Can you prove the ROI of employee engagement? According to a Gallup survey, companies with world-class engagement have 3.9 times the earnings per share growth rate compared to their competitors with lower engagement. The challenge is planning a route to get employees engaged.
“Our research has shown that there are three buckets — the engaged group, the disengaged group and the people in the middle. Ideally, we want all employees to be engaged. The first step is to move the disengaged group to the middle bucket,” says Kelly Pacatte, MBA, SPHR, senior human capital consultant at TriNet, Inc.
Smart Business spoke with Pacatte about strategies to move workers forward to becoming engaged employees.
How can companies motivate disengaged employees toward that middle bucket?
There are four basic tips to follow:
- Pay according to market value. Many executives don’t like to hear it and would rather offer training or take similar steps. But paying accordingly is critical in moving disengaged employees up.
- Limit organizational reductions in force. While hard to do, it’s impossible for employees to become engaged if they fear losing their jobs.
- Manage organizational changes. Whether a market change or leadership change, proactively communicate it to move disengaged workers into the middle.
- Increase trust. Make sure all employees see the value in their company and believe in the brand. Executives must be visible and accountable.
While paying accordingly is important, pay isn’t necessarily a motivating factor; it’s a baseline. Employee motivation is like Maslow’s hierarchy of needs. People need to be taken care of, have the supplies needed to do the job, know what their job is and be paid accordingly. Once those baseline needs have been met, you can move employees to becoming engaged.
Does engagement strategy differ by company?
To have an engaged workforce, every company needs to deliver key components:
- Leadership that clearly communicates goals and where the organization is headed.
- Leadership that connects with employees.
- The jobs employees are doing must provide meaningful work.
Implementation varies by company, but those are factors that all companies use to increase engagement. Sometimes, that may mean increasing employee development or focusing on mentoring opportunities; the ways these are done differ by company and industry.
How do you decide which programs will accomplish these goals?
The process starts with an employee engagement survey to determine what areas need work. The survey provides a baseline for how engaged the workforce is. To achieve best results, develop the survey with experts from a third party who understand what motivates employees. In addition, employees are more likely to respond because there’s no fear of retaliation.
When you receive the results, company management needs to realize you can’t change everything. Based on responses, develop a plan for areas that require immediate attention. If there’s something that can be done, work on a plan to change that. If not — and this is key — explain why. It’s important for employees to know that action is taken regarding a survey. Maybe there was overwhelming feedback that more training is needed, but you don’t have the ability to do that right away. Senior leadership needs to let employees know they were heard. While leadership can’t work on a development strategy immediately, it will take specific steps to deliver on the request.
If you’re doing a survey, some changes have to be made. Employees don’t want to spend time filling out a survey, only to find out nothing has changed.
After you implement changes, measure to see if there’s been an increase in revenue or productivity. Generally, a baseline is measured before the survey and six months to a year later to see if those factors increased.
Engagement takes a long time. But if you are genuinely trying to increase employee engagement, you will get a return on your investment.
Kelly Pacatte, MBA, SPHR, is a senior human capital consultant at TriNet, Inc. Reach her at (972) 789-3960 or email@example.com.
See how companies grow their business and engage their employees, or follow us on Twitter: @TriNet.
Insights Human Resources Outsourcing is brought to you by TriNet, Inc.
Read this quote and think about whether it sounds like something you have heard before:
“Stay under the radar. Do enough just to get by. Don’t make waves. Get the most out of your benefits such as sick time. Do only what you’re asked to do. If you are asked for more, do just enough to meet minimum expectations.”
This is an employee who is completely disengaged. Instead of leaving the organization, which might be a blessing, this employee will “retire in place.”
Employees who retire in place substantially impact the bottom line, as well as the satisfaction of other employees. One bad apple, if not addressed, can spoil the bunch.
There are ways to counter such an attitude, however, and even turn such an employee into a highly engaged, stellar performer. The research on engagement highlights a number of actions that can help employees feel more connected and motivated, and avoid “retiring in place.”
These include the following:
- Aligning employees with the goals and mission of the organization
- Regularly sharing information from top leaders, and being sincerely interested in employees
- Providing opportunities for employees to improve skills and abilities
- Offering regular feedback on performance
- Allowing input into decision-making
- Encouraging innovative thinking, and an acceptance of risk
- Building and sustaining a positive relationship between the manager and each employee and within teams.
Consulting firm Towers Watson, formerly Towers Perrin, has highlighted a number of characteristics demonstrated by engaging leaders. The first is high emotional intelligence.
Daniel Goleman, in his book “Emotional Intelligence,” noted that individuals with high emotional intelligence are skilled in understanding, interpreting and responding to emotions. They effectively deal with social and emotional conflicts and appropriately manage emotions to achieve best outcomes.
Additional characteristics of engaging leaders include great communication skills, a coaching/involvement orientation, the ability to inspire others and demonstrating authenticity and humility.
