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?

This American Public Media interview from last week with Elizabeth Warren, chair of the TARP Congressional Oversight Panel, offers the following takeaways:

• The government provided over $700 billion in TARP funds, largely to big banks, to open up lending.
• But since the bailout, Wall Street banks decreased lending to small businesses by 9%.

I'm going to insert one other fact that I think is relevant, from the SBA:

• Small businesses account for over 99% of all employer firms.

So why aren't the most prevalent and needy employers – small businesses – getting the financing they need to open and sustain their operations?  Warren said in the interview that a major reason why banks are reluctant to lend to small firms is that they feel they can't do it based just on the numbers (P&L, credit rating).  "You actually have to look at a business plan to do that," she said.

This tells me that, however unfair, small business owners and leaders are increasingly forced to take up the role of salesperson par excellence to their bankers – not just providing a top-notch business plan but, ideally, showing how their people resources and workplace culture of ownership contribute to sales and sales growth, as we discussed in these two posts.

Why should small business leaders focus on this at big banks as opposed to local, community banks?  On the one hand, as this report for an American Bankers Association summit held in Washington in March states, 45% of community banks have increased their business lending.  Unfortunately, they control less than $1 billion in assets.  By comparison, the co-author of the best-selling book 13 Bankers reports that the six largest banks control assets equating to 60% of our GDP – roughly $8.5 billion.  As with products in the marketplace, business leaders are inclined to go where the money is.

What do you think about the value of small business leaders reframing their approach when dealing with their bankers, especially at big banks, to go behind the numbers and stress the impact their employee engagement activities have on their current and future success?

Since I wrote my very first post here back in summer 2008, I've been an ardent defender of Generation Y whenever I hear of the media painting them with a broad brush using terms like greedy, arrogant, and entitled.

I've tried to do this, while sticking to this blog's focus on employee leadership development and creating a workplace culture of ownership, by highlighting Gen Y business leaders that buck the above, media-friendly attributes, in both their leadership style and in the employees they recruit and develop.  Two of these are Jason Fried of 37signals and our Best Boss, Nick Thomley of Pinnacle Services.

But is another, much more well known Gen Y business leader – Facebook's Mark Zuckerberg – setting things back for his peers?  I'll share with you three exhibits culled from recent news on Zuckerberg and Facebook, and let you be the judge (and offer your opinion, if you wish, by commenting below):

• Exhibit A - Greed: This week on CNET, Caroline McCarthy lists 10 incidents in Facebook's brief history that she describes as their "follies."  Perhaps most controversial are the claims by founders of Harvard University's ConnectU social networking project – a precursor to Facebook – that Zuckerberg joined them as a programmer of the project, then "stole their code and intellectual property" for his own gain on what would become Facebook.  There may be validity to this claim, as Facebook settled in court with ConnectU in 2008.
• Exhibit B - Arrogance: Also this week, instant messages surfaced purported to be from Zuckerberg circa 2004, shortly after he launched Facebook from his Harvard dorm room.  You can read the purported IM transcript here; they reveal a profane disdain for users of his then-very-small social networking platform.  Some claim Zuckerberg's attitude toward his "customers" at that time still manifests in the company's changing and complex approach to handling user privacy today, which brings me to...
• Exhibit C - Entitlement: As this visualization shows, Facebook has indeed been intentional about updating its user privacy controls often since its founding in 2004.  This has led industry observers like Jeff Jarvis to advise that "If Facebook were smart... It would not change its privacy settings and policies constantly.  Set it.  Explain it.  Stick with it."  These frequent changes, many of which have been implemented and announced with no warning, have led some experts to conclude that Zuckerberg and company have and continue to operate with general disregard for their constituents.  In other words, with a sense of entitlement.

One trend I find revealing is that as Facebook makes the information it gathers from users more public by default (users still retain the option to make it private), more of them are reacting by seeking out guidance on deleting their accounts, as evidenced by this Google Trends search for "delete your facebook."  In an e-newsletter I received today from WebProNews, one industry expert thought this wouldn't make much of a dent in the size of Facebook's user base.  Still, it could turn away folks who would otherwise be around as a target audience for Facebook's increased efforts around ad sales and other, user-based sources of revenue.

