Growthink Blog

Using Debriefings in Your Business


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We’ve all seen it on TV or in the movies.

Usually the plot includes a military or police agency.

And then some big event happens.

And what’s the first thing they do after the event?

They have a debriefing.

They get one or more of the witnesses in a room and ask them all sorts of questions about what happened.

Debriefings are a type of after action review (AAR).  AARs, which were originally developed by the U.S. Army, are reviews that determine what happened, why it happened, and how performance could be improved the next time the same or similar event happens.

Does your business conduct debriefings?

If not, you might be missing out on a huge opportunity.

Why? Well there are a few reasons.

The first is that the easiest way to be more successful is to figure out what you’ve done that has been successful, and simply repeat it. So, when you debrief after a project, spend time determining what went right. And then make sure to repeat that in the future.

And with regards to what went wrong, this is an opportunity to improve performance in the future.

Importantly, conducting after action reviews discipline your organization to continually learn and improve.

They’re not just about what went wrong. Nor should they only focus on what went right. It’s about both. And once you determine both, you can repeat your successes, fix your mistakes, and make future projects much more successful.


Employee Performance Management: An Interview with Mike Carden


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It's really easy to make fun of big businesses. With all their bureaucracy, they tend to move slowly. And they tend to be difficult to work with.

But there's one thing that big businesses typically do much better than smaller companies. And that is conducting employee performance reviews.

In fact, many smaller businesses focus so much on solving day to day crises, that conducting employee reviews falls by the wayside.

Which leads to problems. Lots of problems.

Here's why:

Companies that succeed have strategic plans.

And, when you conduct periodic employee performance reviews, you ensure that your employees have objectives that are congruent with your company's strategic plan.

So rather than employees focusing on tasks that they think are right, you ensure that they accomplish the tasks that really allow your company to grow and profit.

Without performance reviews, you get lots of problems. Management gets frustrated because employees are not achieving key objectives. And employees get frustrated because they don't know if they're doing a good job or not.

Interestingly, when I recently interviewed Mike Carden, co-founder of performance management review company Sonar6, he told me that most employees really like performance reviews, even when they are underperforming.

He said, "It's sort of like playing golf. Even if you don't play great, you want to know your score at the end."

Carden gave me some other great tips on conducting performance reviews to ensure that you get the most out of your employees and your company achieves its objectives.

Among other things, Carden mentioned that reviews should typically be done monthly and should take no more than 20-30 minutes per employee.

By getting into the habit of conducting monthly performance reviews, you ensure that your employees remain focused on the RIGHT objectives and that you reward them and/or improve their performance more quickly.

To hear a short clip of the interview, click the blue triangle on the player below:




Growthink University members can download the full interview here: http://www.growthinkuniversity.com/members/384.cfm


Keys To Hiring & Retaining The Best Employees


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If you are managing an early stage or growing company, it typically means that you are cash restrained.

And, as a result, you are often unable to pay employees salaries commensurate with what they would earn at larger organizations.

So, how do you manage this and hire and retain the best staff?

In order to do this, you need to understand and manage the four core factors that effect an employee's satisfaction and thus willingness to join your company and/or stay with you.

The first key factor is financial compensation, which includes the employee's salary plus benefits such as healthcare, and any significant perks. For the most part, early stage companies can't compete with larger entities when it comes to these salaries.

However, with stock options and/or profit sharing, smaller companies can better motivate employees and give them the potential to earn even more money then their large organization counterparts should the company succeed.

The second key factor effecting employee satisfaction is lifestyle. Specifically, how does your organization accommodate the employee's lifestyle? Do you offer daycare? Flexible schedules? For some employees, the ability of the employer to accommodate their lifestyle is of critical importance.

The third key factor that employees consider when assessing whether to stay with a company is how much they enjoy their jobs and coming to work every day. Clearly there are millions of workers that hate their jobs. But, for the most part, these aren't the best workers. If they were, they would have lots of other job opportunities.

It is up to the small business owner to create an environment whereby employees enjoy their work. They must enjoy working with the other members of the company, the types of work they are doing, and their work conditions. They must feel that they are a part of the overall company culture. They must get along with their co-workers, and feel their boss appreciates them and treats all employees equally and fairly. And they must receive adequate communications as to company policies and decision-making.

The final factor with regards to satisfying your employees is to ensure that they are learning and developing skills that will further their careers, whether or not their futures lie with your organization or with another organization (preferably they see advancement opportunities within your organization).

Employees need to be continuously trained and have the ability to continually learn so that they become more valuable assets. This training can be formal, and/or it can include learning from trying new tasks and projects.

It is up to the business owner to ensure that employees are given training and projects that expand and improve their skills.

As an entrepreneur and/or business owner, it is your duty to hire and retain the best staff. Since, no one person has the ability to grow a massive empire with the help of others. In building your teams, consider and constantly revisit these four key factors and make sure you create and foster and environment that gives your firm a competitive advantage in each of these areas. In doing so, you will maximize your chances of building a truly superstar company.

