This article identifies what needs to happen to empower your workforce to stop working for wages and start investing in the company’s future as if they were owners.
You will learn:
- How to get your workforce into an ownership mindset
- An understanding of why you might be the problem and what needs to change
- The building blocks for a better business that’s worth more and easier to sell for better terms when you come to leave
- An overview of a different approach to people management
Two Important Factors
Two key elements are required to effect change in your employees, colleagues, team, associates (however you address the employees in your business):
- Accountability: knowing what needs to be done and getting it done;
- Purpose: understanding why. Why it matters and what their part in the whole process is.
When you combine these with the right REWARDS, everything becomes more manageable for everyone to thrive.
Most often, business owners tolerate mediocrity because they don’t give their employees everything they need. This is either consciously or unconsciously keeping their business and its people from achieving their true potential. Employees are often in the wrong zone for optimal performance and reward.
Three Key Elements
You need three elements working together to get your business thriving and operating as if everyone was an owner.
- Plans and goals that everyone knows and understands
- People – the right people with the right skills, attitudes and work ethic
- Systems – the processes that make the business work like clockwork
Having an Ownership Mindset in your team creates an environment that promotes learning and development while increasing visibility and accountability. Ownership Mindset cultures are 200% more likely to retain employees than non-engaged cultures.
Plans and Goals
Does your business have visible and clearly understood plans and goals?
When employees are given transparency on the big goals and how they fit into achieving them, they perform better. And, employees who are taught the fundamentals of business and finance are better equipped to make financially sound decisions.
If you, as the business owner, are the only one who can see or understand the grand vision for your business then you are leading a team that is effectively blindfolded.
That’s going to feel like climbing a sheer cliff face on your own without a safety rope and is just as risky for your business. If anything were to happen to you, no one would be able to pick up the pieces. Your business would suffer or even fade away.
If your team doesn’t know where they are going without you, they won’t know what to do next if you aren’t around. They have no direction and have to find their own way.
How much trust would you put in your employees to manage your financial future?
Finding The Right People
Getting the right team in place is a challenge for every business owner, and there will be false starts and occasional recruiting mistakes, but some simple steps reduce these. Remember, EVERY business owner has made mistakes when hiring.
The essential elements of a high performing team can be distilled into the following six steps:
- Robust recruitment
- Clear, communicated goals
- Defined roles
- Effective and frequent communication
- Consistent effort and action
There are many more factors but getting these six right gives you a head start in your business. When you have the right people, they:
- Get it
- Want it
- Are capable of it
There are seven characteristics of good employees (no matter who you are, it’s about being consistent):
Being a team player does not mean people-pleasing and making everyone like you. It means doing the right thing, the right way and making decisions that fit with the goals of the team and the organisation. Being a team player means standing up and giving voice to your ideas but not sulking or feeling dejected if those ideas aren’t implemented. It means putting the success of the project or activity above your personal successes; usually, this creates karma as people want you on their projects because they see you as a success factor.
Keeping calm and helping others around you do the same is a key skill of emotionally intelligent people. Being calm develops and builds trust more easily and quickly. This means not over-reacting when things don’t go well. It means not losing your temper and shouting if things go wrong or someone doesn’t do what you want them to. It means taking into consideration what needs to happen if all the drama is removed from a situation. It means not taking things personally.
Feedback can often be perceived as criticism. Yet making mistakes is the fastest way to learn IF you do actually learn from them and don’t keep making them over and over again. Being told you can do something better should be treated as a gift, not as criticism. It demonstrates high levels of emotional intelligence if you can take feedback and use it as a lesson. And remember, you don’t need to wait for feedback; you can always ask for it (and indeed ask yourself). Ash questions such as:
- Could your work be of better quality?
- Are you behaving professionally?
- Do you hit deadlines?
- Do you work productively / effectively?
- What would make your work stand out more?
Successful people come in all shapes and sizes, but one golden thread connects them all – ACTION. How many of you have heard someone say, “Oh, I had that idea before they did. I could have been a billionaire!”. They might have had the idea, but they did not execute it. Knowledge is nothing without action.
