Archive for October, 2006

“How much is your annual construction volume?” I asked a project manager who was one of several in his organization. “$300 million he replied.” I then asked him what he thought his time was worth to the organization. He had no clue.

If you’re ever wondering, use this simple metric. It’s not foolproof, but it can shed some light on where you spend your efforts and how others perceive you.

Take the $300 million and divide it by 250 business days. $1,200,000 per day is your daily value. Then take that and divide by 8 hours in a day. $150,000 is your hourly contribution to the organization. Again, it’s not perfect, yet you can start to judge where you need to be spending your time.

The tool can be used in reverse. I just had an hour of a CEO’s time. Doing these calculations, I was given $7,000,000 US worth of value. He must have considered the meeting important, because he asked me to come in to speak with him.

The shift in thinking helps everyone put time into perspective.

Hey, don’t argue that leaders have other people. This is an influential gauge, a tool of reference, not scientific evidence.

Beware of self-help and business books that promise too-good-to-be-true solutions.

The sales manager of a very successful company, with several hundred million dollars annually in sales, just described to me a book that outlines a three-minute sale. This book targets large sales, none the less. When he told me about it, I could not believe someone could write such garbage.

My perception is that you don’t have three minutes to make a sale, unless you’re selling perfume behind a counter. What you have is 3 minutes to create enough value that the listener will give you the next 10, 20, 30, 60, or 90 minutes to move whatever you’re selling, forward.

The sales manager also pointed out that no where in the book does the author describe how to duplicate his approach. Wouldn’t you think?!

The CEO of a several-hundred-million-dollar firm purchased for his grandchildren two fake-fur jackets for their birthdays along with a matching set for their dolls. The doll set, however, was real and the pieces came from a fur jacket that he’d had altered for his wife.

He made the mistake of telling his employees about the gift and soon everyone was talking about how he wastes money, using as their example his giving 5-year olds real fur jackets to wear. They claimed he was out of touch.

And also not true. What started out as fake fur jackets to his grandchildren AND real fur jackets taken from remnants of his wife’s alterations soon became a FUR FOR ALL.

The lesson, however, is important.

When you’re in a position of authority and you’re making big bucks, it’s important to remember that those who earn $10 per hour US may see the world differently than those who earn $100,000 US or $1,000,000 US per year. These small differences drive a wedge between those within a company, and like this CEO, you’ve se the stage for fighting the wrong battles.

Take the time to consider those around you and to make sure that what’s said and done in private are private. The world has also shown what what you now think is priviate no longer is…..make decisions thinking about all the consequences. (Yes, it’s a pain.)

It’s a simple but important lesson. I learned about the fur jacket from a sales person and then was corrected by a senior manager.

(The picture above is faux fur.)

You might say that each generation has its own theme that permeates through its culture. In the case of kids 12-25, the theme is one that will have significant effects on how those in business do business in the future.

For example, when one of our sons was 13, he mentioned at the dinner table that he’d watched a show in school about a country called Saipan. The segment highlighted the treatment of employees in sweat shops around that country and who’s benefiting from these conditions.

He mentioned household-name brands of clothes he even had in his own closet as he listed popular retailers’ names amongst the dozens he recalled. To his credit he saw this as intolerable.

This type of activity is not limited to just a school function. USA Today did a segment on October 24, 2006 that I had pulled about how Generation Y is getting involved.

Shaped by 9/11 and through a generation of wealthier Americans, these children feel a sort of responsibility and a calling to do more than be the “greed” generation of the 80′s and 90′s.

The consequences for those in management are huge. You see, my son has much more power than I did in my generation. He did not just tell me about the conditions; he asked that we pull up Google videos and to type in Saipan sweatshop.

The following video saipan sweatshop google

The discussion that followed was about the choices he will making in his lifetime as he gets older and once he’s developed discretionary funds. He may make decisions about purchasing goods and services based on the information such as these videos.

