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ACG Denver

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ACG Denver announces Intern Exchange for college students

 In this competitive job market, what employers look for first is relevant experience. This means internships can be the best line to a job for the growing number of young people competing in today’s market.

ACG Denver’s new Intern Exchange will serve as a clearinghouse to match opportunities for paid and unpaid internships and jobs with the needs of small- and middle-market companies and nonprofit organizations. Undergraduate and graduate college students, as well as just-graduated students, are eligible to participate in the program.

Intern Exchange was the brainchild of ACG Chairman, David Mead, after many years of helping clients of The Mead Consulting Group identify opportunities to use college students as interns. Says Mead: “These interns have made big contributions to our client companies and, in a number of cases, have been hired by the companies after graduation. I saw a role in this for ACG to serve the business community in a new way.“

Indeed, findings from a December 2009 poll from The Washington Center show that 96 percent of organizations polled are “more likely to hire a recent college grad with internship experience,“ and many are creating a pipeline of potential employees through intern programs. “It’s becoming clear that getting an internship can be a critical success factor in the hunt for jobs,“ according to Mead, “not to mention a way for organizations to increase their comfort level when investing in a new employee.“

While many Colorado university business schools have excellent structured-internship programs, there are a number of highly qualified graduate and undergraduate students that are looking to connect with the local/regional business community. Members of the ACG Denver Intern Exchange committee will help companies identify and develop positions appropriate for college interns. ACG Denver will post available intern/job opportunities for companies and facilitate an exchange where interested companies, colleges/universities and students can connect online at: http://chapters.acg.org/denver/internexchange.aspx.

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Great hires and bad hires: How to tell the difference before you make the offer

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By Kathleen Quinn Votaw

You hire someone. But it doesn’t work out. He or she leaves.

What is it that you remember and say can say about that person in the past tense? It’s rarely the fact that the employee didn’t know how to work the numbers or that he or she couldn’t put the pieces of a widget together. No, it’s almost always that person’s soft skills that generate conversation — his or her personality, character and values.

Two recent scenarios from my personal experience serve as good examples: A multi-generation family-run, team-oriented company in Michigan was about to hire a sales person who had all the skills needed to fill the role, as well as an impressive track record. Before making the hire, they wisely chose to get an assessment of him. In an interview that was part of the assessment, the candidate went into a rage when questioned more deeply about his background. His temper was missed in the normal interview process. Discovering this major flaw before they made the mistake of hiring this key person most likely saved the company hundreds of thousands of dollars.

Another company was not so careful and made a bad hire. This company valued giving every employee a voice: Everyone was part of the team and decisions were made by consensus. When a candidate with a strong hierarchical bent was hired, he lasted just 30 days. The disruption was significant, as were the costs.

Go beyond the tactical

Most companies tend toward the tactical in their hiring practices, focusing on long lists of competencies, specific experience required and other hard skills. These are important, of course.

Equally important are the soft skills. How will the person you hire fit into your culture? No one would list drama queen, insensitivity, trouble meeting deadlines or poor ethics as qualities they’d like to bring to a company. But, by not checking out the soft skills, those are exactly the traits you risk hiring. You may also lose your A-players when you make bad hires—they don’t have to tolerate a difficult work environment.

Begin with the end in mind

So what’s the solution? Begin with the end in mind. Start by thinking about the soft skills that will fit into your organization. Then consider the hard skills necessary for the job. Culture, then candidate.

Your company’s values should serve as the foundation for hiring decisions: Who are your customers, and how do you choose to serve them? What gives synergy to your teams? Who are the great hires in your organization and what is it about them that helped them succeed in your culture? And what was it, specifically, that kept others from fitting in? These are things you need to understand even before you write the job description—and they will tell you what to look for in the interview.

Here are some of the things to look for in the interview process and assessment that will help you determine whether a candidate is a fit for your company’s culture:

—  How a candidate treats other team members;
—  How the people a candidate will work with will most likely relate to him or her;
—  How a candidate’s interpersonal skills will impact his or her performance and that of the team;
—  What motivates the candidate and what turns him or her off;
—  How the candidate processes information and how well he or she communicates;
—  How the candidate reacts under pressure;
—  How does the candidate demonstrate leadership;
—  And how do all of these things mesh with your culture?

Understanding a candidate’s hard skills is definitely the easy part of the hiring process.

Take your time interviewing. Ask candidates about their previous job, what they liked and didn’t like—and then let them talk. Don’t be afraid of silence. Let the candidate fill the gaps.

You’ll discover much of what you need to know. And as you interview and assess candidates, keep in mind that a cultural fit can’t be developed.

As Jack Welch said, “You cannot have a black hole in your organization where a star should be.” A star for your company is someone with the hard skills to do the job and the personality, character and values that match your culture. Anything less is a high-risk business decision.

Kathleen Quinn Votaw is founder and CEO of TalenTrust, a recruitment solutions firm with offices in Lakewood and Conifer, that works with companies to acquire key talent for accelerated growth. Kathleen is president-elect of the Association for Corporate Growth (ACG), Denver. Reach Kathleen at kvotaw@talentrust.com or 303-838-3334.

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Six bottom-line best recruiting practices

By Kathleen Quinn Votaw

Recruiting strategies may flex and change with economic conditions and in reaction to competitors in the market. But there are certain best practices that are a constant benefit to every organization that adheres to them, whether the economy is up or down.

Recruiting excellence has a direct, and positive, impact on the bottom line. Increasing revenue per employee and saving turnover costs are two important benefits. Here are six recruiting best practices that will make a measureable difference in your business:

1. Assess candidate and culture fit.

Go beyond the usual tactical list of competencies and required experience; hire to fit your culture and values. A better understanding of a candidate’s personality traits, motivation factors, work behavior and preferred activities is often the most important in determining a candidate’s potential success in your organization. Additionally, in making hiring decisions don’t give much weight to your personal instincts, which are sometimes accurate, but frequently not. Instead, use assessments to gain insight about candidates and eliminate subjectivity. There are many excellent assessments on the market to measure candidates’ character, values and soft skills; and quantify the data to show the cultural fit with your organization. Best practice includes hiring a neutral third party to administer the assessments, and then get a second opinion.

2. Outsource some of the process.

In recruitment process outsourcing (RPO), an organization contracts with a provider to act as its internal recruitment function for pieces of the recruiting process, or to manage the entire function for a period of time. RPO providers do everything from profiling candidates through on-boarding new hires, providing staff, technology, procedures and reporting. RPOs increase the quality of the candidate pool, improve the time to hire rate, provide metrics, help ensure compliance, and reduce costs. They also allow your managers to focus on the right candidates. Best practice includes making sure that RPO provider and management thinking on recruitment is aligned.

3. Establish a robust referral program.

Employees usually refer only family and friends they trust and know will fit into the culture of their organization. This makes employee referrals some of the best possible hires. Organizations like Ohio’s AmTrust Bank, which won the 2008 ERE Media Recruiting Excellence Award for innovative retention, have found that their referral programs have increased performance and retention. An effective referral program makes it easy for employees to provide information about their organization. Providing a card or flyer that explains the benefits of working for your organization helps. Best practice includes rewarding employees with something they truly value.

4. View recruiting as a lifecycle process.

Put effective procedures in place to transition people from candidate to employee, ensuring that recruiting and on-boarding processes reflect well on your organization. Get feedback from new employees as they merge into the company culture and continue this dialogue with employees throughout their employment, and when they terminate. Best practice includes a formal and ongoing program for effective employee communication.

5. Make retention part of your recruitment program.

Turnover is costly, with estimates running from 150 percent of annual compensation for typical employees to 400 percent or more for key people. Use metrics to identify and analyze turnover trends in your organization so that you can better predict recruitment needs and plan for succession. Best practice includes providing managers with a retention toolkit and making retention planning part of every manager’s performance goals.

6. Keep up to date with trends.

Recruitment is riding a wave of innovation. The increased ability to make hiring decisions based on data rather than intuition is helping organizations anticipate and manage future needs and events with greater business acumen. In order to remain competitive today, you need to be creative in incorporating new ideas into your recruiting program. Best practice includes adopting social media and metrics in recruitment and ensuring flexibility in your culture in terms of benefits, work hours, work location and other areas that workers increasingly expect.

Best practices in recruiting cannot stand alone, but they are an effective start in reinforcing your culture and improving your bottom line. Align them with best practices in other areas of your organization and you’ll ensure a strong, competitive position in any market condition.

Kathleen Quinn Votaw is founder and CEO of TalenTrust, a Recruitment Process Outsourcing (RPO) firm that helps companies hire the right people to accelerate their growth. TalenTrust LLC has offices in Lakewood, CO and Philadelphia, PA. Kathleen is president of the Association for Corporate Growth (ACG), Denver. Reach Kathleen at kvotaw@talentrust.com or 303-838-3334 x5.

 

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Right, wrong and the torment of a bad choice

By Kathleen Quinn Votaw

A recruiter’s client was so excited about two candidates that they had a difficult time making a choice. They finally decided that they wanted to hire both candidates. The problem was that this company couldn’t afford to pay two commissions, causing a moral dilemma for the recruiter.

