Implementations, Inc.

Merging or Acquiring? Time to Get Your Ducks in a Row

Josh Peichoto — Mon, 28 Mar 2011 15:43:57 +0000

If ever there is a time to have your ducks in a row, it’s when you are planning an acquisition or a merger in which your company will be the dominant entity. But too often, management is focused on the money and the “play”, and doesn’t spend enough time preparing for how the new company will operate. As a result, post-merger integrations are typically painful. Chaos and reduced productivity erode the enthusiasm and momentum that were built during the planning stages and, despite everyone’s best efforts, this is all visible to customers who experience a dip in company performance – just as you were planning to impress them with great new things.

Fine tune your operation before an acquisition, not after.

Don’t wait until the merger or acquisition is upon you, or worse, until it is complete, to address operational issues that will impact the post-merger environment. Use the upcoming deal as a reason to do some of the operational refining you have been meaning to get around to. Haven’t been able to find the time? Imagine how much less time you will have after the merger.

An influx of new employees is a challenge even for companies with clear internal processes, defined operating procedures and established employee policies and benefits. How would you rate your organization in these areas? The incoming group will likely be skeptical and have mixed emotions about the merger. They will be judging you not just by what you do, but how you do it, and they will expect your operation to be at least as well run as their original company. Anything less will feel like a step back. You can either make a good first impression, or take months to win back their confidence.

The latitude inherent in unclear policies and procedures permits interpretation. This can be particularly problematic with new employees who will naturally be exploring the boundaries. Everyone wants to minimize change, and incoming personnel will be inclined to keep doing things they way they used to. Clear procedures provide a road map. A few specifics:

Define your primary processes. What are the steps in delivering your product or service? What is the sequence for moving a project through your company, for settling disputes with clients, or for tracking changes? Your current team may be getting these jobs done with a marginal level of documentation, but don’t underestimate how much of their ability to do so is because they are seasoned in your operation and able to fill in the missing pieces. Inconsistencies in your processes will likely emerge when they attempt to convey them to the incoming group.
Make sure your existing employees are clear on the mission, vision, and brand message of your company. If these things are well instilled into your culture and your current group feels a sense of ownership for them, they will be better front-line ambassadors for the incoming people.
Have clearly and consistently written job descriptions for every position in the organization. As with many aspects of operations, you may have fared just fine without them up to this point. But now with a newly merged organization, employees from both companies will be curious and anxious about the specifics of their roles.
Develop an employee manual. Despite what many owners of small and medium size companies believe, employees really do want solid clarification regarding policies and benefits. And the truth is, if you don’t have it written down and well documented, you probably haven’t really worked it all out – even if you think you have. An employee manual is an ideal way to put your best foot forward to incoming people – especially if they didn’t have one in their original company. Additionally, employees will be involved in refining many aspects of company operations during the early stages of integration, and having an employee manual establishes that certain policies such as work hours, holidays, vacations, expenses, and insurance benefits have been worked out and are not up for discussion during this initial period.

Your new size may mean new requirements

It’s not just about defining your existing processes. As companies grow, aspects of business operations that previously flew beneath their radar become essential. Things such as issues of legal compliance, benefits, more sophisticated employee retention strategies, human resource staffing, etc. all become relevant at different points in a company’s growth. Will your larger, post-merger company vault you into a category in which you have a new set of considerations?

Make sure you’re legally buttoned up

Mergers and acquisitions often involve layoffs, and employees who find themselves without a job may lash out. Avoid being lulled into thinking that the family environment you once enjoyed will necessarily continue in the combined company. Growth, change, and the perception that the merger was about owners and managers doing what was profitable for them may make employees look out for themselves with surprising fervor – particularly in this economy. Be sure you are in legal compliance and have properly documented such things as payment for overtime, criteria for salary exempt status, employee files, and pay scale parity.

