The contention between the two teams caused a rift that hindered the entire company’s ability to ride the wave we were on. The company eventually failed. There were multiple reasons, but one key reason would have been incredibly easy to fix: office layout. The engineering team never should have been sitting next to the sales team in the first place. Maybe the sales reps were lying, or maybe they were just stretching the truth; either way, the engineers would have been better equipped to deal with back-end troubleshooting than with up-front sales tactics.

One system that has succeeded for me is to structure the office layout in terms of the flow of the business. In the example above, a better solution would have been to place the product management team between sales and engineering, playing the buffer role and helping maintain the balance between customer demands and engineering realities. The technical support team should sit as a branch of the engineering team, yet be accessible to sales. The engineers work best when kept away from all distractions. In our office, we find it helps to place engineers in the back of the building, close to food and drink. We make life comfortable for them; as a result, they are more productive. Your admin, of course, should be your first line of defense between the world and your company. Anyone wanting to talk to you or anyone else should go through the admin to get there.

Maybe it’s trivial, but I have one last note concerning the layout and structure of your office. Make certain your teams have the most up-to-date and comfortable gear possible. If this is out of the realm of the probable, then give them the best of what you’ve got. This small act instills respect and helps them value the company.

One of the best immediate supervisors I ever worked with was a dynamic man named Rob Allred. Rob managed a team of about twenty-five employees, all housed in an open office environment consisting of one large, cement room. Most of the team was using tattered, uncomfortable rolling chairs. One afternoon, a shipment of brand new chairs arrived. Everyone clamored noisily to claim their prize. Even Rob joined the crowd to make sure he got one. Every man for himself!

I watched as everyone set up their chairs and tried them out. I noticed Rob sit down on his chair, settle in, and give it a bit of a test drive. All of a sudden, he got this concerned look on his face. He got up and proceeded to go to each of his employees and check out their new chair. He went around the room, finally discovering a team member, Robyn, who had not shared in the spoils. Without hesitation, Rob grabbed his catch and wheeled it over to Robyn, exchanging it for her old clunker. Because of these types of acts, Rob was deeply trusted and appreciated. No matter the situation, his team knew he had their best interests at heart.

Porter’s Points – The Lay of the Land

• The physical location of each employee matters. Eavesdropping happens; don’t let it stop your company’s progress. Separate engineering from sales and use other teams as buffers. Even encourage your admin to float around a little to keep the peace.
• Admins do not belong in the back offices. Put your admin up front for an effective first impression. Engineers, however, do. Put them in the back and let them work.
• As far as possible, ensure your team has comfortable, up-to-date equipment. Whether chairs or computers, make a big deal out of it. Little things make office work exciting; executive attention to little things builds unity and trust.

While at Mitsubishi Electric, I managed a highly effective team that was working on winning a significant deal. We had labored long hours for several weeks (including several sleepless nights). The CEO of our target company was a guy by the name of Peter V., a tough, hard-nosed businessman. I flew to the target company’s headquarters and won the contract—a great payoff for my team and their hard, smart work. On the return flight home, I composed an email to send to my team and the executive management of Mitsubishi.

The email outlined our cost structure in detail, delineated how things would work going forward, and showed a great margin—in short, it opened wide the deal’s kimono. It just so happened that many of the Mitsubishi executive team members were named Peter. So I began adding the Peters from my address book one after the other. Upon landing and getting a connection, I let the email fly. At 5:00 a.m. the next morning, my well-deserved snooze was disturbed by Peter M., a member of the Mitsubishi executive team who had received the email.

“Rich, congratulations on getting the deal! By the way, who is Peter V.?”

I mumbled through sleepy eyes and hazy thoughts, “He’s the CEO of the company who awarded us the deal. Why?”

Peter M., “Do you realize that you copied him on the email outlining our exact margins, costs, how well we came out, and how you just gave him a good, all-around spanking?”

