Who would you keep when forced to bend?

If you were forced by financial circumstances to (perhaps temporarily) lay off every employee but one, who would you choose to keep? Why would you choose that person? Think about it now, so that you make a considered decision if that unfortunate situation occurs. Your company will benefit from that thought process now, even if that person never leaves.

Support, challenge and grow

You might be thinking “Benefit? Are you nuts? How in the world can I benefit from thinking about who will be the last worker standing?

Easy.

The benefit is that you start thinking about things that help you deal with change, with short term resource deficits (like vacations, travel, etc). And you do it when you are of sound mind and body, not when you are freaking out because you lost your best client, your last line of credit, your best investor/partner, or your most valuable employee.

What are you doing to challenge, support and grow that essential person? What are you doing to challenge, support and grow those who will fill their shoes if they get promoted and no longer perform the critical task that belong to their current role?

The short answer is to document them as noted in the E-Myth. This serves at least three purposes:

  • It prepares you for a time when that person can’t do the work due to sickness, family emergency, travel, etc.
  • It documents a process so that it can be evaluated for delegation.
  • It creates a training asset.

Preparing for these possibilities sends a message that you are building a resilient company. It gives people confidence that the company has their back and that an unfortunate departure, drop in sales or some other negative event isn’t going to kill the company (or put their job at risk) because the company has strategically prepared to take a punch. If you react with behavior(s) rooted in fear, it undermines your team’s confidence and leaves them wondering about the stability of their jobs. They lose focus. Work quality will likely suffer.

Bend but don’t break

The natural opposite of the conversation we’ve had so far MUST be considered: What if this critical person leaves your company? Eventually, it’s likely to happen. People’s needs and wants change. Opportunities pop up – and in many cases, they are opportunities that the person leaving wasn’t even ready for when they started working with your firm. For motivated people who grow their skills and take ownership of things that happen on the job, opportunities “magically” arrive even if they aren’t looking. In fact, opportunities are offered to them regularly because people know them, know what they bring to the table – and most employers want people like that. You probably want people like that.

So one of them might leave. This is likely to happen every few years if your company is a great training ground for people stepping up to the next level, which is a good thing despite how it feels when you lose them. When that happens, what do you do next? Do you have checklists and documentation for the processes those people own every day or every week? Or do you scramble around for a month or more trying to put Humpty back together again?

Deal with this in advance. Talk to the people you’d most hate to lose. What’s their ambition? What is your company doing to feed it? What makes them crazy about the company? How often do those things happen to your most valuable players? How many of the things they do are documented so that someone else can do them when they are on vacation or sick? These people aren’t going to object to this because some of these tasks need to be given to someone else, but they also worry about them when they’re on vacation. They don’t worry because they believe no one else can do their work. They worry because they take ownership. Checklists and process documentation give them some comfort because they’ve put their thinking about the process on paper. Process documentation is more than “Do this step, then do this step.” There needs to be a why, a what to look for, a “get worried and evaluate this if you start to see that“.

How you handle these things is as important as what you’re doing to avoid laying people off.

Photo credit: https://www.flickr.com/photos/pachecophotography/

What halftime advice would you give your staff?

If you look back at recent comeback victories in sports, you have to wonder about the halftime advice those teams received. In Super Bowl 51, the Patriots were down 21-3, yet came back to win. The second half performance of both teams looked nothing like their performance in the first half. What did it take in the locker room to get the Patriots to turn that around? What was said in the Falcons locker room? After weeks of preparation, what can be said and done in 20 minutes that can radically turn around the performance of a team of professionals to such a degree that they overwhelm another team of professionals?

Halftime isn’t just about comebacks. It’s a chance to review and adjust, which we all should be doing after a positive or negative outcome to most business activities. For a football team ahead by a lot (as the Falcons were), what has to be said to prevent that sort of letdown? Teams come into halftimes needing to be reminded that they deserve to be there, that they can come back, that they are capable of doing what got them there, and that each individual is a piece of something bigger.

