Many of you small business owners might be blissfully unaware that the deadline for the submission of employment equity reports is the 1st October.

Generally speaking, this only applies to businesses that employ more than 50 people, and even then, if your employment numbers are less than 150, you will only be required to submit these reports every two years – but also on the 1st October.

However – in some cases, the employment number criteria to qualify your business as a ‘designated employer’ for this purpose, can be irrelevant if your annual turnover is greater than certain minimum limits, dependent on the industry which you’re in. For example, if your business is in the agriculture industry, and your annual turnover is greater than R2m per annum, and you only employ 10 people, then you will have to submit one of these reports.

If you’ve started a business within the past year, and you qualify as a designated employer, then you are also required to submit your first report between 6 and 12 months after commencement of the business.

Why the alert? Well, the government has imposed very stiff fines if the reports are not received when due – starting at R500,000 for the first offence!

If you want to know whether your business qualifies –and you could be in hot water – then contact our offices as soon as possible.

In the last newsletter, I explained all about the fully engaged customer, with a sample from the internet based business known as Zappos.  In this newsletter, I’ll continue with the levels of engagement – as categorised by the Gallup Organisation, but to maintain continuity, I’ll repeat the ‘fully engaged’ category.   (In the book “Follow this Path” by Curt Coffman & Gabriel Gonzalez-Molina)

FULLY ENGAGED CUSTOMERS:

These customers are

• Responsive – this means that they pay their bills promptly;
• Positive – they show a consistent pattern of effective use of your business’s service infrastructure because they learn about your business, and they are willing to try any new products and services, that you may provide.
• Listeners – They are most likely to welcome any of your innovations and try new products and brand extensions.
• Fair – They are least likely to submit unreasonable restitution claims.
• Sustainable – They value long-term relationships with their brands and provider organisations – your business, as their supplier of choice.

A fully engaged customer sounds something like this:

“I thought that buying things was something that we just had to do, something to satisfy our basic needs.  But in the course of getting to know your products and being in contact with your organization I have learned that I can enjoy being your customer.  You have made me feel important and valuable; I can always count on you. I often ask myself this question: “Why didn’t I contact you before?”  You are not only the best there is – the way you make me feel as a customer is truly legendary.” (“Follow this Path” – emphasis – mine.)

ENGAGED CUSTOMERS:

These customers:

• Collectively represent 20 to 25 percent of a company’s customers.  This group also includes customers who contribute a lot of their business but have not allocated the greatest proportion of their business to a single organisation.
• Are sensitive to improvements in products as well as pricing policies.
• Represent primary targets for products and may expand into additional services if a stronger emotional bond is formed.

An engaged customer sounds like this:

“I’ve flown with you a hundred times in the last year.  I’m supposed to be a Gold Card member with you and yet I ask myself this question:  “Did you see how badly the check-in clerk treated me?”  Actually I don’t think she discriminates among passengers.  She just treats everyone badly.” (“Follow this Path”: Curt Coffman & Gabriel Gonzalez-Molina.)

THE NOT-ENGAGED CUSTOMER.

These customers:

• Reveal a pattern of relative indifference to the current engagement capabilities of a brand or an organisation.
• Are inattentive and unresponsive to additional products or offers due to low purchase levels and usage of brands and products, or because of poor or non-existent levels of personal interaction with the organisation’s service infrastructure.

The not-engaged customer can sound like this:

“It doesn’t matter to me where I go to buy what I need, as long as the price is good and the place is nearby.  I pride myself on being a good shopper and searching out bargains.  Every store has them; it’s just a matter of finding them.  When I do, I get a whole lot of satisfaction.  As far as sticking with one store goes, why should I?” (“Follow this Path”: Curt Coffman & Gabriel Gonzalez-Molina.)

THE ACTIVELY DISENGAGED CUSTOMER:

These customers:

• Account for the largest per customer service costs.
• Are resentful and will take advantage of any opportunity at their disposal to cause you harm, either directly or indirectly.
• Are resistant to any attempt by your employees to switch from a negative perspective, into a positive, restorative mood.
• Are very unprofitable when one combines the relatively high costs with usually lower levels of revenue.
• Are very hard to turn around.  It requires a significant effort or improvement in the experience to engage them, and many never become engaged.

The actively-disengaged customer sounds like this:

“This company is out to get as much as they can from customers; they mark up merchandise and then run “sales” to try to convince people they’re getting bargains.  I take pleasure out of pointing out to them that lower prices are available elsewhere, just to show them how wise I am to their tricks.  And I never think twice about complaining if the service or product isn’t up to par, which they usually aren’t.  You want to know why?  I hate these guys.  I won’t let my friends ever shop there.” (“Follow this Path”: Curt Coffman & Gabriel Gonzalez-Molina.)

Believe it or not – these guys actually exist!  Actively disengaged customers can be real trouble, and especially when you realise that as much as 20% of your customers may be in this category!

Remember, you don’t have to survey your customers to establish which category they fall into; you just have to know how engaged your employees are!  That will tell you all about your customers!

Research internationally has revealed that the scary thing about all this is the fact that almost half your work force will probably fall into the ‘engaged’ and ‘not-engaged’ category; and – when you add this to the ‘actively-disengaged’ category – it means there’s a huge opportunity for improvement.

The good news is that something can be done about it!

Up to now, we’ve had a good look at a few basic, but absolutely essential aspects of a business that you, as the business owner, simply have to manage on a daily basis.  So far we’ve covered:

• Cash flow – because this is where reality bites!
• Being able to monitor your trading performance, through a simple but efficient business intelligence system
• Hiring, keeping and motivating good staff

Now we’re going have a look at the area that, for me, is probably the most important of the lot.  And it’s quite simple really – without customers you don’t have a business and the rest is of no consequence!

CUSTOMER SERVICE

 The latest terminology in this regard is “Customer Relationship Management” or CRM.  The market abounds with new software to make this task easier, but it doesn’t come cheap – especially for small business.

There are also hundreds of books on the market about marketing and customer service, – most of which will contain much more specific advice on the concept than I could hope to cover in a few short pages.   However, I do want to address a few basic aspects that I believe most small businesses tend to overlook, – aspects which I believe are vital to the health of a business (and particularly those businesses in distress), and which should not be under-estimated by management. 

