Turning Your Employees Into Owners
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Leadership

Our people are our most valuable asset. How do we identify, attract, empower, and keep them?

As leaders I think there is very little we can do today to impact today’s results. I would submit that leadership is managing change and preparing for the future. Leaders need to be thinking one, two or more years into the future. Our job is to prepare the company for the future opportunities and challenges.

This, according to Steve Jobs, is the heart of his approach to making decisions:

“You can’t connect the dots looking forward, you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something: your gut, destiny, life, karma, whatever. Because believing that the dots will connect down the road will give you the confidence to follow your heart, even when it leads you off the well worn path” – Stanford Commencement Address, 2005.

In succession planning, our goal is to create as many successful paths to accomplish our objectives. Teaching our leadership team to manage into the future is a critical skill. I suspect as a CEO you have a well-developed gut to anticipate the future. How are you transferring the gut to provide your leadership the ability to make knowledgeable decisions regarding the future? If you are not developing this skill set in them – do you have a horse only you can ride?

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Employees today are saying “Validate me as a person or lose me as an employee.” Those who understand and embrace this will gain a considerable competitive advantage.

The U.S. Bureau of Labor Statistics says that employees under 34 will on average change jobs every 2.3 years.  Today’s young employees are fluid, and shortly, they will be over 50% of the workforce.

Updating your onboarding procedures is a huge key to increasing your employee engagement and retention. But, it has to be more that a checklist of 15-20 items to introduce a new employee to the company. Often that list includes getting a computer, desk, space, introductions to others in the company, etc.  Too often what is missing are measurable goals.

With a fluid workforce, managers should have three onboarding goals: 1) help new employee learn their job, 2) encourage them to find ways to improve the job, and 3) help their team members improve themselves. The ideas below may help managers reach those goals.

FIVE Onboarding Ideas to Increase Employee Engagement and Retention:

Business 101  

Not all incoming freshman are ready for college. So, colleges help these new students with remedial skills courses in math and English.  That same concept can work for business, e.g., what if your onboarding process included 3 – 5 hours on a quarterly basis that focused on helping employees improve their business knowledge, i.e., the basics of your business, competition, market share, profits, career development, etc.

Learning the Ropes

When we are thrown into an unfamiliar situation we look for someone who can teach us the ropes.  New employees are no different. HR may do a great job of developing and implementing an onboarding process.  But, how does it translate to the “local” level, i.e., the shop floor, your remote branch location or your third shift workers? On the “local” level, is the person onboarding new employees your best employee or something much less?

New Perspective on Employees

Bob Chapman, CEO for Barry-Wehmiller, suggests it’s time to look at employees differently.  Employees may work for your company, but they are also fathers, mothers, sons and daughters. The recent Gallup poll said that less than 35% of all employees are

engaged in what they are doing.  That means that 65% of the entire workforce are going home from work not feeling under appreciated by their company.  How do you think

that affects their family unit? Validating your employee as a person can have a profound effect on your company, their self-worth and their families.

Validation means that managers must take more responsibility in positively developing each employee. We can do that with trust, listening, validating their input, honestly making them part of the team, and giving them meaningful rewards.  The alternative is the continuation of the hire-turnover-hire cycle.

Managerial Mismatch

What happens when there is an employee/manager conflict? Often the answer is to fire the poor performing employee.  Maybe there is a different way. For example:  You hire a new employee with a type “A” personality, but their direct supervisor is a micro-manager with a do-it-my-way attitude.  Neither is wrong, but how do you deal with the conflict issues?  If you believe in the different perspective on employees discussed above, then firing the employee may not be the best solution. If you have sincerely validated this person, then your response may be to move the employee to a different manager or department.

Employee’s Career Responsibility

Onboarding must be a two-way street. Employees must feel safe to take a more active role in their personal and professional development. That means the company has to develop a trust based environment where each employee can discuss their career options. With a fluid employee base, the goal is not to keep disengaged employees for twenty years. It must be to focus on maximizing the employee’s potential for the entire time they are at your company and helping them grow personally.

