COVID = Caught Inside

COVID = Caught Inside

Reflecting on the current employment environment as we emerge from COVID makes me think of “Being Caught Inside When a Big Set Comes Through.” Why?

For those who don’t understand the analogy, it is something that surfers experience when paddling out when a large set of waves appears. The first wave appears in front of you, and it is a monster. So you put your head down and paddle like crazy to get over it before it crashes on you. You paddle up the face of the beast, hoping to get over the top before it breaks and drags back down “over the falls.” You make it, and you look up to see the next monster, larger than the last, bearing down on you. Tired, you have to paddle harder to make it over that one before you end up in the “impact zone.”

2020 was the first wave that appeared. We all put our collective heads down and paddled hard. We made it over. However, talking to many in early 2021, I don’t think we realized how much effort that had taken. Everyone was tired, many a little depressed. But as we looked up, the next wave was there blocking the entire horizon. That wave is the increase in business activity.

Some of my clients are experiencing more business in Q1 than they did in H1 last year. So we need to paddle hard to make it over this one. However, with everyone tired and depressed from the last one, it is getting harder. Everyone is looking for employees right now, but you are asking more of your employees when they are already working flat out and dealing with the stress until you hire.

The Current Situation

As a result, many are thinking about moving. A new survey reported by Fast Company found that 52% of U.S. workers are considering a job change this year, and 44% have plans in place to move. What is interesting when breaking down the data is that:

  • 59% of those whose annual household income is between $50,000 and $75,000 (the middle-income bracket) were thinking about moving.
  • 76% of those under 30 either looking or open to new opportunities.
  • 48% of six-figure salaried workers were planning their change, and 66% of them are feeling more confident about their decision to change jobs than they did six months ago. 
  • 21% of those surveyed felt there were “better opportunities available to [them] at other companies.”

What I have also seen recently is not only that people are considering leaving, but who. The “Who” here are those centers of influence within the organization. To understand that, look at your “shadow org chart,” which shows employees who have disproportionate levels of impact relative to their hierarchical position. To develop one, ask your employees these three questions:

  1. Who energizes you at work? (list four or more people)
  2. Who do you go to for help and advice? (list four or more people)
  3. Who do you go to when a decision needs to be made? (list four or more people)

If key influencer leaves, then many others may decide that the time to move on has come. One executive told me this week that his concern was that if two of their top influencers left, that would be the beginning of the end.

A recent HBR article suggested asking both the departing employee and the rest of your team questions, listening attentively, and acknowledging their concerns. Focus on goals and reassure your team that they’re still important and achievable, and provide them with educational opportunities to show that you care about their long-term effectiveness.

Regardless, those looking or considering a change are looking for:

  • A stable organization and where they are sure they’re growing and changing within that organization. 
  • More pay. Pay is the main factor that entices employees to look for a new role.
  • Work-life balance is also an essential requirement. 68% of employed workers and 43% of women said that remote work and work-from-home options are “very important,” versus 33% of men. 18% want to have more flexible hours in a new job.
  • Finally, the overall work environment is an essential factor.

However, employees say that the most critical factor that keeps them with their employer is engaging work.

Furthermore, a recent study from Ceridian reports that the cost of onboarding a new employee can range from $2,000 to $4,000, and talent expects a rise of 29% to change roles. I have mentioned before that everyone I know is looking for people. So if a 30% increase is required to change, and 50%+ are looking to move, expect salary and wage costs to increase.

The Challenges

So given the above, the critical challenges for organizations today that want to get over that second wave are:

  • Recruiting.
  • Onboarding.
  • Engagement.
  • Growth path.

Recruiting

I have written before about recruiting and ways to make it better and more of a system. However, I think some of the critical factors to consider right now are:

  • Stand out above the crowd. How do you attract the best talent and not just one of the many looking for a new opportunity? To achieve this, you need to produce job ads that create interest in your organization and the opportunity to attract everyone, not only those considering moving. 
  • Using your employees, customers, and suppliers to help find new talent. These people all know you. They know your culture and values. So they are the best people to refer people to you if you are looking. However, first, you have to tell them what you need. If you have a great job ad, share it with them. Encourage your employees to refer people.
  • Employee testimonials on your website. Again I have mentioned this before, but it still amazes me how few companies have employee testimonials on their website. The first thing a prospect will do is go to your website to find out about your organization. Having no employee testimonials is not a good way to entice them. Worse is only having stock photos of employees other than the leadership team.
  • Ensure your reputation is good. Check Glassdoor and other sites to see what has been said about you. While you cannot always change the negative posts, understand them and be willing to address them in an interview.
  • Interviewing. With many people looking to move and the cost of replacing large, make sure that you are getting the right person. A term I prefer is “auditioning.” As many have said, the key is culture and values. Concerning ability, ensure they can do the job. Given how busy everyone is, it might be harder to defend hiring someone capable but requires training. However, getting the wrong person just because they have the skills is a more expensive proposition in the long run.

Onboarding

Onboarding is more critical than ever, and it is more challenging than ever with COVID. However, now you have to ensure that your new members can absorb your culture and values and know your strategy and expectations.

I have discussed onboarding with many CEOs and find that all are struggling to do it effectively. A few thoughts are:

  • Ensure they know your culture and values, and strategy first. With this knowledge, they can make better decisions that benefit the organization.
  • Ensure they understand what is expected of them and have regular check-ins for the first year to ensure that both of you are on the same track.
  • Understand their objectives and needs. These are both professional and personal, but you can build a plan together to help realize them if you know them. That is not to say the company has to give them more but enabling them to see that they have a path to what they seek will show interest on the organization’s part. Right now, several companies are offering an extra day off a month or large bonuses. Figure out what you can offer to make your employees feel appreciated and not cause trouble in your organization.
  • Make sure they feel welcome. Remember, a majority of people regret the move after the first day! Make sure your new employees don’t. 