Yesterday the company held an unprecedented all-hands meeting to discuss the controversy over its recent privacy changes.  I hope that Winning Workplaces-approved employee engagement practices factor into this and any future meetings on the subject, for the good of both Facebook and its employees, and the millions of users of the platform.

What are your thoughts?

Photo credit: Wikimedia Commons

I just heard, via Aaron Juckett's One-Stop ESOP Blog (which I've cited here often), that Van Meter Industrial will be presenting at a session at the ESOP Association's 33rd Annual ESOP Conference in Washington, DC, this Thursday.  Based in Cedar Rapids, IA, 82-year-old Van Meter is a wholesale distributor of electrical, automation, lighting, data communications, and power transmission products.

Van Meter is also one of 40 finalists for Winning Workplaces' 2010 Top Small Company Workplaces award.  I can't get into too many specifics about the company, because if they're named a 2010 winner our media partner Inc. Magazine will discuss them at length in their June issue.  However, I can say that thanks to a number of solid practices that promote a culture of ownership and a more productive workplace at Van Meter, they did about 7% better than their market in 2009.

For more information about this week's ESOP Association conference, click here.

Last week on the Blogging Innovation site, business speaker and strategic advisor Stefan Lindegaard suggested that,

Perhaps we do not have to break down silos to drive more innovation.  Perhaps we should just accept the silos and work around the issues they can create on innovation.

I think there are some instances where working around silos, which can hamper communications team building, is warranted.  However, if your business is on the smaller side – especially if it has 100 or fewer employees – you really should be working to completely break them down and prevent them from being built back up.

Why?  Winning Workplaces has seen in our employee engagement research and consulting and training work inside small firms that getting rid of silos promotes stronger employee engagement.  This, in turn, helps organizations achieve desirable, bottom line-enhancing metrics like those listed here.

There are two major strategies that I've seen companies use, sometimes in tandem, to break down silos:

1. Purposeful workspace design, and
2. Innovative workplace team building.

What follows is brief descriptions of how seven small firms in our network succeeded in breaking down silos in their workplaces, organized under the above two strategies for doing so:

Workspace Design

Decagon Devices
Office doors are seldom closed and work spaces are grouped together without barriers at this Washington-based firm, which facilitates more of a free-flowing brainstorming atmosphere into the work itself.  However, Decagon takes it to the next level.  They believe that leading departments and work groups should be a rotating assignment, not a permanent title with an attached office.  Their structure is much more fluid and open because it leads to greater ingenuity, and risk taking.

Jackson’s Hardware
This California-based company, which has grown from 5,000 square feet and five employees to 50,000 square feet and 63 employees, operates with a totally open office floor plan.  Every manager including the President and CEO has his or her desk in the open platform office.  With this type of floor plan, Jackson's managers are able to give guidance and support for almost every project or task instantly.  This allows them to draw upon the unique talents and strengths of all of the different managers and results in efficient problem solving.

Jump Associates
Another California-based company, Jump's work environment, known as JumpSpace, provides dozens of different work spaces, such as Zen Rooms, Project Rooms and a black-box theater Performance Space, that support a wide variety of interactions and working styles.  Employees comment that this kind of playful, open-hearted space makes it safe to explore, because everyone who works there is committed to each other’s success.

Phenomenex
Yet another California-based firm, Phenomenex’s work environment is designed to breed familiarity, comfort and collaboration.  All work areas have stimulating and comfortable open floor plan designs filled with color, antiques and modern art.  They have an on-site gym and game room that are in constant use.  In addition, to relieve stress and recharge their hardworking employees, the firm has set aside a quiet room for them to
take naps, read or meditate.

Resource Interactive
This Ohio-based firm with 261 employees demands constant collaboration among staff.  Their employees express a great deal of pride in their work environment, in large part because it was designed with a considerable amount of their input.  Among other things, their workplace is dog friendly and is dotted with skateboards and satellite radios.

Team Building

American Speech-Language-Hearing Association (ASHA)
A decade and a half ago, the staff at Maryland-based ASHA was struggling to work as a cohesive team.  Executive Director Frederick Spahr referred to the silos that had developed as "fiefdoms."  Spahr and his associates developed a facilitating team composed of him and five chief staff officers to oversee the office.  Employees regrouped into teams and clusters led by coaches instead of managers.  These changes created a flattened hierarchy with no more than three layers to the top.

