How Office Morale Affects Profitability

Posted on 2019-11-08


How Office Morale Affects Profitability

A Solid Company Starts With Communication

Ian Farr, CEO of Bimmian and Exabit Consulting, began with an interest in computers and technology that he nurtured well into university. His BA in computer science with economics tied-in to the business side provided a good baseline, but his success began when he discovered the link between good office morale and profitability. Like most entrepreneurs, his company started up lean and small. With only two people, communication channels were clear.

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Growing a Company From The Ground Up

After starting a company based on affordable import car parts, Farr’s entrepreneurship was off to the races. “So, one thing led to another and I realized that these things sold pretty fast. So I got to do another five; they sold pretty fast. I got another ten and one thing led to another. I had an actual business in my hands there.”

“We’re a niche diagnostic,” says Farr. “We’ve got 15 different brands, each one with a different niche market and we bring those parts in, sell them online and ship around North America for the other business.”

A Lean Startup For Fat Profits

His self-described “Type A Personality” entrepreneurship-style is aggressive. “I tend to be a pretty opportunistic entrepreneur, and an opportunity presented itself. I was in a position where I could seize the opportunity to pursue it. So that’s what I decided to do.”

“Recognizing opportunity is really just about asking yourself ‘can I do this better, faster, cheaper than the alternative? if there is no alternative,that’s even better.’

“The advice that I’ve been giving out to entrepreneurs is always centred around a lean startup. For example, test your market, test your theory before you go and start spending thousands of dollars on incorporation and getting business cards set up and website. Do the absolute bare minimum.

“I always advise starting as a sole proprietor or partnership to reduce the administrative burden. Don’t worry about setting up bank accounts and all that stuff. You can run it from your own bank accounts for now. Don’t worry about having the absolutely perfect website or whatever in order to actually sell your widgets or your service.”

“Just create the most basic infrastructure that you possibly can so that you can actually start the sales process sooner rather than later.”

Don’t Sweat The Small Stuff

Farr knows what the statistics are for small businesses that fail. He understands that entrepreneurship is a difficult process, and has the potential for failure.

“You may start something else, it might fail. You don’t want to have the huge upfront investment in a business that you don’t know if it’s going to work or not.

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“When I first started the auto parts company… I was dead sure every week or every month a competitor was going to come up and completely dominate the market, sweep us out and then we’d be left with nothing. I would always be a little bit hesitant to invest either time or money into the business and every time something bad would happen, I always said, ‘okay this is the end.’ That ended up never happening.”

“a solid business with good principles, good ethics, a good market presence, with quality products will be able endure more than you think it can.”

“And so, now, when things happen and things go awry, I kind of take it with a grain of salt.  I know that in the end, everything will work out…all the little silly losses that you sustained throughout time will probably go unnoticed on the income statements anyway. So don’t sweat the small stuff.”

Keep Yourself Motivated and Keep Learning

How does Farr keep his morale up? Sometimes, inspiration and education are one and the same thing. According to Farr, reading helps him learn about motivating behaviour and learning about the business of running a business.

“I like to listen to audiobooks when I’m driving…there is one book that I have been reading lately and it’s been pretty transformative and actually now that I’m keyed into it, I’ve heard a lot of people speaking about it. It’s called ‘Traction: Get a Grip on Your Business’ by Gino Wickman.

“This guy is an EO (Entrepreneurs Organization) member who looked at this scaling-up model, which was really talked about. I’ve been through that Scaling Up process a number of times. It’s my personal opinion that it’s probably for businesses that have a solid senior management or executive team…we’re looking at implementing some of the learnings out of this book. So that’s kind of my favourite for now.”

A Positive Office Culture Creates Corporate Loyalty

At the moment, Farr is working on company culture within Bimmian. Since his company had started out with an intimate group, it didn’t really need establishing from the beginning. However, as his company grew, a more diverse range of personalities entered the mix. Farr is working on changing the current attitude that many entrepreneurs have already established when starting up their company.

“A lot of entrepreneurs think of staff as, ‘I give you money why don’t you give me the work that you said you were going to give?’ ‘Why do I need to hold your hand and babysit, worry about whether or not you’re friends with the guy in the booth across from you, or whether or not you’re having a fun day?’ 

“I ran into some cultural problems in that regard over the years. I’m trying to figure out what’s the right balance of taking time and effort and money out of the business to do staff recognition, morale building and team building exercises and investments into staff improvement.  

“To build a longer, lasting culture with loyal and happy employees… that’s really quite important. And I think that’s something that I’ve missed for sure, and I know that’s something a lot of entrepreneurs struggle with.”

The realization that work culture was tied to profit was an epiphany for Farr. A change was needed when “most of the staff ended up transitioning.” He prefers a smaller crew, of four to six people, where the workload is light enough to keep the team functioning but flexible in case of sudden absences. The Bimmian CEO learned that how different personality types worked with each other was the key to productivity.

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Establish a Model For Professional Behaviour

“People sometimes get in a shouting match in the office. You know, oil-and-water type of interactions. People feeling that others are not pulling their weight. So those are some of the symptoms and we struggled with it. We brought in a consultant to try to help the culture and the morale.”

Farr thought the occasional conflict was fine. But a standard needed to be set regarding office behaviour.

“If you’ve got to call somebody out, don’t say, ‘you don’t know what you’re doing, you’re an idiot.’ You say, ‘that decision that you made was not consistent with our core values….”  and, ‘that’s going to impact the company in this way…’ We all did agree that these core values are important to us and to the company and are there to shape what we do on a day to day basis. So from that point of view, it becomes a little less about attacking and more prescriptive.”

It’s not always necessary to make sure that teams are functioning well together, just that teams are functioning well independently.

Ian Farr can be reached via LinkedIn. You can also connect to Bimmian through their Facebook page.