Category: Archive

Posted on

Never Fear the Mystery of the Fluctuating Interest Rate

One of the mysteries of life in the United States today is when the Federal Reserve Board will next raise or lower interest rates. Economists find it as difficult to forecast as the weather. It’s like watching mercury in a thermometer move up and down, day after day, year after year. There’s not much you can do but sit there and watch, prepare for the worst and hope for the best.


Given how important interest rates are to the economy, businesspeople every day struggle to make sense of it all. One quarter-point change up or down can lift a company’s spirits sky-high or send them spiraling into a bottomless depression. This may be a slight exaggeration, but it’s undeniable that change is an expected characteristic of the economic environment in which U.S. companies operate, and financing your company is getting more complicated all the time.


Low interest rates lift economy.
According to conventional theory, rising interest rates increase the cost of borrowing money, and thus cause a drop in investment because it becomes too expensive to borrow money—money that could be used to expand plants, finance research, acquire firms and produce goods and services.


Lately, though, the economy has been getting a boost from relatively low and stable interest rates. Cheaper loans are good news if you’re investing in new projects, borrowing to make long-term investments to accommodate growth, and giving workers annual raises.


“Oftentimes, companies have to rely on loans to continue doing business,” says John Wachowicz, co-author of Fundamentals of Financial Management (Prentice-Hall, 1998). “A low-interest rate environment makes it easier for businesses to raise capital, which means it’s a great time to conduct business.”


Projects that weren’t feasible when interest rates were high are reasonable in a low-interest rate environment. More or less, this means most people have jobs.


This type of labor market makes it tough for companies to hire experienced workers. The unemployment rate is lower than it has been in years. Companies are struggling to find people, and they’re having to offer additional incentives over what they’re accustomed to offering to get the same quality of worker. Things could be worse. But don’t think for a moment that the current low-interest rate environment will last forever.


It’s time to think ahead.
Of course, most businesspeople would rather operate in a low-interest rate environment than the alternative. But let’s not forget the interest rate spike that moved the prime from 11 percent in late 1980 to 21.5 percent in 1981. Some companies are starting to think about how high interest rates in the future might sting.


“Many companies are taking this opportunity to adjust their capital restructure,” says James W. Wansley, head of the financial department at the University of Tennessee in Knoxville. “Everyone knows debt is less expensive than before, and the interest companies pay for debt is tax deductible. Companies should use this time to clean up their balance sheets.”


This isn’t an entirely new notion, but no one knows for sure when the Federal Reserve Board will jerk the interest rate’s levers. The worst mistake any company owner or manager could commit would be to pay no attention to the warning signs. Better to monitor worldwide economics and political trends than to ignore everything and be caught unprepared.


It’s easy enough to get carried away with a booming economy and low interest rates. But maybe it’s just a matter of time before interest rates make a significant move in the other direction. Clearly, it’s dangerous to assume that interest rates will stay at their current level, which means it’s best to take precautions now when borrowing money because even economists can’t see the smudges on the economic horizon.


Workforce, January 1999, Vol. 78, No. 1, p. 111.


Posted on

Exceptional Customer Service Takes the ‘Ritz’ Touch

In an industry plagued by low wages and a turnover rate estimated between 51 and 300 percent (depending on the source), and where the difference between four stars and five stars can turn on bed linen and turndown service, the Atlanta-based Ritz-Carlton Hotel Company attributes the success of its 35 hotels from Boston to Bali on a rigorous customer service training program.


The Ritz-Carlton serves the top echelon of the traveling market. For that reason, the company throws a lot of money and energy at training its 16,000 employees on concentrated dosages of the Ritz credo to “fulfill even the unexpected wishes and needs of our guests.” Of course, maintaining such standards is no easy challenge. You can’t be expected to provide extraordinary service with an ordinary approach to customer service.


To learn more about how the company trains its employees on the “gold standards” of customer service basics, WORKFORCE interviewed Leonardo Inghilleri, senior vice president of human resources for the Ritz-Carlton Hotel Company.


Why does Ritz-Carlton feel it’s important that every one of its nearly 16,000 employees undergo rigorous customer service training?
Customers who come to our hotel pay a premium for perfection. We have this tremendous challenge to meet and exceed customer expectations. That’s why we discuss customer service every single day of our lives. It starts with how we select our employees. We use scientific interviews to understand if an individual has the necessary behavioral traits to make him or her successful in our company. Only one of every 10 applicants is hired.


What sort of traits?And how do you ‘scientifically’ determine if a prospective employee has these traits?
A person who works for us has to be hospitable, quality-oriented, attentive to details and so on. We’ve identified the top performers by job (waiters, chefs, housekeepers, etc.), and with the help of a psychological test we’re able to determine the ideal profile for each specific job. If you want to be a successful housekeeper, for example, you have to have certain talents; and if you don’t have these traits, you’re not going to be hired. There also has to be the desire to use your talents, which a lot of people don’t have. We interview each one of our employees in a scientific way to allow us to understand if that person possesses these specific talents.


Can you give an example of the ideal profile for, say, a housekeeper?
Our housekeepers have to have exactness, they have to be attentive to detail and they have to have pride in their work. This is important because people need to feel good about their performance.


A doorman, on the other hand, has to be more of a people person. He needs to be able to send a friendly message to a customer when he’s still 100 feet away. It’s called ‘relationship extension.’ You don’t necessarily look for exactness in a doorman.


What sort of orientation does the Ritz-Carlton put its employees through?
An employee who wants to work for the Ritz-Carlton will desire to provide exceptional customer service. But the concept of desire can only exist if we’re capable of enlisting this person into the texture of our company.


Our orientation happens on the first day of employment. That’s when the person is more responsive to behavioral changes, when you can drive the company’s business philosophy into the person’s psyche. If you wait too long, the window of opportunity is closed. Therefore, from day one, we create an environment that’s caring, supportive and energizing.


For example, when you’re a new employee, you’re assigned a trainer who’s with you all the time for the next four weeks. The trainer has the responsibility to explain the tasks, make you do those tasks and review your performance.


How are the 120 hours of customer service training actually divvied up?
It depends. Our entire training system is a combination of two key elements: technical skills and the Ritz-Carlton customer service philosophy.


Technical training is task based. By ‘technical training,’ I mean how to service in a fine-dining restaurant or how to make a bed according to our standards. Learning how to perform a task may last an hour, or a week, and then it’s reviewed. Ultimately, each employee is certified by the trainer. There may be 19 steps to making a bed. Until you make those beds perfectly, you’re not going to earn a certification.


Customer service training is a little more complicated. We train our people how to resolve guest challenges. After all, it’s an imperfect business we’re in, and a lot of things that can go wrong will go wrong. A toilet might get clogged. A television at a certain point will break down. You have to train your people to instantly pacify our guests.


