3 Takeaways for Business Owners in Light of the Federal Interest Rate Hikes

“We don’t like their sound, and guitar music is on the way out” was the reported response of a major record label executive in 1962 to a demo he listened to from some up-and-coming rock and rollers. He was wrong on two counts: Rock and roll has obviously lived on. And the group which he referred to? The Beatles.

That’s a good reminder for today’s business owners: Relying on your “instincts” to determine your growth strategy is risky. Even though some business leaders like Apple’s Steve Jobs and Virgin’s Richard Branson are recognized for their belief in soft factors (Branson even reportedly said, “I rely far more on gut instinct than researching huge amounts of statistics”), small businesses don’t have the luxury of a corporate cushion to protect them from bad instincts.

 Instead, monitoring key predictors, like federal interest-rate hikes, as opposed to relying on instincts, provides a far better road map for the future. According to the latest quarterly Private Capital Access (PCA) Index report from Dun & Bradstreet and our research team at Pepperdine University’s Graziadio School of Business and Management, the December 2016 federal interest rate hike did adversely affect businesses’ operations.

Mid-sized businesses reported both a decline in profitability — down six percentage points from the previous quarter — and an inability to hire new employees due to the higher interest-rate environment. Profitability was down six points in the first quarter of 2017, versus the last quarter of 2016.

Given that additional rate increases are anticipated for this year, small business owners must keep the potential impact of rate hikes in mind as they consider hiring and expanding over the next year. Specifically, here are three operational principles to follow, to maintain stable, profitable operations:

1. Base operational decisions on contracts that are signed, not those that are anticipated.

This year, we witnessed an increase in reports from businessess that the current financing environment is restricting their ability to hire new employees, and an increase in the percentage of small businesses anticipating that they will seek financing in the next six months for “working capital fluctuations,” compared to small businesses in 2016.

That’s almost certainly a result of rate hikes, which can impact the ability of businesses to borrow capital to maintain facilities, hire employees and expand operations.

Rather than obtaining financing to hire new employees until new business is firmly locked down, consider incentivizing employees to put in additional work, or using temporary contract labor. That may bridge the gap and allow you to avoid having to obtain financing.

2. Monitor economic growth to ascertain likely timing for future rate increases.

We found that fewer mid-sized businesses were able to qualify for credit in early 2017, compared to late 2016. It’s likely that slower-than-expected growth in the last few months played a role in that decision, although Fed officials called the slowdown “transitory.” If business owners need to access capital for operations, they should stay abreast of developments not only in financing rates, but also national job gains and unemployment trends.

They should factor that into the likelihood of whether or not future rate increases are on the horizon (the next hike could come as soon as June).

3. Consider alternative forms of financing.

Access to loans may be more challenging as traditional lenders tighten criteria for “risky” loans to small businesses. Be careful with “cash advance” forms of financing such as factoring or merchant cash advance since they are very expensive once all the fees are considered.

Asset-based lending (ABL) can be a good option since these loans are inherently less risky for the lender and therefore will typically have a very competitive interest rate. Companies can borrow against nearly any type of tangible asset, including accounts receivable, inventory, equipment, purchase orders and real estate.

 The old adage that economic recovery starts on Wall Street and ends on Main Street is still true today, and business owners need to adjust their business strategies accordingly. Instincts are terrific, but for small businesses, there is no substitute for careful monitoring of solid economic indicators.
Original Article:www.entrepreneur.com

How to Lead When Others Are Hesitant to Follow

Job titles, gold lettering on doorways and spiffy business cards just don’t cut it: When a new CEO arrives at a company, that spiffy new job title alone won’t garner him or her that hoped-for respect.

The Dale Carnegie Employee Engagement Study suggested as much, noting that 70 percent of workers in its survey said they didn’t click with new leaders whom they lacked confidence in.

In other words, new CEOs have the unenviable task of proving their worth to their employees, especially if they follow on the heels of a beloved founder. Just saying that, “There’s a new sheriff in town” doesn’t give mployees a sense of comfort. They want proof that their town is safe. If they don’t get that proof, their new CEO will lose their faith before pinning on his or her I.D. badge.

A crisis of faith

One example of a high-profile CEO transition struggle was the recent attempt at Ralph Lauren to modernize the brand.

Stefan Larsson was the new guy, assuning the role vacated by the empire’s founder and namesake, but his was a match that lasted only 15 months. Why? Blame a disconnect between the founder and new CEO: In this case, the disconnect was how best to restore the street cred the company had once had and to translate it into the current market.

Such disagreements between these two parties can happen, especially if their respective visions don’t align or their strengths don’t complement each other’s.

Absent a founder’s blessing, in fact, no CEO can start on solid footing. And the occurrence of in-fighting and friction won’t go unnoticed by employees, who will end up taking sides. It’s a dire situation for any organization, one that stops productivity, growth and profitability in its tracks.

Of course, sometimes it’s not just the founder-CEO connection that’s flawed. Many new CEOs hit the ground running, but forget to communicate openly and frequently with their teams. In other words, CEOs who don’t ingratiate themselves to staff and aren’t bolstered by the business’s founder risk losing loyalty — from everyone.

