Take a Breath and Think
You deserve it, and your business may require it. By Ben Molenda, Human Capital Advisor, and Todd Downing, Managing Partner at BEST Human Capital & Advisory Group Are you tired of “Work From Home,” “COVID Procedures,” and “New Normal” articles? This one is different. Instead of being advised on how to do something, the goal here is to experience thought. “THINK” is what Thomas Watson Sr., the legendary founder of IBM, would tell his people, encouraging everybody to be thinkers, from the assembly line worker and engineer to the salesperson and office admin. It was what would bind the company together and become the cultural cornerstone of one of the world’s great companies. Despite the immense challenges thrust upon all businesses during the pandemic, the Green Industry has experienced positive, and some would say unprecedented, growth. Other industries have not fared as well and are just starting to recover. The stresses you have responded to in running your business with an uncertain future, proper COVID health protocols, plus the volume of business experienced or lost, have left many leaders feeling reactive. There has been considerably less time to focus on strategy as much as they would like. And – a bit exhausted. The pandemic has also created profound change and impact on the people who make up your organization. Strategic Human Resource planning is a vital component to successfully navigating this business evolution. We are all searching for solutions to protect, stabilize, and grow our businesses. But how do you define solutions when your time and energy have been dramatically stretched? A helpful first step is to identify what the Human Resource challenges or opportunities are that require problem-solving. To support leaders in identifying Human Resource solutions, ask yourself a few of these questions to flesh out potential areas that will require change. You can then begin formulating solutions to address these challenges. WORKFORCE DEVELOPMENT Have you identified specific training or development investments to grow key employees? Are your employees cross-trained if a key individual leaves the team? Does each position have a career progression plan? Have you openly discussed it with the individual? Do you have silos between departments requiring increased collaboration? HIRING What are the current bottlenecks or challenges to your business, and what type of professional would you hire to solve these problems? Is your ongoing hiring process compliant with applicable employment law and producing the desired and necessary results for your organization? Are your HR-related marketing tools and company branding message aligned with the current strategic plan to attract the proper level of talent to drive these organizational directives? Do you have a positive company brand image on social media and sites such as Glassdoor to help attract top talent? TOTAL REWARDS – COMPENSATION & BENEFITS Have you updated or benchmarked your benefits and compensation packages lately? If yes, how frequently do you do so? Do you include perks like profit sharing, continual education, or health initiatives to better invest in your employees? What unique benefits do you offer that are attractive to potential new hires or increase retention? Is your compensation in line with your geographic region, cost of living, and other industries to attract top talent? HUMAN RESOURCE SYSTEMS & SOFTWARE Do you have an organized electronic system for classifying and holding all your employees’ documents? Do you have an up-to-date chain of command to report HR issues? Do you have the appropriate technology and tools to maximize efficiency and effectiveness? (i.e., HRIS, LMS, TS, ERP, and Payroll). Do these systems seamlessly integrate? Are your HR employees adequately trained on them? EMPLOYEE RELATIONS Are your employees truly engaged in the business or simply “punching the clock”? What is your retention rate or turnover rate? What type of leader would your employees communicate that you are? Has an appropriate investigatory process been put in place? Are your HR professionals trained to objectively implement such a process to resolve employee relations issues regardless of their severity or nature? HUMAN RESOURCE COMPLIANCE If your Human Resource policies and practices were audited, would you pass without a fine? Have current policies been recently reviewed and updated to conform to recent legislation, court cases, and executive orders? Especially revised regulations? Are Human Resource audits (internal and external) conducted regularly to ensure compliance with all employment laws? SUCCESSION & EXIT PLANNING When was the last time you took time away from your business as its owner or leader of a division? Are you able to take time away knowing you have a team to keep running the business profitably and efficiently? Do you know what you will do when you retire? Have you mapped internal succession paths, including your own, so you know where to recruit externally and where to develop internally? DIVERSITY Would your organization’s effectiveness benefit from someone with a different background, mindset, viewpoint, or values? Have you hired individuals from various backgrounds and educational backgrounds? Have you properly followed Equal Employment Opportunity Laws? Are you tracking appropriate diversity data regardless of whether you must file an annual report? OPERATIONS & PRODUCTION Are you struggling to achieve complete buy-in to LEAN principles or Health & Safety protocols? Do you have employee retention or engagement problems with your production team? Are current performance metrics or KPIs aligned with job expectations, job descriptions, and organizational outcomes? SALES & MARKETING Do you hire sales professionals based solely on knowing your product and customers, or have you taken time to identify and assess for successful sales or marketing behaviors? Have you worked with your sales, marketing, and production teams to understand and increase collaboration with one another relative to production capacity and sales growth? Are your customer-facing professionals a positive reflection of your company with customers and the industry? NEW PRODUCTS & MARKETS Do you have new products in the pipeline that will require hiring professionals with a unique skill set or knowledge? Have you identified new markets to enter that will require hiring professionals with the targeted industry knowledge? FINANCE
