By the end of this unit the learner will be able to: Y apply the best methods for creating, leading, and managing their own business e1 [13Unit 1 Introduction to Business Management What is Our Business? When you establish your business, you may be planning every step and thinking everything carefully, or you may jump in and start first because the opportunity is there and you want to act now, organizing as you go. If you are one of the “organizing as you go” set, you have to get strategic very quickly. You should also realize that some things will make your accountant more frustrated thanothers! Getting organized and strategic quickly means that you are able to keep your focus on your business growth, rather than reacting to things around you and potentially missing out on some opportunities. In deciding what your business is, you will need to answer several questions. You also need to be able to describe your products and services very clearly; no one is going to buy from you if you cannot describe what it is that you sell. (Note that for ease of reading, we will refer to services that are offered as a product, rather than saying “products or services” over and over.) Some people will be opposed to the thought of selling, but the truth is that if you do not sell your products, you will not be in business very long. If you do not feel that you are a strong salesperson, or you have never sold anything in the past, keep in mind that there are professional salespeople who can help you reach your goals. Test your Knowledge Describe your product(s) as simply as you can. Who will sell the product(s)? ge2|13Important Terms Sole Proprietorship ‘An individual establishes and runs a business where they make all business decisions, and are responsible for providing a product or service(s). Partnership (General) Two or more people decide to work together and share the profits as well as the risks associated with running their company. Partnership (Limited) Two or more people decide to work together. Certain partners accept more risk than others. Corporation ‘The owner of a business decides to create an entity that is separate from their own self. That business has the status of an entity. It can enter into contracts, pays tax, and files taxes separate from the people who own the business. Joint Venture Two or more people contribute goods, services, or monetary resources to a shared business enterprise. This is usually founded with a contract that all parties will sign. That contract will describe things like Profit distribution, the management structure, and who is responsible to contribute what. Franchise {An individual or a business may wish to establish and operate within parameters set by another company where the products, services, procedures, and more are all prescribed by the company. Subsidiary ‘Accompany in one country can establish a presence in another country, provided they are following all the laws and rules in the new country. The Owner's Role Will you be an owner or an entrepreneur? How about a consultant? Or a freelancer? What's the difference? Page3|13The answer to these questions is important because you get to choose the approach that you want to take based on your goals. When you consider self-employment or starting a business, you will hear a range of opinions from other people. They may think you have the best life ever and that your achievements have all been the result ‘of good luck, without any recognition at all for the hours of work, the risk, and the opportunities that you have created for yourself. Other people will tell you that you are crazy, that you need the security of working for an established employer, or that you are never going to make it in today’s economy. Don’t discount their own experiences in self-employment (if indeed they have that experience}, and keep in mind that once you have established yourself as being a freelancer, a business owner, or an entrepreneur, going back to traditional employment is not usually an attractive option. Common in all instances of self-employment are the following attributes. These are necessary characteristics for business owners, consultants, freelancers, and entrepreneurs: You must be able to admit when you make a mistake, and then learn fromit. It’s important that you can listen to the advice of others, and then sort the good from the not. so good, © You must be able to create a plan and take action onit. ‘© You need to have the technical skills required or to attract people to work the skills that you don’t. ‘© You must be able to tolerate risk. There are plenty of risks attached to each type of business. you who have Differentiation ‘A business owner is the boss within a clearly defined business. When | think of a business owner, a picture comes to mind of a small to medium sized business. The owner is the one who makes the decisions, and the business is probably going to end with him or her (or be inherited by someone in their family). An independent lobster fisherman who hires two or four people to help him on his boat during lobster season is a business owner. A hairstylist who opens her own shop and rents three stalls to other stylists (or hires them) is also a business owner. ‘An entrepreneur is usually seen as taking on greater risks than your typical owner. They tackle challenging situations and solve problems that are part art and part science. What they do will certainly ‘overlap with an owner, especially early in the business. The entrepreneur invests money that they gather from their own resources, investors, the bank, and wherever they can find the people that they need. The biggest difference between a business owner and an entrepreneur is that the entrepreneur has a long-term view that is focused on systematizing, growing, and then selling the business for a profit. A hairstylist who opens her own shop, and then creates a system for hair and beauty related services that she develops into a chain of spas across the country, is anentrepreneur. Pages |13If you want to be a freelancer because you are a great writer, editor, artist, consultant, accountant, etc., then be a freelancer. Working as a freelancer is a great way to operate as a business, and to keep the freedom that freelancing and self-employment promise. Lots of people start out as a freelancer, but then try to hire a few freelancers to work under them, Growth through hiring more freelancers can makes things tricky, especially if you still want to work as a freelancer, because someone has to also be a manager. You run a good risk of frustrating and pushing out the other freelancers, especially if they see that you selectively pick from the job jar and keep the best assignments for yourself. Instead, decide if the nature of the business is such that you are actually ‘an owner rather than a freelancer. You get to choose what you are: freelancer or owner or entrepreneur. Words of Wisdom ‘As Michael Gerber has taught for many years with his seminal books on The &-Myth, if you're an entrepreneur, you cannot grow and succeed in business by doing all the work yourself. You've got to step back and see the larger picture of the business in order to create the circumstances to move forward. If you are doing all the work, you're not systematizing a business and making it bigger; you are simply hiring yourself to do the work. if you're happy with doing the work (which Gerber refers to as working in the business and not on the business), then you need to hire a manager to run the business, and take your direction from the manager. if you want to continue in the role of entrepreneur, then you need to assume the role of manager and create a company where the people you hire do the work. Keeping Things Moving In the early days of a business, an owner or entrepreneur may attract employees who are excited about the future, creating opportunities, and working through the challenges of a new business. Once things are running smoothly, those same people who thrived on the unknown and were of great help to you may be ready to move on. You may find yourself that you are ready to move on to something new or equally engaging Test Your Knowledge ‘What will you do to keep yourself engaged in your business once the “newness” wears off? Pages |13Designing Your Organizational Structure Bringing the Idea to Life When you are establishing or making adjustments to the organization, you can make some choices about the kind of organization that you want to be a part of. Small organizations often start out with a fairly flat structure (owner and a few staff who all have direct access to the owner), but as the company grows, they also tend to become more hierarchical (employees reporting to a manager, who in turn reports to the owner). In large companies, there can be several layers of supervisors, managers, directors, and vice presidents, in something which mirrors military hierarchy. ‘As an owner, you may want to have contact with everyone, but the reality is that the bigger the company becomes, the more you will have to delegate and step back from the front line in order to manage your time and facilitate growth within the company. In addition to giving you a break from doing all the work yourself, introducing staff in senior or management roles allows you to establish paths of communication and authority (or a chain of command in more formal organizations). For example, if you are getting ready to grow and you want to hire several people, but it is also time to file the company tax return, you will run yourself ragged with advertising vacancies, interviewing, hiring, checking references, and making job offers while combing through paperwork to get it to an accountant. Instead, you could delegate the hiring process to someone who specializes in human resources. Similarly, you can delegate financial reporting, day to day accounting, bank reconciliations, procurement, payroll, and tax remittance to an accountant. Ultimately, you will remain responsible for the outcomes that you get from human resources and finance, but you will do so by meeting with the people you assign those tasks, rather than having to do the work yourself. Test Your Knowledge Identify the stress points within your organization, where you know that you need to hire people because maintaining the status quo will actually impede your growth. Page6|13Leveraging Structure When you start out, it may just be you and one other person. As the company grows, you run out of hours to get all the work done as well as doing the management tasks that are needed. Let’s say that you secure a big contract, and need to hire eight people to do the work, including an accountant and someone to do the hiring and people management. ‘The new organization chart might look like this: ‘Again, as the organization grows, we tend to add layers of management and workers to meet the business needs. Some companies will try to stay flat in order to provide those workers with the authority they need to carry on the work. At other times, they look like large, layered pyramids, like the one below. As the organization grows, people at the front line get farther away from the decision maker at the top of the pyramid, and the decision maker also gets farther away from the customer or client. mney Goon ceed ciate’ ree Er Pees coe pCa Production hnicians eiving Clerks Page? |13Organizational structure is of critical importance. If you are currently a small business that wants to grow, establishing the right structure will help you adapt to changes in the business environment. In addition, although we speak of structure, we have to keep in mind that the work is performed by and relationship developed with people. if you forget the human part of your business, you aren’t going to find much support fort Looking at the Options The types of structures we have talked about so far are functional structures: the typical pyramid where the CEO is at the top and the functional positions report upward to the CEO. This, however, is not the only option. In order to work within larger environments, particularly when you are working across time zones, borders, and among different cultures, it’s essential to be able to communicate throughout the organization. Each structure that we will describe below has strengths and weaknesses. You will need to ‘weigh the options out and perhaps experiment in order to find what will work best for you. Geographic Structure ‘A geographic structure, where there is a regional Vice President addressing the needs of each region, could be organized as follows. While this sometimes brings things closer together in terms of time zones, you'll note that the cross cultural mix will require attention to language, culture, and regional business practices . usa Americas Conde Meno oraz Venezuela United Kingdom Europe, Middle ~threcaraosme CEO East, Africa Eavee (EMEA) South Africa Germany Japan Asia-Pacific awa china Pages |13Divisional Structure In another example, where a multinational company needs to organize differently, they may implement a divisional structure, where people are organized according to their product. The example below is for a soap manufacturer and distributor: Matrix Structure Another format that is becoming more common in global companies is a matrix structure. The company is divided into horizontal and vertical silos according to geography and function, or sometimes products. Page9|13‘Summary Each of these structures has benefits, and each has weaknesses. At their best, people can develop and share what they learn through their scope of work through a best practice approach, creating a stronger and more viable organization. At their worst, infighting, negative political environments, and internal competition can be extremely disruptive to the organization. Business leaders, including the CEO, need to be very knowledgeable about every aspect of business administration and leadership. Test your Knowledge ‘What strengths and weaknesses do you see in these structural options? How would you overcome the weaknesses? Who is in Charge? Differences for Corporations Although we speak of structure frequently, being overly rigid about structure can be a deterrent to getting things done. Being flexible is required to succeed in today’s marketplace, where we frequently deal with large multinational and global enterprises. Page10|13If the business is to be established as a corporation, there are additional organizational factors to consider. In a corporation, there is not one owner as there is in a proprietorship. A corporation is owned by the shareholders (although the founder of the company may hold some or even all the shares). The corporation is led and managed by a Chief Executive Officer (CEO), who in turn is governed by a board of directors. The CEO leads and manages the operations of the company, while the Chairman of the Board leads the board while governing the CEO. In looking after the shareholders’ interests, the board takes responsibility for making sure that the money the shareholders invest (or for non-stock operations, the interests of government, an agency, a university, etc.) is looked after. This puts a heavy onus of responsibility on members of the board, even in ‘a small company. Choosing Board Members It’s not uncommon for the CEO to “recommend” people for the board, and then those individuals are granted admission by the board with what's called a “rubber stamp” approach. This means that the board does not really know the applicant, but merely agrees to do the CEO's bidding. Sometimes the ‘governing body of an organization (as in a college) will select the members for the board. it’s up to the chairman of the board to supervise the CEO and to determine whether the selection process and nominations are in the best interest of the organization. To reduce the threat of conflict of interest or the selection of inappropriate board members, you are discouraged from having the same person in the positions of CEO and chairman of the board Note that in non-profit or not-for-profit societies and agencies, the CEO is often referred to as the Executive Director. Board Issues When a board is dysfunctional, or a weak board is run by a domineering CEO, it’s