As with nearly any new process, managing vendors well starts with being very clear about WHY you have hired a vendor, WHAT you expect them to deliver, and HOW you expect them to work on your behalf. Let’s look at each factor.

WHY

You must start with the why—why have you hired a vendor? Very often, cost savings are a primary driver of the deal, but there can be other reasons:

• Capability—the vendor has expertise your company does not have and does not want to acquire
• Quality—the vendor may be able to deliver a service more effectively or to a higher standard than your company could do in-house
• Scope—your company may need services or materials in multiple locations or on a timeline that you cannot achieve in-house
• Strategic reasons—your company may be using a vendor to gain an advantage in some way beyond a direct, tactical benefit

The why of the relationship should be very clear to both parties, and where necessary, codified in the contract

What

Next, you need to consider the what—what services or materials will they deliver, when (including timeliness of delivery), how often, and to what quality level? The answers to these questions must be in the contract and form the basis of Key Performance Indicators (KPIs) and/or Critical Performance Indicators (CPIs). 

• The difference between the two is that a miss on a CPI might be grounds for ending the contract, while a miss on a KPI might only attract financial penalties or a need to make the recipient whole.

How

The next consideration is how you expect the contractor to work. This is particularly important if their role is customer-facing in any way, but it can also be important if the vendor interacts with your company employees. The How could include things like

• Materials or supplies that must be used
• Techniques for delivery that must be used, or techniques that may NOT be used.
• Adherence to company cultures, standards, codes of conduct, regulatory requirements, or other expectations

These Hows must also be captured in the contract, along with agreed metrics for measuring them and designation as KPIs or CPIs if applicable.

Other items that must be captured in the contract include a framework for managing the relationship:

• Who will meet to discuss and resolve conflicts or disagreements?
• How often should they meet?
• How will changes to the contract be managed (when the contract is for more than a one-off engagement)?
• How will failures to meet contractual terms be resolved?
• When the contract ends, who will do what by when?
• For what reasons can the contract be terminated early?
• If that happens, what are the responsibilities of each party?

Risk

A last consideration for managing vendors is the element of risk—how will your company manage the risk that using vendors brings?

• How will you know if they are doing or not doing something that will create risk for your company?
• If the vendor does something wrong or fails to do something right, who is responsible to do what? What penalties will the vendor bear? What restitution are they required to make?
• What level of control does your company have over the vendor company, and what legal or regulatory obligations must the vendor bear on your behalf?

As you can see, managing vendors well is not optional, nor should is it something that can be “dealt with later”. If you need help managing your vendors, contact me at 646-736-9006 or at jeff-dot-hosken-at-jirehenterprises-dot-solutions.

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The post Managing People Well–Kolbe Assessment Overview first appeared on Jireh Enterprises.

This is one of the most difficult tasks a manager must do, and often managers procrastinate taking this step because of its difficulty. Here’s how to do it well, when it must be done.

• First, realize that firing someone is good for the company and often good for the person
  • For the company
    • A team member who is not delivering against expectations usually affects other employees, either by causing them additional work or by lowering the performance standards of the company.
    • They are also costing the company money and impacting the company’s ability to serve customers, grow, and/or be profitable
  • For the person
    • Consciously or unconsciously, most people are stressed when they are in a job that is not right for them
    • Many times, fear of “what’s next” keeps them stuck; firing them frees them and forces them to explore what they should be doing instead
• Next, know that firings should never come as a surprise to the employee.
  • If the manager is doing their job, it will be clear to the employee that he/she is not performing up to expectations and that there are consequences to that shortfall.

Consider that there are two types of “firings”. 

