CHAPTER 8

Change

Managing Change Without Chaos

Change happens even in the most stable organization. Change happens even after you spent time and money getting everything to work just right. Change happens because the world around us changes so rapidly. A large part of what thriving businesses do better than those that are less successful is plan for, control, and manage change. According to Deloitte Global CEO Punit Renjen, resilient businesses have five traits that allow them to thrive even under extreme conditions. These traits include being “prepared, adaptable, collaborative, trustworthy, and responsible.” Change broken down into an organized step-by-step process using best practices that embody Renjen’s five traits of resilience becomes manageable. (Renjen 2021)

Status quo is comfortable even when not efficient or effective. Change, no matter how beneficial, always causes some pushback and discomfort. Often, even minor changes cause anxiety. It does not have to be that way. Entrepreneurs and business leaders who follow best practices build change resilience organizations that embrace constant process improvement do better than those who do not.

The 2021 Deloitte Global resilience report found that: “Perhaps most importantly, the data suggests that speed matters. Organizations that made early investments in change-resilient strategies during the Covid-19 crisis—or, even better, had already made strategic, workforce, and technology investments in capabilities that enhance resilience—outperformed their competition.” (Renjen 2021) At the beginning of the pandemic according to the SBA Office of Small Business Advocacy, there were approximately thirty million small businesses in the United States. After only 12 months, 843,229 appeared to have gone away. (SBA 2021) Those who managed change survived.

Entrepreneurs that define change initiatives in ways that their team members understand and support become empowered to succeed repeatedly. When you face the initial discomfort head on, you build change-resilient teams. This is important to success because change is necessary for growth. The faster you grow, the more change your team members’ experience. Anything that makes change easier reduces risk.

There are big changes such as selling the business, growing through acquisition, merging, bringing in a new partner, or rapidly pivoting in crisis which only happen rarely. Small changes happen all the time. New leaders are brought in and new team members are hired. New opportunities require shifting and reorganizing. Growth requires more formal procedures to ensure consistency across your organization. Owners and leaders delegate to free up time for other business priorities.

How do you know that change is necessary? Your processes stop working smoothly. You notice:

While it can be tempting to blame your resources, these are all indications that one or more of your processes are broken. W. Edwards Deming who taught at New York and Columbia Universities while consulting with some of the biggest manufacturing companies of his time is known as the father of process improvement. He was known to say, “Put a good person in a bad system and the bad system wins, no contest.” He would also frequently say, “Eighty-five percent of the reasons for failure are deficiencies in the systems and process rather than the employee. The role of management is to change the process rather than badgering individuals to do better.” (Deming, Orsini, and Cahill 2012)

Change happens in a myriad of ways. To manage change, avoid implementing too many changes at one time. Many think that change can happen overnight not realizing that lasting successful change is actually a long-term process. Large organizations manage the process of change with a change initiative budget that includes hiring skilled professionals. Small businesses do not often have the luxury of that support as they face the same challenges. For this reason, changing slowly over time makes sense.

Regardless of your business size, follow change management best practices to build change resilient teams. Following the steps of solid change management best practices for every little change makes making big changes easier for everyone. Many times, leaders get in the way of resiliency trying to save money and time by skipping essential change management steps.

They ignore best practices and instead begin without a clear starting point or without identifying and involving the right people. Skipping those essential first steps is like building a house without a sound foundation. It is impossible to know what lies ahead. Cracks soon appear.

Change may not look big on the surface as in the case of a small plane engine manufacturer who acquired a midsize boat engine plant. It appeared the new organization would merge seamlessly into the current company infrastructure. However, they discovered far too late each had very different accounting, pricing, and inventory practices. Current systems were not scalable or flexible enough to handle all the new requirements that kept popping up during the merger integration. The integration project had to start over at the beginning. Missing steps cost money and time.

Even something as small as partnering two team members to take on a big project who have always worked individually requires some thought and preparation. Much like the engine company, the new partners may have different ways of approaching the same work. Taking a moment to go through the steps of change management reduces the change of friction and increases the chances of success.

Change-resilient businesses follow a process for every change because it works. Small changes often happen in a day. Large changes that impact an entire organization may take years. Large or small, the characteristics of a thorough change strategy are the same:

Review Processes and Procedures

Asking for change without considering what happens to everyone impacted is like taking a trip without knowing where to start. Taking time to understand exactly what happens today provides a starting point that reduces the chance of making a change that causes more problems than it solves.

Review by:

Always consider that a change may make one team member’s work easier but make another team member’s work much more difficult and time-consuming. Following changes through the entire workflow system pinpoints possible issues.

Transparent Goals

Change does not happen in a vacuum. There is always some need. Develop clear goals that include the benefits and share them. All successful change begins with the end in mind. When your resources understand what success looks like and why success is important, they tend to get on board much faster. According to John Humphreys assistant professor of management at Eastern New Mexico University, “. . . to remain competitive today, firms need the valuable expertise and enthusiastic commitment of employees at every level. If handled properly, effective goal setting will enable the organization to benefit from both.” (Humphreys 2003) Transparent goals create a much straighter path to success EVEN when those goals are not popular with everyone impacted.

Goals range from simple to very complex. However, the process of managing change remains the same. It does not matter how different the goals may be. For example, if you reduce the workload of an overworked team member by shifting responsibilities, automate work with new software, develop and market a new product or service, or merge with another company best practices required to implement the change remain the same. It is clear to see that when you work change management best practices into your culture as a standard of how to handle change, your company becomes more agile and resilient.

Obtainable Metrics

Create obtainable KPIs. Research shows that even in simple delegation providing a clear understanding of how soon the team member should become proficient and what that looks like increases the likelihood of better outcomes. When your team members understand what is expected they know to be successful.

KPIs become goals. Researchers Edwin Locke and Gary Latham proposed, “There is strong reason to conclude that goal setting works at the group and organizational (or unit) level as well as at the individual level.” Their research showed team members were more successful when they were given feedback on their progress. KPIs provide the opportunity to provide that feedback and the encouragement necessary to create lasting change. (Locke, Latham 2013)

Resistance Management

Start by recognizing that resistance is just part of change. Resistance is natural. No one likes change. How you manage resistance is what matters. When you work to engage your team members instead of expecting them to fall in line without any understanding your chances of success grow. Engagement reduces the turbulence of disruption. Inspire your teams with a vision of how making the change required benefits them. Answer the question, “What is in it for me?”

Identify Stakeholders

Identify and align stakeholders which may be inside or outside your business. Understanding when changes impact your customers, your suppliers, and any other outsiders critical to your business helps you consider all those affected. Avoid surprises. Engage stakeholders as your team of advocates by telling them what is in it for them as well. Encourage your stakeholders to think about their own roles, their team roles, the business, and even your culture. Let stakeholders offer insights that help ensure success.

Engage Subject Matter Experts

A Subject Matter Expert (SME) is anyone with knowledge. SMEs might know what happens today or what must happen for your change to be successful. SMEs may understand a function, lead a department, or be experts. Engage your SMEs in identifying and creating the processes necessary for success. Use feedback to gain a better understanding, avoid risks, and overcome hurdles.

