It was the start of a new financial year and as the company’s leader, I wanted to enthuse our people about our plans for the future. After all, the management team had spent weeks working on a new three-year plan, of which we were proud.
We had a clear vision. We could see where we wanted to go. We were sure of ourselves and couldn’t wait to share the plans.
I booked a venue and invited our staff to come along to hear the good news, to be followed by food and drinks.
And it all went fine until we reached the end of my presentation, and I opened up the floor for questions.
One staff member stood and said: “I love it. It’s a fantastic plan. It’s what the business has been lacking. Congratulations.”
Now, I can take constructive praise and I flushed with a warm glow. This was encouraging!
“Do you have a question?” I asked.
“Oh, yes,” said the young man. “If you want me to buy into a three-year plan for the business, why is my employment contract only for 12 months?”
My warm glow turned into a hot flush. He did have a point.
In the discussion that ensued, I realised we had made a fundamental mistake with our planning. We had not aligned our objectives and plans with those of our people.
We were trying to think beyond our monthly and quarterly targets, wanting to build a better company that would be stronger in three years – when the people we needed to take us there couldn’t be sure they would see out the current financial year.
We had a simple choice. If we insisted on thinking short-term with our people, we would have to think short-term with our business.
Or if we wanted to think beyond the now, we would need to have faith in our people and give them a reason to feel part of the long-term planning.
Within a week, we offered to replace every fixed term employment contract with an open-ended contract of employment. We even gave staff the choice of how long a period of notice they wanted; if they wanted the security of knowing we couldn’t end their contract without six months’ notice, that was fine, as long as they were willing to give the same period of notice when resigning.
All but a couple of people tore up their old contracts and accepted the new deal.
The impact on our business was huge, and immediate.
We noticed how much more engaged our staff became in terms of our targets, financial and otherwise. The relationship between company and employee had been transformed with benefits to both.
Not long after, I took a phone call from the partner of one employee who had switched from the short-term contract to the open-ended deal.
“I just want to let you know we’ve become a normal family, at last,” she said.
I wasn’t sure what she meant until she explained that the nature of our previous contract had turned their family decision-making into a two-phase process.
In the first six months after signing a new contract, the family went on holidays, made purchasing decisions and generally got on with their lives. But as the calendar counted down on the last six months of each annual contract, the family put their lives on hold.
“We dare not make decisions in case his contract wasn’t renewed,” my caller explained.
The implications were obvious. If we ran our business like that, we would fail. And yet that’s what we’d been imposing on the very people we needed for it to succeed.
PHOTO – Mediafury