Rules are there to keep us safe, to prevent harm to other people, because society demands them and for a host of other reasons, but if you never question the rules you could be missing out.

Two recent examples come to mind. Well, actually I guess I’ve been sitting on this topic for too long. My first example has to do with income tax, so it’s not too recent! If you do your own tax using a program to do the heavy lifting for you, you’ll be familiar with the function where the program offers to optimize some entry for you, to minimize the overall family tax. If I remember rightly, it was medical expenses that I was dealing with.

The program was saying that together, the good lady and I owed $X. It offered to optimize Medical Expenses, and after doing so, we owed more than $X. Optimal? My big toe, it was optimal! For whom, the government? I suppose the rule applied by the tax program was: “the party with the lowest income should take the medical expenses”. For whatever reason, that did not apply in our case. The point of this long overly-complicated example is not that one should never trust a computer ever again, but that occasionally, doing a quick test is a good idea. The cost of doing a test was small, and the benefit was tangible. Testing, and then breaking the “rule” made sense, so I did.

The other example was building a desk. “Everybody” knows that a business person should spend their time doing the things which make money for the business, and hire someone who knows what they are doing for the other necessary things. Well, I decided to make a built-in desk in one corner of my office. By myself, with wood and such. Just about everything that could possibly go wrong (and a couple of things that I thought could not possibly go wrong) - did. The oak veneer splintered, the wheeled computer cart did not fit under the desk until I raised the whole thing by half an inch, and of course, the walls were not straight, so the desk didn’t fit into the corner properly. If I had billed for my time, I could retire (again!) on that job alone. On the other hand, it is exactly what I wanted. It fits the space in a way that only a custom build could achieve, and every day I look at it and smile. It may be a mess, but it’s a mess that I built. And probably, only I can see the faults. Well, apparently my wife can as well. Best of all, it seems that it impressed the heck out of my 18 year old son. That’s worth a lot, and I’m glad I realized that not all benefits are financial.

My advice is, find out what the rules are for your business, because they’re probably the result of a lot of experience. They make sense. Then dig until you understand what they mean. Test the rules where you can do so. (You know I’m not suggesting that you test the rule that says don’t put your fingers in the machinery, don’t you!) The better you understand the rules, the better you’ll understand your business, and you’ll know when it’s OK to break a couple, here and there.

From my desk to yours…

Recently, I had the interesting opportunity to attend the Ontario Universities Fair in Toronto, representing the University at which I am a professor. The fair is something relatively new. It certainly wasn't around when I was a high school student. It's an opportunity for senior high school students to hear the pitches of various Universities and colleges in their vicinity and thus, in theory, make a more informed choice about their career paths.

In Ontario's somewhat socialized system of publicly funded education, I'm not completely comfortable with the idea of being called upon to "sell" my institution to potential "clients". I don't view education as a product, but more as an opportunity of which every citizen should avail himself. But that's a topic for another day. Suffice it to say that I was more than willing to discuss career options with young people, and to offer the unique qualities of our institution where appropriate.

What was interesting, and not particularly surprising, was the extent to which mass media had overly influenced students' expectations of their careers.

When I was their age, the big TV shows were things like "L.A. Law", and the big movies were the various John Grisham adaptations. This continued for some years. Indeed, I recall having several despondent discussions with my fellow science grad student’s years later about how our society had become "law obsessed". The rush to law schools was fairly evident, as was the resultant glut of underemployed law grads.

In more recent years, TV has brought us the return of the sexy medical drama. Shows like "E.R.", "Gray's Anatomy" and "House" top the ratings. So most of my current students --and pretty much all of the high school students I met at the fair-- are convinced that they are destined for medical school. My interviews with the latter suggest, however, that few have any idea what life as a doctor really involves. It's informed in large part by what they see on television.

Moreover, their inability to separate medical life in the USA --which is what is portrayed on their favourite TV shows-- and the realities of life in Canada's socialized system is quite telling. It suggests a dramatic overwhelming of Canadian identity, at least with respect to expectations of lifestyles pertaining to the professional class, by foreign media.

This is most evident when you consider the recent annoying trend of the medical crime drama. "CSI", "Cold Case", "Bones", "Crossing Jordan" and a score of other shows have come, gone, lingered or transcended in recent years. Not surprisingly, a very large number of senior high school students approached me at the fair with the very saddening question, "How do I become a CSI?"