Well-Developed Milestones

Plan well using clearly defined milestones like all other plans that create a path of obtainable goals. Even the smallest change works better when it goes according to a plan. Simple plans might be agreed to in an e-mail. More complicated plans may require more in-depth documentation using spreadsheets or project management tools. There is at a minimum an agreement, a start, an implementation, and success. Celebrate milestone achievements. Maintaining the momentum necessary for success helps keep your team members feeling appreciated which builds change resiliency.

Clear Communication

Clear communication helps eliminate disruptive rumors while preparing and inspiring your team. Use a communication strategy whether you are putting out an e-mail to announce a promotion or following a formal communication plan to keep your stakeholders engaged in big change. Use your communication strategy to constantly align any change with your company’s mission, vision, values, and goals.

Develop a strategy that fits within your company culture. Unread or unheard information is not useful and so your strategy must take into account how your stakeholders share information. Use the tools that are most effective for your teams in your communications. Town halls, e-mails, newsletters, intranet sites, regular meetings, video conferencing, and even tweets work when used properly.

Suitable Documentation, Training, and Support

Provide proper documentation, training, and support. Fear of the unknown causes resistance. Your team members want to be successful. As change happens, team members deserve the support necessary for success.

Develop and follow up on documentation, training goals, and objectives that show your team the benefits of success. When your employees understand how they can do their jobs better, faster, and easier than before they become advocates for the change. A well-written procedure, a useful checklist, and just enough training provides your team with the opportunity to succeed.

Reinforcement Through Follow-Up

Humans are creatures of habit. New habits take time to develop. Often, people slip back into the old way without even realizing what happened. Team members most resistant to change may even be waiting to revert when no one is looking.

Reinforce change by regularly following up on KPIs for 30 to 90 days provides accountability that incentivizes compliance until new habits form. After new habits form, going back begins to be considered an unwelcome change. At that point, the process is complete. Routine follow-up is the most important characteristic of a good change strategy important to making sure change lasts.

Managing Your Changing Team

Growth causes change. The challenge becomes how to create, build, add resources, and acquire skills quickly enough to make the growth profitable but not so fast as to create chaos. Sometimes managing efficiently means that better practices and automation cause teams to change. Your resources may need to move to new positions, new team members may be required, and others may choose to leave without being replaced.

Characteristics of good team management include:

Writing Good Job Descriptions

Positive change comes with good boundaries. Preparing a job description that defines expectations up front avoids having acquaintances, friends, and family members just create the job they want by only doing those things they enjoy. If you have resources in undefined positions then now is the time to become clearer.

Job descriptions do not need to be more than one or two paragraphs. Examples are on every job posting board. Some job posting boards provide you with templates and exercises to help you write better job descriptions for free. Once you have an accurate job description, it becomes easier to look on job boards to see what other similarly sized organizations are paying. Pay attention to the lowest and the highest offers to predict a more accurate pay range. Remember everyone wants their compensation to increase over time and so understanding where to start when you make job offers or give promotions allows room in your budget for increases.

Hiring Well

As you grow you may need and want more resources. Well-planned hiring builds strong teams. Hiring with a plan allows you to consider your real needs instead of just hiring another pair of hands. After all hiring people and filling jobs are two different things. Hiring slowly and carefully reduces your risks.

Be flexible to find just the resources you need at just the time you need them. Lin O’Neill, CEO of O’Neill Enterprises and Lead Faculty and Facilitator for 10,000 Small Businesses, is fond of saying, “Hire slow and fire fast.” She encourages small business owners to use a contract to hire approach to be sure the resource is a good fit before making a commitment. (O’Neill 2021) Using a contract to hire approach allows you to contract with someone for 30 to 90 days before offering full-time employment. Both you and your candidate have the opportunity to determine if the job is both a good fit and a good match before committing.

Use independent contractors and gig workers when your need is temporary. These contractors are self-employed and thus provide their own benefits and pay their own taxes. Independent contractors and gig workers fill in your gaps for projects, large contracts, and seasonal needs. Avoid using contractors to keep from paying employee taxes or to give benefits to some of your team and not others because that is illegal.

Make sure your contractors meet the required Internal Revenue Service (IRS) guidelines of contractors. Per the IRS, “The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.” (IRS 2021)

Sometimes however, what you need is a skilled and experienced resource for just 10 to 30 hours a week. It is not unusual for a growing business to need part-time professionals. Often, a more experienced part-time resource will move your company toward your goal without breaking your budget. Look for these resources among graduate students with real world experience, recently retired workers, and parents with young children. Consider using part-time professional focused job boards such as the one at CapacitySquared.net.

Hiring Resources

Your resources may include individual contributors, supervisors, managers, and part-time professionals. Often, it is tempting to hire people you know without going through a professional hiring process. However, even if you are sure you know who you want, taking your candidate through the hiring process is important. The hiring process confirms you made the right decision. Go through every step including and maybe most importantly checking references and the candidate’s background.

Follow these steps:

Hiring Fractional Leaders and Experts

Fractional leaders are part-time C-suite and senior leadership professionals who provide strategic leadership services to businesses as a contractor not an employee as discussed before. Experts are those resources who know how to do work you do not. Both often have wisdom and experience outside of the skills and training of anyone else on your team.

What to Avoid

Properly vet candidates. There are all kinds of people claiming to be experts. Avoid those who are not such as:

Fake Exerts

Fake experts are those people who target inexperienced clients by using buzzwords from books they once read. These resources do not really have the wisdom and experience necessary to lead a growing company into the future. Fake experts have not really held the position for which they are asking to be hired. They speak with confidence because they read books.

Candidates who lack experience struggle to answer practical questions about how to operate because these candidates know theory and not practice. Be sure to ask very practical questions and expect the candidate to detail one or more real-life scenarios when answering.

Impersonators

Impersonators may have actually worked in the field, but they exaggerate their actual work experience. One exaggeration may be that they reached a higher role in their previous work experience than is actually true. Another exaggeration may be that they do not have the number of years of experience they actually claim. Many impersonators may hold certifications from groups that do little if any vetting. These groups teach a weeklong class and then provide expensive certificates after the payment clears. Carefully check out any certification programs your expert relies upon for credibility.

No Fractional Experience

Just having had years of experience in a larger company, even in a leadership role is not enough to make someone a good fractional leader. A good fractional leader often has consulting experience. Consultants learn to lead people who do not actually work in a subordinate role to them.

These leaders need to develop and implement key business strategies while helping your team build best practice procedures oftentimes without any direct authority. For some leaders, this is a difficult transition. Fractional leaders must have the wisdom and experience to guide others to do what is necessary even when they are not around to monitor progress.

Fractional leaders are the harbinger of change. A fractional leader must convince your team to make the changes required for your success. For this reason, the skills required of consultants tend to work better than the skills required of someone who has worked in a larger business for many years. The best fit may be someone who has done both.

What to Look for in Experts

Hiring experts who know more than you should not be intimidating. You are paying your experts to be the one who knows. You must ask them to prove that is true.

Look for:

Intelligent Questions

Experts have a responsibility to make sure that they only accept assignments where they believe they can be useful. During an interview, a candidate should not just be trying to convince you to sign a commitment contract. An experienced expert asks questions about your business, your experience, and most importantly your team. Your answers determine whether there is a good potential match between your business and the expert’s experience. A good leader never accepts assignments that are not a good match.