possible for the corporation to falter due to mismanagement. People who accept a board nomination are obligated to make themselves fully aware of their responsibilities, and not just jump at the chance to be on the board of an organization they wish to support. ‘A member of the board legally has obligations associated with that position, and in an age where the public and shareholders are demanding more accountability, members of the board will be held to a greater degree of responsibility than they have in to past. These responsibilities include, but are not restricted to: Monitoring the actions of the CEO Ensuring that the company meets the bylaws of theorganization Making sure that the company remains financially sound and is audited according to thelaw Ensuring that the company meets regulatory obligations that are established by governing bodies, like industry and government Page’a|13The Role of Shareholders It should also be noted that in the past, individuals often purchased shares (or stock) in a company, which made them a shareholder. If the company went out of business, the individual could lose their savings as the stocks lost value. Nowadays, it is more common for groups of people (as in mutual funds) ‘and corporations to hold stock in different companies. This represents vast amounts of money being offered by shareholders, who, in any economic crisis, have experienced tremendous financial losses. AS @ result, the duty of responsibility assumed by members of the board of directors is becoming more highly regulated in many areas of the world. The Big Picture In a corporation, the organizational structure of a small business can evolve into something like this: In some countries, depending on the law and governance, this structure can look different, or you will see the board referred to by other names, For example, there may be a board of directors that is managed by a second board (sometimes called the executive board). Page12|13Words of Wisdom In his book Up the Organization: How to Stop the Corporation from Stifling People and Strangling Profits, Robert Townsend presents an irreverent and funny look at how organizations and their structure pigeon- holes and bores people. Although the book was written in 1984, it remains very relevant when we consider organizations that are committed to their hierarchies, treating executives with all kinds of perks ‘and incentives that are unavailable to everyone else (special parking spaces, business class travel, learning opportunities, etc.). Townsend considers this a reflection of power. While these things seemed appropriate fifty or seventy years ago (before the workforce started to become well educated), they are no longer appropriate where we now have workers who are as valuable (or even more so) than their managers are, in terms of education and experience. Current Thinking, Current thinking encourages organizational behavior that influences, as opposed to older practices of controlling employee behavior. However, in many workplaces, the reality is that power and control are strongly applied. Organizational behavior and industrial psychology are sometimes considered as extensions of the power applications of big companies, but they can be applied strategically to strengthen and improve organizational performance as well as individual and group engagement and satisfaction. The application of systems theory is one way that openness and feedback are incorporated within an organization. This is where we see owners and managers learning what it means to be a learning organization, where they: ‘© Display a commitment to lifelong learning and development for themselves and their workers ‘© Demonstrate leadership qualities as opposed to management-only practices ‘® Embrace a commitment to engaging their workforce purposefully Introduction to Business Management 9th Edition by S Rudansky- year e} ee a ne a ee a Botha, M. Cant, M. Jansen van Rensburg, L. Krliger, November 2019 Page13|13jon to Business Management a ASSESSMENT # 1 Total Marks: 30 Q:1, Short Questions (20) i. Define the following terms: a) Sole Proprietorship b)_ Partnership (General) ©) Corporation 4) Joint Venture How a business owner is different from anentrepreneur? ‘What are the different organizational structure options available for asmall business? ‘What isa role of stakeholders in a business? Q:2. Discuss in detail the role of CEO ina business. (20) Business Management Certifications for Professional Development —_PagtBy the end of this unit the learner will be able to: ¥ Discuss techniques for setting up an effective and efficient system for hiring, retaining, and succession planning ¥ Explain how to apply financial and accounting terms correctly. 1) 12Unit 2 Operations Management Defining Operations Management Operations management is about how you do what you do every day to make sure that the business is running efficiently. The nature of your company will decide some of these things, naturally, but the actual functions don’t differ at all. An operations manager may look after other elements of the business as well as operations, depending on the size and complexity of the operation. Operational functions include: © Designing Planning Organizing Directing, Controlling This means that we: Gather resources (ideas, people, space, and money) ‘© Design products and/or services and decide how to deliver them ‘© Sell, distribute, and service those products and/orservices ‘® Learn and improve the operation based on feedback Operations is called a transformational process, because we take an undeveloped product (or service), make it into something that we can sell, and then sell it. While this transformation takes place, we apply our operations strategy to it. If we drew the process, it might look something like this: Page2|12Types of Operations You'll need to carefully determine the type of operation you run so that you can remain flexible for changing markets and still meet licensing and regulatory requirements. In Canada, for example, anyone can set up a sole proprietorship and work from home. However, that same person might have to get a business license from their town or city to be allowed to have customers visit. The tax department has rules about how income is treated and what items you can write off against that income. In addition, while some businesses have to abide by regional rules (a company that manufactures car parts, for example), transportation businesses like airlines and trucking companies have to abide by federal regulations. As your company scope grows and you wish to do business across regions or in other countries, you have to follow those rules, too. When we talk about operations management, we generally categorize the business in the following ways (with plenty of overlap just to keep things interesting!) © Manufacturing © Transportation © Supplies © Service Manufacturing This is about things that we physically make, such as picnic tables, computer components, rakes, and tractors. It also includes the way that we run factories, manage inventory, and perform related activities. Transportation This is how we get our materials to our customers. It can include a fleet of delivery vans, large tractor- trailer units, taxis, and aircraft. ‘Supplies These are products that someone purchases from the company. Retail stores, grocery stores, and equipment for dentists are all supplies where the ownership starts out with your company and then changes over to a purchaser. Ser Service can refer to customer service that the company provides. For example, a server in a restaurant provides a service, as does the chef who prepares the meal. Service can also be provided by someone in a call center who answers the phone when customers call with questions. Perhaps we need to rent a car for two weeks, in which case we are using a rental service. Part of the service application can also include the way in which the company collects feedback (customer surveys, for example) or the way they process purchases (in person with cash or a credit card, on a smartphone, oronline).. Page3|12Overlaps Naturally, there are companies who provide products or services that come from more than one area. This adds complexity to the operations management function, but is of the business world, For example, ‘2 company like Ikea Furniture has operations around the world. They manufacture and distribute furniture and accessories to their stores, and then sell, deliver, and in some instances assemble or install those purchases. They are involved in business as a manufacturer, a transportation provider, supplier, and service, Buffers You will also see businesses who build buffers into their operations system. For example, a company that makes computers needs a steady supply of equipment and components in order to produce a complete unit. If @ particular component is unavailable, the company cannot meet their manufacturing demands, and their customers will look elsewhere for their computers. AS a result, the company may stockpile critical components in order to meet thelr targets. They also may arrange for backup suppliers or, to minimize the risk of a supply shortage, they'll also use several different suppliers. Practical Application Test Your Knowledge Take the role of operations manager and put your operations strategy into the template below, considering the functions completed at each stage of the process. Be specific! Pages |12Understanding Financial Terms ‘Accounting Terminology Finance The Encarta Dictionary defines finance as, “the business or art of managing the monetary resources of an organization, country, or person.” Bookkeeping, banking, and accounting, are all separate processes with their own definitions. Seth Godin describes finance as a three-cycle process that continues endlessly a Recording Financial Transactions Bookkeeping is the exercise of identifying, categorizing, and recording all the transactions that take place in a business. In general, everything a company does results in a bookkeeping transaction, including things that take place between the businessand: Customers, who buy products and services sold by thebusiness Employees, who are paid wages and provided benefits Vendors, who sell services, equipment, and supplies to the business Government agencies, who collect taxes from the business Sources of equity capital (investors or owners who put money in and take it out of the business) ‘© Sources of debt capital (banks and lendinginstitutions) ‘Accounting, on the other hand, is the methodology used to record the transactions and prepare financial statements and reports. Accounting guidelines govern how businesses record transactions. They also PageS|12dictate the design of the recordkeeping system that a business uses and how reports are prepared, based on the information gathered and put into thesystem, General Accepted Accounting Principles (GAAP) ‘Accounting is simply a measurement. Measurements allow for consistency. Just like everyone knows what one foot (or 30 centimeters) of distance is, the business owner (or CEO) and all stakeholders should be confident that they know what a company’s assets are. The accounting concepts and standards that govern consistency are called generally accepted accounting principles (GAAP). ‘There can be slight differences between regions, but GAAP typically includes the following principles: ‘= Comparability among different companies ‘* Reliability of information '* The business entity concept: A business is a separate distinct entity from its owner/owners. '* The matching principle: Earnings and expenses must be recorded in the same accounting period that they relate to each other. ‘© The cost principle: Assets and service, and the resulting liability, are taken into the accounting records at cost © The consistency principle: A company’s accounting procedures need to remain consistent over time. If they are changed, the reasons for the change and the financial impact of the change must be documented in detail ‘©The time period principle: The operating period of the business is divided into equal periods of time, such asa month or a quarter. ‘The going-concern principle: The business will continue to operate, using its assets to carry on its operations and, with the exception of merchandise, not offering the assets for sale that are necessary to run the business. ‘© The objectivity principle: Whenever possible, the amounts used in recording transactions are based upon objective evidence rather than on subjective judgments. '* The stable currency assumption: The idea that the purchasing power of the unit of measure used in accounting (such as the dollar or the euro) does not change. (In other words, a dollar bill wll not become worthless overnight.) ‘® The realization principle: This principle defines revenue as an inflow of assets (not necessarily cash) in exchange for goods or services. It requires the revenue to be recognized at the time, but not before it is earned. Key Reports The Income Statement The income statement can also be called a profit and loss statement or operating statement. This is a summary of the income and expenses of a business during a certain period: monthly, quarterly, or annually. Ifthe company has more income than expenses for a certain period it has net income (a profit). If the expenses exceed income, the company has a net loss. Page6|12Income can be broken into two broad categories: service income and sales income. The difference between the two lies in the need to consider inventory costs. Service income is derived from performing a service while sales income is derived from selling a product. In general, service companies have staff that perform a service for a customer, while sales companies have product that they sell. With service income, the profit can be determined simply by deducting expenses associated with performing the service. With sales income, however, you must consider the cost of creating the product (raw materials, labor, overhead, etc.). This inventory cost is referred to as the cost of goods sold. Income Statement Equation The income statement equation typically looks like this: Revenue is what the business earned from the sale of goods and services during this period. Expenses are bills (phone and Internet bl, insurance, payroll, advertising, etc.) incurred during this period. ‘© Net income or loss is the net financial result of the business efforts during that period. It must be added to the Equity portion of the balance sheet, which we will discuss in a moment. ‘Some examples of the types of accounts that influence net income and are reported on the income statement includ © Revenue Advertising expenses Repair expenses Utilities expenses Wage expenses ‘Sample Income Statement ‘Acme Widgets Inc. Income Statement For the Month Ended February 28, 20%x REVENUE Widget Sales $20,000 Widget Installation $1,500 Interest income $500 Page? |12EXPENSES Rent Utilities Advertising Wages Total Expenses NET INCOME (LOSS) The Balance Sheet ‘The purpose of a balance sheet is to show what a company owns and owes as of a specific date. Income statements are prepared “for the period ending” and balance sheets are prepared “as at” a certain date. The balance sheet summarizes what the business owns and compares it to what the business owes. it does so in a standard format to make it easy to see what kind of financial shape the business is in. If a business has more assets than liabilities, that’s a good sign. On the other hand, if a company has more liabilities than assets, it might be a sign of trouble. Balance Sheet Equation ‘© Assets are anything that the business owns. Some examples: cash, office equipment, vehicles, tools, real estate, buildings, and land. Bills that are prepaid (such as monthly insurance premiums) are also considered an asset, as are accounts receivable (money that others owe toyou). ‘* Liabilities are anything the business owes to others, including banks and suppliers. Money which a company owes as a result of its ongoing trading are generally called accounts payable. ‘© Equity is often a measure of what the business is worth. It is the combination of profits and money invested in or withdrawn from the company