Hiring and Firing OR Keeping Crazy, Donkey and Dufus Off of Your Team

When you first start, it’s just you. But eventuallyy, you need a team.

1. Turnover is bad for business.
Proper hiring creates a good team, and a good team lowers

turnover. You are trying to get thoroughbreds in the stable. You want rockstars in the company. A good team lowers turnover. Turnover is expensive in lost productivity and in morale within the team. When the good people leave, everybody wonders, “What is wrong?”

We began meas

uring two types of exits: life change (had a baby, move, etc) or turnover. We source the reason for the exit.

Team members leave or are let go most often because they should never have been hired in the first place. Do a better job hiring. Take more time when filling positions. Most peopl

e are doing the business and are inconvenienced by interviewing people. We get in a hurry and hire the wrong people.

Every single person is in marketing. They affect our reputation. Even the leaf blower is in marketing. It takes 60-90 days and 9 interviews to get hire by

the Dave Ramsey organization. We don’t want crazy, donkey or dufus in our organization. A proper hire performs better, is less likely to cause problems, and will be more likely to stay.

2. Components to a good hire.
When posting a position, give enough information for candidates to rule you out without wasting your time. Word your posting in such a way as to attract the personality and character traits you want.

The EntreLeader’s 12 steps to a proper hire:

• Pray. “God, please send the person you want. Keep your crazy children away.”
• Advertise and get referrals. Good people run with good people.
• 30-minute interview. The first one should be a drive by. It should be quickly. Listen 20 minutes and talk 10.
• Resume and references. Useless. Resume will give you background and education.
• Personality test. Run the DISC. Not a deal maker or breaker. Puts people in 4 different styles. It’s got to fit the job. It has to fit the team. You look at the strengths and weaknesses of the chemistry. Kindness requires clarity. You have to see how this person will fit with the leader.
• Do you like them? Talent is not enough. Interpersonal skills trump talent every single time.
• Do they light up when they talk about the position? You want somebody that light’s up!
• Personal budget and mission statement. Can they pay their bills on what you pay? I love my people. It is my job to serve them by making sure they can pay their bills on what they make.
• Compensation calculations, benefits and policy review.
• Key Results Area (KRA). Have a job descriptions. Write down 3 things that describe what winning looks like. Give details about that. If they are not winning, then they know they are not staying around.
• Spousal Interview. Go to dinner with the spouses. Wives tend to have a crazy antenna. Try to find crazy and avoid it.
• 90-day probation for the company and the person. You don’t want to keep people that don’t fit. You won’t know until they get there.

The EntreLeader is looking for a team member with a combination of opportunistic motivation and philosophical motivation. They see the train is going somewhere and they see they higher calling. (Where there is no margin there is no ministry.) Never sell a J-O-B. You don’t want people that just collect checks. Always have an opportunities available; sell “work that matters.” Set short initial interviews that are no longer than 30 minutes. If the candidate is preoccupied by benefits and compensation, you will never be able to do enough to keep them happy.

3. When team members fail.
Team members eventually have to perform or they have to leave. We pour into people. Our policy is to treat people how we want to be treated. This answers a lot of questions. When I address things, I am kind, but I am very clear. I do not sugar coat things.

Start by identifying the root cause: leadership failure, personal problem, incompetence.

4. When the failure is caused by leadership.
Good news: Leadership failure is a variable that’s easily fixed. The problem is YOU – fix it.
– Do they know their job? Write down what the person needs to be doing. KRA.
– Did you hire someone who didn’t fit the position?
– Were their KRA’s clear?
– Were you there to train?
– Were they given the tools to win?
– Were conflicts left unresolved? Some people shut down when there is drama.

5.When the failure is caused by a personal problem:
People matter. Do unto others.

The first action step is to quantify the extent of the personal problem. It may be a small problem. It may be a big problem. You have the power to do the right thing. The reason why a lot of employees aren’t loyal to companies is because companies are not loyal to their employees. If you treat you team like family they will act like family. Do you need to pay for them to get some professional help?

Incremental progress on the problem must be seen so an expectation of future performance be there. Otherwise, they have to work somewhere else.

6. When the failure is caused by incompetence:
Make all errors here on the side of giving too much grace, which is what you want. Sanctioned incompetence demoralizes. The Entreleader must take action to correct the problem.
Repairable incompetence is caused by lack of skills. We can help fix that. There can be behavior modification, training, and mentoring.
Non-repairable incompetence includes moral failure, lack of integrity and laziness.