Simply because the clothing says “Made in the USA,” it does not mean that it’s worth purchasing if the conditions of the workshops are so poor that they are exploiting indentured servants.

I’ve seen, in corporate board rooms, the challenge of how to be visibly socially responsible as well as to be socially responsible as an organization. Perhaps a talk with the younger generation is a good place to start.

Just as Warren Buffet’s domestic NetJets has had trouble making money, Blue Star Jets has been making money from the get go according to The Robb Report. The reason is simple; they have a unique business model that works.

As NetJets and other jet companies set up Fractional Ownership programs where the participants need to purchase a portion of their plane and then pay fees for use and annual membership, Blue Star utilizes everyone else’s jets.

Think about it. Most jets are not in use 100% of the time. Blue Star brokers out this free time so that the planes are making money instead of sitting on the ground.

With over 4000 planes on hand, or in inventory, depending on your perspective, Todd Rome and Ricky Sitomer have changed the way jets can be your way of travel…if you’ve got a few thousand per hour.

Need a jet? They search inventory and in less than 4 hours, they promise, the jet is ready and waiting to bring you to your destination. Only need it once that year? No problem; they can do that, too.

Sounds like a great program. Prices run from $1000 for a turbo prop to $12,000 for a Boeing Business Jet. (The firm owns no aircrafts, and therefore, has no expenses besides marketing.)

Although the two owners’ pasts consist of fines for selling unregistered securities to the NASD (National Association of Security Dealers) and a banning of a firm of theirs from Wall Street, the clever concept of this business model can’t be denied.

How might you be able to put a new twist on an old industry and make some innovative decisions for your organization?

Check them out at bluestarjets

FTBack August 26, 2005

Found this while reviewing some of my old slides. Thought it was a unique approach.

“Smart Communications, a Philippine cell phone operator, has started the world’s first payment system by text message. When a husband gives cash to an agent in Hong Kong, his wife receives a cell phone message in the Philippines saying her account has been credited. She can withdraw the cash from a local McDonald’s, and it’s cheaper than the underground network.”

What opportunities are you missing? Here, McDonald’s has locations around the world. Cell phones are ubiquitous.

Think hard.

When someone’s hired, what happens? Does your HR department go through a variety of steps to insure that all documentation is completed one piece at a time? Where someone prints out digital forms as needed? What I call manually automated. You still do the work? Or are you automated.

An individual fills out a master screen and then each document is printed with the key information filled out on every single form you’ve got in house. All that’s necessary is a signature at the bottom.

This is how it should be done.

Step 1. Homework on the candidate completed and a job offer made to the individual.
Step 2. From home or on the job the new hire fills out a master screen that has all if not most of the key elements required on all the forms you have in house; they do this on one screen.
Step 3. Everything prints.

1. W-4
2. I9
3. Emergency Information
4. Dress code documents
5. Confidentiality or Non Disclosure documents
6. Internet and Email policy
7. Drivers license and social security paper forms
8. Vacation and sick leave policy and schedules
9. Direct deposit forms
10. Employee orientation information
11. Tour of office schedule
12. Desk and or work location data
13. Computer access information
14. Company Policy Manual
15. Parking passes
16. Drug testing schedule if necessary
17. Benefits package
18. Custom documents for your company or that are industry specific

etc.

Focus on the automation. If 92% of all documentation comes out at once, with no human contact, consider how professional you’d look and the impact of being complete the first time around.

If you want to get even more in depth, you can stage additional information retrieval topics with the hire so that nothing is missed.

3 month schedule
1. Performance Review
Leadership Review
Peer Review
Self Assessment
2. Health and dental insurance documents initiated digitally
3. SEP and 401K starts
4. Eligibility for sick and vacation days
5. Insurance is automatically sent all documentation

A great way to do more with less!

Here’s a concept.

Consider the animal kingdom. Two animals mate and in some cases they work together to insure that their offspring survive. With a wide brush I bet the supporting evidence is that most reproduction does not have dual support of the father and the mother. Such as the trillions of fish eggs hatched throughout the world.