by itsowners. This is what people refer to as balancing the books: ensuring that this equation is always in balance. Pages |12‘Accounts typically reported on the balance sheet include: ‘© Accounts receivable (money owed to the company but notcollected) © Gash Equipment Accounts and notes payable Prepaid items Unearned revenue Vehicles, land, and buildings, and their accumulated, individual depreciation (decrease in value) ‘The term consolidated balance sheet refers to the “consolidation,” or adding together, of individual balance sheets of various related companies into one balance sheet which shows the financial position of the entire group of companies. Current vs. Fixed Assets (On a balance sheet, the assets of a business are generally broken down into two groups: current assets and fixed assets. Current assets are generally considered to be anything that will be converted into cash within one year, such as cash, accounts receivable, and inventory. Current assets continually tum over through the company. Fixed assets are more permanent in nature. This includes vehicles, equipment, machinery, land, and buildings. They represent an investment in items that are necessary to carry on its normal operations. Fixed assets can also revolve (to purchase new equipment or update technology, for example) but usually they revolve very slowly. Liquidity measures how quickly a company can convert its assets into cash. An ample cash balance provides security that the company can meet its obligations. The easier the conversion is, the more liquid the asset. Here is alist of current assets in order from most to least liquid: © Accounts receivable © Inventory © Fixed assets Cash Flow Statement This shows the flow of cash for an accounting period. This statement is a bridge between the cash accounting method and the accrual accounting method in that it analyzes what transactions impacted cash and what were accruals. The cash flow statement is usually divided into three sections. Page9|12Operating ‘© Cash flow for day-to-day operations '* Examples: Customer revenue, tax payments, interest, supplies purchased Investing ‘© Cash flow generated from or consumed by assets ‘© Examples: Sale of a vehicle or purchase of a building Financing '® Cash flow in from selling stocks or bonds or borrowing ‘® Cash flow out from purchasing stock back, paying out dividends, and repaying borrowed money Statement of Retained Earnings This statement shows how much of the company’s profits were kept inside the company, and not paid out in dividends. ‘Sample Statement of Retained Earnings ‘Statement of Retained Earnings for Acme Widgets Inc. ‘As At February 28, 20xx Opening retained earnings 0 ‘Add net income for the period | $3,300 Total Retained Earnings $3,300 Minus dividends paid (300) Retained earnings $3,000 Getting the Right People in Place Six Essential Steps of Hiring When you know you are stretching beyond your capacity, or you need some additional expertise, it could be time to grow your team! Here we will present a step by step process from thinking you may need someone, to bringing that person on board. Even someone who works in a sole proprietorship needs the support of others to keep their business running smoothly, so we encourage you to consider every aspect of this section. Page10|12Step 1: Determining That You Have a Position to Fill Look at your organization with a long range view and review your goals for growth and development. This will help you to create and fill the right position, rather than creating a position that is perhaps serving you in the short term, but doesn’t give you the results that youintended. Step 2: Doing Your Homework ‘Once you decide on the position to fil, you'll need to create a position profile or job description so that you know the type of expertise you will need to recruit. This will put you through an exercise of determining what tasks can be completed by this person, and whether you will hire the person full time, part time, on contract, or as a consultant. Step ecruiting This is the process of finding and attracting the people that you want. Whether you do this yourself or use the expertise of a recruiter, it’s important that you find the right people. In many cases, the people that you want to hire are already working. You'll need to find a way to reach them specifically. The way that we recruit and hire has changed dramatically in the last several years; we don’t always advertise in the classified section of a newspaper anymore. Companies almost exclusively want e-mail and electronic submissions, but there are plenty of people who do not search the internet looking for work if they are happy in their job. You have to find them, rather than expect them to be looking for you. In a tight labor market, or when highly specialized skills are required, your ability to network, research, attract, and retain people becomes an essential skill Step 4: Selecting The next step is to sort through your candidates and select the best candidate. Interviewing is the standard for determining if the person might be a good fit for your company. Formal testing helps to assert whether their claims of certain abilities and skills are valid, although there are legal issues that can arise if you use invalid tests. The other challenge to testing is that some people are really bad at writing tests, and you might pass on a candidate who could be a great fit for the company and has the ability to learn what is needed just because they do not test well. Reference checking, which is becoming more ‘and more difficult due to privacy concerns, is still relied upon and necessary to validate a person’s work experience and their formal education. step fering You know who you want, and in this stage you offer them the job. During this conversation, you need to have information gathered that includes the salary you are willing to offer and terms of employment (contracts the candidate will have to sign, benefit entitlement, vacation, hours of work, expectations of the job, etc.). You also need to know to what extent you are willing to negotiate the contract, since your candidate may have some ideas about what they are willing to agree to Page’ |12step rientation and Onboarding This is both the final step in the recruiting process and the first steps that the individual takes as a part of, your organization. When employers do this badly, good people (whom they spent a lot of time and resources to find) leave the organization. Or worse, they wish they had left but continue to collect a paycheck from you while they keep their eyes open for new opportunities. Be prepared for the new person before they start thelr new job, and then be ready to provide them with ‘a welcome so that they start off on the right foot. This means that their workstations are ready (whether this is a cubicle, a position at a cash register, or the cab of a truck), people know they are coming, and that orientation forms are ready for them to sign. People take from two to six weeks to decide whether they have made a good decision in starting a new job: your job is to engage their interest and commitment during the recruiting process, which might be well before they actually start work with you. If they arrive on the first day and cannot enter the building because they do not have an access pass, things are already off to a rocky start. The orientation period includes that critical first week or two the person is on the job, while they adapt to their new surroundings, and get familiar with their position and the team. ‘Onboarding is something we look at with a slightly longer lens than orientation. Onboarding is about the development of the individuals career within the new environment. Depending on the job itself, it can take from six months to a year or more for someone to feel fully competent, which may include ‘experiencing a full cycle of the business. Your responsibility in the onboarding process includes providing the newcomer with appropriate feedback, ensuring that they are developing the skills and expertise to succeed (which benefits your organization), and that they are engaged in the work they are doing, Y The Operations Management Journal: Learn the skills used by the leading management consulting firms, such as McKinsey, BCG, et Cees One ead Oe ee aaa ET eee in Operations Management) 12th Edition by Lee Krajewski Page’2|12= Operations Management s ESS Sea Bee a1. ‘Short Questions (22) |. Define operations management. I. Discuss the types of operations that take place in operations management. IIL, What is the difference between Accounting and Bookkeeping? IV. What is income statement? and what type of information itcontains? V. How would you differentiate current assets from fixedassets? VI. What isa balance sheet? Cash flow statement is usually divided into three sections. What arethese? Explain using ‘examples. (8) 2a) Discuss in detail the six essential steps of hiring. (20) 'b) Think of the recruiting process that you are using now and answer the questions below: «Are you using all six steps that we have outlined? ‘© What are you missing? ‘© How can you incorporate what is missing with the process outlined here? Business Management Certifications for Professional Development Page:By the end of this unit the learner will be able to: ¥ Discuss how to start researching and designing a strategic plan ¥ Discuss techniques of succession planning 4/43Unit 3 Strategic Planning Introduction to Strategic Planning As a process, strategic planning describes how your company will create ongoing value for your stakeholders. Unlike a project, which has a defined beginning and end, the strategic plan is threaded through the organization and is part of the ongoing operation of the business. Strategic planning helps to take the high-level concepts described in your mission, vision, and values statements and have them brought to life by the activities and attitudes of every member of the organization. Sometimes, we think that stakeholders are automatically our customers, but unless they are also shareholders, that’s not really the case. Your customers are your customers, and they purchase the products or services that your company sells, but they may not have a stake in the company at all To help you figure out who your stakeholders are, consider these questions: '* Are there investors in your company? If so, those investors are stakeholders, and they want toget a return on their investment. '* Are you supported by taxpayers (through a government department perhaps, or a non-profit agency that is supported and paid for by government)? If so, taxpayers are stakeholders and they are represented by government ministries. Although they may not expect a monetary return on their investment (like a dividend), they will expect that their investment is protected and used appropriately. ‘© Are you a non-profit or not-for-profit company? If so, members of the board of directors are stakeholders, and trustees can be as well © Are you a part of a privately held and managed company? If so, the owner(s) are the stakeholders. They want a profit so they get a return on their investments (which may include ‘money and time). It’s essential that you agree on who the stakeholders are before proceeding with strategic planning. Strategic planning has to be a balanced approach in order to properly represent what is actually achievable. You need to be very aware that some of these areas might be competing for resources and attention, which can create some big challenges in the planning process. People responsible for the strategic planning sessions need to create an open, balanced forum for discussion where all areas are heard and represented within the plan. Failure to do this properly and well means that you won't get the support for the strategic plan when it is ready to be launched. Your strategic plan will define four or five key areas of focus for the duration of the plan. These key areas will be used to achieve the mission while reflecting the company’s values and vision. Page2|13In addition to creating a strategic plan for the company, individual departments may create a plan to complement the organizational one, and are structured in a similar way. In larger organizations, it is not uncommon to see that the areas of human resources, customer service, sales, marketing, and others may all have a strategic plan that reflects the company plan. Test Your Knowledge What areas of competition can you identify within your organization? ‘What can you do to assist in creating a broader understanding of all the areas and how they are tied together? The Strategic Plan Pyramid In order to look at all areas of strategic planning, we'll use a pyramid process, which starts at the bottom and moves upward: Page3|13‘An important criterion of strategic planning is that it not a project, nor does it stand alone from other programs in the company. Instead, itis the underpinning for everything that takes place. It demonstrates for people who conduct the work every day that what they do is connected to the purpose of the company. It helps to facilitate a shift from focusing on the high-level concepts of values, vision, and mission statements, to where the work is taking place. Goal Setting and Goal Getting Setting Achievable Goals Identifying Outcomes Before you start thinking about the specific goals you will set, you need to think about the outcomes you are after. These should be founded in the values, vision, and mission of the company. Paged|13For example, you might want to set a goal related to customer satisfaction. However, if lowest prices are also a goal, are you certain product quality and service will be such that all customers will also be satisfied? How are your goals influencing one another, and perhaps creating conflict? Another consideration before moving into goal setting is the length of your sales cycle and the return of your customers. if you own a mortgage brokerage and people renew their mortgages every five years, do you need to ensure that you are getting referrals in order to fill up your sales pipeline? How will you incorporate that in your goals? The Four Perspectives Typically, your strategic plan (and therefore your goals) will focus on four perspectives, similar to strategy maps used in the balanced scorecard process. Financial What non-tangible investments do we need to make? What results do we want to see? Customers What does success mean to our customers? Internal Processes How will we achieve our financial and customer perspectives? Typically you will focus on four major areas: Operations management Customer management Innovation Regulatory and social Employee Learning and Growth ‘What non-tangible investments do we need to make? Typically you will focus on three major areas: ‘+ Human capital: What people do we need in place for success? What knowledge resources do we need? ‘* Information capital: What information sharing and technology resourcesneed to b '* Organizational capital: What cultural and leadership supports should be in place? place? Customizing the Perspectives ‘These perspectives are only intended as a guideline. Various companies have also chosen to include perspectives on: © Operational excellence ie. improving processes with Six © Cutting edge innovation ma or Leanmethods} Page5|13© Quality © Suppliers © Stakeholders Timeline for Your Plan When it comes to strategic planning and goal setting, there are different lengths of time to consider. Typically, a strategic plan looks at long term goals. n a flat organization (with few layers of management) the results can vary widely, but these plan lengths are common in many hierarchical organizations. 