Business Record - Iowa Biz

Candor is critical

The new economy has forced companies to become more efficient in how they conduct their business. Companies that fought the implementation of lean, six-sigma, open book management, and other business improvement processes in the past, dropped their fears and moved forward with these processes to survive.

One aspect of lean that is often overlooked is candor. The practice of candor allows concerns, issues, and new ideas to be addressed much quicker. If candor is a priority in a company, it reduces the vast of amount of wasted energy that goes into the rehashing of issues that everyone knows about, but no one wants to deal with. Candor can bring to light many of the drags on profitability that are present in a company.

Candor in its highest form is supported by high levels of trust and the application of tact. Communication is rarely a black and white issue and many people fall into the trap of practicing candor with a black and white mindset. Trust and tact are essential in navigating the gray area of communication.

Candor is critical to improving your bottom line, relationships, and culture.

- Victor Aspengren

Upcoming employee ownership events

2012 will be a big year when it comes to the number of businesses that will experience a transition in ownership. The driving factors are the rebound in business values and the potential threat of increased capital gains in 2013.

This spring offers a multitude of conferences that explore how to drive value and strategies for transitioning a business. The following is list of conferences that any business owner that is thinking of selling their business should consider attending:

National Center for Employee Ownership Annual Conference, April 25-27, 2012 Minneapolis, MN

The Annual Confernce on Open-Book Management, May 9-11, 2012 St. Louis, MO

ESOP Association Annual Conference, May 10-11, 2012 Washington D.C.

National Worker Cooperative Conference, June 22-24, 2012 Boston, MA

To get more details just click on the link for each conference. All of these conferences are well run and have occurred for multiple years.

- Victor Aspengren

The cost of delays

As I sit in an airport and patiently wait for a delayed plane, it brings to mind the cost that is paid for delays in dealing with important issues. Specifically, those delays that impact the culture of your organization.

The key delay that impacts a company's culture is the tough conversation that needs to be held with key leaders. The problem is there, everyone is aware of it, but as the CEO or owner, you procrastinate due to loyalty, fear, and the potential repercussions that could arise - hoping that the problem will correct itself and you can avoid an uncomfortable situation.

The cost of not having this conversation is not easy to measure, but it is significant. Think of it this way - the good of the one vs. the good of the whole. One person working at 80% efficiency is tolerable, but if a key leader creates 80% efficiency in those they lead...it really is an easy answer.

Being patient and allowing time to pass can be a wonderful tool in correcting problems, but there is a fine line between success and failure. If you have the ear of your employees, they will let you know when the time is right. Take a deep breath, accept what is in front of you, and move forward.

My delay just ended, what about yours?

- Victor Aspengren

The holiday bonus

It is the time of year when many employees receive a year end or Christmas bonus. The bonus comes at a time when employees can use the extra cash for the holiday season. The sad thing about these bonuses is that in many cases they are given even if the business lost money for the year or has to borrow on their credit line to pay for it.

Giving a bonus to employees under these circumstances...it would be better served to go to a homeless shelter or someone truly in need. This type of bonus creates an entitlement culture and does little to engage the employee in the success of the business. It can also feed the frustration of owners and leaders that their employees do not care. The fact that the bonus is "free" creates a plethora of on going challenges.

Bonuses should be self funded. They should be based on goals that improve the performance of the company and therefore increase the bonus opportunity for the employees, which also leads to higher returns for the owners. This can create psychic ownership in employees and improve their level of engagement.

Think of it this way. How many people wash their rental car before they return it? A free bonus increase the chances of the Scrooge emerging in everyone. Increase the holiday joy by giving employees bonuses that are earned.

- Victor Aspengren

Flickr photo by bjosefowicz

Your name - a powerful tool

Do you remember the names of new people you meet? Many people struggle with remembering names. It is not easy and it takes effort to consciously make a place in your mind for a new name. In a social setting the consequences of not remembering a name are minimal. In a company or business setting the consequences can be dire.

Do you know the names of the employees in your company? Obviously if you have thousands of employees it would be a rare leader that would know all the names. Just as obvious, you would expect leaders in companies of say less than 150 employees to know the names of their employees. The sad reality is that many leaders do not know the names of their employees and there may only be 25 or 50 employees.

If you are one of these types of leaders, corrective steps should be taken. The symbolism and impact of knowing an employee's name is critical to creating an engaged employee and building a high performance culture. If names are not important, then the culture that the leader believes they have will be disconnected from the real culture that exists for the employees.

