How To Write Commercial Collections Letters

Writen by Steve Austin

It is sometimes valuable to bring the sales manager into this step of the collection process. Information concerning the delinquency can often be obtained from the sales department. Tips for Commercial Collection Letters: When writing commercial collection letters, these points should be considered:

Include all basic information.

The commercial collections letter should state how and when you expect payment. It should suggest why the account should be paid in full. It should motivate the debtor to actually do this—now.

Use an effective style of writing.

Most commercial collections letters are written to appeal to the writer and not necessarily to the delinquent customer. Appeal to the debtor.

Use the "you" approach.

Too many commercial collection letters emphasize "we." Avoid such phrases as "we insist," "we remind" and "we want." It is much better to put the customer into the letter, saying such things as "you will appreciate" and "it is to your advantage." Remember that the debtor is not interested in your best interest, but in their own.

Don't say, "We will not write again."

This assures the debtor of their success in evading payment, and a phrase such as "to keep your good credit rating" may be impractical in a situation that has reached a certain stage of commercial collection.

Use motivating factors.

If a customer has not paid, there is a reason for it. Although a letter cannot discover the reason, it can give the customer a way in which they will benefit. For example, by paying now, they may continue to enjoy "open account" terms, or your credit rating won't be damaged.

Appeal to pride, honesty and security.

As a last resort, appeal to anxiety. These are factors that can be used to bring prompt payments.

Address the letter to an individual.

Direct it to the person who is authorized to initiate payments. Keep the letter short. Be as brief as possible, and cover only the most important points.

Get free information and advice on commercial collections.

The Importance Of Inventory Control In Accounting

Writen by John Cantrell

When you create products in your accounting software you should almost certainly be able to enter the cost, if so make the effort.

Without the cost your accounting software's financial statements will only show a fraction of the story.

The cost that you enter should, in most cases, be as close as possible to the average cost of that item that you have in stock. For example -

What is average stock? Let's assume that you have 1 bolt in stock and it cost you $1.00. You then go out and buy another bolt for stock and the cost has shot up to $2.00. You now have 2 items in stock that cost a total of $3.00. Therefore your average cost is $1.50 per item. When you sell one of these items the software will take into account that the cost of that sale was $1.50. Most accounting software systems will adopt this approach

There is a separate section towards the end that looks at the different types of product cost and what they mean.

Another important issue when setting up your products in your accounting software is closely related to whether there are re-order reports in your accounting software and a Purchase Order module that is linked to the re-order system, and you intend using either or both.

This issue basically deals with the ideal maximum and minimum stock that you wish to keep of a particular product. It can be done several ways but the most common would be -

Maximum and Minimum. Let's say you want a maximum number of the item in stock at any time of 20 and a minimum quantity of 10. When the stock level falls to 10 or below the system will tell you to order whatever quantity that takes it back to 20. The minimum level is also known as the re-order point.

In a similar situation your accounting software may only work to a maximum stock level in which case whenever your stock level falls below 20 it will show an order quantity to take it back to 20. "Your system may allow you to enter different levels based on seasons. For example if it gave you four separate seasons then you would need to give it four different levels. This method is more common in industries where there can be large fluctuations in sales depending on season as in summer and winter, as in Christmas and non Christmas periods etc.

If you operate in a country where you charge GST or similar and later claim this tax back then the cost of the product should be shown excluding the tax.

For example a bolt costs $5.00 plus $0.50 GST then show it as $5.00. This example applies to Australia If you are not sure about your own situation then check with your accountant.

Products Module - Additional Uses

You will have already set up your products in your accounting software before you started invoicing so that part should already be done except maybe for some fine tuning that you need along the way.

To reap the full benefits of a products module you will need to record into your accounting software your stock as you receive it.

One of the more important aspects of the products module though in any accounting software is that it keeps a track of your stock.

Many business people that I have met over the years have seen this as being of not much value to their overall day to day operation.

Before you arrive at this conclusion consider some of the possible benefits of keeping a stock control system from the following

Reflecting and recording the true value of stock and the cost of your sales can directly impact on your profit and, or, loss and, therefore, the amount of tax you pay at the end of the year.

You have various reports on hand in your accounting software to show what stock is running low, therefore you can re-order from your suppliers before you run out and possibly lose sales.

Stock control in your accounting software should show you which are your faster moving items and therefore where your money in stock should be more heavily invested.

Stock sales reports in your accounting software should tell you when you last sold a product therefore have you got stock (and maybe lots of that product) that is taking up valuable storage space which could be used for better selling items, or tying up valuable cash in slow moving items.

Is stock mysteriously disappearing? Is someone helping themselves without your knowledge.

Is product running passed its effective use by date or shelf life.

Are some of your products seasonal so are you stocking the right quantities for the peaks and reducing stock for the off seasons.

Is some of your stock shop soiled and not really in a condition to portray your business image.

Many accounting software packages will create re-order reports for you of what the system thinks you may need without you going out there and physically counting. By all means check the suggested order but let the accounting software take some of the grind out for you.

Some businesses can have an enormous amount of capital tied up in stock and it is important to make sure that this capital has been invested wisely. Could some of this value be liquidated to pay off some debt or to invest in new equipment and so on.

Look at what you have and, if necessary talk to your accountant.

I have been involved in all aspects of the accounting software industry for over 20 years. I run several websites that specialize in various subjects including http://www.diyaccounts.com.au that gives advice on all aspects of accounting software from choosing, setting up and using it. Amongst other sites that I run are http://www.sense-now.com that helps newbies understand what internet business will probably work for them and what won't. http://www.oumas.com.au is all about arts, crafts, hobbies, wine and beer making and much more.

Business Management Managing Bureaucrats In Washington Dc

Writen by Lance Winslow

About the most challenging organization to manage would be a bureaucracy in Washington, DC and it is amazing how many people attempt to do this only to fail miserably. It is truly amazing in fact how many people learn corporate business management and then come to Washington, DC to find out how screwed up that is and how unbelievable the blob of bureaucracy is and how deep it actually goes.

For those involved in corporate management and academia who attempt to teach MBA students how to run for profit organizations they need to realize that the bureaucracy in Washington, DC and the organizational format in which it operates is truly out of control.

It takes a lot of patience to manage the bureaucracy in Washington, DC and it is not the kind of ship that can be turned around on a dime either. Many people will blame the president of the United States or the presidential administration for the inefficiencies of the government in Washington, DC however this has been going along for decades prior to them coming into power.

It is not fair to blame the presidential administration for the inefficiencies of government and there is little or nothing and executive branch can do to turn around such a large ship in only four years. Not to mention the huge amount of self-interests that are involved in the government agencies. Managing the deadbeat bureaucrats in Washington, DC is no easy endeavor.

We should have academic management training for government bureaucracies, which work to streamline and make your government more efficient. Unfortunately academia can even keep corporations running smoothly and efficient so it is a wonder if they will ever be able to streamline our government or trained humans to run it efficiently.

I'm sorry if this article is too cynical for you; but since it is the truth it must stand and if you disagree with me you need to get a life and get real. The bureaucracy in Washington, DC is a friggin joke. Consider that in 2006.

Lance Winslow

Innovation Management Forced Into It

Writen by Kal Bishop

Creativity can be defined as problem identification and idea generation whilst innovation can be defined as idea selection, development and commercialisation.

There are distinct processes that enhance problem identification and idea generation and, similarly, distinct processes that enhance idea selection, development and commercialisation. Whilst there is no sure fire route to commercial success, these processes improve the probability that good ideas will be generated and selected and that investment in developing and commercialising those ideas will not be wasted.

Whilst there is a lot of lip service given to innovation, the reality is that it often results from competitors making significant gains – competitors who themselves have had to be innovative to challenge existing market leaders. Good examples are i) New Coke, forced into action when it lost market share to Pepsi and ii) IBM forced to change as a result of Microsoft.

An irony is that once innovative companies become less so when they have found their Golden Fleece. Finding a killer product forces a firm to concentrate on marketing and improving that product and results in a degree of parochialism and path dependency. Again, a good example is Microsoft – after Windows 95, innovation has been less significant; growth has resulted less from innovation and more from buying up innovative companies.

These topics are covered in depth in the MBA dissertation on Managing Creativity & Innovation, which can be purchased (along with a Creativity and Innovation DIY Audit, Good Idea Generator Software and Power Point Presentation) from http://www.managing-creativity.com.

You can also receive a regular, free newsletter by entering your email address at this site.

Kal Bishop, MBA

**********************************

You are free to reproduce this article as long as no changes are made and the author's name and site URL are retained.

Kal Bishop is a management consultant based in London, UK. He has consulted in the visual media and software industries and for clients such as Toshiba and Transport for London. He has led Improv, creativity and innovation workshops, exhibited artwork in San Francisco, Los Angeles and London and written a number of screenplays. He is a passionate traveller. He can be reached on http://www.managing-creativity.com.

Managing People For Performance

Writen by Graham Yemm

"People improve productivity, not organisations."

Managers who have had any form of training will be familiar with the idea of setting goals or objectives, and probably with the principles of appraising performance. With this in mind, why is it so many managers keep asking about how to motivate their staff or how to get more from them?

This whole area is a key differentiator of good managers and is a large part of what managers are being paid for! In this article I want to offer some ideas to help you become better at getting the performance you want from your teams. I will suggest some of the reasons why you, and other managers, perhaps do not do it very well and what the benefits will be when you begin to apply the principles.