• The first is when a manager has hired the right person—they are a good match with the company’s values—but they are in the wrong seat—they are NOT a good match for the role they are in. The solution is to move them into a role they DO match, following these steps in order:
  • Reach mutual agreement that they are missing some key capability or characteristic that is required to succeed in their current role, and that past efforts to help them improve have not succeeded and are unlikely to succeed.
  • Identify open or new roles that the employee WILL match well, if possible
  • Reach mutual agreement with the employee and the new manager on the details of moving the employee to the new role, including how that move will be communicated to other employees
  • Execute the change
• The second is when the person is not a good fit with the company’s values. 
  • This may or may not reflect a moral failing—someone could be risk-averse and not a creative thinker in a company that values risk-taking and creativity. The solution in this case is to end the person’s employment in a way that honors them and optimizes their chances of future success.
    • Reach mutual agreement that a values mismatch exists and is unlikely to be resolved in a timely way.
    • Reach a mutual agreement with the employee on the timeline of the transition out of the company and the assistance the company will provide to the employee in finding a new job.
  • If there is a moral failing, this may be an immediate departure with no assistance
• Laws and regulations are likely to be a factor; consult with experts as needed
• In all cases, the employee’s manager must assess and manage the impact on the organization
  • Will the org chart change, i.e., will the employee’s responsibilities be handed intact to someone, or will they be parceled out to multiple people?
  • Does the firing create a promotion opportunity? Is a new hire needed, and if so, for what role?
  • How will workflows be impacted? What knowledge needs to be captured before the employee departs?
  • How will other employees be impacted, professionally or emotionally?

Retiring

Because this is not a frequent occurrence, many managers will be novices at this step. Here’s what it looks like to do it well.

• The financial aspects of retirement flow from the company’s policies regarding pay and benefits and should be part of the written employee handbook. 
• When an employee approaches retirement, the manager and employee must prepare together for it.
  • They must agree on the timing, what communications will go out, and what ceremony will happen
    • Timing should be a mutual decision
    • The communications and ceremony should be based largely on the employee’s desire, but must honor both the employee and the company
    • Think carefully about the goals of both and how those goals can be met in an excellent way
  • Like in a firing, the manager must decide how to best manage the impact on the organization
    • Will the org chart change, i.e., will the retiree’s responsibilities be handed intact to someone, or will they be parceled out to multiple people?
    • Does the retirement create a promotion opportunity? Is a new hire needed, and if so, for what role?
    • How will workflows be impacted? What knowledge needs to be captured before the employee departs?
    • How will other employees be impacted, professionally or emotionally?

The post Managing People Well–Firing and Retiring first appeared on Jireh Enterprises.

I’d like to cover these first, as they are more straightforward. A raise is an increase in an employee’s pay without a corresponding increase in their responsibilities or level in the organization. Good looks like this:

• The employee and manager mutually understand the purpose of a raise, e.g.,
  • Is a raise meant to keep the employee whole in the face of inflation?
  • Is a raise meant to retain the employee in a competitive job market?
  • Is the raise meant to reflect an employee’s increased productivity due to training, accumulated experience, or some other factor?
• The employee and manager mutually understand when raises will happen
  • This should be written in the employee handbook, is driven primarily by the needs of the company, and is not usually open for negotiation
• The employee and manager mutually understand how the amount of a raise will be determined. Examples:
  • Cost of living raises will be based on the US CPI index
  • Competitive job market raises will be based on independent survey data re: pay (shared with the employee for transparency) and on performance evaluations
  • Increased productivity pay will be based partly on the employee’s performance, measured by performance evaluations, and partly on company performance. The split should be company policy and will likely vary as an employee’s level in the org chart changes.

