Happy People = Happy Profits. I get smiles when I talk like this to CEOs. It's true! When your people are happy, when they enjoy coming to work every day, when they believe in what they are doing, your company will be more profitable.

So ask yourself: What have you done for your employees lately? Are they happy?

Or are they fearful. Are they spending more time spreading rumors about how badly the company is doing than doing the work of the company? Fear is not a productive emotion for a workplace and with all the doom and gloom in the media every single day, you have to know fear is running rampant in your organization.

That is unless you are talking about it. Unless you are actually addressing that fear. If you are talking about it and addressing it, you are eliminating it. But too many leaders tend to think that 'no news is good news' and they would rather not take the time and communicate to their employees how the company is doing.

Or worse, they don't think it's any of their business. They (the employees) have jobs, don't they? And bringing it up (the bad stuff about the economy) will only make them (the employees) more upset! So the better approach is to say nothing and just hope it (all the bad stuff about the economy) goes away.

While CEOs and executive leaders have their hands full dealing with eroding profits and shrinking revenues, it's still the responsibility of those leaders to take care of their people. And taking care of your people will take care of your business.

Are you one of those leaders who just doesn't have the time or the inclination to address tough issues with your staff? Here are five things you can do to bring up difficult topics, help address critical fears, and get your employees back to being productive.

Number One: Ask your managers to ask their employees one question — what's your biggest fear about the company today?

Number Two: Ask your managers to share their answers with all the other managers in your next meeting.

Number Three: Select the top three FEARS and as a group, come up with answers to the top 3 fears.

Number Four: Share those answers at the next All Company Meeting.

Number Five: Repeat this process until all the FEARS are addressed.

Knowledge is powerful. Having your employees understand what is going on and how you and the leaders of the company are dealing with the issues is your responsibility. And it's a darn good strategic planning tool to get your company back in the game of making money!

Even if you aren't driving the same amount of revenue into your business today because of all the economic challenges, that doesn't mean you can't still be profitable.

However, it does mean that if you are spending at the same rate you were before the downturn in your revenues, chances are you are drowning. If you are working with a Profit Plan (budget) you are probably fine. By creating a Profit Plan, you were proactively managing your finances 30 to 90 days out and as soon as you saw your revenues eroding, you started cutting back on expenses.

There is a concept I use with clients called the Profit Zone. The Profit Zone lies at the center of your company's ability to drive profit to your bottom line. All too often as business owners we get stuck on one aspect of profitability — making more money than you spend — not a bad concept. However, what if I told you that understanding your Cost Structure is a Profit Zone activity? How about Customer Satisfaction as a Profit Zone activity? Or Staff Voltage? Happy People = Happy Profit. If you don't believe me, pick up Daniel Goleman's book Primal Leadership. When your people are well taken care of and love working for your company, you will make more money.

It's not a real stretch to see how the delivery of excellent customer service can be considered a Profit Zone activity. Every company strives for exceptional customer service. I would simply ask if you are making the connection between exceptional customer service and your improved bottom line? I would further suggest that having you, the CEO, get that concept isn't enough. I would suggest that there are employees in your company that have the ability to make the extra effort to drive exceptional customer service and if they knew the impact on the bottom line and how that might ensure the longer lifespan of your company they would take customer service a lot more seriously.

At least they would if you did. The concept of the Profit Zone also explains how some employees work right next to your company's profit zone. Your sales staff, for instance, make an immediate impact on your Profit Zone when they sell your product or service. But think about the people in your company that support your sales staff. Do they see their impact on your company's Profit Zone? Or how about the people even further away from directly impacting your Profit Zone — your administrative staff, your accounting or HR staff — do they connect what they do every day with your company's ability to make money?

If you proactively think about your company's Profit Zone as a target that every single employee in your company can impact, the chances of hitting your Profit Zone target every month increases. The more people who are helping you make money, the more money you will make.

How well are you set up to hit your Profit Zone bullseye every month?

Now that you have your employees attention, are you following through on your end? There is nothing that rings more hollow to an employee than the lack of follow through. Remember those weekly, 30-minute meetings you are having with your direct reports? Remember the last question you are always going to ask them? What can I do to help?

If after one of your sessions, your employee indicates that they would like to find a training program that might help them improve an area of weakness, what expectation did you leave them with? That if they found something they could go? Or if they found something to run it by you to see if the budget allowed it? Or did you give them a budget to work within? Or did you ask that they come up with a couple of options and review them with you?

