Entrepreneurial News®

Hiring Your People Right The First Time

As we were canvassing for our projected supervisory courses for the American School of Entrepreneurship, it occurred to me that maybe we should reissue our hiring guidelines.

Julie Fletcher, one of our original founding members pioneered this approach, called KPI, or Key People Indicators, but we’ve updated it for the rise of the two big hiring sites.

We recently did a personnel screening project for a client hiring 12 security guards, and used our updated KPI process, which was made easier because we could actually list on Indeed and Zip Recruiter, through the job description the KPI’s we were looking for, such as attitude and attendance.

Julie originally developed for her consulting practice the KPI’s using DISC profiles, and we continue to think that DISC is the best tool available, because the sellers of the profile seem to continually update the test for more traits.

Even you, as the entrepreneur should take the DISC profile, to either find out or reinforce what you’re good at. Also, if/when you hire a second person, that person needs to be complementary to your skills. For example, most entrepreneurs have high ‘D’ scores, very results oriented, but for their second hire, they should hire someone who’s better at team building, a high ‘S’ score.

We’ve found the best source of information on DISC is www.discprofile.com.

Once you’ve gotten the second hire on board and functional, you’re not done. You might, at this point decide you need another salesperson to share some of the CEO’s sales duties. The CEO may know what he wants in his third employee and should recruit around those needs. Again, DISC profile the person, because your ‘gut feeling’ is probably wrong, in our experience.

Ensure that all the present employees interview the newbie, and they should all agree that he or she will be a fit at the company. This ‘fit’ step is commonly overlooked.

Around five employees, your company should begin to develop a ‘culture’, which is another KPI. It’s hard to measure, but your existing employees will sense it in the degree of ‘fitting in’. (We’ll presume that you like the culture in your company; changing it is another subject for another post)

At five onward, you’ll probably start to need your first supervisor, but it depends. In our people research, we found one company that hires only former law enforcement people and has no supervisors among its 35 people. You should have a feel for when you need to hire the first supervisor, and this is one case where your gut can govern.

Picking and training your first supervisor is the subject of two of our courses at the American School of Entrepreneurship, because we’ve found that 25% of companies between 50 and 500 employees had no supervisory picking and training programs, and that sounded like a good market to us. www.theasoe.com, in a few weeks.

 

 

Hiring Your Supervisors Right The First Time

We are relaunching our sister company, The American School of Entrepreneurship, and the first courses the companies we surveyed said we should offerr were a podcast on how to hire supervisors correctly, and once you’ve hired them, train them correctly.

One of the major reasons employees quit is poor supervision, so our theory is that you can avoid thousands of dollars of expense in quit and training by hiring better supervisors.

So, here’s a written version of the course on hiring correctly.

Normally, a company will hire its first supervisor at about 5 to 10 total employees. When will vary by the type of industry somewhat, with the type of employees you have. If they are more independent, then you can veer towards 10 employees. Less independent? More like 5.

You will have noticed that you have on your payroll a person who seems interested in getting ahead; that’s the sort of person you want to test.

Yes, we said test, only if to verify your own judgement.

The test that we recommend to our clients is DISC, which measures qualities like enthusiasm, support, stability, accuracy, challenges, results and action. www.discprofile.com has more details. They’re well worth the money, because they measure the ‘fit’ of the supervisor with the existing people you have.

We don’t recommend gong outside your company for supervisors, because you’ll run into the ‘fit’ question. Much better to promote from within.

So, you administer the test, and you look for the traits in a supervisor that you think you want. If you have existing supervisors, you can even test them to see if they have the traits that you want, and replicate those traits in the newbie.

Nothing and no test is perfect, but we think an objective would be to reduce your employee turnover by 50%….that’s what we’ve seen.

So, have at it.

Musk, Farley and Mulally

My genius webmaster, Primeview.com, found a bunch of old posts that I had done for Entrepreneurial News when we first set it up.

One was on Alan Mulally, who had just started his successful turnaround efforts at Ford, which focused on fixing the culture at Ford, which had become pretty hidebound. He succeeded, of course and Ford prospered. But, his successors didn’t do as well, because they allowed Ford to become somewhat inward looking again.

Now we have Jim Farley, who’s reinvigorating Ford with new products in all of its segments, probably shaking up the culture too, and will probably be similarly successful He’s just beginning to see the profits from the new Bronco roll in, and has the F-150 Lightning and the Ford Maverick pickup to go. All three are segment leaders.And the supply chain, with its own battery plant, is getting a refresh.  Somewhere in the next year or two, the Mach E might need a refresh, too. The culture at Ford must be undergoing one of its periodic refreshes, like the cars. No one has written about that yet.

