---
title: "A Boss's Management Log: Every Word from the Heart! A Must-Learn!"
description: "This article shares the hard-won management lessons of a boss who built a company from scratch to over 100 employees and tens of millions in annual sales. It covers key topics such as retaining key staff, delegation, cost-cutting mistakes, hiring pitfalls, and the importance of stable policies and timely wages."
author: "New Distribution"
publisher: "New Distribution"
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published: "2014-09-21"
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# A Boss's Management Log: Every Word from the Heart! A Must-Learn!

> This article shares the hard-won management lessons of a boss who built a company from scratch to over 100 employees and tens of millions in annual sales. It covers key topics such as retaining key staff, delegation, cost-cutting mistakes, hiring pitfalls, and the importance of stable policies and timely wages.

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As the saying goes, "It's easier to conquer than to rule." The same applies to running a business. To grow a company, a boss must not only consider how to retain key staff but also learn to address a series of management loopholes. Practice is the best teacher. The author of this article started from scratch and gradually built a company with over 100 employees and annual sales in the tens of millions. How did he do it? Let's look at his experience sharing on each key issue!

**1. How Small Companies Retain Key Staff**

Over the years, prices and costs have risen, but company profits haven't increased much. Every employee hopes for a significant salary increase, but an estimated 90% of small companies can't afford it. Sometimes I, as the boss, feel like closing the company and investing in stocks or real estate for some peace. Although in recent years, due to social insurance and housing fund contributions for each employee, the per capita cost has increased by several hundred yuan per month, employees don't appreciate it. They only count how much they take home each month, indifferent to company expenses.

Since I can't satisfy everyone, I focus on satisfying the 20% key staff.

First, I develop key employees into shareholders: I sell company shares at half price with a buy-one-get-one-free offer. If they withdraw within five years, they only get back the principal; after five years, I redeem at three times the price. Each year, 60% of profits are distributed as dividends. After all, if there's money, everyone shares. But if a shareholder does something disloyal, they are doubly punished, deducted from their share capital. This tactic has worked well: in the past five years, no shareholder has left, and key positions are held by shareholders, saving me a lot of effort.

Why not give shares to key staff for free? Actually, I don't care about the money, but people don't cherish what's given for free. Moreover, the money they invest serves as a deposit to prevent shareholders from going rogue. Besides, the investment can be recouped through dividends within five years. No investment, no return, right?

**2. On Delegation**

I remember when the company had just over a dozen people, I was the busiest. I often took two or three sales calls simultaneously, arranged deliveries, settled accounts, and stocked up. I arrived earliest and left latest. Once my younger brother visited and commented, "Bro, I feel like you're supporting everyone in the company!" I was proud at the time. But the company didn't grow much in four or five years, staying at around a dozen people, and employees felt oppressed with no room for growth. Eventually, I realized I had to delegate, even if employees could only do 70% of what I could. Sometimes it's really frustrating when a salesperson just can't close a deal I could, and I want to rush in myself, but I have to hold back; otherwise, how can my subordinates improve?

In the development of a small company, 15 people is a hurdle, 50 is a hurdle, and 200 is another. Without improving management methods, further growth is impossible. A boss who does everything himself rarely exceeds 15 employees. A capable person can directly manage seven or eight people; an average one can only lead four or five.

