How Not to Hire a Guy Like Me

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How to Have a Successful Failure, Part Two

This is part two of a two-part series on how your business can not only survive but also thrive after a major setback by embracing failure as an opportunity. Part one discussed successful businessmen who persevered after failures and ultimately became successful. Part two contains specific tips on how you can achieve a successful failure for your business.

We’ve all failed at something. Maybe it was your driver’s test when you were 16. Perhaps you didn’t make that weight loss goal you set for yourself last year. Or maybe you’ve suffered a major setback in your business and are starting to feel like a failure.

You can move on from failure. As Maya Angelou said, “You may encounter many defeats, but you must not be defeated. In fact, it may be necessary to encounter the defeats, so you can know who you are, what you can rise from, how you can still come out of it.”

I’d like to offer a few tips on how to overcome that feeling of failure and perceive it as an opportunity for success.

  1. Accept failure, but view it as temporary.

As motivational speaker and writer Denis Waitley said, “Failure should be our teacher, not our undertaker. Failure is a delay, not a defeat. It is a temporary detour, not a dead end.”

So some marketing initiative or new product launch didn’t work out as planned. Perhaps your company has suffered a huge financial setback. Acknowledge that the attempt to meet your goal failed, but vow to move on.

  1. Learn from your previous mistakes.

If possible, determine what went wrong to cause the failure. If it’s not possible for you to uncover the issue internally, consider hiring outside help to find out the cause and help ensure success next time. An outside consultant can also help you determine if you’ve correctly pinpointed the issue. I’ve been hired to help failing companies that thought they knew exactly what the issue is, only for me to determine they were wrong and that the solution they had proposed was doomed to fail.

  1. Set realistic expectations.

It’s great to stretch yourself and set ambitious goals for you and your company. But setting them too high can result in yet another failure and demoralize your employees.

I tell the story in my book, How Not to Hire a Guy Like Me, of working with a company in Florida that bought a company in Minnesota and wanted to move it to Florida and have it operational in three days. Given their resources and logistical considerations, the plan was absolutely impossible.

I worked with them to map out a two-month process for the relocation. The move went smoothly and with a minimum of downtime.

  1. Consider your definition of success.

During the recession a lot of companies had to reconsider what their definition of success is. As I heard it described then, “Survival is the new success.” Sometimes in tough times, just keeping your business afloat is a success. Recognize that and congratulate yourself for it.

We will all fail at something in our life, and yes, that can be disappointing. But it’s how we react to it that makes all the difference. Dale Carnegie said, “Develop success from failures. Discouragement and failure are two of the surest stepping stones to success.”

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How to Have a Successful Failure

This is the first in a two-part series on how your business can not only survive but also thrive after a major setback by embracing failure as an opportunity. This blog discusses successful businessmen who persevered after failures and ultimately became successful. Part 2 will contain specific tips on how you can achieve a successful failure for your business.

After two failed attempts to design an economical and reliable car, Henry Ford lost his financial backing and the confidence of people in the car business.

Undeterred and tired of those who knew nothing about design injecting their opinions, he found a more appropriate business partner from Scotland, Alexander Malcomson, who promised to not interfere in the design process.

With Malcolmson’s backing, Ford designed the Model T, which debuted in 1908 for $825. In the first year, 10,000 were sold. When the price dropped to $525 four years later, sales zoomed and Ford had a 48 percent share of the automobile market.

Henry Ford used what he learned from his failures to make a better product. “Failure is simply the opportunity to begin again, this time more intelligently,” he said.

Get Past Feeling Like a Failure

As a Turnaround Authority, I practice this philosophy when I work with companies that are failing. When I meet with senior management, they are often feeling pretty bad that the company is having difficulties. They may be feeling like failures on several levels.

One of the first things I try to do is to help them focus not just on past failures, but the opportunities the company now has in its current situation. These can often be difficult to see when your business is not doing well.

Great examples can be found in companies that not only survived the Great Recession but also actually came out stronger. An article in the Wall Street Journal in 2012, “For Big Companies, Life is Good,” referred to an analysis done by the Wall Street Journal of corporate financial reports. It found that “cumulative sales, profits and employment last year among members of the Standard & Poor’s 500-stock index exceeded the totals of 2007, before the recession and financial crisis.”

