HIGHRISE CONTACTS, NOTES, CATEGORIES, TASKS, DEALS AND TAGS

The Fremont Group is recommending the use of Highrise as a preferred CRM program. It is the program that we use in our offices. This memo is intended to help you install, run and get the maximum benefit from the small investment.  To try Highrise for free click on the icon on the right sidebar.

Part one–Introduction

What is Highrise?

  • Highrise is Customer Relations Management (CRM) software. For those of you stuck in 1999, CRM software is used to coordinate your sales effort. Every sales lead is entered into the system and every time a sales lead is “touched” (any contact with them) the information is entered in the program. Therefore you develop a running log of all contacts that you company has had with every sales lead. This information is then readily available to anyone you choose to allow to see it—or not.
    • The benefit of having this information should be obvious. A phone call comes in from a sales lead and anyone who answers the phone can immediately know what has been said to the person and the status of the lead.
    • A second benefit is the concentration of all information about all of your sales leads in the same place. You only have to go to one place to find out email addresses (and send emails), phone numbers, addresses, maps, and all documents that you have associated with that person.
    • Lastly—what no one wants to think about—you have a significant CYA document. A record of everything done with a lead.
  • The second major function of the software is to significantly improve communications within your company. Beyond the obvious sales applications, the software allows you to create a “flow of events.” Every time a note is entered into the system a follow up task is entered with it. Then someone becomes responsible for following up to everything and there is a written record of the follow up to eliminate disputes.
    • The benefit of this is to eliminate the “cracks” where sales were lost simply because no one followed something up.
    • Secondly it saves significant time looking for things—everything gets posted on the software.

Why Highrise?

  • Highrise is “Cloud-Based.” This means that the program itself is never put on your own hardware—it is stored by the company on their server.
    • The first benefit of a cloud-based program is no one can screw up the program! It is impossible for someone to corrupt the program.
    • The second benefit is you never have to pay for up-dates. The program gets automatically up-dated from time to time without cost or time on your part.
    • The third benefit is that it can be accessed anywhere you can get on the internet. You can work from home, you can work odd hours, employees can check it on the way in, you can get it on your I Phone—anywhere you can get on the internet.
  • Price. Some companies spend nearly $100,000 on software that is only 10% better than Highrise and Quickbooks. And this doesn’t count up-dates, training and maintenance. You will probably spend less than $50 per month on Highrise. The downside is that you do have to pay the bill every month on your credit card or you lose your system.
  • Simplicity. If Playschool had built a CRM program it would look a lot like Highrise. You will have diverse levels of employee sophistication on the computer—trust me—anyone can run this.

How do I try it?

Go to our web site—www.tfginfo.org. On the right sidebar is an “ad” for Highrise. If you sign up there you will get a free month. If you don’t like it, don’t pay after the first month and you will not be billed.

Do I need training?

It helps. The Fremont Group will help you but first listen to the tutorial pages, read this memo, and have someone with some CRM (or at least basic computer skills) start playing with it. Remember you can’t hurt it. The issues in this memo will help you in setting it up.

Part two—Getting started

First listen to all the tutorials. They go a little fast so listen to them a couple of times. You need to get to know the “vocabulary” of the program. They are defined below but make sure that you know what the Dashboard, a Contact, a Note, a Task, a Category, a Deal and a Tag are.

Decide who should have access. There are some limits to be aware of. There is a significant price jump ($50/month) for having over 15 users. Start slow. The person who originally signs in and put s up their credit card becomes the “account owner.” The account owner and anyone you designate as an administrator have the power to modify the program—and invite or delete users. You should have at least one other administrator just in case.

When you invite a user, an email goes out to them. They get the instruction regarding how to sign in and how to create their own password. You will not need their password—but they will. Make sure they have saved their sign in and their password.

Make everyone up load a picture of themselves. It personalizes the system. You are the owner. As the owner you have some abilities that others do not. Go to “My Info” on the top right. On this page you will be able to receive alerts (as others can) but you also have the ability to Export data—this exports all of the data in the system to a zip file for backup. (Assume it will never happen but this is a good idea if you are about to be cut off for non-payment and it is simply good form to do so once in a while.) On that page is also information regarding dropboxes. This is for sending emails remotely back to the system. If you really are good you will understand and do this; if you aren’t don’t worry about it.

You can delete a user very quickly and easily. If a person leaves the company you can cut off their access immediately by editing the “Users” page. In addition, you should create “Groups.” A Group is simply a group of users that have something in common. The Board of Driectors, the Sales People, the Operations People, or whatever is appropriate in your company. This simplifies the control of access or sending of emails.

Then go to Settings. There you can play with it—you can always change it. Pull up your logo; enter your USP after your company name, choose your color scheme—customize it to suit yourself.

****hint. It might be useful for people not to use their regular email accounts for work. It can be fine but some people (myself included) have separate email accounts for work, for personal, and for sort-of-junk. Ask people what email account they want to use. If you are providing them from work use that, or, what we do, is set up a gmail account for each person as their “work” email.

Part three—terms

There are a number of terms that you must understand.

(Note—there is an introductory page that you can eliminate once you don’t need it. It will not be discussed here.)

DASHBOARD

The Dashboard is simply a running log of all entries made in the system.

