On August 4 I told you about our new feature for email subscribers, a weekly people practices email geared toward improving your company's bottom line.  Tom Walter, CEO of our 2010 Top Small Company Workplace Tasty Catering, commented on that post saying it's a great idea.

This week he shared specifics with me on exactly why he thinks business leaders should sign up for this free email (emphasis mine):

The Weekly Bottom Line-Improving People Practice email should benefit all business leaders.  The world has become commoditized.  The true marketplace differentiator is human capital.  I enjoy learning the Best Practices other companies use with their most valuable asset - their people.

An engaged workforce is typically harmonious, productive and profitable.  These Best Practices eliminate the need to manage.  We have replaced management with effective leaders armed with Best Practices, and the difference has been remarkable.

While Winning Workplaces surely plays only a small part in Tasty Catering's success, you can't argue that they're not doing a lot of things right in their staff engagement that comprises their highly productive workplace culture: As we shared in the company's award profile, in a very tough year broadly and certainly in their industry (2009), their employee leadership development and other strategies helped them earn above-average revenues.

Register now to start getting our weekly, bottom line-improving people practices email FREE in your inbox.

On her blog last week, Harvard Business School's Rosabeth Moss Kanter identified setting clear expectations about everything as one of four things groups want that leaders can't provide.  She writes,

No matter how much leaders try to define expectations, lay out the nature of likely events, or describe the steps that the group will be going through, it's not enough.

My question is, while it may not be enough to fully satisfy groups of employees for ideal workforce effectiveness – is it enough to move the business forward in a meaningful way (even if that means not sliding backward in a recession)?

The workplace team building and employee engagement experiences of 8 small businesses that applied for our Top Small Company Workplaces award this year – including 2 winners – show that building clear employee expectations from leaders into the strategy contributes to organizational success.  Consider that the companies I'll tell you a bit more about below:

• Have been in business an average of 13 years,
• Grew revenue more than $5 million on average from 2008 to 2009,
• Went from 50% being profitable in 2008 to 75% being profitable in 2009, and
• Decreased average turnover by close to 3% from 2008 to 2009.

Specifically, here's who the firms are and how they maintain their success, in part, by being intentional about setting clear expectations:

Awarepoint - Real-time awareness technologies to monitor equipment and people - San Diego, CA
"Awarepoint helps managers get the best out of our staff.  The in-depth performance review helps managers and employees have better conversations, set clear expectations and build useful development plans.  This method also helps our leaders learn to identify poor performance so that it can be dealt with quickly, while developing the solid performers and building the business."

Enhanced Recovery Corporation - Financial Services - Jacksonville, FL
"The Owners, VPs, Directors, Department Heads, and Operations Management Team are all committed to the continued success of all ERC employees.  From Peer to Peer feedback to our Open Door Policy, employees of ERC always have clear expectations and development opportunities.  All departments at ERC are committed to ensuring constant development of employees at all levels within the organization."

FMYI - Software - Portland, OR
"We have done a lot more than what's expected of a small company such as providing medical benefits from day one with only a couple of employees even though it wasn't required by Oregon law.  We also want to be more authentic and fully integrated with our sustainability commitment.  We will sustain employee culture through ongoing sustainability discussions (via Northwest Earth Institute courses), clear expectations written into job descriptions and reviews about our doer/helper culture."

NouvEON - Consulting - Charlotte, NC
"NouvEON's Talent Management and People Care Division has several platforms that allow us to set goals, dialogue throughout the year, establish clear expectations, and perform 360 reviews, as well as measure and track potential.  We map Performance AND Potential and communicate to our employees where we see strengths and gaps.  It is through open communication and candid conversation that we help individuals grow in their jobs."

NY Jets (Winner) - Professional football team - Florham Park, NJ
"When our current management development initiative started, the Jets were in the planning stages of our relocation from Long Island to NJ.  HR was able to add in a special section on managing change that prepared mangers for the huge changes employees faced with our relocation.  The training sessions consisted of 6 modules: The Role of the Manager, Setting Clear Expectations, Feedback Skills, Delegation and Motivation, Handling Performance Issues, and Managing Change. The initiative proved to be highly successful for all managers; the learnings from the trainings are still used by the managers today."

Portico Systems Inc. - Software - Blue Bell, PA
"People succeed when they care share their ideas, build their skills, collaborate with others, and move into the realm of confidence that comes with mastery.  The masters become mentors and guide others with wisdom and a desire to enable others with positive reinforcement.  This is the environment that Portico is cultivating as we grow the organization and the people who are working to succeed.  Employees are provided with clear expectations, direction and feedback from supervisors, and opportunities and monetary and non-monetary ways incentives to succeed."

Red Door Interactive (Winner) - Advertising - San Diego, CA
"Our culture has been one of open dialogue, learning and progression since the company was formed eight years ago.  The family and team oriented environment at Red Door Interactive fosters open communication, leadership, clear expectations and teamwork.  A visit to Red Door Interactive will clearly display the open environment since the office is completely devoid of doors; even the CEO. Internal committees encourage feedback and collaboration to maintain our culture and engagement."