Let us begin by stating the obvious – in order to manage people for performance you need to clearly establish what good performance is for each person and role. Too many managers think that this means just setting the goals. Not so, as you cannot manage those. Defining good performance can include what the outputs and results are – and how they are being achieved. That is the part you can manage. Recognise that managing for performance is an ongoing process and not an occasional intervention or snapshot.

Why it is not done well.

People do not understand what is needed to manage performance!

Managers assume people will work towards their objectives.

Too many managers think that money is all that motivates people to do what they need to.

Managers are too busy spending their time on the wrong priorities to manage for performance.

Organisations think that because they have an annual appraisal process that they are managing performance.

If you rely on an annual appraisal (or review) as a mechanism for setting objectives and reviewing how people have performed, what problems does this encourage? Are the objectives meaningful? Do they stay in the forefront of peoples' minds? Do they stay relevant throughout the year? How are they monitored throughout the year? When you come to reviewing them, how valuable is the conversation?

What to do.

Firstly, everyone should have clearly defined standards of performance and/or key performance indicators (kpi's). These are same for all those doing similar roles and provide a baseline for performance. There are two types of these – the quantitative and the qualitative. The former are more straightforward to do as they will involve numbers, eg. number of calls handled per day, time to respond to queries etc. The latter are more challenging because they require some thought in order to clearly define the standard in a behavioural way which removes most of the subjectivity. This can refer to quality of work, appearance of someone's workplace, answering the phone or following corporate standards etc. When people are working to these kpi's they should be in a position to deliver the performance you want.

Although these kpi's need to be clearly outlined and understood by all involved, the key to managing for performance is to follow the Pareto principle and identify which 20% are the ones which contribute to 80% of the outcomes. These are the things you need to manage. You want to be able to monitor them, to revisit them and raise the standard in order to get even higher performance.

The other thing people need to have a clear goals or objectives. These should be clearly stated, maybe following the SMART principle. (Specific, Measurable, Achievable, Realistic and Time bounded.) The measure can be either numeric or behavioural, which means clear definitions. Goals help in many ways, especially as they link to many of the models of motivation and the fact that a sense of achievement is a powerful buzz for most of us.

When setting goals for people in the workplace, especially if you want to manage performance, think about the timescales you aim for. Giving people 3 or 5 goals at an appraisal with a long timescale will not necessarily provide much drive or motivation. To make them meaningful consider setting several goals with different time deadlines, mainly short and medium term. When they are completed set more – and the process becomes more dynamic. It also enables you to reflect any changes in the business and ensure the relevance of the goals.

How to do it.

Make sure you think of this as a key priority – so give it time! Make sure that the kpi's are clearly stated, written down and everyone has a copy.

When you set the goals with your team members and they have agreed, get them to develop an action plan for how they will achieve each one. Have them do it, and give you a copy within 48 hours of setting the goals. A simple way of doing this can be to use a simple diagram such as a stairway - and we can happily send you a sample.

Ask them to identify the key steps to take in order to move from "now" to the goal. Between you, agree the timescales for the key stages and also discuss any help required and possible problems. Once this is all agreed and finalised, you will have a copy and the team member has theirs. Now is the first key action for you – put those dates in your diary to make sure that you will sit with the team member and review their progress. This is an "A" priority activity and should not be moved!!

As your team members work through their action plans and you have your regular reviews, you will be monitoring their progress in a timely and effective manner. These reviews are almost mini-appraisals and by carrying them out at the agreed times you will make life easier for all concerned when you have the annual appraisal, because it will be a consolidation of these meetings.

During these reviews ask for what needs to be improved, what has gone well and what is going to happen next. Talk about the kpi's which are relevant to their plan and make sure they are meeting these. This monitors and manages for performance. Provide feedback (on performance or behaviour, not personality) whether you have to criticise or reprimand or you can praise. By having these regular reviews, you can avoid the management fault of not telling people how they are doing!!

When the goal is achieved, carry on and set the next goal, get the action plans – and continue as before. Not only are you managing performance, you are helping your team to feel more involved, more successful and more motivated. Remember, people just want to know what is expected of them, be given the support to do it and then told how they are doing. What it requires from you is to make time to have the regular meetings with your team, after all they are the ones who provide the performance you need. Give them your time and they will give you the performance.

Graham Yemm is a consultant with 20 years of experience. He runs a Solutions 4 Training Ltd, a UK based consultancy and works internationally. He has worked with many organisations helping them to develop their processes and their managers to improve performance. He can be contacted at Solutions 4 Training or +44 1483 480656.

Performance Reviews That Actually Improve Performance

Writen by Jan B. King

Employee performance reviews are one of the most dreaded tasks by most managers. It is hard to win here – you can never say enough good things, and one word of criticism is generally the only thing they will remember.

Taking the easy way out and just documenting the positive will cause you a lot of trouble if you ever need to fire the employee.

The only way this ever gets better is with a lot of practice, and a pretty thick skin. Think about it this way: a bit of feedback that no one else has the guts to give a poor performer might turn around their whole career. Deliver the negative – you have to – but make sure the employee knows there are things they can do about it. For more effective performance reviews, prepare at the time of hire by giving all employees copies of the review forms you use in their orientation packet. An employee who knows how she will be reviewed will direct his behavior accordingly from the beginning of his employment and will probably do all she can to be sure he has good reviews.

In fact, an employee should have copies of all survey and review material that he will encounter over the course of his employment. The perception is what you measure is what you care about. Give a description of how often you use each evaluation tool and how. This is particularly important if your company does 360 degree performance reviews. The purpose of reviews is not to trap employees, but to give them the tools to do their best for the company. Accordingly, your review forms should be created very carefully and should cover actions specific to his skills and responsibilities as well as his people skills with peers and subordinates.

I always do reviews in two parts. The first part is for the employee to fill out two weeks ahead of the actual review meeting. It asks questions like these:

• What could I do to make your work more productive?

• What equipment or training do you need to do your best work that you don't have?

• What could the company change (or add or delete) that would help you do your work better?

• What skills and abilities do you have that you think are underutilized?

• Any other comments or opinions you would like to express?

I have always found that getting an employee to express their feelings first, not only lets them know that you really are interested in their feedback, it also often results in their letting you know what they think their weaknesses are – meaning you don't have to be the first to bring these things up.

Most employees really want to do good work. And if you think an employee isn't really there to do good work, you shouldn't be reviewing them, you should be letting them go.

About The Author

Jan B. King is the former President & CEO of Merritt Publishing, a top 50 woman-owned and run business in Los Angeles and the author of Business Plans to Game Plans: A Practical System for Turning Strategies into Action (John Wiley & Sons, 2004). She has helped hundreds of businesses with her book and her ebooks, The Do-It-Yourself Business Plan Workbook, and The Do-It-Yourself Game Plan Workbook. See www.janbking.com for more information.

jan@janbking.com

Pull An Elastic Band Too Far It Snaps

Writen by Carole Spiers

Building a resilient workforce to manage pressure effectively

'Resilience' is the new buzzword for the process of adapting well in the face of adversity, trauma, tragedy, threats or other 'stressors'. It's how we 'bounce back' from difficult situations. And fortunately resilience isn't a characteristic that we either do or don't have. It involves behaviours, thoughts and actions that can be learned and developed.

Studies have shown that the most important factors in building resilience include:

• having caring and supportive relationships

• the ability to make realistic plans and take steps to carry them out

• possessing a positive self-view

• confidence in your strengths and abilities

• good communication skills

• being able to manage strong feelings and impulses

• strong problem-solving abilities

So if these are the qualities we need to increase our resilience as individuals, what lessons can we learn in terms of the characteristics and culture required to build a 'resilient' organisation?

Building resilience by reducing stress

Because our working lives are becoming increasingly stressful, in November 2004 the Health and Safety Executive announced its new Management Standards for work-related stress, which are designed to help ensure that organisations address key aspects of workplace stress (or 'risk factors') including demands, control, support, relationships, role and change. For each risk factor, the Management Standards include a description of what should be happening in an organisation (or 'states to be achieved') in order for the standard to be met. 'Demands', for example, includes issues like workload, work patterns and the work environment. States to be achieved are that:

• The organisation provides employees with adequate and achievable demands in relation to the agreed hours of work

• People's skills and abilities are matched to the job demands

• Jobs are designed to be within the capabilities of employees

• Employees' concerns about their work environment are addressed

The guidance centres around carrying out a risk assessment for stress (this is also a legal requirement), the results of which should highlight problem areas that need to be addressed in order to reduce (or ideally remove the causes of) stress.

But while the Management Standards provide a foundation for stress reduction, there are many other actions that organisations should also consider in order to increase its resilience, some of the most important of which include the following:

Commitment to stress management

A Stress Policy should be implemented in conjunction with staff liaison groups, and commitment should begin at the most senior level and be cascaded downwards. There's little point in introducing stress management training for line managers, for example, if senior managers have little or no commitment to minimising or eliminating excessive pressure within the organisation.

Recruitment and selection

When recruiting it's important that both the organisation and applicant understand the requirements of the post and potential pressures involved. One conclusion of a landmark Court of Appeal case in February 2002 was that 'there are no occupations that should be regarded as intrinsically dangerous to mental health'. It's therefore essential to combine an appropriate selection policy with sufficient job-specific and practical training - to enable individuals to carry out their jobs within their capabilities and with the minimum of stress.

