Doug Butler | Crain's Connecticut

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Doug Butler


Reward Gateway is an employee engagement platform that offers tools for employee communication, recognition, wellbeing, surveys and perks. The company has offices in seven countries, and recently opened a new office in Boston overlooking Boston Common. Its dedicated event space will be open to clients as well as technology, communications, and human resources communities in Greater Boston to host meet-ups and other events. 

The Mistake

My mistake was not valuing human resources as a strategic business asset.

We’re in the HR business, and our business mission is to make the world a better place to work. To look back on my history with HR is embarrassing. As a chief financial officer at three different companies, HR reported to me. But I used to think HR was simply an administrative function to keep employees in line.

In my last business I was one of the founders. We built up the company over seven years and were successful, growing it from nothing to a $125 million business with 250 employees. We eventually sold it for $675 million. But for the first four years there was no one in charge of HR. That function and other administrative aspects were managed by our controller, and our lawyer dealt with any legal HR issues.

After about four or five years I said, "We need an HR professional." So we hired someone and purposely gave them the title of senior manager. By hiring a manager instead of a director, it was indicative of my view of HR as a junior, less strategic function.

We tried to sell the company after five years, but we didn’t get the price we wanted so it didn’t happen. At that point we realized we’d have to run this business for awhile, and we had to start doing things to manage the business long-term and develop long-term strategies.

Once our HR manager came on, she took over and did a big job on the administrative side and fixed the infrastructure of HR for us. Over time she started coming to us with things that in the old days I would call the “softer” things but which I now recognize are strategic things. She started talking more about employees, culture, a mission statement, company values, and how to instill those values in the business. We started to think a lot more about career development and job design. Eventually the HR manager became the HR director, and as the business matured I started to view HR in a more strategic manner.

It’s your people that are going to push the business forward.

The Lesson:

Human resources should be at the table when you’re building strategy in a business. I used to think that the job of HR was to keep employees in line, but now I’m positive that the job of HR is to keep the business and its employees aligned.

As you’re pushing the business forward and you think about products, you need to remember that the people in the business are critical—it’s your people that are going to push the business forward really quickly. The organization in your business that manages and coordinates the people is HR. It’s about alignment and keeping your employees growing in the same direction as your business, and HR is a hugely valuable component of that.

If you don’t communicate and work through HR to build a bond with employees, you get an “us” and “them” culture—I’ve seen it happen at each company I’ve worked for. Senior management and executives can be the “us” and employees can feel like “them.”

It’s not always “us” versus “them,” but sometimes employees don’t trust management, and they may feel that the rules are different for “them.” It’s important to communicate and be as open and honest as you can, as many times as you can, so that employees trust that when you tell them something, you’re telling the truth. Even when it has to do with why you fired someone. If you fired someone for a bad reason, let that person know why you fired them as best as you can.

If you let that “us” and “them” culture develop, it’s counterproductive. It’s all about performing your business at the highest level, and in order to do that you need to have everybody aligned and growing in the same direction. 

Follow Reward Gateway on Twitter at @RewardGateway.

Photo courtesy of Reward Gateway

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