Sierra w/o Wires - Computer systems and related services - Pittsburgh, PA
"Regular and real communication is essential to establishing any corporate culture, community and collaboration.  In our organization this type of communication ranges involving employees in the project planning and estimating, to regular team and one-on-one update meetings, and also establishing clear expectations for each employee on what needs to be done, when."

How clear are the expectations in your organization?  Do your people practices help or hinder this?

Winning Workplaces is pleased to announce a new, free benefit for our email subscribers, on top of the ones they already enjoy such as our quarterly IDEAS newsletter, workplace topic surveys, and event and network news.

Last week we started sending out an update we're calling "Your Weekly Bottom Line-Improving People Practice."  The concept is simple: Based on qualitative feedback we've collected from our Top Small Company Workplaces award applications, we choose and send you real world company practices and the subsequent results they've seen that best demonstrate the payoff of employee engagement and team building.

To show you what I mean, here's this week's practice that went out to our subscribers earlier today:

• The Leadership and Learning Center
• Founded 1994
• Salem, Massachusetts
• Consulting

Practice/Result:

"Our employees design our people practices – everything from our benefit structure (employee committees create them) and benefit evaluation (twice annual surveys).  That is why turnover, which had been 30-40% in the late 1990s, has been in low single digits for the past several years."

If you'd like to start getting practice/result updates like this each week to help improve your business, click here.  It's free and you can opt out at any time.

If you have 90 minutes to spare, I have something that's a great use of your time when it comes to expanding your understanding of the payoff of employee engagement and workplace team building activities.

Below is a video of our President's presentation last month at an Entrepreneurial Roundtable hosted by the University of Chicago Booth School of Business.

If you can't see the video in your RSS reader, click here.

The presentation kicks off with our own Gaye van den Hombergh explaining why companies should care about creating great workplaces (starting at 7:30) and the qualities we see as critical to Winning Workplaces, along with some of the people practices used by winners of our 2010 Top Small Company Workplaces award, which were featured in the June issue of Inc. Magazine (starting at 29:00).

Starting at 44:00, Gaye led a panel featuring leaders of this year's two Chicago area winners: Marvin Klein, Founder, PortionPac Chemical Corporation; and Tom Walter, President & CEO and Tasty Catering.  As you absorb the lessons learned and insights of these two leaders, consider their workplace culture practices, which I've listed below respectively, that have led them to success – even in this tough economy:

PortionPac

Selected workplace best practices:

• Offers personal and financial support for employees on a case by case basis
• "Front to Back Day"
• Offers experience to improve personal confidence and communication skills
• Employees have a high degree of autonomy

Business results:

• 2009 revenue up 7% from 2008
• Over the same period their competitors suffered double digit losses

Tasty Catering

Selected workplace best practices:

• Personal financial crisis fund fed into by employees
• Healthy free meals provided to staff on a daily basis
• If an employee comes up with idea and is willing to put in the effort, the company will help finance and support the endeavor

Business results:

• While sales fell in 2009 vs. 2008, it experienced only half the decrease of its industry and remains profitable
• High average employee tenure of 7.5 years

What are your takeaways from watching this video?

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.

The following is a guest post on workplace team building and employee engagement by Steve Ritter.  Ritter, the Founder and CEO of Team Clock Institute, is the former Director of HR at Leaders Bank, which was named the #1 Best Place to Work in Illinois in 2006, and was a finalist for Winning Workplaces' Top Small Workplaces award in 2008.

Growing up, most of us are taught how to succeed as individuals.  Unfortunately, individual talent and dedication alone are not nearly enough to ensure a team’s success.  Teams are messy.  Conflict is unavoidable. Team dynamics are fluid.  Despite these challenges, working in teams is fundamental to most endeavors.

Twenty-five years ago, I began the quest of understanding the complexities of teams following a happenstance opportunity with the Chicago White Sox.  At the time, a seemingly strong team was underperforming for reasons beyond the grasp of their leadership.  Unexpectedly, a complex situation ended up having a simple solution.  Since then, identifying the recipe for healthy and effective teams has been my passion giving rise to the founding of the Team Clock Institute, a research and training consultancy specializing in breakthrough teams.  Recently, the Team Clock Institute responded to a unique challenge.

The Issue: Early in 2010, I received a call from a FORTUNE 500 company facing the integration of disparate cultures following the acquisition of a prominent player in the industry.  All of the expectable merger/acquisition politics were underway and the leadership team was seeking a simple model to anchor the transition.  What began as a casual conversation on a commuter train grew into an opportunity to assess the integration effort and provide recommendations to enhance successful business outcomes.

The Response: Accordingly, the Team Clock model was introduced to key players on the leadership team. The Team Clock model mirrors the face of a clock where each hour represents a stage along the path of team development.  In a nutshell, strong teams begin with an investment in common norms and direction.  Based on this foundation, team members test trust as they become more cohesive.  This platform supports their efforts to be innovative and take risks.  This activity inevitably leads to change and a repositioning of people and functions.  Healthy teams find a way to refocus following such growth and cycle begins again. 

The Impact: Over the next six months, the Team Clock Institute assessed a series of key business units to determine opportunities for greater effectiveness.  Results were analyzed revealing the strengths, vulnerabilities, areas of congruence and discord on the team.  Debriefing sessions were facilitated to discuss results and targeted actions were identified that would bring measurable change in team engagement and productivity.

