ROI - New Hires
Average Employee Salary: $200,000
The Number of New Hires in a given year: 1
Over the course of 5 years hiring 1 employee will produce a $154,000 gain in productivity, and the gain in productivity for EACH employee per year would be $30,800.00
ROI - New Hires
Average Employee Salary: $150,000
The Number of New Hires in a given year: 1
Over the course of 5 years hiring 1 employee will produce a $115,500 gain in productivity, and the gain in productivity for EACH employee per year would be $23,100.00
ROI - New Hires
Average Employee Salary: $50,000
The Number of New Hires in a given year: 50
Over the course of 5 years hiring 1 employee will produce a $1,925,000 gain in productivity, and the gain in productivity for EACH employee per year would be $77,000.00
Tuesday, December 15, 2009
Monday, November 9, 2009
Wednesday, November 4, 2009
Stubborn Reliance on Intuition and Subjectivity in Employee Selection
SCOTT HIGHHOUSE
Bowling Green State University
The focus of this article is on implicit beliefs that inhibit adoption of selection decision aids (e.g., paper-and-pencil tests, structured interviews, mechanical combination of predictors). Understanding these beliefs is just as important as understanding organizational constraints to the adoption of selection technologies and may be more useful for informing the design of successful interventions. One of these is the implicit belief that it is theoretically possible to achieve near-perfect precision in predicting performance on the job. That is, people have an inherent resistance to analytical approaches to selection because they fail to view selection as probabilistic and subject to error. Another is the implicit belief that prediction of human behavior is improved through experience. This myth of expertise results in an overreliance on intuition and a reluctance to undermine one’s own credibility by using a selection decision aid.
Perhaps the greatest technological achievement in industrial and organizational (I–O) psychology over the past 100 years is the development of decision aids (e.g., paper and-pencil tests, structured interviews, mechanical combination of predictors) that substantially reduce error in the prediction of employee performance (Schmidt & Hunter, 1998). Arguably, the greatest failure of I–O psychology has been the inability to convince employers to use them. A little over 10 years ago, Terpstra (1996) sampled 201 human resources (HR) executives about the perceived effectiveness of various selection methods. As the left side of Figure 1 shows, they considered the traditional unstructured interview more effective than any of the paper-and-pencil assessment procedures.
Inspection of actual effectiveness of these procedures, however, shows that paper and-pencil tests commonly outperform unstructured interviews. For example, the right side of Figure 1 shows the results of a meta-analysis conducted on the actual effectiveness of these same procedures for predicting performance in sales (Vinchur Schippmann, Switzer, & Roth, 1998). Use of any one of the paper-and-pencil tests alone outperforms the unstructured interview—a procedure that is presumed to assess ability, personality, and aptitude concurrently. Although one might argue that these data merely reflect a lack of knowledge about effective practice, there is considerable evidence that employers simply do not believe that the research is relevant to their own situation (Colbert, Rynes, & Brown, 2005; Johns, 1993; Muchinsky, 2004; Terpstra & Rozelle, 1997; Whyte & Latham, 1997). For example, Rynes, Colbert, and Brown (2002) found that HR professionals were well aware of the limitations of the unstructured interview. Similarly, one of my students conducted a yet-unpublished survey of HR professionals (n ¼ 206) about their views of selection practice. His data indicated that the HR professionals agreed, by a factor of more than 3 to 1, that using tests was an effective way to evaluate a candidate’s suitability and that tests that assess specific traits are effective for hiring employees. At the same time, however, these same professionals agreed, by more than 3 to 1, that you can learn more from an informal discussion with job candidates and that you can ‘‘read between the lines’’ to detect whether someone is suitable to hire. This apparent conflict between knowledge and belief seems loosely analogous to the common practice of preferring brand name cold remedies to store brand remedies containing the same ingredients. People know that the store brands are identical, but they do not trust them for their own colds. Some might argue that the tide is turning.
Much has been written on the merits of evidence- based management (Pfeffer & Sutton, 2006; Rousseau, 2006). This approach, much like evidence-based medicine, relies on the best available scientific evidence to make decisions. At the core of this movement is ‘‘analytics’’ or data-based decision making (e.g., Ayers, 2007). Discussions of number crunching in the arena of personnel selection, however, are almost always limited to anecdotes from professional sports (e.g., Davenport, 2006). Competing with the analytical point of view are books like Malcolm Gladwell’s (2005) blink: The Power of Thinking Without Thinking and Gerd Gigerenzer’s (2007) Gut Feelings: The Intelligence of the Unconscious, which extol the virtues of intuitive decision making. Although the assertions of these authors have little relevance for the prediction of human performance, the popularity of their work likely reinforces the common belief that good hiring is a matter of experience and intuition. Implicit Beliefs My colleagues and I (Lievens, Highhouse, & DeCorte, 2005) conducted a policy-capturing study of the decision processes of retail managers making hypothetical hiring decisions.
We found that the managers placed more emphasis on competencies assessed by unstructured interviews than on competencies measured by tests, regardless of what those competencies were. They placed more emphasis, for instance, on Extraversion than on general mental ability when Extraversion was assessed using an unstructured interview (and general mental ability was assessed using a paper-and-pencil test). The opposite was found when Extraversion was assessed using a paper-and-pencil test and general mental ability was assessed using an unstructured interview! Clearly, these managers believed that good old-fashioned ‘‘horse sense’’ was needed to accurately size up applicants (see Phelan & Smith, 1958).
The reluctance of employers to use analytical selection procedures is at least
partially a reflection of broader misconceptions that the general public has about how to go about assessing and selecting people for jobs. Consider two high-profile policy opinions on testing and selection in the United States.
In 1990, the National Commission on Testing and Public Policy (1990) issued eight recommendations for testing in schools and the workplace. Among those was the statement as follows:
‘‘Test scores are imperfect measures and should not be used alone to make
important decisions about individuals’’ (National Commission on Testing and Public Policy, 1990, p. 30). The commission’s chairman, Bernard Gifford of Apple Computer, commented, ‘‘We just believe that under no circumstances should individuals be denied a job or college admission exclusively based on test scores’’ (‘‘Panel Criticizes Standard Testing,’’ 1990). In the landmark Supreme Court decision on affirmative action at the Universityof Michigan, Justice Rehnquist concluded that consideration of race as a factor in student admission is acceptable—but it must be done at the individual level, with each applicant considered holistically. In concurrence, Justice O’Connor commented, ‘‘But the current [student selection] system, as I understand it, is a nonindividualized, mechanical one. As a result, I join the Court’s opinion . . . .’’ (Gratz v. Bollinger, 2003, Concurrence 1). Although these positions sound reasonable on the surface, they represent fundamentally flawed assumptions. No one disputes that test scores are imperfect measures, but the testing commission implies that combining them with something else will correct the imperfections (rather than exacerbate them). The court’s majority opinion in Gratz suggests that individualized methods of selection are more fair and reliable than impersonal ‘‘mechanical’’ ones. Both of these examples illustrate two implicit beliefs about employee selection: (1) people believe that it is possible to achieve nearperfect precision in the prediction of employee success, and (2) people believe that there is such a thing as intuitive expertise in the prediction of human behavior. These implicit beliefs exert their influence on policy and practice, even though they may not be immediately accessible (Kahneman, 2003). I acknowledge that there are a number of contextual reasons for resistance to selection technologies, including organizational politics, habit, and culture, along with the existing legal climate (e.g., Johns, 1993; Muchinsky, 2004). However, whereas contextual issues are often situation specific, these are universal ‘‘truths’’ about people. As such, understanding and studying them provides hope for overcoming user resistance to selection decision aids. Irreducible Unpredictability I recently came across an article in a popular trade magazine for executives, purportedly summarizing the state of the science on executive assessment (Sindelar, 2002). I was struck by a statement made by the author: ‘‘For many top-level positions, technical competence accounts for only 20 percent of a successful alignment. Psychological factors account for the rest’’ (pp. 13–14).1 Whether intentional or not, the author was clearly implying what is shown on the top of Figure 2—that 80% of the variance in executive success can be explained by psychological factors (presumably temperament or personality). Reality, however, is much more like the chart on the bottom of Figure 2—showing that most of the variance in executive success is simply not predictable prior to employment. The business of assessment and selection involves considerable irreducible unpredictability; yet, many seem to believe that all failures in prediction are because of mistakes in the assessment process. Put another way, people seem to believe that, as long as the applicant is the right person for the job and the applicant is accurately assessed, success is certain. The ‘‘validity ceiling’’ has been a continually vexing problem for I–O psychology (see Campbell,1990;Rundquist, 1969). Enormous resources and effort are focused on the quixotic quest for new and better predictors that will explain more and more variance in performance.
