Wednesday, May 25, 2016

Is Your Workforce Strong Enough? 5 Ways to Tell & 3 Things to Do About It

By Scott Vollero

Economists are a pessimistic bunch. Even typically sober publications like The Atlantic love to give voice to doomsayers who can’t stop talking about how bad things are (or about to get). It’s enough to make you want to climb into bed and pull the covers high over your head.

Then again, maybe the eggheads have a point. The economic experience of the past decade has been alternately traumatic, depressing, boring, and maybe — for certain people in certain places — moderately hopeful. It’s never a bad idea to look around for the next shoe to drop.

For employers, the best defense against an uncertain economic future is a strong, dynamic workforce. It’s one thing to parry challenges you can see coming a mile away. It’s quite another to face black swans and sudden swoons with confidence and conviction.

But building a dynamic workforce is easier said than done. Some would argue that it’s easier to place bets on future uncertainties than to sort through so many proverbial haystacks to find the talented human needles capable of meeting them head-on.

Let’s set the haystack aside for a moment — it’s scary, no question. First, let’s take a look at how to dispassionately evaluate your workforce for gaps and inefficiencies that could compromise your ability to face the economic challenges we all know are coming. The first step to recovery, after all, is admitting you have a problem.

1. Measure Your Passion Quotient

Are your employees passionate about their work? They should be. And, if they’re not, you need to ask why. Their apathy could compromise your ability to win and keep clients, compromising your bottom line.

Size up your employees’ “passion quotient” directly, with frank surveys that ask questions about their buy-in (or lack thereof) and commitment to the cause. You can also gauge employees’ passion indirectly, by objectively and subjectively evaluating their effort and work quality.

2. Check Credentials

Credentials don’t guarantee quality work. An advanced degree isn’t a tonic against laziness or incompetence; in some cases, it’s actually a smokescreen for such undesirable characteristics. But, by and large, you want to have subject-matter experts playing on your team. If the candidates with the best resumes consistently slip through your fingers, there’s probably a good reason. When those candidates wind up at the competition, your whole company suffers. If you don’t address the issue quickly, you could develop a reputation as a second-rate employer — one that’s formidably difficult to shake in competitive industries.

3. Evaluate Resilience & Flexibility

Strong workforces are flexible and resilient. They’re able to adapt to new information, unforeseen challenges, and sudden shifts in the state of play. They’re steady in crisis situations, no matter how much happens at once or how little control they feel like (or actually do) have.

The best way to evaluate these attributes is to observe your workforce at crunch time. Do they stay cool and calm, or do they panic?

4. Look at Inflows and Outflows

One of the many measures money managers use to gauge fund performance is known as net inflow/outflow. When a fund’s capitalization grows, it experiences a net inflow. When its capitalization shrinks (as investors request their money back), it experiences a net outflow. You can probably guess which is bad.

Employees aren’t literally made of money, but their net movement — and the frequency with which they apply for open positions — is a good proxy for public perception. As your company’s stock rises, talented candidates flock to your HR department and existing employees stick around, producing a net inflow of talent. As your company’s stock falls, talented candidates look elsewhere, and existing employees start updating their resumes. Beware the net talent outflow.

5. Listen to the Chatter

Who said gossip is unhealthy? Painful as it may be, one of the best ways to gauge the strength of your workforce — and determining how your company is really perceived outside the cozy bubble of your executive suite — is to pay close attention to current and former employees’ off-the-cuff comments. Mind you, it’s not healthy to obsess over such things. But it’s not a bad idea to spend an hour or two per week with your ear to the ground on LinkedIn, Glassdoor, Indeed and the like.

Alright — you’ve assessed your workforce and can bravely admit where it falls short. What can you do about it? To start, these three things.

1. Identify and Support Rockstars

It’s not clear whether the 80/20 rule applies to workforce dynamics. It’s probably unrealistic to expect 20% of your employees to account for 80% of your company’s value-add. But that doesn’t mean your rockstars don’t do more than their fair share. Always be on the lookout for talented, loyal employees who clearly want to grow with your company — and always be willing to give them what they need to succeed.

