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Keeping Your Employees Safe - Part 4

Beth Philley ProBiz President — Fri, 02 Sep 2011 22:05:00 GMT

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Click here for part 2
Click here for part 3

Accident Reviews

After an accident or near miss, it is vital that responsible parties review the incident to find out what went wrong and how it could have been avoided. The goal of an accident investigation is not to place blame, but to enable corrective action to prevent future injury. Once the investigation is completed, the results should be shared with all employees. It can be particularly effective to have the injured employee make the presentation, telling his peers not only what he did, but also what he could have done differently.

During the employee's presentation, he may also want to discuss how the accident impacted his life. It is tough sometimes to make employees care about the impact the accident had on your company's profitability, but they will sit up and take notice when an employee tells them about the life-altering changes their spouses and kids may have gone through as a result of their injuries.

Ask your each employee to think about the last time someone in his home was ill. Ask them to remember how everyone’s schedule had to be adjusted to take up the slack or to tend to the ill person. Ask them to imagine if it had been an injury with a long recovery period or a fatal accident. What might their families have had to deal with?

You may also want to post a visual representation of the accidents incurred at your facility. For example, you can post a drawing of a worker, with a bandage on each body part that has been injured over the past year. Even though each accident may seem minor, the cumulative effect of many injuries can be seen clearly as the drawing becomes covered in Band-Aids.

Keeping Your Employees Safe - Part 3

Beth Philley ProBiz President — Wed, 31 Aug 2011 22:04:00 GMT

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Key elements of human performance improvement

Providing safe equipment starts early in the design phase, although most machinery can be retrofitted to correct any original design flaws. For example, if you have a machine that requires the operator to turn a small knob that is located between two posts, it may be very difficult for a worker wearing protective gloves to accomplish the task. It may be that the machine was designed in the "good old days" when employees worked bare-handed, but with current OSHA standards, they are now required to wear bulky gloves. If you leave the machinery the way it is, you are virtually forcing your employees to violate an OSHA standard. However, if you can move the knob or move the posts, you allow the employee to work safely. And when it becomes time to replace the machine, your workers can tell you exactly how it should be redesigned so that the new machinery is safer than the old. Be sure to consider not only safe operation, but also safety when moving and cleaning the equipment.

Providing clear instructions and job aids includes using understandable language, clear fonts, adequate size, and the appropriate level of detail for the risk. For example, if you are writing instructions on how to operate a typewriter, chances are the information would be relatively general. However, if you are writing instructions on how to disarm a bomb, you might be much more specific and detailed. Have someone who doesn't operate the equipment read through your instructions to see if they are sufficient to complete the task safely. Consider the literacy level of your employees, as well as any language barriers if you have people on your staff whose first language is not the same as yours. Post or file the instructions where they can easily be seen when needed.

Providing sufficient training means that your job isn't done when your employees graduate from a class. You must follow-up on classroom learning with simulators or actual on-the-job training until you are sure each employee is fully capable of doing a task safely. Complicated or high risk procedures should be reviewed often, and tasks which are only done sporadically should be reviewed each time before they are to be performed.

Providing ways to detect and correct human errors involves training your employees on the STAR technique, comprised of:

Stop to organize your thoughts. Make sure you are not distracted.
Think about the procedure you will follow, the risks involved, the other people who may be in the area, and the environment around you.
Act by performing the task carefully and safely.
Review to make sure the task is completely done and that no hazards are left in the area. If anything went wrong, notify the appropriate people so that remedial action can be taken to make sure the same problem doesn't occur the next time the task is performed.

Of course, you will not use the STAR technique every time you staple a sheaf of papers together, but for work which involves significant risk, it is a good technique to use, particularly if the work is done by one person rather than by a crew.

If a crew is involved, a job briefing may be in order so that each person knows what is expected of him, and everyone knows the correct sequence in which the tasks are to be performed.

Keeping Your Employees Safe - Part 2

Beth Philley ProBiz President — Mon, 29 Aug 2011 21:56:00 GMT

Click here for part 1

Old school managers often think that the way to improve safety performance is to find out who is responsible for each accident and punish that person. The problem with that approach is that usually you are punishing someone who is already in the hospital or recuperating at home. The idea was that if employees knew they were going to be punished for having an accident, they would be less likely to have accidents. This philosophy only makes sense if you believe that workers set out purposefully to injure themselves.

If you believe instead that workers have just as big a stake in their safety as you do, and that injuries are most often the result of mistakes and accidents, you can see that punishment is not a realistic way to make your company safer. A much more productive way to accomplish your safety goals is to design your equipment, environment, and procedures to help employees avoid errors that could result in injury. This will address (in most cases) about 80 - 85% of the injuries in your workplace.[i]

According to the principles of human performance, there are several ways in which companies unintentionally set up employees to make a mistake that can result in an injury. These error-likely situations include:

Deficient procedures such as lack of warnings, or processes that are inconsistent with user needs
Poor communication such as incomplete instructions, or vague verbal directions
Inadequately trained workers
Conflicting interests such as productivity vs. safety or operations vs. maintenance
Inadequately labeled equipment
Poorly designed equipment such as those that have pinch points or require the worker to be a contortionist to reach the relevant parts to operate or clean

A comprehensive safety program provides the resources necessary to identify and eliminate error-likely situations, preferably by involving line employees in the process.[ii]

Involvement of employees in the safety program pays huge dividends because it creates buy-in and gives credibility to the program. When management tries to introduce a safety program without worker involvement, it can often lead employees to rebel against the program. However, when people who are actually doing a job are involved in finding ways to do it more safely, both the people who are involved and the people who work with them tend to find the program a little more palatable and are more willing to cooperate with new procedures and rules that may be drafted.

[i] Lorenzo, Donald K. Heuvel, Lee N Vanden, Rooney, James J. Improve Safety by Improving Human Performance. Chemical Engineering Progress, August, 2006.

[ii] Ibid.

Keeping Your Employees Safe - Part 1

Beth Philley ProBiz President — Fri, 26 Aug 2011 21:53:00 GMT

Nearly fifty workers are injured every minute of the work week, and about seventeen workers die on-the-job every day. If for no other reason than that you don't want to be the person who has to call the employee's spouse after an injury, you should be interested in your workers' safety.

