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Leading Through Small Business Growing Pains

small business growing pains

Businesses usually become clients in one of two stages. Either they are in startup or the very early phase of just beginning to hire employees beyond the founder or they have just experienced a jump in headcount rapidly and are experiencing some growing pains. Inevitably, the leaders of the organization tell me how unique their situation is and wonder if I might be able to help them put, what I call, people structure, in place.

When this happens, I start with the good news first. “You are not a special snowflake. Your business doubling or even tripling headcount in a few months and the proverbial stuff hitting the fan as a result, is actually happening to more companies than you can imagine right now. And it happens to new ones every single day.” It’s called growing a small business and in my almost six years as a consultant, I can tell you that the majority of small businesses who grow quickly, go through it. Things get tough for a while, turnover may spike, employees who were content before change and more questions than answer fill the already strained atmosphere. It is an environment I have walked into many times.

The process through is easy enough in theory, but much harder in application. It often requires major change and tough decisions. It often requires the founder of the business letting go in a significant way, sometimes for the first time in the business’s history.

In the majority of cases the cause of growing pains is due to lack of leadership structure. At least a leadership structure that supports the new amount of employees. People have been promoted, hired and moved around and somehow in the course of all of that, no one knows who reports to who or who is responsible for what. In the spirit of “getting things done” structure was sacrificed for efficiency. While efficiency kept up with customer demand, structure was left in it’s wake leaving an organizational chart that looks more like a winding road sign.

The founder now finds himself in survival mode. He is trying ti grow the business but keep things the way they are. Because the way they are is magic. Magic that helped him build the business and magic he is not willing to let go of. Even if it no longer works. Even if it is creating chaos. Even if it is creating an unhealthy organization that while successful now, will soon plummet. Founders still want to have their hand in everything, but they ran out of hands 40 employees ago. They want to be involved in every decision, but they have stepped outside of their area of expertise too many times to count. They know they need to let go, but it doesn’t feel right so they hold on, sometimes tightly, to as much as possible.

It is at this point that I encourage founders to get out of the business. That isn’t to say leave the company, but simply determine the area of their greatest strength, focus there and let the other leaders in place manage the day to day. It is astounding to me how many founders of extremely successful businesses say that they have no business managing people….and yet they are. It is likely that sales, business strategy, marketing or finance is the strong suit of the founder. Whatever that is, when the company starts going through growing pains, it may be time for them to focus there and let the leaders they have hired focus on the day to day.

During times of business growing pains, the founder may need to take a step back #smallbizhr Click To Tweet

It may sound incredible, but the reality I have watched play out more times than I can count, is that the minute the founder steps back and focuses on his strengths, some pains are immediately alleviated. There is just something about the big boss settling down that changes a tone.

After that, it is imperative that the next level of leaders determine the structure for the rest of the business. Where are the reporting lines drawn? Who reports to who and what department is responsible for what? Even if some structure was already in place, I encourage leaders to start from scratch. Take a look at all current department heads and ask if it makes sense that they continue doing what they are doing. Then that question should be asked of each employee. You are already in a bit of a painful time, if major changes are going to happen, it won’t hurt much to do it now. Better than stabilizing everyone only to shake them up again later.

Once the structure is decided upon and communicated to employees, quite possibly the most crucial part of all of this is to consistently follow it. Leaders jumping rank and communicating down the line while leaving out an important supervisor will only toss everyone back into chaos. Expectations must be set and people must be held accountable and then everyone, absolutely everyone, has to be consistent.

Once a leadership structure is determined, it is important to respect it.....consistently. Click To Tweet

Once these two things have been fleshed out, this is the perfect time to establish core values and behavioral expectations if those haven’t been previously established. I’ve talked before about leadership resets and working through these growing pains are excellent times to embrace a reset.

One final thing that is important to note about growing pains. Not everyone will make it through….and that’s alright. Even if it is someone who was an integral part of getting the business to were it is, it is ok if they don’t make it through. This is almost like a fresh start. A time to regroup and make changes that are necessary. Not everyone is going to like those changes, but if they are the right thing to do, the business must forge ahead without them.

