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Meet Doug & Polly

Doug and Polly White love working with small businesses. Through their columns, which appear weekly in several online publications including Entrepreneur.com, their books, videos and speeches, Doug and Polly focus on helping small business owners and their managers grow and improve profitability, understand and manage their people and their finances and achieve organizational efficiencies.

Doug White
Doug White spends his time solving business problems for entrepreneurs and their organizations. His background in physics, math, engineering and business gives him an ability to go beyond the easy, surface solution; to dig deeper and find unique answers to the problems that plague small businesses. Read more...
Polly White
Polly White spends most of her time on the "folks." Whether it is helping owners and managers learn how to get the best out of their people or walking companies through a complex HR situation, Polly's expertise is unparalleled. She has that unique ability to understand people, their behaviors and personalities. Read more...
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Changing Employee Behavior


Q.  I run a small business with about 25 employees and I am faced with a challenge. I need to change the behavior of my employees. I have asked them repeatedly to turn in their timesheets before they leave work on Friday. When I make an announcement to the company, things get better for a week or two, but then they regress to the former state. How can I fix this problem permanently?

A.   Changing behavior is challenging, but it can be done. There are three straightforward steps:

Measure the behavior – Regardless of what the behavior is, the first step to changing it is to measure it. If at all possible, the measurement should be objective and quantified. Making the measure objective rather than subjective eliminates the possibility of an argument about the outcome. Were the timesheets turned in on time? This is binary—yes or no. They either were or they weren’t. There should be no room for debate. Objective measure are preferable.

Second, the measures should, if at all possible, be quantified. If 20 of 25 timesheets were turned in on time, the on time rate is 80 percent. Quantifiable measures can be tracked and plotted over time. Trends are easy to identify. Improvements are obvious—so are problems. Even subjective measures can be quantified. For example, suppose you want your phone answered with a pleasant voice. Whether a voice is pleasant is clearly subjective. However, the measure can be quantified. The phone was answered with a pleasant voice 43 times out of 50—an 86 percent success rate.

Pay attention to the results – It is great to measure behavior and that is the first step, but by itself this is insufficient. If you measure results, but they go into a drawer and you don’t pay attention to them, nothing will change. We often say, what you measure and pay attention to is what you get. If you want timesheets turned in on time, measure performance and let people know that you are paying attention to results. Post them. Announce them at company meetings. You have to make sure that everyone in the company knows that this is important to you.

Enforce consequences – Finally, there will need to be consequences for failure to perform. Be careful about making draconian public decrees such as, I’ll fire the next person whose timesheet is late. Suppose the next late timesheet comes from a 20 year employee who always turns her timesheet in on time. However, on this Friday she ran out of the office early because her daughter was critically injured in an automobile accident and she forgot her timesheet. Obviously, you’ll want to make an exception. However, you also don’t want to bend your policy. (By the way, in this case, bend it.)

However, it would have been much better for you to deal with repeat offenders privately. Be careful about making public ultimatums that you may not want to enforce. If it becomes necessary to discipline a repeat offender, people will get the message.

By the way, consequences can be positive as well as negative. For example, you could by the company lunch if employees achieve a threshold success rate.

Changing employee behavior can be difficult, but we’ve seen the three steps outlined above work time and time again. If you are committed and follow these steps faithfully, behavior will change.

Read more...

Can Two Captains Sail One Boat?

Q.  A friend and I are starting a new business together. We’re going to be 50/50 owners and co-CEOs. This seems like a good idea. Do you have any concerns or advice?

A.  When two friends start a company, in many cases, deciding who should be in charge is challenging. Neither friend feels empowered to take the lead. After all, they are doing this together. They are equals. It just makes sense. In our experience, co-CEO arrangements or 50/50 partnerships can work, but they are fraught with danger.

One obvious problem is that if the joint leaders cannot agree on a way forward, the business can grind to a halt. This happened with Premier Pet Products a pet supply manufacturer. Sharon Madere, a visionary entrepreneur, started the business in her guest bedroom. Sharon developed a product called the Gentle Leader--a bridle for dogs that allowed the owner to control the animal without hurting it. On the strength of this product, the business grew into the tens of millions in revenue.

If you are looking for help with sales, strategy and marketing, you might want to check out our newest program, The Three Questions Every Successful Business Person Must be Able to Answer. These three videos and workbook walk you through the powerful questions that Doug and Polly use with their personal clients to create successful business/marketing plans.

