Keys to Employee Engagement: 9. Commitment

Published January 21, 2016 | By Ron Jamieson

 

So far, in this series, we’ve talked about ensuring employees have a clear idea of what is expected of them and helping them realize that by providing them the tools to do the job right.  Employees can be inspired by the company’s mission, which can give them a strong sense of purpose.

I’ve seen several organizations where the majority of employees are excited about coming to work every day but a few slackers were enough to bring down the mood in the office.  It can be hard to sustain your motivation if your co-workers undermine all the good work you do by not caring.

So the ninth question in Gallup’s Q12 explores this, posing, “Are my co-workers committed to doing quality work?”

 

Gallup suggests this commitment by fellow workers, along with four other measures is correlated with productivity.  When employees, overall, feel their fellow employees share their commitment to the organization, the productivity of the organization increases.

(The other four measures were: “I know what is expected of me”, “My opinions are valued”, “ I believe in the company’s mission” and “Overall satisfaction”.)

Imagine how it must feel for someone who takes pride in their work and who does an excellent job to hand off their work to someone who drops the ball or is careless how they do their part of the task or project.  Similarly, you’ll find in many companies employees who have to correct others’ mistakes or sloppiness so they can hand off to the next operation.  They must feel constantly frustrated.

From a customer’s point of view, shoddy workmanship usually shows up in defective materials.  They have to call in the sales rep to assess the scope of the problem, segregate defective materials and work out some form of compensation as well as paperwork to return the defective goods.  In a worst case scenario, the customer may have to shut down their line and lay off people – then ask for even more compensation for lost work and possibly lost business.

What can you do about this?

One of the easiest ways to start addressing this is by going out on the shop floor (or office) and talk to the employees one on one to work your way through the process to identify which employee(s) are contributing to the situation.

Improving the calibre of their work may simply be a matter of training them or providing the proper tools to do their task right. It might mean modifying the process (by automation, for example) to remove the human element from affecting the outcome.

If the root cause of the problem is attitude, that is a much harder issue to deal with.  It may mean terminating employees.  In some cases, not getting rid of employees who don’t care about their jobs can be seen by employees as weak management or a demonstration that management doesn’t care or lacks commitment to the company’s mission.  You can risk losing your best employees in this type of situation.  So, sometimes terminating bad employees have a positive overall effect on morale and productivity.

Getting out on the shop floor is one way to demonstrate to employees that management cares about what’s happening in the plant. Speaking with them one on one is one way to show that management cares about employees’ opinions.  Correcting problems in the plant shows employees that management can not only act on their input, but also walk the talk.  In other words, they have enough commitment to the company’s mission to make things work.

Talk is cheap. Action gets results.

6 Secrets of Business Leaders Who Built Hugely Successful Companies

 

 

1. Communicate from the inside out.

Simon Sinek, author and CEO of the Sinek Group, believes the most awe-inspiring companies begin with a great leader who regularly asks herself “Why?”

Why are you in business? Why should customers care? Popular brands emanate a strong, purposeful mission statement to their customers. Often, people can live without your product or service, but they consistently do business with you because they support what you stand for, including your vision.

Apple’s latest launch of products illustrates this. Visit Apple.com to learn more about the new MacBook and get caught up in how the company describes its latest offering. “With the new MacBook, we set out to do the impossible: engineer a full-size experience into the lightest and most compact Mac notebook ever.”

Apple engages you with a feeling they are conquering the impossible for the user’s ultimate benefit. The brand prioritizes users’ needs to create beautiful, easy-to-use products. To build a successful business, leaders need to fully understand why they are doing what they do and communicate that to their employees and customers. No gimmicks. No fluff. 

2. Shoot the dogs early.
In 1973, Barbara Corcoran started The Corcoran Group with a $1,000 loan from her boyfriend. By 2001, she successfully scaled and sold the company she founded for $66 million. As a leader, she knew her success depended on the overall happiness and productivity of her team members. To ensure her employees had the best working environment, Corcoran routinely weeded out  the complainers and the laggards who negatively impacted everyone else’s performance.

Each year Corcoran cleaned house and let the bottom 25 percent of her sales staff go. She calls this “shooting the dogs early.” By releasing the poorest performers and those who groan and grumble, she maintained high company morale and ensured she retained the best staff possible. 

3. Walk it out.
When building a business, entrepreneurs often get stuck. Completing a simple task, conceiving new ideas or resolving a small problem can feel tantamount to climbing Mount Everest. To overcome an obstacle, you might just want to take a walk.

According to the New York Times, studies have shown that exercise helps you perform better in areas like decision making, organizing your thoughts and thinking creatively. In the workplace, this can translate in a few ways, the simplest of which is taking a quick walk around the office. Encourage your employees to get up and stretch their legs if they find themselves helplessly stuck on a problem.