Typical examples of diagnostic vulnerabilities included:

• Mired in loss: too depleted to re-invest.
• Inability to manage conflict/differences respectfully.
• Indulgence in the comfort zone: afraid to take risks and explore new ideas.
• Adherence to the status quo: unwilling to accept the consequences of change.

From a strengths perspective, the Team Clock Institute identified key anchors to healthy team interactions based on the diagnostic results for each team.  Goals were established in each of the core areas of vulnerability and business metrics were assigned to determine ROI.  The goal areas included:

• Investment infrastructure

- Consensus philosophy/mission/values/vision

• Trust and interactional dynamics

- Effective management of conflict

• Innovation and team effectiveness

- Measureable productivity/efficiency shifts

• Distancing to leverage change for growth

- Functional repositioning and identification of new opportunities/methodologies

The business case for effective teaming is simple.  Healthy teams are more productive and adaptable.  Anticipating the 4th quarter of the calendar year, the organization is poised to re-assess their team effectiveness metrics mapped to their productivity results.  Pending the quantitative impact, the qualitative result is clear: the emotional journey of a healthy team provides opportunities for positive workplace culture that struggling teams rarely experience.  Where is your team on the Team Clock?

Learn more about all of the resources at the Team Clock Institute at www.team-clock.com.

I'm adapting Mark Twain's famous quote in the title of this post because I feel the need to provide a counterpoint to Mike Shipulski's "obituary" of imagination – in an organizational sense – on the Blogging Innovation website today.  Writing as if imagination were a person, Shipulski says,

In recent years (imagination's) health declined as the two new thinking systems, lean and Six Sigma, tricked companies into severely constraining their thinking, and, eventually, there was no longer a place for her.

I'm someone who thinks that regardless of the adoption of a management approach such as the two he lists above, imagination is still alive and well.  I think its vitals are especially strong (in keeping with the obit analogy) in small businesses, where because of wavering if not falling consumer confidence and spending, reduced spending by many of the larger companies they serve and are served by, and in many cases insufficient support by lending institutions and the government, and other factors, firms and their leaders and managers have had to get incredibly imaginative in recent years.

The following articles on our website show how imagination factors into the payoff of employee engagement best practices in terms of a more productive workplace:

Ask An Expert - Vacation Days: Real vs. Perceived Time Off
"The GreenPages example shows that organizations' leadership are only limited by their imagination in how they approach time off for their workforces."

Success Story - JFK Medical Center
"Many of the programs at JFK, which has been widely recognized for its enlightened workplace approach, are beyond the reach of smaller employers.  However, some programs would be feasible for a small workplace with some leadership imagination and sensitivity."

Perhaps more to the point of the current relevancy of imagination, the term showed up several times in the qualitative feedback of applicants for our 2010 Top Small Company Workplaces award.  In response to our question How do leaders in your organization foster a sense of community and collaboration among employees?, TXS Industrial Design in Texas wrote:

On a personal level, with interaction and interest of management, TXS may sometimes resemble "The Office" with humor and humility, sickness and health, birthdays and weddings, celebration of babies and joyous occasions and an occasional party or FoosBall tourney to spark imagination.  Our family of employees feel secure in their jobs and the longevity of the workplace.

In answer to our question asking for an example of an employee learning initiative, Maryand-based Orbit Logic Incorporated wrote:

We do an annual survey to see how employees feel about their job and the work environment.  One of the best suggestions to come out of that survey was an employee lunch and learn.  We really liked the idea, so we ran with it.  The topics are varied, ranging anywhere from benefits overviews to marketing to software development overview for non-developers.  It is very easy for people's imaginations to run wild with information.

Finally, fulfilling our requirement of describing the workplace culture of their organization and the key people practices that support that culture, California-based Perfect Fitness wrote:

Our company, Team PERFECT, is on a mission to serve everyone who desires a life lived to the fullest extent of their imagination, to serve those who realize that's the point of living anything less, and we haven't truly lived.  You have nothing to lose but your own self-imposed limitations, and you can gain anything you dare to imagine.  We believe that by sharing our understanding, you will become as passionate about your potential as we are, this is how we are teammates to all, teachers to some and students of others.  We know of no greater reward in life than helping others unlock their success and achieve their dreams.

Related: The CEO of one of our 2009 award winners, Chicago-based Radio Flyer, explains in this video on our YouTube channel how the company's workplace values of fun and imagination allow them to better resonate with their customers – parents – and foster greater employee commitment and innovation.

The business justification for employee engagement focused on their continued, on-the-job learning is easy to understand.  It's a win for employees who increase their skills and become more marketable in their careers; and the company wins because their talent has a greater ability to perform at top levels and to innovate, and it's less of a risk and more of an opportunity to promote from within (saving money on recruiting from outside).

Yet, there are myriad options when it comes to educational employee development strategies.  Where should a small business start?  Maybe a more important question is: Considering each investment in this economy needs to generate several times its amount back in returns, what learning initiatives are most effective for small firms?

