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and profitable future!
Dear CEO: Just Do This
Recently while sitting by the edge of a lake in the Adirondacks chatting with a woman I had just met from Manhattan, she propped up on her elbow after our initial exchange of backgrounds, looked at me quizzically and said, “Please explain to me why 90% of the people I know are miserable in their jobs?” 90%? Perhaps exaggerated. But in order to get to the bottom of this quandary, let’s take on the toughest industry that there is when it comes to employees, culture and upward career mobility: Retail.
Close your eyes and picture the retail experience that you
expect as a consumer, and imagine what it would look like as an
employee. As a consumer, you walk into the store hardly
anticipating an encounter with knowledgeable enthusiastic salespeople
whom you might consider peers. You look for the product you need,
finding it without assistance, head to the register and are checked
out by someone who is barely interested in getting you your correct
change. For the employee, this job is typically a path to nowhere,
offering low pay and certainly hourly wages, no career path, minimal
training, merely a stepping stone to get you through college, or a way
to earn an extra dime during the holidays.
You structure your HR department to ‘handle’ the people part of the business. Keep employee costs down, make it measurable, and surely success will follow. Really? The basic understanding of the definition of Human Resources: “the function within an organization that focuses on recruitment, management, and the direction of the people in the organization”...
Herewith is your recipe for a stronger culture, higher retention and increased talent and a better bottom line: Blow up HR.
An HR department, or function, exists for the obvious reasons and these reasons only: a company needs to recruit employees, pay employees, provide benefits to employees, and make sure that the organization is buttoned up legally – all critical functions of HR. But from there begins a very slippery slope.
The HR department should NEVER be responsible for the following:
Staff development, performance reviews, communication, crafting the company culture and any employee issues. The department heads need to be empowered and trained to make these their # one priority, and most importantly this burden falls to you, the CEO.
Years ago a very small and quirky retailer, The Container Store, catapulted to the top of Fortune Magazine’s list of The Best Companies to Work for in America as #1 in 1999 and 2000. How does this happen when you sell boxes, hangers, hooks and trash cans? Yes the store is fun, functional, and gives the customer a glimmer of hope for an organized life, through great merchandising and a concept that was prior to the company’s founding in 1978, non-existent.
But what truly set it apart, was its approach to its people. That’s where I came in; I created a culture through grass roots beliefs that the employee IS the brand; so, I not only committed to finding the best talent, but I blew up every principle known to HR and to retail in favor of creating a win-win recipe for success – astonishing the customer through an experience that great product alone could not provide.
I hired for fit (peers to the customer), we trained for longevity (hundreds of hours/year per employee) and I created a pay scale that weighted store salaries much more heavily than any company in the retail industry. I was committed to devoting 10% of revenues to store payroll. The industry average was and still is 3% to 4%.
The practices will certainly change the dynamics of your organization. Allow yourself the flexibility to commit to this less measurable side of your business that won’t show on today’s P&L but will ultimately reap rewards to the bottom line. Employees, personnel issues, staff development – it’s not a nuisance. It is your secret ingredient.
Many more articles in Creative Leadership in The CEO Refresher Archives