Having worked in AV for most of my career, I’m pretty familiar with the idea of small business. One thing that has recently become more apparent is that a poorly run small business feels like a broken economic machine. A vehicle for only the ownership to make money and everyone else struggles or worse.
There are few different ways this plays out, at least from what I’ve seen. I won’t get into them all, just some of the ones I know most about.
The first is the business that underpays and overworks the staff, and the ownership makes a ton of money. This seems to be the most volatile; no one thinks they can get ahead, and turnover is high. This coupled with low morale that tends to sink in once people realize the outcome doesn’t change; you can only make so much but you can always work harder.
These tend to make me the saddest. A lot of the time, they have someone in the driver’s seat who has incredible talent but has a pretty short sighted approach. Everyone is replaceable they think, at the expense of morale and growth.
The next is the business that the owners make a little less and pay or overpay a few “key” employees. The people that are well paid, a good amount of time, are deserving of their salaries. The problems are when those “key” employees are people who just happened to be there in the beginning and don’t deserve what they get as the company expands. They tend to rest on their laurels, become complacent, and become a drag on company resources when the company needs them the most.
The biggest challenge for places like this is realizing that those “key” people are holding up their share of the weight or should move on/ be replaced. If ownership doesn’t realize that, an economic down turn can force better, younger, and more hungry staffers into the arms of competition.
The positive in companies like these tends to be that turnover isn’t as great because people see the carrot. They think they have a shot at making the bigger salary. Sometimes they do. It depends on the perceived value of the individual. This positive can easily turn to a negative if everyone isn’t careful.
One of the issues with most small businesses is that they lack metrics to determine who should get what (performance reviews, employee evaluations, etc…). Monies tend to be given out after an especially difficult time or project; seemingly without rhyme or reason and a similarly difficult time or season gets less money at another point in the career for reasons beyond the employee’s control. This leads to confusion at best, and resentment at worst.
The last type of company I’ll speak about is the business that overpays everyone. Money is plentiful due to a rich owner or a series of large jobs or the potential of large jobs. Subsequently, money is handed out everywhere to everyone. Salaries are high by industry standards, the facilities are immaculate and the bank statements are well guarded. These usually end in a pretty spectacular fashion. Leaving a number of people and their families looking for money that is typically reserved for the best and brightest.
The overpaying companies are the ones that usually have vendors calling all the time, surprisingly expensive cars in the driveway and are usually the companies that one, two or three years down the line cease to exist. Sure, some are that make it, but it’s only a matter of time. If you doubt it, see the dot com bust or the hedge fund implosions for reference.
The real question is, how do you prevent this from happening to your company?
Be on guard constantly. Evolve, evolve, evolve.
Develop non-biased employee metrics that are enforced and routinely used. Let your employees know how they are doing and how they can improve.
Talk to your competitors (I know that’s not easy for everyone).
Interview candidates, even when you aren’t interested in hiring. Just to see what’s out there and what they make (or ask for)
If you run your own company, you’re entitled to the benefits, but don’t be the lord of the fiefdom all the time. Make sure you appreciate the people who help to support you. Many people forget that they were in the same position once.
Sure, you can probably replace them all, but at what cost to you?
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