Whether you like it or not, business is about people. People are designing products and services for people, using people to sell, make, and deliver them. Because of this, who you hire is one of the most important decisions you will make at your company.
If you are like most business owners, you hire to fill a need, only to see 60% of that need filled. Within 2 years of the hire you are battling back and forth whether you should have hired them? Whether you should let them go?
And how you will find someone to replace?
The truth is that for most small business owners, hiring takes a backseat to sales, product development, and customer focus. Yet it has the potential to push those areas to levels you never though achievable is done right.
Our businesses find some traction and begin growing. The growth is great, but it creates more and more work for the existing team. At some point we decide that the work is too high and there are “excess profits” enough to hire our next team member.
We quickly write the tasks that we would like to delegate and start interviewing. With no real scientific method we interview until we either:
- find someone we instinctively like or
- feel someone has the skills with which to do most of the tasks on the list we made.
At first all is well and you start moving tasks over. Then you see a mistake. On the one hand it is fairy serious, on the other they are still learning so it is to be expected.
Before long it seems like you are busier now than before you hired anyone
You teach them more and more and start to feel excited. Internally you think “I can finally revamp our sales process, get some larger clients, and increase our profitability!”
Then as you are going through some documents one weekend you notice a huge error. As you look into, you realize it is one of many that has been occurring for months. You suddenly feel sick, overwhelmed with the thought of correcting this.
As months pass you begin to notice that nothing actually gets finished. The tasks get done as long as they are easy with no really difficult decision making needed. However, as soon as a small amount of resistance is encountered, the work ends up back on your desk to complete.
More and more everyone you work with and manage is leaving you problems and issues that they simply put on your desk and then moved on. Before long it seems like you are busier now than before you hired anyone!
You consider letting someone go and replacing them with a more competent person, but then you are hit with all the issues in carrying that out:
- “It will take months to train someone to know and so what they do. They only 70% of what I give them, but at least its something.”
- “I don’t have the time to train someone new right now, I am barely hanging on as it is!”
- “This happens every time I hire someone, I don’t even think I can find anyone better here.”
- “They are going to be crushed.”
What you have found yourself in is what I call Personnel Debt. It is the sunk cost of money and time in an employee that should be moved, or replaced.
Think of it this way…
If you knew everything you know now, what you make the same decision and hire them today?
Building An Explosive Team
Hundred’s of businesses all over the world hiring great people and doing amazing things.
While it can seem at times you are the only one who get’s it; and you are the only one who can do the work - you aren’t. There are 1,000s of employees and team members who are doing fantastic things? Just look at all the great products in your home, or the services you subscribe too, or the places you love to frequent in your home town. There are so many great people who are helping small businesses grow and conquer all types of challenges.
There is most definitely someone out there who can do what you do even better than you!
So the question becomes:
- How do I find that person?
- How do I convince them to work with me?
- How do I limit Personnel Debt?
The key is that it isn’t about the person as much as it is about understanding organizational design and the important functions of organizational roles.
Below I’ll share a model which is designed to help small businesses achieve far more. By hiring the right person for the right role while understanding the organizational context you can completely transform your company in less than one year.
5 Key People To Make Your Organization Great
As a business, it is your goal to provide value and return to a number of stakeholders including suppliers, customers, owners, employees, and the community. However, balancing all of these needs can become complex, specifically when decisions that benefit one hurt another.
Rather than having each person in an organization focused on the customer or maximizing profit, it is far better to rely on first principles and focused attention.
The business is a conduit with money, information, and products/services flowing through it at all times. Different parts of those flows relate to various stakeholders. By setting up the organization in a purposeful way, we can create a personnel structure which operates in these flows efficiently while also maximizing return for all the stakeholders of the business.
Below are the main types of roles that I have discovered are crucial to setup correctly for a successful business.
The culture supporter is a people person. They have high empathy and high compassion. They are focused on providing the right environment for people to thrive!
They get excited when individuals realize their potential. Because they need to help others grow, even beyond themselves, they must be secure in who they are.
Culture Supporters should focus on the people that work within the business. Like the patriarch of a family, they should be supportive and protective.
Companies work best when the owner or CEO is a culture supporter. Often, in smaller businesses, owners are focused more on customers and growing the businesses rather than the people that work for him. This is a short-term strategy which stunts long-term growth. It is better to have 5 people obsessing over customers, than one owner. The best way to multiply the people focused on the customer is to focus on the people themselves.
By providing a fulfilling environment for people, they will more focused externally than internally, and the customer will receive much more attention and better service than you could possibly give on your own.
On the other hand, people who feel like they are a small part of the owner’s focus to raise profits will be disengaged; doing only what they need to. They will be protecting their interests rather than knowing that the culture supporter is watching out for them. A culture supporter frees everyone else to do their best work by releasing them from worry and anxiety.
Like the culture supporter if focused on people, the operational innovator is focused on the business itself. They are always looking for better. This can include:
- Higher return
- More efficient operations
- Better product / service
- Lower costs
- Less errors
They tend to be system thinkers and always creating tools and methods for systematizing and scaling the business. They are constantly innovating within the organization.
One of the worst mistakes I see is a company who has someone that could be an operational innovator, but instead they are burdened with customer service, or demand planning, or a myriad of other tasks.
You want an innovator to be free to constantly be working on your business, it’s processes, and its flows. This is usually one of the first changes I make when working on a turnaround situation. It is one change that compounds on a daily basis as they make the business a little better each day.
So far we have discussed two internally focused people, the culture supporter and the operational innovator. Next is the tasker. They are focused on suppliers and customers. They are the ones carrying out the day to day.
It is important to have the right people here. They should look to wow customers and serve suppliers, helping both build profitable and sustainable businesses. They should feel secure in their own place in the company and thus free to build relationships with current and new outside firms.
Good taskers also like efficiency and “getting things done”. They are list makers and love checking things off. They are quick responders on email and like to deal with people.
The above model is the general core of the Operational Labor System that brings best results.
- A leader focused on people and providing a culture where everyone grows and thrives, is challenged and fulfilled.
- An innovator who is tweaking and changing the business to make it better in every department and in every way.
- A tasker who is carrying out the business day in and day out with efficiency and fulfillment.
While this gives us the core, most businesses will not be able to implement the core only. There are various specifics of knowledge needed to inform the operations which neither the innovator nor the taskers will have. For this we have Specialists.
Specialists are experts in a specific area and support the taskers as they operate. One example might metallurgist in a manufacturing plant, or a software engineer at a small distribution office.
You don’t want taskers getting bogged down in problems, or issues of too much detail. So the specialists can be called in to support the taskers here.
You also want to be able to capitalize on the insights that can be gained from taskers without getting in the way of their job. For example, you may find that one shipper and receiving clerk has an idea to implement a new label system based on the feedback of a few customers. You don’t want to saddle him or her with this since it may put too much on their plate and leave them frustrated. You also want to capitalize on the insight for improvement. So you can pass this to a specialist if available or the innovator if more general in nature.
Some of the most common specialists I see include
- Mechanical & Electrical Engineers
- Import / Export / Logistics
- Software Developers
Just a quick note. A software developer at a software firm might be a tasker, whereas that same role at a manufacturing plant might be a specialist.
Everyone Supporting Someone
With this model, you have all your major stakeholders getting attention and support by others who themselves are supported. It creates a positive flow stemming from the Culture Leader and consistently generates outsized returns.
The leader is focused on employees The employees are focused on vendors & customers The vendors are then focused on employees The customers are then focused on employees
The enriched employees, customers, and vendors then help support an industry ecosystem in a positive way.