The Redwoods Group
According to an employee of this North Carolina-based firm, "The traditional insurance industry is known for working in silos of underwriting, claims, loss control and actuarial services. But at Redwoods, it’s all about the team.  We intentionally formed regional multifunctional teams reporting to regional vice presidents, instead of technical vice presidents, to break down barriers.  The result is common ownership of results and compensation based on company results.”

Has breaking down silos improved your workplace culture and productivity?  I invite you to share your experience by commenting below.

What follows below might seem like a contradictory argument.  After all, I commented last week on Mediabistro's Facebook page, in response to Apple CEO Steve Jobs' controversial proclamation that "Flash is no longer necessary,"

Of course he would say that.  One of Apple's Laws (or maybe Steve's Laws) is that if it doesn't work on an Apple product, it doesn't exist.

Yet, what I'm talking about here today isn't what Jobs said, or my bias toward it (speaking as a web developer who is just getting into Flash).  Instead I am commenting on, and supporting, Jobs' right to speak his mind as CEO of his company.

Today SmartBrief on Leadership, summarizing this BNET article from last week on Jobs' Flash remarks, recommends that CEOs keep their thoughts to themselves.  I actually think – provided their board of directors is, ahem, on board – that CEOs should speak their mind when so compelled.  Here's why:

1. If you're a small business owner without the clout of Steve Jobs, speaking your mind will help elevate your brand above the clutter.  Environmentally friendly household products maker Seventh Generation, which only recently started airing national TV commercials, doesn't yet have the brand recognition of a Clorox.  But their chairman's headline-making stand last month that he wants to be taxed more undoubtedly got his business on a lot more folks' radar screens.
2. Increased respect from your target audience.  Of course, there will be some dissenters – maybe even the majority in some cases.  But this is also good because it gets a dialogue going, which a company can dissect to get a sense of where they are relative to their customers as well as potential customers.
3. Most importantly from a cost and revenue standpoint, a CEO speaking his or her mind can provide clarity for prospective job candidates on whether they want to join your organization.  And as we know from our Top Small Company Workplaces employee engagement research, more like-minded, fired up folks knocking on a business' door helps them identify and bring on board people who will, on the whole, be a stronger fit for their existing workplace culture of ownership, helping to decrease recruiting costs and boost long-term innovation and productivity.

What do you think – if a company's board has given the green light, do you think it's OK for a CEO to speak his or her mind very publicly, even if that position could spark a backlash?

These days, with the economy being where it is, one of small business leaders' big pursuits is getting their arms around innovation and using it to grow sales and the bottom line.

But as John P. Benfield wrote on Blogging Innovation last week, innovative strides that are less tangible in terms of your balance sheet can be powerful because they reflect the payoff of employee engagement – or more specifically, your ability to create a highly productive workplace culture.

Open communication, fast failure, driven-down decision making to build a culture of ownership – all of these traits of a Top Small Workplace can come to the fore, Benfield writes, when leaders drill down to the next level, below profits, when tackling innovation.  Concluding, he advises that

even if your innovation program isn't delivering the next game changer, the existence of a formal, supported program can provide significant value by developing, growing and maturing your workforce, culture and company as a whole.

Read Benfield's full article here.

I wanted to pose the question that's the title of this post to you because I noticed something interesting when I pored over data from Winning Workplaces' 2010 Top Small Company Workplaces award applicants and finalists today.

The table below shows how the average share of a company owned by the CEO, and the share owned by non-management employees, compare among all our applicants (497 firms) and our 40 finalists that we announced last month:

We see, at least in our total survey sample of just under 500, that as CEO ownership goes down, ownership by non-management employees goes up.  And when compared to this year's entire applicant pool, our finalists posted better outcomes including lower turnover, longer employee tenures, and greater overall profitability (see this post for more on how our finalists edged out the other applicants).

As the post mentioned above shows, the finalists enjoy more productive workplaces on the whole due in part to their greater investment in employee benefits including medical insurance and flex practices.  But their (again, overall) stronger culture of ownership seems to also play a role in their impressive business results.

Is it true that turning over more ownership to employees, and a CEO involving employees to a greater degree in key business decisions, improves productivity and the bottom line?  What do you think?

In a telling new study of 7,000 small businesses by email solutions provider Constant Contact, only 12% of respondents were able to secure additional financing in the past year.  (Showing the poor state of the credit market, a remarkable 72% of those surveyed didn't even try to seek additional funding in the past 12 months.)