Management style

Effective communication is often neglected in management training, yet it's essential to good management – by reducing misunderstanding and the opportunity for discontent.

Effective communication includes active listening skills - engaging with the person you're listening to and responding appropriately. Good communication at all levels will help ensure that everyone in the organisation can work with confidence – reducing the opportunities for stress to develop.

Work-related training

Many organisations face sudden changes in work demands, and employees need the necessary training and experience to meet the ever-increasing demands made on them. Examples include training in resilience, time management, communication skills, etc. Training in communication (and particularly active listening) skills is essential to help ensure that managers are aware of their team members' problems and in a position to offer early interventions to resolve these.

Stress awareness and stress management training

For stress management to become integral to corporate culture, initiatives must be introduced that will raise awareness of work-related stress. In particular, recognising the early warning signs and symptoms should become integral to management strategy. This can be achieved by monitoring sickness absence (especially short-term), carrying out confidential staff surveys, observing working relationships (especially team dynamics), and questioning changes in attitude and behaviour.

Stress management training can then build on this by teaching employees about the nature and sources of stress, its effects on health, and the personal skills needed to reduce it. Training may also help reduce stress symptoms such as anxiety and sleep disturbances, and has the added advantage of being relatively inexpensive.

Employees also need to know how to raise concerns about work pressure (informally and formally) – for example by speaking to their supervisor or manager, through an existing grievance procedure, or under a dedicated stress policy. The key is that employees should find it as easy and unthreatening as possible to speak up about stress at work, and should be able to do so without fear of recrimination or any other negative outcomes.

Mediation and negotiation

In mediation, the parties in a dispute express their views on a contentious matter, establish common ground, and move towards a solution that's acceptable to all. In negotiation, the aim is to reach agreement on a course of action that satisfies at least some of the claims of both sides. Access to mediation and negotiation are therefore vital in enabling workplace disputes to be resolved before they escalate into stress-inducing or bullying behaviours which can be much more difficult to resolve.

Rehabilitation back to work

Where employees have been forced to take time away from work as a result of stress, their rehabilitation back to work needs to be carefully managed. For those employees who require specialist support, Employee Assistance Programmes and counselling services are a vital component in employee well being.

Employee counselling

In February 2002, the Court of Appeal ruled, inter alia, that 'any employer who offered a confidential counselling service was unlikely to be found in breach of duty of care, by the courts'. Counselling should therefore be regarded as an intervention to be included alongside other supportive services available to employees.

First contact counselling teams

These teams are made up of volunteers (from the organisation) who are trained in basic counselling skills, and receive ongoing training and supervision. They're often used as a 'first contact' for employees, for whom they can provide an active listening service and help to deal with work-related problems such as stress, bullying, change and mediation.

Employee Assistance Programmes (EAPs)

An EAP offers employees access to a confidential counselling and information service, and to be effective must have the backing of senior management. However, although it can play an important role in helping to deal with stress-related problems, it should not detract from the importance of line managers actively listening to their staff. Nor must an application to the EAP be misinterpreted by managers as suggesting a lack of confidence in their own ability to deal with stress-related issues.

What shouldn't you do?

Depending on the nature of your organisation, concierge services, or complementary therapies such as reflexology, yoga, massage etc, may also be of benefit. Typically, however, they should be incorporated within an holistic approach to reducing work-related stress and increasing resilience – rather than being expected to resolve underlying problems on their own.

If an organisation introduces these types of 'stress-busting' initiatives without a solid foundation of stress management training and employee counselling support, they risk adding to problems of work-related stress - through frustration, disillusion, and a belief amongst employees that the true causes of stress aren't being taken seriously, and the organisation is simply paying lip service to the problem.

Ultimately, reducing workplace stress and building resilience is largely a matter of common sense and good management practice, and simply requires employers and employees to work together for the common good. Both share a joint responsibility for reducing stress – which, when this is successful, can help employees to enjoy their work more, and businesses to thrive as a result.

For this to become a reality, organisations need to work towards the creation of a 'healthy', resilient work culture – one where there is an intelligent two-way dialogue between managers and employees; where concerns can be raised in the confidence that actions will be taken; and where everyone in the organisation recognises stress as an unnecessary and unacceptable drain on creativity and resources. Or to put it another way, a culture where healthy ways of working have become so ingrained that the need for the Management Standards will no longer exist.

Carole Spiers Group

International Stress Management & Employee Wellbeing Consultancy

Gordon House, 83-85 Gordon Ave, Stanmore, Middlesex. HA7 3QR. UK

Tel: +44(0) 20 8954 1593 Fax: +44(0) 20 8907 9290

Email: info@carolespiersgroup.com www.carolespiersgroup.com

If you would like to book Carole as a keynote speaker or conference chair at your next conference - check out www.carolespiersgroup.com/mediaenquirysheet.php

About The Author
Carole Spiers MIHE MISMA Carole Spiers combines three roles of Broadcaster, Journalist and Corporate Manager in the challenging field of stress management and employee wellbeing. Over the past 20 years, she has built up her corporate stress consultancy Carole Spiers Group (CSG), with prestige clients such as Sainsbury's, Rolls Royce and the Bank of England. Carole is frequently called upon by the national and international media and provides keynote presentations on stress-related issues. Carole was instrumental in establishing National Stress Awareness Day™.

Microeconomics Perfect Competition

Writen by Aaron Schwartz

Perfect competition is a microeconomic model, to the most common traits of which belong the following: - a large amount of small producers (sellers) of a homogenous product; - a large amount of consumers; - both consumers and producers can not influence the price on their own; - mobility of all resources; - operational costs are zero; - equilibrium price (determined by the intersection of supply and demand curves); - lack of barriers to enter or exit from the market.

Under conditions of perfect competition the price is equal to marginal revenue and, in its turn, marginal revenue is equal to marginal costs. When a company loses money, then it is time to decide whether to continue operating on the market or to shut down. In order to make a right decision it is necessary to analyze total revenue and total costs (fixed and variable). As far as the fixed costs are equal whether the company operates or shut down, variable costs are equal to variable. So if the price per product unit is less than the costs per product unit it means that total revenue (quantity of product multiplied by price) is less than total costs (fixed plus variable) and the company should shut down. Of course, if total revenue is larger than total costs the company should continue operating. When total costs are equal to total revenue – it is called the shut down price and it does not matter for company whether to shut down or operate further.

In the long-run companies receive zero economic profit and thus other companies are not interested in entering the market (it means that market participants completely satisfy the demand). But if the demand suddenly increases – the prices would increase too and thus new participants would enter the market until the price won't become equilibrium. In practice, perfect competition does not exist as others. This model is abstracts and describes the market in general terms. As the most common example there is used local agriculture sector: there are many producers and consumers, the price is close to equilibrium, there are not enter or exit barriers; but operating costs can not be zero because it takes time, efforts and some costs to sell the product; resources are not absolutely mobile.

I would like to introduce my own example and explain why do I think it is quite suitable one: e-trading. Trading through the Internet is very popular now – there are many sellers and consumers, there is no any serious obstacles or barriers to enter or leave the market, if to take more precise example – books e-trading – than the product becomes quite homogenous, the price level is quite close to equilibrium and producers can not seriously influence it nor can customers, resources are quite mobile (especially information – there are plenty of resources in the Internet), transaction cost are quite low (but not zero of course).

If the average price of the product, book in our case, is larger than average variable cost, costs on selling and delivering book in our case, then the company receives profit and it can be said that it operates successfully (in the long run there will occur incentives to enter the market); inside out some companies, most probably, would leave the market and may be try to sell something else.

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Finally, I would like to conclude that perfect competition is quite abstract microeconomic model, which describes market under the certain conditions (which can not be absolutely met in practice, but can be met close enough). But this model gives good economic basis for firms to think in advance about their operational activities or business decisions.

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Ten Top Ways For Managers To Motivate Their People

Writen by Martin Haworth

So to help start the ball rolling, here are ten top ways to get your people motivated. Ten small steps for you to start with.

1. Recognise them
   Recognise your people as people, by saying 'Good Morning', checking that they're OK and taking a little time with them.
   
2. Challenge them
   People need stimulation at work, so to encourage growth, build on their achievement of one skill, with the introduction of another. Instruct, coach and then delegate the new task.
   
3. Encourage fun
   Whilst it is a fine line between having fun and anarchy, it is worthwhile spending the time to understand, define and explore that boundary. Having fun is a great way to build team spirit. Checkout where everyone's 'fun' threshold is, respect it and then have a lot of laughs.
   
4. Listen - a LOT!
   Listening to your people builds rapport and a bond which in itself is powerfully motivational.
   
5. Encourage mistakes
   By stretching themselves, people sometimes get it wrong - and sometimes make gloriously powerful 'inventions' to move your business forward. By creating an environment where mistakes are not wrong but encouraged, you will find creativity soars. Even mistakes where things go wrong and cost money should not be wasted. Create value from these by really learning for the future...as Henry Ford once said "Bring me people who make mistakes" Make it a safe place!
   
6. Say Thank You
   It is surprising how much reward we all get from being recognised. The humble (if rare in some organisations), "Thank You" is a simple, yet very powerful way to recognise the efforts every one of your team puts in every day. Think of the last time someone said thank you to you and how great that made you feel.
   
