Welcome to MANAGE Magazine!


February 1998 issue


Contents

Chairman's Message

The Blanchard Management Report
by Dr. Ken Blanchard

Money Sense by Mitchell Farkas

Rewarding Employees by Bob Nelson

Improving Performance by Mark W. Morgan

"In the Face of the Plainest Warnings" by Ronald A. Norelli

Biometrics by F. J. Bud Purcell

Not Ideal But Workable by Mary Ruth Austin

1998 NMA Directory

1998 Board of Directors
NMA Councils
NMA Staff--Headquarters/Field Operations
Chapters

 


Chairman's Message

(back to Contents)

smelly2.jpg (5131 bytes)NMA--WHAT'S IN IT FOR ME?

NMA will soon celebrate its 75th birthday at our October 2000 National Conference in Fort Worth, Texas.  This site was selected to honor our Association's oldest chapter, (58-year NMA affiliation), Lockheed Martin Tactical Aircraft Systems.  The Dallas-Fort worth area is also home to one of NMA's fastest growing councils, The North Texas Council, with eight member chapters.  The council will host the annual Conference and big birthday celebration.

Since 1925, NMA has been a valuable resource for leadership development to sponsoring companies like LMTAS and over 140 affiliated chapters across the nation.  As we begin a new administrative year, our Association is working hard to ensure we remain the "resource of choice" for leadership development training and networking opportunities.

Our 1998 Leadership Team and NMA Bard of Directors are currently implementing a marketing plan and recently completed a strategic plan to "keep us on track" as we set short term/long term objectives.  Additionally, these planning efforts will help NMA to better define and answer our Association's most asked question, "What's in it for me?"

As many companies continue to merte, right size, and reengineer their organizations, NMA is taking on an additional and very important role as a change agent.  Some company training budgets continue to shrink and NMA is being asked to offer training courses that were previously offered to employees through their department training budgets.  Also, many chapters serve as a vehicle to help employee obtain training as part of their company developed Employee Learning Plans.

The NMA chapter, in its role as a change agent, offers companies the opportunity to use the chapter structure and programs for information flow down.  If the chapter goals and objectives are closely aligned with company goals, then NMA, in its role as a change agent, benefits the employee, the chapter, and the company.

Recognition of personal and professional achievement is also a key benefit of NMA.   Although obtaiing awards is usually not the primary objective of most chapters, NMA promotes formal recognition of individual and group achievement.  Our popular awards program and user friendly point system is specifically designed to recognize member/chapter achievements and not penalize chapters for any shortcomings.

NMA's 140 plus chapters, large and small, make up our great organization.   Annually, these organizations send representatives to regional and national conferences for officer training, leadership seminars, and awards programs.  Most participants come away with value-added information and a better understanding and appreciation of what is in it for them.  Understanding the rapidly changing needs of these members, their NMA chapters and sponsoring organizations is extremely important to NMA's continued success.

As a personal testimony, I became an NMA member and joined my local chapter in July 1978 because I believed NMA offered something for me both personalloy and professionally.   My job was very enjoyable and challengng, but I knew I needed to improve my communication and interpersonal skills to better relate and contribute as a member of my work group.  I also saw networking opportunities and personal development benefits that I felt would help me gain confidence in my abilities and achieve personal short and long term goals.

NMA and my local chapter gave me that opportunity to expand my abilities, once I made the decision to participate.  My management was very supportive of my enrollment in some NMA classes because they perceived my participation as a win-win for the company and the employee.

For twenty years, I have considered it a privilege to be a member of NMA and our Fort Worth Chapter.  I owe a debt of gratitude to both my company and my chapter for leadership training, networking opportunities that have heoped me make long term friendships and for recognition of my achievemets.  Through it all, I remain eager to see companies and chapters team together to achieve their objectives.  I also feel I am better prepared to help answer that very important question of "What is in it for me? As famed inventor and NMA founder, Charles F. Kettering, once said, "The opportunities through NMA are unlimited.  One need only to participate."

W. J. "Bill" Smelley, III, CM
1998 Chairman of the Board


Rewarding Employees
Safety Incentives can be fun, simple
by Bob Nelson
(back to Contents)

Here is an idea that has had much success in recognizing safety in operations of all types. Safety Bucks is a simple employee recognition tool, developed by Bill Sims, Jr., at the Bill Sims Company, Columbia, SC.

In the program, employees receive scratchoff Safety Bucks for meeting goals set for them, including attending safety meetings, making suggestions, working safely for a month as an individual or as a team. Employees scratch off their Bucks to reveal prize amounts of $20, $50, or $100. Even a non-winning coupon is worth $1 in credit toward the purchase of select merchandise.

"The sense of excitement this program creates is really contagious," says Sims, "because employees see their co-workers earning 50 or 100 Star Bucks and they know they might be next to win." Since every Star Buck is always worth at least one dollar, no one is de-motivated by getting a loser.

Employees save their Bucks similar to Greenstamps and order from a vast catalog offering thousands of gift options. Items in the catalog all bear a company Excellence logo and can be further customized for each company. The available items can also be expanded to include CD players, TV’s, and VCR’s and other specialty products.

