Being a Business Owner is not tough. It very tough.
From taking a leap and a risk to start your business, all the way through to facing the difficulties of cashflow and ensuring your business can operate, there’s a misperception that you’ve achieved/made it and those around you set certain expectations.
Based on the experience of our 3 Partners and drawing from over a combined 80 years of entrepreneurial experiences, we’ve put together a list of lessons we wish we knew or had someone to share their experiences with. Many of these come with hard learning curves, some from trial and error, but most with great success stories. We learned, maybe forgotten, and then re-learned some of these again, more often than we all would like to admit.
Lesson 1: Loyalty has a dark side
Loyalty can be both good and bad! As Business Owners, we inherently will be loyal to those who share our purpose and those who commit to build our business with us. We bring them into our close circle and reward them for the successes achieved. But what happens when that loyalty isn’t measured, or your business starts to outgrow the shared vision once had between you and those who have committed to its earliest needs?
It’s a challenged faced by any growing and scaling business owner. Often, the emotional decision overrides the logical and business need. We elevate those who were loyal to positions of authority and give increases as a reward for their previous commitments, rather than for their ability to perform.
This brings about entitlement and a perceived / genuine sense of authority, often resulting in frustration, lack of performance and, in the worst case, a manipulation of the Business Owner’s vision. Turning passion and purpose into resentment.
How do you keep the beauty of loyalty and limit the negative?
There’s a phrase that every business owner should recall when hiring, promoting, and rewarding staff, directors, and potentially even fellow shareholders:
“Build the people around your business, not your business around your people.”
This doesn’t mean you don’t reward excellence. Not at all. On the contrary, reward excellence and not just loyalty.
The way to achieve this is the following:
• Design your company organogram and define the departments and positions required to deliver to your key business functions – forget momentarily about the people currently fulfilling roles.
• Design job descriptions for those roles, considering the competencies, job requirements, performance metrics and person specifications.
• Re-evaluate employees currently fulfilling these roles
• Engage with employees and if required, define gaps where they don’t fit defined positions.
This is not an easy process, and it may require having difficult conversations with long standing employees, directors, and shareholders, about where they are currently falling short and their potential ceilings are. It does however draw a clear line between performance and loyalty.
Remember, the business must perform first and foremost. Thereafter, the stakeholders can reap the rewards