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June 2010

Helpful Hints about Habits

The weather is finally warmer. The days are longer. January is about a half year behind us (or in front of us, depending on how you look at it.)

Now is a great time to reflect on whether your New Year’s resolutions for 2010 actually have taken hold. 

 Reaching the Mountian Top

Are you exercising more, eating right, taking on more challenging projects at work, learning new skills or doing whatever you thought would be a good idea when the New Year hit?


Whatever your goals are or were, you likely gave some forethought as to how you were going to be successful in your quest. Maybe you picked up a book or talked to someone who had a strategy for achieving that goal. But when it comes down to it, improving ourselves – be it in our personal or professional lives – typically requires establishing new habits.


So what does it take to establish a new habit? Peter Bregman, Harvard Business Review blogger and author of the book “A Short Guide to Leading a Big Change,” contends you need two ingredients if you are to change behavior:


  • Fear – the catalyst that gets you started but it doesn't last
  • Reward – the incentive to sustain long-term change

Dr. Wendy Wood, James B. Duke professor of psychology and neuroscience, states, “Habits are formed when the memory associates specific actions with specific places or moods.”  In this regard, some considerations should be made when trying to form a positive habit:


  • A set time and place the habit is going to be built at/in
  • Avoidance of activities, people and things that make building your habit more challenging (if you regularly eat chips while sitting on the couch, heading for the couch may actually prompt you to reach for the bag)

Finally, many of us – especially those still struggling to make our resolutions for 2010 part of our routines – want to know how long it usually takes for something to become second nature. In 2009, several researchers in the UK completed a study to get insight into this question. Their results revealed the average time to form a new habit is 66 days.  As you would expect, there was a lot of variation in how long habits took to form – anywhere from 18 to 254 days. For example, drinking a daily glass of water becomes automatic very quickly but doing 50 sit-ups before breakfast requires more dedication. Interestingly, the researchers also noted that:


  • Missing a day does not reduce the chance of forming a habit – so don’t sweat it if you do
  • A small sub-group of people appear to be 'habit-resistant' – they may need to work harder
  • Other types of habits not tested may take much longer – depending on complexity and difficulty

So whether you are working to adopt Stephen Covey’s 7 Habits of Highly Effective People, trying to take steps to improve your health or making an effort to enhance yourself in almost any other way, here’s a formula to consider: 

  1. Create a bit of useful fear by thinking about what will happen if you don’t succeed
  2. Set yourself up for success by identifying times and places for working on your goal while also removing items that could detract from it
  3. Take time to notice the positive impact of the changes happening and reward yourself at regular intervals
  4. Be patient and persistent – forming a positive habit takes time

Good luck!

Every local business can be stung by social media

92315426 We often talk about the potential and reach of social media.  And on this blog, over the past couple years, several of us have offered up some examples (here, here and here for starters) of how businesses large and small can use social media to their advantage.

But I think sometimes business owners miss the bigger picture:  Even if you aren't going to actively use social media as a marketing tool -- it is still something you need to monitor. 

Because it can sting you in the rear end.

Here are two examples from right here in Des Moines.  I'm not choosing sides in either case.  But I want you to see how a business, when it gets on the wrong side of a customer who is even a little bit web savvy, is at risk.

Legends Restaurant:  During a teaching in service day being held downtown, a group of  8 teachers went to the Legends on Court Avenue during their lunch break. One of the teachers found a hair in her salad and told her server.  That didn't go well, so she asked for the manager.  That went even worse.

The manager/owner of the restaurant ended up in a shouting match with the teachers, who promptly left. 

Before social media...that would have been the end of the story. 

But one of the teachers described the experience in an e-mail and shared it with all of her friends.  Who then shared it with their friends.  And so on.  Pretty soon it was being written about in the Des Moines Register, on blogs (see this part one and two of this blog's coverage) and ended up on the evening news.  You can view the TV coverage by clicking here.

Why does all of this matter?  Google Legends Restaurant Des Moines and you will see 2 references to this situation on the very first page of Google results.  Social media can sting...and it sticks.

Donut King:  Just a few weeks ago, a man walked into Donut King to purchase some donuts and when he offered his credit card to pay, he was told they needed to pay with cash.  He went to an ATM to get some cash and when he came back, he tried to explain to the store owner how he might be able to accept debit and credit cards without paying high fees.

At that point, the owner told him he didn't give a "*$#@&" and he should get the "*^%#&" out.

Before social media...that would have been the end of the story. 

The man went back to his car and grabbed his iPod nano, which he used as an impromptu video camera.  He went back into the store to ask for an apology.  Instead, on camera, he just got more profanity.

It's 2010....so the angry customer simply posted the video to YouTube (view it here...but remember the profanity) and then e-mailed a link to all his friends.  And now the debate rages on and more and more people are sharing the story and the links.

Whether it will spiral to the level that the Legends story did is anyone's guess.

Whether either of these businesses did something wrong or not isn't really the issue.  The issue is -- businesses need to monitor the web for mentions of their company and executives.  And if they find themselves the subject of a social media story -- this blog post outlines how they should respond.

If you want some hints on how to monitor for mentions of your organization, check out this post from HubSpot.  Best of all, their recommendations are all free and will only take a few minutes a day.

~ Drew 



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Hiring Your First B2B Sales Person

Cart Before the HorseThe question comes up all the time: "What should I look for when hiring my first (or my next) sales person?"

The next question is usually, "How should I compensate that person?"  (Entire books have been written on these two questions.)