These aspects can all be included under the heading of “engaging” your customers.  The Gallup surveys revealed one important relationship – there was a direct correlation between the level of engagement of employees and the level of engagement of customers!

So, – as much as you want to be engaging your employees, you want to be engaging your customers.  If you don’t get the first one right, you can forget about the second one!

To explain this in more detail, lets have a look at the categories of customer engagement as defined by the Gallup Organisation: (in the book “Follow this Path”by Curt Coffman & Gabriel Gonzalez-Molina)

FULLY ENGAGED CUSTOMERS:

These customers are:

• Responsive – this means that they pay their bills promptly;
• Positive – they show a consistent pattern of effective use of your business’s service infrastructure because they learn about your business, and they are willing to try any new products and services, that you may provide.
• Listeners – They are most likely to welcome any of your innovations and try new products and brand extensions.
• Fair – They are least likely to submit unreasonable restitution claims.
•  Sustainable – They value long-term relationships with their brands and provider organisations – your business, as their supplier of choice.

 A fully engaged customer sounds something like this:

“I thought that buying things was something that we just had to do, something to satisfy our basic needs.  But in the course of getting to know your products and being in contact with your organization I have learned that I can enjoy being your customer.  You have made me feel important and valuable; I can always count on you.  I often ask myself this question: “Why didn’t I contact you before?”  You are not only the best there is – the way you make me feel as a customer is truly legendary.” (“Follow this Path” – emphasis – mine.)

Ken Blanchard, in his book entitled, “Raving Fans: A revolutionary approach to customer service” says this:

Great service is not an accident. It starts when you decide what kind of experience you want your customers to have — when you articulate a clear vision. You keep it alive by empowering your people to go the extra mile for the customer. When it’s innovative and comes from the heart, great service keeps customers coming back again and again.

Blanchard goes on with:

Tony Hsieh, CEO of Zappos.com, understands what great customer service — or, as they call it at Zappos, WOW service — is all about. Once you read the following excerpt, you’ll understand two things. First, you’ll figure out why Zappos quickly became the biggest online shoe store. Second, you’ll know the company is not exaggerating in calling it WOW service.

Excerpted from Chapter 5 of Delivering Happiness: A Path to Profits, Passion, and Purpose – by Tony Hsieh

We receive thousands and thousands of phone calls and e-mails every single day, and we really view each contact as an opportunity to build the Zappos brand into being about the very best customer service and customer experience. Looking at every interaction through a branding lens instead of an expense-minimization lens means we run our call center very differently from most call centers.

Most call centers measure their employees’ performance based on what’s known in the industry as “average handle time,” which focuses on how many phone calls each rep can take in a day. This translates into reps worrying about how quickly they can get a customer off the phone, which in our eyes is not delivering great customer service. Most call centers also have scripts and force their reps to try to upsell customers to generate additional revenue.

At Zappos, we don’t measure call times (our longest phone call was almost six hours long!), and we don’t upsell. We just care about whether the rep goes above and beyond for every customer. We don’t have scripts because we trust our employees to use their best judgment when dealing with each and every customer. We want our reps to let their true personalities shine during each phone call so that they can develop a personal emotional connection (internally referred to as PEC) with the customer.

Another example of us using the telephone as a branding device is what happens when a customer calls looking for a specific style of shoes in a specific size that we’re out of stock on. In those instances, every rep is trained to research at least three competitors’ Web sites, and if the shoe is found in stock to direct the customer to the competitor. Obviously, in those situations, we lose the sale. But we’re not trying to maximize each and every transaction. Instead, we’re trying to build a lifelong relationship with each customer, one phone call at a time.

A lot of people may think it’s strange that an Internet company is so focused on the telephone, when only about 5 percent of our sales happen through the telephone. In fact, most of our phone calls don’t even result in sales. But what we’ve found is that on average, every customer contacts us at least once sometime during his or her lifetime, and we just need to make sure that we use that opportunity to create a lasting memory.

The majority of phone calls don’t result in an immediate order. Sometimes a customer may be calling because it’s her first time going through the returns process, and she just wants a little help stepping through the process. Other times, a customer may call because there’s a wedding coming up this weekend and he just wants a little fashion advice. And sometimes, we get customers who call simply because they’re a little lonely and want someone to talk to.

I’m reminded of a time when I was in Santa Monica, California, a few years ago at a Skechers sales conference. After a long night of bar-hopping, a small group of us headed up to someone’s hotel room to order some food. My friend from Skechers tried to order a pepperoni pizza from the room-service menu, but was disappointed to learn that the hotel we were staying at did not deliver hot food after 11:00 pm. We had missed the deadline by several hours.

In our inebriated state, a few of us cajoled her into calling Zappos to try to order a pizza. She took us up on our dare, turned on the speakerphone, and explained to the (very) patient Zappos rep that she was staying in a Santa Monica hotel and really craving a pepperoni pizza, that room service was no longer delivering hot food, and that she wanted to know if there was anything Zappos could do to help.

The Zappos rep initially was a bit confused by the request, but she quickly recovered and put us on hold. She returned two minutes later, listing the five closest places in the Santa Monica area that were still open and delivering pizzas at that time.

Now, truth be told, I was a little hesitant to include this story because I don’t actually want everyone who reads this book to start calling Zappos and ordering pizza. But I just think it’s a fun story to illustrate the power of nothaving scripts in your call center and empowering your employees to do what’s right for your brand, no matter how unusual or bizarre the situation.

As for my friend from Skechers? After that phone call, she’s now a customer for life. (emphasis – mine.)

One can see from that excerpt that fully engaged customers result from the efforts of fully engaged employees.

In the next Newsletter, we’ll have a look at the other categories of customer engagement – I think you’ll be surprised!

 Our coaching team has grown again. 

 I have come to realise over the past few years that no one person can speak into every situation in a business with total confidence.  As a coach, helping business owners to grow their businesses to success (and then hopefully on to significance), I have sometimes found myself in unfamiliar territory – needing areas of expertise that are specific to a certain situation, and finding that my knowledge is general at best and non-existent at worst, to properly deal with that issue. 