Sims initially started working with one company using cash as a motivational tool. Their $20,000 budget only put $11,000 in the pockets of their employees after taxes. And, eight out of ten employees who received cash couldn’t remember when they got it last and weren’t sure what it was for. In a revamp of their program, the entire $20,000 investment was able to be awarded tax free to their employees through Safety Bucks.

Unlike cash and store certificates, where you can lose half of every incentive dollar to taxes, this program can be set up as tax free, delivering more, well..bang for your buck.

One General Motors manager remarked, "I like the Bucks program because this gives a middle manager an opportunity to tell someone they did something right. Usually, managers only interact with people when they’ve done something wrong."

Sims agrees, and says many clients will give 10 Star Bucks to each manager on one day of the month and ask them to go find 10 people doing something right and hand out the bucks. "Just having something to hand their employees helps these managers get over the hump and go out and recognize important behaviors," says Sims. He adds that the most important ingredient is a warm smile, and a positive attitude of praise from the manager. The context of the award gives it far more value than it would otherwise have without a personal touch.

How well do Safety Bucks pay off? "Employees who aren’t involved in a safety program are at risk of sooner or later becoming an expensive injury and lawsuit, or worse, a fatality," says Sims. Other examples of successful safety programs include:

  • Heartland Foods in Marshall, MN was experiencing 285 lost-time injuries every year doing turkey processing with workers from Somalia, many speaking no English. In just one year with the program, lost-time injuries were cut to 14. According to National Safety Council statistics, each lost-time injury costs an average of $27,000. Total direct and indirect savings were estimated at $7,317,000 based on a budget of only $25,000 per year.
  • Dorsey Trailers attributes a 70% reduction in absenteeism and over a half million dollars in savings to their Safety Buck Program.

The Safety Bucks has been so successful that many clients are renaming it Star Bucks and expanding it to address all types of performance, including suggestions, customer service, cost cutting ideas, health and wellness, and more. Many of Sims clients are finding their own new and unique ways to reward and recognize employee achievements using Star Bucks. For example:

  • Southern Carolina Electric & Gas received only three Bright Ideas per year from 1,000 employees. Rewarding those ideas with Star Bucks stimulated 137 ideas in just 9 months, with one idea saving $30,000.
  • W.R. Grace estimates annual savings on its recognition program at over $150,000 per year, at a site where 55 employees are involved.

Again, the Safety Buck program proves that it’s the simplest programs that can have the biggest impact when it comes to recognizing employee performance.

"I like the Bucks program because this gives a middle manager an opportunity to tell someone they did something right.  Usually, managers only interact with people they they've done something wrong."

For more information about Star Bucks, call Bill Sims, Jr. at 1-800-690-1860 or e-mail at bsljr@aol.com

Wesite: www.safetyonline.net/billsims

Bob Nelson is vice president of Blanchard Training and Development, Inc., located in San Diego, CA (1-800-728-6000), and author of the best-selling book, 1001 Ways to Reward Employees (Workman Publishing) — now in its 17th printing. His latest book, Managing For Dummies (IDG Books Worldwide) is now available in bookstores everywhere.

E-mail: BobRewards@aol.com


Money Sense
by Mitchell Farkas of Merrill Lynch
(back to Contents)

The Middle Years: Financial Planning in your 40s and 50s

As you enter middle age, you will find many of your longer-term financial goals approaching, sometimes many at the same time. You may have upgraded to a larger home, your children may be starting college, and your elderly parents may begin to need your care. Your own retirement is starting to become a closer reality.

Investing during this time should balance your needs for growth and current income. How aggressive your investing strategies will be during your middle years frequently depends on how well you saved and invested in your early years. Unfortunately, many people spend their middle years trying to make up for a lack of planning and a late start.

How aggressive your investing strategies will be during your middle years depends on how well you saved and invested in your early years.

Even if your situation requires a more aggressive approach, you don’t want to put all your principal at risk. Some of your savings should be shifted toward income investments like government and corporate bonds or bond funds, and cash equivalents like Treasury bills or money-market funds. You can lessen risk by diversifying your portfolio to contain a mix of stocks, bonds and cash equivalents. The right mix for you depends on your individual tolerance for risk, how much you have saved and your age.

College Tuition Comes Due

By now, your children are probably approaching college age. Even if you’ve saved regularly, and especially if you haven’t, your college fund may not quite meet the demands of your child’s education requirements. Now is the time to investigate the opportunities for financial aid, which are more broadly available than most people realize.

Your first stop should be the office of a guidance counselor at your child’s high school to pick up the government’s financial aid application form. Mail it as soon after January 1 as you can in your child’s senior year. To speed the process, complete your tax return for the year before you fill in the form. When you and your children fill out the form, be sure to check the box to apply for a Pell grant. This is federal grant money based on your income level that you don’t have to pay back. Apply for it even if you believe you don’t qualify; it’s necessary for getting a government-subsidized student loan or a college grant.