As a 24-hour, seven-days-a-week business, how do you train people to think on their feet?
You really can’t train a person to think on his or her feet. You have to select a person who’s quick in his or her thinking. First and foremost, the person has to be confident in the sole knowledge of his or her job. You can’t expect an employee who isn’t competent in his or her own skills to solve a problem. The way to teach people to think on their feet is through proper selection, strong training and the creation of the desire to satisfy a customer.


We also give them endless hours of resolution techniques for guest problems. We empower our employees to resolve any customer challenge, no matter what. You don’t pass the buck. If you’re a waiter and you hear a customer complaining about a problem with his TV, we expect you to call the engineering department and report the problem, then call back the guest to make sure the problem was resolved.


This creates unbelievable loyalty with our customers. We actually found that our most loyal customers are those who have had some minor problem, yet had that minor problem quickly resolved by a competent employee.


How do you reinforce this type of training?
Traditional companies abandon the person after orientation—but not at the Ritz-Carlton. On a daily basis at the beginning of every shift, we have a lineup meeting. Every employee in our company goes through a 10- to 15-minute meeting in which several things are reviewed, particularly why we’re in business and our continued commitment to ‘gold-standard’ customer service. During these lineup meetings, we also discuss topics sent from the corporate offices, and the same topic is discussed at every one of our hotels throughout the world on that particular day. This creates an ongoing organizational alignment. If you don’t repeat the message, people forget. How do you energize on an ongoing basis someone who has to clean 14 rooms a day? You have to discuss the principles of the company on a daily basis.


What sort of financial and time commitments are we talking about here?
It’s a huge investment on our side. Think about it: Every employee spends 15 minutes every day in a meeting. Some might see this as a 15-minute loss of productivity, but we believe these are the most valuable 15 minutes of the day. We use this time to recognize and celebrate people, and create a sense of belonging. Of course, we also offer our employees competitive pay and a challenging environment. And if they embrace our philosophy, their opportunities for growth and advancement are unlimited.


Does this sort of commitment yield the appropriate results?
Absolutely, otherwise we wouldn’t do it. It takes tremendous effort and discipline from our management to accomplish these goals.


What exactly do your employees come away with after 120 or more hours of customer service training?
From the training, they become professionals in the hospitality industry. In this industry, you’re either professional or you’re a servant. Making beds and cleaning toilets and serving meals are professions if they’re done with pride. We don’t create servants. We create professional employees who have the desire to provide exceptional customer service, and who want to be part of our company.


Are there any special considerations because it’s a high-turnover industry?
Turnover is the single biggest problem of an employer in this industry. But we choose to have a good compensation package to attract and retain the right people. We feel that a successful company is one that’s both a learning and a teaching company. You have to learn from your customers, your employees and the changes in society. At the same time, as a teaching organization, we provide our people with new skills, thereby enriching their lives both personally and professionally.


Does the fact that you have 35 hotels all over the world cause any sort of cultural problems when hiring and training employees in a customer service industry?
We had to focus a lot on the cultural aspects. We’re not an American company that goes into another country and says, ‘This is the way we do business.’ But customer service transcends culture. We don’t focus exclusively on the manufacturing aspects of the business. What we leverage is the sense of hospitality.


Every single culture has its own sense of hospitality. In Bali, we will not ask our ladies and gentlemen to say good morning and good afternoon. Instead, they’ll greet in the traditional way by joining hands and bowing. We try to identify what makes that specific country special from a hospitality point of view. And then we adapt to its citizens’ ways of being hospitable.


How can you make the program more effective?
What we’ve done recently is improve the skills of our facilitators. Our biggest fear is that our lineup meetings become repetitive, and that there’s no passion or emotion. Recently, we’ve done a major retraining of all the facilitators to make sure they’re capable of engaging the participants, enlisting their hearts and souls. It’s not just a download of information. It should be a passionate and emotional moment that re-energizes each employee for the day.


We also survey our employees. Recently, management said that from a personal growth area, we as a company were not satisfying their needs. So we identified programs that helped improve their personal growth. We strongly believe that if we don’t satisfy the needs of our workers, they’re not going to satisfy the needs of our customers. We also believe a better human being will be a better professional.


Workforce, January 1999, Vol. 78, No. 1, pp. 99-102.


Posted on

IWorkforce Online-I Mechanical Requirements

Advertisers can provide “Web ready” artwork according to the following specifications. Materials not meeting the specifications below will be converted and billed to the advertiser.


AD SPECIFICATIONS


Banner Ad:
File Size: 6-8K
Pixels: 234 x 60
Resolution: 72 dpi

Double Banner Ad:
File Size: 12-16K
Pixels: 468 x 60
Resolution: 72 dpi

Button:
File Size: 6-8k
Pixels: 120 x 90
Resolution: 72 dpi


Interstitial:
File Size: 12-16k
Pixels: 250 x 250
Resolution: 72 dpi
Window duration: 5 seconds
Animation: Limit three rotations. Must comply with file size and window duration.


Animated ads: Three rotations maximum and limit file size to 10K.


File Formats: Finished art should be saved in GIF or JPEG format.


URL: Direct users to the appropriate place on your Web site when they click on your banner ad. The most appropriate URL (Web address, such as http://www.workforceonline.com) may not be the home page, depending upon your offer. Link to the page that helps generate a lead for you.


Alt-Text: Sometimes online users do not want to see the graphics – they just want the information. They press stop before the graphics are downloaded or set their browser preferences to “turn off images”. By providing the Alt-Text for your banner ad, the viewer will still see your banner ad – only in text form. For example: “Click here to see the latest HR developments in Your Company.”


Materials Deadline: All materials are due on the 15th of the month prior to the month the ad is to appear (e.g., April 15th materials due date for a May 1st live date). Send disks with Web-ready artwork to: Workforce Online, 245 Fischer Avenue B-2, Costa Mesa, CA 92626; or e-mail Web-ready artwork to bannerad@workforceonline.com.


 Web Graphic Design Tips:


  • In Photoshop, work in Red-Green-Blue mode.
  • Graphics lose quality when they are saved in a GIF or JPEG format. Make sure graphic is perfect before saving.
  • Keep one copy of your graphic file in Photoshop format with layers intact in case revisions are required.
  • Test graphics by viewing them with your monitor set at 256 colors.
  • You ll get better results if you convert your flat-color, illustration-based images to 8-bit.
  • It s best to leave photographs, or continuous tone-type images, in 24-bit if you can.

Posted on

Recruit People Who Customers Like

Most companies that fail at customer service fail at the first hurdle: They don’t recruit people that their customers like. The resulting problems often go undetected for long periods. The penalties are severe in terms of customers defecting and lost revenue.


