Author: John Hollon

Building a great company is a tough job.

    Dick Landgraff, a vice president of the Ford Motor Co., summed it up pretty well a few years ago when he said, “It’s very difficult in this business, and I suppose in a lot of businesses, to try to be the best. Because to be the best means you have to spend more, you have to work harder and you have to have some vision. And those things are not in abundance in any company as far as I can see.”

    A lot of businesses talk about wanting to be the best, but very few actually know how to get there. That’s what makes Workforce Management’s annual Optimas Awards so special.

    Put simply, the Optimas Awards recognize initiatives that create positive business results for organizations. Since 1991, some 150 businesses of all sizes–from Fortune 1,000 organizations to entrepreneur-driven small companies–have won Optimas Awards for creatively adapting workforce management practices to deliver stronger, definable corporate returns.

    The list of the Optimas general excellence winners is impressive and includes companies like Levi Strauss, Hewlett-Packard, AT&T, McDonald’s, Texas Instruments, the Container Store, Sears, Google, SAS Institute, General Motors and Wells Fargo. But the Optimas Awards recognize more than just general excellence; they also recognize that astute workforce management can be practiced anywhere–in family businesses and the public sector, in the Fortune 500 and in small organizations, in big cities and on the farm, in industries of every sort.

    Regular readers of this magazine may be getting a sense of déjà vu right about now. Not too many months ago, in our March issue, we announced the 2005 Optimas winners. The list included Wells Fargo & Co. (the general excellence winner), Herman Miller, Convergys, Sun Microsystems, UPS, Bell Canada, Saint Francis Medical Center, Adolph Coors Co., Progeon and the Los Angeles Unified School District.

    Now we’re starting the Optimas Awards process all over again and are looking for those organizations that will be named Workforce Management’s 2006 Optimas Award winners. Previous winners have been a diverse bunch, and their accomplishments helped open new markets around the world, reinvented city government, slashed bureaucracy in the federal government, established Mexico’s first HMO, took health care to rural America, revitalized failing business units and improved the acquisition process.

    The 2006 Optimas winners will be notified this December and honored at the award ceremonies in New York in March. To enter your company, go to www.workforce.com/optimas for a complete list of categories and contest details. Nomination forms must be returned by September 16, and winners must demonstrate how their initiatives achieved measurable business results in response to the organization’s business needs, issues or challenges.

    Optimas Award winners are “among the best” (which is what optimas means in Latin) and reflect the leadership, vision and energy that define workforce management.

    Organizations frequently ask just what it is that the Workforce Management editors look for in choosing Optimas winners. I like to respond to that by pointing to a quote from Wells Fargo CEO Dick Kovacevich about how his company pulled off a massive merger and yet managed to minimize layoffs (by retraining staff) as well as increase profits by 13 percent. “Everything we do at Wells Fargo starts with our people,” Kovacevich said. “Why? Because when people are properly incented, rewarded, encouraged and importantly recognized, they provide better service, generate more sales and produce even better business results. This generates more revenue, which results in greater profits.”

    Kovacevich’s words capture what the Optimas Awards are all about. Is your organization doing something equally worthy and impressive, all while delivering superior bottom-line business results? If it is, I hope you’ll tell us about it and enter your company or organization, and perhaps be one of our 2006 Optimas Award winners.

Workforce Management, August 2005, p. 8 —Subscribe Now!

Most people don’t think of Bill Cosby as a management expert. But last month, The Cos seemed to strike a nerve and impart a little management wisdom when he told one of his famous stories to some 12,000 HR professionals attending the Society for Human Resource Management conference in San Diego.

    Cosby told the story of two geniuses and two human resources professionals at the gates of heaven, all trying to get in. The gatekeeper said there was a simple way to gain entry: just give God a question that he couldn’t answer. If you could stump him, you got in.

    The geniuses huddled and talked back and forth for a while, but no matter how hard they tried, God always had the answer to their questions.

    The two human resources people, on the other hand, huddled for just a moment, scribbled down a question on paper and handed it to the gatekeeper. He reappeared a few minutes later and said they had done well. God was stumped, so they could enter. The geniuses were puzzled. What, they asked the gatekeeper, could the HR people have possibly been able to ask God that he couldn’t answer?

    It was simple, the gatekeeper said: “They asked God when the company they were working for was going to get their shit together.”

