Lessons for CEOs

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5 Tips for Successful Family Businesses

You’ve heard the definition of a dysfunctional family? One that has more than one member in it. How about if you take that dysfunctional family and try to run a successful business with it? Getting a new business off the ground is difficult enough, and adding the complications of family relationships can only make it that much tougher.

According to the Family Business Institute, only about 30 percent of family businesses survive into the second generation. About 12 percent are still around for the third, but only 3 percent make it to the fourth generation.

Here are a few tips to help your family business survive to the next generation.

1. Put the right people in the right jobs

This is a key component for the success of any business, but becomes particularly true for running a family business when you may feel pressured to hire Uncle Marvin for your open sales position because he just got laid off.

What if Uncle Marvin’s background is in accounting and he’s known as the family introvert? Just because a family member needs a job doesn’t mean they should have one in your company. Make sure you find the best people with the right skills for any position.

2. Hire outside help

In addition to needing an outside perspective on occasion, outside consultants can help with conflict resolution between family members and offer an unbiased perspective on needs the company may have. You’ve heard the expression, “Don’t air the family’s dirty laundry.” Well, that’s exactly what you need to do with consultants.

Don’t be afraid to tell them about your brother Joe’s absenteeism due to his alcoholism if he or she needs that information to make decisions about the future of your business.

3. Communicate regularly

Again, communication is critical for any business to success. Perhaps in family businesses you run a greater risk of miscommunication of key information if employees aren’t properly informed, as they are seeing each other outside of the office. Make sure that all employees understand the long-term goals and vision of the company and are well informed of any developments.

You may want to set up weekly or monthly company-wide meetings as a means to communicate and allow for questions.

4. Have the same standards for everyone

Nothing demoralizes co-workers faster than having different standards for employees. If your company has non-family members working for it, you especially need to pay attention to this one.

Don’t allow your son to take off every Friday afternoon for his ski lesson while others are left to cover for him, or promote family members at a quicker rate than others in similar positions. Have the same vacation policies and compensation guidelines for everyone.

5. Have a succession plan

I’ve written about this before in a previous column:  the greatest threat to a family business is the failure to plan and manage succession well. I can tell you from personal experience how important this one is. I encouraged my dad to take an offer of $5 million to sell his company. He refused. Fast forward ten years and dad, who now had dementia, had been swindled out of money and the company ends up being worth nothing.

For more tips on how to pick a successor, see my previous blog post on Filling Your Own Shoes.

Family businesses do thrive. In fact about 35 percent of Fortune 500 companies are family-controlled. You just need to pay attention to how your family members contribute to the success of yours.

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5 Mistakes to Avoid When Selling a Business

Most likely the biggest financial transaction you’ll ever be involved with, selling a business the right way is crucial to your future financial health and the continuation of a business that you’d like to see succeed.

Selling your business is literally, a Big Deal. Here are some mistakes to avoid when selling yours.

1. Identifying the best buyer early and negotiating only with that entity

Wow, that was easy. You’ve already found a buyer and now you just need to negotiate on price. You’ve told all the other potential buyers the business is sold. So many things can happen to derail a deal — problems with financing, inability to come to terms on the value of your company, negotiations that lead nowhere. Sometimes the buyer changes his mind and walks away from the deal.

photoA friend of mine has a big rock in his office with block letters on it that read, “Nothing is set in stone.”  Remember that when negotiating the sale of your business and keep your options open when identifying and negotiating with buyers.

2. Considering only the dollar amount when looking at offers

If this is a business you started, or a family business you took over, chances are you care a lot about its ability to thrive. And its reputation. As Warren Buffet said, “It takes 20 years to build a reputation and only five minutes to ruin it. If you think about that, you will do things differently.”

If you care about continuing the reputation you’ve built up for your company, take a deep dive into the culture and reputation of the companies looking to buy yours.