Confidence

Watch experts for an air of wisdom and experience behind their words. Watch for sincerity when you ask hard questions. You want a leader who is never afraid to tell you hard truths. Someone who is timid or unsure will not gain the confidence of your team. Give each candidate a moment to consider answers to hard questions. Experienced experts are not afraid to take the time to answer questions correctly.

Practical Plans

Experts talk in terms of high-level practical plans that may include the pros and cons of more than one pathway forward. This may be the most crucial factor in making your selection. Experienced experts know how to do the job. Candidates should outline at a high level the steps that are necessary for success. They are not worried that if they give you the details about what needs to be done, you may decide to do it yourself. These experts know if you had the desire, experience, and time to do what you need, you would not be looking for someone else to take those steps for you. They believe that if by hearing the plan, you now think you can do the work yourself, you should.

Decision Points

Experts must display the confidence required to tell you what kinds of decisions you need to make to be successful. A good candidate clearly understands that you as a business owner are the one who is taking all the risk. A good match explains all the ramifications of a choice without needing to convince you to take one path or another.

Clear Expectations

Good candidates understand the results that can be achieved specific to the resources that are available. A good candidate offers a clear picture of expectations that should seem realistic to you. After gaining an understanding of your goals, an experienced candidate must offer a reasonable determination of the amount of time it would take to be successful as well. If the timeline is clearly too short or too long, that indicates a lack of experience.

Examples of Successes

Candidates with years of experience have success stories. The ability to tell a short and concise success story is one of the ways these experts gain the confidence of teams who must follow their direction. If a potential candidate does not offer any success stories during your interview there is cause for concern. Like any other candidate, your candidate must offer good references. Your candidate must support be both a fit and match. Do not skip the steps for hiring well.

Delegating Your Way to Success

Part of constant process improvement and managing change as you grow is knowing when and how to delegate. Delegate well to build a business that is agile, flexible, and resilient. It is clear to see how when you delegate well the company is more efficient and effective. Resources are more likely to do the right work at the right time.

Having your resources do the work they are best suited for saves your business money. Freeing up time for your leadership resources to do the work for which they are best suited may even improve your bottom line as well. Using people who are overpriced to do tasks at a premium gets expensive fast.

For example, no one would walk into a print shop and say I know you charge five cents a copy, but I want to pay you seventy five cents instead. However, many entrepreneurs walk by a team lead whom they pay $50 an hour making copies instead of an admin whom they pay $15 without a thought.

Not everyone has a team big enough to delegate. However, once you do it makes sense to create a frugal culture where employees collaborate to assign and do work in the most budget friendly way. You might even consider bringing on a part-time staffer or gig worker to free up team members who could be producing more income for you.

For example, there was a gentleman who owned a growing engineering firm. He took time away from billable hours to do all the purchasing himself. He hated procurement tasks and often the firm would run out of necessary items before he reordered slowing work. He thought he was showing that he was a team player.

Once he let go of the job and gave it to someone who did not do billable work, his team got supplies and he made more money. His team was happier too. They were able to bill more hours with less frustration. It turned out that they did not want him to be an equal member of the team so much as they wanted the supplies they needed to do their jobs.

What to Delegate

How do you know what to delegate? Ask yourself these three questions:

Is the Task Being Done in a Timely Manner Today?

Delegate the duties that you or your team most procrastinate about now. If you find that those mundane tasks that must be done keep getting put off then these are duties to delegate. As soon as possible, assign those tasks to someone more appropriate.

Is the Best Person Assigned to Do This Task?

Delegate tasks to resources who are better equipped to do them. If you are not an accountant or bookkeeper and you hate to do your finances, there is certainly someone better at it who loves numbers. In fact, you may have someone on your team who will do it in less time than it takes you currently.

Is This the Best Use of Time?

Time is a finite resource. Make sure your resources use time wisely. Never suggest a team member work overtime when another with the right skills does not have enough work. Conversely consider adding resources even temporarily at peak moments to ensure quality on-time delivery. Take time to weigh the long-term cost of missing a deadline or doing shoddy work against the short-term cost of getting more help.

How to Delegate

Once you are clear about what you want to delegate, consider how. The most common cause of delegation failure is a bad delegation process. Small business owners and leaders often give up on delegating thinking it is easier to do the work themselves. They get frustrated when sometimes the task is not done perfectly right away. They forget it may have taken them sometime to do the task as well. If you have been known to say that then you might be right once or twice. However, the cost of continuing to do work better done by someone else soon outweighs the temporary discomfort of delegation.

Delegating well begins with proper preparation and ends with reinforcement through follow-up. Make sure the process you want to delegate is documented. When your team members know what is expected of them and what it takes to be successful, they are more likely to meet your expectations.

Each time you or your team members prepare to delegate, ask this brief list of questions. When you know all of the answers, you are ready to begin:

Once you are clear, meet with your employee or contractor. Using a script to make sure you do not miss anything often helps (Figure 8.1). It may feel awkward at first, but soon it will be a natural habit.

Figure 8.1 Delegation template

For example, Joe, I have a task I would like you to take on for me. The task is posting to our social media accounts once per day. I want you to follow the process we have documented in our media standard operating procedures making sure to utilize the social media calendar and checklist. I will provide you with all of the assistance you need to be successful:

I expect you will be able to handle the task by the end of a week. I will know you are ready to handle the task yourself when you have no questions and there have been no errors for 30 days.

Maintaining Employee Motivation

Money and titles are not the only motivation for people. Small businesses attract people who enjoy the benefits of working for smaller companies. Money matters, this is true. The Deloitte Global Millennial Survey 2020 showed that 69 percent of millennials admitted that they are motivated by the possibility of making more money as they move forward in their careers (Figure 8.2). What was surprising though was the same study showed that 71 percent were motivated by diversity and inclusion in their work environment. Another 69 percent reported impact to be important. It is clear to see that job loyalty rises as you address employee needs. Job satisfaction depends on many factors within your control. (Deloitte Inc 2020)

Figure 8.2 Deloitte Global Millennial Survey 2020

Understanding what matters most to your team gives you the opportunity to increase your team members’ engagement. Doing so can be a win/win situation. Often, your efforts to engage your team work to your benefit as well. Consider, for example, embracing diversity in your hiring. According to the McKinsey and Company 2020 study, Diversity Wins, “In the case of ethnic and cultural diversity, our business-case findings are equally compelling: in 2019, top-quartile companies outperformed those in the fourth one by 36 percent in profitability, slightly up from 33 percent in 2017 and 35 percent in 2014.”

Providing Training

When your team knows more and gets better at doing their work you benefit. Encourage even require your team members to continue to learn and grow throughout their career. Consider requiring a certain number of hours of training each year for yourself and your team members. According to the 2020 Training Industry Report, independent researchers found that small businesses on average provided 41.7 hours of training per employee while larger companies averaged 55.4. The reason most given for lack of training was cost. (Training Magazine 2020)

Training does not have to be a big-ticket budget item. There are many free and low-cost options available through colleges, nonprofits, and online courses. Constantly improve by building a better, faster, highly skilled team from within through continuous education.

