Employees Need Some Perspective
Would you like to have your employees walk a few miles in your
shoes? Looking for a simple way to explain the flow of the
revenue and expenses for your business? Want to change the
perspective on the gap between wages and amounts charged to
customers? Adapt this exercise to your small business situation.
George's Auto Service
Every person entering the management ranks of a large
communications company were required to attend a management
orientation workshop.
During one workshop the facilitator handed out a little case
study and displayed the statement of income and expenses for
"George's Auto Service" on the wall. He gave a brief explanation
of the expense items for those who had not taken a course in
accounting. The case outlined information on the shop's
operations and the local conditions.
The attendees were split into small groups to consider such
questions as, "Does George have a viable business operation?"
and, "How could George better manage his business?"
After the situation was reviewed from several different
perspectives and a dozen options were explored, the group
members were almost unanimous in concluding that George's Auto
Service was not generating enough profit to justify his
investment of money, time and energy. Their recommendation to
close the business was considered more prudent than any of their
other recommended changes.
Typical comments were, "George should stop beating his head
against the wall because he's not making enough money for all
his troubles." and "He should try a more profitable business."
The facilitator pressed the groups to examine the various
expense items for specific reductions that would allow George's
Auto Service to make more profit.
Many cost cutting schemes were suggested. The most common
solution was that George should ask his mechanic to accept less
pay. The facilitator obtained a consensus that a reduction of
wages was a prime solution. Then, with a little smile he said,
"Let's see how this would work."
The members of the group appeared puzzled as he began adding
three zeros to each item on the display of the Income and
Expense Statement. With the flair of a magician he finished by
replacing "George's Auto Service" with the name of their own
company.
"There," exclaimed the smiling facilitator, "is the Income and
Expense Statement for our very own company. The same company you
suggested isn't worth operating because it isn't making enough
profit. The same company each of you are planning to help
manage" Then, with a larger grin he asked, "Do you still want to
ask the employees to take a cut in pay?"
The initial shock was followed by much laughter. Some members
praised the facilitator for the clever way he had tricked them.
Others laughed about how three little zeros can make such a big
change in one's perspective. Laughter continued as one group
member seemed to express everyone's newfound insight with, "I
didn't realize wages and salaries are only one of many essential
operating expenses." The group's joker got a burst of laughter
and a few groans by quipping, "Yeah! Three little nothings
suddenly became three big somethings!"
One member asked the facilitator how many company employees have
been exposed to this little case study. The facilitator said,
"Only management groups. It's up to you managers to monitor and
to influence perspectives about the expenses, other than wages,
that are required to keep our company operating. By the way, I'd
appreciate it if you would not disclose this exercise to others
assigned to take this workshop."
Try this little exercise for your small business operation
Persons unfamiliar with ownership and management are unaware of
all the factors required to operate a business. Even workers
familiar with an income and expense statements often perceive
the payment for their services to be inadequate and unfair.
Properly presented, such a case could foster a healthy
discussion of common objectives and contributions. If not a
lively discussion, perhaps the exercise could result in a
greater appreciation of your management decisions and your
distribution of your operation's revenues.
If there is an indication your employees do, indeed, perceive
you are getting rich from their hard work, proceed cautiously
with your timing and presentation. You could be worsening a very
sensitive situation.
The facilitator in our story used humor to alleviate any
embarrassment caused by the trickery for the surprising
disclosure. If you are not skillful with humor, get someone who
is or use another defusing tactic.
Allow the lessons learned from the exercise speak for themselves
and avoid excessively dwelling on them too much. Let the
participant draw their own conclusions.