Empower Your Employees to Make Smart Decisions
By Anne Houlihan
Most company leaders say they want an organization filled with great decision makers; however, the reality is that the majority of employees are not empowered to make decisions. This is true for furniture retailers and a the broader home furnishings industry as well. Instead, the company policy and/or culture make decision making a multi-layer process that requires forms, documentation, and numerous signatures. As a result, few decisions get made, and those decisions that do get made are typically slow to transpire.
Realize, though, that when you empower your employees to make decisions on the spot, not only do decisions get made quicker, but you also improve overall organizational productivity and customer satisfaction. That, in turn, leads to a more positive work environment and increased revenue.
So why aren’t more employees empowered to make decisions? Often, the company executives don’t trust lower level employees to make decisions. Other times managers are afraid to empower employees to make decisions. They think, “What if the employee makes a wrong decision? What will that do to our bottom line?” Or, even worse, “What if the employee makes a really good decision? What will happen to my job then?”
In reality, once you trust employees, empower them, and train them to be in alignment with the company’s values and mission, they rarely make a wrong decision. Additionally, when employees are empowered to make decisions, managers can then focus on long-term goals and strategic planning rather than day-to-day operations.
Use the following guidelines to foster a culture of empowerment in your organization.
1. Establish decision making parameters for various levels of employees.
Even though you want a company of empowered decision makers, not all employees should have equal authority for every single decision. For example, you may establish that front line employees can make a decision up to a certain dollar amount, say $500, and any decision that would exceed that amount needs to go to a manager. Then the manager may have authority to make a decision up to $2,000, and anything more than that needs to go to an executive team member. Such a structure empowers people, because they know their boundaries and what guidelines to follow when the decision is too big for them to handle. Now there’s no guessing or confusion about whether they are allowed to make a certain decision. When people know what they can and cannot do, they feel freer in their decision making capabilities.
2. Conduct weekly training sessions with your employees.
Your employees can’t be empowered if they’re not properly trained on all aspects of the business. Therefore, have weekly training sessions with front line employees and managers to allow for role playing and discussion. During these sessions review such things as the company’s goals, mission, vision, and culture. Role play possible decision making scenarios so employees get a sense of what may transpire and how their decisions impact the company. Be sure not to berate or embarrass anyone for making a bad decision during these role play exercises. Remember, this is a time for learning. Also realize that just because the decision the employee made isn’t the one you would make doesn’t make the decision wrong. Often, more than one solution exists for a problem.
3. Teach your employees the lifetime value of a customer.
A big part of the training involves educating your employees on the lifetime value of a customer. That is, explain to them that part of their decision making process should involve looking at how much business that customer has given or could give the company in the future. For example, if a customer is unhappy because something didn’t ship on time, and the employee learns that it will cost the company $100 to overnight the product to the customer, the employee needs to determine if that $100 shipping fee is warranted. If it’s a big customer who gives the company thousands of dollars of business each year, then the $100 shipping fee is definitely warranted to keep the customer happy. For other scenarios, the $100 shipping fee may not be warranted, especially if you know this is a one-time sale of an inexpensive item. The key is for employees to give this factor thought as they decide what to do.
4. Acknowledge the special skills and talents your employees possess.
Everyone has special skills and talents that they bring to the table. Know what those are for each member of your team. For example, one company wanted to do a mailer to customers, so they assembled their employees together to brainstorm ideas. As they talked, they learned that their customer service manager liked to draw. They let him run with an idea he had and sketch out a flyer. The company agreed that his flyer was creative, and they sent it out to their customers. Turns out it was one of the best mailers the company ever did, bringing in lots of new business. The point is that when you allow your employees to use their strengths and creativity, they will often amaze you. The key is uncovering what those strengths are. Therefore, make it a point to meet with employees as people, and not as employees, from time to time. Use those informal get-togethers as a time to find out more about them. By doing so, you’re empowering your people to take an interest in the company and feel more confident with their decisions. And confidence is essential to making good decisions.
5. Consistently express appreciation and give rewards to people.
The greatest human desire is the need to feel appreciated. When people feel truly appreciated, they are eager to take on responsibilities and they want the company to succeed. Therefore, make it a habit to thank people, even for small milestones. The thank you could be a simple handwritten note or a big party for a job well done. Also, recognize special events, such as birthdays and anniversaries, and give rewards when appropriate. Some companies give monthly or quarterly bonuses based on company performance, while others give time off or tangible gifts. Find out what types of appreciation and rewards will motivate your staff, and dole them out freely. This shows employees that you value them, which will make them eager to go the extra mile and make smart decision.
Decide on a More Profitable Future
The more decisions your employees make, the more productive everyone will be. As the leader, you’ll have more time to work on the business rather than in it, and your managers will be able to focus on their long-term initiatives rather than the day-to-day minutia. Additionally, empowered employees demonstrate a stronger work ethic, and they hold themselves accountable. They treat the company as if it were their own, and they make smart decisions that advance the company’s goals and mission. But perhaps the biggest benefit of having empowered employees is the loyalty they’ll show the company. When they feel respected and valued, they’ll be eager team members, dedicated to making a positive difference on the company’s bottom line.
ABOUT THE AUTHOR
Anne Houlihan is President of Satori Seal, where she tripled revenues in one year and increased profits 140% with her innovative budgeting and leadership techniques. Despite her husband’s death, Anne managed to grow their business into an international company. As founder of Golden Key Leadership, Anne combines more than 25 years of hands-on corporate experience and coaching to help companies improve management techniques, empower employees to be decision-makers, bridge the generational gap and overcome adversity. For more information on her speaking and consulting, go to www.goldenkeyleadership.com or call 951-235-5405.
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