Where to begin? As far as I can tell, "CSI" is an American term that is only relevant in certain cities. The educational backgrounds and certification requirements of crime scene investigators vary from jurisdiction to jurisdiction. Some are police officers. Some are medical examiners with MDs. Some are specially trained by law enforcement institutions, like the FBI. And some are recruited directly by municipalities.

Indeed, fresh out of graduate school, I actually once had a job interview to become a "forensic pathologist" in Toronto, a position that would have involved collecting biological samples at crime scenes and performing laboratory tests to assist in police investigations. The interview took place in a court room and involved a simulated cross-examination.

It was sort of fun. But I was wise to the reality of the job. Despite what the TV shows might suggest, crime scene investigators aren't 20-something hard bodies dressed in Gucci, working in softly lit high-rise offices and engaged in mob hits and terrorist plots when they're not off having whirlwind romances with casino bosses and deputy mayors. In truth, they're average-looking, very hard-working middle-aged dudes and dudettes in stained lab coats, working in a dank basement with a single 60 watt light bulb dangling from the ceiling. They're barely paid enough to afford their one-bedroom downtown apartments, let alone to buy Gucci. And the samples they collect aren't always bullet fragments and blood drops; they're often pools of diarrhea, vomit and bile.

With student after student interrogating me about the appropriate crime scene investigation education path, one question kept occurring to me: what exactly are high school guidance counselors doing these days? Are they simply showing kids DVDs of "CSI Miami" and leaving the room? Hmm, maybe I should teach my classes the same way.

We are big fans of “growing loyalty” among ideal clients over pretty much any other business building tactic - it’s the lowest cost sales activity you will ever engage in, since you are already doing business with them, you already know what they want and need, and you can easily find out if they are being wooed by someone else. How easy is that?

And yet… we have hundreds of examples of business owners who not only don’t take advantage of this fantastic opportunity, they positively destroy it. See if you recognize yourself in these stories:

A client who spends $100 a month in your hair salon calls to make an appointment only to find her favourite stylist has left. Did you keep a database of all the clients who came to the salon which allowed you to contact them, tell them the news and offer them an incentive to remain a loyal client? If not, you lose $1200 a year.

A customer who has been leasing his upscale cars from you for years needs some emergency service. Your service centre is booked up so you tell him you’re just too busy. The customer not only takes the car somewhere else for service, he never comes back. Did you check to see how much that customer’s business was worth and find a way to accommodate him? If not, you lose a lifetime value of $500,000.

A customer buys over a thousand dollars in clothing and accessories from you. He is particular but happy to spend to get the quality he wants. He leaves the store and never hears from you again. Did you add him to your database with a checklist of his preferences so you could contact him when specials were available? If the answer is no, you lose the $10,000 he would have spent with you over the next five years.

What would it take not only to keep those customers, but “grow” their business by 25% without spending a cent you wouldn’t have spent anyway?

The first step is a database of every single customer who does business with you. If you can, link it to your point of sales system, so you know how much they spend, on what, and when. At least, set up a spreadsheet with columns as follows: first name, last name, street, town, postal code, phone, email, and a column you can put an X in for the kinds of products and services they buy. Since your computer already comes loaded with Excel, that’s free.

The second step is to sign up for an automated email service (we like www.ConstantContact.com). Sending to up to 500 customers, more than you will ever need, will cost you about $20 a month - almost free. And the first 60 days are completely, 100% free.

Conflict in the workplace is inevitable. Many people perceive conflict a negative issue. However, what you learn through dealing with conflict can result in both personal and organizational growth. Though, if conflict is not managed effectively, it can be devastating to an organization.

The first step in improving your conflict management skills is understanding the different conflict styles and then determining your preferred style. Though we all have a preferred conflict style that we will habitually use, we also have the ability to change our style depending on the situation. There is no right or wrong conflict style, each one has its own strengths and weaknesses.

What is your conflict style? There are five main conflict management styles:

1. Competing (win/lose) – The competing style is assertive and uncooperative. When using the competitive style the person is putting his or her own concerns before anyone else’s interests. This style is effective when quick decisive action is required, in the case of an emergency or any other critical situations.
   
