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Can Awards Demotivate?

Monday, February 10th, 2014

http://www.flickr.com/photos/fsnorthernregion/5061121998/Ian Larkin is an assistant professor Harvard Business School and he shared some interesting research last spring.

The study focused on the effect of rewards, and although the subjects were laundry plant workers the results apply to knowledge workers, too.

The plan rewarded workers for being on time and not missing days.

The results were not as expected and productivity dropped.

In other words, the rewards plan ended up demotivating the workers.

Why?

Because it was easily gamed and structured to reward actions that were an expected part of the job, such as being on time.

Rewards should always be for going above and beyond the job description, showing initiative, creativity, reaching out to support not just the team, but others with whom they interface, etc.

It’s also important to remember that money isn’t always the best reward.

Most studies have proved that praise is an excellent driver of performance, productivity and good feelings—public recognition/kudos usually carries more weight than bought rewards such as meals or movie tickets.

“You can’t put a price on that. The recognition of hearing you did a good job and that others are hearing about it is worth more than money.”

The main thing to remember is that awards aren’t a solve-all panacea for an ailing team.

“You can’t say awards are good or bad. It depends on how they’re implemented.”

And they certainly won’t/can’t replace good management skills.

Flickr image credit: FSNR

 

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Harley Davidson: Against the Tide

Sunday, February 2nd, 2014

http://www.flickr.com/photos/gonmi/8719381711/

Harley-Davidson is my hero.

Not because I’m a motorcycle nut, but because they do everything I believe makes a company successful—not to mention all the stuff about which I know nothing.

What I do know is that Harley proves there is more than one way to skin a cat.

They didn’t outsource manufacturing; they didn’t bust their union; they didn’t dump people for robots—in fact, there are no robots on the main assembly line.

They did redesign production to take advantage of the knowledge inherent in line workers with an average tenure of 18 years.

There are around 1,200 different configurations, and a new bike starts its way through the production line every 80 seconds. Virtually each one is unique, and workers have no idea what’s coming 80 seconds later. Surprisingly, robots can’t adjust on the fly like that.

They did spread 150 problem-solvers through the 5-6 man production teams that hand-build each bike.

Every time a new bike came down the line, it took a few extra shoves to push it into place. In fact, it took an extra 1.2 seconds. But Dettinger, who had spent some 20 years at the York plant, knew that every second counted. With 400 motorcycles built each shift, on two shifts a day, an extra 1.2 seconds per bike added up to 2,200 lost bikes annually. Millions could be lost in revenue. Maybe it wasn’t such a small problem.

Each problem-solver has the same core mission: “to monitor his small section of the production line and search for better ways to make motorcycles.”

For decades, management and economists have driven a mantra that to prosper manufacturing in the US meant no unions, low wages and no benefits.

At Harley, costs have fallen by $100 million and the stock is trading around $62 (it was around ten in January 2009).

Most importantly, from a customer’s viewpoint, what used to be an 18 month wait from order to pick-up is now two weeks.

Harley went against the tide and the results are proof that the “experts” aren’t always right.

Flickr image credit: Gonmi

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Ducks in a Row: the Need to Change

Tuesday, January 21st, 2014

http://www.flickr.com/photos/44148352@N00/3726480621/

Media, including me, have termed Millennials the “entitled generation,” but, as with most things, there are two sides to the coin.

Over the last few years I’ve written about what I call “aMillennials” and I still think the term is apt.

As they age, the difference has become clearer.

Some Millennials still seem to think they are entitled to a job because they are there and promoted because they show up; in general, they feel they are owed something by the world at large.

aMillennials believe they should be hired because they can contribute, challenged to grow and that hard work will get them promoted.

They also have the silly idea that there is more to life than work.

 “There’s a huge gap across the generations in terms of how people look at the whole question of time and commitment and what that means,” said Stewart D. Friedman, director of the Wharton Work/Life Integration Project and the author of “Baby Bust: New Choices for Men and Women in Work and Family.”

They crave transparently, have little patience with corporate games and vote with their feet when stymied.