 And it’s no good trying to fake it ‘til you make it either!  Because the client’s business could be at stake!  And it’s always been my desire to offer the very best management and leadership skills to our clients.   One of our stated values is:

 “Being alert to change; to opportunities to offer something different and new; dreaming up new ways of doing it; and then doing it consistently and to the highest standards, – adding each client to an ever-growing list of very different businesses – solid, paying attention to the fundamentals, shunning the limelight, creating jobs, generating wealth, and making a contribution to society.”

 On my own, this is almost an impossible goal to achieve; in a team – a team of highly competent, and complimentary professionals, – well, this could well be possible.  And – this means a great deal more value-add for our clients.

 The team is now comprised of a number of complementary skills.  Murray Nel and Mark Allen have joined Stuart Holliday and myself, and together, we can safely say we have almost 120 years of combined business management experience to offer our clients.

 Murray is well known in banking circles, where he has been directly involved in originating all sorts of different financing options for businesses, big and small.  He also continues to operate his own successful financing enterprise known as Excalibur Finance.

 Mark specialises in new business development/drives, competitor and customer analysis, correcting price points, as well as marketing/branding/launches; and identifying key, and the most profitable, target markets.  He has on numerous occasions set up complete sales structures and controls for businesses, including the appointment of external agents.  He has also been responsible for re-designing existing structures in businesses, where necessary, and then training up sales teams to maximise efficiencies within those structures.    Mark has also been extensively involved in production, warehousing, logistics and the supply chain, and their integration with sales.

 Big business generally has access to these skills on a full-time basis.  Small to medium businesses simply cannot afford them in that way, so very often do without; or they try to muddle through on their own.  We’ve positioned ourselves in the market to provide these very important management skills, on a full-time basis, but at a fraction of the cost.  We’re “Business Buddies”!

 How do we do this?  Well, – when I say full time, I don’t mean that we’re going to be on the client’s premises every minute of every working day; but I do mean that we’ll be available to take calls, emails, skypes or whatever clients want to use, so that they feel we’re there with them all the time!  It can get very lonely trying to run a small business without someone around to help, be a sounding board etc. 

However – we will also continue to be available on a part-time basis to provide the necessary financial & structural disciplines, and sales and marketing expertise, to enable each business to reach new heights.

 All of this will continue to be backed up by our highly qualified and professional back-office team of accountants, tax practitioners and administrators, based in our offices at Hilltops Office Park in Pietermaritzburg.  Their support and the ever-increasing opportunities offered by the internet and the world-wide-web mean we can really work anywhere in the world (as long as our clients can understand us!).

 If you would like to chat some more on what we have to offer, please contact us.

 This is the final newsletter in the series on the importance of good management of staff and human resources, so I’m sending it out sooner than I normally would.  It’s also one of the most important – especially now, as so many firms, government departments and parastatals are coming under renewed pressure from Trade Unions and employee representative associations to increase wages.

 The reasons for this are perfectly understandable – wages for general workers are simply not enough to meet the high cost of living today. South Africa’s history of job discrimination, and the whole apartheid system, has also meant that wages have been coming off a very low base.  Trade Unions are looking for increases way beyond the official inflation rate, and generally speaking, business owners and economists are saying that’s unreasonable.  And on the one hand I agree with them – after all, how does business absorb such monumental increases in labour cost without passing it on to the consumer (which will affect the inflation rate again!)?  On the other hand, a 20% annual increment in a wage that’s already historically too low for anyone to live off, is hardly asking too much, is it?

So, – somewhere between the two, both employee representatives and business – and as a result, the average man-in-the-street, – are going to have to come to some sort of compromise on this matter.  Yes, the average general worker needs more money to live on – just to make the basic ends meet!  And yes, the business owner simply cannot absorb such increases and still remain competitive in a global market.  Well, I have some suggestions to consider…

PAY WHAT THE JOB’S WORTH!

This is a really touchy subject – for both employers and employees – and there’s good reason!  In many cases, unscrupulous employers pay desperate employees way below their worth.  Also in many cases, employees with very little ambition and almost as much interest, continue to demand annual increase after annual increase, for doing the same job, year after painful year.  I believe that this status quo really has to stop, especially if businesses want to grow, and want their employees to grow with them.

WHAT ABOUT THOSE EMPLOYERS?

A great majority of employers pay their staff according to what the market dictates.  They will phone a personnel consulting firm in their local city, and establish a bench mark for a certain job profile, and then look around for someone who is willing to work for that salary each month.  This is weird because the market in Johannesburg is different to that in Durban, and that in Cape Town.  Yet the job function may be exactly the same in each of those three cities.  What I’m usually told is that the cost of living in Johannesburg is so much higher than Durban, and that’s why the salaries are higher.  Or, – I’m told that there’s a greater demand in Johannesburg; that it’s simple economics – the law of supply and demand.  And the best one yet, – people will accept less to work in Cape Town because it’s a nicer place to live.  Now, all those things may be true, but that doesn’t mean the job is any different; and this applies particularly to those large national companies with branches all over the place.

On a very simple level, let me relate a personal experience.  I remember an incident many years ago when a neighbour offered to share the services of his gardener with me.  When he told me this he added, “Please don’t pay him more than Rx per day, otherwise it will affect everyone he works for.” At first I complied because I really didn’t know how this gardener would turn out.  Later on, however, I determined to pay him much more, – and for one simple reason – he was worth it!  And by that, I don’t mean that he was a better gardener than I expected, I mean he was worth it to me!

I calculated what it would cost me to mow my own lawn in terms of time and effort and it was significantly greater than what I was paying the gardener.  After all, it would use up my own valuable weekend time (which I have to say nowadays I guard very selfishly and very carefully), and it would also create the additional stress of being aware, each day through the week, that the job needs doing. 

In addition, by using his services it was freeing up my time to generate income at a far greater rate than his actual cost.  I had determined that he was part of my income-generating team, and on that basis alone, I was going to look after him!