2. Collaborating (win/win) – The collaborating style is assertive and cooperative. When using the collaborating style the person tries to work with the other party to find a solution that satisfies both sets of concerns. Collaborating is effective when you want to gain commitment from others and resolutions must address all perspectives.
   
3. Compromising (win some/lose some) – The compromising style is both assertive and cooperative. When using the compromising style the person is concerned with finding a solution that settles on a middle-ground. Both parties will only partially be satisfied with the resolution. This style is often effective when there is a time constraint on finding a settlement.
   
4. Avoiding (no winner/ no loser) – The avoiding style is unassertive and uncooperative. When using the avoiding style the person will not address the conflict. He or she will either ignore the issues completely or temporarily, not taking part in finding a solution. This style can be effective in a situation where both parties need a cooling off period before they can hope to resolve the conflict.
   
5. Accommodating (lose/win) – The accommodating style is unassertive and cooperating. When using the accommodating style the person sacrifices their own concerns for the other persons’ needs. This style can be effective in conflict situations where the other party is determined to win at all cost. The accommodating person will compromise in order to keep the peace.

Approaching conflict management using these five styles provides more flexibility in the resolution processes. A manager, for example, can try different conflict styles if they find that their original strategy failed to resolve the conflict. In determining your conflict preference you can see how your strength can quickly become your weakness if the style is over-used. A leader’s goal should be to understand which style he or she uses most often and which styles should be strengthened.

There are two additional strategies that can help you to improve your conflict resolution. The first was introduced by Steven Covey in Seven Habits of Highly Effective People, habit five suggests to “seek first to understand, then to be understood”. If we listen and understand the other side first, then they will be more apt to listen to our side.

The second strategy is based on the book Getting to Yes by Roger Fisher and William Ury, they suggest that for wise conflict resolution people need to focus on their interests rather than their positions. When focusing on positions, we tend to emphasize the disagreement. When we concentrate on interests, we actually find some common ground. The book explains that each person must fulfill his own interests and needs, neither side should attempt to change the other person’s position.

In conclusion, we know that conflict is inevitable, but it doesn’t have to be destructive. Deal with conflict head on and encourage productive change in the workplace.

As the owner of your company, you are always looking for innovative ways to motivate your employees. Rewarding people for their contribution to your company’s success is a powerful tool. By using performance-based rewards you get the best effort from each of your employees.

The trap that many employers fall into when developing a bonus plan is an across-the-board mentality. You may think this is the easiest and fairest way to share the profits. The fact is, there is nothing fair about the equal treatment of unequal performance. This type of plan sends the wrong message to both underperformers and your top performers. Your bonus plan should send a message about what your organization values. You get what you reward.

Another problem with the across-the-board bonus plan, they are quickly viewed by employees as an entitlement. In no time at all, the bonus becomes a right and is no longer motivating. In leaner times, if the amount of the bonus decreases it is look on as a punishment and actually becomes de-motivating.

The new compensation trend is moving towards distributing gains through bonuses that reward actual goal attainment. When the team and individual goals are directly linked to corporate objectives and values, everyone wins.

The bonus plan needs to be meaningful to your business. The first step is determining your specific goals. What do you value most in your business? What work culture do you want? What targets do you hope to meet this year? Next step, is communicating these goals to your employees and explaining that their bonus levels are directly tied to the attainment of these goals. To encourage a team environment, a portion of the bonus should be awarded based on team accomplishments.

From the employees perspective, they tend to find performance-based bonus plans less subjective and more empowering then the traditional bonus programs. They feel a connection to the corporate objectives and see that their contributions have a direct impact on obtaining these goals. They also appreciate that their individual reward is determined by their own performance levels and the efforts of their team members.

It is always surprising to me, as a human resources consultant, that more business owners don’t take full advantage of performance-based bonuses. They can be a very powerful way to achieve your business objectives and to ensure that you retain your top talent.

What’s the most effective way to motivate people? There’s no simple answer to the controversial question of what effectively motivates people. Different things motivate different employees. For some it’s the lure of a hefty pay cheque that really gets them excited. While others are motivated by a genuine need to help others, to have the opportunity to solve a problem or to learn something new.

The way in which you motivate employees can have a profound effect on employee retention. Learning and understanding each employee’s individualities are the first steps in motivating your workforce. It’s important to be aware that when it comes to employee motivation, one size does not fit all.

