You’re looking at your expenses, and that health care cost is just glaring at you. If only you could chop that number.
In fact, many employers are. The economic downturn has caused 60 percent of employers to change their health plan or strategy, according to a National Business Group on Health/Watson Wyatt Worldwide study. With the median health care cost per employee estimated to reach $7,400 this year, many employers are transferring costs to their employees.
That may be an idea of your own or a route you’ve already taken. But insurance providers and health care experts are cautioning you to think twice if you want true savings and you want to hang on to your employee base.
“There’s a great temptation I think to short term save dollars, but long term, it’s not a good trade-off,” says David Joyner, senior vice president, large group and specialty benefits for Blue Shield of California. “In the long term, I think employers and employees will save money if we’re able to influence lifestyles because a tremendous amount of life care costs are linked ultimately to lifestyle and diseases that are connected to lifestyle choices other than genetics.”
More than 75 percent of employers’ health care costs and productivity losses are linked to employee lifestyle choices, according to the Centers for Disease Control and Prevention.
Cutting or renegotiating your health benefits can save money. But until you understand what’s driving your costs — your employees’ bad habits — you’re not going to reach the root of the problem. The bottom line is, the more your employees use their insurance, the more you’re paying.
Understand what you’re paying for
To really control costs, you have to understand what they are.
Sit down with your broker or third-party administrator to discuss your claims. You need to understand the specifics of your population and how employees are using their insurance, meaning what services they’re seeking, what medications they’re on and perhaps discern the top illnesses they suffer from.
Larger companies dedicate time every week or once a month to go line item by line item and chart trends, but for smaller companies, it may take months to paint a clear picture. The overall goal is to carve out a specific area your employees are using a lot of and try to find a more efficient way of dealing with the health need. For example, finding out your employees use the emergency room as a physician’s office or pay three times the price of a generic drug for brand-name medication can empower you to seek cost-saving solutions for you and your employees.
“One of the realities of health care is there’s a huge difference in the cost of the health care depending on where it is provided,” Joyner says. “Employers can encourage their employees to make smart choices around health care purchasing. It saves the member money because their out-of-pocket will be lower; it saves the employer money because ultimately employer premiums are driven by, at the end of the day, what the health care costs are of their employees.”
Once you have a better understanding of where you’re spending money, don’t be afraid to look to your broker or health plan provider for advice on the next step. Much of your costs can be deterred by simply educating your employees, and most health insurance providers and local hospitals offer informative tools and programs as aids.
Understand what to educate your employees on
You don’t need to know the specifics, like the annual median cost increase for health care is estimated at 7 percent for 2009, to know costs are rising. And your employees probably notice the difference in their paychecks.
There’s no better time to proposition your employees with ideas that can better their health and save them money. Plus, emphasizing healthy living can quickly boost workplace morale and productivity, which can’t hurt in these uncertain times.
In order to provide your employees with pertinent information, you have to understand what risks they face. Many employers are opting to screen their employees, hiring a local clinic or hospital to come to the office and perform body mass index tests. The anonymous results are later given to you as a snapshot of your employees’ health.
Costs for the screenings vary dramatically. But another option is having your employees fill out a health assessment, which may cost nothing and take little time. Most insurance providers offer online health assessments, which may even be an incentive connected to your health plan. If you opt for an assessment, the provider then takes the information and directly contacts your employee with wellness information and advice.
Either route you go, the group you seek out can help you devise techniques that will speak to your employees’ needs and interests.
Step into action
Now you know the services your employees are using and the health risks that force them to seek care. However, you’re pinching pennies, and investing in a full-blown wellness program, which is estimated at the high end to cost $400 per employee, to support healthy living is the furthest thing on your mind.
But some food for thought: Wellness programs tend to see a 2-to-1 or sometimes even a 3-to-1 return on investment. And results usually can start to be seen in a year.
But wellness programs aren’t needed to see results.
“The big problem with much of the lifestyle change work is actually doing it,” says Dr. William B. Stewart, medical director of the Institute for Health & Healing at California Pacific Medical Center. “Most people have a pretty good idea of what to do, and there are lots of recipes out there for what to cook and how to exercise and how to do all these things, but the big challenge is to actually get off the couch or get your walking shoes on and initiate the actions that actually can benefit us.
“Educating people and making them aware of what the risk factors are and how those risk factors can be ameliorated by healthy choices.”
Some behaviors can be directly impacted at work with no added cost by changing vending machine options, starting a walking club or banning smoking. Ask your broker or a local health association to hold monthly seminars at your office. Ask your provider what free services it offers.
To really get employees to perform, the need for incentives still holds true. Companies have seen immediate savings in paying for employees’ medication if they buy generic.
Another idea is linking an employee’s program participation to his or her health plan. If employees reach lower targets in weight and cholesterol, consider paying for their insurance. Their healthier lifestyle means less risk for chronic diseases and probably fewer medications and doctor visits.
