These are some of the more recent thoughts on collaboration...

Check out Part 1 that follows...

This Brazilian has created a billion dollar business by letting people manage themselves, select their own managers, their level of pay and the only system - anonymous review

Is this the greatest business challenge of the next thirty years?

For years we have been told that the greatest business differentiator is the quality of the people we employee. Sure, this is important, but is it the greatest differentiator? After all aren’t there plenty of others that are at least as important - innovation, scale, efficiency, quality …

But now, there are several universal trends that indicate ‘people’ will almost certainly be the most important differentiator for the next few decades, and the reason is simple – scarcity.

The western world and to some extent the developing world will find it increasingly difficult to find employees. Those organisations that compete effectively for labour will thrive and those that don’t will disappear. The labour market will become increasingly competitive as employers position themselves to attract and then retain the people they need.

The GFC was nothing more than a temporary distraction from this on-going issue. The trends across all of the western world and much of the developing world are the same:

1)            Lower birth rates

2)            People living longer

3)            A shortage of skilled labour

4)            Greater work mobility

So what are the implications?

It all comes down to this.

It will be harder to find people and it will be harder to keep people; that organisational success will be increasingly determined by how successful an organisation is at finding and keeping good people.

Much to their credit, many organisations resisted the temptation to reduce their workforce during the recent economic downturn.  If the last major recession of 1991-92 taught us anything, it was that employees do not forget.  If an organisation fails to look after their employees during the tough times then those same employees are not going to show any commitment to that employer during the good times.  This time around many organisations moved fast to protect their employer brand by ensuring that wherever possible, employees were retained, even if that meant in some instances reducing work hours and conditions.

The employer brand, the attractiveness of that organisation as a place to work, has therefore become as important to retention as the product brand is to product sales. Leading organisations now have in place a wide range of ongoing initiatives to protect and strengthen their employer brand.

Those organisations with a strong employer brand are not only able to attract the very best people but they are able to retain them longer and employ them more productively.

Whilst estimates vary, it is generally calculated that the cost of losing an employee is equivalent to 85% of their total employment costs - and this is just the bottom-line impact.  On top of this you have the disruption that a departing employee causes in terms of the continuity of the customers relationships and the general disruption to the focus of their team and their team leader.  Employees that work within a stable work environment with lower turnover tend to stay whilst those employees who work in an environment with a high turnover tend to leave.  In other words high employee turnover is self-reinforcing.

What actions are employers taking to help build their employer brand?

The first thing they are doing is undertaking research, finding out what it is that existing and potential employees are looking for from an employer.  The analogy with product branding is obvious.  Get to know your market!

There are, of course, many complexities involved in this exercise. No two people are likely to have exactly the same requirements from their employer.  Some may be happy to trade job security for less money, whilst for others they are happy to face higher employment risk for more income.  Some employees like to work in a collegiate, co-operative environment, others in an environment based more on individual effort.  There are of course, an infinite number of variables.

The challenge for the employer therefore is to clearly define what ‘types’ of employees they require.  This requires a clear articulation of values and behaviours, work types and organisational culture.  Once the organisation has clearly defined the types of employees they are seeking and also clearly understand what employees are seeking from employers, they can then set about the task of:

1)            Building a work environment that retains these types of employees

2)            Putting in place recruitment strategies that will secure these type of employees

Of course some organisations focus on attracting employees without focussing on what is necessary to retain them.  These employees are attracted by what is promised and are disappointed by the reality once they arrive. In the marketing world this is like being attracted to a box of chocolates in pretty wrapping which then turn out to taste pretty awful. We have all had these purchasing decisions and we generally feel conned as a result. Certainly we would not by that product again and we may even bad-mouth the product to our friends.

The reason why many employers focus on the recruitment strategies to the detriment of the retention strategies is that it is easier.  It is easier to put up a stand at a university to attract the young and the brightest than it is to actually build an organisational environment that lives up to the promise.

Building a strong retention environment requires a number of things.

First, the employer needs to think of their employees as customers and the leaders within that organisation responsible for ensuring that these customer needs are met.  Each leader is responsible for a unique customer group, their team.  Each team will have its unique customer issues and requirements.  A team within a large manufacturing company that works on the shop floor will be extremely concerned about Occupational Health and Safety, whereas a white collar worker within the accounting department of the same organisation will have no such concerns.

