Red Flag Rising

In business everywhere this same scenario plays out:
– New boss arrives and feels pressed to show quick results (or old boss gets squeezed because financials were disappointing).
– Biggest, most visible, and easiest to manipulate expense category is labor, and staff scheduling changes. There are cutbacks in hours. Vacancies are not filled.
– With the same shifts on auto-pilot and fewer employees to cover them, managers begin working shifts themselves. They work hard to keep up, and their role is uncomfortably inconsistent for everyone (worker bee? one of us? my manager?) Even customers notice the palpable tension in the air.
Something’s got to give.

What gives is what those managers should be focusing on when they do the right jobs. They are working “in” the day-to-day grind of the business and not “on the business” and this points to only one dismal prospect: very little hope for turning things around and getting profits healthy again. No one’s having any fun, energy levels are getting drained, and the company vision is buried. Customers get nervous and uncomfortable, and they stay away.

I’m seeing this happen at a few old haunts of mine, and it’s breaking my heart. Visitor counts are actually way up for Hawaii this summer, yet this old drill of working hard and not working smart means the bird in hand is flying the coop.

Are you the boss? Please don’t let this happen to you. When this red flag rises (your managers are working shifts) you’ve got to ask yourself some hard questions, the first being this: Am I managing my managers with fear? Here’s another: Why do they feel that cutting labor is the only answer? And Lord help you if that answer came from you.

Business 101 on making a profit is pretty straight-forward: you write an executable Business Plan designed to deliver more revenues than expenses, and you operate to plan. No matter how complex the Business Plan (and complexity is usually the first mistake) there’s this simple balance scale of revenues versus expenses. If profit levels are unacceptable you have only three options: increase revenues, decrease expenses, or do a measure of both at the same time.

Now here’s where my course on Aloha Business 101 may be a bit different. If you have to tinker with the weights on your balance scale, cutting back on staff labor is about the worse thing you can possibly do. The only time it’s the answer is if you somehow hired or scheduled more labor than was called for in your mission-driven, values-centered, customer-responsive, and profit-designed Business Plan. What? That’s not the character of your Business Plan? Well, that’s why you and your managers should be working on it (the business) and not lost in it.

Let’s go back. Assuming you had the staff you should have had (among other things, managers are the ones that recruit, select, hire, train, empower and retain when they’re not working shifts) why is cutting back on staff labor the worse thing you can do? Because that staff represents your bank of intellectual capital, the most important asset you have. Mess with that bank balance, an investment you’ve already worked hard to make, and you lose the power of compounded interest: the next time you make a deposit—you hire back—you are starting all over again at ground zero unless you’ve paid the price for (and were able to find) someone that already has a healthy portfolio to share with you.

Treat your employees like business partners. If you’re getting squeezed, take the problem to them directly, and ask them to help you work on the shifting the right weights on the balance scale—focus on the customer and drive up revenues. If you feel you need to check on expenses too, evaluate all non-labor expenses first. Invest in your intellectual capital, your staff. Harvest their ideas, perception, opinions and suggestions. They see way more than you do, and they realize you don’t have all the answers. Respect their intelligence: They don’t want to lose their hours, they want to work for a secure business. They’ll work with you to make the improvements that are really needed. When your customers visit again they’ll see the right faces in the right places.

That’s Managing with Aloha. It’s managing right, and managing smart. It works. And guess what? It’s way more fun.

Comments

  1. toni says

    ok ok ok I’m working too hard at the desk, but I must say the moral of the team has gone up and by showing my dedication to “our” success, they have also each stepped up to the plate and found in themselves a renewed sense of dedication to their job too. It has also been a way to show them what I want them to do and how it can work better. Never a permanent fix, but it was a good vaccination for some job blues for the team until new people are hired. I do believe that eliminating positions only invalidates the work of the team when it is for budget’s sake.
    Good advice Rosa, please keep them coming.
    -toni

  2. says

    Absolutely: there are benefits to be gained when you work side by side with your crew, and you’ve pointed out some good ones. I congratulate you for making the very best out of the situation at hand. As the saying goes, when you have a bumper crop of lemons, make some lemonade.
    Now imagine achieving the same things without the crisis intervention, but because you actually planned some time to do it: you scheduled yourself there without getting stuck there. Sounds to me like you’re a manager who will do much more than just pick the low hanging fruit when you are well supported. Good luck with filling your vacancies.