Research will tell you there’s room for creativity. But whichever route you take, you must see it as an investment in your employees and include them in the process.
“In different settings they want different things,” Stewart says. “The more employees are included in the decision-making around which activities are or aren’t provided gives them a sense of inclusion and will enhance participation.”
Capital Media Group LLC has grown from an idea in 2002 to a business posting revenue of $60 million in 2008 thanks to the efforts of Tony Somers and six other owners.
They did it, in large part, by focusing on building strong relationships with a small number of companies.
“You go to the supermarket and there’s two bottles of water, and one is 99 cents and one is 89 cents,” says Somers, president of the wholesale distributor of removable data storage products. “The average individual will buy the 89-cent bottle of water because they are the same. When you’re in a commoditized world, which we are, that’s difficult to be able to differentiate ourselves. I think the big thing is our people and the owners and the relationships they’ve built with customers.”
Smart Business spoke with Somers about how to build customer relationships familiarizing yourself with your customers’ companies and delivering on your promises.
Understand your customers. The key is, what’s going to help somebody’s business, help them grow their business. If, ultimately, you’re bringing them an opportunity to add greater profitability, greater efficiency to their organization then, by definition, they should look to you as someone that they see as a valued partner.
If all they see you as is another me-too, then they’re more than likely going to say, ‘Well, we’ll see.’ You might get orders, but you might not develop that long-term relationship.
It’s key that you understand their business, whatever their business is, and make sure that whatever the offering, you give them slots into the model, that you’re not trying to fit a round peg into a square hole sort of thing.
You have to, first and foremost, get to whoever the senior decision-makers are within that company. Often, buyers aren’t owners of the company or part of their executive or directors team, and their objective might be just to get the lowest price possible.
If that’s the case, the best way to get to a company is to get to the people that are, A, running it or, B, started it and are owners of it because no one is going to know the business better than those individuals. They could be in finance, they could be in sales, they could be in marketing operations. But the more you get to know the owners or the senior decision executive people within that organization, the more likely you’re going to be aligned with whatever their goals are.
To just call and say, ‘I have a great price for you’ to anybody in that company may get you an order, but it probably won’t build you a relationship.
(It’s) time, persistence, face to face. Calling someone over the phone is not very easy. You do have to, from time to time, go out and sit down with that owner and say, ‘Listen, I know we’re not on the day-to-day basis probably going to be doing a lot of business, but your team will probably be interacting with my team. I want you to know our objective is to try to make sure we’re aligned with whatever your objectives are, but let’s make sure that we are. So please give me the vision of your organization, your company, and make sure that we can all fall into that model in a way that’s conducive to what your success is.’
Deliver on your promises time and again. No good or strong friendships are just based on the first impressions, they have to be built up over a set period of time; certainly it’s not going to happen overnight.
You have to be able to provide your customer with something that they feel they haven’t as of yet seen from someone else. Again, when you’re in a commoditized world like we are, that’s not easy. I would think the only way to do that is to develop that relationship, and again, time is the only way that’s going to work.
You’ve got to be able to say, ‘We’re going to do this,’ whatever this is. ‘We’re going to make sure it happens that way,’ whatever that is. And then once you make that delivery, make sure you follow up and say, ‘Did it work that way; did you get what you wanted?’
Then after two, three, four, five, six times, however many times it takes, you hope the customer then says, ‘OK, I know practice makes perfect; it’s not just a fly-by-night operation. It’s somebody that will give me that consistency on a every time I need it sort of basis.’
In my opinion, it’s probably going to be more than likely something that evolves, as opposed to just happens.
Maintain an honest relationship. If you’re going to say, ‘I’ll have it there Friday’ … make sure it’s there Friday. If you can’t have it there Friday, make sure you follow up on the original commitment and say, ‘OK, I know I said Friday; it’s now going to be Monday.’ Don’t just walk away from the commitment you made and cross your fingers with the hope that it goes away.
If you’re going to make a commitment, live and die by it. If you’re going to miss that commitment for whatever reason, be honest about it.
How to reach: Capital Media Group LLC, (614) 729-6800 or www.capitalmedia-group.com
Tony Gunter once felt that company owners hauled trucks full of cash to their banks each week with little appreciation for the employees who helped them earn it.
Now, Gunter, the president of Echo 24 Inc. who co-founded the company with his wife, Lisa sees things differently, and he wants his employees to know that.
To gauge whether employees understand that, he uses surveys to gauge satisfaction at the contracting company, which posted revenue of $5.6 million in 2008. Previous surveys have led to the implementation of recognition programs to show employee appreciation.
Smart Business spoke with Gunter about how to use surveys to better your company.
Q. How do you craft questions to use on employee surveys?
We wanted to take the temperature of the company. There was an opportunity to see what the field technicians thought of the middle management supervisors, to see if they felt like they were treated with respect or if they were comfortable approaching them if they had a problem.
I created five columns where they chose ‘strongly agree,’ ‘agree,’ ‘not sure,’ ‘disagree’ or ‘strongly disagree.’