Luckily, Winning Workplaces has some real-world answers to these questions to share with you to help you decide how to invest when it comes to this important area of human capital strategies.  Our 2010 Top Small Company Workplaces award application asked applicant companies to give an example of a learning initiative they found to be particularly effective.  Here's how our 20 winners this year responded:

1. A Yard & A Half Landscaping: We spend the equivalent of 1-2 weeks per year offering paid training days for field employees.  Because of the democratic educational setting, by the end of the day, people were helping each other across work crews, and on two occasions, younger employees stepped in to coach crew leaders on machinery that was still unfamiliar to them.
2. All4: For our staff that are in the beginning of their careers and are developing their core consulting and technical skills, we have developed a skills matrix which allows them to know exactly what metrics must be met in order to be promoted to the next position. 
3. Alternative Solutions HomeCare: One interesting program ASH put into place in 2009 was the Dream Manager Program.  Tackling head-on the growing problem of employee disengagement, the program explores the dynamic collaboration that is unleashed when people work together to achieve company objectives and personal dreams.  We had so much positive reaction to this program that we will be continuing it in 2010.
4. Biomark: A couple of years ago we did a several-day team building training.  The effect is that when we employ an idea or theory from this training in our everyday work environment, everyone knows what we are trying to accomplish and is engaged in the process.  This has paid dividends in workplace happiness, turnover, and job performance.
5. Chroma Technology Corp: A few years ago Chroma underwent a full company Lean Manufacturing initiative.  Every employee attended a 2-day workshop and seminar about the fundamentals of Lean Manufacturing.  In addition, 25% of the company was directly involved in two different Lean Mapping and Value Stream courses and projects.  This resulted in $1 million material savings in the first year.
6. Daphne Utilities: We include a large number of our employees in public events involving interaction with our customers.  Here, they work side by side with upper management in events like street festivals and charity fundraisers.  This helps them hear the message being put out from the highest levels, allows top management to get to know each employee a little better, and helps to motivate our workers to take public pride in their work and their company.
7. Dealer.com: We launched uFuel in 2009, a customized online learning management system that was implemented over a 14-month period.  uFuel contains interactive simulations, measures success and knowledge gaps, and creates training programs for areas of improvement.  This learning initiative has been extremely effective at keeping all employees at the leading edge of online marketing best practices and ensuring consistent service for clients.
8. Dixon Schwabl: Our employee development includes an initiative launched by our CEO in 1998 to enhance overall employee communications and allow employees to appreciate each other's differences.  Based on Myers Briggs indicators, it helps frame leadership development, coaching, internal training opportunities, and cross-training.
9. Ginger Bay Salon & Spa: Beginning in 2008 and throughout 2009, we spent significant time with our leadership team opening our books and helping employees understand our financial statements and review our financial performance.  We believe that Open Book Management is likely the main reason that we were able to post results that were not only stronger than our competition, but reflect growth in all areas of our business.
10. MAYA Design: Teaching – many of our employees teach at local universities and we find that allowing this as a paid benefit helps employees learn more about their jobs, how to manage and work with others, and better communication skills.
11. NY Jets: In 2008, the Jets embarked on a first of its kind management development initiative entitled "Take It or Lead It".  Both Business and Football managers partcipated in the sessions.  When this program started, the Jets were in the planning stages of our relocation from Long Island to New Jersey.  HR was able to add in a special section on managing change that prepared mangers for the huge changes employees faced with our relocation.
12. Optimax Systems: The implementation of Job Instruction Training which ensures direction provided from internal trainers is consistent and measurable for effectiveness.  This has allowed us to make sure that people "get it" when instructed on a specific task.
13. Patagonia: Our Employee Development Program temporarily assigns employees to other positions in circumstances where an employee may be out on an extended leave (e.g., maternity leave, an environmental internship, etc.).  Employees participating in this program attain new job skills, have the opportunity to meet more people in the Patagonia community at a new location, and significantly ease the transition back to work for the employee they've replaced.
14. PortionPac Chemical Corp: For 22 years we have held a "Front to Back Day".  Management, office and sales staff spend the day working in the factory.  The "Front" staff gains an appreciation for the skills, talent and physical work that go into making PortionPac, while the factory staff are able to showcase their accomplishments and the attention to detail that goes into making each Pac perfect.  The event fosters communication and suggestions that go back and forth as to how our products can be made better and how the "Front" staff can make life easier for the "Back".
15. Red Door Interactive: We believe that promoting opportunity to change your role at Red Door has prevented talented employees from leaving the company to pursue interests and additional responsibility elsewhere.  Emergent practice areas such as social media and search marketing now comprise over 30% of our total service revenue, and those practice areas are led by people who identified new opportunities and invested in becoming experts by playing to their strengths.
16. Return Path: Most recently our CEO developed and delivered an "Effective Presentations" course.  Content is broken down into small, easily absorbed chunks and reinforced to create a solid foundation that is common for all new hires.  This builds not only a shared vocabulary in our unique business, it builds a shared context.
17. Tarlton Corporation: Our most innovative training program is called Increasing Human Effectives (IHE).  The philosophy behind this training is to help our employees grow personally through this process, which will allow growth professionally.  If they believe in themselves, anything is possible!  Happy employees are productive employees.
18. Tasty Catering: We have 11 advisors/consultants that work with our teams.  Advisors are in the following areas: Banker, Financial, CPA, HR, PR, Marketing, Legal (one for the company and one for the shareholders), IT, Culinary, Dietician and Sales.  The staff benefits by receiving advice from a recognized expert in the field who has larger and smaller clients.
19. The Sky Factory: To further our understanding and experience of the creative process as it applies to our daily work and to the building of the company, we prepared an all-company course with an art historian.  After viewing hundreds of art images and engaging in extensive dialogue it became evident that the process of building a company can (and should) be the same as that of creating a beautiful and lasting work of art.  This notion became practical when a designer aptly observed the skill of a production worker's multiple LED solders.  The fine quality of his work was especially significant because of a recent multi-million dollar fire caused by sloppy work from a competitor's LED system.
20. Van Meter Industrial: One effective learning initiative in our organization is our Foundations training program.  New employees attend this day-and-a-half course near their 90-day milestone anniversary with our company.  Feedback from employees has shown this is fun, interactive, and important training that provides a true insight to our culture, gives the basis for understanding what is important to our company, and sets the tone for who we are and what we represent.

