How to Win the War for Talent

In spite of the seemingly-poor economy, small business employers tell us that good people are unavailable. Numerous surveys confirm that CEOs and presidents are struggling to hire the best employees, retain talented staff, replace aging skilled workers, and let go of people not performing as expected.

Mary Lynn Fayoumi, President & CEO of The Management Association of Illinois, confirms that the labor shortage faced by small businesses will intensify. “Once upon a time,” she remarked, “people were happy to just have a job. Now, there is a ‘war for talent’ and small business owners need to know how to win.”

Ms. Fayoumi told a diverse group of small business presidents, CEOs, and owners that retention and recruitment efforts need to be more sophisticated. Thanks to technology, it is easy for employees to look for other opportunities “with your equipment, on your time, and on your dime.” Companies need to be aware of what drives talented staff away. It is not merely compensation but the entire work experience. She says that it is the simple things that cause dissatisfaction. “Employees may join a company, but they usually leave a supervisor.”

The statement that business presidents and CEOs must win the war for talent “may seem more banal than profound,” writes human resources expert Dennis Zeleny. He says that relatively few business leaders grasp the importance of treating this issue as strategically critical. Even more troubling, he says, is that even if presidents and CEOs are “waking up, recognition doesn’t guarantee success in the competition for the best people.”

What should a business owner do?

• Look at your business objectives. Select the talent specifically for the needs you have. Are you formulating the right job descriptions?
• Look inside your company. Describe your culture in one word and then have your staff do the same. If they are not the same, and they won’t be, why are there differences? Are you searching for candidates that fit the culture you want or the culture you have?
• Look at your employees’ supervisors. Are you providing them with the training and tools necessary to keep the best talent?
• Look at your development programs. Are you helping your people learn and grow? By the way, this is an important retention strategy that does not have to involve promotions.
  
  

Energy Independence In Our Time?

I'm a Baby Boomer who well remembers the oil embargos of the 1970's. Back then, it made no sense to me that we were so dependent on other countries for a basic natural resource that is a necessary raw material for our ecomony. Since then, I've believed that it is the biggest failure of my generation to not have figured this out.

I heard a compelling interview yesterday morning on CNBC (www.cnbc.com) with Boone Pickens http://www.boonepickens.com/. Mr. Pickens said that we spend $500 billion annually on imported oil. Over a ten year span, that means $5 trillion will leave our country. This is a compelling reason to demand that the Presidential candidates articulate their visions for an energy-independent USA. Now, over 30 years later, we also know that there's a compelling environmental reason to get off our oil addiction.

I hope you will think about this major public policy issue. At least one of these three themes must certainly resonate with you:

1. Economics: What does it mean to send a half-trillion of our dollars every year to foreign oil sources? Most of these sources are government-owned national oil companies, some of which are our enemies.

2. Geo-politics: Our interests and prestige are compromised on a regular basis by the complications created by our dependence on foreign oil.

3. Environment: Most agree that global warming is caused, at least in part, by mankind's carbon emissions. If you believe this, getting off of imported oil is the single most effective thing we can do to help reverse the trend in global warming.

Despite this serious reality, I am a firm believer that innovation and free enterprise will solve this issue. But, we need those who develop public policy to make this a priority. Keep this in mind as you decide who to vote for this November.

Can Green Business Practices Pay Off?

I recently spent a morning with Phil Baugh, a Chicago real estate developer whose latest project is the Green Exchange, a unique business center and professional community.

The Green Exchange is aimed at entrepreneurs looking to grow sustainable businesses –companies that promote sustainable products and services or support those that do.

Inspired by the green movement, a business is considered sustainable if it “has adapted its practices for the use of renewable resources and holds itself accountable for the environmental and human rights impacts of its activities.” This is the UN Development Programme’s definition.

It may be easier to use Phil’s shorthand: the Green Exchange exemplifies the triple bottom line of People, Planet, and Profit. Companies following the triple bottom line mantra are the target tenants for the Green Exchange.