7. Be Understanding
   This tip needs careful and skilful management and great managers can do it. Understand that your people are real people with emotions and experiences which impact on them. Being sympathetic to their needs, occasionally and not so often that it impacts your business, will bring great rewards and commitment. Do set ground rules for yourself which allow 'understanding', yet enable you to draw the line clearly and firmly when you need to. Be consistent and fair.
   
8. Get Out of Their Way
   By allowing your people to carry out 'the boss's work', you strongly build self-belief in your people. Be fair and don't just delegate the 'rubbish' jobs, but some of your fun jobs as well (and remember to choose individuals whose strengths match the task).
   
9. Share How You are Feeling
   By being a partner with your people and showing that you are a real person too, you will encourage others to take big steps with you. This works because understanding that you share hopes, fears and challenges in common with your people makes them feel a committed part of you, as well as your business - this is a powerful message which they share
   
10. Reward
    Last but not least, pay appropriately. Whilst if you pay brilliantly, yet miss out 1-9 you may get short-term gain, it is unlikely to maintain motivation for more than a while. Conversely, if you pay badly, you may lose people because they simply can't afford to stay with you, however great it is. Striking a balance is the ideal. Don't forget to recognise with some fun rewards and as in No. 6, say thank you a lot. It will pay dividends and is free!
    

Martin Haworth is a Business and Management Coach. He works worldwide, mainly by phone, with small business owners, managers and corporate leaders. He has hundreds of hints, tips and ideas at his website, http://www.coaching-businesses-to-success.com/motivation.html (Note to editors. This article may be edited for use in your publication or newsletter as long as a live link to the website is included)

...helping you, to help your people, to help your business grow...

The Impact Of Multinational Enterprises

Writen by Jonathon Hardcastle

To survive, a company must satisfy different groups, refereed as stakeholders. These include stockholders, employees, customers, and society at large. In the short term, the aims of these groups conflict. Stockholders want additional sales and increased productivity, which will result in higher profits and a higher return on investment. Employees want additional compensation. Customers want lower prices. Society at large would like to see increased corporate taxes or corporate involvement in social functions. In the long term, all of these aims must be achieved adequately or none will be attained at all because each stakeholder group is powerful enough to cause the company's demise.

Although the management teams of multinational enterprises (MNEs) must be aware of these various interests, they serve them unevenly at any given period. At one time, most gains may go to consumers; at another, to stockholders. Making necessary trade-offs is always necessary at a corporation's domestic environment. However abroad, where corporate managers are relatively unfamiliar with customs and power groups such as trade unions, the problem is choosing the best alternative can be compounded; this is particularly true if dominant interests differ among countries.

The effects of MNEs on growth and employment are not a necessarily a zero-sum game among countries. Classical economists assumed production factors were at full employment; consequently, a moment of any of these factors existing abroad would result in an increase in output abroad and a decrease to that at home. Even if this assumption was true, the gains in the host country might be greater or less than the losses in the home country. Thus, the argument that both the home and host country may gain from Foreign Direct Investment rests partly on the assumption that resources are not necessarily fully employed and partly on the industry specific and complementary nature of capital and technology.

The relationship between multinational enterprises (MNEs) and societies has generated so many allegations and controversies that it is impossible to examine all of them at once. A number of them deal not so much with whether international business should take place, but most of them rather focus on certain practices. But in theory, host countries may take completely restrictive or laissez-faire positions toward MNEs. In actuality, their policies fluctuate over time but are seldom completely restrictive or completely laissez-faire. Currently, countries such as Bhutan and Cuba are close to the restrictive end, and countries such as the United States and the Netherlands are near the laissez-faire end of the continuum. However, countries between these extremes have policies with varying degrees of restrictions as they attempt to attract investment and receive the most benefit from them.

Jonathon Hardcastle writes articles on many topics including Investing, Finance, and Business

Finding The Gold In A Pile Of Business Cards

Writen by Casey Dawes

Do you have piles of business cards from other people? Maybe they are neatly arranged in a Rolodex, cardboard box or business card case or in small piles around your office, in your briefcase or in the pocket of the suit you wore to the last event. Hint: they aren't doing you any good there. But how do you take advantage of the gold that's in those piles?

The key is to develop a system that makes sense to you and that you can mine for information when you need it. So dedicate an hour or so and collect all your cards from various sources. As you go through them, put them into piles. I'm suggesting some categories below, but you may also come up with some of your own.

I-Don't-Know-Why-I-Have-This-Card Pile: When you look at a card and you have no idea why you have it and you can't remember the face behind the card, it's time to dump it in the recycle bin. If it is someone you are meant to work with, they will come back into your life.

Referral Pile: These are people you have purchased goods or services from that you might recommend to other people or use again. By referring others, you build good will both with the person you referred and the person whom you referred. At some later date you might sub-categorize them into types of service, or just keep them in alphabetical order. It's important that it works for you.

Current Customer Pile: These are active customers who are using your goods and services. They are part of your gold in these piles. You want to keep these cards front and center in your mind, reaching out to these people on a regular basis.

Past Customer Pile: This is another part of the gold in your business cards. They used your services once; why didn't they come back? It might be a good question to ask. These past customers are also potential future customers. This stack should also be available to you on a frequent basis.

Prospects: Be careful that you don't confuse prospects and contacts. A prospect is someone with whom you've had more than one brief discussion. You've had several conversations and feel that they could definitely benefit from your services. This pile is also part of your gold -- people to keep checking in with regarding how they are doing.

Contacts: Everyone else is a contact. To keep your pipeline full, it's good to keep moving these folks from the contact pile to one of the other piles. Pick a few to check in with each week, sign them up for your newsletter or your blog feed. Remind them periodically that you are around and begin to develop a relationship with them.

So there you have it! A quick few hours work and you have turned business cards into gold. Rumpelstiltskin would be proud!

Casey Dawes is a coach, author and speaker who helps smart women reclaim their power over their lives and businesses. Learn more about Casey by visiting her web site: http://www.WiseWomanShining.com.

Executive Esp A Pathway To Success

Writen by Jeremiah P. Huck

We all have psychic abilities that we use daily, although most of us don't even realize that. The full study of this issue would take many books, and years of experience to grasp all the factors. Since we can't do that here, we can still focus on applying these skills to making informed business decisions. Those of us making constant business choices, effecting staff, ethics , health, and the botton line ,need all the data we can get our hands on. So these tidbits are designed to help you use your natural abitities, and to improve your business situation!

First of all, there are many, many management styles. It is in your best interest to honestly evaluate your personality and your personal approach to making choices and running your business. This gives you a baseline to start from when adding ESP into your operating formula.The ancient Greeks said " Know Thyself".

Some of us are very mental in perspective, some emotional, and others more physical. These basic personality factors often don't change much during our lifetime. We tend to keep processing life from the same angle. When we pick up psychic data from outside this base personality, we tend to ignore it. It's not comming from our comfort zone.

In the business world, what we ignore can create lost potentials or major problems. What we tune out doesn't really go away, it just stays out of our awareness. So our business is effected but we never get to know it, it stays in our blind spots.

When working in a group situation this blindness is compensated by others around us, often with different main personality types. They can pick up what we miss. This works fairly well, but......

Frankly, at the executive level you often must make choices by yourself. This leaves you open to your limitations. Sure you can get data, but still the final choice is usually yours. Remember that both your strong and weak functions tend to stay that way for life. So you will tend to always focus on some things while ignoring others.

Opening your natural ESP abilities can present a personal challange. As you pick up data from your comfort zone, well...no problem. But when you get psychic information from your weaker traits, again you will want to tune it out......you will tend to feel it as a stress.

So, if you want to include data from a broad range of psychic information..even beyond your comfort zone, there are many techniques you can use......

Realize that stress can be a sign that you are aware of something that you would rather ignore.Then use stress busters to help you handle that. Try to meditate each day, in a quiet place... and see what happens. If stress kicks up try to breathe through it, so you can stay focused on what you are processing.

It takes great courage to trust your whole self, and all your awareness. Don't push yourself beyond your limits, but try to broaden your scope, little by little.

The real test is to see if you are willing to apply your ESP gained data into your daily business planning.

Jerry publishes an online magazine dealing with shamanism and holism as they apply to life and business. http://www.jeremiahhuck.workzsites.com

Proven Secrets To Keeping Your People And Increasing Your Profits

Writen by Lorraine Pirihi

Why are people changing jobs so quickly these days?

Here are a few reasons why:

• They have a boring job therefore they feel they are not achieving anything.

• They have no leader to follow.

• They feel unappreciated.

• They work long hours and want a life.

• They are not paid what they are worth.

• The above reasons are not taken from any figures or facts stated in publications and general media. This is what the people themselves tell me. They are the words from the coal face, real people…managers, personal assistants, administrative staff, sales people; regular run-of-the mill people.

It doesn't take much to retain valuable people and one of the easiest ways is to offer flexibility.

Where is the Family Friendly Workplace?

One of my clients - John - who is a manager in a large organisation - was telling me that his wife Mary, an accountant recently changed jobs, from working part-time in a suburban practice to full-time in the city. She did this as a career move as she couldn't find stimulating work part-time in suburbia. (I'm sure many women can relate to that).

Having two children - 7 and 4, she leaves for work when they're still asleep in the morning and arrives home around 6.30 p.m. at night.