Recruiters make their living from commissions, and many operate on the premise that, “If you don’t pay me, you can’t hire that person.” Fair compensation for a job well done, in other words.

Should a client’s inability to pay a second commission stand in the way of an earnest candidate getting an ideal job, especially in this economy? Or is allowing the company to hire a candidate without paying a commission setting a precedent that could harm not only the recruiter, but also the industry? What’s the “right” thing to do?

You may have guessed that the recruiter was me. My dilemma set me thinking about the special circumstances of moral and ethical questions in business, as opposed to the more spiritually oriented quandaries we deal with on the personal side of life. New York’s Center for International Leadership president, Zygmunt Nagorski, says of moral challenges in business: “Material rewards are swift and sometimes enormous in our society. Their dark side is not a potential social punishment. It is simply contending with an inner torment.”

When you’re in a moral business dilemma, the question is: Can you live with the internal torment of making a choice that is, on some level, wrong?

Moral dilemmas make for lonely decisions
Moral dilemmas in businesses somehow seem less than black and white. They force you to make choices in one of two contexts: trying not to do harm, or doing or leaving undone something that is good. Often, you’re choosing between two actions that can both be justified, as in my dilemma. Other moral dilemmas that come to mind are:

  • You just took a job and a better one came along, should you sacrifice your professional growth to stand by your commitment?
  • Is the social responsibility of business to increase profits, as Milton Friedman said, in which case you’d put shareholders first in every case? Or, should your business have a social conscience as well?
  • What should you allow into your products? Is it okay to use materials that you know have some toxicity? How do you balance profits with the environment and with safety?
  • Should you sacrifice jobs to save the company?
  • Should you drive a mortal blow into the heart of your competitor if you can, or does concern over the hurt you’d cause to those employees weigh in?
  • If you’re doing business globally, how much do you compromise your services to the demands of a foreign country, as many see Yahoo and Google having done in China?
  • How do you decide when the ends justify the means?


Making these kinds of decisions can be lonely indeed, and the test is always whether you’re able to live with yourself after making your choice.

Getting to the “right” choice
There a few ways you can help yourself get to the right personal decision – one that won’t torment you for months or even years.

Get prepared
Many business schools offer and even require courses in business ethics, and ethics are included in many leadership programs. These courses create awareness of the types of ethical issues you may face in business and many add analytical and reasoning skills training. Take advantage of these courses.

Ask others
Seek out a mentor whose ethics you respect and ask their advice. Or, initiate dialogues with diverse people to gain various perspectives on a particular dilemma.

Test yourself
As you make your choice, ask yourself these questions:

  • Will I be guilt free if I make this choice? Can I live with this choice?
  • If my decision involved my family or close friends would I make the same choice?
  • Would it be okay if someone made the same choice and it affected me?
  • Would an ethical person I respect make the same choice?


Over time, you’ll become conscious of the decisions and choices you make and understand what living with your choice will mean to you. This, more than anything, will help resolve moral dilemmas.

As for my own dilemma, we’re working on a solution that all can live with – torment free.

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Study shows Colorado companies weak in key performance areas

By Laurie Bassi, Bill Heck, Joanna Groom King and Matthew King

Colorado companies show disturbing weakness in key areas of human capital management  that directly relate to overall performance, according to a new study by MHO Research. Low scores on factors such as employee development put companies at risk of undermining their profitability, limiting their ability to attract and retain talented employees, and decreasing customer satisfaction—all of which relate to maintaining a competitive advantage.

In tough economic times like these, organizations should focus on the things they can control—and that means their capabilities, especially those related to human capital. Most executives subscribe to the idea that employees are their most important asset. By focusing on best practices in human capital management, companies have a good chance of successfully emerging from the current downturn.

The MHO Research study reveals specific areas where Colorado companies fall short and suggests best practices that will help any organization drive improvements in their bottom line.

Study basics

MHO Research is a consortium of three Colorado consulting firms: McBassi & Company, Harlon Group, and OE international. In early 2009 we surveyed executives and human resource professionals in 111 Colorado businesses across the state about how they are managing talent. We then compared the results to a McBassi benchmarking database of more than 900 companies in the U.S. and around the globe, and to the average “best-practices” score for organizations in the database.

Until recently, there wasn’t an effective way to measure the bottom-line results of investing in human capital management. Working with colleagues worldwide, McBassi developed a system for assessing HCM and predicting organizational performance. We used this system to measure and analyze the results of our survey of Colorado companies.

Colorado’s lowest score: capacity to learn

The most striking area of weakness in Colorado companies is the capacity to learn; it needs the most critical attention. Learning capacity represents an organization’s overall ability to absorb and assimilate information and to innovate—and, ultimately, to achieve a continual level of improvement. Colorado companies fall about 25 percent below the level of best practices in this area, which indicates they are not taking the steps necessary to enable learning and innovation.

We were surprised at this result, after hearing from Colorado companies over the years that innovation is a top priority for them. And they are not alone. A May 2007 article in HR Magazine states that: “…many business forecasters are predicting that workforce creativity and innovation will be the most important factors in establishing and maintaining a competitive advantage.”  And according to a 2005 article by Deloitte, “Constant innovation is a hallmark of successful growth companies—staying ahead of the competition requires inventiveness at the individual, group and company levels.”

Steps to greater learning

What steps should Colorado companies be taking to improve their capacity to learn and foster innovation? Primarily, they should focus on continuing strong employee and leadership development programs. Successful companies around the globe have a sustained commitment to development, and our research shows that Colorado’s most profitable companies focus on development as well.

Many companies abandon their development programs in economic downturns, and this can significantly reduce their chances of emerging as a highly effective—and competitive—organization when times are better. It’s likely that the most profitable companies have more money to spend on development; but it’s also true that companies that invest in educating employees are more profitable.

We suggest that Colorado companies look for inexpensive ways to develop employees during hard times, such as taking time to understand individual employee aspirations and setting goals / plans to achieve them. Development may include a mentoring program, cross-training among different functions, and special projects (that are usually win-win).  Just having those individual conversations goes a long way in showing how much you value employees.

Other areas where Colorado falls short

Colorado companies are below average compared to best practices in four other key areas of HCM that strongly correlate to overall performance.

Employee engagement

What it means: 

Creating desirable work environments, including designing jobs purposefully, ensuring that employees’ time is well used, recognizing and valuing employees and their work, and providing opportunities for employee advancement.

How to do it:  

Enable employees to have more control over their work processes and openly commit company resources to encourage retention of employees with critical skill sets.

Knowledge accessibility

What it means:

The extent of collaboration that exists in an organization and its capacity for making information and ideas widely available to employees. Low scores reflect problems getting cross-functional work completed effectively and on time.

How do to it:  

With a focus on project and cross-functional team leadership, create simple information-sharing systems to meet the demands of higher volume and increased productivity as the economy improves. 

Workforce optimization

What it means:

An organization’s success in optimizing the performance of its employees by establishing effective processes for getting work done. Low scores indicate inefficiencies and unnecessarily high costs.

How to do it:

Become deliberate in workforce planning. Understand who you have, who you need, what their roles are currently and what they should be in the future.  Ensure that performance management processes are solid and enforced. Review and improve work processes.

Leadership practices

What it means:

The foundation for ensuring that employees are developed, sustained, and deployed successfully and that goals are achieved. Low scores are a sign of difficulties in motivating employees and retaining top talent.

How to do it:

Ensure that management at all levels has strong leadership skills, and make training and development for current and future leaders a priority. Focus on executive and managerial inclusiveness, seeking and using employees’ input in decision-making.

Focus your efforts where they matter most

Colorado companies, like those in nearly every country in the world, are grappling with this economy. By improving your capabilities in human capital management, you will perform better now and position your company to emerge with a long-term competitive advantage.

Read the MHO Research Colorado Human Capital Benchmarking Study 2009: Colorado Summary Report. Read “Maximizing Your Return on People” by Laurie Bassi and Daniel McMurrer, Harvard Business Review, March 2007.


Susan Meisinger, Creativity and Innovation: Key Drivers for Success, HR Magazine, (May 2007).

Deloitte, Fostering an Innovative Culture: Sustaining Competitive Advantage,  page 3, (February 2005).

Laurie Bassi, McBassi & Company, can be reached at 866-345-5730 or info@mcbassi.com. Bill Heck, Harlon Group, can be reached at 303-996-5695 or bill.heck@harlongroup.com. Joanna Groom King, OE international, can be reached at 303-748-1510 or joanna@oeintl.com.

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Human capital new king for PEGs: Building bold leadership for change

By Kathleen Quinn Votaw

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A recent Forbes article begins: “The focus at private equity firms is shifting. Cash will always be king, but looking ahead, the most important type of capital may very well be human. It’s a company’s bold leadership that carries it into financial prosperity — not its product, services or numbers.”  This new focus on talent will surely improve the success rate of acquisitions, which is typically rated at less than 50 percent.

