The easiest ROI booster that most entrepreneurs miss
From day one of starting a business, so much entrepreneurial mind share goes to figuring out ROI. Every dollar counts. You start hiring people. Their salary is cash out of your pocket. When they screw up, it costs you.
The business grows. Complexity increases. The search for ROI improvements continues. For most businesses, people investments add up. They can be the largest single expense line.
So what do entrepreneurs do to maximize the output of the team? Most of the focus falls to hiring, firing and intense management of performance. Hire top performers. Expect great things. If they turn out to be a dud, fire them. It sounds harsh, but this is a reality. When an investment isn’t paying off, move on.
The problem with this cycle is cost. Many expenses associated with employee turnover are invisible. The end-to-end process burns a pile of cash. So entrepreneurs focus on better hiring, better on boarding, faster firing. It’s an expensive way to learn.
There is a cheaper, faster, and simpler habit you can develop. It won’t cost you a dime. And if you’re not using it already, it’s guaranteed to boost your ROI.
The ah-ha moment
A colleague of mine relayed a story to me. He was meeting with the CTO and founder of a billion dollar start-up success story. Over coffee the CTO shared a recent revelation. He had come to appreciate the ROI of asking his team about their weekend. People worked harder and gave more to the company because he showed interest in the personal lives of his team.
I shared this story with a senior leader at another company. Her response: “Wow, that’s exactly what we need. If we could get our CEO to do that… to say good morning to the team… to show he cares… it would revolutionize our company.”
Why it matters
In the early part of my career I worked in a team of 12 people reporting to an executive. He was my second-level manager so I didn’t interact with him much. But I did have full appreciation that my career rested in his hands. He came in every morning and went right to his desk. He never said hello and rarely acknowledged me. Some days it made me anxious, other days it pissed me off. In both cases it affected my creativity and contributions to the company.
Most entrepreneurs don’t get this. There is a magnitude difference in output from employees who feel valued and respected. Your words and actions as a leader carry more weight than you may appreciate. Every disrespectful comment or gesture leads to a measurable decrease in output. Showing that you care adds fuel to your team’s fire.
A recent study of nearly 20,000 employees demonstrated that, “Being treated with respect was more important to employees than recognition and appreciation, communicating an inspiring vision, providing useful feedback — even opportunities for learning, growth, and development.” Respect of an individual as a human being is different from satisfaction with performance and output. If we feel respected we can take pretty much any feedback people want to dish out. We’ll work hard to improve. When respect is missing, creativity and performance drops like a rock.
So here’s a four-week challenge for you. See what happens. Make a point of talking to people. Ask about their weekend. Show respect for each person on your team, even if work performance is lower than you’d like. Your ROI will improve.
If you are ready to learn more about boosting employee ROI, let’s chat.