Business Record - Iowa Biz

Practice Makes Perfect?

The saying practice makes perfect is used by parents, teachers and leaders to encourage their children, students and employees to improve themselves.

It is a great idea and it works, but only if they are practicing the right thing.  There are far to many instances where individuals spend countless hours practicing, only to learn they were practicing the wrong thing.

A lot of resources and efforts are wasted by companies during organizational change because the organization practices the wrong thing.

In many cases companies practice the wrong thing because they fail to engage the employees in the organizational change process.  In these instances programs are implemented and the employees will implement the program knowing full well that it will not work - they will practice the wrong thing.  Until the leadership of the organization becomes enlightened to the situation, the organization will continue to practice the wrong thing and get lack luster results.

 Engage your employees in change and practice will make perfect.

Work: The Means or the End?

 This time of year gives us pause to evaluate what life has given us and what more do we want from life.

When we evaluate life we have to evaluate work, since this is where most of our time is spent.  How do you evaluate your work - is it the means or the end?  The end, meaning it consumes your life and negatively impacts all other life activities or...The means, meaning work feeds a full and balanced life.

We can choose the answer ourselves, but the culture of our company plays heavily on this choice.  A company that supports a culture where it is a priority for employees to attend the ball game, music recital or visit the sick family or friend in the hospital, will get back ten times more effort from their employees.  The saying "the more you give the more you live" is so true.

There are many companies that support the scrooge mentality that work is first no matter what.  The rest of your life is captive to the demands of work and there are no alternatives.  Work is the end and when the ghosts of Christmas come calling, these companies will suffer in the end.

To put it in perspective, a year from now, five years from now, ten or twenty years from now, what will you remember?  The fact that you missed a half day or full day from work or the fact you missed the ball game, music recital, or failed to visit the sick family or friend.  What will be your answer when the ghosts of Christmas call on you?  The means or the end?

Company for Sale?

The economy is slowing coming back.  People are beginning to realize that the values that existed before the crisis will not be seen again for some time.  The new values of homes, businesses and the stock market are not going to be over inflated as before.

Business owners that were thinking of selling their companies are starting to test the waters again.  The value of their businesses may not be what they once were and the values are based on a new market reality.  Owners are realizing that it is time to move forward.

When looking at the impact of our financial crisis and how it impacted everyone's net worth, employee ownership is one of the best ways to transfer ownership of a business.  One employee ownership methods for transitioning ownership of a business is an ESOP (Employee Stock Ownership Plan).  The following is a short list of the benefits of using an ESOP as a strategy for selling a business:

• Owners of C corporations can realize significant tax savings if they sell at least 30 percent of the company to the ESOP.
• S corporations that are 100 percent ESOP pay no corporate tax (providing certain state laws).
• The equity of the business is spread broadly to all employee owners.
• An ESOP is a qualified retirement plan that is governed by the DOL & IRS (giving some comfort to employee owners that there are rules to play by).
• ESOP companies, with participatory cultures, will out perform their non-ESOP competitors
• Employee owners have greater control over the value of their accounts in an ESOP as compared to an IRA or 401k.
• The owner gets the satisfaction of sharing future equity with the employees who helped build the business.

Any business owner that is considering selling his or her business would be amiss to not evaluate if an ESOP would work for them.  There are many more benefits than those listed above and there are disadvantages that need to be considered.  An ESOP can provide benefits to the owner, the business and the current and future employees.

A Paint Can of Cookies

Gifts come in many ways, but I was very surprised the other day when I received a UPS package that contained a paint can.  Needless to say I was very curious as to what the paint can contained.  It was a "welcome to the team" note with cookies from my new employer RSM McGladrey.  I have not even started the position and they are sending me a signal of their culture . Very impressive.  Even more impressive is an agenda for my first day that includes lunch.

What are the signals your culture sends to new employees?  Do they wait in the lobby with no conversation, wait for follow up calls or emails, have no idea of what the first day will bring or is it the standard paper work and then get them to work? 

First impressions are powerful and difficult to change, just as it is difficult to change a company's culture.  One of the greatest tools in changing company culture is new blood.  New employees bring no baggage and are eager to prove themselves.  They will be the first to accept change and step up to take on new challenges.

If culture change is a priority for you, it may serve you well to examine the process you use in bringing new people to your company.  It may be time for some new paint.

