I periodically read research reports about business failures. I always find them interesting, although often they are depressing.
Such as what I recently read. Which was research from Bradley University in Peoria, IL. This research found that 70% to 80% of new businesses fail within their first year.
And while this was frustrating enough to read, the research further stated that half of those companies which do survive the first year will fail within the next four years.
Now, let's turn to the cause of this failure. According to Dun & Bradstreet, the number one cause of this failure is lack of business planning.
What this essentially means is this: entrepreneurs and business owners don't plan to fail; rather, they fail to plan (which causes them to fail).
In my view, there are two types of business plans. The first is the business plan you must create when you start your company. The purpose of this plan is to ensure you have fully thought through your venture.
Among other things, this plan includes significant market research. It assesses your market size to ensure the opportunity is big enough. It analyzes customer segments to confirm that customer needs match your company's proposed product and/or service offerings. And it analyzes the competition to determine how your company will position itself and how you will most effectively compete.
From a strategic standpoint, the business plan must document your marketing plan (how you will secure customers), your human resources plan (who you will hire) and your operations plan (what key milestones you will accomplish and when).
When you're done, your business plan will confirm your market opportunity and give you a roadmap to follow. It will also be required should you wish to gain funding from investors and lenders.
Now, once your business is up-and-running, you still need a business plan in order to succeed. I refer to this type of business plan as a "strategic plan." I term it as such because this type of plan requires much less research (since you already know who your customers are, the market fundamentals, and lots of information about your competitors). Rather, the focus of this plan is strategy.
Specifically, this plan needs to identify precisely:
1. Where you want your company to be in five years
2. What you need to accomplish within the next year to progress you to that point, and
3. What your strategy is to complete your key milestones in the next 12 months
In determining the optimal strategies, you need to consider your company's strengths, and opportunities that can best leverage them. If you don't take time to do this, you become too tactical. That is, you continue to use the same tactics that have gotten you to the point you are at. And oftentimes, the strategy and tactics that got you where you are today are NOT the strategy and tactics that will get you to the next level.
So, spend time figuring out the best strategies to follow. The good news is that you've already proven you can execute on strategies (which is what got you to where you are now).
After you figure out the big picture opportunities to go after (which often fall into the categories of further penetrating your existing market, going after a new market, or creating new products/services for existing and/or new markets), you need to revisit the three core strategies you developed in your initial business plan.
To start, you need to modify your marketing plan. Importantly, your marketing plan should always be adding new marketing channels (e.g., direct mail, print, radio, search engine optimization, etc.) as the more channels you have, the more customers you will get and the less risk you have of one channel losing effectiveness (think about businesses who used to get all their customers from the yellow pages).
Next, consider your human resources strategy. What new people will you need to hire to accomplish your key goals in the coming years? And finally, you need to develop your operations strategy. Figure out what key tasks and milestones you need to accomplish over the next year and break them down into smaller projects that you and your team must accomplish. And then create a master schedule showing who, how and when these projects will be completed (I like using a Gantt chart to do this).
To achieve maximum success in your business, create a business plan when you start your company, and annually create a strategic plan to grow your company.
The planning process will force you to focus on accomplishing the right things in your business. Since even if you execute flawlessly, if you are executing on the wrong strategies and opportunities, success will elude you.
A great source of funding to start or grow your business is SBA loans.
SBA loans are issued by private banks. However, the United States Small Business Administration (SBA) guarantees a percentage of each loan. What this means is the following: if you, the entrepreneur or business owner, default on the loan (i.e., can't pay it back), the issuing bank only loses a small percentage of the money it lent you. The United States government essentially pays for the rest.
Because of this guarantee program, banks don't bear as much risk and are much more prone to issue SBA loans. This makes it easier for entrepreneurs like you to get these loans. Conversely, without the program, banks wouldn't make as many loans, and fewer businesses would get funding.
When small businesses grow, everybody wins. The entrepreneur can start or grow their business. In doing so, they create jobs. And their employees then have money to buy things. And the economy grows.
