Business Success: No such thing as profit?

Business Success Logo

Business Success LogoThat’s right, that’s what the headline says: No such thing as profit! I guess we can all go home…

Wait, wait, just kidding. Don’t go — read on. This week’s Business Success columnist, Mark Faust, founder of growth and turnaround consultancy www.EchelonManagement.com and author of Growth or Bust! Proven Turnaround Strategies To Grow Your Business, explains what he means by “no such thing as profit.”

mark-faust-gob

Author and business growth expert Mark Faust

What is your goal when it comes to profits for your business? Is it to maximize profits? Is it to make as much as you reasonably and ethically can make while delivering as advantageous product and service set as you can to your customer?

The fact is aiming to make the “maximum” is exactly the opposite of what you need to be aiming for. The fact is that if you ask what your human, physical and financial resource requirements are in order for you to grow enough to secure your future and vision, the right question to ask is something completely different. The right question to ask is:

  • “What is the minimum we must make in order to achieve all of the above objectives and sustain the necessary growth our organization requires to realize our vision?”

That’s right, the minimum. The fact is that the minimum “profit requirements” may be more than what you current “maximum” target may be.

Another fact about “profit” is that there is no such thing; there are only costs. A problem that we have in society today is that both the non-business and business sectors have a delusional view about this thing we call profit. But we can’t blame government or the public for this delusion; we must blame business leadership/ourselves for not making this clear both to our teams and to the public.

We must make clear that there are no profits, but only costs, and we must understand what those three kinds of costs are.

First there are the factors of production, i.e., the necessary resources to produce and deliver: i.e. labor, physical resources and capital. When you have properly conducted your strategic thinking and visioning for the business, and you have thought about what the optimistic potentials for growth may be as well as the most likely potentials for growth, you can immediately begin planning for likely resource requirements for sustaining such paths of growth. You must list out your growing human resource requirements, potential new physical resource requirements and their costs and perhaps even the cost of capital. When all these required costs are tallied, only then can you begin to determine what today’s profit requirements are so that you may be competitive in the future.

Second there is the cost of future jobs and pensions. Business earnings whether they are kept inside the business or paid out into the capital market are the key source or fuel for future jobs and the largest source for future pensions.

Third profits are needed to compensate for future risks and uncertainty. No leader can predict the future. The odds are always in favor of some loss or adverse condition in the future, therefore it is critical to withhold profits for the inevitable future losses, costs and changes that are risks and uncertainties that no one can predict.

The above thinking is de rigor for any strategy and implementation process. If you have recently completed a planning process and didn’t determine future resource requirements and thus the minimum profit requirements to maintain an optimal growth trajectory, then you didn’t really complete the first steps of the strategic thinking process.

What is fascinating is to watch how much faster companies grow when they’ve adequately planned for future resource requirements and when they have repositioned the perception of profit both at the leadership level and throughout the team. This inevitably leads to great improvements in innovation and new profit.

Your first responsibility is to make enough profit to cover the costs of your business’s future; if you don’t, then there is no future for your business nor for all that it may be able to offer to your community and society.

Business Success: Words to the wise

Business Success Logo

Business Success LogoI don’t care what the children’s rhyme says about sticks and stones; we all know words can really hurt. The right words can also really help. In the time-crunch frenzy of our daily work lives, it’s easy to keep our messages to each other as quick and efficient as possible; but sometimes, taking the time to say a little more can make a big difference.

This week, Todd Patkin, author of a number of books, including Twelve Weeks to Finding Happiness: Boot Camp for Building Happier People, shares some simple statements business leaders can use to build morale, productivity, and a happier workplace.

14 Things Your Employees Are Dying to Hear from You:

Todd Patkin

Todd Patkin

Phrases to Help You Revive Wilting Employee Engagement This Spring

What were your last 10 or 15 employee conversations like? Chances are, they included phrases like, “I need you to finish that projection by the end of the day,” or, “I’m putting you on the Brown account,” or, “How much longer do you think it’ll take to finish that PowerPoint the client requested?” After all, you can’t run a business without addressing these types of issues. And chances are, unless they were delivered in a, shall we say, forceful tone of voice, your employees don’t mind hearing pertinent instructions and questions. So why does their morale seem to be, well, wilting?

The problem might not be what you’re saying, but what you’re not saying. The good news is, with a few well-chosen words, you can nurture employee relationships and help their engagement blossom this spring.

In the midst of the everyday chaos of running a business, leaders often don’t think about what they could or should say to motivate their employees. Often, leaders assume that their employees know how they feel—about each person’s individual performance and about the company’s health in general. Usually, though, that’s not the case.