Leave room for new thinking

This big push to be well organized prior to a merger or acquisition notwithstanding, remain open to input from the new company. In some cases, companies are acquired in part for their operational capabilities, but even if that’s not a standout asset of the business you are acquiring, surely they have developed some good ideas that can add value to the new combined entity. Plan an operational review to identify best practices from both companies. Overlooking the potential contribution from the company you are acquiring is a waste of important resources and the surest way to alienate the incoming people.

If these steps all sound a bit painful in their own right, they can be. That’s why so many companies put them off for years. But the payback will be significant – whatever effort you invest in putting your ducks in a row in advance of a merger or acquisition will ultimately take less time and energy than it would take to dig out from the inevitable post-merger chaos that will ensue without this planning.

Ross Mitchel is President of Implementations, Inc., a consulting practice that helps businesses improve their performance and profitability. Contact Ross at 401.632.4048 or ross@implementationsinc.com.

Paint an Accurate Picture for Prospective Employees

Josh Peichoto — Mon, 28 Mar 2011 15:38:02 +0000

When you think about the employees you have had that didn’t work out, how many of them were just fundamentally incompatible with your organization, and on a trajectory for that unfortunate ending right from the start? In order to hire people who are compatible with your organization and predisposed to succeed in your culture, you must paint an accurate picture of your company to prospective employees. This may sound obvious, but there are two reasons why this often doesn’t occur:

1. Companies “oversell” to prospective employees – particularly to highly qualified top talent.

Overselling anything often comes back to bite us, but perhaps never more than when overselling to prospective employees who quickly discover what it is really like to work for your company. If it’s different from what you portrayed, the trust that is fundamental to inspire employee loyalty is compromised before you even begin. The bigger the disparity between how you portray your organization and their actual experience, the less likely they are to apply their best efforts to your company.

2. You can’t accurately portray what you don’t understand.

Many organizations don’t really have a solid understanding of their own culture from the employees’ perspective. I have interviewed employees in dozens of companies, and in every case, management has been surprised by findings that emerge. In many cases, the issues were plain to see, but management wasn’t looking – or really listening, such as
during exit interviews with unhappy employees who are leaving.

Overcoming the challenge

I recently worked with a marketing agency that suffered from high employee turnover and a demoralized workforce as employees grew frustrated with the last-minute culture of the organization and the anxiety it created. The principals were concerned that they had a culture that didn’t foster happy, long term employees. But the solution in this case wasn’t to change their culture, but rather to do a better job of communicating their culture to prospective employees – to communicate the “pending reality” of what it would really be like to work there.

We scripted an explanation that the partners began to include in interviews with prospective employees. It went something like this: “You know, we have somewhat of a last-minute culture around here. We meet our commitments to our clients, but we frequently burn the midnight oil when we are coming up on a deadline and things can get pretty frenetic. We’ve managed to build a team that works well in this environment, so if this sounds like a place that would energize you – great, let’s talk further – but if not, well, it’s better that we bring it up now.”

This scenario is a good example of a situation in which both factors described above came into play. The partners hadn’t exactly been broadcasting their last-minute style, and they really didn’t understand the full impact it was having on creating an environment in which people aren’t motivated to do their best work. This small shift in approach was pivotal in helping them overcome their turnover and employee issues, and allowed prospective employees to sort themselves in or out based on a real understanding of the culture of the organization.

You may be thinking that it sounds crazy to “scare off” potential employees, but ultimately you won’t benefit from hiring people who don’t work out. Remember, hiring them – convincing someone to join your firm – is actually the easy part. The hard part is delivering on the promises you make (or imply) during your pre-hire presentation. When you consider the cost of hiring and rehiring, and the impact that underperformers and disgruntled employees have on the rest of the company, it’s best to let the incompatible ones get away – even the talented ones.

Five Steps to Effective Employee Orientations

Josh Peichoto — Mon, 28 Mar 2011 15:34:01 +0000

Fair or unfair, our opinions about people are often informed by first impressions. Likewise, an employee’s opinion about your firm will largely be shaped by what happens in their first few days there.

Many firms, even those with well established operating procedures, lack a comprehensive new employee orientation. Even fewer formalize the “ramp-up” process that explains day-to-day logistics and immerses the employee in the culture and spirit of the organization.

