Your operational plan is your blueprint for designing each area of operations (people, processes and systems) to optimally achieve your company’s objectives. If poor decisions are made in any area, costs increase, mistakes occur and growth slows. So, part of charting your company’s course must involve assessing each operational area for efficiency. Yet, when it comes to the people component of operations, things can get sticky.
Here’s how CEOs get into people trouble and how to make sure the right people are driving your bus:
People Pitfall #1 – Letting Rock Stars become Roadblocks: The team who got your company where it is today may not be the same team who’ll get it to the next level. After all, as a company grows, new skills are needed and employees who were once assets can become obstacles.
People Problem-Solver: Regularly re-examine skills sets for key employees. Remember that no matter how loyal employees have been, you’re not doing anyone a favor by keeping people in positions that no longer fit.
People Pitfall #2 – Being Passive About Pay: The traditional compensation structure is out dated and potentially harmful. The opportunity is in profits you could have gained with a more progressive plan.
People Problem-Solver: Research innovative compensation structures, like Pay-for-Performance, that are designed to increase productivity, as well as overall profitability.
People Pitfall #3 – Believing (too much) that to Err is Human: Success is built on failure and people do make mistakes, but there’s a difference between mistakes that come from stretching and those caused by carelessness.
People Problem-Solver: Create a culture around the idea of “doing it right the first time.” Employees need to set their bar high, and you can encourage them by setting a high bar for the company.
People Pitfall #4 – Being the Boss of the Budget: It’s easy to spend “the company’s” money – even easier if you have no stake in or responsibility for the budget.
People Problem-Solver: Charge employees with managing their own budgets. They’ll better understand the impact of spending and become more resourceful.
People Pitfall #5 – Killing Communication: Companies with inadequate communication are no different from couples with poor communication. There’s lots of talk, but nothing gets solved.
People Problem-Solver: Communication is the key to empowering employees. Develop strong internal communications strategies that keep personnel informed and engaged.
People Pitfall #6 – Failing to Find Fraud: Companies lose millions annually thanks to embezzlement – and it’s often trusted employees who commit this crime.
People Problem-Solver: No matter how much you trust your employees, you still need safeguards. Controls like making sure no single person is in charge of all your company’s finances, can save you embarrassment and money.