An arch consists of two weaknesses which, leaning on each other, become a strength.

Leonardo da Vinci

I spoke at a business event a while back. At the end of the speech, a man got up and asked me a question: ‘What are the top three most important elements in running a business?' he asked.

‘People, people, people,' I said.

He thought I was joking, but I wasn't. That advice doesn't make for good ‘copy' or a shareable meme on social media, but ignore it at your peril. Whether you're a one-person band or a multinational, if you don't focus on your people, you're cactus, and when I say ‘people', I don't just mean staff: I mean suppliers, customers and everyone else in the supply chain.

How to build a loyal team

I have over 350 staff on my team, and a lot of them have been with me for more than 20 years. That's loyalty. They've been with me from the get-go when funds were low and debt was high and we all had to pitch in and dig deep to make the bloody thing work. I've had fights, fires and floods, even deaths in my pubs, and yet my team have stuck with me through thick and thin. I've learned a few things along the way on how to hire (and keep) good staff. If you're about to hire staff and don't want to make a mistake, take a look at some of the strategies I've used that have worked well for me.

But first, before you hire anyone, it's worth discovering how much your staff are really costing you. I mean really costing you. It's probably more than you think.

Hire slow, fire fast

You don't need me to tell you that hiring staff is one of the riskiest and most expensive aspects of running a business. A bad ‘hire' can go so wrong so easily and break a business.

The old phrase, ‘Hire in haste, regret at leisure' is true. I take my time when hiring as the cost of getting it wrong is enormous. It goes without saying that hiring people with the same values as you is critical to success. People don't always wear their values on their sleeve, which makes it hard to see what makes people tick; first impressions aren't always right and what people say at an interview and what they do when they get the job are often two very different things.

When hiring new staff, especially for important roles, I conduct multiple interviews with applicants before I offer them a job and ask them a wide range of questions (not necessarily related to the job at hand) before I make a decision.

Very few job interview processes, tests or quizzes can truly reveal a person's character. Having a meal with them can. Breaking bread at a dinner table is one of the most fruitful environments for revealing the underlying nature of a person. This may seem superficial or flippant, but I learn a lot from the experience.

I've developed a process over the years for how to interview people. I call it the LOAN process. It's pretty simple but powerful at the same time. I simply:

• Listen to what's being said (without interrupting)
• Observe what's going on (watching for both verbal and non-verbal language)
• Ask lots of questions (without making assumptions or judgements)
• Note it all down (for review and reflection later on).

I apply that process when I'm having a meal with them. Here's what I observe during the meal:

• I watch their actions.
• I watch their interactions.
• I watch what they order.

Let me expand on this.

Don't hire rock stars

I've hired a few ‘rock star' employees in my time. You know the sort: good looking, charming, persuasive. They dazzle everyone with their aura of glamour and, for a while, everything is sweet. But then everyone gets used to them and their beauty premium wears off and we're left with nothing but their work ethic, personality and values — and that's when their real character emerges. When you're born beautiful, or charming, you get given a lot without having to work for it, which can breed laziness and a sense of entitlement. Not always of course, but sometimes.

This work ethic shows up in the little things. For example, they take a smoko when the bar is going nuts and the barman could do with an extra hand; they don't pick up the crayons in the kids' play area because, technically, ‘it's not their job'; they arrive a few minutes late and leave a few minutes early, and give the bare minimum in notice if they're sick, which they are — often.

Then, after a few months of hard(ly) working, when their true nature has been noticed by others (and seen as wanting), they slide off into the sunset, ready to drizzle their glitter on the next unsuspecting employer who'll be bedazzled by their beauty and charm. But the damage they do to the team doesn't leave with them. The remaining team is left unsettled, their loyalties have been tested and the experience has brought out the worst in everyone.

Be wary of hiring rock stars.

Check references

This sounds obvious, but you’d be amazed at how few employers read resumes thoroughly or ask to speak to referees. If you’re to minimise the risk of making a bad hire, you must do all that. Hiring the wrong staff is just too costly and a simple referee check can give you the information needed to make a wise decision.

One strategy that has served me well over the years is I take a moment to look for the gaps on their resume and ask them what they were doing in that time. The candidate left those gaps for a reason and you will want to know what they were doing in those ‘gap years’. That will tell you as much as the rest of the resume. I like to give interviewees the chance to tell me what really happened at their last workplace. I want them to feel comfortable knowing that I don’t automatically take the side of an employer. On the occasion I’ve been able to talk to their last employer, I’ve come away thinking: ‘Yeah, if I worked for them, I would have resigned too’.

