Business Record - Iowa Biz

Is Your Contingency Plan In Order?

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The economy is struggling, a vital customer quits ordering, you loose a key employee, or a natural disaster strikes – is your business ready for these types of scenarios?  Great businesses answer YES and they may even be offended if someone asks.  

The reality is that most businesses have not given the time to create a contingency plan.  Why? Below is short list of reasons:

• Business is thriving

• It requires discussion on tough issues that typically are avoided

• It takes too much time

• We are rock solid and do not have to worry

• Poor management

Contingency planning is equally as important as your annual business plan or your strategic plan.  Remember that you have a group of employees, owners and their families counting on the fact that business survival means their own survival.

Without a contingency plan, recovery from a tough situation becomes difficult and may lead to the death of the business.  Gather your key people, talk about the issues that could drastically impact your business and create a plan to cope with the issues.  Contingency planning should be a part of sales, profit and stock growth planning. 

Do not wait for the storm to happen, make sure you are equipped and ready when the storm arrives!

Victor Aspengren

Do Not Be A Fool - Take Your Time Off!

I just returned from a week long vacation in the Boundary Waters of Northern Minnesota.  Complete isolation - no phone and no computer - and a lot of free time to ponder life (in between the paddling and portages).

I find it extremely odd that to this day, I still know people who actually lose vacation because they do not take it.  Absolutely absurd!  The typical answers - they can not get away, to much work when they get back, and the company really frowns on long vacations.

Highly developed company cultures encourage and even force their employees to take the vacation they have earned.  Why?  During an extended vacation (no less than one week) people tend to come back with one of two attitudes - they have recharged and are ready to get back into the fray or they have realized that their current work situation is not meeting their needs and make a decision to move on.

The first attitude is easy for companies to accept. The second, well that is a different story.  Far to many organizations fear the second attitude and that is why they frown on extended vacations.  They would rather keep an unsatisfied employee than go through the work of finding a replacement or even more exasperating, they fear the challenge of creating a culture where people do not want to leave.

I say give vacation, make employees take their earned vacation, and celebrate when your employees make a choice to leave and better themselves.  Quit being selfish and bitter, and support the growth of your people.  We all need to take time to drive down the road and see what is out there!

The Perfect Time For Training

If you want your company to be ready for the upswing in the economy, then start with training your people.  This is a perfect time for training.  You have the time so make the investment.

It is far to easy to get caught up in the short term thinking of slashing, cutting back and maximizing short-term profits.  Break the cycle and think long term.  It it your people that will create the long term value for your company.

Studies show that the educational and training variable is the best predictor of a company's success.  This should not surprise you since we are in a knowledge economy.  Training your employees builds knowledge and the use of that knowledge.  Another buy product of training is employee engagement, which is another significant predictor of company success.

Training should be a regular agenda item at your management meetings and a part of the strategic plan for your company.  By being proactive towards training and having a plan that is actually implemented, you will reduce the risk that your training dollars will be squandered on ineffective efforts. 

Real Ownerhsip or Psychic Ownership: What Works?

There is a lot of interest in sharing ownership with the employees of a company.  The belief is that sharing ownership increases the performance of a company.  I say maybe.

Why?  I believe that there has to be a high level of psychic ownership that goes hand in hand with real ownership.  Even better, the psychic ownership should precede the act of real ownership.

You can call an employee an owner, but if they have no means to give input, never see their input influence the company, do not understand the finances of the company, and have no idea how the ownership value in increased - it is a dead end street.

There are many companies where the employees have strong psychic ownership.  If you were to visit one, you would swear that they were owners.  The world of business forgets far to easily that the power of the mind and emotions will dominate the "facts".  Employees have to believe and feel they are owners before real ownership can make a difference. 

This is a current debate in the employee ownership world.  To see more on the debate go to this Linkedin discussion.

Trust: Is it Broken in Your company?

Trust is something that we cherish and work hard to maintain in our personal lives.  Once trust is broken, it is very hard for a relationship to go back to the way it was before.  If it does get broken, we look to ministers, close friends, marriage counselors and psychologists to help us get through this violation of trust.  Trust is evaluated on a daily basis.

In business, we violate trust like eating candy, and this was before the financial meltdown that we are living through right now.  I believe that trust in business has never been so low.

There has been a steady stream of examples where we have lost trust - the stock market, banks, the auto industry, executive compensation, spending tax payers money on parties, financial consultants and identity theft.  Adding a little icing to this broken-trust cake, is the fact that millions of American workers have been laid off with little or no warning and with total disregard to the value they have produced in the past.  Then we all sit and wonder how could this happen.

It is easy to point the finger at executives, supervisors, board of directors and many others to why trust is broken.  The problem is that we do not point the finger at ourselves.  Trust is built one relationship at a time and then roles up into organizational trust.  Please understand that I totally agree that those who have power have a higher responsibility to maintain trust, but it does not give those who do have power a free pass to violate the trust.