It’s no different in your business. The concept of a game’s halftime doesn’t necessarily align well with the events on the timeline of a company’s life, but that doesn’t matter. There are always turning points in projects, products, careers, marketing campaigns, etc. Projects and products both have natural “halftimes”. They look like points in time where it makes sense to stop, assess, adjust and re-engage.

Team and company are interchangeable concepts. Whether teams win or lose, the best ones get together afterward to review what happened, both positive and negative, and what can be learned. Military units review after action reports (AAR) for the same reason. They ask the question: “How can we improve upon what just happened?” regardless of whether it was good or bad.

Looking back to Lombardi

Every Vince Lombardi speech covers fundamentals. He knew he was dealing with professionals. Their performance occurs at a level most never reach. They see and understand parts of the game that amateurs and “mere TV viewers” cannot. For the very best, the game “slows down” as if everyone else moves in slow motion so they are able to arrive at a critical location on the field with perfect timing. Lombardi knew this, yet repeatedly returned to fundamentals.

Is there a lesson in that for your team? Do your best staffers remember and execute fundamental behaviors more frequently than everyone else?

What halftime advice do you give a team who had a great month?

Your team had a great month. Now what?

What changed month-over-month that made last month so great? What performances stood out as the keys to making that happen? What short list of behaviors or tactics can be identified that were essential to the month’s outcome? What should be focused on so that your team can reproduce that performance? Who learned something that they leveraged into a successful outcome? Who stopped doing something and noticed an improvement as a result? What systemic changes can we implement to make this month’s success more easily reproducible?

What halftime advice do you give a team who had a bad month?

Your team had a terrible month. Now what?

What historically key success behaviors are still valid and were not achieved last month? What happened that threw us off our game? How do we correct those things? What systemic changes can be made to automatically prevent those problems from reoccurring? Who needs help meeting performance expectations? Who needs a mentor? Who needs coaching? What fundamental behaviors fell off last month and need to be improved? How can we remind each team member of fundamentals that we assume will be performed? What distracted us this month? Has everyone’s performance fallen off, or only certain groups?

Call a timeout

Halftime provides a natural break in the action to reflect, assess, adjust and re-engage. For a company, use them like a timeout. When things aren’t heading in the right direction, don’t wait. Call a timeout. Step in, discuss what’s going wrong (and well), share what you’ve learned, advise and re-engage. Are the staffers who are failing following the plan? Are the staffers who are succeeding following the plan? Is the plan failing?

Photo credit: https://www.flickr.com/photos/usaghumphreys/

Hire for commitment over ego

The difference between a strong business leader and a weak one is easily detected: Who do they surround themselves with – and why? Do they hire for commitment or ego? Time and time again, you can see examples in business where a business owner surrounded themselves with one of three kinds of people:

The kind of people who will agree with everything the owner says or proposes, almost (if not never) disagrees with the owner, and when cornered, will err on the side of silence or “I’m undecided” rather than taking a stand that might later prove to disagree with the boss.

  • The group who will say little or nothing when they disagree with the owner.
  • The group who will make decisions independently, regardless of the owner’s stance / position, and aren’t inclined to hide that from the owner.
  • The group who will make decisions independently, regardless of the owner’s stance / position, but aren’t willing to offend / rile the owner by stating their disagreement.
  • The group who will disagree with the owner’s choices and decisions no matter how valid – simply because they’re the owner.

There are probably a few other groups / types that I missed, but this list covers the majority of what I’ve seen in the last 35 years.

Which group should you hire from?

From where I stand, neither 100% agreement or disagreement is a good thing, unless each decision is arrived at through analysis and thought. However, as we’ve all seen, some of these disagreements exist simply because they can (a minority, in my view) and others disagree because they feel the owner is making a mistake – however legitimate they feel that mistake might be. When you feel your boss the owner is about to make a mistake that could seriously affect your business, you have choices, which tend to fall into three categories:

  • You disagree, say so and make your case to your manager or the owner.
  • You disagree and say nothing.
  • You disagree and make your case to your peers.