CONTACTS

Your Contacts are all the persons and companies that you have as leads or with whom you do business. In other words—everyone.

Importing. You can import lists of people into the program including your customer lists from Quickbooks. Our clients who have done so were able to do it but it was not easy. You must export from Quickbooks to a spreadsheet, properly edit the spreadsheet and then import it to Highrise. Lists on Excel spreadsheets are relatively easy to import.

****BE AWARE that separate Contacts get set up for the company and for a person. This can cause problems if you don’t have a policy about where you will enter your data. We choose to enter all data under the person’s name rather than the company name. Remember if data is later entered under the company Contact, it will not be visible to persons who call up the Contact under the person’s name.

Contacts can be entered manually or imported. To enter a contact manually go to Contacts and on the right side of the screen click “Add a New Person.” You can also “Add a New Company” but in general we don’t recommend that you do that. We keep all of our records under the “Person.” (If you do otherwise and like it, let me know!) When you click Add a New Person a screen comes up where you enter the person’s information. More can be added later and it can be edited. You can also choose who can, or cannot, view this contact. A person without permission to view the contact will also not be able (or even aware) of the Notes and later entries relating this Contact.

On the right side of your screen when you pull up a Contact you will find a place to “Stay up to date on this person.” Just below that if you click “Turn on email up dates” you will receive an email every time anything is entered on this Contact. This can be helpful when you are waiting for someone to call or enter some record on a high-priority person. Be careful though—you can end up with a lot of emails.

Your Contacts can also be searched in a number of different manners. We will discuss Tags later but first go to your Contact page. You can find someone by typing their name in the box. This will search your Contacts for matches. You can also search for Contacts by City, State, Zip, Phone, Email, and Background by clicking on that search just below the box. Lastly you can also use “Show” and the drop box next to it to see a number of other possible searches.

*****You must establish a company rule. EVERY TIME THERE IS A TOUCH WITH A PERSON YOU MUST IMMEDIATELY ADD THEM TO THE DATA BASE AS A CONTACT. AS MUCH INFORMATION AS POSSIBLE MUST BE PUT IN THE CONTACT AND IT MUST BE KEPT UP TO DATE.

NOTES

Notes are the entry you make any time a Contact is “touched.” A phone call—no answer—enter it. A phone call—what did you talk about? Enter it. A note must be entered EVERY time a Contact is touched and probably every time anyone even thinks about the Contact. It is through these notes that you have the strength of the system.

Regarding notes. You enter you text in the box but just entering the text doesn’t finish your task. If all you want to do is record the note then to finish you must click the “Add this Note” box just below the text that you entered. More likely (especially once you get going) you will want to do more so therefore, after you enter your text in the box, click on “Show Options (files, cases, deals and permissions).” This opens up another entire list of options.

  • You can attach the note to a Case or a Deal. (This is discussed below.)
  • You can determine who you want to be able to see the note. If you do nothing everyone will see it. However there may be times when you want to select the people who are able to see the note.
  • You can change the date of the entry. Although it is bad form, you might be entering the notes of an out-of-office sales call you made at the end of the day before the next morning. This box will put whatever date you want on your note.
  • And lastly, you can choose to email the Note to selected persons or everyone. You do that by checking the appropriate boxes. Highrise then automatically sends the emails.

One other neat feature is in the sidebar of each contact. There you will see the contact information for your Contact including their email address. You should establish a company policy that all emails sent out are sent out by clicking on the email address shown in their Contact record. This will send out the email for you AND it will also post the email as a Note for all to see. Attachments included—which can be then opened by anyone with access to the Note.

Every time a Note is entered, a Task must also be entered.

 

Notes are simple. Just do it. Make sure that you click “Add the Note” so that it is actually recorded.

TASKS

The cornerstone of the Highrise software is the use of tasks. Every time that there is a touch with a Contact a Note is entered. Unless the lead is being closed, you also must assign a Task. A Task is the next thing that is supposed to be done to follow up on the Note. The consistent setting of Tasks changes your entire company. Things are now done and follow up becomes automatic. Each person starts their day by signing in to Highrise and checking their Tasks for the day.

Tasks fall into three categories: Tasks related to Notes, Tasks related to Cases; and Tasks not related to either Notes or Cases.

Tasks related to Notes:

After you add the text in the Note the box will, in yellow, ask you to add a Task to that Note. Click that box to add a Task associated with that Note. The Task fields then come up.

  1. The top line is a Heading Box. This can be used as much or as little as your company chooses. Keep the Headings short. When the Task comes up on the appropriate user’s daily tasks, this heading is shown first, followed by the category, the Contact and then the time.
  2. When is it due? When should the person see this Task? From the drop down box you can choose Today, Tomorrow, or a specific date and time. Or you can choose This Week, Next Week or Later. This Week means it will show up each day in the current week, Next Week it will show up each day next week and Later will simply post it at the bottom of that person’s To Do list indefinitely.
  3. Who is responsible? Choose the name of the person who is supposed to act—the person who will see the task. Unfortunately you cannot choose multiple people. If more than one person should receive the Task you have to enter the Task multiple times. You can (and often will) set Tasks for yourself. It simply is proper form to have a Task set with every Note and if the Task is for you, so be it.
  4. CHECK THE BOX TO LET EVERYONE SEE THE TASK!!! If you don’t check this box no one else will see the Task. Your company will undoubtedly create some controls to make sure the Tasks are entered and if this box is not checks that person will assume that no Task was set. There could be a time when you want to keep it private but that is very much the exception rather than the rule.
  5. Choose a Category. Default Categories are established for you. See Categories discussion below.
  6. THEN BE SURE TO CLIENT “ADD THIS TASK.” It is amazing how often new users fail to click this box and never actually add the Task that they create.

