Turning Your Employees Into Owners
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Yves Morieux presented his TEDX talk titled, “As Work Gets More Complex, 6 Rules to Simplify”.  The presentation is a little hard to understand, but well worth the effort.

Historically, there have been two pillars of management.

Hard: Structure, Processes, Systems

Soft: Feelings, Interpersonal Relationships, Traits

These pillars result in complex systems that work around the problem.  The secret sauce of management today is cooperation.  Cooperation allows the team to work through the problem.  When people cooperate they use less resources.   Tenents of management that focus on cooperation include six principles:

  1. Understand What Your People Do
  2. Reinforce Integrators
  3. Increase Total Quantity of Power
  4. Extend The Shadow Of The Future
  5. Increase Reciprocity
  6. Reward Those That Cooperate

Criticism should not be management’s response for failure, but for failing to help or ask for help.

At Ardent, we believe it is important to have the difficult discussions to result in decisions that foster cooperation.  Without a commitment to mutual trust, a complex, bureaucratic system fills the gap resulting in a dysfunctional organization.

I strongly urge to you watch Yves Morieux’s presentation.

 

One of the questions that gets asked during almost every business review in our Vistage meetings is “What Happens If You Stop The Bus”?  As leaders, our job is to live in the future to prepare our organization and family.  Unfortunately, we have little to no control when we will “exit stage right”.

One of our members was fifty and his kids were in college. He had a successful company with a respectable net worth that required tax planning.  After our line of questioning, it became evident that he had very little planning in place.  There were no wills, trusts, or discussions about what should happen.  There was insurance in place for a buy/sell agreement with his partner, but very little structure.

One of the tenents of a group like Vistage is to hold each other accountable.  The outcome of this business review was to have the member bring back a completed estate plan in one year.  When he came back he had a funded family trust, revocable trusts, irrevocable insurance trusts, and wills.  At fifty-two years old  he suddenly passed away from a heart attack.

On March 11, 2012, my father passed away and I was his executor and successor trustee for multiple trusts.  What I learned from these experiences is even with the best formal plans (trusts, wills, etc.), it is very helpful to share the intent and thought process regarding decisions that were incorporated into your estate documents.  Shortly after my father’s passing I wrote two letters.  One to my best friend who was my successor trustee and executor and the other to my business partners.  The following was the outline for my family letter:

Professional Team (name, address, phone number)

  • Lawyer, Accountant, Family Chief Financial Officer, Insurance Agent, Bankers

Balance Sheet

  • Asset, Titling, Location, Account Number, Contact Name, Phone #, Balance, Purpose

Family Responsibilities

  • Our estates would receive at some point funds from our parent’s estates.  Explaining any future impact or transaction will allow better planning.  For planning purposes I roughly provided an idea of what funds or responsibilities might be coming our way.

Family Estate Plan

  • List of every family member, SSN, DOB
  • List every trust, title, tax ID #, and author
  • Provide a narrative of every trust, purpose, trustees, successor trustees, beneficiaries, disposition of trust, termination
  • List of corporations, type (LLC, S-Corp, etc), role, contact, % ownership, estimated value
  • Insurance Coverage, insured, company name, policy date, policy number, owner, beneficiary, death benefit, cash value, annual premium, premium due date, agent name and phone number

Family Operational Plan

Since the intended audience of this letter was not a family member, I described how we lived, where the money came from, what was the cash burn rate, etc.

Directives and Background

In my case, my best friend would be my executor and successor trustee after my wife in some cases.  I will explain more in a future post.

Children:  I shared the strengths and challenges of my children.  Suggestions on what type of mentoring they would need and general discussion of financial support.  I also discussed who should and could be a guardian.  I discussed several scenarios on how he could use trust and personal resources to respond to specific children challenges we anticipated.

Money:  I provided a summary of the resources that would be available and our intent on how to provide for our children.  Our first goal was to do no harm.  We discussed the intent of allowing when and how for them to control their trusts and how we intended to protect them if they were to get divorced.

Resources:  I also provided the names of my Vistage group members.  These individuals know more about me, than me.  They would be a good resource if he needed to bounce an idea off a knowledgeable group.

I update this letter every year and it gives my friend and I an excuse to get together and discuss life.  When my wife and I are traveling the world together, it gives me peace of mind that my family will be in good hands if something should happen.  It gives us the freedom to live life.

Defining the industry standard for public swimming pools has been a patchwork of local efforts resulting in over 256 separate codes impacting design, construction and operations.  This fragmented process has resulted in conflicting regulations and the inability to create a dynamic best practices process for aquatic safety.  The simple fact was that the aquatic industry was not doing a good job of providing the best possible information to keep pools safe and keep pools open.

In 2007, with seed money from the National Swimming Pool Foundation, the Center for Disease Control (CDC) began to develop a Model Aquatic Health Code that is user-friendly, knowledge-based and scientifically supported with the goal to reduce risk and promote healthy water recreation experiences.

Since that time, 14 separate modules have been developed, posted for public comment, refined, and now knitted together into one comprehensive document.  This complete version was released for public comment on March 28, 2014.  If you are an aquatic industry professional, I strongly urge you to take the time to review the material and provide your feedback.  This is critical to the success of the pool industry.

Links:

Model Aquatic Health Code

Model Aquatic Health Code Annex

Comment Process

Comments are due by May 27, 2014.

We are paid to think.  One of my mentors, Vince Langley, suggested that if you see one of your team members leaning back in their chair in deep thought that this is a good thing and should be encouraged.  He went further to suggest each team member should take time each day to think.