7. The root cause is determined…now what?
If the business already has debt, develop a three-to-five-year strategy to eliminate it by allocating a percentage of monthly profits to debt reduction.
When an EntreLeader operates his business using these financial principles, it greatly insulates them from risk and increases the probability of success.

The EntreLeader allocates a percentage of profits to:
– Debt reduction (if you have debt)
– Retained earnings for emergencies or opportunities

Bulletproof Principles for Money, Debt and Funding Your Future

In this session Dave applied FPU principles to the business. They are solid, great reminders. Here are some of the principles:

1. Do the Accounting.

Be diligent to know the state of your flocks and herds. People that don’t do accounting and can’t figure out why they can’t win are going to fail.

The EntreLeader has separate checking accounts for personal and business and never uses the wrong one.

You have

to separate your business from your personal.

At least 25% of monthly net profit should be set aside in a separate tax savings account to cover the cash needed for quarterly estimates to the IRS. Book keeping leads to cash flow problems and they get behind with the IRS. That is the #1 pro

blem for failure in small business.

2. Budgeting.
The EntreLeader knows that, to win in business, you must plan money on paper, on purpose, before the month begins; it’s called a budget. You have to project ahead of time.

Don’t build a tower without first coating the cost.

3. Act Your Wage.
Rationalizing the purchase of expensive luxuries in the name of “business” is a common mistake of small business owners.

The EntreLeader never uses his/her business as a rationalization to buy something not needed to make a profit.
EntreLeaders don’t fall for the tax deduction myth of purchasing something that is not needed purely for the tax write-off.
The borrower is always slave to the lender. Even in business! Cash flow problems are created when you lease everything and finance everything.
Borrowed money drastically increases risk. Borrowed money also magnifies our mistakes. We are going to mess up. Borrowed money hurts or even destroys cash flow.

4. Mythology.
Myth: Borrowed money is needed to start or expand a business.
Truth: Starting or expanding more gradually and with cash lowers risk and minimizes mistakes. When you trip and fall, you won’t break your neck.

Myth: A line of credit is need to cover cash flow fluctuations. Plan for it! Predict it and prepare for it!
Truth: Cash flow fluctuations can be predicted with good forecasting and budgeting. Plus, having cash saved in the business causes the EntreLeader to cover their own needs.

Myth: A credit card is needed for online/phone purchases and for travel.
Truth: A debit card will do everything a credit card will do, except create 18% debt.

Myth: A credit card will help me keep my expenses categorized.
Truth: A EntreLeader uses an accounting system, so a debit card does the same thing.

Myth: Large equipment or real estate purchases require a business to use debt. (A lot of businesses run debt free and grow at the speed of cash.))
Truth: The EntreLeader does four things to avoid risk and mistakes on large purchases:

• Pays cash.
• Rents. (What’s my back-hoe? What’s the thing I think I HAVE to buy, but could really live without? You are not in the back-hoe business. What business are you in?)
• Outsource. (There’s a guy with a back-hoe that will work for cheap.
• Often buys used. (Buy a used back-hoe.)

5. Savings Make the World Go ‘Round
Wise people save money.
Having cash saved is vital for the EntreLeader to survive and prosper. Saving in business is called retained earnings. (Emergencies, opportunities, etc.) It is really hard to stay out of debt in business and it’s really hard to save money. This helps you be prepared for cash-flow fluctuation.

Retained earnings can be used for:

• Emergencies
• Invest back into the business
• Capitalizing on Opportunities

A good rule of thumb is to retain 50% of your annual expenses in a money market type account.
Each month, a percentage of profits should be set aside for growing retained earnings consistently as business grows.

6. Be Generous
Be generous is the hallmark of people who live successful lives and who operate businesses with soul.
Be generous with your products and services to the community and to your team.
The does not specifically say to give or tithe on business income.
However, the Bible does say to tight and give from personal income, which includes profits from business.
The tax implications are the same, and there is more privacy and anonymity when giving the majority of cash gifts from personal funds.

7. Applying the Principles
If the business already has debt, develop a three-to-five-year strategy to eliminate it by allocating a percentage of monthly profits to debt reduction.
When an EntreLeader operates his business using these financial principles, it greatly insulates them from risk and increases the probability of success.

