Good to Great

Jim Collins wrote a best-selling novel called, “Good to Great” in which he had a 21 person team sort them over 1,400 companies and come up with the top 11 companies and compile 5 top management skills from these companies.  The first thing I thought funny was some of the companies that were part of his top 11 “great” companies are no longer in business or have since merged with other companies, if they were so great why the fall?

The article goes on to briefly mention this, the greatness does not necessarily come from the management skills or the fact the company is truly great.  It is the mere fact that during the time of the investigation these companies were on top of their game, whether it was from the top management skills Collins pulled from them or just pure luck of the times.

I think that a company should be based on the management it has in place and the skills the management team provides, yet I do not feel that is what makes a company great.  I use to work for one of the top repo companies in Northern California and if you were doing a study our company would have surely placed in the top two.  Was it because of management, NO WAY!

This company had an owner who told me that my grandpa being diagnosed with cancer was no reason to miss work because everyone dies.  This was the company that when I was sick in the hospital gave my mother grief for calling to let them know I would not be at work, because who was going to do my work now that I was sick?  This was a company who believed you yell at your employees in order to get them to do what you want because if you scare them they obey. 

Was the company successful? Yes, but simply because times were bad, people were not making car payments and the industry was booming and allowed the slack of poor management.  Did the success have anything to do with the management, no at all, which I do believe within the next five years will be the downfall of the company.  So it just goes to show just because a company is on top it does not mean it is because of their management.

Evidence-Based Management

In Jeffrey Pfeffer and Robert Sutton’s Harvard Business Review article, “Evidence-Based Management” they talk about how important it is to gather evidence on how company’s work and what will make them successful.  They bring up many ideas but one that seemed to be the best advice was gathering information within your own company and then compiling your own ideas of the evidence.

Often times companies use nationwide data and industry data and evidence to run their own facility.  The problem with this is that own times there is too much data being compiled to produce evidence that will not be accurate. Another issue with this is that company range greatly in what they do and what they want to accomplish, there may be 3 strong market share holders in an industry and all run their companies in different manners, because face it if everyone did everything the same then there would always be a large group of unhappy people.

In order to implement evidence-based management Pfeffer and Sutton recommend being fact based, make your decisions on hard solid facts.  They start the article with examples from the medical field talking about how base their decisions on what they have learned in school and long-standing traditions but necessarily things that have been proven.  Numbers show about only 15% of their decisions are being based on evidence, situations and outcomes that have actually happened.

I personally have mixed opinions on evidence based management, I am the type of person who likes to see hard solid facts, stick to what I have been taught.  Yet I do believe that in order to rise out of the crowd and succeed at the top you need to do research within your own company and not use data from other companies.  I think the best results a company can produce is put managers in play that are going to show examples of situations and outcomes within that specific company.

I am working for a company who for the past two decades has been the leader in their market yet as the economy became worse and the industry saw a steep decline they turned their focus to another industry to broaden their horizons.  The best management I have seen has been actual graphs and numbers and examples (minus names) of situations in my company and forecasts of how it could have been if things were differently.  Since we started doing this type of management I truly believe that the work ethic has increased and our success is starting to come back.

So I guess I do agree with evidence-based management (see in just two paragraphs when I thought about  my own life I realized my opinion changed!) if it is used correctly.  I think managers need to remember where they are getting the data before they present it or use.  Look at the creditably behind it and who created that evidence and how many things that evidence has been proven true!

Group Think

Group think is defined as “a deterioration of mental efficiency, realty testing, and moral judgment resulting from pressures within the group.”  Group think becomes a big weakness when it comes to groups, it is a huge downfall.  Members of a group will sometimes lose themselves and what they stand for and their beliefs when put into a group situation.  They allow the others in the group, the more vocal people to push their thoughts and ideas onto them and make their voice the voice of the “group.” 

