I enjoyed this post by Susan Fronk on the America's Best Business Practices blog.  In it she argues that the one thing that can most positively impact your small business – over and above measures to grow revenue, cut costs, and deliver excellent customer service – is finding and keeping great employees.

She provides more value later in her article by sharing three ways small businesses can build a more productive workplace culture by attracting and retaining great employees:

• Do a good job of recruiting and hiring,
• Create a great working environment, and
• Build relationships with your employees and foster relationships among employees.

I thought I would expand upon Fronk's informative post by sharing with you some specific ways that Winning Workplaces' 2010 Top Small Company Workplace award winners find and keep great employees:

1. Hire slow.  It's not uncommon for job candidates to go through as many as 8 interviews before a hiring decision is made.
2. Hire for cultural fit.  This includes not just when a position is open, but generally when someone looks like a good fit for the organization; a number of firms prefer to keep their feelers out and plug someone in when they come across that person.
3. Grab top talent from competing firms.  Top talent is top talent, and our winning small companies are unabashed about leveraging a bad economy that has forced competing firms to shed staff to their advantage.
4. Systematize the orientation/onboarding process.  Many companies do a good job during the middle period of an employee's tenure, but few are exceptional at the beginning, a critical time for new hires.  Our Top Small Company Workplaces really excel here by doing things like mentoring and scheduling meetings with the CEO to ramp up the new employee's understanding of and commitment to the organization.
5. Managers have frequent contact with their subordinates.  For many small companies, managers only interact one on one with employees, to review performance and also their top concerns/hurdles, every three months.  Our award-winning firms typically do this every two weeks to a month.  This helps better engage employees for greater commitment, and also helps firms react to emerging issues sooner.
6. Invest in employee leadership development.  The Top Small Company Workplaces share a belief that they are best served when their top talent stays to fill and create roles of increasing responsibility, and they have seen results from their action on it including process improvement, product innovation, and better customer service – not to mention mid- and top-level employees who stay longer, keeping recruiting and training costs down.  As far as their specific leadership development strategies, see this post.
7. Give employees a voice in the decision making.  Lots of companies have an open door policy, but this no longer cuts it if you want to foster two-way communication that results in greater employee engagement and productivity.  Our award winners give their employees a voice by holding daily huddles and frequent (at least once a month) all-hands meetings.  In addition, many of them open up their books and explain the company finances so people gain a crystal clear understanding of how their role affects the top and bottom line.
8. Do employee recognition.  I've blogged before about how recognizing your staff can be meaningful and still inexpensive.  Often times a simple, face-to-face thank you or small gift personalized to the employee can make a powerful impact.
9. Be generous in providing time off.  More employers need to come to the realization that being flexible around employees' personal and family obligations makes for a more committed and productive worker.  Paid time off should be a primary consideration, but if that's not in the budget, being flexible – especially for unanticipated obligations – through measures like cross training will help immensely with retention.
10. Empower workers down to the lowest levels to make good spot decisions.  This involves a lot of trust from leaders and some additional training, but when it works it makes a dramatic impact on business results.  Just think how much happier you've been when you've called a vendor and you didn't need to be transferred up the phone/responsibility chain to have your issue resolved.  The same sense of satisfaction can mean the difference in whether your customers or clients come back to you and refer you to others.

Is there a measure you think should be in this list?  If so, I welcome your comment on it below.

Mike Michalowicz has a new, informative post on his Toilet Paper Entrepreneur blog on 12 ways that entrepreneurs are wasting money.  The tips he provides for things to avoid, culled from small business leaders in his network, include obvious ones such as hiring a web designer who can't deliver from the end-user perspective, and ones that are less obvious or might even spur outright controversy such as attending trade shows and investing in billboard ads.

No matter how you feel about the 12 tips offered, their overall savings potential is undeniable.  Still, when I reviewed them all I noticed they address efforts largely on the customer end, and not necessarily on the employee side – ie, workplace team building and employee engagement strategies.

Therefore, I thought it would be stimulating to put together a list of 12 people practices – or more accurately, the absence of which – that leave entrepreneurs ultimately at a disadvantage when it comes to attracting and retaining top talent, and leveraging them to deliver continually better results for customers and the business.