Leaders have a higher expectation put on them, but knowing names is equally important to all employees in an organization. Knowing a person's name is a sign of respect and genuine interest. A key ingredient in a high performing culture.

Stop the "Hey you" statements, blank stares, and lack of interest - remember the name.

- Victor Aspengren

The sacrifice of leadership

Leading a company of engaged employees requires sacrifice. For many leaders it is all about them, and what they will gain or what their immediate team may gain.

Article after article is written about the lack of engagement in the workforce today and the grotesque behaviors of leaders. These leaders have no concept of sacrifice and how their employees view this lack of sacrifice.

Sacrifice can and in some cases will be painful, be it physical or psychological. Enlightened leaders are prepared and step up to the sacrifices that may be required to support the organization. Here is a short list of leadership sacrifices examples:

• First one to work, last one to leave
• Spending the time to console an employee in need
• Taking the pay cut in hard times
• Filling in for a critical position when needed
• Attending weddings and funerals
• Admitting their mistakes
• Laughing at themselves

Sacrifice requires leaders to be confident in themselves and the people they lead. The saying "The more you give the more you get" holds true for leaders that understand the power of sacrifice.

- Victor Aspengren

Square peg, round hole

There are many owners, leaders, and employees that are viewed as a square peg in their organizations. The square pegs have no definitive profile other than the fact of being the square peg. The plain and simple fact is that they are just not a great fit for the organization (round hole).

There are instances where individuals know fully well that they will not fit or do not fit. These situations are typically driven by the need of the job vs. the want of the job. They can be good or bad employees, but they will never be the engaged, productive employee that organizations dream of.

The vast majority of people that are considered square pegs have been put into a position that does not fit their profile, they may not have the skills, and in many cases it is a failure of those in power to make a tough decision. The people in these situations are the victims of poor decision making by organizations, leaders, and managers.

The saddest situation is where newly hired employees are a square peg from day one, but they have no idea themselves. The lack of a rigorous hiring process, the "selling" of the organization to the employee, and the focus on skills vs. fit, create organizations full of square pegs.

Organizations need to recognize if they are guilty of practicing the square peg syndrome then they need to take immediate action to correct it.  This also applies to those individuals that know they are square peg, correct it.  Round peg, round hole - it truly does make a wonderful fit.

- Victor Aspengren

Flickr photo by danstorey14

The power of perspective

Image via Wikipedia

One of the issues faced by long time employees is the loss of perspective.  

As the blinders of time narrow an employee's  perspective, they can easily get caught in the trap of  "the grass is always greener on the other side"  syndrome.  If this syndrome is left unchecked, they can become an organizational cynic.

Organizations that understand this maintain a robust training and education program to combat the loss of perspective. Exposing employees to new ideas and thoughts gives them an opportunity to view their work, themselves, and the organization in a different light.

Another tactic is to have a formal cross training program or job shadowing program.  Exposing employees to what others have to cope with in their daily routine can provide a new perspective.

A compelling and unique tool that some companies have implemented is a sabbatical program for long time employees.  This allows a longer and more intense period for employees to gain new perspective. 

These are just a few of the methods to keep the grass greener at work for employees.

- Victor Aspengren

Culture still counts

The topic of how culture can improve financial performance is becoming more prevalent as companies look for ways to compete in the new economic environment.

There is a company that has made culture a priority for over 40 years - Southwest Airlines.  Not only has it been a priority, it has lead to 38 straight years of profitability in the airline industry, which is amazing.

How do they do it?  I was on a Southwest Airline flight yesterday and picked up their magazine Spirit.  The first article in the magazine was by their leader Gary Kelly and it was titled "The Importance of Culture".  It struck me that companies that understand the impact of culture have leaders that walk the talk - Herb Keller, Colleen Barrett, and now Gary Kelly.

Shortly after reading the article an announcement was made looking for a passenger on the plane.  A four year old girl raised her hand and the attendant announced that this was her first airline flight and would everyone give her a round of applause - which everyone did.  He then proceeded to hand her a certificate for her achievement.  It does not take a genius to figure out why Southwest Airlines has had 38 straight years of profitability.

What kind of culture do you have at your company? If asked, would one of your employees raise their hand and would the rest of the team applaud?  If an attendant on an airplane can get a bunch of strangers to applaud someone they do not even know, then leaders should not be afraid to engage their employees and improve their company's culture and profitability.

