By now, you have adopted all seven habits of highly effective people, know how to win friends and influence people, and are still trying to think and grow rich. Still, if you’re like most business owners, you’re just too busy to read all the great self-help business books, attend all of your industry’s top conferences and keep track of the latest words of wisdom dispelled by business thought leaders.
“The reality is, the classic small and mid-sized business owner isn’t going to stay on the bleeding edge of trends in best business practices,” says Rick Johnson, a principal and co-owner of Executive Forums, a facilitated peer advisory board service that helps top executives navigate from where they are now to where they want to be by leveraging best practices and tools.
The solution? We sat down with five Valley industry leaders to discover their top three best practices in leadership and management, sales, accounting and finance, information technology and human resources.
Leadership and Management
Michael K. Maynard shares his expertise in leadership and management. Maynard is senior associate of global clients with The Predictive Group, Inc., a licensee of PI Worldwide, which provides human capital analytics to the world’s corporations. He says it’s important to build “bench strength” in your leadership and management teams today so your company can be ready to ramp up the delivery of goods and services when the economy pulls out of the slump.
Start looking now for your company’s leaders. Maynard has read the tea leaves from the 2010 U.S. Census Bureau’s preliminary findings and says it’s more important now than ever before for business owners to be on the lookout for leadership talent. “This year marks the first time in history that under-35-year-olds are now the majority of American workers,” he says. “The retirement of Baby Boomers has fully begun. As the upper end of the workers are leaving, there are 81 million Millennials — people under 35 years old — who are beginning to enter the work force. So you’re going to need leaders who understand younger workers.” Meanwhile, Maynard says there will be a shortage of workers in the 35-to-45 age bracket, what he calls the “sweet spot for managing younger workers.” “It’s going to surprise business operators how hard it gets to find qualified front-line managers over the next three to five years,” he predicts.
Focus on finding the superstar, not screening out the bad applicant. “The worst mistake a business owner could make is failing to notice that some potentially great person was sitting in their lobby applying for a job,” Maynard says. “And the person walked out, left, didn’t get an interview, didn’t get a second interview. Then they go down the street to a competitor and they’re a superstar. That’s a devastating cost to the company that let them slip through the process undetected. But when I have conversations today with business owners, I find all they talk about is, ‘When the economy turns around and we start hiring, we’re sure not hiring another bad sales manager like we did last year.’ OK, I get it. But where’s the discussion on what you’re going to do to go find a great sales manager? It’s absent from the conversation.”
Measure your leaders’ performance by business results and leadership skills. “Leading companies today are moving toward ‘dual appraisal systems,’” Maynard says. “That means in addition to measuring a leader’s business results, these companies are also looking at their skills on the people side of the business, such as finding and selecting key contributors for the business, holding direct reports accountable to clearly communicated goals and objectives, ejecting or demoting poor performers and getting along with peers and senior leaders.” What can happen if a company measures a leader only by business results? “You’ve seen the movie,” Maynard says. “It’s the quintessential Western where the town is beset by criminal rogue gangs so they hire a gunfighter to come in and save the town. And he saves the town all right, but he also sleeps with the mayor’s wife, drinks too much at the bar and shoots up signs. The gunfighter accomplished what the town wanted him to accomplish, but now he’s out of control.”
Mike Toney, founder and CEO of Conquest Training Systems, Inc., which provides sales training and coaching to clients, provides proven sales techniques. To feed your bottom line, your company must know how to compel customers to take action — from attending an initial sales presentation to continuing to buy your goods and services over the long term, Toney says.
Avoid being seen as a commodity. “Make sure you look and sound different than your competition. By changing your sales strategy, you can’t be commoditized. A lot of my clients struggle with getting beat up on price. They’re being bid against each other. If you’re going to try to break the cycle of commoditization, you have to eliminate looking like the competition. Customers can’t beat you up on price if you’re not providing the exact same product. First, make sure your salespeople aren’t doing the same thing your competition is doing. That could be as simple as not selling features and benefits, as do most salespeople who want to qualify, present and close.” Toney also advises salespeople to avoid worn-out phrases such as, “If I showed you a way, would you buy it from me today?”
Keep score — beyond sales revenues. Toney advises clients to track success in both prospecting and account management systems. “To measure a prospecting system, you have to measure activity, not results. Sales is really a holistic system. I have a rule that says, ‘Don’t manage the numbers; manage the behavior.’ We use that rule to make sure we’re using a system that is clone-able, repeatable and predictable.”
Set up appointments to guarantee the close. “The number one reason why I see sales people with poor closing ratios is they don’t set up appointments correctly. They don’t know how to set up the appointment to guarantee the close. The first strategy, before you hang up the phone, is to make sure you set the customer’s expectations on what’s going to happen in the meeting, so there isn’t going to be a mystery. For a lot of salespeople, as soon as they hear, ‘Yeah, I’ll meet with you,’ they hang up the phone all excited. That’s the time to stay on the phone and say, ‘Let’s make sure our meeting is successful. What two or three things would you like to make sure we discuss that’s most important to you?’ Then you guarantee an outcome, which is going to sound something like, ‘If we accomplish those goals, and I’m not a good fit, would it make sense if we just part as friends? But if it does make sense to move ahead, we can make an agreement for another meeting or start doing business together.’ It’s one of the simplest things a person can do to make sure the meeting is successful.”
