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How to Increase Your Job Security by Becoming an MVP at Work

Friday, April 16th, 2010

 I’m working on a book; here’s why.  If you have a job, you can be very secure if you are valuable enough to your employer. My book will give readers real life ways to become “layoff proof”. The other half of the book is directed to employers suggesting to them some simple ways they can develop the MVP’s who will improve the profitability of their business.  If I can help even in a small way to reduce layoffs and improve some businesses’ viability, it’s worth the effort.   

The economic crisis we have been enduring for over a year now has brought us to a crossroads. Businesses need to be more creative than ever before to succeed. They need to rethink much of what they “have always done.” At the same time, employees are seeing unprecedented numbers of job losses. Those who have a job, are asking themselves, “Will I be the next employee to lose my job?”  The most valuable asset any business has is its people. Workers largely determine the success of any business, yet many may not be feeling so valuable in these turbulent days.

The book and its format addresses employers under one cover, and employees under the other. It’s an attempt to get both to exchange points of view. I believe that exchanging perspectives is the most powerful way under the sun to facilitate progress in anything. If you want to make giant progress we must change our frame of reference.

Bosses want top performing employees, yet he or she   may not have taken the time to try to understand what their workers are most seeking in their job beyond the paycheck.  We know that like air, a paycheck is necessary for life, but once you have air or the paycheck, there are many other things which effect how you feel.

Anyone can virtually insure their own job security by becoming very valuable to their company. This is done by increasing the contribution the worker makes to the long term success of the company. If you could walk in your bosses shoes and he or she could walk in yours, both of you would greatly increase the probability of getting what’s really important each of you.

We all live in our own frame of references and our personal perspectives largely define how we see the world.  It’s no surprise that our astronauts come back from outer space changed individuals.  They see the world in a way that’s impossible to see while their feet are on the ground. Anyone who has travelled abroad learns that the world does not revolve around the USA as most Americans assume it does.

As I was about to graduate from Officer Training School in the Air Force to become a Second Lieutenant  otherwise known as a “ninety day wonder” the last stop was a visit with a tough old Sergeant who gave us the very best training we had received during the entire course.

Sarge pointed out that today we were trainees, but tomorrow we would be junior officers and as was the tradition, if we passed he would be saluting us. He further pointed out that the salute was out of respect for the gold bars we wore, not necessarily for the wearer. He further explained that non-commissioned officers like himself who earned their rank by experience, actually ran the Air Force. They largely determined the success or failure of each day’s mission.  

The old sergeant went on to tell us that our individual effectiveness as officers would be determined by our ability to work with those who had the experience. If we insisted on believing and acting as if we knew everything, we would fail, and we would never earn the respect of those who we outranked.  If, on the other hand, we were able to respect the experience represented by those who had been there and actually done the work, we would become successful leaders, and our careers and the Air Force would benefit from that leadership.

On graduation day, as we filed past the reviewing stand, there was the old sergeant saluting every one of us. I never forgot his message and his salute, and have tried to earn that salute by honoring the lesson he taught me about exchanging perspectives.      

Trying harder won’t improve results nearly as much as exchanging perspectives between the workers and the boss. Truly, you have to walk in each other’s shoes to understand how working for mutual goals can insure that the company will survive to provide good jobs, and workers will have a much better chance of staying employed.     

The current economy may have you scared to death. If you are like many Americans, you couldn’t survive long without your monthly paycheck.  I know exactly how you feel. I once had a job which I needed badly. I knew that it was important to my financial well-being that I keep the job. I also knew that I was overpaid for the job I had been given. Due to a complicated set of circumstances, the job responsibilities had been lessened after the pay level was set. In other words, I was being paid more than my contributions were worth to the organization. It gets worse. Because of the job loss fear, I became less aggressive about doing the job I had been given. For the first time in my career, I was timid and unwilling to give the tasks at hand all I had. I’m not saying that I didn’t work hard and put in the time, but I just didn’t give it the benefit of my many years of experience. I could have performed better, but fear of losing the job was causing me to underperform. As soon as the first opportunity for a downsizing occurred, I was part of the downsizing. I feel particularly bad about the result of my less than stellar performance because others who worked for me were also downsized.