These companies turned to deep cost cutting and cautious investing to outperform their competitors. “U.S. companies became leaner, meaner and hungrier,” said Sung Won Sohn, a former chief economist at Wells Fargo & Co.

What is a Successful Failure?

Once you’ve acknowledged that your company is failing and that this situation can be overcome, that presents you with an opportunity to emerge leaner and meaner, what is termed a “successful failure.”

Let’s say your company does totally fail. Look at that as an opportunity to try again. Here’s just one example of a guy whose business failed and he came back even stronger.

Gary Heavin dropped out of college in 1976 and started a gym, becoming a millionaire by age 25. But his rapid expansion and high overhead costs led to financial difficulties and by age 30 the company went bankrupt.

Taking the lessons he learned from that business failure, Gary started Curves, a women-only gym. Again, he met with rapid success. He then franchised the business, which now has 10,000 locations around the world, and he is a billionaire.

Failures can be turned around into success stories if you perceive them as opportunities. After all, that’s what I do as the Turnaround Authority. It can happen for your company, too. Come back for part two for my tips on how to get started.

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Why You Want Your Employees to Take Vacation

Many people refer to the third Monday of January as Blue Monday – the most depressing day of the year. The holidays are over, the weather is cold and drab and there is less sunlight.

If you’ve made some typical resolutions for the new year, you may have given up foods you love, or alcohol for the month. Rather than cheery holiday cards that arrived in your mailbox in December, now the mail just brings bills from purchases you made this past month.

Here’s my prescription for battling Blue Monday. Plan a vacation. Not only will it give you something to look forward to, taking time off is good for your health and your productivity. And encourage your employee to take time off as well.

While many Americans leave vacation days unused every year, according to a survey done by Glassdoor, a career website, 15 percent of U.S. employees did not use any in 2013.

And they even brag about it, believing they are more productive and proving themselves more dedicated and valuable than their co-workers. They may believe it helps ensure job security.

But studies have shown that not using all of your vacation is actually hazardous to your health. The Framington Heart Study found that taking vacation increases your longevity and decreases your changes of dying from a heart-related cause.

And taking a vacation can actually make your more productive. In an interview with ABC News, Francine Lederer, a clinical psychologist in Los Angeles said, “The impact that taking a vacation has on one’s mental health is profound. Most people have better life perspective and are more motivated to achieve their goals after a vacation, even if it is a 24-hour time-out.”

Recognizing the importance of time off, many companies have taken unique approaches to make sure their employees refresh themselves.

Rather than mandate a maximum number of vacation days, HubSpot instituted a minimum number. Every employee has to take two weeks off every year. The Motley Fool awards the Fool’s Errand prize to one lucky employee. The company draws a name of an employee who has been with the company at least a year. The lucky winner gets $1,000 and two weeks off, must leave immediately and have no contact with the office. And if you work for FullContact, you receive $7,500 to finance a vacation.

Evernote began offering unlimited paid vacation. But some employees were confused and thought that meant they shouldn’t take any vacation. So the company offered each employee $1,000 to get away, and “come back with a stretched-out mind,” said Phil Libin, chief executive, as quoted in an article in the Wall Street Journal.

There is another excellent reason to encourage a two-week vacation. As the Turnaround Authority, I always recommend that banks and financial institutions require the CFO to take two consecutive weeks off to detect and prevent fraud.

As I write in my book, “How Not to Hire a Guy Like Me: Lessons Learned from CEO’s Mistakes,” during his absence, do his job. Sit at his desk. Open his mail. Review all of the deposits. Talk to his secretary or assistant. Just see what happens. This method has long been highly successful for CFOs, and banks have used this same technique for ages. If you don’t find anything unusual, that’s wonderful. Unfortunately, though, you might uncover a detail worth noticing.”Having another set of eyes review transactions can uncover fraud and some misdemeanors.

Taking time off is good for your health, your productivity and your outlook, and that of your employees. It’s also an opportunity for you to spot potential fraud.

So rather than dwell on the dreary days of January, plan a getaway. Even if it’s just a weekend away, you’ll feel refreshed. And Blue Monday will be just another day.

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How to Hire Beam Holders

This is part two of a two-part series on beam holders. Read on to find out what that is, and how you can find them.