Related: Dive even further into learning activities that will benefit your workplace culture, and your bottom line, by reading our Success Story on ShoreBank.

Image credit: Wikimedia Commons

Last week SmartBrief on Leadership called attention to an article on Business-Strategy-Innovation.com which discussed how some big companies scale their innovation by seeding "independent spinoffs to develop high-risk, high-reward projects."

With their huge employee rosters and advantage in terms of working capital and infrastructure, it makes sense that large companies that believe they can see real returns from this focus are making this practice a priority.  But despite often being at a disadvantage in the factors I just mentioned, small businesses are getting in on this as well.

One of the answers that stood out to the last question in Winning Workplaces' 2010 Top Small Company Workplaces award application – What are your key long-term strategic goals for the organization and the workplace? – was this one by winner MAYA Design, a 21-year-old design consultancy and technology research lab based in Pennsylvania:

MAYA grows, and allows employees to grow and stretch, by spinning off complimentary companies.  Employees can present a business plan to the owners and if they think it's viable, and does not compete with MAYA, MAYA provides the infrastructure (HR, finance, clerical and IT support) to help them get started.  This has always been a part of our strategic goals.  We currently have two companies (we call them doppos) incubating, one of which will probably spin off in 2010, the other of which will take a few years to be ready to start.  We are constantly working with the employees to think of ideas for new doppos.  MAYA Design will continue to be around 50 employees, as we believe this is an optimum number for the collaborative work we do, and is well managed.

When well executed, as is the case at MAYA, this practice produces a triple win that comes from a workplace culture foundation of employee engagement:

• Win for Employees: Spearheading or assisting in the formation of a new venture from an existing company – talk about a resume builder!
• Win for the Company: This practice inherently minimizes the risk of launching a new venture, while maximizing the returns for the parent company.  If the venture proves successful, employee-leaders of it and their subsequent staff are built-in evanglists for the parent company, which further helps their recruiting and sales efforts.
• Win for the Greater Community: Startup ventures that are successful are a sorely needed source of employment and tax revenues, which can both help our economy recover faster.

Do you know of any businesses that use a practice similar to MAYA Design's?  If so I encourage you to comment about it below.  I'd especially like to know how it helps with building trust in the workplace.

In April I blogged about what I perceived to be a direct link between progressive workplace culture practices at Netflix, and the payoff of employee engagement the company enjoys from such forward-thinking product innovations as discs for Internet-connected video game systems that allow their customers to stream movies and TV shows.

Today John Jantsch has a new post on his Duct Tape Marketing blog in which, through photos, he shows why a customer referral package he received from Southwest Airlines is effective for the airline.  It comes down to the package being extremely easy for the customer to understand, and to easily and quickly act upon.

This type of referral program should be no surprise coming from a company that is, as their President Emeritus and our past Top Small Company Workplaces award judge Colleen Barrett says, really in the customer service business, but happens to use airline transportation as a means to win that business.  And as Barrett told us in this Q&A with her on our website, unmatched customer service starts with an unparalleled commitment to building trust in the workplace and empowering employees at all levels to make decisions that benefit the customer (obviously a much different leadership approach than that which exists at most other airlines).

So to review, here's how Southwest Airlines' customer referral program is an example of turning what some would call "squishy" people practices to impossible-to-ignore bottom line results:

• Treat employees with trust, respect, and fairness, and encourage and empower them to think and act like owners (at Southwest, all employees are, in fact, owners).
• More highly engaged employees are more apt to create ideas, individually and as part of teams, that will generate more revenue and are more sustainable.
• The customer referral package Jantsch writes about is a tangible example of this, designed to increase that holy grail of profit margins for businesses, especially small ones: repeat business and referrals.
• More repeat business and referrals is better for everyone: customers, the business and their vendors and suppliers, and, of course, employees and their communities. 

Given the rising unemployment and falling budgets for needed social and educational programs in many states due to the economy, that businesses can have a hand in reversing those trends through the cycle described above is an inspiring proposition – and one that, frankly, I wish the leaders of many more organizations were focused upon.

Related: Read my firsthand perspective on how Southwest Airlines' workforce effectiveness made my first flying experience with them a joy.