In the article about Iraq and the United States senate select committee it talks about how the US overstated or could not support the estimate of Iraq’s weapons programs.  They pushed the idea they knew that had a lot of weapons and that war was necessary, yet what they failed to tell is they were not giving all the information that they had.  As a result this type of group think made the United States look  bad and diminished their credibility, the world saw them as someone different now, someone who did not hold such strong and high values, someone who they had no trust in anymore.

I personally have been part of a group think situation at my old job.  I used to be known for my reliability, quick work skills, my desire to learn more, and my willingness to always help out with anything even if it did not fit into my paper job description.  Well I became part of a social group at work and allowed their work ethic and voice to become mine.  I lost who I was as an employee and allowed the group to take over and define me.  In the end I lost respect and credibility from my other peers and supervisors.  I ultimately left the job because I did not like who I became define as because of group think.

Individuals need to remember they are still individuals even when in a group.  Yes being in a group helps sometimes, but to every rise there is a fall and the higher you can rise with a group the farther you can fall.  So remember what defines you, you define you, not a group.

Strategies of Effective Team Leaders

What makes a team successful?  The leaders or the team members?  In the article “Strategies of New Effective New Product Team Leaders,” they explain that it is important to have both strong leaders and strong team members.  The team needs to be arranged so that all individuals can work together as well as allow team members the ability to make decisions for their specific tasks and responsibilities.

I have been in extremely successful teams and extremely poor teams.  The most successful team I was in the leader was uplighting and positive.  They started the team by saying I am not your manager but your team member, I will be expected to uphold as much responsibility as each of you and held to the same standards for my work.  He simply listed out what the end goal was and then we all came up with the steps to get there.  Then each team member picked a step to work on based on their strengths and talents.  Which gave the team the energy of group work, there was no demand from the superiors and no power been constantly shown.

On the flip side I worked for a company that put us in groups to change the department I was in.  Yet it was not group effort, the boss told exactly what the changes would be and exactly what each member would do.  There was no helping each other, you simply worked on your part and crossed your fingers the others would prepare good work.  Needless to say this group fail extremely, it was not about team work, it was about power and the leader making sure all the team members knew he was the one with the power.

Based on personal experience I truly believe this article brings great points to how to make a team successful and how a leader really should be.  I think that if you create a fair ethic in a leader then a team will succeed and work together

Compensation Reviews and Sins of Commission

Arrrow Electronics has been debating with the idea of eliminating employee performance reviews or to continue to abide by them.  Do they really work?  Does the review establish a correct way to evaluate pay?  Are the employees being evaluated equally and without prejudgment?  Arrow Electronics began to face a turnover rate and questioned whether it was the quality of the employees or the company.  When asked if an employee was loyal he simply stated, “Yeah – I am the most loyal guy money can buy!”  This simply stated the attitude of the company.

They started hiring employees straight from college and enrolling them in a crash training course of sales, they start the employees at a decent wage compared to fellow graduates.  Giving a nice raise at the end of the first year and the second year.   The problem was the company was giving the new graduates the idea that they deserve this type of raise on a regular basis, installing the idea that if they could get a $5,000 raise the first year and one the second year, they surely by the third year they were entitled to a $10,000 raise.  When Arrow Electronics thought it would be better to let employees go than pay them the $10,000 their competitors were offering them a result of high turnover came. 

Instead of promoting company loyalty Arrow Electronics tried to based their values upon monetary compensation.The company needed to show an employee what they have to offer on a timeline.  Show them what their worth really is, and instead of shutting down the idea of the $10,000 because it would hav caused internal problems, offer a middle ground with a goal timeline to show them exactly what they need to do to reach the magic salary number they want.  When employees feel they have a motivation then they will work harder to achieve that goal.

 Which became a problem again when the CEO received the EPR, a vast majority of employees received between a 4 and a 5 out of 5 on their review.  Which meant managers were not giving accurate reviews, instead manipulating the reviews to produce the results they wanted to display.  I think that the company instead should have focused on the actual areas of review instead of producing a bottom line number for how great of an employee you are.  If for each category a manager had to determine a weakness and strength for the employee it will able the employee to see room for growth yet also feel praise for their efforts.  By wanting employees to grow and showing a future in the employee it produces a lower turnover rate and a higher morale.

