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Give Your People Permission to be Brilliant

Michael Houlihan & Bonnie Harvey — Wed, 19 Apr 2017 17:00:13 +0000

These days there are tons of companies that say they want their people to be more engaged, but are they giving them permission to do so? Yes: permission! It’s subtle, but powerful.

Permission is a powerful idea in determining company culture. Are you giving your people permission to be creative, make decisions, solve problems, and take responsibility? Or, in the name of efficiency, structure, or compliance, are you preventing the very type of support you need?

Here are some ways to give your people permission:

Compensation

Some part of employees’ compensation should be based on sales, growth, and profits. It will take some time to identify and agree upon metrics used to measure those key indicators, but get started now and tweak it every year until it’s right.

If you offer a bonus, make it quarterly. A year is too long for them to remember, and after a poor first half of the year, they may just give up. Quarterly is short enough to remember, and if they have a bad quarter, well, there’s a new opportunity next quarter.

Knowledge

Your staff can’t help you if you don’t tell them what you need. Many businesses believe in the “need-to-know” policy which keeps employees in the dark. We believe in the “know-the-need” policy which includes them in the company’s challenges, opportunities and triumphs.

They already have your corporate knowledge and a stake in solving your problems, especially if they share in your success. We suggest quarterly meetings with sales and sales support staff (i.e., everybody not in sales) to brainstorm solutions. They will surprise you with their great ideas!

To read the complete article, please visit The Business Journals

Who We Are

Michael Houlihan and Bonnie Harvey co-authored the New York Times bestselling business book, The Barefoot Spirit: How Hardship, Hustle, and Heart Built America’s #1 Wine Brand. The book has been selected as recommended reading in the CEO Library for CEO Forum, the C-Suite Book Club, and numerous university classes on business and entrepreneurship. It chronicles their humble beginnings from the laundry room of a rented Sonoma County farmhouse to the board room of E&J Gallo, who ultimately acquired their brand and engaged them as brand consultants. Barefoot is now the world’s largest wine brand.

Beginning with virtually no money and no wine industry experience, they employed innovative ideas to overcome obstacles, create new markets and forge strategic alliances. They pioneered Worthy Cause Marketing and performance-based compensation. They built an internationally bestselling brand and received their industry’s “Hot Brand” award for several consecutive years.

They offer their Guiding Principles for Success (GPS) to help entrepreneurs become successful. Their book, The Entrepreneurial Culture: 23 Ways To Engage and Empower Your People, helps corporations maximize the value of their human resources.

Currently they travel the world leading workshops, trainings, & keynoting at business schools, corporations, conferences. They are regular media guests and contributors to international publications and professional journals. They are C-Suite Network Advisors & Contributing Editors. Visit their popular brand building site at www.consumerbrandbuilders.com.

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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Are You Paying for Attendance or for Production?

Michael Houlihan & Bonnie Harvey — Thu, 14 Jul 2016 17:00:01 +0000

When you are a startup entrepreneur, you must hire those who are production driven and not attendance driven. Brian Tracy says, “Fully 80% of all production problems are caused by compensation plans!” In other words, you get what you pay for. If you pay by the hour, you get hours. If you pay for production, you get production. We think the best hires are other entrepreneurs.

When you pay by the hour or based on tenure, you’ll hear, “I haven’t had a raise in a year,” like the amount of time that has passed earns them the raise. You will also hear, “I’ve got enough to keep me busy,” as if keeping them busy is a goal of the company. And then there’s the classic, “I was there. Pay me,” as if their mere attendance is all you needed.

This is not to say that hourly employees and outsourced services ipso facto aren’t good producers. Many are. Especially the ones who know their job is on the line, and the ones who clearly understand their goals and deadlines. But there is far less lurking and sandbagging among folks who get paid for deliverables. They simply can’t afford it any other way!

As an entrepreneur, there is no question in your mind about the critical nature of sales and customer service, but what if your team gets paid whether or not you make sales, and whether or not your customer is happy? Do they have the same incentives you have? Probably not.

We like to say, “If you are paying your people right, the non-producers can’t afford to stay, and the producers can’t afford to leave!” Just take a moment to think about that…

When you pay your people right, you increase production, engagement, urgency, sales and the excellent customer experience you are looking for. Here are some ideas to get you started:

Clearly Define the Deliverables. Plainly state exactly the expectations you have of each team member. It is likely different for each player, so consider this carefully. One approach to get going is to ask each person to make a list of what they do and the relevant deadlines. This gives them ownership and forces them to think in terms of outcome. Then refine this list to better suit your company goals.
Create a Bonus Structure. It’s easy to pay the salespeople on production – their commission is based on it! But what about the receptionist, the assistant, and the bookkeeper? What about the marketing, legal, production and administrative people, and other folks who are paid by the hour industry wide? For them we created a quarterly bonus. The bonus was paid as a corporate contribution to their 401K tax-free retirement plan, matching at 50%, 100%, or 150%, and was based on sales, growth, and profitability.
Take a Smaller Slice of a Larger Pie. Be prepared to share the wealth in various ways appropriate to each individual’s accomplishments. One way is to bonus for a specific accomplishment that clearly adds to profits, like a new client, a big savings in overhead, achieving a stretch goal, or meeting a difficult deadline. Once your team sees the direct relationship between their production and their compensation, they will become more interested and engaged in the process of making your business more successful. Plus, now you have more “found money” to share with them.

