Category Archives: Business

Tips to Prepare Your Business Before You Sell It

unduhan-68Approximately 700,000 to 800,000 small to mid-size businesses change hands each year. And, I can guarantee that in every case, the seller, and buyer for that matter, invested a good amount time, money and emotion throughout the undertaking.

For the seller especially, the process of selling a business can be an emotional undertaking. You’ve put your sweat equity into the business. You’ve sacrificed over the years — missing family time, skipping paychecks and working at all hours of the day and night. Your business is your baby.

However, when it comes time to plan and execute an exit strategy, you have to strip away a lot of the emotion. It is important to be as realistic as possible about what your business is worth. If the exit strategy is not done correctly, your business can suffer damage.

A few of the most common factors for a business not selling:

  • Lack of preparation of business for sale
  • Unrealistic selling price

Having a trusted, third party business valuation conducted is one way to begin the process. With the data from the business valuation, you can plan for the procedures needed to raise the value of the business so that you can maximize the return on your years of investment in the business.

The following list offers 5 tips to “put a shine” on your business when it comes time to sell. These have proven to add up to 20 or 30 percent more value to businesses.

Timing is everything

The best time to sell is when you are on top, when the company is doing well, the industry is flourishing, and next year looks even better. Additionally, cyclical factors are important. For example, in retail most revenue is earned in 4th quarter. Thus, it is recommended that you aim to sell your business in the 1st quarter of the following year to show good revenue and the inventory is at lowest point.

Getting a proper business valuation done to set the selling price

Most business owners are not aware of how businesses are valued. And, in many cases, sellers assume value based on emotion or rules of thumb. They overvalue based on how much time and work they put in, and how much it means to them. Generally they think the value is higher than the true market value. Thus, they need for a professional to give advice.

The first step before business valuation is to determine how much money the new owner will have to make … reason being, generally businesses sell for a multiple of what they earn or Sellers Discretionary Earnings.

Another formula is a Percent of Revenue. Hard assets are not a driving force in business valuation. Some assets add or subtract from value such as Accounts Receivable, Inventory and Work in Process. Comparable sales data is often used to determine market multiples.

Organize the books and records

When preparing your business to be sold, re-cast the financial statements, or normalize them.

Most small businesses operate their companies in a manner to minimize taxes. However, when selling, they need to know the true economic value of the business. Analyzing financials and eliminating all non-operating expenses and discretionary expenses do this.

De-emphasize the owner’s personal role in the business

When selling a business, you want to be certain that the buyer knows he’s acquiring talented leadership that can continue to run the business after the purchase. The original owner should not be positioned as the only decision maker. Rather, others should be involved in customer contact, and vendor contact. A “right hand man” is needed — male or female managers who are part of an infrastructure that reduces the dependence on ownership.

Understand the mindset of buyers today

Seventy percent of all buyers are first time buyers, often displaced corporate employees who will be owner/operators replacing a job and looking for financial independence. What matters most to buyers today? Here’s a list of what buyers are looking for in businesses for sale:

  • Buyers look for ways to enhance the business, is there an “upside.” They generally think that they can do better than the previous owner
  • Proven verifiable books and records, tax returns
  • Reasonable price
  • Leverage and terms — they want to use bank financing, owner financing and as little of their own money as possible
  • Solid, verifiable cash flow
  • Furniture fixtures and equipment properly valued and in good condition
  • Positive appearance of facility, good reputation
  • Favorable lease and lease options
  • Training, transition period with the seller
  • Covenant not to compete, non solicitation agreement
  • Solid reason why the owner wants to sell
  • Experienced employees who will stay on
  • No last minute surprises

Some Things Must Consider Before Take Business Loan

Is this your first time venturing into the small business loan frontier? Obtaining a small business loan is just one of the first steps to launching your business. Proper financial planning, however, is critical to your success.

