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.

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.

 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.

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.

If that statement is true – and I’m certainly inclined to believe it – then our politicians (and many others around the world) have got their hands full trying to deliver on their maniacal promises at the last election.

Not only have they not been able to provide the promised 500,000 jobs by the end of the year, the economy has shed 770,000 jobs because of the recession. That’s an annual decline of 5,6%, which means that employment has fared far worse than the economy itself.

If we are to believe the economists, then the economy has started to turn for the better. Personally, I’m not holding my breath. I think we’ve yet to see the worst. Let’s not forget that we have been surfing on the back of the 2010 world-cup euphoria – there has been significant infrastructural development around the country to cope with the looming rush of soccer-loving visitors, which has created a lot of work and a lot of revenue for a lot of businesses.

But when the last fan flies out of the country, we are going to be left picking up the tab – and from all accounts, the tab is going to be more than we can handle, given all the corruption and backhanders going on. What’s going to be worse is the vacuum that will be left, once this development ceases – and cease it must! And this does not bode well for business, or employment, in South Africa.

So how are the politicians going to deal with this? I hope it won’t be like China! I only say this because China seems to be the flavour of the moment. Not only is it now our biggest trading partner, but I read in yesterday’s newspaper that our government is considering adopting China’s methods of dealing with corrupt officials! In China they jail them. But I rather suspect, from what I’ve read of their methods and intrigues, that the real reason they get jailed is not because of the crimes they committed, but because they were caught! Well, – I guess that’s not too different to us!

China has such a massive unemployment problem that the only way it deals with it is to keep producing goods – irrespective of demand! And this brings me back to the opening statement – we have to concede that in a finite world, exponential growth (which is necessary to create new jobs at the rate we need to) is simply not possible. “Mao Zedong scorned the fact that the scarcity of land was a restraint on population growth. Every mouth, he said, was attached to two arms. People could always produce more than they consumed.” (China shakes the world – James Kynge.)

James Kynge goes on to say:

“In the past, the balance each dynasty strove for was that between food and mouths, but the past twenty-five years of development may have banished this concern forever. The crucial equilibrium now is between people and jobs, and so far it has proven elusive. Even when the economy grows at 9 or 10 percent, it fails by a margin of several million to create the 24 million new jobs required each year. Thus, while China appears to the rest of the world to be enjoying an amazing growth bonanza, the officials working behind the high walls of their leadership compound in Beijing feel trapped in an endless employment crisis.
This creates an unyielding pressure for growth that influences every economic plan and strategy…. Barely a week goes by without some incident of labour or social unrest somewhere in the country, and some of these flare-ups are serious. If the growth rate were to drop dramatically, these convulsions would be almost certain to intensify. As economists in Beijing are so fond of saying, China is like an elephant riding a bicycle. If it slows down, it could fall off and then the earth might quake.

The pressure of population combines with the other features of life in China to create the salient characteristics of corporate China. Chief among these is the tendency among companies to carry on producing, or even expand production, long after any discernable profit margin has vanished. This behaviour is partly down to the mesmerizing attraction of trying ever harder to win a bigger share of the ‘billion consumer’ market, but it is by no means as simple as that. The issue is of critical importance, though, because helps demonstrate why it is that most manufactured products in China are in chronic over-supply – and by extension, why so many of them are extraordinarily cheap.

This is a bit like borrowing money to repay debt! The only difference is that it’s more like me borrowing money to sustain a profligate lifestyle, and leaving the repayment of it to my children. Well, in many ways, I think our politicians act like that right now. The question one could ask though is: how are Chinese businesses able to continue when clearly they must be losing money?