Your Exit Plan: The 3 Inarguable Reasons to Start NOW
What is Your Business Exit Plan? If you’ve ever done a business plan for the purpose of raising capital, one of the key questions is “What is your exit plan?” Many business owners think that question is self-serving, intended merely to let the venture capitalists figure when and how they will get their return on investment. In truth, however, that question is far more important. A business exit plan is a strategic plan with an end date. Putting a time frame on your plan, and defining the goals to be achieved by that date, creates a future-focused mindset for the owner. It controls and reduces your tendency to prioritize daily firefighting over long term thinking. It provides you with a yardstick to measure progress. Most importantly, it affects your thinking about almost everything in your business. Here are the 3 inarguable reasons why you should start your exit plan now. Reason 1: It’s Never Too Soon In my years of working with business owners, I’ve helped many transfer their businesses to family and employees. I’ve worked with others who sold their companies to a third party for tens of millions of dollars. Surveys show that many owners have regrets afterward. Others happily move into the next phase of their lives or careers. A few have seller’s remorse. On the other end of the spectrum, some come to the realization that they hated their business owner lives for years. The majority feel that they received a reasonable reward for monetizing their work of decades. None of them. NOT ONE of them has ever said “I spent too much time planning.” It’s likely that the sale of your business will be the most important financial event of your life. There are a few lucky owners who have wealth outside or beyond the value of their businesses, but for most of us monetizing those decades of effort is the culmination of our working careers. If your exit plan is to transfer to family, you can choose vehicles like Grantor Retained Annuity Trusts (GRAT) or Self Cancelling Installment Notes (SCIN). These may have to be in place for years to substantially reduce or eliminate taxable proceeds for you and/or your heirs. In a sale to employees, developing the documentation that shows their assumption of managerial responsibilities over time is a basic qualification for SBA loan approval. That, plus developing their “down payment” equity, punches the ticket for you to walk away with your proceeds in pocket on the same day that you cede control of the company. In a sale to third parties, the condition of the financial markets at your time of exit will decide the size of your multiple. Preparing your business with due diligence in mind, and understanding the different classes of buyers, allows you to better choose the time, method, and proceeds of your transition. Although it is difficult to time the stock market, shifts in acquisition multiples take much longer to develop. Being prepared allows you to enter the market while prices are at a peak. Five years is reasonable planning time. Ten years is better. There is no time frame that’s “too far out” to be thinking about your exit. Reason 2: It Changes Your Thinking It’s difficult to run a business without being reactive. Employee issues, customer problems, and vendor policies can shift your priorities on a daily basis. When your exit plan is in place, you have a broader perspective. Every decision you make is now in the context of “Does this support my bigger picture?” There are numerous examples. Hiring: If your exit plan is to pass the business on to your children, then hiring becomes a support function. You look for employees who can fill in areas where your offspring lack the necessary skills or don’t have an interest. If you plan to sell to employees, then you are looking for a Successor in Training (SIT). That is someone who shares many characteristics with you. If you are selling to a third party, you want a Second in Command (SIC). That is someone who compliments your strengths, and who can be contractually incented to stay on the job with a new owner. Securing a management team adds considerable value to any company. Lease vs. Buy: If your plan calls for selling to someone who is likely to relocate the company, or who already has your production capabilities, you may want capital equipment to be easily disposable. A competitor or much larger acquirer may want to leave the equipment out of the transaction. In a Main Street business, you may choose to have a strong tangible asset base for an entrepreneurial owner to use when obtaining acquisition financing. Real Estate: Should you own your building? Some buyers (say a publicly-traded acquirer) prefer to lease space. In that case, owning your building could provide a post-transition income stream in your retirement. On the other hand, a relocated company could stick the owner/landlord with a special purpose building that requires significant remodeling to be rentable. These are just a few of the decisions that are better made in the context of your long term plan. The decisions you are making in your business today all have lasting implications. Reason 3: A Plan is not an Action If you are taking a long trip, you likely determine the route before you start out. If it is complex, you may print out the directions. Nonetheless, you are still likely to use a navigation app to alert you to problems along the way, like traffic jams or construction. But everyone understands that printing out the directions isn’t the same as beginning the journey. You might take that step days or even weeks before actually getting into your car. It’s the same with your exit plan. Choosing your time frame and preferred method of transition isn’t the same as making it happen. Writing it down is a key component of preparation, but it shouldn’t be confused with implementation. Starting Your