If that's not enough to make you read this chapter, consider the costs injuries add to your business. In addition to the direct costs associated with an injury such as doctor's bills and medication, there are huge indirect costs, which may be as much as 20% higher than the direct costs. Indirect costs for an accident can include training and compensating replacement workers, repairing damaged property, accident investigation and implementation of corrective action, scheduling delays and lost productivity, low employee morale and increased absenteeism, and poor customer and community relations.[i]

What's more, Workers' Compensation covers only about 27% of these costs, while taxpayers cover about 18%. The rest is the cost is split between the injured worker, the company (lower profits) co-workers (lower pay), and consumers (higher prices).[ii]

Think it can't happen to you? You should know that small firms, particularly those who think they are too small to need a safety program, have exceptionally high injury rates.[iii] To give you an idea of the large impact a relatively minor accident can have on your company, Lee Smith gives the following estimate: To cover the indirect cost of an accident that had $500 in direct costs,

A beverage bottler would have to bottle and sell 61,000 cans of soda
A bakery would have to bake and sell 235,000 donuts
A subcontractor would have to deliver 20 truckloads of concrete[iv]

Even your employees know that safety is important. According to a study recently completed by the University of Chicago for the Public Welfare Foundation, more than 85% of workers rate workplace safety first in importance among labor standards, even ahead of family and maternity leave, minimum wage, paid sick days, overtime pay, and the right to join a union. The study also found that about 12% of workers reported an on-the-job injury during the past year. [v]

What can a good safety and health program do for your bottom line? According to a White Paper created by the American Society of Safety Engineers, safety and health programs improve a company's bottom line through outright savings on worker's compensation benefit plans, civil liability damages, and litigation expenses, as well as by improving employee productivity and morale. In addition, they note, "it can also make the difference between winning and losing bids and even government contracts."[vi]

Managing Safety by Improving Human Performance

The top ten causes of disabling injuries in 2009 were

10. Assault

9. Worker strikes part of body against an object

8. Repetitive motion injury (such as carpal tunnel)

7. Worker is caught in or compressed by something

6. Highway incidents

5. Worker is struck by a moving object

4. Worker twists or turns in reaction to slipping or tripping without falling

3. Worker falls from one level to another

2. Worker falls on level ground

1. Overexertion[vii]

If you look closely at these top ten causes, you will notice that most, if not all, of them have at least an element of human performance error, which is why managing safety by managing human performance makes so much sense.

[i] Smith, Lee. Do You Know How Much Accidents are Really Cutting Your Business? Colorado State University Health & Safety Consultation Program, 1996.

[ii] Leigh, J. Paul, Markowitz, Steven, Fahs, Marianne, Landrigan, Philip. Costs of Occupational Injuries and Illnesses. Frontline. University of Michigan Press, 2000. Retrieved November 2, 2010 from http://www.pbs.org/wgbh/pages/frontline/shows/workplace/etc/cost.html

[iii] Ibid.

[iv] Smith, Lee. Do You Know How Much Accidents are Really Cutting Your Business? Colorado State University Health & Safety Consultation Program, 1996.

[v] Smith, Tom W. Public Attitudes towards and Experiences with Workplace Safety. Prepared at the National Opinion Research Center at the University of Chicago for the Public Welfare Foundation, August, 2010.

[vi] American Society of Safety Engineers White Paper Addressing the Return on Investment for Safety, Health, and Environmental Management Programs. Retrieved November 2, 2010 from http://www.asse.org/professionalaffairs/govtaffairs/ngposi10.php

[vii] 2009 Workplace Safety Index (reviewing accidents from 2007). Liberty Mutual Research Institute for Safety.

Respect Your Employees - Part 2

Beth Philley ProBiz President — Wed, 24 Aug 2011 21:48:00 GMT

Click here for part 1

If you think you are always respectful, keep in mind that what really matters is whether or not your employees perceive you as respectful, and what they perceive as your motive for being respectful.

In a study reported in the Employee Responsibilities and Rights Journal, Daniel J. Koys notes that an employee's commitment to the organization is positively related to the perception that Human Resources Management is motivated by "a) management's desire to show respect for the individual and (b) management's desire to attract / retain employees." Conversely, when employee perception is that an employer is treating them with respect only as a means to improve performance or to comply with employment law, "there is no significant relationship with organizational commitment."[i]

So, by now you should be convinced that employees like for you to respect them, but what's in it for you and your company? Plenty, as it turns out. According to Barlow and Moller, "Customer satisfaction is closely tied to employee satisfaction. Customers get their needs met through product and service quality; employees get their needs met through rewards and recognition, career development, and job excitement."[ii] If you respect your employees, you will have a positive effect on customer satisfaction. How could that be a bad thing?

The positive effect of respect on employee satisfaction is echoed by Geri Stengel, writing for the vblog Ventureneer, the upsides of providing respect to your employee are:

Less turnover, which translates into lower training costs;
A much larger pool of ideas from which new products/services can be developed or problems solved, leading to more profit in the long run.
Employees whose investment in the success of the company translates into better customer service, which means better and longer-lasting relationships with clients.
A flexible, trained staff that can respond to crises efficiently.[iii]

She concludes with the following:

Small businesses with good employment policies reap the benefits of loyalty, dedication, and creativity from their staffs and, besides, it's a no-brainer that people work better when they are well-rested; not stressed about medical bills or child-care; and not resentful that their work is unappreciated and under-rewarded.[iv]

Putting it more concisely, a Spanish Study of savings banks found that "those savings banks that have institutionalized high-commitment practices toward employees have greater profitability."[v]

Still not convinced? No less an authority than Dr. Stephen Covey states that respect for people is "of profound importance because it means you are caring and you trust them to do the right thing."[vi]

[i] Koys, Daniel J. Human Resource Management and A Culture of Respect. Effects on Employees' Organizational Commitment. Employee Responsibilities and Rights Journal 1(1): 57 - 68. March, 1988.

[ii] Barlow, Janelle, and Claus Moller. A Complaint Is a Gift: Using Customer Feedback As a Strategic Tool. San Francisco: Berrett-Koehler Publishers, 1996.. ISBN 978-1881052814.

[iii] Stengel, Geri. Surprise! Respect for Employees and Fair Pay are Profitable for Small Businesses...and It's Not That Hard. Written February 4, 2010. Retrieved November 1, 2010 from http://ventureneer.com/vblog/surprise-respect-employees-and-fair-pay-are-profitable-small-businesses-and-its-not-hard

[iv] Ibid.

[v] de la Cruz Déniz-Déniz, María and De Saá-Pérez, Petra. A Resource-Based View of Corporate Responsiveness Toward Employees. Organization Studies 24(2): 299-319. February, 2003.

[vi] Graban, Mark. LeanBlog Podcast # 91 - Dr. Stephen Covey on Respect for People and Lean. Retrieved November 1, 2010 from http://www.leanblog.org/2010/05/leanblog-podcast-91-dr-stephen-covey-on-respect-for-people/#ixzz143hlgf24

Respect Your Employees - Part 1

Beth Philley ProBiz President — Mon, 22 Aug 2011 21:44:00 GMT

Once you have an employee or two on-board, don't forget that you hired the best. Respect their abilities and skills, and get out of their way. You might think that you show your respect for your employees by signing their paychecks every two weeks, but that is just a bare minimum of what employees expect from their employer.

Human Resources expert Susan M. Healthfield lists respect as the first factor on her short list of employee expectations. In an article written for About.com, she states: "Respect is the fundamental right of every employee in every workplace. If people feel as if they are treated with respect, they usually respond with respect and dignified actions."[i]

In a separate article, she lists ten things employers can do to demonstrate respect. Many of these are covered in other chapters in this book, but it's instructive to list them all here so you can see how they work together to create an atmosphere of respect within your company. As you can see, most of them have their origins in the lectures your mother and Sunday School teacher used to give you. They really are just that basic:

Treat people with courtesy, politeness, and kindness.
Encourage co-workers to express opinions and ideas.
Listen to what others have to say before expressing your viewpoint.
Use people's ideas to change or improve work. Let employees know you used their idea, or better yet, encourage the person with the idea to implement [it].
Never insult people, name call, disparage or put down people or their ideas.
Do not nit-pick, constantly criticize over little things, belittle, judge, demean or patronize. A series of seemingly trivial actions, added up over time, constitutes bullying.
Treat people the same no matter their race, religion, gender, size, age, or country of origin.
Include coworkers in meetings, discussions, training, and events [where possible.]
Praise much more frequently than you criticize.
Implement the platinum rule: treat others as they wish to be treated.[ii]

Because these rules are so basic, you might choose to rush through this chapter, thinking, "Well, of course, I always treat my employees with respect," but I would challenge you to stop and think for a moment about whether you really do so consistently.