However, before getting to those questions, a business owner must first answer this question.

"Why would a successful sales person want to come sell for my company?"

More specifically, answer these questions:

  • Am I a good leader?  Is my company run well and do I inspire confidence?
  • Are our products and services extremely competitive?
  • Does the company have a strong brand in the market? Do we stand out for anything?
  • Does our marketing generate leads?
  • Do we have a system for lead nurturing? Does it work?
  • Do we provide great customer service after the sale?

This gets at the heart of the issue. If you have solid marketing and a well run operation, a strong sales person can seriously accelerate your business development. A good sales person will jump at the opportunity.

On the other hand, if you are looking for a sales person to compensate for the lack of solid marketing or a poorly run operation, then you are potentially creating a sales person turnover problem. You will go through several who will cost time, money and brand strength.

Before asking who, how, or how much, ask yourself why!

Photo on flickr by emilio labrador
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We are from the government; We are here to help [your business]?

Seal of the United States Department of Agricu...Image via Wikipedia

Federal, state and city government agencies are crucial partners to many businesses. Regulation ranges from determining import tariffs on goods and the tonnage a truck can carry, to proper workplace safety procedures to sanitation requirements for combs and brushes.  Government agencies’ rules and regulations define, clarify and sometimes muddy the water swum in by the big and small business fish.


Federal and State agencies are created by the legislature, often to oversee specific realms of commerce or interactions in business. These agencies can be given the power to create rules and regulations that carry the force of law, and can take action to enforce their rules against businesses or individuals.


Who makes the law affecting your business? The Department of Health and Human Services, Department of Agriculture and the Environmental Protection Agency are just a few prolific rule-makers, and compliance considerations can be especially daunting considering that the rules are enforced by the Department of Justice which includes the FBI, DEA, INS and US Marshall Service.


For example, the FDA recently sent a warning letter to a Canadian company stating their website is marketing products that are intended to treat or mitigate symptoms of the H1N1 flu virus, but the company has not yet received FDA approval for sale in the U.S. While this may seem a bit far from home, the small mom-and-pop holistic medicine shop across the street may be subject to the same FDA regulations as Bayer and Pfizer. The difference is in the ability to afford a legal defense and penalties for rule violations.


In Iowa, the EPA’s recent decision to tighten air pollution levels may force some Muscatine County businesses to invest large amounts into controlling pollution from existing factories to comply with the new air quality standards.

Also, the family farmer must comply with wide ranging regulations from the Iowa Department of Natural Resources to the multiple aspects of the Department of Agriculture. Iowa farmers may find they are soon involved with the EPA in the same way that the EPA is currently involved with Amish and Mennonite dairy farmers in Lancaster County, Pennsylvania to stop manure run off from fields and pastures.


The examples that get the most press involve large companies, and the state or federal court system may be called upon when agency rules are violated or decisions are appealed. For example, the Supreme Court recently decided the case Monsanto v. Geertson Seed Farms, about the USDA decision to allow sales of a genetically engineered alfalfa seed before completing an Environmental Impact Statement. Environmental groups and conventional alfalfa growers brought suit to stop the sale of the seed until an EIS was completed. A district court entered an injunction banning the sale of the genetically engineered seed pending the completion of the EIS and Monsanto appealed. Ruling for Monsanto, the Supreme Court overturned the lower court’s ban on the sale of genetically engineered alfalfa seed so that limited sales could occur until the final impact statement was completed.


The same rules that govern large corporations apply to Joe and Jane Business-owners. Savvy business people keep their ear to the ground and sometimes even have a compliance officer on staff. You may be able to give input on proposed regulations before they take effect, or change your business ways before a regulation is enforced. Often, administrative regulations take years to develop and agencies may allow input from those potentially affected by proposed regulations. Even after a regulation is passed, there may be a certain amount of time given for your business to become compliant with the new rule/regulation. Keep up-to-date on your industry’s news and developments. You just may be able to defer agency action or spread out the costs of compliance over a couple years, instead of a couple months.


Quick Rules for dealing with Agencies:

-    If you are too small to have a compliance officer, have one person whose job is to review and stay in compliance.

-    Have a yearly review of compliance for each agency that regulates you. During that review, make sure you have up-to-date manuals and checklists.

-    Subscribe to newsletters or email from each of those agencies.

-    Get to know your agencies and officers. Most agencies prefer initial compliance over initiating penalties.

Learn which agencies affect you. In Iowa, the list may include:

-    Department of Natural Resources

-    Department of Public Health

-    Department of Public Safety (including Fire Marshall)

-    Workforce Development

-    Department of Revenue


As you are developing, look to their websites and reference materials for tips on compliance and maintaining good status. Otherwise, you may have to deal with the government when they show up at your door to “help”.


- Christine Branstad


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Where you stand depends on where you sit

Civil Rights March on Washington, D.C. closeup...Image via Wikipedia

In Congress, the Democrats sit on one side and the Republicans sit on the other. Is it any wonder that the parties don't get along? Or that they lack the resolve and unity of purpose to find common solutions to our nation's huge problems?

Without a doubt, as Joe Reeder, a Washington lawyer and former assistant secretary of the Army, describes in his article, Break Up the Parties, "this segmented seating arrangement shelters our representatives from opposing points of view, reduces the need for common courtesy, reinforces the worst tendencies of a two-party system, and undermines efforts at cooperation."

Being physically and emotionally separated by party intensifies the partisan rancor that's innately alive.

