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Blog: The Business of Management April 2007 Archive
 

April 29th, 2007

How to Fire Up the Troops

Want to know how to rally the workforce and get people excited about following you into a tough battle against your business competition? Here’s the formula as demonstrated this week by Dell CEO Michael Dell:

  • Write a memo to your workers about big changes you have in store for the company.
  • Label it “Confidential” or “For Internal Use Only,” but find some way to get it leaked to a prominent business publication – preferably The Wall Street Journal.
  • Be brutally reflective, even going so far as to challenge some of the basic business strategy of the company. For example, if you have built the businesses on marketing directly to consumers and users, perhaps write something like, “(We will) fix our Core Business to be competitive. The Direct Model has been a revolution, but is not a religion…We will continue to improve our business model, and go beyond it, to give our customers what they need.”
  • Take a thinly-veiled swipe at one of your biggest competitors and energize employees with tough talk about how your new approach will be bigger, better, and radically different. Example: “We know our competitors drive complexity and needless cost into customers’ environments. These so-called ‘service divisions’ create a never-ending cycle of activity with unclear return on investment. We intend to break this cycle … and will help customers escape this complexity trap and unlock the true potential of technology.”
  • Frame the memo as a call to arms, a manifesto for change, and most importantly, as “a defining moment in our history.”
  • Be honest about the challenges ahead, but point to a better future (“the future looks great for Dell”) and the tough work ahead, but emphasize the Promised Land that lies ahead. For example, “we are up to the challenges that we’ll face on our journey — challenges that will test, teach, and ultimately strengthen us as a company and a team.”
  • Thanks everyone for the hard work to come (“Thank you for transforming Dell with the customer in mind every day.”)

Will this work? Only time will tell. But when Starbucks’ Howard Schultz did something much like this a few weeks ago, it garnered quite a bit of press and some positive employee feedback. Clearly, the “leaked memo” does a great job of grabbing the attention of customers and the business community at large. And maybe, it will help Dell to buy time to get the new strategy put into place.


April 26th, 2007

Sizing Up Candidates—The Two-Minute Rule

I get lots of press releases in the course of a week, and few of them catch my eye. However, this one did: A Robert Half International Survey of senior Canadian executives says that it takes 12 minutes, on average, for the executives to form an opinion about a job seeker they are interviewing.

Maybe things are different north of the border, but 12 minutes to size up a person is wildly out of whack. I’ve personally interviewed thousands of job candidates over the years and if there is one thing I have learned, it’s this: You know if you want to hire someone in the first two minutes of talking to them.

I could write a book about this, but the old adage is definitely true: You only get one chance to make a first impression. For job candidates, this is crucial. Executives and hiring managers form opinions quickly and it is difficult to change them once the initial impression has set in. Yes, I’ve had candidates who “warmed up” during the interview and ultimately made a favorable impression on me, but that’s the exception and not the rule. For the most part, my first, gut-level impression was right on the money.

I’ve also learned over the years to place my trust in this first impression, even if I don’t know exactly why I feel the way I do. Malcolm Gladwell wrote about this in his book Blink, about how “we think without thinking about choices that seem to be made in an instant—in the blink of an eye—that actually aren’t as simple as they seem.” Managers who do a lot of interviewing know what I’m talking about. You size up job candidates quickly and develop a strong impression on the fly. Whether you work in Canada, where it takes 12 minutes, or down here in the States, where we jump to conclusions more rapidly, the message to job candidates is clear: You must sell yourself quickly, or not at all.


April 24th, 2007

Soft Skills, Outsourcing and Working Until You Drop

I’ve been on the road for the past week, so my apologies for being away from the blog during that time. Here are some interesting surveys that came across my desk while I was gone.

Soft skills rock:A recent poll of hiring managers by OfficeTeam, HR.com and the International Association of Administrative Professionals says that 67 percent of hiring managers say they would hire an applicant with strong “soft” skills even if their technical skills were lacking. However, only 9 percent say they would hire someone with strong tech skills but weak interpersonal skills. In addition, 93 percent of hiring managers felt that technical skills are easier to teach than soft skills. The point—and it’s true of everyone in the workforce, from administrative staff up to high-level executives—is that the ability to work collaboratively trumps all else. Technical skills are nice, but they don’t do much good if you can’t work with others.

Outsourcing still an issue: Global outplacement consultants Challenger, Gray & Christmas note that there is a growing trend toward greater outsourcing of work in the financial services industry. Writing about the recently announced merger between European banking giants ABN AMRO and Barclays, John Challenger says that “in addition to the 12,800 jobs the combined banks plan to eliminate, the banks announced that 10,800 [jobs] would be ‘moved offshore to low-cost locations.’ This comes just two weeks after Citigroup announced it would be eliminating 17,000 jobs and outsourcing an additional 9,500 jobs to low-cost locations inside and outside of the United States.” He adds: “The issue of outsourcing has fallen off the national radar over the last couple of years. … However, as the recent banking announcements prove, outsourcing is still a significant tool among corporations seeking to cut costs.”

