How much do your good decisions really cost you?

Consider this:

You’re selling a house, so you put it on the market and you get a high offer of R1 million, but you know if its fixed up a bit you could get as much as R1.5 million. So to sell at its highest value, you hire a consultant/designer/whatever [lets call her Sue] to help you with it.

Sue puts together a list of everything you can do that will help and gives it to you. Her list looks something like this:

• general maintenance and repairs – R50,000
• new paving – R50,000
• waterproof and paint roof – R50,000
• garden landscaping – R100,000
• and the cost of employing Sue for the whole time is R50,000.

Total expected cost R300,000.

Two possible scenarios

Scenario 1 – You trust your vision

You dislike the idea of spending an extra R300,000 when all you actually want to do is make more money. You tell Sue to only spend R30,000 on general repairs and maintenance, and forget the rest. She does this and then resigns from the job [so you cut her fee to R20,000 citing any number of legal arguments]. In total you spend R50,000 and after a few weeks of waiting, sell the house for R1.2 million. You give yourself a pat on the back for your excellent money-making skills and the fantastic R150,000 windfall. Well done.

Scenario 2 – You trust Sue [the expert that you hired] and back her

You tell Sue to go ahead. She gets everything done, total cost comes in at the R300,000 and the place sells straight away for R1.7 million. You and Sue see how well you work together, and with the extra profit of R400,000 you start a successful renovation business together that just takes off.

This begs the question...

...what if that house is actually your business [sure, perhaps you’re not trying to sell, but you are trying to maximise its value]. And what if Sue is actually one of your top employees. While your decisions might seem good at face value [extra R150,000 cash], are you sure that they are the best decisions, and that you’re not actually missing out on so much more value [extra R400,000 cash]? Open your mind to this possibility.

To me, the moral of the story – as a great business leader, its not only important to surround yourself with people who are better than you. You must also encourage them, support them and trust them [and the other difficult one – back them with cash when its required]. Because you can go 98% of the way [choose the right people, the right business, get the right tools in place, etc], but if you don’t do that last 2% and finish strong [empower your stars], its all for nothing really.

Please stop dangling that half-eaten carrot

Who are we to judge the value of another human being? We are totally incapable of doing this, but in business it becomes a necessity when dealing with staff retention.

"Attracting and retaining talented staff". Any service firm that takes itself seriously should and does have this as one of its primary objectives.

In this day and age, job security has become somewhat unfashionable and people do not want to work for one company for more than a few years
[this is not unique to SA, but truly a global phenomenon]. Adding to this, SA is said to be facing a widespread "skills shortage" brought about by an outflux of skilled people from our shores [I always get sad when I hear of my peers leaving and not wanting to return].

So how do you motivate someone today? I mean, really motivate them? When I was involved in due diligence work, one of the most interesting questions to ask top executives was "What keeps you awake at night?" Knowing what I know now, I'm sure the question of employee retention is top of the list.

Let's face it, the rules have changed

Its funny how, in the absence of a clear way to determine how much value someone brings to a company, their package cost is usually used as the point of reference, and staff are usually "motivated" through performance payments [its easy to "measure" and "makes sense" so very common].

Please, please can I ask everyone who has people working for them - be creative in how you evaluate, treat and motivate your staff. They are not just "employees", they are people [I'm one too, so are you]

There are many other ways to do this:
- equity ownership [must be done very carefully, I'll admit];
- flexible hours;
- work-from-home opportunities [not necessarily 100% of the time];
- time to follow your passion [ala Google and 3M];
- recognition...

and the list can go on.

We must not take for granted how important this matter is. In fact, with our country facing the oft-quoted, big scary "skills shortage", its a must do in ensuring that our country will prosper and grow... where everyone wins, and not just the select few.

I know this is not easy in practice, but isn't the challenge part of the fun?

See ya later, motivator!