Confessions of a SERIAL Entrepreneur - Ch.9 Unleashing Your People Power

In this chapter I touch on how your people process can have a massive impact on the performance of your business.

GROWTH Profit-Driver No.9. Your PEOPLE PROCESS

Aaaah… PEOPLE..!

Can’t live with them.. can’t survive without them!

PEOPLE are the brains behind every facet of your business.

They are responsible for innovating, creating and managing almost all of your business profit-drivers.

Ask any successful business leader what the primary driver of his or her business is, and they will say: ‘..our PEOPLE..!’

Ask any beleaguered business owners and managers where they believe their biggest problems lie, and they will say: ‘..our PEOPLE..!’

The simple truth in business is that your PEOPLE will either stimulate significant profits in your business… or, incur crippling costs.

Your PEOPLE will make you or break you!

The question is, do you and your PEOPLE know which side of the equation they are contributing to in your business, and are you and they happy about this contribution?

And, if not, what are you going to do about the situation?

You see, business leaders are instinctively aware that their people are the very core of their business, which is why business spends a fortune on hiring specialists in motivation, education and training for their people.

But does it work?

No!

World-leading consulting guru, personal friend, and business associate – Tom Lambert – Chairman of the International Centre for Consulting Excellence and author of 10 best-selling business-books, including the industry standard - ‘High Income Consulting’ – asks CEO’s and MD’s this simple question:

‘How much did you waste on training last year?’

Explains Tom: ‘The simple fact is that reliable research shows that training that delivers an acceptable business return on the investment is as rare as hens teeth.’

Tom quotes the work of Bruce Joyce of the University of Columbia, New York who showed: ‘Through careful detailed analysis.. that of the content of any training program, the average that is transferred to the workplace and applied is a meagre <5% to 13% according to the methodology used’.

Tom expands on the apparently hopeless inadequacy of most training attempts in business: ‘A study by Xerox showed that of that scanty transfer 87% is lost within 12 weeks if learning is unsupported. Putting that into financial ROI for the average training program, it is a little under 2%’.

Bear in mind that Tom’s business is.. ‘Training’!

Is he nuts?

No!

As a world-leading business consulting guru, not for nothing is he known by the world’s media as ‘the consultants, consultant’ and ‘the world’s friendliest guru’.

Tom recognizes what I know from many years in business: Training works… if you make it work!

To me, Tom’s success comes from identifying that training can be a powerful tool when you provide your people with specific objectives – a clear focus for their work process within the business strategy – and making them personally accountable for implementing their systems and activities in partnership with their peers.

Concludes Tom: ‘If you treble the revenues and profits of a firm within a year through training.. the price is a small one to pay’.

A simple clue for any business leader looking to increase their business income potential.. provide the right training for your people and PROFIT.

But, how do you get to know what is the right training to apply in your business?

Simple.. you don’t!

In all my years of analyzing business I have made one simple observation:

It is much easier to see the problems in someone else’s business or department than in your own.

Any business consultant worth their salt will tell you that they can almost identify the cause of most business problems within a matter of hours, simply by observing people in the business and asking the simplest of questions.

Why is this?

Why is the business-leader, the business-owner, the departmental manager et al not able to see where potential problems may lie in their business as quickly as an outsider, and therefore apply possible solutions to improve their productivity and profit?

It is all to do with emotions, egos, internal politics, perceptions, relationships.. all the little cultures and irritating people things that build up internally in a business over a period of time.

How do you question the process created by the one who hired you.. without fearing for your job?

How do you fire the employee you hired without being embarrassed over your selection process?

How do you expose the debilitating shortcomings of your office colleague without being accused of stabbing them in the back?

The outsider has none of this internal baggage when making their observations.

As an independent business consultant I have never been too shy to ask:

Why do those two customer service representatives sit behind their desks talking about the movies when the phone has been ringing for over a minute?

Why does your receptionist keep answering the phones without acknowledging the presence of visitors at the counter?

Why does your credit control department have so many piles of unkempt paperwork on their desks with a debtors book running to over 120-days?

Why does your sales team spend so much of their day behind their desks?

Why does your office staff park in the front of the building, forcing your visitors to park outside?

Why do your people not talk to each other without raising their voices and complaining about individuals and flaws in the system?

All are examples of simple observations that can be seen by the outsider, and all clear symptoms of a variety of potential business problems.

Yet, it is almost impossible for someone within the business to see, because they have become accustomed to the internal cultures and practices within the business.

That’s why independent business consultants have an important role to play in unveiling potential solutions to most business challenges.

Most certainly, the great consultants don’t have the same emotional baggage at play around the process of their client’s business.

The great consultants are not afraid to ask the critical questions, such as:

Are these expenses necessary?

What return do you get for your money spent?

What is your ROI (Return On Investment)?

