In an earlier post, we discussed why it is important for every business owner to build a team and we dealt with some mental blocks that hold people back in this regard. Another major aspect of team building is setting up a remuneration scheme or reward system. For most people, what comes to mind when they think about this is salary. And there’s a popular saying that if you pay peanuts, you hire monkeys. Many small business owners therefore think that they cannot get the right kind of team members until their business can afford to pay fat salaries. But salary is only one way to reward; there are several other ways.
First of all, let’s take a look at some important steps that must be taken ever before deciding on remuneration.
Identify key activities
It is important to note that the first step in building a team is not money or remuneration. The first step is determining what you really need. You must know the key activities that are important to keep your business running while ensuring compliance with relevant regulations and standards.
What are the tasks that will enable you to consistently deliver the goods and scale your business with peace of mind? Identify them and put them in a list. Depending on your kind of business, you may need some a few days to come up with this list.
I advise that you start by taking each of your products/services and identify the steps needed to deliver them. Then look at your business as a whole and identify the key activities needed to ensure smooth operations. The next step is to group these activities into related categories.
For example, your list will likely include items like sending invoices, tracking sales and expenses, issuing receipts, preparing account statements and filing tax returns. All of these activities can be grouped under bookkeeping and accounting. So you create that category and put the activities under it.
Throughout this process, always have a note handy. This is because the ideas usually won’t surface at once. You need to be ready to note them as soon as they come. Otherwise you may forget and this will create gaps in your process. Whenever you remember something that is not yet on the list, whip out your note and add it.
I use the Evernote app for this purpose because it’s easy to access it on my phone via a mobile app, on my computer via a desktop app and on practically any device via a web app. The app also makes it easy to sort, organise and retrieve ideas with practical features like notes, notebooks, tags and search. However if you’re more comfortable with the good old pen and paper system, that’s fine too.
Determine core competencies
Now that you have identified the tasks and activities that are important to your business, it’s time to determine the skills and competencies needed to get them done. At this point, don’t think in terms of professions or job titles, think in terms of what you need to get done.
For example, the fact that you need to do bookkeeping and accounting does not necessarily mean you need to hire an accountant. You may use an accounting tool or software to handle a significant part of this business function by yourself or have it done by an administrative assistant.
You can then review with an accountant periodically who you pay per session or on a retainer basis. By taking this route, you get what you need without having to spend as much. As you implement this kind of thinking in your business, you will be able to build a structure that reflects global best practices, complies with local regulations and maintains the standards that you have set for yourself.
Just as you grouped activities into categories that helped you see the core competencies that you need in your business, you will now group related competences and assign them to a role. Please note that at this point, you’re not thinking of any particular person. You’re simply creating a role which will be filled by the most suitable person.
In some cases one of the competencies and activity categories that you have earlier determined will be enough to fill a role. In other cases, you will need to bring related competencies and activity categories under one role. The important consideration here is to organise your work in such a way as to maximise your resources and ensure that every team member is productively engaged.
Create an organogram and spell out responsibilities
As your business continues to grow, the interaction between roles and interdependence of competencies on one another will become more obvious. Much in the same way that every living thing has several systems working together, with each system having its organs, so is it with an organisation.
An organogram helps you to clarify this relationship. It’s a chart that shows you at a glance who is responsible for what. By creating an organogram and spelling out the responsibilities of each role, you will make the process of team coordination easier.
Everyone knows what to do and what is expected of them. On your own part, you can clearly see the skills/competencies that you need. This guides you to recruit, engage or enlist the right people on your team and replace them when necessary. It’s like creating a framework into which you can then fix the required resources.
Now that you have identified the key activities in your business and determined the core competencies required to get them done, let’s discuss how to find the people who will fill the corresponding roles.
Internship and apprenticeship
One of the most affordable ways to start building a team is to engage interns and apprentices. An intern is a student who works (usually without pay) to gain experience. Apprenticeship is like an informal form of internship. An apprentice is someone who works for an expert in order to learn a trade.
The economics is simple — get people that need what you have and have what you need. You provide beginners with the expertise, experience, wisdom and networks that they need to start their careers or launch their own ventures. They in turn provide the manpower that you need to grow your business.
Most of the time, interns and apprentices don’t expect to get paid in the way that a regular employee would. But you should consider creating avenues to help them make money in addition to gaining experience. For example, you can pay them a commission on every deal closed. At the very least, you should cover the costs incurred in executing assigned tasks.
One approach to this is to seek referrals and recommendations from trusted and perhaps more experienced professionals in your line of business. Alternatively, you can go through the normal process of posting or broadcasting a vacancy. You then sift through the applications to shortlist the people that most closely align with the parameters you have set. Thereafter you interview the shortlisted candidates or present a job related challenge to help you identify the most suitable person(s) for the role, considering each person’s competence and personality.
Unlike an intern or apprentice, employees have some relevant experience and expect to earn a salary. More importantly, they expect job satisfaction. So it is important to set clear expectations with key performance indicators on both sides. There should be rewards for meeting expectations and consequences for falling short.
The terms should be considerate and the working conditions humane. However, this does not remove the need for a performance management process with clearly defined indicators. This is important to ensure that you get value for your investment in your employees while they also get value for their contribution.
From time to time you will need professional services that you may not want to have on your payroll because your business is not big enough to justify such decision and conveniently bear the attendant cost. This is where contractors and consultants come in.
For example, you may need an accountant to review your books from time to time or a lawyer to go through contracts, offer legal advice and provide other necessary interventions from time to time.
In such situations, consider initiating a relationship with a small firm or an independent consultant that has the required competencies. You can work out an agreement to have you pay per service or they can charge you a retainer to cover an agreed range of services for a specified period.
You can maintain a pool of freelance operatives to handle relevant aspects of your business activities. For example, activities like graphics design, social media marketing and website updates can be handled by freelancers. You may build your freelance team by handpicking from your networks or by using online platforms like Fiverr, Upwork, People Per Hour and Freelancer.
When working with freelancers it is important to check out their portfolio so you can assess the quality of their work. Equally important is the feedback they have received from past clients. You can easily do this on the online freelance platforms by checking reviews and testimonials.
Partnership is another level of team building. This involves sharing ownership of your business with one or more persons who can make significant contributions towards achieving your business goals.
Affiliates and Sales Representatives
One of the increasingly popular ways to reach new markets and increase patronage is to recruit affiliates and sales representatives. Affiliates are usually experts or trusted persons who recommend and promote your products/services within their spheres of influence. You provide them with basic marketing materials and all the information they need to market your business. They take responsibility for everything else. When there referral earns you a sale, you pay them a commission.
Sales representatives are similar to affiliates in that they both perform marketing functions. But the specific details of their roles are quite different. Unlike the affiliates, sales representatives are more involved with your business. They straddle the line between employees and freelancers. Apart from providing them with marketing materials, your business pays them a stipend to cover basic costs.
The foregoing categories of team composition are simply ideas to get you thinking. You don’t have to adopt them directly; you can adapt or mix and match in a way that best suits your business depending on the stage of growth.
It’s important to note that setting up a team is only the beginning. The more demanding work is maintaining the team in such a way as to ensure productivity and peak performance while providing value for everyone. This is why you must implement a performance management system.
Encourage open communication and regular feedback (for example, through weekly reports and monthly performance reviews), implement changes as appropriate, provide just and equitable remuneration/reward for good work and invest in trainings to promote continuous improvement. Constantly explore avenues to keep your team motivated.