When Do You Need HR?

Managing your HR is not a once a year, here’s your raise, here’s where you can improve event.  Managing your HR is a form of leadership and it takes place every day.

There is a formalized portion of managing the relationship with your people that means sitting down more formally a few times annually to give them feedback AND to get feedback.  To possibly review their compensation and also to give them an outline of how the business is doing.   It is a formalized sharing of information.

Most people perceive HR as forms, formal reviews and conflict resolution with some third party (internal or external).   So many of these processes are things that should be handled by managers and leaders within a company.  When a conflict escalates to needing someone outside the business to manage it – it is a breakdown of leadership.

Great leadership is about managing the most valuable resources your organization has, your people.  Managing your people means taking time to manage the relationships with them daily.

Great HR is talking to your people regularly.  This is true of a corporate CEO and also a department manager.  It is about putting your people first and ensuring your ego is out of the way so you can best serve them.

3 tools I love to use for good HR:

1)   30 minute coffees – sit down with each of your team and just talk – not about the business but about them.  What’s on their mind, what are they liking, what’s new, what’s frustrating, what’s new in their life.

2)   Annual roundtables with an outside person – having an HR professional host a round table with the team to get their honest opinions, ideas and questions.  Things get said that won’t always get said directly to an owner or manager.

3)   Random recognition – randomly recognizing the great work of team doesn’t require a formal presentation or review.  At the Monday morning meeting it should be a “play of the week”, a “customer support of the day” or some small recognition of your team’s efforts.

When people know they are valued and that HR is being well managed, they perform to their best ability.  That’s good business.

Financial Metrics - Cash versus Statements - Where to Look

In dealing with business owners and entrepreneurs, we are often asking questions about the financial health of a business.  This is also true when we deal with departments in a larger corporation.  Knowing the financial state and status of your business or department is truly critical.  

It is scary to see how infrequently some business people are monitoring their financial metrics and also understandable.  Most people that start out in business get annual statements from the accountant or perhaps quarterly.  Managers get a quarterly summary or see published quarterly numbers.  People get conditioned to waiting long periods before knowing how they are performing.

It is critical that finances and cash are monitored weekly and even daily and this doesn't mean waiting for the accountant.  Financials serve their purpose and update you on the health and condition of a business.  Unfortunately, changes in a balance sheet are often slow to demonstrate trends and a business owner need to know where things are constantly.  Cash is King in business.  Knowing your cash situation is the timely and critical means for managing business tightly.

We work with clients to ensure they are running at least a weekly financial/cash performance summary.  This includes, sales, accounts receivable (current and also immediately expected), accounts payable (current and also must pays), then current cash positions.   We can see cash shortfalls and manage our clients and suppliers.   We have seen people grow a $15 million dollar company on cash management without being able to read a financial statement ... this isn't ideal but does show the value of cash metrics before statement reviews.

Establish your weekly Key Performance Indicators (KPI's) for team performance and responsibilities AND then set the weekly cash flow KPI's next.  It is the key to growing a performing, profitable, company and team.