How to Keep Key Employees - an Ingenious Turn-key Organization pt iv

This is the last of a four-part series of articles on Developing a Self-Running Organization.  In the last post we discussed how to develop the leadership skills of your mid-managers.  By involving them in strategic planning, you can prepare your company to run in your absence even during a crisis.

Turn Line Workers into Managers

Okay, you're regularly involving your senior execs in planning and confident they're participants in your company succession plan. But how do you provide for succession of your line workers?  These may be senior people without any formal managerial responsibility but they know the ins and the outs of the organization.  Tenured employees who might be topped out in pay and marginally challenged, they are highly at risk for leaving.  They may have special skills that would be difficult, if not impossible, to replace. If they see themselves in a dead end position the threat of departure can be great.

You realize you could fix this if you could offer them upward mobility.  Unfortunately because of the structure of the organization or their particular role, while you recognize their value, they're unpromotable.  So what can you do to prevent losing these key employees?

There is a way to provide your line employees leadership responsibility in a manner that achieves a number of benefits to the organization:

• increased productivity
• cheap labor 
• clone irreplaceable employees 
• an extended interview of new employees to determine cultural and skills fit within the organization

Can you guess what it is?  It's offering internships!

Work with the local University

By working with the career center of your local college, you can offer internships to students in undergraduate and graduate programs.  Done properly, you can achieve all these benefits and more.

Assign a new intern to a senior line employee you think may need a new challenge.  Your seasoned vet gets an additional role and becomes a manager by virtue of their supervisory role over the intern.

The company benefits from the productivity of an additional employee at a fraction of the cost of a regular worker and this intern gets to learn your business during this time.   Your labor output increases and you can assess how well a potential employee would fit your organization and perform their assigned job.

Most interns won't prove a fit, but that's fine.  Most employees don't either and end up leaving.  But by utilizing interns in your employee screening program, you won't have the expenses of a new employee.

Executed properly, an intern program can relieve you of many costly burdens.  Think of the typical expense and upheaval when an employee- even a brand new one - departs:  initial training costs, training salary, benefits, incidental issues.  Often you worry about the impact on sympathetic coworkers.  Rarely, you may have legal issues based on discrimination or other matters.

With interns, you won't have all these expenses and you don't have to worry about the affect on coworkers.  Interns are typically temporary so if they don't work out you just don't invite them back.  And done properly, you invest only time.  Regardless of the outcome, your senior employee will still have reaped the valuable experience of managing and training the intern.

Extend a Job Offer to a Promising Intern

When one of your interns proves a good candidate, you can offer them a position upon graduation.  Since they'll already know the job, they'll hit the ground running and require less supervision.  Their retention probability will be much higher than if you had hired someone without a trial period.  After all, you already know they're a cultural fit.  They'll probably get to know their direct supervisor. Since a poor relationship with the boss is the top reason an employee leaves you'll have a better chance of holding onto them.

Bonus: since your new hire interned under a seasoned employee with a valuable and possibly critical skill set, you'll have taken a giant step forward to shoring up that gap.  If you had the foresight to instruct your grizzled vet to train the intern to do their job, you have another employee on their way to adding that skill to their toolkit.

There's a lot more to structuring a successful internship program - how to supervise, how to manage the project, what to stress to all parties, how to ensure your line workers are enthusiastic and competent to manage interns, how to measure results, etc. etc.   It's way too much for this short article.  If you are interested, the author is available for consulting on how to best implement this strategic advantage.  The benefit far outweighs the cost.  For additional help, feel free to contact the author.

This is the final article of this series.  You now have the tools necessary to set up your company to become self-running.  You can add any number of staff for free by using interns; your line employees will view the upward mobility and you'll lock in retention of your key employees; your senior and line managers are practicing strategic planning and delegation which lowers the costs of the company; and you and every other leader can be content the organization will run smoothly in your absence.

And isn't that what every business leader wants?  To set up a business that throws off cash without demanding a lot of time?  Now you can take that trip around the world, right?  Write in the comments and tell me what you think.  Have you used interns?  What was your experience?

Next I'll share another Ingenious Sales Technique.  Have you ever tried to reach a top executive at a company but you were simply unable to reach them?  I used this technique to reach Warren Buffet's administrator at Berkshire-Hathaway Corporation.  It's a fantastic skill from a book that I tweaked.  Stay glued.  I'll share it in the next column.  Until then,

profitable business All!