You can also encourage walking meetings in your office. The Guardian suggests taking four to six people on a walking meeting to get ideas flowing. Set a time limit of 30 minutes to keep from over-exerting everyone, and offer to buy coffee the first few times you go out. Keep track of all the ideas you come up with on your smartphones. 

4. Be transparent.
As more companies open up about their processes and methods, customers are becoming savvier and hungrier for transparency. Fortunately, transparency does not require you to fork over trade secrets but it does mean being honest about how you conduct business. Your customers want to feel they can trust you. Openness and information sharing helps to build that trust.

Clothing company Everlane takes transparency to the next level. While many retailers disclose where their materials are sourced and what kind of factories they use to make their products, Everlane goes a step further and tells shoppers what the company paid for their materials. Every item has a “Transparent Pricing” section that explains how much the materials, labor, duties, transportation, real cost, and markup is for that particular item, comparing it also against how it would be priced at a traditional retailer. By sharing the economics of each garment, Everlane fosters client loyalty, brand trust and the intimacy companies need with customers to prosper. 

5. Encourage your employees to express their creativity.
Profitable and sustainable enterprises thrive on original thinking while copycat businesses shutter their doors as soon as the idea they have stolen loses its relevance. Since the successful conception and development of viable business ideas takes time and requires a flexible corporate structure, try setting aside a dedicated amount of resources to allow your employees to be creative on their own terms.

Google does this by giving its engineers 20 percent of their time to work on any project they want. This allows team members to develop products they are passionate about. Many times, that means more care and attention goes into each effort. Gmail is the most famous consequence of Google’s generous 20 percent time policy. 

6. Work in small groups.
According to the Small Business Chronicle, small groups allow employees to bring their individual skill sets to the table, which can complement and augment others’ talents. Having multiple perspectives can help the group approach a project or issue from different angles. This enables fresh ideas to emerge and mature.

Whenever possible, encourage your coworkers to collaborate in small groups. Businesses flourish when colleagues partner to conceive, develop and implement new concepts that help the company grow. Often, team members would not be able to produce the same sort of ideas alone. The best products and services are seldom built in a vacuum.

How to Have Productivity After The Write Up

Write ups...you know, that thing most managers hate to do, and theoretically all employees hate to receive. Write up, corrective action, disciplinary action, performance improvement plan all are meant to put employees on notice that they are doing something wrong. And that they need to improve it, usually with an expected time frame.

Maybe you have received or delivered these in your career. There are good ones and bad ones. Sometimes HR assists and sometimes not. If written or delivered well, you can get a good outcome. If written or delivered poorly, well... you don't get a good outcome. The biggest pitfall of a poor write up is that the employee comes away demotivated and productivity spirals downward.

There are three things to consider: the write up itself, delivery and follow up.

The Write Up. How is it structured? Does it stick to facts and company policy or does it degrade the employee as an idiot, a poor excuse for a human being? Or is it unclear such that the employee is confused? It should state what the employee did wrong, statement of the policy that was not adhered to, expectations of what the employee must do going forward, the consequences if the employee does not improve and the time frame. That's it, clear, brief and to the point.

The Delivery: Manager. This is the most important aspect to have good productivity afterward. It is important to be straightforward about the specifics, no long embellishment dragging details through the mud. Then close with something positive. If the manager REALLY wants the employee to go back to work and be productive, then give the employee something positive to make them want to go back and be productive. Compliment the employee in those areas deserved, and let him/her know that you are confident of their success in overcoming this. Having the employee productive afterward is 80% how the manager delivers. Just remember that turnover is very costly, and salvaging a struggling employee can be well worth the effort.

The Delivery: Employee. OK, the burden is not all on the manager. The employee has to be honest, face up that the corrective action was warranted (almost all are). The best way to prove that you are a great employee is to deliver...correct the performance or behavior, be positive, and thank the manager for believing in you. Deliver these things even if you don't agree with the write up or the manager does not have faith in you. Others will notice, and the manager may change his/her mind about you.

The Follow Up. It has been 30, 60, or 90 days. Time to close the satisfied write up (hopefully). The manager should have been watching, encouraging, taking time to steer and be ready for the update. Of course not all will succeed, and that is worthy of a whole separate article. For those who do succeed, this should be a wonderful meeting. Both manager and employee should be saying "Thank you" to each other. The manager says "thank you for digging in and persevering to overcome this obstacle and succeeding. I knew you could do it, and I am happy and proud of you." The employee says "thank you for helping me along the way, your guidance and advice, and believing in me. I am happy that you are my manager and will continue to do a great job." I have witnessed employees becoming spectacular after working through corrective actions and being given a second chance.