Do you know what percentage profits you are making compared to the capital employed in your business – your ROA (Return On Assets)?

Do you use the ROAM model (Return On Assets Managed) to sweat your assets?

What are your average Debtor Days?

What can you be doing differently in your area of management?

These are the questions that thrill professional business consultants.

They love to help their clients make more profits, and they know that the simplest way to do that is to measure for results and keep score of critical ratios and percentages as internal and external yardsticks.

Again, let me remind you that no two businesses are ever the same, and therefore measurements need to be developed that are unique and meaningful to your business.

What should you be looking for?

Look for alternative ways to reduce costs, unnecessary expenses, inventory stockpiles, and unproductive people or machinery downtime.

Look for ways to increase productivity, performance and sales.

The unique numbers and combinations that make up a business never cease to amaze me.

Never being a master at maths, I still marvel at the fact that a simple 20% increase in training plus a 10% increase in production plus a 15% increase in sales activity plus a 25% increase in sales plus a 10% reduction in costs can lead to a 200% increase in profits (20+10+15+25+10=200).

Lest my old maths teacher sets out to find me to rap me over the knuckles again, it is clearly the MULTIPLIER effect of all these little improvements in the different areas of your business that can lead to massive profits.

There are literally dozens, if not hundreds, of different areas that you can focus on to deliver increased bottom-line profit to your business.

That’s what makes business fun!

Your PEOPLE should be aware of how their individual performances impacts these numbers and for what measure they are personally accountable.

That’s where independent business consultants are indispensable for analyzing and recommending quality training to suit your unique business needs, and to make it fun and productive for your people.

But perhaps the most important observation I can offer on the PEOPLE PROCESS is to suggest that, just as no two businesses and their problems are ever the same, so too are no two people and their life circumstances ever the same.

Each and every person you will ever meet and employ in your business.. is UNIQUE!

And they each come from a background of past and current circumstances in their lives that make their future actions impossible to predict.

In my experience, there is nothing more complex than the individual human being.

Throw two of them together and you have a myriad of complexities that can arise.

As you add more people to the mix, the potential complexities multiply exponentially until you have the powerful destructive force of a tsunami, hurricane, tornado and lightning storm.. all rolled into one!

Harness this wild force into positive, passionate, focused action and nothing will stop your business growing. 

The biggest challenge for business leaders is that you just never know how different people will react or respond to any given situation.

Sometimes the only way to find out is to throw them in at the deep-end to see whether they sink or swim.

Oh boy.. I can just sense all the HR specialists and college professors throwing their hands up in despair at my gall. 

I just tell it as I see it.

I’ve been there, done that and got thousands of well-worn T-shirts!

So, here’s a simple secret that can have a massive impact on your business profits:

Find a way to throw your people into the water to test them BEFORE you employ them.

Take a cue from the reality program ‘The Apprentice’, featuring Donald Trump.

Find people who want to IMPRESS you!

It’s all about finding positive, passionate people who are truly optimistic and who believe totally in their capabilities.

Such people are not looking for jobs, they are looking to grow and experience life with a desire to make a positive impact in whatever they do.. no matter what their function is to be in your business.

These people openly demonstrate the characteristics of leaders, they come with a track record of achievement, no matter how small, that they are justifiably proud of.

They have a positive self-expectancy and have no problem accepting a challenge to show what they are made of.

Clearly what I am suggesting is that the people process in any business is very much an inexact science. People are the great-unknown factor.

This brings the concept of LEADERSHIP to the fore.

My thinking on LEADERSHIP is based very much on practical personal experience, and is a hybrid of the works of many management gurus that I have had the pleasure of reading.

I find myself somewhere in the middle of the Hersey & Blanchard Situational Leadership model, Steven Covey’s Principled Leadership value-driven model, Tom Peter’s ‘Pursuit of WOW’ proposals, and Zig Ziglar’s discussions on WIIFM (What’s In It For Me) in ‘See You At The Top’.

Before I illustrate just how flexible a business leader has to be, I continue to highlight my opinion that almost every situation one encounters in business is unique, and it almost always has something to do with the people in that situation.

Sometimes I find that people in business are just not ready or mature enough in their own personal growth and business development to take responsibility and accountability for creating WOW Projects in the Tom Peters mode.

That’s when I find myself reverting back naturally to the Hersey and Blanchard Situational Leadership model.

The trick in this model is to find the correct balance between applying necessary supervision to match the employee’s skill and knowledge level, with that of allowing the correct level of support and encouragement for the employee to take personal responsibility and accountability for making things happen.

Back in the mid-‘80’s, when I was building the Academy of Learning into the largest education franchise in Southern Africa, I was working with fresh varsity grads and over 40 new business entrepreneurs who had paid a small fortune (from their perspective) to follow our business system in their franchise areas.

