A Biblical profit-sharing plan

We’ve talked about bonuses here before. The subject came to mind again one morning as I read 1 Samuel 30. You may not normally think about the Bible offering advice about profit-sharing plans, but of course it has advice about practically everything.

If you’re not prepared to go read the whole chapter right now, here’s a quick recap:

Photo by Janine Chance

While David was on the outs with Saul, Ziklag was his base of operations. While he was away, the Amalekites raided Ziklag and carried off everyone and everything in it. David went after them with 600 men. By the time they reached the Besor Valley, 200 were so exhausted they couldn’t continue. So they remained there while David went on with the 400. They fought the Amalekites, recovered what was stolen, and took the herds of the Amalekites as plunder. When they returned to the Besor Valley, the 400 did not want to share the plunder with the 200. But David said, “The share of the man who stayed with the supplies is to be the same as that of him who went down to the battle. All will share alike.”

Remember how flummoxed we all were at the stories of investment bankers and CEOs getting outsized bonuses, even when their companies saw losses for the year? That happened because the bonuses weren’t tied to corporate profits, they were tied to individual performance.

The lesson I see in David’s Besor Valley decision is that generosity across the board is to be preferred. That it’s better to give 100 employees each a $100 bonus than to give one top salesperson a $10,000 bonus.

Does your profit-sharing plan or bonus structure reward all employees, or only those who directly generate revenue? Are bonuses based on corporate performance, individual performance, or a combination?

The mismatch between what science knows and what business does

The best way to motivate your employees, especially creative types, may be to not motivate them at all. Rather, our goal as leaders should be to help people discover their own intrinsic motivation.

In the TED talk above and in his book Drive, Dan Pink shares the counterintuitive findings of researchers who discovered that when people are paid to accomplish a task, they are actually less efficient than those who do it for free.

Does this mean "stop paying employees?" No. It does mean consider where your employees find motivation. Are you trying to give it to them? Or are they discovering it within themselves? Only the latter really works.

Pink notes that people derive their motivation from three main areas:

• Autonomy
• Mastery
• Purpose

The key, Pink says, is to inspire intrinsic motivation, which is self-directed. "It is devoted to becoming better and better at something that matters. And it connects that quest for excellence to a larger purpose." Our friend Kevin will appreciate that.

Pink says intrinsic motivation "emerges when people have autonomy over the four T’s: their task, their time, their technique, and their team." That is, what they do, when they do it, how they do it, and with whom. The more latitude you can give in these areas, the happier your workers will be.

Ideally our deepest, best motivation will come not from external rewards, but from the highest source.

Whatever you do, work at it with all your heart, as working for the Lord, not for human masters, since you know that you will receive an inheritance from the Lord as a reward. It is the Lord Christ you are serving.—Colossians 3:23-24

5 keys insights for working with digital natives

By Michelle Manafy

Neustockimages — iStockphoto

Between all generations lie gaps. Yet today many individuals and businesses face a massive one. The digital native generation -- those who grew up immersed in technologies such as computers, mobile devices, and social networks -- are becoming our dominant employee and consumer base. That means digital immigrants -- those of us who didn’t grow up plugged in -- must navigate an altered landscape to successfully work with them. These insights will help you understand how to leverage the digital native worldview to achieve your business objectives:

1. They live publicly online.

Businesses must address the expectations of those raised in social networking environments, in which they routinely share activities and opinions with a potentially limitless group of friends.

Tip: Capitalize on digital natives’ openness. Understand their inclination to live publicly, and guide those activities so they are consistent with business objectives. Structure employee activities and customer interactions to put this openness to good use.

2. They share knowledge.

Despite much hyperbole about social media and marketing, many organizations limit or ban the use of social networks on the job. This shows a fear of exposure and a lack of understanding of how to channel this generation’s knowledge-sharing inclination.

Tip: Craft guidelines for appropriate use of social networks. Social media and collaborative ways of working can help companies capture otherwise transient knowledge. The old adage was “knowledge is power.” For digital natives, “knowledge shared is power.”

3. They believe transparency yields trust.

Because digital natives live publicly and value knowledge sharing, organizations that demonstrate transparency will attract and retain them as employees and customers. Digital natives make new friends, followers, and fans every day. Remember that it takes a lot of work to maintain a genuine relationship. If digital natives dislike your brand, they will make it publicly known. Luckily, the reverse is also true. Ultra-connected consumers look for organizations that listen, respond, own up to mistakes and maintain authentic relationships.

Tip: To attract and retain this generation as employees, recognize that the best of them monitor opportunities and discuss employers online. For recruiting, this can provide insights into who are the best, brightest, and most social-media savvy. For retention, employers can leverage these same tools to ensure they are competitive in the market.

