Lean vs. Mean – Small Business and Responsibility

I have written often about strategies small business can use to operate modestly, spend wisely, and reduce cost by taking a lean approach to operations, marketing, and production. At crowdSPRING we try hard to manage our business and our team using tactics and strategy that have allowed us to construct a sustainable business, provide value to our users, and build a wonderful team.

We have taken this approach because we believe that businesses large and small have a responsibility to all of their stakeholders to create an organization that profits, but does so fairly and never at the expense of customers, investors, or workers. When I think of the profit-making ability of our company, I think about it in terms of maximizing that profit, while adhering to some  very basic values and some very basic tenets of humanity. We are committed to providing a safe and secure workplace as well as returning a profit and, at it’s most fundamental level, this means that we pay fair wages, provide essential benefits, and respect the fact that each person who does work for us has differing needs and desires. Does this mean that we must charge more for our services because we have this approach? I would argue that it does not. Just as we must balance the cost of electricity for our office, hosting for our servers, rent for our office, and the capital expense of computers, furniture, and ping-pong tables against the prices that we charge, we must also bake in the expense of the health insurance, life insurance, and retirement benefits that we provide to our employees.

I have also written in the blog about Obamacare and its impact on small business; there is no denying that for many businesses there will be new cost associated with the new responsibilities that businesses are required to assume. For many businesses this will mean a cost that they might not have incurred in the past and they will need to determine for themselves the best strategy for their own business. But, it should not mean that they be motivated to reduce the size of their workforce or otherwise game the system so that they can avoid fulfilling their basic duties under the Health Care Reform Act. To be motivated simply by the profit imperative to evade basic coverage to workers is avaricious. By providing a reasonable package of benefits to workers all of the stakeholders of that business ultimately benefit.

When employees are given health and retirement benefits, they are strengthened by knowing that they have a safety net which provides for them and their families. Their day-to-day health needs are taken care of with no fear that a large expense may be incurred or that their children will be threatened by illness. Retirement benefits provide workers comfort that their hard work today will be compensated not just when the direct deposit for the current payroll is made, but that they will continue to be compensated even after they stop working.

The business itself benefits, not just from having a healthy workforce, but by strengthening its ability to vie with other companies for the best workers in a very competitive market. Increased productivity is also achieved through a virtuous mix of healthier, more confident workers along with a reduction in health-related absences and increased retention rates of the very best employees.

Finally, customers also benefit in multiple ways by interfacing with that healthier, happier workforce. The increased retention rates lead to workers who know your product or service more intimately and whose loyalty to the company increases over time, leading to higher customer satisfaction. Increased productivity also leads to more rapid improvements in a product or service via reductions in iterative cycles, innovative ideas being implemented, and deeper, more meaningful relationships being developed over time.

False color skull X-ray: Wikimedia Commons