Employment at your company may only be a stepping stone on the employee’s career path.  By helping your employees grow it becomes a win-win.  The employee is more engaged for the time they are at your company, and when they leave they talk favorable about their experience.  That will enhance your reputation in the all-important social media world.

Companies who make these changes can gain a significant competitive advantage.

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Bio

John Bishop has owned two business and authored three books to help people succeed. His consulting business – Hire to Compete – specializing in employee selection, engagement and onboarding.

Two of the most important decisions business leaders make are hiring and firing employees. Businesses succeed or fail largely because of their people, and the costs of having the wrong person in the job, or of having to hire and train for the same person over and over can be very high. So let’s take a look at how to make major personnel decisions intelligently and efficiently. We’ve already looked at hiring and educating, so now let’s look at the process for letting someone go.

In my career working with small businesses, I have seen many leaders make hiring and firing decisions based on emotion. Too often, I see people hire those they like and fire those they don’t without considering the employee’s actual value to the company. Conversely, many leaders delay letting go of unproductive employees for way too long because they feel bad for the employee. None of these mistakes are any good for anyone. Just as you need clearly defined hiring and educating processes, you need a clearly defined process for making an employee available to industry.

Define Success—and Failure–Clearly

A clearly defined metric of success makes it easier to get across to new employees exactly what you want. The other side of that principle is that you need to communicate your minimum standards clearly. What happens if someone fails to deliver? Under what circumstances will you let someone go? You want to avoid giving the impression of having fired someone for personal reasons. At the same time, you shouldn’t spend excessive time and money trying to turn around problem employees who are not going to get better. A clearly defined minimum standard and a consistent termination process ensure that any necessary changes proceed quickly and fairly.

Don’t Confuse Tolerance with Empathy

Empathy is good, even necessary, but putting up with unacceptable behavior because you feel sorry for the employee is not. Termination by a thousand cuts is not a gift. Delay often does more damage to the organization and prevents the individual from moving on and finding a more appropriate place to work.  When a change needs to be made, put a plan in place that focuses on the needs of the organization and stick to the plan.  Hope is not a strategy!

The truth is you can’t change anybody, but that does not keep most of us from trying. Occasionally, you can get someone to turn around, but it’s rare. On average, 17% of a supervisor’s time is spent managing poorly performing employees. Do you really want to spend that much of your time and energy with people who aren’t doing their jobs—and not supporting your champions? For the remedial employee, focus on accountability, with weekly standup meetings, for a maximum of 90 days. After that, if the situation hasn’t improved, it probably isn’t going to.

Act with Honor

Obviously, make sure you have the legal details covered and ready to go before you terminate someone’s employment. You do not want to be sued. But being ethically sound is just as important. Change needs to be implemented honorably, not emotionally. Use the golden rule; treat others as you would like to be treated.

At the end of the day, your business is not just a place of work, but also a community. Who belongs to your community is obviously critically important, but so are the processes by which people enter and exit the group. If your top employees are saddled with slackers who should have been fired long ago, or if they feel that people are let go capriciously or without due consideration, they won’t want to stay. You need the company to feel like a professional home, a place people feel comfortable, and that means making sure it is the kind of community you want to be part of, too.

Two of the most important decisions business leaders make are hiring and firing employees. Businesses succeed or fail largely because of their people, and the costs of having the wrong person in the job, or of having to hire and train for the same person over and over can be very high. So let’s take a look at how to make major personnel decisions intelligently and efficiently, starting with the hiring process.

Hiring the wrong person, or failing to properly train the right person, can be expensive; Bad hire costs can be 30% of annual compensation. And yet, 46% of new hires fail. Only 19% are outstanding successes.

