The two videos below provide about as stark a contrast as you could imagine between what constitutes a poor workplace culture in the carwash industry, and one that relies on the Winning Workplaces-approved notions of strong team building and investing in your workplace to boost customers and their satisfaction for a healthier bottom line.

First, here's the "bad" example.  I found this in a Huffington Post article published this week highlighting extreme practices in play in a number of car washes in the Los Angeles area.  Warning: at times the video is graphic in its depictions of how workers are treated.

Substandard – even inexcusable – people practices mentioned include:

• Beatings
• Sexual harassment
• Manager threats
• Pay at half the minimum wage, or less

Now here's what a workplace looks like in the same industry with the polar opposite approach to employee engagement.  This is our interview with Jerry Dahm, Executive VP of Mike's Carwash.  Based in Indianapolis, Mike's is a 2009 winner of our Top Small Workplace award.

Here's what Jerry mentions as features of how they treat their workforce, which includes over 200 full-time employees at more than 30 locations:

• When new hires emerge from their rigorous hiring process, their on-boarding includes 40 hours of job training
• Grooming leaders from within; while they invest $3,500 per person, per year, on tuition reimbursement, they see a great ROI since about 50% of job openings are filled from within
• Open book management with financial literacy training to help workers see how their efforts influence the bottom line – and improve their pay, since they also have profit sharing

Also, while Jerry doesn't mention this in the interview, I think it's noteworthy to point out the further contrast involving wages.  When Mike's Carwash filled out their application for our award in 2008, only 8% of employees were earning $20,000 per year or less, and none of them were (or are today) getting below the minimum wage.

Thinking about the "bad" example above, I find it not only sad that some carwash owners and leaders are fostering such poor workplaces, but counterproductive to their financial best interests!  The Huffington Post article notes that the car washing services industry today is a $23 billion enterprise, and new research released this month shows it's a rare one that, over the next 5 years, is actually set to experience healthy growth of about 19%.  So doesn't it make sense that those who run these operations would want to adequately pay and fairly treat their workers to in turn deliver the best service, to earn the biggest piece of that pie?

Related: Read our Success Story on Mike's Carwash to learn even more about how the company creates a competitive culture of ownership which translates to better business results.

I am pleased to share with you the following guest post by Anita Campbell.  Anita is the Founder of the Small Business Trends website and CEO of BizSugar, an online community of small business owners.  Today she tackles a topic of concern when establishing great employee engagement and workplace team building strategies: not crossing the friend line with your employees to your business' detriment.  Enjoy!

Everyone wants – has a need, even – to be liked.  It certainly makes going to work every day a lot easier if the people you work with like you.  And because we spend so much time at work, it's only natural to want to cultivate friendships with the people we're with for so many hours every day.  The rules change when you're the boss, though.  There's nothing wrong with being friendly with your employees.  But you do have to draw the line, or maybe a few lines, to also avoid damaging your professional relationships with them, and to keep their respect.  Here are a few tips on how to maintain that delicate balance.

Don't Get Too Personal

You've probably read or been told that you should set boundaries with your employees.  But what does that mean, exactly?  It would be awkward to actually sit your employees down and go over a list of what subjects are okay to talk about, and which ones are taboo.  But it can also be difficult to establish those lines in a more subtle manner.  How you set those boundaries is up to you, but one of the most important things to avoid is getting too personal.

From time to time, your employees may have to reveal certain personal information to you if it's about something that may affect their work.  Having surgery can mean time out of the office, for example.  Or maybe they're getting a divorce, and must remove their spouse from their insurance coverage.  There's really no getting around that, as uncomfortable as it may be for everyone involved.  But those types of revelations should only go one way.  Need to be away from work for medical reasons?  That's all you need to say.  Getting a divorce?  Try to keep it to yourself.

Just like you wouldn't broadcast your problems on a business networking site, you don't want to let your entire office know what you're going through.  Your employees need to have faith that you are there to manage and help them, and although you want them to see you as human, you must try to maintain their confidence in you, and in the company.  Breaking down in the office because your spouse left you will damage that confidence.  Take time off if you need to, but keep your personal life personal.

Now, as with many rules, there is an exception to this one. If you're a small business owner, and you only employ a few people, it may be more difficult to separate your personal life from your professional one.  A startup can oftentimes create a camaraderie and a sense of ownership that employees in larger companies don't feel.  You may all be spending long hours in the office together to get those client proposals done, or inviting your employees' ideas and contributions to get your startup past one of the inevitable hiccups you'll run into.  If that's the kind of relationship you've built with your employees, you may feel more comfortable revealing some of the more personal details of your life.  Just remember to maintain your position as the boss at the same time.

Don't Get Drunk in Front of Employees

You'd think this one would need explaining, but think back.  Before you were promoted or started your own business, did you ever see one of your bosses get drunk at the company Christmas party, or the company picnic?  It happens more often than you might think, and much more often than it should.  Learn from those experiences, and don't be that boss.

It's okay to have a drink or two with your employees from time to time.  Most people will probably have a drink at a holiday party or other company event.  Or maybe you'll go out after work to celebrate landing a big contract.  Just don't overdo it.  Your employees do not need to see you slurring your words, or losing control in public.  It can be embarrassing, and make it very difficult for them to respect you once you're back in the office.  And let's face it, no one likes to have to babysit someone who's had a few too many.  Never put your employees in a position where they have to monitor you, or take your keys away from you.  It's asking too much of them, and putting them in a very awkward position.  No one appreciates that, least of all the people who are supposed to be able – and want – to look up to you.

