Co-op Advertising

Something you'll hear me say over and over again is that every part of your organization must be monetized. From Accounting through Warehousing and beyond, every department has to make money on its own - enough to absorb its own costs of operation and staffing and still have something left over. Co-op advertising is a perfect example.

The idea behind co-op advertising is that you purchase advertising space - typically in an expensive media outlet or catalog (perhaps even your own catalog) - and resell part of that space to Customers or Vendors who otherwise couldn't afford to advertise in that outlet.

If your Vendors produce physical goods, you might let them buy ad space in your catalog in return for a certain volume of their products. This is cheaper for the Vendor - their cost to produce that good is nowhere near what they're asking you to agree it's worth in credit. And if your cash flow is tight, getting product in exchange for space in a catalog that you've already paid for can seem like a good deal.

The real goal in selling co-op space is to turn a profit on those sales. If you buy a full page ad in a given magazine, for example, charge your Vendors or Resellers at least 20% more for the space than you paid. If you've picked the right outlet, your Vendors / Resellers want to get in on it, but the monetary divide is too wide. But they may be able to afford an 8th of your space in exchange for what a 6th would cost.

Tip 2: Don't expect Salespeople to sell co-op space if you don't spiff them for it. It's not going to happen. You know why? Because it's a distraction from selling your goods and / or services, and they know it. Better to hire someone who is brought in specifically to sell co-op and reward them when they do.

If a Vendor agrees to be in your publication or media outlet, make sure they follow your guidelines for submission. Don't let them push you around; there's not a PR fellow around that hasn't had to deal with such guidelines, and yours are likely to be far more reasonable than many.

Expensive Reports

Does your organization issue corporate credit cards to execs and Salespeople, then pay their bills for them? How's that working out for you? Getting those expense reports on a timely basis, are you? With all of the receipts included, and with your form filled out correctly? No?

Of course you're not. Know why? Because you're doing it wrong! Do this, instead:

• Issue corporate credit cards, just like before, only have the bills go to the employee's home address.
• Set the account up in such a way that the employee has to pay each bill themselves, out of their own pocket.
• Ensure that - once you have received a properly filled out expense report with all necessary receipts attached - you reimburse the employee no later than the end of that week.

Here's what this does for you:

• Because they are personally liable for all charges, you don't have to chase employees for reports or receipts any more. If they don't provide them, you don't reimburse, and they still have to pay the credit card company.
• Any interest charges they incur are theirs to pay - not yours or the company's. As long as you reimburse promptly, it's not your fault if they pay their bill late. It's their bill, after all, not yours.
• If they don't have a receipt, you don't reimburse for that item. No slipping in slush money, no losing receipts. Everything must be documented and included, or the money lost is theirs.
• Because the grace period for many credit cards is now 20 days or even less, after a month or two, the first thing a Salesperson will do after returning from the road is to complete and turn in their expense report. As long as they do that, they will never have to actually pay for anything out of their own pocket - they will pay each bill almost as soon as the expenses are incurred (providing they don't wait to make payment once they receive their reimbursement - again, not your problem).
• That fellow who used to lose all of his receipts? He quit. Good riddance!

Ass Kisser of the Month

You know what's wrong with Employee of the Month awards? Their existence. In nearly every organization on the planet, it's an excuse for management to perk someone they like. The problem with this sort of popularity contest is that it does nothing but cause resentment among employees, who see it for exactly what it is: Another way for management to reward their buddies for being their buddies. Bear in mind, this comes from a guy who's won these types of awards many time before, and who's been in management for a long time.

If you have any illusions that your organization is a business and not a club, don't ever utter the words "employee of the month".

Okay, having said that, I'm going to say exactly the opposite, and you're going to agree with me that both answers can coexist in the same space-time continuum without causing the annihilation of this universe, okay? Here's how it works if you really want to do Employee of the Month properly:

• Management has no say in who is nominated or who wins. Let's face it, management gets to choose winners and losers in everything else; they have no business here. Every nomination must come from someone who is not a manager, and only non-managers get to vote. 
• As part of the process, each person who nominates a colleague must explain in their nomination why they believe the other employee is a lifesaver. None of this, "So-and-so is always so nice" or "Treats Customers well". They should be doing that all the time. Never reward someone for fulfilling their job description; it sends the wrong message. The nomination must be for something that was above and beyond the call of duty. 
• If no one nominates anyone in a given month, there is no Employee of the Month. Period. The moment you jigger this, you're back to belonging to a club, and not running a business. 
• Make the prize something of value to the recipient. And by value I don't mean something that costs the company a bundle. You know what most non-managers want? More time off. So award the winner an additional paid day off of their choice. Screw what HR says; the winner will truly appreciate it - it feels just like playing hooky - and their friends will want it, too, which generates more above and beyond behavior. 
• Record it in some lasting way. A plaque that you add names to, if you're old school, or a permanent page on your blog, intranet, and / or FaceBook page. Something that the recipient can look at when they're having a bad day. Something that others can see is part of your organization's commitment to recognizing and rewarding extra effort (not popularity). 

I throw these pearls out there so you can add them to your strands and shine. But it's up to you to pick them up, and to share what you've found on that beach with us, too. Got anything shiny?

U Shore Do Talk Fun-E

Every industry and organization have their own terms and even their own language that are completely inscrutable to anyone from outside. It can take years for newbies to learn the lingo. Meanwhile, a lot of knowledge is flying over their heads at the speed of sound simply because they don't grok.

Solution: Create a company dictionary of industry and organization-specific terms, including their usage and which departments they tend to be associated with. Post this dictionary in your new hire folio, on your company intranet, your FaceBook page, your wiki, your cloud - anywhere that newbies are likely to look.

A major component of new hire on-boarding is figuring out who to go to for what. How about an internal contact directory that shows not only name, phone number and title, but also what each person actually does, so that you don't have to ask everyone else in the building.

You see? It's the seemingly minor and easily corrected things that waste a large percentage of your man-hours and productivity.

Here's another one: Once you've created these two animals, turn them loose and let employees update them. Heck, if it's a wiki, you might even just start with the title and let them take everything from there. After all, they know everything that should go on both far better than you do. Plus it frees you up to actually get some work done between all those meetings.

Hmmm.. empowerment, buy-in, plus less work for you. What the hell are you sitting there for? Go make this happen right now!

Communication Disintregration

A funny thing happens when you move from being a worker to being a manager: People stop telling you things. There are 2 main reasons for this:

• They assume you know everything they do. You're the boss, after all. You know everything, right?
• If you don't know, they're afraid to tell you, either because they're afraid they'll get yelled at or because they're afraid of getting someone else in trouble or they're just shy or they figure it's not their job to tell you.

Managers need information like fish need water; they die without it. To be effective and make good decisions, you have to know what's really going on. And you simply can't be everywhere at once to see it with your own eyes, even if it's something that happens on your radar. And as organizations move from small & intimate to medium-sized & distracted to large & distant, this communication gap only gets larger without a deliberate and never-ending effort to fill in that canyon.

Here are some of the best ways that you can do this right now, without a committee, a meeting, or resource restrictions getting in your way:

• Never punish the bearer of bad news, even if they are the cause of it. If it's a discipline issue, of course follow your normal process, but always recognize and praise anyone who brings an issue to your attention. They are trying to save you time, money, resources, etc. They are lifesavers, not assassins, and should be treated accordingly. 
• When you meet with your team, invite the manager of a department that touches or is touched by your group to praise what your group is doing right and talk about what issues need to be addressed. They can report progress back to their team, you learn what's happening, your team takes ownership and processes improve. That's at least 4 goals with just one puck. Not a bad return for 5 minutes' of your time.
• Hire or designate a Bullshit Detector. Sometimes you completely miss the mark on something, and roll out a new plan or program or process that is doomed to fall on its face, and everyone in the room knows it but you. I have been blessed with a Bullshit Detector on every team that I've ever led, and it has saved me time and again from brilliant ideas that were bullshit because of something I didn't know or somehow missed. There are caveats to the Bullshit Detector, though, for it to work its magic: 1) If you designate this person, make sure that it's the member of your team who tends to find fault with everything, or who can spot a process hole a mile away. (This increases ownership - you're making them a trusted advisor.) 2) Impress upon them that they may cry "Bullshit!" to you alone, preferably before the meeting. That way, they no longer complain to team members or talk you and/or your ideas down in front of someone else, plus they give more careful thought to their objections, helping them grow into higher positions. 3) You reserve the right to go ahead with your plan, program, etc., anyway, because you are the boss and you have a view and/or level of experience that they don't.
• Befriend and regularly catch up with every other manager who affects or is affected by your team - and not just the ones you personally like. This is the 'Customer for Life' method and, because it is so inclusive, you are more likely to be able to ask for and return favors and help each colleague get where they want to go... which helps you get where you want to go.
• Have pot lucks and team-building events (not corporate functions or anything formal - things that take almost no planning are best, here), and invite members and managers from other teams. Grill hot dogs together, put together an after-hours soccer team, go to the movies together. Social in its best sense.
• All of the above.

