Situation: A company hired an employee one year ago. The employee is competent but slow. Even after a year on the job, other employees with similar skills and experience are able to complete the same job three times faster. What is the best way to handle this? How do you set expectations for an employee?
Advice from the CEOs:
The most important principle governing situations like this is clarity of communications. You must clearly express your expectations, and you must assure that the employee clearly understands your expectations.
Assure that expectations are clearly expressed. This means what you expect in terms of performance, and firm timelines for achieving minimum requirements. You also must assure that the employee understands the consequences for failing to meet minimum requirements. The best assurance is written confirmation that the employee understands what is expected.
Don’t be vague or nice about your expectations, performance requirements or the consequences for failing to meet minimum requirements. This risks sending the wrong message to the employee.
Put the employee on a performance improvement plan to meet minimum job requirements. Monitor and document for 30-60 days and then handle according to how the employee responds.
If the individual can’t meet the objective, but has potential value to the company, offer the person an appropriate position at the level that the new position pays.
Have a second person in the room when you deliver the message. If you determine that you have to terminate the employee and the employee elects to sue, this will help your case in a judicial action.
Interview with Kelly Masood, President, Intilop, Inc.
Situation: An emerging company is gaining traction as it moves from early adopters to mainstream. They need to continue to develop new technologies, while bringing down the cost of existing products. This is a delicate balancing act for a small company. How do you grow without losing control?
Advice from Kelly Masood:
It’s important to maintain momentum and continuous improvement. From a practical standpoint, we do this by applying common sense to our technical discipline. Common sense, here, is a relative term. It isn’t really taught in school at any level, but is gained through experience. This is the true expertise of the CEO.
The delicate part of the balancing act is the mix between developing new technologies and building an effective business model. An effective business model is built on innovative and cost effective products and sustainable profitability. Since new technologies go through development stages, it is important to create break points where you transition from development to productization to marketing and sales. Continuous improvement in existing products based upon customer feedback and new product ideas for future developments are crucial aspects of a successful business model.
If you want to minimize outside funding and investment you have to watch cash flow and development expenses. Revenue from existing products is the key. When you don’t have resources, you become resourceful. If the team is dedicated to producing innovative and good products that make business sense, they figure out how to accomplish it without cutting corners.
To mature your team over time you must keep them motivated, occupied and adequately compensated today while inspiring them to make it big in the future.
You maintain interest through the pursuit of new technology and the learning associated with it. Engineers like to see their designs work and turned into a product that creates value, is used and is appreciated.
Keeping the team occupied and challenged starts with choosing the right talent in the first place and then getting them to focus on building great products.
Compensating them with a fair salary means locally competitive rates, sweetened with stock options to provide great upside potential.
For us, retaining great employees is about enabling them to innovate products that will find broad market acceptance.
Key Words: Early Adopter, Mainstream, Develop, Cost, Continuous, Improvement, Common Sense, Business Model, Cash Flow, Expense, Price, Retain, Employees, Off-shoring
Situation: Few economists predict a robust recovery. We know from past recessions that in a slow recovery some companies will fail while others rise to the top. What are the three qualities of the companies that will thrive and become the companies of the future?
Advice from Philippe Courtot:
Companies of the future will have three qualities. The first is a keen sense of who your customers are – what characterizes them and their buying and use decisions. You need to see yourself through their eyes. This will give you the ability to shift more easily as their needs shift. Making this shift is easier for a service company than for a manufacturing company because the infrastructure of a service company is more flexible.
Second is an intense focus on operational excellence. Everything is measured with the objective of obtaining the highest levels of productivity as well as the opportunity for ongoing learning and improvement. The companies of the future will have superior systems for gathering and tracking performance data, as well as cultures which allow them to learn from what they track.
Third is a culture of continuous innovation. The company of the future will be the company disrupting itself. Germany provides a wonderful example because of its culture of excellence in small, family owned companies. You may be surprised to learn that it is these small companies who are the true drivers of German innovation, not the big companies like Daimler or BMW. The small companies follow the three rules outlined here. Their success has been aided by the emphasis in German education on math and engineering which means that there is an ongoing supply of domestic talent to feed these jobs.
Situation: The CEO of a small company finds that whether he gives broad direction to employees or very specific instruction he gets the same result: they don’t seem to understand what he wants. He feels that they don’t have a sense of buy-in or urgency. What are best practices for effective delegation to improve results?
Advice from the CEOs:
You recently fired an employee for inconsistent performance but didn’t tell your staff. When you return to the office this afternoon, get the employees together and tell why the individual was fired. Let them know that this is part of a broader pattern that you see within the company and that if you see other cases of individuals not following through on their assigned responsibilities you will have to take additional action. Unless your employees understand that nonperformance has consequences, there will be no change.
In your operations, set subassembly goals and intermediate milestones coupled. Create and post a set of charts in the operations room so that employees have a regular visual reminder of how they are doing. Bring these charts to employee meetings and discuss how the company is doing. If deadlines aren’t being met, ask for input on how to improve performance. Celebrate successes with recognition for individuals or groups who demonstrate the ability to meet objectives.
Hire an operations manager with experience working with teams the size of yours. You want an individual who excels at motivating and getting results from people, and who has supervisory versus managerial experience. Think platoon leader – a person who excels at effectively running small teams.