We had questions like, ‘Echo 24 is a good place to work.’ ‘Middle management treats its workers with respect.’ ‘Upper management treats its employees with respect.’ ‘As soon as something better comes along, I’m out of here.’ ‘Middle management has no clue what it’s like to work in the field.’ ‘I see a future for myself at Echo 24 and would like to continue working here for many years.’ ‘I don’t care about my quality of work as long as I get paid.’ ‘Even though I signed the acknowledgment, I never bothered to read the employee handbook.’ I actually had two people say that they agreed with that.
Q. How do you present the survey to employees?
I announced that we were going to be doing it and to watch out for it.
We stuffed the surveys in their paychecks, along with a preaddressed, postage-paid envelope with instructions. We asked them to fill them out truthfully and simply put them in the mail. We stated that if they attempted to hand them in we would not accept them, and we also said that if they wrote their name on them we would discard the survey.
First, we wanted them to be comfortable with complete honesty, but we also didn’t want some joker filling out a really negative survey and then put someone else’s name on it.
We got about 60 percent response from our employees. I was hoping for more, but I think people have quite frankly gotten tired of doing them.
Some might also conclude that the 40 percent who didn’t respond are simply content and felt no need to convey anything either positive or negative.
The only other way to get more participation, however, would be to have the employees fill them out at work on company time, but then we probably won’t get total honesty.
Q. How do you communicate survey results to employees and show them you listened to their comments?
What I plan to do is put together a PowerPoint presentation and go through it with everybody during our weekly safety meeting.
The (previous) survey, we sat down with everybody and went through all of the results. It was the recognition that they didn’t feel. It was an area that we saw that could use improvement. That was when we created the quarterly recognition program.
When it came to recognition ideas, all kinds of things were tossed around, but it was important to keep the focus on recognition as opposed to monetary-type awards.
One of the things we’ve done is we have come up with a quarterly recognition program for safety compliance. If you’re from Ohio, you know what the buckeye stickers mean on a football helmet we’re doing the same thing. Construction workers love stickers for their hard hats, so we came up with that program where we’re recognizing people for meeting all of our safety criteria on a quarterly basis. We also do a Technician of the Quarter award where I accept nominations from all of the management, and then we pick one candidate on a quarterly basis.
I came up with the idea of the stickers, along with a set of criteria each field employee had to meet in order to qualify, and I presented it to the team. It was very well received, and we voted unanimously to implement it.
Q. Why is it important to do employee surveys?
It’s important if you care about what’s going on. Turnover costs a business a lot of money, not only the cost of recruiting and advertising for a position but the time it takes to interview and research the candidates and do background checks on them.
If you’ve got somebody who’s not happy out there, they can really do some damage, either by hurting your reputation by the things they say to your customers or the quality of work they’re doing that isn’t good.
How to reach: Echo 24 Inc., (740) 964-7081 or www.echo24.com
As David St.Clair has grown MEDecision Inc. from a one-man business in his basement in 1988 to a $50 million company, the hardest part has been allowing others to lead in areas where he lacks expertise.
“[It’s been difficult] figuring out how to allow people with the right experience, the right skills and leadership styles to lead in areas where I’m relatively weak, either by virtue of my inexperience or personality,” he says.
Through trial and error, St.Clair says he’s found a method that has led to success for him and the health care technology company’s 240 employees. It starts with understanding your own weaknesses. Then, you have to recruit people with skills in areas you fall short in. And lastly, you need to convey to employees that it’s OK to offer their opinions and even challenge the boss.
Smart Business spoke with the founder and CEO of MEDecision about how to use your employees’ strengths to balance your weaknesses and better your company.
Determine your weaknesses. It’s being brutally honest with oneself, being introspective enough to recognize and to listen to others about what you’re good at and what you’re not so good at.
Sometimes the business shows it when you try to do everything. But I think some of it is also paying attention to what you’re drawn to and what you tend to shy away from.
For me, for instance, I think I’m very, very good at taking ideas and making them real. I’m not good at making things routine. So I will try to reinvent a process, reinvent a product, every time I look at it or talk about it, as opposed to making it something that is repeatable.
There are very few people, I would argue, who have the breadth and depth to do everything very, very well. Simply pay attention to that, and be willing to bring in the right people to shore up where you’re weak.
Recruit people with the skills to balance weaknesses. In the beginning, I was always looking for what I referred to as athletes, people who are very good with a set of skills but really were in a position to help do virtually anything.
As we’ve gotten bigger, we’ve been able to go and get more specialists — people who have even greater depth in one particular area. You start seeing the opportunity to really shore up your own weaknesses and the rest of the team’s weaknesses because you can go out and look for folks who are clearly best of class.
There are many people who have a tendency to want to recruit … below them, people that they can be sure that they are going to be able to control for the next period of their own careers. You need people who are not always bright but people who are willing … to make their point because I recognize that I am not always right.
