Tag Archive: employee_delegation

How to hire a CEO for your small business

How to hire a CEO for your small business
by Susan Caminiti.

How to hire a CEO for your small business. It may sound counter-intuitive, but the skills needed to start a small business—perseverance, patience, and passion, to name a few—aren’t always the same ones necessary to take a company to the next level. Sure, as the founder you’re the person who came up with the brilliant idea for your product or service, and can zealously promote it to potential customers better than anyone. But if you can’t (or don’t want to) deal with the day-to-day functions of running a growing enterprise, it might be time to consider bringing in a chief executive officer.

Charley Polachi, a partner at Polachi & Co., an executive search firm in Framingham, Mass., works with many small companies as they’re entering their early growth stage. He says the first step he recommends for any founder looking to hire a senior manager is to define the pain they’re trying to address. “Usually it’s a matter of too much or too little,” he says. “The small business owner is either too busy and can’t keep up with all aspects of the business adequately, or the business has stalled and he or she needs someone who can come in and move it ahead.” How to hire a CEO for your small business

Know what you want

Regardless of which scenario is driving the decision, the experts we spoke with all agree on one thing: define the CEO job thoroughly before you start your search. It’s not enough to say you want someone with financial or organizational skills. As you draw up a detailed list of the attributes and qualities you’re looking for, go a step further, suggest Polachi. What functions will this person be responsible for every day? What are you able to pay? And of course, as the founder, what roles and duties are you willing to realistically delegate? “Very few small businesses need a clone of the owner,” explains Dan Bowser, president of Value Insights Inc., a business valuation and exit strategy consulting firm based in Summerville, Pennsylvania. “When you’re drawing up the specs for this new person, you want to hire someone with skills and abilities that you don’t have.” How to hire a CEO for your small business

Evaluate the person, not just the resume

Once the job has been defined, don’t rush through the interviews. “There should be no fewer than three interviews when you find a promising candidate,” says Polachi. Each time you bring them back, the conversation should delve deeper into determining if you’ve found a good fit. “Ask them if they’ve ever scaled-up a business and how they did it,” he adds. “When you’re bringing someone into a small business in a senior position, his or her management style is absolutely critical.”

That’s because the skills and style that worked wonderfully in a billion-dollar corporation with thousands of employees doesn’t always translate well into a million-dollar organization with dozens (or fewer) workers. “There is a huge difference in support and responsibilities between a big and small company,” observes Bowser. “Everything from having to make your own travel arrangements to the ego boost that comes from working for a big company—all those issues have to be considered before bringing someone into your small business. I’d have real concerns about an otherwise great candidate if all they have is big business experience.” How to hire a CEO for your small business

HireaCEO_PQ.jpgDon’t expect perfection

What if you do everything right to find a CEO for your company and the person still doesn’t work out? For starters, don’t panic. Experts say most small business owners aren’t terribly good at (or even like) the hiring process, so the chances of getting it wrong—even when looking for a senior person—are pretty high.

John Brown, president of the Business Enterprise Institute (BEI), agrees. He recently worked with a couple that was routinely clocking 50 hours to 60 hours a week at their small business and hadn’t taken a vacation in 15 years. They hired a senior manager to relieve some of the burden, but when he didn’t work out they moved him into sales and contacted Brown about selling the company. “They were so burned out and so sure they’d never find the right person that they just felt they had no choice other than to sell the business,” he says. How to hire a CEO for your small business

To avoid that sort of draconian response, set 60- and 90-day performance reviews once you’ve hired someone into a senior position. “You’ll probably know within the first 30 days if this person is going to work out, but after 90 days you should certainly have a feel for whether this was a smart hire,” says Brown. And if it’s not, Brown says he likes to remind his clients of management consulting guru Peter Drucker’s advice: Hire slow and fire fast. How to hire a CEO for your small business

Understand your new role

“Someone can be an ex-CEO of a company or an ex-president, but no one ever introduces themselves as the ‘ex-founder’ of a company,” says Polachi. “Once you’re the founder, you’re always the founder.” That doesn’t mean, however, you’re going to play the same role if you’ve decided to bring in a CEO. How to hire a CEO for your small business