Promotions

A promotion is an increase in job responsibilities that may be accompanied by a change in title and should include an increase in pay. In contrast to general employee management, promotions should be done systematically. Exceptions should happen rarely and with abundant, transparent justification—this reduces perceptions of favoritism or any other -ism affecting the decision(s). A good system includes these elements:

• Clear criteria for eligibility 
• Clear, agreed expectations about when promotions will happen
• Clear, objective selection criteria, focused on job performance
  • Do not include “potential” as a criterion, because
    •  Potential is a subjective assessment and humans are notoriously bad at judging it 
    • If you doubt this, consider that NFL scouts are explicitly paid to assess “potential” and usually have decades of experience to back up their judgments. Then consider that Tom Brady was picked dead last in his draft. Are you better at assessing “potential” than the professionals who passed on the greatest quarterback of all time?
• Transparency about who will be involved in the decision and who the final decision-maker is
• Transparency to every candidate on how they scored on the stated criteria

The post Managing People Well–Raises and Promotions first appeared on Jireh Enterprises.

Most companies are frankly poor at onboarding, yet it sets the tone for the new employee’s entire tenure with you. This is where a system really shines because every employee will have a lot of needs in common. Create a template for onboarding that includes all of the common needs, and then challenge your managers to fill in the gaps for the specific new hire. Common needs can include:

• The employee must read the employee handbook and review it with his/her manager; the employee must confirm in writing that he/she has read and understood it.
• Review the organization chart and who is responsible for doing what within the company
• Introduction to anyone they are likely to interact with
• Get them the tools they will need (physical, tech H/W and S/W, access controls, etc) and show them how to get support when they encounter problems
• Ensure HR-related onboarding (pay, perks, policies, etc.) are completed, including how to get support when needed
• Explain how performance management is done at the company

Performance management

This is where the system/personalization paradox is most apparent. The system part:

• Every manager needs to agree with their reports on 
  • What they are responsible to deliver, by when, how often, to what quality level, and with what tools and resources
    • The best practice is to set SMART goals and stretch goals
    • Agree on how delivery will be measured and the consequences of over- or under-delivery
  • Who they will have to support and from whom they can get support
  • How they are expected to work, including cultural expectations and processes
    • When and in what ways can they deviate from company processes
    • How do they submit suggestions for process improvements?
  • It is critical that this is a 2-way conversation, not delivery of an edict from on high; the end result is a contract between the employee and the manager for quarterly and annual results.
    • The contract can be changed, but only by mutual agreement.
• Next, the manager should provide regular feedback to employees on how well they are performing. This is also a 2-way conversation and has to happen more than once a year.
  • Monthly feedback works very well but takes up a lot of time; quarterly feedback is a good compromise
  • If annual goals have not been set, the quarterly feedback session is the time to set goals for the foreseeable future. This is also a good time to update the performance “contract” if needed.
  • A good manager will ask for feedback about themselves; a great manager will require honest feedback and act on it
  • One of many good structures is “more of, less of, the same”
    • What does the manager want to see the employee do more of?
    • What does the manager want to see the employee do less of?
    • What does the manager want the employee to continue doing the same of?

The “adapt to the employee” part:

• Managers need to learn what makes their employees tick and how they like to be recognized & rewarded. 
• Managers need to know what their employees’ goals and aspirations are, and mutually create a plan to reach them
  • Managers need to think about when and how to stretch their employees for their growth, even if the employee is hesitant to be stretched, and how to support them while they are being stretched
• Establish a rhythm (weekly or bi-weekly) to check in with each employee. This is their time to discuss whatever they want with the manager. 

The post Managing Employees Well–Onboarding and Performance Management first appeared on Jireh Enterprises.

Recruiting is to hiring what marketing is to sales. If you don’t have a good recruiting system in place, your hiring process will be hit-and-miss. Just like marketing and sales, recruiting and hiring should flow from your strategic plan. As a business owner, ask yourself:

• What kinds of roles will I need to fill in order to achieve my 1-year goals? 
• My 3-year goals? 
• My 10-year goals? 

The timing of your planned hires will likely vary according to your success in hitting your strategic targets, which in turn is likely to be affected by the economy around you. The important point is that your strategic business planning should guide you as you proactively determine the roles you will need to fill and the timing to fill them.

