Are Your Company’s Employee Performance Reviews a Waste of Time?

I read this article from Inc. magazine explaining why employee performance reviews are a waste of time and money. While I don’t necessarily disagree, my experience tells me they usually are awful for different reasons. In my opinion, most reviews are not conducted honestly. This leads to problems down the road with employee performance and then legal issues when employers seek to terminate poorly performing employees.

I like to call this the Lake Wobegon effect:  Every employee becomes “above average” because supervisors are unwilling to hold employees accountable.  Then when it comes time to discipline or terminate employees companies are often shocked when I tell them it may be difficult to discipline or terminate an employee because of their employee evaluations.

Employee evaluations are valuable proof in an employment lawsuit.  Make sure poor performance is properly documented.  Otherwise, the judge or jury will not believe you when you say the employee performed poorly but all their evaluations are excellent.  You should conduct the evaluations on a regular basis, usually at least once per year but periodically as discussed in the Inc. article is a good concept if pulled off by supervisors.   It is important to create a dialogue with your employees as long as that dialogue is open, honest and holds employees accountable for their performance.


Women-Owned Business Grants

I am often asked about business grants for women and minorities. In my experience these grants can be difficult to come by but they do exist. Here is an article from Entrepreneur discussing grants for women-owned businesses and also a link to the Targeted Small Business site with the Iowa Department of Economic Development.

Business Ownership Isn’t For Everyone

My social media news feed is full of articles and stories about business ownership. I am a business lawyer. I represent business people. So it benefits me if I promote business ownership and in general I try to do just that. However, I am here to tell you that despite the mountains of articles talking about how successful you can become the truth is that business ownership isn’t for everyone. In fact, it probably isn’t for most people.

Unfortunately, I see the heartache all too often. People who have invested their life savings, only to lose much of it –and sometimes–all of it. People who have bills, stress and anxiety due to a failing business. Most people are just meant to work for other people. They should be employees, not business owners. Sorry but the cold hard truth isn’t said enough in today’s social media channels.

Now, if you aren’t scared off by this point and you’re just bound and determined to move forward with business ownership, the following are some of the more important keys to consider before diving in:

  1. Is there a market for your product/service? Not just a perceived market or a hunch, but is there a REAL market for your product/service? This requires you to some research and hitting the streets to talk to potential customers. If at all possible, can you pre-sell your product or service?
  2. Is there a real need for your product/service? If your business doesn’t fulfill a need it is not likely to be successful. To me, this is also a different question that No. 1 above. Trust me, I have seen too many businesses fail because the product/service did not fulfill a true need. Ask yourself, “Is this something people need to have?” I remember hearing the story of a billionaire who started as a roofer. He got into that business because “even Jesus needed a roof.” Businesses that fulfill a need have a greater chance of success.
  3. Do you have the ability to sell the product/service? If you don’t you have the ability to sell you better get someone on board that does. The greatest idea in the world isn’t any good if you can’t sell it. Execution is more important than the idea and that requires sales. Don’t fall in love with the idea. Fall in love with selling the idea!
  4. How are you going to pay for the business? Bootstrapping may garner headlines but most businesses require capital. Make sure you have enough capital to survive the difficult early periods.  And always keep enough in reserves to weather hard times. And remember you’ll need more than you think you need, so just double your initial estimates to be safe.

The failure to properly answer these questions has been the downfall of many business owners. Don’t let that be you. Ask the tough questions before you invest your hard earned savings.


Unlimited Vacation, Free Beer and Kids at Work. Is this the Future Workplace?

CEOs and leaders of all organizations covet the creative culture of companies like Google or Zappos — it feels out of reach, but it may be right under their finger tips. The Iowa Creativity Summit is featuring Nancy Lyons of Clockwork in Minneapolis on May 28. Free beer, unlimited vacation and other fun perks are just a normal part of her work place, but is there something more to her culture?

Under Nancy’s leadership, Clockwork has received more than 16 “Best Workplace” awards, has won the Psychologically Healthy Workplace, Diversity in Business, Best Women Owned Business, and Bicycle Friendly Business awards to name a few. In June of 2014 Nancy spoke on the structure of the workplace at the inaugural White House Summit for Working Families in Washington, DC and now she’s coming to Drake University on May 28 to talk about what creativity really looks like.

Tickets are on sale at the Iowa Creativity Summit’s website:


Looking to Buy a Franchise? Don’t Make These Mistakes

Inc.Magazine has a great article on the 5 Biggest Mistakes People Make When Buying a Franchise.

The one I want to touch on in this post is #4 – Not learning how to implement the franchise system. All too often, would be franchise owners think they are “buying their own business.” This is not really true. What you are really buying is a franchise system. (Well, at least you hope it is a system because far too many franchises have no system at all but that’s for a different blog post). You will need to implement the system and training programs into the business. But make no mistake – the franchisor is not interested in your plans to change their system or develop your own system. They are looking for you to run THEIR system. If you can’t do that franchising is definitely not for you.

