Guy Kawasaki said, “Don’t assume you’re done [after you've hired someone].”

No kidding. After 30 years it still never ceases to amaze me that managers bust their butts spending time and money finding the right person, craft the offer, close the candidate and then go merrily on their way assuming that the person will show up at the appointed time—even if that time is two or more weeks in the future.

A lot can happen in two weeks.

When they do show up these managers do little-to-nothing to integrate them into the team, culture or work—other than to assign projects with a sink-or-swim attitude.

These managers complain when new hires don’t ‘hit the ground running fast enough’ and are totally perplexed when they either burn up or burn out and leave.

What motivates mangers to act like this? Sometimes ignorance, but mostly just not thinking.

Remember that

• People aren’t water faucets. They don’t turn off emotions and feelings in the morning when they leave for work. They’re present in all their chaotic, sloppy splendor—but rarely admitted or discussed. Many of these emotions and insecurities will surface during traumatic times. According to the shrinks, changing jobs, even voluntarily getting out of a terrible situation, is one of the three greatest traumas that people face. (The other two are relocation and divorce, because unlike death people can play the ‘what if’ game forever.)
• Resigning isn’t easy; it’s not comfortable and people don’t like doing it. And the longer they’ve worked for the manager/company the harder it is, especially when nothing is really wrong.
• Even in this economy, counteroffers still happen although they’re counterproductive. They hurt the company, the group and the individual. The ones that work are the exception to the rule—probably less than 5%. As far back as 1983, the WSJ National Employment Weekly was printing articles warning about the dangers of accepting counteroffers; nothing’s changed; if anything it’s gotten more so.

Once your candidate has accepted, take an assumptive approach when talking about anything in the future. Use phrases such as: When you’re here, After you start, etc.

Then lock in your hire with these seven simple acts (simple once you think of them).

1. Call her after her resignation to make sure things went smoothly.
2. Assign a buddy from the team who can supply help and information on a proactive basis.
3. Give her information to read to familiarize herself with your market, company and its products.
4. Discuss the first project and give her information to take home.
5. Besides you and her buddy, have various members of the interviewing team call her occasionally to tell her how much they’re looking forward to working with her.
6. Solicit her opinion; ask for her suggestions.
7. Don’t overwhelm her, but make her feel that she’s already a valued member of the team.

Be sure to come back tomorrow and learn what to do after they start work.

Image credit: acerin on sxc.hu

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Many economic pundits are predicting the end of this economic meltdown (see previous post). Chalk those predictions up to the optimism of springtime and the need to fill a news cycle.

While rates of decline for various economic indicators may be decreasing, the excesses that created this meltdown will take years to work through. The ham-handed responses by government and many businesses will only delay the eventual recovery. This is only a break in the winter weather.

But even as the economic meltdown is only now approaching its nadir, a few new businesses may find this to be a fertile time to set up shop.

Consider the single greatest expense and challenge of most new businesses – finding and attracting talented workers, trained and immediately available for interesting work.

Currently the US economy provides 155 million jobs. This meltdown has reduced employment through five distinct mechanisms shown in the table below:

Given that the measured statistics are usually undercounts and that these unemployment/underemployment numbers will grow in the next 12 months, likely over 32 million workers (over 20%) in the US will have talents and time available to participate in another business.

For many companies, payroll costs represent over 65% of total expenses. For new ventures, personnel costs can be much larger, up to 90% of expenses. In this environment, many workers are searching for work.

New ventures traditionally offer below-market compensation for their workers. However, they offer other significant benefits.

Typically, new ventures offer broader scope in each job, better growth opportunities, ability to make large, direct, measurable contributions to the organization, and the enthusiasm of working in a small, close-knit team. Some new ventures offer profit participation or stock options. For unemployed or underemployed workers, these benefits can be significant, even when the cash compensation is low.

Technology and the recession have dramatically reduced other business operating costs. The cost of computers, phone systems, and tele-conferencing have dropped. Office space is cheaper, and home-based employees can cut that cost even further. Travel, where necessary, is cheaper than any time in the past ten years.

Even without easy availability of capital for start-ups, this recession may offer fertile ground for new ventures and with the added benefit of retaining far more of the equity.