Every job, whether it’s sweeping the floor or being the CEO, has two levels of compensation which are appropriate for that job. The first level equals whatever the company would have to pay to get someone else to perform the job at a satisfactory level. The second level is the economic worth the organization gets from outstanding performance by the jobholder. Let’s say you are driving a truck and servicing the company’s customers. If you are making the expected number of service calls and successfully completing the calls, your pay should be at the level the company would have to pay to replace you. If, on the other hand, you are not only making your expected calls, but you are also leaving such a positive experience in the minds of your customers that they have a very favorable view of your company, then you are going above what’s expected, and you have actually raised your value to your company.  Your employer might decide to raise your pay either by some merit pay for performance plan or just by recognizing you with a base increase. In either case, you will need to continue to perform at the current level or higher.

 So, if you are following this example, you may say, “what about seniority?” Isn’t there a pay benefit for longevity?  I would tell you that in our current competitive environment, the answer is no unless that extra experience translates into performance that helps your company compete more successfully.  One only has to look at the American automotive companies whose pay practices from the plant floor to the boardroom were not supported by the same level of economic value to the companies.  Companies who overpay their employees will not be able to stay in business. There is no doubt that the one significant factor in the millions of lost jobs is that, like me in the job I lost, the pay was greater than the benefit.

 So if you want job security, you should strive to be underpaid; not overpaid.  The book will help workers be able to gain practical ways to increase their value to their employer. Those who become MVP’s (More Valuable Players) will have great job security, and may find that the boss taps them to find out if they want a tougher, higher-paying job.

De Ja Vous All Over Again

Monday, March 29th, 2010

De Ja Vous All Over Again

 Since the days of Thomas Jefferson we have been debating whether it’s more powerful to have a strong central governing unit help us make informed decisions or to defend the right of individuals to choose for themselves. In 1830 we passed an amendment to the Constitution to protect the right of states to make decisions not specifically designated to the federal government.

 It occurred to me that my business experience might be able to shed some light on this difference of opinion. In the sixties, I joined Sears who was the largest and most successful retailer in the world. Its sales were greater than the next three competitors combined. I chose the company partially because it was the text-book case for a decentralized company. Local store managers made most of the decisions concerning their store. They spent their days making sure they beat Penny’s and Wards in serving their customer’s needs and delivering the best products and service in town.  Merchandising was done by local managers who were experts in the needs of their local customers.  If a store wanted an item added to the assortment, the buying organization found it and it was made available.

 In the seventies, the country was changing with complex social issues like civil rights and hiring practices becoming important. Sears was changing too. The new President was a lawyer not a merchant and the company became more risk adverse. Local management jobs were eliminated and many were created at the Chicago headquarters which was interestingly called Parent. There were so many experts, that the company had to build the world’s tallest building to house them all. 

 In the eighties and nineties the store organization continued to lose management jobs and the ability to make meaningful decisions. Managers were reduced to store-runners, and told to just follow the plan. “No value adding please.”  Important decisions were made by subject matter experts who probably never stood behind the counter of a Sears store.

 During the nineties I was part of an organization built to take orders for the catalog division. This front line organization was empowered to do whatever was required to serve the customer. They were not directed, but empowered. The results of their great work and feats of customer service was that the catalog was not only rewarded with customer patronage, but with literally thousands of customer letters of appreciation for the service delivered.  This experience convinced me that the model of empowering employees was more successful than  telling them what to do. I remain convinced that the secret to success is within the belief system of people. That is, people will be much more successful if they believe in the course of action they are taking.

 Today Sears has all but vanished from the list of important retailers. I am often asked why this has occurred. The best answer I can offer is to respond that when an organization fails to excite its constituents’ or fails to meet their needs effectively; it begins to wither and die.

 America is experiencing an administration which honestly believes that it has all the answers and that decisions should be made by subject matter experts who espouse the belief that one size fits all. It certainly feels like De ja vous to me. 

