Learning Leadership 2017_04 The Five Fundamentals

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Learning Leadership – The Five Fundamentals


                                    By James Kouzes, Barry Posner

Steve Brody, Houston Master Chair has noted in bold suggested questions from the authors to turn these ideas into practical exercises & coaching conversations. My thoughts will look like this..;

The Five Fundamental Areas include:

  1. Believe you can
  2. Aspire to excel
  3. Challenge yourself
  4. Engage support
  5. Practice deliberately

– Are Leaders born or made?   Leadership can be learned

– You have to aspire to excel

High IQs don’t characterize great performers. What differentiates is the dedication to do something every day to improve. Best leaders become the best…..they work at it. It is skill or a will issue with you and/or your direct reports. ARE YOU as the leader focusing your time on what only you can do or should be doing?

– Sugg – start a leadership journal to regularly use

What are 3 aspects of your leadership to improve? Further strengthening or something that is not a strong suit.


   What difference do I want to make? Are my actions making the differences?

   Do my actions help bring out the best in me…..others? What to do differently?

– Leadership is not about personality…..it’s about behavior

– Best leaders are the best learners…..must have a growth mindset…..continuous learning

– Sugg – add to journal

   What did you dream about? How build sense of enthusiasm, excitement for endeavor?

   How did you involve others in the planning…..decision making?

   How did you foster cooperation, build trust….enhance competency of team?

   What are values you hold…others accountable to? How do you lead by example?

   How did you recognize contributions…celebrate accomplishments…..create team?


– Are you pushing yourself to learn something new re: leadership every day? Are you stretching

Beyond your comfort zone?

– Sugg – What did I learn in the last 24 hrs to improve my leadership?

   Create a personal lifeline to identify some of the key patterns in your life.

   What drives you down….pulls you up?

   Create a diagram…draw line across middle page…on left is past…on right is present

   Top half write peaks….bottom half write valleys

   Add key items, elements in proper places  

– Exemplary leaders and their constituents are in service of a larger purpose…beyond the self

Suppose you had to be away for extended absence …what are the principles your team needs

To know….what would guide their decisions, actions? How to treat each other…deal conflicts


– Skill set that majority of leaders need to be more capable….is inspiring a shared vision

Leaders need to have an ideal or unique image of the future

You are no longer an individual contributor….you take people on journeys to new places

You are expected to be comfortable with uncertainty, champion experimentation, learn from


– Sugg – Leaders must influence what future will be? Looks like?

 What would your world look like in 5 yrs, 10 yrs, or 20 yrs? What aspirations for your future?

What I can do to help create? Influence direction of the people? Forward looking.

Try to sketch or write down your image of the future….draw a model.  

– Importance of Emotional Intelligence – you need to know what others want & need

Do you understand their hopes, dreams, needs, interests? People want to follow a meaningful

Purpose, not simply do work in exchange for cash

– Sugg – create a list of your frequent contacts 

For each, ask….What are their values? What are their standards?

What are the future hopes, aspirations? What higher order purpose gives life meaning?


– Challenge to be your best….step outside your comfort zone…new experiences, test self

Challenge is the crucible for greatness ….how fast can you learn? From mistakes, etc?

– Sugg – Have a curiosity conversation with someone you admire

 i.e. I have always been curious about how you ended up as …..would you spend 20 min

to explain what it took?   What challenges did you face? What key turning points?

When did you suffer a severe setback or disappointment….make some notes on

Reflect re how have you reframed the experience? What helped to bounce forward?

– Top performers all seek support, advice, counsel from others. Asking for feedback is key.

– Sugg – Who do you go to or can you seek support?   A Peer Advisory Group?


Who do you observe? Leaders you admire.  

How about creating a personal Board of Advisors? Who would you pick?

Ask each day….did I do my best to remain positive about my abilities today?

Did I focus on future possibilities today? Did I challenge and stretch myself?

Did I learn from other people today? Did I practice a new leadership skill?


John C. Maxwell key leadership questions when working with your team.

  •  How can I serve you?
  • What would make your job easier or more successful?
  • What did we learn?
  • Did we add value?
  • How can we maximize this experience?
  • How do we make the most of this opportunity?