**3. Some Money Cannot Be Saved**

When I first started, there were only one or two people. I did sales, purchasing, maintenance, and bank runs myself. At that time, I had no registered capital and borrowed a friend's business license. After learning accounting for a few months, I started making reports blindly. At the end of the month, I went to the tax bureau to file. The tax officer glanced at the report and started asking questions. I didn't understand the questions at all, let alone answer them. The officer looked displeased and asked, "Do you understand?" I smiled and said, "No, I don't." "If you don't understand, why are you here? Send someone who does." "Okay, okay, next time I'll send someone who does." The next month, I made another blind report and went again. The officer recognized me: "Why are you here again?" I made up an excuse: "The accountant is pregnant and can't come, so I had to." The next day, I hired an accounting firm for 300 yuan a month and never went to the tax bureau myself again. Even when the company grew to over a dozen people, I still used the accounting firm. The company only had a cashier, no full-time accountant or warehouse keeper. In the following years, business went well, and we made money, but the year-end account balance didn't increase much. Later, I realized that once the company exceeds ten people, the boss can't oversee everything alone. The whole company is like a sieve, full of holes. It's a wonder any money is left. Expecting employees to be like Jiao Yulu or Lei Feng is impossible. Even if you give employees 70% commission, they'll still covet the remaining 30%. Only a fool wouldn't embezzle. Only with sound systems can you prevent those with bad intentions and manage the company well. I'm grateful to my current accountant for being extremely responsible. If I ever start another company, as long as there are four people, it will be one boss, one accountant, one cashier, and one warehouse keeper. I'd rather die than save that money again.

**4. Cross-Industry Ventures Don't Make Money**

This saying holds true for 90% of companies. Of course, if you think you're in the remaining 10%, feel free to try.

Generally, after a company survives three to five years and makes some money, the boss starts thinking about other ventures. Most people think their own industry is less profitable than others. Unfortunately, I'm one of them (I think my experience could fill a book on small business mistakes). At the end of the last century, on a whim, I opened a restaurant, and my troubles began. I thought my sales talent would make it a success. But a restaurant needs more than sales; if the food isn't good, customers won't return. I'm not a foodie and lacked patience to develop new dishes with the chef. Moreover, a restaurant requires dealing with purchasing, accounting, hygiene, and public safety inspections. It's exhausting and different from running a company. I lost patience and put a department manager in charge, but he managed it terribly. Within six months, we lost several hundred thousand and closed. Now, if anyone mentions opening a restaurant, I get angry. Eating at a restaurant is fine, but anything else is off the table.

**5. On Recruitment**

Over the years, I've done a lot of recruiting. At one point, I interviewed 50-60 people in an afternoon. Initially, I had no experience and always hired the best. For a customer service position paying just over 1,000 yuan, I often hired university graduates with CET-4. Later, I found they didn't stay. For simple jobs, a technical secondary school graduate is sufficient. Hiring a bachelor's degree holder was a mismatch for both sides, only useful for bragging in the company profile. Also, you can't fully trust what candidates say in interviews. Sometimes, after losing a job, they're desperate and will promise anything. Once, we were hiring for a business position with a salary around 2,000 yuan. A girl applied with a bachelor's degree and three years of experience, earning 2,500 at her last job. I asked if she could accept a lower salary. She said yes without hesitation. Since she was suitable, I hired her. Half a month later, after the previous person left, she quit the next day, citing the low salary, leaving us in a bind. In the next recruitment, I hired a girl who had earned 1,500 yuan. She's still in that position, doing well and satisfied with her salary. Most people can only accept a new job with equal or higher pay, not lower. Those who can go up or down are rare.

My recruitment experience: Better to miss a thousand than hire one wrong person (from a famous historical figure's quote). In my experience, it's better to hire one grade lower and pay one grade higher (i.e., hire third-rate talent, do second-rate work, pay first-rate wages. Of course, these grades are relative). During recruitment, take the time to verify candidates' identities. Last year, two new employees absconded with company funds. When we called, they were brazen: "My ID, diploma, and address were all fake. The police won't bother with a few thousand yuan." And indeed, the police didn't. Now, for local hires, we verify everything; for non-locals, we require a local guarantor. Anyone caught falsifying is rejected. Since then, no such incidents have occurred.

**6. The Boss Should Play the Good Cop**

Every day, many things happen in the company—some deserve praise, some criticism. Who should deliver criticism and praise?

When I first started, I didn't feel like a boss and hated managing people, so I rarely said anything about employee issues. As a result, employees were undisciplined, nobody respected anyone, and work couldn't proceed. Later, I realized I had to be stricter, but then new problems arose: almost all conflicts centered between me and employees. Employees often argued with me face-to-face. Being a boss was depressing, and I didn't want to be a harsh manager. After more contact with Japanese companies, I discovered some secrets. Japanese general managers rarely scold ordinary employees; they're very kind to them. But they often reprimand middle managers in front of employees. Ordinary employee mistakes are handled by their direct supervisor. At month-end, the GM is strict with salaries. This way, the company is well-managed, and employees feel balanced.