When you hire someone, which choice would you prefer your future employee takes?

For me, it’s the first one, if you’re hiring for commitment over ego.

Making this possible is on you, the owner

So let’s say you’re on board with the whole “I welcome my staff to disagree with me as long as they’re will to discuss it” thing. It isn’t going to happen unless you create an environment that makes it clear that you appreciate it AND that disagreeing with you isn’t going to come with a cost. Saying it is rarely enough. You have to prove it. If it’s been a long time since you were an employee, you may wonder why you have to prove it, but trust me, you do. You might even have to create a situation where a reasonable (ie: calm) discussion gets started, even if you have to “stage” (pre-arrange) the start of the conversation. It might seem a little disingenuous to plan a discussion like this and arrange for someone to disagree with you, but it’s THAT important to show everyone that you’re willing to engage in such a discussion. You need to say and show that it’s ok to disagree with you. You will also need to find a way to communicate that it’s not OK to be a jerk when you disagree with the owner, but otherwise, it’s OK to do so.

Once the discussion is done, it’s also critical that you follow up both privately and publicly. After you’ve had time to reconsider your discussion given the input you received during the disagreement discussion, call the person into your office – and do so that it’s obvious you’ve called them in. Discuss with them what your decision is, whether you changed your mind or not. Explain to them what their comments made you reconsider and how they impacted any other work you’re dealing with. If they changed your mind, explain why. Either way, be sure that they know that the risk they took in front of everyone was zero risk and had a return on investment: You recognize that they have the best interests of the company at heart (commitment) when they publicly disagreed with you and that you appreciate it.

Hiring for commitment over ego means hiring someone who is willing to take a stand because they feel it’s best for the company.

Chaos, frenetic activity and burning buildings

Years ago when the photo software company first started, it was not all butterflies and rainbows. Quite the opposite. Day one was full-on chaos. On Friday, the check was delivered and a jointly-written email (and written letter) from the old owner and I went out to every client. On Saturday, the code assets arrived. On Monday, reality arrived with a vengeance, along with a few hundred new-to-me (and annoyed) clients.

Instead of day one of a software company being a blank page full of “OK, what do we want to do and where do we start?”, day one was about the phone ringing off the hook. Most of the people calling eventually told me they were glad that someone took it over, but that was well after an awful lot of rescuing people (and their businesses) from the software equivalent of a burning building. While I didn’t create the situation, that didn’t matter. My purchase of that software meant that I also bought the chaos and inherited the responsibility (if not the blame) for it.

Without question, this is the worst kind of multi-tasking (as if there is a good kind). As a whole, my newly acquired clients looked more or less like this: Everyone panicking. Everyone worried about being able to take care of their clients. Everyone wanting a solution as soon as possible. Immediately would be OK too, of course, but most of them were surprisingly reasonable and patient (thankfully). I “inherited” it all via the purchase, so I clearly asked for it. Over the next few months, it took daily (or multiple daily) releases of software to bring all of that chaos to a halt. Back then, one (or five) releases a day seemed like such a big deal. Today, web-based software that runs companies like Uber and Etsy deploy thousands of changes per day.

That isn’t why I bring up this story. The chaos is.

Chaos management

If you’ve ever been in a situation like this, you know that it’s easy to panic. To this day, I am not sure why I didn’t – other than having been in the software business for 15+ years at that point. Despite having been responsible for plenty of high value, high pressure systems prior to that, I always had others to help out if I needed them. This time, I didn’t. Sometimes you want something bad enough that you might even forget to panic. Maybe that’s what it was. I don’t say this to humblebrag. I mention it because I’ve taken part in numerous situations where other people were involved and I want you to think about the impact of this sort of chaos on your customer-facing staff members.

Business owners might find it easy to shrug off the panic and take the chaos in stride. You may have dealt with experiences that allow you to juggle all of this and handle it without freaking out. Where you have to be careful: your staff. If they’ve never been in this kind of situation, it’s on you to make sure they get the support they need and the guidance that helps them deal with the customer service equivalent of Black Friday at Wal-Mart.

