Business Coach | Merit Based Pay
This business coach post is about merit based pay.
If you are going to systematically grow and systematically keep your best people, you are going to have to implement a business coach system of merit based pay. You have to reward the best job performances with the best pay. If Trevor, Kevin, Suzanne, Gus, Larry, Uncle Lewis, Clark, George, Kramer & Raymond all go out to work for you this week, two people are going to do an incredible job, seven people will do what they are supposed to do only, and 1 person will do an awful job. Let’s meet your team:
George & Kramer (Your “A Players”) – These people will actually show up early and stay late. They will do their job, and then they will submit a report on how to make the company better and how to better wow your clients, all without additional compensation. These people show up to work dressing better than the dress-code minimum standards because of personal pride. These 2 people seem to have a glimmer in their eyes as if they know that this job is just one more step on their road to greatness. These people speak positively and think positively. They are future and solution focused. You need these people and you need to give them a bonus and they need to make 20% more than everyone else so that others can know how much you value their decisions to consistently “go the extra mile.”
Trevor, Kevin, Suzanne, Gus, Larry, Clark & Raymond (Your “B Players”) – These 7 people just do their jobs as described in your operations manual. These people show up at 8:59 AM and they work right up until their lunch break. They would never work through lunch to get something done like George & Kramer, but they do get back to work faithfully when the assigned lunch break is over. These guys and gals don’t ever really cause problems. Occasionally, Trevor gets motivated to achieve, but it usually only lasts for the 2 days immediately following his attendance of a motivational conference. Occasionally these guys show their frustration for Uncle Lewis not doing his job or management hinting about how they should try to work harder. They sometimes say, “That’s not my job.” and “I’m not getting paid to do that.” These people are dependable, honest, and they make up the majority of your workforce. You need these people. You need to give these guys an annual bonus for their dependability and loyalty; however, you must make sure that they make 20% less than George & Kramer. You must also make sure that they know why George & Kramer make more than they do. They must know what kinds of things they must do to make as much as George & Kramer.
Uncle Lewis (Your “C Player”) -This guy will not care and will do a terrible job. This person will blame “lack of training,” or “outside circumstances.” This person either “got caught in traffic” or “couldn’t do their job because someone else didn’t do theirs.” This person works with a scowl. This person is chronically tired. This person is “married to a terrible person” and “you just wouldn’t understand.” This person wants to know if they “can leave a few minutes early.” This person seems to “know” that this job, like all jobs will lead them nowhere, so they walk slowly. You don’t need this person and you need to fire him. This person needs to be fired quickly and everyone needs to know why they were fired, so that the news of their firing spreads throughout the organization. Everyone in your company must know that this type of behavior is simply not acceptable.
Business Coach Rules for Implementing a Merit Based Pay System:
1) Reward great work with great pay. Celebrate their success publicly. Treat your “A-Players” like all-stars.
2) Reward your “B-Players” with awards for their loyalty and their dependability, but make sure they make 20% less than your “A-Players.”
3) Reward “C-Players” and terrible work with quick firings. Publicly share what behavior is unacceptable and what work will not be tolerated. News of your high expectations will spread faster than you can possibly talk.
4) Use numbers to determine who does great work and who does not. Survey your clients, measure the closing percentages, look at your costs, find a way to quantify how well people are doing. If you can’t measure it, you can’t manage it fairly.
Once you create a culture where everyone knows where they clearly stand in the organization, you will begin to experience huge boosts in morale, quality and ultimately profitability. Most people, with the exception of your “C-Players” want to do a great job and they want to wow their bosses. They want to get promoted and they want to be acknowledged. Ultimately, a culture of candor will allow you throw an elbow when needed and give a pat on the back when your team wins. Without candor, false-kindness will prevail and as a result, the organization’s quality, morale, and revenues will fall.
If you are serious about implementing the winning business coach and management systems, you are going to need some good software or at the very least, you are going to need to create a nice and orderly spread sheet for tracking the overall ranking of your staff. If the thought of building a spread sheet freaks you out, or if you need to see a visual example, contact us today through our website at www.thrive15.com or give us a call at the office today at (918) 878-0216.
Bonus Business Coach Lesson & Profound Truth: Edge
You must do the right thing, even if it’s unpopular or your business will fail.
