As managers or entrepreneurs we know that the right people are critical to the success of the organisation. There is no room for drift wood or coasters in a growing SME.
Selecting the right people to be on the bus is key, but then how do we keep them motivated? Or should we even try?
In the past two weeks of delivering leadership workshops, many managers have stated the importance of keeping employees engaged and motivated. Some have received half-year employee satisfaction survey results and are grappling with selecting the right actions to move forward. Others run on a constant treadmill in their minds of how to drive teams to deliver results while keeping their employees happy. When asked if this is a new pressure point, many who had been in the region for years described it as an evolving issue. So what has changed?
First, companies are more cautious with salary increases, bonuses and incentives. Some are still dealing with the consequences of paying the inflated salaries during 2006-2008 and have had to freeze their payrolls over the last few years.
Second, the labour legislation is becoming more flexible, allowing more individuals to switch companies with ease. Personally, I believe this is great news as it forces companies to start becoming a place where people want to work, rather than the only place in which they are allowed to work.
Third, many employees are still living in the boom years mentally; they have high expectations and an ‘entitlement' mentality. They may also have overstretched themselves; UAE statistics show that 85 per cent of the population is in debt.
So how can managers keep their team motivated with all of these factors in play? They can't. In fact, they shouldn't even try. It is an employee's job to come to work motivated. It is the manager's job to stop demotivating them. Sounds simple, but what does it mean in practice? Why do people have inflated expectations about bonuses, salaries or entitlements?
Typically, these have been created by the management, either through inflated conversations that over promise but remain vague enough to enable employers to wriggle out of commitments when deadlines approach. Or by glossing over an individual's poor to average performance, rating them as good in the appraisal review because the manager doesn't want to hurt their feelings. This causes problems when money has to be distributed. Remuneration becomes a reflection of actual performance rather than manager-employee discussions, and that can leave employees confused. Managers promise to review packages, but blame more senior management for not taking any action.
Read the full article on Gulfnews.com
In previous columns, I've explored three of the most important decisions that an small- and medium-sized enterprises (SME) needs to make — decisions around people, strategy and execution. The fourth is perhaps the most critical as it can mean its life or death. Many people refer to it as the oxygen for a business, but is more commonly known as cashflow. The golden days of the UAE boom were an exciting time for most businesses
Unfortunately, many SMEs fell into the trap of getting overly excited about growth without watching out for profitable growth. Draw a triangle in your mind with the words ‘growth' and ‘profitability' on either of the apex sides and ‘liquidity' along the bottom. Without any one of these key elements the other two sides collapse. It takes profitability to create liquidity (your foundation). Once you build this foundation it allows you to grow. If this growth is profitable, it provides more liquidity which fuels more growth.
This is why it is so important to not only grow, but to grow profitably. The key question SMEs need to ask is how can we increase cashflow without more outside financing? The starting point is to review the cash conversion cycle (CCC).
A great article on this is by Neil Churchill and John Mullins called "How fast can your company afford to grow"? It is available from the Harvard Business Review website
Good cash model
Although every company is different, each can work on improving the time it takes within each of these cycles, ultimately ensuring cashflow is faster. Two other tools that are particularly useful for SMEs, especially if cashflow is tight, are break even analysis (BEA) and acceptable level of profit (ALP). The first is about knowing your quarterly, monthly or weekly breakeven point in revenue. Finally, the ALP. Although we know our breakeven point, we are not in business to just breakeven. We need to have a clear ALP target.
- Hazel Jackson, CEO of biz-group - Special to Gulf News
Read the full story "The Oxygen for Small Businesses" on Gulfnews.com
A lot of people have come a long way because of their good looks. Talk about beauty queens, actors and some politicians. Even in the corporate world, many people would argue, those who have the looks tend to get ahead faster than the plain-looking folks. Industry experts interviewed by Gulf News said there is indeed a premium on good looks in the job sector, but physical appearance is not the ultimate ticket to success. Competence, hard work, skills, dedication, and a lot more than just a pretty face remain the key driving factors.
Hazel Jackson, CEO of biz-group, said that while appearance can be an asset, what is important is how a person functions with the team.
"Looking the part can perhaps help a CEO to connect with his or her role team initially. But that is really just a first impression and will quickly be replaced by performance." "When reviewing photographs of CEOs, it is important to consider the nature of the industry a CEO is operating in. What may be an appropriate look for a CEO of a bank is not the same for the CEO of an advertising agency. Fifty-five per cent of all communication is about body language, so people who have reviewed photographs would have made assumptions based on first impressions only," she added.
Acquire the killer traits to succeed
The CEO role may not be for everyone, but if you aspire to become one, you need to possess certain traits that most successful leaders share in order to succeed. Hazel Jackson of biz-group said CEOs are often expected to be bold, outspoken and dynamic to have presence. Jackson cited research done by Liz Wiseman, author of the book Multipliers: How the Best Leaders Make Everyone Smarter that said that CEOs who know when to be quiet and reserved have better impact and presence.
"CEOs need to be intellectually curious to get the most intelligence out of their team. At times, they need to switch from answer into question mode and challenge the team members to deliver stretch results… Wiseman found that organisations use only 48 per cent of the intelligence of their team members," she said.
"I think a CEO who learns how to be a multiplier and accesses the latent talent sitting within their teams will be aiming for success, regardless of his or her appearance."
Source: Gulfnews.com - Business | Your Money | Careers
Most entrepreneurs will admit to struggling with discipline, routine and providing the evidence to justify their decisions. Why are measures needed when they already know instinctively what is happening in the business? The KPIs, KRAs and balanced scorecards — aren't these reserved for the big corporate entities which have the people and resources to track everything? Or perhaps manufacturing businesses or those driven by quality standards? Should all SMEs really spend time on measures beyond the basic financial reports?
It took 13 years for me to become a measurement nut in my business and — once hooked — there was no looking back. You literally can't manage people or a business effectively if you can't measure them. Most of the metrics used in business are lagging measures.
That means by the time you are looking at the measure, the possibility of it having an impact has already passed. They typically include the financial reports that we perhaps get seven to ten days into the next month for the previous one. They tell us where we succeeded and perhaps where we didn't, but they are history. They can be used to build up a pattern of results or a trend, but that will take time. It takes six data points to see a trend, so if you are only looking at your monthly financials, you'll take six months to really see a significant trend. There are all sorts of ratios and comparisons that you can use to make your monthly financials more meaningful. But they still aren't enough.
You need to establish some leading indicators of performance, something that gives you advance warning and something that you can impact. A great leading metric is the value of your sales pipeline (value of pending proposals) or the number of incoming enquiries or leads that you are receiving. Both will show a trend but also drive the potential for future business.
Another great measure in a business is a profit/x metric. Profit per square metre and profit per person provide an SME business with great insights on managing growth. Finally, find a critical number that you can manage daily. Something that you can easily record, track and report on, and one that gives you a crystal clear ‘snapshot' of how the business is doing.
The other side is to discover measures for each member in your team. This is where many companies over-complicate solutions and actually discourage employees. If you are being held accountable for a measure that you don't have total control over, it is easy to get disillusioned. Many large and small companies have mastered the art of collecting data for company and individual measures, but then don't spend the right amount of time analysing or challenging results.
A powerful leadership behaviour to use with metrics is the "daily cringe". Ideal if you have a team driving towards a tough target that they can personally influence. What should you be measuring in your business? Start by asking what is not working and then find measures to give you insights as to why not.
Source: Gulf News - Business | Economy