If you didn't get specific about how you were going to help that employee, chances are there will be disappointment on both sides. If you did get specific and the employee came through based on your criteria, you better deliver.

That's the power of communicating and the power of commitment.

It really doesn't matter what the conversation on the front end is. What matters is how you left it before you both went your separate ways. What was the request? What needed to be done? What issues needed to be resolved? And what was the final expectation from the manager and from the employee?

The whole notion of hiring exceptional employees won't work if you aren't an exceptional manager. An exceptional manager communicates well, communicates consistently, communicates often and communicates in writing. An exceptional manager doesn't play the 'gotcha game' — their goal is to set clear and achievable expectations that advance the goals of the company.

The ability to follow through with your direct reports will pay out in spades as your employees learn to look to you to help them succeed. Yes, success is a team activity. Don't let empty promises derail the success of your company.

"How do I get my employees to be accountable?" "Why don't my employees do what I ask them to do?" "I want to delegate more but I just can't trust people to do what they say they are going to do."

Anyone who has ever managed people wrestle with these issues. I've seen exceptional employees lose their desire to be exceptional because of a mistake managers make all the time.

Three words. Not setting expectations.

I know an exceptional employee who has worked for six different companies in the past six years. Every time that employee signed on wanting to succeed. Within a year, that employee had lost all desire and lost their drive to succeed for one reason: the manager never set out expectations, never identified what behaviors they were looking for and was happy playing the 'gotcha game'.

Exceptional employees still need guidelines. They still need to be told what to do. They still need to be told the consequences of not following through. As managers of exceptional employees we tend to think they also come on board with the ability to read our minds. To know exactly what we want, when we want it and how we want it done. And when the employee doesn't meet our expectations, our attitude toward them changes.

And the employee knows it before you do. And they then start questioning themselves which leads them to resent you for not being more open and communicating better with them. And so it begins. The relationship that held so many possibilities is now just waiting for the last straw. Either the employee leaves on their own or they are forced to leave.

If you want your employees to be accountable. If you want them to do what you need them to do. If you want to be able to delegate more, here's the silver bullet.

Never, ever give an employee directions without setting the expectation up front as to:
1) What you want done
2) How you want it done
3) When you want it done
4) What leeway the employee has
5) What resources the employee can tap into
6) What happens if it doesn't get done

If you think that's micromanaging, it's not. It's communicating expectations and it's the key to better delegation, better accountability and better communication.

Now that you have hired exceptional employees (read The Secret to Hiring Exceptional Employees) you want to keep them. And you want them to remain exceptional, right?

So talk to them! I believe 90% of the problems we encounter in our businesses with our employees can be boiled down to one issue:  A lack of effective communications. Not just communication because I know you are talking with your employees. I'm looking for effective communications that fundamentally advance your company forward.

When you hire exceptional employees, they come with high expectations that you are going to deliver what you promised. During the interview process it's not just the prospective employee who is on their best behavior! Remember how you waxed poetic about what a great company you have built and what you care about and how you treat people and how you want people to treat your clients, blah, blah, blah?

Yes, you did. And that's what the prospective employee turned new hire remembered the most. It's why they said yes to your offer! Certainly they were excited about the money and the opportunity and the job itself but they were really pumped about working for you! Why? Because very employee who ever accepted a job is looking for the perfect manager. And you convinced your new hire that you are the perfect manager.

Now live up to it.

At least for the first 2 weeks after hiring your new employee, meet with them daily. Sometimes have them come to your office and sometimes go sit in their office. You are to ask ONE question each time and then listen. The ONE question you are to ask every day for two weeks is this:

Is there anything you need from me to help you feel comfortable in your new job?

That's it. Then just sit back and listen. If they don't answer or the hem and haw, ask it again until you come up with something you can do to help them. You need to know that new employees don't want to ask questions because they don't want to look stupid. And they want you to think they are self-motivated, capable of catching onto things quickly, and good at getting along with their new co-workers. That isn't always the case. In fact, most employees are incredibly unsure about themselves, the work they are doing and even if they should have said yes to this job at all! Self-doubt starts creeping in during this two-week period because everything is NEW.

So they need to know you are there to help. That you are okay listening. That you want to know how they are doing.