- Victor Aspengren

Flickr photo by GirlieErin

The CYA culture

Would you want anyone to copy the culture at your company?  In our high stress, high speed world there is a strong prevalence for many companies to adopt a CYA culture -  Cover Your A..s

There are files on computers, desks, home, and in safes where employees are keeping what they hope is a get out of jail free document.

The email or document that will allow them to save face, get back at the boss, or potentially save their job.  Hours upon hours of wasted time is spent on creating and maintaining these files.  What a waste of energy!

The CYA culture is rife with a lack of leadership, clear direction, trust, and respect.  Business is tough today. So why are there so many CYA cultures out there? 

Because it takes a tremendous amount of energy and far to many company leaders will not make the sacrifice to eliminate causes of a CYA culture. If you are one of the millions of employees that live in this type of company culture, a change may be in order.

There is a limited amount of energy each of has to give to life - do not waste it giving it to a CYA company.

- Victor Aspengren

United we stand

Leadership in many cases is a team effort - it can be the board of directors, management group, company division, or a special projects group. One of the reasons that great leadership comes from a team atmosphere is that better decisions will be made.

Groups make better decisions and they can make them just as fast as individuals - follow this link for more. That being said, many times a group makes a decision and then the decision is sabotaged by a member of the decision making group.

A key ingredient in group leadership is that the group fully supports the decision once it has been made.  When individuals of the group "talk behind the back" or say "I never really agreed", this is a sign of poor group decision making. This also confuses those who will be impacted by the groups decision.

Groups make better decisions, but make sure that the processes and expectations for how the group makes decisions and supports them are very clear. Otherwise, your culture will drown in apathy.

- Victor Aspengren

 

10,000 Hours

It is a common discussion by leaders in employee-owned companies that employee owners do not appreciate what ownership gives them, they do not act like owners, and they will never understand employee ownership. 

In the book Outliers, Malcom Gladwell suggests that to gain perfection in an activity, an individual must spend 10,000 hours practicing it. He gives examples of Bill Gates, Tiger Woods and others, where the data supports this thinking. Mr. Gladwell clearly articulates this is not the only factor that leads to perfection of an activity, but it is an important one.

Taking this thought, and applying it to the scenario stated earlier about employee ownership, it makes sense why leaders get frustrated. How many employees or leaders have spent 10,000 hours practicing being an owner in a company? Here in lies a fundamental issue that many leaders and employee owners overlook. 

Every company has its own set of expected behaviors and attitudes that surround employee ownership. The issue is that when, where and how can 10,000 hours of practice occur in an organization? 

The key is to start today. Practice through training, company meetings, sharing financial information and defining the behaviors that are expected from all employee owners. Do not let excuses get in the way. Start small - 10 hours, then 100, a 1,000.

If 10,000 hours of practice occurs, incredible success will follow!

- Victor Aspengren

Flickr photo by einmaleins.olympia

Leadership Unplugged

New technologies develop at a dizzying pace. What is often forgotten is the parallel: the pace of technology-related stress. With all these gadgets, there is a growing obsession with constantly being "wired-in" and connected to the world.

There are 40% of people who admit to checking their work email or work phone while on vacation or at home. When the work day ends, we don’t log off, clock out and go home. Instead, the seductive glow of the smartphone tempts us; we remain completely connected to work, wherever we are.

Technology can be an ever-present symbol of work-related problems. Anxiety from competition in the workplace suddenly has no off-switch. Connection can, in this way, cause disconnection from what is important.

Constant communication can have a detrimental effect to the original goals of communication. It becomes sort of the technological equivalent to "paralysis through analysis."

Permanent plug-in has some measurable drawbacks. One in seven married couples that use mobile devices admits that the devices are causing them to see less of their spouse. Also, 1 in 10 people claim they spend less time with their children under the age of 18 due to technology.

Technology has created a double edged sword in our society. It has increased productivity but at the cost of increased stress on the worker. Innovation in technology has led to America being more productive in terms of speed and output, but that does not mean being permanently plugged in is a cause of this.

Learning where to break from the constant flow of information, and when to direct it, is an important skill. Good leadership recognizes the importance of focus, and can recognize when technology is assisting productivity, and when it is inspiring employees to merely go through the motions.

If you are constantly "wired-in" to the new age of technology you will not be able to hear yourself think. Good leaders establish the expectations for communication with the latest technologies but great leaders are the example of these expectations and have learned to balance demands of work communications with being present in person.

No matter what is going on at your job, always allow time to unplug and recharge.

The Blind Organization

The failure of companies to provide a vision for the organization leads to employees that feel blind. They go through the motions with half-hearted efforts that lead to apathy and poor results. If the company does not know where it is headed, then how can any organization expect the employees to know where they are going.