I speak from experience. For nearly two decades, I was instrumental in leading my family’s auto parts business, Autopart International, to new heights until it was finally bought by Advance Auto Parts in 2005. One of my most reliable growth strategies was proactively nurturing my employees’ attitudes about their jobs by engaging them in conversation. Now, I translate that experience into consulting with organizations to help them build corporate morale and promote greater productivity.

They’d never bring it up themselves, but there are certain phrases your employees really want to hear from you. Some have to do with affirmation; others center on encouragement, reassurance, respect, gratitude, or trust. When you verbalize these things—which takes only a few seconds of your time!—you will notice a big change in your employees’ motivation, commitment, and productivity.

If you start incorporating these phrases into your at-work vocabulary, your employees’ engagement will “blossom” this spring

“I need your help.” The age of rule-with-an-iron-fist, top-down leadership is fading fast. More and more, organizations in all industries are realizing that there’s an almost-magical power in the synergy of teams. Here’s how that applies to you: Your employees all have unique skill sets, experiences, and ideas—so tap into them!

Yes, your employees will be looking to you to steer your company in the right direction, but I promise, they know you’re human, and they don’t expect you to have all the answers. So the next time you’re facing a difficult decision or brainstorming options, ask your team for help. Rather than losing respect for you as a leader, they’ll appreciate that you treated them as valued partners—and they’ll feel more invested in your company’s future because they had more of a hand in creating it.

“How is your family?” The truth is, people don’t care how much you know (or how good you are at your job) until they know how much you care. Your employees will be more loyal and more motivated if they feel valued as individuals, not just as job descriptions. So get to know each team member on an individual basis and incorporate that knowledge into your regular interactions. For instance, if you know that John in Accounting has a daughter who’s applying to college, ask him which schools she’s considering. Or if Susanna in HR just came back from vacation, ask to see a few pictures.

Showing genuine interest and caring is the greatest motivator I know. When you dare to “get personal,” your employees’ desire to please you will skyrocket. That’s why, when I was leading my family’s company, I took advantage of every opportunity I could think of to let my people know I was thinking about them. I recommended books I thought they might enjoy. I sent motivational quotes to employees who might appreciate them. I attended all weddings, funerals, bar mitzvahs, and graduations I was invited to. And you know what? Not only did I fuel my employees’ engagement…I also formed a lot of meaningful relationships that continue to this day.

“What do you need from me?” Often, employees are anxious about asking the boss for what they need, whether it’s updated office equipment, more time to complete a project, advice, etc. They may fear a harsh response, want to avoid looking needy, or simply feel that it’s “not their place” to ask for more than you’ve already provided. By explicitly asking what you can give them, you extend permission for your people to make those requests—and they’ll certainly appreciate it.

Be sure to treat any requests you receive seriously. If you can’t give an employee what she asks for, explain why and work with her to find another solution. Either way, this question, and the conversations it sparks, can give you valuable insight regarding how to improve your company’s operations, facilities, and culture. It can also show you how to best develop and support individual team members.

“I noticed what you did.” Every day, your employees do a lot of “little” things that keep your company running smoothly and customers coming back: Refilling the copier with paper when it’s empty. Smiling at customers after each transaction. Double-checking reports for errors before sending them on. And so forth. Unfortunately, in many organizations, these everyday actions are taken for granted, which (understandably) has a negative effect on employee morale.

Your employees want to know that you notice and value the mundane parts of their jobs, not just the big wins and achievements. That’s why I recommend making it your mission to “catch” as many of your employees as possible in a good act. Then, point out exactly what it is about their behavior that you appreciate. Phrases like, “Sal, I’ve noticed that you always take such care to keep the file room neat. Thank you!” take about five seconds to say, but they can pay long-lasting dividends for your company in terms of morale and motivation.

“Thank you.” Yes, your employees may crave recognition for doing the mundane parts of their jobs, but that doesn’t mean that they won’t also appreciate a heartfelt “thank you” for bigger accomplishments. Whether it’s “Thanks for staying late last night,” “Thanks for being so patient with Mrs. Smith—I know she can be a difficult customer,” “Thank you for making our first-quarter marketing campaign a success,” or something else, your people will treasure your appreciation more than you realize.

People love to hear positive feedback about themselves, and in most cases, they’ll be willing to work a lot harder to keep the compliments and thanks coming. Praise, especially when it comes from an authority figure, is incredibly fulfilling. (And sadly, it’s also rare.) On that note, make sure that you praise and acknowledge your people in a positive way more often than you criticize them. That’s because negative feedback tends to stick in most people’s memories longer, so you need to counterbalance it.

“Hey, everyone—listen to what Riley accomplished!” Everybody loves to be recognized and complimented in front of their peers. So don’t stop with a “mere” compliment when an employee experiences a win—tell the rest of the team, too! Whether correctly or incorrectly, many employees feel that their leaders point out only their mistakes in front of the group, so make it your daily mission to prove that perception wrong.