Engagement

Keeping all employees engaged is key to keeping them, those that you have and those that you are hiring. That means they need to know:

  • The current situation. Your employees need to know where you are today. Now is time for the truth because they do know, just not necessarily from the leadership team. Telling them everything is okay when they see chaos around them means that the leadership team is out of touch with reality, and now is the time to move on.  
  • Where is the company going? Make sure they know the company’s BHAG and 3HAG. Knowing where you are going provides more energy for the task, and right now, we need everyone to paddle.
  • What is their role? Make sure they know their role in the organization. First, make sure they can answer the following:
  1. What do we do, and where am I in the process? 
  2. How do we make money, and what do I do that helps that? 
  3. How will we succeed?
  4. What is most important right now that my team has to do? 
  5. Who must do what? Accountability and reporting roles and 
  6. How can they help? Seek input from them regularly on how to improve processes and actions to perform better. It is incredible how often employees know a better way, but no one ever asks. However, please don’t ignore their feedback because they will never give it again. If you don’t want to use it, explain why.

Growth Plan

As part of the onboarding, understand what they want in their life. If they wish to grow to a new role in the next X years, help them develop a plan. If they are contented at their current position but want to move flexibility, work on that. Understanding their wants and needs shows interest by the company, and that builds attraction. If they feel you care about them, they will care about you. 

Given all that is happening, this is not the time for the Mushroom Theory of Management!

Finally, given that many people are thinking of leaving, if you can afford it, maybe this is the time to prune some of that deadwood.

Good luck paddling out, and I hope you make it through the set.

 

Copyright (c) 2021 Marc A. Borrelli

Recent Posts

Do You Truly Know Your Core Customer?

Do You Truly Know Your Core Customer?

Knowing the profit of your core customers is key to building a growth model. Many companies have identified core customers that are generating a sub-optimal profit and so they cannot realize the profits they seek. Identifying the correct core customer allows you to generate profits and often operate in “Blue Ocean.”

The Greatest Own Goal or the Greatest Collapse

The Greatest Own Goal or the Greatest Collapse

The European Super League collapsed within days of launch due to hubris and the founder forgetting the key parts of their business model, value creation, sales, and value delivery. The collapse might bring a high price.

Does Your Financial Model Drive Growth?

Does Your Financial Model Drive Growth?

Working with many companies looking to grow, I am always surprised how many have not built a financial model that drives growth. I have mentioned before a financial model that drives growth? Here I am basing on Jim Collin's Profit/X, which he laid out in Good to...

COVID = Caught Inside

COVID = Caught Inside

As we emerge from COVID, the current employment environment makes me think of a surfing concept: “Being Caught Inside When a Big Set Comes Through.” Basically, the phrase refers to when you paddle like crazy to escape the crash of one wave, only to find that the next wave in the set is even bigger—and you’re exhausted. 2020 was the first wave, leaving us tired and low. But looking forward, there are major challenges looming on the horizon as business picks up in 2021. You are already asking a lot of your employees, who are working flat out and dealing with stress until you are able to hire more. But everyone is looking for employees right now, and hiring and retention for your organization is growing more difficult.

Why is there not MORE common sense

Why is there not MORE common sense

“Why don’t they use common sense?!” You may have said this phrase yourself, or heard it with your managers, when discussing an employee’s actions. However, the frustrated appeal to “common sense” doesn’t actually make any meaningful change in your organization. We all make decisions based on the information we have and the guides we have to use. So if the wrong decisions are being made in your organization, it’s time to examine the tools you give decision-makers.

Do You Understand Your Costs to Ensure Profitability?

Do You Understand Your Costs to Ensure Profitability?

You can only determine profitability when you know your costs. I’ve discussed before that you should price according to value, not hours. However, you still need to know your costs to understand the minimum pricing and how it is performing. Do you consider each jobs’ profitability when you price new jobs? Do you know what you should be charging to ensure you hit your profit targets? These discussions about a company’s profitability, and what measure drives profit, are critical for your organization.

Sunk Costs Are Just That, Sunk!

Sunk Costs Are Just That, Sunk!

If you were starting your business today, what would you do differently? This thought-provoking question is a valuable exercise, especially when it brings up the idea of “sunk costs” and how they limit us. A sunk cost is a payment or investment that has already been made. Since it is unrecoverable no matter what, a sunk cost shouldn’t be factored into any future decisions. However, we’re all familiar with the sunk cost fallacy: behavior driven by a past expenditure that isn’t recoupable, regardless of future actions.

Do You REALLY Know Your Business Model?

Do You REALLY Know Your Business Model?

Bringing clarity to your organization is a common theme on The Disruption! blog. Defining your business model is a worthwhile exercise for any leadership team. But how do you even begin to bring clarity into your operations? If you’re looking for a place to start, Josh Kaufman’s “Five Parts of Every Business” offers an excellent framework. Kaufman defines five parts of every business model that all flow into the next, breaking it down into Value Creation, Marketing, Sales, Value Delivery, and Finance.

Are you ready for the Talent Crunch?

Are you ready for the Talent Crunch?

Companies are looking to hire! According to Vistage research, “The most notable finding from the December survey is that more than two thirds (67%) of small businesses reported plans to increase their workforce in the year ahead, up significantly from 55% in November. These expansion plans among small businesses are the highest since February of 2018.”

At the moment, from what I hear, finding the “right” people is hard. That is because of COVID. People will not:

  • Leave current employment. With COVID, employees are staying put for the moment as the risk of moving is too significant. Everyone is aware of a “last in, first out” bias, so no one is ready to take the risk until things improve.
  • Move. With COVID, employees are unlikely to take jobs in new cities. That is not to say people aren’t moving; they are, but usually back to where they came from, with support systems there. Baby boomers are moving to some excellent early retirement locations. However, average employees are unlikely to move for a job as there is too much risk involved in incurring up and moving expenses when the job is uncertain, and they may have no support structure.
  • Take large risks. There is enough risk right now from COVID, and the economic uncertainty that most people will not take on more for a situation that they feel is very risky.