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Reputations are fragile things and company reputations are no different, but in the brave new world of YouTube, Twitter and blogs their fragility has skyrocketed.

Pity Domino’s Pizza whose Conover NC franchise employed two of the stupidest thirty-somethings available. They posted a prank video on YouTube (it’s been removed) that burned through the social media world faster than any recorded wildfire and was just as damaging.

In a 2007 post I quoted Chris Gidez, head of U.S. crisis management for the public-relations firm Hill & Knowlton, “Once it’s on the Web, it’s like taking the rods out of a reactor. Companies have to work harder to determine, ‘Do we need to worry about this?’ “Overreacting can call more attention to a rumor than it gets on its own, I’ve had clients who wanted to respond to a problem with guns blazing, and I say, ‘Hold on a second. You might be telling a larger universe of people about a problem they didn’t know existed.”

I think that Gidez may be giving different advice these days, since it’s doubtful that any rumor, prank or sin will die a natural death.

“If you think it’s not going to spread [in social media], that’s when it gets bigger,” said Scott Hoffman, the chief marketing officer of the social-media marketing firm Lotame. “We realized that when many of the comments and questions in Twitter were, ‘What is Domino’s doing about it’ ” Domino’s spokesman, Tim McIntyre said. “Well, we were doing and saying things, but they weren’t being covered in Twitter.”

By Wednesday afternoon, Domino’s had created a Twitter account, @dpzinfo, to address the comments, and it had presented its chief executive in a video on YouTube by evening.”

The real problem today isn’t the speed and transparency with which information moves, but rather it’s that the stupidity factor is just as bad, if not worse, than it ever was.

Dr. Jay Geidd, NIH: “The part of the brain that fills in last is the part involved in decision-making and controlling our impulses.”

The articles on teen brain research all indicate that the brain matures around age 25 or later, but it seems the availability of instant fame, no matter how fleeting, has pushed brain maturity way past that mark increasing the level of stupidity that people find so amusing—think YouTube and AFHV.

This weekend talk to your kids. Show them the article; tell them about the legal charges filed and the civil suite in the works. And ask them what business in it’s right mind would ever hire people whose judgment is this bad?

Image credit: John Karakatsanis on flickr

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Discrimination comes in many forms.

All of them are grounded in stupidity, but it’s age and appearance that I want to focus on today.

Layoffs are always a time when age is in the limelight, but this time it’s working in reverse.

“The share of older Americans who have jobs has risen during the recession, while the share of younger Americans with jobs has plunged.”

It seems that at least parts of corporate America have learned to see past the obvious.

“…employees whom companies have invested in most and who have “demonstrated track records…tend to be more experienced and are often older.”"

So some companies have discovered that years of experience have substantial value when it comes to the success of the company.

But what about appearance? How much is hearing influenced by how someone looks at first take?

What better venue in which to consider this than the original British version of American Idol where the contestants are mostly young, generally good-looking and always bust their tails to make an impression.

How well do you think a slightly frumpy-looking 47 year old woman would fare under the scathing tongue of Simon Fuller?

How much do you think talent would offset the obvious visual assumptions made by both the judges and the audience?

Watch the judges and audience reaction carefully before Susan Boyle performs and how quickly it changes when she starts singing (embedding is disabled on this video); check out some of the more than 50 thousand comments.

Think about what happens when a “Susan” comes to interview; how well do you hear past her (or his) appearance?

Then come back and share your thoughts with us.

PS For a fascinating look at Susan read this article in the NY Times.

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Now learn about sneaky recruiting

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In a post last week I asked for opinions on the ideas presented in a series of articles in Business Week on managing smarter but especially one that claims that “treating top performers the same as weaker ones is ’strategic suicide’” and said I would add my thoughts in a future post.

Bob Foster left two interesting comments (well worth your time to click over and read). Regarding pay for performance he tells the story of a company where everybody from the CEO down all quit.

