Growing in a Small Business
Growing in a Small Business

I was reviewing some business statistics today. I knew that small business was the backbone of our country but did not realize the extent. Did you know that there are 24.3 million ‘non-employee’ firms? There are 5.83 million firms with employees and ninety percent of those have less than twenty employees. Combined, non-employee firms and employee firms with less the twenty make up nearly ninety-eight percent of the business community.

As I reflected on these, I recalled the Greiner Model regarding the phases of growth in the lifecycle of an organization. I assume that many have moved past initial startup but have not matured or grown enough to surpass 20 employees. In many cases, I’m sure this is by intent and in other cases, I suspect it is the result of struggling to break through the ceilings and obstacles that are inevitable with growth.   The passion, creativity, and talent of the Entrepreneur can only lift a company so far before the challenges of things like complexity, too many priorities, people issues, department silos, communication breakdowns, fear of delegation and many others create a ceiling and we decide to live where we are or try the next salvational program.

As companies try to grow and encounter ceilings, the challenge is lifting our head long enough to identify the growth barriers and dedicate a portion of scarce time to working “on the business”. Leaders in a growing organization must:

  • Be astute at SIMPLIFYING COMPLEXITY and providing CLARITY of organizational direction. 
  • Get comfortable giving up control and authority by learning to effectively DELEGATEto those that have the skill and the will to grow.
  • Eliminate redundancy and chaos by gaining control over CORE BUSINESS PROCESSES so that they become sustainable and scalable.
  • Design an effective STRUCTURE with clear ACCOUNTABILITIES, not one based on the need for power or aggressive personalities.
  • Adopt an OPERATING SYSTEM that fosters the formation of clear direction, the institutionalization of the desired culture, and accountability for execution.

Thank you to the 30,000,000 Entrepreneurs who are the backbone of America and that took the risk to chase a dream. Every business leader has the desire to win; if you’re trying to grow by outworking the next guy, consider taking time to prepare a winning game plan to break through the ceiling that is holding you back. For questions or more information pertaining to this article, please contact Scott Smith at scott@mostellerhr.com or info@mostellerhr.com.

Performance Management – Again?
Performance Management – Again?

It is that time of year, time to do the annual performance review to make the Human Resource Department happy.  Many will begrudgingly go back and dig out outdated job descriptions and irrelevant goals that were set 12 months ago.  Others will send a blank form to their employees and have them fill it out for the manager to sign.  And others will hide from Human Resources for two or three months until the heat is off.  We have all lived it and understand that the exercise of doing a review at the end of the year is not creating value, but we do it anyway, sometimes.

This year, I encourage us to embrace a new mindset about performance management, a mindset that the practice of an annual review should be abolished unless it is coupled with value-creating principles of performance management.  A few valuable principles for your consideration:

  • A few important goals and expectations are collaboratively defined at the beginning of the cycle to align individual efforts towards what’s important for the department or company.
  • Simply performing tasks XYZ as outlined in your job duties is table stakes for continued employment.  Goals are about identifying changes one can affect that will yield improved results.
  • Reality happens, its called life or business.  What seems important today may be less important tomorrow based on new realities.  Conversely, something we don’t even know about today may become a top priority.  Goals must be flexible, reviewed, and updated regularly (monthly) to ensure consistent clarity about what’s most important. 
  • Development plans should focus on providing opportunities to develop the competencies, skills, or experience required to achieve the established goals or to prepare for future aspirations.  Training as a goal is not appropriate and should only be on a development plan if a lack of skill or knowledge is the barrier to performance.
  • At the end of a review period, an individual either meets, doesn’t meet, or exceeds expectations.  Anything more is too complicated.

As leaders and managers, we risk allowing the tyranny of the urgent to force us to lose sight that our businesses require us to deliver results and that this requirement demands the aligned efforts of the resources we lead.  If we don’t spend time establishing and maintaining clear goals for improvement, we don’t meet regularly to provide coaching and remove obstacles, and we don’t provide enriching growth experiences, then we are not effectively serving the long term needs of the business, we are just working hard. 

If we commit to the disciplines of effective performance management, we can achieve great things and the year-end performance review will be little more than a summary of accomplishments that you sign at the end of a great year.

For questions or more information pertaining to this article, please contact Scott Smith at scott@mostellerhr.com or info@mostellerhr.com.

Culture Matters
Culture Matters

The hidden asset that does not appear on the balance sheet.  Who you are internally will absolutely become reflected in who you are externally.  HOW we perform must be equally important as IF we perform.  Every company, whether they think about it or not has a culture and this culture is either strengthening or weakening business performance.  A great culture will unlock the talents of people and allow them to thrive.   A poor culture will send quality talent out the door or keep its contributions restrained.

To focus on culture, you first need to understand the current culture.  Far too many organizations spend two days at strategic planning to craft lofty mission, vision, and value statements, then have very nice wall hangings behind the receptionist, in the conference rooms and they publish them in annual reports.

To have an actively managed culture, you must first embark on a discovery process – ask people, observe, and document the current and the aspirational elements of culture.   Dedicate a week or two to cultural discovery and explore what is great that you should keep, what you wish you had, what you have that needs to be eliminated, and what you need to intentionally keep out.

Once you have gone through the discovery process, only then do you begin to document the core values and core principles, the attitudinal and behavioral expectations in support of the core values.  Surfacing these from the grassroots of reality will always be more effective than the traditional top-down approach which feels more like the ten commandments.