What if, instead of being seated by party, representatives were seated alphabetically? You know, like you and I were seated in grade school. So the first half of fifth grade, I got to sit between Betty Oman and Bobbie Richards and the second half, Sarah Peters and Tony Quinlin. Is it any wonder that I still remember what all four brought for their lunches and if they had cats or dogs as pets. I got to know them. Intimately. And how they thought about things and what they dreamed about. And I learned how to get along with them, sitting two feet from them for eight hours a day, for four or five months at a stretch.

Is it just me, or is this a no-brainer? Mix up the members of Congress! If not alphabetically, then by birth date, or state, or by drawing names out of a hat.

But not by party.

Having assigned seating in grade school obviously doesn't eliminate all the squabbling, but letting kids sit only with kids they like certainly would not allow for learning civility, respect for differences, collaboration and compromise.

We know that without communication, trust and mutual respect, relationships won't be very strong. And without strong relationships, there won't be a spirit of unity toward a common purpose. And without a strong sense of unity, you won't have a strong team, organization, community or country. What if something as simple as a neutral seating chart for Congress eventually led to civility and bipartisan action?

One-on-one relationships are the key. Whether in grade school, corporate America or Congress. As Joan Baez said, "The easiest kind of relationship for me is with ten thousand people. The hardest is with one."

One person relating with another, like Betty Oman and Bobbie Richards. And Bruce Braley and Steve King.

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Would you want your child to see it?

2076134817_184a143fb4Creating a company culture that drives performance, gives employees support and creates opportunities for personal growth is not easy. 

The best advice may well be the single, simplest and most focused statement ever made that can guide the development of a company's culture:  "Would you want your child to see it?"

What type of company would your child see if they walked into your company? Would you be proud or ashamed?

Maybe we could all use a bit of a child's perspective in dealing with work. Click on the link; it is worth the short read!

Flickr photo by mario bellavite

TheTaxman is on the Way

Looking south from Top of the Rock, New York CityImage via Wikipedia

Selling your Business in 2010 vs. 2011

If you are a business owner contemplating the sale of your business, you should consider the proposed tax rate hikes beginning in 2011.  Owners should immediately consult a tax advisers about the significant adverse impact that the proposed tax rates will have on after tax sale proceeds.

The Bush-era tax cuts are scheduled to expire at the end of this year will cause long-term capital gain rates on higher income taxpayers to rise from 15 percent to 20 percent for years after 2010. In addition, the U.S. House of Representatives has proposed a surtax of 5.4 percent on the income of high income taxpayers. Assuming the 15 p[ercent rate is not extended and the 5.4 percent surtax is enacted, the combined Federal tax rate on capital gains will rise from 15 percent to 25.4 percent - an increase of 69.33 percent.

Business sellers need to know about the proposed changes in tax legislation. Most will be stunned to see the calculation the tax increase will have on their sale price. Planning for this proposed tax change is likely to cause more businesses owners to strongly consider selling their business so the sale can be closed in 2010.

The higher tax rate is not the only factor you should consider when to sell your business, but it is an important one. Owners who make the decision to sell in 2010 need to start the process sooner rather than later in order to increase the possibility of closing in 2010.

As always, with a sound exit strategy in place, the business owner can minimize their tax burden at closing. Unfortunately, most business owners have not taken the steps to form their exit strategy team and therefore are unprepared for selling their business.

I have never had a buyer offer a lower price due to the owner's tax burden at closing. The structure of the deal yes, but not the price.

-Steve Sink
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Don't Avoid the Divorce Discussion

open-to-partnership-lrgImage by cquarles via Flickr

The dreaded "D" word.  Divorce.  As a very happily-married person, it strikes fear in my heart. 

Business however is an entirely different matter.  If you are going to be or already are in a business partnership, you will at some point get divorced from your partner.  It is not an option, just a matter of time.  The good news is you can plan the divorce in advance and eliminate the vast majority of the issues and pain. 

A pre-negotiated partnership divorce can take many forms.  Depending on your type of business entity, the dissolution can be a buy/sell agreement, a partnership agreement, or one of several other forms.  The key is to document your choices before the business gets going.  There are two reasons to do this. The first is obvious, to settle how the company will proceed or not proceed should one partner leave, and what responsibilities the remaining partner may have.  This is key not only to the partners, but their spouses, significant others and families. 

The second reason is less obvious but even more important.  Many new business partners don't deal with this issue for a variety of reasons: money, time, impatience, business enthusiasm, avoidance, et cetera.

But if you can't have the discussion with your partner now while the company is still new, I will argue two things. You should consider yourself unfit to run a successful business and you should not enter into any partnership.  If you can't have hard discussions, you will not succeed in business.  You avoid potential issues, and they will take control of you and your business over time.  If you can't have the hard discussion with your new or soon-to-be business partner, how will you work together when times are tough?  How do you know how your partner will react under stress?

Don't kid yourself, you will decide.  Even it you don't decide, you have already made the decision for pain and suffering. 


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From Point A to Point B

Project-management-mind-map
 We're here. We need to get there. But how?

(Well, that's project management summed up in under 10 words. But I'm sure you probably want a little more than that, right?)

I found a great post by friend and colleague, Josh Nankivel on the powers of using mind mapping as a project management tool.

In short, a mind map is an amazingly effective brainstorming tool which allows you to keep your thoughts organized in a series of hubs and spokes as you continue to build out.  It's not as linear as "traditional brainstorming" and quite frankly, that's a good thing.