This wonderful scenario doesn't happen on all occasions. There are poor managers, and there are poor employees. Managers should be focused on the bottom line for their department, knowing that productivity affects their bonuses and promotions as does turnover. Employees should be looking at their careers, promotions, or just keeping their jobs. In any case, good, strong productivity is important to both. And productivity can be strong even when write ups are necessary.

Written by

Mary Thompson, SPHR,

The 11 Rules of Highly Profitable Companies

Image credit: Shutterstock

 

How do you generate the most profit with the least effort? How do you maximize margins without sacrificing quality? 

 

I'm not talking more customers, nor more revenue, nor more offices and employees. Profit.

 

Based on my interviews with high-performing CEOs ("high-performing" determined using annual-profit-per-employee measurements) in more than a dozen countries, I've listed 11 common "rules" below. This is a return-to-basics call.

Here's your cheat sheet for consistent profitability -- or doubling of it -- in 3 months or less. 

1. Repetition is Usually Redundant — Good Advertising Works the First Time

Use direct response advertising (call-to-action to a phone number or website) that is uniquely trackable – fully accountable advertising — instead of "image" or "brand" advertising (e.g. billboards with no URL/phone/messaging), unless others are pre-purchasing product to offset the cost (e.g. “If you prepurchase 288 units, we’ll feature your store/URL/phone exclusively in a full-page ad in….”).

Don’t listen to advertising salespeople who tell you that 3, 7, or 27 exposures are needed before someone will act. Well-designed and well-targeted advertising works the first time. If something works partially well (e.g., high click-through with low percentage conversion to sales (CVR), or low click-through with high conversion, etc.), indicating that a strong ROI might be possible with small changes, tweak one variable and micro-test once more.

Cancel anything that cannot be justified with a trackable ROI. 

2. Pricing before Product – Plan Distribution First 

Is your pricing scalable?

Many companies will sell direct-to-consumer by necessity in early stages, often through a simple website. Only later do they realize that their margins can’t accommodate resellers and distributors when they come knocking. This is true whether your "distributor" is iTunes, a worldwide widget distributor, or Orbitz.

If you have a 40% profit margin and a national distributor needs a 70% discount off of retail (or "cut") to sell into wholesale accounts, you’re forever limited to direct-to-consumer… unless you increase your pricing and margins after-the-fact, or launch new "premium" products to fix the problem. For a bootlegged start-up, this distraction can equal sky-high customer churn or death altogether.

Plan out your first two years of distribution plan before setting pricing.

Think digital is different? Think again.

Test assumptions and find hidden costs by interviewing those who have done it: will you need to pay for co-op advertising, offer rebates for bulk purchases, or pay for shelfspace or featured placement? I know one former CEO of a national brand who had to sell his company to one of the world’s largest soft drink manufacturers before he could access front-of-store shelving in top retailers. 

3. Less is More – Limiting Distribution to Increase Profit

Is more distribution automatically better? Not necessarily.

Uncontrolled distribution leads to all manner of head-ache and profit-bleeding, most often related to rogue discounters. Reseller A lowers pricing to compete with online discounter B, and the price cutting continues until neither is making sufficient profit on the product and both stop reordering from you (or selling/referring your product). This race to the bottom requires you to launch new products, as price erosion is almost always irreversible.

Avoid this scenario and consider partnering with one or two key distributors instead, using that exclusivity to negotiate better terms: less discounting, prepayment instead of net payment terms, preferred placement and marketing support, etc.

Whether Apple or Estee Lauder, sustainable high-profit brands usually begin with controlled distribution. Remember that more customers isn’t the goal; more sustained profit is. 

4. Net-0 — Create Demand vs. Offering Terms:

This is related to Rule #3.

Focus on creating end-user demand so you can dictate terms. Often one large advertisement, bought at discount remnant rates, will be enough to provide this leverage.
Just because everyone in your industry offers payment terms doesn’t mean you have to, and offering terms is one of the most consistent ingredients in start-up failure.

To avoid getting strung out and cash-flow poor: Cite start-up economics and the ever-so-useful “company policy” as reasons for needing prepayment and apologize, but don’t make exceptions.

If you agree to receive payment on net-30 terms (they pay 30 days from invoice, or receipt of product), it will become net-60, which becomes net-120. Time is the most expensive asset a start-up has, and chasing delinquent accounts will prevent you from generating more sales.

On the hand, if tons of customers are asking for your product, resellers and distributors will need to buy. It’s that simple. Think a big order from Wal-Mart is a godsend? Be careful.

Since they're almost always net-180+, and they can return unsold product, it could actually be the death of your company. How are you going to pay for the needed inventory?

Typically, debt. What will you do if they return half of it because they didn't give it proper placement, so it didn't have sufficient sell-through? Be careful, lads and lasses.

Put funds and time into strategic marketing and PR to tip the scales in your favor. Consumer demand = your ability to negotiate better terms. 

