| Welcome to The Lift! Our goal in producing this newsletter is to explore topics that interest us and share our findings with our readers. In this issue, we are pleased to introduce two of our clients and present an article we've written on how to keep company morale high during a business downturn. We've also included a column called “Good Ideas”, where we offer management tips gleaned from personal experience. We welcome feedback -- please send any comments you'd like to share to newsletter@liftingmind.com. |
In this issue, we feature two of our high-tech clients, both of whom are developing automation technology to revolutionize the ways their customers operate.
Gold Wire Technology, a developer of configuration management software for Internet service providers, recently engaged us to help them improve their product development process. They're now on track to release a new version of their flagship product, Formulator, later this summer. Formulator is attracting a lot of attention because it directly addresses the most critical need of Gold Wire's customers: reducing operational costs and maximizing profitability. By automating the configuration of Internet services, Formulator eliminates the errors and expense associated with manual configuration. It also lets service providers activate services much more quickly than before, resulting in higher revenues. We had a great time working with VP of Engineering Rich Boule' and his team, and we anticipate much success for Formulator. More details about Gold Wire and Formulator can be found at www.goldwiretech.com.
NOVILIT, Inc., one of our newest marketing services clients, is at the forefront of communications technology development. NOVILIT has developed a software product called the NOVILIT Development Environment (NDE) that communications product developers will love. As their web site says, "By automating the writing, modifying, testing and implementing of protocol stacks, NDE will shorten the development cycle by an order of magnitude." Having implemented several protocols ourselves in the past, we believe this technology is really cool, and of significant potential benefit to companies making any type of communications product. For more information on NOVILIT and NDE, visit their site at www.novilit.com.
Feature Article:
Keeping Morale Up When Your Business is Down
What if Morale just didn’t show up for work one day? No call – no explanation – just not there when expected. What would you do?
The morale of your company is like an invisible but critical employee who always works hard for you … when business is good. Morale is a top performer when your company’s making plenty of money and there are new and exciting opportunities for all. Morale keeps things humming and makes your employees feel terrific about working at your company. Don’t you just love that Morale!
But the minute business slows down or a difficult problem rears its head -- what happens to Morale? The chair’s warm, but the cubicle’s empty. Morale has called in sick, left to work for another company, cleaned out its desk, exercised its options and jumped ship. Suddenly the rest of your employees aren’t working so hard. They’re demotivated because Morale is no longer around.
At least, that’s what happens if you take Morale for granted. But does it have to be that way? Is there a way to keep Morale from slipping out the back door when things take a turn for the worse? Can Morale survive hardships like hiring freezes, budget cuts … even lay-offs?
We put these questions to several business leaders who have been through tough times in the past and we confirmed that it is possible to retain Morale in difficult circumstances when it is needed most. So if your business is facing heavy seas ahead and it’s crucial that your team remain productive and motivated, read on to find out what to do … and not to do.
Wouldn’t it be great if there was a “Morale-o-Meter” you could hang on your wall that would tell you how your team is feeling? Its display would range from “very depressed” to “not so bad” to “euphoric.” With such a gadget, it would be a cinch to measure corporate morale and know when to take action.
Unfortunately, the Morale-o-Meter has yet to appear at the local office supply store. But there are still several ways in which you can monitor the morale of your employees, depending on your personality and management style.
If you’re an open and communicative manager by nature, you’re probably naturally attuned to morale levels. Having people stream into your office on a regular basis to voice their concerns puts you in a good position to identify and address morale issues. It takes attentive listening and careful judgment to understand how serious the concerns are – your challenge will be deciding which concerns don’t require action beyond the hearing you’ve already given them.A different kind of management personality requires a different approach. Say you tend to be a bit more reserved and analytical, and people don’t regularly come to you with their concerns. Then make use of that analytical bent by monitoring your employees’ behavior, body language, facial expressions and postures. How often are you hearing laughter? Are people avoiding eye contact? Are people looking into their monitors with concentration, frustration, or resignation? Are they sitting up and typing with all ten fingers, or slumped down working the mouse with one hand at arm’s length?