Even if your child does not qualify for financial aid, there are other borrowing options. You may be able to borrow from your company’s profit-sharing or 401(k) plan. A home-equity loan can offer tax-deductible financing for most homeowners. You may also be able to borrow from the cash value of a life insurance policy or borrow against your securities. Be sure to consider the consequences: Will you be sacrificing needed retirement funds or your family’s security? If you have plenty saved, these borrowing options can be attractive because their interest rates compare favorably to other types of loans, but if you’re behind in retirement saving, they may not be the best long-term options for you.

Caring for elderly parents

Between the ages of 40 and 60, people often find themselves part of the sandwich generation, caring for their aging parents while still supporting growing children. The National Alliance for Caregiving in Bethesda, Maryland, says 22.4 million households are caring for parents or other elderly relatives. The financial consequences of assuming this role can be devastating if you’re not prepared.

While your parents are still healthy, talk to them about any special insurance or savings they may have in the event they become physically or mentally incapacitated. Long-term care — either care at home or in a a nursing home — can be very expensive. A year in a nursing home cost an average of $38,000 in 1993, and two hours of home health care three times a week cost about $12,300 that year, the American Health Care Association found. These costs generally are not covered by Medicare. If your parents need but cannot afford care, you may find yourself making up the difference or caring for your parents yourself.

You can purchase long-term care insurance for your parents, or save money on your own for that purpose. If your parents do end up needing care and you have no funds or insurance, you may be able to borrow from your 401(k) plan, but be sure to consider whether you will be cutting your own retirement prospects short as a result.

Between the ages of 40 and 60, people often find themselves part of the sandwich generation, caring for their aging parents while still supporting growing children.

If you do take on the role as a parent’s main caregiver, you may be able to claim your parent as a dependent and save on your income taxes. Check with your tax advisor to see if your situation qualifies for this exemption.

Planning for retirement

Tuition costs and elder care may be on your plate, but if you can help it, don’t make the mistake of meeting these responsibilities at the expense of your own retirement. Always pay yourself first by continuing to contribute to your employer’s 401(k) program or other retirement plan, or to an Individual Retirement Account.

Keep in mind that up to $2,000 of compensation a year can be set aside in an IRA, for both wage-earners and non-earning spouses. The contributions may be tax-deductible depending on your income and eligibility for participation in an employer-sponsored plan. Take advantage of it. Earnings accumulate tax-free until you take distributions, and you reduce your current taxes by $560 for each deductible annual $2,000 contribution, assuming you’re in the 28 percent tax bracket.

If you’re contributing all you can to employer plans and IRAs, consider variable annuities, which allow you to accumulate earnings on a tax-deferred basis. Unlike 401(k) plans and IRAs, annuities have no limit on the amount you can invest, and they provide a guarantee of principal to your heirs. Any growth on assets is deferred, and you earn a rate of return that varies depending on how the underlying investments perform. When it comes time to take income, you can structure payments from a variety of options, including one that cannot be outlived.

As a general guideline, it is recommended that you plan to replace 80 percent of your income in retirement, adjusted for inflation. That’s no easy task. Although you may be shifting some investments into conservative instruments to meet current needs, you probably will want retirement accounts to remain partially invested in stocks, especially early in your middle years.

Protecting your assets

At this point, you may have built up significant equity in your home, amassed a sizeable retirement nest egg, and accumulated valuable items, such as jewelry or cars. Don’t let a lawsuit, sickness or injury put your hard-earned assets and future security at risk.

Your middle years are a good time to reevaluate your goals, both current and long-term.

Review your disability coverage, homeowner’s insurance and health care insurance. And consider an umbrella liability insurance policy, which supplements the liability coverage of your homeowner’s and automobile insurance policies. The premiums of these policies are surprisingly inexpensive in light of the extra protection they provide.

Writing a will

Now is the time to write a will, if you haven’t already. The distribution of some assets, such as jointly held property, life insurance policies, retirement plans and IRAs, are controlled by survivorship provisions and beneficiary designations. A will allows you to distribute all other assets not controlled by these means. In a will, you may also nominate someone as guardian of your minor children.

Be sure to consult an attorney or financial advisor to help you set up your will in a way that will reduce estate taxes, avoid probate expenses and sidestep mistakes. A poorly drafted will can encumber the process of probate, the court-supervised transfer of ownership to your heirs. It could also increase costs to your estate and lessen the chance that your wishes will be followed.

Update your will as your life and financial circumstances change, perhaps when you are married or divorced, when children are born, when you start a business or your financial picture changes substantially. Nominate the executor who will handle probate proceedings and distribute your assets. Also grant a durable power of attorney to someone who will handle your financial affairs on your behalf if you are unable to and a health care proxy so the person you desire can make health care decisions for you if you cannot.

Seek professional assistance

Your middle years are a good time to reevaluate your goals, both current and long-term. Consult your financial consultant to help you refocus your savings habits, if necessary, and adjust your investment portfolio to give you the best opportunity to meet your short-term goals and stay on track to meet long-term objectives.

Mitchell Farkas is First Vice President and Director, Financial Planning Group, for Merrill Lynch’s Private Client Group.