Win the people, win your freedom.

What happens when the announcement of the new CEO occurs? Is the event one that’s morale-inducing or one that’s soul-killing? If you’re one of these new CEOs, here’s how to keep your head and win employee buy-in immediately:

1. Open your book. During any transition, the troops grow restless and appreciate transparency. When the transition includes a new CEO coming in the door, make communication your top priority.

Brad Rencher learned this lesson when he ascended to a C-suite position at Adobe. When he got there, he quickly realized he wasn’t gaining momentum with employees. but, Bradchat, Rencher’s weekly blog, changed that. The series allowed him to use technology to start meaningful dialogues with others in the organization.

2. Buddy up with influencers. Every company has key people. As CEO, make a point to find, meet and make inroads with as many of those influencers as possible. Without this kind of grassroots process, you’ll be off to a rocky start.

Hewlett-Packard’s Meg Whitman believed in getting executives out from behind their desks and into the rank and file. So, she moved higher-ups’ desk spaces to cubicles and allowed them to naturally co-mingle with staff; this showed employees that they had their leadership’s backing and gave them access to those staff at any time.

3. Audit your environment. Get the corporate culture right, and you’ll fit in; get it wrong, and you’ll look out of place every single day.

It all begins with what you wear — really. If you’re a CEO at a casual company, ditch the Brooks Brothers double-breasted seersucker. Proper imaging will help you gain internal advocates and send the positive message that you understand and appreciate the work culture.

We’ve worked with several startups that have ended up experiencing CEO transitions as they began to scale. The most successful transitions we have seen occur when the incoming CEO takes the time to understand not only the vision of the founders, but also the culture those founders built.

Another example is Belfor CEO Sheldon Yellen. After an employee called him “intimidating,” he decided to never to wear suits and ties again on the job. Though wardrobe may seem like a small change, getting on the same level as your employees can be just the thing to get them on board the bandwagon.

4. Go easy on the gas. Use a measured, methodical approach when implementing change. Don’t be like the 50 percent of businesses (surveyed by Heidrick & Struggles and Stanford’s Rock Center for Corporate Governance) that indicated they lacked blueprints for a CEO transition period.

New leadership is vital to a company’s success, but that doesn’t mean that you, the new CEO, should make improvements and snap decisions on an hourly basis. Even presidential candidates have transition teams to help them implement positive change at a steady, acceptable pace that doesn’t scare employees.

Is the introduction of a new CEO a challenge even when the founder is actively involved? Absolutely. But no one said that having the corner office would be a golden-parachute-styled cake walk. So, focus on leading your team into the future. If you establish the right amount of trust up-front, and display confidence and compassion, even the most tentative employees will follow.

Original Article:www.entrepreneur.com

The NBA’s Marketing Superstar

If you found yourself near Atlanta’s Philip’s Arena in early January 2015, you likely would have seen crowds of people, dressed up (by basketball game standards), pouring into the stadium, staring at their phones.

They were all on Tinder.

Yep, Tinder. As a wildly unorthodox — but no doubt genius — marketing exercise, the NBA’s Atlanta Hawks hosted its first “Swipe Right Night,” inviting Tinder users to meet up at the game. The event was such a success that they did it again in March 2016; participants shared photos on social media and the event made news nationwide.

 Behind this idea and many other innovative, out-of-the-box marketing strategies was Melissa Proctor, CMO for the Hawks. Proctor and her marketing team have employed fresh thinking to attract the attention of the Atlanta public and it has paid off. In August, the Hawks released its schedule on Twitter using only emojis.

Proctor’s creative thinking has resulted in increased excitement around the Hawks. I sat down with her between strategy sessions and speaking engagements (her next appearance will be at business conference NextCon) to discuss how she determines her target audience and the best advice she’s received.

With so many NBA teams vying for fans and ticket sales, how do you compete?

In my mind, when others zig, we zag. I don’t really think of other teams as our only competition. Our competition is anything that can entertain you, which could be a Netflix show, the nearest restaurant, a fashion show — basically anything happening within Atlanta is competition from an entertainment standpoint. We are selling entertainment. We don’t just look at the world of sports.

Who is your target audience and how do you reach them?

Next-generation Atlantans are our target audience. Atlanta is an interesting place because we experienced a major population boom after the 1996 Olympics (population soared from 3.5 million in the mid-90s to 5.5 million today). A lot of people settled here from places like Boston and New York — people who already had allegiances to the Celtics or Knicks. We can’t change those allegiances, but we can be the team for the children of those residents. That is our goal.

We’ve taken this really seriously and done things like design our jerseys to be the coolest jerseys when those kids play the NBA 2K17 video game. Everything we do is through the filter of attracting that audience.

What are some of the biggest challenges facing sports marketing these days?

Across the board, teams are looking to create deeper fan engagement. They are focusing more on mobile and how to integrate that experience with fans in the arena and at home. I’ve heard about teams considering virtual reality opportunities for fans to help build brand loyalty. Content is also huge right now. Players are becoming their own brands and publishing their own content, which helps fans interact. We’ve seen that happen within music and other industries. It is now coming into the sports world, too.