A big part of the problem is that most people don’t really know how to hire the talent they need. In my experience, most hiring decisions are made based on knee-jerk reactions and assumptions, not through careful assessment of the candidate’s qualifications. The other issue is that most organizations lack an effective way of on-boarding new hires, so some people who could have been excellent employees don’t work out. You can bring in a consultant to take care of your hiring for you, or you can develop your own process. In either case, establishing, maintaining, and using a clearly defined hiring and training process can dramatically increase your success rate and reduce your costs.

Define Success First

When defining a position, go beyond the technical characteristics found on the resume. Do you want someone who is innovative, or someone who is happy to follow procedure? Do you need a gregarious leader or a self-motivated independent worker? Do you need someone who can think months or years into the future, or does this job require only planning for short timeframes?

It is these qualities, more than anything else that will determine the success or failure of the employee. There are a variety of assessment tools available that can help you quantify and measure behaviors that will align with your requirements for the position. If you have an exceptional individual in the role, use him or her as a guide in defining your expectations for the next hire.

Prepare for the Interview

Ahead of the interview, ask the candidate to complete an assessment questionnaire. Formal assessments don’t make the decision for you, but they do prepare you to ask better questions during the interview. For example, I once interviewed a woman who had years of experience with the financial software package we were using at the time. I was in seventh heaven, thinking she was perfect for the job. But her assessment showed that she loved social interaction and hated repetitive tasks. The job she was interviewing for was largely solitary and extremely repetitive. Based on the assessment, I was able to ask her focused questions about what kind of work she really wanted. Ultimately, we both agreed she wasn’t a good fit for the position.

Prepare the New Hire for Success

“Onboarding” is the process of bringing a new hire into the company and helping the person really become a member of the team. Onboarding includes formal education but goes beyond it, often lasting about a year. Many companies neglect onboarding and either leave new employees to figure it out on their own—which sets them up for failure—or assign someone to try to communicate everything verbally. Extensive verbal education is very time-consuming and many people do not learn well that way in any case.

Think about what information the new person needs and how it should be communicated. How will you introduce the culture of the organization, as well as the skills necessary for that particular position? Remember that not everyone learns or even thinks the same way and that the same training process may not work equally well for everyone; consider carefully where doing things your way is a job requirement and where you should really be willing to bend to accommodate an employee. When I used to travel a lot for business, I would usually take the new hire along. Very quickly I got a read on their work ethic, presentation, communication, and style, while they got the benefit of seeing me in front of clients and quickly learned the brand and value proposition.

Consider what the Candidates Are Looking for

Remember that just as you are thinking about which candidate will fit your business, the candidates are considering whether you will fit them. You need to make sure your business appeals to the kind of employee you want. If all you are offering is a job with a paycheck, your more talented people will leave when they get a better offer. You’ll get stuck with the folks who don’t have anything on the ball. It is in your best interest to create a company where people want to stay, a professional home, rather than just a job.

This is Part 1.  Part 2 shall be published shortly 4/30/2016

Recently, Tom Foster introduced me to a tool based on the research of Eliot Jacques—whose premise was that people differ in the time spans across which they can anticipate and plan for change. A good definition of leadership is managing change, so these time spans have a big impact on the type of leadership role a person can occupy.

Like a lot of business leaders, I used to think I had some kind of God-given ability to identify which individuals would do well in the organization. But even at the best of times, only about 60% of my hires really worked out like I expected them to. Looking at resumes and doing interviews just wasn’t giving me the information I needed to accurately predict how people would perform in the job.

Eventually, I looked for ways to do hiring better. One popular approach was formal assessment tools so I could get a better idea of applicants’ skill-sets. Basically, I was trying to clone people. I’d look at the attributes of a person who was doing a really good job and then look for someone else with a similar profile.

For example, I remember interviewing an individual for a comptroller position. They had years of experience with this really unusual software we were using. I thought I’d won the lottery when I saw that resume come across my desk. How could it not be a perfect fit? Fortunately, I listened to good training and policy and dug a little deeper. Based on a profile assessment, I found out that they didn’t like repetitive tasks and didn’t like working all day in an office. This was contrary to what I had thought I knew about them and contrary to the needs of the position. This information allowed me to ask some new and better questions.