Bowser advises clients to take the time to introduce the new manager to existing staff, outline his or her responsibilities within the organization, and then clearly state that this new person has your full support. Do not tolerate end-runs around your new hire by employees who say they’re more comfortable working with you. “That will only confuse people even more and undermine the person you’ve brought in,” Bowser says. “Calmly explain that the new person is now handling some of the duties you had been and ask them to work directly with him or her. Eventually employees will get the message.” How to hire a CEO for your small business

Setting Your Employees Free (to Work): Creative Ways to Foster Your Staff’s Work/Life Balance

Setting Your Employees Free (to Work): Creative Ways to Foster Your Staff’s Work/Life Balance

“I believe that if you provide the right working environment, people enjoy work,” says Colin Earl, CEO of EnterpriseWizard, a web-based business solutions company in Silicon Valley. This attitude—fueled by the desire to avoid the sort of office politics Earl had experienced at a previous job—greatly influenced the United Kingdom native when he founded his company 20 years ago. The result: telecommuting, a relaxed dress code, and free food on-site are regular options for all his employees.

Although traditional business proponents might dismiss some of these choices as soft or unorthodox, Earl views them as necessary to the bottom line. If you offer your workers more flexibility and a better work/life balance, the chances are greater that they will be happier and more productive. In this vein, happy workers translate into healthy profit margins.

For employees with family obligations such as children or ailing relatives, having a work schedule that affords flexibility can be a lifesaver. But like other things in life deemed too good to be true, this goodwill needed to be harnessed correctly by small business owners lest they be abused. Telecommuters who routinely take off hours during the workday to attend to personal matters, or who otherwise fudge the number of hours dedicated to a project, for instance, are not good for the morale of other staffers—or the bottom line.

“The main thing is to make sure that the employee’s self-interest is aligned with the business self-interest and vice versa,” advises Earl. At the same time, he adds that it’s critical for small business owners to create a culture in which employees know that if they blunder, they will be penalized just as they will be rewarded if they do well.

Creating Balance

According to a 2011 study conducted by the Society for Human Resource Management, not having an equitable work/life balance continues to rankle employees. Among the findings, nearly nine in ten working Americans say work/life balance is a problem, and over half—54 percent—called it a “significant” problem. In addition, 43 percent of workers do not think that their employer is doing enough to address work/life balance issues.

To address this issue, businesses are increasingly turning to flexible hours and work from home solutions. According to the Bureau of Labor Statistics, in 2010 nearly one quarter— 24 percent—of all employed persons did some or all of their work at home. (Men and women were about equally likely to telecommute.) Perhaps not surprisingly, entrepreneurs are leading this trend, as the BLS found that self-employed workers were three times more likely than salaried workers to have worked from home—64 percent vs. 19 percent.

PQ_WorkLifebalance.jpgEmphasize results over hours worked

Erik Huberman, CEO of Swag of the Month, a year-old retail discount company with a staff of eight based in Santa Monica, California, echoes Earl’s sentiments about accommodating workers to improve their work/life balance.

“If you are going to allow for flextime and remote work, make sure work is more about deliverables and specific goals,” he notes. “If you make it an hours thing, it’s easy for employees to get distracted. If they know what is expected of them, they will generally rise to the occasion.”

Cultivate the virtual world

To allow busy staffers to be occasionally off-site to tend to a personal obligation, train them in web-based programs such as Salesforce.com, Quickbooks Online and Google Docs. This will give them the tools to continue working when they’re not on-site and meet project goals without being at their desk or at a sales counter.

For James Sinclair, a principal at OnSite Consulting, a nine-year-old nationwide hospitality consulting firm, giving up office space three years ago and going virtual has been a boon for him and his staff of 65 full- and part-timers. Not only has it drastically lowered overhead costs for Sinclair’s business, but, according to him, it has also increased revenues by having employees in the field at all times.

“The ‘lightbulb’ moment came because I was virtual anyway,” recalls Sinclair. “I spend 200-plus days on the road so I had been virtual for years and been using a hodgepodge of technology to get data access anywhere, be paperless, and stay in touch with project management.” Coincidently, the lease renewal on the company’s office came up for renewal and because clients rarely visited, Sinclair thought the timing was auspicious to make the shift to virtual.

