In the best-selling book, Good to Great, Jim Collins looked at how 11 companies were able to make the leap from good to great. What’s most interesting about the book is most of the companies in it are now defunct. No entrepreneur and CEO will tell you that building a business that lasts is easy. Building, running, and growing a company each present a unique set of challenges, and sometimes the right person for one isn’t right for the other.
Apple was teetering on the edge when they decided to bring founder Steve Jobs back, and the radical shift in the focus of the company from computers to a little-known product named the iPod allowed Apple to begin their domination of the tech world.
There are seven things that leaders need to pay careful attention to in order to ensure companies don’t just survive but thrive. Creating an environment that attracts, keeps, and nurtures talent is critical.
Society for Human Resource Management (SHRM) estimates the cost of training an entry-level retail employee at $3,328, while the cost to lose a $100,000 CEO could be as high as $213,000. But, it’s not just the financial cost. High levels of attrition have a direct effect on morale and stress levels in companies.
Here are seven red flags leaders need to watch out for in order to build a business that lasts.
Red Flag #1: Training
When times get tough, most companies employ various cost-cutting measures. Anything from company cars to the brand of coffee they use can be affected. One of the most common is training. It’s seen as an unnecessary expense, and one of the first to go. Big mistake. Training will pay for itself many times over, and employees appreciate the opportunity to learn on the company’s dime.
Key takeaway: Training is not optional; it’s imperative.
Red Flag #2: Time Management
This affects everyone from the CEO down to the people in the mailroom. Salary.com found that an estimated 21% of employees waste up to five hours a week. Time is money, so an investment in time management programs for your team will greatly improve productivity and reduce costs.
Key takeaway: To ensure maximum productivity, invest in time management programs.
Red Flag #3: Rewards
Rewards are a tricky business. Most managers and CEOs think that cash is king with regards to employee recognition. However, according to a survey done by Xexec, 66% of employees would value personalized rewards such as concert tickets, and 43% said they would prefer annual leave over money. The trick is to get to know your team and learn what makes each individual tick.
Key Takeaway: Find out what each employee values most.
Red Flag #4: Meetings
An industrial age holdover that, while necessary, is often done out of tradition rather than necessity today. Meetings, like everything else, need to adapt to the digital age. The internet allows CEOs and managers to distribute information in many different, more effective formats. Consider this: a study done by J. Blackburn and EJ Lindgren revealed that within two weeks, only 8.4% of information is remembered, and a shocking 42% of information was inaccurate. Video and written announcements allow for employees to review the information at their pleasure.
Key Takeaway: Sometimes a meeting is not the best use of time.
Red Flag #5: Overwhelm
Science in recent years has shed incredible light on the most effective learning techniques and optimum condition for human activity in the workplace and on the field. Google, Apple, and Salesforce are typically considered the best companies to work for as they provide not just competitive salaries but environments that encourage rest and relaxation. Contrast this to many so-called “black companies” in Japan where employees are expected to work 100 hours overtime a month.
Key takeaway: Creativity and maximum productivity come from well-rested employees.
Red Flag #6: Threats
My father, who worked as an operations manager setting up factories all over the world for over 30 years, used to say, “You’ll get more out of a carrot than a stick.” That stuck with me, and over the years I’ve found it to be true. Nevertheless, many executives and managers resort to threats to get things done. The problem with threats is they lead to resentment, low morale, and a negative work environment.
Key takeaway: Creating an environment that people want to work in is critical for long-term success.
Red Flag #7: Micromanagers
If there’s one culprit for constant delays in getting projects done, it’s micromanagers and their inability to allow their staff the necessary wiggle room to get stuff done. It’s human nature to fear giving kids too much freedom, and the same is true in companies. Managers guilty of micromanagement do tend to do it out of two main causes: fear of up-and-coming employees or lack of faith in their team’s ability. Both are productivity killers as they both stifle growth and prevent free-flowing ideas.
Key takeaway: Micromanagers will hold your company back