When selecting front-line people who deal with customers, the most important criterion must be the likeability of the chosen candidate. Skills, knowledge and experience are important, but must take second place to the personal attributes of the person to be appointed. To quote James Dyson: “Anyone can become an expert in six months.” In other words, with personal drive and company support, any employee can acquire the requisite skills and experience to do any front-line job effectively over a short period. The skills and experience of employees are not the main issue when it comes to serving customers. What is more at issue is their own emotional drives and their ability to connect emotionally with customers.


Conventional methods of selection are limited when it comes to this. Too often, the priority is technical skills and experience rather than ability to relate to customers. The worst type of selection is one that’s made by default, where the pay is so low and the applicants so few that a company hires the only person who applies.


Here are 14 guidelines for adding emotional value to your recruitment process and selecting people your customers will like. Some of these guidelines may be surprising.


Eliminate person specifications and job descriptions.
Written person specifications and job descriptions are extremely limited when it comes to this process. They tend to be two-dimensional and essentially devoid of emotion as they strive for objectivity. They are frequently boring and border on being meaningless. The essential requirements of color, vibrancy, bright personality, esprit, positive emotion and energy are squeezed out of these uninspired documents. They provide little effective guidance to the type of person who will do a great job at the front line.


Be subjective in making selection decisions.
It might be heresy to say this, but subjectivity is essential when selecting the right candidate. Reliance on objective selection measures will frequently lead to the wrong person being appointed. Mercifully, most decisions are made for subjective reasons. Recruiters just delude themselves that they are being objective!


Many personnel experts and their internal customers—line managers—have fallen into the trap of equating fairness in selection with objectivity. Can you imagine selecting a future spouse on the basis of objective selection criteria?


The best selection decisions are made when you use a combination of heart and mind to judge a candidate. Eliminate the heart from this process and you will only select two-dimensional candidates who’ll have no feel for customers and thus will not be liked by them.


The objective criteria for selecting a candidate must be complemented by the subjective and personal likes of the manager making that appointment. If a manager does not like the person they are hiring, then there’s no hope of service excellence.


To quote Denille Girardat, a store manager for Seattle, Washington based Nordstrom Inc.: “We like to recruit the friends of our staff. We think Frank Pizzano, for example, on our customer service desk is wonderful, and we feel his friends will be wonderful, too. So we recruit them if we can.”


Increase the pool of available candidates.
To ensure that a likeable candidate is selected, it’s essential that a company create as large a pool of available candidates as possible. This becomes increasingly difficult in a tight marketplace, but is relatively easy when there’s widespread unemployment in the locality.


The pool can be increased by ensuring that pay levels (and associated conditions) are in the upper quartile of the marketplace for this particular type of job. Pay is a reflection of emotional value. To be motivated, employees need to feel that their pay levels are fair and equitable.


Anton Najjar, for example, says that he is accused by other employers in Dubai of “spoiling” his people. The terms and conditions for people working at the J.W. Marriott hotel are definitely far better than those provided by most other employers for similar jobs.


Also ensure that the company has an excellent reputation as an employer. To deliver customer care, it’s essential that a company deliver staff care. How can an employee care for a customer when the company doesn’t care for its employees?


Furthermore, a company that regularly indulges in a “hire and fire” approach to people will find its reputation will be damaged, and the best candidates will avoid it.


Each employee should receive effective and adequate training. Employees are attracted to companies that provide them with training and development opportunities because it enhances their sense of worth and provides a necessary stimulus for further improvement. Lack of training invariably reflects through poor service and creates problems that make both employees and customers feel awful in the end.


The available pool can also be increased by excellent PR and by word of mouth from employees, friends and people in the local community. Every opportunity needs to be seized to promote any positive news the company has. Creating job opportunities is excellent news in most places and local managers need to exploit this as far as possible.


Clarify accountability for the selection decision.
The person who is finally accountable for making a selection must be the manager who will be accountable for the work of that person. The only thing the personnel experts are accountable for is the supply of a steady stream of first-class candidates, together with meaningful information and advice about them.


This was a lesson that was taught to me in my first management position at Mars Inc., a chocolate manufacturer based in McLean, Virginia, where the company’s production managers were totally accountable for the people in each team. At Mars and other progressive companies, there’s no way that other people who do the recruitment and selection can impose a candidate on a manager.


In a number of the companies that I’ve studied, the accountability for selection was very unclear. In one case, at a company in the Middle East, people in central personnel undertook recruitment and selection. The successful candidates were then assigned to one of the company’s branches. The branch manager had absolutely no say in the process. Regardless, having taken no part in the selection process, he or she would have to work with the new hire.


In another company in the UK, a recruitment agency supplied people to work at the front line on a temporary six-month contract. Managers had no say about who would come in on these contracts. If these people proved themselves after six months, managers could give them permanent appointments. However, many of the complaints made by customers related to the service provided by these new people during their first six months while on temporary contracts.


Create a mental model of the successful candidate.
Before you embark on a recruitment and selection process, create a colorful and dynamic mental picture of the ideal candidate. Try to envisage them operating effectively at the front line, providing a “dream” service that customers love. The more you can create this picture and bring it into focus, the more likely you are to select the successful candidate.


The best way to develop this picture or model is to invite your existing team to produce it for you.


Do not rely on résumés.
Résumés yield relatively little useful information. I’ve seen thousands of résumés, and most of them leave me cold, telling me very little about the people writing them. Most of them only give hard facts about the person’s background, and there’s scant indication of the person’s capabilities and personality.


There are exceptions. If the candidate is a skilled writer, then he or she might be able to convey the essence of their spirit, emotions and energies on a blank sheet of paper. Even this, however, is impossible if you force an applicant to fill in an application form. Application forms squeeze out essential information while distorting the rest. Worst of all, you learn virtually nothing from most completed application forms about how a candidate interacts with customers.


Devote a lot of time to the selection process.
Selection cannot be done in a hurry. If you rush an interview you’ll miss vital signals. A hurried decision is more likely to be a wrong decision as opposed to a well-considered decision made after a lengthy and in-depth selection process. One interview can never be sufficient. At least two meetings are required before committing to a chosen candidate.


Call the applicant back for an appointment at least once more. Spend at least 45 minutes at each session. While you’re with the candidate, try to imagine that you are a customer and how you might feel about this person.


The more time you spend with candidates, the more likely you are to discover things about them that aren’t evident from their paperwork. If you confine the selection process to a half-hour interview, the impression you gain from them will only be skin deep. With subsequent meetings, you’ll find candidates increasingly reveal more about themselves. Don’t miss the opportunity to obtain such critical information.


