Management

How do I make my employees to obey me?

Employees are a tricky lot.  They are the foundation of your business – they can build you up or they can ruin you.  For the sake of this post, I will be referring solely to knowledge workers – those special people who make the magic of your business happen and are not easily replaced.  In a start-up, you want a group of motivated, bright and enthusiastic knowledge workers to help create and implement your vision.  But what happens when the knowledge your employees possess exceed your own?  How do you get your employees to obey when you are no longer capable of doing their job(s)?

As immigrants, both of my parents did a stint in a restaurant kitchen.  Both of them told me that the chef was the one who wielded all the power in the restaurant; not the owners.  If the chef were displeased, he can walk out during a busy dinner service and ruin your restaurant.  That’s why it’s important for the owner to be able to cook the few key dishes that each restaurant is known for.  But chefs can be replaced and most restaurateurs started off as chefs anyway.  What if you own a software development firm?  How do you keep your programmers from walking out in the middle of a big project?

A brilliant programmer shared with me an article on how to lead clever people.  It summarizes nicely what to do with your knowledge workers.  Rather than regurgitate what the article says so eloquently, I’d like to focus on what you, as the business leader, really need to worry about.  If you employ knowledge workers, know that the most dangerous aspect of your business happens every day when those workers walk out the door.  There is a very real possibility that they will not come back, and replacing stellar knowledge workers is no easy task.  The question, then, is not how do you make your employees obey, but rather how do you gain the trust, respect, and loyalty of your partners (see related post below on leadership).  Yes, your employees are your partners.  They are the foundation of your businesses and some probably understand your business better than you do.  Do not attempt to control them as you would a short order cook or a cashier.  Allow them to flourish in their element and enjoy their work.  Give them the freedom to do what’s right.  Trust that the respect and loyalty you’ve shown them will be repaid ten-fold.  As the leader, this is a difficult concept, but if you could run the business by yourself, you would be doing so now.  You need your employees – more than they need you.

What happens to leaders who follow the Don’t list of the above-linked article?  They often find that their businesses/organizations are no longer competitive.  It is not an overnight process, but over time, they come to realize that their success metrics have hit the top of the bell curve and are now on a decline.  Foolish leaders will blame the economy, the President, the sun, the moon, but the real blame lies with those who were unable to retain their knowledge workers. 

The answer is simple.  Do not attempt to make your employees “obey” for true greatness in any organization is always a collaborative team effort.


How much should I budget for marketing?

There are several ways to calculate a marketing budget.  The easiest way to do this is to take a percentage of gross profit – typically 5% to 10%, depending on your business, type of growth, etc.  Another method is to set a reasonable dollar amount that falls within your budget and maximize that budget with the most cost-efficient methods.  For example, one of the most important things a business can do is achieve and protect brand identity.  This is easily done by the managing owner or his/her designate.  Developing your brand is often a daunting task because most business owners don’t know where to start, but partnering with us will make the process simple and painless.  Another must-have item on your marketing budget is a website.  Gone are the days of relying solely on the phone book.  You must have a web presence and you must do it now.  You may have seen the ads for building your own, free website.  You may also have been contacted by website design firms that want upwards of $4,000 for a basic website plus a monthly maintenance fee.  Both, in my opinion, are wrong (details as to why will be featured in an upcoming post).  Finally, you must advertise in some fashion.  Whether you are marketing to other business (e.g., medical specialists marketing to general practitioners) or to the end customer, you must make your presence known and apparent. 

So how much should you budget?  If your net profit is between $100,000 and $250,000 per year, I would suggest you budget at least $15,000 for an initial marketing campaign that includes branding, website, search engine optimization (SEO), advertising (and I use that term loosely), and, most importantly, strategy development.  Every marketing campaign should build on your existing strengths and shore up any weaknesses.  If your net profit is between $250,000 and $500,000, I would suggest a higher budget of at least $25,000 with an expanded scope that includes leads tracking, customer retention and long-term goals.  If your net profit is greater than $500,000, you probably don’t need me.