In 2006/07, as part of my perceived civic duty, I applied for and was selected to be a part-time “Community Columnist” for the Milwaukee Journal Sentinel. My job was to share my views on issues affecting the greater Milwaukee area. One of my columns addressed how Circuit City—an employer in the Milwaukee area—was treating its staff.
Let me tell you this—don’t do what Circuit City did to its staff.
On March 28, 2007, Circuit City, the nation’s No. 2 consumer electronics retailer at the time, issued a press release that said the company, “…completed a wage management initiative that will result in the separation of approximately 3,400 store Associates.” The next two sentences in the release appalled me.
“The separations, which are occurring today, focused on Associates who were paid well above the market-based salary range for their role. New Associates will be hired for these positions and compensated at the current market range for the job.”
In essence, Circuit City fired its higher paid and presumably more experienced Associates, and replaced them with newbies at a lower rate. And, as if to prove they’re not completely heartless, the release said terminated workers will, “…get a severance package and a chance to reapply for their former jobs, at lower pay, after a 10-week delay.”
What signal do you think this cost-cutting strategy sent to the remaining staff? How about, “Gee, if I work hard, do a good job, be loyal, and increase my income, maybe I’ll be rewarded by getting fired and replaced by someone willing to work for less.” That’s not exactly a sustainable business model.
With this type of misguided personnel strategy, it’s not surprising that Circuit City ranked at the bottom of the University of Michigan’s fourth quarter 2006 American Customer Satisfaction Index for specialty retail stores. I learned a long time ago that your team will treat their clients just like you treat your team. Circuit City proved it again.
I think you know the rest of the story. Circuit City filed for bankruptcy less than two years later.
Unlike Circuit City, you should NOT treat your staff as:
1. Interchangeable Parts
2. A Means to an End
3. A Cost
4. A Necessary Evil or
5. As People Who Solely Exist to Make Your Life Easier
Instead, if you want to get the most out of your staff and in turn increase the growth trajectory of your business, you would be wise to view your staff as
1. Unique contributors instead of interchangeable parts.
You’re not building Model Ts and you’re not running an assembly line. Each person on your team has unique talents to contribute and they should be respected for what they bring to your practice.
2. A valued part of your success instead of a means to an end.
Yes, you are the owner and the risk taker. But, you can’t build a long-term successful practice without recognizing the contributions of your staff. Each individual is a part of the successful whole just like each spoke is a part of the wheel.
3. An investment instead of a cost.
Copy paper is a cost. Human capital is an investment. Don’t just pay lip service to this bromide. When you view your staff as a human investment that grows and pays dividends over time, you will treat them differently and your practice will prosper.
4. A joy instead of a necessary evil.
Will having a team to manage and support always be a joy? No. However, your attitude, your approach and your working relationship with your staff should come from a mindset of joy, not an evil to be minimized.
5. As respected human beings instead of people who solely exist to make your life easier.
The minute you start thinking of yourself and your needs as superior to your staff, is the minute your practice starts to disintegrate. Regardless of a person’s level within your organization, they are due respect and dignity.
Your staff is your partner in success and by treating them as described above, you’ll develop a loyal team that will go the extra mile and help you build a practice that thrives. You’ll also be able to sleep well at night.
What other lessons have you learned about managing your staff?
Steve Sanduski, CFP, is the managing partner of Peak Advisor Alliance, a financial advisor coaching and practice management resources organization. He is also a New York Times Bestselling author and co-author of Tested in the Trenches: A 9 Step Plan for Building and Sustaining a Million-Dollar Financial Services Practice. For more from Sanduski, visit his blog. Also visit here for more information on where Sanduski will be presenting live content to advisors.