I'm Hiring

I need a Business Development rep in the Cleveland area to prospect jewelry stores nationwide on behalf of Heather Moore Jewelry. We create custom-made, high-end jewelry. Excellent pay and benefits, terrific team, and a wonderful opportunity for a customer-focused salesperson with strong consultative selling ability.

If this is you, please send your resume to David.Maurer@HeatherMooreJewelry.com.

Hiring, Part 2

When you hire someone, make sure that they're smarter than you are. If they're not, why not just do it all yourself? If you want your company to be the best, you have to hire the best. At the very least, even if they're not smarter than you are, at least make sure they know more about their chosen field than you do. And if you worry that one of those shiny pennies might replace you one day, maybe you'd better get busy polishing your skills.

When you lose an employee - especially for disciplinary or performance reasons - replace them with someone better. If not, your organization will stagnate.

I simply can't say enough about cross-training at every level of your organization. Every company that I have been with that had a cross-training program for new hires had far fewer communication issues than companies that didn't - not least because it puts you on a first name basis with the people in each department, plus their pet peeves and the issues associated with doing their jobs, and the impact that you will have on them on a firsthand basis. It's a lot easier to create a good process if you already know firsthand what bad ones look like from every level of the organization.

When you hire someone, there's typically sag (stagnation & lag) time between their training period and the time that they actually begin to do real work. Why pay someone to sit around and forget everything you've just spent time and money teaching them? The moment training is over, have them sit with everyone who already does the job that they're going to do.

Notice that I said 'everyone' and not 'someone'. This is key. Every person is going to know something different about the job and each performs the job their own way. By having your new hire sit with each person, they can learn all that's good about each team member's process and knowledge, and leave out the poor processes that veteran employees no longer even see.

After your new hire has shadowed every member of their team and taken notes (this shouldn't take long - perhaps 1 to 4 hours per person they sit with, depending upon the complexity of the job), it's time for them to be mentored by each member of the team as they perform the job themselves. Again, the idea is that each member of the team will spot different things that your new hire needs to improve. It's also a terrific way to help employees bond and to create buy-in for the new hire with the other members of the team. (This phase takes longer - likely at least a day with each existing member of the team.)

By the time this training period is over, your employee has the benefit of knowing everything that the other members of the team know, plus a fair bit of practice under their watchful eyes. This also increases buy-in and retention on the part of new hires, who now feel not only part of the team, but also that the company values them enough to put a considerable investment into their on-boarding and success.

The Power of Chocolate

Go to Pier 1 or a suitable facsimile thereof and purchase ye a basket or a bowl, deep, and about 10 to 14 inches across. Make it something that fits your office decor. Then go to Godiva or some other confection supplier and purchase a stock of small, individually packaged chocolates. Good stuff - none of that cheap crap you pass out at Halloween. Put it on the corner of your desk closest to the door.

The first colleague who notices it will ask what the chocolate is for. Tell them that it's free to anyone who wants some. They will likely laugh and leave. The second person who looks at your chocolate collection will ask if your kids are selling it for school. Tell them no, it's free to anyone who wants some. When they ask if that's really true, tell them yes and suggest a particular piece. Smile.

The third person to arrive will say that they heard that you 'have free candy or something'. Tell them yes, and that you believe chocolate is good for the soul. They'll take a piece, maybe two, and go tell everyone in the building.

When a woman (it will always be a woman) says it looks good but she can't take one because because because... What she really wants is not only your permission, but your coercion, so that she can tell herself later that you made her take it. Remind her that chocolate has healthful antioxidants, plus the pieces are so small, plus she's earned it.

Refill the bowl on the day it is empty.

The reasons why you will do this:

• Everyone will come see you - even people who don't like you. As a result, you have an opportunity to ask anyone anything about what's going on in the company.
• If someone is angry at you, they will show up at your desk angry, but the chocolate will mitigate their ire. They're still mad, but they also want a piece of chocolate, and they can't in good conscience chew you out too much if they expect to get one.
• It really does make everyone happier. If they're having a bad day, it gives them hope. If they're tired, it's a bit of energy at 2:30pm. If they just accomplished something, it's a way to reward themselves and mark the occasion. And on and on.

You will have a much happier company, and for a fraction of the cost of increasing employee benefits. A chocolate coating take the edge off most things - stress levels decrease and people seem much more tolerant of each other. Plus it's hard to dislike the guy who gave you a Key Lime Truffle right after your presentation bombed.

When you refill, change up what's in your basket / bowl. The key to this strategy is variety. If you have the same thing every day, the people who don't actually like your selections have one more reason to stay away. But if what you have changes every week, they'll stop by just in case you happen to have added some chocolate covered pretzels with cinnamon.

It's not a cost of doing business. It's an investment in a happier, more cohesive office.

Plugging the Damned Dam

How many times have you seen or been a part of organizations that spend all of their time plugging holes in the dam instead of taking the hammer away from the kid who keeps making the holes?

One of the biggest holes for B2C (that is, businesses that sell directly to consumers) is this: Employees who forget who the Customer is. (Hint: It's NOT THEM!)

You're seen it. You go to a restaurant and no one greets you. You show up at a doctor's office and there is no one to take your information. You want to ask a question about a bathroom faucet or a dress, but the sales floor is a ghost town. You call a local business in an effort to support your community, but no one picks up.

These are business killers.

If you own or manage a small business, do this: Have one of your relatives go in to your business on your day off, and have them film or make notes of the whole experience (it's certainly cheaper than hiring a Secret Shopper). If you're at home, call your business using your spouse's phone, or your kid's. You may not like what you hear... or don't hear.

You must build your corporate culture in such a way that employees act like you want them to even when you're not there. If you don't, you'll never be able to take a day off, and your spouse will kill you. The best way to get employees to do what you want even when you're not there is to hire the best employees you can afford, even if it takes a long time to find them. Never, ever hire someone just to have a warm body in the position; you'll only have to fire them later, or live with your mistake for years.

Second, make sure that you have communicated your corporate culture - mostly by making sure that you and all of your managers are living examples of it. If you always treat Customers like who they are - the people who buy your groceries - and impress on your employees that perfection is the only behavior that is acceptable, and why, things will begin to move in the right direction.

Bear in mind, when I say Customers buy your groceries, I mean Internal Customers as well as External Customers. If you don't treat your employees perfectly, nothing else you do will encourage them to treat External Customers well. In fact, they are much more likely to do the opposite. Wouldn't you, if your boss was a jerk?

Kick Your Company Out of the Nest

I've talked about hiring friends & family, pocketing & knowledge retention, deciding whether your organization is a club or a business, generational businesses, and chain of command, all of which are difficult changes for the established, non-business-school-graduate. But the difficulty factor doubles if you're an entrepreneur, because of an added element: The business is your baby.

You started your business in your garage, spare room , or attic, but it really began as a dream. Your spouse and kids probably helped you, at first, and then maybe a friend or a neighbor, because you couldn't afford anyone else. As time went on, your growing infant organization ate up more and more of your time. Eventually, things got to the point that you slept only when you fell over, sweated the books (you're still sweating the books), never took a day off or a vacation, and made every sale yourself because there wasn't anyone else. And finally, after all of that work, you join the ranks of the less than 1 in 10: A start-up business that lasts for more than a year.

Year two, you maybe hire a high school kid or two to work part time. You miss your kids' school plays, concerts, and games because you have to work. You always have to work; you no longer even seriously think about doing anything else. But you start to see a little success, so you reinvest that and go to a trade show or a networking event where word of mouth grows. You eventually have enough money for your very first ad, which does nothing, but that's okay because you learned from it, and your next ad gets some attention and pretty soon, you can actually hire a couple of real employees and learn to sweat over payroll.

Another year or 2 or 3 go by, and you have a full-time work force. Each person wears 10 hats because there are no hat stands. Everyone works late (but never quite as late as you); no one claims overtime. You have shared your dream and these people believe it, fearless because they don't know any better, and clueless enough to do everything wrong over and over again until they eventually find a method that works.