The table below links to our blog posts and website articles for more information on each best practice listed.  And while it's almost impossible to attach a dollar value to each one – because industries, missions, target markets, and products/services vary so significantly – I attempted to rate them on a relative scale of financial impact on an organization with a dollar sign ($) scale.

Check it out:

What do you think of this list?  Which employee engagement practices are you using, and which are you not?  I'd especially appreciate your feedback on where you think each of these rates in terms of financial impact – do I have one or more out of place based on the scale I used?

As I've been in the past, once again today I was taken aback when I read one of SmartBrief on Leadership's article summaries.

Linking to David F. Carr's new commentary in Forbes, SmartBrief writes,

If workers are inadvertently becoming indispensable, rearrange things to cover your back, he suggests -- and if people are deliberately hogging power and knowledge, then move quickly and sack them while you still can.

When you factor in the cost of hiring a new employee to replace a "power-hogging" one that leadership was highly dependent upon – or, at a minimum, the cost to train one or more employees to pick up the slack of that person – there may be more desirable options than termination.  After all, isn't this what cross-training, which so many of our small business honorees practice, is designed to protect against?

Our Top Small Workplaces are undoubtedly key person dependent; in fact over half of our 2009 winners have 20 or fewer employees.  But by creating opportunities to engage employees, bringing them together to share their knowledge, you can strike a balance between having a person on a small team wear several hats and retaining them, knowing that other employees are prepared to step in to do that person's job during both shorter and longer periods.

At our Top Small Workplaces, these opportunities commonly include:

• Lunch and learn sessions
• Monthly or quarterly all-hands meetings
• Daily huddles
• Mentorship programs
• Company intranet

Related: Speaking of people practices for a more productive workplace, another instance where you may want to pause before pulling the trigger is with low-performing employees.  Read why here.

SmartBrief on Leadership referred me to this article by UK-based executive coach Gill Corkindale on the Harvard Business blog.  The gist of Corkindale's argument is that leaders can be most effective when they balance the usual inward (inside organization) focus with an outward one.

Traits of "out" leaders, she says, include building networks, managing their visibility, and engaging with peers outside their companies.  However, these additional "out" traits Corkindale stood out to me:

• Get involved in cross-organisational initiatives
• Engage in organisational politics

In other words, dig deeper than a focus on results/deliverables and surface-layer workplace team building – find new ways to engage employees and design communication initiatives so you can see issues from their perspective.

In short, shake up your leadership approach!

Here are six ways to do this, as used by companies Winning Workplaces has honored for their success in realizing the payoff of employee engagement:

1. Get known for walking the halls and being approachable by employees at all levels by doing exactly that on a regular basis.  See: Clearbrook
2. Start an award program for above-and-beyond performance where you, the CEO, bestow it.  It doesn't have to be a cash award, either – it could merely be something specific to your workplace culture.  (Bonus: Form an employee committee that decides the winner, so the award is "by employees, for employees.")  See: SmartPak
3. If you're in a service industry and you don't already do this, train to be able to do what front-line employees do every day to boost camaraderie, credibility, and commitment.  See: Aquascape, Gentle Giant Moving, Restek
4. Not to get all Olivia Newton-John on you, but get physical!  This can take the form of daily or weekly huddles, or on the more ambitious side, theater-style team building exercises.  See: 1-800-GOT-JUNK?, Jump
5. Actively involve as many employees as possible in the business strategy to spur innovation and boost retention.  See: Corporate Ink, Exactech
6. Supplement the strengths of your leadership and/or HR team by bringing in outside coaches to improve employees' skills so they will perform better for you, and be better prepared in their careers (which, ironically, also tends to improve retention).  See: Headsets.com

Photo credit: Steve Spangler Science

This week Soh Yun-Huei, who lives in Singapore, said on Twitter,

Team building shouldn't start so early in the day

Indeed, I've seen a number of tweets over the past few months from employees who feel the same way.  It's understandable – we generally have different times for optimum absorption of the learning and fun that covers the gamut of most team building activities for the workplace.

For their part, the small businesses we've honored for getting employees engaged as a means to improve business results use the timeframe of lunch to after the shifts ends around 5 or 6 pm for their activities.  Here are three companies and what they do when:

• Logistics Plus offers a free weekly lunch to its HQ employees at a pub that shares space in the same historic train dept the company owns.
• Pro Motion has an all-company huddle to compare notes and celebrate successes at 2:02 sharp every day.
• Point B, which operates in several US cities but has no central office (associates work exclusively at client sites), has regular "watering holes" in the early evening for employees to gather and talk about both work and life issues.

