Communications as a Competitive Advantage

 Like all economic recessions before it, this one, too, will eventually come to an end. Corporate revenues, profitability and stock prices will rise. The rate of GDP increase will go up. Unemployment rolls will decrease and hiring will resume. And when that happens, employees’ behavior will change.

      Specifically, the behavior to which I’m alluding concerns those latent desires to roam, to find a new job. Put another way, just because employee attrition rates are low now doesn’t mean that everyone wants to stay where they are. It has a lot more to do with high unemployment rates than happiness on the job.

      For the time being, for the sake of job security and a steady paycheck, people are tamping down their dormant desire to leave and find a new job, often putting up with otherwise untenable situations. But when the economy improves enough to resume its usual competition for talent, they will likely be on the prowl and jump at the first promising opportunity that comes along.

      By the way, the first ones to leave will probably be among companies’ best, most valuable people.

Investing Twice

Regardless of the state of the economy, employee turnover is an expensive proposition on at least two levels. The monetary costs associated with finding, hiring, paying, training and retaining people are not insignificant.

      Organizations that experience high attrition rates are wasting a lot of invested capital, an investment that will have to be made all over again to replace the lost personnel. In other words, at companies with a high turnover rate, hiring costs are at least double what they need to be.

      Secondly, and perhaps more important, retaining and building on the institutional memory and knowledge of your most valuable people is a reward that keeps on giving.

      So, being adept at hanging onto your best people is a distinct competitive advantage, more so when this recessionary period concludes.

      Money that would have to be spent replacing lost employees is put to better use – such as on raises and bonuses to incentivize our best people, thereby creating a cycle that repeats itself.

      But why do some companies experience high employee turnover while others don’t, particularly in that critical transitional period coming out of a bad economy?

      Answer: Probably because of poor internal communications.

      Effective, ongoing employee communications and transparency are a critical means to preventing this loss of talent. The best managers and corporate leaders are skilled communicators, engaging their employees regularly, providing them timely and relevant information about the state of the company, while demonstrating their appreciation of their people. They listen closely and learn from their employees.

      PepsiCo CEO Indra Nooyi characterizes her company’s attitude toward its employees with one word: “Cherish.” In her 2007 annual letter to stockholders, she wrote that it’s one of her personal performance goals: “…cherishing our employees, what we call talent sustainability.”

Employees Notice

Being appreciated, having their views and insights heard and responded to is something that people treasure. They pay attention to supervisors, managers and leaders who communicate consistently and honestly. A symbiotic relationship is established: when people are listened to, they in turn listen closely; and when they are provided timely, relevant information, they in turn provide information.

      Communication inside an organization is its oxygen. Stifle people, put them in a box and restrict or inhibit the two-way flow of information, and they whither. Conversely, they thrive in a communication-rich environment.

      Employees who are flourishing within an organization are engaged: engaged in its vision and the specific strategies that will attain it. Engaged employees are more likely to stick around when the economy improves. Why would they want to leave a company that treats them with the respect and dignity they rightly deserve?

      Invest in the future success of your organization by investing in employee communications and engagement now, before the economy improves, and you will reap untold dividends for years to come.

Nine Tenets of Employee Communications

In my years in employee communications, it still amazes me the number of senior level managers who don’t understand what internal communications really are, nor the central role they play in a business’ success.

      In the interests of keeping things basic, following are my core principles of internal communications toward helping improve understanding... each of which at some time or other have been addressed in this blog:

1. Face-to-face. Communication is, at its core, the face-to-face exchange of information, ideas and insights between and among leaders, managers and employees.  On the other hand, contrary to conventional understanding, communications vehicles like newsletters, email, blogs, intranet sites, and all the rest exist only to support and supplement that communication, not as substitutes.
2. Broken communications. Organizational communication is “broken” when management perceives communications vehicles and their content as “communication.”  This is a corollary to the previous tenet.  Similarly, communications are broken when leaders and managers perceive “communications” as someone else’s job, not theirs.
3. Two-way communications. Internal Communications is at its best when it fosters two-way communications between and among leadership, management and employees.  Effective communications occur in an environment where dialogue, discussion and debate are encouraged; in fact, where that is the default position.  People should feel free to engage in constructive disagreement with their managers/supervisors and peers.  It is through such dialogue, discussion and debate that excellence is created and success achieved.
4. Listening. And, by the way, listening is as important as talking, especially for leaders and managers for whom it can prove particularly valuable.
5. Supervisors are most credible. The most credible communication is between managers or supervisors and their direct reports.  These day-in and day-out relationships should be nurtured so that employees see their immediate supervisor as the best and most reliable source of relevant and timely information about the business. This truism works its way up the chain of command, by the way, so that each person’s direct manager is the best and most reliable source of timely, relevant information.
6. Actions speak louder. Leadership and management actions communicate as much as, if not more than, their words.  People are always on the lookout to be sure that management actions match their words.  When they are out of synch or when their actions don’t underline and enhance their verbal and written communications, they will lose credibility and all future communications will be suspect.
7. Employees are intelligent, able to connect the dots and draw their own conclusions based on what they see and hear.  Leaders and managers assume otherwise at their own risk.
8. “They” vs. “We.” Ultimately, internal communications should transform employees’ notion of their company from “they” to “we” – a strong indicator of whether employees are engaged in the organization’s vision and mission.  In other words, when employees speak of their company impersonally in an arm’s length third person voice, rather than the personal, inclusive first person plural, they are detached and disengaged from the company’s mission and vision. Effective communications, over time, will change that “they” to “we.”
9. External linkages. Internal Communications must be linked with external communication and kept in synch, both in terms of messages and timing. External information sources – whether local or national news coverage – are often employees’ primary and re-affirming source of information about the company. In fact, selective use of external media can reach employees in a more credible way, in an environment they normally trust and understand.