Current expectations are that we may hit COVID herd immunity in July, with the recovery starting in May or June. If that is the case, businesses will benefit from the pent-up demand that COVID has caused. Thus, we can expect employees to adjust their risk profile and start job hunting and moving just as companies increase their employment demands from Q2 onwards.

What are the employees looking for?

Purpose. For many, COVID has brought home their mortality and causing them to ask if what they do matters. Thus, if the company has no core purpose or “Why?”, or the core purpose doesn’t align with the employees’ purpose, the employees will move to those companies where the core purpose aligns.

Empathy. Many people will feel that their employers/bosses didn’t treat them well during COVID or showed insufficient compassion. They may have had to work through challenging homeschooling or ill parents/spouse with their employer making little allowance.

Living Core Values. Many companies have claimed to have Core Values, but when they are just words on a wall. During COVID, many organizations’ behavior has shown employees that their Core Values are just words and not beliefs, and not living your core values will drive employees and prospects away.

Opportunity. Since we are all mortal and life is fleeting, not only do employees want to work where they believe in what they are doing, but they want to realize their potential. Employers that show no interest in an employee’s career development and personal requirements will find those employees departing.

Character. As a result, employees will look for those companies who have always stated their Core Purpose and Values rather than those who have suddenly “found religion” and hoping that their new statements will make a difference like a fresh coat of paint.

McKinsey research showed that of employees:

  • 82% believed it was important for the company to have a purpose;
  • 72% thought that purpose should have more weight than profit;
  • 62% believed that the company should have a purpose statement; and
  • 42% said that their organizations’ purpose statements drove impact.

So, where does your organization fall? If you don’t have a purpose statement that is driving impact, how will you fare in the looming talent crisis? As I have often said, “How you behave during this crisis will define you for a decade or more.”

Here are some questions to ponder.

  • Do you have a clear purpose?
  • Can you say in one sentence what your organization is passionate about?
  • Why does the organization exist?
  • What are your Core Values, and can you point to those that live them and where they are part of your folklore?

If you can’t answer these, then the Talent Crunch is going to hurt! People will leave for places where they feel their purposes align and people live with similar Core Values. As the economy recovers and demand picks up, most companies will need more people to meet the challenges. If you don’t have enough and cannot hire the type you need, you will be in trouble.

If you don’t have a Core Purpose or Core Values, then you are attracting three basic types of employees:

  1. Walking dead. Can’t get a job anywhere else
  2. In Transition. They need a job, so they will work for you until something better comes along.
  3. Don’t care about a Why. These people do have a Why, but it is usually money and nothing else. At any time they feel they are not getting enough, they are gone. Real mercenaries and not good if you ever expect to hit a rough patch in the future.

If you don’t understand your Why, Simon Senik’s video below will put it better than I ever could.

Remember, a Core Purpose is a deep reflection on your corporate identity—what you really stand for—which may well lead to material changes in your strategy and even your governance. If you don’t have a Core Purpose and Core Values but will start defining them now, I would offer some suggestions.

  1. Get a coach or facilitator to help. Discussions over this can easily get bogged down. Many times, everyone will look to the business owner for guidance, which may be okay. But if the business owner comes up with a bad Why, e.g., profit, will anyone challenge?

2. Don’t make profit your Why, for some of these reasons:

  • No one cares but shareholders, and generally, they are not the ones operating the business.
  • Your customers and suppliers are not impressed that “making a profit” is your Why, as that implies you will take advantage of them.
  • If profit is your why then everyone’s only interest is making money. Thus, anything that will make money is okay. When the company hits trouble, no one will stay and help; they are only there for the money.
  1. Remember Jim Collins’ statement about Core Values, “you are willing to lose money than breach your core values.” So, once you determine, make sure your leadership team and most of your employees can live them. If not, they need to go, as they are not “the right people.”

If you have an excellent Core Purpose and held Core Values, put them on your website, in your recruiting materials, and make sure you live your core values. You will be able to attract some great talent in the times ahead.

 

Copyright (c) 2021 Marc A. Borrelli

Recent Posts

Do You Truly Know Your Core Customer?

Do You Truly Know Your Core Customer?

Knowing the profit of your core customers is key to building a growth model. Many companies have identified core customers that are generating a sub-optimal profit and so they cannot realize the profits they seek. Identifying the correct core customer allows you to generate profits and often operate in “Blue Ocean.”

The Greatest Own Goal or the Greatest Collapse

The Greatest Own Goal or the Greatest Collapse

The European Super League collapsed within days of launch due to hubris and the founder forgetting the key parts of their business model, value creation, sales, and value delivery. The collapse might bring a high price.

Does Your Financial Model Drive Growth?

Does Your Financial Model Drive Growth?

Working with many companies looking to grow, I am always surprised how many have not built a financial model that drives growth. I have mentioned before a financial model that drives growth? Here I am basing on Jim Collin's Profit/X, which he laid out in Good to...

COVID = Caught Inside

COVID = Caught Inside

As we emerge from COVID, the current employment environment makes me think of a surfing concept: “Being Caught Inside When a Big Set Comes Through.” Basically, the phrase refers to when you paddle like crazy to escape the crash of one wave, only to find that the next wave in the set is even bigger—and you’re exhausted. 2020 was the first wave, leaving us tired and low. But looking forward, there are major challenges looming on the horizon as business picks up in 2021. You are already asking a lot of your employees, who are working flat out and dealing with stress until you are able to hire more. But everyone is looking for employees right now, and hiring and retention for your organization is growing more difficult.

Why is there not MORE common sense

Why is there not MORE common sense

“Why don’t they use common sense?!” You may have said this phrase yourself, or heard it with your managers, when discussing an employee’s actions. However, the frustrated appeal to “common sense” doesn’t actually make any meaningful change in your organization. We all make decisions based on the information we have and the guides we have to use. So if the wrong decisions are being made in your organization, it’s time to examine the tools you give decision-makers.