 This is not meant to be a political opinion, but rather a belief that in all things, including business and government, empowered people are the critical ingredient to success.

What Every Business Can Learn from General Motors

Friday, December 4th, 2009

What Every Business Can Learn From General Motors

It is certain that General Motors new board will replace the now-fired CEO Fritz Henderson with someone from outside the company. Fundamental change almost never comes from company insiders.  

It’s interesting that Detroit’s auto makers have been known as the big three for five decades or so. I’ve personally never heard them referred to as the best three.  GM still has a 5.6% percent lead over Toyota in market share, but is losing billions, while Toyota was profitable in 2008.  Chasing market share has led the Detroit carmakers down a road to ruin. Hopefully, Ford’s recent insight will cause it to recover.

Measuring success by counting the percent of the market owned has caused a focus on production. European carmakers produce what they can profitably sell, while General Motors cranks out vehicles based on what it can produce.  Any retailer knows that too much inventory means you must mark down your goods to clear them, yet Detroit overproduces every year. They support dealer networks over four times as large as Toyota because more dealers means more places to park inventory.

The well publicized labor cost disadvantage which American car companies have brought upon themselves comes form the fear of labor stoppages. If you are not willing to sacrifice production to negotiate reasonable labor agreements over the years, you might end up with the types of cradle to grave benefit agreements and ridiculous pay rates American carmakers have. What other business owners would agree to pay furloughed workers while the workers sit around the union hall?         

Even Detroit’s lack of quality focus probably comes from its singular pursuit of market share. If you stop to innovate and re-tool, you lose production.  Who doubts that Detroit’s employee layoffs damage the quality movement? Toyota avoids layoffs.

So what is there in the troubles of the Detroit big three that can help us in our smaller businesses?

1. Focus on being the very best in your industry rather being the biggest is a proper strategy. While this may seem obvious, many businesses attempt to acquire new customers as a singular strategy ignoring the care of the ones they already have.

2. Design pay and benefits you can afford. Not everyone can afford to be General Motors. Even General Motors can’t afford it these days.

3. Don’t build your production capability with 100% fixed cost, full time employees. If you do, you have no way to reduce your workforce without layoffs.  Layoffs damage your organization in ways you can’t even measure. Avoid them by utilizing a flexible organization.

 A former GM President said “What’s good for General Motors is good for the country.”  Maybe knowing what’s been bad for General Motors can be good for  the country’s small businesses.

A Few Thoughts About Executive Bonuses

Monday, November 16th, 2009

A Few Thoughts About Executive Bonuses

So now that we the people have given billions of dollars to financial institutions, the administration is talking about curtailing executive bonuses. If we have a financial stake in the results of these institutions, that’s not a good decision for us. If the institutions do well, we the taxpayers can be a big winner so we should want them to win.  I’m not saying that the current bonus system should be maintained. Absolutely not! Paying business leaders for piling up short-term financial wins only encourages manipulation and insures the eventual downfall of the institution. That’s how we got into this pickle.

 Robert S. Kaplan and David P. Norton published “The Balanced Scorecard” in 1992 and since then its teachings have been an important thought process for most businesses who want to insure long-term success. 

 The core of this school of thought is that there must be balance between focusing on short-term profit and investing for a longer strategic time period. There should be wins for all business’ stakeholders not just shareholders, but employees, business partners, and customers of the business. There must be balance between productivity and quality.  Any business can produce large amounts of a mediocre product, but making a first rate product takes a bit more effort.

 The key to insuring this balance is for each element to be carefully measured and economic rewards (bonuses) be made not for success only in one aspect of the business, but for balanced success. Simply, when you pay a CEO for attaining a short-term financial goal, it will most certainly do nothing for the long-term success of the organization. Kaplan & Norton would argue that you reward a balanced approach that recognizes the need for longer term success and represents the interests of all stakeholders, not just investors.

