Amazon

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Top Tips for Keeping Employees Engaged

Last week in the column, “When Your Employees Hate Their Job,” I wrote about the lack of engagement among workers. In the U.S. it is estimated that only 30 percent of employees claim to be engaged at work, according to a recent Gallup survey of 5.4 million adults. I also included tips on what you could do about it that included changing vacation and sick day policies and letting employees write their own job descriptions.

This week, I’d like to share more radical approaches some companies have taken to make sure they have a more engaged work force. I will also share my top tips for re-engaging employees after a company goes through tough times.

How about paying people to quit? Yep, that’s what Amazon does. You can be paid up to $5,000 just to quit. This simple program is called Pay to Quit and that’s exactly what it is. All employees in the fulfillment centers are eligible for it.

Jeff Bezos, chief of Amazon, talked about the program in a recent article in Time magazine, “Amazon Will Pay You $5,000 to Quit Your Job.”

“Once a year, we offer to pay our associates to quit. The first year the offer is made, it’s for $2,000. Then it goes up one thousand dollars a year until it reaches $5,000,” he said.

The company doesn’t really want its employees to quit. In fact, the headline on the offer is  “Please Don’t Take This Offer.” The goal is to get rid of unmotivated employees. As Bezos said, “In the long-run, an employee staying somewhere they don’t want to be isn’t healthy for the employee or the company.”

The program started at Zappos and was adapted by Amazon when it purchased the online shoe retailer. The reasoning is that it costs less in the long run to get rid of employees who don’t wish to be there than keeping these unmotivated employees on the payroll.

It’s not the first such offer the employees get. After an intensive four-week training program and one week on the actual job at Zappos, employees receive “The Offer.” They will receive a $2,000 bonus in addition to pay for the amount of time they have worked if they leave. According to Zappos CEO Tony Hsieh, 97 percent decline.

In my work as a turnaround authority, I have seen what can happen to companies when the employees are actively disengaged. In fact, reengaging employees is one of my greatest challenges when I take over a company. It can be almost impossible to turnaround a company when employees are unmotivated. They work slower, make more mistakes due to basic negligence and may ignore requests of their supervisors.

So how do you do get them back on board when a company is in such bad shape? By that point, it’s too late for measures like changing leave policies or paying folks to leave. They would probably exit in droves!

At that point my ability to reengage employees and turn the company around relies on two things: communication and buy-in.

I tell the story in my book “How Not to Hire a Guy Like Me” about working with an apparel manufacturer. The president had been fired and the company was undergoing a crisis of leadership. The interim president was constantly changing restructuring plans and announcing firings and closings almost daily, creating an emotional roller coast for the staff.

We had to conduct extensive meetings to earn support to proceed with our forbearance agreement and have time to hire a new president.

We had to be very open and honest about our plans with the staff. Once they learned they were an integral part of the process and were hearing the truth from us, we earned their trust. And we got buy-in from them for the path we were taking.

This kind of buy-in was contagious up and down the organization, and this spirit amongst the staff contributed immensely because people felt they were a part of the turnaround. They were committed to the company and seeing it survive. Anything I needed from them I got. I couldn’t have done it without communication and buy-in.

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Sometimes Family Business Should Be Sold

It was shocking news. After eight decades of ownership, the Graham family sold The Washington Post to Amazon founder Jeff Bezos for $250 million. The announcement stunned everyone, from The Post employees to the media industry.

You have to hand it to them. They kept their courtship of several potential buyers and the impending sale a secret, despite employing some of the best investigative reporters in the country.

Publisher Katharine Weymouth, who is Katherine Graham’s granddaughter, wrote to the staff, “This is a day that my family and I never expected to come. The Washington Post Company is selling the newspaper it has owned and nurtured for eight decades.”

bezos_washingtonpost_0805Her uncle, Donald E. Graham, Chairman and CEO of The Washington Post, said, “I, along with Katharine Weymouth and our board of directors, decided to sell only after years of familiar newspaper-industry challenges made us wonder if there might be another owner who would be better for the Post (after a transaction that would be in the best interest of our shareholders).”

