Does Your Business Have Religion?

Does Your Business Have Religion?

Tom Watson, Sr., the legendary leader of IBM, reportedly said that in order for a company to become truly great, it needs religion.

The kind of religion Watson was referring to is the idea that a great company needs to have core beliefs. It needs to have a unifying message that all employees adhere to. Some refer to this as a vision and mission statement for the company.

Why is this important?

When you clearly state what you and your company are all about, you’re announcing to the marketplace what you consider important and what people should expect from you.

This can have a powerful effect. When you clearly stand for something, you often stand apart in a competitive marketplace. When you make your core belief something unique, your company will be seen as extraordinary in a world of copycat dullness.

Your Credo
Credo is Latin for “I believe.” A strong credo not only unifies everyone in the company but also helps attract like-minded customers who want to be a part of an extraordinary company experience.

A credo should be more than flowery statements, which are only meant to go on the company plaque and the back of your business cards. A true credo should state your most strongly held beliefs and core values. It should be the North Star that guides your company’s focus and direction.

If you don’t have a credo or vision statement for your company, it’s time to create one. If you have an old one that no one in the company can recall, it’s time to revisit it and create a memorable one.

Don’t be afraid to share with the world — with clarity and boldness — exactly what you believe in and what you focus on. Much like the original IBM, which went from 1,300 employees and $4.5 million in sales to over 72,500 employees and $897 million in sales at the time of Watson’s death, having a company religion and sharing it openly with the world can help skyrocket your business, too.

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The Five Dollar Workday

The Five Dollar Workday

Henry Ford, the famous Ford Motor Company founder, was known for many things. Among them was his role in promoting the assembly line as a viable means for mass-producing automobiles, a process that made cars more affordable for middle-class Americans.

Ford had a global vision with consumerism as one of its centerpieces. He had an intense commitment to lowering costs through systemization and building a more process-driven company.

This focus made his next move (which is not as well known) quite a shock at the time.

The Five Dollar Workday

In January 1914, Henry Ford made a radical decision. He increased Ford Motor Company employee wages from $2.34/day to $5/day (equivalent to approximately $110 today) and reduced the workday from nine hours to eight.

While this was one of the most generous pay hikes of its time, Ford didn’t do this simply out of the goodness of his heart. At the time, the Detroit area was already becoming known for companies offering higher-than-average pay. In addition, the boredom of repetitious, assembly-line work led to higher employee turnover rates. One of the underlying reasons behind Ford’s move to increase wages was the desire to attract and retain top-notch employees by effectively creating golden handcuffs.

Ford used his PR machine and news journalist contacts to spread the word about the generous pay. Soon, there were thousands of applicants at every Ford factory, which allowed the company to hire only the best applicants. The fortunate hires stayed with Ford much longer than they otherwise might, since they couldn’t get similar pay elsewhere. In one bold move, Ford had managed to solve most of his company’s labor problems.

But higher employee retention was only one benefit of Ford’s plan. Within two short years of the pay raise, Ford’s profits increased by 200% to $60 million per year. Within five years, Ford Model T’s were rolling out at the rate of one every 24 seconds, much faster than the 12 days each had initially taken to produce. By the end of 1914, the 13,000 Ford Motor Company employees were producing 260,000 automobiles annually, while the rest of the automotive industry produced 280,000 combined.

At the time, much of corporate America did not view employees as an asset. Instead, they were seen as part of a company’s expense. With this single move, Ford was able to open the eyes of the corporate world. Ford had created a workforce that became a model for the eight-hour workday and HR departments of today. More importantly, he set the pace for the eventual rise of middle-class America. Ford employees could actually afford to buy one of the cars they produced.

With the $5-per-day pay hike, Ford was able to reduce employee turnover, increase the pool of high-quality applicants, reduce absenteeism drastically, and attract top-notch employees. The corresponding morale increase led to the highest productivity rates in history.

So what’s the moral of this story? What can we glean from it and apply to our own companies in the 21st century?

When companies shift their mindset from viewing employees as an expense item on the financials to an asset with vast potential, they can begin to see brighter possibilities for the whole company as well. Employees who truly believe they are appreciated and feel valuable to their company are much more likely to be highly productive and happy with what they are doing. Content employees are much less likely to actively seek opportunities elsewhere. Loyal, long-term employees lead to stability and customer satisfaction.