3. Handling the sale yourself

The saying goes that a man who is his own lawyer has a fool for a client. I would venture to say the same thing about someone trying to sell his business on his own. You need to hire business professionals, which may include tax lawyers, business advisors and a business broker. Some people try to save money, figuring they can handle the whole thing on their own. Respect your business and your time enough to hire someone to get the best possible deal for you.

4. Setting a price based on what you think your company is worth

Although you should be aware of a general market value of your business, to get its true worth you need to go through a thorough valuation process. Hey, maybe you’ll be pleasantly surprised and find out it’s worth more than you thought.

5. Not seeing your business realistically

In a recent Dove ad, women described themselves to a forensic artist who then produced sketches from their description. The resulting sketches bore little resemblance to what the women really looked like, and were actually much less attractive. (The video has been watched 55 million times on YouTube!)

Yes, that’s on a different topic about women and their self-images. But it’s a good illustration that we don’t always see ourselves realistically. And we don’t always see our businesses for what they are either.  Dealing with daily crises and all the things that go wrong, we may sometimes overlook all the positive aspects of our business. Or on the opposite spectrum, we may be in denial about the underlying problems that will affect its value.

Jim Collins, author of “Good to Great” said, “The challenge is not just to build a company that can endure; but to build one that is worthy of enduring.”

Make sure your business endures long after you’ve moved on.

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He Who Burns Bridges Better Be a Good Swimmer

The son of a good friend of mine was working his first job, for a bank. He had problems with his new boss and finally decided to leave. He apparently did so in a rather ungracious manner with a few choice remarks to his boss.

Five years later, his former bank bought the bank where he then worked. His boss still worked there. Guess who was the first to lose his job?

burning-bridge-570x234We all remember the story of Steven Slater, the JetBlue flight attendant who dramatically burnt his bridge. He lost his patience one day, cursed out the passenger who bonked him on the head with a suitcase over the plane’s PA system, grabbed two beers and escaped down the inflatable slide he had released. Those were the last two beers he ever enjoyed as a flight attendant.

The saying, “Don’t burn your bridges behind you” is believed to be from the military originally. When heading into battle, an army needs to leave a way to retreat if necessary.

In the business world, it means leave every situation in good standing. This is good advice not only because it’s the right thing to do, but also for pragmatic reasons, you never know when that burnt bridge can get you in trouble. As the poet, Dylan Thomas wrote, “When one burns one’s bridges, what a nice fire it makes.”

I know how tempting it can be. You’ve been miserable in a job for years, overworked, underpaid and unappreciated by a horrible boss. You finally land a new job and boy, wouldn’t it feel fantastic to tell your soon-to-be-former-boss exactly what you think of him?

Yes, it would feel fantastic. For a few minutes. Then you are left with possible repercussions you can’t even foresee that could happen months or even years down the road, like my son’s friend.

One mistake I’ve seen young people in particular make is believing that if they live in a large city they can get away with burning a few bridges along the way. In a city of several million, no one will know, right?

Wrong. Although a city may be huge, the people involved in a particular industry run in a much smaller circle. You never know who knows whom and when your name might come up.

On the plus side, if you do maintain a good reputation and leave previous jobs on good terms, that could also benefit you in ways you don’t anticipate. When many business owners are looking to fill jobs in their companies they often ask their peers if they know of anyone looking for work.

As I taught my children and tell young people I work with, the business world runs on relationships — they are the fuel that feeds your business. If possible, maintain good relationships with everyone you work with.

As one anonymous person said, “Burning bridges only makes it harder to get around and cover more ground.”

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How to Lay Off Employees the Right Way

In my last blog post I shared some lay-off horror stories. One company conducted a fire drill and then told its employees over a loudspeaker that half the company was being laid off. They should each try to get back in the building and if their key cards didn’t work, that meant they were no longer employed. That must be the worst fire drill on record that didn’t actually involve a fire.

Laying off people in the right way is crucial to maintaining the morale of the remaining employees and reinforcing the reputation of the company as a good place to work. Business reasons aside, it is the right thing to do for someone who has been devoting their working hours to your company.