This represents a refusal, by knowledgeable people, to recognize that many determinants of performance are not knowable at the time of hire. The notion that it is still possible to achieve large gains in the prediction of employee success reflects a failure to accept that there is no such thing as perfect prediction in this domain. Campbell noted that our poor professional self-esteem is based on an unrealistic notion of what can be achieved in the prediction of employee success. Campbell wrote: ‘‘No external source imposed this [validity ceiling] standard on the discipline or even argued that there should be a standard at all’’ (p. 689).
Recall the earlier comment by the national testing commission, cautioning
that tests are ‘‘imperfect’’ and must be supplemented with other things. It is remarkably similar to Viteles’ (1925) observation that ‘‘objective scores of vocational tests are at best uncertain diagnostic criteria’’ (p. 132). This early pioneer of I–O was arguing that standardized methods of assessment could only fill the proverbial glass halfway. Intuitive judgment was needed to fill it the rest of the way. Viteles wrote: ‘‘It is the opinion of the writer that in the cause of greater scientific accuracy in vocational selection in industry the statistical point of view must be supplemented by a clinical point of view’’ (p. 134). Countering this position was Freyd (1926), who cautioned against allowing intuition to creep into hiring decisions. Freyd, who represented the analytical viewpoint of selection, argued ‘‘allowing selection to be influenced by personal interpretations with their unavoidable prejudices instead of relying upon objective measures gives even less consideration to the well-being and interest of the individual worker’’ (p. 354).
History proved Freyd prescient. Table 1 shows the results of the earliest study investigating the relative effectiveness of standardized procedures alone versus supplementing those procedures with intuitive judgment (Sarbin, 1943). As you can see, academic achievement was better predicted by the standardized scores alone than by the scores plus clinical judgment.
The notion that analysis outperforms intuition in the prediction of human behavior is among the most well-established findings in the behavioral sciences (Grove & Meehl, 1994; Grove, Zald, Lebow, Snitz, &Nelson, 2000)
Table 1. Sarbin’s (1943)
Investigation of Two Methods for Predicting Success of University
of Minnesota Undergraduates Admitted in 1939
Predictor composite Correlation with criterion (r)
High school rank 1 college aptitude test .45
High school rank 1 college aptitude test 1
intuitive judgment of counselors .35
Why, therefore, does the intuitive perspective remain so appealing? Einhorn (1986) observed that a crucial distinction between the intuitive and the analytical approaches to human prediction is the worldview of the people making the judgments. According to Einhorn, the intuitive approach reflects a deterministic worldview, one that rejects the idea that the future is inherently probabilistic. This is contrasted with the analytical worldview, which accepts uncertainty as inevitable. Consider the San Diego Chargers professional football team who, despite having a regular season record of 14-2 in 2006, fired its head coach following a play-off
loss. The fired coach had a reputation for leading teams to successful regular season records, only to lose the big games. The Chargers organization evidently failed to consider that the contribution of uncertainty to a play-off outcome is much greater than to a 16-game season record. Abelson (1985) found that knowledgeable baseball fans overestimated by a factor of 75 he contribution of skill (vs. chance) to the likelihood of a major league baseball player getting a hit in a given turn at bat. Intuitive approaches to employee selection make the errors in selection ambiguous.
Analytical approaches make them part of the process—hence, visible. Considerable research suggests that ambiguity about the likelihood of an outcome (e.g., the operation has an unknown chance of success) encourages more optimism than a low known probability (e.g., the operation has a 20% chance of success; see Kuhn, 1997). There is little room for optimism when a composite of predictors is known to leave 75%of the variance unexplained. This may explainwhy selection procedures that are difficult to evaluate (e.g., feelings about ‘‘fit’’) are so attractive. Einhorn (1986) noted, however, that one must be willing to accept error to make less error.
Myth of Expertise
I have argued that one of the reasons that people have an inherent resistance to analytical
approaches to hiring is that they fail to view selection in probabilistic terms. A related but different reason for employer reticence to use selection decision aids is that most people believe in the myth of selection expertise. By this I mean the belief that one can become skilled in making intuitive judgments about a candidate’s likelihood of success. This is reflected in the survey responses of the HR professionals who believed in ‘‘reading between the lines’’ to size up job candidates. It is also evidenced in the phenomenal growth of the professional recruiter
or ‘‘headhunter’’ profession (Finlay & Coverdill, 1999) and the perseverance of the
holistic approach to managerial assessment (Highhouse, 2002). Despite this widespread belief in intuitive expertise, the data suggest that it is a myth. For example, the considerable research on
predicting human behavior per se shows that experience does not improve predictions made by clinicians, social workers, parole boards, judges, auditors, admission committees, marketers, and business planners (Camerer & Johnson, 1991; Dawes, Faust, & Meehl, 1989; Grove et al., 2000; Sherden, 1998). Although it is commonly accepted that some (employment) interviewers are
better than others, research on variance in interviewer validity suggests that differences are due entirely to sampling error (Pulakos, Schmitt, Whitney, & Smith, 1996). Existing evidence suggests that the interrater reliability of the traditional (unstructured) interview is so low that, even with a perfectly reliable and valid criterion, interview-based judgments could never account for more than 10% of the variance in job performance (Conway, Jako, & Goodman, 1995).3 This empirical evidence is troubling for a procedure that is supposed to simultaneously take into account ability, motivation, and person–organization fit. Keep in mind also that these findings are based on interviews that had ratings associated with the interviewers’ judgments.
Thus, the unstructured interviews subjected to meta-analyses are almost certainly unusual and on the high end of rigor. The data do not paint a sanguine picture of intuitive judgment in the hiring process.
