Business Mastery

One of my prospective clients had scheduled a brand-new restaurant opening day last week. But, it did not happen.

All the employees had been hired and trained and showed up for their first day to serve customers.

Hordes of anxious new patrons were lined up outside the front doors.

The local press had sent a camera crew and reporter planning to publish the success of the opening day.

But, also present was an official of the state’s health department. She had a notice in her hand requiring the restaurant to remain closed until a required document was filed properly.

The owner told me that he was very surprised because one of his senior management had the responsibility to complete the required documentation. In addition, that manager was his son-in-law and one of the restaurants owners.

When and if the outcome will be successful remains unclear.

Sadly, this incident reminded me of how many people believe that responsibility for something means that it will be done.

Actually, there’s very little connection between having the responsibility for something and things actually getting done as expected or hoped for.

Most of the time and individual’s areas of responsibility are delineated in their position descriptions or job descriptions.

Simply because someone has the responsibility, as outlined in their position description, doesn’t mean they’ll actually perform the job as you would have anticipated.

The best way to think about this is to envision a group of people with the same responsibilities.

That group could be your salesforce,  your file clerks or your warehouse personnel. People in those kinds of jobs, like schoolteachers, all have similar responsibilities. You know however, their actual job performance varies widely. Individually they will range from in competent to magnificent.

What the restaurant owner required and what you must always insist on is accountability.

In simple terms accountability means a culture of people giving their word and actually keeping it. Everyone else’s role is to insist people finish what they have agreed to do.

One of the most important things each of us can do as managers is to maintain a high level of consistency.

And, one of the most important things we do as managers is doing the right thing for every level of performance we will get from our employees.

Here is a very top-level view.

In order to do this properly we need to both measure performance and take the appropriate action.

It is a great deal easier than one might suspect. This is because employees only want to know a few things to do their jobs.

1. What they’re supposed to do.
2. How they’re going to get measured.
3. How they’re doing right now.
4. And, what the consequences are.

Making the process even easier, there’s only four possible levels of performance anyone can deliver.

1. Achieving the goal.
2. Exceeding the goal.
3. Missing the goal.
4. Always missing the goal.

So let’s examine the four points contained in both of these categories.

Measuring performance.

1. The expectations of the job. The best and most appropriate way to delineate the expectations of any position is via a position description. The position description should delineate the basic accountabilities and functions expected in the job. Plus, the position description should be augmented on an annual basis by providing a development plan for each employee.
2. How performance will be measured. The position description should also the delineate how the employee’s performance will be measured. It should indicate such things as the frequency of performance evaluations, both formal and informal. The employee should also be aware of that his or her individual performance will be measured no less frequently than monthly during accountability meetings.
3. How the employee is doing. Every employee should be appraised of their level of performance with at least three methods. First, through periodic scheduled formal performance valuations. Second, during accountability meetings. And third, with periodic informal comments and suggestions.
4. What the consequences are. These would include both awards and reprimands. Every employee deserves to know in detail the compensation plan and how their performance is connected to that compensation. Additionally, every employee needs to know the minimum standards of performance, satisfactory levels of performance; and, what constitutes other levels of performance all the way up to exceptional.

Appropriate action.

1. Achieving goals. In simple terms, achieving goals denotes satisfactory levels of performance. The appropriate action for you, their manager, is to essentially allow them to maintain or keep their job—no more. It’s inappropriate to give the employee lavish levels of praise for making goals. The primary reason for this is that you’re likely to have employees who are achieving at a high level. These employees will not appreciate you giving rewards to those just “doing their job”.
2. Exceeding goals. Now, it’s appropriate to give praise to every employee that is exceeding their goals. Your skill as a top level manager will mean your supplying these “rewards” at levels that are appropriate for the actual achievement. Once again, your very high level employees will not appreciate you giving major rewards to those performing at levels lower than theirs. However, you’ll run a great risk if you under reward your highest level employees. Those are the ones you want to keep. But, you’ll lose them quickly if you don’t reward them skillfully.
3. Missing goals. You will need to take swift and appropriate action when ever anyone misses a goal. The most appropriate actions to take would be offering coaching; additional training; and  time to correct their unsatisfactory performance levels.
4. Consistently missing goals. Provided you’ve done the right thing when employees begin missing goals, by the time they are consistently missing them the only appropriate action for you to take his dismissal. Failure do this properly will indicate to your performing employees you will allow poor performance. They will consider you a very weak boss if you do this.

It’s vital that you do everything above with the grace and style. If you do, you’ll be one of the elite managers in the country. If you don’t…

A major part of the Leriot System of Management is the periodic use of the Analysis phase of the system.

If your goal is to continually maintain a highly effective and well oiled business operation, you’ll need to conduct periodic analyses of your environment.

Generally, the tool we’re going to be discussing can be used for the entire company, a project within the company, a department and or even a team.

The term, SWOT, is an acronym for Strengths, Weaknesses, Opportunities and Threats. The general use of the tool is to conduct “scans” of your operating environment. Most consider the “S” and the “W” components to be used for an internal scan while the “O” and “T” areas are used for external scanning purposes.