“Taking on the task to salvage the company, I hired new people that met unusual qualifications: they had to be qualified for the job they were applying for; they had to be unemployed and available immediately; they had to work at sub-standard wages; they had to work while knowing the company could close at any minute; and they had to work without supervision. The team that came together produced a highly successful company, and it was not because of high pay, or performance bonuses (there were none). The team stayed together, and performed, because of mutual respect, trust, appreciation, and consideration—people were ‘valued.’ To me, this is the truest form of ‘pay for performance.’”

I agree that trust was one of the key ingredients in what Bob accomplished, but it wasn’t the only one—or maybe I should say that it needs to be based on fairness and honesty.

Bob says the pay was ’sub-standard’, but I assume that it was universally sub-standard relative to position and experience. If he had chosen to pay part of the team, say 10% more than their peers, the team wouldn’t have coalesced.

And that is exactly why I disagree with the idea of paying top performers, AKA stars, big sign-on bonuses or higher salaries than their peers.

• Based on my own experience, 98% of star performers become stars as a function of their management and the ecosystem in which they perform. Change the management, culture or any other parts that comprise that ecosystem and the star may not survive.

• Just as a chain is as strong as its weakest link there is no star in any sport, business, media, etc., who can win with a team that is subject to constant turnover and low morale.

Consider this common example.

Two people are hired at the same time with the same background, same GP0 and similar work experience, but with the one exception. One graduated from a ‘name’ school and the other from a community college. Starting salary is $50K, but the manager adds a 20% premium to the first candidate’s offer on the basis that she must be better to have gone to that school.

Neither candidate lived up to their potential because the manager made poor choices. In doing so he set both up to fail but for different reasons; one thought she had it made and the other that he was low value.

Merit bonuses fairly given for effort above and beyond acceptable performance levels make sense as long as they don’t come at the cost of developing new talent.

But one problem with ‘pay for performance’ is the pay often comes before the performance, but there are others and I’ll discuss them more Thursday. In the meantime, here are links to five posts from 2006 that give more detail on the trouble with stars.

Stars—they’re in your MAP

More about stars and MAP

Rejects or stars?

Star compensation

Retaining Stars

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See all mY generation posts here.

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Tons of downer news these days and many managers have faced/are facing the trauma of laying off members of the team that they’ve worked so hard to build, so I thought some upbeat advice/information and stories to help you do your job better managing would lighten your weekend.

Business Week was kind enough to offer up a trove of stuff worth reading.

Some of the smartest ideas came from readers such as Autumn Parrott at Frist Center for the Visual Arts.

“We had a 25% budget cut. To help people understand the budgeting process, we formed a committee comprising only people who are not senior managers. It started conversations between departments and created a greater understanding of how our money is spent. People serve for a year. Each department gives recommendations like ‘we’re spending $70,000 a year on cleaning, so now everyone should clean their own offices and only use a cleaner once a week.’ One benefit of bringing in a variety of people is you don’t come up with the same ideas over and over again.”

This is a real winner. Sharing financial information below executive level is anathema to most bosses, but doing so increases employees’ sense of ownership which usually unleashes a barrage of cost-saving ideas.

There’s a great piece on trickle-up innovation where low-cost products developed for emerging countries are being tweaked for sale to affluent ones—the opposite of typical development.

There’s a lot more, but one in particular I’d like your opinion about before I say anything.

Please read Making the Case for Unequal Pay and Perks, come back and tell me what you think.

I’ll be posting my thoughts in a couple of weeks.

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I’m no happier about the AIG and other bonuses paid to screwed up Wall Street banks, but I’m not sure why any of us are surprised.

“In the largest 25 corporate bankruptcies between 1999 and 2002, while hundreds of billions of dollars of investor wealth and over 100,000 jobs disappeared, the Financial Times found the “barons of bankruptcy” made off with $3.3 billion.”

Giant compensation packages, guaranteed bonuses and platinum parachutes are excused by Boards and executives as necessary to attract the “best and brightest,” but here’s what’s really going on.

The ‘names’ demands outsize compensation/stock options/guaranteed bonus/etc. in order to validate their ‘brand’.

Those responsible for hiring not only meet the demands, but even exceed them in an effort to attain or sustain the company’s reputation as a better home for ’stars’—the more stars you have the greater the bragging rights— mine’s bigger than yours in high school locker room talk.