Photo credit: John Jantsch

Summarizing this recent article on the Blogging Innovation site, SmartBrief on Leadership urges business leaders to "scrap the idea box."  And indeed, the article's author, Innovation 360 Institute President and CEO Kamal Hassan, shares 10 reasons that underscore his view that "they can do more harm than good."

Yet, I submit that, like many people practices to create a more productive workplace culture, an idea (or suggestion) box's success or failure comes down to leadership's commitment to it.  For example, how frequently do they call attention to it?  And what do they do with the feedback that's generated?

So before you scrap your idea/suggestion box, ask yourself if you've gotten maximum mileage from it – and if you're using the box in the right format for your work culture.  For instance, our Top Small Workplace Point B, which has a geographically diverse workforce that works exclusively at client sites, gathers employee ideas as part of its robust company intranet.  It relies on technology and has no physical suggestion box.

Here are some other approaches to the idea/suggestion box from our website:

• 1-800-GOT-JUNK?, the organization of our Best Boss Brian Scudamore, didn't stop at posting a suggestion box – the company created a system for logging the suggestions, assigning them for consideration, and following up on them.
• At Sullivan International Group, the CEO (our Best Boss finalist Steve Sullivan) reviews all suggestion box ideas himself.  We've seen this practice in several other companies we've honored through the years.
• Use the suggestion box as a means to an end of another workplace practice – an employee award.  Our Success Story on BOWA Builders shares how the company presents an award to the employee whose suggestion box feedback is most utilized.
• Your suggestion box can take a form other than a physical or virtual box.  Guest writer Allison O'Neill suggests "a team talk, regular brainstorming session or paper survey" in lieu of a traditional suggestion box.

Related: This post contains a tip by another of our Best Bosses – one of the best places to put a physical suggestion box in your workplace for best employee engagement.

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.

While there are some factors of a productive workplace culture that are more subjective when it came time for our panel of judges to select the winners of our 2010 Top Small Company Workplaces competition – such as The Sky Factory's highly unusual practice of fully consensus-based decision making – other factors are more objective.

Two of these are average employee tenure and turnover.  Here's how these metrics broke down in 2009 among the 20 winners and 20 finalists of our award this year, as revealed in the June issue of Inc. Magazine, which is out on newsstands today:

Winning Workplaces sees – and the firms selected as this year's award winners certainly see – a through line from team building efforts designed to keep employees engaged, motivated, and satisfied, and their ability to hold onto them longer, on average, than other small employers.

The impact of higher employee tenures and lower turnover on the bottom line includes:

• Improved ability to promote from within (saves on recruiting costs).
• More time to implement practices to capture and run with employees' best bottom line-enhancing ideas.
• More time for managers and even their subordinates to improve vendor relationships, to lower costs and/or provide more value for the business.
• Typically stronger relationship-building with customers or clients, due to their interactions with the same people month after month, year after year.

Related: Check out this new article up on Inc.com, from the June issue, providing some other strong, key metrics of our top 40 workplaces this year.

Will this week go down as a low point for performance reviews?  Since The New York Times asked on one of its blogs on Monday if it's "Time to Review Workplace Reviews," workplace researchers and business leaders alike have jumped on the bandwagon of questioning their effectiveness, and even their place among other, common employee development strategies.

The main criticisms of performance reviews, as Palo Alto Software Founder and President Tim Berry echoes from the NYT article on Small Business Trends, are that:

• They add signficantly to employee stress, and
• They can be so subjective in some cases as to render them meaningless.

Winning Workplaces' own employee engagement research shows that, at least in small businesses (which is to say, most businesses), performance reviews are not only an integral part of the people practices strategy, but they're delivering results.  The term "performance review" showed up 71 times in the 497 company applications we received for our 2010 Top Small Company Workplaces award competition; 9 out of 10 of these firms are profitable, they've managed to stay in business for an average of 16 years, and they save on recruiting costs by filling 1 out of 5 of open positions from within (contributing to respectable average employee tenure of 4 years) (source).

So in playing devil's advocate and working under the assumption that performance reviews are a worthwhile investment for an organization, here are 10 ways to make them meaningful, for employees and especially for the company.  These tactics are drawn from reporting on our award-winning firms on our website, presentations leaders of some of these firms have given at our past annual conferences, and other posts on this blog.