3 QUESTIONS
$147.00
Buy Now!



Then, Sharon decided to acquire a related business that made coats for dogs which was owned by Chuck Mann. In merging their businesses, Sharron and Chuck became equal partners. Things went along fine for a while. Eventually, differences began to surface. The partners had different visions for the company. The impasse on vision led to conflict on smaller issues. Unfortunately, as 50/50 partners, there was no way to break the deadlock. Premier Pet Products literally ground to a halt. In the end, Sharron and Chuck concluded that the best course of action was to sell the business.

On the other hand, we have seen businesses flourish with co-leaders. When Capital One was spun off from Signet Bank in February of 1995, Rich Fairbank and Nigel Morris headed it. Rich and Nigel divided the titles. Rich was the Chair of the Board and CEO. Nigel was President and COO, but when underlings presented, the pair was most often seated side by side at the head of the table. They ran Capital One together and it thrived.

Clearly, some co-CEO arrangements and 50/50 partnerships work well. Others fail. If you enter into such a relationship, the three tips below will help ensure that your business will be among those that flourish.

Establish a clear division of responsibilities – Our own management consulting business, Whitestone Partners, is a 50/50 partnership. We both use the title Principal. We are co-equals. For us, dividing the responsibilities has been a key to success. We play to our strengths. For example, when working with clients, Doug handles the strategy, operations, finance and analytics. Polly focuses on human resources and people management. We divide administrative duties as well. Doug does the accounting. Polly manages the employees. However, as a married couple, if we can’t make a decision for our business, we have bigger problems.



Each employee should report to only one person – We’ve seen businesses try to have employees report to both co-CEOs. Invariably, employees get caught between a rock and a hard place. When the leaders give different directions, what does the employee do? When the co-CEOs want the same scarce resource, to which does the employee give it? Don’t put employees in this untenable situation.

Have a tie breaker – Premier Pet Products was deadlocked, in large part, because there was no mechanism to adjudicate disputes between the co-owners. Conversely, when Rich Fairbank and Nigel Morris reached an impasse regarding the strategic direction of the company, the Board of Directors made the call. Nigel retired from Capital One in 2004. Alternatively, a small business might divide ownership between partners on a 49/49 basis, awarding the remaining 2% to a trusted advisor who would cast the tiebreaking vote when necessary. However you do it, make sure that there is a clear mechanism for resolving disputes.

Co-CEO arrangements and 50/50 partnerships can work, but there are dangers. The tips above will help you navigate safely around the potholes and bumps in the road.

Read more...

Five Steps to Overcome a PR Crisis

Q.  My small business is facing what could be a PR crisis. One of our local television stations may be planning to run an unflattering piece about my business. Do you have any advice for how to handle this effectively and minimize the damage?


A.   First, if 60 Minutes calls, hang up! Seriously, the five tips below will be helpful when you are facing a PR crisis.




What is the formula for a successful business? You know the ones we mean, the ones that thrive. These are the businesses that throw off a lot of cash and provide a great lifestyle for the owner and his/her family. Then there is the other kind of business. Those that struggle and never seem to reach their potential. Doug and Polly’s award winning and best-selling book, Let Go to Grow: Why Some Business Thrive and Others Fail to Reach Their Potential uses real life examples gleaned from their more than 100 interviews with small business owners and entrepreneurs.

LET GO TO GROW
$16.47
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·         Have a plan for dealing with the media – Your first decision is whether you will accept an interview to comment on the story. If you choose not to comment, it won’t stop the media outlet from running your story. They will probably say something that indicates you declined to comment. However, you will avoid being put on the hot seat and potentially being made to look bad on camera. This may also allow you to avoid having your face on the local news.

 
If you do choose to comment, beware of several things. You are highly unlikely to convince the reporter not to run your story. Your interview will be edited. The media outlet can choose to take your comments out of context and may simply misunderstand what you are trying to say. Therefore, if you are going to accept an interview, have a very simple message and stay on point. Don’t get sucked into conversations for which you are not prepared.

 
·         Determine who will speak to the media – Whether you plan to speak to the media or not, you don’t want to have random employees, who may not know the whole story, interviewed. Communicate to your employees that they are to refer all requests for interviews or statements to a specific person. If you are going to communicate with the media, identify a specific person to be the spokesperson. In a small business it may be the owner. In larger concerns, you may have an employee such as the head HR communicate with the media. Regardless of who speaks, make sure that the person has a concise message and stays on point.

