A CPA firm’s recipe for high performance
New people policies can help grow revenue and increase productivity.
April 8, 2013
The recipe for quick business growth often includes a dash of acquisition or a shake of buying books of business. However, if you want to cook up sustained high performance, you need to develop a work environment that attracts and retains the best employees.
Top talent is a key ingredient when it comes to engaging customers for repeat business. Creating such a successful environment may sound easy, but most companies fail at it. Seventy-one percent of employees are disengaged at work according to Gallup. And Right Management found that 86% of employees plan on searching for a new job.
Most important asset?
I recently spoke to a group of 150 senior CPAs/CFOs and asked them one simple question: What is your most important business asset? The room split evenly between “cash,” “people,” and “me.” Let’s talk about the middle answer and save the others for another day. Many companies proclaim that people are their most important asset, yet treat workers like a depreciating asset—to the company’s detriment.
At a professional services firm, such as an accounting firm, the “people” are the product. Your clients are buying the expertise of the employees, not “the firm.” Losing a key employee or making a bad hire can drive away clients. Revenue, profits—and yes, cash—flow directly from the efforts of your people. Companies that understand this distinction have a clear leg up on maximizing performance over the long term.
So how can your company achieve sustained high performance? To start out, you don’t need above-market compensation, better benefits, pets at work, flip-flop Fridays, or higher 401(k) matches. Those are all great, but you cannot buy your way to engaged employees. For lasting performance, you need to focus on a clear vision, design your people practices for the 95%, and practice effective people management.
Create a compelling vision
To create a compelling vision, define why the company exists and communicate that clearly to employees. A strong company vision is magnetic and motivating. It points the way to a successful culture, though this opportunity often is squandered. Consider a typical version: “Our vision is to successfully grow the company by carefully managing our assets and by integrating our businesses through effective planning and allocation of resources.”
That isn’t motivating at all. Now consider a slightly truncated version of Southwest Airlines’ vision of “dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.” That vision is clear, actionable, and aspirational. Try defining your vision in behavioral terms that employees can identify with and you’ll be amazed at how motivated they become.
Build a culture for the 95%
Your people processes must support your vision. Regardless of how sexy your “employment branding” messages are, you will not build a high-performing organization with weak people practices. People will see through it. Your people systems are where the rubber meets the road—they can build, support, or destroy a winning culture.
Many times people policies are in direct conflict with the company’s vision. Here’s a case in point: A company that “values and trusts” its employees but then doesn’t allow them to work at home because management can’t “validate” workers’ performance. Take an honest look at your people policies. Are they designed for the 95% of employees that want to do a good job, or are they written for the 5% who misbehave?
Companies that design for the 5% spend 80% of their time dealing with the consequences. Design for the 95%, and you’ll be surprised how much morale, effort, and performance improve. The 5% will leave, or you’ll help them leave.
What does “design for the 95%” look like? Many studies have found that for small companies the most influential 95% strategies include: (1) Basing recruitment on organizational fit and success factors rather than just on job skills; (2) giving employees greater discretion in how they work; and (3) creating a family-like, flexible environment. The most demotivating thing for top talent is watching you put up with underperforming employees. “Hire slow, fire fast” is a good axiom to live by.
Practice positive management every day
People managers serve as the critical link between your company’s vision and its employees. For most employees their direct supervisor is the company. Most unhappy employees quit their supervisor, not the company. On the other hand, employees will perform Herculean feats for a good supervisor who supports them even when the culture is bad.
The supervisor plays a pivotal role in an employee’s morale, performance, and loyalty. Gallup research finds that poorly managed work groups are 50% less productive and 44% less profitable than well-managed groups. Make sure your people managers are effective and watch performance improve.
Still not convinced about the importance of your employees? One study by Cornell University found that small companies (average size: 53 employees) that implemented effective employee management strategies experienced 22% higher revenue growth, 23% higher profit growth, and a nearly 67% reduction in employee turnover.
So if you want a high-performing organization, start by developing a clear vision, implementing people policies for the 95%, and employing good people managers. Then you’ll be well on your way to better business results.
Doug Blizzard is the director of member development for CAI Inc., a human resource management firm with locations in Raleigh, N.C., and Greensboro, N.C., that helps organizations maximize employee engagement while minimizing employer liability.