Avoiding Burnout

Burnout causes a high performer to gradually slip, develop a bad attitude, or become lethargic. “The most important burnout symptom is the feeling of total exhaustion—to the extent that it cannot be remedied by normal recovery phases of an evening, a weekend, or even a vacation,” per Christian Dormann PhD chair of business education and management at the Johannes Gutenberg-University. Most concerning was that after reviewing 48 studies on burn out from 1986 through 2019, Dormann discovered that the average age when people begin to experience burn out has gone down from 42 to 32. (Dormann and Gutenberg 2020)

When employees have been around for a very long time, they tend to become stuck. At some point, they cannot move forward. Improve the work of low performers who used to do well by asking them what they want. Consider moving low performers into other positions that better matches their interests now. Introduce new challenges into their daily routine. Recovering a burned out team member is far less expensive than hiring and training a new person.

You may well find they have reached the top of their pay range and there is no promotion available. They need other motivations to stay happy in their jobs. A study reported by The Journal of Labor and Economics showed: “Lower happiness is systematically associated with lower productivity.” Reach out to understand what other factors are important to keep your team members engaged and if you cannot consider helping your once valuable team member find their dream job, somewhere else. ( Oswald, Proto, and Sgroi 2015)

As a business grows, jobs get more defined. Individuals who wore many hats may now wear only one. Reporting requirements may increase as well taking away some of that prized autonomy. A once happy resource can become frustrated. When that happens, you do better to set your unhappy employee free to be happy. The job is no longer a match even if it still a fit.

Understanding the People You Picked

You built your team and you want the theory of how your team would work together to be as good at the reality. To make that happen, it pays to nurture your team members. It pays to understand them and make sure you are getting the full benefit of their skills and talents.

Personality Testing to Increase Understanding

People think differently. When you build teams with different perspectives, you build in resilience. You are less likely to be surprised. Creating teams with different leadership styles and communication styles creates cognitive diversity. Juliet Bourke, a consulting partner at Deloitte, defined cognitive diversity, “By cognitive diversity, we are referring to educational and functional diversity, as well as diversity in the mental frameworks that people use to solve problems. A complex problem typically requires input from six different mental frameworks or ‘approaches’ . . . hence; the need for complementary team members.” (Bourke 2018)

However, having team members who think and lead differently creates the possibility of conflict. Work through the discomfort by learning to appreciate and recognize the value of diverse opinions and approaches. According to Bourke, “research shows that diversity of thinking is a wellspring of creativity, enhancing innovation by about 20 percent. It also enables groups to spot risks, reducing these by up to 30 percent.” (Bourke, How to be smarter and make better choices, 2016)

Understanding how your team members think helps reduce those risks. There are a number of ways to get to know your team better. One of the best is through simple personality tests. Small business owners and team leaders often get new insight into how to understand, motivate, and encourage each other with a better understanding of how their team members communicate. The simpler the test, the better. The goal is to understand your team not to psychoanalyze them. (Bolton and Bolton 2009)

There are many tests. Here are a few commonly used:

Embracing Responsible Turnover

Avoid making turnover personal. Even when you have worked with someone for years you may come to a point where separation is the right thing for a variety of reasons. Often, your team members need to leave to continue to grow their career. Sometimes you need them to leave because they are no longer a fit and/or a match. Things change. The perfect team may not stay perfect forever.

According to an article published by Newsweek, CEO of Shopify Tobias Lütke, sent an e-mail to managers in 2021 stating, “Shopify, like any other for-profit company, is not a family. The very idea is preposterous. You are born into a family. You never choose it, and they can’t un-family you. The dangers of ‘family thinking’ are that it becomes incredibly hard to let poor performers go. Shopify is a team, not a family.” (Fung 2021)

Responsible turnover requires:

Noticing Turnover Red Fags

Too much turnover is bad for business and if you have more than 33 percent turnover in a single year then it would pay to go back and do some research to figure out why. Training is expensive and not something you want to have to do all the time unless it is part of your business model.

Responding to Changing Job Responsibilities

Sometimes turnover is necessary not because employees are stuck but because growth brings change. Small businesses tend to have fewer layers of management. In so many ways, that is beneficial. It equips small businesses with the flexibility and agility they need in the marketplace.

However, as you grow, you may find that team members who were very good at their jobs when you were smaller find themselves less comfortable now. New requirements may be more than they can handle. They may be resistant to more training. They are no longer a fit.

Some team members thrive in an environment of change that invites new people and new ideas and rewards innovation. Other team members may not be as comfortable with change. The job is no longer a match even if it still fits. Understanding that that is likely to happen will help you create a plan to manage the necessary changes when it does. This can be a hard moment.

Opening Opportunities for Innovation

When teams never bring on new members, the level of innovation tends to go down over a few years. Team dynamics tend to start to support doing things the same. New team members bring with them the whole of their past experience.

In that past experience, there may be opportunities for change that will improve the effectiveness and efficiency of your business you do not want to miss. While 33 percent turnover in one year may be bad, it is likely that 33 percent over five years is good. Allowing the natural evolution of turnover benefits your business. New team members reduce complacency and encourage taking steps to increase efficiency.

Offering Budget Savings

Turnover can be essential to maintaining your budget as well. Providing raises as a reward for excellent work is an essential part of keeping your team happy. This arrangement works as long as the pay that you offer is in alignment with your competitors and in keeping with your ability to make a profit.

However, your team members still expect raises even if a raise would put them outside of the industry pay scale for their position. Without turnover, no matter how much you care for them, your staff can become too expensive to ensure the profitability of your organization. If you avoid going over budget and reduce or eliminate raises for people who are at the top of their pay range then you may see that resentment builds up.

When you encourage your team members to grow their careers even if it sometimes means leaving you everyone wins. Embracing sound turnover allows employees to go on to better paying jobs with more interesting opportunities. You can then bring in people with the necessary skills who fill your teams with great innovative ideas at a lower wage.

Taking Action When Someone No Longer Fits

Most of the time, resources deserve an opportunity to improve before being let go. Some states even require that the ensuing detailed three-step process be followed except when your resource abandons a job, exhibits behavior that is violent, causes a valid safety concern, and/or violates the law. You must protect your business by having a documented process for termination.

Consider this process after determining it fits with the laws and regulations that govern your business.

Step One—Verbal Warning

Table 8.1 Written Warnings

If	Then
No infractions occur during the probationary period and the stated KPIs have been met	The matter is resolved
New infractions occurred or the KPIs were not met	Continue to Written Warning

Note: Refusing to sign a verbal warning (Table 8.1) is an infraction.

Step Two—Written Warning

Step Three—Termination

Table 8.2 Written Warning

If	Then
No infractions occur during the probationary period and the stated KPIs have been met	The matter is resolved
New infractions occurred or the KPIs were not met	Continue to Termination

Note: Refusing to sign a verbal warning (Table 8.2) is an infraction.

Changing Operational Capacity

The business that supports your drive to build and launch a successful opportunity to grow capacity must grow as well. Grow capacity with better systems that support increased efficiency, new resources that support greater effectiveness, and improved skills that support increased aptitude. Creating an environment that supports capacity growth creates a balance between rising customer demands and your ability to supply high-quality products and/or services. Use best practices to build a foundation that creates the balance you need to grow.

Small businesses that are successful at expanding capacity have these things in common:

Regular Support

Corporations and larger companies have boards and C-Suite teams of executives to leverage as support. Small business owners often report feeling alone with no one to objectively listen and provide guidance. Utilize any combination of business advisors, peer groups, consultants, fractional leaders, accelerators, incubators, or online business communities available as your support network.