There are commonly two scholarly rebuttals to the arguments against prediction expertise. I will consider these in turn. One response to the limitations of intuitive approaches to selection is to focus on the ability of experts to spot idiosyncrasies in a candidate’s profile (Jeanneret & Silzer,
1998). Meehl (1954) noted that one limitation of analytical formulas was their inability to incorporate ‘‘broken-leg’’ cues. The term comes from an anecdotal example in which one is trying to predict whether or not a person will go to the movie on a particular day. A mechanical formula might take into account things like the nature of the movie (e.g., less likely to go to romantic comedy) or the weather (e.g., more likely to go on a rainy day). The mechanical procedure would not take into account, however, an event that is extremely rare (e.g., the person has a broken leg), and thus, the mechanical prediction will not be as accurate as a prediction based on a simple intuitive observation. Amechanical approach to selection would not, the logic goes, consider idiosyncratic characteristics of any particular job candidate—a seasoned expert would. Another common response to criticisms of intuitive selection is to focus on the expert’s ability to interpret configurations of traits (Prien, Schippmann, & Prien, 2003). The notion behind this argument is that each candidate is unique, and one must consider
each piece of information about the candidate in light of all the other pieces of information. In other words, assessing patterns of traits is more accurate than assessing traits individually. For example, Prien et al. noted that executive assessment requires a ‘‘dynamic interpretation’’ of applicant data, one that takes into account interactions between test scores and other observations (p. 125). This view is reinforced by leadership theorists who assert that leader characteristics exhibit complex configural relations with leadership outcomes (e.g., Zaccaro, 2007). Even if we do accept that decision makers incorporate broken-leg cues and configurations of traits, existing evidence suggests that these things account for negligible variance in the predicted outcome. For example, Dawes (1971) modeled admission decisions of a four-person graduate admissions committee using a bootstrapping procedure. This is shown in Figure 3. Dawes found that the model (i.e., paramorphic representation) of the admission committee’s judgments outperformed the committee itself. More relevant to this discussion, however, was the fact that, whereas a linear combination of the expert cues correlated significantly (r ¼ .25) with the criterion, the residual—which included configural judgments, broken-leg cues, and error—was inconsequential (r ¼ .01). Camerer and Johnson (1991) noted
that, despite accounting for a large portion of the error term, broken-leg cues and configural judgments consistently provide little incremental gain in prediction—even for so called experts. The problem with broken-leg cues is that people rely too much on them because they present compelling stories. The tendency to be seduced by detailed stories causes people to ignore relevant information and to violate simple rules of logic (see Highhouse, 1997, 2001). Also, as one reviewer noted, broken legs are themselves constructs that can and should be measured reliably. The problem with trait configurations, on the other hand, is that they require feats of information integration that contradict current understanding of human cognitive limitations (Ruscio, 2003). And true real-world examples of predictive interactions between job applicant characteristics are difficult to find (e.g., Sackett, Gruys, & Ellingson, 1998). Hastie and Dawes (2001) distilled from the vast literature on prediction ‘‘experts’’ the following stylized facts:
They rely on few pieces of information.
They lack insight into how they arrive at predictions.
They exhibit poor interjudge agreement.
They become more confident in their accuracy when irrelevant information
is presented. The obvious remedy to the limitations of expertise is to structure expert intuition and mechanically combine it with other decision aids, such as paper-and-pencil inventories. However, there would likely be considerable resistance to structuring or mechanizing the judgment process (e.g., Lievens et al., 2005; van der Zee, Bakker, & Bakker, 2002). Most people believe that aspects of an applicant’s character are far too complex to be assessed by scores, ratings, and formulas. An example of the irrationality of this bias against decision aids is the contempt with which most college football fans and commentators hold the Bowl Championship Series, which is a mechanical formula that incorporates expert ratings (e.g., coaches
poll) and computer rankings (e.g., wins and losses of opponents) into an overall ranking of football teams. The nature of the complaints (‘‘unplug the computers’’) suggests that people do not want mechanical formulas making their expert decisions about who attends bowl games. A University of Oregon coach infamously declared: ‘‘I liken the BCS to a bad disease, like cancer’’ (Vondersmith, 2001). Another example of this bias against decision aids is the considerable patient resistance to diagnostic decision aids (Arkes, Shaffer, & Medow, 2007). Arkes and his colleagues found that physicians who made computer-based diagnoses of ankle injuries were perceived less competent, professional, and thorough than physicians who made diagnoses without any aids. Indeed, the idea that (with the appropriate data) a physician might not even need to meet or interact with a patient to understand his or her personal health issues would be a hard sell to most people. Physicians, aware of this lay bias against ‘‘cookbook medicine,’’ grossly underutilize these valuable technologies in practice (Kaplan, 2001).4 Hastie and Dawes (2001) noted that relying on Predicted Outcome Expert Predictions Model of Expert Residuals expertise is more socially acceptable than relying on test scores or formulas. Research on medical decision making supports this contention. It is no wonder, therefore, that HR practitioners would be reluctant to undermine their status by administering a paper-and-pencil test, structuring an employment interview, or plugging ratings into a mechanical formula.
Concluding Remarks
We know quite a bit about applicant reactions to hiring methods (Hausknecht, Day, & Thomas, 2004), but very little attention has been given to user resistance to selection decision aids. Campbell (1990) noted: ‘‘We still do not know much about how to best communicate selection results to people outside the [I-O] profession’’ (p. 704). Fifteen years later, Anderson (2005) lamented: ‘‘In fact, the whole area of practitioner beliefs about selection methods and processes is a gargantuan one which research has made little or no inroads into’’ (p. 19). I have inferred from the general psychological literature, and the specific selection literature, two implicit beliefs that likely inhibit the widespread acceptance of selection technologies. These include the belief that it is possible to achieve near-perfect precision in predicting performance on the job and the belief that intuitive prediction can be improved by experience. People trust that the complex characteristics of applicants can be best assessed by a sensitive, equally complex human being. This does not stand up to scientific scrutiny, and I–O psychologists need to begin focusing their efforts on understanding how to navigate these waters. We can begin by drawing from the judgment and decision making and human factors literatures on how to better communicate uncertainty and error.We also need to learn how to better calibrate user expectations. Consider Muchinsky’s (2004) experience in communicating a .50 validity coefficient for a mechanical comprehension test: my pleasure regarding the findings was highly apparent to the client organization. It was at this point a senior company official said to me, ‘‘I fail to see the basis for your enthusiasm.’’ (p. 194) Research on probability neglect (Sunstein, 2002) suggests that people make little distinction between probabilities that they consider small. In addition, research on evaluability (Hsee, 1996) has shown that most attributes cannot be evaluated without appropriate context. Perhaps if Muchinsky (2004) had compared his .50 to flipping a coin (.00) or to an unstructured interview (.20), management would have been more impressed. Perhaps management would have been more impressed by a common language effect size indicator or by an expectancy chart. We simply do not have the research to guide these communication decisions. The traditional unstructured interview has remained the most popular and widely used selection procedure for over 100 years (Buckley, Norris, & Wiese, 2000). This is despite the fact that, during this same period, there have been significant advancements in the development of selection decision aids.
Guion (1965) argued that the waste of human resources caused by poor selection procedures should pain the professional conscience of I–O psychologists. It is true that people are not very predictable, but selection decision aids help.
Tuesday, November 3, 2009
Employee Engagement
A Brief Message From Peter Capodice...
Over the past decade, employers have scrambled to find new ways to stand out in the eyes of the top talent who possess the most in-demand skills. Many organizations optimized their strategies and embraced employer branding and employee engagement to wage the so-called War for Talent, the struggle to find and retain the best employees as a catalyst for improved business performance.
Simply put, employer brand is “the image of your organization as a ‘great place to work’ in the mind of current employees and key stakeholders in the external market (active and passive candidates, clients, customers, and other key stakeholders).” The primary concerns are the attraction, engagement, and retention initiatives targeted at enhancing your company’s employer brand.
1. Most often, employer branding is recognized as appearances on the “Best Places to Work” lists that appear in Fortune magazine or in local business journals around the country. Are employees proud to work at a company? Do candidates clamor to apply? If so, the company has a strong employer brand. A strong employer brand also has a significant bottom-line impact. Carol Parish at The Brand Union, a global branding organization, pointed out that companies that are most successful with employer brand also outperform the Standard & Poor index. “It’s a lesser known fact that companies with a high rating from both the consumers and their employees double that return. It’s extraordinary. If you can get the employees on board, what amazing business results you can have.”
2. Although employee engagement is a builder of an employer brand, many organizations approach brand building the wrong way. Most try to build their employer brand as they would a consumer brand – urging executives and managers to “live the brand.” However, branding can’t be exclusively a topdown initiative. In many ways, employee branding must start with employee engagement at the team level. For organizations rebuilding employer brands in the wake of the current economic slowdown,
work should begin with repairing employee engagement. Improved employee engagement must begin at the team level.
