I was having a discussion with a banker friend of mine who suggested that businesses that were successful were good at identifying and hiring high quality people. I disagreed. Ouch! That is totally against the grain of conventional wisdom, right? Not really.
More important than hiring high quality people is establishing solid and proven processes that make your business work. Take a look at McDonalds. This business is successful, not because of the quality of the people, but because of the quality of the processes that the people follow. This is why over 75% of franchise businesses succeed while 90% of start-ups fail.
So what is the lesson here? As a small business owner, you should focus your attention on defining what works and what doesn’t in your business. Measure your activities to a point, so when asked, you will know exactly how long it takes for the fries to cook, when to flip the burger and exactly how much secret sauce to put on the bun. If you have defined your business processes to this level, all you need are employees willing to follow your rules. The rest will be automatic.
That’s not to say that you should hire just anybody. On the contrary, as you grow you will want to hire people that are loyal, trustworthy, innovative, and talented. These people will become the backbone of your company. In the beginning, however, what you need are technicians, workers who can free up your time so you can work on growing the business.
In the early days, the secret is loyalty. Employees that are willing to follow your rules are more valuable than experts that think their experiences will contribute to your success. If you have done your homework, you already know what works and what doesn’t. Hire those who are willing to follow and your profits will be better than those who pay a premium for the experts.
To Your Success -
Hi Rick,
I enjoyed reading this post. I believe, however, that your banker friend is just as correct as you are.
It takes both the right people and the right systems. I lean toward the same line of thinking as your banker friend, though, because I have seen many companies with the latest technologies and business systems that are still not performing as they should because they have not paid attention to the people side of the business.
Your friend said, “high quality people.” If you want people who will follow your direction and that is the “quality” you are looking for, then you better have an assessment tool that can help identify that quality (or whatever quality you require).
It takes good people, intelligent and thoughtful leadership, and sound business systems for a company to be successful. A lacking in any of those areas will result in less than desirable profitability.
So, you are both right.
All the best,
Karl
Thanks for you comments Karl – I figured I would get some dissenting comments on this one.
I do believe that quality people are important and to make an across the board statement that they are not, is probably pushing the envelope a bit.
Of course, when it come to highly technical positions, such as IT or engineering, etc., it is imperative that the skills be there in the employee.
But there are a very large number of businesses out there that don’t require that level of skill set, and for those businesses, it is more important to have processes in place than highly skilled people.
Good points that you make however.
Thanks.
To Your Success,
Rick
I think you are right about the SECOND franchisee. The initial restaurant needs people who not only understand how to deliver products, but also how to communicate and document the process for others to follow! These people are much harder to find…