What some executives fail to see is that layoffs are not just about the person or people who are being let go. They are about your company’s reputation and the morale of the people being left behind.

url-1In 2008 Zappos.com had to lay off eight percent of its employees due to the downturn in the economy. Rather than keep it quiet, CEO Tony Hseih turned to social media to explain why the layoff was necessary. He tweeted and blogged about it, explaining how the company was compensating each employee with health insurance coverage and a severance package.

On November 6 he sent an email to all Zappos.com employees that explained exactly what steps the company was taking and why, how hard the decision was and that it was offering employees more than two weeks of severance pay. That email included these paragraphs:

“I know that many tears were shed today, both by laid-off and non-laid-off employees alike. Given our family culture, our layoffs are much tougher emotionally than they would be at many other companies.

I’ve been asked by some employees whether it’s okay to twitter about what’s going on. Our Twitter policy remains the same as it’s always been:  just be real, and use your best judgment.”

He was transparent, communicated honestly with his employees, demonstrated that he trusted them, and actually generated goodwill among his employees and his customers in the midst of the layoffs. That is an example of the right way to handle a company-wide layoff.

Here are four steps to laying off a person the right way. Of course, with any layoffs you must be sure to follow guidelines set by your HR department. You should also have input from the legal department and the HR department for each layoff.

• Handle the layoff in person.

Whoever is handling the layoff, usually that person’s supervisor, should meet with the person, along with a representative from HR, in private and deliver the bad news upfront. Don’t prolong the inevitable with lengthy discussions about the economy, the current market or recent losses the company has suffered. Deliver the news quickly. If your company has been upfront and communicating as it should, the employee should have known that things were not going well.

If a HR representative is not available, make sure there is a second person in the room to act as a witness.

• Treat the person with respect.

Whoever is handling the layoff should be aware of the guidelines set by HR and should deliver the news in such a way for the person maintains his dignity. Stay focused and offer a clear explanation for the layoff within guidelines set by your HR department.

• Listen with boundaries

It’s uncomfortable to lay someone off and deal with the emotional response. While you may want to usher them out of your office as soon as possible, it will help the employee leave on a better note and send the employees who are staying a positive message about how you treat people if you take the time to listen. You may not like or agree with statements the employee makes, but it’s important for the employee to felt like he was heard and you paid attention.

• Offer encouragement

If possible, offer some assistance with references or any assistance or outplacement services your company has. Share information about support groups or information centers that may help the employee with the next steps in his career.

Laying off someone is never a pleasant task. But sometimes it is the only way to save the company and employment of hundreds, if not thousands of other people. And handling it in the right way will make everyone feel better about the process.

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How Not to Lay Off Staff

The chairman of a network of local websites in the Northeast sent the following email to his staff on a recent Friday afternoon. It was a follow-up to an email they received earlier that day informing them that the CEO was resigning.

“Monday morning we will share with you the news about where we’re going and how we’re going to get there. The news is good—but you’ll need to sit tight while we finalize our plans. Check your email about our company-wide phone conference early Monday morning.  …I am pumped about the prospect of working with you to build a great company.”

urlIt’s nice to get a positive, hopeful email from your chairman in our still-struggling economic times, isn’t it? But what happened on Monday could hardly be classified as good news.

That morning employees at Daily Voice were told that it was shutting down 11 bureaus in Massachusetts and laying off everyone in those offices with no severance pay. The Chairman had flat out lied to the employees.

That’s just one example of how not to handle a layoff. You’ve probably heard plenty stories of bad layoffs. There was the woman who received a FedEx package at home with her severance in it. Problem was no one told her she was being laid off. Or the woman who was lying in a hospital bed when her boss thoughtfully came to visit, bringing her a bouquet of flowers. And a severance check.

Another woman named Sylvia found a document, available for public viewing on the company’s shared hard drive, called SylviaFired.doc. She read it and spent her last few hours at the company correcting its many spelling and grammar errors. If you’re being let go like that, at least all the words should be spelled correctly.

