Winning Workplaces

The New Employee Health-Productivity Doom Loop

Tue, 10 Nov 2009 18:38:56 +0100

At Winning Workplaces' annual conference this year, Rackspace Hosting Chairman Graham Weston spoke about the necessity for small businesses to create a virtuous cycle of employee engagement to spur higher customer satisfaction, as opposed to a "doom loop" or progressively poorer satisfaction (and exodus) that can occur with inadequate workplace team building.

Commonly used in management circles, the concept of the doom loop can, of course, be applied at a macro level in the context of the productive workplace. Ominously, The New York Times, the Boston Globe, and the Sloan Work and Family Research Network (Boston College) have all written recently describing a doom loop that seems to be occurring with respect to employee benefit cuts, worker health, and productivity that directly affects the bottom line.

Here's a diagram that shows how this plays out:

This is pretty unsettling given our sluggish economy. Still, as the Globe points out, at the individual level – activities that that fuel workplace culture, where the rubber meets the road, so to speak – progress is being made. As companies in similar and even dissimilar industries learn about what's working for some firms, practices and behaviors change. Eventually, the doom loop depicted above can be reversed, becoming a virtuous cycle. (At least, that's my hope – and, I suspect, the hope of other promoters of the payoff of employee engagement.)

One of the companies the Globe identifies as part of the effort to turn this doom loop around is 2007 Top Small Workplace NRG Systems. Learn more about this company's innovative employee activities here.

Wharton's Cappelli Waxes on the Innovative Management at Mike's Carwash

Tue, 10 Nov 2009 17:36:18 +0100

Last week I included 2009 Top Small Workplace Mike's Carwash on a list of 10 small businesses that Winning Workplaces has honored over the years, that use the element of surprise to increase their customer base and deliver value to them in unexpected ways.

This week on Human Resource Executive magazine's website, Wharton School Center for Human Resources Director – and Top Small Workplaces judge – Peter Cappelli provides more insight into the management and resulting employee engagement practices of this Indiana-based retail outfit.

Framing Mike's as a success story in an industry known for "bad jobs," Cappelli provides three quantitative data points that show why this is no standard-issue "Mom and Pop operation":

Turnover of around 10% (if you're a big company you're considered to be doing well if you're at better than 33%).
Great, uncommon benefits including paid vacation, tuition reimbursement, and 401(k) plans (yes, even for hourly employees).
Lots of training hours (90 for entry-level workers) and individual development plans as part of the firm's employee development strategies.

Cappelli continues with lots of numbers-based meat for small business leaders who are looking to increase their competitive advantage through rare-in-industry team building strategies. Read more here.

Retaining Older Workers is Part of Sharing the Pain

Tue, 10 Nov 2009 00:11:24 +0100

I should probably clarify my title for this post. I do not mean to suggest that having an older workforce is painful, whether on other generations that work alongside them, or for your bottom line.

No, I am referring to the fact that comprehensive "share the pain" employee engagement strategies – wherein everyone from the CEO to the front-line worker makes some sacrifices in tough times like these in order to come out on the other side better positioned for growth – should account for retaining older employees just as much as Boomers and Gen Xers and Yers.

Why should the ratio of older employees within the workforce post-economic crisis be of concern? It's enough of an issue that Newsweek columnist Ellis Cose calls the trend of employers axing older workers "idiocy" in this week's issue. He describes the dubious tactics of said businesses in this regard as follows:

They may force supervisors to rank employees on subjective criteria – such as mental "flexibility" – that are essentially a license to discriminate. Or they generate paperwork alleging drops in performance that have no clear explanation.

Cose paints organizations that engage in these actions as having a significant advantage over affected employees that allege discrimination because of the legal fees involved, which are tough if not impossible for workers to manage. But really, argues Bernie Dyme of workplace services provider Perspectives Ltd, companies in this scenario are the ones losing out. As he wrote last week on Working World Cafe,

[P]eople are more productive far longer. And with the economy faltering of late, these folks will be in the workforce even longer than in the past. ... Older workers can bring experience, maturity and stability to the mix as well as strong values around customer service and company loyalty.