Use more than one approach
At the same time, employing engaging actions alone is not sufficient. Leaders cannot approach all employees in a cookie-cutter manner and assume that they all will respond in the same ways, or even perceive leadership actions as having the same intent and meaning.
The key to more effective engagement is looking from the inside out — how and what employees perceive is their reality. What is encouraging to one person is discouraging to another.
One person’s recognition is another person’s discomfort. What is motivating to one is demotivating to another.
The role of perception
The reality is that the value of an employee’s relationship with a leader, a manager, peers, and the organization itself is based on many factors. The most critical is the role of perception.
Organizations can do a much better job of managing perceptions. In his article “Coming to Grips with Organisational Values,” Vijay Padaki noted that a consistent set of practices over time are the organization’s values. Interrelated values that are internally consistent are the organization’s value system, he wrote.
If leaders at all levels take a sincere interest in employees and understand their perceptions, these leaders can do a better job of connecting personal needs and values with those of the organization. Leaders often have best intentions, but employees can be left feeling not heard and unappreciated.
Without understanding the context of what employees believe and feel, leaders run the risk of misaligning and discouraging employees. Without leaders consistently demonstrating their values, employees will perceive a different reality than possibly intended.
Jay Colker, DM, MBA, MA is core faculty for the master’s in counseling and organizational psychology program at the Adler School of Professional Psychology. He also maintains a human capital consulting practice and may be reached at firstname.lastname@example.org or at (312) 213-3421.
Engaged employees know your company’s expectations and believe their job descriptions implicitly include exceeding them. They use their talents to excel, connect well with colleagues and customers, and move their companies forward.
To learn more about transforming engagement levels in the workplace, Smart Business spoke with Diana Hendel, Pharm.D., CEO of three MemorialCare hospitals in Long Beach. MemorialCare is recognized as one of only 32 companies worldwide to receive the 2013 Gallup Great Workplace award.
How can you recognize an engaged employee?
When engaged employees walk past visitors in our hospitals’ hallways they make eye contact, smile and stop to help people find their way. Disengaged employees hurry by, believing that’s not in their job description. Engaged employees are more productive, customer-centric, safe and successful. They are 3.5 times more likely to be thriving in their lives, experience better days and have fewer unhealthy days. We see a direct correlation between high employee engagement and the service satisfaction scores we receive from our patients and their families.
What’s the first step to improve engagement?
Creating a work environment that values people and aims to ensure each employee has an emotional connection to the company’s mission is at the heart of sustaining employee engagement. Become an active partner with your employees to maintain or improve their health and wellness. Create an environment that makes being healthy easier, with nutritious on-site food options, walking challenges, weight reduction programs, gyms, smoke-free campuses, activity days, health information and more.
Encourage teams to take walking rather than sitting meetings, take activity breaks and make walking workstations available. In MemorialCare’s case, implementing these core aspects of a wellness program resulted in 77 percent of our employees reporting that their organization makes an effort to help them improve their health.
What are the next steps to partnering with employees?
Once you’ve implemented the foundation of a wellness program, the next step is to provide your employees with the knowledge they need to impact their risk factors for chronic disease. Understanding the key biometric numbers of blood pressure, blood sugar, cholesterol and body mass index, and their connection to heart disease and diabetes can help individuals lower their risk. Chronic diseases like high blood pressure, diabetes, asthma and depression are responsible for two-thirds of the total increase in health care spending, so reducing these conditions can help lower health care expenses.
Actively partner with employees who need the most help managing chronic conditions. The latest evidence shows that the support of a team including a wellness coach, nurse, dietician and physician can give individuals with chronic conditions what they need to make important changes.
MemorialCare partners with our employees with chronic conditions to make long-lasting lifestyle changes, lessen complications, improve outcomes, and lower medical and pharmaceutical costs through our program, The Good Life — In Balance. With 93 percent participant retention, the program has led to significant improvements in participants’ blood glucose and blood pressure.
How can employers improve the workplace?
Help identify key factors in moving the dial on your employees’ engagement by participating in a survey, like those initiated by Gallup. These surveys compare your results with other companies so you can learn where you excel or need improvement. There is a direct connection between investing in employees’ wellness and achieving internationally recognized employee engagement levels. By creating a culture where well-being is valued, you can improve health, morale and productivity, while reducing absenteeism as well as the costs of workers’ compensation and health
Diana Hendel, Pharm.D, CEO, Long Beach Memorial, Miller Children’s Hospital Long Beach, Community Hospital Long Beach. Reach her at email@example.com.
Website: See more health and wellness information, podcasts and videos.
Insights Health Care is brought to you by MemorialCare Health System
Engaged employees know your company’s expectations and work hard to meet and exceed them. They use their talents to excel, drive innovation and move their companies forward.
To learn more about transforming employee engagement levels in the workplace, Smart Business spoke with Barry Arbuckle, Ph.D., president and CEO of MemorialCare Health System, recognized as one of only 32 companies worldwide to receive the 2013 Gallup Great Workplace award.
What do engaged employees do to improve the workplace?