In the rush to get all the work done in a limited amount of time, do you ever rush to make a decision without considering employee input?

How open are you to employee suggestions? After all, you built this company and you got along just fine before you hired them and all of their newfangled ideas, right?

Do you really praise more frequently than you criticize? Many sources recommend you maintain a two-to-one ratio of praise to criticism. It's actually pretty hard to keep that up, and I would be surprised to find anyone doing this continually without conscious thought. I'm a pretty positive person, and I know for a fact, I do not maintain a two-to-one ratio because I've tracked myself before.

[i] Heathfield, Susan M. Five Factors Every Employee Wants From Work. Retrieved November 1, 2010 from http://humanresources.about.com/od/managementtips/qt/four_factors_b4.htm

[ii] Heathfield, Susan M. How to Demonstrate Respect at Work. Retrieved November 1, 2010 from http://humanresources.about.com/od/workrelationships/a/demo_respect.htm

Entrepreneur's Handbook: Hire the Best - Part 3

Beth Philley ProBiz President — Wed, 17 Aug 2011 21:41:00 GMT

Click here for part 1

Click here for part 2

Writing job descriptions may seem like a waste of time when you have so many more pressing things to attend to, but writing a good job description in the beginning can save you from much wasted expense in the long run. Remember that hiring the wrong person can cost as much as 15 times the base salary. Isn't it worth it to have a good job description to compare the candidates against if it gives you a better chance of hiring a top performer?

After the job description attracts the most qualified candidates, each and every interaction between the applicants and the organization should be reviewed when selecting among the candidates.[i] Whether the interaction is simply a phone call to set up an interview or the nonverbal exchanges that may take place during the interview itself, variations in how the applicants behave can provide a means of differentiating between otherwise equally qualified applicants.

For example, when phone calls are made to set up interviews with the selected applicants, it is likely that someone other than the interviewing manager will be making the calls. Rarely is this appointment setter consulted when making the hiring decision, but he may have observed certain things during the phone calls that could indicate the person's fit with your company. Perhaps the person has a ringback tone that is offensive, or maybe the person was totally drunk when the call was placed at 9 am.

When the candidate arrives for his interview, have your receptionist discretely observe the person as he waits. Does he make an attempt to make conversation with others in the waiting room? Does he fidget nervously? Is he rude or disrespectful of others?

During the interview itself, it is sometimes helpful to have an observer or a note-taker in addition to the person asking the questions. An observer simply watches the candidate while the interviewer may be looking down to take notes, or a note-taker allows the interviewer to observe the applicant himself. Either way, any non-verbal cues the candidate is giving will not be missed. If he picks his nose or makes a face when he thinks no one is looking, that might be a good thing to know before you make your final hiring decision.

Of course, the substance of the interview is of prime importance. The things you will look for are often spelled out as competencies, meaning the things people ought to be able to do well if they want to be hired. But which competencies are most important? Ask 100 management and human resources professionals what you should look for when interviewing, and you will get 100 different answers.

Bradford Smart, the man who brought us Topgrading, says the most important competencies are vision, intelligence, leadership, passion, resourcefulness, and customer focus.[ii] As early as 1981, David Ostroth suggested that the things to look for are the ability to work cooperatively with others, interpersonal relations and communication skills, the ability to work effectively with a wide range of individuals, and leadership skills.[iii]

A more recent study (from 2006) states that both interpersonal and technical competencies are important and intertwined.[iv] Some would even suggest that there are differences in the competencies one would look for, based on the gender of the applicant. However, this was refuted by a 2007 study published in the Journal of Management Development. This study did point out, however, that males were likely to be assessed as more successful, even when their female counterparts demonstrated an equivalent level of competencies.[v]

The truth is that the competencies you look for depend in great part on the specific job for which you are hiring. For example, you wouldn't likely be concerned about leadership qualities in a manual laborer, although this would be enormously important in a manager. Likewise, customer service skills would be much more important in an employee who is dealing with customers than in an bookkeeper whose only contact is with her adding machine.

Similarly, the type and style of company you run will also determine what you are looking for in employees. A down-home mom-and-pop grocery store needs employees who are able to visit with the populace and provide advice on a wide range of products. Conversely, an employee at a major metropolitan supermarket would be expected to process customers with speed and efficiency, without a lot of chit-chat.

Before you start interviewing, it is well worth your while to spell out the competencies most important for your style and type of company, as well as for the position you will be filling.

[i] Ibid.

[ii] Bradford D. Smart. Topgrading: how leading companies win by hiring, coaching, and keeping the best people. Portfolio,2005. ISBN 1591840813

[iii] Ostroth, D. David. Competencies for Entry-Level Professionals: What Do Employers Look for When Hiring New Staff? Journal of College Student Personnel 22(1): 5 - 11, January, 1981.

[iv] Reio, Thomas G. and Sutton, Faye C. Employer Assessment of Work-Related Competencies and Workplace Adaptation. Human Resource Development Quarterly 17(3): 305-324, 2006.

[v] Hopkins, Margaret M. and Bilimoria, Diana. Social and Emotional Competencies Predicting Success for Male and Female Executives. Journal of Management Development 27(1): 13 - 35. 2008.

Entrepreneur's Handbook: Hire the Best - Part 2

Beth Philley ProBiz President — Mon, 15 Aug 2011 21:37:00 GMT

Click here for part 1

Using a Job Spec to Attract Top Talent

Given that hiring the right person for the right job at the right salary is so important, what should you look for when hiring and promoting people in your organization? According to a recent study in Library Leadership and Management, one of the keys to successful hiring and promoting lies in the writing of the position description.[i]

A good position description will include the fundamental responsibilities of the job, as well as the role the position plays in the overall organization. A well-written position description is key in attracting candidates who are qualified for that job. By contrast, vague or poorly-written job descriptions can attract people who may or may not be what you are seeking. Consider the difference in these two position descriptions:

==================================================================

A: Girl Friday for busy law office. Must have basic clerical skills and be available for overtime.

==================================================================

B: Position Summary: Clerical support person for law office, reports to senior administrative partner and is responsible for all clerical duties as assigned by three of the firm's partners and two of the firm's paralegals. Equipment to be used: Mac computer including legal software, word processing software, and spreadsheet software, copy machine, ten-key adding machine, multi-line phone, and coffee-maker.

Responsibility and Authority: The incumbent in this position is responsible for and has the authority to accomplish the following: typing legal briefs as dictated, researching precedents through online law library, filing documents with local courthouse both electronically and in person, greeting clients and making them comfortable with a beverage, tracking billable hours, keeping day planners current, assuring most efficient use of time for all assigned attorneys, and answering phone calls / taking messages.

Position Requirements: High school diploma or equivalent, ability to successfully coordinate multiple tasks, ability to juggle priorities as situations develop, keyboard speed of at least 80 wpm, physical fitness to allow lifting of large law books.