“People are just more disaffected now with that kind of lifestyle and want to have a greater sense of control,” Mr. Friedman said. “Where companies don’t provide that sense of meaning and purpose, their brand as employer is weakened. They’re not going to be able to compete for the best and the brightest.”

aMillenial-style entitlement is even invading the hallowed halls of Wall Street.

“The longstanding tradition of 100-hour work weeks, that’s not going to be easy to change, but I applaud these efforts,” Mr. Friedman said. “The young people, after two years in an analyst program at a bank on Wall Street, they’re burnt out, they’re saying ‘I don’t want to live like this.’”

Given the attitude, you can expect careers, from medicine to finance, that have historically included long hours, total immersion, high stress and total commitment to change and the changes will be wrenching.

What it means to business, both large and small, is a willingness to provide meaningful work as opposed to just a paycheck—no matter how fat.

Please join me Friday for a first person look at this change and another view on what’s driving it.

Flickr image credit: Jannes Pockele

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Entrepreneurs: Craig Bohl Wins without Stars

Thursday, November 14th, 2013

http://www.sxc.hu/photo/982534Parallels are constantly drawn between business and sports—building and motivating teams, leading in all its many guises and, of course, the importance and power of stars—whether first round draft choice or coder from the hot startup.

I am not a believer in stars and have written numerous times on why they are a bad idea.

I frequently told I’m wrong, especially sports-wise; I’m told that every winning team has stars or they wouldn’t be winning

Not true and thanks to Craig Bohl, North Dakota State’s football coach, I have someone to point who has a very winning team sans stars.

Since 2011, the Bison have posted Division I’s best winning percentage (36-2, .947), slightly ahead of Alabama (33-2, .943) and Oregon (32-3, .914). N.D.S.U. has beaten four Football Bowl Subdivision opponents in four years, most recently the defending Big 12 champion, Kansas State, in this season’s opener on Aug. 30, and is 7-3 against F.B.S. teams since 2006.

Bohl’s understands that with the right attitude and hard work he can build his own star team.

“A lot of our guys come from the farm or hard-working backgrounds, and we’ve leveraged that as we’ve developed our football team. It goes a little counterculture to the way college football is now, with spreads, up-tempo offenses and all those other things. We’ve taken a blue-collar approach on playing hard-nosed, physical, disciplined football, great defense, controlling the football. That’s how we’ve won.”

He’s pragmatic; he doesn’t believe his winners have to walk on water; they just need to be damn good.

“I don’t think there’s a team in the country that would absolutely destroy us, 70-0, or anything like that. Obviously, there are teams that have more talent than we do. I won’t deny that either. But I think we could hold our own with a lot of teams out there.”

Bohl’s approach isn’t rocket science, other than few other coaches want to bother building a team this way or prefer splashier players whose glory can provide a halo effect for coaches and teammates alike.

While Bohl qualifies as a star, and there is constant talk about who will lure him away, he doesn’t seem to be interested.

And he stays for the same reason talented employees always stay.

“When you find a place that fits your value system, the allure of ‘what the big time is’ is not such a big hook.”

Image credit: Ilco

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Ducks in a Row: Culture Builds Talent

Tuesday, July 23rd, 2013

http://www.flickr.com/photos/yarik-ok/7936908700/Yesterday we focused on the importance of, and managers’ responsibility for, continually building their people, so they are ready for the challenges their company will face in the future, as opposed to firing them for having the wrong skill-set.

Later on I was discussing the whole terminate vs. develop thing with EMANIO CEO KG Charles-Harris and he made an interesting comment.

There is no question that creating a good culture is essential and underinvested in.  However, there are cultural biases in the US that are different from some other countries.  And while there is something to be said for the extreme success of American business, my background is in Sweden, which has the highest number of multinationals per capita. Clearly there is something that a country of 9 million is doing right.  

While there are plenty of companies that do it right and studies to prove that doing it right is good for the bottom line, US companies are infamous for short-term thinking driven by Wall Street’s quarterly mentality.

Even when the right culture and supporting policies are in place managers at all levels need to monitor and make sure that the managers under them are encouraging their people to take advantage of them and often that doesn’t happen.
Further, great culture isn’t self-sustaining; it needs thought and TLC so it can grow and change as the company grows and changes, without losing the traits that make it great.

But if a culture that supports building people pays off, why doesn’t it happen more often?