In my last column, I wrote about the value of beam holders to your business. In the words of Sharon Sloane, chief executive of Will Interactive, a company that makes training videos, a beam holder is “Someone who feels personally responsible for the welfare and growth of the company and will do whatever it takes.”

I refer to these folks as Super Stars in Game Breaking Positions. These are the people you want working for your company at any time, and especially when your business is in dire straits.

So how do you find them? For higher-level positions, I recommend spending the money for a search firm. While you may need to shell out big bucks, it’s a wise investment in your business to find the right person. Particularly if you are in a hurry to fill a position. Please read more about it in my column, “How to Search for Superstars.”

If you have adequate time to fill a position and want to hire someone yourself, determine what attributes you would like in that person and set those as criteria for hiring.

Here are examples of criteria others look for. An article I read on http://www.fastcompany.com, “The Top 5 Traits All Top Performers Share” by Morton Mandel and John Bryne listed these five traits:

  1. Intellectual firepower
  2. Values
  3. Passion
  4. Work ethic
  5. Experience

Another article in http://www.tlnt.com, “The Five Attributes of High-Performing Employees” by Laura Stack, mentions these:

  1. Looks good on paper
  2. Has a Yoda attitude, personified by the saying, “Do. Or do not. There is no try.”
  3. Has sharp, well-defined goals
  4. Ambitious
  5. Has excellent time-management skills

And yet another article on entrepreneur.com, “5 Attributes to Look for in High-Performing Employees,” by Ryan Caldbeck, lists these five:

  1. Horsepower (intelligence)
  2. Ownership and pride
  3. Work Ethic
  4. Integrity
  5. Teamwork

I wouldn’t argue with any of these qualities. These are all excellent traits to look for in an employee. And despite all these articles, you don’t have to stick with just five. Select which qualities are most important to you and look for those when hiring. That should lead to you building an A team of beam holders and super starts.

Let’s say your business is going along just fine and you don’t have any available positions. I recommend you always keep your eyes and ears open for the next beam holder. If someone you meet at a party or networking event particularly impresses you, get his or her business card and file it away for when you do need someone. You always want to keep your A team well staffed.

And one last point. Once you hire these people, you need to compensate them well to ensure they will stick around. Always keep them ahead of the curve on compensation. You aren’t the only one always on the hunt for beam holders.

 

 

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Why You Want Beam Holders in Your Business

This is part one of a two-part series on beam holders. Read on to find out what that is, and how you can find them.

I love it when I come across a new phrase in business. Especially one that describes someone or something that I encounter frequently and can then use myself.

I recently came across such a useful phrase as I was reading an interview with Sharon Sloane, chief executive of Will Interactive, a company that makes training videos.

Her interview was in Corner Office, the weekly NYT column by Adam Bryant. He asked her what she looks for when she hires people.

She responded that she looks for “beam holders.” By that she meant, “Someone who feels personally responsible for the welfare and growth of the company and will do whatever it takes.”

She explained that she wants people who are personally invested in the success of the company and are willing to go the extra mile.

You know the type she is talking about. The ones who stay late for days to make sure a deadline is met. The manager who picks up trash off the warehouse floor when he is walking around or steps up to help a customer when the line is too long. The customer service rep that stays on the phone after her shift has ended to make sure a customer is satisfied.

You will never hear a beam holder say, “That’s not my job.” If it helps the business succeed, a beam holder will take care of what needs doing at that moment, whether it falls within her job duties or not.

This person will also not say, “I don’t have time to do that.” If time is an issue, the beam holder will take responsibility for finding someone who can handle the task or project.

I look for those types of people too when I go into an organization because they are the ones who will help me pull it out of trouble. I refer to them as Super Stars in Game Breaking Positions. They aren’t hard to spot. In fact, I can generally tell within just a few minutes whether I’m talking to a beam holder or not.

These are the folks that have taken on additional responsibility for no extra pay when the company was downsized. These are the people who still show passion for the company they work for. Despite often being mistreated, unappreciated and expected to do more with less, they are still loyal to their companies and want to see them succeed.

I’ve encountered beam holders at all levels of an organization. Sometimes the CEO has pretty much thrown in the towel, but he has people in the warehouse who are still busting their butts every week to make the delivery schedule and customer service personnel who still do their best to handle the increasing customer complaints.