Estimated time to full competence: 18 months.

Other considerations: Must be able to maintain proper decorum in a law office. Must be able to contribute in a team setting. Must be able to work overtime when needed.

==================================================================

As you can see, position description A reads more like a classified job posting, where the writer is paying by the number of characters in the posting. Comparing a pool of candidates to this job description gives no basis for separating the wheat from the chaff. Virtually every candidate who applied for the job would qualify.

However, with position description B, we get a much clearer picture of what is involved in the day-to-day flow of work. We know from the equipment involved that the candidate must know how to make coffee, make copies, use a Mac computer and associated software, and answer a phone. The responsibilities and authorities section makes it clear that the candidate must be able to deal with working for several bosses. The position requirements give a specific standard which must be met before a candidate can even be considered, while the estimated time to competence assures the candidate that he or she will not master the job within the first week of employment. The other considerations section gives an inkling that proper attire and composure is required, as is the ability to work well with others and to keep working until the job is done.

Obviously, you would never post a help-wanted ad in the newspaper as detailed as the B position description, but with the growth of online job boards, you likely won't be posting many positions in the newspaper anyways. A properly-written job spec can also be used in-house when considering existing employees for a job opening.

[i] Kaspar, Wendi Arant and Mosley, Pixey Anne. Making the Good Hire: Updating Hiring Practices for the Contemporary Multigenerational Workforce, Part Two. Library Leadership and Management 22(3): 14 2 -147. Summer, 2008.

Entrepreneur's Handbook: Hire the Best - Part 1

Beth Philley ProBiz President — Fri, 12 Aug 2011 21:29:00 GMT

When you first start out you may be the only employee your company has, but with growth, you might have to hire help. Employees are one of the most costly assets you will have, so you will need to make sure you are getting the biggest possible bang for your buck.

In his book Topgrading: How Leading Companies Win by Hiring, Coaching, and Keeping the Best People[i], Bradford Smart divides labor talent into three levels: A, B, and C. Most companies hire A talent for about one-fourth of their jobs. A talent is defined as those people who are in the top 10% of the available labor pool for the pay level. The remainder are Bs and Cs.

It is Smart's contention that each company should strive to hire only A talent, should promote only A talent, and should have only A talent in management. He acknowledges, however, that as business needs and people change over time, most companies will probably achieve 90% rates of A talent in new hires, promotions, and management. Moving from 25%, where most companies live, to 90% where topgrading companies perform, is attainable, in part because top talent attracts more top talent.

Once you have an A-level manager in place, that manager should be able to recognize, hire, and coach employees at the A level. However, if you have a C manager doing the hiring, he may not be able to impress the top talent from the interview pool sufficiently to encourage them to accept a job offer from your company.

Cost / Benefit Analysis of Topgrading

When the wrong person ends up in the wrong job, it can cost a company as much as 15 times the base salary for the job. This takes into account such costs as hiring the person, paying the salary which is higher than the value of the work you are getting from him, giving him a severance package when you can off-load him, correcting his mistakes, missing out on certain opportunities you wouldn't have missed if the right person were in the job, and paying for the lost productivity and disruption when the person finally leaves the company. In Smart's view, half of all employment decisions result in mis-hires, meaning that the cost of bad employment decisions might be as large as 15 times half of your annual salary budget. Is that something your company can afford?

Smart also points out that hiring the best is not cheap. Based partly on the law of supply and demand, salary ranges must be set by conducting compensation surveys to determine the market rate for various jobs. If you offer too low a salary, you will get people who are very competent in that salary range, but not necessarily competent at the salary range commensurate with the expectations of the job. If you offer too high a salary, you are in danger of having bored employees who flee at the first chance they are given to make a difference at another company.

While topgrading is not seen as a guarantee of success, Smart claims that it "can give any company the best chance of success." Clients such as General Electric, Allied Signal, Dell, 3M, Goldman Sachs, and the American Heart Association would seem to be the proof in the pudding.

Still not convinced? Check out these statistics from McKinsey War for Talent Research and Bob Eichinger:

Paper plants managed by A-level talent have 94% higher profits than other paper plants.
More talented investment banking associates are twice as productive as those who are average in talent.
Return to shareholders for companies with top talent practices averages 22% above industry means.
The top 3% of programmers produce 1200% more lines of code than the average. The top 20% produce 320% more than the average.
The top 3% of salespeople produce up to 250% more than average. The top 20% produce up to 120% more.[ii]

According to no less an authority than management guru Peter Drucker, "The ability to make good decisions regarding people represents one of the last reliable sources of competitive advantage, since very few organizations are very good at it." Smart takes this one step further, stating "The single most important driver of organizational performance...is talent."

[i] Bradford D. Smart. Topgrading: how leading companies win by hiring, coaching, and keeping the best people. Portfolio,2005. ISBN 1591840813

[ii] McKinsey War for Talent Research, 2000 and Bob Eichinger, 2002, presented to Conference Board Integrated Talent Working Group.

Small Business Finance: Pay Your Bills On Time - Part 4

Beth Philley ProBiz President — Wed, 10 Aug 2011 21:05:00 GMT

Click here for part 1

Click here for part 2

Click here for part 3

Pay early

If you happen to have extra money left at the end of the month, (yes, this does occasionally happen!) pay those bills with the highest interest rate first. Doing so may save you hundreds of dollars because every day you delay payment adds more to your balance. If you make just the minimum payment on your credit card every month, you may take as long as 30 years to pay it in full. So, pay extra whenever you possibly can to reduce that balance.

When you get a bill knocked down to the point you can pay it off entirely without sacrificing a payment to another creditor, be sure to pay it off rather than continuing to make small payments, assuming there is no pre-payment penalty. It’s always a good feeling to have a bill totally paid off, and it’s just one less thing you have to deal with each month.

Pay online

If your bank offers a free bill-paying service, schedule your bills for payment in advance. You can sit down at the beginning of the month and set all of your bills for payment at one time, then just make sure you have the proper amount of money in your account on the dates the money will be withdrawn. It is the most efficient way to manage your bills, and in some cases, you can have the recurring payments withdrawn automatically without your having to set them up each month.

Alternatively, some creditors will withdraw your payment automatically from your bank on the due date with absolutely no effort on your part after the initial set-up. Because you will be giving creditors direct access to your bank account, make sure you are setting up this type of a plan with a reputable creditor. You will usually have to provide the creditor with not only your account number, but also the routing transit number of your bank. If you don’t know the routing transit number, you can look it up online at a number of different websites.[i], [ii]

Don’t forget to allow for online routing time if you pay via the Internet. Some payments take anywhere from three to seven days to post if you pay them through your bank, while payments made directly on a vendor’s website may post immediately (and thus lower your bank balance immediately).

Choose carefully

Some people think that because they are in business, they can automatically charge everything to the business, and it will be paid for more simply. Unfortunately, your business budget also has limits, just as your personal budget does. You must learn to distinguish between those purchases you have to make to stay in business, and those purchases you make simply because you have money in your pocket at the time you see something you want.

It’s tough to talk yourself out of an impulse purchase in the heat of the moment, and such purposes can quickly blow up your budget so you are no longer able to pay your bills on time. Taking the time to come up with a decision process before you go shopping can help you to distinguish your wants from your needs when an impulse does arise.

