A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

Last fall I commented on Zynga’s foot-in-mouth incentive stock errors; now it’s Groupon’s turn to open-mouth-insert-foot and they’ve done a bang up job—and not for the first time.

Once again Groupon says it needs to revise its numbers and once again the revision is in a southerly direction (along with the stock price).

Investors, whether co-founders, friends, family, angels or VCs, let alone the public markets, do not look kindly on management that gets its numbers wrong.

They may excuse it the first time, but from then on every restatement becomes a serious blow to the management teams credibility and integrity, not to mention the overall effect on trust.

Perhaps Groupon drank its own Kool-Aid (a major no-no), since it acts as if its golden boy status excuses it from the mundane requirements, such as accurate sales reports, faced by other companies.

I understand that startups love to brag about their hyper growth and lack of bureaucracy, but when internal controls are counted as bureaucracy the company is headed for a fall.

On another note, if you are a small biz looking for a successful approach  to daily deals that has the metrics in place to really measure the value and will work with you to maximize where you already are check out this 14 year old alternative, with references up the wazoo, called Constant Contact.

Option Sanity™ structures incentive stock grants

Come visit Option Sanity for an easy-to-understand, simple-to-implement stock process.  It’s so easy a CEO can do it.

Warning.
Do not attempt to use Option Sanity™ without a strong commitment to business planning, financial controls, honesty, ethics, and “doing the right thing.”
Use only as directed.
Users of Option Sanity may experience sudden increases in team cohesion and worker satisfaction. In cases where team productivity, retention and company success is greater than typical, expect media interest and invitations as keynote speaker.

Flickr image credit: HikingArtist

Are you familiar with KISS? It stands for “Keep It Simple, Stupid” and is the best guidance for developing your culture.

KISS culture is a product of the boss’ MAP (mindset, attitude, philosophy)™.

KISS culture attracts the best people and is a powerful force for retaining them.

A few years ago I wrote about KISS culture and this seems like a god time to revisit it.

KISS Corporate Culture Instead Of Branding

A blog post from India caught my eye earlier this week. Its premise was that retention starts with hiring (absolutely true) and went on to explain how to create and use “employment branding” for recruiting.

Essentially, pretty much everything that falls under the banner of employment branding also falls within the company’s culture—call it corporate MAP—along with the necessary processes.

But corporate culture isn’t static, it’s a living organism that shifts and changes as you grow and hire.

So it’s about hiring to match your corporate culture and using your corporate culture to screen candidates, limiting your hiring to people who are at the very least synergistic with your it—something I first wrote about in 1999.

Understand, I’m not disagreeing with what Sourabh said, just with the way he said it.

Using jargon to cast it as ‘branding’ makes it far more complex than it needs to be—especially if you want the knowledge to permeate your organization from top to bottom.

If that’s your goal, then take the time to understand your culture, KISS* it and communicate it to your people through a Cultural Mission Statement; once they understand it they’ll talk about it using language and terms with which they’re comfortable.

The result will be a culture that sounds and is real—not one invented by the marketing department.

Flickr image credit: ZedBee | Zoë Power

Last Friday I shared the story of politically incorrect innovation that feeds  you and today I have another innovative food story.

It involves innovation driven first by the loss of a job and juiced by government bureaucracy and the nonavailability of ever getting a food cart permit. And before you start wondering which municipality in what State is causing someone grief, this story takes place in Germany—a country that makes US bureaucracy look like a bunch of amateurs.

The story involves Bertram Rohloff, who lost his job in 1997; he wanted to open a sandwich stand, but the required permits were impossible to obtain.

Rohloff started thinking; he knew that Germans love sausages and that permits made selling sidewalk food impossible, so he set out to invent a way to cook brats where neither the grill nor the sausages touched the ground.

Enter the Grillwalker.

“He designed it with an automatic cut-off mechanism for the gas, to ensure that it was safe in the event of an accident.

“Mr. Rohloff was the first person to don his invention and sell bratwurst on the street. He now has 15 employees selling sausages around the city in teams of two; they take turns wearing the grill and reloading the sausages, rolls and condiments. … He has subcontractors renting them in cities around the country, from Hanover to Karlsruhe.”

But Rohloff has bigger plans than a crew selling brats.

“And Mr. Rohloff has sold the equipment, at $7,100 a piece, to customers in Bulgaria, Colombia, South Korea and elsewhere, including one to a man in Nebraska. Just this week he sold one to a client in South Africa, which next year will host the World Cup soccer tournament.”

Rohloff’s situation necessitated his finding another way to earn a living; once he found it he needed to circumvent the bureaucracy that prevented his doing it; the result is far beyond the simple sandwich stand he originally envisioned. And those who work for him are earning more than their old jobs provided.

One guy, one idea, many people benefiting.

Anything is possible!

Watch the video and let it inspire you.

Image credit: Paul Keller on flickr

Ahh, Saturday. A day to relax, read a few blogs, learn something and maybe take in a flick. And I have it all for you today.

First off we have the yin and yang of employee motivation and retention as brought to you by CIO and HR.BLR.COM.

Let’s start with CIO and an article that explains how corporate policies and procedures kill employee excitement, passion and innovative actions.

Then click over to read a white paper by the University of Scranton’s Sarah K. Yazinski describing how you can minimize turnover and increase positive attitude in the process.

