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“Building and Protecting Your Business Worth Podcast” brings together ideas from successful small business owners, and professionals from many different industries to share strategies and ideas to help create business growth, increased profits, and to protect your business worth from the “What If’s Of Life”.
The podcast will share ideas of how to unlock your “Business DNA”, creating more efficient business decisions, leisure time, and more fun in your business.
Welcome to building and protecting your business worth podcast. This podcast is about sharing strategies and ideas to help business owners build, protect, and transition their businesses for the future while creating more balance in their life. Your host is Thomas J. Perrone, CLU, CIC, and president of the New England Consulting Group of Guilford Incorporated, consulting business owners for over fifty years.
Tom:Welcome to building and protecting your business worth. Hi, I'm Tom Perrone, I'm your host. And this podcast is all about learning strategies to build your business, to create greater profit, but to create also an abundance of leisure time, so you can enjoy what you're building. Ken Summers and Mark Knoll, welcome to the podcast. Guys, thanks for putting some time into our podcast today.
Tom:We have a pretty nice, interesting very interesting subject and something you guys call VUCA, volatility, uncertainty, complexity, and ambiguity. And when I read this, when we were preparing for the show, I couldn't help to think of what the profile of an employee was in 1950, 1960, 1970, right? So, my first question, Ken, it'll be to you, but how can employees leverage their performance management processes to retain and develop their people?
Ken:Tom, thank you for that. I could go on at length, but let me try to be crisp about it. So let me start by saying that I am a passionate believer that our historical approach to performance management should go the way of the dodo. What we need to be doing is migrating to a world where employees have the opportunity for continuous feedback and coaching. And to bring it back to your question, in a world that is full of volatility and uncertainty, complexity and ambiguity, If employers embrace their relationship with their teams, offer feedback, offer coaching, offer development, they're gonna be able to retain those people and navigate these muddy waters that we're in today.
Ken:So that that's my short answer to
Tom:the question. No. No. I got it because we can go on with this. And, like I said, all you have to think about was what was the the, purpose of being employed in 1950 versus now.
Tom:Right? That's when everybody stayed at their job to age 65. And so that brings me to Ken's, to Mark's question is the definition of total rewards in the past, in the present, and in the future. Since you work with compensation and rewards, Mark, tell me what it's taking today versus what it might have taken in the past to keep someone happy and employed.
Speaker 4:You know, I think you speak to every comp and benefits or HR person professional and total rewards means something different to each of them. I think in the traditional definition is, extrinsic or compensation, salary and benefits packages for employees. Moving moving forward. And this has always been a how should I say it? A paradigm in terms of total rewards should be about the total environment, meaning work culture, your relationship with your boss, whether you're building your skills for your career and learning, all that is a little bit more touchy feely and what we call intrinsic in terms of, you know, you get up, you get up in the morning and you go to work, you want to go to work.
Speaker 4:That's a total reward. Yeah. Because Right. Basically, you enjoy you enjoy what you do. And I think that that is never really verbalized by both employer and employees and it should be.
Speaker 4:In terms of what to Ken's point, connecting to Ken's point, performance management should be, well it's a formal process, but if you can make it informal and hey, let's have lunch, let's check-in every month and you go check-in every two weeks and see how it's going. Are your challenges? What are your issues? Etcetera. Because let's be honest, you know, performance management, yes, you're given objectives, but it's also about how can I do, how can I as a manager help you, help you do what you need to do to be successful?
Tom:I coached a client of mine years ago, built his practice, two practices, multi million dollar practices, and now works sixteen hours a month, and he's in his 40s. But I suggested to him that he have meetings like pizza parties and communication parties with his employees, but to vision his employees. For And example, when you hire somebody, you know, that person's gonna do a job x, but sometimes when you hire someone, you see a greater role in the future. So Ken, that leads me to that question about what should employers be doing to prepare the leadership transition? Because not every employee is gonna do, this is my job and then I'm gonna retire.
