Talent Drives Firm Growth

Intro

Companies are collections of people, so it seems so obvious to make talent your focus, yet it becomes an afterthought once corporate bureaucracy, greed, money, power, ego, or fame take over, making people a lost entity. Founders, business owners, leaders, when you think about why we do all this, if it’s only about the money, why are we here? Yes, we all need to make a living, fulfill aspirations, and build wealth, but when you really get to the root of the reason for a company or business, it can really give you some clarity on what’s really important. Employees and clients. Your ability to drive tremendous wealth and value is all wrapped up into how you service clients, treat, grow, and compensate your employees.

The Story

When you consider how you take your company to the next level, how you become that Level 5 Leader, and build a vision to gain clarity on your purpose, develop the roadmap on how to get there, consider what’s it all for, and what is your real motive? What is the deep purpose not always understood inside companies? It has to be something below the surface if you really want to have something that pulls you through when times get tough. Money won’t be enough for individuals, founders, or companies when shit gets hard.

And for many of you reading this, you’ve already seen some of the tough times and you understand what I mean, that you need to have more purpose and meaning behind your work for when things get tough. Those who haven’t, you’re getting ahead of the game. You’re learning before you see it in real life. And at first, you may not believe it, you may not think that there will be times where things are that hard, where you feel stuck, where you feel paralyzed by the work, the lack of meaning, or the lack of connection in the mundane depths of our work. But I’m hoping this piece gives you a little clarity and relief on what it’s all about.

It’s about the people so when you go to mandate those hours, mandate that work location, build that comp plan, cut those people, fire those customers, I’m not saying you shouldn’t do it. There is a time in place. There are business reasons that are unavoidable, but consider how you can do it. Consider how you can be the most human in those situations, how can you repurpose to build added value than what you originally built? How can you look beyond the surface level answers to find the real meaning? One distinct example I will give is the compensation plan. When you consider how hard your people are working, the value that they’re bringing, and how much of your company’s value is wrapped up in your talent, that should really weigh heavy heavily on you and how you compensate for that. You may be thinking—he’s talking away about giving away the farm, he’s talking giving my company away. He’s talking about giving away 75% of our equity. How you do it, is different than what you do. I believe strongly in tying incentives to long-term wealth creation that builds associate’s wealth by their commitment to the firm.

That alignment is where the magic happens. I’ve seen it in multi-billion dollar companies. I’ve seen it in small businesses and I’ve seen the opposite when it doesn’t happen. This isn’t about a carrot, rather this is more about formalizing real meaning, making people an owner, making people a stockholder, giving real bonuses that change lives, giving people a piece of the pie where it makes sense, while taking a look at your core leaders and your core stakeholders in business and seeing how you can align them for the long run. Do you want to retain your people—act like it. Both, by paying for it, and showing appreciation for it, and treating them well. Even the smallest gestures of giving away a piece of the pie, goes such a long way for affinity, trust, and commitment.

Consider this, if you’re a staff-level team member and you’re loaded with work, will you work all weekend to hit that deadline, or delivery that product? Not for a job, not most people. But if you’re a small owner of the outcomes delivered by the business—you’re more likely to do the work, put in the extra time, and care about service, quality, and profitability.

In a vast majority of businesses your talent is everything and without it, you don’t have that 5X multiple when you have the opportunity to look at what’s really going to take your company to the next level, or what’s really going to scale that annual profit you’re taking in, which is often a big piece of that puzzle. How do we drive more profit and more value by allowing others to take a little ownership in the journey—this isn’t about cutting into what you’re making. This is about growing the pie for bigger pieces of pie, for everyone you, which can change your teams lives, and therefore your business, by finding ways to build compensation models that show your appreciation, and not just say it.

It’s about thanking people for what they do with action and words, and showing that you want to retain them and show your acknowledgement of their value. It’s not about over-paying for the job being done, but it’s about “paying over the market” enough for their work to matter an extra 5%, to do that thing, to make that extra call, to go the “extra mile”. Your business grows through growing your people, and compensation is one way to do that in alignment with their skills, experience, learning and development.

There are many ways to show you’re serious about bringing people along, and one way is increasing your profit, by showing your people what’s possible when they connect the impact their roles make with driving profit. So if your business makes $100,000 profit in a year, if you’re taking 100% or reinvesting it all, you’re missing a caveat. Part of that $100k can also be reinvested by sharing part of it with your team. Performance bonuses, profit sharing, stock plans, etc. This is an investment, not a cost. This is an investment in your people’s full potential and upside, and their future with your firm.

Closing

Show them we made $X, and you did this to help us make that money. You earned or will earn this, with this company growth. 10x your company by 10x’ing your people. Worried about your team leaving after being trained by your company? Concerned with transparency and the acknowledgment of individual contribution to company performance? Give a little back through an extra to grow with your business. Try some version of this.

It doesn’t mean give away all your equity or profit—it’s about investing in your people so they invest in your company. Go all in on your people, so they go all in on you. Too many companies see it as a one-way street like they’re doing a favor for their associates, rather than their associates bringing tremendous value. The value your team members bring is just that—value. Appreciate and compensate for it so you are building the place to work, not just so you are an employer of choice for people to join, but also the company of choice for people to stay.

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About the Author, Graham Peelle