Stop Managing Employees, Start Creating Leaders

Small- to medium-sized businesses are often stuck in an endless loop of hiring and managing “employees,” which can hold back growth and success. What’s needed isn’t more people; it’s more leaders. Why did I put employees in quotes? It’s been on the rise lately: managers, owners, and companies all say they need employees but can’t find good workers. If this is the case in your company, this article may be for you.

The business world has changed drastically during the last decade. Now, instant gratification and likeability are the names of the game. If you’re skeptical, ask anyone under 35 if they get a dopamine rush from Instagram likes or TikTok followers. Chances are the answer is yes. This shift impacts everything, including the job market. Employees today aren’t satisfied with just a paycheck; they’re looking for validation, purpose, and growth. For businesses struggling to keep top talent, motivate the mediocre, or grow, it’s time to shift the mindset.

Let me explain why as I share a story that changed my thoughts about leadership.

The Trap of Treating People Like “Just an Employee”

Over the years, I’ve seen plenty of talented, hardworking people stuck in a cycle of job-hopping. These aren’t slackers or complainers. They’re folks who genuinely want to succeed and help their companies thrive. The problem? Too often, they’re treated like cogs in a machine. They’re given tasks but not trust. They’re told what to do but aren’t invited to share their ideas. They’re “just employees,” not leaders.

If companies don’t shift this dynamic, they’ll continue with a revolving door of employees and a never-ending “Help Wanted” sign on the door. The role of small business owners and managers is to lead, inspire, and create an environment where people feel valued and empowered.

A Leadership Lesson I’ll Never Forget

I worked for more than 17 years in retail management. During that time, I had a regional manager who, quite frankly, wasn’t my favorite person. But one particular interaction with him left a lasting impression.

After pulling an all-nighter to unload trucks and restock a big box store for the next day’s opening, I was met by the manager, who showed up an hour before the doors opened. For the next hour, we walked the floor as he pointed out everything wrong, including items out of place, displays not up to the corporate planogram, and minor oversights. When we finished, he said he had to rush to another store.

Frustrated, I stopped him before he left. I had to know: “Why don’t you ever mention the things I’ve done well? All you ever focus on are the mistakes.” His response: “If I don’t spend much time here, you’re doing great overall. My job is to focus on what needs fixing.” I understood his perspective, but it left me feeling unappreciated.

Over time, I realized his approach might have been efficient, but it wasn’t practical. People need to hear that they’re doing well. Without positive reinforcement, they’ll either settle for mediocrity while searching for a new job or leave altogether.

The Power of Positive Leadership

Being a leader means more than correcting mistakes; it inspires greatness. For employees to feel empowered to contribute, they need to feel valued. Managers who only address what’s wrong miss an opportunity to build trust and loyalty.

Here’s the good news: small changes in how managers interact with their teams can make a huge difference. Let me summarize this into a simple “Do and Don’t” list.

Do Build Leaders (Not Just Employees)

1. Praise publicly. Recognize good work in front of the team. A little public acknowledgment can go a long way.
2. Involve them in decisions. Start with small choices, then work up to bigger ones. This shows you trust their judgment and value their input.
3. Invest in their growth. Ask employees what they need to grow personally and professionally and how you can support them. Sometimes, working toward a different position or role within the organization is vital to them, so explore this and help them achieve it. Other times, they want to know that someone cares about them enough to show an interest.
4. Hold regular check-ins. Performance reviews shouldn’t be one-sided. Ask, “What can I do better as a leader?” This shows humility and a willingness to grow alongside them.

Don’t Make These Common Leadership Mistakes

1. Don’t assume money is the only motivator. For some employees, flexibility, vacation time, or opportunities to learn new skills might matter more than money.
2. Don’t punish mistakes harshly. Instead of treating mistakes as failures, view them as opportunities to learn and improve together.
3. Don’t blame the economy or the company. If you need to make tough decisions, explain the thought process behind them and show empathy for how they might impact your team.
4. Don’t correct or discipline publicly. Handle conflict and feedback behind closed doors, where employees feel safe to speak openly.

A Final Thought: Lead to Inspire

At the end of the day, most hardworking people want the same things: to provide for themselves and their families, to feel valued, and to enjoy their work without constant stress. When managers focus on creating leaders instead of just managing employees, they will not only improve the business—they will build a culture where people want to stay and grow.