Managing People

The first tenet of business should be, “People do business with people.” This statement applies to your relationship with your banker and partners. It applies to how you market to clients and manage their accounts. It applies to those who supply inputs to your business. But it also applies to the people who work for and with you in the business.

The reason that statement is profound as applied to your business culture is that it makes all these transactions personal. Whenever you hear someone say, “it’s not personal, it’s just business”, you should cringe. We live in an age when increasingly people want to know who it is they are buying from. Food supply chains are not only linked more and more they are overlapped through personal relationships. These bonds lead to loyalty, better communication and personal commitment.

Employees

Even a small business will likely need employees or associates to “git’r done!” Smart companies embrace this need as an opportunity to gain continuity, innovation and growth to the business. If these are outcomes you might value in your endeavor, you need to apply measures that lead there.

Don’t think of your business in terms of money and units sold, etc. Think of your business as a culture. Similar to a family or community your business will be made up of people who have different strengths and weaknesses. They can play different roles; they can be so different and yet your business should appear to run seamlessly. Your challenge as a manager is to first identify the roles and second get the right people in the right roles.

Organize your business by establishing an organizational chart. Start by identifying all the essential functions and then put names there to identify who is responsible. But as a manager you must take an additional step. You need to make sure those responsible also have sufficient authority to do what needs to be done. This means letting them know they are expected to make decisions and get the job done. Take the approach that we’re all associates in the business. Instill a sense of pride. Ask their opinion and consider their good ideas seriously. The tone is set from the top. If you see your business, its suppliers and customers as a community of people acting to common ends, a culture of interdependence and pride can develop.

Use benchmarks when establishing wages and salaries. The business must show a net profit but at the same time, your employees are so important that you must be sure the pay fits the job and the person doing it. Seek out advice if needed when trying to get the pay right. Be sure you pay yourself. Don’t forget benefits. Talk to your tax consultant about setting up retirement accounts if the idea applies. Money and benefits will not be the most important day to day reason your best people work for you. But these things rise to the top occasionally.

Consider profit sharing or other incentives that vest your employees in the business growth and customer satisfaction. Help them improve themselves financially and you foster a culture in the business where everyone takes ownership.

Family

There is one giant pitfall (among the many) lurking out there for many an entrepreneurial enterprise. That is the tendency to abuse family while lurching toward your goal. These efforts are so all consuming that they lead to neglect of the things that matter most. Please don’t forget this.

Also, put family members on a business basis with the business, just as you would those coming from outside your family. While family relationships in business can be nettlesome at times, one way to avoid problems is by defining the relationship in the business. Here again, come back to that organizational chart and talk about it openly.

  • Define the roles and treat family members on merit.
  • Be careful of the pitfall of “too many chiefs.”
  • Don’t leave undefined assumptions about shares in the business or who gets credit for what.
  • Don’t play favorites with family and create frustration among other employees.
  • Don’t jam family members into the wrong roles just to bring them on board.

Conclusion

The major issue in employee or family relations is communication. Keep things open and appropriate. Ask for input an act on that seriously. Plan for successful and long term relationships because it is disruptive and expensive to replace people. Help yourself and your people by finding continuing education options and training. This shows commitment to them and induces an expectation as well. Budget enough…your people are your business.

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