On the flip side is commission really the way to pay employees?  Pfeffer brough up a good point by titling his article, “Be careful what you pay for, you may get it”  If you are paying your employees purely on a commission basis are you getting the most out of them or are they getting the most out of you?  There is fine line between inspiring your employees to produce higher results to get paid more and allowing them to cut corners and get paid for doing less.

I think that employees do work better when they know they have control of what type of income they bring in, but as in New Mexico with the garbage trucks we learned that setting a flat rate of pay allowed many opportunities for employees to cut corners.  I think that company’s need to establish strict guidelines for employees, they need to say this is the bottom line, this what you are getting paid for this is what you are expected to do, this is how you earn more, this is how you lose your job. 

It is almost as if things need to be written out as they were written for a child, yes it causes a lot of work for a company but once the policy is written out the results will be positive.  One must remember there are always going to be not loyal and lazy employees, some people will always leave for more pay no matter what you give them and someone will always find a way to cut corners.  It is business, just know when enough is enough.

Performance Review

Are performance reviews really beneficial to the employee?  Or is it just an excuse for a boss to excercise their power?  According to the article published in the Wall Street Journal, Culbert, feels that performance evaluations are of no value to the employee and cause hostility in the work place.  He brings up some good arguments about performance reviews, such as saying pay is not determined by the performance it is usually a pre-determined number.  I agree completely with this, usually a company has a target percentage a raise can be which is not determined on the individual but their job title.

I have had a few different jobs in my career and at every one of them I  have been given the standard 90 day review, followed by reviews at the year mark.  One company I worked for told you that they did not offer raises or promotions at the 90 mark, the review was merely for you to know what you need to work on for the year mark when you may become eligible for either a raise and/or a promotion.  At that point I felt like the review was enforced for the management to show they had power over you and remind you were constantly being watched.  It was more of what you are doing wrong and what you could be doing better.  As much as I try to be open to criticism it was hard to hear all these things when I knew there would be nothing such as a raise coming out at the end.  So at that job I agree with Culbert that the performance evaluation created hostility. 

At another job when I hit my year mark my boss told me I was eligible for  raise after my performance review.  Well it told him FOUR months to give me my review! And after my review he said I needed to work on some things and in 30 days if I had done all of those things I would receive my raise, but there was no back pay for my raise.  So instead of inspiring me to work harder I got angry because since my boss had been lazy I had missed out on four months of pay at a higher rate.  In the end that was one of the determining factors of why I left that job because it created great hostility for me and I felt the boss was merely using performance reviews and raises to re-enforce his power.

Now on the other end of the spectrum I have had performance reviews that I actually feel were beneficial to both me as the employee and the company.  One week before your performance evaluation you were to pick two forms, one was an evaluation of you and one was an evaluation of your boss.  You had to bring both copies filled out to your performance review.  The evaluation of your boss was to be dropped into a locked box, which at the end of all their reviews their boss would pick up, and the other was to be given to your boss during the evaluation.  I think it was the most positive review I have ever had, I was allowed to rate myself and make notes on things I felt I had done well and things I felt I need to improve.  In all my experiences I think that was the only review I ever walked out of feeling positive and not run down.

So being on the positive side and negative side of performance reviews I believe they can be helpful if used correctly.  I think the vast majority of the reviews are given to show power an authority has instead of a way to give inspiration to an employee to improve problem areas.  If the review is done properly I feel it can bring positivity and inspiration to an employee. But employors must remember no one likes there flaws to be pin pointed or feel vulnerable.

Nordstrom’s

If someone asked me to name a store that had outstanding customer service the first store I would say is Nordstrom’s.  As a consumer Nordstrom’s has always been my favorite store, if there is something I want and Nordstrom’s sells it then you better bet that is where I am buying it. 