    Cosby’s story got a huge laugh, as you would expect, because it exposed an underlying but very basic truth: Businesses everywhere can’t seem to get their act together. The workforce knows it. The HR staff knows it. Probably even the customers know it. Who doesn’t know it, sadly, is usually the CEO or other well-paid top executives who seem oblivious to the problem.

    Jim Collins knows all about this. He has studied businesses for years and written about what separates the great ones from the not-so-great in books like Good to Great and Built to Last. He recently told Fortune magazine that a very typical problem in business is that “the CEO has already made a decision, and his definition of leadership is to get people to participate so that they feel good about the decision he’s already made.” That’s a bad way to manage, Collins says, because “you’re ignoring people who might know a lot that would be useful in making the decision.”

    “You’re accepting the idea that because you’re in the CEO seat, you somehow know more or you’re really smarter than everyone else,” he says. “But what you’re really doing is cutting yourself off from hearing options or ideas that might be better.”

    Collins’ research and Cosby’s story make the same basic point: People down in the trenches of a company understand the business a lot better than the folks in the executive suite give them credit for. They also have a lot of good ideas about how to make the business operate better. Problem is, they frequently aren’t asked what they think. Or worse, they are handed down decisions without being given an opportunity to have any meaningful input.

    I heard this a lot from some of the conference attendees in San Diego. They have strong opinions on how to make the business they work for a lot better—if they only had more of an opportunity to voice them sometime before they reach the pearly gates.

Workforce Management, July 2005, p. 6 —Subscribe Now!

Want to demoralize and marginalize a large and once-vibrant workforce? Here’s the recipe:

• Take a major player in a mature industry;

  
  

• Saddle it with a high-cost structure built up over many years of matching what the other guys did;

  
  

• Mix in several generations of bad managers making shortsighted decisions;

  
  

• Deregulate;

  
  

• Engage in a never-ending price war with lower-cost competitors;

  
  

• Systematically penalize your best customers with red tape, high prices and dumb rules;

  
  

• Demand that employees take pay cuts in exchange for profit-sharing and better pension benefits;

  
  

• Bake for 15 years, then file for Chapter 11 bankruptcy protection and get a court to let you dump the pension obligations on the federal government.

  
  

    Sound familiar? It should, because it happened at United Airlines, where last month the company got court approval to unload $6.6 billion of pension obligations for 120,000 current employees and retirees on the Pension Benefit Guaranty Corp. (translation: the federal government) and, ultimately, American taxpayers.

    The United story got me thinking about my wife’s friend who is a United Airlines ticket agent in Honolulu. Back in the mid-1990s, when I lived in Hawaii, I remember commiserating with her about the latest round of salary reductions United employees were then taking to save the airline. “I don’t like it,” I recall her saying, “but the tradeoff is that I am getting profit-sharing and a better pension. I may be losing money now, but I’ll get it back when I retire.”

    Her plan sounded good, but not anymore. Now that the airline has pushed its pension obligation off on the PBGC, current and future United retirees will get no more than $45,600 a year in retirement. One former United pilot told The Christian Science Monitor that his six-figure pension will probably drop by about 75 percent.

    If you didn’t know it before, the United pension dump should make it clear: The future of the private pension is bleak. In 1980, nearly 40 percent of American workers in the private sector participated in a retirement plan. Today, that number is down to 20 percent, and more than 75 percent of those plans are seriously underfunded. Secretary of Labor Elaine Chao estimates underfunding at some $450 billion–a huge chunk that could eventually get dumped on the PBGC.

    There may be a silver lining in all of this, however. Over the same 25-year period, the share of workers participating in personal retirement accounts, such as 401(k)s, has risen from 7 percent to 28 percent. And in one of those sign-of-the-times moments, at the same instant that United was dumping its pension plan, Hawaiian Airlines was signing a new deal with its pilots union that converts its traditional pension to a defined-contribution plan for pilots under age 50.

    Two things jump out at me from all this:

• Like it or not, workers need to take personal responsibility for their own retirement and not count on their employer to do it.

  
  

• Companies need to do a lot better job helping workers adjust to life in a 401(k) world. Whether that means automatic enrollment, more education or a stronger focus on diversification, management needs to do more to help workers focus on building assets for retirement.

  
  

    It’s clear from the United action that no private pension is really safe. No matter how big or secure a company may seem, companies get bought, merged, changed and sometimes just go away. As one columnist said in The Wall Street Journal, “Whether or not you have a pension plan at work, consider United a wake-up call. Assume you alone are responsible for your retirement.”

Bad behavior, especially in the workplace, seems to be making news again.

