“What “The Boss” stresses the employees accomplish, make it the right message!

When I first begin working with a company I sit in on the manager’s meeting and just listen.  What I often find is that the staff is focused on what The Boss stresses as important. They instruct their direct reports to accomplish the goals set forth by The Boss in these department meetings.  The problem I sometimes see is that The Boss is sending the wrong message or a partial message.

For example, in one meeting during a review of the prior months’ financials, each department head reported out to The Boss what their actual revenues were compared to the annual budgeted numbers.  Then The Boss asked what the budgeted revenue goals were for the next month and how each department manager was going to achieve those revenue goals. Afterward, The Boss was expressing frustration to me in the lack of gross profit from each department as it pertains to the annual budget goal.  During our discussion, I asked if the departments were hitting their revenue goals and The Boss said “Yes, as a matter of fact, the total revenue for the company was ahead of last year and ahead of budget”. I said I was not surprised as that is what I would have expected.

The Boss asked me to explain and I pointed out the department heads were focusing on achieving their department’s revenues goals and that is what they stressed to their staff.  The reason they were focused on revenues is because that was the message The Boss was constantly stressing. I suggested The Boss also stress gross profit goals along with revenue goals in the next department meeting.  The next meeting The Boss asked about the actual revenues and gross profits compared to the budgeted revenues and gross profit, as you can imagine the department heads were not prepared to discuss the gross profits of their departments.  It did not take long before the department heads were required to report on both actual revenues and gross profits compared to the budgeted revenues and gross profit goals at their manager’s meetings.

As the department heads stressed revenues and gross profits, their staff began to find ways to save small incremental dollars, soon the company began to show measurable gains on profitability without raising prices.  The worst thing The Boss could have done was to discipline or replace a department manager due to underachieving their gross profit goals when they were achieving, what The Boss was stressing, their top line revenue goals.  Employees do not get up in the morning and come to work to “screw-up”. They want to do their best for the company and when The Boss sets the proper goals, often the employees will work very hard to accomplish those goals. If the financial results are below expectation, look first at the message.  Send the right message to your team and they will do their best to respond with the desired results.