When your business does not feel well, you do not feel well

sickLike humans, businesses can have serious health issues too, like being cash starved, burdened with crushing debt, and a toxic culture. I always say, “My heart beats along with my business.” When it’s healthy, profitable and fun, I feel great. When it’s sick, I feel sick. If you’re a business owner, you know exactly what I mean.

If your business hasn’t been feeling well lately, then you’re feeling it too. Maybe your business is just out of shape and lethargic because it’s carrying too much baggage. You feel concerned, a bit stressed and perhaps even frustrated. If your business is sick, the concern, stress and frustration are magnified. And if your business is seriously sick … perhaps life-threatening sick … the stress and sleepless nights can be debilitating.

I know, just reading this stuff can make you queasy. That’s why I write it, because business problems are real, become progressively worse over time, and never fix themselves. You can’t be an effective leader when you just don’t feel well, and especially if you are downright sick.

The only way to feel better and get back in the leadership game is to take the necessary action to fix what ails your business. That’s where things get tricky. No matter how big or small the fix, fixing anything in a business means that stuff needs change … and change can easily add to your stress. And then there’s the “what if’s.” What if it doesn’t work? What if my employees don’t like it? What if it makes things worse? All this second-guessing does is keep you stuck as you stare at the launch button for change. In the coaching business we refer to these scenarios as “talking an owner off the ledge.”

So, if any of the preceding describes you and your company, follow these six steps to fix what’s broken, take back control of your company and regain your personal wellbeing:

  1. Fix the nasty stuff first: The nasty stuff is the problem. The small stuff can wait. If it’s a toxic employee, manager or spending problem … fix it. I mean throw everything you’ve got at the solution until the problem is gone. Most leaders know exactly what they need to do but wimp out at the last minute. Of course fixing the nasty stuff first can be scary, but it’s the nasty stuff that’s making you and the business sick. Allowing the nasty stuff to hang around one more day means one more day before the healing process begins. Fix the nasty stuff first. No compromise.
  2. Check in and lead: The nasty stuff happened on your watch and while you weren’t feeling well, you weren’t being the leader your team and company needed. It’s easy to check out as a leader when you feel beaten up. Checking back in means stepping up, taking ownership for allowing the nasty stuff to happen in the first place … and re-engaging as your company’s leader. It’s time to show your team that you’re back and decisively moving forward.
  3. Plot a new course: When you jettison the nasty stuff, you grab everyone’s attention. Heck, you finally rocked the boat and shook things up. Your team needs to know what’s going on and what this means for them and the company. More than anything, they need to know where the company is going. I could have labeled this step “create a new vision” but plotting a new course accomplishes more. To plot a course there needs to be a destination. Your team needs to know both. The course will give them the next steps and the steps after that. Creating clarity is the quickest way to eliminate uncertainty.
  4. Communicate like never before: If there ever was a time for you to be on your soapbox communicating, sharing your thoughts and ideas … this is it. Heck, you just slew the dragon and set your company free. You conquered the source of your fear and frustration. Your confidence is rushing back. As a business coach, I’ve seen this scenario play out in a matter of days. It is incredibly empowering and shortens the duration of the culture shift that you initiated.
  5. Start knocking off the small stuff: Okay, you’ve got momentum. Your team is rallying behind you. Engage your team in knocking off the small stuff … one fix approximately every 90 days. This creates focus and urgency on the fix and gives it the best chance of sticking long term.
  6. Distance yourself but never forget the dark days: The more distance you put between you and the dark days the better. However, as progress is made there is a tendency to perceive the fix as complete before it truly is. Always remember that your decisions, thinking and behavior played a key role in creating the nasty stuff. Like any bad habit, it takes time, often years, for new thinking and behavior to lock in. Even then, old behaviors lurk below the surface waiting to resurface. The dark days should always be your reminder to stay the course. No compromise.

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Are you working harder for less?

work_hard_for_lessThis Monday Morning Wake-Up is for all the owners and leaders that are stuck in survival mode and growing weary of being in a state of working harder for less.

Owning and leading a successful business has always been about giving it all you’ve got. You willfully give your time to the point where working a forty-hour week would feel like a vacation. You give your personal resources in terms of money, taking on debt and using personal assets as collateral. More than any other factor, you give your passion, energy and emotional capacities to pursue your business vision. In so many profound ways, what you give … and sacrifice … for your business is a commitment to perpetually live at or beyond the brink of your comfort zone.

Given all the sacrifice, what is the upside of owning and leading a business? For me, it is to control my own destiny, to build something truly unique, and to create a better life for myself, my family, my employees and those my company serves. Of course it’s about making money – but money has never been the number one driver. The purpose and content of the work has always been my number one driver. Do it right, do it to the best of my ability … and the money will come. Profit and money is an outcome.

There comes a time in the evolution of a business where the owner’s work changes. All businesses go through survival mode where hard work, long hours and sacrifice are non-negotiable. But survival mode is a portion of the journey that you and your business should eventually pass through. Like a jet climbs to reach cruising altitude, so must a business climb through survival mode to a state of sustainability.