At the company level, you would consider internal to be within the company; and, external to be outside the company. If you’re considering a component of a company, like a department, then external could be considered outside the department but still inside the company.

To make the tool highly effective you really don’t need to worry about that level of delineation.

Let’s go through the four components of a SWOT Analysis step-by-step.

Strengths

You should consider Strengths are those aspects of your “entity” which give you an advantage over similar organizations to yours. However, once again, it’s not vital for you to be doing a comparison vis-à-vis others.

Simply determined the resources and capabilities you have which are strengths in your in your team’s minds.

Weaknesses

Weaknesses are the flip side of Strengths. These are components and resources within your organization which need to be improved upon. Or, if they can’t be improved, need to be minimized regarding their impact on your organization’s ability to perform.

Opportunities

In general terms, an Opportunity exists when you can identify something, which if capitalized on, could be converted to revenues, reduced expenses or profits. Some examples would include an unrecognized customer need, new regulations in your favor, the exiting of a competitor from the market, or the availability of a new employee.

Threats

These are areas which could present a “clear and present danger” to your organization. If you read the list of potential Opportunities I gave above and rewrite them slightly they would represent an excellent list of potential Threats.

Be careful when you’re listing Threats. It’s easy to identify remote and obscure areas which could potentially threaten your organization. There’s not much value and listing them. What you want on this list are items which are currently present or are likely to be present in the near future.

Supercharging The Analysis

Doing the analysis itself is important and should be done no less frequently than annually.

Even more important is the following exercise.

• Look at every single item listed anywhere in the SWOT Analysis.
• Identify a specific “potential initiative” for each item on the list.
• Rank each potential initiative based on its ability to impact revenue or profits dramatically.
• Next, select the top-five and re-rank them based on the ease of implementation.
• Finally, select the top three and establish a plan to bring them to fruition.

Make this exercise a regimen that you’ll repeat for your organization no less frequently than once per year.

Position descriptions and job descriptions are slightly different. Let me explain. A position description reflects the duties, goals, compensation, reporting structure, and other matters relating to a specific position. There is no person connected with a position description.

A job description relates to the duties performed by an individual person. Think about this way. Many of us have small businesses. When you are running a lean and mean organization many people are expected to hold down one, two or even more positions.

So a job description for let’s say Sarah might include the duties as a receptionist and as a file clerk. You are better advised to evaluate service performance as both a receptionist and as a file clerk Van to create a unique position description for her.

Position descriptions and the related organization charts are excellent hiring and development tools. The best advice for every business owner is to develop solid position descriptions for every box on the organization chart. In fact, most companies should have organization charged for now, a year from now and 10 years from now. Provided that the organization is a growing one and the subsequent organization charts will have positions on it which are not yet being filled. That’s because they don’t exist.

However, these future position descriptions have great value. Let’s say for example you currently have only one office. Based on your strategic plan, however, the 10 year organization chart indicates two new branch offices. Your talented and aggressive employees will be asking you about those future branch offices. This gives you an excellent opportunity to coach them on the skills needed to be, a branch manager.

In summary, resists the temptation to create individual job descriptions for every employee you currently have. You’re much better served to create position descriptions and if needed assign various employee is a multiple positions. When you give your employee performance evaluations of course, you will need to evaluating them based on their job description. In other words how well they performed in the positions you’ve assigned them.

The the last quarter of every year seems to be a traditional time for employee evaluations. The question is, or at least one of the questions are, is this the optimal time of year to be conducting them?

There are conflicting schools of thought on this subject. Many feel that all employees should receive their evaluations late in the calendar year. The principal reason for this is that most of every employees accomplishments for the year have been completed by this time. Many companies base their annual bonuses or performance compensation plans on goal achievement during the calendar year. Others feel that the best time for an employee evaluation is on the anniversary of the employee’s employment.

I actually like a hybrid approach.

Having all employee evaluations bunched at roughly the same time every year, the last calendar month or two, puts an inordinate burden on the management. This results in having quick and less than adequate evaluations. This does no one any good. As a result, I found that every employees evaluation with their manager should take place on the anniversary of their employment. Of course, there are some exceptions to this rule. new employees should be evaluated much more frequently. Generally, 30 days after their higher date and again at the 90 day mark. Then once more at the anniversary of their higher date. This means that a new employee will be evaluated three times during their first year of employment.

I am also a proponent of performance-based compensation. Since most companies operate on a calendar or fiscal year basis every eligible employee will be receiving a short evaluation at a year and to determine the amount of the earned bonus.

So in summary:

1. Conduct new employee evaluations after 30 days, 90 days, in one year after the date of their employment.
2. Conduct annual  evaluations for all other employees based on their anniversary dates.
3. Utilize performance-based compensation and give every eligible employee clarity about the reasons for their bonus amount at the end of the calendar year.

Everyone has a deserved need to know how they are doing relative to the companies and their manager’s expectations and actual performance on a frequent basis. It