What’s the differentiator between good companies and great companies? Businesses are spinning up everyday and many of them are enduring success while others fold within the first few years. Some research suggest that nearly 50% of business startups will not make it past five years and 75% of business will close within ten years. What’s the make it or break it for a company? There are many schools of thought on how to run a business. I could put together a group of ten business consultants and a variety of opinions would formulate on how a business can endure success. In my short career, I’ve determined one of the most important pieces of a great business is putting your people first.
Without great people, you may just have a product. Without a great product, you may just have people. The two go hand and hand, and there’s something to say about efficient operations management to help profitability, however, a company’s greatest asset is its people. There has been a tremendous amount of case studies looking at companies like Zappos and how they’ve grown so quickly doing something that has been done for a decade (online shopping). Zappos has one of the lowest turnover rates among businesses their size and understands the importance of company values.
There are two components to understanding what it means to be people focused. First, why is being people focused important and second, what steps does a company need to take to become people focused? Profitability is essential to the sustainability of a great business. I’m not arguing to eliminate profit margins and forfeit profitability of the company. Without profits, you can’t invest in your employees. There’s a balance that needs to be determined. Being a marketer, I’m always thinking about the experience customers have with your brand. How do they interact and why are they loyal to your brand? There’s a Publix near my home I like visiting. Not because it’s better than all the other grocery stores in my area but because their people are friendly, they’re familiar faces when I arrive, and I can count on their great customer service. When employees are happy, it resonates with customers. When you call Zappos, it seems like everyone is happy and having fun. Their service is contagious and it starts with their people. Do you want to increase profits, increase your employee’s happiness and I assure you great things will happen for your company.
I’m sold. I’m ready to become people focused. What do I do? Company culture is a big piece of becoming people focused. What does your culture look like? If you immediately can tell there’s issues (maybe even underlining issues among management) then you may want to consider hiring a consultant to spend time with your organization and draw up recommendations. It starts with how the employees feel when they come to work. This is the first start. Next, you need to evaluate your benefits. When employees are stressed about how they’re going to pay for healthcare or feel guilty staying home with their sick kid, then they will be less likely supporting a company that doesn’t understand the challenges of navigating the work/life balance. Provide better healthcare. Have a rewarding PTO policy, establish ways for teams to socialize and build comradery. Did you know Zappos pays their client services team some of the lowest wages in the industry but still has the lowest turnover? It’s because they understand the importance of the person who is ultimately the driver to success in their organization. They can’t afford to give away free healthcare and pay high wages so they substitute. When employees see the employer’s efforts to try, the employee will reward the company with hard work.
If you’re a business owner or top-level executive at your organization, consider how you may become “people” focused. Running a business is so much more than just making money, you have a responsibility to the people you employee and the customers you serve. Think about that as you finish your 2016 budget analysis.