Let employees know that it’s OK to challenge you. It’s always difficult for the CEO and the founder of the company to truly be sort of one of a group of peers, so you really do have to work on it.
I have lunches with two or three of our new employees after they’ve been here a few weeks. The purpose of that lunch isn’t to talk about mission, it’s not to talk about our business, it’s to talk about each other, where they grew up, where I grew up. It really is an attempt to let them see, in so many ways, I’m just like them. I try to make it clear that I can be approached that way, as well.
Some of it is based on what happens in team meetings. Particularly the folks that have been with me for the better part of those 20 years, they’ve known us when we were smaller and much easier to deal with, and they will argue with me.
What we have to make sure is that anyone who is observing that recognizes that arguing with David is not a career-limiting move.
You have to walk the walk. What I think about all the time, and I do mean all the time, is, how are my actions encouraging? How are my actions, my approach, my body language welcoming people’s opinions? And just as important, what is it that I might be doing? How am I responding in ways that might be shutting that down? If I’m overly critical, if I’m overly sharp at a particular instance, how many people in that room has that now made worry? It’s something, particularly with the leadership team here, we talk about. It’s not the elephant in the room.
Know when to give in to employees’ ideas. There are certain areas, and this comes in areas of strategy, for instance, where I’ve said, ‘I would be much more comfortable letting go if the feedback I get uses the right words.’ In other words, if I hear that strategy being played back in discussions about what we’re doing and how we need to think of our products from other people, that tells me that our overall guide for our business has been metabolized, that the organization gets it.
It’s really this notion of, ‘Let’s have a conversation where I hear back from you how our vision, how our strategy plays into the decisions you’re making and things of that nature. The more I hear that, the more comfortable I am stepping even further back.
How to reach: MEDecision Inc., (610) 540-0202 or www.medecision.com
For Paul J. Testa, interviewing customers is just as important as interviewing potential employees.
“It’s hard for people to turn away business, but it could be the best thing you ever did because you have to like each other,” he says. “I tell people all the time that when we’re talking about doing business, it’s like a marriage; we’re courting each other.”
Building solid relationships with customers starts with working with people you respect and who complement your culture and then understanding the customers and their needs.
Testa, founder, president and CEO of Testa Cos., attributes his company’s growth to the way it treats customers. In 2007, the construction and real estate company posted revenue of $38 million, and by 2008, that number had grown to $66 million.
“At the end of the day, my customers are the most important thing,” Testa says. “I want to say more [so] than my employees because the customers are the bosses.”
Smart Business spoke with Testa about how to evaluate customers and understand their needs.
Start with an interview. We were meeting with a church group about doing something with them, and we had to meet with the whole congregation and do a presentation. I said, ‘I recognize that while I’m standing up here, you’re all analyzing what I’m saying to you and what I intend to do for you and whether you want me as a contractor or developer. But you need to know that I’m interviewing you at the same time you’re interviewing me and seeing if I want you as a customer, because we turn down more work than we do every year because I’m particular on whom I’m working for.’
I like to find out about, obviously, the financing part of it. Are they capable at the end of the day of paying us? If they’ve had the process before with other builders and developers, and if they have, the first question is, why aren’t they going back to them? What happened to cause you not to go back to that particular builder? I need to understand that because they weren’t being fair with the builder or the builder wasn’t being fair with them.
It does not matter what you are selling or offering as service. The basic question is, why are you not willing to do business with the firm that you were in a relationship with [before]? Did they not give good service? Were prices to high? Were they not willing to admit their company could make mistakes, and then not be willing to fix their problems? Did they not deliver on time? Or the tough question, did the client fulfill their end of the bargain?
It could be a problem customer. It’s hard to let business go out the door, but sometimes the deals you don’t make could be the best (ones).
Understand your customers’ needs. I have a book on my desk. It’s called (‘The Five Love Languages’). It’s how I evaluate my employees. It’s how I evaluate my customers.
Everybody has one of these qualities. Every person that you know, the goal is to figure out what their love language is.
One is quality time. Some of my customers are more the type that want to go to lunch with me, want to sit down and talk to me about their job, want to constantly be updated on where things stand. They have a need to know. They don’t want to be sent e-mails; they don’t want to be put off on the phone.
I try to understand each person and what it is that makes them feel good about themselves, feel good about working for us and with us.
What is it that Mr. Smith wants from me besides building a good product and a good price? What does he need?
Listen to what your customer wants and be honest about what you can provide. If I have one good quality in me, I’m able to put myself on the other side of the table and I listen. God gave you two ears and one mouth. You’re supposed to listen twice as long as you talk.
I’ve learned to listen to what it is they’re asking me and what it is they need from us. Be realistic in, can I accomplish that for you? Can I do what you’re asking me to do, not because I want to do it, not because I need the money, can I do it for you? I think that’s an important aspect with anything. Don’t oversell yourself.
