Monday, August 25, 2014

Focus and Specialization

A year and a half ago I gave myself a present.  I found a handyman named Randy and had him take care of my entire list of repair projects around the house.  He fixed a broken fence post, hung bike racks in my garage, fixed a doorjamb, fixed a leaky faucet, and replaced a heater vent.  He did it all and for a reasonable price too.

At about the same time my wife and I decided we needed an entertainment consol.  We shopped everywhere and found most consoles are 30” high or lower which means they’re a perfect height for our toddlers to climb up and hit the TV with their instrument of choice.  We also wanted magnetic door latches we could easily open but the kids could not.  We were referred by a friend to carpenter named Phil.  Phil came to our home, assessed our needs, showed us a drawing and built a custom console. 


Premium Pricing

I was pleased with both services, however when I estimate the time and materials Phil put into the job I believe he charged at least triple what Randy charged for his time.  It’s counterintuitive.  You’d think the tradesman who knows everything would be able to charge the premium, but what people really want and are willing to pay a premium for is a specialist. 


Mindshare

In addition to paying more to Phil, I also find myself referring Phil to friends more often.  Randy presented many more skills than Phil but because Phil is a specialist he occupies a space in my mind for “custom woodwork”.  When friends ask about an electrician or plumber I don’t think of Randy because he is neither an electrician nor a plumber even though he was able to help me with those types of projects. 

It’s a paradox, but the more we focus, the greater presence we have in our customer’s mind.  “We do everything for everyone any time any place” makes us interchangeable with others and people don’t know where to place us.  When you occupy a piece of someone’s mind you open up yourself to new business from them, and also to referrals.

Friday, March 28, 2014

How to Hire the Best

"And, I sooooooo enjoy my job -- this HAS to be the BEST company -- EVER!!!!"  That was a quote from one of our employees emailing another employee.  It was forwarded to me as an example of one of the things we’ve done right. Can you imagine your employees saying that?  Would you like them to say that?  As a business owner it’s one of the most rewarding feelings to know you’ve created an environment where people can be happy and productive but it’s not just the environment that matters, the trick is to find the people who will thrive in the environment.

“People are our greatest asset” goes the cliché.  While that’s true, I believe it’s the “right people” who are our greatest asset.  We used to be very causal about how we hired.  Sometimes we got lucky and sometimes we didn’t. One of these “not so lucky” incidents took place when we hired someone to write a training manual for new partners.  I reviewed her work after a week and found she hadn’t written anything.  She spent her time on a doodle pad drawing sketches to pass the time. I sat with her and created an outline to get her started.  A week later she still had nothing written but she did have more sketches in her doodle pad as she passed the time. After we let her go, Patrick said we should frame the sketches since we effectively paid her to doodle.  Looking back, I wish we had framed those sketches as a reminder of poor hiring practices. 

People want to do what they want to do.  Earth shattering, I know, but it just so happens that when people do what they enjoy they’re not only happier, they’re also more productive.   A somewhat famous job ad was posted in 1914 by Ernest Shackleton who was recruiting crew members for an expedition to the South Pole.  His ad stated, “Men wanted for hazardous journey. Low wages, bitter cold, long hours of complete darkness. Safe return doubtful. Honor and recognition in event of success.”  While this may not sound appealing to you it speaks directly to a personality type.  Shackleton just had to appeal to the people with this personality type and he had a line around the block to sail on his ship.

Set up a profile for the role

 Several years ago we surveyed the top channel managers with whom we worked.  We found they had similar attributes which included “achiever”, “competitor” and a few other notable attributes.  We then set up a profile as we were hiring our own channel manager and created questions around those attributes.  These are open ended questions, not “are you a competitor”” but rather, tell us about a time you won and were recognized for that.  If the person struggles or speaks in generalities they don’t likely have the attribute.  The person with the “competitor” attribute will answer with something like, “and I was on stage in front of everyone and they handed that award to me and I held it above my head while everyone applauded and to this day that’s still the biggest sale that company has ever seen!”   Think I’m exaggerating?  I’ve met three people from the same company who claim to have sold the largest deal.  A person can’t help being who they are and that competitive person is going to excel when they’re put in a position where they can compete and win. 

When interviewing for behaviors rather than looking at past work experience we are more likely to match the right person to the right role and enable them to thrive. 

Testing

It’s easy to “fall in love” with a candidate.  Once you find common interests and backgrounds you may really hit it off.  It’s important to have objective tests to be sure the candidate fits the role you’re seeking to fill and is not just someone you like.  We use the DISC assessment for personality and also the Wonderlic test for aptitude assessment. These are helpful in adding an objective measure and will either confirm or contradict our findings. 

Culture Interview

We conduct a culture interview last.  This consists of a panel of 8-10 people who will interview the candidate to determine whether they’re a cultural match.  We place on the panel a few people we feel exemplify our culture and a few people with whom the candidate will be working should they be awarded the position.  The culture interview helps us:
  1.  Determine whether the candidate will have the supportive attitude we require in our employees.
  2. Gives a voice to those who will be working with the candidate should the candidate be hired.  By making co-workers a part of the hiring decision they are now invested in the success of the new candidate and are more likely to help them in their new role. 
The hiring process is pretty lengthy which also helps us gauge whether a candidate really wants to work with us.  You’d be surprised at how many people self select out of the process.  The rigor of the process also sends a message to prospects that we’re very serious about who comes through the door. 