Don't Play Favorites

Of course you're going to like some employees more than others.  There'll be one person you just click with, someone with whom you'd be very good friends if not for the work situation that requires keeping a little distance.  Because you can't hang out with that person the way you'd like to, you may try to compensate by treating that employee a little better than the others.  If you think you're being subtle about it, you're wrong.  The other employees will notice it, and it will cause problems.

Having several employees can be very much like having a family, especially if that's the kind of culture you've worked to build in your company.  Like a family, there will be some sibling rivalries, and competition for your attention as the pseudo parental figure.  Don't encourage it.  Everyone needs to work together, not against each other, and if it becomes obvious that you favor one employee over the others, the employees on the outs will band together against the favorite.  It's just human nature.  And nothing destroys morale more quickly in the office than feeling unappreciated, or as if the work being done doesn't really matter.  Treat all your employees equally but fairly, which also means that when one of them isn't performing, you take the appropriate action – even if it's your favorite.

The main answer is, yes, you can be friends with your employees, just not the same kind of friends you are with your non-work friends.  Be friendly, be fair, but keep the focus on work, morale, and productivity, and you'll get much more out of your employees than you would if you tried to make them like you all the time.  In other words – be the boss.

Related: As the boss, you may be concerned about getting too chummy with your staff to keep an eye toward building trust in the workplace. Yet, as we write about here, research shows a possible link between budding friendships among your staff resulting in more highly engaged employees when it comes to dealing with leaders and managers.

The historically high unemployment level gets discussed often in the media lately, but an under-the-radar trend is that voluntary employee turnover is currently at a three-year high, according to the Department of Labor.  Clearly, even with continued rounds of layoffs at some of the best-known companies and a weak hiring outlook, greener pastures are luring away top talent.

Still, through our employee engagement research, Winning Workplaces sees a vehicle for both increased job satisfaction and commitment (helping to keep in check and even reduce voluntary turnover) and innovation, productivity, and service improvements to boost the bottom line: employee ownership.

One of the measurements we did as part of our 2011 Top Small Company Workplaces award application was to see what percent of employees, whether management or lower-level staff, own stock in the company.  As you might expect, in the vast majority of the 342 private and not-for-profit organizations who applied this year – 252, or 74% – no employees own company stock.  In the remaining 90 firms (26%), 1-100% of employees do.

But check out what I found, as illustrated in the charts below, in terms of how annual revenue, revenue growth, and employee turnover are all impacted by how many employees own stock.  I added trendlines which show that as more employees are part of the workplace culture of ownership, these all-important metrics tend to be stronger.

Employee ownership may not be right for every organization.  Yet, as our coverage of our 2011 workplace award winners shows, those that make it work set themselves up for long-term success.  In some cases, in perhaps an ironic twist, those that come out way ahead of downturns like the one we're in now and need to create and fill more roles to meet demand use it as a selling point to attract top talent from their competitors.

Although we consider ourselves extremely vocal when it comes to promoting the link between staff engagement activities and long-term company growth, Winning Workplaces is by no means the only organization shouting this from the soapbox.  Just last week, SJF Institute (with whom we've previously collaborated to produce content to help you improve your people practices) released a massive, 155-page report exploring this link in stunning detail.

While this report, Employees Matter: Maximizing Company Value Through Workforce Engagement, would be noteworthy in any case, we appreciate that over a third of the 24 companies profiled are Winning Workplaces honorees.  They include:

• Advanced Circuits
• Dancing Deer Baking Company
• Graniterock
• Namaste Solar
• New Belgium Brewing
• PrintingForLess.com
• Red Door Interactive
• SmartPak
• The Redwoods Group

Before delving into the full report, I recommend checking out page 3 of SJF's 4-page Executive Summary of the report.  There you'll find a breakdown of 10, Winning Workplaces-approved worker engagement strategies which fall under the areas of HR practices, culture formation, and broad-based involvement and ownership.

We congratulate SJF Institute for undertaking the research, writing, and production to make available this valuable report.

What are your takeaways from the report, or other thoughts on it?  Let us know in the comments.

In this economy, who doesn't want all the help they can get to grow their business?  I got an email this week from our friends at the Small Giants Community (whom I've mentioned before here) that on Wednesday next week, July 27, they will be hosting a FREE webinar on the values proposition of private equity.

No, values above is not a typo.  Small Giants will enlist Excellere Partners VP Lindsay Lewellen to discuss how being on the same page as potential investors goes beyond the balance sheet.  Just as employers use people practices to attract, retain, and develop passionate employees for best organizational results, Lewellen will show that when investors link up with leaders whose passion for business exceeds profit, truly great things can happen.

Click here to register for this free webinar.

Related: To whet your appetite for this webinar, check out these articles on our website, which address the connection between better-informed financial decision making and an improved culture of ownership for a more productive workplace:

• Demystifying Private Equity
• How to Position Your Company to Access Outside Capital, Part 1
• How to Position Your Company to Access Outside Capital, Part 2

In April I mentioned that one of our small workplace honorees, Headsets.com CEO Mike Faith, would be speaking at our 2011 Leadership Conference with Inc. Magazine.  I'm getting ready to pack my bags for this jam-packed, three-day event, which will be held next week in Dallas, Texas.  Go here for more info.