Recession 101

The other day I saw a billboard that had this message:  "Recession 101: Self Worth Beats Net Worth."  What a wonderful message in these trying times.

I have had several conversations in the past weeks with people who feel tired, worn out, beat up and defeated.  The constant pressure is tearing down their self worth.  They are giving their best efforts to keep their businesses alive and profitable, but they feel like they are dropping the ball.

Many organizations say that their people are their greatest asset.  I fear that even those that truly do care about their people are beginning to cave in to the pressure of this recession.  The constant bombardment of bad news makes it difficult for individuals to feel like they are making a difference.

I have a "feel good" file that I pull out when I am feeling down or frustrated. I pull it out and read the kinds words that have been given to me by my friends, peers, customers and supervisors.  It usually takes about five minutes to read and I am on my way to being refreshed.

If your organization is feeling the pressure of the economy and morale is low, you may try a "feel good" event.  Conduct a meeting where all you talk about is what you have done well.  Get people talking about all of things you have done right.  You will be amazed at how it will give new energy to your organization and make it a brighter day for all.  We all can use a little help sometimes in remembering that we are good people and have done great things.

It Is All About Perspective

Have you spoken or heard the phrase "Walk a mile in my shoes and then you will understand?" This saying clearly explains the power of perspective.

Understanding the perspective of individuals, work teams and the organization is critical when implementing change.  In many cases organizational change has unintended consequences for failing to appreciate the perspective of those impacted by the change.

You may think that everyone is in the front row ready to take action, but there are most likely groups that are in fear of the front row.  Understanding others perspectives is like peeling an onion.  It will take some time, it may well stink, the stink may linger and may not go away easily, and there could be tears involved.

Making the decision of what is right or wrong is not easily decided until you can appreciate why a person is the way his or she is.  This appreciation takes time, effort and patience.  

It will not eliminate hard decisions, but it will lead to a stronger culture based on respect, responsibility and acceptance.  Remember, we each have our own skeletons in the closet!

The Power Of Passion

My father has lived alone the past two years and has just recently started to see a wonderful woman. The other day, he made this statement to me: "Vacuuming and dusting the house is not so bad when you have a good reason for doing it." He has a new passion for life and it has changed his perspective at all levels (he was married to my mother for 40+ years, the only women in his life until two years ago).

I am sure that all of you can relate to the feelings that my father is experiencing. It is truly amazing what happens to individuals and organizations when passion has been lost. Daily tasks become burdensome, we start to question why we do what we do, and cynicism comes alive. Our energy seems to leak away and we feel like we can never make any headway.

Why is that organizations and individuals loose their passion for life? It is fear, lack of knowledge and getting stuck in the rut.

It is safe to stay in the rut or routine of life or work. We know what to expect and it is simple. As time goes on the safety is comforting, but everything starts to dull and tarnish as we continue to do the same thing. Gaining new knowledge can change this. New knowledge allows us to change perspective and gives a new luster to the former dulled and tarnished tasks.

The lesson, as my father would advise, is to face yours fears and take the first step. There is knowledge to be gained everywhere. Break out of the rut once in while to truly see what life has to offer.

Find your passion and you will find a new way to live life. 

Because They Care

Caring is a trait that many believe is a good trait in organizations. Many hours of training, worrying and even tears are spent by leaders, employees and families in the pursuit of caring.

Yet, as with anything in life, too much of it can be harmful. You may ask yourself - how can you care too much?  Caring too much is harmful when it invades your personal life and when it inhibits the growth of others.

There are leaders and employees that will sacrifice their own families because they care about what happens to the organization in an extreme way. These individuals also have a tendency to expect others to care as much as they do. When this occurs, it creates a lot more organizational stress than what people may think.

Individuals that care too much can also have a tendency to take care of all problems. This behavior does not allow for others to make mistakes and then learn from them. Mistakes are in many cases the best opportunity for individuals to experience critical learning that becomes part of their behavior.  

Does your caring come with a cost to others?  If so, you may need to take a step back and make some adjustments.

Finding Fresh Eyes

Remember years ago as a child looking for the elusive four-leaf clover in the yard?  The hunt could last for hours as you strained and focused on trying to find the lucky piece of clover.  Eventually, you started to wonder if it really existed.  Then your mom or dad would walk up and see how you were doing.  The look of frustration on your face explained the situation all too well.  They sat down and within minutes they would find the four-leaf clover.  The same story can be told for working on puzzles, coming up with ideas and changing the culture in your company. 