Reach out for guidance knowing you have the option to only use the suggestions that make sense to you. Asking for opinions does not give away autonomy. You are still the final decision maker. Needing support does not equate to being weak or unprepared. Sun Trust studied high performing businesses to see what they had in common. They found “that high growth businesses report that they seek advice and guidance from peers and professionals at a much higher rate than other businesses.” (Sun Trust Team 2017)

Predictable Metrics

Metrics are of course the KPIs you set for your business. Use your metrics as a driving force to influence behavior designed to support attaining your long-term goals. Use predictable metrics to measure not just the numbers that predict performance, but also the effectiveness of processes to produce the change necessary to drive growth.

Take a look at the growth you predicted in your quarterly and annual goals. Break up those predictions into monthly KPIs that can be included on your dashboard. For example, you may want to measure growth in revenue month after month compared with the previous year to make sure you are hitting your target. You may also want to measure a percentage increase in customers or decrease in refunds to meet predicted goals. If you are carrying debt, you may want to watch the predicted reduction in your balance(s) as well to be sure you are on track. Your predicted KPIs are unique to your goals.

Measure process improvement as well. Make sure the foundation you built remains solid. Measure the predicted outcomes you expected to gain with your process improvements such as more professional communication, reduced internal conflict, or more efficient preparation. Sometimes team members comply with a change at the beginning and then slip back into old habits. Use operational assessment audits, team member reviews, and follow-up to measure your team member’s compliance with best practices over time. Once your standard operating procedures are set with agreed upon processes and procedures, predict and expect no less than 100 percent compliance.

Flawless Financials

Most entrepreneurs today use online accounting tools. EVEN if you are in an industry that does not require you to have computer skills and you have no desire to acquire them, it pays to keep your books using an accounting program. A bookkeeper or CPA can help you set up or clean up your financials if necessary.

Financial best practices require:

Financial Software There was a time when businesses used ledgers entered with pencils before spreadsheets such as Excel or Goggle Sheets. That time has gone by now. Many businesses still use spreadsheets, but that time is passing too. The accuracy and flexibility of free and low-cost software makes maintaining accurate financial records easier than ever before. Bookkeepers and careful accountants want to prepare financial reports easily and more accurately using standardized accounting software. Additionally, most small business owners and leaders like you appreciate the ease of pressing a button to get a wide variety of financial reports without paying someone for hours of work as well.

Financial software has many benefits:

Choose your financial software carefully. Selection criteria might include:

Operational Budgets Budgeting for your projects and opportunities is important. Budgeting for your entire business is even more so. Your project and opportunity budgets work best when they roll up to your operational budget. Bankers and investors want to know that you know the costs of running your business and you are financially prepared for unexpected surprises. Entrepreneurs who maintain budgets are more likely to be profitable.

Start your budget based on your history of spending if you have one. If you do not, then start with industry standards and tweak the budget to mirror your expectations. Predicting your costs often helps in setting healthy sales goals and making responsible hiring and purchasing decisions.

Budgets do not just predict costs. When you compare your monthly and yearly budgets to your actuals you see how close your predictions came to reality. Often, in the beginning, your predictions may be wrong. At this point, many give up thinking budget do not work. However, understanding those differences improves your accuracy and helps you build better budgets for your future.

Building Credibility

Establishing credibility is one of the key ways that businesses build trust among the purchasing community. It goes without saying that the better your reputation, the easier it becomes to sell your products and/or services. Build credibility by doing the following:

Utilize Your Website

Making your business easy for customers to find is the first step to building credibility. EVERY business should have a website as has been said before. Most businesses want to be found on one or more social media sites. It does not matter if your customers find you from your website or not. Having a website that can be viewed establishes you as a legitimate business. If you do not have a website, take steps to get one today.

Take Advantage of Longevity

The first three-to-five years of any business can be the most tenuous. Customers want to know that you plan to hang around. Your ability to hang around is proven by the ability you have shown to be around. It makes sense then, that the longer you are in business providing good reliable products and/or services, the more people trust you. Referrals tend to grow exponentially after 3, 5, and 10 year business anniversaries. If you have been in business a while, it pays to make that well known.

List Your Business on Dunn and Bradstreet

A Dunn and Bradstreet listing helps establish the longevity of your business. Good scores and ratings help establish your creditworthiness and stability. Your account also establishes you as a unique entity. Your account or DUNS (data universal numbering system) number may be required to apply for government grants or to receive government contracts. If you are not listed on Dunn and Bradstreet, get listed now. If you are not sure whether you are listed, search for your account DUNS number at www.dnb.com/duns-number/get-a-duns.html.

Leverage Shortcuts

There are several shortcuts to credibility. Take advantage of as many as you can. Consider:

Franchises

One shortcut to obtaining credibility for very young businesses is to align yourself with a more mature business. New franchisers can do that by using the franchise start date and not their own when advertising. You may not have been in business long but your franchisor is providing you with their hard-earned wisdom and experience. You paid to take advantage of that experience in your franchise fee. For example, when you see a new burger franchise such as McDonalds, you are not likely to wonder if the owner is new or the restaurant is well run. The franchisor purchased the McDonalds creditability and took advantage of the training that supports the chain’s reputation for consistent delivery.

Aligning With Investors

Another shortcut to credibility can be found by aligning with a well-known investor. Investors that have a lot of name recognition with the public are considered by many to be wise about who to back. If someone with experience is backing you, then often times customers will expect that you have been well capitalized and well vetted. This shortens the timeline you need to build creditability.

Partnering With Mature Businesses

Working as a subcontractor is yet another way to get credibility early. You may not have the reputation and longevity to get a big contract but someone does. Serving as a sub often allows you to build relationships with customers who otherwise might not be interested in speaking to you at all. Adding projects to your business resume that others recognize and respect can improve your RFPs and RFQs. Always be sure to be clear that you were a sub though because clearly stating your involvement is essential to maintaining your credibility.

Adding Value Through Documentation

The value of good documentation cannot be overstated. If you have not been convinced yet, ask yourself: if you could find out the secret to adding 15 to 25 percent to the valuation of your company, would you want to know it? Would you follow the steps even if it might take some time? If you could do one thing that would make your company more stable and resilient during periods of high growth or great change, would you do that even if it too some time? The path to consistent best practices comes through documentation.

The truth is that your business operations either encourage growth or discourage it. The secret to encouraging growth is so apparent it is often overlooked. The answer is simple and when done right easy.

Constant Process Improvement
Using
Accurate and Useful Documentation

This is as true for startups as for global corporations. Bankers, VCs, and potential purchasers know that documented businesses who focus on constant process improvement are worth more than businesses that do not. Businesses that use regular operational audits, well-drawn workflows, and step-by-step procedures as a way of building best practice–based standard operating procedures are prized. This is not the same as writing a manual and sticking it in a desk somewhere never to be opened again.

Documentation has been used for years as a way of increasing value and managing change. Regularly updated standard operation procedures used as a part of constant process improvement create the opportunity to grow capacity. Constant process improvement is based on the theory that things change and as a result we change. If we are paying attention, we can change for the better.

