It’s interesting to me that as I write this, I work in a business that does not value its staff above all else. There’s lots of business rhetoric out there about valuing people, Richard Branson is one of the foremost in this area but I want to delve into it a little bit more to explain why I feel this is true for most businesses.

Throughout my working life I’ve experienced the discrimination of wages, both from the top down but also with respect to output. It’s my belief that business should pay on output, not just for supplier but also for its staff. If you have a staff member that makes you £10 million a year without any input other than their own then it’s reasonable to pay them £1 million pounds a year and not grumble.

Yet this simple value equation doesn’t exist in most businesses. A business will happily spend £30,000 on a new van, an item which realistically could be purchased for £10,000 and still perform the job and yet it will quibble over the salary paid to the person that drives it.

In a similar vein then, in sales a business will want to spend £20,000 on a sales salary and link the rest of their earning to the sales they generate (which is fair) and yet with suppliers, perhaps PR, they will pay a flat fee of perhaps £5,000 per month with no discernible output attributed to it.

When quizzed on the rationale behind this, most businesses have no answer for why they do it. In my mind then the only reason I can attribute to it is a desire by the management to keep the earning potential of staff down. Fundamentally then I disagree with this concept. I think that in every avenue of a business we should understand the return on investment of spend. Of course this can often be clouded.

For example financial directors often earn six figure salaries for simply accounting for actions that have been undertaken, whereas sales people that generate the lifeblood of a business are expected to survive on a mere percentage of that figure.

In my mind it’s not that financial directors aren’t worth the money they get paid, it’s more that there is an acute lack of linkage between cause and effect. If the financial director didn’t turn up for work, what would happen? I would argue the effect on a well-run business would be worse if they made no sales.
Yet this brings us to the real crux of the problem. Most businesses aren’t well run. The people in power covert control so as to give the perception of power. Business owners tend to restrict those trusted to make payments to an elite few despite the problems this can cause.

In a similar vein, sales directors hoard information to maintain control of their staff members.

In order to succeed then, we need to free up our enterprises. We must both embrace passing the control of the “how” over to highly capable individuals but also measure the impact that they have on our business and pay them based upon it.

This shouldn’t be limited to employees but extended to supplier too. How often have you seen a marketing manager paid less each month than a supplier who does a few hours work?

It’s a sad state of affairs that business owners and leaders have become too focused on protecting their own interests that the wellbeing and benefit of their own staff is hampered by a lack of either understanding or a deliberate desire to restrict their success.

People will always move on. Trade secrets will always be lost. But the trick is to limit this through looking after your employees and celebrating their output rather than failing to recognise it, leave them feeling unappreciated and ultimately shopping around for a new employer.

Chapter Summary:

• Businesses should value people like they value assets
• Managers hoard information in order to maintain their value
• Earning potential should not be impacted by jealousy

Read our next blog post “Liberate the how”.