From the January 1997 issue of Entrepreneur

Using independent contractors to outsource specific tasks can be a smart business move. But most independent contractors won't have the same degree of loyalty your employees do. Fortunately, there are things you can do to make them feel like part of the company--and strengthening their commitment will likely improve their performance.

Gary Clinton, president of United Design Corp., a Noble, Oklahoma, company that designs and makes giftware figurines, says the key is in effective communication. He suggests sending regular memos or holding in-person meetings with independent contractors to let them know what's going on in the company and the importance of their role in the process. You may also want to provide training to help them do their jobs better and include them in company social events.

Clinton stresses one important point: Always respect the line between employee and independent contractor. "Independent contractors must be truly independent," Clinton says. If you treat them too much like employees, the IRS may conclude that they are employees, which opens you to a wide range of potential liabilities.

Bouncing Back

When something bad happens in your industry, but not to your company, your first response may be relief. But don't spend too long thanking your lucky stars; you're still likely to face some negative fallout. For example, when a plane crashes, all airlines have to reassure the public.

You can approach a problem nationally, locally or as an individual, says Raleigh Pinskey, president of The Raleigh Group, a marketing and public relations company in Santa Monica, California. If you have a national or local association, look to it for guidance and an action plan. Your professional organization is another resource, or you may also handle the situation on your own. In any case, Pinskey suggests taking an educational approach.

Offer tips to help people avoid a repeat of whatever happened and to re-establish trust. If people have suffered, express sympathy and offer support, such as holding a fund-raiser for victims.

The key: Act quickly, using a tasteful strategy that puts your company in a positive light. "The longer you wait, the less trust there is," says Pinskey. "The less trust, the less loyalty--and you'll [then] lose customers. When the public is educated, trust increases and healing is possible."

Space Value

If you're in the market for new office space, take some advice from an expert. Jack Gold, president of Sterling Management LLC, a New York City relocation consulting firm, suggests some tips:


*Determine how much space you need. Don't guess or estimate; mistakes in this area can be extremely expensive.


*Establish a budget both for the space (your rent) and for your moving and other relocation expenses.


*When considering a facility, find out what the rentable space is vs. the usable space. The rentable space is what you'll pay for; the usable space is the functional room you'll have. Typically, you'll pay rent for space you can't really use, including hallways, restrooms, lobbies, elevator shafts and stairwells.


*Find out about the building's power supply. Older buildings may not have adequate electrical power to operate computers, air conditioners and other equipment.


*Ask about building service and access. During what hours are services provided? Many buildings turn off air conditioners and heaters at night. Will you have late-night or weekend access if necessary?

If you're overwhelmed by the relocation process, consider hiring a consultant. An expert will likely make the process go much more smoothly, allowing you to focus on running your company.

Just A Suggestion

Are your employees sharing their ideas for improving your products, services or the overall business? Don't assume that being a small, entrepreneurial company automatically makes you an innovative company, cautions John Gear, a principal with Catalyst Consulting Services in Vancouver, Washington.

"If you want people to give you ideas and help you innovate, you have to ask for those things, and you have to create conditions where people want to give you ideas," Gear says.

Forget about the old suggestion box on the wall. Gear offers these tips for creating an effective suggestion program:


  • Allow suggestions to be submitted by anyone, on any subject, in any medium, at any time. Provide forms to people who want to use them, but don't reject ideas submitted in other ways. "The first step in distancing yourself from ideas is requiring people to package them in a certain way," Gear says.


  • The owner or senior managers should review the suggestions first, before anyone else does. Schedule time at least once a month for this.


  • When you first look at a suggestion, consider the possible results with no regard for feasibility. Ideas that seem to have no positive potential can be rejected without further investment.


  • Ideas with the potential for good results should be studied for feasibility. The person charged with this task should also be prepared to implement the idea and measure the results, or put together a report explaining why the idea isn't feasible.


  • Acknowledge every idea, and keep the contributor informed of its status.


  • Make it clear that you welcome ideas that might not work and that you don't require employees to consider implementation issues before they make suggestions.


  • Reward those who make successful suggestions both financially (a generous share of the resulting savings or increased profits is good, Gear believes) and with verbal recognition.

If you have a specific problem you'd like input on, consider scheduling a problem-solving session that's open to everyone. Gear suggests announcing that you'll be addressing a particular issue at a specific time and place, and anyone who might have input is welcome to attend.

Finally, Gear says, give your suggestion program time to work. "Your people have probably been conditioned all their lives to not make suggestions," he explains, "so it may take a while to see results."

To Tell Tthe Truth

When you have trouble paying your bills, you probably feel your hands are already full dealing with creditors--but don't overlook the need to communicate with your customers.