 
·         Consider hiring professional help – Depending on the size and severity of the story, you may be well advised to hire a professional who has experience in crisis management. Such people can provide useful input into how to handle a difficult situation. If you are likely to face criminal or civil charges as a result of the report, consult an attorney who has experience with these types of issues.

 
·         Don’t do things to make the situation worse – If you are facing charges of unsafe working conditions in your plant, this is not the time to give the VP of Manufacturing a big bonus. This may seem obvious, but it is amazing how often companies make mistakes like this when they are under the spotlight. Our advice is to be very careful about handing out bonuses, promoting people or holding company celebrations. Don’t let your actions make it look like you aren’t taking the issue seriously.

 
·         Own up to your shortcomings – If you have made mistakes, our advice is to own up to your shortcomings, fix them and take what you have coming. Trying to cover things up almost always makes matters worse. With this said, if you are facing criminal or civil prosecution, we suggest that you follow the advice of your attorney.

Of course you will be better off to avoid such situations by not engaging in activities that are illegal, immoral or unsafe. Further, it is important to create a culture in your company that doesn’t tolerate such behavior. It is important to have checks and balances so that it is unlikely that one rogue employee can consistently behave in a way that will get the company in trouble. However, if the time comes when you and your company are on the hot seat, these five tips will be helpful.

Read more...

How to Save Your Company by Performing a Business Triage

Q.  I’ve got a terrible problem. My business with 25 employees is underwater. I can’t pay all of the bills. We have plenty of revenue, but things have gotten away from me. I’m overwhelmed and don’t know what to do next. What’s your advice?

A.  It sounds like you are in a tough spot. You’ll likely have to make some difficult decisions and will need to take decisive action to save your business. We’ll give you some general thoughts on how to address your most pressing needs. However, you may be well advised to reach out to someone with experience in this area for help.



If you are looking for help with personal productivity, you might want to check out our book let go to GROW: why some businesses thrive and others fail to reach their potential. In this award-winning book, we teach you how to get your life back by delegating effectively – one of the hardest skills for entrepreneurs. We will also cover the other critical skills necessary to grow a smoothly running operation.

LET GO TO GROW
$16.47
Buy Now!
 

1.      Ensure that you have a positive variable contribution – That is, make sure that the price you receive for your product or service exceeds what it costs you to deliver an incremental unit (e.g., make one more widget or perform one more hour of service). Do this for every product, if you have multiple products. If you price customers differently, the analysis must be done at the customer level. When you find situations with a negative variable contribution, increase price, reduce the cost of providing the incremental unit, or stop offering that product or service. There may be rare exceptions to this rule, but in general, you have got to ensure that you are making money to cover your overhead on each sale.

 

2.      Cut costs – To stay in business, you will likely have to reduce your costs. First, eliminate all discretionary spending. The summer outing or the company holiday party need to go. Next, look to non-people costs. Can you reduce what you pay in travel costs or utilities? The landlord may be willing to reduce rent, at least for a time, if the alternative is empty space because you are out of business. Unfortunately, cutting costs may well involve the difficult decision to reduce labor costs (i.e., lay off people, reduce their hours or reduce compensation). Austerity measures are never easy, but if the alternative is closing your business, it will be better to keep some people employed than for everyone to lose their jobs when the company shuts the doors.

 

3.      Prioritize your payables – You owe more than your available cash. Therefore, you must prioritize what to pay. We suggest prioritizing in the following order:

 

·         Obligations that will shut your business down if you don’t pay them. For example, if you don’t pay your employees, they will likely leave to find work with employers who can pay them. If this leaves you unable to deliver your product or service, you’ll be out of business. Paying employees is typically a top priority.

 

·         Prioritize items that will result in large penalties next. For example, not paying taxes in a timely manner can sometimes result in massive fines. Avoid these if possible.

 

·         Any payment that is late should be next in line.

 

·         Finally, prioritize payments that are not yet late last.

 

4.      Plan your cash flow carefully – Once you have prioritized your payables, assess the cash you have and the receivables you expect to collect. Then build a detailed cash flow plan that lays out who you will pay, when you will pay them and how much you will pay them.

 

5.      Communicate with creditors – When you owe money you can’t pay in a timely manner, it is easy to ignore the situation and hide. This is almost always a mistake. Call your creditors. Explain your situation and your plans to pay your debt. Most people will be willing to work with you if they believe that you will eventually pay what you owe.

