Business culture Employees Improvement Leadership Setting Expectations Small Business

I despise the term human capital

I despise the term human capital and its partner in crime, people assets.

That aside, if you don’t take care of your staff, they are far less likely to be able to take care of your clientele and thus, your business, in a way that you would prefer and expect.

Like anything that you’d like to retain and improve upon, your staff requires your attention and this comes in several forms.

To that end, this NY Times piece from Tony Schwartz and Christine Porath nails it.


Business culture Employees Hiring Small Business

At the hiring time #sponsored

Help wanted sign
Creative Commons License photo credit: andjohan

Note: I am blogging on behalf of Visa Business and received compensation for my time from Visa for sharing my views in this post, but the views expressed here are solely mine, not Visa’s. See full disclosure at the bottom of this post.

Doctor Obvious says “Hiring the right people is crucial for any small business.

While Dr. O has a point, what the good doctor won’t tell you is what’s most important about finding the right people.

What’s more important to you when hiring? Experience? Cultural fit? Attitude?

Experience matters

Production experience matters, no matter what “production” means to your business. No one would argue the value of hiring someone who “hits the ground running” (i.e.,: creates value from the day they arrive).

Assuming you do a good job of evaluating experience, you gain from the training and work that person’s done in the past. You may also gain from things important to the both of you that they didn’t have the opportunity to demonstrate at previous employers.

Experience isn’t always required. Many businesses hire for entry-level positions, but there’s still some experience that you can seek. For example, interests and hobbies that relate to the work can help entry-level staffers become productive quickly.

But…is experience the most important factor?

What about cultural fit?

How new staff members fit your business culture-wise isn’t more or less important than the experience they offer – it’s equally important.

If a new employee doesn’t fit your company’s culture, their experience won’t matter. The clashes will prove that. With the speed and quality expectations of today’s business, the ability to collaborate is more important than ever. Even for programmers who often find themselves working alone far from the main office – the ability to collaborate is essential.

One of the things that always impresses me about a candidate is when they understand that they’re here to make stuff happen, no matter what the job. This isn’t so much a cultural fit with the staff as it is with the company’s goals. In a small business, it’s a must-have mindset.

My “initiative test” with the paper ball is one way to check a candidate’s initiative and attention to detail. When someone comes into my office for an interview, I leave the small wad of paper on the floor between the door and the candidate’s chair – making sure there’s a trashcan within reach.

I want to know when “management” isn’t around that they will address something when they see it. Initiative matters. When I look for someone, I don’t want to hear “it isn’t my job”, I want to see that they’re going to either take it on, put it on the list of things to deal with or delegate it properly to the right person.

Culture extends beyond collaboration and initiative

Culture is also how your business works.

Think about a few critical path situations from your past and work them into your interview process.

You’re looking for situations that:

  • Save (or lose) a new customer
  • Save (or lose) a long term customer
  • Expose a known and not-yet-addressed weakness in your business
  • Show off your staff’s “amazingness”
  • Show weaknesses of the past, sometimes ugly ones

While a full-on role play with the candidate may not be necessary, discussing the situation will show the candidate’s:

  • Ability to think on their feet
  • Experience with the situations in question
  • Values re: customers
  • Aplomb during a challenging situation

Even if the position you’re hiring for isn’t primarily about customer service/support/interaction, these scenarios will help you evaluate cultural fit. Does their response echo what your staff would/should do? Is it even better? Will they serve as not only a good staff member, but also as a good example?

When things don’t go well with a customer, this doesn’t mean the customer is a pain or is not a “good customer”. They may be a challenge because they push your skill/service boundaries, or they’re just difficult to work with in some form (what’s their baggage?). A staffer who handles these situations well has great value.

Your candidate’s responses will shine a light on the best of both worlds – how they’ll fit your culture and your clients while leveraging their experience.

DISCLOSURE: I am blogging on behalf of Visa Business and received compensation for my time from Visa for sharing my views in this post, but the views expressed here are solely mine, not Visa’s. Visit to take a look at the reinvented Facebook Page: Well Sourced by Visa Business.

The Page serves as a space where small business owners can access educational resources, read success stories from other business owners, engage with peers, and find tips to help businesses run more efficiently.