If you haven’t dealt with this before, there’s a simple strategy that’s easy to forget when the overwhelm hits: One at a time. That’s it. While it’s simple and obvious, if your team doesn’t get a calming influence and “one at a time” (or something) from their leadership (whether it’s you or one of your managers), they could panic. They could shutdown. They could unintentionally say or do something damaging to your relationship with the client.

Responsibility for handling and communicating all of this is on you (and your managers). Your team needs your backing and guidance – and preferably know this in advance. They need to know that they can escalate to you or a manager if things get bad. Obvious (again), but it’s easy to forget these things if you’ve been out of the trenches for a while.

As for clients, I suggest this as a starting point to reduce panic on the other end of the phone:

  • Communicate early and often.
  • Make sure clients know you understand the situation’s urgency and severity.
  • Deliver incremental progress. Don’t wait for perfect.
  • How your team handles recovery from a mistake is often more important than the mistake itself.

Inauguration Week, a time to stay focused

I have written on this topic several times over the last 12 years: Inauguration Week. More specifically, what happens to the business world after Inauguration Day. When Bush 43 took over in 2001, there was hand wringing. Before Obama took over in 2009, there was hand wringing. And now, with Trump’s takeover days away, the sound of hands (w)ringing, toll yet again.

The problem? That new President-elect. “He / his policies / his party’s policies will ruin my business.” . Doesn’t matter which President-elect, even though it’s hard to imagine that the last three or four president-elects could be more different from one another. Even so, I hear the same refrain I’ve heard every four to eight years.

I can’t start a business with so-and-so / whichever party coming into power.

My business is in trouble with so-and-so / whichever party coming into power.

Sure, there is some impact

I don’t mean to say there won’t be some impact. This time around, like every time, there is likely to be some impact on the energy business, on taxes, on healthcare, etc. Thing is, they’re impacted seemingly all the time by legislation from both parties, by world events (war, finance, technology changes, OPEC) and more. Is the price of gas / diesel different than it was before Obama? Before Bush 43? Sure. And it will be pretty much every week for years until some point way off in the future when technology matures past the use of those fuels.

However, when it comes to most businesses, the impact is usually trivial and the concern overblown. How you serve your customers and how effectively you sell and market to them has a much bigger impact in most cases than anything some randomly chosen President can do.

Sure, there is a lot of change in Washington. There will be, as always, a lot of pieces moving around on the chess board, and there will be plenty of drama in the news. As there always is.

Little, if any, of this has anything to do with the success of your coffee shop, sandwich store, plumbing business, clothing store, software consultancy, etc.

Don’t let Inauguration Week and a new President distract you and your team. Stay focused on your plan and your goals.

Step away from the drama

There is plenty to look at in the news that can make you take your eye off the ball. Don’t let it win. There is plenty to distract and worry your employees and contractors. YOU have to maintain momentum and leadership. not the TV news. It’s your job to make sure your team doesn’t get distracted and lose confidence over whatever’s going on in the news.

Use all the change as a reason to refocus and stay focused. Use it to rally your team. Remind them that no President has ever had a dramatic effect on your business. Be sure they know that you believe that the group of people working there now will not be the one to allow this (or any) President to be the first to negatively impact your business.

I know this might seem silly to some, but the thought processes are out there. People are always worried about their future when these kinds of changes occur. It’s easy and the news doesn’t help.

You have a plan for the year, right?

I’m sure you have a plan for the year. We’re already halfway through January. Remind your team of where you are toward your January and 1st quarter targets. Given the lack of likely impact by the changes in DC, it’s an opportunity to show your team what early trends look like.

Your team and your market has had over two months since the election to settle down. If your business is down since that time, I hope you know why. It might be normal for this time of year. If it isn’t, determine the cause and share it with your team. The last thing they need is to let the belief that four or eight years of that is inevitable.