The good news is that growing pains are common and survivable. The better news is that once the business has gone through their first one, the following ones will be much easier. The bad news, as you can guess, is that the first is not the last and growing pains, as in life, will always be a part of business.

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Should You Buy or Build Small Business Leaders?

should you buy or build small business leaders

I love this question. I love philosophizing about these things. Playing out the “on the one hand” scenario. I’m one of those weirdos who enjoys playing out possible scenarios in an effort to figure out which might work out the best. Because with this question as with many others the answer is a frustrating one.

It depends.

This is definitely not a question where one size fits all. What is right for one business may be the worst answer possible for another. Possibly, the most accurate answer that would fit most businesses is that you should mix it up – buy (hire from the outside) some leaders while building (train from the inside) others.

Let’s look at why.

Depending on the stage of the business, leaders hired from the outside may bring much needed and immediate expertise. When a business is in desperate need of marketing or sales for example, they may not have time to groom someone from the inside. Further, experience at other companies and environments proves extremely helpful in a small business or startup environment. Even if the CEO had the time to build leaders from the current staff, if they have only experienced this environment, they may be missing valuable expertise that someone from the outside could bring.

On the other hand….

Nothing says we care about the future of our employees like internal promotions and leadership development programs. The number one complaint from small business employees is lack of advancement opportunities. Any small business who figures out how to offer that is light years ahead of their competitors. Mark my words on that.

What’s more, training existing employees for advancement opportunities eliminates the cultural learning curve. They already understand the business, how things operate and may have even been involved in much of the growth. There will be no time spent getting them up to speed on how thing work. Even showing someone where the bathroom is takes time and existing employees do not need that training.

Growing from within also creates extreme loyalty not found in outside candidates – at least initially. Those employees who have been groomed to take on more responsibility are more likely to stay with the business and not look for those opportunities elsewhere.

When this question is asked of me, I always prefer building over buying if the business has the ability to do so. I think it offers more benefits than hiring from the outside both in the short term and long term.

What do you think? Have you made building talent a priority in your small business or do you find that buying the talent you need for leadership roles is better? I would love to hear about your experience.

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Three Things Leaders Can Always Do More

three things leaders should do more of

There are things in this world we can never do enough. Things we can always do more of and still reap the benefits. Exercise. Reading. Eating chocolate.

Ok maybe there is a limit on that last one, but there shouldn’t be.

As leaders, there are a few things we can always do more. Before you read this list I can tell you right now, not one of them are revolutionary. Not one will surprise you or be something you’ve never thought of before. Yet, these small things are often the ones we forget to do the most.

They are easy, and yet forgotten.

We don’t always need revolutionary. Sometimes we just need reminders.

Ask More Questions:
In the case of leadership, curiosity does not kill the cat and ignorance is not bliss. Leaders should constantly be asking questions. Questions around the work being done, the way it’s done, how it could be done better, ideas, opinions, concerns. Leaders should question deeply held traditions, cultural norms and accepted behaviors. The good, the bad and the downright ugly should constantly be questioned to see what could be improved. One more cliche that leadership debunks: if it ain’t broke, don’t fix it. Just because something is working in the workplace, doesn’t mean it’s working as efficiently as it could be.

Listen More:
Towards the end of the year I had a sit down with a CEO and one of his most valuable leader. This leader was on the verge of leaving as the two had been butting heads for a few months. The CEO asked me to sit in and be a moderator for the two of them. Before we walked into the meeting he said, “I’ve been thinking a lot about this meeting and I know that one of the things I need to do better is listen. I’m not a good listener. Every time you think I’m not listening can you remind me?”

So I did. Every time I thought he wasn’t paying attention and was only listening to respond rather than really understand, I tapped my ear. There were several points that the leader had been trying to make for months that the CEO admittedly only listened to for the first time that day and it changed the entire conversation.

We could all do a better job of listening to understand rather than respond. That is something there will never be enough of.