No matter what your style, you should always be on the lookout for these tell-tale danger signs of low morale -- gleaned from our own experience and from the managers we interviewed:
- Employees skulking behind closed doors
- Frequent late arrivals
- Whispering in out-of-the-way corners
- Chronic grousing about the stock price
- Declines in the overall quality of work
- More than one going away lunch per week
If your organization is experiencing one or more of these, you have a morale issue. Left unaddressed, you’ll soon have a morale problem.
Conversely, if your people are still getting a lot done despite your company’s difficulties, that’s a good sign. That means that they have faith that the business will pull through and their hard work won’t be wasted.
When times are tough, it’s easy to put blinders on in an attempt to handle your own critical tasks. Don’t let that prevent you from reading the signs of decaying morale. You may not have a Morale-o-Meter, but a little time spent observing and thinking about your team’s emotional state can save a lot of headaches later.
You’ve tested the morale around the office and found it to be ailing. The next step is to buy everyone lunch and bring in the massage people, right? Think again! Those are nice things to do but they won’t solve the real problem. In order to solve your morale issues, you need to understand what’s really bothering people.
Company finances these days are a source of concern for many employees. If you’re with a public high-tech company, then the recent performance of your stock price has probably taken some of the spring out of your employees’ steps. But don’t assume that’s the only problem. Instead, probe to see what other concerns may be lurking out there.
Financial difficulties often have indirect as well as direct effects. Ian Agranat, founder of embedded software provider Agranat Systems (acquired last year by Virata), faced a morale issue when the parent company instituted company-wide budget cuts and hiring freezes. Ian’s team complained, upset that their potential was being limited due to lack of the necessary resources. Ian understood that the team was not just worried about the value of their stock options but also about the impact on their professional goals. He supported his people and resolved their concerns by working to obtain more internal funding for the group.
Sometimes people worry about imaginary problems, which have an annoying way of becoming real problems for you. Jay Batson, CEO of IP phone developer Pingtel, notes that even though his company is doing well overall, his employees are still fearful about their jobs because of the state of the economy. That’s certainly understandable these days, when even giants like Cisco are laying off. So even if you’re optimistic about your company’s outlook, you must keep reassuring your employees about their future so that they don’t begin inventing things to worry about.
You probably think of yourself as wearing many hats within your company: salesperson, coach, technical visionary, evangelist, financial jock, etc. Now is the time to focus on yourself as a leader. In times of crisis, people instinctively look to someone to lead them to safety -- and that’s you! Your employees’ full attention will be on you, what you do, what you say. If they like what they hear and see, then they’ll gladly stick with you.
What does it mean to be a leader in a time of crisis? Here are three important requirements:
- Be on top of the situation: Your good looks and charm may have worked for you up until now, but at this point you really have to be smart. Understanding the position you’re in and articulating it in a realistic way will do wonders for affirming your credibility with the troops. You’ll need to explain how and why the situation arose, how your company is being affected, and how other companies are being affected. Be prepared to answer a lot of questions – and make sure you have the data to back up your assertions and assumptions. Displaying even a small amount of cluelessness can undermine employees’ confidence in you and be deadly to morale.
- Share information openly and frequently: Talk with your team. Give them your honest assessment of the financial situation, the sales results, the actions you plan to take. Even if you have nothing but bad news to report, report it anyway. People want to hear the truth and feel informed. As Joseph Kershenbaum, former COO of E-Solutions Integrator, Inc., puts it, “Bad news is better than uncertainty.” And if you are open and honest, there won’t be as many rumors flying around. Also, consider more frequent get-togethers with your group. Pingtel originally had a bi-weekly company meeting, but over time it slipped to a monthly schedule. Morale issues alerted Jay Batson to the value of communications, and he now makes sure the meetings are again held bi-weekly.
- Have a plan and demonstrate progress against it. Your people want to know that you’re capable of finding a way out of the wilderness, so once you’ve decided what actions to take, communicate them to the team. Explain how you expect these actions to work and then show the results over time. Assuming that your plans are well thought-out and flexible enough to adapt to new challenges, the results will convince your people that they made the right choice in sticking with you.