Congratulate each one publically for their achievements, especially those who impact everybody’s bonuses. You’ll see more of what you acknowledge, create a stronger and more cohesive team, and get the production you paid for!

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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Busy is Not Necessarily Productive

Michael Houlihan & Bonnie Harvey — Thu, 29 Oct 2015 17:12:46 +0000

Are you paying people to stay busy or are you paying them to be productive? Having a great deal to do or keeping occupied is no measure of productivity. If you pay employees no matter whether the company succeeds or fails, folks will actually look for ways to appear occupied. This makes them feel comfortable that they have filled up their time. But are they making a contribution? Or are they just being busy?

We think this happens because it is allowed to happen. The way these folks have been oriented during the training process, the way they are paid, and the level of their knowledge of the company’s sales, growth, and profitability can make all the difference. With the right preparation, incentive, and visibility, employees will know how to set their priorities so they’re not just busy, they’re productive!

Orientation. This is not something that has to do with the coffee room, the bathroom, or the forms. It has to do with where the money for the company that pays their salary, bonus, and benefits actually comes from. It has to do with how their job impacts that process. It has to do with really breaking it down graphically so there are no misunderstandings about who the real customers are, what they expect, and why they continue to pay good money for the goods and services the company provides.

We developed a “Money Map” to make this clear to all new hires. Not too different from a treasure map, it showed our people how the money travelled to them, who were involved at each level, and what they wanted. This kind of orientation is not a one-shot deal. It should be revised and repeated annually to keep people focused on the real priorities which change as the company strives to remain relevant and advance in the marketplace.

Compensation. We believe at least some part of an employee’s salary should be based on the performance of the company. Sure you can get granular and bonus on specific production, but in order to build team peer pressure and cooperation, you must focused their attention on the customer. And that goes for everybody in the company.

Since most people are coin operated (respond to monetary incentives), a quarterly 401K matching contribution gets the attention of your staff. Base it on agreed upon metrics of sales, growth and profitability. Since the employer’s matching contribution is voluntary, you have the ability to send a powerful message to your people every quarter. This works better than annual bonuses because the one year time period is simply too long and allows your employees to give up if the first quarter is poor, or lay back if the bonus number is met mid-year.

Visibility. If you have their attention with a well-thought-out performance bonus, they will be very interested in how the company is doing simply because it now reflects in their paycheck. So share with them your monthly reports, identify key challenges and focus on priorities during regular monthly meetings. This will help them zero in on the tasks that really make a difference to the bottom line. It will give them the perspective to understand what they can do to improve the picture.

By practicing what we called “Know-the-Need’ rather than “Need-to-Know,” we got great ideas from our people on a regular basis that solved problems in production, quality control, and marketing. We were able to cut costs and increase profitability because they knew what was needed, they knew we would listen, and they were members of a team interested in achieving quarterly bonuses. Suddenly they were focused on being productive and not merely busy!

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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Successful Hiring takes Preparation, Permission and Patience

Michael Houlihan & Bonnie Harvey — Sat, 14 Jul 2012 22:50:59 +0000

No matter what business you think you are in, you wind up in the personnel management business. Your first hires will require a great deal of your time and energy with no guarantees. Your way may conflict with their previous way of doing things.

For the most part, great employees are not found, they’re made. In order to delegate and allow your company to grow, you really have no choice.

All this takes time, energy, preparation and lots of patience, but by working together in concert, you can see wonders.

1. Good Seed. Start with people who demonstrate a high degree of integrity, take responsibility for their own behavior and have a history of long-term commitment. They should be willing to learn and extrapolate conceptual ideas and apply them to new situations. A good way to test this is to give the applicant a verbal run down of the job, the company’s challenges and your expectations for the position. Then, have them send you a one-page summary on a deadline. This will tell you volumes.

2. Good Ground. Make sure their job is clearly defined in writing and explains how your products and services produce the income to pay their salary, bonus and benefits. We used to give our people a “Money Map”. It started with the consumer and worked its way back through distribution, production, and all the payables to finally get to their check. This gave them respect for how and where the money came from – the customer, of course.

3. Care. You must inspect what you expect, especially in the first year. Once you are convinced you have “good seed” it’s worth your while to regularly spend time with them answering questions and mentoring. Listen to what’s behind their questions to discover what they really need to excel in their new position.

4. Light and Space. Give them permission to make mistakes. That’s what allows them to develop into the independent decision makers you need to confidently delegate. To “make those mistakes right,” have them write down what needs to be done to prevent those mistakes in the future. Have them make new polices, procedures, checklists, sign-offs, or whatever, but they have to document everything. Consider rewriting their job description to fit their real skill set.

5. Nutrients. Give them the training they need, in person and in writing. If a document doesn’t exist, have them write it. Create a mini manual for every job with the growing list of frequently asked questions and as many charts and graphs as are necessary to depict processes, relationships and decisions. Provide outside training with conferences, or field time with sales or production staff. The more they understand your total operation, the faster they will become invaluable.

6. Time. How much time you give them before they “get it” really depends on the position, their ability to learn, and how much faith you have in them personally. Some folks take longer but “get it” at a core level. Others may learn a specific process quickly, but miss the big picture. So it’s a judgment call based on your assessment of their progress and conceptual understandings, and the preparation, time and energy you have put in.

Even if you do these essentials, there’s no guarantee of success, but you will be much more likely to succeed. To grow those new hires into fruitful producers it takes preparation, permission and patience.

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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