And now, 5 or 6 years in, you can finally afford to hire someone who can actually tell you what you're doing wrong: Your very first consultant. It's almost like a first kiss, what we used to call 1st base, in that it promises bigger and better things to come. And then, day of days, you hire your very first employee who has actually done this before, and maybe even many times before, which is the entrepreneur's equivalent to 2nd base, and then another and another pro join up, 3rd base and now the bases are loaded with people who know what they're doing, and...

... you jump out of the back seat and say, "Take me home!"

I understand. Like any new, extremely emotional experience, letting your company go is like sending your son or daughter off to prom or spring break. You had control, and now a bunch of pencil pushers are trying to tell you how to run your own company. Things used to be so much easier, back when you didn't have to get approval or document or assess readiness. And the thing that sends you over the edge is this: The very first dip in revenue.

Panic! Someone is groping your child! All of these people are going to kill your kid!

Stop. STOP! Take a deep breath. You hired these people because they know what they're doing, right? And they've managed not to destroy previous employers. And you agreed that, to make this whole thing work, you have to get the hell out of the way and let them do their jobs. And you know that - you know it - but you don't feel it.

This is the glass ceiling where the 10% who made it through year 1 fail: They can't let go. And while their business doesn't die right away, they begin to lose people by the truckload, because they see it even if you can't: The company has stopped growing because you are standing in the way. That's right: You have become an obstacle for your company to overcome, and there are only 2 ways that things can go from here: You can fight to regain control over your teenage company and lose its respect, loyalty, and love, or you can do what all good parents do:

Trust that you brought it up right, and finally take that vacation you promised your spouse so long ago that you can't even recall doing it. Tell no one where you go. Take no phone. Watch no news. Stay gone at least a week, but preferably a month. If your business really can't live without you that long, you've already failed. But when it does, it will thrive and blossom into a strong, functional adult, stepping right out of its diapers and into its first acquisition, merger, or IPO.

And isn't that what every corporate parent really dreams of?

The Way of the Road Warrior

There was no post on Friday of last week because I got to do something that I used to do a lot and haven't done in awhile: A trade show. And as I packed my bag in 10 minutes flat and woke up exactly 7 minutes before my 4am alarm buzzer to catch the plane, it occurred to me that the Way of the Road Warrior is engraved on my bones. No matter how long you're away from it, it's still there, waiting in your brain to reactivate the moment it hears the words 'booth space'.

I learned my trade show kung fu the way most Salespeople do: Years of travel to bland, lifeless hotels in cities all over the country, making mistake after mistake and surviving flameouts at crucial moments by learning to turn a paperclip, a rubber band, and a $6 bottle of minibar water into a substitute trade show booth 4 minutes before the doors open because the real booth is still sitting on a loading dock in Detroit.

Eventually, so many things go wrong on the road that you become bulletproof simply because your body is composed entirely of scar tissue, from your twitching right eye scanning for the merest glimmer of interest in the crowd to the soles of your too-expensive-but-concrete-is-hell jet black nurse's shoes.

Veterans of the Way understand that the size of one's expense account is inversely proportional to the remaining value of the traveler's soul. Some of us hope to redeem that pawn ticket by giving back to the newbies, telling them the accumulated wisdom of our ages - all of the things we wish someone had told us, 'way back when, including disasters we witnessed but were lucky enough to avoid. Here's the 1st batch:

• If your shoes are dirty and you don't have time to get a shine, use your hotel washcloth and the hand cream that they all seem to pass out. If there's no hand cream, substitute hair conditioner, but be sure to buff it in.
• Thou shalt always carry a Tide Stick.
• If you have trouble sleeping on the Road, either because of jet lag or you just don't sleep well away from home, turn the thermostat in your room down to about 65 degrees. Make sure no light can enter the room at night, and as much light as possible hits your corneas during the day (sunglasses are the enemy).
• If you have to go drink with a client, clients, or the boss, have 1 drink. Do not drink more. Make your 2nd drink ginger ale or ice water. By the 3rd drink, your companions will have forgotten that you aren't keeping up, and you will be fresh and unfrazzled come morning.
• If you are an idiot and have more than 1 drink, despite my telling you in no uncertain terms not to, drink 1 glass of water for each mixed drink (in between drinks; at the end of the night does you no good), and 1 last glass of water with 2 plain aspirins (nothing fancy; aspirin) just before you sleep. And get to bed as early as you possibly can.
• Never, ever, ever go drinking with colleagues who are not your boss. You will wake up in a pool of your own vomit, miles from your hotel, your wallet empty and your cell phone MIA, on the day that you were scheduled to lead the team-building exercise.
• Your cell phone will die when you absolutely, positively can't afford for it to. Invest in a spare battery and keep it charged and in your briefcase.
• Thou shalt always take the exit row. You're going to be on your feet for days. Give your legs a break while you can.
• Your hotel room's alarm clock will work exactly the opposite of what you think, and their wake-up call system will fail on the day of your first-thing-in-the-morning presentation. That's why Brookstone still sells travel alarms: They are all purchased by Road Warriors.
• Don't leave the hotel at night alone, no matter whether you are male or female, especially if you carry products with you. Like any other predator, local scum know which hotels house conventioneers and trade show travelers and stake them out, waiting for you to 'go see some local color'. Many states allow you to carry mace, and you can usually find it for $9 a canister in the local hardware store. Just make sure you don't take it on the plane (leave it in your room when you leave; it's only $9, and maids need protection, too).
• Likewise, do not set foot in an unbranded cab, even in daylight, or take a tour of anything. If it's someplace worth seeing, wait until you can see it with your significant other on vacation.
• Take 3 copies of every vital document, including 1 copy of your presentation, on paper, on your laptop, and on a jump drive.
• If you wonder if you should get your hair cut before you go, do. Local stylists seem to have some deep-seated hatred of Road Warriors, and see us as potential hair design experiments.
• Never, ever order the pizza from the brochure in your hotel room, even if it's a brand name. Likewise, unless you stay at a 4-star or better hotel, do not touch the shrimp cocktail. Cobb salads anywhere are fine.
• Buy light reading material for the plane and the hotel room. You don't want anything that changes your outlook on life, your emotional state, or makes you stay up late because you have to know what happens next. I suggest crap you'd never normally read, like Entertainment Weekly (my personal favorite).
• Splashing a little tap water from a glass onto your clothes as you iron them in your room will make them crisper. Make sure to let the water run a bit first before filling the glass; rust turns white shirts blotchy manila or gives them burned brown streaks.
• Don't eat anything that's a local specialty, even if you stay at a 4-star or better hotel. Cuisine experiments are for vacations where a day or two spent in the bathroom will not cost you your job.
• Don't buy anything as a gift for the folks at home while traveling. It will either go missing from your suitcase sometimes after baggage check or arrive crushed. Save your money and take them out, instead.
• I know that no one under 35 wears a watch anymore, but wear a watch. Cell Phones die and watches don't at crucial moments.
• If your office tries to give you a roommate, I have an answer that works every time (and, in my case, is true): Tell them up front that you snore like a tornado buggering a freight train, and that you just felt someone should know. I guarantee that you will sleep alone. (PS. Never make up a medical condition as an excuse for wanting a room to yourself. HR knows all, and will immediately report that condition to your manager, who will immediately start thinking about the laws of natural selection - and rightly so, if you lie to your employer.)
• Make friends with the expense report lackey. Not the manager; they're impossible. Apologize immediately for any errors and rush to correct them. Turn in your reports as early as possible. Send a box of chocolate. No one does any of these things, and even one of them will earn your expenses the benefit of the doubt. (This is equally effective with the trade show company's rep if you need a booth at the last minute, or you need extra lights that you can't afford, or you prefer a better location before the show starts (after, you're doomed).
• If you don't have enough lights, take a walk. There is always at least one company that paid to be there and didn't show up. Take their lights. They're paid for and would only go to waste, otherwise. I don't know why no one else seems to think of this, but I've scored extra lights at almost every show I've ever done.
• Real Road Warriors - male and female - know to go light, light, light on perfume and cologne, if they use them at all.
• If your tradeshow persona smiles, your face will be sore after a day on the floor. Soak a towel in hot water, lie down on the bed, and warp your face in the towel for at least an hour. It will fell brand new by morning.
• Tradeshows are a performance. Every moment in the booth is show time. The only people who seem to get this are small companies and anyone from overseas. Reps from big companies spend their time at trade shows on their phones, iPads, or chatting with their buddies. This is why big companies gain nothing from shows, and why small companies - people who are hungry - attend. Guys, it really doesn't matter how big your freakin' booth is or who designed it if you forget that a trade show is a performance for Customers... and that you are not the Customer!