Austin Business Owner Workshop – Austin Country Club – February 15th

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Michael Lorsch, from The Table Group, February 15th at 8am presents  a 3 hour workshop on Patrick Lencioni’s “The Five Dysfunctions of a Team” and how as a business owner you are able to translate the model into action and create a greater level of  organizational health. In addition, members and guests will then learn the process for imbedding organizational health into their company. These steps include:
  • Creating a cohesive leadership team (through application of the Five Dysfunctions model)
  • Creating organizational clarity
  • Overcommunicating organizational clarity
  • Reinforcing organizational clarity with human systems

Please RSVP to Ed Stillman 512.422.6232 As my guest there is no cost and seating is limited.

The Five Rules to Improve Cash Flow 2017-03 Stephen King, Houston CPA Firm

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 GrowthForce LLC 800 Rockmead Drive Suite 200, Houston Phone 281.358.2007 Fax 281.358.4120

The 2017 Leadership Series moves to accounting and finance. As Red Scott, CEO of TEC/VISTAGE Florida said for many years – CASH ISN’T CASH UNLESS IT’S CASH. Business Owners – Stephen King, a 17 year Vistage member and Vistage Speaker reviews what we all know, yet you may not have the processes and procedures in place to follow each of his steps each day, week, month and/or quarter. I would encourage you to audit your internal checks and balances and see for yourself if you are 5 out of 5 and grading yourself 100% when it comes to creating a sustainable process in improving your Cash Flow.


A White Paper by Stephen King, President & CEO of GrowthForce, a Houston Vistage member and Speaker.

In this challenging economic environment small businesses are looking to find innovative ways to get ahead. At GrowthForce we strive to offer financial guidance that will help your business’ bottom line. Increasing your cash flow may be the key to turning a struggling small business into a thriving growing business. In addition, QuickBooks has a number of new features that are designed to help small business improve their cash flow.

With this in mind we would like to share “The 5 Rules of How to Improve Cash Flow”.

Rule #1 – Prevent Cash Flow Problems Before They Happen

Said another way, “Don’t let your clients’ cash flow problems to become your cash flow problems”.

Many businesses are not always smart about how they go about taking on new clients. If you are not getting paid up front for your services then you are giving your clients a loan. Before issuing that loan you should:

  •  Check client credit references
  •  Do a background check
  •  Check their credit ratingMost importantly make sure you have a written credit policy. The credit policy, which should be attached to the contract and referenced in your invoices, shows the rules of your company billing and collection. At the very least the credit policy should include:
  • –  payment terms: when is the balance due?
  • –  late fees: what are they and when they are going to be charged? We recommend 18% or 1 1⁄2percent per month once someone is late.

–  Legal fees: spell out who will pay attorney fees if you have to go to court to collectIf you can prevent cash flow problems before they happen then you are well on your way to increasing your cash flow.

Rule #2 – Get Money Faster

The primary goal of a cash management program is to reduce the period of time in between the time you have to pay payroll employee services and when you get paid from your client. There are a few ways to do this:

  • Get a deposit up front.
  • Getting a 50% deposit up front allows you to cover payroll before you even start the job. Deposits are intended to cover your costs so you minimize the risks on every job.
  • Accept credit cards.

Small business owners often don’t want to accept credit cards because of the 2 1⁄2 % fee associated with Visa or MasterCard. Add to your invoice and billing process terms that allow you to automatically charge a credit card when the job is completed. Then do the math. Except for large engagements, the 2 1⁄2 % merchant fees will generally be much less than the actual cost of billing and collecting that bill later.

Intuit Billing Solutions

Intuit has a service that allows you to send out an .html invoice with a “pay now” button. Your client can click on the pay now button, enter their credit card information and have it automatically processed through Intuit merchant services. A few days later when you get the payment in your account, you will also get an email with an attachment that opens up and automatically applies the Merchant payment against the outstanding receivables.

This process allows you to significantly reduce the cost of collections, cash application. This will reduce your DSO (Days Sales Outstanding), significantly reducing the amount of time it takes you to get paid and allowing you to put that money to work elsewhere. Credit cards are a great return on investment when compared to the cost of billing and collections.