What does your average day look like?

Every day is different for me, but I’d say meetings are a constant — lots of lunches, breakfasts and general networking events. Marketing is about collaboration and connecting with others. I have an amazing team and we have a lot of brainstorming sessions. Just yesterday we had an Oreo cookie birthday party for a team member. We try to keep it light and fun.

When I’m not in meetings, I do my best to be available and answer questions. Good ideas can come from anywhere; it isn’t the loudest voice in the room that has the power. It is about a team that can collaborate.

What is the best business advice you’ve ever received?

No one manages your career but you. A lot of people who work in corporations are looking for someone to give them their next opportunity or waiting for a job to open. Instead, create the job you want. Go into your career with an entrepreneurial mindset and watch amazing things happen.

Original Article:www.entrepreneur.com

#9 Lessons Successful Start-ups Learnt The Hard Way

We tend to think of the journey of successful start-up as a smooth sailing ship. The entrepreneurs are smart, resourceful, have the best ideas and a good team, what could go wrong? A lot!

Trouble comes to every start-up. Factors such as a bad judgment call, lack of planning or being distracted by the noise and attention — every leader has to face a storm.

Save yourself a lot of headache by learning from the mistakes these 9 start-ups learnt the hard way, early on.

1. Right Level Of Leadership

While starting a company, you tend to hire a lot of interns and entry-level people to run the company to save on money. This is the biggest mistake most entrepreneurs make. Initially, we too, hired a lot of front line employees without building the leadership team. This turned out to be a huge gap and impacted not only the decision making, but also the productivity of the employees, who were in serious need of guidance and mentorship.

Entrepreneurs should manage the pace of growth in a way they are able to build the right level of leadership to guide the company in the right direction, before it gets to a point of no return. Grow the team only at a pace where you have enough structures in place to ensure that everybody in the team is able to attain their potential.

It is crucial to ensure that the team behind a start-up is always functioning as a well-oiled engine.

— Shesh Rao Paplikar, Co-founder, BHIVE Workspace

2. Loyal Customers

There isn’t a foolproof plan to have a successful start-up from day one. In the initial days, it is easy to be enamored with the idea of ‘your’ business. Looking at the broader goal one might miss out on some crucial aspects of the business. Granted, being a new start-up, we make good choices as well as a few bad ones, but then learning from our mistakes should be the immediate step. While starting up we need to be cautious of steps that can derail us from our path to success.

Being a start-up, most of our energy goes into a) improving the product experience for customers, and b) getting new customers on board. And in the initial days, we made a mistake of not involving our best customers for both. We realized over time, that your loyal customers are always ready to take out time and put in efforts to help you improve. Additionally, they are your biggest brand ambassadors and the strongest bridge to the potential customers.

We have made involving them a regular practice now over the past quarters. Our best customers get access to early features, and are constantly giving us feedback to improve. Additionally, we are observing that referrals and recommendations from them have become our biggest channel of acquisition. We are seeing that on an average, loyal customers are now providing us with 10 times more worth than before. And all of this has happened, because we decided to reach out to them, a practice I would urge every start up to follow.

— SachinJaiswal, Cofounder, Niki.ai

3. Give Your Customers The Best Value For What They Pay

Well, there’s surely been a bunch of mistakes we’ve made along the way and learnt quickly, from them!

But if I had to pick our greatest mistake, I’d say it was something we did when we had just about started out. This was during our first year of operations, when we had opened up our hub #1 (we’re at 13 now) in Mohan estate, Delhi. This was a renovated basement space which had the capacity to seat about 100 members.

We were severely bootstrapped at that stage and this drove us to think various ‘jugaads’ to save cost. It was our first summer in Delhi, and everyone knows they can be killer. We had not planned ahead and our ‘batcave’ wasn’t equipped with AC’s. So, when the peak of summer rolled around, we decided it would be a great idea to cool the hub with water coolers.

Cheap and effective right? Wrong. They served the purpose for only a short while till it started getting humid. Even at this stage, instead of bringing in ACs, we tried our jugaads on removing the humidity, which didn’t work. Needless to say, this inconvenienced our members and disrupted operations to such an extent that fitting out AC’s was done poste-haste and the episode was quickly brushed under the rug. Until now!

Lesson learnt: Don’t. They can tell and it’ll hurt your brand value. You can’t give a sub-par product because you are bootstrapped.

Give your customers the best value for what they pay. Giving them a sub-par product because you are bootstrapped is not an option.

— Pranay Gupta, Co-founder, 91springboard

4. Filter Out Information You Receive

For me, one for the biggest mistakes was getting distracted by noise.

As an entrepreneur, you will have to filter out the information you receive from tens of sources. This can include positives like media fame, overly celebrating team members, large customer wins and fundraising, which can put you in a temporary high.

On the other hand, this can include negatives like media gossips, interest from competitor’s investors, frivolous lawsuits and tons of meeting requests from every tom, dick and harry, who are trying to make money out of you.

