The House on the Sand Went Smash

As a youngster, I remember learning a Vacation Bible School ditty about the wise man and the foolish man. In the song, there was a great rainstorm. One builder had built his house upon a rock, and that house stood firm. The other had built his house upon sand and the house fell down (went smash!) The morale of the story is to make a sure foundation before beginning an endeavor whose outcome is important.

Most businesses know that they need to do some business or strategic or turnaround planning. Planning is vital to creating shared mission and eliciting commitment from stakeholders in the outcome(s). Most executive teams, however, underestimate the value of educating employees to prepare them to execute the plan and achieve the desired results.

We all want employees and managers who maintain a cool head and concentrated focus. What is our role, however, within executive teams, to help our people become prepared? We would assert that our role is to lead and influence through empowerment. Empowerment enhances employee engagement and reduces the likelihood that only executives will be expected to take responsibility for outcomes. 

Skilled employees are usually made, not born. Therefore, key employees deserve professional education and job training. Be constantly grooming your staff to take on more and more responsibility. Much like a second-string player on a sports team, a second generation of managers should be in waiting, ready to step in when called. This intentionality is also very useful in succession planning, because those who vacate their positions already have trained backups who would be ready to perform the role should their predecessor no longer be able or willing.

Grooming Effective Managers

Continuously analyze employees for management potential through an interactive process of interview, observation, and written response. Be on the lookout for employees in all areas who posses strong analytical and evaluation skills, combined with the emotional intelligence to handle changes effectively and appropriately. Give your people the opportunity to prove themselves worthy of consideration for grooming.

When evaluating management candidates, leaders will often try to determine, through an employee’s actions or words, the employee’s perceptions about the company’s mission. A demonstrated commitment to the mission shows promise. Using individual interviews and feedback sessions, leaders can determine whether employees understand chain of command and critical success factors for business success. Asking employees how to improve the productivity of their part of the business, their own execution, and corporate profitability can reveal (through their responses and actions) whether they understand the key levers of management.

Education and Training

Those who can consistently make recommendations for company improvement should be considered for management positions and be given an opportunity to refine their skills through education and training. The employee development need not be formal; the one-to-one mentoring of high potential employees can yield significant results. Formal workshops and continuing education offered within your industry or organizations serving people in key roles can sharpen skills, focus, and performance.

Personnel files should document employee attendance at educational programs as well as innovative solutions they have offered to real problems. These files serve as the basis for performance reviews as well as management development. Difficult work assignments containing known problems offer the high potential employees to contribute on  meaningful decisions. If unsatisfactory decisions are made in these situations, the employees can be coached and mentored through what should have been done differently and learning will occur.

Adapting to Change

Over time, employees will learn to adapt to changing events in the operating environment. The first few times a managerial candidate faces unforeseen circumstances, it may be difficult to revise the game plan to suit the conditions. With effective coaching and a sprinkling of successes, however, the new manager will learn to handle tough situations without the need to involve a higher up.

Every business has its share of unpredicatable events that can influence performance. While these events cannot be anticipated exactly, they can be expected and planned for in a hypothetical sense. As employees become more flexible in the way in which they carry out their responsibilities, they will be able to aid the business plan execution by adapting to change more quickly and accurately.


How Successful Businesses Maintain Organizational Morale



Organizational morale builds quality products (and services). Employees who are well-paid, well-trained, and appreciated work harder than those who are merely trying to earn a living. Giving employees more and more responsibility as they develop skills and gain experience makes them feel wanted and valuable. training employees to do their jobs expertly teaches them the value of quality performance. Finally, rewarding an employee for continuing contributions to company profitability reinforces the company’s goals, mission, and objectives.

Some of the benefits to organizational morale include the following:

  • Employees are willing to work longer hours to ensure that a job is done correctly.
  • Customer service and sales are carried out with positive attitudes. As the company makes more money from these quick and repeat sales, the business can afford to hire the cream of the crop in employees. The appearance to anyone outside the operation is that of a well-oiled machine.
  • Rather than fending off mercenary plots and complaints all day long, management can plan for upcoming projects, ensuring the best use of employees’  talents.
  • Striving and bitter rivalries are easily ended when all employees are treated impartially and fairly.
  • Quality control is much easier to enforce with a group of hard-working, motivated workers than with uncaring employees who are simply filling a slot.


Truly effective training and development programs make good employees out of average employees, and great employees out of good ones. When an employer takes the time and effort to teach employees how to perform their jobs better, employees usually respond with increased effort on the job.  Bonds between management and employees are created as an employee gains a greater sense of self worth. The employee begins to feel that his or her contribution to the overall business matters and is important.


