Ten or so years ago, I was talking with a business friend of mine about joining his consulting firm. While he had always been great when I had interviewed him and in social situations, this guy must have taken one of those “win every time in any situation” negotiating courses: Although he had contacted me about coming to work for him, his “recruiting” strategy was a combination of telling me how little I was worth and how few skills I actually had.
As you might imagine, I was a bit miffed—and more than a little confused—by this approach. I didn’t take the job. In hindsight, I’m glad I got to see the guy in action before I took the job, and have been happy working for myself ever since (I pay better, and I’m a lot more fun). But I’m still baffled about what he hoped to gain from that approach.
I was reminded of that experience earlier this week as I was reading Michael Silver’s column on NFL.com about the current dustup between the owner of the San Francisco 49ers football team, Jed York, and head coach Jim Harbaugh. After taking the helm of the 6 win -10 loss 49ers three years ago (the Niners hadn’t had a winning season since 2002), Harbaugh’s team has gone 13-3, 11-4-1, and 12-4. The team has played in the NFC championship game three consecutive times during his tenure as coach, with one trip to the Super Bowl.
Apparently, Harbaugh believes he’s proven that he is one of the best coaches in football today (quite reasonably, to my mind), and would like to renegotiate his contract accordingly. According to Silver, the 49ers are offering “significantly less.” Even more troubling, here’s how the 49ers' front office is characterizing their position: “General manager Trent Baalke has assembled a talented team and is likely to continue making smart roster decisions, and Harbaugh is hardly the only person who could coach this team to a championship."
This is how they’re talking about the guy who’s going to lead their team next year? I have to believe that their relationship is strained, and owner York would prefer if Harbaugh left. Or maybe he believes he has the upper hand because it's too late for Harbaugh to get another top coaching job for the 2014 season.
But I don’t understand why he would make statements that Harbaugh will never forget and that will ‘inspire’ him to look for another team that will appreciate his contributions. Seems as if it would be smarter to either fire Harbaugh or negotiate a deal close to what he wants to keep him happy. An unhappy middle ground isn't doing anything to help the team.
Running an advisory firm probably isn’t as complex as owning a pro football team, but I suspect there are more than a few parallels—and dealing with employees is one of them. It’s not as apparent, but from what I’ve seen and heard, the success of an independent firm depends every bit as much on its employees as the 49ers are on their players and coaches. That’s especially the case if a firm owner aspires to be larger than one or two advisors and a secretary.
Just as in football, one of the most frequent points of contention between owners and employees is compensation. Owner-advisors would do well to learn a lesson from the 49ers—and from the guy who tried to hire me back in the day—by remembering that salary negotiations are not isolated events. The impression you give your employees in these discussions will be the way they view you and their role in your firm.
It’s not just about the money; in fact, money is almost never the important part. Employees—especially professional employees—want to feel valued by their boss and their firm. They want to feel appreciated. They want to feel that their efforts and contributions are recognized. So if your inclination is to run them down, to diminish their contributions to save a few bucks, remember that your success depends on them—on what they do tomorrow and the next day, and every day, even (especially?) when you’re not watching.
So pay them what they’re worth, and maybe just a little more. If they want more than that, find a way to say “no” that still motivates them. You’re a small firm, and can’t afford that level now, but as the firm grows, and they’re a big part of that growth, everyone will make more, etc. And mean it.
You get the picture. If you want to have a business that’s bigger than what you can do by yourself, your biggest job is to motivate your employees to help you. If you don’t, they’ll be underperforming while looking for a job in which they do feel appreciated. And that’s not what you want in an advisory firm or a football team.