Furthermore, you need time in a relaxed environment after the selection interviews to reflect on the decision to be made. With relaxation and reflection, the mind allows other factors to come to the surface. Gradually, the correct decision will appear to you. Retrospectively, you will be able to justify this decision with specific logic that explains your feelings.


Use a team approach to selection.
The biggest selection mistakes are made when one person alone undertakes the interview and makes the selection decision. No matter how wise that person may be, they’re always vulnerable to misjudging a candidate.


A senior personnel person from Hewlett Packard once told me that in his company, they “interview people to death.” Often a candidate might be subjected to interviews with nine different people, any one of whom could veto the appointment of that candidate.


Likeable leaders always involve their existing team members in choosing candidates to join that team. A bad apple in the barrel can rot the others. Team members are in the best position to judge whether a candidate has all the essential attributes for helping the team provide excellent service. If team members don’t like the new recruit, you’re going to have immense problems with motivation and the delivery of customer service.


Prioritize your selection criteria.
When it comes to selecting people for jobs at the customer front line, it’s important to prioritize the criteria as follows:


First Priority—Personal attributes


  • Customer-oriented approach
  • Positive attitude
  • Prepared to take initiatives
  • Warm and friendly
  • Kind and compassionate
  • Has an inquiring mind
  • Good listener
  • Articulate
  • Decisive
  • Open, honest, trustworthy, sincere
  • Genuinely interested in people
  • Genuinely loves people
  • Genuinely wants to help people
  • Emotional intelligence
  • Rational intelligence
  • High degree of self-awareness
  • Desperate desire to learn
  • Energy
  • Creative with a degree of flair
  • Clearly articulated principles, beliefs and values that align with your own
  • Bright, positive personality.

Second Priority—Skills and knowledge


  • Potential competency in using the systems required to undertake the job effectively
  • Able to write a good letter
  • Can do figure work efficiently
  • Can read, assimilate and comprehend complex text quickly
  • Speaks a second language (if necessary)
  • Able to acquire knowledge of the product and organization quickly
  • Good memory (e.g. for past customers and their names).

Third Priority—Experience


  • Has a varied and interesting background.

Be creative in your approach to recruitment and selection.
One company was opening a new store in New York. Its sole criterion for selecting people was “performance.” It wanted good performers in the theatrical sense of the word, people who could make customers happy, who could entertain them as part of their total shopping experience. It even wanted people who could be a little outrageous at times.


The company discarded all the conventions of selecting new hires. It placed an advertisement in a newspaper and invited people to call. Many applicants thought they were calling to request an application form. What they didn’t realize was that they were being screened on the telephone.


Those who made it to the next stage were observed as they entered the room. Did they talk to the other candidates? Did they sit at an empty table or next to other people? Did they offer to pour the coffee (which was on tap) for other people entering the room? How did they hand the coffee cup to the person? When they were asked to undertake some practical work (simulating the front line job for which they were being selected), they thought that they were being tested for their proficiency in handling simple tools and materials. In fact, they were being assessed for the way they interacted with customers (simulated in turn by other candidates).


This company didn’t carry out any interviews, but merely observed how groups of candidates conducted themselves during a one-hour session. The company had no preconceived ideas about the past experience of successful candidates. All it wanted was performers.


The key to selection isn’t to get into a routine. The recruitment and selection process for each new job should be a creative challenge. Be creative in the way you advertise a job. Why not set a simple 50-word job-related task in the advertisement and invite people to write in with the answers? You can then take it from there.


Be creative in choosing the type of people you wish to invite to help you with selecting employees. Have you ever thought about asking your customers to take part in the decision?


Be creative in designing the techniques you will use for the selection process. Have you ever thought about visiting a candidate at home to undertake an interview? (Ideally, an employee should treat your premises as their home, giving a warm welcome to any visitor who comes in the front door.)


Treat all candidates as potential customers.
When I was appointed director of personnel at British Caledonian Airways, one of the first things to hit me was a series of written complaints from people who had applied for jobs but not received replies over a period of months.


The airline business is a “glamour” business and attracts many unsolicited applications from people who want to fly around the world as cabin crew.


When I visited our recruitment section at British Caledonian, I was staggered to find that we had a backlog of over 4,000 unsolicited applications to which we had not replied. Our team there was just overwhelmed and only contacted the applicants who had been screened and selected for first interview. The rest, the large majority of unsolicited applications, were ignored.


Our recruitment team had failed to realize that each applicant was a human being and a potential customer. Instead, the recruiters just saw another piece of paper, a job application, which had to wait for eventual processing (if ever). Our challenge as managers was to get the recruitment team to see applicants as real people and even potential customers, and treat them with the care and deference they deserved.


What customer’s like about you is that you treat them as human beings. The word “customer” is a mere label. You can’t differentiate between human beings. They should all be treated equally, whether they’re customers or job applicants.


Rely on your intuition.
Collect as many relevant facts as possible about the people you are considering selecting, together with opinions of that person from other people. The more information you have about the person in relation to the job vacancy, the better placed you’ll be to make a considered decision. However, that decision must still take into account your gut feelings about this person. Your choice must take into account whether or not you genuinely like the candidate. Failure to do so will lead to immense relationship problems in the future.


Therefore, you shouldn’t simply rely on objective selection criteria as a basis for making your final choice. It’s a delusion that you can evaluate a person solely by using quantitative scores, analytical ratings and objective rationales. Psychometric and aptitude tests, while yielding helpful information, have their limits in the selection process.


No matter how much objectivity and rationality you attempt to inject into the selection process, your ultimate decision will always be subjective. You’ll always choose the candidate who “feels right.” You will then subsequently attempt to justify your selection decision using the objective data and rational analyses you have at hand. In other words, your rational mind will attempt to provide an objective reason for your subjective, intuitive feelings about a chosen candidate.


Remember the basic binary code of behavioral choice: People move towards what makes them feel good and away from what makes them feel bad. This definitely applies to selection. You will not appoint a candidate who makes you feel bad, whatever the reason.


The objective data you gather about a person will always be too simplistic and too limited. It will always tell you only part of the story. Everyone has a complex psychology and as a result a unique set of behaviors. Everyone thinks differently and has a different way of doing things. Mechanical selection processes rarely detect the minutiae of this. Yet it’s this minutiae that have a substantial impact on the relationship with a customer. For example, the way a person shakes hands, speaks or what they do with their eyes will have a substantial effect on a relationship. But these fine points of behavior go undetected in the relatively clumsy formal selection procedures that are available.


You’ll intuitively be sensitive to the details of this behavior, often without realizing it. Deeply embedded in your subconscious is a software program that senses the character and capability of another person and relates them to your past experience of successful and unsuccessful people.