Time Management for Managers- an Ingenious Turn-key Organization pt ii

Developing Leadership Ability Within a Company

Just as you need to acculturate your entry-level hires, you must also train new managers.  If you hire a seasoned manager from outside the firm (a practice I strongly discourage) you will need to acculturate your new hire too.

Your strongest practice is almost always to promote from within.  The reasons for this are numerous.  Most importantly, you'll sap employee loyalty and dull the edge of your most ambitious leaders if you give a senior role to an outsider.  But your newer managers are already acculturated to your organization; why would you want to throw away that training?  Your current employees already know your current policies and the way to do things within the company.  And they already have existing relationships that will help them do their job.  Further, an insider is always more loyal to the company than an outsider.

The only reason to hire outside the firm is if your culture is weak and needs to be shaken up badly.  Occasionally a large company board will hire from outside the company.  It weakens morale but sometimes a board feels desperate.  The strategy is tremendously risky and most outside hires leave after a short time.

Best Methods of Training Subordinate Leaders

As a manager, it's my job to train each of my subordinate managers to perform my job.  Similarly, my instructions to my direct reports is to train each of their subordinates to take over their job.

Too many managers prefer to perform a task because they claim it's easier than handing it off.  But this deprives subordinate leaders of learning and growing within the company.  The first thing I drill into my subordinates is that they must delegate.  I want them to give their subordinates the opportunity to learn as well.

A leader quick to delegate is an effective time manager.  And an effective time manager effectively manages their workload so rarely experiences burnout.  As a result they can remain calm and unfrazzled in a crisis.  This is a benefit of good leadership.

To teach delegation I issue my subordinates one instruction. For every piece of paper that arrives on their desk, or every task they're handed, I insist they ask themselves: "Who of my direct reports can I hand this off to?  Who has responsibility for or is affected by this?" 
How do I do this?   By modeling this desired behavior.

Grooming a New Leader

Assume you're the CEO of your company.  You've just hired a new sales and marketing VP.   This role oversees a sales manager and a marketing director.  They both have direct reports as well.  You need to get your new hire up to speed quickly to lead their department.

Had you promoted from within, your new VP would already know and practice these techniques I'm explaining.  But let's assume you've hired outside the company.

To emphasize the need for rigorous delegation, I assign this new manager every task and swamp them with every piece of paper related to sales or marketing.  I scan a letter or email, or review a task only enough to determine the department head directly below me to whom I can send it.  Ultimately, I want each task to be delegated down to the lowest rung that can perform it, and for that procession to happen one rung at a time.  Only after I am unable to further subdivide a task, will I own it.  I instruct her to act the same way.

If my new hire tries to keep a job that a subordinate could handle, for instance a sales-only task, then I will reinforce my instructions.  She should have delegated that task to her sales manager who then further tries to subdivide it.  Similarly, she will delegate anything related solely to marketing directly to her marketing manager, bypassing sales entirely.  I will also tell her to immediately return an item back to me if I've erred and the item is broader than her department and is thereby my responsibility.

I will continue to deluge my new hire until she gets it.  Then I can start copying her on items I send to people farther down the chain of command obviously the responsibility of that billet.  For instance, I will send a question about a California sale directly to the Western Sales manager.  And she can then start leapfrogging too.

I guide my people to act rapidly on each task to prevent bottlenecks.  They will learn to speed read emails and make quick critical judgments, they learn to divorce emotion from content.

Handling assignments in this manner, the only thing on your new hire's calendar will be those items that directly affect both sales and marketing but not either one or the other.  This means the only thing on your list will be tasks that affect more than one division of the company but not a single division.

If you train yourself and your subordinates to act this way, you will discover your daily calendar freeing up tremendously.  Delegating in this manner will end up moving responsibility and activity down the chain of command.  Let's look at what this accomplishes:

• By training your people all the way down the line to delegate, they become effective time managers.  Ensuring everything runs through your new hire temporarily will also strengthen the chain of command allowing your leaders to forge stronger bonds with their people.
• For each task, the employee on the lowest rung possible will handle it.  This empowers everyone down the line, preventing information from being sequestered, and frees up the time of senior management.  This will make the organization efficient and everyone will be learning.
• If the lowest paid employees do each task, your cost of labor will decrease.
• You free up your senior people's time to react to and plan for unexpected challenges and crises.  You essentially take your managers out of crisis manager mode empowering them to become strategic planners.
• You create a company-wide delegating culture where nobody is irreplaceable.  This means anyone can get sick, take vacation, leave the company, telecommute as needed, or get promoted.  All without throwing the organization into chaos.

