Accountability (No Compromise!)
October 13, 2008 | By Neil Ducoff | No Comments
Greetings fellow entrepreneurs. Did you receive your government bailout check yet? I’m talking about the bailout check that will cover all those questionable and utterly bad business decisions you’ve made. All kidding aside, there are no bailout checks for entrepreneurs.
Unlike AIG and the other investment banks that failed to be accountable and knowingly compromised their financial integrity, there is one absolute that we entrepreneurs live by; when we mess up, we’re on our own and can lose everything. And unlike chief executives at major corporations that continue to receive million-dollar paychecks as their companies crumble beneath them, we entrepreneurs surrender our paychecks so our employees can get theirs. For entrepreneurs, when the well is dry – it’s over. No bailouts. No Lone Ranger to the rescue.
Am I angry at the events of recent weeks? You bet I am. I’m angry because the leaders of our banking system, major corporations and especially our leaders in Washington, DC, don’t get it. They don’t get what accountability and no compromise is all about. They don’t get that doing what’s right is the tough stuff of leadership – that respect for people comes before profit. Moreover, the bailout doesn’t fix the fundamental fact that compromise created this mess; it “forgives” it and enables compromising thinking and behavior to continue.
Roseanne Klementisz, one of our Certified Strategies Coaches, emailed me after last week’s presidential debate. McCain’s frequent use of the word “transparency” inspired her to write the following words:
“Given the current economic crisis, there is a renewed urgency for fierce, effective leadership at all levels of our financial lives. Leadership at the corporate and political levels can no longer preside with mediocrity and deceit.
The curtain is rising and employees, shareholders and citizens alike are demanding a revolutionary transparency. It’s essential to restore the massive degree of lost trust.
Entrepreneurs can no longer avoid the challenges that their companies are facing and neither can the average Americans that are accountable for the financial well-being of their families.
Compromise at the leadership level equals failure at best and devastation at worst. Safety nets have deteriorated and the call for no compromise must be heeded to restore the strength of our country’s economy.”
Roseanne’s words are a powerful call to action for everyone in business and government. In my new book, No-Compromise Leadership, I wrote, “When leaders compromise, or look the other way when compromise occurs, it’s the equivalent of a captain drilling holes in the bottom of a ship. A business can sink just as quickly as a ship.” Now is the time for all leaders to practice accountability and to live the no-compromise mantra.
Salons and spas touch and communicate with millions of people every day. Let’s show America and the world what no-compromise leadership looks like. Let’s spread the word that no compromise and accountability is a non-negotiable in business and government. By doing so, we can all emerge from this mess as strong and vibrant businesses.
Pass this email on to your business colleagues, managers and friends.
Neil Ducoff, Strategies founder & CEO
Greetings fellow entrepreneurs. Did you receive your government bailout check yet? I’m talking about the bailout check that will cover all those questionable and utterly bad business decisions you’ve made. All kidding aside, there are no bailout checks for entrepreneurs.... Read More
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Categories: Monday Morning Wake-Up
Now is the time for No-Compromise Leadership
October 6, 2008 | By Neil Ducoff | No Comments
We are all getting a real-time and sobering lesson in compromise. The economic events of this past week on Wall Street and Washington DC have been fed by compromise at every step. In what seems like a heartbeat, the economy went from sluggish to serious talk of recession. The question we’ve been asking, “Can it get any worse?” now has an answer, “Yes it can.” Compromise in Washington and Wall Street has driven America to the lowest point I have ever witnessed in my lifetime.
As entrepreneurs, we risk it all for our businesses. And when we make bad decisions and compromise, we know that the government will not step in and write an insanely massive check to bail us out. Simply put, we pay a price to play the business game. When we win, there’s no better feeling of personal pride and accomplishment. When we lose, it hurts in every conceivable way imaginable.
It is in economic times like these that our entrepreneurial grit is put to the test. From all indications, this economic mess will get worse before it gets better. And if it hasn’t already, it is going to impact your business. The question is, will the no-compromise leader in you rise to the challenge? The best mindset is to prepare for what is shaping up to be an extended period of economic uncertainty.