There are two key things to keep in mind as a small business loan first-timer. If you’re seeking a small business loan, the way you present your business idea, business plan and financial forecasts can be the difference between gaining or not gaining investors’ or a bank’s approval. But once you do get a business loan, how you manage your operations and where those funds go can make or break your entire business.

From creating a budget to managing costs, there are several steps you can take to make the most out of obtaining and managing small business loans. Holly Nicholas Signorelli, a certified financial planner and CPA, advises aspiring entrepreneurs and small business owners to maintain realistic expectations. Based on more than 20 years’ experience, Signorelli shared the following do’s and don’ts of first-time small business loans.

Editor’s Note: Looking for a small business loan for your business? If you’re looking for information to help you choose the one that’s right for you, use the questionnaire below to have our sister site, BuyerZone, provide you with information from a variety of vendors for free:

1. Do create a real budget.

About 90 percent of the time, clients come in with a huge budget made up of millions of dollars in profits, Signorelli said. But when you start to go through the line items, there isn’t any real backup to substantiate the numbers. Instead, there is always some hype about the product, the market in general and, most of all, “the potential.” Banks and investors don’t want to buy your idea; they want to make a profit, Signorelli stressed. For them to believe in your idea, they have to believe there is a profit. With very few exceptions, they are not going to invest in your idea if it doesn’t make sense, or if it feels too good to be true, Signorelli said.

2. Do have budget references.

Make sure that every single line item has a reference behind it, Signorelli said. “Real figures, real research — get down and dirty on it,” she said. “For example, if you are providing a service and your budget states that you can sustain XX amount of customers per month at XX amount of dollars, then the price of the service will be easy to show, given the average price of that service in your geographic area,” Signorelli said. However, you need to back up why the customers would come to you versus the competition. “That’s ‘down and dirty,’ and you can’t get too detailed; keep it short and to the point with backup,” Signorelli said. “Think about it: When you are reading a budget, you don’t want someone rambling about their pipe dream. You want to know that the person understands what it’s going to take to make a profit and has a clear plan to bring in business.” In other words, you want details, but you want them to be short and concise.

3. Don’t overestimate your income.

“In 20 years, I have never seen a budget where the income was as high as predicted in the first year,” Signorelli said. This is critical, because the lack of income in the first year is what causes 80 percent of small businesses to go out of business, she said. “Once your budget is done, go back to it and reduce your income 25 to 50 percent less than what your due diligence led you to put on the report,” Signorelli advised.

4. Don’t underestimate your expenses.

“There are things that you underestimated, no matter how meticulous you were, and there are things that you forgot altogether,” Signorelli said. “Just like income, you need to go back to your budget and take your expenses and increase them by 25 to 50 percent.”

5. Do have extra funds.

As a small business owner, it’s critical that you have enough savings, to make sure you can pay your bills during the first year, Signorelli said. “It was hard enough to get your loan, but I promise you that six months into when you are not profitable, no one will want to loan you more money to get you though the next six months,” she said.

6. Don’t stress about finances.

To make it through the first year and build a profit, you want to focus on marketing and bringing business in, so you don’t need to stress about finances, Signorelli said. Manifesting and building a business requires you, the owner, to believe in yourself and your new small business. With the right budget, you will get the right amount of money from the right investor, giving you the freedom and confidence to focus on your dream and make it happen, Signorelli said.

7. Do learn from your mistakes.

Yes, it’s OK that you made mistakes, as long as you learned lessons from them.

“I worked for a great CPA right out of college for five years to learn all I needed to know to run a business,” Signorelli said. “I still made mistakes in the first few years, but the foundation had been set and above all else, it was not an option for it not to succeed. It was my life, and whatever you are taking on must be your dream that you will move heaven and earth to make happen.”

Let’s Learn About SWOT Analysis Tools for Small Businesses

Conducting a SWOT analysis means listing your company’s strengths, weaknesses, opportunities and threats. It is used to evaluate your current market environment and how it may change for better or worse, and then develop a response strategy.

