Top 5 Small-Business Posts of 2016 from the WSJ’s Experts Blog

As seen on The Wall Street Journal. Dr. John Sullivan makes the Top 5 Small Business Post for 2016. (January 23, 2017)

How can small-business owners find the best candidates for the job, and then select the right finalist? How can they coach those hires through hard times on the job? And how can they infuse their businesses with the right kind of vision and culture?

The Wall Street Journal’s Small-Business panel on The Experts blog weighed in on these and other challenges for small-business owners in 2016. You can read what they had to say throughout the year here. And below are five of their most-popular posts of the year.

The Experts is made up of industry thought leaders from business, academia and nonprofits who weigh in on the big issues they see in the field. It is a part of the digital presence of The Journal Report online.

1. Why I Look for Longevity on Résumés

More and more hiring managers no longer view longevity on a résumé as a positive attribute. Some believe it indicates the employee lacks diverse work experience; others that the employee is complacent, or is afraid of change. This could very well be the case, but to me (and I may be coming from an old school of thought), stability on a résumé is something that hiring managers should still value. It can demonstrate loyalty, dependability, expertise and commitment.

More specifically, here is how I evaluate longevity in a potential employee, in an attempt to see if it should be embraced, rather than dismissed.

Accomplishment of long-term goals. Longevity is an opportunity to measure if someone was able to set and achieve long-term goals. If an employee has been with a company 5, 10 or 15 years, I look to see where they have taken their career during that time. Have they been promoted, or have they grown in their role and been given more responsibility? Have they earned new degrees or certifications? Have they become involved in industry associations or developed their personal brand?

Developed thought leadership. The longer someone is with a company the better they are able to truly understand the industry, business and the role. They can better develop their thought leadership within the space and share that knowledge. This is something job hoppers, who spend mere months at a company, aren’t likely to provide.

Meaningful relationships. Longevity shows me that someone was able to commit to working with individuals and within groups and has developed meaningful relationships with others, both internally and externally if they were client-facing.

Culture. Someone who spent substantial time with a company may have seen the culture shift and the adjustments that came as a result of that. They are able to bring that perspective to the new organization with deep understanding and relevant examples of how to handle any upcoming changes in culture.

All this is not to say that people with “hoppy” résumés are not good hires. Many have legitimate reasons for shorter stints with previous employers. It may be that they had to take time off to care for a relative, or the company had bad management so they quit after a short period of time. It happens. But if the candidate has a new job every two to three years, that tells me a couple of things: 1) They leave when there is conflict, and 2) They value short-term money over long-term opportunity.

Most leaders don’t want to spend time and money training and developing someone who is going to take what they learn elsewhere after one year. It doesn’t make sense from a productivity and monetary standpoint. If you overlook longevity, your hire may may soon hop away from your organization, too.

–Tom Gimbel (@TomGimbel) is founder & CEO of LaSalle Network, a national staffing and recruiting firm headquartered in Chicago.

2. The Workplace Sophomore Slump—and What Bosses Can Do About It

Year one of anything is new and exciting. Whether it’s freshman year of college, a new relationship or marriage, or the first year of a job at any stage of someone’s career. Then year two hits, and what was once new starts getting repetitive. Things start to get stale and aren’t as exciting. This is known as a sophomore slump.

Being in the staffing and recruiting industry for two decades, I see this all the time in the workplace. New hires join a company and in their first year they’re aggressive, motivated and going 100 mph. They’re asking questions to get better, and are excited to learn more about their roles and the business. Then year two comes along, and it’s not fresh anymore. That initial excitement is gone, and as a result employees become less engaged, leading to a dip in productivity and confidence.

Realistically, we can’t go 100 mph every day of the year. At some point we all have a temporary slowdown, but it should be just that – temporary. At some point things have to rebound, but managers need to step in and help. Here’s how:

Address it. First thing is having that tough conversation. In a great scenario, employees already know they are in a slump, but other times they don’t see it. Managers can’t assume employees will approach them about it. If you notice that an employee is in a slump, talk to him or her about it and share specific examples, whether it’s about the employee contributing less during team meetings or not showing excitement when put on a career-building large project.

Change things up. Add variety to the workday. If nothing is changed about employees’ responsibilities, you can’t expect them to get better. As the saying goes, insanity is doing the same thing over and over again but expecting different results. You’d be surprised what can re-engage somebody. It could be changing where the employee sits or putting him or her on a project with different people. A new project with new co-workers could help the employee get competitive again.

Connect them with others. Encourage slumping employees to talk to others. That could involve a formal mentorship program or simply asking another person who has gone through something similar to take the employee to coffee or lunch. The more-experienced employees can share how they overcame the slump and stayed motivated throughout the process. For anyone who is in a rut, it’s encouraging to hear the rebound stories of others who have come out of it and became top performers.