Using Microsoft’s Office 365 technology platform, which aggregates all documents and communications into one hub, Sinclair and his staff now work wherever they are. The end results have been worth it, he says.

“Now staff is managed on goals met and not hours worked or schlepping to the office,” he continues. “The result is that people became more available, more passionate about work, and more thrilled to be working for me and vice versa. My employee efficiency skyrocketed and, above all, I now have an advantage against my competitors. They could lure my staff with more money, but not with the lifestyle I can afford [my employees].”

Think like a maverick

If you’re serious about implementing ways to improve your employee’s work/life balance, then you will need to think creatively. Further, ask yourself how these changes will be both in your company’s and in your employee’s best interests.

“Disregard the norm,” urges Earl. For instance, in his ongoing quest to appeal to both his employees’ and his company’s best interests, Earl says he offers his staff free food.

“People tend to work a little later when they’re not hungry,” he says. “When it’s 5 p.m. and they have a snack they’re more likely to work until 6 p.m. I’ve been to companies where employees had to pay for their own coffee.”

Improving an employee’s work/life balance hinges on how flexible a small business owner is willing to be. Taking the time to be clear with your staff about expectations is key to your success in managing any new work arrangements. Expect a few hiccups in the beginning, but keep in mind that in our world of 24/7 instant communication, allowing flexibility for your employees has never been easier.

If you are thinking of offering telecommuting as a viable option for your employees, check out the following articles for helpful tips.

Branching Out: Staffing Issues to Consider When Opening a Second Location

Branching Out: Staffing Issues to Consider When Opening a Second Location By Iris Dorbian.

Imagine this scenario: After some early struggles, your small business is starting to make money. Your customers are loyal and steady and you are at a point where you can easily pay your overhead and vendors (while taking a healthy salary for yourself). More so than ever, you are ready to open a second location.

Such a proposition presents exciting opportunities for a growing business but it also offers considerable challenges. The biggest hurdle—aside from finding a convenient and affordable location in relatively good condition—is personnel. How are you going to find reliable employees that you’ll be able to trust when you’re not around?

Transfer responsible employees to the second location

If you know straight off that you will not be present much at your company’s second branch, consider transferring key employees who are already well-versed in how your business runs. Such a move will not only save you a lot of sleepless nights, but it will also give your second location a running start by staffing it with trained personnel who can prioritize and act responsibly on your behalf.

Keep in mind some potential pitfalls, however. Moving original staff to a second branch could cause disruption to the workflow at the flagship location. Further, original staffers might not be adept at training a new team to handle company protocol while also dealing with the work volume. That’s why it’s important to fully explain expectations to your flagship staff before you begin shifting workers around.

Hire only when necessary

This may sound counterintuitive when you’re looking to expand, but if your business is a small mom and pop-owned operation with limited funds, it’s an important point to consider.

“Don’t take on the added expense of extra employees until you really need to,” advises Lucille Skroce, co-owner of Matisse Chocolatier, an Englewood, New Jersey-based gourmet chocolate shop that recently opened a second branch in Orangeburg, New York. “You work with what you have until you can’t do it anymore.”

Skroce, who purchased the business in 1995 with her husband Vlado, cites a familiar scourge as the reason for the expansion. “My husband has been unemployed in the construction industry the last three years,” she admits. “[Matisse Chocolatier] is the one business [in our family] that’s doing OK so we thought maybe we can do it again and have another revenue stream coming in.”

Since the second location opened last December, Skroce and her husband have been its full-time staff. However, she recently hired a part-time employee who is not a transplant from the flagship store, which has two full-timers and several part-timers. This addition allows Skroce time to pursue other things and “have a life,” she says.

Don’t sacrifice customer service

Replicating the success of your flagship at a second or even third location means offering the same level of customer service. Don’t sabotage those efforts by skimping on your employee training.

“Our clients love the ability to talk to a real person every time they call in,” says Craig Rollins, CEO of LJCooper Wealth Advisors, a small wealth management firm that launched in Utah in 2000 and has since branched out to offices in Colorado, California, and Florida. “I will never have an automatic or phone tree installed because our customers go out of their way to tell us how much they appreciate being able to speak to a live person.”

