tMichaelB is the web site for Tom Bengtson, who writes about business, religion, family and politics.

Friday, February 25, 2005

Hands-on management is only option in high performance environment

A fundamental shift in the workplace in the last decade has made management much more difficult. Bruce Tulgan, founder of Rainmaker Thinking, Inc., said the workforce has shifted away from a long-term hierarchal approach toward a new short-term transactional approach. The consequences of this shift require greater levels of hands-on management but should result in higher levels of productivity.

Tulgan is the author of 14 books, including “Winning the Talent Wars” and “Managing Generation X.” From his New Haven, Connecticut base, he writes and consults according to the results of more than 11,000 interviews he has conducted since 1994 with employees at all levels in the workforce. I heard him speak at a business conference in Phoenix on Feb. 22.

“The old way was to do as you are told, keep your head down, make one short-term sacrifice after another, and in the long run the expectation was the organization would take care of you,” Tulgan explained. “In the new model, employees ask what do you have to offer me today, tomorrow and next week?”

Tulgan described groups of workers who fall into four age groups: Silent Generation (born before 1946), Baby Boomers (born between 1946 and 1964), Gen Xers (born between 1965 and 1977), and Generation Y (born after 1977). Initially, older workers thought the younger workers were selfish, given their propensity for immediate reward. Tulgan explained, however, that many older workers, including Boomers, have adopted the attitudes introduced by employees in generations X and Y.

Tulgan said managers brought about the change. They abandoned legacy employment practices that promised lifetime employment, for a more flexible model. When they instituted the first waves of downsizing in the 1990s, older works panicked. Younger workers, on the other hand, said, “Downsize me. I’ll just go do something else.”

Tulgan summarized: “Did managers think that the people who weren’t downsized out of a job wouldn’t begin to think like free agents? There are free markets for everything, including talent.”

Tulgan said managers were right to abandon promises of job security, which often held companies back. “Business managers need to be able to move quickly… Business leaders had to kill the myth of job security,” he said.

When the dot-com bubble burst with the onset of the new millennium, Gen Xers toned down their attitude, but instead of adopting the Boomers’ long-term climb-the-ladder approach, they began to “keep their options open.”

“No hard feelings, they’d say,” Tulgan play-acted on the stage with an empty office chair. “I have to take care of myself and my family.”

Young workers, Tulgan said, “are ready to work better, faster than anyone, all day, everyday. But they are not willing to do that in exchange for long-term promises about long-term rewards. They have high expectations not just for themselves, but also for you. They don’t want to know what they are going to get in seven years, 10 years, or 12 years. They want to know what’s the deal today, tomorrow, and next week. They want to know what you can do for them now.”

Young workers are the product of an educational shift that took place in the mid 1980s among teachers, parents and counselors. They began emphasizing self-esteem, Tulgan noted. “Don’t worry about how the other kids play. Those are their rules. That’s their style. You have your rules, you have your style.” Tulgan said that’s why so many younger workers have trouble showing up to work on time today.

Older managers can easily become frustrated with the attitude of younger workers. “We pay you, do as you are told!” Tulgan described the reaction of many managers toward younger subordinates. “But once you do that, you have already accepted a fundamental shift away from the long-term hierarchal model toward the short-term transactional model. It used to be ‘start at the lowest rung of the ladder, work you way up,’ Now it’s ‘we pay you, do as you’re told.’”

Younger workers are experts at information management, given that most of them were raised on computers, DVD players, cell phones, instant messaging, and satellite television with hundreds of channels, Tulgan said. In the workplace, he said, this makes them excellent researchers. “They can find the right answer, they just don’t always know what it means,” he said. “Older workers have to put those answers into context. They can provide the depth and the wisdom.”

As younger workers began to fill more of the employee ranks, and managers increasingly abandoned the idea of job security in favor of flexible staffing levels, Boomers began to realize that seniority didn’t mean anything. But instead of being outraged, Tulgan said they adopted the short-term transactional approach to employment that younger workers held from the beginning. “When the Baby Boomers started thinking this way, there was no turning back,” said Tulgan.

Boomers make up 46 percent of today’s workforce. Generations X and Y account for 44 percent.

The short-term transactional approach of most workers, Tulgan said, has changed the responsibility of managers. “What we are seeing is a market-based relationship with employees,” he said. “What do you get in a free market? Whatever you can negotiate. Managing people today has become a day-to-day negotiation.”

Mangers need to be ready to respond to employee demands that can range from time off to a bonus, to being allowed to bring their dog to work. An effective manager will negotiate those expectations with greater demands. Accountability holds the formula in balance, Tulgan said.

