Tag: focus

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Look Inward

Over the weekend a Focus Group I facilitate met in Naples, FL to once again take an in-depth look at the financial, marketing and operational sides of their businesses. Many of these seven franchisees rank among the sales leaders in their system, yet they value the importance of getting together each quarter to share, challenge and learn from one another.

Among the key metrics tracked and reviewed are Percentage of Salaries compared to Sales and Sales per Employee. One member has lagged in these categories for a while, so the group recommended it’s time to address the situation by either changing the makeup of the workforce, reducing headcount or increasing sales to make the ratios fall into line.

Not surprisingly, there was pushback to this suggestion, with the franchisee saying things like: “In our market we wouldn’t get a single resume if we advertised for anything less than what we currently pay,” “We couldn’t get out the door this much sales without the skills these folks bring” and “If we were to reduce salaries even slightly, there would be an uprising.”

Of course, the other owners and me countered with: “How will you know until you try?” “Might it be possible bringing in new energy in a few positions might give you more capacity?” and “So you’re happy with your employees maintaining their income while yours continues to fall as health insurance and other expenses rise?”

Owning your own business means you take all the risks. You cover mistakes out of your profit. You pay yourself last. Every franchisee or small business owner I know previously worked for someone else at some point during their career, so they’ve seen both sides. It may seem cold-hearted to make tough decisions about your employees, yet it’s part of the responsibility that comes with being the boss. As one of my first clients told me nine years ago, “The only place a business will run itself is into the ground.”

When the numbers don’t add up and cash flow is tight, you have to make the difficult call to protect the organization. Otherwise, one day you may wake up and be out of business.

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Confrontation Station

One impressive thing I find in working with large organizations – those with HR departments – is a focus on conducting regular performance reviews with employees. Many of these include creating development plans to help direct reports improve in needed areas. Smaller companies? Not so much. It seems every time I ask a small business owner, “When was the last time you conducted employee reviews?” the answer is, “I need to do that.”

There are two sticking points that seem to get in the way of accomplishing this important task. One is time. That’s a given in both large and small organizations. There is always something else to do. Who has hours available to review eight or 10 people? The other challenge is strictly internal: aversion to confrontation.

Most of us simply don’t like to address hard issues. After all, if we call someone out on a behavioral trait, several things could happen: 1) They could react – with anger, with tears, with the silent treatment; 2) They could leave – it’s easier to move on than to change; or, 3) They might not like us – and who enjoys being the bad guy. Makes sense that the way to prevent any of this is to avoid the issue altogether.

Of course, then there is no growth and you continue having employees with the same challenges. You’ve substituted frustration for confrontation. A better way is to change your mindset. Instead of thinking of employee reviews as a ‘time to point out what Susie does wrong’ exercise, look at them as the opportunity to have a candid and open discussion around how to help Susie improve.

If you’ve never done reviews, here’s a simple process to implement them:

1) Spend one hour thinking about your employees’ individual strengths and opportunities for improvement – make notes on each person (a common form would be a good thing to use);

2) Schedule a 30-minute meeting with each employee, letting them know the purpose is to help them identify ways to be a better contributor and to seek their input on how you can be a better leader… and when you get together allow them to share first (you may have to prompt them with a few ‘What do you do best?” and “How can we improve?” questions);

3) Acknowledge their answers (no need to defend your shortcomings or respond to their suggestions, just say thank you and let them know you’ll consider), then share your thoughts – be sure not to focus on just negative things… complement their positive attributes;

4) Agree to two or three things they want to improve over the next three-to-six months – then check in with them every few weeks to see how they’re doing… following up is essential to keeping them on track.

Take this approach and you’ll see reviews are more about helping your employees grow and learning ways you can better serve them. Instead of confrontation, you’ll discover cooperation.

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