Accounting and Finance
John Scherer, a partner with Tatum, a professional services organization specializing in financial and technology leadership, contributes practical lessons in accounting and finance strategies. He says navigating the turbulent waters of today’s economy requires financial discipline, including a good cash management philosophy, budgeting and forecasting systems.
Fine-tune your cash management system. “In this current strained economy, cash management is one key item that should be on everyone’s best practices list,” Scherer says. “Beyond a good cash management philosophy, you need tools so you’re able to properly forecast where your business is going to be several weeks out so that you can manage the various components of cash flow. The first step is to give your financial expert a seat at the table so they understand the various parts of the business, know when the business model changes and remain connected to people who can impact cash in the business. For example, the sales and marketing department might have grand plans to really accelerate growth in the business, but if the financial guy isn’t aware of that plan, then, when the spending occurs, the company can get upside down quickly.”
Incorporate solid financial projections into all business strategies and action plans. “Another best practice is to develop financial projections that clearly represent your company’s strategies and action plans. Any financial person worth his salt will have the ability to financially model, to take what he or she is hearing and fold that into what I call an integrated financial planning model — which is not just a profit and loss projection, but it’s a balance sheet and cash flow monitor. By doing this, you can be certain that you can afford your strategy. There is still a liquidity crunch, and you have to pay attention to cash because your financial institution may or may not be there for you. That’s a tough thing to say, but we’ve seen numerous incidences of businesses that have failed because they didn’t have liquidity.”
Don’t drive business decisions without this dashboard. Scherer says the best dashboards give CEOs access to information on key business drivers with a couple of key strokes. Dashboards also need to concisely represent information at a glance, with key variables such as inventory turns, receivable days or profit as a percentage of sales. “There’s a whole laundry list of potential metrics,” Scherer says. “It’s whatever the management team requires to manage the business — computations they’d like to see every day, every week, every month or every quarter.”
Sindi Major-Martinez, president and CEO of Sindel Technologies, LLC, which specializes in connecting business and technology, advances best practices suggestions in the constantly evolving world of information technology. Today’s digital age promises new efficiencies that were unheard of even three years ago, but companies must invest in technology wisely or they’ve just bought an expensive new toy, she says.
Develop a technology strategy before you invest in it. “These days, businesses of all sizes need to have a technology strategy. It’s an exciting time, especially for smaller businesses, because cloud computing and mobility are offering new opportunities that may have been cost-prohibitive before. But not all investments in technology have the same impact. Having a strategy about how you’re going to implement technology is the best place to start. Before you run out and start investing your dollars, step back and look at your business and your processes. Then ask yourself: ‘How can we leverage what we’ve got, and what do we need to add to the mix?’”
Implement a security policy for all mobile devices. “A security policy will reduce the chance of an outsider seeing private company information. It could be a real problem if your company has a breach of security or your client’s information is made public, especially when you consider regulations in all types of businesses. The first really simple thing to do is to set up a timer on your desktop or devices. If the device is left idle for a certain length of time, it needs a password to get back in.”
Implement policies on your employees’ use of social media. “It’s time to re-evaluate your employee policies on social media, which is now part of business. When can your employees be on it? What can be said? What do you need to be careful of? Once it’s out there, it becomes viral and you can’t get it back. So you really must outline how it can be used.”
Susan Williams, president and founder of HR Choice, offers insight into maximizing the personnel potential in a company’s work force. The basic building block of a company is its work force, making the recruitment and development of employees a key to success.
Use tools of employee engagement. “Today, it’s more important that ever to do employee engagement, because employees aren’t leaving, they’re staying,” says Williams, who recommends a strategy that begins with a written employee engagement plan and includes knowing your team members: What motivates them? How do they do their jobs? What do they like and dislike? Next, create opportunities for growth, beginning with structured training as part of their new employee orientation and building a career ladder in your organization, which can be as simple as job titles that reflect varying levels of expertise.
Discover the value of values. “One way to inspire team members is by making sure you have really strong values in your organization,” says Williams, who recommends not only writing the values but posting them to increase employee awareness. “Leaders must find a way to live those values and communicate them in whatever way they can, including incorporating your values into job descriptions and performance evaluation documents. That way, your values become who you are, part of your culture. You inspire your team because they feel they are all working toward the same values and the same cause.”
Communicate, communicate, communicate. “Team members really want to hear what’s going on in the company,” says Williams, who recommends developing an internal communications plan that covers how to convey your company’s mission and vision, annual goals, business policies and new hires, to name a few points.