Daniel Massey

Avoiding Difficult Decisions In Your Business

Small Business Series – Mistake 6:

The next in our series of mistakes that small businesses make is more of a soft skill that goes unrefined as opposed to a financial skill. There are plenty of difficult discussions that business leaders need to have during the course of a career – not giving somebody a promotion he or she thought was warranted, putting somebody on a corrective action plan, holding a colleague or peer (or even superior) accountable for an important task, a customer or vendor is not agreeing to terms in a contract. There are dozens of examples, but the conversations are not always easy, and inevitably, even the most dedicated leaders shy away from them.

I have spent various portions of my adult life coaching collegiate and scholastic track and field, and one of my fellow coaches was the best I’d ever seen at handling a high-stakes conversation, whether it was with an athlete, coach, teacher or administrator. When I told him how much I struggled with those types of conversations and how much I admired him for it, I insinuated to him that he liked the potential for confrontation. I have not forgotten his response. “You think I like having these conversations? I have to get myself psyched up every time I go into one.” The idea that someone who dislikes confrontation could be so skilled in navigating tricky subjects was an eye-opener.

The book Crucial Conversations has a number of very good tips about how to handle difficult discussions, including many examples regarding business.

The authors define a crucial conversation as one in which there are three aspects: (1) opposing opinions, (2) strong emotions, and (3) high stakes. Certainly during the course of conducting a business, these three situations will occur simultaneously at various junctures, if not daily.

The research included in the book is vast, and there are a number of conclusions drawn from companies with employees skilled in the art of crucial conversation. The results of the research showed that these companies:

• Responded to economic downturns five times faster.

• Saved $1,500 and the equivalent of one work day of production for every instance of a successful crucial conversation.

• Increased trust within teams.

• Inspired a change in attitude for employees who were under-performing and/or had aggressive attitudes.

Even more amazing, the research showed that by having the conversation and not holding it inside and letting it build within a person, that they would have drastically better physical health as well.

Generally speaking, the authors found that there are three approaches to conversations with poor performers, but the example is suitable for any type of difficult discussion:

• Worst: Ignore under-performer and then transfer them.

• Good: Have the conversation about performance but not in a timely manner and only after putting it off for a significant period.

• Best: All employees hold all other employees accountable.

Here are some tips about entering into these types of conversations, although the book goes into much more detail and is a good resource for those business owners or leaders who struggle with the concept.

Mutual purpose – chances are that both parties to the conversation want similar things (personal success, corporate success, etc.). Identifying that mutual purpose helps the conversation.

Mutual respect – as soon as a member of the conversation feels that the other member does not respect them, emotions become higher and the conversation can turn volatile. Retaining that respect throughout the conversation is paramount to its success.

Clarify what you want and don’t want – Nebulous suggestions will get insufficient results, so being abundantly clear and making sure that the other person perceives that clarity will work toward greater outcomes.

Apologize if necessary – I once had a boss who said that you should never apologize to a client because it makes them think you don’t know what you’re doing. This individual was not confident in his ability and could sometimes make things worse when a simple apology would have paved the way for a smoother conversation, especially if there was an unintended response to something that was done that caused harm.

See previous installments in the Small Business Mistakes Series:

By Dan Massey, CPA, Manager
This installment is brought to you by Dan Massey. Dan is a Partner in the firm’s Assurance Division. He performs audit services for clients in many industries, focusing on construction, entertainment production, and not-for-profit entities.
Dan is both a member of the American Institute of Certified Public Accountants (AICPA) and the Pennsylvania Institute of Certified Public Accountants (PICPA). He is also chairman of the C.O.R.E. Task Force for the Keystone Chapter of Associated Builders and Contractors.
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