Any entrepreneur worth his or her salt wants their business to grow. It goes without saying. And for all sorts of reasons: it gives you a sense of progress and purpose; it throws up lots of new challenges; it helps you attract and retain better people; and – let's be honest here – it puts money in the bank and makes people sit up and take notice. The way I see it: if you start a business, you have to want to make it big, a business that people know and respect. Or you're not really an entrepreneur - you're just doing it as a lifestyle choice.
 
On the other hand, growth is also a major hassle. It really is. Half the time you don't entirely know what you're doing. It's incredibly difficult to plan resources in advance - you've usually either got too few people or too many people, too much space or too little space. Job specs are changing all the time, so you end up with people who outlive their usefulness (or turn out not to have any). You suddenly find that you don't know some of the people that work for you, or that you don't actually like them much. And as all this happens, it's very easy for the wheels to fall off.
 
For us, the tipping point came somewhere around the time we hired our 20th member of staff. It wasn't him personally, you understand (even if he did have a dubious predilection for red jeans). It was just a size thing: one day we were a team of people who all worked together, argued together and went out together afterwards - and then almost overnight it all seemed to change. Office politics suddenly reared its ugly head. People started retreating into little cliques. For someone as nosy as me, it was incredibly aggravating to realise suddenly that I wasn't fully acquainted with everyone else's business. Suddenly, our office wasn't such a nice place to work - and not surprisingly, results started to suffer.

The answer, believe it or not, turned out to be simple: values. Now I promise you: I'm about as sceptical about this kind of gung-ho corporate nonsense as it's humanly possible to be. In the past I used to have to stifle my gag reflex when I heard people banging on about missions and visions and unique DNA. I always thought values were the kind of thing marketing departments dreamt up to make themselves feel important, used by CEOs to persuade themselves that they weren’t really identical to all their rivals. But one of my advisers was a big fan of the idea, so eventually I decided to give it a go.
 
It was a painful process – to start with, everyone clearly thought it was a stupid idea (including me). But eventually, after several hours of arguing (during which I had to persuade one enthusiastic soul that 'win at all costs' wasn't really suitable for this kind of thing), we managed to come up with five qualities that we wanted the company to have. And these five values have been the cornerstone of the business ever since – they're on the walls, they're in all our presentations, we talk about them on a weekly basis. I've even stopped feeling embarrassed about the idea now - in fact, I'd say it's the cheesiest thing I've ever come to embrace passionately (well, in a business sense, anyway).
 
The idea is that these five values not only keep the current lot on the same page, but also explain to new people what we're all about. When you've got 10 people, they can work this out quickly enough for themselves - with 20, they might need a little help. It works for us, so presumably it will work for others too. And at the very least it should make your marketing person feel important.

Previous Secret Diary entries:
25.07.08: About Me
01.08.08: Bad debts
08.08.08: Partnership troubles
15.07.08: Dealing with difficult people
22.07.08: HR Therapy

Once upon a time I had an HR manager who just got it. Somehow she always managed to get the balance right: she just seemed to know instinctively how to deal with difficult people, and how to steer the course that was right for the business and right for the employee.

Ok, so I'm lying. In fact, I've never even met an HR person like this. And to be honest, I'm starting to think that I've got more chance of catching the Loch Ness Monster than I have of ever finding one.

It's not that we find it hard to attract great candidates: everyone we interview seems to be likeable, enthusiastic and impeccably qualified. And that doesn't really surprise me - if you're the kind of person who likes the idea of HR, working in a small company like ours must be pretty appealing. You get more variety and less admin than you would in a big company; nobody will really know if you're terrible at it, and you still get to do all the warm and fuzzy stuff.

The problem is that they always turn out to be awful. They never seem to get that it’s not their job to be everyone's friend – it’s to take decisions that are in the best interests of my business, even if that conflicts with the finer feelings of an individual employee. So usually, we end up falling out.

I've got a theory about this. Entrepreneurs tend to be evangelists about their business - and the best ones inspire other people to think the same way. Bringing people with you comes naturally to a good entrepreneur, so they’re usually a bit sceptical about the kind of formal processes that HR people are so keen on. Plus of course entrepreneurs and HR types tend to be polar opposites when it comes to risk.

