This is the fifth installment in a series on Building a High Growth Business and scaling it up. Click Here for Part One, Part Two, Part Three and Part four.
The managers: Keeping and Growing the Dream Team
It’s often said that “People join companies but they leave managers.” This is supported by a research by Gallup, stating that, “Managers account for at least 70 percent of the variance in employee engagement scores in various organizations.”
If this holds true, and I believe that it does, then what does this mean for organizations and business leaders? It means that for you to keep your teams engaged and happy, the one thing you need above all else are great managers, not free food, not state-of-the-art nap pods, and definitely not yoga classes (although these too are good creature comforts).
But great managers are not just born; they come to be so through continuous advancement in their skills and those of their employees.
As the company scales up to more than 100 employees, reaching a critical point where everyone doesn’t know everyone else’s name, it becomes even more important for the leaders to build a capable team of middle managers. As mentioned earlier in the ‘Building a High Growth Business’ series, failure to develop sufficient leadership is one of the 3 biggest barriers to growth.
How do you keep your talent engaged?
So what does a great manager need to do to keep their team engaged and happy?
To answer this question, Google analysed different people-decisions and what the data showed was quite interesting. They found that periodic one-on-one coaching rather than superior technical knowledge ranked as the #1 factor to being a successful manager.
From our experience, great managers must focus those important coaching sessions with their “direct supports” (A better term than “direct reports”) on 5 topics that represent the 5 main activities of successful managers. They are listed below in order of importance:
- Guide your team to play to their strengths
- Don’t frustrate or demotivate.
- Set clear expectations and provide a clear line of sight
- Give recognition, and show your appreciation.
- Hire fewer people, but pay them more.
1. Guide your team to play to their strengths
What ultimately sets great managers apart from the rest is that they help their people to play to their strengths. To understand how to do this right requires a refined definition of what constitutes a strength.
A strength is not just something that you are good at; it only serves a strength if it literally gives you strength, energizes you and leaves you animated. On the flipside, a weakness is something that, although you may be good at it, drains the life out of you.
Therefore, one of the key functions of great managers is to help individual employees refocus and prune their jobs, so that as time goes by, they focus more on the activities that strengthen them and less on those that make them weak.
Although there’ll always be some part of anyone’s job that is draining, companies that can do a better job of minimising this will in the long run, have more motivated teams.
The strengths guru, Marcus Buckingham, argues that each one of us has unique strengths and work; an area of life we spend most of our time in, should be one of the places we can express them and contribute them to the world.
He suggests a way for people to understand their unique strengths by:
- First, taking a couple of weeks to document all the activities that they either love or loathe.
- Second is to pull on the things you love, weaving them deliberately into the fabric of your daily work.
- Finally, to build teams by seeking out people who love the things you loathe, and partnering with them.
When Lois Melbourne, while serving as CEO of Aquire, (A subsidiary of PeopleFluent) carried out this exercise with her programmers, she identified and eliminated any activity that kept them from their primary strength; programming. She then used the remaining list to create a Job Scorecard for a new position, to be filled by someone who genuinely loved to do what the others loathed. The result; instead of hiring more, extremely-hard-to-find programmers, she ended up with a lean, happier and more productive team of loyal programmers.
Whenever one of your departments says they need more help, instead of throwing more of the same people at the situation, why not try Buckingham’s approach. As Bobby Fischer, the legendary chess Player, once said, “To win at this game, all you need is to capitalize on the strengths of each piece and time your moves just right.”
2. Don’t frustrate or demotivate.
Great managers are less concerned about motivating their team and more focused on NOT demotivating them. For them, it’s more important to prevent the hassles that block the team’s performance, especially related to the conduct of other people and the processes in place.
The number 1 demotivator for talented A players is having to put up with those that slow them down and suck their energy. For this reason, “The best thing you can do for your employees is to hire only ‘A’ Players to work with them. Excellent colleagues surpass everything else,” as put by Patty McCord, former chief talent office at Netflix.
Sometimes, removing the hassles may involve ‘firing’ a client. Having unreasonable clients who mistreat your employees and disrupt your business, will only drain your team energy. By getting rid of them as soon as possible, you gain more respect with your team as a manager. The negative financial blow will usually be countered by the immediate rise of moral and overall productivity for the team.
