May 29, 2011
In the end there is once dance you’ll do alone -Jackson Browne In 1991, the IBM plant in Lexington, Ky. became Lexmark. IBM offered employee severance packages. People could take the package or take a chance that Lexmark would keep them on. Several IBM employees came to me for advice. Some took the package and others did not. I concluded that taking a package is an individual decision. There are no set guidelines. Many of the IBM employees were engineers or had heavy statistical backgrounds. They wanted an answer they could quantify. They sought me to calculate the present value of their package. After 30 seconds crunching the numbers, I asked the essential question: What are you doing to do with the rest of your life? Some had well thought out plans. They wanted to do charity work or start a second career. Others didn’t. Working at IBM was not just a job, it was a lifestyle. They had never thought about life outside the corporation. IBM employees were like a large family. They had generous benefits and perks. Most socialized with other IBM employees. Once someone started at IBM, they generally stayed for life. The idea of leaving IBM was painful. Companies who offer severance packages are generally established companies who sold the concept of lifetime employment concept. I’ve found that people leaving old line companies, even with a severance package, were more bitter than those where companies treat employees like interchangeable parts. If you work at a company with high employee turnover, getting fired is not a total surprise. People at a company like IBM never thought about working somewhere else. Many people who are married to their jobs. They don’t have hobbies or outside interests. Those people need to forget about a severance package and stay put. An engineer who came to my office with many boxes of data, that he brought on a moving van dolly. He had spent hours trying to quantify his decision. Before I started looking at his boxes, I asked some questions . Did he like his job? Yes. Did they want him at the new company? Yes. Would he enjoy retirement? No. Could he find a similar job? Not in this part of the country. Was moving an option? No. I told him to skip the number crunching. . He needed to stay where he was. He was stunned. He kept wanting me to look at his boxes. I wouldn’t look at his data. I told him it was irrelevant. After a while, my words sunk in. He worked happily for another decade. Economic decisions shouldn’t be ignored. Some severance packages are lucrative and offered on a one time basis. Financial considerations are one part of the package, not the whole package. The health of the company and industry are important factors to consider. I’ve seen people pass up a buyout and have their company go down a few years later. People often think their own industry is healthier than it is. It is good to get an objective opinion. There are economic factors I look for in a plan. First is lifetime income. It’s easier to leave if your lifetime income is secured. A second factor is health insurance. Larger companies have better benefits than what people can get on their own, especially if people have complicated medical conditions. I warn people getting lump sum packages not to make any sudden or stupid financial decisions. When severance plans are offered, I see hucksters come running, pitching everything from financial products to fast food franchises. The best advice is to take a deep breath. Talk, really talk, with your family, your bosses, your co-workers and the stakeholders in your decision. Get some outside and impartial advice. Make a decision based on information and logic, not on fear or emotion. It’s one of the most important decisions of your life. Even with good information, it is a decision you will ultimately make alone. Don McNay, CLU, ChFC, MSFS, CSSC is Chairman of the Board for McNay Settlement Group in Richmond, Ky. You can write to him at don@donmcnay.com or read his award winning column at www.donmcnay.com
Read the full article →
May 27, 2011
Like death and taxes , one of the inevitable realities of organizational life is the periodic ” team challenge .” For such a project, the team is assigned to accomplish something beyond what they currently do or have done before. For a top management group, it might be the requirement to reduce overall expenses or headcount by 20%; for a sales or business development team, the goal might be to increase revenues by 10% in the next quarter; and for a product development team the focus could be on accelerating a market launch by two months. The varieties are endless, but the collective theme is that people working together — each with their own responsibilities — need to achieve a common result. These situations call for collaboration — which should be the fastest and most effective way to get results . But surprisingly over the years I have seen teams respond to these kinds of challenges in three basic ways (only one of which is truly collaborative): First is what I call compliance . This is when each team member independently responds to the challenge by taking action in her own area. In other words, everyone on the team complies with the need to do something, but avoids working together. For example, I once worked with a divisional leadership team that was required to reduce overall headcount by 10% to meet the corporation’s goals. With very little discussion, each person agreed to cut 10% of the people from their own function and report the numbers back to the divisional controller. While this “spread the pain evenly” approach indeed met the corporate requirement, there was probably a better way. The second response is cooperation . Here again each person develops and implements his own plans, but in this case shares what he is doing with the group. While there is some amount of joint discussion, the focus is still on individual actions rather than a collective strategy. For example, when one technology company needed to increase its sales performance, the districts were all given significantly higher targets. The district managers then went about achieving these targets in different ways. Some increased individual sales quotas across the board, others reallocated resources to higher-potential customers, and still others focused on closing the gap with services contracts. The managers shared these approaches on their weekly calls, and gave each other feedback. But they never created a joint strategy to leverage their combined resources, ideas, and talents. In the end, while some districts hit their targets, the overall numbers were disappointing. In both of the cases described here, true collaboration might have led to a more robust and effective outcome. In the headcount example, the leadership team might have identified specific areas where headcount could be reduced by more than 10%, considered ways of consolidating similar activities into shared service centers, or any number of other possibilities. In the sales example, the district managers might have reallocated resources across districts, created joint campaigns for particular products, or brainstormed many other ideas that could have been quickly tested and possibly scaled. What’s interesting is that neither team consciously decided not to collaborate. Instead they did what came naturally, which is to work either completely or partially on their own. The reality is that true collaboration is difficult. It requires subordinating individual goals to collective achievement; it means engaging in tough, emotional give-and-take discussions with colleagues about strategies and ideas; and it often leads to working in new ways that may not be comfortable or easy. So given these difficulties, most teams find it easier to talk about collaboration rather than do it. It doesn’t have to be this way. Teams can address their challenges through true collaboration, and by doing so can achieve outstanding results. The starting point however is to make a conscious — and collective — decision to go beyond compliance and cooperation. Have you been on teams that engaged in true collaboration? What did it take to make it happen? Cross-Posted from Harvard Business Online
Read the full article →
Yahoo Business News