In the next article we'll discuss how to develop virtually bulletproof strategy while empowering your employees.  And later I'll disclose a way you can provide upward mobility to every employee in even the smallest organizations while sharpening your peoples' skills.  It's all coming your way in the next few weeks.  Until then,

profitable business All!

P.S. One of my favorite books on time management is Morgenstern's "Organizing from the Inside Out"

Simple Marketing, pt V: Designing your Ad Campaign

Developing a Media Ad Budget

In our last article we calculated how much profit your ideal client brought into the business.  Multiplying this figure by the number of clients you expect each advertising medium to pull, you can calculate your budget for a given ad campaign.

Perform this calculation to calculate your cost-effectiveness for each medium.  You will initially test market the most cost-effective one, or the one with the highest client value per dollar spent.

Continuing with our previous example from the last column, your calculations reveal that your most cost-effective medium is a monthly print advertisement in a specialty publication read by many of your ideal clients.  Based on your estimate and rough surveying of a few of your ideal clients, you expect this ad will attract several prospective clients each run, two of whom will be an ideal client.  From our earlier calculations, we know that an ideal client is worth $500 to us.

The maximum you can afford to spend on any medium is the profit (not income) you expect to earn from new acquisitions of your ideal client type.  In this case, the value of each client ($500) multiplied by the number of clients expected per ad run (2) is $1000. Thus your ad budget for this campaign that you expect to bring in one new ideal client is $1000.  How does this information help us?

Selecting your Media

It's important to realize that all media are not equal.  First estimate the pull rate on each medium you can select.  Then by dividing the ad cost by the number of new clients expected, calculate your cost per acquisition for each medium.  The lowest one will be the one you choose as your first test medium..  For now, ignore scale: an ad that costs $50 and pulls only 1 client is twice as cost-effective as one that costs $500 and pulls 5 clients.  Why choose the smaller?  Because running the first ad brings you new clients at $50 each; the second costs $100.  Don't concern yourself with how many people are pulled by an advertisement; you only care about per client costs.  Later you can run as many ads as you like to vary scale.  But first you want to select the most cost-effective medium.

If several media tie for acquisition cost or if you're completely unsure about your estimates, choose the one with the greatest audience that make up your ideal clients.  You will exhaust a smaller pool more quickly and have to start over in your testing.  As long as you are acquiring ideal clients, pick the medium with the largest readership you can find.  You can sometimes get better pricing on media if you go through an agency, especially if you're buying a lot.

Test Marketing Your Ad

I encourage you to engage a professional copywriter.  Designing a winning ad is a specialized skill, and writing marketing copy belies the 80/20 rule.  You with your 80% of general marketing knowledge will likely get nowhere near the response than will a true marketing pro with her remaining 20% of specialized marketing knowledge.  I once had a potential client refuse copywriting assistance because she had enjoyed her marketing class in college.  Don't be that client.

To test an ad you must track it.  There are two ways I like to track an advertisement inexpensively, one for print ads and the other for call centers.  If you're running a print ad, make it a coupon or include a special offer.  To redeem this offer the buyer must provide the code or coupon on your advertisement.  Each time the discount is redeemed, you know it's as a result of that advertisement.  At the end of the campaign you add up the coupons or count the codes to track effectiveness.

If your ad urges people to call, use a separate telephone number issued by a telephone marketing service agency.  The service provider logs each call and forwards it to your normal business line.  Then at the end of the promotion they provide you a log of incoming calls.  A little research will help you find a call center marketing service provider.

Tracking Your Ad Campaign

You'll track the advertisement using a matrix chart.  You can download a call sheet template or use your Customer Relationship Management software or you can get a simple piece of graph paper and draw columns and rows.  Your objective is to keep track of the activity and its results.  Each business will use a slightly different format but basically you need to add up how much profit each ad campaign brings in.  Count your net profit before taxes, not gross sales.

Once you have a baseline then fine-tune your ad campaign budget.  If an ad pulls only half as well as you had expected and your max buy is now lower than what you're paying, revise your cost per acquisition for that medium.  If an ad turns out to cost more than it's bringing in, abandon it and try a different medium.

