Tips for CEOs

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Inspiration for CEOS and Business Owners From Our Founding Fathers

They were lawyers, farmers, merchants, writers and physicians. Those are some of the professions of our Founding Fathers, a topic I wrote about in “Professions of Our Founding Fathers.” Some were wealthy. Some lost everything during the Revolutionary War.

Thomas Jefferson left behind a mountain of debt when he died on July 4, 1826, the 50th anniversary of the signing of the Declaration of Independence, which he primarily wrote.  His rival John Adams, who died just hours later that same day, died free of debt and the owner of 275 acres of land.

No matter their financial situations, these men were successful in creating a new country, one with the largest economy in the world. At $18 trillion, the economy of the United States is close to one-quarter of the economy of the entire world.

As we approach the 241th celebration of that fateful day in Philadelphia, when 13 colonies started the process to create our country, here are some quotes from our Founding Fathers that can inspire any business owner or CEO along with some of their beliefs I find to be self-evident.

founding fathersThey believed in hard work and persistence.  

“I’m a great believer in luck, and I find the harder I work, the more I have of it.” – Thomas Jefferson

“Diligence is the mother of good luck.” – Benjamin Franklin

“Perseverance and spirit have done wonders in all ages.” – George Washington

“Energy and persistence conquer all things.” – Benjamin Franklin

“A people…who are possessed of the spirit of commerce, who see and who will pursue their advantages may achieve almost anything.” – George Washington

“By failing to prepare, you are preparing to fail.” – Benjamin Franklin

“Applause waits on success.” – Benjamin Franklin

They believed in keeping their minds sharp and continually learning.

“Old minds are like old horses; you must exercise them if you wish to keep them in working order. – John Adams

“An investment in knowledge pays the best interest.” – Benjamin Franklin

“Tell me and I forget, teach me and I may remember, involve me and I learn.” – Benjamin Franklin

They believed in the power of principles, confidence and reputation.

“It takes many good deeds to build a good reputation, and only one bad one to lose it.” – Benjamin Franklin

“Associate with men of good quality if you esteem your own reputation; it is better to be alone than in bad company.” – George Washington

“The circulation of confidence is better than the circulation of money.” –– James Madison

“Those who stand for nothing fall for anything.” – Alexander Hamilton

“One man with courage is a majority.” – Thomas Jefferson

“In matters of style, swim with the current; in matters of principle, stand like a rock.” – Thomas Jefferson

“Tis more noble to forgive than to revenge an injury.”  – Benjamin Franklin

They recognized that we the people are only human and it’s important to forgive.

“A fondness for power is implanted, in most men, and it is natural to abuse it, when acquired.” – Alexander Hamilton

“I never expect to see a perfect work from imperfect man.” –  Alexander Hamilton

I’ll close with one of my favorite quotes from Thomas Jefferson, as I make a living as a consultant and turnaround authority. It’s always good to seek help on matters where you need it.

“He who knows best knows how little he knows.”

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The Top (Self-Serving) Reason You Need to Keep Your Employees Happy

 

 

Why should I thank my employees for coming to work? Why do we need employee appreciation events like lunches, dinners and parties? I gave them a job, which they are lucky to have these days. Isn’t that enough?

You may have heard these sentiments expressed by CEOs and business owners. Or perhaps you’ve had similar thoughts yourself. Isn’t every two-hour lunch event decreasing your employees’ productivity and costing your business money?

The answer to that is yes. But if these events help keep your employees happy and prevents them from leaving, you are saving money. A lot of money when you consider the high cost of turnover for filling any one of those jobs.

You can find out just how much that cost is with this Turnover Calculator  from The Predictive Index, a workforce assessment company.

This six-step calculator takes into account items such as the cost of covering the position during the time it is vacant, the hiring manager’s time, advertising for the position, resume screening, company time spent interviewing and background checks.

Other costs include the time to onboard the new hire and time for that person to obtain full productivity.  (To obtain the full report on this site, you will have to give your name, company and email at the end. There are other online calculators available as well.)