The Foundation of Everything
Take a step back and look at your company. Do the people seem genuine? Do you feel as though they are making significant progress in reaching the organization’s goals and ambitions? Do you believe in your people, your process, and your mission? How do you foster trust within your company, especially during a crisis like COVID-19? Trust has three foundational components, like a 3-legged stool. Each leg is essential and depends on the others to work together. If one leg breaks, everything collapses. The same goes for trust if one of the components begins to wobble— trust is in jeopardy. The three foundational pillars of trust are authenticity, logic, and empathy. Authenticity “A true leader is one who is humble enough to admit their mistakes.” – John Maxwell Did you ever experience being in a conversation at work and feeling that the person you were talking to was not being completely honest with you? Our human nature can quickly zone in and identify those not being real with us. To avoid a problem with authenticity, BE YOU – ALL THE TIME around EVERYONE – Voice your thoughts and opinions, respectfully. Pay less attention to what you think people want to hear and give more attention to what you need to say. For companies to emerge from this crisis successfully, all ideas need to be explored to reimagine and decide the best strategy. Leaders need to allow the office to be a safe place for everyone to speak when creating a culture of trust. A leader is not expected to know all the answers— welcome comments and ideas. Allowing an environment for fresh perspectives helps build an authentic team and ultimately leads to trust within the organization. Logic “When dealing with people, remember you are not dealing with creatures of logic, but creatures of emotion.” – Dale Carnegie Most problems concerning logic are not about the quality of the logic, but about the ability to communicate the reasoning in a decision-making process. Likely, we all have sat in team meetings where one person dominates the time by taking us on a long journey through their experience and often is interrupted and never makes a definitive point. Many people like to tell a long story before getting to the point. To communicate logic clearly, start with your point in a crisp, clear sentence and then make your supporting statements. This approach allows for greater clarity and prevents you from being interrupted before making the critical point you needed to make. If everyone in an organization has clarity on the decisions, real progress can be made, and trust becomes foundational. Empathy “Empathy is simply listening, holding space, withholding judgment, emotionally connecting, and communicating that incredibly healing message of you’re not alone.” – Brené Brown Would your employees say that management is listening to them? Not just hear them, but attentively LISTEN. The best listeners provide eye contact and lean forward in the conversation with no distractions (put away the cell phone). Listening is critical for building empathy. For most companies, this is the leg that “wobbles” due to demanding schedules. However, during a pandemic, this is a critical time to listen. Each of us is experiencing this crisis differently. We are all facing unique circumstances and challenges. Listening to your team to better understand them and their situation fosters a healthier relationship to build trust. Trust is the foundation of everything we do. It can be earned and built. It can also wither and break. If a company develops and operates in a culture of trust and transparency among all stakeholders, it can make unprecedented progress in reaching its goals. With a foundation and culture of trust, companies experience better productivity, enhanced morale, lower staff turnover, ability to handle challenges, willingness to take risks, enhanced creativity, optimism, teamwork, higher client satisfaction, better company reputation, and higher profitability. Be real, start with your point, and know you are not alone. It works, trust us. Does your organization want to learn more about building a culture of trust that can help you to unprecedented growth? You’re not alone, and we are here to help. SOURCES: Unleashed: The Unapologetic Leader’s Guide to Empowering Everyone Around You, By Frances Frei and Anne Morriss (Authors) The Five Dysfunctions of a Team, By Patrick Lencioni (Author) The 21 Irrefutable Laws of Leadership, By John C. Maxwell (Author)
Your People and Planning for the Reset