5-10 years: Owner/CEO/board 5 years: Vice presidents) 23 years: Directors 2 years: Managers 1 year: Supervisor 6-12 months: Frontline staff Let's take a closer look at what's involved at each level. t's up to the company leadership (owner, CEO, and/or board of directors) to first Identify objectives that reflect the values, vision, and mission that match the duration of the strategic plan. (Five years is not unusual, and sometimes there are 10 year plans.) The leadership works with senior managers (typically vice presidents or directors, depending on how the company is structured) to set objectives that follow the direction. These objectives have a long term scope of up to three years. Next, the objectives get filtered through to directors and are based on shorter timeframes that fit the strategic plan, before they reach front line staff and their immediate supervisors, who typically work on goals for the upcoming 12 months, Goals with SPIRIT ‘Once you know what the objectives are, and how far ahead you are looking, it’s time to create goal statements (also called objectives or targets). We recommend that you use a systematic approach to writing your goals to make them easy to remember, and to make sure they are captured completely. We recommend setting goals with SPIRIT, which means that they have the following elements. Specific Be specific about what you want or don’t want to achieve. The result should be tangible and measurable, “Sell more products” is ambiguous, but “Increase market share by 7% per year” is specific. Prizes Motivation is extremely important. There needs to be a system in place so that we take time to recognize, reinforce, and reward people who are participating in meeting benchmarks and overall objectives. Prizes don’t need to break the budget. Here are some ways that you can reward people: '* Acknowledge an individual or a team in a meeting ‘© Offer praise through a company newsletter ee6 13‘© Issue bonuses (monetary, points systems, ete.) ‘© Record successes in notes for annual performance reviews For goals that are a long way off, set up rewards along the way to help keep people engaged. Individual Employees will respond to, and be motivated to work toward, goals that they can relate to. They need a way to relate to their goals on an individual basis. Establishing goals and tying them into performance objectives will put the big picture into terms that they can relate to. This also provides a way to share the big picture with them and let them know what direction the company is going in. Review Review progress periodically. Do the goals still make sense for the short and long term? Are people's activities a good demonstration of the strategic plan, or have they wandered off track and taken to pursuing their own personal goals? Are you measuring as you go and making adjustments, or is it more important to stay the course? Inspiring Frame the goal positively so that people relate to it strongly, even if the goal has a negative outcome to it, If the costs of your employee benefit plan are increasing, you'll find that cutting programs can demoralize a workplace. Instead, involve your employees and ask what they are willing to concede. You might be amazed at how innovative they are! Instead of having a goal like, “We must cut 15% of our ‘employee benefit plan budget” try something like this: “Through a process of employee consultation, we will identify and implement savings of 15% to the employee benefit plan in the next 12 months.” Time-Bound Give yourself a deadline for achieving the goal. If the goal is quite large, break it into smaller pieces and assign a deadline for each one. Succession Planning What is Succession Planning? Whether you are building a small or large company, if you want to ensure continued success, you must take action for the future. You and your key staff have large shoes, and the future of the company relies on filling them well. A strong succession plan means that you have people in positions that can be ready to take on more responsibility with short notice. These are the same people you want in place so that you can plan for some vacation and restoration time! ee7|13Replacing vs. Succeeding Succession plans were first used by family owned companies as a way to ensure that the business stayed in the family; it was common for the children to be “groomed” to take over the business. The process has evolved slightly as businesses acknowledged the intensive research and preparation required to replace CEOs and key members of the company. Today, succession planning means that businesses complete developmental, support, and search activities to ensure that the organization continues effectively when people who occupy key roles leave or are promoted. There are different types of human resource planning that go on. Here are three of the most important pieces of any plan: '® Succession planning is an aspect of workforce planning that concentrates on key positions. within the organization. Workforce planning involves all positions within the organization, Replacement hiring is a response to a vacancy; succession planning is a proactive process that, addresses needs before they exist. In other words, succession planning means that we are working long term, like we do when we invest our retirement savings. This is different than hiring in response to a vacancy. Defi jing Succession Planning ‘The Definitions ‘As you read each of the points below, decide whether they fit what you already know about replacement. hiring or succession planning. Then, write RH or SP as appropriate in the box next to the statement. Discuss each point with your group to determine any subtle differences, areas of overlap, or questions that may arise. Description SP or RH? ‘Quick answer to immediate need Long-term commitment. Developing individuals Based on current job descriptions Based on new directions and expanded responsibilities to the job description Uses input from the incumbent and supervisor Pages |13Description SP or RH? Uses input from multiple perspectives and resources May offer advancement within the organization as a reward or result of seniority Considers whether the right person is in the right role and merits advancement ‘Addresses developmental needs of an individual to ensure success in current. and future roles |s integrated with recruiting, training development, and diversity factors Must usually be done quickly and is not consistently coordinated with other human resources activities Can lead to finding the best person available at the moment Focuses on the best candidate for the position Managing Your Money What is a Budget? About Budgets Running a business is not for the faint of heart or everyone would do it. A budget is a plan for what you plan to spend, and it must be taken seriously. If you establish a budget for a particular area, make sure you are not going to cut it three months from now, or you will upset business operations beyond your wildest nightmares. Business owners will sometimes set a budget, run into a problem, and respond by cutting spending. If the budget was set up and people are conducting your business affairs with the money being spent (just ‘as you would expect), and then you come back with a budget cut, there may be things in place that are very difficult for you to stop, Instead, you must establish a realistic budget with some buffer space available to respond to crises that you cannot predict. You should also make sure that you are applying sound accounting practices, like those that we discussed in Session Five. In addition to what you are learning about accounting and finance, we've got four rules for establi your budget. Page9|13Test All Assumptions Budgets are not just about numbers, they are about assumptions. When you set the budget, you are going to have managers who come back to you and want adjustments because things were missed, ‘expenses are going up, and/or there were unexpected delays or cost overruns. In order to avoid these debates, it’s important that your numbers can stand up to the assumptions that you made in establishing the budget. How Was Last Year? ‘As a new business, this question is unfair, because you need to have time in business to know how much things will cost. Establishing a budget for a new business is part science and part shot in the dark, so you need to be sure that you have all the available information. Make sure you are able to gather the details you need, and if you have been in business for less than a year, be cautious as you plan for spending this year. Everyone will be asking for resources. Make sure you have them available and that you are not throwing all your hard earned money out the window. How’s The Marketplace Doing? Budgets are created for internal use, but your business is heavily influenced by external forces. What happens when the economy takes a beating? Can you thrive through bad weather, an economic downturn, stiff competition, and transportation or labor disruptions? How will you do it? What's It Costing? Your accounting should be able to tell you the per unit cost of every product you sell. Remember to ensure that overhead costs (like mortgage, rent, and utilities) and departments that do not produce direct revenue (lke IT, human resources, and training) are all worked into the numbers. Know how much you are spending, where you are spending it, and when. Managing Your Budget Keeping Things Straight If you don’t follow the budget, your people won't either. You've got to manage spending, and you need to come in at or slightly below the budget. Resist any urge to go even slightly over budget. Instead, consider what things you can economize on and which priorities can wait. Set an example of fiscal responsibility within the company. Always keep in mind that if you go over budget by 3% and so does everyone else with budget responsibilities, you are creating a deficit that has to be overcome by increasing sales. Know Your Accruals Cash is pretty easy to count, because it’s either there or it isn’t. The thing that gets new business owners into trouble are the accruals. If you pay cash for something, the amount is debited from your bank Page10|13,account. However, if you purchase something on a credit card or using a purchase order, you don’t pay for it right away, even though you can use whatever you purchased. If you have several orders placed in ‘one month but do not intend to pay the bill until next month (or in the next business year), you may be stunned by the accumulation of those costs, just lke the hidden ice under an iceberg. In accrual accounting, you count the money for credit card or deferred payments right away, so there is no delay in seeing what money is going to come out of your bank account. ‘Accruals on purchases counts the same way on your sales. Cash accounting will only show you received a payment when it arrives. Accrual accounting, however, will count the amount now even if delivery to the ‘customer will take seven days and their check won't arrive for fourteen days after that. ‘Accrual accounting gives you an accurate picture of what is happening in the business, although it takes some adjusting to if you are used to cash accounting. There is also some discretion with accruals accounting as you debate whether something is considered “sold” at the time of the order or with delivery. Getting it Right ‘There are challenges with both types of accounting. If, for example, revenues look short at the end of the year, managers may be inclined to report revenues and wait to recognize costs in the next year. This puts a slant on your reporting that will have to be fixed later anyway, so make sure that your auditing functions are clear and tight, no matter which method you use. Ethics ‘Are You Ready? If you choose to develop an office code of ethics, it must be more than just a statement on the wall. It must truly be a code that you do business by. You must be prepared to change some of the ways you do business. You must also be prepared to commit to those ethics for a code to succeed. You must be willing to look for staff who commit to these ethics. ‘A.code of ethics, when properly implemented and followed, can have the following benefits. '* Happier employees: A code of ethics can relieve tremendous pressure on employees by giving them a moral compass that they can make decisions by. '* More consistent decisions: if everyone knows the company’s standard of right and wrong and commits to it, decisions made within the company are more likelyto ‘® More committed employe al office environment will likely produce more committed, loyal employees. In summary, when developing a code of ethics, make sure you and your company are prepared to live by it, Make sure input is obtained from everyone, even if it’s just through a survey. And make sure people are committed to it; otherwise, it’s just another piece of paper on the wall Page’a|13Sample Codes of Ethics Let’s take a look at some sample codes of ethics. As we're going over them, try to think critically to prepare yourself for some discussion. The Ten Commandments You shall have no other gods before Me. You shall not make for yourself a carved image—any likeness of anything that is in heaven above, or that is in the earth beneath, or that is in the water under theearth, You shall not take the name of the Lord your God in vain. Remember the Sabbath day, to keep it holy. Honor your father and your mother. You shall not murder. You shall not commit adultery. You shall not steal. You shall not bear false witness against your neighbor. 410, You shall not covet your neighbor's house; you shall nt covet your neighbor's wife, nor his male servant, nor his female servant, nor his ox, nor his donkey, nor anything that is your neighbor's. vpeuanae (Source: The Bible, Exodus 20:1-17) Rotary Four-Way Test Of the things we think, say, or do: Is it the TRUTH? 2. Isit FAIR to all concerned? 3. Will it build GOODWILL and BETTER FRIENDSHIPS? 4. Will it be BENEFICIAL to all concerned? (Sources, Minnesota Principles Proposition # 1: Stimulating economic growt! society. We understand that profits are fundamental to the fulfillment of this function. ‘the particular contribution of business to the larger Proposition #2: Business activities must be characterized by fairness. We understand fairness to include equitable treatment and equality of opportunity for all pa the marketplace. Proposition #3: Business activities must be characterized by honesty. We understand honesty to include candor, truthfulness, and promise-keeping. Page12|13Proposition #4: Business activities must be characterized by respect for human dignity. We understand this to mean that business activities should show a special concern for the less powerful and the disadvantaged Proposition #5: Business activities must be characterized by respect for the environment. We understand this to mean that business activities should promote sustainable development and prevent environmental degradation and waste of resources. (Source: htto:/Avww.cebcalobol.ora/index.php?/about/the-minnesota-principles/) ‘Asimov's Three Laws of Robotics 1. Arobot may not injure a human being or, through inaction, allow a human being to come to harm. 2 Arrobot must obey orders given to it by human beings except where such orders would conflict with the First Law. 3. Arobot must protect its own existence as long as such protection does not conflict with the First (or Second Law. (Source: http://en.wikipedia.org/wiki/Three Laws of Robotics) ¥ Strategic Planning for Public and Nonprofit Organizations: A Guide to Strengthening and Sustaining Organizational Achievement (Bryson on Strategic Planning) Part of: Bryson on Strategic Planning (2 Books) | by John M. Bryson | Jan 4, 2018 A aa ed ee a ee eae Page13|13Strategic Planning ASSESSMENT # 3 BT EH (15) Q:1, Short Questions: i. How would you identify the stakeholders for your business? ii, What is strategic planning? What type of information is contained in a strategicplan? iv. What is SPIRIT? Outline the elements of SPIRIT. v. What is succession planning? Q:2. Outline the key benefits of succession planning. 