As a Business Leader, Do These 3 Worries Seem Familiar?

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Running a business as an owner or part of a leadership team brings along with it worries that can keep you up at night. Here are three of the most common worries, along with strategies for overcoming these fears:

Worried business owner
  1. Employee retention. When you lose a key employee, it is difficult to replace them, especially in a tight labor market. A rule of thumb to replace an employee is upwards of 3x their salary! One way to help retain valued employees is to do a routine check-in with each employee. Some might call it a “stay interview,” meaning what does it take to keep the employee happy enough to stay? In many instances, an employee primarily wants to be heard and valued, which comes from soliciting their feedback on how the company can do better.
  2. Customer retention. It seems with many of my clients fall within the Pareto rule. This means that 80% of their sales comes from 20% of their customers. Hence, if you lose one of these 20% customers, it can be a significant impact on the business. I have used in my business the Net Promoter Score (NPS) which asks a simple question: ”On a scale of 1 to 10, with 10 being highly likely, would you recommend to a colleague to do business with me?” This simple question can help you see if you customers are satisfied with the value you bring.
  3. Running Out of Cash. This fear can vary greatly among business owners and leadership teams based on their risk tolerance. However, if you run out of cash, that’s it. . . lights out and close the door. I have customers who keep a close eye on cash to ensure they have enough to weather economic storms that inevitably come our way. However, I have others who push it to the edge. Each business has a “speed limit” to grow and an amount of working capital that it should have available to meet everyday needs. Calculate your working capital needs by knowing your cash conversion cycle. This is the gap from when one dollar of cash leaves your door until it returns to your bank account from your customer.

Having a strategy for each one of these three worries can be the difference between having a thriving business or closing your doors. Let us know how we can help.

7 Habits That Make Great Leaders

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I recently completed the book “7 Habits of Highly Effective People.”  There were so many great points for both personal and professional development.  The author, Stephen Covey, also provided a list of behaviors that he (and me) believes show in high trust leaders.

1. Give straight talk.  Integrity starts with giving an honest opinion, the truth.

2. Show respect in all that you do, including compassion

3. Right any wrongs, and then apologize to demonstrate humility. Covering up only makes it worse.

4. Get better at it.  Try to continuously learn about new skills and methods.  I read books and magazines on a regular basis with goals of completing a number of books each year.

5. See reality for what it is and take it head on.  Addressing the tough issues shows courageous leadership.

6. Listen first which is one of Covey’s 7 habits of “see first to understand before being understood.”

7. Keep commitments.  Once you state your intentions, keep them to build confidence and trust.

Here’s to creating your 7 habits as a great leader!

Mike

Servant Leadership

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Servant leader- what is it?  In a business movement introduced in the early 70’s is the idea of servant leader.  These leaders put their company or organization before themselves.  They don’t view employees as the means to the end but rather the employee’s satisfaction is the end.  This can be a big shift in thinking for an entrepreneur.  Some points on leaders adopting this style.

  • Treat employees like customers, and where reasonable do their bidding
  • Ask the question “how can I help you?”
  • Fill in for an employee and do their job to lift a burden from the employee’s colleagues
  • Lead like you are leading a group of volunteers and ask, “what problems do you have?”  Volunteers don’t have to listen to autocratic leaders.

Servant leadership does not necessarily say you are a great boss, but rather its realizing that being a boss and leading are not the same.

Here’s to adopting servant leadership traits to build a better company!

Mike

Healthy Leaders Are Great Leaders

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A healthy business starts with a healthy entrepreneur.  To survive the demands of running a business or even part of a larger organization requires a physically strong person to stay in the game for the long run.  Here are some tips.

Just get started.  Make exercise a priority by setting realistic goals that a specific.  Start slowing to avoid injury and remember “slow and steady wins the race” says the turtle.

Do it right.  Know your limits and what exercises are the right fit for you.  Consult your physician to get onto a program.  Engage in the aerobic activity that will raise the heart rate.  Even 20 minutes can have a long-term effect.

Stick with it.  After setting your goals, tell it to as many people as possible.  They will help be your accountability team.   Visualize success- it might look like climbing to the top of a mountain to see a view stretching for miles.  Most of all make it fun!

Here’s to your health!

Mike

Great Leaders Block Their Time

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In today’s busy business environment, we so often hear how pressed for time leaders find themselves.  We are connected – 24/7 these days.  Time is a valuable and finite resource.  You can’t create more than 24 hours in a day.  It comes down to time management and not getting distracted by bright, shiny objects.