When I was at Autopart International and I saw that one of my people did something noteworthy, I made sure that everyone else knew about it by emailing the story to the entire chain. I could literally see the glow on the highlighted employee’s face for weeks, and I also noticed that many of the other team members began to work even harder in order to earn a write-up themselves. Other successful recognition strategies included writing thank-you notes to my employees and publishing a company-wide monthly newsletter highlighting our “stars.” Sometimes, I would even call my employees’ homes to brag on them to their families!

“What would you like to do here?” Sure, you originally hired each of your employees to do specific jobs. But over time, your company has grown and changed—and so have your people. That’s why it’s a good idea to check in with each one of them periodically to ask what they’d like to be doing. You might be surprised to learn, for instance, that your administrative assistant would like to be included in the next marketing campaign design team. You might be even more (pleasantly!) surprised to find that her social media engagement ideas yield impressive results.

Annual performance reviews might be a good time to discuss this topic with your employees. No, you won’t always be able to accommodate every employee’s preferences. But whenever possible, keep job descriptions within your company fluid and allow your people to have a say in matching their skills to the company’s needs. This is one of the best ways I know to build loyalty and encourage your employees to really take ownership of their jobs. After all, they’ll have had a hand in designing them!

“I have bad news.” You certainly don’t mind sharing good news with your employees, but bad news is a different story. Your instinct might be to play down negative developments, or even keep them to yourself entirely. Nobody wants to be the person who says, “We’re going to have to eliminate some positions over the next six months,” or, “Unfortunately, our company can’t afford to provide raises or bonuses this year.”

Nevertheless, your employees deserve to hear the truth from you as soon as possible. They aren’t stupid and will be able to tell when something is “up” even if you don’t acknowledge it. By refusing to share bad news, you’ll only increase paranoia and anxiousness—neither of which are good for engagement or productivity. But when you treat your people like responsible adults by being honest and open, they will appreciate your transparency…and often, you’ll find that they’re willing to voluntarily double their efforts to help you turn the tide.

“What do you think?” Maybe you’ve never put much emphasis on the thoughts and opinions of your employees. After all, you pay them a fair wage to come to work each day and perform specific tasks. As a leader, it’s your job to decide what those tasks should be and how they should be carried out, right? Well, yes—strictly speaking. But this unilateral approach to leading your team sends the impression that you’re superior (even if that’s not your intent) and also contributes to disengagement.

Employees who are told what to do feel like numbers or cogs in a machine. Often, their performance will be grudging and uninspired. To unlock buy-in and achievement, make your employees feel like valued partners by asking them for their opinions, ideas, and preferences. Again, they’ll be much more invested in your organization’s success because they had an active part in creating it. And guess what? Your employees probably won’t care as much as you think they will if their suggestions don’t become reality. Mostly, they just want to know that their voice was heard by the people in charge.

“Here’s how our company works and where we stand.” In many companies, employees in Sales don’t know much about what’s happening in Accounting. Likewise, the folks in Accounting aren’t really familiar with how things in the warehouse work…and so on and so forth. Generally, this state of affairs doesn’t cause too many problems. But helping your employees make connections regarding how your company works from top to bottom will streamline internal processes, reduce misunderstandings, and promote team spirit.

Again, this is all about transparency and treating employees like partners. When you make a point of showing everyone how your business “works” and how their specific job descriptions fit into the overall “machinery,” you’ll find that us-versus-them thinking tends to decline, and that profit-minded solutions begin to proliferate.

At Autopart International, one of the best management decisions I ever made was showing my employees “the numbers” on a regular basis. I made sure that everyone understood the relationship between their performance and the bottom line—and thus their own pay. Several employees told me that my transparency prompted them to think more carefully about how their own everyday choices and efforts affected the bigger picture.

“That’s okay. We all make mistakes. Let’s talk about how to fix this.” In business, mistakes are going to happen. And in many instances, the impact they have on your company revolves around how you as a leader handle them. Sure, lambasting an employee who has dropped the ball may make you feel better in the short term, but it’ll negatively impact that employee’s self-confidence, relationship with you, and feelings for your company for much longer.

Don’t get me wrong: You shouldn’t take mistakes, especially those involving negligence, incompetence, or dishonesty, lightly. But when your employees have made an honest mistake, try to be as understanding with them as you would be with your own family members. Take a deep breath and remind yourself that the employee feels very bad already, and that yelling or lecturing won’t change the past. Instead, focus on figuring out what went wrong and how to keep it from happening again. Did the employee (or the company as a whole) learn something? Should a process or procedure be tweaked going forward to reduce the chances of something similar reoccurring?