Streamline your billing processing.
Look at and map out what are the steps involved to get a bill out the door. How many people are involved in creating an invoice?

How long does it take once you have completed a job to get the invoice into the clients’ hands? Streamlining that process will get billing out faster and reduce the cost of invoicing customers, which will improve your cash flow.

Look at the timing of your invoices.

How often do you get invoices out? Many clients only send out invoices once a month, at the end of the month.

If you look at your cash flow and you finish a job on the 5th of the month and you don’t send out that invoice until the end of the month, and the clients’ payment terms are net 30. You are not going to get paid for 60 days and you probably have payroll at least 4 times during those 60 days. Invoice the client as soon as the job is done, or at least twice a month. We recommend you do it weekly.

Set up a Retainer Program

Take your best, repeat clients and look at how much they pay you on an annualized basis and divide it by 12 come up with equal amounts. Then implement a retainer program helps your client’s budget for your services. Instead of having ups and downs, offer a monthly retainer program. Get an agreement from your client to charge their credit card or better still ACH their bank account for this monthly amount.

This allows them to budget your services in their cash flow much more easily. It helps reduce your cost of billing and collections and it helps reduce their cost of bill payment.

And if you set up your QuickBooks file to download transactions from your bank, you can set the default account code for repeat transactions. This way you have automated the accounting of those retainer billings, reduce the payroll cost on the back end as well.

If get your money faster, then you are well on your way to improving your cash flow.

Rule #3 – Implement Best Practices for Collections

Collections are often the last thing anyone wants to do. There are some best practices that will help.

1. Run accounts receivables (a/r) aging reports every week

2. Add the A/R aging report to your weekly management team report. That will give you the visibility that your need on the balances that are owed.

3. Sort the A/R aging by amount not account

When you create the report, sort it by amount not account. Most accounting systems default their accounts receivable aging to an alphabetical listing. This puts the A’s up front. Instead sort your A/R aging reports by highest amount owed. This puts the largest balance first on the list. Focus on the largest balance and you’ll get the greatest returns.

  • Don’t wait to make your first collection call
  • Businesses often wait until the balance is 30 days past due to make their first collection calls. Instead you should make your first call 5 days before the bill is due – not 30 days after.
  • You make your first call a courtesy call. This would be positioned as checking on the status of the account, not to get paid. A courtesy call would SOUND like this:
  •  Are you satisfied with our services? Are we providing everything you need? Is there anything missing in the product or services we offer? We want to make sure….You have 100% customer satisfaction.Then follow up by mentioning:
  •  I noticed that your bill is due on Wednesday; do you have a copy of that bill? Do you have everything you need to pay that bill?
  •  I have you on our cash flow forecast paying that bill next week Can we count on receiving your payment on Wednesday?That tells the client you are serious about collections. By implementing these best practices, you will change the collections dynamic.Your client will tell you if there is anything wrong with your services when they are getting ready to pay your bill.A study of the best run Fortune 500 companies shows they use their collections calls as customer service focus groups. So call that client 3-4 days before as a customer service call.
Follow the 3 Fs of Collections – Firm, Focused, Friendly

Never end a call without a commitment. If you get a commitment of a pay date, call the day before and say “We have you in our system for payment tomorrow, can we count on that payment”.

QuickBooks has the ability to make a deposit from a scanned check. Now all you need is the bank account, check routing number and check number and you can enter it into QuickBooks and make a deposit. No longer are you stuck waiting to get that check in the mail.

If you follow collections best practices then you are well on your way to improving your cash flow.

Rule #4 – Be Ready for Collections Objections

Most small businesses don’t have a dedicated collection person.As a result, the person making the calls is often not trained to do a great job. One quick way to improve collection performance is to anticipate what the client might say when you ask when are you going to pay your bill.

Be ready when you call a client who has a past due bill for possible responses. Here are the common excuses and some answers to help your collections

 “The check is in the mail”.

Let me log this into our system and get the check information. Can you tell me when it was mailed? What are the check number and the amount? With your approval I can enter that into Echeck (QuickBooks 2010) system.

