Leading is about believing in people

May 13, 2013 by 8 Comments

believe_inBeing the leader of a business is perhaps one of the most complex, rewarding, and often brutally frustrating professions. Leaders are constantly held accountable, subjected to relentless demands, and must always be at the top of their game. A true leader works tirelessly to drive the Four Business Outcomes: productivity, profitability, staff retention, and customer loyalty. But when you peel away all of the trappings of leadership, what it really comes down to is believing in people – and that’s where things start to get interesting.

A leader’s job is to achieve results through the work of others. They keep people and teams on task. They maintain order, direction, and momentum. But would you want to work for a leader who is solely driven by the numbers, in an organization where people are simply the means to an end? In turn, would you want to be that kind of leader? You will get your results, but at what cost to those you lead; and at what cost to the work environment, or company culture? [Read more...]

Filed Under: Business Builders, Compensation, Customer Loyalty, Leadership, Productivity, Strategies Notes & News Tagged With: , , , , ,

Anatomy of a Team-Based Pay conversion

June 25, 2012 by

I just returned from Oklahoma City where I converted Richard and Jan Hill’s three Eden Salon & Spas from commission to Team-Based Pay. I’ve been doing TBP conversions for over 35 years. I have done them for salons, spas, manufacturing companies and high-end retail stores. And for over 35 years, I have been at the epicenter of the often heated debate between commission and non-commission believers. My usual response to, “I don’t believe in TBP,” is, “It’s not a religion – it’s a compensation system.” Then again, if I’m perceived as some “TBP Guru” on a global crusade converting commission companies to TBP, then perhaps their perception is somewhat true. Commission believers see their method as a prime motivator to perform. TBP believers see their method as a means to create a dynamic culture.

Just last month, J.C. Penney’s new CEO, Ron Johnson, eliminated commission in all stores including clothing, jewelry, cosmetics, appliances, electronics and salons. Until late 2011, Johnson, along with Steve Jobs, headed up the creation and operations of the wildly successful Apple Stores. Apple Stores are non-commission and Johnson wanted to create the same “do what’s best for the customer/relationship building” culture at J.C. Penney. It was a bold move that clearly rocked the boat throughout J.C. Penney, but it also cleared the way to shift the culture to customer-centric rather than sales-centric. It will be interesting to observe the transition.

Pay conversions away from commission top the list as the one change that owners and leaders fear most. However, the fear comes from a lack of understanding about TBP, the conversion process, the systems that drive it, and how to lead a company that no longer has commission as the prime motivator – if it even is the prime motivator. [Read more...]

Filed Under: Compensation, Monday Morning Wake-Up, Teamwork Tagged With: , , , , , , ,

Six must-knows about Team-Based Pay compensation

May 17, 2012 by

Pay is always a hot-button issue. With the news about JCPenney Salons eliminating commission, the rumors are flying fast and furious. Don’t be motivated by fear when it comes to your pay system. Separate fact from fiction, starting now:

  1. The right pay system is about more than just a dollar figure. It’s about fostering a positive culture where your staff works as a team and is dedicated to helping the business grow. They enjoy coming to work every day — and you do, too.
  2. You can’t achieve consistent bottom-line profits when your payroll percentage is a variable and ever-growing expense. You won’t grow when you are held hostage to commissions. If a salon/spa/medspa’s service payroll exceeds 40 percent of gross revenues (service and retail), it has a payroll problem.
  3. Team-Based Pay is a pay system; it’s not a religion. Team-Based Pay is an hourly and/or salary program, which ties a team bonus to the achievement of critical numbers, such as revenue, gross margin, client retention and productivity. Just doing hourly/salary is NOT Team-Based Pay. Individual growth is tied to overall performance – not just the employee’s ability to generate revenue. A Team-Based Pay system is designed to reward the right behaviors and performance – those that support the company’s goals and culture.
  4. An employee’s compensation should be based on more than just specific tasks. Successful compensation programs take into consideration a wide variety of skills and behaviors: attitude, technical skill advancement, attendance, teamwork, retail recommendations, integrity, cooperation, and customer service.
  5. No pay cuts or hour reductions. Successful pay conversions are executed with integrity and fairness.
  6. A successful compensation system must meet five non-negotiable criteria:
    • It must fit the financial reality of the business.
    • It must be controllable, not a large “fixed percentage” of revenue.
    • It must encourage and reward the actions that are consistent with the vision and culture of the business.
    • It must give clear guidelines and pathways for individual growth.
    • It must inspire and reward team and the attainment of the company’s overall performance and revenue goals.

Does your pay system make the grade? If not contact Bruce Hourigan at 800.417.4848 x203 and learn more about how team-based pay can help improve your bottom line.

Filed Under: Compensation Tagged With: , , , , ,

It’s getting personal: When salon & spa owners aren’t taking a paycheck

March 22, 2012 by

paycheckWhen the owner of a salon or spa isn’t taking a paycheck, it’s more than business; it’s personal. When you’re feeling stuck and your debt is out of control, it may seem as though all is lost — it’s not!

Need a little encouragement? Start here:

  • Take some time and reconnect with your passion for the beauty industry and think about what your long-term goals are for your company.
  • Realize that there is a path to achieving your dream. You can do it by holding yourself accountable to doing the work, developing a sense of urgency for tasks and renewing your commitment to your business. It may not be easy, but it is very possible.
  • Learn the tools that you need to build strength and structure in your salon or spa.

 Here’s a quick to-do list:

  1. Face your financial reality, including current debt. Use your Balance Sheet and Profit & Loss Statement. Be honest!
  2. Make a plan. This is your Cash Flow with projections for revenues and expenses. Look for areas where you can cut expenses and maximize revenues. Develop specifics for each area so that all players know what needs to be done and how to do it.
  3. Share the urgency. Help your team understand why changes need to be made and how they fit in.
  4. Celebrate small wins. It can be daunting to look at the “big number.” Set goals along the way and celebrate their achievement with your team. Keep it positive. Regroup when goals aren’t met, then set new goals. It’s a process.
  5. Get help. A professional coach can help hold you accountable to your goals and offer a “safe space” for discussing fears, realities and strategies.
  6. Believe in yourself. You can build an amazing, enduring company.

What steps are you taking to achieve a better financial future?

Filed Under: Compensation, Financial Literacy Tagged With: , , , , , , , , , , , , , , , ,