There are many benefits. Here are just a few:

Reducing Risk

Bankers and VCs hate risk. When your operations are carefully documented, your business is at less risk from the loss of a key person. Key people include business owners such as you, leaders, technical experts, and single sources of valuable information. Knowledge stored in someone’s head is knowledge easily lost. A key person is someone that would be hard to replace and that if suddenly lost because of illness, injury, job change, or life changes your business would need time to recover. Documenting all of your processes greatly increases the probability you can keep going without the loss of a key person becoming a crisis.

Creating Accountability

When you and your impacted resources agree your documentation is correct, you agree on a standard. Your team members can more easily be held accountable if they deviate. Conversations about performance become easier. There can be only two reasons an employee does not follow procedure. Your team member either did not follow the procedure or the procedure is wrong, and it needs to be updated. There is no room for debate. Less debate equals more harmony.

When you routinely hold your team members accountable according to the standards agreed, you set expectations that procedures must be followed. Team members are less likely to drift back into bad habits. Necessary changes are more likely to be discussed, agreed upon, and then properly documented. Changes are no longer made in a vacuum without regard to others who may be impacted.

Benefiting From Internal Experience

Many times, as your team members are doing the same task over and over again, they eventually discover steps that make them better at their job. This is the theory behind Total Quality Management developed by W. Edwards Deming PhD which later led to Six Sigma and lean manufacturing sometimes called Just In Time (JIT).

Deming said, “Improve constantly and forever every process for planning, production, and service.” He believed that if you ask the best people in your company why they are the best, they will tell you. If you do not ask, they often keep it to themselves. When you and your best team members write down the steps to being best you shorten the learning curve for everyone who comes along later. Everyone becomes better together. (Deming 1986)

Finding Gaps

The very act of committing to a process by documenting it in a workflow with the supporting step-by-step procedures helps you find the gaps in your processes that are inhibiting efficiency and discouraging growth. Workflows especially help identify where handoffs could be tighter and communication better so that every team gets the opportunity to show up at their best. Improving procedures so that team members know how to prepare and when to start can lower overall frustration and reduce costs associated with late delivery and mistakes.

Even very small companies with one or two people benefit from writing procedures. If you take time off, have an emergency, or have to grow very quickly the time you took may save your business. Additionally, writing down the steps to procedures you do infrequently saves time. For example, if you renew a license or certification only once a year, chances are you may not remember how next time. Taking time to write down the steps saves you from having to figure out the process again every year.

Making Positive Change Easier

Change happens. When you are in charge of change it is more likely to be beneficial to you. Businesses that survived the Pandemic were able to pivot quickly. Those who used workflows and procedures to document standard operating procedures could explore and get feedback about their new procedures for the pivot first. They were better able to uncover gaps in their pivot plans BEFORE they became costly mistakes.

Use your documentation to explore multiple options in times of change. Pick the option most likely to meet your needs with less stress and risk. Make your team more resilient by using your documentation to build a process of continual improvement. Teams that operated using the concept of continuous improvement could look at the Pandemic pivot as just another opportunity to do better in changing circumstances. Those kinds of teams are the most resilient.

Increasing Value

Bankers, investors, and purchasers, especially VCs, know that small businesses often have team members and especially team leaders and owners who wear many hats and have little back up. They know that it is likely that you and your leaders may walk away during a transition. For this reason, increasingly they discount the value of companies that cannot prove that the organization is well run by the documentation they keep.

In fact, it is a well-known strategy used by VCs to find an under documented company and purchase it for a discount. These VCs know they can spend a year documenting the processes which will lead to improving them. When the business is efficient, effective, and well-documented, they can sell it and take the added value as profit for themselves.

Grow Capacity With Templates

Templates work because they take advantage of repeatable processes. Most anything that is done in a business has been done by someone else at some time. Every report, proposal, and form has been created in one version or another. Templates save an enormous amount of time and energy because they reduce the amount of time it takes to create a document.

Using Templates

Avoid recreating the proverbial wheel. Templates are the simplest form of automation. Use templates to create consistency that helps ensure better quality and improved performance. Standardization reduces errors. The Internet is full of free and low-cost templates that can be used at little or no costs. Sites such as CapacitySquared.net have even gathered many of the standard work week templates in one place for your convenience.

How do you know when you need a template? Anytime that you find yourself gathering, writing, or presenting the same information over and over again it is likely that a template would save time.

There are a variety of ways to use templates:

Format

Many documents such as user documentation, training materials, presentations, proposals, quotes, and so on, are often presented on a regular basis. Formatting these documents only once in a template to save time and improve quality and consistency. Corporations use templates as part of branding. If you get a document from IBM, you know by the look and feel it came from IBM. Brand your business with your own templates.

Help your customers and partners recognize your work right away. Standardize presentations using templates with the same theme and style. Work to present the same information or same type of information to multiple customers is greatly reduced when a slide deck comes with the standard topics and order already laid out. Although some or all of the detail may have to be customized, the template topic flow helps ensure that key points are not forgotten.

Checklists, Reports, and Forms

Standardizing checklists, reports, and forms makes sure that the information required can easily be gathered and found by multiple team members. Being consistent is even more important when your documents are seen by your customers and clients. Consistent documents also help create professional credibility no matter how insignificant the document appears on the surface.

Visual repetition builds your brand. Starting with the work 50 percent to 75 percent done allows your team to quickly capture the information that is unique to your customer or client. It also reduces the amount of time it takes to get repetitive work done.

Information Chunks and Template Responses

Pieces of information your company provides over and over again on forms, in proposals and quotes, on applications, in e-mails, and so on, can become templated responses. Information such as your company description does not or a least should not change from response to response. Why rewrite it over and over again? Instead, save your responses so the information can be copied and pasted instead of recrafted ensuring consistency and quality.

Store templated responses in a common repository such as Drop-Box, Google Docs, or SharePoint making it easier to delegate the work of responding as well. Using the responses reduces the monotony that often leads to burnout. Team members who understand how to use templated responses become more productive as well. A well-crafted response to a frequently asked questions (FAQ) helps team members respond professionally even when they are frustrated, stressed, or overloaded. Many team members start to use the written responses verbally which shortens the amount of time it takes for a new team member to sound professional and informed. You may be surprised at how easily templated responses are adopted.

A museum implemented template responses to questions that were regularly e-mailed to shipping department team members. The same questions came even though there was a FAQ site on the Intranet available to all museum employees. Knowing that shipping antiquities was often much more complex than standard B2B shipments, the team wanted to ensure the information provided was accurate, consistent, and professional. Because of this, e-mails were sometimes delayed because the questions had to be forwarded to a team expert for a response.

E-mail templates were the answer. Any team member even a temporary could use the templates to provide an accurate and reliable response consistent with information that might already be published in FAQs immediately. The templates shortened response time increasing the perception that the shipping team was competent, professional, and reliable among museum employees.

How do you know when to create a template response? If you have provided the exact same information more than three times in one year, then it is likely to be requested again and again. If you save your answer in an information chunk as a templated response and you do not use it again, you can easily delete it from your library later.

Taking Advantage of Automation

Automation may come in the form of software, hardware, or both. Adair Turner Senior Fellow at the Institute of New Economic Thinking in a lecture at John Hopkins reported, “Everything is going to be eventually automated. As a relation to automation the question is when not if.” All businesses have some functions in common and automation of these common functions is the new norm in the 21st century. Most industries have common practices within the industry as well where standardization through automation saves time and money. (Turner 2018)

Automated tools offered as cloud applications or desktop software save time and labor while helping to make sure the information needed to run your business is available in real time. Software enforces best practices. The steps that it takes to enter data or to use the application create the procedures that your team must follow. Additionally, most software reduces errors by checking the data as it is entered. Data such as phone numbers, social security number, addresses, and so on, must be entered in the correct format to be accepted. Automation often creates transparency as well. Everyone granted access can see the data. This allows your team members to proactively step up to create better more efficient processes.