The old adage of “fair pay for fair work” comes to mind. There are also two biblical reprimands to be considered in this regard:

“How terrible it will be for one who builds his palace by doing evil, who cheats people so he can build its upper rooms.  He makes his own people work for nothing and does not pay them. (Jeremiah 22:13),

And

“The pay you did not give the workers who mowed your fields cries out against you, and the cries of the workers have been heard by the Lord Almighty.” (James 5:4)

If you’re not a Christian, you may say, “What’s that got to do with me?”  Well, I happen to believe that regardless of what your belief system is, there is a universal principle inherent in those warnings.  I believe this because I have seen the results of this kind of blatant exploitation, and it goes under the heading of “you will reap what you sow”.  I have often come across someone who pays his workers poorly, and then wonders why he struggles to collect debt due to him; or wonders why every job he does is problematic; or why his vehicle breaks down just when he needs it.  Call it poetic justice if you like….!!

Employees need to know that they are valued, and (sadly) there is no better way to demonstrate this than through the pay-packet.

WHAT ABOUT THOSE EMPLOYEES?

I recently heard someone say that he values the loyalty of his employees over everything else.  The question I felt I should ask is this: “how do you know that employee is loyal?”  Is it because he has worked for you for ten years and never missed a day on the job?  Is it because he wears the company T-Shirt?  Or, is it simply because he doesn’t know much else, and every month he gets his salary paid into his account, and every year he gets an annual bonus and an increase?  Now don’t get me wrong – I’m not suggesting it’s either one or the other; an employee could really be loyal and also happy to be regularly paid, but I’m also not naïve enough to think that an employee will stay on if he’s offered a better job with higher pay somewhere else. (Generally speaking, of course!)

So, someone could start working for you today as a general worker and be earning R5000 per month.  In ten years time, with an average annual increment of some 10% (about 4% above the current official inflation rate), this person will be earning nearly R13000 per month – still as a general worker, and because he is now ten years older, is probably doing less work than he was doing before.  In fact, when one looks at this example, over the ten year period, one can see that this particular worker would have cost his employer R213,000 extra for doing the same job.

This is simply untenable, especially now that we are part of the global economy, and in the global economy, wages are paid for the job, and not for the period of service of the employee.     

But, how do we overcome this problem?  In my father’s generation, it wasn’t unheard of for employees to work for a business for anything up to fifty years.  A worker would leave school at the age of 16 and have one job until he retired at 65.  This is almost unheard of today (though I do know of one at Rawdon’s Hotel in Nottingham Road, who’s been there for over 50 years!).  Nowadays, I believe the average period of service for many employees, in the global western economy, is about eighteen months!  There are two reasons – workers know that to advance in their careers, they need to be constantly improving in what they do, and who they do it for; and secondly, – employers don’t want them hanging around doing the same old job for too long.  It sounds terribly mercenary, but it’s a reality!

I do believe that all future employment contracts should clearly state that the remuneration offered to an employee is tailored to the job profile, and that it will only be subject to annual increments at the CPIX incremental rate. (there are obviously other issues to consider, though I won’t go into those now.)

The onus is therefore on the employee to improve him/herself, if they want to earn more income.  However, I would also encourage employers to identify those employees that show promise and a desire to improve – don’t leave potential star performers to find their own way; get alongside them and push them to greater hieghts – it can only benefit your business at the same time.

 Give them a vision, and then keep them envisioned!

There’s a Proverb which states that “without vision the people perish.”  Another way of putting it is that without vision, without goals, people cast off restraint; they become de-motivated, unfocused and haphazard in everything they do.  

 There is nothing more de-motivating for employees than not knowing where your business is going or what part they have to play in it.

Why is vision so important? And if it really is, how do we go about clarifying what the vision for our own organisation is?  Thomas Watson, the former CEO of the IBM Corporation said this:

 “Consider any great organisation– one that has lasted over the years – and I think you will find that it owes its resiliency to the power of what we call beliefs, and the appeal these beliefs have for people… The basic philosophy, spirit and drive of an organisation have far more to do with its achievements than resources, structure, innovation and timing.”

 In their excellent book entitled “Beyond Entrepreneurship” by James Collins and William Lazier, they spell out the four primary benefits of a corporate vision:

• It forms the basis of extraordinary human effort. – Its our nature to respond to values, ideals, dreams and challenges, and we want to work at something we can believe in, and that has meaning. It’s called motive!
• It provides a context for strategic and tactical decisions. – Its so that people at all levels can make decisions and can share in them.
• Shared vision creates cohesion, teamwork, and community.  Give a group of people a compass and a destination point; turn them loose in the mountains and they’ll probably find their way. Organisations without a shared aim have no context and their people wander aimlessly in the side canyons and take detours to nowhere.  Without shared vision, any organisation can easily degenerate into factions.
• It lays the groundwork for the organisation to evolve past dependence on a few key individuals. To begin with, vision comes directly from the organisation’s early leaders. Afterwards, it must become shared as a community and become identified primarily with the organisation rather than with certain individuals running it.

 Vision Framework

 There are many different ways of approaching the concepts of “vision”, and I’ve heard people debate the definition of “vision” over that of “mission”.  Quite frankly, I don’t think it really matters as long as you, as the leader, are clear about where your organisation is going. 

And by that, I mean “a dream”, a “view”, and a “picture” of what it could possibly become at some stage in the future.  Stephen Covey refers to the concept as “beginning with the end in mind”.

Engaging your employees in your strategic objective

The intangible, but highly influential, experiences of free expression, self-sufficiency, and creative control are what drive many people to want to contribute something within business.  This generally just as true for employees as it is for the business owners themselves.

Obviously, as the business owner, you have a unique stake in the success or failure of your business because it is tied to you as an individual. As such, you are willing to struggle through the tough times while maintaining your excitement – hopefully – as you create a vision for the future.

Creating this future vision is vital.  And its not just to have something to pin up on your wall somewhere – its got to be “the end in mind” – as you clearly see it.  Setting your heart and mind to this objective is an entrepreneurial exercise that forces you to describe with conviction what your business is all about. You, as the leader, must be clear about where you want the business to go, and what it will look and feel like when your vision is realized. Why is this concept so important? Because you are not on this journey alone. Your employees will also require this level of clarity if they are to commit to going there with you.

