A million dollars worth of advice: the experts answer some of managers' most difficult...

Running a business takes guts; there's never any shortage of critics ready to pounce on any decision you make. It helps if those decisions are made with some understanding of the management theory behind them. But access to expert advice is not always possible for the owner/manager of small- and

Times are though. How do I motivate my people without money or promotions?

Luckily, money is important but it is not top of the list. In my experience, people value independence, responsibility and a chance to grow.

Rosey Brenan

The way to motivate when money and promotions are scarce is the same as when money and promotions are abundant - respect and recognition.

Wayne Hanna

Managers and employees need more praise than they're getting. Effective praise is sincere, specific, frequent, appropriate and timely.

Carla Furlong

Let people know their work is valued in little ways that really count. Remember their birthdays. Send anniversary and sympathy cards. Take everyone out for pizza. Bring in some home cooking. Lunch with someone new every day.

Wayne McKay

Equity is critical - employees want fair treatment for everyone (that includes you, the boss). Contribution should be what counts, not position or politics.

Wayne Hanna

Employees want to know what's expected of them, so give direction, honest feedback and training.

Wayne Hanna

Motivation is an individual thing so don't assume; ask employees what turns their crank.

Wayne Hanna

Get creative to add challenge - Use job-title changes, job rotations and job re-definitions.

Carla Furlong

Show them how their work contributes to the organization's goal/mission. Include staff in planning and decision-making.

Dugal Smith

In the final analysis, remember that you don't motivate people, they motivate themselves. The most you can do - and the operative word here is do - is create a motivating environment.

Harriett Lemer

How do I deal with the facts I've made a bad decision?

Fess up and get on with rectifying the problem. For example, if you fired someone in a fit of anger, forget about losing face; re-hire him or her. Bad decisions happen; bad results needn't necessarily follow.

Wayne McKay

Get over the guilt; we all make bad decisions frequently. Analyze why it occurred. Determine to what degree the decision was bad only in hindsight (ie. it was impossible to see the situation clearly beforehand). Write down three lessons learned from each bad decision and apply them.

Dugal Smith

Distinguish between a bad decision and a high-risk decision that went sour. Respond to the cause, not the result.

Wayne Hanna

Everyone is talking about employee 'empowerment'. How do I (and my management team) overcome my terror of this concept?

First, recognize that if you're not willing to look at employee empowerment as an opportunity and a challenge, quit your business and become a prison guard.

Derek Mather

Start with empowerment in areas where the stakes aren't high. Do the work of lower-level employees to understand what empowerment would mean to them. Bring in a facilitator to coach everyone through the process. Examine areas of existing empowerment and, one would hope, gain confidence from this examination.

Dugal Smith

Understand that empowerment is not about employees making any decision they want, just those within their sphere of expertise. Create parameters which define expected proficiency levels. Bolster employee competence by providing information on the big picture - the organization's mission, goals and strategies.

Wayne Hanna

I've cut costs wherever I can. What do I do if it's not working?

Cheer up, you're not alone. Research of more than 1,000 companies in 1991 by The Wyatt Co. found that downsizing failed to produce expected savings 64 percent of the time.

Carla Furlong

Maybe there are no more costs to cut and a continuing focus here can frustrate staff. Shrinking the company and their opportunities will never be greeted by them with great glee.

Wayne McKay

Do your employees know why you've been cost-cutting? Have they been involved in identifying opportunities to produce the same with less or more with the same?

Wayne Hanna

You may be cutting the wrong costs. For example, should you divest a product or service line? Are you keeping locations open that have been underperforming?

Harriett Lemer

Look more closely at "fixed" costs that may be made more variable (eg. rental rates).

Dugal Smith

Eliminate unnecessary work, not unnecessary jobs.

Carla Furlong

Focus on revenues and productivity.

Dugal Smith

Build sales; reward sellers. Emphasize the positive, eliminate the negative and don't mess with anything in between.

Wayne McKay

When should my company NOT compete on price?

When it compromises quality. One of the hardest things I've learned is to walk away if a client doesn't have enough money to do the job well.

Rosey Brenan

When it's not feasible for your long-term survival. Attempting to match every competitor every time is a recipe for disaster.

Wayne McKay

When your product/service is unique; you feel your price/value ratio is very fair; you expect the customer will be abnormally demanding; the customer places no value on your guarantee/warranty; the sale is not critical to you; and/or the sale will not lead to repeat sales.

Dugal Smith

How do I handle a key employee who has an alcohol problem?

Use the principles of 'tough love' - "You are a key employee but your behaviour is unacceptable." Require the employee to start and stick with counselling as a condition of continuing to work. Specifically identify and challenge behaviours which are unacceptable.

Dugal Smith

Focus on the work behaviour (for example, arriving late, poor decisions, absenteeism). Extend sick leave without salary unless he/she is clearly receiving treatment. Respond through an employee assistance program.

Wayne Hanna

Express concern, offer some form of employee assistance but drive home the point that getting it together is the employee's responsibility. Continuing alcohol abuse which affects job performance is unacceptable.

Harriett Lemer

If all else fails, fire him/her.

Wayne McKay

The theory these days calls for employees to be organized into self-managing work teams. How do my management team and I decide on the make-up of such teams?

