Grow Right: Avoid Excessive “Success Taxes”
ESI Service Corp. was growing rapidly. Their construction maintenance division was winning work that required them to purchase new equipment–big equipment. One morning the largest truck ESI had ever used arrived brand new from the dealer. ESI Service Corp.’s logo emblazoned both doors and it was gleaming white.
Andy, the driver hopped in, the crew loaded the equipment and headed out to the job site, unloaded and got to work setting up the scaffolding to caulk and seal the building. Andy headed off to another jobsite for inspections.
At about 11:30 am, Andy returned, hopped out of the truck and quickly realized it was still moving. Frantically he grabbed the door handle trying to pull himself up and into the truck. The massive vehicle kept rolling, Andy slipped and hit the asphalt, half his body landed under the truck, which kept rolling…
Much was lost that day: a great team member, leader and person. ESI also lost a piece of the bedrock of their culture–TRUST.
The Human Cost
The crews were upset and lost trust in management–how could they let this happen? Are we just tools to them? Like that new truck? The insurance premiums sky-rocketed as a result of the accident and the lawsuit that followed pulled the executive team down a rabbit hole for over a year.
How could this have been prevented?
ESI Service Corp.’s rapid growth was exciting and pulled the company in many different directions. From $3 million in 2007 to $25 million in 2011–it came with a price–process, systems and policies necessary to sustain the growth were put off because they were all too busy– until, suddenly, they weren’t.
One way or another, growing companies pay what we call a “success tax.” A properly structured Human Resources Department with experts in both benefits and employee development and training could have avoided the accident. You see, Andy jumped into the truck without any training and did not know that the hydraulic-brake system required an additional step to set it correctly.
Policies and Procedures – Not Heroic Efforts A 20-person company might get by without an HR leader and policies. A 250-person company cannot survive without one. The complexities of generating the additional revenue and the number of moving parts necessary require foresight, planning, patience and execution. In other words the Executive Leaders need to see the future and structure the company to achieve it successfully. ESI Service Corp. learned this the hard way and lost much in the process.
Decide what you want your company’s future to be and call Merritt Green at General Counsel, P.C. for a consultation and fitness checkup on your company’s operations, stress points, structure, HR Policies and Procedures (strategic HR with training plans) and team needs so you can grow a great business–a living company that can survive and thrive in the future.
General Counsel P.C. has the expertise, skill and–the real key–unique experience of running companies as C Level Executives that makes a difference when advising our clients on: (i) structuring operations for efficiency and legal protection (which means more value); (ii) administration (not just overhead but value added elements); and (iii) Sales/Marketing (proper incentive based compensation causing the behavior that drives results!).
See your future. Plan your future. Attain your future.
General Counsel, P.C. Corporate and Tax Practice Group
General Counsel, P.C. – Every Business Needs a General Counsel: General Counsel’s Business and Tax Practice Group has over 40 years of professional experience in counseling business owners on all aspects of business and tax matters. Our attorneys have extensive experience representing a wide range of local, regional, and national companies and business ventures.