Imagine a candy wrapper lying on the floor of your business’s lobby. An engaged employee picks it up and puts it in the trash. They are 100 percent invested in helping your organization succeed. A disengaged employee ignores it and walks by. An actively disengaged employee was the one who threw it there to begin with.
According to Gallup, the average ratio of engaged to disengaged employees in their database of health care organizations is 4-to-1. Engaged employees are more productive, customer-centric, safe and successful. They are 3.5 times more likely to be thriving in their lives, experience better days and have fewer unhealthy days. We see a direct correlation between high employee engagement and the service satisfaction scores we receive from our patients and their families.
How do you improve employee engagement?
Creating a work environment that values people and aims to ensure each employee has an emotional connection to the company’s growth or mission is at the heart of sustaining employee engagement.
Become an active partner with your employees to maintain or improve their health and wellness. Create an environment that makes being healthy easier, with nutritious on-site food options, walking challenges, weight reduction programs, gyms, smoke-free campuses, activity days, health information and more. Encourage teams to take walking rather than sitting meetings, take activity breaks and make walking workstations available. In MemorialCare’s case, implementing these core aspects of a wellness program resulted in 77 percent of our employees reporting that their organization makes an effort to help them improve their health.
How do you become a partner in your employees’ wellness?
Once you’ve got the basics of a wellness program in place, help provide your employees with the knowledge they need to impact their risk factors for chronic disease. Understanding the key biometric numbers of blood pressure, blood sugar, cholesterol and body mass index, and their connection to heart disease and diabetes can help individuals to lower their risk. Chronic diseases like hypertension, high blood pressure, diabetes, asthma and depression are responsible for two-thirds of the total increase in health care spending. Reducing these can help lower health care expenses.
Actively partner with employees who need the most help managing chronic conditions. The latest evidence shows that the support of a team including a wellness coach, nurse, dietician and physician can give individuals with chronic conditions what they need to make important changes. MemorialCare partners with our employees with chronic conditions to make long-lasting lifestyle changes, lessen complications, improve outcomes, and lower medical and pharmaceutical costs through our program, The Good Life – In Balance. With 93 percent participant retention, the program has led to significant improvements in their blood glucose and blood pressure.
How can employers improve the workplace?
Participate in a survey, like those initiated by Gallup, to help identify key factors in moving the dial on your employees’ engagement. These surveys compare your results with other companies, so you can learn where you excel or need improvement.
There is a direct connection between investing in employees’ wellness and achieving internationally recognized employee engagement levels. By creating a culture where well-being is valued, you can improve health, morale and productivity, while reducing absenteeism, and the costs of health benefits and workers’ compensation.
Barry Arbuckle, Ph.D., is president and CEO of MemorialCare Health System. Reach him at firstname.lastname@example.org.
Website: See more health and wellness information, podcasts and videos.
Insights Health Care is brought to you by MemorialCare Health System
Business leaders understand the value of employee engagement, yet many have been slow to implement plans within their organizations.
“It’s interesting that 75 percent of leaders have no engagement strategy, even though 90 percent say it has a positive impact on business success. So while they think it’s important, they’re not actively engaged in affecting change. I think they don’t fully understand the impact it can make on the bottom line,” says Beth Thomas, executive vice president and managing director of consulting services at Sequent.
She says employee engagement is about creating an environment where employees understand the company’s values and what is expected of them, and are committed and dedicated to their work.
“Employee engagement is probably the biggest reason why companies are successful. Engaged employees generate 40 percent more revenues than disengaged ones and are 87 percent less likely to leave an organization,” says Thomas.
Smart Business spoke with Thomas about ways to boost employee engagement and the impact it can have on an organization.
What can companies do to foster employee engagement?
There are five keys to creating conditions for thriving, engaged employees:
- Empowering employees. No one wants to be micro-managed; they want to feel that what they bring to the table is valued. They were hired for a reason — let them do that job.
- Sharing information. People get anxious and disconnected when there are a lot of closed-door leadership meetings. Create a connection by bringing employees into the growth of the company with quarterly or town hall meetings.
- Minimizing toxic behavior and negative feedback. Hire the right talent that will fit the culture and bring positivity. Then hold employees accountable to the values and expectations of the organization.
- Offering performance feedback. Everyone wants to know how he or she is doing, and it shouldn’t be just once a year. Empower them and let them know they’re in charge of their careers, and can move forward if they are motivated and dedicated.
- Appreciating employee value through reward and recognition. Have an employee of the month award and profile that person because people will want to emulate what they are doing. Make it very clear what is needed in order to be successful and profile those behaviors, characteristics and performance standards so everyone knows what is valued. That includes recognizing all the qualities that are valued; it doesn’t have to be based on the same performance. An employee might not be a high-powered salesperson bringing in six-figure deals every month, but might be the most positive person in the office and contributes to the organization’s culture.
Does employee engagement start with the hiring process?
