E-News - Top Three Reasons Business Fail, Part II
Top Three Reasons Business Fail, Part II:
Fear of Investment
Many companies find it easier to buy new equipment than to hire great people. I coach several business owners a week and too many owners prefer to pour their concentration and money into buying new trucks, computers, scheduling software, and flat-rate modules than into hiring better performers. Ultimately, this is a mistake, for none of your company’s resources will ever be as valuable as your human resources.
According to Eric P. Bloom, President of Manager Mechanics, LLC, “Good hires are important to your company for three primary reasons. First, everyone employed by the company, including you, is an expense to the company, based on salary, benefits, occupancy (office space, phone, etc.) and, like all companies and investments; a specific return on investment (ROI) is expected. The ROI of an employee is based on the value of the work done by the employee. Second, all companies have a limited supply of salary dollars. Therefore, if the company hires a low-performing employee, there is an opportunity cost related to the work that could have been done by a higher-producing employee. Lastly, underperforming and/or problem employees take up a disproportionate amount of their manager’s time; therefore, it also reduces the ROI of the person’s manager (which could be you).”
The Benefits of Better Performers
- They determine what they must accomplish, set goals, and organize themselves to achieve those goals efficiently.
- High performers tend to judge themselves by the achievement of goals, to the point of being almost obsessed by such achievements.
- They strive to improve their performance, actively seeking the resources they need to accomplish this, and they tend to learn from their own mistakes. Talent Management Magazine describes high performers as fearless when it comes to doing what it takes to succeed, and these are the kinds of hires who will help your company succeed too.
- They tend to lack the knowledge and motivation to accomplish their goals if they have them to begin with.
- While they generally do what is expected of them in the workplace, they consider that to be sufficient, and they will not strive to go above and beyond or make improvements in themselves and their company.
- Unlike better-performing employees, they rarely exceed their employer’s expectations on their own free will.
Both of these types of employees can be a principle business asset or liability. Invest in them thoughtfully and strategically, and you'll reap rewards now and in the years to come. Choosing the right hires for your organization right from the start is crucial to building a thriving business.
Many entrepreneurs seem to view employee training and development as more optional than essential, but it should be noted that investing in employees affects the bottom line in two ways. First, it reduces employee turnover, sick leave, and healthcare costs. Second, investment in employee engagement programs, training, talent management, information and decision support, communication, wellness programs, and technology has an undeniably positive and very visible effect on workforce performance and productivity.
Mark Swepston, a mentor, friend, and CEO of Atlas Butler Heating and Cooling, one of the largest HVAC companies in Columbus, Ohio says, “Most people in the HVAC industry are technically oriented, and they like to build and fix things. The things we build or fix don't have a mind for ‘themselves,’ and it is an easier task if you follow the instructions. If you like to ‘fix things,’ it may be more complicated, since someone else may have built and /or designed it, but it is still easier than dealing with people.
“Hiring that person for a new role that you have not had in your business can be a real challenge. (Believe me! We just went through it.) But buying that next truck, tool, or piece of equipment is a badge of honor. All you have to do is keep it clean and in good working order, and it will always be a point of pride.
“If you hire the wrong person, though, it will be nothing but misery for everyone until they are gone. They also do damage to your business image, and the rest of your team and your time will be drained, trying to support their lack of performance.
“Hire the right person, and they still take energy every day to make sure they are on track, helping your team reach their goals. You can't stick personnel in the warehouse, polish them, and just bring them out when needed.”
Sure, you might have a shiny truck, the most new-fangled technology in your office, and fancy brochures and business cards, but in today's economy, if you are not investing your money to hire better performers, you're going to fall behind and may eventually go out of business. A business is only as good as its people, and it will grow as your team grows and produces results. I’ve read “Good to Great”, by Jim Collins, three times, and I would highly recommend it to any business owner, but you don’t have to read any how-to guide to know that your most important business investment is to hire better performers, to build a winning team that will propel your company to greatness.
Again, thanks to Mr. David L. Sullivan of the Shamrock Group for defining the top three reasons and allowing me to use them.
Sneak-Peek Preview: Top Three Reasons Businesses Fail, Part III: Lack of VisionCarry On!
HVAC Business Consultant