• The Lightbulb: Treat All People With Great Respect.

1. Lavish Special Treatment on Your Most Profitable Customers
2. Keep Your Eyes and Your Mind Open to Opportunity
3. Recruit Your Competition
4. Mentor Your Successor
5. Listen to the Marketplace
6. Create A Place People Want To Come To Every Day
7. Require the Second Generation to Work For Others
8. Talk Through Problems
9. Work Toward Digital Workflow
10. Change
11. See Problems As Challenges
12. Keep Your Name in Front of Customers

The Lightbulb: Treat All People With Great Respect. When Rick was given the opportunity to be involved with his father's business, he said "No thank you," because Rick did not approve of the attitude his father's partner had toward people. Rick did not want to be in business with a person who had little regard for employees and customers. Rick and his brother Jeff are betting and building their future on the virtue of respect.

Topic for Discussion: Why do people work at a particular place?

Answer: First and foremost, people work where they are treated with personal respect. Take that one step further and discover that people want to be able to tell others, with pride, about where they work and what they do in their work. Work is extremely important to every human being. One mentor told us the most important thing about work is that it structures our time. How simple that sounds but when you think about it, people with nothing to do are bored and depressed. People who feel as if they are doing something important are energized and focused.

All Brand instills pride in many ways. First, they are the best in their niche. Second, they do what they say they're going to do so employees feel safe. Third, they treat employees like family. Fourth, Rick and Jeff like to give everyone a job then leave them alone to do it!

These management techniques have created many long-term loyal employees. They are valuable because this guarantees continuity and institutional memory which is powerful. An employee who has been with you for years knows about so many interactions that they are able to predict how to handle the future; they can save time and heartache by doing the right thing intuitively. And, when good employees come and stay, you don't have the cost of turnover, which hurts financially, in terms of public relations, the cost of hiring and the cost of training.

Remember the customer, Joe? Do you remember how long has Joe been purchasing parts from All Brand? 18 years! That is what happens when you have the right products, the right price, and a relationship based upon respect. This means All Brand gets Joe what he wants, when he wants it, and in the way he wants it. All Brand has low turnover in key positions so the people helping Joe are knowledgeable. Joe is confident that he can depend upon All Brand.

You think about it: What can you do to instill more pride? What can you do to show more respect for employees and customers?

Key Idea #1: Lavish Special Treatment on Your Most Profitable Customers. All Brand Appliance's core customer since the company opened its door has been the appliance repairman, not the do-it-yourself guys. Rick and Jeff know that all customers are not equal.

Topic for discussion: How do the repairmen feel about doing business with All Brand and what is the company doing to get these rave reviews?

Answer: The pros love shopping at All Brand. They told us that they get excellent service and All Brand knows what they will need and it is in stock. We think the rave reviews occur first of all because All Brand treats the repairman like family. It is true that many families don't treat each other with unconditional love but that is what we intend to say. Treat customers with unconditional love and treat them as if they are all you have. Yes, treat customers as if you'll never find another one. You only have one Mom and one Dad and maybe one or two brothers and sisters. Treat customers as if you only have a small handful and you know their likes and dislikes. You remember the time when their dog died. You were there when they graduated from high school and when they got married. Feel the feeling? Family is special. Treat your customers like the special people they are and you could have 13,000 of them soon.

Second, All Brand has a special place to service the most profitable customers. American Airlines invented the frequent flier program that has been copied by every other airline and most good businesses. Just as American Airlines has a special phone number and web place for its most profitable customers, All Brand has a special counter. In fact, most of the counter space is dedicated to the professional repairman and a small spot for the do-it-yourselfer is served only if there are no professionals in line.

You think about it: Do you treat all customers equally? What could you do to lavish more special treatment on your most profitable customers?

Key Idea #2: Keep Your Eyes and Your Mind Open to Opportunity When most people encounter a problem, they think to themselves, "Somebody ought to fix that problem." When an entrepreneur encounters a problem, he starts a business and sells the solution to the people who have the problem.