Playing to Your Audience

Last night, I finished Walter Isaacson’s excellent biography of Steve Jobs. And though it contains a wealth of material to blog about, I was particularly struck by the tale of the development of the Apple Stores, for a reason that cuts to the core of communications and marketing: knowing your audience.
       Ron Johnson oversaw the development and rollout of the ultimately successful Apple Stores – and they have indeed proven to be a huge retail success, by the way. Just to put it in perspective, consider the following citation from the book: “In July 2011, a decade after the first [stores] opened, there were 326 Apple Stores… The average annual revenue per store was $34 million, and the total sales in fiscal 2010 were $9.8 billion.”
       What intrigued me about this story within a biography was how Johnson revolutionized the stores’ concept with a last-minute change in approach to the stores’ layout, a brainstorm he had in the middle of the night shortly before the prototype was to be introduced to Apple’s Board of Directors.

Prototyping
Like all Apple products, a prototype of the Apple Store was built in 2000 – in a warehouse near the Apple campus in Cupertino. It was furnished completely, and then the design team hung out there, tweaking and adjusting it until they felt comfortable with the concept and its many components. Johnson led the effort for Apple, and Jobs would stop by about once a week to monitor progress and make suggestions for improvement.
       After fiddling with nearly every aspect of the prototype repeatedly, Jobs and Johnson felt they were ready to invite the Board to see it. But Johnson woke in the middle of the night with a bad feeling:

“…they had gotten something fundamentally wrong. They were organizing the store around each of Apple’s main product lines… But Jobs had begun developing a new concept: the computer as a hub for all your digital activity. In other words, your computer might handle video and pictures from your cameras, and perhaps someday your music player and songs, or your books and magazines. Johnson’s predawn brainstorm was that the stores should organize displays not just around the company’s four lines of computers, but also around things that people might want to do.”

Confronting Steve Jobs with bad news was always dangerous, but Johnson felt strongly about it and urged him to start the design process all over again. After exploding in anger, Jobs sat silently in the car and thought about what Johnson had recommended on their way to visit the model.
       Jobs then presented it to the design group with these words: “Ron thinks we’ve got it all wrong. He thinks it should be organized not around products but instead around what people do.” [long pause] “And you know, he’s right… We’ve got only one chance to get it right.”

Swarming With Customers
And boy, did they get it right. Have you ever been to an Apple Store when it wasn’t crowded? Me neither. While the other mall stores near it may be quiet, the Apple Store is noisy, aswarm with customers and browsers. It never ceases to amaze me.
       This demonstrates a core tenet of successful marketing and, in the same sense, successful communications. Reach people on their turf, respond to how they live their lives and communicate, not how you want them to, and you’re guaranteed to get their attention.
        It is something I learned early in my career, a lesson that has never failed me. When I was a suburban beat reporter for a daily newspaper, once while struggling with a particularly complicated story about a town commission’s meeting, I grew frustrated at finding the right narrative.
       Knowing that I was facing a fast-approaching deadline, my editor pulled me aside to help me get focused. He posed a series of questions that cut to the core of my dilemma. His questions weren’t about the point of the story or its details, but rather about my readers.
       Who were my readers? What was their likely interest in the story and the decisions of this particularly commission? How would the commission’s actions and decisions affect my readers? So what would they likely want to know?
       As the effect of his questions began to sink in, I fairly jumped out of my seat to return to my writing. The light bulb had gone on and I whipped out the story easily and quickly.
       What I had been missing was a clear understanding of focus and purpose. Without either, writing is an exercise in a vacuum to no end. The same is true in corporate communications and marketing.
       When you expend the necessary upfront effort to appreciate your audience, to understand what truly drives them and what they want and need from you, you are well past the halfway point in your journey to connect with them successfully. Will the result always be on par with the Apple Store? Maybe not, but you don’t stand a prayer for any success without that crucial first step.
       The germ of the idea about the customers’ world that disturbed Ron Johnson’s sleep more than ten years ago made all the difference.

Social Media Behind the Firewall, part 2

The previous entry here explored reasons for instituting an active social media program as part of an employee communications strategy. But it barely scratched the surface on the subject of the potential barriers to that effort.

            What are the challenges you’re likely to encounter as you launch your own social media behind the firewall? Certainly, as noted previously here, the legal and IT departments might have confidentiality and security concerns. Is there any danger of employees sharing information that should not escape the confines of the company?

            Again, I’m not a tech guy but I’ve been reassured by friends who are that software, firewall protections, and passwords provide the necessary security today.

Built-in Resistance

So assuming you’ve solved the security issue, the biggest and most difficult barrier to overcome in launching an effective social media system is the same barrier that stymies most other corporate initiatives: time; i.e., no one has enough of it. People are already overwhelmed by email and meetings, to say nothing of the time needed to do their jobs.