When every Note has a Task, follow up happens.

Tasks related to Cases:

Some of this discussion will be under Cases below but suffice to say that there are times when a Task is set for something other than a Note. In most of those instances the Task should relate to a Case. For example, if you need to have the company cash flow up-dated you might assign a Task to the accountant to complete the Cash Flow and post it in a Case called Accounting.

To set a Task related to a Case you use the same procedure as above. Start your screen from the Case and add the Task from the Case instead of the Note—often times it is from a Note in a Case.

Tasks not related to Notes or Cases.

These are done just by clicking “Add a Case.” We do this as a double-check on our sales follow up. When the Task is set for the next action it is common for another Task to be set a day or so later for someone to review the file and make sure that the follow-up plan is being completed.

Completing your Tasks

Each day each user starts their day by signing in to Highrise and checking their Tasks. As they complete the Tasks they:

  1. Add a Note as to the action that they have taken.
  2. Check off the box next to the completed Task. A line will go through the Task indicating that you have completed it. Do not use the trash can—then the task disappears rather than showing as completed.
  3. Add the next Task for the follow up—even if it is for yourself.

CATEGORIES

Step five above in how to set a Task tells you to choose a Category. Categories can create a visual reminder to the person who receives it. When you start there are default categories established for you. You can rename them, create your own or delete them. You can also assign them different colors. When a user opens their account and goes to Tasks they see the Tasks that have been assigned to them for that day. What they see is the heading followed by the Category in the color that you have chosen. To customize them for yourself click on “edit categories” and play with it. You can always change them later.

CASES

Cases are for actions that do not relate to individual clients. At The Fremont Group we currently have Cases for Board of Directors, Full Company Announcements, for each different category of employee, for our Alternative Marketing Plan, Office Expenses, Travel, and a few others. Each Case is customized to only allow access to the persons that you choose—others do not even know that the Case exists.

The use of Cases grows over time. We have our Marketing Associates post their daily reports in the MA Case; Board notes and announcements are on the Board of Directors Case, etc.

There are times when a Note that is entered on a Contact should also be posted in a Case—this is an option when you are entering the Note.

TAGS

Tags are the main method of sorting your Contacts. You create your Tag names. A Contact can be given as many or as few Tags as you choose and they can be changed at any time.

An example of how we use Tags is in our Outside Sales. The inside people call and set appointments for the OS each morning. As they get an appointment the Tag the Contact with the date (year/month/day) and the initials of the OS. When the OS picks up their sales leads for the day they go to Tags and mark the multiple tags of their initials and the date. A list then comes up for that day’s leads which they then download into an Excel spreadsheet. After they run the lead the classify it ABC or D and put the location Tag on it. Now it is possible to call up (and download if desired) lists of the A leads by a certain sales person—or any other combination. (Of course they also enter their Notes and Tasks).

Tag use is an extremely useful aspect of Highrise. Although its use is different in every type of business, the ability to sort out your leads and then be able to export that list has many applications.

DEALS

The use of Deals has to be controlled. It is nice that you can post a pending deal, won deal and lost deal and Deals will show each and total them for you but if you aren’t careful, Notes posted under deals will not show under the Contact and vice-versa unless you click the instruction to attach it to the Deal.

The Fremont Group uses Deals for our accounting and to track the results of all persons with whom we have had a physical touch. You will develop your own use.

The problem with Deals seems to be that you can’t delete them without losing the Notes to them. Honestly this is something that we are still learning.

Summary of Company Rules

  1. All entries are made under the person not under the company (unless you choose otherwise).
  2. Every person, vendor or client that comes in contact with the company needs to have a record created under Contacts and it must be done immediately.
  3. Every time a Contact is touched a Note must be entered.
  4. Every time a Note is entered a Task must be created—sometimes more than one.
  5. All emails to Contacts must be sent out through Highrise.
  6. Tags must be used according to company policy.

Example of Highrise Use in a Screen Printing Company

  • All Sales Leads are entered into Contacts. They are Tagged by Sales Person.
  • Notes are entered every time a Contact is touched and a Task is entered for the next action.
  • All estimates and sales sheets are scanned and posted to the Contact—anyone who takes a call can see everything that has gone to a potential customer.
  • The sales form is posted on the Note and Task is set for the sales manager to price the order. The sales person has turned on his email up-dates on the Contact so as soon as the pricing is entered he receives an email.
  • Sale is made. Deal is opened. Owner turns on email up-dates. Sales form is posted and Task is set for Accounting, Art and Purchasing.
  • Accounting contacts customer to verify information required for the account.
  • Purchasing notifies customer by email through Highrise when delivery of product is expected and again when it is received.
  • Art posts the work and communicates by email through Highrise with Customer for Art approval. When Art approval is received it is posted on the site and Task is set for Production.
  • Production schedules the run and emails the customer with run date. Task is set for Accounting to create the invoice.
  • Accounting emails the invoice to customer through Quickbooks.

