What can you buy for an extra $1 million?

Dave’s note:  Here comes my favorite “tell-it-like-it-is” CEO, Kim Shepherd, with another of her “crazy” (meaning excellent) ideas to pry innovative ideas from associates.  Does the headline grab your attention?  Read on…

By Kim Shepherd

What can your department or company buy if it had an extra million dollars? The quick answer is: a whole slew of great ideas. And, surprisingly, those ideas might not cost much at all – in real dollars. Here’s how I came to this insight.

100000 dollar billAs you now have read, our company is a 100% virtual firm, so our annual all–staff meeting is hugely important. At a recent one we organized into tiger teams, small cross–functional groups of people who brainstorm intensively around a specific topic. Each group had the same topic: if you had $1 million to spend on improving the company, how would you spend it?

We certainly don’t have a million bucks lying around, but the tiger teams went into high gear and filled a dozen flip–chart pages with some great ideas. Once the leadership team consolidated all those ideas, we realized that 80% of them could be implemented without spending a penny. The ideas included process changes, time management tips, performance motivators, and more. And no team spent the entire $1 million.

[Email readers, continue here…]  Removing the limitations and confinements of the brainstorm opened the idea floodgates. Raising moneyThink about it: imagine you went into a tiger team meeting and said, “We have $3000 to invest in improving the company. How should we spend it?” Before the creative juices even start flowing, you’ve put a box around everyone’s mind. They’re focusing on cost rather than ideas. Even if you encourage them to think outside the box, you’ve already got a box.

Granted, with $1 million, you still have a box. But for most of us, a million–dollar box is so big that just about anything is possible. If you are an $80 billion global corporation, you might need to use $1 billion for this exercise, and lucky you. One way or the other, the goal is to eliminate any boundaries or restrictions.

A couple of extra value–adds: this approach makes the exercise fun, as no idea is too crazy – and we heard some crazy ones. In addition, brainstorming is a team–builder. Not only do people feed off of one another’s energy and become more and more engaged, but they also gain a glimpse of each other’s thinking and values.

So you could say that spending $1 million could be free. The ideas you get, however, might be priceless.

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Don’t go on a phishing trip!

Dave’s note: Our guest author this week is Kevin McDonald, Executive Vice President and Chief Information Security Officer at Alvaka Networks, a network services and security firm in Irvine, California. He is a trusted technology and security consultant and public policy advisory to some of America’s most influential people and organizations. 

By Kevin McDonald

Phishing, a play on the word “fishing,” is a dangerous form of executive or CEO email fraud, and is negatively impacting individuals and companies worldwide. You certainly have seen some form of this social engineering – where criminals pretend to be an organization or individual such as the IRS, a creditor, partner, CEO/CFO or other key executive.

The goal is to “phish” a person into taking actions they shouldn’t. An attack may involve a phishingcall demanding payment to the phisher for past due invoices from a legitimate supplier, or verification of credit card data to create facilitate the fraudulent transaction. Phishing can hook you through infected emails – or links to a fake website containing malware – or information capturing forms you are asked to complete.

Many websites are compromised and have been hacked with or set up with embedded nefarious software.  A successful attack can lead to you or one of your associates providing highly sensitive personal details of self, customers or employees – including social security numbers, usernames, passwords, and/or banking information. Phishing victims have been known to transfer large sums of money as a result of appeals, threats, or claims.

[Email readers, continue here…]  Some attacks are rudimentary, but watch it! Sophisticated attacks fool highly astute users. “Spear phishing” is directed at specific individuals or groups and is especially effective.  From IT staff to controllers, many comply with a phisher who has done homework. Attackers use social media and professional pages to understand their targets. Being rushed to respond and clear a task, aiming to please when seemingly appropriate, or fearing threats to leadership or the entity under attack can easily lead to mistakes.

So what does phishing look like? You may recognize some obvious attempts yourself. For example, you receive a PayPal email revoking your credit, but the email contains obvious grammar and spelling errors, and you don’t have a PayPal account. You may have received a notice of default for some critical service you do or don’t have – along with a request to transfer money outside of the normal payment channel.