Do You Understand Your Costs to Ensure Profitability?

Do You Understand Your Costs to Ensure Profitability?

You can only determine profitability when you know your costs. I’ve discussed before that you should price according to value, not hours. However, you still need to know your costs to understand the minimum pricing and how it is performing. Do you consider each jobs’ profitability when you price new jobs? Do you know what you should be charging to ensure you hit your profit targets? These discussions about a company’s profitability, and what measure drives profit, are critical for your organization.

Sunk Costs Are Just That, Sunk!

Sunk Costs Are Just That, Sunk!

If you were starting your business today, what would you do differently? This thought-provoking question is a valuable exercise, especially when it brings up the idea of “sunk costs” and how they limit us. A sunk cost is a payment or investment that has already been made. Since it is unrecoverable no matter what, a sunk cost shouldn’t be factored into any future decisions. However, we’re all familiar with the sunk cost fallacy: behavior driven by a past expenditure that isn’t recoupable, regardless of future actions.

Do You REALLY Know Your Business Model?

Do You REALLY Know Your Business Model?

Bringing clarity to your organization is a common theme on The Disruption! blog. Defining your business model is a worthwhile exercise for any leadership team. But how do you even begin to bring clarity into your operations? If you’re looking for a place to start, Josh Kaufman’s “Five Parts of Every Business” offers an excellent framework. Kaufman defines five parts of every business model that all flow into the next, breaking it down into Value Creation, Marketing, Sales, Value Delivery, and Finance.

CEO, Try Thy Hiring System

CEO, Try Thy Hiring System

Over lunch this week with an ex-colleague, she described the trials and tribulations of her job search. Her frustration was not that she was looking. Rather, she had received a verbal offer from the company but was now dealing with the HR Manager who was playing “bad cop,” contradicting her boss-to-be and backtracking on items that had been agreed upon.

This discussion brought to mind the many horrible hiring experiences I had been through in my career.

Many companies forget that hiring is like going on dates, because you will be married at the end. When we are in the dating world (for those of you who remember), it is an exciting and frustrating time. We are looking for someone who excites us; we wish to excite, be compatible with, and believe together can be more significant than just two individuals. It is the same in the job search. We are looking for organizations that excite us, whose mission motivates us, whose employees impress us, and where we can add value.

In many organizations, those hiring and those in the HR (Human Remains) Department forget this. They don’t realize that perception is reality. Their behavior kills the “dating” process, drives away the “A” candidates, and destroys a successful long-term relationship with those who stay. Things that kill the dating or long-term relationship are:

  • Not treating the applicant with Respect.
  • Not keeping appointments or to the schedule.
  • Bad communication.
  • The offer differs from what you were told.
  • Probation periods.
  • The First Day

One of the common refrains I hear from CEOs is that they struggle to find good people to hire. As I thought of the hiring process trials, I wonder how many good people have driven away because of the process. Given the cost of bad hires and the entire hiring process, how much is wasted because the hiring and onboarding process is so damaging? Remember, Every system is perfectly designed to get the results it gets.” So what is your organization’s hiring system designed to do?

 

Respect!

Like Aretha Franklin, everyone wants Respect! From my job searching experience, at some point, the applicant is called in for a day of “interviews” where the applicant gets interviewed by four or more people that they will be working with, including their prospective boss. Usually, this day is where the lack of Respect starts.

Some who are doing interviewing feel put upon to interview candidates and come across as either superior or just jerks. During one interview I had, the World Series was on, and the person supposedly interviewing me was watching the game from a small TV that only he could see. As a result, he never heard my answers to his questions, there were long pauses in the discussion while the game absorbed him, and the interview ended early at my suggestion. I declined a second round.  

Now I realize that people have things come up, and some crises have to be dealt with; however, Respect is still required. One company that I interviewed with canceled three separate interviews while I was sitting in the lobby waiting for the interview with the CEO. When on the fourth attempt, I finally did meet the CEO, he was abrupt. He didn’t acknowledge the canceled meetings and the imposition on me. Now, most will say, you are an applicant; why should he. But you never know where the applicant will end up, and one day they might be a customer. In this instance, while I didn’t get a job at the company, its reputation was tarnished in my mind forever, and where I could, I avoided doing business with them. The fact the CEO treated people like that meant to me that they treated everyone like that, and that was not the type of organization with which I wanted a relationship.

 

Keeping your promises

Once you have been through a few job search rodeos, you know to ask, “What is your process?” Applicants want to know how many interviews they can expect, how long the process should take, where the decision points are, and for “A” players – how they manage competing offers to ensure they get the best one. Unfortunately, many companies forget that their answers create expectations that can drive excellent applicants away or kill any long-term relationship if not met.

My lunch companion complaining that the HR person she was dealing with had failed to make any of the appointments they scheduled, without explanation or reason, but had called out of the blue at other times. This behavior creates the impression that the hiring company is chaotic at best and cannot be trusted worse, so the applicant is likely to question where they are being misled.

Once, interviewing for a VP of International M&A position with a Fortune 100 company, my prospective boss laid out how he saw the department going forward. We spend time discussing my role in creating his vision and the challenges he wanted me to tackle once I started, which he emphasized he wanted as soon as possible. However, he noted that I needed to have interviews with the head of legal and HR before they would send me an offer. Those interviews did occur, and at the end of the interview with the head of HR, she informed me that I would hear back within a week. Three months later, I received a call from someone in HR whom I never met or heard of, offering me a Manager’s role in a different department, which I respectfully declined. I already had another job by then, but again I had lost all Respect for that organization. Interestingly enough, in the 18 years since then, its market capitalization has fallen by 67%.

 

Bad Communication

Once upon a time, after a day of interviews, I received an email from the company addressed to someone else telling me that they were not interested in pursuing the discussions any further. I replied, thanking them but asking if the email was meant for the other person and sent to me by mistake or meant for me, but they had typed in the wrong name. The response was, “Both.” Such errors don’t impress people.