What are your thoughts on this issue that has everything to do with building teams in the workplace and, in fact, workforce effectiveness?

A $0 Tactic for Greater Employee Productivity and Retention

Fri, 06 Nov 2009 23:23:38 +0100

Kudos to the always insightful Steve Roesler over at All Things Workplace for pointing to a trend when it comes to three-plus decades' worth of employee engagement research: More than anything else, workers seek senior management's interest in their well-being.

And while there are team building strategies impacting companies' operating expenses that allow leadership to be all about this – employer-paid medical insurance, wellness-themed activities, and flex work arrangements come to mind – as a leader you can meet this need by simply walking around and checking in on everyone.

A bonus of this time-honored use of an executive's time is that, if any of your people have illusions that you're Mr. (or Ms.) Moneybags delegating all from your ivory tower, doing this shows that you're a real person with relatable issues, both personal and professional. In my own career I've been amazed at the electricity that often builds when the CEO takes the time to meet with one or more employees.

This is particularly important in small businesses. In fact, there is a fair amount of debate that this networking should fall on leadership's shoulders, and not Human Resources', as the majority of small firms, with fewer than 50 employees, are often not equipped to have HR tackle their core competencies of administration and compliance, and spearhead communications team building.

This is why firms like 1-800-GOT-JUNK?, whose employees benefit from private lunches with the CEO, and Communispace, whose CEO thinks of her first duty as serving as "chief culture officer," have garnered such great press over the years in building an effective workplace culture – a culture which, in turn, has improved the bottom line through higher productivity and greater ease in attracting top talent, reducing recruiting budgets.

So, leaders, here's some homework for you: Over the next month, set a day where you dedicate an hour to simply walking around and talking to your employees. Start casual, asking them what's going on in their personal lives. Monitor how often this spurs "shop talk." And at the end of the month, see if the engagement level is improved. I'm guessing it will be.

10 Small Businesses That Surprise and Profit from It

Thu, 05 Nov 2009 23:35:36 +0100

I enjoyed Standout Jobs founder Ben Yoskovitz's Instigator Blog post sharing the wisdom that there is competitive advantage in how well a company carries off, of all things, the surprise.

Referencing a book on this topic by Andy Nulman, founder of the Just For Laughs event and co-founder of Airborne Mobile, Yoskovitz writes,

People will give you their money if you surprise them. And I don’t think enough people realize the value, importance and power of surprise.

Too true. And as Yoskovitz later alludes to in his post, most consumers are so fed up with the status quo of how companies treat them that it doesn't take that much of a surprise to convert them into paying customers.

As they do with respect to other leading-edge trends for small businesses, our honorees by and large have embraced the surprise as a way to get on potential customers' and clients' radar screens, earn their business, and especially keep them coming back – helping to preserve their cash positions and support people practices to retain their best employees in tough times.

Here's a list of 10 Winning Workplaces honorees that surprise and profit from it:

Aquascape How: First-time purchasers of Aquascape's water garden and pond supplies are quickly (and happily) converted to evangelists through fun and informative gatherings such as their annual Pondemonium.
Dancing Deer Baking Company How: People don't just want to indulge their taste buds when they consume cookies and cakes – they want to enrich their soul. DD makes this possible through their products that support causes that matter in their home state of Massachusetts.
Gentle Giant Moving Company How: Today there are other moving companies that differentiate on service, but this notion didn't exist when Larry O'Toole founded Gentle Giant in 1980.
Headsets.com How: Mike Faith's business would be profitable but arguably not nearly so much if "customer love" and training managers to look for things done right – not wrong – weren't hardwired into their culture of ownership.
Jackson's Hardware How: A focus on mentorship and cross training means all employees can help any customer with questions to facilitate sales.
Mike's Carwash How: Front-line employees wear neckties, applying a Nordstrom-like "If it's not right, we'll make it right" approach that's rare in the industry.
New Belgium Brewing How: Craft breweries are a dime a dozen these days, so how do you stand out? New Belgium has done so by tuning their eco-conscious customers in to the company's eco-themed team building strategies.
Rackspace Hosting How: Similar to the industry-redefining service of Gentle Giant, Rackspace found unparalleled success by applying "Fanatical Support" to web hosting, spawning many imitators.
Skyline Construction How: It's an ESOP company that is 100% employee owned; union and non-union employees and customers have a say in the firm's strategic direction.
The Paducah Bank & Trust Company How: Through everything from customer outreach via an ice cream truck to subsidizing a major community revitalization effort, Paducah is not merely a bank but a public partner.