The fact that you did not find the clover sooner is not due to a lack of effort, knowledge, or willingness.  It is that your eyes and perceptions become clouded due to your intense focus.  That is why your parents found the clover so quickly – they had the fresh eyes.

Those responsible for changing company culture to improve the bottom line and their employee's lives, sometimes suffer from the same tired eyes as the child hunting for the lucky piece of clover.  They have the want, knowledge and willingness, but blinders have narrowed and clouded their view of the company and its employee owners.  They become frustrated, cynical, and start to lose the passion once at their fingertips.  It does not take long for the company to begin to mimic the same symptoms.  This is a time when you need to find ways to re-energize your eyes or bring some fresh views into your world.   

Does this sound familiar?  You preach the same ideas, practices and stories, but it seems to have no impact.  It is similar to how parents sometimes feel about their children – they just do not listen or get it.  This is opportunity where an outside influence may be the answer.  In the family it may be a grandparent, aunt or uncle, or a good friend that can help the child to understand.  In organizations it can be the independent board member, an outside speaker, consultant, or even your customers.  These resources bring the fresh eyes that can see issues clearly and provide solutions.  Do not be afraid of the “outside“ perspective. 

Do not let the routine of business, personnel issues, or individual habits restrain you and your organization from reaching new heights.  Take the actions that can widen the view of possibilities to increase the bottom line and enhance your employee's lives.  Remember that fresh eyes are the best eyes!

 

 

The Cause of Plane Crashes

What do you think is the number one cause of plane crashes?  Many people answer birds, lack of sleep, weather and other reasons.  Pilot error is the macro answer.

In his book, Outliers, Malcolm Gladwell gives a mirco answer for plane crashes - the PDI (Power Distance Index) rating.  The PDI was created by a Dutch psychologist, Geert Hofestede.  PDI is one of "Hofstede's Dimensions", a paradigm used in the world of psychology. The PDI is concerned with attitudes toward hierarchy.

Gladwell points out in several plane crash examples how PDI was strongly correlated to the cause of these crashes.  Simply stated it was the fear of questioning authority that led to these fatal crashes.

What is the PDI in your company's culture?  If you think is does not matter, then think of those who died on these plane crashes.  Those passengers counted on the crew in the cockpit to safely fly them to their destination.  Similarly, employees count on the company for a pay check, benefits, education and social interaction.

How easily do your employees question authority in your organization?  Their questions and the answers to them may very well be a silver bullet waiting to kill your organization or it may be the saving grace for your organization.  Create the culture and take the time to hear the questions and answers of your employees before you experience a fatal crash.

Is Your Contingency Plan In Order?

Image via Wikipedia

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.

Organizational Trauma

You may have just recently made some hard decisions or have been impacted by them during this economic melt down.  When these types of decisions are made that drastically impact peoples lives through job loss, pay cuts and other forms of suffering, organizations are faced with the trauma of that event.

Companies make these hard decisions to improve bottom line results or the possibility of closure.  Unfortunately companies fail to deal with the trauma, even though the decisions may be needed and appropriate.  When the trauma is not addressed, there will continue to be a decline in productivity, moral and bottom line results increasing the chances of further organizational trauma.

After trauma there is a sense of loss, anger, finger pointing and a need to discuss or vent the issue. Eventually resolution with the impact of the trauma will occur.  How many companies do you know that figure out a process for how to handle organizational trauma?  We all know far to many companies where the tough decisions are made and not a word is said after wards.  The expectation is people should feel fortune that they still have a job and should work even harder.  It does not work this way.

The remaining employees may have lost friends or families.  They know more intimately how these types of decisions will impact individuals, and in many cases feel guilty that they are still employed.  Immediately the impact of anger and finger pointing comes forth - the management should have been able to avoid this that is why they make the big bucks, who should have been let go and who remains becomes a huge point of discussion, and ultimately trust goes out the window.

Many of my blog posts have dealt with ways to prepare employees for tough decisions through education, communication, and involvement.  This is the best way to prepare and cope with trauma.  For those of you who do not believe in these concepts, maybe after experiencing a traumatic organizational event, the light may have come on.  Take the time to review the archives of my posts for multiple examples of how to prepare and cope with organizational trauma or visit this sight for an academic perspective. 