There is an old African proverb called The Fable of the Lion and the Gazelle. To survive every day, the lion must catch the slowest gazelle. For the gazelle to survive, it must outrun the fastest lion. The message for both, “When the sun comes up, you’d better be running.” Regardless of industry and how positively or negatively positioned a company has been through the COVID-19 crisis, we face a new post-pandemic business normal to varying degrees. We defer to healthcare experts and government leaders as to timing, but as a business leader, you should be planning now for a successful restart of your company when the sun finally comes up. According to a recent article from McKinsey & Company, there are “five horizons” or 5 R’s that leaders and companies need to think about and act upon during this time and beyond: Resolve, Resilience, Return, Reimagination, and Reform. We are going through the Resolve and Resilience stages now (cutting costs, monitoring cash flow, retaining or transitioning employees, preparing to return, and planning to normalize operations). All of us have been inundated with content regarding the current situation. However, what about this new post-pandemic period applies to your people? As business leaders, our task is now to manage an efficient restart, a comeback in stages, and begin running toward a better future. The way to make that happen is to focus on your workforce through planning, communications, and deciding whom to bring back and when since it is your people who will determine the outcome. Planning for the Return In a recent survey by Fishbowl, 80% of workers across the country do not feel safe going back to work if their state were to reopen immediately. While the data varies by area, these are startling numbers that point out that there are still many unknowns relating to widespread testing and a vaccine. Regardless of the size of your company, you could also face litigation if any employment laws are broken. What is an employer to do? Returning after such an abrupt forced shutdown will be challenging, especially with a fearful and reluctant workforce. To overcome these hurdles, three areas of planning will be crucial: business and operational considerations, communications and timeline, and then a plan to return to the workplace. BUSINESS & OPERATIONAL CONSIDERATIONS Refer to plans that you may already have in place, such as your original business plan or strategic planning you may have engaged in before the pandemic to serve as a guide. Working with an HR consultant may help in developing Disaster Recovery and Infectious Disease Control Plans, as well as a plan for normalizing operations. Review your financials, develop a 13-week cash flow forecast, and determine your priorities by function and location. You may have previously had an annual 1-3-5 year plan for your business. Now, focus on a 30-60-90 day plan. If your HR Team has been working remotely, they will need to be one of the first back to the office to assist in staging the return of your workforce and ensuring compliance. COMMUNICATION & TIMELINE PLANNING Perhaps noted author, John Maxwell, put it best during a recent webinar addressing leadership during COVID-19: “The best thing we can do right now is not to do business, but just do relationships.” As a leader, continue to stay in touch with your people and keep them focused during this trying time. Communicating the return should be positive, but also respectful. In this phase, determine a timeline for bringing back teams in order of priority. Build a communication plan for employees returning onsite denoting the reasons why, work schedules, expectations, safety measures, and explore options for continued remote work if possible. While portions of your workforce may already be remote, or able to WFH, it will also be essential to address furloughed and laid-off employees. Each is a different category that requires a separate communication plan. Furloughed employees will be more accessible, as they never left your system. Laid-off employees you choose to bring back will have to be rehired, onboarded, and put back into your system. This period is also an excellent opportunity to top-grade your talent (more to follow). RETURN TO THE WORKPLACE & DAILY OPERATIONS Do you have the staffing to handle the process and administrative functions in your operation? This phase is where you can get detailed in terms of how your people will enter and exit the facility, temperature or other testing procedures (many mobile temperature check methods are available), having suitable PPE on hand, signs for social distancing, personal hygiene, and practices for overall facility cleanliness and sanitation. All are to reduce fear and meet new OSHA, CDC, and state requirements. Prior training and instruction on these new procedures will be crucial as your employees return. Reimagining the Future: Topgrading Your People The COVID-19 crisis will reveal problem areas in your business, but also opportunities to improve. Perhaps the most critical ingredient to a company’s success in this new era will be the people we surround ourselves with as we embark on this journey. Consequently, we have been provided a painful yet unique opportunity to improve the quality of talent driving our business forward. The wife of one of our BEST Stakeholders manages a retail store in a local mall. She had the unfortunate task of laying off her people during the shutdown, but she has kept in touch with her team and intends to bring most of them back when they reopen. However, there is one who will not be invited back due to poor performance and bad behavior. For others, she will promote and increase their hours when they reopen. She has been topgrading her people. Topgrading talent is an interviewing philosophy that seeks out the highest quality workforce by ensuring that acquisition and development focus on the most talented, well-rounded performers, as well as those with a cultural fit. Click here for a useful article on how to “Topgrade your people for post-pandemic success.” While this challenging time may appear to be an
The Rise of the Remote Workforce: Benefits, Behaviors and Best Practices