So if your company doesn't have a regular time for team building, you can see that your options are wide open.  Why not survey your workforce and find out when the majority of your people would want to get together?

What's the underlying purpose of employee engagement strategies?  Why invest in them?

They're a means to an end, and that end is a really important one: retaining top talent.  It's even more important now when you combine a recent Adecco Group survey which found that over half of U.S. workers will look for new jobs once the recession ends – and Federal Reserve Chairman Ben Bernanke in effect launching employees from the starting gate by waving the "recession is over" flag earlier this month.

Fortunately, there are some proven employee retention tips that innovative small businesses, including our Top Small Workplaces, are using to increase average employee tenure.  Check out this list of five key strategies:

1. Establish desired character traits for new hires.  PrintingForLess.com, for instance, looks for people who are "smart, hungry, and nice."
2. Employees tend to respond well to benefits such as health and wellness initiatives and flexible scheduling because they show the company cares about them as a whole person, and not just how much they add to the bottom line.  Lundberg Family Farms and New Belgium Brewing are role models here.
3. Tip from Becky McCray of Small Business Survival that a number of the companies we've honored follow: Get involved with your local educational system.  Show young people that a company that cares for its employees – yours – is right under their nose.
4. Bring everyone – or, in a larger firm, teams – together in a daily huddle for 15 minutes.  Merkle and 1-800-GOT-JUNK? have found great success with this practice.
5. Help your organization internally and externally (increase your competitive advantage given what will likely be a void of managers in the future, according to Management Line) by devoting significant training to new managers.  "Good first-line managers help retain employees," our Executive Director, Mary C. Clark, writes, citing the aforementioned PrintingForLess.com as a related success story.

Is your organization using one or more of the above employee development strategies?  If so, I'd love to hear how you assign value in dollars saved or earned as a result of them.  Please drop me a comment below.

Are you ready for a very short post (after my last, long one) with a very effective tip for employee engagement and manager team building?

One of my friends who's an attorney came up with this a while back to comfortably break the ice with a group of people who are talking and get immediately up to speed on what they're talking about.  Instead of saying,

Excuse me, but what are you talking about?

ask,

Whose birthday is it?

My friend has found that when he does this, without fail someone responds, "Oh, it's no one's birthday.  We were just talking about _____."

The uses for this trick in the workplace are many:

• Owners, leaders, managers – use to encourage productivity before or after daily huddles, or any time you see groups of employees gathered in discussion.
• Low- and mid-level employees – use to break into the convo with both workers at your level and even supervisors.
• New hires – use as a smooth ice breaker to meet your coworkers and get a sense of the organization's pulse.

Try this as part of your employee engagement best practices, and let me know how it works for you by dropping a comment below.  Enjoy!

I grew up in North Dakota and Minnesota.  Both states have taken a cultural beating through movies like Fargo and, more recently, New In Town.  Even in Winning Workplaces' home base of Chicago – which is not that far flung from those states – I run into people who don't know where those states are and, even if they do, think the population up there is basically zero.

Given this mindset, I'm happy when I can do my part to follow in the footsteps of resources like Small Biz Survival and show people that, yes, entrepreneurship is alive and well in rural areas.  The latest proof of this is this article in my old hometown paper, the West Fargo Pioneer, that talks about how a retired teacher at my former high school is heading up a local entrepreneur challenge.

Here's the skinny of this program according to the Pioneer:

As project consultant for the fledgling program, [Paul] Tefft hopes to help develop a network of innovative marketing and business opportunities for students at the eighth and ninth grade level.  Four goals of the program will be to work with the DECA program to help expand the development of marketing opportunities for eighth and ninth graders, create a youth mentorship network with area businesses, develop an annual innovation competition to promote technology-based career opportunities, and to create a virtual entrepreneurial challenge to help engage students as they learn about business and marketing strategies.

This sounds like a fantastic program – the model for which, if successful, could be copied elsewhere.  As Tefft and company develop their program and prepare students to tackle business challenges, I hope they will also focus on people practices such as daily huddles, virtual team building, and other measures designed to bring out the commitment and productivity of the employees the students may one day supervise.

