Management: Be ready for the nuances of 2012

By TEC President Harry S. Dennis, III, originally published in BizTimes.

It’s hard to believe that 2012 is just around the corner. The best word I would use to describe 2011 is tumultuous. Everything bad that could happen economically happened.

For small and medium-sized businesses, 2011 can best be described as unpredictable.

But businesses have endured because, for the past decade, they’ve learned to think about surviving first, and then about the good times that might lie ahead.

So this month, let’s take a look at the nuances for business planning next year and the variances we’ll be facing.

In statistical jargon, error variances explain the strangest things: a missile that unexpectedly deviates off course, an aircraft that crashes because of an instrument deviation, an airbag that deploys without warning, and so on.

We have variances in our business planning, too. Here are tips on how to deal with them.

Sales projections

In the good old days, we were accustomed to talking about the 90/80/70 percent variance contingencies. The assumption was you began with a 100 percent optimistic sales plan.

If, after one quarter, it was obvious that you were overly optimistic, you would start working the 90 percent plan. You’d throttle back your cost-of-goods sold and net operating profit projections.  Usually, plans for capital expenses would remain in place, but with “delay” written next to them.

If, after two quarters, it was clear that your projected revenues wouldn’t be greater than 80 percent of your plan, you’d cut back across the board on things such as capital expansion, hiring employees, new lease commitments and so on.

Once you determined that your company was unable to exceed a 70 percent annual revenue target, you might start laying off employees, possibly eliminating entire shifts if necessary. You needed to enforce extreme cash savings measures too.

The nuances or variances associated with 2012 almost guarantee that manufacturing and service firms will experience these roller coaster rides.

Why plan at all under these conditions, you ask? Because this is truly the new normal. As much as we despise it, it won’t end anytime soon. Being prepared is almost a myth, in fact.

Intra-business stability

On Dec. 23, 2010, Air Force Magazine reported, American troops in Kabul, Afghanistan, were in their usual high alert and conducting assault training exercises at city central.

The training was to create a sense of internal “business as usual” operational stability among the troops. Likewise, any business operating from a contingency plan can continue to train and retrain employees to meet the unexpected.

Any procedure that might fit under the rubric of standard operating procedure needs to be re-examined.

Business slowdowns present a great opportunity to take on projects that usually fall between the cracks during busy times. One of our favorite projects at TEC is work flow, especially computer-to-computer or network-to-network.

I’d place website upgrades into that category. Good websites are upgraded three to four times a year. When was the last time yours was upgraded?

Seizing global opportunities

For the past year, the stock market has been reminding us in knee-jerk fashion that the effects of global events, primarily those dealing with the economy and banks in European countries, are so severe that they may as well be happening to our next door neighbor.

But dismal global reports are offset by continuing super strides in countries like China, India and, most prominently, Brazil. The challenge to the United States is how to let smaller businesses claim a piece of these growing pies. This is one solution to abating the 90/80/70 percent revenue syndrome.

Something more than determination is really needed. When I hear a company say, “We’re just a regional business and don’t have the wherewithal to go elsewhere,” it reminds me of a former TEC company that made the move quite successfully.

At the time, they were in the phone booth and telephone enclosure business, serving Ma Bell for the most part. Due to the onslaught of cell technology, phone booths became dinosaurs almost overnight. With perseverance, the company opened up Third World markets in places such as India, Indonesia, the Caribbean and Eastern Europe.

Net result? The business was saved. You might recognize the company’s name: Fortec.

Bring it on

It used to be that the only two things we could really count on were death and taxes. I think we can safely add a third one: the world of business nuance as seen in a string of unexpected variances.

Until next month, and a new calendar year, may these nuances work for you, not against you.

Human Resources: A sneak peak at tomorrow’s workforce

By TEC President Harry S. Dennis, III, originally published in BizTimes.

Some of us will still be in management positions in 2021.

That means that, right now, there are 12-year-olds in grade school who may be junior employees at your company in what seems like a few short years.

Here’s a quick primer to remind us where we were and where we are now. My thanks to TEC resource, Dr. Gustavo Grodnitzky, for this review.

The Silent Generation

This group was born between 1925 and 1945. Many have left the workforce. But many also have re-entered in part time or other vocational areas, simply to make ends meet in this economy.

Several of our TEC chairs and staff, including yours truly, fall into this category. We’re also called “rationalists.” We are loyalists and principled in our commitment to one company or one occupation during our careers. We’re not known as extreme risk-takers. We accept the pluses and minuses that any job has to offer. We’re good company role models, as well.

The Baby Boomers

Born between 1946 and 1964, they’re called boomers because so many were babies created after GIs returned from World War II. Boomers are driven to excel. They want steady job progression and the wealth and materialistic rewards that come with it. These folks introduced the idea of the 60- and 80-hour work weeks. They equate effort and time invested with their expectations of financial and material return.