“Servicing your clientele needs to be about providing a quality experience that is repeatable and reliable from the receptionist to the CEO,” says Rollins. “Management should staff according to how good they want their customers’ experience to be.”

Even though Lucille and Vlado Skroce are the full-time team at their new location, they are slowly integrating their part-time employee into the new store. The goal of this take-it-slow approach is to give them the time to sufficiently train the new hire so that eventually she will be able to run the second location with little to no supervision.

PQ_StaffingIssues.jpgHire via word of mouth

For small business owners, hiring a new worker through referrals, rather than placing an ad on an industry job board or a site like Craigslist, may be their best bet. Filling a position via word of mouth fosters a greater climate of reliability.

“When you have a small family-run business, your whole family and life revolves around it,” says Skroce. “That’s why it’s so important that the people you bring in are people you can trust.”

Find future employees among customers

“Learn from your prototype what you want out of your staff, then start building buzz to attract that type of individual long before your new store opens,” advises Edward Liesenfelt, general manager of Gelato Paradiso, an Italian dessert shop that opened in Newport Beach, California in 1999 and expanded to a second location in Laguna Beach in 2006. “The reason you are expanding is likely because your flagship location is popular enough to warrant a new venture. Use that to leverage interest in your new location not only from consumers but for potential employees as well.”

Using a strategy similar to that employed by the Skroces, Liesenfelt says Gelato Paradiso, which typically hires employees on a part-time hourly basis, does not advertise vacant positions—even on its website. Rather, Liesenfelt says he looks for applicants drawn from customers that have expressed an interest in working at the shop.

“This way, when we require new help, we start with an applicant base that has already come in, tasted our product, and taken the initiative to get a foot in the door,” he explains .“By the time new prospects fill out their applications, they have already envisioned themselves as a part of our company, which shows during the interview process and beyond.”

Never forget that employees are your best brand ambassadors. Hire smartly and you will foster a work dynamic that will not only make workers want to be part of that environment but attract enthusiastic customers to your next store as well.

Remote Control: Smart Ways to Manage a Virtual Office

Remote Control: Smart Ways to Manage a Virtual OfficeBy Erin McDermott.

Once upon a time, small business owners gathered their staff in one location from 9 a.m. to 5 p.m. They would dial all 10 digits on landline telephones and get charged a hefty price, await the latest batch of tasks once the mail arrived, and sometimes even meet at an actual watercooler to chat.

Remember those old days—you know, the early 1990s?

Today, technology has made it easier than ever to run a small business and manage employees from afar. Inexpensive Web tools, like Skype, GotoMeeting, and FaceTime have broken down the barriers in face-to-face contact, making even a virtual office seem much more, well, real. Laptops, wireless Internet, and smartphones make work possible pretty much from everywhere and every time zone. Adding to the appeal is the fact that telecommuting is favored as an eco-friendly alternative to millions of cars clogging our nation’s overcrowded highways. So how can a smallbusiness owner manage to be a good virtual boss no matter where their employees might be?

“Basically, you are your business,” says Rachel Newmark, who runs a swim school, SafeSplash, out of her home in Northern New Jersey. “As a business owner, your reputation is everything. You always have to be available to customers and staff for anything and everything to ensure that the business runs smoothly,” she explains. And because she partners with two public pools to hold her private lessons, she adds, “I always have my phone on to take calls day and night and have to do on-site monitoring as well. ”

PQ_Manage.jpg“The idea of people working from home watching soap operas and sitting in their pajamas is a myth,” adds Jane Applegate, author of “201 Great Ideas for Your Small Business” and owner of The Applegate Group, a multimedia company that produces content aimed at small businesses. “People who work from home really do work harder now. With the economy, there’s no slacking off. The work has to get done. You can’t underperform.”

It’s an increasingly business-anywhere world that’s getting the work done. At this month’s South by Southwest Interactive Festival, an annual networking event for startups and entrepreneurs in Austin, Texas, Applegate says she was stunned to see thousands of small business owners perched everywhere, plugged into all available outlets, doing business even while sitting on the floor.