Attacks have resulted in losses from a few dollars to hundreds of millions. Anthem Blue Cross for example could be a phishing loser. It reportedly suffered a phishing attack that exposed an estimated eighty million patient records. The attack is believed to have started with custom malware sent to Anthem IT staff. Unfortunately, patients were further victimized when they were then targeted with fake Anthem emails offering credit protection.  According to a recent lawsuit filed by a New York U.S. Attorney, another unnamed company was phished for nearly $100 million and luckily, so far recovered much of that. FireEye has reported Apple phishing campaigns using fake Apple domains to lure victims into providing Apple Store IDs and passwords.  The list goes on and becoming a victim is not difficult.

So, what can you do?

  • Slow down and pay attention with skepticism when something seems “not just right.”
  • Use email clients or services with pre-delivery scanning.
  • Don’t open emails from unknown sources.
  • Never use an administrator account to surf the web or open email.
  • Read URLs very carefully to be sure they are legitimate (microsoft.com is not www.microsft.com.)
  • Read email addresses carefully and verify (joel@outlook.com is not Joel@outlok.com.)
  • Look for improper grammar and language patterns that appear to be foreign or don’t fit the person or organization represented.
  • Avoid account verification, updates or other requests for you to click a link, log into a website or provide information.
  • Never enter data into a pop-up.
  • Never open an unsolicited attachment or link.
  • Use secondary authentication and two party authentication (code to your cell phone after entering your name and password) for financial transactions.

With all of these precautions, you’ll be unlikely to go on an unwanted and dangerous phishing trip.

Posted in Protecting the business | 3 Comments

The lion and the ant: A managerial lesson

This story has been making the rounds lately, and I confess that our research cannot find the source.  So, with thanks to whomever created this great little parable, here it is:

“Every day, a small Ant arrived at work early and started work immediately, she produced a lot and she was happy. The boss, a lion, was surprised to see that the ant was Antworking without supervision. He thought if the ant can produce so much without supervision, wouldn’t she produce more if she had a supervisor!

So the lion recruited a cockroach who had extensive experience as a supervisor and who was famous for writing excellent reports. The cockroach’s first decision was to set up a clocking in attendance system. He also needed a secretary to help him write and type his reports. He recruited a spider who managed the archives and monitored all phone calls.

[Email readers, continue here…]  The Lion was delighted with the cockroach’s report and asked him to produce graphs to describe production rates and analyze trends so that he could use them for presentations at board meetings, so the cockroach had to buy a new computer and a laser printer and recruit a fly to manage the IT department. The Ant, who had been once so productive and relaxed, hated this new plethora of paperwork and meetings which used up most of her time.

The lion came to the conclusion that it was high time to nominate a person in charge of the department where the ant worked. The position was given to the Cicada whose first decision was to buy a carpet and an ergonomic chair for his office. The new person in charge, the cicada, also needed a computer and a personal assistant, who he had brought from his previous department, to help him prepare a work and budget control strategic optimization plan.

The department where the ant works is now a sad place, where nobody laughs anymore and everybody has become upset.  It was at that time the cicada convinced the boss, The Lion to start a climatic study of the environment. Having reviewed the charges of running the ant’s department, the lion found out that the production was much less than before – so he recruited the Owl, a prestigious and renowned consultant, to carry out an audit and suggest solutions. The owl spent 3 months in the department and came out with an enormous report, in several volumes, that concluded that “The Department is overstaffed.”

Guess who the lion fired first?

The Ant of course “Because she showed lack of motivation and had a negative attitude.”

So the lesson is obvious.  And we see examples every day.  We build our companies with layers of management in the natural course of growth, often quoting that a manager should have no more than six direct reports, or that managers should be freed to do the important, high value work.

We often ignore the ants in our work lives, thinking – perhaps subconsciously – that value equates to salary level, or lowest level workers can be replaced. Or best of all, management generates creative output and pushes that creativity down to the worker ants in the organization whose job is to work, not think.