The turning point for me was when I was in high school and I bought a pair of shoes that were $100 (which for a 16 year old was A LOT of money!).  I wore the shoes for a couple months and then one of the heals broke, I was devastated, all that money wasted, and for sure they didnt have anymore, these were summer shoes and it was already fall time.  Well I took the shoes into Nordstrom’s to see if they knew where I could get another pair, the lady behind the counter laughed at me and said we can go ahead and refund your money until we find you another pair and we will do the research to find you another pair.  Two weeks later a box was sitting on my door step with a brand new pair of shoes and a note saying thank you for shopping at Nordstrom’s and being a valued customer.  From that moment on I have been a loyal customer.

So reading the article on Nordstrom’s gave me a totally different point of view.  For some reason I had never looked at it from the employee side only the consumer side, where the extras the store did had become expected duties to me.  I can see both sides of the spectrum, the employee side and the Nordstrom’s side.

I do agree with the fact that employees should be paid for all the work they are doing, but the reality of that happening is slim to none.  There are numerous people that are on salary wages based at 40 hours per week and work at least 60 hours a week.  Is it fair? No.  Is it right?  No.  But you are also being rewarded the more you work because the chances are the more you work the more you sell.  If you are in a commission based job, as Nordstrom’s employees are, then the higher sales the higher the paycheck.  Although I do feel that you should be entitled to your breaks and not be punished for not wanting to work than 40 hours if you are being held on a 40 hour performance chart.

On the Nordstrom’s side if the employees don’t like the job they are free to quit.  No one is forcing them not to clock in, they are doing it because they like their job and they want to earn higher sales.  And sometimes higher sales means working more hours. Its a game of give and take.  Just as the article said, you can’t force the employees to smile, if they weren’t happy there they wouldn’t smile.  And as a repeated customer I can say almost 100% of the employees are smiling when I go into the store.  And just as there are people complaining about the wage chart they are people who are praising it, you can’t make everyone happy all the time.

Although I do agree that Nordstrom’s has some compensation issues they need to work on.  They need to find a happy medium with the employees to ensure the employees feel compensated for the time they are working.  I would not personally work for the company because I do not like the commission sales based industry, I feel it leads to hostility and unneeded competition.

SAS

What makes a company successful? What makes a company gain tremendous amounts of market share?  How do you create an atmosphere that makes employees want to be there?  Makes customers want to purchase time and time again?  These are all questions that CEO’s must ask themselves if they want to run a successful profitable company that will last for years.

Before reading the case study on SAS I had only briefly heard of them, merely knew the fact they were a large company having to do with software programming.  Until recently when I personally became involved more in the business world and started in a position where I am helping keep a company alive in a tough economy did I really start looking at what makes a company run.

The statement that made me believe in SAS as a company was we will produce what the customer wants, why produce something that the customer does not want.  This is a true statement that I believe all companies should try to live by.  Our economy bases so much on the newest thing, the most technology, the most powerful tool…but is that really want the customer wants?  Do you want a one time customer that is buying your product because it is the latest thing or do you want to have a customer that feels they can give you feedback and the next product and the next update was created based on their true needs? 

As a consumer I am more likely to buy and keep brand loyalty to a company to emphasis customer needs, that focuses on what I want and what I need to make the most of my life.  I want to be a long time loyal customer not a one time buyer.  That is what SAS focuses on they don’t look at the short-term profit line they look at what the customer to going to bring as profit 5 years down the road.  That concept is something I want to take to my company, to focus on what the customer is really saying, not what we think they are saying.

How many people have worked in a cubicle? I have, I hate it, I felt like I was constantly monitored, constantly watched.  At the company I am now I have my own office, I truly believe it is a world of difference on my work performance.  I feel like I matter to the company, like my talent, my skills are important.  Our society is given the idea that only the important people are given an office; am I important to my company?  Yes but I feel extremely important because of the simple factor that I have my own office and to me that shows they value me, so in turn I value them and their company. 

I do believe that if SAS keeps with their core aspects of the company, keeping in privately held, not becoming overran by stockholders who look at the profit line instead of the employees in the office they will continue to succeed.  They do the little things that matter and make turnover lower and employee morale higher.  