Most of us can recall an experience at a new job in which we were left to learn the ropes on our own, while feeling out of step with the organization. This experience can erode a new employee’s initial enthusiasm for the position. And it may seem like “bait and switch” if they were lavished with attention during the interview process and then abandoned once they became employees.

A good introduction to your firm is never more important than with top talent – your most valuable human assets. Most high performers prefer a well-run and well-organized environment as a platform from which to do their best work. Is the “first week experience” you are providing to new employees conveying a well-oiled machine or, well, something less?

The impact of ineffective orientations is not limited to the new employee. Others are affected as the new employee seeks help from coworkers at inopportune times, or a client doesn’t get a promised revision because the new employee was the last one in the office and nobody ever explained how to use FedEx.

To develop your own new employee orientation, start at the beginning with these basic steps:

Assemble a list

Make a list of all of the things that should be covered. This is the heart of the process so be sure it’s comprehensive. It should include everything from how to use the copier and request supplies, to CAD standards and document naming and filing. The list will likely be longer then you think. I have helped companies of all sizes with this initiative and the list is never less then thirty items or so. Divide the list into categories such as logistics, HR, security, technology, etc. Use your list to develop a checklist that will be provided to new employees on their first day. This can be an impressive, tone-setting piece in itself, especially if the employee is coming from a less organized environment.

Divide the orientation into sections

Each category of the checklist becomes a different section or module of the orientation, and can be conducted by different members of your firm as appropriate based on the content of that section.

Budget the time

Assume that a thorough orientation will take a half-day or more – this includes everything from completing their regulatory forms and reviewing health insurance, to setting up their workstation and outgoing voicemail message. Don’t expect much productivity from new employees on the first day. I have seen too many situations in which new employees are working on a project within an hour of their first day arrival – without even being introduced around. In a sense, these employees have had a valuable orientation of a different sort. In just the first hour they learned a lot about how the firm regards its employees.

Do lunch

Arrange for new employees to have lunch on their first day with their manager or a few coworkers. While they’re out, show them the local lunch spots and other neighborhood highpoints. Make sure this is planned in advance and doesn’t come off as an afterthought.

Follow up

There are two critical points at which managers should follow up with new employees. The first one is at the end of the first day. The hiring manager should be the one to kick off the orientation, but subsequent sections will likely be handled by others. This is fine, and a good division of labor, as long as the manager re-connects with the new employee at the end of the day. The second critical follow-up time is at the end of the first week. Managers should schedule this end-of-the-week meeting on the first day, so that new employees know that even if things get busy, there has been time set aside to address any issues that have come up.

If you do nothing more than these steps, you’ll be ahead of most firms in shaping new employees’ first impressions of your organizations. This is important for all new employees, but particularly so for your valuable, and more discerning, top talent.

The Work Should be Challenging; The Work Environment Shouldn’t Be

Josh Peichoto — Mon, 28 Mar 2011 15:30:09 +0000

Your organization’s top talent is at risk if the work isn’t challenging or the work environment is. If both are out of balance, assume your top people are working on their resumes.

The fast-paced environment of many companies is ripe for creating a culture in which the day-to-day work experience of employees is overlooked. The following five issues are common causes of employee dissatisfaction. Top talent is particularly susceptible because they often have higher standards and are confident they can go elsewhere. As you read through these, ask yourself how you rate in each of the areas, and who at your company might be stewing over one or more of them right now:

Acknowledge their contributions

Sound obvious? The truth is that many companies absorb their employee’s ideas without acknowledging them. If your employees were given an anonymous survey today – a few questions about getting credit and being acknowledged – how would you fare?

Shield them from abusive clients

Whoever came up with the now legendary expression, “The customer is always right” was not trying to retain top talent. And if you have been following it blindly, consider taking another look. Clients are often wrong – and never more so then when they are abusive to your employees or vent their frustrations on someone who doesn’t deserve it. Sticking up for an employee to a client is unquestionably one of the single most powerful ways to build employee loyalty.