I can find myself getting distracted with incoming email and text messages.  Here are some tips on how to create more space to visualize, think, and read.  Without these ingredients in your routine running of your business, you are likely unable to be intentional on where you want to drive your business.

  • Jim Collins, author of Built to Last breaks his time up into blocks: 50% creative time, 30% teaching/business, 20% other.  During his 50% creative time he unplugs all electronics.  This is time to read, write, and think.
  • I respond to email generally only 2 times daily- at noon and at 5pm.  This catches the morning emails that I can address at midday and then catches the afternoon emails so responses are ready for the recipient first things in the morning.
  • Hold office hours.  You designate a time where your door is open for any discussion with your team members.  The non-office hours allow you to focus only on the highest best use of your time to work on your goals.
  • Take breaks to restore energy and creativity.  This could be a walk around your office building or taking a walk-in a nearby park.  (I have also heard of people taking conference calls while walking around to keep movement in their day and their mind alert on the conversation.)
  • Know when to say “no” to a meeting.  If meetings take up too much of your time, then you can’t strike a balance to find the space to focus on your top priority.

Here’s to creating the space that you need to drive the health of your business to new heights!

Mike

Leadership and Sleep

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In this age of instant access via phone, text message, LinkedIn, twitter, and other social media platforms, we find ourselves in a 24/7 inundation of information and time constraints.  It leaves less time for ourselves.  How we sometimes get around it is by sleeping less.  A Harvard Business Review study showed that 43% of business leaders indicated that they don’t get enough sleep.  A lack of sleep has shown decreases on executive function capabilities.  This is the area where we process problem solving, reasoning and organizing.

Sleep deprivation has been proven to impair our ability to focus attentively on issues or problems that we want to solve.  A study showed that a person who only slept 4 to 5 hours a night had the same performance as someone with a blood alcohol level of 0.1% which is the definition of drunk in the U.S.

Some of our brightest and best minds of the past century (Churchill, Da Vinci, Franklin…) maintained how it important it was for them to get adequate sleep.  In fact, some had a routine of taking a nap in the afternoon from anywhere between 20 minutes to 45 minutes.

Getting adequate sleep each night, some say between 7 to 8 hours, can be the difference between effective leadership and your cognitive ability to make the right decisions for your organization.

To your health!

Mike

Leadership Through Journaling

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It was suggested to me that I begin a practice of journaling daily.  At first I thought what for?  What would I write about?  How would it help me?  My colleague kept up the pressure for me to start so I thought, okay I will humor them and do it just to say I tried it.

Well over a year later, I am still doing it.  Why?  Because I have found it to be very helpful to write down ideas, situations, or feelings that later I can work on or at least have on paper and not forget.  It also allowed me to start a practice of gratitude that has helped keep me on the positive side of the coin and driving my business and relationships forward.

I was skeptical at first, but as I progressed I became more of a believer in the power of the written word even when it comes directly from me.  I could look back at some of the writing which included goals or plans that I wanted to happen.  And guess what, a lot of if did happen.

It has helped me stay focused on my vision and goals for both business and family.  My moods are boosted by the simple act of writing why I am grateful.  Give it a try.  You have nothing to lose.  At the end of each day take your journal write down anything that comes to mind and finish it up with three things that you are grateful for.  Then you can count your blessings.

Mike

Leadership: Time Management for Decisions

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Studies have been conducted on when its best to make important decisions.  In general, it’s best not to make critical decisions late in the day.  Typically, morning is best.  Our mental resources are put to the test during the day, and as the day wears on, we are getting fatigued.  Sustained engagement commonly leads to cognitive fatigue over the course of the day.  It seems reasonable and yet we still can find ourselves making critical decisions late in the day.

Scientists Shai Daziger and Liora Avnaim-Pesso studied 1,112 bench rulings in parole court and plotted the results throughout the course of the day.  They found judges more likely to deny a request and accept status quo vs a new ruling.  Favorable rulings started high in the early part of a day by fell off precipitously later in the day.

Cognitive fatigue has also been documented with clinical decisions.  Prescriptions increased as the day wore on for physicians.  A study done on Danish student standardized test scores the students performed worse later in the day.  More breaks in the afternoon helped improve performance.

As we tackle our “to do list” we should attend to those items that need focused decision making to be earlier in the day.  And make sure to take breaks through out your day to keep your performance up.

Here’s to making great decisions!