For the same reason, if your business is up over the last two months, be sure to explain why. Your team needs to know why and how their work is affecting results and not that something completely out of their control (like political change) is driving your business’s performance.

Keep them up to date on the plan, its progress and course corrections you’re making. Keep your eye (and theirs) on the ball.

Who on your team is wired for tough situations?

In every sport, a team’s best players want the ball when the game is on the line and nothing but an amazing performance will help their team win the game. Regardless of the potential cost to them personally, the risk of failure and the pressure of the moment, they take charge during tough situations.

In your business, you likely have staff members built the same way. These are typically the folks on your team who step up in tough situations, probably for the same reason. It’s how they’re wired.

How’d they get wired that way?

I haven’t ever explicitly asked someone what makes them “want the ball late in the 4th quarter” but I suspect they would answer one of two ways:

1) In the early / formative years of their career, they had responsibility thrust upon them by virtue of the work laid in front of them. As a result, they’re become accustomed to tough situations.

In this case, it’s a matter of training and familiarity. Once these situations become normal, their confidence in handling them grows over time to the point where stepping up is simply part of what they do. They don’t see it as a big deal because being the one who deals with these situations is just part of who they are. One of the things that gives them this confidence is time spent in tough situations in the past. Be sure to include your up-and-comers to participate and observe so that they also gain this experience.

2) Leaders and peers have always shown confidence in their ability to perform under pressure, under deadline and in other tough situations.

This demonstration of confidence comes in several forms. It shows in team members asking not simply how they can help, but by taking on specific tasks that they’re confident your “crisis players” can trust them to handle. It shows in leadership asking if they can help (and if so, how) rather than yielding to the temptation to check for progress so frequently that it becomes an interruption. It shows in everyone asking questions that provoke the team to think a little differently about the problem, and to question and discuss every assumption.

How do you find more people like that?

Ask.

Prepare interview questions that provide your candidates with the opportunity to explain their experiences during crisis situations. When your team nominates someone for an opening at your company, discuss your “interview crisis” questions with the nominating employee. Your goal: to gather their viewpoint of candidate’s ability to handle crisis situations, and their observations of the candidate’s behavior under pressure.

Here are a few generic examples that will help you create better, more specific questions that are more appropriate for your business: Would you want to work with this person when trying to solve a problem that threatens the life of the company? Why? What about this person’s behavior under pressure impresses or concerns you? How do the peers of this person react to this person’s crisis behavior?

How do you help in tough situations?

Ask any crisis player you know what kind of help they need most when dealing with these situations. It may take them a while to mentally step back through the process. This should encourage you to plan on a discussion after the crisis abates. It’s not unusual to have these meetings so that we can, as we are famous for, make sure this never happens again.

Reacting to what happened so that it doesn’t reoccur is important, but what’s desperately needed is getting a lot better at prevention. Ask your crisis players what would have averted this situation. Ask them if they saw this coming. Ask them who else saw the oncoming problem. Ask them who listened to those who raised the alarm and who didn’t. For that matter, did ANYONE listen?

You’re not asking for names so you can have a witch hunt, but so that you can identify those who see things before others do. Some people have a sense about these things and ask questions or notice issues long before others. These folks need to know that management has their back when they think they see something.

One way you help your existing crisis players is by identifying players in the making and by giving all of them the resources and ear they need.

A well-armed minutiae: Urgent, not important.

Yes, I said “minutiae”, not “militia”. The similarity and power of these two words struck me, so I thought I’d substitute one for the other. One of the most dangerous things in your (and your team’s) day to day productivity is the “crisis of the unimportant”. IE: tasks that seem important only because someone interrupted you with them. Minutiae are the little things that, left uncontrolled, will consume your day and leave it unfulfilling, perhaps annoying and almost certainly empty of substantive accomplishments. Stephen Covey spent his career preaching about preventing these tasks from consuming your day – categorizing them as “urgent, not important”.