Avoid giving top talent “filler” work on low-level tasks

This is a particularly insidious problem because management often doesn’t realize just how much of this is occurring. It very well may be more then the “just from time to time” that you think it is. An architect client of mine recently lost a senior designer for this very reason. The employee had mentioned it, but it never quite made it onto his manager’s radar – until he quit. The exit interview was the first time they really heard him.

Avoid work schedule surprises

Countless employees in many industries have told me that it’s not the overtime that bothers them – that’s just part of the game – but being surprised by it late afternoon when they have made other plans or are just about to leave makes them feel disregarded. I had one client who was well known for “dropping by” his employees’ desks late afternoon to alert them that they would need to stay late to help him plan for a morning meeting. This happened so frequently that people would cringe when they saw him coming. They gave it a name: the partner’s name was Wilson – and they called it “getting Wilsoned.”

Don’t tie them up in pointless meetings

Boring meetings are so prevalent it has become a cliché. A common belief is that it is efficient to bring everyone together for big project status meetings. These would be fine if they didn’t so often turn into a drawn out problem-solving sessions that were only interesting to those involved in the particular project being discussed. Nobody is happy in these meetings, but your top talent – who are often high performing “A” personality types – find them unbearable. Nothing makes them walk away shaking their head at the ineffectiveness of your company like wasting two hours in a useless meeting.

Some of these issues may seem impossible to address: meetings run long, things come up at the last minute, and sometimes abusive clients take a bite out of an employee and get away with it. All true, but as with other management goals, you don’t have to make these things perfect, just better. In this case, good enough so that your work environment isn’t unworkably challenging for your top people.

Getting the Most from Exit Interviews

Josh Peichoto — Mon, 28 Mar 2011 15:25:02 +0000

Learning that you are losing a valued employee is always disappointing. The first line of defense is to make your best effort to retain them, but once their decision to leave is final, move on – and turn your attention to conducting a well-run exit interview.

Exit interviews can be eye-opening since departing employees have less at stake and are often willing to provide some of the most honest and useful feedback you will ever receive.

You may think that you have people in your organization who tell it to you straight, but even the best, most loyal employees factor the potential exposure it could create for them when considering what to tell you. This is just a reality of the employee/employer dynamic, but that dynamic can shift significantly once someone has made up their mind to leave. Here are a few tips for getting the most from a departing employee:

Create the right environment

The useful candor described above doesn’t happen automatically. Facilitate the gathering of honest feedback by making the environment comfortable for the departing employee. Consider the location of the interview, who will be in attendance, and the timing. Off-site locations can be good, perhaps over lunch, and whenever possible, the departing employee’s immediate supervisor should not be at the meeting. Budget enough time and make sure the employee doesn’t feel rushed. If they don’t think that talking to them is a high priority for you, they will be less inclined to provide useful information.

Check your emotions at the door

You are there to learn, not for your final chance to get something off your chest or to make sure the employee understands your perspective on what went wrong. It no longer matters, and this type of confrontation is counterproductive to getting the most you can from the interview.

Make sure employees feel heard and appreciated during their exit interview

They may not have always felt that way while working for you, and a positive final experience in which they feel appreciated can create a lot of good will – including a willingness on their part to recommend your company to other prospective employees.

Be open to hearing things you may not like

Exit interviews aren’t for thin-skinned managers. You can hear nice things about yourself and your company anytime from the employees who still want to keep their jobs. Exit interviews can be about getting an uncomfortable perspective – and being able to hear it. Before you dismiss any of their input, remember that they probably aren’t completely wrong. What part is right and how can you use it?

