Part 3: HR Intervening with a Potentially Violent Employee

Posted on October 10, 2012 by Suzi

Previous articles in this series: Part 1:HR Principles Guiding Workplace Violence Prevention; Part 2: HR Steps to Preventing Workplace Violence

Making the plan

After reviewing an employee’s history, behavior and disclosures, a comprehensive plan for intervening must be developed. It is useful to consider past interventions with this employee as information on how this one will progress. Review company policies that might apply to this situation and always maintain a respectful and firm posture toward the employee. The employee who takes the central role in delivering the “bad news” should be a seasoned person with experience in these kind of difficult employee discussions. It should be someone who is not afraid to set clear boundaries during the discussion and will know when to put a stop to discussions altogether. A skilled individual can keep a discussion de-escalated and more successful overall.

The reader is cautioned to remember that every intervention must be custom-designed. Only those closest to the discussions know the best course of action. These general steps may help in your planning:

Objectively assess the employee,s background, work history and safety risks
Consult an expert or attorney on legal process to ensure the company obligations and employee rights are protected;
Create plan for handling the performance conference – location, timing, personnel involved;
Ask the authorities and/or security to review the plan and provide feedback;
Create a detail schedule of events;
Prepare the financials for the employee’s last pay if termination is warranted;
Plan out each person’s role in the intervention including the talking points of what is to be conveyed;
Consider letting coworkers know that you will be meeting with the potentially dangerous employee or notify them directly after, if warranted;
Carefully consider where the employee will go directly after the intervention – escort to locker and off the premises, etc;
Provide instructions if the employee is not allowed to contact various employees and inform the employee of who he/she should contact if questions arise post termination;
Implement the plan;
Follow up with authorities if the employee makes either vague or specific threats to company personnel;
Follow up with peers and other workers who might be affected by this employee’s actions or the company intervention;
Provide co-workers and supervisors with instructions on what to do if threatened or contacted;
Review company security procedures and refresh employee understanding if appropriate.

As always, review and evaluate the intervention outcome, considering what worked well, what did not go well and potential changes to company policies.

Good luck!

Part 2: HR Planning to Prevent Workplace Violence

Posted on October 10, 2012 by Suzi

Previous articles in this series: Part 1:HR Principles Guiding Workplace Violence Prevention

Roles in preventing workplace violence

There are four entities to be considered when developing policies and procedures on the management of potentially violent employees: The individual, the work unit, the company and the community. The company’s role varies regarding these groups. The company has a duty to protect all employees from workplace violence. The company must listen to unit supervisors and co-workers who disclose information or fears about an employee. The company has a responsibility to have reasonable policies that guide company operations regarding employee violence (see part one of this article). Finally, if a disgruntled employee makes threats to employees, there could be a moral obligation to inform authorities because employees can be at risk both at work and in the community. The nature and clarity of these threats can provide guidance here.

The individual employee

It’s helpful to focus on the individual employee’s history and behavior to determine the risk for violence. Over the years, I have found that looking at employee behavior overall, not just one or two incidents, is key to accurately assessing the potential for violence. But first, what are the basic emotional skills that every employee must have for reasonable chance of success?

Mental and emotional basics for every employee

Does the employee have sufficient emotional health and maturity for the workplace? Recruitment interviews and reference checks should reveals whether there are red flags in any of these areas.

Reasonable self-awareness and self-assessment of his/her capabilities;
Reasonable perspective on his/her own performance strengths and weaknesses;
Reasonable accurate perception of how he/she is seen by management, peers;
Reasonable perspective on personal responsibility (blaming others or accountable for the consequences of their poor performance?);
Reasonable acceptance of performance criticism; and
Ability to see things from someone else’s perspective.

A particular employee’s potential for violence

When HR sees red flags going into a performance counseling with a particular employee, there are some simple questions to consider. The focus needs to be on observable behavior, behavior changes and employee disclosures. Here are a series of questions that get at the employee’s observable behavior in the workplace as well as their potential state of mind:

Is the employee’s employment status about to change involuntarily and what is their potential awareness and acceptance of this change?
Has the employee made any overt or veiled threats against the company or employees?
Has employee asked for accommodations or disclosed mental illness or emotional difficulties?
Has the employee made complaints about others that proved to be false or unfounded?
Has employee disclosed significant life stressors: recent or pending divorce, financial difficulties or personal loss?
Do the employee’s performance history, counselings and results reveal troubling patterns?
Does the employee have a criminal background?
Has the employee talked about revenge, fights outside of work or violence, generally?
Have there been any observable, recent behavior changes? Odd behaviors or performance changes?

The key here is to trust your instincts. Seasoned HR professionals generally know to trust their instincts or “gut feelings.” When you have that uneasy feeling, consult an informed and neutral third-party – perhaps an HR colleague to see if he/she shares the concerns.

Part 3 in this series will cover the planning for an intervention, next.

HR: Sorting out Business Mistakes – Employees and Customers

Posted on September 5, 2012 by Suzi

When you make a mistake at work, do you obsess and then over-react? Maybe you blame others around you. I tend to think about it over a 24 hour period and then usually let it go. I rarely blame others and try to go easy on myself about whatever I contributed to the error or problem. This is partly because of my age and experience and partly due to some great advice I got as a young executive in my first management job.

