The top performing American companies are showing every other company
how it's done, but not all of them are listening. A company's culture is
the Undiscovered Country for many CEOs, who are invariably trying to
squeeze more productivity out of their work force but without doing
anything radically different than before.
This, of course, is a short cut to disaster, since the latest Gallup
results show that more than 70% of American workers are disengaged from
their work. Therefore, those CEOs who try the same old thing over and
over again are depending on employees who largely don't care about their
job and are looking for a new place to work to increase their
productivity with no additional motivation. And those disengaged
employees are often ruining the workplace environment for the employees
who do care.
Retention problems, anyone?
Forbes Magazine last year published an article on the Four Ingredients for a Winning Company Culture, the four being 1- Put Core Values First ( I would add "and live them daily."), 2 - Empower your employees to manage their schedules, 3 - Give them free lunches, and 4 - Don’t hire employees — look for owners.
The first two points are discussed more frequently than the last two, but the last two offer an interesting chance to find a PLOT where innovative thinking takes the place of worn-out business practices. Let's start with Number Three.
Where is the Profit Left On the Table in a free lunch? Forbes says in their ensuing comments that
A lot of readers will probably see this and think, “I can’t afford to do this.” But let’s do the math:
20 days a month x $12/day= $240/month per employee.
Now, do the math on replacing an employee who is poached by another
company. I know it costs me way more than $10,000 to replace, rehire,
find and onboard alone — not to mention the lost hours of productivity
when people leave and buy their own lunch.
Replacing a full-time employee can be a crippling and unnecessary loss of profit, as Forbes makes plain. So what if you could find another program that an employee could use that would cost substantially less than the free lunch? If we do the math on the PLOT that Forbes mentions, even if they do not call it that, it has an ROI over 300%. When the company is spending $240 per employee per month, this totals $2880 per year, but helps avoid spending $10,000 or more, hence an ROI of somewhere over 300%. So what would happen if you could achieve a similar results for a third of that $2880? Or a fourth, or fifth? This is the very essence of Profits Left on the Table. find new methods of attracting and retaining employees by monetizing programs that currently have NO ROI. As the Triangle of Recovered Revenues says, it begins with "Innovate."
As for Forbes' Point Number 4, Look For Owners, look for people who are personally invested in the company. In other words, look for people who "Engage." Following the 80/20 Rule, hiring somebody just because you need a body has an 80% or greater failure rate. Instead, have a culture that attracts the best, have a compensation package that is innovative and attractive. Finding the most talented people to fill your company inevitably leads to the third step in the Triangle: Produce. A talented, engaged work force leads to much higher productivity and, therefore, Profits that had previously been Left On the Table.
Forbes' Path to a Winning Company Culture
Thursday, July 3, 2014
Sunday, June 29, 2014
If business is war, are your troops ready? Part One
Carl von Clausewitz was a Prussian general of the 18th and 19th Centuries. Paraphrasing his now famous comment on the relationship between commerce and war has lead to the axiom 'business is war.' This dictum has been repeated and espoused by countless notable business leaders, among them Kevin O'Leary of 'Shark Tank' fame, the editors of Business Management Daily, Jack Tramiel (founder of Commodore), Akio Morita (Co-Founder of Sony) and was a featured message at the Inc. 5000 CEO's conference in 2012. Sun Tzu was the inspiration for this message in his revolutionary work The Art of War, written in the 6th Century B.C., which is must reading for entrepreneurs worldwide even to this day.
Business is war.
The potential lessons in that simple three word quote are manifest, but instead of discussing high-level strategies or day-to-day tactics, there is one area that the military knows well but the business world largely seems to have missed, namely, organizing your army and then keeping your troops ready for battle. The lessons of warfare as it relates to business are legion, so much so that limiting the discussion to one topic is necessary if we are to even begin understanding the lessons available to us.
Successful armies throughout history have all shared certain qualities and traits that made them formidable. Examples are numerous, from the Ancient Greece of Leonidas' famed 300 Spartans holding the pass at Thermopylae against hundreds of thousands of Persians, and Alexander the Great's relatively small army of Macedonians conquering most of the known world, to Herman Cortez conquering the Aztec Empire with 500 men or Sam Houston's badly outnumbered Texans thrashing the Mexican Army of General Santa Anna at the Battle of San Jacinto, what has mattered on the battlefield is not the number of the armies involved but their quality. Well-trained and motivated troops win battles, not mobs of dis-spirited soldiers fighting only because they must, and the same lessons apply to business.