As it turned out, they hadn’t been a comptroller before. Instead, they had been training other people on the use of the software, always moving from location to location. So they didn’t really have the experience I was looking for–and when I told them more about the position, they admitted it didn’t sound appealing.

Hiring the right person often depends on asking the right questions. That in turn depends on finding new and insightful ways to think about what you actually need from an employee for a given position.

For example, some people can really only think a couple of weeks ahead. It’s not that they don’t know the future is coming, it’s not that they aren’t smart; it’s that they’re focused on the immediate. They might be very talented with production or customer service, any kind of position that involves responding quickly and well to the current situation. They may not be able to do as well with management tasks, such as hiring new personnel, that have to be initiated weeks or months ahead of time. For that, you need somebody who can look farther down the road and can anticipate the need for change.

Generally, the higher up the chain of command you are, the greater the time span you need. If you’re drafting business strategy for the entire company, you really need to be thinking about ten years ahead—or more. Very few people have the ability to do that.

This kind of planning ability is not related to experience or education. It’s part of a person’s thinking style. That doesn’t mean that someone with a very short time span for planning is doomed–it is possible to improve your planning ability to some extent, or to simply learn coping skills to get around the problem. But a person is just not going to be able to move from one end of the scale to the other. If you’re hiring for a leadership position, you need to look for a candidate who can demonstrate an ability to anticipate as much of the future as the position requires.

A job applicant is not going to be able to tell you straight out what their time-span is. It’s not the type of thing people are normally aware of. And, as with all other assessment tools, this isn’t something that can make the hiring decision all by itself. You still have to look at resumes and skill-sets and expectations for work-place culture and everything else. Each aspect of the process still has to be seen in context. Time spans are simply another lens, a way of looking at the requirements of a job and the abilities of an applicant.

But it’s a powerful lens, one that you need to make the right hiring decision reliably.

Four Requirements for Hiring:

  1. Capability: match level of work to time span
  2. Skill: technical, knowledge, practice
  3. Interest: passion, value
  4. Behavior: habits, attitudes

Sources:

www.timespan101.com

www.hiringtalent.com

www.outboundair.com

 

 

 

In a January 2015 article, Forbes outlined the premise that as we approach full employment, employees will have more options and employers will have fewer. The economic realities I discussed in a previous article have created a society of free agents. Millennials especially have adapted to an uncertain job market by becoming much more mobile; if today’s young people do not like their employer, they can and will vote with their feet.

As I have discussed before, Baby Boomers, like me, sometimes have trouble understanding how people in younger generations approach professional life—nevertheless, we, as business leaders, have to learn to adapt to the changing needs of the workforce. We have to focus on how we can create the work-place cultures we need to attract the best of the best.

Putting Our Knowledge to Work

So, now that we understand what many Millennials are looking for in an employer and how their perspective developed, how can we use that knowledge to keep our businesses successful? There are three main areas we can focus on when we think about attracting and retaining talent: work expectations; strong working relationships; and the cause.

  1. Work Expectations

In the old days, there was that 9-5, working five days a week, two-week vacation, a very ridged structure. That is no longer attractive. Millennials want to be trusted to meet their responsibilities at the time and place that works for them.

One of the things we can do is to stop thinking about blocks of vacation time and start thinking about flexible paid time off. We can also look for ways to give people even more time through unpaid time off, without hurting the company.

But with the blended lifestyle, it’s not uncommon for people to be Facebooking at work and sending professional emails from home at midnight. Now, I’m that Baby-Boomer, I’m used to looking for face-time, assessing productivity by how many hours I see somebody in the office–but with the rise of the Internet, that old time-card approach isn’t going to work anymore.

Now, obviously we need to maintain some kind of standard, we need to know who is actually pulling their weight. So we, as business leaders, need to be thinking about how we can measure output, not time. We need to redefine the metrics of a successful employee—we need to find ways to measure their contribution to the company directly.

