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Coming Events

Understanding, Building, and Assessing Competencies

Using the LEADERSHIP ARCHITECT® to build and implement Competency Models

Michael Couch & Associates Inc. is pleased top sponsor a two-day workshop in Pittsburgh by Lominger Master Associate, Jane Schenck, at a significant savings! Return home ready to take a giant step forward in improving your talent management processes. The LEADERSHIP ARCHITECT® is an integrated, research-based set of tools that gives organizations the ability to put leadership and organizational development best practices into action.

Learn More or Register Now

 

Value Drivers: Building Reliable Systems to Sustain the Growth of the Business

By Rick Tifone
ClearCourse Consulting

If your objective is to someday sell your company for the highest possible price, you would be well served by building reliable systems that can sustain the growth of the business.

A solid management team is the first value driver to focus on when you are preparing your business exit. In addition to building a strong management team, it is important to build reliable operating systems that can sustain the growth of the business. The second value driver then is the development and documentation of business systems that either generate recurring revenue from an established and growing customer base or create financial efficiencies. For most businesses, this includes all of the core processes that generate revenue or control expenses. These systems may include processes related to production or service delivery, but also may include people-related processes such as a succession planning or a performance management approach.

Look at your business from a buyer's perspective. If you leave shortly after a sale, what remains? If the answer is top management and highly efficient business systems, you can be more confident that you will be able to get top dollar for your business.

In addition to the business systems related to revenue and expense, some systems are related to customers, such as tracking systems, and the delivery of your products and services such as distribution systems. The documentation of these systems is important to ensuring that quality and consistency can be maintained after the sale. They also signal to the buyer that elements critical to the successful transition of a business are in place. Some examples of items worthy of documentation are:

  • Financial control systems and accounting policies.
  • Policies to ensure compliance with legal and regulatory matters, especially those related to employer/employee relationships and safety.
  • Data management and information systems that tie the company together.

There are several business systems, which, once in place, enhance business value whether you plan to sell your business now or decide to keep it. These systems include:

  • Human capital management including recruitment, selection, hiring, and retention; performance management; training and development; compensation and benefits.
  • Production including product or service quality control and improvement.
  • Product or service research and development.
  • Inventory and fixed asset control.
  • Sales, marketing, and communications.
  • Procurement including the selection and maintenance of vendor relationships.

Obviously, appropriate systems and procedures vary depending on the nature of a business, but at a minimum, those resources and activities necessary for the effective operation of the business should be documented. After you have built reliable systems designed to sustain the growth of the business, the next value driver to focus on is establishing a diversified customer base.

If you have any questions about increasing the value of your business prior to your exit, please contact us to discuss your particular situation. We can help guide you through the process of identifying the current value drivers in your business and creating a road map for increasing value to meet your overall exit objectives.

Rick Tifone
ClearCourse Consulting, Inc.
www.clearcoursec.com
[email protected]
412-492-7495

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Job Satisfaction Hits Bottom – Surprised?

Reporting on the 22-year research conducted annually by the Conference Board, the recent MSNBC headline read, “Americans’ Job Satisfaction Falls to Record Low.” Are you surprised? I’m not, after the engagement-destroying events of 2009 - incomes dropped, healthcare costs increased, jobs were eliminated, stock prices faltered, the future is uncertain and the government took unprecedented steps to alter the business landscape. The MSNBC report went on to highlight the concern of economists that, if left unchecked, this grumpiness could affect America’s competitiveness.

So what’s a business leader to do (when you are probably grumpy as well)? There should be no surprise on this front either. Leaders have effectively dealt satisfaction-challenged employees in the past and evidence of effective human capital practices abounds.

First of all, if you had to wait for a Conference Board report to let you know that you might have a disengaged workforce then shame on you. A hallmark of high performing organizations is that they regularly take the temperature of their workforce and implement specific actions to address gaps and declining trends. There is a key distinction between measuring satisfaction (which the Conference Board measures) and gauging engagement. Employee satisfaction is not as strongly linked to important business outcomes. Engagement (the willingness to put forth discretionary effort) is. Make sure that you assessing the latter, not the former.

Second, focus on “Work” - what people are doing, why they are doing it, and what’s-in-it-for-them if they do it effectively. The reason for this perspective is two-fold. These factors of Work are drivers of engagement (see above). They also have contribute significantly to the value of a business. (See Deloitte’s Human Capital ROI Report.) Therefore, to get us out of this valley of grumpiness and to grow their business, leaders should focus on the following Work issues.