In many cases, this vision comes from the top leader or leadership group. The vision statement is announced and everyone is expected to buy into the vision that has been handed to them. It may sound good, but it typically means very little to the employees.

A better method for creating vision is getting input from all employees and providing a process that is not controlled or manipulated by the leaders of the company. Leaders need to be involved, but giving up control of the process is key. If the employees of the company are the true creators of the vision, then the chances of the vision actually meaning something increase dramatically. 

As humans, we want to be a part of something bigger - something that has meaning and adds value to our lives and those around us. Understanding how we fit into the bigger picture of life and organizations gives meaning to what we do.

Creating a vision that has meaning is a great way to open the eyes of all employees to the true potential of the organization and how they can help make it happen.

Flickr photo by lupinehorror

 

Capitalism Through ESOPs

There is a growing debate on capitalism and what it will look like in the future. Most people would welcome the chance to build a significant amount of wealth for themselves and their families. The challenge is that the entry into capitalism requires an ever increasing amount of investment. The vast majority of Americans don't have it or can't get access to it.

The world is not fair and that will not change. ESOPs are a vehicle that can allow the average american worker a shot at building wealth and pride, and create a bit of leveling in our wealth distribution. Chris Mackin gives a wonderful narrative about this in The Nation.

ESOPs are not perfect, but they are a viable alternative to the future structure of capitalism.

Flickr photo by boetter

The Power of Goals

It has been proved over and over again that putting goals in writing increases the chances of success. It is a HUGE first step, but it is not the magic bullet to success. There are several key drivers that many organizations fail to implement that increase the chances of reaching the goals that have been written.  Organizations that utilize and practice these drivers increase their goal realization significantly. 

They are as follows:

1.  Involvement in setting the goals

2.  Commitment to peers to achieve the goals

3.  Regular progress reports

4.  Emotional attachment to the goals

When people are involved in the creation of the goals, they have a deeper understanding of the why and how of the goals. It reduces the noise that is typical of top-down goal-setting and moves the organization to action much quicker. 

Commitment to goals done in front of peers can be uncomfortable, but it raises the stakes of meeting the goals. No one likes to let down their team.

Out of sight, out of mind. Without regular reporting and updates, organizations will never achieve a rhythmic cadence for people to follow. Repetition leads to a change in habits.

If goal setting is done in a sterile, here-we-go-again manner, do not be surprised that the organization looks like a zombie movie. The human nature is driven by emotion and far too many organizations forget this fundamental fact.   

Finally, if the organization's leaders do not buy into these drivers, then do not expect improved organizational performance.  Simply put - walk the talk.

Flickr photo by Cheryl Gebhart

Work Sacrifice

Are the sacrifices that your employees make forced upon them or given freely? If these sacrifices are driven by fear of job loss, intimidation, avoidance of home life, looking like a martyr, or an absolute requirement, then the value of these sacrifices are drastically diminished.

The best-in-class businesses know that leaders, employees and families all sacrifice something to be the best. The reasoning behind the sacrifice is what truly defines the intent and value of the sacrifice. Here are some examples:

• Working long hours = avoiding a destructive relationship elsewhere
• Working long hours = facade of being a good employee
• Tolerating verbal abuse = fear of job loss
• Knowing it is wrong and saying nothing = apathy or fear of job loss
• Volunteering for every project = avoidance of real job responsibilities
• Volunteering for every project = justification for poor performance

Sacrifices that are given freely with no strings attached is where true value is created within organizations. Sacrifices that are cherished are tied to deep beliefs, strong values and a better life. 

What is the true reason your employees make the sacrifices they do?  To understand this question you need to know the answer for yourself - do you know? 

- Victor Aspengren

Flickr photo by romanlily

ESOP Ownership Balance

One of the elements that employee owners in an ESOP must come to grips with is the short term vs. long term views of business. Educating employee owners on how the company balances these two views should be a priority and a regular activity.  

The company may have great products, strong market penetration and high profits today, but maintaining this status typically requires investments in new products or services. These investments can be funded by internal cash flow or outside debt. Either way, these new ventures will diminish stock value in the short term with the hope that greater value will be created long term.

The timing of these new ventures in conjunction with when employee owners decide to leave the company can create an uncomfortable situation. Specifically, in a new growth cycle, the employee owner will receive a lower stock value for their ownership balance and may feel they are getting the short end of the stick.