I took a look at the updated agenda and I was happy to see that three of the just-announced winners of Winning Workplaces' 2011 Top Small Company Workplaces award will be joining Mike's panel for the session which – naturally – will address what it takes to be a small business that has an ultra productive workplace culture of ownership and accountability.  Here are Mike's co-panelists:

• Heather Leanne Nangle, Co-owner, Director of Marketing, Communications & Social Responsibility, Namaste Solar
• Mark Sammons, Ownership Thinking Coach, n-Link Corporation
• Tania Binder, Vice President of Global Sales, TRX

According to the conference program, these four experts on impactful people practices will help their fellow small businesses in attendance:

1. Ensure their companies are places where the best and brightest are clamoring to get hired,
2. Get their employees to buy in on a deep emotional level, and
3. Learn what they need to change in order to make a real commitment to grow and develop their talent.

Now I'm even more excited for the conference.  If you haven't yet registered and you can make it to Dallas next week, go here to join me.  I'd love to meet you and learn what you do to attract, retain, and excite your workforce as a means for growing your business.  (Who knows, your story could appear here.)

I love when things converge.  Today I was already set to tell you about an impactful new initiative Winning Workplaces launched this month in conjunction with our upcoming joint Leadership Conference with Inc. Magazine in June.  The Scholarship Fund we've established directs contributions from readers like you toward worthy business school students to cover the cost of their attendance at this event in Dallas, to help them on their path to using employee engagement to create a productive workplace culture in their startups (the funds will also help leaders of nonprofits attend the event for greater people practices learning – click here for more info).

Lo and behold, I received an email this morning from the Foundation for Enterprise Development, a nonprofit that (like Winning Workplaces) encourages entrepreneurs to foster a culture of innovation within their organizations.  The FED shared a press release on the winners of their national college essay contest, Creating Wealth By Sharing Wealth.  More than 400 students from 18 U.S. universities responded to the FED's call for both grad students' and undergrads' thoughts on strategies and practices for increasing employee motivation and participation in enterprise growth.

As the winning essay by University of California, San Diego MBA candidate Terry Williamson and many others received in this contest show, these young, aspiring entrepreneurs understand the link between creating a workplace culture of ownership and the increased potential to meet one or more bottom lines.  (One of the sessions at our June Leadership Conference will provide insights on how business leaders can meet no less than four bottom lines.)

With many of the students who participated in the FED's essay contest enrolled in business school, I think the fact that they have spoken so eloquently of this connection underscores the value that contributors to our new Scholarship Fund will receive.  Our donors will be helping to sow the seeds for more winning workplaces – and they will get a tax deduction thanks to our 501(c)(3) status.

For more information about the need for the Winning Workplaces Scholarship Fund and its impact, click here.

Are you a betting man (or woman)?

It's a common question on the Vegas strip – but how common a question is it for small business leaders?  On the one hand, Winning Workplaces' informal poll of our network a while back found that 2/3 allow office betting pools for sporting events.  However, given the economy we're in and the ever-increasing focus on investments tied to hard data, that's probably where the betting stops for the majority of entrepreneurs.

But it doesn't have to, if you have the same read as I do of this new article in MIT's Technology Review.  SmartBrief on Leadership aptly summarizes it as follows:

To gauge the potential success or failure of new products, a video game company had its employees place bets on projects using Monopoly money.  The game lets the firm's R&D team harness the collective wisdom of the company's workers, and it has proven more accurate than any other method the company has tried.  Corporate elitists, take note: The further a worker was from the C-Suite, the higher his accuracy.

I like this story because it applies the "wisdom of the crowd" approach – as successfully used with customers by companies like Threadless – to people practices for a more productive workplace culture.

What do you think of this employee engagement activity tried by Crowdcast?  Do you see it improving your culture of ownership?

This new article about employee engagement on Management-Issues got me thinking.  While Brian Amble discusses the findings of a study of top executives in European and Middle Eastern companies, their response to one of the questions in particular is highly applicable to their counterparts in the U.S.:

• Nearly half – 47% – of C-suite executives believe they are most responsible for practices to get and keep employees engaged.
• 16% of senior directors outside the C-suite believe this.
• 13% of middle and line managers believe this.

Amble goes on to argue that the highest percentage of engagement ownership claimed by C-level folks represents a "self-inflated view" that's at odds with results of other studies finding that managers are most responsible for strong engagement – or a lack of it depending on their people practices.

On the one hand, Winning Workplaces has written in support of Amble's view that favors managers' ownership of staff engagement; most recently with the help of guest author, workplace coach Wally Bock.  On the other, though, we have attempted to balance the scale, giving voice to the feedback we routinely hear from small business CEOs as well as HR directors and managers in other areas – that based on the leader's vision (especially if they're also the founder), small company size, and a (usually intentional) flat structure, the leader assumes the role of "chief culture officer" and thus the task of guiding employee engagement performance.

I don't think there's a "one size fits all" solution – myriad factors will influence an individual firm's decision as to whose job it is to foster stronger engagement.  Still, if you have not already done so, you would do well to define what ideal engagement looks like and have a discussion among your team with the intention of assigning the best person to lead this effort.  After all, if no one leads it, how can you measure the success of the engagement activities that make up your workplace culture?

More on defining success of staff engagement activities...