Sometimes beam holders may be the silent ones, initially hesitant to talk to me. It’s because they have been punished for speaking out before, or labeled difficult when they pointed out problems with the way the company was run. These people are sometimes the unhappiest because they know how the company could and should be run better. It bothers them immensely to see how far off track it’s gotten.

Beam holders are the people you want in your business — in good times and in bad. They will devote themselves to the company and do their best to see it succeed.

Come back for part two when I discuss how to find and hire beam holders for your business — how you can get those Super Stars in Game Breaking Positions.

 

 

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The Professional Advisors Your Business Needs to Hire

Welcome to part three of my three-part series on working with advisors. In week one, I discussed How to Find the Best Advisors for Your Business. Last week I shared tips on Getting the Most Out of Your Advisors. Today, I’ll talk about the professional advisors you should consider hiring.

Advisory boards can add a lot of value to your company when the members share their wisdom and experience with you. But to give your business its best chance for success, you’ll need to hire professional advisors as well. Here are just three that your business will need.

Accountant and/or Financial Advisor

You need a numbers person to work with you on your budget and determine tax implications of decisions for growth. A good accountant or financial advisor can also provide analysis of how your company is doing and ways to improve your financial situation.

A good CPA or accountant should also be on the lookout for fraud and ensure you have proper controls on how your accounts are handled. The accountant should also have a good relationship with your banker or lenders and can inspire confidence in them that your funds are being handled correctly.

Lawyer

Business owners and CEOs can, and do, run into potentially damaging legal issues all the time. A good lawyer can advise you on how to handle these situations and set up policies and procedures to prevent problems in the first place.

You will also need to consult an attorney to draft any partnership agreements you may enter into, file a patent, handle real estate transactions and advise you if you plan on buying or selling a business. Of course, if you are threatened with any lawsuits you need to hire an attorney immediately. It’s best to find one that specializes in the particular area where you need help.

Management Advisors

A good advisory firm can supplement your skill set and provide solutions to complex business problems. I recently joined the team at GlassRatner, which helps businesses manage through a business crisis or bankruptcy, plans and executes a major acquisition or divestiture and addresses any other difficult business situation. The firm also provides forensic accounting services and litigation support.

Other advisors you may consider include sales consultants, business development consultants and public relations professionals.

My final tip is to hire advisors sooner rather than later if your business is running into trouble. One of my more distressing clients was one whose business could have been saved, if only I had been hired earlier. I talk about this sports bar in the Midwest in my book, “How Not to Hire a Guy Like Me: Lessons Learned from CEOs’ Mistakes.”

This company had a large discrimination issue and filed bankruptcy without proper planning. If I had been involved earlier, I could have negotiated the discrimination issue, negated its demoralizing impact on the employees and advised against filing bankruptcy. We could have salvaged part of the company. Instead, they contacted me too late and they lost it.

Hiring the right advisors is worth the investment. They have the knowledge and experience to handle whatever issues your company is facing. And they are able to see solutions more clearly as they are not emotionally involved in the outcome.

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Getting the Most Out of Your Advisors

Welcome to part two of my three-part series on working with advisors. Last week, I discussed How to Find the Best Advisors for Your Business. This week I share my top tips on utilizing their expertise to foster the growth and success of your business.

  1. Be clear about your expectations and create accountability

A new advisor may have been planning on a phone call every quarter, while you envision monthly face-to-face meetings. In the article “How to Use Advisors to Supercharge Your Business,” Eli Portnoy writes about giving up some equity in his company to his advisors and getting nothing in return. “Our advisors were fantastic and really wanted to help. The problem wasn’t them, it was me. My advisors were brought on at random, and furthermore, I failed to create structure and accountability.”

Leveraging the lessons he learned the first time around, when he brought on new advisors he made it clear what he was looking for from them. He drew up a two-year contract that stated they would meet or talk on the phone every other week and have an in-person session or dinner once a quarter. If all obligations were met, they would receive equity in his company after the two-year period.

  1. Be honest with them

To get the most out of your advisors, you have to operate in an arena of mutual trust. That means you have to share the challenges you are facing and your financial situation accurately.

This may be uncomfortable at times if things are not going so well. But perhaps especially in bad times, your advisors can prove crucial to weathering a difficult situation by first forcing you to confront the issues.