Also, never forget that mistakes are an essential part of growth. The innovation and creativity it takes to grow a business will be accompanied by setbacks and slip-ups. You don’t want to create an environment where people don’t take potentially productive risks because they’re afraid you’ll get mad if they screw up.

“You deserve a reward.” Simple things like gratitude, respect, and autonomy make people far more happy than, say, big salaries and corner offices. However, he isn’t denying that more tangible rewards like bonuses, vacation time, prime parking spaces, benefits, and more have their place in raising employee engagement. The truth is, you’ll be hard-pressed to find an employee who doesn’t appreciate these things.

When resources allow, look for ways to reward your employees for their hard work. Remember, nobody wants to work for a Scrooge! At Autopart International, I thanked employees with everything from sports tickets to door prize drawings to lavish company parties to vacations on Martha’s Vineyard. I found that when I treated my employees like kings and queens, they worked extra-hard to be the recipients of these perks…and they were much more resistant to moving when offers to work for “the other guys” occasionally came their way.

“I know you can do it.” Of course you should try to hire employees who are confident and self-directed. But even the most self-assured individuals appreciate an explicit vote of confidence from their leaders!

Constantly challenge your people and push them to improve while reassuring them that you believe in them. Everyone, no matter how capable or experienced they are, appreciates encouragement. At Autopart International, I found that tying verbal votes of confidence to something more concrete—specifically, employees’ pay—was one of the best ways to motivate them.

Specifically, I told my employees that I believed in their ability to help our company grow—so much so that I wanted to introduce the concept of performance-based pay with no cap. I found that when a leader is willing to bet large amounts of money on employees’ potential achievements, those employees will work harder for you—and for themselves!—than you ever thought possible. With this strategy, everyone wins.

“This task is in your hands—I’m stepping back.” Most micromanaging leaders don’t set out to annoy or smother their employees. The problem is, they care—a lot!—and want to make sure everything is done just so and that no balls are dropped or opportunities missed. The problem is, excessive hovering can give employees the impression that you don’t trust them or have faith in them—a belief that actively undermines engagement.

Once you’ve delegated a task, step back and let your employees do what you’ve asked of them. Yes, I know that can be easier said than done. If you have to, lock yourself in your office or go for a walk around the building to keep yourself from hovering! It may also help to remind yourself that you hired each of your employees for a reason, that you have faith in their potential, and that if they do need help, they know where to find you.

Remember, business is always personal. Specifically, it’s about reaching and motivating each of your employees on a personal level so that they care about contributing to your organization’s ultimate success. This spring, which phrases will you be adding to your at-work vocabulary?

About the Author:

, author of Finding Happiness: One Man’s Quest to Beat Depression and Anxiety and—Finally—Let the Sunshine In, Twelve Weeks to Finding Happiness: Boot Camp for Building Happier People, and Destination: Happiness: The Travel Guide That Gets You from Here to There, Emotionally and Spiritually (coming 2014), grew up in Needham, Massachusetts. After graduating from Tufts University, he joined the family business and spent the next eighteen years helping to grow it to new heights. After it was purchased by Advance Auto Parts in 2005, he was free to focus on his main passions: philanthropy and giving back to the community, spending time with family and friends, and helping more people learn how to be happy. Todd lives with his wonderful wife, Yadira, and their amazing son, Josh.

 

About the Books:

Finding Happiness: One Man’s Quest to Beat Depression and Anxiety and—Finally—Let the Sunshine In (StepWise Press, 2011, ISBN: 978-0-9658261-9-8, $19.95) is available at bookstores nationwide, from major online booksellers, and at www.findinghappinessthebook.com.

 

Twelve Weeks to Finding Happiness: Boot Camp for Building Happier People (New Focus Press, 2012, ISBN: 978-0-9885092-0-7, $13.99) is available from Amazon.com.

 

Break some rules

Business Success Logo

Business Success LogoSome rules you just have to follow, like paying your taxes. Others — hey, go ahead and break a few, writes Intuit’s business blog. “Straying from standard practices might be a smart move.”

Among the business rules you can break are:

1. “Avoid nepotism” — One of the biggest, unwritten rules in business is never to hire family members — yet bringing in a relative can sometimes be a solid solution.

2. “Sell to everyone” — Trying to be all things to all customers disappoints those who are not the right fit for your business, while alienating those who deserve your best focus.

Breaking these and other rules can help you “build a stronger company that is prepared for growth, the article advises.

The full story is here.

 

 

 

Photography businesses can reduce taxes using excess inventory

Business Success Logo

Business Success LogoIn the photography business, excess, nonmoving inventory is a common problem that contains its own solution.