At one small ad agency where a husband and wife both worked, the husband got laid off. Then a few hours later his wife was laid off as well because the creative director thought she would be uncomfortable working in the office that laid off her husband. More uncomfortable than losing both incomes in one day?

One of the worst stories I’ve heard is about a company that evacuated hundreds of employees for a fire drill. They were all standing outside when a person on a loudspeaker said, “Due to the ongoing recession and bad business climate, the company is laying off 50 percent of its staff. So when the announcement finishes I ask all of you to move back to the building. If your employee card does not give you access to the building, it means you have been laid off and will not be allowed inside the building. All of your belongings will be sent to you.”

That sounds like the premise of a horrible reality TV show, but in this case half the people get kicked off the island.

In my position as The Turnaround Authority I’ve had to lay off hundreds of people. It’s never easy and I do it with full recognition of how losing their jobs will affect the employees’ lives and those of their families. But sometimes it is the only way to save the company and employment of hundreds, if not thousands of other people and their families.

While unpleasant, there is a right way and a wrong way to lay off someone.

Stay tuned for my next blog post for the right way to lay off an employee. And there are no fire drills or bouquets involved.

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The Top Reasons That Start-ups Fail

People in the United States love to start new businesses. In 2009, the last year that figures are available, 552,600 small businesses were started. And 660,900 shut down. These are according to numbers from the U.S Small Business Administration.

There are a lot of reasons businesses fail. Like anticipating a market that just doesn’t materialize. Pets.com poured money into its website that sold pet supplies. The company spent millions on an extensive marketing campaign with a popular sock-puppet mascot, whose name, according to an interview on CNN was Pets.com Sock Puppet.  It made an appearance in the 1999 Macy’s Thanksgiving Day Parade and even starred in a commercial in the Super Bowl in 2000.

(Here’s a fun fact: In January 2000, during the dot-com boom, 19 online start-ups bought Super Bowl ads. Eight of them are no longer around. Only one had an ad in Super Bowl XLV. Got a guess who it was? I’ll give you a hint — their ads feature talking babies.)

A cute mascot and a multi-million dollar marketing campaign doesn't guarantee a company's success.

A cute mascot and a multi-million dollar marketing campaign doesn’t guarantee a company’s success.

While people enjoyed the Pets.com advertising, the market just wasn’t there for online pet supplies. Launched in 1998, Pets.com went from an IPO on NASDAQ to liquidation in 268 days. At least Pets.com Sock Puppet found work. He moved over to BarNone, replacing Fran Tarkenton in its advertising. If you’ve ever lost a job, just console yourself with this thought. At least you weren’t replaced with a sock puppet.

In my work with failing companies, I’ve seen many other reasons start-ups fail. Here are just a few of them.

• The entrepreneur is inflexible during the start-up process.

Products, product lines or services will most likely morph or change as they become further developed in response to consumer demand. Some entrepreneurs are unwilling to embrace the necessary changes and end up standing in the way of their own success.

• The entrepreneur doesn’t have enough in reserve or doesn’t borrow enough to keep the business going.

When changes occur it can take longer for a company to break even than the business plan indicated. More time means more money. You may have to keep people on the payroll longer and incur more manufacturing and development costs. The entrepreneur either has to have a large enough reserve to cover it, borrow more money than he thinks he needs initially or bring in new sources of money in time to cover the additional expenses. Failure to do so means the business can become one of the approximately 1/3 of all start-ups that fail within the first two years.

The number one piece of advice I give to anyone considering a start-up: No matter how much money you think you need for the venture — double it! Every start up needs a contingency fund.

• The entrepreneur has no contingency plan.

With most start-ups people leverage a lot of their personal assets to get the business going. While I never advise betting everything you own on the success of a new business, if an owner does put a lot of his personal assets into a business, what happens if he gets in an accident? What if he becomes disabled and unable to work, or dies? He needs to have disability and life insurance policies so his family is not left with no viable business and a mountain of debt.