Because the nature of private equity groups is to operate at a pace that’s at least twice that of other companies, finding the right human capital can require two to three times the effort it takes to find C-suite talent for other organizations. PEGs have historically invested in the top-performing businesses in high growth markets and many are now buying smaller and even start-up firms in emerging markets. At both ends of the spectrum talent due diligence is as important as financial due diligence in acquiring companies and integrating them. With the promise of great reward on one side and the high risk of acquisition failure on the other, a rigorous process of recruitment and assessment can be crucial to a PEG’s portfolio success.

A PEG’s world

When a private equity group buys a company, your strategy is short-term change through organic growth. You may purchase larger companies for their great management teams and proven track records, simply replacing the CEO with one who can lead the company in the desired new direction. And you may put together an entirely new management team that’s experienced in change management to lead smaller companies. In either case, hiring bold leadership is required to meet your investment goals. Why bold?

A successful CEO in a typical corporate situation can change companies and adapt well, given a little time: get to know the team before being hired, maybe replace a few team members over the course of a year or so, build a support system, think about some new initiatives….

Contrast that scenario with the new CEO of a large-company PEG investment who touches down in a new culture with no internal support and no knowledge about where to get information – and is immediately tasked with setting a new direction for the company. Or, the CEO of a smaller portfolio company who takes on an entirely new management team that hasn’t worked together before and yet has to set a course of change for employees who are probably resisting every step of the way.

Change is difficult in any situation, but leading change in a portfolio company takes a leader with special fortitude, flexibility and judgment — someone who is bold.

Traits of a bold leader

What characteristics should PEGs look for in recruiting CEOs and other executives for portfolio companies? In addition to all the normal leadership skills you expect in an executive, PEGs should look for traits like the following that define a CEO who can deep dive into the organization quickly and find the top few priorities to focus on, all within the first few months:

• Entrepreneurial outlook
• Hands-on change management style
• Strategic visionary
• Excellent communicator with all constituencies
• Asks a lot of questions
• Willing to challenge unrealistic goals
• Seeks advice from others
• Able to attract and retain top talent
• Skilled at sales and marketing as well as financially astute
• Able to cultivate a sense of urgency, motivate and galvanize

Such leaders are difficult to find. A variety of assessments helps select for these critical traits and should be a key part of the recruitment process. Assessments should also be incorporated into overall talent management throughout the investment period.

Confirming with assessments

In the fast-paced PEG environment assessments can play a key role in quickly confirming that you have the right talent in place and in developing the skill sets you need to stay nimble.

Assessments give you insight into the characteristics and skills of individual players and help evaluate the strength and weaknesses of teams. A good practice is to assess management within a few weeks of an investment to help understand the quality of the executive team; identify capabilities gaps; measure commitment; and pinpoint issues that need management attention. Assess again in six months to measure progress and confirm that the right team is in place.

Although every company can benefit from assessments when making key talent recruitment and management decisions, PEGs don’t have the luxury of time to correct errors in decision making and should consider assessments a necessity.

A profitable exit

A focus on human capital begins with recruiting leaders who have the right experience and characteristics to lead the quick change private equity groups are looking to achieve. Assessments can ensure that you stay on the right track and are able to exit — profitably — within the usual three- to five-year timeframe.

Kathleen Quinn Votaw is founder and CEO of TalenTrust, a recruitment solutions firm with offices in Lakewood and Conifer, that works with companies to acquire key talent for accelerated growth. Kathleen is president-elect of the Association for Corporate Growth (ACG), Denver. Reach Kathleen at kvotaw@talentrust.com or 303-838-3334.

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Web-based recruiting: $522 million industry in U.S.

By Kathleen Quinn Votaw

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“I would rather be tied up to stakes in the Kalahari Desert, have honey poured over me and red ants eat out my eyes than open a Twitter account. Is there anything you can say to change my mind?”
—Maureen Dowd, New York Times columnist

“Well, when you do find yourself in that position, you’re gonna want Twitter. You might want to type out the message ‘Help.’” —Biz Stone, co-founder Twitter

Twitter, which allows you to send 140-character text messages, and other social media have changed the landscape—and the recruiting landscape is no exception. If you haven’t yet added social media, also called Web 2.0, to your repertoire of recruiting strategies, it’s well past time. Even the CIA has ventured into social media for recruiting: they’re on both Facebook and YouTube.

Although an increasing number of companies is creating a presence on social media Web sites as a way to attract new talent, if you want to recruit Millennials, a social media presence is mandatory. Today’s high school graduates have been exposed to the Internet since early childhood. Their plugged-in world is creating a level of connection and interactivity that is changing how we communicate—and do business.

But it’s not just Millennials who are benefiting from the networking and convenience social media offer to recruiters and candidates alike. An increasing percentage of senior-level candidates is also adopting Web 2.0 to network and job-search. The Economic Times recently quoted an HCL Technologies executive who said that 25 to 30 percent of its senior hires now come from social media connections, and other companies are reporting similar percentages.

Web-based recruiting has mushroomed into a $522 million industry in the U.S., and it’s predicted to grow at a rate of eight percent a year, according to 2008 Forrester Research.

The new “standards” in social media recruiting

Social media may not replace recruiting software, at least not any time soon, but they add power to every company’s recruiting efforts. Social media sites are getting more in tune with recruiting needs and continually responding to them with new capabilities; and companies are getting creative in how they use these new tools.

Take Twitter, for example, whose user base jumped 343 percent in 12 months, from September 2007 to 2008 (Workforce.com). In addition to following company executives, Twitter gives candidates access to real-time job postings. Employers use Twitter to connect with passive job seekers, access directories to follow job seekers by industry, and use tweets to communicate the benefits associated with a specific job or the attributes of their company.

LinkedIn is the king of business networking sites with 35 million members and 1.5 million new members added every two weeks. As companies lay off tens of thousands of people, LinkedIn has become the first stop for many job seekers. LinkedIn has added a new suite of prospecting tools for recruiters that includes a stand-alone applicant tracking system, a new internal e-mail marketing campaign tool, employment ads, annual subscriptions for job listings and customizable profiles that companies can use to display job information to LinkedIn members based on their network profiles.

Many companies are being proactive by creating their own Web pages on Facebook and MySpace and posting videos on YouTube to attract candidates. Recruiters are also using Facebook and MySpace to get insight about prospective candidates through their profiles on these social networks. However, there’s a caveat: many candidates don’t want prospective employers using social media to check their backgrounds, and employers risk losing a candidate’s respect – and their interest – if candidates feel that their privacy has been violated. There is also a legal risk to consider. These highly personal sites can give employers an inadvertent look into things like a candidate’s age, marital status, medical problems and plans to start a family, which answers questions that cannot be asked in interviews because they can be grounds for discrimination. Recruiters should cautious about how they use these sites.

There are companies whose recruiters regularly scan blogs and Web sites, as well as the professional and personal networking sites. Internal social networks and blogs provide companies with an online platform for discussion and networking about their industry, company and jobs, and provide an informal way to find specialists in specific areas.

What’s in store for the future?

“The future of work is here; it’s just disguised as a game,” says Diego Rodriguez, a partner in the consultancy IDEO, ranked as one of the world’s most innovative companies. What Mr. Rodriguez is talking about is this: computer games that allow companies to cast a wider net for new talent. Players are challenged by starting companies, developing R&D strategies, or leading a company as it launches a new product. As virtual CEO, players pick the best time to launch a product, establish their sales force, and manage the product over a number of years. The McKinsey office in Germany has used a game called CEO of the Future, modeled loosely on the reality show The Apprentice to help choose talent with executive potential since 2000. Johnson & Johnson orients new hires in a virtual world and uses an online game to train them.

This is just the beginning of a new world for recruiting. Tweet if you want to stay competitive, and attract new generations of top talent.

 

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Don’t miss another opportunity to sell during the upcycle

By David Mead

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Dan McCallin, former owner and CEO of Commerce City-based Timberline Steel, recently made an interesting statement about his company: “We missed the selling boom of the late 1990’s and were determined that we would not miss another opportunity to sell during the next upcycle. We decided to take the steps so that we were prepared.” While Dan originally made that statement during the recession of 2002, and later sold the business in early 2006, it could certainly apply today.

The exit sales process may take the better part of a decade.   

With credit markets tight, the economy in recession, and bad news seemingly everywhere, it may seem counter-intuitive to be writing about preparing your company to be ready to sell during the next economic upturn. While some business owners may believe they can pull the string when they are ready, the truth is, for many business owners, it may be exit sales cycle may take the better part of a decade to execute. Professionals will tell you that in order to sell at highest value, the process includes 2-3 years to get ready, 1 year or so for the transaction, and then you may have to spend 3-5 years with the company after the sale.

Much of the preparation can be accomplished during the down cycle.