Generation X

Xers were born between 1965 and 1981. Unlike the Boomers, they want work/life balance. They’re more focused on the productivity and efficiency required to get the job done in 40 hours or less. This gives them the balance to pursue interests outside of work, such as families, hobbies, a healthy lifestyle, and so on.

Generation Y

Yers were born between 1982 and 2000. They’re also known as Millennials, reflecting the symbolic change to the 21st Century. Unlike Xers who are preoccupied with work/life balance, Yers have trouble making the distinction between this semantic dichotomy. Instead, they prefer a blended lifestyle. In other words, they hold very close what they think is important in their work life. They equally value what’s important in their personal life. Yers are complex and more difficult to understand and manage than Xers and Boomers. You can see the differences here:

• Time. Grodnitzky talks about employers shifting from a traditional time-keeping methodology to a progressive one, which he describes as paid time off, or PTO. PTO replaces personal time, sick time and vacation time. Basically, it says to the Yer, “You are an adult. Use your time wisely and fairly so it doesn’t detract from your job responsibilities.”
• Flexibility. The close cousin of time is flexibility. And the close cousin of flexibility is pay that is tied to performance results, not a time clock. Pay for performance is catching on at a number of TEC companies. But most will tell you that having the right metrics in place to measure performance is critical. This means that whether a Yer is working in the office, on the road, or at home, you should expect the same performance results.
• Personal Growth. I have found that Yers have the highest quest for personal growth and knowledge among all the employee groups mentioned above. A savvy employer will give them opportunities to grow.
• Relationships. A Yer’s relationship with supervisors is critical to how long they stay at your company. Boomer supervisors, in particular, need training on how to relate to the Y generation.
• Cause. Yers are most effective when they can relate to and embrace causes. Your mission statement or vision or “why we do what we do” statements are places to begin. But the message must be meaningful, short, to the point and engaging. Otherwise, Yers won’t really care.

Generation Z and beyond

Next, we have Generation Z, sometimes defined as those born anywhere from the mid-1990s and early 2000s through to the present.

They’re raised on the Internet, adept at multi-tasking, able to sift through large amounts of information quickly and eager to share what they’ve found.

They, and the other generations before them, will make up the workplace a decade from now. Here’s what employees in our future workforce might look like:

• They will be a weighted composite of boomers, Xers, and Yers, with the Yers weighted the highest.
• Their speed of output will double from today’s standard.
• Marriage and children will not be a significant goal for them.
• Mobility coupled with job stimulation will be a high priority.
• They will have an Internet business in addition to their primary vocation.
• They will show fierce independence, but exceptional work pride, with multi-talent capabilities.

That’s the view, a decade from now. Until next month, what else do you see?

4th Quarter Productivity: Make the season work

You and your team have been working hard all year. First quarter, second quarter, third quarter, and now rounding towards – a holiday party? Even if the holidays are your favorite time of year, it’s hard not to worry that productivity could be sidetracked by distractions during 4th quarter. So how can we get the numbers where we need them without turning into Scrooge?

Checking it twice: Start by assuring that your Human Resources department has sent out a list of your company holidays and time-off policy well ahead of time. You may want to suggest a deadline when all requests need to be in order to be considered for priority.

All is calm: Have your Project Management team conduct more resource planning check-ins and detailed time-off calendars to assure your planned work is covered. Since distractions and time-offs during this time of year are a given, build some extra time into each project. Be sure to include any of your holiday parties into the work schedule, too.

Shake the tree: Your Sales team should follow up with prospects one more time to see if any year-end sales can be added. A sales challenge with a respectable prize can be tied in with your holiday theme. Don’t forget that some clients may have annual budgets to use or lose. Propose concepts that bring some last minute value and lead to more work in the new year.

Setting a jovial tone during the holidays can motivate your team to face year-end challenges with determination. Accept that some decline in productivity is a reality at many companies this time of year. Showing your teams gratitude, tolerance, and flexibility in the face of holiday time-off requests can make the hours they are at work as productive as ever. And proving that you are there to hold down the fort no matter what is a great way to remind your team that we still have a job to do.

Text vs. Email vs. Call: Etiquette for Today's Technology Obsessed Culture

Perhaps more than any time in history, the variety of communication tools at our disposal is greater than ever. As valuable as they have proven to be, when it comes to the electronic communication tools, all platforms are not created equal – nor were they meant to be treated as such. Here are a few considerations to keep in mind to keep the electronic channels of communication running smoothly.