Still, there are some do’s and don’ts that small business owners should pay careful attention to when venturing into the virtual work world:

Look for staff you can trust: “It’s difficult to hire right if you’re hiring people you’re not familiar with, particularly those who have no virtual-organization experience,” says Jeff Zbar, creator of ChiefHomeOfficer.com, a website for home-based entrepreneurs, teleworkers, and the people who manage them. If you’re handling a virtual office, check out reputable sites like eLance, which has a huge bank of online talent, offers web-based monitoring tools, and can handle hiring paperwork for you.

Check references. Many big companies’ managers may be reluctant to talk about a former employee because of legal restraints. Applegate’s workaround: Ask a potential employee for a reference from a colleague or vendor, or a consultant with whom they’ve worked, who should be able to speak freely. “You need to speak to live people,” she says. “You have to set a high bar. Even if they’re working remotely, they still represent your company.”

Put your expectations in writing. Location may be increasingly irrelevant, but you can still set your rules down on paper. “You’ve got to be able to give a little on things like lunch breaks or quick errands, but when it comes to telework, things have to be laid out from the beginning,” Zbar says. Best practices include having everyone check in first thing in the morning, be available on Instant Messaging, and formally sign off at night. Some small business owners set a weekly or even daily conference call. Applegate’s recommendation: Write very detailed memos, which spell out exactly what you want accomplished, and by when.

Start with the short term. Try a few test projects, or go on a weekly or monthly basis to get a sense of how an employee works. Watch their habits, responsiveness, and communication skills, along with participation on conference calls, and get feedback from clients.

Pay attention to the clock. Just because you’re working all hours doesn’t mean everyone else should. Collaborate with your employees to set a schedule that makes sense for your needs and your customers’ needs. “I’m 24/7, but it’s my company,” says Applegate. “Being in a virtual office doesn’t mean employees have to work 24 hours a day.” She says she leaves messages or emails at all hours for her employees, but it’s just the nature of relaying information—not a demand for them to keep up with her.

Be honest about the arrangement. If it’s not working, it could simply be that working from home isn’t meant for some people. “Right or wrong, chemistry is an issue,” says Zbar. “If it’s not working, you have to act on that.” And some managers may not be suited to handle employees at a distance. Having people working out of sight demands a certain amount of trust, and, Zbar adds, “an understanding manager who knows that expectations can be met even if there are issues that pop up for working parents.”

Find a balance. Newmark says she relies on her managers and the training she’s given them to give her some flexibility for other important tasks, such as maintaining the back office, dealing with customers on the phone, organizing work appointments, growing the business, and managing her kids’ busy schedules. She trained as a lawyer and says she left the long hours in the office for a more family-friendly opportunity.

“Every business has its positives and negatives,” says Newmark says, who finds time at all hours to work around her kids’ busy schedules. “The alternative isn’t any easier, but this is the best idea for me., It is all manageable. No matter where you are.”

All in the Family: Five Tips on Mixing Business with Relatives

All in the Family Five Tips on Mixing Business with RelativesAll in the Family Five Tips on Mixing Business with Relative by Jen Hickey.

How do you run a business with family? When starting a business, hiring your wife, siblings and/or children is usually the most affordable and reliable option. However, as a business grows, and more family members are brought on board, problems often arise. How those conflicts are dealt with will determine whether your business will survive to the next generation or fail in this one.

According to the Family Firm Institute, 70 percent of all family-owned businesses will not survive into the second generation. That percentage drops to less than half for the third, with only 3 percent making it to the fourth generation and beyond. Despite the grim statistics, there are steps you can take to ensure the viability of your business in this lifetime and the next.

All in the Family Five Tips on Mixing Business with Relative, When at work, think business first.

1) Run it like a Business – Keep emotions out of business decisions. Formalize structures with business plans, procedures, and policies.

2) Avoid Nepotism – Hiring and promotion should be based on skills and performance and not on family ties.

3) Learn to Listen – Chains of command should be clear and communication between management and family and non family opens.

4) Plan the Future – create a clear plan for growth and an orderly succession plan well before founder’s retirement.