And I suppose that’s really the problem: I just don’t really get HR people (people hassles are the most tedious part of the job – who chooses to do it full-time?) and they never really get me. So we tend to drive each other round the bend. Take my present one: nicest girl you’ll ever meet – patient, kind-hearted, generous to a fault, always willing to see the good in people (all the things I'm not, basically) – but mad as a bucket of a frogs, and a total drama queen.

I’ll never forget the day she set me into a panic by demanding an urgent meeting (‘urgent’ in red and underlined), only to inform me that one of the salespeople had told her in the pub the previous night that he didn’t think he got paid enough. I nearly choked on my frappucino. There was I with my finger on the speed-dial to my lawyer, imagining all kinds of nightmare scenarios, and she’s getting in a flap about something that as business priorities go, was significantly below buying new toilet roll for the girls’ loo.

I’m sure there are great HR people out there – commercially-minded, pragmatic, level-headed – it’s just that they seem to keep their distance from me. Maybe that ought to tell me something...

Previous Secret Diary entries:
25.07.08: About Me
01.08.08: Bad debts
08.08.08: Partnership troubles
15.07.08: Dealing with difficult people

A couple of you have written to ask how I deal with difficult staff. Well, it's a huge topic - and if I had the definitive answer I'd be a very rich woman now, as opposed to a slightly frazzled entrepreneur! But here are a few thoughts.

To be honest, I still think the best way of dealing with difficult people is not to hire them in the first place. That probably sounds a bit glib - but I genuinely believe that if people are going to be a complete pain in the proverbial, you ought to be able to spot it at the interview stage. Very few people can act their way through an entire recruitment process (unless it's rubbish).
 
I think I'm actually a pretty good recruiter. For me, three of the most important skills for a good entrepreneur are a) knowing what you're not good at; b) identifying that ability in someone else; and c) persuading them to use it to your benefit. So you have to be great at recruitment. Although part of it is just practice, of course: these days I've developed a kind of sixth sense, so if I'm interviewing someone and I have a bad feeling about them, I'll usually just invent some spurious reason why they're not suitable for the job and send them packing (don't tell my lawyers that though).

But however good you are, and however careful you are, you can't avoid difficult people altogether. Sometimes people just change after you hire them - I had one guy who went to pieces after his girlfriend dumped him and became a complete waste of space (I did try, honestly, but eventually he had to go). I've also had girls come back after having a baby who discover almost immediately that all their motivation to work has disappeared (fair enough, but I've got a business to run).

And then there's the most difficult category: the people you hire even when you know they'll be difficult. I interviewed a new sales girl a few years ago and realised two things very quickly: one, she was exactly what the business was lacking; and two; she'd drive me up the wall within six weeks. Actually, it was more like a fortnight. But I was right on the first count too: she really drove the business forward in the 18 months she was there (after which she inevitably jumped ship, to a job she hated that paid a bit more - idiot).

So what do you do about it? Well as I see it there are two options. If you can manage without them, it's easy: get rid of them as fast as you can. Difficult people make everyone's lives miserable, so the gains you get from everyone else will make up for anything you lose from their input.

If they're indispensable, it's more difficult. But there's no point just trying to grin and bear it. You have to try and smooth off their rough edges, and that means giving them the right kind of incentive to change. If all they care about is money, make it part of their bonus. If they want promotion, feed it into their development review. You have to try and work out what makes them tick, and then press the right buttons.

And if that doesn't work, get rid of them anyway. Life’s too short.

Previous Secret Diary entries:
25.07.08: About Me
01.08.08: Bad debts
08.08.08: Partnership troubles

Not because I wanted a second opinion or anything, you understand (there's only room for one ego in this company). It's just that I had to go and spend the afternoon with our accountant, and the thought of it made me want to stick pins in my eyes. To me, the best thing about having a partner is that you only have to do half as much of all the stuff you hate doing most.
 
Generally though, I'm pretty happy flying solo. I like the idea of having someone who can genuinely empathise about your day-to-day troubles - i.e. someone who you can bitch about your staff to with a totally clear conscience - but aside from that, it strikes me that partners do more harm than good. I know there are some people who make it work, of course - a friend of mine has been in partnership with someone for eight years now, and apart from the odd minor squabble in the early days, they never seem to fall out at all. And those nice boys at Innocent seem to do OK too (although for all I know they might secretly hate each other by now). But I think these are the exceptions, not the rule.
 