Here are some No-Compromise Leadership strategies to help you climb out of survival mode and put an end to the cycle of working harder for less:

  • Change your business model: If you and your business are stuck in survival mode, then your current business model is designed to function in survival mode. This is the toughest concept for many entrepreneurs to grasp. Their thinking is that by “working harder” things will get better. In reality, working harder at an inefficient or poorly designed business model won’t make it go faster or lift it out of survival mode. The moment an owner realizes that he or she is working harder for less … the business model must change. By business model I’m referring to the leadership approach, culture upgrade, new and better systems to inspire employee engagement, financial controls, standards of performance, accountability and a complete overhaul of customer service practices. My only warning here is that the longer you’ve been in survival mode, the more embedded the thinking and behavior – the more challenging upgrading to a new business model will be. If you want to get out of survival mode bad enough, this is your only path out. Get business a coach.
  • Change your focus: If you’re stuck in survival mode your focus is on plugging leaks, fighting cash flow problems, employee indifference and just trying to make it through another day, week or month. It’s like watching your feet walk and hoping you’ll make it to a better place. The problem is that by watching your feet, you can’t see obstacles ahead of you … or even a cliff coming up. Change your focus means stepping back for a bit to honestly and brutally assess where you are (current reality) and where you want to go (vision). It is impossible to set your business GPS to a destination of “get better.” It is very doable to set your business GPS on achieving a specific destination (goals) that includes milestones, tasks, accountabilities, measurable critical numbers, and other performance and growth factors. Changing your focus requires a high level of personal discipline to avoid reverting back to survival mode behavior. Get a business coach.
  • Change your work: If you’re stuck in survival mode, you’re stuck in your daily work doing a bad superhero impersonation of trying to carry and lift your business on your own back. Now that is the definition of insanity and a recipe for burnout. The next step after changing your business model and changing your focus to a new destination is to change your work. And the only way to change your work is to blow up your daily work schedule and rebuild it with work content designed to lift you out of survival mode. Simply put, if you’re tired of working harder for less … then work smarter for more. Again, old work habits die hard. Working smarter for more always requires new business and leadership skills and the discipline to master those skills. Get a business coach.
  • Change your choice: Yes, survival mode and working harder for less is not a good place to get stuck. It wears you down, burns you out and feeds negativity, finger- pointing and feelings of self-doubt. The hard truth about being stuck in survival mode is that it is a choice. Survival mode and working harder for less is nothing more than a toxic collection of one’s own thinking and behavior patterns. By changing your choice to a new and positive set of thinking and behavior patterns, you simultaneously change your perspective on life, business and the possibilities of a better future. Get a business coach.

I’m not trying to “sell” anyone on the benefits of business coaching. I simply know what it’s like to be stuck in survival mode and what it takes to lift yourself and your business out of it. Transformations move at the speed of the individual’s ability to change, learn and master the disciplines of business and leadership. Being held accountable to the change process is perhaps the greatest gift of coaching. So, if you’re tired of working harder for less … it’s time to change your approach and learn how to work smarter for more.

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Are you a control freak leader?

control_freakIf you want it done right, do it yourself. That’s the motto of a control freak leader. You oversee everything. You need to approve everything. You come up with the ideas that everyone else needs to execute. Your definition of delegating is allowing others the freedom to get things started, then stepping in, taking over and doing it the way you want. You’ve got your tentacles embedded into every nook and cranny of your company. Yes, you are a proud and worthy control freak leader. You are also the most frustrating, smothering and energy sapping leader to work for.

There are varying degrees of control freak leaders. Some are project and turf selective where everyone knows it’s best to keep their hands off. Some are pouncers that, like a wild tiger tracking its prey, hold back until they’re about to explode … then pounce on a project and rip it to shreds. And as described in the opening paragraph, there is the certified obsessive-compulsive control freak that meddles in everything to the point where nothing gets done.

In business, control freak leaders can be an occasional speed bump, a persistent roadblock, or the mother of all traffic jams. Simply put, control freak leaders either hinder or stop all forward progress.

Here are some No-Compromise Leadership strategies to help control freak leaders transform themselves into engaging, empowering and trusting leaders:

  • Leading is not about controlling: Leadership is about guiding, coaching and empowering followers to reach a destination. People follow because they want to get to a better place. There is a spirit of shared engagement in the process. A dynamic culture evolves. Controlling is about limitations, restrictions and confinement. Controlling is about keeping people in a box. Control freak leaders may get results, but eventually, those they control want out of the box.
  • Controlling is exhausting: Controlling the execution of work, making and approving decisions, redoing work you don’t like and being wired into everything is exhausting. It is also described as “catch people doing something wrong.” Control freak leaders are often stressed out and well on their way to burnout if they’re not burnt out already. The only cure for an exhausted, stressed out, control freak leader is to shift his or her focus on clarifying expectations, creating better systems … and learning how to manage systems rather than control people.
  • Stop fixing leaks: Control freak leaders function in a perpetual dilemma of trying to control everything around them or paying attention to the opportunities and hazards approaching them. Because control freak leaders are so busy down below finding and fixing leaks, they tend to bump into one problem or crisis after another. Captains belong on the bridge of their ship, not below fixing leaks. There’s nothing wrong with leaders stepping up and doing the work of the company, but not if it leaves the company leaderless. Control freak leaders must keep their hands off the work they empowered others to do. No compromise.
  • Culture of trust or distrust: No matter how much they deny it, control freak leaders have trust issues. FACT: If a leader doesn’t trust people, people won’t trust the leader. In a culture of distrust, people are too busy watching their backs to pay attention to their work. Everything slows down. Mistakes and problems multiply. The blame game becomes the game of choice. Control freak leaders need to understand the origins of their distrusting nature. The path to building a trusting culture begins with understanding one’s own thinking and behavior. Done wisely and openly, extending trust isn’t painful or risky.
  • Freedom of letting go: I’m a leader and the last thing I want to do is be into everyone’s work. My job is to set the destination (vision), empower my team, and ensure the well being of the company. Just like every member of my team, there are responsibilities and projects I must own and deliver on. My job is not to meddle and smother the drive and enthusiasm of others. My job is to help them succeed so we can all succeed. More than anything, I enjoy the freedom to focus on the work that fulfills me. I can’t experience that if I’m stuck in other people’s work.

