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I wanted to share a story of how a company creates and adds value to the organization.

A few years ago, I got a request from a company who had not paid out employee bonuses in two years. The company always fell just short of making the targeted number and the CEO felt paying the bonuses without making their revenue and profit goals set a bad precedent. Her revenue and profit goals were in line with her industry. She asked me to take a look and see what might be changed or what was missing. She needed a strategy to create value for her people.

This CEO was doing all the right things. People had the ability to make decisions, do what was right for the customer. She had an employee committee dedicated to defining and supporting their company culture. Open door policy, literally, everyone was working in an open space and information flowed freely. So what was preventing them from reaching their targets?

Discovery 

I interviewed all of the employees, to understand their role, and get feedback on what might be preventing them from reaching their goals.

There were big two things that jumped out immediately. Some employees did not understand what impact their duties and responsibilities had on the revenue generating side. They also  did not understand how their job impacted profit. Here is an example. There was a business development person and a team of account managers. Pretty obvious what part of the business their activities impacted, they impacted sales and revenue. But, the technical team who developed websites, wrote copy, did not understand how they impacted profit. Delivering work late, delayed payments from the client and caused cost overruns. The need to outsource certain activities were increasing the cost of getting the final product out and impacted margins.

When I reviewed the bonus plan, everyone was incentivized on revenue, profit and personal goals. And the percentages of those three were the same for all employees for all departments and functions.

We adjusted the bonus structure so that the areas of responsibility that the employee had the most impact upon,were the most heavily weighted for that employee group. We also gave constructive and honest feedback on how their peers said they interacted and contributed to the team. It was not just about the results, but how they went about achieving them. Could they build and maintain business relationships.

Solutions 

The business development people stopped pushing the account managers, and the account managers included the original salesperson in the development of the strategy and implementation of the ad campaign. there were far less miscommunications and the transfer in information was smooth. The business development person at this point had the relationship with the client.  Clients were happy and retained for the future.

When the technical folks were engaged in helping with recruiting for hard to fill positions, costs were reduced, products were delivered ahead or on time. The company was able to take on more clients when the turnaround time was reduced.

When last I spoke to the client, her customer counts were up, the company met their revenue and profit goals, and by creating a workforce that was both educated as to how the company made money, the staff could make good business decisions on their own. Value was added through an engaged workforce that could work independently of the CEO. It helped having someone from the outside to look in. Business owners are focused on the day to day operations,  it is good to have an objective third party review and recommend. Sometimes it’s what seems to be small details that make the difference in “almost there” to exceeding your goal!