As business leaders are we feeding our brain and allowing it to metabolize our thought’s.  Where I do my best thinking is when I am around other business people learning new information.  Something gets said that sparks ideas, sometimes on a completely different topic.  There are business groups that are particularly good for this type of brain food (Vistage, The Alternative Board, Young Presidents’ Organization and many others).  Online TED Talks are another great way of getting the brain going each day.  Not only will you feed your brain, but add a great deal to your personal knowledge base.

The closing ceremonies had barely finished in Sochi when the eyes of the world returned to this region to try and understand the impact of the Ukrainian Crisis.  As business leaders should we be taking action to plan for changes economically, politically, or internationally.  Alan Beaulieu with ITR Economics is a resource I have followed for years.  In his recent blog post he explains that the US economy is so large that any disruption will have minimal impact.  In addition, both Russia and the Ukraine need hard currency, so any disruption will be short to keep the cash flow going.  In summary, this is mostly a political issue.

To read the full article click the below link:

http://itreconomics.com/blog/economic-impact-of-situation-in-ukraine

 

In January, I shared with you the presentation by Eliot Frick titled Geese from Bottles, Saving Business by Making It More Human.  The conversation about future business management practices adapting to the needs of the changing market, the ways we communicate and our work environment is ongoing.  An outgrowth of the Tedx presentation is the creation of a movement called The Be Human Project.  Their conversations focus on the need for business to learn that organization is about having an organic body, which means fluidity, holism, interdependent agency, non-determinism and creativity.

It is a lot to think about, but whether you are a believer, curiosity seeker or naysayer, learning more about the conversation will help you be ready for the future.

Peter Strople, is a former director with Dell Computer Corp. and Grid Systems Corp.  In 2008, he created “Friends of Peter” and has been called “The Most Connected Man in America”.  Peter was the keynote speaker at The Inaugural Be Human Salon presentation.

To see this incredible conversation, log into the Be Human Project YouTube channel.

Attracting top talent is getting harder and harder.  Last week, I shared tools to help identify key attributes in candidates.  The fact of the matter is exceptional team members are in great demand and to get them, your bus has to be better than the rest.

For starters, the hiring process needs to be personal and reflect the type of communication they would experience when at the firm.  Avoid a faceless electronic communication process.  Each contact point is an opportunity for you to share your bus’ culture.  Use the job posting to help sell the position.  Avoid just the typical narrative of skills. Talk about your “why” as outlined in Simon Sinek’s TED Talk. (Ardent Dec 4, 2013).

Stay in touch.  Not communicating is still communicating.  If you aren’t ready to move forward, be communicative about what is going on.  Even if the bus has a bumpy ride, building trust will serve you well in standing out from the others.

If it is your goal to have a long term working relationship and not a transactional one, the hiring process must reflect the same.

Reflect on your failed hires.  Did you every fire someone because of what was on there resume?  For me they were critical factors not covered on a traditional resume.

Jim Collins in Good to Great said “Get the right people on the bus and put them in the right seat”.  How do you get this intrinsic information?  What if you could quickly learn the following about a perspective candidate?

  • What value will they bring?
  • How will they respond to challenges and problems?
  • What is their ability to manage multiple and changing priorities?
  • What is their decision making process?
  • How will they respond to others?
  • How do they communicate?
  • What is theirmost effective environment for managing and motivating?
  • How will they attack professional development and continuous improvement?
  • What is their natural and adaptive style?

There are effective tools to identify what seat is best for them and help you determine if they belong on the bus.

My favorite example was when we were hiring a full charge bookkeeper.  Our accounting system was unique, so I thought we hit the jackpot when a candidate’s resume showed ten years experience with our system.  Experience and stability was screaming “hire me”.  After completing the assessment I learned that this individual did not like repetitive tasks, and would not do well sitting behind a computer all day.

What was wrong with this picture?  With this new information I was able to ask better questions.  I learned that after being hired for the full charge bookkeeper position, the candidate moved into a start-up training role for new branches.  This involved a fast paced, dynamic environment that was a perfect fit for their style.  While the title was the same, I asked if they felt our bus seat was right for them and we both answered “No”.

The U.S. Department of Labor currently estimates that the average cost of a bad hire can equal 30% of the individual’s first-year potential earnings.  The numbers approach to hiring fast and firing faster is no longer financially viable.

Assessment tools can vary significantly in cost, time, and complexity.  What worked best for our purpose was a 15 minute online questionnaire that would generate an email with the results when completed.  The information became so important to the process, we would not interview a candidate until they had completed the process.

These tools provide the information necessary to make a timely and informed decision.

 

 

The historical approach to business leadership has been to tell the team what to do and how to do it.  It my belief that to build the trust required to turn your employees into owners, everyone must understand the why.  Simon Sinek presented his “How Great Leaders Inspire Action” at the TEDEX in September 2009.  This talk hasbeen viewed over 16 million times which is the most watched presentation in the history of TedX.

To see Simon Sinek’s presentation use the below link:

http://on.ted.com/c06sz

Does the worker or the leadership define the corporate culture? Historically, the different generational norms have greatly influenced the corporate culture.  For the veteran it was hard work, respect, and sacrifice.  For the baby boomer it was being a workaholic and achieving personal fulfillment.  Generation X was self-reliance and skepticism and generation Y was multi-tasking and goal oriented.  The millennial skill set is also having a profound change on business culture and management.

Eliot Frick recently spoke at the TedX Gateway Arch on business’ need to change to save itself.  He explains how holocracy is one new business model that is taking business forward and adapting to change.  I encourage you to watch this truly incredible presentation.

Geese from Bottles: Saving Business by Making It More Human