Teaching Employees the Business

Now is the time to teach all of your employees the business.  They need to understand the numbers and how they relate to sales, profits, cash and share value.  With the dire economic conditions you need everyone focused on the business, not just the management team.   If your employees understand the business, then they are better prepared to face tough decisions and not be surprised by them.

There have been and there will continue to be, hundreds of thousands of employee that will be laid off completely surprised and with little or no explanation of why, other then business is bad.  How would you like to be one these lucky people?

If your employees do not understand the business, then you are ignoring the knowledge capital that exists within your employees.  I promise you that if employees understand the business, you will see a huge influx of new and innovative ways to improve your business.  If you were dying, would you rather have 100 doctors working on your diagnosis or just three or four? 

I personally lead a company where the employees were taught the business.  Once that happened, the business saw significant growth in sales, profits, and share value.  Tough decisions were still made, but the employees were not freaked out because they understood the business.  During one tough decision, people volunteered on their own to be laid off to preserve other' employees jobs and help the business!

Jack Stack the CEO of SRC Holdings in Springfield, MO has written a book that relates to teaching employees the business -  "The Great Game of Business".  Here are the facts.  If you invested $10,000 in 1983 when SRC was founded during tough economic times, it would be worth $23,400,000 today.  SRC taught employees the business from day one, and they continue to do so today - 26 years of it.

If this post seems ridiculous, if you do not believe me, then at least take the time to read Jack Stack's book.  Learn the lessons from a real life business stor

    

Communicate, Communicate, Communicate!

2009 is starting off a little rocky for most companies.  Now is the time to over communicate to your employees.

Why?  If you do not not fill in the true story, your employees will fill it in with their own story.  When it is their own story, it is filled with false data, gossip and hearsay.  The story will continue to build until the facts are presented.  Until this happens, your organization is wasting time and resources on not solving issues.  The scenario is worse when there is a sense of crisis, as we are facing today in our economy.   

A typical response from owners, leaders and management is that they do not have time for more meetings during tough times.  The lost time you spend in meetings communicating the issues your company faces, pales to the amount of lost productivity that occurs when your employees are left in the dark.

There is not a person on earth that likes to be surprised with bad news.  We may not like bad news, but I believe that people want to know what is coming.  This allows them to prepare emotionally, financially and physically for any crisis that me be headed their way.

Slow down, gather your information, prepare for the questions you will receive and start communicating the facts of the companies situation today.  If you are worried about how to do this, follow the link for communicating bad news for some good tips.  Start today and let your people hear the true story, not the rumor mill story.

                       

You Are Your Own Bailout

Welcome to the new U.S. economy of bailouts.  Companies can plan horribly, not understand there financial situation, not understand the economy and the markets there in, and loose money like water out of a tap - no worry, they can get a bailout.

As the leaders of these companies, you can make poor decisions, lay people off, ruin peoples 401(k) accounts and share values, spend as you please - no worry you can get a bailout, and if you really screw it up you will still get a bonus.

The truly sad story is that there are far too many employees, retirees and college students that will not get a bailout - you are your own bailout.  I hate saying this, but we must take care of ourselves.  Counting on any company or any level of government appears to be a pretty risky venture.

I know that there are great companies out there, but the true test of great is when tough times hit.  What sacrifices are the owners, leaders, board of directors and managers willing to make to honor their commitments to employees?

I think this correction in our economy is a wake up call to everyone.  Make sure that you have your own bailout in order.  Here is a short list for creating your own bailout plan:

• Do not spend more than you make
• Do not try to "keep up with the Jones"
• Make sure you can handle your debt even with loosing your key career or job
• Save enough to cash flow your lifestyle for a year
• Take a hard look at how you want to live once you retire - then make sure you stick to a plan. The minimum is on your own dime, above that can come from a company or the government.
• Keep educating and training yourself - diversification is good for business and for individuals
• Keep laughing and having some fun

Bailout - Start your own today!

Success Tips For Organizational Change

Change is an important part of successful organizations (check out the stories at fast company).  One issue that occurs within organizations is how much change can be implemented before it begins to be counter productive.  The timing of new change initiatives is critical to their success.

I have always held the view that there are four groups that are key to organizational change. By dealing with these groups effectively, change can happen quickly and it becomes part of the culture sooner.

