Running Meetings Effectively

A recurring problem that many people have is running meetings effectively – that is, where the meetings in hindsight are not deemed a waste of time – for any of the participants. This can be quite problematic, as different people coming to a meeting will often have different objectives, and reaching everyone’s objective in a single meeting can seem to be an impossible task.

However, clearly some people manage to run meetings effectively, or at least in such a way that people leave those meetings with a sense of accomplishment. The tricks include some of the points below:

  1. Make sure the right people are invited to the meeting – that is, every person who needs to be there is present, and those who do not need to be there are not invited. It’s not an insult – it’s about respecting everyone’s time and energy.
  2. Have an agenda, and stick to it – if you want to accomplish something at a meeting, make sure everyone knows what it is you’re trying to accomplish, and stay on topic. If other items come up during the meeting, put them aside and deal with them later.
  3. Keep it short, ideally no longer than 45 minutes – after about 45 minutes, people’s attention begins to wander. If it seems likely that the meeting will last longer, break it into multiple shorter meetings, perhaps with fewer people at each meeting.
  4. Avoid touching base meetings – this can be handled more effectively via email, and does not really serve any useful purpose other than to take people away from doing productive work.

If you have a suggestion or idea about how to keep meetings on track, I’d love to hear from you in the comments!

Mistake of the New Office

I’ve written about having professional offices on several occasions, but I’ve also learned that poor choices in office planning can undermine a business, potentially for years. There are several aspects to the risks inherent in renting new offices, and I will attempt to address each of them in turn. At the end of the day, only you, the owner of an expanding business, can fairly assess whether the move is right.

The first issue is in regard to cashflow. Renting an office for the first time can be a surprise in terms of what is, and isn’t, included with the rent. The little fees that aren’t mentioned can often be the same fees causing the largest issues. Is your internet access fast enough? What about coffee for the office? How about furniture? What maintenance fees will you have to pay?

A good rule of thumb is to have 6 months worth of rent stockpiled before signing the lease – over and above the deposit you’ll have to make. It may take you that long before your business is breaking even with the new and increased cost.

The second issue is in regard to the amount of space rented. It isn’t good to move your business too often, so you need to plan for expansion. At the same time, that extra space will cost, and isn’t earning the business any money, and so should be kept to a minimum.

One strategy to deal with this issue is to find an office in a building with a fair number of vacancies, where larger or additional rooms can be rented when the time is right. With careful selection, you may even be able to find buildings that include some shared resources such as meeting rooms, which help to reduce your costs (though the rent at such offices is likely to be higher as a direct result of this).

Last, there’s the issue with a bailout plan. Offices will often request a multi-year lease – something startups should be reluctant to sign. As there are two scenarios that could result in you wanting to break the lease (enormous expansion or spectacular collapse), try to avoid signing for two years if possible. However, bear in mind that with shorter leases, the amount of negotiating you can do on the details will be extremely limited.

A Matter of Trust

In studying the business applications of being a personal trainer, there was a comment that piqued my interest:

Within 6 to 9 months of becoming certified, if you are not getting 75% of new clients via referrals, you’re doing something wrong.

This is particularly interesting to those in service-based industries. Getting new clients is generally extremely lucrative, and many businesses would be prepared to pay hefty fees to bring in new clients. However, the vast majority of their new clients don’t have any costs associated with them.

Word of mouth is the best way to draw in new business, and there is no reason why any business owner need have any difficulty in this manner. Treat your clients well, and they will, in turn, pass your name along to their associates. Establish trust with people, and they will reciprocate over time.

Additionally, there is no reason not to try to use this method of bringing in new business. You should be treating your clients well, because in service-based industries, that is precisely what you are being paid to do. While this may not be true for every client, treating them well in general will see your clients treat you well – with respect, courtesy, and understanding as you may need it.

For example, I try to be generous with my referrals – but only in terms of whom I will give a referral to. That is, if you ask me if I know someone who can fill a particular role, I would be happy to provide such a recommendation – if I know and trust someone who can fill that role. Getting onto my list of people I refer, however, is much more difficult, as competency and courtesy must be established before I will consider giving the referral.

Over time, this has benefited me, and so most of what I’m doing could be considered selfish. As a result of the dozens of referrals I’ve given out, I have in turn been referred a few times, but every time that has happened, the value of that one referral has shown that it is worth considering others. No, I don’t demand, expect, or even hope for reciprocity every time I give someone a referral. But I know that by doing so, somewhere down the line, a referral will arrive.