As you scale, the spectrum of this noise increases multi-fold and eats up a lot of your productive bandwidth. Only your own filtering skills, methods or tools can help you stay focused yet flexible enough not to miss out on anything important.

— DhruvilSanghvi, Co-founder, LogiNext

5. Establish A Set Of Values

I think a mistake LBB made was not setting a strong team & hiring culture early on. LBB misfired on some of the early hires we made, because we weren’t sure of who we wanted or what kinds of teams were the best to build our company.

Since then, we’ve learned to establish a tone for the values of our organization and only seek those who resonate with these values on our team. Although it lengthens the hiring process at times, it ensures that we have a good fit; and both employee and company learn and succeed with each other.

— DhruvMathur, Co-founder, Little Black Book

6. Believe In Your Ideas

One of the biggest learning from my mistakes during the entrepreneurial journey has been to never underestimate your own potential. Believe in your idea and your capabilities.  Move fast. And in case you fail, fail fast and fail cheap. Never work towards making the perfect product. Launch a beta, test waters, get feedback. Move towards your goal.

— SaireeChahal, Founder, Sheroes

7. Put Your Customer Before The Product

The biggest mistake we did at Zarget was to commit ourselves to a feature which we believed was the next big thing. We were simultaneously working on two features — one required less technical effort while the other one took center-stage at our production camp. We spent time and manpower on perfecting and was sure about it being a hit.
On launch, the market reaction took us by surprise! The feature we nurtured didn’t create the impact we expected while the other feature went on to become our customer’s favourite. At times, it is not about the technical brilliance of a product but how a simple solution can connect with your customers on a personal level. This insight took a back seat amidst our deliberations about the product.

We learnt it the hard way — “Always put your customer before the product!”

Arvind Parthibam, Founder, Zarget

8. Choose A Robust Payment Solution

It goes without saying that one faces many hurdles while running a start-up. Apart from the technological challenges, there are organizational and business challenges that one has to tread. Since we focused a lot on hiring the right talent initially, thankfully we did not face a lot of organizational and technical challenges.

However, we did face a business problem once we started making inroads into the market — choosing a robust payment solution. Vidooly being a SaaS company deals with customers who use its tools and dashboards through a pay as you go model which has to be recurring. That’s why, in the initial stages when we did not have the right recurring payment system in place, we faced quite a few issues in holding on to our customers. This was just an oversight for us and we rectified it after trying out some of the best online payment solutions available. I feel when someone is building a global SaaS product, it has to be taken care of in day one.

— SubratKar, Co-founder, Vidooly

9. Set ESOP Plans For Employees

The biggest mistake we made starting up was to not have an ESOP pool for future talent — something we corrected later. I think it is table stakes to have a large and attractive ESOP pool for present and future employees so you can attract the right kind of talent

Original Article:www.entrepreneur.com

Learn How to Be an Effective Leader from King Henry VIII Himself

United. Uber. Wells Fargo. CEOs of well-known brands are constantly under a microscope—every mistake or fault criticized, analyzed, and publicized.

  • After a passenger was forcibly removed from his seat and dragged off a plane, the United CEO’s initial response (“I apologize for having to re-accommodate these customers…”) was widely seen as callous and tone-deaf.
  • Uber’s CEO was caught on video berating one of his own drivers after the driver told him that Uber’s changing prices were hurting his business.
  • Rather than acknowledge a systemic problem, Wells Fargo CEO blamed rogue employees for creating fake accounts in customers’ names.

We’re in the midst of a leadership crisis. According to the 2016 Ketchum Leadership Communication Monitor: just 23 percent of people believe leaders are effective, while 65 percent say they’ve purchased less from a company due to negative leadership behavior. In essence, poor leadership hurts the bottom line. And these numbers show it’s not just the scandal-ridden companies that feel the pain. We’re all caught in their shadow.

For an admittedly out-of-left-field take on the subject, I asked for some insight from an expert on one of history’s most famous morally questionable partnerships: England’s King Henry VIII and his No. 2 (at least until Henry had him killed), Thomas Cromwell.

Janet Wertman is a lawyer, a development consultant for nonprofits, and an author of historical fiction. Her book, “Jane the Quene” is the story of Henry VIII’s rejection of Anne Boleyn to marry Jane Seymour, and Jane’s short time on the throne. It’s also the story of the Tudor court, where office politics had lethal consequences. The following is a brief discussion I had with regarding ethical leadership in a historical context.

Glenn Llopis (GL): Put the story [of King Henry VIII and Thomas Cromwell] in context for those of us not familiar with it.

Janet Wertman (JW):  Thomas Cromwell was the son of a blacksmith and rose to become Chief Minister to England’s King Henry VIII. Cromwell was methodical, calculating and brilliant. He was an accountant: understanding the financial aspects of the realm was the source of much of his power.

He’s considered a villain because he manufactured the charges that led to Anne Boleyn’s execution. But by his own standards, he considered himself moral: true to himself and true to his goals. He was a reformist, dedicated to creating and protecting the new Church of England.

GL: Is there anything leaders today can learn from Cromwell?

JW: First, diversity of thought leads to new ideas.

