Did you work harder after you hired more people? The reason to hire more staff is because there is too much work. How can more people create more work instead of less work?
Companies go through ‘valleys of death.’ This is commonly described as any nonprofit between $1-6 million in revenue. This is the growth period where the need for more office support (administrative, legal, hr, accounting, etc) is high but the cash is really not there to pay everyone.
Valleys of Death – Employees
Another Valley of Death happens when the staff team grows and changes.
Companies usually start with the vision of one person. How many times have you seen a great visionary start a small homeless program? The new company is built around the passion and skill of the founder. Of course, the owner cannot prepare food, clean and recruit clients so helper people are hired, 2 social workers, a kitchen assistant, and a custodian. This model climbs to 10 employees. The new staff are owner-helpers. They don’t have much authority. The director/owner sets the rules for the shelter, orders the supplies and keeps the books. The helpers clean and help. It is critical that the director/owner trusts the helpers.
Over 10 staff and more is needed than loyalty to the director/owner. Good food and safe housing created a flood of applicants for the housing program. The director/owner helpers are replaced by staff who have the ability to make good decisions when the director/owner is not there.
The staff team over 25 people is the highest level of director/owner failure. It is possible for the owner to work too hard in the 10-20 staff member range and not hire capable people to exercise independent judgment. If the director/owner continues to add 30 helpers without independent good judgment
The director/owner will collapse from overwork OR
The agency will lose newer staff and cycle between shrinkage and growth with 25 staff
The director/owner must prepare for a constant change in role during growth. There is a steady shift from
Leader doing all of the work with help
Skillful staff taking over marketing, accounting, client engagement
Leader becoming a visionary and values thought leader with managers
Leader setting 3 year highly achievable goals with management team
There is a saying that at 10 staff the owner needs to hire someone identical to herself. At 100 staff, she needs to hire someone much different from her style to fill in missing skills.
The director feels too badly to transition staff who helped to start the company but don’t have a place on a larger team. One for-profit owner had two CEOs who could not grow as the company expanded to 5 sites around the world. He simply added them to his research staff at their same rate of pay – until he was no longer breaking even.
A nonprofit director lost many younger staff when three ‘original’ staff were mean and dismissive and no longer playing valuable roles. She couldn’t face the stress of honesty and transition.
A director liked to hire managers who were not threatening. They had less ability than the director. The agency could never break growth barriers because the team lacked skills and experience to take it to the next level.
There are personnel companies who can be hired to review job descriptions and actually transition unproductive managers when the owner/director or board does not feel capable of the task.
Leading a growing company is a difficult and constantly changing job. Your role requirements will not stay the same for 12 months. While sufficient cash is a challenge, the balance of effective people on the team at different stages is critical. The CEO job is challenging. A business coach can help and contact me if your team needs support to go through this process.
I had a job search in 1988 and finally got an interview for an executive position. I would be 2nd in command to a leader who planned a five year window for retirement. I was flown to Washington and then Philadelphia for interviews. The interviewers stressed that I would have considerable power. What’s not to like about power?
The interviewers admitted that there was one challenge – their current president was scared of one person who reported to him. The staff member was abrasive, had no support of other staff, and criticized his supervisor and peers without hesitation. They were reluctant to say what they wanted, but an unwritten part of the job description was to handle Jorge.
I understood that new direction was needed. I hated to take a new job and fire a well known staff so I suggested in the 2nd interview that they fire the offender and I could come in with a clean mandate to make things better. They were doubtful because ‘Jorge even knows how to deal with the boiler when it breaks.’ They agreed to think about it. I was sure that I had the job. I started looking for housing.
On my birthday, April 20, I got the call I had been waiting for! …… But the call was to tell me that they had chosen another candidate for the job. There is a copper taste in my mouth even as I write this today.
After much reflection, I realized — The real job that I was offered was to fire Jorge (handle him Ron) and I turned it down!
It doesn’t matter how many strategic plans you write. You will fail if you have staff who can’t work the plan or who want the plan to fail.
This is why I focus on 4 questions for success in business:
Do you have a strategic plan that also changes what you do tomorrow?
Do you know how much money you need and how to spend wisely?
Can you keep staff from stealing money after $1 million revenue?
Will you and your staff have the talent and passion to do what you plan to do?
Sometimes, staff changes are slow because of civil service, unions, elections – things outside the manager’s control. The mayor employs many critics that he cannot fire in the Police Department and other union and civil service protected positions.
For most of us, the big reason that we can’t change things is that we are scared of the people who work for us! “In 2009, U.S. companies spent $3.6 billion on “outplacement services” (figuring out whom to fire and how to do it)” (Rogers, Jenny. “Getting the Ax From George Clooney.” Slate Magazine (2010): n. pag. Web.)
Staff transitions are difficult. And it’s always tragic to create chaos with someone’s livelihood and career.
If you have staff that can’t or won’t work your plan, you need to analyze job descriptions, start regular appraisals, and stop being scared. Don’t let anger amplify difficulty. Discern if a problem staff has the respect of others. Don’t ask others to do it for you. And stop being scared!
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