Absolutely. When you are hiring people, it’s just as important to assess their ‘soft skills’ as their knowledge, skills and abilities. It’s more difficult to train people to be team players. Having the personality to go above and beyond to meet a customer’s needs or to be a trusted adviser is a soft skill that is largely innate and takes a lifetime to build. It’s important to evaluate those qualities to ensure they match the organization’s culture beyond the skills they bring.
Is it the workplace culture that promotes engagement?
Yes, it’s about the culture, but also all the employees and the leaders. It’s important for employees to ‘hang with the gang that gets it’ — those people at work who are successful — steal shamelessly and emulate what they do. Conversely, when employees hang with the people who are negative and contribute to toxic behavior, leadership sees them as being one of them, even if they’re not participating in those activities.
Engagement goes hand in hand with happiness. In a work context, happiness is about finding what in your career makes you happy. While it may sound trite, happiness leads to engagement in your work, which motivates you to give 110 percent or more discretionary effort. This is what contributes to business success, not only boosting your own career but at the same time increasing the company’s bottom line. Who wouldn’t want that?
Beth Thomas is an executive vice president, managing director of Consulting Services and author of “Powered By Happy” at Sequent. Reach her at email@example.com.
Event: Get your company “Powered by Happy” with the employee engagement workshop.
Insights HR Outsourcing is brought to you by Sequent
Your company’s goals aren’t just a to-do list of action steps, they’re a vision of where you want to be. Employee engagement can be a way to make your business exciting while unleashing the creativity of your intellectual capital.
“It can seem overwhelming if you don’t have experience setting goals, especially if you’re a business owner who is really working in business,” says Ricci M. Victorio, CSP, CPCC, managing partner at Mosaic Family Business Center. “So, it’s not a sign of weaknesses to ask for help and bring in someone who knows how to coach you, train your organization and facilitate those discussions. If it can move your business forward, energize it and make your life easier so you can enjoy being in the business, it’s really worth it.”
Smart Business spoke with Victorio about what steps to take when setting goals and following through to ensure your vision comes to fruition.
How should business owners set goals?
Once the company’s growth and revenue goals have been established, ask your team for their ideas regarding how to get there. Engage your employees in building the road map to success.
Create breakout groups to work on an annual Strength, Weakness, Opportunity and Threats (SWOT) analysis. By graphing these and seeing correlations, employees help prioritize the two to five opportunities that will significantly help your company. With employees sufficiently motivated to take full ownership in the idea, they can then work in teams to help see the project through development and ultimately reach the goal, which is done in addition to the day-to-day duties.
How can you tell employees aren’t engaged?
There will be complacency and all kinds of reasons, excuses and blame for why employees can’t accomplish the goals set before them. They sit around waiting to be told what to do. There’s a sense of isolation and feeling that nobody is paying attention. You’ll see flat production and even downward trends, as well as higher absentee rates.
Lead employees, rather than dictate assignments, and then get out of their way. A leader removes obstacles so the team can achieve the goal. By giving employees authority, you show respect for their intelligence and ability to solve problems. Successful organizations recognize intellectual capital goes beyond the executive circle. If all employees engage in the company’s vision, regardless of their level or position within the organization, then leadership trickles down so everyone contributes to furthering the company’s goals, which are their goals, too. Actively engaged employees do more than you would have asked and hold themselves accountable to goals they helped set.
In addition to treating employees with respect, acknowledge what’s being done right. Recognize that if there’s failure, it’s more the manager’s failure than the employee’s.
Once you’ve set goals, what’s the key to keeping on track throughout the year?
At minimum, hold quarterly or monthly check-ins that provide opportunities to make course corrections. With the business plan and goals, you can create an action spreadsheet to see progress and identify what’s stopping forward movement. The more intimate the check-ins, the more effective they’ll be.
Also, communicate back to employees to keep them engaged. Some companies have adopted a report card with updates on strategic projects. The strategic projects that change the way you do business are exciting, creative and generate a lot of energy.
How can you learn how to lead this way?
There are books and successful examples, and you can work with a coach who knows the process, can motivate people and teach managers how to lead meetings. It’s hard to facilitate your own meeting and take an objective, honest look at how you’re doing.
Setting and achieving goals doesn’t have to be difficult. Once you put these practices in place and overcome the learning curve, life will be easier. You won’t have to spend all your time feeling like you are grasping at loose ends — and you’ll begin to see the grand design weaving together into a cohesive and beautiful creation.
Ricci M. Victorio, CSP, CPCC, is managing partner at Mosaic Family Business Center. Reach her at (415) 788-1952 or firstname.lastname@example.org.
Insights Wealth Management & Finance is brought to you by Mosaic Financial Partners
When visiting one of InfoCision’s offices, you’ll notice more than the tables, chairs and water cooler found in a typical workplace. It is not out of the ordinary to pass a yoga class practicing downward dog, a physician scribbling a prescription or a preschool class reciting the alphabet.
While these scenes may be out of place in many employers’ offices, InfoCision has worked hard to make them a staple. The company recognizes its employees are the heart of its business, so it focuses on recruiting and retaining them with a variety of amenities and benefits, says Kim Murphy, vice president of employee benefits at InfoCision.