Whether these organizations would be more apt to try if they placed more stock in fostering a workplace culture of ownership – as our Top Small Workplace honorees do – is one thing.  But our employee engagement research shows that, at least to a small degree, they would be more likely to succeed if they did try.

One of the questions we ask our award applicants is: Has the company raised or received investment from outside investors?  While 17% of all 497 of our applicants in 2010 said Yes to this question, 20% of our 40 finalists said Yes.

I think there are two major factors going on that give our finalists a slight edge here:

1. As Brian Boorstein of private investment firm Cranite Creek Partners hinted at in the first of a series of guest articles for Winning Workplaces, there is a virtuous cycle that can greatly benefit firms in which better informed financial decision making helps create stronger team building and work environments, which through the bottom-line outcomes that produces gives leaders more leverage at the bank (or with VCs or other financiers).
2. There's also a whole dynamic – almost a psychology unto itself – of leaders being successful in representing their businesses to banks, and personally dealing with bankers, for maximum benefit in securing additional financing, and how much they can get.  Synthesis Solutions President Jim Stoynoff provided 7 tips in these two posts for leaders to use; our honorees are putting many of them to good use.

Related: One or our most recent Executive Learning Series Webinars featured the CEOs of two of our award-winning small banks talking about even more ways to deal with your bankers and financial institutions.  Access it here.

Along with Patagonia, one of our higher profile 2010 Top Small Company Workplaces award finalist organizations has to be the NY Jets.

Founded in 1963 and now one of 32 member franchises of the National Football League, the Jets got an entrepreneurial reboot when "reclusive billionaire" Woody Johnson bought the team in 2000.  Since then smart leadership, along with unsurpassed workplace team building and people practices (especially for the NFL), have led the team to the playoffs four times.

While their player stats and key management figures are widely known, less known is how employee engagement has contributed to the Jets' success.  Luckily, this is what our award application measures.

Here are three facts you probably don't know about the Jets' workplace culture and its impact on business results:

1. The 160 players and support staff view newly hired head coach Rex Ryan as emblematic of their "brash, risk taking" culture of ownership.
2. Decisions such as offering a generous relocation package to employees when the team moved to a new facility in New Jersey in 2008 and spending five figures per employee on tuition reimbursement have led to a strong average employee tenure of 5 years.
3. In contrast to other NFL teams that are facing falling ticket sales, the Jets' progressive leadership and employee development strategies led to revenues in 2009 that were up 11% over 2008.

Related: Click here to view the complete list of this year's Top Small Company Workplace award finalists and see where they're located throughout the country.  The winners will be announced in the June issue of Inc. Magazine.

Last week's blog asked you the important question: How is your decision-making style impacting your organization's results?  I asked you to think about your style and how it affects employee engagement, team building, and open communication in the workplace.  As many of you know, these things have a direct impact on your business results.

Last time I reviewed two of the four main decision-making styles: Autocratic and Democratic.  Participative and Consensus are next.

The participative style of decision making is when the leader involves the other members of the organization in the process.  Participative decision making is a way of building engagement making people feel good about their involvement.  This style can foster open communication and positively impact the culture.  This style won't improve the culture of ownership; that is because it still leaves the final decision in the hands of the leader.  How do you think this style would impact YOUR business results?  Do you see both right and wrong situations to engage this style?

The last decision-making style is consensus.  Here the leader gives up complete control of the decision; the full group is totally involved in the decision.  While this style would certainly help build a sense of ownership, I have to tell you that this is my least favorite style.  Not because I have a problem giving up control but, rather, because of the incredible amount of time it takes and secondarily the fact that many people may not have the knowledge or experience to "vote" on the decision.

Having said that, there are situations where a consensus approach makes sense.  The benefits can include building trust in the workplace, team building, increased employee engagement, and a more productive workplace because people feel so much ownership for the decision.

Clearly, no one style is right for all the situations leaders face in the workplace.  Have I gotten you thinking, though?  Are you wondering how your decision-making style is impacting your people?  Your business results?  I'd love to hear some of your stories.

Yesterday on the Fistful of Talent blog, Marisa Keegan wrote what I think should be the definitive, concluding statement on the age-old debate of whether it's best to hire for attitude or skills.

