Extraordinary Business

I recently read an article in Inc. magazine called Paradise Lost by Bo Burlingham. What caught my attention was the story was about Reell Precision Manufacturing. This company had been recognized for its culture and now was struggling for its life.

Reell was a successful company with a strong employee focus. In fact, all decisions were made in the best interests of the employees. For more than 30 years, the company had worked through good times and bad. When times got tough, the leaders took pay cuts to avoid reducing staff. The company was ran by three CEO's that made decisions based on consensus. The formula worked. The company experienced unflagging loyalty while having turnover well below the industry average. So what caused the dramatic turnaround in performance?

Reell's industry was changing. Responsible for making laptop hinges, they found their markets moving overseas. While they were able to make changes and compete for a while, they became burdened by keeping up with increasing sales. Those sales forced capital investments that forced the company to focus on generating more sales to pay for the equipment. Reell became forced to compete on price and reduced margins. In the short term, Reell's decision to globalize their laptop hinge product prevented layoffs. In the long term it nearly destroyed the company because of its failure to balance out the needs of the employees and the needs of the business.

The moral of this story is looking at all aspects of your business no matter how well you are doing. Too much emphasis in any one area can be disastrous.

Article:
Paradise Lost
By Bo Burlingham
Photographs by Mike McGregor
Magazine: Inc.
Issue: February 2008

Labels: Business, Business Coaching, Change Management, Coaching, Leadership, Management, Planning, Sales, Strategy

We need a few good people. Or at least that is what I hear my clients say. Gone are the days of the company man. Now many people see jobs as merely stepping stones to get where they want to be. This is quite a turn around from our parent's culture that hailed the person working 20+ years at one job.

What has caused this change. The greatest factor might have been big business itself. Everyone has heard the story of the dedicated employee ousted from his position due to cutbacks and sending jobs overseas. Other factors may be benefits. As benefits change in relation to the needs of the employees, we see even less loyalty.

This takes us to our current generation. Most employees nowadays consider 2-4 years a long-term commitment to a job. Unlike their parents, they are also more concerned about balancing their personal life with their work. Many are no longer willing to work for just the almighty dollar.

So what is your company doing to find and retain good people? When businesses fail to keep good employees, they should first look at themselves before blaming the employee for leaving. What are you doing to develop your culture to attract people? How do you keep your staff engaged in their work? What are you learning about your employees needs that will let them know you value them and wish to keep them around?

If an employer treats their staff as an expense, they will often find it difficult to retain and hire good people. Given there are fewer people entering our workforce right now, you want to make sure you are a place people talk about working and not about leaving.

Labels: Business, Change Management, Leadership, Management, Organizational Development, Professional Development, Strategy

This thought is from an article by Dan and Chip Heath in the February 2008 issue of Fast Company. Their article "Make Goals Not Resolutions" highlights a good point that plagues most companies and people. We fail to clarify what we want to accomplish.

Things like increasing profits, better teamwork, improved communication are all great ideas. Unfortunately they cannot be measured and there is no time line to follow. The result is usually failure to realize that goal to its full potential.

The Heaths point out visualization as a key factor in achieving what you want. By visualizing where and when you will do something you have a much greater chance of actually achieving that goal.

So what were your resolutions for the new year? If you could visualize what you were doing, where you would be and when you complete it, would it help you reach your goal?

Labels: Business, Business Coaching, Coaching, Leadership, Management, Personal Development, Professional Development

Recently Yahoo Hotjobs! surveyed people on job satisfaction and found that 43% of workers were unhappy with their boss' performance and that 7 out of 10 workers are looking at landing a new job in 2008.

I believe their are two sides to every story and I believe there are a lot of good people that are in leadership roles. There are also people who don't understand their manager's responsibility. I think this represents how important communication is in an organization. It also shows what happens when companies fail to give their leaders the skills to be successful.

What are the costs to business when they experience high turnover?

Labels: Business, Culture, Leadership, Management, Professional Development

Ever wonder what your business is costing you? Many of you can look to your P & L's to find a number. While that might be accurate to represent the total dollars you are spending, I am more interested in what lies beneath those numbers.