Strengths and weaknesses are for internal factors such as location, patents held and reputation. Opportunities and threats look outside the company for things like competitors, market changes and supplier impacts. When you evaluate those four things against one another, you can see where potential problems lie as well as market gaps that you can position your company to fill.

If you have never done a SWOT analysis, you might not know where to begin. Here are eight tools, software and apps to help you get started.

MindTools
Looking for a free SWOT analysis? MindTools offers a free SWOT analysis PDF worksheet that you can download, fill out and save on your computer. Each section contains sample questions to help you with the process, such as “What do you do well?” for strengths, “What could you improve?” for weaknesses, “What trends could you take advantage of?” for opportunities and “What is your competition doing?” for threats. MindTools also offers a complete how-to guide that covers what a SWOT analysis is all about and how to create the best one for your business. Similar resources include the TOWS Matrix — an alternative to a SWOT analysis — and tools that help with strategizing, problem solving and decision making.

Creately
The term “SWOT analysis” may sound boring, but yours doesn’t have to be. Creately, a Web-based SWOT analysis software, lets you create colorful SWOT analysis diagrams that you can fill with content, logos and other personalized elements. The software is also jam-packed with features like premade, professional SWOT analysis templates; Google Images integration; the ability to import your own images; and collaboration capabilities for feedback and contributions from members of your team. Creately also provides sample SWOT analyses from other companies, along with a database of tutorials and diagrams, to give you an idea of how to begin. To start using Creately, just click on the Start Drawing Now button to launch the no-install software right on your browser.

Gliffy
Gliffy operates on an HTML 5 editor that is more than two times faster than Flash, making large diagrams quick and easy to create. You can set themes and colors, protect and track changes, and share or publish easily with a read-only URL that you can embed in social media. Gliffy also offers Google Drive Integration so that you can access them on any device, making collaboration and review processes a snap. It also allow Visio imports, allowing you to upgrade your sharing methods while retaining and repurposing all of your old diagrams.

Cost: Starts at $5 per month per user for basic functionality. Access to full features starts at $10 a month per user with Gliffy’s Business pricing plan.

Grapholite
Don’t have an iOS device? Check out Grapholite, which lets you create, edit and save SWOT analysis diagrams on an Android or Windows 10 device (Windows 8 users need to contact the company directly for a link). Although Grapholite is essentially a flow-charting tool — you can create everything from Venn diagrams to organization charts and mind maps — its SWOT capabilities are more than enough for any small business. This full-featured app offers drawing tools, drag-and-drop shapes and elements, online and offline modes, and the ability to export SWOT diagrams into common image and document formats.

SmartDraw
SmartDraw is all about speed. This software claims to let you create a SWOT analysis in minutes. First, choose a template. Then, add action buttons, shapes and other content, all within the Microsoft Office suite. The software will automatically align elements, providing a foolproof way to create professional-looking SWOT analyses. Although SmartDraw aims to help you create a SWOT analysis as quickly as possible, it also offers all types of SWOT examples to review before you get started and use as guidance for your business. In addition to basic SWOT diagrams, other examples include different types of SWOT diagrams, such as angled, pie chart and tabbed; different kinds of SWOT analysis, like Key SWOT Questions, Market Analysis SWOT and Product Marketing SWOT; and SWOT for different types of businesses, ranging from coffee shops to car manufacturers and everything in between.

SWOT Analysis Generator
Don’t know where to start? Creating a SWOT analysis doesn’t get any easier than WikiWealth’s free SWOT Analysis Generator. Each section in the generator is prefilled with a list of possible strengths, weaknesses, opportunities and threats to help you get started, and you can also enter your own ideas that aren’t on the list. Just enter your product or company name, and start checking off statements that apply to your business. When you’re finished, simply click on the Create SWOT Analysis button, and the generator will automatically build your SWOT framework and take you to your SWOT analysis. Besides helping you build a SWOT analysis, what makes WikiWealth’s Free SWOT Analysis Generator especially valuable is that it helps you gain a deeper understanding of each section and your business. Once your SWOT analysis is created, you can view explanations and definitions of each SWOT statement, as well as add comments to better evaluate each section. You and members of your team can also up-vote or down-vote items to better prioritize them and make wiser business decisions.