So in this story, was the lion guilty of just that form of managerial thinking?  Why not see the obvious?  Just add more ants, hopefully as resourceful as the first?  Or is it more complex?  We learn from our experience and education that growth comes from “top–grading” at all levels of the organization. And that the bottom ten percent of the workforce must be replaced, as we hire “A” players.

The story is meant to illustrate one folly of common management.  I’d take it as a beautiful warning to all of us that some things are obvious in business, and that we should focus on what works and reinforce that whenever we see it working.

Be a better lion. Watch for what’s great in each and every ant.

Posted in Depending upon others | 8 Comments

The power of NO!

Over the years I have counseled entrepreneurs to think of a “no” response in terms of “yes, but…”  There is always another way to say “no” that leaves the door open for creative thinking.

Well, almost always.

Power_of_noSometimes, you just have to suck it up and say “NO” with strong conviction.  It usually happens after several attempts to find a “yes, but” solution to a problem or issue that just can’t be resolved.

Assuming that you have the “yes, but” tool on your belt, then an occasional “NO” will resonate through the halls and be much more effective than if used often as a leadership tool.

Now that we have that out of the way, how can you capitalize on the use of “yes, but?”   There should always be an alternate solution that responds to the needs of both parties, even if not completely so.  How about: “May I take five weeks of vacation this year?”  Especially for a person badly needed within the organization, this is a conundrum for management.  “Could you take them in two week increments if you have that many weeks coming?”  “Is there a way to take less this year and spread this over two years?” “Policy says ‘no,’ but if you’ll tell me some good arguments and accept unpaid time off for the extra unearned vacation, let’s see what we can do.”

“No!  You don’t have that much coming. Go back to work. Please.”

Which of these leaves the direct report more satisfied, even if the later answer is “Can’t do it because…?”  Leadership often means leading with compromise, not just by the book.  “Yes but” is almost always the best way to respond to a request.  Try it…

Posted in Surrounding yourself with talent | 2 Comments

Micro–train; macro–manage

Dave’s note:  The week, we again welcome Kim Shepherd as our guest author, with her blunt, on-the-target style.  As always, you should enjoy her insights for management…

By Kim Shepherd

You have enough on your plate without having to hold your employees’ hands or peer over their shoulders. In fact, the ideal scenario is to follow Lee Iacocca’s strategy: “I hire people brighter than me and then I get out of their way.”

Of course, in practice it’s not that easy. My own version is “Hire smart and hire right, and you’ll be a mentor rather than a boss.”

Here are some tactics and strategies for making this work.

Invest in training, and save on managing. Let’s assume you’re bringing on board people who already have expertise in their functional area (entry–level training is a whole micro-managerdifferent beast). You still need to make sure they are proficient in your systems and processes. Even more importantly, they need to understand and embrace your company’s values and ethics. That knowledge will serve as a compass as they continue to learn and grow in the organization. It sets them up to make decisions independently. Instead of spending a lot of time managing them, invest a little quality time in coaching them.

[Email readers, continue here…] In addition, take advantage of the trend in the training and development space toward self–directed learning. Provide access to your robust internal “university,” or to vendor–provided training.

Shut Your CEO Hole. When an employee –– let’s call her Maria –– comes to you for guidance, it’s tempting to blurt out a solution. Instead, hold your advice until Maria asks, “What do you think?” Just describing the problem may help Maria figure out the solution. You can provide a point of view to add an extra dimension, but avoid simply solving the problem.

Be consistent. It takes a little longer, but every time Maria (or anyone else) asks for help, push her to come up with her own solution. It may not be the one you had in mind, but from the leader’s point of view, the process of getting to a solution is more important than the solution itself. Pretty soon your people will be coming to you with solutions rather than problems.

Then and now. An addendum to the “hire smart, hire right” axiom is that you also won’t need a lot of infrastructure. The workplace is changing. In the 1960s you had to pay the salary of someone who would decide whether or not an employee could take time off in order to take her son to the dentist. Your people should be able to make that decision for themselves.