Thanks to another emerging voice in rural entrepreneurship, Greg Tehven of Students Today Leaders Forever, for pointing me to this story.

What are your thoughts on the availability and effectiveness of rural programs to encourage entrepreneurship?

Photo credit: The Montana Journalism Review

I talk about workplace team building and employee engagement so much on this blog that I'd be remiss if I didn't provide some practical, organizational examples of how you can approach it in a way that some of the most innovative small organizations – our Top Small Workplace and Best Boss winners and finalists, among others – are doing so.  Here then are 20 team building strategies culled from our website that you might consider implementing this year:

1. Look for complements vs. redundancies when hiring.  If you are CEO of a small organization such as a startup, look for managers who have different approaches than yours.
2. Encourage and incentivize cross training wherever possible.
3. Bring your teams together for meetings whose only goal is to brainstorm ways to work better together.  Sales and marketing is a typical place to start.  See 2004 Best Boss finalist Fieldglass, Inc.
4. Form team member committees and charge them with developing and enforcing company-wide policies.
5. The small team approach to client management can pay big dividends.  Just ask our 2006 Best Boss honoree Rackspace Managed Hosting and 2007 and 2008 Top Small Workplaces finalist rbb Public Relations.
6. Bring in top-notch, locally available coaches on topics that will reinforce your culture and the service you want employees to demonstrate for your customers.  The key is to have them become a regular sight in your workplace and be affable enough that employees come to respect them.  See 2006 Best Boss winner Headsets.com.
7. Engage in daily, weekly, or monthly huddles.  See 2005 Best Boss winner 1-800-GOT-JUNK? and 2008 Top Small Workplaces finalist Tasty Catering.
8. Task-based teams – as opposed to teams focused on workplace "ideals" such as "green teams" – can attack problems more directly.  See 2006 Best Boss winner Seventh Generation.
9. In this economy, a great task to assign one or more teams is improving operational efficiency.  Bigelow Tea did this several years ago with their shipping provider; employee input saved the company around $80,000 per year.
10. Hold quarterly lunches with your teams off site, hosted by your president or CEO.
11. Hold all-staff meetings every 1-2 months.  These can feature a mix of team building exercises, sales briefings, and updates on HR benefits and policies.  Encourage any and all questions; if leadership cannot or does not wish to answer them in a large-group setting, follow up with employees individually.
12. Many progressive small firms are designing their workspaces with open floor plans and no offices.  This encourages impromptu sessions that foster workplace team building.  See 2008 Top Small Workplaces winner Jump Associates and finalist Edmunds.com, Inc.
13. Create opportunities for senior employees to mentor junior associates (helps lower turnover of the latter).  See 2008 Top Small Workplaces winner Integrated Project Management Company, Inc., and finalist Forum One Communications.
14. Do you manufacture your product(s)?  Create a team to research and implement lean practices.  Benefits include cost savings and improved customer attraction and retention.  See 2004 Best Boss winner Berner International Corp. and 2008 Top Small Workplaces finalist HUI.
15. Give teams accountability, including in revenue generation, quality control, and hiring and firing decisions.  See HUI.
16. Is your office in a beautiful environment?  Do you espouse environmental values or have an eco-friendly product or service focus?  Encourage team hikes over lunch.  See 2007 and 2008 Top Small Workplaces finalist PRIZIM Inc.
17. Consider giving out performance bonuses on a team instead of an individual basis, based on which add the most value to clients.  See rbb Public Relations.
18. Think about choosing a metaphor to instill workplace team building at a cultural level in a way that both new and seasoned employees can identify.  For example, manufacturer IRMCO uses the wolf pack – "the only perfect team in nature."
19. Is your firm comfortably profitable and looking to give back?  Consider implementing a foundation or project that reflects your business.  The eyewear manufacturer and distributor Luxottica Group, for example, set up a foundation called Give the Gift of Sight that uses the company's existing workforce as volunteers who travel internationally to screen and prescribe recycled frames and lenses to those in poor and underserved areas.
20. Extend the team mentality to your customers, especially your best ones.  Check in with them often on how you can deliver more and better value-adds to them.  The goal is to get them to think of your business as an extension of theirs.  See 2007 Top Small Workplaces winner Corporate Ink.