Employees in successful companies have two types of responsibility–to their peers and to their bosses. Each is important to a smooth-running company. However, responsibility can prove an albatross around the neck of the employee who lacks the corresponding authority to make decisions. Good employers will therefore not only be creative in assigning work to employees, but also in providing the best possible environment for them–including adequate authority where appropriate–to help them succeed. Reporting to management helps employees feel they must do a good job and that someone is around who can help them if the going gets rough. Being accountable to peers in addition to bosses teaches employees to respect one another’s work and to learn how to work together to reach common goals.

Motivation and Reward

Bonus and incentive compensation programs are the rewards of excellent employee performance. Rather than threatening to discipline or even dismiss a problem employee, it is often better to motivate employees through encouragement. Fear of failing will not lead to successful work attitudes and performance–it will only lead to ultimate failure. On the other hand, building up an employee’s confidence has proven much more effective than criticism in raising performance levels. 

Once an employee has performed at or beyond the established level, successful management teams find a way to reward the employee. Not rewarding someone who has done everything requested and more makes the employee wonder a.) whether he/she has indeed done a good job, b.) whether the supervisor is a good enough manager to recognize the employee’s contributions, and c.) whether a “change of scenery” may be preferable. However, bonuses and incentives must reflect current and projected financial performance. A company experiencing financial loss must have a flexible plan to adjust employee compensation as necessary. 

A successful company becomes a self-perpetuating entity–the more successful it becomes, the more successful it can become. Executive teams who maintain high organizational morale and plan for growth will create positive cash flow from efficient operations. While your business may not be in a position to always do what larger businesses do, remember to run your organization in a professional manner any you will meet with greater success!


Decision Making is Like Chopping Wood

The Woodcutter’s Story

Simon was a diligent son, but not that bright.  Eventually his mother became exasperated with him lying around the house and urged him to get a job.  Now Simon was good at one thing:  chopping down trees.  So, off he went, his axe over his shoulder, in search of work.

Soon he came upon a clearing in which logging was being carried out.  (Readers of a nervous disposition should be reassured that this logging was a fully sustainable and environmentally ethical operation.) He marched up to the supervisor and asked if there was any work available.  “Well it depends how good you are.  Chop down that tree and I’ll see.” Simon enthusiastically set about the task and completed it to the supervisor’s satisfaction. “You’re hired.  Start right away”, he said.

And Simon started work, applying himself with a commendable zeal.  It was Monday afternoon, and the day soon passed.  As did the following few days. On Friday afternoon, Simon happened to see the supervisor.  “I’m glad I’ve found you” the supervisor said.  “Please collect your cards and leave, your services are no longer wanted.”

Simon was flabbergasted!  “How come?  I am your most productive worker.  And now you’re rewarding me by sacking me!” “Well, it’s true you were the most productive worker on Tuesday.  But by Thursday you had sunk to the least productive.  And you’re doing even less well today.” “But I start early and finish last.  I work through lunch.  I spend all my time chopping down your trees.”

“I agree”, replied the supervisor, “but how much time do you spend sharpening your axe?”


What is equivalent to sharpening the axe in your business? Management team and high potential employees choosing to pursue professional development through honing emotional intelligence (EQ) competencies. EQ is the unique intersection of heart and head—the outcome of which is effective use of feelings to enhance thought.

When EQ becomes a priority in an organization, good things happen. Consider:

  • In one study, experienced partners with high EQ in a multinational firm delivered $1.2 million more profitfrom their accounts — 139% — over their cohorts.
  • A study of manufacturing supervisors given EI training saw a reduction of 50% in lost-time accidents, 20% in formal grievances, and plant productivity goals exceededby $250,000.
  • In a cross-cultural study of senior executives, EI competencies outweighed both IQ and experience in top performers.

Superior performance is driven by strong decision making. Strong decision making is a physiological factor of: 1.) competency, preceded by 2.) behavior, preceded by 3.) cognition, preceded by emotional intelligence. EQ is a body of personal characteristics and social abilities that are closely tied to success in both our professional and personal lives. Dan Goleman, quoted in the Harvard Business Review, said, “Emotional intelligence isn’t a luxury tool you can dispense with in tough times. It’s a basic tool that, deployed with finesse, is the key to professional success.”

The tool is comprised of five core competencies: self-awareness, self-regulation, motivation (these three comprising the intrapersonal self), empathy and social skills (the latter two representing interpersonal acumen.) Think about bright, skillful people in your organization who are passed over for leadership and/or despised by subordinates. Chances are, these individuals are deficient in at least one of the EQ competencies.

EQ can be learned. What we try to do with clients is identify a small group to work with initially–usually direct reports to the president or high potential leaders. These are assessed individually for their relative emotional intelligence “scores.” The scores lead to individualized professional development plans (“axe sharpening”.) Mentoring occurs during which hypothetical scenarios are discussed in periodic sessions. The hypothetical gives way to the mentees bringing real life situations to discuss. With the mentor’s help, the mentees learn how to process decisions better. Over time, the team gels as its members learn how to “say hard things in soft ways,” and use feelings as an asset rather than a liability. When the team becomes high functioning in this manner, superior performance is likely its traveling partner!