7) Q:3. What are Ethics? How does implementing codes of ethics help businesses? (8) Business Management Certifications for Professional Development PageBy the end of this unit the learner will be able to: ¥ Discuss how to develop a customer service strategy for abusiness ¥ Discuss the techniques for managing employees performance 1) 12Unit 4 Building a Strong Customer Care Team The Pillars of Success What is Customer Service? Customer service is the way you treat the people who support your company. These can be paying customers (external customers) or staff members (internal customers). The customer's perception of that service is what brings them back to you again and again. Great service is what they cite when they send referrals to you. People who provide good customer service (regardless of the nature of their business) earn Psychological benefits in addition to any rewards offered by their company. If you are unhappy in your Job, take an objective look at the kind of service you are giving. In almost every case, your job satisfaction mirrors the satisfaction people feel when doing business with you. Giving poor service is a way of beating up on yourself. The Critical Elements of Customer Service There are really just six elements of customer service. ‘Acustomer service focus Defined within your organization Given life by the members of the organization Be a problem solver Measure it Reinforce it Test Your Knowledge Service is a philosophy—not a department, a program or a policy. ge2|azService means meeting, not necessarily exceeding, and customer expectations. is not always natural, automatic, or coincidental. The Remaining Elements Critical Element Two: Defined in Your Organization Standards are helpful because they let us know what is expected of us. They also tell us what we have to do in order for our work to be considered satisfactory by our supervisors or managers Standards also need to meet the expectations of our customers, while still being reasonable. The customer may feel that the phone should be answered on the first ring, but the company may have a standard of two or three rings. Since this is pretty close to what the customer expects, it might be considered close enough. However, we should make certain that our standards are meeting or exceeding. the expectations of our customers. The only way to do this is to ask our customers, on an ongoing basis, if they are satisfied with the service In order to meet expectations, we need to know what the standards are. Here are some sample standards ‘© Ifcustomers ask to have their repairs completed in 24 hours, and your standard turnaround is, three days, you have to be clear on what you can do. Page3|12ere © Ifemployees are driving company cars that they sign out as needed, a standard may be that the car is returned with a full gas tank. If you have not set standards yet, perhaps now is the time to do so. Critical Element Three: iven Life by the Employees If we make a commitment to providing excellent customer service, that commitment must be demonstrated by all of our employees, from the front line people right up to the CEO. When the commitment is only demonstrated by some employees, our customers will sense that there is a gap and their experience with the company will be diminished. Critical Element Four: Be a Problem Solver Conflict occurs when the emphasis is on the differences between people. The more divided you seem to be, the more differences there are. You get along better with people when the emphasis is on similarities. The difference between conflict with a friend and conflict with a difficult person is that with a friend, the conflict is tempered by things you have in common. Obviously, then, maximizing common ground and minimizing the areas of difference are key steps in reducingconflict. Instead of managing through conflict, we want you to solve problems. Here is a great process to solve problems for customers and to achieve solutions. expectati aero Reet Ercra) ol heir problem Paged az(A note on Step Three: Ask them what they really want! Sometimes it is not very much and it is easy for you to meet their needs.) Critical Element Five: Measure It Wouldn't it be great if all of our customers were happy and we didn’t have to deal with complaints or problems? The only way to know what's really going right and wrong is to measure regularly. You can measure a particular service or product in great detail. Follow up with customers and ask what's working, what can be improved, and how much they like it. Also ask them what could be done differently to develop options. Then assess the advantages and disadvantages to determine whether it makes sense to make changes. Critical Element Six: Reinforce It ‘Once an organization decides how they are approaching customer service and makes a commitment to their processes, they must live up to the expectations that they have subscribed to. Just as important, those practices must be reinforced. If you are receiving pay (whether it is hourly, salary, or by commission), then you are getting paid to do your job. That is often enough external motivation to deliver what is expected, when it is combined with internal motivation. Sometimes companies will put enhanced reinforcement in place by doing things such as: ‘* Having customers complete a survey about the service they received '» Having supervisors observe when we do good work andprovide some kind of recognition © Celebrating when targets are met, like an increase in returningcustomers All of these activities are @ way to reinforce our commitment to providing excellent customer service. They reflect the relationships we build within the organization and with our customer base. Developing and Maintaining Relationships Relationships are the key to a functional, positive customer care team. There are several important concepts involved when developing and maintaining relationships with your team members and your customers. Clear Expectations Every partner in a relationship has certain expectations of other partners. Most expectations remain unspoken until they have been violated. One way to develop and maintain effective relationships is to make your expectations of one another clear. eeS| 12Recognizing the Reciprocal Quality of Relationships We can use the reciprocal nature of our relationship with others to estal and trust. Remember two clichés: “It’s a two-way street,” and, “You only get back what you gi interpersonal cooperation Understanding Different Communication Styles We can communicate more successfully with others and establish more meaningful relationships if we not only understand others’ styles, but can also attune our styles to theirs in a complimentary way. Recognizing the Power of Your Behavior The better you are at connecting with other people, the better the quality of your life. Is there a natural talent for getting along with people, oris it something we can learn? The truth is that it’s a bit of both. Likeability Works, No matter what you do or where you live, the quality of your attitude determines the quality of your relationships, not to mention just about everything else in your life. The good news is that attitudes are yours to select. And if you are free to choose, why not choose a really useful attitude? In face-to-face situations, your attitude precedes you. It is the central force in your life; it controls the quality and appearance of everything you do. In telephone communication, you have to work a little harder to overcome the absence of body language. When communicating electronically, you have to be able to overcome the absence of tone of voice. Are your people ready and capable to communicate in any situation? Training Employees for Success Why Continuous Learning? You might be of the opinion that you have a business to run, and people need to take responsibility for their own learning and do it outside of work. There is merit in that argument, but we want to share the idea of learning organizations, as written about by Peter Senge in The Fifth Discipline. Init, he writes that ‘one of the most compelling factors in support of continuous learning is the rapid pace of change we face today. Technology is evolving continually, corporate structures are frequently reshaped, and job responsibilities are always shifting. ‘Translating learning into productivity involves several steps: 1. Understand how learning takes place, so that you can understand the most effective ways to learn. 2 Identify critical areas of responsibilty 3. Develop goals. 4, Intentionally transfer skills and tools learned back to your workplace in a relevant and meaningful way. Page6|12Learning involves two important factors: willingness and ability. if you have boundless opportunities but no desire to assimilate the information, real learning won't take place. Similarly, you can be eager but lacking in the appropriate skills; again, the opportunity will be lost. Your success at learning depends on attitudes and experience, too. 1s continuous learning marked by ‘opportunities or obstacles for you? If learning is not a priority for you, it likely is not going to be a priority for your people either. While many people say that they learned most or much of what they needed from a mentor or a good boss, there is also value in a solid education that helps us to separate what’s good from what's not so .g00d. If the only managers you ever worked with had no interest in helping you develop your skills, you learn nothing. Instead of thinking of training as taking you away from your work for two or three days at a time, we are going to challenge you to see training as a way to look at your workplace through a different lens, and to see learning as 2 way that people experience other points of view. We're not suggesting that you have to apply every theory that you learn, but we do know that adults learn in predictable ways, and that the way you train them (or hire a trainer to provide training) has a big impact on what they retain. ‘Steps in the Learning Process When you are learning, the process can seem complicated and confusing, but there are really only four basic steps in learning, These four steps occur time after time, each one building on the earlier ones. if you understand these four steps, you control one of the basic keys to increasing your ability to learn, both in workshops and in real life. eee eee eee) ere) collect information parares Mee eae srr rere Page? |12Test Your Knowledge How will the cyclic nature of the way we learn impact your influence as a business owner? Leadership Essentials Leading and Managing Not all managers are leaders. You might have a brilliant vision and all kinds of people to help you achieve it, but if people are quitting before they come to work with you, or they quit mentally but stay on staff, it's time to evaluate your ability to lead. It is not a sign of failure to admit that you are not a capable leader. it’s a sign that you need leaders who can ead! Management is about the technical aspects of a job. Leadership is about inspiring people to give their best. Often, both roles fall to one person as a manager, but we also know lots of people who are leaders without a leadership role, who lead themselves capably and have people who look to them as mentors without even trying. Leadership models abound, although there is one that really resonates with us that we will share here with you. In the work done by Paul Hersey and Ken Blanchard on the Situational Leadership II" model, they recognize four leadership styles. As you read about the different styles, think about where your own comfort level rests. Director's Style Someone with a director's style does well with new employees, who seem to easily respond to being told what is expected, having processes and procedures outlined for them, and having someone they can Pages |12report to or ask questions of regularly. The director's style is defined by a high emphasis on directing tasks and being able to account for results. Coach's Style Coaches are able to blend supporting people and directing tasks. This is available to a leader when ‘employees understand what is expected, but need some range of support in order to take independent steps and make things happen. A coach’s style has a high degree of involvement in directing tasks, with ‘an equally high emphasis on supporting people. Supporter’s Style This style encourages people to come up with solutions and solve problems on their own. It provides them with the support they need in terms of tools and resources. The supporting style shows a low degree of directing tasks and a high emphasis on supporting people. Delegator’s Style Delegating means that the delegator holds responsibility for results, but that the work is done by others. We delegate to individuals who have high levels of related skill and the experience it takes to locate their resources and tools. Then they can report to the delegator at defined intervals. This style is one with a low emphasis on directing tasks, and an equally low emphasis on providing people support. Understanding Your Comfort Zone Test Your Knowledge Where is your current comfort level... With your current direct reports (or colleagues, committee members, etc.)? With one staff member that you may be having problems managing? geo liz(On a project that you are currently a part of? We all have a comfort and ease with one style, but there are times when staff performance, our own confidence, or a crisis demands that we behave differently. When new people join the team, they understandably will need a level of direction that can be quite high and will leave little time for supporting people. As they gain skill and confidence, the leader can progress to a coaching style where they are still directing tasks but also able to offer additional support. ‘As the employee makes progress, the leader provides more support and less hands-on direction until the direct report has the ability to accept delegated tasks. This process can be cyclical. For example, a team that you can easily delegate to might go through a significant change or have a new system being implemented. You might have to start again with directing behavior before moving on to coaching, supporting, and then a return to delegating. It might look like this: Page10|12We also might encounter structures that do not allow us to delegate, which can be a tough job for someone who is a capable and effective delegator. Managing Performance When you consider different aspects of leadership, you can learn from the insights of global business leaders and research in order to make your own foray into leadership as effective as possible. One of the areas that many business owners and leaders struggle with is performance management. We are very .g00d at identifying the things that people do wrong (or the gaps in their performance), but we may not be as good at recognizing their success. For example, if you complete a project and 90% of the work is exceptional, a typical manager will ask why you missed the other 10%, Instead of looking for gaps and managing performance from a negative perspective, think of our job as leaders as one to help people do more and do better. Empowerment means that leaders make sure that people have what they need to do their work, while stil being accountable for what they do. Often, leaders will congratulate themselves when things are going well, and then look for people and outside factors to blame when things are going wrong. This is unfortunate, and a sign of how our egos can stops us from being truly effective. In Jim Collins’ bestseller Good to Great, he talks about humility in leaders. Humility allows a leader to realize that it’s not about him or her; leadership is about making sure that people have what they need in order to do their best work. Humility is best demonstrated by action — and not the self-serving kind of actions either! Humility is doing what needs to be done without fanfare. It's not demonstrated by updating social networking sites and bragging about the things that you have done. Test Your Knowledge What kind of performance manager are you? Do you look for gaps and apply negative pressure to your employees to get more out of them? Pagea|12Or are you focusing on what is going right in order to build on those successes? Demand-Side Sales 101: Stop Selling and Help Your Customers er eth a Ceo Knowledge Management for Help desk and Customer Care: How to build an effective knowledge base -a roadmap to success Oe ml Eee od e12 | 12Ql Building a Strong Customer Care Team ASSESSMENT # 4 BT EH :1. Short Questions: (16) L What is customer service? IL How would you differentiate between internal customers and external customers fora business? I Outline the key elements of customer service Iv, Whatare the key points to consider for developing and maintaining relationships with your ‘team and customers? 