How you must respond to mess-ups in a business-sense depends upon the interaction of two important factors.

Relative size of the mistake
Relative visibility of the mistake to the outside world

Size of the mistake

Calculating the size of a mistake involves a common sense evaluation of right and wrong, ethics, and legality. A breach of confidentiality is generally a pretty serious mistake. It is wrong and potentially illegal. If there is a breach involving employee social security numbers, checking account numbers or dates of birth, it’s very serious. This error can aid criminals in identity theft and fraud. When something is wrong, illegal, and/or unethical, it’s a serious mistake.

A much more minor error might be if a management list of business issues goes to one extra manager who was not supposed to be on a distribution list. Damage control involves having a chat with that one manager. Another minor issue might be an easily corrected math error. Again, correct the error and move on.

Mistakes involving one or two work units are minor. Errors involving the entire company, the company’s most well-know brands and significant numbers of customers will be greater and much more complicated to fix.

The “external judgment” factor

When it’s easy for a casual observer to see how a mistake might be made this is generally a lesser issue than when a company fails to install obvious procedural checks and balances. Most people expect companies to know obvious risks and to do something to prevent obvious errors – such as confidentiality breaches.

Error Frequency

Remember when Netflix failed to anticipate understandable customer push back regarding rates after their failed price increase in September 2011. This was a fairly obvious error that might have been discovered/anticipated by market research. Everyone assumes a large company has resources to conduct research and knows it’s important. Then, weeks later, the company made another mistake by separating it’s movie business into two brands. This decision was later reversed. They failed to anticipate a considerable backlash to a price increase and then made things worse by having no comprehensive and well-thought out response. Too much reactive decision-making.

The greater the error, the greater the need for a thoughtful plan to control the damage, create a new plan and amend procedures to prevent this type of error in the future.

Visibility of the mistake

Visibility refers to employees, customers and sometimes to regulators. Mistakes can have low visibility – a few employees got an internal memo they shouldn’t have; or high visibility – a damaging internal memo is leaked to several external clients. The greater the number of individuals outside an organization who become aware of the mistake, the greater the need for external damage control. External damage control can often lead to media exposure. Once media exposure is involved, a very small mistake can take on global proportions.

Here’s a simple guide:

Small mistake, low visibility – speak to the people involved, change procedures and move on.
Small mistake, high visibility – notify those involved, change the procedures and prepare for media response
Large mistake, low visibility – speak to the people involved, change procedures and consider performance couselings for those who are most responsible for the problem.
Large mistake, high visibility – conduct an investigation, prepare two responses for the people involved and then the media. Step carefully because your response will be scrutinized. Be deliberate, respectful and fair.

Mistakes can lead to deeper relationships

Mistakes create opportunities to improve the company and help employees grow in their performance and skill. If the mistake involves customers, they remember what you did in the face of adversity. Did you overreact and blame them or your employees? Did you fail to admit what happened? Most importantly, Did you disclose mistake’s source or cause and fix it? Customers will understand if you come clean and make it right. Think about the “Tylenol tampering” scandal of 1982 in which Johnson & Johnson took a well-reasoned and honest approach and suffered little long-term damage as a result.

Don’t berate employees

I have seen colossal over-reactions that caused more damage that the original error. Try to stay calm and remember that employees generally want to do their best. The most common source of errors is confusing or inadequate communication. Empathize with employees and hold people accountable only after a good investigation of what went wrong. Don’t be too heavy-handed – make the consequence fit the nature and degree of the problem. And, if your initial reaction was wrong, go back and make amends correcting things you said or did in a reactive mode. Employees will forgive this as well.

An ounce of prevention

Preventing mistakes is so much easier than “un-ringing a bell.” The moral of this story is to pay attention to operational issues. Set up procedures with reasonable checks and balances; train employees in the basics of their jobs; and guide them to have an eye out for the most likely problems that will lead to embarrassment or worst – illegal activities. Be clear in your communication with them on all matters. Then follow a deliberate process to handle mistakes as they arise.

Using “Interim” Professionals to Bridge Key Vacancies: CEO, HR, IT and Finance

Posted on December 1, 2011 by Suzi

As companies operate with ever-leaner staff the prospect of losing a key employee can be overwhelming. No matter the size of the company, IT, Finance or HR professionals are key positions. They interact with everyone: they play a key role in business planning; and they have a strong role in controlling finances/efficiency. When one of these staff members gives their notice several things must be done at once:

Figure out how to operate with a vacancy – no matter how speedy your recruitment it will take a while to get the right person in the seat
Make sure activities and processes don’t stall or slide backwards
Find a way to complete projects in development
Develop the recruitment strategy to find the right person.

We’ve all been tempted to rush the recruitment process in desperation. A seemingly perfect candidate shows up at the right time and you hire them thinking it’s better to have an unknown person today than take precious time to find the right one tomorrow. Does this ever really work out?

