A chief executive of a small, growing business once said that the only thing that kept him awake at night was difficult conversations with his employees.
He could hold tough commercial negotiations with clients. He could figure out how to service a huge new client contract with a tiny team. He could persuade the bank to extend his credit line. That was all in a day’s work.
But at night, this charismatic, clever business leader lay awake, worrying about how to tell the warehouse manager that his management style was upsetting people. How could he persuade the frail, 70-year-old security guard that it was time to hang up his hat, without being accused of age discrimination? How could he get to the bottom of who had stolen money from the petty cash tin, without wrongly accusing anyone? Could he say no to the retail manager who wanted to work part- time when she came back from maternity leave? He rehearsed the conversations endlessly in his mind at night, but never actually had time during the day to deal with them.
There was an article in the news about a ‘raid’ by the UK Border Agency on a small, agricultural business in Cambridgeshire, to see if they were employing any illegal workers. The fine for breach of the rules is £10,000. This same chief executive couldn’t believe that the organic farming business had been so slack to incur a fine for not checking employees’ right to work in the UK. He thought, “No small business can afford a hit of £10,000 on the bottom line for an administrative oversight.”
What he didn’t stop to calculate was the intangible cost of high staff turnover in his warehouse, the health and safety risk of employing an ageing guard on the night shift, and the possibility that one theft could be a symptom of a much more serious gap in his financial controls.
Growing a small–to medium-sized business requires a wide range of skills and knowledge. Business owners are often ‘generalists’ – good at lots of things but not experts in many. In the early days, they must constantly balance the need for expertise, with the cost of paying someone else to do the work.
Sometimes it’s obvious when to wheel in the expert. A new state of the art website requires specialist design skills and someone who knows about search engine optimisation. A business plan to satisfy a venture capital investor needs sound financial modelling skills and knowledge of the vocabulary of ROI and debt-to-equity ratios. The business owner will weigh up the cost and pay the expert to do it. There is no stigma to admitting you’re not a website designer or financier.
But somehow, we all think we are experts in people and asking an expert for advice is admitting failure. It’s possibly tied into the idea that ‘our people are our greatest asset’ – the line that is so often trotted out at team events and used in recruitment adverts and sales pitches to new clients. No matter what the business, that statement is true – people are the greatest assets. Especially in the early days, the passion of those pioneers, and their flexibility to do whatever it takes, will be the making of the business.
Once the organisation grows to a size where the owner has to ‘let go’ a bit, the best businesses put in place systems and structures to keep people talking, keep them excited about the mission, and recognise their contributions. It doesn’t happen by accident. It needs planning, time and effort, and honest conversations with employees. By now, the business owner is focussing on keeping the customers happy and finding new ones. There is less time for employees, just when they need it most. That’s when the little problems and irritations start to fester, undermining morale and impacting client service. Left unattended, they will blossom into full blown ‘people issues’ and start keeping the business owner awake at night.
The secret is to recognise when a people expert should be wheeled in. There are lots of HR practitioners who know the law, and how to apply it. When an employee starts drinking on the job and compromising the company’s reputation, there are lots of HR providers who can tell the business owner what the statutory disciplinary process is, so they can fire the employee without risk of being taken to Employment Tribunal. Whatever the problem, there is a HR expert who can fix it. They are easy to find, at the click of a mouse.
But why wait until there is a problem to bring in the expert? It’s ok to pay an expert to optimise the website to attract new business. It’s ok to pay an expert to draw up a compelling business plan to attract investment.
Is it time to think about paying an expert for advice about keeping your employees happy, engaged and productive? Is it time for some advice about finding the right people to grow the business for the future? Or are your people not really your greatest asset after all?