Tom:Some people have aspirations they wanna be, they wanna own your business. So what do you do as an employer in that role?
Ken:Right. So so again, you know, thank you, Tom. Succession planning is a critically an area of under focus for most organizations. You know, big companies like the IBMs, the Hartfords, the CVSs of the world, I'm pretty confident they have sophisticated succession management processes. But your average small to medium sized business really doesn't pay a lot of attention to this except in a reactive mode.
Ken:And given our environment where there is so much uncertainty, my observation, and it's anecdotal, is that more and more small and medium businesses, especially if it's an entrepreneur owner, are saying, know, is it time to take my money and get out? And are they prepared for the survival of the business if they choose to do that? So what I argue is almost regardless of the size of your business, you should be thinking about who's going to replace me, who's going to replace the guy or woman who does replace me, and do I have the depth of a management team that is prepared to operate the business effectively, whether I'm here or not. That's what you know, businesses businesses have a life. And, if you wanted to live beyond your tenure, you have to be thinking about how do I prepare my employees and my team for the next generation.
Tom:And it goes it it even goes beyond that, and I'll tell you why. I just ran into a situation where a big company, dad cashed out. The son's now running the company, but dad took, a lot of millions of dollars out. But there's an a note due of $4,000,000 twenty years from now. What happens if son bails out, goes crazy, dies?
Tom:What do you think is gonna happen to that business? Because it's one thing to find one successor, now try to find a non family successor with cash So it goes beyond that. And and, you know, Mark, that comes down to my total reward strategy is is tied so much to to work culture, which I'm big on. But what are the the key to dos in ensuring that they mesh in that culture?
Speaker 4:Well, you know, the more successful, leaders and senior managers that I've experienced have always been approachable by their employees, but also they have a plan of engagement with their employees in mind. And that can range from business education, in terms of, you know, what are we doing at given point in time to be successful. I think the word that I would use is participative, meaning it's a participative culture that involves everyone, and everyone is respected in terms of, do you have a better way of doing this? Do you have a better way of impacting the bottom line, making feel, making everyone feel that they have a line quote unquote line of sight to the bottom line, whether it be new ideas, whether it be leading cross functional teams, all that stuff is of raising what I call the respect index for the entire culture.
Ken:If I may hold on that more. Know, Tom started us off by asking about performance management in a VUCA environment. Again, just for the audience, let me redefine VUCA because it may be an unfamiliar term to some people. It's an acronym: Volatility, Uncertainty, Complexity, Ambiguity. We've been in VUCA worlds before.
Ken:We're in one again now. At least I would say we are. Mark, your comments about culture, I agree with everything you said. I would argue, to go back to Tom's original question, that the way we manage people, the performance management of the organization, is a profound reflection of the culture. Because how we manage people shows up in how we pay them, how they feel about their work, what do they bring home, positive energy or negative energy, I could go on and on.
Ken:And if I may, Tom, I'm going to shamelessly promote a short book I wrote.
Tom:Absolutely. Absolutely.
Ken:So I recently published a book called Transforming A Guide to Continuous Growth and a High Performance Culture. I believe that how we manage our people, how we give them feedback, how we develop them, can create more certainty in a VUCA world, both for the employee and the employer, because they build that stickiness to the organization. And, in fact, will deliver dividends well beyond the the obvious of increased loyalty in in a volatile situation.
Tom:You you know, being involved with so many industries, not only experienced business owners, but new people coming into the business. I know how to make a cabinet, but I know nothing about business. And there's there's why people like Mark and Ken are needed to coach. I can build a cabinet, but I can't run a business because it never did. That that's important.
Tom:The experienced business owner has been down the line a little bit and sometimes they they obviously do need coaching, but, you know, I I go back to Trader Joe's. My son worked there for years and I saw how great of a culture they had because everybody was excited about going to work. I think maybe Costco might have the same thing, but I know Trader Joe's. And you you're you're right. You're right when you can.
