Gather a bunch of smart small business owners in a hotel ballroom and you are bound to emerge with a list of clever management ideas to try back at your office. And so it was at Inc.'s 2009 Growing Your Company Conference (affectionately referred to as GrowCo in these parts), held in Orlando, Florida, on March 18, 19, and 20. Among the best practices I learned:
'˘ Hiring advice, Part 1. Fred Kessler of Sales Partnerships Inc. in Westminster, Colorado, has a rigorous screening process for new hires and prefers headhunting rather than screening resumes that come in unsolicited. Still, Kessler encourages his staff to follow-up with every applicant, and here's why: he likes to see whom his applicants will list as references. Then, Sales Partnerships goes after those people. The idea is that the average job seeker may or may not be good, but the people they choose to provide as a reference are very likely to be articulate, dependable, and knowledgeable. In effect, job seekers themselves become pre-screeners for headhunting targets.
'˘ Hiring advice, Part 2. Apple's Steve Jobs actually looks for job candidates who have strong drawing skills. So says Tom Wujec, a speaker and author who argues that the ability to express information and ideas through sketches and doodles is fundamental to the process of innovation.
'˘ Hiring advice, Part 3. Lots of bosses give small presents to retiring employees. Jack Mitchell gives small presents—flowers, a nice note—to people he has just hired, no matter how junior they are. Mitchell, the CEO of a retail company that owns three stores including the flagship Mitchell's of Westport, Connecticut, says that the loyalty you engender when you warmly welcome a new employee into your company is well worth the nominal expense.
'˘ Sign every check that goes out the door. Jack Mitchell also recommended this practice, as a way for an entrepreneur to keep in close contact with overhead costs and discretionary spending. (Mitchell's homespun wisdom led one attendee to exclaim, "Some people believe in God. I believe in Jack Mitchell!")
'˘ How to fire workers. Terminating an employee is an aspect of being the boss that most entrepreneurs struggle with. Jeff Davis of Legal Art Works in Jacksonville, Florida, has come up with a mental trick to help him through the act of firing a worker. He pictures his kids. Davis figures that the stress he incurs in managing a poor-performing worker has to have a deleterious effect on his health and, over time, the stress level would shorten his lifespan. Since he wants to live as long as possible to spend as much time with his kids as possible, Davis believes that firing a worker who causes him stress is actually a gift he's giving his kids. "I've shared that bit of advice with other CEOs that I know and they have come back to me saying that it really helped them reduce a ton of anxiety over making a decision," Davis said. "It prevented them from stretching it out over more time and causing more of their hair to turn grey."
'˘ Why now is a great time to kill products or services. Doug Tatum, the founder of Tatum CFO Partners in Atlanta says that now is the perfect time to look around your business and identify a few low-margin activities—products, value-added services, etc.—to discontinue. Customers understand that businesses are streamlining operations in an effort to shore up their balance sheets, so they will be more understanding of changes. And if you can switch them to some sort of lower-cost offering, they may even be grateful that you are changing the terms of your deal with them. Meanwhile, you can use this time to make strategic choices with less pushback from your customers than you might otherwise experience.
'˘ Check your bank's CAMELS rating. Every bank is judged on 6 factors (capital adequacy, asset quality, management, earnings, liquidity, and sensitivity to market risk) and assigned a rating of 1 through 5, with 1 being a strong rating and 5 suggesting weakness. Jack Stack of SRC Holding Co. suggested that entrepreneurs find out their bank's CAMELS rating and only look to work with banks that have a 1 or 2 rating. The top banks, in his experience, tend to give their customers the fairest terms.
'˘ The hidden value of social media. As more companies dabble with marketing on sites such as Facebook, MySpace, and Twitter, the question arises: Is this useful activity or a waste of time? Dr. Christos Cotsakos, the former chairman of E*Trade and the founder of Pennington Ventures, believes it's essential—and actually has a hidden productivity-boosting component. He argues that employees don't work 100 percent of the time they are in the office to begin with. But once they become addicted to social media, they will often check websites during their off-hours to see how online projects are progressing. Cotsakos said that, by tapping into what he calls an employee's "discretionary productivity," a company can get more bang for its marketing buck.
'˘ Abide by the 48-hour rule. As GrowCo emcee Norm Brodsky put it, once you hear a good idea, you have to make a change within your company within 48 hours'¦ otherwise, the idea is likely to fall through the cracks. The clock is officially ticking.