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Archive for the ‘Finance’ Category

I watch for certain indicators that the economy is turning around.  The lines are longer at Starbucks.  Customer service is getting worse in retail stores (a reverse indicator.  When they were more desperate for our business, they were nicer). 

Organizational folklore says that one of the first things cut in a downturn is training.  One of the harbingers of spring is, therefore, the return of training.  Here it comes…read this in today’s Wall Street Journal.

I will also check the overall rates of industrial accidents and worker’s compensation claims – with cuts in safety training, combined with longer work hours for the work crew that remains, I’ll bet we’re seeing more injuries.  I’ll let you know.

A classic workplace safety moment. Not my photo, but oh my...

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Common sense is, well, uncommon these days.  I just read a new survey that showed where we could save $2 trillion in health care $$$ in 10 years by doing some simple things with our drugs…you can read the report on the survey here.

Granted, the survey was done by Express Scripts, who clearly have a dog in the fight, but I thought the main points were valid.  

They found the basic human habits of  forgetfulness, procrastination and how we take our medications has an annual tab at $163 billion. With conservative estimates for inflation, this waste would total more than $2 trillion when projected over 10 years.  That alone would more than pay for health insurance reform.  This is good.

The authors  propose some basic approaches in dealing with these behaviors, with the  common thread that they preserve individual choice as they trigger significant improvements in behavior. I’m big on that, and like approaches that are voluntary at the patient level, yet drive decisions that are more cost-effective.

Working with my friends in the CFO community, it is clear that we have to do anything possible for common sense health care reform…our economic competitiveness as a capitalistic economy depends on it.  personally, I have several medications I take, and have been able to make it a habit.  A good habit.

On a secondary note, I am wearing a nifty pedometer and am involved in our company’s health improvement and wellness challenge.  The doc says that if I drop 20 pounds, I can probably cut back on some of my medications.  I’ll keep you posted.  My short term goal?  7000 steps a day.  Yesterday?  4000.  Grr.

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Wow.   Pay for performance policy?  Restricting the pay of big shots?  Is there an Easter Bunny?

In the 2 years I worked inside a nation compensation and benefits consulting firm, I never thought that compensation policy was interesting.  Right up there with watching paint dry.  I thought that accountants with big brains set some secret algorithm and the magic box would just whir and paychecks would emerge.  At least that was my impression.

Now, compensation is big.  Really big.

It all comes down to $$$

It all comes down to $$$

Proof came in several forms.  Over the weekend, did you see the protests at the Chicago American Bankers Association conference?  If not, check out the link here.  Democracy can be messy, but it works, mostly.

On the Washington front, pundits are saying that one of the biggest things that Obama has done so far is step in and cap the compensation of the larger TARP-related banks.  But it isn’t simple.  One critic of the plan said the news of the decision may undermine a program that Obama traveled to Landover, Md., to announce on the same day. Obama went to the headquarters of a small company to tout his proposal to let small banks into the TARP program, as a part of the effort to get small business lending going again.

Camden Fine, president of the Independent Community Bankers of America who attended the event with Obama, says the pay master’s decision could doom the idea, as community bankers will be loath to take TARP funds if they think Feinberg will set their pay.

Want a good article on the subject?  Here tiz.

So, what does this mean?  It means that awareness about what people are paid for the work that they do is back on the front burner, and that is probably a good thing.  It also means that compensation theory experts are going to have their moment in the sun.  Whee.

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Sip your coffee and look out the window, if you have one.  The sun that just came up is shining on a “New Normal” world.  The Dow Jones is up, the economists are squawking that the recession is starting to pass, and I’m still cranky.

I took this on Main Street in Carmel...

I took this on Main Street in Carmel...

What if the recession passes but everyone who is out of work stays that way?  I am being asked to help write a lot of resumes these days for “a friend of a friend” and I’m getting a window into a tough job market.  My gut tells me that the rehiring that is starting to happen is not going to re-hire many of the folks that are out, and the expansion that is underway is going to find lots of “Lean” ways to stay at “lean levels”.  Productivity is up and will stay up, and new growth may come from an outsourced workforce.