The questions you ask yourself before making a decision will vary, depending on the nature of your business, but most will be similar to the following:

Can I run my business just for this week, without buying this?
Can I provide fully adequate service to my customers without buying this?
Will buying this product or service allow me to expand my business in a meaningful way?
What is the advantage to buying this product now, when I can’t really afford it, versus later when I have more free cash flow?

[i] http://www.gregthatcher.com/financial/default.aspx

[ii] http://www.routingtransitnumbers.com/

Small Business Finance: Pay Your Bills On Time - Part 3

Beth Philley ProBiz President — Mon, 08 Aug 2011 20:59:00 GMT

Click here for part 1

Click here for part 2

Stay organized!

Keep all of your bills in one place, along with the supplies you will need to pay them. It’s hard enough to make yourself pay your bills, you don’t want to have to run around the office looking for all of your supplies just to get the job done. You also don’t want to lose a bill and incur a late payment fee simply due to disorganization.

Keep good records of payments you make. In addition to making tax time easier, it will help you find any errors made by your creditors. Although most of your creditors are probably not out to cheat you, it is not uncommon for those of us who are mere humans to make mistakes. Even if you feel comfortable that your creditor is keeping track of your account by an “infallible” computer, keep in mind that someone has to key in the numbers and someone has to program the computer, and both of those processes can contain errors.

If you do find a mistake in your bill, call the creditor immediately. It’s much easier to straighten out a problem when it occurs rather than six months later, when you think you are making the final payment on a loan and the creditor thinks you still owe $10,000. And, yes, you should report errors that are in your favor, as well as those that are in the creditor’s favor. The mistake is bound to be discovered sooner or later when the creditor audits or balances his books, and you will definitely be held liable for the difference. Do you really want that hanging over your head?

Separate bank accounts

Even if you run your business as a sole proprietorship, it’s often a good idea to keep a separate account for the business. Doing so forces you to be more accountable to the business and makes you think long and hard before you withdraw money from the business for a personal purchase.

Many businesses also keep several separate accounts within the business in order to make sure certain projects stay fully funded. For example, if you have employees, you will have to pay employment taxes to the federal government, usually quarterly. It is often helpful to deposit enough money to pay the taxes into a separate account every payday to pay the taxes on the total amount of checks you have issued. Then when the end of the quarter comes along, you simply withdraw the money from the payroll tax account and you have enough on hand to pay the IRS.

Similarly, you might want to keep money in a rent and utilities account or in an account for insurance premiums. If you have clients placing money in escrow with your firm, you definitely want to keep an escrow account so you don’t accidentally spend some of the money you are supposed to be retaining for the client’s purposes.

The more you can keep your funds from becoming co-mingled, the better it may be for you. There will be more bookkeeping, to be sure, but you will also have greater peace of mind if you know exactly which money is earmarked for which bills.

Small Business Finance: Pay Your Bills On Time - Part 2

Beth Philley ProBiz President — Fri, 05 Aug 2011 20:51:00 GMT

Click here for part 1

Strategies for on-time bill payment

There are some very easy steps you can follow to help you get your bills paid on time, every time. First of course, is to spend within your means whenever possible. You don’t have to pay cash at the point of purchase, but try to pay off your credit card balance every month. Doing so will prevent you from wasting money on interest charges and late fees that could be better used to grow your business.

If you do have to buy on credit, take the time to stay on top of your bills so you know exactly what you are paying and where you could save money by paying earlier. Make a list or a spreadsheet of all of your bills that come on a regularly occurring basis. Whether you pay them weekly, monthly, quarterly, or annually, make sure you have them listed. This will help you plan ahead and save for when the big bills such as your annual insurance premium come due. It’s ludicrous to expect that your monthly income will all of a sudden expand to give you enough money to pay that big bill rather than saving a little money each month so it’s not an emergency on the due date.

Have a plan for which bills you will pay at what time of the month. Depending on the terms your various bills offer, you may decide to pay bills every Friday or on the first and fifteenth or whatever allows you to pay every bill between the day it arrives in the mail and the due date. If you choose to pay bills on dates ending in “one” for example, you will sit down with your checkbook on the 1^st, the 11^th, the 21^st, and possibly the 31^st. Any bill that comes due before the next date ending in one must be paid before you get up from the desk.

Make a commitment to pay your bills first. Yes, it’s tempting to go out shopping when your client’s check comes in the mail, even if you are only looking for office supplies, but if money is tight, make sure you pay those bills and make do with what you have if at all possible. If your revenue stream is uneven, put aside some money out of each payment you receive, specifically to pay bills.

For example, when you consult your list of bills, you might see that you have to have $400 on the fifteenth of every month to pay your water bill and your building lease. So, as you are going through the first two weeks of the month, you must put aside at least $400 before you spend any money on anything else.

When you receive your bills, mark the due date on your calendar. This helps you keep your eye on the ball, and is especially important for bills you don’t pay every month. You might even want to make a note each day of the amount of money you are depositing in your bill-paying account so you can see how close you are getting, as well. Show the total amount to date each Saturday. You might use a red pen to indicate the amount of money which must be paid on a certain day, and use different colors of pens to track different goals, such as the credit card bill and the insurance premium.

Small Business Finance: Pay Your Bills On Time - Part 1

Beth Philley ProBiz President — Wed, 03 Aug 2011 20:48:00 GMT

Many companies offer a discount for on-time payment. Can you really afford to be throwing away any money? Even if they don’t give you a discount, you may be able to avoid interest and / or a late fee if you pay on time. As just a simple example, let’s look at the credit card you just used to purchase some raw materials.

Let’s assume your balance at the end of the last statement period was zero. (Good for you!). Further assume you bought $300 worth of raw materials today, and your statement prints tomorrow on the 2nd, with a due date of the 17^th of this month. If you pay before the 17^th, you will pay only the $300 you owe, making it a wise decision on your part to get through a temporary cash flow crunch by utilizing available credit.

However, if you pay it on the 18^th, you will owe the $300 plus a $35 late fee plus daily interest. If your interest rate is 17% per year, you will be paying an extra $2.50 in interest because they charge you all the way back to the date of the purchase, not just back to the due date. That one day delay in payment just cost you $37.50! That may not sound like much, until you look at your actual credit card balance, which is likely much higher than $300. And if you’re carrying a balance from month-to-month, the problem just continues to multiply.

Besides all that, it’s also good karma to pay on time. Where would your business be if your customers took a long time to pay you what they owed? Unless you have very deep pockets, you won’t be able to stay in business very long if you cannot get your customers to pay you. Remember that the next time you’re tempted to delay payment to one of your vendors.

Another word about credit cards

It can be very tempting to run your business using your credit card, but it’s almost never a good idea. As we showed above, credit cards are a very expensive drain on your business, unless you are able to pay the balance in full every month. They should be used only as a last resort otherwise.

Even if you have to make purchases using a credit card, for goodness’ sake don’t use it to take cash advances or to pay bills. Cash advances taken on credit cards begin to accrue daily interest on the day you take the money. There is no grace period by which a payment will prevent you from being billed interest.

And if you use a credit card to pay a bill, you have just increased the cost of your bill. By the time you pay the interest on your credit card, you will be paying more than you need to for the goods and services you need to buy. It’s much better to buy only what you can afford or to work out terms with your supplier to pay over time. Most suppliers offer much more favorable rates than credit cards.