The simple, but sad, answer is that building and sustaining a great culture that develops its people, as opposed to considering them expendable, is work—and people are lazy.

Flickr image credit: Yarik. OK

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Why Netflix’s Patty McCord is (Mostly) Wrong

Monday, July 22nd, 2013

http://www.sxc.hu/photo/1193409“Troy,” a CEO I work with off and on, sent me a link to an article referencing Netflix Chief Talent Officer Patty McCord’s explanation of why you should immediately fire underperformers to explain (justify) his own actions.

McCord’s core advice is to think six months in advance, about what the company can and should do better, which will highlight the people who don’t have the skill set or drive to get there. (…) “I tell an employee I’m going to put you on a performance improvement plan, but the truth is they don’t actually know how to do what I need someone in their job to do. I did my six months out thing and realized she wasn’t qualified, and I put her on a plan even though it’s not an issue of performance, it’s an issue of skill set.”

This was the latest salvo in our ongoing disagreement on managerial responsibility when it comes to people—a subject we vehemently disagree on.

Troy says that young, fast-growth companies have no time to develop their people and when you have a lot of capital and very stringent targets to achieve [Wall Street quarterly reports, ed], you have to think differently.

I say that it’s mostly management’s fault, especially in larger companies like Netflix because they should be growing their people all the time so their skill-set is ready for the challenge; obviously, I’m not referring to those employees who need to be dragged kicking and screaming into their future.

Startups, fast growing and established companies all need to add the right talent to get where they are going.

Good managers assess the situation, current and future, and inform employees regarding their promotional opportunities.

Further, good managers keep them informed of what new skills they will need in the future, as well as the best way to acquire them.

I read about and know personally thousands of good managers who work hard to grow their people, so they are ready for the new challenges coming down the road.

There are also plenty of companies with good programs in place that bad managers won’t use.

Yes, people deserve to know the truth regarding their opportunities and McCord’s approach when termination is the right course is extremely humane—but few companies would spend the resources.

“Instead, I could have told the employee, ‘here’s what I’m going to need six months from now, and here’s the talent and skills I’ll need. Then you tell her, ‘It’s not you. I don’t want you to fail. I don’t want to publicly humiliate you.’”

However, if that person’s actual manager had been doing his/her job the situation McCord describes might never have happened.

That’s the part that Troy doesn’t get.

Upgrading employee skills and adding new ones is an ongoing process that requires better and stronger management skills and more work than McCord’s approach—hers is the easy way out.

During my 40+ years around the workforce there have always been managers who build their people and those who don’t.

  • Those who do build understand that people are holistic and it takes more effort to instill cultural understanding and rebuild group morale after someone is terminated than it does to keep upgrading skills.
  • Those who don’t build believe that it’s easier to replace than train/build employees.

But demographics are against them. Replacing people will only become harder as the economy improves and the number of working people and their experience continues to go down.

stock.xchng image credit: arte_ram

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Management is Like Coffee

Wednesday, June 12th, 2013

http://www.flickr.com/photos/25187937@N05/5525163305How much management/coaching is too much?

I hear that question a lot.

Most managers want to do a good job and are looking for ways to improve.

But, as one commented recently, if you do everything recommended by the experts you would use so much of each person’s time that productivity would tumble and even the best coaching would have a negative impact.

Which is why I say that management and coffee are similar.

In the right amount coffee is good for your brain and may help you live longer.

The right amount of management/coaching is good for the brain in that it provides challenges that foster growth; it also lowers frustration and stress, which enhances mental and physical health.

According to the research, the “right” amount of coffee is around 20 ounces a day, i.e., one venti-size Starbucks.

That equates to the most effective management/coaching, which provides all the information needed to do the job at one time (not more nor less) and then gets out of the way while staying accessible if needed.

Many of the coffee-fueled are more likely to drink three to five ventis a day, which is detrimental to health and longevity.

A comparable amount of management/coaching is detrimental to health, productivity and retention.

Flickr image credit: Kurtis Garbutt

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Who is Your Customer?

Monday, June 10th, 2013

http://www.flickr.com/photos/angelaarcher/5166009978/Customer service is a major topic these days (more on the tomorrow); as is employee retention, but do they really have anything in common?