Dilemma of Human Resource vacancy

A special dilemma emerges when your Human Resource manager or director gives his/her notice. When the IT person quits the HR person leads the search. When the HR person is preparing to depart you have to make plans to cover the recruiting process with a non-HR person (bad idea), retain a recruiting firm (very expensive) or ignore the problem and hope it goes away (never a good thing). An interim HR director can keep HR operations running and oversee the search for a hyper-critical role in company affairs. My interim HR assignments generally come about because the departing HR person frets about how the company will continue to move forward smoothly. On two occasions, the owners ignored the problem a little too long. As the departure day draws near the exiting HR person begins searching for someone to help bridge the gap. Instinctively, he/she knows that rushing into a permanent hire can have disastrous consequences – picture a poor HR performer and you trying to counsel him/her on job performance problems. Yikes!

Hiring an interim professional gives you time to breathe, plan and get onto better footing than can support a thoughtful, thorough hiring process.

What an interim professional can do for your company

Five potential functions can be served by an interim professional:

Audit: assess the current state of affairs, uncover weaknesses or poor functioning and recommend improvements. No matter how great the departing professional was weak performance areas are expected. Over time, owners begin to overlook these weaknesses. An interim professional will take a balanced, fresh look and not be afraid to say what areas need shoring up. Suggesting written policy amendments is something most interims do as a matter of course.
Running operations: interim professionals have the skills to keep things moving, supervise staff and continue getting results while you search for the best replacement.
Completing projects in transition: many business projects take months to complete. Getting a key staff’s notice in the middle of a major project can be stressful. Interims are typically well-trained in project management and may actually bring a broader, more seasoned expertise to the table.
Help with the permanent hire: interim professionals can provide much-needed support to keep search activities moving forward. They can review the job design and description as well as qualifications for the permanent replacement. The longer the exiting professional has been in his/her position the more the world around you has changed. This is the perfect time to get an objective review of how the position is designed and how it relates to the overall business team and goals. When the search is underway an interim professional can provide a keen eye to candidate experience and fit since they come at this from a place of deeper experience than the general recruitment team.
Post placement support: an interim professional can help smooth the transition into an organization’s culture and process. The best way to take advantage of this service is to use professional interims. Making this work to the company’s best advantage requires strong and consistent attention to what is best for the company. If you have retained an interim who wants the position and things don’t work out, you may have difficulty with transitioning him/her out while bringing in the new person. Not impossible, but tricky!

What to do if the interim is a candidate for the permanent position?

There are two interim professional situations: Those who want the job and see this as a way to ease into it and professional interims. Professional interims will generally be better at the audit, projects and recruitment part of the interim assignment. They don’t want permanent or full-time jobs. Often they are semi-retired and don’t need or want full-time employment. Others just appreciate taking on new challenges. In my case, I love the newness of interim assignments and I genuinely like helping a company, installing the perfect candidate and moving on. Most of my referrals come from owners who don’t know how to begin the search and they want a placeholder. Sometimes the owner’s objective comes from concerns about how things were handled by the exiting executive. In the initial meeting, I describe the five interim functions noted above and let the hiring group decide what they want most from the interim assignment.

How interim professionals work

The beauty of working with an interim position is that a salary budget line item can fund the assignment. Interims who work as contractors don’t take benefits or time off so even if the company used the entire salary/cash budget there is still likely to be savings. In addition, many interims are so well-qualified and efficient that they may not require the full forty hours/five days per week to accomplish what you need. In this case again, there can be expense line item savings. Interims can be hired either as contractors or paid as temporary employees. Some interims prefer to work as a temporary employee and have payroll taxes withheld. Some prefer to keep a contractual arrangement. I have done this both ways. Contractors save the company a bit of payroll tax but the difference isn’t significant. One factor that may apply here is whom the interim professional will answer to and how much oversight there will be. As a contractor I find it to be a little easier to assess policies and procedures frankly while maintaining a more arm’s-length status as a contractor. I also prefer to work a part-time schedule so I can maintain other client relationships. Some clients insist I be on site five days per week but with electronic files, telecommuting makes this unnecessary plus, working three to four days per week means I can commute further from home to take interim assignments. Demanding five days narrows the field of who you might tap to take an interim assignment. Much of this depends on the nature of the position, how much auditing is needed and the current projects underway.

Making the arrangement

Interims working as contractors should provide a confidentiality agreement and contract describing the interim’s scope of responsibility. Interims working as temporary employees are covered by the company’s confidentiality policies as well as all other policies maintained by the company. The most important factor before the assignment begins is ensuring the interim has essential qualifications (don’t be afraid to ask for references).

How do you find interims?

Word of mouth is how most of my interim assignments emerge. I have had all of the following assignments in the last ten years: Nonprofit executive director, program director, operations director and human resources manager/director. Once I’ve assessed the function and created an improvement plan the company is happy to spread the word. Where to look for a good interim would include: LinkedIn groups and searches, professional membership groups in your area, other business leaders through local Chambers of Commerce, etc. I have also helped organizations place an ad for a temporary or interim but this takes a little more time. Baby boomers and semi-retired executives have a wealth of training and experience and are perfect markets for this type of work. They may desire a less pressing schedule and the short duration offers down time in between assignments for travel or personal pursuits. They don’t rattle easily and will take less business owner time to get things operating productively.

