I appreciate all the positive feedback from last week’s blog post. It was supposed to help you think about the message you send, by the words you choose. Last week, I attended an event featuring Gerry Sandusky (voice of the Ravens), and in his talk he also highlighted the fact that people like to win. When trying to attract and retain talent, always keep in mind that people want to be part of a winning team. Develop a winning team, and watch your success skyrocket! Today, I’m talking about how employee development can help your business grow.
Employee Development and the Bottom Line
I grew up in Illinois, and I was a HUGE Chicago Bulls fan. HUGE! When I say a Bulls fan, it was probably more of a Michael Jordan fan. I wanted to be like Mike. Why? Well, because Jordan was the best of his time (and maybe all time). Having Jordan on the court was a game changer, he gave the Bulls a competitive advantage. Need proof? Michael Jordan led the Bulls to a championship in ’91,’92 and ’93, after a brief retirement and an unsuccessful pursuit at a baseball career. He came back to basketball and lead the Bulls to another threepeat in ’96, ’97 and ’98. Fun fact: I was in the United Center in Chicago when the Bulls won in 1998.
Almost everyone I knew wanted to be like Jordan. Jordan was more than a winner; he was a game changer. Every athlete I know dreamed of being the player that was given the shot with the game on the line as the clock is ticking down and comes through with the clutch shot, or play or whatever is necessary to win. Nobody dreams about being the guy that passed Jordan the ball.
Athletes at that level have a tremendous work ethic. However, we all know people with extraordinary work ethics that get ordinary results. Perhaps you have people in our company like this. Perhaps your company is like this. To achieve greatness, you need to combine that work ethic with a useful employee development tool. You may not have a championship trophy to show for it, but you will see the impact on your bottom line as you leave your competition behind.
I have talked with team leaders, and executives that have lost a top performer from their team. The story is almost always the same. I didn’t see it coming, and I wish I’d have known so I could have done something. These leaders struggle, often in vein, to find a direct replacement. In fact, most of the time they end up needing two people to get the same productivity.
Even if you didn’t have to hire multiple people, the replacement costs can exceed 1.5 times the salary of the person that left. Not to mention the impact to morale and team cohesion. And now your best employee, the one that gave you a competitive advantage, might be giving your competition that advantage you just lost. Wow!
Retention has an indirect, but real impact on your bottom line. Let’s keep this in perspective. As your company grows you run the risk of higher attrition numbers. Now not all attrition can be avoided, but if you could reduce turnover by 3-5%, how much money could you put back into your business. Where would you rather invest your hard-earned capital?
Having an employee development system will improve the productivity of your team. We’ve all heard the 80/20 rule, where 80% of the work is done by 20% of the employees. There is a natural tendency in business where teams typically have about 20% that are exceptional. Roughly another 60% that are solid performers, and the remaining employees just don’t fit. What if you could tap into the underutilized productivity in the 60% of your solid performers and improve productivity by just a few percent. What you’ll see is dramatic increases in productivity.
For illustration purposes. Suppose you had about 50 employees in your organization. Increasing productivity by just 3% will yield an additional 3000 hours of work over the course of a year. That is like having another 1.5 people on your staff without all the overhead of having employees. And an additional 3% isn’t really all that much. It comes out to ~15 minutes a day/employee. Think of it this way: 5 minutes first thing in the morning, 5 minutes after lunch, and 5 minutes at the end of the day. How does this happen? Just being more deliberate, and focused.
Employee Development System
An employee development system is not an annual performance assessment. It is not long drawn out conversations about why someone needs to improve. I have 2 boys that play sports. I do my best to coach them both. When a player strikes out, as he’s walking back to the dug-out I often give him a quick piece of advice. Adjust your hands so you can get the bat around, or shift your balance so you can get a more level swing. Something quick and immediate. I didn’t wait until the end of the season (like an annual review). We try to make corrections now so we can see improvements at his next at bat.
To continue with the coaching analogy, there is one coach, one piece of advice, and one conversation. I don’t overload the ball player with three for four pieces of advice. It’ll clutter his head, and he’ll certainly fail again next time. We don’t have every coach giving advice at the same time (I do see this at times). Again, keep it simple, direct and understandable. Normally the change doesn’t come immediate in a game, and that is OK. But at our next practice I remind the player what we needed to work on, then we practice it until we get it right.
As a coach I develop my players on a game by game, day by day system. I work to elevate performance, so at the end of the season we are better ball players. Hopefully at the end of each practice we are a little better. When creating an employee development system, these same fundamentals apply. A quick, simple, timely process for feedback, with the intent of elevating talent, will improve productivity, lower retention, and drive profits that you will see in your financial statements.
This Week’s Challenge
Do you have an employee development system in place that is designed for continuous improvement? Do you have a system in place that elevates the talent on your team on a continuous basis? Are you creating a system that gives you a competitive edge?
If you would like to discuss more ways to help your business grow or if you feel you have a specific problem that needs to be addressed, please reach out to me.