The first reason your business is failing (1/4)

Wait, what? How do I know your business is failing? It’s simple math, really.

Most businesses fail. You’re most probably either coming short, slowly unraveling, having a hard time keeping up, or in denial. And don’t get fooled, it doesn’t matter where your revenues, your profits, your growth, or your market shares are. Fundamentally, holistically, at the deep core of it, your business is either failing or not.

You can lie to everyone and anyone about it: your partners, your employees and your suppliers. You can also lie to your investors as well as your customers. And lie to your friends and family… (and yes, even yourself…) but in the end, it either is or it isn’t.

No matter how you pitch it, spin it, or put it. And deep down, you know. You just know.

Now, if that puts a little bit of a pit in your stomach, read on, there is hope for you. If, on the other hand, this is something your head can easily dismiss, just move on. Ignorance is bliss they say... and this article won’t do much for you, unless you’re willing to face the hard truths. This will ask you for a good bit of courage. So put on your life jacket 'cause we're about to hit some stormy weather...

A simple truth

So, for those of you who would like to change the man in the mirror (as the king of pop once put it)... Know that if you find yourself in troubled waters, the good news is you’re certainly not alone.

Here are some sobering facts. In America, about 20% of new small or medium businesses will fold within the first 2 years and 40-50% won’t make it past the 5-year mark (bls.gov). 

As far as the new frontier goes, 99% of startups don’t get funded (check out this great video by One Million by One Million). As Steve Blank puts it in his awesome article on liquidity events, of the 1% that get funded, about 5 won’t amount to much; 3 will get some kind of mild success and 1 or 2 might do well through an acquisition or by going public (steveblank.com).

That’s a LOT of sunken ships. And a whole lot of failed businesses. So, if you know you’re taking on water, if you love the learning experience of failure but would just much rather succeed, why don’t we do something about it?

Do you really want to know the first reason your business is failing? It will sound pretty simplistic but here it is: always put people first. That’s it.

But wait, what does that even mean?

Do what now?

You’ve heard it before. You’re not 100% sure what it really means but it must be something about being nice to people like employees, customers, and such. Maybe you should take care of employees so they can take care of customers type of thing? Something like that?

Essentially, something not super practical that’s not quite realistic and where the budgets just won’t make sense in the real world… right? Or some other garden variety of hippie-people-huggin'-la-la-land fairy tale that you can’t quite wrap your head around?..

Not quite.

Ok. So, what is it then?

Well, here’s one way to try and grasp how dire and essential it is to put people first and what it could mean for you.

The magic of flow

At the center of your business is a mathematical equation, an algorithm.

Your business model proposes a value to customers that translates into revenues. If your revenues are higher than your costs, you have profits. If more and more people want what you propose, you have growth. If you deliver real value in an authentic pleasing way and your customers identify with what you stand for, you have loyalty. And if you’re truly different and relevant, you have a brand and a future.

That’s a lot of moving parts. That’s a lot of different variables in the equation. And yes, most of them are greatly affected by your people. The first of those people they are affected by and the ones we'll focus on today (we can discuss the other people some other time) are your team.

Yes, it does turn out that if your people care about your business, truly and deeply, everything works better, much better. And there is a compounding effect too. We’re talking exponential difference here, not incremental.

Your team somehow works harder, they’re more engaged and they’re inspired. Your people care about the customers and care about the product. Your staff cares about each other and they also care about you and this business of yours. The product is better, work is better, customers are happier and business is doing really well.

Now, don't get me wrong. There are still tons of challenges, roadblocks and obstacles, just like any other business, but the way your people tackle each and every one of them is just amazing. People don’t always get along 'cause it’s not easy but the output is just somehow incredible...

Does that sound like something you might want to achieve?

They really do not care. And they won't either. Unless..

Do you know what I’m talking about? You’ve seen "IT" right? You’ve had at least a glimpse of it, in your business or elsewhere. How do you build that kind of flow? Where does it come from?

Are you ready to hear it? Mark my words: the only way to get your people to care about your business is if they know you care about them first. It’s the ONLY way.

They must know (not think, hear, hope…) that you truly and authentically care about them. Not them as a group, an idea or a concept. Them. Specifically. Individually. Yes, Bob in accounting, Suzie in marketing and John in the shop. Multiply that by a dozen, a few hundreds or thousands, depending on the size of your business.

