2 or 3 Things I’ve Learned Building a Company…
When perusing LinkedIn, Facebook, TechCrunch, etc… There is a never ending supply of attention grabbing articles (like this one) that try to hook you with recipes for success in business. Too often, I get suckered into diving into one of those articles or posts and scroll down looking for the “HOW” but only reading the “WHAT.”
Monikers and inspirational quotes are scribbled on sticky notes in business incubators and startups all over the place (because that’s what startups are supposed to do right? (Stop reading this if you think so)).
There is much validity to Vaynerchuk’s, “ideas are crap, execution is everything.” My goal here is to take it a half step further and share what has worked for me and my teams to actually execute. Without further ado, the “HOW:”
- You Win With People
The team you build, to start a project with, is the foundational piece upon which your future success depends. From my personal experience, there is nothing more motivating than working collectively to achieve something greater than any one person could accomplish on his / her own. The notion of collective effort is what propels progress.
You are unlikely to significantly disrupt a market by yourself, the world is moving faster every day. Your ability to build something and put it out there into this fast moving, content consuming world will be heavily dependent on the speed to which you get to market, collective effort will be very instrumental in speed to market.
- Your Time, Right Now, Is More Valuable Than You Realize
“Time is money,” right? Well chances are, you don’t have money to burn (unless you are an overfunded coast company), and if you do have money to burn, companies like mine will beat you every time… Every time (that’s another topic). Many early stage entrepreneurs fall into the trap of thinking that because time might be the only commodity they have, they can spend it without thought. I have found that couldn’t be further from the truth.
Every meeting, networking event, lunch, coffee, etc… Should provide value to you, your team and your company. The more time consuming one of these activities are, the more value they should provide. There are only two investors I have ever gotten on a plane to go meet with, if you have a killer concept and corresponding proof points, the investment capital will come as needed, your time conversely, will only become more scarce.
Whatever the biggest problem facing your concept, project or business is, carve out completely uninterrupted time to only think about that challenge.
- Your Ability To Execute Is Tied To Points 1 & 2
If you are hyper-vigilant about spending your time wisely, and surround yourself with talented people, you will be in a position to execute, the only thing left is to work insanely hard and possess an unreasonably high level of determination. Execution IS everything, and you need talented, motivated people coupled with well managed time to achieve your goals.
Don’t Let Low Turnover Fool You-
Over the course of the past year, I have had the opportunity to speak with several executives across various industries and sectors, and I have learned a ton from their insights.
Regardless of what business you are in, we can agree that for your organization to thrive, complacency completely detracts from your mission and goal achievement initiatives. I have yet to meet an incredibly successful person who has credited his / her success to complacency…
At best, complacency will yield mediocre results, and at worst it will put you, your people and your organization at risk. So if we agree that complacency is such a hindrance to our goals, why do we let it seep into our organizations, our work?
The answer is intuitively simple, it’s easy. It’s easy to say, “This is good enough.”
Our turnover is low, well relatively…
I recently listened to an HR executive tell me that he was completely satisfied with 146% turnover of his front-line employees because that was lower than almost anyone else in his field. Meanwhile, I’m sitting in front of him thinking, “There is a 146% chance I wouldn’t work for you, and that’s probably as low as it will get.”
Turnover is a major cost driver, which is to say it is a cost that has many other serious tangible and intangible implications. Time, training, insurance, licensing, payroll, uniforms, benefits, the list goes on… All of these things add up very quickly per employee, so, your “relatively low” turnover costs are astronomical.
The opportunity cost of turnover
Aside from all of the aforementioned turnover cost implications, the true cost to your company is more than double that cost.
Opportunity Cost: the loss of potential gain from other alternatives when one alternative is chosen.
That’s economics saying, “Not only did you hire the wrong person, but you lost out on all of the productivity and value that the right person would have brought to your company if you would have done your job and hired the right person / people for the job.”
But wait, it gets worse… Your antiquated hiring methods not only cost you the aforementioned dollars and time, but chances are, that candidate that you invested in, will be picked up by a competing organization. You might be thinking, “Yeah, well that’s why we impose non-compete agreements.” I promise that the person who left your organization, is simply navigating the hiring process during the time of that non-compete.
But what about really low turnover?
Believe it or not, there are organizations that enjoy less than 3% turnover of employees over decades. But even that number isn’t all rainbows and unicorns, it really means that those employees are very expensive to hire, train and retain. Think about the risk of hiring the wrong employee at a pre-screening cost of $150,000 per candidate, and the aggregate value of their contract is over $2M… You better hope your turnover is less than 3%, and you should be thinking that less than 1% is the ideal number you need to be shooting for…
Don’t rest on your laurels
Your turnover can always be lower, your hiring, succession planning and organizational bench-marking can always be more effective. There is one resounding point to which I always want to drive home, it’s that your people will make or break your organization, and as a leader, it’s up to you to empower not impede them.
Leave Me Alone- 3/24/2016
If you’re anything like me, you’ve had the thought that is the title of this piece here run through your head as you are being micromanaged. Every person has a specific performance bandwidth that is the “sweet spot” in their work style, understanding one’s work style is key, not only for self-awareness, but also with respect to understanding those with whom you work.
While it is true that some employees benefit from constant supervision and feedback, many do not, and in fact, what might simply be a well-intentioned manager trying to stay engaged with his or her people, could be perceived as a lack of trust in front-line employees’ abilities to perform and execute.
Executive leadership teams, HR and mid-level managers must make it a priority to understand their front-line employees’ work styles. This is not some nebulous notion, this can be captured and quantified yielding tangible results. It is imperative to not only understand what employees are looking for in terms of fulfillment and team structure, companies should also consider how their employees:
- Respond to particular types of feedback
- Manage task orientation (structured vs unstructured)
- Role preference with respect to teams
Elements such as those aforementioned, and many other data points, coupled with your KPI’s provide your hiring team with a path to delineate between a great hire, and an average hire (at best). In addition to hiring, companies can use data driven metrics to execute an organizational diagnostic of their existing workforce.
The ability to achieve a known state within an organization will greatly predict a firm’s ability to manage change, maintain current operations or innovate in an evolving market. These organizational compositions vary widely, and the reason many firms at all stages of the business life cycle struggle, is due in large part to a dissonance between their goals and the aggregate talent capabilities.
So, before you decide to counsel your “subordinates” (the people you depend on), think about the best way to approach them given their work style. If you aren’t sure what their (or your) work style is, check out some of the stuff we’ve built at LaborGenome, you won’t be disappointed.