However, as is my MO, I reached out to the senior HR executive that I had met during my day of interviews, asking for feedback on why I had not progressed through their process. He responded with shock to say that I was still in the process and wanted me to come the next week to see the CEO.

After this great start, one has to once more question the organization.

 

The Offer Differs from What You Were Told

Often in the process, your potential boss will tell you that some conditions you ask for are acceptable, e.g., start date, vacation, options, etc., only later to be contradicted by HR. HR informs you that this is the firm’s policy, and it is non-negotiable. Managing situations like this are difficult and cause more mistrust because sometimes your potential boss cannot deliver what they promised. As a result, you question their power within the organization, or worse, it creates further doubt about the organization’s core values and ability. In such situations, you begin to wonder if you are dealing with the Job Enthusiasm Killer Department and soon to be working in some Kafka nightmare.

 

Probation

I know many firms like a probation period to determine if the employee is a good fit; however, remember most employees start a new job full of excitement about what they will achieve at their new company. It is like getting married, and they are waiting at the altar for this wonderful new life when the other party says, “Yes, you are committing to the marriage, and it’s our vows, but me, I am not committing for a few months or so until I am sure.” In such cases, by the time the probation period has passed, the employee has lost their enthusiasm, they are now looking for their next gig, and the company is wondering why they can’t keep good people.

If you have a probation period, inform the applicant upfront, so this doesn’t surprise them. Not only that, but if you do, go all-in with commitment. The more the organization holds back, the less likely there will be a long term relationship.

I once joined an organization, and there was no mention of probation during the hiring process. However, as I logged into my computer on my first day, I could not access the network. I was informed that during probation, they kept you off the system. Thus, any files I needed had to be copied onto a disk (Yes, a bygone era) and brought to me, or I had to give them to whoever needed them on a disk. This event was the first I had heard about any probation, and the message was welcome to the team, you second-class citizen. Nonproductive and soul-destroying!

At the end of the first week, my boss asked me to go to Japan, Taiwan, Hong Kong, and Thailand on a Business Development trip. When I asked when I could expect my business cards, I was told that new hires could not get business cards until they had finished their probation. Since I now knew I was on some form of probation, I tried to explain to HR that in Asia, business cards are essential; however, the person would not yield. As a result, I traveled with some I printed up myself, which looked like it and I am sure did lots to promote the organization’s standing in the Far East. Once more, perception is reality, and I am sure the HR person was “following orders” given by someone who had never traveled internationally.

 

The First Day

Data shows that over 50 percent of new employees regret the decision on their first day, and after three weeks, it is closer to 70 percent. Suppose you accept Richard Branson’s view that happy employees make happy customers. In that case, you will realize that if your organization is one where 50 percent of your new employees regret their decision to join you the first day, you have a huge uphill task to build customer satisfaction.

I have been among the 50% because the first day was so demoralizing. As I have said above, you arrive at the new job full of excitement only to be sent to HR hell to fill out a massive pile of forms. Surely these could have been sent beforehand, and you could bring them completed. There is nothing in them that I have ever seen that is so sacred it could not be shared outside the organization.

After this beautiful ritual, you are shown to your desk, whether in an office or cubicle. For some reason unknown to me, in every new job I have had, my boss has not been there my first day to meet with me and show me what I need to tackle. As a result, you arrive to a note saying, “Welcome and make yourself comfortable.” They may have scheduled some meetings for you with other people, but it usually mentions a name and not who they are and how you will be working with them.

A colleague once told me that she went to the stationery cupboard on her first day to get some supplies, only to be berated by a PA who informed her that her department could not access that cupboard. Again, thanks, great to be on the team.

If you are lucky, some of your workers may invite you to lunch on your first day. Indeed this is the least that they could do to make you feel welcome. So, after a wasted day trying to figure out what the unwritten rules are, where the political minefields lie, and whom you can trust, you head home wondering, “What the hell have I done?”

As I have asked before, is your onboarding process more akin to waterboarding?

I love Cameron Herold’s attitude of having a new employee party their first day to welcome them to the organization. However, when they leave, there is no going away party because you will no longer add any value to the organization. Furthermore, that night they ask for your bucket list and commit to helping you achieve an item on it during your first year. Now that is a welcome and one which makes you want to die on the hill for that company.

 

What to do?

A CEO friend of mine once told me that he used to call the CEOs of companies that his sales team had targeted. The purpose was to find out how the sales process was going and if his organization was responsive to the potential clients’ needs. He found this process made his sales team far more responsive to potential clients, honest with their targets, and he learned what worked and didn’t in the process.

If you are struggling to find good people, question if your system delivers the results it is designed to provide. Review your hiring process to figure out what is going on. I would suggest sometimes doing surveys with applicants to find out how they found the experience of applying for jobs with your companies and new hires. Remember back to when you started your career with excitement, what tied you to a boss or company, and what drove you away. Make sure your organization is doing the former and not the latter.

 

(c) Copyright 2020, Marc A. Borrelli

Recent Posts

Do You Truly Know Your Core Customer?

Do You Truly Know Your Core Customer?

Knowing the profit of your core customers is key to building a growth model. Many companies have identified core customers that are generating a sub-optimal profit and so they cannot realize the profits they seek. Identifying the correct core customer allows you to generate profits and often operate in “Blue Ocean.”

The Greatest Own Goal or the Greatest Collapse

The Greatest Own Goal or the Greatest Collapse

The European Super League collapsed within days of launch due to hubris and the founder forgetting the key parts of their business model, value creation, sales, and value delivery. The collapse might bring a high price.

Does Your Financial Model Drive Growth?

Does Your Financial Model Drive Growth?

Working with many companies looking to grow, I am always surprised how many have not built a financial model that drives growth. I have mentioned before a financial model that drives growth? Here I am basing on Jim Collin's Profit/X, which he laid out in Good to...