Improving Business Performance:
Are you measuring up?

by Mark W. Morgan
(back to Contents)

It’s been said there are three types of companies: Those that know they are winning; those that know they are losing; those that don’t know the score. World class competitors know the score and use measurements to drive improvements in business performance. Y.K. Shetty, in the Advanced Management Journal from Spring 1993, determined that companies with effective measurement systems have higher average market share, enhanced product reliability, shorter order processing times, and fewer customer complaints than companies with poor measurement systems. Those are good reasons for us to examine best practices in measurements from four angles: Determining What to Measure; Using Measures; Creating Measures, and Relating Measures.

 

Determining what to measure

Measures vary according to your business, services, and customers. You can determine what to measure by asking, "What do I need to know to continually improve and remain competitive?" Typically, the answer reveals that financial measures alone are inadequate.

 

The Balanced Scorecard

Many managers are realizing that traditional methods of monitoring financial measures limit their visibility. Some equate it to "driving down the road using only your rearview mirror". Many businesses are developing a "Balanced Scorecard", integrating measures from finance, operations, customer satisfaction, and employee satisfaction to track overall performance. The Balanced Scorecard allows the company to react to undesired trends more quickly and avoid problems. For example, Motorola has achieved remarkable levels of performance (and a National Quality Award) by using a consistent scorecard across company elements which track defects/unit, cost of quality, quality delivered to the customer, and employee satisfaction. A team from Quantum Corporation refined its scorecard and, with improved visibility on cycle time, product quality, and team productivity, trimmed 33% off the cycle time needed to produce disk drives.

 

Characteristics of Good Measurements

As you determine what to measure, keep in mind the following characteristics. Good measures are:

Clear and understandable: Each measure is interpreted the same way by everyone who uses the system.

Timely: Data is provided when needed for decisions and action.

Credible: Reported values are believable and verifiable.

Economical to Maintain: The measures are easy to obtain, process, and display.

Related to a Standard: Each measure has a meaningful standard to allow comparison to industry averages and world-class levels of performance.

 

Using Measures

The key to successful measurement systems goes beyond tracking indicators; the information must be used to improve performance. Japanese quality authority K. Ishikawa said, "The purpose of collecting data is not to put everything into neat figures, but to provide a basis for action." There are three ways to act on metrics.

 

Provide feedback

The most obvious method is to share metrics data with the people performing the work. Ken Blanchard refers to feedback as the "breakfast of champions", because it often drives improvement activity. Chrysler used feedback in a minivan plant to realize a 40% gain in productivity and a 55% reduction in grievances.

 

Reward Performance

People respond to rewards when they are based on objective measures of performance. A study of 432 organizations by the Consortium of Alternative Reward Strategies confirmed that employees respond more favorably to reward systems that are well communicated, fair, consistent, timely, and based on measures.

 

Achieve Stretch Goals

Sharing measurement data and showing progress toward goals help companies achieve tough improvement targets. Hewlett Packard used performance standards and feedback to realize $800M in savings as the company reduced field defects by 80% and increased productivity by 15%.

 

Creating Measures

As you improve performance, you will realize the need to create new measures. Intellectual capital is being explored by many companies as a new measure for competitive advantage. Defined as the intangible assets of skill, knowledge, and information, intellectual capital is often worth 3 to 4 times the tangible book value of a company. Dow Chemical measures intellectual capital by the number of patents that are converted to marketable products. Within 18 months, Dow saved more than $1M by weeding out unmarketable patents and boosted revenues by creating new applications for key products. Measuring intellectual capital helped Skandia Assurance and Financial Services reduce administrative expenses by 75% while raising productivity by 400% over 6 years.

 

Relating Measures

Most managers intuitively know that customer satisfaction, employee satisfaction, and financial performance are related. Leading companies understand relationships between measures and know where to focus improvement efforts to yield desired results. Bank One of Columbus, Ohio, carefully monitors customer retention, the number of services used by each customer, and customer satisfaction. Realizing that customer loyalty is related to profitability, Bank One has focused efforts on customer retention, achieving a return on assets more than double that of competitors.

Even small differences yield big results. Xerox discovered that customers who rated Xerox a 5 on satisfaction were 6 times more likely to repurchase Xerox equipment than customers giving 4s. Taco Bell found a profit discriminator in best versus worst stores: employee turnover. Stores with the lowest turnover rates have sales 100% greater and profits 50% higher than stores in the top quartile of employee turnover.

Measurements are an important aspect of managing and improving business performance. Determining what to measure, using measurements wisely, creating measures as needed, and relating key measures add up to productivity and profitability. Most importantly, measurements help you understand the reality of current performance and get to the heart of business problems more quickly. Tom Peters summed it up well: "If you want to improve something, measure it."

...companies with effective measurement systems have higher average market hare, enhanced product reliability, shorter order processing times, and fewer customer complaints than companies with poor measurement systems.

 

Dr. Mark W. Morgan is a Senior Consultant with Richard Chang Associates, Inc., a diversified performance improvement training and publishing firm.

The
Blanchard
Management

Report
by Dr. Ken Blanchard
Team Accountability Needs to be Clear

(back to Contents)

I recently got a chance to spend a day and a half with a long-time, dear friend of mine, Bob Small. Bob has developed more 5-star operations than any other hotelier in the United States. When it comes to quality and service in the hospitality industry, he is a giant.