• The entrepreneur fails to bring in a partner when necessary.

Whether it’s for an additional source of funding or because a partner has a needed area of expertise, there can be good reasons to bring a partner into a business to ensure its success. A piece of pie is better than no pie.

If entrepreneurs understand why most businesses fail, they can take steps to ensure that theirs is one of the businesses that succeeds. As author Maria Robinson said, “Nobody can go back and start a new beginning, but anyone can start today and make a new ending.”

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Companies Need to Own Up to How They Are Doin’

“How’m I doin’?” was one of the phrases that Ed Koch was famous for. The infamous former mayor of New York City died last week, and I doubt we’ll ever see his like again: a politician who speaks his mind and damn the consequences.

One of his most entertaining quotes is, “If you agree with me on nine out of 12 issues, vote for me. If you agree with me on 12 out of 12 issues, see a psychiatrist.”

But the one quote I read by Koch that resonated with me in my position as a turnaround authority is, “I’m the sort of person who will never get ulcers. Why? Because I say exactly what I think. I’m the sort of person who might give other people ulcers.”

Ed Koch, outspoken former mayor of New York City, died last week at the age of 88.

Ed Koch, outspoken former mayor of New York City, died last week at the age of 88.

Now, I hardly go around trying to give people ulcers. But I am hired to give my expert opinion on what needs to be done to turn failing companies around. And that often involves telling people things they don’t want to hear.

In my new book, “How Not to Hire a Guy Like Me,” (available in a few weeks on Amazon.com), I have devoted an entire chapter to how CEOs and business owners of failing companies need to face their harsh realities.

One of the biggest mistakes CEOs make — whether or not they are in trouble — is refusing to recognize challenging situations. They need to have contingency plans for worse-case scenarios and act on them if those scenarios arise.

Sometimes I don’t need to dig too deep to discover the problems — they may be staring a CEO right in the face. But he has been refusing to recognize them because doing so would mean having to handle them. Though tackling a big problem might seem taxing, I assure you that not dealing with it is worse.

Here are just a few of the harsh realities I address in the book:

• Markets are changing and evolving and your business is not. If you’re out of ideas and your new ones aren’t working, it’s time to confront your harsh reality. Don’t get stuck on played-out ideas, especially if you’re in the technology industry.

• Your employees are losing faith in you and your company. If your employees show up in the morning looking like they’d rather be washing dishes at the local diner than work for your company, you’ve got a problem you need to deal with.

• You have lost track of your personal guarantees. When I ask a CEO or business owner about any personal guarantees they have that are still in force, they often tell me they don’t have any. That’s a big red flag to me. Personal guarantees come in the form of business loans, American Express business cards, and agreements to process credit cards, just to name a few. It is crucial that you know about all your personal guarantees, so if your business does go under you won’t lose everything you have.

These are just a few of the many harsh realities I force people to face when they are dealing with a failing or faltering company. You can’t anticipate all the issues your company may face, but you do need to be prepared to acknowledge them and react quickly and nimbly.

Ed Koch left his mark on New York City during his 12-year tenure as mayor from 1978 to 1989 and among his other accomplishments, is credited with restoring the city’s fiscal integrity. That’s one of my goals as well, when I work with companies as a turnaround authority. And I try hard to not give anyone ulcers.

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Trust Your Gut

I enjoy reading “The Ethicist” column in the New York Times each Sunday. People ask the columnist, currently Chuck Klosterman, questions like “Should I get a flu shot so others don’t get sick?” and “Do I have an ethical obligation to stop patronizing a business that has been in trouble for employing undocumented workers?”

Some of the questions are tough and I’m glad I don’t have to answer ones that address issues like problems with cat custody and which of two brothers should donate a kidney to their dad.

url-1Fortunately, in my business, I’m rarely faced with what I’d call ethical dilemmas. While I do see plenty of questionable ethics, for me they are rarely dilemmas because the answer is invariably clear on what course of action to take.

