Talent Topics: Agile Leadership in Uncertain Times
How Culture, Compensation and Communication Can Set Your Business Apart
by Julie Pankey
After the uncertainty that rocked our world in March of 2020, the businesses that displayed agility in picking up the pieces and moving forward are the ones that I see thriving today.
What does it mean to be agile (in the business sense), and why does it matter? Business agility is the ability of an organization to adapt quickly to internal and external market changes, respond rapidly and flexibly to customer demands, adapt and lead change in a productive and costeffective way without compromising quality.
The reality is that the most successful companies in the world today pay top dollar in their pursuit of creating an agile business. The position of Chief Agility Officer became a mainstream job category a number of years ago, and there has never been a more critical time than now to be agile. Spa and resource partner leaders must be able to evaluate their business models and determine if it was created for 2021 and beyond or was it built for a different time that simply no longer exists.
Do you run an agile business? Here are a few questions you can ask to determine the answer:
● Is your team “we-centric” not “I-centric”?
● Do you have procedures in place to handle most any situation?
● Do you openly communicate with your team?
● Is your staff satisfied and engaged?
It may not be a surprise to find that these questions are related primarily to a business’s employees. That’s because the key to running an agile business is to focus on your greatest asset: your people. Employee satisfaction means client satisfaction. It is only with the determination and dedication of your people that you can serve your clients. So how can leaders help develop those qualities? What do people want when it comes to a lasting job and career? It typically boils down to three things: creating an atmosphere your team enjoys walking into every day, providing fair and good compensation and establishing clear channels of communication with management.
Perhaps more than ever before, company culture plays a significant role in the success of modern businesses. Establishing a company culture focused on a positive work environment and rooted in valuing people above all else is the first step to being a resilient, agile business. In that kind of culture, staff know what is expected of them, they are given the tools to be successful and are celebrated for their individual strengths. In that kind of culture, communication with leadership is open and transparent, and each person’s passions are aligned with business objectives is a culture that will set your business up for success. Let’s have a look at a few statements that offer insight into the approaches of a few successful brand cultures:
● Southwest Airlines: “Warrior Spirit; Servant’s Heart; Fun-loving Attitude.”
● Birchbox: “Apply only if you’re hopelessly optimistic.”
● Four Seasons: “Our greatest asset and our strength is our people.”
In slightly different ways, each of these brief statements reveals something about the philosophy of brands making them, highlighting some of their values in an appeal to potential and existing team members. As spas and resource partners evaluate the ways in which their practices and procedures support a people-first culture, they may consider trying to distill their own philosophy into a brief, easy-to-understand statement (or statements) that reflect their values and communicate them to current and future team members.
As individuals join your spa or company, they are envisioning starting the career of their dreams. Far beyond the offer letter, employees are looking for a work environment that is positive, fun and built on a mutual trust and respect, where their opinions matter and their ideas are considered. Coincidentally, this is the shortest path to creating an agile business.
Put simply, an agile business places people at the center of everything it does, engaging and empowering every member at the team. When people are at the center, both employees and customers are far more likely to receive what they need from a business.
Speaking of what employees need: Compensation is arguably the most important piece of the puzzle when analyzing the important mix of spa metrics and key performance indicators, though it can also be one of the most challenging to place. After all, there are so many compensation models: hourly, salary, hourly plus commission, straight commission, team-based pay and hybrids of any of these.
When evaluating the health of a spa business, compensation and expenses are without question the first figures that should be examined. And though there may be a variety of ways to approach those numbers, the basic rule I apply to judging a spa’s compensation is simple: A spa staff cannot be paid more than 35% of the business’s revenue and be truly profitable.
If your spa is currently reviewing (or planning to review) its compensation model, consider the following set of questions as a starting point:
1. How profitable are you overall? Are you bringing five, eight, 12 or 20 percent to the bottom line? (Side note: if your profit is more than 20 percent, please allow me to award you a gold star! And drop me a line so I can host you on our podcast!)
2. What percentage of revenue is dedicated to compensation?
3. What are you current compensation levels? Are those levels competitive in your market? Is your staff satisfied and does it motivate them?
Once you evaluate where your business is regarding its commission structure and profitability, you are armed with the data to make changes.
Changing a compensation model is unquestionably difficult, but it is not impossible. There are a couple specific rules I recommend following when considering a such change: First, communicate openly with your team; be transparent and invite conversation. Second, be sure the new structure is well defined, with clearly stated goals and objectives. Remember, a compensation model—no matter what type—should feel like an opportunity, not a life sentence.
Goals, Processes and Communication
The importance of communication, of course, goes well beyond the issue of compensation. In fact, I would argue that, along with clear goals and processes, communication is the most important element of a successful business. A big reason for that is that communication is essential to establishing a “we-first” (rather than an “I-first”) culture. If the “great pause” forced upon us by the COVID-19 pandemic has taught us anything, it is the importance of building personal connections, showing people that we value them and creating an environment where people can thrive. Goals and communication are key to accomplishing all three.
If you have not created clear, measurable goals for yourself, for each team member and for the business as a whole, I encourage you to spend some time developing those. Just as a ship captain relies on a chart to navigate, spa and resource partner leaders need goals that can help point the entire business in the right direction and sets them up for success.
Once you have defined those goals, create a roadmap highlighting the goals that are important to you and breaks them down into team goals that are communicated to everyone. Inviting team members to offer feedback on these goals can also create added buyin and open leaders’ eyes to goals they might not have otherwise considered.
Once those goals are established I encourage you to do daily stand-up meetings with the team where you not only communicate the goals of the day but where you also celebrate the team, talk about the daily forecast and rally the team for success.
I also suggest not waiting to communicate with your team about their performance on an annual basis but to set up quarterly one-on-one meetings, taking at least 30 minutes to really connect with every member of the team and what their own personal goals and aspirations are so that you can help advance their professional development. In turn, you can discuss their performance, their challenges and how you can support them so that they are successful in reaching the goals you set for them as their leader. Then, the annual performance review is a breeze because you have maintained an open line of communication throughout the year.
This “great pause” of 2020 and 2021 has given many of us in the spa industry a fresh new perspective. We have had the opportunity to look at our businesses and our lives with new purpose. If you are fortunate enough to be reading this, you are fortunate to have the opportunity to begin again in a way that will not only benefit your business and your life but also the community that you serve. I can’t wait to see what the people in this magnificent industry make of it.