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KEY PEOPLE FOR YOUR COMPANY

"Your friends may come and go, but your enemies accumulate."
Anonymous

TAKING ON PEOPLE FOR THE RIGHT REASONS

Very few people can or want to go it totally alone. Even the Lone Ranger had Tonto. There are many reasons for this urge to surround yourself with others, some good, some not so good.

Some entrepreneurs build up excess staff, for example, out of feelings of insecurity, a feeling that theirs is more of a real business if there are a bunch of employees milling around. Many want associates and employees to counter the stark loneliness of entrepreneurship compared to the camaraderie of a corporate environment. Others need a cheering section. But these are all poor reasons for taking on partners, associates, or employees.

Last year, a client of mine returned home to meet with his accountant after an arduous, week-long business travel adventure. After the meeting, he fired his 14 employees, put his 6,000-square-foot office complex up for lease, and went home to announce to his wife that he was moving his business back into the spare bedroom where it had started a decade before. One year later, he has done about 40% as much gross business as the previous year, but kept more money for himself and his family. And he calculates that the extra hours of work he has to do for himself are offset by three-to-one by time saved not dealing with his employees' personal problems, petty disputes with co-workers, and so on.

Of course, not every business lends itself to such dramatic downsizing and simplified operation, but the point remains: too often, entrepreneurs take on people for the wrong reasons.

The right reason to add people to your venture is to contribute to increased profits. There was a time when I would have said that this was the only right reason, but there are others. You may choose, for example, to employ a person who makes your life easier, handles problems for you, and frees up some of your time for personal or family activities, even if, in hard dollars, that person represents expense, not profit. As long as you do that knowingly and deliberately, fine.

The other very good reason is to obtain creativity and experience you cannot provide. Most successful entrepreneurs develop and depend on a small circle of close, trusted associates from their network of partners, key employees, friends, family, even peers, for input, encouragement, and support.

Andrew Carnegie described the formation of such a team as "the master mind concept." The greatest caution that Carnegie, and his protege, Napoleon Hill, had to offer was about choosing the people you include in your master mind group or groups. The need for harmony, these men pointed out, is crucial.

In the entertainment world, we can look at the enormous success and longevity of the "Tonight Show" and see an effective master mind group: Johnny Carson, Ed McMahon, and producer Fred DeCordova. In the infommercial business, I'm proud to be part of the "brain trust" at Guthy-Renker Corporation that yields successful infommercials such as "Personal Power with Tony Robbins," the "Victoria Principal Skin Care Program," and the Entrepreneur magazine show, "Be Your Own Boss." Different Guthy-Renker projects involve different members of a master mind group of about a dozen people including writers, producers, technical people, product development people, and marketing consultants. For my independent productions, I, too, have a pool I draw from for a quality master mind group for each project.

You will no doubt be eager to develop a team of people you can work with in your business. It's important to exercise caution in assembling your team. And you should be very aware of the problems that can arise.

TAKE OFF YOUR ROSE-COLORED GLASSES

Because entrepreneurs tend to be optimists, they generally view people in their best light. But that may be unrealistic and regrettably, this attitude can lead to frustration more often than to fulfillment. As hard as it may be to understand, some people just do not want to be motivated, to be helped, to be coached, to improve. And, when you try to force it on them, bad things usually happen.

On more than one occasion, I have made the mistake of bringing on a partner with unrealistic expectations. In one case, I brought in a close, personal friend as an executive of a company I had acquired, but I did so without considering the full picture. I saw him as I wanted him to be, not as he really was, and I tried to make him into someone he wasn't prepared to be. The end result was the destruction of a friendship and significant expense to me.

With these experiences under my belt, I've developed some opinions about the special qualifications to look for in key associates.

HOW TO CHOOSE YOUR KEY PEOPLE

Entrepreneurs tend to leap between extremes of refusing to delegate tasks to delegating wildly, sloppily, and hastily. The most important person in the entrepreneur's business life will be very good at running behind, scooping up the pieces, and making sure initiatives get implemented. This key person has to cheerfully accept all this responsibility and, often, read the enttepreneur's mind!

This person can't worry about who gets the credit for success or who to blame for mistakes, He or she has to be secure enough about his or her own worth to not need recognition from afar. He or she needs to be very results oriented.

This person also needs to be good at creating and fostering cooperation among others. Because the entrepreneur often moves very quickly and assertively, he or she sometimes runs over other people's sensibilities. Somebody has to clean up that mess, too.

Behind just about every high-profile, highly successful entrepreneur, you'll find several of these key support people. These behind-the-scenes people are much like assistant coaches of major basketball or football teams. The high-profile, head coach does the interviews, has the camera's eye, and gets the glory (or the criticism). But that head coach couldn't get through a game without the team of assistant coaches.

Last, the entrepreneur's key associate has to have great maturity in his or her handling of problems. This means no panic, no emotional overreactions -- just the calm voice of reason. I know several entrepreneurs who have just such people working with them, and they are very fortunate. One real estate broker I know pays his executive secretary $125,000 a year plus perks. Some of the few people who know of this think it's outrageous, but it is good value for what she does -- and good business.

IF IT'S NOT MEANT TO BE...

Very few business relationships go the distance. That's why the smartest entrepreneurs develop dissolution agreements at the start of relationships. I know that I will never again take on a partner without such an agreement.

When it becomes evident to you that you have a "cancer" in your business, you cannot afford to hesitate or procrastinate for even a day. Cut out the cancer before it spreads. And this goes double for cancer within your master mind group. If vour relationship with a key person deteriorates and there is no hope for recovery, you cannot afford the luxury of keeping that person around.

When you "divorce," do it as decisively, cleanly, and courteously as possible. Avoiding unnecessary animosity is important for many reasons. It's an energy drain. It can block sensible negotiation and settlement. Biting your lip until it bleeds for a few days while getting the person out is infinitely preferable to bleeding for years from vengeful negative attacks. If there's anything reasonable you can do to diffuse the other person's anger, do it. On the other hand, if bloody battle is unavoidable, make it quick. Do what you must do to protect your business.

© Dan Kennedy 2005. All Rights Reserved.