Managing Your People
You have written your plan and now you want to implement
it! Well let us see if we can help with some simple advice.
Business organizations are inherently social organizations.
There are relationships between employees and their bosses,
employees and other employees, employees and customers, employees
and vendors, the business and its outside consultants, and
many other types of social interactions that can each cause
problems of some sort. In fact, people problems may just be
the most difficult type of problem to deal with.
It would be nice if we were all well-schooled in psychology
and could avoid people problems by simply not hiring or associating
with people that have the potential of causing problems. But
that is unrealistic in many ways other than the obvious. You
simply never know who might or might not be a problem individual
under stress. No amount of psychological training is going
to equip the small business owner to make such a determination
and be 100 percent accurate.
There is also no way to know how effective an individual
is going to be for an organization. A person may be nice, kind,
polite, have a great educational background and a good work
history, but just cannot function well in your organization.
Is this the fault of the individual or the organization? How
can you tell?
The stakes are high. More than a few small businesses have
been ruined because the entrepreneur made poor decisions relative
to the people he or she chose to associate with and how relationships
with these individuals were maintained.
Failure to train employees properly
Not all problems with people are related to personality.
In fact, most problems that small businesses must face relate
to the inability of the business to train employees for the
tasks for which they are to be responsible.
There is a major difference here in the capabilities of large
and small organizations. Large organizations generally have
a formalized training structure in place for new hires. Small
organizations generally rely on on-the-job training carried
out by individuals who themselves have been poorly trained
and thus are in no position to train anyone else.
Business is transacted by people. If the people who work
for the business are poorly trained it will always reflect
negatively on the bottom line. Always.
It is critical that new employee training be carried out
by people who are both knowledgeable in the subject matter
of the training and capable of training effectively. If no
employees meet these criteria, then a trainer or trainers must
be brought in from the outside.
Poorly trained employees create more problems than just errors
in their work product. They also become a drain on morale and
can create problems with other employees, customers and vendors.
Failure to appreciate the contributions of employees
It is not uncommon for employees of small businesses to feel
unappreciated. Larger organizations have structures in place
to recognize employee achievements and are better able to reward
outstanding efforts financially.
Small businesses make a number of mistakes in this area.
Some examples are:
- Treating employees as though they are easily replaceable.
- Failure to provide reasonable benefits.
- Little or no recognition of outstanding accomplishments.
- Failure to respect the value of employees' time.
- Failure to ask for and respect employees' opinions.
Entrepreneurs sometimes treat employees like they are family,
and this is generally a good thing. It can become a negative,
however. People generally expect their families to help them
out to the greatest extent possible while expecting little
or nothing in return. They do it because they are family. Your
employees will never BE family. They need more appreciation
and recognition than family will ever need.
Employees are the life-blood of any business organization.
It is critical that employees feel like they are part of the
team, are respected, and are well compensated, and that their
efforts are truly appreciated by the owners. Small businesses
that look at employment costs first when seeking to control
or reduce expenses are making a mistake that can be deadly.
Hiring or trusting the wrong people
I once knew a business that was doing well, employing about
15 people, making decent profits for the owners, and growing
slowly every year. The owner decided he was ready to take the
plunge and take the business to the next level.
He hired a man who was generally recognized as being one
of the best sales organization builders in the business to
open several new offices and introduce new product lines at
all locations. The business quintupled in size within six months.
New locations were opened in two other cities in the same state
and total employees grew to in excess of 125. Everything looked
good.
But . . . the owner had lost control. The new hire demanded
the world and threatened to walk out if his demands were not
met. They were met until one day the owner could stand it no
more and told the man to get out. He did. And he took every
employee he brought into the organization with him! His people
collected the businesses' receivables and left it with the
bills due to vendors. He opened competing businesses in each
city using his former employer's own money to destroy him.
And destroy him he did.
The owner of this small business actually knew that this
man had done this very same thing to two other businesses before
him. He hired him anyway because he thought he could control
the situation.
The moral of the story? A small business needs to know whom
they are dealing with and refuse to let greed lead them down
the path to destruction. Hiring or associating with people
who are not VERIFIABLY trustworthy and honest, no matter how
good the individual might be at his job, will always be a mistake.
Creating an atmosphere of mistrust
It is important that employees, customers, vendors and others
that have relationships with a business trust the owners. I
have seen situations where owners intentionally create an atmosphere
of mistrust for purposes of control, but I won't address those
situations because there is really nothing to say about them.
But in other cases, owners create an atmosphere of mistrust
without meaning to. This can happen when an owner fails to
recognize the contributions of employees and where owners fail
to deliver on their promises whether they are promises made
to employees, vendors or customers.
Vendors and customers will simply refuse to do business with
an organization they can feel they can no longer trust. Employees
will be constantly on the lookout for another job opportunity
and job performance will suffer. Business results of operations
suffer in direct proportion to this growth of mistrust.
Small business owners need to always be mindful of their
actions and the consequences. For example, I know of one situation
where the owners regularly pocket the cash from cash sales
made by the business. The cash they take is properly accounted
for in all ways but the employees do not necessarily know that.
Some employees think they are stealing from the business
and cheating on their taxes. Some have even lodged complaints
with taxing authorities, (anonymously, of course). All of this
could be avoided by following simple procedures designed to
eliminate the appearance of impropriety.
Bottom line? Sometimes owners tend to think of their business
as an extension of their personal lives and personal checkbook
and do things they would never think of doing if they were
the CEO of a business they did not own. This always creates
problems in some fashion. Small businesses must create procedures
that build trust and operate in compliance with them.
Entrepreneurs must build the character of the organization.
Businesses have a reputation just like individuals do and that
reputation is key to continued success.
Hiring the wrong consultants
Consultants can add a lot of value to a small business enterprise.
Small businesses generally cannot afford Fortune 500 executives,
so they should include in the budget funds for the best consultants
available. The hourly fees may be scary, but the right consultant
will be worth many times the amount of the fees charged.
Small businesses make a big mistake when they make it a practice
to hire the cheapest accountants, attorneys and business advisors
they can find. Consultants should be hired based on their experience
level, their reputation, and what they can do for the business.
The capabilities of the consultant should be matched with the
project at hand. If the project is critical, the small business
simply cannot afford not to hire the best.
Business Plans Ltd. is the world’s largest database
of pre-written business plans. These business
plans and associated
free gifts give you the perfect start to creating your business
plan but they must be used in conjunction, and not to replace,
your own thoughts.
These plans show you how to create your business plan and
give you useful wording in your industry but they are not designed
to replace your thoughts!
Create your own business plan quickly, easily and at a reasonable
cost now with Business Plans Ltd.
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