Street Venture Fund. You can contact him directly at jbockerstette@me.com.


Share/Bookmark

Saturday, November 6, 2010

Startups are Low Risk Compared to Work-at-Home

If your confidence is low about starting your own business, and you are tempted to “reduce the risk” by signing up for one of the many “work at home” startup offers you see, think again! These offers that you see on every social network and Craigslist are invariably scams.

The problem is getting worse. To stem the tide, the web giant Google late last year launched a legal battle against more than 50 companies that allegedly infringe upon the Google name to promote "work-from-home" scams. Their lawsuit came less than one month after a separate class action complaint was filed against one of these companies for a work-at-home scheme.

My definition of a scam here is any deal that wants some sort of cash payment before you can start "making money". Typically you need pay a registration fee; or buy a starter kit, training materials or a database of hot leads. Take that as the base warning flag - you should never have to pay money to work!

If you are still tempted to beat the odds, and would like to be convinced that yours is the one-in-a-thousand “real” offers, here are a few more action items you should consider before you commit:

  1. Contact the company. Try to find out the company name and contact information. If there is only an email address, they are likely not a legitimate business. Test the contact info. If it’s an 800 phone number, listen to see if the ringing tone changes while you're waiting to be connected: that’s a giveaway to calls diverted to an overseas base.

  2. Ask for an interview. Ask yourself what kind of company would hire someone based on an e-mail, rather than a face-to-face or phone interview. If the company does not require an interview, as a potential employee or contactor you have a right to ask them why. You can also ask them what kind of screening they do for their employees if they do not interview them.

  3. Check company location. Is the company overseas, or have no location specified? Beware of companies or individuals overseas who ask you to cash money orders or checks and offer to let you keep a portion - these are always scams.

  4. Google name or details. An Internet search could give you revealing information about the company or let you know how their scam operates. It is wise to do an Internet search of a company before you begin to work for them or before you send a payment. An Internet search may show feedback from other people who have been scammed by the company.

  5. Check posting frequency. Many scammers use an automated spamming program to post jobs repeatedly and throughout different cities. If you notice a posting that is re-posted every day or multiple times a day, this is usually a telltale sign that the post is a scam.

  6. Pay by credit card. This one may sound counter-intuitive, but liability for online credit card purchases is usually limited to $50, if you are dissatisfied and report the transaction. Some credit card issuers will even waive the $50 deductible.

Of course, it goes without saying that you should never provide personal information, like social security number, bank account info, or credit card numbers to anyone to secure a job opportunity. The final test is that when something sounds too good to be true, assume it is a scam.

So even if your confidence is low about running a business, remember that you can actually reduce your risk by doing your own startup, compared to the other “low risk” alternatives on the Internet. Keep your wits about you, and save a friend tomorrow by helping Google clean up the problem today.

Marty Zwilling


Share/Bookmark