Times sure are changing, with Toyota coming out 4th in the top 25 innovative companies, based on an analysis done by the Boston Consulting Group and published in the April 24th issue of Business Week. And what happened to the old standbys Ford Motor Company, Chrysler and GM? Instead of innovating, it’s safe to assume that the old standbys have been doing just that — standing by.
Toyota has been described as “relentless, breaking things so they need fixing; and in general being a tough company." Enter Jack and Suzy Welch, with their book on Winning and what it takes to finish first. Their advice takes heeding. It seems that being tough is the secret to having a successful company—but it's a certain kind of tough.
Keeping good employees seem to be tougher than ever. Business owners who I speak to in my classes are forever asking: how do you keep good employees, or where do I find them? My experience tells me that finding employees isn’t really that hard; it’s hiring them, training them and holding them that seems to be the challenge. All of these problems have little to do with finding them — it’s taking someone, helping them get in touch with their dreams and aspirations and then showing them the way.
Look at it this way, to paraphrase Welch, we have employers that want everyone happy, those that don’t care if anyone’s happy and then those who are somewhere in the middle of the road.
Employers that want everyone happy remind me of owners who tell me their salespeople keep dropping prices and ruining their margins. Closer observation shows us that this owner gives the product costs to their salespeople and basically let the salespeople determine the price the customer will pay. Typically these bosses seem easy to work for — never really take up any issues and treating everyone the same way. Often times they don’t pay commission and end up collecting a bunch of mediocre salespeople with no goals or aspirations.
Going back to dropping prices, these owners are allowing their salespeople to determine how much profit they’ll have left at the end of the year. This is a result of the sort of laissez-faire attitude. In addition, job balances not collected become receivables. This stems from a “nice” policy of "we can’t ask people to pay for the job before it’s done, what will the customer think of us?" And “we’re not like the others." We all know who they are. Most likely the customer, if they know anything about business, will think that the owner is smart and “takin care of business,” as the song says. When the cash flow stops flowing, the "everyone should be happy" owners turn in to the “nobody will be happy" bad boys and change the rules. They turn from happy to horrible in a New York minute.
The toughest are the “take no prisoner” types who you know from the get-go are bad. They have their own agenda, which only benefits them, are belittling, and don’t share any of their money. As the Welch’s say, they often get results but not much long-term. What they do get long-term is turnover and lots of complaints. The data is still out on Bob Nardelli, CEO of Home Depot; because many of the former company executives fled after working for him for a short time. Too tough?
In the middle of tender and tough is the boss who is looking for long term results. Let’s go back to our "mister nice guy.” First let’s take away the price book; sure there will be some complaints, but now we’ll be able to see who can and who can’t sell. If they can’t sell it may not be because they can’t — it maybe because they haven’t been taught and price is all they know. You’re going to have to do a lot of training quick but it will pay off in the long run.
What does it take? Determine store policy and stick by it. Statistics tell us that the number one reason why employees leave is unclear expectations. Let’s determine what you want and stick by it.
Set clear goals, determine what do you want from your employees, and help them get there. If they look promising, do what it takes.
Don’t treat everyone the same. Reward those who are outstanding and either educate the others or get rid of them. Give people a chance to get good by putting your money in training. If you treat everyone the same, the stars will leave and you’ll be left with compliant non-achievers.
Tough and consistent, setting goals for results. Determine your return on your investment and see what works.
The tough-and-tender combination attracts good employees and will help you keep them.