Why You Should DOUBLE Your Employees' Salaries


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In a world with a poor economy and uncertain economic outlook, the knee-jerk reaction of most entrepreneurs and business managers is to layoff employees and thus reduce labor costs.

While I agree that reducing labor costs is key, you can oftentimes do this by increasing the amount you pay your employees.

Take the case of The Container Store. This Texas-based company has a unique HR strategy. That is, they have just one employee for every three that their competitors have. But, they pay their employees double the industry average and spend 160 hours training them.

The result is that their employees are better trained and happier, and thus provide superior service at a 33% overall lower cost than competitors.

Interestingly, when The Container Store opened in New York City, it had 100 times more applications than available positions. With numbers like that, they are able to hire the best of the best each time.

Similarly, Harry Seifert, CEO of Winter Garden Salads gives employees bonuses just before Memorial Day, when demand for its products peak. The bonuses boost morale and cause the company's productivity to jump 50% during the busy period.

Paying employees more to improve performance and boost company-wide profits is a historically proven tactic. In fact, back in 1913, Henry Ford doubled employee wages from $2.50 to $5.00 per day. The move boosted employee morale and productivity and caused thousands of potential new workers to move to Detroit.

A final key point to note is that laying off employees is often a bad strategy. While it will save you money in the short-term, in the long-term, hiring new employees and training them is much more expensive than the cost of keeping the employees that you laid off.

Rather, a strategy that you should consider is to ask (or require) employees to take pay cuts and/or offer employees company stock in lieu of a portion of their cash compensation.

Building Your Management Team Might Be Easier Than You Think


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Yesterday I had the privilege of interviewing Matt Ocken, one of the founders of Kindred Partners.

Kindred Partners might be the best at recruiting executives for high-growth technology companies. In fact, some of the top venture capital firms continuously use Kindred to find executives for the companies they fund.

If that’s not enough, consider that Kindred was responsible for placing CEO Meg Whitman at eBay as well as key executives at Google, Amazon and Facebook.

So, Matt was obviously uniquely qualified to answer my questions about how to expertly build your company’s management team.

Matt started by going through the four tactics for building a great management team. Surprisingly, the first tactic was pretty simple and should be used by virtually all entrepreneurs.

The tactic? Figuring out who you already know that could be a good addition to your team. As Matt pointed out, there is a proven correlation between success and a team having worked together in the past. So, if you have successfully worked with someone in the past, your chances of successfully working together again are high. And investors know this and are keen to fund companies led by teams with history of successfully working together.

So, a first step is for the entrepreneur to do an audit of who they have worked with successfully in the past. You could have worked with them in school, at a job or at an organization. Create this list and then narrow it down to include the individuals you truly respect and would like to work with again in the future. Then, contact these individuals to see if they are interested in joining your team.

Note, Jay Turo, Growthink’s other co-founder, and I met at business school. We worked together successfully on a couple of projects during school and were friends. So, Jay was the first person I approached after I had the idea for Growthink. We’ve now run Growthink together for 10 years, so I can personally vouch to Matt’s approach!

Click here to download the interview as an MP3 file and the PDF transcript.

And here is a preview of the first few minutes of the interview (click the blue triangle to play):

 


Key Man Insurance: Why It Is So Important To Your Business


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Did you know that venture capital firms nearly always require the companies they fund to get key man insurance (KMI)?

Well, understanding the rationale behind this fact should give you insight into improving your business operations and structure.

To begin, Key Man Insurance or KMI is a life insurance policy covering a business owner, president or a key employee. The business is the beneficiary under the policy.

The fact that most venture capital firms require KMI explicitly shows that venture capital firms provide funding to PEOPLE, not firms or ideas. It is the people who are able to execute on the ideas. Remember that a good person with a mediocre idea is often much more successful than a poor person with a great idea.

What this does NOT mean is that you should rush out to purchase key man insurance if you are seeking venture capital. What it does mean is that you need to make sure that you have a management team that is worthy of KMI. A team that is so capable of achieving success that investors are actually frightened that their investment would be in jeopardy if something happened to them.

What it also means, and this applies even if you are not seeking venture capital, is that you should create systems to minimize the business risk of something happening to a key employee.

These systems can include:

  • Training manuals that document key tasks performed by key personnel, so that someone else could take over their job requirements in the event that they were out of the office temporarily or long-term

  • A hiring plan that allows you to efficiently recruit and train new personnel

  • Constantly networking and telling people the exciting aspects of your business so that there is a pent-up demand to work at your company

You and your management team are the lifeblood of your business. You always need to be thinking about how to improve, protect and grow your team, as this will have the greatest impact on the long-term success, or lack thereof, of your business.