5. Limit Downside to Ensure Upside — Sacrifice Margin for Safety

Don’t manufacture products in large quantities to increase your margin, unless your product and marketing are tested and ready for roll-out. In other words, only when you already have a proven demand and can forecast sell-through rate.

If a limited number of prototypes cost $10 per piece to manufacture and sell for $11 each, that’s fine for the initial testing period, and essential for limiting downside. Sacrifice margin temporarily for the testing phase, if need be, and avoid potentially fatal upfront overcommitments. 

6. Niche is the New Big — The Lavish Dwarf Entertainment Rule

Several years ago, an investment banker was jailed for SEC violations.

He was caught partly due to his lavish parties on yachts, often featuring hired dwarves. No joke. The owner of the dwarf rental company, Danny Black, was quoted in the Wall Street Journal as saying: “Some people are just into lavish dwarf entertainment.”

Niche in the new big, I tell you. And here’s the secret: it’s possible to niche market and mass sell.

iPhone commercials don’t feature dancing 50-year olds, they feature hip and fit 20-30-somethings, but everyone and his grandmother wants to feel youthful and hip, so they strap on Apple gear and call themselves converts. Who you portray in your marketing isn’t necessarily the only demographic who buys your product — it’s often the demographic that most people aspire to. The target isn’t the market.

No one aspires to be the bland average, so don’t water down messaging to appeal to everyone–it will end up appealing to no one. 

7. Revisit Drucker — What Gets Measured Gets Managed:

Measure compulsively, for as Peter Drucker stated: what gets measured gets managed.

Useful metrics to track, besides the usual operational stats, include CPO (“Cost-Per-Order,” which includes advertising, fulfillment and expected returns, chargebacks, and bad debt), ad allowable (the maximum you can spend on an advertisement and expect breakeven), MER (media efficiency ratio), and projected lifetime value (LV) given return rates and reorder %. Consider applying direct response advertising metrics to your business.

Look at "lean start-up" metrics for more methods of measuring during the start-up phase. The work of Eric Ries is a good starting place. 

8. Hyperactivity vs. Productivity — 80/20 and Pareto’s Law

Being busy is not the same as being productive. In fact, being busy is a form of laziness -- lazy thinking and indiscriminate action.

Forget about the start-up overwork ethic that people wear as a badge of honor–get analytical. I'm not going to say "work smarter; don't work harder," as I'm fine with hard work...but only as long as it's applied to the right things.

The 80/20 principle, also known as Pareto’s Law, dictates that 80% of your desired outcomes are the result of 20% of your activities or inputs. Once per week, stop putting out fires for an afternoon and run the numbers to ensure you’re placing effort in high-yield areas:

What 20% of customers/products/regions are producing 80% or more of the profit? What are the factors that could account for this?

Invest in duplicating your few strong areas instead of fixing all of your weaknesses. 

9. The Customer is Not Always Right — “Fire” High-Maintenance Customers

Not all customers are created equal.

Apply the 80/20 principle to time consumption: What 20% of people are consuming 80% of your time? Put high-maintenance, low-profit customers on auto-pilot. Sure, process their orders, but don’t pursue them or check up on them. And “fire” high-maintenance, high-profit customers by sending a memo detailing how a change in business model requires new policies at your company: how often and how to communicate, standardized pricing and order process, etc.

Indicate that, for those clients whose needs are incompatible with these new policies, you are happy to introduce other providers.

“But what if my largest customer consumes all of my time?” you ask? Recognize that 1) without time, you cannot scale your company (and, oftentimes, life) beyond that customer, and 2) people, even good people, will unknowingly abuse your time to the extent that you let them.

Set good rules for all involved. Minimize back-and-forth and meaningless communication. 

10. Deadlines over Details – Test Reliability Before Capability

Skill is overrated.

Perfect products delivered past deadline kill companies. Better to have a good-enough product delivered on-time. Google "minimal viable product" for more on this philosophy. Even the great Reid Hoffman, co-founder of LinkedIn, has wisely said that, "If you are not embarrassed by the first version of your product, you've launched too late."

Test someone’s ability to deliver on a specific and tight deadline before hiring them based on a dazzling portfolio.

Products can be fixed as long as you have cash-flow, and bugs are forgiven, but missing deadlines is often fatal. Calvin Coolidge once said that nothing is more common than unsuccessful men with talent; I would add that the second most common is smart people who think their IQ or resume justifies delivering late. Don't tolerate it. 

11. Keep it simple. Complicated answers are rarely the right answers.
'Nuff said.

Tim Ferriss

The future of productivity 2014 - Smart exporting for Canadian companies

Exporting drives competitiveness and productivity
Canada suffers from a stubborn lack of productivity growth, threatening our standard of living. Exporting is one of the keys to solving Canada’s productivity problem.