It is important that you raise this program to a conscious level to develop a rationale for your assessment. However, this rationale is limited to those facts you can consciously acquire. These facts themselves are subject to interpretation based on subconscious prejudices. Other key attributes will escape this conscious process, even though they will be detected by your “sixth sense” and relayed to your subconscious.


Therefore, what you must do when approaching a selection decision is to assess all the available facts and then allow your subconscious, intuitive mind to take over. Both your emotional and rational intelligence will come to the fore at this point as you analyze your own feelings about each candidate together with the assembled facts.


There’s a great deal of evidence that the application of logic is severely limited in attempts to resolve intractable problems. Resolution always comes when someone applies a high degree of intuition (a combination of emotional and rational intelligence) to a problem. The same applies to a selection decision. When two or more candidates appear to be “equal on paper,” you must use your intuition to guide you.


Move fast to appoint the chosen candidate.
As soon as you’ve made a selection, move fast to appoint the person, treating them like your best customer. You must remember that the best candidates will have greater choice of who they should be employed with. An excellent candidate won’t automatically accept your offer. When you like a candidate and wish to offer them the position, impress on them how much you want them to join your team.


The best way to do this is to call the chosen candidate at home during the evening, immediately after the final interview. Demonstrate your enthusiasm and excitement about having this person come on board. Demonstrate your relief at having found such a high-caliber person to contribute to the excellent service that you aim to provide all your customers. You must make the person feel wanted. You must make them feel that they are of exceptionally high value to you and your team. In other words, it’s critically important that you inject a high degree of emotion into communicating your decision to the chosen candidate.


What you must not do is merely inform your personnel staff of your decision and leave it to them to communicate with the chosen candidate. All they’ll do is write a standard letter that might take days to arrive. Such standard letters are a complete turn-off and can undermine all the hard work you have put in.


Give little weight to references.
Everyone plays the reference game. We all know people who will write good things about us. We all know that it’s only in the most extreme circumstances that a previous boss will put into writing anything bad about a person.


References have one useful purpose—to corroborate facts. There are one or two deceitful people around who deliberately misstate facts on their applications, for example, that they received a degree at the University of California in 1995 or that they were employed with XYZ Co. between 1991 and 1994. All critical facts on an application should therefore be corroborated by way of written references.


However, references are of relatively little value when it comes to eliciting opinions on a candidate’s character and capability. If there’s an element of doubt, pick up the phone and call the candidate’s previous boss (you can’t call the current boss if the person has yet to resign). Have a quiet word with the previous employer and find out over the phone what the boss really thought about the candidate.


In relatively small industries, a network of executives and personnel professionals will already exist and be quite powerful. Use these contacts to elicit opinion and then judge that the weight the information deserves.


SOURCE: Excerpted from “What Customers Like About You,” by David Freemantle, available from Nicholas Brealey Publishing at 888/273-2539.

Posted on

Business Books of the ’90s Provide Blueprints

Business books of the 1990s range from one profiling visionary companies for emulating to one that pokes fun at Corporate America. Some of the books actually started trends, while others have helped develop them. At any rate, the ’90s have provided a wealth of business acumen. Some of the most popular books are listed below, in no particular order.


Reengineering the Corporation: A Manifesto for Business Revolution
by Michael Hammer and James Champy (Harperbusiness)
This New York Times best seller started the reengineering revolution in the mid-1990s.


Seven Habits of Highly Effective People
by Stephen Covey (Fireside)
Although this was published in 1989, it became one of the self-help books of the decade.


Built to Last: Successful Habits of Visionary Companies
by James C. Collins and Jerry I. Porras (Harperbusiness)
An inquiry into corporate longevity that seems to be a mandatory footnote in every business book since.


The Fifth Discipline by Peter Senge (Doubleday)
This book introduced the emergence of the learning organization.


In Search of Excellence: Lessons from America’s Best-Run Companies
by Thomas J. Peters and Robert H. Waterman (Warner Books)
An American business management “bible” that presents eight specific management principles common to successful companies.


The One Minute Manager
by Kenneth H. Blanchard and Spencer Johnson (Berkley Publishing Group)
This book has been hailed a practical business guide for managers wanting to get the most from their employees.


The Dilbert Principle: A Cubicle’s-Eye View of Bosses, Meetings, Management Fads & Other Workplace Afflictions
by Scott Adams (Harperbusiness)
This book provides all too familiar portraits of the lunacy of the contemporary workplace.


Competing on the Edge : Strategy as Structured Chaos
by Shona L. Brown, and Kathleen M. Eisenhardt (Harvard Business School Press)
This book discusses how companies like Microsoft and Nike succeed because they’ve found a medium between structure and adaptability to market changes.


SOURCE: Charles Decker, president and publisher of Berrett-Koehler Communications, San Francisco; Theodore Kinni, editor of The Business Reader, a free online newsletter of business publications, Williamsburg, Virginia(bizbooks@gte.net); and Amazon.com.


Workforce, January 1999, Vol. 78, No. 1, p. 51.


Posted on

Prevailing Winds Lessons from Viagra

Workforce talked with Lynn Franzoi, senior vice president for benefits at Fox Inc., an experienced benefits negotiator based in Beverly Hills, California, about the climate for the debate about what health care should cover. Fox Inc. was a 1997 Workforce Optimas winner because of Franzoi’s creativity in benefits management. She made these points about lessons from the Viagra story:


What’s your greatest challenge in providing health insurance coverage to Fox employees?
Employees often expect that everything they medically want or need will be covered. A pregnant employee whose physician prescribed vitamins not covered on the Fox plan declared that for its refusal to pay the $10 per month, Fox could cause her child to have birth defects. I asked her, ‘For $10 a month, you would take that risk for your child?’


Recent research suggests that many people have no idea what their employer-sponsored health care costs. Is that your experience?
Employees often understand the total cost of their health care coverage for the first time only when they leave the company and receive their COBRA paperwork. Most often, they believe that their payroll deduction, deductible and co-payments represent the total cost of the plan.


What expectations of health care coverage have you seen that you consider out of bounds?
Employees often expect the employer to cover the costs of personal decisions. Employees who travel internationally for personal reasons to countries that require vaccinations against such diseases as yellow fever may expect their employers to cover these costs. Fox offers a medical evacuation policy for $18 a day for 10 days; employees expect the employer to pay for this, as well, despite the choice to travel and the minimal cost of the insurance compared with thousands for medical evacuation.


What other trends have you been seeing?
Employees will request highly advertised treatments. Employees at Fox did ask for coverage for Viagra. Fox’s decision on Viagra, birth control and infertility treatments is that they’re not medical necessities, so they’re not covered.


