Veteran entrepreneur Norm Brodsky has made many mistakes—but he has a knack for learning from setbacks and using the knowledge gained through adversity to improve his business. Here are 5 controversial and easy-to-argue business ideas that he has come to believe in, through trial and error. You may disagree with Brodsky. That’s fine with him. He is confident you will one day change your mind.
When rival start-ups began to pour into the records-storage business, Brodsky was thrilled. “In a young industry like ours, you have to spend an inordinate amount of time and money just explaining what you do and why prospective customers should pay you to do it,” he explains. The more competitors you have, the easier that task becomes.” Competition makes comparison-shopping possible, which simplifies your sales pitch. All you have to do is explain to a sales lead why you’re better than the next guy. (For more, read "The More the Merrier", September 2005.)
After a series of troubles tied to employees who had recommended their friends and family for jobs, Brodsky banned the practice of hiring relatives and associates. He even fired a woman who had sought an exemption for her friend and, when it was not granted, hired her anyway hoping that their relationship would not be discovered. “Understand, the rule was not a matter of convenience,” Brodsky says. “On the contrary, it was easier and cheaper to rely on staff recommendations... But I couldn't accept the number of good employees we were losing by hiring friends and relatives who didn't work out.” (For more, read "Firing Carlotta", May 2005.)
“Commissions are the norm in most industries, and commissions are the only way to motivate some salespeople,” Brodsky concedes. “But those aren't the people I want in my company, and you should think twice about having them in yours.” Most salespeople want to be part of a successful team, Brodsky explains. But when you pay them by commission, you treat them differently than every other employee—and give them the means to maximize their pay even if it comes at the expense of other departments such as operations and billing. Instead of base plus commission, Brodsky recommends you pay a salary plus a three-part bonus tied to the success of the individual, the team, and the company. (For more, read "The Sales Commission Dilemma", May 2003.)
Warehouse accidents, petty theft, and absenteeism were on the rise at Brodsky’s company, and he had heard rumors that employees were smoking pot on the premises. So he reluctantly implemented drug testing—and the results were stunning. More than half of all current employees tested positive, and more than 75 percent of potential new hires tested positive. One executive secretary candidate reluctantly declined a job offer, only to reveal that she routinely smoked crack on her lunch break. After instituting random screening, the accident rate declined, as did the incidence of petty theft. Morale improved among the other workers. Another bonus: "Our drug-testing program made us more attractive to insurers, allowing us to move our policies to a better provider,” Brodsky says. (For more, read "Just Say Yes", November 2004.)
“Much of what passes for marketing these days is a waste of time and money that has nothing to do with building a good solid business,” Brodsky says. A slick brochure or presentation lacks soul in Brodsky’s view, and indicates to your customers that you are just like everyone else. Brodsky would rather have homemade marketing materials (see above) that reinforce that his business is like a family, and will treat you well. Your marketing collateral should “reflect who we are, not some marketer's idea of who we should be,” he says. (For more, read "Marketing for Dummies", October 2005.)
Brodsky decided years ago that he wanted to take as much as 16 weeks of vacation a year. That meant that he had to train his employees to be autonomous and to not rely on him to get things done. So he started to prepare his company. His managers took on new responsibilities; customers got used to less face time with the owner; and outside investors saw Brodsky’s ability to step back from the business as a plus. Best of all, the entrepreneur says he was able to ponder the business’s problems with greater perspective. “It was obvious to me that I was a bigger asset to the company on my return than I had been when I left,” Brodsky says. (For more, read "Get Lost", June 2008.)