Sign that Firms are Improving Productivity in Tough Times


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A recent article from the Wall Street Journal suggests that companies are becoming more productive in response to the downturn.

The WSJ noted that in Q4 the decrease in the number of hours worked might have been greater than the contraction in overall economic output. In other words, businesses appear to have increased their productivity. 

Improvements can come from shifting marketing budgets to more easily measurable media (such as internet marketing) as opposed to print and television, renegotiating more favorable contracts with vendors and suppliers, and eliminating redundancies and waste across departments. 

An uptick in productivity would contrast favorably with previous slowdowns in the 1970s and 1980s when productivity lagged.


How are you reacting to the downturn?  What measures have you taken to improve your firm's productivity?


Preparing for a Recession? Don't Make These 3 Common Mistakes


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In times of economic crisis, far too many business owners revert to “safe mode” as panic spreads. A "responsible" course of action typically includes one (or more) of the following:

  • Tightening purse strings
  • Laying off key employees
  • Putting growth plans on the backburner

Doing anything different may be seen as “risky”.

But this conventional wisdom couldn't be more wrong.

An old adage states, "Only dead fish swim with the current," and that philosophy applies to your growing business as well.

Here we highlight the three biggest business mistakes made in tough economic times, and the implications of each:


Mistake #1: Shrinking your marketing budget

When there is less money to go around, budgets get cut. But it's a bad idea to take too many of those dollars away from marketing initiatives.  Actually, if you have the resources, now is the appropriate time to continue (or  expand) your marketing.  Why? Most of your competitors will cut their budgets, out of a “knee-jerk” reaction to the economic downturn -- leaving you a greater window of opportunity to get your message across to your market.  Business owners who “stick it out” during tough times will likely enjoy increased market share once the economy rebounds.


Mistake #2: Laying off key employees


Another, often more challenging decision, is whether to cut staff.  Whatever you do, don’t lay off your top talent. Great people are your most valuable resource -- hold onto them.   In fact, if you’re in a position to hire, now is a great time to hire, because so many other businesses will be shedding their top talent.  


Mistake #3: Putting growth plans on the backburner

Possibly the most damaging long-term effect of a troubled economic climate is when a business chooses to put its growth strategy on hold to "weather the storm."  If you cut back on new product development and innovation today, you will have fewer product offerings when the market bounces back.


Warren Buffet’s recent advice to investors is also great advice for entrepreneurs:

Be fearful when others are greedy, and be greedy when others are fearful.


At Growthink, we advise our clients to pursue their growth initiatives despite the downturn. There is no better time to grow than today.

 


Growthink Launches Turnaround Consulting Service


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If you’ve glanced at newspaper headlines, turned on a television, or read any of our blog posts within the last several weeks, you know that this is a turbulent time for the global market. This brave new world has lead to widespread and palpable effects on small and middle market companies everywhere. The credit crunch, the volatility of the stock market, and the uncertainty of the new political landscape have left many entrepreneurs and small business owners experiencing emotions ranging from mild trepidation, to full-fledged panic.

As scary as the landscape can appear right now, we believe firmly that businesses that look for the opportunities provided by the current climate can position themselves to experience success.  In order to help companies achieve that success, Growthink has launched a new service: Turnaround Strategy Consulting

Simply put, there are numerous steps businesses can take right now to turn the corner. Our decade of experience working with a broad spectrum of firms, from start-ups to Fortune 500 companies, has allowed us to develop comprehensive, analytical methodologies that indentify the cause of financial failures as well as realistic solutions that can be quickly implemented to turn businesses around.

Since 1999, Growthink has provided strategic guidance to companies through rapidly changing markets and economic climates, including the wake of huge economic crises, such as the end of the dot-com bubble and the post 9/11 financial landscape. Even in light of the 2008 “Credit Crunch,” Growthink is able to find opportunities within the chaos and create solid strategies for our clients.

Even businesses that have not experienced dramatic shifts, but have felt a recent downward trend can benefit from Growthink’s consulting.  Improving margins, identifying the right customers, and implementing effective management are all areas that can make a significant difference for any firm in this economic environment.

Additionally, as a full-service firm, our turnaround strategy solutions can examine and assist with all aspects of business growth, from branding, public relations, business planning, web development, internet marketing, and investment banking.

If Turnaround Strategy Consulting can be of use to your business, please visit our service description page here or contact us by phone at 1-800-967-6419.


It Takes Many Good Deeds, and Only One Bad One...


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"It takes many good deeds to build a good reputation, and only one bad one to lose it."  -- Benjamin Franklin.

Fannie Mae.  Freddie Mac.  Bear Stearns.  Countrywide.  IndyMac.  Lehman.  Merrill.  Once strong and even great corporate and financing nameplates now sullied by significant business reverses.

On the flip side: Apple.  Google.  Berkshire Hathaway.  Goldman Sachs.  Firms with gilt-edged reputations and prestige, admired the world over.


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