Once the domain of traveling sales and service people, this space is rapidly changing. In the last (5) years alone, remote work, or allowing professionals to work from home or outside the traditional office, has increased by 44% and shows no signs of slowing, especially in light of recent events. Currently, the number of remote workers is rising out of necessity, whether it be temporary or permanent decisions by companies to support a virtual workforce. With technology allowing us to take our lives with us anywhere we go, more people are requesting flexible working spaces. There are many reasons why remote working is increasing in popularity with both business leaders and their pool of labor. Not every company wants to allow employees to work from home. However, there are benefits of having a remote workforce. Not every person should work from home, thus, we will review the personal behaviors that best apply to this style of work and best practices for being a remote workforce manager and an efficient employee. The Benefits There are (4) key benefits to having a remote workforce: talent pool, cost reduction, happier work life, and health. Your talent pool becomes limitless. Hiring the right person comes with many challenges. The company needs to find a person with the right background, customer knowledge, behaviors, and nearby. By limiting the talent pool to around a 25-mile radius (about a 45-minute commute) a company is missing out on top talent. With remote workers, the world now becomes your talent pool. It saves the company and employees money. According to a ConnectSolutions survey, the average remote worker saves a company approximately $4,600 per year. Fuel, car maintenance, commuting time, parking, childcare, lunches are top employee considerations, and this is a good chunk of change most people would like to keep in their wallets. Having remote workers also reduces the amount of money the company has to spend on computers, phones, utilities, office supplies, and on real estate and office leases. A happier work-life balance leads to employee retention. According to Global Workplace Analytics, 72% of employers say remote work has a high impact on employee retention, and 90% of employees feel flexible work arrangements increase employee morale. It is no wonder then that 45% of remote workers have been in the same position for (5) years or more. Remote Workers are healthy. Even before many schools, companies, and even whole countries were put on lockdown in an attempt to stop the spread of COVID-19, research showed that remote workers on average take fewer sick days and can stay productive longer. It has become a lifestyle, with many companies such as Google, Microsoft, and Amazon encouraging work from home– as well as many others who are less tech-centered. Plus, in this new age of social distancing, it is much less likely that an employee will come in contact with any germs around the office. The Behaviors While remote work provides many benefits, both to the company and the employee, it doesn’t mean everyone in your company is ready for this lifestyle. On the contrary, this new work arrangement takes a person with a particular set of skills and behaviors. As we conduct candidate interviews for remote positions, we assess the following behaviors that make for a successful and productive remote worker. These are: Strong Connector and Communicator Enjoys sharing expertise and ideas proactively with other professionals. Prefers and enjoys team projects. Proactively taps into all available knowledge and support resources. A Go-Getter Confident and self-assured. Seeks independence and enjoys due recognition. Driven to high levels of accomplishment. Passionate High stamina and endurance— one who doesn’t count hours on the job. Maintains focus during work activities. Active hobbies and involvement. Integrity Honesty and integrity are hallmarks of how they conduct themselves in all they do. Refuses to cut corners or over-promise. Represents their company judiciously. Astute Skilled in self-appraisal. Quickly sorts the critical from the superfluous in prioritizing – street smart! Acts appropriately— is tactful and knows what NOT to say. The Best Practices As with any mode of work, there are managerial and work practices that lead to success. We have identified six key best practices for remote work: Communicate early and often. Because an employee is not working in the office, communication is one of the essential tools they can use. In a traditional office setting, it is easy to talk to an associate in person if questions or concerns arise. Efficient telecommunicators understand the importance of this trait and use it to work effectively with the rest of the team. Be proactive in your communication with your coworkers and clients. Managers also need to communicate effectively with daily calls or video chats. Daily routine and consistency are a big part of working from home. When working in a traditional office setting, this routine could consist of waking up around the same time each day, taking a shower, making coffee, and commuting to the office. A person who is taken out of the office should still try to do these same things each morning and to keep their regular office hours. This will set the tone for the day. Instead of feeling like you are just staying home, it will make it feel like you are getting ready for work. Managers should also set up routines and consistent check-ins (phone or video) with their remote teams. Set schedule and prioritize. Remote work provides more flexibility but has the potential for a lot less structure. Set a plan of action to make sure that time is productive. When working from home, utilize company calendars to stay updated on office events and meetings. Keep to your regular work schedule hours and agenda while holding yourself accountable to these, as your manager would. Create a separate workspace free from distraction. It is almost impossible to produce high-quality while household distractions abound. TV, walking the dog, and the laundry can wait until after work. Create a separate office area or room, similar to if you were working in an