SWOT Map
Create a SWOT analysis right on your iPhone or iPad. SWOT Map is an iOS SWOT analysis app that can help you tell a story, inspire and send a message with your SWOT analysis. First, the app offers more than 100 customizable SWOT analysis templates to help you find the perfect fit for your business or product. It also features a robust SWOT Editor to help you create and modify SWOT ideas, content and templates. And if you don’t feel like using the editor, SWOT Map lets you use your iPhone or iPad camera to take a snapshot of a handwritten SWOT analysis and then use the rest of the app’s functions. SWOT Map stands out because of its collaboration and social-sharing capabilities. You can not only email SWOT analysis diagrams to your team and colleagues but also post them on Facebook and Twitter, as well as save them as images to your Camera Roll.

How To Know If Your Business Has Been Worth

What’s Your Business Worth? How to Find Out
Credit: Melpomene/Shutterstock
For some small business owners, the long-term plan is to build their company up and sell it when the value is at its highest. But according to market research from IBIS World, only two percent of businesses in the U.S. value themselves annually. Banking on a final payday when you’re ready to sell is no safe strategy unless you know for sure what your company is worth.

“Nearly 40 percent of active businesses [in the U.S.] will sell in the next 10 years,” said Mike Carter, CEO of BizEquity. “The haunting statistic is that 78 percent of the business owners who sell think they’re going to fund 80 to 100 percent of their retirement needs from the sale of the business. But if only two percent really know what they’re worth that’s a huge problem, not just for the owners but also for the economy.”

The reason so many business owners don’t know their company’s worth is they don’t add their expenses back into the total value, Carter said. He recommended utilizing the “Seller’s Discretionary Earnings” methodology in order to obtain a truly accurate picture of a privately held company’s value.

Seller’s Discretionary Earnings (SDE) is a measure of a business’s net profits with certain expenses added back. These expenses are generally ones that benefit the business owner, such as the owner’s salary, insurance premiums, and larger one-time expenditures. Knowing your SDE and total revenue is crucial to gaining an accurate valuation of your company.

In addition to being aware of your SDE and revenue, Carter recommended following these steps to determine your business’s value:

Research your industry. Utilize free search tools to find the North American Industry Classification System (NAICS) and Standard Industrial Classification (SIC) codes for your specific business. This will help you compare your value to other businesses in your sector.

Think about your growth rate. Long-term growth rate can factor into your business’s value, and could account for why your company is actually worth more than what the market says.

Don’t only use the buyer’s valuation. When you’re ready to sell, a buyer may make an offer based on his or her valuation of your business. Before completing the sale, be sure to get another third-party value assessment to ensure you’re not underselling your company.
If you’re planning on funding your retirement with the sale of your business, it’s important to begin evaluating your company’s worth now. Putting it off until shortly before you’re ready to call it quits is a recipe for disaster, Carter said.

“If you wait until right before you retire [to value your business] it’s like planning for retirement the month before you actually retire,” Carter said. “You wouldn’t do that, I wouldn’t do that, and yet millions of business owners are doing that every day.”

The Benefits Of Open Communication For Female Leaders

unduhan-69For women who feel outnumbered by the men on their teams, transparent communication can help break down gendered perceptions and open the door to leadership opportunities within the group, finds new research.

A study recently published in The Leadership Quarterly journal discovered that in work groups that are composed primarily of men, women tend to take on more leadership roles as the group becomes more social.

For the study, researchers assigned nearly 1,000 participants of varying ages to small groups and had them rate which group members emerged as leaders after performing a series of tasks. They replicated the experiment with both short- and long-term groups to verify the results.

The study’s authors found that the more extroverted the teams were in terms of talking to each other and asking for help with their projects, the more likely it was for women to be seen as leaders.