From working with managers and employees on motivation problems for many years, I have determined that the following are the best way to motivate people and inspire peak performance:

• Employee participation in setting goals and determining the steps to reach them.
• Share the vision, people want to see the big picture and where they fit in.
• Provide all employees with the tools and training necessary to succeed.
• Pay a competitive rate for all positions in your company.
• Give clear, concise directions that can be easily understood.
• Provide clean and safe work environment.
• Empower people to make decision related to their jobs.
• Be accessible. Listen actively and empathically. Respond promptly.
• Give ongoing credit and praise for a job well done.
• Treat employees fairly and with respect.
• Encourage people to acquire additional knowledge and skills.
• Keep people engaged, challenged and excited about work.
• Value all employee ideas and suggestions.
• Promote the careers of all interested employees.
• Make each person an integral part of the team.
• Keep people informed about how they’re doing on the job.
• Encourage your people to do their best and support their efforts.

You can determine the best motivators for your employees by getting their feedback. Ask them what approaches they like and dislike and implement changes based on your findings.

Finally, in one word the most powerful motivator that I have seen is -- ‘empowerment’. We’ve all heard this buzzword but what exactly does it mean? Empowerment means you share your power with the people over whom you have power. This is easier said than done. Some leaders don’t want to give up their power - and some people don’t want to take the responsibility that goes with power. However, managers must establish a strong corporate infrastructure that supports empowerment, if the organization is to succeed. As the former CEO from 3M put it, “The mistakes people make are of much less importance than the mistakes management makes if it tells people exactly what to do.”

Last time, I started to tell you about the ideas participants find most helpful in my Schulich School of Executive Education course, Advanced Account Management and High-Yield Selling.

Now let’s take a look at:

• Gap Analysis
  How to reduce stress, improve client relationships and protect your margins.

Gaps occur between what needs to be done and what is being done - that's not new news! You can reduce stress, improve productivity and manage profit by focusing on the most important gaps - if you can accurately assess what the gaps are.

You can create practical profiles of recurring audiences, tailor every client interaction to individual needs and do the right thing - and it's easy! Here are the questions you need to answer to identify gaps.

1. Present Performance
   What promises has this customer received from me in the past 12 months? What have I delivered? What measurable results would the customer agree have been achieved?

2. Present Expectations
   What has this customer asked for? What conditions of satisfaction did the customer negotiate and accept? (e.g. delivery dates, costs, service, support, ongoing contact…) What things do they expect but not specifically discussed? Why?

3. Present Perceptions
   What conditions of satisfaction would the customer say have been met? What conditions of satisfaction would the customer say have not been met?

4. Customer Concerns
   What strategic business concerns do you know the customer holds? What strategic business concerns do you guess he/she holds?

5. Future Outcomes
   What vision of the future has this customer described? How is it different from his/her Present Expectations?

6. Satisfaction
   What complaints &/or recognition has the customer expressed? (Use actual customer language.) To what categories do they belong? (Process, Service, Cost, ROI)

7. Value
   Note the actions you’ve actually taken on the customer’s behalf, compared to the results actually achieved, and the customer’s perception of their value.

8. Doing the Right Thing
   Describe the customer’s perception of where improvement is needed in the type of service you provide.

9. Doing Things Right
   Describe the customer’s perception of where improvement is needed in the way you provide the service. To what extent would the customer say there was sufficient sharing on “how to get things done” between him/her and you? Why?

10. Process
    What data do need, but do not have, to accurately reflect your customer’s concerns and expectations?

11. Change
    What actions can you take to overcome gaps, but have not taken? What has stopped you from taking these actions?

    Now you can decide what Gaps you have with your customer. Good news! There are only six major Gaps: Satisfaction, Value, Do Things Right, Do the Right Thing, Process and Change.

    Be careful, though. It's easy - and misleading - to dump everything in the "Satisfaction Gap" pot. You'll need a thoughtful discussion with your colleagues, staff and managers on where to focus your efforts.

A company owner sits slumped over his desk. The monthly sales figures are down again and the prospects are bleak for the months ahead. “I’m going to be forced to lay some people off,” he said. “I’ve tried cutting costs but it’s not enough. This is a small business and everyone that works for me are like family. How am I going to decide who stays and who goes?”