"We strive to give our employees a work-life balance," Murphy says. "We want to provide opportunities for employees to handle things like exercising at work so when they go home, they can focus on their families. And we believe that contributes to a happier, healthier employee."
- InfoFitness centers: These 1,500- to 2,000-square-foot gyms include top-of-the-line equipment such as treadmills, elliptical machines and recumbent bicycles. The centers also offer classes such as aerobics or yoga, and are open from 7 a.m. to 11 p.m. They are free for InfoCision employees and family members covered under the company’s health plans. Many InfoCision employees and even entire departments attend classes together. "My department works through lunch, then at 4 p.m. we all go down as a group," Murphy says. "It's nice to have that support — on the days when you don't want to go, you have your coworkers pushing you, and it makes it a lot easier."
- InfoWellness clinics and programs: InfoCision provides on-site doctors for both employees and family members regardless if they participate in its health plans. The company also has a prescription concierge service so employees don't need to run out to pick up their medications. Other wellness programs include free smoking-cessation programs and subsidized weight-loss programs.
- InfoKids Early Learning Center: This fully licensed child care center at InfoCision's corporate headquarters in Akron can care for more than 90 children ages 6 weeks to 14 years. The center offers summer programs, two infant rooms and toddler and preschool rooms, play areas, educational toys and computers. It provides a creative curriculum education model. InfoCision's satellite call centers offer subsidized child care options.
- InfoCision Management Corporate University: Geared toward salaried staff who have a clear path of advancement within the company, IMCU offers free or discounted workforce development through on-site programs as well as outside classes and workshops through the University of Akron and other local institutions.
- Employee assistance program: InfoCision provides employees with a toll-free number to call for financial advice or free counseling sessions for anything from a death in the family to a divorce. The employee receives recommended local counseling services, and he or she can use the services as much as he or she needs.
- On-site delis: InfoCision's Café 5 on-site delis offer healthy hot and cold meals, snacks and gourmet coffee. In addition, InfoCision's vending machines now offer healthy choices.
InfoCision also offers a comprehensive benefits package for both salaried and hourly employees, Murphy says. These benefits are available upon hire and include health care, vision and dental plans, paid holidays, free life and disability insurance, paid personal and vacation time, quarterly bonuses, paid training and tuition reimbursement. InfoCision also offers 401(k) participation after 90 days of employment.
Aside from amenities and benefits, InfoCision also strives to create a work environment in which employees can excel. "For as big as we’ve gotten, we still have a family feel," Murphy says.
"It starts when you enter the front doors and the receptionist greets you like you're family even if you've never been here before. We also have a newsletter for employees every month, and our executives speak regularly to our employees and are open for questions or available to talk afterwards. That open communication really makes a big difference."
InfoCision also has a group that travels to its facilities and speaks with employees about what's happening at the company and in the workplace. This program, in conjunction with an employee suggestion box, is meant to provide an open forum for employees to voice ideas or concern.
"We have an open-door policy," Murphy says. "Our employees have the opportunity to speak to not only to their supervisors and team leaders — as our supervisor to communicator ratio is one to nine — but our executives as well. That's not something that's typically found at other companies, but we believe it is a key part of recruitment and retention."
For more information on employee benefits and amenities, contact Kim Murphy at email@example.com or visit www.InfoCision.com.
The health care industry is slow to embrace change, William Day says.
“We're stuck in a rut,” says Day, president and CEO of St. Barnabas Health System. “Here (at the 2011 Ernst & Young Strategic Growth Forum), I've met with several health care people and it's exciting to hear what is going on, but if you look at the number of people here in health care, there aren't that many. What’s that say? The business community doesn't think we are entrepreneurial enough — and maybe we’re not.”
But Day has worked against that trend during his 44-year tenure at St. Barnabas, a nondenominational, not-for-profit health care system with several campuses located near Pittsburgh. He has significantly grown the 670-employee organization in physical size, the variety of services offered and the amount of free care given to those in need.
Smart Business sat down with Day at the 2011 Ernst & Young Strategic Growth Forum to discuss how he’s managed to innovate in his industry and engage patients and employees in the process.
Q: Where do you get ideas for innovation in health care?
What services are (customers) getting that we are not providing and that maybe we could provide better than somebody else? What services are not health care that we know they need?
I had dinner last night with a lady and her husband and this lady's father, who lives in our retirement building. (The son-in-law) said, ‘I’ve got one complaint. … Believe it or not, my father-in-law is really into computers. … Can you get a better computer connection?’ And I said, ‘I'll be on the BlackBerry tonight and you will be hearing from somebody tomorrow.’
If you have an individual customer who needs some help, don't blow it off when there's only one person. … We listen, and then do something about it.
Also, I like to read, and I like to read about success. What have other people done that's been successful, and is there some application?
Q: Where can you look for ideas in other industries?
There are lessons to be learned in the hospital business that are in the hospitality business, in this hotel. All we have to do is look around. You and I are in a very comfortable place. It's warm; it's friendly. How many people would say that about a typical hospital? How many would say that about a hospital room?