5) Open the Circle – Go outside of the family for legal and financial advise and/or to help settle the family disputes.

While it may be a family business, it’s still a business and should be run as such. “Families tend to have unspoken assumptions coming into a family business,” explains Jane B. Zalman, principal of Zalman Family Solutions, a New York-based consulting firm dedicated to resolving disputes within family businesses. “Expectations are not made clear when it comes to what a job is, what’s expected, payscale, etc. There needs to be some formality to your business.”

Laying the ground rules is a critical first step. And it’s important to put them in writing. Drafting a mission statement, establishing an organizational structure, creating job descriptions, formalizing compensation, writing an employee handbook, as well as conducting annual performance reviews: These steps will help ensure your employees know what’s expected of them, how they’re measuring up, and ways they can improve their performance—no matter what their relationship to you, the owner.
Treat all employees fairly—no favorites, no grudges

Having a defined structure and set of procedures creates an environment of fair play, as all employees—family or not—will know the rules and the consequences for not following them. Also, there is less perception of favoritism if criteria for hiring and promotions are performance based. Widen the circle of trust by hiring a manager or key executive from the outside the family. But as Zalman points out, “you need to be explicit about career path limits when hiring nonfamily members.”

“Family tends to have an inward focus,” says Zalman. “But business needs to focus outward.” A business preoccupied with internal strife often fails to recognize changes in the economic environment or encroaching competition.
Put family drama aside and listen

Management style is also a determining factor in the success or failure of any business. Ruling with an iron fist breeds resentment among family members and leads to high turnover, particular among non-family employees not wanting to get caught up in family feuds. A better technique is to listen.

“When other people feel you’re interested in them, it creates a reflex in them to want to listen to you,” explains Dr. Mark Goulston, psychiatrist, consultant, business coach, and author of “Just Listen.” “If you’re perceived as controlling, one of the best things you can say is that ‘I need your help.’ This will disarm them rather than making them defensive. You will get more motivational follow-through making a request versus a demand. ”

Learning to listen will also help you communicate more clearly and decisively to your employees. “What can seem clear and second nature to the founder, can be confusing to others,” says Dr. Goulston. “Without clarity of expectations of results, people tend to often work hard doing the wrong things. You need to be clear and specific and ask employees what they understand about what you’re asking of them and why it’s important.”

As long as members can put ego aside for the greater good, then a family business can thrive. Family businesses tend to be more forward looking in their investments and less laden with debt than their nonfamily counterparts. There are also tax benefits to hiring certain family members. “People inside a business often have a better understanding of the business than outsiders,” Goulston notes. “There are many parts of a business that can’t be put into words or metrics, but are critical to its success.”
New generation, new horizons

One example of a well-run family business is Frank Pepe Pizzeria Napoletana, established in 1925 on Wooster Street in New Haven, Connecticut by Frank Pepe, an Italian immigrant who used his skills as a baker to create a business that provided for his immediate and extended family.

In the late 1970s, Frank’s daughters Elizabeth and Serafina, purchased the original bakery and re-opened Frank Pepe’s the Spot as an annex to the main building In the 1990s, they passed the business to their children (ownership was split evenly among the eight grandchildren).

About eight years ago, the grandchildren, now all in their 40s and 50s, decided they wanted to expand the scope of their grandfather’s legacy. “It was not an easy decision,” says third-generation owner Jennifer Kelly. “There were a lot of unknowns.” To do it, they established an LLC-structured development company thanks to the help of a frequent customer and local businessman. Since then, they’ve opened five different locations, including one at Mohegan Sun Casino in southeastern Connecticut.

“The team at the development company helped us bring my grandfather’s vision to a whole new set of customers,” notes Kelly. Each restaurant contains replicas of the menu as well as the coal-fired ovens at the Wooster Street locations and the recipes have not changed. The new locations are also within driving distance in case problems arise.

“Certain family members can dig in their heels, and others see different ways of doing things, but we always listen to each other and treat one another with respect,” Kelly points out. “You have to learn to overcome ego or your business will die.” In a family business, there will always be disagreements. The key is not to let family dynamics get in the way of running the business. All in the Family Five Tips on Mixing Business with Relative.

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