No-compromise leadership means doing what needs to be done. No excuses. No procrastination. To get you going, here are some do-it-now no-compromise strategies:
* Forget “Salons are recession proof” thinking: These are different and extremely complex times. That old “recession proof” thinking enables inaction. It creates a mindset that nothing needs to change. Today, salons are NOT recession proof. Many can already attest to that.
* Turn your systems on: This simply means, everyone on your team plays according to the rules. Our coaching clients that are reporting growing or steady sales and profits are the ones that have a no-compromise culture where everyone is accountable. From up-selling on the phones and adhering to service procedures, to consultations, recommendations and pre-booking, they execute their systems.
* Lift or drag: Do you have employees on your team that live by their own rules? That’s compromise. Absenteeism, lateness, missing huddles, avoiding retail recommendations, not pre-booking, no teamwork, always an excuse… you get the picture. If an employee is not creating lift, he or she is creating drag. The no-compromise leader doesn’t tolerate drag of any kind.
* Information flow: In times like these, information flow throughout the business is crucial. The no-compromise leader is a communicator. Huddles, scoreboards, one-on-ones, constant cheerleading – that’s how to maintain urgency, consistency and focus.
* Cash-flow planning: I know I beat this topic to death. I do so because too many entrepreneurs don’t pay attention to their financial reports. Even more fail to create and live a cash-flow plan. Today, and most certainly in the months ahead, there is no margin for error when it comes to cash flow. Most certainly, there is no bailout waiting for you should you run out of cash. The no-compromise leader is engaged in cash-flow planning.
You need to go no compromise. America needs to go no compromise. No doubt we are in uncertain and fearful economic times. It’s time for no-compromise leadership. Heck, I wrote the book on it and I need to adhere to no-compromise thinking and behavior, too. Let’s weather this storm by doing what needs to be done. Like all storms, there is sunshine and blue skies on the other side.
Pass this email on to your business colleagues, managers and friends.
Neil Ducoff, Strategies founder & CEO
We are all getting a real-time and sobering lesson in compromise. The economic events of this past week on Wall Street and Washington DC have been fed by compromise at every step. In what seems like a heartbeat, the economy went from sluggish to serious talk of recession. The question we’ve been asking, “Can it get any worse?” now has an answer, “Yes it can.” Compromise in Washington and Wall Street has driven America to the lowest point I have ever witnessed in my lifetime.... Read More
Read More
Categories: Monday Morning Wake-Up
Pricing in today’s uncertain economy
September 22, 2008 | By Neil Ducoff | No Comments
Pricing services at salons and spas is a topic that’s always steeped in controversy. At one extreme, owners take an artistic and emotional approach that relies heavily on what the market will bear. At the other extreme, owners take a more strategic approach that factors in costs, profit margins and competitor pricing. In the middle resides a mixed bag consisting of multi-level pricing, incentive pricing, service packaging and other similar strategies with the intention of appealing to the broadest range of consumer price preferences.
Suffice it to say, pricing strategies at salons and spas are clearly more art than science. Yet, while the debate rages on, only one line item on your profit and loss statement truly matters – net profit. Did your business generate enough revenue and control its expenses to make a profit? And, at the end of the day, was that profit significant enough to be worth all the effort? In these uncertain economic times, these two simple questions must guide any and all pricing decisions and strategies.
To keep your thinking clear on your pricing strategies, consider the following:
* The problem may be your spending – not your pricing: Before you rush into a price increase or a discount strategy, get real about your spending habits. I’ve seen more owners crying the blues about profits while refusing to confront their spending and avoidance of cash-flow planning disciplines. If this describes you, it’s time to confront reality and take accountability for managing expense. Messing with pricing is not going to fix a spending behavior problem.
* The problem may be “not up-selling” – not your pricing: It’s a safe bet that you’re letting sales walk out the door simply because your front desk and service providers are not up-selling. Does your front desk and call center staff have scripts for up-selling? If not, why not? If they do, are they using those scripts? The same goes for service providers. Scripts make up-selling easier and more natural. Too many salons and spas have the systems but fail to train and hold employees accountable for using them.
