“the role of an executive (business owner) is the future, but that is not possible until you have a reliable and consistent today”
Before we begin some thoughts. I am reluctant to overly structure a startup because there are too few resources attempting to do everything. That is usually an issue of priorities and a willingness to live with some disorder and uncompleted tasks. However, at some point, that owner mindset leads to more dysfunction than results.
You wind up with many simultaneous tasks with no firm process to reference, leading to several people working on the same effort while critical tasks await action. The executive has little to review for progress or results, making it subject to opinion or the last conversation. Also, it places the owner in the position of traffic cop, providing daily direction to employees. This makes it more difficult to bring order out of chaos daily and kills employee initiative – “I await orders”. Under-resourced organizations cannot afford it and make it difficult to hold people accountable.
Where to start? I offer the following as a model we have used for many years called the ‘work molecule’. Starting at the essence of work and working our way up the ladder, I will focus on the first four elements necessary for accountability.
The Work Molecule
- Mapped processes and metrics – right first time at lowest cost, measuring progress and results
- Job fit – right people in right roles for them
- Mastery – training/development of knowledge and skills for competence
- Leadership & Management – how people are being led, and the work managed
- Culture – fits within your cultural specifications (vision, mission, values)
This is where role clarity starts and the focus is on their work. We cannot talk about line of sight to business objectives (in the last article) until we specify the job.
Mapping the Process is simply creating a visual of the workflow. Once all the steps are obvious, the next move is to look for inefficiencies while not sacrificing quality. This allows for the development of SOPs – Standard Operating Procedures to ensure reliable and consistent performance. The added benefit is each step of a SOP shows who is responsible, making writing position descriptions easier and accurate.
When you look at Job Fit, this is nothing more than matching the job to the person. Do the demands of the job fit their personal strengths and weaknesses? This is not about knowledge and skills, it is about the type of physical and mental demands placed on the role.
Mastery is the investment of time and sometimes money into developing those individuals into masters of job demands. If I want people aggressively meeting their responsibilities, then they need clarity on what is required and the ability to successfully get it done.
The last element of the molecule is how people Led and the work Managed. Think about the situation an owner / executive now finds themselves in; people have clarity on what is expected, it fits what they can do, and they have the skills to carry it out. Holding people accountable is a matter of leadership and not exclusively negative.
Line of Sight to Business Objectives
Now we can tackle the big issue, doing the assigned job is only 50% of running a successful operation. Taking it to the next level is getting everyone into the great game of business. Employees doing their job only matters if it is helping the business meet its objectives.
This poses an interesting question to the owner / executive – do you have a business plan detailed enough to share? Is it broken down into quarters or months so there are immediate bogeys? Your job is to break it down, so every position has some part of those goals and objectives as part of their job. We start with including yearly goals and objectives in all the position descriptions. This needs to be supported by frequent company-wide communications and meetings about business performance and their contribution. This touches many aspects for running the business, like scheduled feedback meetings and impact on compensation.
We have used a general rule to make this work that some percentage of an employee’s total compensation is variable depending on their ability to affect the numbers. This is not a bridge too far. We do it all the time for sales, so let’s carry that mindset to everyone in the company. People working in the production of things or the delivery services would receive additional compensation for impact on margins (found money). Back office employees would be tethered to lowering costs (more found money). Ultimately to get additional performance is to pay for it, so use found money from improvements to reward contribution.
If you have not investigated the concept of a ‘Balanced Scorecard’, time to give it a look. It is based on the well founded concept that profit is not a cause of anything but an effect. Profitability results from operations, customers, and people. Using the mapping approach discussed earlier will help define operational measures. The remaining task is measuring customers and people.
Measuring Customers. I suspect you have many of those metrics in place. Starting with Marketing, you have two goals and one is measurable. First goal of marketing is to establish brand presence in the market so you are part of the buying decision. This is hard to capture and usually treated as an act of faith. The second goal is to bring qualified leads into the sales funnel and is definitely measurable. Next are Sales and that is covered in metrics like time in the funnel, close rates, and average sale price. If you have a CRM system, all the metrics are there. The last part of measuring customers is Service, and this focuses on delivery on promise and how well do you recover when the promise is not met.
Our last metric is People. You have the traditional negative metrics like turnover, accidents, and sick days. But with having SOPs and Position Descriptions in place, you have a variety of metrics to measure over time. Since we are covering Line of Sight in this section, this is a good place to start.
Recognition & Rewards
Recognition is the informal part of the process where people or teams are singled out for contribution to the business, their departments, and work groups. A little praise goes a long way and it will get you down the road.However…
Rewards are the formal element of the process and long lasting if financial rewards are conditional on performance. Many times we have used pay raises as a reward — and it is — but understand after a few pay periods, performance will drop back to pre-raise levels. Our experience with pay raises is an effective reward for mastering more skills, cross-training, etc. Pay4Performance is the best way to provide the bang for the buck and should remain variable based on business performance.
Next Article: Feedback on Results – The Breakfast of Champions
William Eastman is a result focused Entrepreneur, Consultant, Advisor, and Thought Leader with over 40 years in the business. That includes training, consulting, and management experience working with leaders in manufacturing, pharmaceuticals, software, hospitality, higher education, and online services. His areas of expertise include leadership, team building, coaching & mentoring, organizational design & change, business development, HR solutions, strategic planning, global strategy, startups, and M&A. His weekly radio show, Real Help Wanted: Building an All-In Workforce, airs on BizTalkRadio on Monday 7pm ET and Saturday at 1pm ET.