Mike

Simple but Powerful Rules for Business

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Charles “Red” Scott was a President and CEO of several public companies over his career, including Intermark and then Fuqua Industries.  His business philosophy for success in running a business resonates with me, seems timeless, and cuts across all industries.  While simple on the surface, these rules and principles remind us as business leaders of what is important. 

Below are some of Red Scott’s “rules” that I think you will also find are key to business success:

  • Don’t run out of cash. . . no matter what!
  • No surprises: Give fair warning when you hear bad news
  • Never compromise quality for price
  • Plan strategy and set objectives before fixing structure
  • Be careful of a “quick fix”
  • “About right” now is better than “exactly wrong” later
  • Creativity is great. . . but not in accounting
  • Always ask “What if?”
  • Hire smart rather than manage tough
  • Do the “right thing” rather than do “things right”
  • Invest in business with a low cost to exit
  • Hire for attitude, train for skills
  • Be careful: A little success can create a whole lot of overhead
  • “I will” beats IQ every time!

These are just a few business tips that can help you pull through all your circumstances.

To your business health!
Mike

5 Ideas for Becoming a Better Leader

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I recently read a short article that addressed 5 interesting metrics to measure as you build your leadership skills.  The author, Verne Harnish, who wrote the book “Scaling Up” has these key measures that will help you grow the impact of your leadership.

1. Just say “No”. Initially when a business owner is starting out, it pays to say “yes” to a lot of opportunities to network and gain experiences.  However, as you get clear on your strategy, Verne recommends turning this upside down and aim for a ratio of 20-to-1 “No”.  Why?  So you can     get laser focused on getting to the results that you want.

2. Spend time with other leaders. Develop a “meet and greet” strategy with other     influencers in your industry.  Set a goal of how many coffees, breakfasts or lunches to have so that you will gain knowledge from other leaders in your field.

3. Put the highest priorities first. Spend uninterrupted time “in the flow” for at least 90 minutes a day.  Put this on the calendar for every day.  If you don’t focus on your high priority items, they will not
get done.

4. Use a sounding board. Get input from lots of other brains that can help propel your company forward.  Get a brain trust or advisory team who have experience and wisdom that you want to obtain.

5. Make space for thinking. Spend time thinking to let your best ideas incubate. Even Ben Franklin spent time devoted to learning each day.  Reading and thinking are a must for a leader.  As it’s been said “leaders are readers.”

Measure these leadership metrics on a regular basis and you’ll give yourself a chance to take your leadership skills to the next level.
  
Here’s to becoming great leaders! Mike

How to be Successful the Second Time Around

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I recently read an article about a study conducted on over 65,000 Swedish earlier stage start-up companies and their owners who successfully exited one company and moved on to their next company.  It pointed out that the second time around for the entrepreneur was not always a success.     Most business owners after they exit from their business seem ready soon after to start another venture.  This includes business owners that transition to the buyer company, but find out that they can’t work for anyone else anymore.

The second business often under-performs compared to the first one.  Why?  There is no one reason why the same skills and leadership that got them a first successful company exit does not work the second time around.     In some cases, the entrepreneur fails to understand the significance of timing and those “make-or-break” moments where their intuition helped lead the first company to its success.  They sometimes forget or underestimate how much effort it takes and the chance events that got their first company the results needed to succeed.

So what are the ingredients for a happy exit?  It depends on the person; however, some common strategies included: The business owner visualizes what life looks like after exit.  They don’t wait for the exit to happen and then decide, rather they are proactive about it before exiting. Test driving the next venture prior to exiting the first one Setting clear goals, deadlines, and amount of capital that will be committed These are just a few of the ideas that can help a business owner avoid moving onto a second or third business venture that ends up disappointing.

Here’s to your next venture! Mike

Make Your Compliments Count

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One of the best ways to brighten up someone’s day is to give them a compliment.  

However, not all compliments are equal.  In her article “The Secret to Giving a Compliment that Makes People Glow” by Mary Halton, she describes the 3 ingredients for a great compliment:

1.)  Use their name

  • Using someone’s name says you value them as a person

2.)  Compliment something specific

  • Instead of using a generic statement like “Good job,” be specific and say something like “Your singing took me back to my childhood when my family would sing around the campfire.”

3.)  Don’t praise and run out

  • After your compliment, ask a follow up question such as why they chose to sing that particular song

    Compliments can go a long way in building your relationships, so make them count.

Here’s to making it count!

Mike