Many small business owners are facing a similar scenario. They must answer the difficult questions: How can I cut payroll costs without destroying employee morale and trust? Should I let my employees know the company is hurting? What if the economy bounces back?

Here are some strategies to consider:

• Tell your employees how the business is doing, during good times and bad. Many managers feel if they’re honest with their employees about the company’s financial position, that the employees will either ask for more money or leave. Surprisingly, the facts don’t support this common belief. Employees that are made aware of the company’s position feel respected and are more inclined to help out where they can.
• Ask employees where they see opportunities to cut costs. They are often the first ones to notice the areas that need trimming. Too often, the first place owners make cuts are in the head counts. If you make every attempt to cut expenses, to avoid layoffs, employees are much more willing to reduce other expenses.
• One method to reduce costs is pay cuts, as the owner you should be the first to take a cut before asking others to do so. When employees see that you are making ever attempt to reduce costs they will willing to help. One company owner was shocked when the employees offered to take unpaid time off.
• Meet with employees to brainstorm creative ways to find new sources of revenue. Don’t forget to ask current and past customers for their input. During tough times, many companies chase new customers and miss the opportunities right under their noses with their old customers.
• Other alternatives to layoffs include work-sharing and early retirement. The work-sharing strategy enables teams to stay together. Employees work few hours and often retain their full benefits. Another way to minimize the number of employees laid off is encouraging older workers to retire early.
• If you must cut employees, give them as much notice as possible. Treat them with respect, give them as much severance pay as you can afford. Provide either in-house or outsourced options for career transitioning. Some companies offer laid-off employees a rehiring bonus in hopes that when the company recovers these employees will return to work. How you treat laid off employees will have a huge impact on the morale and loyalty of the surviving employees.
• If you hope to re-hire the laid-off employees make sure you keep in touch with them. Let them know that you still consider them part of your team. Keep them posted on the company’s situation. It’s more cost effective to re-hire than to train new employees.

The decision to layoff or downsize is never easy. Talk to employees about the financial situation the company faces. Good or bad, employees want to know how the company is doing.

Does your company want a competitive edge? Then pay close attention to the people side of your business. You know what I mean ... the scary ‘touchy feely’ HR stuff. HR, also known as human resources or human resources management can be broken down into two key activities:

• Attracting/hiring the best employees
• Keeping your best employees

HR isn’t rocket science, it’s based on good old common sense, decency and doing the right thing. These are five HR practices that you can implement right away that will prepare your company for future growth.

1. Always be on the lookout for top talent
Do you have a limited recruitment budget? Then consider building your own database of talented people. The next time you meet someone who impresses you with their superior service level or expertise ask them for their contact information and put them in a database. When it’s time to hire you’ll have a database full of talented people that you have already pre-screened.

2. Learn interviewing skills
You can’t fly by the seat of your pants when it comes to interviewing. This is one area that requires some specialized training to be effective. Take a course on behaviour interviewing, or at the very least, obtain a list of behaviour-based questions to use when interviewing.

3. Competing with larger employers for top talent
How can you compete against the ‘big guys’ for the best people? Small companies can be more flexible with compensation packages and non-monetary benefits than a large company.

Here’s a list of low/no-cost perks:

• Option to work at home
• Summer hours - Friday off or half day
• Flextime and casual dress days
• Child care and elder care
• Coffee/snacks and subsidized lunchrooms
• Tuition and professional memberships

4. Be a better leader
The number one reason people leave a company is their relationship with their managers. As a manager, you must be a good leader. A good leader needs to motivate and inspire his or her team to meet their shared objectives on the job.

You need to …

• Treat your employees like customers
• Lead don’t commanding
• Wear all the hats - coach, leader, strategist, supporter and motivator
• Get employee(s) feedback
• Conduct annual performance reviews

5. Be clear
If you want to retain top performers you need to have a clear and well-run company.
Suggestions on how to keep the communication lines open:

• Have policies and procedures in place
• Don’t skip the orientation of all new employees
• Get people involved in making decisions
• Communicate with your people on an on consistent ongoing basis
• Be clear about the company culture, goals and philosophies

People who have a dream of building a great company know the key to their success is getting and keeping the right people. In Jim Collins book Good to Great, the chapter “First Who … Then What” suggests to get the right people on the bus, in the right seats and the wrong people off the bus, then figure to out how to take the bus somewhere great.