1. Staffing and Leading a Growing Company

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Leadership
Process of influencing and inspiring others to work to achieve a common goal and then giving them the power and the freedom to achieve it.
Entrepreneurs must take on many roles in their companies, but none is more important than that of leader.
How is the leader of a company like the leader of a jazz band?
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Effective Leaders
Create a set of values and beliefs for employees and passionately pursue them.
Respect and support their employees.
Set the example for their employees.
Focus employees’ efforts on challenging goals and keep them driving toward those goals.
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Effective Leaders
(Continued)
Provide the resources employees need to achieve their goals.
Communicate with their employees.
Value the diversity of their workers.
Celebrate their workers’ successes.
Encourage risk-taking among their workers.
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Effective Leaders
(Continued)
Understand that leadership is multidimensional.
Value new ideas from employees.
Understand that success really is a team effort.
Encourage creativity among their workers.
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Effective Leaders
(Continued)
Maintain a sense of humor.
Behave with integrity at all times.
Keep their eyes on the horizon.
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7. Four Vital Tasks of a Leader
Hire the right employees and constantly improve their skills
Build an organizational culture and structure that enable the company to reach its potential
Communicate the vision and the values of the company and create an environment of trust.
Motivate workers to higher levels of performance
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8. Hiring the Right Employees
Conduct a job analysis and create practical job descriptions and job specifications.
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9. Conducting a Job Analysis
Create a job description - a written statement of the duties, responsibilities, reporting relationships, working conditions, and materials and equipment used in a job.
Create a job specification - written statement of the qualifications and characteristics needed for a job, stated in such terms as education, skills, and experience.
See sample job description from the Dictionary of Occupational Titles for a worm picker.
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Worm Picker
Gathers worms to be used as fish bait; walks about grassy areas, such as gardens, parks, and golf courses and picks up earthworms (commonly called dew worms and nightcrawlers). Sprinkles chlorinated water on lawn to cause worms to come to the surface, and locates worms by use of lantern or flashlight. Counts worms, sorts them, and packs them into containers for shipment. (# in D.O.T)
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11. Trait or Characteristic
Table Linking Tasks from a Job Description to the Traits Needed to Perform the Job.
Job Task
Trait or Characteristic
Generate and close new sales
Outgoing, persuasive, friendly
Make 15 “cold calls” per week
Self-starter, determined, optimistic,independent, confident
Analyze customers’ needs and recommend proper equipment
Good listener, patient, empathetic
Counsel customers about options and features needed
Organized, polished speaker, “other” oriented
Prepare and explain financing methods
Honest, mathematically oriented,” comfortable with numbers, understands basics of finance, computer literate
Retain existing customers
Relationship builder, customer-focused

12. Hiring the Right Employees
Conduct a job analysis and create practical job descriptions and job specifications
Plan an effective interview
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13. Planning an Effective Interview
Develop a series of core questions and ask them of every job candidate.
Ask open-ended questions rather than those calling for “yes or no” answers.
Create hypothetical situations candidates would encounter on the job and ask how they would handle them.
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14. Planning an Effective Interview
(Continued)
Probe for specific examples in the candidate’s work history that demonstrate the necessary traits and characteristics.
Ask candidates to describe a recent success and a recent failure and how they dealt with them.
Arrange a “noninterview” setting in which to observe the candidate.
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15. Trait or Characteristic
Table 19.3 Interview Questions for Candidates for a Sales Representative Position
Trait or Characteristic
Question
Outgoing, persuasive, friendly
How do you persuade reluctant prospects to buy? Can you give an example?
Good listener, patient, empathetic
What would you say to a fellow salesperson who was getting more than her share of rejections and was having difficulty getting appointments?
Honest, mathematically oriented,” comfortable with numbers, understands basics of finance, computer literate
How do you feel when someone questions the truth of what you say? Can you give an example of successfully overcoming this situation?
Other questions:
If you owned a company, why would you hire yourself?
How do you acknowledge the contributions of others in your department?

16. Hiring the Right Employees
Conduct a job analysis and create practical job descriptions and job specifications
Plan an effective interview
Conduct the interview
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17. Conducting an Effective Interview
Break the ice. Goal: To diffuse nervous tension.
Ask questions.
Remember the 25/75 Rule.
Keep it legal!
Sell the candidate on the company. Best candidates will have other job offers. Your job: to convince the best candidates that your company is a great place to work.
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The “OUCH” Test
Does the question Omit references to race, religion, color, sex, or national origin?
Does the question Unfairly screen out a particular class of people?
Can you Consistently apply the question to every applicant?
Does the question Have job-relatedness and business necessity?
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19. Conducting an Effective Interview
(Continued)
Break the ice. Goal: To diffuse nervous tension.
Ask questions.
Remember the 25/75 Rule.
Keep it legal!
Sell the candidate on the company. Best candidates will have other job offers. Your job: to convince the best candidates that your company is a great place to work.
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20. Hiring the Right Employees
Conduct a job analysis and create practical job descriptions and job specifications
Plan an effective interview
Conduct the interview
Check References
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Checking References
Checking an applicant’s references is an important part of protecting a company against making a “bad hire.”
Is it really necessary?
Yes !! Executive search firm study: More than 10% of candidates lie on their résumés.
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22. Hiring the Right Employees
Conduct a job analysis and create practical job descriptions and job specifications
Plan an effective interview
Conduct the interview
Check References
Conduct employment tests
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Employment Tests
Valid test – one that measures what it is intended to measure (e.g. aptitude for selling)
Reliable test – one that measures consistently over time.
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Company Culture
Distinctive, unwritten, informal code of conduct that governs the behavior, attitudes, relationships, and style of an organization.
“The way we do things around here.”
In small companies, culture plays as important a part in gaining a competitive edge as strategy does.
See Amy’s Ice Creams example.
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25. Characteristics of Positive Company Culture
Respect for work and life balance
Sense of purpose
Sense of fun
Diversity
Integrity
Participative management
Learning environment
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26. Team-Based Management
Self-directed work team – a group of workers from different functional areas of a company who work together as a unit largely without supervision, making decisions and performing tasks that once belonged only to managers.
In this setting, the nature of managers’ work changes dramatically.
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27. Common Errors with Teams
Assigning teams inappropriate tasks
Failing to provide meaningful performance targets
Sabotaging teams with underperformers
Failing to compensate team members equitably
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28. What Makes Teams Succeed?
Make sure that teams are appropriate for the company and the nature of the work.
Form teams around the natural work flow and give them specific tasks to accomplish.
Provide adequate support and training for team members and leaders.
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29. What Makes Teams Succeed?
(Continued)
Involve team members in how their performances will be measured, what will be measured, and when it will be measured.
Make at least part of team members’ pay dependent on team performance.
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30. Stages of Team Development