Control freak leaders limit opportunities for themselves and those they are attempting to lead. They function in a box of their own making by keeping people confined in their own boxes of limited opportunity. At Strategies, the hardest work we do as business and leadership coaches is to get control freak leaders to recognize that they need to change first in order for their company to succeed beyond their wildest dreams.

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Do not be a business maintenance man

maintenanceMan2When I was a young man starting out on my first job, I thought to myself, “I want to be the manager.” I was always fascinated with business and what made it work. I love the energy that comes from a team of people working together and believed that I had the ability to “manage” a team. From the beginning, I worked closely with the manager to learn everything I could about being a “manager.” I learned about handling money, scheduling for productivity, setting goals, inventory control, filling out reports, performance evaluations and keeping everyone on task.

Holy crap … I wasn’t learning how to be a leader – I was learning how to become a business “maintenance” man. I mean no disrespect to managers, nor am I suggesting that managers do not lead people. My point is that the primary role of a manager is to ensure the successful operation of a business or department and to make sure that the work gets done. Yes, a manager is responsible for hitting goal and ensuring growth … but the work of leadership is something different – something uniquely special. FACT #1: A leader in maintenance mode is stuck. FACT #2: An enlightened manager can rise to become an extraordinary leader.

Here are my No-Compromise Leadership thoughts on why the role of leader extends far beyond the role of manager:

  • Leaders set and protect the vision: A manager adheres to and supports the company’s vision. A leader creates and tenaciously enhances the company’s vision. Leaders chase the dream and the achievement of that elusive next level. Leaders look beyond tomorrow and see the possibilities. Managers maintain and focus on the work that needs to be done today and tomorrow. Leaders and managers can both get stuck in manager mode.
  • Leaders are culture builders: Culture is the collective outcome of a company’s thinking and behavior. Culture is the energy that drives excellence as much as it drives the achievement of goals. Managers that are focused on systems, numbers and accountability may get the work done … but it’s the company’s culture that gives life and meaning to doing the work. Managers that are all about driving numbers, hitting goal and consequences may look good on paper … but their cultures may be toxic, indifferent and change resistant. Leaders bring meaning to the work. Leaders create unity. Leaders create cultures that want to win.
  • Leaders are coaches: If the leader’s role is to create a dynamic and empowered culture, then the leader’s role is to be a coach – to bring out the full potential of individuals and teams. Coaching is about incremental improvement. Coaching is about helping individuals and teams achieve breakthroughs in performance. Coaches can be tough. Coaches can be demanding. But coaches must always be passionate and respectful when bringing out the best in people. Leaders that coach inspire those they lead. Managers push for results. Do you want lead and inspire as a coach or demand, dictate and supervise like a manager?
  • Leaders find a way: Challenges and problems are part of doing business. Setbacks will occur. A crisis will sneak up and make a surprise attack on your company. Managers will depend on the tools in their toolbox to fend off the attack … even when those tools lack the strength and horsepower necessary to be effective. Leaders are creative and flexible. Leaders seek out viable options. Leaders work through their fears to inspire confidence when times get tough. Leaders tap into the human spirit. Managers keep pushing through even when the body count keeps rising. Leaders see and believe there is a light at the end of the tunnel.

Every leader and manager has the choice to be a business maintenance man or a company leader. Leaders, by choice or circumstance, that get stuck or devolve into maintenance mode, are no longer leading … they are simply managing to maintain status quo. Leadership is a complex and often intimidating role to fill. The persistent need to perform, inspire, grow, deliver excellence, innovate, console, discipline, hire, fire, manage cash flow, etc., etc., is not a job for the hesitant, timid and faint at heart. One’s ability to become and remain a No-Compromise Leader will always be the road to self-discovery.

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Consistency is a choice

consistencyJust how good do you want to be? What level of the game do you want to play? How important is that vision of yours? How passionate are you about the work you do? How committed are you to achieving excellence? If you were an aspiring athlete with your sights set on winning Olympic gold, your coach would tell you in extreme detail what that road map to winning would look like. The coach would explain the relentless hours of training and the pain of pushing through your perceived physical limits. The coach would simply detail the process of achieving consistency in execution at a world-class level. Then, it would be your choice to choose the path to consistency.