Tom:You need to keep communicating to every level of management because you never know what level rises to the occasion in the future. You never know. Absolutely, absolutely.
Speaker 4:I'll jump in here if I may. Sure. Yeah.
Tom:With
Speaker 4:regard to this whole concept total rewards, I think one of the biggest challenges for a growing business is trying to define what performance management and accountability is, and what are the challenges in doing that. I just referred Ken to a business owner like I mentioned. Was my mother's next door neighbor and she's got this $2,000,000 company. She is an international, if you can think that as far as her employee workforce is concerned, she's got about 15 or 20 people. Some of them are in Eastern Europe, believe it or not, and she also has a domestic component to that.
Speaker 4:How she goes about defining performance has to be different for both sets of employees. Ken, I'm kind of jumping ahead, but this is what I'm seeing in terms of the attitude in Eastern Europe, and you've been there, so I'm not going tell you anything you don't know, but the thing is that in Eastern Europe, she has a totally open and cooperative relationship with her employees. They even sent her letters of appreciation saying, I'm so happy I'm working for you, etc. Now, go back to The United States, and the whole definition of performance management accountability has changed with regard to entitlement and what is accountability, because I think that's a negotiation in The US labor market. Those types of things, and I'm being I know I'm generalizing, but what I've seen is that when employers have to pay employees, etc, there is a sense of entitlement in terms of what I have to be to hold employees, and that is a very, very how should I say it?
Speaker 4:A very, very it's not a roadblock, but it's a challenge for most employers in terms of defining that and making employees accountable. And you know, she's having said to me she's very dizzy in terms of going back and forth from Europe to The United States in terms of kind of switching gears, if you will, and addressing employees etc. And this is one of the main challenges I've been telling Ken about this etc.
Tom:Well, you know, it's not even first of all, that what a challenge the Europe and America, right, two different almost whatever. But you also have it even closer, the East Coast versus the Midwest, the Central States to the West Coast, Ken. So that's my question, You're talking about a lot of people in an organization. So how do you as a professional deal with the coaching? How do you intervene in these things?
Tom:How do you grow? How do you develop that? How do you support leaders who are actually struggling? And you have them on the East Coast. You have so how do you do this, Ken?
Ken:So if and if I I will answer that question, Tom, but if I may just make a comment about Mark's observations Because I I'd like to challenge him a little bit, in that I I do believe that the to a very, very large extent, the way we manage performance is global and can can and should be. I'm I'm ignoring in saying that, I'm ignoring local labor laws, things like that, but the essence is and should be universal. Now to come back to your question, Tom, the first thing in terms of an intervention to support a leader who is struggling is to recognize there's a problem. Frequently, you won't recognize there's a problem until it's blown up to some extent. In a world where you're doing continuous performance management, where you're providing feedback on a regular basis, where you're coaching your leaders to be more effective in their own jobs and with the people they lead.
Ken:If you do that, you're going to identify those risks, those problems, far earlier and hopefully avoid some collateral damage along the way. But what I do is, once we've identified one of those situations, is I spend time both with the individual and his or her manager to clearly define what's going on, what are the implications of the behavior, and what is the desired outcome. And once we've got clarity on those things, then it's a matter of implementing an engagement where we we help that individual find a better way to get things done.
Tom:And yes. Thanks, Ken. No. I I appreciate that. It's you know, it really comes down to a lot of communication and open channels, and honestly, really, integrity.