So the first step any organisation must take is build an understanding of each of these unique employee groups (once again this is exactly the same as building a segmented marketing strategy for products), asking the question ‘what is it they want in order to feel passionate and committed, productive and focussed?’

Of course, the only way to know this is to ask them.  The leader, for example, could simply sit with his or her team members and ask the question, "What is it that you need to be more engaged, committed, passionate and productive in your job?"

There are, however, some serious problems with this approach.  First, it would be a very unusual team where all employees felt they could speak openly about every issue they have.  Are they, for example, really going to criticise their team leader’s communication practices? Are they going to complain that they are too busy in case this is misinterpreted as their inability to cope? Are they going to raise issues about their overly bureaucratic information systems when this could be seen as simply their desire to dodge the paper work?

Secondly, they may not actually know or be able to clearly articulate what it is they require. Most of us are unclear about what really drives us, whether this is be with respect to our jobs, our purchasing decisions or our personal lives. Often our thoughts are jumbled and priorities are unclear.

Because of these problems there is a tendency for employees to give a simple and obvious answer to what they need, that is, they simply want more money. But research has shown that money is rarely the prime motivator. Organisations who simply out pay their competitors will struggle. Pay is a blunt instrument. The challenge for the organisation is to identify and encourage intrinsic motivators or emotional connections. Whilst these are more difficult to identify, the employer who indentifies and delivers these emotional connectors will build the most compelling employer brand.

This is not to say one on one conversations are invaluable, they are.  But they are not sufficient.

To find out what employees really want, the organisation needs to do its research. A confidential, well-constructed contemporary employee opinion survey is the most popular vehicle for this. Over the past ten years employee surveys have moved from mere tokenism to become one of the most powerful organisational performance improvement initiatives available.

What other single initiative can:

• Make teams and businesses more efficient
• Strengthen leadership
• Improve employee engagement, passion and commitment
• Increase customer focus
• Improve sales
• Build alignment
• Enhance employer branding
• Reduce employee turnover

Other tools such as exit interview software also provides valuable insights.

Retention improvement action planning software helps larger organisations deliver different retention strategies to different segments or teams.

Conclusion

Building the best possible employer brand is based on developing the best possible understanding of employee needs and then meeting these needs.  Because these needs evolve over time and the structure and makeup of corporations change, this research needs to be fresh and continuous. Great organisations will have in place an effective, on-going process for capturing employee issues and addressing them.

Every successful organisation will be constantly striving to build the best possible business environment for their employees, a workplace that encourages ideas, passion and commitment.

This organisation has the retention issue under control and they have built and can defend what is becoming the true business differentiator for all companies, people.

Source:

Lanning Bennett
Founder

COI Group

www.coigroup.com
1300 364 705



This is a creativity test. We're going back to the days when the phone booth was about the only alternative to the desk phone. You're the president of a company that makes phone booths.

Recently your closest competitor has begun to whittle away at your market share. Desperate, you ask all of your employees for ideas. Not just run-of-the-mill ideas, but innovative, creative ideas.

1. Your sales manager suggests air-conditioned phone booths.
2. Your treasurer says to add meters that tell a caller how much his long distance call is costing.
3. The janitor says, why not put note pads in your phone booths so folks won't write on the walls and windows.
4. Finally, your administrative assistant suggests you start making phone booths with wheels.


Quick! Which idea gives you the greatest, long-term potential for developing into a breakthrough invention?

The phone booth on wheels. Because it's the craziest. After all, what's the difference between a phone booth on wheels and a car with a cellular phone?

The first three ideas are just fine incremental ideas. They have a better chance of making money tomorrow. But if it's breakthroughs you're looking for, the kind of ideas that take the world by storm, look for crazy ideas and the cranks who come up with them.

In a word, attitude. If you want big ideas, you have to develop a big tolerance for the outrageous. You can start today by steering your people away from the ordinary.

They'll either drive you crazy or make you wild about the possibilities. It's all in the way you look at it.

Peter Lloyd is co-creator with Stephen Grossman of Animal Crackers, the breakthrough problem-solving tool designed to crack your toughest business problems.

