Don’t Chase

My name is Gary Shotton and I’m glad to be a part of “Inspiring Better Business”, and I hope that these are helpful lessons that will help you in the process of owning and operating your business. Today I’m going a talk about the subject , Don’t Chase”. What do I mean by, ” Don’t Chase”, well this lesson is a little more for a person that has employees, and has at least one or two employees. It’s regarding the employment or the human relations or the ability to retain employees that are very vital to your success. You see if you have a lifestyle business or you have a business that is a necessity just to get along, and you are everything, you mop the floor, you cook the food, and you serve it, I mean whatever it is your everything. Well, that is pretty much a lifestyle business because you can raise to the level of lifestyle, which that occupation will afford you, But, you’ve got to pretty well go to work everyday in order to make that money will come in, What I’m talking about is when you get to the point that you’re hiring those first two or three or four or five people and you’re moving in to systems and procedures. You’re really a critical part of this but you now have a few critical people in your business They are what you would be considered very important to you and if you lost them you’re going to be tempted to chase after them and to try to convince them not to leave you. Boy, the more you’re locked in to someone that’s important to you the more temptation that is going to be I am going to suggest that you don’t chase them. You know, I have 60 employees and this has happened in this business and I will give you another example of a previous business and so I’ve lived this. Recently our economy has turned down a little bit and we’re not offering as much overtime and this means our workers are not getting quite as much pay because they’re not working as long as they were with extra time and a half for overtime, And you know, we got wind that some of our employees are looking around to maybe change and move away and go to another company not our customers but another company. Oh, some of them I don’t want to lose them, but you know I have to stop for a moment and say, Number one, have I been paying a fair wage have I been paying a good benefits have I been giving them more than what would be expected for the pay that I’m paying them and if I answer that correctly and I say “yes I have” then you’ve got a avoid that temptation now to start a process of chasing after that person and in a way kind of begging them not to leave by now raising their pay. You are going to create a scenario that you’re going to become known for that and the others are going to now, rather than having a regular schedule or some communications on when a review and a legitimate review for pay could be done, you’re gonna have others saying,”well, the only way I’m going to get a raise is if I go in there and threaten that I’m going to leave and I’m going to find out whether or not they really want me or not.” Oh, that’s not a good situation and some people have done this, some of your workers have done this. Now, we have a great lineup of workers and this is not a common problem but I’ve seen it happen. and you’ve got to be able to to hold your ground and basically say, “based on my evaluation we are paying a fair wage on the high end of a fair wage for what we’re asking our workers to work and if that’s the case then you’ve got to be able to evaluate each person and have a system to evaluate and as they improve their skills. In our case we have what we call junior machinists that are just getting started and we have the most senior machinist that we have had 25 years experience. No, they don’t make the same pay based on their experience and based on their ability to produce parts and more difficult parts And so, you’re going to have to have a way of making sure that we do what we call incremental skill increase of skills means an increase of pay so that’s okay to determine that. And so, what happened recently is we had that happen and we just said you know we’re paying a fair amount and one person as I understand it and maybe not totally done at this point but this person know he’s going to stay with us and after he’s made that decision is a good time then to say you know we have an evaluation and here’s a small pay increase in other words we didn’t chase them but we did analyze the situation and maybe we could give them a little more money for their pay see if you get in the habit of that then you’re going to be known for that and people are going to be expecting you to chase after them some workers will are not sure where they stand and they’ll start a little rumor they’ll start just try to analyze am i that important to this company not all of Naughton none of we have employees that have been with us 30 years some that’s been with us 20 or some others win it with us 12 to 15 years they don’t play that game but every once in a while we’ll have somebody new in and they’ll say well let me just check it and that rumor will go around and let’s see if they’ll chase me well that’s not going to work not at our business now the same things kind of true when you’re dealing with a particular customer you know we work for customers where we have to maintain a certain income in order to pay our bills and we don’t like to work for a customer that’s going to kind of give the hint that they’re going to go to another company instead of us and in unless we lower the price well we can’t just lower the price arbitrarily if the price is right we need to hold with that we had that happen on a part as a family of parts and our customer came to us and said you know we’re going to send this whole family of parts and believe it or not it was three-quarters of a million of dollars per year 750 thousand dollars worth of business was threatened to go to Mexico and if we didn’t lower our price significantly well we looked at the city and we discussed the possibility of lowering the price it included bringing in what we thought would be sub quality materials from a foreign source and we weren’t sure that we could maintain the quality and this was enough business that I did lower was willing to lower my price a little bit but not nearly chase what they needed and guess what happened all of that business went to another customer company in Mexico and it was 15 months later that they came back begging us to take those back because it didn’t the deal wasn’t as good on that on the other side of the ground the deal wasn’t that good that when they analyzed everything they came back and we’ve been doing that same part and guess what I never lowered the price of a dime and so this is going to take a maturity level on whether or not you’re you’re dealing with your customers are with or with your employees that you can’t get in a habit of chasing after them almost begging them to stay with you one way or another because it puts you out of control do your do your homework know where you’re at make sure you’re being fair with everyone and then I would say hold your ground I hope this is helpful this is to those that are a little farther down the line in business thank you