Culture: Enablement or Accountability? The business owner, “The Boss”, establishes the culture in an organization.  It can be a culture of enablement or a culture of accountability. Often when I am asked to help with a company I discover the culture is one of enablement.  Even worse The Boss is the worst enabler of them all.   Enablement hurts productivity, causes safety issues, and undermines company morale.  Here is an example that drives the lesson home. I was working in my office one day and I got a call from Dave, he was our area OSHA representative whom I knew well.  It is important to get to know these people before they show up at your door for an official visit. I knew Dave from some volunteer work we did together for the area YMCA. He was a good guy and we were on a first name basis.  Well, he called me to tell me he was sitting in his office looking out the window and he saw one of my service technicians working in the bucket truck fixing a lighting fixture.  He said the technician had his lanyard hooked to his belt, not the bucket.  Of course, this was an […]

By the numbers; “Where do Discounts come from, revenues or profit?” Many of my clients have sales staff and pay sales commission on “top line” revenues. I often get the question regarding my opinion on offering a “discount” to close the deal. I usually give The Boss a typical consultant’s answer like, “It depends.” I begin the discussion by asking The Boss where the discount is coming from. They look at me with a somewhat puzzled look and ask, “What are you talking about?” Most of the business owners I work with see discounts coming solely off of “top line” revenues. For example, they may have a $10,000 proposal that is in a competitive situation and their sales person believes they need to discount the job in order to get the work. Together they may believe a $1,000 discount is necessary to “close the deal”. A 10% reduction in price to get the job and reach their revenue goals, keep their people working, and possibly steal a competitor’s customer is acceptable in their minds. It very well may be but we need to understand the full impact of the discount as it pertains to net profit not just “top line” […]

Does it matter how the towels are folded? Once in a while, I get a chance to ride along with a project manager or foremen to visit a job site. This gets me out of the client’s office and onto a job site, but more importantly, it allows me time to talk with employees in a neutral environment, usually a pickup truck. On my last ride-a-long, I heard about a business owner who was a micro-manager. He set the policies and procedures for all areas of his company. Now he has every right to do so but at times it could be counterproductive. In this situation, I asked the employee how he would change a procedure to improve a problem area we were discussing. He gave me a comprehensive outline that seemed to have a lot of merit and could improve efficiencies. I asked if he suggested it to The Boss. He just smiled at me and said, “When was the last time you remember ‘The Boss’ changing his mind?” Well, I thought about it and he did have a point. The Boss didn’t change his mind often, ok seldom if ever. I thought about this ride and the lessons […]

Have you ever worked for someone who could see the future? As young managers, most of us had the privilege of being mentored by an old sage in our organizations.  I remember working with one such person who always seemed to know the future.  He seemed to have the power to see around blind corners and to know what was coming.  I often would ask him, “How did you know that was going to happen?”  Mind you this was way before using “The Force” and “Star Wars” was popular! How does this work?  It is the difference between a reactive or proactive leader.  A proactive leader will anticipate various scenarios the company or organization may encounter around that blind corner.  They are proactively developing contingency plans (strategies) for each of the probable scenarios.  They have those various strategies in their “back pockets”, at-the-ready to employ when the threat or opportunity presents itself.  When the time is right, the proactive leader simply chooses the best solution and takes full advantage of the situation. To the rank and file employees, it looks like the leader knew exactly what was going to happen.  This ability to seemingly be able to see the future […]

Does your company have a seat at the table? For many years I have seen owners of small to mid-size businesses manage their companies like they were one of their children or dependents.  Then when things go awry they call people like me for help.  My advice to them is to “corporatize” their companies. I often see business owners who think of themselves and their businesses as one entity.  These owners act as if the business could not function without them; they feel as if they are the lifeline to the organization.  This is almost always not the case.  Any company which is to be sustainable must not be dependent on any one individual, no matter how important that position is within the organization. To demonstrate this I often pull a chair up to the table where we are working and ask the owner to imagine that the business is occupying that chair.  As you can imagine they look at me as if I’ve lost it!  I ask them if they can personally fund the next payroll.  They usually say, “well no”.  I tell them that the company can and does.  I ask them if they can make rent, make the […]

Lower prices are not always the answer! One of my first “official” jobs I held, not counting the paper route that I had for years, was a clerk at a local grocery store.   One of my first memories of working in the local store was when the owner, Mr. Prellwitz, came to me with a roll of scotch tape and several rolls of new pennies.  He told me to tape a penny, with Lincoln’s head facing up, on each of the loaves of bread which were on several racks lined up against the wall.  So I did exactly what Mr. Prellwitz asked of me but even as a sixteen-year-old high school kid I had to wonder why I was doing this. When I was done, and Mr. Prellwitz came to inspect my work, I asked him; “Why did you have me to do this?”  He said the other grocery store in town was running a promotion and giving bread away to everyone who shopped in their store that day and he was going to “do him one better” and pay his customers a penny to take his bread!  He said it with an aggressive tone and as I remember was […]

I thought I was a good communicator, not so much! At one time in my career, I was a partner in a manufacturing company with a multi-million dollar annual budget.  I pride myself on being a good communicator and I was, at work.  I remember one particular month when we experienced a $20,000 operating loss.  I was frustrated with our poor performance and called all managers into an executive meeting to assess the root cause of the problem and to develop a strategy to correct the operations so we would not have to experience this type of loss again.  I was satisfied we had the problem identified and a good plan of action going forward.  Nonetheless, I was still very frustrated with our poor performance. Later in the day when I arrived home my wife was at the kitchen counter preparing our meal for the night.  She sensed that I was frustrated and asked what was wrong.  I said, “We had a terrible month and lost $20,000.” I immediately went outside to “shoot some buckets” in our driveway.   This was one of the ways I de-stressed at the end of the day.  After a while, I was feeling much better […]

How do you build loyalty in your organization?  One morning Jake came into my office.  He sat down and with a serious look on his face said, “Gary you’re going to have to fire me.”  Of course, “I asked why?”  We had just purchased the company and when you do that you get, “the good, the bad, and the ugly” of the old company.  Jake was definitely part of the good.  He was a certified welder, trained in the military, and a genuinely nice guy. He said that he would not be able to pass the drug test.  We did pre-employment drug testing but did not do it for employees who came into our company through acquisition.  We did do random drug testing and Jake was certain when his number came up he would not pass.  I asked him, “Do you want to leave the company?”  He emphatically said no, but what were his choices.   He knew that everyone was subject to the random drug testing, even the owners, so he was certain we would not make exceptions.  He was right. But in my mind, we did have some options if Jake was willing to comply with certain rules.  […]

I’m much smarter in a room full of people! As I work with small to mid-size businesses, I struggle to convince the business owner that he or she would be much better off with an advisory team.  As business owners we think we are pretty good.  We are!  That’s how we get to be business owners.  But that sense of confidence can also be a deterrent to business owners increasing the owner’s equity in their organizations. A client once said to me, “I can’t talk to my employees, I can’t talk to my spouse, I can’t talk to my banker, who can I talk to about my business challenges?”  This is a problem in a lot of smaller organizations and the answer is “your advisory board”. For most advisory boards of smaller companies the board members are volunteers.  For starters, I recommend inviting your banker, your lawyer, your CPA, and old sage (retired) business professional you know, maybe from your church or Rotary Club, etc.  In my experience an odd number of members is best for voting and I would keep it small to start, seven members at most.  These people may not know your business as intimately as you do, but […]