By donating new, idle photography items to charity, businesses in the U.S. can earn a federal income tax deduction under Section 170 (e)(3) of the U.S. Internal Revenue Code.

The IRS Code says that regular C corporations may deduct the cost of the inventory donated, plus half the difference between cost and fair market value.  Deductions may be up to twice-cost.

Let’s say you’re a retailer of photo equipment and you buy a film for $2.00.  Your price to the consumer is $4.50.  Your deduction is $3.25.  If the markup is considerably higher, deductions are limited to twice cost.

If you’re an S corporation, partnership, LLC or sole proprietorship, you qualify for a straight  cost deduction.

Even if your photo business realizes only a straight cost deduction, it may be to your advantage to donate your stagnant inventory rather than clear it through a liquidator.  Since liquidators look for the lowest price they can get, their offer may be less than your cost – substantially less.

Investigate donating inventory before negotiating with a liquidator, however, to be able to justify the product’s fair market value with the IRS.

Besides the tax deduction, your company can realize other benefits by donating excess inventory:

Help deserving nonprofits, schools and church organizations.  This good deed can translate into good will.  Consider a gifts-in-kind non profit organization that accepts product donations from businesses and redistribute those goods to qualified nonprofits, schools and church organizations.

To earn this deduction, make sure that the nonprofit recipient is a 501( c )(3), since only that IRS classification of nonprofits qualifies. Public or private (nonprofit) schools may also qualify to receive these goods.

Have your accountant or tax adviser instruct the recipient group as to what information it needs to include in the documentation it furnishes you as proof of the donation.

You will need to include the recipient’s letter on your corporate tax forms as support for claiming the deduction.

If you have a large quantity of product (a semi-trailer or more), instruct the recipient groups that under IRS regulations, donated merchandise may not be bartered, traded or sold.  Charities, schools or churches may not auction or sell donated merchandise to raise cash.

By Gary C. Smithwww.naeir.com

Business Success: There’s one in every crowd

OrloffHeadshot7466v3at300
Business Success LogoIt’s great to work with highly talented people who are also kind and pleasant to be around. Nothing makes you appreciate those wonderful coworkers more than having to work with someone who isn’t so kind and pleasant. Some folks, in fact, are downright insufferable, and can make a workplace miserable. Since punching these people in the nose is pretty much never a good solution, what do you do?
Judith Orloff, MD, TED speaker and author of  The Ecstasy of Surrender: 12 Surprising Ways Letting Go Can Empower Your Life, offers some great suggestions on getting those not-so-easy personality types to work well with the rest of the team.
Five Difficult Workplace Types — and How to Get Them to Cooperate

OrloffHeadshot7466v3at300
The workplace is filled with difficult personalities–bullies, know-it-alls, rumor mongers… Our fallback reaction when faced with problem people at work is to either assert ourselves or walk swiftly in the other direction.
But there’s a middle ground, a way of communicating that’s more effective, because it’s not rigid or oppositional. It’s about being fluid, surrendering to your intuition, and letting go of your need to push back or control the outcome. Your ability to go with the flow is really important when dealing with difficult people.
Here’s a look at some common difficult personality types, and how to deal with them.
The Narcissist. These types have an inflated sense of self-importance and entitlement, crave attention, and require endless praise. Some are obnoxious ego-maniacs, others can be quite charming. Both types know how to belittle you and make you serve them. First, let go of the belief that you can win them over with loyalty and love. Narcissists value control and power over love, and they lack empathy. Next, don’t make your self-worth dependent on them. Seek out supportive coworkers and colleagues instead. Finally, to get your goals met with narcissists, frame your request in ways they can hear — such as showing them how your request will be beneficial to them. Ego stroking and flattery also work.
The Passive-Aggressive. These types express anger while they’re smiling or showing exaggerated concern. They always maintain their cool, even if through clenched teeth. Start by trusting your gut reactions and the feeling that their behavior is hurtful. Say to yourself, “I deserve to be treated better and with more respect.” If the person is someone you can speak directly with — a team member as opposed to a boss — address the behavior specifically and directly. You could say, for example, “I would greatly appreciate it if you remembered our meeting time. My time’s very valuable, as is yours.” If the person doesn’t or won’t change, you can decide whether to accept their behavior or not.
The Gossip. Gossipy busybodies delight in talking about others behind their backs, putting them down, and spreading harmful rumors. They also love to draw others into their toxic conversations. Start by letting go of your need to please everyone or control what they say. Then be direct. Say, “Your comments are inconsiderate and hurtful. How would you like people talking about you like that?” You can also refuse to participate by simply changing the subject. Don’t share intimate information with gossip mongers. And finally, don’t take gossip personally. Realize that gossips aren’t happy or secure. Do what you can to rise to a higher place, and ignore them.
The Anger Addict. Rageaholics deal with conflict by accusing, attacking, humiliating, or criticizing. Let go of your reactivity. Take a few short breaths to relax your body. Count to 10. Pause before you speak. If they’re spewing verbal venom at you, imagine that you’re transparent and their words are going right through you. To disarm an anger addict, acknowledge their position, and then politely say you have a slightly different approach you’d like to share. Request a small, doable change that can meet your need. Then clarify how it will benefit the relationship. Finally, empathize. Ask yourself what pain or inadequacy might be making this person act so angry.
The Guilt Tripper. These workplace types are world-class blamers, martyrs, and drama queens. They know how to make you feel terrible about something by pressing your insecurity buttons. Start by surrendering the notion that you have to be perfect. Everyone makes mistakes, so if the guilt tripper is scolding you, you can simply apologize or take responsibility, and that will shut them down. Also, know your guilt buttons. If there’s something you feel bad about, you can work on being compassionate with yourself so you’ll feel stronger when this difficult coworker tries to push that particular button. Finally, set limits with the guilt tripper. Tell them you can see their point of view, but that it hurts your feelings when they say those things, and you’d be grateful if they stopped saying it.

