Business owners should take advantage of their team’s passion, talents, and knowledge to help the company becomes as profitable as possible.
I have overseen the turnaround of 77 failing businesses in my 52-year career. For all the money and jobs that were saved, I take just 5% of the credit.
The other 95% belongs with the employees of the businesses I took over. Without their commitment to turning things around, none of those 77 companies would’ve made it.
Many of the owners who sold me their failing business did not take full advantage of the talents, knowledge, and passion of their employees. They kept them in the dark, fearing that if anyone knew how bad things had gotten, everyone would’ve been out looking for new jobs.
Nothing could have been further from the truth.
In my first day at a new company, I call every team member together and lay out the truth, warts and all. I’ve never had an employee quit after hearing how bad things have gotten. In fact, I’ve seen employees make personal sacrifices for the good of the company.
When I took over a large metalworking plant nestled among the hills and valleys of eastern Tennessee, an older machine operator approached me after our first meeting and sheepishly said, “I appreciate you telling us where we are. My kids are grown, and my wife has a good job. We’ve paid off our house and cars. If it helps, I can go without a paycheck for a month.”
That machine operator was willing to make a personal sacrifice because he was invested in the plant’s future success. He wanted to be part of the solution instead of running from a fight.
When people are invested in something, they’ll do whatever they can to help steer it away from failure and toward success. That’s what the previous owners never understood. They all selfishly thought that if the business failed, they’d be the ones most impacted.
What they didn’t understand is that while they might have lost everything, their employees stood to lose everything, too, if their income disappeared and they could no longer pay their bills.
Not only are your team members dedicated, they’re also creative problem solvers. The best ideas don’t always come the highest-salaried employees. In fact, some of the best ideas I’ve seen for company improvement came from lower ranking employees.
One of my favorites was from a welder at an engineering company that did projects all over the world. Facing an eight-week lull, I asked the department manager for ideas to fill the gap so I could avoid laying off any of the 25 members of our talented welding staff.
During a meeting of the welding team, one welder suggested we look for high-tech projects around town the team could tackle during the downtime. Once we gave the thumbs up, the welding team searched for available work, and within 24 hours, we’d booked a month’s worth of projects that netted us substantial profit. His idea launched a new profit center.
Sometimes all you need for a brilliant solution is a fresh set of eyes to look over a problem your company is facing. Whether that’s someone who works in another department or a new employee with experience in another facility, the insight of “outsiders” should never be dismissed. Creative problem-solvers need to be encouraged to share their ideas.
This is especially true when it comes to cutting expenses. Even if your business is profitable, you must avoid letting unchecked expenses damage your cash flow.
In each of the companies I took over, I never brought in new money. My approach was to empower my team to cut expenses and they always delivered. We cut expenses by at least 34% in each company, and except for owner expenses, I never cut a penny myself.
Your employees are the ones who should dictate which costs are essential, which can be scaled back, and which can be eliminated. Owners have other concerns on their minds and can’t know the little areas of savings the way their team does.
When you put the task of expense reduction to your team, don’t attach a percentage to it. Let them decide on their own what percentage of your expenses are expendable. Artificial thresholds place unnecessary pressure on employees and force them to cut areas they wouldn’t otherwise touch. If you let the team help steer the ship, you’ll be amazed by the work they do.
The team is a business owner’s greatest asset. When neglected or underutilized, businesses tend to fail. But when a team is fully engaged, a business can reach its full potential.
Robert Thomas Bethel is the orchestrator of seventy-seven business turnarounds over the past fifty years. He has turned around companies in various industries and has helped save over ten thousand jobs as a result of his strategic business counsel. A graduate of the Owen Graduate School of Management at Vanderbilt University, Bethel owns several companies across the southern United States and has operated businesses both nationwide and internationally. For more information, visit robertthomasbethel.com. To get a copy of his book Strengthen Your Business, CLICK HERE.
Did you enjoy this post? If so, I highly encourage you to take about 30 seconds to become a regular subscriber to this blog. It’s free, fun, practical, and only a few emails a week (I promise!). SIGN UP HERE to get the thoughtLEADERS blog conveniently delivered right to your inbox!