After the two-week period is over, now start meeting with them once a week for 30-minutes. The purpose of these meeting is to establish a dialogue that will serve both of you well as you go forward. There are three questions you need to ask during these weekly 30-minute meetings. Ask them each time until the employee brings the answers to the meeting without you prompting. Here are the 3 questions:

1. What did you do last week that you felt good about?
2. What would you like to learn next week to help you with your job?
3. How can I help you?

If you meet daily with new hires for two weeks and then start meeting with that new hire weekly for 30-minutes and ask the three questions, I can almost guarantee you will keep this exceptional employee exceptional. And your company will be paid back ten-fold in the loyalty and the commitment you receive from an employee who feels listened to and valued.

Don't you wish you were able to be crystal clear about what you want your employees to do to meet your expectations?

In too many instances, managers think they are crystal clear about what they want that employee to do. After all, the employee went through the interview process and you spelled out exactly what the job entails, who they would be responsible to, what the job duties were and the hours they were to work. In too many instances, the interview process was the most communication that employee would receive in terms of what is expected. Which is why so many great employees fail.

A new employee works very hard in the first 30 days to prove to you that you made a great decision in hiring them. They do everything they can to show up on time or early, stay late, be on time for meetings, take a 'can do' attitude. They are excited and pumped about working for you and go to extremes to prove their value. They work like they did in their past job. They react to things like they did with their old manager. They behave towards co-workers as they did in a different environment. And unfortunately, none of those behaviors fit what you expect from them on this job.

The role of a manager with a new employee should be one of exploration. Both of you should be exploring what works and what doesn't. As the manager you have to be very visible with that new employee from day one. They need to hear from you what you want done. They have to hear from you how you want it done. They need to hear from you when they do something well and they need to hear from you when they didn't do something well. The ability of a manager to communicate to that new employee the behaviors that will make them succeed is crucial in those first 30 days.

One of my best lessons in this came from the CFO of the marketing communications company I helped run. She said that you need to tell a new employee exactly how a job needs to be performed and you need to ask them to perform it that way for at least 60 days. Once they know and understand how you want the job to be done only then will that employee understand the job well enough to start bringing their own ideas to the table.

The biggest mistake that new employees make is they try too soon to bring their new ideas to the job, often ignoring what has worked. This isn't because they aren't capable, it's because they think that's what you expect. So being crystal clear with new employees involves asking them to listen and learn how things currently run so they better understand what has worked.

New employees need to be told they don't have to prove themselves to you every minute. They need to know you'll eventually want their perspective and you need to give them the chance to review those perspectives with you on a regular basis.

This concept of setting expectations is hard work. It's setting expectations on what you do want done as well as what you don't want done. It's setting expectations around the behaviors you want to encourage and being clear about what behaviors you won't tolerate.

That's why if you hire exceptional employees and you aren't crystal clear about what your expectations are, you are making it impossible for that exceptional employee to remain exceptional. Do your homework. Pay attention in those first 30 days. Adjust behaviors and expectations constantly in order to provide that new employee with the knowledge they need to exceed your expectations. After all, that's what we want as managers, isn't it?

In a previous blog post I mentioned that managing people was the toughest part of our job as business owners. Having hired and fired hundreds of employees over my 30 year history, I think we make this harder than it needs to be. I've watched as exceptional employees were hired for positions they were extremely qualified for and fail. I've done it. Great people join your company and pretty soon they leave either on their own accord or with your help. Both frustrated. Self-esteem ruined. Money wasted.

Let me ask you a question. Do you know what an exceptional employee looks like?

Have you identified the attributes you'd like an employee to bring to your company? Can you articulate what those are? Are you setting up your interviews to dig deep to find out if that person has those attributes?

If you are only basing your hiring decisions on the skills, experience and personality of the people you hire, you are leaving an important hiring indicator out of your hiring plan. That indicator is how you want people to behave when they work for you.

Let's explore some attributes you might want to look for in your next employee. Let's talk about what makes an exceptional employee for your company. I'm only going to suggest some ideas because this is the work you have to do as a hiring manager — figure out what you are looking for, articulate what it is and then ask questions during the interview to find out if the prospective employee has what you are looking for.