Praise in Public:
My first client of the new year is struggling with behaviors that she doesn’t want in her workplace and looking for ways to reinforce behaviors that she does want. We are looking at both her performance management structure and her recognition program, but the simplest thing for her to do to reinforce positive behaviors is praise in public.

In one of our early meetings we have listed the behaviors that she feels like are done some of the time, but she would like to see become part of the every day culture. While we will ingrain those behaviors into every training, performance discussion and rewards and recognition program we implement this year, I told her the easiest way for her to reinforce those behaviors is to praise them publicly every single time she can. Whenever an employee does something that she wants to reinforce, doing so publicly will do it faster than anything else. It doesn’t have to be a big production with cake and balloons, just a simple thank you in front of others can do the trick. The point is to make sure that employees hear what behaviors get praises from the boss.

All simple things. Easy things. Things we can always do more of and yet often forget to do at all….or at least forget to do well. Which of these could you do more of?

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One Word for 2017: Easy

make it easy

Happy New Year! I hope you had a relaxing and fulfilling holiday season. Along with the majority of people, we are back to work today and ready to focus on what new things we can do in 2017. I’ve never been one for resolutions or goals. I am the kind of person who jumps and figures things out on the way down. That has served me well to this point, but I felt like this year I needed a bit more focus.

This business is growing. It is at the point of being overwhelming which is, at the same time, a thrilling and exhausting place to be. As I move from being a ad hoc consultant to owning a legitimate firm, I find myself needing to be more deliberate about purpose. I help companies all the time figure out their vision and values. I help small businesses determine what their driving focus is that is going to help them recruit and train. And yet I have never really done that for my own business.

Until now.

I wanted a word that drove every decision. For every new offering rolled out this year through this consulting firm, I wanted one word that focused the way we shaped that service. As I’ve spent the last few weeks thinking about what it is that small businesses need in the form of HR services, one word kept popping up in my mind.

Easy.

They need it to be easy. Many of them are trying to keep their head above water. They are working on securing funding or finally turning a profit. They are trying to figure out how to hire the talent that they need to grow the business without taking the business under in the process. They are all wearing many hats and need to focus on their core product or service and need all ancillary functions to be….easy.

In the past, they have focused simply on compliance. They ensure they are legally doing what they have to do and little else. Things like leadership development, employee training, robust onboarding and focuses on culture was not something they felt like they had time or budgets for. All of these things were too complicated for businesses who either didn’t have an HR person or only had one person doing it all.

Our goal this year as a business is to change that. I still firmly believe that small businesses can do anything big businesses can do if they only know how to scale it down to their resources and budget.

We can help them do that, but it has to be easy.

I’m excited to run with all of the things I have planned for this year. There is so much more to come and I hope you’ll share any thoughts and ideas you have as well about how we can make small business HR easier.

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New Puppy and a Holiday Break

New Puppy

On December 10th we surprised our nearly seven year old son with his very first puppy. He had no idea it was coming and was so happy he cried when he found out. It is a moment my husband and I will never forget. That day we drove to the breeders and brought Parker the labradoodle home. Since that time he and B have been inseparable. B gets upset when he has to leave him for school and makes me promise that I’m going to take good care of him. Seriously, how cute are those two?

Needless to say our family is hopelessly in love with him.

But with a new puppy comes a lot of work. A new puppy during the holidays with family visiting and a trip to Chicago sprinkled in means an extra amount of work and business that means I will almost need a vacation the first week of January.

I’m sure many of you can relate.

With that said, the blog will be taking a break over the next two weeks and will be back on January 3rd with our regularly scheduled programming. This year has been amazing. It has been the most successful year yet of the business. I could not be more thankful for my clients, readers and subscribers who made that happen.

I have tons of ideas for 2017 and can’t wait to start sharing them will you all.

I hope you have a wonderful holiday season and I will see you in the New Year!

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Preparing for California Minimum Wage Increases in 2017 and Beyond

minimum wage increase

Every time I log into one of my client’s payroll systems over the past couple of weeks I receive a pop up reminder about the minimum wage hike happening in 2017. In California, the minimum wage rises to $10.50 in January of 2017 and will increase incrementally through 2022 where it will be $15 per hour.