Henry Ford made a big splash with his five-dollar workday. The same kind of impact can be made today by implementing innovative ideas that show employees you appreciate what they do.

Studies and surveys have shown that higher pay is not the top motivator for employees to stay with their company. Feeling valued, being content in their role, and accomplishing larger goals are more important criteria. Find effective ways to instill those feelings in your employees, and you can make your own splash.

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Are You Doing Too Much?

Are You Doing Too Much?

Once a business is established, it’s common practice to add products and services in the name of diversification and the desire for more profits. It’s a wise business move to choose products and services that will appeal to customers you’re already doing business with.

But what’s the point of diminishing returns? When does adding more products become less profitable or even start losing you money?

Lego is known for its beloved interlocking toy bricks. The company has been around since 1949. You and your children have probably built many fun projects using their colorful, iconic blocks.

As with many other successful brands, Lego decided to diversify. The Denmark-based company added games, movies, clothing lines, and six themed amusement parks (Legoland). Lego added many new colors to the primary colored bricks originally available. Costs were added at a much higher rate than new profits to pay for all this diversification.

The once very profitable company began bleeding red ink. A new CEO (Jorgen Vig Knudstrorp) was brought in to fix the problem. One of the first questions he asked was this: “What do we need to stop doing?”

Beginning in 2005, Lego sold the theme parks and whittled down half of the brick colors. They became more efficient and creative at doing what they were good at by concentrating on less rather than more. By the end of the same year, Lego was profitable again.

Sometimes the answer to doing more is to actually do less. Doing less frees up time and resources to concentrate on the key products and customers that bring you the bulk of your profits. If you have too many services or products, start considering what things you should stop doing, so you can focus instead on what really matters.

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Your $325,000 Gift

Your $325,000 Gift

Ivy Lee was born near Cedartown, Georgia, on July 16, 1877. The son of a Methodist minister, he studied at Emory College in Atlanta before graduating from Princeton University. He went on to found a PR firm, among many other accomplishments, before becoming a management consultant.

About a hundred years ago, Bethlehem Steel found itself in trouble operationally. The company’s chairman, Charles M. Schwab, hired Ivy to study the company’s ills and report back.

After some research and interviews, Ivy handed the chairman his findings and recommendations on a small sheet of paper. He then said, “Follow this, and your company can correct its problems.”

This short list of recommendations was directed at all the executives of the company:

  1. In the evening, each executive was to write down the six most important tasks to be done the next day and arrange them in the order of importance.
  2. The next day, they would start the first task and finish it before starting anything else.
  3. After finishing the first task, they would start the second-most important task, finish it, start the third task, and so on down the line.
  4. After their day’s work, before leaving the office, they would spend five minutes reviewing the day’s tasks and making a list for the next day. Unfinished tasks could be put on the new list.
  5. Each executive was to do this for the next 90 days and check the results.

Ivy left the chairman’s office, asking him to put the plan into action but to pay him only if the company got results. He further asked to only get paid whatever the chairman thought the advice was worth.

In two weeks, Schwab sent Ivy a check for $25,000. At the time, the average worker in the U.S. was being paid $2 per day, so this was worth approximately $325,000 in today’s dollars. He added a note saying this was the most profitable lesson he had ever learned.

Did it work?

Within five years, the Bethlehem Steel Company had become the biggest independent steel producer in the world. Schwab became the best-known steel man of his day and went on to make a hundred-million-dollar fortune.

The story of Lee and the advice he gave to Schwab is well-known in the business and self-development world. But even if you do already know it, it’s still worth studying again and again until it’s ingrained into your daily habits. The lesson to be learned is the importance of defining top priorities and focusing on those important items until they are finished, rather than letting the mundane and unimportant distract us. Master this habit, and you might be able to write your own $325,000 check.

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What Declining Sales Really Mean

What Declining Sales Really Mean

Many businesses are currently experiencing a decline in sales. Some owners and executives believe this is due to outside economic conditions. Although the economy may have some bearing, perhaps the real reasons for the decline are more fundamental issues that no one in the company wants to face. The economy has only masked the issues and helped sweep them under the rug.

