Managing people is the most difficult thing I’ve done in my life. To be a great boss you have to manage employees the way they need to be managed, not the way you’d like to be managed. For example, I’m usually very hard on myself because that’s how I thrive, but when I use the same approach with my employees, they feel attacked. These are some of the most valuable lessons I learned on being a great boss.
Hire the Best People You Can Find
The biggest mistake I made in my first years as an entrepreneur was hiring the cheapest people I could find. I was so obsessed with keeping our overhead low that I didn’t bother to think about the value I was getting in return. When I started hiring the best people I could find, The Outsourcing Company tripled its revenue in a year.
The most important lesson I learned as a business owner is that great employees can easily make you 10 times their cost and they only cost maybe 50% more than the average employee. There’s nothing more important than getting the right people on the bus.
Create a Strong Company Culture
What values does your company stand for? What makes you unique? These are the values we have at The Outsourcing Company:

  • Open book policy: anyone in the company can see how much money we make and how much we spend.
  • Positive relationships: we hire people we like hanging out with and we only work with clients we like.
  • Balance: we work hard but only for 40 hours a week. We don’t overwork our employees.
  • Self-development: we send our employees to conferences and provide them with books and other learning materials for free.
On top of that, we take everyone out for lunch once a week and we take a company trip every quarter. Last quarter we all went to Costa Rica and it was awesome!

Write Job Descriptions and Review Them Quarterly
I’d be willing to bet that 80% of employees don’t have job descriptions or haven’t reviewed them since they got hired. Revisiting job descriptions every quarter allows you to talk to your employees about their goals, strengths and challenges they face. It also clarifies who is responsible for what, which in many companies isn’t very clear at all.
Set Quarterly and Weekly Goals
At The Outsourcing Company we have a whiteboard with our goals for the quarter. And every week we set goals for the following week. We always ask ourselves, “what can I do next week to move toward our quarterly goals?” Posting these goals on a wall everyone can see helps your team stay accountable and help each other accomplish their goals.
Empower Your Employees
I used to be the worst kind of boss: a micromanager. This is because I’m a very obsessive person and a perfectionist. I made my employees very miserable by being on top of them all the time telling them how they could do things better.
The reality is that most business owners tend to be pretty smart. And when you’re smart, you find better ways of doing things. The problem with improving everything around you is that most things aren’t priorities and getting lost in details isn’t the best use of your time. A great boss gives their employees direction and lets them figure things out. That way, you can focus on the big picture-stuff: the strategic decisions that only you can make.
Lead with the Example
As a leader your goal is to inspire your team, and there’s no better way to inspire than doing what you ask others to do for you. As a leader you need to work hard and always do the right thing.
Build Systems
I wish I had started building systems for The Outsourcing Company from day one, but that wasn’t the case. When it’s just you, you rely on your memory a lot. You know where your files are, how to run certain processes and how to find everything you need. But when you hire employees, they can’t read your mind. You need to have everything documented. Writing step-by-step tutorials of every process in your company is one of the most important things you can do for your business.
Be Honest (But in a Nice Way)
Being honest with your employees is very important. If you aren’t happy about something, they need to know about it. That being said, there are many ways to say things. Saying things tactfully is crucial to being a great boss. Especially because most bosses like it when others just give us the facts without sugar-coating them. But most employees are not like this and you can really hurt their feelings if you don’t say things in a way that sounds like positive feedback instead of negative criticism. Here are some tips I learned the hard way:

  • Use positive statements. Instead of saying “you screwed up this report”, say “here are some thing you can do to make this report better.”
  • Don’t always assume your employees are wrong; check your facts first. I can’t tell you how many times I sent an employee an angry email and then found out it wasn’t their fault (and most of those times it was actually my fault.) Don’t assume anything; go to them with questions, not accusations.
  • Praise your employees in public, but criticize in private. Better yet, don’t criticize, but explain to your employees how they can do it better next time.
  • Have difficult conversations in person, not by email.

Have Realistic Expectations
The most difficult challenge for me is having realistic expectations with my employees. I sometimes expect them to be robots and get everything right 100% of the time. But when I’m honest, I screw things up at least 5% of the time, so what gives me the right to be mad at them for being human, too?
Hire Slow, Fire Fast
Part of being a great boss is firing people who aren’t good at what they do, aren’t ethical or aren’t team players. You need to fire these people fast. This is easier said than done, especially if you’re a nice guy or gal like I believe I am. But it has to be done (for the sake of your company and all the other employees in it).
If you’re on the fence about firing someone, ask yourself this question: “If this person told me today she wants to quit, would I do everything in my power to keep her on board?” If the answer is “no”, you subconsciously want that person gone. You just need to find the guts to do it.
Now let me ask you: what else do you think makes a great manager great?