Consistency is about repeatability and the achievement of incremental performance gains. In the beginning, the gains can be significant and impressive. However, at the higher levels of consistency, the gains are hard earned through continuous refinement and practice. And it is when the going gets tough that your answers to the five opening questions are put to the test. Winning your version of Olympic gold may be the ultimate prize … but achieving your personal best level of consistency is what matters most. It is also what separates those that are committed more by words, from those that are committed by deeds and hard work.

Here are some No-Compromise Leadership thoughts on choosing the path to consistency:

  • It’s a timeless process: I cringe when I hear the comments about the “millennials” and how they are the entitlement generation. I agree that each generation (I’m a baby boomer) has its unique traits, but being the best at what you pursue in life is a constant and timeless process of commitment, hard work, sacrifice and perseverance. Simply put, millennials seeking Olympic gold have to choose and commit to achieving consistency, just as every Olympian before them. The same goes for building a world-class company or team. Choosing the path of consistency is the defining choice. Anything less is choosing inconsistency.
  • It’s where you set the bar: You can be mentored, coached, pushed and prodded … but only you have the ability to set your consistency bar. It’s your choice to set it at wimpy, almost breaking a sweat, or at no-compromise consistency. At wimpy, the choice is inconsistency and doing enough to get by. Why even bother? At almost breaking a sweat, the choice is that average is good enough and dreams remain dreams. At no-compromise consistency, the choice is clear and the path is clear. You show up to work and play hard. You hone your skills and practice until you get it right. You push for wins. You inspire those around you to be their best. You earn every gain, every win and every success.
  • It’s a discipline: At Strategies we teach and coach business owners and leaders in the disciplines of growing dynamic, profitable, team-based companies. All that means is that we teach and coach the disciplines of consistency. The discipline process of creating consistency begins with the leader and flows throughout the company. The Four Business Outcomes that we teach are discipline and consistency based. The Productivity Outcome is about systems discipline and consistent execution. The Profitability Outcome is about the disciplines and consistency of cash-flow and financial management. The Staff Retention Outcome is about the disciplines and consistency of information flow, culture building, individual and team development, and establishing trust. The Customer Loyalty Outcome is about the disciplines and consistency of executing world-class work, embracing protocols, anticipating needs, teamwork, and delivering on your company’s promise to its customers. Individual and company consistency cannot exist without discipline.
  • It’s never always perfect: I always say, “If you execute something perfectly … take a picture so you’ll remember what that perfect moment looked like.” In life and business, achieving perfection is a worthy, yet preciously rare, occurrence. As I stated earlier, consistency is about repeatability and the achievement of incremental performance gains. But, in the quest for consistency, there will be setbacks, detours and breakdowns. Sometimes you or your team may be off your game. Sometimes reality throws you a curve. That’s why high levels of consistency can fluctuate at times. The only way to maintain high levels of consistency is to continuously refine your skills, techniques, systems and processes. It also means being capable of responding and adapting to changing conditions.
  • It’s worth it: Consistency in individual and business performance is the foundation that success is built on. The higher your level of consistency, the more you and your company stand out from the crowd and the more control you have over your success. If you have personal goals … choose consistency. If you have a company vision, or a BHAG (big hairy audacious goal), choose consistency. Anything less is a commitment to accepting and tolerating inconsistency. If you’re a No-Compromise Leader, consistency is a non-negotiable.

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You feel stuck because (?)

stuckSooner or later, all leaders have symptoms of being stuck. It’s when you feel like you’re working really hard and making excruciatingly slow progress, or no progress at all. It’s when a few setbacks turn into major hurdles. It’s when getting things done seems to take more work and more time. It’s when problems begin to multiply faster than you can fix them. It’s when current reality feels like permanent reality. It’s when there is no doubt that you are officially running on the hamster wheel and getting nowhere. Simply put, feeling stuck sucks.

Maybe you had a few tough years financially. Maybe you had to rebuild your business. Maybe you lost some key staff. Maybe you made some decisions that really backfired. Maybe this “leadership” thing is too much for you. Maybe you’re bored. Maybe you’re just tired. The fact is, if you feel stuck … you are stuck. And as the owner or leader of a company, if you’re stuck – those you lead are stuck and, most importantly, your company is stuck. Stuck sucks.

Here are some No-Compromise Leadership strategies to get you unstuck:

  • Kick your own ass: That’s right … give yourself a good kick in the ass. The first step to getting unstuck is to acknowledge that you and you alone control your destiny. It is your choice to remain hunkered down and stuck, or stand up, reassess where you are, put a pin on the map and get moving. You already know that the longer you allow yourself to remain stuck, the harder it is to get unstuck.
  • Fear and uncertainty is superglue: Leaders often get, and remain, stuck because they ran into a tough decision. A tough decision is nothing more than a strategy or plan to breakthrough an obstacle. All plans have an element of risk. All plans have their believers and resisters. When initiated, all plans are subject to change and modification to adapt to situations as they occur. If you’re stuck because you fear making a tough decision, that decision will only get tougher with each passing day. More importantly, the outcomes you fear most will eventually happen if you continue to avoid hitting the launch button on that tough decision. You can control the execution of a tough decision and therefore the outcome. Getting unstuck is about controlling your own destiny.
  • Divide and conquer: Leaders can get stuck when the work to be done exceeds their capacity. It’s easy to get stuck with a mountain of work in front of you. Some leaders are reluctant to ask team members for help. Other leaders believe that the only way to get it done right is to do it themselves. And then there are the leaders that simply bring their team together to lay out the work that needs to be done. All I can tell you is that every time I’ve done this myself or advised a coaching client to do it … team members step up to help. Every time, there is a sigh of relief as the weight of the work is removed from your shoulders. Before you know it, that mountain of work is gone. Delegation with clarified expectations is the most efficient process to getting more done in less time … with less stress.
  • Getting cash flowing again: Nothing feeds stress and gets leaders stuck in the muck faster than cash-flow problems. Getting behind in paying bills is one thing … getting behind in rent, taxes and payroll is about as scary and debilitating as it gets. Whether the cash crisis happened over time or is due to one big bad decision, cash-flow problems always take time to work through. Of all the disciplines we teach and coach at Strategies, cash-flow planning is the most important non-negotiable. Getting cash flowing again means getting control of cash that’s flowing out. Just “cutting back” is not a plan, because the spending behaviors and extent of the debt always goes deeper and is more complicated. Vendors, banks, landlords, leasing companies … and state and federal IRS … are willing to work with companies that have a detailed cash-flow plan and demonstrate the ability to be consistent on promised payments. As the owner of the company, you probably have everything you own on the line, which means this is no time to be stuck. Even in the worst case situations, a well built cash-flow plan can give clarity and relieve financial stress to get a leader unstuck
  • Towel in hand: We hear owners and leaders say it all the time, “I’m ready to throw in the towel and get out.” Ninety-nine percent of the time it is because the business was “free-floating” without the necessary leadership, systems, accountability and culture to keep it thriving. Entrepreneurs are great at vision, big ideas and building businesses. The problem is that many are great at what the business “sells”, but in over their heads when it comes to the leadership and disciplines of how a successful business works. This is especially apparent when the business grows beyond the capabilities of the owner. The most serious kind of stuck is when the owner or leader begins thinking about throwing in the towel. Well, here’s what throwing in the towel usually means; significant personal financial losses that will take years to pay off – or bankruptcy. If the business is a mess, it probably had debt … and there is no buyer out there that will pay enough so the owner walks away clear. So, if you’re twirling a towel around your head, put it down. Get the training, coaching and guidance to get unstuck and pull your company out of the mess and back to profitability. And guess what? Almost every owner that turns their business around falls in love with it all over again. Why? Because they got unstuck.

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TOP TEN Worst Leadership Behaviors

bad_leadershipFor 40 years I have devoted my career to teaching, writing and coaching on entrepreneurial business growth and leadership. I included the term “entrepreneurial” because I am also a life-long entrepreneur. I just love all aspects of what makes a small business great. I especially love the passion that drives individuals to turn a vision into a functioning, dynamic and profitable enterprise.

On the flip side of all the stuff I love, is all the stuff that turns visions into nightmares, profit into losses, and passion into toxic waste. When a business drifts into dysfunctional behavior, it rarely has anything to do with the economy or stiff competition … it has everything to do with leadership behaviors that “destroy from within.”

What follows is my list of the TOP TEN worst leadership behaviors. If you see even a spec of your leadership behavior in one or more of them, heed the warning and commit to embracing and living the tenets of No-Compromise Leadership.

And the TOP TEN worst leadership behaviors are:

  1. Vision loss: Vision is not only what gets you into business … it is what pushes a business and it’s people forward into the unknown. Vision is as much about the journey as it is the destination. Leaders are human and, at times, the relentless chase for their vision can wear them down … often without them recognizing it. When leaders lose sight of their vision, the business becomes “just a business” that’s all about work, numbers and money. A leader without a vision is no longer a leader. The leader devolves into a “manager” or “supervisor” making sure the work gets done, but no longer acting as a leader. Without vision there is no passion.
  2. Telling it like it isn’t: Facts don’t lie. Truth is a foundation you can build a world-class company on. Candy coatings are sugary and sweet, but have no nutritional value to sustain life. Leaving important things unsaid, withholding and/or filtering information destroys transparency and wrecks company cultures. When leaders tell it like it isn’t, they are intentionally distorting truth and breaking trust. Transparency is about openness, sharing, engagement and honesty. Always tell it like it is … even when it is difficult to do so.
  3. Uncommitted commitments: The most difficult aspect of coaching business and leadership is getting those being coached to do the work to achieve the desired outcomes. All leaders are a work in progress. The key word is progress. A company can only move and grow at the speed of its leader. Therefore, a leader must evolve and grow as his or her company grows. This means making a no-compromise commitment to address behaviors like procrastination, avoidance, micromanaging, not showing up, poor financial discipline, indecision, self-centeredness, and other such behaviors. Change always begins with the leader.
  4. Promise Margarine: Don’t promise butter and deliver margarine. Broken promises break trust. Even promises made with the best and most sincere intentions will break trust when broken. When leaders have a pattern of breaking promises, employees stop believing. And when employees stop believing … they stop following the leader. Too often, the “I don’t care” indifference that infects a company culture has its roots in broken promises made by the leader. A promise is a contract to deliver. A pattern of broken promises is a behavior issue.
  5. Head in the sand: Avoiding a problem today gives you a bigger problem to deal with tomorrow. Problems never fix themselves. When leaders avoid anything that has been identified as a problem … it is called compromise. Maybe the problem is a spending issue and increasing debt. Maybe the problem is a toxic employee. Maybe the problem is the double standard that the leader helped to create. Maybe it’s a performance or productivity issue. What ever the problem is … it is only going to get worse unless the leader engages and takes corrective action.
  6. Pulling rank over file: I cringe every time I hear an owner say, “It’s MY company and …” Of course it’s your company. Everyone knows it. But being an owner or having an impressive title doesn’t make someone an effective leader. Any leader that plays the “It’s MY company and …” card is actively practicing “destroy from within” behavior. Clarifying expectations, open communication, information flow, systems, and defining what accountability means in your company may require more time, planning and energy … but it is the work of leadership. The “It’s MY company and …” is a behavior caused by avoiding the work and disciplines of leadership.
  7. Half-baking everything: When employees say, “We’ve tried that before and it didn’t work,” it is a symptom that the leader has a track record of not getting projects and change initiatives across the finish line. Half-baking everything behavior occurs when leaders keep churning out new high-priority projects before last month’s, or last week’s, high-priority projects are implemented. Half-baking everything also includes a leadership pattern of hitting the launch button on projects or change initiatives that are poorly planned and/or launched before everyone knows what’s going on. Half-baking everything is dysfunctional leadership.
  8. And the decision is … : Making tough decisions is the work of leadership. Avoiding a tough decision feeds stress and uncertainty throughout a company … especially in small businesses. The toughest decisions are the ones that require the biggest change and/or some level of sacrifice. Tough decisions can also be unpopular and encounter employee resistance. That’s why they are called tough decisions. When leaders hesitate on tough decisions, they place their companies’ progress on hold. Do your research. Seek guidance from mentors and others that can offer objective and unbiased solutions. Then, make the tough decision and lead your company through it to a better place.
  9. That feeling in your gut is gas: Entrepreneurs are notorious for going with their gut. True, there are some entrepreneurs blessed with good business instincts … but charging off into the unknown without doing the research and planning is like flying from New York to Paris without a flight plan, a map/GPS … or knowing you have enough fuel. Simply put, I’ve met and worked with enough smart entrepreneurs that wish they never listened to their gut. Luck is not a business strategy.
  10. Wanting it ten times less: I always coach leaders and owners that they must want success ten times more than those they lead. That’s what feeds the passion, urgency and tenacity that drive a company through good and tough times … and to that elusive next level all leaders envision. When a leader wants success less then those he or she leads, it’s time to step aside.

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Culture shifts live or die with clarity and information flow

information_flow2I’ve witnessed more attempted culture shifts during which the leader charges off in a new direction only to discover that his culture is still locked on the old heading. That occurs when employees lack the clarity on why the company changed course. There was no detailed mission plan or map to follow. There was no information flow to share progress or challenges. In such cases, it doesn’t take long for the change initiative and culture shift to sputter and fizzle out. Yes, culture shifts can collapse in an instant.

It is vital that you understand the complexities of the task ahead. Rest assured, a culture shift will occur in your company. It will require tremendous energy and relentless focus from you and your leadership team, most being expended in the early implementation stages. It’s the equivalent of turning a massive aircraft carrier around. All of the forward momentum of the ship must be shifted in a new direction … and maintained until it aligns on the new course heading. More importantly, that wide turn and new heading must be free of any navigational hazards. Yes, in business you must be prepared for the unexpected, but plotting the best course that is free of hazards certainly improves the odds of achieving your goals.

WARNING: If you equate shifting a business culture to a speedboat making a 360-degree, full-throttle turn – you just compromised. Culture shifts take time – significantly more time than you might realize.

Good or bad, fast or slow, your company is currently on a specific course heading. Like the captain of that aircraft carrier, you are responsible for keeping your company on the right course. More importantly, you are responsible for the culture that shapes the collective behavior and thinking of your employees. If that course heading needs to change, you need to communicate that change to all employees – and do so with absolute clarity. If that new no-compromise course takes your company into uncharted waters, you need to communicate the why, where, how and when of this change. You must ensure that your team’s focus is at high alert, your systems are ready to engage and the necessary resources are at hand. Everyone must be in perfect sync on where you are going to take the company. Absolutely everyone. No compromise.

Information flow in a company must be fast, furious and relentless. It must flow to everyone at every level. Remember, I’m not talking about distributing an internal bulletin or meeting once a month, I’m talking about daily updates on scoreboards, status, progress, wins, challenges and team success stories. Don’t expect to complete a major culture shift by making a grand presentation at a general meeting and following it up with a few memos. Think of a war room at the Pentagon with its constant inflow and outflow of real-time data. Want to win a war? Then your information and intelligence – your information-flow system – must be up to the task. It’s no different in business. If you stifle information flow, you can kiss your culture shift good-bye.

A simple information-flow acid test
Take a walk around your company and randomly ask employees if they can tell you what a company goal is for the current month and what the progress is to reach that goal? Chances are, you’ll see just how inadequate your information-flow systems are.

