"The one thing that unites all human beings, regardless of age, gender, religion or ethic background, is that we all believe we are above-average drivers."David Barry
From a book of the same name by Lillian M Pyke published in 2005 by Axiom Publishing in South Australia, we wonder if she may be a little behind the times. We quote from her Chapter XXI on 'business etiquette' ...
"A business man should always have a special card for use when employed in his daily avocation. This should not have the prefix 'Mr.' before the name.
It is absolutely necessary for an employee to be punctual. He should not work with his eyes on the clock about closing time.
An employee, when summoned to the manager's room, should remain standing until his chief indicates a seat. At the conclusion of the interview he should leave the room as quietly as possible, closing the door after him.
If anyone else enters the room while he is still in it, who is in a more important position than himself, he should rise and retire unless specifically instructed to remain. He should not join in the conversation unless directly addressed.
If a junior meets his employer in the lift or the street, he should raise his hat, but should not enter into conversation unless he is addressed first.
Anyone employed in addressing envelopes should be sure to put the correct title of the person to whom the letter is to be sent. Always put "Messrs." Before the name of a firm. If an employee has need to send a letter to his chief, he should commence "Sir" if he has a very subordinate position, and conclude "Yours obediently." If he is fairly high up on the staff he will commence "Dear Sir," and conclude "Yours faithfully."
An employee should not receive calls or telephone calls from personal friends in office hours.
If a junior is invited to a garden party at his chief's home, he should wait for any ladies introduced to him there to bow first on a subsequent meeting.
a Man paying a business call should always remove his hat when he is shown into a private office.
An employee should regards as strictly confidential anything he may learn from the firm's correspondence.
An employee should regard as strictly confidential anything he may learn from the firm's correspondence.
We note with particular interest the last paragraph of her introduction to the book which states Remember that those well up in a social position are allowed to form a law unto themselves, as long as they are always considerate of the feelings of others.
We leave to your imagination the content of chapters on topics like Dinner Parties, Bridge Parties, Letter Writing, and How to Address People of Rank! Or you could find a copy at your local library?
Managers lack the confidence or will to assert their authority - directives are no more than glorified requests
The British celebrity chef who has expanded cooking's vocabulary, produces compelling television viewing. Ramsay's trademark bawdy language and white-hot temper fascinate us. So dies the revealing insight into the controlled frenzy of a restaurant kitchen and the tragi-comedy of dreamy entrepreneurs out of their depth. Whatever the allure of Ramsay's Kitchen Nightmares, and its United States spin-off, Hell's Kitchen, both in Australian television, there is a lot more to the Ramsay shtick than meets the square eye.
Even allowing for reality television license, the unadorned spectacle of an out-of-control workplace is arresting, and revealing. It is rare to witness in such excruciating detail how a dysfunctional workplace can hobble a business. Ramsay's television fare should be mandatory content for any elementary business course on entrepreneurialism, management or workplace dynamics.
Behind the entertainment provided by helpless would-be restaurateurs being harried by Ramsay lies a sobering management reality: every day, a convergence of myriad events, internal and external, must be dealt with, while maintaining a longer-term perspective. There is no long term perspective. There is no long term in business without taking care of the short-term.
If decisions are not made, situations compound into a much larger and more menacing mass of unmade decisions. At any one of the restaurants featured on Ramsay's programs, there are common ingredients: managers out of their depth, either blind to the corroding elements of their business or too weak to make a decision. Management is about making decisions, from the everyday and mundane, to the unexpected, full blown crisis. If the decisions are not made, sooner or later the business apparatus buckles.
Ramsay's invective makes good television but its shock factor is partly a reflection of how tame workplaces have become. Quite properly, organisations have sought to move away from abusive, bullying and intimidating behaviour in the workplace. This trend has not occurred uniformly across all workplaces. The incidence of workplace bullying and harassment remains unacceptably high.
However, there has been sufficient cultural realignment to create a twee democratisation of the workplace that affects the relationship between managers and their charges. Many managers now lack the confidence or the will to assert their authority . Directives are no more than glorified requests and below-par work is rarely challenged.
