Funny, But True: Having a Blast

Well, at least some people thought it was funny. I didn’t happen to be one of them.

I was in a staff meeting of a steel company where I was the chief restructuring officer. The company was not doing well for multiple reasons and was facing a huge cash crisis.

We had decided our only option at this point was to reduce the 2,500-person workforce by at least 10 percent to keep the company competitive, a tragic outcome for those 250 workers and their families. We were also going to have to reduce union employee benefits, which we had discussed the day before with the union representative.

All of a sudden, I hear BAM! BAM! BAM! BAM! In shock, I quickly hit the floor, only to find I was the only one there. When I got back up, the other senior staff at the table were laughing at me.

I was right to duck – those were shotgun blasts that smashed into the windows. But none of them made it through the bulletproof windows the company had installed 20 years previously. It seems shotgun blasts were a frequent means of expression for unhappy union members.

So here’s some free advice. If your workers are routinely so unhappy they are shooting at senior staff, rather than spending money installing bulletproof windows, spend time thinking about rethink how you are managing the company.

My book, How Not to Hire a Guy Like Me: Lessons Learned from CEO’s Mistakes, is now available as an ebook.

How to Develop Loyal Employees

This is part two of a two-part series on the importance of developing and maintaining loyal employees. In part one, we explored why every company should focus on having loyal employees and how doing so contributes to its revenue. Part two offers tips of how to develop loyal employees.

When it comes to developing loyal employees, it’s not all about money. Often, senior management thinks that all it takes is a bigger paycheck to keep talented employees around. They often rely on the golden handcuffs, making it difficult for well-compensated employees to leave. But think about that for a second — they may stay, but do you really want your employees to feel like they are hostages? What do hostages do at the first possible opportunity? They flee!

So how do you develop loyal employees, the kind that wants to stick around and not just for a bigger paycheck? Here are just a few tips to get your business on its way.

1. The top way you inspire loyalty in your employees is through reciprocation. Be loyal to them. Let your employees know they are important to you. Treat them like they are humans and that you care about them. Ways to do this include rewarding good work and praising their efforts. As they say in parenting circles to encourage good behavior for children, “Catch them doing good.” Rather than only alerting employees for unsatisfactory performance, find something positive they have done and mention it. Another way is being flexible when their personal lives need attention. Don’t enforce rigid time-off policies. If your boss refused to give you a day off when your wife is in the hospital, how would you feel about that company?

2. Create a challenging but supportive environment that treats employees fairly. Remember the saying that “Employees don’t leave their job, they leave their manager.” If employees do not feel challenged and supported in their efforts, they feel unappreciated. Employees who feel unappreciated rarely stick around. As do employees who feel they’ve been treated unfairly. If you really want employees to resent the company, treat some better than others. Support your employees by providing job training, growth opportunities and asking about their career goals.

3. Get rid of the disloyal, negative employees. No matter how you treat them, some employees will always complain and seem to revel in negativity. That kind of behavior can bring down co-workers and can create a negativity vortex, sucking in other people in the office. Get rid of those people. You don’t need that negativity and they will never become loyal employees. Moods are contagious and if you have too many people who thrive on negativity, your office will become a toxic environment as well.

4. Have transparent and open communication with your employees. Employees hate to be left in the dark. Share the big picture with them. Get buy-in for the goals for your company. Build a team where everyone, no matter what the level, is invested in the success of your business. This can take various forms, from company-wide meetings, to newsletters, to daily stand-up meetings by department.

Share the victories with them. Emulate The Ritz-Carlton, where employees of every department in every hotel in the world gather every day for 15 minutes to share “wow stories.” These are tales of people who went above and beyond for customers.

These stories motivate employees, bond them in the goal of providing excellent service, and recognize those employees that provided it.

In my experience, the majority of people really do want to feel part of a team and like to be loyal to their companies. Don’t make it hard for them to do so.

Tips for Dealing with Office Gossip

This is the second in a series on office gossip. In my last column, I wrote about how harmful office gossip can be to your business. This column focuses on how you can deal with it.

Office gossip can be harmful to your business and to the reputations of your managers and employees. It can cost you money in lost productivity and turnover when employees who don’t like the negative environment leave.

Here are a few tips on how to deal with it so your business can be a healthy, happy and productive place to work.

Set the standard

This is so important that I devoted a section of my book, “How Not to Hire a Guy Like Me: Lessons Learned from CEOs’ Mistakes” to it. As the head of a company, you must lead by example. It doesn’t matter whether you want your employees to emulate your behavior — they will.

Don’t talk about negative rumors about your competition or any of your vendors. If you hear others spreading rumors, request that they refrain from doing so.

