Employees, $250 Million, Pujols, and having a Plan B
As a lifelong-Cardinals fan, I was pleased and impressed with the team ownership in allowing the mighty Albert Pujols to walk away to greener pastures. The St. Louis Post Dispatch reports the team offered him 10 years and more than $200 million. I thought that was way too much, a stretch. His body is already wearing down, and the second half of that $250 million contract will be a burden for his new team, the Angels.
And business owners can learn from the Cardinals owners in how they handled Pujols.
1. The owners had a number and stuck with it. The owners have a salary cap based on what their salaries can be as a percent to total revenues. Is your number 10%, 11%? Each team operates within their own budget constraints or their own salary cap. Do you? Do you actually look at your compensation percentages before adding employees, paying big bonuses, or offering other incentives.
2. Plan B. This is so important. The Cardinals have a Plan B and it’s in motion (which actually started two years earlier). They also have flexibility. To me, this is the greatest lesson for small business owners. Every year, I want to see all of my owners review their personnel listing and conduct what I call HR Contingency Planning. We do it for disaster recovery. Why not with our staff?
In short, go through each name. Circle your keepers, your best people. What would you do if you lost them today? Tomorrow? You need a Plan B. In bigger businesses of $20 million or more, that’s easier. That’s because your management team can be continually reproducing themselves through mentoring and coaching. That means people can step up if a key person departs. For businesses under $10 million, you do not have that luxury. In fact, you probably are the replacement if you lose that key person.
So that’s where you need a pipeline of resources you can reach out to if you lose a key person. Let’s say your top person is your sales guy generating $3 million in sales for you. Your Plan B probably includes several of the following:
1. Take over that person’s top 10 accounts. Spread out the remaining customers to existing staff.
2. Go to your files where you have been maintaining resumes over the year and identify the A Players (the approach Topgrading recommends).
3. Reach out to the contacts you have made over the years from conventions in your industry, various business mixers, and other networking activities.
Plan B assumes you are doing 2 and 3 above. If not, those activities need to be a part of your HR strategies.
For now, I’m anxious to see how Plan B works for the Cardinals. I wish Mr. Pujols and his family well in California. I hope he continues to play great ball and be a continued roll model for kids and his fans.
As Jack Buck, the legendary and former voice for the Cardinals would say, “Adios.”