Source

Editor's Note: Harvard Business School professor John Quelch writes a
blog on marketing issues, called Marketing Know: How, for Harvard
Business Online. It is reprinted on HBS Working Knowledge.

When driving these days, do you look at the prices every time you pass
a gas station? Do you notice yourself paying more attention to the
prices of everything you buy? You are not alone. Consumers everywhere
are more price aware. People who've been indifferent to price
increases for years are suddenly amazed at what things now cost. How
can marketers cope not just with inflation but with consumer sticker
shock?

1. Understand Your Customers. There are at least four ways in which
customers can respond to higher gas prices: downgrade from premium to
regular; take fewer trips by car, consolidate errands, switch to
public transportation; take the same number of trips but reduce the
miles driven per trip by, for example, vacationing closer to home;
drive more economically and less aggressively to improve miles per
gallon; and buy a specific dollar amount of gas rather than filling up
every time, even though this may mean more visits to the pump. Some
consumers may even trade in (at a loss) the SUV for a hybrid, an
example of how price inflation on one product can cause demand shifts
in a second, related, category.

More customers than usual will be looking out for price
promotions, but don't give away the store to those who don't need the
discount.

2. Invest in Market Research. You must discard your existing customer
segmentation assumptions and segment consumers around product usage
behavior and price sensitivity. You must get out into the marketplace
yourself and talk to consumers directly to understand their pain
points and how they are changing attitudes and behaviors in response
to price inflation. You must then quantify these shifts and develop
product and pricing strategies that balance the need to maintain both
profitability and market share.

3. Redefine Value. Customers buying soft drinks can think about price
in three ways: the absolute cost per can or bottle, the cost per
ounce, and, less common in this category, the monthly consumption
cost. Customers short on cash will focus much more on the absolute
price. They'll go for the 99 cent soft drink rather than the $1.29
container with 50 percent more volume. To motivate cash-poor
consumers, marketers must reverse engineer products and packaging to
hit key retail price points. This may mean downsizing package sizes,
something the candy industry always does in response to inflation.

4. Use Promotions. If you've always passed through raw material price
increases to the end consumer, you don't necessarily need to change
that policy. However, lagging competitors in passing on price
increases can have the same effect as a temporary price promotion.
More customers than usual will be looking out for price promotions,
but don't give away the store to those who don't need the discount,
and cut prices not across the board but only on items selected as your
inflation-busters. For cash poor consumers, these promotions should
hit the key price points on small pack sizes. For cash rich consumers,
encourage multi-unit purchases ahead of the inevitable next price
increase.

Strong brands can hold consumer loyalty while increasing retail
price points.

5. Unbundle. Customers who previously welcomed the convenience of
buying product, options, and services rolled into one may now ask for
a detailed price breakdown. Make it easy for your more price-sensitive
customers to better cherry-pick the options and services that they
truly need by giving them an unbundled menu of options.

6. Monitor Trade Terms. Beware of powerful distributors paying you
more slowly than they turn the inventory they buy from you. In an
inflationary environment, they're making money on the float by
stretching their payables. Manage your inventory on a last-in,
first-out basis to insure that increases in your realized selling
prices do not trail the increases in your input costs.

7. Increase Relevance. You need to persuade customers to cut back
their expenditures on other products, not on yours. In tough times,
consumers more than ever need and deserve the occasional treat. So, if
you are Haagen Dazs, tell the consumer to substitute private label
peas for the name brand but to not forego the comfort of curling up on
the sofa with a tub of her favorite ice cream. Strong brands can hold
consumer loyalty while increasing retail price points. Weaker brands
risk private label and generic substitution.

Clearly, not all marketers are equally affected by price inflation.
Commodities like gasoline, where the manufacturer adds little value
before the product reaches the end consumer, are more vulnerable,
while sales of the most exclusive global luxury brands hold up pretty
well regardless of price. Especially challenged are marketers of goods
and services for which consumers don't necessarily understand the
input costs: decorative candles, for example, are highly sensitive to
oil prices and the purchases are discretionary. The key here is to
educate the consumer, apologize for the uncontrollable price
increases, give price-sensitive consumers some promotional options,
and reemphasize product benefits.