Small business funding challenges during the recession
But, as you may have noticed, business owners are still having trouble getting access to capital, namely 1) Small dollar loans, and 2) Loans in the niche industries affected by recession, such as real estate, finance, etc.
If you think about it, most small businesses don't need $1 million or even $500,000, and wouldn't even know what to do with it all. In many cases, even $100,000 can go a long, long way towards boosting revenues (or even doubling them) if invested in more lead generation campaigns, building a sales team, etc.
The odds are you can suffice with a smaller loan amount. In the past this has been more difficult because banks are geared towards extending larger loans since they can earn more interest for the same amount of due diligence per loan.
What the SBA is doing for small businesses
The SBA recently launched two loan-guarantee revisions that simplify and streamline paperwork even more for banks and borrowers.
One of them, the Small Loan Advantage program, is off to a strong start. It allows banks to make loans at more affordable rates, and brings more opportunities to borrow smaller loan amounts, like $50,000 to $100,000 or even less....which is great if that's all you need!
Applying for a small SBA loan from banks
To take advantage of this for yourself, find out which local bank makes the most SBA loans. You can often find this information on the bank's website. Or you can visit the branch or call them. Ask them how many SBA loans they make and how often they fund loans in the dollar range of what you need.
Find the local bank that is most active in the SBA loan program and apply for a loan. If the bank says you're not ready for the loan, don't hesitate to ask them why. Ideally, you can then fix the issue, and come back shortly thereafter and get the loan.
The SBA wants you to succeed as an entrepreneur and business owner. As mentioned, when you do, you will create jobs and stimulate the economy. So consider SBA loans as a funding source; they might be perfect for your business.
Suggested Resource: Want funding for your business? Then check out our Truth About Funding program to learn how you can access the 41 sources of funding available to entrepreneurs like you. Click here to learn more.
On April 4th of last year, the JOBS Act was signed into law. As part of the JOBS Act, equity-based crowdfunding was made legal in the US.
However, before entrepreneurs could start using equity-based crowdfunding, the SEC had to write the specific rules governing it. The SEC was given 9 months to write those rules; they were due on December 31, 2012. However, the SEC failed to meet that deadline.
And, even a year later, on the anniversary of the JOBS act earlier this month, the SEC still hadn't finalized the rules. The good news is that any day, they will. The bad news is that "any day" could mean tomorrow, or possibly 3 to 5 months from now.
Below I'll give you the run-down on Crowdfunding, and also the types of Crowdfunding you CAN raise today.
What is Crowdfunding?
Crowdfunding is getting a group of regular individuals (versus banks, venture capitalists or angel investors) to collectively fund your venture.
What are the 3 Core Types of Crowdfunding?
There are three core types of Crowdfunding.
The first is debt-based Crowdfunding also known as peer-to-peer lending. This is offered by sites like LendingClub.com and Prosper.com. On these sites, entrepreneurs (and individuals) can solicit loans from other individuals. Because they are loans, they must be paid back. Generally these loans are capped at $50,000 per year.
The second type is equity-based Crowdfunding. In this type of Crowdfunding individuals who give you money become investors and own equity in your company. Equity-based Crowdfunding IS legal today, but only when the funders are accredited investors (which entail them meeting certain criteria such as having annual incomes exceeding $250,000).
The final type of Crowdfunding is donation-based Crowdfunding. This type of Crowdfunding is the most popular and is offered by sites including Kickstarter.com, RocketHub.com, IndieGoGo.com and several others.
Donation-based Crowdfunding is my favorite since you neither give up equity nor have to repay the debt you receive. And it's MUCH easier to raise since there are tons more potential funders than funders of debt-based or equity-based Crowdfunding. For example, there are over 3 million registered users on Kickstarter.com.
However, there is an important caveat with donation-based Crowdfunding. Which is this: generally people don't donate money to your cause simply out of altruism. Rather, the companies who have successfully raised donation-based Crowdfunding offer rewards in return for donations.
