Business Operations 301

Business Operations 301: Getting your employees to

think like owners

Sessions are in series

Business Operations 101: Building the business of your dreams

Business Operations 201: Getting the most out of your team

Business Operations 301: Getting your employees to think like owners

© Triangle Pest Control LLC. All Rights Reserved

Lets unplug for a while

All of the following should be off:

●Cell phones ●iPads ●Bag phones ●Pagers/Beepers ●Squeakers●If it has a battery…


Let’s Review

Business Operations 101 - Building the business of your dreams

●Your business should work for you and not you for your business

●Muzzle the technician●Allow the Entrepreneur to work


Let’s Review

Business Operations 2011.To get the most out of your people

you must fight entitlement 2.As an owner focus on the 4 keys to

performancei. Clarity ii.Caring (the right way) iii.Have fun together iv.Have expectations of high

performance© Triangle Pest Control LLC. All Rights Reserved

Business Operations 301

Is it better to earn a penny or save a penny?



Example #1: 5% Profitable Company

For every $1 saved, how much goes to the bottom line?

For every $1 earned, how much goes to the bottom line?



Example #1: 5% Profitable Company

For every $1 saved, how much goes to the bottom line? - $1.00

For every $1 earned, how much goes to the bottom line? - $0.05



What does that mean?



What does that mean?

For every $1 saved, you would have to sell 20 TIMES that amount to match that in profit.



Example #2: Move just a few %

1.2.5M @15% = $375,0002.2.5M @20% = $500,000 3.Diff = $125,000 4.What would the 15% company have to

sell in order to match the same profit dollar of the 20% company?



Example #2: Move just a few %

3.3M (or 800k in NEW sales for the year)

Which is easier? 125k or 800k?



What is the point of these two examples?



What is the point of these two examples?

●It is much easier to save profit than to earn it

●No great company becomes great just by focusing on cost controls…



Two basic questions to consider

●Are there inefficiencies in your business?

●Are there opportunities that you are not aware of?


ABSOLUTELY THERE ARE



What is the reality?●As an owner you cannot possibly

know them all●Most people doing the work, are in

the best position to identify opportunities and inefficiencies

●Wouldn’t be great if you had that knowledge? -- You do….




That is the point of this session●How do you engage your people to

think like you? ○How to get them to identify and

eliminate inefficiencies ○How to get them to identify

opportunities



The 2M Man…


My favorite Scott quotes

●“Donnie you should pay for more benefits”

●“Donnie you should pay higher wages”

●“Donnie you should pay for our cell phones completely”

●“Donnie you should pay more because I don’t have enough money to pay my bills after paying my child support”



What is the reality?

Your employees think that you make wheelbarrows of money



Why do they think this?

●Most people (including some business owners) have NO CLUE on○How a P&L works ○How taxes eat 40% of your profit ○The P&L doesn’t include capital

payments●In the absence of information,

people just make stuff up© Triangle Pest Control LLC. All Rights Reserved


How do you prevent the “Donald Trump” syndrome?



Imagine a Basketball game●There is no scoreboard ●Only one person in the ENTIRE room

is keeping track of the score●No matter what each team thinks

they are doing fine

What do you think will happen? Why?



How to prevent the “Trump” syndrome?

●Teach your employees how a P&L works

●Communicate where you are at constantly

●Don’t have people playing a game in which they don’t know the score



Employees to think like an owner?

1.Teach them about business



Anyone ever read this book?



Freakonomics is one of my favorites

Central theme of the book:

People respond to incentives, but be careful in how you deploy them….as they sometimes have unintended consequences



Incentives in the wrong way?

What is police work?

The 80MPH police car may have an agenda



What is the reality?

●Incentives are a powerful motivator●Incentives can be dangerous



A day in the life at Progress Energy●Software developer ●Did my job and got great reviews ●I would get a bonus ○Had no clue that it was coming ○Had no clue there was goals

●What happened the next year (no bonus)○Everyone upset… What is the

problem? © Triangle Pest Control LLC. All Rights Reserved


How do you get your employees to think like you?

●Create an employee incentive plan●Based upon performance of critical

results

But these things are hard to get right and easy to screw up...



Incentive Plan Do’s

●Self funded ●Only paid if the entire company wins

(otherwise you get fiefdoms)●Keep it simple and understandable



Incentive Plan Do Not’s

●Do not make it complicated●Have no connection between the

front line and the incentive (otherwise it is an entitlement)



The TPC Incentive Plan●The 20% Rule○I keep the first 20% ○They get whatever is left after that ○After taxes BTW

●Money goes into the pool ○Equal distribution for everyone




1.Teach them about business2.Create an effective incentive plan


When driving...


This ever happen to you….

●You’re driving●You are not paying attention to your

speed ●You are reminded that you should

be as you pass a cop?


Do you agree with this?

When driving there are key things that you must pay attention to and at certain times they must be prioritized?

These are called Key Performance Indicators

Why are KPIs important? © Triangle Pest Control LLC. All Rights Reserved

What is the purpose?

When you are driving a car, what is the purpose?

When operating a business, what is the purpose?


What is the purpose?

When you are driving a car, what is the purpose? - To get where you are going

When operating a business, what is the purpose? - To earn a profit


Key Performance Indicator (KPI)

KPI Defined: Nothing more than the key things that you do to drive results of your purpose

How is this measured in business?


Key Performance Indicator (KPI)

1.Profit and Loss Statement2.Revenue3.Growth Reports4.Leads5.Customer Service


Key Performance Indicators (KPIs)

According to the definition of a KPI, are those good enough?

“It is what creates financial performance in the business?”

Quick Question: Do those reports drive financial results?



http://youtube.com/v/Tl1gl9uk6aY


Just imagine…. ●The driver of the motorcycle spent

his time looking in his side view mirrors. What would happen?

●What is really creating the performance on his motorcycle?



What really creates financial performance in the business?●The people in the organization●The stuff those people do



With KPIs●Lag Indicators ○Tells us what happened after the

fact○Useful… but not helpful for

behavior●Lead Indicators○Identifies what actions actually

produce results○Focuses on those behaviors that

matter © Triangle Pest Control LLC. All Rights Reserved


What are the top-level KPIs?●Profit●Leads●Revenue ●Growth●Customer Service

What kind of indicators are these?



Lag Indicators●Profit●Leads●Revenue ●Growth●Customer Service

Most companies are VERY good at tracking our lag indicators



Lead Indicators●How many calls per sale ●Closing ratio in the office●How many services for a callback●The list goes on and on

Most companies are NOT VERY good at tracking our lead indicators



What is the goal?

We want to as a business identify what our lead indicators are and measure against day-to-day behaviors that produce results

●This is something that each department is going to do (everyone is going to participate) © Triangle Pest Control LLC. All Rights Reserved



1.Teach them about business2.Create an effective incentive plan3.Measure through the windshield



You cannot do it allUse Rapid Improvement Plans to accomplish one thing at a time●Don’t try to implement everything

at once ●Focus can produce amazing things




1.Teach them about business2.Create an effective incentive plan3.Measure through the windshield4.Create Rapid Improvement Plans to

make sustainable progress


More sessions to continue this topic

Business Operations 101: Building the company you always dreamed of

Business Operations 301: Getting your employees to think like owners


One more shameful plug

BackOffice™ ●Designed by me ●Designed to help you work on your

business not in it●Tools for your organization to grow ●Focuses on managing your people ○Training○Reviews and Inspection


Questions?Donnie Shelton

[email protected]

See me at the RGA booth

mailto:[email protected]

mailto:[email protected]