Friday, July 30, 2010

Sharing the P&L with Employees

There are two significant ways in which you can share the P&L within your company, financially and informationally. Let’s talk about both.

Many companies are now “sharing” company losses with employees, in the form of layoffs, reduced hours, pay cuts, etc. This is getting companies back to break even, and from what we hear, employees have been tolerant of the changes. We hope that these same companies will be willing to share on the upside as well. We are strong proponents of incentives tied to specific individual performance.

Open Book Management provides company employees with a clear view of company financial information. There are pros and cons to this approach, but we believe that in challenging times, you can make this work to your benefit. Here are some tips on how to effectively use Open Book Management:

  • Train employees to understand the financial basics 
  • Provide appropriate visibility. Example: Cost of goods sold could be completely transparent. Some G&A accounts, like office staff compensation, should be shown selectively, or as an aggregate number.
  • Empower people to own the numbers under their direct control, and to be able to use the information to improve their performance and the company’s performance.
  • Provide clear direction on how each individual’s actions specifically and measurably impact the financial results of the company.
  • Give people a stake in the company’s success – provide performance based incentives.
  • Listen to the reactions of the employees – allow for a variety of feelings and responses when the information is received and processed.
  • Take it slow – don’t overwhelm people with data, or expect them to be experts overnight.

Jack Welch has said “When people know what they’re up against, they feel a greater sense of ownership and urgency. And the sense that ‘we’re all in this together’ can jumpstart teamwork and innovation, often sparking improvements in processes and productivity.”  

Open communication is high on the desirable list of most CEOs. Open Book Management is an opportunity to lead by example and get solid return on investment – investing trust and confidence that employees will utilize properly presented information to your advantage.

Wednesday, July 28, 2010

Ayres plays White House to celebrate ADA 20th

LA Times columnist Steve Lopez befriended a homeless man named Nathaniel Ayres, about 6 years ago. Steve's articles about Nathaniel were so compelling, they were turned into a movie, called The Soloist, starring Robert Downey Jr. and Jamie Foxx. Nathaniel Ayres is a former Julliard student, fascinated with music, who was diagnosed with Schizophrenia, and as a result, was lost for many years. He has turned his life around, partly because of the fame and direct help that resulted from Steve Lopez recognizing him as a person.

Well, Mr. Ayres played at the White House, and met Barack Obama this week. Please read Steve Lopez's article in today's LA Times, which is really heartwarming.

It is valuable to remember that the occasion of Nathaniel's performance and meeting with Obama is the 20th anniversary of the Americans With Disabilities Act. I wonder how far we've come. This is a good time for companies and business leaders to reflect. Is the ADA a nuisance to you, or have you embodied the spirit of the law? Is mere compliance your objective, or are you really considering how to best deploy the "Differently Abled?" Ramps and wide bathroom stalls are one thing. Sitting down and really figuring out how you can capitalize on the assets of every individual takes human capital management to a whole different level.

Some companies do a great job of this. For example, I learned about a great program called Sentinels of Freedom from one of our clients at General Dynamics. This program, and Wounded Warrior Project, have corporate sponsors that help injured returning veterans to get meaningful work.

I hope that Nathaniel will play again to celebrate the 25th anniversary of ADA, and that in the next five years we can make more progress than we've made in the last 20.

Tuesday, July 27, 2010

The Art of Networking

Whether you are looking for a new job, trying to win more business, or just need to find a solution to a challenge, networking is often the answer.
Most people need some help to capitalize on their own contacts, and certainly when calling strangers. Here's some key tips on how to get people to joyfully help you:
  • Walk in their shoes. Understand who they are, where they are in life, in business, and what motivates them. Be cognizant of their point of view at all times.
  • Create value in the conversation itself. Being asked for help can be a huge downer to the recipient of the call, or the bright spot in their day. How you come across makes the difference. Be cheerful, positive, flattering, thankful. Make it a joy to just talk with you.
  • Define the benefit to the buyer. Why should the networking target help you? How will it reflect well upon them to do so? How will the person they refer to you benefit from your ultimate request? You must have the answers to these critical questions, before you get on the phone.
  • Help people help you. When you call, out of the blue, your networking target isn't going to be immediately responsive to your request. They may need to think it through. Be prepared to offer prompts to stimulate their thinking, and help them figure out where and how they might know the person you're asking to find.
  • Give them time. Let them ponder your request, and offer to call back in 1-2 days. Providing this "deadline" will actually put them to work for you.
  • Offer to reciprocate. Suggest ways that you can be helpful in return, and actually be available when called upon.
  • Ask open-ended questions (who, what, why, where, how, when) not closed-ended questions (do you know anybody that….?). You don't want a yes/know answer – you want valuable information.
  • Be grateful – even if the new info, connection or lead is not useful – say thanks and mean it.