This weekend, I will be leading a workshop with a group of high schoolers attending an entrepreneur camp.  I'm the "kick off" speaker, and I get to shape their tender little minds for 3 whole hours, talking about the importance of creativity.  I'm going to approach this workshop with all of the energy and ADD that this "old guy" (which, in the eyes of the average high schooler, I am) can muster.  One of the tools they will learn is mind mapping.

After reading Josh's post and watching the video, you may be curious where this tool (and creativity in general) have a role in project management.  The answer?  ALL OVER THE PLACE (i.e., from initiation through closure).  Let's review some ways this tool may come in handy:

  • Initiation: problem development and solution generation
  • Planning: identifying tasks and brainstorming for possible risks
  • Execution: issue tracking and resolution
  • Closure: lessons learned

If you're in project management, creativity is a survival skill.  You will be called upon to be creative at the drop of a hat. If you are not naturally creative, you'd better surround yourself with people who are... and you'd better develop the skill yourself.

While project plans and schedules tend to be somewhat linear, the projects themselves rarely are.

Carpe Factum!

Managing to the Rule and Not the Exceptions

Customer serviceImage by Torley via Flickr

Any business that wants to deliver a consistent customer service experience must, at some point, define how they want to approach customers and then train their associates to deliver to that expectation. Satisfying the greatest number of customers means managing to the general rule of what your customers desire and expect when they walk into or call your establishment.

One of the most frustrating realities of customer service is that there are exceptions for every rule. For every eight people who appreciate you making sure you've answered all their questions before hanging up, there are always two who irritably growl (or think) "NO! If I needed anything else I'd TELL YOU!"

If you manage your service delivery to please the two, you're not going to satisfy the eight. While it's a lovely thought that we can please all the people all the time, it's simply not possible. Winning the customer satisfaction race is largely about having good intelligence about your customers (I mean all of your customers, not just the ones who like to play the follow-up survey sweepstakes). Not only do you need to understand the dimensions of service for which the the majority of customers will reward you, but you also need to understand the dimensions of service for which customers will penalize you.

Armed with this information, you go about building your service delivery system to satisfy the greatest number of customers knowing that there will always be exceptional customers to the rules you've set up.

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Your retirement plan as your venture capitalist?

An assortment of United States coins, includin...Image via Wikipedia

Like many professionals, a Minnesota lawyer had a little business on the side; a 57 percent interest in a corporation that owned a bowling alley. He had a self-directed profit sharing plan at his law firm. He needed some financing in the bowling business, so he directed his plan to make a loan to the bowling alley.

That went badly. The IRS assessed "prohbited transaction" penalties on the plan for making the loans.  These penalties, which start at 5 percent and can go as high as 100 percent, apply when a plan "fiduciary" makes engages in a "prohibited transaction" with "disqualified person."

The IRS said that his ability to control plan investments made him a fiduciary, and that his 57 percent ownership made him a disqualified person. 

Things went to court, and both the Tax Court and the 8th Circuit Court of Appeals sided with the IRS.  

This doesn't mean that one can never use qualified plan investments to finance a closely held business.  It does mean that if you want to do so, you need to be extremely cautious. Such investments can have baleful results; everything from punitive prohibited transaction taxes to income taxes within an otherwise tax-exempt retirement plan to plan disqualification and severe income taxes on the plan balance. 

The qualified plan rules are very tricky, which is why the tax court didn't hit the bowling, er, kingpin with additional penalties.  The court noted that the lawyer/bowler hired another

...lawyer with extensive experience in the area of retirement plans. He was fully aware of all of the relevant facts. He researched the issue and advised petitioner that he believed the loans would not violate any of the provisions of ERISA or cause any tax liability under section 4975. The ERISA provisions involved are highly complex, and the fact that his conclusion was erroneous does not mean that petitioner's reliance was not reasonable.

If an experienced ERISA lawyer can make a mistake, you can too.  

Worse, the IRS is very skeptical of taxpayers who use retirement plan funds in their businesses.  "Abusive" retirement plan arrangements are among the IRS's "dirty dozen" tax abuse schemes.

Even if you negotiate the retirement plan rules and safely tap plan funds for your business, you still should ask yourself whether it's really a good idea. Usually you are only tempted to tap these funds because there aren't other savings to tap.

It's not always a great idea to put the last of your savings into the always-risky world of small business. 

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Want to help a charity get a marketing makeover worth $100K?

98460468 One of the best things about living in Des Moines is the spirit of giving that thrives in our community.  Maybe it's a Midwest thing...but we truly do believe that neighbors should help their neighbors. 

Need proof?  Look no further than all of the amazing non-profits that serve those who need a helping hand.   Whether they help sick children, people who are physically disabled, the poor or those who are discriminated against -- these charities have one thing in common.

They need to tell the world about their work and invite people to join them in their efforts.

But of course, most charities are understaffed, spend very little money on administrative things like marketing and are typically communicating in a very "homemade" fashion.  

That's where you can help.

For the past several years, McLellan Marketing Group has been adopting a charity for an entire year.  With the help of some very special business partners (see the list below) we are able to wrap our marketing arms around one charity for the year -- giving them over $100,000 in marketing services and tools.

We couldn't have created this program without our partners.  Thanks to their generosity, the selected charity will receive:

  • branding and marketing expertise
  • a marketing plan
  • marketing counsel
  • communication materials (brochures, funds appeal pieces, etc.)
  • board development guidance
  • a fundraising plan
  • original photography
  • a website (or revamping of their current site)
  • video production (a video or TV spot)
  • audio production (radio spots or audio for another project),
  • social media tools/coaching

Here's how you can help -- please spread the word.  We don't want a worthy charity not to be considered because they didn't know to apply.  The application can be downloaded by clicking here.

