If you have more than ten employees, and an outside observer (like me) asks them confidentially to say in one word what their boss cares about the most, what do you think they will answer?
We’d like to think that answer will be “quality.” Or perhaps you might prefer “service,” or “customers,” or “employees” or “vision” or “culture.”
I often get the opportunity to ask that question indirectly because I coach the owner of a company, but in many cases may also be teaching a management class or leading a key executive group with his or her employees. Do you know what they think the answer is? “Money.”
I know very few business owners whose first concern is money. They aren’t fixated on it, but it just seems to always be the topic of conversations with employees. Take this conversation between an owner and a manager last week (slightly disguised for anonymity).
Q: “Why didn’t you get the compliance reports done for the last two operating periods?”
A: “I was covering shifts for an employee who called in sick.”
Q: “Why didn’t you bring in an on-call person?”
A: “No one wanted to do it for $10 an hour.”
Q:” Why didn’t you offer more?”
A: “Because that job pays $10 an hour.”
Q: “But when you are doing it, I’m paying you $24 an hour, and the compliance work isn’t getting done. Wouldn’t offering $12 or even $15 an hour to someone have made more sense?”
A: ” I thought you said that taking care of the customer came before anything else.”
It’s two different conversations. The employee is pleading that his priority is service. The boss isn’t disagreeing, but is pointing out that the delivery method chosen wasn’t cost effective. The employee only hears “money,” which in his mind is mutually exclusive with service.
The perceived conflict exists in most businesses. For the owner, taking care of the customer is of primary importance. He also realizes that he can’t take care of customers (or employees for that matter) for very long if he is losing money on each transaction.
It happens at every level. A master’s degreed employee recently told me “The boss says he can’t afford to have me wasting non-billable hours on side projects. I get paid $60 an hour. When he bills for me, it is at $150 an hour. I could be unbilled for two days every week and he’d still be fine. He just wants to make as much as he can.”
Actually, after overhead and benefits, if the employees were unbilled for even one day a week the company would quickly be out of business. The effort of explaining the cost dynamics of the business, employee by employee, month after month, is too exhausting for most employers.
So we resort to shorthand, telling them just what they need to know. “If we don’t get revenues up, there will be no raises.” “We have to cut expenses, we aren’t making a decent profit.” “We have to get higher margins.” We have to work smarter, because we can’t afford to hire more people.”
The employees hear you, and think “All he cares about is the money.”
I’m not Pollyanna. I don’t believe that the employees would understand a whole lot better if we had weekly meetings where we only talked about quality and service, and never mentioned profit. On the other hand, the companies who say that they just focus on doing the job right and let profits take care of themselves are frequently, although not always, short-lived.
This is more of a reminder. We need to talk to employees about costs and profits, but we also need to talk about why and how those fit with the rest of our vision for the business.