I have one good builder friend, his favorite line is, ‘What you see is what you get.’ I like that. ‘This is what we can do. If I can’t accomplish it and I’m going to leave you hanging, I’m going to find someone else I suggest you go to.’
That’s what you have to be able to do. You have to be able to say, ‘Look, I know how I feel as a consumer, so therefore, I know how they feel as a consumer.’ I’ve been on both sides of the table, and I can put myself on both sides of the table. I can be open-minded enough to understand, even if I differ, understand what it is they’re asking me or what it is they want from us.
Treat the customer as if nothing else matters. It’s stopping everything around you.
Don’t take phone calls. Don’t take e-mails. Don’t be interrupted. Sit in a nice quiet setting, get to know them, get to know their desires and wants.
Then really pay attention again to what it is they’re asking you.
How to reach: Testa Cos., (330) 928-1988 or www.testacompanies.com
For Albert M. Green, moving employees toward a common goal is in the art of being a consensus builder.
“You want to get as many people as you can on board with the direction you want to go,” says Green, CEO of the 60-employee Kent Displays Inc., which develops and manufactures Reflex liquid crystal display products.
The keys to building consensus among your employees are leaving your ego at the door, realizing that others might have better ideas than you do and involving employees early in the decision process, Green says.
Smart Business spoke with Green about how to become a consensus builder.
Q. What do you need to keep in mind when trying to build a consensus?
Put your ego aside is the first thing. You have to have enough confidence to realize that other people have as good or better ideas than you do. Those are the two things.
You’ve got to be very confident in yourself. There’s a fine line between confidence, arrogance and cockiness, but you have to be confident in that you are not easily threatened. That is what allows you to build consensus because you’re not threatened by other people who have better ideas than you have.
You don’t have to go in with, ‘I’m the smartest guy in the room, and I know everything and all this kind of nonsense.’ You have confidence in your ability, and what you do is you seek others and other people’s opinions and you mold those together. But you don’t have to get all insecure about the fact that your idea might not be the best one.
You have to be open to ideas. You have enough confidence that if somebody else is right and you’re wrong that you’re OK with that. So you’re self-confident, as opposed to being bullheaded.
Q. How do you promote consensus building among employees?
Getting people involved early and often. I talk to people rather than e-mail them. It’s a standard thing about getting people on board with communicating to people.
It’s not just telling them what you want. You listen to what they’re saying. You mold a bunch of opinions into a single, coherent approach moving forward, and you have a lot of buy-in because a lot of people contribute to it.
Q. What are the keys to getting people involved early and often?
You need to have people take ownership of things. It’s hard to have people take ownership of the things when you bring them in at the last minute.
If you bring people in in the last minute, they’re doing what you tell them to do as opposed to taking ownership of it and making it something that they see as theirs. Then, they drive it through because they’re interested in it, not because you tell them to be interested in it.
The person has to be self-motivated. That’s one of the three pillars. I would say, self-motivated, they have to have a really good work ethic, and they have to have strength of character. Those are the three things that I look for.
You get those kinds of people, surround yourself with those kind of people, then a lot of this stuff takes care of itself.
Q. How do you mold several opinions into one decision?
It kind of happens naturally when people are involved in the process. They tend to have an input, and they steer it. When I get into a critical decision, a lot of times I don’t know what the right answer is, so we as a group can talk about it and argue about it.
It’s a dialogue. There’s a lot of dialogue. I’m the final decision-maker, but there’s dialogue.
People don’t always agree. You build the right management team where there’s trust among the players. All the people on the management team have to leave their egos at the door. They have to be willing to dialogue and debate issues, and that’s about building consensus.
If you have smart people that are rational and can think through things, you generally come to an agreement based on the set of ideas that come to the table.
Q. How do you, as the leader, maintain a voice during this process?
The thing that you have to be careful about is that I want to emphasize consensus, but there is one CEO. You still have to take responsibility for the actions of your company; that’s why you have to be the final decision-maker. You’re accountable for the company.
Accountability is distributed throughout the company on different levels. But there’s still one CEO, and that has to be clearly communicated and people have to understand that.
What (employees) want is that they know that they have an impact and what they say really matters. And it really does fundamentally.
How to reach: Kent Displays Inc., (330) 673-8784 or www.kentdisplays.com
It’s not many bosses who dangle the possibility of an annual cruise in front of employees for a job well done, but that’s one way Dave Zillig ignites performance at DAZSER.
Zillig and Stephen Roesch — who founded DAZSER to operate JaniKing International Inc. franchises — have found it’s easier to motivate employees when there’s a bright light — or, in their case, a cruise ship — at the end of the tunnel. To keep the eyes of DAZSER’s 60 employees on the ball, the pair has devised a goal-setting and monitoring system with daily objectives.
“How do you define a good or bad month? It’s very hard to be objective about it,” says Zillig, who serves as president. “We wanted a more objective way about it.”
He attributes DAZSER’s growth to outlining a clear framework of objectives for employees to work with and closely monitoring the results. In 2008, the franchisor of the commercial cleaning company posted revenue of $40.8 million.