What about cosmetic surgery?
Not covered, unless it’s to correct a disfiguring injury that occurred while the person was covered under the plan. We do pay for breast implant after mastectomy, or surgery to correct a birth defect that impairs a bodily function.


What about treatment for obesity?
It’s not covered. That’s a pretty standard decision in health plans. It goes to the question of where you draw the line. We can’t mandate behavior change.


What’s the principle at work in these decisions? What could make you change your mind about one of them?
If we had a lot of requests for a particular treatment, we would seek expert medical review of the pros and cons. Cost and efficacy are the major factors. For example, often we will decide to pay for an uncovered treatment if it is cost-neutral, but the potential results are greater than the standard treatment.


In the mid-1990s, we covered drug implants for CMV (cytomegalovirus, a condition often associated with AIDS that can lead to blindness). The alternative was infusion, which often led to kidney failure and the need for dialysis treatment. It was an outpatient visit, the drug was free because it was experimental, and we faced only the cost of the anesthesiologist and the facility. The outcome was much better for the patient, so we covered it. That’s how we decide.


Franzoi constantly looks for ways to remind employees that an employer can’t possibly pay for every perceived health need, that they must absorb some of their health care costs-especially when those costs reflect personal decisions-and that, like financial well-being in retirement, wellness during working years is a personal responsibility. But the winds seem to be against her.


Workforce, January 1999, Vol. 78, No. 1, p. 87.


Posted on

Do You Understand the New Workforce

Here’s a quiz to see how much you understand about the new workplace. The answers follow.


Questions:


  1. TRUE or FALSE?
    The “job” is a historical phenomenon and, as such, it has a limited life-expectancy.

  2. TRUE or FALSE?
    The main source of job-loss in this country has been the lower cost of labor in other countries.

  3. TRUE or FALSE?
    Information technology is a solvent causing jobs to dissolve.

  4. TRUE or FALSE?
    The speed of change will force organizations to rewrite all their job descriptions, but it’ll only make those job descriptions more important to how work actually gets done.

  5. TRUE or FALSE?
    The disappearance of jobs in Europe and Japan will never have the impact it has had in America because of lifetime employment and safety nets.

  6. TRUE or FALSE?
    Temporary workers do less than 5 percent of the work being done in America today.

  7. TRUE or FALSE?
    The modern corporation couldn’t exist without the majority of its work being done by regular employees.

Answers:


  1. Q: The “job” is a historical phenomenon and, as such, it has a limited life-expectancy.
    A: TRUE-No one ever had a job until the Industrial Revolution. Then they boxed up work into your job and my job and her job. Those jobs spawned job-descriptions and job-classifications and job-grades and all the rest. We’ll look back on the period between the mid-19th and the late 20th century as “The Age of the Job.”

  2. Q: The main source of job-loss in this country has been the lower cost of labor in other countries.
    A: FALSE-That is a factor, but the biggest single factor is the frequency of change, which makes traditional “jobs” too rigid to succeed today. Some of the other things contribute to the frequency of change are:

    • New technology
    • The prevalence of knowledge work
    • The dynamic needs of the baby boom
    • Management efforts (outsourcing, TQM and reengineering, to name a few) which are intended to improve the organization.
    • The presence of new levels of competition.

    Together, these things create a situation where organizations can no longer afford any organizational element that is not highly flexible.


  3. Q: Information technology is a solvent causing jobs to dissolve.
    A: TRUE-Information technology turns more and more work into knowledge-In two ways: work, which can’t be carved up with traditional job-descriptions the way industrial labor could; and information technology helps destroy the time and space framework within which the traditional job existed. Work can now be done anytime, anywhere.

  4. Q: The speed of change will force organizations to rewrite all their job descriptions, but it’ll only make those job descriptions more important to how work actually gets done.
    A: FALSE-Doing that will mean that writing job-descriptions will need to utilize the half the workers. The answer is not rewriting, but a culture that encourages workers to do-and gravitate to-the work that needs doing. People in this world have “assignments,” not jobs. They work on cross-functional project teams, not in traditional departments.

  5. Q: The disappearance of jobs in Europe and Japan will never have the impact it has had in America because of lifetime employment and safety nets.
    A: FALSE-About four or five years ago, many people thought that these issues were narrowly American. But then Europe’s unemployment rate skyrocketed and Japan’s economy melted down. It suddenly became clear that those things that had looked as though they would protect the countries had actually made the problem worse when it struck.

  6. Q: Temporary workers do less than 5 percent of the work being done in America today.
    A: DEPENDS-It depends what you mean by “temporary.” If you mean the worker came from a temp agency, the number is probably even less than that. But if you mean “temporary” as in someone whose employment is contingent on a continued need for that work to be done and on his or her adding value to the customer, then everyone (and I mean EVERYONE) is a temp.

  7. Q: The modern corporation couldn’t exist without the majority of its work being done by regular employees.
    A: FALSE-That used to be true, but look at Dell Computer. They get work equivalent to 80,000 full-time workers, but there are only 15,000 on the payroll. And not one of them can count on “doing my job” to provide continued employment. Or look at Job Boss Software in Minneapolis, where the CEO says that they’re like a volleyball team because “it takes three hits to get the ball over the net and it doesn’t matter who hits it.” Doesn’t matter who does what? What about job descriptions? Zounds!

SOURCE: California-based William Bridges & Associates

Posted on

Whirlpool Builds a Performance-based Strategy

In the late 1980s, Benton Harbor, Michigan-based Whirlpool Corp. began to seriously assess itself and the increasingly competitive appliance industry. The longtime maker of home appliances realized that to strengthen its position as a dominant player in the industry—and expand into European and Latin American markets—it would require an unwavering focus on customers, as well as a commitment to become the best-cost, best-quality producer in the marketplace.


To carry out its goals, Whirlpool’s management knew that the company needed to forge a higher level of commitment and dedication from employees, especially those working in the company’s plants and factories. So it opted to institute a performance-based compensation system for employees at its Clyde, Ohio, automatic washer manufacturing plant. Several other facilities were later added, and the company has never looked back.


The gain-sharing program—with its self-directed teams—slashed $36.4 million in costs the first two years alone. In 1992, two of the company’s plants managed to cut $800,000 in utility costs. And if one examines quality-control issues, it’s clear that employees are making a commitment to quality that couldn’t have been imagined a few short years ago. There now are 98% fewer quality problems than five years ago, and the service rate on dishwashers and other appliances has been reduced 60% to 80%.


The cornerstone of the program is an HR approach that provides workers, especially those on the line, with the incentives and motivation to treat their work as if they’re an owner of the company. Whirlpool places the money from all cost savings, business improvements and productivity gains into a fund for each specific facility, and workers receive a quarterly cash payout for their efforts. In some cases, that has translated into more than $2,500 a year per employee.


