Sterling Performance

In straitened times, perks are a tricky area for employers looking to buoy spirits without busting out massive bonuses.

It would be disingenuous to say pay doesn’t matter. But engaging anyone — from board members to employees — is better done by allowing them to take ownership of strategies, says Richard Donkin in the FT.

The psychology of motivation can elude employers because it taps into irrational behaviour. Financial wins work on a different part of the brain to that controlling altruism and social interaction, according to Ori and Rom Brafman’s book, Sway, the Irresistible Pull of Irrational Behaviour.

They quote a study at Duke university in North Carolina, where two groups of students took the same business exam, but one group was offered 2.5 cents for every correct answer.

The unpaid group scored higher on the tests — the reward in this case acted as a disincentive, probably because it was a risible amount. It would be like a friend offering you money to help them move: you’d probably be insulted rather than grateful.

It’s a question of what your incentives tap into — someone’s financial interests or, say, a sense of loyalty. Sometimes the most simple perks work just as well, if they play on the non-financial motivations.

Donkin also notes the value of “speedy recognition” through relatively low-cost rewards — breaks, use of the company Jag, a bottle of wine. This is still money, in some cases — he quotes Projectlink Motivation, which offers vouchers and ‘supercheques’ to high performers as part of its service. But these tend to be more affordable one-offs that presumably give still someone the gambling-high of a big financial win.

I was intrigued by the national differences between gifts people award themselves via Projectlink vouchers. According to the company’s managing director, Stephen Humphreys, the French like a good bottle of wine, the Spanish a cured ham. And the Brits? We slap ourselves on the back with brand new paper shredder.

No-one dies wishing he’d spent more time in the office, says Snakes & Ladders picking up on HBR’s article, ‘When Virtue is a Vice’.

People tend to place a higher premium on work than play. But authors Anat Keinan and Ran Kivetz have done research that suggests you’ll forgive yourself faster for an indulgence today than if you deny yourself happiness for too long.

They asked current college students and alumni how both groups felt about how they’d spent their winter breaks. The alumni who’d not travelled or splashed their cash had lingering regrets — they lasted longer than those of the students who’d spent more freely or studied less diligently.

Likewise, indulgent business people were less sorry about having slacked off as time went by, while those who’d been more conscientious felt twinges of regret over the fun they’d missed.

People who refuse to remove their hairshirts suffer from ‘excessive far-sightedness or hyperopia’. They are what author Tal Ben-Shahar would call ‘rat-racers’, working hard and postponing the fun till later. (There’s a sad end-note to Lord Maclaurin’s ‘Tiger by the Tail’ that should be a cautionary tale to any hyperopic CEO.)

Keinan and Kivetz have a marketing message, too. They asked 57 shoppers to anticipate how they’d feel about two different types of purchase. One would be an indulgent buy to make them feel happy; the other a cheaper item that would allow them to put a bit aside for a rainy day.

Those who expected to feel immediate regret bought the low-end product. The authors suggest anyone marketing expensive goods should try asking consumers to think longer term about how they might feel if they forego an indulgence — “For instance, a travel company might ask customers to consider how they’ll feel about having passed up a family vacation package once the nest is empty.”

It seems pretty manipulative. But I wouldn’t be surprised to see a slew of ’seize the day’ marketing messages as the credit crunch deepens.

Is this a blow for equality? It transpires that in the UK, the office sex pests are most likely to be ladettes.

According to research by Peninsula, a Manchester law firm, 77 per cent of over 2,000 male employees surveyed had been sexually harassed by a female colleague — and had suffered in silence, unsure if discrimination laws applied to them. Two thirds of those surveyed felt that the office was no place for innuendo and banter, either.

Tellingly, 85 per cent of employers admit they are less likely to take a harassment complaint as seriously if it’s come from a man.

On the plus side, this surely spells the end for those nauseating Diet Coke ads. Read the rest of this entry »

He’d said he was going to go at the end of June, and as good as his word, Sir Alan Sugar’s given over the day-to-day running of Amstrad to plain Alun Webber, the managing director.

The Hackney-born entrepreneur founded Amstrad at 21 and last year sold the set-top box business to BSkyB for £125m, netting £34.5m and bringing his personal fortune to an estimated £830m.

Sugar will concentrate on other interests including computer business Viglen, Jersey-based investment vehicle Amshold, and his lucrative (well, in better times) property holding, Amsprop, whose portfolio includes the old IBM building on London’s South Bank and which is apparently run by Sugar’s son, Daniel. There’s also the little indulgence that is Amsair, a private jet company that must be smarting from high fuel prices, if not declining custom from its high-net worth client base.

But Sugar will always have his TV appearances to fall back on and will be back for another round of firings in next year’s Apprentice.

For John Naughton, it’s probably good riddance. He classes Sugar among the corporate world’s “vulgar, undisciplined, ego-maniacal brutes” who allow their businesses to become vehicles for their “infantile personalities”.

Does Sugar deserve such a drubbing? He may not be the most subtle boss on the block, but he represents a charismatic and no-nonsense entrepreneurial type that’s quickly going the way of the Dodo.