If fact, in a virtual environment like we have at our company, any employee can work any hours.  As long as the work is getting done, we don’t care. But you can only do that if you have established yourself as not being a micro–manager. To get there, you have to be secure in your vision and your own leadership skills. Then you need to hire right, and establish processes that promote independence.

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Hire “Jacks” (and “Jills”)

Sometimes you need to hire a specialist already trained in a single narrow task.  But for most of us, we’d do far better hiring someone who has proven from past experience to be a “jack of all trades” able to fill many positions, do many tasks, learn and perform in many situations.

You’d be going against the grain of advice by many who state that trained, experienced new hires will benefit the organization, raise the level of enterprise expertise, and fit in and contribute immediately.

On the other hand, many breakthroughs in business and science have come from the intellectually curious, the critical thinker who can ask questions that may be unexpected but lead to new solutions.  And many business leaders have expressed their opinions that JackOfAllTradestheir best hires have been the ones that are most-able to expand the enterprise’s ways of thinking and performing – using creativity rather than rote memory and specific academic education as the driver of innovation.

[Email readers, continue here…]  This leads to a discussion of new hire cost and of sources for new employees.  In the academic world, three new hires on the tenure track can be made for each two retiring with tenure.  That same ratio is close to reality in business.  In each case, the enterprise is able to reassess its needs in relation to its strategic goals, as the natural order is refreshed over time as people leave a business for any reason.

As to sources of new, young employees:  there are two very different types of educations.  Research universities often send their students through a rigorous program of education tilted toward specific specialties, with domain knowledge emphasized over critical thinking and creativity.  Liberal arts colleges, on the other hand, usually allow specializing in broad career tracks while emphasizing the elements of critical thinking, creativity and leadership skills.

For your needs, which young graduate would you select?  The title of this insight tips my hand, as I lean toward hiring those with those extra traits, and training them in the specific skills of their discipline.  The benefit:  a boost in corporate creativity and new blood at the bottom perhaps capable of future executive leadership.

Posted in Surrounding yourself with talent | 2 Comments

Work–life balance is now a cliché

Dave’s Note:  Our special guest author this week is Kelly Graham from Decision Toolbox, Inc.  You’ll enjoy her take on one of the basic issues of our business-personal lives…

By Kelly Graham

Finding work–life balance is one of the most abused clichés in business today. Why? Because there is no such thing as work–life balance in corporate America today. Conventional corporate structures don’t allow for balance, just the illusion of working towards it.

Work–Life Balance is dead

Look at the structure of conventional corporate America. Employees must wake up in time Work-Life-Balance 3dto get whatever household chores need to be done before heading off on their commute to the office. Depending on where that employee lives, the commute could take anywhere from minutes to a couple hours.

Everyone is rushing to make it to the office by the set start time, when everyone is expected to be at their desks to comply with the “butt in chair” office policy. Work, work, work until lunchtime, when the lucky employees are allowed to take a lunch break, though in many environments, it’s an unspoken rule that truly dedicated team members eat at their desks while continuing to work. Work some more, until the designated “quitting time,” which again, may be influenced by the unspoken rule that only slackers leave right at 5 pm. The dedicated team members stay long past that. Again with the commute home, just in time to figure out dinner, get the kids settled in for the night, have an hour to do whatever needs doing, then it’s lights out and start the whole process again tomorrow. Where is the balance?

It’s Not About Logistics

[Email readers, continue here…]  Some might argue that because Kim’s company is a 100% virtual company, where all team members work from home offices, it’s all too easy for us to be simplistic about the concept of work–life balance. While it’s true that working from home allows us to throw in a load of laundry while on a conference call, or squeeze in a workout on our lunch break, the truth is that working from home requires discipline. When the office is ten steps away at all times, we can, and do, end up working at all hours. The difference is…it’s our choice to work when it works for us, not when the clock tells us we’re supposed to be working.

Being virtual is a logistics benefit for sure, but more importantly, work–life balance is also a cultural mindset. We are not just able, but encouraged, to take ownership of our jobs. As long as the work is getting done, nobody should be looking over your shoulder to see when you’re doing it.