When production is completed customer is emailed that it is available for

TEN RULES FOR EFFECTIVE MEETINGS

Communications are vital in an organization. Everyone loves communications and everyone hates meetings. The implementation of the following ten rules will make your meetings more effective and more productive.

  1. Every meeting must have a Chairperson who is responsible for the meeting. There can only be one Chairperson. The Chairperson has specific duties and will be held responsible for those duties. Their most important functions are to keep the meeting moving, stay with the agenda and to start and finish on time.
  1. Every meeting MUST have a written Agenda. The Chairperson must prepare the Agenda twenty-four (24) hours prior to the meeting. If the Chairperson is not the owner, the Agenda must be submitted to the owner for their approval PRIOR to its distribution. The Agenda must list
    1. Who is to attend
    2. The start time
    3. The end time (it can end sooner, it cannot end later) and
    4. The bullet points of what is to be discussed
  1. There MUST be a written statement of purpose for the meeting. In 25 words or less the Chairperson must write out the purpose of the meeting. This is the focus statement. For standing meetings the purpose is probably only written once and is reused for each meeting. This statement is read by the Chairperson to start the meeting.
  1. From its purpose statement, each meeting can be classified into one of three types: (1) Long-range communications, (2) intermediate-range communications, or (3) short-term communications. It is best if all agenda points are kept to the same classification. Mixing them is difficult.
    1. Long-range communications are agenda items that, as a rule of thumb, will have their impact in more than three months.
    2. Intermediate-range communications are agenda items that will have their impact one week to three months from now.
    3. Short-term communications are those that will have an impact in less than one week—possibly even the same day. SHORT-TERM COMMUNICATIONS SHOULD BE REMOVED FROM AGENDAS AND HANDLED IN HUDDLES, NOT MEETINGS.
  1. Use Huddles. For all short-term communications a huddle should be used instead of a meeting. A huddle is a “mini-meeting.” It is scheduled just like any other “meeting.” It must start on-time and it must end on-time, however it can be scheduled for no more than FIVE MINUTES. That is the maximum. Everyone MUST get up to leave at the ending time. It is not used for discussion, it is used for short-term communications—What are you doing today? Anyone need help with anything today? That type of communications. There must be a penalty for not being on-time or not attending. (For example, you must bring doughnuts to the next huddle.) No agenda, minutes or other formalities are used.
  1. The Meeting must START ON TIME with the Chairperson reading the purpose statement. The Chairperson then designates one person to record the “minutes” of the meeting. The Chairperson must be taught how to handle people who come in late. Usually the greeting of, “Suzy you are late, you can catch up on what you have missed after the meeting with me” politely and non-confrontationally gets the point across. For chronic tardies, some remedial action must be taken. “If you are on-time, you are late; if you are five minutes early, you are on-time.” (One effective technique is never to schedule a meeting to start on the hour—schedule the meeting for 9:58 instead of 10:00 and then start the meeting at 9:58—they will catch on and see that you are serious about time.)
  1. The Minutes of the meeting include the following:
    1. The date and exact time that the purpose statement was read
    2. Who was in attendance at the start, who came in late, and who left early without commentary or judgment

c. Notes are taken on a copy of the Agenda and are summarized into summary paragraph at the end of the meeting

    1. Time and date of the next meeting, if any.
  1. Use Action Pads. A piece of company stationary is taken to the printer and one-copy, three-hole punched pads are made. These pads are used as follows:
    1. The purpose statement is put at the top of a page and the Agenda is placed below it. This same page is then used for notes and the summary statement at the bottom. The minutes are also kept on this page. At the end of the meeting the copy is sent to the owner, the original is put in a meeting binder.
    2. Each action point is written out. The Chairperson cannot move to the next agenda item until an action point is written out. That action point describes:

i. The required action

ii. Who is responsible for it, and

iii. The date and time that it will be completed.

    1. The original of the Action Point is placed in the meeting binder, the copy is given to the person responsible for carrying it out.
    2. The person responsible for carrying it out writes out what was done on the bottom of that same page and returns it to the chairperson at the appropriate time.
  1. Use a Meeting Binder. For standing meetings a hard-covered, three-ring binder is used; for all others either a soft-covered binder is used or they can be consolidated into a master three-ring binder. This binder includes the Agenda, minutes, summary statements, and action points of each meeting in chronological order. The binder is in the Chairpersons possession during the meeting and kept in an agreed upon location.
  1. Have fun. The Chairperson should make the meetings move quickly and be fun. A trivia question about the company at the end of the meeting with some little prize, or have food available can be helpful.

Meetings over 15 minutes are therapy sessions—don’t do it

Communications are vital in any business. Employees often complain about communications without really even knowing what they mean. There are numerous ways that a company communicates with its people—written memos, meetings, e-mails, informal meetings, phone calls and messages—but what is important first is what is communicated, not how.

An employee needs to have information sufficient for them to do their job. In order to do their job they must have a basic understanding of the company’s direction, the company’s structure, what is expected of them and whether or not their performance is producing what is expected. Ideally they will also know what they can do to increase their compensation and the measures of those results.