0:2. Discuss various styles of leadership. i) 0:3. What is empowerment? And what is the relationship between performance management and ‘empowerment? a Business Management Certifications for Professional Development Page: 1By the end of this unit the learner will be able to: v v v acy Understand the value of working as a team Develop team norms, ground rules, and teamcontracts Identify your team player style and how it can be used effectively with your own team Build team trust Identify the stages of team development and how to help a team move through them Recognize the critical role communication skills will play in buildingand maintaining a team atmosphere Identify ways that team members can be involved and grow in a team setting Paget|@Unit 5 Building Better Team What is a Team? We like Glenn Parker's definition of a team: “A group of people with a high degree of interdependence geared toward the achievement of a goal or the completion of a task.” (From “Team Players and Teamwork” by Glenn Parker) What Does That Mean? This means that members of a team agree on a goal and agree that the only way to achieve that goal is to work together. Some groups have a common goal but they don’t work together to achieve it. For ‘example, many teams are really groups because they work independently to achieve their goal. Some ‘groups work together but they don’t have a common goal. Types of Teams Knowing the type of team you are in can help you choose how to plan your work and what you expect as ‘outcomes. Teams are everywhere, and their role as part of an organizational framework continues to ‘evolve just as businesses and marketplaces do. From a practical perspective, most of us belong to multiple teams, with sometimes competing priorities. Let’s look at some of the most common types of teams. Natural Work Groups This is a group of people who work together each day in the same location, using the same machines and processes. The supervisor isin charge, but they may allow other team members to take the leadership role. Business Team Often a cross-functional team that looks after a specific product line or service. Management Team ‘A group of managers and the person they mutually report to. a single organization, there can be different levels of management teams (executive, middle, and front-line, for example). Page2|23Self-Managed Team This isa group of people who manage themselves. No one person in the group has the authority to make all the decisions about the events that impact the group. This is also referred to as a self-directed work team because everyone has authority and responsibility for all the decisions they have to make. Product/Service Design Teams ‘This is a group that comes together for a specific time to work on a special project or task. This group has traditionally been called a task force or committee. They are usually a cross-functional group assigned to design or redesign a product or service. Virtual and Remote Teams With this type of team, members see one another in person rarely or not at all. They connect most frequently using web portals, the Internet, telephone, and e-mail. What makes these teams different (and sometimes challenging) is that they have to work together to accomplish goals, but they may not know each other that well. They can also fit any of the models listed above. Test your Knowledge Into which model does your team fit? Why do you feel that way? How would you define your team? ‘What model would be the ideal one for your work together? Page3|23Establishing Team Norms Characteristics of Teams Disadvantages Ground Rules Having ground rules helps every team to succeed. Ground rules ensure that people on the team know what is expected of them, and that they all understand where they are going. Pages |23Use the space below to list what you want and don’t want in a team. Don’t Want What are the three to five rules that are most important to your group? Team Contracts team contract outlines the ground rules for the team. It is created and then monitored by the team. ‘Some people get offended by the idea of a team contract; it’s not ideal in every situation. We have included a sample contract below. Each team member should sign and date the contract. Pages {asSample Team Contract Code of Conduct ‘Asa team we will: © Be proactive and positive © Keep other team members informed '® Focus on what is best for the team as awhole Ground Rules We will: Be respectful, fair, and honest in allcommunications Encourage opinions and discussion from all members Be open to new approaches and listen to newideas Look at conflict and change positively Work together to achieve maximum results Follow best practices for decision making, communication, and meetingmanagement Celebrate accomplishments and milestones Meeting Guidelines Each meeting begins and ends on time Team has an agenda for every meeting and sticks toit Team members agree to prepare for meetings Cell phones will be muted (or perhaps not, if you are encouraging people to openly participate, share their thoughts, and accept the prevalence of these devices in the workplace) Working as a Team Success in the workplace depends on your ability to build a team and to interact with others on that team, Together, people can accomplish what one person alone cannot; this is called synergy. However, it isn’t always easy. Sometimes when we think about controversial subjects, our first response is to try to get away, or to make your involvement as short as possible. We have another way to look at agreements and disagreement, and that is to look at how strongly you feel about something instead of having to choose a firm position on one side or the other. Page6 [15No Need for Black and White Thinking ‘As team members, we need some way to take the temperature and find out where people stand on an issue. This is a great tool to put on the flip chart, overhead, or just provide as a handout. It can help people decide where they stand on an issue. The Degrees of Support can help a team leader or member explain that consensus does not mean that everyone agrees to the same degree. The circular nature of the diagram (which reflects the symbol for degree, or °) demonstrates how we may increase or decrease the strength of our commitment to a decision in response to getting more information, consi different perspective, and moving through the area of disagreement. Degrees of Support \ / Ss 3 Little in life is really that clear that it needs to be discussed in terms of an absolute yes or no. Like the diagram, we really consider things in terms of degrees. Making agreements or clearing out conflict allows Us to do the same thing. The team leader can also ask questions of team members, such as “What changes to the project/task/plan do you need to have implemented in order to move toward agreement?” Your Team Player Type What's Your Team Player Type? There are many ways to discuss the personality types of people that we work and play with. Whether YOU use initials like the MBTI (Myers-Briggs Type Indicator), colors like Personality Dimensions, Page7|15edutainment like True Colors, the names of animals, or Greek philosophers, the idea is that there are base temperaments that we can relate to, and that we prefer. The science behind this kind of assessment relates back to the work of Carl Jung. It has been substantiated through tens of thousands of people who have completed and validated the questionnaires. Scoring Example ‘Add the total number of points that you wrote beside each letter of the alphabet in the questionnaire. Pay close attention, since the letters are not always in order! scale © 4= Most like you © 3=Alot lke you * 2 = Somewhat like you © 1= Least like you Terms 1. Adriving need for youis: C To find meaning in life A Tolearn and gain knowledge 8 Tobelong D Freedom to do what you want Scoring Pages [15Your Score Total A's, Total B's Total C's, Total D's The letter with the highest total is most like you. Write it her The other letters are your next preferred styles. If your numbers are close to each other (within S points), you probably find it pretty easy to flex your style to those other categories. if your numbers are far apart, or one is much lower than the others, that isthe area you will find it challenging to work within. You'll have the knowledge of how to do it once you work through the material below. ‘What Does it Mean To Have a Number? In reality, we are a blend of all types, moving within the numbers and flexing into the other styles that ‘our circumstances and our comfort levels dictate. This means that we are more like a blended drink than distinct ingredients. You'll recognize that you may behave one way at work (super organized, for example), and might be more relaxed at home, but return to your super organized self when stress at home increases. ‘As you read the descriptions below, see if they agree with how you behave as a member of your team at work, whether you are in meetings or working on a project. You'll also get some insight into how to connect with the different types in the descriptions. Mostly A’s — inquiring Rationals Inquiring Rationals are often drawn to jobs like banking and engineering. They like to figure out how things work. They consider the structure and configuration of things. They process information intuitively and look at the big picture. These are visionaries, like Albert Einstein and Bill Gates. When itis time to make decisions, they apply logic, and they don’t get persuaded by emotions. If they don’t respect you, you won't keep their attention. Experience and competency are very important to Inquiring Rational. Page |15temperament profile makes up approximately 5 to 7% of the population. Other notables in this group are Walt Disney, Ben Franklin, Margaret Thatcher, and Napoleon. To connect with Inquiring Rationals on your team, demonstrate your expertise in your work ‘As a member of the team, you are the person who keeps track of things, most often with checklists and guidelines. You can be counted on to know what the assignment is and when itis due. You get frustrated with team members who are not big on details, or who want to try something new. You like to follow a recipe and you know where your tools are. You probably don’t like surprises very much. Most of the time you complete assignments in a timely and efficient manner, with all the needed detail You also share the information and materials you have with other members of the team, and provide the technical training or background that they need. People usually see you as dependable, systematic, proficient, practical, and efficient. Too much logic might mean that you are demonstrating some rigidity. Tap into your sense of humor and try to keep other people's styles in mind, especially if you are leading a team. You may go into data ‘overload with long reports, push for unrealistic standards, and tend to lose patience with team climate and process issues. Mostly B's - Authentic Idealists Authentic idealists are natural teachers, counselors, and leaders. They are benevolent and intuitive, and they focus on global issues like world poverty and humanitarian issues. Idealists love metaphors, stories, and symbols, rather than statistics and figures. They make decisions that reflect their values, and rely on ‘emotion and instinct as opposed to logic. In fact, statistics and facts bore them. They are looking for significance, and they seek the truth. The Authentic Idealist temperament makes up about 10% of the population. Notable members of this group include Eleanor Roosevelt, Billy Graham, Mahatma Gandhi, Jane Goodall, Oprah Winfrey, and Albert Schweitzer. Authentic Idealists are people-oriented. They don’t want to rock the boat, and their focus is on having everyone in harmony on the team. They can focus more on people's feelings than results. They will step in to resolve process problems (for example, with conflict or lack of involvement), listen attentively while withholding judgment, and offer praise and recognition to other team members. To connect with the Authentic Idealists on your team, share your values and personal convictions. Be authentic and reach out to them by telling stories that demonstrate your empathy. Appeal to personal Paget [15ethics and @ higher calling. Show that you care about them and each person in the room. Authentic Idealists are more interested in how much you care than how much you can cite statistics. If your teamwork style is that of an Authentic Idealist, your strengths include making deep connections with your team at an emotional and personal level. You motivate and encourage. You're a good storyteller, so you find innovative ways to present your information. You have wisdom to share and are ‘eager to do so. Your lack of ego about what you know makes you likeable. You have a sincere ‘enthusiasm and empower people to act. People see you as encouraging, enthusiastic, supportive, humorous, and relaxed. ‘Areas for development include a tendency to be overly sensitive to others. You're intuitive and will interpret meaning behind everything, This also means that you can get distracted by reactions of other individual in the audience, and that can make you lose track. You may see team processes as an end to themselves and fail to challenge or contradict other team members. Make sure that you are well prepared for areas you are responsible for, and that you accommodate other members of the team by being sufficiently serious and aware of the bottom line. Mostly C’s - Organized Guardians Organized Guardians are extremely dependable and loyal, and they play by the rules. They have an ‘amazing work ethic, stay down-to-earth, and they like routine. They are thorough and orderly. At times they are too serious, but they are practically always serious. They are good at taking care of other people. They want to hear about the bottom line, and they want the facts. Organized Guardians will consider charts and graphs and follow a well prepared presentation longer than most people, but they can shut down when too much emotion is presented and may get bored with stories. This temperament makes up 40 to 45% of the population and includes people like Queen Elizabeth ll, Mother Teresa, George Washington, and Colin Powell. With their respect for tradition, they ‘are drawn to the military and policing. These are also the people who will pass traditions to their children and grandchildren. To connect with Organized Guardians on your team, be concise, organized, and support statements with data. Present information in a logical sequence, and don’t wander off down a tangent. Quote other experts. Expect, and encourage, them to collaborate. I you are an Organized Guardian as a team member, you will be very logical and organized. You'll take notes, and you'll know how to find them. You're a big picture thinker, looking for the better way to do things. You can be persuasive, and you don’t need to be tied down by excessive details. You see the n, mission, and goals of the team as paramount. You are flexible to new ideas and willing to help out even in areas outside of your defined roles. You are willing to share in the limelight with the members of Paget [35the team. You work hard to meet your objectives. People usually describe you as forward-thinking, cooperative, independent, flexible, and imaginative. Your weaknesses can be predictability. The data will be there, but you may have to remind yourself (repeatedly) to give the group opportunities for self-discovery and application. Draw on your compassion for others to add emotional depth to your work and an appreciation of the strengths of others. ‘Sometimes you may be tempted to publicly complain about team failures. Resist the urge! You may ‘overlook the mission at times by being too future oriented, or lose sight of tasks. Resist the urge to dream, and get on with the doing. Mostly D’s ~ Resourceful Artisans Resourceful Artisans crave action and live in the moment. They are very social, confident, and persuasive. Donald Trump, Steven Spielberg, and Madonna are notable Resourceful Artisans. They're witty, playful, and fun. if they had a message