What do you think of our list?  What employee engagement activities are not listed here that have worked for you?

Photo credit: Key Adventures

The Working World Cafe blog wrote about transparency last week in reference to a study by Watson Wyatt that reemphasized a finding they've reported on for many years.  Namely, that firms that place a premium on transparency in their team building and other employee engagement best practices benefit in stronger ROI both internally and externally.

One of the external forms of ROI we talk about on our website as a competitive advantage of being a winning workplace, which Watson Wyatt revealed in 2004, is the astounding difference in return to shareholders from largely this one core value, compared to companies that don't actively work to instill it.

Open communication, which can encompass everything from the much-hyped – if much more rarely practiced – open door policy to daily huddles, quarterly all-staff meetings, and annual employee surveys, is useful at all times.  However, struggling small firms should place more stock in it in tough times like these.  Our 2008 Top Small Workplaces do, so much so that this emerged as one of the 9 themes of this year's winners.

In our benchmarking and best practices report on the 2008 winners, under the subheading "Weathering the hard times," we discuss how two Top Small Workplaces, Landscape Forms in embattled Michigan and King Arthur Flour in Vermont, use transparency in their employee engagement to emerge healthier during especially difficult periods.  In keeping with this season of giving, our coverage of these two resilient small firms from this report follows below.  You can access our full report here.

Rapidly rising material prices cut into Landscape Forms’ margins in 2004, costing them about $1 million.  This designer and manufacturer of outdoor furnishings was forced to raise prices and communicate this new reality to their customers.  They worked closely with their suppliers, who also passed along their own cost increases.  In partnership they were able to develop a solution that helped them share in the short-term pain.  Sourcing certain parts in China offered an opportunity for dramatic cost savings and gave their customers great value.  Management worked diligently to demonstrate to employees that strategically sourcing some parts overseas was necessary to reducing costs without undermining job growth in the U.S.  In addition, management initiated lean initiatives to increase efficiencies in their operations – and asked employees for help.

They knew they needed more than price increases and material cost savings to restore profitability.  They explained the situation to employees and asked for their help to close the gap. Everyone was encouraged to take actions to improve their own work areas and communicate their impact to the rest of the staff.  Hundreds of actions were generated, stimulating a high level of employee engagement.  Because of all this, Landscape was able to achieve their 2005 profit goal and has continued to grow successfully.

During this past year, global wheat prices have been at an all-time high at King Arthur Flour, well over triple the cost per bushel since spring of last year.  The combination of poor wheat harvests around the world, low stocks from last year and high energy costs created a very grim situation for wheat prices, leading to much higher flour prices.

Management communicated the situation to employees and they brainstormed solutions.  In response, the firm set up teams that reached out to customers and the media to explain the situation.  Internal teams worked on wheat purchasing issues, negotiated with grocery chains and bakeries, and communicated with their home baker customers.  While the unstable market convinced other suppliers to use lower-quality wheat, King Arthur Flour employee-owners remained committed to maintaining the highest and most consistent standards for protein content and product performance.

How can small employers can become more transparent to enhance their bottom line in 2009?  I'd love to read your thoughts on this.

When I wrote my post yesterday profiling the physical workspace at three of our 15 Top Small Workplaces for 2008, I was waiting to hear back from Resource Interactive, the Ohio-based advertising agency that is known chiefly for two things, beyond consistently overperforming for their clients: being female founded, owned and operated; and giving all their employees shares of stock in all publicly traded firms that are part of their client base (a rare benefit indeed).

I knew from their Top Small Workplaces application that they engaged their employees in designing their unique workspace that I discussed yesterday, but I didn't know when that took place.  I also wanted a little more info on how they designed their headquarters to fit their needs.

Mike called me back yesterday with some details:

• The company, which was founded in 1981, moved into their current space in 1990.
• In 2000, they redesigned the space and called on employees to help make it their own.
• The space included a series of support columns, which employees incorporated into the design of desks that rotate around them to fit a variety of team building functions. The desks can be configured so that people face each other, or they can be offset to huddle around a team leader.
• No one has a traditional office; everyone is exposed to the whole environment.
• Employees got down to the micro level, deciding the texture and color of almost all surfaces.
• "Everything is mobile," Mike says, so that no one needs to box everything up when they move around within the firm or prepare for a client meeting.