Companies can focus on making fundamental improvements to their business during the downturn that will help them emerge faster and healthier than their competitors:

1.    Focus on customer net profitability
2.    Upgrade management
3.    Cleanup business processes
4.    Develop a strategic growth and execution plan
5.    Position the company for the upturn
6.    Never waste the opportunity of a good downturn

Customer net profitability. The tendency during a downturn is to cling to any customers and revenue no matter the profitability level. A common comment is that “at least they absorb overhead.” The notion of unprofitable business absorbing overhead may be one of the greatest false beliefs in business. In many cases, overhead that has been viewed as fixed is really a cost that can be minimized or shed. Carrying unprofitable business will be a continuing cash drain that may inhibit your business’ ability to grow as the economy improves.

Upgrade management. There is a great supply of good talent now available in the marketplace. In many cases this may be talent that would not be available in better times. Take advantage of the opportunity to improve. Similarly, this is a great opportunity to review all of your employees and weed out those with below average performance, poor potential, or unrealized potential. Our clients use a simple tool to rank all employees in terms of potential and performance – the results make it very clear which ones have been a drag on the company.

Clean up business processes. During boom times, many companies claim they are too busy to scrutinize business processes to make improvements and to streamline in order to increase throughput. That “excuse” typically does not apply during the downturn.

Develop a strategic growth and execution plan. You need a plan not only to help you survive the downturn, but also that will allow you to be agile enough to take advantage of opportunities in the recovering marketplace. There may be market segments that will be slow to come back; some may never come back the same way. Other market segments, however, may present huge new opportunities. Your organization needs to develop a plan and be prepared to execute.

Position your company for the upturn. The most significant competitive gains are made during a downturn. Companies that are prepared and well-positioned can accelerate very quickly as he markets healthy. Competitors that are under stress during the downturn will actually be under greater stress as the economy improves. Cash demands can be low when demand is low. Cash needs, however, will increase as the economy improves. Companies will need cash to hire more people, invest in inventory and equipment, etc. 

Never waste the opportunity of a good downturn. During downturns, companies have the opportunity to examine everything, reduce unnecessary expenses, trim those underperformers, examine unprofitable business, streamline business processes, etc. 

Take a lesson from the Boy Scouts: Be prepared. These steps can add value to your business – even during a downturn. When the economy improves, your business can accelerate faster and be well- positioned. The market for selling a business will be ripe in late 2010 and 2011. Those businesses that are ready will find a hungry group of buyers and investors who have been sitting on their hands during the recession.

Let me know what your company is doing to prepare. Comment on my blog http://davemead.blogspot.com.

David Mead is President of The Mead Consulting Group, a consulting and advisory services firm, based in Englewood, that has been helping Colorado companies grow since 1981. The firm’s 40+ senior consultants assist Colorado companies with strategic growth and execution, improving profitability and cash flow and maximizing value at exit. Dave is the current Chairman of ACG Denver and a long-time Board member. Contact Dave at: meaddp@MeadConsultingGroup.com or (303) 660-8135.

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The Rewards of Branding

Brands are more important than ever in economic hard times

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By Bob Byrd

When branding as a marketing discipline received its first big wave of attention in the early 1990s, it became the hot topic of marketing professionals. Not long after, it seemed a bit trendy to talk about branding. Branding was already a bit passé in some circles as the Internet began to change everything about how consumers—both B2C and B2B—related to companies from whom they purchased goods and services.

But branding has survived. The truth remains that a strong brand enables a prospective customer to form beliefs about a company long before experiencing the company first-hand. In this sense, branding is the foundation of all marketing activity that warms the environment for sales.

And now in times of economic uncertainty, branding is more important than ever. That’s because brands, ultimately, are belief systems. And in a recessionary economy, people are looking for products, services and companies that they can believe in.

The rewards of branding

Companies that pay careful attention to crafting and re-crafting their brands can expect to reap several recession-busting benefits. A strong brand:

•    Provides an advantage when pitching new business
•    Confirms a customer’s decision and prevents buyer remorse
•    Allows a company to charge premium prices
•    Gives employees a belief system through which to filter decisions, attitudes and behaviors
•    Makes it easier to launch new services and products
•    Makes it easier for satisfied customers to make referrals
•    Aids customer loyalty and retention
•    Transfers company value from individuals, such as founders and owners, to the company as a whole

These eight advantages—potentially worth millions of dollars in eventual outcomes—make it well worth the effort to engage in a conscious branding or re-branding process. In fact, all of an organization’s other marketing communications tactics—websites, social media, advertising, direct marketing—must be filtered through this crucial branding process in order to yield the maximum return on investment of every marketing dollar spent.

Architecture of a brand

What does a powerful brand look like? A strong brand stirs the imagination. It is simple, memorable and focused. That last point is especially important, as many companies struggle to accept that they must claim a unique position and leave the other ground to competitors. Companies that fail in branding often do so by trying to appeal too broadly to everyone.

A brand can’t be everything to everyone. By trying to appeal to the widest possible audience, weak brands end up standing for very little. They end up sounding remarkably similar to their competitors, when differentiating from the competition is essential to survival.

A compelling brand must be unique, and easily distinguished from competitors. It’s the only way to “own” a category in the minds of an audience. It must unite cognitive, emotional and visual elements. And, to live in the hearts and minds of its audiences, a brand must be designed into all customer experiences, every customer touch point. A formal audit of these dozens of customer touch points is a good place to start the process of applying a strong new brand.

Revisiting your brand

Creating a strong brand really begins with a process of discovery, asking probing questions about what makes your brand unique, better, different. What do customers and competitors alike say with heartfelt conviction about your organization? What values and virtues will your company uphold at all costs? The answers to those questions will launch your own brand discovery process.

Bob Byrd is director of client services for The Creative Alliance, a marketing, public relations and graphic design firm based in Lafayette. You can reach him at bob@thecreativealliance.com or 303.665.8101.

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The essence of ethics

By Kathleen Quinn Votaw

Late at night…no one around for miles – and yet you stop at the red light and wait. Why? You stop because it’s the ethical thing to do. We trust each other to stop, whether or not anyone is watching. You could say that trust is the outcome of ethical behavior.

It’s difficult to define, exactly, what ethical behavior is; and it’s impossible to measure. But we can sense when ethics are present in an individual or a company culture – and especially we sense it when they’re not. Ethical behavior is a two-way street. Companies and customers cannot effectively engage unless there is trust between them. And, to my point in this article, neither can companies and candidates.

In recruiting, where much of the interaction is often between just two people, a recruiter and a candidate, it’s incumbent on both parties to act with the highest ethical standards. If misrepresentations are made on either side and a wrong hire results, the impact in dollars and emotions is high – and entirely avoidable.

Put simply: don’t lie

If ethics were black and white it would be simpler for all of us. Instead, they are nebulous and subject to personal interpretation – and that’s why we sometimes get into trouble. As author and HR strategist Kevin Wheeler says, “Ethics define our moral rights and duties, and involve a commitment to doing the right thing.” However, a “commitment” can be a long way from the actually “doing” what we know is right.

In our no-time-to-waste competitive business environment it’s tempting to do what seems simplest, fastest and easiest, instead of taking a moment to consider what is right. In the rush to succeed, some even believe that taking time to do the right thing may put them at a competitive disadvantage. In the long term the opposite is true: high ethical standards enhance reputations and build successful brands that draw people and business to you.

Both recruiters and candidates could benefit from a set of guidelines for ethical behavior. This would prevent slippage into rationalizations and justifications that often lead to unethical actions.  Ethics for employers and candidates begin with a simple principle: don’t lie. Everyone wins when both company and candidate are open and honest about their histories, goals and expectations. Honesty should be a stated cultural value and modeled throughout every organization, including the recruiting process.

Ethical guidelines for recruiters

Even though a company may post written recruiting guidelines that help ensure a thorough and fair hiring process, the personal and business ethics of individual recruiters inevitably come into play in the decision making process. What should you say about a company’s poor financial performance? Should you mention the company’s high turnover rate? Should you enlarge the responsibilities or authority of a particular position to get the candidate you want? The questions asked of candidates and the information revealed about the company have much to do with the ethical behaviors that are valued and promoted within a company’s culture. Following are suggestions that will help recruiters set guidelines to help ensure ethical behavior throughout the process:

• Define the position requirements realistically and in detail and include performance expectations. Unnecessarily strict requirements can exclude otherwise qualified candidates; and placing candidates in a role they are not qualified for may jeopardize both the organization and the candidate’s career.
• Accurately represent the key elements of the position in ads or other means of sourcing.
• Don’t pose as someone else in order to gather the information you need about a candidate. You can find what you need without such subterfuge, which clouds ethics in the recruiting profession.
• Allow enough time to thoroughly interview candidates and give them adequate opportunity to present their qualifications – and to make a thoughtful decision. Communicate both the candidate’s strengths and weaknesses to the hiring manager, overcoming the desire to “push” the candidate you like personally.
• Share a realistic view of the company, position, promotion opportunities and compensation. Glossing over the shortcomings of a manager or division or other relevant information can lead to inappropriate and costly mismatches. Full knowledge of the realities, on both sides, is the best way to ensure a successful, long-term outcome.
• Offer salaries and benefits that are within accepted, appropriate ranges for specific positions. Compensation significantly lower than market rates shows a lack of respect for the candidate.
• Check references that are representative of a candidate’s many relationships, and not simply those references the candidate provides, which are almost guaranteed to be positive. Informing the candidate that you intend to contact people outside their list of references is the ethical thing to do.
• When in doubt about the right decision, weigh your alternative choices based on the fairness of probable outcomes and your organization’s values.
• If you need additional input, ask a trusted colleague for help in making ethical recruiting decisions.