The EntreLeader allocates a percentage of profits to:
– Debt reduction (if you have debt)
– Retained earnings for emergencies or opportunities

Living Your Dreams, Visions, Mission Statements and Goals

This session was taught by another member of Dave’s teaching team, Chris Hogan. Chris did a great job. You can read more about Chris by clicking here. You can also visit his site here: http://www.chrishogan360.com/

People often check out. Goals have to be one of things we are doing. You have to set them and aim for them.

Illustration: As a freshman football player, I had to set goals for the year. By verbalizing and putting my goals out there, I had put myself on the line.

In business, I have done the same thing. We have to focus on setting real goals and find someone we can verbalize them to. Put it down on paper and tell somebody so that you have accountability.

Goals are a lot like skeet shooting. Its about airing ahead of where you want to go and fire in that direction.

Start with a Dream, End With a Goal

Dreams

”Success is the progressive realization of a worthy goal or idea.” — Earl Nightingale
The success we have is moving toward the goal that we set. We have a level we want to attain. We have to focus on that. Too often we want to get the goal, but forget there are steps to get there. It doesn’t happen overnight. Give yourself a break.
Have a realistic goal and ease off of yourself. You may be the only person that believes in yourself.

Dreams are wishes that seldom happen. They are just in your head.

Life does not hand you your dreams; you have to make them happen. At the end of day, you have to make it happen! If you don’t really want it to happen, do say it!
Dreams are essential to winning, but they must come out of the clouds and be more tangible and touchable. You have to have the mindset that your product is necessary.

Vision

A more tangible, touchable dream is a vision.
“Where there is no vision, the people perish.” — Proverbs 29:18
People have to be able to know what direction we are going. They have to be lead. They need us to share our heart and soul with the people on our team. We have to be vulnerable. We need people with the head, heart and habits of winning on our team.

Mission Statements

A mission statement is like an out-of-bounds marker. It defines what you are not. We have to have focus.
A great mission statement keeps you track. Send out your mission statement and ask them, “Does this describe me?”

Career Coach Dan Miller says a mission statement should include:

• You or your company’s skills and abilities.
• You or your company’s personality traits.
• You or your company’s values, dreams and passions.

Passion is a key ingredient that can overcome other weaknesses. Don’t forget why you started. Fish for the positive reasons.

Goals

Mission statements that are ready to go to work is call a goal.
For your goals to have a long-term positive impact, they must include: Career, Financial, Spiritual, Physical, Intellectual, Family, Social, Career. You have to be making progress in each of these areas. If not, you will be unbalanced.

Goals are bite-sized vision. If you are going to accomplish the vision, you need to break it down into bite-sized goals to achieve it.
Goals convert vision into energy. At the end of the day, we have to pull the trigger on something. Get it done.

Goals that work must:

• Be specific.
• Be measurable. Am I making progress? Am I on target? If not, you have to change something. Put a date and a month on it. Calendar books read, money saved, etc.
• Have a time limit. No escape clauses. We need a year of change.
• Be yours. You have to have person buy in.
• Be in writing.

Break everything down into small parts and time frames.
Don’t ask your team to set goals when you have none.

Leading with Goals

For your team to have goals, you must have goals. Don’t go back to doing the same old thing without goals.
Shared goals on a team create communication and unity. You have to spend time together. Unity doesn’t mean sameness. It means we are driving in a direction. You don’t have to like everybody. You have to get along.
Goals on a team are shared when the team develops the goals together. What can we do together this quarter? This year? Get individual buy in.
Individual team members can’t have goals dictated to them; instead, help the team develop their goals.
Management by objective is when team members set individual and team goals within general guidelines.
General guidelines should include several micro-goals that create the result that everyone agrees is needed.
We can spend time doing ridiculous things to avoid facing the things outside of our comfort zone.
Let’s not seek comfort, let’s seek being effective.
They are your goals, but to be walking closely with God, you should be in on His plan. he knows your future and what is best for you.

Establishing Priorities

We can spend time doing ridiculous thing to avoid facing the things outside of our comfort zone.

1. Quadrant of Necessity. (Important/Urgent)
2. Quadrant of Leadership. (Important/Not Urgent)
3. Quadrant of Deception. (Not Important/Urgent)
4. Quadrant of Default/Waste. (Not Important/Not Urgent)

This area can be deceptive, but its important.