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Archive for April, 2008

Compensation and culture

Thursday, April 24th, 2008

Image credit:a_kartha

Speaking (Tuesday) of corporate culture, one of the most important fundamentals of good corporate culture is fairness—especially in compensation.

Salary differences should be based on factual points, not charm, politics, or managerial whim.

So, how do you draw the lines to achieve fairness?

Number one with most people is peer relativity.

The people working in a small local company don’t compare their compensation to those working in a Fortune 500, nor to their bosses. They compare it to their peers, i.e., people with a similar job, background, title, company, industry and location.

Further, smart compensation policy recognizes that not everyone with the same title deserves the same compensation.

Fairness is also dependent on honesty. Over the years companies have adopted policies saying that compensation was confidential and not to be discussed; managers make candidates offers and tell them not to share it with their new colleagues—amazingly, they not only believe that it will stay private, but they’re shocked when it doesn’t.

They shouldn’t be—telling people ‘not to tell’ is like waving a red flag at a bull, it sets up the assumption that ‘there’s something going on’.

Want practical advice on structuring a fair compensation plan? We’ll do that tomorrow.

Are your compensation plans fair?

Wordless Wednesday: innovate and soar

Wednesday, April 23rd, 2008

Post from Leadership Turn Image credit: elvissa

soar.jpg

Please visit my other WW: the human team

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Wordless Wednesday: the human team

Wednesday, April 23rd, 2008

Image credit: duchesssa

Check out my other WW: innovate and soar

Hats off – National Small Business Week

Tuesday, April 22nd, 2008

Post from Leadership Turn Image credit: duchesssa

If you have less than 100 people and your company is in the US you are, by definition, a small business.

spotlight.jpgWithout your vision, hard work and sheer guts our country would be in far worse shape and our lives would lose much of their richness and depth.

Leadership Turn takes this opportunity to salute the thousands of small businesses that have created “more than nine out of 10 new jobs over the past 15 years.”

Considering what you do for us the name should be National Small Business Thanksgiving Week!

Have you hugged your favorite Small Businesses this week?

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What leaders DO: innovate in a downturn

Tuesday, April 22nd, 2008

Post from Leadership Turn Image credit: kishbee

Yesterday’s stats showed that lay-offs aren’t the smartest move a company can make even though they make Wall Street happy.

Bob Turek over at Project Management 411 says, “When the going gets rough, we go to the innovative companies who see reduced financing costs and lulls in demand as opportunities to upgrade their technology and get ahead of the competition.”

Internal innovation is good, but the smartest companies go further using one of two approaches. Both approaches succeed when management is comprised of passionate leaders who are long-term thinkers, know how to plan and are talented at executing.

brass_ring.jpgFirst, there are the companies that see a downturn as an opportunity to grab the brass ring, ignoring the naysayers.

The example that always comes to my mind is Nucor Steel and its CEO Daniel R. DiMicco, who used the last crash (2001) to buy ten steel mills for pennies on the dollar. When the economy turned, as it always does, “Nucor’s profits soared seventeenfold, from the $62.8 million earned in 2003 to $1.1 billion in last year [2004]”

Then there are the companies that totally ignore economic ups and downs to always focus on innovation, large and small, inside and out.

My favorite example in this class is Amazon and Jeff Bezos—the CEO that Wall Street loves to hate. They hated it when he expanded out of books; they predicted Amazon’s demise when is used its expertise to do fulfillment for other companies and again when Amazon opened its vast computing power to developers and now to companies.

Bezos’ attitude is encapsulated in this short interview ending with a perfect wrap when asked if he feels vindicated by the company’s success.

‘No. I’ve taken plenty of criticism, but it’s always been about our stock price and never about our customer experience. After the bubble burst, I would sit down with our harshest critics, and at the end of the meeting they would say, “I’m a huge customer.” You know that when your harshest critics are among your best customers, you can’t be doing that badly.”

What’s your plan for innovating during this downturn?

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What is corporate culture?

Tuesday, April 22nd, 2008

Image credit: duchesssa

There are as many definitions and explanations of corporate culture as there are academics, consultants, coaches and every person who works now, has worked in the past or plans to work in the future.