Research and previous reports by Deloitte clearly show a link between productivity and export activity, but fewer than 4% of Canadian companies export. Worse, despite clear advantages for companies who turn their attention beyond our borders, export activity by Canadian companies is slowing down.

Trade secret: Companies that export reduce their risk of failure
Exporters grow faster and become more productive. More surprising is that exporting lowers overall business risk. By diversifying their geographic exposure, exporters experience more stability and lower risk of market failure — even if foreign markets are more volatile than the domestic market.

With less exposure and sensitivity to risk, Canadian exporters invest more in innovation, driving their competitiveness.

Smart exporting
Deloitte has distilled insights from 46 experienced exporters into a three-stage journey toward “smart exporting,” captured in a new report, The future of productivity: Smart exporting for Canadian companies.

Stage 1: Think like an exporter

• Prospective exporters need to adopt a global mindset. They should reflect on what makes their business world-class as they explore foreign markets and seek out experienced exporters for mentorship and market insights.
• Assumptions can be dangerous. Some 70% of new Canadian exporters begin in the U.S. market — one of the world’s most mature and competitive. With emerging markets offering attractive opportunities, companies should carefully evaluate whether the U.S.-first option is for them.

Stage 2: Become an exporter

• Canadian companies should boldly promote themselves abroad, localize their efforts and manage risk through staggered growth and risk sharing.
• The most successful exporters transform themselves into local players.

Stage 3: Win as an exporter

• Exporters can re-invent themselves by absorbing new technologies and business practices. They benefit even more through opportunities to collaborate with foreign partners to innovate and build scale.

Exporting can help our companies and our country raise productivity and become more competitive. It’s time for Canadian business leaders to step boldly and decisively onto the global stage.

To navigate the path to smart exporting, read The future of productivity: Smart exporting for Canadian companies. 

                           “PRODUCTIVITY AND COMPETITIVENESS”
                                           Emphasis on SME Sector
       (from presentation by Richard Peters to Seneca School of International Business)

• SMEs have been more successful than larger firms at taking advantage of growing opportunities in global markets.

• SMEs account for significant proportion of Canada’s exports to markets beyond the US and the EU. SMEs account for high proportion of Canadian exports in many large growing markets, such as South Korea (52.8 %); India (65.1%); Indonesia (44%); Turkey (60.6%); Egypt (63.3%).

• 41,710 SMEs export and represent 87.5% of all Canadian exporters and account for 44.8% of the value of Canada’s exports.

• Exporting firms have higher productivity levels than non-exporting firms.

• Exporting does not appear to lead to improved productivity, but more productive firms make more successful exporters.

Big Data: The organizational challenge

Samsung uses it to power the content recommendation engine on its newest smart TVs. Progressive Insurance relies on it to capture driving behavior, determine customer risk profiles and decide on competitive pricing. LexisNexis Risk Solutions uses it to identify individuals, including family relationships, thus helping financial institutions and other clients reduce fraud. 

It, of course, is Big Data—the mining and processing of petabytes’ worth of information to gain insights into customer behavior, supply chain efficiency and many other aspects of business performance. We say of course, because Big Data is hard to miss these days. Industry analysts and media observers hype it as the next big thing for every enterprise, and many companies have been rushing to climb on board. But is building an advanced analytics capability really worth the investment? Until now, data to answer that question has been scarce.

A recent Bain & Company study, however, should put the question to rest. Early adopters of Big Data analytics have gained a significant lead over the rest of the corporate world. Examining more than 400 large companies, we found that those with the most advanced analytics capabilities are outperforming competitors by wide margins (see Figure 1). The leaders are:

• Twice as likely to be in the top quartile of financial performance within their industries
• Five times as likely to make decisions much faster than market peers
• Three times as likely to execute decisions as intended
• Twice as likely to use data very frequently when making decisions

---

This helps to explain why so many companies are now asking where they stand on Big Data vis-à-vis their rivals— and whether they’re missing out on a new and essential competitive tool.

To get in the Big Data game, a company needs three kinds of table stakes. The first is the data itself: large quantities of information in a format allowing for easy access and analysis. Most large companies already have this—in fact, they generally have more than they can use. The second is advanced analytical tools, such as Hadoop and NoSQL. Both proprietary and open-source tools and platforms are widely available these days— all you need are people capable of putting them to work. That brings us to the third, and usually the most challenging, set of table stakes: expertise. Advanced analytics requires staff with state-of-the-art skills in everything from data science to worldwide privacy laws, along with an understanding of the business and the relevant sources of value.

But table stakes alone won’t help you win, because Big Data isn’t just one more technology initiative. In fact, it isn’t a technology initiative at all; it’s a business program that requires technical savvy. So you can’t just add more capacity and expertise, and expect your IT or marketing functions to begin generating data-based insights. Even if they did, the rest of the company would be unlikely to act on those insights.