This isn’t to say you should never borrow money. There are times your business will not be able to grow if you don’t borrow money to pay for expansion or capital improvements. However, always look for lower-cost methods of raising capital before you even consider using your credit cards. And try to confine borrowing to large purchases, avoiding it for day-to-day operational expenses.

Financing Your Business with Other People's Money - Part 5

Beth Philley ProBiz President — Mon, 01 Aug 2011 20:22:00 GMT

Click here for part 1

Click here for part 2

Click here for part 3

Click here for part 4

Developing a formal proposal

Your formal proposal will have seven elements, regardless of to whom it is being sent. The first document is an Executive Summary, which is typically 1 - 2 pages in document format. (Word is preferred.) Although this is on the top of your proposal, you will probably write it last, after completing the six sections below.

The remaining six parts should be in a PowerPoint presentation, ready for your contact to present to the decision makers of the company or non-profit. Sending it in PowerPoint eliminates the need for your contact to make a PowerPoint from scratch for his presentation, which may move your proposal to the top of the stack.

The first slide or two contains an overview of your project, including your idea, your proposed delivery method, and the benefits to the sponsor. The next slide will be a short profile of you and your company, stating your experience in the field you are pursuing.

Next comes your promotion plan. This is the part where you imagine that you have gotten everything from the sponsor you asked for. Don't get hung up on the fact that you cannot do any of these things without their support. If they turn you down, it really doesn't matter what you promised to do; and if they sponsor you, you will be able to do all of the things you have listed, so it's okay to talk about things you don't currently have the funding or expertise to do on your own.

The next slide again lists the sponsor benefits. You cannot hit this point too hard. You want them to walk away from the meeting convinced that they are missing out on a huge opportunity if they do not sponsor you. State your benefits in the most tangible terms possible. For example, if your plan will give them increased sales as well as enhanced image, list the increased sales first and make an attempt to quantify by how much you think their sales could increase. You may not have enough data to do this, but if you do, make sure to mention it.

The next slide tells the company that you have considered potential risks and mitigating factors. For example, if you are asking the company to spend money on your project, expecting that they will see an increase in their market share, a key risk might be that market share goes down after the event. For every risk you list, include what steps you will take to mitigate that eventuality.

The next slide lists the steps required to "make it happen." This is where you ask for what you want, but ask in terms of how the company can use you to achieve their goals. For example, instead of saying "you need to do X" approach it from the standpoint of "By doing X, you will enable Y to happen."

The last slide is your contact information. It's very important that the person who ends up deciding on your proposal know how to contact you with the good news. Give them several options: phone, e-mail, and snail mail, at the very least.

Financing Your Business with Other People's Money - Part 4

Beth Philley ProBiz President — Fri, 29 Jul 2011 20:19:00 GMT

Click here for Part 1
Click here for Part 2
Click here for Part 3

Contacting big business

For corporate targets, you would do best to make your initial contact by e-mail to the Vice President of Marketing. Advertising, or Corporate Sponsorships. After you have sent the e-mail, wait about a week, then follow up with a phone call.

This phone call should NOT ask, “Did you receive my e-mail?” Rather, ask if the company needs any further information from you in order to evaluate your proposal. If the e-mail was never received, you can find that out when you ask if they need further information, but more importantly, asking about further information forces the target to open your e-mail and actually look at it. If you ask only if the e-mail was received, he can confirm or deny without ever opening it.

Before you make the phone call, spend some time thinking about exactly what you will say. You may even want to write yourself a script so you don’t freeze up when your target answers the call. In this era of corporate downsizing, many executives have had to forego secretaries, so it is entirely possible you will get through to the actual person to whom you wrote on the first try. You don’t want to be caught with your pants down, stammering to think of what to say.

Calm yourself down before you call. Remember, you are helping the business executive by giving him an opportunity to put his marketing dollars into something that will set him apart from his competitors. Yes, this will also help you out, but thinking of it in terms of what the sponsorship will do for the company will help you to relax while you close the deal.

On the call, you will want to be able to state in 30 seconds or less the crux of your proposal, again emphasizing the benefit to the company, rather than what you will get out of the deal. Ideally, the call will end with the executive asking you to send a formal proposal for his consideration.

Contacting a non-profit

Depending on the nature of your proposal, you may be trying to line up non-profit sponsors as well as corporate sponsors. You will likely line up your corporate sponsors first, and get them to commit to providing something to the non-profit entity. Next, you will contact the non-profit, usually by phone call to the VP of Development, advising them that you have procured for them this great benefit from a major corporation.

Once you have explained the benefit to them, you can tell them the part you want them to play in the mix of things. A big thing the non-profit can do is to publicize the thing you are promoting via their extensive network of supporters. For example, if you have arranged for your sponsor to donate $1 to the Red Cross for every time your free e-book is downloaded from their site, you would ask the Red Cross ask their supporters to go to the sponsor's site and download the e-book.

Again, there is no reason to be nervous during this call. You are giving the non-profit executive an opportunity to raise funds and awareness about their cause, which is their primary job. You are doing them a favor, even though it will benefit you at the same time.

The non-profit can spread the word about your product, idea, or service by including information in their newsletters and e-mails to their staff, donors, and clients. Make sure not to indicate that your offer to benefit the non-profit is predicated on their willingness to promote you. Even if they don’t want to provide publicity for you, remember that you already have a commitment from your corporate sponsor to benefit the non-profit, so you need to make that happen in order to provide the goodwill and reputation benefits you promised to the company.

Again, ideally the call will close with the non-profit asking you to send a formal proposal for their consideration.

Come back Monday for Part 5!

Financing Your Business with Other People's Money - Part 3

Beth Philley ProBiz President — Wed, 27 Jul 2011 20:14:00 GMT

Click here for Part 1
Click here for Part 2

Building your company's credibility through sponsorships

IEG, a leader in consulting, valuation, research, and training in the global sponsorship industry has a blog on their website,[i] where a recent post by senior analyst Carrie Urban Kapraun points out that one of the key reasons business-to-business marketers should use sponsorships is that the sponsee can borrow the credibility of the sponsor.[ii] If you are the new kid on the block in your field, having the backing of a more well-established company will boost your image in terms of reliability, quality, and any number of other parameters.

Rock stars have known this for years. If you are a fledgling band, you seek to be the opening act for a band that is bigger than yours. The new band gains some credibility by telling future prospective promoters that they opened for Journey or Hannah Montana or Lady GaGa.

So, why wouldn’t you just have the big company sponsor everything your company does on a long-term basis? Well, aside from the fact that you likely went into business so you could run a business rather than being controlled by large conglomerate, studies have shown that contract lengths of less than two years typically produce the most favorable responses.[iii] A key advantage of short-term sponsorships is that this provides flexibility for a sponsor to move between a variety of sponsorship activities to meet immediate marketing needs that can maintain the vibrancy of their brands.[iv] As a bonus, the effects of a sponsorship can persist for as long as a year after the end of the effort.[v]

Steps to Pursuing Sponsorship Opportunities

The very first thing you must do when trying to set up a sponsorship is to identify the specific product, service, or idea you wish to have sponsored. This should be something that you cannot accomplish on your own, whether it is rolling out a new product, spreading information about your social cause to the world, or getting people to come to you for a particular service.