A sobering prospect: Need another indicator that the gloom-and-doom talk of huge worker shortages is just overblown rhetoric? A survey by Bankrate.com says that nearly one in five workers “plan to work until death.” Wonder why that is? Well, the poll also found that 28 percent of those surveyed save less than 5 percent of their gross pay a year. This includes 16 percent of Americans who acknowledge that “they are not putting any of their paycheck aside for retirement.” If you ever questioned the need for automatically putting employees into 401(k) plans and other self-funded retirement vehicles, this poll should cure you of that.


April 13th, 2007

Losing the Managerial Mojo

What happens when the leader loses his ability to lead?

For the most part, it simply means that the leader ceases to be able to command authority and rally the workforce behind the leader’s vision for the organization. In other words, leaders lose their credibility with the people they command. And, there is nothing that will cause a manager or executive to lose credibility faster than to act as if the rules don’t apply to him.

The latest sad example: World Bank President Paul Wolfowitz.

Wolfowitz joined the World Bank in 2005 after a controversial stint as President Bush’s point man in Iraq. Shortly after starting his new job, he directed the bank’s vice president for human resources to approve an extremely generous pay and promotion package for a woman described in various media as his “girlfriend.” According to The New York Times, Wolfowitz’s memo to the HR vice president was detailed and pointed, virtually dictating the kind of job she should be given. “I now direct you to agree to a proposal which includes the following terms and conditions,” Wolfowitz wrote to the HR VP. “You should accept immediately her offer to be detailed to an outside institution of her choosing while retaining bank salary and benefits.”

The “outside institution” the girlfriend was “detailed to” was the State Department, and her salary has been increased twice since she has been there by a total of $61,000. She now earns $193,590 annually, and although she now works at State, she is still on the World Bank payroll.

Not only is this a gross conflict of interest for Wolfowitz, but the World Bank board now says that neither the board’s ethics committee nor general counsel ever was informed or approved of this arrangement. Wolfowitz has apologized for his actions, but as with Don Imus, it only seems to have made matters worse. The World Bank employees’ staff association now says that its members have lost faith in Wolfowitz’s ability to lead and are demanding his resignation.

There is a lot of rhetoric surrounding this situation, but the average person will see this for what it is: The new boss used the power of his position to enrich and reward a woman he is involved with who is also on his payroll. Sleeping with a subordinate is never a good idea (it was once described to me as “Don’t fish off the company pier.”), but Wolfowitz compounded the problem exponentially when he played Henry Higgins with her pay and career.

I don’t understand why executives like Paul Wolfowitz don’t have the good sense to get out when schemes like this are discovered. Not only have his egregious actions been discovered, but he’s completely lost his ability to lead and effectively do his job. When will he finally figure out there’s not much else left?


April 11th, 2007

Job Cuts vs. the “War for Talent”

It’s hard to get shocked anymore by businesses cutting jobs. In some sectors—like newspapers, where The Tampa Tribune this week announced a cut of 70 staff positions—layoffs and cutbacks have become so common that they have ceased to be newsworthy since they seem to happen every day. And that is exactly why yesterday’s big layoff announcement from banking giant Citigroup was so surprising.

Part of it is the sheer size of the Citigroup cuts (17,000 jobs, some 5 percent of the company’s 327,000-person workforce), but another part is the amount the company will save as a result—$2.6 billion in 2008 from these cuts alone. When you add in savings from some previously announced restructuring, Citigroup’s overall savings will total more than $2 billion this year, nearly $3.7 billion next year and close to $4.6 billion in 2009. Those are mind-boggling numbers.

Citigroup’s action is also surprising because the 17,000 job cuts represent the “largest single job-cut announcement outside the automotive industry since 2005,” according to global outplacement consultancy Challenger, Gray & Christmas. “Unlike many of the financial job cuts that have occurred this year, [the] Citigroup cuts are not directly related to the housing slowdown and decline in mortgage lending,” John Challenger says. “Rather, it was the pressure to reduce costs, which were significantly outpacing profits for the nation’s largest financial institution.”

What is also troubling is that unemployment rates in major markets are on the rise. As reported in the Data Bank column in the April 9 issue of Workforce Management magazine, unemployment in major cities (measured from January 2006 to January 2007) is up across the board. Some examples:

  • Boston —5.2 percent, up from 4.4 percent
  • Chicago —5.1 percent, up from 3.9 percent
  • Los Angeles —4.6 percent, up from 3.9 percent
  • Minneapolis/St. Paul—4.7 percent, up from 3.8 percent
  • New York —5.6 percent, up from 4 percent
  • Phoenix —3.9 percent, up from 3.3 percent

“We are starting to see non-automotive and non-housing job cuts grow in size,” Challenger says. “If consumer and business spending cools this summer, the economy could weaken further and large job cuts may become a more common occurrence.”

So, just what is happening here? Do we have a “war for talent,” as we keep hearing about, or is unemployment rising as companies cut back? According to BusinessWeek, it’s a bit of both. While workers with skills in short supply are in high demand, BusinessWeek says that “the strongest evidence that there is no general shortage [of workers] today is that overall worker pay has barely outpaced inflation. In the U.S., the share of national income going to corporate profit, rather than, say, labor, is hovering around a 50-year high.”

In other words, if you are a teacher, salesperson, or petroleum engineer, employers are beating down your door. However, if you are an auto worker, journalist or middle manager, well, good luck.



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