COVID = Caught Inside

COVID = Caught Inside

As we emerge from COVID, the current employment environment makes me think of a surfing concept: “Being Caught Inside When a Big Set Comes Through.” Basically, the phrase refers to when you paddle like crazy to escape the crash of one wave, only to find that the next wave in the set is even bigger—and you’re exhausted. 2020 was the first wave, leaving us tired and low. But looking forward, there are major challenges looming on the horizon as business picks up in 2021. You are already asking a lot of your employees, who are working flat out and dealing with stress until you are able to hire more. But everyone is looking for employees right now, and hiring and retention for your organization is growing more difficult.

Why is there not MORE common sense

Why is there not MORE common sense

“Why don’t they use common sense?!” You may have said this phrase yourself, or heard it with your managers, when discussing an employee’s actions. However, the frustrated appeal to “common sense” doesn’t actually make any meaningful change in your organization. We all make decisions based on the information we have and the guides we have to use. So if the wrong decisions are being made in your organization, it’s time to examine the tools you give decision-makers.

Do You Understand Your Costs to Ensure Profitability?

Do You Understand Your Costs to Ensure Profitability?

You can only determine profitability when you know your costs. I’ve discussed before that you should price according to value, not hours. However, you still need to know your costs to understand the minimum pricing and how it is performing. Do you consider each jobs’ profitability when you price new jobs? Do you know what you should be charging to ensure you hit your profit targets? These discussions about a company’s profitability, and what measure drives profit, are critical for your organization.

Sunk Costs Are Just That, Sunk!

Sunk Costs Are Just That, Sunk!

If you were starting your business today, what would you do differently? This thought-provoking question is a valuable exercise, especially when it brings up the idea of “sunk costs” and how they limit us. A sunk cost is a payment or investment that has already been made. Since it is unrecoverable no matter what, a sunk cost shouldn’t be factored into any future decisions. However, we’re all familiar with the sunk cost fallacy: behavior driven by a past expenditure that isn’t recoupable, regardless of future actions.

Do You REALLY Know Your Business Model?

Do You REALLY Know Your Business Model?

Bringing clarity to your organization is a common theme on The Disruption! blog. Defining your business model is a worthwhile exercise for any leadership team. But how do you even begin to bring clarity into your operations? If you’re looking for a place to start, Josh Kaufman’s “Five Parts of Every Business” offers an excellent framework. Kaufman defines five parts of every business model that all flow into the next, breaking it down into Value Creation, Marketing, Sales, Value Delivery, and Finance.

Hiring Results are Bad. Surely, We Can Do Better?

Hiring Results are Bad. Surely, We Can Do Better?

Most hiring is wrong; businesses have a 54 percent success rate

How successful are we at recruitment? According to the Harvard Business Review, 80 percent of employee turnover stems from bad hiring decisions. A Brandon-Hall research brief found 95 percent of employers surveyed admitted to making hiring mistakes by recruiting the wrong people each year.

According to a 2015 Leadership IQ study, 46 percent of hires are considered failures by the time they reach the 18-month mark. A 54% success rate! Would you accept that from any other area of your business? Not only do we have a 54% success rate, but the costs of a bad hire are huge. Google searches give estimates as follows:

  • The cost of a bad hire can reach up to 30% of the employee’s first-year earnings — US Department of Labor

  • Bad hires cost $240,000 in expenses related to hiring, compensation, and retention — The Undercover Recruiter

  • 74% of companies who admit they’ve hired the wrong person for a position lost an average of $14,900 for each lousy hire — CareerBuilder

 Since all businesses need employees, why are businesses bad at it? Why do they tolerate this inferior performance, as they all have to face the repercussions of poor hires?

Every business leader understands the negative consequences of a bad hire. Hiring a bad fit for your team can disrupt team morale, decreased productivity, and hurt customer service. Also, there are those terrible hires, which are great, but the company puts them off so much they leave.

But the most successful businesses have what it takes to ensure a bad hire doesn’t derail their teams.

 

Disposable Employees

Part of the issue, in my opinion, is that the disposable society has migrated to employees. We tolerate lousy hiring, as we believe we can easily replace them with better employees if they don’t work out. However, this assumption is flawed and is another example of hubris.

Because of this faulty assumption, we don’t bother to put in place processes for recruiting, interviewing, and on-boarding to ensure that we are not undertaking lousy hiring practices.

Many will say, but we have processes, and indeed, you do. However, are they useful? It goes to your culture. If your firm has a culture of continuous improvement, then you be continuously looking at your hiring practices and making changes to improve the results. If you don’t have a Kaizen culture, you should, but, just because you have a process, doesn’t mean it is an efficient process. You need to examine that process and then start measuring the results to see where it can be improved.

 

Direct Costs

  • Hiring Costs

  • Compensation Costs

  • Severance Costs

 

Indirect Costs

  • Support Costs

  • Cost of Poor Performance

  • Loss of Poor Subordinate / Department Morale

  • Value of Bad image in the Workforce

If you want to determine the cost to you from a bad hire, click here for a model that will help you estimate the costs of a bad hire.

The second reason is the damage to morale among the employees that stay. They might think the person was a good hire, and if they left, the remaining employees might question why they are still around.

 

So Hiring is a Process

Like so many things in business, hiring is a process. I have heard that if a company establishes a good process and sticks with it, it can move that hiring success rate from 50% to 80-90%. If we stick to the process and work to improve it, we should get better results. If we “wing it” and don’t track the success, then we have no idea what is working and what isn’t or how we are performing.

To avoid keeping bad hires on your team for long, have a strategy in place to continuously hire–especially for roles you know will open up throughout the year. It’ll help you quickly replace bad hires and build a network of talent to staff up as your team grows.

Keep jobs posted on your career site–even if you don’t have an immediate opening. If a strong candidate comes along, you can offer an informational interview. If the meeting goes well, you might even decide to hire the candidate before you have an immediate need. If not, you’ll have a pool of talent to tap into when you need to make an urgent hire, i.e., when you let go of a bad hire or suddenly experience business growth.