The first group is the naysayers.  The people in your organization that always see the glass half empty and nothing is ever good enough.  The best solution is to not allocate any resources in dealing with this group.  Let them be.  They will either get on board or leave the organization.  This may sound harsh, but many organizations see change initiatives die because they put to much energy in trying to get this group on board.

The second group is the thoroughbreds.  No matter what the change, they embrace it and are advocates for the change.  They lead the charge.  The challenge with this group is that they need to see the change quickly or they will shift their energy elsewhere.  Give this group projects and tasks that support the change, but in the context of allowing time for the other groups to buy into the change.  If the thoroughbreds are to far out in front, the other groups look at them as privileged or aloof, and the change initiative will hit a brick wall. 

The third group is the steady eddies.  This group expects change, and as long as they are given education, training and the purpose of the change, they get on the change wagon in short order.  This is the biggest group and the foundation of a company's culture.

The fourth and final group is the fence sitters.  They need extensive training, ample time for questions and an extended period to incorporate the change into their day to day activities.  This is the group that you must watch closely before you add new changes into the organization.  If they are still coping with an existing change, they will not handle more change and you will have organizational chaos if you move to quickly.  By focusing on this group, you can accelerate change and its acceptance.

Balancing change within these groups falls on the shoulders of owners, CEOs and senior management.  Be sure you take the time to plan change with these groups in mind.  Failure to do so will guarantee the change initiatives are a waste of time.

Tough Times Bring Awareness

We are in a period of history when times are getting tough - real tough.  The reality is setting in and all of a sudden there is an awakening happening.  People and organizations are looking at their situation with a new awareness.  An awareness that is pure and not clouded with ego.

Yes, I said ego.  That little voice in our heads that says you are immune to what goes on around you, that you can justify everything you do, and that paints a reality that is not real.  The ego allows us to float through life and disregard what we know is wrong.  The responsibility of what is wrong can be blamed on others when the ego is in control.

When the ego is set aside, then awareness flourishes and new ways of thinking are welcomed, explored and even accepted.  With awareness, organizations and their leaders can start to face the long-term implications of overpaid employees, retirement obligations, lack of benefits, debt and the horrific lack of concern that permeates today's work environment.

No one likes tough times, but I believe these natural rhythms in life are a necessary part of keeping balance, perspective and opportunities for change.  As tough as it may get - and who really knows how tough it will get - open your eyes, hearts and minds to new ways to view your business, your people and how it all fits together.  It is your choice how you view our world today, I view it as a great way to start making a positive difference!

The Power Of Engagement

A new page has turned with the election of Barack Obama as our new president.  Old barriers have been torn down and we are all anxious to see what the future holds with his leadership.

I have discussed in many posts the value of engaging your employees.  You have to admit that Barack Obama engaged people, and that was the power to his success.  He changed the history of how states traditionally voted, he engaged the younger generation, and he rallied a voter turn out as should be expected in a democracy.  When was last time a presidential candidate drew crowds of 50,000 or more. He did.  Now do you believe me when I tout that engaging your employees will get you bottom line results?

Barack tapped into the emotions of America to drive success.  You to can tap into the emotions of your employees and then drive that success with facts, financial information, and some type of ownership.  As humans we thrive on emotion not logic.  The power of love, hate, hope, faith, and fear have changed the face of the world a million times - some to the good, some to the bad.

When someone (new employee, customer, vendor, et cetera) walks into your company, what emotion will they experience?  Is it fear, hate, loathing, envy, or maybe nothing at all OR... is it love, kindness, concern, hope, pride, and a sense of welcome.  Maybe it is time for you to change the face of your company as you look to the challenges of the future.

Systems are Not a Guaranteed Lock for Success

The company makes a big announcement that a new system will drive performance and make the company a better place to work.  I am sure you are familiar with the systems - lean, six sigma, theory of constraints, just in time inventory, open book management, the latest performance appraisal system, employee ownership, touching toes, et cetera.

In many cases the systems are implemented, and in a month, year or even years down the road, things go back to the way they were.  There may have been some financial gains for a while, but soon the embedded cultural memory sucks them back out.  The initial wow and energy fades, and once again people are working in the same old company with the same old problems - nothing really changed.

Why?  Because the systems are not implemented within a framework that engages the employees.  The systems are implemented without any input from the employees that will be impacted by the systems.  There is no clear alignment of how these systems will improve communications, build teamwork, encourage the adult to adult relationship, create opportunities for employee growth, or improve leadership in the company.

