We think of new employees and young workers as empty vessels needing to be filled with information and directives about the business. Of course, employees need to learn what’s expected of them and what the business is about. But we shouldn’t stop there! Possibility emerges when owners know that every person has something unique to give that will propel the business forward. Young or old, experienced or inexperienced, everyone has life experiences that can add value. The full depth of someone’s passion, energy, and enthusiasm is that person’s gift to give, not our right to take.
Profit is a result, remember? And it’s much more than counting dollars and maximizing potential for cash flow. Like a lock, it opens smoothly when you get the combination right, releasing when you touch and inspire people at an emotional level. When others get excited about your business, for the opportunities they see for themselves, they will work with passion and motivation, and that produces profit.
At the same time, we need to be realistic, not idealistic, and know where to draw the line so that the business consistently gets its needs met. In this chapter, I address a few touchy topics that can’t be sidestepped without negative repercussions.
Redirecting illegitimate conversations. Conversations about the business that happen outside formal channels are illegitimate. They are political, taking place to advocate for agreement to support one’s point of view, or for personal gain. The same is true for indirect criticisms and complaints that bypass the person accountable for doing the work. Counter-productive conversations provide an ego-boosting payoff to individuals at the expense of the business. This is red zone behaviour.
Politically charged conversations travel through informal communication networks. Once informal channels are opened, they cannot be closed by an authoritative directive. They must be resolved by involving all parties impacted by those conversations to work through conflict and reach agreement on how future decisions, actions, and conversations will be handled—both formally and informally.
Great teams benefit by hitting restart. Reaching an agreement that defines what is acceptable to good business, and letting go of behaviour that is no longer tolerable, draws a line in the sand. Individuals entrenched in old behaviour get to make a powerful choice to move forward, playing by the new rules, or to opt out of the game. The awkward silence before a decision is reached can be a nail-biter.
Unravelling crossed lines. Unravelling complex behaviour patterns in an organization requires focus, discipline, and patience, much like untangling a fine-linked chain necklace. We see the evidence of neglect or sloppy work, but we don’t want to stop being busy to clean up the mess. And who can afford the time? But we feel great when the job is done because integrity has been restored to the business and to the relationships that drive it forward.
Let’s look at how lines get crossed and then define clean separation using a complex family business example.
In the last chapter, I mentioned the benefit of outside help. Lawyers, accountants, and consultants can help business owners manage assets, limit liability, reduce taxes, and protect shareholder interests. However, decisions made to save money or reduce taxes may complicate personal and financial relationships. In families, the rules governing decision transactions are sometimes not applied equally. Ask anybody who has been through probating a will how the process can impact family dynamics. Things can get ugly when lines get crossed.
Healthy separation between business and personal interests is not always easy to maintain. Separation of fact (what happened) from interpretation (explanations or rationalizations of what happened) requires objectivity and self-discipline. In Chapter 8, Process Prevents Politics, I offered the wise observer and Conscious Communication as two possible unravelling strategies.
From a relationship perspective, the following table illustrates healthy separation in a family-owned business. How does your business measure up? Are business management tasks being performed in a timely manner? Is there any bleeding of personal involvement, which should stay separate?
It’s easy to get wrapped up in operations, marketing, and sales and forget about the business. The business is the entity for growth! If essential business management activities in the left column are being neglected, the integrity of the business will suffer serious consequences.
Look again at the leadership scenarios on pages 15 and 16 for the Consoler, the Avoider, the Captive, and the Mercenary. In these patterned responses, either essential systems have not been put in place to assure the well-being of the enterprise, or people are not being held accountable for developing and maintaining effective business systems.
When facing a twisted mess (meaning essential aspects of business development have been overlooked), the best approach is to have all impacted parties present for the unravelling. Complex conversations should be facilitated, professionally if needed, in a distraction-free environment. If property, assets, or contractual agreements are being negotiated, involve external accountants or lawyers as knowledge experts to enable in-session decision-making.
An accountant is ill-equipped to deal with relational and communication issues; a facilitator is ill-equipped to offer guidance on financial and taxation implications. Both sides of the equation are equally important, in different ways. Mediators are an excellent resource for helping owners separate tangibles from intangibles using contract law as the frame of reference.
Documenting expectations. A handshake agreement is an honourable notion, but each person’s interpretation of what was agreed to, and what is expected, can be as different as a fingerprint. Avoid disappointment, conflict, lost time, and other “people issues” by documenting expectations and commitments in writing. “People issues” are system deficiencies in disguise.
If you’re five, ten, or twenty-five years into business without written agreements in place, you’ve got some unravelling to do. Maybe you’ve never paid mileage (or even thought about personal vehicle use) until someone asks to be compensated. If you agree haphazardly, you’re creating an imbalance in the system—especially if other staff have run errands for you and have never asked to be compensated. Expect resentment to build and the conversation to go underground. It’s human nature.
With a system in place, nobody feels boxed into a corner or makes reactionary decisions. Standing in the Possibility Zone, think through, and write down important decisions in advance: salary ranges, emergency procedures, after-hours calls, vehicle use, purchasing authorities, spending limits. Make important boundaries clear while you’re clear minded. Decisions can always be revisited.
Documentation doesn’t have to be soul-sucking and litigious. Make it creative and fun by adding your own flair. When Lululemon Athletica printed the company’s ideologies on shopping bags, it became a “thing.” Soon the company was selling posters, totes, and point-of-sale items displaying the Lululemon Manifesto. You’re not going to print position contracts on shopping bags, but you get the idea. Break out of the box!
Consider, for example, a position contract as more than a job description. When someone signs on the dotted line, you either receive a heartfelt commitment to do great work for the company … or a cursory obligation to be compliant to a task list. You reap what you sow at the outset. Great leaders bring meaning and intention to the concept of mutual consent, inviting others to self-select and be accountable for their choices.
Something magical happens in relationships when expectations are laid out in plain, conversational language. First, more eyes on the documentation ensures that important elements are not missed and expected outcomes are clear. Second, the person presented with the expectations is given the opportunity to accept or decline them. This is a pivotal moment in any business relationship (customer, employee, supplier, or lender). People choose powerfully, with their eyes wide open to what is expected of them and what they get in return.
Where client contracts are concerned, you and your staff are making a promise. All team members should know the direct or indirect role they play in meeting customer expectations, understand the bigger picture, and have the competency, attitude, and ability to honour the promises made.
All parties should give equal consideration to the consequences of opting out of the agreement altogether. Agreeing halfheartedly (reluctant compliance), with no real intention of honouring the agreement, lacks integrity and isn’t a workable long-term solution.
In the final chapter, we’ll cover how to evolve your business systems to add value that exceeds the expectations of all key influencers. When your entire team takes seriously the promises that have been made, momentum builds and growth happens effortlessly. The environment has been engineered to transform people, performance, and profit.
Performance in good faith, a legal term, is the product of trust and integrity. It happens automatically when the team has co-created the Code of Honour that defines how members communicate, collaborate, and lead together.
Remember: Your skunkworks project is an opportunity to transform your current business reality and build a foundation to sustain systemic growth.