Once you have identified the product, service, or idea you want to promote, you will identify those companies that best align with your product, service, or message. For example, in developing a sponsorship package for this book, I looked for companies who had a vested interest in seeing small businesses succeed. My list included large banks who make loans to small business and need them not to default, office supply stores who could sell more products if more businesses were on solid financial footing, and the Small Business Administration of the United States.

Because I knew about the benefits of including a social responsibility piece in the equation, I also identified non-profit organizations that are stakeholders in entrepreneurial success. My list included Kiwanis, Rotary, Chambers of Commerce, and economic development departments at the local and state level.

After you have identified your targets, you will need to develop a pitch. The most important thing to remember about your pitch is that it does NOT tell the company what they can do for you; rather it focuses on what the sponsorship opportunity will do for them. This is likely one of the biggest mistakes prospective sponsees make. The big company’s marketing executive really doesn’t care too much whether or not your product launch is successful, but he cares a great deal about whether his bottom line rises or falls.

Your pitch letter should begin by stating the problem you hope to solve for the company, then telling the company how partnering with you will help to resolve the problem. This line of thought should follow naturally from your previous exercise in identifying your targets. Once you have told them the problem and how to solve it, you will flesh out your plan, telling the company how you plan to accomplish the problem resolution and what part they will play.

The next paragraph should detail how you will involve a non-profit in the mix, allowing the company to be socially responsible. You will point out to the company that they can do well by doing good. Spend a paragraph or two detailing how each portion of their investment directly correlates to a benefit they will receive.

Close by asking the company’s marketing and advertising department to contact you to discuss your proposal, either by phone, face-to-face meeting, or e-mail. Be sure to include full and complete information for the company to contact you. They may think your idea is absolutely fantastic, but if they have no way to follow up with you, they cannot help you.

Come back on Friday for Part 4!

[i] http://sponsorship.com

[ii] Urban Kapraun, Carrie, The Role of Sponsorship in Business-to-Business Marketing. Posted online February 11, 2010 at http://www.sponsorship.com/About-IEG/Sponsorship-Blogs/Carrie-Urban-Kapraun/February-2010/The-Role-of-Sponsorship-in-Business-to-Business-Ma.aspx. Retrieved June 30, 2010.

[iii] Johnson, Margaret and T. Bettina Cornwell. The Effect of Sponsorship on the Market Value of Firms in Australia: Event Study Findings. UQ Business School, The University of Queensland. Presented at ANZMAC 2004: Australian and New Zealand Marketing Academy Conference.

[iv] Currie, N., 2002. Short-term Tie-ups Boost Sponsorship’s Potential. Marketing Week. November 28, 14.

[v] Simmons, Carolyn J & Becker-Olsen, Karen L. Achieving Marketing Objectives Through Social Sponsorships. Journal of Marketing 70(4): 154-169, October, 2006.

Financing Your Business with Other People's Money - Part 2

Beth Philley ProBiz President — Mon, 25 Jul 2011 20:08:00 GMT

Click here for Part 1

Socially responsible sponsorship marketing

Most companies realize that they can often do well by doing good. Being socially responsible is big business, and if you can provide a way for your sponsor to be socially responsible while making money, you will be their golden child.

Results of one study indicate that the behavior of a potential customer is influenced even more by the knowledge that their actions would benefit a social cause than by an indication from the marketer that their peers are also taking action.[i] In this study, hotel customers were asked to hang their towels on the rod if they didn't require them to be washed during each day of their stay.

Some of the marketing pieces left in the hotel bathrooms focused on how water and energy would be saved, making their choice to hang up their towels an environmentally responsible action. For another group of hotel visitors, the marketing piece emphasized that most people don't require fresh towels every day. This is known as "peer pressure marketing" which often works. Think about how many television commercials you've seen that imply you can be just like the models in the commercial if you use whatever product they are selling.

What the study found is that the marketing which highlighted the environment was much more likely to cause people to choose to use the same towels during the course of their stay than was the peer pressure marketing technique.

The Sponsorship Triangle

The secret technique tying all of this together is to create a triangle between a sponsor, a non-profit, and your idea. For example, if you are a plumber, you might want to create a triangle link between Habitat for Humanity, your business, and American Standard, one of the kings in the plumbing supply business.

You might ask American Standard to allow you to post an e-book about finding a reputable plumber on the American Standard website, which of course will refer customers to your site. You benefit by getting more traffic to your site, where you can sell whatever it is you're selling. American Standard benefits because customers will believe they care about their customers because they are giving free advice. In return for that, they will donate one toilet to Habitat for Humanity every time the e-book is downloaded, which also promotes goodwill about American Standard because they are giving to charity.

Similarly, if you manufacture dog leashes, you might ask a sponsoring company such as a pet food manufacturer to buy 1,000 leashes from you (at a discount, of course) to be donated to local shelters. The sponsoring company can boast that they are supporting local shelters, you gain revenue from the sale, and the shelter wins because it gets the leashes it needs.

Check back on Wednesday for Part 3!

[i] Shang, Jingzhi & Basil, Debra Z. & Wymer, Walter.  Using social marketing to enhance hotel reuse programs, Journal of Business Research 63(2):  166 – 172.  February, 2010.

Financing Your Business with Other People's Money - Part 1

Beth Philley ProBiz President — Fri, 22 Jul 2011 20:08:46 GMT

This topic is a little more complex than most, so it is being presented in five parts. Hang in there!

Let me introduce you to the magic of corporate sponsorships. Imagine for a moment that you are the Vice President of Marketing for a Fortune 500 company. You have a budget of millions of dollars that must be spent on marketing your products before the end of your fiscal year, but you need a hook to distinguish your company from the thousands of others that provide the same products.

You spend days, weeks, and months developing and executing a marketing plan, but it’s really no different than anyone else’s. Everyone is looking to provide the best quality products at the lowest price while returning value to their shareholders. Now suppose someone came to you with a proposal to extend your company’s marketing reach and to provide something that would set you apart from your competition. Wouldn’t you jump on that opportunity before it went to someone else? Of course you would, even though it means you will spend your money marketing someone else's product or service.

Why would a company want to spend their hard-earned money promoting your product, idea, or service? If they’re worth their salt, they are aware of the wealth of research that shows sponsorship marketing pays off in terms of shareholder value in both large and small markets.[i]

What exactly is sponsorship marketing?

According to a paper written by Nigel Pope in 1998, sponsorship is the provision of resources (e.g., money, people, equipment) by an organization (the sponsor) directly to an individual, authority or body (the sponsee), to enable the latter to pursue some activity in return for benefits contemplated in terms of the sponsor’s promotion strategy, and which can be expressed in terms of corporate, marketing, or media objectives.[ii]

So basically, you need to find a sponsor who will help you because the sponsor anticipates that the sponsorship will be beneficial to achieving his objectives, as well. Fundamental to this approach is that there must be great alignment between your message and the sponsoring company’s message. For example, you would be hard pressed to have Major League Baseball sponsor your new and improved basket weaving product, but you might have great success in asking them to support the roll-out of your new revolutionary material for baseball uniforms that keeps the players from overheating in the hot summer sun.