Smart Business spoke with Zillig about how to set and monitor goals.
Define a target. You have to have the end in sight. First, what do you want to accomplish, and then work backward.
Most business owners know what the target is. We knew what we wanted to accomplish each year, and we worked backward form that, what that would require in terms of activity levels. All of this can be regulated to formulas.
Take the target, the goal, and break it down to the lowest common denominator, down right to what’s going to have to be done on a daily basis to achieve that.
We’ll track each day as to how many proposals were delivered by each rep, how many quote calls were made, how many sales in terms of contracts and dollars.
If we don’t think it’s important enough to measure it, (the employees) are not going to think it’s important.
Get every employee involved. Whatever the goal is, everyone has to contribute to that result. It can’t just be sales. Whatever the target is, I think you’ve got to involve multiple departments; otherwise it just doesn’t achieve that sense of teamwork you’re trying to accomplish.
Sales, operations, regional manager, customer service — they all have measurable results that we can determine.
Everybody buys in because it’s very doable. It gives them a structure, a framework to work within that they know if they follow that plan, they’ll be successful.
Don’t set the bar too high. I’ve seen some team goals set that were sort of pie in the sky. I think they became demotivating because people hadn’t come anywhere close to achieving it in the past.
It becomes counterproductive because people just made a decision that it was not realistic. Realistic is everyone has to do their job.
Most people might think you take all of the individual goals and add them together and that’s a team goal. We look at it a little bit differently. Just take people’s quotas. Quotas are the minimum level of performance to keep your job.
There’s quotas, and there’s target. If we were using targets, we would probably be setting it too high because then what we’re saying is, we want every person to be a star in order to hit the team goal. But not everyone is going to be a star. I think that’s what makes it unreachable.
We just took the group goal and said, ‘Listen if everyone does their job … hits their quota, hits their objective, that’s what we used as a team goal. It doesn’t sound like we’re setting the bar too high, but what we took into consideration is there’s turnover — there are new employees that will take a while to ramp up.
By taking everyone’s individual quotas and working that through the numbers, that’s a healthy team goal because everyone did their job for the whole year.
Monitor your results closely to stay on target. We’re going to go back to what we used to do, which is getting back to more daily accountability and weekly. We have monthly reviews and monthly recaps, but you really can’t affect the month when you’re always looking back on it. Success happens in what you do each day.
We want our sales managers to have daily recaps with their salespeople. Brief, just talk about what transpired the previous day and what you have today and get back to more managing the results one day at a time rather than a month or a quarter looking back, which is always sort of retrospective, and it’s too late.
There’s a sense of urgency when you’re looking at what was accomplished each day. I think that carries through to the entire staff.
They have a daily recap that they’ll review with their sales manager. That feeds a weekly recap, the weekly recap is what the regional director will see and myself. Then the weeklies feed the monthly.
The monthly goes into our formal statistic book that comes out every month. It’s a comprehensive book of everything that happened in the office that month broken down to even how many calls each telemarketer made, how many appointments they set, how many proposals, how many appointments didn’t turn into proposals. Every aspect of our business we can dig deeper to find out what went right or wrong.
We share that with all the regional directors and they share that with their staff. Then we talk about what we’re going to accomplish the next month.
How to reach: DAZSER, (727) 797-7744 or www.dazser.com
When Bob Dillon bought Unique Home Solutions in 1993, it wasn’t because he had a great desire to own a business. Instead, he just wanted to be part of a company that cared for its employees.
Since then, Dillon has evolved that philosophy into a process of empowering employees to reach their full potential. And that starts with realizing you have to delegate responsibility, teaching employees, talking them through problems and rewarding them for a job well done, says the president of Unique Home Solutions, who, along with his 125 employees, has grown the home improvement company to 2008 revenue of $15 million.
Smart Business spoke with Dillon about how to empower your employees.
Q. What are the keys to empowering employees?
First of all, be willing to do it. That can be the hardest part, being willing to delegate it.
Look at the benefits. A lot of small business owners I see, they are underpaid and overworked. They work 100 hours a week for less of a paycheck than some of their employees get. The reasons they do that is that they don’t want to empower or delegate.
So first of all recognize, if you have any sized company at all, you cannot do everything. Second of all, identify your key employees, then start showing some trust in them. Ask them questions. ‘What do you feel you can do just as well without me being involved?’ Then build on that. Have constant education and training.
I think a lot of businesses do a highly inadequate job of education and training. That’s where they fall short.
Q. How do you educate employees?
We have initial written training and certification in all of our departments. We have monthly and quarterly re-evaluations that are in writing or, in the case of installation, not only written but field, hands-on.
(Evaluate) attitude, although that’s subjective — more of a willingness to go the extra mile to get the job done. Performance — if you do a sales call, do you do it the way we want you to do it 70 percent of the time, 80 percent, 90 percent?