Some of the questions we're asking the small businesses currently vying for a spot in Inc. Magazine next June – the prize of winning our 2011 Top Small Company Workplaces award – can help you define what successful engagement looks like, including in bottom-line results so you can determine a clear ROI for investing in your workplace.  Check them out:

• What kind of management development or training do new and existing managers and supervisors receive?
• Describe a management development or training strategy that has been particularly effective.
• How does the organization involve employees in important organization decisions?  Please give an example.
• Please share 1-2 examples of how your investment in people has improved the performance and results of the organization.
• Are there any distinctive, home grown or unique people practices you would like to tell us about that have not already been mentioned?

To answer these and many other questions that can provide you with a roadmap for cost-effective employee development strategies, complete our 2011 workplace award application.

It's become a tradition that each fall we survey the hundreds of winner and finalist organizations of our annual small-workplace award out of the thousands of firms that have applied over the last 8 years.  Earlier this month we sent them our latest survey invite – the results of which will be reported in our fourth-quarter IDEAS newsletter in November.

Even though the survey is open and not all results are in yet, there are some interesting preliminary findings I see and wanted to share with you:

• Most firms (47%) saw an increase in revenue of more than 10% September 2010 YTD vs. the same period in 2009.
• The majority (39%) also saw an increase in profitability of more than 10% using the same parameters as above.
• In the next 12 months, most (61%) expect revenue to increase more than 10% and most (53%) also expect profitability to increase more than 10%.
• The number-one action they have taken in response to the tough economy is to create efficiencies by redesigning their processes; 79% chose this from a list of 12 choices, including "No action."
• As the economy continues to recover over the next 12 months, the number-one action companies plan to take to set themselves up for success is "Investing in training & staff development to ensure they are ready for growth" (78%).  This is currently beating out "Adding new products or services" (73%) and "Ensuring solid tracking and reporting tools in place to allow proactive management of your business" (69%).

In case you're wondering, this feedback is coming overwhelmingly from the top: 79% of respondents are CEO/President of their organization.

These findings continue to support our case that investing in your workplace to create meaningful staff engagement activities within a nurturing culture of ownership can have a powerful and lasting impact on the bottom line – even in a down economy.  We extend our sincerest thanks to our honorees for taking the time to provide us with this informative feedback.

To see the full, final results of this survey, sign up today to receive our free IDEAS newsletter.

Yesterday I wrote about the underreported story of how more states enacting hands-free driving laws for public safety is having the side effect of helping sales for headsets and other electronic retail businesses.

Another story I feel has gone largely under the radar in the national media is how employee stock ownership plans (ESOPs) have helped organizations – especially small ones – insulate themselves during tough economies like the current one.  I've explored this in past posts like these two, as well as this more recent one from April where I show that among Winning Workplaces' 40 finalists for our 2010 Top Small Company Workplaces award, the 7 that are ESOPs have posted greater average 2009 revenue and 3-year revenue growth, and a greater share of them are profitable, than the 33 that are not.

As October is Employee Ownership Month, I thought I would help celebrate the payoff of employee engagement and team building that's associated with these programs by sharing the following 5 videos we shot of leaders from some of our award-winning small businesses that are ESOPs.  Be sure to have your notepad handy as you watch them – the subjects offer tips that you can use to implement or improve upon an ESOP in your organization for a stronger workplace culture of ownership.

(If you are viewing this in an RSS feed, you may need to click here to see the videos.)

Bill Loskutoff, Jackson's Hardware - Retail - California:

Sarah McGinley-Smith, King Arthur Flour Company - Manufacturing, Retail - Vermont:

Wally Bateman, Paducah Bank & Trust Company - Financial Services - Kentucky:

Bill Marshall, Phelps County Bank - Financial Services - Missouri:

Mike Foley, Reflexite Corporation - Manufacturing - Connecticut:

Related: Longtime ESOP expert and speaker Corey Rosen of NCEO hosted a webinar for us on options for transitioning ownership.  Access it here.

Image credit: ESOP Association/Entertainment Partners

Despite the very tough job market right now, many applicants have one or more kids and therefore family-friendly benefits remain a top priority.  Some parents may even take a pay cut if they can still get employer-provided childcare assistance or flexible work arrangements.

These folks are in luck.  Yesterday I did some digging into our employee engagement research data for our Top Small Company Workplace award at the request of Carla Moquin.  Carla has been hard at work developing a pilot babies-at-work program within her Parenting in the Workplace Institute and is now looking to roll out the program on a large scale, so she wanted to get a sense of which firms across North America are already receptive to helping workers manage their family life through their benefit offerings.

Of our 1233 award applicants from 2008-2010, 545 who applied in all three years offer childcare assistance, and 335 who applied in 2009 and 2010 offer flex work arrangements.  (We did not ask about flex work in 2008.)

I was able to sort applicant companies that offer both of these benefits by industry, to see the top industries that offer, respectively, childcare assistance and flex work arrangements.  Click on the thumbnails below to view larger versions of each chart (if you're reading this in an RSS reader, you may need to click here to view the thumb images correctly).

As you can see, if you have children and you view these two benefits as nonnegotiable, you would do well to look into the top industries:

• Consulting
• Software
• Internet/Information Services
• Advertising

I should mention that while we also did our Top Small Workplace award in 2007, in that year we asked applicants for a description of the company's business rather than to select from a list of industries.  So I didn't include that data because I couldn't compare apples to apples.