Topic for Discussion: Why was All Brand Appliance started in the first place?

Answer: Rick and Jeff's Dad was a repairman who found himself spending too much time driving around trying to buy parts to fix the washing machines and refrigerators his customers had hired him to fix. He was not able to charge for the driving time and he figured that there were others in the same situation.

This is not a company that could have been started by someone trying to figure out what kind of business to start. It required visceral inside knowledge of a problem that needed to be solved. Mr. Presant also might say that he felt pain and needed relief! He was right that he was not the only frustrated repairman on the roads of New Jersey and in the Philadelphia area who needed to gets parts and get them fast.

You think about it: What new problem could you solve for your current customers? What new problem could you solve for a new group of customers?

Key Idea #3: Recruit Your Competition. Mr. Presant had the idea for All Brand and he had the financing but he knew at the outset, to his credit, that he needed someone who understood the business.

Topic for Discussion: What did this veteran appliance repairman do to insure that his success in the wholesale parts business would come early rather than late?

Answer: First and so unlike many business owners, he knew what he didn't know. So many of us dive in with confidence we can learn anything and do anything. This is probably true but the problem is that we may run out of money before we learn enough to make a business work. By knowing what he didn't know, Mr. Presant went searching for knowledge and experience to help him launch.

Mr. Presant's source for parts had a monopoly and had become arrogant. He was able to talk the manager of that store into going into business with him. This was a perfect start-up strategy that worked well for years. In hindsight, Mr. Presant may have been smarter to offer the manager a management role but not an ownership role.

Business is never just business. In fact, J.C. Penny said, "Business is built on friendship." When Rick joined the company he had a personal conflict with his father's partner. Rick knew from watching his father that owning a business takes a huge commitment, and he didn't want to spend 50 or 60 hours of his time every week with a person he did not enjoy.

A business partnership is like a marriage and should be entered into seriously. A business "divorce" is very stressful and will cost all parties involved money and enormous anguish. Rick was right not to join his father while the old partner was involved. Eventually the two founders decided to "divorce" at which time Rick came back then with his brother, Jeff, eventually bought the business from his father.

You think about it: Can you buy your competition rather than hire talent away from it? Can you hire talent away from competitors without making the new person an owner?

Key Idea #4: Mentor Your Successor. Rick wanted to be in the wholesale parts business but he didn't want to work for his father and the original partner.

Topic for Discussion: What did Mr. Presant do either accidently or purposefully that turned out to be brilliant for his own future?

Answer: Mr. Presant helped Rick set up in the same business in a new location that would not have as negative impact on All Brand's sales. This taught Rick the business the hard way. Rick had to run the whole operation alone and make it work.

Good mentors set up situations where the person they are mentoring can learn while always knowing the mentor is only a phone call away. The mentor is there to support and advise but not on a minute-to-minute basis. The mentor doesn't hover, control or suppress. The mentor under girds. Mr. Presant was betting that at least one of his sons might buy his business so he could retire and go to Florida! He was planning to formally pass the ownership of the company to the next generation but he wanted to make sure the young men were up to the task.

You think about it: Who are your mentors? Whom to you mentor?

SPECIAL NOTE: Rick and Jeff bought All Brand Appliance from their father but they tell us now that they made a mistake in the negotiations. Rick and Jeff had no representation at the table. Mr. Presant had his attorney and CPA draw up the deal and asked Rick and Jeff to sign off on it. The young men advise anyone who wants to buy a business to have their own lawyer and CPA at the table to negotiate on behalf of the younger generation. The sons say they should not have been intimidated or naive and rather than approach the buy as children of the owner, they should have approached the buy as adult business men.

Key Idea #5: Listen to the Marketplace. Just as we read the newspaper and listen to the news on television everyday, we need to listen to the sounds of our business everyday. Some of us get so caught up in the daily duties that we forget to do this.

Topic for Discussion: What did Rick do to respond to the marketplace?