It takes courage to admit that you may no longer be the best person to run any business, much less one that has been in your family for generations.

It’s a hard truth and one I’ve had to relate to some of my turnaround clients who have nurtured family businesses for years. It’s tough to tell them that the best thing they can do for the family business is to let it go. It doesn’t matter how many years the family has owned it, how much it meant to Grandpappy, or how tough it is that your generation is the one to lose it. Sometimes if you want a company to survive, the best thing to do is sell it.

It may be time to sell if the heirs that are available in the next generation of management either do not want the responsibility or do not have the capability to run the business successfully. Maybe you’ve received a large offer, one that really is too good to refuse. In both cases, it’s a win for the family to sell the company.

Sometimes the current ownership of a family business just isn’t able to handle the changes in the industry and can’t find a way to keep the company financially viable.

That seems to be the case for the Post. In the first half of 2013, the company lost $49.3 million. Circulation has declined for seven years in a row. The Post has been slow to embrace the digital revolution. It has the fewest digital subscribers and lowest ratio of digital subscribers to print subscribers of any of the top 10 U.S. newspapers, according to an article in Mashable.com.

Bezos may be just what the company needs. Associate Editor Bob Woodward, the Pulitzer-Prize winner for his exposure of Watergate, said in an article in thedailybeast.com, “It’s very sad. But if there’s somebody who can succeed, it’s Bezos. He’s the innovator, he’s got the money and the patience, so we’ll see. I think in some ways, this may be the Post’s last chance to survive, at least in some form of what it was.”

As Donald wrote in the letter to staffers, “The point of our ownership has always been that it was supposed to be good for the Post. As the newspaper business continued to bring up questions to which we have no answers, Katharine and I began to ask ourselves if our small public company was still the best home for the newspaper …. We were certain the paper would survive under our ownership, but we wanted it to do more than that. We wanted it to succeed.”

That should be the goal for any company. Not just to exist but to succeed. And sometimes the best way to ensure that success is to hand it over to someone else.

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Smart Businesses Recruit from the Military

Every year on Memorial Day we celebrate those who have made the ultimate sacrifice and died serving our country. We also take a moment to acknowledge the 1.5 million men and women serving in our armed forces today, helping to protect the freedoms we enjoy in the United States.

In addition to being grateful for their service, smart businesses also recognize the value that young people who leave the military can bring to their companies.

In 2008, senior executives at Walmart were dealing with the potential vacuum of young leaders to grow into store management roles. Their usual recruiting methods couldn’t keep up with their projected growth.

The CEO, Bill Simon, who was a 25-year veteran of the Navy and Naval Reserves, suggested the company create a program to recruit junior military officers.

“The thinking was that we could bring in world-class leadership talent that was already trained and ready to go,” said Jennifer Seidner, a senior recruiting manager at Walmart. “And then we could teach them retail, because we know that pretty well.”

The Walmart JMO program was launched and dramatically changed how Walmart recruits young talent. This past February the company announced that effective this Memorial Day weekend, it would commit to hiring more than 100,000 honorably discharged veterans within 12 months of leaving active duty for all types of positions.

Walmart isn’t the only company that sees the value in hiring young, trained talent.

The financial services company USAA launched the “Combat to Claims” initiative to train post-9/11 veterans to become claims adjustors.

“The reason the program is working so well is because military folks have such a sense of discipline and order,” said Joe Robles, the CEO of USAA and a retired Army major general.

Each year Victory Media publishes the “Top 100 Most Military-Friendly Employers” index to serve the 400,000 military personnel who leave the service each year to enter civilian work. The list is based on surveys of businesses with annual revenues of more than $500 million.