            Who has time to monitor social media? Who has time to build a profile page for a LinkedIn type platform?

            The answer lies in getting people to use it. The more a person uses such platforms, the more comfortable they get with it, and the more they realize that it improves their awareness and understanding of the business while adding to their own worth to the organization.

            To build use, leadership and managers must set the example. If it’s important to leadership, it is important. Because of that alone, people will investigate at first, and then start using it, becoming regular participants.

            A couple years ago, Computerworld profiled three early adopters of internal social media. Deloitte, for instance, found that early adoption was slow. The company started with only a portion of the organization.

            Patricia Romeo, who led the effort, said, “People aren’t going to go in as readily when the well is 75% empty. But with the encouragement of leadership, more people got involved and were soon demanding access to the rest of the organization.”

            Romeo’s advice is to continue to build leadership support, even after the early-stage buy-in. “Make sure support is there throughout the organization,” she says. Once the platform begins filling with valuable content, “it’s really about viral adoption.” I would add that leadership support must be in the form of setting the example – i.e., using it themselves by becoming active participants.

            As to the second point, it’s likely that nearly everyone in your organization will have a LinkedIn profile. Rather than ask them to replicate their profiles, make it easy by using LinkedIn’s API to transfer profile data.

The Threat of the New

A new way of communicating, for many in the organization, will represent change. And for most people, change is threatening. Don’t burn the boats. Rather, sustain the conventional lines of communications. As younger employees build traffic on the internal social media network, their more senior peers will come to realize that a lot of business is being conducted there without them, and will soon join in out of necessity.

            Keep in mind that resistance will be greatest among older employees unaccustomed to social media, still more comfortable with their accustomed modes of communication. Again, if the senior managers and company leadership are actively involved, they will have to get involved out of fear of being left behind, or perceived as out of the loop.

            IBM, another company profiled in the Computerworld piece, was one of the first major companies to bring social media behind the firewall. Jeff Schick, VP of social software, says that poor adoption is rarely because users don’t know how, but because they didn’t see the “why.” Help them answer that question.

The Whys of Social Networking

The Computerworld article included a sidebar that's worth excerpting here. According to Amy Shuen, author of Web 2.0: A Strategy Guide, employees tend to have at least one of four goals for why they use social networks.

1.  Quick access to knowledge, know-how and “know-who.” In their profiles, people can list skills, expertise and experience, as well as previous employers and people they know. As with LinkedIn, this helps simplify the job of locating people with the knowledge they need. This is particularly useful inside multidivisional, multi-site, and multinational organizations.

2.   Expansion of social connections and broadening of affiliations. This is the Facebook model, in which the goal is to get to know people better online by interacting with them and keeping up with their personal information.

3.   Self-branding and expression of a personal digital identity and reputation. Before long, people get creative with their profiles and begin to think about how they want to be known in the company.

4.   Referrals/testimonials/benchmarking/RSS updating. On social networks, the viral distribution of knowledge becomes important. For instance, people want to know how many of their “friends” have recommended a video or have joined a community and, in turn, if they discover something cool they want to spread the word.

I close with a variation on an admonishment that has appeared many times in this blog: Social media behind the firewall, at the end of the day, is just another communication medium. Don’t confuse the tool with the task, which in this case is communications: the interaction between people and their exchange of information, ideas and insights.

            If social media helps people be more effective communicators, then it may be something you want to consider for your own organization. But don’t fall into the trap of adopting social media because it’s the latest trend. Do it because it makes sense, satisfies your organization’s communication needs, and adds value.

Social Media Behind the Firewall, part 1

Something new is bubbling up in the world of organizational communications. While most corporate communications managers weren’t noticing, a growing proportion of their internal audience has been bringing new habits of communication to the workplace.

            This younger contingent, the so-called “millennials,” mostly born in the 1980s, has never known a world without cell phones, computers and the Internet. From their early years through college graduation, their primary means of connecting with their friends has been through social media: texting, instant messaging (IM), Facebook, Twitter, and online role-playing games (RPG).

            Upon graduating college, many entered the business world. But their companies’ senior managers were communicating to them with blast emails and webcasts – i.e., those that were “modern” and “up-to-date.” Some still sent out paper memos and print newsletters.

            The internal company website, if there was one, just sat there inertly, with occasional news updates about the company. Maybe there was a blog, but without an interactive feature, a blog that hadn’t been updated for several months. How passé. How very boring. How inefficient.

Dipping Toes in the Water

Fortunately, some companies are addressing this shortcoming, dipping their toes in the water of social media internally. Yes, it’s a scary concept, particularly to legal departments and some IT folks.

            Last month, I attended a peer conference of employee communications managers where “social media behind the firewall” emerged as the hot topic of the morning’s discussion.

            Of the companies represented at the table, more than half had initiated internal social media to some degree. But none had yet gone whole hog. One company had opened a chat function on its internal network, but only for a fraction of its employees.

            In each case, the slow, deliberate pace of rolling it out was a means of proving its value and safety to skeptical legal and IT departments, as well as to work out the bugs and learn what does and doesn’t work. The employee communications managers were pleased with the experiment and eager to let it grow.