I mentioned in my most recent column, “Trust Your Gut,” that I turn down work if I am asked to do something unethical. I have never regretted it.

When you consider what is at stake in involving yourself in something wrong, it’s an easy choice. First, it’s wrong. And secondly, why would I risk my reputation for a short-term salary, no matter how large?

I subscribe to what a former client, Henry Kravis, once said, “If you don’t have integrity, you have nothing. You can’t buy it. You can have all the money in the world, but if you are not a moral and ethical person, you really have nothing.”

In one case I was interviewed to take over as president of a large healthcare business. The previous president had been fired when the board found out that they had overbilled Medicare and Medicaid to the tune of several million dollars.

I knew I had the job, as I was the only person they were talking to and I knew people on the board. The position would pay a lot of money.

My advice was that they had to be up front about the overbilling and develop a plan to pay it back. When I asked how long it would take to pay the money back, they said they had estimated two to three years.

I said, “Go to Medicare and Medicaid, tell them what has happened and that you have fired the president and hired me and then present the plan on how we will pay them back.”

Their response? No. They had decided that the downside of admitting the problem was too great, so they did not want to notify anyone and weren’t planning on paying the money back. But they would bill correctly going forward.

I was stunned. My initial response, which I may or may not have uttered aloud was, “Are you crazy?!”

They said, “This is what we are going to do. We want you to start Monday and we need your commitment that you will follow our plan.”

While they saw a path out of their troubles that allowed them to keep millions of dollars of stolen taxpayer money, I saw a group of people taking a very bad situation and making it much, much worse.

Beyond the ethics of the situation, had I been president of that company when the government found out, I would have been held responsible. The choice was an easy one.

In the ensuing years I kept up with what happened to the company. It wasn’t pretty. The government found out about the overbillings and sued the board of directors, CEO and the CFO. They also lost their licenses.

It’s a sad story, but hardly an uncommon one. And I didn’t need to write to “The Ethicist” column at the New York Times for an opinion on what to do.

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Trust Your Gut

The freelance writer is a man who is paid per piece or per word or perhaps.
— Robert Benchley

In my job as a Turnaround Authority, I’m just like any other freelancer or contract worker. If I don’t work, I don’t get paid. I enjoy holidays and vacation time just as much as the next guy, but my bank account doesn’t grow during my time off.

I’ll go to great lengths to get new business. I once flew to Paris on a day’s notice at the request of a former client who said he needed me to meet face-to-face with someone at a manufacturing operation where he was experiencing a problem.

But there are other times when I’m offered work a lot closer to home. Work that would pay really well. And I turn it down.

Here are a few of the reasons I turn down work.

• I’m being asked to do something illegal or unethical. Not agreeing to do something illegal is an obvious one. But the ethical area is not always so clear cut to people. (I have a great story for that one that I’ll share later.)

• I don’t think the person trying to hire me is really committed to making the changes that will be necessary to meet the desired goals. Sometimes it’s someone who has a big ego and I can tell he or she won’t want to implement the changes I’ll be suggesting. I don’t want to set myself up for failure.

• I sense a personality conflict. I get along with just about everybody, but every now and then I’ll meet someone and I can tell right away that our relationship will not be smooth sailing. Many of my jobs involve working closely with key personnel at a company and it’s much easier to accomplish our goals (and more enjoyable) if we have good working relationships.

• I don’t trust the person who is trying to hire me. Sometimes this is based on just a sense I get about someone when I speak with him or her on the phone or meet with them in person.

Other than being asked to do something illegal or unethical, the rest of these reasons are pretty much based on my instinct. After almost 30 years in this business, I feel like I’ve learned to read people pretty well.

It really comes down to one thing: I trust my gut. If I make a decision against what my gut tells me to do, 99 percent of the time it turns out badly.

George Zachary, a partner with Charles River Ventures who has had more than $1 billion in returns on investments in companies that include Twitter, Trulia and Shutterfly, believes in trusting his gut too.