But how can that possibly work? Does it mean you need to befriend your employees? No. Not really. Does it mean you have to be nice to everyone all the time? No, it does not. So what does it mean then?

Who are your people?

It means that first, you must get to know your people. Who are they? Why are they here, with you? How does this align with who they are? You need to figure out how this job makes them better, happier or truly help them reach where they want to go.

It means that on top of everything else, you need to be in the business of building people up. Hear them out and figure out who they are, who they could be and what they aspire to. What are their true talents and what makes them tick? If they don’t really know, help them figure it out.

That requires a whole lot of listening, coaching, some guidance and even a bit of counseling. You need to do it personally for anyone you manage, up or down. And all your managers need to do the same. It requires true leadership, empathy and a great deal of emotional intelligence. It will involve much compassion and enough inspiration to move mountains.

It means that moving forward, any manager in your business is taking on the leadership role of bringing the best out of people. You can’t motivate people. Motivation is intrinsic. But what you can do is inspire them.

Your managers don’t have the right stuff? Get new managers. (...more on that later)

What’s the point of your business, really?

All of that entails you must have a vision for the business. It means your values must be true and authentic. They're not some poster on a wall, a memo circulated by HR or a footnote in financial statements. Values are at the center of your organizational culture.

Culture is a big deal because it determines who fits and doesn’t fit in your business, on this mission that you’re on, to deliver this thing you promise your customers.

Culture is not what you think it is. It's really not.

How do you define your organizational culture? Doesn’t that sound kinda’ easy in theory but ends up being really hard in real life? Aren’t so many businesses, big and small, struggling with their culture?

Yes, that’s true. A lot of organizations struggle with culture because they try to fake it. And that gets real messy, real fast.

So, I’ve got the first good news for you! Yay! Culture is easy to define and easy to propagate. The culture of your organization (as Steve Gruenert and Todd Whitaker put it in School Culture Rewired ) is simply determined by the worst behaviors that leadership is willing to tolerate. That’s it. Once you look it in the face, it’s easy, really.

"The culture of any organization is shaped by the worst behavior the leader is willing to tolerate." – Gruenert & Whitaker

You want a great culture? Be it. You want to foster collaboration? Just don’t tolerate backstabbing, politicking, and isolation. You want to foster performance? Don’t tolerate mediocrity, half-fast efforts, or good enough. Good is the enemy of great. You want to foster innovation? Don’t tolerate the status quo, truly reward your critics and make sure to foster mistakes and failures. And so on and so forth… You get the idea.

It’s not that easy for to you embody the culture you want? Ah, well that’s the hard part. You can’t fake it. You need to be it. You need to accept who you are, what culture you CAN foster and how it aligns with your business. Or you can go do something else.

First. Put them first. Before second. Yes, first.

Now, once you have a vision and a great culture, how do you actually put people first? How can managers get to know their people, what they want, why they want it and what they’re good at?

Once again, good news. There is only one way. You must spend time with them. Quality time. Individually. A one on one is not something you can do every quarter or worse, once or twice a year. One on one quality time must occur at least once or twice a month, and ideally once a week, with each and every one of your employees.

If you and your managers don’t care about your people enough to check in on them once a week for a good 30 minutes (that’s focused on them, not the business), then you might as well give up.

But how can you possibly find the time for that? Make the time. Put first things first. Make it a priority, a real priority. That’s what putting people first means.

And the great news, once again, is that if you do it well, you won’t suffer the time you invest in your people. On the contrary, you will gain from it: gain in peace of mind, gain in alignment, gain in output and productivity, in revenues, profits and market shares. You will literally lift and carry your business... if you do it well.

What’s the plan? (Not yours, theirs...)

So, what are you supposed to find out about people?

Find out why they work. What are their dreams, their true talents, what makes them happy? You need to determine how this job, this company, this mission fits in their bigger picture.

If it fits, help them make the best of it. They want to do this job to learn and get a better job? Help them with that. Whether the next job is at your company or elsewhere, it doesn’t matter. If your people know you care, they will give you a good 1-2 years of their lives and that’s a really good start. Work on their plan with them.

Make sure they learn the skills they need. Build their confidence. Make sure they’re happy outside of work. Help and support them in the best way you possibly can. And a bit more. Go out of your way for them. Find out what connects them to your mission and inspire them on a weekly basis.