Employer Branding Has Suffered in the Current Economy
The economic conditions over the past 18 months have dramatically changed the business landscape, and organizations have seen both their employer brands and employee morale erode as a result of layoffs, salary freezes, reduced benefits, lack of job security and increased anxiety.
This deterioration can in large part be attributed to a loss of employee engagement, simply defined as an employee’s emotional connection to an organization that inspires greater discretionary effort.
Watching friends lose jobs, seeing pay and benefits reduced and worrying about keeping the job itself will diminish the effectiveness of even the most enthusiastic employee.
Research from the Corporate Leadership Council, which has surveyed over 500,000 employees on their employee engagement levels since 2004, supports this. Before the downturn, roughly 1 in 10 employees was highly disengaged, that number increased to 1 in 5 at the end of 2008, and the
preliminary data from the first quarter of 2009 shows that the number has increased to 1 in 3.3
Businesses feel that loss of engagement in decreased earnings. Research shows that organizations with more than four engaged employees for every one actively disengaged employee saw 2.6 times more growth in earnings per share than organizations with a ratio of slightly less than one engaged
worker for every one actively disengaged worker.4 In the past, Gallup estimated the cost of employee engagement on the U.S. workforce to be more than $300 billion.5 In the current economy, that figure could be much higher.
With this loss of engagement, employees are less able to find work stimulating or be the type of brand ambassador that would recommend the business to candidates or customers. What’s worse, former employees are hard-pressed to say anything nice about a company that let them go, no matter how much severance was paid or how well the offboarding process was completed.
To compound the problem, businesses that are letting people go are frequently hiring at the same time to bring in employees with key skills. The War for Talent has not abated in spite of the downturn, and many of the most in-demand workers are still hard to find. As the Aberdeen Group
explained in its April 2009 report on Employer Branding, executives they surveyed believe that increasing competition for top talent and a shortage of key skills in the marketplace are the top two pressures they face today.
Unfortunately, when organizations need a strong employment brands the most, most brands are suffering dramatically.
Trying to Fix the Problem, but Pursuing the Wrong Approach
In the words of advertising legend David Ogilvy, nothing will kill your reputation in the labor market faster than doing a great job advertising a work experience you don’t deliver. Organizations that promote themselves as a Best Place to Work when they’re anything but end up with an angry, cynical workforce that is only too happy to counteract their employer’s paid advertising with more credible word of mouth advertising.6 In a world of social networking, this negative buzz can spread like wildfire over LinkedIn, Twitter and Facebook.
The market response to deteriorated employer branding and weakened employee engagement has been led by organizations that offer programs that aim to rebuild what has been lost. Most employer branding programs follow a four-step process:
• Assess the current brand: Use a survey or questionnaire to understand how employees perceive the organization and how to focus the organization’s resources.
• Create a message: Develop a message platform that inspires employees and explains why you are a great company.
• Communicate the message repeatedly: Through every possible online and offline channel, reiterate branding messages as often as possible.
• Measure changes constantly for continuous improvement: Conduct more surveys and assessments to see if messaging is having an impact.
The problem is that this top-down approach is based on traditional consumer branding that does not take into account the different nature of the relationship between the employee and the employer.
That relationship – the source of any employee engagement – is dramatically different from the relationship a person has with a consumer product.
Research shows that the main driver of a good employer brand is employee engagement, but executives cannot legislate culture changes with mission or vision statements or through values clarification. Engagement must grow organically, one workgroup at a time. As two of the leading
experts in employment engagement explained in 2007, “Too many organizations build management models on the assumption that managers and leaders have the power in the company/employee relationship, but that’s no longer always the case. The answer is employee engagement or the ability to capture the heads, hearts, and souls of your employees to instill an intrinsic desire and passion for excellence. Engaged employees want their organization to succeed because they feel connected emotionally, socially, and even spiritually to its mission, vision, and purpose.”
However, many organizations still treat employee engagement as an employee communication issue or a management issue. Instead, most would be better served by pursuing a grassroots solution to the problem.
Engagement Must Be Fixed at the Team Level
You know the saying, “Employees don’t leave companies, they leave managers.” Employees, and particularly the newer generation of employees, care not only about opportunities for career development and financial compensation, they also want good relationships with their team members
and supervisors. Employees want to be respected and treated as individuals with unique needs and desires. The only way to address these issues is at the team level.
Employees are more likely to improve their performance when they are engaged not only with the work they do, but also with their co-workers, managers and any others that they interact with day in and day out. According to 2005 Towers Perrin research, 84 percent of highly engaged employees believe they can positively impact the quality of their organization’s products, compared with only 31 percent of those who are disengaged. However, employers must get them to believe it. That belief
must occur at the team level.
Improved relationships among peers and between supervisors and subordinates have a significant impact on employee engagement, which in turn affects performance. Work relationships thrive in an environment in which personal communication and work-style preferences are understood,
accommodated and respected.
Because engagement is built on trust, re-engagement must be built on overcoming mistrust. Awareness of behaviors that support employees’ feelings of trust can help overcome such dysfunctions as:
• Quiet resistance or passive-aggressive behaviors: Resentment can build among employees in organizations that have experienced layoffs or salary reductions. Rebuilding open, honest and productive communication allows teams to deal with bottled-up emotions in an up-front and non-personalized way.
• Feelings such as lack of belonging or solidarity: Employees who watch colleagues lose jobs and wonder if their job will be next may become detached from their co-workers and the larger organization. Organizations can’t pretend that nothing happened. Managers must find a way to acknowledge the past and learn how to draw these employees out of their detachment.
• Low energy levels experienced in the workplace or in team activities: Resentment and detachment can leave employees indifferent and result in them “just going through the motions” each day. To reignite employees’ passion, managers must show some empathy and not pretend that cuts and reductions never happened.
However, awareness of these behaviors is just a start. What’s needed is the organizational commitment to change behaviors that impede collaboration and productivity, change orientation and accountability, and encourage behaviors that support the positive elements of job performance. To
overcome workplace dysfunctions and reignite employees’ passion of their work through effective collaboration with their employees, managers must:
• Reaffirm structures: Managers need to know how employees want to work and provide the necessary structure. Do they need a very hands-on or hands-off work environment? Are teams expected to deliver the same amount of work as before layoffs with fewer people?
• Reestablish accountability: After staff reductions, accountability gaps may exist. Are managers and employees clear about who is accountable for what? Is everyone clear about who is accountable to customers?
• Rebuild relationships: After watching managers and colleagues laid off, many employees have been reluctant to make the emotional investment in extra effort. As the economy improves, managers will still need to rebuild trusting relationships with employees. Discussing issues in an objective, non-politicized and respectful manner is one step toward rebuilding this trust.
To begin taking these steps, managers need a tool to provide insight into the workplace needs and personal communication and work-style preferences of their employees. The Birkman Method is the tool they need.
Conclusion: The Birkman Method® is the Engagement Solution
The implementation of The Birkman Method has proven to be an effective tool to improve team performance. By analyzing and describing individual needs, The Birkman Method is a source of initiatives to drive and motivate workplace behavior that increases employee engagement and strengthens your employment brand.
Employee needs are the expectations they have about how relationships and situations should occur. When needs are met, they drive behavior in positive and productive directions. Unmet needs, meanwhile, can create potentially negative and less-than-productive behavior. The Birkman Method integrates needs measurements to assess the occupational interests that can shape careers and improve the fit of a person’s job role. As a result, The Birkman Method does not describe an individual in a vacuum, but rather in the complex, dynamic reality of the workplace.