            So, what exactly is social media behind the firewall and why should communicators be interested?

            Social media has transformed the Internet into a place where people meet, learn, act, and react in real time. The kinds of activities that take place on conventional social media – Facebook, LinkedIn, Twitter, etc. – are essentially people exchanging news, information and ideas electronically.

            But aren’t those the same kinds of activities that occur naturally within an organization over phone lines, in conference rooms, or spontaneously at water coolers? Yet there is widespread resistance to bringing that capability electronically into organizations, even if it does mean improved communications for multi-site organizations. The primary barrier, it seems, are IT and legal departments that fear hackers, or the spreading of confidential information.

Behind the Firewall

I’m no techie, but from what I’ve learned at social media conferences and read in various sources, embedding social media on a company’s own in-house server, behind the firewall, assures the security that companies need. Numerous vendors provide secure software, including IBM, which offers “Connections” – a suite of products to build internal social media.

            So, assuming we can clear that security hurdle, what kinds of social media should we use internally? The answer depends on a company’s culture, its size, the nature of its business, the number of employees, the number of locations, and the diversity of its internal audience.

            But wait: Let’s remember that social media is just another communications tool and should never be seen as a substitute for the real communicating that goes on between people: personal exchanges of information, ideas and insights.

            So your chosen social media tools should satisfy one core objective: to enhance and facilitate communications among and between employees, managers and leadership. That said, consider three possibilities…

            A LinkedIn style platform for multi-site companies would enable people to connect across departmental and national boundaries to discovery one another and their respective capabilities and talents. Individuals could readily find people of similar backgrounds and areas of specialty, and participate in relevant discussion boards where those in similar fields would discuss common challenges – just like the real world LinkedIn.

            A Twitter-like application might provide a venue where employees could post rapid-fire comments on everyday issues, as well as to provide links to helpful and relevant internal and external websites. Managers and leaders could use it for quick communication of important, timely messages. At the same time, it would be advantageous for employees to “follow” company leadership, as well as their operational or functional management, in addition to their fellow team members to stay atop important developments.

            An internal Facebook type app would allow cohorts to stay abreast of one another’s doings, particularly as it relates to working toward the company’s strategies and objectives. Again, leaders and managers could use the app to spotlight important news, both inside and outside the company.

            Meanwhile, leadership can eavesdrop and participate in the discussions at will, from wherever they are, whenever it’s convenient. Social media, then, can help leaders fulfill an important component of their jobs: staying abreast of what’s going on within their organizations – the “listening” part.

In part 2 of this two-part blog, I’ll explore areas for caution as well as some of the barriers that have to be overcome to assure that internal social media are effective and useful.

Company Morale Impacted by Uncertainty

In the midst of the worst economy of modern times, banks have been particularly hard-hit. Caught up in the sub-prime mortgage fiasco, banks are now getting squeezed by the new “Dodd–Frank Wall Street Reform and Consumer Protection Act,” while their every attempt to increase a fee or two is met with howls of indignation.

            With little near-term hope of improving their bottom line, the big players like Citigroup and Bank of America are looking under every figurative and literal rock to find savings, as well as ways to improve revenues and profits.

            Apparently finding insufficient new revenue and savings, Bank of America CEO Brian Moynihan last week announced that overall employment levels at the bank “would be reduced by 30,000 over the next few years.”

            Pretend you’re an employee of Bank of America and you read that. Which part of that statement would bother you most? Is it the fact that 30,000 people at your company are likely going to lose their jobs, including maybe you? Or is it the implicit uncertainty as to when the axe will fall? For me, it would be the latter.

            I think sure knowledge of impending doom is preferable to uncertainty that bad news will occur at some undetermined point in the future. It’s akin to being a pre-adolescent, in trouble with Mom one afternoon for breaking a window, and then hearing her ominous threat, “Just you wait until your father gets home!” It’s a postponement of Judgment Day.

Understatement of the Year

My candidate for understatement of the year would be the lead sentence in the Sept. 19 Wall Street Journal article about the cuts: “Morale quickly turns ugly after a company warns about layoffs – even if the job cuts won’t happen for a while.” I would change that to read: “…especially if the job cuts won’t happen for a while.”

            One analyst quoted in the article says that he doesn’t know “anybody who’s not looking for another job” there. No surprise. That would be a natural reaction to such gross uncertainty.

            The trouble is, in this lousy economy, there are not 30,000 open jobs out there to which these people can jump just for the asking. So they sit. And they’re not happy. And they’re not likely feeling too loyal toward Bank of America.

            From the Journal article, we also learn that “managers have tried to send short notes to reassure employees but it seems they are nervous about their own positions.” No kidding. How can you, as a manager, encourage your employees to have confidence in and trust the institution when you don’t yourself, suffering the same uncertainty as they are?

            Look, I understand that Moynihan is as much in the dark as anyone else about the state of the economy going forward and whether the fortunes of his bank will improve next quarter or even next year. He can’t very well enact immediate job cuts, lest it make the organization non-functional and further worsen its business case.  

Self-Fulfilling Prophecy

But at the same time, he has created a self-fulfilling prophecy of doom. In such circumstances, even his most talented people are not going to be at their best, focused less on the job at hand than on whether and when the axe will fall on them.