Avoid the all-employee approach

Sending an email to all the employees or announcing at an all-company meeting demanding that office gossip stop will not work. The ones who are spreading the gossip will continue to do so, and those who are not engaging will wonder what they are missing, and may even start to gossip so they can catch up.

If you can determine the source of negative gossip, meet with those individuals one-on-one to explain the repercussions of their behavior and that further gossip will not be tolerated.

Create an environment of open communication and trust

This is my number 1 tip for stopping negative office gossip. If you create an open environment where employees trust the management and feel free to communicate with their supervisors, there is no reason to spread gossip.

You’ve probably heard the term “the mushroom treatment.” It’s when employees feel like they are kept in the dark, fed a lot of manure and when they are big enough, they are canned.

Although that term originated more than 40 years ago, many companies still operate this way. When I am brought in to run a company, one of the first things I do is talk to employees at all levels to get their opinions on what is happening and what needs to be done. More often than not, when a company is in dire straits, the employees are not getting the real story. They are being kept in the dark.

Guess what happens when employees know a company is struggling but no one is telling them the truth? They begin to manufacture their own perception of the truth from what little is being shared. That’s how the office gossip train is fueled. The less they know, the more they talk. And when your employees are engaged in a rousing game of “What Did You Hear Today?” guess what they are not doing? Their jobs.

When employees are left to play the guessing game, morale and productivity take a dive, putting your company in even more jeopardy.

Generally, when I take over a company, I am walking into a toxic environment of distrust. One of my most important jobs initially is to regain the trust of the employees, and I do that by making honest communication with them a top priority. It may take a while for senior management to regain their trust, but once we do, you’d be surprised what a difference it can make in turning around a company.

Employees gossip because they are kept in the dark and feel powerless. Telling them the truth, no matter how dire it is, can make them feel empowered.

As Will Rogers said, “Rumors travel faster, but it don’t stay put as long as truth.”

How Office Gossip is Hurting Your Business

This is the first of a two-part series on office gossip. Today, I focus on the dangers of office gossip and my next column will share my top tips on how to deal with it.

I’ve talked about my nickname, Monty Hall, because I engage in “Let’s Make a Deal” on a daily basis in my career as a turnaround authority. Sometimes, I also feel like a contestant on the game show “To Tell the Truth.”

When I take over the management of a business and speak with employees at all levels of an organization, I sometimes hear wildly varied stories of situations in the company, which may or may not be true. It becomes my job to separate fact from fiction.

I often determine that a lot of what I’m hearing is not based on reality, but is actually office gossip. If you think that employees hanging around the proverbial water cooler is a harmless break in their day, you may be shocked to learn just how much that chatter is costing you. compiled a list of surprising ways that employees cost companies billions in the workplace. The article cites that “smartphones, time-wasting websites and gossip can cost U.S. companies an estimated $650 billion a year.”

In addition to the time wasted, office gossip is also dangerous to the health of your company in these ways:

It reduces productivity

It’s common sense. If employees are spending their time spreading, listening to and trying to verify gossip, they are not focused on their jobs and are not working.

It undermines morale

If employees hear rumors about trouble with the company, they may start to feel anxious about their jobs. Instead of focusing their attention on excelling at their jobs, they may instead start looking for another one.

It creates a toxic work environment

Gossip can create cliques in the workplace and can be destructive to the teamwork necessary to complete projects, as employees take sides and begin to distrust each other. Employees who don’t want to work in that toxic environment may leave to find a more positive workplace.

Reputations can be destroyed

Let’s say an unfounded rumor started that one of your employees has been missing deadlines on an important project. Managers may be reluctant to work with that employee in the future, damaging her reputation and limiting her career opportunities.

It can cost you customers

It’s happened to me several times. I’m waiting for service at a store or have a meeting at an office and I hear the employees gossiping, apparently oblivious to the fact that I can hear every word. They complain about their long hours or that a fellow employee was taking off early that day. Gossiping employees can make dealing with your business an unpleasant task and people may be tempted to take their business elsewhere.

There is no doubt about it. Office gossip is detrimental to your company and to your employees. Read my next post for my top tips on how you can cut down on the gossip and its destructive effects.



Tips for Handling the Coddled Family Member on the Job

You hired your cousin Peter as the sales manager for your family business. He has not been meeting his quotas, and even worse, doesn’t seem to think it’s important, and the company is suffering. Or you hired your daughter right out of college as Director of Merchandising because you were desperate to fill that position and she needed a job. But she’s far more interested in how the packaging looks than in working with manufacturers and customers.

In my last post, “The Peter Principle at Work in Family Businesses,” I wrote about how the principle that employees tend to rise to the level of their incompetence is often true in family businesses. This often happens because a family member has been coddled at the business. The column included a quiz so you could tell if you are in this situation.