The Green Exchange is a refurbished 270,000 square foot factory in an old industrial sector of Chicago. Its “green design” is built to Leadership in Energy and Environmental Design (LEED) Platinum certification standards. To earn this rating, Phil’s facility will be evaluated against six criteria:

1. Sustainable Site: erosion control, minimal site disturbance, high density area, alternative transportation
2. Water Efficiency: effective waste water and water use techniques
3. Energy and Atmosphere: energy performance, ozone protection
4. Materials and Resources: waste management, reduced toxic materials, recycling
5. Indoor Environmental Quality: outside air delivery, indoor chemical and pollutant control, thermal comfort, “daylighting”, “green cleaning”
6. Innovation and Design Process: basically, other ideas and practices that contribute to positive environmental outcomes

I asked Phil about the benefits to a small business of locating to such a building. Fundamentally, Phil said, it is about improved productivity, increased employee retention, decreased costs, and increased sales. Here are some facts he shared with me:

• A Harvard Business Review article said employee productivity can increase by as much as 15%.
• PNC Financial reports that employee retention and satisfaction was 50% better in its green facility compared to a traditional building.
• Toyota’s customer service unit moved to a LEED-certified facility and saw absenteeism fall by 14%.
• Genzyme’s 12-story, 350,000 square foot headquarters building uses 42% less energy and 34% less water than a like-sized standard building.
• "Green” retail space can boost sales by 40% while bringing down overall energy costs.

What is my bottom line? Well, as far as design principles go, LEED certification criteria make a lot of sense. It is easy to see the benefits to customers, staff, and financials. And green marketing is certainly popular and presumably effective. I guess the test for me is whether the Green Exchange is a marketing gimmick or a truly unique business community. I am rooting for the latter.

What do you think?

Craig

The Leader's Passion

Yesterday, I had the good fortune of spending a couple of hours with Dan Hayes, President of HealthCall (http://www.healthcall.com/), a first-stage company that is revolutionizing how information is exchanged between healthcare professionals and the chronically ill. During our time together, Dan spoke very little about the economic benefit of his service to his customers, and he said nothing about the value potential of his company's stock to his next group of investors. All Dan wanted to talk about was how his system helps the chronically ill.

Dan's passion is typical of entrepreneurs. In fact, the Leader's Passion is often a company's major asset. Steve McGue is the President of the Shamrock Companies and a PAC Emeritus member. Steve talks about how he admires FedEx (http://www.fedex.com/). "Absolutely, positively overnight" says it all to Steve about the FedEx culture, and, in fact, the history of FedEx is full of stories about employees who felt empowered to take extraordinary steps to fulfill this simple, three-word Mission.

Too many times, when we hear about Vision Statements, Mission Statements, and Value Statements, our thoughts turn to wood plaques on reception area walls. Too often, these statements reflect superficial platitudes. After all, who can argue with "first class customer service" or "honesty?"

If you are a business leader, you have a passion for what you do, and you owe it to yourself and your stakeholders to articulate it. If you want another perspective on this, pick up a copy of "Lincoln on Leadership," a 15-year-old book that is an easy read, yet it clearly talks about timeless and powerful ideas for the business leader in the context of one of history's great leaders. http://www.navyreading.navy.mil/Covers/Lincoln%20on%20Leadership.htm

Put your passion into words. Call it whatever you want. Since your actions are a result of your passion, everything you do and say will reinforce it. The Leader's Passion will become the touchstone for your company and everyone who comes in contact with it.

Nick

Use Your Value Proposition to Align Your Business

We hear all the time from small business presidents and owners who are frustrated by the inability of their companies to deliver. On a bad day, customers are dissatisfied, prospects balk at committing to business, execution is sloppy, and employees are unhappy.

Sometimes this is because the Cubs blew the playoffs – again.

But most times, the problem is that your business processes are not aligned with your business goals, and neither is aligned with your customers’ wants. In short, instead of a seamless profit machine, you have a dysfunctional business.

How can you figure out if that is the case at your company? And if it is, how can you fix it?

A helpful tool is the Value Proposition, a description of your business in terms of value received by customers:

• Your target customers
• Benefits they receive
• What you charge (the difference = value received)

The challenge is specificity: for example, stating that you deliver “high quality” benefits is insufficient to help all parts of your company, plus your suppliers and partners, pull together. Instead, the Benefits must be understandable and measurable to guide actions and resolve conflicts within your extended organization.

Here are a few familiar examples of Value Propositions:

Perdue (http://www.perdue.com/) sells chicken to quality-conscious consumers who value tenderness and low fat, for a 10% premium compared to competitors.

Volvo (http://www.volvo.com/) builds station wagons for safety-conscious upscale families who seek durability and safety, for a 20% premium.

Weyerhaeuser (http://www.weyerhaeuser.com/) manufactures particle board for furniture makers whose customers want a smooth appearance, which eliminates their need to laminate the material while providing a smoother final surface appearance, for a 35% premium.

You can use your Value Proposition in several ways.

• Measuring stick – are you doing what you say?
• Motivational tool – keep your employees aligned with the customer and focused on his prize.
• Planning and evaluation tool – stop doing things you shouldn’t and do more of what you should. In other words, if a piece of your operation doesn’t help you deliver your Value Proposition, fix it.