Ask thoughtful questions

It’s easy to come to an exit interview under-prepared and open with something like, “So, what’s up?” but that won’t solicit much useful input. Rather, develop a list of questions for departing employees that address issues that are important to your company and its culture. Some questions can be worded to solicit a direct response, others just to get employees talking, but they should by no means be limited to why they are leaving. Here are a few suggestions:

What aspects of our operation do you think work particularly well?
What areas of our operation need work?
What was the most frustrating thing about working here?
Was there anything we could have done to keep you from leaving (this is an inquiry only; make it clear that you are not trying to convince them to stay)
What do you think our clients like best about us, what do they like least? (I particularly like this question. I have found that departing employees tend to be quite willing to share their take on the client’s point of view – which can be very valuable)
Was the job what we told you it would be when you initially interviewed for the position?
Was there anyone in particular who was a mentor or strong positive role model for you here? (Don’t miss the opportunity to pass this compliment along to the appropriate person – and their manager)
Was there anyone in particular who contributed to your leaving?
How challenged were you here?

Use the information

The information from even a well-conducted exit interview can get lost in the shuffle of the employee’s departure and the subsequent distraction of hiring a replacement. Overcome this by creating a system for reviewing and integrating information you receive. Start by routinely scheduling postmortem meetings to review actionable information that is collected during exit interviews.

The primary time to benefit from any employee’s contribution is, of course, while they are working for you, but the exit interview is an important final opportunity to benefit from their participation – and it should not be overlooked.

Credit Where Credit is Due—Don’t Overlook Employee Recognition

Josh Peichoto — Mon, 28 Mar 2011 15:07:37 +0000

From time to time, a company owner or senior manager will tell me that they’re not really the praising type – but that it’s okay because their employees just roll with it. Really? That’s not what I hear when I talk to the employees. Whenever a leader is stingy with credit and praise, the employees have a lot to say about it.

Even in well intended companies, the fast paced environment often results in praise and credit getting lost in the shuffle. And then there are companies that withhold praise because they don’t want to give employees an inflated sense of importance for fear they will demand more money or seek a better opportunity elsewhere. Faulty logic. Many more employees, particularly top performers, are lost to inadequate praise and acknowledgement then because management made their heads swell.

If your employees were asked to anonymously answer the following questions with a 1-5 rating system, how do you think you would fare? More to the point, why aren’t you getting all fives? Acknowledging your employees is easy, it doesn’t cost you anything, and it pays huge dividends.

My ideas are acknowledged as mine
My role in the success of projects is acknowledged
My role in the success of the company is acknowledged
I am complimented in front of clients
I am complimented in front of other employees
I feel appreciated

Here are a few ideas for integrating credit and acknowledgement into the culture and operation of your firm:

Get caught saying positive things about employees behind their backs

Use the basic office reality that “everyone tells everyone everything” to your advantage by using employees as positive examples of things when talking to other employees. It will get back to them, and there is something very powerful about employees knowing they are top-of-mind enough to be mentioned even when they aren’t there.

Credit employees in front of clients

Go out of your way to compliment employees to clients. Sometimes clients make it easy by providing an opening. If a client compliments some aspect of the work, that’s a perfect time to say. “Thank you – John here ran the team that pulled that together” and so on.

Applaud their accomplishments in company meetings

Take the time to publicly acknowledge employee achievements in company or department meetings. You don’t have to make a big deal out of it, but even a simple status report can be framed in terms of what people did to get you there. It’s easy to replace “Our big meeting with the such and such client went well” with “Thanks to the efforts of Mary and her team…”

Ask them to mentor junior employees or teach things in which they are proficient

Asking someone to teach or mentor is essentially saying that you like their approach or skill enough that you would like them to influence others, and it is, perhaps, the ultimate compliment. There are those people who aren’t comfortable in the teaching or mentoring role, so obviously this isn’t appropriate for everyone. But the people who respond well to it tend to really recognize the level of responsibly that goes along with such a request and give it their best effort.

Say “thank you”

Sound obvious? It’s widely underused in companies of all types. ”Nice job pulling that presentation together for the meeting” is good. “Nice job – thank you for the extra effort it took to get it done on such short notice” is golden.

Employee satisfaction studies routinely reveal that having a sense of contribution and making a difference on the job ranks among the top employee motivators – right up there with getting paid. Why not capitalize on this aspect of the human condition?