Do you see these benefits as contributory to a company's workplace culture of ownership?  And how do you see investment and involvement in these people practices playing out in the next few years?

As I blogged about in June, the Telework Coalition has found that when businesses support working remotely as part of their people practices, productivity can increase by more than 20%.

The dangerous flip side of revising your human capital strategies and updating your technology around this, though, is that allowing your workers to use mobile and wireless computing – as two-thirds of the top 100 U.S. companies do, according to the Coalition – can lead to more breaches of your data.

If your company is embracing remote work in a big or even a moderate way, you will surely benefit from the following tips for securing your mobile workforce.  I received them via email from Brian Lapidus, COO of Kroll Fraud Solutions.

1. Provide employees with comprehensive security policies and procedures – and make sure they are realistic.  A clear and concise security policy that establishes the roles and requirements of employees is absolutely essential to ensuring a successful mobile workforce.  The policy should specifically outline security measures and procedures for handling sensitive data, including storage and disposal.  When faced with limited capability due to tight security protocols, even well-intentioned employees will find ways to “bend” the security rules – including abandoning the corporate-issued device altogether in favor of their own PDA or smart phone.  It’s a difficult task, but organizations must strike a balance between convenience and security and policies must reflect the organizational goals in this regard.  At the same time, they must address fundamental issues, including device ownership, data ownership, destruction of data, and rules of behavior.
2. Consider what types of devices employees will be allowed to use. Many organizations will opt to manage a mobile device program by providing employees with company-issued equipment; however, a company might also choose to allow employees to use their personal mobile equipment for business purposes.  Providing equipment gives the company more control over security issues, but employees must be provided with explicit instructions for the care and usage of the devices (i.e., never leave laptops unattended in public, never download and install programs without company approval).  Even if the organization allows employees to use their own PCs, certain minimum security measures must be in place, such as firewalls, anti-virus and spyware programs, and encryption software.  
3. Make sure employees receive adequate training.  To make security a priority with employees (and to make the most of what can be a considerable investment), it’s important to provide a training program that focuses on real-life scenarios and defines exactly what they can/cannot do with client or company data.  In the case of laptop and network use, ensure that employees fully understand how to access data securely.  Remote workers should be trained periodically in techniques to spot suspicious activity, including signs that a computer has been infected with malware.  Unless they receive this education, it’s likely that basic human nature will dictate employees’ behavior more than anything else.  The truth is that out of the office, distracted by other duties, security becomes lax.  Proof of employee training is also important to limit organizational liability in the event of a breach.
4. Inventory devices and develop an audit plan to periodically assess risk.  Even if the company’s IT department has remote management capability, it’s important to verify firsthand that all equipment is in good condition and working properly.  This is extremely important for the day-to-day management of mobile device use and security: enforcing policies, managing vendor contracts, ensuring timely software and encryption updates, evaluating the flow and storage of sensitive data, etc.  Risk assessments should be performed periodically, depending upon the size of the organization and the number of devices managed.

Related: Outside of technology-focused tips, there are a whole host of things you can do to support your mobile workplace culture.  This post shares 9 additional employee engagement strategies.

Last week my wife had a birthday, so in celebration we decided to spend part of the day miniature golfing in Sherman Oaks.  On the way back home, I noticed that the Bookstar Barnes & Noble in Studio City was using its marquee (the building used to be a movie theater) for a very important purpose – to recognize its employee of the month.

Here are pics I took of both sides of the marquee:

I write almost exclusively about employee engagement and recognition in small businesses – because of their small size and typically reduced hierarchies/flat structures, they tend to shine in making employee rewards and recognition meaningful.

But that doesn't mean the "big boys" can't excel here, too; the pics above are a great example of this.  Can you imagine if more organizations – of all sizes – put employee recognition front and center at the same level as their product news?  I can, and I think the result in terms of a more robust culture of ownership and team building would be substantial.

Have you seen any businesses in your area that do employee recognition in big or unconventional ways?  I'd love for you to add a comment pointing me to links to photos – especially if they're your own!

In a post on the Business Insider blog re-posted from his own blog, GRP Partners' Mark Suster argues that leaders should solve problems and drive innovation from the top.  He writes,

I challenge you to consider whether you’re top-down or bottom up.  In analysis there are always circumstances for each approach.  But in leadership and entrepreneurism the top-down approach will be the right solution more often than not.

Now, I get that Suster is not saying that leaders should engage employees from the top down 100% of the time, but he is saying it should happen this way the majority of the time.

However, in our experience conducting employee engagement research of small businesses as part of our annual workplace award program, we see that management and decision making can happen in many different ways to lead companies to success in the metrics that ultimately matter: sales and profitability.  Our President detailed four decision-making approaches that run this gamut in these two posts.

Three of the four approaches she wrote about involve bottom-up decision making in some capacity.  And in fact, in the applications we received for our 2010 Top Small Company Workplaces award, we saw bottom-up engagement factor prominently in the qualitative feedback of some firms that are performing quite well, even in this tough economy. 

Check out four case studies that bear this out below.  All four companies have been profitable in the last three years.

Application Question: How have your organization’s people practices contributed to your top line revenue and bottom line profitability?
Response by Bronto Software
8-year-old software firm from North Carolina
2009 sales: $5.1 million; 132% 3-year sales growth
At Bronto we have a sales team who is instrumental to our success.  Because of our organic funding, growth comes from bottom up.  Employees have directly influenced consistent new client growth along with amazing client retention.