4. They are timely, not time-managed.

While most people are painfully aware that the line between "at work" and "off duty" is increasingly blurred, digital natives will move beyond work-life balance to a new sort of work-life integration. Work and social activities are with them anywhere, anytime. Digital natives may log more hours at their computers during the course of a day than those in previous generations, but switch back and forth between work and leisure in short bursts. Though this may strike some managers as inappropriate, it helps to realize that while an older worker might head to the break room or a co-worker's desk to clear their head, natives are more likely to catch up on a quick burst of Facebook updates.

Tip: Companies that emphasize collaboration, learning, and socialization will see benefits in comparison to those that focus solely on productivity. Work can be constructively influenced by the expectations of younger workers.

5. They believe in interactions, not transactions.

With all this socializing, one might begin to wonder how any business gets done. But it does. Organizations that develop good social skills will have a competitive advantage over those that don’t. One essential quality is recognizing that this generation is not interested in transactions -- exchanges of money for goods and services. This generation is interested in interactions.

Tip: Unlike a transaction-based system, an interactive one is based upon social currency. Businesses will need to embrace interaction, from marketing to product development and content creation. This generation wants to do business with companies it views as friends and expects to see its ideals and objectives reflected in the companies it chooses to do business with.

While many digital immigrants whole-heartedly adopt digital tools, it is not simply emerging technologies that must be mastered. Lifelong immersion affects the mindset, behavior, and expectations of digital natives. To succeed in business with them, we must understand and build models based on this native culture.

            

Michelle Manafy is director of content for FreePint Ltd. and co-author of Dancing With Digital Natives: Staying in Step With the Generation That’s Transforming the Way Business Is Done.

Do you have expert advice to share? E-mail Kristen.

Tips for Launching a Startup

By Cynthia Kocialski

gunnar3000—Fotolia.com

I love startups and all the wonderful gadgets they make. The problem is, most of these wonderful things never make it because the entrepreneur is in love with the technology and lacks an understanding of the business. It’s one thing to develop a product that does something cool, but entrepreneurs need to ask whether it actually solves a problem. Ultimately, the business determines the ultimate success or failure of the product.

Here are some tips for anyone considering launching or financing a startup:

It’s Not About the Product

The product may be the heart of the company, but the product no more makes a company than a heart makes a human being. There are many components to a company that all have to work together harmoniously to succeed.

Have the Courage to Discover

The early-stage startup process is one of discovery, not step-by-step execution. Many first-time entrepreneurs believe you come up with a great product idea, then a detailed business plan, and finally hire people to execute the plan. Discovery is the starting point from which the product and business will evolve, iterate, and be refined as the concept meets the customers, the market, and the investors.

Retool and Revise

The first idea is never the final product. The worst work you will ever do is the first work you do. Press forward past the first iteration, and make use of the lessons you learn along the way.

Build Your Team

You need a team, but not just any team. You need the right team for that stage of a company's life. You wouldn't hire a college professor to teach kindergarten. For that, you need early elementary teachers. Startups also need to find the right people for the right jobs. Those people need to have the right attitude and need to be at a stage of their careers that makes them a match for a startup.

Think Like an Investor

Investing in a startup is risky. If investors wanted a moderate return, they'd invest in public companies like IBM and Coca-Cola. What entrepreneurs don't get is that, to an investor, the company is the product. Entrepreneurs need to understand the investor's perspective. Entrepreneurs create end products, but they also need to create the company. Investors buy companies, not products. For an investor, the best-case scenario is a tested, proven business with a market poised to grow rapidly.

The spirit of American business is embodied in the startup. Innovation and guts are the foundation of the startup, and those qualities also happen to be characteristic of the most successful mega-firms. Let those qualities form the dynamic of your startup. and you’ll be off to a good start.

Cynthia Kocialski has founded three high-tech companies and now is a consultant for startups. She is the author of Startup from the Ground Up.

Listening to Your Customers

By George F. Brown Jr.

Successful business strategies build upon shared successes. When your strategy creates value for your customers, your firm also gains value.

Photo by Carl Dwyer | sxc.hu

One tool critical to such strategies is customer-based insight. Many businesses have some kind of Voice of the Customer program to gather insight from customers. There are three primary goals for such a program:

Gain customer input.

Learn the customer’s perspective on the future business environment and their most pressing needs. This brings insights about product innovation, critical services, trends, and more. These insights can help you get ahead of opportunities and strengthen your value. The key is to keep looking forward, rather than focusing on past performance.