A study done last year by the Society for Human Resource Management, the 2016 Human Capital Benchmarking Report, concluded the average cost-per-hire is $4,129. And that doesn’t include the additional cost associated with onboarding the new hire.

Whatever the final figure is, it’s indisputable that losing an employee is expensive. So, next time you find yourself concerned about the cost of yet another employee outing or party, remind yourself that if that event helps keep people happy and engaged, it’s a bargain for your business.

The good news is the biggest thing you can do to help retain employees is also the simplest. Show appreciation. Say thank-you. These simple gestures can contribute to your bottom line as well. In an  article in the Wall Street Journal 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.

To read more about how appreciation helps and recognition needs to extend beyond the paycheck, please see my blog Any Time of Year is Good to Express Appreciation.

Here’s some further reading on ways to retain your employees.

How Loyal Employees Contribute to Your Bottom Line
This is a two-part series on the importance of developing and maintaining loyal employees. Part one explores why every company should focus on having loyal employees and how doing so contributes to its revenue. Part two offers tips of how to develop loyal employees.

Work-Life Balance Key to Recruiting, Retention
This two-part series is on the growing importance of offering a work-life balance to employees in your company. Having a work-life balance was ahead of money, recognition and autonomy for more than half the people surveyed in a study done by Accenture in determining whether or not they have a successful career. Part two, Work-Life Balance, the #1 Thing to Offer, discusses the one critical component your workplace must have to keep employees.

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CEOs Didn’t Start with Fancy Jobs, And Your Kids Don’t Have to Either

As a former peanut seller, I know how much I learned from hawking those bags of goobers at Atlanta Crackers games as a young boy. I also learned many lessons from being a bag boy, babysitter, gas station attendant and a paper boy.

I think of those days every time I see parents stressing over their children finding the perfect summer job, believing it will be the key to their future success. While I understand their concern, I know the most successful people didn’t start as an intern in a fancy office.

One of my first jobs was selling peanuts at Atlanta Crackers baseball games at the Ponce de Leon Stadium, now replaced with a shopping center. The Sears building in the background is now Ponce City Market.

They were baby sitters, fast food employees and vacuum cleaner salesmen. Like me, Warren Buffett started as a paper boy. In my blog, Want to Be a CEO? Any Job Can Be a Good Start, I wrote about the early jobs of the CEOs of Netflix, Dell and Yahoo. None of them included an office with a desk.

Reading about their first jobs is one of my favorite parts of the interviews with CEOs and founders in “The Corner Office” column in the New York Times on Sundays. Here are just a few of my favorites:

Lisa Gersh, former Chief Executive of Goop: After realizing she wanted more than the $1 an hour she got for babysitting, as a preteen Gersh went to classes and got a degree in umpiring girls’ softball. She blew the whistle during games on girls older than she was for $5 an hour.

Mark Nathan, CEO of Zipari: At the age of 10, he took a wheelbarrow and collected old newspapers. Then he’d tie them into bundles, throw them in the back of a station wagon and take them to an industrial market that recycled newsprint. He got $15 for a load.

Deryl McKissack, CEO of McKissack & McKissack: Descendants of slaves, McKissack’s family owns the oldest African-American architectural firm in the country. Deryl began making architectural drawings when she was six.

Ashton B. Carter, former secretary of defense. Carter worked at a carwash when he was 11, but after complaining that he wasn’t included in the tip distribution, got fired. Then he got a job at a Gulf gas station and also worked as an orderly in a hospital. His duties included taking dead people to the morgue.

Yuchon Lee: CEO and co-founder of Allego. In kindergarten Lee resold fancy stickers his father brought back from Japan. In his later years in elementary school, he sold silkworms.

If your child doesn’t end up with a fancy office job this summer, remember that valuable lessons come from any job. And they may have a great “first job” story to tell in their later years when people ask about their success.

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Funny, But True Stories: Keep Your Girlfriend Out of the Picture

Cheating on a spouse has been the downfall of many a business owner or CEO. Some of these stories aren’t too surprising. Consider the case of the founder of the famously hacked website Ashley Madison, created specifically to make it easy for people to cheat on their spouses. At one time the cheaters’ website claimed earnings of $115 million and a membership of 39 million around the world.