Image credit: Wikimedia Commons

Three Tips for Making Online Consumer Bias Work in Your Favor

Thu, 05 Nov 2009 23:34:40 +0100

One of the cool takeaways from Winning Workplaces' annual conference this year was from the session on Open Brand/Open Business/Open Culture. This session, which explained the value of transparency and social networking in business relationships, was presented by these two business leaders and moderated by a faculty member from DePaul University's entrepreneurship center.

The takeaway I'm referring to is the book The Open Brand: When Push Comes to Pull in a Web-Made World, which attendees of this session received. A team effort of 2008 Top Small Workplace Resource Interactive (RI), it contains 200 pages of great tips when it comes to leveraging the power of the Internet and social media to create community awareness around your brand and products/services.

I definitely see activities for employee engagement in the strategies RI outlines (I'm reading the book now). You might, for instance, keep employees engaged in exploring the three tips provided on page 84, which answer the question of how to make consumer "acceptable bias" work in your favor:

Enable and foster dialogue about your brand and products without seeming to influence.
Give your online, potential customers a forum, a gathering place, a community of their own. "If such places already exist for sharing product opinions and tips – and it's highly likely they do, tread lightly on their turf and identify your contributions."
Organize your reviews by affinity groups so it's easy for consumers to find the insights of others like themselves. (RI points to this as an example to emulate.)

For more on Resource Interactive and how they're delivering for their clients in part through innovative staff engagement activities, check out these posts:

Dedication to Ethics Nets IPM Another Award, More Exposure

Wed, 04 Nov 2009 23:37:31 +0100

Ethics in business. It caught consumers' attention in a big way at the start of this century with the Enron scandal, and unfortunately continues almost a decade later with the likes of JP Morgan Chase.

Yet, even though these big business stories grab headlines, it is smaller firms that, while lower in profile, are keeping ethics from becoming a completely throwaway notion.

One of these is Integrated Project Management Company (IPM). A 2008 Winning Workplaces/Wall Street Journal Top Small Workplace, this Illinois-based consulting firm impressed our judges by how their President, C. Richard Panico, was able to take his academic interest in strong ethics and integrity (he has chaired De Paul University's Institute for Business and Professional Ethics since 2001) and use it to shape IPM's employee engagement practices to maximize client performance and, thus, company profitability.

IPM's work continues to earn the business accolades. The Better Business Bureau (BBB) just announced the organization as a recipient of its 13th annual Torch Award for Marketplace Ethics.

To learn more about how IPM's employee engagement model impacts business results, read our Success Story on them.

Bailard Inc. Props Up Investment Management's Rep

Tue, 03 Nov 2009 01:04:17 +0100

Because of the dubious role a number of Wall Street-based investment management firms played in the financial crisis starting last fall – not to mention lone wolves like Bernie Madoff – the industry's reputation has taken a beating.

However, not all companies in this space are out to bilk investors or the public. 2009 Top Small Workplace Bailard Inc., based in Foster City, CA, has used a smart, long-term strategic approach to continue to deliver for their customers. In return, their customers stay with them – at an astounding rate of 97% even in a bad year like 2008.

Tom Bailard, the firm's Co-Founder, explains the link between investing in your workplace through employee development strategies, and benchmark-beating customer satisfaction and retention in the following video, which I just added to our Facebook page.