You get what you reward; behavior is controlled by its own consequences.

Bob is one of the few top managers who is both a great visionary and a great implementer. He always provides clear vision and direction for his organization, and then shouts that vision everywhere he goes.

The biggest relearning I got from Bob was the importance of team accountability. You get what you reward; behavior is controlled by its own consequences. If you want people to behave in a certain way and they do perform as desired, they need to be praised and rewarded. If they don’t perform as desired, they need to be either redirected or reprimanded. The importance of accountability can’t be understated.

Bob agrees. He doesn’t want to have to deal with a team. He wants one person to whom he can go to learn what is happening.

In some cases a team will come together with the obvious capacity to manage itself and be held accountable as a unit without a designated leader. In other instances, the team will be asked to pick an accountability person to provide clear answers and communication. When a self-directed team occurs it needs to be supported by management, but it also needs leaders who will take on necessary responsibility and be held accountable.

When I talk about team accountability, I expect team leaders to not only be accountable for results, but for building a high-performing team and for the functioning of that team.

In the process of holding leaders accountable, the teams will be held accountable too. In other words, it is not an option for team members to drag their feet and resist a leader’s efforts without doing everything possible to help that leader become an effective team leader.

We cannot accomplish what we want to accomplish in the future if we don’t help each other. Leaders, all by themselves, are vulnerable. We need both successful and effective leadership — leaders that not only get good results but live according to the values of the organization as they build a high-performing team.

The importance of accountability can't be understated.

We have to give up leader watching and evaluating. So often people sit around and evaluate, hold back or tear a leader down. I expect team members instead to roll up their sleeves and get involved. When everyone is involved and committed, shared leadership is created.

I also was reminded by Bob of the need for visionary leadership ("doing things right"). In the rapidly changing business environment we’re all living today, no one leader has all the skills or attributes necessary to run an operation all by him- or herself. Bob believes that leaders should gather a complimentary team around them to support their strengths and cover any of their weaknesses. Bob also believes in building a team of people who all share — and are committed to — the same vision for the future.

Anyone in a leadership position, whether they are appointed or emerge, must build a high-performing team around themselves. An effective high-performing team has high standards, mutual accountability and deep commitment to the task and each other. Teams must accomplish tasks to remain in existence, but they are built on a foundation of interdependence.

THE PERFORM MODEL

Seven Characteristics of High-Performing Teams

In The One Minute Manager Builds High-Performing Teams the authors present seven characteristics of the PERFORM model, which highlights desired behaviors of an effective team.

Purpose.

Members of high-performing teams share a sense of purpose. They are clear about what the team’s "work" is and why it is important. They can describe a picture of what the team intends to achieve. They have developed mutually agreed upon and challenging goals that clearly relate to the team’s vision. Strategies for achieving goals are clear. Each member understands his or her role in realizing the vision.

An effective high-performing team has high standards, mutual accountability, and deep commitment to the task and each other.

Empowerment.

Members are confident about the team’s ability to overcome obstacles and to realize its vision. A sense of mutual respect enables members to share responsibilities, help each other out, and take initiative to meet challenges. Policies, rules and team processes enable members to do their jobs easily. Members have opportunities to grow and learn new skills. There is a sense of personal as well as collective power.

Relationship and Communication.

The team is committed to open communication, and group members feel that they can state their opinions, thoughts and feelings without fear. Listening is considered as important as speaking. Differences of opinion and perspective are valued, and methods of managing conflict are understood. Through honest and caring feedback, members are aware of their strengths and weaknesses as team members. There is an atmosphere of trust and acceptance and a sense of community. Group cohesion is high.

Flexibility.

Group members are flexible and perform different task and maintenance functions as needed. Members share responsibility for team development and leadership. The strengths of each member are identified and used, and individual efforts are coordinated when necessary. The team is fluid and open to both opinions and feelings, hard work and fun. Members recognize the inevitability and desirability of change and adapt to changing conditions.

Optimal productivity.

High-performing teams produce significant results. There is a commitment to high standards and quality results. They get the job done, meet deadlines and achieve goals. The team has developed effective decision-making and problem-solving methods that result in achieving optimum results and encourage participation and creativity. Members have developed strong skills in group process as well as accomplishing tasks.

Recognition and appreciation.

Individual and team accomplishments are frequently recognized by the team leader — as well as team members — by celebrating milestones, accomplishments and events. Team accomplishments are valued by the larger organization. Members feel highly regarded within the team and experience a sense of personal accomplishment in relation to their team and task contributions.

When everyone is involved and committed, shared leadership is created.

Morale.

Members are enthusiastic about the team’s work, and each person feels pride in being a member of the team. Confident and committed, members are optimistic about the future. There is a sense of excitement about individual and team accomplishments as well as the way team members work together. Team spirit is high.

Copyright 1997 by Blanchard Management Report
Blanchard Training and Development, Inc.
Attn.: Bob Nelson, Publisher
125 State Place Escondido, CA 92029
Phone: 800-728-6000/x5201
Fax: 760/743-5030

Past articles, reprints, special topic requests, interviews and annual subscriptions are available.


