The previous July newsletter sent earlier today contained a broken link to the following article. It has been corrected. We apologize for the error and the inconvenience.
The Worst Hiring Mistake You May Never Know You’ve Made
by Tim Fulton
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When we think of bad hiring mistakes, we often zero in on specific hires such as the sales guy that couldn’t sell or the accountant with math issues, or even the customer service specialist with bad people skills. Those bad hires haunt us for years. Sometimes they even prevent us from wanting to make future hires as we come to believe that we cannot make good hiring choices, no matter what.
My experience is that there may even be a worse mistake than a bad hire. That is when we make a hire when we don’t need to add a full-time employee. Or even worse might be when we don’t add a new employee when our current employees are overworked.
How do we know when to avoid either of these situations? Most often, we rely on a gut feeling. We see workers sitting idly at their desks and we assume we might be overstaffed. Or we see employees working crazy hours or pulling their hair out because of workload and we decide it's time to add staff. Is there a better way of making these decisions?
The good news is there is. Simple math. The calculation is revenue per employee. This may be the best and simplest measurement of employee productivity. Here’s an example:
You have 20 full-time employees (FTEs). Your 12-month annual revenue is $2 million.
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Tim Fulton
President, Small Business Matters
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A few years ago, Eric Coryell stopped by to chat with Tim and Taylor about leading and building accountability teams, the hiring process, the five steps in building an accountable team, and the importance of shared fate. The episode was so popular among listeners, we thought it deserved an encore.
About Eric Coryell
Eric CoryelI helps organizations identify their strategic position, move accountability down into the organization and most of all create accountable teams that deliver results. To support these efforts, he also helps individuals and teams establish meaningful metrics, problem-solve, deal with their real issues by having difficult conversations, and become accountable to each other.
A graduate of the University of Wisconsin, Eric honed his team development skills throughout his career during which he served in various leadership roles from purchasing manager to CEO. Twelve years ago, Eric founded Core Connections, LLC dedicated to helping organizations become more agile, customer-responsive, and efficient through the creation of accountable teams. In addition to being a popular Vistage speaker, Eric is also a lifelong Wisconsin Badgers fan.
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I first reviewed this book in January 2003. Over 20 years later, it remains one of my favorites. I use the tools described in the book frequently. In fact, My SBM Mastermind group just started reading the book this month.
I am convinced that the success or failure of small business owners hinges on the relationships they have with key stakeholders, including customers, vendors, employees, investors, and family. The cornerstone of those relationships is the conversations that do or don’t take place between the owner and these individuals. I wish I had a nickel for every conversation I knew I needed to have with an employee or customer and instead avoided, or conversations that happened and failed miserably.
Susan Scott’s book, Fierce Conversations, addresses this very issue. Scott ran think tanks for executives through TEC International (Vistage), a CEO membership organization dedicated to increasing the effectiveness and enhancing the lives of CEOs worldwide. Scott conducted over 12,000 conversations with CEOs over a14 year period. Fierce Conversations is based on this experience.
What are Fierce Conversations? According to Scott, “A Fierce Conversation is one in which we come out from behind ourselves, into the conversation, and make it real.”
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SBM Boot Camp Kicks Off August 24
The Small Business Matters Boot Camp is designed to prepare small business owners and operators by giving them the tools necessary to steer their businesses in the right direction. Perhaps most importantly, you’ll have the opportunity to network with entrepreneurs that are battling the same challenges and obstacles that your business faces every day.
More than 3,000 small business leaders have participated in this training nationwide. Our next program begins on August 24, 2023, with five full days of executive development on the following Thursdays:
Aug. 24 | Sept. 14 | Oct. 26 | Nov. 30 | Dec. 15
Topics of discussion include:
- Strategic Planning
- Leadership
- Marketing
- Financial Management
- Organizational Design
Can’t commit to consecutive classes? No worries, each monthly unit/class is standalone. Attend any missed classes during the next program series, or elect to have someone within your organization attend the unit that relates to their areas of expertise.
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A new study of three supermarkets in Sweden found that on weekdays, customers spent an average of $23.31 per person when music was playing in the supermarkets compared to $14.96 per person when music was not playing.
Should you be playing music for your customers? Employees?
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Please let me know if I can help you in any way.
Remember, small business does MATTER.
TIM FULTON
President & CEO
Small Business Matters
(678) 427-9436
We help small businesses grow.
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