Building a Culture of Servant Leadership

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By Michael Iverson

Imagine if this was your first experience with an airline:  Leaving town for vacation, a friend and his young family were among the last passengers to board their Southwest Airlines flight. As the family made its way to the plane, crew members warned there was no room in the overhead bins for their carry-ons.  The captain told my friend to leave the carry-ons at the end of the breezeway and he would find a place for them. When my friend got to his window seat, he saw the captain himself carrying the bags down the stairs to employees loading luggage onto the plane!  My friend thought: What other airline captain would do that?  This act of servant leadership had a profound impact on him and he became a loyal customer of Southwest.

Servant leadership is a leadership style that has been around for over 30 years.  It was first introduced in 1970 by former AT&T executive Robert Greenleaf.  It really came into its own in the 1980s and 1990s, when companies that adopted servant leadership (such as Southwest Airlines and Starbucks) first achieved success and admiration.

But what exactly is servant leadership?  Servant leaders selflessly put their employees’ needs ahead of their own. The employees, in turn, put the needs of customers first.  Customers, appreciative of the attention and care they receive, reward the business owner with their loyalty.  It is, by design, a cycle of virtuous behavior.

It must be noted, however, that servant leadership is a model that can conflict with the traditional management philosophy of a leader needing to exert authority over employees.

Behavior of a Servant Leader  
The servant leader’s natural inclination is to help others.  He or she helps his employees become proficient in their work. A servant leader shows them how they can pursue careers that achieve balance between work and family life.  And, he or she rewards their efforts with financial consideration that is truly representative of the value they add to the business.

Its leadership by example and with integrity, teaching employees how to put the needs of others first.  A servant leader purposely stays out of the limelight, allowing his team members to accept the accolades and not themselves.  He or she trusts his employees to do what’s right for customers and the business.

Management consultant and author Franklin Covey put trust as the hallmark of a servant leader.  He cited 13 behaviors a business owner must adopt, including:

  1. Talk straight:  Tell the truth. Let people know where you stand.
  2. Demonstrate respect:  Show you genuinely care.  Respect everyone, including those who can’t do anything for you. Show kindness in little ways.
  3. Create transparency: Be genuine, open and authentic. Don’t hide information or have hidden agendas.
  4. Right wrongs:  Apologize quickly. Make restitution where possible. Demonstrate humility.
  5. Show loyalty: Give credit to others.  Be loyal to those absent and represent those who aren’t there to speak for themselves.
  6. Deliver results:  Establish a track record of results.  Don’t make excuses for not delivering.
  7. Get better:  Continuously learn and improve.  Thank people for feedback and act on feedback received.
  8. Confront reality:  Meet issues head-on.  Address the “tough stuff” directly.
  9. Clarify expectations:  Disclose and reveal expectations.  Ensure expectations are clear.
  10. Practice accountability:  Hold yourself and others accountable.  Take responsibility for good or bad results.
  11. Listen first:  Listen before you speak.
  12. Keep commitments:  State your intentions and then act on them.
  13. Extend trust:  Extend trust abundantly to those who have earned it.

Business owners who have adopted the servant leadership philosophy say it promotes team-building, achievement, positive change and high employee morale.  So, what’s the catch?

This style of leadership does not come naturally for some people.  Our achievement oriented focus is taught in school and does not consistently encourage servant leadership traits.  It requires an intentional approach to live the principles outlined by Covey.

If you can incorporate the principles of servant leadership into your business, you can provide an environment for your employees that is much more than a place to work.  You are inviting them to a better way to work, and a better way to live.

To discuss whether your business is a good fit for the servant leadership model, contact Trillium Financial.

The Business Owner’s Pursuit of Happiness

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One of the pleasures of my work is being around business owners who are generally happy with their lives. I don’t think it’s an exaggeration when I say that, as a group, they are among the happiest people I know.  I often marvel at how this could be the case given the many challenges and responsibilities they face.

Owning a business has the potential for personal satisfaction on several levels. First, most entrepreneurs take satisfaction in setting their own work schedules and prioritizing what needs to be accomplished.  Another form of satisfaction comes from accepting the risks involved in running a business and using one’s own energy and effort to make the business successful. It’s gratifying to experience the fruits of your labor.

One of those fruits, of course, is financial. When a business is successful, the owner often enjoys financial rewards that exceed what he or she would likely achieve as someone else’s employee. That’s an important motivator for starting a business and making sure it continues to be successful.

It would be simplistic, however, to conclude that satisfaction and achievement add up to what is generally referred to as happiness.

What Is Happiness?

The idea of happiness is difficult to express in terms that are agreeable to everyone. Much has been written about the pursuit of happiness, yet its meaning is open to interpretation. For many people, eat, play and sleep would pretty well cover it. For others, the real pursuit is for wealth, pleasure and a good reputation.