“I will give you a partial payment now”

  1. Ask “Why they are giving you a partial payment?
  2. When can we expect to receive the balance?

“I’m having a cash flow problem” – we will pay you in a few weeks.

  1. Ask can you send a post dated check.
  2. When can we expect to be paid on the balance?
  3. Can we enter a repayment schedule and get a little bit each month?

Disputed Balance –“I’m not happy?”

  1. What do we need to do to make you satisfied and close out your balance?
  2. Make sure you have a good process to communicate any disputes. If you show your client you are seriousabout resolving their issues you’ll show you are serious about being paid.

More Information – “I did not get the invoice”
a. Make sure the person making the calls has the billing information at their fingertips. QuickBooks has the

ability to email invoices. Give the person making the calls access to the screens needed to send another copy of the bill

Cannot afford to make a payment –“Cash is really tight right now”

  1. How bad is the situation?
  2. Can you enter into a repayment schedule?
  3. You need to have an escalation process to decide when you decide to shut down services?
  4. Remind them that once you go to collections they are responsible for any attorney fees they incur, so youboth have an incentive to avoid that step.

If the client gives you any feedback, make sure that you are listening carefully and immediately address any concerns. These actions will show you are serious about high quality service and you are serious about getting paid.

If you can be ready with a response and anticipate any objections your client may have, then you will improve your cash flow.

 Rule #5 – Manage Your Payroll Expenses Wisely

Pay payroll semi-monthly.

For most service businesses payroll is your biggest expense. The best practices of managing cash flow around expenses are related to managing the timing of your payroll. The goal is to pay payroll after you have been paid by your client – or at least to reduce the time period between when you pay payroll and when you get paid from your client.

First implement a two week waiting period between the time someone finishes work and the time you pay them. This serves two purposes, it allows you enough time to invoice your client and it also gives you more time to process that payroll, so it reduces the chance of errors.

What is the difference between semi-monthly and bi-weekly? The bi-weekly payroll has 3 payrolls two months every year. For many businesses, this is the biggest disruption in your cash flow – cutting that 3rd payroll check can make life difficult. Asemi-monthlypayrollallowsyoutohaveconsistentpayrollall12monthsoftheyear.

When cash is tight, implement a pay slowly rule

Make sure the person paying the bills does not have a “clean desk” rule. You need to pay the bills when they are due and no sooner. If there are any discounts available make sure you take all discounts that anyone offers you.

We recommend that you pay your credit card bills first and prioritize them based on your interest expense. Make sure you pay attention to the interest that is being charged. Credit card companies have historically been able to change the interest rate without any notice. Higher interest charges make it difficult to get out of cash flow problems.

If you have one, use your line of credit instead of your credit card. The line of credit only charges you interest for the actual number of days that you use it. So if you get a payment from a customer in the middle of the month you can pay that bill right away and reduce your interest charges.

By implementing “The Five Rules to Improve Cash Flow” your business will take steps to overcome this challenging economic period.

For more Information, please email info@growthforce.com or call 281-358-2007. GrowthForce would be happy to review your current use of QuickBooks processes and make recommendations on providing outsourced bookkeeping or Controller services to help improve your cash flow.


2017 Leadership Series – 2017-02 “CEO TOOLS & ANALYSIS”

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  • It’s a new year, JANUARY 19TH, want to become reflective for 7 minutes? As the CEO, President, or Business Owner…

    The Atlanta Journal-Constitution asked 11 experts to grade Coca-Cola Chairman and CEO Doug Daft on several different topics using a 4.0 scale (A=4.0, F=0.0). The following worksheet was adapted from that article and includes their questions and a few others. (By the way, the overall grade for Daft was C+ … )

    How would you grade yourself? How would others grade you?










    Has the CEO set a clear strategic direction for the company? Has the CEO communicated the direction effectively with company’s various constituencies, including employees, customers, suppliers and shareholders? Has the company responded positively to the direction set by CEO (as measured by results)?










    Has the CEO assembled a strong management team to implement the strategy? Has the CEO held direct reports accountable for performance? Has the CEO established an effective succession plan for top management?

