Wednesday, April 20, 2022

Employee Performance Vs. Trust

The video below highlights the balance of performance and trust in business, and puts its finger on my thoughts about management. It basically says we have two critical metrics for business, performance and trust. We measure performance endlessly, but we have few trust measurements. Corporations are concerned almost entirely with performance over trusts. As an owner of a small business, concerned primarily with long term goals and stability, I value the high trust individual more than high performance.

High performance would be great, but medium performance is more likely when combined with high trust. A high trust, medium performing individual is a win for small business, while many corporations work to weed them out. 

Trust is more important because small business is playing the long game. We are not concerned with impressing shareholders with quarterly profits. We are not trying to juice sales so we can sell the business. I have big publishers that betray my trust on a regular basis. I don't trust them. I try not to speak with them, if I can help it. I will be there, in my business, longer than any person I speak with at a corporate level, all the way to the CEO, who as a customer, is probably high performance, low trust.

Performance is the key component in a corporate environment, unlike small business. In a corporation, you provide your high performance for high compensation, with both sides wary, since trust is in short supply. Corporations, in my experience, are a devils bargain of compensation for agreed upon exploitation. 

Corporations are the parable of the scorpion and the frog. They don't exploit out of spite, they do it because it's their nature. They think with their wallets in a short term fashion. So you take a job in an untrustworthy corporation, build your eff you fund, and always put a percentage of your effort towards the time when the scorpion will bite your back. Some corporations have a facade, a corporate culture of trust, but cultures come and go in corporations. 

Because I can't trust a corporation as a small business owner, I'm always looking over my shoulder, checking my margins, and hedging. So much hedging. I'm dividing my efforts, diversifying my inventory, questioning whether I should put effort into the latest initiative I know will be abandoned next year. This is the drag corporations experience from partners because of lack of trust. 30 companies have 80% of my business, yet I'm always looking at hundreds of others, mostly because once a company becomes a market leader, they become low trust.

Small business values trustworthiness over performance in its employees. Margins are thin, it's a high theft environment, and every employee is the face of the business. We can't afford to break trust with customers, but it all starts with the employee. The down side to low performance, high trust, is it emphases the "steadies." It brings in those who are great at keeping the status quo. 

In a corporate environment, you need the high performers, but the foundation of a department is often the steadies. In a small business, you have trouble attracting the high performers, because you lack high performance compensation. As an owner, because you have difficulty finding the high performance employees, you end up relying on yourself for this. You are the high performance, risk oriented individual you need. That's generally your contribution and it's a bit of a problem when you disengage.

Small business has the time to build trust without the performance pressure of a corporate environment. I've had people compare my business to Burger King, as in Burger King is paying more than you. Would you want to work in the corporate pressure cooker of a Burger King franchise? Do you want to work for a low trust employer who demands high performance, for an extra fifty cents an hour? Perhaps. Maybe you need that pressure cooker to feel good at the end of the day and you expect all work to be in a low trust environment. For most people, I think that may be their entire experience of work. Expectations of low trust, high performance.

Now as for measuring trust, it's mostly a factor of responsibility and time. Perhaps there are no easy metrics for measuring trust. Maybe measuring trust is a big of a Shrodinger's Cat, where the act of measuring trust is a distrustful act that effects the experiment. It wouldn't be the only soft thing I measure by knowing it when I see it. I'm no navy SEAL, but my paramount need as a small business owner, with my livelihood in their hands, is being able to trust my people.

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