  1. Strong Working Relationships

When younger professionals decide who they want to work for, they’re not necessarily thinking “which job will get me a McMansion.” No, many of them are thinking about which job will help most with their professional development.

Gen Xers and especially Millennials want to protect themselves against the downsizing they saw their parents go through—they want constant investment in their skillset so they can always land on their feet. They’re looking for that great boss who’s going to mentor them, help them continue to develop professionally, and they’re looking for a workplace culture where they can create networks both in the company and outside it.

Our challenge is to be the employer who can help the talented people we need to invest in themselves.

  1. The Cause

Millennials especially don’t just want to develop themselves. They also want to belong to something bigger, to help make the world a better place. There are a couple of things we can do to respond to that need.

We can think about ways to help our employees pursue their own causes, such as offering paid time off for volunteering. Or, we can think about how our company actually does make the world a better place—if we can’t think of anything, maybe it’s time to think about doing things a little differently.

Measuring Success                    

Are we getting this right? One way to find out is to measure retention rates and patterns—not just are people leaving, but are they following each other out? If one person leaves and their friends all quit at the same time, then we know we’ve got a problem—on the other hand, if a person leaves and everyone says “good riddance,” that’s not good, either. We can also look at the demographics of who is leaving and who is staying, make sure we’re not causing a problem for some specific group. Of course, you need to consult with someone on labor law before you use that kind of information, so you don’t get yourself in trouble.

In the end, as Baby Boomer managers, we don’t have to change—but we also don’t have to survive in business. So my challenge to you is to find ways to adapt to the ongoing changes in the workforce so you can continue to find success in the years to come.

Key Takeaways

  • Success in business depends on adapting to the changing needs of the workforce
  • Look for ways to measure employees’ output directly, rather than number of hours on the job
  • Look for ways to help employees develop themselves professionally
  • Consider whether your company makes the world a better place. Perhaps it should?
  • Assess how well you’re adapting to the needs of your workforce by looking at retention rates and patterns.

This is the third blog in a three part series.  The are links to the other posts:

I Practice Age Discrimination; I Don’t Hire Anyone Under 40

Why Millennials Work Differently

 

 

In a recent post ( “I Practice Age Discrimination; I Don’t Hire Anyone Under 40”) I talked about differences in professional attitudes and priorities between generations. I called the misunderstandings that develop a culture clash. But these different professional cultures did not come out of nowhere, and understanding why younger workers do what they do is key to building a company that can bridge the generation gap.

The Boomer Perspective

When I was growing up, I learned that if I got a good job and if I kept my nose down and worked hard, then I could look forward to a long and rewarding career. When I noticed colleagues from younger generations coming to work with a different attitude, I admit I problem with it.

Gen Xers wanted to go home at 5 pm whether the job was done or not. They didn’t seem like team players to me. Millennial employees wanted flex time and assumed their supervisors should act like coaches. I’d always thought that you either take a job or you leave it—you don’t tell your boss how you want to be supervised. It was hard for me to realize that my expectations were not their expectations, and that their expectations had merit.

My professional expectations and priorities reflected the economic reality of my youth. Income disparity was relatively small, the economy was growing, and there was opportunity everywhere for those who wanted it. People from younger generations grew up in a different reality.

Millennial Economics

Rightly or wrongly, people who came of age around the year 2000 have a reputation for being both demanding and idealistic. They want meaningful work, interesting coworkers, flexible hours, and supervisors who act like coaches, but they also expect to change jobs frequently. But many Millennials aren’t actually being demanding—the economic reality is that the rewards for hard work that I looked forward to just aren’t widely available anymore. So today’s young people look for different incentives.

The last twenty years or so have seen employers rely increasingly on temp positions and contract work. Real wages have fallen against inflation in many industries, even as the cost of getting an education has risen. The result is a widening gap between the those who can attend the best schools and graduate with a lot of opportunity and a much larger group who graduate deeply in debt, with no immediate prospects for long-term employment.