Your People Strategy

After developing a strategic objective for your business, you are then faced with the task of taking it to the next level.

This includes communicating your vision to, and getting buy-in from, all of your employees.

The challenge? As employees, they will not have the same relationship to the business as you do, and will therefore naturally lack the inherent personal connection that drives you.

So how do you motivate them to take a personal interest in, and ownership of, the goals and objectives presented in your strategic objective? The answer is twofold:

• you must really try to understand their needs, and then
• position the opportunities within your business such that it touches them on a personal level.

 What Employees Want

 Any business has the potential to be a source of personal satisfaction for the people that meet and work there. And your business is not exempt from this important aspect, no matter how it functions, or the training it provides.

Take a step back and think about it from an employees’ perspective – would you want to work for your business? Wouldn’t you want to know such things as whether:

• personal and intellectual growth opportunities were available; whether
• other employees were proud to be there; and
• how the business is known and understood by its peers, the city its in, or for the services it provides in that community?

Think back on your own work experiences: How did you feel when you worked for a business that you truly believed in? And what was it like to work in a business that simply expected it of you as your bounden duty? Believe it or not – the bottom line for most employees is not just about being there, it’s also about personal fulfillment and growth.

Fulfilling Needs, Reaching Goals

In order to engage your employees in your Strategic Objective, you must concentrate on their needs and find something about the business that will provide personal satisfaction for them.

Maybe it will be in the various systems that you have created, or your unique business culture, or the exciting projects they are assigned based on their particular skill sets. Take the opportunity to find out more about them as individuals, and what drives them, what turns them off. Then review your Strategic Objective and make sure you have created opportunities that will attract the right people.

Remember, the business must not only serve you. In order for it to be truly amazing, it also must serve those who work in it. Engaging employees in your Strategic Objective should be seen as an important, strategic, and necessary task to successfully reach your goals.

Tom Chappell, founder of Tom’s of Maine, a highly profitable company in the USA, explained this: 

“Quantitative goals can’t invest purpose in a process that has none.  The quest simply for more of anything is inherently unsatisfying.  If there is no point of joy in what you are doing, or if you lose sight of the point, then just measuring your progress can’t make it worthwhile or fun.  If I can organize people around purpose, that is the most powerful form of leadership.”

Having a purpose that is greater than yourself will give you a constant impteus to strive.  Purpose gives life meaning and helps us to direct and focus our talents and efforts.  It also attracts the talents and energies of others whose purposes align with our own.

" Only 3% of all people have goals and plans and write them down.  10% more have goals and plans, but keep them in their heads.  The rest ‑ 87% ‑ drift through life without definite goals and plans.  They do not know where they are going and others dictate to them." (Glenn Bland)

If we examine these statistics further we find that the 3% group accomplish 50 to 100 times more during their life than the 10% group.

Its been established that the reasons most people don’t set goals and establish plans are:

• They don’t know how;
•  Its too much trouble.
• They don’t have faith in their goals and plans after they are developed.
•  They begin on a long‑range basis and this prevents them from seeing immediate results, so they become discouraged.

Most of the businesses that I have worked in and with, and most of the individuals that I have had opportunity to help, over the last 35 years, have lived their lives drifting between the 10% and the 87% groups.  Goals and plans are rarely allocated the time they justly deserve. 

Goals and plans can become a reality.  There is even biblical precedent for this:

"Write down the vision; write it clearly on clay tablets so whoever reads it can run to tell others.  It is not yet time for the message to come true but that time is coming soon; the message will come true.  It may seem like a long time but be patient and wait for it, because it will surely come; it will not be delayed." (Habakkuk 2:2‑3) (emphasis mine!).

Once you are clear on the vision you have for your business, you need to share it with your employees.  And then write that vision down, clearly, so that everyone you relate with, and to, will know what you’re aiming at, and generally will support you in achieving it.  In this way, the statement of clear intent exercises a subliminal influence on all who work there.

What is more, your employees will be given the opportunity to buy in to your vision for your business and they should then be encouraged to create their own set of goals and plans within that overall vision.

Then keep them updated and informed! Keep encouraging them as you see them grow.  Remember, – they’re part of the team and the team can only win if they’re playing on the same field! 

In surveys carried out on the worlds top companies, it was discovered that almost without exception, CEO’s spent more time on envisioning their employees than anything else.

Whether you like it or not, your employees watch you; they’ll even start adopting your little quirks – sometimes even using the words (and epithets) you use.  If you’re living your vision, they’ll soon be doing the same.

Stuart Holliday has joined the team as a business coach. He has worked for a number of privately owned companies over the past 30 years, and has been involved in manufacturing, costing, marketing, selling and general management. Stuart has a particular ability to create structure where there is none (and where it is needed), and to re-engineer structure and systems where appropriate. He is a great encourager, and loves challenging people to be the best they can be. Stuart’s going to particularly effective in our new Business Buddies and Business Nursery divisions of the business, and is looking forward to connecting with many of his business associates in this new venture.  We thrilled to have him on board and wish him everything of the best in his endeavours.

 THE 10 COMMANDMENTS FOR A THRIVING WORK ENVIRONMENT

 In an article by Jill Hamlyn (MD of The People Business), published in Business Day some years ago, she said this:

“MISERABLE employees are a danger to your business. Making them happy helps to equip your enterprise for almost anything that the market throws at it.”

 She goes on to recommend that all business owners, managers, follow what she calls her “10 Commandments” for establishing an environment in which people thrive.  They’re relevant to this series, so I’m taking the liberty of highlighting them:

• Thou shalt not lie

Do not lie to your employees, clients or customers, or expect your employees to collude in lies. Professionalism demands that company and employee present a united front, and professional employees will strive to keep a neutral face when confronted by clients promised one thing but delivered another. When one lie follows another, though, honest employees get uncomfortable and sooner or later, the truth will come out. If you have a culture of lying in your business, you will need to keep checking your back for knives: it stands to reason that your employees and clients may be as dishonest as you are, but with a different agenda.