 

If you have bank debt and will break a covenant either because you will miss a payment or because some other requirement will not be met (e.g., liquidity requirements), proactively communicate with your banker regarding your situation. Remember, your banker is primarily interested in being repaid. The bank will likely only call your loan if it assesses that there is little hope of being repaid otherwise. If you proactively go to your banker with a sound plan to improve your financial situation and repay the loan, he/she is highly likely to work with you.

The five tips above will help you effectively triage your priorities when your business is struggling. However, don’t wait until it is too late to take action. Move quickly to get your business back on the right track.

Read more...

How to forecast revenue for your company

Q.  I’m struggling to forecast 2015 revenue for my company. I think I can forecast sales for my ten existing clients relatively accurately. However, I have identified about two dozen prospects. I am much less certain how to forecast revenue for them. Do you have any tips for how to think about this issue?

A.  First, congratulations, it sounds as though you have a robust sales pipeline. We have a very helpful technique we have used many times with clients to help them forecast revenue.





If you are looking for help with sales, strategy and marketing, you might want to check out our newest program, The Three Questions Every Successful Business Person Must be Able to Answer. These three videos and workbook walk you through the powerful questions that Doug and Polly use with their personal clients to create successful business/marketing plans.

3 QUESTIONS
$147.00
Buy Now!



You can use this technique on paper or on a whiteboard, but we find it is helpful to use excel because you can set it up to do the calculations for you. In the left most column, list the names of all of your prospects. At the bottom of this column, add one more item called “Unknown.” We’ll use this to add in revenue from clients you will pick up throughout the year that you have not yet identified.

In the next column to the right, enter the amount of revenue you expect to receive during 2015 if you close the client. Remember, if you think it will take six months to close the client, you will only bill for the second half of the year. Make sure to factor this timing into your estimate of revenue.

In the third column, enter the probability that you will close the deal (obviously, this assessment will be between 0% and 100%). If one client has more than one possible piece of work with different probabilities of closing each deal, create multiple line items. For example, consider two possible projects at the Acme Machine Company. Project A would bring in $150,000 and has a 75% probability of closing. Project B would bring in $500,000, but has only a 20% chance of closing. Create one line for Acme – Project A and a second line for Acme – Project B.

In the fourth column, for each row, multiply the contents of the second column (the expected revenue if the deal closes) by the contents of the third column (the probability that the deal closes). So for example, the fourth column for Acme – Project A would be $112,500 ($150,000 X 75%) and for Acme – Project B it would read $100,000 ($500,000 X 20%).

In the fourth column in the row titled “Unknown” put your estimate of revenue that will come from clients you have yet to identify. Admittedly, this can be somewhat of a crap shoot, but if you have been in business for a few years, history should be a good guide for making this estimate.

The sum of the entries in the fourth column will be the forecast of revenue from the list of prospects. What you have done is to discount the potential revenue from each prospect using your assessment of the probability that the revenue will come to fruition.

A simple example, where you will intuitively know the answer, will help illustrate the concept. Suppose you had ten prospects, each of which you expected to generate $200,000 of revenue if you could the deal. Further, you assess the probability that each closes to be 20%. This would mean that two of the ten would close. Two new clients at $200,000 each would be $400,000 of incremental revenue.

You’ll reach the same conclusion following the process we outlined. That, is multiply each of the ten estimates of $200,000 of revenue by the 20% chance each will close and add up the ten results (i.e., $200,000 X 20% = $40,000 and $40,000 ten times equals $400,000).

These are still estimates and reality usually varies from estimates—sometimes significantly. This notwithstanding, the process outlined above is the best we have found for estimating revenue from a number of potential sources where there is uncertainty around whether the deal will close.

Read more...
Q.  I’m struggling to forecast 2015 revenue for my company. I think I can forecast sales for my ten existing clients relatively accurately. However, I have identified about two dozen prospects. I am much less certain how to forecast revenue for them. Do you have any tips for how to think about this issue?

A.  First, congratulations, it sounds as though you have a robust sales pipeline. We have a very helpful technique we have used many times with clients to help them forecast revenue.





If you are looking for help with sales, strategy and marketing, you might want to check out our newest program, The Three Questions Every Successful Business Person Must be Able to Answer. These three videos and workbook walk you through the powerful questions that Doug and Polly use with their personal clients to create successful business/marketing plans.

3 QUESTIONS
$147.00
Buy Now!



You can use this technique on paper or on a whiteboard, but we find it is helpful to use excel because you can set it up to do the calculations for you. In the left most column, list the names of all of your prospects. At the bottom of this column, add one more item called “Unknown.” We’ll use this to add in revenue from clients you will pick up throughout the year that you have not yet identified.