But tell them to hurry -- applications are due by June 30th!

Who is helping make this happen?  Meet the Adopt a Charity Team for 2010/2011.

McLellan Marketing Group
Radio Garage
TPG Companies
That Video Guy
Bill Nellans Photography/East Court Atelier

Do you think you have something to add to the team?  We'd happily consider other partners who can make this year's marketing makeover an even bigger success for the chosen charity!  Shoot me an e-mail if you would like to help.

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Industry Leaders

Every industry has its leaders, the handful of top organizations known for their innovative advancements, comprehensive community involvement and extensive legislative activity. Their pragmatic CEOs are known for eloquently delivering “the next great idea” to rooms full of people eager to advance their careers.

 

86532209 It’s the countless professionals focused on advancing medicine who landed Iowa a ranking among the nation’s best states for delivering quality health care. The Commonwealth Fund, a New York-based private foundation that studies health issues, gave Iowa health-care providers straight A’s in their report. States were ranked on 32 measures of cost, insurance coverage and medical quality.

 

Health care has been in the spotlight. The new health care reform law calls for massive efforts to modernize health care, including everything from electronic health records to improved models of patients care. Iowa is uniquely positioned to take the first steps in these areas by piloting various health-care reform initiatives.

 

It wasn’t easy to get us here. But fortunately, it’s been a great learning experience, and some of the same steps used to improve medical services can be implemented in organizations aiming to lead their industry.

-   Collaborate – hospitals and health systems, employers, insurance providers and patients worked together to explore new ways to improve care. For example, at Iowa Health System, our health literacy team received national recognition from the Agency for Healthcare Research and Quality AEQ for their efforts to make it easier for people to communicate with their health-care teams.

-   Implement Lean initiativesIt’s been said that a hospital is one of the most complex systems ever created. Iowa’s medical providers, like many Iowa businesses and government agencies, are implementing Lean [link to: http://www.ihconline.org/toolkits/leaninhealthcare.cfm] activities to remove waste and streamline processes. In health care, that means reduced wait times, decreased hospital-acquired infections and fewer frustrations for patients and families.

-   Research best practices – Medical teams learn from one another, analyze data and then implement their findings to standardize patient care. Consider what others are doing in your industry and how their methods can be transferred to your business.

-   Set measurable goals – health-care experts didn’t just say “we want to help more people stay healthy” but instead focused their efforts. The 5 Million Lives Campaign’s bold objective: Protect patients from 5 million incidents of medical harm during two years (2006 – 2008). They challenged American hospitals to adopt 12 changes in care that save lives and reduce patient injuries, and Iowa’s hospitals heeded the call.

 

We’re poised to help the nation improve medical services, to lead the dramatic reform required to provide quality care to patients throughout our nation. It’s not always easy at the top, but it’s important to be here.

Sales Management: Coaching the Winning Sales Paradigm

Top sales performers, whether they are business owners or sales reps, see things differently than average or mediocre performers. In other words, they have a Winning Sales Paradigm. That Winning Sales Paradigm produces fruit such as energy, confidence, tenacity and comfort with prospects and customers.

There is a pretty common belief among business owners and sales managers that these and other characteristics of successful sales people are innate. A person has them or they don't. Find people who display that "natural" sales ability, give them product training and some sales training and they will be successful... right?

If this were true, the majority of people responsible for business development and sales would succeed. Of course, this is far from reality.

The reason is that context matters.

For example, professional athletes are known to be energetic, confident, tenacious people. However, a successful athlete can get traded to a different team and become an average performer. Conversely, an average performer can get traded to a different team and become an all-star.

Management is different. Peers are different. Organizational systems are different. Customers are different.  Expectations are different. "Fit" is different. Even the personal reasons for playing may change for that athlete.

Context matters!

For a sales person to develop and maintain a Winning Sales Paradigm, they must believe certain things in context such as:

  1. The strength and integrity of their company's leadership and management.
  2. The value and quality of the product and/or service they represent.
  3. The value/price ratio. In other words, they believe they are selling fair value for a fair price.
  4. Their personal ability and opportunity to make a difference for their customers and their company.
  5. The company sales system and supporting systems.
  6. Their managers' commitment to their success.
  7. The strength of their industry (i.e. that there is enough business to go around)
  8. Their own sales philosophy.
  9. In the case of commissioned sales, their reasons for taking a high-risk, high-reward job.

Unfortunately, when a sales person is not achieving the desired results, management response is often to:

  • First, ask a few probing questions to which they are unlikely to uncover real issues.
  • Second, probing questions are followed by ineffective pep talks.
  • Third, micromanage the activity of the sales person.
  • Next, threaten termination if performance does not improve.
Of course, if paradigm is the issue, none of these tactics help to change that.

Football coach Coaching the Winning Sales Paradigm

The best business owners and sales managers don't just set goals for their sales people and periodically review the sales numbers. Among other things, they are always looking to enhance the Winning Sales Paradigm of their sales people.  Specifically, they will do things such as ...