Our hiring process isn’t perfect and we continue to work on it but we’ve improved our success rate over time.  We counted on luck early on and frankly we got very lucky with the employees we were able to attract.  A lucky streak won’t last forever so this process helps us push luck in our favor in meeting fantastic people and aligning their attributes with their responsibilities. 

It turns out Ernest Shackleton’s voyage to the South Pole ended in disaster.  They were stuck in ice for over a year through periods of complete darkness as their wooden ship was crushed by colliding ice flows. Every person on the crew survived.  That’s the power of putting the right people in the right positions.  I hope wherever you are in your business development that you have a hiring process and come to find that people really are your greatest asset.

Thursday, January 30, 2014

Defining Your Company Culture

I’m a numbers guy.  I’ve been an auditor, a controller, a financial officer, and I’m a CPA.  I’ve known for years it’s all about the bottom line and that’s been my focus; at least it was my focus until a competitor accused us of being a “cult”.  It may not have been meant as a compliment but I took it as one.  I took it to mean we had something that captivated people and created a loyalty among our partners and employees.  What I had to find out was how to nurture and grow that “something” which it turned out was our undefined culture.

Culture is powerful.  It’s the accepted norm of behavior; the rules of the road if you will, with any group of people.  It’s stronger than any org chart, strategy statement or directive from management.  This is because each of us is wired to perceive what is socially acceptable and what is not.  Don’t believe me?  Observe children for a few minutes.  They’ve figured out when to take a parent seriously and when to ignore them. A parent will say over and over, “clean up that mess”, “get in the car”, “do your homework” and the child completely ignores them, but somehow that child knows exactly when their parent is about to snap and will respond at that moment (and sometimes slightly afterward).  We are adept at reading social cues and those social cues take priority over written or verbal instructions.  Our desire to belong to a group encourages conformance with those social cues or culture. 

Intentional Culture

Whether we proactively create our culture or just happen into it we all have a culture in our workplace. The problem with an accidental culture is it may not be good for your customers or for your workplace.  Whether you’re a sole proprietor, a staff of 3 or a large organization you need to assess your culture and decide if it’s right for your intended service to your customers.  If it’s the right culture, document it and reinforce it.  If it’s the wrong culture, define your intended culture, document it and reinforce it.  Here’s how:

Define

There is no perfect culture.  Apple, Zappos, and Harley Davidson have extremely different cultures but are all very successful.  The most important thing to consider when defining your culture is the alignment between your customers, your staff, and your leadership.  If you claim to offer a caring, supportive service to customers but your culture is highly competitive, you’ll send a very mixed message to employees and customers. True Alignment by Edgar Papke offers great insight into this topic and identifies the different culture types and the customers to whom those cultures speak. 

Your culture must also be authentic.  The people with whom you partner or hire will sense whether or not it’s authentic so if it’s not, change it. 

Document

Whether you stumbled into a great culture or defined it in the step above, you must document it.  This means writing down the aspects of your culture and specifically the “values”.  Patrick Lencioni outlines this in his article Make Your Values Mean Something

We found we stumbled on a great culture because we had people who cared deeply about our partners and kept their best interest in mind. We attempted to break that down into a set of “values” or attributes.  Rather than impose a definition we surveyed everyone we could to identify those values.   We had a very long list but narrowed it down to the following 8 values that made us who we are and that we could not abandon.  They are:
  1. Supportive at all levels
  2.  Innovative and creative
  3. Seek learning and personal improvement
  4. Have fun along the way
  5. Integrity in all we do and say 
  6. Accountable
  7. Extra Effort
  8. Legendary Service

Reinforce

Many companies have written values but they become meaningless if they’re not actively reinforced.  We took a page from the Zappos playbook and gave each employee $400 per year to award other employees for exhibiting one of our values.  We also set up the “Culture Club” which meets to discuss the furtherance of our values.  Our value of “innovative and creative” is so important we set up the “Innovation Team” to spread innovation throughout the organization and create an environment where everybody could try something new.  We changed our hiring process to include a culture interview. It’s important new employees fit our culture and don’t take it in a different direction.  The above tools help reinforce culture but wouldn’t be complete if there wasn’t a consistent message from leadership.  As long as cultural development is valued and encouraged by leadership these tools are impactful.

We’ve made a lot of progress but we have a long way to go.  The magic we discovered early on was the passion each person had for helping our partners succeed.  That passion is what people inside and outside the company felt.  Our cultural development won’t be complete until every employee shares that passion and all of our partners sense that passion, not because we say it but because it’s the way we think, act and feel. 

Oh, and in case you thought I stopped being a numbers guy, I haven’t.  It turns out culture does translate to the bottom line so we’ll keep investing heavily in it to keep the numbers guy happy.