Cromwell was a commoner. He was also a religious reformist. These two factors gave him a different viewpoint from other leaders of the day. Henry VIII needed a son: after 20 years with his first wife, he had only a daughter. Cromwell first rose to power because he was the one who figured out how to get Henry divorced. For seven years, Henry’s advisors tried to convince the Pope to let Henry divorce his first wife. Cromwell created the Church of England to make the Pope’s opinion irrelevant. Then he solidified his power when Henry needed money, by dissolving the monastic houses and claiming that wealth for the crown.

Second lesson: when it comes to your boss or your business partners, choose well. Every job requires you to fall on your sword a bit to protect your boss. Corporate lawyers experience this in almost every negotiation, taking the blame for their clients’ “unreasonable” positions. That was Cromwell – blamed for everything even when much of it stemmed from Henry. Consider what kind of leader you follow. Cromwell chose someone evil and ended up doing evil things.

GL: These recent scandals [cited above] were made much worse by poor leadership communication. Are there any lessons there from the Cromwell/Henry VIII partnership?

JW: Both were masters of public perception.

Henry cloaked his actions in altruism. If you asked him, he would say that he left Catherine because he needed a son (not because he had fallen in love with Anne Boleyn); he closed the abbeys because of the corruption (not because he would gain the wealth); he left Anne because she had committed treason (not because he was tired of her). That didn’t always fool the people around him – but it was more convincing from afar.

Cromwell’s strategies satisfied the King’s desires without appearing to offend the morality of the day. He went to great lengths to keep to the letter of the law with Anne’s execution – even giving her a trial presided over by her uncle – so that no one would notice it was a house of cards.

Obviously, these are not virtuous qualities to aspire to. But to your point about our current scandals, perception matters.

That’s the perfect note to end on, because it brings us to what we need more of from leaders: authenticity. I’m actually encouraged by how loudly we make our voices heard today when we see the opposite from our leaders.

Keep demanding authenticity and the courage that goes with it.

Original Article:www.entrepreneur.com

The Marketing Power of Secure Payments

Secure payments serve a functional purpose in your business, but they can also serve double duty as a marketing benefit — particularly now that so many customers have experienced card fraud or security breaches.

Here are a few ideas on how you can incorporate the fact that you offer secure payments into your marketing campaigns

Prove that you understand their concerns.

More than 40 percent of consumers surveyed by Auriemma Consulting Group (ACG) reported having personally experienced some form of credit card fraud — and nearly half of them had fallen victim to it on more than one occasion. Your payment security isn’t just a value-added benefit to consumers who have experienced fraud; it’s a solution to a problem that they have experienced. Your business’s willingness to invest in payment security and make it a priority ensures that customers who buy from you can trust that their information will be kept safe.

Incorporate messages into your marketing campaigns that overtly express that your business knows the challenges customers who have been victims of credit card experienced. Speak to the fear, frustration and vulnerability they may have felt, as well as the time and money they had to invest into managing the extent of the fraud. When you humanize payment security, your marketing campaigns can communicate that you truly care about taking care of your customers. Tell customers that you are empathetic to the concerns they have regarding data security, and that you made the business decision to intentionally invest in the payment security solutions to protect them.

Leverage customer perception of small business security.

Though a host of major retailers, corporations and government agencies have fallen victim to data breaches that compromised customers’ financial and personal information over the past few years, customers may expect that a small business isn’t as equipped to offer payment security as a large company with deep pockets. (For some small businesses, this perception may be correct: One IBM survey indicated that only 30 percent of small businesses provide security training to their staffs, compared to 58 percent of larger companies). Your business has the opportunity to leverage payment security as a point of differentiation in your marketing campaigns compared both to other small businesses and larger competitors.

Increase the perceived value of your offering.

Some consumer behavior studies indicate that customers are less price sensitive when they perceive that a business offers enhanced convenience in some way, shape or form.  Use marketing messaging that remind customers that the costs of credit card fraud aren’t just monetary in nature; consumers can spend several hours of their lives dealing with the aftermath of credit card fraud for years after the fact, particularly if card fraud requires them to file a police report, place a freeze on their credit reports and notify payees of changes to the card information.

Outline the many tangible and intangible benefits that payment security offers to customer convenience in your marketing messages. You may also want to remind them that payment security remains a very real concern if they buy from a business that doesn’t take it seriously, particularly since the number of consumers who experience credit card fraud is expected to keep increasing until 2018.

Promote loyalty.

Nearly 70 percent of fraud victims say they will not do business with the company that failed to protect their data. Tout your payment security in marketing campaigns alongside loyalty messages that prove how many customers have come to trust your business over the years, in part because of the fact they know you take all aspects of customer care seriously, including payment security.

Payment security is important to protect your business from the risk of a breach (and the financial losses you may absorb if your business is the victim of one), but it’s also a benefit you can offer to the many customers who have become increasingly wary about credit card fraud and identity theft. Incorporate payment security messages into your marketing campaigns to tell your customers why it’s a tangible benefit worth valuing when they buy from your business.