As for the processes, find out if your team has all the necessary tools and resources needed to get the job done. Are there archaic processes and procedures that frustrate them? Do you bring in a Lean expert to help streamline existing processes or even design new ones? Where are you experiencing unnecessary delays?
As an effective manager, your focus should be on ways that make your team’s job easier by adopting a servant leadership approach. Fathom, a digital marketing agency in Cleveland, uses “direct supports” where the manager supports their people instead of the traditional “direct report” (where the team reports to the manager), to reference a manager’s team. It’s an interesting twist that could guide managers all around the world to better support their team and I hope the term spreads.
3. Set clear expectations and provide a clear line of sight.
Can your employees explain how what they are doing fits into the company’s strategy, purpose and Brand Promise?
A crucial job of great managers is to explain how their people’s work contributes to the bigger picture and then guide them to align their individual priorities with those of the company.
Once everyone understands their role and contribution, the managers need to set clear and consistent expectations for the outcome of their work. By clearly defining WHAT and not the HOW, the managers allow the employees autonomy to find their own way of getting things done. As Dan Pink writes in his book ‘Drive’ that autonomy is one of 3 main drivers of motivation in people.
The struggle for most managers is defining adequate and measurable targets for their people. We will dive into the details of how to do this in another part of the series. But in general, it involves 3 specific things:
- The Critical Number —Define the main hurdle that each team or employee must fix during the quarter.
- KPIs —2 or 3 Key Performance Indicators that objectively and clearly show people if they had a productive day or week.
- Priorities — Pick a few things to focus on in the next quarter to help achieve the Critical Number and to improve on a specific KPI.
By defining these individual outcomes, you help align your team with the company’s strategy and goals and it leads to more productivity and efficiency.
4. Give recognition, and show your appreciation.
Psychologist William James wrote that, “The deepest principle of human nature is craving to be appreciated.” It is very difficult to feel motivated or to do great work when you don’t feel that someone cares and appreciates what you are doing.
A recent study shows that for people to be productive and happy at their workplace, they need to experience more positive interactions (praise and appreciation) with their managers than negative ones (criticism, reprimands). The ratio in fact is at least 3:1. (Side note— The same study advises that for marriages to work, they need a ratio of more than 5:1). So it’s important to make it a habit to thank people each and every day, verbally or even in your emails.
The way to do it varies greatly; private vs. public or from superiors vs. from peers etc. Test different approaches and see the triggers that best work for the individuals in your team. For more ideas on how to create a culture of appreciation and recognition, read Chip Conley’s book, “Peak: How Great Companies Get Their Mojo from Maslow.”
5. Hire fewer people but pay them more.
If your company does not offer competitive compensation, it becomes challenging to attract and keep the best talent. The key to affording higher wages, especially for the frontline workers, is to find ways to lower the total wage cost as a percentage of revenue.
A good example is the storage- product retailer company, The Container Store, who have been named on Fortune List of Best companies to work for 14 years in a row. The foundation principle they stand by is “1 equal 3” — where they rather have one great person to do the job of 3 good ones. They do this through a rigorous selection process and once they get the best talent in the door, they pay them above-market rates and invest in their training and development to improve their productivity.
The Company Chain hires only about 3 percent of all applicants and they say they pay their salespeople 50 -100 percent more than the retail industry average. They also provide at least 263 hours of training for all 1st year full-time employees whereas the industry standard is 7 hours.
How you structure the compensation; fixed or variable, should fit your company culture. Look at your Brand Promise, your business Model and your core values and use them as a guide to you in how you design your compensation plan.
Finally, when focusing on the key talent that drives performance, managers must do whatever it takes to keep them on board, which might include customized compensation packages. If one person wants more incentive based and less base pay, let it happen. If another wants more time off, so be it. ‘Fairness’ does not mean ‘sameness’. Being flexible and creative with compensation will keep your top talent happy and motivated.
Remember …..
Once you’ve hired your team members, it takes great managers to keep them engaged and engaged. Failing to develop these managers throughout the organisation can become a major growth barrier. By focusing on the five critical activities we’ve identified, you will groom great managers who can retain and grow their top talent.
