Tag Archives: Recognition

How Do You Balance Competitive and Collegial Behavior Within The Team? Three Points

Situation: A CEO has built a company which is very collegial. She is interested in adding an element of friendly competition within the company. Would it be destructive to add an aspect of competition to the mix? How do you balance competitive and collegial behavior within the team?

Advice from the CEOs:

  • This can be achieved by focusing on recognition, and encouraging recognition of each other among the team members.
  • One example is to have traveling trophies.
    • One trophy could be circulated on a periodic basis based on measurable criteria. Examples include new client acquisition, increases in revenue, or increases in savings by improving processes. There are many positive achievements that can be recognized.
    • A second trophy could be awarded for “assists”. Examples include one team member helping another to land new accounts, a team of employees developing a cost-saving improvement to process, and developing a new accounting technique that saves the company money.
    • A third trophy could be awarded to one team member for a job well done, and then awarded by that member to another member for another job well done, and so on.
  • To add to the collegiality, some of the trophies can be passed around spontaneously for on-the-spot recognition. Others can be awarded on a scheduled basis such as annual or quarterly employee or company meetings. Mix it up and be sure to make it fun!

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How Do You Boost Team Morale? Ten Suggestions

Situation: A CEO is concerned because he anticipates an increase in stress within his team – from handling clients who are anxious about the economy on the downside to a potentially overwhelming number of new clients to manage as people start to reinvest in growth as the economy improves. How do you boost team morale?

Advice from the CEOs:

  • Help team members to prepare for additional pressure:
    • Communicate with them as a team, and individually as necessary, about what the company anticipates to be the new challenge. Do this with a positive tone.
    • Be open with the team about the realities that they may face, and have the team work together during weekly meetings to develop solutions that will help to reduce the pressure as it builds.
    • Make stressors positive. Bringing on new clients is wonderful for the firm, will increase profitability and the opportunity for profit sharing.
  • What have others done to successfully maintain employee morale and increase productivity?
    • Reward programs for people who learn new processes or develop new skills. The real reward isn’t the cash, but recognition by the CEO, who makes a big deal about the reward.
    • Monthly or quarterly drawings for a cash price. Employees can increase their odds of winning because the number of tickets that an individual has in the hat is driven by accomplishments against criteria set each period.
    • Monthly barbeque lunch for the whole company. This promotes camaraderie, and encourages people to talk to one another about things other than business.
    • Project-based bonuses – tied to individual contribution.
    • Spot bonus or gift cards – allowing employees to recognize each other’s’ contributions.
    • Post individual “win” achievements on a bulletin board in the break room. This injects fun competition into day-to-day work.
  • Develop a list similar to the suggestions, above, and ask employees what type of recognition and pressure relievers they would like to see – bring them into the decision.

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How Do You Build an Effective Compensation Plan? Six Suggestions

Situation: A company hires and trains engineers from outside of their field. Their pay scale is typically below market for engineers in this field. Once the company trains them, these engineers are candidates for recruitment by other firms in the field that are considered premium employers. The CEO wants to address this situation. How do you build an effective compensation plan?

Advice from the CEOs:

  • In addition to compensation, a high-quality workplace and work experience are equally important.
  • Give the lead engineer or team compensation tied either to engineering charges or gross profit on successful projects. This can be a small percentage – but offers them a compensation upside that they are unlikely to find at another company.
  • Create a peer-recognition award like another company’s RAVE Award (Recognition, Achievement, Value, and Enthusiasm). On a regular basis – perhaps quarterly – the engineering team has the opportunity to select one of their members for this award. Components of the award may include a plaque, a free dinner or massage, or something that team members value. Ask them what they would like to see as rewards within the program.
  • A similar technique is a peer recognition box. Engineers nominate peers for recognition based on performance in a team project. At regular intervals, draw a name from the peer recognition box, with the winner receiving, for example, a gift certificate. The dollars are less important to the recipient than the recognition.
  • Focus on making the company “the place for talented engineers to work.” This can be as much a cultural situation as a place to make a great salary. The more that the company creates a fun and personally rewarding culture, the more it builds “stickiness” into the job. Ask the team for their input to shape the team and work environment.
  • Provide performance incentives for meeting quality objectives while exceeding time objectives. This beats existing cost estimates, so share some of the savings with the team working on the project.
  • Make special company celebrations a regular part of the company culture – for example, evenings out at premium restaurants and including spouses or significant others. By treating significant others well, the company creates a disincentive for the employee to leave.

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What Is Your Bonus Plan This Year? Four Thoughts

Situation: A CEO is thinking about the end of the year and bonus plans for his company. It has been a difficult year between remote work and workplace COVID restrictions for those on-site. Recent moves by public and large private employers to mandate vaccination has some employees worried. The latest inflation reports are also of concern to many employees. The CEO wants to retain as many staff as possible. What is your bonus plan this year?