  • Talent Management
    • Identify pivotal roles and assure that you have high potential replacements for them.
    • Talk to high potentials, ensure that they are engaged, and that they have a variety of ways to develop a career in your business
    • Develop knowledge transfer processes for core competencies and engage High Pro’s in their delivery
  • Strategy Deployment
    • Use a variety of media to regularly communicate strategy and annual plans
    • Formally link everyone’s work and objectives to key business objectives
    • Provide all employees with information about customer satisfaction, industry trends, competitors and company performance
  • Rewarding performance
    • Link team and individual performance rewards to company performance

I look forward to a future headline that reads, “All Time Level of Engagement Reported, Grumpiness in Decline”.

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HR Watches The Office

I recently had the unique opportunity to join with other experts in discussing “the flood of organization issues spewing from NBC’s hit TV series The Office”. The result – an entertaining and enlightening series of podcasts at HR Watches the Office.

Host Matt Dubno and I discussed how recently sold Dunder Mifflin can transition to a new and improved powerhouse and how HR can effectively play a role during times of change.

  • How can Jim and Michael work effectively as co-managers under a new regime?
  • Is it effective for new owners to insist on an entirely new mode of operating from a highly profitable (how’s that possible?) unit?
  • Is Dunder Mifflin a struggling organization that needs rebuilt or was it an effective company held back by poor leadership?
  • Do I most identify personally with Jim or Michael? Will I ever loose my crush on Pam?

List to the podcast to find the answers to these and other need-to-know questions at www.hrwatchestheoffice.com.

“HR Watches The Office” is produced by Baldwin & Obenauf, a full-service strategic communications firm located in Bridgewater, N.J., with specialty teams that focus on employee engagement, communication, and recruitment. Baldwin & Obenauf, innovate, inspire, involve.

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Competencies: What Good Are They?
By Jane Schenck
Catalyst Consulting Services

The notion of using competencies throughout the HR processes is usually not a neutral topic. If their organization’s use of competencies is so well integrated that people can hardly recall what life was like beforehand, they express support for the action. But when a company is not using such a ‘baseline’ language usually animated stories of why it would never work here ensue.

Since I am more familiar with the former stories, I will relate highlights of those conversations.

DEVELOP OUR OWN?

Adopting a set of research-based competencies delivers an HR staff from the exhausting project of creating the company’s own descriptions. Unlike the effort invested by researchers intent on providing validated, defensible descriptions, the internally developed competencies never include related content of how to develop each one, how to interview for each one, normative data (as in what are most people weak in), etc. The best research-based sets of competencies also give positive and negative indicators which can enrich decisions such as which of these two people would make the best division manager?

DEFINE QUALIFICATIONS THE COMPANY NEEDS

Competencies are used for both explaining what positions/ levels require and what skill-sets qualify candidates (beyond time in a job). Furthermore, they aide senior executives, who announce major changes that must occur, by enabling them to more concretely describe what people need to do differently and what they need to decrease doing.

SUPERVISORS’ ADVANTAGE

Even on a day-to-day level, those who can’t recall what it was like before they integrated a set of competencies into their work-life, talk about supervisors who (1) can now articulate who their effective performers are and why; plus, supervisors who (2) have less frustration when they need to confront an employee’s problem behavior—the competency vocabulary sharpens their ability to coach. (You might even hear about how a supervisor admits that they used to think by just saying, “You need to get better at peer relations” would actually do the trick)

INSTALLING COMPETENCIES

When bringing competencies into the organization, there is a learning process of ‘what competencies are’ that managers and employees benefit from, accompanied by the surprise that what goes on during the day is rarely discussed above board; and a lot falls through the cracks by avoiding such clarity. An example is that, by not reaching decisions on what performance is truly at stake, a false positive decision can occur where the squeakiest wheel would get the project lead instead of the coolest head in the candidate pool. In other words, when a set of competency behaviors has not been integrated, to an invisible and useful extent, there are vital bits of information missing from discussions and decisions which can unwittingly permit “errors”. Consider a few of the subtle concepts learned when competencies are introduced, such as:

  • Not all competencies are created equally; being results driven is much easier than being able to negotiate a conflict-ridden situation
  • There really are unspoken rules that matter, mostly around how well you interact with others. Some instances can make or wreck your career, unbeknownst to you
  • You really can be too strong in something – for instance, being highly decisive can be misunderstood as rude and arrogant, regardless of your intention to just be efficient

BEST ADVANTAGE

But the most powerful advantage to bringing competencies into the company is that you can begin to dispel the myth that ‘only results matter’; that this stuff is fluff. As though a fog lifts, now you will be able to talk about exactly what is needed to get those results.

Jane E. Schenck
Catalysts Systems Master Associate, Lominger International, A Korn Ferry Company
[email protected]

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