2. Always Be Hiring...

...even if you don’t have any open positions at the moment. There’s no harm in taking applications — at the very least, an open-door policy expands your talent network and keeps your company on talented candidates’ collective front burner.

3. Go Beyond the Paycheck

To attract and retain truly talented, game-changing employees, it’s not enough to simply outbid your competitors’ salary offers. Though in-demand employees care about that bottom line number, they know they’re going to get paid well anywhere at the end of the day. No — they’re more concerned with solid benefits, workplace flexibility, and work-life benefits that leave them feeling like they control their own destiny.

Saturday, May 21, 2016

These 4 Things Explain China’s Rise (And What Happens Next)

By Scott Vollero

If you’ve been paying attention to world news at all this year, you’ve likely heard a great deal — much of it unflattering — about China. For better or worse, the U.S. presidential campaign has further heightened the rhetoric and sharpened the American public’s focus on the Middle Kingdom.

On the one hand, longtime China scholars and international businesspeople appreciate the increase in attention. There’s a lot to unpack about (and learn from) the U.S.-China relationship, and the process works better when the public is fully informed and engaged.

On the other hand, an increase in attention means a potential increase in misinformation. No matter their relationship to the Middle Kingdom, it’s important for members of the general American public to have a clear, fact-based understanding of Chinese culture, politics and business.

On that note, let’s take a closer look at what happened before China broke into the mainstream American discourse. These four things help explain China’s rise over the past several decades — and might offer some hints as to what’s next for the Middle Kingdom.

1. China’s Opening to the West

Ever heard the phrase, “Nixon goes to China”? Those four little words more or less kicked off the modern U.S.-China relationship.

For those of us too young to remember the early 1970s, it’s near-impossible to understand just how bold this move really was. Prior to Nixon’s first visit to China, in 1972, the U.S. and Chinese governments basically weren’t on speaking terms. In fact, communist China was a sworn enemy of the United States — firmly in the Soviet Union’s orbit, not ours.

Nixon’s visit didn’t change the state of play overnight, but it certainly laid the groundwork for a renewed trade relationship between the two countries. And it was one of the first true cracks in the so-called Iron Curtain of communism, even if China wasn’t officially part of the Soviet bloc.

2. The One-Child Policy

In 2015, China officially discontinued its one-child policy, ending a 35-year social experiment changed the country’s human fabric in profound ways. Instituted in the late 1970s, the one-child policy had an understandable, if controversial goal: to slow China’s then-explosive population growth, which was already straining the country’s meager resources.

The strictly enforced rule applied only to urban households, but its effects were pronounced and widespread: the Chinese fertility rate dropped from north of 6 per woman in the early 1970s to less than 2 by 1980, and remained nearly steady thereafter.

So far, so good, right? Not exactly. Rural fertility remained elevated, creating increasingly overcrowded conditions in the underdeveloped Chinese hinterland and laying the groundwork for the largest, fastest human migration in history.

What’s more, traditional Chinese families — even urban families bound by the one-child policy — retained a strong cultural preference for boys. That led to the abandonment of tens of millions of female children, creating a massive gender imbalance — more than 30 million more men than women, according to reliable estimates. These men found gainful employment (and willing employers) in China’s booming coastal manufacturing cities. However, many of them are now looking for wives; some are bound to be disappointed, and it’s not quite clear what that means for China’s social stability going forward. In the years to come, millions of Chinese men will likely look for new opportunities outside China’s borders.

3. The Great Migration

When China opened to the West, it gained access to millions of well-off consumers with near-insatiable appetites for cheap consumer goods — and its state-driven economy was all too happy to oblige.

