In the music world, fans are everything. They are the bands customers. They buy the albums, concert tickets and merchandise. When a band announces that a member of the band has left the group, it can dramatically affect the fans. The fans have an emotional investment in the band, and changes can affect the way a fan thinks about the band. A typical response may be “I will not buy the next album” or “I will not see them live again.” Some bands can make changes, even drastic ones, and continue on. Some bands discover a member change dooms the band to no longer being relevant to their fans.
In business, it is often the same way. Business relationships are, as we know, built by people. Customers return to do business with the people they feel comfortable with. Employees respond to managers they like. When a change occurs, it has an effect on the business in many ways.
Most business owners and managers know employee turn over is a bad thing. However, usually, the reasoning is the time and cost of hiring, training, and getting new employees up to speed. What is often lost in employee turn over is the dramatic effect it can have on the customer base. The clients, vendors, and other employees are used to dealing with a certain person. They have a relationship that keeps them coming back. When that changes, clients, vendors, and even other employees have no reason to not wander off to other businesses.
One case in point is a place I worked where a particular manager had built up a business unit by very hard work using his personality and doing things his way. He had built his own business with-in the business that employed him. Everyone wanted to be his client, and employees loved working for him. The business owner however, did not see much difference from one employee to the next. So one day, this manager left for a better opportunity. The customers faded away. Employee turn over sky rocketed without a solid manger in place, and the business unit shrank to a shell of its former self. The fans no longer had a reason to support the band.
In another company, there was a manager who ran the entire behind the scenes aspect of the business. When that manager was deemed no longer valuable, a change was made. But it became the equivalent of taking the main support beams out of a building. Everything quickly collapsed. Early in my career I witnessed a business where everything was built around the manager. When the manager left, the business folded with in a few years.
Could these situations have been avoided? Of course. In music, the problem becomes the ego of individual members cause them to think they are better than the sum of the band. In business, I have observed owners take the attitude of “my business is so good, I can deal without them.” The reality is the fans – the business clients, may not share such thoughts and drift away.
In future posts, I’ll share my thoughts on employee retention.