"In the Face of the Plainest Warnings"
by Ronald A. Norelli
(back to Contents)

Unfortunately, strategies to "grow our way out" fail much more often th not, and yet are typically the only alternative considered by management mired in procrastination. Winston Churchill saw the warning signs that proceeded Germany's reoccupation of the Rhineland. "Owing to past neglect, in the face of the plainest warnings, we have now entered upon a period of danger greater than has befallen Britain since the U-boat campaign was crushed ... The era of procrastination, of half measures, of soothing and baffling expedients, of delays, is coming to a close. In its place we are entering a period of consequences...," Churchill said to the House of Commons in November of 1936.

Britain's procrastination could not be blamed on any lack of clear, timely data. Intelligence reports were available, comprehensive, accurate and known at the highest levels of government. Sadly, the same is true of many businesses headed for serious trouble. In fact, the symptoms are very recognizable and usually unmistakable.

Loss of market share without good reason.

Companies often become non-competitive when industry rules change, orders are lost due to high prices and attempts to enter new markets are futile. Unfortunately, profitability and cash flow can actually be increasing leading to a dangerously false sense of security and inaction.

The problem comes when the competitive gap continues to grow and managers implement "half measures and "soothing expedients" instead of addressing the real issues that are affecting their market share.

Sales growth without profit growth.

Whether because of price cutting or rising manufacturing and marketing costs, sales growth actually can make things worse when the added volume doesn't come close to earning the cost of the incremental capital required.

Unfortunately, strategies to "grow our way out" fail much more often than not, and yet are typically the only alternative considered by management mired in procrastination.

Steadily declining gross profit margins.

Gross margin is a critical measure of any company's competitiveness, indicating how products, quality, service, costs and marketing effectiveness stack-up to the competition. Small year-to-year declines can accumulate into something much more threatening. Businesses suffering larger declines, often respond by cutting marketing, product development or administrative costs rather than addressing the fundamental causes of serious erosion of competitiveness.

Declining asset productivity.

Declining asset productivity is one of the "plainest warnings" of all, but often goes completely unnoticed for long periods of time. Declining sales per dollar of investment brings a precipitous drop in return on investment. Businesses in a downward spiral do not earn their cost of capital and become no longer able to afford the investments needed to stay competitive. Consequences include deteriorating cash flow, rapidly rising debt and an eventual liquidity crisis.

The most obvious signs of companies in trouble are often clouded by sensitive issues such as failure to see dramatic changes in customers' perception of value to an aging chief executive or patriarch who will not facilitate the transition to a new generation. These issues must be identified and confronted as a part of a plan to bring an era of procrastination to a close.

Lack of accountability in the front office.

It is easy to blame the economy, competition, government, customers or even the weather when companies find themselves in danger of closing their doors. Procrastination can only be broken when management accepts responsibility for weak performance. This however, can be particularly difficult for companies that have been successful in the past.

Blindness, denial and resistance to change by management.

A company's physical envirornment may provide clues of organizational paralysis, but the best insight to this problem comes from the employees themselves. They usually see the true strengths and weaknesses of a company and are eager to discuss who is and who is not pulling their weight. Lack of a succession plan is also one of the primary causes for management stalemate.

Lack of respect for the financial function.

Procrastinating managers often do not listen to their chief financial officers and can even turn on them as the numbers deteriorate. Beware of CFO turnover; it usually means poor management is affecting the financial stewardship of the company.

In a more perfect world, eras of procrastination would rarely, if ever, exist. Anticipating, even initiating change is the essence of good strategic management. It shouldn't take the threat or reality of a crisis to bring about positive change in a business; however, when too close to a situation, otherwise intelligent and capable individuals are unfortunately very susceptible to resting on laurels in a vain attempt to avoid the uncertainty and anticipated pain of change. The good news is that it is possible to cut short these destructive eras if realized and then take decisive action while the cost is still small and accrued damage of delay relatively minor.

Procrastination can only be broken when management accepts responsibility for weak performance.
Ronald A. Norelli is the founder and chief executive of Norelli & Company, a management consulting firm founded in 1981 and headquartered in Charlotte, N.C. The firm assists middle market companies with strategic change by developing and implementing comprehensive programs addressing management, operational, financial and organizational marketing issues.

Not Ideal
but
Workable
by Mary Ruth Austin
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With business booming and unemployment at its lowest level in nearly a quarter century, many employers today find themselves between a rock and a hard place. They must add employees to handle increased business but because there are so many more jobs than qualified candidates, are finding the applicant pool nearly "fished out."

Most of the men and women still not working are unemployed for good reason - they really don't want to work or lack the skills, maturity, discipline or common sense needed to work successfully anywhere. That's the bad news - many of the candidates who walk through your door and fill out your applications aren't qualified or motivated to do much of anything. The good news is that, because of today's two income family, our highly mobile society, and continued downsizing, swimming in there, along with all that carp, could be someone with just the skills you need. How do you find them?

The first step is to know exactly what type of employee you need. That's why we suggest you have two or three of your top employees in the job you are trying to fill complete an independently validated hiring tool like The Omnia ProfileŽ. Knowing what traits are needed to succeed in the job will not only tell you the type of candidate you need - assertive or helpful, outgoing or skeptical, fast paced or persistent, independent or accommodating - it will also tell you where to look.