I just read a good bog post on the subject – here is the link

A lot of the stimulus $$$ went to pay the bills for the unsustainable world we were living in.  Now that we’re re-set at 80% of our former economy, we have to get used to a lower standard of living…and along with that comes a lower employment level.

What to do?  Simply put, now is the time for HR to play a big role in the design and operation of the new organization.  Now is the decade of HR – the folks in finance need low risk and high return, operation needs flexibility and creativity, and the workplace needs leadership.

Now is the time for HR to step up with new tools to be a competitive advantage.  Start using new methods, and leave the ones that got us here in the closet.

Because the sun just came up in a “New Normal” world.  Happy Tuesday.

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One Million words in English.  That is, One Million words avaialble to those who speak English.  The most of any language.

This week as I spoke at the Nebraska State SHRM conference, this was hammered home.  I was there to help explain the gap between CFOs and HR.  The overflow crowd came to hear some strategies for getting things done.  I started by defining the world of the CFO, and we outlined the reasons that CFOs don’t trust us.

They don’t like HR’s metrics.

They don’t understand our terms of engagement

They don’t value our contribution.  More exactly, they don’t feel that we can add value in any particular 90 day period.

We worked on a few key terms.  Accountability.  EBITDA.

You see?  Another language.

Using the new ideas, we then worked on developing a more robust turnover cost calculator.  We also agreed that we needed better language.

Question – anyone care to share te language they use to get on the same page as their CFOs?

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Got the computer working.  Sorry about the gap.  Back to some tidbits from David Kotter’s session.

Overall, this was the best general session of the conference because it came down from 35,000 feet and actually gave tactical advice that I could use.

Kotter also did some very basic, useful things from a media standpoint.  He did not use powerpoint, he used a sketch pad, a sharpie, and had the image put up on a screen.  Kind of a high tech overhead projector.  I have seen professors doing this in college, and Edward DeBono did it in a presentation that I saw.  I like it from an adult learning perspective.

He also illustrated one of his basic points – that people are very creative if the environment is right – with videos of first person interviews.  The one that had a sewer cleaner narrating how he had personalized his truck and equipment was a refreshing reminder of the creative spirit of the American worker.

Overhead projector with a modern touch

Overhead projector with a modern touch

Back to the content.  He made the point that a key executive  skill is getting traction for systemic change, and that there is a basic pattern for making it happen.

It starts with that poorly-defined but muched talked about ingredient – Leadership.

“Leadership is very much associated with vision.  It’s very market oriented, very rational.  It’s very much associated with getting people to really, deeply buy in to this, get aligned and work together, going in the same direction to solve problems.  It’s also about getting employees pumped up, empowered, motivated, inspired to make shifts happen.”

Then he talked about urgency.  He said that most orgnizations clearly aren’t feeling a strong sense of urgency to act when it comes to addressing the impact of our current situation.  This lack of urgency directly relates to the change management challenges we are all facing.

Begin with increasing a sense of urgency.  It helps shake things up and make things happen

Once this is accomplished, employers need to push for positive change, working to achieve some short term wins that will help make the changes stick.

Companies must create systems that managers can both manage and adapt, allowing positive changes to be triggered and implemented at the front lines of customer service.  This is where fear can keep leadership from seeing potential opportunities and, therefore, squelch a sense of urgency to act.  This inaction is the barrier to change.

Combine or alternate this fear with compacency, and things get gridlocked.

“Complacency is when you get a collective group that thinks what it is doing is just fine.  Take Washington DC, for example.  Do you think the two parties are behaving with you in a fundamentally different way than they did five years ago?  Do you think the administration is staffing people with a process that is different than any other administration?  It’s the same.  The same.  The same.”

Kotter urged attendees to avoid the frentetic activity that leaves people emotionally drained and burned out.  “These problems with our serious economic conditions are hurting a whole lot of people, especially the most vulnerable in our society.  This is unacceptable – and also unnecessary.”

I guess what I liked about his approach is that it resonated with the chaos and burnout that I am seeing in modern organizations, and was willing to have the competing issues of complacency and chaos on the same page.

Overall, turn up the urgency, and have a concice plan for change.  Then you will be developing the environment andoffering the tools to get some change done.

Kotter's list of 8 steps

Kotter's list of 8 steps

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