So you took the quiz and may have determined that you do have a family member who has been enabled, and you now understand that situation is damaging to your business. So what do you do about it?

You have three options:

1. Provide training or education

If the family member truly does care about the business and its success and wants to continue in his position, providing additional training so he can perform better could be your solution. Your brother may have been promoted to a management position but has never had to manage people before. Let him know you are interested in helping him grow professionally and part of that involves getting more training.

Ask him to find some classes or seminars he can take to sharpen his skills as a manager. If he truly does want to succeed, he will be happy to take advantage of your investment in his future.

2. Reassign the family member to another more suitable position

Sometimes a family member is just not suited to handle her job responsibilities. In the case of the daughter in the merchandising area, her major was in graphic design and she really has no interest in setting budgets and developing the skills she would need to be successful in merchandising. She is unhappy in her position because she doesn’t have the skills and really has no interest in acquiring them. To keep someone in a position that they have no interest in and can’t handle is a disservice to both the employee and the company.

If you have a design department and could use her help there, then discuss the situation and reassign her. If there is not a position available, you can suggest she go to work for another company to gain valuable experience, then return to yours when you do have a space for her. Make sure to let her know you do have her interests at heart and want her to be happy.

3. Terminate the family member

Sometimes it becomes clear that the family member is just not going to work out, for whatever reason. He isn’t motivated, she doesn’t want to be there in the first place, he is unable to acquire the skills necessary to work in the family business. It’s a tough call, but often it’s the only course to take if the first two options aren’t a possibility.

Firing a family member is a delicate process. You’ll want to consider giving the family member a generous severance, allowing him to save face by “resigning” and possibly funding out placement services so he can find a new position.

For more tips on how to do this, please read my post, “How to Fire Grandma and Still Get Invited to Sunday Dinner.”

It is possible work with family members that have been coddled or enabled and turn them into an asset, rather than a liability for your company. But if that doesn’t work, the best thing for everyone is to terminate them.

The Peter Principle at Work in Family Businesses

Perhaps nowhere is the Peter Principle more prevalent than in a family business. Lawrence J. Peter and Raymond Hull wrote about the principle in their 1969 book “The Peter Principle,” which stated simply is “Employees tend to rise to the level of their incompetence.”

I thought about the Peter Principle when I was reading an article on the Harvard Business Review Blog Network about the effect enabled family members could have on a business. Keeping incompetent or unskilled family members as employees can be devastating to a business and can ultimately cause it to fail.

I’ve seen it so many times. Uncle Joe runs a division of the company because he invested a couple thousand of dollars when the business was formed 20 years ago but he doesn’t have a clue what he’s doing. A couple starts a business and their son takes over and runs it when they retire. But he’d spent most of his time playing golf and traveling, stopping by occasionally to pick up a check and flirt with the women in the sales department. The only thing he knows how to manage is his account at the country club.

Even if they don’t know how to do their present jobs, they sometimes continue to be promoted. And the business suffers.

The authors of the article, Josh Baron and Rob Lachenauer, co-founders of Banyan Family Business Advisors, included a quiz so you can determine whether you are coddling a family member. If you answer yes to four or more of these questions, then you probably are overindulging him or her. Here are their questions:

1. Has a family member worked exclusively in the family’s business?

2. Has he reported within his parent’s span of control for most, or all, of his career?

3. Has she never received 360 feedback on her performance?

4. Is the family member paid above the market-based compensation for his position?

5. Has the family member been promoted beyond his capabilities?

6. Is the family member’s behavior often outside the boundaries of acceptable value-based behavior of the company?

Do these scenarios sound familiar to you? Coddling a family member does no good for anyone. The business suffers if someone is incompetent to handle his or her job. The individual often knows he or she is not performing the job the way it should be done and is ashamed or may be embarrassed. Morale at the company suffers when the other employees witness the family member receiving preferential treatment and not handling their job responsibilities.

In a previous column I gave five tips for successful family businesses. If you have a suspicion you may be coddling a family member, I suggest you pay particular attention to one of these suggestions: Put the right people in the right jobs. I don’t care if Uncle Joe gave you seed money to start a division of your company. If he doesn’t know how to manage a department don’t put him in charge of it. Don’t let the Peter Principle be at work in your family business.

For tips on how to handle the situation of a coddled relative, please read my next post. 

Tips for Handling Office Politics

Office politics. There’s an app for that. In the new iPhone app “Office Master: Backstab,” players work their way up the corporate ladder by backstabbing as many of their co-workers as they can, kind of a cubicle whack-a-mole. “To the people who have suffered and endured in the world of office politics, we dedicate this game to you,” wrote one of the creators. That’s a lot of people.