Answer: He lowered prices. While his father refused to do this, Rick saw that the future includes lower prices for many goods and technology was leading the way. Some say we are now living in a business-on-the-cheap era. Google is a company running on several thousand $2,000 Dell computers while old companies with big brand recognition might be stuck with million-dollar computers running multi-millions of dollars worth of software. When a computer breaks at Google they throw it away so there is not IT repair team there.

The men and women who started companies in the 1950s, 1960s and 1970s might be stuck, as was Mr. Presant, with an idea that they deserve a specific markup and they are not flexible. Rick saved the company by listening to the marketplace.

You think about it: What do you hear when you listen to your industry, your customers and your suppliers?

Key Idea #6: Create A Place People Want To Come To Every Day. The lack of turn over at All Brand speaks loudly about what the company means to the employees. Rick said All Brand has the most knowledgeable people in the business. Knowledge gives them confidence and security so they feel good about coming to work. They are not on edge, they don't feel vulnerable and weak. They feel strong and competent. They get positive feedback from the customers and from the owners.

Topic for discussion: How did they get knowledge and why is this so key to success?

Answer: All Brand employees have what is called, "institutional memory." They have been around the business for years so their knowledge grows deep. To speed up the learning process though, the best businesses we find pay for continuing education. Our resident entrepreneur, Jim Schell, asks, "Can a small business afford to train its people?" Then he answers his own question by saying, "small businesses can not afford not to train people?"

Why do so many business owners fail to teach employees? Fear, ignorance and procrastination are three reasons. Some owners believe that if employees learn too much, they will either demand more or leave. Some don't understand the power of education hen there are those who intend to offer more training and education but they just never get around to it.

Topic for discussion: In addition to continuous education, what else can you do to make your workplace an attractive to a quality workforce?

Answer: Give employees the best tools you can afford and that includes technology of course. Give employees the best chair you can afford. Don't laugh. If you have knowledge workers who have to sit all day, plan to spend $500 to $1,000 for each chair you purchase.

When you can, build your own building so you can design optimum working conditions for every type of worker you have on the payroll. Think about light, light and more light! Natural light is better than a lightbulb and color is also invigorating. Hire an expert in design, ergonomics and Feng Sui. Their fees will turn out to be an excellent return on investment. Some firms offer these services for free when you purchase office furniture from them. Most architects know about these experts and even have their own personal favorites with whom they work. Whatever you don't, don't bring a spouse in to do the decorating! Especially if the spouse has nothing to do with the day-to-day operations. Employees will laugh behind your back.

Dr. Jonas Salk was struggling with his idea to find a cure for polio. Dr. Salk went on a retreat to Italy and stayed at the Abbey of Assisi. In a speech he made to the American Institute of Architects in the early 1990s, Dr. Salk said he came up with his vaccine at the Abbey and was convinced that the architecture had something to do with his mind being unlocked in some new way by the inspiration of the Abbey's architecture. In 2003, the American Institute of Architects announced the establishment of the Academy on Neuroscience for Architecture.

Architects and Moms know that people behave differently in different environments. The challenge for all of us who ask people to work a long, productive day is to create the space that is most conducive for it.

You think about it: Take an inventory of your work place. How does it make you feel? Are you proud of it? Do you feel more energy or less energy when you walk in the door.? Ask the people who work with you to tell you how they think the workspace affects them emotionally. What action can you take to create a place worthy of 1/3 of a person's life?

Key Idea #7: Require the Second Generation to Work For Others. Jeff told us that his Dad insisted that he work for others before he came to work at All Brand.

Topic for Discussion: What did Jeff learn by working for others?

Answer: He learned that there are many ways to get a job done and he learned that he wanted the responsibility of ownership because he saw it as his path to controlling his own destiny. This experience also gave Jeff a sensitivity and added respect for the employees at All Brand. He could get in their shoes and feel how they were feeling.