Take it one step further and in some groups such as elephants there is some supporting mechanism for group protection. Small groups protect offspring as a unit. Ant and bee colonies work in a similar way, but use a very different model, where there is typically one queen so that the “guardians” are not involved in procreation.

That’s about it.

Now let’s make the transition to humans. Father and mother have a child and to a large degree it’s “THE TEAM” against the world to raise the child. In some cultures and in some families, there’s an expanded unit that protects the offspring, however, given the social changes humans have gone through, the protection is often not physically present such as in the days of tribal living.

Again, it’s you and your mate against the world.

Shifting to the business arena, the same philosophies hold true. If you’re in a family unit and push comes to shove, family may or may not stand, but most employees are not part of the immediate family network.

Concept #1: Family members in business will tend to protect family members. (Even if they beat them up later when no one is looking.)

This means that circle number one of immediate family traditionally will surpass extended family.

The same holds true about company vs. company. You might defend your own company and its employees before you’d defend another company. Yet there are occasions this might change.

Those in cities may protect those in their own cities. Those in states/providences may protect members of their states/providences. Those in countries may protect those in their own country. Alliance groups may protect those in alliance groups. Those in one religion protect those that believe the same way….etc

For example, soccer fans around the world protect those that support their teams. Gangs protect gang members first.

Concept #2: Commonality creates a bond. The stronger the belief or emotion towards the commonality, the stronger the bond.

When all is said and done, the real need here is to protect the individual’s family unit or if there’s no unit, one’s self. Look at the instinctual tradition of how a mother or father might sacrifice themselves for their children. Even to the point of death.

Concept #3: There is a hierarchy of protectionism that’s driven from the individual on up.

Think in terms of rings around an individual where each ring out brings a lesser but important bond or need to protect.

From this information one can extrapolate that partnerships, business or non-business, are only as good as the individuals feel there is a value in it for themselves. The bond. Does it in some way protect my own self interests or the self interests of those that one feels are important.

In the end, your business is what you’d try to protect first from another business. Your primary thought would be to protect all the incomes of those whom you work with. And how many times have you seen people gouge their way to safety when the possibility of saving all the jobs are nil; you’re going to protect your income if the income is necessary for survival.

Ask yourself, if a good friend and co-worker wanted a promotion for $50K (a significant number) above your current salary, and you were offered the job, given that you wanted it also, would you give your friend the job? Your answer has to be truthful.

It’s important to realize that when one suggests that they’ve got partners in a company or an organization, they might have them only to a certain degree. I’ve worked with many a company where the employees say they are all for the company and love the employees UNTIL they leave. Their last remarks are, “We’ll keep in touch.” Some may visit a few times, but once the rubber hits the road, the TYPICAL employee’s connection is lost with the company.

There are exceptions. In fairness to the exceptions, I agree that a few people might remain in contact.

Looking from a slightly different perspective, would your cohort turn down a job promotion with significant pay and benefits so that you’re happy? You most likely would do it for your children or significant other.

Try another little test…answer these questions. In this example, I’d like you to consider that the allies must be people that would put your needs equal to or above theirs… OR … that they would do almost anything to help you.

Who are your top 3 family allies?
Who are your top 3 business associates?
Who are your top 3 business allies?

Find this challenging? If your mother is alive, is she on the list? Many of those who’ve answered these questions often find that mom is missing. In my case, at 43, if I were to call my mom and needed her immediately, she would drop anything.

The other two questions are tough. Business associates who are watching out for your best interests? Bet this was a challenge, unless you’ve paid them to be your friend.

Business allies are another challenge. If you’d stop paying them, would they come to your rescue without asking for a percentage? Doubt it. Though it does infrequently happen.

Consider this the next time you’re talking partners; who’s really in it for whom? It’s not wrong to have circles of influence and to feel an attraction to a particular circle of influence.

Understanding human dynamics helps to develop the right partnerships along with protecting your own butt. It’s just information that helps.