Why it Matters

If you’re looking for a way to turn your clock punchers into highly engaged employees, take a look at your culture. Does it really encourage work–life balance? Or is it lip service? Employees are highly engaged when their personal and professional values complement and support one another.

This is especially important for Gen Y, who value flexibility in their lives. We should take a lesson from them. They watched their parents struggle on the teeter–totter and learned that it doesn’t work. Instead, they expect a holistic approach to work and life. This includes work schedules, telecommuting, home–office arrangements, and dress code.

“A” leaders won’t get “A” players just by offering the highest pay, the shortest commute or the coolest water cooler. Instead, they’ll attract them by allowing employees the space to incorporate their personal and professional lives into one cohesive, meaning–driven life.

Posted in Surrounding yourself with talent | 1 Comment

Work on your three levels of leadership

Another leadership development bit?  Yup. But if you have no time or are impatient, here are the three levels:  visionary, strategic and tactical.  Skip or stay, but think about your balance in leadership either way.

As a leader, you have to worry over issues from mundane to strategic, constantly reordering your priorities to accommodate competing needs.  Sometimes, the

Created using Luxion Technology (luxion.com)

Visionary leadership…

noisiest or most recent issue takes center stage – just because it is easiest to respond to at the moment.

But we all should be aware of the three levels of leadership that each of us experience as we create, grow and nurture our various enterprises, no matter what their size.

By far the most enjoyable for most of us is visionary leadership – the time we spend thinking ahead, creating new ideas for products or services, focusing on the big picture and how we can change the world with our creation.  It must be the lifeblood of a company that is going to make a difference in an industry or the world.  And each of us tasked with a senior role in an enterprise should dedicate some amount of time to just this.  Visionary leadership is not performed in a vacuum.  Many times it is a customer, an employee, or an industry conference that sparks the idea that drives you to create and express your vision of the future for your company or product line.

 [Email readers, continue here…]     Then comes the strategic thinking and planning that leads to what must be done to achieve the vision.  Think of creation of your strategic plan as drawing the roadmap to get to the goal.  Strategic thinking is a necessary part of a leader’s mental toolkit and often requires input from those who will execute the plan.  A leader who does not periodically engage others in strategic thinking is missing the critical step in focusing the organization toward achievement of goals and the vision.

The third level, tactical leadership, is the one that requires trust in your direct reports, along with the ability to delegate and empower others to execute the plan.  You should be involved in development and review of the tactics to achieve those strategies you’ve mutually created. The best leaders find metrics to measure progress in achievement of these tactics, then don’t interfere with the execution of these tactics unless negative metrics signal a reason to do so.   Delegation is an art, requiring a form of strength that must be learned – especially by eager entrepreneurs used to tight personal control of processes.  But no enterprise can grow or succeed without the delegation of tasks and without the thoughtful use of metrics to measure progress and success.

Three levels of leadership to learn, practice, and teach: visionary, strategic and tactical.

Posted in Growth!, Surrounding yourself with talent | 2 Comments

Employee vs. contractor: Here we go again.

Several years ago, I wrote an extensive article on the ten most important tests of a company in classifying a person as an independent contractor.  See http://berkonomics.com/?p=662 for that important insight.  But things have gotten much more complicated lately, partly because of the Uber, Lyft and other new generation of Employee-vs.-Independent-Contractorworkers and the best description of their class as “semi–independent.”

But now we have to weigh in with the U.S. Department of Labor definitions as well as the Internal Revenue Service, and try to make sense of the mix.  So here goes:

The Department of Labor (in its Fact Sheet #13) lists six classes of test for independent contractors:

  1. The extent to which the work performed is an integral part of the employer’s business. (If high, then employee.)
  2. Whether the worker’s managerial skills affect his or her opportunity for profit or loss. (If high, then employee.)
  3. The relative investments in facilities and equipment by the worker and the employer. (If worker is even remotely high, then independent.)
  4. The worker’s skill an initiative. (If initiative high and unsupervised, then independent.)
  5. The permanency of the worker’s relationship with the employer. (If high, then employee.)
  6. The nature and degree of control by the employer. (If rules are great and control is high, then employee.)