Is there a better customer service example than the Ritz-Carlton? … They are obviously smart, doing things that we didn't expect them to do.
Q: How do you find talented employees who can embrace change?
We like to grow our own. … We mentor them and we nurture them. And those are OK, a lot of people say that, but it actually has to happen. Reward success and not unfairly punish errors. … We try to motivate and that works most of the time, and that in turn gets back to our customers, to the patient.
There are things I don't know, so I have to trust people who do and then get out of the way. Let them do a good job and come up with innovative ideas to take care of the patient.
We are getting closer and closer with the Pittsburgh Technical Institute. ... I’m on the board there. I've been very impressed with what they are doing with virtual emergency room, virtual intensive care. The way that our future employees are being taught at PTI just excites me because it's going to be better for our customers and our patients.
Q: How do you engage employees in the innovation process?
Almost everybody can be creative. We have to have an atmosphere where they are comfortable doing that and that they can make mistakes. But … we can't make mistakes in health care. That's all there is to it. We can't do it; it's zero tolerance. But to be successful and grow, that's what has to be. There is no substitute for it. So we sit and talk.
Some of the best meetings we've ever had were over a glass of wine or a glass of tea. That's what I think brings people out. … It's off the record. They are free to say to me, ‘Well, we’re not so sure about that.’ I say, ‘OK. Let's sit and talk about it again. What would Ritz-Carlton do?’
How to reach: St. Barnabas Health System, (724) 443-0700 or www.stbarnabashealthsystem.com
One of the most challenging tasks on any CEO’s plate is the ability to embed a simple and systematic planning process into an organization and then effectively execute upon it. All too often, planning occurs in last-minute, deadline-prompted, organizational binges and the result is goals that are not met. Either that, or the planning due dates trump the content of the plan and quality suffers.
In my experience, there are four principles that guide effective planning in the corporate world. These principles were not arrived at easily. But in concert with both a carefully thought out methodology and a detailed planning calendar, they encourage excellence.
Here are the four principles that can more effectively guide your company’s planning process:
Strategize in three key areas
The concept of strategic planning has lost some of its foundational strength in recent years as companies have abused the process and tried to strategize every aspect of their business. When you take this approach, you end up with a lot of confused employees who aren’t sure which plan they are supposed to follow.
Planning becomes more difficult, and as a result, management procrastination increases.
Great strategic thinking is really only needed in three key areas: The development of a go-to-market plan, a people plan and a financial plan. Each person, department, business unit, function and corporate entity should keep their focus on these three areas. All other plans are usually not strategic, but rather, flow naturally from these three key strategic elements.
If you keep the focus narrowed down, strategic plans are more likely to be completed in a timely manner and be well executed. These plans always outperform their labor-intensive, procrastinated, hyper-strategic alternatives.
Plan for three time periods
You should keep three time periods in mind when you’re doing strategic planning: Think about the following year, the following three years and the next 10 years. This last one is most easily expressed if you keep it simple by looking at an easy-to-remember year such as 2020 or 2025
So if you were following this schedule, your 2013 plan would have fairly precise detail, including desired activities. The 2013-2015 plan would focus on your intended three-year results. Then, as you consider your business 10 years out in 2020, you would look to focus on the very best vision for your personnel, departmental, functional, business-unit and entity futures.
Follow the natural order
There is a natural sequence to the order of planning for the future of your business. Start with the heart of your business by looking at your customer and the go-to-market plan. After reaching agreement on this stage, proceed to the people plan. Here, you’ll plan for the knowledge, skills, abilities and people needed to successfully execute your go-to-market plan. Only then should you proceed to the financial plan where financial resources and requirements must be rebalanced.
Live the planning calendar
Ask your CFO and finance team to create a calendar with specific due dates for the planning phases to serve as a timetable for the organization. This will help make planning a natural part of your year and not a binge effort as deadlines draw near.
Clearly communicate the planning process to your leaders so everyone knows what is expected of them and when. Keep this communication up throughout the process, reinforcing the importance of planning and how it is a cycle of business, not something that is ever really finished.
Every company has its own style of strategic planning. When new managers join your team and become part of the process, educate them on your specific planning calendar and budgeting methods, so they can become familiar with your expectations and deliver excellent results.
Finally, on a personal note, make sure you take time to provide encouragement and show gratitude to your people for a job well done. You can never show too much appreciation to your people.
Joseph Slawek is the founder, chairman and CEO of FONA International, a full-service flavor company serving some of the largest food, beverage, nutraceutical and pharmaceutical companies in the world.
When Blake Lundberg heard the news about the NFL ending its deal with his company, he knew it was time for a Hail Mary pass. For 11 years, the Sports Licensed Division of the Adidas Group LLC manufactured licensed apparel and uniforms for the league. But the NFL said a competitor had outbid Germany-based Adidas and its Reebok brand.
The company was about to lose a big piece of its revenue. Some analysts say the NFL job was worth $200 million annually to the Indianapolis facility.