  • ask their sales people individually what they believe about the strength of the industry and they will share what they believe
  • do the same regarding the quality of their products and services and those of their competitors
  • talk to their sales people about their sales philosophy
  • share independent information, books, articles and more that will strengthen each person's Sales Paradigm

Like any good coach, the sales manager or business owner will work to create a context that supports a Winning Sales Paradigm for each individual on the team. The fruit of this will be a team of sales people that displays "natural" sales characteristics as they go on to achieve greater and greater results.

What has been your experience with the Winning or Losing Sales Paradigm of those around you?

Photo on flickr by Lisa's visions
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Arbitration: Decision by the Village Elder

Myth (Sphinx)Image by tricky ™ via Flickr

My last post was about mediation. Mediation is often confused with its less attractive cousin, arbitration. Arbitration and mediation are NOT the same even though they are both considered forms of alternative dispute resolution (ADR).  Many myths surround arbitration.

Benefit 1: Arbitration may take less preparation because you do not need to plan for a jury trial. Arbitration eliminates jury studies and preparing for mixed experiences of juries. Preparation is still extensive. (Then again, solid attorneys are fully prepared before entering mediation.)

Myth 1: You can “wing” arbitration. Arbitration requires knowledge of the facts and the law of your case. Arbitration requires a different type of preparation than trials because (if done properly) the case will be decided by an expert in the subject matter. Think of it this way: As an architect, you can explain your building design by educating a layperson about the general principles and then the specifics. Explaining the same design to another architect can be done more quickly and artfully, however it will require detailed preparation to be persuasive to another expert.

Benefit 2: Arbitration may eliminate much of the waiting time. Some of my cases took longer to reach trial than a good cheese takes to age.  Arbitration may eliminate much of the waiting time.

Myth 2: Arbitration is often instant. ‘nuff said.

Benefit 3: Arbitration allows the parties to narrow the issues and get to the point.

 Myth 3: Arbitration is as casual as Friday. Arbitration comes in as many styles as clothing. The parties may agree that the arbitrator has great discretion and may base the decision on “anything” or the parties may have four pages of rules, and require the arbitrator to set out findings of fact and legal reasoning. The parties may waive appeal or may set out specific appeal procedures. The parties may also waive evidentiary rules or even add new ones.

Benefit 4: Arbitration often gives you final resolution.

Myth 4: I can appeal an arbitration award against me and have it reversed. Generally, an award is final and binding and can only be reversed or vacated by courts in very limited circumstances, See I.C.A. § 679A.12.

Benefit 5: Arbitration may be flexible.

Myth 5: Arbitration is either mandatory or discretionary. Look at your contract. If you have agreed to a specific form of arbitration, you may be stuck with that form. If not, you may have some leeway to determine certain aspects the arbitration.

Benefit 6: Arbitration may be used to decide only one or two issues instead of an entire case. For example, the parties want one expert (instead of a jury) to determine who is responsible for a building collapse. The parties then want a jury to determine damages.

Myth 6: You have to decide in advance if you want mediation or arbitration. The parties may decide prior to mediation that, if they don’t agree, they want to put the decision in the hands of the mediator (med-arb). If the mediator agrees, that decision may be made mid-process.

Benefit 7: Arbitration may allow you to get a real expert in the area. There are attorneys who only arbitrate construction cases or who only arbitrate specific business claims.

Myth 7: The arbitrator must be a lawyer. Although I often believe an attorney is the best arbitrator, there are times when a chemist, engineer or fire expert may be better suited to interpret technical information. In those cases, the expert may serve as the sole arbitrator or may work with a lawyer to decide the case.

Benefit 8: Arbitration may provide the parties with some limits. The parties can do anything from agreeing to a floor and ceiling on the award (high-low arbitration) to providing the arbitrator with only two options (pendulum arbitration).

Myth 8: You can gain or lose as much in an arbitration as a trial.

Benefit 9: Arbitration is a cost savings.

Myth 9: Arbitration is cheap. See Myth 1.

Benefit 10: You may negotiate confidentiality into the process and the final decision. Court cases are usually open records and proceedings are public. Arbitration usually allows the parties to agree to maintain confidential proceedings and/or outcomes.

Arbitration clauses are also increasingly being thrown into the fine-print of many consumer contracts (read one of your credit card agreements), website click-through agreements (see previous blog about reading what you sign/agree to), and sealed user manuals that come with products (pretty hard to meaningfully agree to arbitration if you have to purchase a product in order to read the agreement).

Searching for the right arbitrator can be similar to searching for a mediator. Ask trusted advisers, research credentials. If you use an organization to find an Arbitrator, make sure the rules fit your case.

Christine Branstad

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Lighten Up or Tighten Up

329 BalloonsImage by mortimer? via Flickr

We gotta be productive. That's a given. But how we show up - the state of mind we're in, in order to be productive and the approach we assume - well, that is different for different people.

For example, in the March 2010 issue of Inc., several entrepreneurial leaders shared their productivity secrets. Seth Priebatsch, CEO of SCVNGR, a Boston-based start-up that helps organizations engage people through location-based smartphone games, admits his approach is "Expand my day!" In addition to fully-packed workdays, he comes into the office on weekends, meets with people late at night or early in the morning, reads technical manuals and watches video tutorials late at night - even the last half-hour before sleep. And that works for him. He's very productive. And happy.

So is Krissi Barr, founder of Barr Corporate Success, a business consulting firm in Cincinnati. She said, "If I think something is going to take me an hour, I give myself 40 minutes. By shrinking your mental deadlines, you work faster and with greater focus." That's what I call "tightening up" - pushing harder - with a focused drive. And that works for her. She's productive and happy with her approach.