The study’s authors believe the open collaboration allows group members to get to know each other better and see each other’s strengths and weaknesses. This in turn helps eliminate the preconceived gender stereotypes that are typically found in the workplace, said Jim Lemoine, the study’s lead author and an assistant professor at the University of Buffalo.

“When we first meet people, we tend to categorize them subconsciously based on snap judgments and observations,” Lemoine said in a statement. “But the more we get to know people, the less those preconceived ideas matter.”

Lemoine also noted that when work teams value communication and increase their interactions with one another, women may have a leadership advantage, since groups choose leaders based on who best exemplifies their shared values.

The study’s results have important implications for businesses looking to develop more women leaders. Lemoine said instead of having teams that are isolated and driven by goals, businesses wanting more women to take charge need to develop a culture where they are more opportunities for employees to get to know each other and collaborate on projects.

“When teams foster a culture of open communication and teamwork, it allows new leaders to step forward and diverse perspectives to be heard,” he said.

The study was co-authored by Ishani Aggarwal, assistant professor in the Brazilian School of Public and Business Administration in Rio de Janeiro, and Laurens Bujold Steed, a doctoral candidate at the Georgia Institute of Technology.

Let’s Learn About How Senior Executives Find Time to Be Creative

The number-one attribute CEOs look for in their incoming workforce (according to an IBM survey of more than 1,500 CEOs across 33 industries and 60 countries) is not discipline, integrity, intelligence, or emotional intelligence. It’s creativity.

After all, every company wants to be at the forefront of its industry and on the cutting edge of innovation. And for that, you need highly creative employees.

While much of the advice on becoming more creative is known, what’s harder to figure out is how busy executives actually find time to put it into practice. To find out, I spoke to some of the most innovative leaders across key industries, from technology to consulting to manufacturing. Here’s what they said.

Seek out unfamiliarity. Research shows that we are at our most creative when we are in an unfamiliar environment. One study showed that spending a few days out in nature disconnected from all devices — an unfamiliar and unusual experience for most people — led to a 50% increase in creativity.

But if you don’t have several days to retreat to the woods, how do you make time for new experiences? Terykson Fernando, former Creative Director at Hubbl (which sold to Airpush for $10 million) and now Creative Director at Sattva, tries to integrate observation into everyday activities. “The entire universe is filled with ideas and has in it what I am trying to create, so I take clues from everyday life by observing every little thing and being inquisitive about the how, why, what of things around me.”

If that’s not quite enough of a push, Lars Bastholm, global CCO at Google, offers a tip: “I used to tell creatives who were stuck on a brief to go to the magazine store and buy three magazines that they’d never in a million years buy. Like Orthodontist Monthly, The World of Monster Trucking, that sort of thing. Then I’d suggest they read them cover to cover and try to reframe the brief they were trying to crack with the target audience of those magazines in mind. Usually it would not only be super fun, but it would also open up new avenues of thought that could then be applied to the original brief.”

Simon Mulcahy, interim CMO at Salesforce, recommends an exercise he calls “flipping the binoculars around.” For example, if you’re a bank branch trying to increase customer loyalty, look at a company in a completely different industry, like Starbucks, and ask how it keeps customers coming back.

Get feedback from diverse sources. While not every study agrees, there is a good amount of research showing that diverse groups are more creative. The leaders I talked to not only made an effort to bring together people from different backgrounds and perspectives but also took the time to talk to people outside their industry about their ideas.

Rufus Griscom, serial entrepreneur and CEO and founder of Heleo, puts it this way: “Ideas are like people — they don’t like to be isolated or treated jealously. They like to mingle, interact with other ideas.”

“Like most young entrepreneurs, I used to be worried that if I shared a new business idea too broadly, someone else would run with it, and I would lose the opportunity,” he told me. “Now, when I have a promising business idea, I literally share it with every smart person I encounter who has any interest in it. This results in introductions and new information, and it increases the likelihood that the idea will one day turn into a business.”