The surveys by Gallop show that over 70 percent of workers are not fully engaged.  Systems are valuable, but if you implement them without a focus on employees you are doomed to failure.  Remember that if you involve someone in a decision, their follow through on the results of the decision will dramatically improve.  Implementing systems within a context that engages employees is the ticket for lasting success!

Take The Leap

Life is boring, work is boring, you are stuck in a rut and need some new excitement.  This is when it may be time to take a flying leap into unknown territory. Quit thinking and do it.

I am sure you have heard at work that it is time for change, yet nothing really ever changes.   If you want to see significant change in your organization, then get started with action.  Getting employees doing vs. thinking, will create quicker change. I am a big believer in planning and thinking things through, but do not get the "analysis paralysis" disease or in simple terms "all talk and no show".  Getting employees involved in the change that will impact their work days will get you much higher buy in and less skepticism.

No matter what area you want to change in your business - get your employees involved will produce better results.  Please remember to be patient, give them ample time, and be the cheerleader not the impatient leader of old.

Be the leader that takes the leap first, gives the tools to the organization to do the same, and then gets out of the way of the tsunami of creativity and energy that will be unleashed.

The Purposeful Company

The business world gets crazier every day - stock markets going nuts, banks on the brink of closing, wondering if our 401k accounts will be around for retirement and politicians worrying about lipstick on a pig!  It causes one to reflect on life and examine why do we do the things we do.

Since we spend most of lives at work, does it not make sense that we find purpose and meaning at work.  Even better, that the company we are employed at is purposeful in its business.  Yes, that purpose has more meaning than the all mighty dollar (with the understanding that business success comes from a profit - I think we all know this).

I just recently heard my good friend Kim Jordan, the founder and CEO of New Belgium Brewing (Fat Tire Beer), once again speak to the fact that purposeful organizations do exist.  New Belgium is based on three fundamental issues that center on purpose:

• Stewardship of the environment
• Promoting beer culture
• Having fun

There is much more to the purpose based beliefs of New Belgium, but Kim boiled them down to these three.  In just 19 years it has become the third largest craft brewer in the U.S.

This is a company of 300 employee owners that twice a year participates in the strategic planning process (a fact - I attended one several years ago), ownership is shared with the employees and ideas are encouraged and acted upon.  They have instilled a higher purpose for business and in doing so, have created a place where individuals can pursue a higher purpose through the work environment.

There are other companies that have done the same or more.  The key is that they are engaging their employees in running a business for a purpose bigger than the founder, the CEO or the managers.  By focusing on a higher purpose it takes away the stigma of working for "the man" and gives meaning to work.

I know it works; I was a part of a company that did the same.  I encourage you to ponder the thought of running a purposeful company instead of business.  Good luck!

Plan for Business Succession

Business succession is a part of the natural business cycle.  If it is done right, a huge influx of new energy and ideas can be created.  The unfortunate facts are that far too many owners/businesses are not ready for the succession process and this leaves many employees holding their heads pondering an uncertain future.

Many owners and CEOs of businesses are wrapped up in the identity of the business to the point that if they leave, there becomes a serious personal identity crisis.  They have given their all to the business and there are strong emotions that play into their leaving the business.  This is one of the key barriers to any conversation that pertains to a business transition. It is more powerful than getting their money, who will replace them, or even the future of the business.

It is never to early to start the discussion of business succession.  The planning and preparation can take years and the more it is discussed openly the easier it is on everyone.  Do not wait for the bus to run you over - start the discussions today, put it on paper and make it legally binding so the process does not get put off.  If you can not do it yourself or internally, then find resources that can help you through the process.  Remember that you have a lot of employees counting on you to do it right so they can continue to have a bright future in the business.

Death by Committee

Many companies utilize committees to involve employees in giving input or making decisions about the business.  Unfortunately, it is to prevalent that these committees produce few results and a lot of frustration. 

I would recommend that you ask yourself "Why create a committee?".  I believe it boils to a few key points.                                                                        

• Increased profits/stock value
• Supports strategic thinking                                                 
  
• Reinforces the culture you have or want to create
• Opportunity for personal/professional growth
• Allows top leadership/management to focus on critical business functions

Focusing on these key points will give a clearer purpose for any committee and potentially get better results.  I say potentially for three reasons.  First, leadership must fully support the committees.  Second, there needs to be a high level of organizational trust.  Third, be sure the members of the committees have been trained in running a meeting (at minimum the committee leader).