Ethical guidelines for candidates

Candidates should keep in mind that ethical behavior will not only help get you the best position for yourself, but it protects your reputation as well. As much as people move around, if you misrepresent yourself in the market or act in other unethical ways, the word will get around and limit your opportunities. Following are things candidates can do to ensure their own ethical behavior and a positive impression to recruiters:

• Interview with organizations you are sincerely interested in. Don’t accept a position as a step in your job search and then continue interviewing with other organizations, or renege on a job offer you’ve accepted.
• Be truthful in everything you say and in all the information you provide to recruiters. Make certain that you are allowed time to fully demonstrate your qualifications for the position.
• Reverse the interview process to get answers to all the questions that are important to you about things like culture, management, and barriers and opportunities for promotion. The more informed your decision, the better for you and the organization, whether you accept or reject an offer.
• Be honest and open about your future plans and aspirations. If they don’t match with what the hiring organization can offer or accommodate, you may want to go elsewhere. Conversely, you may open up new opportunities for yourself within the organization.
• Negotiate honestly. Don’t play one company against another; you may lose both opportunities.
• Be upfront about your desired salary and the date by which you need to make a decision.
• Provide a variety of references that enable the recruiter to see you from many sides.

Keeping the end goal in mind

The goal of recruiting is to find highly qualified talent that fits your culture and accelerates or enhances your business growth. The goal of the candidate is similar: it’s to land the right position with an organization that matches your talents, fits with your character and personality, and provides opportunities to grow. Achieving these goals is possible only if both parties operate ethically, even when no one is watching. You have to live the results.

Kathleen Quinn Votaw is founder and CEO of TalenTrust, a recruitment solutions firm with offices in Lakewood and Conifer, that works with companies to acquire key talent for accelerated growth. Kathleen is president-elect of the Association for Corporate Growth (ACG), Denver. Reach Kathleen at kvotaw@talentrust.com or (303-) 838-3334.

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ACG’s Christopher Pelley Speaks at Oxford Ethica Think Tank

Pelley Addresses Oxford’s Students, Faculty, Alums and Staff on Ethics in an Everyday Business

Your judgment and wisdom are woven into your thinking throughout life, and certainly within your career as you impact others – or so instructs Christopher Pelley in his address to students, faculty, alumni, and staff at the University of Oxford in Oxford, England on March 24th. Chris, founder, CEO and Managing Director of Capital Investment Management, was invited to speak as part of the Oxford Ethica Think Tank, a lecture series that precedes the Skoll World Forum held annually in Oxford.

In his opening address, Chris will offer thoughts on the impact of ethics on business from the perspective of “every man” in small business. Chris points out that small businesses in the United States create over 75 percent of the jobs and 50 percent of GDP. Of the top 1 percent of income earners in the USA, 75 percent are small business owners that pay 40 percent of the income tax in the United States. 

Says Chris, “Business entrepreneurship makes all the difference to a society in terms of prosperity, sustainability and hope for anyone within that culture, community, or a given family.   We are all in some manner dependent upon the survival and prosperity of small/middle market companies.” He adds, “A business will not thrive, let alone prosper, without a moral and ethical underpinning, without a culture where honesty is a fundamental aspect of commerce; in fact, business will flounder without it. But all business can grow in an environment of trust and honesty.”
 
Chris is a regular participant in the Skoll World Forum, which attracts nearly 800 delegates from more than 60 countries each year for the premier gathering of the world’s leading social entrepreneurs. As a member of the Ashoka Support Network (the global association of the world’s leading social entrepreneurs), Pelley promotes social entrepreneurship in Denver and this region.

Following Pelley’s address, Dr. Buie Seawell, Chair and Clinical Professor from the Daniels college of Business, Business Ethics & Legal Studies, University of Denver; and Bipin Agarwal, a prominent Denver businessman from India will speak on related issues. Peter Kellner, co-founder of Endeavor, and the World Economic Forum’s “Young Global Leader 2009,” will also address the Ethica Think Tank. In December of this year, Mr. Kellner will be the keynote for Denver’s 3rd Annual Social Enterprise Event, and ACG’s December lunch program, both organized by Christopher Pelley.

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Workplace flexibility — a low cost benefit with high returns

By Kathleen Quinn Votaw

Flexible work options like telecommuting increase loyalty, boost morale, enhance productivity, and minimize turnover — often with very little investment. More companies need to see the light.

Most of today’s workers are looking for flexibility and better work/life balance. The best 21st Century companies are focusing on the needs of individual employees – and adding creative work alternatives that translate into big wins for everyone involved.

In addition to work/life challenges like child care and elder care issues that employees deal with all the time, these days challenges may include a spouse who loses a job, lost savings or other economy-related issues. It’s hard for anyone to totally put weighty problems like these out of their mind. People don’t live their work life and then switch to their home life. They live life.

Engaged employees bring both their heads and hearts to work. Good companies wouldn’t want it any other way. They recognize that employees can’t be expected to check their lives at the door and that there are numerous ways to offer the flexibility employees need to balance their lives.

How much does flexibility pay?

Almost 60 percent of U.S. workers say they would like to have remote work options, but only 18 percent of them currently do, according to HR guru John Sullivan. In my experience, the reason is that old-style thinking gets in the way: employers simply don’t trust that employees will really work if they are out of sight. The facts tell a different story.

In his June 2008 workforce.com article, “Time to Telecommute,” Dr. Sullivan provides evidence that telecommuting and remote workplaces are proving very successful. For example:

• Telecommuters are often more productive than office-bound employees doing the same work. Cisco Systems, for one, estimates a 25 percent increase in work productivity among telecommuters.
• Best Buy corporate office employees can choose when and where they work (as long as they achieve negotiated results). Early outcomes from this new program show increases in productivity as high as 35 percent.
• Cisco Systems, Sun Microsystems and IBM report saving millions of dollars on real estate costs (because they don’t have to supply office space to telecommuters).
• Deloitte estimates a $40 million savings in reduced employee turnover costs.
• Google finds that it can hire higher-quality talent by taking the work to the talent.

Franklin Becker, director of International Workplace Studies at Cornell University, finds that “virtual office workers are 10 to 20 percent more productive than they would be in permanent offices.“ Numerous studies support Mr. Becker’s numbers.

Finally, consider this: Fortune reports that 84 of the “100 Best Companies to Work For” allow employees to telecommute or work from home at least 20 percent of the time, and many offer a number of other work/life balance programs such as job sharing and compressed workweeks. Offering flexible options positively impacts attraction and retention, which continue to be top priorities of organizations of every size — and they are rarely issues at the 100 best companies.

 Match flex strategies to your culture

Forget about the most exotic flexible work options — like fully-paid sabbaticals and earth-tone furnished meditation rooms….There are numerous, economical flex strategies to choose from and no end to your own innovation in creating new ones. Begin with a business problem that a flex-option solution can logically resolve. Then choose or develop programs that fit within your company culture and the specific needs of your employees.

For example, if your employees have long commutes it can impact morale and productivity, which is a business problem – and an issue for employees. Telecommuting can save on gas and gain precious time for employees to spend with family and friends or pursue personal interests. Working from home or at remote offices close to home can increase productivity and morale. Everyone wins.

Another example is B2E, “business-2-employee,” portals described in the December, 2007 Fast Company article, “Portals for the People.” B2E not only allows employees to spend time on their personal business at work, companies like Motorola provide Intranet portals that enable them to do it. Employees get their stock quotes, make their travel plans, buy from amazon.com or do whatever they need to do quickly and efficiently. Employees can then be more productive at work as they focus on their jobs. On the premise that employees do spend work time on personal business, allowing them to get it done out in the open, without fear, can be a solution.