“Great spirits have always encountered violent opposition from mediocre minds.” – Albert Einstein
If you are going to succeed as an entrepreneur, you are going to have to be more tenacious than the nay-sayers, the excuse makers, and the doubters who are in and outside of your business. You are going to have to be incredibly firm in your convictions. You have to be uncompromising with your reception to business coach and impeccable when it comes to maintaining quality standards for your customers. If you are so worried and preoccupied about the feelings of everyone except your customer, you are going to fail. You are going to have to hire and fire people. Your great ideas WILL CONSISTENTLY ENCOUNTER VIOLENT OPPOSITION FROM MEDIOCRE MINDS. Mediocre people produce mediocre products and services, and mediocre bosses keep them around. If you are going to make it to the top, you must have an EDGE to you. You must make the big business coach decisions and the tough choices. As an entrepreneur, you can delegate everything except the decision making. Again, this NUGGET IS SO PROFOUND, IT IS WORTH RETYPING. AS AN ENTREPRENEUR, YOU CAN DELEGATE EVERYTHING, EXCEPT THE DECISION MAKING. You are going to have to become comfortable with making the right decision every time, even if it is not the popular decision.
To be a top level entrepreneur, you are going to have to be like a sword. A sword is neither bad nor good. A sword is a tool. It can be used to cut things, fight enemies, make kebabs, use as decoration etc. Just like a sword, on occasion you are going to have to kill enemies, and on occasion you are going to have to be used as decoration. Be prepared for this. Because when the time comes, you must be ready to make those TOUGH DECISIONS. You must have a sharp edge if you are going to be an effective sword.
Another Bonus Profound Truth: Execute: You and your business get paid for what problems you solve, not for what problems you intend on solving.
“Be a yardstick of quality. Some people aren’t used to an environment where excellence is expected.” – Steve Jobs – Founder of Apple
One of things that I love about business is the white and black, cut and dry, you did it or you didn’t do it aspect of it. When your business and your team knock out projects on time, and consistently deliver on your promises, you will build a solid reputation for yourself and your company and YOU WILL BE ABLE TO CHARGE MORE MONEY. If your company consistently runs behind and consistently runs over deadlines, you will develop a poor reputation and YOU WILL HAVE TO CHARGE LESS MONEY. Overtime, you will basically be exchanging your reputation for compensation. So I ask you: How’s your reputation right now? Do people see you as the person who dresses well, shows up early, and delivers projects on time (if not early)? The late great Andrew Carnegie, one of America’s wealthiest men of all time, once wrote, “As I grow older, I pay less attention to what men say. I just watch what they do.”
Right now, BEFORE YOUR BUSINESS GETS HUGE, you must decide what your company’s reputation will be. Will your company be the next Lexus? Will your company be the next Starbucks? Will your company be known for its relentless pursuit of perfection or will your company be known for its relentless justification of imperfection? Once you have determined how you want your company to be perceived and viewed, it is now time to turn these ideals into reality. To turn these ideals into reality, you are going to have to hire people that execute and actually produce results. In a small and growing business there is absolutely zero room for justifiers. In a small and growing business, everyone must execute. Everyone must deliver. Demand that your team executes your exacting standards. Do not tolerate mediocrity. Measure your team’s results and reward those who execute your game plan. Take a moment now and write out a brief description of what your company’s product standards will be and how you plan on rewarding those who execute your plans and turn your quality standards into reality.
People that execute and get things done are rare. It is going to take relentless follow-up on your people to get your team in place and to prune your business tree of those that simply do not deliver on what they promise you and your customers.
Final Thought: Spidering, the systematic follow-up and the art of turning one deal (sale) into three deals.
“If you do build a great experience, customers tell each other about that. Word of mouth is very powerful.” – Jeff Bezos
In order to grow your business quickly and exponentially, you must learn to become effective at the process I call “Spidering.” If you spent an afternoon watching spiders doing their thing, you would be one weird human; however, you would also learn a thing or two about business from them. Spiders don’t make webs out of 1 piece of spider string. Spiders spread their webs out, and overtime they become more and more intricate because these guys are focused on catching other bugs in their web (net). Spiders might not be able to memorize the Periodic Table, but they do understand that they are going to need a bigger web, if they are going to catch more food. As a business owner or entrepreneur, you must come to grips with this right now.