"Stones from other hills can polish jade." So I did it. Our company isn't big, but we have a few supervisors. I held a meeting to clarify responsibilities: whoever's subordinate has a problem, that supervisor handles it. Don't push everything to me. I usually only praise good deeds and encourage. When supervisors make mistakes, I rarely criticize them publicly, preferring private talks. Soon, management became smoother, my image improved, and employees respected me more.

Sometimes, a boss is like an emperor to a country. If the emperor is wise but ministers are incompetent, people still have hope; they might just replace the ministers. But if the emperor is incompetent, people lose hope and think about rebellion. As a boss, I can't let employees revolt or leave. Since supervisors and department managers enjoy position allowances, they should share the boss's burdens and play the bad cop when needed. The boss should remain detached, seeing things clearly from the sidelines. However, when department managers need support, as long as it's not a matter of principle, I usually support them clearly.

**7. Relatives in the Company**

On this issue, I have only lessons, not experience. Fortunately, my wife works at a great company (a Fortune 500) and has no interest in my small business. So when the company was founded, I decided to avoid hiring relatives and friends. Later, when the company reached a certain scale, an elder from my hometown called, saying her son (my cousin) had graduated a year ago and was working as a salesperson in a small company in our industry, with low income, hoping he could develop in Beijing. My relative's family was struggling; one child couldn't work due to special circumstances. I had met this cousin before; he was 18 or 19, quite smart. At the time, we needed people, so I agreed readily.

When my cousin first arrived in Beijing, he lived with my parents. Young and old have different lifestyles, and my mother often complained. After a while, I arranged for him to stay in the company dormitory, solving that problem. My cousin was sharp and good at socializing. Within months, he adapted fully and performed well in his department, often ranking top in commissions. Later, I noticed he often flaunted his special status, bossing colleagues around, causing resentment. I talked to him several times, and he promised to change, but with little effect. A year passed, and he became very adept in the industry. Then he told me he had several classmates back home who were smart and reliable, wanting to bring them to develop together. I thought it was a good idea and agreed. That's when trouble began.

My cousin and his friends lived and ate together, speaking only their hometown dialect, which no one else in the company understood. Although they were in different departments, supervisors noticed they were colluding to make illicit money. My cousin was clever; he spread rumors that there were conflicts among shareholders, and he was on my side, warning his direct supervisor not to pick the wrong side. Many employees were intimidated. After a while, the issue reached me. Our policy is: first offense, fine and warning; second offense, dismissal. I talked to my cousin, and he swore not to repeat it. Within a month, another supervisor reported that my cousin's clique was doing shady work, not even hiding it, even encouraging others. I was in a dilemma. If I didn't act, I'd be raising tigers. I wanted the company to grow and provide for the founding shareholders. "Short-term pain is better than long-term pain." I gritted my teeth and let my cousin and his clique go. The business suffered for six months.

My cousin, using clients he took from the company, is still in the industry, earning well and even bought a car.

It's better not to hire relatives or friends; otherwise, you might lose both the business and the relationship.

I once heard another company president talk about how he handled relatives after the company grew. His five or six relatives helped him selflessly during the startup. After growth, they couldn't keep up and occupied high positions, hard to manage. He chose to sacrifice money to preserve family ties: for the older ones, he gave a lump sum to start their own businesses; for the younger ones, he paid for their education abroad, covering all expenses, and after they got MBAs, he helped them find jobs. That solved the problem neatly. Impressive!

