Opinion: Expensive employees also make you money.

The Guinness Book of Records says the most played board game in history is Monopoly with more than a billion people having tried their hand at becoming a property tycoon. The history of Monopoly dates back to 1903 so I’m certain all readers are aware of the general concept of Monopoly.

Our children were lucky enough that Santa delivered them a copy of one of the newer variants, Monopoly Revolution, down our chimney on his busy night. Monopoly Revolution introduces credit cards instead of cash and ups the pricing ante to more realistic figures (Mayfair sells for $4 million, for example, and each participant starts the game with $15 million).

After many countless hours playing the game over Christmas (and not telling the kids that statistically Orange is the best group to own and Brown is the worst group) I started drawing some parallels to normal business.

As you would be aware, in Monopoly the aim is to buy as many assets as possible while keeping enough cash to cover (unexpected) expenses. If you overcommit on your properties or houses and then land on your opponent’s property, you start the steady spiral of selling off houses at 50 percent and mortgaging your properties.

The item that really struck a chord with me hereit i was how hard it is for a player to recover once they have to start selling off their houses and mortgaging their properties. With limited ability to make money, is hard to recover from the initial over-commitment. Once the cards start being flipped over you know those opponents are only one bad roll away from bankruptcy.

This seems very similar to major companies that turn to layoffs as soon as times are tight. The old-fashioned accounting departments see a simple strategy of increasing profits (or decreasing losses) by reducing expenses. Simple logic says a P&L has income and it has expenses. Decrease the expenses and you have a more profitable business. Unfortunately for most companies the largest expense is the employment expense. Therefore many companies see layoffs as a simple way to lift profit.

Sounds like some Irish logic to me.

When I am playing Monopoly, I do everything I can to hold on to my income producing assets. If I have a business that is underperforming, I want to do everything I can to hold onto my income-producing assets (my staff) and work out ways for them to generate more income.

Paying staff NOT to work for the next three months – which is what paying out redundancies is like – seems counter-productive to increasing sales. What about asking the very staff that could possibly be made redundant what their solutions are for increasing sales? It is amazing how many good ideas your staff have for increasing revenue. They are at the coal face and see lots of potential for increasing sales – but they normally resign themselves to the fact they are never listened to. If their job was on the line, I think you would be surprised at how many great ideas would come forward.

What about some focused training by your star performers to your underperforming staff? Forget about bringing in the external consultant – what about your own staff who are doing the numbers? Surely they have some great ideas and giving them an additional mentoring role will make the overall team stronger. Most people want to be in a strong team as it makes them strive harder.

I was in the Aussie dressing room at the SCG during the fifth test and I congratulated Mike Hussey on topping the batting stats for the Aussies. He was very polite and thankful but made it very clear that he would have preferred to have won the Ashes and not scored as many runs. It is much more fun being in a champion team than being a lone champion in a poorly performing team. Give your staff the ability to create a champion team.

Many people see that the large corporates of today have no loyalty and have a slash and burn attitude. Sometimes that attitude is returned with less loyalty from your staff. If you ask your staff to help you solve your expenses problem – making it clear redundancy is not an option as you want to retain your staff – then they repay you many times over. It is certainly tougher than simply cutting staff but well worth it.

Tell me your favourite Monopoly property: md@smallbusinessrules.com (keeping in mind Trafalgar Square and Vine Street are statistically landed on more than any other properties).

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