Small businesses provide much of the initial employee experience. We take younger folks and teach them decent work habits like showing up every day, being on time, and working to deadlines.
As owners, our personal skills may not be sufficient. We can’t teach everything necessary to run a growing company. We turn to the outside for experienced employees, people who can bring what they learned elsewhere to our team.
In many cases, we are looking for someone who has performed at the next level, handling more people, more responsibility or higher level functions. Instead of helping someone grow into a job, we want someone who can help the company grow into what they can already do.
Often, those people come from much larger organizations. They may have run a department that was bigger than your whole company. We know that big corporations have a very different culture than small businesses. How can you determine whether a prospective key hire is going to be a fit for your business?
First, there is attitude. I’ve found many veterans of big business are condescending towards “little brother” businesses. They believe that their knowledge should be welcomed with unconditional acceptance, and that the way they learned to do it in BigCorp is the only way to do it.
Be careful of attitudes that indicate the prospect believes that having fewer subordinates or a smaller budget means less work. I’ve had candidates tell me that they wanted to move into small business because they wouldn’t have to work so hard. (!)
Resources drive the managerial employee experience in large organizations. You may not be able to throw personnel, marketing dollars or technology at a problem. Check for resource dependence by asking how the prospective hire would tackle a problem, then remove some of the resources and ask for another approach. They aren’t cut out for small business if they get that “deer in the headlights” look.
The biggest issue in qualifying employee experience from a larger organization is personal responsibility. In BigCorp missing budget means you don’t get a bonus, not that everyone doesn’t get a paycheck. Ask about times he or she failed to reach a goal, and the consequences.
In large organizations you can hide in a crowd for a long time. Be wary of resumes that concentrate on credit for group activities. Carefully review claims from a member of an “award-winning team,” “record setting department,” or “nationally recognized initiative.” Such people may be superstars, or they might just be very skilled at standing next to superstars. Examine their personal contributions in detail.
A key employee who brings solid experience to your organization can be a huge boost towards the next level; but if he or she can’t walk the talk, it’s just an expensive drag on your whole company. Don’t get caught up in the halo effect of ‘Bigger is Better.”
Did you read something in Awake at 2 o’clock that would be relevant for a colleague? Please share it with other business owners.
First, there is the question of who is covered by the agreement. Most allow for advisors to each party to see the agreement. That can encompass accountants, attorneys, consultants, bankers and employees. I think employees present the greatest risk, since they are the most likely to personally benefit from information about customers, vendors and pricing.
I’ve seen the same question asked in a number of business assessments over the years, and it always struck me as silly. It’s one of those “gotcha” questions that any rational business owner can only answer in the negative. Who in their right mind could claim that he or she is doing everything possible to maximize profits?
Exit planning is the process of developing a business owner’s strategy for what may be the biggest financial transaction of his or her life…the transfer of the business. That strategy may be a succession to the next generation of family. It could be a sale to employees. It may be a sale to another entrepreneur, or acquisition by a larger company. In some cases, it could require an orderly dissolution.
Property and casualty coverage falls into this category. You insure against damage or loss of equipment or the liability of an injury in the workplace. Workers’ Compensation is in the latter category, but you also need to think about visitors or customers in your business.
In some areas an NDA requirement preventing hiring any your employees have been found not legal because of is effect on freedom to find new employment for the employee. EG where there are limited opportunities for certain skill sets in the geographic area.
Good point Jim. That is why an attorney familiar with your jurisdiction is a must.
In many areas, employees’ response to an open advertised employment solicitation is normally not covered by the NDA’s restrictive provisions….while direct contact is. From a client perspective, it is important to note the difference and that the risk exists, but is essentially the same as it is in “normal” times.
Good point Richard. Actually most large companies won’t agree to a non-employment clause for just that reason. They don’t want liability (or screening responsibility) for normal recruiting activities. With smaller acquirers, JV and merger discussions, I have seen it included (subject to state unemployment law, as was previously noted.)
One of the biggest mistakes too many searchers/buyers make entering the buy/sell playing field is not getting their own NDA signed by brokers, owners and sellers of companies. (Not to mention some of the horrible NDAs foisted on searchers.)
• What about protecting the fact that you want to buy a business . . . and you don’t want your employer to know about it?
• How about the content of your financial statement and borrowing power?
This is why the advisory teams of savvy buyers and sellers include experts with a proven record of facilitating win-win deals that should occur.
• I, for example, won’t collaborate with buyers unless they hire the right kind of attorney and tax advisor at the right time and then properly engage those specialists. It’s good for all of us.
BTW, it’s 2 a.m. right now at home in Florida and I’m awake reading John Dini’s excellent website (awakeat2oclock.com) while awaiting a call from someone I’m helping in the UK.
• “Awake at 2 o’clock” . . . I wish I had thought of that title!!!!