We’ve all had “Duh!” moments—when an insight that should have been obvious was overlooked. One of my Duh! moments (and I admit to many) occurred in a company I was running some time ago, when we faced major challenges keeping up as our customers expanded globally. The Duh! moment came when a colleague asked, “Have we ever asked our customers about their expansion plans?” We started to do so, and the problem never resurfaced.

Effective listening doesn’t stop with direct customers. It’s necessary to listen to all of their customers. Pay attention to the entire customer chain: the path that leads from your customers all the way to the final users of their products. Perspectives vary at each stage, with implications that ripple backwards and forwards. Remarkable insights can be gained simply by asking customers at each stage what they would like to know about the other stages.

Learn what makes a best-in-class supplier.

Identify the metrics customers use to evaluate their suppliers, then develop internal action plans to meet those targets. Blue Canyon Partners identified three clusters where such metrics are concentrated: relationships between suppliers and customers, the suppliers’ ability to meet customers’ expectations, and suppliers’ ability to deliver high-value innovations.

Two things make this a challenge: First, while the three metrics clusters almost always apply, actions to be implemented differ from one customer to the next. Customize your program to gain insights about individual customers. Amalgamated data can yield an outcome that is right on average, but missing the mark with each individual customer.

Second, it takes insights from many people to get an overall picture. A customer’s perspective is shaped by the experiences of many people: designers, engineers, salespeople, and so on. Rarely does any individual know all the details relevant to every dimension of the supplier’s relationship with their company. It takes a lot of listening to understand what matters to a major customer, but that effort is required if a solid portrait is to be developed.

Fix what’s important to the customer.

Too often, this is the only goal addressed by the Voice of the Customer program. It is important, but is third in terms of long-term impact. It requires focusing on what can be improved along all the dimensions of customer interaction. There are three keys to doing this without focusing on the past:

First, topics should only be brought up after discussions about the future environment and the characteristics of best-in-class suppliers have been completed.

Second, distinguish between generic wishes for “better” and situations in which current performance is bad compared to competitors or a meaningful benchmark.

Third, learn whether customers will reward a supplier for improvements in metrics where they say they want “better.”

Select a few targets in which to invest management attention. Narrow the focus to action plans where improvement will provide a payoff. Learn what the customer would do differently if a certain change were made. If the answer is “nothing,” then the change should be reconsidered. On the other hand, if the customer can explain with clarity how the change would leave them better off, then the change has the potential to create value for both firms.

George F. Brown Jr., along with Atlee Valentine Pope, is the co-author of CoDestiny: Overcome Your Growth Challenges by Helping Your Customers Overcome Theirs, published by Greenleaf Book Group Press. Brown is also CEO and co-founder of Blue Canyon Partners Inc., a strategy consulting firm.

Do you have expert advice to share? E-mail Kristen.

Sabbaticals: A Strategic Tool for Improving Bottom Line Results

by Rita Foley

Corporations that offer sabbaticals don’t do it as a nicety. They do it because it’s good for employees, for the company, and for customers.

Laurent Hamels -- Fotolia.com

Most of us have worked since we were in our late teens or early 20s, so of course it’s natural to crave some time off. Here are six reasons more companies are implementing sabbatical programs:

Employees return rejuvenated: Close to 100 percent of sabbatical takers return to their companies with higher levels of engagement, loyalty, motivation and appreciation for their employers. Research shows a high percentage of promotion and improved performance levels among sabbatical takers. But companies that provided sabbaticals only by exception, rather than as policy, had more sabbatical takers who did not return to work or remain employed with the company.

Clients will allow it: Some companies, especially professional firms, say the intense one-on-one relationship with clients prohibits sabatticals. The reality is many such firms offer sabbaticals. One law firm partner told me that sabbaticals actually help neutralize the ego factor. “It’s not healthy for the firm if a client gets too dependent on just one person.”

It can be cost efficient: This is another one that is especially hard for lawyers or other firms who share profits. But if everyone takes a sabbatical, then, at one time or another, each will cover for another and the profit washes out. Some companies offer only partial pay for sabbatical takers, but even for those who offer full pay, a sabbatical program shouldn’t cost you. Maybe at a clerical level you might have to hire a temp, but with careful preparation and juggling, work can usually be covered by existing employees.

Implementation is essential: It’s all in the preparation. The companies I spoke to have a very simple and effective system. Upon approaching the sabbatical year, an employee writes a memo to their boss requesting the specific time off. They then meet and outline coverage.

Stagger sabbaticals: In a formal program, one of the main concerns is how to start the implementation with tenured employees who have passed the five- or seven-year mark -- some many times. Most companies simply stagger leaves over a three-year period.