            He didn’t ask me, but if Moynihan wanted my advice, I’d have told him to hold this one closer to the vest. The Journal article quotes an analyst speculating that he made the announcement to mollify Wall Street. I sure hope not. It wouldn't have made much sense if that were his purpose. In this climate, with BAC stock stuck at historic lows, the announcement didn’t cause so much as a blip in the price.

            Better that he work through the implications of near- and long-term strategies regarding job cuts – if, in fact, he and his executive team determined that to be the wisest path. Clearly, a cut of such magnitude (representing more than 10 percent of the total workforce) implies some drastic changes in the way the bank is going to do business.

            Perhaps they’re planning to get out of some businesses, or maybe some geographic areas. That’s where his public statements ought to have been focused: on the business changes he is planning and their likely personnel impacts.

            It is near impossible for a company of its size to inform the internal audience before going public. So there should have been a concerted effort to inform the affected employees at the same time as the public announcement, while providing them with as much information as possible while answering as many questions as they had.

            A dismal internal morale already pervades Bank of America. But having the CEO operate with greater certitude and a sense of urgency is far more effective in retaining employee focus and commitment than the aura of uncertainty that Moynihan cast last week. The company is going to need as much employee focus and commitment as it can get if it’s ever going to be successful again.

Actions Speak Louder

Humor works best when it contains a grain of truth – which is probably why I got such a hearty laugh from this Dilbert cartoon from late last year.

Yes, the “pointy-haired” boss at the center of Dilbert’s on-going storyline is an extreme and farcical version of the clueless manager, the kind of a manager who peruses the latest best-selling business book for new ideas, while ignoring all that goes on around him.

            We might infer here that he read that his best, most important communications are through his actions. We’ve all known people like this – though I hope, for your sake, that your boss isn’t like this guy.

Satirized Bosses
He stands there, coffee mug in hand, and claims to be a role model his employees should emulate – or at least admire – all the while wondering why it isn’t so. He reminds me of the Michael Scott character in NBC’s “The Office” or Bill Lumbergh in the movie, “Office Space,” managers in title alone.

            Lumbergh ostentatiously parks his Porsche in front of the “Initech” offices as though it will inspire his employees to strive for the same for themselves. He presents himself with a phony aura of concern when, in fact he has none and, in the film, is singularly focused on cutting his department’s payroll.

            Scott is the kind of boss who thinks his weird sense of humor endears him to his staff when the opposite is true. He is blind to his oafishness and lack of genuine empathy for his employees.

            Bill Lumbergh and Michael Scott, like Mr. Pointy-Hair, have been elevated to management positions and conclude that they have license to be thick-headed bores, out of touch with the daily struggles and challenges their employees face. They are full of false bravado derived from their belief that their job title alone bestows upon them unique vision and wisdom.

The Peter Principle
Unfortunately, in many places, that’s true. People are elevated up the management chain for a number of reasons, not always the right ones. It’s the “Peter Principle” in action: “every employee tends to rise to his level of incompetence.”

            So Mr. Pointy-Hair probably read his new management book and concluded that his employees need to pay more attention to his non-verbal cues since, he imagines, he’s such an amazing guy with so many talents that should be emulated. But he skipped the lessons about engaging them in the first place, giving them reasons to trust him. He fixated on the desired end result of reverential and attentive employees.

            The other truth embedded in the cartoon is that the employee has a role in communications. Organizations that cultivate that truth by encouraging two-way communications are far more likely to be successful in the long run than the business that sees communications as a one-way, top-down affair.

            In fact, communication is an in-the-trenches kind of thing. The boss that is the best role model is the one who models the behaviors he/she expects to get from employees. They never tell their people what they want them to do and be. Rather, they demonstrate it through their own actions. 

Cases In Point
Over the past three-plus years, this blog has cited numerous examples, including:

• McDonald’s former CEO, the late Ray Kroc, who often visited franchises and, before setting foot inside, would pick up litter in the parking lot.
• Former Southwest Airlines CEO Herb Kelleher, who pitched in loading baggage on and off planes when he saw that a crew was short-handed or the plane delayed because of it; or he helped out at the gate check-in, if he happened to be in the airport and saw that the lines were getting too long.
• The paper machine manager, who walked his plant twice a day and came to understand deeply, and on a personal level, the challenges his employees faced, as well as their insights and ideas for achieving greater productivity.
• Paul O’Neill, former US Treasury Secretary and former CEO of Alcoa, who inculcated a doctrine of safety throughout Alcoa, increasing worker trust and, at the same time, productivity.
• The manager of the luxury hotel who, in his first six months on the job, worked in every department of the operation and came to understand the many daily challenges that his employees faced in assuring customers’ stays were pleasant and enjoyable experiences.

There are many others, but the common thread throughout is that these managers and leaders made it central to their jobs to learn as much as they could about their operations and employees as a path to getting the best performance out of them. These people saw themselves as part of the larger team, not above it.

            Employees emulate their managers and leaders when they feel there is a genuine sense of interest in them. As a result, they come to trust their leaders and see them as authentic role models.

ROPI – Return on People Investment

The core driver of any business is investing with the expectation of positive (financial) returns. Companies build manufacturing plants and buy machinery to establish the means to create products and then get them to market. 

            When customers in their target markets buy their products, the resulting revenue stream is what makes the up-front investments start paying off in the form of profit – also known as return on investment (ROI). 