Specifically, these rewards typically include the product or service the company intends to produce and/or offer. For example, San Francisco's Peter Dering wanted to raise money for a new product he conceived called the Capture Camera Clip System (an accessory for photographers that secures their cameras to their other gear).
So, as a reward to those who donated $50 or more, he promised to ship them the Capture Camera Clip System product when it was developed.
So, as you can see, this type of Crowdfunding is essentially pre-selling your products or services to your customers. Which is really the same as customer financing, which has been around for a while. But, with the internet, it's so much easier to reach tons of prospective customers.
What I also love about donation or rewards-based Crowdfunding is that it is amazing market research. I mean, if customers are willing to buy your product or service before it's even available, you clearly have a winner on your hands.
Which form should you choose?
In choosing the right type of Crowdfunding, here are my guidelines:
Debt-based Crowdfunding: You can raise up to $50,000 on both LendingClub.com and Prosper.com via this type of Crowdfunding. To do so, you will need a good credit score. So, if you have a good credit score, need less than $100K, and you will be able to generate profits pretty quickly that allow you to make the interest payments, then consider this funding source.
Equity-based Crowdfunding: If you require over $250,000 to launch or grow your venture, and the market for your venture is B2B customers (not consumers) and/or you can't immediately provide rewards for funders (e.g., you need $500K to further develop your new technology that might take another 2 years to fully develop), then I like equity-based Crowdfunding. You can either wait for the SEC to finalize its rules, or consider a site like Crowdfunder.com which allows you to raise it from accredited investors.
Donation-based Crowdfunding: If you have a consumer based product or service (or store), then I love donation-based Crowdfunding, because your investors are also your customers. Since this form is legal, you can go out there today and attract hundreds or thousands of investors. And when you do, you also have a built in customer base to buy from you long-term.
In summary, even though equity-based Crowdfunding to non-accredited investors is still not legal, there are other Crowdfunding options you can use today. So, if you need funding now, there's no need to wait.
Today's article was written by my son, Max. Max is 12 years old. I did not edit the article at all. He wrote it for his seventh grade English class.
I personally was inspired by his article. And it made me think about you and all the other entrepreneurs I strive to help succeed. As entrepreneurs, we will experience countless ups and downs. And throughout this process, we need to stay optimistic and have a positive attitude. And we need to enjoy the journey as much as the destination we hope to achieve. Maybe Max has the answer to this.
"This I Believe"
by Max Lavinsky
"LIVE FROM NEW YORK... ITS SATURDAY NIGHT!" The jazz music starts blaring, and I'm in New York City surrounded by mobs of people, walking briskly to where they need to go. I see the faces of hilarious comedians like Bill Hader and Jay Pharaoh. I feel like I'm living in a carefree world. I believe in Saturday Night Live. It can teach us more meaningful lessons than you would expect.
As a young child I had always heard from my parents about this hilarious show called "Saturday Night Live." I can remember being shown little clips of skits from time to time. I instantly fell in love with them. I dreamed of the day when I could watch a full episode, or go into New York City to see a show live. This first time I was able to fulfill this dream, I was in the fifth grade. I had a fever, and I was home from school. I was going in and out of sleep when my mom came in and told me that I could watch something. I turned on the TV and came across Saturday Night Live. Without any hesitation, I turned it on and started watching. Jim Carey was hosting, and in my opinion he is one of the funniest actors ever. In the next hour, I laughed more than I normally would in a month. I forgot about all of my pain. It was crude and offensive, but I couldn't seem to wipe the smile off of my face. After the show ended, I wanted to keep watching.. I had to turn it off of course, but I knew I had just found something I loved.
After having watched Saturday Night Live, I look at everything a little bit differently. The glass is always half full. There is always a little bit of sun peeking out between the clouds. Now, I tend to laugh more. It has also taught me deeper and more important lessons, though. Saturday Night Live can be racist, bias, use terrible stereotypes, and just be flat out horrible. While this is certainly a bad thing, there is some good. It teaches us to laugh at ourselves, and to be able to deal with getting made fun of. This is a skill that many people lack, and it makes them uptight, and without a full sense of humor. If everyone was able to laugh at themselves, maybe nobody would fight. Maybe, we could all live in peace. Maybe, if we could just do something as simple as laugh at ourselves, our world could be perfect. To think that Saturday Night Live could make a perfect world may sound outrageous, but it is not. Things as little as a TV show can change us. To some people that seems irrelevant, and it did to me once. But that of course, was before I watched Saturday Night Live.