First, you have to analyze the job. You’ve got to know what the job is that you’re asking them to do. You’ve got to know how you expect them to do it and why you expect those things.
When you have that written out, then you can come up with questions that will evaluate their knowledge of each part of it.
The first person that needs to know it is you because you can’t evaluate anybody else if you don’t know what your expectations of them are.
We go to a lot of seminars to look at industry standards — we expect to exceed industry standards — and then we look at past performance. Then, we’re constantly looking for ways to improve past performance.
Q. How do you work with employees on their performance?
Understand and recognize that once you give somebody the power to make a decision on their own, it’s not necessarily going to be what you would have done in that same circumstance.
If they do something different than you ... you have to step back and say, ‘OK, did they do it better than I would have done?’ If they do, then you have to recognize that: ‘You know, you actually did this better than I would have handled it.’
Was their situation, was their response, just different but adequate or as good as yours? Then, you say, ‘Well, here’s another way that you might have done it. I don’t know if the results would have been any different, but it gives you some flexibility the next time you look at it.’
Then, they might have screwed it up. You have to say, ‘OK, I understand you had good intentions. Here’s what the consequences of your actions were, and here are the actions that I would have wanted.’ Not making them feel bad that they made a decision, but try to teach them the processes of making a decision.
Q. How do you reward employee performance?
When I’m trying to get people to perform to the best of their ability, I have to communicate to them in short-term benefits to them.
We have bonus plans, so that it translates into money in their pocket for the better service that they do. We have a monthly bonus breakfast meeting where we pass out awards and give recognition.
But you also have to feel in control of your destiny.
If a service guy goes out and he does a little extra work, which costs us a little extra money on the service because he deems that it’s right, he doesn’t have to worry that he’s going to come back in and get yelled at for doing that. He feels in control of the service. We do surveys to make sure the customer is happy. They get bonuses on successful completion of services and good comments, so they get short-term monetary benefits.
Every system we have in place in that department is designed to support that.
How to reach: Unique Home Solutions, (317) 337-9300 or www.uniquewindowanddoor.com
Empowering employees starts with giving them the right tools to succeed, says Stan Bunting.
“Empowerment is always a concept people are readily willing to say, ‘Yeah, that makes sense.’ But you can’t empower someone just by giving them new responsibilities and not spend the time to prepare them,” Bunting says.
As president, CEO and majority owner of McCoy Inc., Bunting says there’s a two-step process to empowering employees. First, you train them. Second, you have to allow them to learn by making mistakes.
Bunting has put those steps in place at McCoy, with many of his 350 employees going through in-house training courses or mentoring programs. Annual performance appraisals allow the office furniture company to put employees with management promise on a career training path, learning finance and leadership skills. Newer employees learn the ropes next to their own mentor.
By both formal and informal training, Bunting essentially grows his own employees at McCoy, which posted 2008 revenue of $121 million.
Smart Business spoke with Bunting about training employees to meet your company’s needs.
Carve out time for training. The person that is being given greater latitude, whether it’s greater latitude in their job function or decision-making or whatever, really should be told that’s what is happening. There is a process, and there should be a certain amount of training and preparation prior to greater empowerment.
There’s formal training, where there are very specific steps involved, and then there is the softer side of training that is more of a mentor relationship between the person who is growing in their job responsibilities and the person who is allowing them to grow.
If you’re going to build curriculum, you have to get experts that understand how to build a curriculum. We used an outside service.
I have taught those classes to begin training in soft skills. We sent six of our leaders here to training. It was a ‘train the trainer’ kind of an approach. Then, we came back, and with a cross-section of the population, we would go through formal training classes.
Most companies are working at a very efficient level, which means your people don’t have a lot of extra time to go to training classes. If all you do is add this on top of everything else that they have to do, it’s going to be very difficult for them to get it done.
You’ve got to give them the time to go to training and apply some of the things that must be applied. You’ve got to block it out for them. You’ve got to take them out of the work pool for a certain amount of time to give them time to go to training. It’s not a nights-and-weekends type thing; it’s not fair.
Mentor your employees. Formal training is not very successful without the mentoring. Many times, formal training only gives us a language, which we’re both working in to be able to discuss these things. A lot of the actual training comes in real-life experiences.
Both parties have to be fully engaged. It cannot be something you’re going to do when there’s time left over, and it can’t be something that you’re going to do just by happenstance. You have to be thoughtful about it, and you have to (plan) it, and you have to make sure you’re really making the investment in time — both parties.
For example, in the sales relationship, we put junior salespeople with senior salespeople, and those people are the mentors for the junior sales rep. They go out on calls with them, they understand how to enter orders, they get involved in pricing.
They do it as peer-to-peer relationship, not as a management-level person to someone else in the organization.
Once you’ve done some mentoring, you give them a chance to go work on their own. You see how they handle their mistakes and answer their own questions. When they’re able to kind of ride that bicycle without the training wheels, then they’re ready. But it’s a judgment call. You have to eventually allow them to take a risk and let them go.