Here are other common, and less common, strategies for flexibility:

• Four-by-ten hour weeks
• Job sharing
• Flex-scheduling to accommodate doctors appointments, school visits and other personal business
• Family and emergency leave
• Part-time work during certain times of the year (e.g., summers when school is out)
• Free on-campus lunches (to save time)
• On-site childcare
• On-site wellness and fitness programs
• Massage
• Dry cleaning and grocery delivery or postal services
• Carpooling arrangements
• Increased vacation and holiday time

Tips for successful implementation

There are a number of things you can do to ensure successful introduction of flexible work options into your business. There are obvious considerations, like the fact that certain positions aren’t suitable for alternative work arrangements because they would disturb work or customer relationships. And, some personalities aren’t suited for them either. By defining sensible criteria for both positions and people, you can distinguish those that are good matches for flexible options. Here are additional tips:

• To win over skeptics, shift thinking and measurements from “being here” to “what was done.” Look for deliverables based on things like goals that are met.
• Invest in technologies that support collaboration independent of where a worker is located: laptops, cell phones, PDAs, conference phone lines, wikis, online forums, and other Web-based meeting platforms that connect people.
• Make sure managers understand what an employee’s underlying hopes are for a flexible plan: Increase productivity? More family time? Time to pursue passions outside of work? Reduce commute time? Reduce overall stress? If it doesn’t work out for the employee, there should be the option to go back to the way it was before, with no judgment.
• Set expectations about accountability, objectives, when employees need to be reachable, and other factors that will help measure success.
• Make a strong commitment to communication. Regular communication between flex-employees and their managers is critical; and communication with teams and customers should be easy and seamless. It is also important to get feedback on how things are going from both company and flex-employee perspectives, through regular satisfaction surveys and one-on-one conversations. 

When employers show understanding and respect for their employees by meeting their needs for flexibility and work/life balance, they are rewarded with greater loyalty and productivity and a workforce that naturally tends to go the extra mile. And that’s the way life should be.

Kathleen Quinn Votaw is founder and CEO of TalenTrust, a Denver-based recruitment solutions firm that works with companies to acquire key talent for accelerated growth. Kathleen is also on the board of ACG. Reach Kathleen at kvotaw@talentrust.com or 303-838-3334.

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Don’t make six common mistakes in a recession

These times identify the best leaders

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By Kent McSparran

Many business owners can be good leaders in an up market, but it takes challenging times to identify the great ones.

The most important reality to accept is that a down market cycle plays opposite to your most valuable instinct: optimism. Optimism is what makes most business owners successful. When others see risk and ruin, you see opportunity. Indeed, fortunes can be made in trying times, provided you avoid the following common mistakes.

1) Failing to face reality. Optimism is a core trait of most successful entrepreneurs, but taken too far, optimism can become a weakness. Pay attention to the facts of your specific market. The facts are unique to every business, so forget the national economic news and conduct a fact-based assessment of what is really happening in your market. Reality might suggest your business will not meet your normal growth expectations. It’s been a long time since we’ve seen an overall economy like this one, so buffer your normal optimism and stick to the facts.

2) Trying to sell through it.  The second common mistake is to trying to sell-through a down market. Some owners will stubbornly refuse to accept anything less than the pre-determined growth goal, so they put a full court press their sales team with unachievable goals.  When you’re worried about shrinking revenue, it feels counter-intuitive to cut selling expenses but, if you’re not cutting sales expense in the face of a shrinking market, you are simply increasing the cost of an average sale.

Three years ago, we met a distributor to the home building industry who saw all the signs of a declining market. Yet he refused to accept this reality and put incredible pressure on his sales team to grow share in the face of a shrinking market. After eight boom years, it was too hard for him to acknowledge that he had to trim. Because he refused to reduce his selling expenses, he lost over a million dollars in the first six months of the downturn. 

3) Delayed cost-cutting. Cash is mandatory in a down market because profits are tougher to come by. Our distributor crippled himself by his stubborn refusal to make the tough decisions early. The million dollar loss ate up valuable cash that could have seen him through the down market.  Making the tough decisions early in the down cycle puts you in a stronger position for the rebound.  Keep your powder dry for the recovery.

A strong balance sheet – particularly cash - translates rebound resources. A weak balance sheet will send you into the first two years of a recovery trying to rebuild your financial health.

4) Decision freeze.  In this particular recession we have seen an unusual level of fear and panic. With the overwhelming negative national news, we’re seeing some business operators simply frozen by the uncertainty. It’s very possible you could be missing an opportunity for breakthrough success, because the gloomy headlines can cause decision paralysis.

We can’t control the market but we can change how we react to it. A successful business must always remain proactive.

5) Failure to plan.  A common misconception about business planning is that it requires predicting the future. In the past few weeks three different clients told us they have not completed a budget for 2009, because they can’t predict revenue this year. I explained that budgeting is more about planning your actions and resources than it is about predicting the market. If necessary, make three budgets (best, worst and likely cases) and then be prepared to quickly adjust your costs to the worst case budget.

Planning is allocating your limited resources to maximize results. Planning is about action — what action are we planning to take?

6) Failure to lead. Great leaders know when to light a fire under the troops and when to calm them down. No matter how panicked you feel inside, today is the time to lead with steadiness and a calming attitude. When employees work in fear, productivity suffers. You need your best people to feel secure and stay focused on their work.

Organizations that stay fact-based, pro-active and steady will do well in this market. Strong leaders will distinguish themselves by their success.

Kent McSparran is a principal with EKS&H Business Consulting, providing management consulting services in the areas of business strategy and financial performance improvement.  He can be reached at 303.740.9400 or at kmcsparran@eksh.com.

 

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Networking is a valuable labor for executives

By Kathleen Quinn Votaw

 

Recently, a COO who had been out of work for a while told me he would never again be without a personal network. Unfortunately, this COO is not alone. Too many executives fail to make time in their schedules to connect with people outside their immediate focus, resulting in too few options when they suddenly find themselves looking for a new job. The best time to start building a network is before you actually need one.

Executives who have taken the time to establish relationships and trust with a diverse network of people find it easier to move to the next step, whether it’s finding a job, founding a company or looking for something meaningful to do after retirement. Executive networking pays off in two important ways: making the process of doing business easier and more profitable; and enhancing personal growth and opportunities. Networking is an investment in both business and personal net worth — and a valuable way to spend executive time.

Networking for business growth and innovation

Networking is a way to find the people who have or can get what you want — or never knew you needed. It gives you exposure to a wide variety of contacts that can lead to sales and early information about opportunities to grow, possibly into areas you’ve never before considered.

Networking can also lead to innovation. When you open discussions with people outside your industry or expertise you tap into new ideas to save costs or enhance products and services, operations and other aspects of your business. Putting yourself in a position to share experiences with people outside your normal circle can only lead to positive outcomes: confirming you’re doing the right thing, keeping you from doing the wrong thing, or trying something entirely new.

And there’s another advantage for your business. When executives from your company are visible and active in the community, you enhance your brand and your reputation.

Extending your network on a personal level

If executives spend time networking at all, it is typically for business reasons. The arguments for developing a personal network are equally compelling. The most obvious is to create a base for a job search. When you know a broad and diverse network of people you have connections to inside information about jobs that may not yet be in the market and to people who are hiring or know people who are. People who know you and understand your skills can move quickly to make referrals and offer valuable advice. There are similar benefits to gain if you’re starting your own business. Your personal network can help you find the financing, top talent and other resources you need for an early success.

Personal networking also opens up a world outside your business. The 60- to 80-hour work weeks usually required of C-levels often preclude time for personal growth. If both mind and soul are buried in business for an extended period of time you miss out on a wealth of knowledge and creativity that can enrich your life and your opportunities.

Networking Basics

Networking is about connecting, but it’s also about reciprocating. It begins with the simple act of getting a referral from someone or giving one. It is based on a relationship of trust between two people and grows from there.

Although networking can be as casual as opening conversations with people wherever you happen to be and keeping track of those that seem most interesting, it is most beneficial when you have a conscious and active plan to expand your relationships.

For executives, this plan could include attending conferences and seminars outside your industry, participating in executive Internet e-lists and associations, and joining community organizations or serving on boards. Keeping a log of networking meetings and calls makes it easy to follow up when the need arises. When meeting people you are particularly impressed with, make it clear that you are open to helping them with referrals and advice.

Networking doesn’t have to add much time to already full executive schedules. When you make a conscious effort to get out of the office and talk with people a few hours a month, the benefits to your business will soon become apparent. And if you should lose your job, well, you’ll never be without a personal network again.

Kathleen Quinn Votaw is founder and CEO of TalenTrust, a Denver-based recruitment solutions firm that works with companies to acquire key talent for accelerated growth. Kathleen is also on the board of ACG. Reach Kathleen at kvotaw@talentrust.com or 303-838-3334.

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Blood processing giant talks about private equity owners and recession

By Keith DuBay

David Perez leads a corporation of 2,500 employees worldwide out of the former Lakewood headquarters of what was Cobe Labs. Under new ownership, including two private equity firms, the company was renamed CaridianBCT and is a global provider of products and services in automated blood collections, therapeutic systems, whole blood processes and pathogen reduction technologies.

In his talk to the gathered assembly at January’s ACG meeting Perez explored “Tides of Change: Thriving in an Economic Downshift and How Long-term Vision Creates Immediate Value.”

Much of Perez’ presentation concerned high tech medical issues and developments; how the company expects to achieve 60 percent of its sales from non-U.S. countries; and how CaridianBCT is spinning its blood processing technology into new uses, such as scrubbing parasites and other heebie-jeebies from collected blood.

Perez offered some nuggets at end of his presentation, such as:

CaridianBCT is indeed going to be impacted by the recession. Patients are foregoing surgeries and blood banks are experiencing a “bubble” heretofore unheard of. It could lead to less demand of CaridianBCT’s blood machines. Also, major customer The Red Cross is cutting back on all fronts.
 