So Saturday Night Live definitely has its cons. But while it embarrasses and offends us, it teaches us how laugh at ourselves. Will Ferrell once called Saturday Night Live a "comedy boot camp" because it teaches us how to have a sense of humor and appreciate comedy. So try something new. Watch Saturday Night Live and laugh.
Becoming a millionaire entrepreneur is possible, and many people have shown us how they managed to quickly build empires.
If you are an entrepreneur and are looking for inspiration, then these 5 modern success stories will certainly motivate you.
1. Sara Blakely
For the past 5 years, I have been part of several mastermind groups that have helped me dramatically grow several of my own businesses.
Below I will explain to you what mastermind groups are and how they can benefit you and your business.
What is a Mastermind Group?
As you may recall from last year, the Jumpstart Our Business Startups Act (called the JOBS Act) was passed and signed by President Obama in April, 2012.
The JOBS Act makes equity-based crowdfunding much easier
The JOBS Act makes it possible to raise funds from investors and donors through certain crowdfunding sites in exchange for equity in your company.
This was supposed to start on January 1st 2013. (more on this below).
The key to the JOBS Act is this: it opens up more possibilities in equity funding without the tedious requirements to register your funding as a public offering with the Securities & Exchange Commission (SEC).
If you have tried to raise funds in the past by going the public offering route, you'll know that it's expensive. Being able to bypass all that is huge, especially if you are raising smaller amounts of funding that don't justify such expenses.
The passing of the JOBS Act also means you won't have to seek out accredited investors specifically (people with incomes of $200,000 or more, or a net worth of $1,000,000 or more-not including their residence). Rather, you will be able to get funding from people of all income ranges, which makes the pool of potential investors MUCH bigger.
Imagine how many regular people are out there, who might want to reallocate some of the funds they already have invested in savings, stocks, mutual funds, or other investments that aren't paying so well at present. In the future, funding other businesses might be a much more common way to diversify your capital-that anyone can do and not just accredited investors. Even you!
So, what's the latest?
As mentioned above, equity based crowdfunding was supposed to go live on January 1st 2013. This was predicated on the SEC writing the crowdfunding regulations by December 31 2012 like they were supposed to.
But this never happened. The two key issues regarding why this didn't happen were: 1) a lack of consensus within the SEC decision-makers about the regulations, and 2) the recent resignation of the former chair of the SEC.
Both of these issues are expected to be resolved with the recent appointment of Mary Jo White to head the SEC. White is one serious woman - her career includes serving as the New York prosecutor who brought down John Gotti and put many terrorists in jail.
So, it is expected that within the next 60 to 90 days that Mary Jo White will take the helm and help the SEC write the regulations that make equity based crowdfunding legal in the United States.
How can you prepare for this now?
If you want to raise equity capital later this year and beyond, here's a quick list of things you can do now to be ready when the time comes:
Broaden your network
One advantage crowdfunding sites offer you is having access to more investors and donors than there already are in your personal network. These sites generate their own traffic, and a percentage of your funding will come from people searching those sites or stumbling across it.
As it turns out, enough projects have been successfully funded (using the donation-based Crowdfunding model, not the equity-based crowdfunding model) for experts to be able to look back and say that your project is much more likely to be successful if the first quarter to third of the funding comes from your existing network first. Reason being, they are the ones most likely to believe in and trust you already, and strangers want to see some social proof and credibility in advance before they jump on board.
Deepen your relationships
Do this for the same reason I mentioned above-to get the ball rolling on your funding from your existing contacts. So in the coming months, you should be out seeking new relationships and strengthening the ones you have-specifically with those who are more likely candidates for funding you, or those who are in a position to spread the word for you.
