EMPLOYEE SURPRISES
As a beginning searchfunder I've been talking to small business owners in my community about their experiences and strategies as managers. One recently mentioned to me that his human resources philosophy is "Hire good people." That sounds great, but as a searchfunder, part of the deal is to take on someone else's choices in human resources. Has anyone here experienced or heard of situations in which the employees at an acquired business just aren't working out? How long should one expect most employees to take adjusting to new ownership? Or have you been worried about taking on someone else's workforce but were pleasantly surprised at how smoothly that particular transition went?
* ^[redacted], The Importance of the Right Incentives and the Right Talent, https://www.searchfunder.com/post/the-importance-of-the-right-incentives-and-the-right-talent
* ^[redacted]’s Betting on Your Success https://www.searchfunder.com/article/viewarticle/1956
* ^[redacted]'s Gaining Traction https://www.searchfunder.com/post/gaining-traction-as-a-self-funded-searcher
* ^[redacted]'s, A Marathon, Not A Sprint https://www.searchfunder.com/post/a-marathon-not-a-sprint
"What I learned"
· An existing Culture cannot be changed · The current staff will not trust us · People like to stay in their comfort zone · Having a proper employment contract is vital · You need to set the tone with employees early and create boundaries · There are many unknowns that I was unaware. · Luck will play a hand in success and failure · How essential to have capable leaders or players within the organization who is willing to change and buy into a vision
"The mistakes I made"
· I did not make clear boundaries with key staff in the beginning. · I didn’t drill down enough into the skillset and characters of the staff. If I had, I would have probably realized that some couldn’t be trusted, and they lacked the skill set needed for success. · I should have brought in more help or consultants in the beginning, once I realized there were problems in the operations. his was because I lacked an understanding of the business dynamics. · We didn’t take control over the IT, passwords, and admin duties such as billing in the beginning · I couldn’t figure out a way to build their trust and sell them on my vision · Didn’t get rid of the toxic employees sooner
"Things we did right"
· Put Key employees on Retainment contracts and hedged our downside by putting incentives for the owners of the key employees stay· Made key hire, in the beginning, to make up for current staff weakness and a hedge in case of termination. · Set up incentive bonus program right away
"What will I do next time"
•Put clear boundaries at the beginning of the takeover stating my intention of keeping this company for the next 100 years and how the success of this company past and present depends on them. Everyone will have a fair shot if you don’t fit the culture you won’t be here. Be honest and upfront. Define who will be in charge and who reports to who (This will be hard but rewarding in the long run) · Properly access key employees, preferably before or during the due diligence phase. Use skill and personality test. Bring my key staff to access. · In the first week of transition take control of all IT passwords, accounts, and controls that any current key staff · If I don’t have a clear understanding of the business and or industry hire a consultant · If there is a leadership problem or a bad apple, get rid of immediately. The employees who have all the power are the risky ones and immediate start cross-training and take away control from the bad apple. · Constantly reinforce the vision, goals, and culture (if they have any then use the existing, mainly if it works). Hang this up and make it clear. · Listen to all employees, empower them, ask them what would make this company great, and find out what motivates them, and incentives based on these.
I had to learn the hard way to slow down and that great ideas/solutions don't matter if trust isn't established first with most teams. I learned how to "seed" ideas in a team by facilitating conversations and collaborations that allowed the team to come up with ideas/solutions to a problem on their own vs. feeling like those ideas/solutions should always come from me as the leader. Turns out people get a lot more excited about their own ideas vs. others.or those mandated to them. Who knew lol.
I sometimes wonder if I would have handled the situation differently if I did have the authority to remove/fire some from the project. I'm not entirely sure. But that experience does make me conscious of the idea of making sure that whenever someone has to be fired, that it's a failure on their part to adapt vs. a failure on my part to lead effectively.