PPT – no, not that presentation software
People, Process and Technology.
Having managed staff at several firms and having worked on a start-up, I can safely say that investing in people is one of the most critical parts of running a business. Sure, you can have the best business model and concept, the best tool that you’ve built, but to scale up and create a viable, sustainably profitable business, an entrepreneur needs to build an amazing team and hire the right people (this includes outsourcing and working with agencies). After all, the business owner wants to work on their business, not in it, in order to grow it.
Many companies would not bat an eyelid when investing heavily in technology – from fast computers and servers to building web sites, tools, and applications. These are obvious investments that appear to be the foundations of a business. In order to be more efficient, all kinds of processes are put in place to streamline, improve quality and service, and enhance the bottom line. No amount of cutting edge technology or top-notch processes can be implemented successfully without the properly trained people (employees and third party providers). After all, you need the right people to consistently implement the processes (for sales, customer service, quality assurance, etc.) and effectively harness the power of the invested- technology. The lynchpin lies with the people…always the people.
Hiring employees can be a painful experience, especially when employees leave quickly or do not attain the level of excellence you expect of them after you’ve invested effort and time hiring, training, and giving them leeway to get up to speed – all during which time you have to pay them before they can contribute to a level that justifies compensating them at their pay level.
It is rather unfortunate that the leap of faith has to come almost entirely from the employer regarding an employee’s ability to produce. Yes, employees take on the risk if the company is mismanaged and goes belly-up or (especially a start-up) amounts to one that sells “vaporware”. But the real risk is borne by the employer, especially during the first 3 months of hiring a new employee. Precious time and money can be wasted with a poor hire. A good hire is a truly amazing experience for both parties. Suddenly, everything clicks and things are moving in the right direction swiftly.
During down times, firms cannot help but look to cut costs; it’s a good time to take an audit and make sure there is no waste. Some firms that can still afford to invest sometimes choose to invest heavily in technology while opting to cheapen on their human resource investment on their superstar performers. Other firms come to a screeching halt with any form of investment, and since they can’t cut back on technology they have already invested in (sunk cost), they look towards a giant chunk of most firms’ expenses – labor costs.
During challenging economic times, it is always difficult to decide if a firm still needs a sales staff the same size as during better times, or if would make sense to cut down on the headcount. Strategically, it is particularly during down times that represent the best time to step on the gas pedal to pull ahead of the competition. Realistically, would you need to the full staff to do so? If everyone on the staff has been a strong performer in their area, and the company is well-capitalized to weather the economic storm, I would say keep the team together. No matter how much you try to soothe the star performers that their job is safe, the simple act of cutting out other strong team members serves to rattle their nerves and distracts them from focusing on the task at hand. If there are any underperformers, shame on the firm for not getting rid of them any earlier; they should be left behind to begin with, the sooner the better. That would not rattle anyone, as everyone knows who is pulling the team down.
I would liken a strong team to that of an amazing basketball team. Even a superstar performer like Michael Jordan had to have other team players step in for a while – he could not carry the team the entire duration of the game. The same goes for business. Support staff tends to get the target on their backs for the axe but superstar people can quickly lose their star power when they have to do work that does not play to their strengths and serves to de-motivate them.
If you have the right people, then even with a cut-back on technology, they can still be creative and inventive with new processes to do more with less, think outside the box, and push the envelope with the current available technology. When this happens, the team really comes together and bonds at a whole new level. It’s a beautiful thing when a great team puts their minds towards a common goal. Amazing things happen and a wonderful camaraderie is formed, which serves to strengthen the team and the organization.
Having managed staff at several firms and having worked on a start-up, I can safely say that investing in people is one of the most critical parts of running a business. Sure, you can have the best business model and concept, the best tool that you’ve built, but to scale up and create a viable, sustainably profitable business, an entrepreneur needs to build an amazing team and hire the right people (this includes outsourcing and working with agencies). After all, the business owner wants to work on their business, not in it, in order to grow it.
Many companies would not bat an eyelid when investing heavily in technology – from fast computers and servers to building web sites, tools, and applications. These are obvious investments that appear to be the foundations of a business. In order to be more efficient, all kinds of processes are put in place to streamline, improve quality and service, and enhance the bottom line. No amount of cutting edge technology or top-notch processes can be implemented successfully without the properly trained people (employees and third party providers). After all, you need the right people to consistently implement the processes (for sales, customer service, quality assurance, etc.) and effectively harness the power of the invested- technology. The lynchpin lies with the people…always the people.
Hiring employees can be a painful experience, especially when employees leave quickly or do not attain the level of excellence you expect of them after you’ve invested effort and time hiring, training, and giving them leeway to get up to speed – all during which time you have to pay them before they can contribute to a level that justifies compensating them at their pay level.
It is rather unfortunate that the leap of faith has to come almost entirely from the employer regarding an employee’s ability to produce. Yes, employees take on the risk if the company is mismanaged and goes belly-up or (especially a start-up) amounts to one that sells “vaporware”. But the real risk is borne by the employer, especially during the first 3 months of hiring a new employee. Precious time and money can be wasted with a poor hire. A good hire is a truly amazing experience for both parties. Suddenly, everything clicks and things are moving in the right direction swiftly.
During down times, firms cannot help but look to cut costs; it’s a good time to take an audit and make sure there is no waste. Some firms that can still afford to invest sometimes choose to invest heavily in technology while opting to cheapen on their human resource investment on their superstar performers. Other firms come to a screeching halt with any form of investment, and since they can’t cut back on technology they have already invested in (sunk cost), they look towards a giant chunk of most firms’ expenses – labor costs.
During challenging economic times, it is always difficult to decide if a firm still needs a sales staff the same size as during better times, or if would make sense to cut down on the headcount. Strategically, it is particularly during down times that represent the best time to step on the gas pedal to pull ahead of the competition. Realistically, would you need to the full staff to do so? If everyone on the staff has been a strong performer in their area, and the company is well-capitalized to weather the economic storm, I would say keep the team together. No matter how much you try to soothe the star performers that their job is safe, the simple act of cutting out other strong team members serves to rattle their nerves and distracts them from focusing on the task at hand. If there are any underperformers, shame on the firm for not getting rid of them any earlier; they should be left behind to begin with, the sooner the better. That would not rattle anyone, as everyone knows who is pulling the team down.
I would liken a strong team to that of an amazing basketball team. Even a superstar performer like Michael Jordan had to have other team players step in for a while – he could not carry the team the entire duration of the game. The same goes for business. Support staff tends to get the target on their backs for the axe but superstar people can quickly lose their star power when they have to do work that does not play to their strengths and serves to de-motivate them.
If you have the right people, then even with a cut-back on technology, they can still be creative and inventive with new processes to do more with less, think outside the box, and push the envelope with the current available technology. When this happens, the team really comes together and bonds at a whole new level. It’s a beautiful thing when a great team puts their minds towards a common goal. Amazing things happen and a wonderful camaraderie is formed, which serves to strengthen the team and the organization.
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