Advantages

When current staff are loyal to the former executive: The greatest advantage to working with interims is the transitional aspect. In most work environments staff are split about whether the former executive’s departing is a good thing. When the departing person had questionable performance, using an interim to audit work practices or to help find and correct substandard procedures makes more sense that asking the new, permanent person to do so. Interims are used to looking at the situation without ownership or the territoriality that may enter into the permanent replacement’s mind when building new relationships and prove themselves. When one begins a new permanent assignment there is a tendency to see the former person as less competent to justify the new, “better” approach. It is human nature to validate one’s own approach. For staff who really liked the departing person this can be off-putting. Employees who are angry about the loss of the former professional can be resentful and resistant. Moving directly to a permanent replacement saddles the new person with auditing work, correcting mistakes and trying to lead. I have seen times where the new permanent person lasted a year and left due to these social/psychological complications.

Disadvantages

The biggest disadvantage is that remaining staff have to get used to more than one individual. This can’t be avoided. There are ways to mitigate this through transition support. Much depends upon the posture an interim takes as the process unfolds. Good interims take note of issues that will span the transition time and reserve some decision-making room for the permanent executive’s preferences. In addition, there are some projects that should simply wait for the new person. When the permanent person is hired, the interim should provide enough introductory information for them to feel welcome but not so much control that the new person feels hemmed in. The interim can also cultivate a positive start by reassuring staff that the new person will listen and support them. Finally, involving supervisees in the final stages of the interview process can make a significant difference in staff buy-in.

My own interim assignments are limited by proximity to my home in New England but I consult with organizations throughout the country considering an interim about how to set up and monitor the assignment. Contact me at: sbenoit@benoitconsulting.com.

Business, Beauty or Sexy Head-shots

Posted on October 31, 2011 by Suzi

What is the Right Balance for Women in Business?

There are two issues I think about and ask my female colleagues and friends about with some frequency – aging and standards for female beauty as an entrepreneur whose brand is really myself.

Personal Brand and Beauty Standard

I notice the amount of attention young women pay to looking polished or pretty in their photos for Twitter, Facebook and LinkedIn. I am over 50 and self-described average looking. I have this thing about being too critical of my professional pictures. Seeing how other women create a personal brand through their social media head shot photos is interesting. I often wish I had felt as good about myself in my 20s as these confident young business women clearly feel. Here are some of my observations.

Four head shot types:

The very beautiful, “glamour shot” kind of picture. If you are naturally pretty, this one can look almost like a beauty pageant photo. It looks like a head shot an actress might have in a portfolio for auditions or maybe a modeling contract. The funny thing is that the other photos on their site look more natural and a lot less threatening, more normal to us older women or maybe those of us (myself included) that are less naturally beauty-queen pretty.
The “glamour shot” with an overt sexual aspect. This typically includes visible cleavage and a suggestive expression. When you are “followed” by someone with this picture the first reaction is to think you’ve been spammed.
A posed more business-like professional kind of picture. This picture looks more like what the person would look like if you ran into them at a business meeting. Neat, put together in great business clothes.
A candid, no makeup kind of picture. This might represent a more natural style – what the person looks like when they grocery shop. Maybe they are kind of granolary (sp – is that a word?). Maybe they are really secure and comfortable allowing people to see who they really are? Maybe they reject the more beauty queen ideal. It’s hard to know.

I find myself curious about whether these different kinds of photos reflect a deeper overt decision or whether it is just differing regional or generational standards for polish. My mother was raised in Maine and was naturally beautiful. She might have used lipstick when she left the house but unless she was going out to dinner or entertaining she wore no make up. She had dark auburn hair, brown eyes and her olive skin was deeply tanned in the summer. I am more fair with lighter red hair and blue eyes. My make up regimen is pretty simple: I use eye-brow pencil since my fair eye brows are naturally invisible and a little foundation. I use a lip gloss or Vaseline on my lips. I have never used a red lip color. If I try it, the person looking back at me in the mirror seems like a weird stranger. My eyelashes are blond. I use a little light-colored mascara for a wedding or special occasion, but generally, nothing else.

As a young business women I worked for a national company in the 70s and 80s and traveled to every US region. The pace of work and standards for relating to business colleagues differed by region. This manifested in the work pace of the day, whether people stopped to have lunch and how late they scheduled client meetings each day. I loved going to Atlanta because the gentile sales reps would schedule the last meeting of the day around 2:00 PM so I could go back to the Ritz Carleton, put my feet up and presumably re-apply my “face.” I had extra feet-up time because I didn’t really re-apply make up in the afternoon. To my social scientist eye of the time, standards for female beauty in the business context varied as well.

I spent many days in the American southeast. These women knew things about grooming, makeup and fashion that I had never considered at the time. Southern women seemed very beautiful to me. I remember feeling frumpy amongst them. A note might be in order here that my family was in the clothing business. This may be why I notice this stuff. In Boston, the high-powered business women dressed in more classic, expensive Brooks Brothers type wear and less make up. In New York, standards were influenced by high fashion and entertainment industry standards – clothes and make up. At a recent HR convention there was a 60-ish southern woman presenting and she looked fabulous. She had on a Chanel suit and wore a color-coordinated diamond watch. I’m pretty sure she colored her hair. I also noticed that her book’s head shot seemed like it might have been taken a while back. More importantly, she had a lot of smart things to say – innovative, progressive. I took a lot of notes and looked her up online later.

I am curious about why women make the decisions they do. If I had unlimited income I would conduct a study and write a book. I might buy such a book if it contained a sociological or anthropological analysis.

