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  • Writer's pictureDel Chatterson

Mistake #5: Neglecting key relationships – Employees First

This article is an extract from Uncle Ralph's, "Don't Do It the Hard Way".

Mistake #5: Neglecting key relationships

Employees First

Stan was leading the group today and started with, “OK, let’s start the discussion with a question. Which relationship is the most important key to success for any business?”

“Customers, of course.” And it wasn’t just Larry with the obvious answer this time.

“OK, then which relationship can be the biggest obstacle to your success.”

“The bank”


“The government with all their regulations and reporting requirements”

“Suppliers, who don’t deliver as promised.”

Now we had some differences of opinion. So I interjected, “Can we all agree though, that we cannot keep our customers happy and coming back for more, if our employees don’t treat them well? And the best way to ensure that happens is to treat our employees the way we would like them to treat our customers. Isn’t it always obvious to the customer when the flight attendant, service technician or waitress is not happy with her job?”

“The best lesson I ever got was in Las Vegas (and it’s a story that should not stay in Vegas). We were at the annual computer conference and exhibition there (COMDEX) and my partners and I were having a long breakfast meeting in the Treasure Island Casino dining room. Long after breakfast we were still getting smiling and prompt service from the waiter with never-ending cups of coffee. We were there for so long that the shift changed, but we still had friendly, attentive service from the waitress who now was bringing the refills. Finally, after we had remarked on the service among ourselves, I said to her, ‘We have been coming to this conference in Vegas for many years and have met in many different dining rooms, but this is absolutely the best service we’ve ever had. How do you do it?’”

“She said, ‘The owner, Steve Wynn, treats us so well, we treat everybody well in return.’ Boom. She got it and the message stuck for me.”

“Great story, Uncle Ralph, and I agree,” said Brian, “but what if that well treated employee just doesn’t get it.”

“That happens. I remember a service technician telling me that his sharing in the monthly sales bonus made no difference to him; he still treated all the customers like idiots. Apparently we had made a hiring decision that was a mistake; so we asked him to leave and take his attitude elsewhere.”

“Recognizing and removing the misfits is a difficult but necessary part of people management. If employees do not buy into the corporate culture they will never be effective members of the team and need to be removed. Doing it well is important though, because all of your employees are watching and judging you as a manager.”

“When I was doing a survey to develop my list of the ‘The Seven Biggest Mistakes that Entrepreneurs Make’, one entrepreneur suggested it should include “Hiring too Fast and Firing too Slow.” He had a good point and it reminded me of the time I made both mistakes with the same employee! (More lessons learned.) And I know you want to hear that story, right?”

“Sure,” said Larry, “I find it reassuring to know you made so many mistakes and still survived!”

“Well, let’s just remember the old cliché, ‘What doesn’t kill you makes you stronger.’ Or as Bill Gates used to say at Microsoft, 'In this business you have to recognize your mistakes quickly, before they get big enough to kill you.’ Most of the time I did fail fast and move on, ....

“But back to Bernie (not his real name, of course), and my mistake of hiring him too fast and firing him too slow. He was a sales rep with a bit of a mixed track record and some contradictory references – ‘great guy, good results, but hard to manage’. Of course, I thought I was a better manager than his previous bosses and I needed a sales rep, so signed him up. He did well for a few months, bringing some new customers with him and getting some big orders for us. But he was hard to keep track of and I started to notice his work habits were letting us down. Late for meetings or not showing up at all; refusing to make the extra effort if it interfered with his ‘personal’ time.”

“So after about a year, one more refusal to go out of his way for a customer caused me to sit him down and ‘counsel him out’. (That was the clumsy euphemism we used to use at Coopers and Lybrand to advise someone that their career plan would be better served somewhere else. Instead of delivering the very clear message, ‘You’re fired!’) Then I compounded my errors by trying to be kind and giving him some good referrals to other companies that might be hiring. That wasn’t doing him or his next employer any favours.

Immediately after he had left us, I started to learn from employees and customers that he was an even bigger problem than I thought; not only were his working relationships contentious with everyone, but he also had another business on the side that he was working at with his wife when he was supposed to be working for us. ‘What took you so long to let him go?’ was the common theme. ”

“So in terms of hiring, firing and managing performance, I learned to include other managers in the process and to be much more observant of who are the team players and who are not. Who get it and who do not. To recognize good or bad performance and to encourage feedback my guiding principle remains: “Praise in public; Punish in private,” even if it is never quite that simple.”

“Dealing with poor performance is only one of the challenges in managing employee relationships.”

“Recognizing and rewarding high performance employees is also a very important priority, even if they need less supervision and micro-management. They need to be engaged and developed to meet their own goals. You need them to act as if they are owners too – always working to promote the company and improve its performance, not just their own career plan. Mismanaging or neglecting high performers puts at risk the most important resource required to build value in your business.”

Avoid Mistake #5: Neglecting Key Relationships

Your Uncle Ralph, Del Chatterson

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Click Here to check out Uncle Ralph’s books, "Don't Do It the Hard Way" and "The Complete Do-It-Yourself Guide to Business Plans" Both are available online or at your favourite bookstore in hard cover, paperback or e-book.

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