Application Question: How does the organization encourage employees to participate in important business decisions?
Response by Barhorst Insurance Group
17-year-old financial services firm from Texas
2009 sales: $6.9 million; 16% 3-year sales growth
Our organization is built on a foundation of bottom up planning!  Every year we have the branch managers provide a sales and expense plan that is fed into our annual corporate plan.  In 2008 and 2009 we completed or long term 2020 strategy to grow from 50 million in sales to 1 billion in sales.  The strategy team was comprised of 10 mid level associates from each department.  The team received feedback from their peers and developed a strategic road map for the future.  This plan includes monthly and quarterly progress reports to the leadership team.  The strategy team will begin rotating new team members through in 2010.  By using a bottom up method employees take ownership for the company's success and failure.

Response by Intermark Media
11-year-old advertising firm from New York
2009 sales: $92.7 million; 161% 3-year sales growth
At Intermark Media we believe changes in the company should be driven from the bottom up.  The employees who are interacting with our clients everyday have valuable insight into what processes work well and what changes need to be made to better meet the needs of our customers.  We encourage all employees to be a part of our decision making process at Intermark Media.  Weekly team meetings allow employees to voice opinions, discuss new ideas and solve problems.  Team leaders encourage input from each and every team member.  In addition to weekly meetings, leaders communicate daily through their email group to vote on awards, discuss ideas and concerns and get feedback.

Application Question: Over the last year, what kind of impact has the economy had on your business?
Response by Man-Machine Systems Assessment
20-year-old consulting firm from the District of Columbia
2009 sales: $8.6 million; 5% 3-year sales growth
The economy has little effect on our business.  We have continued to grow in spite of the economy and I truly believe this is because of the way we operate our business and the culture we have created.  MSA employees feel safe, and know that the owners will do everything within their power to provide work, support their needs, and care for them and their families.  This kind of loyalty is earned, and not bought.  The MSA family is strong and the support we have for one another from the top down to the bottom up allows for strength and faith as we face challenges, like the economy.

Related: We tackled bottom-up staff engagement activities in greater detail with the help of CEOs from two of our previously honored small firms in this webinar.

Some of the most (and most vociferous) comments I've seen related to the announcement of our 2010 Top Small Company Workplaces last week in the June issue of Inc. Magazine – firms whose human capital strategies contribute to their revenue growth and profitability – appear in response to this post by Manish Mehta on The Jets Stream blog, on NYDailyNews.com.

There are 87 comments to Mehta's post on the NY Jets as of this writing.  Here's what Bob from garfield had to say:

Evidently, no one at Inc. is a Jet season ticket holder.  If Inc. really wants to see how the Jets PSL sales staff do their job, they should view the movie “THE BOILER ROOM”

I've seen that movie and the Jets' sales environment is about as far from what's depicated in it as can be.  For one thing, the salesmen (I don't recall seeing any women in the workplace in the film) were given zero autonomy in their work.  In contrast, here's how the Jets answered the question in our award application, How does the organization encourage employees to participate in important business decisions?

The Jets culture, which is very employee centric and collaborative, enables the senior management of football and business to encourage all employees to share ideas and contribute even in important business decisions.  There are number of ways that we foster this participation.  The most important way is actually in the design of our new facility.  Before we moved to NJ, we had two offices in NYC and Long Island.  The distance between the offices made communication and collaboration challenging.  In the layout of our new building, open workspaces and open door policies reign supreme. The results have been phenomenal.  Managers and employees from different departments can work in small or large groups to develop creative ideas and solutions to important business issues.  A great example of an idea generated from this workspace collaboration is the "Opportunity Knocks" sales campaign for our season tickets and seat licenses.  With such a well known brand, the Jets needed to let the public know of the rare opportunity available to buy season tickets in our new stadium.  Opportunity Knocks was the result.  In the football world, our General Manager encourages his staff from pro personnel assistants to the Assistant General Manager to be actively involved in player decisions.  The scouts, as they are called, study players from college and other professional teams to develop suggestions and recommendations on who should be drafted on Draft Day or who should be signed as a free agent.  There have been many times that an employee will feel passionately about a player that they feel is worthy of the Jets uniform and the decision will be made to go after that player even if the GM is lukewarm on that particular player.  On both sides of our business and both sides of the ball, we would not be able to be as successful a football team if the employees were not encouraged to voice their opinions, share their creative ideas or be enabled to think "outside the box".

Further down in the comments to Mehta's post, greenjohnny wrote:

Sounds nice, should look good on a belt buckle but who really cares.  It's [sic] pretty good that they can make all their employees take two weeks off without pay and still get an award for best place to work for.