Say, for instance, you need to hire an administrative assistant You profile your company's two top admin assistants and learn that both are non-confrontational and cautious (Column 2), as comfortable crunching numbers as interacting with clients (nearly equal Columns 3 and 4), patient and happy handling repetitive tasks (tall Column 6), and accurate, detail-oriented and eager to please (Column 8). The benchmark for that job, then, is 2, 3=4, 6, 8, (Figure 1).

 Looking at our benchmark or target for the job, we can see that our "dream candidate" prefers security, stability and predictable routine to winning, risk, challenge and change. This tells us she/he won't change jobs to make more or advance and probably won't leave a position she likes unless forced to (her spouse is transferred, the company she works for moves, closes or lays her off, her job is eliminated). Also, not at all comfortable "selling" herself or being unemployed, she will probably take the first job she is offered. This means you will need to find, recruit, evaluate and hire promising administrative assistant candidates quickly.

How do you find them? Ask your staff for leads. Because "true staff support" personalities value being part of a friendly, stable team, support staff already working for you may know of someone qualified and looking. Let colleagues and trade associations know you have an opening and run an ad in the Clerical section of your local newspaper. Using those three recruiting avenues should generate at least some candidates, some qualified and some not.

At Omnia, we suggest you have every candidate you talk to complete an Omnia ProfileŽ when they first arrive at your office, along with your employment application and any other required forms. Then, after you have developed your "short list' of candidates, fax those applicants' profiles into Omnia for interpretation.

But, what if, when the interpreted Profiles are returned to you, none of your candidates has the 2, 3=4, 6, 8 Profile pattern you want? One applicant, according to her interpreted Profile, is far too competitive, proactive, fast -paced and autonomous to be happy or effective for long in what is essentially a routine support role and, according to the Profile, would be a much better "fit" in sales or management.

Your other two candidates' profiles - 2, 4, 6, 8 and 2, 3, 6, 7 are close but not identical to your "target." Which one should you choose? Neither, if you are going to base your whole hiring decision on Profile results. Previous, relevant work experience, training, employer references and interview results are all important factors in your final decision; a hiring tool like The Omnia ProfileŽ should account for no more than 25% of your hire/no hire decision.

Let's assume that both applicants have equivalent experience, similar training, good-to-glowing references and impressed you during the interview. Now, who do you hire?

Actually, both profile patterns are workable for an administrative assistant, as long as you know how the candidates are likely to differ from your benchmarks and can work around those differences.

The applicant with the 2-4-6-8 profile is more reserved, less talkative, less social and more comfortable working with facts, figures and forms than your current top administrative assistants. Logical, analytical and a good problem solver, your 2-4-6-8 (Administrator) candidate is conservative, helpful, routine-oriented, and a perfectionist who has good attention to detail. Cautious in her dealings with others, perhaps even shy, she will not be rude but won't like dealing with people all day long, either. Her lack of people skills could be a problem if your position involves much contact with clients or the public.

On the other hand, the candidate with the 2-3-6-7 (Counselor-Advisor) Profile is much more friendly, outgoing and poised than your benchmarks or the other applicant. If meeting and greeting clients is a part of this job, her superior communication skills (tall column 3) could prove a real asset, as she can probably talk to anyone about anything. But, if the job involves processing papers, researching and resolving client problems or crunching numbers, she lacks both the analytical mindset and attention to detail needed. Socially driven, when bored, she could wander around the office talking to co-workers, ignoring her work and disrupting theirs -the taller her column 3, the chattier she will be. Her tall column 7 also tells us that she is much more autonomous and big picture than your target. While she will be more comfortable making decisions and acting independently while you are away, she lacks your admin assistant's attention to detail, which means her work is likely to be less accurate. Also, her tall columns 6 and 7 tell us that she can be stubborn, especially when rushed or forced to meet deadlines she had no part in making or considers unfair. More comfortable delegating details than dealing with them, she is likely to make many errors, especially when rushed or working while talking, and could prove rebellious or insubordinate under pressure.

The candidate with the Administrator personality comes closest to your needs. Although not as friendly and outgoing as your current admin assistants, she has their non-confrontational, helpful manner, their patience, persistence and detail-orientation.

Just as neither will do the job exactly the same way your top admin assistants will, both

also need to be managed differently. Your admin assistants, the Administrator and the Counselor-Advisor all dislike risk and prefer a nice, safe, straight salary over the chance to earn more via commission or incentives. With nearly equal Columns 3 and 4, your admin assistants need a mix of generalized praise and specific factual feedback from you, while the Administrator would prefer you skip the praise and stick to the facts. The Counselor-Advisor prefers it the other way around.

None of the three like to be rushed and need to be notified of change and deadlines well in advance. Like your AA's, the Administrator CANNOT be over-managed and NEEDS a very "hands-on" boss and complete, explicit, perhaps even written instructions. The much more independent, self-starting Counselor-Advisor NEEDS to do her job her way and is likely to find that level of management excessive, even though of the three personalities, she is the one who needs it the most. The Counselor-Advisor will work best for a boss who outlines a project, lets her fill in the blanks, answers questions when asked and then checks her work for accuracy.