**8. Being a Boss and Driving**

Last year, I went back to my hometown, riding with a relative who had just gotten his license. The road was wide and straight, but the driver's hands kept moving, left and right, the car weaving. I sat in the passenger seat, nervous, buckled up, and stopped talking, pressing my feet as if braking. Cars in other lanes kept honking. Fortunately, we arrived safely. I recalled ten years ago when I just got my license, my brother, an experienced driver, commented similarly. At the time, I was confident and didn't understand why passengers felt that way. Now I get it.

Running a company, I often make similar mistakes. Policies change frequently. I see a new rule in another company and adopt it on a whim, then find it ineffective and overturn it, leaving employees confused. Some existing commission and reward methods were already good, tested and reasonable, accepted by employees. But after listening to an expert lecture or reading a management book, I'd copy ideas without deep thought or adaptation, immediately making new policies. Then the accountant complains it's hard to implement, employees complain it's unreasonable, and after a lot of fuss, we revert to the original.

Now I often think: running a company is like driving. The boss is the driver. On the road, as long as you stay within your lane's white lines, you don't need to constantly adjust the steering wheel. Otherwise, the driver gets tired, passengers get tired, and the car weaves dangerously. Similarly, as long as the company operates within controllable bounds without major errors, policies should be stable and consistent, giving employees a sense of security. In a small company, the boss has all the power and lacks oversight, so policy-making should be cautious. Otherwise, constant adjustments make employees feel unstable, and they'll leave. Think about why Deng Xiaoping promised that Hong Kong's system would remain unchanged for 50 years after the handover.

**9. Pay Wages on Time**

This is the most basic quality of a boss. Every boss would agree (at least verbally), but in reality, many companies fail to do it.

During daily operations, companies often face cash flow shortages, such as stocking up at month-end or year-end for discounts, project payments delayed by clients, or bank loans due. All these are excuses for not paying wages on time. A boss might think: "It's not that I'm not paying; it's just a few days late. The company is short on cash; employees should understand." The truth is: no matter the reason, employees cannot understand late or partial wage payments. Wages are not a boss's charity; they are hard-earned. Maybe an employee is waiting to pay rent, a mortgage, or school fees. Delayed wages can threaten their livelihood. Normally, the boss has more financial flexibility than employees, so he assumes a few days' delay is fine.

So what to do when cash is tight? Generally, do business within your means. If you can't, borrow from a bank. If the bank won't lend, consider internal or family/friend fundraising, clearly stating the purpose, term, and interest. Most employees are willing to participate in projects the company is confident about. If you truly can't pay wages at month-end and want to continue, the boss should first dip into personal savings. If that's not enough, pawn the house or car, and redeem when cash flow recovers.

Delaying wages is like drug addiction: once you do it, you'll do it again. Whenever cash is tight, you'll delay wages, eroding employee trust. Surveys show that delayed wages are the most intolerable issue for employees and a major reason for turnover.

**10. Learn to Say "No"**

Chinese people value face, so saying "no" is hard. But the boss is the last line of defense and sometimes must say "no" despite discomfort.

Our company has a rule: company money is never lent to individuals. Of course, in special cases, employees can get an advance on wages. Two years ago, a key employee chatted with me and asked, "If an employee contributes several times more than others, would the company lend him money?" I hesitated and thought for a while, then said, "The company has a rule: company money is never lent to individuals." He persisted, "Even for key employees?" I said, "The company treats everyone equally. Key employees can get higher salaries and bonuses, and preferential share purchase terms, but this rule has no exceptions." Then I asked if he wanted to borrow. He admitted he wanted to buy a house and needed 300,000. I was puzzled; why not get a bank loan? He said bank loans require interest and fees, so he thought borrowing from the company would be interest-free. Later, I learned he already had a house and wanted to buy another to profit from appreciation. A year later, he left for other reasons. If I had lent him money, it would have been hard to recover. After refusing once, similar situations became easier. Over the years, all shareholders, including me, have borrowed from banks for house purchases, not from company working capital. No matter how rich the company is, it can't replace a bank.