    Financial Performance









    How has the company performed under this CEO when it comes to hitting financial targets, improving profitability and controlling costs? Does the CEO set realistic, aggressive financial goals for the company? Does the CEO understand, measure and monitor overall financial performance?










    Does the company have a strong sales and marketing plan and team in place? Have sales results met goals and expectations? Has sales training taken place, and has it been effective? Have sales and marketing responded effectively to changing economic conditions?

    Operational Performance









    How has the company performed under the CEO when it comes to improving operational effectiveness, improving on-time performance, and increasing operational efficiencies? Has the CEO developed a culture of continuous improvement?










    Does the CEO foster a customer-focused approach to innovation? Has the company introduced enough new products or services to address the changing needs of customers? Is the company considered “innovative” within their industry?


  • If you feel you are on the cone of a rocket, overwhelmed or just want to be around or in a peer-to-peer mastermind group with other successful business owners, let’s have that NEW YEAR cup of coffee. You have the next 11 days in January to look around the corner and determine what are your personal goals for you and your enterprise. Blessings, 

Ed Stillman, Austin Texas Exective Coach and Vistage Group Chair (This article in part was taken from the Vistage Worldwide Member Library)


2017 Leadership Series – 2017-01

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Entrepreneurs and Small to Mid Size Business Owners

Welcome to 2017

It is my goal to bring you once every 2 weeks an article that will assist you in becoming a better leader, making better decisions and hopefully provide you a better balance between business commitments, personal relationships and your spiritual walk.

2017- January 12 – LEADERSHIP STYLES

When I returned [as CEO] to Perot Systems, my first job as a leader was to create a new understanding of myself … I told myself I was having the same experience as a caterpillar entering a cocoon. The caterpillar doesn’t know that he’ll come out as a butterfly. All he knows is that he’s alone, it’s dark, and it’s a little scary. I came out the other end of the experience with a new understanding of leadership. I don’t have to know everything. I don’t have to have all the customer contacts. I don’t have to make all the decisions. In fact, in the new world of business, it shouldn’t be me, and my job is to prevent it from being me.”

— Mort Meyerson, former CEO, Perot Systems, “Everything I Thought I Knew About Leadership Is Wrong,” Fast Company, April 1996

Leadership Culture

It’s an inescapable fact of business life: All organizational cultures reflect the personalities of their leaders. The leader’s behavior — how he or she goes about a daily routine, or reacts to crisis — sets the tone for the workplace. Every day, in hundreds of ways, the leader demonstrates to others what is suitable — and unsuitable — in the organization.

When, for example, a CEO insists on micro-managing and making day-to-day operational decisions, the management team becomes frozen in place, unwilling or unable to challenge decisions. If a CEO shows an inclination to avoid conflict, that behavior will be played out in the organization as well.

“CEOs need to understand that the people around them interpret their behavior through what they do and do not stand for,” says Vistage Chair and speaker Don Schmincke. “The leader’s actions profoundly shape the culture of the organization.”

The same principle applies to what Vistage speaker Lee Thayer calls “the most powerful force on earth” — mediocrity.

“An inclination towards the mean is present in any organization and can only be overcome by the leader’s personal fanaticism. Leaders face large numbers of people who tend toward mediocrity, and also have to consciously fight against it in themselves.”

As a result, the CEO must embody a distinctive, passionate style of leadership. “Nothing done conventionally by the CEO will offer any kind of competitive advantage,” Thayer says. “Conventional thinking always and everywhere leads to conventional outcomes.”

Closing the Distance

The secret to effective leadership lies in closing the distance between yourself and those you seek to lead.

“It’s easy for a CEO to stay inaccessible,” says Vistage speaker Ben Gill. “There’s always a shortage of time, an abundance of commitments — reasons why you can’t be seen and heard by employees. But these reasons become secondary once you realize that getting closer to your constituents is truly an important goal.”

“A true leader is always learning,” adds Don Schmincke. “They seek out new information through formal and informal settings. They do not discourage constructive feedback and disagreement.”