Over the years, I have met numerous bitter, broken, and poor entrepreneurs who believe that “my great product should sell itself.” This is bogus and this is a good tip on how NOT to be successful. In order to make BIG MONEY NOW, you must learn this “Spidering” system now. “Spidering” is nothing more than the systematic approach of turning one sell into three sells and one contact into 100 contacts. Listed below you will find my 7 rules for effective “Spidering.”
Rule #1 – Get the email address, name, phone number, and profession of every human you talk with. If someone buys something, get their email address. If you meet a business owner at Starbucks, get their email address, their name, phone number, and profession. Do this every time.
Rule #2 – Put all contact information you ever collect into a database (I recommend the Sage ACT! Software).
Rule #3 – Make it your mission to help your clients solve their problems whether or not your service is the one who can help them or not. If you own a bakery that specializes in wedding cakes, make it your priority to ensure that every bride finds a great band, DJ, florist, photographer, etc. Go out of your way to improve the quality of their day by helping them to solve their problems.
Rule #4 – Whenever you give a referral, make sure you follow-up by calling the service provider you referred to tell them about the referral you sent them. You must establish and maintain “top of mind awareness” with each and every one of the service providers you refer. Referrals are like boomerangs. They will never come back and unless you actually throw them out there to begin with. You must first give a referral, if you ever expect to get one.
Rule #5 – Make it your team’s mission to over-deliver, to wow, and to exceed the expectations of every client. Show up early. Bring your clients a little “something extra”. Bring your clients joy, exceed their expectations, and do something for them that is well above what they expected. If you do this, your clients simply will not be able to stop talking about you and the great job you did for them. If you simply do what you promised, clients will not talk about you.
Rule #6 – Become Facebook friends with all SATISFIED CUSTOMERS. After the service has been provided, survey each and every one of your clients via email. If the customer gives your company high marks, you must invite your client to become Facebook friends.
Rule #7 – You must focus on taking your relationship with every buyer from “just a buyer” to a “client” and then ultimately to an “apostle” and “viral fan of the business.” This process takes a while, but it will be done if you are systematic and diligent with your Spidering efforts.
Rule #8 – Send your clients at least 4 email newsletters per year. Clients can forget about you if they haven’t seen you in awhile.You have to stay on the minds of your clients or you will be forgotten.
Rule #9 – Routinely post your company’s testimonials and good news via your Facebook page. Clients and potential clients must see that your company is consistently prospering, growing, and wowing other clients.
Rule #10 – Stay aware of contests, business awards, and other public relations opportunities for which your company is eligible. These awards and contests often require testimonials from previous clients and certified financial records. Make sure your company stays in contention for these awards, and then make sure that you ask your “apostle” and “super happy clients” for their support in providing a testimonial for your company. When people invest their time and money in a business or organization, they naturally begin to become even more loyal to your brand.
Rule #11 – Energize your clients with routine customer appreciation parties, customer surveys, vendor appreciation days, and other events that will give you face time with your clients to tell them “thank you” without attempting to “sell them” anything.
Rule #12 – Be the guy (or lady) that mails HAND-WRITTEN “thank you notes” to your clients. When you mail a “thank you” note, you will break out of the “clutter of commerce” almost immediately. People remember “thank you notes” and “personal letters from companies” and they will talk about them.
Rule #13 – Be memorable to your clients. Be the Fitness Boot camp who brings more energy than anybody else. Be the bakery whose cakes are over the top. Be the insurance agent who is hilarious and always wears a bow-tie. Be the conservative business owner who is always rocking a “faux-hawk” on your head. Be the business that has real “cool” factor associated with it (think of the Mac Store). Be professional, yet MEMORABLE.
Creating a checklist and a duplicable system for “spidering” in your business is very important and very uncommon. Countless studies show that well over 80% of small businesses fail within their first 2 years and I would argue that much of this is due to the fact that most small businesses are clueless about how to leverage their existing client base. I certainly once was. If you need help developing an effective “spidering system,” give our office a call at 918-878-0216 so that we can setup a brain-storming session with our team. We’ve built countless “spidering” (leveraging) systems and it is incredible to see them work. Getting more business and more referrals from your existing book of business has the power to change everything.