By Maurie Cashman
Strong management teams â€“ they are the key to strong companies that contribute tremendous value to a business, both in operating and in valuing that value to its eventual succeeding owner. It is probably the primary factor that I see as an issue when working with business owners in developing their ownership transition plan.
Over the years, weâ€™ve seen a shift in succession planning best practices, however. Organizations see the value in cultivating talent in middle and lower management. Today weâ€™ll talk about some ways in which you can build your teamsâ€™ value and in the process, build the value of your business.
Encourage Lifelong Learning. Having a growth culture gets better short-term results. It is also the strongest way to retain employees. When I think about a â€œgrowth cultureâ€ it is one that encourages learning on almost any level. I was fortunate to receive my MBA through a tuition reimbursement program from Land Oâ€™Lakes. I have a daughter that received her Masters in Communication Leadership with tuition paid by Drake University and a second who will receive hers from the University of Dubuque this spring. These are wonderful ideas that breed tremendous loyalty to an organization. Have you considered paying part or all tuition for continuing education for your employees?
Encourage Employees to Take Initiative and Risk. Many entrepreneurial types have a very difficult time giving up control and an even more difficult time embracing mistakes as learning opportunities. Having built your business you can become so enamored with how you have succeeded that you may be closing yourself off to new ideas. It is important to give employees the ability to take measured risks and to make mistakes. Donâ€™t bet the farm, but let them have some room to innovate. When their idea fails or does not meet expectations, do you jump all over them? Do you jump in and fix the problem for them? Or do you sit down and analyze the initiative, how it was implemented, what went well and less well and how they can learn from the experience?
Encourage Diversity of Opinion.
â€œOne can be very happy without demanding that others agree with them.”
–Ira Gershwin, American lyricist
Believe it or not, we owners do not have all the answers. As a matter of fact, we may have very few. What successful business owners do know is how to acquire a diverse team of top managers and advisors and to use them to the utmost. This can be intimidating for a business owner. The natural tendency is to hire people that the owner can control and even dominate. The real objective should be to find diverse people and be strong enough to accept and sort through the variety of opinions and approaches that these people will bring to your thought process.
Show Appreciation. What do you think most employees are motivated by? Money? Bonuses? Most studies I have seen and most of my experience has been that people are motivated by recognition. Recognition is a tricky business. Many are uncomfortable with public recognition while some crave it. What are you recognizing? Accomplishment? Achieving goals?
I had an interesting discussion with my son yesterday. I talked to him about how he felt about his college performance so far. As we talked about it I recognized him not for his grades, which were very good, not for his accomplishments, which have been significant. What I talked to him about was how proud I was at how hard he was working on his craft. When we got done he gave me a nudge and said â€œThanks Pops.â€ Solid Gold!
Incentives. Incentive should be very carefully managed. Well constructed incentive plans reinforce the actions you desire and reward the right actions. Poorly constructed plans create an entitlement mentality and can even become disincentives. If you have a plan, are their provisions within the plan that tie the employee more closely to both your company and its future success and value growth? If not, you may want to re-examine it.
Building and retaining a strong team is one of the most difficult and one of the most important things that you can do for your business. It is not something you do once and then walk away. As a business owner, it is probably the most important thing that you must do each day.