This is not say that managers should transform themselves overnight into besuited Gordon Ramsays, but a little more robustness in the workplace would not go astray."
Extracted from the D'Angelo Fisher column in BRW 8-14 May 2008 page 59. If you suspect you would be embarrassed by a visit from Ramsay; maybe you should investigate our information resources on improving operations generally, or personnel and management systems in particular. Then call us on 08 9271 7661 to find out how we can coach you and train your staff to make the changes happen.
High-powered salespeople can add hugely to their take-home pay through bonuses and commissions, but they have to perform.
BONUS PLANS:
These plans usually cover a set period. Payment relates to performance in that period.
Payment is usually based on an agreed measurement but at the discretion of management.
Sometimes, however, the recipient won't know how the payment is calculated until it is made.
Bonusplans are usually capped.
COMMISSION PLANS:
Commission plans usually apply only to staff directly involved in revenue generation - that is, sales staff.
They are paid as a percentage of the performance indicator, which may be individual or group sales.
Payment is usually made directly after the sale - weekly, monthly or quarterly.
Commission plans may be capped or uncapped.
They have the skills of a hunter. They shrug off any interest in that touchy-feely, work-life balance stuff. he thought of salaries of up to $300,000 makes up for the seven-day weeks, irregularly hours and time away from home.
They are Australia's top salespeople, with what sales head-hunters call the "X factor". It is a rare commodity becoming rarer.
"There are fewer people who want to go out and do that direct sales role" - despite the salaries on offer - senior regional director of recruitment group Hays Sales and Marketing, Jane Donnelly, says.
Hays' survey of Australian sales roles and salaries shows a wide spectrum of income levels, and Donnelly says that base salaries, as well as commissions and bonuses. will vary between companies and industries.
The top of the pile are business development managers who would take home a base salary of more than $150,000 a year, but commissions can double that amount. For the top paying jobs, Donnelly says, companies want people who can "hit the ground running" and who will rarely be given time for training or improving skills.
Industries such as financial services, construction, real estate and information technology are desperately looking for people who display "X factor". The increasing competition in these industries has ensured that sales staff are better paid and better resourced than most of their colleagues.
This view is supported by industry surveys that show salary scales from $40,000 a year to $200,000 and well beyond. When bonuses and incentive payments are included, salespeople can be among Australia's highest income earners (see table below).
Location
Sales rep
Business development executive
Sales manager
Director of Sales
GM sales and marketing
Sydney
$65,000
$80,000
$120,000
$200,000
$200,000
Melbourne
$60,000
$70,000
$100,000
$150,000
$150,000
Brisbane
$55,000
$70,000
$100,000
$150,000
$150,000
Adelaide
$48,000
$65,000
$90,000
$120,000
$100,000
Perth
$50,000
$60,000
$95,000
$140,000
$120,000
Canberra
$50,000
$80,000
$90,000
$150,000
$140,000
Auckland
$65,000
$80,000
$120,000
$180,000
$170,000
The Hay Group, an international management consulting firm, has created a remuneration database representing 350 Australian companies covering 150,000 job-holders. Henritte Rothschild, a spokeswoman for the group in Australia, says sales roles represent a very wide spectrum of jobs and salaries.
"The sales roles range from a 'customer maintenance and order taking' simple sales process to a complex sales process. Those order-taking functions will be earning higher base and will have leverage in the potential incentive payments," Rothschild says. About half the sales roles are order taking and simple sales process, sand the other half are higher level or complex sales functions.
"Considering half the functions are order-taking and simple sales, the majority of those sales functions only earn around 10 percent to 25 percent of their salary as variable pay. This can be compared with a non-sales job at the same level [which] would be closer to 5 percent up to 12 percent in variable pay."
Rothschild says the variable pay component is paid in commissions and bonuses, and the remainder would be a base salary.
"As a starting point, the mid-level remuneration of a typical sales rep who is perhaps tertiary educated with around five years' experience in a selling role with moderate complexity, would be $57,000 to $70,000 base and the combined fixed ad variable taking total remuneration up to between $75,000 and $95,000.