You don't even have to mention funding during this time. Just spend the time necessary to confirm that they have the means and would be interested in your project, while at the same time showing your willingness to serve them and build trust and experience together.
If you're already in business, keep growing it
As with any kind of funding, you will be in a much stronger position to ask for funds if you can demonstrate success in the past. You will have more data available to work into your plan and forecast. And, people want prefer to invest in something that looks like a sure thing-with the least uncertainty. So keep doing what you're doing and you'll be able to show prospective investors your first-half 2013 financial statements and smile.
Work on your business plan
Also, as always, have a solid plan for how much funding you need, how you will spend it, and what effects it will have on your operations and revenues. People want to lend to someone who has thought things through and looks less likely to run into unforeseen problems-especially strangers online! Remember that.
It will also take some time to craft your presentation and pitch. If you plan on using a slideshow or video of some kind (or even just writing it out on your project's page), it will take some time to put that together in advance. But, it's something you can be doing now.
So there it is...equity-based crowdfunding is one more way to get the funds you need to launch or grow your business. Stay tuned to the developments (you'll hear them from me) and prepare for funding like you normally would. This might just be the key to your company's growth!
Suggested Resource: Do you want Crowdfunding? If so, don't try to raise it from scratch -- the 14-step blueprint already exists. Get the Crowdfunding blueprint here.
An effective marketing plan is necessary to grow your business. Among other things, the right marketing plan details your target customers, your unique selling proposition (USP), and your pricing strategy.
And importantly, your marketing plan covers the "channels" you will use to get new customers (known as your "promotions strategy"). These channels include, among others:
While most of these channels require advertising dollars, there are some additional strategies you can employ that are low or no cost. Four such strategies are detailed below.
1. Get To Know Your Competitors
Regardless of what you're selling or the services you provide, you must know how your competitors are doing it. Why? Simple. Because you want to do it better-or at least not get left behind!
Visit their brick and mortar stores to see what they are doing differently this year. And/or take a real close look at their websites and blogs to see what they're doing and the customers they're serving.
Sneaky Tip: When visiting a competitor's blog, make sure to leave high-quality comments on a number of posts. By doing this, you can also mention your website directly or perhaps just indirectly through the Name and Website fields (they turn into a link when your comment is posted).
Once your comment is approved, everyone who sees your comment will be able to click on your link and visit your website.
2. Create Some YouTube Videos
I recently met with representatives from Google who presented some very interesting information to me. Including the fact that more and more consumers and businesses are relying on video in their decision-making process.
Specifically, more and more people are searching YouTube for videos when thinking about making a purchase. And they showed me specific research stating that "1 in 3 small businesses purchased a product or service as a result of watching the related video."
Which means that you need to create videos.
Importantly, these videos can also bring you a flood of new customers.
Here's an example. I created a video entitled "How to Write an Executive Summary for a Business Plan." On YouTube alone it's been viewed nearly 27,000 times. Here's the link: https://www.youtube.com/watch?v=gLAZpFKRgUg
Once again, I haven't shared this video 27,000 times. Rather, people are finding it by searching Google, searching YouTube, social sharing, etc.
3. Use An Effective LOCAL Search Engine Optimization (SEO) Strategy
An effective search engine optimization strategy will get your website on a top position in the search results pages of all the major search engines, such as Google, Yahoo, and Bing.
While ranking at the top of the search engines on generic phrases (like "business plan") is hard, ranking on these phrases locally is a lot easier.
Essentially, all you need to do is choose the keyword or phrase that best describes your business, add your city or area name, and use it in texts that you post on your website (e.g., Business Plan Development Chicago IL).
Your keyword or phrase should appear in the URL of your website and it has to show up in its meta description tag. For example, even though we don't have an office in Chicago, IL, this page on the Growthink website ranks near the top of Google's results for searches on "Business Plan Development Chicago IL" - http://www.growthink.com/businessplan/help-center/chicago-illinois-business-plan-writers
4. Write Newsletters And Send Them To Your Contacts
Keeping in touch with your customers is critical if you want your business to blossom. Information is crucial nowadays. Therefore, make sure that you keep your customers informed with regard to your products and services.