Phil Harris, SVP and Chief Strategy Officer at Riverbed, adds an important reminder. Inside an organization, really listening to this feedback is just as important as soliciting it: “When we are in a room, there are no titles, grades, seniority. All voices have equal weight and all have equal time. Everyone knows they are listened to, and their contribution is always given time. Everyone is in a relationship that is based on trust and honesty, and not always the easy kind of honesty.”

Give yourself space. Creativity requires space. This may explain why meditation has been shown to increase creativity as well. “I meditate so that I can let go of existing thoughts and patterns in my mind and make space for new ones,” Fernando told me. “To me, creativity is all about letting things well up from within.”
While many executives do meditate, I understand that lots of business people feel like they just can’t take the time. If this applies to you, there are other ways of capturing the benefits of mind wandering.

Taking walks has also been shown to increase creativity, because walking frees your mind up to daydream — which, it turns out, is our brain in active problem-solving mode. As Peter Sims, CEO and founder of Parliament, Inc., put it, “If you want people to be inventive, they need space. Steve Jobs took lots of walks. I see Mark Zuckerberg taking walks on the roof of Facebook’s new HQ.”

Google’s Bastholm recommends any physical, relatively mundane activity: “Vacuum the house. Get on an elliptical at the gym. Paint a fence. Anything that will allow your brain to work in the background.”

Griscom concurs. “If I am working through something, I like to engage in low-intensity activities — walking, bicycling, driving, doing the dishes. I think because I am accomplishing something, however trivial (dishes are getting cleaner! blocks are being walked!), while ruminating on a given subject, it takes the pressure off the thought process and enables me to free-associate.”

Embrace constraints. You might wonder whether the need for “space” and the need for “constraints” goes hand in hand. After all, those seem like very different ideas. Yet research shows that creativity activates both a part of the brain that is associated with daydreaming and a part of the brain associated with “administrative control.” After all, success takes the ability for free-flowing insight combined with the ability to turn that insight into a thoughtful product.

The constraints should be part of the work itself, not arbitrary limitations. As Mulcahy says, “You don’t just say ‘take that hill,’ you say ‘Take that hill in order to do something else,’ so that if the situation changes, your soldiers know they no longer need to take the hill.”

For example, the Nike Flyknit shoe is designed to combine sustainability goals with athletic performance. Hannah Jones, Chief Sustainability Officer and VP of the Innovation Accelerator at Nike, Inc., describes how they set out the project’s constraints: “We set a guiding principle called Zero Compromise. We’re going to make a great product that is beautiful and sustainable….We gave the team irritating constraints — you have to do double business in half the impact. These are unusual bedfellows, and you’re going to clash these two together. Those constraints drive a creative tension that forces a different conversation.” The company considers the project successful: According to Jones, the Nike Flyknit delivers on athletic performance while producing 60% less waste than traditional cut-and-sew methods.

If you want to be more creative yourself, or to foster more creativity on your team, the data and expert advice is clear, and putting it into practice may not be as time-consuming as it first appears. Step out of your comfort zone, give yourself room to think, learn about things beyond your niche, and identify useful constraints — all in the course of a normal workday.

Why You Should More Energize Your Coworkers

How much energy do you have at work? Do you feel invigorated and engaged or down and disengaged? Either way, the reason might be your coworkers: They are infecting you with their energy, positive or negative.

We “catch” energy through our interactions with people – something called “relational energy”— and it affects our performance at work. This is what my colleagues Bradley Owens, Dana Sumpter, Kim Cameron, and I learned in an article we published earlier this year. We were motivated to do this research because energy is a vital personal and organizational resource, but research on the sources of energy have neglected a source that everyone experiences in everyday life — our relationships with others. In a series of four empirical studies, we sought to establish relational energy as a valid scientific construct and evaluate its impact on employee engagement and job performance.