Luckily her husband works locally and can handle the morning care and has his in-laws do the afternoon care. His wife is already feeling stressed, tired and guilty because she cannot be around for her kids.

How easy would it be for an employer to offer more flexibility say 3 days a week start at 10.00 a.m., 3 afternoons finish at 4.00 p.m. Mary wouldn't mind a cut in her pay packet - she just wants to balance her life.

At this rate, Mary will not remain too long with her current employer as she will find the long hours will take their toll. It's even harder for the single parents. Not to mention the long-term effect it has on the person and their kids. A grumpy, tired and stressed person doesn't make for a good productive employee or parent.

Think Laterally

Why isn't there more flexibility in the workplace? Just because people 'start' at 9.00 a.m. and 'finish' at 5.00 p.m. (I know some of you work longer hours), doesn't mean people actually 'work'.

In fact 80% of the day is generally non-productive. To find out exactly where your time goes, fill in a timesheet for one week (email us and we'll send you one of ours). Record what you have done for a full working week and you will be amazed where you spend your time. In most instances you will find your time is taken up by various interruptions, many of which can be avoided,non-productive meetings, and activities which generally are a waste of time.

If you're one of those people who have difficulty saying 'no' to people you will definitely have major issues managing your workload.

Working in a noisy open plan office will also decrease your productivity.

My Former Life

Many years ago I had a stint working as a postie, starting work at 6.00 a.m. each day. It was a great job. In fact it was the longest 'job' I had held - 3 years. I left when I was 6 months pregnant with my first child.

As a postie, the quicker you worked, the sooner you went home. As soon as the mail was sorted you would go out on your round, do the deliveries come back and go home. Now that was an incentive to work as quickly as possible.

In the '9 - 5' workplace you have to be present and yet there's no incentive to actually work as quickly or productively as you can.

Solutions For The Employee

If work is getting too much for you to handle and the hours are getting you down, speak to someone who'll listen, offer some realistic solutions. Do you need to learn how to get organised? Do you require assistance with the workload? Do you need to learn different skills for your role? There's no harm in asking. If they won't listen it's up to you to choose what action you will take… whether to stay or go.

Solutions For The Employer

Ask your people how they really feel and work out a solution. Just because they haven't told you about their concerns doesn't mean that everything's fine. If you have people who consistently work long hours then you will definitely have a major problem.

You want your people to be 'on the ball', alive and energised so they are valuable to your organisation. If they do not achieve a reasonable balance between their work and home life then at some stage they will break down. They may take extra time off work due to the pressures they are constantly under or eventually leave.

The Final Word

Don't turn a blind eye. Get proactive with your people. Communicate regularly with them, find out how they are managing, listen to what they have to say and where required take action.

To retain your valuable employees you have to work at it, otherwise you run the risk of not only losing them but all that time and money you've invested in them.

About The Author

Lorraine Pirihi, principal of The Office Organiser is Australia's Personal Productivity Coach.

Lorraine specialises in working with businesspeople showing them how to dramatically boost their productivity, reduce the stress and the mess in their lives and have more time for enjoying their life. www.office-organiser.com.au, lorraine@office-organiser.com.au

What Is Crm Customer Relationship Management

Writen by Casey Gollan

CRM stands for Customer Relationship Management (CRM).

It's hard to find a definitive definition of what CRM means. So I'll outline the broad meaning and then give some examples.

You may have heard of the terms CRM and Customer Relationship Management in regards to software. Well CRM is not just a piece of software. It's more than that.

The CRM Customer Relationship Management software is a vital component, yet the whole business needs to understand CRM Customer Relationship Management in all departments and functions of the business and behave appropriately to make CRM Customer Relationship Management work.

An effective CRM Customer Relationship Management will include methodologies, strategies, software, and web-based capabilities that help an enterprise organize and manage customer relationships.

Why use CRM Customer Relationship Management?

CRM Customer Relationship Management is used to help businesses (a.) understand their customer, and (b.) understand their customers' wants and needs and (c.) help the business serve them more efficiently and effectively

In turn this will help the business to improve customer satisfaction, increase staff productivity, slash operational costs and maximize the effectiveness of each customer interaction.

Let's talk about these three different areas.

CRM Customer Relationship Management to understand the customer

In a CRM Customer Relationship Management application and approach a user will collect as much information about a customer that they can. They'll collect names, addresses, contact numbers, age, sex, number of children etc. A CRM Customer Relationship Management process does this to, amongst other things; help 'classify' their customers.

A benefit of a CRM Customer Relationship Management system is that a user can help analyse which types of customers are best for their business.

Then once they know what customer 'types' are best they can then market to them in a 'personal' way – using the information gained about them.

CRM Customer Relationship Management to understand the customers wants and needs

As information is collected about the customers' personal life, information is also collected about their buying habits and stored in CRM Customer Relationship Management software.

Humans are creatures of habit. By analysing the information collected about the customer and their buying habits the CRM Customer Relationship Management can be used to help the business identify what the customers would most likely want or need to buy.

For example, if your CRM Customer Relationship Management information lets you know that your best customers typically like buying 'red apples' in November for an average sale price of $15. You can prepare a marketing approach that is sent out to them prior to November that will steer them towards buying $30 worth of apples.

The customer sees it as useful because it's something they like to do at that time of year, and you're offering them a reminder and perhaps an incentive to buy more. The business benefits by structuring the offer to increase the sales value and therefore increasing the profit return.

CRM Customer Relationship Management is useful to also target new customers

Information gathered in the CRM Customer Relationship Management will help the business to target more of the preferred customers. An analysis using CRM Customer Relationship Management software could tell the business, for example, that single males between 30 to 35 years of age that earn between $50,000 and $60,000 are the best type of customer for the business.

Knowing that information from the CRM Customer Relationship Management, the business can then hire a list from a direct mail list broker of all the single men that fit the description and target their marketing towards them.

The CRM Customer Relationship Management activity of improving the relationship with the customer is to help keep the customer more loyal to the company and thus improve the profitability of the business.

CRM Customer Relationship Management to help efficiency and effectiveness of business

A good CRM Customer Relationship Management application will help the business to become more efficient and effective.

The business can become more efficient because if a customer contacts the business, within seconds the customer service representative can produce the customers file. This will tell the employee all about the customer and their interaction with the business.

So a CRM Customer Relationship Management saves time for the business and is able to help the employees deliver high levels of personalised service.

A CRM Customer Relationship Management software program and approach can help the business become more effective. An example would be marketing.

Knowing all the information about the customers, the marketing strategies can be targeted towards the customers in a personal way. Thus marketing to a defined target market with a past history the potential of improved results is far greater than marketing to a 'cold' list.

This article should only be viewed a very broad overview of what CRM Customer Relationship Management is.

On this website you'll find more detail and resources to help you understand and use CRM Customer Relationship Management for your business.

Copyright © 2005 by Casey Gollan. All Rights Reserved

Casey A Gollan, The Business Growth Specialist for CRM Software Center - CRM Software Center- All the general information and resources for everything CRM - Customer Relationship Management. Visit http://www.crmsoftwarecenter.com for more articles and info on CRM.

Lean Leadership Troubled Waters Require Capable Leaders At The Helm

Writen by Larry Cote

Canada's lean leaders need to look beyond the horizon and chart the future. In stormy times, true leadership skills emerge.

The rumbles on our economic outlook are troubling. The dollar is still up, foreign investment, profits and sales are down. Low cost Asian competition is eroding our market share. Financial scandals and corporate governance issues keep flaring into the headlines. Disasters such as terrorism, possible pandemics, and war continually reshape the world in which we work and live. There are so many "big" global issues, so much apparent chaos, that our minds are often distracted from the day-to-day jobs we do leading our businesses.

The world as we know it has changed - both economically and socially. What hasn't changed however, is the customers' insatiable appetite for more value, faster delivery and better service.

Most business leaders are eager to return to their pre-recession profits and growth. But even when the economy is robust again, we may find the bounce back to previous profit levels is not a "slam dunk" in spite of a revived and thriving economy. During the past couple of years, while business executives have been making short-term decisions to survive, customers and markets have continued to change at a rate never seen before.

If we turn our worries and blame for new shortfalls to the currency fluctuations and Asian competition, it starts to sound like the same old "blame game" with different players. It's easy to fly high on adrenaline when you look at these global issues and threats. But, for a moment, let's step back and look at our business challenges from a lower altitude and a more local focus.

In doing this, we need to disregard the factors affecting our businesses that we can't influence and begin to look at those we can. The ones we have little or no influence over are things like the recession, currency fluctuations and major disasters. The area we can influence and affect is our own long and short-term strategies for transforming our companies, making them more competitive and customer focused. The bottom line is let's stick to our "knitting," do our jobs and focus more on our roles as organizational leaders.

In North America we've proven that we can provide products and services competitively through innovation, inspired product development and comprehensive efforts to eliminate waste. But it does require a prolonged and concentrated effort. Leaders aren't hired to cry wolf when chaos threatens. The terms of employment are to use our leadership talents and drive improvements that will be seen and sustained on the bottom line.

We need to readjust how we use these talents and not be distracted by global factors, which are out of our control for the most part. We must accept the role we were hired for and focus on the business operations where we can have a real impact.