1. Adaptable: If you run a company, especially a company that has fewer than 20 employees, you need to make sure the people you hire are adaptable. Are they willing to adjust their plans, their resources and their beliefs to meet the ever-changing requirements of your company? Ask questions that force the person you are interviewing to think about this. If they have already worked in a small business environment, ask how they dealt with the constant change. What was their response when work requirements changed at the drop of a hat. Take an example of a situation that just occurred in your own company that had people scrambling to meet a client need, or a change in service or product offerings or any litany of issues that come up for a company that is just getting off the ground. Those examples are all around you. Use them to see how your candidate will respond. If the person you are thinking about hiring has never worked for a small, constantly changing business — came from a larger corporate environment for instance — they may be hard pressed to really understand how adaptable they really have to be.

2. Accountable: This is a huge issue — one I hear all the time. "How do I make my employees accountable?" By first understanding what accountability means to you. And then being able to explain to the person you are hiring what behaviors you are looking for in an employee who is accountable. Being accountable means demonstrating the willingness to be held responsible to a 'thing', to an outcome of some event and/or to the behavior or performance of both themselves and/or to others. Ask this person to give you an example of when they were accountable to someone or something in previous jobs. If they give you a vague answer, you have your answer. An employee who understands accountability, gets it. Ask about outcomes they were held accountable for in their last job. Don't leave this one to chance. Get this concept embedded in your potential candidate right away.

3.  Optimistic: You want to surround yourself with someone with a negative attitude? Of course not! Then find out how they look at the world. Is their cup half full or half empty? Do they choose to infuse the moment with a reality-based, advancing view of a potential outcome? When they are given lemons do they make lemonade? Yes it's a trite analogy but if you choose to pretend it's not important don't be disappointed when you end up with someone who lets their negative attitude impact your entire company.

4. Resourceful: Are they able to see beyond the standard application of resources to discover an alternative solution or fresh view of commonly held beliefs and/or behaviors? When they hit a brick wall, do they simply walk away and decide that path is blocked or do they figure out how to scale the wall? What examples can they give you that show how they tapped into their brain to figure out another way of taking care of a problem? What if it had to do with dealing with another team member that was creating issues? How did they resolve the issue in order to advance the team? Remember, you are hiring exceptional employees. Exceptional employees have already figured all of this out. That's who you want on your team.

5. Curious:  I love curious people. Curious people are constant learners. They don't take no for an answer. They ask more 'why' questions. They work well with others. A curious person chooses to continually inquire after the truth to what lays behind the surface of any human experience. Wow. They are looking for the truth. And they tend to do so with a non-confrontational approach. Because they ask questions. Wouldn't you like a bunch of curious people working for you? Then add curious to your list of attributes you want in employees and go after people who exemplify this trait.

There are obviously many other attributes you can identify that work well for your company. My challenge to business owners is just this: as you take the time to identify the skills and the job duties you want people to bring to your company, spend even more time figuring out the behavior attributes that you are looking for and look for those behaviors in your interview process.

Oh, and did I mention that once you hire exceptional employees, it's your job to keep them exceptional?  That's another blog post.

The lament goes something like this — “How do I get my employees to follow through on what I ask them to do?” Managing people is the toughest job we have when it comes to running a successful company. There is a  secret that I’m willing to share that will guarantee success when used frequently.

The secret? It’s called managing. And it’s the ability to get work done through people.

Here is a 5 step program I would highly recommend if you are struggling with managing your employees.

1. Only hire exceptional employees
2. Only hire those exceptional employees once you are crystal clear what you need them do to
3. Once you have hired those exceptional employees, set up weekly meetings and engage them in dialogue
4. After you have engaged those exceptional employees in weekly dialogue, you’ll know what they need to do a better job
5. Listen and follow through on what those exceptional employees need

I’ll address each of these 5 steps in follow on blogs. I don’t think there is any magic bullet when it comes to managing employees. I think business owners tend to think ‘if I hire them, the good work will come’. While I believe every single employee comes to the table wanting to succeed. those same employees will fail every time if they don’t have a manager who is willing and able to provide input, feedback and training.

Human beings don’t operate well in a vacuum but the amount of communication that occurs between managers and their employees wouldn’t fill a blog page. Working on being better communicators would serve every manager well and save them major headaches.

Stay tuned for how to hire exceptional employees.

It happens to every business owner from a start up to company that's been around for many years. It causes us, as business owners to someday's just simply sit and stare at our computers or literally to leave our office and call it quits for the day. It's an overwhelming feeling of too much hitting us at one time. It can drive us to make bad decisions or be short tempered to those who happen to run into us as we wrestle with it.

What's IT? Scattered thinking. Every business owner's nemesis as scattered thinking can simply suck the life out of our dreams, our passion and our ability to move our company forward.