Great leaders also make themselves visible on-site. They run into people in the cafeteria and talk to them about what’s on their minds. They solicit and respond to employee email. They get to know the people who work for them, they find out who does what well and who needs more attention. They learn first-hand what’s happening on the front lines.

The leader’s visible presence serves to lessen employee anxiety, especially during times of transformation and change. Our Vistage speakers suggest various techniques to infuse courage and trust in employees, both in personal encounters and through normal organizational channels:

  • Tell it like it is. The people who follow you deserve to know what’s going on. They’ll do a better job with the facts at hand.
  • Get something done fast. Short-term victories can bolster employee resolve in the face of intimidating long-term change. Celebrate these wins and show people that you appreciate their efforts.
  • Make change exciting. Build on the short-term gains and guide employees through the next cycle of change. With a foundation of trust, they can distinguish between good ideas that didn’t pan out and those that were ill-conceived and deserved to fail.
  • Take risks on people. Leaders always persuade people to do more — and be more — than they ever thought possible. Encourage your employees to go beyond what they’ve done in the past.

A must read from Warren Buffett for anyone developing the next generation of business leaders…

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Imagine working on one skill in 2017 that–once you improve it–will raise your value by 50 percent. The one skill is public speaking.

The dividends on the investment you make in sharpening your communication skills will pay off for the rest of your career. Don’t take my word for it. Listen to billionaire Warren Buffett’s advice to a class of business students at Columbia University back in 2009:

“Right now, I would pay $100,000 for 10 percent of the future earnings of any of you, so if you’re interested, see me after class.”

After the laughter subsided, he turned serious.

“Now, you can improve your value by 50 percent just by learning communication skills–public speaking. If that’s the case, see me after class and I’ll pay you $150,000.”

Buffett’s point is that mastering the art of public speaking is the single greatest skill to boost your career.

You might be thinking, “That’s great, but I have a fear of public speaking.” That’s OK. Buffett was actually terrified too.

Overcoming your fear

As a young stock adviser, Buffett took a Dale Carnegie public-speaking course to overcome his fear. It’s a little known fact, but Buffett dropped out of the course on his first try, because he was afraid he’d be asked to speak up. He worked up his courage a second time and today proudly displays his Dale Carnegie certificate in his office.

According to TED curator Chris Anderson, public speaking matters more than ever. In his book TED Talks, Anderson writes: “As a leader–or as an advocate–public speaking is the key to unlocking empathy, stirring excitement, sharing knowledge and insights, and promoting a shared dream.”

Isn’t that what you’re trying to accomplish as an entrepreneur pitching an idea or a small-business owner pitching a potential customer?

Your goal is to create empathy, a bond of trust between you and your listener. Your goal is to stir excitement, share knowledge, and promote a shared dream. Effective public speaking is the one skill that can help you achieve all of these results.

Learning the skills

Anderson calls the ability to captivate an audience “presentation literacy,” a superpower to pitch your ideas, sell products, and accomplish your dreams. The good news is that Anderson believes the skill is teachable.

I agree.

Thanks to broadband connections, YouTube, and TED.com, anyone with a computer, phone, or mobile device has the world’s top business speakers at their fingertips.

For entrepreneurs and small-business owners, I suggest starting with YouTube videos of the greatest presenter in business history–Steve Jobs.

Nearly every public presentation Steve Jobs ever gave–as far back as the original Macintosh product launch in 1984–is available for streaming. A mesmerizing example of a product launch is Jobs’s 2007 introduction of the first iPhone.

Pay particular attention to:

  • The simple, visual, and engaging slides that Jobs used to complement the message.
  • How Jobs delivered the presentation without a teleprompter or visible notes. He simply had bullet points of the messages he wanted to cover discreetly tucked behind the computer he used for the demos.
  • The fun that Jobs had delivering the presentation. He placed a crank call to a nearby Starbucks store to demonstrate the maps feature of the new phone.
  • The clever way Jobs packaged the content. He fooled the audience into thinking he was introducing three new products. They were surprised when he revealed that all three products were rolled into one–the new iPhone.