The unique construction and comparative database of The Birkman Method provides powerful insight into the factors that specifically drive a person’s behavior, creating greater choice and more self-responsibility. It accurately measures social behaviors, underlying expectations of interpersonal and task actions, potential stress reactions to unmet expectations, occupational preferences and organizational strengths.
Friday, July 31, 2009
Business Intelligence or Not!
It has been quite a year for scams, cheats, fraudsters, embezzlers, cover ups, poor judgment etc.
This behavior is predictable - Business Intelligence can set you Free!
Moving forward businesses have got to get serious about collecting, tracking and understanding the behaviors of leaders within their respective organizations. Equity groups need to wake up and smell coffee. Business Intelligence mandates that you look beyond the P&L and comprehend the core of the business -- the leaders within. Yes experience is important, but if you’re looking to create a world class business, look at the behavioral makeup of your leaders in conjunction with experience.
By collecting and measuring Behavior Styles, Attitudes, Stress Profiles, Motivational Needs, Relational Needs, Personal values, Interests, Work Requirements, work experience etc. You can be relatively certain of your outcome - good or bad. You have the ability to assemble more effective teams, coach individuals to desired results, develop superstars and hire individuals that will strengthen the team. There is no need to be hopeful an individual will perform because positive individual and team performance can be identified and predicted.
Capodice & Associates has achieved unprecedented results for both small and large organizations who have implemented this process. The result has generated solid returns in sales, profits and individual and team performance.For additional information contact Peter Capodice at 941-906-1990 or email peter@capodice.com
Tuesday, July 28, 2009
Career Transition…
Over the past few months as you might image, we have received an inconceivable number of emails and phone calls regarding career transition advice that we can hardly keep up.
Help is on the way
To support the many companies and individuals who are seeking high quality sound advice in Career Transition, in addition to understanding individual strengths, motivational needs, stress behaviors and careers that hold the greatest potential for individuals, Capodice & Associates has teamed up with the world’s leader in career assessment counseling and individual development. By doing so, Capodice & Associates offers client companies and individuals an alternative to the high cost of out placement services (generally $10,000 +++ per person).
What it does.
After completing the assessment questionnaire backed by over 50 years of research and application, the data is compiled and an individual career report is generated.
The individual career report gives valuable insight that will assist individuals in understanding their strengths, motivational needs, stress behaviors, how you lead people and work with others. It identifies occupational groups and ideal work environments that are the best fit for the individual.
Having this information will help the individual create a more powerful resume, craft a more effective “elevator” speech and develop useful interview and negotiation strategies. All leading to greater individual productivity and personal fulfillment.Sample Report Click here for a sample report
Who is this for:
Companies who want to support employees who will be transitioning away from their current organization.
Individuals who want to understand more about themselves and the careers that hold the greatest potential both now and in the future.
Cost: $299.95 per person.
Contact:Peter Capodice at 941-906-1990peter@capodice.com
Mile High Resumes…
If you are experiencing the ever growing stack of resumes and the lack of time and personnel to wade through…You’re Not Alone!!!.
Although hiring has not been as robust as in the past, there are still critical positions that remain open. In many cases for several months or greater. This may seem odd even with the talent available and the increased opportunity to poach from competitors, but companies are beginning to realize the importance of strategic hiring and the time commitment to do it right.
With the volume of resumes flowing through the door, it could take weeks to sort through the candidate pool. Time decision makers don’t have. Even with the time investment, hiring managers will not have the knowledge as to the true reason the candidate separated from their prior company, if they would be a fit, if they have the behavioral competencies and passion necessary for success, if the potential for conflict will jeopardize the existing team’s performance, etc… The result of these unknowns is indecision with a critical position remaining unfilled in a time when preparing for the economic recovery is prudent. This scenario is playing out throughout our industry as you read this newsletter.
To eliminate this uncertainty in the hiring process Capodice & Associates has developed the following:
A Comprehensive Background check detailing an individuals employment, credit, educational and criminal history.
An organizational matrix identifying the strengths and weakness of the team.
The core competencies and passions matrix of the potential hire.
An outline of the conflict that will occur between team members and how to successfully coach through issues.
An on-boarding schedule to ensure the success of the new hire and expedite “rap-up time”.
For additional information on how to eliminate uncertainty in the hiring process and increase long-term success, contact Peter Capodice at 941-906-1990 or email peter@capodice.com.
20 Best CEOs
Throughout the history of business, the failure or success of a company relies on many factors, not the least of which is the corporate savvy of the executive running the show. In recent times, many CEOs have come under fire for mismanagement of their corporations, while some have been applauded for successfully navigating a tough economy.
With much controversy surrounding CEOs of today, the question stands: Who are the best CEOs of all time? Portfolio.com set out to answer the question. Assembling a panel of professors from the top business schools around the country, Portfolio surveyed them on the records of CEOs who best created (or destroyed) value, innovation, while possessing the best (or worst) management skills. From this, they’ve formulated a list of the 20 Best American CEOs of all time. Here they are.
1. Henry FordDrive, he said. And America listened. The father of the modern moving assembly line changed the world by selling his standard-issue Model T cheap—the price was $260 in 1924—and creating car lust. Ford also paid his employees well. In 1914, in a controversial move, he doubled most wages to $5 a day, which tamped down turnover, goosed productivity, and cornered the market for top engineers and mechanics. On the downside: He was famously anti-Semitic.
THE STAT: Ford launched his eponymous car company with just $28,000. By 1918, half the cars in the U.S. were Model Ts. Now that’s a return on investment! 2. J.P. MorganWhat do you call a man who personally bails out the U.S. Treasury twice? Brilliant? Yes. Warren Buffett? No. During the depression of 1895, John Pierpont Morgan replenished the Treasury with $65 million worth of gold in exchange for government bonds. He came to the rescue again during the panic of 1907.
THE STAT: Morgan was so good at saving troubled businesses that he got his own noun. In the early 1900s, the process of turning a firm around came to be known as Morganization.3. Sam WaltonHe was a plainspoken hayseed. He liked dogs and pickup trucks. He owned suits and ties, which he proudly wore to church and to the office when he had to. He didn’t live in a 46,000-square-foot mansion. More than a decade after his death, the operating culture of the world’s largest company continues in his tradition. “What would Sam do or think?” is a question Wal-Mart management still asks.4. Alfred SloanNotoriously lax on auto safety and a unionbuster to boot, Sloan probably wouldn’t have cut it in today’s era of de rigueur air bags and making nice with the UAW. But his turnaround of GM, which was nearly bankrupt when he inherited it, ensured the company’s survival. Among his top innovations: making each of GM’s brands into its own separate unit and ordering designers to come up with different cars for different demographic groups—the first successful challenge to Ford’s one-size-fits-all approach.
THE STAT: Sloan is credited with pushing the idea of annual changes in style—a practice that led to the development of planned obsolescence.5. Lou GerstnerAt a time when quarterly write-downs in the banking industry regularly top $10 billion, a onetime restructuring charge of $8 billion seems like chicken feed. But back in 1993, when Gerstner inherited IBM, putting up that kind of figure would’ve been a death knell. The CEO worked to unite far-flung units and improve efficiency, and by the time he left, he had created a company with a net profit of $5.3 billion. One black mark: Because Gerstner didn’t recognize the threat posed by Microsoft, IBM lost ground in the software market.
THE STAT: In retirement, Gerstner is still under contract with IBM; the consulting gig, worth up to $2 million a year plus expenses, expires in 2012.
6. John D. RockefellerIt’s hard to top Rockefeller as a monopolist or philanthropist. While doling out dimes and nickels to the poor, John D. built a sprawling empire by squashing, undercutting, and buying up the competition. Over a two-month period in 1872, Standard Oil absorbed 22 of the 26 petroleum firms in Cleveland, where the company was first headquartered. By 1879, it had about 90 percent of the market for refining petroleum and all but complete control of the U.S. oil industry.