Of course, the company also gets a slice of the pie. And that can be significant. The total cost savings during the first two years for the company’s facilities in Clyde, Marion and Findlay, Ohio, measured $36.4 million—with payouts of $19.2 million. Says T.R. Reid, Whirlpool’s manager of financial communications: “It’s a program that benefits everybody. It has led to fundamental changes in the way top executives and hourly employees think about work and their job.”


Indeed, employees are more knowledgeable, there’s greater cooperation and involvement, and financial and quality-control benchmarks have reached all-time highs. And because hourly and salaried employees share equally in the gains, the program has helped narrow the culture gap between the two groups. Meanwhile, for the corporation, payouts have alleviated pressure for base-wage increases (however, the company maintains a philosophy that gain-sharing never should replace wages) and the program has led to greater profitability. In short, the program’s been an unqualified success.


Says Reid: “You see managers and line workers doing things they wouldn’t have considered just a few years ago. If an inexpensive plastic part fell on the floor before, for example, it would get thrown away. Today, somebody picks it up and makes sure it gets used again. If there’s a machine that needs to be fixed, people step in and do it.”


Personnel Journal, January 1995, Vol. 74, No. 1, p. 100.


Posted on

Four HR Issues Most Affected By the Crisis

Staffing
Though the first instinct of multinational management is to replace expensive expatriates with local nationals or repatriate them entirely, HR must look at the overall strategic plan to see what’s really sensible. “You need to have a vision of opportunity and look through the crisis to find different ways to keep the business moving forward,” says Bill Hensel, a spokesperson for Atlanta-based Coca Cola Co. This is especially so in the current HR condition, in which one sector is troubled by one set of events and another is affected by different circumstances. Look at each location within the context of a general staffing plan, not simply responding to save money now.


For example, Coca Cola saw a staffing opportunity in one of its facilities in China when a bank closed, leaving a large staff of educated, out-of-work employees. Seizing this chance, Coca Cola hired the workers because finding good, trainable human capital is very difficult. The company saw it as a long-term staffing advantage to retain them in their cadre of talent.


Playing with various scenarios, short- and long-term, HR can help determine the key skills of particular jobs and which jobs are crucial to long-term health of the organization. Once determined, HR should determine if, and which, positions are expendable if the company needs to cut back on personnel.


Retention
When business slows and the air is charged with fear of cut-backs and downsizing, retention of valuable employees becomes even more critical. Not only is communication to the workforce essential, but it’s a time when valued programs and benefits to employees should be emphasized and highlighted. Retaining key people becomes pivotal in these volatile times where fears and a tight labor market co-exist.


While more and more organizations are realizing that retention is a strategic issue that is most effectively addressed as a corporate-wide initiative, it is especially important at the outset of an international assignment. Careful career development and planning, as well as the more typical rewards and incentives, can be powerful retention tools.


Compensation
Compensation for international assignees and local nationals is more complex than ever because the environment is more eruptive and changeable. Equity issues, legal factors and taxes are ever more complicated. Also different is the thought process that used to prevail in which an international assignment was tied to a financial incentive. Now, being globally mobile is more directly related to career direction, and expat compensation can be approached with that in mind.


A recent survey by New York City-based William M. Mercer Companies LLC reflects the Asian downturn in salary and wages. These changes reflect business slowing and the increasing unemployment in these areas. Again, compensation is a illustrative of the volatility of the region.


Corporate Culture
As guardians, caretakers and enhancers of the corporate culture, HR may want to consider this period as an opportunity to communicate corporate values as they relate to globalization efforts. It is also a good time to clearly communicate the organization’s situation and its response to this tumultuous situation. In fact, each company is affected so differently than others that it would be a good time to stop any misinterpretation from more general news sources.


Global Workforce, January 1999, Vol. 4, No. 1, p. 9.


Posted on

Brace For Change

It was July 1997 when the first seismic shift occurred. At the epicenter Thailand devalued its currency, creating surface ruptures throughout the economies of Southeast Asia. The ground began to quake all around—Indonesia, Malaysia, Hong Kong. Next, teetering financial towers in Japan began to topple, generating a tsunami that would eventually drench the United States. Suddenly, Americans who didn’t know a rupiah from a rupee were awakening to international financial news as the lead story of the day.


Even before the dust cleared in August 1998, Russia responded to mounting pressures by defaulting on its debts, sending shock waves through global capital markets and fissures up Wall Street. More psychologically damaging than fiscally harmful to most U.S. industries, the event nonetheless terrified all who watched. What would happen next? How far would it spread?


As the Asian turmoil spread to Eastern Europe and ricocheted to Latin America, it was bound to jostle the United States as well. Reeling from multiple jolts, the U.S. stock market plummeted. And although it recovered, aftershocks of the crisis were apparent. At press time, corporate earnings are volatile, exports are down, job creation has slowed and organizations are searching for the best ways to respond. Moreover, the financial tremors have created a credit crunch in the United States, so companies are facing greater difficulty obtaining money to finance expansion and new purchases. Economists see this as the greatest threat. It might create a more widespread slowdown and eventual recession.


Every industry is affected differently. You have the task of assessing multiple scenarios and evaluating each one’s impact on your organization. You must create workforce strategies that are flexible enough to handle contingencies brewing in vastly different countries that will affect all aspects of the business: corporate culture, staffing, retention and compensation.


Trace the rumbles to the United States.
According to Merrill Lynch senior economist Gerald D. Cohen, U.S. job growth slowed from an average of 282,000 new jobs per month in 1997 to 218,000 in 1998. October 1998 had 116,000. “We expect the U.S. economy to slow to about 1.5 percent and the unemployment rate to rise to a little over 5 percent,” he says. “The unemployment rise will come from less hiring, not necessarily more firing.” Furthermore, as corporate earnings slow, companies are less apt to raise wages. (This depends on the industry because a labor shortage still exists in many fields.)


“When you look at what’s happening around the U.S. economy, you find very different responses from companies and even different responses from divisions within the same large company. It depends on what they do, where they sell and what they use in their production,” says Martin Regalia, chief economist for the U.S. Chamber of Commerce. “The impact is very… uneven.”


For example, when foreign currencies fall, U.S. goods become more expensive and consumers overseas purchase fewer of them. The manufacturing sector slows, producing shift cancellations, overtime reduction and actual job layoffs at some workplaces. With approximately 30 percent of U.S. manufacturing happening overseas, when Asian and Latin American purchasers don’t have money to buy U.S. goods, the effect is noticeable. Companies such as Goodyear Tire & Rubber Co., RJR (in Russia) and Royal Dutch Shell Oil announced falling demand. The Gillette Co. and Coca Cola Co. continued to gain market share, but because of currency weakness around the world, their actual dollar revenues have dropped over the short-term.