"The more complex sales roles earn 25 percent to 50 percent of their salary in variable pay. Currently 10 percent of organisations pay sales incentives in excess of 50 percent."
Rothschild says some of the packages are up to three times base salary - for example base of $50,000 and a sales incentive programs around the plans to improve customer service and to attract and retain employees.
Bob Davenport, a lecturer in sales compensation design at the INSEAD business schools in France and Singapore, and the Wharton business school at the University of Pennsylvania, says salespeople in different cultures have different reward perceptions and motivations (see graph below).
He points out that Australian salespeople tend to be motivated more by their ability to use specialist training and the prospect of a new and exciting job than the opportunity to earn a lot of money. This contrasts with salespeople in the US, United Kingdom, Singapore and Chile who are more interested in the money.
Davenport, who has designed plans for more than 200 sales organisations and is vice-president of sales force effectiveness for the Hay Group, says salespeople are distinguished by a desire for high achievement.
While salary is seen as a strong measure of success, the achievement motive is "ignited" by giving salespeople the responsibility for the outcome of a sale, and by management providing them with timely feedback.
Extracted from 'Deal or No Deal' published in BRW 13-19 March 2008 page 31.
If you'd like to know what the 'X factor' is, check out Applicant Screening and Hiring Sales Performers and/or visit www.SalesRecruiters.com.au to access a complete methodology for recruiting and selecting top performers every time. While everyone else is lamenting the shortage of sales talent, we continue to place top flight personnel regardless of labour market perceptions. If your people are not performing; maybe they need sales training, or maybe they need replacing?!
"Will you join our board?" When you take that call, bite your lip. No matter how blue-chip, how do you know this company isn't set to swirl into crisis? If it is, do you want to be in its vortex?
1: MAKE 'NO' YOUR DEFAULT
More than 200 of the world's top business people have confided to me what they'd now do differently to avoid past crises. A frequent response from chairs and non-executive directors is: "I'd never have accepted that [expletive] relationship." So why did they? Many sheepishly admitted they felt flattered. Feeling chuffed charms you and stops you digging. The offer of a directorship demands cool investigation, not the airy frisson from a celebrity's kiss.
Don't bother asking: "How will I add value?" It sounds sensible, yet many badly burnt directors swear they'll never ask this again. It invites fawning, helping to puff you up and to seduce you. You'll know which of your qualities they're chasing if you mute the chairman's call and scroll this list: technical or market know-how, sector experience, regional insight, relationships, gender, reputation or money. If that doesn't help, do ask. Maybe they're after your namesake. It happened to me!
2. DON'T DO IT FOR MONEY OR STATURE
Specifically ask yourself why you want this board role. Test your answer confidentially with a trusted but sceptical partner or friend.
The pay can seem enticing for a part-time job, but when viewed against the responsibilities, it rarely is. Even a directorship of a blue-chip might not feel so great when it's fading into a James Hardie. A growth company, a Centro perhaps, has less allure if it faces refinancing problems. And, don't forget the opportunity cost: a more suitable company might be around the corner.
The mirror rule for a company is: "Don't take a director who needs to be one." When trouble strikes, they'll fuss more about their job or reputation than about shareholders.
You owe yourself and the company a more credible response than "I needed the money" or "It was my entree into the club" - the answers respected directors gave for boards they now view as poisoned chalices. One high profile director's reason for joining a board currently under fire with little enquiry was "I knew the people," though only socially. Former US president Ronald Reagan had relevant advice: "Trust, but verify."
3. TAKE THE COMPANY'S PULSE
Get the equity analysts' reports for the past year
for a flavour of market views, but don't lean on them. Some had Enron as a buy even near the end.
Most potential directors seek one-on-ones with the CEO and CFO, as well as private meetings with both external and internal auditors. Yet, few have such meetings with the other directors and even fewer with the CEO's direct reports. Why not check if they respect the CEO, test the culture and elicit the challenges on the horizon? If the CEO resists this, it's an omen of lacking boardroom transparency.