Standards of beauty and aging

I have recently decided to grow my hair out. It is thick and sort of strawberry blond. I get compliments on it. The more I age, the more I think about emphasizing my positive physical assets is on my mind. I make a living speaking to business groups. I have managed to stay fit- keep my weight down; I pay attention to looking a bit more polished; and though my hair has very little grey, I am increasingly aware of the condition of my facial skin. In the past, I would never have considered facial surgery. At this point the price tag makes this a non-issue. I don’t know if I could ever go through with it. There is something creepy about the “housewives” shows where the women all look the same. It’s kind of a “fish face” look as the skin is pulled back and the corners of the mouth get pulled. I think looking natural and well-cared-for is much better than a fish face. (I am aware that some plastic surgery is better, with a lighter touch.) When I have this mental discussion in my head, I consistently come down on the side of advancing my consulting and speaking skills thinking that if I provide enough content, people won’t mind that I am aging. With age, comes experience and skill, I think.

I have a 40-ish friend with long, very curly salt and pepper hair. She is thin and beautiful. All clothes look great on her. She recently decided to color the grey and when I asked about it she shared some of the feelings I’ve had about it too. I was glad to know she was wrestling with the same thoughts I had. This made me feel less neurotic. She feels pressure to look young and seem fit and vibrant. Some of her friends and colleagues thought that “fit and vibrant” did not include grey hair. This is an incredibly smart and talented women. I don’t know any man who does what she does with more intelligence or talent. When I listen to the last business deal she made I am amazed about how she solves thorny, complicated business problems and gets parties to agree. I suspect that her clients feel quite well served but I understand the self-doubt she feels.

While I notice how people present themselves physically, I tend to judge women in a business context by whether they have skill and how they treat others and not by how they look. I hope they judge me the same way. There is room for everyone and varied styles. I sometimes worry a little about the more sexually overt style some women take on in the workplace because of my work in the HR world. Overt sexuality usually causes problems for everyone including the woman, her coworkers and the company. But still every woman needs to decide for herself what to do, how to dress and how to relate to others.

Maybe I will age into looking like those pretty older women with shiny silver/white hair, scarves and soft colorful clothes who wear earrings and lovely make up. Not sure. Just thinking about life today. What got me thinking was a recent 20-something female Twitter follower whose formal head shot was a beauty picture and more natural candid shots appeared on her website. She is obviously smart and talented. I was wondering about her thought process and whether I needed a better head-shot. Maybe I’ll buy an expensive cream to put on my wrinkles. Cindy Crawford does look pretty good.

PS. Word press spell check flagged the word mascara but it is spelled correctly – I have never used it in a sentence before and looked it up. Why do you think WordPress doesn’t recognize it?

Corporate Social Responsibility – an increasingly integrated approach

Posted on October 27, 2011 by Suzi

Community stewardship is increasingly expected from American companies of all sizes. Philanthropy used to be the purview of very large corporations through their own foundations. Today, even the smallest companies have creative ways to show affection for the communities in which they “live.” Old-school practices might have included a cash donation to one or two organized nonprofits in the community. Often these donations were meant to enhance the company’s image and might even be connected to a board member’s pet project. Things have really changed over the last 15 years. While many large corporations still have foundations, the bar has been raised to adopt a more integrated giving approach.

First: More pressing social issues

Global warming, pollution, high gas prices (sustainable agriculture and buy-local campaigns) and unemployment (employment sustainability) have been added to traditional vulnerable populations (poor, disabled, and displaced). While state and federal funds are shrinking, social concerns are in some cases getting worse. They are also top-of-mind when increasingly discussed in a global, media-based society. We know instantly when a rain forest is disturbed on the other side of the earth. When George Bush, Sr. gave his “1000 Points of Light” speech in 1989, we didn’t know it at the time but this would signal a permanent shift to increasing dependence on the private sector. His view was that charity is the responsibility of the private sector (small government, lower taxes, etc). Later, more pressure for this shift would come from severe budget shortfalls at states across the country. But I digress.

Second: Small company owners are passionate about sharing abundance

I recently heard a young woman (28-ish) describe her small company’s philanthropic activities and was struck by how clear and determined she was. Company size just isn’t a barrier in her thinking. She is committed and moving forward with a variety of creative ways to share her success with worthy local causes. I see this in many of the small businesses I advise regularly. It’s got nothing to do with me pushing an agenda. They are just there with a compassion that I imagine comes from a family where giving back is what you do. It’s inspiring and you can see how employees would “catch” the fever.

Third: Giving efforts are more creative and less formal

Companies interested in helping their communities are limited only by their imagination. Ideas include micro initiatives (car washes), macro initiatives (Facebook contests) and everything in between.

The United Way “Day of Caring” combined with the explosion of social media got company owners thinking and moving. In addition, nonprofit fundraising has ramped up in quantity, quality and creativity. A for-profit company writing checks to a few community nonprofits has transformed into: direct support for environmental concerns, buy-local support through employee discounts, funding nonprofit capacity building, education scholarships, community landscaping & gardening, days-of-caring and so much more. In my opinion, younger workers coming into the commercial and nonprofit workforce have influenced creativity both in how nonprofits ask for money and in how corporations are giving. Young people are also donating differently (web-based searches and analysis) pulling nonprofits into Internet-based marketing and online donations.