Systematically, you need a recruiting/hiring funnel in the same way you need a marketing/sales funnel. Just as you should always be selling, you should always be recruiting. Consider:

• Do you need an internship program to develop potential hires? One positive experience for an intern is likely to be shared with their friends and classmates, so the potential ROI as a recruiting tool is large
• When people start looking for a job, they typically turn to LinkedIn and the “rate your job” websites like Glassdoor, Indeed, UpWork, Monster, etc. Start with a company page on LinkedIn, then expand to other sites. Let them passively recruit for you.

Hiring

Before you hire for a role, you need to decide what kind of person would best fill it. (Hint: it likely isn’t the first person available!) Design the role and the larger team by considering:

1. What gap in your company are you trying to fill?
   1. Do you want someone who will primarily work independently, such as a salesperson?
   1. Are you trying to fill out a team roster, where each person does something different but has to contribute to the whole?
   1. What is the growth path for the role—do you want the new hire to grow into a higher-level role, or are you looking for someone who will likely fill the same role for the foreseeable future?
2. What affective characteristics (values, personality types, level of emotional awareness and interaction, etc.) do you want the new hire to have?
   1. Because you know your company values (you do have written company values that you strive to live by every day, don’t you?), you want someone who shares those values. 
   1. A values match is (or should be) non-negotiable, so determining a values match should be upfront in the hiring process.
   1. What other characteristics are required?
   1. What characteristics do you want to avoid?
3. What cognitive (skills, training, experience, ways of thinking) characteristics are needed to fill this role? 
   1. Differentiate between required (must-have) and desired (helpful to have) levels of need
   1. What tradeoffs between experience and formal training/education are acceptable?
   1. How much on-the-job training can you or your team realistically expect to provide, if an otherwise great applicant appears? Over what time frame?
4. What conative (instinctive ways of working) characteristics are needed to fill this role?
   1. This is arguably the most-overlooked aspect of hiring, yet (after a values match) the most important
   1. Examples:
      1. Will the new hire need to follow specific processes and procedures exactly, or do you need them to be adaptable? 
      1. Do you want someone to be innovative and comfortable taking calculated risks, or do you want her/him to minimize risk?
      1. Is this a data-intensive role, or is only a knowledge of the basic facts required?
      1. Will the new hire need to be good at working with his/her hands, or will they need to be good at working with ideas and concepts?
      1. What is the tolerance for each of the above?
5. How open are you to wildcards, i.e., someone who brings strengths and weaknesses you had not thought about? Make this part of your role design process.

When you have designed the role and have answers to the questions above, you are ready to design the selection process. Best practices in this phase include:

• Aim for a positive candidate experience—you want the new hire to be excited about working for your company, and that excitement should be built by the hiring process
• Include testing as needed, e.g., personality/values/ways of working tests. These will give you an objective view of how well they will fit into the role you have designed
  • While potentially stressful to the candidate, most people find learning more about themselves to be a positive experience
  • A test, in and of itself, is not a good basis to reject a candidate (and may not be a legal basis), but it can be used as an indicator of success or struggle in the role
• For a role in which cognitive skills are required, ask the applicant to demonstrate their skills
  • A coder should write code to solve a real problem you face
  • A technical worker should demonstrate competence on the machinery she/he will use
  • Ask a manager to solve people or operational problems relevant to their role
• Assess values, character, and cultural fit through interviews, using job-relevant questions that have been cleared by experts for legality
  • Example: this job requires travel 10% of the time, but those times are not always predictable. Is there anything that would preclude you from traveling when needed, including on short notice?
  • To be human is to have biases, most of which are unconscious. Be as aware as you can of how your biases might lead you to hire a sub-optimum candidate or pass over the optimum candidate
  • Ask for multiple examples of behaviors showing values, character, or cultural fit—most applicants will have one good story prepared, but someone who deeply embodies those things can come up with multiple examples
• Give the candidate an opportunity to ask questions, and evaluate the quality of their questions
  • Are they focused on the benefits to them or their ability to contribute?
  • Do they ask about things they should have researched prior to the interview?
  • Does their level of questioning match their experience and the qualities you are looking for in the role?