We are leaders, so let's lead. Most activities, whatever the company, can be classified as waste of one kind or another once you start to see it. As leaders, it is our responsibility to set the direction and motivate our staff to understand how to remove this waste properly rather than making incremental or point improvements.

This requires seeing and analyzing the process from end to end, not just at points or segments of the process. That becomes your road map to success.

Beneficial change happens in a very structured, sequential and organized fashion. Your teams aren't caught running around chasing low hanging fruit while creating what we call "exciting chaos." When everyone rushes reactively to improve their individual areas they feel virtuous, after all they are helping the company, aren't they? In fact, they are only improving their areas or departments, often at the detriment of the entire process. It's your leadership and your measured future state plan that will bring order to chaos. Reactive flurry kills profits faster than any big external threat!

Striving to improve our own competitiveness by providing customers faster and better products or services will accomplish more than worrying about the next global crisis looming just around the corner. The only futures game we need to be in is the one that cuts waste so the customer sees more value.

Science tells us that nature likes order - it's human agents that generate the chaos. There are things that we can control - so let's get busy and do it!

Larry Coté is well known for his penetrating analysis and creative energy. He was with the Lean Enterprise Institute in Boston for almost two years as C.O.O./E.V.P. He was the Founder and President of the Lean Enterprise Institute Canada.

Over the years, Larry has worked with 100's of companies at various stages of their Lean journey in many different business sectors. Larry has expertise in Toyota Production System concepts, diagnostics and assessment of Lean readiness. He works with the corporate leaders to develop effective plans for transforming organizations using Lean and adapting it to their particular culture.

Larry Cote
President
Lean Advisors Inc.

Lean Advisors Inc. (LEAD) provides Lean Training And Lean Implementation support to organizations of all sizes and sectors including healthcare, office, service, manufacturing, mining, aerospace, food processing, high tech.

How Invisible Communication Barriers Kill Productivity

Writen by Azriel Winnett

Many kinds of interferences or disturbances can confuse a message. Communication specialists call them ''noise.'' A noise is anything that competes against communication.

Obviously, if we want our communication to be effective, we have to be continually on our guard to detect such noise, whatever the source. When we find it, we must drown it out. Or better still, eliminate it altogether.

Of course, before we can overcome such barriers, from wherever they come, we must be able to recognize them. When they take the form of literal noise, they're usually easy enough to distinguish.

But what we don't appreciate enough is the plethora of forms of metaphorical noise. In the workplace, for example, we often find conflicting thoughts competing for attention.

Most business executives (and their secretaries!) are familiar with this type of scenario: the boss may call for a certain file from the filing cabinet, and be quite amazed that this simple request turns out to be so problematic.

He or she doesn't know this instruction has triggered an unexpected stimulus: ''File? Yes, I must remember to stop by the store on the way home to pick up a nail file...''

Then again, many executives fail to realize the extent to which distrust can distort messages. A manager who routinely insists that every printing order is urgent, is not too likely to find receptive ears when time really is of the essence.

Let's take a look at an incident in the working lives of two very special imaginary characters - Mr Thompson, Chief Operating Officer of a flourishing corporation, and his work supervisor, Mr Brown..

This is a day for which Mr Brown has been waiting in very keen anticipation. Why?

Our Mr Brown has been rather unhappy of late.

The economic downturn hasn't touched our company yet. Business, in fact, is booming. Mr Brown has no complaints about that, for he's a devoted worker, to say the least, and he's gratified to be a key player in his firm's success. He has never been one to panic at the prospect of hard work.

Then what's the problem? Simply this: relative to the time and energy he has invested in his job, Mr Brown is underpaid. Period.

But a few weeks ago, he took the bull by the horns.

Knocking on Mr Thompson's door, he explained that, in the long run, a hefty raise would be in the company's interest as much as his own. In return, moreover, he would be very happy to take on extra responsibilities.

Our COO seemed more than sympathetic. The vice president in charge of the budget was out of the country at that moment, but Mr Thompson promised to raise the matter immediately on the VP's return. In all probability, his consent would be a mere formality.

Today is the day that has been set down for the verdict to be delivered.

The butterflies in our supervisor's stomach give way to cautious optimism as he enters his superior's office. He has faith in the justice of his cause, and isn't Mr Thompson on his side?

''Ah, Mr Brown, good to see you!''

Mr Thompson's warm smile suddenly freezes in mid-air. His face seems to change color - or perhaps we're just imagining it?

''Ahem...Yes...'' He pauses for the proverbial two seconds that seem like an eternity. What's the matter? Has Mr Thompson, who never forgets anything, only just remembered something important?

''Look, I'm sorry, I didn't have a chance to discuss that matter with Mr Hodgkinson yet, but I have some important information in connection with our machinery problems. Can you make a note of a few things?''

But Mr Brown, the epitome of conscientiousness, is as human as the next person. He's hardly in a state for mental notes.

The kind of emotional blackout the work supervisor is now experiencing is an obstacle to effective communication as real as it's intangible.

It's no less of a barrier than the noise of a pneumatic drill punctuating the conversation of two people in the street.

Azriel Winnett is the creator of HODU.COM - YOUR COMMUNICATION SKILLS PORTAL. This popular website helps you to improve your communication and relationship skills in business and professional life, in the family unit and on the social scene. New material added almost daily.

The High Cost Of Employee Turnover Among Project Managers

Writen by Craig Ruvere

Imagine for a moment this scenario from a frustrated Senior Manager of a large pharmaceutical organization: "Our organization has experienced a large turnover among project managers in the past year. This creates problems providing ongoing quality and service to our stakeholders. We just don't know what is causing the problem!" Sound familiar? Well you're not alone. I remember that filmmaker Woody Allen once said that "80% of success is showing up." However, the greater challenge is finding ways to keep people there.

Employee turnover is simply a fact of life in the business world. The days when employees would stay and grow with a company for the duration of their working life are gone. Studies today reveal that individuals stay with their current employer a maximum of five years before moving on. While 0% turnover is simply unrealistic, increased turnover in your organization could indicate a serious problem in your working environment.

In a random poll of project managers conducted for this article, the following reasons were given for high turnover among project managers at organizations today:

• Internal communication problems
• Poor time management
• Trouble scheduling and controlling staff
• Lack of project manager authority and experience
• Poor staff training
• No project management tools/systems
• Monetary compensation

Organizations are in a constant state of restructuring. The demand for experienced and dedicated project managers is on the rise, however it seems that less experienced personnel are attracted to the profession. So then why do some organizations experience increased turnover?

Generally speaking, the US Bureau of Labor Statistics recently found that 40% of those that quit their jobs were doing so because they simply felt a lack of appreciation, of teamwork, that the organization was perceived to not care about employees. Serious charges from 40% of the people.

As of February 2005, the average turnover rate in the United States was 3.1%. And while that number seems low, when you think about how many employed individuals there are in the United States alone that number can be staggering. And yet many organizations let turnover go undetected.

CEO's just accept it as part of doing business in today's competitive marketplace. But more cost conscious and successful organizations will see the negative cost factors that turnover inevitably will have on productivity, quality and service.

F. Leigh Branham believes there are Six Truths About Employee Turnover. They are as follows:

1. Turnover Happens
2. Some Turnover Can be Desirable
3. Turnover is Costly
4. More Money is NOT Always the Answer
5. Management Holds the Key to Keeping Talent
6. Reducing Turnover Starts with Commitment

All of the above information while general can also be applied to the profession of the project manager.

The Domino Effect

The loss of a project manager during any phase of the project can signal disaster. Many times while the methodologies for managing projects are set forth by the PMO (Project Management Office), individuals have their own unique system for completing tasks and organizing workloads. Therefore, the ramp up time associated with trying to decipher how an individual works can bring the project to a screeching halt. Project staff members find themselves asking the following questions after a project manager departs:

• Where did they leave off?
• Who were their contacts?
• Were they organized?
• Will there be ramp up time associated with understanding their job?
• Were they on schedule or will you need to bring the project up to speed?
• Is it more cost effective to divide the work or train someone new?
• Have stakeholders been notified of any new developments?
• Has the budget been adhered to?

In fact the departure of a project manager influences all of the following:

Scope – What needs to get done
Time – Ramp up increases
Cost – Overtime and training
Quality – Deadlines effect final outcome
Communication – Promises made cannot always be kept
Procurement – Poor choice of outside vendors

So how then can turnover be prevented among project managers? As we discussed in the beginning, 0% turnover is improbable. Limited turnover however can be viewed as desirable for organizations. For instance new employees are bound to bring new ideas and methods with them thus revitalizing what might have been a stale environment to work in.

But turnover in and of itself is not fully understood. Many organizations fail to realize the high costs associated with turnover at many levels. Turnover can become a financial burden to your organization with recruitment and selection costs, training for new employees, ramp-up time, increased work loads for existing employees, overtime, reduced productivity and that's just naming a few. In fact it costs a company approximately 1/3 of a new hire's salary to replace an employee. If more organizations took the time to view turnover as a financial hit rather than passing it off as part of day to day business life they might save their organizations ten's of thousands of dollars.