            When business people talk about invested capital, this is what they generally mean: physical plants, equipment and transportation, the kinds of investments that are amortized and depreciated over time.

            Building a new production plant may cost, say, $150 million and the senior managers justify the expenditure based on the projected ROI – how long it will take to “pay” for the investment before they can start realizing a profit. 

            However, we rarely hear business people talk the same way about the investment they make in their people, whether they are getting a good return on that investment.  Employees are often an overlooked part of the big picture.

            That seems ironic, especially in light of the fact that the cost of personnel is often the biggest line item on most companies’ balance sheets. In addition to salaries, health care costs, and other benefits, investing in people includes many other things, such as:

• The time and money it takes to find the right person for a given position, including paying the recruiter and investing the man-hours to conduct interviews and winnow down the candidates to the final few.
• The initial and ongoing training necessary to assure that people acquire and sustain the skills needed to be the best they can in their jobs, and to excel and rise in the organization, further adding value.
• Various other costs incurred in retaining people, such as salary increases, incentives and bonuses. 

This all may seem obvious. I only reiterate here it because of what we have been experiencing for the past three years or so. Millions of American jobs have been lost – evaporated. And the job shrinkage doesn’t appear to be over in light of recent announcements we’ve read about this month: Merck’s head-count reduction of 13,000 over the next four years, in addition to the 20,000 cuts already announced; HSBC’s announced cut of as many as 30,000 jobs; Bank of America’s decision to eliminate 3,500 jobs; and Cisco Systems’ pledge to cut 6,500 positions.

            Naturally, a good leader resorts to lay-offs only as a last option, doing so only after hiring and wage freezes, other expense cuts, and/or price increases have failed to stanch the red ink. They know that every single laid-off employee is a lost opportunity, a lost investment.  Good leaders feel an ache in the pit of their stomach at the prospect of having to cut the work force.

            While they are conscious of the personal side of each lay-off – the family that’s impacted, and the blow to the employee’s ego and sense of self-confidence – the business leader side of their personality aches at the loss of investment capital.

            However, the bigger challenge and what keeps these leaders awake at night is what each lay-off does to the company and its future prospects. Yes, shedding jobs reduces expenses to better ensure the company’s ability to persevere in the trying times – which is the point, after all. 

            But the care, feeding, and cultivation of effective employees are works in progress.  When it all meshes and the company is thriving, there are few things that make a leader prouder than seeing the employees operating at their best, as a team, contributing collectively toward the company’s mission. 

            But when lay-offs are unavoidable, that finely tuned machine loses its edge. Remaining employees lose their focus on the mission, instead concerned for their own future with the company, while wondering when the other shoe will drop.

            That said, in the toughest times – like right now – businesses need to continue to cultivate their people, to be sure they understand how much they mean to the future success of the business and how important it is for them to stay focused on the mission.

            Of course, the key is communications – through both good times and bad. Keep employees well informed and actively engaged in the external challenges the company is facing: competitive threats, economic turmoil, government regulation and taxation, etc.

            Share with them, too, the company’s opportunities and always invite their perspective and ideas. Open and honest communications build trust and understanding, which will be what leadership needs most when the situation gets tough, when the best efforts of everyone and their full engagement to the company’s mission are central to seeing it through hard times.

Business, Politics and Social Media

An old maxim advises us not to discuss politics or religion in mixed company. I would add that that truth goes double for business. It just isn’t wise. Expressing one’s opinion on such matters does not make us better at our jobs. If anything, it’s an impediment.

            In fact, bringing one’s political opinions into the office, plant floor or business meetings, even casual off-site meetings, can hamper our ability to work together by creating unnecessary tension and distrust in the workplace when our views on certain subjects outside the business realm don’t sit well with others or, worse, create irrelevant and unproductive disagreements.

            Based on my observations, that maxim seems to be followed pretty universally – if not consciously, then simply because we’re all too busy to wallow in political arguments while trying to get our work done.

            Yet, oddly enough, this truth is not universally observed in the context of social media.

            A lot of people, previously without public forums, have discovered Facebook, Twitter and blogs as business communications tools: to connect and have a dialogue with employees, customers, and prospective clients. And that’s good.

            But in the context of your profession, it is ill-advised to express your political opinions on the Internet. Your energies and talents are expected to contribute to a whole greater than yourself – i.e., a business employing you and other people. If you are a business leader, you are setting the tone for your organization. Writing opinions that may offend employees and potential or actual customers may cause them to think less of you and your company.

            When I started this blog three years ago, I imposed that old maxim on myself and have stuck to it. Politics have no place here, nor would they make sense in the milieu of this blog’s theme and its previous posts.

            The task has been fairly easy because this blog is about business, not politics – even when I believe certain legislative decisions made in Washington will have a detrimental (or beneficial) effect on business at large and the economy.

            Nevertheless, as I scan the business-related blogs, Twitter and Facebook posts that I follow, I’m amazed to see how often politics seep into what is otherwise informative business-oriented content.

            These people are sabotaging themselves and their businesses – unintentionally, I assume. Amazingly, many of these people are self-employed. Their opinions dribble into the conversation as they blog, Tweet or post on Facebook as part of their marketing and new business efforts.