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Communication
Managers spend about 80 percent of their time in some form of communication:
30% talking
25% listening
15% reading
10% writing
Many problems in the workplace arise because of poor communication.
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32. Communicating Effectively
Clarify your message before communicating it.
Use face-to-face communication whenever possible.
Be empathetic.
Match your message to your audience.
Be organized.
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33. Communicating Effectively
Encourage feedback.
Tell the truth.
Don’t be afraid to tell employees about the business, its performance, and the forces that affect it.
Be a good listener.
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34. The Challenge of Motivating Workers
Empowerment
Job design
Rewards and compensation
Feedback
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Empowerment
Involves giving workers at every level of the organization the power, the freedom, and the responsibility to control their own work, to make decisions, and to take action to meet the company’s objectives.
Requires a different style of management from that of the traditional manager.
Is built on sharing information, authority, and power.
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36. Empowerment Works Best When an Entrepreneur . . .
Is confident enough to give workers all of the authority and responsibility they can handle.
Plays the role of coach and facilitator, not the role of meddlesome boss.
Recognizes that empowered employees will make mistakes.
Hires people who can blossom in an empowered environment.
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37. Empowerment Works Best When an Entrepreneur . . .
(Continued)
Trains workers to continuously upgrade their skills.
Trusts workers to do their jobs.
Listens to workers when they have ideas, solutions, or suggestions.
Recognizes workers’ contributions.
Shares information with workers, perhaps using open-book management.
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Open-Book Management
Employees:
See and learn to understand a company’s financial statements and its critical numbers.
Learn that a significant part of their jobs is moving those critical numbers in the right direction.
Have a direct stake in the company’s success through profit sharing, ESOPs, or performance-based bonuses.
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Job Design Strategies
Job simplification - breaks work down into its simplest form and standardizes each task.
Job enlargement (horizontal job loading) - adds more tasks to a job to broaden its scope.
Job rotation - cross-trains workers so they can move from one job in a company to others, giving them a greater number and variety of tasks to perform. Often used with a skill-based pay system.
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Job Design Strategies
(Continued)
Job enrichment (vertical job loading) - builds motivators into a job by increasing the planning, decision making, organizing and controlling functions (which traditionally were managerial tasks).
Five core characteristics:
Skill variety
Task identity
Task significance
Autonomy
Feedback
Enriched
Job
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Job Design Strategies
(Continued)
Flextime - an arrangement under which employees build their work schedules around a set of “core hours” - such as 11 a.m.. to 2 p.m. - but have flexibility about when they start and stop work.
Job sharing - a work arrangement in which two or more people share a single full-time job.
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Job Design Strategies
(Continued)
Flexplace - a work arrangement in which employees work at a place other than the traditional office, such as a satellite branch closer to their homes or, in some cases, at home.
Telecommuting - an arrangement in which employees have employees working from their homes use modern communications equipment to hook up to their workplaces.
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44. Rewards and Compensation
The key to using rewards to motivate workers is tailoring them to the needs and characteristics of individual workers.
Money is an effective motivator - up to a point.
Pay-for-performance systems
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Pay-for-Performance
Employees’ incentive pay must be clearly and closely linked to their performances.
Employees must be able to see the connection between what they do every day on the job and the rewards they receive.
The system must be simple enough so that employees understand and trust it.
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Pay-for-Performance
Employees must believe the system is fair.
The system should be inclusive, rewarding all employees, no matter what their jobs might be.
The system should make frequent payouts to employees.
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47. Rewards and Compensation
Intangible rewards such as praise, recognition, celebrations, and others can be very powerful, yet inexpensive, motivators.
How do generational differences influence the types of rewards to which employees respond?
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48. The Feedback Loop Deciding What to Measure Taking Action How to
Comparing
Actual Performance
Against
Standards
Deciding
What to
Measure
How to
Taking
Action
to Improve
Performance
Actual

49. Guidelines for Successful Performance Appraisals
Link the employee’s performance to the job description.
Establish meaningful, job-related, observable, measurable, and fair performance criteria.
Prepare for the appraisal by outlining the key points you want to cover with the employee.
Invite the employee to provide an evaluation of his own job performance based on the criteria.
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50. Guidelines for Successful Performance Appraisals
(Continued)
Be specific.
Keep a record of employees’ critical incidents - both positive and negative.
Discuss the employee’s strengths and weaknesses.
Incorporate employees’ goals into the appraisal.
Keep the evaluation constructive.
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51. Guidelines for Successful Performance Appraisals
(Continued)
Praise good work.
Focus on behaviors, actions, and results.
Avoid surprises (for both the employee or the business owner).
Plan for the future.
Smart business owners spend about 20% of a performance appraisal discussing past performance and 80% developing goals, objectives, and a plan for improving performance in the future.
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