Tom:Mark, since you're working with compensation, that's, you know, one part of the negotiation when you're dealing with management or an employee. So let's talk about the must haves that you feel are legitimate part of a commitment from the employer to the employee. Well,
Speaker 4:I think when the CEO or the owner talks about what his or her values should be for the workplace, one of the biggest challenges in compensation, well, in organizational change for that matter, is to get your senior leadership team to commit, to commit to those values. That's why it's important and Ken's probably done this with a senior management team before, I've done it on total rewards, but what are our values to commit to for the work culture? What are our values to commit for the employee workforce? You know, a typical total reward strategy begins with a total rewards meeting of senior management in terms of what do we stand for and with the workforce and do we want to be become a best place to work? And that's kind of a cliche, but again, what is, what consists of a best place to work as far as our pay strategies is concerned, our performance management strategy is concerned, our communication strategy is concerned in terms of what are we holding employees accountable for, and how do we hold them accountable in terms of giving them the exact tools to get the job done and to be successful, to have the organization be successful.
Speaker 4:So I think it varies from every business. It varies to what the maturity or immaturity of the business is in terms of you're looking, if you're looking at a growing business, values and the total reward strategy is gonna be a lot different from what a mature business is going to look like. So I think that that's in a nutshell, that's really what we're up against, but in terms of getting senior management and middle managers to commit, that's I think that's one of the most important things that experienced in terms of any organizational change, whether you're going through a restructuring or whether you're changing the compensation plan, whether you're changing incentive plans, whether you're introducing a new benefits, you know a kind of a new benefits plan, all that is they call, I think they call it open book, open book management in terms of management does not keep anything away. But there are gradations and there's a continuum of that terms of the values that the ownership or senior managers have.
Tom:Well, know, you were saying, talking, Mark, I couldn't help but to think of the company that puts in place all these wonderful little executive benefits to keep people there because that's my world putting these things together. But, I'm saying, well, you know what? If you're doing that and spending all that money, you better have a tremendous culture and great communication because you don't wanna be on the hook for hundreds of thousands of dollars with an unhappy guy for the next ten years. So this from culture to communication to everything we're talking about, It looks like we lost Ken. I'm not sure.
Tom:We have to wrap it up anyways. Mark, thanks so much. I appreciate you, spending some time. And, Ken, I'm gonna put your book and your link to in the summary notes. And any last thoughts, Mark?
Tom:I
Speaker 4:think given what's happening now and, you know, Ken put together that the idea, I think management has to be open open and in the fact that things are changing at a mind dizzying rate. As a matter of fact, I'm not going to talk about AI, but AI changes every month.
Tom:Yeah. In your case
Speaker 4:Basically, management has to be a lot more, and I'm using a cliched word nimble and adapt, especially with their people.
Tom:Yeah, and in your field
Speaker 4:Really, it is so important because, you know, retention, it is it is incredibly expensive now to lose somebody.
Tom:I know, I know. Well, Mark thanks so much and I'll have your website up there. And Mark I'm sorry I didn't spend some time on the on your introduction, but Mark has a really good firm, a wonderful firm called Comp three sixty. You'll get I'll put his website on the summary notes. Check them out.
Tom:And, Mark, thank you so much for taking the time.
Speaker 4:And thank you, Tom, for having us. You're welcome. We could go on for days, but we're not going to.
Tom:Enjoy the week. Well, I wanna thank everybody for tuning in and listening. It was a good show today. And if you would help us out by subscribing, click a like, if you have any ideas or thoughts that you would like to share with us, please email me at tperrone, that's P E R R O N E C G G I N C dot com. And if you are a business owner or you know business owners that would like to participate on our show, certainly let me know.
Tom:We certainly welcome everyone who's a business owner to help people out there that are running businesses with great ideas and strategies to make them successful. So again, thanks for tuning in. I certainly appreciate it.
Tom:Thank you for tuning in. Whenever you're ready to grow and protect your business while creating more balance in your life, here are three steps you can take. One, subscribe to this podcast. To request a free copy of Tom's newly published book, Unlocking Your Business DNA, email Tom@tperoneatnecggincinc.com. And on the subject line, type d include your mailing address and thirdly take the one minute scorecard and report to see how efficient you are in your business planning email tperronenecgg I n c dot com and request scorecard.
Tom:For additional information, click the show notes.