To understand how this works, think of people in your workplace who buoy you up, who lift your spirits. What do they do? What do they say? Some people are energizing because they give off positive vibes. As an employee in a large company told us about his boss, “She energized me because she loved her job and was in general a very happy person. She always came in with a smile on her face which created a positive atmosphere.” Others energize us because they create genuine connections. In conversations, for example, they devote their full attention and listen carefully.

If you have an energizing boss, chances are that you feel engaged at work. Focusing on relational energy between leaders and members of a large health care organization, we found that the experience of relational energy with a leader increases one’s motivation at work, attention to tasks, and absorption in work activities. This translates into higher work performance. Members of this health care company who experienced relational energy with their leaders were more engaged at work, which then led to higher productivity.

Interactions are energizing in several ways, as Rob Cross, Andrew Parker, and I learned in a series of studies of energy in organizations. They include instances when we create a positive vision, when we contribute meaningfully to a conversation, when people are fully present and attentive, and when we have an interaction that gives us a sense of progress and hope.

You are a source of relational energy as well as a recipient. When you generate relational energy in the workplace, your performance goes up. Rob Cross and I discovered this in research we did on energy mapping, using organizational network analysis to reveal the network of energy in the workplace. The more people you energize, the higher your work performance. This occurs because people want to be around you. You attract talent, and people are more likely to devote their discretionary time to your projects. They’ll offer new ideas, information, and opportunities to you first.

The opposite is also true. If you de-energize others, people won’t go out of their way to work with you or to help you. In the worst case, they might even sabotage you at work.

What can you do to increase relational energy in your workplace? Here are four actions you can take personally and as a leader.

Build High-Quality Connections. By definition, high-quality connections generate relational energy. Jane Dutton and Emily Heaphy suggest several ways you can grow and improve high-quality connections, such as taking on a challenge at work with a group of like-minded people. In one case, two operational leaders at Kelly Services, a workforce solutions firm, created a Business Resource Group to promote leadership development and increase employee engagement. As Dutton and Heaphy describe, the leaders focused on building high-quality connections and strengthening social capital as ways to improve the leadership pipeline.

Create Energizing Events. Organize and run events with an explicit focus creating energy, not just delivering content, products, or services. Consider how Zingerman’s, a renowned community of food-related businesses in Ann Arbor, Michigan, infuses energy in their seminars and events. I often bring groups of executives to their restaurant, the Roadhouse. After dinner, CEO and co-founder Ari Weinzweig or one his managing partners will present on a particular topic, such as visioning, open book management, or the natural laws of business. The content and delivery are fantastic and energizing themselves. But energy goes up another level when a panel of frontline staff come into the room and field questions. They can answer any question, but what matters even more is the energy they exude. They are positive, enthusiastic, and clearly love their work and the organization. The executives leave the event abuzz with energy because it’s so contagious.

Use Tools that Promote a “Giver” Culture. The act of helping someone at work creates energy in the form of positive emotions — the “warm glow” of helping. Receiving help creates energy in the form of gratitude. Gratitude for help received encourages paying it forward and helping others, as Nat Bulkley and I documented in a large-scale study. The Reciprocity Ring, a group-level exercise involving giving and getting help that my spouse Cheryl Baker, CEO of Humax, created, elevates giver behaviors — and energy. In a pilot study Adam Grant and I conducted, we found that participation in the Reciprocity Ring increases positive emotions and decreases negative emotions.

Try Mapping Relational Energy. Organizational network surveys map the invisible network behind the organizational chart—the real way people interact. Some years ago, Rob Cross and I started adding an energy question to the usual set of network questions we asked in our organizational research and consulting. Presenting each respondent with a list of names of others in the organization, we asked, “When you interact with each person, how does it affect your energy?” Responses could range from “very energizing” to “neutral” to “very de-energizing”. The resulting data enabled us to draw relational energy maps of an organization. The results are quite revealing. In a large petro-chemical company, for example, we found a lot of de-energizing relationships — and most of them emanated from the leaders. With this objective map, they could identify where they needed to make positive improvements. Energy maps help you target where to focus on building high-quality connections, creating energizing events, and using tools that create an energizing giver culture.