THE STAT: Rockefeller’s fortune peaked in 1912 at $900 million ($19 billion in today’s dollars), but by the time he died, in 1937, he’d given most of his money away to heirs and charities.7. Steve JobsIn Outliers, Malcolm Gladwell tries to explain the seemingly unexplainable: how the most amazing people got to be so amazing. His conclusion is that extraordinary people like Bill Gates and the Beatles aren’t mysterious freaks of nature but the logical products of considerable talent, good timing, and precisely 10,000 hours of early training. Gladwell claims that Steve Jobs fits into the scheme because of his age (54, perfect for taking advantage of the PC revolution that started in the 1970s) and the neighborhood in which he was raised (Silicon Valley).8. Jeff BezosA few pointers from the Bezos school of leadership: Micromanage, micromanage, micromanage. It’s a strategy that has kept Bezos—one of the first to recognize the potential of online commerce—in the CEO seat since the Web 1.0 era. He’s also been willing to make risky bets—from allowing other retailers to sell via Amazon to offering free shipping at the expense of profits in order to increase market share—that have ultimately paid off.
THE STAT: Amazon’s recession buster: the Kindle. The wireless reading device did an estimated $75 million in sales last year and is expected to double that figure in 2009.
9. Andrew CarnegieAh, the power of philanthropy! Carnegie, the iron-and-steel baron, wasn’t as ruthless as some of his fellow industrialists, but he still had a lot of reputation mending to do upon retirement. After selling Carnegie Steel in 1901 (it eventually became U.S. Steel), the former CEO polished his image by giving away most of his billion-dollar-plus fortune to support libraries and promote world peace and education.
THE STAT: The self-help book Carnegie inspired, Think and Grow Rich, has been in print since 1937 and has sold more than 30 million copies worldwide.
10. Bill GatesFittingly, when you google Gates, you get almost seven times as many results as you get for Goliath, the Biblical giant famous for his battle with a pipsqueak competitor. The co-founder of Microsoft is said to be a cranky and impatient manager—an approach that helped Microsoft earn $60 billion last year. He is also known to be somewhat unfriendly to competition. In 2001, to settle a massive antitrust suit brought against Microsoft, Gates agreed to share technical information with other software makers.
THE STAT: In February 1998, as Gates was on his way to a meeting in Belgium, a heckler hit him in the face with a cream pie.
11. Michael BloombergThe mayor who would be king, or at least New York City’s CEO for a term longer than originally allowed by law, reached City Hall by spending $155 million of his own money on two campaigns. But that sum is a drop in the bucket for Bloomberg’s $20 billion bank account. He earned that fortune through his financial-software-services venture, which makes money by charging a monthly fee for each of the 290,000 terminals it leases to clients.
THE STAT: Bloomberg started his business with the $10 million severance package he received after being fired from Salomon Brothers.
12. Ray KrocA century after the robber barons faded into the sunset, Kroc, a milkshake-machine salesman, was doing his business forebears proud. After initially agreeing to pay the McDonald brothers $2.7 million for the chain they founded, plus a royalty on 1 percent of gross sales, Kroc reneged. He never honored the royalty agreement because it wasn’t in writing. The result was a brand-new billion-dollar industry: fast food.
THE STAT: Today, McDonald’s sells about 550 million Big Macs a year—contributing 297 billion calories annually to the national diet.
13. Andy GroveMr. Disrupter—he’s lately been pushing for GE to develop an electric car and for Wal-Mart to try to solve the health-care crisis—is the quintessential outside-the-box thinker. But his passions have backfired too. In 1994, Grove was so enamored of Intel’s first Pentium chip that he sent it to market, warts and all, which ended up costing the company $475 million. No matter. Under Grove, Intel’s stock rose from under $1 in 1987 to more than $20 a share in 1998.
THE STAT: So just how many plug-ins does Grove think we should be driving? He calls for 10 million by 2011.
14. Walt DisneyImagine a world without Mickey. It could have been. The animator and entrepreneur’s first studio, Laugh-O-Grams, in Kansas City, Missouri, declared bankruptcy after less than two years in business. Disney bounced back in the mid-1920s and set up a new studio in Hollywood. Today, the company produces annual revenue of about $35 billion. As for Mickey, he was inspired by a pet mouse Disney had while he was working in a Kansas City studio.
THE STAT: Disney lifted the idea for his amusement park—where he thought employees would spend time with their kids—from Children’s Fairyland, in Oakland, California.
15. Reuben MarkMark may have been boring as CEO—his big innovation was to focus on the small picture rather than on splashy initiatives—but he made Colgate the king of oral care. Under his leadership, the company rarely missed quarterly estimates, and its stock performed twice as well as the S&P 500.
THE STAT: Mark once tried to get all 35,000 Colgate employees to wear ID tags with their first names in big type to make it easier for top executives to connect with workers.
16. Warren BuffettWhen the Oracle of Omaha bought a piece of Goldman Sachs last year, not only did he receive better terms than the government, he got better returns: As of February, Buffett’s $5 billion investment had appreciated 12 percent, while the Treasury’s $10 billion stake had fallen 25 percent.
THE STAT: Since Buffett took over, the company’s stock has increased at a rate of 20.3 percent, compounded annually.
17. Katharine GrahamKate the Great deserved her nickname. Under her leadership, the Washington Post published the Pentagon Papers and broke the Watergate story. Between 1981 and 1991, when Graham retired, the Washington Post Co.’s stock price increased elevenfold.
THE STAT: Graham’s father, Eugene Meyer, bought the Washington Post at a public auction in 1933 for $825,000. She began working at the company in 1938.
18. Lee IacoccaIn case there’s any lingering doubt, current Chrysler CEO Bob Nardelli is no Lee Iacocca. When Iacocca arrived at Chrysler, during a time of record losses at the company, he cut inventories by $1 billion, reduced the white-collar staff by 50 percent, and turned Chrysler around—not with government loans, but with $1.5 billion in loan guarantees. Iacocca repaid the loans ahead of time and the Treasury made a profit of $300 million.
THE STAT: The year Iacocca retired, the company recorded a $700 million profit. Last year, Chrysler, now privately held, lost $8 billion.
19. Herb KelleherIn his long tenure as CEO, Kelleher chain-smoked Kool cigarettes, drank Wild Turkey, and produced the highest return to shareholders of any company in the S&P 500. Much of Kelleher’s success in later years can be attributed to his aggressive fuel-hedging program, which served the company well when oil prices were high but cost the company when they plummeted.
THE STAT: During Kelleher’s reign, the stock went from 7 cents a share to over $20.
20. Oprah WinfreyA hug—or a plug—from O on The Oprah Winfrey Show is pretty much all you need to spur sales of anything, be it scented candles or obscure novels. The first female black billionaire in U.S. history, Winfrey started out as a local talk-show host; today, she runs an influential, if comparatively small, media conglomerate that publishes books and produces television shows, movies, and radio programs.
THE STAT: Winfrey is now estimated to be worth almost $3 billion.
For additional information on how to eliminate uncertainty in the hiring process and increase long-term success, contact Peter Capodice at 941-906-1990 or email peter@capodice.com.
Talent Exodus at Google
For nearly ten years, Capodice & Associates has been highly engaged in the development of corporate models that have successfully increased individual, team and corporate productivity. This has been accomplished through the collection of personality characteristics, behavior styles, attitudes, stress profiles, motivation, motivation needs, relational needs, personal values, interests, work requirements etc… This data is collected by organization and developed specifically for each individual company and culture.
