Updated: Jan 25
As business owners you have a vision for your company. You believe you know what you need, but are surrounded by people who don’t seem to care. How do you know? Because these folks seem to take little initiative in assigned tasks. Because they fail to figure out solutions to the simplest problems. You find yourself muttering, “If I want something done right, I need to do it myself.” Your solution to this problem is manipulation. Maybe you can trick your employees into caring about your business… pay them bonuses for right behavior, or give them more benefits, or threaten to fire them if they fail. You’ve tried every trick in the book and nothing seems to work. You don’t have an infinite amount of money to pay bonuses; and you’re tired of making idle threats.
In this blog post I want to help you understand how you are subconsciously creating the problems in your employees; and what you can do to lead instead of manipulate your employees to grow your business.
I’m a Core Energy Coach. If you’d like to learn more about energy, I suggest you read my blog post entitled “What is Core Energy?”. Core Energy is analogous to attitude. Energy is something that you can change by changing your perspective. The higher level of energy you attain, the higher level of energy those around you will achieve. The higher energy level others achieve, the easier it is to grow your business in a healthy way.
There are seven levels of energy, but I want to keep this blog post to the first five levels for brevity. There are two types of energy: 1) catabolic; and 2) anabolic. Catabolic energy is the easiest to access in emergencies; but tends to lead to destruction if used long-term. Anabolic energy is the hardest to access and is a building type of energy that creates organizational health long term.
Level 1 – Victim – I Lose
Level 1 is the most catabolic level of energy. Victim leaders believe that they are victims of some aspects of their environment. As business owners, this environment includes the government, customers, employees, home life, and competitors. They will lose no matter what they do. A victim leader will tend to close their office door and vegetate while their business goes bankrupt. Why not? It doesn’t matter what they do anyway.
Level 2 – Conflict – I Win, You Lose
Level 2 is the most common level of energy in our modern workplace. Leaders with this energy see their employees as adversarial. Their employees have their own needs that are contrary to the company’s needs. As their boss, you must use threats and promises of higher compensation to get them to do their work. Conflict seems natural in a free-market environment where the better companies survive and the lesser companies fail. These same tactics are used to reward and penalize employees. While this type of leadership is successful in the short term; it often fails in the long term.
Level 3 – Acceptance – I Win
Level 3 is common in a small business. Small business owners are often highly productive workers. A small business owner will wear multiple hats doing sales, marketing, and much of the thinking for the business. They will hire several assistants who help them with menial tasks. The success of a Level 3 leader will rely on that individual’s ability to do the work without delegation. This approach will work up to a point. As soon as the business grows to a point where the Level 3 leader needs to trust others to do critical tasks, the business struggles to grow any further.
Level 4 – Compassion – You Win
A compassionate business owner is thinking primarily about customers, employees, and others outside of themselves. This care can translate into employees caring more about the business. Customers will see this care and want to stay with such a company that seems to give their needs priority. A compassionate leader will strive to support his staff with resources to do their job well. They will often sacrifice business profits to ensure that employees and customers are taken care of properly.
Level 5 – Opportunity – Win/Win
A business owner who is an opportunist will achieve strong business growth while also making winners out of employees and customers. Deep down inside, this is the level that all business owners want to achieve. Sadly, they accept a lower level when they run into obstacles along the way. A Level 5 business owner sees obstacles as opportunities to improve. When leaders achieve win/win cultures, the level of effort required to get employees to do the right thing is much less.
What Can You Do to Lead at Level 5?
As you read the descriptions above, you may say, “Of course, I want to be at Level 5, but my employees are deadbeats. What can I do?”
There are some tactics that I recommend to my Level 2 business owner clients who want to be at Level 5.
Acknowledge & Validate
Acknowledging and validating is the most powerful tactic to connect with struggling employees. It is also the hardest to implement for most bosses. Here’s how it works. Let’s say that your employee is not coming to work on time. A Level 2 boss will threaten penalties if the worker doesn’t start coming to work on time. A Level 4 boss will let this behavior slip for a while and may ask to help that employee out in some way. A Level 5 boss will meet with this employee and have a discussion. The start of that discussion will start off at Level 4 with a question, “Tell me what is causing you to be late?” The employee will say something like, “I have to drop my kids off at school; and then I hit rush-hour traffic.”
An acknowledgement and validation response will go like this, “That’s perfectly understandable that you can’t make it to work by 8:00 am. If I had to drop off my kid and then get through this traffic, it makes sense that you can’t make it to work by 8:00 am.”
At this point your employee will feel like you’re on their side; and you understand their plight. It most cases, you will not just validate an action, but will also validate their emotion that is connected with their situation.
You must now follow up with a win/win suggestion. If it is imperative that this employee be at work by 8:00 am, then you may offer the reasons that it is important that he arrive to work by 8:00 am followed up with a strategy on how to help him/her get their kid to school on time safely; and get him to work on time. If it isn’t a big deal of your employee is 15-minutes late, you may offer a solution of flex-time to allow them to come to work later and leave later; or do an hour of work from home until rush hour traffic subsides.
The key in acknowledging and validating is that you truly empathize with your employee’s struggles and help them figure out a solution. A Level 2 leader will believe that this is a personal problem and is the employee’s problem, not the company’s problem.