“Managers who untie their hands, role up their sleeves and take a hands-on approach to leadership, drive performance,” Tulgan said. “They spell out expectations every step of the way. And they hold people accountable.”

In order to hold employees accountable, a manager needs to have a high level of knowledge about his or her direct reports, Tulgan said. These managers should talk to their direct reports at least 10 minutes every day, Tulgan said. “Spell out expectations, clarify goals, make sure deadlines are clear.”

Managers should write down project details, and when problems emerge, good managers deal with them immediately. Ability, skill or will are at the root of nearly all performance problems, Tulgan said. Employees failing to live up to expectations should be directed into other tasks, given additional training, or motivated in new ways. If these tactics fail, Tulgan said, a good manager quickly fires them.

“One of the keys to keeping good performers is to get rid of low performers quicker,” Tulgan said. Higher performers hate to work with low performers, Tulgan said, and low performers usually cause more work for high performers. The most dangerous thing about keeping low performers, Tulgan said, is the message it sends that low performance work is acceptable.

“High performance every step of the way is your only option,” Tulgan said. “You’ve got to manage one day at a time, one person at a time. I know this is high maintenance. The good news is, if you commit to the high maintenance, the performance you will get will be through the roof.”

Thursday, February 17, 2005

Business success is all about service

In the United States of America, we live in a service economy where most businesses have no idea what good service is. You know what I mean. The service at most stores is pathetic. Whether it’s a fast food restaurant, a drug store or one of those big box retailers, it seems every expectation I have about service goes unmet. I always find myself at the checkout counter handing over my money to an indifferent attendant who seems to care little about his employer and even less about me.

Lou Carbone is a Bloomington, Minnesota resident who makes a living telling companies how to create better customer experiences -- that is, how to deliver better service. He has recently written a book called “Clued In: How to keep customers coming back, again and again.” I had a chance to listen to him address a group of bankers on February 12.

He said banks were better at creating good customer experiences 20 years ago than they are today. Many banks faltered, he said, when they began to focus on products instead of customers. He said banks lost their competitive advantage when customer relationship management became data management.

Carbone’s message is that banks – and all businesses, for that matter -- can change, if they really want too. And, most customers have such low expectations for good service, that many are content to be considered just another piece of data. As I thought about that, I realized he is right. Most people today would be so surprised by a truly exceptional customer experience that if they ever actually got one, they’d pass out on the spot. My point is, expectations are low; that should make servicing excellence easier for any business that tries.

Good service is mostly just application of the Golden Rule: treat others as you would want to be treated. We all know what we consider to be good service: we want to be acknowledged, not ignored; we want honest answers, not a run-around; and we want to do business with competent people who seem as if they are enthusiastic about their company and service. Certainly if the employees aren’t excited about their own store or business, then why should the customer ever be?

Carbone described several great customer experiences he has had. One was at a barber shop where the barbers make the customers feel like royalty. The shop is in Toronto, and Carbone said that after one haircut there he began scheduling business trips to Canada just to get another great hair cut experience. He had other examples and in all of them, he was welcomed into the business establishment, given straight-forward service by true professionals, and thanked as if he had just saved their business from the brink of failure.

That’s all most of us want from a bank, a barber shop, a store or any other business – to be acknowledged, served effectively, and thanked. Why is that so hard? Add enthusiasm and politeness and a business can win just about any customer over for life.

If you run a business – big or small – you will beat your competition every time by focusing on service. Carbone notes that most competing businesses sell similar products; people rarely form business loyalties around products. But people will shop where they know they can get good service. In fact, if they find a business that actually delivers exceptional service, they will go out of their way to patronize that business.

If you own or run a business, focus on people before products. Customers can find almost any product anywhere, but good service is truly rare.

Friday, February 11, 2005

Education, transportation, gaming key issues for Minnesota legislators as they try to set budget

One month into the legislative session, the drama at the Minnesota State Capitol in St. Paul surrounds the budget. The central questions are: How much should the state spend on education and transportation? And: Should the state be involved in gambling? Governor Tim Pawlenty and several legislative leaders met with business leaders on February 8 to offer their views.

"We have to make sure our financial house is in order," Gov. Pawlenty told a group made up of 240 professionals from the banking industry, and me. "When I became governor, we had a $4.5 billion budget deficit. It was one of the largest in the country and one of the largest in state history. We will be finishing that budget cycle this summer; we are projecting to have gone from a $4.5 billion deficit to a $500 million positive balance."

Even with a positive balance in the cash flow account, the Republican Governor said the state enters the next budget cycle with a deficit, albeit far smaller than the one the state faced the last cycle. Senate Majority Leader Dean Johnson, a Democrat, put the imbalance at $1.3 billion.