Likewise, many of the financial-services organizations with heavy investments in Asia and Russia experienced huge losses. However, U.S. domestic banks without overseas operations are strong. The same goes for companies that import raw materials from Southeast Asia to sell in the United States, Western Europe, Canada or Mexico—where there’s no recession. In fact, they’re actually prospering from the Asian downturn.


“The global economy cannot be viewed as monolithic,” says David de Wetter, a consultant with New York City-based Towers Perrin. Not only are industries and regions affected differently, but companies also approach their global investments from different perspectives. For example, some organizations view globalization as a way to implement cost-effective methods of producing goods and services. Others seize opportunities for long-term growth, recognizing the local market as a growing consumer base. Still, others see the need for geographic diversification. Each perspective dictates a different HR strategy.


Understand structural flexibility.
Just as new earthquake construction allows buildings to sway with the force so they don’t crumble, the global marketplace dictates the need for new flexible HR approaches. Knee-jerk reactions won’t work. You can’t simply respond by pulling expatriates home or firing local workers to cut down salary rolls. And what happens when the turnaround comes? Can you simply hunker down and wait for the whole thing to pass? Some companies are.


Others are seizing opportunities. Think what it would be like to create an organization with systems that respond to the uncertainty globalization brings—a structure that can shift from sales and marketing efforts to production when a region’s currency falls, avoiding some of the casualties of falling revenue. “The whole notion of structural flexibility is crucial,” says de Wetter.


Structural flexibility gives an organization the strength to absorb shocks and to ride out crises, while behaving in a nimble, responsive way to new possibilities. It requires a paradigm shift. For example, in many firms, it makes sense to change from a country-by-country management structure to a more integrated, product-focused or customer-focused organization. This eliminates duplication in management and administration, and it allows the company to respond with a big-picture perspective.


The Gillette Co., based in Boston, recognizes the need to transcend national borders. Gillette was hit by devaluing currencies, but its structural changes were already in development before the crisis. International since 1905, the company has been working to reorganize its global business into four entities. Originally arranged by country with separate units for all its product lines—Gillette razors and toiletries, Duracell batteries, Oral-B dental care, and Braun appliances—Gillette is consolidating the products into geographic regions, creating a single sales force for each market that will sell all the products in that region.


Gillette planned the reorganization as a step toward becoming truly global. Each geographic region will organize activities so it can be most responsive to local needs, says Michael C. Hawley, president and chief operating officer. For example, while the Asian markets suffered because revenues fell due to currency difficulties, the Russian market also faltered because the distributors couldn’t get the product to market. While these two problems differ considerably, an overall structure that eliminates redundant efforts when possible and consolidates its workforce can respond in a more sure-footed way to events like these.


Looking at Gillette as an example, you can begin to examine your own organization with an eye on flexibility, strength and responsiveness. Understanding your organization’s competitive issues as well as your industry and the regions in which it’s operating is the first giant step. “If you look at it from a globalization perspective, organizations that are structured on a global or product group basis have a better chance of reacting to a crisis,” says Tom Tilghman, senior consultant at Towers Perrin. “Instead of simply focusing on Asia, for example, you can consider [the situation] within the context of the world at large. Recognize that there are certain commonalities among markets that transcend geographic borders. When you do this, you can simply identify a problem in one area and find an opportunity in another.”


For example, one pharmaceutical company was producung and selling products in Mexico before the devaluation of the peso. When Mexico devalued its currency, the first thought was the division would be bankrupt. Because the managers viewed the situation from an opportunistic vantage point, however, they realized the cost of producing goods in Mexico would now be significantly lower. They turned their operations from producing and distributing strictly to the local economy into producing and distributing to the global economy. Rather than be decimated by the shifting activity underfoot, they were able to forge a success.


Similarly, some global companies are looking at opportunities everywhere—even in markets that have been stable and mature for some time. For example, one company had been doing business in Spain for a dozen years. To overcome some of the competitive challenges in other regions, they introduced new products and services in Spain and are now sending some of their people out of the troubled areas into España.


“As part of this new structural flexibility, organizations are trying to become more nimble and are looking to resource people and locate people wherever there is opportunity,” says de Wetter. Develop systems that enable you to examine the situation globally. Consider the skills you need in different regions. Evaluate where can you use cross-border teams, and think about whether technology can aid your structural flexibility.


Build a global corporate culture.
Corporate culture is the bedrock that absorbs some of the impact of quakes that may devastate neighboring structures. Companies that focus on long-term stability and growth are working to fortify global awareness in the organization’s culture.


Lisle, Illinois-based Molex, an electronic manufacturing company, is a good example. The company makes a hefty 10 percent after-tax profit. Located in the Americas (40 percent of its profit comes from this region), Japan, Korea, South Asia and Europe, the company is well situated to withstand economic shock waves. This year, the Americas and European regions did extremely well and the Asian countries had to struggle. In the recent past, Asia was responsible for a monumental portion of the income. What did the company do?


As part of its annual worldwide communications meeting for all employees, the chairman spoke with workers in Southeast Asia to celebrate the advantages of being global. He explained that even though their region was down, the company still made enough money to give salary increases, avoid layoffs and make improvements all over the world.


“We made the point that for many years, [Asia] contributed the lion’s share, and that now it’s Europe and America’s turn,” says Malou Roth, vice president of human resources training and development. “We refurbished the cafeteria in Malaysia and air conditioned the warehouses. We continued to expand and invest in factories and equipment in Asia for new products.”


These speeches delivered a double dose of global wisdom. They acknowledged previous efforts by employees in the region, tying their work to the overall success of the company. They also pointed out in concrete detail the tangible results of a company that’s globally diversified. These results were intentional.


“We really wanted people to understand that we are all connected. The idea that the French are making more money than they had expected directly helps you keep your job.”


The message was especially meaningful this year because the problems have been so terrible in the Asian region. Sometimes a country will have a bad year because a big customer moves, for example. But everyone knows that these current problems are widespread and major. “They all knew about it. They all read about it. They all were feeling it,” she says. “The fact that they were able to still feel that the company is growing as a result of profit made by other parts of Molex is an extremely powerful message.”


Like stocking canned goods for an unpredictable earthquake, organizations should make contingency plans for surviving and growing through a financial crisis such as the current one. Depending on the areas of the world in which your company does business, look at outcomes down the road and determine which scenarios yield the best results. Build a structure that can withstand future shocks without crumbling.


Global Workforce, January 1999, Vol. 4, No. 1, pp. 6-10.