 So if we have a stake in the large institutions who we have “bailed out” to return to financial good health let’s not eliminate incentives, but rather let’s just insure that they are based on a balanced scorecard.  The American capitalism system thrives when success is rewarded financially. That’s a good thing, but let’s insure that the definition of success works today and tomorrow and that neither trumps the other and that innovation, quality, focusing on customer value and the employees and partners who make these possible are all included.

Happy New Year America

Wednesday, January 7th, 2009

 

It’s that time of the year when we become reflective making New Year’s resolutions promising ourselves that we will do better in those areas where we see reform is needed. As we watch the news unfold revealing one negative event after another, perhaps our country needs to make some New Year’s resolutions.

Wall Street and Washington share responsibility for our nation’s financial meltdown. It’s a chicken/egg call to determine which came first Wall Street’s greed or Washington’s see no evil/hear no evil pose. What’s clear is that Washington schemed to make the economy look better than it was, and Wall Street saw the caper as an opportunity to make its numbers too.

For many years the folks on Wall Street have justified ridiculously over-compensating their leaders with the notion that shareholder value justifies the practice. Now when there is no shareholder value, they still insist that the bonuses are needed to retain those who led the downfall. Haven’t they seen Christmas Vacation which teaches us those bonuses should not be totally discretionary?

Baseball, America’s pastime shows some of the same lack of integrity as it allowed the use of steroids to make the game more exciting hoping to fill seats. They, too, see no connection between salaries and excellence paying lots of 240 hitters millions. The New York Yankees, Wall Street’s team, have made over-compensation an art form. They exceed the salary cap annually accepting a 23 million dollar fine from the league as a cost of doing business. The new Yankee Godfather dismissed the practice saying, it’s our family business, and we’ll run it as we see fit.

Pro football, America’s other love, has a new sheriff running the show. There are so many criminals and thugs in football that he has come to town with a new “We’re not going to take it anymore” stance. Meanwhile coaches spy on each other and owners continue to hire more thugs. Jay Leno quipped that the penitentiary has enough pro football players to win the Super Bowl.

College athletics has become such a big business that colleges like the Military Academies, Stanford, Notre Dame and others where the concept of student athletes still remains, can no longer compete with the semi-pro programs. As you would expect, the coaches who deliver millions to the University are compensated with the shareholder value/Wall Street model.

Even in our personal lives cheating is the order of the day. The Divorce rate is at an all time high in America and spousal cheating is the chief cause. Of course, even our government officials have affairs and cheat on nearly everything. They build bridges to re-election, cozy up to lobbyists and choose party loyalty over loyalty to the country and solving its problems. Church membership is down probably because we don’t like weekly reminders of rules we should consider following.

It would seem that I’m suggesting that we are an ethically bankrupt society on a one way trip to oblivion. That’s not what I believe. I believe that the information age is bringing us the wrong information. We are a basically good country made up mostly of decent folks.

We just need a few changes to get back on track….Perhaps some New Year’s resolutions.

Think back for a minute back in the day, when integrity was more evident. We were under the care of parents and teachers who had stricter rules. They made sure we understood the rules. They taught us that winning was also about winning with integrity.

We also understood the consequences of breaking the rules. A trip to the office probably included a whack or two with a sturdy paddle and double jeopardy when word of the misdeed got to our parents. It’s highly unlikely in the day that the Government would decide that the rules governing war prisoners didn’t apply to us because we were all about rules. Businesses employed internal auditors to insure that the company complied with the accounting rules. Now even external auditors have become business consultants focusing on making the numbers rather than auditing them.

So I’m suggesting that America set some new standards or rules and spend some time and energy changing our course as it relates to integrity. So here are my New Year’s resolutions for our country.

  1. As citizens we must tell our leaders we expect integrity to be the center of their values and operations. Punish companies who cheat and throw out politicians who fail to put the country first.
  2. In our personal lives let’s make honesty, including self-talk, the “way we roll”
  3. Reject the lunatic fringe ideas that get undo publication; favoring instead ideas that support balance and are grounded in our belief that we are the United States of America

HAPPY NEW YEAR AMERICA

 

 


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