I’ll get straight to the point and fill you in about what you can expect from future blogs. I’ll be blogging about new and/or existing technologies (that may be underutilized) and how they can add value to our daily lives.

Technology has exploded in my life time alone and continues to grow at an exponential rate. It has only been about 100 years since Henry Ford produced the very first Model T. What would have people in that era thought about the technological advances we’ve made? Technology has allowed us to share and compile information like never before. That information allows every single person in the world a chance to learn something they would have never had the opportunity to only 10 years ago. It truly is quite amazing how technology has transformed our world.

Now that the year has come to a close we can take time to reflect at the technological environment we now live in:

There is a fine line that company’s hiring practice must follow.  The company needs to attract new talent that will bring fresh ideas to the company, but this comes at a cost; the incentives offered must match the talent level.  The company must be very careful to not alienate long standing employees who bring equal or better talent to the table.  From my past experience it is almost always easier to negotiate higher wages or better benefits when starting in a new position than when you’ve been with the same position (or same company) for some time.  Salary and benefits are definitely a big factor in employee satisfaction when the employee does not feel their salary/benefits are up to par in comparison with their peers, and when a new employee (who, in existing employees’ minds has proven nothing) is hired at a higher rate.  The company must develop a system to effectively attract new talent and satisfy existing employees.  How does a company do this?

Companies need an effective way to evaluate employees and establish a merit based benefit system.  This has been a highly debated and somewhat unascertainable system to establish.  One thing that is becoming clearer in today’s business environment is that performance evolutions are critically flawed and are not the solution to a merit based benefit system.

Leadership should be able to provide direction and facilitate the product development, not necessarily encompass every aspect of product development.  Each member of the cross-functional team should be highly involved with the product development from the beginning resulting in a higher since of ownership among the members of the team.  It is leaders’ responsibility to establish the evolvement of the entire team and create the environment that encourages pride of ownership.

I believe that leading a cross-functional team is quite different than leading a compartmentalized department (or group).  The same leadership style will not be effective, so there may be some unlearning and reacquiring of skills involved for leaders making the shift.

SAS’ first and foremost principle was to treat all employees fairly and equally.  This principle flowed over into their compensation plans and ultimately led to an industry low turnover rate.  This main principle among others were preached by top management and had a trickle down affect on all employees, ingraining the principles into the company’s culture.  The positive culture throughout the company made it a positive place to work and increased employee satisfaction.  The effective compensation plan was a competitive advantage for SAS.  The company got rid of negative competition by not focusing on sales quotas (like Nordstrom’s), offering bonuses that related to how well the company was doing, instead of the individual.  The company also contributed the max towards employees retirement funds.  This sort of compensation motivated the employees to work hard for the company and ultimately for their selves, not just to reach a quota which would give them a financial reward.  The goal was bigger than ones own self benefits.

Goal development from both the manager’s and the subordinate’s perspective seems like a much more productive activity than performance reviews.  An ongoing goal development program is much more productive due to the fact it would have its main objectives directed forwards instead of reviewing what has happened in the past.   This goal development program would share the control between managers and subordinates, allowing both to make contributions to what they believe to be important, unlike the performance review where all control resided with the manager.  The goals and milestones must be checked regularly for this program to be successful.

The WSJ article has a similar alternative to performance reviews and touches on many of my thoughts; their alternative program is labeled as “performance previews”.  The article’s solution is outlined by providing discussion about problem solving and how team members are going to work together more effectively and efficiently.  This program keeps the focus on the future and what members need from others to get what they both want accomplished.

http://www.business.unr.edu/faculty/simmonsb/badm720/getridofpa.pdf

Many other airlines have tried to clone Southwest’s success, but have continually been unable to do so.  These competing airlines offer the same routes and similar prices, but cannot obtain the same results.  Why is that?  The reason behind their failures is because these companies are too focused on the profits and not on their employees and customers.  If the competing airlines would focus on their employees and make for sure they are satisfied then their culture would slowly start to change as well, which is needed.  Only once their culture reflects Southwest’s can they be a true competitor.

The employee and customer centric approach should be developed in all companies, but sadly it is not and never will be.  Year after year we’ll see companies who ignore their employees needs, who don’t listen to their customers, and who are more worried about profit than anything;  these companies will fail or continue to struggle in mediocrity.