I could go on for days, and probably will in a future post. In the meantime, what are your favorite canons of the Way of the Road Warrior?

Sales Lift

I'm going to tell you a secret that every Sales Manager should know. It works best if your Salespeople are new to sales and/or if you have recently changed your bonus/commission plan, even better of you pay Salespeople their commissions quarterly, biannually, or annually, but it works to some degree with all Salespeople and it can lift your sales revenue by as much as 10% to 15% with almost no effort on your part.

If you are not already paying commissions monthly, start. There are 3 reasons for this, and they're all simple:
1. Salespeople work best when they have immediate, tangible rewards and/or punishments.
2. It encourages them to work harder the next month, rather than to mope for 3 months.
3. You want your Salespeople to get used to the idea that they have extra money at least once a month so that they use this money to buy things on credit. This usually happens within 60 - 90 days of the new plan.

This last reason is the charm. The moment a Salesperson buys something on credit, they now have to at least hit the goal that they did in the month that they incurred the debt just to make the payment on the item. And because they made enough money that month to buy what they consider a 'luxury' item (ie, a big TV, newer car, boat, etc.), that artificial lift in what they have to make is now a monthly must. And if they want to have any fun with their friends, they have to earn even more than that.

You did nothing, and your Salespeople lifted their quota all by themselves. If they are younger, the lift tends to be higher. If it is a new commission plan or you have just moved to monthly payouts, the lift tends to be higher. But even if you have always paid monthly and you have a veteran Sales team, a simple change in commission structure that elevates pay for 30 - 90 days... such as rolling out a new, progressive pay plan that coincides with your busiest season, you'll see some lift. Again, with almost no effort on your part.

Once your Salespeople get used to hitting the higher goals they've set for themselves and are comfortable with it (typically 6 - 12 months), they'll start to realize that they deserve a reward for and a break from working so hard. That takes us to step 2 of Lift: Planning the Big Vacation. This vacation is typically something that will take 'extra' money from several commission checks - 3 to 12, depending upon the destination and the number of luxury goods the Salesperson has purchased. The important thing is, to go on this vacation that they've promised themselves, they no longer have to just hit their new, higher goal... they have to start planning to hit an even higher goal over the long term.

Now your Salespeople start strategically planning how to even out their revenue stream by elevating every month, making the 'slow month(s)' less slow... sometimes even making them even better than what used to be your better months.

Of course, all of this is predicated on having hired Salespeople who are intelligent and not afraid of hard work. As long as you've done that, sales lift happens the moment you apply its driving factors. The best part: No one can get mad at you, because they did it to - and for - themselves. And if you've hired the right people, lift continues to happen when they decide to get married, have a child, have to pay for college for that child, put aside money for retirement, and on and on.

But you absolutely must do the following to make lift work:

• Payouts must be perfect each and every month. The moment a mistake is made on someone's check, their confidence in that money being there collapses, and will never return. They may even begin to sandbag.
• Your pay plan must be so simple that a 4-year-old understands it. Every moment that a Salesperson has to spend figuring out how much money they should be making is a moment that they're not selling. If they can't figure it out, why should they trust it?
• Lift doesn't work if no one knows how much money they've got coming, updated at least weekly (and daily is better). Make it something every Salesperson can see at a glance, no matter where they are, so that they can watch those dollars accumulate toward making that boat payment or paying for that vacation. If they're worrying about where they're at, they're not selling.

Too Many Tools

Have you ever worked for or with a company that gave you too many tools? It's obvious that they mean well, and that they're enthusiastic and creative and want to help you. The trouble is, you no sooner begin to understand one tool before another shows up, and another, and another... reinventing the wheel in an effort to help you succeed.

To keep from being that company, and to help any vendors that you may deal with that already are that company, may I humbly suggest this post as a pass-along?

Here is how to do tools right:

• You have competitors. They have tools. Look at them all.
• Ask your Customers - as many Customers as possible - which tools they actually use, and why. Write this down.
• Create NOTHING - yet. (I know it's hard. You want to make something today - yesterday, if possible. But you know what? Sending 5 tools, one right after another as another brilliant idea hits you is going to get your tools sent to the circular file without even being opened, because your Customer knows another, better version is just weeks away. Always.)
• Remember: People don't want to learn anything new. You can't change that. Don't try - you will only waste all of your money, time, and sanity. People don't want a cam-retractable, variable speed, percussive impact device. People want a hammer. 
• Simple, simple, simple. A tool can do as many as 3 things, provided they are simple things. If you try to make it do more than 3 things, your Customer's faces will melt and they will become brain-devouring zombies. This has been proven by science.
• Put your name on the tool. You want them to remember who made that wonderful hammer that they use every day to kill zombies, don't you? Damn straight.
• Make the tool as durable and as cheaply as possible. Expensive tools either get lost or don't get used. This has also been proven by science. Unseen University did the field work. Really.
• Before you make your tool, go watch people use tools. I know they told you what they use and why, but remember: people lie.
• Think. Think some more. Think again. 9 times out of 10, speed is the enemy of successful execution. You're just going to have to trust me on this one.
• When you are finally sure you have invented a hammer, have not reinvented the wheel, made it to last, made it cheap and, above all, made it useful, create your tool.
• Go home. Sleep. You done good!

Last but not least: If you have to explain how your tool works, it's not a tool. It's an obstacle.

Fear of Flaying

If you want your organization to be a place that you, let alone anyone else, actually want to go to each day, a key component is this:
Ensure that all stress comes from outside, and never from within.

There are plenty of competitors out there who are even now plotting the death of your company. Plotting, and acting on those plots. Why in the world would you actually destroy it for them? If it's going to die, it's going to die, but make them fight for it, dammit! Make your work environment cohesive and supportive, so that everyone mans the ramparts together, instead of complaining about who got more arrows.

Human beings are interesting creatures, with certain behavior patterns built in. One of these is the herding instinct: When you identify a competitor as the enemy (and actually use that word; I dare you), you create a natural tendency for your employees to focus outward and rally together. If you also provide an environment where a single mistake does not have a punishment but a single success has a reward, and where people are allowed to learn by making mistakes (obviously, not the same mistake over and over again, for those of us who are a little puzzled by the idea of not flogging failure), your employees will feel empowered and actually begin to take risks.

Risks are where growth happens.

This is just as true for an organization as it is for a human being. And you know an easy and cost-effective way to mitigate even those mistakes? Assign a mentor - even from another department or division - who is a neutral 3rd party for your employee to chat with, bounce ideas off of, and commiserate with. Encourage them to participate in networking groups so that they can hear how other people in their role have approached issues. Praise them when they get it right, and force them to break down the error when they get it wrong, so that they are better prepared the next time.

If your grass doesn't grow fast enough, do you yell at it? Of course not! You add fertilizer and you water it. Fear of the lightning bolt from on high is how management worked in the 1950's (unless you worked at Apple during Steve Jobs' tenure, ba-dump-bum). It has been proven time and again to produce more waste than headway, and encourages chaos when you aren't around, because your employees can finally breathe.

Don't be that kind of company. Don't be that kind of manager. Or the people plotting your death may be your own.

The Perfect Employee Manual

A brilliant and newly minted HR Manager just gave me the most beautiful employee manual I've ever seen, one so good that I can't not share it. I've also added a couple of things I like to include. If you don't have employee manuals for your new hires (and your old hires), or if you have one that doesn't include the following, print this post right now:

1. A checklist of what the new employee should receive on their first day of employment
2. A list of all of the applications that the new hire needs access to, what they do, and where they are (as much for IT as for your new hire)
3. All of the passwords and logins the new employee needs to know
4. W4
5. I9
6. Explanation of pay plan and time off; whom to call if you'll be late or out
7. Direct deposit form
8. Phone/contact list of all employees (or at least key department leads) and what they do (not just their title)
9. System failure guide: who to contact (and in what order) if phones, key apps, website, email, electricity, internet access, etc,. are down. You need 2 contacts per system.
10. Policy regarding discrimination, sexual harassment, bullying, etc.
11. Smoking policy
12. Policy regarding use of technology
13. Policy regarding use of social media
14. How to get in and out of the building, hours of operation, main phone/fax/web address/key email addresses
15. Nondisclosure and non-compete contracts
16. List of local restaurants, banks, health clubs, and bus stops
17. Training schedule
18. Training booklet(s)

What am I missing?

