Too Many Hats - Too Few Heads

Jim Blasingame The question I am most often asked by the media is, "What is the most significant challenge facing small businesses?" My answer is always related to capital. It's redundant to say undercapitalized small business.

And when pressed for the second greatest challenge, I tell them, "Too many hats to wear, and too few heads to wear them." There are always more jobs to do in a small business than people to do them.

One of the reasons for the small business Hat:Head (H:H) imbalance is the first challenge. Unlike our big business cousins, our size limits access to capital, which perpetuates the H:H imbalance.

When you build a formula in an electronic spreadsheet, and one component of that formula includes its own answer, the program will give you a message that says, "Error: Circular Reference." In English: You can't get there from here.

We're never going to find the answer to the H:H imbalance as long as part of the formula includes having enough capital, because 99.9% of small businesses are never going to have enough capital. It's a circular reference.

But don't be discouraged. There is a way to solve the H:H imbalance. Oh, you're still going to have more hats than heads; that's not going to change as long as you're a small business. But the solution I'm talking about is making sure that the heads you have are the right ones, and that they are wearing the hats that fit them.

Next Question
Eventually, interviewers ask this question, "What areas do small business owners most need to work on most?" I say it's a tie between marketing and human resources management.

Most of us are plenty smart about the fundamentals of our business: our industry, the products, and competition, for example. And with all the new accounting software, we've even gotten pretty good at the financial stuff. But too many of us still lack sophistication in marketing and HR. I'll leave the former for another day. For now, I want to focus on the latter - specifically, hiring.

Setting The Stage For Success
Big businesses have long had seriously sophisticated hiring protocols. Way back in 1976, I endured a grueling interview process with Xerox: a battery of tests, multiple interviews with different people, background checks, more tests, and one last interview. By the time I got the job, four things had resulted:

1. I was impressed with the due diligence of my new employer.
2. I was pretty proud of myself for successfully withstanding such a gauntlet.
3. They had satisfied themselves that I fit their employee profile.
4. They believed I was the round (sales) peg to fit their round (sales) opening.

Oh, by the way, there was one more result: I was a successful employee for six years.

Big businesses, which are well capitalized and can afford plenty of heads for every hat, as well as a hiring mistake or two, take great pains to make sure they make accurate hiring decisions. Small businesses, which always have an H:H imbalance, and are undercapitalized and therefore can't afford to make a mistake, too often use seat-of-the-pants hiring practices. What's wrong with this picture?

Sophisticated Doesn't Have To Mean Big Anymore
The list is long of the sophisticated business resources now at the fingertips of small business owners - both incrementally and economically - which historically have been available only to the big guys. And the good news for those of us with a perpetual H:H imbalance, is this list includes sophisticated hiring resources.

Today, with a little awareness, a little discipline, a little patience, and a little money (honest), you too, can claim those four - no - five results that Xerox and I enjoyed over a quarter century ago.

So what are we looking for in our quest for hiring sophistication? It's beyond the basics: good work habits; experience; a track record of success; that sort of thing. Actually, you're probably already doing a decent job in these areas. But remember Xerox's round peg/round hole goal? That's what you want. But seat-of-the-pants methods won't get the job done. You must know what makes your applicants tick.

If you're hiring an accountant, small business now can know what big business has known for years: Successful accountants have personality traits that make them that way. If you're hiring a salesperson, you can now effectively identify and choose from those candidates whose personality will lead to success in a sales assignment.

The Five-Factor Model
One of the most valuable resources I've found to help small business owners understand the role personality plays in the workplace is the book, The Owner's Manual For Personality At Work, by my friends, Pierce and Jane Howard. They have taken what is called the Five-Factor Model, which deals with the Big 5 basic personality traits, and translated it into business applications.

Researchers have been studying personality influences since the 1930s. But as the Howards' point out, it's only been in the last decade or so, since technology has allowed quicker processing of research data, that personality science has been refined enough to deliver quality measurement and therefore, to be useful.

It's valuable to understand the part personality plays in basic human interaction, but it may be even more valuable in the hiring process. The Howards' book is important for small business because it uses plain English and practical examples to help personality trait non-professionals, like me, understand why I need to know where job applicants are on the scales of each of the five personality factors.

With a basic understanding of the Five-Factor Model, you and I can do a better job of making sure we hire people who are likely to be successful in the assignments we are filling. And one very important by-product of such successful hiring is more effective heads under your hats.

More Personality Tools
Educating ourselves about personality research is a good management practice. But to paraphrase Clint Eastwood's character, Inspector Callahan, we have to know our limitations. Let's remember: we're business owners, not personality trait professionals. So while you're checking background, experience, etc., let professionals help you evaluate the personality of your applicants to make sure you hire the right peg for the vacant hole.

The good news, as I mentioned earlier, is that personality trait analysis is now available to small businesses, incrementally and affordably. But in order to claim those five positive results Xerox and I enjoyed long ago, you must be aware, disciplined, patient, and willing to invest a little time and money.

Write this on a rock... If you think acquiring a little sophistication and investing a couple hundred dollars is too much to make sure you don't hire an introvert to be a salesperson, how much will you have spent - and lost - in the time it takes to learn the bad news on your own?

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Category: Entrepreneurship
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