Make sure there's a balance of people who can drive a team towards decisions, of people who work for group cohesion, and of those who bring detail and information. Include someone with decision-making power so teams can implement change. And make sure there's representation from groups who may be directly affected by the team's decisions, whose jobs touch the process, and who have information that can aid the team's work.

Harriett Lemer

Know what technical skills are needed for the task at hand and ensure the team's members have these. Recruit individuals who are open to new ideas but don't try to avoid conflict by whitewashing differences.

Wayne Hanna

Rotate team membership periodically so everyone gets to work with different issues and people.

Dugal Smith

There are no sure-fire criteria, but balance and chemistry are important ingredients. The ethnic and gender mix should be representative of the company's profile, for example, and members needn't love one another as long as they can work together. Also be on the lookout for politics - departments and managers often push their own candidates.

Wayne McKay

How can my company capitalize on customer complaints?

Encourage them - complaining customers can act as a strategic thermostat. Set up suggestion boxes and hotlines. Chat up customers on the phone or in the field. Make it easy for customers to complain.

Wayne McKay

A guarantee or warranty is a great way to flush out customer complaints. So are toll-free 800 numbers, complaint cards, customer advisory panels, focus groups, mystery shoppers and surveys. Frontline staff can also keep you in the know - that's if you're willing to pick their brains regularly.

Richard Lindsey

Respond promptly. Seek a quick resolution. Offer an olive branch or a simple "We're sorry". Most people are quite reasonable and recognize that all organizations make mistakes.

Wayne McKay

Identify the source of each complaint (people, timing, systems, communication) and take action to ensure it won't happen again.

Dugal Smith

Learn from every complaint. Keep a log; identify trends. Point out alternative ways of handling to staff. Incorporate real problems/opportunities into training programs. Use mystery shoppers to ferret out problems before they happen to real customers.

Wayne McKay

Let your customers know you've acted on their complaints so they'll know you've been listening.

Wayne Hanna

How do I deal with employees who are very creative but who can be very difficult to deal with?

How important is their creativity to the future of the firm? If their surnames are Edison or Einstein, it may be advantageous to build the organization around these individuals. Otherwise, special treatment here will only stir up trouble among other staffers.

Derek Mather

Try to see things from the employee's point of view, then work out a common interest - like they want to keep their jobs and you want to keep their talents. Then get them focused on the things they do best and isolate them as much as possible from anyone they don't absolutely have to deal with.

Rosey Brenan

Draw reasonable lines of tolerance and communicate them. Use peers and/or suppliers to help these individuals see how they impact others.

Dugal Smith

Work out the bugs in their on-the-job performances so you can capitalize on their abilities. But remember, not everyone wants to play fairly; if that's the case, they'll need to play the game elsewhere.

Harriett Lemer

Don't shy away from temperamental talent. Too many organizations raise clones instead of developing talent. Most successful teams have an often-difficult superstar, a few stars, and a bunch of muckers and grinders. If the chemistry is right and the players unselfish, a winning team is usually the result.

Wayne McKay

What should I do if our best customer is consistently late in paying?

Start with an understanding of the delinquency; is it bureaucracy, tight-fisted stewardship or an administrative oversight that's bumped your account into the slow lane? Work with your best customer contact, someone who can effect change. Maybe it's time to request a portion of the contract up-front or to set interest charges that kick in sooner or compound more frequently.

Richard Muler

Approach the top gun on a personal basis. Tell him/her that you value his company's business greatly, but the late payments are hurting your cash flow. Send chocolates to the people in accounting; bean counters don't get much attention. Determine if the company has financial problems and act accordingly. Your best customer won't be one for long if it goes broke. Exercise caution with payment penalties, however, they may act as a deterrent but cause other problems.

Wayne McKay

Lack of payment may reflect serious underlying problems at your customer's shop. Run credit checks. Contact other suppliers to see how they've been treated by this customer. Request monthly financial statements. Consider cutting back on sales. Keep closer tabs on goods by transferring them on a consignment basis. Insist on quarterly payments.

Dugal Smith

Get to the root of the payment problem. Are you unintentionally doing something that is affecting the customer's willingness to pay on time, such as not delivering what was promised? If the problem is at their end, talk tougher payment terms and reconsider your exposure in any continuing relationship.

Harriett Lemer

Million-Dollar Advisors:

Rosey Brenan, Rodon Communications Carla Furlong, Furlong & Associates Wayne Hanna, Coopers & Lybrand Consulting Group Harriett Lemer, Einblau & Associates Richard Lindsey, Lindsey Services Marketing Consultants Wayne McKay, Wayne McKay & Associates Derek Mather, CAI Corporate Associates Richard Muller, Richard Muller & Associates Dugal Smith, Partner, Price Waterhouse

Carla Furlong is President and CEO of Furlong & Associates, a Vancouver-based firm. An author of two books "Marketing For Keeps; Building Your Business by Keeping Your Customers" and "Marketing Money: Excelling in Today's Financial Services"; over 40 articles; Carla is also a prominent speaker and seminar leader. Contact her by phone (604) 688-6946 or Fax (604) 688-7551.