So if you feel like you have an energy crisis in your organization, the good news is that you can do something about it by focusing on relational energy — the energy we get and give in our daily interactions. Every action and word, no matter how small, matters in boosting productivity and performance.

Some Tips To Quit From Your Job

Every day, employees resign from jobs. In the United States and Western Europe, annual resignation rates hover at just below ten percent, with much higher rates found in parts of Asia. Those currently entering the workforce are expected to engage in even more job hopping than prior generations, suggesting that employers may want to move beyond the simple notice policy in the company handbook and learn to encourage employees to resign in constructive ways.

Despite the prevalence of resignations in today’s workplace, researchers know little about how employees tend to go about quitting their jobs, and what causes workers to depart in ways that are more destructive or constructive for organizational functioning. Understanding what drives resignation behavior is particularly important for companies, given recent examples of employees using high profile forums to announce their resignation and tarnish their former employer’s reputation (e.g., Greg Smith’s resignation from Goldman Sachs that was published in the New York Times, and Marina Shifrin’s video resignation from her animation company that went viral). Employees themselves are often confused about the right way to resign, too, as evidenced by the abundance of websites offering tips and advice for employees who want to know how to quit their jobs.

To better understand the different ways that employees resign and why employees may resign in more constructive or destructive ways, we collected and examined the accounts of nearly 300 recently resigned employees, and over 200 managers of employees who had recently resigned.

We found that employees use one of seven different resignation styles when they quit. The two most common resignation styles were what we called “by the book” and “perfunctory” resignations. By the book resignations involve a face-to-face meeting with one’s manager to announce the resignation, a standard notice period, and an explanation of the reason for quitting. Perfunctory resignations are similar to by the book resignations, except the meeting tends to be shorter and the reason for quitting is not provided. Although not as frequent, many employees resigned using a grateful goodbye approach, in which they expressed gratitude toward their employer and often offered to help with the transition period. In the loop resignations were also fairly common, and these are typified by employees confiding in their manager that they are contemplating resigning, or are looking for another job, before formally resigning.

On the darker side of the resignation spectrum, some employees choose to resign in an avoidant manner, or by bridge burning. Avoidant resignations occur when employees let other employees (e.g., peers, mentors, or HR representatives) know that they plan to leave rather than giving notice to their immediate boss. Perhaps the most notorious way to quit, about one in ten employees seeks to harm the organization or its members on their way out the door, often through verbal assaults, thereby burning any potential bridges between themselves and their former employer.

The final, and rarest, resignation style is arguably not a resignation at all. That is, some employees simply walk off the job, never to return or communicate with their employer again. This impulsive quitting can leave the organization in quite a lurch, given it is the only style in which no notice is provided.

Beyond identifying the different ways in which employees quit, we wanted to understand why employees chose one resignation style over another. What we found is that employees often view their resignation as the final chance to get even with their organization and their manager, for better and worse. Indeed, the two factors that were most predictive of resignation styles involved whether or not employees felt they were treated fairly by their organization, and the extent to which they felt their direct supervisor acted in an abusive manner toward them. Employees who felt that they had been treated well by their organization or their boss were more likely to go the extra mile when they quit. But when they perceived that they had been treated unfairly or abused by their supervisor, they tried to get even by resigning in a more harmful way.

In short, how well you take care of your employees does not just predict whether or not they will voluntarily quit their job, but it also determines how they will go about leaving. Not surprisingly, we also found that while most voluntary turnover tends to be unpleasant for managers, they are particularly frustrated and angry when employees leave in a perfunctory, avoidant, or bridge burning manner. So employees who want to leave on good terms should steer clear of these strategies.

There is also another lesson for organizational leaders and HR personnel to be gleaned from our findings. When a company experiences a rash of ugly resignations, rather than blaming those harmful departures on employees’ character, organizations should instead consider the possibility that their employees feel mistreated and explore whether the managers involved need to learn to supervise employees more adeptly.