How to keep staff

Now you've found good staff, you want to keep them. That requires effort. Good staff will always be head hunted so you need to be on your A-game to ensure they stay loyal to you.

Firstly, get them involved in your decision-making process so they understand the ‘why' behind your thinking. Ask for their advice, listen to what they suggest, take it seriously and provide them with the resources they need to get the job done. More importantly, agree on the outcome you're seeking, and let them achieve it in their own way. When your team are clear on the ‘what' and the ‘why', they will take care of the ‘how' and deliver you a result that far exceeds what you could have expected if you'd told them how to do it.

Sharing the success

I often get asked how I keep my staff so loyal. I work at it, but there are some basic strategies you can implement that make it easier to achieve. For example, when I hired Ricci-lee, my Marketing and Operations Manager, I offered her a share in the business via the framework known as the Employee Share Options Program (ESOP). I don't offer it to everybody on the team, obviously, but when I find good staff who have a role to play in the oversight of the entire portfolio, it makes sense to incentivise them to work hard and stay loyal.

Developing an intrapreneurial culture

If you wandered into one of my pubs, you'd find a diverse group of people running it. You'd see a mighty Pacific Islander on the door, a mum-of-three managing the café, a tattooed hipster making coffee and a pot-bellied ex-policeman pouring beers in the bar. I like hiring people who are wildly different from me. It keeps things interesting, opens my mind and forces me to consider multiple points of view. It also pays off in unexpected but profitable ways.

The nature of pub life is that it attracts seasonal (and diverse) workers so we have to work hard to keep our staff happy. Helping them achieve their goals under our roof benefits us both.

When ability doesn't match ambition

We've all been there. Placed a staff member in the wrong role and lived to regret it. I did it not that long ago. A valued team member, Callum, had designs on being in a senior management role. He had worked for me for two years, was a good team player and had expressed interest in taking on new responsibilities. I'm always keen to elevate ambitious staff, so when a role as Chief Experience Officer came up in one of my pubs, I gave him the role. I paid for him and his family to be transferred to the new location, set them up in a house and he got to work. His job was to train new staff, introduce new products into the venues, work with the licensees to show them how to implement the new products and inspire the customers to try those new products.

Within a few weeks, cracks appeared in the surface: he didn't respond to emails quickly, he'd bring his kids into the office (and they'd stay there all day), basic reporting didn't get done and he became stressed and struggled to manage the demands of the role. I found this out through a combination of sources: other staff, customers and our performance appraisal (a series of conversations and a survey), which is thankfully very robust, and from that a fairly well-rounded view emerged. The upshot? Callum was not up to the task. He was attracted to the thought of the role, but he just didn't have the knowledge or skill to do it.

I take responsibility for Callum not working out. The irony was he was hired to train staff on our new customer service systems and procedures, but the reality was we didn't provide him with the training he needed to do it. We moved him into the role too quickly, and while we surrounded him with the tools needed to do the work, he didn't have the training or competencies to use those tools.

We moved Callum back to one of our other pubs, he returned to his old role and he was happy. He tried, we tried, but the experiment didn't work out.

What we did do well was act quickly. Once we realised it wasn't working out, we took immediate action to ensure the situation was resolved so that further collateral damage to the pub, the profitability and the brand was minimised.

Be slow to criticise and quick to praise

If you aren't happy with a staff member, a supplier or any other stakeholder, don't wait until you're about to sack them or move them on to tell them. Give them short, sharp feedback as quickly as possible and watch to see if the behaviour improves. If it doesn't, you've got your answer, but at least you gave them the chance to correct their ways.

I had an accountancy firm that had been doing great work for me, but as their business grew, the service we received diminished. I gave them feedback and was quite clear about what was lacking but after a few weeks, the service remained unchanged. They were expensive and generally good at what they did, but the time had come to find a new supplier who would give us the rolled gold standard we were paying for and deserved, so I decided to move on and choose a new firm to work with. Interestingly, our new provider not only dedicated a team to our business but was also cheaper than the old one. I've learned over the years that price is not always indicative of quality, so don't get swayed into believing that more expensive equals better.

Similarly, if someone is doing a great job, tell them quickly and often. I recall working for a large club operator. I felt like I wasn't making an impact or getting advanced as quickly as I had hoped. When I was head-hunted for a new role, I took it, gave notice and asked for a reference. My boss agreed to write one, and it was glowing! I had no idea he held me in such high esteem. If I had known what he really thought of me, I might not have left.

Reinvesting in your team

Just as properties need to be maintained and updated, so too do your people. We work hard to keep our staff happy and loyal. Here's how we do it.