Meetings can be lengthy and costly. The hourly cost of a meeting of key personnel can run into the thousands of dollars and therefore the methods of communicating must be examined. Meetings are still required, but effective meetings that communicate in a minimum amount of time are essential. People have to meet face-to-face on some sort of a regular basis. An owner who holds “informal meetings” with each of his people individually each day runs the risk of people suspecting that he is saying one thing to some people and another thing to them. Such a policy breeds distrust.

A football team will have a game plan, practice the game plan all week but during the game before every play they still have a huddle. Companies are the same. There needs to be a communication of the vision or game plan. There needs to be weekly focus in management meetings regarding the current part of the game plan and every day there needs to be a huddle. Five-minute huddles should take place in management and in each department. They are mandatory with no tolerance for non-attendance and no tolerance for them lasting more than five-minutes.

Your company is reflected in your meetings

So often you can find out everything you need to know about a company by attending one of their internal meetings held by the owner.  Is there a sense of urgency?  Is the meeting organized?  Does it start and end on time?  Are employees attentive?  Does the owner “sell” the employees?  The answers are always reflective of the way the company is run and the way your customers/clients perceive your company.  Change can begin with changing the tone of your meetings.  As a sage professional once said, “a meeting over 15 minutes long is a therapy session and you don’t have a license for that.”

WHY YOUR COMPANY IS OUT OF ALIGNMENT AND WHAT TO DO ABOUT IT

Focus is the alignment of the value center of ownership with the company’s management, employees, vendors and customers.

The owner just can’t figure out why his employees lack “common sense.” Management is excited—they have created a process of measuring and monitoring an activity yet even after it is implemented, the bottom line of the company drops. Employees are frustrated because they have to face customers who have been treated poorly. These all can be symptoms of a disease we at The Fremont Group call “alignment disorder.”

When your tires are out of alignment it costs you money and endangers your life. Your tires wear unevenly and have to be replaced prematurely. Your control of the car while breaking is compromised putting you and your family in danger. Worst of all, when you really accelerate your steering wheel shakes and you con lose control causing a major accident. The same thing happens when the interests of your employees are not aligned with the interests of the company. When it is in an employee’s best personal interest to take an action that is not in the best interests of the company you have an alignment disorder.

Alignment disorder is when an employee can make more money by working slower and accumulating overtime pay rather than getting the job done efficiently or when it is more important not being blamed for a problem than fixing it. A sales person lying to a customer to get a sale; employees leaving at 5:00 with a project a half-hour from finishing; or the raise given to the one who complains the loudest are all examples of alignment disorder. Bringing a company into alignment first requires that you clearly identify what the company is trying to accomplish. Alignment disorder is often a symptom of an owner who has not clearly communicated to his or her employees what is really important—or a company that says one thing but practices another. Of course once this mission is clearly stated and communicated, systems, procedures and controls must also be introduced which incentify the positive behavior and punish behavior not in conformance with the corporate objective.

What truly is important to you and your company? Money is obvious. If we don’t make a minimum, mandatory profit any other altruistic ideals you might have cannot be achieved. Although it is possible to forget that we need to earn a profit, our work at The Fremont Group rarely encounters this omission. (Possibly because companies that ignore profit are not in business long enough to become our clients!) It is much more common for us to encounter companies that have lost their “value center.”

There is only one reason for your business to exist—to make your life better. We preach this as the “First Commandment.” The obligation of your business is to make the life of the owner better. The things that are making your life better should be identified and built upon; the things that are making your life worse should be identified and eliminated. If however you do not clearly identify your “value center” as making your life better, you will miss a significant portion of this axiom. Everyone has a value center beyond just earning the maximum profit possible. If we did not we would make all “cost-benefit” decisions resulting in acting upon anything that would save the company a nickel regardless of the human consequences. Joe would be fired after he got old or hurt because he could be replaced cheaper. Agreements would be breached if it would save money. Customers would be provided cheaper goods if we could “get away with it.” Few owners (and none of our clients) would totally agree with this approach. There is a “higher agenda” for almost all of us. The litmus test of your value center is easily determined. Take a sheet of paper, as much time as it takes and write out your epitah—how do you want you and your company to be remembered after you are gone? Profit will be included but list at least five additional values that you want you and your company to be remembered for. When you finish you have defined the value center of your company. This now must be transmitted to your organization.

The transmittal of your value center to your organization is required to create alignment and focus. When your employees clearly understand your value center and are incentified to act in accordance with it they suddenly acquire “common sense.” This transmittal is an on-going process. It starts with the hiring process, continues in specific training, is reflected in your incentive plan and most of all is observed by all in the actions of the owner. Just as the parent who tries to teach his children not to lie as they call in sick to work to go skiing, the example of the owner is more important than the rhetoric. When the value center is defined the owner must be sure that they are identifying values that they are prepared to live by themselves.

During the 1990’s many consulting firms made money by convincing businesses that they needed to write a “mission statement.” Had it been done effectively much of the company’s value center would already have been identified. As Steven Covey wrote in The Seven Habits of Successful People (and many others have paraphrased) it is important to “start at the finish.” Most mission statements are either “forward-looking” or current attempts to define the mission of the business. We have already defined that the reason that every business exists is to make the life of the owner better but what is the purpose of the business? What are the things other than money that really will make the life of the owner better by fulfilling their true objectives? This is the value center.

