Have you ever read Michael Lewis’ book The Big Short? It can be scary reading, even now, after the market has “recovered”. Though the reality behind that recovery may not be very firm, as I suppose we are still discovering, even now, years later.
But the book is a fascinating look at the systemic issues behind the subprime mortgage bond crisis which wreaked so much havoc in our economy a few years ago — as it continues to do.
But one thing is clear: human behavior is driven by incentives.
Speaking of incentives, there’s a deadline looming for our clients with a corporation structure: March 16th is the day we need to have your business tax return filed. This is NOT for those who use a “pass through” entity like an LLC, but rather for those who operate as an S-Corporation or a C-Corporation (though it should be noted that some LLC’s can “act” as an S-corp, but still maintain the LLC filing structure).
If you have questions on this, here’s the number to call: (205) 715-4488
Or visit https://cpaofbirmingham.com//contact
Now, back to the other stuff: Lewis makes the compelling argument that the actual incentive structure within Wall Street firms created a rich environment for self-delusion and greed, on a massive scale.
Not nearly as perverse of course, but your employees are also driven by a series of incentives (just like you, and me too!), and it’s critically important to think through these incentives for how you manage (and whether you keep) your employees.
Here’s what I mean…
Randall Hancock Discusses A Company Culture Problem and a 3-Step Plan to Employ a Great Team
“When planning for a year, plant corn. When planning for a decade, plant trees. When planning for life, train and educate people.” – Chinese Proverb
The success of your business depends largely on who you hire. You can spend all of your time developing marketing materials, and sales strategies, setting goals, investing in the latest technology and creating infrastructure–but if you hire the wrong people, you are simply not going to grow your business as you would hope. It’s not just “the economy”.
The wrong people damage your productivity, customer service, teamwork and sales. Ultimately, they will prevent your company from reaching its profit potential.
Look at your current staff. Odds are it is comprised of these two types of people:
1. People Who are Keeping Your Business Where it is Now
2. People Who Can Take Your Business Where YOU Want to Go
The ugly truth is: Your people usually can’t be both. And the right people today may not be the right people tomorrow.
I’d like to suggest a 3-step plan for changing this paradigm in your business that will help you employ a great team…
1) Acknowledge the problem.
Until you realize your people are holding you back, you’ll struggle to grow. No matter how much money you spend on advertising, inventory, technology, consultants (or yes–accountants!). Systems don’t work when you have the wrong people running them.
That’s why you need to take a hard look in the mirror, and implement a standards-based review of what’s actually occurring among your people.
2) Bring in new blood.
Make it your objective to only hire the right people for your open positions from now on. Many hiring experts might tell you that employee referrals are the best employees–but that’s only true if the employee doing the referring is a winner! The “right” people are those who fit your culture, their team and the job you are hiring them to do.
In fact, sometimes bringing in new staff sends a signal to current staff that their job isn’t guaranteed.
3) Create renewal.
You don’t always need to fire people for renewal to take place. Usually they will end up quitting on their own; especially once you start surrounding them with motivated, productive, team-players.
When your “mis-hires” and “workplace survivors” eventually quit, you can replace them with more of the right people. Though the earlier you do this, the sooner your business will start accomplishing the goals you’ve set for it.
Next week, I’m going to blow up some of the standard thinking in regards to interviewing and hiring your “new blood”. Be on the lookout.
Feel very free to share this article with a Birmingham business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for Birmingham families and business owners. And we always make room for referrals from trusted sources like you.
Warmly (and until next week),
Randall Hancock
(205) 715-4488
Randall M. Hancock CPA, PC