I encourage you to read the full Inc. article.

Franchiseless in Seattle?

I had to share an excellent blog post on Seattle’s $15 Minimum Wage: Not Unconstitutionally Discriminatory? by Shannon McCarthy of the ZorBlog. My tongue-in-cheek title unfortunately rings some truth. If you read Shannon’s post you will see that the Seattle mayor and city council members are, shall we say, less than welcoming to franchisors and franchisees alike.

The issue is that most local franchise businesses are your small, local, mom-and-pop operation. They’re a small business much like the local business down the street. The thought of paying $15.00 minimum wage to employees is daunting at the very least and perhaps impossible if the local franchisee hopes to make a profit. They are the same people you sit by at your high school sports events, attend your church and serve on local boards.

The problem is that Seattle has said that small employers have seven years to conform to the wage minimum while large employers have only three years to comply (four years if they provide health insurance). Large employers are defined as companies that employ over 500 people AND all franchisees associated with a franshisor or network of franchisors that employs more than 500 people aggregate in the United States.

Try telling your local franchisee that he or she is a large employer. They would probably look at you with bewilderment! Perhaps downright shocked. But Seattle’s mayor and city council certainly don’t seem to care and if a franchise or two (or hundreds) are lost along the way then so be it. The perception is that these franchises are big business. Not your local mom-and-pop.

This is just another example of why you need to carefully consider franchising as a potential business option. It is important to understand that franchising presents just as many risks as opening your own independent business, and in some cases the risks could even be greater.

BIZ Luncheon Features Casey Niemann of AgriSync

If you are fresh off your spring break and looking for a great networking event I recommend attending the BIZ Luncheon this Wednesday, March 25th at the Ruan II Building, 601 Locust, Conference Room 101 in Downtown Des Moines. Casey will share the tale of his leap from the corporate world with Microsoft to the start-up of his new business, AgriSync. It will be sure to be a great event!

For more information click here.

Agricultural Lawyers Join Brick Gentry Law Firm

The Brick Gentry Law Firm is pleased to announce that three distinguished agricultural attorneys have joined the law firm effective February 2, 2015.

Those attorneys include (click for bios):

Eldon McAfee

Erin Herbold-Swalwell

Julia Vyskocil

All three bring a breadth of experience particularly in Ag law including trials and business work.  We are very excited to have them on board with our firm!

Business Owners: Don’t Neglect Succession Planning

All too often business owners neglect succession planning. In fact, according to a recent Inc Magazine article and Deloitte survey on the topic, 90 percent of business leaders recognize the success of their company depends on effective leadership succession but only 13 percent are confident about the succession plans they have made. And those are business leaders who have actually MADE succession plans. I’d venture to guess, based upon my experience, that the majority business owners have no real succession plan in place.

It may be hard to think of your business without you. After all, it’s YOUR baby. But in order to build real value you need to start building a framework for the business to run without you. The Inc Magazine article has suggestion on how to build this framework:

  1. Outline ideal leadership characteristics – what type of leader does your company need? And here is something to remember, it isn’t necessarily the No. 2 person in the company due for the promotion that is the best leader for the future. Get specific on the qualities needed from your future leaders. I’ve had clients who owned family businesses and determined that the organization needed a more professional manager than the children coming through the ranks. Sometimes tough decisions are required.
  2. Define what actions your new CEO needs to take –  is the company looking for growth, will it be merging, will staff need to be trimmed? The executive coach quoted in the article says,  “Focus your leadership development program on strengthening employees’ ability to deliver strong and credible results, to master new types of expertise, and to uphold behavioral standards that reflect the company culture and values.”
  3. Identify mentors to assist the new leaders. This is critically important. I’ve noticed with my clients and my own businesses that good mentors are critical if you hope to build a sustainable business. If you aren’t there to mentor you need to find someone, whether it’s inside or outside your organization, who can serve in that role.
  4. Outline the fast-track process. How will the new leader know he/she is taking over. Identify those leaders and begin equipping them with the training, incentives and added authority of that role. And keep your word provided the new leader performs. I’ve seen it get real ugly when a future leader is groomed for taking over but then the rug is pulled out from underneath them. In one case, I saw a future leader leave to start his own business and took nearly all the business away when he left.  All because the owner was simply too greedy to turn over the reins as agreed upon (But the example also helps explain why not only incentives but also a strong non-compete are important to tie your future leader with the company).
  5. Build performance metrics. Figure out ways to measure a future leader’s problem-solving and decision making skills. The article suggests following the lead of companies such as IBM and GE can help you develop standardized methods of leadership development.

I encourage you to read the Inc article.