John Cleese on Creativity

Not an actual post, since today is Sunday, but something you absolutely must watch:

May I Make a Suggestion?

Whether you sell B2C, B2G, or B2B, at some point you will have a Customer who is torn between 2 products or services. By now you have already qualified them (or you should have), so you know that money isn't the issue. You've established your credibility and your organization's superiority. And then the entire sales process comes to a grinding halt because the Customer wants someone to tell them what to do.

An adequate Salesperson will reiterate features & benefits and try to find out if there are hidden objectives, and the Customer will walk without buying. A good Salesperson will go ahead and write up the order, secure in the knowledge that if the Customer isn't moving, it's time to move them. Some Customers, to avoid conflict, will let this happen. (I call it 'the bully approach'.) Unfortunately, they will often call and cancel the order the next day, or return the item if you are in a retail environment.

A great Salesperson will say this:
"May I make a suggestion?"

Who will say no to that? 99.9% of the time, not the Customer. The moment they give their permission, say the following, loud and clear:
"Take them both." Then shut up. Do not speak until the Customer speaks, under penalty of the death of your sale.

If your business is B2G or B2G, about 50% of the time, the answer will be (usually after a significant pause), "Okay." If your business is B2C, the average is closer to 30% (higher if what you sell is a luxury item). And even if they don't say yes to both, saying, "Take them both" forces a decision, and you will make the sale.

Think about that. Just by saying those 2 sentences and then keeping your mouth shut, you will as much as double the revenue of half of your sales. And the remainder will at least buy one of the 2 products or services.

Of course, you can continue to let Customers walk without buying, simply because you're afraid to try something new. What have you got to lose? They were already going to walk. Even if they are the .1% who will say no, you haven't lost a thing.

Like many conversations in Sales, the reason that you clam up after saying, "Take them both" is because the next person to speak loses. Remember, every sentence in the Sales process is a transaction. You have put your proposal on the table; now it's the Customer's turn to respond to it. If you break the cycle by saying something else, you have broken the Sales process. The Customer will immediately use this to avoid the conflict of choosing by running for the hills.

They like you, they like your company, they like what you're selling. If they didn't, they would have left before now. And why wouldn't they like all those things? You have the best products/services, you work for the best company, and you are the best Salesperson. They've done the equivalent of accepting a cup of coffee and putting up their feet, and then you went and handed them their coat.

May I make a suggestion? Stop handing Customers their coats!

Managing Up

Stop me if you've heard this one: "For your organization to be successful, once a decision has been made about another manager's initiative, you must support it - even if you disagree - so that they will support your initiatives. If you can’t do that, you have to leave."

It's hard to respect someone who manages from their knees.

The trouble with going along and not making waves is that it leads to Enron and other organizations that were and are all about doing what pays well in the short term vs. what ensures longevity and what is right. Stealing from Customers - internal or external - is neither. The Customer for Life philosophy dictates that you always do what is right for the Customer, so long as it is within your organization's means. This doesn't necessarily mean doing what the Customer wants. Remember, every good compromise means that both sides get - and give up - a little of what they want.

But how do you deal with the scenario above, where a colleague or perhaps even your boss asks you to do something that you know violates that philosophy, or gets in the way of something else that is more important or more time-sensitive, without violating chain of command?

First, make sure your own bias isn't getting in the way. As much as we'd like to believe that we are independent and objective observers, it just ain't so. If you personally dislike the person who has put forward the new initiative, be aware that human beings have a very difficult time separating the message from the messenger (why do you think messengers hate to carry bad news?). Sit down and make yourself a list of why you object to the initiative, then read it after a good night's sleep. If you can still say you have solid reasons to object to the initiative, and it's not a personal vendetta of some kind, you're ready for the next step.

Welcome to the wonderful world of managing up.

Managing up essentially means managing your manager, and it turns on a very simple assumption: Your boss (or your colleague) is not a moron. If they are, you have bigger problems than the initiative they've put forward, and you really might be better off calling it a day and updating your resume. But if they're not, it's a simple matter of giving them a clear choice, just as you do when making an offer to a Customer.

Here's what to say:
"Just so I understand, are you saying that is more important than ?"

If they say yes:
"Okay. So it's okay to let everything else slide in favor of ?"

This is about when most people's brain starts working. They actually have to think about this question, rather than speak off the top of their head. A lively conversation is likely to ensue. But if they still want to go ahead, at least they're more likely to have assigned the new initiative the priority it actually deserves, rather than the 'anything to put out the fire' priority it may have started with. Plus you now have clear direction on that priority and what may or may not be permitted to slide to address it, which both keeps you from getting in trouble and showcases your skill as a tactical thinker.

Headcount

While many organizations these days talk the 'lean' talk, few walk the lean walk. When considering an increase in headcount, your first question should always be:

Is this task even necessary?

You would be amazed at the number of (mostly legacy) companies that assume that, if a task already exists, then it must serve some vital function. Folks, it just ain't so. Do your due diligence and dig down a bit. If after that you decide that the task that you're considering adding bodies to is necessary, the goal is to add as few bodies as possible can, both so that you're a good corporate steward and also to decrease the likelihood that you'll have to look them in the eye and lay them off 12 months from now.

How do you determine 'right number' of bodies to add, or if you really need to add bodies at all? It's a simple matter of efficiency vs. cost increase. Here's the yardstick that you should use, in order of least expensive to most expensive solution:

1. Improve the process. 
2. Improve the tools. 
3. Increase headcount. 

If you don't do #1, you have to do #2 (which costs more). If you don't do number #1 and #2, you have to do #3 (which costs more). And if you don't do any of them now, right now, it will cost 3 times as much later.

A good place to go for answers about how processes can be improved is the people who already do the job - especially employees who are relatively new, and don't already have tunnel vision. They'd love to tell you all about the things that they know will make their jobs easier.

When discussing headcount (or anything else), beware of anyone who uses the words, "Do what's best for the company."

More often than not, the translation of this phrase is, "Screw the company! Do what will get me my bonus!" It's the corporate-speak version of, "Can I be honest with you?", which is invariably invoked just before someone tells a whopper. It's also a frequent code-phrase for, "How can we cover our asses?"

If you're running your business right, doing "what's best for the company" is exactly that - doing what benefits your Customers and the majority of your employees, both now and long-term. Doing anything else isn't just short-sighted and selfish, it's suicidal - plus you'll take everyone else with you. Retaining knowledge and talent is what's best for the company. Never forget that.

Here's one more headcount tip:

If you plan to hire more than 2 people, hire 1 person less than what you think you'll actually need.

Especially with a new position, or additions to an existing employee level, you'll be amazed how clever people are at making things work better if there aren't quite enough hands to stir the pot.

Perspective: How to Get Some

One of the truisms of any organization is that organizational growth and/or your ascension through the ranks is in inverse proportion to the amount of communication you receive from the bottom. There are 2 main causes for this. Either one is bad; both together are death:

• People below you in the org chart assume that you already know everything.
• People below you in the org chart know that you don't know everything, but they're A) afraid to be the one to tell you, or B) decide that it's not their job to tell you.

To be effective, a manager must know what's happening at every level of the organization.

So how do you get the perspective that you need?

In every organization that I've ever been a part of, Customer Service was and is the repository of (almost) all knowledge. While they may lack the 'Big Picture' view, CS reps live and breathe issues from outside (external Customers) and inside (internal Customers) every single day. They are the first to hear when there is a problem, and the first to know whether or not a proposed solution actually works. Also, because they are in direct communication with both kinds of Customers, they have their fingertips on the heartbeat of your company.

Even if your relationship with the Customer Service Manager is good, it can be a touchy thing to sit with Customer Service. Wouldn't you feel funny if another manager asked to sit with your direct reports for a few days? To avoid that whole thing, we pay thousands of dollars to consultants to sit with people for us and tell us what they say. Then we tell ourselves that we spent all that money because we just don't have time to do it ourselves, or that it's somehow beneath us. The real reason is that we don't want the confrontation that we think will result.

Everyone's job is to hold everyone else accountable for doing the best job they can, and to help them do that in whatever way you can. If you purposely create a culture where everyone sits with everyone else on a regular basis, it stops being scary. And here's the magic word that you will use to make it happen:

Cross-training.