Mechanical automation changed the world beginning with the industrial revolution. Machine automation is not new. Its benefits in efficiency and standardization are well known. Today, robots and Artificial Intelligence (AI) are bringing a new revolution.

Many are calling the 21st century the Robotic Age. Innovative robotic pricing was for a long time outside the budget of most small businesses. This is no longer true. Robotic arms do everything from putting stuff in jars, flipping hamburgers, and accomplishing specialized very repetitive tasks. Robots are best at mundane tasks. However, they do not handle unpredictable variables well. A robot can attach a screw at a certain angle and depth every time. It cannot typically adjust if the hole is sometimes one centimeter to the left or two centimeters to the right. The hole has to be in the same pace every single time.

Robots do not burnout, take vacations, or need benefits. Consider robotics if you can pay for a reliable robotic solution for less than the cost of an employee including benefits and taxes over the life of the machine. For example, if you are considering a robotic tool that you expect to be reliable for five years, you need only do the math to make a decision. If a robotic tool costs $25,000 to buy and another $10,000 to learn to use that is a lot of money. However, if an employee costs you $30,000 per year and a robotic tool can do the same work as two employees you save $25,000 the first year. Assuming you do not plan to give raises, over the next four years you save $60,000 per year or $240,000.

AI may however be the biggest change in the 21st century. AI applications gather and sort data much faster than humans. The software rapidly repeats learned processes. AI cannot think on its own. It has to be told what to do and then it practices doing the task over and over until it gets it right. For example, if an AI application looks for red cars it might first pick out colors related to red such as pink, orange, and purple. After being told pink is not red, orange is not red, and so on, over and over again, the application “learns red.” After the application knows the color red, it can look at traffic camera video to find and count red cars. When AI is good at counting red cars, it can start to make predictions such as how often a red car might drive by in an hour.

AI becomes particularly good at yes, it matches, or no, it does not. For this reason, AI can do many repetitive tasks such as “learn” the predictable answers to standard questions making unmanned chat boxes useful to support your customers. AI performs research better and faster than humans as well. This has real benefits for research. Some hospitals are beginning to use AI to predict possible diagnosis. However, it takes a human to decide when a diagnosis actually fits based on the unique symptoms of a patient. AI does not have any ability to think creatively.

Use AI to free up your team members when it makes sense such as providing online customer support. Use predictive analytics to predict the features, functions, and required productivity that will be most popular to your customer. Use it to do data interpretations that predict likely outcome of choices. There may be other uses as well.

Managing Market Changes

What your customers want and need changes over the lifetime of your business. You have probably heard the old axiom that the only things that stays the same is change. Markets change (Figure 8.3). Be prepared to change along with your market for your long-term strategy to work.

Figure 8.3 Marketing Maturity Curves

Consider how markets change:

Trends

Trends shift over time and so where your business fits in a trend cycle is important. These curves often look more like an L than a curve. If your business success is based on a trend, you must be ready with the next trendy opportunity before the fad comes to an end.

Toy companies are often good examples of trend businesses. Consider the fidget spinner. For a year, a fidget spinner was a hot item. Kids and even some adults were entranced with the mesmerizing spin all across the United States. They were hot at least until the next trend came along and then they were left in the bottom of a closet or a drawer.

If your business provides stable goods and services, you still need to be aware of trends that impact their market as well. While these trends happen more slowly, they are important. For example, in 1990 if you wanted something printed then you would go to a printer. By the year 2000, you were much more likely to print from your home or office. Printing businesses struggled but printing was easier and more common, so paper mills flourished and printer manufacturers grew. By the year 2020, the Internet had made the need to print a document rare. Printer manufacturers and paper mills saw their businesses shrink. And so, it goes, you want to know how your business is impacted by the trends that create your marketing maturity curve.

Niche Opportunities

Your market does not always have to be growing to be viable. These are opportunities for small businesses to fulfill a need that may not be growing but will be around for a while. Consider niche markets when you can make a profit from a segment of business a larger competitor may not have any interest in pursuing.

For example, home air conditioning unit manufacturers moved away from using freon at the turn of the century. However, homeowners with freon units still needed them serviced. They did not want to replace units that worked because they ran out of freon. Small servicers who handed freon stayed in business maintaining freon units for more than a decade. This is what marketers call the long tail because the need is greatly reduced but does not go away making the end of the marketing curve look like a tail. These tails create niche markets.

New Innovations

Innovations shift markets. The automobile ended most travel by train in the United States in the 19th century. Electric cars are replacing those powered by fossil fuels. One grows while the other declines.

Civil Emergencies

Emergencies though rare have immediate impact that sometimes cause short-term and sometimes lasting change. The Covid-19 pandemic changed markets overnight as people who easily moved around for work and play sheltered in place. Tech companies that supported remote workers were big winners while restaurants closed by the thousands.

These changes cause immediate disruption. Once they are over, the market that existed to support the disruptions begins to shift back except but may never completely return. In the beginning of the pandemic, face masks were in high demand. After the widespread adoption of vaccinations and the innovation of medication to treat the virus, the face mask need went away. This was a short-term change. However, many workers who quickly adjusted to working from home made a cultural shift. The percentage of workers working remotely went down as offices reopened but not to prepandemic levels. Resources found they liked working from home and were willing to change jobs to avoid the office full-time creating a lasting change.

Regulatory Changes

Few businesses escape regulation. Regulatory changes can be impactful to both products and services. Needs to meet those challenges can create brand new businesses or shutter others that have been around for a long time. Regulated businesses must carefully watch for impending changes to pivot to meet new demands.

For example, manufacturing was in big demand in the United States in the first half of the 20th century. Changes to environmental and pay regulations made manufacturing more expensive over time. Changes to import/export regulations including taxes make moving products around the world more cost effective. Manufacturing began to move offshore and so small businesses that supported manufacturing quickly lost their customers.

Supporting Change Through Culture

Your business has a culture. Anytime you bring a group of people together whose goal is to accomplish something, a culture forms. If you do not conscientiously create your culture, it grows organically. Organic growth can be good or bad. Create and keep the culture you identified you want by conscientiously making sure your desired characteristics are encouraged and nurtured. Use the Culture Quiz regularly to help maintain the culture you want.

Charles and Don Sull PhD, cofounders of CultureX and MIT researchers, concluded that based on results from the MIT SMR/Glass-door Culture 500 study in 2021, “Knowing what elements of culture matter most to employees can help leaders foster engagement as they transition to a new reality that will include more remote and hybrid work.” (Sull 2021)

Here are characteristics that contribute to a healthy culture:

Healthy cultures must be nurtured. Building a healthy culture takes time and attention. Cultures can shift quickly in times of change. Often, new influences cause conflicts.

For example, Rob Becker did an informal study of anthropology and claimed to have come to a better understanding of how humans communicate. As it turned out, he was also very funny. He would often pair college lecture tours with nights headlining at comedy clubs. His show, Defending the Caveman focused on the difference between male and female cultures.