The reality is that this second, larger group of Millennials don’t expect to be able to earn a gold watch for twenty years of service to a single firm—they are lucky to stay anywhere for five years. They look for rewards they can access now, such as a meaningful work experience and the coaching they need to compete successfully in an extremely tight and fluid job market.

Bringing It All Together

The Millennial approach to professional life is, in part, an intelligent response to a tough economic situation. The employer who recognizes this fact has an opportunity to compete well for top talent, not just by providing the perks many Millennials look for, but by being the kind of company this generation has learned not to bother looking for. That means not just expecting hard work, dedication, and loyalty but offering it, too.

Give a Millennial a reason to stay, and he or she just might stick around and earn that gold watch.

Key Takeaways

  • Millennials approach work differently than older employees because they are beginning their careers in a different economic reality.
  • Millennials often look for “extras,” like coaching and flex time, because they don’t expect more traditional rewards, like good pay or job stability.
  • Employers who understand where Millennials are coming from are in a better position to compete for top talent.

I had a client say that to me recently—that he won’t hire young people. He thinks most people in the Millennial Generation are lazy brats. He’s wrong, but discrimination against the young is legal in most states, so it’s his prerogative. But what’s he going to do a few years down the road when Millennials dominate the workforce? If he can’t learn to adapt, he’ll watch all the top talent go to work for his competitors.

People from different generations approach work differently. It’s a kind of culture clash. In subsequent posts I’ll talk about where some of these differences come from and how business owners can attract and retain good people from all age groups. For now, let’s look at what these groups are and how they work.

The Baby Boom

This is the generation of most business leaders today—and almost a third of everybody in the workforce. Many older Boomers are actually retired or semi-retired, but there were 71 million people born between 1945 and 1964, so there are still a lot of them on the job.

If You’re a Boomer, then You Probably…

  1. Were raised to work hard, to be loyal to your employer, and to expect their loyalty in return.
  2. Were raised to expect to work in the same field, for the same company, for most of your adult life.
  3. Want an employer who appreciates your hard work and rewards you financially for it.

 

Generation X

These are the children of the social upheaval of the 1960’s and 1970’s. They also came of age during a recession. They’ve often been derided as selfish, cynical, or apathetic, but really a lot of them are just cautious—they need a safety net for themselves and their families. Gen X is small, but none have retired yet, so they form nearly a third of the workforce, too. As a group, they are notably well-educated.

If You’re a Gen Xer, then You Probably…

  1. Work hard during work hours, but go home at quitting time, because you, too, deserve a life.
  2. Want a job where you can further develop your skillset—you know you might get laid off at any time, so you want to be able to land on your feet and get a new position as soon as possible.
  3. You don’t feel much loyalty to your boss, but you don’t expect to be taken care of, either. You’re self-sufficient.

 

The Millennials

Millennials get their name because they came of age around the millennium. They’re also called Generation Y. They’re technologically savvy, often idealistic, but without any illusions about financial success. They might despair of ever paying off their college loans, but they fully expect to change the world.

If You’re a Millennial, You Probably…

  1. Don’t expect to stay anywhere very long or get paid very well—two years at the same job is actually a pretty good run. But you do expect fun, meaningful work.
  2. Want a boss who can act as your mentor or coach, as well as a collaborative, creative work environment
  3. See your job, ideally, as a way to further your personal mission. So you’ll definitely stay up till midnight answering work emails from home or telecommute from your own vacation if it helps the cause. But you also see no reason why you shouldn’t check your social media accounts from the office—work is part of life, so life is part of work.

 

Bringing It All Together

From the perspective of a Baby Boomer, a Gen Xer who insists on going home at five o’clock (even if a deadline is looming) looks selfish and a Millennial checking Facebook at work looks bratty. But the Gen Xer has kids to pick up from daycare and the Millennial will happily answer work emails from home. Both bring their own expectations and gifts to the workforce, just like Baby Boomers do. They’re just different.