[Email readers, continue here…]  The IRS guidelines cover the same principles, but the IRS combines these into three basic classes to test that relationship and classify the person in question.

  1. Behavioral control: Does the employer have the right to direct or control how the work is performed through instructions, training or other means? (If yes, then employee.)
  2. Financial control: Does the business have the right to direct or control the financial and business aspects of the worker’s job? (If yes, then employee.)
  3. Type of relationship: How does the worker and the business perceive their relationship? (More difficult. If each considers this a contract, there should be documentation, but that would lean toward independent contractor.)

And the IRS has many more tests within this grouping. (See my article referenced at the beginning of this for those.)

The IRS helps a bit by providing form SS–8 which can be submitted to the IRS for a pre–determination of the status of a worker.

This is not a test to be considered lightly.  The penalties for misclassification are onerous, and early stage companies usually cannot afford the risk at the very time when they are most vulnerable.  One more time:  check out the previous article listed above for the ten tests.

And now, think of Uber, Lyft, AirB&B, and all the others that try to teach and enforce consistency, adherence to company rules, management of time, and determination of the quality of the worker’s facility or vehicle or tools.  And try to classify the worker using the above questions.  It becomes very difficult, and certainly leads to conflict, potential lawsuits, and lack of easy resolution.

No–one said that managing a business is easy. This range of issues just makes it even more difficult.  Yet, the risk of betting the farm on a wrong classification of an increasing number of workers is too great to ignore this subject or not to understand its impact upon the business.

Posted in Protecting the business | 2 Comments

The Power of the glass half empty

Dave’s note:  This week we again welcome my co-author of “Get Scrappy” to give us some of her sage advice in only a way she could express it.  You’ll enjoy her style and message…

By Kim Shepherd

It’s great to get good reviews and hear positive feedback . . . positive is good. But negative is powerful. Don’t get me wrong: the glass is half full. But what’s in that “empty” half? I think it’s filled with clues on how we can make the good even better. The trick is to spot the clues.

Here are some ideas…

Hang in the negative

Not surprisingly, people like to focus on what’s working. But imagine this: at the end of a Glass-half-full-webproject or period, you get back a client satisfaction survey with a score of 100%. Now shake things up. Call the client and say, “We appreciate that feedback, but no one is perfect. Wasn’t there something we could have done better?”

For one thing, you’ve just blown that client’s mind. She’s thinking, “I just gave them a perfect score and they still want to be better? Wow!” But suppose she tells you, “Well, now that I think of it, there were a couple of days during the engagement when I wondered where things stood, but I wasn’t getting updates.”

[Email readers, continue here…]    This is feedback you can use, a guide for making that good thing even better. No, the changes probably won’t be huge. But Olympic athletes like Apollo Ohno take steps to shave .02 seconds of their time –– and sometimes that difference is golden.

Listen to the silence

There’s also power in silence. No, I’m not going all Zen on you. Not long ago, Kathy Marshall, our Director of Recruitment Quality, blogged about this notion. She says the feedback she does get around quality is valuable, but she believes there is “quality gold” in the feedback that isn’t always offered. You have to go and get it.

This applies beyond client satisfaction surveys. For example, people tend to ignore introverts on their teams. But you need both introverts and extroverts. You don’t usually have to ask extroverts for their opinion –– in fact, sometimes the challenge is getting them to be quiet for two seconds.

But the introvert in a meeting may be quietly looking at the issue from multiple viewpoints or playing out different scenarios in his head. If you’re leading the meeting, make a point of asking the quiet ones to share. Or find some time alone and ask their thoughts.

Think inside the box

A lot of people rush to think outside the box. It’s sexy. But thinking outside before thinking inside is like trying to sell someone a drill when all they really need is a hole. Great innovators first look inside the box so they’re really clear on what’s there. THEN they turn outside.

Posted in General, Positioning, Surrounding yourself with talent | Leave a comment