In my last post I talked about the high cost of office politics, which has been estimated to cost more than $300 billion a year in the U.S. in lost productivity. There are other costs as well, including the difficulty of recruiting and keeping people in a toxic office environment.

Players on the iPhone app Office Master: Backstab work their way up the corporate ladder by stabbing co-workers in the back.

I was chatting with a young woman once who had filled in as communications manager for an arts organization for a few months. She described the situation as a viper’s pit.

There was no one person running the company, weekly meetings were one long complaint session, and the box office computer was running on ancient software that barely functioned.

But it wasn’t updated because the box office manager was the only one who knew how to use it and thought it gave her job security. When this young woman was trained on it, the box office manager promptly changed the password and declined to share it.

When she was offered the job on a permanent basis, she politely turned it down. Wonder why? That was an office brought almost to a standstill by office politics.

Office politics is not going away. But here are a few of my tips to minimize its negative impact on productivity in your company.

1. The CEO sets the example. Treating everyone internally and externally with respect goes a long way towards decreasing office politics.

2. Have clear, well communicated company policies and follow them. Employees are happier when they understand what the office policies are and that everyone adheres to them.

3. Maintain an atmosphere of openness where people feel they can make their concerns known. When senior managers don’t feel they can bring topics up, problems in the company may stay hidden until a small problem escalates into a big one.

4. When you see that some employees are not working in the best interest of the company, speak to them directly. Explain that everyone needs to work as a team and work toward the same goal: the success of the company. If they are directing their efforts elsewhere, it may be time to move on.

You want people working hard for your company. Not virtually stabbing their co-workers in the back.

The High Cost of Office Politics

Politics is expensive. Just through late October, the top two candidates spent close to $2 billion vying for that fancy oval office and comfy bed on Air Force One. A report Wednesday stated that between the two candidates, they spent $1 billion on TV ads alone.

But let’s talk about the cost of another type of politics. If you’re like me, you’re probably campaign-weary too. My favorite Tweet from Election Day was by Larry Sabato, the Director of the University of Virginia Center for Politics. “Some call it Election Day. I call it Negative Ad Liberation Day.”

NASA managers knew there were issues with the O-rings on the Challenger and had been warned by engineers that it was too cold for the launch. But the organizational culture was such that people were scared to report the problems. It was launched on January 28, 1986 and broke apart 73 seconds later with six astronauts and a school teacher on board.

I want to talk about office politics. I don’t care whether you’re involved in your church’s flower guild, your condo association or a multi-million dollar company — every organization has politics. You’ve heard the definition of a dysfunctional family, right? One that has more than one member. Pretty much can be said of a group that has to deal with politics.

Everyone has an agenda. Fred in accounting may be sucking up to the boss, hoping for a promotion while Sue tries to avoid any type of controversy and sticks to her cubicle. I’m not concerned here with these type behaviors.

I’m talking about what takes place at the senior level, where playing politics can have the most devastating and costly consequences, even to the point that senior level managers can paralyze the operations of a company. Or worse.

I once worked with a large company where the directors were in a dispute over the direction of the company. Some old directors wanted to continue in the manufacturing business, believing they could salvage some of the company’s remaining resources, while others wanted to morph into a licensing company and focus resources on what they saw as a more promising path.

The problem was that the transition to a licensing company had already begun and the politics among these officers resulted in a six-month loss of time — not to mention millions of dollars — before the company pulled together on the project that would save them.

I’m not saying disagreement among managers is a bad thing. It can be a healthy way to flesh out the best ideas. Problems arise when one person or a group of people tries to undermine the process of normal negotiations and discussions by currying the favor of senior management or board members, and skew assumptions and strategies towards their desired outcomes. I’ve seen numerous companies disintegrate for these reasons.

The problem with politics is that not everyone has the best interests of the company in mind.

Let me give you a more deadly example. After the space shuttle Challenger explosion in 1986, Ronald Reagan formed the Rogers Commission to investigate what happened. Their findings were chilling.

NASA managers knew that there was a potentially catastrophic flaw in the O-rings and had known it for years, but NASA’s organizational culture was such that the people working closely on the project were too scared to bring it up.

Managers also disregarded warnings from engineers about launching in the low temperatures that morning, fearful that a delay might hurt the image of the space program. Seven people died as a result.

One of the largest barriers created by politics is that the CEO is unable to get the right answers and information he needs quickly enough to act, particularly during a crisis.

Another problem with an overly politicized office is that morale among employees is generally low and productivity is lowered. And unhappy employees have a harder time doing their jobs. Gallup reported that lost productivity due to employee disengagement costs more than $300 billion in the U.S. annually.

What is office politics costing your company?

Tune in for the next post when I address what you can do about office politics.