Rolls nicely off the tongue, doesn't it? And it's even true: You really do want to know how things work in that other department, because then you'll also learn what dumb things you unintentionally do that make their lives hell, along with being able to provide fresh eyes for all of their processes. How can it possibly be a bad thing for everyone to understand what everyone else actually does, and what their challenges are? Getting inside our colleagues' skins is right in line with the whole philosophy of Customer for Life!

If I could, whenever I joined a new company, I would hire in as a Customer Service rep for 2 weeks, and not let anyone know that I was anything else. I'd take a notebook and a bunch of pens and write down everything I saw and heard. At the end of the 2 weeks, I'd think about everything good and hard, and then put together a plan of action the following Monday to address the dozens of things Customer Service assumed I already knew, or that they  (or their manager) were too afraid to tell me.

Since you can't do that, you can at least listen in on calls and watch Customer Service in action as yourself. Bring a big box of good chocolate or cookies with you; it's amazing how people loosen up over a little sugar. What is their process? Look for inefficient workarounds (there are always inefficient workarounds, most of them unintentional). Look for how often calls are transferred as opposed to completed on the spot, and ask why. Look at what extra work the Customer Service reps do (all Customer Service reps perform dozens of tasks that have nothing to do with Customer Service). Should they actually own those tasks, or are they the result of an inefficiency in your own department, or someone else's?

Question everything.

This should be a regular part of your routine, especially after any kind of reorg or process change in your own department, and don't stop with Customer Service (although you should certainly start there). The more often you do it, the less scary it is, and the more it becomes a regular part of your culture. Especially if you take the other department's manager out for lunch and speak in private about what each of you saw and heard (she gets to sit with your team, too, right?). One pair of eyes and one brain are good; 4 eyes and 2 brains are better; everyone's eyes, ears, and brains combined are the first steps on the path to Kaizen (or CANI... Constant and Never-Ending Improvement).

Cretins Cap Commissions

If your organization is like most, you have Salespeople (whatever you may actually call them). And, if you are doing your due diligence, your Salespeople have goals to hit. But suppose your Salespeople surpass those goals?

Many organizations make the mistake of capping a Salesperson's (or Sales Manager's) bonus and/or commission once they hit a certain percentage above goal. This is the dumbest idea since the square wheel. Here's why:

No matter how much over goal a Salesperson sells, the company makes revenue that is beyond its goals. Some companies make the excuse that keeping all of this money is a buffer in case other Salespeople fail to hit goal. If you built your sales goals properly, this buffer should have already been factored in.

You're just being greedy.

The worst part is that it encourages your Salespeople to sandbag. There is more possible revenue out there but, since there is no incentive for the Salesperson to bring it in now, they will either 'save it for a rainy day' or let it go to a competitor. Either scenario creates a hole in your market share, and an opening that your competitors are sure to exploit.

Think about this a little deeper, and you'll realize that your Salespeople feel like they're actually being penalized for being terrific at their jobs. How is it their fault that you set their goals too low? If you were them, and you came in ahead of goal, wouldn't you start looking for another company that values your skill and consistency more?

Of course you would.

Capping commissions and bonus at a certain percentage in a tiered compensation plan is fine, as long as the amount of money that the Salesperson (or Sales Manager) can make is uncapped. For example, let's say you have a commission structure where Salespeople make nothing until they hit 85% of goal. From 85% to 90% of goal, let's say they make 1% of net margin (or whatever makes sense for your industry), then 1.5% of net margin for 90% to 95% of goal, 2% for 95% to 100% of goal, and 2.5% of margin for anything above 100% of goal. This is fine. But if you say that a sales rep can only make 110% of their base pay in commission, regardless of how far above goal they are, you are begging them to sandbag (if they're merely competent) or leave (if they're terrific).

You want Salespeople to be hungry, so it makes sense for a substantial portion of their compensation to be commission-based... at least 25%, and probably not more than 50%. (This assumes that your Salespeople spend the bulk of their time selling, and not doing non-sales-related tasks.) You also want to be sure that they sell at least 10 times as much in revenue as they make in compensation (again, depending upon your industry and your margins).

How often do you pay commissions?

If it's less often than monthly, you're missing the boat. Salespeople respond to immediate feedback, positive or negative. If they push hard during a given month, they should be rewarded at the end of that month (or punished, if they did poorly).

You want the reward to come as soon after the action as possible.

I don't mean 2 weeks into the following month; that's ridiculous. If Accounting tells you they can't do it, tell them to go bugger themselves and find a way to get it done. I guarantee that the number of Salespeople who hit goal after you make this happen will dramatically increase. Part of the reason is that, if commissions come at least once a month, Salespeople begin to shift their lifestyles up a notch in anticipation of this reward. In other words, they buy things on credit, and then have to hit those higher goals just to keep up the payments.

This is why you will encourage your Salespeople to buy new cars, boats, nicer houses, big vacations, and so on. The more they spend on themselves, the more they'll begin to feel that they deserve those things and more, and the more they will have to sell to perpetuate that self-image.

And while you're talking to Accounting, remind them that a Salesperson should receive repayment for business expenses no later than the paycheck following the date that they turned in their completed (and accurate, please) expense report. You want your Salespeople to spend every waking moment thinking and talking about selling, not wondering when or if they're going to get paid back for that cab ride they had to take to the airport.

Double Dipping is Dumb

Many organizations break their Sales teams down into 2 functional groups: Business Development (sometimes called Outside Sales) and Account Management (sometimes called Inside Sales). While the names might be misleading (for example, Inside Sales reps might actually travel to see Customers and Outside Sales reps might spend a considerable amount of time on the phone, depending upon the industry and the organization's needs), what we really mean is that one group consists of Hunters and another group consists of Farmers.

Hunters find new Customers. Farmers grow the spend of existing Customers.

Some organizations add a 3rd layer: Sales or Account Administration. Typically, this layer appears when the organization's internal processes have become so dysfunctional that you need a whole other - and cheaper - person to make sure orders are entered, processed, completed, and delivered. If your organization has this layer, usually everyone agrees that it's a necessary evil. "We have these extra people," goes the argument, "because our Sales Reps' time is too valuable for this type of work, plus it would cost too much to improve our processes to make a change."

So you teach your Salespeople that certain tasks - like entering and following through on the orders that they are paid for - are beneath them? That certainly is an interesting culture you're building. Of course, it inevitably leads Salespeople to believe that other tasks might be beneath them, too, like returning Customers' calls, but hey - it's your business, and you can make everyone who actually does those tasks resent the Salespeople who have been taught to dump on them if you really want to.

But let's look at that second excuse a minute, shall we? You don't have enough money to improve your process. Fair enough. It might even be true. But just to be sure, let's kick the tires of that argument. Let's say you have just 3 Sales Admins (3's not too bad, right?), and you pay them $30,000 a year or, by the time you add healthcare and other overhead, let's conservatively say $45,000 each. Per year. For as long as your business exists. Which won't be very long if you keep paying 2 people to do one job.

Get the picture?

If you apply just one year of what those 3 admins cost to process improvement - even if it means investing in a much better CRM, accounting system, or whatever it takes to make that job practical for a single person to do - you have $135,000 to work with. And, after the first year, that savings (plus any cost-of-living adjustments you would have had to add on) goes right to your bottom line.

Friend, you can't afford not to be lean. And you never will.

Now let's look at another example of paying 2 people to do one person's job. Let's say you have Hunters and Farmers. Do you pay your Hunters only for a new Customer's initial purchase, or do they receive some type of residual pay for each order thereafter? If the latter, for how long? If you continue to pay a Hunter after they have handed a Customer over to a Farmer, you're double dipping.

Never double dip.

"Okay," you say. "Fair enough. But let's say a Customer took a long time and a lot of work to land. Plus their initial purchase was small, but later purchases weren't. How do I motivate a Hunter to hunt if we immediately take a Customer away from them?"

The issue isn't comping your Hunter for landing the Customer. The issue is paying them a) when they no longer have any connection with the Customer, and/or b) making it easy for Customers to keep going back to their Hunter, preventing the Hunter from hunting.

The secret to handling this situation properly is as follows:

• Bring in the Farmer on the day the Customer signs with you. Identify them as the Customer's Account Manager. Never for a moment suggest that they are the Hunter's assistant, or allow anyone else to suggest this (especially the Hunter).
• Pay the Hunter for the initial purchase, and for every subsequent purchase for a maximum of one year. (If your margins and/or commission percentages are high enough, you can and should gradually wean this amount down. If not, just cut them off after one year.)
• After one year, only the Farmer gets paid for this Customer's purchases.