Another important part of sponsorship is to provide the sponsoring company with an opportunity to provide other types of sponsorship besides money. When the economy is rocky, you may have better success in asking for in-kind donations rather than cold hard cash. In the baseball uniform example, you might want to ask Major League Baseball to have some of their players try out uniforms made of your material and provide testimonials you can use to sell your product. If it’s good enough for MLB, why wouldn’t local high schools and colleges buy it?

Maybe you feel like you could be more successful if you could just get the press to pick up on even one of your press releases. I’m betting that a press release from a Fortune 500 company will be read a lot more quickly than yours will. Why not ask your sponsor to issue a press release announcing your partnership?

Such a press release might be headlined by something like this: Local Widget Manufacturer Partners with Big Widget Business to Provide Free Widgets to the Needy.

Check back on Monday for part 2!

[i] Johnson, Margaret and T. Bettina Cornwell. The Effect of Sponsorship on the Market Value of Firms in Australia: Event Study Findings. UQ Business School, The University of Queensland. Presented at ANZMAC 2004: Australian and New Zealand Marketing Academy Conference.

[ii] Pope, N., 1998. Overview of Current Sponsorship Thought. Cyber-Journal of Sport Marketing. Available from http://www.ausport.gov.au/fulltext/1998/cjsm/v2n1/pope21.htm Retrieved June 30, 2010.

Developing an Authoritative Management Style - Part 3

Beth Philley ProBiz President — Mon, 07 Mar 2011 19:32:00 GMT

Jump to Part 1

Jump to Part 2

Continuing our discussion of the authoritative management style with the fourth element: commitment to vision.

Commitment to vision means that you never let your mind stray from the vision and mission of the company. When you're running on fumes, trying to get enough work done to make payroll at the end of the week, it can be easy to cut corners or to make snap decisions that serve well in the short-run but don't stand the test of time. A leader of leaders must have an unwavering eye on the overall goals of the company and assure that all decisions are in alignment with those goals.

Let's say one of your company's goals is to have a safety record that beats your industry's average. One day as you're walking through your plant, you notice that a guard is missing from a piece of machinery. You ask the machine operator where the guard is, and he says it was removed to make it easier to fix problems quickly. In theory, this might sound like a good idea. After all, fixing problems quickly means less downtime and higher profits, right? But think for just a minute about what the lack of a guard might mean in terms of safety performance. Is it really worth someone's fingers being lost to save a few minutes of downtime? What would you say when you made that phone call to the injured person's spouse?

Even if you look at it in terms of profit, you have to consider how much you would have to pay in OSHA fines if you were inspected. That amount is likely to be much more than the amount you pay someone for the time it takes to remove the guard after the machine is tagged out during a breakdown.

As the owner of the company, it's your job to think through some of the quick decisions that people make on the fly to see if they really make sense in terms of the big picture. It actually ends up being pretty easy if you have a firm commitment to vision.

Communication is closely tied to commitment to vision. In order to keep all of your leaders going in the same direction, you must clearly communicate the vision to them. Again, this goes back to the road trip example we talked about when defining management styles. If you send all of your employees on a trip without clearly communicating where they are supposed to go and when they are supposed to get there, the chances of them all arriving are pretty slim. We'll talk much more about communication in

future blog posts.

A coaching mindset is important because one of the best ways to develop leaders among your staff is to allow them to make mistakes without fear of reprisal. You want your staff to experiment with new ways of doing things so you can find the best way. You want them to innovate and design new processes and products that allow your company to grow. Where would we be if Edison hadn't experimented to invent the light bulb or if Bill Gates hadn't tried new things to make computers accessible to the masses?

And there is no doubt in my mind that if you let your employees experiment, there will be things that don't work out as planned. That's where the coaching mindset comes in. Rather than writing up an employee whose experiment didn't work, you need to spend that time and energy figuring out why it didn't work and what can be tried the next time to make the process more successful. If your employees get in trouble for trying out new ideas, they will stop trying, and you will be stuck using the same processes for the entire time you are in business, while your competitors race ahead of you by being innovative.

When you take a coaching mindset, your employees know they are free to experiment within certain parameters that you can set up to minimize your risks. You may want to have them try something new using only scrap product, or only on weekends. You might want to set a dollar limit for what they can spend. What you don't want to do is punish them for an experiment that doesn't work out. Even failed experiments can be highly valuable, as they provide you with information you can make use of when you design the next experiment. In fact, it has been said that the only failure is the failure to learn from mistakes.

If you beat up employees who make mistakes, you will train them to hide their mistakes. Hidden mistakes cannot be used to educate the company, and you will be doomed to having several employees make the same mistake. It's much more valuable to have your employees share their experience and what was learned from it, so that others can go on to make different mistakes rather than re-learning the same lesson.

Developing an Authoritative Management Style - Part 2

Beth Philley ProBiz President — Fri, 04 Mar 2011 19:22:00 GMT

Jump to Part 1

Earlier this week, we talked about several different management styles, and decided the authoritative style was the best. We also talked about the first two steps to developing an authoritative style: competence and collaboration. Today we'll pick up where we left off, considering the third element: compassion.

Compassion means recognizing that your employees are human beings with lives outside of your company. Although you pour your blood, sweat, and tears into the company, your employees probably don't have that level of commitment because it is not their "baby". To many of your employees, your company offers "just a job", while to you it is a way of life, or maybe even a family legacy, passed down through many generations. Your employees may be willing to work late some of the time, but they are not likely to miss very many of their kids' soccer games to do so.

When you show compassion, your employees know that you understand their lives outside the company are important to them. The best way to do this is to schedule time regularly to get to know your employees. Whether you simply walk around your place of business and spend a few minutes chatting with your team or whether you rely on the company grapevine, you want to make sure you understand what is going out outside of the office. To be sure, there are certain employees who observe a strict separation of work and home. You will never hear them talk about their lives and they won't have anything in their offices that will tell you anything about home. It's important to respect the privacy of people who do this.

However, most people bring a little bit of their home lives into the workplace every day. Whether it's a picture of Junior in his prom tux or a ball cap from their favorite sports team, most people have at least one thing in their workspace that demonstrates an interest in something other than work. Take the time to notice these things and strike up a conversation about them. If you need to, keep index cards on each employee that you can refer to before you leave your desk.

For example, you might walk through your company lunchroom and see Marilyn showing off the proofs of her son's senior pictures to her co-workers. After you've oohed and aahed over the pictures, go back to your office and make a note that her son is a senior. In May, ask if the company can contribute something to her son's graduation party, or simply ask when the ceremony will be. You don't have to go, but you do have to take a genuine interest in the fact that her family is experiencing a momentous occasion. You might ask if the son has college plans, then in August, ask if she needs any boxes to help him pack. It takes you roughly two minutes to do this, and it can reap huge dividends in terms of company loyalty and employee cooperation.

And it should go without saying that you attend funerals when your employees' parents or other close family members die, and you send a get-well card or even flowers or a fruit basket when your employees are seriously ill.

You may also create company policies that encourage compassion. For example, every company has at least one person who never seems to go on vacation. You might consider having a vacation-sharing plan where employees can donate unused days to someone who needs some extra time off, perhaps due to a terminally ill child. It costs you nothing, and generates a lot of goodwill. You might set up an employee assistance fund where employees who have experienced some sort of tragedy can apply for help. (Set this up through an established charity so you are not the one personally making decisions on whether the death of a husband qualifies for more or less money than a fire that takes the family home.)