And then we have Elon Musk and his takeover of Twitter, which we are cheering on, not because we’ve been thrown off Twitter, but because he’s attempting a really ambitious, purely cultural makeover of the workforce. He’ll succeed eventually, but the question is whether the Twitterers will see the handwriting on the wall and change, or whether he’ll have to do wholesale personnel changes to get the culture forward leaning and accepting of all opinions. It seems so far that Elon is allowing change to occur from the inside, which is the better way, IMHO. Time will tell.

The point of all this is that you’ve got to get your culture aligned with where you as the CEO want to take the company, otherwise you’ll be delayed and probably frustrated.

The Coming Recession?

In between mentions of Roe V. Wade possibly being overturned this summer, there is talk of a recession late this year and during 2023.

What can you do now to prepare for it? Especially when there is scarcity about:

  1. Boost your purchases of finished goods and raw materials to cover longer periods of time, to avoid shortages and get better pricing, possibly.
  2. Tell your banker that you’re going to need more inventory financing to accommodate larger stocks.
  3. Hold a meeting with all your people and tell them about your strategy, and that if we execute correctly, there won’t be any layoffs.
  4. If you have sales reps inside and outside, tell them to contact all customer they haven’t had an order from in the last three months to see if there’s a problem. If you’re a retailer, boost your local search expenditures.
  5. Try to price match all competitors, so you retain customers.
  6. Have an outside consultant review your promotion methods and your website to see if they’re all maximally effective.

There are probably more things you can do and we’ll keep thinking on it.

The Star Trek Diversity Plan

I have a friend and sometime client who was recently puzzling over his diversity plan. He runs a big civil engineering firm.

He has to have a diversity plan on file with the Federal Department of Labor because he has more than 50 employees, and he’s an occasional government contractor.

He also loves Star Trek, to the point where he’s gone on two Star Trek -themed cruises

It was on one of these cruises that the meaning of diversity and community finally hit him, while watching some of the characters interact.

After all, if you’ve watched any episodes of Star Trek, what could be more diverse than the bunch of people operating on the Enterprise? Sure, they look odd, but they’re operating in the 25th century.

And, although it’s not generally mentioned in the Federal diversity plans, he’s managed to maintain a meritocracy retention and promotion plan. Civil engineers are expensive folks, and he doesn’t want to lose any.

And they have to function as a community, because they’re some light years from any physical contact with anyone.

My friend also has people working remotely on customers’ job sites, and at home, as a result of COVID. Parenthetically, his engineers working from home largely decided that they liked working from home, even after they could return to the office, so he had to invent control methods to ensure that their work got done. The various distances also distance mean that his civil engineers have to be pretty self-reliant, which gets into his recruiting and supervision.

We’re not sure what Star Trek would say about gender equity; maybe we’ll go watch some episodes this weekend and report.

No BS Border Plan

Years ago, a business author and coach named Dan Kennedy popularized a series of business books starting with ‘No BS’.

I think we’re at the point where Arizona’s policy on the border and the wall, as uttered by candidates, needs a ‘No BS’.

The wall makes a difference to us business people, because the inflow of migrants, if done legally, could provide a source of workers for Arizona businesses.

Even Karrin Taylor Robson, with her six point plan, doesn’t actually say ‘build the wall’. Why not we ask?

Kari Lake’s in a similar position. No specifics.

Mark Brnovich, who’s our sitting Attorney General, hasn’t weighed in, either.

So, here’s our plan that is needed to finish the wall, through emininent domain if necessary. I have no idea how much this might cost, but it can be estimated, and I think AZ has the money. This is an emergency.

The slats for the wall are already in position, as I understand it.

The nutty Feds are paying contractors to not build the wall, so cash flow is coming that could be used to build the wall.

The Feds are so caught up in their drawers that Biden might be out of office through impeachment by the time we get sued. Or by that time, he might condone it by doing nothing, If Leaders McConnell and McCarthy can talk some sense into him

All we’re out is the land acquisition cost, and we might be able to sue the Feds to recapture that, since they took no action in a crisis, and got sued by Brnovich for their trouble.

Governor Ducey could get things moving by finding out the land cost, before he leaves office.

Let’s go!

Bethenny’s Dealmaking Rules

Bethenny Frankel’s one of my favorite entrepreneurs. Inc Magazine’s too.

Inc recently published her rules for dealmaking on new projects, which I thought were rather good. We’ve repeated them below, with some editorializing:

  1. Establish your own code; do you think the deal will be enjoyable for you? If not, think twice about it.
  2. Pick the partner that moves at your own pace. Have shared values and have partners that work at your own speed.
  3. Be upfront with your own flaws and weaknesses. Outline your own deficiencies in any negotiation. To which I’d add, all negotiations have got to be a win/win/win for everyone.
  4. Define what you will do, and what you won’t do. Self explanatory, but IMHO, when money starts flowing, misunderstandings proliferate if not in writing.
  5. Master the care and feeding of your partners. Again, self explanatory, and make sure you take their concerns into account. It’s not your way or the highway. Celebrate successes. IMHO, behind the scenes figure out what happened with failures.