I devoted an entire chapter to facing your harsh realities in my book, “How Not to Hire a Guy Like Me: Lessons Learned From CEOs Mistakes.” Failure to do so is one of the major mistakes I have seen CEOs make, time after time.

If you share your information honestly, your advisors can be the ones forcing you to face your harsh realities before it’s too late. Maybe you are having a cash flow problem and aren’t sure how to resolve it. One of your advisors may have dealt with a similar scenario and have suggestions on the best way to deal with the situation. You can’t get the best advice without revealing the true picture of the financial situation of your company.

Your advisors may have some other great ideas to share with you even when it’s not a time of crisis. Let’s say you’re having your most successful year yet. Your advisors may have ideas on how to build on and leverage that success.

  1. Listen to their advice

While this sounds like just common sense, I can’t tell you how many people I’ve dealt with who had ended up in dire financial shape and it wasn’t because they weren’t getting good advice. They just didn’t listen to it.

I read an article in the Wall Street Journal last week, “Tuning Out: Listening Becomes a Rare Skill.” The article cited a study done in 2011 in Organizational Behavior and Human Decision Processes that found that the more powerful the listener is, the more likely he is to dismiss advice from others.

You can gather the best advisors in your industry and share details about your business. But none of that will do a darn bit of good if you don’t actually follow it. These leaders are those that John Steinbeck was speaking of when he said, “No one wants advice – only corroboration.”

Finding the right advisors and working with them in the best way possible can make a huge difference in the success of your company. Eli Portnoy, the young man who made mistakes the first time around and then instituted structure and accountability, saw a huge difference in his company. “Thinknear took off within months of creating the new advisory board and structure. My personal weaknesses as a CEO became strengths and with the help of my advisors I was able to supercharge our trajectory.”

Advisors can make a big difference in your business, but there are still professional advisors you need to hire. For part three of this series, I’ll talk about those.

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Joining the Team at GlassRatner

I’ve been chuckling to myself about the rumors of my retirement that I discussed in a previous column, “No Desire to Retire.” I wanted to let you know that I’m embarking on an exciting new opportunity.

I’ll be joining the well-respected team at GlassRatner Advisory and Capital Group LLC as a principal effective July 1. GlassRatner is a nationally known financial advisory services firm. I was attracted to the integrity of the GlassRatner team members, its national platform and reputation, and the work the firm has done in providing solutions to complex business problems.

They seem to be excited to work with me, too. And they love “How Not to Hire a Guy Like Me,”which of course, is an effective way to win my loyalty.

It’s funny; this opportunity just presented itself a few weeks ago and we’re off to the races already. In my work as a turnaround authority, I’ve learned to recognize good opportunities for growth and success when I see them. I am excited and honored to be joining GlassRatner and believe we will both benefit from the partnership.

Another aspect of GlassRatner I found attractive is its reputation as a collegial firm and the way they function as a team. Look for some of those team members to be guest contributors to my blog. I’m sure you’ll enjoy getting to know them as much as I will.

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Tips for Dealing with Office Gossip

This is the second in a series on office gossip. In my last column, I wrote about how harmful office gossip can be to your business. This column focuses on how you can deal with it.

Office gossip can be harmful to your business and to the reputations of your managers and employees. It can cost you money in lost productivity and turnover when employees who don’t like the negative environment leave.

Here are a few tips on how to deal with it so your business can be a healthy, happy and productive place to work.

Set the standard

This is so important that I devoted a section of my book, “How Not to Hire a Guy Like Me: Lessons Learned from CEOs’ Mistakes” to it. As the head of a company, you must lead by example. It doesn’t matter whether you want your employees to emulate your behavior — they will.

Don’t talk about negative rumors about your competition or any of your vendors. If you hear others spreading rumors, request that they refrain from doing so.

Avoid the all-employee approach

Sending an email to all the employees or announcing at an all-company meeting demanding that office gossip stop will not work. The ones who are spreading the gossip will continue to do so, and those who are not engaging will wonder what they are missing, and may even start to gossip so they can catch up.

If you can determine the source of negative gossip, meet with those individuals one-on-one to explain the repercussions of their behavior and that further gossip will not be tolerated.

Create an environment of open communication and trust

This is my number 1 tip for stopping negative office gossip. If you create an open environment where employees trust the management and feel free to communicate with their supervisors, there is no reason to spread gossip.

