Contents
Business owners think of the business in a way that no one else does, including the employees. But how would it feel if your business had every employee acting and thinking as if they also owned the business? Imagine igniting that passion and energy in everyone who comes to work every day. Here’s how.
This article identifies what needs to happen in your business for your workforce to stop working for wages and start investing in the future of the company as if they were owners.
You will learn:
- A how to guide on getting your workforce into 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 to getting 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 easier for everyone in the business 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 it’s people from achieving their true potential. Employees are often in the wrong zone for optimal performance and reward.
Three Key Elements
To get your business thriving and operating as if everyone was an owner, you need 3 elements working together.
- 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 lie clockwork
Having an Ownership Mindset in your team creates an environment that promotes learning and development, while increasing visibility and accountability. Ownership Mindset cultures retain employees at a 200% better rate than non-engaged cultures.
PLANS AND GOALS
Does your business have visible and clearly understood plans and goals?
When employees are given transparency on what the big goals are and how they fit into achieving them, they perform better. Employees that are taught the fundamentals of business and finance are better equipped to make decisions that are financially sound.
If you are the business owner and you 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 of you aren’t around. They have no direction and have to find their own way.
How much trust would you put in your employees with 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 there are some simple steps that reduce these. Remember EVERY business owner has made mistakes in hiring.
The essential elements of a high performing team can be distilled into the following 6 steps:
- Leadership
- Robust recruitment
- Clear, communicated goals
- Defined roles
- Effective and frequent communication
- Consistent effort and action
There are many more factors but getting these 6 right gives you a head start in your business. When you have the right people, they:
- Get it
- Want it
- Capable of it
There are 7 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 organizations. Being a team player means standing up and giving voice to your ideas but not sulking or feeling dejected if those ideas don’t get taken up. It means putting the success of the project or activity above your personal successes – and usually this serves you in karma when people want you on their projects because they see you as a success factor.
- Keeping cool and helping others around you do the same is a key skill of highly 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 was removed from a situation. It means not taking things personally.
- Feedback can often be perceived as criticism. The challenge is that making mistakes is the fastest way to learn IF you do actually learn from them and not keep making them over and over again. Being told you can do something better should be treated as a gift, not as criticism. It’s a sign. Of high levels of emotional intelligence to take feedback and use it as a lesson. And you can always ask for feedback (and indeed ask yourself):
- Could your work be 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. Knowledge is nothing without action.
- Leadership is about trust and respect – not being liked. It’s a bit like being a parent – you are not always going to 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 always 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. They don’t get defensive and take 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 personally improve
- Working together and welcoming the success of others as an opportunity to see the way to our own successes
- Good employees are relentlessly positive and optimistic. They aren’t afraid to voice an idea because “it’s stupid” and they aren’t afraid to fail. But they are also willing to learn from their mistakes and when things go wrong. When a problem happened they think:
- How can I solve this? And
- How do I make sure it doesn’t happen again?
- Is there another opportunity here?
There are 3 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, what their role and purpose is in the team then everyone works together.
And when everyone understands what the companies purpose is, it’s goals. And targets. It’s values – when everyone can see the full picture, they start to understand how they can add more value to the business and everyone in it.
Systems
Systems are processes and procedures – not technology. It’s doing the right thing at the right time for the right reasons. How do your staff now what the right thing at the right time is?
If you are constantly firefighting, doing random fixes and living in chaos then processes and policies will help the business and the people grow. Systemising can feel like a difficult task – it’s often hardwork, complex and dull. It’s really only 3 steps:
- Identify what needs to be done
- Document the steps
- Put the documents in a single package (or place / document)
From this point, regular review of the processes allows for continuous improvement. Getting people from the different areas of your business to review processes allows them to be reviewed with fresh eyes. Allowing employees to get involved means they’ll come up with some great ideas.
Sharing Information
I promised a different approach to people management. Sharing information is a key to getting everyone working together towards the same aims AND tracking progress. Not sharing information means that your employees can be unconsciously sabotaging your business growth.
“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 any information required for Tracking performance.
- Records of Keeping score and comparing plans to actuals
- Financial statements – though the problems with financial statements is they are often presented in a format too complicated, they are delivered too late to make effective decision and they are too 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. Key Performance Indicators (KPIs) are the operational (leading) and financial (lagging) measures that will have the greatest impact on the success or failure of your organisation.
Common High Level Lagging Key Indicators:
- Revenue
- Gross Margin
- Profit
- Cash Flow
Example leading indicators include:
- customer touches
- 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
- demos
Incentive Plans
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. Many incentive plans do damage to the business by encouraging dysfunctional behaviour.
Elements of a Well Designed Plan:
- Self Funding – Drives Value of Business
- Perceived Value
- Shared Targets
- Understandable Goals
- A Stretch, But Attainable
- Clearly Aligns Employees Behaviour to Business Objectives
Elements of a Poorly Designed Plan:
- Silo working
- Discretionary
- Unattainable
- No Perceived Value
- Uncommunicated Goals
- No Link to Work
- Changes During Community Time Frame
CONCLUSION
Getting the rewards system balanced with accountability and purpose means that everyone works together, behaves in the same way as a business owner does and allows the business to grow faster and more easily than ever. It just takes a few simple steps and adjustments.
Are you stuck in the day-to-day of your business with no time to plan for the future? A Professional Business Mentor is just the leverage you need to get out of the rut and flying. Discover how you can make your business worth more AND avoid leaving money on the table when you finally leave your business. Click here to contact Christine by email alternatively you can book a call with the Business Mentor of the Year 2020, author and speaker. Who helps business founders get their businesses exit ready so they can enjoy a happier, richer future. She saves them THOUSANDS and increases the value of their businesses by MILLIONS.