Some customers are electing to pay employees rather than vendors such as CaridianBCT, so money is getting tighter.
 
Key highly-regulated suppliers are facing bankruptcy because of the overall downturn, which could affect CaridianBCT’s ability to manufacture.

Perez also gave insight into what it’s like to work for a private equity owner. One day he received an email from his new bosses that he was to improve cash flow by $150 million and he had a week to prepare a plan. Good day. “Working in private equity is unrelenting pressure,” Perez said. “There’s never enough and it’s never fast enough. But they appreciate our culture of taking care of patients.” 

He attends six board meetings a year and enjoys heavy interaction with ownership, which he said exhibits an “insatiable appetite” for information. Private equity groups focus heavily on the cash flow statement, wanting management to continuously invent ways to improve cash flow, even if it means spending $50 million a year on research and development.

Keith DuBay is a former journalist, ACG member and partner with a new media content and branding firm, BlueCoast Media Group. He can be reached at keith@bluecoastmediagoup.com.

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You should have been there

December Luncheon Keynote: Jeff Thredgold, economist and author

In his second annual ACG presentation, Jeff Thredgold provided ACG members with a broad U.S. forecast for 2009 as well as a Colorado-focused outlook. Following are highlights of his presentation:

  • The current recession, which compares to that of 1980-81, will last 18 to 20 months and losses will total $1.5 trillion. This is the “panic of 2008.”
  • The current quarter will be the worst, representing the weakest quarter of the last 25 years. First quarter 2009 will be ugly, but not as bad as the one we’re going through now.
  • The second half of 2009 will be more favorable, with housing stabilized by the middle of the year.
  • The media caused the housing debacle to worsen with negative stories and headlines about the bad things to come.
  • Every ten years we have a downturn of sorts. These times are scary but fascinating.
  • Obama is bringing bright minds together and “we will get through this.”
  • The unemployment rate could reach 8 percent by late next year. It’s currently at 6.5 percent. These numbers will be less painful by mid 2009.
  • In 1980, the average college graduate earned 25 percent more than the average high school graduate. Today, college grads earn 90 percent more. Tell your kids to go to college! Only 2 percent of the U.S. population currently graduates from college.
  • “Flation” is a combination of deflation, inflation and disflation. No one can agree on what, exactly, is happening, but the combination, which Thredgold calls “flation” will mean a worldwide recession. We are either in it now or will be soon. Productivity gains will help keep inflation under control. Americans, in particular, are more productive every year.
  • Worldwide competition will intensify over the next few years.
  • The Fed has never set interest rates below 1 percent. Thredgold, as well as many other economists, predict that the Fed will lower interest rates to half a percent by December 16th. This is one of many strategies the Fed will use to deal with the unchartered waters we are in.
  • Mortgage rates are headed down.
  • This is the first time that the U.S., Europe, and Japan have been in recession at the same time since W.W. II.
  • There are seven major growth industries for the future: technology, transportation, telecommunications, financial services, energy, entertainment, and biomedicine.
  • Three other industries are guaranteed to grow: healthcare, financial planning, and leisure.
  • The $700 billion bailout should have been called an “economic stabilization program;” it would have been passed earlier. The $700 billion is an investment.
  • It’s okay to give $25 billion to automakers in exchange for concessions at the top and from labor. Obama will do something for both.

Colorado projections:

  • Three to four years ago Colorado was moving along at about 2 percent growth, not as well as others in the West. All the other Western states are in recession now and Colorado is just slowing down. Colorado didn’t have a boom and now will not have to make the big adjustments others do.
  • Employment is better in Colorado than in most of the rest of the country. We have more skilled people available.
  • Colorado may see a recession by mid next year, but probably not.

Thredgold has a long-term positive outlook for the U.S. economy, partially because of our tight labor, which will help improve the market. Free enterprise is not perfect, but it works.

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Use a scalpel, not a hammer

Hiring and retaining talent in a tough economy

In any economic crisis, a cool head and long-term outlook produce the best result, and that holds true when it comes to talent management. Contrary to what you might think, you should continue to hire top talent in all economic conditions, and to do everything you can to retain the talent you have.

The typical corporate reaction to a weak economy is layoffs and freezes on hiring, raises and promotions. Most companies take these measures under the illusion that the cuts will rein in costs, and in the short term, they may. But over the long term, freezes on recruiting and talent management often end up costing more than the initial savings. Here’s why:

  • Freezes and cuts (including incentive pay) in revenue-generating or revenue-impacting positions can significantly limit growth during a crisis and long afterward.
  • Inevitable increases in employee burnout and turnover reduce productivity, increase costs and can affect customer relationships.
  • Freezes mean lost opportunities to hire available superstars who can increase future innovation and performance.
  • Innovation stagnates with the loss of technical staff and incentives.
  • As morale drops, the competition can recruit your best people away, while low performers stay on, reducing productivity.
  • With the ongoing war for talent, replacing downsized employees may take a long time and the qualities superstars bring to a company may never be fully replaced.
  • Your brand as a good company to work for can be damaged, limiting your ability to hire and retain in the future.

Companies that realize that people are the only true sustainable competitive advantage see their talent as an investment, not as a way to reduce expenses. In hard economic times, these companies seek a balance between talent-management strategies and long-term business objectives.

Many well meaning companies mandate across-the-board measures in the interest of fairness. This is laudable, but not smart in many cases. To paraphrase Charles Scott, a partner at global HR consulting firm Mercer, “It’s a mistake to use a broad brush or blunt instrument when you need a surgical tool.“

Decisions about across-the-board layoffs and freezes should be made only after careful consideration of how they will affect the company’s overall position when better economic times are restored — which, over the past 60 years, is within 11 to 18 months on average, according to Mercer.

There are a number of things to consider that will help you avoid making drastic talent-related cuts and freezes that can harm your company over the long term. Following are some suggestions; be creative in determining what works best for your situation.

  • Look at overall budget dollars and how they relate to revenues rather than focusing on talent alone.
  • Ask employees what they value most in these hard economic times. Some might not mind taking a pay cut in exchange for the opportunity to telecommute or job share.
  • Take advantage of the difficult job market to hire superstars you couldn’t afford before.
  • Offer employees short-term incentives for cost-saving ideas.
  • Consider transferring certain employees to different locations rather than lay them off.
  • Reallocate incentive pay to reward your highest performing and highest potential employees.
  • Switch some people from employee to contract work as a temporary measure, retaining your relationships and knowledge base as well as maintaining morale.
  • If broad-brush layoffs and freezes are necessary, consider exempting your most profitable, innovative or rapid-growth divisions.

In evaluating your options in today’s market and in future tough times, it’s important to remember that global competition and our aging population do not change with the economy. There is always need for top talent in every economic circumstance, and the pressure to attract and retain top talent is going up, not down.

Before you take drastic measures that may harm your company over the long term, use a scalpel rather than a hammer to manage your talent strategically.You’ll thrive when times are better while your competition is busy recovering.

Kathleen Quinn Votaw is founder and CEO of TalenTrust, a Denver-based recruitment solutions firm that works with companies to acquire key talent for accelerated growth. Kathleen is also on the board of ACG. Reach Kathleen at kvotaw@talentrust.com or 303-838-3334.

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Recruiting the Michael Jordan of sales

Strong sales team means a strong business…in any economy

Great recruiting practices help ensure success, regardless of economic conditions. Nowhere are they more important than in developing a top-performing sales team that builds your bottom line whether bull, bear or flat markets prevail.

Consider this: companies with excellent recruiting functions increase their total market value from 5.4 percent to 14.6 percent, according to a 2003 study by Watson Wyatt. You can bet a strong sales team will bring you to the higher end of those values.

Everyone wants to hire the Michael Jordan of sales. But people with exceptional talent - the top 20 percent that produce 80 percent of the sales - usually have great jobs already. It takes an effective recruiting process to develop a top sales team, backed by a positive employer brand. And it begins with a hard look inside the company.

Evaluate your current team
Is your sales team capable of propelling projected growth? How many A, B and C players do you have? Are the A players so well compensated and happy the competition can’t touch them? What’s holding the B players back - do they need additional training?

Why do you even have C players on your team? Instead of treating all of your sales people the same, put your resources into the ones that make the most difference, and replace your C players altogether. Check with your human resources department to see if there are potential star sales players hidden in other departments.

Measure performance
In evaluating your current team, measure performance in two ways. The traditional way to measure sales productivity is the dollar amount of sales per salesperson. This is calculated by dividing the volume of sales by the number of salespeople, which gives you an average sales productivity figure. By comparing each individual salesperson with the average, you’ll quickly see who your top performers are in terms of dollars.

But don’t stop there. Also evaluate your team on how much they cost you by irritating customers with poor service, making undeliverable promises, selling less profitable products, generating too many returns, or burdening other departments with demands or errors.