“The lifeblood of the licensed apparel and headwear business is your license with these leagues or universities,” says Lundberg, vice president and general manager. “You depend on those deals; if you don’t have them, you simply can’t survive. It’s that straightforward.”
He was used to changes happening quickly, and this didn’t give him a whole lot of time to find new sources for revenue and ramp up employment to support them before the contract ran out. But the time factor wasn’t the biggest concern ? hot players and hot teams came and went, and to keep in business, usually meant having an ace or two in the hole.
“A product can become pretty obsolete quickly,” Lundberg says. “When Peyton Manning got hurt and he’s not going to play for the year. Or when LeBron James decided to move to a different team. When Barry Sanders retired out of nowhere. Once Michael Vick left the Atlanta Falcons, nobody wanted a Michael Vick jersey.
“The obsolescence of a product is critical. It’s a mix of, ‘I’ve got to have the right finished goods on the shelf and specific players,’ and, ‘I can’t have too many in case they become obsolete based on a player trade, a player retiring or a player getting injured.’”
Fortunately, the division management team had experience with reacting quickly to changes to find solutions.
The most logical route was to take a step back and see if there was some new business that could be developed and to possibly transfer and build up some operations the division could take on from other parts of the Adidas Group.
Lundberg and his talented leadership team had the business acumen to study the company’s strengths and convince Adidas corporate officials to transfer more existing business, such as from the NBA, to centrally located Indianapolis. A big selling point was that the plant could turn around products quickly as compared to other companies that had facilities in foreign countries where it can add weeks to the process.
In addition, some promising new lines were examined. They would be added in previously untapped areas such as high school sports uniforms and apparel, NHL team uniforms, club sports and sportswear connected with the Crossfit Exercise program.
Here’s how Lundberg focused his employees to take on new challenges and drive revenue for the 1,350-employee company.
Focus the managers
A company should really understand its strengths and weaknesses if it wants to succeed and grow. Lundberg was fortunate in that his management team knew it had bench strength ? most members had been in their positions for years and knew how to assess a situation to find a solution fast.
It was no accident that the team had a mixed bag of experienced managers. Many came from previous incarnations of the company, going back 12 years or so. Lundberg found that to encourage flexibility and creative thinking, some company veterans could anchor the group while some fresh but experienced faces from outside the company as well as outside the industry would add additional insight.
“The management team today is virtually the same that it was years ago,” he says. “We took over the management of Logo Athletics [a previous incarnation] and young Logo Athletics people stepped into more important roles. They really knew this business.
“The other thing we had the ability to do is to go out and hire industry veterans, people from Nike, people from Starter, people from Pro Player, people from our competitors that had really gone all by the wayside. Then we hired outside the industry, so people were experts in IT, and human resources and event planning.
“That really was an interesting mix if you think about it. The one thing that we have done the best is to have kept that group together. You all should really understand your strengths and your weaknesses. You can go into a staff meeting and disagree and have issues and argue constructively, and then come out, locked arms, on the same page, and say, ‘Here’s what we’re doing.’”
Look at people options
When a company launches a new line of products for a new division, it brings some challenges for its production team as well as for its human resources department to add more staff. You can tap an agency to send you temporary workers or you can add full-time workers. Either way, you’ll have to decide how to handle the workflow if the new business means running extra shifts around the clock.
“You will definitely face some service challenges ? ‘Hey, I’m doing all my existing business, plus now I’m going to pile on all this new business?’ And you probably have a finite amount of capacity,” Lundberg says.
He found mixed results with the temporary employee route for production work, and suggests the full-time seasonal route instead. This ideally would allow for more control over product quality.
“We don’t try to use the temporary route, for the most part,” he says. “We’ve looked at that. We might try it again.”
What you do what to try as you ramp up hiring is to look for people who can think on their feet and who will be in synch with your company.
“You’re looking for good talent, people who have the ability to adapt and people who have the ability to learn,” Lundberg says. “When you interview people, look for who’s going to fit within the organization. You might not hire the person who is technically right for the job. You really should be concerned with somebody who fits in.”
As far as compensation issues, your company’s practice should be to reward the best performers, as is done in many industries, but with a twist.
“Institute a labor incentive plan, not a piece rate,” Lundberg says. “Base it on engineering standards, accuracy and productivity and efficiency. You grade out at the end of every week.
“If employees are above standard, they get paid a bonus and an incremental bonus based on how much they are above standard. If they are below standard, they’ve got X number of weeks to get back up to standard. If they don’t, they’re out.
“It’s a very, very objective measurement tool to use in distribution and manufacturing. There are two schools of thought. I’m going to pay you X dollars an hour, you come in and I am paying you to do a job, and it is what it is, or I’m going to pay you X dollars an hour with an upside for the people who are really good.”
Going hand-in-hand with your search for manufacturing employees should be your search for qualified management trainees. There, a different approach is needed to bring you results.
“It’s very different to hire people in the front office versus hiring packers, screen printers, embroiderers and people who work on the shop floor,” Lundberg says.