Gov. Pawlenty has proposed a $29.66 billion budget, which is an increase of nearly $2 billion, or 5.8 percent, over the previous budget. Gov. Pawlenty points out "we are growing the state budget at a rate that is higher than the rate of inflation," which he put at 3.7 percent.

In a 15-minute speech, Gov. Pawlenty described a list of priorities, starting with education. He said the budget sets aside money to create incentives for teachers to develop compensation systems based on factors other than seniority.

"We can pay them in a more professional and honored way," Gov. Pawlenty said. In a proposal he called "nation-leading," Gov. Pawlenty said he wants to see teachers compensated according to performance, admitting debate over how to do that is inevitable. But he said, "We can't have a system that's built on a 1940s mentality that says we are going to pay only on seniority."

He also said his administration advocates a system where more students will have an opportunity to take courses for college credit in 11th and 12th grades.

Rising health care costs are making it difficult for businesses to create new jobs, in addition to taking an increasing share of the state's budget. Gov. Pawlenty said his administration is working with business groups to create a health care purchasing alliance that will leverage their combined buying power to obtain lower market prices. The cost of government health care programs is rising at a rate of 18 percent per year; Gov. Pawlenty's goal is to reduce the rate of increase to 15 percent, although he did not offer details about his efforts.

Transportation has emerged as a leading issues this session, and Gov. Pawlenty called the state "15 years behind" on maintaining its roads and bridges. He said, however, that his administration "has put more money into the roads and bridges system than any administration in modern history." Nonetheless, he said, he has put a $7 billion transportation proposal before the legislature.

Senate leaders are advocating for an increase in the state's 20-cent per gallon gas tax to fund road improvements. "Minnesota has not increased its commitment to transportation funding since 1988 when the gas tax was increased from 19 cents," said Sen. Johnson. "You factor in inflation, it's 12 cents today."

Sen. Johnson said that over the next 25 years, the state is going to need road repairs costing $22 billion. Sen. Johnson, and his colleague across the aisle, Senate Minority Leader Dick Day, support a 5-cent increase in the state gas tax. They note that each 1-cent increase in the tax raises $31 million. Sen. Johnson said one more nickel per gallon isn't much to ask. "For an average driver in Minnesota driving 25,000 miles per year, a 5-cent gas tax increase is $38 per year," he said. "I ask you, are you willing to invest $38 per year into our bridges and roads and leverage federal funds as well? I think it is an appropriate investment in our state."

The Governor makes his transportation proposal without increasing taxes. He said proposals to increase the gas tax should be put on the ballot in 2006 so the citizens of Minnesota can decide whether they believe the additional tax is necessary.

Gambling is growing in Minnesota, and Gov. Pawlenty said the state should be sharing in the revenue. "Do not fall for the argument that we shouldn't expand gaming in Minnesota: it is expanding," he said. "We have 18 casinos in Minnesota, a good chunk of them added in the last five to 10 years. The ones that we have are growing on the sites where they are. The lottery is growing, pull-tabs are growing, internet gambling is growing. It's not a question of whether gaming is growing; it's a question of who is going to get the money and is it going to be fairly distributed."

Gaming is an industry in Minnesota that generates about $8 billion annually, with profits of around $1 billion, according to Sen. Day, who also addressed the group. Touting his own plan to put slot machines at Canterbury Park in Shakopee, Day said there are 34,000 slot machines in the state. The Native American Bands, which operate the casinos, pay no state income tax.

Gov. Pawlenty said his administration wants to work with the Bands in some form of partnership. The Governor originally wanted the Bands to share their revenue in recognition of their monopoly status in the gaming industry. That idea fell flat, but Gov. Pawlenty said some of the Bands are willing to work with the state on the construction of a "couple additional facilities" in Minnesota.

Gov. Pawlenty balanced the last budget without raising taxes. People seem to either love or hate the Governor over his campaign pledge not to raise taxes. "When I say we're not going to raise taxes, it's for a reason. It's not because I took a pledge. It's because you cannot be a rational person, survey the states around the nation, and conclude that our problem in Minnesota is that we are under-taxed," he said. "We are a state that is very highly taxed. Our revenues are growing $2 billion. We don't have a revenue problem in this state. We have to make sure our revenues and our expenditures match, and that we live within our means."

Monday, February 07, 2005

I am like the Ethiopian

I found myself in the Bible. I don't simply mean I was reading the Bible; I mean I actually found a character who could be me -- the Ethiopian in the eighth chapter of the Book of Acts.