Create a plan. Work with the employee to create a step-by-step process of what he or she can do to improve. This plan could include workshops to attend, books to read or people, internally or in the industry, to speak with. It’s important to do this with the employee, not for them, so the employee can offer input and ultimately be more invested and willing to execute it. Then, hold the employee accountable to doing each step and meet weekly to discuss what progress has been made. Open and frequent communication is necessary.

Praise them. If an employee was working hard in year one and had no praise or acknowledgment, that could be one reason for the dip in year two. Employees may not be motivated if they aren’t recognized. It’s crucial that managers celebrate the small wins publicly. It will help the employee regain confidence and stay positive.

Go back to the basics. Sometimes going back to what once worked can fix the problem. If there was a process that the employee steered away from over the year that used to produce results, go back to it.

In the end, the effort you’ve made to identify the slump and reach out to the employee can, in itself, help correct the problem. It signals not only an appreciation of their previous hard work, but your belief in their ability to do better, setting high expectations for their continued success.

–Tom Gimbel (@TomGimbel) is founder & CEO of LaSalle Network, a national staffing and recruiting firm headquartered in Chicago.

3. Don’t Mistake Perks for Corporate Culture

Too often, companies confuse perks and culture. Leaders think that to create a great culture, they should go purchase ping-pong and pool tables, get a keg for the office, or offer four-day workweeks. But these are all perks, not culture, which are two very different things. If a company only focuses on adding flashy perks, they may attract an employee, but they won’t retain them.

Don’t get me wrong, perks are great, but if there are beanbag chairs and no one likes each other, that doesn’t accomplish much. Allowing your employees to bring dogs to work is a perk. Texting an employee after they had to put their dog down is culture.

Culture is made up of emotion and experiences. It’s the intangible feelings created by tangible actions. It’s about caring for your people and creating a sense of community that allows employees to feel connected to something bigger than their individual role. It’s allowing them to feel comfortable to be themselves. Culture is creating an experience that employees wouldn’t otherwise be able to have. It’s spending the time to actually listen and support them in their personal lives, both good and bad. It’s about asking for their opinion and then acting on the feedback.

Perks are short-term happiness. They will attract talent, but if companies aren’t investing in professional and personal development, if they’re not willing to spend the time listening and gauging individual motivators, if there is a lack of empathy for an employee who is struggling with a personal issue, the employee will leave as soon as they are offered a higher paycheck elsewhere. It’s like a relationship: If all you get are flashy gifts from your significant other without any emotional investment or support, it will fizzle.

Culture is transparency, and that is a two-way-street. If leaders expect their staff to be transparent, they too have to be transparent with their staff. They stand up in front of their co-workers and share their mistakes that have cost money, damaged confidence and produced tears and heartache. They share mistakes to show employees, new and old, that if you are running 100 mph, mistakes will happen, but the future success will overshadow them. That you can learn from them.

What about the companies that have their core values of integrity and honesty painted on their walls, but when influential employees go against them, they’re not penalized? That’s fake. Culture is when leadership removes someone from the organization who is bringing others down regardless of them being the company’s top producer. They are dismissed because that is the right thing to do for the team.

Culture is holding people accountable. Pushing them to be better. Training them to learn how. Developing their skills and then allowing them to execute the directives. When people are challenged and pushed and they become better, you are establishing culture.

Building a culture is hard work. It’s not a one-month or one-year initiative. The truly great places to work—the ones that get all the recognition and accolades—didn’t start investing in employees for the awards. The awards were ancillary.

An employee who thinks of jumping ship can compare perks easily, but culture is much harder to evaluate. Instead of focusing on temporary benefits, leaders should focus on creating an environment which makes your company hard to leave.

–Tom Gimbel (@TomGimbel) is founder & CEO of LaSalle Network, a national staffing and recruiting firm headquartered in Chicago.

4. How Startups Can Avoid Hiring an Employee With a Victim Complex

In a small business, where every hire is crucial, one of the most dangerous hires is someone who sees himself or herself as a victim. These productivity-and-morale killers are disproportionately poisonous to a small company’s culture. Here’s how you can spot them during the recruitment process, before it’s too late.

1) They play the blame game. Throughout their professional and personal lives some folks are unable to internalize responsibility for their actions. Every time something goes wrong in their careers, it is always someone else’s fault, invariably someone who was “out to get them.”

Now, it’s possible for anyone to become embroiled in a bad employment situation. Nearly everyone at some point in their professional career has been treated poorly in some way. However, if a candidate’s repeatedly negative comments make it clear that such “mistreatment” is a recurring theme throughout their careers, the warning bells should sound and you should quickly cut bait.

One of two things is happening in such cases. The person either repeatedly exercised bad judgment that led them to accept unsuitable jobs or else they lack the self-awareness to accept and share the responsibility for their career setbacks. Either way, you do not want them to taint your team.