When creating committees, take the time needed to create success.  One last comment - once they are up and running be sure that you have a system in place to measure results.

Document, Document, Document

Companies with employee-friendly cultures have mastered the art of documentation.  This may sound odd, but documentation is a counter balance to human emotion and the abuses of power.  Sound odd, read on.

Have you ever been told that you do a great job, are important to the company, et cetera. and then when it comes to a pay increase you get a pittance.  Without documentation of performance and how it relates to pay, there is no proof and it is tough to argue for that raise.

The problem employee that disrupts the workplace and lowers productivity.  They should be gone, you want them gone, and finally with a red face and high blood pressure they are terminated.  In a couple of days you are notified of lawsuit.  Without documentation of how you handled this employee's performance, the opposing attorney is going to eat your lunch.

Your excited about your new job.  The potential for growth, money, and power has you giddy!  When the honeymoon is over and you start to ask why these things are not happening you get hollow promises and are told to be patient.  Without a documented employee agreement, you will be waiting for what may never happen.

The employees moral is low, business is suffering, and gossip abounds.  The daily grind of work and the potential of layoffs and job elimination is aging you like being in bottle of vinegar.  Without documentation of how the company will handle a down cycle in business, you will loose your star employees, take years to recover, and potentially close your doors.

No one likes surprises and that is why documentation is critical to profitable business and an employee friendly culture.  Documentation is the road map that will get you where you want to be.

Open The Books - The Minds Will Open

In far to many instances companies drive performance through emotional and subjective processes, reviews, and management. 

There is nothing worse than being told you are not performing as expected and when you ask why there is no valid reason.

Smart companies have recognized that using open book management helps eliminate the emotional and subjective conversations.  Open book management is based on the numbers - the facts (unless the organization is so corrupt it cooks its books).  Business is about numbers - sales, expenses, inventory, profits, cash, stock value and more.

The fundamental purpose of a company is to offer a service that makes money.  If your employees do not understand how their every day actions contribute to the bottom line, I will venture to say that you have a lot of unresolved issues in your company that drive you nuts.

Many owners, CEO's, and management people fear that sharing numbers will destroy their business.  There are thousands of ways to practice open book management and you have to evaluate which way works best for your company.  Start today before your competition beats you to it.  It will give you a competitive advantage!

 

Apathy

Why should I care what happens at this company?  I do my job, keep my mouth shut, and go home.  I have no influence, no power, and no one cares about me.  Just leave me alone and everything will be fine.  Nothing will change no matter what I do.

If these thoughts ring true for your company, you have an infestation of apathy.  This may well be the number one killer of motivation, creativity, and efficiency.

Apathy is a clear sign that there is no linkage between what a person does and some higher purpose - a better world, bonuses, profits, stock value, work-life balance, etc. I guarantee that employees who are infected with apathy will never take the extra step, the extra minute to finish something, worry about equipment, and they may even border on the fringe of sabotage.

Take a minute and reflect back on your own career and I am sure you will recall your own periods of apathy - not a pretty picture.  This is the picture that may well be the center of your company's culture.  You should also take note of how many of your people in leadership positions have the apathy bug.  These leaders are like an incubator and increase the level of apathy infestation.

Apathy can be defeated by sharing financial information, involving people in decisions that affect them, creating a sense of pride about your company, and providing opportunities to learn.  The opposite of apathy is engagement and successful companies have made engaged employees a priority.

Today's business environment is too competitive to ignore the issue of apathy.  Do not let apathy become your company's eulogy.

Flickr photo by apathy_obsession

The Right Time To Depart

One of the key elements of a highly evolved company culture is leadership transition.  The leadership transition may be the most important task of being a leader.

Good leaders think about their departure early in their careers.  They combine vision, business goals, and personal goals to create a plan that enables the business to continue on successfully.  The biggest hurdle in this process is making the emotional choice to pick a time.  In far too many instances the leader cannot let go emotionally and that is when trouble begins.  If a leader cannot let go emotionally, it can become a very stressful time for everyone.

Organizations have a life of their own and must grow and evolve over time.  New leadership is vital to organizations. If you are the leader in your organization, have you taken the time to plan for your departure?

