The biggest reason Small Business Owners avoid these steps is that they require time, effort, organization and focus, none of which Small Business Owners have in abundance. The problem is that these steps absolutely make the difference between a great place to work or a hell-hole, growth or stagnation, success or failure.
What commonly happens is that the business is developed primarily around the product or service on offer. That becomes the focal point and every effort expended is in service to that. Understandable. But, there are certain things that are forgotten, pushed aside or ignored in this concentrated effort that are the root cause of chaos, headaches, massive frustration, no possibility for growth and likely demise.
A. Standardizing processes and systems that will run the business
Simply put, the business must run in the way the Small Business Owner expects it to be run. If those expectations aren’t consistent, clear, and connected to the company’s mission and underlying values, results and vision will be out of alignment.
In order for those expectations to be carried out, the team needs to have tools, processes and procedures that will become the system that drives the business with a minimum of the Small Business Owner’s involvement. Human beings do periodically get confused and miscommunicate. That happens. But, if the environment is standardized, those instances will be a blip on the radar compared to the disaster it would be otherwise.
- Make sure that everyone is clear on the mission and values of the business and establish clear quality parameters so that all staff know the level they’re expected to meet.
- Make sure that all of the repetitive steps in the operation are clearly documented and followed on a daily basis.
- Chart the process flows to clarify responsibilities, boundaries and critical decision points. This will also give you the basis on which to determine if you can add a new process flow into the mix and what will need to change as a result.
Risk of not standardizing processes and systems that will run the business:
- Processes are executed according to interpretation, assumption and hearsay which has the power to take the business down.
- Time is wasted when processes have to be repeated in order to correct errors – time and materials cost.
- Clients will become dissatisfied and leave – lost revenue.
- Employees will resign from frustration and stress – replacement cost
- The Small Business Owner is constantly involved in fire fighting leaving no time to grow the business.
- Key staff will leave taking valuable, undocumented experience with them.
- Potential buyers will choose a business that is organized over one that isn’t.
B. Effectively engaging with the team
For the most part, people want to do a good job. They want to feel like they’re trusted, part of the team and that they have value. They want feedback, look for opportunities to take on more responsibilities, and they want to be accountable for their assigned work.
What often happens is that the people are brought into the business to handle specific tasks, and they get pigeon holed into those slots. The so-called “team” is really a bunch of disjointed people that aren’t amalgamated into a cohesive unit. So, they’ll do those jobs until they’re bored or frustrated out of their minds and then they’ll leave, not much better for the experience.
The opportunity here is to see the staff as the valuable asset they are and partner with them by soliciting their ideas, finding out what excites them in their work – play to their strengths. It’s not easy for many Small Business Owners to let go of control and allow their staff to take more responsibility for the day-to-day work but that is the end-state objective of all Small Business Owners. That’s the freedom doorway that creates the necessary time for the strategic thinking that will grow the business.
- Now that the procedures are all documented, incorporate them into an online tool that will allow each person to check the box indicating that they completed their assigned steps. It keeps the procedures integral and allows the staff to be accountable for their responsibilities. It also keeps the process flow moving, massively improves staff communication and gives the Small Business Owner oversight into the day-to-day without having to be directly involved.
- Look at the daily decisions that are made to determine which can be redistributed from the Small Business Owner out to the team, giving them more independence, a sense of ownership and empowering them to create an environment of process improvement that is driven by the staff.
- Hold quarterly meetings with the team to discuss the issues that have come up, how they were resolved, what changes were made to the procedures to ensure that the problems don’t resurface and what ideas they have for improving the flow even more.
Risk of not effectively engaging with the team:
- The full responsibility of the business will remain on the shoulders of the business owner which isn’t sustainable.
- Operational problems will continue to hound the business resulting in lost revenue and higher costs.
- Staff turnover will be high - churn.
- The business reputation will suffer resulting in a lower quality candidate pool
- Employee morale will be low, staff disputes will increase, and the work environment will become toxic.
C. Creating a performance review program for the staff
When people know what is expected of them they will usually meet those expectations and sometimes exceed them. Putting structure around each job type and establishing measurable goals and objectives levels the playing field for the achievers and the non-achievers.
I’ve heard many stories from Small Business Owners who are befuddled at how to handle a difficult employee situation which is made more trying because nothing is in writing. Without documentation, the situation will drag on, distracting everyone, with very little hope of being resolved.
- Write detailed job descriptions for each job type and get buy-in from the staff.
- Ask each staff member to write at least 3 measurable goals that are achievable in either 3 but no longer than a 6-month time frame and hold quarterly or semi-annual reviews.
- Document employee ill-behavior or poor performance situations including the date by which the performance needs to improve and the consequences for not meeting that date.
Risk of not creating a performance review program for the staff:
- Difficult employee situations will continue to deteriorate and negatively impact the entire staff.
- Job boundaries will be unclear and staff disputes will ensue.
- The business runs the risk of losing good employees if they don’t know where they stand.
- Increased potential for legal action from a disgruntled employee.
- Employee engagement, across the board, will flag causing an increase in operational errors.
I’ve had the opportunity to speak to many Attorneys, Business Brokers, Investment Bankers and Consultants who confirm these assertions. It’s especially evident when the Owner wants to sell and expects the transaction to take place as soon as possible. The unfortunate news bulletin they receive in return is that they have a lot of work to do to prepare for a successful sale which, among other things, includes implementing these steps.
If you need help with strengthening your back office, I highly recommend that you reach out for support. It will not take as long as you think to implement these steps and the expense will be a fraction of what it will cost if you don’t do it.