Absolutely.

Every manager, from team leader to CEO, is also a customer service manager, because your people are your customers.

That’s right, customers.

More accurately, that makes you an ESM—employee service manager.

Why do you service your people? To

  • help them achieve their full potential;
  • assure high productivity;
  • lower turnover; and
  • create an environment that’s a talent magnet.

How do you service your people? By

  • cultivating the kind of MAP (mindset, attitude, philosophy™) that truly values people and understands how important it is to manifest that;
  • offering high-grade professional challenges to all your people and making sure that they have the resources and all the information necessary to achieve success;
  • fostering fairness so that people know they are evaluated on their merits and favoritism plays no part; and
  • always walking your talk and living up to your commitments.

What’s in it for you?

  • Better reviews, promotions and raises;
  • increased professional development;
  • less turnover and easier staffing; and
  • what goes around comes around—everything that you give your people will come back to you ten-fold!

Flickr image credit: Angela Archer

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The Danger of Denial

Wednesday, May 29th, 2013

www.flickr.com/photos/livenature/211469544/Ask any working woman (or gay/lesbian or person of color) and they will tell you that discrimination is alive and well.

Ask their executive bosses and they will tell you that’s true, but not at their company.

In other words, “they” discriminate, “we” don’t.

Or, as Jonathan Segal, partner at the law firm Duane Morris LLP so aptly puts it.

We all know there is unconscious bias. It’s just others who have it. We all know there are Boys’ Clubs. It’s at the company next door.

It’s hard for many people to believe that their organization could have a Boys’ Club. That they could be part of a Boys’ Club is inconceivable because it is inconsistent with how they see themselves.

In some ways, such denial is not unlike the denial of addiction. The first step in recovery is acknowledging the problem. The first step toward dismantling a Boys’ Club is to acknowledge it may exist.

Of course, that denial only lasts until you are sued.

Flickr image credit: Franco Folini

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Ducks in a Row: Red Hat Culture

Tuesday, April 9th, 2013

http://www.flickr.com/photos/ny-insurance/6813596277/These days most CEOs acknowledge the importance of culture.

Most incoming CEOs either want to protect and extend that current culture (think Apple) or radically change one that isn’t working (think Yahoo).

There is also a percentage that want to revamp the culture in their own image even whether the current culture is working (think Home Depot) or not (think Penney’s, which I wrote about last month, and that just fired their ex Apple CEO yesterday).

Red Hat CEO Jim Whitehurst was in the first group when he joined in 2007, but it was a real stretch (more like an unexpected bucket of ice).

He came from Delta Airlines command and control culture to a cultural meritocracy based on an open source mindset.

He calls it a “meritocracy” meaning leaders arise based on their brains, not their spot on an org chart.

The chaotic nature, the fact that people can call me up whenever and often call me an idiot to my face. We yell and we debate and we have these things out. Our culture matches the culture around open source, so the people who want to be involved in open source feel at home.”

The proof that it works is in the pudding of revenues and retention.

Red Hat, the first and only open-source software maker to crack $1 billion a year in revenues, is growing like mad.

The company has about 5,700 employees now, hiring about 1,000 workers in 2012. It will hire another 600 to 800 in 2013.

Yet the attrition rate of his R&D group—the company’s biggest group of engineers—is only 1.5%, compared to an industry average of about 5%.

Those are numbers any CEO would be bragging about, no matter what industry.

While merit rules and open source attitudes are sacred, Red Hat is in no way a democracy.

Red Hat still has managers and those managers are still responsible for decisions.

“It’s about transparency not democracy, I can make wildly unpopular decisions and at times I have to do that … as long as I have gotten feedback and articulated my reasons clearly, I can do that.”

It doesn’t need to be. People don’t want to work in a company where decisions are based on majority rule; what they want is to be heard.

They want to know that their colleagues, whether bosses, peers or subordinates, will listen to them and discuss the merits of their thought/idea/complaint no matter who they are or what they do.

Even if you didn’t click any of the above links be sure to check out these 12 Red Hat Management Tips.

The more you implement them the more things will change or, as I keep telling clients, to change how they act change how you think.
Flickr image credit: Dave Lobby

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