First and foremost, when establishing a relationship with a potential client, find out which communication method they prefer. If you’re not in the habit already, ask them when you share business cards. With existing clients, it’s best to reply in whichever method they use, unless for security reasons, it does not meet your company policy.

Similarly, at hire, be sure to let your employees know how you prefer to receive messages. In management positions, it is easy to spend critical hours of your day reading and replying to emails. As with paper correspondence, if you do not have enough time in the day to monitor and reply to your electronic inbox, have an assistant field and filter your incoming messages for you.

Texting: A short message might mean a short business relationship

While useful at times, most of us know that texting is not a good way to conduct any serious conversations. Sure, it can be a great way to alert your team with a status update when you are offsite but for anything important, ask yourself if an email wouldn’t be better. If a client requests that you message them, it’s best to start the text by asking if they are available to IM at that moment. And mind the spellcheck – sometimes your smartphone can do some not-so-smart things with your intended words.

Email: If it’s good enough for the Queen

Queen Elizabeth was the first head of state to send an email way back in 1976. Since then, email has replaced the majority of business communication that goes on in almost every office. It’s reputation as a good way to conduct business has changed from a novelty to a necessity. When is the last time someone told you they didn’t have an email address? As a CEO, you should draft your emails to clients in the same way you would a typed letter, letterhead, signature and all. Or, if you wish to send an even more formal message, attach a PDF of your electronic letter. Email continues to be a great way to establish a time-stamped electronic papertrail, as well as a great data storage service. 

Telephone: Still a valid way to ring up a few more sales

In some offices, the ring of a phone is nearly extinct, in favor of email. Yet there are scenarios where nothing can express your personality like a phone call or video-conference. Your tone can easily get lost in email, and often times, that is the only way your authenticity can truly come through. Not only is your tone more clear, the tone and reaction of your client is more apparent. If you are gifted in the art of conversation, you can learn a lot about your client’s comfort level just by listening. Of course, if the situation is delicate, nothing beats a face-to-face conversation.

Depending on the tech savvy-ness of your business, you probably have a sense of which messages are best suited for which technology. Company guidelines have probably morphed over the years, and often times a CEO will be the one who sets the standard.

Take note of how the business communications of your team are being delivered. Are your employees sending abrupt text message to an important lead? Is an eco-conscious client being sent paper invoices? Maybe it’s time to review your own practices and set some new ground rules. Year-end might be a good time to revisit your communication methods with your clients and coworkers.

Lessons Learned Part 1: CEO Case Study – Netflix’s Reed Hastings

“I messed up,” began Netflix CEO Reed Hastings in a September 18th blog post and email to customers. Such a straightforward and personal acceptance of responsibility should have set the tone for an apology that would make it easy for customers to forgive and forget, so why did it only fuel a backlash against his company?

As you likely know by now, Hastings was not apologizing for raising prices and complicating things for his customers by separating DVD rental and streaming services. No, he apologized for the way the company mishandled the way they broke the news. “It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming, and the price changes,” the post continued. “That was certainly not our intent, and I offer my sincere apology.”

Hastings went on to announce even more changes, separating the services into two companies with two pay structures, demonstrating that he clearly hadn’t heard any of the original concerns. He even seemed to poke fun at the fact that they had raised prices instead of confronting it head on, creating an even wider chasm in appearing not to take concerns seriously.

But what could he have done differently? Public apologies are never easy, but could he have done better? Here are some things we can learn from Hastings’ ordeal, should we ever find ourselves in a similar unenviable position.

• Be authentic – Hastings’ apology was hardly clear or unambiguous, making it much less effective. A direct response to customer concerns is the only way to make it clear you mean what you say, and the only way to avoid further apologies to clarify your statements.

• Respond immediately – Netflix announced their plans to increase rates on July 12th, and Hastings’ half-hearted apology came September 18th. As the immediate onslaught of 5,000+ comments in response to his blog post will attest, his mea culpa could have come earlier. The lag time made it appear his hand was finally forced.

• Be personal – Hastings could certainly have appeared more contrite if he had looked his customers in the eye in a press conference, and invited questions. Instead, he pushed out an unexpected and faceless email with carefully constructed language, and engaged in no immediate Q&A.

• Be humble – Hastings titled his post, “An Explanation and Some Reflections”, which immediately strikes a defensive tone. “An Apology and Some Reconsiderations” may have gone further to win back the hearts of those he may have alienated. He declared many new changes to be “necessary”, which implies his audience feel as if they have no voice (and has since gone back on some of the company’s major plans, now demonstrating that they were never necessitated in the first place).

As is the case with any CEO, Hastings is free to run his company as he sees fit, and his customers and stakeholders will decide how he’s doing. But we can all learn some lessons when facing up to our mistakes, no matter how public or private. It will help us personally, and help the company maintain credibility long-term.