HOW TO TURN ROUND A BUSINESS: IT’S ALL ABOUT THE PEOPLE
There are a number of reasons why companies go under, in many cases it is attributable to external factors such as a challenging economic climate, increased competition or perhaps a reticence to evolve and respond to new technologies. Many of these factors are out of the control of the management team, but there is one element that senior figures can respond to and that is company culture and employee engagement.
It may sound like the ‘softer’ side of a business, that ensuring staff are engaged and empowered is a ‘nice to have’ not a ‘need to have’, and that senior management should be prioritising maximising profit and efficiencies, not wasting their time on ‘fluffy’ issues. Yet, the two go hand in hand. And a boss who neglects his staff will very quickly be tripped up by a drop in productivity and therefore, ultimately, company success and profit.
There is no denying that the primary reason that people go to work every day is to get paid. But it is not as simple as that. There are other factors that people consider when choosing an employer – it’s about developing a sense of identity, meeting people, and feeling fulfilled and valued. I have transformed a number of businesses that were at risk of bankruptcy and my main approach to doing this is through employee engagement. It is a cliché, but they really are a company’s most important asset, and there are a number of steps I advise putting in place in order to motivate a team to collectively strive for the benefit of the company.
Whilst it is important to ensure your senior management team are on board, it is the wider customer-facing staff who are the biggest asset – or potentially the weakest link as these will be the outside face of the company. It is essential that all of these staff convey a sense of contentment and belief in the organisation they work for, as they will be communicating this culture to existing and potential customers, suppliers and other stakeholders. Customer service should be the ultimate priority at all times, whether the company is thriving or struggling, and there are a number of ways you can guarantee this.
Firstly, empower employees. It may be daunting, but affording them with the responsibility to make business decisions will help them to feel valued. Staff are more likely to consider these decisions more carefully and evaluate the consequences before ploughing ahead. It will also separate the wheat from the chaff and highlight which staff are ready for management roles.
Furthermore, when they are at that level, encourage them to manage autonomously. Urge them to contribute suggestions and ideas on how to run the business, or make changes. Showing them you have faith in their actions and the decisions they make in the workplace is a great motivator.
Many organisations, particularly ones that have been around for a long time, will have a ‘middle management’ concrete level which has evolved. When looking at ways to cut costs and save a business from the risk of bankruptcy, I very often remove this middle management concrete level. In many instances, they are simply ‘filler’ and the more junior members of staff can take their place, make the decisions they tended to make themselves anyway, but without requiring a further rubber stamp.
Be open and honest: Keep all staff informed on key decisions and company news. As long as news isn’t confidential, the team will appreciate being told of plans, whether it is new hires, company acquisitions, or taking the business in a new direction. People are easily alerted to the ‘cloak and dagger’ approach and suspicion is likely to breed resentment. Keeping them informed by regular meetings (not purely over email – it is important to maintain face to face contact with the company) will ensure they feel part of the team and valued by senior management.
There are a number of practical initiatives you can introduce to boost staff morale and therefore productivity. For example, staff reward programmes. Whilst many managers look at the company profits and balk at the idea of dishing out financial bonuses, this is not the only way of rewarding staff for their hard work. If you have the option, you could reward staff with shares in the business; this will not have a negative impact on the bottom line immediately, but is likely to encourage commitment and loyalty, not least because a long term benefit can be seen. Other affordable ways including instigating an internal award scheme, along the lines of an ‘employee of the month’ initiative. The reward can be small, but will encourage an element of competition amongst staff and raise morale. At Briggs Equipment, where I am currently chief executive we operate an ‘Above and Beyond’ reward scheme, where employees can be nominated by their colleagues, not just their line managers.
When I joined Briggs Equipment, it was making a significant loss. In the years since I joined in 2006, we have added £3 million to the bottom line of the company every year. While many factors played a part in this success such as maximising business efficiencies, I put the majority of this achievement down to the people. By providing staff with the freedom to make decisions (and accept that they may sometimes make mistakes) and allowing them to reach their potential, they will feel respected and valued, and the benefits to the company culturally and finically will soon be experienced.
About Richard Close
Richard Close is chief executive of Briggs Equipment, a materials handling company which has the largest multi-skilled engineering workforce in the UK. Richard joined the company in2006 when it was experiencing a £10 million annual loss. Six years later, in 2012, Briggs was making £5 million profit, and recently acquired one of its competitors. Richard has attributed this growth to the people within the company, and how a focus on people management and employee empowerment led to an attitude where staff wanted to be responsible for helping to turn the company round.