I’ve been consulting for several years. As of right now, I have only one client who was not the result of a referral. That’s how service-based businesses work – I provide one client with a service, he mentions my name to his friend, who in turn becomes a client. She mentions me to a colleague, who also becomes a client. I earn each referral (or at least, I try to) by providing that client with the best service I can.

At the end of the day, this is all a matter of trust.

Question: How do you cope with failure?

No matter who you are, at some point, you will encounter failure of some sort. It could be a major event in your life or a tiny insignificant occurrence that barely registers. Regardless, failure will have occurred, and you must deal with it.

Naturally, the way in which people deal with failure is somewhat dependent on the nature of the event. However, some people are in general better able to cope with failure, and everyone can learn from them.

The question of the week is simple: how do you cope with failure, whether significant or otherwise?

Assessing Competency

Last week, the question dealt with interviews, and in particular, how you assess the competency of a candidate. Chemistry, or how the candidate will fit in with the corporate culture, is in some respects easier to assess. After all, you can describe the culture, assess for a personality clash, have the candidate meet the team.

Some will venture to say that qualifications, that is, the degrees and certificates a candidate presents, can be used to assess their abilities. Unfortunately, in reality, this doesn’t really work very well.

First, unless you have knowledge of the particular institution issuing the degree or certificate, you cannot assess how well the curriculum of that degree matches the needs of your business. Additionally, unless you request transcripts, you have no way of knowing whether the candidate finished at the top of their class or the bottom – which could be a significant spread.

Second, most jobs entail real-life experience, something which few degrees provide. As such, the work experience of a candidate has more relevancy than which university they attended, and what grade they received in a particular course.

Looking at work experience has similar problems. While the candidate can describe their role in order to appear to be a good fit, the reality of what they did at past jobs may have little resemblance to the verbose descriptions provided in the interview. Stories about events at past jobs may have been minor parts of the role – if they happened to the candidate at all.

As such, the interviewing company must resort to more practical assessments of skill. There are a few ways to accomplish this.

The first way is via a portfolio, in which the candidate is asked to provide samples of their work. The company must make it clear that the work is being requested purely for assessment purposes, and should NEVER use the work without the permission of the candidate.

However, not every job can be assessed via a portfolio. In some cases, more specific samples are needed.

The company can request a particular sample. For example, a salesman might be asked to prepare a sales pitch on a particular product, and present it during the interview. If the preparation of such a pitch is not expected to take too much time (and this is relative to the position being filled), such a mechanism can provide a very accurate assessment of skill.

Last, the company can attempt a test, but with caution. The test questions should be designed such that it’s not so much the correct answers as a way of thinking that is being measured. For example, a candidate could be given a problem to which there are many known solutions, and the assessment is not whether or not the candidate knows a particular answer, but how they approach the problem. This can be used to assess the candidate’s problem solving skills.

Investing with a Social Conscience

Barb Stegemann appeared on CBC earlier this week, showing that smart business can go along with social responsibility. Presenting herself as a savvy entrepreneur, she demonstrated that good business sense can also better the world we live in – and make a lot of money along the way.

The 7 Virtues based out of Halifax is a perfume manufacturer, with a twist. Rather than look for easy sources of flower extracts to form the basis of the perfumes, Barb targeted Afghanistan, where the orange nectar needed for the perfume could provide an alternative to the other cash crop in the region – poppies. Paying competitive prices for the nectar (the estimated cost of a liter of nectar is $8,000), she gave farmers a lucrative, legal option for their fields. Additionally, this source of legal funds would result in hundreds of jobs, creating a boost to the regional economy.

To some degree, Barb was overpaying for the supplies – with the caveat that it provided her with a good marketing line for the business, which would make it even easier to sell her product. Additionally, with the high margins perfumes are able to manage, Barb had some room for flexibility in her purchasing prices.

As her presentation proceeded, Barb demonstrated her business acumen – she managed to break even within her first month of operations, and was unable to keep up with demand. While social conscience played a role in her business, Barb was quite clear: The 7 Virtues was not a charity.

Running a business based on social responsibility can have many benefits, and it does not need to be mutually exclusive with being profitable. With the right person in charge, the business can end like Barb’s – with an investment from Arlene Dickinson, Brett Wilson, and Jim Treliving.

Early Failure Can Impact a Career

A concern arose on one of the various question sites I frequent – a manager was hired on contract to supervise a project, which was cancelled a short time later. As a result, the contract was terminated. Normally, this would be percieved as a standard part of business as a consultant – except for this particular manager. It was his first job.