A company with a good strategy, strong leadership, and effective staff can be far more profitable than a business with a good strategy, weak leadership, and a staff unclear of their direction. I have seen companies with comparable sales in similar industries that have differences of hundreds of thousands of dollars (or more) in profitability. That difference could be the measure of what your business is costing you. But how can you be sure?

Here is a little test to start reading between the lines. Please keep in mind that if we are talking about averages it may not mean you do not have room for improvement. Remember, an average is little better than a C grade.

1. Advertising: How are your advertising expenses compared to the averages for your industry? What do the best companies spend? Some companies spend over four times the amount on advertising compared to the leaders in their industry. Unfortunately in most cases more advertising does not lead to greater results.
2. Turnover: How long do you retain people compared to your peers? Higher turnover can increase human resources costs exponentially through training, benefits, wages, unemployment, advertising (want ads), and recruiter bills.
3. Strategy: Great, you have a strategy. So who knows about it? How effectively is it executed? Over 90% of businesses fail to realize their strategy to its fullest potential and over 95% of employees in most organizations do not know what their company's strategy is. This can lead to even the right people doing the wrong things. In addition there can be multiple agendas, wasted time on projects not congruent with strategy, not to mention frustration, anxiety, loss of motivation, and ultimately lost sales.
4. Quality: So your quality is good, but can it be better? Each year, millions of dollars are lost to quality issues. These losses go beyond equipment failure into people related issues. Poor leadership can lead to poor morale and the "I don't care" attitude.
5. Sales: So your sales are down. It's the economy, the political climate, increased competition, the web, we lost our lucky rabbit's foot, etc. Remember, in the face of any bad economy, there are always companies that are growing and profitable. If you are not one of those companies that is growing and profitable, then you could be dying a slow death. Are sales fluctuations a blip on the screen or have steady decreases taken a bite in your profitability? There could be many reasons including the economy, but do you want your business to be influenced by the economy or do you want to be the best in your industry?

So what's your business costing you? What if you could increase your bottom line anywhere from 10-50% just by changing some of the things you already do without adding new technology? Many businesses seem to let these hidden costs go. My guess is because they cannot be seen. They remain hidden in the numbers. I would also guess that even if some companies knew the problems, they might feel powerless because they don't know what to do. What are your thoughts?

Labels: Business, Change Management, Leadership, Management, Planning, Sales, Strategy

It's hard to believe we are into our first full week in 2008 already. Often this is a time of year when we are excited about the targets we have set for ourselves in the coming months. What are some things that you are striving for? What's one thing you need to do on a daily basis so you will reach those goals? What is one thing you need to stop doing in order to accomplish your

Labels: Business, Business Coaching, Leadership, Management, Personal Development, Professional Development, Strategy

I recently heard a radio personality comment on a football game he was watching. The comment was related to how the coach managed the clock and how difficult it must be to keep track of the time outs while managing the plays and accounting for the obvious obstacles created by the opposing team.

What's interesting is as a leader you experience similar change every day. The Leader's team is their people and strategy is their playbook. Instead of one team, leaders are often competing against many teams at the same time. The clock you manage is through your annual goals and your fiscal year. As with any team, you have your standout players, your team players and those who fail to deliver their best.

As you look at 2008, what are some of the biggest challenges you see with meeting your goals?

Labels: Business, Business Coaching, Change Management, Leadership, Management, Personal Development, Professional Development, Sales, Strategy, Wealth

So many people seek wealth without realizing they already possess it. Every one of us is already a millionaire. The only difference between those who have $1 million and those who are working for it is the skills they mastered. So something to ask yourself is if you are already a millionaire, why don't you have $1 million? Those obstacles in the way are what is cleaning out your "bank account." It's the counterproductive habits that have removed the funds to this point. What you really need to do is look at what has made you successful so far, and how can you use it to eliminate the bad habits. Apply more of what you do well and focus yourself on your goal. No matter what it is, you can achieve it if you are committed to taking action.

Labels: Coaching, Leadership, Management, Mentoring, Planning, Sales, Wealth