Too often today, managers – whether supervisors, directors, or even owners – see their role as the creator and enforcer of rules. “Be on time…,” they tell their employees, “or I will have to write you up.” “Be a team player.” “Show initiative.” “Call on more prospects.” “Service the existing customer.” And so on.

More time is spent on dealing with the problems caused by the behaviors of some employees, than on trying to get the best from all employees. The Gallup studies suggested that average managers spend 60 to 75% of their time trying to correct deficiencies and weaknesses, while the most successful managers spend 60 – 75% of their time mentoring and coaching the best employees to even higher performance.

How much time is spent documenting deficient behaviors – and, why are these employees still on the payroll serving as an example to others that this kind of behavior is tolerated and accepted? If you keep employees with recurring performance issues, it says to other employees that it is acceptable, no matter what you SAY about it.

I remember watching John Madden as coach of the Oakland Raiders. While other teams had thick binders of rules and penalties, Madden had only three – first, be on time; second, pay attention; third, come dressed to play. Madden guided the Raiders to a 103-32-7 record, seven AFC Western Division titles and a Super Bowl win.

Madden did not manage, he coached his players. He assumed that the players were adults. If a player could not follow his three simple rules, the player had no place on the team. Madden set high standards, repeatedly telling players “the only yardstick for success our society has is being a champion. No one remembers anything else.”

Players understood and responded, giving Madden the best winning percentage of any head coach in NFL history. He was a catalyst for growth and change for both players and the team as a whole.

Managing

Managing — based on several recent research studies — is a process rather than a title or role. It involves assigning the things to be accomplished and putting in place follow-up measurements and systems to insure results. While correcting inadequate performance is a part of the process, even more important is reinforcing and rewarding the correct performance. Repeated problems involving a particular employee must result in replacement of the employee. Repeated problems involving a part of the system or the repeated failure of employees in a single role, means the system itself requires correction.

Coaching

Beyond managing, coaching requires looking at our systems as a dynamic state. In other words, we are never satisfied with things as they are, but continually look for ways to improve the system and performance within that system. The best coaches make it a two-way process involving employees in the process of creating and implementing incremental improvements in all aspects of the business.

The best manager/coaches are always questioning why things are done this way. Are there steps we are taking just because we’ve always done it that way, even though it is no longer necessary?

Are You Manager, Coach or Enforcer?

Do you ever find yourself lamenting that “people just don’t take responsibility anymore?” If so, take a closer look at your role and you’re likely to find you are spending most of your time as an enforcer. If so, the need for change is urgent.

If you are spending most of your time in the manager role, you have a real opportunity to improve your results by incorporating the coaching role.

In any case remember, the world and our business continues to change – just as all living things change. When change stops, so does life.

“To build a durable, long-term business, the entrepreneur will eventually have to abandon the rules that got him/her started.” –HBR 1999

Successful entrepreneurs tend to build their business in a somewhat protected niche that allows each customer to be handled separately and each transaction to be unique. Growth puts pressure on the organization’s capacity, in almost every case, leading to an expanded workforce using the same methods to deal with a larger volume. The entrepreneur finds himself or herself working longer hours and responding to crisis after crisis.

Three studies of successful and unsuccessful entrepreneurial companies suggest that in order to survive growth, the entrepreneur must be willing to make fundamental changes and may require help in doing so.

1) It’s the process – a fairly consistent response to growth among entrepreneurial firms is to hire more people. At some stage, this is subject to the law of diminishing returns and is eventually counter-productive.

By the time the company nears 10 employees, the need for process and process reform becomes more and more critical. Defining process involves good systems-thinking and can increase productivity by an order of magnitude. The result is the ability to handle significant additional growth without increasing the workforce. This is essential to achieving the bottom-line growth required to meet cash flow demands of further growth.

In most cases, however, the entrepreneur is more oriented to ‘results now’ than the kind of analysis and systems thinking required at this stage.