The manager was concerned that this would appear as a stain on a clean resume, perhaps having a negative impact on his ability to market himself effectively. However, perhaps this early failure could turn out to be of benefit, when properly presented.

Everything in life is about the spin, or the angle. In any situation, the question is not whether there is bias, but rather, how that bias is being presented, and to what ends. Sometimes, the creation of the bias itself is subject to analysis, showing the thought processes of the presenter.

The manager, seeking to put a positive spin on the situation, can choose to reflect on what was accomplished prior to the conclusion of the contract. Additionally, he can look at the reasons for the project being cancelled, and learn how to detect such issues early in the project lifecycle. He can apply those lessons learned to future projects, but, perhaps more relevant, he can explain all this as a lesson learned in the school of hard knocks.

When presented with a situation in which the outcome was not the hoped for success, that’s not the same as a failure, unless you choose to present it that way. Every situation has bias, and you can choose to bias the situation to be described as an alternative successful outcome, rather than a failure.

Knowledge and Experience

I participated this week in a chat regarding the difference between knowledge and experience, and, more specifically, whether or not formal education is worth the price paid. Living in Canada, the price of an undergraduate degree is about $25,000 which is significantly lower than in the US. As a result, the length of time required to pay off any student loan here is much shorter than in the US, and the value of a degree may not be exactly in line.

I reflected on my own degree, and the experiences I had during university. I changed my majors several times over the course of 5 years, taking a fairly diverse selection of courses both within and outside my selected area of study. Yes, I had a social life, but I also had an academic life. Additionally, most summers I worked in one of the laboratories on campus.

Following my graduation, I spent several months looking for full time work, eventually taking a job at a large insurance company, where I remained for over 3 years. From there, I moved to consulting work, which I have been doing ever since,

I learned very different things on the job from what I learned in the classroom, and I don’t think either one could stand on it’s own. Sure, you don’t need formal education to succeed in life, but for most, it will help define paths. Likewise, without work experience, there is too much of a focus on the theoretical, which does not always reflect reality.

The ideal scenario is to have both, which is, perhaps, why co-op programs are so popular. However, this could be taken even further, with companies working together with universities to provide real world examples to be used in courses as projects and assignments. Some courses already Integrate guest speakers into the teaching schedule, which is great, but there is no replacement for hands on training.

If your company has been having a hard time finding qualified hires fresh out of university, you may want to approach the universities to work with them to better prepare their students for the real world. If you do so, then everyone wins as the students end up with a more practical education, and the businesses end up with a selection of prospects for employment who have been properly trained to work in the real world.

The Founder’s Exit Strategy

As a founder of a business, you likely are not thinking about leaving the business, at least in the early stages of the business development. However, if you’ve ever entertained the thought of seeking investment dollars, an exit strategy ought to place itself high on your list of priorities.

There are, fortunately, only a few basic strategies for the longevity of a business and the role the founders play in it. The business can be profitable, earning a nice income for the founders, perhaps generating some dividends. Alternatively, it can be targeted in an acquisition, allowing the owners of the business to sell their interests in the business. Or, in what many investors will deem the best scenario, it can go public with an IPO to raise more capital, but also allowing the owners to capitalize on their stakes in the company.

All three scenarios have variations, but they form the basics. Each attracts a different type of investor, and any business owner looking for an investment should have their strategy in mind when attempting to raise capital.

Investors will need to share the exit strategy of the owners, assuming the investment itself is not the exit strategy. As such, an unclear exit strategy coming from the founders breeds some doubt as to whether or not the business has been thought through to its logical or desired conclusion.

Some investors want to find dividend generating businesses to invest in, which provide lower risk on their investment, and while perhaps not as lucrative as an IPO, are also easier to manage, and to divest themselves of since the stakes are often lower.

Others hope for an acquisition, seeking to flip the business over a few years, after helping it grow to another level. The risk is a little higher, but the business will likely still be profitable (otherwise who would want to buy it?) and can still provide some short term gains.

Last, some investors are always looking to hit homeruns. They aren’t interested in the short-term gains, but the potential for a huge gain over the course of their investment as the business goes public and raises billions in capital.

If you approach an investor looking for a homerun with a business that will generate ongoing dividend returns, or one that is aiming to be acquired by an investor who wants to be in the business for many years, the nature of the business, the management team, the market outlook – none will matter since you’re targeting the wrong person.