Hiring the right employee is much more important than simply filling a seat.

I have identified the hiring steps to be:

 

The Job Advertisement

From a talk I heard many years ago, I took away that ads, in general, do not attract good people, more like the bottom third. Most job specifications define the minimum standards; basically, we end up with the tallest pigmy. Good people and Millennials want to know what I am going to learn and what is the job going to do for me.

You have to inform candidates of the following:

  • What is the situation or problem?

  • What are the main obstacles the employee will encounter to be successful?

  • What actions need to be taken to accomplish the problem?

  • What are the measurable, quantifiable results required that define success?

Instead, what we state is the following:

  • Such and Such Industry experience

  • XYZ Technical Degree / Certification

  • ABC Skills and knowledge

  • D E & F Behaviors and attitude

  • Minim
    um of T Years of experience

If this hasn’t bored you yet, it should have. No “A” player is excited over this! You haven’t sold them. What we should be saying is:

  • Fast-growing company in fast /new/challenging sector

  • Opportunity to part of a successful team to create a market-leading organization

  • Increase sales by X% and improve margins by y% within T months

  • Build an Indep. Rep. Channel in X within Y days

  • Implement sales forecasting and pipeline management with Z months

  • Revamp all sales collateral within Q months.

 

The Search

Recruiters are expensive, and I hear they are often sending the same people that are responding to ads on Monster and Indeed. Instead, reach out to your network, customers, suppliers, advisers, etc. Provide them a copy of your job description and ask if they know someone who would be interested and who would fit within your culture.

 

The Sorting

A lot of HR departments have turned to technology to help them with recruitment. They are using scanners to look for words and phrases on a resume that meet their job description. However, given that they are using the failed advertisement, it makes matters worse as it excludes those that would be great hires but don’t fit with what the computer is seeking. Remember, all these algorithms are programmed and have biases, but we don’t always know the preference. Unfortunately, reviewing resumes needs a human eye until computers get much better.

I recently heard a story of someone who was looking for Venture Capital funding. They sent an email to a VC firm that had a video of them singing “Call Me Maybe” with revised wording. The effect worked. The VC was intrigued and asked to meet them. Your automated system will not take these people in and could reject some great possible hires.

 

The Interviewing

We have all heard of those interview questions to determine how an employee thinks. However, interviewing is more than a few tricky questions, not to say you should give up on them. Consider the interview an audition rather than an interview.

 

Experience

If you need a welder, get the applicant to do some welding. If you need an Operations manager get them to do a presentation on what they would do to solve the “S” in Soar. If they have to code, make them code something that doesn’t necessarily require the language knowledge but the thinking of how to structure the problem for coding.

Rather than ask them about the experience on their resume, which they have rehearsed, get them to whiteboard the entire project and layout everyone’s role and contribution. If an applicant just had a small part, they will not be able to do it.

 

Cultural Fit

Cultural fit is talked about continuously but still gets little application. Primarily I would put this down to the fact that many employees don’t know what their culture is. A client of mine recently when around their company, which has 50 employees, and offered each one $100 if they could say what the culture was. Only one employee could, and to my client’s chagrin, printed all over the office, is the corporate culture. The message is only in words and not carried into behaviors.

  • At Zappos, an applicant who is not a local gets a free ride from the airport to Zappos’ Las Vegas headquarters. In addition to being a convenience, it is also a subtle part of the application process. During the rides, the van driver is paying attention to how the applicants carry themselves and treat them, regardless of whether their travel was pleasant or not. After a full day that includes a tour and multiple interviews, a recruiter checks in with the driver to get their impression. Hsieh said in an interview with the Wall Street Journal in 2013, “It doesn’t matter how well the day of interviews went, if our shuttle driver wasn’t treated well, then we won’t hire that person.”

  • Elon Musk, initially, interviewed every employee last to check for cultural fit and asked employees to write a letter saying why they wished to work for SpaceX. Former SpaceX talent director Dolly Singh said that Musk told her to find the single best person on the planet for any given job, no matter the role. When SpaceX built a yogurt stand in its headquarters, Musk instructed her, “Go to Pinkberry and find me the employee of the month.” Musk also looks for candidates with a positive attitude. He also considers whether co-workers would like working with them–what he refers to as a strict “no-assholes policy.” Musk asked her, “what makes you the right person to build my company? Why should I trust you?”

Due to the failings of the interview, some people have started to use unorthodox methods to determine a candidate’s potential, i.e.

  • playing table tennis to discern their level of intensity and risk-taking,

  • have candidates drive the interviewer’s car to gauge their multitasking skills, or

  • explaining why people shouldn’t work for the company to prompts more honest conversations

 

The Measurement

What about after the interview, how do you compare the candidates? Most people write down whether they liked them or not, and do think they are a good fit, but this loses the focus. I like using a Decision Matrix to select the best candidate. Click here on how to use a Decision Matrix.

 

What if You Couldn’t Fire

An e-commerce company, Next Jump, promises never to fire anyone. A company that will not fire is forced to hire slowly and very deliberately. Jay Forte says this type of hiring model (whether or not you choose to offer lifetime employment) is something all companies should consider. “When we choose wisely about who we bring into our organizations, we need to be aware we are making a lifetime decision,” he says. “Not everyone fits in the organization. Therefore, initially choosing wisely is critical. Once chosen, it is right to think that employees will spend all of their careers with the organization – this completely changes how we think about our people.”

 

Why Should I Work for You?

Like them or hate them, millennials are the largest share of the workforce, so we better figure out how to interact with them. Because of the way they look at the jobs, unlike the baby boomers, they will not accept, “You should be happy I am giving you a job.”  They saw what happened in the Great Recession and that they are disposable, so their attitude is “I work for you, you offer me something more than money – satisfaction, career advancement, training, etc.”