It was also common for companies to create mission statements by committee. Bring in your management team, have them work with a consultant for a day (or more) and come out of the room with a well-written mission statement. Put this mission statement on the wall in the lobby and go about your business. This approach is an abdication of the leadership function of the owner. The troops look to the general for leadership. They expect the general to have a plan—a clear vision of what is going to be done. Then they expect to be informed as to what their role is in this plan. They don’t want to hear the general be “wishy-washy” about the plan and ask them what they want the plan to be. The common element of all leaders is they have a plan; they clearly communicate their vision or plan to their subordinates; and they act decisively upon that plan.[1] It is therefore the leadership responsibility to clearly define the purpose of the company. This is not a group activity—this is a look into the heart of the leader. If the owner does not do so, the company can never have the focus required to be successful without relying upon luck. Time spent by an owner identifying their value center is akin to time spent planning a project—every hour spent in planning saves two on the job.

A clearly defined value center creates in an organization a new definition of “success.” Most of us are not trying to be just the company who makes the most money; most of us have some values that must be complied with in making that money. As an owner we must accept a new definition of success that complies with these values. The attainment of this newly defined success brings about real fulfillment. To be accomplished we must train our people in its meaning and we must at all times demonstrate to the organization the priority of these statements through our daily actions.

In order to transmit your values to employees you not only need to live these values but you must also train your employees in them and incentify them to act upon them. If it is in their financial interest to make a sale using methods outside of your value center you have a structural issue. If they simply don’t understand how they should prioritize competing interests you have a training issue. The mere demonstration that you are willing to invest in training employees regarding these values makes a huge impact upon the organization. It is easy to say “do what is right” but when the company “puts money where their mouth is” the impact is undeniable. That impact brings your employees into alignment with your value center. It creates a focus within the organization. It puts everyone “on the same page.” It makes you more money and it brings about a fulfillment that transcends your bank account. It makes you successful.


[1] We need look no further than the Katrina disaster in New Orleans to see an example of poor leadership. There was no plan, there was no communication of the plan and no decisive action. A strong leader would have immediately appointed a single individual to act in accordance with the values that had been instilled in them decisively pulling together all of the available assets of this country. There would have been second guessing but a strong leader accepts second guessing. Six months later instead of trying to explain and avoid blame lives and a city would have been saved.

Management Retreats

The Fremont Group recently surveyed small business owners and found the following results: only 5% of small businesses held an annual management retreat however those companies that did listed it as one of their most beneficial activities. Small business owners with fewer than 100 employees—some with only 10—found that a properly run management retreat was a critical part of their success. They also felt that it was most important in times of difficulty (i.e. recession).

What is a management retreat? It really is as simple as taking your key employees away from the office—sometimes for only the day but more likely for two days—and, with a set agenda, involving them in the planning process of the company. For the companies that do this they get ideas and buy-in from their key people that is invaluable. The Fremont Group consultants are trained in facilitating such events. They meet with you and together determine an agenda and a budget and then are the facilitator in the meetings. They also host some part of the sessions in which you are not present. Following the retreat they assist with the follow up.

What gets done? Think of it like this—we often go to individual employees and ask them, “What could be done to help them in their job? What are their goals? How do you think you could achieve those goals?” This type of questioning often brings out key information that help you run the company. At a management retreat we are doing the same thing only doing it by department instead of by individual. When tied down the department managers almost always set the bar higher than we would have ourselves. Then we develop a plan to accomplish these goals and train them to “trickle down” the actions to the individual employees in their department. This creates a focus upon significant change and upon “their” results. A second, and equally important benefit is the elimination of communication barriers. Your key people feel more informed and empowered and therefore produce more.

Who should attend? Your management team members are your “climbers.” The management retreat is one of their ladders. Invited should be (minimally) the head of sales, operations and finance. They, together with their key people, will get out of the office and come back more focused and productive then ever.

Call the office to discuss using Fremont to facilitate your annual retreat.

Delegation

Delegation is a learned technique. In order to effectively delegate a task there are a number of steps that must be taken. Stephen Covey refers to the delegation process as, “Creating Win-Win Stewardship Agreements”[1] First the task must be clearly defined—specify the desired results. It is vital that the desired results are results, not methods. Often times the task looks different in the eyes of the two parties. In order to accomplish a meeting of the minds you must define the task in terms of results. The result is what is critical and is what must be clearly defined. The definition must include measurement—how will be determine if the results have been achieved? The person must not only understand how the result is being measured, they must also understand and agree as to how the result is being measured. Once the desired result is agreed upon, the parties then agree upon how the result should be achieved—the steps that must be taken and guidelines must be set. Within those guidelines is the level of authority that the person has. There are six levels of authority—(1) wait until told; (2) ask; (3) Recommend; (4) Act and report immediately; (5) Act and report periodically; and (6) Act on own.[2] This defines the level of authority that has been delegated. These levels change as you gain or lose trust in the person.

The third, fourth and fifth steps identified by Covey are to identify the available resources (human, technical, financial, etc., define accountability (essential to the integrity of the delegation), and to determine the consequences—what happens if the result is or is not achieved both to the individual and the organization. Lastly, the parties must agree upon a feedback system. The person must be providing enough feedback to provide you with a comfort level of knowing that they are on track to achieve the result. The feedback can be formal (such as a report) or it may be informal (such as sticking his head in your office twice a day to let you know where he stands) but regardless it must be complied with. It is the feedback element that is most commonly ignored.