Every month, the Page will introduce a new theme that will focus on a topic important to a small business owner’s success. For additional tips and advice, and information about Visa’s small business solutions, follow @VisaSmallBiz and visit

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Automation Business culture Business Resources Competition

Measurement, competition and the right person for the job

Everyone just loves performance evaluations.

Employees tend to dread them because they’re often a useless exercise of “well, you’re doing ok, here’s your 2% raise, see you in 6 months or a year or whatever”.

Sometimes you’ll hear that you need to improve something, but more often than not you’ll hear nothing specific that you can really bear down on. Back to the treadmill you go, cubicle boy.

While there are exceptions in high-quality (and sometimes, high-pressure) organizations, salespeople with easy-to-measure performance metrics (deals, revenue, etc) often get little in the way of feedback other than a Zig Ziglar book tossed in their direction.

Don’t get me wrong, that’s not a bad thing and it’ll likely help – but it isn’t detailed, high-quality feedback that helps you improve your performance. Quotas aren’t feedback and neither is a serving of Zig, no matter how tasty a morsel of brain food it might be.

Self-employed folks like me get evaluations in a slightly different way: in the form of testimonials or by not having our calls returned, or by something somewhere in between. Not unlike an employee performance review – you almost always know why and to expect what you got.

Don’t be the majority

The majority of folks just don’t get a lot of guidance on what they need to do and specifically how to get there.

Some companies are better at this than others, but most just don’t seem to focus on it. Big mistake, because without specifics, you don’t know much.

You don’t know for sure who the best is, unless you consult your “Seat of the pants” meter – and we all know how accurate that is.

You might think you know because Joe talks about what he does more than Mary or Jerry, but it might turn out that Stefan (who you never see) is really the one putting out the programming that has the fewest bugs, the pottery that has lowest return rate, the timber framing that requires the least amount of shim, the websites that produce the best sales, the brochures that generate the most calls, or whatever.

All of these things are measurable.

If your business isn’t one of the ones I mentioned, there’s something that your employees do that can be measured – and thus, managed (yes, a Druckerism).

You already know what to measure. But you might not be doing it, and you likely aren’t doing it by employee, much less breaking it down by time of day, days since the last day off, days since first leaving for a sick day and so on.

Real world

Let’s make it a little bit harder by making the job a little bit harder to measure.

Imagine that you’re trying to do this measurement at an architecture firm. There’s a lot of highly-subjective work going on there. Seems like it would be hard to measure.

Who makes the best designs? And what does “best” really mean?

Sells the best? Uses the least amount of resources? Burns the least energy when compared to similarly purposed structures?

You have to decide what “best” is because until you do, best is a gut feel.

That’s a terrible way to assess performance, particularly of complex tasks like architecture, engineering and programming, but it isn’t any more attractive for less-complex roles.

Knowing your staff. REALLY knowing them

Without performance measurement of this nature, you might not have an idea who is more productive with high quality work when single family homes vs. commercial structures.

You might not know who does crappy work when they take 1 sick day and hits their normal quality level when they take 2 days. If they happen to perform critical path, possibly life-threatening work on that second day, wouldn’t you want to know?

The really cool thing is that it can completely alter your company’s future by vastly improving the one thing that lots of folks mess up, or at least, don’t do a very good job of.


Every manager has a bad hire story, maybe two.

Trouble is, that’s the part of the iceberg that’s above the water. Avoiding that hire or giving HR and management more tools to make a better hire are what you really need.

Measurement to the rescue.

Aych Arr

Using this same measurement data, your hiring can change – if you want it to.

For example, instead of hiring someone who knows how to competently design 437 different structures (in generic terms, a civil or mechanical engineer), you may just need to find the master of all composite wood beam designs because that’s the weak spot on your team.

You know this because… your measurement data says so.

Even if your composite wood beam expert just retired, you can still look at your measurement data to see which parts of their job should be given to existing staff and what specialties across the entire staff are your company’s weakness.

Either way, you hire for strength in the skills your data indicate – remember, the data illustrates what your existing staff do best.

IT managers and software execs: Imagine if your favorite programming environment could do this. What could you get from a tool that measured development at this level of granularity?

What if you knew who performs task A faster than everyone else, but stinks at performing task B, but you never really figure this out because each person does their own project from beginning to end.

Get to the point, will ya?

You have all this data. As a result, you have better people who are creating better work. If you bid jobs, your performance data will help you produce better bids (we talked about that last week).

And why exactly aren’t you measuring performance?