If the business world spent 1/100th of the effort on building trust like we do at home, we would see a dramatic change in this world.  Trust comes from faith and right now we all need to have faith in each other if we want to change the world for the better. 

What Is Your Brand?

This may well be a topic that a marketing guy like Drew McLellan would cover.  So you may be asking why a culture/ESOP guy is talking about brands?

Because today a brand is truly only as strong as the culture it represents.  In today's world, people look at brands as an experience.  With quick access to information, consumers can quickly determine brands that are not true to form. 

People will quit buying a product if they sense hypocrisy and deceit.  A company may have a great product, but consumers quickly notice how companies treat their employees or how the owners or CEOs represent the brand. Do unplanned layoffs and super sized bonuses ring any bells!

The brands that will survive this economic downturn will be those where the culture fully supports and reflects the brand.  There are a host of brand "items" that all you have to do is replace brand with culture, and you have a great list of how to enhance your company's culture. 

A strong brand breeds loyalty by consumers and employees.  It is not just a mark or saying that people follow blindly like a bunch of sheep.  A strong brand represents something that employees and consumers internalize and it becomes part of their belief system.  When people truly believe, they will endure.

A Formula For Organizational Change

Organizational change is not a simple process and requires a lot of thought and resources. Time and time again change initiatives fail for a variety of reasons. Just imagine if there was simple formula you could follow that would guarantee success.

Well believe it or not there is a formula that has been developed that can increase your chance of success when implementing change. The basic formula is from the work of Richard Beckhard & David Gleicher. The formula is Dissatisfaction x Vision x First Steps > Resistance to Change or DxVxF>R. 

Meaning that if D, V or F have a zero value you are doomed to failure (you will need to remember your math). There is a new twist to the formula that has surfaced that adds Trust or T. The new formula is DxVxFxT>R.  I agree that the addition of trust to this formula does improve the accuracy of this formula.

If you are looking at implementing change, I would encourage you to take a long and deep look at your organization and how it stacks up to the components of the formula. Spending the time to evaluate, measure and discuss these components will help your change initiative go much smoother.

Do Not Forget The Fun

Yes, times are tough and everyone is focused on the bottom line.  I would suggest that maybe it is time to have a little fun - cut loose and let the hair down.

I am sure you have seen several movies where the battle is coming, but the night before the battle the heroes sing aloud or indulge in some type of party.  They know that it is going to be a tough road, but they still celebrate the human spirit with hope and laughter.

I believe that many companies forget that balance is an extremely important part of managing a company's culture.  Any time we spend too much time at the extremes (good times or bad times) balance is lost.  We get greedy with the good times and cynical with the bad times.  Either way, our focus is polluted and it can lead us down a dangerous path.

Maybe the ultra cynical think the world is ending, but I believe we are in natural adjustment.  Times are tough, but we will cycle out of them and see prosperity once again.  So plan some fun within your company - a party, some humor, perform a good deed for someone else, something that gets your employees focused on the good side of life.  I think we have spent enough time on the dark side!

A Great Way To Get Educated

I have discussed open book management and employee ownership as a means to improve bottom line performance and enhance company cultures.  At this time of the year, there are several national conferences that provide a huge learning opportunity for those of you considering open book management or employee ownership.

These conferences are some of the best deals you can find on educating yourself before you spend additional dollars on professional fees or consulting.  All three conferences utilize experts in the field, but one of the best values is that you will hear the real life stories of companies from the people themselves. 

These conferences also allow ample opportunity for you to network with your peers and pick their brains on what they did well and mistakes they have made.  This kind of value is not always easy to come by.  I have personally attended all three of these annual conferences and it is well worth the value.

The information for the conferences is as follows:

• NCEO (National Center for Employee Ownership) Annual Conference, April 22-24, Portland, OR
• National Gathering of Games (Great Game of Business), May 6-8, St. Louis, MO
• National ESOP Association Annual Conference, May 6-7, Washington D.C.   

Make the investment of time and resources today - you will not be disappointed.

The Power of Input

                                              The company had always given everyone break food every morning.  Wonderful, homemade goodies that were delicious and not necessarily healthy.

The company became employee owned and asked the new employee owners to start thinking like owners.  One day the question was asked "How much do we spend on break food every year?"  The answer was $10,000.

After a few days it was brought forth by the employee owners that maybe the money should be spent on dental insurance instead of break food.  The research was done and it was announced that dental insurance would cost $12,000 per year.

In short order a company meeting was held to decide what to do.  It was agreed that a vote would be held, one vote for one person, and that the majority vote would decide - dental insurance or break food.  It was explained that if voting on issue was to work, if you were not in the majority you could not throw stones and complain about it.  People raised their hands in agreement.

So a vote was called for by a show of hands.  The results - I will let you think it through.  After the vote one employee owner came to the CEO and said "I am not happy with the outcome, but at least I got to vote!"

The moral of the story - give people the chance for input and they will be more accepting of the decisions that are made and help you improve the bottom line.