Sometimes, company rules have exceptions, but on matters of principle, the boss must stand firm. Rules apply to everyone equally. As the saying goes, "It's not about scarcity but unfairness." There's no wall without a crack. Once you set a precedent, managing others becomes difficult. The media has been advocating rule of law over rule of man, and there's truth to it. A boss should say "no" when necessary, to anyone. It's better to endure temporary resentment than to suffer a lifetime from company failure. Many companies have collapsed because bosses couldn't refuse to guarantee loans or lend money to others. If the boss doesn't take responsibility for the company, no one else will.

**11. Don't Expect to Make Friends Within the Company**

When I first became a boss, I wasn't used to managing people. I thought everyone should be equal and friends, and we could discuss things. After a while, I found the company chaotic, rules ignored, mistakes cheap, and everyone did as they pleased. At month-end, wages had to be paid in full.

One day, a friend from a big company visited for half a day. As he left, he said, "You need to strengthen management. In half a day, I couldn't tell who the boss was. Employees neither fear nor listen to you." I thought he was right but didn't know how to fix it. Eventually, problems erupted: serious embezzlement, low efficiency, employees felt hopeless, and several key employees decided to start their own business, taking seven or eight of the dozen employees and half the clients.

Fortunately, I had a smaller branch company and hired a few new salespeople. Since I started from scratch, I had strong psychological resilience. I gritted my teeth and started over. This time, I learned my lesson: I established strict rules and enforced them. Business quickly improved, and within a year, the staff returned to over a dozen, with profits exceeding previous levels.

Looking back, my initial mindset was wrong. I thought the company should be like a state-owned enterprise, where everyone is a master and equal, and everyone works hard voluntarily. That's nonsense. Within a company, interests and positions differ; absolute equality doesn't exist. Although people are equal in dignity, how can positions, authority, salaries, and bonuses be equal? Why did most state-owned enterprises fail, except monopolies? Because their management concepts don't fit the current market economy and social environment. I think the education we received fundamentally contradicts human nature. In the past, the line "Everyone for himself, and the devil take the hindmost" was criticized as negative. But now I think it reflects people's natural first reaction. "The world bustles with activity for profit." Even monks understand this. So be a boss. You can't have it both ways. I no longer expect to be friends with employees. Everything follows the rules. As long as I manage well, ensure everyone gets as much salary and bonus as possible, provide insurance, and let key employees share in the company's growth through shares, I've done my part. Being a boss is inherently lonely. Make friends outside the company.

As for rules and regulations, every moderately sized company has a thick book, but management levels vary greatly. The key is whether rules are seriously enforced and whether the boss himself respects and supervises them. Once rules are enforced, personnel management falls into place. The boss doesn't need to scold employees all day. In fact, from the start until now, I've never scolded any employee. A few times, employees left and returned, saying they couldn't stand their new boss's temper. Ha, but I feel I have authority now; at least friends won't say they can't tell who the boss is.

**12. Avoid Making Decisions on the Spot**

In movies, TV shows, and radio, we often see scenes where leaders solve problems on the spot: people complain about long-standing issues, and the leader, with a wave of the hand, dismisses corrupt officials and resolves everything in five minutes. It's satisfying!

When I became a boss, as the company grew, my desire to lead expanded. I often made decisions impulsively. Once, salesperson A complained that salesperson B was poaching his client by quoting a lower price, causing the client not to buy from A and the company to lose profit. I was angry and posted a notice: B gets no commission, is publicly criticized, and all commission goes to A. Later, B came to me, upset, explaining he had been following that client for over six months, and the price and model were basically settled. One day, while he was out visiting another client, the client called to confirm details, and A answered. A didn't relay the message but instead told the client to deal directly with him, offering more discounts, nearly ruining the deal. I was shocked; it was completely different from A's story. After checking with other salespeople, B's account was mostly true. But the notice was already posted. What to do? I had to do damage control and establish rules to prevent similar incidents. Reflecting, why didn't I investigate before deciding? If B had been introverted, he might have quit without defending himself, causing greater loss and affecting other employees. I regretted many hasty decisions. It seems the bureaucratic phrase "Let's consider and study this" has merit. In the past, emperors' words were final. Today's bosses can't make decisions without thought or investigation; otherwise, they'll lose authority with constant policy changes.