I have posed the following question to a lot of CEOs, “You have the perfect candidate in front of you interviewing for a job. They have everything you need, skills, experience, cultural fit, and attitude. You are about to make the offer, and they look at you and say, ‘Why should I work for you?’” None of the CEOs have a great answer. I get responses along the lines of:

  • We’re a great company.

  • There are great opportunities for advancement at XYZ.

  • We have a great workforce.

These sound good, but if this person is interviewing with several companies, all the companies are probably saying the same thing. You know none of the other companies are saying:

  • We are an awful company

  • We are offering a dead-end job in a dead-end company

  • The people here are terrible and will never go anywhere because they are so bad.

So how do you distinguish yourself from the pack? You better be able to answer this question well and authentically to get those “A” players.

 

Onboarding vs. Waterboarding

Over 70 percent of employees regret their decision after the first day of a new job! No one I have ever met has started work at a new company, not excited about the opportunity and the change for a fresh start with upside. If by the end of the day, 70 percent think they made a mistake, that should tell you how fantastic most onboarding processes are. I experienced such a great onboarding experience many years ago as follows:

  • I arrived and sent to HR to fill out reams of paperwork (they could have sent them to my house, and I could have come with them completed).

  • Taken to security to get my badge – took an hour

  • Brought to my desk to find out that my boss was away on business for the week. No one knew what I was supposed to do, but there were four binders on the desk full of information on some prior deals that I was supposed to read.

  • As I was during my “probation period,” my computer could not be connected to the network, so all files were transferred on disks.

  • I was not allowed to order business cards until my probation had ended, even though I was heading to Asia for a large conference the following week.

I was one of the seventy percent, which was thinking, “What the hell have I done, why did I move.”

By the time the probation period is over, the marriage is over, and the employee no longer loves the company. They have checked out.

I believe it was Cameron Herold who said that his philosophy was to celebrate the arrival of a new employee on their first day. The new employee would be asked to bring their Bucket List. The company would commit to helping the employee realize one item on their Bucket List during their first year. Helping didn’t mean paying for it, but rather seeing how the company could make it possible. People value experiences over money, and if you did this for your employees, they would appreciate you much more than any bonus you can give them.

Finally, onboarding doesn’t end on the first day, but it continues for more than the first year with regular check-ins. The check-ins are to:

  • reinforce that the employee knows what you expected of them,

  • they have the resources that they need to do the job;

  • they understand the company’s culture and values and are living them.

Good luck recruiting, and may your success rate increase.

 

© 2019 Marc Borrelli All Rights Reserved

Recent Posts

Do You Truly Know Your Core Customer?

Do You Truly Know Your Core Customer?

Knowing the profit of your core customers is key to building a growth model. Many companies have identified core customers that are generating a sub-optimal profit and so they cannot realize the profits they seek. Identifying the correct core customer allows you to generate profits and often operate in “Blue Ocean.”

The Greatest Own Goal or the Greatest Collapse

The Greatest Own Goal or the Greatest Collapse

The European Super League collapsed within days of launch due to hubris and the founder forgetting the key parts of their business model, value creation, sales, and value delivery. The collapse might bring a high price.

Does Your Financial Model Drive Growth?

Does Your Financial Model Drive Growth?

Working with many companies looking to grow, I am always surprised how many have not built a financial model that drives growth. I have mentioned before a financial model that drives growth? Here I am basing on Jim Collin's Profit/X, which he laid out in Good to...

COVID = Caught Inside

COVID = Caught Inside

As we emerge from COVID, the current employment environment makes me think of a surfing concept: “Being Caught Inside When a Big Set Comes Through.” Basically, the phrase refers to when you paddle like crazy to escape the crash of one wave, only to find that the next wave in the set is even bigger—and you’re exhausted. 2020 was the first wave, leaving us tired and low. But looking forward, there are major challenges looming on the horizon as business picks up in 2021. You are already asking a lot of your employees, who are working flat out and dealing with stress until you are able to hire more. But everyone is looking for employees right now, and hiring and retention for your organization is growing more difficult.

Why is there not MORE common sense

Why is there not MORE common sense

“Why don’t they use common sense?!” You may have said this phrase yourself, or heard it with your managers, when discussing an employee’s actions. However, the frustrated appeal to “common sense” doesn’t actually make any meaningful change in your organization. We all make decisions based on the information we have and the guides we have to use. So if the wrong decisions are being made in your organization, it’s time to examine the tools you give decision-makers.

Do You Understand Your Costs to Ensure Profitability?

Do You Understand Your Costs to Ensure Profitability?

You can only determine profitability when you know your costs. I’ve discussed before that you should price according to value, not hours. However, you still need to know your costs to understand the minimum pricing and how it is performing. Do you consider each jobs’ profitability when you price new jobs? Do you know what you should be charging to ensure you hit your profit targets? These discussions about a company’s profitability, and what measure drives profit, are critical for your organization.

Sunk Costs Are Just That, Sunk!

Sunk Costs Are Just That, Sunk!

If you were starting your business today, what would you do differently? This thought-provoking question is a valuable exercise, especially when it brings up the idea of “sunk costs” and how they limit us. A sunk cost is a payment or investment that has already been made. Since it is unrecoverable no matter what, a sunk cost shouldn’t be factored into any future decisions. However, we’re all familiar with the sunk cost fallacy: behavior driven by a past expenditure that isn’t recoupable, regardless of future actions.

Do You REALLY Know Your Business Model?

Do You REALLY Know Your Business Model?

Bringing clarity to your organization is a common theme on The Disruption! blog. Defining your business model is a worthwhile exercise for any leadership team. But how do you even begin to bring clarity into your operations? If you’re looking for a place to start, Josh Kaufman’s “Five Parts of Every Business” offers an excellent framework. Kaufman defines five parts of every business model that all flow into the next, breaking it down into Value Creation, Marketing, Sales, Value Delivery, and Finance.