to share, it would be that the world could lighten up a little. Like Organized Guardians, they can also perceive the world concretely. They can get bored with visionary tasks. They enjoy stories that they can easily relate to and imagine happening to them. This temperament makes up about 35% of the population. To connect with Resourceful Artisans, be real and spontaneous. Engage them with questions and discussion. Be prepared for them to challenge your ideas, and at times, authority. They will play the devil's advocate and look for weak links in anyone's argument. If you're Resourceful Artisan, your strengths include energy, personality, and creativity. Bui interaction when you present your work to leverage your spontaneity. You are a natural storyteller, so tell some stories. You will encourage action, and you have good listening skills, so you are responsive to your team. While most people will appreciate your candor, it may take some practice before you know when to back off an issue. You will challenge the team to take well-considered risks and push them toward high ethical standards. People usually see you as candid, honest, principled, assertive, and ethical. in some Your weaknesses can show up in your organization and structure. Because you are living in the moment, You might avoid the homework that goes into the development of a brilliant report or presentation. You might avoid preparation and be willing to rely on spontaneity, but then you are less focused on content. Be careful not to be so spontaneous that you miss a good opportunity to deliver a powerful message. You can be too direct in communicating with other team members, and sometimes become rigid and inflexible. Avoid painting yourself into a corner by knowing when to back off. Paget2 [15What's Important? We all have preferences for how we do things, and now we hopefully understand a bit more about them. It's also important to remember that we ALL have the range of preferences described here. You might be mostly A, but call on behaviors that are more closely associated with B, C, and/or D as needed. You might also be very close in your results to more than one type, so you'll find it easier than other people to flex your own style in response to what the group needs. It’s important to have a range of types in our workplace and on each team that we work with, The strength of having some people looking after facts and figures while others can appeal to emotions, spontaneity, or reinforce the importance of rules and tradition, makes our business effective. It’s the blend, that presence of different temperaments with in a multitude of strengths, which keeps our world fascinating, My Team Style What are your individual strengths? What are your individual weaknesses? What are your team’s strengths? What are your team’s weaknesses? How can you shore up the weaknesses and leverage the strengths? Page13 [15Building Team Trust Why is Trust Important? Trustis one of those mainstay virtues, and a hallmark of high performing teams. tis the bond that allows any kind of significant relationship to exist between people. Once broken, itis not easily, if ever, recovered. ‘Trust is produced in a climate that includes four elements: Honesty: integrity, no lies, no exaggerations Openness: A willingness to share and receive information, perceptions, opinions, and ideas Consistency: Predictable behavior and responses Treating people with dignity andfairness We can ask a team that is starting out to assume trust; to treat everyone as though they trust one another and to be trustworthy to each other. This is a reasonable way of sharing with the team that you are also putting your trust in them. Just keep in mind that trust is fragile. If any one of the elements listed above is breached even once a relationship is apt to be severely compromised, even lost. With trust gone between individuals, teams have little hope of functioning well and realizing their true potential ‘What happens when teams trust each other? They can focus on the issues at hand and get things done quickly and efficiently. Team members are more likely to take risks and share their thoughts andfeelings. They can devote their energies to coming up with creative solutions and working together to solve problems. ‘© They experience a greater level of synergy. '* Team members often find that if they need help, others are more willing to pitchin. Building Trust Share a recent incident when someone (such as a parent, sibling, friend, or co-worker) violated your trust. Pageta|asHow did you respond? Does the other person realize that they have lost your trust? Brainstorm specific behaviors that tend to undermine your trust in others. Knowing that these behaviors erode your trust in others, what will you do to help others trust you? Be specific. The Stages of Team Development ‘As early as the 1970's, researchers were discovering that groups of individuals working together go through four distinct stages of development. The most famous representation of this model is Tuckman ‘and Jensen's Forming, Storming, Norming, and Performing model, Over time an additional stage has been added to reflect the natural end to a group: Adjourning. The stages are similar to human development: infancy, childhood, adolescence, adulthood, and old age. ‘One of your roles as a team member or leader is to help the group grow and develop. Sometimes the team is together for a very short time, so you will try to move them to a productive stage as quickly as you can. Other times, the focus will be on relationship building ‘Think of how you felt when you learned you were coming to this workshop. While that isn’t a perfect, ‘example of the other stages of team development, you may see a resemblance between how you felt tupon learning you would be in this workshop and how a new group or team member might feel. Pagets [15‘Stage One: Forming. At this stage, team members: May be anxious, adapt wait-and-see attitude, and/or be formal Have no clear idea of goals or expectations Need to get to know oneanother May not be sure why they arethere Aleader can help by: Planning introductions and anorientation Using icebreakers Establishing ground rules Determining decision making methods Stage Two: Storming Atthis stage: ‘Team members are eager to get going and they may be impatient with delays Conflict can arise as people bring different ideas of how to accomplish goals People notice differences rather than similarities '® Some members may drop out mentally or physically Aleader can help by: Modeling appropriate behaviors Separating problems from people Enforcing ground rules and their role by maintaining control of theprocess Keeping in mind that conflict can behealthy To move to the next stage, participants have to put the needs of the group ahead of their personal interests Stage Three: Norming At this stage, team members: Begin to recognize ways they are alike Realize that they are in this together as ateam Get more social May forget their focus in favor of having a goodtime Page 16 [15Many groups don’t make it to this stage, where there Is much more cooperation and understan previous stages. During this stage, the leader should: © Be observant of emerging group behaviors ‘© Encourage the team to express their differences positively '® Help the team to stay focused on theirobjectives Stage Four: Performing At this stage, team members: © Are mature © Understand their roles andresponsibilities Want more input in processes Are self-motivated and self-trained The transition to this phase happens as a demonstration of high levels of trust. However, the team can be susceptible to “group think,” so a leader must help ensure that individual ideas are considered. The leader must avoid intervening in the process unless the group becomes stuck and begins to flounder, or they regress to a previous stage and erupt in conflict Stage Fi : Adjourning ‘At this stage, team members are: '* Winding down and sayinggoodbye ‘© Setting goals for futurework independently and/or as part of new groups Groups may adjourn because they finish a defined project or because they are no longer challenged. if there are new members, that can shift the group into a previous stage. In this phase leaders can support the group by: Celebrating participants’ participation Describing what's goingon Looking for and encouraging contribution from everyone as the group winds down Encouraging continued productivity Paget [15Forming an Effective Team Not all of us will take the same approach to forming a successful work team, but success may hinge on taking all of the steps we just discussed. There is a tendency to want to surround ourselves with people who are just like us. f you get to choose a team, you'll need to look at things carefully and create a team of people with a variety of strengths. For a team that is already in place, organizing may be more subtle. For example, you might call the team together to discuss what you want to accomplish (goals) and how everybody can help. You will find that imposing goals on people doesn’t work nearly as well as having them tell you what goals they will strive for. But setting goals is hard work. Too often they end up too unrealistic, too vague, impossible to measure, or stretching into eternity with no deadline. ‘As well, itis important to take time for reflection and evaluation. Was that last project as successful as it might have been? What could have been done differently? Make sure that you apply these lessons learned to your next project. Test Your Knowledge How do you think you can create a positive team environment? What environment do you like to work in? Paget [15How can you apply this to your team? Team Building with TORI Originally developed by Jack and Lorraine Gibb in 1978, the TORI principles of team building still hold true today. © Tis for Trust: Interpersonal confidence and absence offear. * Ois for Openness: Free flow of information, ideas, perceptions, andfeelings. © Ris for Realization: Self-determination, doing what you want todo. * is for Interdependence: Reciprocal influence, shared responsibility, and co-leadership.. Scoring Sheet Criterion Group1 | Group2 | Group3 | Group4 | Groups Distance of Flight Hang Time (Length of Flight) Visual Appeal Creativity Teamwork Total Page19 [15Communication Defining Communication What is communication? Here are you, the audience: here am |, the speaker. What kinds of barriers can come between us? One thing most people do is make a lot of assumptions about the people they come into contact with, Team members often assume they have interpreted others’ comments correctly, and they assume that others understand perfectly what they are trying to say. They also assume that others will react as they would to different situations, Listening Skills Two of the most powerful communication skills are our ability to listen and to ask questions. Good listening skills are crucial to team building. Remember the saying, “God gave us two ears and one mouth so we can listen twice as much as we talk.” Page20|15‘Active listening means that we try to understand things from the speaker's point of view. It includes letting the speaker know that we are listening and that we have understood what was said. This is not the same as hearing, which is a physical process, where sound enters the eardrum and messages are passed to the brain, Active listening can be described as an attitude that leads to listening for shared understanding. When we make a decision to listen for total meaning, we listen for the content of what is being said as ‘well as the attitude behind what is being said. Is the speaker happy, angry, excited, sad...or something else entirely? Responding to Feelings The content (the words spoken) is one thing, but the way that people feel really gives full value to the message. Responding to the speaker's feelings adds an extra dimension to listening. Are they disgusted ‘and angry or in love and excited? Perhaps they are ambivalent! These are al feelings that you can reply to in your part of the conversation. Reading Cues Really listening means that we are also very conscious of the non-verbal aspects of the conversation. What are the speaker's facial expressions, hand gestures, and posture tellingus? Is their voice loud or shaky? Are they stressing certain points? Are they mumbling or having difficulty finding the words they want to say? Demonstration Cues ‘When you are listening to someone, these techniques will show a speaker that you are paying attention, provided you are genuine in using them. Physical indicators include making eye contact, nodding your head from time to time, and leaning into the conversation. You can also give verbal cues or use phrases such as “Uh-huh,” “Go on,” “Really!” and, “Then what?” You can use questions for clarification or suramarizing statements. Examples: '* "Do you mean they were charging $4.00 for just a cup of coffee?” © "So after you got a cab, got to the store, and found the right sales clerk, what happened then?” Page21|23Tips for Becoming a Better Listener '* Make a decision to listen. Close your mind to clutter and noise and look at the person speaking with you. Give them your undividedattention, © Don’t interrupt people. Make it a habit to let them finish what they are saying. Respectthat they have thoughts they are processing and speaking about, and wait to ask questions or make comments until they have finished. '* Keep your eyes focused on the speaker and your ears tuned to their voice. Don't let youreyes wander around the room, just in case your attention doestoo. ‘© Carry a notebook or start a conversation file on your computer. Write down all the discussions that you have in a day. Capture the subject, who spoke more (were you listening. or doing a lot of the talking?), what you learned in the discussion, as well as the who, what, when, where, why, and how aspects of it. Once you have conducted this exercise 8-10 times, you will be able to see what level your listening skills are currently at. © Aska few questions throughout the conversation. When you ask, peoplewill know that you are listening to then, and that you are interested in what they have to say. Your ability to summarize and paraphrase will also demonstrate that you heardthem. '* When you demonstrate good listening skills, they tend to be infectious. if you want people to communicate well, you have to set a high example. Becoming a Good Team Player No matter what you do or where you live, the quality of your attitude determines the quality of your relationships, not to mention just about everything else in your life. In his book Tribes: We Need You to Lead Us (2008), Seth Godin encourages everyone to be a leader. Leadership doesn’t belong to someone who has “leader” in their job description: it’s really up to all of us. If we all take a leading role, that means there are people who will follow. Generate a list of things that you can do to increase interaction among your team, build trust, or otherwise get the group being productive. Page22|23Or et ee ee) CE de ee a ed Cm ee aes Collaborating in the Workplace: A Guide for Building Better Teams ree eee eed Page23|23BSS SS Total Marks: 30 Answer the following questions: Q:1: Describe some common types of teams. ” Q:2: Discuss the various ways of discovering the personality types of team members. (8) Q:3: Discuss the different stages of team development. 