* Know your cost-per-hour: You cannot effectively price a service without knowing your cost-per-hour that includes labor, product cost and overhead. Knowing your cost-per-hour is like knowing the cost of a retail product. It allows you to effectively “mark-up” that cost sufficiently to ensure a profit. Without knowing cost-per-hour, you’re simply guessing. You can read more about cost-per-hour in the Strategies’ archive by clicking this link: Service Pricing
* Discounting has its place – or not: Discounts do help influence buying decisions. Discounts allow you to focus attention on new services or time slots that need attention. Used strategically, discounting can and should boost revenues. And if the term “discount” brings shivers to your artistic and professional demeanor, you can easily package services into one attractive price and avoid the use of the term entirely. Needless to say, overusing discounts can create customer expectations to seek incentives.
* If you must raise prices: If you’ve managed your selling efforts and expenses to where a price increase is now warranted, go for it. Applying a viable and justified price increase is part of business. No need for apologies or detailed explanations. Just be honest with clients and say, “It was necessary to raise our prices.” I also suggest just doing it. Attempts to inform all clients of the impending increase just delays the inevitable. Some will complain, many will not and a few may decide to go elsewhere. That’s business.
Pass this email on to your business colleagues, managers and friends.
Neil Ducoff, Strategies founder & CEO
Pricing services at salons and spas is a topic that’s always steeped in controversy. At one extreme, owners take an artistic and emotional approach that relies heavily on what the market will bear. At the other extreme, owners take a more strategic approach that factors in costs, profit margins and competitor pricing. In the middle resides a mixed bag consisting of multi-level pricing, incentive pricing, service packaging and other similar strategies with the intention of appealing to the broadest range of consumer price preferences.... Read More
Read More
Categories: Monday Morning Wake-Up
When learning and camaraderie bond
September 15, 2008 | By Neil Ducoff | No Comments
Many of you are familiar with our Strategies Business Series/4.0. Better known around here as SBS/4.0, this learning experience is comprised of four training sessions, three days each, held at our Business Academy in Connecticut. But, when we started our tenth SBS/4.0 group earlier this year, little did we realize how dynamic this group of 45 owners and managers would become. The structure of SBS/4.0 spreads its four training sessions out over ten months with e-mail updates every Tuesday to the entire group. This progressive learning and interaction naturally creates camaraderie and sharing – but Group 10 rapidly took it to a no-compromise level.
From the start, there was something unique about Group 10. They shared business information, manuals and successful strategies freely. But things really got interesting when they began leaning on each other for support. The Tuesday e-mail updates quickly became their lifeline. When a couple of owners encountered some serious and unexpected problems, group members rallied with encouragement and solid strategies. As entrepreneurs, we all know how vital it is to have fellow business owners bring their strength and belief in your ability to succeed when the road ahead is dark and uncertain. Over the past seven months, I’ve watched with pride as this group collectively advanced their no-compromise leadership thinking and behavior.
In three weeks, Group 10 will reconvene at the Strategies Business Academy for their third session. This time, a number of owners are bringing partners and key staff members to share the experience and energy of the group. One spa owner actually had four key employees request that they too attend SBS/4.0 with her. When she said, “Let me figure out how we’re going to pay for the added expense and travel,” they replied, “We already paid for our own tickets.” That’s what I call inspiring.
Lisa Cochran, who we fondly refer to as Miss Mississippi, called me to ask if the town allows campfires on the local beaches to do a New England clambake. When I told her fires aren’t allowed, undaunted, Miss Mississippi called the local Chamber of Commerce. On her own, she organized a clambake through a local caterer to be held on Captain Mark’s charter boat, RiverQuest, on the beautiful Connecticut River just a mile from Strategies headquarters. Now we’ve got husbands, wives and children joining the group.
The point of this story is to express how essential it is for all business owners to come together every three months to learn, share and inspire each other. We designed SBS/4.0 as a venue for just that purpose. Over the years, we’ve refined the course content to achieve that special balance of learning and interaction. With Group 10, we perfected our “secret sauce” to teach no-compromise leadership both in the classroom and in between sessions.