Increase sales by fostering community, more

Business Success Logo

Business Success LogoOf course you’d like more customers to walk through the door regularly. What’s the best way to get them in? “It may be time to scale back on promotions and take a hard look at what you’re providing potential clients,” according to advice on Intuit.com: Success means creating relationships that last through the good and the tough times.

The best way to begin those relationships can be by providing customers your expert advice. “This encourages people to seek out your company when it’s time to make a purchase.”

The four tips detailed in the article are:
1. Foster community.
2. Answer people’s questions.
3. Provide useful materials.
4. Let existing customers draw new clients.

The full article is here.

 

Get your customers talking about your brand

Business Success Logo

Business Success LogoDon’t think about customers with an “us vs. them” mentality — easy as that is when, say, a customer has a complaint. “That’s a dangerous mindset, especially if it becomes habitual,” writes marketer Peter Friedman. “Competitive advantage these days demands customer-centricity. The more customers your organizations can engage meaningfully—especially those who care enough to tell you how to do things better—the better off you’ll be.”

Friedman offers six tips “to empower customers and cultivate brand ambassadors.” Among them are:

• Have real and personalized conversations
• Offer direct access
• Offer rewards

“It is worth spending money on engaged customers who care,” he concludes. “If treating them like VIPs turns them into active brand ambassadors, it becomes an investment with great returns. The best rewards, though, aren’t even about money.”

Read the full article with details on the six tips here.

 

Business Success: Who are your few?

Business Success Logo

Business Success LogoDuring your career you’ve heard or read lots of advice on networking. And chances are you’ve picked up a subtle, underlying message: More is better. Why else would you have left the last conference you attended with a briefcase full of business cards? Oh, you haven’t reached out to any of those folks yet (or they to you), but you “networked” and that’s what matters. And your online networking efforts are even more fruitful—you’ve got hundreds of LinkedIn connections just waiting to be cultivated.

You’re doing everything right, right? Not so fast, says Andrew Sobel, coauthor of Power Relationships: 26 Irrefutable Laws for Building Extraordinary Relationships and eight other books on business relationships . This superficial view of networking just doesn’t, well, work.Andrew Sobel Photo 2014

Seven Ways to Supernetwork Your Way to Success

In most careers there are 20-25 relationships that truly matter: these are your “critical few.” Knowing how to segment these contacts out from the others makes all the difference.

If you really want relationships that matter, stop aimlessly collecting business cards. There is a big difference between “networking” and actually building a network of deep, loyal relationships.

Unless you’re a nightclub promoter, calling, texting, and “Linking In” with dozens of people every day isn’t going to help your career. Neither is doing favors just to create “reciprocity”—so that people will owe you. In this age of social media, we’ve come to confuse quantity for quality. But supernetworkers understand that all contacts are not equal in terms of their career impact.

Supernetworkers segment—explicitly or intuitively—their network into these two pieces: the “critical few” and the many. And they adopt totally different tactics to stay in touch and manage them.

My own research shows that in your professional career, there are about 20-25 relationships that will become your critical few. These are also the relationships where you, in turn, can make an indelible impact.

I’m not saying that once you’ve settled on your critical few that you never need to network again. You should never stop making new contacts. But you’ll reach out to your larger group through less personal means of communication—blogs, e-newsletters, social media—than you will with your critical few. And in the meantime you’ll be refining your critical few relationships through more specialized contact like face-to-face meetings, phone calls, and so on.