2) Recruit higher priced talent – perhaps combined with encouraging early employees to move on. This may be the single, most difficult thing for the entrepreneur to face. People who were “there at the beginning” may not have the strengths needed by a larger, more complex organization. There is a tendency to stay the course with these loyal employees for long after the needs of the enterprise have outrun their abilities, and neither they nor the organization are happy with the situation.

This is a difficult area for almost all entrepreneurs and one which can lend itself to outside counsel and analysis. In the end, we do not help people by keeping them where they are ineffective. Spirits get crushed and people get hurt. Far better to face the situation squarely and give the organization and the individual a greater chance for success.

3) Become the Leader – in the beginning, an entrepreneur often does everything. He or she covers the roles of leader, manager and doer, with the biggest time commitment being the latter. When the company grows, however, their focus must shift, as first the role of manager then later to the role of leader, requiring more and more time and energy. According to Jim Fischer’s study, by stage 3 (20 to 34 employees), “the company’s vitality depends on a clear set of core values, a compelling vision/mission for the enterprise and a cultural focus that provides a strong baseline for how the company interacts.”

This stage requires that the entrepreneur effectively delegate both responsibility and authority and focus on the role of leader – that is, one who sets the vision and direction of the company. Failure to do so not only will retard growth beyond this stage, but often results in a falling back or significant survival issues for the concern.

Just like a living organism, a company must change as it grows – but in the case of the entrepreneurial firm, the growth and development must begin at the top with the entrepreneur, if it is to succeed.

“I don’t know which we need; I only know we need help…”

“It’s frustrating trying to figure out who we should be working with…”

“I don’t think any of these will solve the whole problem…”

“Doesn’t anyone do what we need?”

Ever uttered any of the above or one of a thousand variants expressing the frustration of trying to figure out what kind of help is needed for your business? Talk to a business coach and it sounds like whatever your problem, that’s the solution. Talk to a business trainer and it’s all about training. Talk to a consultant and you’ll find out that’s all you need.

Just to make it even a little more involved, there are also CEO Round Tables, Forum Groups and Business Improvement Groups which will offer to deal with your problems.

For many, the subtleties and distinctions between these various business services are lost. (And we haven’t even looked at how many varieties of coaches there are.) What we know is that our business has either problems or opportunities (two sides of the same coin) which would provide real benefits if we could just find the right help “for us.”

So this article is a brief attempt to explore the process of analysis which can help us make such a decision. It is a process developed for use by corporate Performance Coaches – that is – people whose role was performance improvement whether via coaching, consulting, or training – supplied either by inside personnel or outside resources.

This process involves four steps:

1) Identify the “desired state.”

Very simply, this is a matter of what you want things to look like down the road – the company, the market, sales, profits, etc. It is a Vision, Mission, and Main Thing expressed operationally rather than theoretically.

2) What is the “current state?”

For each element of the desired state, what is the situation today? If a particular sales level is in the desired state, what are sales today and what is the trend. If a particular level of customer loyalty or retention is desired, what level do you have today?

3) What is the “current performance?”

That is, how are the people who must do the work performing? There are a variety of ways to measure this, but one of the best is to analyze the work environment using a set of questions such at those identified by the Gallup organization in their survey of the American Workforce. [You can find these in the book: “First Break All The Rules”, by Buckingham and Coffman – available on Amazon or at your local bookstore.]

4) Finally, what is the level of “required performance” needed at the desired state?

This is probably one of the toughest, yet most essential steps. There is little point investing time and money to attain a level of performance that doesn’t yield what we are looking for. And that is where most businesses get off track.

If you’ve ever heard a business executive complain that training or coaching “doesn’t relate to the reality of MY business” – that’s what is missing – the identification of the level of performance required to reach the goal.

Once the four measures are available, we simply must determine what will move the current performance to the required performance level. Can we train people to operate at the higher level – usually this requires that the training be customized to our business rather than “off the shelf” – and that is what makes it effective. If it’s not a training issue, is it holding people to standards of performance – which is probably a coaching issue – or is it a matter of getting a consultant who can help us through a process change?