            Most are not professing outright support for one end of the political spectrum or the other, or one candidate versus another – at least not overtly. It’s subtler than that. For instance, one blog I follow often uses particular presidential candidates and other well-known politicians as metaphors for certain human characteristics, such as stupidity versus intelligence, and wisdom versus shortsightedness.

            In other cases, certain media outlets are quoted as though they were infallible while other news media are castigated as fictitious and politically suspect.

            A guy I know from my college years plumps on Facebook for his consulting business, plugging his well-written and informative blogs. In this regard, he is using the social network in an effective manner. Yet, he also uses that same Facebook wall to post vitriolic diatribes against the (in his view) political opposition, with plenty of ad hominem attacks tossed in for good measure.

            So, if I were considering him as an advisor to help me address my unique needs, would the fact of his opposite political viewpoint give me pause? Yes.

            On the other hand, maybe I'm misreading him. Maybe he is, in fact, desirous of doing business only with like-minded clients. Maybe his business is thriving and he's so busy that he can afford to alienate about half of all potential customers. But I doubt it.

            One Tweeter I follow regularly writes on business topics as well as occasional commentary about sports, which I enjoy.

            But he seems to Tweet as much about his strongly held political opinions as he does about business issues – and he’s a senior-level executive for a major bank. How many of his customers disagree with his political opinions? Does he care? Do you think his boss or his company's shareholders care?

            Since most presidential elections result in roughly 50-50 splits in the popular vote – plus or minus two or three points on either side – it’s safe to assume that about half your audience will not be amused by your metaphor that casts aspersions on what may be their favored candidate. They may find it inappropriate, no matter how clever you think you are. And if you consider that that audience could represent half of your business prospects, you likely just lost your chance to win the business of a lot of people.

            If you have a burning desire to spout your political opinions online, by all means do it. We all have our First Amendment right to freedom of expression. But rights bring with them responsibilities – as well as consequences.

            The Internet is free and open. But the Internet traffic in ideas is also a two-way street: while you’re free to express your opinions on any subject, your postings are available for scrutiny by everyone. Just be prepared to live with the effects, both good and bad. And don’t be surprised by the negative results your political opinions might have on your business.

Customer Service: Two Tales

A company’s relationship with its customers has a range of realities in actual practice, dependent on which company or industry we’re talking about. But being on the receiving end brings its meaning to the fore.

            When your scheduled flight from point A to point B is delayed, and delayed again so that your actual arrival is hours past the promised time and your luggage is lost in the ether, that airline’s attitude toward its customers quickly becomes critically important to your mental health and well-being, to say nothing of your personal plans.

            Ditto the computer software marketer that chooses to cease upgrading a favorite application you’ve been using and become dependent on after years.

            In fact, these two examples are real. First, United Airlines. Yes, I admit that on this particular occasion, my flights from San Diego to Houston and Houston to Boston this week were on time. The on-board service was adequate. This, I’m sorry to say, was the exception. And not just with United but with the other legacy airlines with which I’ve done business: Delta, American, and US Airways.

            I bring this up because United is in the throes of combining operations with its newly acquired Continental Airlines. Though my flights this week were on Continental aircraft, staffed by Continental crews, everything else about the experience was United. We were reminded of that repeatedly.

            What got my attention was the short on-board TV welcome by United’s CEO, Jeffery A. Smisek. The prime purpose of the welcome, it soon became apparent, was to apprise us of the progress the company is making in merging the two formerly independent airlines.

            And what was the first thing Smisek mentioned? They are making progress repainting their planes. Huh? Will new paint jobs improve on-time performance? He didn’t say anything about merging their two distinctly different cultures, nor anything about improved customer service resulting from combined operations.

            Furthermore, the cocktail napkins that accompanied the beverage service said the following: “Planes change. Values don't. Your priorities will always be ours.” Really? Is United telling us that their values parallel our priorities? Like on-time flights and no lost luggage? I doubt it.

            Sorry for the cynicism but I’ve seen this movie before, especially in the airline industry. Can anyone tell me with a straight face that the Delta-Northwest merger has improved service to the cities those two formerly independent carriers serve? Same question for US Airways and America West.

            Let’s be honest: the primary, perhaps sole purpose of airline mergers is to realize the cost savings that combined operations will yield. It most assuredly is not because the execs sat down and said, “Let’s merge so that we can improve service to our customers.” If that is, in fact, among their priorities, then it’s at the bottom of a very long list.

            Here’s a different case in point: different industry, different type of product, different type of customers. Intuit is a software company, most famous for its Quicken brand of personal and business financial software.

            I have been using Quicken on my Macintosh computers for at least 15 years – perhaps longer. The software has helped me manage my finances quite well, for which I am grateful. But apparently, I will no longer be able to use Quicken.

            I’m not entirely sure why, because I am not a software expert. But with the introduction of Mac OS X 10.7 (a.k.a. Lion), Quicken will no longer work on Macintosh. I started digging into this because I am reluctant to give up this helpful software, and learned that Intuit has not updated Quicken in more than five years and, further, has no intention to update it so that it will operate on Lion.