Rarely do board candidates seek out recent former directors or senior executives. Sprinkle their insights with salt, for sure, but they may help your decision.
If the company pulse still feels healthy, take the board's pulse. Check the board's self-assessment review and sit in on an actual board meeting and audit committee meeting. Is this a group you'd enjoy working with? Would you trust them in the trenches with you?
4. FOLLOW THE CASH
Before you meet the CFO and the auditor, review the financials. Companies can fail even if they show accounting profits, so check cash flow. The actual tax rate is also a flag. If it is way lower than 30 percent, check why. It can point to accounting manipulation.
Ask the auditor these questions: Where do the company's accounting policies sit on the conservative to aggressive spectrum? How difficult are the negotiations over the final audit report? What else should an incoming director know?"
5. PUT SOME SKIN IN THE GAME
Consider investing a sum that's significant to you in the company's shares - not just because it's the right thing to do, as I advocated in April's Company Director, but to help hose down any emotion still tilting your decision. If after seriously contemplating this, you baulk, what's that telling you?
6. CONDUCT HEALTH CHECKS
If you do say yes, as part of your induction and on an ongoing basis, visit a variety of operations and with management, visit customers. Not only will you gain more depth about the company and its strategy implementation, you'll meet rising stars. And, you may also spot early warning signs of trouble.
As published in ‘Company Director' by the AICD, Vol 24, Issue 4 for May 2008, page 16, by John M Green.
If you’d like to investigate the benefits of forming a Board for your business, read further about company Oversight, Board Due Diligence, and/or forming an Advisory Board. Then call us on 08 9271 7661 to find out why every business that turns over more than $1m pa should have a properly composed Board of Directors.
According to research that will be less than an ego boost for some, employees ay they often leave their managers, rather than the company itself.
The results from research into the correlation between employee satisfaction and performance by consultants Wilson Learning suggest that the leadership skills of managers are the greatest source of employee fulfilment at work.
"If managers fails to create job satisfaction within their teams, people feel unmotivated and negative," says Michael Leimbach, Vice -President, Research and Design, Wilson Learning Worldwide.
"Managers have the power to create a team that is totally engaged, or they can stifle work fulfilment and drive people to leave their jobs."
The research, carried out across nine different industries in 14 separate studies, showed:
managers and leaders have the major impact on the fulfilment of employees
between 56-83 percent of fulfilment could be predicted from the practices of the manager
when staff fulfilment was high, so was performance
39 percent of bottom-line performance can be attributed to employee fulfilment.
The research identified the individual leadership practice in each industry that made the greatest contribution to employee fulfilment. Recognition was the most frequent identified (in five studies). Feedback and support were also identified (three studies each), as was direction (two studies). Goals were identified as the largest contributor in one study.
The studies showed that a person's manager is the primary contributor to fulfilment in an organisation. Pay, compensation, work conditions, promotions and benefits are important, but are more often associated with creating dissatisfaction than with fulfilment. In other words, even when these conditions are perfect, the elimination of dissatisfaction doesn't make the employees fulfilled, only no longer dissatisfied.
Extracted from 'Management Today' magazine published May 08 page 4.
Read further about leadership and management or call us on 08 9271 7661 for a comprehensive diagnosis and proposal to ensure your valuable personnel are being effectively deployed.
"However beautiful the strategy, you should occasionally look at the results." Winston Churchill (1874-1965)
For every great idea that becomes a world-beating product, there are hundreds if not thousands of other great ideas that go nowhere. To steal a line from a television scientist, "Why is it so?"
I have recently been reading about and seeing presentations of start-up companies looking to take the leap in their development and possibly going offshore. All are looking for funding to do so. Almost all of the ideas are good and some are actually making money but probably only one or two of the owners have done the work required for success.
What seems to be missing is a pragmatic, business-like approach, including a realistic sale and marketing strategy. Too often, the idea which formed the basis of the company is owned and guarded jealously by the founders who are so wedded to the concept or idea that they see it almost as an extension of themselves. In other words, they are not able to take the hard decisions required in order to take the next step in the life of a business.
