Employees and Individual Heroics

January 03, 2017

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Great employees are a wonderful asset, but their individual heroics may not be healthy for your company.

Sooner or later you will move on from your business. When you begin planning for your transition, what will your company systems sound like when described to a critical buyer?

"Yes, we have a process for that. It hasn't been updated in a long while, but Martha knows it like the back of her hand."

"We really don't have anyone cross-trained on that machine. Bucky likes to work alone, but it's okay because he hasn't taken a vacation in three years."

"We always use Andy on that route. There are lots of traffic snarls, and he seems to be the only one who can deliver on schedule."

We all seek workers who require little supervision and can make intelligent decisions. When an employee is especially productive or reliable, it's easy to become dependent on his or her individual heroics. It's one fewer function of the business that you have to keep track of.

You know that dependency on a key person could be a problem at some point, but it isn’t an issue today. Why fiddle with what's working? For one important reason: because individual heroics may discount the value of your business.

It is ironic that the very behaviors that make your life easier can appear as threats in the eyes of a prospective buyer. A buyer worries that key workers might not like his or her management style. As a new owner, he might be immediately approached for pay increases. Worst of all, if one of your heroes' performance heads south, the new owner may not be able to fix it, or even know that it is happening.

Just for a moment, look at your best employees as threats. Do you have a contingency plan for each? Can Martha's process be documented so anyone can do it? Is Bucky just a loner, or is he trying to make himself irreplaceable? Can Andy's mental map be duplicated by routing software?

And in case you didn't realize it, "I can do any of those jobs myself” is the worst of all possible answers. Those kind of individual heroics will send the buyer towards the exit instead of you. The more you work in your business, the less it is worth to a potential buyer.

Some people spend more time on the depth chart for their fantasy football team than for their company. Take some time to list each key position, the incumbent person in that role, and who would assume it in the event of a problem.

What are the skills of the backup? Is he or she fully trained? Somewhat familiar with the job? Or is this just someone you hope would catch on quickly? Even more important, is the backup someone who is already critical in another position?

A company’s value to a buyer lies in the strength of its systems. You should be able to demonstrate that your business is capable of sustained profitability even with the loss of key personnel. If you can't, start looking at them as liabilities rather than assets.

Topics: Business Operations, Strategic Planning

John F. Dini

John F. Dini is a consultant and coach to hundreds of business owners, CEOs and Presidents of companies with over 11,000 hours of delivering face-to-face, personal advice to entrepreneurs. He is the author of three business books including Beating the Boomer Bust and 11 Things You Absolutely Need to Know About Selling Your Business, now in its second edition. He is a serial entrepreneur, but prefers the term “chronically unemployable.” John holds a BS in accounting from Rutgers University, and an MBA from Pepperdine University, and has six additional certifications in exit planning, business brokerage, behavioral analysis, medical practice management, facilitation and coaching. John writes numerous articles on small business topics for newspapers, magazines, and in his own blog at www.awakeat2oclock.com. He speaks frequently to business groups and national associations, and is a 15-year member of Jim Blasingame’s “Braintrust,” appearing regularly on “The Small Business Advocate,” a nationally syndicated radio program, as an expert in the issues of business ownership. His latest book, Hunting in a Farmer’s World: Celebrating the Mind of an Entrepreneur, has won recognition including “Best Business Book” at the New York Book Festival and the National Silver Medal for business books from the Independent Publishers’ Association.
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