As the analytics leaders have discovered, succeeding with Big Data requires a different approach: You need to embed Big Data deeply into your organization. It’s the only way to ensure that information and insights are shared across business units and functions. This also guarantees the entire company recognizes the synergies and scale benefits that a well-conceived analytics capability can provide.

Let’s look at what’s involved.

Ambition
Leading companies begin the embedding process by spelling out their ambition. We will embrace Big Data as a new way of doing business. We will incorporate advanced analytics and insights as key elements of all critical decisions. A declaration like this from the senior leadership team is an essential precondition for the kind of behavior change this article will discuss. But the senior team must also answer the question: To what end? How is Big Data going to improve our performance as a business? What will the company focus on?

There are four areas where analytics can be relevant: improving existing products and services, improving internal processes, building new product or service offerings, and transforming business models. These objectives often overlap. Progressive’s new “Snapshot” device, which monitors driving behavior, helps the company determine whether a given driver is the right customer for the company. Intuit’s acquisition of Mint.com has helped expand its business beyond purchased software to ad-supported software. Humana, the insurance provider, is using Big Data to transform its business: Using claims data, the company can determine who is likely to end up in a hospital for preventable reasons and then intervene early. Humana and other health insurance carriers are also mining data to help improve patient outcomes and to reward healthy behaviors.

Most companies are opportunity-rich when it comes to analytics, and large enterprises can pursue multiple avenues, either simultaneously or sequentially. Still, nearly every company can improve its trajectory by determining priorities and picking the right angle of entry.

Horizontal analytics capability
With ambition defined, Big Data leaders work on developing a horizontal analytics capability. They learn how to overcome internal resistance, and create both the will and the skill to use data throughout the organization.

This is a big job. Organizations don’t change easily and the value of analytics may not be apparent to everyone, so senior leaders may have to make the case for Big Data in one venue after another. They may need to help people change their everyday behaviors and then continue along the new path without backsliding. As with any major initiative, executives and managers have a variety of tools at their disposal. Leading companies typically define clear owners and sponsors for analytics initiatives. They provide incentives for analytics-driven behavior, thereby ensuring that data is incorporated into processes for making key decisions. They create targets for operational or financial improvements. They work hard to trace the causal impact of Big Data on the achievement of these targets.

For example, Nordstrom elevated responsibility for analytics to a higher management level in its organization, pushed to make analytical tools and insights more widely available and embedded analytics-driven goals into its most important strategic initiatives. Another global consumer electronics company selected high-impact analytics projects for additional support, creating positive business results stories and additional demand for Big Data solutions. The company added incentives for senior executives to tap Big Data capabilities, and the firm’s leadership has reinforced this approach with a steady drumbeat of references to the importance of analytics in delivering business results.

An organizational home
The Big Data leaders then create an organizational home for their advanced analytics capability, often a Center of Excellence (CoE) overseen by a chief analytics officer.
Creating an organizational home involves several key design decisions. A company has to set its strategy for Big Data deployment. It has to assign collection and ownership of data across business functions, plan how to generate insights, and prioritize opportunities and allocation of data scientists’ time. It must host and maintain the technological infrastructure, set privacy policy and access rights, and determine accountability for compliance with local laws and data security. All of that is a tall order. To get it done, companies typically pursue one of four models:

• Business unit led. When business units have distinct data sets and scale isn’t an issue, each business unit can make its own Big Data decisions with limited coordination. AT&T and Zynga are among the companies that rely on this model.
• Business unit led with central support. Business units make their own decisions but collaborate on selected initiatives. Google and Progressive are examples of this approach.
• Center of Excellence. An independent center oversees the company’s Big Data. Units pursue initiatives under the CoE’s guidance and coordination. Amazon and LinkedIn rely on CoEs.
• Fully centralized. The corporate center takes direct responsibility for identifying and prioritizing initiatives. Netflix is an example of a company that pursues this route.

Note that in none of these models does IT own Big Data. While IT often plays a critical role in providing and maintaining the infrastructure and tools required to run Big Data analytics, most companies find that it’s a mistake to have IT own or manage the business adoption capability.

A company’s choice of model obviously depends on its ambition and its existing operating model. For example, companies with deep analytics capabilities and an emphasis on experimentation and innovation, such as Google and Progressive, can rely on a generally decentralized approach. But many analytics leaders have found that a CoE has the most advantages and the fewest limitations (see Figure 2). A well-functioning CoE enables cross-business-unit access and sharing of data. It takes responsibility for supporting and coordinating every initiative from a business unit, thus providing synergies and scale benefits. On the corporate level, the CoE serves as the go-to organization for analytics strategy and insight support. It sets the road map, and it establishes and maintains privacy policies. A leading European telecommunications company, for example, is in the process of deploying Big Data for a range of purposes, including analyzing customer data to provide better offers and services, and using network trsffic data to optimize network management and investments. It will house these capabilities in a variety of settings, but all will be coordinated by a CoE.

