How to Optimize Your SMB Performance


Part 1

We all know we need the best possible team to win in business, especially in SMB’s. However, if you look at the following, you’re going to freak out. Its not happening. Please believe… A+B+C=D

  1. “58 percent of managers said they didn’t receive any management training.” 1
  2. “They were promoted because they were good at what they did, and not necessarily good at making the people around them better. “2
  3. Regression to the mean3 is a fact and it is thrown in here to consider other frightening restraints screwing up work.
  4. “No matter how you slice the data, in the big picture somewhere around 60% or 70% of employees are simply not working ‘say it straight’ as hard as they could be… Gallup data shows 30% of employees …’engaged’… Towers Watson data shows 35% ‘highly engaged’… Dale Carnegie data shows 29% ‘fully engaged’…’these aren’t small studies’ …annual cost in lost U.S. productivity of more than $450 billion.“4

So, the deal is… one of three who do work, is promoted to lead the 7 who don’t work.  Most companies see a great lion tamer, so they want him/her to run the circus. But, the companies are full of good news… they tell the lion tamers they won’t have to sit through any of that boring training.

A thumbnail about the financial impact of this idiocy: My experience shows me there are typically 5 to 7 employees per supervisor in a typical company. There are about 4,809,7005 business that meet that criteria in the US. In such case, if everyone became “Engaged,” that would mean an average of $93,561 additional revenue for every business in America that had supervisors.  You have to assume you’ve paid for the overhead already so this 94K would flow right to the bottom (EBIT).  I’ll take that.

All we have to do is perform better at work doing our job by training and developing people.  We are supposed to be doing that anyway as well as mentoring.

With a 94K payback, you could pay for a lot of charm schools, professional improvement classes and MBA’s and still make a nice buck and huge improvements.

Cites: 1, 2, Legendre and Gauss 3, Forbes 4, dmdatabases.com5


Part 2

Training and developing people SMB style – eliminate the zombies

How do you train and develop people to get 94k back in return? (See Part 1)

There are many reasons to try and do a better job both in management and team building. But…

Just about everything you read soothing says, “Good Management = Happy employees” loaded with ideas for employers to use on plane with “Oh, don’t forget our safe-space and participation trophies.”  In response employers say, “Come on! Life is tough out there for we SMBs. We need to stay in business. The reality is we see tons of zombie like employees who aren’t motivated or trained when they come to us. They have an incredible sense of expectation and entitlement to boot. They are only invested in social networking. Where do I get Managers and supervisors out of that population? We’d love to have some workable development system but that would cost us a fortune – and may not work.”

They have a point about cost. You read the latest BLS bulletin you see that it costs $34.72 per hour average wage to field an employee in private industry. That can take your happy face off fast. It makes it one big reason why people can’t afford to invest in people, team build and train and develop. As an example of cost, a decent health plan for a single (age banded) employee, costs from $9,000 to $15,000 a year for coverage in this area. The minimum wage is climbing to $15 per hour. There is mandated paid leave and any number of further employment expenses.  Typically, when added up, an employer spends about 31 cents more in overheads for every payroll dollar offered. You can see better why there is a bitter divide from the expectations of employees vs realities of employers.

Conversely, it’s undeniable and certainly logical; good management breeds happy employees and that has a serious positive financial impact. Studies prove lower benefit utilization, absenteeism, accidents, and errors and defects, voluntary turn over etc. all occur. But also results in more productivity, profitability, and even more employment applications and referrals to name a few. So the problem is you have to kind of jump off a small investment cliff to see it work.  

Well, without going broke, how do you mentor and develop people including those destined for management? How do you create a formal program that works? What do you make your people read and study to get ahead? How do you encourage progress in employee traits and behavior? How do you make a professional, well thought out and effective on boarding program?

There is no magic. Sharpen your questions and prepare to do some hard work. You need your best people to teach others. Both the teacher and students will be better for it. In fact you even have to develop both. The old saw “CFO – Waddayado, if we teach ‘em, learn ‘em up and then they leave? CEO Answer – What if they don’t?” is still intensely relevant. You need to do this. You will certainly not have the best team led by the best supervision otherwise and that would be catastrophic.

(Read part 3 to get some ideas how to do this)


Part 3

Resolved: You need committed and eager employees. To do that, the following must become axiomatic; 1) Both employees and managers require development; not just one, not just the other, both 2) It is amazingly costly Not to do this 3) This requires consistent attention  and 4) this is an ROI project.

Scenario 1

Here’s your new hire paperwork, finish it up, and go see Eddie right over there he needs to talk to you and tell you what to do. Welcome aboard. Eddie? Yeah, he’s the bald guy over there on the ladder, he’s your manager. See ya.

You’re excited about the job but your also thinking, “Uh, this is my career – not a summer job” In a few weeks, after the novelty of the new job wears off, you are starting to feel somewhat detached, unenthusiastic and disengaged. You keep looking at the clock… Yikes you are displaying the signs becoming a disaffected work zombie. That makes nobody happy.

Compare that to a prearranged path of activities and information. It acts like a syllabus to tell you about all they’re going to offer you. They call it an onboarding and it lasts a really long time – many months. There are stops on the path they include information about what those stops actually mean to me, an orientation, training on customer service, with a movie about new company, its history, my job, job description, meeting supervisors and mentors, discussing how to do well in my new job along with expected productivity, what that will mean for me, incentives, talking about the future, my skills now and what we can do to improve, a career plan, tuition programs, paid for MBA, Professional degrees, benefits, contracts, the handbook, what to do if I have a problem, an injury, to improve my habit of being disorganized and training programs galore, even on line. They’ve thought of everything. I’ve only covered some of it. This place is amazing.

There is a much better chance that the robust formal onboarding program described above will lead to an engaged employee. In turn, an engaged employee, will be more productive and better socialized to be successful in the company. This is a reality of the current working world. And, how much did it cost?  Perhaps, less than you are spending now, as much of this approach can be mechanized and contained in the HRIS system. How effective is it? $94,000 of additional revenue for the average company (See part 1).  In addition, there should be reduced turnover, more job applications.

The idea is you never quit onboarding until a new employee is considered a complete and productive member of the company. After that other training, quality enhancement and development takes place.

Can’t be done? The tools available to companies are amazing. To get better managers and supervisors there are training programs.  The first step is to start out to evaluate numerically what type of manager or supervisor they are. Yeah, they were great at their old job, but what being a manager. Tests can evaluate their performance. After the score they get trained based on their shortcomings. They keep getting retested to see if they’ve gotten better or worse after training. Over a period the capabilities of a good supervisor will become apparent. If we make supervisors better, employees will be satisfied.


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