If you want to be successful, be careful about how you perceive others.

As my taxi drove up to the Millennium Hilton in NYC, I realized the hotel in which I had booked two nights was right across from the World Trade Center location. The gates, photos, and security were just feet away from the entrance.

When the yellow taxi came to a complete halt, I opened the door, grabbed my suitcase and placed my briefcase on the top portion so that I could pull the two together into the lobby.

A beautiful, high ceiling with wood trim blended with the contemporary decor.

After a few minutes in line, I approached the clerk behind the counter with great big smile on my face.

She pulled up my name and as we went through the typical routine of credit card and ID, we started some small talk. She said that she’d given me a nice room with a king size bed even though her manager had just told her to give me a double.

He let it pass.

As this transaction was going on, I pulled out my Hilton number and asked that she place it onto the account. As she finished typing she said with some surprise, “You’re a Gold Member, and you use Priceline?”

“Yes, I’m Gold, however, there’s no need to purchase a room for $440 per night when I could get the same room for $130 per night.”

She made assumptions about my spending habits and my purchasing patterns based on what I was wearing and how frequently I travel.

Her assumptions were incorrect.

Her miscalculation could be the same miscalculation you’re making about the needs of your clients, employees, vendors, and others. Just because a client may own a large home does not mean they want the most expensive offices. Just because an employee is quiet on the job does not mean they are quiet people. Go to a football game with them and maybe they’re one of the fans with their faces painted in blue!

The less you make major assumptions, the better you’ll be able to service others. Market leaders may occasionally rely on hunches and guesses, but their market LEADERS because they get factual data and then make strategic decisions based on it.

Charles Gibbs has used 9Zero as a frame of reference for years while he worked at IBM, Phillips Petroleum, and now at BlueCross/BlueShield as the director of 60 employees.

What’s 9Zeros? It’s a philosophy as well as an approach to evaluating an organization based on who within the organization can make 9Zeros decisions. Those that have billion-dollar decision making power. And I mean billion dollars US.

Here’s the power.

In large companies, identifying who can make these decisions is critical in two ways. The first being that once you’ve identified 9Zero individuals, your job, if it’s in your firm, is to support them with all the leverage you’ve got. At Phillips, Charles said there were 23 people in such a position when he worked there.

Now here’s the tricky part, Part two. Being a 9Zeros is not done by title and often those who are “titled” may think they are 9Zeros and in reality they are not even close to holding this much power. Definitely a place for tact and diplomacy. For example, a Senior HR Manager or an EVP of Operations may think they are, but they may just be another cog in the system.

A truth is that in working with 9Zeros, looks can be deceiving.

Then again, the secretary to the CEO, the clerk down the hall, the manager who can turn off a plant for three days, and the lady who trades funds may have more 9Zeros influence than any of the titled individuals. It’s because they do have the power. A person good at identifying 9Zeros understands that it’s not about organizational charts but about people who can make the big moves.

To those within the organization, it’s also important to know who is a 9Zero candidate so that if you can get them to champion a project or an idea, the odds are it will happen. Their influence is so large that often those within the organization search them out to insure that what they will make it.

Taking this a step further, even small businesses can have 9Zeros. Think philosophy not just dollars. These are key people. The president, the plant manager and the purchasing agent may have more power than the COO and the Head of Design and Engineering. Then again the secretary to the CFO may block all vendors she does not like. A powerful position.

Make a list of all the people in your organziaton without any titles. Now mark those employees that have incredible power or influence. Bet they jump off the page, and not because they are in a titled position, but because how, why, when, and where they make the decisions create big changes.

Charles Gibbs of BCBS, a key employee working in a business unit of BCBS that handles ALL the government outsourced IT functions dealing with BCBS activities; he uses the 9Zeros philosophy all the time to keep his decisions on track. For that matter the contract his firm is responsible for is worth $19 billion.

9Zeros influence is good for management to understand. Good for sales to comprehend. Good for strategy when making decisions. Good for understanding the true workings of an organization.