This relates to the Jets' answer to another, topical question in our application, Over the last year, what kind of impact has the economy had on your business? Please briefly explain how your company has responded?  Here's how the NFL franchise responded:

Football is not immune from the economic downturn and recession that has gripped the entire country.  Our local revenue comes primarily from ticket sales and sponsorships.  Our fans (customers) have been affected by layoffs, salary freezes and reductions in work hours.  Our sponsors have seen a dramatic decrease in budgets for spending on advertising.  Consequently, the Jets have been affected by a slowdown in revenue generated by ticket sales and sponsorship deals.  Over the course of 2009, we were challenged to find ways to decrease spending and cut costs.  Since our employees are the key to our success, this exercise needed to be done with layoffs as an extreme last measure.  Many teams around the NFL in the early part of 2009 were laying off their employees to save money.  ...  We froze salaries for the year.  Since we still needed to find extra savings, we made a crucial decision to furlough business employees for 2 weeks versus eliminating positions.  The furloughs were scheduled for the slowest time in our year at the end of June and beginning of July.  Employees had to choose 2 out of 4 weeks to take their furlough.  The response from employees was positive.  They were extremely grateful that they didn't have to say goodbye to a friend.  Our senior management participated as well, which made the program very credible.  It was tough for our employees to lose 2 weeks of pay, but overall the furlough program worked successfully.

In short, the Jets took a page from several of our previous honorees faced with tough decisions and chose to share the pain rather than lay anyone off.  The fact that senior leadership participated speaks volumes and, as you can see, helped maintain their productive workplace culture of ownership and high employee engagement.

I should mention that as part of our employee engagement research for our award, we conducted interviews with staff from different levels within the Jets' organization, and everything they told us about their employee practices, including what's excerpted above, checks out.  Especially for their industry, they are truly a Winning Workplace.

Related: For more on the Jets' new workplace environment, including some great pictures, check out this feature from the June Inc. Magazine.

Photo credit: Nikolas Koenig/Inc.

Deloitte has a fascinating new article addressing the merits and drawbacks of both short- and long-term organizational strategies.  Weighing each approach equally, I haven't seen a business leadership article quite like it.

But while the tables at the top of the piece that address points and counterpoints of short- and long-term approaches are unbiased, Deloitte Center for the Edge Co-Chairman John Hagel's commentary below the tables makes it clear that he thinks many executives' short term-focused strategic tweaks, based on the state of the economy over the last two years, will undermine their organizations' positioning for lasting success.

Hagel's argument is based on research for a book he co-authored, The Power of Pull, which reveals that since 1965, return on assets for all public U.S. companies has collapsed by 75 percent.  "There is no reason to believe that the long-term performance erosion will not continue," he warns.

However, based on Winning Workplaces' own employee engagement research of small, privately held businesses, it would seem these enterprises are equipped to buck the performance erosion that has hurt public firms over the past 40-plus years, and which Hagel predicts will continue to limit their potential in the years to come.  Here's why, working off the points he raises in his commentary:

• As private companies, which are not bound to post quarterly returns for shareholders as publicly held firms are, these organizations have more freedom to take the hits associated with several poorer quarters (the short term) to pivot in their strategy to realize a more profitable long term.  Ironically, a good portion of our small business honorees do have shareholders: employees in an ESOP, who, in a workplace culture of ownership, are incentivized to help leadership arrive at the best strategy moving forward, particularly when times are tough.
• Hagel attributes much of the performance erosion of public U.S. companies over the past four decades to obsolete yet entrenched management practices and institutions.  Our Top Small Workplaces operate quite differently, relying on employee engagement from the bottom up to improve practices and institutions that work, and to remove those that don't.  This speaks to the silo problem that is endemic of larger firms, and inherently much less of an issue in smaller companies.
• Finally, Hagel talks about how companies' competitive advantage tied to value creation has shifted from "owning" knowledge to developing "scalable pull platforms that amplify a company’s ability to draw out the right people and resources."  I've blogged at length about how our honored firms routinely outperform their larger peers when it comes to hiring for attitude and fit for their work environment, committing to engage employees to keep them satisfied so they won't leave, and investing in employee leadership development to make the most of their knowledge base, as well as to reduce recruiting costs involved in hiring and training from outside.

Related Post: A Winning Combination: A Long-Term CEO + Measured Growth

One of my favorite qualitative questions that Winning Workplaces asked applicants of our 2010 Top Small Company Workplaces award is, How have your organization's people practices contributed to your top line revenue and bottom line profitability?

Naturally, we received some stellar answers from our 497 applicants, and especially from our 40 finalist organizations.  I pulled out some of the best ways that the latter group, this year's finalists, use to assess their payoff of employee engagement.

They appear below.  Enjoy, and feel free to share them with your colleagues and friends using the Share button below.