In the iPhone launch, Steve Jobs reminds us that today’s audiences want more than to sit through yet another boring presentation. They crave visually appealing slides. They want to be informed and inspired, enlightened and entertained, all in the same presentation.

Yes, the skills are teachable–Steve Jobs was not a natural; he worked at it–but mobile video has made it a lot easier to teach yourself, through watching the world’s greatest entrepreneurs and business legends work their craft.

As an entrepreneur or small-business owner, you are only as valuable as your ideas. If you cannot persuade others to buy into your ideas, then they don’t matter very much.

Your ideas deserve to be heard. Make a commitment this year to sharpen the one skill that can change your life and the direction of your business, and raise your value by 50 percent almost immediately.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

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2017 EEOC Audit for Small to Mid size Business Owners

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On a scale of 1-10 with 10 being in full compliance – what’s your EEOC scorecard look like going into 2017 … 6 questions that deserve your attention on Tuesday, January 3rd?

55 to 60 – probably safe for 6 months – revisit every 6 months

48 to 54 – evaluate where you are most vulnerable and take action in Q1 2017

41 to 47 – getting less than 7 hours of sleep?

34 to 40 – you should be talking to a labor lawyer

1.Write a discrimination policy

The key to preventing EEOC lawsuits is to document everything, starting with your Sexual Harassment and Discrimination Policy. The policy holds employees legally accountable for upholding the laws and values enshrined in federal civil rights statutes. It also explains what managers and staff should do in cases of alleged discrimination.

A standard policy details how managers should record EEOC incidents, take corrective actions, and follow up. Every employee should sign the discrimination policy during onboarding.

2. Make your non-discrimination policy visible

Post your discrimination policies somewhere every employee must see it. Your logbook, employee handbook, learning management system, and breakroom are good locations. Remember, visitors, vendors, and guests could take away the wrong idea if they see a piece of paper titled “ANTI-DISCRIMINATION AND HARASSMENT POLICY.” Keep it in the back of the house.

3. Mandatory training  

Training ensures that employees follow the protocols set forth in your discrimination policy. Courses should teach employees how to distinguish discrimination from typical office and work related shenanigans.  

At minimum, training should cover:

  • What employees should do if they experience or see discrimination in the workplace.
  • How to report incidents.
  • Step-by-step actions managers should take upon learning of an incident

Be ready to prove that employees have completed training. Whether you design your own courses or license them through an online learning management system, document completion.

4. Don’t ask illegal interview questions

If we sat down to a mock interview, would you be able to pick out which questions are illegal? Probably not without practice and training.

Many managers don’t realize that asking for the candidate’s age, number of children, and disabilities during the hiring process can be considered discrimination. However, you can obtain the same information by reframing discriminatory questions. For example:

  • Do you have any disabilities → Are you able to perform the following tasks…?
  • How old are you? → Are you between the ages of 18 and 65?
  • Do you have kids? →  Do you have responsibilities that may prevent you from committing to your assigned work schedule?

5. Find the line between fun and harassment

In most office and/or work related culture, jokes, pranks, and profanity are fun until they cross a line. Good managers know where that line is and guard it aggressively. Trust managers to confront employees who put the company at risk of an EEOC lawsuit. Shouting four-letter words is one thing, but jabs against someone’s gender, sexual orientation, race, religion, or disability can trigger lawsuits.

6. Document, document, document

From recruiting and hiring to benefits administration, reviews, and termination… document everything. Be ready to back up your actions with evidence. Maintain time-stamped records of personnel issues, corrective actions, and disciplinary activity in a digital or physical logbook. By assuming that you will have to justify your actions in court, you will reduce the chance that you ever have to.

Now, talk to your lawyers…

The internet is not the place to make your legal strategy. Use this article to understand the high-level issues, but please consult your legal counsel for further guidance. They know what documentation, policies, training, and systems you need to avoid an encounter with the EEOC. Just remember, you can’t “win” an EEOC lawsuit, but you can prevent one.

Sent from my iPhone

Ed Stillman

Austin Texas

Vistage Group Chair


512.422.6232 (mobile or text)

I help individuals become better business leaders – and business leaders become better people – who run better companies and make a more significant difference in the world.