We have another SBS/4.0 beginning on October 12th. If you want to truly raise the bar and learn what no-compromise leadership is all about, consider joining Group 11. Click on this link for more details.
Pass this email on to your business colleagues, managers and friends.
Neil Ducoff, Strategies founder & CEO
Many of you are familiar with our Strategies Business Series/4.0. Better known around here as SBS/4.0, this learning experience is comprised of four training sessions, three days each, held at our Business Academy in Connecticut. But, when we started our tenth SBS/4.0 group earlier this year, little did we realize how dynamic this group of 45 owners and managers would become. The structure of SBS/4.0 spreads its four training sessions out over ten months with e-mail updates every Tuesday to the entire group. This progressive learning and interaction naturally creates camaraderie and sharing – but Group 10 rapidly took it to a no-compromise level.... Read More
Read More
Categories: Monday Morning Wake-Up
What does “working on your business” really mean?
September 1, 2008 | By Neil Ducoff | No Comments
“Are you working on your business, or in your business?” This working “on or in” your business statement has been bandied around for years. For the leader of a business, it just makes sense. If you’re spending the majority of your time doing “the work” of the business, who’s plotting the course for growth and continued success? Who’s making sure the business has the resources, money, talent, systems and a rock-solid culture to ensure continued success? Who’s ensuring that everyone is focused and accountable? When all these “who’s” have a leader’s name attached to it, the result is what I call “the No-Compromise Company.”
For salon and spa owners, this “working on your business” typically means, “not doing services on clients.” For non-technician owners, it typically means, “being able to work in the office.” No matter what your interpretation of “working on your business” is, the big question is, what are you actually working on? Furthermore, does what you’re working on really qualify as “high-value stuff.”
To help clarify what working on your business really means, my friend Jack Stack says, “If you’re making decisions today that will affect your business in the next 30 days, you’re making the wrong decisions.” As leader, working on your business means that you are not getting bogged down in the day-to-day running of the business. Your focus must be on the opportunities and potential dangers down the road – not on the immediate activities.
When your systems are well designed and there is company-wide accountability to execute those systems with consistency, you are free to work on your business. You’ve got a leadership team and other staff that are much closer to the details of the work. Given this, your leadership team and staff should be capable of making the best operational decisions – if you let them.
Here is a hit list of do-it-now strategies you can use to ensure that you truly are working on your business:
* Redefine your role as leader. If you’re the leader of the company and you’re spending the bulk of your time servicing customers and stuck in the day-to-day operations, it’s the perfect recipe for stagnation. Start with a clean slate and redefine your role with a focus on vision and creating organization excellence. Plot your company’s course on a journey worth taking – and lead it there.
* Let go of the controls: If it’s only done right when you do it, you’re stifling the growth of others in your company. Owners that refuse to let go of the controls are forever bound to their companies, as they only function well when they’re present.
* Levels of authority: Design a system that clarifies levels of authority. This means that clear guidelines for decision-making exist at all levels of the company – and keep it there. For example, a front desk manager is responsible for all daily operational decisions that involve the front desk. The leader or general manager is not called in to solve the “double-booking error.” If the computers blow up, then they’re called in.
* You can’t be the main sales engine: If the revenues you personally generate are so vital to the financial integrity of your company, you’re stuck. You’ll never be able to work on your business. Working on your business means creating the right environment and culture that inspires all team members to contribute and grow.
* Build value to your company: As leader, your prime responsibility is to build value in your company. That means leading a finely-tuned company that adheres to no-compromise thinking and behavior. You can only build value by working on your business.
Pass this email on to your business colleagues, managers and friends.
Neil Ducoff, Strategies founder & CEO
“Are you working on your business, or in your business?” This working “on or in” your business statement has been bandied around for years. For the leader of a business, it just makes sense. If you’re spending the majority of your time doing “the work” of the business, who’s plotting the course for growth and continued success? Who’s making sure the business has the resources, money, talent, systems and a rock-solid culture to ensure continued success? Who’s ensuring that everyone is focused and accountable? When all these “who’s” have a leader’s name attached to it, the result is what I call “the No-Compromise Company.”... Read More
Read More
Categories: Monday Morning Wake-Up
