In most companies, a gulf exists between the mindset of owners and employees. Bridging that divide can help small businesses succeed in the present while preparing for the future but its no simple task.
Evan Rubinson, founder of music industry conglomerate ERA Brands and several other companies, shared his advice for creating a cohesive mindset in a business, from outside investors to office workers.
The first step in creating a unified vision is to acknowledge the gap between what owners want and what employees want, Rubinson said. With skin in the game, owners like to think of the big picture. Employees, who dont share in profits and can leave at any moment, are much more short-sighted.
Said Rubinson: I think the most difficult aspect is getting the people that I work with, my team, my employees, to buy into a long-term mindset. The long game to me is king, but I think it’s most difficult to convince the people that I’m directly around and that work intimately with me, of this. I think they appreciate that mentality to an extent, but it’s about getting the people internally to really buy into the long-term and the greater good so that they don’t feel like they’re getting slighted, they’re getting walked on, or they’re not going to achieve their full potential within the company by playing the patient game.
Yearly Bonus Versus Long-Term Gains
For many employees, the most important year-over-year goal is to add another bullet point-worthy success to their résumé in the hopes it will ultimately lead to their dream job (or salary). From that vantage, its much easier to sell a line like brought in $500,000 in sales than built a relationship with a supplier that will pay dividends in the coming years.
To change that, business owners need to step back and take a page from basic psychology, Evan Rubinson said: People repeat behavior that gets rewarded.
A lot of employees feel the pressure of, If I want my bonus, if I want my accolade at the end of the year, I need to squeeze out the extra profit. I need to be the shining star for the company.
I always tell people, That’s not a bad mentality to have, but we don’t want that to overshadow our long-term perspective of building IP, building a brand name, building a relationship with our key downstream dealers, retailers, or consumers.
To help a company make inroads into new markets, invest in relationships, and lay the groundwork for future deals, owners must do two things, Rubinson said. First, they must communicate expectations. Second, they have to tie rewards to the more-nebulous goalposts.
Whenever we sit down to board meetings and we have a lot of executives or high-level people in the room, I always try to drill down into that point of, Look, this is our company vision and this is what we want to achieve in the next five years, the next 10 years, said Evan Rubinson. We, of course, have our two-to-three-year plans. And that’s more immediate, and I know for a lot of people, it’s easier to pay attention to that because that’s what feeds their families, that’s what gets them the accolades.
Changing the Mindset on Employee Rewards
For many business owners, that means changing their mindset about rewarding employees. If you stress building long-term relationships but keep bonuses tied to current-year sales, employees will let long-term goals languish and chase after available money. At the same time, sacrificing current sales can lead the company into troubled waters quickly, Rubinson said. The best solution is to tie employees incentives to the most meaningful and impactful aspects of a company, which span the spectrum from short to long-term objectives.
He explained, Trying to incentivize employees with remuneration, bonuses, et cetera, that feed into that long-term agenda is kind of balancing on a tightrope, balancing the long term and the short term and the objectives on both of those ends. I really try to mesh them and blend them together so that we’re not short on the short term and we’re not short on the long term.