Assess your culture
Since most top performers already have a job, your employer brand has to wow them into considering a move to your company. What is your culture really like? Are management practices and benefits exciting enough to make a top performer want to join? Do you give salespeople what they truly want in terms of money, recognition, education and opportunity for advancement?

You have to offer extraordinary things if you want to be an employer of choice.

Top performers have high expectations for the kind of company they want to work for. What makes your company a superior place to work? You may need to make some adjustments to both benefits and culture in order to attract and retain anyone even close to a Michael Jordan.

Recruit top salespeople
Keep in mind that your sales team is not only responsible for building your bottom line. They are also your company’s primary face to customers. It is critical that they have the attitude, knowledge, skills and style to represent you in the way you want.

First, understand exactly what you need in a salesperson. Imagine the ideal person for the job, including their personality and energy as well as their experience and capabilities. Do you want this person to generate immediate sales or develop contacts for a sales cycle over some period of time?

Should he or she to take a consultative approach to selling or focus on closing? Will the primary responsibility be pursuing new business or expanding existing customer relationships? Is this a team selling environment or do you have a group of lone rangers? What sort of interaction with internal teams will be required?

The chosen candidate should match your sales needs and selling culture and be as close to your ideal as possible.

Second, describe all of the above clearly and in detail to the candidate, along with the compensation package.

One of the main causes of dissatisfaction and turnover in sales is misunderstanding over compensation packages. Be precise in explaining your compensation plan and clarifying territories. Clearly state performance expectations, the training program and the sales tools you will provide. You should also describe the market and competition so that sales candidates have as complete a picture as possible. This will help avoid hiring mistakes.

Effective sales recruitment drives growth
If you have the recruiting strategies and culture in place to attract top performers, there is no reason why you can’t attract all the talent you need. You may not want to stop with a single star.

Think how valuable a team of stars would be. After all, the more top salespeople you have the more sales you will generate. By adding high-performing salespeople and improving your sales team you’ll grow your company in any economic condition.

Kathleen Quinn Votaw is founder and CEO of TalenTrust, a Denver-based recruitment solutions firm that works with companies to acquire key talent for accelerated growth. Kathleen is also on the board of ACG. Reach Kathleen at kvotaw@talentrust.com or 303-838-3334.

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Bridging the boomer gap: Older workers are competitive advantage, not risk

By Kathleen Quinn Votaw

Boomers are a valuable workforce segment with a desire to work. They are the best educated and most skilled workforce in U.S. history.

Employment pioneers already realize that the “new retirement” is here. Don’t wait until key people shortages hit your bottom line to act. Be proactive and become one of the first to stop seeing older workers as a risk and start viewing them as a competitive advantage.

The boomer brain drain threatens to ripple through our economy. The nation’s overall economic growth may actually slow, according to the Federal Reserve. As reported in the Dallas Morning News in April, labor analysts predict shortages of six million workers by 2012 and 35 million workers by 2030.

Employers can stay ahead of the pack by taking steps to bridge that gap now.

What are your boomer recruitment and retention strategies? They should begin with an analysis of your assumptions about the mature workforce, followed by a strategic assessment of boomers in your company and a specific plan to attract and retain them.

Boomer fallacies and attributes
By choice or necessity most boomers expect to work at least part time until age 70 or after, according to Merrill Lynch’s 2006 New Retirement Study. Attorneys who retire from 80-hour work weeks to sell fishing rods part time and corporate CEOs who become social entrepreneurs are not unusual these days.

Boomers want to stay active and stimulated, and many want to give something back to society. Smart companies will make an effort to attract these people, and the first step is often getting beyond assumptions and prejudices that boomers are:

  • Too expensive with high salary requirements.
  • Overqualified.
  • Not technologically as astute as younger workers.
  • More likely to use health retirement benefits.

Companies need to think more about what boomers offer than what they may not offer. Typical boomer characteristics include:

  • Dedication to their job.
  • Maturity in their perspective.
  • Highly educated.
  • Loyal; they don’t “job hop” or look for other opportunities.
  • Years of on-the-job experience that can trickle down to younger workers.
  • Appreciation for the value of a good employer.

Six questions that inform strategy

  1. How many people in your company are eligible to retire in the next few years? All of them won’t, but you should find out how many plan to retire when they are eligible.
  2. How many senior managers and technicians are in the retirement group? Do you have a succession plan for these groups? Find a way to capture their mission-critical knowledge, and find out what it would take for them to stay with you longer.
  3. How many first-line supervisors plan to retire? They have significant impact on both morale and productivity. Make sure you have qualified, trained people to replace them.
  4. What HR practices are in place to modify recruiting, training, retention and succession planning related to retiring boomers?
  5. What modifications do you need to make to equipment or processes to accommodate older workers?
  6. How does your corporate culture view and treat older workers — as people with one foot out the door or as contributing employees?

Boomer retention strategies
Wages and health benefits are the two main reasons boomers continue to work into traditional retirement years. Additionally, many boomers find that they want or need the challenge and stimulation offered by a work environment, but with less stress.

Employers, on the other hand, have a growing need for the knowledge and skills of older workers. With creative retention strategies, you can create a winning situation for both boomers and your organization.

Retention strategies can include:

  • Extended health insurance and retirement benefits for part-time workers.
  • A health plan to cover gaps in Medicare.
  • Job skills training, especially for those who want a new career.
  • Flexible schedules, which may include the ability to cycle between periods of work and leisure.
  • Small salary increases to workers who give a year’s notice before retiring from key positions.
  • Telecommuting.
  • Coaching and mentoring to capture and pass on knowledge.
  • Technology training.
  • Informative retirement seminars for older employees and spouses.
  • Fitness plans that reimburse for gym costs and alternatives to health clubs like home equipment.
  • On-site health tests and fitness programs.
  • Time off for volunteer work and family.

The best way to determine which of these and other strategies works best for boomers and your organization is to establish a change committee that includes boomers.

Become an early adopter of the “new retirement”
We’ve all heard the tiresome statistics on how the majority of companies haven’t thought much about the fact that Generation X is only three-fourths the size of the boomer generation. The reality is that most boomers won’t be able to retire or won’t want to. Become an early adopter of the “new retirement” and find a way to bridge the gap in a more meaningful way than your competitors.

Kathleen Quinn Votaw is founder and CEO of TalenTrust, a Denver-based recruitment solutions firm that works with companies to acquire key talent for accelerated growth. Kathleen is also on the board of ACG. Reach Kathleen at kvotaw@talentrust.com or 303-838-3334.

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ACG Member of the Year: Christopher Pelley

‘You Need to Show Up and Be Patient’

Chris Pelley walks his talk. He showed up at ACG five years ago and has consistently, and patiently, raised more sponsorship money than any of ACG’s 11,000+ members worldwide. For his efforts he was recently named ACG Member of the Year. He was also instrumental in achieving ACG-Denver’s award for 2006 Chapter of the Year, although Chris is quick to point out that all accomplishments are a team effort.

Three Passions and Time
Chris devotes seemingly endless passion – and time – to what is important to him. In addition to raising sponsorship funds for ACG-Denver, he serves as Managing Director of Capital Investment Management (CIMCO), the independent financial advisory firm that he founded. He is also committed to promoting social entrepreneurship (using entrepreneurial principles to organize, create, and manage a venture to make social change). Rising before dawn to fit in his exercise routine, Chris is often still sending e-mails late into the night.

Capital Investment Management
Chris founded CIMCO as a result of his almost three decades of experience working as an investment advisor in London, New York, and Denver. With a talented team of recognized independent experts in law, tax, banking and other proficiencies, CIMCO embraces the Japanese proverb: “None of us are as smart as all of us.” The firm serves clients nationwide and in Europe in a process “to invest your time before you invest your money.” They are prepared to ask, listen, understand, and advise in order to pursue real investment solutions for their clients.

Social Entrepreneurship
In helping CIMCO clients make decisions about their personal transitions (and in raising two daughters of his own) Chris learned that people’s legacy, children, and charity are important and significant. He decided four years ago that he could either work at improving his golf game or do something meaningful. That something meaningful quickly became social entrepreneurship and being the Paul Revere of a new, big idea: serving as change agent for society, seizing opportunities others miss and improving systems, inventing new approaches, and creating solutions to change society for the better.

Passion Meets Synergy
After attending the Skoll World Forum on Social Entrepreneurship in Oxford, England the past few years (and taking his daughters), Chris saw a synergy between his clients’ need to give away not just their money, but their talents, and the concept of social entrepreneurship. He now introduces his clients to this rewarding way to leave a legacy. And, never one to think small, he has partnered with Ashoka, the global association of the world’s leading social entrepreneurs, and DU to make Denver a leader in the movement.

Now, how to involve ACG to make the circle complete….

At the November ACG lunch program, ACG members will have the opportunity to experience Chris’ passions firsthand as he brings leading Ashoka fellows, DU educators, social entrepreneurs, and the business community together to understand, and prosper from, a new and meaningful idea.

Congratulations to Chris on his award as ACG member of the year! And our thanks for his time and passion for ACG.

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