How to Maintain (or Regain) Control of Your Growing Business

If you are in the fortunate position of seeing your business grow to the point where you have more than 50 employees, there’s a good chance the grip you thought you had on it will begin to slip away.

There is a good reason for this.

It has to do with the human capacity for attention. Experts say it’s basically impossible to manage more than seven or eight people. I can attest to that. There have been times when I’ve had more than a dozen people reporting to me — and it was problematic. I was not able to stay on top of their work, and they knew it.

What you may do is spend more time with some of the people who report directly to you and ignore the others for long periods of time.

If your top people are ignored, you are not doing the best job of managing them. You are not provoking them enough, not keeping a close enough eye on their performance, and not giving them the feedback and support they need to be successful.

But even if you do limit your direct reports to, say, seven, you can still lose control when the payroll exceeds 50. Here’s what happens:

Your seven direct reports understand you and your vision. Their subordinates report to them and not you, but the size of your company is still small enough that they see and hear from you all the time. They know what you want even if their boss has different ideas.

But when your company grows to the point where the subordinates of your top people have their own subordinates, the connection to you is all but lost. So what do you do when you have 50 (or 100 or more) employees and you feel like things are falling apart?

First, you should open your mind to the possibility that you aren’t the manager you think you are. In fact, it’s possible that your business isn’t being managed at all.

As an entrepreneur, your attention has been correctly focused on growth and profitability, not management. Your style of leadership might have been formal or casual. Your frequency of communication might have been regular or impromptu. You might have been a nice boss or a bastard. It hasn’t mattered because the seven that reported directly to you adjusted themselves successfully.

Their subordinates made dual adjustments: to their bosses and to you. But now that there are so many employees, you have to find a way to make sure they all understand your business goals and your expectations of them.

For all you know, they are getting bad ideas and directions from their bosses. You can’t see it, because those managers don’t report to you.

So you were right to focus on growth and profits. But now your business is in a different stage. Now you have to introduce some level of formal management throughout the business… which may mean that you have to become a more formal manager yourself. That would entail focusing on three things:

  1. Controlling growth operations
  2. Managing maintenance operations
  3. Communicating your vision

 Controlling Growth Operations

Every good-sized business is sure to have multiple operating parts – marketing, sales, accounting, customer service, product development and fulfillment, data collection, etc.

When your business was small, you could give short shrift to some of them. Now they are all important. None can be neglected. So which do you take on personally, and which do you trust to someone else?  READ MORE

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Get Better by Todd Davis

Friday, September 28, 2018

 

Delray Beach, FL–I purchased the book because I liked the title – Get Better: 15 Proven Practices to Build Effective Relationships at Work.

It seemed like it was going to be the sort of book that contains observations and advice that are sensible but not remarkable. Like it was going to be a book made by taking a listicle and expanding each bullet into a chapter.

And that’s what it turned out to be. Not a bad book. But one that could be scanned (rather than read word-for-word) without fear of losing much.

Below, you can see seven of its ideas along with my reactions…

Idea #1: To be a good relationship builder you must start by identifying the various roles you play, both within your business and in your personal life.

Me: Half right. Building a good life requires that sort of thinking. Building a business affects your personal life (and vice versa), but there’s no rule that you have to pay attention to it.

Idea #2: Learn to differentiate between non-important urgencies and those that matter greatly in the long run.

Me: Yes. This is extremely important in terms of personal productivity and achieving goals. I’m not sure why the author included it, since it’s only marginally related to relationship building. But, yes, very important.

Idea #3: Focus on collaboration, not competition, by thinking how everyone can benefit.

Me. Yes. Competition has its place in business, but cooperation is much stronger and much longer lasting.

Idea #4: Become a good listener.

Me: I hate this advice. But I think it’s true. So long as by being “a good listener” you mean listening so that you understand what is being said (and not being said) with the goal of advancing the business relationship, not taking care of the other’s psychological needs.

Idea #5: Work hard to make your employees feel that you trust them.

Me: Yes… unless you don’t. If you don’t trust them, get rid of them.

Idea #6: Promote a safe and respectful work environment.

Me: This is a good thing to do if by “safe” you mean that people feel safe to work hard and contribute to the business. If you take “safe and respectful” to mean they don’t have to worry about getting their feelings hurt, you are focusing on the wrong thing. Every hour you spend dealing with gender pronouns, for example, is an hour better devoted to creating profits.

Idea #7: Learn not to react too quickly. Learn to mull things over before you respond.

Me: Right. I wish I could have learned to do that. I managed to grow my businesses without this skill, but it is something that would have helped me. I’m working on it and probably will continue to work on it till I fall over.

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Every Problem Should Have a Simple Solution

Monday, September 24, 2018

Delray Beach, FL – On August 15, I published an essay titled “Growers and Tenders” in which I suggested that there are two kinds of employees. I wrote:

This is an exaggeration, but I like to say that, in business, personalities can be divided into two camps: those that value growth and those that value order.

Those that value growth (the growers) want to make everything bigger. Those that value order (the tenders) want to make everything better. And you need both to enjoy unstoppable success. But the ratio depends on where in the business lifecycle your company is.

This idea is, of course, a simplification. But there’s nothing wrong with that. In business (as in almost any context), simple ideas are almost always better than complicated ones because:

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Hiring Creatives? Standard Practice Doesn’t Work

Sunday, September 16, 2018

Delray Beach, FL– He needed a new editorial director. I asked him how the search was progressing. He said that someone was “currently reviewing resumes” for him.