Baby Boomer business leaders don’t have to adjust themselves to the changes that younger generations bring—but they don’t have to stay in business, either. Keeping up in today’s business world means finding a way to bridge the cultural divide between generations.

Key Takeaways

  • Each generation expects different things from employers and each offers different things. All can be excellent employees
  • Business leaders need to adapt to changes in workforce expectations
  • Leaders who tell younger workers to take it or leave it will find themselves left behind.

As CEOs, we often find ourselves pushing for change. We believe our organizations must constantly grow or else stagnate, shrink and die.  And you want to provide a dynamic, vibrant, and expanding organization that people will want to join. So as CEO’s, we’re restless. We’re constantly looking for opportunities to expand our reach.

But as a company grows, it gets exponentially more complex, putting more pressure on the middle managers.

Sometimes we try to protect our colleagues from the extra work. Sometimes it just seems faster and easier to do it ourselves. But if our people don’t get opportunities to develop new skillsets, they won’t be able to keep up as the company grows. Eventually, they’ll become a drag on the business if we don’t let them go–but these might be loyal employees of twenty years’ duration.

As CEO’s, we have to do what’s best for the company, but we also have to do it in an honorable and ethical.   A generous payout or a transfer to a more appropriate position might help take the sting out, but there’s no really great way to let a good person go. The honorable thing is not to create the bad situation to begin with.

As a CEO, your job is to coach and develop your team, not to run with the ball yourself. Sometimes that means delegating and teaching. Sometimes it means sending someone out for formal classes or to get a bachelor’s degree or an MBA. By proactively offering opportunities for middle managers to step up, you ensure you won’t outgrow loyal and capable employees.

Key Takeaways

  • Real leaders get things done through other people; they don’t jump in to the nitty-gritty work themselves.
  • When you delegate responsibility, you give others an opportunity to develop as professionals.
  • Not all bad situations have good solutions. By thinking ahead, you can avoid the problem in the first place.

 

Creating a Shared Fate

As a business leader, I think it is helpful to create an all-for-one, one-for-all type mentality.  When I purchased my company, I used our first meeting together to talk about where the company had been and where it was going. But to make those plans a reality, I needed each and every member of the firm to be 100% invested in the future of the company. One of many factors that we used to align all of our values was to create the Shared Fate Program.

How Shared Fate Works

Each year’s earnings became the baseline for the next year’s profit-sharing program. We shared a portion of profits over that baseline with all employees. Each employee’s share was based on his or her position’s influence on the bottom line.

Every month, we calculated how much money would go into the program based on the average day’s outstanding on accounts receivable. We distributed the money monthly as well, the idea being that the team got paid when the company got paid. I wanted everybody in the firm to be exactly as pleased or as not-pleased as I was over the performance of the organization.

How Shared Fate Worked Out

The Shared Fate Program had a couple of outcomes:

  • When things were tough and we had to make difficult decisions, people were more supportive because they understood what we had to do and why we had to do it.
  • When we were bouncing back from the recession, people were more willing to work extended hours, including, sometimes, working over the weekend. They understood the importance of coming back slowly, instead of being in a rush to rehire a lot of people. Because we didn’t get trapped in overconfidence, and instead were willing to put in the extra work, the team as a whole benefitted.
  • The last outcome is a little more indirect. In a lot of companies, if people notice somebody is slacking off, they don’t do anything. They might say “hey, I can’t believe the leadership hasn’t noticed what Phil’s doing,” but they don’t see it as their problem. In our organization, the Shared Fate Program created a culture of accountability where if someone wasn’t doing their job, the others would say something to that person. People who didn’t want to pick up the pace would usually leave on their own because they didn’t feel like they fit in. The result was an organization where everyone was really working together towards common goals.

Key Takeaways

The Shared Fate Program created an all-for-one, one-for-all mentality that we all benefited from. By sharing information about money, as well as a portion of the money itself, we got a better-informed, more supportive, and more responsible workforce. When the leadership acted like we were all on the same team together, everyone else got into the act, too.