Rebuilding Trust, One Company At A Time
A couple of years ago, the American Psychological Association released a study of trust in the workplace. The findings were stark. About one in four Americans actively mistrust their employer. About half believe that their employer is not open and upfront with them. As Warby Parker co-CEO Dave Gilboa wrote recently, “Do you really think there is any chance someone who doesn’t trust their employer will produce their best work?”
There are reasons for the lack of trust. Most entrepreneurs and managers hold their cards close to the vest. They make the important decisions alone, without consulting employees or anybody else. If Charlie the company owner hires you, you may be grateful to him for giving you a job. But you have little reason to trust him until he shows you he has earned your trust. Click here to read more.
Colleges Should Take An Entrepreneurial Approach To Higher Education
Recently we’ve been talking (and beginning to collaborate) with a remarkable woman named Charisse Wernecke. Dr. Wernecke holds a PhD in higher education leadership and policy, and she has some great ideas about how to fix American colleges.
What does that have to do with entrepreneurship (we hear you ask)? Well, isn’t it about time that US colleges took a more entrepreneurial and open-book approach to their business?
Certainly most of them can’t continue on their current trajectory. Total US college enrollment is down 6% over the past four years, notes Wernecke, a drop of more than a million students. Tuitions and expenses continue to rise, sometimes topping $200,000 for a four-year degree. And even though most students don’t pay the full fare, they’re taking on a lot of debt to pay the discounted costs. At last count total US student debt was about $1 trillion—more than total credit card debt. Click here to read more. Click here to read more.
What’s Your Ownership Worth? Check The Scoreboard
Last month, the Texas-based supermarket chain H-E-B announced that it would be giving about 15% of the company’s stock over time to some 55,000 employees. The Dallas Morning News estimates that the shares are worth more than $1 billion.
H-E-B’s move reflects a growing interest in giving employees a stake in the business. Many public corporations offer broad-based option grants or share purchase programs. Several thousand US companies have employee stock ownership plans (ESOPs), with some ESOPs holding 100% of the shares. Click here to read more.
Two Cheers For The $70,000-A-Year Minimum Wage
You’ll remember Price. CEO of Seattle’s Gravity Payments, he’s the guy who promised to raise every employee’s annual salary to at least $70,000 over the next three years. He invited TV and newspaper reporters in to cover the April announcement, and media of all sorts haven’t stopped nattering about it ever since. NBC’s video of the occasion, reports Inc.magazine in a recent retrospective, was “the most shared in network history.”
Seven months later, we think there are three lessons to be learned from Price’s move. Click here to read more.
How Can American Businesses Become More Democratic?
Last Thursday, Paul Ryan delivered his acceptance speech as the new Speaker of the US House of Representatives. How you view Ryan will no doubt depend on your overall political views, and ours are quite different. But there was one section of the speech that both of us can agree on—and that holds an implicit challenge for businesspeople. Click here to read more.
How To Cut Through Labor-Management Hostility
Maybe you saw the headline a few weeks ago: a group known as the Tunisian National Dialogue Quartet won this year’s Nobel Peace Prize. The Quartet is a “many-hued association of labor unions, businesses, human-rights activists and lawyers,” reported the Wall Street Journal.
Unions and businesses working together in pursuit of common goals? What an idea.
Most of us Americans have been raised in the belief that labor and management are natural enemies. If you’re pro-business, you hate unions. If you’re for labor, you detest management.
But this is crazy. Management’s job is to improve the company’s performance. A union’s role is to improve the lives of its members. It doesn’t take a genius to realize that committed, engaged employees are likely to boost performance. Or that a prosperous company can provide better job security and growth opportunities for its workers than a struggling one. Click here to read more.
3 Tips For Planning A Dynamite 2016 In Your Business
It’s October, which means it’s time for you and your team to put together next year’s plan.
Ugh. At most companies, those words just drain the energy from the room. Preparing the annual plan is a painful ritual that eats up time and produces little. There’s usually fallout, too. When it’s time to create the plan, the senior team goes to some offsite retreat for a couple of days. Everyone else is left to do the work—and to roll their eyes about what “planning” really means.
Planning at open-book companies is a little different, and a whole lot more productive. There are three key points of distinction. Click here to read more.
In Business, Transparency Trumps Ideology
Pope Francis, who is visiting the United States for the first time this week, is one of the most popular pontiffs in recent memory. We think a large measure of his appeal lies in his ability to transcend conventional liberal-conservative divisions. Some of his views appeal to reformers, others to traditionalists. The Pope seems to be interested in what both camps have to offer and then he says what he thinks, which often doesn’t fit neatly within party lines.
How different this is from most of our political leaders, who usually wind up shouting at one another and denigrating everything their opponents stand for.
We ourselves—Bill and John—have some experience with ideological division. And we have to say that we greatly prefer the Pope’s model to that of the politicians. Click here to read more.
Cure For The Developing World: Inclusive Capitalism
By John Case and Bill Fotsch
I was walking through the Konkola mine, a mile below the surface. The miners told me that no one lies in a mine, since a lie could result in death. I could believe it.
My excursion deep into the earth was part of a consulting job. My colleagues and I were working with a company then known as Zambia Consolidated Copper Mines Ltd. The copper mines had been nationalized, and ZCCM was owned at the time by the Zambian government. It employed some 50,000 people and provided about 90% of the country’s hard currency.
But ZCCM was a company in trouble. Click here to read more.
Incentive Plans That Actually Work
By John Case and Bill Fotsch
The New York Times reported not long ago that variable compensation—payment of short-term incentives and bonuses—is on the rise. In 1988 these incentives accounted for close to 4% of payrolls, according to an Aon Hewitt report. Last year the figure was nearly 13%.
And these aren’t just bonuses paid to senior executives, which have long been common. Of the companies surveyed, 91% had at least one broad-based reward program. The trend “affects the C.E.O. all the way down to the guy who sweeps the factory floor,” said an Aon partner.
The growing role of variable comp throughout the organization reflects companies’ desire to keep fixed costs under control and align compensation with performance. Give employees a raise and you have to pay them at least that much next year. Give them a bonus and you can pay that bonus next year or not, depending on how your business is doing.
It all makes sense as far as it goes, except that it really doesn’t go very far. To see why, you have to look at what compensation is supposed to do. Click here to read more.
The Big Opportunity McDonald’s Is Missing
By John Case and Bill Fotsch
McDonald’s announced not long ago that former Obama press secretary Robert Gibbs would become the company’s chief communications officer. No surprise here: the big burger chain needs all the PR help it can get.
Its business is suffering. It’s the target of angry protests demanding higher wages for restaurant workers.
McDonald’s has already taken steps to address these concerns, such as raising hourly wages by $1 in the 18% of restaurants that are owned by the corporation rather than by franchisees. But the company is missing a huge opportunity to revive corporate performance, show franchisees how to revamp their business, and mend its tattered reputation in the process.
Here’s what we mean. Click here to read more.
Introducing A Blog About Companies That Engage Their Employees By Opening The Books
By John Case and Bill Fotsch
We’ll be writing in the coming months about a business phenomenon called open-book management. So we better tell you something about who we are and how we came across this simple but powerful idea. Click here to read our first article.