Seek the reasons behind the candidate’s setbacks. Invariably, the blame will lie everywhere except with the prospective employee.

Red Flags: “The marketing department never gave me enough qualified leads, the VP sabotaged my team.” “The developers wouldn’t build the features we needed to win the market, they never listened to me.” “My competitors were crooks who lowered their prices just to win deals. It was clear they were out to destroy the company.”

2) They externalize failure. Healthy startups have a culture of accountability. Victims cannot be held accountable, because it is never their fault. There is always some other factor responsible for their failures. This mentality limits their ability to learn from their mistakes and fosters a culture of finger pointing and blame.

Effective employees internalize their failures and setbacks. They honestly assess what went wrong in order to avoid similar mistakes in the future. For instance, if a sale is lost to a competitor, self-aware employees examine what they could have done differently during the sales process, rather than deriding the lost customer as “stupid” or alleging that a competitor beat them using nefarious tactics.

Red Flags: “They never gave me the resources I needed to succeed.” Or “My team was weak. I could never hire good people because my boss wasn’t willing to pay market salaries.” “The founders couldn’t raise the capital I needed to execute my strategic plans.”

3) They claim single-handed success. To the victim, success does not have “one hundred fathers.” Rather, it is the result of their intellect and hard work. Victims overvalue their contributions and exaggerate the degree of their involvement in successful initiatives. Few successes are achieved by just one person. Self-aware candidates freely acknowledge the contributions of their teammates, bosses and other stakeholders.

Red Flags: Frequent use of, “I and me” instead of “us and we.” “I generated 53% of the company’s sales.” “My deals kept the company afloat.”

4) They distance themselves. Victims describe their past co-workers as if they were never a member of the organization, using pronouns such as, “they” and “them.”

Red Flags: “I tried to tell them that their target market didn’t make sense, but they wouldn’t listen to me.”

5) They believe everyone is clueless. Victims are the sole source of wisdom in their universe. Co-workers are clueless because they fail to appreciate the victim’s brilliance.

Red Flags: “My boss didn’t know what she was doing. She was totally clueless.” “The CEO and the investors didn’t have a clue, despite my repeated warnings that their strategy wouldn’t work.” “Marketing couldn’t generate decent leads and their collateral materials were terrible.”

Marriage counselors advise young lovers to never marry someone with the intent of changing them. Follow this advice when recruiting. You may feel empathy when interviewing a victim, but never allow your emotions to result in a bad hire. No matter how much support or praise you heap on them, it is highly unlikely you will change them.

If left unchecked, a victim’s vitriol can lead to an “us versus them” divide that will impact your organization’s productivity and morale.

–John Greathouse (@johngreathouse) is a partner at Rincon Venture Partners, a venture-capital firm, and previously a serial entrepreneur. Mr. Greathouse also teaches at University of California at Santa Barbara.

5. The ‘27 Names’ Strategy for Recruiting New Employees

One of the toughest challenges in business is to find qualified, experienced workers. Especially in industries like tech or manufacturing where the unemployed talent pool is small, managers need to magnify their recruitment efforts and get creative, and that includes overcoming a reluctance to target talent currently working for competitors.

One approach hiring managers are using is what I call “27 Names.” This name-gathering technique leverages every open position as a means to find other qualified prospects.

Here’s how “27 Names” works. Start by telling interviewees that being well-connected is an assessment criterion. Then, during your interviews with the top five candidates, ask them to list three qualified workers in this job category at competing firms. That will net 15 names.

Ease any fears your finalists may have that they’re giving you the names of people you might hire for their prospective job. Make it clear that – as a finalist – they are only up against other current applicants for the job at hand. Applicants – especially those attuned to the social media world will recognize that who they know is a reflection on their own qualifications.

Next, expand to the next tier of hot prospects — the people your final hire is submitting as references. Because the people a job candidate submits as professional references are almost always more experienced or more senior than the applicant, consider each as recruiting targets. So that’s three more names, a total so far of 18.

During onboarding, ask your new employee to name the three best people that they would recruit away from their last firm. We’re at 21 now.

A few months after your new hire is on the job – if he or she is performing well – call the original three references (whether you recruited and hired them or not) and ask them to provide the names of two individuals that are equally as good as the original job candidate that you hired with their recommendation. That’s two more names from three people – a total of six new names, so we’re now at 27.

Go ahead. Target the best people in your sector. Use this multiplier to reveal the names of the people to watch and potentially to poach. They are the people whose talent and reputation can take your company to the next level.

–John Sullivan is a professor of management at San Francisco State University and a talent-management thought leader from Silicon Valley. If you found this article helpful, please connect with me on LinkedIn Facebook and Twitter

About Dr John Sullivan

Dr John Sullivan is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high business impact; strategic Talent Management solutions to large corporations.

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