They might actually end up sticking around for a really long time. The first thing people leave when they quit is their manager. If they have a manager who really cares about them and makes a difference in their lives, you won’t believe what they will do for you and your business.

Do this and your people will start caring about your business. They will care about you. They will fight for you. They will stick their neck out. They will give it their best. You will create loyalty. You will reap benefits you couldn’t even possibly envision.

What if they don’t fit?

But what if some of your people don’t fit? What if they don’t fit the culture, don’t fit the vision, what if this mission you’re on doesn’t fit their plan? First of all, be creative. There must be something they can learn at their job that will truly help them grow and serve their bigger picture.

We’re talking Karate-Kid-Mr.-Miyagi here, and full on "wax on, wax off". There is often something you can learn in a job or a project that will translate well in a completely different context.

Be open minded. Use your imagination. I always mean it when I say that even if you’re in charge of mopping the floor, we can approach it in a way that will teach you about product management, business management, marketing or whatever else you want to learn. Anything can become rich and nuanced when you actually care and take it all in.

If there is just really no fit, have the courage to work on it with your people. Express it to them and try to find solutions. If it’s something they can work on or improve, make a real plan to work on it with them. Agree with them on a realistic deadline. Maybe they need to start talking to more customers and you will work on it with them for 90 days, as an example.

Be in agreement that this is an ultimate test to see if this role, this job, this company, this mission is for them, or not. If it isn’t, then the truth is that they will be happier elsewhere. So, make a plan to help them with that.

There is a very empathetic and compassionate way to build up your people or let them go when you must. If you’re fair and just, if you really try hard and give people their best shot at it, they will thank you for it. Build them up no matter what. Help them succeed in your business or help them be on their way. Leadership is about bringing the best out of people, remember?

What if the team is just not cutting it?

And this brings us to the next sensitive topic. What if you have to let go of a team, a whole division or a large group of people? Putting your people first means being honest with them throughout. If the company is in a bit of trouble, let them know what needs to happen to get out of trouble. Make it a goal.

And be truthful about the consequences. This is what we must achieve. We must, or we will have to let some people go, close the business, ramp down a product… whatever the consequences may be. Be truthful.

It doesn’t mean you can’t use good storytelling, great leadership and sound psychology to make it palatable. Help people grasp the truth. Businesses are competitive. It’s not a fairy tale. There are imperatives, constraints, and impediments. Share as much of the truth as you can.

If a person, a team, or a division is at risk, they should know about it. No one should ever get fired or laid off as a surprise. No one. Ever. I’ve had to personally let go of over 300 employees in my career and it never came as a surprise. Never. It was most always welcome and most of my people thanked me through the process.

Put your people first.

Yes, it takes courage. It takes guts and grit. It requires tact and true leadership. But it pays off. Nothing will build your business like building your people up. Constantly and relentlessly.

You will attract better talent, you will retain people longer, they will care about your business more and your people will be loyal for a very long time, even long after your business is gone.

It’s a great way to sleep much better at night, it’s a great way to deliver true value and it’s a solid way to improve your bottom-line.

Now, get up, and go talk to one of your people. You’ve got to start somewhere… :)

Can you succeed in business without putting people first? Of course, you can. Many do. You can also put out a fire by carrying a bucket with holes in it. You can get to shore on a boat that takes on water. And you can swim with your boots on. You don't absolutely have to put people first. Things just gets that much more rewarding, efficient and optimal when you do. It builds resilience in your business and creates a fertile environment. It's simply the difference between a vision of abundance and a vision of scarcity.

Let me know how it goes. We’re always happy to help. Whether it’s free advice, comforting thoughts, consulting or a full transformation program, just drop me a line. We’re always happy to find out about your business and your people…

• www.nikleger.com

Take Richard Branson's challenge and put your people first:

• The Virgin Pulse Global Challenge

Wanna hear from the two guys at Corporate Rebels who visited the world's 50 most inspiring companies?

• Why The-Command-and-Control Mindset is Killing Your Company

If you want other great tips on putting people first, check out any of those awesome posts by Liz Ryan:

• Employee Ranking
• Interview Culture
• Screening out best candidates

And if you can't help but go down the rabbit hole, check out the next articles in the series:

• The Second Reason your Business is Failing (2/4)
• The Third Reason your Business is Failing (3/4)
• The Fourth Reason your Business is Failing (4/4)

If you want to explore how to put the other people first too:

• This is what happens when you don't put the other people first...