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Small
Business: The Engine of the Economy
By Ed Yager
One more run at the small business owner might be helpful. The vast majority
of employers and employees are identified in this category of organization.
Dave Johnson, owner of OAKRIDGE CABINETS caught my attention last week.
I heard Dave talk, with tears in his eyes, about an employee he had hired
a month earlier (a work release inmate). He willingly took the risk involved
in hiring and training a "project" and was pleased with the
progress the employee was making. He related with disappointment that
in the middle of the day warrant officers came into his shop, handcuffed,
and hauled this fellow out because he had violated his 7:00 curfew. When
I saw the outrage at the humiliation the officers created for this man
I thought this is a leader worth finding out about.
Here is what I found out. We know that there are 3
primary reasons people leave their jobs. There are some lessons here that
were visible in interactions between Dave and his crew. These reasons
are first, a pay offer that simply can't be refused. Dave said, "Some
of my guys have experienced this - after all they are extremely experienced
and skilled cabinet makers. Dave said he has encouraged them to check
out the opportunity and in most every case they chose to stay discovering
that money is not all that matters. In some cases where they have left,
they soon returned. Dave does not have the arrogance I have found so often
-- "I would never have that disloyal so and so back in my shop."
or "Ingrate! After all I have done for them." Dave is glad to
have them back with a few new lessons learned.
Second, they begin a search on their own feeling they
are not being paid what they are worth compared to other's contributions.
I asked Dave how he kept his people loyal and why he makes a point of
paying more than the market. Our research bears him out. Because of their
experience and skill his costs in the final analysis are considerably
lower. He has less rework and warranty work. The low cost of errors are
more than returning his investment in his employees. Third, people leave
because they don't like the boss. (Boss is the operative term here.) We
have known for decades that when employees vote for union representation,
most votes are not votes for the union, they are votes against a boss.
Dave is extremely well liked. He relates to, spends time with, and understands
the needs of his team. Dave seems to be more like a brother than a boss
- there is no sense of turf or territory.
Dave takes pride in the fact that everyone can do every
job, and that is important in his employee relations. He says he does
everything he can to be flexible and to allow his employees the time they
may need to take care of personal matters. In return he says, "They
are very aware of what needs to be done, so they come in at other times
to be sure the work gets done., and they can cover for each other."
I asked him about how he maintains the high quality standards he insists
on. He said simply, "I am really meticulous. They often tell me we
are spending too much - we can get cheaper parts - we can save money if
we do this or that, but I want the same level of quality in every customer's
home or business as I would want in my own home so I do have to keep reminding
them of the importance, the value, and the reasons for the level of quality
we maintain."
Although it may be true that the small business group
is a haven for the cheats, the scandalous, and the rip-offs. They are
able to hit and run only by being small enough to fly under the radar.
The fact is that the vast majority of small business owners are just like
Dave Johnson. They are honest, ethical, anxious to maintain control of
their quality and service, more given to staying small so they can stay
close to their customer, remain hands-on, and continue to practice their
craft. They work hard, long hours, and feel personally responsible for,
and accountable for results. They have trouble making a significant profit.
Growth is not a goal. Costs are often too high because they spend too
much time trying to please others. They give away too much on the revenue
side trying to compete with mass marketers and mass producers.
The folks at OAKRIDGE CABINET, as in the vast majority
of small businesses are, fortunately for the rest of us, true craft persons.
Twenty years in business, long service, and loyal employees are good indicators
of the success of this small business person. Dave does not go into the
shop to do the work anymore, however. He says, "They don't like me
meddling in their work, and I don't need to tell them how to do their
job".
He invested in a software package that saves him time,
allows for thousands of parameters, and powerful renderings allowing the
customer to make better choices. (I must admit to feeling like I was watching
an episode of This Old House.) They have also adopted the Quick Books
Pro Software for managing the business. Now he has better information
faster and for much less cost. A ne w costing program will now give him
even more control on a project-by-project and task-by-task basis. Too
many small business owners continue to work out of a shoebox, do their
own accounting, and find out only at tax time whether or not they are
making money. Dave points out that even in a specialized small business
like his, he is able to spend most all of his time now on tasks that add
value.
These times cry out for tough minded leaders especially
in small business. Leaders who are dedicated, enthusiastic, empathetic
and patient, willing to give of themselves on behalf of others. Martin
Luther King taught that "A tough mind and a tender heart are one."
Dave Johnson represents the best of how such a philosophy can be brought
to life and of what so many small business owners are all about.
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