Michael D. Alter wants his people to make mistakes. In fact, he backs it up by giving out an award every year for the best new mistake made at his company.
“If you’re not making mistakes, you’re not going to be successful and you’re not going to move a business forward,” says the president of SurePayroll Inc., which employs 130 people.
Encouraging mistakes is a way of empowering employees, which Alter tries to do at the online payroll service.
Smart Business spoke with Alter about how to get the most out of your employees.
Q. What advice would you have on how to empower employees?
No. 1 is listen. If you are going to empower your employees, you have to listen to them. You’ve got to take some actions based on what they are saying. So, a lot of times we think that leadership means we always have to have the answer as a leader. I don’t think that’s true. I think we have to make sure the organization is being led in a direction, but you can look to others to help guide you and get insight into what that right direction is. So, I think that’s very important.
Second thing I think is important is motion is good in that if you avoid making decisions, avoid making the tough leadership calls, avoid driving the business in any direction, you either flounder and go nowhere or everybody starts making their own decisions and you fracture into different directions.
It’s a lot easier to turn an object when it is moving than when it is at a standstill. So when you think about the business, there are times when it’s better to make a decision even though you never have perfect information and you never know what the right answer is. Because, hopefully, you are smart enough to realize that you moved in the wrong direction or the right direction and to course correct. It’s a lot easier to make these course corrections when you are in motion than when you are not.
Q. How do you show people you are listening?
There’s different ways. When we listen to our customers, anyone who gives us a low score on our customer satisfaction score, we pick up the phone and we call every time, every customer. The lower the score, the higher-ranking person calls. We just want to hear what is going on. The fact that I’ll pick up the phone and call a customer … it shouldn’t stun them, but it does. You learn a lot, and it also, in a lot of ways, shows that we care and that we are listening.
With our employees, it’s a little different, but what we want to do is make sure we are hearing what they are saying and that we are communicating back what we heard. The things that we are implementing, we’re clearly explaining: ‘Here are the things we heard from you that we are implementing, and here are the things that we heard from you that we’re not implementing, and here’s why.’
The most important thing is if you choose not to do something, it’s OK as long as you can explain why because that shows at least that you listened.
Q. How do you handle a mistake from an employee?
You’ve got to say, did they take a calculated risk? Based on the information they made, was it a logical decision? If it was a logical decision based on the information that they had, you’ve got to reward them for it. Doesn’t mean you’ve got to give them a $100,000 bonus. But, you can’t make a scapegoat out of them. You’ve got to celebrate the fact that they tried. In baseball, if you bat .300, which means you get a hit three in 10 times, you get a couple million dollars a year, maybe $10 million a year. Business is not that different. It’s not every time you get up to bat you’re going to get a hit. Why do they call it ‘cold calling’ where you get 100 calls and you get one sale?
So, you’ve got to realize you’re going to have a success, and if you bat .300, it’s pretty good at your new ideas and your new things. So, you’ve got to really reinforce that it’s OK to try things and it’s OK to make mistakes.
Q. How has empowering employees to make mistakes benefited the company?
A direct way when you look at our referrals, so an existing customers says, ‘Use SurePayroll.’ We get about 20, 25 percent of our clients from existing customers who refer business. That’s the lowest cost acquisition channel I have. You could actually put that into real dollars and that is real benefit. Some of that comes from the fact that we are continuing to try new things and some of it comes from that fact that we are empowering our employees to do the right thing.
To give you some sort of specific examples of these kinds of moments of truth, some of the things we are doing to try something new, if you will, we have some new functionality in our product called the one-click payroll, allowing people to do payroll in one click. That came out of empowering our employees to say, ‘Hey, what are we hearing on the phones, what do people want, what do people need?
How to reach: SurePayroll Inc. (877) 954-7873 or www.surepayroll.com