So can anyone feel surprised when it was revealed that founder Noel Biderman had cheated on his own wife, despite his claims to have a strong marriage? He called himself the King of Infidelity and in June 2014 when asked if he had ever cheated on his wife, he said, “Not yet.”

He got outed by the hackers, as did thousands of others whose extra-curricular activities were uncovered. Many divorces and some suicides have been linked to the hack.

Obviously it’s not good for anyone to cheat. Not on their taxes, not on their spouses. But it’s even more critical when you’re a CEO or business owner. You stand to lose a lot more than your marriage.

Yet, it happens. All the time. Take the case of the married president of a pipe manufacturer I worked with. In addition to running his business, he wanted to craft a racer with an innovative design.

He was successful and was asked to be on the cover of a prestigious industry magazine. Sounds great, right? Except when the photographers came to shoot the cover, his girlfriend was there, in her revealing bikini. Did he ask her to make herself scarce for a bit? He did not. And who shows up in the background on the cover with him? Yep, the girlfriend in the bikini.

It didn’t take long for his wife to figure out what’s up. And oh yeah, her husband had started the business with her father’s money. She filed for divorce and he lost control of the company. I’m not sure what he did with that magazine cover, or whether he got to keep that racer or not.

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Want People to Work for You? Make Them Feel Heard

They have 14,000 employees. And more clamoring to come on board.

Under Armour was recently included on LinkedIn’s U.S. list of Top Attractors, the top 40 companies at attracting and keeping the best employees. In an article referencing the inclusion, “To Thrive at Under Armour, You Have to Answer Kevin Plank’s Three Questions,” I found out one of the reasons why more people want to join the ranks at the sports clothing and accessories company with close to $4 billion in revenue.

The three questions management is encouraged to ask after every meeting or conversation are:

  • This is what I heard
  • This is what I think
  • This is what we are going to do

The goal of the questions, Kevin said, is to make sure you heard and understood what people said. With this method you don’t waste time on miscommunication, you facilitate buy-in and people feel their ideas have been heard, a huge factor in employee morale and retention.

My favorite method for clear communication is the whiteboard. I’m a huge fan of the whiteboard, even writing a whole chapter on its use in my book, “How Not to Hire a Guy Like Me: Lessons Learned from CEOs’ Mistakes.”

For more reasons I love the whiteboard, please read my post “The Value of the Low-Tech Whiteboard in a High-Tech World.” Good luck with your new and improved communication.

 

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3 Reasons You Want More Women on Your Board

It’s a man’s world. At least in the board rooms of Fortune 500 companies, where women continue a pattern of holding less than 17 percent of corporate board seats. Compare that to other countries, some of which are so concerned about the lack of females on boards that they have set quotas. These countries have set quotas of 40 percent and have come a long way toward meeting them.

The top five countries in terms of percentage of female representation are:

Norway: 35.5

Finland: 29.9

France: 29.7

Sweden: 28.8

Belgium: 23.4

Germany hasn’t fared much better than the U.S., with just 18.5 percent of female board members. However, it recently introduced a quota of 30 percent by 2016.

While mandating quotas for U.S. companies may not be the answer, it’s time for companies to take a good look at their numbers and what having more women on the board could mean for them.

Here are three reasons you should consider adding more women to your board.

  1. Having women on your board is good for your bottom line

A study done by Catalyst, a non-profit organization for women in business, found that Fortune 500 companies in the top quarter of number of female board members outperformed those in the lowest quarter with a 16 percent higher return on sales and 26 percent increase on invested capital.

These numbers increased to 84 percent higher return on sales and 60 percent increase on invested capital for companies with sustained high representation of women on their boards.

A study on decision-making was conducted by Chris Bart, professor of strategic management at the DeGroote School of Business at McMaster University, and Gregory McQueen, a McMaster graduate and senior executive associate dean at A.T. Still University’s School of Osteopathic Medicine in Arizona, and published in the International Journal of Business Governance and Ethics.