The great philosophers put a good deal of thought into the notion of happiness and concluded there was more to it. Socrates believed that the key to happiness was to turn one’s focus away from the body and towards the soul. He also considered happiness to be the by-product of a moral life.

Aristotle personalized the concept. “Happiness depends on ourselves,” he wrote.  In Aristotle’s mind, true happiness required attainment of both physical and mental well-being within an environment that cultivated virtue.

How do the ideas of Socrates and Aristotle match up with your pursuit of happiness, especially as it pertains to your business?  My experience with entrepreneurs tells me that most yearn for more than eat, play and sleep – not only for themselves, but for their employees.

It usually starts with the business owner developing the work environment that allows him or her to do his/her best work.  The business owner pursues happiness by establishing an environment that supports personal business success, professional growth, personal freedom, friendship, family time, and spirituality.

A business owner who creates such an environment – where a person can thrive, both personally and professionally – would likely hire those who share his/her values. Once they are hired, the leader can show each of them how to make the most of the opportunity presented to them.

There exist people whose pursuit of happiness includes the pursuit of the happiness of others. I have seen this dynamic at work with a number of entrepreneurs. They know how this approach can build a successful company.  The lives of their employees are enriched in unique and profound ways. And, a successful company contributes to a vibrant local community.

That’s a wonderful legacy for any entrepreneur.

How Well Do You Know Your Strengths?

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Would it surprise you to learn that most people have only imperfect knowledge of their own strengths? Most of us have a rough idea about what we do well, because our obvious strengths are often the basis for earning our living.  However, that knowledge is limited.

As a group, entrepreneurs may have a better handle on their strengths than most people. Knowing that many of my readers are business owners, my educated guess is that you recognize some of the following entrepreneurial traits in yourself:

  • Self-confidence
  • Ability to learn from others
  • Self-motivation
  • Determination
  • Decisiveness
  • Willingness to take risks

Many business owners would say they possess all of the above characteristics. That’s good because they may be the most important strengths for an entrepreneur to possess. Of course, the list above is far from complete. Most entrepreneurs are keenly aware of some of their strengths – those that help them succeed day to day.

Here’s another list of skills that would come in handy for any business owner:

  • Being innovative/inventive
  • Analytical skills – capable of researching and analyzing various aspects of business like product development, production, marketing and sales
  • Focus on financial results, i.e., the bottom line
  • Ability to delegate authority effectively
  • Organizational skills – capable of identifying what needs to be accomplished in each aspect of business and matching employees’ skills to the tasks at hand

Is it as easy to recognize from this list the skills that you possess?  Typically, this list poses more uncertainty for people. For example, some people have the capacity to be analytical, but they would rather not have to use those skills at work if someone else can provide them. Others see themselves as innovative. However, in reality they may not rank high when tested for those skills.

Assessing Strengths

There are tools available to help determine your strengths. The Clifton StrengthsFinder® is a popular online assessment that draws on more than 50 years of Dr. Donald O. Clifton’s lifelong work. Clifton was recognized with an American Psychological Association Presidential Commendation as the father of strengths-based psychology. The assessment is designed to help individuals identify, understand, and maximize their strengths. As a manager, it can be used to help you understand the strengths of your employees.

The importance of knowing your strengths, or those of your employees, is to help people focus on the things they do best every workday. This notion directly contradicts what most of us are taught from childhood – that we should focus on minimizing our weaknesses. Research by Clifton, and others, suggests we accomplish far more by maximizing our strengths and developing them to their fullest.

StrengthsFinder provides numerous strategies for making the most a person’s unique strengths. Its in-depth approach to strength analysis explores the nuances of what makes a person unique. The program uses more than 5,000 personalized strengths insights.  Two people with similar strengths get very different plans to improve themselves. The program will likely change the way you look at yourself, or your employees.

If you find that financial analysis is not one of your strengths, let us help!  Contact Trillium Financial today for a CFO-level roadmap for your business.

Are Those Contractors Really Employees?

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by Ned Lenhart

Over the years I’ve worked with many companies who use “contractors” to perform a lot of the work they do. Given the control these companies have over these so-called “independent contractors,” I’ve always been concerned that they are really “employees.”

On February 23, 2013, the U.S. Tax Court issued Kurek vs. Commissioner, T.C. Memo 2013-64 and held that a general contractor who used laborers to complete his work had improperly classified them as “independent contractors” and that they were really “employees.”

Even though the workers provided their own tools and set their own schedule, the general contractor set deadlines for the work and monitored their work on a daily basis. Further, he paid them on a weekly basis and had the ability to approve the quality of their work. The Tax Court held that these factors made these workers “employees” and not “contractors.”

The implications of this decision are extensive and include workers’ compensation insurance, unemployment insurance, FICA, and now healthcare coverage.