Another essential area to focus on during a crisis is teamwork. Good leaders exemplify the concept of teamwork through their own actions and reinforce it through what they ask people to do. When Agranat Systems was still a private company and in financial straits, Ian Agranat asked some employees to defer their pay so that the company could stay cash-positive. Of course, he only did this after first making large sacrifices of his own. Because he pitched his request as a way of demonstrating commitment to the team, those who could afford to get paid late felt good about helping keep the team afloat.
To maintain teamwork, you also need to get rid of anyone who is demoralizing the team. You know the type – they’re Morale’s evil twin. When things are going well, they stay hidden, apparently content. But when problems arise, you can identify them in a flash by the whispering, the closed-door meetings, the increased anxiety that they generate and the complaints about them from their co-workers. Convert them if you can, fire them if you have to, but be swift and don’t let them continue to poison the environment for everyone else.
Believe it or not, there’s no time like a crisis to make changes within your organization. That may seem strange if your instinct is to hunker down and just try to hold things together until the storm passes. But consider the benefits.
First, people naturally resist change, but their resistance to a proposed change will be lower if they think it will put your company back on track. Shari Agatstein, former VP of operations of software development firm Natural Intelligence, used a business downturn to remind people of their connection to the bottom line by instituting processes holding them accountable for their efforts. The company’s leaders found that their engineers needed to be billable 80% of the time in order for the company to be profitable. So they implemented a tracking system that measured billable time against that metric. The engineers initially resisted the system but recognized that tracking their time was important to bringing the company back on track – and they were proud when they met their targets. Had this process been implemented at another time, morale might have worsened rather than improved.
Second, the increase in managerial attention will improve the morale of your employees, a phenomenon known as the Hawthorne effect. (Note: In order for this effect to work, the managers must be focused on actually improving the company and not just looking for people to fire!) The executive team at a Boston-area technology services firm recently completed an intensive but successful fund-raising effort – only to find their field workforce feeling neglected and demoralized with widespread concerns about career development, compensation and management issues. In response, the company leaders spent a month traveling to their field offices worldwide and listening to what their employees had to say. Follow-on changes such as clearer promotion policies and increased transfer opportunities addressed the major concerns. However, the amount of time devoted by company leaders to employee issues undoubtedly had its own significant impact on boosting morale.
One caveat when making changes: be sensitive to effects your efforts may have on your more jittery people. Make sure to explain very clearly what’s happening and why. Even an innocuous change can cause folks to jump to wrong conclusions and start looking for new jobs.
Sometimes leaders think there’s an easy way to climb out of a morale morass when generally there’s not. Learn from their mistakes. If you think you’ve come up with a great morale-building idea, think about it carefully before trying it. Otherwise you may just make things worse.
Natural Intelligence, which succeeded with the time tracking system, didn’t fare as well when it tried adapting a sales incentive program to boost morale and productivity among engineers. Under the program, engineers were paid a bonus whenever they went above the 80% billable level. Unfortunately, the plan failed because it caused people to divert effort towards optimizing their bonus, it rewarded them for doing what they were supposed to be doing anyway, and it ran counter to the company’s culture of teamwork. And when sales were down, the engineers lost all control over achieving their bonus. As a result, people felt worse instead of better.
For some reason, company leaders sometimes think that the way to improve morale and inspire teamwork is through coming up with a new motivational company slogan and rolling it out with banners, t-shirts, buttons, and the like. Before you start brainstorming new slogans and calling your t-shirt vendor, recognize that your jaded engineers and sophisticated senior professionals are going to consider it a waste of money and lose a certain amount of respect for you. Too bad if you are the world’s greatest sloganeer, but that’s the way it is.
And don’t even think about spending large amounts of money on events or gimmicks when your company is struggling financially. Companies have been known to throw lavish parties when their employees are worried about their next paycheck. Treat your employees with respect and don’t insult their intelligence. Save the money for important things like salaries and call the caterer only when business starts booming again.
Can good things come out of bad situations? Absolutely. If people are truly on board and want the company to succeed, they’ll use their energies in positive ways and your company will come out even stronger.