Now internet giant Google has announced the use of a complex algorithm utilizing many of these performance factors to help halt the exodus of top Google executives. In this recent WSJ article, Scott Morrison discusses what Google is doing to prevent the “brain drain” and exodus of talent from loosing its competitive edge.
Courtesy article: Google Searches for Staffing Answers Courtesy The Wall Street JournalMay 19, 2009. All Rights Reserved.
To learn more about how to integrate this process into your organization, contact Peter Capodice at 941-906-1990 or email peter@capodice.com.
Social Networks … Invaluable to your Business & Career
According to Nielsen “Member communities have become more popular than e-mail”. Member communities are visited by 67% of the global on-line population and time spent is growing at 3 times the overall internet rate.
Your opportunity to promote yourself and build your company’s brand is Enormous! Social networks span the world and your investment is your time. How else can you send your message for no cost and reach so many professionals? You can attach company videos, blog, connect personally or send your message to the world. Needless to say, involvement in Social Networks is now a must!
So which do you join? Most of us have heard of or joined Linkedin, Facebook, or mySpace. Now there is one exclusively for the Franchise Industry.
Franchising is unique from other industries because of the franchise relationship. Whether you work directly with the franchisee or franchisor or indirectly through purchasing, finance, legal, real estate, construction, training etc… there is now a high quality community for all of us. On June 9th 2009 you will be able to log onto www.FranchiseExecutives.com and join the first social Network exclusively for franchise executives and franchise owners.
Capodice & Associates is proud sponsor of the www.FranchiseExecutives.com website where we will be posting blogs and future Executive Job opportunities. We hope to see you there!
Execs with financial experience take CEO reins at restaurant chains
Current restaurant company chief executives Charlie Morrison of Pizza Inn, left, Jeff Warne of O'Charley's, center and Michael Woodhouse of Cracker Barrel all have chief financial officer listed on their resumes.
By DANNY KING
(June 29, 2009) Ask Jeff Warne if his being a certified public accountant precludes him from being a true “restaurant guy,” and the recently named chief executive of O'Charley's Inc. scoffs at the notion.
“I worked literally in every position in every type of restaurant putting myself through college,” said the 48-year-old Warne, who graduated from St. Cloud State University in Minnesota before getting his MBA at the University of Chicago. “Host, bartender, dishwasher—I've done every job.”
While operations remains the most common route to the corner office, CFOs turned CEOs say you can't underestimate the benefits of knowing your way around a spreadsheet, especially during an economic downturn that has restaurants scrambling to control costs. About six out of 10 restaurant companies reported same-store sales declines in April, which was the 11th straight month the industry as a whole had a comparable-store sales drop, the National Restaurant Association reported in May.
From dealing with activist investors and private-equity firms to selling and buying subsidiaries, conducting regression analysis to uncover areas of poor performance, and having an intimate knowledge of securities regulations, the advantages of a financial point of view are numerous, according to CFOs turned CEOs.
“You have to look at the business daily,” said Charlie Morrison, chief executive and former CFO of Pizza Inn, a 320-unit chain based in The Colony, Texas. He noted that items like labor hours and food waste need to be constantly tracked.
“Those disciplines are necessary to maximize profit when revenues are soft,” he said. The image of a financially trained restaurant operator is a far cry from iconic restaurant figures like Ray Kroc, Carl Karcher and Norman Brinker—operations-oriented people who founded restaurant chains McDonald's, Carl's Jr. and Steak & Ale, respectively, between the 1940s and the 1960s and grew them broadly enough to take the brands public.
To this day, restaurant companies run by former financial chiefs are the exception, not the rule. Among the industry's largest foodservice companies, only a few are led by ex-CFOs, including Burger King's John Chidsey, Aramark Holdings' Joseph Neubauer, Sonic Corp.'s J. Clifford Hudson and Darden Restaurants' Clarence Otis.
Other CFOs turned CEOs include Sally Smith at Buffalo Wild Wings; Michael H. Magusiak of CEC Entertainment, parent of Chuck E. Cheese's; and Tom Baldwin at Morton's The Steakhouse.
“People started out maybe being a little skeptical” of his finance background, Warne said. “But I've been blessed with working with intellectually curious people who want to learn more about that approach.”
Warne worked for T.G.I. Friday's parent, Carlson Cos., for 16 years, including a stint as its CFO, before joining Nashville, Tenn.-based O'Charley's in 2006. O'Charley's operates or franchises 372 units under the O'Charley's, Ninety Nine Restaurant and Stoney River Legendary Steaks brands.
Financial experience comes in handy for companies like Cracker Barrel Old Country Store Inc., whose Cracker Barrel Old Country Store concept includes a large retail component as well as food and beverage. Mike Woodhouse, who joined the Lebanon, Tenn.-based company as CFO in 1995, was promoted to chief executive eight years ago. In 2006, he oversaw the $486 million sale of the company's Logan's Roadhouse chain.
“Having both restaurant and retail operations within one company makes for an extremely complex business,” said Woodhouse, 64. “So, yes, a background as CFO helps. You're already up to speed on so many details and financial processes.”
“As a CFO, I had been able to relate to their understanding of return for the business and the financial metrics in which the business is managed,” said Morrison, 40, who was CFO for Steak & Ale. “That's a clear distinction that a financial background brings.”
With that in mind, former CFOs use financial tools that may make an “in-the-trenches” operator cringe. Warne points to regression analysis, where menu items, franchise-store sales and other metrics are statistically analyzed to help uncover areas of poor performance that need improvement.
Still, with plenty of operations knowledge to back up their respective financial backgrounds, Morrison, Warne and Woodhouse all stress that a restaurant executive can't fake hands-on experience, especially when dealing with franchisees who are trying to withstand the effects of the recession.
With all but three of Pizza Inn's units franchised, Morrison, whose company's same-store sales fell just 1 percent for its most recent quarter, constantly works with restaurant owners to prevent what he called “knee-jerk reactions that sacrifice customer service.”
Likewise, Warne and Woodhouse said that, financial background notwithstanding, chief executives looking to save their way out of an earnings slump would be making a big mistake.
Woodhouse said Cracker Barrel, whose same-store sales for its most recently completed quarter also fell just 1 percent, has been able to keep revenue fairly steady by maintaining portion sizes and quality standards. Meanwhile, Warne said O'Charley's, whose corporate units posted a 2.9-percent same-store sales drop for its most recent quarter, boosted its guest-satisfaction levels in the second half of last year by revamping service standards, calling the approach “old-school hospitality 101.”
“I know that you might generally expect a former financial person, a ‘bean counter,' to focus only on cost-cutting and containment, without regard to the effect on quality or the guest experience,” Woodhouse said. “But I also know that is not the path to success.”
Capodice & Associates is proud sponsor of the www.FranchiseExecutives.com website where we will be posting blogs and future Executive Job opportunities. We hope to see you there!
Monday, April 13, 2009
Putting the breaks on Conflict
Of course not…it’s an objective opportunity to review the strengths and weaknesses of the business, review cost structures and determine weather or not there can be long-term success.
So why with all the talk about how important people are to the organization, do organizations hire, promote, reorganize etc…without completely understanding the strengths, weaknesses, motivations, interests and relationship factors of their executives and managers. The tools/assessment methods available allow you to develop a people P&L for greater organizational success.
One of the great benefits of collecting this data is the opportunity to understand individual differences and to create more productive working relationships.
For example: A company has just reorganized and now John reports to Sally. They have three significant differences: How they prefer to be incentivized and their approach to incentives, their success/challenge orientation and how they express or deal with feeling and their need for emotional expressiveness.
Sample Report
Click here for a sample report
The sample “Differences to Watch” report will show you the value in understanding these differences before the relationship begins, the potential negative behavior associated with the differences and the positive solutions to avoid misunderstanding, conflict and unwanted turnover.