And from a small business owner who grew his business from himself to three companies with combined employment of 104 people, a concise description of how he did it and his four keys to motivating his people. I like his attitude when he says, “There’s an old saying: “A fish rots from the head down.” Corollary: It also rocks from the top.”

Finally, the movie. The NY Times review of Steven Soderbergh’s The Informant! is very intriguing, but the reader comments will give you a more diverse view with which to make your final decision.

Enjoy your weekend!

Image credit: MykReeve on flickr

Anybody who is exposed to any media knows that US automakers are on life-support, while Japanese companies are only hurting.

There are many reasons for this, but the lethal combination of low-to-no innovation, stifling bureaucracy and atrocious management/leadership is a primary factor.

Wally Bock has a great post comparing the suggestion systems at GM to that of Toyota.

“The GM employees share less than one suggestion per year each. The company uses a quarter of them. By contrast, Toyota workers make 17.9 suggestions per person per year. Eighty percent are implemented.”

The bottom line is pretty obvious.

“Toyota thinks people are valuable and have brains. GM thinks that the people with brains are the ones somewhere further up the org chart.”

There are many companies who assume that brains start at a certain level and I’ve always found that mindset hilariously stupid.

Hilarious because all of the people with brains worked most of their careers at the levels without brains; stupid because of the talent, skill and creativity completely wasted.

Image credit: MJCdetroit on Wikipedia Commons

These are dangerous times for companies. Not only is the economy in the pits, but some employees are ‘getting even’ when they’re laid off or terminated.

“The fired technology director for LifeGift Organ Donation Center pleaded guilty in Houston federal court on Thursday to illegally accessing her employer’s computer and deleting files including organ donation database records.

After being terminated, Danielle Duann, 51, repeatedly gained access to the LifeGift network and intentionally caused damage that cost the nonprofit Texas organ procurement group more than $94,000, officials said. A charity spokeswoman said the files were retrieved and no lives were put in jeopardy.”

This kind of action isn’t new; software ‘bombs’ and bugs have been planted with the threat of activation and disgruntled employees have held company information hostage as bargaining chips. But obviously, as damaging as these are, there’s no comparison to the employee who returns with a gun and starts shooting.

Sometimes the action is obvious, but when it’s more subtle, as in hostage information, managers often find themselves giving ex-employees the benefit of the doubt.

During a discussion with a group of CEOs recently KG Charles-Harris said, “But while I used to give people the benefit of the doubt about their awareness of their inherent prejudices, I have learned that they are most often aware of the consequences, but don’t care.  If one is aware of negative consequences of one’s behavior, but don’t care about the effects on others, it must be akin to maliciousness…”

Although I don’t disagree with KG, there are two prime points on which I wanted the group to focus.

No matter how brilliant an interviewer you are or what additional resources you utilize there’s no guarantee that at some point you won’t find yourself in this situation. People aren’t open books and more importantly they often act out from stresses and slights—whether real or imagined—so it’s not worth beating yourself up unless you consciously ignored red flags during the interview process or reference check. If you did, then let it be a lesson learned and move on.

Preventatives, not paranoia, are a much more productive focus.

For example, there are dozens of free technology resources on the Net that people use every day with no thought for the ramifications of control.

Companies need simple policies, not bureaucratic nightmares, when setting up document and information sharing resources, such as whiteboards, Google docs, wikis, etc., with the goal being having whatever it is always in the company’s control.

This is critical because life happens in the form of jury duty, emergencies, accidents, etc., not just the rare vindictive employee, and your company needs to keep going.

I’m no expert in this area, so look for a guest post on preventatives soon.

Image credit: flattop341 on flickr

People sometimes confuse process and bureaucracy. Process is good—it helps to get things done smoothly and efficiently; bureaucracy is bad—it’s process calcified, convoluted, politically corrupted, or just plain unnecessary.

Good process is an easy-to-use and flexible method of accomplishing various business functions. It is informal without being haphazard, and neither ambiguous or confusing.

Occasional surveys (internally asking staff and externally asking vendors and customers how things are working) alert you to when processes start to mutate.

By creating a skeletal process and a corresponding graphic in areas where it is needed (financial controls, hiring, purchasing, etc.), you lay the framework for your growth in the future, no matter how hectic.

Bureaucracy may stem from a manager, whether CEO or first level supervisor, who believes that his staff is so incompetent that it is necessary for him to spell out exactly how every individual action needs to be done. To correct this, the manager responsible must

• reduce his own insecurity,
• increase his belief in his current staff, or
• hire people he thinks are smart!

Bureaucracy is often fed by people’s fear of change, “We’ve always done it like that.” and similar comments are dead giveaways.

Another significant factor that contributes to unnecessary bureaucracy is the failure to align responsibility and authority.

If a person has the responsibility to get something done (design a product, create a Human Resources department, meet a sales quota), she should have enough authority (spend money, hire people, negotiate with outside vendors) to get the job done.

Giving people responsibility without concomitant authority forces them to constantly ask their superiors for permission, thus reducing productivity, and lowering moral.

The final, and most important difference between process and bureaucracy is that people like working for companies with good process in place, and hate working for those mired in bureaucracy, but not for long—they leave—making bureaucracy-eradication a major tool in the retention game.