The Cavalry is Coming?

This is a favorite phrase of my favorite TV host, Larry Kudlow, on his daily show on Fox Business.

But, for those of us in the small business community, what does it mean?

First, I think Larry would say that the House and the Senate revert to Republican control.

But, but, but, to use Larry’s favorite phrase, what does that mean? We’ve still got Biden in the White House.

I think we could say there will be a reduction in oil drilling impediments, which will lower gasoline and other petroleum costs, which will slowly take some of the pressure off those costs continuing to rise. Crude prices have dropped a bit in just a week after we announced a cessation of buying oil from Russia.

If you depend on your goods from China, as many retailers and drug companies do, you might continue to have problems; most of our clients have sourced formerly China-produced goods into other countries, such as Thailand, India and Mexico.

I think there will be some decrease in silly regulations, but Dems are still running the agencies such as FERC, EPA, OHSA and DHS that impact your business lives.

What will happen to the millions of unfilled jobs? I find that number rather illusory, since we did a hiring campaign for 12 security guards, and got all the positions filled in two weeks, albeit by offering a somewhat higher wage than others. We’ve written elsewhere of using Indeed and Zip Recruiter, and the fact that we thought the latter was better. There’s another online job board, Monster, from which I’ve received some solicitations to be President of this or that, and that seems to work for higher level positions.

But, you will probably see some unavoidable increases in your raw materials costs, or your service costs, which you might not be able to recoup through price increases, despite what the pundits say. We’ve also written in this blog about how you can mitigate price increases.

So, and we will probably update this blogpost down the road, as we’re updating the one on stagflation, as the way becomes more clear.

 

 

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Gotta Know Your Limitations

To paraphrase the Clint Eastwood movie, ‘A man’s gotta know his limitations’.

What does that mean for you, as an owner of a company?

It means don’t get ahead of your organization’s ability to execute what you want to do.

It’s fine to have buy-in from your organization on your plans (we recommend it), but you might task your organization with more than it can do in the time frame you’d like it done.

An example: in one of my companies, we were adding production capacity, expanding eastward in the United States, and adding English and Australian distributors, and I and my plating manager got the idea for a completely new metal coating process for our exhaust parts on a Friday afternoon.

We were also improving our shipping times, which required a fairly major commitment to more inventory.

I discussed the new pr my partner, who had blessed the idea previously but who had expressed valid concerns about going beyond our capacity, So Monday, I and my partner held an all hands meeting with my staff, front office and warehouse, as well as production. My CFO missed the meeting, but she would have asked me what additional strain I would be putting on our financial resources.

Frankly, I didn’t know, and I admitted as much. My name was on the building, but I discovered it was ok to not know something. At Wharton and Ford, you were expected to know the answers.

So, we kept implementing the other expansion plans, and I started the process of doing market research and actual testing of the parts in the worst climates where we had discrete distributors. I might have otherwise skipped the market research test because the initial response from a couple of key distributors was overwhelmingly positive.

We digested the plans already in the works, and then tested the parts in places like Seattle, Houston (for marine uses) and Denver. All positive.

The tests took about six months, during which time our competitors might have found out what we were up to, but they didn’t.

So, we stayed within our limitations, kept the financial wheels on the business and had a very successful product launch.

And the staff was happy, because they didn’t get pushed beyond their limits.

Financially, we added nearly 30% to our sales in a year in the middle of a recession, which we didn’t think we could do, but it worked.

Gotta know your limitations so you can exceed them

 

Indeed vs. Zip Recruiter

We recently did a hiring campaign for one of our clients for security guards, and we used both Indeed and Zip Recruiter.

Of the two, we preferred Zip Recruiter, because it turned out to be cheaper for the client, and we found Indeed a little deceptive in their claims.

First, both sites do offer free periods, and we were able to find enough qualified candidates inside the free period.

However, there was a qualifier: Indeed tried to charge us for each resume submitted, regardless of qualifications, which they didn’t disclose on their website, and $99 per resume passed through to the client. These two charges make Indeed quite pricey relative to Zip. Indeed did, however, refund the per resume charges when questioned, because they agreed they didn’t disclose them

Zip said straight away that their cost was $16 per day, regardless of how many resumes the site found for us. And they stuck to that. Using the same ad on Zip, results weren’t quite as good as Indeed, but there wasn’t enough difference to justify Indeed’s higher price.

As it turned out, our client also recruited from his existing employees, which produced as many applicants as either Zip or Indeed.

So, if you’re using one of the recruiting sites, read the fine print!