It is vital to create an atmosphere of trust within the organisation, particularly when times are tough.  Inevitably, when businesses are distressed, owners tend to become very secretive and non-communicative at the best of times.  This creates wrong impressions in the minds of employees and eventually it leads to an “us and them” attitude.  Lying to your employees will only make matters even worse.  I personally believe that transparency and honesty pays huge dividends when the chips are down, and you don’t have to waste valuable time trying to paper over the cracks.

• Thou shalt not be greedy

Greediness is disparaged, and greedy people are even more so. Money-making at the expense of good service and good people is a one-way ticket to failure. Greed is closely related to exploitation, and few people with alternatives will stand for it.

When a company is struggling financially, and people are being laid off, small business owners have got to set an example by cutting their own drawings “to the bone”, before any other expense.  Many small business owners haven’t yet graduated from the employee mentality.  They still expect a monthly salary like everyone else.  The last thing you should be doing is continuing to live a profilgate lifestyle when everyone around you knows the business can’t afford it; and they’re more than likely subsidising it.

• Know thy staff

In a company of 1 000 people, the CEO cannot be expected to know everyone. But as the MD of a company of 50, you have no excuse. You should know who they are, how they got there and the details of their contracts. Those who perceive that they are unknown and uncared for, will leave. A high staff turnover leads to an unstable company and a high client turnover.

In small to medium sized businesses there should be no excuse for not knowing your employees – where they live, whether they’re married or single; how many children they have; as well as their health and well-being.  You may disocover aspirations and latent talents in the process that can only benefit your business in the longer term.

• Thou shalt not upbraid openly

If an employee has done wrong and must be confronted, take the dressing down behind closed doors. Doing it in front of other employees or clients is embarrassing for the client, and breeds fear and resentment in all employees. Resentful, angry and fearful employees will quit, and the reputation it will earn you as an employer will be damaging.

The pressure faced by business-owners when their businesses are in distress is considerable.  It is almost understandable then, that there will be more ‘heated’ exchanges than normal.  However, breeding fear and resentment amongst your employees is the last thing you want when you need their commitment!  There can be nothing more humiliating than being dressed-down in front of your co-workers, and especially if you don’t deserve it!

•  Thou shalt not divide and rule

 This is closely related to the rule that you should refrain from gossiping about some employees to others. The damage it does to company morale is irreparable, and the damage it does to your authority is worse. And what are they saying about you? Divide-and-rule might have worked as a tactic in the past, but employees are wising up; the result might be a workforce united against you.

Whatever you do, don’t play this game.  In South Africa, where it is particularly difficult to just hire and fire at will because of legislation which protects the worker, don’t try and ‘engineer’ dismissals (constructive dismissal) and use a small issue as the proverbial straw that broke the camel’s back, to get rid of ‘problematic’ employees.  Be consistent; be fair, be transparent and be honest.

• Thou shalt invest in thy staff

 Staff who have been invested in show greater returns than those who have been neglected – they are keen to invest themselves in your business.

This became compulsory in light of the Skills Development Act.  Small business owners tend to avoid this aspect of personnel management because they think it’s going to cost too much, or that they can’t afford to have employees away from work, while they’re being trained.    Well, it needn’t be that way! What employees need is encouragement from you to develop themselves.  Guide them in what courses to take, what books to read, what motivational training aids to listen to – remember, it’s going to help your business in the long run.  A business cannot grow if its employees don’t!

•  Thou shalt take staff seriously

This means that you should not keep them waiting if they have an appointment with you. It means that you should pay them on time, and in full. Take their concerns seriously, and work with them to sort out potential problems. Do not stamp on the initiative of your employees, and respect those who you were wise enough to employ sufficiently to keep them employed.

 Don’t be dismissive of employees’ commitment!  If one of them comes up with an idea, don’t undervalue it with a statement like “it’s more than that..!”  It’s so much better saying, “those are valid comments and worth considering.”  You’re not saying you’re going to accept them, but the employee feels he/she’s been listened to and taken seriously.

• Thou shalt not underestimate the power of employee loyalty

Loyal employees do not leave. They do not have the desire to see your company fail because they like the company and what it stands for. They do not gossip about you to other employees or to clients, friends, enemies, or journalists. They will help prop the door of the cupboard closed as the skeleton inside tries to escape. Disloyal employees – inevitably disloyal as a result of the way they have been treated, or the way they have seen others treated – can wreak enormous damage to any company.

Encourage loyalty all the time – even in the face of severe trial.  If you’ve been consistent over the years of your relationship, you will be pleasantly surprised at the loyalty you engender.  Remember, – people don’t leave companies, they leave people!

• Thou shalt not kill good ideas

Sometimes the best ideas are brought to light by those at the coal face. Those at the bottom or the middle of the hierarchy are able to perceive things differently from those at the top, and can use their experience to put a company head and shoulders above the rest. Listen to them.

This is particularly relevant for businesses in distress.  Often, it’s the ideas from ‘the shop floor’ that can make the difference. Perceptions on the shop floor can be very different from that of management, and it’s very useful to gain some different perspectives.

• Thou shalt support thy staff

If you are on your employees’ side and they know this, they will be confident decision-makers who earn respect. If you do not assure your employees that you are behind them, they will not stick their necks out for you. “

We all know the old saying that the customer is always right!  Even though we know that the customer is not always right!  Well, there’s nothing worse than taking the side of a customer at the expense of an employee, when the customer is clearly wrong.  There is a way to handle a situation like this can be a win-win for everyone.  Listen to the customer and ensure he/she goes away feeling like they’ve been heard.  Do the same with the employee, and let the employee know that you agree with him.  Tell him what you have done with the customer and why.  Never, and I repeat, never tell the employee off in front of the customer, especially if the customer is in the wrong.  It’s wrong, it’s insincere and your employee will never be able to trust you again.

In my previous newsletter I made this closing statement:

Your employees are actually all you’ve got. If you’re not paying enough attention to them, it’s quite likely you’ll not have a business too much longer.

Before you do anything else, pause for a moment and just think about this, relative to your own business and the way you do things.  Then, I suggest you develop the following leadership habits:

RESPECT THEM AND LET THEM KNOW THEY MATTER!