All of a sudden, my kimono was hanging wide open. In a panic, I bypassed the shower, breakfast, and family, and broke land speed records to get to the office. I waited dejectedly, slumped in my chair, anticipating my team’s arrival.

As they filtered in, they were intrigued by my disheveled appearance and began asking questions. After giving them an update on our precarious situation, my admin called an emergency meeting. Here’s how it looked that fateful morning.

We had a room called the “War Room,” so designated because it was the place my team met to do all the heavy lifting. I stood in front of my colleagues and explained what had happened. It felt like there was no recovery possible. I couldn’t muster a single idea. The team began brain-storming. Shawn, an incredible executive admin, put a call in to Peter V.’s executive admin to test the waters.

“Hello, Sarah, this is Shawn. How are you today? Rich was hoping to have a conversation with Peter. What is his status?”

Sarah responded: “He is on a flight right now to Las Vegas.” Good sign!

Shawn continued: “How is he at checking his email?”

“He’s religious. The second he touches down he’ll go to the hotel and check his email before anything else.”

“What time will he land?”

“I think he lands about twelve-thirty our time, so it should be at about one o’clock that he’ll get his emails.”

Shawn got off the phone and reported: four hours until Peter V. was able to check his email. One of the members of the team, Dave, said, “I’m really good friends with Jim, the IT guy at Peter V.’s company. I could call him and tell him that there is an inappropriate email that has gone through, and see if he’ll erase it. It’s risky, but better than doing nothing.”

The team sat musing, and tried to expand on the new idea. “Well, what emotions are involved in this? What needs to happen to get the response we want?”

Everyone started naming emotions: fear, frustration, greed. Someone suggested confusion—if we could simply create enough confusion.

Finally, someone suggested that I send 100 emails with the same title but nothing in it so it looked like spam.

“Whoa, that might work—and while we’re at it, let’s add a little fear!” I chirped.

We finally decided that everyone in the office would send 200 emails to all of their contacts in the target company with meaningless titles and bits of information. We ended up dumping something like 5,000 emails to the target company in a matter of one minute. It wasn’t two minutes before Jim called Dave and asked: “We just got 5,000 emails, what’s going on?” Dave responded, “Whatever you do, delete every email you got from us in the last 24 hours. If you don’t, a virus will mail itself to every address in your company’s database.” Jim did just that!

Nightmare solved. Bacon saved. Lesson learned.

Surround yourself with people you trust and let them use their skills.

Porter’s Points – The Power of Team

• Trust and empower your team to make decisions and take actions for the good of your company. Give them problems and let them come to you with solutions, always looking to make them stretch a little more than last time.
• Do not punish mistakes that are made in an attempt to contribute. Take ten minutes to cool down if something blows up, then go back and make it a learning experience and not a tirade.
• In times of crisis, let your team save you. If you haven’t empowered them before, though, they may have trouble treading water themselves. The power of team comes as you regularly involve the players, so give them practice.

Have you ever called your doctor’s office only to be answered by a grumpy receptionist? What about the time you walked into an office and the first person you met was rude and indifferent to you? Now think about the time you encountered a cheerful, competent, intelligent individual sitting in that “first-impression chair.” How did you feel in each situation? How do you want people in consumer, vendor, and trust relationships to feel when they come to your office?

The other day I went to the dry cleaners to drop off some of my shirts. As I walked in, the lady working the front desk growled, “You’re bringing me all those shirts?” I replied, “Isn’t that what gives you a job?” She responded with a blank stare and confessed that she was tired and just looking forward to a light day. The woman didn’t equate her work with the success of the business; rather, she justw anted to put in her hours, get paid, and go home. If I were the owner of this business, I would have been mortified to know my first-impression employee was discouraging customers from bringing in large bundles of business.