Many in this predicament think, “If only we could increase sales, everything else would take care of itself.” Oftentimes, the declining sales pattern is not the real problem; it’s just a symptom of other underlying issues. Perhaps the issues are in management, staffing, or a lack of effective marketing and sales.

If your company is experiencing a sales slump, it may be time to do a little soul searching to find the real issues. If you decide to take this head on, here’s a four-step plan to help you lick the problems.

Step 1 — Assess your current situation. What strengths do you see? What weaknesses? Are there opportunities you might be missing? And what are your threats? The more honest you can be at this step, the better the foundation for the rest of the process.

Step 2 — Now that you have an outline of the problems, it’s time to make a diagnosis. What are the causes behind the problems and issues you’re facing? Look beyond the surface issues, and try to get to the root causes.

Step 3 — Now that you have the assessment and a diagnosis of the situation, it’s time to make a plan that addresses your diagnosis by taking advantage of the strengths you identified and establishing ways to correct the weaknesses.

Step 4 — This is where the rubber meets the road. All that analysis will lead to no good unless you follow up with action. It’s time to follow through and act on the plan by implementing the changes outlined in the previous step.

By following through on these four simple but powerful steps, you can not only turn around sagging sales but also position your company for long-term growth.

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Positive Steps for Handling Negativity at Work

Positive Steps for Handling Negativity at Work

We’ve all heard the saying that one bad apple can spoil the bunch. The same is true of negativity in the workplace. A single employee’s negative attitude can bring coworkers down and hurt morale. So how can you combat it?

  • Confront the offender. While it may seem easier to ignore a problem and hope it goes away, that rarely works. In fact, the problem usually just keeps getting worse until you have no choice but to act. When you see someone displaying a negative attitude (or hear about it from coworkers), sit the person down and let them know their attitude is not acceptable.
  • Get to the root of the problem. In your meeting, try to discover the cause of the person’s dissatisfaction. Perhaps they feel slighted by something that happened at work. They may think someone else received preferential treatment over them or that what they do goes unnoticed and unrecognized. Whatever the case, hear them out and acknowledge their feelings, even if you disagree. Share your own thoughts, discuss the issues, and try not to be too confrontational.
  • Seek solutions. As you’re discussing issues, look for ways to resolve them as best you can. Keep in mind that not all grievances can be easily solved and not all negativity is completely work-related. However, approaching the situation with a solutions-oriented mindset should help at least let the person know you’re taking their well-being seriously.
  • Hold your ground. No matter the outcome of your meeting, make it clear that the employee is responsible for their own actions and that continued negativity will not be tolerated. Spell out the consequences and stand firm in your resolve.
  • Reward positivity. Hopefully, your meeting and the solutions you devise together will trigger an attitude shift in your employee. As you notice changes, offer positive reinforcement and encouragement. Of course, even if you don’t see changes in the employee, try not to get too discouraged. Instead, focus on the more positive members of your team. Reinforce, reward, and encourage their attitude and its positive influence on those around them.
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Cicero’s Six Mistakes of Man

Cicero’s Six Mistakes of Man

Some truths are timeless. Here are six from the Roman statesman Cicero. He called these “The Six Mistakes of Man,” and though written more than 2000 years ago, each is still applicable today.

1. The delusion that personal gain is made by crushing others
While this may be true of Hollywood villains and reality show contestants, most of us realize that true success comes from working together toward a common goal. Profits are certainly a vital component of success in business, but making them at the expense of those around you is not. Partnerships, collaboration, and teamwork are far more effective ways to build the kind of long-term, sustainable success most of us are after.

2. The tendency to worry about things that cannot be changed or corrected
Far too much energy is spent on idle worrying. That doesn’t mean we shouldn’t concern ourselves with improvement. By all means we should. But worrying never accomplished anything. Try not to get overly concerned with things that are beyond your control. Do your best, accomplish what you can, and keep plugging away.

3. Insisting that a thing is impossible because we cannot accomplish it
Many of the things we take for granted today were once deemed impossible. Sure, a task may not seem possible right now, but that doesn’t mean you couldn’t accomplish it someday or that you couldn’t team up with somebody (or several somebodies) to accomplish it in the not-too-distant future.