Eliminate minutiae with systems

As the owner or a senior manager, it’s critical to get out of the “interrupt me early and often” mode as soon as you can – but that doesn’t mean you can ignore the needs of those who interrupt you. You simply need to find a way to deal with them and set boundaries for them. A system helps.

Back in the days of Photo One, photography studio owners asked me to solve this problem for them. To the studio shooter, the most valuable revenue-creation time was in the camera room – ie: behind the camera time with the client in a room full of props, lights and other tools of the studio photographer. When they’re in that room with a client, the value they’re creating can create revenue for years, so the last thing they want to happen once they have “warmed up” the subject is to have the rapport / groove interrupted by someone asking where the coffee filters are, or how to process a refund for a charge split across two cards, or similar.

One answer to this is a system that provides answers to “interruption questions”. A studio owner told me that they had an answer / procedures book to deal with this, but they didn’t like the maintenance headache that it caused. This book predated Google docs and wikis, so they edited everything in Microsoft Word (or similar) and then printed the answers / procedures and put them in a three-ring binder.

The process established in the studio was to consult the book if you didn’t know the answer, then ask your manager and only then could the shooter in the camera room be interrupted. That interruption was OK only if it couldn’t wait until the camera room appointment was over. Obviously, this becomes a training issue at first so that the proper habits are established. Beyond that point, the book should get updated with one-off requests quickly so that camera room interruptions fall off quickly.

Make sure your minutiae cure is scalable

The studio owner came to me because they had a big studio and one book wasn’t enough. They needed multiple copies, but managing all the changes was a chore. Since most of the users were lusing Photo One all day, it made perfect sense to include the equivalent of “the answer book” within our software. That allowed anyone to get to it, plus the answer book functionality in the software allowed them to print a copy of the book so there were always printed copies available.

Resources like this can provide answers to questions, as well as step by step checklists or processes that allow the owner and managers to get things done the way they want, even if they aren’t available. One memorable example was “How to arm the alarm at end of day”. Do this wrong and you have no security or incorrect security. Do it right and the owner / manager gets some slack and the employee builds confidence in their ability to close the shop for the day.

A wiki, a FAQ, anything

These days, a custom desktop software feature like that really isn’t necessary because it’s so easy to build something like this into the private side of your company’s website as an internal wiki or frequently-asked-questions (FAQ) page. These assets are valuable not only for managers and your subject matter experts (SME) who get interrupted by such questions, but also for new employees or temps who come into your shop and need a resource other than “Ask Jennifer” umpteen times per week.

The last time I started getting overwhelmed by these things, I started writing down the context of the interruptions. That allowed me to see trends, identify what needed to be documented and get out of interruptionville.

Look beyond today, ourselves, our businesses

Recently, I read an article that provoked the reader to pay more attention to the big picture and look beyond the immediate meaning of day to day events. The premise of the piece was that “little”, seemingly unrelated events have repeatedly lead to regional or global events throughout history – such as the “minor assassination” of an Austrian prince ultimately led to World War I. It struck me that this premise also had business implications.

One of the core discussions in this piece was that we (as a species) often fail to see events coming, and that the path from point A to B seems obvious when historians examine them decades or centuries later.

While historians have the benefit of having the puzzle laid out before them, they claim that we (again, as a species) have been pretty consistent about three things contribute to our inability to detect these situations before (or as) they happen:

  • People tend to look at their present for answers, rather than considering the past or future.
  • People tend to look immediately around them, rather than analyzing how events connect regionally or globally.
  • People tend not to push themselves intellectually. Specifically, we don’t read enough, spend enough time thinking beyond the prior two points, challenge ourselves enough, and often tune out opposing views.

These are not accusations unique to today’s world, but observations noted repeatedly by historians dating back to Plato.

Look beyond the present

Let’s take that template of observations and use it to overlay our careers as owners, managers and employees.

When we look back, will we see some obvious signals that we missed over during our business career to date? For the things that stick out, would you do the same thing knowing what you know today? Do you feel you missed a signal or a piece of information that would have prompted you to do something else? Did you learn a lesson at the time that served you well? Months or years later, did a lesson hit you about those events?