To avoid these situations companies need to invest the time and effort in educating the employees on how a new venture will impact stock value and that the company has to look out for the welfare of employee owners today, as well as those five, 10, 20 or more years down the road. Educating employee owners gives them the information to make a better decision on when to the leave the company if they want the highest value they can get.

The is a balancing act that every ESOP company and every employee owner should become skilled at. 

Flickr photo by Hotdog Photography

Trust

If there is one thing a company or leader should focus on, it is trust.  It is the bedrock of successful companies, cultures and families.  Unfortunately, trust is a vanishing quality in our world today.

The violation of trust has become a mainstream event in our society and companies.  It is not discussed, people are not held accountable and, to some degree, it is accepted as normal behavior.

High levels of trust lead to high levels of safety, tolerance, innovation, communication, creativity... the list is endless.  Trust is the key to unshackling the potential in people and organizations.  If change is needed, then focus on this one important human trait, and only this.  Forget everything else and be fanatical in the pursuit of trust.  It will not be easy, and it will require a tremendous amount of energy in the beginning.

But give it time and the energy will come back ten-fold.   

To put it all in perspective, answer this question: How many times can we violate trust in our most cherished relationships? We know the answer, yet we go about our business lives violating trust like eating candy.

Build trust and unleash the potential in your organization.

Flickr photo by UnforgetFire

End Of The Road

There is nothing more stressful than the termination of an employee.  It is a life changing event for the employee and it should not be a surprise.

Unfortunately, the vast majority of companies do a poor job of letting their employees know where they stand in regards to their job situation - layoff or firing.

Companies that truly believe in their people create a process that is based on respect.  Here are some key elements for a respectful process:

• Regular and meaningful performance feedback.
• Strong support process for employee to correct behavior.
• Strong company training program.
• Human resources should not be the termination lead. They should play a support role for the manager and the employee.
• Company does not fight unemployment filing.
• Explains what type of reference will be given to employment inquiries.
• Has a clear and simple process for the transition of benefits.

How you handle termination makes a huge difference for the employee, the company and the employees that remain with the company.

Do not be the company that terminates an employee and then two months later tells them they will get a severance. Too often, this is a sad but true story. It does make a difference how you terminate an employee.

Flickr photo by blue_william

Socialism or Capitalism?

The debate rages on.

Is socialism or capitalism the right approach to support the people in this country? Both have advantages and disadvantages. Is there something beyond both of them that could work better?

ESOPs (Employee Stock Ownership Plans) could be the solution. The idea is shared ownership not equal ownership. Ownership is typically distributed based on wages, but there are variations where ownership is distributed on hours worked. In either case, those that have a perceived higher value to the business (hours or wages), and stay with the company longer, receive a greater ownership stake.

Ownership implies that you accept the risks and rewards that come with it. The actions of the owners make a difference in the value of their company, whether it is the individual owner or the owners as an organization. 

The research shows that involvement by the owners creates better financial results. If an $8 an hour employee can build a retirement account of $30,000 in five years, is that success? If a company of eighty employees has a six-figure retirement account, is that success? There is no right answer, but these results are actual examples from ESOP companies. If an individual does not like the results, they have the choice to leave. There is no gun pointed at their head requiring them to stay.

It is time for owners, employees and companies to quit acting like there is a gun pointed at their head and realize that they have a choice to do something different and become something better - to go beyond socialism and capitalism.

Flickr photo by fenderjrp

Is your work a choice?

For most employees, work is not a choice. It is a forced action. This is one of the biggest obstacles to creating a productive and engaging work culture.

The requirements of money, family and benefits push people to a forced action versus a conscious choice of fulfillment at work. What were the real reasons you chose your current occupation? Chances are high that life fulfillment was not a priority at the start.

Once the routine of pay, benefits and work schedules have set in, the question of "why do I do this" sets in. This internal conflict keeps employees from being engaged and productive.  It is not easy for a company culture to overcome this internal conflict and that is why many companies give up on culture.

Those companies that create a culture that allow employees the slightest chance of finding a sense of fulfillment perform well. Those that allow fulfillment to flourish blow the doors off performance. What culture will your company choose?

Flickr photo by H.R. Hatfield

The Cooperative Alternative

The economic downtown and the loss of jobs has created a souring opinion of work, leaders and corporate America. The sudden loss of a job emphasizes how little control individuals have over their employment status.

If it is important for people to have more control over their work, then the cooperative model should be considered. The model has been around for centuries.