1. A goal of the review should be to build a relationship between managers and subordinates.
2. SMART goals – especially the Measurable and Attainable attributes – help make managers' feedback more objective and less subjective.
3. If employees' expectations of a raise following a review are causing stress, separate the pay element from the review.  If you plan for and communicate regular, periodic (normally once a year) salary adjustments, the persistent question of "When will I get a raise?" will disappear.
4. The more closely an individual's goals can be connected to an organization's performance goals, the more significant they become to the employee.
5. Too many companies fall into the habit of having reviews be the main one-on-one, in-depth dialogue between managers and subordinates.  Ideally, managers should be having far more frequent conversations with subordinates that address progress toward key goals.  This makes the feedback in a review setting much more palatable and less surprising for the employee.
6. Along the lines of "no surprises" for the employee as mentioned above, if you do tie reviews to compensation and/or bonuses, using open-book management – in which employees see the company's financial statements and, in many cases, are trained to know what the numbers mean – delivers value come review time, insofar as employees will have a much better idea whether a pay increase or bonus is fair; and also why they're not getting one, if that's the case depending on company performance.
7. Put employees in the driver's seat: empower and train managers to task employees with setting their own individual goals at the end of a performance review, when planning ahead for the next one.  While the goals employees present to managers will probably not be good to go straight away, even if they're adjusted, the sense of self-empowerment employees feel from being actively involved in their role will not diminish, and in fact it can make them more committed and productive.
8. An alternative to the above tip that's also proven to work well is to use a mix of individual, deparment, and overall organizational goals.  At Illinois-based ShoreBank their "magic ratio" for this is 70%/20%/10%.
9. Another approach is to move from individual reviews to group-based reviews.  Our 2010 Top Small Company Workplaces award finalist Cargas Systems, based in Pennsylvania, does monthly "stop light" reviews, allowing groups to gauge areas in need of improvement and provide an outlet for all to share opinions and stay involved.  This can be particularly effective when combined with tip #3 above.
10. If your company core values emphasize the greater community in some way, try incorporating the related value(s) in a goal in your reviews.  You may find the extra productivity that comes with an employee seeing his employer as caring about him as a whole person, and not just as a business asset, produces more revenue than a more traditional, numbers-based goal.

How do you approach performance reviews as a means to create a more productive workplace culture?

Photo credit: Chief Happiness Officer blog

What many experts on employment trends predicted might happen in the Gulf Coast as a result of the almost month-long oil spill – companies that depend on fishing, shrimping, and oystering laying off staff – is indeed happening, as NPR reported last week.

On Sunday, May 9, 120 people worked at Crystal Seas Seafood, based in Pass Christian, MS.  On Monday, May 10, the employee count was reduced by half to just 60.  But those that are left are not out of the woods: a manager says these workers may not receive their full wages.

With one huge business roadblock – the spill – affecting so many companies at once, it can be difficult to view each individually as a case study in turning to a strategy that has helped a number of our Top Small Workplaces weather their own industry downturns: "sharing the pain."  This employee engagement team strategy is defined here (the article also illustrates how two of our award-winning firms used and ultimately benefitted from it).

If leaders of affected companies in the Gulf Coast region think they'll need to lay off workers anyway, why not try sharing the pain first?  If they practice frank, communications team building with their workforce and give them the option of staying on but making a group sacrifice, such as pay cuts (including for leadership), they might be surprised what they find as innovative ideas that could sustain the business through this troubled season.

For example, NPR notes that the spill has caused oyster prices for companies like Crystal Seas to skyrocket.  What if most or all workers who cannot be on the water now were instead reallocated to seek and obtain the best possible price on oysters?  Or other, even better ideas could be generated through one or more all-hands meetings.  The small staff at Communispace, the company of our Best Boss Diane Hessan, literally saved the business during a hard time in 2001 by generating over 50 ideas in this capacity in a day and a half.

This is not to say that share the pain is for every company, nor that if employed would lead to the kind of successful about-face that Communispace and other companies achieved when faced with similarly tough circumstances.  Yet, it would do at least one thing: show employees both pre- and post-layoffs that the company cares about their wellbeing along with their bottom line.  This promotes a more productive workplace culture regardless of what conditions dictate companies do down the road.

Related: Did you know that as recently as March, no less a business authority than Forbes came out in support of sharing the pain?  Read about the magazine's endorsement of this strategy here.

Photo credit: Wikimedia Commons

Mather LifeWays, a nonprofit dedicated to enhancing the lives of older adults, is near and dear to me.  Near, because their head office is in the same building as Winning Workplaces' offices.  And dear, because the very first article I wrote for our IDEAS newsletter was on the wellness-themed employee engagement programs the organization offers its employees in both Illinois and Arizona.

I got an email from Mather yesterday promoting a series of five webinars they'll be hosting once per month from June through October (you can view the email as a web page here).  The topics that will be covered in each one-hour session include creating a workplace culture of wellness, and creating "multi-dimensional" employee experiences for greater ROI.  (As I have written about before, ROI for wellness programs typically means lower absenteeism and turnover and also decreased medical insurance premiums – all of which are highly desirable by companies in today's economy.)

You can attend the sessions individually, and Mather is also offering a group discount if you register to attend them all.  One nice benefit is that it looks like health educators, HR professionals, nurses, and nursing home admins who attend the webinars will receive continuing education credits.

We're not making any money by telling you about these upcoming webinars – we just care about workplace wellness because the companies in our network do: 58% of our 2010 Top Small Company Workplace award applicants offer a health and wellness program for their employees, and an even greater share of our finalists (77%) do.

Related: This recent post shares 16 common staff engagement activities around wellness as used by our 2010 award finalists.

In Winning Workplaces' latest IDEAS newsletter on employee engagement and team building strategies in small firms, we wrote a feature on the "Move Your Money" movement after we sent a survey on it to registered users of our website and others in our network.

We listed selected qualitative feedback of our 172 respondents to the question, What do you think of this movement's potential to help small businesses grow, and the impact it will have on the U.S. economy?  Based on the feedback, we then assigned an "impact level" rating of Low, Moderate, and High.