Being a resident of California, I can tell you that it is shocking to think that even with the increase in minimum wage, those living on that amount are still struggling. Even if you think you understand how expensive it is to live here, you don’t until you actually do it. My husband and I are still in sticker shock and neither of us are relying on minimum wage to pay our bills.

At the same time, as a business owner, I know how an increase in minimum wage impacts employers. Many of my clients and I have been talking about the impact of a minimum wage increase on their business and while none of them were forced to make immediate changes because they are paying well above minimum wage now, we will be embarking on compensation studies in 2017 to determine how they stay ahead of the curve and minimize future costs as the wage increases.

It’s a tough balance. I don’t think anyone doubts that on an individual or personal level the wage increase is needed, but for many businesses that rely heavily on hourly workers, the impact is great. A friend of mine works for a small retailer of 15 employees all who make minimum wage. This increase will cost her an additional $15,000+ in 2017 if she wants to keep her entire workforce working full time. That increase will only rise year after year.

All businesses have to decide how they are going to deal with the increase. Will they decrease staff, increase prices, outsource or move more of their operation online? In 2014, Intuit wrote this article which I think outlines great steps a business can go through to figure out how to deal with the increase. The steps are still very applicable today.

The point is to get ahead of it. Businesses who wait until their first payroll in 2017 are likely going to eat some extra costs or kill morale by terminating suddenly. Don’t put off thinking about how this is going to be handled or communicating to staff.

And don’t just focus on 2017. Remember that there are more scheduled increases so thinking about how you are going to get ahead of that curve now will put you in a far better place when the change takes place.

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Deductive Reasoning: The Skill to Always Look For in the Hiring Process

deductive reasoning skills

I will admit before I even get into this post that my stance on this may have something to do with lack of deductive reasoning skills being a huge pet peeve of mine. When someone asks me a question that is glaringly obvious if they just looked around or thought it through, I want to poke their eyes right out.

No really. I have an almost violent reaction.

Example A: “I’m going to be sick today and stay home, but I know the Holiday party is also today. Does that mean I will miss it?”

Let’s think this through. If you are not coming into work and the Holiday party is being held at work then yes, yes you will miss it.

Example B: “Wow the grass is wet. Think it rained?”

Nope. The grass is crying.

Whenever someone fails to use deductive reasoning it makes me think of Bill Engvall and “Here’s Your Sign“. I don’t necessarily think it is that people are stupid, I just think they are lazy. It’s easier to ask a question quickly than take the time to think something through. We are lazy with our words and we are definitely lazy in our thinking.

I blame Google.

Here’s why I don’t think I’m alone in this thinking however. Nearly all of my clients tell me that one of the skills they need most in candidates is critical thinking. The ability to think things through. The ability to think beyond this present moment. The ability to realize, on your own, that if the grass is wet and there aren’t sprinklers present, it probably rained.

You often hear to hire for attitude and train the rest and I do think their is merit to that. But if I were going to hire for one thing over skillset it would be thinking skills: critical thinking skills, deductive reasoning and the ability to think things through and ask the right questions.

What do you think? Are deductive reasoning skills a must have requirement for you or is there something else you look for in every candidate?

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When The Job is Bad, But the Training is Worth It….

hr_consulting_worth_it

A few days ago a friend and I were lamenting about the job where we met. We both spent a good amount of time in that job and both of us found the people and policies to be ludicrous. We look back now and wonder how we survived. Through all of that though, we both agree’d on one thing. Even though working in that environment was like working in the twilight zone, the skills we acquired and the lessons we learned while working there were invaluable. In fact, there is no way I could be doing what I’m doing now had I not worked there.

No way.

My husband had a similar experience. He worked for a company for seven years and came home miserable pretty much every single night. Now however, working in his dream job, he knows that the skills he learned during those seven years have completely prepared him for what he’s doing now and without it he would not be as successful.

And that’s often how it goes.