As factories sprung up in the port cities and railroad towns of China’s densely populated eastern third, impoverished rural men and women flocked to their shadows, eager to earn living wages for the first time in their lives. This massive population shift — involving hundreds of millions of people in all — is often referred to as the Great Migration. It’s the single biggest reason China became known as the “workshop of the world” during the 1990s and 2000s, and the country’s coming turn toward consumer-driven economics wouldn’t be possible without it.

4. Rising Wages

In the West, China’s rapidly rising wage floor hasn’t gotten much press. Rising wages are undoubtedly a good thing for struggling Chinese families, but they also make it more difficult for international entrepreneurs to find value in the Middle Kingdom. They’re one of the many reasons low-cost production is shifting to cheaper Southeast Asian nations, such as Vietnam — a worrying trend for Chinese policymakers worried that the shift to a consumer economy won’t happen quickly enough to forestall political blowback among rank-and-file Chinese.

What’s Next for China?

Anyone who tells you they have an easy answer to this question is stringing you along. China is a huge, complicated country. It’s tough to figure out what’s happening on the ground in China in the best of times, even if you’re based there and travel extensively throughout the country.

One thing that’s abundantly clear, though, is that China is in the midst of a potentially momentous turn. In the space of a single generation, it’s poised to transform from a predominantly agricultural and industrial economy into one driven by a mix of consumption and services. In short, it’s about to become a lot more like the developed nations its leaders have long viewed with a mixture of skepticism and envy.

This is a tough transition to make. Other countries, including the United States and most E.U. nations, have navigated it more or less successfully in the past. However, as the old caveat goes, the past is not necessarily prologue. A lot could go wrong, at least in the short term.

Does that mean we need to worry about China’s place on the world stage? Hardly. The Middle Kingdom has been around for thousands of years, and it’s sure to stay relevant for a few more.

Thursday, April 14, 2016

Has Google Cracked the Hiring Code?

The talent marketplace is more competitive than ever before, and it’s likely to become more so as the skills gap widens. Many companies struggle mightily to find qualified candidates for open positions, often compromising on mission-critical job requirements or letting jobs go unfilled for months at a time.

In such a cutthroat environment, how can companies — particularly smaller firms without big, well-oiled human resources machines or set-in-stone hiring practices — make sure that they’re hiring the right people for the right jobs at the right times?

According to Business Insider, Google may have cracked the hiring code. At the very least, they’re well on their way to reducing the hiring process to a cold, hard science and minimizing the risks associated with bad hiring decisions.

Most companies don’t have Google’s immense resources or reputational cachet, of course. But even small businesses can take a page or two from the tech giant’s — and its peers’, many of which now emulate Google’s approach to HR — playbook. Here’s a look at how Google makes exceptional hires, and how you can do the same at your company.

Use an Objective Process & Evaluation System

It’s all too easy to let subjectivity infect the hiring process. To guard against human biases, use a multi-tiered system that sequesters the people in charge of making actual hiring decisions from the folks who handle recruiting, interviewing and early-stage vetting.

Google’s hiring process, which takes up to 10 weeks, is instructive. The company taps the position’s direct report, an HR point person, and a representative cross-section of the position’s colleagues and peers to review applications and conduct initial interviews. They all take forensic notes that become part of the candidate’s file (and, if hired, their employee file). Google then instructs a separate hiring committee to review each finalist and make a decision based solely on merit. Subsequently, each hired employee is reviewed against the exhaustive notes that his or her interviewers took during the onboarding process.

Don’t Compromise Your Standards

No matter how long the hiring process drags on or how elusive prime candidates seem, Google never compromises its stated standards. If a posted position requires five years in a lead developer role, Google simply won’t hire someone with three years’ experience — no matter how impressive their CV appears otherwise. Maintaining uncompromising standards is tough in a competitive talent marketplace, but it’s a huge part of the secret sauce that makes Google so successful. And, if you’ve got the discipline, it could be an important ingredient in your secret sauce too.