This valuable tool is used for hiring and selection, on-boarding, conflict resolution, succession planning etc. and is a part “Best Practices” for the people centric organization.
For greater insight, call Peter Capodice at 941-906-1990.
About Capodice & AssociatesFrom a dynamic blend of professional search talent, to the most comprehensive assessment tools on the market, Capodice & Associates gives you peace of mind knowing your next hire will be a long-term success.
Career Transition…What do I do Now??
Help is on the way
To support the many companies and individuals who are seeking high quality sound advice in Career Transition, in addition to understanding individual strengths, motivational needs, stress behaviors and careers that hold the greatest potential for individuals, Capodice & Associates has teamed up with the world’s leader in career assessment counseling and individual development. By doing so, Capodice & Associates offers client companies and individuals an alternative to the high cost of out placement services (generally $10,000 +++ per person).
What it does.
After completing the assessment questionnaire backed by over 50 years of research and application, the data is compiled and an individual career report is generated.
The individual career report gives valuable insight that will assist individuals in understanding their strengths, motivational needs, stress behaviors, how you lead people and work with others. It identifies occupational groups and ideal work environments that are the best fit for the individual.
Having this information will help the individual create a more powerful resume, craft a more effective “elevator” speech and develop useful interview and negotiation strategies. All leading to greater individual productivity and personal fulfillment.
Sample Report
Click here for a sample report
Who is this for:
Companies who want to support employees who will be transitioning away from their current organization.
Individuals who want to understand more about themselves and the careers that hold the greatest potential both now and in the future.
Cost: $299.95 per person.
Contact:
Peter Capodice at
941-906-1990
peter@capodice.com
About Capodice & AssociatesFrom a dynamic blend of professional search talent, to the most comprehensive assessment tools on the market, Capodice & Associates gives you peace of mind knowing your next hire will be a long-term success.
Do you know who your star performers are???
Most CEO’s have no idea who their star players really are. They think they do but the fact is unless they are or have actively engaged the use of objective tools that measure behavioral patterns, organizational focus, intellectual styles, interests, culture fit, experience and performance; the decision criteria being utilized is primarily a subjective guess. The reliance is on someone’s opinion which probably changes from time to time and depending on whom you ask the opinion differs. The end result is the loss of high quality talent that may determine the success of your business.
Bla…Bla…Bla…I don’t buy it. I know who my best performers are…
For you non believers, let me give you a real life example:
This organization had grown from 13 units to 120 units within a three year period resulting in out-of-control administrative growth which lead to a bureaucratic infrastructure who became out-of-touch with line management needs. Year over year sales were declining as was company profitability.
Now that’s a bad day… but fear not….
Behavioral Assessment tools were applied to assess and objectively measure the organization and acquire the talent necessary to expedite a company turnaround. Through the assessment process an internal individual was identified with previous unknown star potential. It is also important to understand that this individual was slated to be cut from the organization (It was the opinion of his supervisor that he was “a pain in the neck and should be let go”).
The assessment process using data that could be measured put each team member on a level playing field and uncovered the star qualities of this individual. As the evaluation continued into current and past performance, it became clear this previously unknown star performer should not only continue employment, but be elevated and rewarded. The identified individual was promoted to the Vice President of Operations position. Over a period of approximately two years, the company’s profit has gone from a two million dollar loss to a two million dollar gain. Sales have continued to outpace prior years and today they are driving double digit sales gains is the worst economy since the Great Depression. The individual who was once slated for termination is now the Chief Operating Officer of the company.
This is an example of a small organization… you would be horrified to see what this subjective decision making looks like in a large organization and the amount a great talent that is lost…OMG!!!
P. S. If you think this is an isolated circumstance you are terrible mistaken. This may be the time to open your eyes and take your head out of the sand.
For additional information on the process and how it is implemented, contact Peter Capodice at 941-906-1990.
About Capodice & AssociatesFrom a dynamic blend of professional search talent, to the most comprehensive assessment tools on the market, Capodice & Associates gives you peace of mind knowing your next hire will be a long-term success.
The Behavioral Traits that will take you to the Cleaners
These cunning individuals are not your “two bit” criminals without an education. They are highly educated with advanced college credentials and are/were respected within their fields and communities.
Their behavior reflects a money and opportunity minded individual that when stressed has a “win-at-all-costs” orientation. They are highly competitive and want to know “what’s in it for me”.
This behavior alone may not always lead to excessive greed or criminal activity. In fact many successful entrepreneurs possess this trait. However when this behavior is accompanied by low social adaptability and responsibility followed by a pinch of stress and…BINGO! A great recipe for: skimming, under reporting of income, over statement of income, fictitious revenue, money laundering, concealed liabilities & expenses, improper financial statement disclosures etc…
Good News…We can help
These behaviors can be identified and measured so you can put the appropriate checks and balances in place. To find out how, call Peter Capodice at 941-906-1990.
Capodice & Associates
www.capodice.com
941-906-1990
About Capodice & AssociatesFrom a dynamic blend of professional search talent, to the most comprehensive assessment tools on the market, Capodice & Associates gives you peace of mind knowing your next hire will be a long-term success.
Penny Wise and Pound Foolish
Unquestionably; retaining or acquiring top talent, controlling costs while continuing to build the brand generally top the list.
Many employers (about 65%) today do not believe their employees are looking at other job opportunities. In reality according to a recent survey by salary.com, 65% of employed respondents are actively looking around. Employers might assume in a soft economy, employees are just happy to have a job. Hiring Managers…you are out of touch with reality! How about another dose of reality? Job browsing this year is up 17% among the employed; people are scared and do not want to be unprepared when the next “cut” knocks at the door. The talent that has been proactive in successfully building your business are the same ones who are on their way to a new opportunity.
So why are they leaving?
Compensation
Development
Recognition
Today more than ever, businesses are being pushed to control costs. In an effort to do so some employers are proposing commission only compensation packages for both domestic and international franchising sales professionals. The danger if the individual accepts this package is realizing most of these sales professionals are likely accepting the program as a “stop gap” until they locate a position with greater security in compensation. Although the temptation may be there for the company to control fixed labor costs, keep in mind that these individuals are still looking and as the economy turns, or a better opportunity arises, they will be gone. The result means continued inconsistency in the sales program, lost sales and an inability to attract top talent in the future. Beware not to be Penny Wise and Pound Foolish!
For greater understanding into maximizing individual performance through compensation call Peter Capodice at 941-906-1990 of email at peter@capodice.com.
Capodice & Associates
www.capodice.com
941-906-1990
Wednesday, January 14, 2009
Upgrade! Upgrade! Upgrade!
We have not in our lifetime seen an opportunity of this magnitude to acquire the level of talent available today. To survive this downturn and position your business for a consumer who’s expectations continue to rise, ensuring all team members are exemplar performers and work as a team is no longer is an option. You must take this advantage to upgrade your company’s human capital now!
Over the past year Capodice & Associates has expanded its database to more than 28,000 working executives across all disciplines within the restaurant and franchising industries. Additionally Capodice & Associates is the only Executive Search Firm to have developed a database of top industry performers based on the worlds leading behavioral assessment method. I encourage you to call and discuss how Capodice & Associates can objectively measure/evaluate your current team and position your business for the future. Call today and learn how you can get a free snap-shot of the strengths and weaknesses of your senior management team.
About Capodice & Associates
From a dynamic blend of professional search talent, to the most comprehensive assessment tools on the market, Capodice & Associates gives you peace of mind knowing your next hire will be a long-term success.
Contact Us
Capodice & Associates
Midtown Plaza
1243 S. Tamiami Trail
Sarasota, Florida 34239
941-906-1990 Phone
941-906-1991 Fax
EMAIL US
www.capodice.com