Now let’s consider the folly of this attitude.

Those hiring often seek a name brand in the mistaken belief that the brand comes with a warranty that guarantees good results.

But no matter who you hire you’re actually paying for their past performance, which is always influenced by

• circumstances—boss and company positioning in its market and industry
• environment—culture and colleagues;

and let us not forget that minor factor

• the economy.

The hiring mindset is that everything the brand accomplished was done in a total vacuum and dependant only on the brand’s own actions, therefore changing every single surrounding factor will have no impact on performance.

Put like that it sounds pretty stupid, doesn’t it.

This is one of the prime reasons that so many CEOs bring their ‘own team’ over when they move, as do managers all the way down the food chain—they know they didn’t do it alone.

CEOs aren’t like movie and rock stars whose very names draw consumers into spending money—nobody ever bought a product from GE because Jack Welch was CEO, nor do they carry Jobs iPods—so why pay them that way?

Moreover, assuming that performance occurring during an expansion is a valid yardstick for performance in general, let alone a downturn, is sheer idiocy.

You have only to remember the difficulties faced by people whose management skills were honed between 1991 and 2000, the longest expansion in our history. When the recession hit in March of 2001 they had no experience whatsoever of how to drive revenue or manage in a down economy.

That recession and the previous one in 1990 lasted only 8 months each. The longest recession we’ve had was 2 years, January-July 1980 and July 1981-November 1982, and that one had a 12 month break in it. This means there are a very small number of managers with any actual experience managing in anything even close to what’s happening now.

The current recession officially started in December 2007, so it’s already 15 months old and the end isn’t in sight.

What experience makes these folks the ‘best and brightest’ for today’s world?

Just what the hell are companies still guaranteeing oversized compensation and exorbitant exit packages when now is definitely the time to pay for future performance—no guarantees.

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The CEO reputation isn’t exactly in the ascendancy these days, in fact, as a group it’s pretty well tanked. So it’s sad to see them, again as a group with exceptions, strolling down another truly stupid path—no time for talent worries. “It’s no surprise that global leaders raked financial pressures to cut costs (82.95%) and rapid market decline (54.36%) as their toughest business challenges. Unfortunately, “Loss of leaders in key areas or insufficient talent to quickly adapt to change” (5.30%) fell to the bottom of the list.” Dan McCarthy at Great Leadership spells out the details, including a link to the survey. Whoo hoo, short term thinking at it’s best.

Jim Stroup at Managing Leadership eloquently discusses the stupidity (my word) of inspiring emotional connections in ‘followers’.

“That’s what the modern individual leader wants: uncritical commitment, steadfast devotion, unquestioning obedience. There is little room in contemporary leadership theory for qualified, deliberative followership; extended, modified, or rescinded at the initiative of the follower.” Scary attitude!

Finally, to add a little levity to a day dedicated to stupidity, past and future, here’s a quick explanation of the banking crisis for those of you who still don’t understand the MAP that got us into this mess.  It’s a little story that’s making the rounds on the Net. Hat tip to KG Charles-Harris who sent it to me.

Young Stern moved to Texas and bought a donkey from a farmer for $100.00. The farmer agreed to deliver the donkey the next day.

The next day he drove up and said, ‘Sorry son, but I have some bad news, the donkey died.’
Stern replied, ‘Well, then just give me my money back.’  The farmer said, ‘Can’t do that. I went and spent it already.’

Stern said, ‘OK, then, just bring me the dead donkey.’

The farmer asked, ‘What a ya gonna do with him? Stern said, ‘I’m going to raffle him off.’

The farmer said ‘You can’t raffle off a dead donkey!’   Stern said, ‘Sure I can. Watch me. I just won’t tell anybody he’s dead.’

A month later, the farmer met up with Stern and asked, ‘What happened with that dead
donkey?’

Stern said, ‘I raffled him off. I sold 500 tickets at two dollars apiece and made a profit of $898.00.’

The farmer said, ‘Didn’t anyone complain?’  Stern said, ‘Just the guy who won. So I gave him back his two dollars.’

Stern now works for Goldman Sachs.

Or did until he was laid off.

There, do you feel better now that you know the truth?

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