Talent, training and motivation are the key lessons, and we will look at each of them in turn.
TALENT: All successful armies have a core of Elite troops, the most talented soldiers around whom the whole army revolves. They might be the most physically fit, the best with their weapons, display courage and leadership during battle, or a combination of all of these; they are committed to training for battle and do so relentlessly. The Persians had The Immortals, Alexander the Great had his Companion Cavalry, Caesar had the Tenth Legion, the USA has the SEALS, the list goes on and on. And while these very special troops have always been relied upon in battle to be the foundation of the army, wise commanders have also always known they are virtually irreplaceable and would never squander them unnecessarily.
Related to business these are the high achievers within an organization, the people who do not need to be told what to do every minute of the day, who take the initiative and have mastered excellence, and who, when given a task, may be counted on to finish it regardless of obstacles. They are the heart and soul of the organization, and savvy management knows it.
They are seen in their organizations as the best of the best, and must be treated accordingly, because the deadly by-product of their higher level of achievement is a much higher level of stress. Chronic Stress is lethal. For soldiers this may become Post Traumatic Stress Disorder, and in the business world it could be something even more deadly: heart attack or stroke.
But the better the employee, the more that management has to be careful not to burn them out. Armies know that Elite troops need special attention, their higher level of stress means they must be rested more and rested better; and just as Elite soldiers can burn out, Elite Employees can too, if their employer is not careful.
Rejuvenating Talent is essential for success. Employees are a company's biggest asset, and the better the employee, the bigger asset they are. Protecting those assets is an employers first and primary duty; without those assets the organization cannot function. Elite employees may sometimes not take enough downtime to release their stress, so the employer must step in with concrete steps to mandate that their best talent does not burn out, or worse, defect to the competition where conditions are better.
Business is war.
The potential lessons in that simple three word quote are manifest, but instead of discussing high-level strategies or day-to-day tactics, there is one area that the military knows well but the business world largely seems to have missed, namely, organizing your army and then keeping your troops ready for battle. The lessons of warfare as it relates to business are legion, so much so that limiting the discussion to one topic is necessary if we are to even begin understanding the lessons available to us.
Successful armies throughout history have all shared certain qualities and traits that made them formidable. Examples are numerous, from the Ancient Greece of Leonidas' famed 300 Spartans holding the pass at Thermopylae against hundreds of thousands of Persians, and Alexander the Great's relatively small army of Macedonians conquering most of the known world, to Herman Cortez conquering the Aztec Empire with 500 men or Sam Houston's badly outnumbered Texans thrashing the Mexican Army of General Santa Anna at the Battle of San Jacinto, what has mattered on the battlefield is not the number of the armies involved but their quality. Well-trained and motivated troops win battles, not mobs of dis-spirited soldiers fighting only because they must, and the same lessons apply to business.
Talent, training and motivation are the key lessons, and we will look at each of them in turn.
TALENT: All successful armies have a core of Elite troops, the most talented soldiers around whom the whole army revolves. They might be the most physically fit, the best with their weapons, display courage and leadership during battle, or a combination of all of these; they are committed to training for battle and do so relentlessly. The Persians had The Immortals, Alexander the Great had his Companion Cavalry, Caesar had the Tenth Legion, the USA has the SEALS, the list goes on and on. And while these very special troops have always been relied upon in battle to be the foundation of the army, wise commanders have also always known they are virtually irreplaceable and would never squander them unnecessarily.
Related to business these are the high achievers within an organization, the people who do not need to be told what to do every minute of the day, who take the initiative and have mastered excellence, and who, when given a task, may be counted on to finish it regardless of obstacles. They are the heart and soul of the organization, and savvy management knows it.
They are seen in their organizations as the best of the best, and must be treated accordingly, because the deadly by-product of their higher level of achievement is a much higher level of stress. Chronic Stress is lethal. For soldiers this may become Post Traumatic Stress Disorder, and in the business world it could be something even more deadly: heart attack or stroke.
But the better the employee, the more that management has to be careful not to burn them out. Armies know that Elite troops need special attention, their higher level of stress means they must be rested more and rested better; and just as Elite soldiers can burn out, Elite Employees can too, if their employer is not careful.
Rejuvenating Talent is essential for success. Employees are a company's biggest asset, and the better the employee, the bigger asset they are. Protecting those assets is an employers first and primary duty; without those assets the organization cannot function. Elite employees may sometimes not take enough downtime to release their stress, so the employer must step in with concrete steps to mandate that their best talent does not burn out, or worse, defect to the competition where conditions are better.
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