Effective delegation relieves the owner’s obligations and develops employees. “A leader is not appointed because he knows everything and can make every decision. He is appointed to bring together the knowledge that is available and then create the prerequisites for the work to be done. He creates the systems that enable him to delegate responsibility for day-to-day operations.”[3]


[1] First Things First, Stephen Covey, Simon & Schuster 1994. If you are to read one of Covey’s books, 7 Habits of Highly Successful People, is the book to read. In First Things First, Covey covers some of the same ground but gets much more technical in his analysis.

[2] Ibid.

[3] Moments of Truth, Jan Carlzon, HarperPerennial 1989

Management Techniques (Part II)

This is a follow-up to the Management Techniques post. We will walk through the five criteria.

1. Employees must understand what results are expected of them.

This is not as simple as it seems and it is the foundation that most business owners miss in trying to manage. Imagine a baseball manager having a meeting with his key player—but without statistics. “You’re not hitting well enough.” “Yes I am.” “You don’t get enough hits.” “I got two yesterday.” “You should have more home runs.” “I hit one last week.” “This has to change—we will meet again next week.” And how is that discussion going to go next week? This might sound like a common meeting of owner and employee. If you have ever told an employee that they are not doing a good job and they argue with you—you have violated this first principle. How different that conversation would be if you had statistics: “You’re being paid to hit .300 and you’re only hitting .200—what’s the problem?” “I got two yesterday.” “No, you aren’t listening—you are being paid to hit .300 but you’re only hitting .200, what’s the problem?” Silence. “You are being paid to hit 30 home runs a year buy you are on pace for only 10, what’s the problem?” “I hit one last week.” “You aren’t listening. Do you need different working conditions or more training? We’ll be glad to do whatever it takes, but what we really should be focusing on is your bonus—if you hit .333 you get another million dollars, I’ll be manager of the year, the team will win more games and the company will make more money. So what do we have to do to get you to .333? I know we can’t do it in one week but next week when we talk you need to be at .250 or we will have to bring in another player and pay them out of your salary—we don’t what that do we?”

So the first rule is to establish results for each position. Where do the results come from? If you add up all of the results of all of the employees you have what it takes to accomplish your financial plan for the company—your budget. You hold people accountable for the results that are required to meet your budget; you create incentives for results that exceed your budget and produce additional profit.

Conveying those results to the employee is the critical part. It is not enough to have the standards, they are worthless unless they are conveyed to the employee in a manner that they understand. This is where effective job descriptions come in. Employers who create job descriptions that are merely a list of tasks will fail. The list of tasks is the training manual. Real job descriptions communicate to the employee the results that you are paying them to produce. And they must understand that their base pay is contingent upon the production of those results.

Examine your organization in that context—does each employee understand that their pay is contingent upon the production of defined results?

2. Employees must understand how those results are measured.

You can’t manage it if you can’t measure it. In fact, you can’t manage people. People do whatever they want to do. What you can manage is results. And you can create an environment where people are not comfortable not producing their results and therefore they actually want to do what you want them to do. You will be unsuccessful if the measurement of an employee’s results are not: (1) done in a way that is simple enough for them to understand; and (2) done frequently enough for those results to become the focus of their day. In fact, the ideal system has the employees themselves calculating their results on a regular basis. This means that the employee must have enough information to be able to calculate their results.

3. Employees must know if their results have met the minimum level of expected performance.

An effective system causes employees to calculate their results and compare them to the standards established for their position and pay grade. This ties into a system of employee reviews. There is a collateral advantage to this. As an owner the most critical information that you need is the ‘bad news.” Good news is nice—but what is critical is that you know immediately if something is going wrong. If the employee knows that they are being held accountable for a result and sees that that result is not going to be achieved, they will let you know immediately so that they can negotiate a change in the required result. At this point you have a critical juncture. You can either treat the news as an excuse or a reason. The difference between an excuse and a reason is the excuse isn’t true. If an excuse is offered you must choose to either replace or retrain the employee. If a reason is offered you must change the standard and change your plan (budget) to accommodate the new reality. Your success is determined by the excuses that you are willing to accept.

4. The frequency that employees must report those results and be held accountable must be determined by their level of authority.

Many owners fail to distinguish between the levels of authority that they grant to an employee. The lowest level of authority it the authority to do nothing—watch. The next level of authority is the authority to recommend. The third level is the authority to act and report immediately. The fourth level is the authority to act and report periodically. The highest level of authority is the authority to act independently. Not recognizing this hierarchy is a laziness driven fault that dooms many employees to failure. It is tempting on the owner’s part to “just hire good people” and trust them to do good work. This is absolutely wrong. Every employee must progress through these stages before they can reach the top—and many never will. It is also a fluid scale. Employees can move up and down this scale regularly. Ideally their base compensation is also tied to their level of authority. You are setting up an employee for failure if you just “toss them in the water and see if they swim” and even worse you are inflicting the cost of turnover and failed results upon your business. If left undirected the employee chooses their own level of authority—do you really want the results of your business left to the chance choices of new employees?

5. There must be immediate feedback for unacceptable results with a meeting where the manager asks two questions—“Why did we fail? And what are we going to change tomorrow?”