Porter’s Points – The Most Important Hire

• Define your company culture before interviewing for your most important hire. Your admin, more than any other employee, has to fit. Consider having one of your trusted relationships, such as your spouse or mentor, interview the candidates as well.
• Conduct real-time, surprise skill tests with all finalists: how do they handle phone calls? Upset customers? Can they write intelligent and purposeful letters?
• Don’t rely just on looks. She may have polished nails and shoes or he might have walked right out of Men’s Health, but being easy on the eyes does not guarantee that either one can handle your company with confidence. Appearance is part of the first impression, but your admin tackles behind-the-scenes work, too.
• Your admin must be an office-politics agnostic. No pot-stirrers at the front desk, please.

A cultural misfit might be someone who gossips, makes other employees feel uncomfortable, acts or peaks inappropriately, or unsuitably represents the company. Maybe the new hire has proven he or she cannot be trusted. Maybe you just aren’t getting the level of contribution that you were hoping for. Maybe they really aren’t up to the task at hand. The list can go on and on.

What now? Act quickly. You know, they know, and everyone else in the organization knows that the fit is not right—for anyone. Don’t beat around the bush. Go through the necessary steps (whatever you deem them to be), but go through them as quickly as possible. If you wait too long, the bad egg will begin to really smell, negatively affecting the rest of your team as well. Why does it affect the rest of the team?

Everybody knows who does and does not carry their weight. The team all knows who fits in and who does not. If they see someone acting contrary to the goals of your company, they will either begin to feel alienated or they will take that person’s actions an excuse to offer less than their best. Which of these options would you prefer? I’ll take neither. Set the right tone. Do the hard thing with kindness, respect, and courtesy, but do it. Between the two of us, Ron and I have hired hundreds of individuals. Some have worked and some haven’t, but ultimately, rotten apples seldom turn delicious.

Just remember before you fire that certain States are “Right to Work” States. The labor laws in some are tougher than others. It is important to understand the laws of the State where you are doing business—yet another reason you need that savvy attorney as the second most important person in your life.

Also, take caution not to let the rumors fly. It is especially important in a burgeoning company to gather the troops around and communicate any changes that are occurring. The following style of speech has worked well for me:

“Today we made a difficult change in the organization. We had to let John go. We appreciated John’s contribution; however, our needs were no longer compatible. We wish him well. These situations are always difficult, but are necessary at times. This was one of those times. If any of you have any specific questions or concerns, feel free to come and talk with me privately.”

But don’t just leave it at that. Turn the direction of the conversation to your next goal and what you are attempting to accomplish. Leave your team with a positive feeling about their contribution and what you hope to do together. This meeting should last twenty minutes or less. Remember, ninety-five percent of the time, everyone else knows what is going on before you do. They might even be glad to see John go, but don’t let those feelings fester. Turn your team back to your goals and start things rolling ahead again.

Now, lest I be misunderstood, let me add a few words about diversity. I not only appreciate but actually seek out diversity. Conflict can be creative. I have no need or desire for a “yesman” organization. I detest the “good ol’ boy” clubs I saw time and time again in the corporate world, teams staffed and managed by less competent individuals who happened to get along with the right people and offered no diverse opinion, input, skills, or attributes. I detest politically-correct employees who take measured steps to posture themselves and look good around the right people but offer no diverse thinking. Look for diversity, but apply the same principles outlined above.

Porter’s Points – Quick to Fire

• Trust your intuition as concerns come up. Be ever vigilant of the workplace atmosphere; if things head south, get to the bottom of the problem and fire if you have to.
• Be courteous but act quickly. It’s best to know things like labor laws and company expectations up front so that you can move swiftly through the firing process without causing too much damage.
• As soon as you release someone from the company, pull the team together and publicly announce it. This isn’t time to paint a bullseye on the ex-employee; it’s the time to be positive and focus on your company goals to get productivity back on track.

These initial hires should be generalists. You have your specialists in your accountant and attorney; from there, you need to hire switch-hitters. These generalists must carry with them “can do!” and “how can I contribute?” attitudes. The last thing you want is to hire a person who can or will wear only one hat. To avoid singlehatters, you need to carefully go through the hiring process, considering everything from the cover letter to final references before you sign on the dotted line.