SAS may not offer the financial incentives competitors do but they offer the things in life we sometimes overlook; health facilities, beautiful outdoors, gym, schools, day care, personal offices, etc. They have found that if you treat your employees like they are gold they will produce gold.  It all begins with the attitude the company displays behind close doors, the enviroment they create for their employees and the desire for an employee to want to be there not just having to be there.

SMC

Speciality Medical Chemicals seems to be a company of the past with many problems that is putting a stop to their growth.  The company has lost the competitive edge in a market they once were the top leader.  Is bringing in a new CEO the answer the company is looking for? Is bringing a consultant the correct answer?

I believe the main problem the company has is that the employees feel it is pointless to find new customers.  They feel their time is much more rewarded for keeping up with the current cliente.  This is because a vast majority of the employees are paid at the highest percentage they can receive.  Also the employees in the sales department are on solely commision try to conquer a new client which may or may not result in a paycheck?  I think to push the growth factor the employees should be put on a small salary plus commission, with the percentage for new clients produing a higher commission amount.  That way the are striving for new things but have the comfort of knowing there is some kind of paycheck at the end of the day.

I do not believe that bringing in a consulant was the right thing for Carl to do.  All he did was stire up the problems, he was given no real solutions.  All the consultants did was merely put the problems on paper and in the mean time made accussication about employees that may have not been true but are ideas that will now stay in Carl’s head.  I think the consultant should’ve been brought in to teach the company how to fix a problem not be the problem solver.

I feel that Carl was not a good fit for this job.  He was in over his head, as he said he did not have real knowledge of the industry let alone what position the company was in.  He never address the real problem, if you dont address the real problem how are you ever going to solve the problem?  He wants to get rid of people who might not neccessarily be the problem but have become the problem because of the hostility and evalutions from Laura.  In order to change the problems Carl needs to change the way the employees are rewarded, as I said with the compensation issue, if the rewards change the behaviors change. 

Overall I feel like this company just took ten steps backwards instead of any steps forward bringing Carl and Laura in.  Sometimes it is hard to pick up a falling company but the main problem is no one address to core problem and if you only provide solution to “band-aid” the problem the problem will never go away.

Health Care

Health is a hot topic in our country today, the rise of the out-of-pocket expenses, the growing number of individuals without heath care, the decline in coverage companies are offering their employees.  So what role does an employee have and what role does an employer have in helping cut health care costs? Does an employer really have the right to step in and tell an individual what they can and cannot do outside their professional life? 

I was in shock when I read that Scott’s does not allow employees to smoke and tells employees they are not allowed to be obese.  What does smoking have to do with a job?  If an individual can perform their job efficiently and effectively meeting all regulations why cannot smoke?  I personally am not a smoker but I think it is highly in appropriate to tell employees they are not allowed to participate in an extra activity like smoking.  Are you going to tell someone they can not skydive because of the risk?  They can not fly on airplanes?  Or drive in cars?  Everything has a risk that can lead to a safety issue and/or a health issue, which can in a sense lead to the higher health care costs.  I struggle with the risk of health care because it is something that affects my life personally but I still do not agree with the control Scott’s is trying to put on an employee’s life.

My heart broke when I read the story about Jessica and her improper transplant.  Something so simple could have been prevented.  It makes me angry that we pay so much for health care costs to have individuals that do not take all the precautions they should to ensure our health.  My father had a transplant and I can not imagine what I would do if he was no longer with me because of someone else’s stupidity. 

I am not sure what the exact answer is to the health care crisis but I do not believe in employers should have such control in individuals lives outside of the work enviroment.  And I believe that for the amount of money our country pours into health care individuals should be forced to take responsibility for mistakes and forced to take huge measures to ensure stupid mistakes do not happen that cost individuals their lives.  We get one shot at life so you better bet I am going to do everything I can to live it to the fullest and when I go to the doctor they better do what I pay them to do and take care of me!!