His experience showed him that recent college graduates are the preferred material for management trainees. On-the-job training offers senior management an opportunity to observe the would-be managers.
“Design a 24-month program,” Lundberg says. “You rotate through, say, six different departments, four months per department, to get you to the 24th month. Then you slot them into a full-time job, something that they like, that they’ve learned, for the first 18 to 24 months.
The time spent in the program will serve to groom trainees for their specialty.
“I have a tough time believing that the majority of new college graduates know what they want to do,” Lundberg says. “They want to go to grad school or they want to be a lawyer, they want to be a doctor, or in some professional environment, something like that. We’ve seen that.”
Keep a diet of change
Lundberg readily admits he doesn’t know how to define the word normal. But that’s not a drawback. He’s taught himself that his “normal” can be best defined along the angle of constant change. And it’s his role to see that his employees are flexible and disposed to change.
“You’ve got to be willing to adapt to your environment,” he says. “I think you’ve got to treat people with respect. You’ve got to hire good people and let them do their job. I think that’s very important.
“Create an open atmosphere because you need to make decisions quickly,” Lundberg says. “You can’t be worried about somebody coming to you every time they need to make a call. They’ve got to be able to make it on their own.
“Develop an atmosphere where people enjoy coming to work, give them a good work environment so they can drive and succeed, and give them the ability to make a decision without being afraid of being wrong. Give them the ability to go out there and make decisions on their own and succeed,” he says.
“I think that the majority of people want to do a good job. You’ve got to give them the environment for them to do that in.”
That environment is one that encourages creativity, openness, trust, communication, problem solving, flexibility and feedback. Along with the responsibility of creating that atmosphere comes the opportunity to make errors and be accountable for them.
“People are going to make mistakes and that’s OK,” Lundberg says. “You can’t wait an hour, two hours sometimes to make a decision. You’ve got to make it and move on. People can’t be afraid of making mistakes.”
There are reasonable limits, however ? try not to make the same mistake twice.
“And don’t make it three times,” Lundberg says. “You can’t be afraid in business to formulate your decision; base your actions on those decisions, move forward, and if you’re wrong, you’ll have to re-evaluate, you’ll have to course-correct, and then you have to move on from there. It’s definitely important that you hold people accountable.
“Don’t be a big micromanager. You hire people, and for the most part, they will be extremely successful. Empower people down to the lowest level possible. You want to truly give the associate out on the floor the ability to make specific decisions, obviously within reason.”
At the management level, people obviously are empowered to run their department ? and you’ve got to be able to deal with the departments that are feeding you, a sort of internal customer service, as it were.
“So it’s not only dealing with external customers; it’s dealing with internal customers as well,” Lundberg says.
The goal with these internal customers is to motivate them to always want to get better.
“I think the one thing you have to do a great job of is to encourage people to look for a better way to do things,” he says. “Your IT department probably has a huge list of IT improvements because people are looking for a better way. I think you should keep the workforce motivated to not settle for the status quo.
“Good people breed success. I don’t care what industry you are in. If you hire quality people, and give them the opportunity to thrive and succeed, I think your company is going to be successful, and I don’t care what you are doing.”
How to reach: Sports Licensed Division, Adidas Group LLC, (317) 895-7000 or www.adidas-group.com
The Lundberg File
Born: Bellevue, Wash., outside of Seattle. I actually grew up in suburban Detroit.
Education: I went to school in North Carolina, Wake Forest University. I got a bachelor’s degree in science and business and math there.
What was your first job?
I slung newspapers for The Detroit News. Then I worked at an asphalt plant when I was in high school.
What was the best business advice you ever received?
Be ready to change, because if you don’t, somebody is changing around you. Our business always has something changing here: a new league that we are dealing with, a new big customer, a new process in the back, adding screen-print equipment, adding new facilities. I sit and smile and think, what would it be like to sit back and take a breather for a year?
Who do you admire in business?
This is going to sound sort of corny, but I really admired my father, Dick Lundberg. He owned his own road construction business back in the ‘70s in suburban Detroit. Business then went from absolutely doing very well to doing not so well. He was committed to keeping us in Plymouth until my sister and I graduated from high school. He was 50 years old at that point and I thought it was an amazing thing. I can’t see myself switching careers at 50. Incredibly difficult. I definitely admired what my dad did.
What is your definition of business success?
Giving people an opportunity to succeed and obviously growing a profitable business year over year. You need to continue to grow and you’ve got to do that with the bottom line in mind. You’ve got to grow the bottom line faster than the top line.
Lundberg on working at Adidas: I think people enjoy coming to work for a major sports brand ? for an Adidas or Reebok. To be able to work for two of the largest three sports brands in the world, I think is a great benefit. I think it helps us to attract good people. We’ve got people who want to come to work here because it’s the sporting goods industry. There are people who are passionate sports nuts out there, whether you are right out of college or you are five, 10, 15 years removed from college, they are like, ‘Wow, how cool would it be to work for one of the major sports brands!’