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Monthly Archives: February 2016
Why Great Leaders Value Reputation Before Revenue
How to Put Principles Into Practice
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In 1996, I walked away from my first million-dollar client. Anyone looking at my company’s profit and loss statements would have questioned my sanity.
We were less than a year old at the time, and this was by far our highest-profile customer. I made this seemingly crazy decision because I value my company’s reputation over its revenue.
Making Business Decisions
Many leaders rely on Excel spreadsheets to drive their decision-making. They think something is only worth doing if the numbers add up and the price is right. My company, on the other hand, uses a set of five core principles to gauge every business decision it makes:
- Employees come first, always.
- Work as a team; win as a team.
- Reputation comes before revenue.
- Commit to safety.
- Make it happen!
Our big client didn’t share any of these values with us. Further, he was overly harsh with my team members and set unrealistic expectations. Our weekly status meetings with him became sources of dread because it didn’t matter how well the previous week went; it was never good enough.
The entire office’s morale suffered, and I had to make a decision:
Do I put my principles first, or do I put my revenue first?
I quickly realized that if I put revenue first, there didn’t seem to be much of a point in having principles. If I sacrificed our core values in the name of profit, how could my team ever respect me or our values again?
The decision became easy — we walked away.
Money is Fleeting. Reputation is Forever
As leaders, we’re often tempted to compromise things — be it ethics, principles, or happiness — to maximize short-term profits. While compromise might immediately boost our portfolios, it doesn’t necessarily help build our reputations.
I’d argue that a company’s reputation is all that really matters, and having a good one is the only way to ensure long-term success. It’s the reason my company has so many great clients today, and it’s the reason they constantly refer new business to us.
This is a philosophy that was instilled in me during my youth in the Midwest. We had a folksier way to sum it up, though:
Pigs get fat, and hogs get slaughtered.”
Everyone has a right to a living, but greed yields guaranteed downfalls — and I’m not interested in being a hog.
Staying on Course
The benefits of this approach aren’t just lasting. By removing immediate profits as sole drivers of business decisions, you’ll no longer be tempted to veer your company off course to accommodate difficult clients with deep pockets. This will solidify your brand as a stable, upstanding, and moral institution — and that reputation alone will drive your growth today and tomorrow.
The great corporate scandals of the world (think Enron) typically involve companies that value short-term revenues over all other considerations. And what does that earn them? Bankruptcy, bad press, and prison time.
Putting Principles Into Practice
Having personal principles is one thing, but having company-wide shared principles that guide every level of decision-making — from the corner office to the reception desk — is something that requires practice, patience, and communication.
Here are a few tips to help you instill this reputation-centric mindset into your company:
- Provide mentorship and coaching. Look for opportunities to mentor, coach, and train your employees to make sure they have clear understandings of your company’s core values. Show them what it looks like, and feels like, to do the best quality work in your industry while maximizing your company’s reputation.
- Ask great questions. There’s a management style called “inspect what you expect” that involves asking your employees quality questions to ensure the things you want completed are, in fact, being completed. It’s a low-impact form of oversight that’s more trusting and less stressful than full-on micromanagement — and it will help you determine what’s going on outside the walls of your office.
- Align expectations. Meet with every employee and client to make sure they understand what your company is all about and how you got to where you are. Also provide them with a list of your core values, as well as specific examples of those values in action. This will give everyone a clear understanding of what to expect, and it will also show employees how to exceed expectations.
- Make happiness your success metric. Don’t look at your bottom line to assess whether your company had a good year. Instead, look at the quality of your work, the happiness of your employees, the contentment of your clients, and the state of your recurring
Don’t let that one difficult, deep-pocketed client turn your business into something it isn’t. If you stay true to the values near and dear to your heart, the right clients will find you.
So, do you have a client or supplier that has dramatically different values than your organization? If so, would you give them up despite the cost to save your reputation? How important is your reputation you? I would love to hear your thoughts!
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Steve Randazzo is the founder and president of Pro Motion Inc
He builds deep emotional connections with consumers to create lifelong relationships
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On Leadership, Threats and Operational Security
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A few years ago, a small business in San Diego was hit my malicious cyber attacks over the internet that were launched from local IP addresses.
As they were protected as much as they felt they could be, they contacted the national carrier to deal with the denial-of-service component of the problem.
Too Small to Service
After going through several levels of management, the answer that they heard was that the carrier gets about 10 million threats per day on their network and it is pretty difficult to assume that they would be given some kind of priority as a small business to have your problem explored.
Understanding that type of threat, which was simply a script being run through several zombie computers, can escalate to actual specialists trying to actively access your Internet information was enough to drive the owners towards looking at specialized business insurance that could keep them safe from liability.
What is Cyber Insurance?
The most common way for small businesses to get protection is to first ensure that they have an industry security compliance on their cloud presence and to ensure they use the right cyber security solutions like the use of a SWG. After they have done so, they can look at cyber insurance. Cyber insurance is a form of insurance that covers almost any type of business attack from hacking to data breaches.
If you lose a client’s data or valuable data of your own, you can recover some of your losses or offset the liability with an insurance claim. Some forms of coverage also cover the loss of work time due to denial of service attacks.
Small companies are fortunate that almost 90 percent of the policies that are available provide coverage to companies inside the United States. Another nice feature is that the bulk of the policies can be priced by getting insurance quotes online.