Don’t Outsource Unless You Really Need To

Along with many fellow tech firms, Google handles a surprising amount of headhunting internally, even for super-specialized positions. It certainly doesn’t hurt that Google is a household name whose open positions attract the best and brightest, but there’s no reason smaller, less recognizable companies can’t follow its lead into the world of DIY recruiting. The trick: building networks around specialized or high-performing employees as they’re hired, creating at-the-ready talent pools that can be tapped at will.

Hire for Competence, Not Teachability

It’s great to have employees who can adjust to new facts and paradigms. You certainly don’t want an army of inflexible compu-bots running the show at your growing company.

At the same time, you’re not in the business of babysitting bright-eyed, bushy-tailed newbies, either. If you wanted to run a classroom, you’d go into teaching. There’s no shame in making it clear to candidates that you’re looking for people who can hit the ground running on day one. If you communicate competence as your top hiring priority, your candidate pool will self-select accordingly.

Remember That the Interview Is a Two-Way Street

Even Google has to sell itself to prospective employees. According to Business Insider, a senior Google manager keeps a stack of impressive current employee resumes in his desk. If a candidate expresses ambivalence about joining the Google team, he hands them to the candidate as proof that they’ll be working with the best and brightest. The result? “It works every time,” he says.

Do you incorporate any of these strategies into your company’s hiring process?

Thursday, April 7, 2016

Doing This Will Help Motivate Your Employees Quickly

By Scott Vollero

Do you trust your employees? If not, why the heck are they your employees?

Trust is one of the most effective and underrated means of team motivation. The catch: you have to demonstrate unambiguously the presence of said trust. You can’t just tell your employees that you trust and value them and expect everything to work out.

If you’re serious about motivating your employees to perform at their peak, consider these strategies for demonstrating that you actually trust them.

1. Give Them Ownership (Literally)

What better way to show your employees that you value their contributions than to give them a stake in your company’s success? Performance bonuses are table stakes in many competitive industries, but equity-based compensation — whether tied to performance, tenure or other factors — goes a step beyond. In an increasingly tight market for talent, equity can be a big (perhaps deciding) consideration for candidates weighing multiple job offers. As new hires become veteran employees and build your trust, increase their equity accordingly. While it’s tough for many business owners to stomach the thought of awarding shares to dozens or hundreds of employees, skin in the game is a small price to pay for loyalty.

2. Carve Out Domains

Another way to show your employees that you really, truly trust them: give them the run of important, but well-defined, business silos. Neutralize the shared-responsibility threat — when everyone is responsible, no one is responsible — by giving trusted employees veto power. If they don’t like how things are progressing under their purview, they should have the power to change them. “Owned” domains offer a particularly powerful incentive at rapidly growing businesses, where silos tend to expand and multiply with time.

3. Show Them the Value They Create (and Protect)

Not every employee can have his or her own personal fiefdom. But you can still communicate trust to rank-and-file employees by showing just how valuable their contributions can be. If you run a shop floor, for instance, put a price tag on your most valuable pieces of equipment. Faced with the prospect of damaging machines that add so much value to the workplace, the workers tasked with operating or supervising them are sure to treat them with the respect they deserve. And they’ll do so with pride, knowing that you easily could have entrusted the machines’ care to others.

4. Promote From Within

It’s tempting for growing businesses to cast a wide net for top talent. But this can be a short-sighted strategy that hamstrings your business in the long run. Loyal employees naturally resent outside hires, particularly when they’re brought in to fill senior roles that were posted internally. While it’s not always possible to fill specialized jobs with talent on hand, particularly in the early going, you’re more likely to get the most out of your employees if you can honestly make the case that you’re prioritizing internal development over headhunting.

5. Ask Them for Honest Feedback

People love to gripe about their jobs, even if they’re broadly satisfied with the work they do. If your workers are going to talk anyway, why not listen to what they have to say? Taking the time to solicit, organize, and respond to employee feedback demonstrates that you actually care about the employee experience, not just the bottom line.