One small company I know selected a nonprofit through a strategic process (focused on a particular mission); underwrote production of logo wear (polar fleece vests) with the nonprofit’s logo; and sold them at a reduced cost to their 80 employees. All the proceeds of these sales were donated to the charity. Employees were encouraged to explain why the charity’s logo is on their vest when asked in the community. It’s essentially a 360 degree internal marketing campaign for the charity and a clear demonstration of the company’s commitment to the local community.

Fourth: Standards for community investment are just higher

The Human Resources group “Society for Human Resource Management“ (SHRM)considers corporate social responsiblity to be an integral component of every company’s strategic plan and something HR professionals must be prepared to help organize. I studied for the SPHR (Senior Professional of Human Resources) exam in 2009 and learned about a more integrated and institutionalized approach to corporate giving. The SHRM Learning System ® 2009 describes four phases of increased quality giving covered in the “Strategic Management” module in a section on “Ethical Issues Affecting Organizations.” That is a serious endorsement!

The phases begin with 1. Reactive corporate philanthropy, and move to, 2. Strategic contributions, 3. Mainstream involvement, and the most integrated, 4. Corporate accountability. Social responsibility is seen as an investment in the community. Employees want to work at a company that’s engaged in the community. The idea is that companies go through these phases over time as they grow. The highest level, Corporate Accountability, means employee involvement at all levels. This doesn’t mean merely giving money – it can include allowing paid employee time off to volunteer some part of every month on a nonprofit site. Yes, this approach improves the company’s image in the community but it also results more robust support for local nonprofits.

An ancillary benefit of corporations getting smarter about giving is elevated expectations for ethical and efficient nonprofit operations. Companies want to be sure their cash or time donation is used wisely and consistent with the public trust. No waste; good financial checks and balances; and other business-like efficiency practices are raising the bar for community nonprofits. Always a good thing!

Strategic Planning – Looking at the Future – Still Relevant?

Posted on October 24, 2011 by Suzi

Is your Strategic plan still relevant?

Your specific plan may have lost some relevance but strategic planning has not. A plan from 2 years ago is less useful than it might have been in less volatile times. Naturally we have questions about taking the time to do complex planning when the external environment is changing so rapidly in unexpected ways. Not only must businesses take the time away from day-to-day matters to catch their breath, but strategic thinking and planning is more important in uncertain times.

What is fundamental – hasn’t changed?

The eight key elements in the strategic planning process have not changed:

Visioning statement
Mission statement
Organizational values, philosophies and standards
Internal strengths and weaknesses
External strengths and weaknesses
Human Resources projection (new to some companies)
Financial projection
Strategic goals

Each company’s project is unique but the overall process and outline of the strategic plan will be similar. Not every company includes a specific financial projection or a human resources/talent management projection but these are fundamental to sustained success. Certainly there’s renewed interest in a few specific strategic goals: financial sustainability, monitoring the external environment and perhaps strengthening each program, product or service area to meet solid profitability goals. If your company hasn’t made efficiency a priority, you are either in a lucky market with a high profit margin or you haven’t paid attention to economic indicators. Companies will be crafting goals to take a closer look at all aspects of operational efficiency: policies and procedures, business processes, better automation, and staffing.

Human Resource management component

Leaving human resources out of the company strategic planning process can have negative consequences. There is a powerful temptation to run with very lean staff in uncertain economic times but managing this way creates the need for astute human resource management. Looking at the effect of operating over-leanly for long periods points out the issues. First: employee fatigue and burnout leads to quality problems. Tired employees make more mistakes. Second: Tired employees may move to other jobs or simply quit if they perceive that their company isn’t listening to their needs. Third: tired employees are more likely to turn into disgruntled employees. Counteracting these conditions requires a pro-active, sensitive approach to employee relations.

Financial modeling the effect of potential business actions/decisions on staffing levels and then on revenue generation can be complex. There are times when cutting staff results in real savings but staffing cuts can also reduce revenue when there is strong connection between job activities and revenue generating activities. In addition, when laid off employees qualify for unemployment benefits in a self-insured company, costs will decrease by only a portion of the salary level.

High growth companies experience challenges of another kind. Shortages in skilled labor, specialized degrees, or difficulties recruiting staff to a particular geographical area can slow growth in sales or operation functions. When calculating return on investment for expensive capital purchases, unrealized staffing projections can affect a company’s ability to meet ongoing obligations. If financial planning does not consider the true HR costs, future plans may be assembled on faulty assumptions. These are examples of how the talent management and long-range thinking HR experts bring to the planning “table” can promote sustained quality and success. HR staff is an important companion to financial management staff.

Finally, decisions to discontinue one product or service in favor of something new creates a training and development opportunity for current staff that is generally less expensive than recruiting and orienting brand new employees from scratch. If you consult staff development experts in the planning process and invest in current talent you may save money and achieve the essential new competencies within a shorter time frame.

Sharp market analysis

Market conditions – what can you control?