    On a recent morning, I read these stories within a few pages of each other in The Wall Street Journal:

    On one page, there was a story about how the nomination of John Bolton to be the new U.S. ambassador to the United Nations was stalled in a Senate committee, largely because of allegations by some people who had worked for him about his bullying and abusive behavior.

    A few pages later, there was a column discussing how mystifying it is that unqualified and abusive managers can continue to keep their jobs despite a clear track record of bad behavior and frequent abuse directed at people who work for them.

    Bad business behavior isn’t any big surprise, of course, because it has been going on for years. What is surprising, however, is that so much is being written about it–and how little it seems to matter. Being nasty, brutish and short with subordinates has long been a basic staple of corporate behavior, made famous by executives from Leona Helmsley to Michael Eisner.

    I’ve had my own experiences with this phenomenon.

    One guy I worked with had no discernible skills at all except for his ability to bully and badger people. The only things he ever really produced were the threatening memos to underlings, and he spent most of his workday berating people behind closed doors as he read, line by line, from what he had written. He liked to start conversations with the vague but subtly threatening question “Are you happy with your job?” The office wags had a nickname for him: Torquemada.

    At another company, one of the top executives insisted on scheduling one-on-one meetings with subordinates at odd times, say, 7:30 on a Friday evening when the employee was planning to attend her son’s annual football banquet. This was a torturous test of loyalty, and the executive used to brag that it worked because it showed who was truly “committed” to the company. “Committed” employees gritted their teeth, passed on the football banquet, and went to the meeting. The “uncommitted,” who dared to put their family first, eventually got canned.

    Now, I’m not comparing John Bolton with these bad bosses. Bolton’s actions toward others, the Journal editorialized, were, at their worst, simply “rude.”

    Being rude isn’t a crime, of course, but this line of defense makes me wonder: Shouldn’t we expect more of those who aspire to higher positions of power and authority? Isn’t it a given that those who manage others are expected to be kinder, more understanding, more civil and, yes, less rude?

    Peter Drucker made this point in his classic 1954 book The Practice of Management: “A manager develops people. Through the way he manages he makes it easy or difficult for them to develop themselves. He directs people or he misdirects them. He brings out what is in them or he stifles them. He strengthens their integrity or he corrupts them. He trains them to stand upright and strong or he deforms them.

    “Every manager does these things when he manages–whether he knows it or not. He may do them well, or he may do them wretchedly. But he always does them.”

    All managers, from the CEO down to the lowest line-level supervisor, have a choice in how they treat those who work for them. As Drucker observed, the manager can either help make the workforce better or worse, either more focused and engaged in the job at hand, or preoccupied with what the boss is going to do to them next.

    Sometimes those decisions are good, sometimes they are bad, but rarely are they forgotten.

    Just ask John Bolton.

Workforce Management, May 2005, p. 8 — Subscribe Now!

I’m a big fan of “The Apprentice,” the reality TV show starring billionaire Donald Trump. I like it because of what it shows us about the business world, namely what a seriously dysfunctional workplace looks and acts like.

    Although the show purports to be about business, it has about as much to do with running an enterprise as “The Sopranos” has to do with family relationships. The show is really about individualism and winning no matter what it takes. Competitors on “The Apprentice” will say and do just about anything to win and seem to care very little about who they may have to step on to do it.

    Last fall, Stacy Blake-Beard, an associate professor at the Simmons School of Management in Massachusetts, told the Boston Globe, “The message of ‘The Apprentice’ is that to the extent that you look out for yourself above all else, you will be rewarded. Organizations talk about teamwork, but few of them promote it. They promote the star.”

    There are lessons to be learned from “The Apprentice,” however, and they can be applied to any business and workforce anywhere.

    Lesson No. 1: Leadership–even a little bit of it–matters. Although it is largely an individual competition, it’s not surprising that the winners of “The Apprentice” were the people who showed some basic team leadership skills, at least at a very minor level.

    The pattern was broken somewhat with Kelly Perdew, the latest “Apprentice” winner. He had great credentials as a West Point grad and Army intelligence officer with an MBA and law degree from UCLA. In his final task, Perdew had to stage a charity polo tournament by managing some of his defeated “Apprentice” competitors.

    Despite his impressive background, Perdew seemed to lack the leadership spark, choosing to park himself behind a laptop computer where he endlessly crunched numbers rather than managing his workers. He seemed to resist much personal direction of his team, and it is testament to the complete lack of leadership skills showed by his competitor that Perdew’s half-hearted, last-minute management of his people was enough to win.