Some businesses do it with a print newsletter, which is fine if the business you generate is worth the costs. But an email newsletter is a much less expensive and time-consuming way to start.
Invite people to subscribe by offering a small discount or freebie, if they are willing to provide their e-mail address. After that, any message you send them is free advertising!
This does not mean that you will have to send a weekly newsletter-they might not be that interested. Instead, write a newsletter with the sole purpose of informing your customers about new products you are adding to your current offer.
Make sure that you mention discounts and advantages. Send these newsletters weekly or monthly at first (but it is better to under promise and over deliver). This will show your customers that your business is serious and it will help create a long-lasting relationship with your clientele.
In conclusion, add these 4 strategies to your 2013 marketing plan, and start rapidly growing your business.
Suggested Resource: Growthink's Ultimate Marketing Plan Template allows you to quickly and expertly create your marketing plan. This template includes multiple proven strategies for attracting new customers and dramatically boosting your sales and profits. Click here to learn more.
One of my friends works for a multi-billion dollar cable company. And his role is extremely interesting. Specifically, he's charged with figuring out what the company needs do to now so that it will be competitive ten years from now.
Imagine that? 10-year planning. For most businesses, it's inconceivable to do this. But for a cable company, it could take years to implement changes such as installing cables to hundreds of thousands of homes. So, he spends his days researching, analyzing and theorizing over what the world might look like in 10 years and what the company needs to do today to start preparing for it.
And I'd like to think that he, and perhaps those before him, have done a great job at this. Because while 10 years ago I only use my cable company for television service, today I pay my cable company for television, internet access and phone service.
Break-Even Thinking Doesn't Work
But what about your business? Do you need to plan 10 years into the future? The short answer is "no." But it's important to point out that any planning is significantly better than no planning.
In fact, for most small businesses, planning generally tends to be more along the lines of thinking "what do I have to do to have enough revenue to pay the bills for the next month?" Missing from this thinking are the critical long-term decisions and directions on how to grow the business, increase its revenue, and expand market share.
And what inevitably happens is this: if your immediate focus is just trying to break even, your business often ends up just struggling rather than growing.
The solution is to develop a five-year plan, and using it to guide daily operations.
How It Works
A five-year plan is not a set of financial pro-forma statements and twenty pages of text and history on your company. Rather it must incorporate real thinking about 1) what goals you want your company to achieve, and 2) what goals every key division of your company must achieve.
Specifically, you must document the revenues and profits your company seeks to achieve in 5 years and then set similar goals (with different metrics as appropriate) for each operational area (e.g., marketing, fulfillment, etc.).
This in turn becomes the basis of the roadmap you'll use to grow our organization.
Use The Map
Ironically, after putting considerable time and effort into building a 5-year strategic plan, many business owners and managers never look at it again.
To avoid this, work backwards and document shorter term goals. Let me explain. Now that you know what you need to achieve within 5 years, determine what you need to achieve this year in order to make solid progress towards your 5 year goal.
Next, figure out what you must achieve this quarter to progress to your annual goal. You can break this down even further to figure out what you must accomplish this month to reach your quarterly goal.
This process allows you to set monthly goals that progress your business. Document these goals and share them with your team so you can accomplish them.
And importantly, use these short-term and long-term goals in your daily decision making. For example, is forging a relationship with a new partner in line with your goals? Or is it another distraction that will take time and prevent you from reaching them?
Also, use the shorter-term goals to measure your success. Are you meeting revenue goals? Do you have the amount of clients you projected for this time of the year? Use objective measurements that will not allow you to fudge your results. Your shorter-term goals give you a black and white, hopefully not red, assessment of where you stand in accordance to your goals.
Keeping your five-year plan alive is like having an up-to-date, accurate map of a foreign city when first walking its streets. It allows you to not just think about breaking even, but to reach specific performance targets and goals.