1. Employees on average more likely to give 110% in tough times.
2. More employee referrals.
3. Reputation as a great employer (including industry or other accolades) results in more qualified job applicants for open positions.
4. More satisfied employees = lower turnover.
5. Less lost productivity due to employee stress.
6. Greater innovation and creativity.
7. Greater customer satisfaction and loyalty.
8. Healthy and manageable year-over-year growth.
9. Ability to hire more staff that are directly tasked with generating revenue.
10. Company in the top percentile nationally for quality, financial (gross margin, EBITDA), and/or improvement metrics.
11. Regular employee payouts whose dollars are increasing as part of a performance bonus program.
12. Greater share of projects employees undertake as part of a Google-style "20 percent" program result in new, bottom line-enhancing initiatives.
13. Creating a workplace culture of ownership in which employees don't just act like owners, but like owners that care about customers.  This helps the company to deliver on service, quality, and professionalism, rather than on price, which can undercut the bottom line.
14. Better relationships with vendors, which helps control costs.
15. More customer "wow" moments that turn them into evangelists for your brand.  The result of this on revenue and profitability can be measured with the Net Promoter Score.
16. Over 50% of business from repeat customers and/or referrals.
17. Increase in safe working man-hours, which can lower or keep steady health insurance premiums.
18. Focus on cross-training provides supervisors with additional manpower when needed, helping to maintain customer service delivery.
19. More involvement from the bottom-up in process improvement and identifying cost-saving opportunities.
20. Greater ability to fill open positions from within decreases recruiting costs.
21. Sales teams more open to team building strategies such as contests designed to increase competencies and, ultimately, close rates.
22. Internship programs tend to be more meaningful for interns, which help them grow as the company benefits in terms of labor costs and productivity.
23. Ability to benefit from bad economies by hiring top talent laid off from competing organizations.
24. Increased ability to enlist employees and even outside stakeholders (suppliers) in cutting inventory.  The increased cash that results is particularly helpful in an economic climate in which lending is tight.
25. Better customer support infrastructure in place to respond if a product/service launch or revamp is not received on par with company standards.
26. Increased ability to scale up customers at a greater rate than employees.
27. Greater tendency for employees to represent their companies while "off the clock," which can lead to new business and referrals.  One company added 2% in annual sales from the associated effort of just one employee.
28. Much more likely that all staff will agree to pay cuts or other short-term, cost-cutting measures to keep the company afloat in tough times, versus the alternative of layoffs and losing that talent for when conditions improve.
29. The development of new, in-house competencies reduces the risk and costs of mis-hires and turnover due to employees seeking growth and opportunity elsewhere.
30. More effective internal recruitment function reduces external recruiter costs.

Related: The June issue of Inc. Magazine will reveal the winners of this year's Top Small Company Workplaces competition.  It will be out next week – don't miss it!

Image credit: Best Way To Invest

We seem to be at the mercy of economic bubbles.  The housing bubble is what led the government to bail out large mortgage and financial institutions.  And while the economy seems to be steadily improving since that action was taken, Crisis Economics author Nouriel Roubini made headlines two weeks ago when he warned that "We are building the foundations of the next bubble."

However, another headline from two weeks ago made me think of a different type of bubble that seems to be building, and could be headed for a burst.  On May 10 WorldatWork reported on the results of employee engagement research by Manpower, which found that over 75% of workers said their workloads had increased following one or more rounds of company layoffs since the start of the recession.

This is to be expected – if a company's customer base does not drop off proportionally to cutbacks in talent, there will inevitably be some period of time in which there's literally too much to do, and too few people to do it.  However, close to 60% of survey respondents believe their workloads have grown "a lot."

This should be of concern to business leaders.  But what are the appropriate next steps?  I like the advice of the VP of Right Management, which conducted the survey for Manpower, as quoted in the WorldatWork article:

Encourage employees to build new skills.  Look for solutions together.  Giving employees ownership and engaging them in the discussion enhances satisfaction and commitment.  This will put the firm in a much stronger competitive position as the market improves.

This sounds remarkably like what our Chairman, Ken Lehman, advised in this Winning Workplaces editorial on why trying to "share the pain" before turning to layoffs makes good business sense.  We're now seeing the repercussions of some companies not following this strategy.

And guess what?  Small businesses on the whole may be better equipped to keep their "employee stress bubble," from a vastly increased workload post-layoffs, from bursting: Manpower reports that more than twice as many employees at large firms versus small firms say their workloads have increased "a lot."

One more thing: You may be asking, What would be the impact of the employee stress bubble bursting?  Well, we already know that in fairly good economic times, lost productivity due to stress costs companies, and our economy, over $300 billion per year.  I think a bursting of this bubble could amount to at least as much as the stimulus package ($787 billion), and maybe even up to $1 trillion.

So yes, employee stress is a big deal, and more leaders, in businesses large and small, need to pay close attention to how it manifests in their organizations.  In terms of solutions, they should turn to team building strategies like these to help build an overall more productive workplace culture – and one that gives their people a bit of breathing room.

Related: For more on the cost of job stress, read this article on our website.

Photo credit: Wikimedia Commons

This article in the May/June 2010 Ivey Business Journal takes the thought-provoking positions that:

• In recent years, leadership has supplanted management as the business world's dominant paradigm.
• However, leadership is about changing direction, while management is about executing the current direction.
• Therefore, if management is not the dominant paradigm moving forward, it should at least share the stage with leadership.

I see the argument that executive assessment and coaching consultancy principal Mitch McCrimmon is making here.  Yet, I don't know if I would always define leadership as facilitating change.  Certainly that plays a part, especially when times are better and companies can more easily expand and explore new markets.

But when I look at our employee engagement research on the 2010 Top Small Company Workplaces award finalists, I come to the conclusion that at any given time leadership is more about defining and creating a desired workplace culture of ownership.  This includes developing employees within this culture, and taking great care when bringing new hires into it.  So as opposed to change, I think of leadership as representing a path moving forward from a set point.

I guess the question I'm really asking here to define leadership is, What is the split for a CEO in being "chief culture officer" (as many leaders of our small business honorees think of themselves) versus "chief P&L strategist"?

I think with the economy being where it is now, most CEOs would consider themselves to be the latter; this makes total sense and does support change as being a central (maybe the) component of leadership.  But if a CEO thinks of him or herself more as the former, that could support the notion of an established, productive workplace culture as being the constant, with all other internal and external elements of the business revolving around that.

What are your thoughts here?