In the long run, put profits ahead of people
August 1, 2008
I recently taught a financial benchmarking class in Sacramento, Calif. While there, I went for a long run.
As I was running, I noticed a sign stenciled in the sidewalk.
“People before profits,” it said. My initial reaction was that’s wrong. Without profits there are no people.
Since I noticed that statement near the beginning of my run, I had plenty of time to think about whether my gut reaction was right. Two hours later, I knew it was correct.
Here’s my rationalization: If a business owner puts people ahead of profits, many times there will be no profit. Without profits - and the conversion of those profits into cash - there will be no people. If you hire people because you like them, get along with them, think that they will be a good fit for your company culture or any other reason other than their productivity will help the company generate more revenue and profit, you are putting people before profits.
If employees are not productive, work too slowly or have too much free time, they are costing your company more than they are generating in revenue and you are putting people before profits.
Be careful of those people you hire whom are productive only during the “honeymoon period.” They find out about your organization, how it works and discover how little they can do and still get away with it.
PoisonThese are poisonous people because they get everyone to like them and their joviality and niceness can fool managers. Others become like them and become less productive as well. Their niceness is leading your company down the path of non-productivity. Then as the months and years pass, they get less and less productive but stay ingrained in the corporate culture. You can’t imagine firing them. But you don’t need them.
The reality is that you have a contract with your employees, whether it is written or not. You agree to pay them. They agree to work for their wages.
This is not to say that you can’t be friendly. You can. You just have to have friendly expectations of productivity.
I learned the hard way that altruism doesn’t work in business. I’ve kept people who weren’t productive too long. I talked with them, gave them goals, disciplined them and hoped they might turn around. I spent hard earned money with little to show for it.
The hard lesson: Always put profits before people. And make sure your people are productive.
This reminds me to mention a few other personnel tips. Now is a good time to look at your office staff. Are they being productive? Look at their overtime hours. If one of your employees is constantly spending more than 40 hours per week on the job, then find out why. This may be a sign that he or she needs help or it may be a sign that he or she is not fully using her time on the job productively.
If rapid growth in sales is one of your goals, you probably will need to hire additional personnel. This is the time and place to plan for it. Do you need additional technicians? Additional installation crews? More office personnel? Plan when you are going to hire these additional employees and figure out how you are going to get them. Good people rarely just appear; you have to recruit them. Put a plan in place to do it.
Copyright Ruth King. All rights reserved. Write to Ruth King, 1650 Oakbrook Drive, Suite 405, Norcross, GA 30093. Call (800) 511-6844; e-mail firstname.lastname@example.org.