You’ve probably heard the term “the mushroom treatment.” It’s when employees feel like they are kept in the dark, fed a lot of manure and when they are big enough, they are canned.

Although that term originated more than 40 years ago, many companies still operate this way. When I am brought in to run a company, one of the first things I do is talk to employees at all levels to get their opinions on what is happening and what needs to be done. More often than not, when a company is in dire straits, the employees are not getting the real story. They are being kept in the dark.

Guess what happens when employees know a company is struggling but no one is telling them the truth? They begin to manufacture their own perception of the truth from what little is being shared. That’s how the office gossip train is fueled. The less they know, the more they talk. And when your employees are engaged in a rousing game of “What Did You Hear Today?” guess what they are not doing? Their jobs.

When employees are left to play the guessing game, morale and productivity take a dive, putting your company in even more jeopardy.

Generally, when I take over a company, I am walking into a toxic environment of distrust. One of my most important jobs initially is to regain the trust of the employees, and I do that by making honest communication with them a top priority. It may take a while for senior management to regain their trust, but once we do, you’d be surprised what a difference it can make in turning around a company.

Employees gossip because they are kept in the dark and feel powerless. Telling them the truth, no matter how dire it is, can make them feel empowered.

As Will Rogers said, “Rumors travel faster, but it don’t stay put as long as truth.”

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Communicate, Negotiate and Delegate in a Turnaround

This week I’ll be in Jekyll Island at the Turnaround Management Southeastern Conference, where I’ll be on a panel called Titans of the Turnaround. I chuckle about being called a Titan, as I was for an article written about my book, “How Not to Hire a Guy Like Me: Lessons Learned from CEOs’ Mistakes.” I never played football for Tennessee.

But it has me thinking about the skills that I have found to be the most useful in my career in the turnaround business. These include the ability to communicate, negotiate and delegate.

Communicate

I’ve written several times about the need for communication, because it doesn’t matter how smart or visionary you are, if you can’t communicate to your employees you will not be a successful leader. As Lee Iacocca said, “You can have brilliant ideas, but if you can’t get them across, your ideas won’t get you anywhere.”

When I am hired as interim CEO or consultant at a company in trouble, I stress the need to senior management to communicate openly and honestly about the situation. I often have to work hard to open up lines of communications with employees at all levels, as they may have become accustomed to being kept in the dark.

Some employees work night shifts and may feel particularly left out of what’s going on. At one company, I hosted a midnight barbecue and chatted with the employees as I grilled hamburgers. In addition to enjoying my superb cooking skills, they left feeling listened to and informed.

As a “Titan” I also have to communicate effectively with everyone involved with the company, including lenders, vendors and customers.

Negotiate

I’ve written about my need to negotiate as the Turnaround Authority, which has earned me the nickname the Monty Hall of business. Every day is a game of  “Let’s Make a Deal” for me. You cannot be successful in the turnaround field without the ability to negotiate effectively with all interested parties.

In the negotiation process, I employ communication skills while always searching for creative solutions. Because I have not been involved in the company as it began to suffer financial difficulties, I can clearly see the situation, while the CEO has often become too emotional to determine and handle what needs to be done.

I worked with one company that had lost control of its brand and entered into licensing agreements with substandard manufacturers. It was embroiled in trademark issues and meanwhile had accumulated large debts.

I was able to renegotiate licensing agreements and default substantial licenses, getting the company back on track and focusing on its fantastic design department.

To read more about negotiation, please see my previous post, “A Key Ingredient to a Successful Negotiation.”

Delegate

I’ve seen it more times than I can remember in companies in crisis. A CEO who should be focusing his time and talent on getting his company back to financial health is instead working on tasks that could easily be handled by someone else. Usually it’s because he has not learned to properly delegate and let go of tasks that are not the best use of his time.

This inability to delegate is often one of the reasons the company has ended up in trouble in the first place. The CEO did not know how to let go of tasks or was micromanaging those that he had delegated.

All CEOs and business owners have to learn the art of delegation. That involves giving clear instruction on what needs to be done and when the deadline is. Another key is making sure you delegate the task to the right person.

The CEO needs to see himself as the catalyst to get the job done. He also needs to have the skills to communicate, negotiate and delegate.