You will need sharper market analysis during the project planning phase. Many key product components or factors (markets, expenses, staffing, etc.) are still controllable. If you can’t control certain market factors, you can model different assumptions on a continuum that reflects a range of potential market scenarios. A simple analysis of the proportion of factors that you can control compared to the proportion of factors you cannot control is useful for preliminary decisions about which product or service lines should be eliminated or retooled. If 50% of critical market factors cannot be controlled and it’s assumed they are trending in the wrong direction over time, take a hard look.

Another piece that was important in more certain economic times but is crucial and needs more attention today is financial modeling. Sound planning must now include long-range 5 to 10 years) financial models to determine vulnerabilities if things stay the same or if things get worse. In addition, every product line should be at least break even. Depending upon your profit margin, loss leaders may not work for you unless they reliably drive customers to higher margin offerings. Finally building cash reserves; proper product and service pricing; accurate cost of goods sold assumptions; and market reliability must be carefully analyzed to ensure the capacity to weather various “storms.”

More up front project planning

The planning process will be similar to that of better economic times but because companies need sharper market analysis additional time might be devoted before the retreat. This places pressure on a savvy strategic planning steering committee to map out the data points needed before brainstorming takes place at a retreat. If no one person has expertise in this area, develop small collaborative groups spending sufficient time to roll up data and a range of options for a decision-making group to consider.

Who should participate?

A full planning group will create the vision and direction for the organization at a retreat. This group has shifted solidly away from just partners, boards or senior leadership towards a more inclusive variety of stakeholders who can offer useful perspectives. In larger organizations, subcommittees focused on certain functional areas are still needed. The larger the organization the more time must be spent in project planning, research assignments and delegating certain data gathering. Smaller organizations are inviting key influential or knowledgeable community partners who may have specialized information about a particular function or aspect of the organization’s mission.

What time period?

Most organizations are limiting the duration of their strategic plan to two years whereas the norm has tended toward three to five years. Market forces change too rapidly to leave strategic planning to every two years. This means you should think about strategic planning initiatives every other year. Planning more often will force you to get better and more efficient in your project process.

Strategic plan configuration and structure

It has always been a part of my own consulting process to ensure the plan is formatted or assembled in a way that makes implementation a natural part of how the organization functions. This is more important today because companies operate with leaner staff. Complicated plans with goals that overlap divisions or departments are inefficient. I like the model where divisions take the companies’ plan and develop complimentary plans for each program as well as the functional departments: Marketing, Finance, HR, and Technology, etc. This not only helps everyone pull in the same direction, it will streamline progress reporting, enable sharp analysis and make efficient use of management time. The strategic plan becomes the activity of departmental meetings because each group has its own goals to track. Monitoring and reporting out becomes a normalized function for every supervisor and does not fall to an administrative “planning” position.

Better use of “real-time” input when the plan is underway

An increasingly popular strategy is using technology to ensure that information about the external environment is coming into the organization during “off” planning years as a means to:

Notify leadership where assumptions were right
Notify leadership where assumptions were wrong
Notify leadership of the signs of impending significant changes
Notify leadership of emerging opportunities and threats

More importantly, I would like to see an ongoing dialogue by a wide range of employees when the plan is underway. There are a number of ways to do this. I’ve pitched using a closed LinkedIn or Facebook group but haven’t convinced my clients to try it yet. With the right IT person and enough interest I think this is achievable. We have used more conventional databases to accumulate and organize information or email bulletins which have to be compiled but these feel “old school.” As more companies try new ways, we will see creative innovation and great real-time dialogue.

How my Twitter account was spammed/hacked

Posted on October 16, 2011 by Suzi

First, my apologies to my followers for the stupid spam messages they got. It is exasperating to know that my followers were bothered in any way. Here’s what happened.

What happened

I first received a direct message from one of my followers saying that: I just saw a really bad blog about you” and a link. It was from a follower whose name I recognized and the link looked like every other link we see. Against better judgment, I clicked on the link. It brought me to a site that appeared to be sponsored by Twitter but it wasn’t exactly right.

One problem with auto-completes

While on this page, my Chrome auto complete filled in my password. I closed the page seeing that it was bogus and thinking I was safe. Too late. Next, I started getting repeated messages from my followers about these spammy messages. There were two spam messages: one that said I had seen a ”really bad blog” and one said, ”I saw a funny picture of you.”

Sent direct messages that looked like they were from me

This virus sent direct messages to people listed in my “sent” direct messages Twitter page, in the order in which they were listed there. Most recent messages first, etc. There were 200+ of these direct messages so theoretically, all of them could have been sent these messages. It appears that only 50 received them.

About 2 days had elapsed between the time I clicked on my follower’s link and the time of the first direct message. This morning, Sunday, I went onto Twitter and changed my password and then discovered the bogus direct messages sent automatically. I began deleting all my direct messages. It took a while to delete some 300 or so. Some of them were the bogus messages and the rest were messages I had sent. I tried to find a way to disable direct messages as a fail safe but this is apparently not possible.

I direct messaged a few folks who alerted me to the spam and sent two tweets warning everyone.

Authorized applications I don’t use

Another thing that happened is that a bunch of bogus applications were now “authorized” to access my Twitter. I deleted all the ones I hadn’t authorized my self.

I changed my Twitter password once more.

I also got a bunch of bogus new followers with sexually oriented female pictures and no mission narrative. I delete these immediately and always have. I was thinking this would minimize the chances of a more evil hacking. Sadly no.