---

Building a solid CoE from scratch can take time. The center needs experienced leadership and a clear plan for staying connected to the business. It should have a strategy designed to ensure continuous learning, so that it maintains state-of-the-art capabilities. Staffing can be a particular challenge. A CoE requires not only skilled PhD-level data scientists, but also analytics engineers, business managers to identify and prioritize opportunities, and legal talent for advice on standards for data privacy and security. Finding team leaders and identifying partners to fill out the center’s staffing may take between six and 12 months, with scaling up requiring another 12 to 18 months.

Getting started
Many companies are already dipping their toes into Big Data waters. But given the complexities we have discussed—in particular the need to anchor analytics capabilities in the organization—toe-dipping isn’t likely to produce significant insights. That’s why only a select few, so far, have made substantial progress. Right now, many of these leaders are pulling even farther ahead of competitors, so others are playing the necessary game of catch-up.

But it isn’t too late. A good first step is to benchmark your industry and determine your company’s current position in Big Data analytics and capabilities, compared with that of your chief rivals. This exercise will help you determine the investment necessary to improve your relative position. If you are significantly behind the competition, you will have the kind of burning platform that is often required to create and sustain change. You can then begin experimenting, testing hypotheses to learn where and how advanced analytics is most likely to help your business. This type of review will help you determine your Big Data ambition, embed a culture of analytics and decide where Big Data’s organizational home should be.

Travis Pearson is a partner with Bain & Company and based in the firm’s San Francisco office. Rasmus Wegener is a Bain partner based in Atlanta.

Learning from the Mistakes of Downsizing

From: Conscious Capitalism by David A. Schwerin

Butterworth-Heinemann, 1998

Copyright © 1998 by D J Investment Advisors, Inc.

Observers of the business scene are well aware that all companies face intense global competition and, as a result, are forced to become more cost- and productivity-conscious. Businesses worldwide are anxious to speed the transition from human workers to less costly forms of artificial intelligence such as robots and computers. Smart machines and networks linking computing and communications are putting a wide array of occupations at risk. From clerks and unskilled laborers to engineers and bank tellers, few workers are likely to be spared.

While the transition from people to machines has been going on for several decades, it is only recently that technology has enabled corporations to eliminate layers of middle management, compress job categories, streamline administrative functions and shorten and simplify production and distribution processes. Downsizing and restructuring, with their unpredictable and seemingly capricious layoffs and forced retirements, have resulted in a workplace where worker loyalty and motivation are understandably shaken. Such a volatile climate has generated a high degree of counterproductive stress and resentment.

More progressive managements have tried to counteract this situation by introducing a number of nontraditional perquisites such as time off for employees to care for parents and greater latitude and benefits for those needing to work from home and/or on a part-time basis. They have also begun to delegate greater authority to all levels of the organization. Nonetheless, the reality is that a significant number of people have been unwittingly left with time on their hands. Some predict that corporate re-engineering could eliminate over one million jobs a year for the foreseeable future. [Note] In fact, a growing number of businesses are expressing concern about the future consequences of the high-tech revolution.

Service jobs provide most of the employment opportunities in a mature economy. Since new information networks enable companies to reduce service employment, the consensus view that technology will create more jobs than it destroys is thrown into a state of confusion. Many economists believe that the adverse effects of automation are transitory, but a growing number of forecasters think the current wave of technological change differs from previous ones in several respects. First, no other industrial revolution has been able to affect so many unrelated industries or skill levels. Second, the power of the technology is increasing at an almost exponential rate. The price/performance ratio of computers and related equipment (the combination of prices declining and performance improving) increases at a startling pace, doubling about every eighteen months. [Note] This allows even more industries to participate in the technological revolution which, in turn, puts more jobs in jeopardy.

Surveys show that, when corporations do restructure, management often insists that output remain constant, or even increase, despite fewer workers. In addition, there is frequently a failure to delegate sufficient authority to lower-level employees whose responsibilities have increased due to the contraction of management levels above them. Morale amongst the remaining employees falls leading to increased turnover and, ultimately, lower productivity. Thus, the hoped-for benefits of restructuring may not materialize. In fact, the American Management Association found . . . that fewer than half the companies undergoing downsizing were actually able to increase their operating profits.

When corporate layoffs and restructurings are implemented with deliberation and compassion they will not only increase productivity but win the indispensable support of the surrounding community.

9 Things Millennials Can Teach the Rest of Us About Engagement

Search the Internet and you find a ton of theories on how to engage Millennials at work. Fair enough given those born between 1980 and 1999 are tomorrow’s leaders, if they aren’t there already. Yet most research suggests longer tenured employees are the bigger engagement challenge. So why aren’t we asking Millennials to help engage the rest of us versus the other way around?