She writes,

[I]f you're like most companies out there who think you care about what your customers want, I'm challenging you to see your company through your customers' eyes.  Are you really giving them the service that will keep them coming back for more?  If not, it's time to re-evaluate your hiring practices and maybe it's time to ... start hiring for attitude instead of talent.

Does this seem counterintuitive to you?  You might be thinking, At a minimum I need to ensure a candidate can perform the responsibilities we've set that will help grow our business.  That means hiring for skills.

Obviously a candidate must be competent.  But it's much more important to find the person who will enhance the team building and culture of ownership you have in place.  This is why our Top Small Company Workplaces bring candidates in for so many interviews before making an offer – they want to make sure the person has the right attitude and fit for their workplace culture.

Mike Faith, one of our Best Bosses, explained this approach quite succinctly at a "60 ideas in 60 minutes" session at our 2007 annual conference:

We place attitude and personality over skills nearly all the time.  We can train skills, but changing personality is a pretty tough job.

Indeed.  And it's that better-fitting personality that improves not just internal metrics like absenteeism and presenteeism, but – more importantly for your bottom line – your ability to turn middle of the road and even dissatisfied customers into customer evangelists.  It's these evangelists that drive your repeat business and referrals.

Do you disagree that hiring for attitude and fit always trumps skills?  Let me know by commenting below.

Winning Workplaces has seen much evidence in our employee engagement research that practicing open-book management (OBM) – sharing all financial details, except payroll, with employees on a regular basis – is good for the bottom line.  This is why the majority of our Top Small Workplace award-winning firms turn to this practice.

Nancy Dittmer added another business metric to this discussion in her post last week on the RSM McGladrey ESOP Blog.  She shared how a company was able to link the use of this practice to their ability to decrease their annual days of sales outstanding (DSO) from 51 to 45.

This company set a 2010 DSO goal of 42, and Dittmer says they've already hit it.  That's an improvement of almost 18% since they started using OBM!

While there's no doubt that opening the books is a powerful practice in and of itself, I've noticed that it is often a springboard for other employee engagement best practices designed ultimately to increase productivity.

For example:

• Our Success Story on IRMCO shows how the leaders' use of OBM has helped to create a culture of ownership and driven-down decision making at the manufacturing firm.
• Our 2007 TSW Data Report on that year's award winners highlights Reflexite (another manufacturer) as a company that uses OBM as the main impetus to host all-employee meetings at all of its work sites, which lead to discussions on quality and process improvement.
• Our 2008 TSW Report tells how at Paducah Bank and Trust, OBM is woven into the training for incoming folks: Taking advantage of their small size, their CEO meets with all new hires and shows them how the business makes money.

Looking to really dig into OBM?  Here are some Next Steps for you:

1. Access our webinar recording featuring Rich Armstrong, President of the Great Game of Business.
2. Register to attend the Great Game's 18th Annual Gathering of Games Conference this May in St. Louis.

The goal of this week's blog is to get you thinking about your decision-making style and, more importantly, what that style means to your workplace culture and workforce effectiveness.  Said another way, how is your decision making style impacting your organization's results? 

As a leader, have you ever thought about the number and types of decisions you make every day?  Have you considered how you make those decisions?  What about the implications of your decision-making style on employee engagement, team building, and open communication in the workplace? 

Most of us probably remember this from Management 101: The most commonly used styles are Autocratic, Democratic, Participative, and Consensus.

"I'll make the decision and you go get it done."  "No, I don't need any input; I know everything I need to know to make the right decision."  "I'll handle it; I always do and it turns out fine."  To be fair, the autocratic style is appropriate when a fast decision is required.  Otherwise, this approach ignores the importance of engaging employees and the possibility that "two heads are better than one."  It also has a dampening effect on building trust.  Do you think overusing this style might affect your business results? 

"Let's vote on it; the majority rules."  "I know we are doing it, but I didn't vote for it."  This democratic style has some advantages including building trust in the workplace and supporting open communication.  But who really "owns" the outcome?  It is easy for employees to claim, "I didn't support that" or "I thought he was doing it because he voted for it."  That reaction to the democratic style eats away at a culture of ownership and hinders your effectiveness.  Do you think overusing this style might affect your business results? 

What decision-making style do you use and how is it affecting your bottom line?