It sounds simple, which is not to say easy. Yet in years of working with these issues, I’ve never found anything better to identify how we must approach performance improvem

Over the past twenty years, companies, and particularly American companies, have emphasized growing productivity as the means to greater profitability and growth. Yet, in most cases, the growth in productivity has been the result of staff reductions and putting greater stress on the remaining workforce to achieve the same results as a larger workforce had achieved in the past.

Obviously, such a strategy has limitations in that it is not creating anything, is not innovative, and produces diminishing returns over time. In fact, pushed too far, the strategy backfires with the best and most productive employees leaving for greener pastures and less stress.

Innovation and Creativity

The Wall Street Journal indicated in March, 2002: “The next great improvement in productivity will not come from reducing the workforce but increasing the creativity and innovation of the employees and managers…”

The same article found, however, that the very reductions of workforce which had accompanied the previous increases in productivity, actually reduced creativity and innovation, as time was filled with just getting done what had to be done. No one from the top of the organization down had time to think and work “on” the business, because everyone was too busy working “in” the business.

Productivity in the Organization

In their study of the American workforce, the Gallup Organization found that most companies only obtain 30% of the potential productivity of their workforce. Among the most important reasons identified is the lack of time to work “on” the business, to innovate, to think about how to do the work better. In addition, most workers did not know how their work (or what in their work) contributed to the goals of the organization.

In a major study of the workforce, the Harris Polling Group found:

1. Only 15% of workers could identify the most important goals and top priorities of their organizations.
2. Even when the goals were identified, only 19% felt passionate about those goals or that they had a significant commitment to or involvement with them.
3. Workers reported that they only spent an average of 49% of their time on goals and activities that they identified as “important.”
4. Finally, 51% reported that they did not understand how they could or did contribute to the achievement of the organization’s goals.

Imagine a football team in which only 1 of 11 knew where the goal was, he was not too keen on it and didn’t see how he could make a difference.

What can we do?

This is the crisis facing us in trying to become more productive and profitable. The solution comes at two levels:

Ø First, we must develop the methods and skills to cascade goals down the organization and build commitment up the organization to “put all the wood behind the arrow.”

Ø Second, we need to develop every manager’s ability to coach and to inspire at every level the passion, commitment, and understanding of the importance of each employee’s contribution to the achievement of the organization’s most important objectives.

Ø Finally, we must grow our people to allow our organizations to grow. It is an old adage, but a true one, that the chain is only as strong as its weakest link.

The solution to this “crisis of productivity” is going to take more than a simple canned workshop. It cannot be fixed in a day. In fact, what is really required is that we commit our organizations to learning as a long-term strategy. This learning strategy will include carefully selected workshops and training programs. Even more important, however, is the creation of a culture of continuous learning and improvement that requires customized solutions and interventions.

On the horizon:

The bright spot in this picture is the development over the past 10 years of the understanding of this learning culture and our ability to create and sustain it. It is a process which will become even more important as the next generation begins to dominate the workforce. Their focus is often on how a position helps them develop for their future and how their work really contributes beyond the bottom line.

Take a careful look at your company. Is it ready to grow?

Traditionally, basic marketing has taught the “four P’s,” Product, Price, Promotion and Place (distribution). When our economy was based on product producing companies, this worked well and those companies which practiced these basic principles were among the leaders in consumer products.

However, the world has dramatically changed. In an expanding consumer-driven economy, the “four P’s” were the key, but today things are dramatically different. Today’s is a service economy with a mature consumer base and limited opportunities to expand that base within the country. Increased brand volume can only be found through increased brand share, and competition is greatly intensified. As a result, margins are thinner and the search for additional consumers more expensive.

In such a market, customer retention is typically far more profitable than customer acquisition. Today’s marketers must focus on building enduring brand loyalty – a relationship with the customer. How do the four P’s work in this arena – not very well? Today, it is a fifth “P” – People, which has become the most dominant factor in marketing success. What people? Our Employees!

It is our People who touch the customer and determine, by their interactions, whether our business thrives or not. Our “customer facing employees” may be the most powerful marketing resource available to differentiate us from our competition and build those key customer relationships.