There are ways to not only reduce the amount of turnover at your organization but also to be prepared for it. In the random poll of project managers conducted for this article, the following suggestions were given as ways to reduce the amount of turnover among project managers:

• Offer training opportunities to increase knowledge areas
• Assess the changing workforce culture
• Measure the companies turnover rate
• Become more employee oriented
• Hire the right people
• Set up effective Change Management

While change in inevitable in an organization, you can be prepared. Issues arise in the normal course of project activities and timely resolutions are essential to maintaining project timelines and team momentum as well as keeping stakeholders happy. Change Management practices can help. A Change Management plan with immediate response that can be implemented quickly will have a greater chance for project success and thus have less overall impact on the project's progression. Change Management can help:

• Reduce productivity loss
• Encourage employees who might be resistant to change
• Minimize impact on productivity and quality
• Reduce the effect on stakeholders

Left unmanaged issues can derail or even cause an entire project to fail. Some questions to ask when developing a Change Management plan are:

• Responsibility breakdown
• Additional training required
• How much ramp up time will there be?
• Replacement of personnel – internal?
• Overtime required
• Who can make a lateral move?

A Change Management plan for employee turnover translates into a rapid, cost effective solution so projects can be delivered on time, on budget and on scope without effecting stakeholders.

Measuring Turnover at Your Organization

Many organizations have little knowledge of the turnover rate at their organization. Moreover, they are unaware of the hidden costs that turnover can place on an organization once an employee leaves. Measuring turnover is done simply and should be done yearly with the following formula:

Turnover cost can also be measured and should be reviewed on a bi-yearly basis. The formula below will help you to calculate turnover cost:

Even with all of this new found data, the answers to why employee turnover may be a problem at your organization are still unclear. Moreover exit interviews will not give you the feedback you are looking for since the most common reason given for leaving an organization is always more money and a better job.

It is up to management to take the time to be critical and look inward. Understand that a problem exists. High turnover is a warning sign, a red flag that there are internal problems within your organization, some of which might be caused by senior management. While the turnover of a few employees can hardly be considered reason to be concerned, high turnover rates should make you question the working environment that your organization provides both emotionally, physically and financially. Ask yourself these questions:

· Are employees managed the way I would want to be managed?
· Are employees monetarily and emotionally compensated?
· Is the organization viewed as employee oriented?

It used to be that an employee was devoted and loyal to one company during the duration of their employment. Today however employees are looking out for themselves more focused on their quality of life and the needs of their family. That means that organizations today must motivate and inspire individuals to want to stay. Engaging and empowering employees is one of the great assets you have in the fight to reduce employee turnover. Data gathered by Development Dimensions International (DDI) shows that companies or businesses with highly engaged employees experience a lower turnover rate. How does your organization stack up?

· Listen to employees
· Treat employees with respect
· Praise a job well done
· Ask employees for their input
· Show trust with more responsibility
· Be fair and impartial
· Be firm but not tyrannical
· Apologize or admit when wrong
· Pleasant working condition
· Room for advancement

While there is no one answer to the issue of employee turnover there are many proven suggestions on how to limit the chances of it happening at your organization. We tend to forget that the people working for us are typically the ones getting the job done from start to finish. We rely on their knowledge, their skills and most of all their commitment to perform top quality work in a timely fashion. As an employer, take the time to show your appreciation to those that work so hard to make your business a success. Most importantly listen to their needs and find ways to show that you're committed to them. 80% of success is showing up; make the other 20% increasing the ways you make them stay.

Resources:

U.S. Bureau of Labor Statistics, Washington, DC 20212-0001, © 2004 US Department of Labor

Adapted from "Keeping the People Who Keep You in Business" by F. Leigh Branham © 2000

© SSI, Inc. 2005
Successful Strategies International, Inc. (SSI) is a training, leadership and mentoring organization, recognizing the need for quality training and services that are both time and cost effective. For information on how SSI can help your business create a Project Measurement System, give us a call at 877-390-3057 or visit us at www.ssi-learn.com.

Tom is the President and co-founder of Successful Strategies International, Inc. (SSI). For over ten years, SSI has been a successful training, leadership and mentoring organization that specializes in Project Management and Leadership Development.

Prior to forming SSI, Tom was involved with the startup of PCI Global Inc., a training organization where he remained for over 14 years. Tom brings to SSI over 25 years of professional experience in training and business management and development.

Education:
BS from Widener University in Chester, PA
MBA from Lehigh University in Bethlehem, PA

Experience:
As a corporate officer of SSI and previously at PCI Global Inc., Tom has worked with such Fortune 1000 companies as Johnson & Johnson Worldwide, Wyeth International, CitiCard, Marriott International, Sony, Standard Chartered Bank, Olympus, Cablevision, Pearson and many others to help resolve their project management and leadership needs, thus improving quality and performance. As an instructor, Tom has facilitated courses on such topics as Project Management, Supervisory

Do Boards Need A Technology Audit Committee

Writen by Michael Siersema

What does FedEx, Pfizer, Wachovia, 3Com, Mellon Financial, Shurgard Storage, Sempra Energy and Proctor & Gamble have in common? What board committee exists for only 10% of publicly traded companies but generates 6.5% greater returns for those companies? What is the single largest budget item after salaries and manufacturing equipment?

Technology decisions will outlive the tenure of the management team making those decisions. While the current fast pace of technological change means that corporate technology decisions are frequent and far-reaching, the consequences of the decisions—both good and bad—will stay with the firm for a long time. Usually technology decisions are made unilaterally within the Information Technology (IT) group, over which senior management chose to have no input or oversight. For the Board of a business to perform its duty to exercise business judgment over key decisions, the Board must have a mechanism for reviewing and guiding technology decisions.

A recent example where this sort of oversight would have helped was the Enterprise Resource Planning (ERP) mania of the mid-1990's. At the time, many companies were investing tens of millions of dollars (and sometimes hundreds of millions) on ERP systems from SAP and Oracle. Often these purchases were justified by executives in Finance, HR, or Operations strongly advocating their purchase as a way of keeping up with their competitors, who were also installing such systems. CIO's and line executives often did not give enough thought to the problem of how to make a successful transition to these very complex systems. Alignment of corporate resources and management of organizational change brought by these new systems was overlooked, often resulting in a crisis. Many billions of dollars were spent on systems that either should not have been bought at all or were bought before the client companies were prepared.

Certainly, no successful medium or large business can be run today without computers and the software that makes them useful. Technology also represents one of the single largest capital and operating line item for business expenditures, outside of labor and manufacturing equipment. For both of these reasons, Board-level oversight of technology is appropriate at some level.

Can the Board of Directors continue to leave these fundamental decisions solely to the current management team? Most large technology decisions are inherently risky (studies have shown less than half deliver on promises), while poor decisions take years to be repaired or replaced. Over half of the technology investments are not returning anticipated gains in business performance; Boards are consequently becoming involved in technology decisions. It is surprising that only ten percent of the publicly traded corporations have IT Audit Committees as part of their boards. However, those companies enjoy a clear competitive advantage in the form of a compounded annual return 6.5% greater than their competitors.

Tectonic shifts are under way in how technology is being supplied, which the Board needs to understand. IT industry consolidation seriously decreases strategic flexibility by undercutting management's ability to consider competitive options, and it creates potentially dangerous reliance on only a few key suppliers.

The core asset of flourishing and lasting business is the ability to respond or even anticipate the impact of outside forces. Technology has become a barrier to organizational agility for a number of reasons:
• Core legacy systems have calcified
• IT infrastructure has failed to keep pace with changes in the business
• Inflexible IT architecture results in a high percentage of IT expenditure on maintenance of existing systems and not enough on new capabilities
• Short term operational decisions infringe on business's long term capability to remain competitive

Traditional Boards lack the skills to ask the right questions to ensure that technology is considered in the context of regulatory requirements, risk and agility. This is because technology is a relatively new and fast-growing profession. CEOs have been around since the beginning of time, and financial counselors have been evolving over the past century. But technology is so new, and its cost to deploy changes dramatically, that the technology profession is still maturing. Technologists have worked on how the systems are designed and used to solve problems facing the business. Recently, they recognized a need to understand and be involved in the business strategy. The business leader and the financial leader neither have history nor experience utilizing technology and making key technology decisions. The Board needs to be involved with the executives making technology decisions, just as the technology leader needs Board support and guidance in making those decisions.

Recent regulatory mandates such as Sarbanes-Oxley have changed the relationship of the business leader and financial leader. They in turn are asking for similar assurances from the technology leader. The business leader and financial leader have professional advisors to guide their decisions, such as lawyers, accountants and investment bankers. The technologist has relied upon the vendor community or consultants who have their own perspective, and who might not always be able to provide recommendations in the best interests of the company. The IT Audit Committee of the Board can and should fill this gap.

What role should the IT Audit Committee play in the organization? The IT Audit function in the Board should contribute toward:
1. Bringing technology strategy into alignment with business strategy.
2. Ensuring that technology decisions are in the best interests of shareholders.
3. Fostering organizational development and alignment between business units.
4. Increasing the Board's overall understanding of technological issues and consequences within the company. This type of understanding cannot come from financial analysis alone.
5. Effective communication between the technologist and the Committee members.

The IT Audit Committee does not require additional board members. Existing board members can be assigned the responsibility, and use consultants to help them understand the issues sufficiently to provide guidance to the technology leader. A review of existing IT Audit Committee Charters shows the following common characteristics:
1. Review, evaluate and make recommendations on technology-based issues of importance to the business.
• Appraise and critically review the financial, tactical and strategic benefits of proposed major technology related projects and technology architecture alternatives.
• Oversee and critically review the progress of major technology related projects and technology architecture decisions.
2. Advise the senior technology management team at the firm
3. Monitor the quality and effectiveness of technology systems and processes that relate to or affect the firm's internal control systems.