Bosses with the greatest ability to get top-quality work from their employees operate according to one basic principle:

Most people will perform best if their supervisors assign projects in a way that makes them feel their contribution is important.

This advice may sound like I’m asking owners to start ‘mothering’ their employees, yet many bosses get so caught up in juggling daily crises they lose out on opportunities to put this fundamental knowledge to work.

Everyone wants to know that one’s life has meaning – has purpose.  Everyone has a desire for something greater than what they have accomplished to date.  That is why we adore super heroes, and follow pop-stars; always striving to be better looking, slimmer, faster, taller and brighter than the person we actually see ourselves to be.

I remember an incident many years ago, while working for a construction company, and being troubled by the desperately poor productivity of one particular labourer who had been given the task of digging a large hole, just outside my office.  He was just going through the motions, slowly swinging the pick and loosening the soil; then picking up his shovel and one-by-one emptying shovelfuls into a wheelbarrow until it was full.  He would then – slowly – climb out of the hole and – slowly, lift the wheelbarrow’s handles, and (guess what?) trudge slowly to a ever-growing pile of soil, and would tip the barrow’s contents out, before – slowly trudging back to his hole in the ground. 

After a while, I could no longer concentrate on my own work and made up my mind to go outside and give him a good old-fashioned kick in the butt!  Then, on my purposeful way, I thought to myself, “What if that was me doing that meaningless, tiring, mind-frying work out there?”  And then I realised the answer: I needed to give him some direction, some sense of purpose, so this is how the conversation went:

“What are you doing out here?” I asked.

“Digging a hole!” he replied, as if I was stupid or something!

“Why?” I asked, as if I was still stupid!

“I don’t know! I was just told to do it,” he whined. 

 So I told him to stop what he was doing for a minute and to listen to me.  I then told him,

“We are about to build a large factory building on this property.  The building will be constructed of steel, and the framework will consist of large steel uprights which will need to be anchored on a number of solid concrete foundations.  These foundations will be placed in large holes in the ground.  The first foundation is the most important because it creates the ‘cornerstone’ of the whole building.  You are digging the hole for this foundation.  If this one is not correct, then the building will never get off the ground.  Therefore, my dear friend, the success of this entire project rests on your shoulders (and strong arms and back). 

He looked at me for a few minutes until the import of what I’d said had sunk in.  His eyes visibly brightened, his sagging shoulders squared up, and I’ve never seen a hole dug faster and more carefully since. Well, that’s how I remember it anyway!

The point for him was – it’s not what we do but our attitude to it that matters.  The point for the employer is – people need purpose!  G.K. Chesterton once said, “All men matter. You matter. I matter. It’s the hardest thing in theology to believe.”

Don’t just throw work at your people.  Spend a little time telling them about what they’re doing, why they’re doing it, and how it’s going to contribute to the overall success of the business.  You’ll be surprised what a difference it will make.

MOTIVATING SUGGESTIONS:

 Andrea Nierenberg, head of “The Executive Coach” has these suggestions for motivating employees:

Time your approach. When you’re making a sales pitch, it only makes sense to pick a moment when the client is most receptive. Similarly, introduce employees to new projects when you know they’ll listen best, and they will be more likely to understand the project’s goals and fulfil your expectations.

At a 40-person media buying services company I advise in Chicago, one of the executives supervises two staffers with similar titles. One employee works best in the morning; the other perks up in the afternoon. Two months ago, the executive decided to factor this into the way she dished out assignments. She’d give the "night owl" any projects that would take up most of the afternoon and were due before the close of business, rather than hand them off to the "lark," whose energies were flagging by then. Consequently, she’s found more projects have been turned in on time and with fewer mistakes.

Understand how your employees think. Some of your best staff members may view the world in a way that’s completely different from the way you do. Perhaps they’re highly analytical and you’re creative—or vice versa. By presenting information to them in the way they process it best—and letting them express themselves—you should find they’re more motivated to give you what you need.

At one company where I do management training, one of the supervisors on staff was very analytical. He’d been very successful in bringing in new business by approaching clients with pitches that included charts and graphs to illustrate his points. He was frustrated because he wasn’t able to persuade one of his most talented salespeople to incorporate this approach into his pitches. I recommended my client accompany the salesperson on a sales call but remain silent and see how his subordinate handled the situation. Although the salesperson talked his way through the meeting without using charts and graphs, they got the sale and my client chose to relax his approach. Since then, the salesperson has increased his territory by 20 percent.

Take time to listen. Meet after major projects to find out what worked and what didn’t work for your employees. Listen carefully to their feedback. Not only will it help you find better ways to work in the future, it will give you valuable insights.

At a magazine where I’m doing sales training, a supervisor was upset with a salesperson for losing a piece of vital business. While the salesperson began to explain what went wrong, the manager, instead of listening intently, began to open his mail. Finally, the salesperson said, "It’s really hard for me to explain this to you because you’re not listening." Realizing his employee was correct the boss began asking questions. He soon discovered he hadn’t provided clear instructions. Together, they went back to the client and regained part of the business.”

No boss should tiptoe around employees’ every mood. But by taking time to understand how the individuals on your staff work—and what motivates them—you will be able to increase productivity.  This is particularly important in South Africa, where we are faced with huge disparities in culture, language and race – and all of which will impact on your relationship with your employees.

However….

I can’t finish off this newsletter without first commenting on the impact of the organised labour movement in South Africa – the Trade Unions – and the divisive nature of their activities.

First of all, let me say that I don’t believe there is anything wrong in employees having formal representation.  It’s so much more practical dealing with four or five representatives of an employee body, than it is trying to communicate with a hundred people.

The Trade Union movement in South Africa has historically been a political one – an active member in the struggle against apartheid.  At present, most trade unions are affiliated to one of the larger associations of unions, and the most effective one is COSATU.  This affiliate has aligned itself with two political parties – the ruling ANC and the South African Communist party – both of which grew out of the struggle.  Quite frankly, the alliance is much more important for the unions and for the SACP, for without it, they would have very little representation in the country.  The ANC, in my view, could well do without the idiocy of its smaller partners, but knows that it would rather have them close by where they could control them, than as opponents where they could gain the support of the poorer masses.