Lastly, documenting the culture words and phrases is not enough.  There needs to be a daily, weekly, monthly, quarterly pulse of reinforcement.  This pulse should result in the ongoing quest to explore the definitions of the principles, evaluate how well we are living the principles, and determine what we can do to improve.  Also, these principles become part of the hiring process, the performance management process, and even become part of the due diligence behind mergers and acquisitions.

Culture is not buying pizza and giving free coffee.  Culture is about relationships, communication, client focus, work environments.  Culture is an investment business leaders need to make to attract and unleash talent and separate their business performance from the competition. Culture is the asset on the balance sheet that is not measured and that the competition cannot easily duplicate. For questions or more information pertaining to this article, please contact Scott Smith at scott@mostellerhr.com or info@mostellerhr.com

Enough talk, let’s build a culture that eats strategy for lunch…
Enough talk, let’s build a culture that eats strategy for lunch…

We all seem to intellectually understand the importance of a healthy organizational culture, but few businesses have a plan to intentionally define and institutionalize a culture that yields a sustainable competitive advantage.

Let’s start with the basics, a definition. Culture is a commonly held set of values and core principles that show up in the daily words and actions of the people; “the [insert company name] way”. I have a plaque hanging over my desk that says thoughts lead to words, words lead to action, actions become habits, habits shape your character, and your character defines your destiny. The culture of your company will define your destiny and your legacy. So, as we start our journey, we will focus on words and actions.

Before we talk about how, let’s discuss Why. Why does Culture matter, doesn’t the CEO have other important things to do? Four things to consider. (1) A healthy culture will yield a sustained differentiation in a sea of mediocrity. (2) A healthy culture will increase the ability to attract and retain the right people in an extremely competitive labor market. (3)Employees who are positive about their company will deliver better client experiences. (4) Companies with great people and strong cultures earn higher multiples or valuations.

Now on to how, and this is where we struggle. This cannot be a human resource initiative and it cannot be achieved with casual Fridays, more pizza parties, and gimmicks. Defining and institutionalizing a culture is a Sr. Leadership function. Let’s look at four specific actions:

(1) DEFINE. Too often, we create a few core values that are vague and meaningless. What we want to do in this phase is to identify 20-30 behavioral statements that define with specificity what you expect people to do. Do this by reflecting on questions like (a) What things if done, would create an amazing company (b)Which employees would you clone, why? (c)What behaviors make you crazy (opposite). Once you’ve created observable behavior statements, you can figure out a scheme to categorize them. Often, categorizing into core values can be effective, but avoid values that are aspirational (vs real) or generic table stakes (like integrity, honesty).

(2) TEACH. Everyone will read and interpret the statements in their own way. It’s very important to explain each statement in weekly increments. What does it mean, why is it important, how do we demonstrate. Create a weekly focus, incorporate into weekly meetings, talk about in weekly 1:1 meetings. Many things can be done, but the bottom line is to create consistent rituals. This is ongoing, year after year, but each year, the effort goes one layer deeper in the organization.

(3) MEASURE. What gets measured gets done. The best two ways to measure progress are (1) Build an organizational survey around the behavioral statements. Be prepared to receive the feedback humbly and expect leaders to be committed to being responsive. (2) Incorporate the behavioral statements into performance review systems and/or 360 assessments. Employees that cannot consistently meet expectations on at least 75% of behavioral standards must be addressed.

(4) EMBED. The final step phase is to embed all your behavioral differentiators into everything that you do. Build selection systems to hire people that “fit”. Build reward and recognition systems to reinforce. Build them into new employee onboarding processes.

Every company has a culture. Is yours by chance or by design? Don’t let a key driver of value in your company evolve by chance.

For questions or more information pertaining to this article, please contact Scott Smith at scott@mostellerhr.com or info@mostellerhr.com.

SOMEBODY sent to B.E.D.
SOMEBODY sent to B.E.D.

I recently had a conversation with a colleague.  He told me of a former CEO that had a life-size clown in his office.  The clown had a nametag, “SOMEBODY.”  We chuckled at length about all the mishaps that Somebody got blamed for.  He was so good at absorbing the responsibility for all that went wrong, we joked that we were going to hire a whole department of Somebody’s and call them the department of THEY.  Imagine, a whole department that can be blamed for all that goes wrong.  Now, instead of owning our own mistakes we can simply make excuses, deny responsibility, and blame THEM, write them up and never feel the sadness of not performing – BLISS!

A funny thing happens to companies that have employees named SOMEBODY and departments named THEY.  The individuals never take ownership, responsibility, and accountability for resolving the issues and driving the metrics that the internal or external customer cares about.  When that happens, the competitors that fired SOMEBODY and created cross-functional environments that are focused on the ultimate goal and own a shared responsibility for removing the obstacles that stand in the way of that goal pass them by, and they eventually go out of business.  

The challenge – eliminate the language of “Somebody and They/Them” and replace it with I, We, Us.  Focus the organization on the top 3-5 metrics your client cares about and challenge every team to see themselves in those metrics.  Empower people to remove the obstacles that inhibit their ability to deliver upon and improve those metrics.  Lastly, send Somebody to B(lame) E(xcuse) D(eny) and let your competition hire them!

For questions or more information pertaining to this article, please contact Scott Smith at scott@mostellerhr.com or info@mostellerhr.com

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