Those two questions are the key to management. If an employee knows the results that they are required to produce; they know (and possibly even participate in the calculation of) the measurement of those results; they know if their results have met the established expectations for their position; and they are reporting those results on a regular basis there are only two relevant questions to ask—why did we fail and what are you going to do about it to change it tomorrow?

The implementation of these five principles is the cornerstone of an effective organizational structure.

Management Techniques

In order to effectively manage[1]

1. Employees must understand what results are expected of them;

2. Employees must understand how those results are measured;

3. Employees must know if their results have met the minimum level of expected performance;

4. The frequency that employees must report those results and be held accountable must be determined by their level of authority;

5. There must be immediate feedback for unacceptable results with a meeting where the manager asks two questions—“Why did we fail? And what are we going to change tomorrow?”

These five steps will be further analyzed in the next five posts.


[1] Effective management is getting a group of people to do something that they would not ordinarily do and enjoy doing it. (Paraphrased Douglas McArthur)

More on Meetings

TEN RULES FOR EFFECTIVE MEETINGS

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Communications are vital in an organization. Everyone loves communications and everyone hates meetings. The implementation of the following ten rules will make your meetings more effective and more productive.

  1. Every meeting must have a Chairperson who is responsible for the meeting. There can only be one Chairperson. The Chairperson has specific duties and will be held responsible for those duties. Their most important functions are to keep the meeting moving, stay with the agenda and to start and finish on time.
  2. Every meeting MUST have a written Agenda. The Chairperson must prepare the Agenda twenty-four (24) hours prior to the meeting. If the Chairperson is not the owner, the Agenda must be submitted to the owner for their approval PRIOR to its distribution. The Agenda must list
    1. Who is to attend
    2. The start time
    3. The end time (it can end sooner, it cannot end later) and
    4. The bullet points of what is to be discussed
  3. There MUST be a written statement of purpose for the meeting. In 25 words or less the Chairperson must write out the purpose of the meeting. This is the focus statement. For standing meetings the purpose is probably only written once and is reused for each meeting. This statement is read by the Chairperson to start the meeting.
  4. From its purpose statement, each meeting can be classified into one of three types: (1) Long-range communications, (2) intermediate-range communications, or (3) short-term communications. It is best if all agenda points are kept to the same classification. Mixing them is difficult.
    1. Long-range communications are agenda items that, as a rule of thumb, will have their impact in more than three months.
    2. Intermediate-range communications are agenda items that will have their impact one week to three months from now.
    3. Short-term communications are those that will have an impact in less than one week—possibly even the same day. SHORT-TERM COMMUNICATIONS SHOULD BE REMOVED FROM AGENDAS AND HANDLED IN HUDDLES, NOT MEETINGS.
  5. Use Huddles. For all short-term communications a huddle should be used instead of a meeting. A huddle is a “mini-meeting.” It is scheduled just like any other “meeting.” It must start on-time and it must end on-time, however it can be scheduled for no more than FIVE MINUTES. That is the maximum. Everyone MUST get up to leave at the ending time. It is not used for discussion, it is used for short-term communications—What are you doing today? Anyone need help with anything today? That type of communications. There must be a penalty for not being on-time or not attending. (For example, you must bring doughnuts to the next huddle.) No agenda, minutes or other formalities are used.
  6. The Meeting must START ON TIME with the Chairperson reading the purpose statement. The Chairperson then designates one person to record the “minutes” of the meeting. The Chairperson must be taught how to handle people who come in late. Usually the greeting of, “Suzy you are late, you can catch up on what you have missed after the meeting with me” politely and non-confrontationally gets the point across. For chronic tardies, some remedial action must be taken. “If you are on-time, you are late; if you are five minutes early, you are on-time.”
  7. The Minutes of the meeting include the following:
    1. The date and exact time that the purpose statement was read
    2. Who was in attendance at the start, who came in late, and who left early without commentary or judgment
    3. Notes are taken on a copy of the Agenda and are summarized into summary paragraph at the end of the meeting
    4. Time and date of the next meeting, if any.
  8. Use Action Pads. A piece of company stationary is taken to the printer and one-copy, three-hole punched pads are made. These pads are used as follows:
    1. The purpose statement is put at the top of a page and the Agenda is placed below it. This same page is then used for notes and the summary statement at the bottom. The minutes are also kept on this page. At the end of the meeting the copy is sent to the owner, the original is put in a meeting binder.
    2. Each action point is written out. The Chairperson cannot move to the next agenda item until an action point is written out. That action point describes:
      1. The required action
      2. iWho is responsible for it, and
      3. The date and time that it will be completed.
    3. The original of the Action Point is placed in the meeting binder, the copy is given to the person responsible for carrying it out.
    4. The person responsible for carrying it out writes out what was done on the bottom of that same page and returns it to the chairperson at the appropriate time.
  9. Use a Meeting Binder. For standing meetings a hard-covered, three-ring binder is used; for all others either a soft-covered binder is used or they can be consolidated into a master three-ring binder. This binder includes the Agenda, minutes, summary statements, and action points of each meeting in chronological order. The binder is in the Chairpersons possession during the meeting and kept in an agreed upon location.
  10. Have fun. The Chairperson should make the meetings move quickly and be fun. A trivia question about the company at the end of the meeting with some little prize, or have food available can be helpful.