Rick and Jeff were never pampered or spoiled. They had to learn All Brand from the bottom up. This is the way to REALLY learn the business. There’s no way you can do that if you start "at the top." By doing every job in the business, they are better and more compassionate managers, fully aware of the challenges faced by each employee. They will find ways of improving the business at each level of operations as they fully participate in it. Finally, and perhaps most importantly, all the other employees will know that the next generation is qualified to lead, that they have survived the internship and are well positioned to lead the organization.

You think about it: Are your children involved in your business? At what level? Are you preparing them adequately for their future roles?

Key Idea #8: Talk Through Problems. Author Susan Scott says, "the conversation is the relationship." This means if there is no conversation there is no relationship. Think about that.

Topic for Discussion: Do you think talking through problems is easier with a sibling that it is with a non-family member employee?

Answer: Probably. Jeff and Rick say they talk through things. This gives us a clue however that they probably talk through problems with employees. People are either talkers or they aren't. We found Rick especially verbal and it is good that the organization has one owner who is quick to talk!

As part of on-going training, strong small companies teach communication and conflict resolution skills. Employees should be taught how to deal with conflicts as they arise to prevent bad feelings that always lead to poor productivity and sometimes to good people quitting

You think about it: Does your company need conflict resolution training? Do you think this is only needed in a female dominated situation? What can you do to improve your own communication skills?

Key Idea #9: Work Toward Digital Workflow. A digital workflow means all information is inside a computer in some format somewhere. And, all of the computer talk to each other in some way. There is no paper needed to take an order, make and ship the order or collect for the order.

What comes to mind when you hear the word "technology"? For most of us, it's computers first, followed closely by the Internet. But technology's role in the small business is just as important as marketing and finance. Technology is the ultimate enabler. You can do more in your business and you can do it faster with less error if you incorporate technology in your everyday business operations.

Topic for discussion: How does a small business use technology in the business?

Answer: There's lots of ways and many of them were only available to big businesses up until a short time ago. But new products and plummeting costs have positioned all of us to be more competitive in our respective market places with a minimum investment. We can analyze our inventory and learn what sells and what doesn't, in what quantities, to whom, with what seasonality, at what margin, and just about anything else we might want to know.

We can codify the intellectual capital of our organization, protect it, keep it organized and up-to-date, and easily search and retrieve what we need. It's all about the learning continuum, turning data into information and information into knowledge, then using that knowledge as the basis of the decisions we make in operating our businesses. Hence the term: knowledge management.

Our challenge as business owners is to figure out what data to store, in what vehicle (data warehousing) and how to access it in such a way that it provides meaningful information that is of real value to us in our business (data mining). We've used a lot of buzz words here; let's look at knowledge management, how it actually works, within a small business. There are a number of things that even the smallest business can do to capture, organize, and make available the intellectual capital of the organization. We'll focus on three here.

Establishing a Common Operating Environment (COE). Before you had computers at your office you kept documents in folders in file cabinets. Different people had access to those documents because they needed them to do their work. Sometimes people forgot to return the documents when they were through, and you would scout around the office until you found them. Sometimes two people needed the document at the same time and they would work something out, or make another copy of the document. The point is that every business generates important information, has processes that includes forms and templates, and shares these among a number of employees.

Now that you have computers, you still generate documents, you still keep them in folders, folders are kept within folders, and various people have access to them. Electronic filing systems can be vastly superior to paper filing systems if we remember to follow the business practices we used in a paper environment. Do you have documents on your computer or network server that are not in folders? How many? How does that compare to the number of documents you would have tossed into a file cabinet without filing?

The good news is that at least (a) the documents are listed alphabetically wherever they are stored and (b) we can always "search" for them if we remember the name, or the software application, or when they were last modified. Hmmm. There must be a better way. You're right! And it's called a common operating environment or COE. In a business with a network environment, where a number of employees have access to a central data depository, you:

1) Establish document naming conventions. As new documents are created, they are named in accordance with organizational policy. People looking for a document would have a good idea of the document name, even if someone else created it.

2) Determine the file structure. Folders within folders within folders. Organizing your information so that documents are easily located.

