A relatively new client revealed to me that she was blindsided with more than $100,000 in overtime penalties for her hourly workers. Her first inclination was to blame her employee, who was responsible for timesheet reporting. As I started to uncover the broken links in her processes, I learned that the company’s entire time-tracking and time-reporting system is completely broken.
My client had purchased a time-reporting system that enables her hourly employees to clock in and clock out from their client’s site. The problem was, it wasn’t rolled out well, and most employees weren’t using it. They were using paper time sheets, which then required three people to enter and/or verify the time reporting. Not only did this broken process result in a very expensive unnecessary expense, my client is dealing with excessive inefficiencies in her organization, and she is exposed to potential claims for timesheet fraud. Further, my client is not playing to the strengths of her employees who are spending their time on this administrative task, and she’s triple-paying to have a single task completed.
We are now working to assign responsibility and accountability to the VP of Operations, who should have been managing this in the first place. He is charged with implementing a system that actually works, and he will own the time-tracking processes from this point forward. It is not the CEO’s job to run operations.
In another organization, my rapidly growing client hasn’t implemented a contact management system (CMS), like Salesforce. Everyone in the company uses their own contact management systems to track contacts. One person may use Outlook, one may use Gmail. Nothing is systemized, or stored in a single database. If one of these employees leaves, the contacts leave with them. In addition, they have no formal sales process. They don’t track their pipeline, they don’t follow a sales cycle, and there is no accountability. They believe they are doing “fine” because they continue to win good contracts, and have strong profits. When I asked my client (the CEO) if she had access to all of the contacts that her team has made (prospects and customers), she realized she had a problem. If one of those employees leaves with those contacts, it will be her fault for not systemizing the sales process. We are now evaluating contact management systems to determine which one is best for her organization, and we will assign the implementation and roll-out to her COO. (Again, it is not the CEO’s job to run operations).
One of my greatest sources of anxiety when running my first company was that we were a bit “hero-centric.” We heavily relied on a handful of key people to run the organization. It was the primary driver behind my requirement to implement a Project Management Office (PMO) inside the company which standardized all reporting and project oversight. We had great PMP-certified project managers but no standardized processes. It was, as one former PM called it, “the wild, wild west.”
When companies are “hero-centric” versus “process-centric,” this causes several problems:
1: Tremendous inefficiency. Without the right processes, companies constantly reinvent the wheel every time something has to be done.
2: The company is at the mercy of a few people. If they leave, it will wreak havoc on operations.
3: Hero-centric companies often have lower morale because those employees that are not the heroes may feel marginalized or under-valued. Everyone who shows up every day should know that they are valued. While roles differ, all contributions matter.
In today’s business environment, it’s easy for companies to launch a beautiful website, build some compelling messaging, and engage in a social media campaign to give the perception they are a well-oiled machine. Especially in small businesses, what you will find when you lift up the hood is not a glistening engine, but instead a mouse running on a wheel to keep things going.
Small businesses have the unique opportunity, before they grow too much, to lay a strong foundation from the beginning. Getting the processes right from the get-go will save so much time and stress later. As a CEO who lives at the 50,000 foot level from a place of vision and strategy, I know how painful this can be! Fortunately there are so many options now for part-time & contract administrative and operations support, and there are so many technology solutions to help automate processes. The costs to systemize no longer need to restrict process development.
What’s not working well in your organization? Before pointing the finger at the employee, take a look at the work flow. Are your employees set up for success with the right processes? No matter what your company is producing (products or services), every company is an assembly line. The demand comes in, the company generates the requested service, and the company delivers it.
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“Taking Leaders from Triage to Transformation.”