That worried me.

Because when it comes to hiring members of your creative team, you are not looking for a specific set of skills. You are looking for superstars and potential superstars. And for them, conventional recruiting methods don’t work.

Academic credentials mean nothing.

Resumes don’t mean squat.

Relevant work experience is generally overrated and problematic. (Superstars are usually treated like superstars and therefore rarely appear in the job market.)

And re the initial review process… you have to be careful. You don’t want a sensible person doing that. They will cull out the “unqualified” and the “oddballs.” But superstars and potential superstars are usually both… so you have to make sure the reviewer understands what you are looking for.

What are you looking for?

You’re looking for temperament and talent. Someone who is very smart. And naturally contrarian. Also, someone that can play well with others.

You’re not looking for good. You’re looking for great.

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The Virtue of Laziness

Speed Up Your Career by Indulging Your Lazy Gene

The unpaid bills are stacked next to the unwashed dishes. You’ve been short about $1,200 per month since the divorce.

You need something to fill that now-a-memory, two-income cash flow gap. Something that’s not a pipedream. Something that’s feasible, flexible, and powerful. Something capable of producing more dollars per hour than you’ve ever made in your life.

It can’t be a financial investment, because you’ve don’t have enough in the market to make a big difference. So what can you do?

Before shutting down your computer for the night, you check your email. You see an advertisement. But before you delete it, you notice something in the message about extra income. “What the hell,” you think.

You click on the link and it takes you to a landing page titled “The Extra Income Project.” It’s a promotion for a collection of two dozen lessons, each one a different way to make extra money by working part-time from home. The author is someone named Mark Ford, said to be a best-selling author and a self-made multimillionaire. You’ve never heard of him. Still…

You order the EIP program. It arrives immediately, and you spend the rest of the evening looking through the lessons. One of them – “Service Businesses” – is particularly interesting. “Compared to other side businesses, a service business has the lowest barrier of entry,” this Mark Ford character writes. “It can be started with the simplest marketing methods, requires little to no start-up capital, and is likely to put you into business faster than any other sort of enterprise. The one requirement: You must be capable of doing high quality work.”

“I can do that,” you think.

Ford then lists several dozen service businesses, each with a short but helpful description of its benefits and drawbacks and income potential. Under “Landscaping Business,” you read: “This is a great business for people that don’t mind waking up early, enjoy working outdoors, and don’t mind getting their hands dirty… at least for a while. The income potential begins at about $25 an hour and can increase to $100 or more once you have a customer list of a few dozen people. If you are good at managing schedules and workers and do great work, this can easily become a business that makes you six figures.”

“I can definitely do that!” you think.

The next day, you spend $23 to print 500 colorful flyers advertising your new business. You use a variation of one of the pitches suggested by Ford:

Landscaping With Love

I’ll Make Your Lawn the Best

In Your Neighborhood, Guaranteed

First Service Only $10!

The $10 offer is an advertising trick – a “loss leader,” to prove what you can do.

It works. You get six responses in week one and land two Saturday gigs. By week four, you have $380 worth of weekly contracts. Your Saturday is now a workday, but you’re making an extra $1,520 per month.

You do good work, so you start getting referrals. You can, if you want, make even more money by working Sundays. That’s money you could use to lease a new car and maybe buy some new clothes. You’d have some left over for saving.

But do you want to work seven days per week? Hell no. You’re 52, not 22. You want the money but not the work.

There is a “Recommended Reading” section of the EIP program that lists several books that promise to “take you to the next level.” One is called Ready, Fire, Aim. It’s by the same author. Mark Ford. You order the book.

 To Hire or Not to Hire, That Is the Question

After reading the book, you think about your situation. You’re making an extra $1,520 per month by running your own part-time landscaping business on Saturdays. You’re tempted to expand it, but you aren’t willing to work seven days per week. The book has given you the obvious solution: Hire help.

But is it worth the cost and hassle?

Following the book’s guidelines on “analyzing growth opportunities,” you sit down with a pen and a sheet of paper and make two lists, one marked “plus” and one marked “minus.”

On the minus side, you include things like “the trouble of finding someone” and “managing people” and “figuring out the right compensation,” and so on.

The more you think about it, the longer the “minus” list grows. And yet you can’t think of anything to add to the “plus” list aside from “do less work” and “maybe make more money.”

You think, “This is exactly why I never wanted to have my own business. It’s just one long list of worries and concerns. Maybe this Ford guy is more smoke than fire.”

So you decide against hiring help. Instead, you accept a few jobs to do on Sunday mornings. You’ll make another couple hundred per week, and still have Sunday afternoon to relax.

A month later, you realize that you didn’t take into account rainy days and the occasional “Can you come back tomorrow?” You are making more money but working every sunlit hour of every weekend. It is wearing you down. It’s even affecting your performance at your weekday job.

You do the math. Doing everything yourself, you’re making about $50 per hour. You can hire someone to do the grunt work and pay him/her maybe $15 per hour. The difference, $35, would be your gross profit.

There would be some additional costs involved in growing your business, too. Taxes, for example. And you’d probably have to hire an accountant. But on an hourly basis, that couldn’t be more than, say, $5. That leaves you with a gross profit of $30 for each hour’s work.

That’s $20 less than you are making now. But overall, you’d be making about $1,800 per month instead of $1,500 while personally working the same number of hours.

It makes sense. But how do you make it happen? Where can you find a good worker?

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