Most employers feel like there is a natural win/win relationship with their employees. Their employees get a paycheck; and the employer gets production from their employee. This is indeed a win/win relationship. However, many employees fall into a type of complacency where they feel entitled to a paycheck regardless of their level of productivity. The best way to avoid this complacency is to clearly communicate to your staff how their individual effort directly affects their compensation. You must be careful about how you frame these communications. A Level 2 leader will offer conditional bonuses as a carrot to get workers to work harder. Employees may see such bonuses as a manipulation tactic. Employees of such a leader will think, “My boss wants me to work twice as hard to earn a 10% bonus. They get double the profit while I get a paltry 10% bonus. They win, I lose. No thanks!”
The key to creating a win/win culture may involve bonuses or sales commissions. However, a win/win culture is more about employees feeling having direct control of their level of compensation, status in the company, and work product.
A very long time ago, I worked in the cherry orchards picking cherries. I got paid $0.55 to pick a bucket of cherries. I would see the price of cherries in the store, and a can of pie cherry filling cost $1.69. I estimated that there must be 100 cans of cherries in a bucket of cherries. I was getting paid 0.3% of the total revenue received in the whole cherry pie filling enterprise. At the time, I was a high school kid and didn’t particularly care about how unfair this was as long as I could earn enough to buy stuff my parents wouldn’t buy for me. Your employees do care about their worth, how they are contributing to your business, and the fairness of your mini-business relationship.
When it comes to money, you must ensure that communications with your employees about money happens with the right level of education and knowledge about your business. Level 5 leaders genuinely want to compensate their employees consistently with the benefit to the company. Level 4 leaders err on the side of the employees. Level 3 leaders allow inequities in compensation as long as no one knows about them. Level 2 leaders try to get the upper hand in compensation negotiations. Level 5 leaders make sure that employees win when the company wins.
Also, remember that not all employees make direct contributions to business revenue. In these cases, ensure that compensation is consistent with skill level and accepted salary levels for such positions.
Business owners are faced with difficult decisions that appear to result in one party winning with the other party loses. Contracts are written by lawyers based on this very premise. The reality is that most business challenges can be negotiated to win/win results. You must protect your business interests with reasonable contract clauses. However, your customers and you will make mistakes and need some level of grace from the other party. It is inevitable. Always look for opportunities to share the burden of such mistakes with your customer whether you made the mistake or your customer made the mistake. Likewise, look at ways that you can benefit your customer from unforeseen upside you received in a business transaction. I’ll never forget a project we completed with one of our customers where our electrical contractor wrote us a check for $5,000 when the job cost less than they had estimated. This is unheard of in the construction industry. I made it a policy to do the same with our customers when we had windfall profits on their projects.
Eliminate Low Energy Employees
While it’s important to foster a win/win relationship with your employees, there will be some who don’t reciprocate. In the coaching world, we call these folks “uncoachable”. If you have legitimately tried to acknowledge and validate, pay win/win compensation, and used win/win negotiations to no avail; it may be time to fire an employee. A Level 1 leader will tolerate a bad employee believing there are no other employees available, so you need to accept mediocrity. A Level 2 leader will put an employee on performance improvement plans and eventually let the employee go even when the leader may be at fault in the relationship. A Level 3 leader will tolerate bad employees believing that not every employee will be ideal and so a few bad ones are okay. A Level 4 leader will spend an inordinate amount of energy avoiding firing any employee. They believe that firing an employee is pure evil. A Level 5 leader will try the tactics I’ve described; will make a plan to fill the position with another employee; and then let the failing employee go with a fair severance payment. Most Level 5 leaders will help their exiting employee find a job that is more suitable.
Avoid using labels as a Level 5 leader when you work with your employees or customers. Let’s say a salesperson works for you and is failing to achieve their sales quotas. If you label that individual as a “bad sales person” or a “failure”, you prevent them from achieving the success you desire. I understand that you will not use such labels to this person directly. However, I implore you to avoid using these labels behind their back. There is an underlying behavior that is contributing to your sales person underperforming. It could be your product, your price, words they use in cold calls, or a million other items.
Labels will also be used by your employees to describe themselves. They may say, “I’m not a salesperson.” Or “I’m just not cut out to sell.” While they may not be the best person for a sales position, it is helpful to uncover specific traits that may be causing the problem. Level 5 leaders will help their people uncover root causes of problems and help them turn problems into opportunities.
If you master some of these tactics, you can be leader instead of a manipulator. You will see your employees as people instead of cogs in your business wheel. When that happens, your employees will reciprocate by seeing you and your business as a worthwhile investment of their time and talent.
If you want to learn more about how you can be the leader you want to be, please send me an e-mail at firstname.lastname@example.org; or set up a 1-hour free discover session.
About me. I have been actively engaged in the energy efficiency, renewable energy, and energy conservation industry all my professional career from 1987 until now. I was a licensed Professional Engineering in six states and a Certified Energy Manager (CEM). I worked as a sales executive, energy engineer, sales manager, and entrepreneur. I started, grew, and sold my own Energy Service Company (ESCo) called Ennovate Corporation (1997 to 2013). I am now a certified professional business coach for business owners, engineers, and business development executives.