Change Management - Keeping Your Key People
In previous episodes of this story, Ryan Vail, President of JadaTrack, met with an angry and important customer that was taking its business away from JadaTrack. Ryan searches for the reasons why and what to do about it …
"It sure is a mess;' said Ryan."It also means that we can't count on those receivables from FirstMover.”
"It doesn't get any better:' replied Kate. Do you want to hear the rest?”
"We have been relying on our suppliers to hold off on their bills. Yesterday. RQA Electronics said that in the future they will require 50% upfront on orders from us before they will start. I tried to reason with them, but we aren't a large enough account to them. If we don't pay RQA then we can't deliver on our work to our customers."
She then continued, as if reading Ryan's mind. "No, we can't change suppliers-they would want 100% upfront or COD until we have an established account with them.
While we're at it, our auditors identified a few possible concerns - like back taxes and how we handle international orders. It appears that we may owe the tax man some money.
Our international orders are getting stuck at customs, and clients aren't releasing funds until they receive our products. I've put together some cash flow projections for the next six months. Take a look."
Ryan reviewed the projections and said, "Kate, we have lots of cash going out - to handle growth and new projects. Upfront funding is critical. If we don’t have it, we will have a major cash crunch. I'll need to discuss this with the board as soon as possible. We have some breathing room, but not a lot.
Later that afternoon, Josef Sachek, JadaTrack's top industrial designer, asked for a meeting with Ryan. "What's up. Josef?" Ryan asked. "You don't have to set an appointment with me. I have time now."
"Ryan, I am terribly sorry," said Josef. "I don't want to let you or the company down. You have been good to me since I came from the Czech Republic five years ago. But enough is enough. I am leaving JadaTrack."
Ryan was shocked and did not believe Josef. He said, "In time, we will have better salaries and benefits. You might even have shares."
"Money is not everything to me," said Josef. "Time is also valuable.”
Ryan didn't understand. He knew that Josef was a quiet man of few words. "What do you mean?"
"As Jada Track grows, the amount of work increases. In the past year my hours have increased from 45 to 65 hours every week. This has happened to the entire design team. And what happens? Every month another designer quits. Which means my workload goes up another few hours a week. People are burned out. We can't work longer or harder. I'm fed up. I've had enough.
“Everyone in the industry knows it too. Champion Devices recruits from Jada Track - I'll be the eighth person they've hired away from JadaTrack this year."
Ryan realized that Josef wasn't negotiating a better pay package but was formally resigning.
"What else is wrong?"
"Morale is poor here. You should hear what people are saying about Jada Track - the comments are getting nasty. Employees are preparing their resumes. They don't like the uncertainty about ownership, the overwork, the stress, the lack of direction and the financial problems."
Ryan accepted Josef's resignation letter and the two shook hands. "I understand," Ryan told him. ''JadaTrack will be different -and then maybe you'll come back here."
Ryan knew that many employees resented the workload and extra hours required. Most employees were dedicated individuals like Josef, driven by pride in their work. They had a strong work ethic and were motivated to meet the company's commitments. But he blamed himself for not knowing the difference between hard work and work overload. The company could not afford to lose its best people. He asked himself "how can we attract and keep the talent we so desperately need to grow the company?"
story to be continued… Question to Reader: What is the difference between hard work and work overload? How do you keep your people? What can you do to attract and retain key people?
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