But what about the ‘corporate’ in corporate culture?

What is it other than a piece of paper showing that the government recognizes its existence and it owes taxes?

Is it the office buildings that house it? The manuals that explain it? The stock that represents its value?

Actually, a corporation isn’t an entity at all. It’s a group of people all moving in the same direction, united in a shared vision and their efforts to reach a common goal.

That means that the ‘culture’ in corporate culture is about those people and their MAP (mindset, attitude, philosophy™).

What’s your definition of corporate and culture?

How smart are layoffs?

Monday, April 21st, 2008

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No matter what you call it, eliminating people isn’t the smartest thing to do as statistics show and any employee will tell you—including the ones who aren’t directly affected.

According to Think Before You Fire in Business Week,

“For companies, layoffs are a quick, albeit unpleasant, way to trim costs, right? Not necessarily. A recent study of 200 enterprises found that even a modest downsizing can unleash an exodus of valuable employees. For instance, companies that laid off 0.5% of their staff experienced, on average, a turnover rate of 13%—compared with an average turnover rate of 10.4% at companies that didn’t do layoffs. (Academy of Management Journal)”

And that additional 2.6% of turnover are rarely the folks you’d choose to lose.

Way back in 2001, when thousands were being laid off, Frederick Reichheld, author of The Loyalty Factor (1996) and Loyalty Rules! (2001), showed in carefully researched studies that a 5% improvement in employee retention translates to a 25%-100% gain in earnings.

The two biggest advantages in cutting people are that layoffs take the least creative effort from management and Wall Street approves.

Keeping your people and juicing innovation and productivity when times are difficult takes work—lots of it.

What do you plan to do?

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Book Review: Total Alignment: Integrating vision, strategy and execution for organizational success

Monday, April 21st, 2008

Riaz Khadem’s Total Alignment: Integrating vision, strategy and execution for organizational success is scary. It’s scary for three reasons

  1. the entire book makes perfect sense;
  2. the approaches and solutions it offers are devastatingly simple; and
  3. it’s a fast (just 150 pages), fun read—not always the case with business books.

Its focus is larger companies, although young companies that are planning on substantial growth can benefit from implementing the structures described when appropriate.

But the great difference is that Total Alignment is written as a story, complete with a hero and a villain and a guru. It’s fast paced, weaving the needed how-to’s into the story, showing how they work, how to draw people in, including the skeptics, and the results from implementing the ideas and philosophy presented.

No smoke, no mirrors.

In the end, it takes the thoughtful CEO to a new vision, one beyond the usual thinking and beyond just the success of his company.

“Total Alignment is aligning the [corporate] vision itself with the urgent needs of humanity.”

Once a company is completely aligned internally then true total alignment is achieved by “making a positive contribution to the local, national, and world community while maintaining the company’s financial and operational advantages.”

For those of you who aren’t in agreement with business’ social responsibility fear not, it’s only brought up on the last three pages and you can easily skip them.

Please add your thoughts on Total Alignment now or come back and do so when you’ve read it.

Image credit: Infotrac

Quotable Quotes: the essence of money

Sunday, April 20th, 2008

Post from Leadership Turn Image credit: patyvo

It’s Sunday, so get out your thinking cap (or fire up Google) and offer up some competing quotes that also embody the true essence of money.

money.jpg“Banking establishments are more dangerous than standing armies” — Thomas Jefferson (Recently proven true once again.)

“Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.” –Will Rogers (Yup, life takes Visa—or MasterCard or Amex or…)

“Money is the most egalitarian force in society. It confers power on whoever holds it.” –Roger Starr (That’s why you never see a poor politician.)

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The manager you love to love

Saturday, April 19th, 2008

Image credit: Eddie~S

Yesterday I described the manager you love to hate, so it’s only fair to offer up the flip side of that coin today.

What’s a major difference between the manager you like and the one you rave about?

What sets one above the other?

Rave-generating managers don’t just listen; they truly hear what you say.

More importantly, they have no problem saying

  • I don’t know.
  • Tell me more.
  • Educate me.
  • Please explain.
  • Let’s discuss it.
  • What do you think?

And especially

  • I was wrong.

Which kind of manager do you have?

Which kind of manager are you?

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