Check it out (if you're viewing this in an RSS reader click here):

Become a fan of Winning Workplaces on Facebook and view our other videos featuring leaders of successful small businesses.

The Value of Greater Morale

Tue, 03 Nov 2009 00:40:26 +0100

Recently America's Best Companies shared four employee engagement ideas for managers to boost morale. They're all strong, time-honored strategies; check them out here.

But what end does the means of increasing morale serve? A new article in the Las Vegas Sun argues that it's keeping your best employees grounded and motivated to continue to put forth their best effort in an economy that results in their neighbors (former coworkers) disappearing due to layoffs.

The Sun cites as a subject matter expert Wharton School faculty member – and Top Small Workplaces judge – Peter Cappelli, who warns that, "If you don’t tell them what you know, employees make up a story, and that story is always worse than reality."

We all learned when we were in school that things can change drastically during a game of Telephone. Apply that to a workplace setting at an organization where the leadership doesn't practice communications team building and the resulting, unfounded level of stress can be debilitating to company productivity as everyone wonders who's next to go, and when.

For more on how boosting morale can have a real and lasting impact on the bottom line, see these related posts:

How Top Small Workplace Honorees Do Halloween

Sat, 31 Oct 2009 02:26:29 +0100

Sarah Sedberry, our account manager at Winning Workplaces' blogging provider, Compendium, wrote a post on their blog today that I think every small business (or business in general, for that matter) should have done this week: one in which you reveal a little of your workplace culture by showing the world how your employees let loose on Halloween.

How is spending time on this good for business? Well, even though your customers or clients are concerned about how you can help them improve their numbers, they're human just like you. The more you reveal – appropriately – about your workplace culture, the more 3-dimensional a partner you become. That can only be good for maintaining and strengthening business relationships.

And our Top Small Workplace honorees are nothing if not human. Well, inhuman in some cases come All Hallows' eve, but you get my point. Check out the photos below to see how these award-winning firms engage in some serious holiday team building in the buildup to October 31.

Advanced Financial Services (2009 Finalist):

King Arthur Flour Company (2008 Winner):

Radio Flyer (2009 Winner):

Rainforest Alliance (2008 Winner):

rbb Public Relations (2009 Finalist):

The Focal Point (2009 Finalist):

How does your workplace do Halloween?

Nonprofit Does Not Have to Mean Substandard Benefits

Sat, 31 Oct 2009 00:37:51 +0100

Today on Brazen Careerist Founder Penelope Trunk's blog, the entrepreneur wrote,

My ex-husband worked in the nonprofit sector for a while. And you know what? He rarely got health insurance. At one point, we were completely stressed out about not being insured, and he asked his boss what everyone else was doing, and she said, “Can’t you get insurance from your spouse? That’s what we do.”

That’s appalling. Being a non-profit is no excuse for treating people poorly.

Trunk couldn't be more right. Winning Workplaces has been fortunate to recognize a nonprofit organization each year that we've run the Top Small Workplaces recognition project with The Wall Street Journal. That's three out of 45 firms from 2007-2009.

To prove Trunk's point, below is a snapshot of the health care and other benefits at the three nonprofit Top Small Workplaces:

*For a one-year or longer term employee
+Tohono has a central leave bank of 18 paid days/year

What is the payoff of employee engagement and investment in this way? Because workers see, through these and other people practices, that their employer cares for their well-being and development, it's greater morale and productivity, which directly affects employee commitment and self-sustainability that allows these firms to continue carrying on their missions.

Check out these business results, averaged among the three nonprofits, that accrue as a result:

Annual revenue: $15.8 million
Revenue growth: 25.6%
Employee tenure: 5.2 years
Employee turnover: 10.7%

Hopefully this settles both the argument that working for a nonprofit means giving up solid benefits, and the fast-dissolving (due to economic reality) but still persistent notion that nonprofits can't function like a business.