A Gallup study of more than 6,000 consumers (performed in 2003) tested the impact of employees (People) against the other “four P’s” of marketing. The result, whether in automobiles, fast food, retail, electronics, airlines, banking, or long distance telephone service, it was the Employees rather than location, price, or even product quality that brought customers back.

What are the implications of this research? While product quality, pricing and location all remain relevant factors, it is our employees and the relationships they build with customers that provide the greatest differential advantage. So, what are you doing about those interactions?

Do you recognize employees as a marketing resource? Are they recruited and managed as the brand builders (or, at times, destroyers) that they can be? Does your customer service system and training create those critical abilities to connect with the customer?

Employees are far more difficult to control than pricing or promotions or even product quality – and that’s critically important when setting out to assure a consistent customer experience. Customer-facing employees are by far the most difficult customer touch-point to manage to assure consistency of experience. Still, it is because this difficult-to-manage resource isn’t an easy solution that it has proven to be such a powerful one for companies ranging from McDonald’s to Southwest Airlines.

In this summer’s Olympic Games, we had the opportunity to watch basketball teams from around the world compete. These teams devote massive amounts of time to practice and are coached in their performance, both individually and as a team. Too often in business, this just doesn’t happen. We expect employees to work as a team and to accomplish our goals, without training, coaching or practice. Each individual is left to improve their own set of skills.

A Louis Harris Poll of the American Workforce five years ago found that only 19% of the employees in an average company even knew what the organization’s goals were. Of those, only half understood how their work contributed to those goals. Can you imagine a basketball team where the majority of players didn’t know where the goal was or how they fit into the game plan?

Instead of coaches, in business there are managers. Managers should know how to coach, but many do not. Coaching molds a person’s attitude, behavior, and skills. Instead, too many managers seek to control and direct, many using punitive means to gain performance improvements from those they are responsible for developing. Others just leave it to the employee to figure it out and wonder why the results are not coming.

When it comes to customer service, this has not proven successful. Building a real customer service organization requires both systems and training to bring every employee to a level of understanding and performance that differentiates the business from its competitors. It starts from the very top of the organization and must permeate throughout. Only when every executive, manager and employee has the same consistent understanding and approach can the business truly thrive in this new economy.

There are literally dozens of programs on hiring, but how often does anyone work on the other side – keeping the employee that’s been hired?

Let’s assume you’ve done a great job hiring the new employee – after all, you wouldn’t hire someone you didn’t feel was right. Yet, often, within six months to a year, either they’ve left or they haven’t worked out the way you expected. In either case, you’re right back where you started, except for the loss of time, salary paid, benefits paid, unemployment, and, most importantly, lost opportunity.

The problem can occur in several areas, but the one which tends to be most devastating is when we never get the employee truly “on board.” If we’ve hired the wrong person, the quicker we find out, the better. But it is most often the case that we just threw the new hire into the work without adequate preparation – even if we think we’ve explained everything.

Large corporations have entire Human Resources departments to handle these issues. What can you as a small business person do?

1) Make the process of bringing the new employee on-board a planned activity even before the hire is made. Much of this is pretty straightforward:

a. What documents do you need from the employee?

b. What needs to be filled out for payroll, benefits, etc.?

2) Create a simple “employee reference” for incoming employees. What goes into it? Everything you believe the employee will need, early in their time with you:

a. Hours of operation and/or work.

b. Who to call list for information on a variety of issues.

c. Lunch and break times.

d. Sick and vacation policies.

e. Benefits summary and eligibility.

3) Create a job description for this employee. Don’t rely on the last occupant of the position to do this or to “just fill them in” on things. The likelihood is that something will be lost in the translation. Experienced employees sometimes know things so well they fail to think about passing them on.

In addition, it is vital the employee have the basic duties and expectations in writing so they can refer back to them.

4) Think through the “technical knowledge” this person will need to know about your company and develop a written plan for them to attain it.