Two of Amstrad’s four senior managers have worked with Sugar for a collective 43 years — how bad can he be? And, cynicism notwithstanding, it’s unusual for a tyrant to attribute his company’s success to its “talented and loyal team”.

Egotistical? Possibly. Brash? Certainly. But after Sugar, there’s only Branson to claim the role of big business personality. Doesn’t business need a few larger-than-life characters — or are they part of a model that’s no longer sustainable?

Everyone seems to be talking about talent management at the moment. It came up as a priority for at least 50 per cent of Ashridge’s Management Index of important trends, driving the business school to launch a course to help managers frame the business case and avoid common pitfalls.

At Ribbon Farm, Venkatesh Rao takes a stroll through nine flawed talent management theories to explain why they don’t work. And Tammy Erickson identifies the top 10 talent management challenges.  To her list, I’d add a couple more.

First, the definition. What exactly do people mean by talent management? Is it about identifying and nurturing high-flyers, or helping all of your people to develop their particular skills?

The general assumption is that talent management is an enabler, while performance management is more about setting goals and monitoring their delivery.

But beyond that, there’s a muddle as to what is meant by talent and where it talent resides in the business. Is it the anointed few, or, in the right managerial hands, the many, the any?

Done badly, there’s potential for a massive rift to emerge between the ‘talented’ — the ‘hi-pos’ (high potentials) — and the ordinary, tellingly defined recently as as ‘the po-pos –passed over and p***ed off’.

It’s very dangerous to single out the stars in an organisation to the exclusion of all others. There are far more ‘utility players’ on most teams than standouts, for one thing.

It goes against the ‘enabling’ aims of talent management, for another. If you make a big deal of a select few, there’s every chance you’ll have a clutch of demanding and difficult divas in one corner and the disenfranchised masses in another.

It’s also bad for business, says Professor Robin Stuart-Kotze, chairman of Behavioural Science Systems. He points to the automobile industry as proof. “General Motors, Ford, Chrysler — they struggle while Toyota continues to grow revenue and profits, because Toyota listens to everyone’s views. It gets literally hundreds of thousands of ideas from employees at all levels — and it accepts and implements something like 90 per cent of them.”

The assumption that some people are born talented and some aren’t overlooks the fact that behaviour, rather than personality, drives performance, he adds.

The word ‘talent’ is  part of the problem. Says Stuart-Kotze: “It has a sprinkling of star dust about it and implies that so-called ‘talented people’ are very special, but talent is a relative concept.”

Talent’s also apt to wax and wane. Talent management theories often presuppose a mystical group of Alpha employees whose work is consistently stellar. Individual and team behaviour is cyclical — like stock tips, ‘talent’ tips should be taken with the same caveat — that performance can go up or down.

Yet, it’s a fact that some employees will rise to the challenge more often and more ably. It’s an issue managers are going to have to learn to deal with in a businesslike manner.

“Culturally, relationships are more important than tasks to UK managers, so we shie away from having respectful, frank, potentially difficult conversations,” says Penny de Valk at the Institute of Leadership and Management.

Turns out it’s not the word ‘talent’ we need to be worrying about after all. It’s our old friend ‘management’.

A rising tide floats all boats, but in today’s economy companies face a falling tide and choppier waters.

Last week, for example, Ilva’s UK operation went into administration, continuing the poor performance of furniture retailers (see also SCS and Land of Leather). Few companies are immune — even Nike’s shares fell after it reported flat sales growth in the US.

There are a few ways to succeed in today’s tidal conditions:

• Be the lowest-cost supplier of everyday essentials. Last week, for instance, it was reported that discount food retailers Lidl and Aldi are currently delivering double-digit growth.
• Have a unique, distinctive and valuable customer proposition. Apple continues to deliver growth as a result of its stream of innovative and desirable products which are able to transcend normal economic realities.
• Adapt to the new conditions quickly.

For most of us, the only real option is three — we must find new ways to succeed. As Charles Darwin wrote, “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”

Reducing cost is essential, but is unlikely to be sufficient. SCS, Ilva and Land of Leather all operated lean, low-cost business models, but this has not been enough when they reached the economic low tide.

You must also find new ways to grow. There are three mindsets that are critical to delivering growth in any conditions.

1. Create success for your customers. It is often easier to grow by selling more to your best customers than by seeking out new customers. What new forms of value could you create and deliver that will benefit your best customers and strengthen the relationship between the two of you?
2. Focus on action. Amazon.com has transcended the dotcom boom and bust cycles by continuously developing, testing and delivering new benefits for customers. It’s what CEO Jeff Bezos called “the institutional YES!”
   “People say ‘We’re going to do this. We’re going to figure out a way’,” Bezos told Harvard Business Review.
3. Accept risk. In many ways doing nothing is the highest risk option for many companies. In any case, as management writer Peter Drucker once wrote, “People who don’t take risks generally make about two big mistakes a year. People who do take risks generally make about two big mistakes a year.”

What other strategies help your organization sail on through today’s tricky tides?

177,000 people, 100,000 acres, 700 acts, 80 stages and 3,000 loos, rain forecast all weekend — it must be Glastonbury.