Business culture Employees Entrepreneurs Improvement Leadership Management Motivation quality Restaurants Retail service Small Business Strategy

Does your job suck? Is it boring? Is it creating value?

Creative Commons License photo credit: riot jane

First, I’ll ask from an employee perspective.

If you’re the employee, I hope your answers are No, No and Yes, respectively.

If they aren’t, exactly how long do you have before someone figures out that your job can go away? What can you do about it before someone does something about it for you – and it isn’t the action you want them to take?

If you are the employer, ask your people.

For that matter, if you have people in jobs that result in “No, No, Yes” answers, are there ways to make the jobs not suck? Not boring?

Use them, don’t lose (or waste) them

Is there a way that those folks could be creating more value and thus generating profit instead of being an expense? If they aren’t creating value in some way, what exactly are they doing and how far are you from laying them off?

Wouldn’t it be better to use them more productively, making them more valuable to your business vs. letting them go and wasting all the time and money you invested in training them?

You DID train them didn’t you? Even if it was just to your way of doing things…

Pass the Calgon

Business owners should be asking themselves the same questions on a regular basis about the products and services they provide to their clients, much less what each of their staff members bring to the table.

You can also add “How are we taking away the pain?” Are you doing that too?

Remember those old Calgon bath oil bead commercials? “Calgon, take me away…”

Competition Employees Management Small Business Strategy The Slight Edge

The valuable assets your competition is giving away

Classic photo of a distress sale -- Great Depression $100 will buy this car
Creative Commons License photo credit: onohoku

I‘ve always been amazed that a large company can lay off 20,000 or 30,000 workers and not fail soon after. These days, layoffs of 5,000 to 20,000 are regularly in the news.

In January 2009, 241,749 people were laid off across the U.S. â?? and that likely only counts the firms large enough that they have to report layoffs to the U.S. Department of Labor.

It likely doesn’t include the people who are working fewer shifts or short shifts. Not a layoff, but just as impactful to those folks. That number could easily be in the millions.

Still, it’s the companies with tens of thousands too many white collar workers that are stunning.

What are they thinking?

If you can lay off 30,000 workers next week â?? what in the name of standing around the water cooler are that many people doing to create value and generate revenue this week?

How critical could their work really be if a company can afford to send that many people home with less than a day’s notice?

Weâ??re not just talking about manufacturing companies where an extended shortage of orders could result in having too many people on staff. Even in that sort of environment, sales don’t change so quickly that 30,000 people who are providing value and generating revenue on Monday are suddenly not needed on Tuesday.

What management team would allow such a glut to get to the point where you’d not only have to lay that many people off, but you’d have to do it all at once?

How was the performance of those people being evaluated?

For that matter, how was the management over those folks being evaluated if their company could afford to layoff that many with one massive cut?

Gluttony: Also one of the seven deadly business sins

Just so you get an idea what kind of impact we’re talking about, let’s do a little math. 30,000 people who are paid an average of $35,000 a year is a total payroll of ONE BILLION, 50 MILLION dollars. 20 million bucks a week.

That doesn’t count benefits, the employer half of SSI and Medicare, unemployment insurance (much less the increase caused by laying off 30,000 people – YOW) and so on â?? nor does it count the human resources team necessary to handle the various work that has to be done to handle the paperwork and such that’s necessary for 30,000 workers.

Nor does it count the office space necessary to house that many people and all the assets necessary to give them something to do (desks, computers, chairs, etc).

How do you waste $20,000,000 a week â?? plus all those costs – on that many people who are easily expendable (proven by the ability to lay them off all at once). How can you afford to discard the experience and business knowledge that 30,000 people have gained in your industry?

Doesn’t make much sense, does it?

What about your business?

For the small business owner â?? it’s not just a cash flow issue, it’s about not hiring people you don’t need, being smart about the ones you do hire, and cross-training the team you do have so that you don’t ever have to lay them off.

There are a few large companies who have never laid someone off. You can read about them here:

As for everyone else – now is the time to strengthen your business, train your people, test new product lines and services and start competing harder in your market while many of your competitors are in a possibly weakened condition.

If your direct competitors – or those in similar fields – are laying off people,  put the word out on the street that you’re interviewing.

Why? So you can get a look at the folks everyone else has laid off. There just might be a gem in the bunch.

Why not use their sharpest knife against them?