Original Article:www.entrepreneur.com

Why You Should Walk the Line Between Company Culture and Your Individual Leadership Style

The company culture is the heart of the organization. Goals, processes and policies should be tied to it. So when leadership styles within the organization match that culture, success should follow, right? That’s what you would think, but an interesting study conducted by researchers from Georgia State University suggests the opposite.

The research, which was published in the June issue of the Journal of Applied Psychology, found that CEOs who adopt a leadership style similar to the company culture actually have a negative impact on the organization’s performance. Among the 119 U.S. organizations studied, firms were most effective when CEO leadership style and organizational culture differed.

Why? Leaders who conform to the norm don’t bring anything new to the table — they aren’t innovating. But leaders can’t completely ignore established values and practices either. It’s a fine line to walk, but a leader who gets it right is more effective and brings more value to the company.

Here’s how to find that delicate balance between company culture and innovative leadership style:

Complement the culture — don’t undermine it.

Company culture defines the values of the workplace and how employees should behave. So while leaders should be innovators, they shouldn’t challenge and undermine a culture just to say the did — there needs to be a good, strategic reason in leading outside the culture.

Instead of thinking of ways to undermine the culture, look at ways to build on the business by using strategies the culture overlooks.

For example, the researchers from Georgia State University explain that company cultures tend to fall into one of two categories: task-oriented or relationship-oriented. In a task-oriented culture, employees focus on reacting to external problems such as customer needs and the actions of competitors. In a relationship-oriented culture, however, employees focus on internal issues such as communication and collaboration.

So in a task-oriented culture, leaders can take a more collaborative approach and help employees to better communicate and work together. In a relationship-oriented culture, leaders can innovate by staying on top of industry trends and guiding teams to attack them.

Don’t oppose the culture — use a unique leadership style to work with it and leverage the strengths of employees.

Find what’s missing.

Although company culture is meant to guide employee actions and bring teams together, many employees have a negative view of these principles. In fact, a survey of 1,200 employees and executives conducted by researchers at VitalSmarts in July found a gap in how leaders and employees view company culture.

Among those surveyed, leaders were much more likely to say they wanted innovation, initiative, candor and teamwork, while employees said obedience, predictability, deference to authority and competition with peers were really valued by the organization.

Leaders who go along with what they think is the norm are missing these huge differences and are blind to many of the issues and concerns employees have on a regular basis.

Listen to employees — what are they complaining about? What do they think could be made better? What’s missing from the culture? Find where these disconnects are happening and fill in the gaps. Use leadership and personal leadership style to address these issues, build on the culture and make it better for employees.

Encourage innovation.

Employees take their cues from leaders. So when leaders stick to the established culture, employees think they need to stay inside the box as well. There’s a lack of innovation at every level.

After all, the VitalSmarts survey found that employees were 53 percent more likely to say their company culture encourages them to conform, follow the rules and make a good impression than leaders were. So while leaders want employees to innovate, employees feel the opposite.

Encourage employees to challenge and question assumptions and anything that’s considered “normal” in the culture. Set an example by doing the same. Innovate, ask questions and push for positive change.

While employees should be encouraged to think outside of the box, don’t encourage them to adopt a negative view of the company culture. The goal should be to improve the workplace and the business as a whole, not to trash it’s values. Lead with an innovative attitude and employees will follow suit.

Original Article:www.entrepreneur.com

5 Essentials for Raising Your Growth Round of Financing

As the founder and CEO of the HR platform Namely, Matt Straz has experience raising a growth round of funding. The following is his advice, from his point of view, on the process.

While there are many thousands of people and firms that can provide money to get a startup going, far fewer entities, perhaps just a couple dozen depending on the business, can fund a Series B or C. I raised my Series B round in 2014, and here is what I learned.

Kiss a lot of frogs

Finding the right venture firm requires meeting many of them, since most will pass on the investment no matter how well the company is doing. Whenever I realize there isn’t a fit, I often break up with the firm quickly, sometimes emailing a nice “no thanks” note as I leave their office. This makes company founders feel more in control of a process that is riddled with rejection.

Define growth

Many venture firms claim to be “growth” stage investors, but that term can mean different things to different people. When you get a call from a VC firm, establish upfront whether they have an established minimum revenue or annual “run rate” in order to make an investment. Some investors will want to see a $5 million to $10 million run rate before they invest. Others won’t care and will base their decision on how fast the company is growing and if they like the market.

Be quantitative

Once a company has raised a B round of financing, things become less about the founder and more about the business and its metrics.

For example, if your company is a SaaS (Software as a Service) provider, you should deliver highly detailed reports on things like monthly recurring revenue, annual contract value and customer churn. If your company is a B2C, you should show high levels of user growth and engagement.

Whatever the metrics for your company’s particular industry, have them at the ready when the fundraising process begins.

Show it

At this stage, investors expect significant growth in the months and years immediately following their investment. For example, if your company is a SaaS company, you need to show how it will grow at least three times annually in the years following the investment.

Ultimately, investors want to know how fast your company can get to $100 million in revenue so it can IPO or be acquired. If this is not achievable, then think twice about raising a Series B.

It ain’t over until it’s over

Even if a VC firm is interested in funding your company’s next round, there are things to tend to once you’ve received a term sheet.