Profiling, then, helps determine what traits are needed to do your job, how similar or dissimilar an applicant is to your employees succeeding in the job, explains how those differences will impact the way the candidate does your job, and provides important information about how to manage the applicant for peak performance.

For companies forced to fish from a shrinking applicant pool, profiling helps determine, before you hire, whether a candidate is a "trout" who "fits" well the duties of your job, a "carp," who couldn't do this or any other job or a "grouper," who although not "ideal" could probably do the job, and how to manage them to maximize their success.

 And using an independently validated hiring tool is more scientific and cheaper than the candidate "test" one of our newer clients said he'd been using in his "fully employed" community: "We hold a mirror up to their mouth. If they steam it up, we hire them."

 

The Omnia Group is an employee selection and management consulting firm with 8,000 clients in 15 countries, based in Tampa. The Omnia Group will provide a complimentary Omnia Profile and interpretation to readers who call 1-800-525-7117 and request one.


Biometrics
for the Uninitiated
by F. J. Bud Purcell
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In a survey of 134 organizations by Information Week magazine, a majority of information technology managers (94 percent) reported that they did not use biometrics. The biggest reported reason for this was that they "didn’t know enough about it."

So, let’s begin by defining "biometrics."

Biometrics is the measuring of certain physical attributes or features to positively identify one human being from all other human beings.

A biometric is a unique physical characteristic or personal trait used to recognize the identity of or to verify the claimed identity of an individual (human being).

Biometrics, in security applications, includes fingerprint identification, facial appearance, hand geometry, digital signatures, voice prints and retinal patterns. Biometrics is a digital technology used to absolutely identify a person based on physical characteristics.

The most popular and widely known biometric is the fingerprint. However, other biometric techniques are fast catching up. Among these racing for recognition are:

1. Voice prints — each human being is blessed with a special voice. Although many may sound similar, they are never 100 percent duplicated.

2. Retinal scanning — the recognition of the unique patterns of the veins on the back of the eye and the eye’s iris.

3. Vein patterns elsewhere on the body (back of the hand, etc.).

4. Hand geometry is based on the fingerprint approach. Each human’s hands have patterns different from any other human.

5. Eyes and facial characteristics. Eye patterns and facial patterns vary and are not the same even in identical twins.

6. A rather new area of exploration is the personal body odor and genetic make-up of humans. From early results, no two people have the exact same body odor. Another new area of work is in determining the uniqueness of ear-shapes.

Fingerprinting technology is by far the most advanced of the biometric systems. Fingerprinting has been around for many years and the systems are easy to use. Law enforcement agencies have been aware of the value of fingerprints for decades. The FBI maintains the largest fingerprint file in the world, drawn upon by police and military departments for accurate identification.

Fingerprint "machines" are controlling the physical access to classified areas throughout the government and in many businesses. Many banks are currently using thumb-prints for identifying customers, especially those who do not have accounts with the banks.

Some states employ the use of fingerprints in their welfare systems. Connecticut’s state-wide welfare system has saved more than $9 million by catching welfare cheats and frauds.

Retinal or iris scanning

A lot of experimentation is going forward on this type of biometrics. Although the system made by Sensar of Moorestown, New Jersey, is under development in concert with Citicorp, it is impressive enough to be termed "an investment in a product with a lot of potential."

The technology is reliable according to Terry Gates, marketing manager for IriScan of Mt. Laurel, New Jersey, a company that owns exclusive patents for iris recognition hardware and software. He bases this reliability on the fact that "… in the entire human race, no two irises have the same detail, not even among identical twins."

In contrast, fingerprints carry as many as sixty variations to compare and analyze. Naturally, identification is less reliable and a great deal slower to obtain results.

Voice verification

Not a new technique but it is only now catching on as a reliable and viable part of security systems. One large bank has tested it on more than 9,000 employees and likes the results, enough to plan adding more employees to the system. One advantage of current "VV" systems is that regular telephones can be used so that new, additional hardware is not necessary. Training is both quick and easy.

Face recognition

A face recognition system called TrueFace is being used by a check-cashing machine operator in Texas. The system is the product of a Wellesley, Massachusetts company, Miros, Inc. This system compares an image from a common security camera to stored images of pre-authorized individuals. This happens in less than one second.

Another system developed and sold by Visionics Corp. of Metuchin, New Jersey, is catching on quickly. It is a $300 system, which includes a camera, video board and software. The president of Visionics, Joseph Atick, expects the security market for this product to grow as computer manufacturers begin to incorporate face identification in their hardware.

(Is this "good-bye" to passwords as we use them now?)

Typically, opinions vary widely about the future of biometrics. One expert suggests that the growth rate will be from 25 percent to 35 percent through the year 2000. Richard Power of the Computer Security Institute in San Francisco says he doesn’t see biometrics as a realistic solution for general security for a long time to come. This opinion considers price as the big obstacle.

However, the future covers a lot of territory. There is no doubt that biometrics will find their way into most of our lives, and at least for now, you can say you have been initiated.

Fingerprinting technology is by far the most advanced of the biometric systems.


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