Knowing How Your Employees Impact Revenue
Many years ago, I noticed something strange while working for a larger company. A PM coworker, let’s call him Carter, would come to his weekly update meeting week after week providing the exact same update. It was an expensive meeting and seemed be a complete waste of time. As a startup guy, it was extremely frustrating. In the environment I came from, every employee had to carry their weight. We were fighting for survival and the potential consequences were significant, so quickly addressing poor performance was critical.
After more than a year, weekly hour long meetings with 12+ people, and 0 progress on his project, Carter was moved to another project. What? That seemed odd. Clearly there was a performance issue here, so why just move him to another team? I asked his boss for some insight only to realize there wasn’t any. Though he clearly knew Carter’s performance was inadequate, his solution was to shuffle the deck, protecting Carter and moving him to a new spot to begin the cycle anew.
The more I progressed, the more I noticed a similar pattern across other teams. I was awestruck by the sheer number of people who were just getting by, moving from spot to spot, team to team, flying under the radar despite their limited contribution.
Adding to the problem, all departments went through an annual budget planning process that usually resulted in the inevitable, and asked for additional resources. More people, really? How could this be the answer? Why should we add more people when we don’t fully understand the contribution of our existing people and aren’t fully utilizing them?
As I stepped into greater leadership roles, this insight stuck with me. How do I make the best use of the people I have and know when it’s time to add?
Leaders are directly responsible for understanding the impact and contributions of their teams and corresponding members. Specifically, here are 3 actions a leader and business can take to increase both their understanding and employee effectiveness.
Know and understand each employee's impact on revenue. - Beyond the high level rev and cost numbers, every employee has a direct revenue contribution: To increase revenue, reduce costs, or advance the strategy. Understand which applies to each role and device a way to measure effective performance.
Regularly review employee impact, including your own. - Regular reviews lead to poignant conversations and decisions around structure and team size.
- Do we have the right number of people?
- Are we overstaffed for value and capacity or are we limited by current capacity?
- How long will it take to hire and ramp-up x role?
- How much will it cost to hire x role(s)?
- What’s the impact to progress/revenue/pace of growth/customer retention if we accelerate or delay the hire?
Make changes when and where appropriate. - When someone is not performing and is not a good fit, the impact of their poor performance is felt across their entire team, at a minimum. Teammates are forced to work harder to pick up their slack. They become frustrated, lose steam, and eventually burn out. In Good to Great, Jim Collins famously shares that we need to get the right people in the right spots on the bus. He also shares that “...if you have the wrong people, it doesn’t matter whether you discover the right direction; you still won’t have a great company.” Your responsibility to your company and your team is to get the right people in the right seats on the bus and the wrong people off the bus.
You’re a leader for a reason. Embrace the challenge and responsibility to intentionally position your resources. You owe it to your team.