“Listening to my gut is the right thing to do for me. It doesn’t mean it’s going to work out.  But it does mean that’s what I should follow,” he said in an interview recently. “That’s my passion. When I’ve done that it has worked well. When I’ve followed my brain and not my heart it’s resulted in disaster and failure every time. I’ve had no success operating from making a rational decision or a decision based on fear. It’s all come from listening to my gut and intuition.”

The late Steve Jobs shared a similar philosophy during his Stanford Commencement speech. “You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.”

It always works for me as well. My gut told me to go to Paris for a three-hour meeting. And that was the right decision. I didn’t make a lot of money on that trip — I only billed him for the time I spent in the meeting. But 18 months later when that client needed help again? He called me.

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Any Time of Year is Good to Express Appreciation

I know a CEO of a large security services company who began a tradition when his company was first founded. Every year he wrote a card to each employee during the holidays, expressing his appreciation for that person’s contribution to the success of his company.

As the company grew larger and larger, he kept up the tradition. He had to start earlier in the year, and may have enlisted others to address the envelopes, but he never quit writing those cards.

envelope and noteI’m sure some of you are shaking your head already. “Why should I thank them for doing their jobs?” you may be thinking. Or, “We thank all our employees twice a month. It’s called a paycheck.” Or you may think that no one thanks you, so why should you be bothered to thank others?

It’s true that criticism is much more prevalent in the workplace than appreciation. It’s partly human nature to point out the negative and leave positive actions unrecognized. And a lot of managers don’t believe in showing gratitude or just feel awkward about it.

Jack Welch is the former Chairman and CEO of General Electric, now an author and founder of the Jack Welch Management Institute. One of the tenets of his leadership philosophy is “Lead by Energizing Others, not Managing by Authority.”

He believes in making people passionate about their jobs and prefers inspiration to intimidation. Part of this leadership lesson includes letting others know exactly how their efforts are helping the organization and sending handwritten thank-you notes to colleagues and customers.

There are even sound business reasons for doing so. Ones that contribute to your bottom line.

In a recent article in the Wall Street Journal online about showing appreciation at the office, it was reported that more than half of human-resource managers say showing appreciation for workers cuts turnover, and 49 percent believe it increases profit.

Dr. Noelle Nelson, a consultant and clinical psychologist, wrote a book called “Make More Money by Making Your Employees Happy.” In the book, she cites a study from the survey research consultancy Jackson Organization, (since acquired by Healthstream, Inc.), that shows, “Companies that effectively appreciate employee value enjoy a return on equity and assets more than triple that experienced by firms that don’t. When looking at Fortune’s ’100 Best Companies to Work For,’ stock prices rose an average of 14 percent per year from 1998-2005, compared to 6 percent for the overall market.”

Increased profit, less turnover and a more pleasant, positive work environment. All from showing employees a little appreciation.

One way to express appreciation is with a personal handwritten note sent to the employee’s home address. In the note, cite a few of that person’s contributions over the past year.

If that isn’t possible, at least consider rewarding all the employees at your company. Take an example from Apple. In 2011, the new CEO, Tim Cook, gave all the employees paid vacation during Thanksgiving. In a memo he wrote, “In recognition of the hard work you’ve put in this year, we’re going to take some extra time off for Thanksgiving. We will shut down with pay on November 21, 22 and 23 so our teams can spend the entire week with their families and friends.”

You may not be able to shut your entire office for three days to show your appreciation, but consider an afternoon off or treat the office to lunch one day, any time of year.

In fact, any gestures of appreciation you make at times other than holidays often get more attention.

Joey Reiman, CEO and founder of BrightHouse, gives all his employees March 4 off every year. He calls it, “the day to March Forth on our dreams.”

Voltaire was probably not talking about company profits with this quote, but it is appropriate in an office setting too: “Appreciation is a wonderful thing. It makes what is excellent in others belong to us as well.”