How do you become a supernetworker and build lasting relationships?

Know who your “critical few” are and cultivate them. I advise clients to make a careful list of who they think should be their critical few and to build a regular staying-in-touch program for each of them.

In the course of writing my books, I’ve conducted many interviews with highly successful professionals who were at the end of their careers. I discovered that most of them actually knew very early on who made up their inner circle—those 20-25 key individuals who were going to really power their career and on whom they would also have a major impact.

Your critical few should include clients or customers, prospects, colleagues, personal mentors, collaborators—by which I mean other firms or individuals you may trade leads with and work with to serve a client—and so on. Plan to personally connect two or three times a year with each of the people on your list. Add value to them in different ways. I like to think about ideas and relevant content, network value (making a valuable introduction), personal help, and fun.

Build your network before you need it. Petri Byrd is the bailiff on Judge Judy Sheindlin’s family court TV show. Judge Judy isn’t any old show—it’s the most popular daytime TV program in the United States. One might assume Byrd got his coveted job because of his acting skills and training. But when I met him on a flight to Los Angeles a few years back, I learned the real reason is because he followed this essential law.

Turns out Petri had never acted in his life. He worked with Judge Judy—as a bailiff—in Brooklyn family court in the 1990s. When he moved to L.A., he heard she was starting a TV show and called her up. She hired him immediately. Petri had developed and maintained his relationship with Judge Judy years earlier—he built his network before he needed it. By doing so, he overcame what most would see as a huge disadvantage in getting a TV role.

You have to invest in other people before you ask them for anything. Otherwise, you’ll be seen as a freeloader. Cultivate your relationships over time, the same way you would tend a garden. Then, when you do need help, you’ll find the people around you eager to lend a helping hand.

Stretch yourself by building relationships with people quite different from you. Research shows that our natural tendency is to choose others to work with who are very similar to us. But the most creative teams, the teams that solve problems the fastest, are eclectic and combine people with very different backgrounds and personalities.

Relationships with people who are just like you are easier. You can quickly agree on most everything. We gravitate toward those relationships. But that can be a problem. Those people are less likely to push you and help you develop your fullest self. In contrast, a certain amount of stress and tension is productive. And, people who are different from you often connect you into whole new networks that will complement your own.

Who’s the Steve Wozniak to your Steve Jobs—or the John Lennon to your Paul McCartney? If you put in the hard work it takes to accommodate differences, you’ll be handsomely rewarded.

Know the other person’s agenda and help them accomplish it. Supernetworkers know that the key to connecting with others is an understanding of what’s important to them. When you know what the other person’s priorities, needs, or goals are, you can figure out how to help them. And that’s where the rubber meets the road in building both professional and personal relationships. If you don’t know their agenda, you’re shooting in the dark or relying on some nebulous concept of charisma.

Think about it. Have you tried to get an appointment with an executive who just wouldn’t make room in their schedule for you? The problem is actually very simple: You are not connecting with and showing how you are relevant to the other person’s agenda of critical priorities!

Whether at work or in your personal life, your first job is to understand the other person’s priorities. Think about some of the key relationships you’re trying to build—be they with your boss, your colleagues, or key customers. Do you know what is important to them—really important—right now? Only when you understand this will you clearly see how you can help them and add value to the relationship.

Every act of generosity creates a ripple. A collateral benefit of selfless generosity is that it draws others to you. It creates an attractive aura around you—even though that’s not the reason you do it. It is what characterizes the most influential people in history, individuals like Gandhi, Nelson Mandela, Andrew Carnegie, and Martin Luther King, Jr.

In the last chapter of Power Relationships we tell the story about a philanthropist named Rich Goldbach. One night, in a dark, empty parking lot, a strange man confronts him. Rich thinks he is about to be mugged. But the man is there for a very different motive. It has to do with an early childhood literacy program Rich funded in the local community. One of the grade-schoolers who learned to read in the program has in turn taught his father to read. The man has come to thank Rich, not rob him.

When Rich told us this story, he was choked with emotion. He had experienced, firsthand, the ripple effect of an act of generosity. There is no way of knowing how your own generosity—to a cause or an individual—creates a ripple effect that influences many others. You end up touching many other lives, often without even knowing it. Supernetworkers, in short, are among the most generous people I know.

As you read this you might be thinking: Great. All my frenetic attempts at networking so far have been in vain! Not true. Just go through your contact list and ask yourself: Who will go out of their way to endorse me and introduce me to their network? Who will drop what they are doing and help me when I am in need? Who will tell others that they’ve never known someone as trustworthy and talented as me?

After asking yourself these questions, you may find that only five or ten people remain on your list. And that’s a great start: A handful of deep, loyal relationships is always better than hundreds of superficial contacts. Quality trumps quantity every time.