Lastly, let them know the next steps in the process and set their timeline expectations.

• Ensure you meet any commitments you have made—if you said they would hear from you within a week, do that, even if the message is “We haven’t made a decision yet.”

The post Managing employees well–recruiting and hiring first appeared on Jireh Enterprises.

As the above illustration shows, however, there ARE things we can control IF we choose to. As Steven Covey said, the number one thing we can control is ourselves. He pointed out that “responsibility” can be broken down into “response-ability”, i.e., the ability to choose our response to a stimulus. As business owners, we are “response-able” for how our business runs and how we respond to events impacting our business.  Let’s look again at the five categories of “stuckness” and how we can respond when we find ourselves in one or more.

Chaos

At Dictionary.com, the antonyms to chaos include calm, harmony, order, and most importantly, system. Because these describe how to overcome chaos, let’s briefly look at each.

• Calm starts within you—your team and even your customers will rarely be calmer than you. Calm comes from a belief that you and your team are able to meet any challenge. As a fighter pilot, I learned very quickly that my response to a problem was never improved by panic! Instead, take a deep breath, figuratively and literally, and realize that a solution to every problem exists.
• Harmony and order go together, though they are not synonymous. Creating order is a necessary but not sufficient step to overcoming chaos; creating order such that parts integrate seamlessly with each other and work flows smoothly between them leads to harmony.
• The bottom line for overcoming chaos is that you need to have systems in place—orderly, repeatable methods that enable you and your team to process work smoothly and efficiently yet also recover quickly from unforeseen events. 
• Libraries are full of books telling entrepreneurs how to them run their businesses well; one I like is the Entrepreneurial Operating System, EOS™, as described in the book Traction by Gino Wickman.

People problems

Finding great employees is a challenge for all companies. Managing them well is also a challenge. My recommendations align with the EOS system:

• Hire the right people—this means hiring people who 1) share your company’s core values, 2) have the experience and knowledge to do the job, and 3) will naturally work in the way you need them to work
• Put them in the right seats—this means you need to know 1) what roles you need in the organization, 2) what types of training, experience, or knowledge are needed to do each job, and 3) how you need the person in that role to function.
• Managing people well comes from being clear on what you expect them to deliver and then providing regular, honest feedback to them on how they are doing against expectations.
  • Regular means formal performance assessments should be done at least semi-annually; quarterly or even monthly is better, with weekly touchpoints with each employee

Revenue and profit

For some businesses, the path to increased revenue and profits is clear, but for most it requires an ongoing stream of decisions. Thus, increasing revenue and profits comes down to making good decisions, and making good decisions comes down to three things:

• Using data, instead of anecdotes, emotions, and assumptions
  • This means you need a system to identify, collect, analyze, and distribute the data
  • It also means you need to ensure your decision-makers are using it to make decisions—this ties into the performance feedback framework described above
• Focusing on the most important decisions, the ones that will really move the needle
  • It’s seductively easy to put too much time and energy into making small decisions that don’t really matter, leaving you without enough time and energy to make the big calls
  • Avoid this pitfall by regularly asking yourself, “What is the top thing that is keeping me from making more money?
  • Focusing on the top problem each day will ensure you focus on making the important decisions that day
• Ensuring decisions are made at the lowest possible level, with the right level of oversight
  • Set the expectation first with yourself and then with your employees that decisions should be made by the person (never a committee) that is closest to the problem and has the resources to solve it—this person is called the RP (responsible person)
  • The management level directly above should be responsible for reviewing decisions over time and where necessary, improving the decision-making ability of the RP

Growth

Reversing a decline in revenue & profits and/or growing them requires first that the above problems are solved. If you still cannot grow as quickly as you want, you likely need to address one of two things:

• A failure to solve problems effectively. Unsolved problems, aka issues, drain time, focus, and energy. To solve problems effectively, you need two things:
  • An issues list that is shared within the leadership team and as appropriate, with the entire company. 
    • Issues should be listed at the company level (strategic and quarterly time frames) and at appropriate sub-levels (monthly and weekly time frames)
    • Issues must be prioritized and addressed in order
  • A way to identify the real/specific problem(s), find the root cause of each, and create an effective solution
• Can you acquire all or part of another company to fill your biggest need?
  • Examples: if you need market share, buy a competitor; if you need increased profit margins, buy a supplier or someone to whom you are a supplier

Frustration

If you have done all of the above yet are still frustrated, it is likely because you lack day-to-day traction, in the words of Gino Wickman. Traction boils down to two things: accountability and execution

• Accountability requires each employee to have a short list of specific, measurable, and attainable things they will do over the next 90 days, called Rocks.
  • A list of everyone’s Rocks should be shared with the entire organization.
  • A short list is a focused list.
    • The company as a whole should have 3-7 Rocks
    • Senior leaders should have 3-7 Rocks
    • A line employee should have 1-3 Rocks
    • Sharing the Rock list will inherently create accountability, as everyone knows who is responsible to accomplish what.
• Execution requires that the company holds quarterly and weekly meetings to create accountability. Both meetings have a common structure:
  • Segue
  • Review key data on “Scorecard”
  • Review Rocks—done or not done
  • Review To-Do list—done or not done
  • Address issues
  • Conclusion

If you are stuck, I hope that these ideas help you to become un-stuck. If you want to learn more or think you need help to put them into action, I am here to help you! You can contact me by phone or text at +1-646-736-9006 or by email at jeff828hosken@pm.me. If you do not need my help right now, please read my next few posts where I will dig into what it means to manage people well!

The post How to regain control of your business first appeared on Jireh Enterprises.

Being “stuck” as a business owner can mean a variety of things since the specifics of each owner’s situation are different. While acknowledging that truth, I suggest that we can divide “stuck-ness” into five categories:

Chaos

Dictionary.com defines chaos as a state of confusion or disorder or as a lack of organization or order. As an owner, you may feel that your life is out of control. It could be a lack of control over your time, or feeling buffeted by the market, or not having enough control over what is happening inside your company. If your time is consumed resolving crisis after crisis, you might be stuck in chaos.

People problems

While often by “people” we mean “employees”, people problems also encompass customers, vendors, and/or partners. It may be that employees don’t share your vision for the company, or they all seem to be going in different directions with different priorities. Customers can seem too demanding, or worse yet, apathetic; vendors fail to follow through on their commitments to you. If you are frustrated by the people you work with or for, you likely suffer from people problems.

Revenue and profit

For many owners, there is not enough of one or the other, or perhaps both. If this is what stuck means to you, you are probably unsure what the problem is and therefore what to do about it.

Growth

You seem to have hit some sort of ceiling on growth—new customers are hard to find, or your company seems to be unable to scale in order to deliver at a higher level. You may know that you need to grow, but are unsure how to do it or what strategy to implement—is geographic expansion your next step, or broadening the kinds of products/service you offer, or something else? This category also includes negative growth—your sales and profitability are not only stagnant, they are headed in the wrong direction.

Frustration

You are not at a loss for new ideas, but none of them seem to work. You have tried new strategies or the latest business initiative, but all you have to show for your efforts is a worn-out, jaded, even cynical staff. You are working as hard as you can, but you are metaphorically spinning your wheels and going nowhere.

If you suffer from one or more of the above categories, you are stuck. Recognizing  and admitting this is the first step to becoming un-stuck. If you are stuck, let me help you! You can contact me by phone or text at +1-646-736-9006 or by email at jeff828hosken@pm.me. If getting help is not a good fit for you right now, please read my next post to learn how to regain control of your business!

The post Are you stuck? first appeared on Jireh Enterprises.