Preparing to Get a Policy
As mentioned, upgrading or validating that you have industry standard security compliance is an important part of qualifying for cyber insurance. If you have an online e-commerce site, you should have encryption, a good hosting provider, and potentially a third-party service that verifies your site security.
The cost of preparing for cyber insurance can be a consideration for small businesses, so if you are just starting you might consider talking to cyber insurance representatives about the requirements that they have so that you can focus on meeting their criteria.
Another area that comes into play is knowing the type of coverage that you think you will need. If you store client credit cards online in a database, you will likely focus on a different type of coverage than if you are a company that uses a third-party payment processor’s site to process transactions for published material that carries copyrights.
Are They Really Out There?
A lot of smaller companies have not formerly had too many problems that they know of when it comes to the information that they keep online. Two trends are changing that picture. The first trend is one that has more businesses relying exclusively on computing in the cloud.
The second is that security researchers are finding pieces of data from every size company imaginable online in what is known as the Internet ‘dark’, or an area that people use to store information that may be for sale. Gone are the days when hackers were exclusively interested in finding ways to beat security or promoting a cause. With billions of people online, the focus has shifted to money and information.
New Operational Threats
As far as attacks are concerned, in addition to outright hacking and employee theft, there are a couple other types of attack that are growing in popularity.
- One is stealing the anonymity from people and putting together a trail of behavior that can be used as business intelligence.
- The other is creating boiler rooms that are information clearinghouses of stolen data that goes on the market to whichever organization or person that will pay for it.
The net result for small businesses is a competitive disadvantage for their online offerings unless they have adequate security- and potentially some insurance protection in place. For the small business owner who hasn’t recently checked their security arrangements, 2016 is a great time to start looking at turning a disadvantage into a sales advantage by validating the notion that your client and internal data is secure.
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Robert Cordray is a freelance writer with over 20 years of business experience
He does the occasional business consult to help increase employee morale
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On Leadership, Communication and the Personal Touch
Why Leaders Still Needs the Personal Touch In Today's Digital World
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Digital channels like email, instant messaging, social media, and video conferencing can make communication within a business a lot easier easier.
It can allow leaders and teams to keep in touch with the office even if you are on the other side of the world.
However, it is important to realise that these methods cannot completely replace face-to-face conversation.
The Power of Person
Indeed, speaking to someone directly offers several benefits that cannot be recreated digitally. Personal communication remains the best method for delivering crucial information. If you need to get an important point across, inspire your workforce, handle a sensitive issue, or move people to action, face-to-face remains the best way to effective communicate.
This is why leadership training should still contain a strong direct communication element.
This article looks at some of the reasons why a good leader in the digital world still needs the personal touch.
The Personal Touch
Personal Relationships
Despite the obvious convenience aspect of modern digital communication methods, a significant part of leadership involves forming personal relationships with the people you are leading.
This is much easier to do when you are in the same room as them, talking to them directly.
Furthermore, direct conversations allow you to give people your undivided attention. If you are on a video call, or using an online messaging system, you may become distracted by an email or by having multiple communication channels open at once.
Talking to someone on a one-to-one basis lets them know that you value them enough to drop everything else and allows more authentic, individual connections to form.
The importance of forming meaningful connections with your employees is often emphasised in management skills training and it is significantly more difficult, if not impossible, to do that through an electronic device.
Clarity and Nuance
One of the primary advantages of digital communication is said to be speed. And indeed, when it comes to simply getting a message to someone else, it can be extremely quick. However, that speed can be counter-balanced by a lack of clarity, ultimately making it less efficient than face-to-face conversation.
Mina Chang, CEO of Linking The World explains it this way:
It’s easy to misinterpret a text or email. For sensitive or otherwise important communication, having tone and body language for context makes a difference.”
Research shows that effective communication relies on non-verbal cues. Generally, digital communication removes these, along with nuance, increasing the chance of misinterpretation. Tone, for instance, cannot be conveyed through email or text messaging, while even video communication impacts upon the ability to read body language.
Sensitivity
Throughout their leadership career, people will encounter a number of serious or sensitive issues, which need to be dealt with carefully. For example, they may need to address an employee’s personal appearance, deal with a complaint about workplace bullying, or give a staff member a strong verbal warning about their conduct.
Dealing with such issues face-to-face demonstrates your personal commitment to reaching the best possible outcome. It helps to foster a greater level of trust between you and the employee in question and it is the best way to ensure that their dignity is preserved and your message is clear.
Reactions and Feedback
Finally, leadership often relies upon feedback and the ability to gauge reactions accurately, which can be done more easily through direct communication. You may notice hesitations or changes in facial expressions, which can act as a cue for you to develop points further or ask for opinions.
This ability is inevitably lost through digital communication channels.
Employees like to feel as though they are valued and their contributions to discussions matter. Once again, it is easier for them to make contributions during face-to-face conversations, which allow for interruptions or deviations.
Moreover, people pay closer attention and participate more actively in conversations if the person they are speaking to is actually present. This is partly because they are also aware that that person can pick up on their reactions.
So, what can you do to make your communications more effective by making them more personal? How can you create environments that make it easier for all team members to communicate confidently with personal tones and calm body language? What steps can you take to evaluate how you come across to others? I would love to hear your thoughts!
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Learn, Grow & Develop Other Leaders™
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Alison Brattle is a marketing manager at Uk Based Company AchieveGlobal
She specialises in providing Exceptional Leadership Management Courses
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