Manage each employee as a business unit for greater performance!

To get the most incremental value out of each employee, the business owner should look at managing each contributor to his global enterprise, as a separate accountable business unit.

By Lars G. Harrison

Successful consultants learn early to manage every aspect of their professional life as a business. Accountability for their time, cost, customer requirements, revenue, etc. becomes a prime activity and responsibility. Consultants also understand what skills and capabilities that they possess that are in demand, which to acquire through skills and learning methods, and constantly evaluate these against the perceived and anticipated marketplace for new sales and business opportunities. The focus for consultants is all about building business value for the customer. A consultant's livelihood depends on satisfying and exceeding customer requirements and expectations.

Consultants and contract workers know that they are a business. Digital entrepreneurs, or portable executives are solely responsible for all aspects of a professional career. They are actively creating their future. It is therefore sad when a great pool of general employees spend their lives performing meaningless processes and activities without a clue of the purpose associated with their work tasks. Employees in the best companies are shown the vision, but often this vision and its associated mission and purpose are so ambiguous or unrelated to the employees general roles and responsibilities that the meaning is lost. The vision is not shared among all as a mantra to live and work by, because of it lack personalizing. Instead if we could help employees see how they can contribute to the organization by adding incremental value as an entrepreneur (that benefits their and the organization's future), will force them to grow in ways they've never attempted to aspire to.

Customer First efforts are mechanisms management frequent use to encourage customer support and service improvement. The reason these programs fail to realize their potential, is that humanly we can only provide the same concern we show to ourselves. If employees are neglected, customers will naturally suffer. Companies involved with quality efforts, should consider Employee First programs before attempting to improve customer satisfaction scores. Employees are an organization's greatest resource. If you took the best 25 people from Microsoft Corp., it would have a hard time making the next years stockholder expectations. Intellectual capital should be harnessed to its ultimate potential. Only then can a company find its future.

It is interesting that most business will not allow workers to make important financial and operational decisions, even when they are closest to problems and solutions. Amazingly, probably to many bosses, most every employee can keep and balance a budget and make financial and operational decisions for his/her' own household, where he/she is solely or in spousal partnership responsible to run the household as a business. Society has forced us to become accountable and responsible, unless of course you are the government, which has the self-assumption to be above fiscal responsibility. So why then can't workers run their work as a business. Business owners would be amazed how much value employees could add to the business if a program would be instituted whereby the employees would run their work as a business..

"Business-of-One" Program

Employees (those with enough guts to ask) often want to know how to get paid more money. In most instances, pay raises are associated with how much actual or perceived incremental value the employee adds to the business--net profit (or other values: e.g. cost saving, new accounts, programs, intangible or tangible sources). So, next time a employee ask how he/she can get a raise, place the employee in a "Business-Of-One" program. This program may have some of the following conditions and requirements.

• Help employees see themselves not as workers, but as a business of one.
• Encourage them to determine what contributions they are making and can make to the overall business.
• Who are their customers that they are responsible to add value to? What are the key customer requirements they should be concerned with, and what are the customers needs and expectations? Make them spend time with the customers to determine their needs and expectations. Help them collect customer and market knowledge.
• Set up a performance system and a metrics system to determine how much incremental value they add to process, products and services for their customers? Demand that customers report weekly, monthly, and quarterly about how their requirements are met by the employee.
• Make employees track cost, value added, benefits, revenue, profits, and other tangibles and intangibles which add value.
• Demand that each employee participating in the program prepare a long list of improvements, new products or services that could be implemented or created, ways to spend money, cost saving approaches, new processes that would improve the work environment, and generally what the employee would like to do eight hours of the day to add value to the business. Once committed to the program, give the employee a half-a-day to go off-site to prepare the report. Spending the time off-site improves brainstorming of ideas and analysis of the report. Then critically review this report with a seven member "Business-of-One" committee and the employee, to ascertain the path to take.
• Work out beginning budget and make them responsible for spending and managing it, and preparing budget views and forecasts, and prepare proposals for budget increases.
• Teach each participant the basics of business enterprise: labor cost, serve customers, cover cost of doing the business (with all support functions accounted for), and how to earn a profit. Each enterprise should make about 15-25% in net profit. This is how the employee can understand how to earn a raise. A program for how much the employee can retain should be worked out.
• Teach and provide the opportunity for the employee to act like an entrepreneur, which means that for each new project, a thorough business case must be presented to the senior management for approval.
• Allow each employee to be thoroughly trained in project management methodologies. Most of the business development today are focused on project or program management.
• Enforce employees to keep detailed time sheets of all project activities. Have the employee assess and collect how much time was spent on every project and activities (meetings, conferences, calls, correspondence, training, client visits, coffee breaks, etc.). Allow employees access to time management training, preferably by using an expert in your company, than spending money on expensive seminars (if this is cost-beneficial). In reviews, discuss how they can improve their processes and activities.
• With all this attention to details, create an environment for creativity, innovation and exploration. Business should be a fun experience. Who wants eight hours of boredom--been there, done that? Also, empower them to make decisions and be accountable for the results.

As the new digital economy grows, with ever more people involved with interconnectivity and sharing data between desktops, and collaborating on projects, the need for making more employees accountable to manage their own work and projects as interdependent business units will, in my humble view, escalate. This may become the operating business model for the faster growing companies in the next century. Perhaps your company will become one that creates a future for their employees and themselves through a "Business-of-One" program.

Lars G. Harrison can be reached at lars_harrison@yahoo.com.

Copyright © 1997 Harrison on Leadership. All Rights Reserved.