Whilst my own objectives centered around designing a WOW business project (as later described by Tom Peter’s in the latter ‘90’s), I found myself having to begin by carefully DIRECTING staff and franchisee behaviors by laying down fairly strict, but simple, franchise systems, rules and regulations.

My fresh, young varsity grads were given on-the-job COACHING in implementing these systems, and they were impressive in learning on-the-job by themselves as they coached the franchisees in these simple systems needed to run a profitable business franchise.

There is no better way to learn than by doing.

Before long our franchisees were experiencing nothing less than a 5- to 10-fold increase in monthly profits, and more.

The franchisees thought that our varsity grads were geniuses!

As soon as we could see that our franchise business system was being implemented in practice (within the first 3 to 6 months), we were able to step back into developing a SUPPORTING & DELEGATING role for our head office function.

We developed daily contact routines, weekly stats & analysis feedback reports, monthly newsletters, quarterly franchise get-togethers, and the mother of all annual conferences.

In the year of selling out my holding and management control to a JSE-listed company, our brand was recognized as one of the leading franchise brands in the country, with one of our new operators scooping the franchisee of the year award in the early ‘90’s for profitably applying our systems.

As an example of a very different experience in leadership styles, in 2000 I initiated what has now come to be feted as the most successful open community security initiative in South Africa – a project today valued at over R70 million and growing (Ed’s note: by 2019, having re-directed over R1 billion in security spend through the community security project).

Given no hope of success by the doomsayers, I had to bring together an apathetic, fearful community of homeowners who were being terrorized into submission by AK-47 gun-toting criminal gangs.

I developed my own version of Tom Peter’s WOW project, turning it into a personal, passionate, purpose-driven objective that I would not allow to fail.

My simple motto was, we are going to draw a line in the sand that evil criminal elements will not dare to cross.. you either join me to lead, follow, or get out of the way.

Tom Peters is 100% right when he says: ‘..if your project is genuinely a Wow Project, don't doubt that you'll have enemies. (Project axiom: Anything worth doing makes the establishment mad.)’

I made some people pretty mad!

However, within 3 months we had almost totally eradicated violent crime in our community, implemented an incredible, innovative security solution never-before-achieved in an open community in South Africa, and witnessed a dramatic jump in our property prices.

But, I could not have achieved this without getting the WIIFM (What’s In It For Me) buy-in of the majority of residents. So I had to lace my own WOW project ideals with a strategy that would sell them on the benefits of working together in a mass-consumerism project that is now into its fifth year.

That’s a full story in itself.

It worked!

A different project, an innovative approach, massive effort.. another successful outcome.

In essence, I believe that the success of your business, your department, your project, will depend on the LEADERSHIP example you set for your people.

Your success will depend on how you INSPIRE your people to give of their best.

They in turn will display leadership qualities of their own to those under their management and to the conduct of themselves in your business.

In my talks around the country I make an impassioned plea wherever I go, which has this message:

‘Yes, what our country is desperately in need of is.. Leadership.

‘True leadership!

‘Leadership at all levels of our society.

‘Leadership that recognizes that talk is cheap, and that actions speak much louder than words.

‘Leadership that recognizes that we are living in a world of transformation, a world of change, a world where people want to be treated like human beings.

‘Leadership that does not seek to dominate others.

‘Leadership that recognizes that true power and respect comes only from making a difference in people’s lives. Not by ruining people’s lives.

‘True leadership seeks to make a difference without ruining other people’s lives!

‘So, what is this thing called leadership?’

In seminars I go on to discuss what I believe to be some of the important characteristics of LEADERSHIP, being : 

1. Leaders consider their own priorities first and foremost

2. Leaders consider the priorities and dreams of others

3. Leaders create a clear vision and purpose for like-minded people

4. Leaders are innovative, creative and persistent

5. Leaders are immune to criticism, crisis, rejection and failure

6. Leaders maintain a sense of stability and security

7. Leaders are optimistic about the future

8. Leaders take responsibility

9. Leaders develop plans, set goals, and actually work them

Leaders are often the most complex of all people, filled with all manner of paradoxical quirks and behaviors, and the most successful seem to recognize and respect these same complexities in others.

Leaders recognize their power of influence and almost always lead the way in taking action to make things happen.

The secret then to getting people to take action in business is to get them to take personal leadership over their process in the business.

In my next chapter I will touch on Profit-Driver No. 10 - Your CAPITAL RESOURCES and how you can uncover an abundance of possibilities by building your knowledge base in this area of business.

www.dhirubhai.net/pulse/confessions-serial-entrepreneur-ch10-capital-abundance-trevor-nel/

Regards

Trevor

Trevor Nel

CEO

FOURWAYS Community Chamber of Commerce

[email protected]

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www.fourwayscommunitychamber.co.za/

SMS/WhatsApp: 084 332-4421

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