Over the years we have seen situations that are similar to this fact pattern, especially in the construction industry. If your company uses “subcontractors” or other laborers to complete projects, please review this ruling carefully and evaluate the potential consequences. The ruling could also have implications on state and federal income tax withholding rules. The penalties associated with these violations can be significant.

Ned Lenhart is President of Interstate Tax Strategies, a multi-state sales and use tax advisory firm based in Atlanta. To learn more about ITS, visit http://www.salestaxstrategies.com.

Don’t Gamble on Employee Selection

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by Tim Fulton

Employee selection. No two words frighten small business owners more than these two.

Why is this? Maybe it’s because the selection process can be so time consuming. Maybe it’s because the process can be so costly. Maybe it’s because we are never quite sure we know how to select the right person for the position.

I believe that the main reason so many small business owners and managers dread the thought of hiring new personnel is that they have made bad decisions in the past and the thought of duplicating such decisions brings terror to their hearts.

Why is it that despite our good intentions, we still make bad decisions in selecting new employees?

The reason is simple. We usually base our decisions on the wrong set of information. This fact became very evident to me recently in talking to a small business owner. Bill had just about sworn off hiring any more new employees as a result of the horrible experiences he had experienced recently in trying to fill several vacant positions.

Predicting future performance

Bill had owned this small retail business for five years and had always struggled in hiring new employees. I asked Bill on what basis he made a hiring decision. His response included such common factors as appearance, communication skills, and past experience. He than shared with me that his most important factor in hiring a new employee was his ability to predict their future behavior and performance in that particular position.

I was glad to hear that Bill used such a criteria for hiring. Experts tell us predicting future performance is quite normal and a good practice in the selection process.

I than asked Bill on what basis he was able to predict such future performance. He responded that he would often times ask hypothetical questions such as, “If you were getting ready to close the store and a customer entered and demanded that you stay open for the next thirty minutes while she browsed for a future purchase, what would you do?”

Bill also suggested that he tried to determine applicant’s work attitudes and moral values during the interview. That information, he felt, was important in trying to predict future work habits.

Bill felt that despite getting great information asking such questions, for some reason many of his new hires did not perform the way he had imagined during the interview. In fact, several of his newly hired employees turned out just the opposite of what he had predicted during the selection process.

Hiring is Similar to College Football?

In talking to Bill, I also found out that he was a huge sports fan. He loved college football and confided to me that he was known to place a wager on one or two games a week. In fact, he bragged to me that he had earned enough money last year from betting on football games to pay for a recent week-long vacation to Florida for his family.

I asked Bill what he contributed his betting success to.

He responded that he had become very good at predicting the outcomes of games almost to the exact point spread. He was able to do this by studying each team’s past performance in close detail. He would watch replays of their last games. He would scrutinize their statistics. He would research how the teams had played under like circumstances in past years.

In simple terms, Bill had created a science of predicting football game outcomes by looking at past performance.

I asked Bill if it was possible to draw a parallel between predicting winning football teams and predicting the future behavior of a potential employee.

At first Bill had a confused look on his face. He was having a difficult time correlating the process of picking football game winners with the selection of productive employees. Slowly, a grin emerged on his face as he realized the connection between the two processes.

“Are you saying that I should pick my employees the same way that I pick my football games?” he asked.

“Absolutely.” I responded.

A New Approach to Hiring

All of a sudden Bill experienced a huge awakening. He considered that he would never bet on a football team just because the coach talked of winning such a game. He would never pick a team to win just because of their apparent work attitude or values. In picking his teams, he predicted future performance based on past behavior under similar circumstances. It had always worked. Why wouldn’t it work in selecting new employees?

Of course it would.

Not only will it work for Bill, but it will work for any business, large or small. Research has conclusively shown that the only way that we can accurately predict an employee’s future behavior is by looking at their past behavior under similar circumstances.

Why is this so? Because behavior can be measured, it can be evaluated, and it can be changed. To the contrary, attitude is difficult to measure, evaluate, or change. Which one would you want to use to predict future performance?

If an employee has a history of satisfying customers in similar situations as your workplace would require, you can bet that that same employee would continue at that same level of performance under your supervision. Likewise, if an applicant has had negative experiences in the past, you can rest assured that he or she will repeat that behavior in a future position.

So the formula is simple: we select employees on the basis of predicting their future performance as a result of their past behavior under similar circumstances. This formula has been tested many times in many different situations and has always provided the best means to acquiring great employees.

I received a call from Bill last week. He had hired his first new employee using this new philosophy and he was certain that this young lady was going to be a star employee. In fact, in just a week’s time she was setting a new standard for outstanding customer service for the other employees.

Bill was ecstatic. He couldn’t wait to hire his next employee. He is also enjoying football this fall. He is certain that this will be a profitable season.

Tim Fulton a business coach and CEO of Small Business Matters, a leader in small business coaching and development. Learn more at www.smallbusinessmattersonline.com.