The trucking company Crete Carrier is on the list and actively recruits military on its website: “We’re looking for men and women with honesty and integrity, who assume responsibility and adhere to a code of ethics. In other words, if you succeeded in the military, we’d like to enlist your services. Welcome home.”

Another company on the list is Travelers Insurance. “We find that military veterans bring dedication and discipline to their roles, and that they seek and accept responsibility readily,” said John Clifford, executive vice president of Human Resources. “The skills they learned during their military service transition well to any position within our company.”

Other companies that actively hire military officers include Deloitte, General Electric, Shell, Amazon, Accenture and PricewaterhouseCooper PwC.

Hiring veterans isn’t just a feel-good thing to do for your country. It makes sense for your business. As Amazon CEO Jeff Bezos said, “We actively seek leaders who can invent, think big, have a bias for action, and deliver results on behalf of our customers. These principles look very familiar to men and women who have served our country in the armed forces, and we find that their experience leading people is invaluable in our fast-paced work environment.”

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The High Cost of Fraud and How to Prevent It

More than a trillion dollars. That’s how much fraud is costing companies in the US each year.

The Computer Evidence Specialists LLC released the “2011 Report on the Cost of Fraud in the United States” earlier this year. The goal was to put a figure on the total cost of fraud in the United States from six industries: corporate, securities, financial, mortgage, healthcare and insurance.

Here was their conclusion: “Through our research, compiled from the most recent data available on the subject, we conservatively estimate that fraud annually costs victims $1.32 trillion.”

The figure is conservative, as a lot of fraud is underreported by victims or not reported at all.

Shocking, isn’t it? The truth is that no company is immune to the cost of fraud and you need to be vigilant in your efforts to prevent it.

The Woodruff Arts Center this week learned that a former employee embezzled $1.48 million over the course of five years.

The Woodruff Arts Center this week learned that a former employee embezzled $1.48 million over the course of five years.

The arts community in Atlanta was saddened this week to learn that $1.48 million was embezzled from the Woodruff Arts Center, the largest cultural institution in Atlanta.

Seems a mid-level administrator, who wasn’t even in a finance-related job, figured out a way to set up a fake company. Over a period of five years, the man regularly submitted invoices from the fake company and raked in big bucks. He wasn’t caught until after he left, for unrelated reasons, and someone took note of suspicious invoices.

A simple set of checks and balances would have caught the thief before he collected his first check.

Here are some key things to remember when considering your own system of checks and balances. Remember that any place money or goods exist or move is a place where theft or fraud could occur.

• Remember that anyone can commit fraud. Family member, long-time employee, revered CFO. Don’t consider anyone above suspicion. I worked with a company once where the son was stealing from the family business after his dad died. He felt he wasn’t being paid enough and stealing was his way of claiming his inheritance.

• Always poke around your books. No matter how large your company gets, take some time to peruse the checkbook or QuickBooks. Ask where the money is going. In the case of the Woodruff Arts Center, the fake company was one of only 13 that were regularly paid. How long would it have taken to do a Google search on the fake company or question someone about the services supposedly being rendered?

• Monitor and review monetary trends. Determine what types of numbers are most meaningful to your company—the cost of goods or services, employee expenses for example—and determine the acceptable range for those numbers. Graph the data for those numbers and pay attention if any numbers fall outside of that range.

• Change the standard by which you review transactions. For example, if your company only reviews expense reimbursement requests that are above $1,000, regularly review those at around the 80 percent level. I’ve found that seems to be a favorite spot for thieves. The Woodruff Arts Center thief got away with his fraud for so long because even though the amounts that were paid to the fake company increased over time, they remained under the limit that may have drawn attention.

• Trust your instincts. If something in your company seems a little off, investigate further. Don’t feel guilty about asking questions. You’re in charge.

Don’t let fraud cost money at your company. Tighten up those checks and balances.

Read more about fraud prevention in my upcoming book, “How Not to Hire a Guy Like Me: Lessons Learned from CEOs’ Mistakes.” The book will be available on Amazon in early 2013.