Not only does your team mold your culture, but you can use your culture to mold your team. (See chapter 16, “The Holy Grail,” for details on creating your company culture. In this section, I will focus on the hiring side of that endeavor.) One of the side benefits of getting your culture somewhat established prior to the hiring phase is that interviewees will see it and sense it. You will better discern whether or not the interviewee will fit into your culture. Hire people who will choose to jump in with both feet. These people will embrace your vision and help you quickly and effectively move your enterprise forward.

In July 2004, I was interviewing for a creative ad copywriter for one of my companies. These ads would be seen by millions of people each month. I needed someone with solid writing skills and the ability to create imaginative and pertinent advertisements. I looked through about one hundred and fifty resumes. About one hundred and forty-nine of the cover letters looked something like this:

To Whom It May Concern:
I am writing this email in response to the job order for
creative ad copywriter. I am very interested in the position
and I have attached my resume. If you would like additional
information about me, I am registered with the Department
of Workforce Services. If you would like to contact me,
you may do so via email or phone. I appreciate your time.
Sincerely,
Applicant

The hundred-and-fiftieth resume really stood out. Here’s the cover letter it came with:

Dear Rich:
Do you need a writer who can create charismatic, creative,
captivating, and compelling ad copy? Are you missing
some zing-da-ba-ding in your current ads? Do you just
need a little dash of this, or a pinch of that, to make
your copy more palatable? Well, consider me your word
chef! I can slice, dice, and spice the ad in a way that will
make your mouth water and taste buds anticipate. I have
included my past engagements as chef extraordinaire, but I
am looking for ways to bring home the bacon, while never
really leaving the kitchen. That is why I was drawn like a
magnet to your enticing placing with Workforce Services.
I love to write, read, research, and analyze, and I believe
these are skills that are really gifts. I was born with it, and
it has been sharpened and honed over time. I have not only
the ability to tap into my creative side, but also am quite
left-brained in my attention to detail and my organizational
abilities. I can work alone or with others, and I never run
with scissors. I’m a great person to work with because I am
funny and personable, but I can also be very professional
and prudent. I would look forward to an interview with
your company, partially because my curiosity is piqued,
but also because it sounds like a great opportunity. Even
if this email reaches you too late and finds you have filled
the position, please keep me in mind for future positions in
any of your catering needs.
With spice,
Marta Wells

Who do you suppose got my attention—and the job? Watch for applicants who stand out! You’ll always need an interview, of course, but the first contact can tell you a lot about a person, the way they think, and the attitude they will bring. Make sure that this all lines up with your culture, and don’t be afraid of a little spice!

Consider building quirks into your culture, just left or right of established norms. Killer teams need creativity. Creativity can sometimes get pretty quirky. In the hiring process, do not be afraid to mention these quirks in an interview. You might say something like this:

“We are a nimble, dynamic team. Our culture is not for everyone. We embrace accountability and expect all of our team members to do the same. It may be a bit out of the ordinary, but we display everyone’s prioritized objectives on the whiteboard. We conduct regular ‘face the whiteboard’ sessions where everyone reports on the status of their objectives. We all answer to the team as a whole. If that kind of accountability bothers you, this is not the company for you.”

Also, share a story or two in the interview process that has helped define the company. This fun and revealing practice might highlight some successful but intense negotiation or a silly snafu that you had to escape. See how the candidate responds and comments. Making bold statements and telling stories weeds out the people who want to sit in a cubicle and offer only the “status quo.” It also gives positive signals to the
person who is the right fit.

Recently, Ron and I went through the process of hiring a new engineer. A talented fellow applied, and our interview team explained the prevailing mentality we needed in whoever filled the position. For this special object, failure was not an option. We knew we had to see this project through to the end, even if it meant extreme days and nights. Accordingly, we wanted to hire someone who could jump on board with both feet. There wasn’t time to dilly-dally.