Scattered thinking can create uncertainty. It can cause business owner's to procrastinate or worse, simply not get important activities done. I'd be surprised if you are a business owner and haven't wrestled with the downside of this thing I call scattered thinking.

The enemy of scattered thinking is focus. Laser-like focus on the goals at hand. A laser-like focus on what you know are the right steps to take. A laser-like focus on the activities you know will make your company money.

While running a successful company is hard when times are good, it's even more challenging when times are not so good. If a company hasn't created a strong foundation for growth, and surprisingly few really do, the first crack in the dam can send a business on a downward spiral that is hard to stop.

And that's when scattered thinking takes it's highest toll. A business owner may see their revenue plunging, profits eroding, clients migrating away and instead of falling back on a strategy they created in better times — a strategy that was based on banking some cash, cutting back on overhead, doing without that next hire — they react. And since they probably can't react quick enough to really stem the tide, they panic and that panic leads to scattered thinking.

Scattered thinking does not rely on a firm decision making process. Scattered thinking doesn't work from a plan. Scattered thinking sees a business owner grasping at straws hoping they aren't going to get the short one.

So how do you regroup after a bout with your nemesis? You stop and think. You literally stop and think. You have to force yourself to realign yourself with your longer term plan. You may have to ask yourself amid the panic — why am I in this business? What am I trying to do? Where do I want to be in 3 years? If you have a business idea that was doing well during good times, chances are the idea is still good. The problem could simply be you didn't plan on an economy like the one we are living through right now. And since you didn't plan for a downturn, you lose your focus and you let yourself react to the problem instead of manage the problem.

If scattered thinking is a business owner's worse enemy, then the ability of a business owner to focus on productive activities during challenging times is your savior.

So find your focus. Find your center. Find the place where all roads lead to success. It's there. You just have to regroup a bit to find it when everything around you may be crumbling.

Ask yourself these 5 questions:

1) Has my end game changed from when I started my business?
2) Has my ability to deliver on my promise changed?
3) Has my market completely dried up or just become harder to find?
4) Has my confidence taken a vacation and if so, how do I get it back?
5) Do I still believe in what I'm doing?

I can't tell you the outcome because I won't know how you answered. Moving from scattered thinking to focused thinking, however, is completely in your control. What's it going to be?

How will you know when your company is being successful?
How can you avoid problems that could take your company down?

The answer to both of these questions is key success indicators. While most business owners know what these are, too many fail to put them in place. If all you are tracking are the numbers on your Profit and Loss statement, I can guarantee you two outcomes:

1) You will always be 30 days behind the problem
2) You'll never understand the 'why' behind your business

While I'm delighted when business owners pay attention to their financials, relying on last month's Profit and Loss statements is kids play compared to a business owner who identifies, tracks and adjusts their thinking based on their key success indicators.

I continue to urge business owners to take the time and figure out the success indicators for their business. I'm going to give you some ideas to help get your head around this.

The obvious success indicators are Financial ones:
Revenue/Sales
Net and Gross Profit
Cash on Hand
Revenue Per Employee
Net Profit Before Taxes
Debt to Equity Ratio
Amount of Cash Tied up in Inventory
Aging Account Receivables
Average Revenue Per Client

Other ones that may not be so obvious but should be considered:
Debt Reduction
New Clients
Value of Inventory or Inventory Turn Rate
# of Employees at Work
# of Leads Generated
# of Leads that Turn into Prospects
Employee Retention
Customer Success
Employee Success
Projects Completed on Time
Projects Completed on Budget
Billable Hours
Back Orders

I'm hoping this is simply getting you to think about your own business and seeing how some of these might work for you. Or you are thinking about your own. And if you have employees, ask them what they believe are the key indicators for their areas of responsibility. You don't have to do this activity by yourself.

The value of this exercise, selecting and tracking key success indicators, will help a business owner to:
1) Focus on the aspects of their business that will make a difference
2) Improve performance
3) Improve profitability
4) Repeat activities that are working

Start slow. Pick 3 key success indicators that you feel are easy for you to track. If it's hard to track the data, you won't do it. So start slow. Track these 3 success indicators for 90 days and watch how your focus becomes more laser-like.

Remember the old adage that says, 'if you can measure it, you can improve it'.

The bottom line? Tracking the success indicators for your business will eliminate problems before they occur — a huge advantage in tough times!