Question #1. Does that sound like the mode you take on when you need to be productive?

That heads-down, hunkering-hard approach doesn't mesh with other entrepreneurs' styles, however.

Like Scott Lang, CEO of Silver Spring Networks, a California-based developer of smart energy grids. For him, being productive is "being agile." He leaves large blocks of time - up to 50 percent - open in his calendar every day. That wiggle room allows him to be light on his feet, reacting in the moment to opportunities that he may otherwise miss, he thinks, if his calendar was packed too tightly.

Or Jason Fried, co-founder of 37signals, a Chicago-based software firm, and author of Rework. He thinks of himself as "wildly ambitious and unapologetically lazy." He thinks laziness is the best return on investmetn out there. The opposite of driven, his focus is today. In the now. He, along with his team of 15 colleagues who have millions of users - and millions in profits - don't spend time worrying about what could, might, or may happen. They spend their time on what matters now.

Question #2. Do Scott's and Jason's styles sound more like the mode you settle into when you want to be productive?

Both styles - lightening up and tightening up - work. And there are lots of variations in-between. The secret is figuring out your own approach and then refining it every day.

Now, back to work.

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A Culture of Job Security

3178082504_f5d3d68d8c The biggest hurdle in engaging employees is creating a culture where they feel their jobs are secure. Secure in the context that there are no guarantees in life and there are situations that are out of the company's control.

At some point in any organization's life cycle, there will be times when the path ahead holds much trepidation. During these times of trepidation, employees are very aware that something is amiss. The longer the situation goes unanswered, the quicker employee engagement wastes away.

Organizations and leaders who understand that job security is a bed rock for engaged employees immediately address these periods of stress. Leaders go out of the way to be accessible, strategies are created with the help of employees and questions are encouraged. The organization rallies to defend the job security of its employees as best it can.

The fierce protection of jobs gives employees confidence that everything that can be done is being done (in the context that was mentioned earlier). Organizations that understand this will survive these tumultuous times and in many cases thrive.  It is never to late to start working on a culture of job security.

Flickr photo by capnmikesphotos

Scams in the sale of your business

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Scams in the sale of a business is not unusual. 

We have all heard stories about missing inventory, unreported cash and assets that do not work.  But using a stock sale to drain the assets is not your typical scam. 

Here's how that scam works:  An individual contacts a business owner offering to buy the business.  They get some initial information and agree to a price.  The next step is to eliminate communication with third parties by convincing the seller that they will be a hurdle to getting the deal done.  These crooks then offer a to pay the sale price over a short six to 10 month buy-out period with possibly 10 percent down and as a stock sale.  

All sellers and their CPAs love this part for tax reasons. 

With 100 percent of the stock held by the seller as collateral, and of course the sale includes accounts receivable, cash, accounts payable, et cetera - the entire balance sheet. After that, they give the seller his initial down payment (sometimes from the A/R or existing credit line) and take control of the company while the seller is around.  They factor the A/R's, clean out the cash, run the credit cards up to the max and do not remit any payables or liabilities. Then they disappear within a month.  And guess has to pay?

Think no one would fall for this scam? Well, owners have and it has been working the United States for years and this is how they earn their living. Recently, a Peoria, Ill.-based printing company fell for this scam. 

Should your hear of a similar situation, please contact the FBI.

-Steve SinkReblog this post [with Zemanta]

Problems solved are referrals in the making

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One of the most frustrating situations for the business person is the problem customer. In many cases solving the problem will take far more resources than the profit will cover. Why bother? For the referral! 

Recently I had the misfortune to become a problem customer. I had purchased a lawn mower from a very reputable dealer in Greater Des Moines about two years ago. Last fall it developed a gas leak that left my garage smelling terrible. After a few failed attempts to locate the problem, I returned to the dealer. I explained all the things I had tried and parts I had replaced. Unfortunately my message was lost and the same things were done again. When I came to pick up the mower, it was still leaking. Over the next two weeks the store worked to fix my mower and finally succeeded. If I had to guess, they invested close to the original purchase price in fixing the mower. The entire bill to me was $0.

Buy sticking with me and fixing my mower, this store guaranteed they would keep my business long term. What they also did was pick up a very strong referral point. I have told the story to several friends and a few strangers. These referrals are all the stronger as they come with a story about how the business not only provided a great product, but solved an issue when it came up. For the person receiving the referral, there can be no stronger vote of confidence.  

Today most businesses recognize the value of a great referral. They are the strongest form of marketing I know of. What many may not think about is converting problem customers to the strongest of referrals, like Johnston Ace Hardware did with me.

 Mike @ the Biz

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Project Management Nuggets

California-gold-nuggets I've been fielding a few questions recently about really good resources for project management material. So for this post, I thought a "mash-up" of some of my favorite spots would be worthwhile:

Books:  You'd be hard-pressed to find anything more comprehensive than the Project Management Bookstore online.  It's a subsidiary of RMC Consulting, but if they don't carry the book, then it's not worth knowing about within the project realm.  They periodically do author webinars (free) and provide other great resources for project managers.

Certification:  I earned my certification back in the mid 90's before all of the great resources were available.  From those I've talked with who've earned their certification (PMP) in the past decade, RMC Project Management provides the most comprehensive reviews available.

Blogs:  Wow, this one is tough.  But there are a few blogs that provide consistently excellent writings on project management, and have for some time.  Among them, Raven's Brain (it's been a while since she's blogged, but even her old stuff rocks), Glen Alleman's Herding Cats, Kevin Brady, and Scott Berkun all provide pithy yet insightful ponderings on making your projects run more effectively.