Maybe there’s something to this, maybe not. Regardless of how your track record holds up under re-examination, the premise is worthy of consideration. How do the things that happened in the past impact current challenges? Do the methods being used to deal with these things hold up over time? Would your decision-making process or the execution seem naive, ill-advised, or not observant a year (or five) from now? If so, why?

Should that impact your execution and decision making processes? History says (in so many words) “yes, over all people and all times”, but everyone’s history varies.

Look beyond your immediate reach

Beyond your immediate reach, what is going on in your market? What’s going on in the markets that affect your suppliers (and their suppliers) and your clients (and their clients)? What events going on right now could affect you, your clients, their clients or your suppliers, even though they might be a layer or two removed from their day to day collective concerns?

For example, if you have a small party store, there are a number of things in the international community that affect you and your clients. Currency. International logistics. Regional conflicts. Tariffs. Trade agreements. A strike on the Long Beach docks.

Can you do anything about these events that are out of your reach? Probably not. However, you can use your knowledge of them to take action to protect your business and your clients’ businesses. Like it or not, you’re in their line of work as well, so paying close attention to what impacts them is important, even when it has nothing to do with what you do or sell.

Look beyond your norms

This one is complicated: read more, challenge yourself more, think more and review things contrary to your opinion. Yet it’s also simple and can be summed up in one word: Grow.

The single most important thing we can do for our business over the long term is to make ourselves better. A better read, better trained, better prepared, better developed business owner is more likely to make better decisions. That business owner sets the example for their team’s growth. When we have a deeper understanding of all sides of the challenges we face, and a deeper knowledge of the issues that affect our businesses and our clients’ businesses, we’re prepared to make better decisions.

Accountability and tapdancing

You may have seen a recent video of a Senate Finance Committee hearing with the Chairman of the Board of a large bank. He was being questioned about his accountability for his company’s behavior regarding opening new accounts on behalf of their clients.

Form your own opinion about the hearing. We’re here to discuss why it was handled as it was by the Chairman and why you can’t do that.

What you can’t do

The infuriating things about the video:

  • The Chairman makes a few comments that give the impression that his company did no wrong.
  • He shows no sign of accountability for the whole thing (and nor do his managers).
  • He indicates that he can’t provide guidance to the board about the nature of the company’s future actions.
  • He asserts that the whole thing was about one percent of his employees, with a tone that implies it’s really not a problem at all.

What makes it even more aggravating is that the value of the Chairman’s stock rose about $200 million during the period discussed. This means that the value of the company’s stock was misrepresented during that time.

Bottom line, while the camera was running, he washed his hands of the whole thing and of his possible future role in taking corrective action, much less punitive action against the senior managers involved.

Yet, he had a decent enough reason.

The reason for his position is that anything he said during that questioning was likely to be used against him and the company. Whether he is a slimy cretin or not, he is an officer in the company and has a fiduciary obligation to protect the company. One might theorize that lying (if that’s what he was doing) isn’t a good way to do that, but I suspect he was advised well in advance about what he could and couldn’t say to avoid making things worse.

Unless you’re the CEO / Chair of the Board / officer of a publicly traded company, you can’t do that.

What you have to do

If something bad like this happens, the worst things you can do are exactly what he did:

  • Dodge questions.
  • Give vague answers or non-answers.
  • State that you have no responsibility, despite being the Chairman of the Board (or in your case, the owner)
  • State that you have no obligation to lead your board to a decision about making management accountable.
  • State that you cannot lead your board to a decision about making yourself accountable
  • Decline to comment about your level of accountability.

This guy’s customers have a choice. They can get over it in some form, or they can eliminate this company from their lives by closing all of their accounts and banking elsewhere. Moving bank accounts is not easy. Between the regulations that require a bunch of paperwork (in most cases) and a visit to a local bank branch, and changing any electronic bill payments (or similar), it isn’t fun.