This approach keeps your Hunters from being able to live on residuals - every year, they have to completely replenish their Customer base. This will encourage them to help make the transition to their corresponding Farmer as smoothly and as quickly as they possibly can. The quicker and the smoother this happens, the more money both reps make, and neither one feels subservient or entitled.

And, since we're on that topic, anyway, if you are like most organizations, chances are that you pay your Hunters more than your Farmers. Am I right? But if a Farmer retains Customers and grows each one's spend beyond their initial purchase, don't they typically make more money for your organization than your Hunters?

Then why do you pay your Hunters more?

The argument that I hear most often is that landing a Customer is harder than keeping one. This hasn't been true for awhile, and it's time that your culture caught up to reality. Keeping Customers is harder than it's ever been, and it's much harder than taking Customers from a competitor. Landing a Customer is a finite period of time, no matter how long it seems. Plus, if you follow the model above, you get to walk away from any problems after the initial order or two and wine & dine the next Prospect.

Am I saying that you should pay Farmers more than Hunters? No - but only because I don't think you're ready for that yet. But paying them in such a way that they end up making about the same if they hit their respective goals? Yeah. If anything, I think you're overdue for that one.

And if you think this was fun, just wait until we talk about the right way to split a territory.

Are They Ready?

Management is essentially working with and through others to accomplish your organization's goals. A leader's role is to raise employees' aspirations for what they can become, and get them to release their energies to try. By now you know that you can't do everything yourself, and you understand the importance of delegating, as well as when to delegate and whom to delegate to. The next question is, how do you know what approach to use, depending upon the employee's readiness?

To talk about readiness assessment, we first have to talk about what employees need from you in order to feel comfortable enough to take on a task. Before anything else, you must have the following:

• A clear direction. 
• Clear communication. 
• The employee's trust. 

Got those? Good! (If you answered no, you have some serious issues that must be resolved before anything else can move forward. Get to it!)

The next step is to identify your leadership style. Your leadership style is your patterns of behavior as perceived by others. There are basically 2 leadership styles:

• Directing behavior: You define the employee's role and responsibility, explain & clarify what to do, when, and how. In a nutshell, one-way communication, all coming from you. 
• Supporting behavior: You set positive expectations, praise, encourage, and listen. All two-way communication. 

Readiness is essentially ability (knowledge, skill, clear on priorities) + willingness (desire, confidence, incentive). Remember, willingness is often a measure of confidence. Before assigning a task, ask yourself if the employee has:

• Task-specific experience 
• Task-specific training 
• An understanding of the priority of the task 
• Desire 
• Incentive (this is usually the opportunity to shine, or to advance at some point down the road - not money) 

There are four levels of readiness:

• R4 = High Readiness (Ability High and Willingness High) 
• R3 = Moderate to High Readiness (Ability High and Willingness Not High) 
• R2 = Low to Moderate Readiness (Ability Not High and Willingness High) 
• R1 = Low Readiness (Ability Not High and Willingness Not High) 

Each of the four levels requires a different delegation style:

• R1 = Directing (Explain and clarify what, where, when, and how.) 
• R2 = Coaching (Instruct and convince via 2-way discussion. Explain the 'why'.) 
• R3 = Supporting (Support them to reinforce their ideas and confidence.) 
• R4 - Autonomy (Follow up and support as needed/as determined by employee.) 

No matter which readiness level an employee is at, defer to their approach, but define the deliverables. Remember that your way of doing things is not the only way, and not even necessarily the best way. There will be mistakes, but your employer should be allowed to make them and to learn from them.

Last but not least, only ask their input about things that have not already been decided. You wouldn't ask your son or daughter where they would like to go to dinner if you've already made up your mind about it, would you? That would only undermine their confidence in their ability to make decisions, your interest in their input, and their trust in you.

Here's a handy readiness reference chart that you can print for your office or cube wall:

Delegate, Dammit!

If you are like many managers, you have a hard time delegating tasks - at least until you are overwhelmed, at which point you may shed tasks that you should keep. You want to make sure to give your company maximum value, but how do you know which tasks should be delegated, to whom, and when?

Here's a very simple flowchart to help you figure out what should be delegated:

The who part is easy: Delegate the task to whomever has the least to do. 

This may sound self-evident, but how many times have you seen someone else assign a task to the employee who has the most going on? Even today, I bet you've seen at least one example. This is because we have a natural tendency to give tasks to the person who seems the most capable. And if they've already got that much going on and they're handling it well, they must be capable, right?

The trouble with this impulse, though, is that the employee who gets all of the tasks learns everything, while other employees languish, never able to test their wings and gain the experience necessary to become more capable. Meanwhile, the person who gets dumped on lives under constant pressure and stress. You know what happens when one employee feels like they're being passed over and another feels like they're being pissed on?

They both leave. And one of them left to go work for your competitor and took all of that knowledge they acquired with them. Now you're short at least two people, maybe more, and no one knows how to do more than the bare minimum.

Dumb, dumb, dumb. But we still do it all the time.

Yes, delegate to everyone. If you don't think they're capable of doing the work, why did you hire them? Yes, make sure that your expectations are clearly spelled out, as well as the timeline and milestones. Yes, meet regularly to assess progress. Yes, give counsel if asked, but only if asked. You may be surprised, not least by the fact that just because someone does something differently than how you would have done it doesn't make them wrong. In fact, they may find a better way than you do.

The last question is the easiest one of all: Delegate tasks soon as they are identified.

Never touch anything more than once. This includes emails, meeting notes, phone calls, and anything else that involves a task. The first time you touch it, apply the flow chart above, and then either do it yourself or delegate it, on the spot. Your inbox will empty out, you'll help all of your people grow, morale will rise, retention will improve, and your organization will get what it's paying for: Your time, doing the tasks that you alone are paid to do.

Databases for Dummies

Have you ever noticed that database people are fussy? Really, really fussy. (It's okay for me to say this, first because it's true, second because I am one.) It's because we have to be, because literally everyone else in the company constantly tries to mess everything up. Our lives are spent rolling our eyes and fixing problems that cost you a tremendous amount of money and lost man-hours, and that never should have happened in the first place.

If you don't have a database of your Customers and prospects, it's time to create one. If you do have one, it's time to clean it. The first will help you make money; the second will help you save money.

A database, for the purpose of today's topic, is a place to save Customer information. There are 5 main must-do's when creating a database:

• Only have one database, ever.
• Figure out in advance what information you want to save in your database, now and in the future.
• Create clear, meaningful names for each database field, with no redundancy.
• Decide which data fields are mandatory and what constitutes acceptable data for each field.
• Require that everyone use the database, always (especially salespeople).

And there are 2 must not's:

• Never, ever use Excel in place of a real database.
• Never, ever use Act in place of a real database.

The reason that you only want one database is to avoid pocketing and the cost & aggravation of having to merge dozens of databases later (trust me; I used to do this for a living). You have to figure out in advance exactly what information you want your database to include, now and in the future, because of a triusm that applies to a lot of things in business:

Plan carefully now, or regret expensively after.

You always want your database fields to have real-world names, without cryptic acronyms. Otherwise, you are just begging for people to put the wrong info in the wrong fields, means turns your database into worthless crap. Never use the same field more than once. You've already asked for the info; why do you need it twice? Some fields can be optional, like the Customer's birth date, but you should set most so that they have to be filled in. What good is a Customer name without an address, phone number, and email address?

Also, don't allow anyone who uses the database to use abbreviations, or I guarantee that you will have duplicate records. If your Customer's name is 'David', use 'David' and not 'Dave'. If he likes to be called 'Dave', put that in a 'Nickname' or 'Goes By' field. Otherwise, when you buy lead lists or someone else enters him under the other name, you'll have duplicate records. Also, always spell out street names, city names, and country names. (I once had to work with a database where a single city name appeared as 6 different abbreviations, plus spelled out correctly, which meant the company was spending money to send the same mailer to each Customer 7 times. Now imagine if the street names and county names were sometimes abbreviated, too.)

If you already have a database, now you know why you need to get someone to clean it. The sooner the better.

If your organization has salespeople, I'm going to suggest that you create a new rule, if you haven't already: Any sale that takes place before a Customer is entered into the database belongs to the company. No exceptions, period. This will ensure that every Prospect is entered into the database, because there are salespeople who have a bad habit of sandbagging leads, in the mistaken impression that your Customers 'belong' to them.