This applicant’s response to our need was something along the lines of: “At this stage in my career, all I really want is to work from home. I want to start whenever I get up, go work in the garden when I want, and then get back to the project later in the day.” Not a bad aspiration—plenty of people want a little freedom— and perhaps it will fit somebody’s culture somewhere, but not ours and not now. We all opted out. We went on to hire someone who had the attitude we needed. As for our other applicant, we heard he found the right fit and is contentedly programming software from a lawn swing tucked away in the corner of his secret garden.

Take time to compile a list of interview questions that will reveal the attributes that you want and need to know. Ask every candidate the same questions so you have a level playing field. Keep notes on the answers in case you have to choose between two or three really good candidates. Take time to find the candidate that fits the culture. Be slow to hire—always!

Porter’s Points – Slow to Hire

• Employees make your culture as much as culture makes your employees. Before you start faxing out tax forms and contracts, consider the following:

1. Make the finances fit. Reducing your workload so you can hang around the water cooler more often is not a valid reason to shop around for additional employees.
2. Consider whether or not you can outsource the job.
3. Take as many applications as possible for the position. Screen them by phone before inviting people in for a formal interview.
4. Interview finalists back-to-back to be able to make good comparisons.
5. Call the references and check out candidates’ backgrounds

• Culture is crucial to your company. Once you have done your homework, don’t settle for anything less than the best.

1. Listen to your gut. You can make a culture outside of the norm.
2. Know what type of culture you want before you hire.
3. Don’t be afraid to add a little spice to the ingredients of your office recipe.
4. Hiring may not really last ‘til death do you part, but treat it that way.
5. Doing it right up front beats back-end cleanup.

1. Your accountant
2. Your attorney
3. Your spouse (or significant other)

My wife has no problem voicing her feelings about coming in third. She fervently proclaims that neither my accountant nor my attorney has ever had to wonder if they were going to live without health insurance or income, or whether they would not see me for weeks on end as I started a new venture. And I agree with her! Your spouse or significant other is actually the first relationship you have to consider when deciding to start a business. Without her or his support, your venture will crumble from the beginning.

However, I order my VIP list this way for several reasons. First, I do it for the fun of forcing a reaction from my wife. (She knows to expect a little bit of this by now, and it enriches our relationship.) My teasing her aside, I cannot overstate how much you need this same support, which brings me to my second reason. Her or his support won’t just magically happen, so you need to open a dialogue about the role of your significant other in your venture. Finally, I use this order to stress how vital it is to ensure that you have the right accountant and the right attorney in your corner as you strive to push your endeavor through its formative rounds.

The reality is that having a spouse or significant other who is willing to embark on this adventure with you is, without question, the most important variable in being a successful entrepreneur. I worked with an individual who had an incredibly gifted business mind and a deep understanding of technology. He was very intelligent, with amazing intuition and market sense. To top it all off, he possessed the rare ability to clearly articulate his knowledge and communicate with engineers.

My first impression of this man was he had the potential to be one of the most amazing entrepreneurs I’d ever come across. We actually embarked upon a short-lived partnership, aiming high and beaming broadly. Why short-lived, then? His wife kept him from ever giving it a healthy go.

She required him to keep his working hours between 8 a.m. and 5 p.m.; anything after 5 seemed to violate the terms of an unwritten prenuptial agreement. Furthermore, his wife—a delightful woman, by the way—mandated a certain level of financial security. She could not stomach the thought (much less the reality) of going without a paycheck for more than a week. She didn’t want to sign up for the risks and rewards associated with entrepreneurship; as a result, he could not, either. His home situation simply did not enable him to consider being an early-stage entrepreneur.

As he did to me, Dr. Peter Horne frequently reminds his protégés of this imperative: “You can replace anything in your life except your family, your health, and your trust relationships.” To this end, it is vital that you analyze your home situation and assess your significant other’s ability to live the entrepreneurial life. In more ways than one, the spouse or significant other of an entrepreneur could be the more difficult role to manage.