Only retry an abandoned medium after having exhausted every other avenue.  Your goal is to determine the best raw statistics for an unrefined advertisement.  If you try every medium you can think of and none of them pull very well, then choose the one with the lowest ad cost per client acquired and start refining it.  An advertising agency can advise you.  In this case it might be best if you contracted with one for a few hours of consulting time.  You're probably in a very challenging environment and may need specialized guidance.
The rest of us hopefully have our selected medium.  Next week we'll explore how to fine-tune your campaign and gradually improve results to ultimately develop a top drawer ad.  And in a later column we'll talk about how to formalize training within your organization so your key employees become strong empowered leaders who will stay with your company as long as you want.  After practicing this Ingenious Business Technique your attrition will decrease significantly.  And if you haven't yet checked out the podcast, feel free to download it.  More exciting stuff coming up.  Stay tuned!  Until then,

profitable business All!

Acculturate your new hires- an Ingenious Turn-key Organization pt i

New employees must be acculturated

Last week I explained how to lead your customers.  This week we’ll explore how to lead your new employees and fold them quickly into your company culture. 

What is some of the scuttlebutt that employees grumble about their managers around the water cooler?   They’re overbearing, indecisive, lazy, oblivious, etc. If you sift through all the criticisms, you’ll likely discover the complaints fall into two piles: micromanagement and failure of leadership.  Both of these traits stem from fear: fear of losing control, or fear of appearing too militant.  And they're each sides of the same coin. 

Very few employees realize the difficulty involved in being a manager until they become one.  Management if often considered a thankless, arduous, and vilifying role within a company.  But approached the right way, it can be a motivating, energizing, satisfying responsibility.  With a few tools, any manager can become expert at unobtrusive supervision and grow their position into a highly respected billet within the company.

Recognizing the challenge of leadership, many companies have tried to banish the concept, flattening their organizations, or in a supreme pacifying effort, chosen to label each individual a manager… even if they manage equipment, resources, or just their own workload.  In this article we're concerned with personnel management.  Whether you manage a department of individuals or other managers, this article is for you.

You can usually determine a manager's satisfaction by gauging how they view their job.  Do they perceive the role as mainly keeping people in line, ensuring they do their darn job so they don’t have the chance to slack off?  If so, their corporate life will be bleak.  The best managers empower their subordinates – consisting primarily of getting out of the way – and ensuring they have the support necessary to do their job.

Great Managers

Do you want to be a great manager?  Then flip the hierarchical organization chart upside down and view the true essence of leadership: that you as a boss support your people; your boss supports you; his boss supports him; and so on.  You each empower your subordinates, not preside over them.

Surprising to most managers, your job is not to ensure that your employees do their job.  A boss is not a kindergarten teacher.  Your two tasks are making sure your employees have the tools and support (including training) necessary to accomplish their job; and ensuring each employee is a good fit for the company culture.

It’s more important for an employee to be a good fit culturally than be skilled at their job.  As a manager, your first priority is ascertaining whether your new hire will fit in with and preserve the company culture.  We're assuming you hire individuals with the best ability, especially in today's job employer-skewed market.  So assuming you did a decent job of hiring, if an individual is a good cultural fit for your organization, she can always be taught or, if necessary, be transferred to a more suitable billet within the organization.

Let’s take the example of a customer service rep.  He’s dynamite on the phones and gets results.   However, it turns out your new hire is a maverick, not a team player, and your organization embraces team culture.  You’ve just discovered the disconnect after hiring him.  What should you do?

If he doesn't fit in with your culture and you’re sure you can’t indoctrinate him, terminate.  Conversely, a customer service rep who is struggling with the skills of the job but has the right attitude you must continue to train and support until he progresses enough to do the job.  Will he become a star?  Maybe not, but the question is will he become better than your least competent employee?  If the answer is yes, then keep him and terminate the least competent or find another place for them.  If the answer remains no after a suitable ramp up time, then consider a related position within the company where he will be a better fit.  Do your best to retain an employee who is a cultural fit with your company.

A manager is like the captain of a ship.  It's easier and less chaotic when everyone's rowing the same direction.  You can individually upgrade each person's rowing skills over time.  But it would be bedlam to make a dramatic course correction because one guy's rowing the wrong way, no matter how strongly he rows.

Netflix has a hiring slogan: “No brilliant jerks!”  It’s more important to have the right attitudes in your people than the right skill sets.

Next week I’ll discuss how to correct an employee's behavior so neither the manager nor the employee wind up with hurt feelings.  And we’ll continue exploring the market plan.  Until then,

profitable business All!

An excellent tool that discusses cultural fit: "StrengthsFinder" by Gallup