American Restaurants Struggle to Stay Alive

Back in the late 1980s, the Turnaround Management Association was birthed out of a research project conducted at the Kenan Institute of Private Enterprise at the University of North Carolina at Chapel Hill. As the lead researcher, I had the opportunity to personally pull together a bibliography of articles about businesses whose travails were significant enough to hit the national headlines in various business publications. From the research, we published a monograph and wrote articles about best practices that appeared in 46 national business periodicals in our first 18 months of existence as a trade association. As I and other involved with the Association moved on to other pursuits, TMA moved off campus, starting gaining momentum in chapter development, and now enjoys international members as well as domestic. One of the publications of TMA is the Journal of Corporate Renewal. The Journal‘s lead article for May discusses the struggle of restaurants in the United States to remain profitable.

Some interesting facts from the National Restaurant Association are cited:

  • Restaurants account for 4% of GDP
  • 10% of the U.S. workforce is employed in the restaurant industry
  • 50% of adults have worked in a restaurant
  • one-third of all workers had their first job in a restaurant
  • 48% of the average household’s food budget goes to restaurants (vs. 25% fifty years ago)

The bankruptcy filings of a number of restaurant chains since the recession began in 2008 is but one indicator of a model that is teetering on the brink of survival. The photo above is taken from a Food Network show entitled Restaurant Impossible, wherein Robert Irvine turns a restaurant around in 48 hours. The menu is revised, customer service issues are addressed, $10,000 of strategic remodeling is performed, the revenue and costs are examined for opportunity, and the restaurant owner is challenged to run the business at a profit going forward.

Macro trends in the recent few years towards buying more groceries or becoming value-conscious have definitely affected the top and bottom lines of many restaurant owners. Franchises, which account for about half of the restaurant revenues produced nationwide, have really taken it on the chin. Franchisees who own one or only a few stores have inadequate access to capital these days. Another big factor is the conflict of interest in most franchise agreements that are based on sales volume. The franchisor can implement discounting programs to increase traffic and sales volume, but the franchisee has less and less profit as a result of the agreements.

What can be done? Turnaround experts recommend a process of performing store-level profitability analysis, followed by benchmarking against peer stores. These analyses can highlight purchasing/inventory issues, training issues that are evidenced by waste, and theft/shrinkage that depletes the operator’s assets needed to produce a return.

There are many good consultants who can help a restaurant owner sort through the challenges and create a plan for growth and renewal.

Reverse the Mentoring Stereotype

In its most common context, mentoring is understood as someone with experience (and a few grey hairs!) showing someone younger how to perform key job functions. Yet, one of the hottest trends in human resources is termed “reverse mentoring.” Whether due to job loss and the need for new training, or “Second Act” entrepreneurship, or simply the precipitous amount of change being introduced in organizations trying to compete globally, there has arisen a need for this practice where younger workers are now showing the older ones “the ropes.”

While the concept is that exposure to those outside the corporate suite may be good for staying in touch with the values held by newer workers, there are several other benefits. Higher employee retention rates among younger workers are cited as an unexpected, but welcome outcome. Exposure to management issues and how decisions are made are additional upsides.

When Jack Welch was the CEO of General Electric, he  was mentored on how to use the internet by a young employee in her 20s. He saw such promise from the process that he mandated that 500 of his top executives reach out to younger employees to do likewise. These days, mentees are learning how to use social media effectively from their younger mentors. Even at top ad agencies like Ogilvy & Mather, a worldwide managing director admitted that his more youthful mentors had shown him how to enhance his Twitter posts to be less boring. His eyes have been opened to new possibilities and he now plans to utilize Skype and videoconferencing to facilitate distance mentoring across the firm’s 450 offices. HP & Cisco also have reverse mentoring programs in place.

Michelle Rafter, in a blog post entitled “8 Ways to Make a Reverse Mentorship Work For You,” suggests the following guidelines:

1. Find a compatible partner –someone with skills in areas you’re lacking

2. Set expectations- create ground rules for what you want out of a partnership, such as how often you’ll meet and what both parties will get out of it

3. Get your boss’s OK- A lot of reciprocal mentoring can happen on an informal basis. But if you want or need to set up a formal program, you’ll need your manager’s or company’s approval.

4. Be open to suggestions and criticism- learn in days from someone else what one could take decades otherwise by having a thick skin

5. Make it more than just about tech- maybe a younger person could help you learn about sushi, Chinese, popular music, or even how to lead the next generation more effectively

6. Give as much as you get-the relationship should be mutually beneficial

7. Experiment with approaches– a single department, a program that crosses departments, and a multitude of variations

8. Don’t stereotype- not every 45-year-old has the same knowledge or expertise, so don’t assume every Gen Y worker does, either.