Now, when employees come to me with problems, I usually say, "Okay, I'll look into it and get back to you in a few days." This has reduced such mistakes. It's important not to act impulsively but to consider all aspects. The higher the position, the more you should avoid on-the-spot decisions. That's why big companies seem slow to respond. If they reacted as fast as individual businesses, they'd soon become individual businesses themselves.

**13. Policy Formulation**

After years of effort, our company finally obtained the agency for a famous brand in Beijing. I was thrilled. To meet the annual sales target, we held a sales meeting where I assigned tasks to each salesperson and set annual goals.

Three months later, sales of the agency brand didn't meet the quarterly target. Why? Overall sales were good, but the product mix was diverse. Was it that salespeople weren't good at selling the main product? Or was sales training lacking?

I overheard a conversation between two salespeople that solved the mystery.

After work, I was about to leave when I heard two salespeople chatting outside.

Salesperson A: "You did well today, a single order over 50,000. Why didn't you push our main product?"

Salesperson B: "Customers are used to another brand. Besides, selling that other brand gives me 500 yuan more profit, so my commission is over 100 yuan more."

So that was it. B was not only a key employee but also a minor shareholder. If he thought that way, others would too.

I reflected and realized the fault was mine. Selling the main product might yield slightly lower immediate profit, but considering after-sales service costs and manufacturer promotional support after meeting targets, it's more beneficial. The problem was employees didn't care about that; they only cared about their own gains. After all, human nature is selfish (not in line with the mainstream, but true). The sales policy wasn't well-designed.

The next day, I revised the sales incentive policy, favoring the main product: sales of the main product earned both profit commission and turnover commission. Moreover, failing to meet the quarterly turnover target for the main product would affect the quarterly bonus. The policy change had immediate effect; the second quarter's main product sales were completed on time.

Generally, employees' interests and the boss's interests are not aligned, often conflicting. Expecting employees to sacrifice personal interests for the company is unrealistic. But the boss has an advantage: he sets policies. He can use people's tendency to seek benefit and avoid harm to align employee interests with company interests, making them rise and fall together. This way, no ideological work is needed; employees naturally work toward the boss's goals. Like ancient Yu the Great controlling floods: mainly by channeling, supplemented by blocking. A wise policy must conform to human nature. All empty talk should be discarded. Some leaders (including me, who used to think about reducing bonuses and lecturing employees on life philosophy) give grand speeches they don't believe themselves. Who's fooling whom? Without benefits, no amount of preaching works. In the last century, rural land contract reform succeeded because it finally aligned with human nature.

**14. Choosing the Best of a Bad Bunch**

The sales department lacked a supervisor for a long time; I managed over a dozen salespeople myself. It wasn't that I didn't want to appoint one, but the key staff had similar abilities, none outstanding. Due to industry constraints and sales policies, each salesperson worked independently with little cooperation, becoming selfish over time. Other employees were less capable and had high turnover. So the sales department had no head.

Every day, besides communicating with other department managers, I had to manage the sales team in detail. It was exhausting. When the sales department needed coordination with other departments, without a supervisor, other managers often didn't cooperate. Status mismatch, so they came to me. Ugh.

Unable to bear it, I decided to promote a sales supervisor from the existing staff.

I set promotion criteria based on performance, ability, and teamwork. Finally, I selected a supervisor. Though not ideal, I'd train him on the job.

A year passed. The supervisor wasn't outstanding but managed daily affairs well. Previously, I had to personally assign tasks like unloading goods, cleaning common areas, and holiday duty. Now, with a supervisor, since he gets a monthly allowance, he should take on more responsibility. "Eating the king's salary, share the king's worries." I just tell the supervisor to arrange things. I also delegated tasks like contacting manufacturers for new product training and coordinating with other departments. No major mistakes in a year. It seems an average supervisor is better than none. People's abilities aren't innate. Like bees: at birth, they're all the same. If you feed them royal jelly and raise them as queens, they become queens.

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