Over the last several weeks at Northstar Ventures we’ve had to trim our costs and hunker down just like so many other companies. It’s been a gut-wrenching process. We’ve trimmed our staff by 35% and it’s not been fun for anyone…but it’s especially painful for those who end up on that chopping block.

As a CEO, the hardest part about making layoff decisions is trying to set aside emotion and make decisions based on performance and quantifiable value. I’ve found that in times like these, it actually becomes quite apparent who on your team is vital and who can be let go without much negative impact to the business.

Whether you are the decision maker about “who stays and who goes” or if you’re worried about ending up on the chopping block…here are some things to consider:

• Top sales people stay. They keep fuel in the engine.
• Unless paid on 100% commission, mediocre sales people who barely or rarely meet quota must go; now.
• Management team members should only stay if their departure would cause the company to falter substantially. Otherwise, it’s time to say goodbye. One big salary can pay a lot of bills.

• In a season of deep financial concern and widespread layoffs, those who remain should also sacrifice. Trim remaining salaries by at least 5%.
• If you almost fired someone in the past, then they should be near the top of the list when considering layoffs. Unless they’ve made a dramatic improvement, they’re gone.
• Marketing assistants (and assistants in general) are targets. Any worthwhile Marketing Manager (or Managers in general) should be able to absorb the tasks of an assistant until the situation improves.
• Employees who have done a good job of pointing out and proving why they are a resource that you can’t do without should survive if at all possible. You want useful fighters in a time like this.
• Employees who are barely noticed are usually barely noticed when you let them go.
• Don’t underestimate creativity. A reduction in time or pay from three people can equal a full headcount reduction. Find out what people are willing to do before making final decisions.

In July, 2007, Inc. Magazine surveyed business owners on the topic of downsizing. I thought some of the results were insightful:

“Who did our respondents fire? Well, it didn’t always pay to be close to the boss: 12% fired their secretaries or assistant.

The most fired department: Sales and Marketing. Other endangered staff members, IT Specialists, Project Managers, and ironically, the Head of Human Resources.”

My friends, this is most definitely a season of change. It’s a season of scarcity and real lives are being affected.

In the end, these times make us stronger and new opportunities are created. In the end, we’ll be better for it.

Until then….Bosses, chop carefully, thoughtfully, creatively, and with compassion.

And to those who are worried about being chopped? Get out there and do everything in your power to drive sales or become a part of the business engine that’s expensive and difficult to replace. Be the transmission.

Check out this great post for more information about this topic:

10 Tips for Downsizing with Grace in Difficult Economic Times

Top 7 Survival Tips to Deal with Downsizing in the New Economy

There are two central ingredients to success: Risk and Persistence. I refer to them as “The Catalyst of Success.”

There are thousands and thousands of great entrepreneurial ideas out there. Millions of people have big financial hopes and dreams. There are a lot of people who can talk about their concept or idea with great conviction and flair—or about how they could improve an entire industry with their unique insight and experience.

But for all of the millions of ideas, concepts and plans only a very, very small number of them ever come to fruition.

I’d like to point out two of the most overlooked principles of making any business endeavor a success—in fact these principles apply to any worthwhile endeavor that we might choose to pursue.

The first is RISK and the second is PERSISTENCE. These two principles are absolutely necessary ingredients for success.

When I was a teenager I shaped and glassed my own surfboards. I became very familiar with the process of solidifying fiberglass using a mixture of resin and catalyst. In order to create a bucket full of solution that would cover the entire surfboard, I would add three or four cups of marine resin and just about a tablespoon of catalyst—that tablespoon made all the difference—it was the key ingredient that caused the entire mixture to eventually solidify into a hard fiberglass finish.

In my opinion, Risk and Persistence are like the catalyst that will complete the business plan, or any plan for that matter. It’s what takes a project through to the finish line.

The trouble though, is that many people are either paralyzed by the potential costs of taking risks and choose to avoid something potentially great altogether, OR after taking a risk; lack the patience and tenacity, aka: Persistence that’s required to see something to the finish line. In a sense, they throw in the towel prematurely.

I think you can start to recognize the importance of these two principles.

Do you have some insight and experience about how the principles of Risk and Persistence have affected your life? Or do you have a comment or point in regard to these principles from which the readers can benefit?

Leave a comment and I’ll follow up with a reply as soon as I can…

I have been fortunate enough to be asked by the producers of CNBC’s “The Big Idea with Donny Deutsch” to come on the show as a expert business coach and offer advise to some struggling entrepreneurs.

Here are the two most recent appearances on “The Big Idea.”

Check out these great blog posts for more information about this topic:

Finding a Niche

Are You Prepared for the Next Disaster

Do You Need Success Intervention?

Let me introduce you to David. He’s one of the janitors who works in our office.

This guy is amazing, really.

I first met him a few weeks ago…I couldn’t help but notice him!

That’s because one evening I was startled when I heard our front door burst open, and then heard a rapidly rolling trash bin and keys jingling loudly rushing toward my open office door–I was immediately in the state of “fight or flight” because I actually thought someone was being chased through our office!

Before I could get out of my chair to defend myself, David-the-Janitor ran by my office pushing his trash-bin-on-wheels.

That’s right, he literally runs through our office, from cubicle to cubicle, emptying our trash bins!

For the next week I watched him run around the office, doing his job as if the world depended on him to get it done.

Honestly, I was inspired.

How often do we drag through our daily responsibilities or trudge through life without passion or energy?

Finally, one evening I invited him into my office to take a break…I proceeded to utterly confuse him with my terribly broken Spanish. But we managed a basic conversation.

After we got acquainted, I asked him if he ran like this through the entire building and he said, “Si!”.

I asked him if his boss was the devil or something and he said, “No!”

So I said, “Then why do you run, David?”

He replied, “Rapido es Happy y slow es Sleepy!

Wow. Here’s a guy who does something basic, something a lot of us would probably complain about…and he’s found one of the great keys to happiness…

Work hard, work rapidly, and take pride in whatever it is you do–and be happy.

Thanks, David!

Check our these great blog posts for more information about this topic:

Finding Passion at Work

Passion to Work

Worth a Visit - Love Your Job?

Learn to Love Your Job

Well, our big brother Greg made quite a compelling pitch to the investors on American Inventor last night.

We sure are proud of him!

He really did a few simple things very well that so many entrepreneurs fail to get right. Usually, an eager entrepreneur will take far too long to get to the point and fail to paint a crystal clear picture of the value of their idea.

I think Greg did a great job of getting straight to the point, and made a compelling case.

Here are three things he did well, that anyone seeking investors can learn from:

1. Explain your concept quickly and clearly. Greg didn’t mess around with a long preamble, he got right to it and explained, “My invention is a fire protection system for your Christmas tree.” Simple, clear.

2. Quickly identify the problem you are addressing and the solution you provide. Greg hit this immediately with a powerful video clip and some quick stats.

3. Show passion and create emotion. Greg hit it out of the park on this one, sharing a genuinely heart-felt example of why this product is so important.

In case you missed the episode, here you go:

Check out these great posts for more information about this topic:

Pitching to a VC? Read this

10 Tips for a Successful Entrepreneurial Pitch