For their study they surveyed 600 board directors on how they made decisions. The results showed that while men prefer to make decisions following rules and tradition, women are more likely to consider the rights of others and to take a collaborative approach to decision-making, which translated into better performance for their companies.

  1. Having women on board can decrease your company’s chances of going bankrupt

A study done by Leeds University Business School found that having just one woman on your board could cut your risk of bankruptcy by 20 percent. Having two or three members lowered your chances even more.

The study involved 17,000 companies in the UK that went insolvent in 2008. The results were published in an article in The Times with the title “Higher Heels, Lower Risk: Why Women on the Board Help a Company Through Recession.” Unfortunately, this one didn’t seem to be available online as I was intrigued to read more.

  1. Having women on your board can result in less fraud, corruption and scandal

This from a recent article on thinkprogress.org, “Appointing Women to Company Boards Helps Avoid Scandals, Fraud and Corruption.”

MSCI, Inc., a provider of investment decision support tools, looked at the presence of women on the boards of thousands of companies and their corresponding propensity for scandals and tensions with shareholders. The results showed “a clear pattern between having higher than mandated percentages of women on boards and fewer governance-related controversies.”

The research is clear. Having a diverse board can benefit your company in many ways.

Yet, U.S. companies have been slow to respond. In fact, the article points out that male board members named John, Robert, James or William outnumber all women on boards.

Want to improve the performance of your company? Get a woman on board.

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5 Tips for Siblings Working Together in the Family Business

This is the second in a two-part series on siblings in family businesses. Part one covered some successful sibling partnerships, while part two give tips for success for siblings who are in business together.

Even though you may have fought over whose turn it was to use the bathroom and who sat where in the car as children, that doesn’t mean you can’t own and run a successful business with your sibling.

There are unique challenges to it, of course. You may not have chosen your sister as a business partner. You can’t easily quit and go to another business when you’re frustrated. And it can be uncomfortable to attend Sunday supper with the family if you’ve just had a disagreement over an issue at work.

Here are some tips for you and your sibling to work together successfully.

  1. Have separate roles based on skill, not family hierarchy

Just because he started with the company first doesn’t mean that sibling should become the CEO. He may not be best suited for the job and would rather use his background, education and natural skill with numbers to serve as CFO. Perhaps another sister or brother is best suited to the role, and just needs a bit more training to take over the lead position, while a different sibling might have the perfects skills and personality to run the sales department.

  1. Understand, trust and respect each other’s contributions

I imagine Walt Disney got frustrated with Roy sometimes when he didn’t immediately jump on his latest vision for their company, being concerned with how they would finance it. And Roy was equally frustrated by Walt’s tendency to continually start new facets of the company without considering available resources.

But they were smart enough to realize they each played a crucial role in the company and that it took both of them to make it successful. They needed, respected and trusted each other.

  1. Communicate frequently and put it into writing

Any business needs open channels of communication on all levels. With family businesses, making sure decisions are communicated in writing is critical, as there tends to be more verbal communication among family members.

If you’re at a family picnic and make a decision about something crucial to the business, follow it up with an email to ensure you both understood the decision you made.

Hold regular, formal meetings with your siblings to discuss the business. Make sure every partner feels heard during the discussions and that notes are taken during the meeting and distributed afterwards.

  1. Establish, tweak your mission and goals together

Maybe you and your sibling started the company with one mission, but as you took your goods or products into the marketplace, you saw that a correction to that mission is necessary and your goals may shift. Or you’ve decided you should shut down one subsidiary in favor of focusing on another.

Discuss any changes or direction with your sibling partner. Don’t assume he or she has come to the same conclusion.

  1. Establish boundaries between work and family

If you and your siblings enjoy socializing outside of the office, that’s great. But if you’re forced to more than you’d like, maybe from pressure from dear old mom and dad, seek to minimize that time together, or just request it be a no-work-talk social event.

It won’t always be easy to be a partner with your sibling. When times are tough, remind yourself that you do love each other and you will always be family. Ultimately, you share the same goals of maintaining family harmony and growing a successful business.