Encourage risk-taking. The second component has more to do with the person that has decided to empower another individual. I think the leader that has decided to empower another employee in his business has to be willing to take a little bit of risk, because if they don’t, it’s really not empowerment, it’s micromanagement.
We talk a lot in training in our management group here about not micromanaging. Set large goals, set large metrics and measure those, but don’t measure the minutiae. There’s a lot more learning that goes on when you allow people to solve problems on their own instead of constantly checking in.
If you’ve done the proper training and the proper preparation, then you’ve got to be willing to let them make mistakes as they try new things. Let them learn, and help them learn from those mistakes.
It’s OK to take risks and make mistakes because that’s how we learn from them. You can say that all day long. You can state it in your values, but you also have to demonstrate that. When someone makes a mistake, you can’t then go in and punish them.
You should go in and work with them, and help them learn why the mistake was made and so on. But it should be done in a very constructive manner, in helping them build and learn, not in a punitive manner.
How to reach: McCoy Inc., (713) 862-4600 or www.mccoyinc.com
The interview process is as much about judging potential employees as it is about auditioning for them, says Andrew C. Jacobs.
And making sure a candidate is the right match is never easy.
“That’s the hardest thing to do,” says Jacobs, president and CEO of Influent Inc. “The higher the position, the more difficult it becomes.”
The candidates who reach Jacobs’ door — mainly potential managers — all have the required education and the qualifications. So it comes down to getting to know people and letting them get to know you, he says.
Sure, you rely on past experience, but not everyone has the work chemistry you’re looking for. Engaging in conversation and allowing your employees to talk with candidates can help you learn if they’re a good fit for you and vice versa.
Interviewing is something Jacobs is well-versed in. The call center operations company, which posted revenue of $48 million in 2007, has 2,000 employees — 80 of those in its corporate office.
Smart Business spoke with Jacobs about the steps to hiring the right managers.
Spend time with job candidates. It’s really hard in an interview process to get to know somebody well enough to really know if they can be successful or not.
The most important thing is to spend enough time with them. When they’re people who are going to be reporting to me, it’s very important that they spend enough time with me to get to know me a little bit and I get to know them so we can judge just on a fundamental level whether we’re the kind of people that like dealing with each other, whether there’s some decent chemistry there.
I want people who come to work for me to feel coming in, ‘This is the kind of guy I’m excited about working for.’
But really it’s just engaging in conversation. It is establishing that personal relationship.
In the end, what I rely on the most is to be as open, as honest and as frank as I can be about the kind of company we are, what we’re looking for, what our goals and objectives in the world are. Just talk to them about that and see how they react to that.
It achieves two things: I get to know more about them, and they get to know more about us, and it helps them make a better decision.
Place job candidates in roles the position calls for. Try and figure out ways to see how they react to different kinds of situations, how they react to a question that elicits stress, like, ‘Why did you do that?’
We tend to ask things like, ‘Can you describe to me a situation where you’ve been given an objective and a time frame but no particular sort of road map on how to get from A to B? Have you been in that situation, and if so, tell us about it. Tell us whether you were successful. Tell us how you went about it.’
When we think about what we’re really looking for in managers, (it’s) the ability to get from A to B, to be kind of a self-starter to a certain extent.
One of the most important things to us, both internally and externally, is to make sure that there’s an honesty and a trust — and the employees can trust the management and the management is honest with the employees and, in particular, with our clients.
Since we put such a high regard on that, we might also ask them, have they been in a situation where they had an ethical dilemma in their prior employer, and if so, how did they resolve it. And then maybe give them a hypothetical ethical dilemma we might face here and ask them to respond to it.
Find out their record of success in similar positions. The best predictor is they’ve been in that situation before.
That doesn’t mean that if people haven’t been in that situation before they can’t succeed. But obviously, if people have been in that kind of environment or that kind of situation before and have been successful, then it’s obviously an indicator they might succeed. The second easiest way is … talking to people that they’ve worked with or for before and find out how they’ve performed in other situations.
Seek employee input. One thing that is really important is having them talk to other employees in the company, other people of various levels in the organization, about what it’s like working here.
It really comes down to two things. I stress so strongly the need for people to understand who we are, what we do and how we do it, and what it’s like to work here. The one thing that I do ask everybody to do when they’re interviewing a prospective employee is to give them as realistic as possible view of what life is like here — both the good and the bad.
Of the other employees here that might interview a potential manager, we put value on all of the responses we get. We have a set questionnaire that each person fills out after they’ve interviewed a candidate. Part of that questionnaire is very specific questions, part of it is always the general: Tell me everything you haven’t already told me about your interview.
You get a lot more information, and you get a lot more specific information if there’s a couple of pages on broad questions you ask each person to respond to. Otherwise, it’s too easy for people to just say, ‘I like him,’ ‘I didn’t like him,’ or ‘Hire him.’
How to reach: Influent Inc., (800) 856-6768 or www.influentinc.com