Your customers will likely have a much easier time moving to a competitor – if that is their choice. Your comments to any questions about whatever you’re dealing with are going to set the tone for their response and reaction.

When you do these things, you likely won’t be scrutinized by the Senate. In your case, your clients will likely be judge, jury and (hopefully not) executioner.

It was only one percent of our employees

One part of this hearing stuck out to me. The Chair said (paraphrased) “it was only one percent of our employees“. His tone implied that they were bad apples and he had no control or oversight over them. He said that despite the fact that there was a senior manager responsible for implementing the program that created this mess. That senior manager worked for him. Management laid out the program these people worked under, created a bonus schedule for it, oversaw the program and made it expectations clear.

Whether one percent of your employees is 5000 people or five (or it’s just you), you don’t have the choice this guy made. You have to take accountability straight up and dole it out to your team as well. When and if something like this happens, the responsibility to all yours. Own up to it, take your licks, hand out a few as needed and make changes to prevent future occurrences. The rest of your business’ life depends on it.

Focus alone isn’t enough.

If you’re a frequent reader on business improvement, you’ll undoubtedly read something that encourages you to focus. Focus on one niche. Stop multi-tasking and focus. Worry about the numbers – they should be your focus. Focus on the customer or on your employees, or on <insert list of more focus items here>.

OK, so what should I focus on?

Focus alone isn’t enough. You can’t really give the proper amount of dedicated attention to 37 different things. You’re going to have to figure out what YOUR list is and either delegate, skip or outsource the rest. Otherwise, nothing will get the attention it deserves and all aspects of your business are likely to suffer.

In the early days, this is toughest because it might just be you and no one else. So what drives your decision to let something slide a little, be it a day, a week or “forever”?

The long term.

It depends on your long term goals, but most of the small business owners I talk with tend to be 50+. As a result, they are seeing retirement a decade or two out. In most cases, they’re at cruising altitude with their business and have left behind the years of struggle and work to keep it open, then make it profitable and so on. They’re focused on maximizing the value of the business in the time that remains before they decide to sell.

The best have focused on building that company from the outset. “What do I focus on when it’s just me?” was answered for them years ago. Notwithstanding the random short term challenges that we all face now and then, their answer is “What can I do that is most important for my clients while growing the value of my company over the long term?”

The upside is that for a small business, it focuses you on the things that should get and keep your attention even if your plans to sell are 30 to 40 years away.

So your eyes are riveted on the buyout?

Yes, even if it’s decades away.

Building for a buyout is much different for a small company than for one on Wall Street. A privately-held company can focus on becoming more attractive to a buyer via predictable, consistent positive cash flow and profitability – with no stock price to lose sleep over. These things come over the long term through obvious accomplishments that most small businesses strive for: solid products and services, repeat business, great customer care, etc.

Obvious, right? The things that make a company profitable to the owner will eventually be the things that make it attractive to purchase. Part of that attraction is eliminating as much risk as possible from the buyer’s purchase. I don’t mean guaranteeing revenue or profits. I mean by selling a company that is inherently low risk due to the way it operates.

For example, you can reduce risk and build value by building quality, value-packed products, services and systems that produce dependable recurring revenue. You can reduce risk and build value by providing great customer care. Those loyal customers produce recurring sales and provide referrals that lead to new clients. You’ve reduced risk by structuring your company to survive the day you get hit by a bus. The same strategies will protect the company if you decide on short notice to fish Alaska for six months.

Do you feel your business is ready to sell?

When you sell a house, there’s that list of projects you have to get done in order to make it easier to sell. Once you finish the projects that seem essential to selling your home, seller’s remorse sets in a little bit. You wish you had made those improvements years before so that you could have enjoyed them. You enjoy the home a little more in your final days there – in part because of the changes you put off for months or years for whatever reason.

A business often has the same list. They make the business some combination of less risky, easier to run, more profitable, and/or less hassle. Over time, the value of these projects pay for themselves and make the company more attractive to the right buyer.

Making the company more attractive to the right buyer takes a long term view. You and your team will benefit in the meantime.