Monday, May 16, 2011

Are You A Commodity?

A company had some explaining to do to their investors. Apparently the majority shareholders were not content with the company's acquisition and property management strategies. There is too much $ out and not enough coming back. I guess this is a concern if you are banking money into a fund and seeking returns.

My question: What Does This Have to Do with How the Company Operates?

The Board is watching margins, dividends, stock prices and projections...I would be more concerned with how the Employees are being treated!

Doesn't it stand to reason that if you treat employees well they will produce. If employees produce, profits increase, and share holder value goes up. I know there is a formula that drives a grading scale that makes a company a viable on Wall St commodity. But, the people working 12 hour shifts to pay the mortgage probably don't see their company as a commodity.

If I was in charge of driving revenue I would focus on 3 areas:
* Retaining Talent
* Creating a Unique Corporate Culture
* Mid-Level Leadership Empowerment

That's how much it costs a 20,000 employee company to turn over 7.5% of it's workforce (a below average turnover rate). That's just the hard cost. Client relationships will suffer, product development will be slowed, those with valuable system comprehension will never get to mentor their successor.

You lost $120m, a few flagship clients, and irreplaceable workplace knowledge because you forgot how to say THANK YOU!

People leave employers for one reason: the light at the end of the tunnel fades out.

There has to be a daily validation of effort. A Development Path and Applicable Skill Training is all any hard working person needs. That, and a pat on the back when they perform well.

It's that simple!

What Makes This Place Unlike Any Other?
Next time you are in an interview ask that question. If you get any type of answer odds are the company is trying to discover their greatness. That's all any great employee can ask for.

The understanding of what makes your company great is the recognition of your differentiator. Not all hiring managers can answer the aforementioned question.

Thought Leadership on the Rocks
Every company has a CEO with Vision. All Executive Leaders are smart as hell. You don't get a seat in the boardroom by being a dum dum.

The Problem: The bigger the company gets, the more layers we build between the idea and the people who are charged with carrying it out.

I used to travel across the country to hear our CEO speak. It was worth it. After a week of being back home, I could not remember his message. This because the multi-layers of 'management' between the CEO and I were so thick. The message transformed from Vision to Warnings.

Middle Managers are those who carry the torch in your organization. These are the folks that interface at closest range with the revenue producers and customers. They are underpaid, they are powerless to fire anyone, they have 'rules' thrown down from 20 stories up, hiring is a constant, and they make less money than their top producers. As Middle Managers are forced to become politicians, Leaders become Babysitters - No Fun!

Most companies fail to understand that empowerment to the people with their feet on the street is far more important than repurchasing stock or issuing dividends.

I know what you are saying: there will be no employees if the company is spending money it doesn't have. I get it. I simply wish companies would focus on the little people's blood, sweat, and tears (more than numbers on a report).

Don't Forget to Remember!


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