Fundamentally, the Board's role in IT Governance is to ensure alignment between IT initiatives and business objectives, monitor actions taken by the technology steering committee, and validate that technology processes and practices are delivering value to the business. Strategic alignment between IT and the business is fundamental to building a technology architectural foundation that creates agile organizations. Boards should be aware of technological risk exposures, management's assessment of those risks, and mitigation strategies considered and adopted.

There are no new principles here—only affirmation of existing governance charters. The execution of technology decisions falls upon the management of the organization. The oversight of management is the responsibility of the Board. The Board needs to take appropriate ownership and become proactive in governance of the technology.

Do Boards need a Technology Audit committee? Yes, a Technology Audit Committee within the Board is warranted because it will lead to technology/business alignment. It is more than simply the right thing to do; it is a best practice with real bottom-line benefits.

MICHAEL SIERSEMA is a Managing Partner/CEO of Phoenix2000 Group LLC focusing on technology advisory services.

Phoenix2000 Group is a new breed professional services partnership of senior technologists that fit a niche at the senior executive support systems. Like the CEO looks to lawyers for advice, the CFO leans on CPA and audit firm for counsel, the technologist needs an organization to find true independent guidance. We don't sell solutions, we sell answers. http://www.phoenix2000group.com

Problems With Group Decision Making

Writen by Andrew E. Schwartz

DECISION BY AUTHORITY RULE: Many groups start out with—or quickly set up a power structure that makes it clear that the chairman (or someone else in authority) will make the ultimate decision. The group can generate ideas and hold free discussion, but at any time the chairman can say that, having heard the discussion, he or she has decided upon a given plan. Whether or not this method is effective depends a great deal upon whether the chairman is a sufficiently good listener to have culled the right information on which to make the decision. Furthermore, if the group must also implement the decision, then the authority-rule method produces a bare minimum of involvement by the group (basically, they will do it because they have to, not necessarily because they want to). Hence it undermines the potential quality of the implementation of the decision.

DECISION BY MINORITY RULE: One of the most often heard complaints of group members is that they feel "railroaded" into some decision. Usually, this feeling results from one, two or three people employing tactics that produce action—and therefore must be considered decisions—but which are taken without the consent of the majority. A common form of minority rule is for two or more members to come to a quick and powerful agreement on a course of action, then challenge the group with a quick "Does anyone object?", and, if no one raises their voice in two seconds, to proceed with "Let's go ahead, then." Again the trap is the assumption that silence means consent.

DECISION BY MAJORITY RULE (VOTING AND/OR POLLING): More familiar decision-making procedures are often taken for granted as applying to any group situation because they reflect our political system. One simple version is to poll everyone's opinion following some period of discussion. If the majority of participants feels the same way, it is often assumed that that is the decision. The other method is the more formal one of stating a clear alternative and asking for votes in favor of it, votes against it, and abstentions. On the surface this method seems completely sound, but surprisingly often it turns out that decisions made by this method are not well implemented, even by the group that made the decision.

Copyright AE Schwartz & Associates All rights reserved. For additional presentation materials and resources: ReadySetPresent and for a Free listing as a Trainer, Consultant, Speaker, Vendor/Organization: TrainingConsortium

CEO, A.E. Schwartz & Associates, Boston, MA., a comprehensive organization which offers over 40 skills based management training programs. Mr. Schwartz conducts over 150 programs annually for clients in industry, research, technology, government, Fortune 100/500 companies, and nonprofit organizations worldwide. He is often found at conferences as a key note presenter and/or facilitator. His style is fast-paced, participatory, practical, and humorous. He has authored over 65 books and products, and taught/lectured at over a dozen colleges and universities throughout the United States.

Firing Someone Does It Have To Be Painful For Them And You

Writen by Robert Selden

The need to write this article came about through the recent experience of two of my friends. Both had been fired. One for supposed poor performance (although she had never been counselled and at the time was in fact on sick leave) and one because the start up facility she was employed by, suddenly closed down. Both were senior managers. Both were loyal, hardworking employees but are now very angry and taking legal action against their former employers. Why are they so angry? One could say it's because they have lost their jobs and this would be quite understandable. However, the main action that has triggered their anger and catapulted them down the legal pathway (in both cases), was that they were informed of their dismissals by emails. Yes, that's right by email! They were never given the courtesy of a face to face discussion.

Many managers, when faced with the challenge of firing someone, forget, or are unaware of the emotions that are experienced by the person being fired. Nor are they aware of the behaviour that most often results from these emotions. It has been well documented that the death of a loved one, a marriage or long term relationship breakup and the loss of one's job, have an equal and similar impact on one's emotions. Think for a moment about the loss of one of your dear relatives or friends through death – how did you feel? That's exactly the same feeling that people have when they suddenly and unexpectedly lose their jobs.

The psychologists tell us that there are 5 stages that people go through in this "grief cycle" – Shock, Resistance (often manifested as anger), Acceptance (of the current situation), Exploration (of new opportunities), Commitment (to a new future). Can any of these emotions be managed via email?

I can well recall the first time as a manager I had to fire someone. It was for poor performance and I was scared. I did not sleep the night before wondering what I would say and what would be her reaction. I carried out the interview in the morning with great fear and trepidation. I was not sure how the interview went, but was relieved when it was over and then took a break for lunch, but was unable to eat. I did not know about the "5 stages" at the time, I only knew that I had to do the right thing by the organisation and by the employee. I arrived back from my break to find a box of chocolates on my desk with a very nice note from the employee saying how much she appreciated my courtesy and kindness. I guess, intuitively I must have got something right.

Now, from years of experience, I know two things about firing someone:

1. Firstly, the person at all times must maintain his or her self esteem. This is one of the most basic and important needs that all people have (emailing someone, or even worse as I heard since starting this article, texting, sends a clear message that they are not worthy of a face to face discussion)

2. Secondly, it is vitally important to realise that all people will go through the five stages of the grief cycle (quite often at different paces) and as a manager, it is our role and responsibility to help them progress through these stages, particularly the first two that are likely to occur when they are still with us.

How do you do this? Well, in my usual style when writing an article such as this, I did my web research. Sad to say there was not much there. Under "firing someone" there seemed to be a plethora of articles about the legal requirements and many about the steps to take. For example, one article suggested the following steps: Give warning, Document, Document, Document! Time it right, Prepare the paperwork, Don't go it alone (ensure you have someone from HR there), Ensure privacy, Be brief, Watch your tone, Seek feedback, Give a good send-off. Few of these steps would address the 5 stages of grief. Many could probably be done by email with the same impact and result! If these steps were followed, I wonder what "feedback" the manager would receive – would there in fact be a "Good send-off"?

I'm not suggesting that we don't have to address some of these. For example, you must cover all of the documentary and legal responsibilities pertinent to your country and organisation's requirements. But keep in mind that the fired employee is first and foremost a person just like you with feelings and emotions that must be managed.

Here are some suggestions (assuming of course that you have fulfilled all the other requirements) for the next time that you have to fire someone:

• Before taking any action, ask yourself: "How would I feel if my boss came to me today and said – you're fired!" Write down a list of words that describe your feelings.

• If you were in the situation of being fired, how would you like your boss to handle it? What would you like him/her to do and to say? Jot down some of your thoughts.

• Now write down a list of the words that best describe your feelings about having to fire someone. Review all the words you have scribbled down so far and pick out the two or three strongest. Also keep in mind how you would like to be handled in similar circumstances.

• Script the start of the conversation using the two or three words you have discovered. e.g. "This is really difficult for me. I feel apprehensive and worried that I won't get it right."

• The next part of your opening script will depend on the circumstances. For example in a "lay off" situation, it might go something like; "I have been advised that I have to terminate the employment of a number of people. I am really sad to say that your name is on that list". Or, for a non performance issue, it could be something like; "We have discussed my expectations about your performance and unfortunately they are still not being met. It now really saddens me (or whatever your feelings are) that I will have to terminate your employment".

• Be careful. You can only script the opening few lines, but they are important because they set the scene for the entire interview.

• It is most likely that during the remainder of the interview, the employee will travel backward and forwards between "shock" and "resistance". Give your reasons for the termination clearly and succinctly, but do not get into a discussion about justifying yours (or your employer's) reasons. Doing so will keep the employee fixed in either of the first two stages and will not help them to progress. Only sincere listening and clear questioning (not reasoning) will help the employee progress to the acceptance stage.

One factor that is often overlooked when firing someone, is that the way it is done can have as much impact (positive or negative) on the people who remain. They will be watching (and will invariably get a first hand report from their colleague) about how well or otherwise the process was managed. The people who remain in the organisation, and whom I assume you want to keep, get a good look at both the manager's and the organisation's real people management skills when under the stress of firing someone. They'll most certainly ask "Could this happen to me?"

Copyright 2006 The National Learning Institute

Bob Selden has been a supervisor, manager and senior manager in a number of both large and small organisations. During his career, he has had to grapple with the challenges of hiring and firing. Now, as MD of the National Learning Institute, he offers his advice free to managers and aspiring managers on how to best manage their people. Contact Bob with your people management issues at http://www.nationallearninginstitute.com