The Secret to Business Success
The following is adapted from 401(k) Architecture by Troy Redstone.
Successful business leaders understand the value of investing in their team, and no employee benefit makes a stronger business case for investing than financial benefits. The Consumer Financial Protection Bureau, a federal watchdog agency, estimates that employers typically see an ROI of $3 for every $1 invested in a financial well-being program. There is a benefit to financially healthy employees. Healthy employees stay longer, reducing the expensive cost of training and hiring replacements. They are less financially stressed and more productive when working. And they retire on time rather than working beyond their most productive years.
Companies that are regularly included on the list of top places to work have solid employee benefits as the cornerstone of employee engagement. These employers seldom have trouble recruiting or retaining top talent, and their employees often give a little bit extra because of these investments. Successful businesses garner the allegiance of a loyal workforce by communicating love in how they take care of their people.
Repeatedly, as I interviewed leaders for this book, the terms they used seemed out of place in a business context. Many of them talked about love. Many others talked about caring for their people rather than seeing employees as a means to an end. It was more than lip service because they expressed the love in dollars and cents. The correlation between successful businesses and taking care of employees was undeniable.
Coronavirus challenged the very foundation of the Rosen Hotel Group, a foundation built on “a philosophy of saying we love you,” a philosophy noticeably absent from most business classes.
Sean Kouplen, the president and CEO of Regent Bank, said that one of his new employees told him, “I figured out the secret at Regent Bank. The secret is love. I’ve never felt love before at a company. I’ve felt appreciated. I felt that they were glad for what we did. But not a personal love like I’ve experienced here.”
Love is hard to measure, and it is probably not something you learned in business school, but maybe it should have been. Taking care of the team is the secret to success. John Bartrom, the CEO of Jericho Home Improvements, said, “I try to stay engaged with the company…how folks are feeling, how their week’s going, how their wife and kids are doing. For them to know I care is like a secret sauce that pulls us close together.”
The year 2020 was a test for business leaders, and the more they cared, the better they fared. It was a test of their core values, whether or not they really were at the core. Businesses that survived (or thrived) did so because they held tightly to the value of caring for the team.
Austin Hall is the Employee Experience Manager at Pro Athlete, and he acknowledges that the pandemic was a major “stress test” for his company. “There were days we were giving more money in refunds on returns than we [made] on products going out the door,” he admits. “But we did not lay off or furlough anyone that’s full time. One of our core values is stewardship, and we love to give back. And we [did not] want a pandemic to stop us from living up to our core values, so we were willing to pay [employees their] hourly rates to volunteer. We were able to take a hairy situation and turn it into a positive for the community.”
Two of the businesses I interviewed, Jericho Home Improvements and Global Prairie, were started in the heart of the Recession in 2008, and 2020 provided a test of the values upon which their companies were built. “According to the news, it was the worst time to start a business,” Bartrom said. “A lot of others that I’ve talked to [in our industry] have really struggled. The overall market is down, but there are still some [opportunities], and those people are reaching out to us in record numbers. Sales are very strong. The struggle we have had is finding skilled labor [to keep up with the demand]. We’ve put ads in every major city in the country. We’re recruiting nationwide.”
Anne St. Peter, the co-founder of Global Prairie, said, “You have to have an abundance mentality. I don’t know what it is, but for me it’s faith. If you have that abundance mentality, you recognize that everything unfolds for a reason…you have to believe you’re on a journey, and you just have to go through it.” The pandemic nurtured a scarcity mentality for many people, but leaders who remained purposefully committed to decisions they had made in the beginning flourished. “If there are profits, part of those profits go to trying to make the world a better place. We throw those profits (10% of them) into our foundation, and the foundation gets distributed to causes that our team is passionate about. It was a decision that my co-founder and I had to make to be generous and not keep it,” she said. “We wanted to lead in a way that was an example to our children of how we want to be remembered as business leaders. We wanted our company to be a force for good in the world.”
As Kouplen put it, “You choose between the two: Am I going to maximize profits [or] am I going to love my people? The shareholder wants profits. The board wants profits. The employees want to make more money. The community wants you to give. You’ve got to decide who are you going to be. We tend to lean more on the employee side of the continuum, which makes the board unhappy at times, but that’s who we’re going to be, and if that’s not who [the board] wants [us] to be, there are a lot of other people they can hire as CEO. That’s the way I’m going to run the organization.”
For perspective, both Global Prairie and Regent Bank are incredibly generous and incredibly profitable. “The net results are very, very good financially. We are one of the top performers in the nation,” Kouplen said. And St. Peter added that their approach “outperforms typical companies in the S&P 500, anywhere from two to eight times” in spite of their generosity…or maybe because of it.
Ron Hill was the owner and Chief Enrichment Officer of Redemption Plus for 24 years. He said, “We have to care about ourselves, and we have to lead ourselves in a way that allows us to be super empathetic toward the people in our care. I genuinely think that the only way to do that is for the leaders themselves to be on a journey of growth and discovery. I believe that many people grow up with their own paradigm, their own box, their own [junk].” As Hill put it, his own “purpose journey” started after his company hit a profitability wall and he struggled to understand why. He was introduced to this concept of “purpose-driven companies,” and it answered a lot of questions. Today, he is an advocate for “stakeholder capitalism, conscious capitalism, conscious leadership.” He describes it as a tough lesson to learn, but once he learned how to lead himself and tap into the brilliance of others, he found success.
And the success translates to ROI, sometimes measured by retention. “We have very little turnover, and I think that speaks for itself,” Hall said. “Even in the entry-level positions.” John Doull, the CEO of Cornerstone Bank, said, “We want to recognize that you’re important to us, and we want you to feel appreciated and valued here,” and then noted that the 13-year average tenure of officers at his bank is “way above average for our industry.”
“It’s the three-legged stool,” Doull said. “The employees, the clients, and the shareholders — all of them have to be taken care of, or otherwise, the stool falls over.” Although he points out that there is clearly a priority to those legs on the stool. “I think employees always come first in line because if they are taken care of, they should take care of clients. My second priority is clients. Third in line is the shareholders. You put your money in, and you expect a return, but it’s not the first priority. We have got to get a return for shareholders, but first, the employees need to have a safe and satisfying workplace to be a part of and to feel valued.”
To learn more about how to achieve success by investing in your team, 401(k) Architecture is available on Amazon.
Troy Redstone, CPFA®, CBFA®, CFEI®, AIF®, is the bestselling author of Repurposement: Experiencing the Financial Freedom to Start Living on Purpose Today. He helps businesses design retirement programs that serve their purpose and their people.
A thirty-year veteran of keynote speaking, he is recognized as a thought leader throughout the industry and serves as President of the Retirement Advisor Council, the top 401(k) advisors in the business. Connect with him at www.FeeOnly401kAdvisor.com.