One of our best consulting clients did just that to test his systems and was shocked. When he asked some employees in the break-room what some of the numbers on the scoreboard meant, they didn’t know. This is a business that has been doing daily huddles and scoreboards for years. It was a wake-up call that their information-flow systems needed beefing up.

Information flow connects your employees to your critical numbers and the overall goals of the company. Too often, information flow is under utilized or overlooked when, in reality, it is the key driver to achieving a successful and lasting culture shift. What does your information-flow system look like now? Where is it lacking and what needs immediate fixing?

Remember, you’re taking your company on an exciting voyage and everyone on board needs key information on progress, resources available and consumed, and what is and isn’t working. Chances are, there might be holes in your information-flow system. Find them and fix them.

Information flow brings understanding and clarity. It eliminates the “but I thought…” or, “I didn’t know…” excuses that occur when a company engages in a major change initiative. Scoreboards are a must. You must be able to answer these key scoreboard implementation questions:

  • Who will design them?
  • Who will update them daily?
  • Where will you strategically place them so all employees can watch the action and keep score?
  • When, where and what time will team huddles take place?
  • What’s the hit list of key information that will be communicated at huddles?
  • What are the non-negotiable rules for huddle attendance?

Take the clarity and information flow process seriously. No compromise.

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Death, Taxes and 1099

death-taxesThere was a “lively” thread on Strategies Idea Exchange forum on Facebook. A group member posted, “I just spoke to an owner who files a 1099 for her staff, but doesn’t call it ‘rental’. She lets stylists make their own schedules, she provides products and all services are booked through the receptionist. She pays commission. Does this make sense? I’ve never heard of classifying someone as an “Independent Contractor” while paying commission.” The thread quickly grew to over 65 comments, became quite heated … and one poster that resorted to profanity got booted and blocked from Strategies Idea Exchange.

I have been involved in the independent contractor versus employee debate for what seems like forever. The debate is about two diametrically opposed business models – Employee Based or Independent Contractor (classified as 1099). One business model employs individuals to do the work. The other model leases, or rents space to individuals to do their own work. Seems pretty easy, doesn’t it? Well, it’s not. The IRS has very clear and specific guidelines to classify workers as independent contractors or employees.

Simply put, too many business owners don’t have a clue what those guidelines are and essentially make up their own rules based on assumptions that are not compliant with IRS tax law. Specifically, a business cannot direct or exercise any control over the worker’s performance and behavior and classify that employee as 1099 independent contractor.

The IRS.gov website offers these guidelines:

Facts that provide evidence of the degree of control and independence fall into three categories:

  • Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
  • Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
  • Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?

Businesses must weigh all these factors when determining whether a worker is an employee or independent contractor. Some factors may indicate that the worker is an employee, while other factors indicate that the worker is an independent contractor. There is no “magic” or set number of factors that “makes” the worker an employee or an independent contractor, and no one factor stands alone in making this determination. Also, factors that are relevant in one situation may not be relevant in another. The keys are to look at the entire relationship, consider the degree or extent of the right to direct and control, and finally, to document each of the factors used in coming up with the determination.

If your business leases/rents space, or classifies workers as 1099, I highly advise you to review IRS Form SS-8 for determining worker status. Here is the link: www.irs.gov/pub/irs-pdf/fss8.pdf

The death and taxes factor:

The true point of contention is not what constitutes an employee/employer relationship … it is which party, the independent contractor or the business, is responsible for withholding, reporting and paying Federal, State and Local income tax. A business cannot simply classify “employees” as 1099 Independent Contractors (or renters) and wipe its hands of withholding, reporting and paying income tax. If it was that easy, every business would classify employees as 1099, compensate them “Gross Pay” for their work … and push the entire tax reporting burden onto employees. Legally, it is not that easy, which means many businesses that classify “employees” as 1099, or renters, are fully exposed and liable for employment taxes, penalties and interest.

Here’s what the IRS says about treating an employee as an independent contractor: If you classify an employee as an independent contractor and you have no reasonable basis for doing so, you may be held liable for employment taxes for that worker.

Here are my no-compromise thoughts on death, taxes and 1099:

  • It’s about what you’re building: If you want to build a company and a brand that grows in value, in most cases, you will need to build an employee-based company. FACT: A business cannot function, perform effectively, assure quality, provide growth opportunities, offer benefits … and build a viable brand … if it does not have the ability to direct and control employee performance and behavior. If you don’t want to deal with employees and taxes … and all the stuff that leading, managing, coaching, inspiring, training and disciplining that an employee-based business model demands … go 1099 or lease/rent space.
  • Know the rules: I don’t know how else to say this other than, “Know and understand the rules of business and the requirements of being an employer.” If you make up your own rules … be prepared to suffer the consequences. If you don’t like the rules, you can argue your case with IRS where your chance of winning is slim to zero.
  • Accountants: It still boggles my mind that we regularly hear owners tell us that their accountant told them to do 1099 without any explanation or guidance on what they can and cannot do in a 1099 business model. To me, that is irresponsible and potentially damaging advice to give any business owner. If this describes your situation where you were told to “just do 1099″ when in fact, you run an employee-based business – fire your accountant.
  • It’s about a level playing field: It is totally unfair that many employee-based businesses play according to IRS guidelines and comply with tax laws … while others, knowingly or unknowingly, run lease/rental and/or 1099 businesses that are actually employee-based businesses that avoid and push the employment tax burden onto their “employees.” For the owners of those businesses, I wish for nothing but the full extent of the consequences for misrepresenting worker status and failure to report, withhold and pay employment taxes like the rest of us.