The way I see it, the main problem is division of labour. Workload is one part of it - it's very rare that both of you get through an equal amount of work, and that often ends in resentment. And even if you do, how do you go about splitting the different functions of the top job? You can't have one leader and one manager; one who does all the visible stuff and one who does all the unseen stuff; one who's good cop and one who's bad cop - it just confuses everyone. And just because one's good at sales and one's good at spreadsheets, it's not fair that one always does the fun stuff and the other always has to deal with the bloody accountant.
 
As you may have guessed, I'm speaking from bitter experience here. I started my business in partnership with a male friend of mine (technically an ex-boyfriend, way back when). In fact if it wasn't for him I might not have taken the plunge - he was incredibly enthusiastic, a great sales person and generally a very positive influence to have around. Unfortunately he was also a bit annoying in large doses - which is why I dumped him in the first place - and after a year, we were driving each other round the bend. When he eventually started losing interest (as he always did once the novelty had worn off) I knew I had to get rid. But it was complicated - he didn't want to give up his equity, and I was far too skint to buy him out. I'd also done something very stupid - I'd left him to manage our big client relationships, while I looked after the operational stuff. So there was a good chance that if he went, the business might disappear with him.
 
Fortunately I'd spent the entire year assiduously wooing my bank manager (in retrospect, the smartest thing I ever did) and managed to persuade him that it was worth backing me to buy this guy out - though I did leave him with a small stake (no voting rights) in exchange for a promise that he wouldn't interfere or set up in competition. Of course now that I'm accumulating his retirement fund while he sits around in his pants playing Playstation, that doesn't seem like such a good deal - but it did at the time. I then spent three months taking every one of our clients out to lunch and teaching myself to be a salesperson; thankfully, not one of them left (though I suspect that was more to do with the product than my sales skills).
 
Three years on, I've not regretted it once. This way there's no excuses: if you get it wrong, you can't blame anyone but yourself. And not having a partner saves me the hassle of having to persuade them that I'm right every time there's a decision to be made. That's worth an afternoon with an accountant any day.

PS. Let me know your thoughts below or via secretdiary@managementtoday.com - and thanks to all of you for your kind messages so far! I’ll definitely be picking up on some of your issues in the coming weeks.

Previous Secret Diary entries:
25.07.08: About Me
01.08.08: Bad debts

To me, it's the ultimate insult, and I've tried to make sure that everyone I hire thinks about it the same way. After all, when you're starting off, it only takes one bad debt to push you over the edge (one friend of mine was running a profitable business that went bust purely because his biggest supplier didn't pay him for six months). OK, so I don't expect everyone to pay up in 30 days just because their contract says they will (I know I don't). But I can't be doing with people who promise to pay and then go back on their word.

So I read the piece in last week’s bulletin about legal options with interest - because for the first time in a while, we had a debt that looked like it was going bad. Generally speaking, we've found that the easiest way to avoid dodgy debtors is to be extra careful about who you do business with (I know this is easier said than done when you're starting out, but still). We only do deals when we're confident that the client can pay, and we know exactly what needs to happen before the cheque gets signed (PO numbers, that kind of thing). And in this case everything seemed fine: their reputation was fine; the project was interesting; I'd even met the CEO (and liked him).

After 30 days they still hadn't paid, so we did what we always do: gave them a gentle kick up the behind. By the time it got to 60 days, the warning signs had started to appear: we could never get through to the accounts people, and when we did, it always seemed to be a brand new person (which, let's face it, never bodes well). 

Now I'm firmly of the opinion that if a company is struggling, the important thing is to elbow your way to the front of the queue of creditors. The one who shouts loudest will often get paid first. So we ramped it up: we leaned on our original contact; we offered them a payment plan to spread out the costs; we even managed to get hold of the CEO's mobile number via the switchboard, and pestered him direct. They kept promising to pay, but the cheque never materialised.

So this week I decided to take matters into my own hands: I went round to their office in person and demanded to see the CEO. When they told me he was out, I took my laptop out and told them I'd wait, demanding (as loudly as possible, in front of everyone in reception) to know whether they were having money problems. Not surprisingly, the CEO soon appeared – and 30 minutes later, I walked out with a cheque for the full amount (and went straight to the bank to cash it). 

I suppose this might seem a bit overly-aggressive. And I do have some sympathy for their plight (there but the grace of God, and so on). But that’s my money – if they’ve promised to pay it, then they’re going to pay it. Even if it means I have to start door-stepping people...