In our survey we also asked respondents to list their state.  This enables us to sort responses to the above question by region, maintaining the impact level rating of each piece of feedback.  The visualized data on this was something outside the scope of our original article, due to length, so I present the data here, as shown on the U.S. map below that's been segmented into regions:

Note: The majority of responses are from folks based in Illinois, as that's where we're located and do most of our on-site organizational work.

Even though for balance we included an equal share of "Low" impact level responses in our original article, compared to "Moderate"- and "High"-level responses, when we review all responses by geographic region, we see that the West just barely registered into the "High" level area.  The rest of the country – again, based on our survey sample – is squarely in the "Moderate" zone.

The takeaway here is that while we noted in our newsletter article that less than a fifth of respondents have moved their business accounts from larger to smaller banks, or know another business leader who has, all of them believe the movement has the potential to make at least a moderate impact on small business, and economic, growth.  Those in the West believe it will have a greater impact.

Related: Two of the small firms we recognized for seeing a payoff of employee engagement are on the Move Your Money list.  See which two here.

I've addressed emotional intelligence as it relates to building a more productive workplace in past posts, and Winning Workplaces also did in our latest IDEAS newsletter, thanks to expert guest writer Gail Sussman Miller.

So it was fortuitous for me to be introduced, last week, to the Institute for Health and Human Potential (IHHP).  This research and learning organization, with offices in Canada and Australia in addition to the U.S., has worked for more than a decade to use emotional intelligence as a means to boost both employee and leadership performance in organizations.  Some big brand names believe in their work, including NASA, Intel, and the U.S. Army.

I wanted to share with you three leadership takeaways around emotional intelligence that IHHP provided me.  First, read these two white papers:

• Is Stress Working for You or Against You?
• Managing Your Emotions: How your feelings can unconsciously undermine your ability to perform at your best

And second, today Sara Gregory, IHHP's Director of Operations & Marketing, shared with me details of a related webinar they're hosting on Thursday, April 29, entitled "The Power of Approach - Doing What’s Difficult to Drive Performance & Leadership."  Here's the info and registration link for the free session.

My impression is that emotional intelligence is a relatively new and emerging subset of employee engagement research, but that it's one that could be embraced on a much larger scale as both new and established small businesses work to gain or regain ground with consumers as the economy improves.  I also think it has the potential to reshape our thinking when it comes to building teams in the workplace.

What do you think?

Considering such major sporting events as the Super Bowl and March Madness, the first quarter is always more conducive to a curious workplace phenomenon: the office betting pool.  These pools enjoy continued support in the spring and summer thanks to baseball, and certainly during other times of the year based on both national and regional events.

But what's the employee engagement practice in your organization on betting pools in the office?  It is probably not formal in the way of practices in your employee manual, but do you have one nonetheless?

This is the topic of our current web poll on our website homepage.  And guess what?  I need you to add your vote to break a tie.  Currently three people say they allow office betting pools, while three do not (the poll went up a week ago as part of our latest IDEAS newsletter on staff engagement activities for a more productive workplace).

Add your vote now!

Thanks in advance.  If you have any thoughts on good or bad experiences with office betting pools, I invite you to comment about them below.

One of the constituencies that voiced their opposition to President Obama's healthcare reform bill, before it became a law last month, was business leaders, including those who run small businesses.  While the Obama administration's thinking was to pay for the expansion of healthcare to approximately 30 million more customers in the U.S., in part, by taxing wealthier individuals at a higher rate than middle- and low-income earners, business owners countered that taxing those who earn above the $250,000-per-year threshold – especially those who have a very small number of employees, or no employees – would force many of them out of business.

This is just the latest incidence, since the early 2000s when President George Bush cut tax levels substantially for the top income earners, of business owners wanting to maintain the status quo when it comes to paying taxes.  In today's current economic climate, which is still shaky in the eyes of many, it's an argument that understandably continues to hold ground.

So when you have the leader of one of the most successful consumer goods companies saying very publicly that he wants a return of higher, Clinton-era tax levels, that makes headlines.  This is what Winning Workplaces Best Boss Jeffrey Hollender of Seventh Generation has been calling for with respect to the group United for a Fair Economy's Tax Fairness Pledge.

Hollender explains his position on this issue today on his Inspired Protagonist blog:

Half of all the Bush tax cuts went to the top 5% of income earners.  Instead of the promised trickle-down, what we've gotten in return is a deepening national dept, reduced funding for important public structures, and widening disparities of wealth and income.  Adequately funded public programs, from education to transportation, are necessary for businesses to prosper and the economy to thrive.  We also understand the need to rein in the deficit.  That's why last week I called on Congress to let the Bush tax cuts expire this year as scheduled.

I think there are two ways to look at Hollender's stance.  You could argue that he is betraying many of his fellow business owners.  Or you could argue that Hollender is just walking the talk of his new book, The Responsibility Revolution.  I'll leave it up to you, the reader, to decide – I'd love to read your feedback on this issue.

Related: We reviewed The Responsibility Revolution in our latest IDEAS newsletter.  Get a sense of how it links back to more effective workplace team building and employee engagement by reading our review here.