Getting rid of staff who do not fit, doing the due diligence on others with similar ideas, working out where the money will come from for the growth phase, being prepared to "give away" part of the business to get the capital - and taking tough decisions such as handing over control to someone with the necessary skills and without the emotional baggage most founders have for their "baby" - are just some of the vital aspects.
There are other things, such as a failure to protect a product or idea, that let down many founders. Intellectual property that forms the foundation of a business can be taken by former staff or competitors who see a good opportunity when it presents itself. Trademark protection is not difficult and is a vital part of the development process. Yet many companies don't have it., arguing they are too busy building the business.
Having a strategy for not only the future of a product or service but also for the future of the founders is sadly lacking among Australian start-up companies. No exit strategies leaves founders locked into a business with no idea how they get back their money and time.
Looking beyond the now is important as market conditions will change, there will always be competitors and funds will always be required for growth. The approach of so many Australian businesses, "if we build it, they will come", sadly just won't happen.
Statistically, there is a greater chance of being killed in a car accident driving back from buying a lottery ticket than there is actually winning the lottery. The chances of business success are probably about the same without the groundwork and the right business attitude. It is little wonder that banks and venture capitalists are not keen on backing small to medium businesses when the sector has that sort of record.
Extracted from the 'Blackie' column in BRW 1-7 May 2008 page 53.
Executing flawlessly in either employee engagement or customer engagement is not sufficient to create enhanced value for an organisation, according to Dr John Fleming, chief scientist customer engagement and human sigma at Gallup.
Instead, both areas must work in harmony to have real impact on profitability he said. Speaking at the recent launch of Gallup's new HumanSigma management approach - which focuses on more effectively managing the moment where employees interact with customers as a driver of success - Fleming said that if these two departments work together they can have a huge impact on profitability.
The study shows that if you fully engage your employee but not your customer you get about a 70 percent boost in performance. If you fully engage your customer but not your employee you get about a 70 percent boost in performance. If you engage both, you get a 240 percent boost in performance.
"When the body's heart and respiratory system work in harmony they create the vital sign of blood pressure, a real indication of how your systems are working together, The same is when employee engagement and customer engagement are working in harmony it creates the vital sign which is finance or performance," said Fleming.
Companies who have both engaged employees and customers outperform their top five peers by 26 percent growth and 85 percent in sales growth according to a Gallup study which measured customer engagement and employee engagement in 2000 different business units within 10 companies.
"Employee engagement is often owned by HR and customer engagement owned by marketing. We believe that within the next 5 to 10 years we will be seeing more companies begin to merge their
functional silos around their human systems into singles organisational entities," he said.
Effective customer engagement is fundamentally emotional, according to Fleming. It was found that rationally satisfied customer behaviour is no different to dissatisfied customers. The key value add is emotionally engaged customers and this is due to the fact that human beings make decisions based on feelings rather than facts.
"One of my goals in life is to eradicate customer satisfaction management from the business landscape because I do believe it's bad for businesses to focus on that, it doesn't return the value that most companies think it does," said Fleming.
Furthermore an emotionally engaged customer delivers about a 23 percent premium in terms of revenue growth and profitability. An actively disengaged customer delivers about a 13 percent discount. So they cost you money to have on the books he said.
In Australia 21 percent of employees are fully engaged and about 18 percent are actively disengaged. So for every one person who is contributing, innovating and adding value to the firm, there's another employee taking all that apart, said Fleming. A further six out of 10 employees are what he described as 'clock-watchers'. They show up, don't give any discretionary effort and do not add anything to the bottom line.
"If you want to drive high levels of employee engagement you have to deal with more fundamental levels of the emotional connection that employees have with your business," he said.
This involves measurement of their basic needs, such as do you have a best friend on work, do you have the tools needed to do your job, do you have management that care about you and do your opinions count in work?
Extracted from the Human Resource Magazine, Issue 151, 29 April 2008, by Sarah O'Carroll, page 1 and continued on page 8.
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