In short, your management task is to make sure everyone in your company and their counterparts with your vendors, suppliers, and channel partners know what your Value Proposition is, understand it, and use it to guide their everyday decision making.

-- Craig Elderkin

You talkin' to me?

Over the last 30 days, I've had the pleasure of attending 3 events that highlighted terrific new entrepreneurial companies or technologies that might result in terrific entrepreneurial companies. I was a judge at Northwestern University's Applied Research Day, a poster competition that featured University research with commercial potential. Last week, I attended the University of Chicago's Alternative Energy Forum, where I heard 14 companies seeking capital present themselves to an audience of over 100. Finally, last Wednesday, we had our own PAC Cum Laude Forum, where 3 budding companies presented their exciting business propositions to a group of investors.

The commonality of the presenters at all 3 events struck me and reinforced a common trait I see in most businesses. That is, they, and we, are all fluent in articulating the technical benefits of what we do, but they, and we, do not speak to our audience. In the case of the presenters at these 3 events, they all knew that the audience was a group of people with capital, or access to capital, who could invest in their new ventures. Unfortunately, almost without exception, the presentations were full of technical detail and spoke little to what the audience wanted to hear, which was the economic potential of the technology in the marketplace.

While graduate students and researchers can be excused for not thinking about the customer, we who run businesses cannot. How we communicate with our customers is critical to our topline success. Too often, we talk about the benefits of our product without considering the needs of our customer. At our PAC Cum Laude Forum last week, my colleague, Craig Elderkin, recommended the book "Strategic Selling" by Miller and Heiman (http://www.millerheiman.com/) . This nearly 20-year-old book has become a sales classic, and I highly recommend it. In it, you will learn, or be reminded of, the different types of buyers that influence the sales process, such as the Technical Buyer and the Economic Buyer.

Ron Crabtree (http://www.metaops.com/) is an adjunct professor at Villanova University, and he has developed useful tools to help the small business articulate the Voice of the Customer. Ron has spoken to our groups a number of times, and our members always benefit from hearing Ron speak on the topic.

Time and time again, I see business people design their sales and marketing messages around the question "What do I want?" The successful companies design their messages around "What does the customer want?" If you don't know what your customer wants, it's time you stopped and devoted some time and resources to figuring that out. The effort will yield a great return.

Happy holidays.

Nick

Welcome, Champion of Human Advancement!

Innovation drives human achievement. From the wheel to the internal combustion engine to the fuel-cell, from the vacuum tube to the transistor to the microprocessor, and from the Magna Carta to the Bill of Rights, any advancement you can think of started with a creative thought or idea.

Innovation thrives-indeed, it flourishes-in a free society, and, in a free society, the champion of innovation is the entrepreneur. If you've found your way to this blog, you likely have an entrepreneurial streak in you. Maybe you have nothing more than an idea, or maybe you lead a company with hundreds of employees. Wherever you are on the entrepreneurial spectrum, you are a Champion of Human Advancement.

I've been "accused" of being a serial entrepreneur, and I know that one of the many risks we face is a non-financial one. It is the risk of isolation. We are energetic, creative, dedicated, and self-sufficient. No one can do it like we can. Ah, but there's the rub. In fact, we don't know everything, and we need to step out on a regular basis and get fresh perspectives.

I hope you will return to this blog regularly to learn about resources that are available to the entrepreneur, the Champion of Human Advancement. PAC Leaders from around the country will be posting here on a regular basis to offer resources and direction to help you fulfill the dream you have for your business.

One such resource is The Entrepreneurship Institute (TEI). http://www.tei.net/ TEI is a non-profit organization based in Columbus, Ohio that produces events for entrepreneurs all across the U.S. TEI's website has a free library of presentations that have been given by outstanding business leaders throughout the country and over several years. Go to the "Hear About It" tab, and I'm sure you will find a presentation that can offer you an inspiring new insight.

If you prefer reading to listening, give the Edward Lowe Foundation a try. http://www.lowe.org/ Edward Lowe was the inventor of kitty litter, and he left most of his fortune to his Foundation, the mission of which is to champion the entrepreneurial spirit. You will find the Lowe Resource Center to be full of articles that are sortable by topic and might represent "out of the box" thinking for you.

This is the time of year when many of us think about long-term goals. If you sometimes find yourself isolated in business, make a commitment to yourself to carve out some time in that jam-packed calendar of yours to "step outside the box" and seek a new perspective on things. You'll be glad you did.

Nick Arvis