Kynge explains it in this way:

“In a normal market economy companies cannot go on selling at below cost for years. Banks start to worry about their ability to repay the debts and eventually call in their loans. But China is not a normal market economy. It does not have a functioning bankruptcy law, so the liquidation of insolvent companies is difficult. In addition, banks are awash with liquidity; Chinese people save an average of around 40 per cent of their income and the supply of money is well over double the annual gross domestic product. This means that banks often have more deposits than they can find borrowers to lend to, and are therefore less than vigilant about calling in suspect loans. A senior provincial banker with the Industrial and Commercial Bank of China, the country’s largest bank told me that precipitating a bankruptcy by calling loans from an insolvent company was inimical to the interests of the bank. The knock-on effect would be palpable as that company’s suppliers were also pushed under, he said. Unemployment would rise, potentially causing a slump in consumer spending and endangering social stability. ‘It is much better to wait for the next upturn in the market than cause a slump across the board‘ the banker said. The ubiquity of this attitude is revealed by an extremely low level of Chinese corporate bankruptcies by international standards.
This peculiarity leads to another, one that is shaped partly by the ever-present lure of selling to the mythical ‘billion’ Under market economy conditions, when a company encounters over-supply of the product it makes, it generally pulls in its horns. But in China this happens only rarely. A more common response is to continue producing at the same rate while looking around for another sector to diversify into.”

It is not uncommon then for one to find manufacturers of motor cars, also producing porcelain tea sets; and denim jeans, the design of which has been shamelessly copied from Levi or any one of the top international brands.

Not that I think the Chinese model would work here! First of all, our people cannot produce at the level the Chinese do; and secondly, our labour laws would never allow South African companies to treat their workers like Chinese companies do.
In today’s (2nd November) edition of Business Day, the editor stated,
“We’re still waiting to see third-quarter economic growth figures but in the first half of this year the economy contracted by only 2% compared with the first half of last year. And signs are that it is already starting to turn around.
But in the job market, clearly, things have got worse – and could deteriorate further. Standard Bank ’s economists think the unemployment rate, which has already jumped from around 23% to 24,5%, could go as high as 27% this year.
So why the lag in the time it’s taken the labour market to respond to the recession? And why is the response now so severe?
Ironically, SA’s labour market regulations may have something to do with both. In the US, for example, where workers have very little protection against being fired or retrenched, the job market responded almost immediately to the economic crisis. People were put out of work overnight as firms felt the crunch last year and early this year. Now, things are starting to look a bit better.
In SA, by contrast, workers are protected from simply being thrown out on the streets arbitrarily or overnight. So employers must follow complex and lengthy retrenchment procedures. And that may be why it’s taken a while for job losses to bite. So the latest quarterly survey figures seem to suggest that it’s not that our labour laws necessarily help workers hold on to their jobs in a recession – they seem simply to delay the evil day.
Worse, one theory holds that SA’s restrictive labour laws may in fact add to the chances that jobs will be lost in a recession. Because it is so difficult to get rid of workers (even for good reason) in good times, so the theory goes, some employers will take advantage of the economic downturn to do even more retrenching than they strictly need to. And that means, of course, that those lost jobs are unlikely to come back, even once the economy recovers.
As it is, the recovery is expected to be slow and bumpy, and not very job-creating. That’s a bad story for any country but particularly for SA, with one of the world’s highest unemployment rates.
And if the unemployment ratio doesn’t look that great, look at it as an employment ratio and it’s even worse. The third-quarter figures show that only about two out of every five adult South Africans have jobs of any sort. And we know that the unemployment problem hits young adults hardest, so that almost half of young Africans have never worked at all – making it unlikely that they ever will be able to break into the labour force.
So creating jobs just has to be a priority. This is surely not the time to quibble too much about how “decent” those jobs are. Nor is banning labour brokers going to do the trick. The government keeps saying that job creation is one of its five priorities. It has agreed to measures such as the Training Layoff Scheme, designed to try to save some jobs in the recession. It has improved unemployment benefits and boosted the public works programme.
But none of these are solutions to SA’s unemployment problem. Rather, as last week’s medium-term budget speech emphasised, SA needs an alternative, more labour- absorbing growth path. The challenge is to devise ways to achieve that. (emphasis – mine!)
So, what does mean for South African business right now? What does it mean for our businesses in a year; or five year’s time? The outlook is not great, but there are some things we can do to give us an edge, when the proverbial does hit the fan – as I think it will in about two year’s time. And it certainly doesn’t include the Chinese ‘Lemming’ approach!

In my next newsletter, I’m going to set out some basics that I believe you need to do well, if you want survive the next crunch, and have a strong business left at the end of it to take advantage of any upswing.