Due diligence is typically a formality involving a lot of paperwork being sent back and forth, so have good financial records in place. Also, the public announcement of a U.S. fundraising must happen within 30 days of the closing, as it needs to be filed with the federal government.

Be sure to work with a good PR firm or have a solid relationship with a tech writer to tell your company’s story. Don’t let your hard work be ruined by a poor or muddled fundraising story.

Securing a growth stage investment is rare. Most startups never get to this point. But with the right metrics and approach, it can absolutely happen!

Original Article:www.entrepreneur.com

The 4 Roles of Accountability Within Your Company

When determining accountability within your company, there are two groups that should be held responsible. First, process indicators should be pushed down to the lowest appropriate level. This gives the power to act to the right person, thus empowering all levels of employees. In many organizations, decisions are made at the wrong level, sometimes several levels removed from the person whose action can impact the indicator. This not only creates confusion but distracts teams from meeting their individual goals.

The reverse is true for process initiatives. These should be assigned to the highest appropriate level in the organization. The word “appropriate” implies that the person has the decision-making power to allocate necessary resources to ensure the success of the initiative. Because of the high importance of strategic projects for the future of the business, the person in charge should be as close to the CEO level as possible. But not all of these initiatives should be assigned to the CEO. Some projects can be assigned to a direct report of the CEO or another appropriate person.

The four roles in accountability

There are four roles that could be assigned to the indicators and initiatives. Defining these roles clarifies accountability and ensures that each person in your company understands how their actions impact the indicator. Each person with influence on an indicator will have one of these four roles.

1. The role of direct influence or CSF

The person with the greatest direct impact on moving a process indicator, at the lowest level in the organization, is accountable for the indicator. The indicator becomes the person’s critical success factor (CSF). The CSF takes the value of the indicator.

For example, if the indicator is “percent of customer returns” and John is the person in charge of production at the lowest level of the organization with the greatest direct impact, then John’s CSF is “percent of customer returns.” Further, if the status of the indicator is 5 percent for a particular month, then John’s CSF will also have a value of 5 percent.

Let’s take another example: “percent of undesirable turnover of salespeople.” This is an indicator that measures how fast you’re losing your sales talent. The person with the most direct influence on this indicator is the sales manager. Therefore, this is his CSF. If the status of the indicator is 10 percent for a particular month, then the CSF will have the same 10 percent value.

2. The role of cross-functional influence or CIF

Rarely is there an indicator that’s influenced by only one person. Usually, there are many people in different functional areas who influence the same indicator. To capture this shared responsibility, we define the role of cross-functional influence and assign a term called a critical influence factor (CIF) to those people who have indispensable cross-functional influence on a factor but aren’t the main drivers.

Consider the two examples above. In the first case, “percent of customer returns” could be impacted by different functions, including the shipping supervisor, salesperson and marketing supervisor. As such, each of these individuals will have “percent customer returns” as their CIF, and the status of their indicator will be the same as the status of the CSF, that is, 5 percent.

In the second example, “percent of undesirable turnover of salespeople” could be influenced cross-functionally by the HR manager, who will have the indicator as a CIF, with the same value of 10 percent as the owner of the CSF.

When the roles of CSF and CIF are clarified, the owner of a CSF knows the company expects results from them, and this is motivating. The owner of a CIF knows that they’re expected to collaborate to influence the result. However, the CIF owner will also realize that it’s important to not take over the role that the CSF owner must play. Through the process of involvement, everyone understands their role and agrees with it. This increases collaboration.

3. The role of management influence or CMF

The third role is that of management influence. If you impact an indicator through your role as a manager, then the indicator will be a critical management factor (CMF) for you. A CMF measures your success at influencing results through the people you manage. For example, as a sales manager, the total sales of the six salespersons reporting to you would be your critical management factor. It is a CMF because you don’t do the actual selling, but you influence the sales through your salespeople.

If you’re a manager, you’ll also have individual CSFs for your job. Beyond watching the total consolidated number as a CMF, you have a unique contribution to make that’s measurable. For example, as a sales manager, one unique contribution and CSF for you could be “percent of your salespersons over quota.” This encourages you to pay attention to all your salespeople and help them achieve their quota, and it contributes to a long-term development of your resources. Another CSF could be “percent of salespersons that achieve 120 percent of their quota.” This encourages you to pay attention to the high-performing salespersons who work to increase the overall sales.

Distinguishing the CSFs from CMFs is very important, because the tendency in many organizations is for managers and directors to consider consolidated numbers from lower levels as their own CSFs. This causes layers in the organization “watching” those actually doing the work. For example, suppose you have five people selling. A zone manager would be looking at the total sales of the zone. The regional manager would be looking at the total sales for all the zones. The country manager would be looking the total sales of all the regions. That’s fine, and that’s their CMF. But what other added value do they have? It’s important to be able to identify unique added value for each job and assign CSFs to the job.