If I rank my jobs in order of my happiness level doing them (excluding running my own business as that’s in a class all it’s own), the jobs that I enjoyed the most, I learned the least and vice versa. In fact, in my very first job out of college, my supervisor said that very thing to me. He said, “I know this job is shit sometimes, but you have to decide if the training you are receiving is worth it.” It was. I didn’t realize it at the time because the job really was shit, but now I do.

I often finding myself repeating this to employees, friends and family looking for job advice. When you supervisor is a complete jerk and even looking at them makes you want to throw something, is the training you are receiving (including training around how to deal with difficult people) worth it? If the work environment is complete chaos and the business is still trying to figure everything out – hello every small business out there – is your skill set being enhanced through all of the chaos?

If yes, then maybe it’s worth sticking it out a little longer. If no, maybe a new job should be on the top of your New Year’s Resolutions list this year.

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HR Is So Much More than Compliance and Recruiting

Human Resource Functions

HR is so misunderstood. I’m fairly certain that every function feels that way. Ask anyone what we do and they will come back with a fairly short list of answers that all boils down to two things: hire and fire. Everything in between gets lost and yet, that is where the bulk of the work is done.

Leaders who reach out for help usually identify one area that they need help with. Then, when I tell them all the other areas they should be thinking about they are shocked. Small business leaders often “don’t know what they don’t know” about HR and that lack of knowledge could land them in hot water.

The team over at Small Business Trends recently interviewed me about this very topic. They asked what areas of HR leaders should be thinking about outside of recruiting. There are many. If you aren’t subscribed to Small Business Trends and you are in a leadership position (any capacity) in a small business or startup, i would highly recommend you add them to your reading list. They offer great insights for businesses across all functions.

You can read my interview with them and sign up for their newsletter here: 13 Tasks Your HR Person Should Be Completing – Beyond Recruiting.

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How to Offer a Realistic Job Preview during the Interview Process

job shadowing

I wrote a post several years ago, and then re-posted it earlier this year, about smoke and mirrors during the hiring process. What we sell as recruiters is not always what the candidate receives when signing on. It isn’t that we intentionally lie (well, not all of us), it’s just that we either forget to share things that a candidate might find important or we don’t give as realistic as a picture as we can.

In my work with small businesses I find that realistic job previews are more important than they have been at any other time in my career. At least three times a day while interviewing a candidate I find myself uttering these same words.

“Have you ever worked in a small business environment like this before? No? Well then you may not be aware of how different it is than a larger environment. Let me list a few specific things that are going to be very different for you.”

And that’s just the common stuff, like everyone wearing many hats and the roller coaster ride that small businesses face every day. I then have to give a RJP about that particular work environment and the leaders attached to it.

And that usually isn’t enough.

Whenever possible, I encourage the leaders of a small business to allow us to take the candidate experience one step further. As we narrow down our final two or three candidates, I want to allow them to actually come in for a few hours and experience the environment. Maybe they can shadow a person in the role. Maybe they can sit in on a meeting or even just meet with a few employees in the breakroom. Whatever we can do to show the candidate what it’s like to work in the business.

When they can see the environment with their own eyes, they will pick up on things that may or may not work for them. They can see the things we may have forgot to tell them.

In my call center days, we had every single candidate sit with a seasoned rep and listen to actual calls. It was always eye opening for the candidate when they happened to sit in on a call where the customer was angry. No matter how much we told them in the interview process that this was going to happen, nothing can prepare you for going through it. For those who joined the company, handling their first angry caller wasn’t met with such sticker shock considering they experienced it before ever taking the job.

I know some small companies who actually hire individuals for two week trial periods. They agree on a set amount for the two weeks and tell the person they will get that money regardless of whether they finish the two weeks or not. They want the person to experience the environment before officially signing on board. This is taking RJP’s to a whole other level. What a great way to figure out if someone is going to work out or not.

I realize RJP’s do not work in every environment. Some may have regulatory concerns or the virtual nature of the company may make a RJP nearly impossible. But for most, it can be done. Have the candidate sign a confidentiality agreement and you’re all set.

It is always better for them to realize the environment is not going to work for them before their first day of work, than after.

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