Entrepreneurial News®

The Credit Ratings Scam

This isn’t a purely business topic, but as many of you know, the fact that you have to have your personal credit rated when applying for business credit makes the topic.

When I was controller for a 70 branch consumer loan company when I worked at Ford, we wanted people to borrow money, make the payments and eventually pay off the loan. But we only made money if there was a loan that was being paid. And our ratings reflected what we wanted.

It seems that the Credit Bureaus have lost sight of this basic tenet underlying the ratings.

I recently paid off a credit card and my rating jumped about 50 points. This seems like too much.

My wife, on the other hand, paid off a credit card and her rating, which is much higher than mine, went down.

Both of us have credit ratings at the three agencies that have probably 50 point divergences in them. 5 or 10 points we can understand.

There seems to be so some divergence, because of in credit usage. My usage is higher than my wife’s, but our payment patterns are similar, but my rating is about 75 points lower than hers. One would think that higher usage, with a positive payment pattern, would be more of a positive.

I’m sure you readers out there have some stories, too, and we encourage you to share them. Maybe we can wake up Sen. Warren’s Credit Committee to do some positive reforms.

COVID 19,20,21,22

Despite all known precautions, I got COVID on June 13, went to the hospital for 4 days, and came out tired and irritable.

The interesting thing was that I decided to have my doctor do a blood test on me to see if I had the COVID antibodies.

The blood test disclosed that I have the antibodies for COVID 20 (the 2020 variant), but not for any of the other strains.

Which means that I could get it again this year, and it might be any one of the variants listed in the title.

What our medical establishment isn’t telling us is that the vaccines only cover one variant at the moment, and if you’re exposed to a different variant, you might still get it.

If you’ve been vaccinated, the illness is more mild, but it’s still annoying .

If you’re an employer, have your employees who have had COVID bloodtested to find out which variant they had, note it in their personnel file, and start lobbying your medical prvovider to include annual COVID tests for those who’ve had it.

It looks like we are heading towards another annual vaccination, such as we have to the flu.

Are Social Credit Scores Coming?

As you may know, social credit scoring is an idea that originated in China, that imposes rewards and punishment based on an individual, or presumably, a business conformance to governmental standards of conduct.

Epoch Times, no journalistic liberal bastion, thinks these standards might be coming to America, through the World Economic Forum.

The standards are being backdoored into society through corporate Evironmental, Social and Governmental (ESG) policies adopted by corporations, but it doesn’t seem that many corporations have jumped on the ESG bandwagon.

There is even a startup company, Doconomy, that has developed a system that can track the carbon footprint of all your purchases, including food and travel, and cuts off your spending when you hit a specified personal emissions limit.

So far, there’s no mention of ESG policies broadly applying to businesses, and let’s hope the Washington Wizards don’t figure it out before the cavalry shows up in November to rescue all of us from the Democrat Congress.

There’s no evidence so far of anyone in Washington mandating social credit scoring for individuals or businesses, and I’m reasonably optimistic that this scheme couldn’t passed through the Congress.

There is some evidence that some banks, notably Chase and Bank of America, have closed accounts of people they deem as reputationally challenged, but that’s about it.

So, thanks to Epoch Times, and forewarned is forearmed.

What Recession?

The media are once again trying to convince us that we’re in a recession.

It doesn’t feel like a recession to me and my clients, but then we’re in Arizona, which has steadily prospered all the way through our economic difficulties.

But, if there is a recession out there in the land, you don’t have to hunker down and cooperate with it.

Up your shipping percentage. Work harder on customer satisfaction. Hire some new sales reps. Introduce that new product or service that you’ve been thinking about.

In general, don’t behave as though there’s reportedly a recession.

Indeed Tips for Recruiting Success

We’ve used Indeed and Zip Recruiter for clients, but we find that Indeed does a better job of customer relations.

For example, Indeed just came out with a set of tips for employers to use with Indeed to make their experience more successful.

Here they are:

1, Ask screening questions, such as ‘do you have a college degree?’ if they’re relevant to the job.

2. Set one or more ‘deal breakers’ that will eliminate candidates; you don’t necessarily want to interview all candidates, only the ones with relevant experience. Location of the candidate can be a deal breaker: we found that candidates weren’t going to drive from Scottsdale to Chandler for a security guard job, so we put local hiring into the job description as a deal breaker.

3. Invite candidates with ‘Instant Match’ to interview. Note: make sure you’re only paying for qualified applicants….the Indeed website is a bit vague on this point.

4. Reject or replace unqualified applications within 48 hours of posting the job. Otherwise, you’re going to get charged for them.

5. Make use of Indeed’s dedicated recruter for feedback; it’s not a generally known service of Indeed.

Lean In Leadership

In some respects, the title of this post is an oxymoron.

If you’re the leader, you shouldn’t have to be asked to lead.

However, we have had a situation in Uvalde Texas when a group of first responders stood around while children were being killed by the assailant.

This standing around while mayhem is taking place should not happen.

The police chief apparently did not lead, as he should have. However, an investigation is taking place.

So, among the first responders, someone should have assumed the lead, especially when children were calling the 911 line reporting the shootings.

Someone among first responders should have leaned in.

Even if you’re in a meeting, and it appears that there needs to be leadership in the group, lean in.

Leadership is doing the right things. Even if you have to lean in order to do so.

You can’t be a leader and be risk averse.

You can take prudent risks.

And you can and should lean in when you think it’s appropriate.

And if you’re a first responder, it should be in your job description to lean in when you think it’s appropriate.

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.