Advice from the CEOs:

  • The CEO queued up a suggestion of a bonus in the 8% to 18% range depending upon performance on top of 10% 401K contribution. Several others agreed.
  • One CEO said that in a good year they award a 6% 401K match plus a bonus range of 10 -18% for non-commission personnel. They don’t offer bonuses for commissioned salespeople. Support staff get an 8-10% bonus.
  • Another CEO suggested that the CEOs plan was possibly over generous with a 10% 401K contribution. Given the current economy many employees may prefer cash.
  • This has been an exceedingly difficult year for most businesses with myriad challenges. As the economy reopens it will be as critical to hold on to high performing employees as it is bringing back previously laid-off employees or attracting new employees. Think in terms of recognition for those who have helped the business work throughout the year in additional to bonuses.

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How Do You Improve Internal Processes and Procedures? Five Approaches

Situation: A CEO’s company has experienced margin erosion due to designs that did not transfer well to manufacturing, and inefficiencies in the transfer process between design and manufacturing engineering. He wants to transform the culture without losing technical performance while meeting cost targets and delivery timelines. How do you improve internal processes and procedures?

Advice from the CEOs:

  • Reinventing the culture of a workforce is an organizational design challenge.
    • The heart of the challenge is understanding the motivations and desires of the individuals involved – particularly the natural leaders within the groups.
    • Learn this is by speaking with them one-on-one, either as the CEO, or through individuals with whom they will be open and trusting.
    • Once their emotional drivers are understood, design accountability and incentive solutions that will align their personal reliability and accountability drivers with their emotional drivers.
  • Tailor the language of communication with the organization so that it responds to the emotional triggers discovered during the 1-on-1s. For example, if there is a negative reaction to sales within the engineering teams, use a different term like client development.
  • Expose the designers to the “hot seat” that gets created when their designs produce manufacturing challenges. The objective is for the designer to see the manufacturing group as their “customer.”
    • Involve manufacturing engineering in design architecture meetings. Do this early in the process so that they can communicate the framework and constraints under which manufacturing occurs and suggest options that will ease manufacturability.
  • Shift from individual to team recognition on projects. Instead of recognizing the contributions of the design component or the manufacturing component, recognize the contributions of the team of design and manufacturing engineers that produced a project on time, on budget, with good early reliability.
  • To kick off the new process:
    • Identify some of the waste targets.
    • Involve individuals who are known to be early adopters.
    • Have them look at the problem, develop and implement a solution.
    • Deliver ample recognition/rewards to these individuals.
    • Next use these people to mentor the next level of 2nd

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How Do You Improve a Business Model? Four Observations

Situation: A CEO is in conversation about combining with another company. One option is for the other company to absorb his company. What are the pros and cons of this option? Are there other options that will better serve both owners and employees? How do you improve a business model?

Advice from the CEOs:

  • The company has a great model today. The option under consideration looks like a double compromise – it alters both the company’s strengths and its fundamental business model.
    • The company’s strength is lean and mean – moving from a hourly/fee-based model with high utilization to a salary-based model, as the option on the table proposes, will change this. It also changes the dynamics of who will work for the company.
    • The magic of the current model is that it attracts top talent by offering them the best of two worlds: high individual billing rates with ready access to billable hours. Over the long term this has also made it very profitable.
  • Explore an alternative – how does the company transform its existing business model while retaining its strengths – lean, mean, low overhead – while transforming the model so that it builds “products,” perception, and recognition for the company?
  • A longer-term alternative is to look for a financial acquisition of the company. It has good net margins, good cash flow, and even spins out cash. This is valuable to a financial buyer.
  • What is the role of the CEO right now? Another CEO was asked “Do you have a job or a company? What happens if you leave? If the company dies, you have a job. But it may not be necessary to change much to become a company.”

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How Do You Monetize Your Business Model? Five Suggestions

Situation: The CEO of a start-up software company focuses on connecting potential parties to business opportunities. Early signs are that this offering has legs and potential parties have responded positively. The critical question for the CEO is how best to turn interest into revenue. How to you monetize your business model?

Advice from the CEOs:

  • The first step is to segment the audience and determine both the potential for each segment to both benefit from and fund the service that they receive.
    • Individual contributors may not have a lot of financial resources but may be interested in participating as employees or providers of expertise or services. They also may know others and can spread the word.
    • Collaborating organizations may be able to offer both funding and services to help build and sustain momentum.
    • Companies have funds to support the effort provided they see value to their bottom lines as a result.
  • Suggest a fee or contribution for services from companies who will benefit. Provide guidelines or a sliding scale of fees depending upon duration of services provided to the company. Make it clear that moneys earned will be reinvested to increase the range and depth of services offered.
  • Suggest a sliding fee scale for individual contributors based on the financial benefit that they receive.
  • For companies and collaborating organizations offer levels of membership or recognition for support based on benefit received.
  • For all segments – start with small, timed fees and increase these as the model proves its benefit to them.