During the nurturing stages of the business, your spouse is often relegated to living with a lack of clarity about financial circumstances. To add insult to injury, in this stage spouses tend to live life looking at a control panel that is just beyond their reach. Often, unless they are actively involved in the venture, they share all of the risks with none of the decision-making power.

If your significant other does not have the temperament for this lifestyle, there is no shame in following a different path. As badly as you may want it, don’t do it. You can use your entrepreneurial spirit in some other way—really tackle your corporate work in innovative ways, pick up a hobby, or bootstrap a small business on the side instead of taking the complete plunge.

It is better to come to this realization during the idea stage. Do what you must to secure this trust relationship; don’t go so far down the road that you are faced with a no-win decision. Perhaps, with time, you two can be on the same page. Until you are, trying the waters will always lead to failure on at least one of the two fronts, if not both. We paraphrase this wisdom from the Gospel of Mark: “What therefore God hath joined together, let no venture put asunder.”

Now that you’re convinced that number three on my list should be number one, let’s go back to one and two. Through the years I have tested numerous accountants and many, many attorneys. The reality is that finding the right attorney and accountant is not as easy as it sounds. From my experience, many accountants and attorneys are more eager to tell you “how it can’t or shouldn’t be done” rather than “how it could be done.” You need professionals who can find creative solutions.

There are so many laws and variations of those laws governing how to set up a business that it is crucial to engage an accountant and attorney who are on top of the latest ways to get things done. Many attorneys and accountants are familiar with one or two ways of doing things and hesitate to take the time and effort to figure out different ways of setting up your business. Find an accountant and an attorney who are willing to be creative and uncover personalized solutions that are right for you and your venture.

In all of this, however, I do not promote illegal or unethical activities. Worse than an uncreative lawyer or accountant is a liar—and whether that liar is one of them or you, dishonesty is no way to build a business.

One of my favorite anecdotes exemplifies the necessary honesty-and-creativity-oriented mindset for an accountant. In the early days of his company, an assertive CEO was hiring a financial controller. He invited a candidate into his office and a short interview ensued. The CEO asked the applicant, “So, you know numbers pretty good?” The would-be controller responded in the affirmative. The CEO shot back, “What’s two plus two?” The candidate paused, looked the CEO in the eye, and quipped, “What would you like it to be?” The CEO hired him on the spot.

One key reason the right attorney and accountant are so important in the early stage of your bootstrap adventure is cash flow. You must understand the implications of the tax structure you are setting up. You must understand the ramifications of tax laws and why cash accounting may be more appropriate than accrual-based accounting. You must protect your asset, your intellectual property, your good name, and your reputation.

Savvy and intelligent accountants and attorneys are critical. The right attorney can be used as a hammer in difficult circumstances. Consider what course you might be forced to take at the butt-end of a deal involving unscrupulous customers, partners, or employees. Could you use a tenacious and assertive attorney? Unequivocally, the answer is yes.

Don’t guess! If you are uncertain about where you stand in these relationships, do some digging. Talk openly to your loved ones, make plans and promises, and do your research on the people you hire to handle your affairs. This foundation builds your successful team. If your spouse or significant other is on board and if you have a clever, assertive attorney and a creative, energetic accountant, you’re well on your way to success. I cannot count the times along my entrepreneurial trail one of these three people has saved me from charging over a cliff. It really is as simple as that.

Porter’s Points – The Three Most Important People in Your Life

• Do not attempt to replace your family or your trust relationships with your entrepreneurial dream. Find alternate ways to build your dream and test the waters if you need to. People and circumstances may change with time
• Look for an accountant and attorney with a “can-do” attitude. If one of these two crucial people gets annoyed when you ask “Is there a better way?” then you know you need a better fit.
• Listen to and for the truth when you talk to these three most important people. It may hurt a little at times. You need someone willing to dream, but you don’t want to be fed peaches and cream when what you really need is spinach and broccoli.
• Seek to surround yourself with young, hungry individuals, as opposed to stodgy, set-in-their ways corporate counsel.