There's a story between versus 26-40 about an Ethiopian court official riding home in a chariot. He's reading scripture as he travels. The Apostle Philip sees him and asks: "Do you understand what you are reading?" The man responds: "How can I, unless someone instructs me?" The Ethiopian invites Philip to join him in his chariot. Having been filled with the Holy Spirit at Pentecost, Philip is able to teach him the meaning of the scriptures.

For years, I read the Bible and really had trouble understanding it. I would start at Genesis and work my way forward, like I would any book. By the time I got a few pages into Leviticus, I had completely lost the story. I would get frustrated and stop. Other sections I read seemed cryptic: What is the meaning of the various miracles? Was Jesus really God? Why did Jesus need to die for us in the first place? My questions were endless and I was never really sure I could find any answers in my Bible.

Like the Ethiopian, I knew I needed a teacher. But who? Lot's of people claim to know what the scriptures are saying. Whom should I trust? Galatians 1:7-9 tells me there are people claiming to preach the word of God who have it all wrong. "But there are some who are disturbing you and wish to pervert the gospel of Christ... If anyone preaches to you a gospel other than the one that you received, let that one be accursed!" My problem is, I am not sure that I would be able to detect who was preaching the gospel that we have received, and who is preaching a gospel they have made up.

I found a story in the Book of Numbers to be useful. The Book of Numbers describes the Israelites after they have escaped out of Egypt and are wondering in the desert. Moses is their leader. In chapter 16, three men question the leadership of Moses. They gather 250 of their buddies -- "men of note" my New American Bible says. These were all faith-filled men and they believed that God spoke to all of them, just as much as God spoke to Moses. They ask Moses: "All of them are holy; the Lord is in their midst. Why then should you set yourselves over the Lord's congregation?"

Although these men have a special place in the Israelite community as Levites, they have trouble accepting Moses as the leader. They want to be able to lead, just as Moses does. The story concludes with Moses confronting the 250. Moses says that if he was not sent by God to be their leader, then they will all live normal lives with normal deaths. But if God did send Moses as their leader, then the earth will open up and swallow them. At that very moment, the ground opens up and all the dissenters fall in to be consumed in fire.

That story is interesting to me because it tells me that in a large community of believers, not everyone is meant to be the leader. God does designate some to be leaders -- in this case it was Moses -- and some to listen and live what they have been taught.

Moses is God's teacher to the Israelites; he has an authority given to him by God that no one else has. And, we know that throughout history, the Israelites passed that teaching authority on from generation to generation. Jesus acknowledges that authority in Matthew 23. Verses 2 and 3 say: "The scribes and the Pharisees have taken their seat on the chair of Moses. Therefore do and observe all things whatsoever they tell you, but do not follow their example." So even though the Pharisees are not living a Godly life, Jesus tells His followers to do what the Pharisees say because they have the authority that originally was given to Moses.

Where is that authority today? Chapter 16 of Matthew describes Jesus giving His authority to Peter. Versus 18 and 19 say: "I say to you, you are Peter, and upon this rock I will build my church, and the gates of the netherworld shall not prevail against it. I will give you the keys to the Kingdom of heaven." Jesus transfers His authority from the seat of Moses to the seat of Peter so that after Jesus' death, Resurrection and Ascension, we would know from whom to learn.

This is reassuring to me. If I am looking for a teacher –- someone to help me understand scripture -- then it makes sense that I should look for someone who teaches under the authority of the seat of Peter. This is why I am so comfortable in the Catholic Church, where the Pope occupies the seat of Peter, and that authority is passed to the bishops; by rights, they can pass the responsibility of teaching onto priests and they, in turn, can designate certain lay folks as teachers if they choose.

I am affirmed in this understanding in the Old Testament Book of Malichi, where in Chapter 2 the author describes the role of the priest: "For the lips of the priest are to keep knowledge, and instruction is to be sought from his mouth, because he is the messenger of the Lord of hosts."

Reading Matthew, I found even more reassurance. In Chapter 13, Jesus offers parables. At verses 24-30, He tells the parable of the wheat and the weeds growing together. He tells the parable to everyone but in versus 36-43, He explains it only to the disciples. So if I were living at the time of Christ and was in the crowd that heard Jesus preach this parable, to whom would I turn for an explanation? Would I turn to the guy next to me, who also heard the parable? Or would I seek an explanation from a disciple -- a believer like me, but someone who has a special place in the Christian community?

As I have come to understand the importance of teaching authority, I have been able to grow deeper in my faith. Magisterium is the Latin word for "teacher," and we Catholics use that word to describe the leaders of our church.

Acknowledging any authority requires a certain measure of humility by those who don't hold that authority. Pride –- the original sin -- can make that difficult. But I have come to believe it is essential. Without a teacher who can speak with true authority, I am like the Ethiopian before he met Philip. But with such a teacher, I can live in the truth.