Customers belong to the company. Period.

Not only will this create a more flexible corporate culture, it will also make things much easier when you have to reassign a Customer to another salesperson or split a territory.

And, while everyone who touches Customers should have access to your database, only Sales, Customer Service, Accounting, and Tech Support should be able to enter or change data. Not only that: any good database should also record who entered or changed that data, and when.

Finally, why not use Excel or Act?

Excel is not a database; it's a spreadsheet (duh). Microsoft puts all kinds of code in each field that you can't see to make it work well as a spreadsheet. Unfortunately, this code makes it difficult to do anything with the data if you try to use it for anything else, and a costly conversion if you have to convert it to a true database format when you eventually move up to SQL or some other real database, and someone has to manually clean out all that gunk (and your pockets, while they're at it; remember the Leaky Roof rule).

Act, while easy to use and great for a self-employed, standalone salesperson, does not share data well across a network - the whole point of having a database.

One Trick Ponies

When was the last time you used a standalone camera? I don't mean your phone or PC or tablet - I mean a camera that only takes pictures. With film. A still image camera.

In 1976, Kodak owned 90% of the film market. It's name was so much a part of our culture that the phrase "Kodak moment" became synonymous with photography. Everyone knew what a "Kodak moment" was. The company was founded in 1889, so they understood how to successfully manage a profitable business. In fact, for decades, Kodak was considered a must-have blue chip stock that no portfolio was complete without. Yet 2007 was the last year that Kodak turned a profit. On 1/19/12, Kodak finally filed for bankruptcy, and no longer makes cameras, digital photo frames, or pocket video cameras.

Lest you think that Kodak didn't try to change with the times, the company actually invented the first digital camera in 1975, and sued to protect its patents. And, even if they had dived into digital cameras full throttle and right from the start, bear in mind that, as I write these words, you can't give digital cameras away.

The real problem wasn't that Kodak changed too slowly. The problem was and is that Kodak is a one-trick pony in a world that demands that gasoline - as "old economy" a product as you can get - serves more than one function (cleaning your engine while powering your vehicle). We live in a time when even toilet paper manufacturers better come up with a few more ideas if they don't want to go down the drain.

The days of the single purpose product are over. Do you really believe that books will still be printed on paper 20 years from now? (Maybe 10.) Cars are another product ripe for a paradigm shift; even the manufacturers ran out of anything new to say decades ago. If it doesn't fly or teleport, a car is essentially a car, and sliding brand loyalties show that Customers know that. (Tupperware, I'm talking to you, too.) Even multipurpose products like Blackberries are falling by the wayside because they aren't multipurpose or intuitive enough.

It's no longer enough to simply buy a smaller, sexier company on the edge of technology to drive your share value. Shareholders understand that it's a ploy, and that you're only going to ignore the acquisition to death while you conduct business in the same old legacy organization way. Even the old mantra "Adopt, adapt, improve," will only keep your doors open for so long.

Spread out to reduce risk caused by downturns in one segment of the economy. That includes spreading out so that you cover more Customer demographics. Don't underfund or overfocus on particular segments, divisions, or departments. And, perhaps most important, don't share revenue.

To be successful, every segment must support itself from day one.

Give each segment the autonomy to make its own decisions and build its own infrastructure. All you should care about is whether or not the segment is profitable. Once you have one or two that are, listen and watch how they do things to see if their way of doing business can be applied to less successful segments. And do your best to make sure that the people who run each segment are new people, not your cronies, and that they come from outside your core industry. (Why in the world would you want to create a line of unsuccessful clones?)

Sooner or later, every market and every product goes away.

Making your products perform multiple functions that increase Customer convenience and that don't require an owners manual because they are instinctive to use as a hammer will increase your company's lifespan, but they won't make you immortal. To do that, you have to keep creating, finding, and funding wildly creative answers to problems that consumers don't even know they have.

And just so you don't think that this concept only applies to the GM's of the world, even if you build funky wooden shelves that you sell at art fairs, how many other out-of-work guys do you think go into that business every year, or women who think they can make jewelry for a living, or couples who think they can make a go of a restaurant? Almost all of these businesses fail. They have no POD's. They are all one trick ponies. But how about some earrings with built-in wireless ear buds or a bluetooth headset, a shelf with a built-in iPad charger/stand you can watch a movie while cooking, or a restaurant that has treadmills instead of chairs?

Take a look at Kickstarter.com to see what John Doe thinks is worth funding. There's a lot of noise, but there are some gems there (not least the whole idea of crowdsourcing venture capitalism). Many of the ideas are already out there.

The secret is not to be first. The secret is to be best.

Paying Your People

One of the more difficult business concepts for most people to understand is compensation. How much do you pay your people, and why? How often do you increase - or decrease - their comp (and why)? Do you offer an annual bonus? If so, is it a gift or an incentive (and why, always why)?

Let's start with the basics. Every pay plan, regardless of employee or department, must do the following:

• Reward production 
• Punish lack of production 
• Cause the extinction of undesirable behavior

People tend to do the things that reward them, avoid whatever punishes them, and stop doing what does neither.

Your job is to figure out what each employee's goals must be in order to reach your organization's goals. Sales is easy, but your accountants must have goals, too, and your IT folks. This requires that you understand each employee's role well enough to know what those goals must be. If they hit each goal, they receive the corresponding pay (everything is a transaction, remember?). If they don't, there must be a clearly defined (and clearly communicated in advance) penalty (your company is punished in a very real way when employees miss goals; to drive success, employees must feel the pain, too). If they surpass a goal, there should be a corresponding - and well-defined - reward.

Any behavior that is neither rewarded nor punished tends to go away on its own, with the exception of sexual harassment, bullying, prejudice, etc., where the behavior itself is the reward. Your other employees have enough to do without worrying about losers who engage in any of this crap. Fire them on the spot, and throw rotten tomatoes at them all the way out the door. Remember to follow through so that you get a nice, solid impact.

As I've mentioned before, performance is not a once-a-year report. You (and your managers) must meet with direct reports at least monthly to assess progress, obstacles, and provide requested resources and support. Performance review is an ongoing responsibility for both you and the employee. If they're doing better than planned, they have a right to expect recognition and a reward. If they are experiencing difficulty, they have a right to expect you to pay attention and mentor them (but not do it for them). In both cases, your attention is required.

The simpler your pay plan - including your pay plan for salespeople - the better. If an employee has to use a calculator or some kind of an outline to figure out how much money they're going to make, you didn't do your job. A 10-year-old should be able to figure out any given employee's paycheck in their head. You want employees to spend their time working, not worrying about how much they're going to make (or when they're going to get it). Because it is usually the most important thing on any given employee's mind, it must always be:

• Transparent 
• Accurate 
• On time 
• Simple

This includes reimbursements for business expenses. And when I say on time, I am a big fan of paying salespeople their commission no less often than once a month. I do it weekly, if I can. I've found that salespeople perform better when they have immediate feedback, whether reward for effort or punishment for lack of effort.

I'm also a firm believer in transparency. That means I have no problem with everyone knowing how much everyone else makes. This topic always starts an argument, but here's my reasoning:

If you are running your organization correctly, everyone knows exactly what milestones must be hit to make a given amount of money, right? Likewise to advance. If your employees know that the criteria is objective, and you're not going to promote someone just because you happen to go to the bar with them from time to time, they will work harder to reach the next level. And anyone who doesn't want anyone to know how much they make is hiding something.

My mom always said that, if you have to sneak, it must be wrong. I agree.

As a side note regarding promotions, it is vital that you be objective. If someone hits all of the necessary goals and does not advance, even though a position is open, they will leave. And you know where they'll go? To your competitor, who runs a business instead of a social club.

Also, never advance someone as an excuse to give them more money. Organizations that do this invariably become top-heavy. This makes your organization less profitable, slower to react to the market, and makes communication and the chain of command a complete mess. Always have as few managers (and employees in general) as you possibly can. Lean is healthy!

Last idea for today: Yes, of course you should know what other employers in your area pay their people for the same job. Don't bother with national tables; they tilt toward both coasts, neither of which may be realistic for your region. While you want your pay for a given job to fall about in the middle of the pack (too low, people leave; too high, people get lazy), there are other factors to consider besides pay. Employees leave managers much more often than they leave jobs. If you provide supportive, growth-oriented management, the right people will work to stay, even if a competitor pays slightly more.

People value being valued.