3) Grant access as appropriate. Security levels and edit rights, determining who can have access to what or not, when to permit "read-only" access, and who is authorized to make changes.

4) Safeguard information. Back-up systems, on and offsite, disaster recovery plans.

If you do all of the above, provide training on the implementation, you will have established a COE. The benefits are enormous and immediate.

Using Databases to Work and Mine Data Most of us couldn't imagine functioning without word processing software and spreadsheet software in our businesses. We all use e-mail and a lot of us can use presentation software, some more rudimentary than others. Yet, for some reason, the database software frequently goes unused in the small business.

Digitize, Digitize, Digitize Maintaining our information in electronic form is critical to both the establishment of a COE and mining our data on an ongoing basis. Virtually all software applications allow for exporting data and importing data. So as long as you maintain your data electronically, you can take advantage of new software development in your industry without having to re-enter the information.

Electronic files are easier to navigate and cheaper to maintain. Additional computers and memory are just less expensive than rent, file cabinets, and storage facilities.

You think about it: How far has your business moved along the learning continuum? Are you taking advantage of the latest technologies to codify the intellectual capital of your business? If you arrived at your office, and all your information OR all your money was gone, what would be more devastating to you? Now, compare how you safeguard your money with the way you safeguard your information. As you digitize your workflow, be sure you have adequate backup systems with offsite storage for all important information.

Key Idea #10: Change. For years All Brand had been serving primarily the professional appliance repairman and also has a small counter space for the do-it-yourselfers.

Topic for Discussion: What is the newest customer category for All Brand?

Answer: Apartment maintenance people. By taking on one new salesperson who had experience in the field, All Brand has a whole new revenue stream. Next, Rick learned that to compete in the apartment business, he had to publish a catalog. He tried using a generic catalog but it didn't work. Now that he has his own, sales are up 20%.

Any company that has been doing business for more than five to ten years has been through many changes. We observe that strong, long-lived small companies have a culture that encourages and embraces change.

You think about it: What could be your next revenue stream? Who could you hire to make that happen? What tools would you give that person to insure their success?

Key Idea #11: See Problems As Challenges. Small business owners are tough because we face big problems everyday and we can't let one of them bring us down. We have to face the problem and figure out how to solve the problem. There is no one to blame, to bail up out or run interference for us. We stand often naked in front of the problem. Over time we learn that Murphy's Law is more than true and that Lily Tomlin may be right when she said, "No matter how cynical you get, it's hard to keep up."

Topic for Discussion: What problem did Rick take on as a challenge?

Answer: He thought that he could use a generic catalog to build his new apartment division but it didn't work. Up against a deadline, he created his own catalog by camping out at All Brand for four days working 18-20 hours every 24 hours! He was helped by a snow storm that literally forced him to stay inside and although he laughs about the situation now, it clearly demonstrates the dogged determination we see in all successful small business owners.

You think about it: What problems are on your desk right now? Why aren't you solving those problems? What should you do next to turn the problems into challenges?

Key Idea #12: Keep Your Name in Front of Customers. We all must communicate with customers in multiple ways. All strong companies do this. You can't just post material on the web, you can't just fax, you can't just mail, you can't just call, you can't just email, you have to do it all.

Topic for Discussion: Why can't we teach customers how to communicate with us and not fool with all the different types of communications?

Answer: First of all there are best ways of doing specific types of customer communications. And second, we have to be where our customers are not where we want them to be. Many owners dream of the day when they can simply post everything on the Internet and be done with it. Well, that may happen but we're not there yet. Rick and Jeff have a physical newsletter and a physical catalog and use these pieces to keep their name in front of customers.

Though many of us are still struggling with digital contact management even twenty years after it hit the marketplace, the next generation coming along is fully making use of the new tools. We want to be paperless, and many of us are resisting those Personal Digital Assistants and are clinging to our DayTimers. The next generation will be virtually paperless.

You think about it: What is your customer communication plan and how can you make it better? Do you have a contact management strategy? Software? Web-based?