6. Make It Clear When Trust Has Been Broken

Not every employee responds positively to trust. Some actively take advantage of their employers’ goodwill. If you ever find yourself faced with an employee who’s knowingly broken your trust, act quickly and decisively. You’ll make it clear to the rest of the team that your trust comes with a fair price — something that most people know instinctively, anyway.

How do you show your employees that you trust them? Have you tried any strategies that just don’t work?

Thursday, March 31, 2016

The Big Mistake New Business Owners Often Make

By Scott Vollero

Most people love to please. Making others happy, or at least convincing ourselves that we’re making others happy, is a fundamental human desire. As a social species, we’re hardwired to demonstrate our value to other humans, whether to attract potential mates, earn the protection of a stronger rival, or simply to generate a little companionship in an unfriendly world.

Natural Born Pleasers

The hardwired drive to please compels some folks to try to be everything to everyone. They’re perennial pleasers, willing to say or do almost anything to engender a positive response in their foil.

Back when everyone lived in small, nomadic hunter-gatherer bands, it wasn’t too difficult to be everything to everyone. After all, “everyone” was probably just a few dozen people, most of whom did pretty much the same thing for a living.

In super-complex 21st century societies with hundreds-strong professional networks and razor-thin divisions of labor, everything to everyone is a pipe dream. People who seriously try to please everybody all the time are more likely to please no one — and they may face the temptation to take shortcuts or make ethical compromises that threaten the quality of their work, the integrity of their personal relationships, and the strength of their reputation.

Not a Good Look for New Business Owners

Entrepreneurs are particularly prone to what sociologists (probably should, but don’t) call the “everything to everyone fallacy.” When you’re doing your all to get a new company off the ground, it’s natural to try to build relationships by giving, giving and giving some more.

But even more so than individuals, businesses can’t be everything to everyone. That’s not how the market works, after all. There has to be some give and take. Inevitably, that means there have to be winners, losers and sore feelings.

Here’s how to avoid falling into the everything to everyone trap.

1. Hire the Best and Delegate, Delegate, Delegate

New business owners often have trouble letting go of things. They live by the mantra, “If you want something done, do it yourself.” That’s good advice under the right circumstances, but it’s simply not realistic for most business owners. The single best way to avoid being everything to everyone — and to avoid doing everything yourself — is to hire a trusted team and delegate as its members prove they’re able to handle increased responsibility.

2. Play to Your Strengths & Value

By the same token, it’s important to stick with what you’re good at. Don’t delegate the mission-critical tasks that you either don’t trust others to do at all, or don’t trust anyone to do as well as you. When you devote more time to your strengths, you strengthen your business by default.

3. Set Boundaries & Don’t Budge

When you’re starting out, it’s tempting to build bridges to vendors and customers by offering great deals that you can’t actually afford to sustain. It’s okay to make such offers, as long as you’re clear that they’re available only for a limited time and won’t be repeated. Continuing to offer unrealistic deals devalues your brand and increases the likelihood that you’ll be seen as a pushover, weakening your hand in future negotiations.

4. Work Off a Timeline

When you have 20 tasks in front of you, all of which needed to be done yesterday, you’re liable to try to be everywhere at once. Use a timeline with hard deadlines and regular status milestones to carve some order out of this chaos, and take on only those tasks that you know you can complete by the proscribed dates and times.

Are You Trying Too Hard to Please?

Trying to be everything to everyone probably isn’t the biggest mistake you can make as a budding entrepreneur, though it’s certainly in the running. More to the point, trying to please everyone all the time can lead to big headaches down the road — even if it’s tempting in the short term.

If you suspect that you’re trying too hard to please, step back and evaluate how you approach your business’s employees, customers and vendors. Ask a trusted advisor to provide unvarnished, unbiased advice about how to shape up. And, once you’ve diagnosed the problem, don’t be afraid to step up and break a few eggs. You’ll be better off for it in the long run.