Don’t take this advice

Business Success Logo

Business Success LogoYou’ve likely heard lots of advice on how to best run your business. Writing at the Huffington Post, service provider Paul Proctor notes the five worst piece of advice he’s received.

Among them are:

1. “It is not worth the headache — you should sell.”

2. “You need to set a rigid budget.”

3. “You need to market and grow.”

Overall, he adds, “the most important piece of advice you should listen to is your own. Only you and your partners truly know the goals, means, and situations of your small business.”

The full article is here.

 

Business Success: Know where to go

Business Success Logo

Business Success LogoI love my job, so when a flier came home from my son’s school asking parents to come in and talk about what they do for Career Day, I was one of the first to sign up. In preparing for my presentation, I’ve spent a lot of time thinking about what I want to say. I hope to communicate to the kids that success means more than just making money, and that you have to figure out not only what you want to do with your life, but also how to get there.

Although intended for grown-ups already well into their careers, this week’s Business Success column, by Jeff Gitterman, offers some interesting advice along similar lines (and you can be sure I’ll be stealing some of this for Career Day!)

Setting Goals

As a financial advisor, I often tell my clients that the most important investment they can ever make is that of their energy and

Jeff Gitterman

Jeff Gitterman

attention in their future, as I’ve seen first-hand what happens when people learn to consciously direct their thoughts toward the future they want to create.  When I give seminars, I’ll often ask people, “What are you going to do differently this year than you did last year?” and I often get a kind of blank look in response.  ”I’m going to make more money.” “I’m going to see more potential clients.”  But when I ask them what they will do differently, they often ask, “What do you mean?”

There is a well known definition of insanity, which is doing the same thing over and over again and expecting different results.  And when I say doing the same thing, I mean at the most fundamental level–with regard to how we spend our attention and energy.  The human mind is like a bio-computer that is continually processing input and output, and so, whatever we put in is understandably what we’ll get out.  Put in junk and we’ll get junk.  But put in good programs, and we’ll get good results.

A metaphor I like to use is that of my car and its built-in navigation system.  If I want to go to the city to meet a new client, I can enter the address and the system guides me–turn right, turn left, drive straight ahead for three miles.  This has certainly made driving much easier over the last several years, but I still have to program the navigation system with a destination in order to get where I want to go.  In a way, our subconscious mind is a like a navigation system.  It’s constantly giving us directions, but if we haven’t plugged in the right address with our conscious mind, then we’re going to be going in circles.

The good news is that visualizing and learning to redirect our future is not as difficult as some people might think.  The first step is to create a two-minute movie in your head of you in the future, being the person that you always wanted to be, and imagining that money is not an obstacle in any way.  The second step then requires five minutes a night, before you go to bed.  Spend a minute or two in meditation and/or doing some type of relaxation technique—anything that will best help you to focus.  Then, once you feel centered and grounded, play your movie in your head.

There’s an old saying, “act as if,” or, as we often say, “fake it till you make it.”  Your movie has to be a snapshot of a day in the life of you, playing bigger in the world: where and what you do at work, the relationships you have, the house you live in, the car you drive, etc.  What does that vision look like three to five years out in a perfect day in the life of you?  And then give it up to the Universe because in all likelihood that vision, while it may come true, will find reasons to change and grow as you make it bigger and better.  We need to give our energy a direction to move in.  It’s critical that we do that.  Otherwise, we flounder.  It’s like getting in our car without a navigation system and driving around with no idea where we’re going.

Go from morning to night and make it as sensory as possible.  Add as much detail as you can–objectively and subjectively.  Whatever it is, it should be you living your fullest expression–and filled with happiness as you do what you love to do. Then play your movie every night for thirty days, because this is how long many people believe it takes for a new habit to form in the subconscious mind.  For example, if you smoke once, it probably won’t become a habit, but if you smoke for thirty days you’re most likely hooked.

I can’t stress this point enough: if we don’t believe that our thoughts are creating the life we’re living and that we are the principal authors of our own destinies, writing our own stories every day, we’ll remain helpless audience members watching our lives go by.   The visualization process gives us something far more useful to focus on than the old counter-productive messages of our minds, and over time, you’ll be amazed how quickly our outer worlds will begin to change once we’ve learned how to rewrite our scripts.

Jeff Gitterman is an award winning financial advisor and the CEO of Gitterman & Associates Wealth Management, LLC. www.gawmllc.com.  He is also the co-founder of Beyond Success, www.BeyondSuccessConsulting.com, a consulting firm that brings more holistic values to the world of business and finance.  He is also the author of Beyond Success: Redefining the Meaning of Prosperity, published by the American Management Association (AMACOM).