Strive Masiyiwa: building an efficient organization – Part 3


__Always pay your workers first.

You can’t call yourself an entrepreneur if you have the habit of not paying your workers on time, erratically, or not at all. Real business leaders always pay their employees first. Let’s call it the first law of entrepreneurship.

Let’s talk.

I began my business career as a construction contractor more than 30 years ago. My business entailed getting construction contracts, some which took several years to complete. I would sometimes have thousands of people working on my projects. 90% of my people were paid on a weekly basis. It was almost a ritual, whereby we’d go to the bank on Friday morning to collect the “payroll.”

Each worker was paid in cash, and we would sit and pack the money into little brown envelopes, after deducting taxes. We’d then travel to the sites and pay them their money.

I never ever missed a payroll… except once, and it probably saved my life. I was abducted from my office at gun point on one of my payroll days. The person who raised the alarm that I was missing said this: “We know something has happened to him because he didn’t come to supervise the release of this week’s payroll.”

# If you owe your workers money, you’re not yet an entrepreneur.

The second law of successful entrepreneurship is this: If, for any reason, you’re going to miss your payroll, you must always make sure the lowest paid workers are the first to get paid — not the managers and others you deem most skilled.

# Always pay the lowest paid workers first. They’re the most vulnerable.

If we didn’t have enough money to meet our payroll, I spoke to my senior people and asked them to make the sacrifice. It also meant I myself would go home with nothing. But workers like cleaners, laborers (we had a lot of these in the construction business), drivers etc., were always paid first. This always included the youngest people in our business.

If you want to go far as an entrepreneur, treat workers’ salaries and wages as sacrosanct. If you see a big man who has lots of cars, a big house, goes on holiday overseas but is in arrears on salaries and wages, he’s really not an entrepreneur.

Don’t be fooled, he’s not a big man at all! True entrepreneurs pay their people on time, all the time. And they take care of the most vulnerable members of their organizations first. I’d rather someone called me a successful entrepreneur on the basis that I never missed my payroll, than on the basis that I made a billion dollars.

Now to help avoid such a crisis, there’s one thing you must learn to do straight away in your business, and that’s manage your cash flow… your “accounts receivable” (sales) and your “accounts payable” (expenses). If you don’t keep track of your cash flow, I guarantee at the end of some months, you’ll have a shortfall.

If you haven’t already done so, put together a cash flow budget, with a few different scenarios (best case, worst case, different assumptions). You can’t predict everything, of course, and surprises happen, but do your best with what you know now. Cash in? Cash out? Timing? Enough cash to meet payroll? (This is a complicated subject but we’re just talking about payroll here.)

A few years ago there was an article in Forbes’ magazine called “Success will come and go, but integrity is forever.” Never forget that. Most all businesses have legal and contractual obligations which you must respect. But there are also moral obligations to consider… Do you know the difference?


To be Continued…


9 thoughts on “Strive Masiyiwa: building an efficient organization – Part 3”

  1. This guide sounds perfect, we have to suggest it to some of our friends. When you say pay the lowest paid workers first you are right, because it’s important to have the control of those vulnerable people.
    You have 30 years of experience it’s important!


  2. Really nice blog on advice about effective management! I wish i was in the position to be able to practice some of these points, but i don’t own my own company just yet! Seems like you have it all worked out! thanks for sharing


  3. I think it is a must to pay your workers on time, like literally on time. Let’s face it, salaries makes somehow uplifts your workers moral and work attitude, and if you can give it ahead of schedule, then that’s better. You’ll be amazed about the result it will give you.



  4. Oh wow I can’t belive you were robbed at gunpoint! I take it everything worked out in the end? Sorry to hear you went through the a but yes you’re so right. To value and appreciate your staff should be top of the lost for any entrepreneur. Without good quality staff, you have no business. Ree Love30


  5. Wow, this is an impressive story. Robbed at gunpoint? That’s though. Glad someone was there to raise an alarm. The message in this story is great. I liked it there’s put so much thought in paying people for the work and the consequences for them in being late. Good lesson.


  6. That is a good one. I am really glad that you stressed on the part of paying the lowest paid workers. It is very important to take care of these small things which usually people tend to ignore.


  7. Very good article on business management. These lessons are really important for young aspiring entrepreneurs.


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