Photo credit: Blog.penelopetrunk.com

More Data: Fall 2009 Economic Survey of Our Honored Firms

Tue, 27 Oct 2009 23:31:41 +0100

In Winning Workplaces' latest check-in with the over 100 small organizations that we've honored for their innovative people practices for building trust in the workplace, we shared a lot of qualitative feedback directly from their leaders on what they're doing to remain competitive in a tough economy.

With this qualitative focus, our October newsletter article largely eschewed quantitative data. But that doesn't mean we didn't gather it. Check out the charts below to get more of a sense of how these firms are doing in Q4 2009 compared to Q2.

Changes in sales has your company has experienced in the last six months:

While about 5% more companies experienced a more moderate decrease in sales in Q4 than in Q2, about half as many dealt with a major decrease of 30% more in Q4 than did in Q2.

Actions your business has taken in response to the tough economy:

The key difference from six months ago is that more firms have implemented salary cuts for employees – 30% in Q4 versus 17% in Q2.

Changes in profitability you expect to see in the next 12 months:

The biggest changes in expectations from Q2 to Q4 were:

20% drop in the number that expect a decrease in profitability of 5-10%
Whereas in Q2 no respondents expected an increase of 5-10%, in Q4 close to 22% expect this outcome

How does your business compare to the aggregate data shown here? What role has employee engagement played in shaping your performance?

B-School Opportunity: Help GenY Entrepreneurs Grow Their Companies

Tue, 27 Oct 2009 23:27:59 +0100

In Winning Workplaces' Q&A this month with Donna Fenn, a contributing writer for Inc. magazine and author of the book Upstarts!, about Generation Y entrepreneurs, I asked her about what schools of business are doing well and what they could improve upon when it comes to preparing young people to start companies and lead their employee engagement activities.

You can read part of her answer in the article on our website that appears in our October IDEAS newsletter. I present the rest of it below, which was left out of the piece due to length:

We're seeing many, many more colleges and universities starting entrepreneurship programs now, and they're increasingly better at helping students incubate ideas and also get companies off the ground. Entrepreneurship education is focused more than ever on helping students in starting and growing existing businesses rather than just preparing them to do that when they graduate.

We always hear that the toughest part of an entrepreneur's job is managing people. It's fun coming up with ideas, raising money and getting things off the ground. Then you go from you and your partner to you, your partner and a couple of part-time people, and all of a sudden you've got a staff of 10 and they're hard to manage. I think that especially for young people who may be managing employees who are older than they are, they may not have the skills needed to do that.

You know, kids in their teens and twenties take for granted now that entrepreneurship is a viable career option – it's a rock star career option. This just wasn't the case when I was growing up. They have very supportive Baby Boomer parents, but we are the first generation that made the shift from going out and getting a job with IBM and trying to stay there for 30 years to, "Uh oh, that's not going to work out so well."

And I think that's part of it: You have parents saying, "Corporate America disappointed me, and I don't want my kid to work for five or 10 years just to get a pink slip. I'm going to help him or her make their own way in the world by starting a company." There are a lot of parents working with their kids, or for their kids as they start their companies.

Related Posts:

People Practices Fuel Three Stages of Revenue Growth at King Arthur Flour

Tue, 27 Oct 2009 23:20:18 +0100

Winning Workplaces' most recent Success Story on 2008 Top Small Workplace King Arthur Flour Company – part of our October IDEAS newsletter – represents a first among the over 100 such small business profiles we've written. It's the first to chart revenue growth by people practices, proving the payoff of employee engagement.

As my colleague Jason Ticus, who interviewed employee-owners at the Vermont-based consumer goods firm, wrote, "For decades the company operated small scale and independently, actually shrinking to the point of having only three employees in 1990 (with revenues of $3.5 million)."

That year served as a launching pad, though. The graph below depicts three strategic pivot points that – fueled by their culture of ownership – enabled King Arthur to increase its revenue by over 1800% from 1990 to today. And employ 157 (5200%) more people.

Related: Learn how 219-year-old King Arthur is mixing tradition with new inventions from their CEO, Steve Voigt, in this webinar recording.