Right Role, Right Person, Right Deliverables
One aspect of business that often goes awry involves identifying resources and the cost required to acquire or use those resources. While equipment and other physical assets may be a significant part of your start-up capital, the human assets – employees, contractors, and service providers – will be on-going expenses and can result in significant “opportunity cost” to your operations.
The expense categorization is easiest to see. You will be spending money on wages, salaries, taxes, and possibly benefits. The “opportunity cost” is often less easy to identify.
The opportunity cost of the human side of the business includes the ability of your team to perform all the needed activities of the business effectively and efficiently. It involves having the right skills sets, abilities, expertise, and experience to deliver the product and/or service to customers in a manner that builds both the business and its profits.
The “cost” then is what is lost when the roles are not adequately identified, defined, or filled the way the business needs to operate. Instead, the business makes role and hiring decisions based upon who is well-liked, personable, known, and/or available.
Businesses of all sizes, ages, and industries commonly mistake having “bodies” in jobs as all that it takes. Often there is a failure to recognize that having the right role defined is the first step in getting the results and return that the business needs.
Once a role is defined, the next step in the process is to determine the characteristics of the person who “fits” the role. These characteristics include education, experience, skills, abilities, expertise, and qualifications/credentials. Understanding the role in terms of the attributes it demands is critical to recruiting, selecting, and motivating performance of the person performing the tasks.
To maximize the performance of individuals, the deliverables from the person in the role need to be defined and clearly communicated. The expectations of performance need to be defined in terms that are measurable, quantifiable, achievable, and consistent with the organizations objectives. Establishing performance criteria that require a tam member to “stretch” to achieve is customary. Setting performance measures that align the business activities with overall strategic and financial objectives is logical. By making those goals and deliverables objective, quantifiable, and measurable everyone knows where performance falls.
How do you determine what roles need to be performed in your business? How do you define what skills, abilities, expertise, and experience your team needs? Where do you find those people? What relationship do you need with them?
First, not every role will be filled by an employee in your business. This is especially true in the initial stages of the business. Depending upon your business, you may be the only employee and may want to do it all yourself. Reality, however, is you will not have experience in every area that you need to address. You will be looking for contractors, advisors, service providers, and consultants to “fill out” your initial team.
The advantages of utilizing outside talent are many. They include:
• Buying only the amount of resource you need
• Selecting only the services you need
• Acquiring expertise through working with the provider
• Having the flexibility to change to someone else, if the relationship doesn’t fit
There are challenges in dealing with external resources. They include:
• Identifying reputable providers
• Understanding limitations on relationships
• Understanding the qualifications of various experts
• Managing the expenditures
• Timing the services to meet the business needs
• Having resources to pay
• Prioritizing the needs and deliverables
In some ways the benefits and challenge of utilizing external resources are paralleled by those of recruiting, selecting, and hiring employees. There are differences.
When dealing with employees or potential employees, there are special concerns and practices that arise out of regulatory guidelines. While many of those guidelines don’t come into play when the first employee joins your company (usually that is you!), employment practices are an increasing area of interest for enforcement agencies, because so many businesses “get it wrong” – even experienced, well-established businesses.
Why is it so challenging to handle this critical area of business? In part, it is an imprecise activity that must follow some fairly stringent requirements. Establishing objective criteria and applying those criteria to every person seeking a specific position is challenging. It is human nature to lean toward the person that is most “likable” or most like what we are use to or comfortable with – even when that person is not necessarily the best qualified.
Businesses need to be cognizant that these “preferences” can be interpreted as bias, especially if they lead to a pattern of employment behaviors – say excluding minorities or other protected classes from your staff.
Make the time to properly build your team. It is a sound investment.
Copyright © 2004 F.O.C.U.S. Resource, Inc.