A Look Back – And Ahead
In this month’s newsletter, we are doing a roundup of some of the small-business trends that we witnessed in 2007, what did we see work and what challenges appeared? We’ll also preview some issues we expect to arise in 2008.
On the positive side, we saw many businesses growing in terms of sales, profits and workforce size. But along with those positives came some challenges. There were issues with hiring, sales, leadership development and human resources. While these are typical “growing pains” that occur in many businesses, we want to be proactive in addressing them. Here’s a breakdown of the issues:
Hiring is tough. It takes time, and if you mess it up, it can be costly. Many of our clients saw significant increases in business last year but were somewhat behind the curve in hiring. As business expanded it took longer than planned to fill positions. With certain positions, such as software development, project management and sales, there is a significant shortage of top talent. The demographic trends show that this could continue for some time.
So, if you haven’t done so already, it’s time to get smart about hiring (see our previous article on hiring). Putting time into better job descriptions, more specific interview guides, compelling job postings and gaining high quality candidate referrals will all earn dividends down the road. Additional resources I’ve been tracking include two books: Topgrading and No Bad Hires.
Training & Leadership Development
If you can’t buy all the talent you need, how about developing your own? To do this, many of my clients are focusing more this year on performance management, training and development, and leadership development programs. This runs the gamut from budgeting 3% of payroll to spend on outside training (see our article on training) to specific Coaching and Leadership Development programs. Companies that may have hired too fast are focusing on Performance Management to improve or remove some of their lower-performing staffers.
Millennials in the Workforce
For some clients, dealing with the younger generation, known as the Millennials, is no big deal, but for others it’s been a real challenge (See the 60 minutes episode about this trend). Some of the younger generation of workers has different expectations and exhibit behaviors that send even the most experienced manager’s blood pressure through the roof. We have seen employees from several of our client companies quitting without notice, blowing up at the first sign of negative feedback, and exhibiting other signs of changing workplace expectations. Finding ways to accommodate the values common in this younger workforce without compromising your own has been a focus of our work with some clients.
For some businesses, it was a phenomenal year for sales. But can they duplicate that in the future? If you haven’t created a process for selling your services, you should make that your top priority for next year. A well-honed sales process produces predictable results – couldn’t you use those? We have found that a sales process takes about six months to create and up to 18 months to really get it humming. But, it’s worth the time. Companies that have dependable sales processes have the confidence to make hires, knowing that the work will be there. Here is a case study about how one of our clients, MacArthur Corporation did it.
In 2008, we see many industries bracing for some economic turmoil. We don’t expect there will be a severe economic downturn, but we may look back on 2007 as the “good old days.” Though the Index of Leading Economic Indicators is falling, the Private Company Index is still rising, but despite that the survey of private company CEOs are not as positive as they have been. If times get tougher next year, we expect folks to concentrate on:
I see some clients getting leaner and meaner, to protect the gains they’ve made in the last few years. Examine your expenses and cut the fat where you can. You may have done this already when you did your budget – but if you didn’t do a budget, it’s time to take a close look at your business’ spending habits. Having clear, repeatable processes for your core business is essential to finding the little changes that can produce big results.
Getting Good at the Basics
When the water gets choppy, you want to have the basics (Sales process, a working budget & dashboard, customer care, vision and strategy, etc.) really nailed down. This will allow you to focus your time and attention on the changes that the market is throwing at you without putting your base business at risk. I see clients getting a broader group of team members involved in tracking the company’s key performance indicators so that the whole team can react to changes as they come.
For our clients who have expanded their teams in 2007 we are seeing an emphasis on growing the leadership capabilities within their new team members. Goal setting, performance management plans, training and development plans and more formal mentor/coaching are on the agenda for these firms. You have new talent on board; now you need to get the most out of it.
Do these trends jive with what you are seeing in your own company? Do you see other trends developing? Drop me a line and let me know what you think. If any of these strike a chord with your firm, I’d love to sit down and talk further about them.
Photo credit: TheAlieness GiselaGiardino²³