Thursday, July 8, 2010

E-Mail Signatures - Your Personal Brand

Jibber Jobber Blog has a post today on making your e-mail signature count.  The post dissects someone's current so-so signature, but doesn't really point out how to construct an ideal signature.  At my firm, we constructed signature boxes, and we feel they work well, so let me use my own as an example:

Here's what is included:
Name, title, company (with hyperlink to company website)
Personal e-mail with hyperlink
Telephone numbers
Company motto (at top)
Visual links to LinkedIN profile, Twitter, Company FaceBook page, and this Blog
Opt-in sign up for company newsletter

As you can see, this is all accomplished in a compact, well-organized box.  My regular contacts get used to seeing this, so it has become a personal logo / brand.  The only challenge is that some people who view this on a PDA don't realize right away that all the "pictures" they see at the end of the message are just part of the sig box.  But those folks are "Luddites" anyway .

Create an attractive, simple, informative signature box for yourself, and help to have a personal brand.

Tuesday, July 6, 2010

Making Reference Checks Count

Employers are uneven on the subject of reference checks. Many check references very thoroughly, and even employ outside services. But, I also hear, "why bother – HR will only give name, rank and serial number, and what candidate will give you someone who isn't just spouting rehearsed answers?"
Here's a peek at my method:
  • Ask for too many: Ask the candidate to provide 12 references, which must include a boss, a peer (or two), and a subordinate, for each job for the past 15 years. Stellar candidates can provide this list. Mediocre candidates can't. You won't call them all, but the candidate no longer can predict WHO you will call.
  • Engage the reference: Start by having them talk about how they know the candidate, were they the supervisor, what was the framework of the relationship.
  • Easy questions first: What was your overall impression? What special skills or talents stand out in your mind?
  • Then the questions they don't have rehearsed answers for: If you have prepared performance objectives, simply turn them around: "One of the things the employer needs done is [describe]. What experience did [candidate] have in getting this accomplished for you?", or, "What did [candidate] do to prepare him/her to accomplish this for us?" The reference will not have a rehearsed answer for this, and you will get a clear, candid response. Listen carefully, probe, notice generalities and platitudes. The real opinion will be there.
  • Shortcomings: Ask late in the conversation about areas in which the candidate could have been better, or needed improvement. Probe: "What impact did that have on the work." Ask how others saw it: "How did your peers feel about this trait in [candidate]." Most of the time, the clarifying questions actually make the candidate seem better, not worse, but it is still worth probing in this area.
  • Close with open-ended question: "What have I not asked you that would be useful for me to know?" Lots of info about what the candidate is like personally will emerge from this question.
Trust the process, and know that you really can get legitimate references, if you use a structured approach, call a broad range of people, and probe for the real answers.

Saturday, July 3, 2010

Flies in Urinals

Amsterdam's Schipol Airport famously had pictures of little black house flies etched into the porcelain, near the drains in each of the urinals in the men's rest rooms. "Spillage" (men are notoriously bad at aiming) was reduced by 80%.

School cafeterias in many countries including the US have experimented with placing desserts at the front of the food line, the back, and on separate counters. They have also tried putting the yogurt and fruit right up front, with the chips and other junky items last on the food line. Such positioning has always resulted in kids making better food selections.

These little tricks of manipulation are known as "Choice Architecture" – reorganizing the context in which we make our decisions.
Look at your supermarket layout the next time you shop, or the layout of any retail store. Odds are, you have to walk the farthest to get the most critical item on your list. Milk and eggs are always at the back. At my market, I have to walk through the fresh baked desserts to get to the toilet paper aisle. This isn't random.

Companies are increasingly using Choice Architecture with their customers, and with their own employees.
If you are a subscriber to my newsletter, watch for my upcoming review of the book "Nudge - Improving Decisions About Health, Wealth, and Happiness" (Thaler and Sunstein). If you aren't already a subscriber to my newsletter, click here to SUBSCRIBE NOW, for more on this interesting new business tactic.
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