In the next column to the right, enter the amount of revenue you expect to receive during 2015 if you close the client. Remember, if you think it will take six months to close the client, you will only bill for the second half of the year. Make sure to factor this timing into your estimate of revenue.

In the third column, enter the probability that you will close the deal (obviously, this assessment will be between 0% and 100%). If one client has more than one possible piece of work with different probabilities of closing each deal, create multiple line items. For example, consider two possible projects at the Acme Machine Company. Project A would bring in $150,000 and has a 75% probability of closing. Project B would bring in $500,000, but has only a 20% chance of closing. Create one line for Acme – Project A and a second line for Acme – Project B.

In the fourth column, for each row, multiply the contents of the second column (the expected revenue if the deal closes) by the contents of the third column (the probability that the deal closes). So for example, the fourth column for Acme – Project A would be $112,500 ($150,000 X 75%) and for Acme – Project B it would read $100,000 ($500,000 X 20%).

In the fourth column in the row titled “Unknown” put your estimate of revenue that will come from clients you have yet to identify. Admittedly, this can be somewhat of a crap shoot, but if you have been in business for a few years, history should be a good guide for making this estimate.

The sum of the entries in the fourth column will be the forecast of revenue from the list of prospects. What you have done is to discount the potential revenue from each prospect using your assessment of the probability that the revenue will come to fruition.

A simple example, where you will intuitively know the answer, will help illustrate the concept. Suppose you had ten prospects, each of which you expected to generate $200,000 of revenue if you could the deal. Further, you assess the probability that each closes to be 20%. This would mean that two of the ten would close. Two new clients at $200,000 each would be $400,000 of incremental revenue.

You’ll reach the same conclusion following the process we outlined. That, is multiply each of the ten estimates of $200,000 of revenue by the 20% chance each will close and add up the ten results (i.e., $200,000 X 20% = $40,000 and $40,000 ten times equals $400,000).

These are still estimates and reality usually varies from estimates—sometimes significantly. This notwithstanding, the process outlined above is the best we have found for estimating revenue from a number of potential sources where there is uncertainty around whether the deal will close.

“I HIGHLY recommend Polly and Doug. They have wonderful insight to help small business owners prioritize and identify strategies for growth and improvement. Wish I had met them 20 years ago!”

Sharon MaderePresident / Premier Pet Products

My team and I have had the privilege of working with Polly on our business. Polly's keen business insight and savvy is something special. She was honest, direct, and tactful about her observations and recommendations for our team and how to grow our business. It was a pleasure having her help us and I would tell anyone that’s serious about growing their business to call Polly. She’s great!

John O’Reilly, Broker/OwnerBase Camp Realty

“Doug and Polly, I want to thank both of you! The past few months have been enlightening and overwhelming all at the same time. Your guidance, direction, wealth of knowledge, and wisdom have exceeded all my expectations. No words could ever completely describe just how amazing of a “dynamic duo” you two really are!”

Dawn Beninghove, RN, CCM, CRP, PNChief Executive Officer / Companion Extraordinaire Nursing Network, Inc.

“Doug White took on an unfocused operation (in the financial services sector) and created an efficient, centralized system dedicated to excellence. He did this not by driving change from the top down, but by helping the entire team see how their part of the process could be improved. Doug then mentored us toward effecting the changes ourselves. He taught us all how to bring our “A game,” and how to take ownership and pride in what we do.”

Donna LevinVice President of Operations / care.com

"I have had the privilege of working with Polly White for several years on a variety of projects. She consistently provides clear direction on how to resolve a wide range of employment-related issues. I look forward to my continued relationship with Polly."

Elizabeth WilkinsBusiness Manager / Manorhouse Management, Inc.

I have known Polly for more than ten years. As an HR Manager, I have utilized Polly’s training expertise at my former company and with my current company. Polly exceled at assessing the needs of our management teams and tailoring training programs that resulted in visible positive change. I also know I can count on Polly as a resource on any HR topic or bounce ideas off of her when I need a second opinion. Polly has been a mentor to me and I have always appreciated her willingness to listen and offer valuable advice and expertise.

Leigh McCullar, HR Business PartnerUniversity of Richmond

I am truly impressed with the abilities of Doug and Polly White, thank you! What a difference your expertise have made in helping Associates grow in their careers. Your dedication to excellence through empowering the individual and strengthening the Company is enlightening. I do and will continue to recommend Whitestone Partners to the Executive Market.

Suzanne Pittman, MEd VAMAC, Inc.
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