The cooperative principals are as follows:

• Voluntary and Open Membership
• Democratic Member Control
• Member Economic Participation
• Autonomy and Independence
• Education, Training and Information
• Co-operation among Co-operatives
• Concern for Community

Cooperatives provide direct control by the workers of the business. In some cases, each person has a vote. The U.S. Federation of Worker Cooperatives gives more detail of the principals at their website. 

Cooperatives have not been a mainstream business model in the United States, but maybe it is time for them to become a major player in the recovery of our economy.

Flickr photo by BNNS.de

Exit Strategies From Your Business

Many owners out who are looking for exit strategies for their business. John Abrams is one owner who found a strategy. He created an ESOP at South Mountain Co. as an exit strategy. The book "The Company We Keep" is a  story of his journey. Follow this link to a video where he tells part of the story.

If this video strikes a chord inside you, there are three upcoming events that can provide tremendous insight, contacts and data as to how employee ownership/ESOPs (Employee Stock Ownership Plans) operate.

The information and links to these events is as follows:

• NCEO (National Center for Employee Ownership) Annual Conference, April 23-25, Denver
• The Annual Conference on Open-Book Management, May 3-4, St. Louis
• The ESOP Association's Annual Conference, May 12-13, Washington, D.C.

All three of these conferences have occurred for more than 15 years. Attend one and you may be the next author of a book on employee ownership.

Flickr photo by Miller Info Commons

A Strategy for Building a Retirement Nest Egg

There is a growing concern over the ability of Americans to build an adequate retirement nest egg. The recent losses in 401(k) accounts, the instability of social security and the fear of inflation have created this concern.

Many people do not realize that employee ownership can be a viable tactic to help combat the retirement concern. The NCEO did a study on ESOPs (Employee Stock Ownership Plans) that shows that retirees in an ESOP company have approximatley 2.2 times as much in their accounts as those in comparable non-ESOP companies. Another key point is that ESOPs are more likely to offer a second retirement plan more than non-ESOPs are to offer any retirement savings plan (56 percent vs. 47 percent).

A key take away is that employees of employee-owned companies do have the ability to impact the value of their retirement account through what they do on a day to day basis.  Obviously there are no guarentees with any retirement plan, but having the ability to have some control goes a long ways to retirement peace of mind.

Flickr photo by Gerard Fritz

Tap Into Your Pride

Company pride is sometimes overlooked as a tool to motivate employees and increase bottom-line results. Companies that have a "special" culture sometimes fail to tell their wonderful story and miss an opportunity to give the company a boost of energy.

There are many opportunities out there for companies to be recognized locally, regionally and nationally. One of the best know awards is given by Winning Workplaces in conjunction with Inc. magazine.

The Top Small Company Workplaces award has been given for several years and Van Meter Industrial, a Cedar Rapids ESOP company, was one of the award winners in 2010. Here are the details for 2011: 

• Winners will be featured in the June 2011 issue of Inc. magazine, the premier publication for entrepreneurs and business owners. Winners will also be featured on Inc.'s and Winning Workplaces' websites and will gain additional exposure through a nationally distributed press release.

To see if your company qualifies for the award please visit: https://tsw.winningworkplaces.org

Here is a chance to build the pride in your company.

Flickr photo by joshgerdes

A Bird In The Hand, Is Worth Two In The Bush

In too many instances ESOP companies believe that the value of an employee owner's ESOP account is a motivating incentive. The issue with the ESOP account value is that it is viewed as the bird in the bush. The view of the ESOP is similiar to the bird in the bush - Will I get my ESOP money (can I catch the bird)? Will the ESOP account be there when I leave (will the bird stay in the bush or will something else get the bird)? The ESOP is a scam (two birds in the bush, unbelievable). 

A cash incentive is the bird in the hand.  It allows the employee owner to really feel success. One could say it teaches people how to catch the bird in the bush. A good incentive plan is self funding and it teaches employee owners how to increase the value of their ESOP accounts. If the incentive is being paid, chances are the value of their ESOP accounts will increase. 

Putting a bird in the hand of employee owners may well give you two birds in the bush, but if you do it right you may have a whole flock of birds in the bush!

The New Idea

The picture shows the new idea a few years ago that would keep the young boys in school, instead of cleaning out the barns. 

Where do you get your new ideas from?  For most of us, the most creative time for generating new ideas is either in the car or in the shower.

All it takes is one new idea and the bottom line can increase, turnover can be reduced, or the work environment improves.