Julie Ginches, president of PR firm KHJpr, reports that the recent decline in the high-tech industry has affected her business. But rather than letting the downturn sap their energies, her team has engaged in business development and promotional activities for which they never had time before. They have scoured their contact files to come up with companies to pursue as clients and focused their PR talents inward on the firm to generate press for KHJpr. They are enthusiastic and proud of their efforts, and no doubt when the climate improves, the agency will be well-poised to grow and thrive. Julie has employed many of the tactics covered in this article, and the positive results show the value of leadership in this area.
All of this shows that it is possible to keep morale high during a difficult climate. Communicate with your team, be honest, pay attention to their signals, take the steps necessary to succeed with your plans and lead your people through to happier times. You’ll find that Morale will stick with you through the tough times… and so will the rest of your team.
Lifting Mind would like to think the following people for their contributions to this article:
Shari Agatstein, former VP of Operations at Natural Intelligence, now founder of Skelmir, LLC
Ian Agranat, founder of Agranat Systems
Jay Batson, CEO and founder of Pingtel
Julie Ginches, President and founder of KHJpr
Eric Janszen, Managing Director of Osborn Capital, LLC
Joseph Kershenbaum, former COO of E-Solutions Integrator, Inc.
In this column, we'll try to pass along some of the good ideas we've found have worked well for us or our associates in our businesses. If you've got one you'd like to share here, let us know!
“Sometimes Listening Well is All the Action Needed”
Peter H. Schmidt, Lifting Mind Inc.
During the early days at Midnight Networks, when four of us shared one 10'x15' office, we hashed out our decisions as a group. We were committed to reaching the best decision we could, so we stuck with the discussions until we had reached a satisfactory conclusion, even when it would have been easier to just throw in the towel. Because we were all engineers, it was important to us that our decisions be soundly reasoned and the logic agreed upon.
Likewise, as engineers we also were prone to occasionally sharing our opinions in the form of sweeping generalizations. "That compiler is total garbage!" "Only a complete idiot could have designed this protocol!" Now, this was usually a harmless indulgence, and in a cooler moment we would have readily admitted that sweeping generalizations are logically suspect. The trouble happened when one of these statements recommended that an action be taken.
One day one of my co-founders said, "We should never do business with those incompetent cretins again!" after a particularly frustrating incident of non-service from a service provider. He approached me with a full head of steam, swept out his generalization, and waited for me to concur.
Problem was, I didn't concur. Being the cooler head at that moment, I felt that this incident was no worse than you might expect to experience periodically with them or any of their competitors, and therefore switching our business would cost us time and effort for no real gain. So I started in to put these points across, and I wasn't going to be satisfied until he saw the soundness of my logic. In the end, I believe he did concede that their incompetence could not be wholly complete, and that they were not, in fact, cretinous 100% of the time, and hence perhaps we should continue to do some business with them. But neither of us came out of the discussion feeling very good, even though we'd abided by our principles, talked it out, tested the logic and reached consensus. What was the problem?
Eventually, I learned the lesson: often in decision-making situations where emotions are running high, what people need most is to be carefully listened to by the decision-makers. That's all.
At first, this felt dishonest to me. If someone presents their views on a topic and I disagree, shouldn't I surface that disagreement so we can examine our differences and resolve them? Furthermore, if someone recommends a course of action, and I decide on the opposite, don't I need to close the loop with them, explain my reasoning and make sure they concur?
Surprisingly, I have concluded that often the correct answer to both questions is "no." In these situations, what people are looking for is the respect of being heard. You give them that by listening carefully, repeating back to them what you've heard to make sure you got it right, and promising to take their input into account. You earn their trust this way, so if you do decide to go in a different direction, they will follow you without complaint.
Should you try to go back and "close the loop," explaining why you didn't follow their recommendation, you will find you have reopened the can of worms. You may be able to effectively articulate the logic for your decision, but since they don't share your authority, responsibilities or all of your information, they are unlikely to get the same gut-feeling of correctness at the end of the logic chain. You will have taken an employee or co-worker who was pleased to have given his/her input and made them uneasy at best, ticked off at worst.
It still surprises me in a way, but listening to one thing and doing another – without closure – is sometimes the best thing to do.
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