It is Sunday evening now and I hope all is safe and resolved. Geez! What a pain!

6 Strategies Sucessful Banks use When Lending to Nonprofits

Posted on August 5, 2011 by Suzi

Banks with troubled nonprofit portfolios are often in a tough position. Nonprofits typically operate on peril’s edge—tight cash flow and insufficient surplus to withstand late or decreasing revenue payments. Their very nature creates a desire for a line of credit and/or loans to purchase basic operating equipment. Unfortunately, when nonprofits are late on loan payments it’s usually the tip of the iceberg. At this point, if the bank enforces loan provisions the community might view them as pushing the nonprofit toward demise. Proper underwriting, and urging nonprofits to be more business savvy, is a more responsible and long-term community stewardship strategy.

While I assume that the vast majority of banks follow sound procedures and collaborate professionally with community nonprofits, because Benoit Consulting Services works with troubled nonprofits I have come in contact with some astoundingly poor banking practices. Banks who fail to work smarter with their nonprofit portfolios will see increasing, damaging loan defaults.

Just when you think you’ve seen it all . . .

It may be hard to believe the examples described here but they are real.

>>A nonprofit Executive Director (ED) provided excuses as to why financial statements weren’t provided to the bank holding their mortgage (a loan requirement). The bank accepted these excuses. Several months later when the statements surfaced, payables had grown to over $100,000 and several monthly losses materialized in a nonprofit with very tight cash flow.

>>Bankers claimed that they were prevented by banking privacy provisions from contacting board members when a local nonprofit bounced checks over a 12-month period. In this case the seriousness of checking account issues was successfully hidden from the board by the ED. The board, not the ED is the nonprofit account holder.

>>A bank extended a personal loan to a nonprofit employee for the purpose of helping his/her nonprofit employer, creating a dual role that is hard to overcome in which the employee is also an investor/creditor. This nonprofit eventually dissolved.

>>There are more . . . .

Nonprofits and For-Profits are different in important ways

When for-profit business practices in human resources management, technology and financial management are used by disciplined nonprofits these organizations run more effectively and responsibly. However, the core business foundation is where significant differences between commercial businesses and nonprofits can be found. The nature of these differences creates implications for lenders particularly if commercial loan underwriting practices are based upon for-profit operations.

Mission, programming and funding

The areas of greatest difference are in three factors: the social mission, program development and funding. Nonprofits must concern themselves with ethics and stewardship on the effective use of public funding AND demonstrate the achievement of social service outcomes. Program and service development is often confined by funding sources. Unfortunately, nonprofit funders, particularly states are shrinking allocated funds so that grants rarely cover the actual cost of providing a program or service. This results in squeezing already tight “profit” margins. Regarding funding adequacy and improvements, nonprofits don’t have commercial investors to support capital improvements. They must set up an infrastructure to pry loose numerous small donations from interested private donors in competition with other nonprofits with equally compelling missions. Private donations are difficult and costly to raise. Finally, cash flow management is essential to avoid going into debt. Many nonprofits barely have cash sufficient to cover payroll and expenses. When they dip into the “red” they must be very careful to know where the funds will come from to cover budgeted deficits and formal debt.

Sound banking and community “ownership”

Bankers have told me that they had concerns about an executive director’s financial management practices but didn’t speak to the board thinking it’s not their “place.” On the matter of the public trust – transparency and ethics the nonprofit really is accountable to its “shareholders” meaning the whole community. This is most important when the board or executive director have not been responsible mission stewards. In my view bankers, insurance companies and other community vendors (office supplies, printers, even the person who plows the driveway) have an obligation to speak up when they suspect something is amiss such as: receiving vendor payments that are returned for insufficient funds. These vendors do represent the community but they often don’t speak up in hopes that things will turn around and they will get funds owed to them. If an executive director has hidden financial matters from the board the first notice they receive may be from an outside community party.

SIX Strategies of successful banks (when lending to nonprofits)

For the best overall results banks can:

1. Know the fundamental differences between nonprofits and for-profits – if you don’t have this expertise, get some training specifically on nonprofit financials.

2. If the nonprofit can’t produce readable financial statements – there is no excuse. This is available at very low-cost via a contracted bookkeeper using automation.

3. Underwrite the loan – if you can’t get the proper documents or nonprofit representatives don’t get back to you, take notice and speak to a board member. If the financials are troubling help the nonprofit get in a better financial position by recommending action steps, a consultant or consider serving on the board.

4. When trouble surfaces – begin the dialogue with ED AND the board right away. You can negotiate on some loan provisions but don’t let them slide altogether. The situation doesn’t usually solve itself and the longer a financial issue goes unattended, the harder it will be for the nonprofit to correct it.

5. If a nonprofit agrees on a corrective course – set up a specific date and time to meet and check in with the board AND ED. This will prevent day-to-day operations from distracting them from required improvements.

6. Understand that your account holder is the Board, not the executive director – if you have questions about the executive director, request that a board member (preferably the treasurer) sit in on meetings or meet with the board member privately.

The book, “What Banks Need to Know about Lending to Nonprofits” is available at Books for sale including richer examples and more detail regarding the difference between nonprofits and for-profit corporations.