The following are a couple of places to visit that may generate some new ideas for you:

• The Carey Center for Democratic Capitalism

• Scanlon Leadership Network

Flickr photo by dok1

Cynics & Negativity

A hot topic in the ESOP world is "Dealing with Cynics & Negativity in Your ESOP." It has been a hot topic for years and is always a well attended session.

In many of these presentations it is about how to fix or deal with the cynic or negative person. The focus is on them.  It may be useful that we turn the focus on ourselves and how we approach our conversations with the cynic or negative person. Here are four key points to think about:

• Keep yourself under control
• Maintain an attitude of mutual respect
• Clarity on your needs, feelings, and personal rights
• Fluency in the relationship skills of awareness, affirmation and empathetic listening

If you peel back the onion, there may well be a logical and legitimate reason for why a fellow employee owner lives in the world of negativity. We have not walked a mile in their shoes and if we had, we may understand that they do have a right to be this way. There is no need to add more fuel to the negativity in our organizations, it is contagious enough.

Flickr photo by yewwei.tan

Find The Time For Change

I facilitated a session at the Gathering of Games annual conference a few months ago that consisted of a panel of company leaders.  A participant in the session asked the question "How do you find the time to create change?"

This led to a lively discussion about purpose and leadership. And if those things are important to the organization, you find the time.

If you want different results in your organization, then you must find/make/create the time for the change that is needed to do so. In many cases it starts with leaders finding the time to create new conversations, setting the example, and making themselves available to the employees.  In the words of Nike "Just Do It!"

Flickr photo by m!

Frustration is Alive!

Image by Metrix X via Flickr

Is the economy going to improve or not? Will I have a job tomorrow or not? Will I get social security or not? Should I put money in the stock market or not? Is it time to stuff money under my mattress or not?

These are the types of questions that permeate the conversations of today. There is so much unpredictability in our environment that people are really feeling the impact of the unknown.  It is just like waiting for the results of tests from the doctor's office - it can drive people crazy.

The unknown lowers company productivity and profits. These are times when leaders and companies need to accelerate their communication and face the unknown head on. No one can control or predict the future and the focus should be on what can be controlled.

This is a time to rally the troops and get everyone focused on what is right in front of them.  Keeping employees busy on internal improvements, training and giving input on changes is a great way to keep frustration at a minimum.

Firing a Customer

Image via Wikipedia

Most businesses will take the step to fire a customer that is not profitable or presents a potential liability to the company.  How many businesses would fire a customer to protect their employees?

Obviously a business would fire a customer if they presented a physical threat to an employee, but would the business fire them to support their employees and show that they trust in the work they do?

It really boils down to who is more important - the employee or the customer? The debate rages as to who is most important.

Companies that place their employees first have no trouble firing a customer that violates the ethics and principals of how employees are expected to treat each other. Being a customer does not give added influence into these organizations. These companies believe in the culture they have created and will not let anyone cross the limits, including the customer.

The bottom line is important, but what is the greater cost? What signal does it send when an employee is expected to grin and bear it, no matter what type of behavior a customer may exhibit? Firing a customer is one of the most significant acts of support a leader can make.

Keep Our Jobs In Iowa

Finding a job is no easy task in this economic climate.  There is a lot of discussion on creating new jobs, but in many cases the preservation of jobs is forgotten until there is a crisis.  Only then, do local communities and state agencies scramble for strategies to keep the business from closing.  This is a reactionary response instead of proactive one.

A proactive approach is selling the business to the employees.  It allows the owner to give something back to the employees and communities that helped build the business, if you are an owner you will work harder to grow the business and keep the business viable, and sharing ownership allows wealth to be accessed by a greater number of people. 

Iowa's local, regional, and state agencies should be well versed in the different forms of employee ownership as a proactive strategy to preserve jobs.  Let's hope that the strategies and discussions of employee ownership are alive and well in Iowa!

 Flickr photo by District Weekly

Creating ESOP Shelf Space

If you want someone to learn a new idea, then you have to give them a reason to want to learn the idea.  Yes, there are those that will automatically want to learn the new idea, but for most it will take time and patience. 

In the marketing world "creating shelf space" is a big part of creating success.  This concept is not associated with intense training or high pressured sales and marketing tactics.  It is about creating a mental space for an idea, concept or product to gestate.  This creates an opportunity that when the time is right, the person will "take the book off the shelf and start reading it". 

This technique lends itself to self development, which is the most efficient and effective style of learning and the bedrock for change.  What are you doing to create ESOP shelf space in the minds of your employee owners?  If there is no shelf space, then ESOP is just four capitalized letters.

Flickr photo by practicalowl

Would you want your child to see it?