I just wanted to share that with you so you can take note for your own employee engagement best practices.

Speaking of employee engagement, I got an answer to a question I posed in a group I belong to on LinkedIn (Networlding).  I asked that group if any members' firms would adopt the practice of the "leaving bonus" that e-tailer Zappos uses, which I blogged about in September.

V. Ryan from Chicago-based consultancy SwiftKick Growth Inc. responded as follows:

This is brilliant!  It takes all the emotion and pressure out of the process and the situation.

When I worked for Michael Alter, who is a brilliant leader and great boss, he did something along the same lines.  He ran a contest for "My Best New Mistake."  He did it once a year, after the busy season.  People self nominated and then the finalists all presented their mistake at a company meeting.  The top 3 finalists all got cash and recognition.

Michael created an environment where it was OK to make mistakes (as long as you learned from them and didn't continually make the same mistake).  The people were more than engaged.  They created a lot of teachable moments.  Michael is a brilliant guy and his results show that.  And, his process kept employees on staff and cost a lot less!

His answer segues from the orientation phase that engenders Zappos' practice to employee development for the long haul.  It reminds me of a common theme among our winning workplaces, as illustrated by Paul Silvis, the Founder and former Head Coach at Pennsylvania-based manufacturer Restek, in a video interview we did with him last year.  He said:

I think innovation is spurred by getting people to take a risk, make a mistake, and learn from that mistake quickly.  I can see that individuals who are afraid to take risks will hamper the growth of the organization.

It might seem counterintuitive to encourage employees to take risks and make mistakes, especially given our economy right now and the credit crunch that is having a devastating effect on R&D budgets of firms of all sizes.  Yet, we are seeing more and more that this leadership trait, when used in tandem with other smart practices, is a boon for small firms when it comes to meeting and exceeding market demands, establishing new markets, and satisfying all stakeholders.

Do you have any thoughts on either of these issues, or anything else I've blogged about recently?  Let me know by commenting below.

When I was doing some research today on the much-hyped – but still, surprisingly, not universally adopted employee engagement practice of the daily huddle – I found this quote from an issue of Inc. magazine from late last year: "If you're a small organization, not doing this is crazy" (Patrick Lencioni, author of Death by Meeting).

Lencioni is dead on, especially given the much more competitive atmopshere many small organizations face today as a result of the credit crisis, among other factors.  This is one of the big ways where the Jackson's Hardwares of the world can outshine the Home Depots when it comes to workplace team building.

The premise is simple.  At some time between opening and lunch, the leadership (or in the case of midsize firms, team leaders) gather everyone in one place.

When the daily huddle happens is up to you.  Many businesses prefer a time that's easy for people to remember.  The Inc. article cites the CEO of a New Jersey-based nurse staffing agency as a proponent of 11:45 am, so it can't drag out too long with lunch on its heels.  On the other hand, according to Jason Yip of global software delivery and consulting firm ThoughtWorks, there is a psychological factor in preparing for the huddle, and so start-of-day huddles might also be avoided.

So, what happens during these?  (Or what should happen?)  One of the few international firms we honored a couple years ago for its outstanding employee engagement best practices, Canadian-based 1-800-GOT-JUNK, posted a video last year that highlights what they do in their huddles.  Here it is:

So to review, you can get great results from your daily huddles by:

• sharing company news, including key business indicators and metrics
• highlighting company happenings or milestones

1-800-GOT-JUNK also follows the daily huddle best practice of KISS, which in this case means "Keep It Short, Stupid."  Their huddles last for about seven minutes, although 15 minutes is OK, too.  The emphasis is, after all, on rapid-fire bits that pump up the energy.

What is on the cutting edge when it comes to daily huddles?  Glad you asked.  I would say it's LinkedIn's just-announced beta app addition of Huddle Workspaces, which promises to fulfill some lofty functions such as cutting down on email (good for the planet, and your IT budget), document sharing and storage, and, of course, real-time communication via discussion forums.

It will be interesting to see how that works out for LI.  It's likely, though, that no amount of online congregation will replace the power of getting actual humans together to celebrate and focus on the day ahead.

Have daily huddles factored into your employee engagement activities?  How have they translated into bottom-line results for your business?

Photo credit: The WorldBlu Blog