Like any political party, the Trade Unions owe their success to their membership, and at present they are on a drive to increase that membership.  The underlying aim is not so that they can better represent workers to corporate South Africa – the aim is to gain power, political power – and through it, to influence government.  This is not what trade unions were meant to be!  These aims are driving a wedge between employees and employers – especially in the small to medium sized business environment.  Employees are made promises that the unions cannot possibly keep, and encouraged not to dialogue with employers without union direction.   In some cases, they are even coerced to join these unions.  Employers are put under more and more pressure to raise wages, and improve working conditions, in most cases, beyond their capacity to do so.

The result – more and more businesses are either automating and laying off workers – or just calling it a day and closing down.  This is especially relevant in the manufacturing industry.

So – what’s the answer?  Well, I believe that employers must keep their heads and not react emotively to this development.  Furthermore, if you’re maintaining good employment practices, treating your employees well, respecting them and let them they matter, and seen to be consistent and fair, I believe, inevitably, the truth will out!  Employees are not stupid, and ultimately, they will get to know who really cares about them.

So what’s the best way to go about employing the right people for the job, and once you’ve employed them, how do you keep them?

The following statement, though a little harsh, is a generalization:

Small business owners in South Africa do not tend to treat their people well. 

Many employees are generally regarded as just labour for hire – much the same as hiring a piece of equipment.     The prevailing attitude toward them by many small business owners is this: do the job and I’ll pay you, and that’s the sum of our relationship! 

Over the last 25 years, the Gallup organization has interviewed over a million employees, asking them hundreds of different questions on every conceivable aspect of the workplace.  Their aim was to sift out those few questions that were truly measuring the core of a strong workplace. 

They discovered that it can be simplified to twelve questions; “questions that measure the core elements needed to attract, focus and keep the most talented employees.” 

(These questions all form part of a number of books written by various members of the Gallup Organisation, such as “First, break all the rules”; “Now, Discover your strengths”; and a host of others.)

We have adapted these questions, made them into statements, and then we ask employees to either agree or disagree with the statements, as they experience it, in the workplace. 

As a small business owner, set this up in your own workplace, and hand out the statements to your staff, asking them to write down their views on a piece of paper.  In fact, take the series of questions below, and set them up on a spreadsheet.  (You can use it again and again, and thereby monitor the engagement of your employees.) 

You can then analyse the findings to ascertain just how engaged (or disengaged) they are.

This is very important. 

If you don’t measure up you will probably find that you have been unable to keep any superstars on your payroll or that you employ mediocre people who only care about their monthly pay checks. 

The statements are:

1. I know what is expected of me at work.
2. I have the materials and equipment I need to do my work right.
3. I do have the opportunity at work to do what I do best every day.
4. In the last seven days, I have received recognition or praise for good work.
5.  My supervisor, or someone at work, does seem to care about me as a person.
6. Someone at work encourages my development.
7. My opinions at work do seem to count.
8. The mission/purpose of my company does make me feel like my work is important.
9. My co-workers are committed to doing quality work.
10.  I have a best friend at work.
11. In the last six months, I have talked with someone about my progress.
12.  This last year, I have had opportunities at work to learn and grow.

“Much of the power of this measuring stick, then, lies in the wording of the questions.  The issues themselves aren’t a big surprise.  You may also be wondering why there are no questions dealing with pay, benefits or structure.  This doesn’t mean that they are unimportant.  It simply means that they are equally important to every employee – good, bad and mediocre.” (With thanks to Marcus Buckingham and Curt Coffman, co-authors of the book, First, Break all the Rules.)

 The authors go on to say:

“The results of such a questionnaire will determine whether your employees are either:

1.         Engaged – those employees who pack the biggest punch on all the important business outcomes such as productivity, customer retention, low turnover, safety, profitability, and growth.  They are involved in generating ALL of an organisations profits and customer engagement.  They represent the positive economic force that fuels an organisations profitable growth.

2.         Not engaged – those employees who may share the values and mission of their team and organisation but lack precision in terms of the expectations of their role. Many of them are just waiting for an opportunity to become fully engaged.

3.         Actively disengaged – This group accounts for most of the waste in terms of lost workdays, incredibly high safety costs, higher levels of staff turnover, low productivity and customer defection. They represent a negative economic force actively at work within organisations and to a large extent, undo the great work of the engaged employees. They stagnate the growth of a company and represent the most significant challenge to its profitability.  They are living and breathing obstacles to meeting customer requirements.  These people are real trouble!

The Gallup Organisation conducted a national benchmark of the engagement index in 2001, for eight countries. 

The results were sobering to say the least.  On average, 17% of employees were considered to be “engaged”, 65% were “not engaged”, and a scary 18% were “actively disengaged.” 

What this means is that over 80% of employees are just going through the motions, when they come to work – not much ambition, not much interest! 

Now I guess one could say that there’s more to business than the attitude of one’s employees.  However, the Gallup organisation has found that there is a direct correlation between the level of engagement of employees, and the level of engagement of customers. (and we’ll address this a bit later on.)

Clearly, if your employees are all scoring between 1 and 3 on each statement, you have a problem.  Consistent scores of 4 and 5 indicate a high level of engagement.

I have found that in many small businesses, employees are often not clear on what their duties entail, and that:

• very often, they do not have the wherewithal to do the job well;
• they get drawn into areas where they lack skill and therefore lose motivation;
• praise is the absence of criticism;
•  they have no idea that the business even had a mission in life other than making money;
• no one really cares about excellence or about personal growth and development. 

In fact, I have found that in most cases where businesses are struggling, it’s usually because of a people problem.  The problem does not lie with the people themselves – it’s a management/leadership problem.  People don’t leave businesses; people leave people!

 “Leaders create an environment where people come to work to prove themselves over again every day.  No one gets paid to budget their efforts or pace themselves.” (Dave Anderson)

Ultimately, it is the ratio of engaged workers to disengaged that drives the financial outcome of the organisation, particularly where active disengagement is concerned.  Your employees are actually all you’ve got.

If you’re not paying enough attention to them, it’s quite likely you’ll not have a business too much longer.