Creating a company culture that drives performance, gives employees support and creates opportunities for personal growth is not easy. 

The best advice may well be the single, simplest and most focused statement ever made that can guide the development of a company's culture:  "Would you want your child to see it?"

What type of company would your child see if they walked into your company? Would you be proud or ashamed?

Maybe we could all use a bit of a child's perspective in dealing with work. Click on the link; it is worth the short read!

Flickr photo by mario bellavite

A Culture of Job Security

The biggest hurdle in engaging employees is creating a culture where they feel their jobs are secure. Secure in the context that there are no guarantees in life and there are situations that are out of the company's control.

At some point in any organization's life cycle, there will be times when the path ahead holds much trepidation. During these times of trepidation, employees are very aware that something is amiss. The longer the situation goes unanswered, the quicker employee engagement wastes away.

Organizations and leaders who understand that job security is a bed rock for engaged employees immediately address these periods of stress. Leaders go out of the way to be accessible, strategies are created with the help of employees and questions are encouraged. The organization rallies to defend the job security of its employees as best it can.

The fierce protection of jobs gives employees confidence that everything that can be done is being done (in the context that was mentioned earlier). Organizations that understand this will survive these tumultuous times and in many cases thrive.  It is never to late to start working on a culture of job security.

Flickr photo by capnmikesphotos

Planting Seeds

Spring has arrived and it is time to plant the seeds that will blossom into flowers, fruits and vegetables.  The process takes time, patience and nurturing. 

Organizational change follows a very similar process. The timing of organizational change is critical, as is the timing of planting the seeds for organizational change. The introduction of an idea, concept or vision of change can easily fail if is not planned well.

Implementing change randomly or following the latest fad typically results in lack luster results. To increase your chances of success, plant the idea of change early and let it slowly evolve with the influence of others.  When the time is right, nurture it, feed it and let it grow into the fabric of the organization. In time, change occurs and the organization improves in a natural and powerful way.

 Flickr photo by organic gardening association

Communication Does Impact Shareholder Return

Organizational communication is sometimes viewed by owners and executives as a wasted effort that has nothing to do with the bottom line. Towers Watson  published a significant study.

It shows that communication can improve shareholder return by 47 percent.

During times of organizational stress, which many companies are experiencing right now, communication excellence is needed to help cope with this stress. Communication excellence requires time, training and a commitment by leadership in thought and deed.

One other key point, communication excellence is a leading indicator of company shareholder return. Start your company comeback - communicate!

Flickr photo by elycefeliz

ESOPs: A Good Plan For Retirement

ESOPs are a powerful tool that allow average workers to accumulate some sizable retirement accounts.  Non-ESOP companies, on average, contribute close to 4% of wages into a 401k retirement.  Public ESOP companies contribute 6% of wages, and private companies contribute somewhere between 8%-10% into their qualified ESOP accounts (source NCEO)

Some critics say that this is putting everything in one basket and is very risky.  The good news is that many ESOP companies also offer a 401k plan.  The logic would lead one to think that employees in an ESOP company would not contribute  into another retirement plan when they are receiving significant allocations into their ESOP.  A study by the NCEO that will be published in 2010, says ESOP employees are just as likely to contribute to a 401k plan as non-ESOP employees.

Teaching and involving employees to be owners is a good plan to a happy retirement.  There are no guarantees, but there are no guarantees with a 401k stock accounts or that Social Security will continue to be available to those who retire.

Flickr photo by sweetie pie rebecca

 

Time For Education

This spring there will be three tremendous educational opportunities in regards to employee ownership, ESOPs and open-book management. There will be three annual conferences held this April and May, and two of them are right here in the Midwest.  They are long- standing events that provide a wide range of perspectives and speakers on the issues of employee ownership, ESOPs and open book management.

I have attended these conferences over the past 10 years and have never been disappointed.  I have always walked away with new and pertinent information that I could use.  The speakers are knowledgeable and passionate about their topics.

It is also a great way to meet your peers as owners, leaders and employees who are living the experience and more than happy to share their story and knowledge.  You will hear the real life version of how these concepts are played out from these individuals. 

Please check out the links below and make plans to attend one of these educational events.

The NCEO/Beyster Institute Employee Ownership Conference  April 20-22, 2010 Minneapolis, MN

The ESOP Association's 33rd Annual ESOP Conference May 12-13, 2010 Washington D.C.

The Great Game of Business's 18th Annual Conference on Open-Book Management May 5-7, 2010 St. Louis, MO