When people have a clear idea what to strive for and how to get there, even when challenging, they perform better. That translates to improved operations which also eventually improves revenues and profits for your company.
A five-year plan and periodic short-term goals also does away with complacency. When a business is in the "break-even" mode, it's only thinking about the immediate demands, never pushing to do more than just what's needed to meet the given threshold. Processes become routine and complacency sets in.
Your 5-Year Plan Must Be Updated
It's important to remember, however, that your five-year plan needs to be updated regularly. Markets, environments, customers and regulations change over time, all of which have an impact on a business and its profit margins. For example, the recent healthcare laws enacted by the federal government impose new health plan requirements on businesses of a certain size. Clearly, businesses did not consider this regulatory change in their five-year plans back in 2010.
So, update your five-year plan annually to reflect new changes, new ideas and new goals.
Finally, your five-year plan is only as good as the effort you put into it. The components, goals and targets have to be well thought out so as to be realistic and achievable. When you do this, and when you break down your 5 year goals into annual, quarterly and monthly goals, you will know precisely what to do to grow a thriving business. For help with this process, download my strategic planning template.
This is a true and pretty ridiculous story that happened to me at my first job. It was about 20 years ago and I was working at a market research firm.
After working in the job for nearly 6 months, I had an idea for a new product. You see, our company had been selling access to a large database of information to our clients. My idea was to better package the information.
Specifically, my idea was to create pre-defined reports from the information that allowed them to access key
pieces of data quickly and easily. This would not only help existing clients, but it would open the door to new clients who only wanted the specific information rather than paying for full database access.
Instead of asking approval to launch the new product, I used my spare time to actually create it. I then showed it to the VP of my division.
So what do you think happened?
I got yelled at.
Seriously, the VP was angry at me. He questioned my immediate boss as to what
I was doing and why I had invested time in creating something new.
Obviously this was not a very entrepreneurial company.
But what I found most interesting about the event was how much face time I
got with the VP.
You see, that VP was what I consider to be a "stealth manager." That is, he pretty
much sat in his office, door closed, day after day after day.
So he really had no idea what everyone was doing. So he didn't know that I created
the new product after hours, and that between 9 and 5, I was accomplishing all the regular tasks assigned to me.
In fact, he didn't know much about anything that was going on.
And the result -- the employees were not inspired. We were not motivated. We lacked a clear vision of what the organization was trying to achieve.
And all this resulted in lackluster performance.
We didn't go out of business. But we certainly weren't growing like gangbusters like we should have been.
Think about your days. Are you a stealth manager? Are there others at your organization who are stealth managers?
Stealth management doesn't work. Effective leaders and managers walk around and speak to their employees. They listen to them. They inspire them. Because effective leaders know that it's the employees who make or break their companies. They (the leaders) are the conductors of the orchestra -- without the players (the employees), there is no music.
Here are 5 things you can do TODAY to quickly break out of the "stealth manager" mode (and make your team more productive).
1. Walk around the office
Simply walk around to see what everyone is up to. Don't make it seem like you're Big Brother checking up on them. But rather, be very casual about it (the next points will give you some talking points to help with this).
2. Ask people what they are working on
Ask people what they are working on, and then really listen to their answers. Ask them why they are completing a task a certain way, and as appropriate, suggest another way they may accomplish it. Not only will they appreciate this mentorship, but you could improve their performance.
3. Tell someone/several people they're doing a good job
Tell at least one person that they're doing a good job. Let them know you found real value in something they accomplished recently.
4. Buy cookies
I don't know many people who don't like cookies. Come back from lunch with cookies, and either hand them out or put them in a main area. In either case, let everyone know that you bought them "just because." Even those on a diet who refrain from eating them will appreciate the gesture.
5. Picture each of your team members as they looked when they were toddlers
This will force you to smile when you see them. And that smile alone will brighten their day.
Great companies are not built by one entrepreneur. They are built by entrepreneurs who inspire their employees to accomplish great things. Make sure you keep this top-of-mind, since if your employees don't succeed, neither can you.