This May Be The BIGGEST Mistake Entrepreneurs Make
Posted by Wayne in Business Growth
As an entrepreneur, particularly when you’re just starting out, you often spend your days working tirelessly … Alone. Regardless of your goal – you must plan successfully and that success is defined by the management mix also affectionately referred to as the 4 Ps of business. The problem is most entrepreneurs spend all their time focused on only 3 of these Ps, virtually ignoring the final P until it’s really late in the game.
In case a reminder is needed in business – 4 Ps exist:
People – the assets that keep your business going and growing toward success
Product – the item being sold, the service being provided or the idea being presented
Process – from conception to expansion and everything in between
Profit – the money you make on the process and product with the help your team (people)
The issue at hand is most entrepreneurs spend the majority of their time focused on the last three Ps, giving little effort to the first P – People, until way too late.
If you’re going to grow your business to a significant size, you’re going to need people. Most entrepreneurs place people management at the bottom of the list and wait until the last possible moment to “deal with people.”
When people start to become the problem, you’ve waited too long to begin focusing on the people component of your business. People are an integral part of your success; they are the human asset that makes your business profitable.
Not too long ago I was at the first meeting of a new Master Mind group with other tech entrepreneurs and the topic of our conversation was employees.
As we were going around the table introducing ourselves – one of the questions we had to answer was -how many employees work for you. After a brief introduction of himself and his company, the man (a very seasoned entrepreneur running a large software company) sitting next to me said, “with regard to the number of people I have working for me…it’s about half of them.”
Everyone sitting around the table laughed…and then each echoed the same sentiment.
He then proceeded to share how even after 25 years in business and numerous long-time employees; they were still constantly dealing with employee issues.
Dealing with people can be difficult, whether in a working relationship, church congregation relationship or a family relationship. There are constantly stories of feuds at work, churches that split and divorce rates hovering above the 50 percent mark.
We’re all human – so why such difficulty when it comes to dealing with people? Why do so many of the entrepreneurs I talk to constantly complain and bemoan problems with regard to getting employees to perform at their peak potential?
From my personal experience, I have discovered four important questions that all employees (or even subcontractors) need answer in order to excel on the job.
1 – Where are we going?
People don’t like uncertainty. They like to know what to expect. What would happen if you hired an employee but didn’t tell them when and how much they’d get paid? They would probably never start working for you, right?
And yet, this is the same mistake we often make with regard to explaining where we’re heading as a company.
What do Walt Disney, Steve Jobs, Steve Winn, Thomas Edison and Elon Musk have in common? They all are/were brilliant at helping others see their vision of what is possible. They can see the future and get others to buy into the possibility. Without this buy in from their teams, not one would have had the impact they did on the world.
It’s your role as the leader to…
1 – Create a vision for the future of your organization
2 – Effectively communicate that vision to your team
Once you’ve created the vision and effectively communicated it to your team; now is the time to ensure they understand the why.
2 – Why does it matter?
Sadly, the vast majority of employees today don’t understand why their role is important and how it connects with the big picture within the company. Without guiding each person on your team to make this connection – it is difficult for them understand how the sometimes seemingly meaningless tasks they do each day makes strides toward the company goals.
In Daniel Pink’s best-selling book, Drive: The Surprising Truth about What Motivates Us, he explains why and how to use purpose (or the why) as a motivator.
Define the Purpose – Take steps to fulfill employees’ natural desire to contribute to a cause greater and more enduring than themselves.
Communicate the Purpose – Make sure employees know and understand the organization’s purpose goals not just its profit goals. Employees, who understand the purpose and vision of their organization and how their individual roles contribute to this purpose, are more likely to be satisfied in their work.
Place Equal Emphasis on Purpose Maximization and Profit Maximization – Research shows the attainment of profit goals has no impact on a person’s well-being and actually contributes to their ill-being. Organizational and individual goals should focus on purpose as well as profit. Many successful companies are now using profit as the catalyst to pursuing purpose, rather than the objective.
Use Purpose-Oriented Words – Talk about the organization as a united team by using words such as “us” and “we”, inspiring employees to talk about the organization in the same way and feel a part of the greater cause.
3 – What is expected of them?
Most entrepreneurs assume new hires are being properly trained. However, according to a recent study, only 66 percent of companies train their new employees, almost half (42 percent) of companies don’t identify clear job titles/expectations, and only 39 percent of companies set milestones and goals for career advancement.
You need to ensure that each person on your team has a clearly defined role statement – one they buy into. One of the simplest ways to get employee buy in is to allow them to provide feedback and help write/re-write their role statement. (Find a sample of one of our role statements at uglymugmarketing.com/careers.)
When clear expectations are set, employees can:
–Understand the specific tasks and results they should be delivering
-Understand why their work matter, and how it connects with the big picture
-Understand how well they are performing
-Know where to go when they need help or support
-See the gap between their current and desired performance
4 – How/when you will measure?
Without systems and processes in place for measuring results, you have no way of knowing if progress is made.
As Peter Drucker used to say, “What’s measured improves.”
For employees to thrive, they must have a clear understanding of how their performance will be measured. Over the years we’ve experimented with numerous ways to measure employee performance, from daily reports to weekly goal review sessions to monthly performance reviews. We discovered a combination of all of these methods of measurement seem to work best.
Here’s how we do it:
Monthly Performance Review: We conduct our monthly employee performance reviews based on each individual’s role statement. We begin by having the employee rate themselves in each of the core areas they are responsible for (as outlined on their performance review) and then we meet to discuss and review their performance based in each of the core areas. This process of a monthly performance review keeps them in tune with exactly what is expected of them.
Weekly Goal Review: On Friday each member of our team submits their goals for the upcoming week, as well as a status update on their goals for the current week. These weekly goals directly correlate with how they’ll be rated during their monthly performance review.
Daily Update: At the end of each day, each team member submits a daily update. The information submitted in these daily updates varies from role to role, but the primary objective is to answer these questions:
-What did I get done today?
-What are my main objectives for tomorrow?
-Where am I stuck?
-What questions do I have?
Answering these questions each day not only helps ensure each team member is maintaining the proper focus, but also provides outside accountability.
These four simple steps will not only help your business thrive…but also, the people on your team. When everyone is moving in the same direction, pushing for the same objective and they understand why it matters, you’ll be surprised by how natural business growth occurs.
Ignore these four steps however and each day will be a struggle and sheer drudgery. Invest the time today to focus everyone in the same direction and you’ll enjoy the dividends for years to come.
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