Leadership is about trust and respect, not being liked. It’s a bit like being a parent – you will not always be able to be your child’s friend. Trust and respect in leadership comes from setting clear expectations, having clear accountability for all, and rewarding good performance. Being trusted and respected will always lead to a better business and better personal improvements – which in time feeds into a thriving team and a thriving business.
Having a growth mindset means learning from others and from your mistakes. It means constantly asking, “How can this be better?” whether it’s a process, a customer experience, a deliverable… or yourself. It means accepting feedback as a positive thing that helps you grow and improve. A growth mindset doesn’t involve being defensive and taking things personally. Having a growth mindset means:
- Embracing and accepting challenges
- Persisting through obstacles and not giving up
- Putting in the effort to get to be a master craftsman
- Taking feedback and criticism as an opportunity to grow and improve
- Working together and welcoming the success of others as an opportunity to see the way to our own successes.
Good employees are relentlessly optimistic. They aren’t afraid to voice an idea or be concerned the idea might be seen as “stupid”, and they aren’t afraid to fail. They are also willing to learn from their mistakes and when things go wrong. When a problem happens, they think:
- How can I solve this?
- How do I make sure it doesn’t happen again?
- Is there another opportunity here?
There are three elements to building a team for an effective Business – the individual, the team (department, division) and the company as a whole. When everyone understands where they fit and their role and purpose in the team, then everyone works together.
And when everyone understands the company’s purpose, goals, targets and values – when everyone can see the complete picture – they start to understand how they can add more value to the business.
Systems are processes and procedures – not technology. It’s doing the right thing at the right time for the right reasons. But how will your staff know what the right thing at the right time is?
If you are constantly firefighting, doing random fixes, and living in chaos, processes and policies will help the business and people grow. Systemising can feel like a difficult task. It’s usually hard work and often complex and dull. But if you break it down, it’s really only three steps:
- Identify what needs to be done
- Document the steps
- Put the documents in a single package
Once you’ve achieved those three steps, regular reviews of the processes allow for continuous improvement. Getting employees from different areas of your business to review procedures gives a new perspective, and encouraging employees to get involved means they’ll come up with some great ideas.
I promised a different approach to people management. Sharing information is key to getting everyone working together towards the same aims AND tracking progress. Not sharing information means your employees could be unconsciously sabotaging your business growth. It’s been proven in business time and again: “What your employees don’t know can hurt you”.
Exposing your goals and plans allows your employees to take the positive actions required for growth and efficiency. This will speed up building your business profitability and capital value. So what do you share?
- Targets and information required for tracking performance
- Records of keeping score and comparing plans to actuals
- Financial statements – though the problem with financial statements is they are often presented in a format too complicated, delivered too late to make effective decisions, and disconnected from employees’ activities.
Rather than focusing only on lagging financial measures, identify the most critical leading, activity-based measures (Key Performance Indicators or KPIs), and utilise those KPIs to drive results on a regular, formal basis. KPIs are the operational (leading) and financial (lagging) measures that will have the most significant impact on the success or failure of your organisation.
Common High-Level Lagging Key Indicators:
- Gross Margin
- Cash Flow
Example leading indicators include:
- customer touchpoints
- face to face sales calls
- qualified leads
- new business %
- average sale value
- change orders
- new product sales
- trade show efficiency
- prospect close rate
- market share
One of the challenges for business owners is designing and implementing a motivating, self-funding incentive plan to reward employees. Most incentive plans don’t work because they’ve not been properly thought out, and some can even damage the business by encouraging dysfunctional behaviour.
Elements of a Well Designed Plan:
- Self-funding – Drives value of the business
- Perceived Value
- Shared targets
- Understandable goals
- A stretch – but still attainable
- Clearly aligns employees behaviour to business objectives
Elements of a Poorly Designed Plan:
- Silo working
- No perceived value
- Uncommunicated goals
- No link to work
- Changes during the community time frame
An ownership mindset is about getting the rewards system balanced with accountability and purpose means everyone works together, behaves in the same way as a business owner does and allows the business to grow faster and more efficiently than ever. It just takes a few simple steps and adjustments.