The bottom line: Our nation will lose its innovation and creativity if we don’t invest in our most important asset: our employees. We tune up our PCs, our cars, and our home heaters. Why not encourage people to give their minds and spirits a tune-up? Time and time again, sabbatical takers return as more interested and engaged employees, more loyal and more creative. Sabbaticals broaden a company by bringing in new ideas.

Loyalty alone should justify implementing a program. The cost of hiring and training a new employee can be 1.5 times a departing worker’s salary. Sharon Allen, Deloitte’s chairwoman, said her firm’s sabbaticals and flexibility policies had saved more than $45 million a year by reducing turnover.

A sabbatical program is a wonderful tool for checking an organization’s depth and breadth. Managers must proactively focus on developing their staff, complete succession planning, and provide training and exposure to teams. Sabbaticals promote teamwork and better decision-making.


Twenty per cent of the Fortune 100 Best Companies to Work For offer fully paid sabbaticals. If you want to be a workplace of choice while still adding to the bottom line and the company’s future, consider implementing a sabbatical program.

Rita Foley is an adviser with Crenshaw Associates and is a co-author of Reboot Your Life: Energize Your Career and Life by Taking a Break.

Do you have expert advice to share? E-mail Kristen.

Five Common Sales Team afflictions

by John R. Treace

Problems in sales teams can be found to some degree in almost every organization. Smart managers are aware of this and work to avoid the potential reduction in morale and performance. Any one of these problems will not necessarily hurt sales efforts, but multiple conditions at once can be extremely harmful.

Affliction 1: Wasting time

Endostock -- Fotolia.com

Forcing salespeople to perform non-sales tasks such as making accounts receivable collections, managing product recalls, or filling out reports unrelated to the sales process may be a waste of their time. Consider delegating these tasks to non-salespeople. If you divert five percent of a sales team’s time to collections, you effectively reduce the number of feet on the ground by the same amount. The reverse is true as well. It’s worthwhile to audit processes to see whether non-sales tasks can be re-assigned. Relieving the sales team of such tasks will result in increased sales.

Affliction 2: Poor sales meetings

The objective of any sales meeting should be to increase sales. Period. Every high-performing salesperson in a meeting thinks, “Is this meeting making me money, or is my time being wasted?” Powerful salespeople are self-motivated and intuitively know if their time is being wasted. If it is, management is hurting morale -- and sales. To ensure effective meetings, develop a strategic intent that includes clear success metrics. Define in specific terms what metrics are needed to determine whether goals are met. It takes a deep understanding of the business, the market, and the competition to do this. Powerful sales meetings produce sales and keep morale high.

Affliction 3: Poor strategy

Ineffective marketing or sales strategies will always hurt the sales team. This is especially true for teams selling commodity products or services. A player with small market share who enters a commodity market without a well-defined and well-implemented strategy can be assured of certain death. These types of companies usually say, “It’s a huge market, and we can grab some of it,” but it’s not that simple. The sales team will recognize ineffective strategy and will lose faith in the managers who developed it.

To compound the error, companies often try special promotions to save sagging sales on ill-conceived products. Some promotions can be effective, but managers should never call for a pointless charge of the light brigade. Sending the sales team to support a poor product or service is a severe tactical error. A successful sales effort hinges on good strategy. Companies that fail in this regard severely handicap their sales teams.

Affliction 4: Capping or reducing income

Powerful companies have managers who do not envy large sales force paychecks. Managers who resent highly paid salespeople often respond by reducing commissions, capping earnings, reducing territories, or removing products. Avoid these practices. They destroy morale. Powerful salespeople want to leverage today’s efforts into greater sales and income for tomorrow. If their earnings are limited, they will feel that ability has been taken away. High performers will soon look for employment elsewhere.


Affliction 5: Favoritism

We all have favorites in life, and that’s normal, but playing favorites on a sales team is destructive. Salespeople want to work for companies that keep the playing field level. If select salespeople are given extra incentives, benefits, or favors not available to others, management is creating a privileged class. Managers can’t build loyalty by strengthening a small political power base. Keeping the playing field level will pay big dividends.

Wasting time, poor sales meetings, poor strategy, capping income, and playing favorites are, with few exceptions, situations to be avoided. They are destructive to morale and lead to poor performance. Effective managers avoid these situations, and astute salespeople will bring these practices to the attention of management for correction.

John R. Treace is the founder of JR Treace & Associates, a sales management consulting business. He is the author of Nuts & Bolts of Sales Management: How to Build a High-Velocity Sales Organization. Website: www.treaceconsulting.com.

Do you have expert advice to share? E-mail Kristen.