People Are the Most Important Asset in Business Especially for Small Businesses

#PeopleFirstLeadership #SmallBusinessStrategy #ServantLeadership

#EmployeeEngagement #EOSWorldwide #TalentRetention #BusinessTraction

#CultureIsStrategy #PeopleCentricLeadership #Entrepreneurs

Source: AI Generated via ChatGPT+

As a business executive, entrepreneur, and advocate for servant leadership, I firmly believe that people—not products, technology, or capital—are the most valuable resource in any

organization; yes, any organization regardless of size or industry – regardless of anything.

However, this is especially true and amplified in small business. For purposes of this discussion, we will define small business as ones with fewer than 100 employees, where everyone’s contribution has a magnified impact on success. Take it one step further to a micro business where the number of employees can be significantly below 50 or even 25. As the number of employees goes below 100 and approaches 50, then 25, then lower, I think of an exponential increase on the importance of people, the effectiveness of a servant leader, and the opportunity to elevate personal and professional trajectories. Many of you know me and are aware of my unwavering passion for a people-first leadership style and the EOS® (www.eosworldwide.com) framework for small business. In my experience for the small business, People and Traction are the two of six key components of EOS that stand above the rest for obvious reasons – people are the most important asset in the business and the people execute; the people get traction. Enough of my experience, my perspective. Let us listen to data. Below are the top four reasons, backed by research and data1, why people are the ultimate competitive advantage and the most important

asset in business.

"Employees who feel valued; create value." – Chad Ruwe

Human Capital Drives Innovation and Competitive Advantage

• According to McKinsey2, 84% of executives believe innovation is critical to growth, yet

only 6% are satisfied with their innovation performance—highlighting the need for

empowered, creative employees. In smaller firms, innovation is not just about R&D.

Likely, it is not about the R&D budget at all!— it is about agility, the “pivot.”

Employees in close-knit teams often wear multiple hats, allowing for faster problems olving

and adaptability. A study by the National Bureau of Economic Research found

small businesses with highly engaged employees were 21% more profitable due to their

ability to pivot quickly.

Employee Engagement Directly Correlates with Profitability

• Gallup’s State of the Global Workplace report reveals businesses with highly engaged

teams experience 23% higher profitability and 10% higher customer loyalty.

• A MIT Sloan study found that companies with strong employee-centric cultures had four

times higher profit growth than those without. For small businesses, disengagement is far

costlier. With fewer employees, each person’s morale and productivity significantly

influence overall performance. An employee can be the strongest link in the chain one

day and the next the weakest link. A Forbes study showed that small businesses with

high engagement had 41% lower absenteeism and 59% less turnover, directly preserving

profitability.

Customer Satisfaction is a Direct Reflection of Employee Satisfaction

• The Service Profit Chain Model (Heskett, Sasser, Schlesinger) proves that happy

employees lead to happy customers, which drives revenue. Companies in the top quartile

for employee engagement see 20% higher sales.

• Bain & Company found employees who feel valued are 50% more likely to exceed

customer expectations. My own experience is witnessing successful entrepreneurial

owners and leaders validates these two points and are foundational to my opening quote,

“Employees who feel valued; create value.” This value is in the sales channel resulting in

the business being “front-of-mind” with the customer when the customer is looking for a

supplier with which to collaborate. Of course, in small businesses, employees often

interact directly with customers. A Small Business Trends report found businesses with strong employee-customer relationships see repeat customer rates 50% higher than

competitors.

Talent Retention Reduces Costs and Builds Institutional Knowledge

• The Work Institute estimates replacing an employee costs 33% of their annual salary—a

major burden for small businesses not to mention a micro business.

• Deloitte research shows companies with strong continuous learning cultures have 30-50%

higher retention rates. Small businesses typically have small teams, losing even one key

employee can disrupt the business significantly. A LinkedIn study found 45% of small

businesses struggle with turnover, but those investing

Summary

• People drive innovation—especially in small businesses where agility is critical.

• Engaged employees = higher profits—small businesses see disproportionate gains from

engagement.

• Happy employees create happy customers—direct interactions amplify impact.

Challenge for Leaders / Small Business Owners:

• Do you truly invest in your people as your #1 asset?

• Are you fostering a culture where employees feel valued, heard, and developed?

Your business is only as strong as its people. For small and micro businesses, this truth is nonnegotiable— prioritizing your leadership team and your employees is not just good leadership; it is the smartest business strategy. Your first step is to be present, engage your employees where they are and on what they are doing – be prepared to ask questions and listen. Your learning will be immense.