            An exchange of fruitless emails ensued with their tech support people. Sifting through their extended namby-pamby answers, I gleaned that they really don’t care about Macintosh customers anymore. They suggested that I load Windows on my Mac so that I can continue to use Quicken. Of course, that answer fails to acknowledge that to do so, I would have to acquire Windows and a Windows-compatible version of Quicken. Aside from the added cost, I don’t want the tech hassle.

            So Intuit has lost me (and no doubt countless other Mac users) as a customer.

            I find it hard to believe that Intuit is walking away from Mac users, a target audience that happens to be the fastest growing among all computer users. That’s their choice. My choice is to seek an alternative to Quicken and cease doing business with Intuit.

            What’s the lesson here? It’s not difficult to find the flip side of good customer service and the long-term value and good will it brings to the company willing to commit to it. Why am I exclusively a Macintosh user for 20-plus years? Why do I pay such close attention whenever Apple introduces a new product?

            Apple’s customer service is second to none. They will not let you go until they are confident that they have solved your problem. Apple offers a myriad of ways to access customer service: over the phone, on-line discussions and FAQs, and their famous Apple Genius Bar where you can get face-to-face help on virtually any problem.

            (Not coincidentally, Apple is thriving. Check their revenues, profits and stock price for proof.)

            Compare that experience to the frustration felt standing at the end of a snaking line at the airport customer service counter after your United (or Delta, or US Airways, or American) flight was canceled.

Chromebook at 38,000 feet

New and emerging technology has always fascinated me, whether its “newness” is only because I hadn’t discovered it yet for myself, or when it is, in fact, new. So I jumped at the chance when offered the opportunity to use a Google Chromebook for free, complete with free on-board WiFi, on my Virgin America six-hour flight from Boston to San Francisco today.

Google and Virgin partnered for this experiment, from July 1 through the end of September, to give passengers on a first-come, first-served basis the chance to use this new tool on selected Virgin America routes (between San Francisco and Boston, and Chicago’s O’Hare and Dallas-Ft. Worth). Google is also extending the offer to guests at New York’s Ace Hotel.

You check out the computer at your departure lounge with a credit card and driver’s license, and return it at your arrival airport. There’s no charge -- unless you forget and walk away with the thing. Then, you’ve bought it.

In that both companies are fearless adventurers in the world of innovation and marketing, the match is perfect. My guess is that the Google folks approached Virgin America with the idea. No doubt it took a New York minute for Virgin to agree.

(I just can’t imagine in a million years any of the legacy airlines -- American, Delta, United, et al. -- going for this idea without undertaking a multi-month cost/benefit analysis, after which the novelty of the Chromebook would be gone and the genius of the marketing opportunity lost.)

As a non-technoid, let me try to explain the system as it was ably explained to me by the rep from MKTG Marketing at Logan Airport this morning. 

The Chromebook is the latest product of Google’s tsunami of innovation and creativity. Two companies, Acer and Samsung built these micro-laptops for Google. There are two Samsung versions: 3G for $499, and WiFi for $429.

In this experiment, we were loaned the Samsung WiFi model, which weighs 3.26 pounds, offers a 12.1-inch display and 8.5 hours of continuous usage power. It looks and feels a lot like the MacBook Air, though mine is black with a white top. (It also comes in all-white.)

The control keys are positioned slightly differently than my Apple keyboards and took a little getting used to. Otherwise, it’s a fine little machine.

The genius of the Chromebook is to serve as a “dumb” conduit for access to the Internet and, especially, the “cloud.” It has nominal on-board memory, only enough to run it. But that’s okay because you don’t need it. All the necessary applications are in the cloud. And when you create documents, as I am doing prior to pasting this into my blog, you go to Google’s home page and use their Documents software, which resides in the cloud. The saved document stays there too, accessible through your Gmail account.

So you log onto the Internet, once the plane reaches 10,000 feet, and you’re on your way, accessing web sites as you would on your own computer. 

The value of Google-Virgin promotion is that it provides an extended hands-on experience with Google’s version of cloud computing within the confines and comfort of Virgin’s cabin. For people like me, anchored to our computers’ hard drives and backup systems, it's a novel experience. 

Meanwhile, you’re also getting comfortable with a small computing platform that lacks a real hard drive -- flash memory only, with one USB port. It’s a smart promotional win for both companies.

Cloud computing, for those of us new to the concept, is where computing technology is going, envisioned long ago by Danny Hillis, MIT scientist and founder of Thinking Machines Corp. Google isn’t alone there. Amazon, too, is a major player, but so are newer companies like Box.net, a remarkable, fast-growing Silicon Valley start-up founded six years ago on the idea that people should be able to access and share their content anywhere.

It boggles the mind to think of the possibilities, of the collaboration and work that is getting done in the cloud now that previously was either impossible, or only through the use of email attachments and lengthy phone calls. Now, we have Skype and tools like the Chromebook and Box.net. Amazing to think of how far we’ve come in such a short time.

No matter where we are in the world, we can collaborate with colleagues on time-sensitive documents. Through either Google’s Gmail service or Box.net, we can allow specific individuals password-protected access to our sensitive documents. We can use any computer to access those files from anywhere we are at the moment. 

So when I get to SFO at the end of this flight and the MKTG rep greets me, he/she will undoubtedly ask what I thought. All I need to do is give him/her the link to this blog, posted somewhere 37,925 feet over Lake Michigan. 

Thanks for the loan, Google. Nice idea.