One of the biggest factors holding businesses back when it comes time for a transition — any transition — is something David Garza calls the people ceiling.
"I'm not going to tell you how hard change is, because I know you're living it," he told the Heavy Duty Aftermarket Week (HDAW) audience Wednesday in Grapevine, Texas.
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Garza, founder and CEO of Compass Human Capital Advisors, specializes in talent management and human resources operations. He's also an Army veteran and holds degrees in engineering, organizational leadership and behavior, and an MBA.
Business transitions expose everything, he says, whether that transition is an acquisition, growing and scaling, reducing owner or leader dependency, or a leader's exit through sale or succession. All of these generate a tension or a torque on operations.
"You may not be thinking transition today, but it's coming," Garza says.
Signs a business isn't ready include slower decision-making, messier communication, leaders get pulled into the weeds, and new employees aren't as effective as the early team.
That, Garza says, is a people ceiling. Not to panic, though. He says it's completely normal. He outlined three strategic capital levers to help break through. The first is workforce alignment.
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"We in business can find our own state of harmony," he says, where everyone knows and understands the direction and works toward the same goals. It starts with the business's values. Next, is communication across the board on the company's values and updates of progress, changes and challenges.
Lastly, there's leadership depth and continuity. Garza referenced his time in the Army, where units train on decentralized execution and prepare for rapid leader replacement. This means your business needs to create a layer of capable leaders so strategies and goals can be executed upon without constant senior leader involvement.
Garza cited some practical tips to build a leadership bench. It starts, he says, with selection. Choose new leaders from people that take ownership, are respected by their peers and have good emotional intelligence.
"You've got to protect your culture with the new people you bring into an organization," he says. "If you don't, they dilute your culture."
Next, define capabilities and execute on strategies. Emphasize decision-making, communication and development, Garza says, starting leadership training and mentoring early. Give emerging leaders real authority and let them fail small.
The third lever is an ideal performance climate with clear objective setting and metrics to measure those objectives. That includes enhanced job descriptions that includes visibility across objectives, tasks, outcomes and impact.
"People want to know what they're doing," Garza says.
And setting the right note with culture is important, especially for underperforming or misbehaving employees. Instead of focusing on paperwork and process, Garza says help employees figure out what they did wrong and help them to do it right.
"I advocate for the fact that hey, it's expensive to go find people," he says. "It's hard to hire people."