General Sites:  Top of the list are Gantthead.com and ModernAnalyst.com.  Gantthead will appeal to the straight PM's among us, while Modern Analyst is geared toward the highly valued yet underappreciated Business Analysts.  Looking for soft skills?  The best bet in a project environment is OfficePolitics.com.

I hope these resources will serve you as well as they've served me.

Carpe Factum! 

The Best and Worst in Customer Service

Each year, MSN Money releases its top 10 list of the best and worst in customer service. Here are this year's winners and losers.

The Hall of Shame

  1. AOL
  2. Bank of America
  3. Comcast
  4. Sprint/Nextel
  5. Capital One
  6. Dish Network

    An example of a Trader Joe's storefrontImage via Wikipedia

  7. Time Warner Cable
  8. Wells Fargo
  9. Citibank
  10. HSBC

The Hall of Fame

  1. Amazon
  2. Trader Joe's
  3. Netflix
  4. Apple
  5. FedEx
  6. Publix
  7. Southwest
  8. UPS
  9. Nordstrom
  10. Marriott

A couple of observations.

  • The "Hall of Shame" list is obviously dominated by large financial and home entertainment (cable/dish) companies. Do we have higher expectations of the companies with whom we depend on our daily financial and entertainment services?
  • I personally have been a customer of seven of the companies on the "worst" list. I am currently a customer of only one of the seven and have been considering dumping them because of my experiences. I find it interesting that I am a personal example of a customer who has chosen not to do business with six of these companies.
  • The "Hall of Fame" list is dominated by retail, shipping and travel companies. There is not a single financial institution or home entertainment company on the list. Once again, it begs the question if our expectations are different for those companies with whom we engage on occasion versus those with whom we depend for daily services.

 How do you react or respond to the list? What are your own experiences?

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Nameless, faceless business, no more

Image representing Facebook as depicted in Cru...Image via CrunchBase

With all of the coverage lately regarding Facebook privacy issues – which have since been addressed – a spotlight was shone on the fact that privacy is rapidly becoming a thing of the past. Some people more than others bristle at the idea, understandably so with concerns of personal protection. It is quickly becoming a reality, but not without benefits.

The social connection for individuals, personal connections and opportunity to develop deeper relationships for companies, brands and businesses – these are the more obvious rewards. One of greatest benefits, however, for businesses and organizations is this new platform to share the good works and initiatives previously buried in media inboxes or a heap of faxed press releases.

Corporate communications teams are embracing the opportunity with gusto, as they should. The green initiatives, nonprofit sponsorships, wellness initiatives and general social consciousness on behalf of companies and leadership have previously fallen under the radar. They are now front-and-center on Facebook pages and other social platforms. The best way to share these stories is through the faces of those most closely connected.

I am admittedly a big fan of American Idol. The best and most memorable performances are consistently those in which the contestants tap into their own personal connection to the song. These are the most authentic. The employees who take part in the company's social responsibility campaigns experience the positive impact of the effort first-hand. Their personal connection, authenticity and passion make these people among the best authors to share the story. The real life examples of support sharing who benefited and how are the best stories to share.

- Christine Stineman

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Pork-barrel tax bill takes aim at professional S corporations

The NASCAR Busch Series field at Texas Motor S...Image via Wikipedia

NASCAR is more important to Congress than your small professional practice. 

That's the inescapable conclusion arising from the "extenders" bill (HR 4213) that passed the House of Representatives last week.  The bill will subject K-1 earnings of professional S corporations to self-employment tax for the first time.  Worse, it will do so in a way that will be a compliance and planning nightmare.

The self-employment tax -- the self-employed taxpayer's version of the Social Security and Medicare tax -- starts at 15.3 percent on earnings up to the FICA base (currently $106,800, less any W-2 earnings subject to FICA tax).  Any amounts over the FICA base are still subject to the 2.9 percent. Medicare portion of the tax.  While salaries paid out of an S corporation are subject to FICA taxation, S corporation earnings passing through on a K-1 have always been exempt from FICA and self-employment tax.

Here's where the underprivileged folks at NASCAR come in.  A special tax break for race car tracks is set to expire, along with dozens of other so-called "temporary" tax breaks that Congress routinely passes for only a year at a time to conceal their real multi-year cost.  To pay to extend these porky provisions (for example, the biodiesel subsidy) for one more year, the bill would permanently subject some - but not all - professional S corporations to self-employment tax on their K-1 earnings. 

It would apparently be too simple to just subject all professional S corporations to self-employment tax.  It would instead apply to two sets of S corporations:

  • Those who are partners in professional partnerships, and
  • Those professional S corporations where "the principal asset of such business is the reputation and skill of 3 or fewer employees."

This obviously discriminates against smaller professional shops in favor of their larger multi-owner competitors.  It also creates obvious compliance nightmares.  How is a multi-owner professional corporation supposed to determine whether it's "principal" asset is the "reputation and skill" of three or fewer people?  Can it buy its office building to make that the "principal asset?"  What factors are used in valuing "reputation and skill?"  The bill provides no answers, creating a compliance nightmare for taxpayers and an enforcement nightmare for the IRS.

H.R. 4213 isn't final yet, but the Senate may take it up as early as today.  Call Senator Grassley, Senator Harkin, and anybody else you know in Washington and let them know how you feel about this wretched provision.  Unless, of course, NASCAR really is more important than your professional practice. 

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