He explained the friction that sometimes happens when people come together during a lecture at the University of Texas at Dallas. According to Becker, groups develop a culture over time. What is considered polite in one group may not be considered polite in the other. He illustrated his point with the “chip and dip theory of female/male communication.” (Becker 1992)

Becker began by telling a story that went something like this. A group of women get together for an evening and they’ve brought chips and dip with adult beverages. Eventually someone notices that the group is running low on chips. One woman says, “I will go and get more chips.” Another woman immediately says, “I’ll help you I’ll get more dip.” A third woman says, “As long as we’re doing that we could use more wine. I’ll go open a new bottle.” Everyone is happy.

A group of men across town are doing the same thing. The men are enjoying their conversation when one notices that the chips are running low. The man says, “We need more chips.” Another man replies, “I brought the chips.” A third man says, “I just brought everybody a beer.” The conversation continues until the group determines who lost the competition and that man gets up to get more chips. Again, everyone is happy.

Within the inner circle of each culture, the norms have been applied. The problem comes when you mix the cultures. Becker went on. The next week both the men and women come together as a larger group to share conversation and adult beverages. This time a woman notices the chips are running low. She says, “I think we need more chips.” One of the men immediately replies, “I brought the chips.” All of the women simultaneously look at the man and think “what a jerk.” (Becker 1991)

What was acceptable in one culture was not acceptable in the other. The rules are unwritten and, therefore, when new people enter a culture, it can be easy to violate the cultural norms without realizing it. When shifts happen, the culture must adjust, or it will become toxic with judgments of right and wrong that often go unspoken.

Some cultures are more formal than others. The culture of a legal office will most likely be different than the culture of a social media company. Neither is wrong. The important thing is that the culture fits the environment and that the people invited into the culture understand the norms and are comfortable within their surroundings. When newcomers can be comfortable within the work environment, they are a match. When they are not comfortable, they will either become unhappy and make others around them unhappy or they leave.

Respect

Teams come in all forms. Your resource may be an employee, a volunteer, or a group of business partners. Regardless team members that get along are more productive. The more respect your team members show each other, the more likely your team is to interact in harmony. Don and Charles Sull reported, “Respect was more important by far than any other category studied based on the MIT SMR/Glassdoor Culture 500.” (Sull and Sull 2021)

Use the tips that follow to help sustain an empowering environment for your organization:

Honesty and Integrity

Even large companies struggle when their reputations are called into question Your word is your bond. Whether or not you keep your word is part of your business reputation, damage to your reputation can have a lasting impact.

For example, many years ago a national retailer became widely known for delaying payment to small vendors for up to 120 days outside their agreement to pay. They knew small vendors were unlikely to report to the credit bureau but were likely to experience great hardship when payment is delayed. Although their credit rating was not hurt, news of distressed vendors made it extremely hard to find vendors who would do work with them. Other vendors charged them more to account for the interest charges of paying their resources and expenses while waiting for payment. The cost of saving money by delayed payment became higher than the cost of paying on time.

If you say you are going to pay someone when the job is done, you HAVE to have the money available even if your customer’s check does not clear. If you say you will pay when you get paid then as soon as the payment has cleared your account, you must pay as promised.

In the same way, you and your leadership team must keep promises to your team members. If you promise that someone will get a raise, you must make sure that happens. If you promise that certain resources will become available to your employees that will make their jobs somehow better or easier to do, you must be ready to make the investment. If you promise that something will change about your business, you must make that one of your goals.

Transparency

In order to be transparent, an entrepreneur must share facts about the business. Leadership teams must be empowered to be truthful as well. Transparency has risks. If you decide that transparency is important then you have to be transparent even when it is uncomfortable. If you or your leadership team has made promises that you made in good faith, but something has changed, the sooner you tell those who are impacted the better.

What happens when you cannot tell the truth? If you are not comfortable being transparent then you must say that right up front. Sometimes secrets are necessary and may even be forced because of laws or regulations and that cannot be helped. Just know that when secrets are kept, those around you are aware. When you are in the situation, save trust by being transparent about what the situation is and why.

For example, Mark Cuban, the billionaire owner of the Dallas Mavericks often seen on Shark Tank, was the innovator of streaming video on the Inter-net. When he began, he faced regulatory challenges. He hired resources and started development. However, there was a point where development stalled while regulatory changes were in process. One of his software engineers came to him and said that he did not see the future.

Cuban told him that he was bound by rules and regulations not to provide details and assured the young man if he stayed, it would be worth his while. Cuban was completely transparent that there was a risk but tried to reassure his developer that the risk was being managed. The developer left.

Six months later regulations changed, Cuban was able to launch broadcast.com and then sell it to Yahoo for a huge profit. The resources who stayed were handsomely rewarded. Those who left were not angry with Cuban. He was transparent.

Being transparent does not mean that you share everything with your employees and contractors. Being transparent about the boundaries you face is still transparency.

Collaboration

When your team works better together, your business does more, better, and faster than it did before. Fostering a collaborative environment permits your team members to ask questions and learn from each other. Issues are reduced and productivity increases. When your team members feel free to reach out right away when something goes wrong your business becomes better at solving proems quickly. Team members who are regularly brought together in effective team meetings to collaborate tend to report feeling more valued which reduces turnover, improves efficiency, and reduces costs.

Flexibility

Flexible cultures happen in businesses where change is managed well and issues are easily recognized and continually resolved. Flexible cultures experience less chaos in times of change. The business actually becomes more resilient because team members trust that they can bring up issues knowing risk is managed well. In flexible cultures, people are empowered to be honest.

Time Management

Build a culture that expects efficiency by managing time well. If you or your team members cannot manage to get all the work planned done in a workday on a regular basis then something is wrong. This might exclude seasonal up ticks and predictable deadline pushes, but on average, work should be done in the timeframe expected. When your team knows what is expected, you can hold each other accountable.

If overtime is a day-to-day regular part of your budget, then you must consider what should be done to avoid team member burn out and protect your revenue. Either the plan is wrong, you need more resources, or your resources are not working as efficiently and effectively as they could. All of these issues can be fixed. First, recognize there is a problem. Second, determine what the problem(s) are as quickly as possible. Third, make the necessary corrections.

Be the example of how time is best managed within your organization. If you insist meetings stay on topic, show up on time, meet your deadlines, and focus on your work during work hours your team will expect that they should do the same. You and your leadership team set the standard.

When your resources do not achieve goals, hold them accountable. When your resources DO achieve their goals, celebrate their achievements. Oftentimes, it takes no more than an attaboy in front of the group to encourage others to strive to meet their goals as promised.

Priority Setting

When there is much to be done then it is time to set short-term priorities in alignment with your long-term goals. Your Roadmap to Success provides strategic focus. Focusing on meeting milestones on your long-term plan is another way to prioritize. Another is to realign your efforts based on what needs to be done right now to avoid being overwhelmed by competing priorities.

Use the Eisenhower Matrix pictured below (Figure 8.4) as one tool to help you focus your concentration on what matters. Avoid using this tool to procrastinate. Your long-term and short-term priorities must be given consideration. For example, if one of your goals is to better understand your financials and/or document your business within the next year and those things are important to you, they should show up on your matrix.

Figure 8.4 Eisenhower Matrix