    Lesson No. 2: Second-guessing is fatally disruptive. “The Apprentice” is a show where the second-guessing goes nonstop. Competitors constantly second-guess one another’s motives, appearance, work habits, leadership skills and everything else. And Trump is the worst, using the weekly boardroom appearance by the losing team as an opportunity to second-guess everything before he summarily fires someone.

    In this regard, he is like the boss from hell who gives little to no guidance to his staff about what he wants and then cans someone when she can’t read his mind. His actions in the boardroom devastate and demoralize the losing team each week–just as they would do in real life.

    Lesson No. 3: It’s good to be a selfless team player (even if Trump doesn’t think so).

    Each week on “The Apprentice,” two of the competitors are designated as “project managers” for that week’s task. The manager of the winning team gets a small bonus: They can’t be fired if their team loses the next week.

    This past season, one winning project manager chose to waive his right to be protected from getting fired the next week in an attempt to build some esprit de corps among his losing teammates. He thought his solid performance in a losing effort would keep him from getting fired, but his strategy blew up when Trump pounced on his “weakness” and canned him for his selfless action.

    Although this made for great television, it would have been an act of madness in a real workplace. Getting people to put the larger team above their own personal self-interest is one of the real keys to success for most any business and not a reason to fire someone.

    But firing people adds drama, and that’s what makes “The Apprentice” fascinating. As the New York Times put it, “The show’s firing ritual is somehow more plausible than voting people off islands. It reflects the musical chairs quality of corporate life: top management keeps taking away seats so that only people no one would ever want to work with are left.”

    Somehow, I think that’s the real business lesson from “The Apprentice” worth remembering.

Workforce Management, January 2005, p. 8 — Subscribe Now!

I’m the type of manager who struggles every year with buying Christmas presents for my staff. It’s always the same problem: Do I get the same thing for everyone, making it easier on me, or do I try to find something special for each person, complicating my task but making the gift more meaningful?

    This has been on my mind because I just read something by Bob Nelson, president of Nelson Motivation Inc. and co-author of Managing for Dummies, on the age-old tradition of companies giving employees turkeys at the holidays. When you give every employee a turkey, Nelson says, “you are rewarding presence, not performance. To many employees, the practice thus becomes a mere rite of survival: they made it through another year with the company.”

    Sometimes, just surviving another year is something to celebrate. That’s probably true for American Airlines and CEO Gerard Arpey, whom we feature in “Back From the Brink” in this issue. Not only is American, the world’s largest air carrier, struggling with record-high fuel prices and the terrible economics of the airline industry, but Arpey is still fighting to re-establish trust with the company’s large, unionized workforce–a trust that was nearly broken by shortsighted management decisions in the past.

    To his credit, Arpey seems to understand how important his workforce is. He talks about tapping into the “unique perspectives and insights” of his workers to better serve customers and rebuild the airline. Although American has many jaded employees who have heard a lot of this talk before, Arpey seems to be making it work. Not only is American slowly rebuilding itself, but the air carrier has managed to stay out of bankruptcy–no mean feat in this day and age.

    When I read what Arpey has to say, I’m struck by the feeling that it didn’t have to come to this. No matter what product or service a company may offer, its most important asset is its people. They are the one sustainable competitive difference that can give a company an advantage over another. Why did it take so long for American Airlines–and so many other businesses–to figure this out?

    Howard Schultz is one guy who figured it out a long time ago. In this book, Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time, Starbucks’ chairman says, “I know, in my heart, if we treat people as a line item under expenses, we’re not living up to our goals and our values. Their passion is our number-one competitive advantage. Lose it, and we’ve lost the game.”

    Enlightened corporate leaders who embrace this philosophy have seen how the benefits of building on people as a competitive advantage pays huge dividends. It’s why Southwest Airlines continues to thrive while rivals like American struggle just to stay out of bankruptcy. And it’s why Schultz has been able to build Starbucks into a powerhouse by doing something that people would have laughed at 20 years ago–charging $3 to $5 for a cup of coffee.

    As I struggle with my own challenge of what to give the staff this year, I keep coming back to the words of Bob Nelson, who says, “If we know one thing from years of research about human behavior, it is this: You get what you reward. …Ironically, the best motivators have little if any cost, requiring only some time, thoughtfulness and commitment on the part of the employee’s manager.”

    You get what you give. It’s a simple philosophy and a good lesson for managers to remember this month, and all year long.

Workforce Management, December 2004, p. 12 — Subscribe Now!