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How Do You Strengthen Internal Incentives and Ownership? Four Points

Situation: A technology company has established a leadership position in their niche. Nevertheless, they struggle with individual performance and buy-in to company performance. The CEO asks whether increasing ownership through stock incentives in a non-public company is an effective incentive for employees. How do you strengthen internal incentives and ownership?

Advice from the CEOs:

  • In the past, employees voiced a strong predilection for share ownership as recompense for the personal risk and sweat that they have put into the company.
    • It may be advisable to revisit this, particularly given the increased risk that comes with share ownership as a result of regulatory changes of the last 10 years.
    • As a substitute for share ownership, they may be open to some proxy that will provide them with value and the opportunity to have their opinions heard in the case of a buy-out.
  • Another company looked at this closely at the time of formation. They decided that proper recognition for contribution did not equal ownership. Ownership also entails personal liability and risk, which many don’t realize and, once they understand the implications of owners’ liability, don’t want. As an alternative they adopted a liberal profit-sharing structure that has met with employee enthusiasm.
  • Think about this discussion in terms of incentives:
    • Short Term – Annual-type incentives
      • Make sure that incentives align with desired behaviors so that individuals’ contributions contribute to business plan objectives and the next step for the company.
    • Long Term – consider the trade-offs
      • Share Ownership
        • Broadly distributed share ownership not only complicates future flexibility but may also complicate a buy-out or merger opportunity. Consider the implications of a situation where most shares are in the hands of past rather than current employees.
        • Strategic Partners wishing to invest may be reticent to work with a company with broadly distributed ownership.
      • ESOPs, while frequently referenced, tend to eat their children. They have several complications:
        • They are governed by ERISA, so you cannot discriminate. All must be able to participate.
        • Ownership is prescribed – with a maximum of 10% per employee. Will a future CEO candidate be happy with 10% when the admin assistant gets 3%? In this way ESOPs can impair succession and recruitment plans.
        • Annual valuations can be expensive.
      • Phantom or Synthetic Equity Programs
        • A company can tailor these to meet changing objectives.
        • Valuations are cheap and valuation metrics are easy to monitor.
  • To work through the options, sit and talk with the employees, and listen. Ask what concerns them. Don’t try to come up with a solution until their concerns are understood. There is an array of options available.

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How Do You Recognize Employee Performance? Four Points

Situation: A company instituted employee awards two years ago. These include an annual President’s Award, at choice of the President, and a Peer Award which is awarded monthly by peers for outstanding achievement.  Recently, management recognized a team within the company with an award for a significant team contribution – a company-paid trip to Las Vegas. This caused resentment among some of the other employees.  How do you recognize employee performance?

Advice from the CEOs:

  • There are two benefits to employee awards – the award itself, and, more significantly, the employee being recognized among his or her peers. Transparency within any award system is important.
  • There does not appear to be anything wrong with the award to the team. However, it is important to communicate to the company that awards are proportional to the benefit that the employee or team has created for the company.
  • Since there has been a mixed response, a message to the company is appropriate. The best way to do this is a brief company meeting, with telephone access to those who are remote. Here are some key points to cover:
    • Make the theme of the meeting employee awards.
    • Recognize the team that received the Las Vegas award and use the meeting to update the company on your rewards policy. Detail the policy, how awards are recognized, and that rewards are commensurate with the level of benefit gained for the company.
    • Deliver the full message in a positive tone.
    • Schedule 1-on-1 telephone conferences with individual remote employees who are not able to participate in the meeting.
    • Optional – follow-up with an email detailing the awards policy.
  • The complaints that you heard meant that the company did the right thing. A little jealousy isn’t bad if it shows that the company will reward hard, productive work.

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How Do You Ask for Consideration? Four Suggestions

Situation: A company played matchmaker between another company in the concept stage and a funding source. Having performed this service, the company would like to get something in return. There is no agreement in place regarding consideration for this service. How do you ask for consideration?

Advice from the CEOs:

  • A way to introduce the conversation is to say – We’ve been happy to help you identify funding for your company. What kind of role and contribution do you see for us as you move forward? This prompts the other company to confirm the inequity, instead of you, and makes it more likely that they will offer you something.
  • This is really a relationship challenge. You’ve done a great favor for the other company – obtaining funding for an early stage company is a major accomplishment. If there is a good relationship between the two of you it is reasonable to hope that they will recognize this. A minimal way to ask for this is to say – If you get funded we want to be your service provider.
  • In business, many leads are referrals. When we get a good lead, we try to assure that the referral source gets some business from the resulting project. This encourages them to continue to provide us with leads. It also reflects common courtesy. Providing this example may help your case.
  • On option may be to ask for an equity interest. For an early stage company, this is inexpensive as they have not yet established significant value.

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