Many times, small business owners have described to me how they “put the new hire out in the operation” for some time to “learn the ropes.” The problem with this is neither the new hire, nor the people they are working with, have a solid idea of what it is they need to learn. They will learn something, certainly, but will it be what they need in their planned role?

A little time planning this “introduction” can make it 100% more effective. Both the new hire and the people they are working with will understand what they need to come away with and what the objectives of their experience are.

5) Finally, plan to do frequent reviews during the first six months. At first these might be a weekly conversation about what they are learning and what questions they have. After the first conversation, these would be the responsibility of their immediate manager, but if the owner made the hire, the first one should be with him/her.

After a few weeks, go to monthly reviews including feedback on their performance and the expectations ahead. By the end of six months, not only will you have a better grounded employee, but one who is comfortable talking about expectations that might be difficult for them.

While simplified for the purposes of this article, the process described includes the elements of the most successful on-boarding programs available. As always, the devil is in the details; so you might want to consider some further study of the topic to maximize its effectiveness.

Peter Drucker always contended, that “leaders are not born, they are grown.” During the research and compilation process it became evident how right he was.

John Adair’s work was probably the first demonstration that leadership is a trainable, transferable skill rather than being an exclusively inborn ability. His work encompasses much of the previous thinking on human needs and motivation by Maslow, Herzberg and Fayol, and his theory adds an elegant and simple organizational dimension. His view of leadership included the abilities of decision making, communication and time management.

His Action-Centered Leadership model sees three primary areas of responsibility: Task, Team and Individual.

The common base among all the successful leaders of successful companies I looked at was the application of the individual strengths to a situation which responded well to exactly that set of strengths. In effect, it was at the conjunction of need and ability that successful leaders were found.

There was one exception – the ability to derive learning from experience and to continue to grow and change was common to all successful leaders studied.

In small businesses, the skill requirements of the leader and the focus required to be successful will change as the business grows. What works for a small entrepreneurial firm with less than 10 employees is unlikely to work when the organization reaches 30 or 50 or 100 employees. The leader must change and grow on a personal level if he or she is to lead the business in successful growth.

In fact, Jim Fischer (The Growth Curve), found that leaders who did not manage that kind of growth and change, generally had to lay off much of the workforce and return to a level at which their skills were effective.

In other words, if the leader doesn’t grow, neither can the business sustain growth. So how can you or I grow in leadership skills? If learning is the only common element among successful leaders, then learning must also be the key to our success as leaders.

Three methods have proven most successful – a regular program of reading, direct coaching or training, a strong peer group. Let’s take a quick look at each: The reading program: As far back as Earl Nightingale, those who have studied success have touted the value of a regular program of reading. Every business owner should have a library of relevant business books. By spending a half-hour every day reading in these books, one continues the growth process. Successful executives I have coached look to buy at least one new book every month to supplement their existing library. In this way they keep up with the latest trends and thinking on business.

Coaching or Training: There are a great many opportunities in this area. In looking for a coach or training, the most important thing is to find someone who can assess your situation and provide specific help accordingly. Today there are far too many who pass themselves off as coaches or trainers who actually provide the same program regardless of one’s individual circumstances.

This is not to say there is not value since any learning tends to be beneficial. But for the best return on your investment, a more specific approach is superior.

Peer Groups: A regular group of business owners with a structured meeting program can provide not only great learning, but will also provide more specific development opportunities. A peer group structure is important. The facilitator should have a depth of business experience in order to successfully match peers by their needs. In addition, he or she must be skilled in helping each owner leverage the experience of the group to facilitate their own learning.

Regardless of the process or processes selected, you must still retain the primary responsibility for your own development. You must have a good idea of your own strengths (and weaknesses) in the areas of decision-making, communication and time-management. You must also balance development in the three primary areas of responsibility identified by John Adair: Task, Team and Individual.

Only after seeing to your own development as a leader, can you hope to begin the task of developing your organization and employees.

This article is © Copyright Kentuckiana Business Forum 2008. You may not reprint or redistribute this article in any fashion without express written permission of KBF and the author.