I encourage you to start a dialog with your board, key staff, and family.  As with anything, the more you plan the better the results.

Flickr photo by simply

Frugal To A Fault

I am sure you know many people who are frugal.  They do not do much, they get buy with the least of everything - one pan, two sets of clothes, simple foods, and do not drive.

The frugal concept in business is used to conserve cash and keep prices low.  The frugal difference between a person and a company is that a person is alone and a company is group of individuals.  The individual that practices frugal living can make his choices quickly and not impact others lives in a big way.  In a frugal company it is not that simple.

The leader of a frugal company cannot be the lone believer.  They must have the support of the organization to be frugal otherwise people become zombie employees who care about nothing.

Imagine a CEO who spends time saving printed paper to reuse the back side of the paper, or spends hours and days searching for the best deal on the smallest items, and even goes through buildings to find rusted, wasp nest infested conduit to use in wiring equipment.  In today's world a CEO must be frugal, but keep in mind how your employees view these actions.  The top paid person is spending $50, $100, or more dollars an hour on these activities - which costs the company and does not add value.  I do not dismiss the concept of setting an example, but be cautious of stupidity.

Remember that everyone watches the leader and scrutinizes their actions.  The value of being frugal with dollars can lead to the loss of business, growth, and good people.  Keep a strong balance sheet, but make sure that you are always making investment in your company by spending dollars on training, process improvements, updated equipment, and offering an employment package that attracts the best and brightest.

Flickr photo by NotAgainFarm

Do You Fire The Person or The Behavior?

Firing an employee should be one of the hardest things a manager or leader has to do in an organization.  The process and the attitude that is maintained towards this person is critical to how they cope with a termination.  It is not just simply pressing a button.

When companies state that their employees come first, I would bet that this only counts for those that are employed not the ones being terminated.  Once the mark has been placed on the employee's back, they become second rate.

Instead of firing the person we should be firing the behavior.  If you have been the person fired (which I have), there is a big difference when the focus is on behavior and not the person.  Focusing on the person is destructive, confusing, and typically based on hearsay and rumors.  Focusing on the behavior requires specific examples and data that occur over time.

If you are believer in McGregor's Theory Y, then your belief in the "good of people" supports focusing on behavior. 

The example - the person that continues to have an attendance problem.  Does this make them a bad person - absolutely not!  They are engaging, when they are there they do a good job, they are smart - they just have a problem with attendance.  The termination process gives them ample opportunity to change the behavior.  When the final conversation is conducted it is now about attendance behavior, not that they are a bad employee or person.  When they walk out the door, they are mad at themselves and not the company for what has happened.

Give this some thought and then think about changing the behavior of your company's termination process.

Flickr photo by dadadreams

First Impressions

The young man drove an hour to the interview.  He walked in and announced he was here to interview with Human Resources.  No one knew he was coming for the interview - what do you think his first impression of the company was?

Even better, the VP of Operations set up the interview and told no one.  Then he walked up when the young man arrived said hello and walked away - another great impression.

This company may have blown an opportunity to hire a star performer.  Do you have similar stories? 

It is human nature that first impressions impact us tremendously and that changing that first impression is not just a simple snap of the fingers.  I would encourage you conduct an evaluation on what type of first impression does your company make?

Remember you only get one shot.  If you do it wrong, you will loose customers and employees.

Flickr photo by raspberrytart

Concensus or Chaos?

Your day begins and one of your key management people informs you of a policy change.  The day continues and another management person informs you of the policy, but states that they totally disagree with the decision.  By the end of the day the rest of the management team has informed you of the policy change, but another management member tells you they disagree with the policy.

Soon you are thinking, what a bunch of idiots.  They make a decision and then tell everyone they disagree with it.  You are not alone with this way of thinking.  To many companies have not developed their leadership teams to a level where they fully support decisions.

If this scenario is prevalent in your organization, you have some serious issues to deal with.  Issues need to be debated, discussed and disagreed with.  Once that process is completed and the decision is made, then the group backs the decision 100%.  If it is not 100%, then I guarantee you will have organizational chaos.

This will allow those "thorny people" in your organization the opportunity to thrive.  They will see these differences and use them to back their own agenda or use them to try and topple a key management person.

Be sure your decision making teams in the organization have laid the ground rules for how they support decisions even if they disagree.

Flickr photo by rstrawser