Losing a Million – Dollar Project
“We lost a project worth a million dollars just because we did not have the right team in place,” rued the CEO of a 280-employee IT services company.” I had just then finished debriefing him and his team on the existing maturity of their people practices. One specific highlight was on their “offer-to-joined” ratio. We were analyzing the reasons as to why so many offers were rolled out but only a few accepted and to aggravate matters, even a smaller percentage of them actually joined!
Three key findings stood-out post this analysis.
The prospective employees wanted –
- To join an established brand in the IT services industry
[My client was an emerging IT Services player]
- Better compensation & benefits
- Better designation
[Designation mattered especially in the entry level & middle-level management. It was seen as a status symbol and mattered for prospective grooms/ brides especially at the entry level].
We then proceeded to evaluate the total time & effort put in by various teams right from Recruitment, Team Leads, Project Managers, the Human Resources Manager to Vice Presidents and in some cases the CEO as well. The time cost per annum towards recruitment alone amounted to about 10% of the total revenues of the company at that point in time. This lost productivity simply meant money down the drain because the positions were still open. It proved a double whammy – lost productivity & their inability to capitalize on new business opportunities. My simple question to the CEO & his team – Could not we use these insights to be proactive and create solutions for the above challenges?
Solutions like –
- Create a unique value proposition for potential employees
[Start-up culture means an entrepreneurial environment, Opportunities to work on strategic projects, faster growth hence better compensation, and frequent interactions with senior management would mean exposure to strategic initiatives and better learning opportunities].
- Better Compensation & Benefits can be addressed by better incentives for completion of projects on time [nothing to do with the size or brand of the company; it only has to do with the team’s intelligence and its ability]. ESOPs or profit sharing [more the norm in start-ups and emerging companies, more responsibilities meant faster growth and, therefore, better compensation, etc.]
- Could they be creative with designations without undervaluing the role these prospective
employees are playing vis-a-vis the project requirements and industry norms? The team said they can certainly try…especially if they continue to face flack should they fail to capitalize on business opportunities for want of the right
Fortunately, the team promised to work in this direction.
Let’s consider a few questions –
- What are the current business opportunities you are pursuing?
- How much business have you actually lost because of insufficient or ineffective team members?
- Are you willing to risk future growth if you continue in the same vein?
- Do you have the right team now to prepare for success?
- What is the criterion to select and ensure that the right people are on the bus?
[As Jim Collins describes in his monumental work “Good to Great”]
- What is the current maturity of your people process/ practices?
- Are your people process/ practices effective? How do you know it is effective?
- What are some of the ratios/ metrics you are tracking?
- How often do you track these ratios?
- Post analysis, are you improvising on your existing processes to take your organization to the next level?
If you do not have answers to the above questions, it could prove to be a triple whammy rather than just a double whammy. It means you will not just lose productivity and business but also risk losing the team that you currently have.
Don’t believe me?
Well… Here’s the threat faced by a CEO of another client from his HR Manager “I will put down my papers rather than promise to get you a project manager in flat two weeks!” To capitalize on a new business opportunity, this CEO wanted to ensure that a new project manager joins them within two weeks. What I responded to him is a subject matter for another post; however, I would be curious to know what your response would be. Do share your views and perspectives.
Look forward to hearing from you.
CEO Coach & Business Growth Expert
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