4. The role of dotted line influence or CIM

The fourth role is the “dotted line” influence. This role is called CIM, which stands for critical influence management factor. It implies the management influence over the work of an individual in a different function (dotted line). To look at an example of a dotted line influence, let’s imagine a large department store. In the men’s department, there’s a boutique line of sunglasses. The salespeople are selling a mix of products, including the boutique line of sunglasses. The salespeople report to the sales manager of their department in a solid line for the total sales in their areas. They could have a dotted line reporting to a director in the store responsible for the sunglass category. So the measurement “$ sales of sunglasses” would be a CSF for the salespeople, a CMF for the sales manager and a CIM for the category director.

Original Article:www.entrepreneur.com

How to Use Content and Social to Promote Your Small Business

In the United States, the small business sector represents a significant part of the nation’s economic growth, with an estimated 28 million registered businesses earning 54 percent of annual sales in America. Small business accounts for 55 percent of all jobs and, on average 66 percent of new net job growth on an annual basis, according to the U.S. Small Business Administration.

Given these statistics, there is nothing “small” about small businesses in America, except that these organizations typically follow a lean startup model, beginning as part-time businesses and growing only with time and cautious investment.  Because of this limited growth model, hiring a marketing manager isn’t an option, budget-wise, for many small businesses.

 However, what they lack in capital, these nusinesses can make up for with creative content marketing.

How can your small businesses leverage content tools and brand messaging to support your growth? Here are several strategies and software packages that every business owner should consider part of an effective marketing plan.

Master social media management.

If delegating social media management to someone on your team isn’t an option, become a master content creator yourself. There are many online courses available on Udemy that start for $10 per lecture, allowing you to learn at your own pace the fundamentals of digital marketing and social media. The courses will teach you what to share and when, to optimize the benefit of professional community management.

Learn what software applications the experts use to preschedule posts, and how to get alerts sent to your phone whenever someone likes or comments on your social media content. Empower yourself (or your staff) to respond quickly to customer questions on important social channels like Facebook, Twitter and Instagram.

Small businesses that sell online nationally, or internationally, can benefit from looking at metrics or analytics regarding their social media engagement. Learn where your customers are from, what posts have the most traction, the most active days or times for your customers — and more. You can use Sprout Social. The software also comes with comprehensive scheduling applications, competitive reports and more.

Take advantage of newsjacking and trending hashtags.

Starting from scratch with new social media accounts means a slow, persistent build in terms of audience. Don’t be discouraged if it takes time and a lot of effort to gain traction and followers for your small business, but focus your efforts first locally, to build brand awareness in your immediate community.

Look for hashtags and other businesses in your local area that are “killing it’”on social. Follow charitable organizations from your community, including local associations and chambers of commerce. There is nothing unscrupulous about following up news events or headlines from your local area; comment, and like posts (or share them) to start networking with other businesses in your area. You can also expose your own business to more people by leveraging hashtags that are trending. Stay in the middle of the conversation.

Stimulate user-generated content.

Small businesses that advertise on social media platforms gain more traction by encouraging customers and users to create their own content. Just as product or service reviews help small businesses, so does user-generated content when shared online.

There are many ways small businesses can leverage user-generated content without pricey contests and large giveaways. If you own a restaurant, for instance, ask customers to share their favorite meal on Instagram, using a custom hashtag for your business. The hashtag will allow owners to randomly select a winner monthly, but the pictures of different items, and comments from satisfied customers, are worth far more than the price of a once-per-month “free dinner for two” incentive.

Invest in visual-content marketing.

You don’t have to be a graphic designer or professional video editor to create valuable multimedia visual content to share in your social feed. Finding the time may be a challenge for small business owners, but there are many free or low-cost smartphone apps that make it easy to create social-friendly creative posts.

If you are just starting out, and want to create some animated video posts with captions, try Ripl. The full version of the app (without the distraction of a watermark on your images or videos) is under $10 per month. Adobe Spark is fabulous software that allows a more advanced creative user to develop short videos, presentations (slideshows) and even magazine-quality graphic posts for social sharing.

Use an online-review service.

Gaining favorable customer reviews should be part of a small business marketing plan. Consider that any brand has an uphill battle to convince and convert potential customers. And favorable communication coming from the small business itself naturally has a biased opinion. The beautiful thing about customer reviews is that they hold a lot of merit with new customers, who trust the purchase or service experience of other consumers over the brand’s own promises.

Some industry leaders in online reviews, like Trustpilot, are out of budget for small businesses, despite the fact that they offer a high-traffic and easy-to-use online review format. Other review providers, such as Google My Business and TestFreaks, are more budget friendly, and the ratings and comments they enable customers to leave can be embedded for the business’s website.

Proud of your service track record? Showcase it on social media and on your website as an important credibility piece, to help establish a positive online reputation. Don’t forget to design an effortless way for customers to leave your business a review, by designating a funnel on your website; and remember to respond to comments (negative and positive) in a service-focused manner.

Overall, don’t be afraid to show the personal side of your small business to your customers, on social media.  Staff recognition, birthdays and charitable giving or events are all valuable from a public relations standpoint.

Small businesses have personality, and that’s why customers love to buy from them and shop locally. Let your passion and positive vibe shine through, and watch your small business grow.

Original Article:www.entrepreneur.com