Are You Set to Grow in 2014? 5 Resolutions for an Awesome New Year

Whatever you are doing to get ready for this year’s success, there is one thing you are not paying enough attention to: talent.  But you probably worry about it.

Most business owners worry more about people than any other part of the business according to Margaret Heffernan, a successful tech entrepreneur.  They worry about hiring the right people, employee productivity, and keeping top performers.  But even though they worry a lot, they usually don’t take action to drive successful talent management.

A company’s workforce is the number one key to success regardless of the size of the organization. A competitor can figure out how to copy a product or service, but it is just about impossible to copy the talent your employees bring to work every day.  Not only is talent your biggest success driver, it is the biggest expense, too:  for most, 70% (or more) of typical business expenses relate to people.

With all that business owners have going on, it is easy to overlook the people issues. According to Zur Shapira, a professor at NYU’s Stern School, “They may believe they’re doing all that’s called for,” he says, “but in chasing growth, it’s easy to overlook the people issues. The truth is, too many are not likely paying the amount of attention that’s called for.”

While 80% of executives believe having the right talent is critical to growth and has a direct impact on revenue, most have neither a strategy nor a budget for managing talent.  About one in 10 business owners say that their talent approach matches their business strategy and only 18% even know whether they have the talent they need to grow.

So if managing people is so important, why don’t more businesses get it right?  Often executives simply aren’t sure what specific actions will work.  The good news is that a few changes can make a big difference! Here are 5 resolutions that will help you be even more successful in 2014.

1.     Resolve to outperform competitors.

Adopt and model effective people management every day.  Few managers get management training, but when they do, it makes a huge difference!

Since 2001, McKinsey and Stanford have studied the effect of good management practice on firm performance, sampling about 4000 companies around the world.  Companies that know and use effective management practices perform significantly better than those that do not, so improving management practice in your company is one of the most effective ways to outperform your competitors. Effective management starts at the top.

The next 4 resolutions are important management resolutions that executives should pay attention to.

2.     Resolve to create performance clarity.

There’s tons of research proving that good goals and performance clarity lead to high performance…every time. So set goals!

The best goals are clear, measurable, and balanced, including both financial and non-financial measures.  (In top companies senior managers find that non-financial measures are more effective motivators than just financial measures alone.) Make sure the goals are specific, are achievable, include a metric, and have a due date. Then write them down so everyone can reference them for evaluating progress. Once goals are set, make them part of regular (once a month works) executive discussions with senior managers.

When executives act like the goals are important, performance improves.

3.     Resolve to hire the best talent.

What makes your company a great place for people to work?  If you are struggling to say why people should work for you rather than for your competitors, there is some executive work to do!

Competitive pay and a family –friendly culture are 2 factors than just about everyone talks about.  But the pay-off comes when your company goes beyond comparable to distinct.

Think about offering training and development programs (people love to learn), move some decision making to the team level, and offer flexible working hours.  Then use hiring systems that work.  Resumes and interviews do not correlate with future success on the job (correlations of .10 to .18 for those who like that sort of thing), so go beyond them to learn who the candidate really is.

Incorporate a valid pre-hire assessment before reading resumes or interviewing.  They deliver the most accurate and reliable candidate data.  Candidates lie on resumes and in interviews, but they cannot fake an assessment.

Bottom line – use hiring tools that work and your talent efforts will pay off at your bottom line.

4.     Resolve to retain top performers.

If one of your star performers wanted to leave your company, what would you do?

Remember, hiring is one of the most expensive management activities with each hire costing from 25% of annual salary to over 100% for senior team members.

If you think there is nothing you can do to keep your best employees, think again.  Top performing companies know who their top performers are and do whatever it takes to keep them.

Begin by making a list of employees you do not want to lose.  Now, make their managers responsible for keeping them in the company.

Talk with managers about how important it is to effectively manage their stars – that means engaging with them every day.

5.     Resolve to reward senior managers on the strength of the teams they build.

Management = action.

Executive goal setting, monthly conversations about results, teaching senior managers about good management, learning from both data and your managers – all these actions must be modeled by executives.

Executives in top performing companies around the world use management practices that are proven to work.  For example, senior managers and execs talk about performance benchmarks as a team and they identify development opportunities for the most talented employees.

If an employee is not performing to goal, they take action, including moving employees to positions where their skills and talent are more appropriate.  Jerks are removed from the organization – even if they are “top performers”.  (Research finds that the cost of the damage jerks can do in an organization is never offset by their results!)

In other words, expect senior managers to actively manage and reward them for their results.

Executives are under pressure from all sides: customers, investors, employees, suppliers, and family push and pull.  As a result of this stress, too often they begin to treat people like the furniture.  But if your success matters, understand that it will depend on your employees.

Take this opportunity to get dramatic improvements in 2014 performance simply by using good management practices. Start the year by acting on one of these talent resolutions, then in a few months add another, then another.  The reward will be a happy and prosperous new year!

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