CHAPTER 9
People Count
(Show Them)
Vignette: The Marketing Event
Jane came into my office in tears.
“Why did you cancel the annual education show?” she asked. She had just learned that I canceled this yearly tradition. No more shows.
I had acquired the fledgling technical training company a few weeks before. It was facing bankruptcy. I started by realigning the expenses and streamlining its operations. Sales were mostly based on government contracts, and she was my best salesperson. The ownership change had an adverse effect on her because she was very fond of the retiring previous owner. She was also very protective of her customer base.
I believed, after carefully reviewing the company’s books and modus operandi, that I could salvage the company by implementing significant change. I had to modify the revenue base by including a wider private sector clientele, reduce excessive spending by removing operational redundancies in the four company branches across the province, and do it all full steam ahead. No time for hesitations. I thought, as a young executive who has invested his capital in this venture, that “I knew it all.”
I forgot the people factor.
The aforementioned event was an awakening call for me: people count.
For years, the previous owner had a yearly education show for his government customer base. Jane was very proud organizing it. She would reserve the convention space, bring in the entertainment, ensure catering was appropriate, and took care of all the details. The public sector clients liked it. She liked it. It was an opportunity to spend time together with the customer outside the office, invite some instructors and employees, and forget the daily business atmosphere that was their usual routine.
I believed that this type of marketing was an expensive investment and questioned its cost effectiveness. All the time spent in planning the event was taken away from the sales process; 3 days were “lost” from classroom activities; travel and lodging expenses compounded the effect on the bottom line; and there were little direct quantifiable benefits from the resulting sales revenue. It sounded reasonable to me that this type of event had to go.
A few months later, with the company back in the black, I knew that I made the right decision.
The problem I faced was not dwelling on the decision. It was the way I made this decision. I needed to listen actively to my employees.24
I should have known better and predicted the effect it might have on my salespeople.
Listen to what your employees have to say.
Lessons Learned: Top Down or Bottom Up?
Top-down decisions may have a devastating effect on people affected by them when those people have no input into the decision-making process. Regrettably, this happens quite often in business, especially when layoffs and foreclosures are ahead, or a downturn in the economy requires a proportional reduction in staff.
It does not have to be so. Employees are knowledgeable people and understand the various economic circumstances affecting the business environment. They can have constructive ideas about how to deal with these types of challenges. They are the ones who confront and serve customers daily. Involving them in the business decision-making process can be very beneficial to the business.
I failed to understand this. My decision affected negatively the morale of my employees because they did not know why I made this decision.
They thought that my decision was mean. I did not care about the customers or them. I lost a few good employees as a consequence.
“Wise executives tailor their approach to fit the complexity of the circumstances they face.”25
Your employees know.
Lessons Learned: Nobody Can Be a Prophet in His Own Land
Applying the lessons learned in this previous venture, I used a different approach in one of my next business ventures in South America.
A Spanish saying goes, “Nadie es profeta en su tierra.”i
It is useful to invite outsiders to assist in implementing significant changes to the company.
This is the realm of business consultants.
Vignette: A Moderator
Peter was a retired IBM executive with a high capability of empathy for other people’s feelings and emotions. He recognized the importance of empathy. He knew how to include others in the decision-making process.
He came highly recommended by some of my colleagues.
I shared with him my concerns about the growing dissatisfaction of the unionized workforce of another fledging company I was trying to turn around. At that time, the number of full-time employees in the firm was 60, including executives, managers, and line workers, growing to more than 300 during the high-workload season in the Fall.
People’s morale was another challenge I had to confront. Indeed, I knew that people’s morale was the first thing to suffer when a company faces hardships like financial strains that require unpopular decisions.
Having learned my lesson from a previous experience, I knew that I needed outside help to address the issues I was facing. Could Peter help me out?
“Yes,” he said. But I will have to follow his process and include all the employees in this exercise. I accepted.
Peter suggested a structured approach addressing the issues the company was facing.
The first step consisted of establishing a joint Employer–Employee Committee that could include other members as appropriate.
This was followed by
1. A review of the business objectives
2. The identification of human resource skill requirements to achieve business objectives
3. The identification of the employees’ present skills inventory
4. The identification of skill gaps between current and desired states
5. The development of training programs to fill in this gap
6. The establishment of a detailed action plan and budget
Although the result of this exercise was a comprehensive action plan that involved a significant contribution from both the employer and the employees, all the people involved were eager to participate in the action plan implementation and offer their respective contribution to its success.
They owned the plan. It was their doing. They wanted to make it happen.
Decisions can also be made in a cooperative way.
Lessons Learned: Employees’ Input Counts
The Employer–Employee Committee made significant progress in showing cooperative planning between management and labor. Employer–Employee Committee members demonstrated good leadership through active participation on task group subcommittees in all strategic planning areas.
The Employer–Employee Committee made significant progress on the following desirable outcomes:
1. Leveling out the employment “roller coaster”
2. Increasing full-time employment from 60 to 110 over a 9-month period
3. Noticeably improving employee morale
4. Improving communications with all employees
5. Increasing gross revenue
6. Establishing a mechanism for problem solving and decision making
7. Establishing corrective action teams
Some progress was achieved with other significant “desirable outcomes,” such as
• Reduction of the level of skepticism about the company’s management and the relations between labor and management
• Gradual progression of work flexibility and increased skill of the workforce
• Implementation of practical, constructive changes in procedures to improve productivity and workflow
• Demonstration of “ownership” of the strategic plan at all organizational levels
Involve your employees in the business decision-making process.
iNobody can be a prophet in his own land.