Millennial stereotypes abound -- lazy, unfocused, entitled, disloyal.... And the reasons range from over-indulgent parenting to advances in technology or, more recently, the massive blow to trust in corporations. However my experience, observing from the cusp of the Boomer and X generations, has been very different.

First off, much of what Millennials want, even expect, from employment is not unique to their generation. “Boomers and Gen X’ers want more leadership, more involvement and ultimately more balance too,” says Youthful Cities co-founder Robert Barnard. “Millennials are just able to scream that much louder!”

The combined voice of Millennials merits a good listen, not just because of its volume but because it makes good sense. Based on many discussions here at Edelman and at other organisations, following are a few tips Millennials might suggest about engagement if given the chance:

1. Frequent, instant recognition. Young employees are not far from their school years where they received consistent, measurable and peer comparable feedback almost weekly from the age of six. Also conditioned by gaming, Millennials have been accustomed to instant, albeit virtual, rewards for achieving new levels of competence. Applied in the workplace, we could all benefit from immediate and specific feedback rather than waiting for the annual or semi-annual review.
2. More productive use of time. I’ve always found Millennials are willing to put in the hours. But they’re not interested in just appearing to be busy. In charge, they'd likely schedule fewer and shorter meetings or conference calls but with focused agendas and action logs. And when our work is done, they’d encourage us to leave and enjoy the rest of their life, always remaining connected if necessary. Better use of time could make us more productive, and frankly more interesting, when we’re at work. Shouldn’t that be a goal for all of us?
3. Short term performance management. Among the stereotypes I see reinforced every day is that Millennials don’t have much patience for long-term promises. Based on seeing their parents often toil for many years with one company only to have the rug pulled out due to the financial crisis or the latest recession, can we blame them? Long-term incentive programs and 10-year career-path trajectories don’t hold much interest. What they do tend to embrace are clear, measurable objectives that are regularly reviewed and challenging short-term assignments, at home or abroad. With rapid change requiring companies to be agile, employees’ ability to be so nimble will be a big advantage.
4. More collaboration. Millennials tend to be very comfortable working in teams. They want to be involved and ultimately share their experiences as widely as possible. For organizations that value teamwork and seek to instill a spirit of advocacy for their brands, Millennials can show the rest of us how to do it.
5. A more explicit employee deal. Full transparency around the expectations between employer and employee has probably always been an engagement driver. If Millennials take it further and shout for a more explicit “employee deal,” that’s a good thing according to Andy Brown, CEO of the UK-based Engage. “Increasingly, organizations are putting in place explicit sets of “terms” that outline what the employer expects from employees in terms of behaviours, effort and delivery. And they also spell out what employees can expect back in terms of development, opportunity, culture and rewards.
6. Meritocracy. Yes, the opposite of entitlement. Millennials consistently hate “waiting their turn” to give input and will run from a traditional, tenure-based workplace hierarchy. By evolving in this regard, organizations surely benefit from environments in which rewards are earned versus entitled.
7. More fun. To truly enjoy their work, Millennials will tell you they need to enjoy their workplace. Open, engaging environments promote inspiration, innovation and collegiality. And friends at the office are the norm versus the exception, making work and life seamless. I recently enjoyed reading HR Magazine's interview with tech firm FNZ’s HR director Daniel Kasmir, who describes the company’s Edinburgh location, complete with a four-pod think tank, kitchen meeting area with pool table and large graffiti wall. If we create a workplace that promotes fun, Millennials are more likely to stick around. As for the balance of us, we just need to lighten up and join in.
8. More purpose. Millennials will consistently tell you they want to work for a company that makes a positive difference. Do they want to have their cake and it eat it too? Perhaps. And why not? Today’s young adults have often had experience of contributing their time and reasonably expect their employer to generate more than a profit as well. Articulating a clear purpose, or "North Star," and actively involving employees in corporate social responsibility programs will reap big dividends.
9. Tailored engagement action plans. While there are many common denominators for engagement across the generations, it’s also true that we value different things as we journey through life’s stages. I think Millennials would advise us to segment our engagement actions and avoid using a “single hammer” to address engagement across everyone as if we were one homogenous mass.

I'd love to see this list extended with more suggestions, but the point is clear. Rather than constantly trying to figure out how to engage Millennials, we can seek their help to engage us. It could be the key to improving the terrible math I referred to in my blog a few weeks ago. Finding the answers will only become more important as retirement ages get pushed back and three or even four generations work side by side in the companies of the future.

Nigel Miller is co-chair Europe CIS Employee Engagement & global director Talent 

Engagement, Edelman.Posted by:Nigel Miller