Now in its 28th year, it’s also the perfect example of a sustainable business and rare proof of good project management in action. An audit last year found that it cost £21.2m to stage, but made £52m in revenue, says Supply Management.

Main costs
The acts: £2.5m
Staffing: £1m
Clean up: £1m
Donations to charity: £1.5m

What it does really well

Buys locally Over half of 2007’s £20.2m spend went to suppliers in the south west and £4.5 specifically to the Mendip region where the festival is held. Local suppliers also keep 800 festival stallholders from running out of stock.

Uses its trusted supplier network It encourages traders to use Glastonbury’s recommended suppliers in a virtuous circle that grows stronger year on year.

Manages waste It composts post-festival waste and shipped the five tonnes of wellies left behind to farmers in Senegal. In partnership with Milletts, it’s giving out £400,000 of biodegradeable tent pegs made of potato starch.

Uses volunteers Music fans will probably be happy to don a green helmet and act as a nuisance monitor if it means access to the festival.

Seeks out low-energy options A wind-powered phone generator offers free, green re-charging for festival goers.

Controls the numbers Gripes aside, the ticket cost (£155 this year) and limits on how many each individual could buy keep it sustainable. Read the rest of this entry »

The Workplace Law Network explains how the draft Equality Bill, ‘Framework for a Fairer Future’, could affect UK employers and their teams.

It aims to “de-clutter” complex discrimination laws and bring them together under the heading of ‘Equality Duty’. It also zeroes in on weak spots in those current rules — ageism, homophobia and disability discrimination are still going unchecked, according to Equality Minister Harriet Harman.

Key proposals

• Employers to report on equality matters such as pay and diversity. (According to Francis Gibb, Harman was pushing for compulsory pay audits.)
• Positive discrimination OK for for women or minority job candidates if it comes down to a ‘tie-breaker’.
• No more ageism in the provision of services.
• Employers cannot outlaw discussion of pay.
• Tribunals can rule for the benefit of not just an individual, but the whole workforce of a discriminating employer.
• The government will investigate how multiple complaints can be brought — say, if someone claims discrimination as a disabled woman.
• Public-sector purchasing will promote the equality agenda through through procurement.

It’s all voluntary — at least for now — so employers’ organisation the CBI is broadly approving.

But all this talk of openness makes me think of Trendwatching’s Transparency Tyranny.

Surely all this disclosure can go too far. Or is it just a case of careful training, so that line managers can handle the tricky conversations that ensue when X finds out that Y is earning more — not because of some unfounded prejudice, but because Y is better at their job.

As entrepreneur John Timpson once said, not everyone is equal. (He even admits to ‘discriminating against drongos’.) But perhaps it’s not the employer’s place to exacerbate those inequalities any more than necessary. As you can tell, I’m on the fence on this one.

But employees up for letting it all hang out can have their say, too, by visiting Glassdoor.com — which reveals what employees think of companies, what they pay and how the CEO is rated.

British consumers are fed up with the high cost of living, according to McCann Erickson’s annual ‘Mood of Britain’ survey, written up in Marketing. And brand managers, marketers and advertisers may need to re-think campaigns to match the shift in sentiment.
The economic situation is now the biggest influence on UK consumers, with the high cost of living as the UK’s biggest gripe — consumers are increasingly concerned as they see it outpacing salary rises.

It’s not yet directly affecting the UK’s love of shopping, but the research into what makes consumers angry indicates that it soon will — and then they will want something different from their favourite brands.

“Attitudes toward debt are changing. The excesses of the ‘living on credit’ lifestyle are becoming more frowned upon and could… soon become as unacceptable as smoking,” says the article.

Other targets for British ire include

• Gordon Brown
• Banks
• The environment
• Crime
• Immigration

How brands should respond

• Add value Brands that offer more value for consumers will earn favour — Sainsbury’s ‘Feed a family for a fiver’ or Lloyds TSB’s AirMiles mortgage. Environmental campaigns should help consumers save money while saving the planet.
• Be sincere Messages need to convey the appropriate level of gravitas, with financial services firms and banks such as Barclays already opting for more earnest campaigns.
• Tout your history Brands with heritage offer the comfort of solidity to consumers. Read the rest of this entry »

Apparently, something called ‘achievement amnesia’ is blighting jobseekers’ chances of getting an interview.

Research by iProfile has found a mis-match between what employers look for on a CV and what job applicants deliver.

Employers consider work-based achievements essential to a good CV. But job applicants spend more time tinkering with the design than working on the content.

They often dash off their CVs in less than two hours and, in their haste, struggle to recollect significant achievements or learning experiences over six months’ old.

iProfile interviewed 200 employers, of whom 73 per cent claimed they’d rejected job applicants because they’d failed to highlight workplace achievements.

They also claimed that applicants who sell themselves convincingly are in a position to ask for higher starting salaries — 51 per cent of employers said a strong seller could ask for five per cent more.

Start keeping a record of career milestones, suggests iProfile (not surprisingly), using new online sites that allow you to update information continuously.

iProfile has a vested interest in changing the way we compile CVs, but it asks a valid question — is the old-fashioned job resume dead?

Is there a better alternative?