4. Refusing to set aside trivial preference
It’s easy to fall into the thinking of “my way or the highway.” There’s a reason we do things the way we do: because our way works. In many cases, a lot of time, effort, trial, and error have gone into refining our methodology. But sometimes, we just do things a certain way because “that’s the way it’s always been done.” Opening our minds to other possibilities helps us grow personally — and as an organization or team.

5. Neglecting development and refinement of the mind and not acquiring the habit of reading and study
Most business leaders are also lifelong learners — always reading, refining their skills, and studying others to stay ahead and continually improve their companies. Many also embrace a culture of learning throughout their organizations — cultivating knowledge, encouraging growth, and rewarding employees for ideas that translate to the company’s bottom line.

6. Attempting to compel others to believe and live as we do
In some ways, this relates to #4 above, but on a grander scale. Instead of issues related to company policy and procedure, this mistake goes into personal beliefs and attitudes. Sure, life would be easier if everyone believed the same things and lived their lives the same way, but it would also be a lot duller. Different opinions, beliefs, and life experiences can infuse a team with energy and lead to fresher ideas and bigger innovations.

So, what do you think of Cicero’s mistakes? Can you think of any that he might have missed? I’d love to hear your thoughts in the comments below.

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3 Things Your Business Can Learn from a Chameleon

3 Things Your Business Can Learn from a Chameleon

Chameleons are amazing creatures. And not just because they appear in a hit ’80s song or humorous word-nerd send-up. No, chameleons are amazing for three distinct reasons. And each relates (in its own small way) to business.

1. Chameleons adapt to changes surrounding them.
While the common belief that chameleons change colors in order to blend in with their environment is not true, chameleons do change color based on temperature, light, and mood. As a chameleon grows warmer, for example, its colors become brighter and more distinct.

Business application: Like the chameleon, we, too, need to adapt to changes affecting us. As the competition turns up the heat, we need to let our true colors shine through, so we can stand out from the crowd.

2. Chameleons can focus on two things at once.
A chameleon’s eyes move independently of one another, allowing it the peculiar ability to watch two things simultaneously… without moving its head. What’s more, each eye has a horizontal radius of 180 degrees and vertical radius of 90 degrees, and can see in three dimensions.

Business application: While a singular focus can have its advantages in certain situations, being too focused on only one option (tunnel vision) can sometimes make us overlook opportunities or obstacles in our way.

3. Chameleons strike quickly and with pinpoint control.
A chameleon’s sticky tongue is a marvelous thing. Roughly the length of the creature’s body and tail combined, it can extend and retract in just a fraction of a second, with deadly accuracy and control.

Business application: Like a chameleon hunting its dinner, we need to remain nimble, too, so we can act quickly and with pinpoint control when opportunities arise.

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Staying on Course

Staying on Course

The earth’s magnetic fields are in constant fluctuation. Earlier this year, The Independent (a London newspaper) reported that the magnetic north pole is “currently relocating towards Russia at a rate of about 40 miles a year.” According to the article, this speed “has increased by a third in the past decade” and represents a “faster [movement] than at any time in human history.”

The article goes on to talk about some of the ramifications these changes are bringing about. For example, magnetic compass directions are changing by about one degree per year, causing some airports to have to relabel runways to correspond with the new readings.

I mention this because it illustrates an important point for business owners. Like magnetic north, the business world is in a constant state of flux. Communication channels that didn’t exist five years ago (Twitter, Facebook, etc.) are now essential tools for marketing and customer interaction. Smartphones and handheld devices such as the iPad are changing the way people live, work, and shop. Competition for many of us has grown stiffer, and the rules are changing all the time.

Like airports that rely on magnetic compasses to identify their runways, we must keep a constant eye on the changes going on in our industries and in the business world at large. A one-degree change on a compass wheel may seem insignificant and small, but over time and across great distances, its impact can be severe.

Staying the course isn’t always the best way to stay on course, especially when the course keeps shifting.

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How do you measure up?

How do you measure up?

Industry ratios can be incredibly important tools for running your business. Knowing how you compare to other businesses that are your size and do what you do is pretty valuable.

For example, if your company spends 10.9% of its budget on rent and you find out that most companies in your industry only spend 6.5%, then you know you are probably spending more than you should. Using these statistics, you can make adjustments to bring your financials in line and ensure better profitability.

Trade associations are often a good source for industry-specific ratios. You might have to dig to find your ratios, but no matter where you get them, they are important numbers to have.

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