If you don’t like anything that you read here, your beef is with the Internal Revenue Service. They make the rules that individuals and businesses must comply with.

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Into the heart of Compensation Systems design

compensation_designIn its most simplistic state, a compensation system buys time from an individual performing work. That’s the easy part; everything beyond this point becomes progressively more complicated. Can the individual perform the work and deliver on expectations? Can the individual fit the company’s unique culture? Does the individual have the desire and drive to grow and excel? Is the individual coachable and adaptable to change? Will the individual show up on time … or show up at all? Will you feel like you’re getting your money’s worth every time you hand over a paycheck?

As previously stated, buying time from individuals is the easy part. Designing the components of a compensation system that drive the right outcomes is the tough part. There is a “layering effect” that begins with the actual dollars to be paid for the work and compounds all the way up to a career and income growth path. Every layer is a joint effort that links the thinking and behavior of employees and leadership in order to create the right outcomes. The concept of “pay for performance” is seriously shortsighted. It sets both employees and leaders up for frustration and failure because just paying for performance – handing out a paycheck – is no guarantee that genuine work will occur.

Here are some No-Compromise Leadership insights to expand your understanding of compensation systems design:

  • Control the “elephant”: Payroll represents one or more line items on a Profit and Loss Statement. Your department and overall payroll percentages are, and always will be, the elephant in the living room. As the leader, it is ultimately your responsibility to control your payroll percentages and maintain them within manageable levels. Your Cash-Flow Projections (budget) set the limits for payroll spending. Your Profit & Loss Statement tells you how well you adhered to budget projections. FACT: Your Cash-Flow Projection is your boss. Any pay increases or unapproved hires act as an open invitation for a cash crisis. If you don’t know your payroll percentage benchmarks or how to create and live a Cash-Flow Projection, it’s time to schedule a comp coaching call with Strategies.
  • It’s about “Overall performance”: A well-designed compensation system encompasses all aspects of performance including accountability, attitude, teamwork, skill development, cooperation, support of company change initiatives, and more. If you’re compensation system is still stuck in the “How much did you sell?” box, you are attempting to compensate sales and output at the expense of the skills, cultural behaviors and individual strengths that actually create the sales and output you’re looking for. FACT: “What gets rewarded gets repeated” is misleading … if you don’t nurture and compensate the cultural behaviors, teamwork, skills, strengths and abilities of your employees, you’re missing 70% or more of the essential qualities that actually produce your sales and output goals. It’s like telling individuals to “sell more – do more” when they don’t know how to do so. Compensate for the right thinking and behavior, and you’ll get the results you want.
  • Pay for what you’re really fighting for: It’s really not about the work … it’s about achieving the company’s vision and building a world-class brand. Do you want to pay for sales and volume output or do you want to pay individuals to grow an extraordinary company? FACT: In the daily battle to generate revenues and get the work done, it’s easy to forget what you and your entire team are fighting for. You’re working to make the company’s vision a reality while creating growth and income opportunities for all team players. If you’ve acquired a case of tunnel vision that has you seeing nothing but numbers, you’re avoiding the achievement of your company’s grand vision. People fight hard for a vision and winning, but fighting for numbers is exhausting and frustrating, and can wreck a company’s culture.
  • Commission is a trap: Commission has been and always will be an “I/me/mine” pay system that suffers from a seriously narrow scope because it’s all about sales at the expense of everything else. FACT: Commission isn’t the all-powerful motivator it’s often cracked up to be. Because commission is pay based on a percentage of individual sales, it can and will have you paying for a lot of performance and behavior you don’t want. When your commission rates are no longer sustainable, any adjustment winds up as a boat-rocking pay conversion. And if you didn’t adjust deep enough, you can still end up with an unsustainable payroll percentage. This isn’t easy stuff to figure out and navigate on your own. Call Strategies if you need help. We deal with this stuff all the time … and we’re damn good at it.
  • Status reports matter: Do you do quarterly performance reviews at least once a year? That’s my favorite Neilism, and it always gets a chuckle, but the truth remains that delaying or ignoring performance reviews is an inherent problem in too many companies. FACT: If you’re going to pay an individual tens of thousands of dollars a year, don’t you want to ensure that you get the very best return on that investment? Of course you do … and that’s why performance reviews and one-on-one’s deliver consistent open, thorough, honest and respectful feedback with employees. Neither your company nor your employees run on autopilot. Getting teams of people to perform at their extraordinary best is ALWAYS a high maintenance endeavor.
  • Appreciation matters more: Yes, people work for money and to earn a good living. But people desire to be treated as unique individuals in the workplace. People crave to be recognized and appreciated for the individual strengths and talents that they bring to the team. Too often, organizations look at people to see who most closely fits the “organizational mold.” FACT: Harnessing the energy that comes from individual strengths can make a formidable team more capable of delivering results at a phenomenal level.

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