"If you're having cash problems to the point that it's generating rumors, your customers will find out--and may take their business elsewhere," says Jennifer Magee, CEO of Keating Magee Long Advertising, a New Orleans advertising and public relations firm specializing in crisis management. "In general, people are more sympathetic if you are open and upfront with them."

If you suspect your financial situation is a topic of gossip, act fast. Magee recommends you or a senior manager communicate with each customer's key decision maker--ideally, by visiting in person. If that's impossible, the next best option is a phone call. If you send a letter, realize you lose control over who sees it after it leaves your office, and it could be floating around long after your financial troubles are over.

Whatever method you use, acknowledge your situation, explain that you have a recovery plan in place, and reassure customers they can still do business with you with confidence. Use positive, upbeat language, and, if possible, indicate that your situation was caused by external factors no one could have foreseen. Above all, says Magee, don't lie. If you lose your customer's trust at this critical time, you'll probably lose it forever.

After the crunch, use the same communication outlets to let your customers know. Don't remind them of your problems; focus on your achievements, and thank them for their loyalty.

Stress Strategies

Stressed-out employees can rob your company of productivity. "When people feel their stress load is too heavy," says Paul Allie, a senior researcher who studies office environments for Steelcase Inc. in Grand Rapids, Michigan, "they respond in emotional, behavioral or physiological ways that can be harmful"--to themselves and the company.

Allie offers these tips for reducing workplace stress for your employees:


  • Reduce uncertainty. Employees need to know where they stand--especially if things seem rocky. "Give employees the real facts," Allie says. "Let them know when business is doing well, and don't allow rumors to proliferate if and when business takes a downturn. Even bad news, when given in the right way, helps reduce uncertainty--and that helps reduce stress."


  • Provide regular feedback. Don't limit your comments on performance to an annual evaluation; if you see someone doing a job well, praise him or her. "Employees want to believe they are contributing to the good of the company," Allie says.


  • Consider offering flextime. "Often a change of just 30 minutes or an hour [as to] when people come in to work can make a big difference in how they manage their lives away from work, which is often a big cause of stress," Allie says.


  • Encourage goal-setting. When people see clear, obtainable objectives ahead, they hesitate less and accomplish more.


  • Push decisions down. You'll create a stronger feeling of mutual trust when you allow employees to make decisions. Whenever you can, Allie advises, push decisions as far down the hierarchy as possible.


  • Promote teamwork. Encourage cooperation rather than competition. Allie says employees will be more positive about their environment if they get support from fellow workers.


  • Consider necessary learning curves. When employees need to learn new skills, allow sufficient time for training and practice.

Finally, Allie says, watch for signs that employees are distressed, but don't smother them with undue concern. "If you begin to sense that an employee is overwhelmed, ask them about their workload," he suggests. You may find out the problem is something personal--and a demonstration of understanding and support will help.

"Remember, people have lives outside of work," says Allie, "and though they may not want to discuss those issues, they will still benefit if they feel a sense of camaraderie with management."

Basic Instinct

Some people seem to instinctively do the right thing at the right time. You could call it luck, but Nancy Rosanoff calls it intuition.

"Intuition is an innate ability to tap into [your own personal] reservoir of information and wisdom," says Rosanoff, president of Intuition at Work in Pleasantville, New York. "It's knowing [something] when we don't know how we know it. It's also an ability to make decisions with incomplete information. Inventors, artists and successful entrepreneurs have all learned to trust their gut instincts when making crucial decisions."

Using intuition, Rosanoff says, can help you get to the real issues in any situation--to understand, for example, what the customer is really saying (or not saying) and to figure out the best response. "We're trained to think analytically, but that's only one piece of the pie," she says. "There's a whole realm of intuitive information that is equally valid and needs to be part of the decision-making."

To develop your intuitive skills, do a regular check-in with your feelings. Rosanoff suggests a simple exercise: Before any major decision, pause, take a deep breath, and ask yourself how you really feel about the situation.

Another decision-making aid is to flip a coin. The power, Rosanoff says, is not which side of the coin comes up but how you feel when you see the results. If you feel dread or anxiety, your choice may need rethinking. If you're elated and confident, your intuition is confirming the correctness of the decision.

"Intuition brings what you really feel about a situation to the surface," Rosanoff says. "It gets you right to what you know."

Jacquelyn Lynn is a business writer in Winter Park, Florida.

Contact Sources

The Raleigh Group, (800) 249-7322, (310) 998-0055, GoRaleigh@aol.com;

Sterling Management LLC, (212) 446-9000, fax: (212) 446-9008;

United Design Corp., P.O. Box 1200, Noble, OK 73068, (800) 727-4883, (405) 872-3468.