7) Q:4: How are listening skills important for team building? (8) ‘Business Management Certifications for ProfessionalDevelopment Page: 1UNIT-6 Motivating Employees By the end of this unit the learner will be able to: Y What is motivation? important of motivation ¥ The role of a manager asa leader Orientation important fororganisations Page1|23Unit 6 Motivating Employees What is Motivation? What's the only real way to motivate? The only way to get a person to do something is to make the person want to do it in order to get something they want or avoid something they don't want. Supervising and Motivation Why is Motivation Important? Some definitions of motivation: '* Motivation is a force that leads people to attempt to satisfy their important needs. '® Motivation is a drive from within that prompts or incites anaction. If motivation comes from within, what can a supervisor do to motivate others? Supervisors need to create a climate in which internal motivation will activate performance. In order for this to happen, supervisors need to know their staff, what motivates them, and how to create a motivating climate, There are three main types of motivators: the carrot, the whip, and the plant. Identifying Motivators We've pretty well established that we can’t motivate other people: motivation has to come from them. However, what we can do is provide the right atmosphere for employees to feel motivated. What do you think is the right atmosphere? Motivation is a complex subject. As managers, we used to talk in terms that said the only way to get a person to do something was to make them want to do it in order to get something they want or avoid something they don't want. In other words, we would pay them or punish them. This discussion included terms of managing people with a whip, a carrot, and a plant. The Carrot This represents incentives and rewards. This could be time off, pay bonuses, or promotional gifts like jackets. One construction company found the best motivator for their crews was to give them Friday afternoon off if all their work was done and done well, and all their objectives had been met. While this approach may work in some instances, it’s been demonstrated that offering carrots often actually reduces productivity. You can see excellent descriptions of repeat experiments from a range of job types in Daniel H. Pink’s book Drive: The Surprising Truth About What Motivates Us. ge2|23The Whip This represents threats and consequences. Although such techniques are often perceived negatively, they do have their place in the workplace for short-term goal achievernent for the manager. In other words, employees never respond positively to this management style, but if the boss cracks the whip, they will get things done. Consequences for poor performance may include suspension and termination, of course, but those are big clubs and sometimes we just need a little stick. Smaller reactions might include no recognition, no promotions, or disciplinaryinterviews However, we must remember to recognize people when they do something good (and let's agree on something here: there is a lot more good work going on than there is poor work). If we continue to ignore people after their good work, our concept of consequences will backfire. The Plant This represents a positive environment. It suggests many things a supervisor should strive for: employees knowing their work is important, an open atmosphere, fair dealings with all, training, good lines of ‘communication, a feeling of support by the supervisor, and a feeling of self-esteem. What Do You Think? You may have heard about people who have a hobby and they are fantastic at it. Maybe they like to do carpentry, paint, write, or sculpt. You'll say, “Wow, you are really good at that. You should do it for a living,” And they'l say that doing what they love for money would take all the fun out of it. You might shake your head at them, but what they say is true: once they lose the passion for and activity, the results will change. In his book Drive: The Surprising Truth About What Motivates Us, Daniel Pink examines the success of sharing through open source projects. Some of the most successful tools around (such as Mozilla, Linux, and Wikipedia) were all developed by people who were doing the work without being paid. He also looks at pay for performance incentives that measurably lower results. For linear, predictable tasks, incentives can temporarily lead to greater production. However, when we are looking for more creative results, problem solving, or innovation, pay for performance typically backfires. If we pay people to donate blood, we get fewer donations. When we reward a lab monkey to solve puzzles, they solve less. When we reward children for drawing pictures, they draw less. High levels of creativity result from tasks that we find interesting, challenging, and captivating. This includes things that we often ask from our staff, like problem solving, planning, thinking out of the box, and completing projects. Our task is to create a climate where staff's internal motivation will activate their own performance. In order to be successful, supervisors need to know their staff, what motivates them, and how to create a climate that they find stimulating. The truth is that we can’t motivate other people. Motivation is intrinsic (meaning it comes from within). However, what we can do is provide the right atmosphere for employees to identify their own motivations, link into them, and respond. Page3|23Test Your Knowledge What motivation stimulators are at work in your workplace? ‘What could you do to create a motivating climate? Motivational Theories ‘Look at Theory Two theories that are often referred to are Abraham Maslow’s Hierarchy of Needs and Frederick Herzberg’s Dual Structure Theory. ‘Maslow's Classic Hierarchy of Needs Paged|23Herzberg's Motivational versus Maintenance (or Hygiene) Factors Pages |23Supervisor's versus Higher Management's Role Higher management can merely prevent dissatisfaction by providing maintenance factorsin adequate quantity and quality. — Supervisors can provide satisfaction with ‘motivation factors and ‘cause an increased ‘commitment of employees’ time and energy. Why do you think there are so many theories on motivation? Human behavior is very complex. No single theory seems to explain all human behavior. Theories are essentially different sets of glasses for looking at life. Some glasses seem to provide a better view of some things but don’t seem to work as well as a different pair for looking at other things. ‘The purpose of this unit is not to learn theories but to become more aware of different ways of looking at motivation, because the more ways we can look at something, the better the chances we will get a 00d understanding, Orientation and Onboarding The First 48 Hours Why Have Orientation? ‘Companies spend a lot of time and money recruiting and hiring new employees. Once the hiring decision has been made, many managers feel their job is done. Once the new employee arrives for work, there is very little formal attention paid to reinforce the notion that the employee made the right decision and that they have come to a well-organized, well-run company. The orientation program actually begins during the interview process, as interviewers give the employee some sense of what the organization is like. The orientation continues either planned or unplanned when the employee arrives at work. The employee is making up their mind about what type of company this is and whether they will want to continue working here. Page6|23Most employees arrive for work that first day full of enthusiasm and determined to do a good job. Sure, they are a little bit nervous, but they are confident everything will work out. A poorly-planned or non- existent orientation program will cost the organization more money in the long run and perhaps make the new employee another turnover statistic. You also need to remember the importance of providing ‘an orientation for part-time employees. Over the long term your organization loses if they don't feel you recognize them as a part of the team. Orientation This isthe initial exposure to the company that takes place in the first couple of weeks on the new job. It is how you share your policies and procedures, introduce the new person, and help them get up and running in the new environment. It can include on the job training, short safety courses, as well as any certifications that need to be secured as the employee starts their new job. (Things like defensive driving, first aid, and company specific tools and software could be included here.) ‘Onboarding Onboarding starts during orientation, and can go on for as long as 18-24 months. This is the training and ‘engagement process that helps to link the person to the organization, and where there is an exchange of their value and growth being productive for the company. Onboarding can include a plan for professional development, training, and succession within the new company. Test Your Knowledge How Did Your Orientation Rate? Questionnaire: Think back to your first day on the job with your current company. Read each statement and check True or False as it relates to the orientation you received. Statement True | False Iwas made to feel welcome. | was introduced to other members of my workgroup. My boss paid attention to me and made me feel welcome. My orientation seemed well planned. ‘Company benefits were well explained on the first day. My office or workspace was set up and waiting for me. | received a tour of the organization by a qualified person. Page? |23Statement True | False All the necessary paperwork and forms were available and I received assistance to complete them properly. | received a copy of relevant information such as the Employee Handbook, Operations Manual, etc. earned about the company's history and future plans. My supervisor reviewed my job description with me and outlined his/her expectations of me. | was invited to lunch that first day with my boss or some other key person. | met people from other departments. | was able to observe colleagues at work before starting a task. | was given a specific job assignment, along with instruction or training. Office hours, dress code, sick leave, and other policies were explained to me. Iwas shown the necessary systems (telephone, computer, etc.). | had opportunities to ask questions, Payroll policies (and withholdings) were explained to me the first day. At the end of the week | felt ike a member of the team. Scoring How did your orientation rate? 18-20 True: Your orientation was outstanding. 15-17 True: Your orientation was above average. 11-14 True: Your orientation was average orientation. 10 or Less True: You have an opportunity to help your organization improve its orientation process. ec8|23fe Test Your Knowledge Now, answer the following questions. Think back to that orientation you received at your present job. List the good and the not so good things you remembered. For each “Not so Good” item, describe how you could improve that experience for the new employees so they do have a good experience in that area. ss would a new employee need to know? pressions or perceptions do | want this new employee to make on this first day? Poge9|23What key procedures or poli better for them? must they know on the first day in order to make the second day ‘What can I do so the person does not feel overwhelmed? ‘What can I have the person do on the first day so they can feel a sense of accomplishment? ‘What positive experience can | provide on this first day that they can repeat to their family and friends? Page10|23How can | be available to the person on the first day so they feel important and a vital part of the team? Setting Goals Setting Goals with SPIRIT Most of us can’t hit a target if we can’t see it. Before you can develop plans, you have to know what you want to accomplish (your goals or targets); how you want to accomplish those goals or targets; what resources of time, money, and materials you have; and who will carry out the work. So set some targets for yourself that you can see, and then take the first step on your journey to reaching them, and the next step, and soon, SPIRIT Each objective should be broken down into several small, achievable goals that will help you get where you want to go. Good goals should have SPIRIT! Specific Be specific about what you want or don’t want to achieve. The result should be tangible and measurable. “Look gorgeous” is pretty ambiguous; “Lose 20 pounds’ is specific. Prizes Reward yourself at different points in the goal, particularly if it’s long-term. if your goal is to save $1000 for a weekend vacation, for example, you might cook a special meal when reach the halfway mark. Individual The goal must be something that you want to do. If your supervisor wants you to take on an extra project and you are not interested in it, you're not going to want to work towards the goal. Link the goal to something that interests and motivates you, like how great it feels to finish a largeassignment. Page11|23Review Review your progress periodically. Does the goal make sense? Are you stuck? Do you need to adjust. certain parts of it? Inspiring Frame the goal positively. “I don’t like the way | look. | need to get into shape,” won't inspire you, but “I ‘am working out four times a week and | feel fantastic!” sure can, Make the goal fun to accomplish. You could make a poster of the end result, frame it, and post it on the wall Time-Bound Give yourself a deadline for achieving the goal. Ifit’s a pretty big objective, split the goal into small parts ‘and give yourself a deadline for each item. Test Your Knowledge Goal Setting and Goal Getting! Use the space below to draw up a goal with SPIRIT. The Role of Values Work Values. Motivational speaker Denis Waitley has said that life is a “do it myself” project. Each of us must take the blame or the credit for our performance. We personally have the power to control many more personal aspects of our lives, both mentally and physically, than we have ever thought possible. Test Your Knowledge What are some other things you do, or could do, to keep yourself motivated? Page12|23Do you think any of these things would also be effective for motivating your employees? What are some of the things your employees can control in their work life? Is there any way you can give them more control? Test Your Knowledge What Do We Value In Work? The Importance of Values Do you know what you value about work? People vary widely in their values, and it becomes an important part of the supervisor's role to understand what their employees value. When an individual's values are markedly different from the organization, it is more likely that the individual will become disconnected from the workplace and they will look for something new, or become disengaged but stay if they think they don’t have many options. It’s important for a supervisor to know the values of the organization, and to determine their individual values. Write down your company’s values below. 13 | 23Identifying Your Values The list below reflects some common values. Choose the ten that are most important to you as a person (meaning that they apply both at work and at home). You can customize the wording, or add your own to the list Ability to make decisions and | Ability to persuade and | Achieving excellence implement them influence others Achieving fame and | Adventure and excitement _| Behaving ethically recognition Being challenged by | Being organized -—_and | Being skilled and capable pressures and deadlines dependable Building a family Building meaningful | Competition with others relationships with others Contributing to society Cooperation with others Demonstrating expertise Diversity in daily tasks Doing something meaningful | Efficient and effective Enjoying what you do Environmental rights Establishing a reputation Expressing creativity Feeling excited —_and | Feeling independent stimulated by life Feeling of belonging and | Feeling of inner harmony _| Feeling of patriotism ‘community Financial security Financial wealth, Free speech/human rights Freedom to set your own _| Havinga feeling of security | Having power and control pace and goals Having privacy Helping those in need Religion and/or spirituality Leading others to success __| Moving at a fast pace Moving at a slow pace Being productive Reliability Self-development Sense of accomplishment __| Serving the public Spontaneity Truth and integrity Working as part ofateam | Working individually 14/23We cannot focus on too many things at one time and remain effective, so look at the ten values you selected and select the five that are most important to you. Cross the others off. Be firm with yourself if you need to be. Remember, you are focusing on what is really important to you. Next, reduce the list to just three values. These are the things at your very core. Cross the other two off your list. Put circles around the three items that are your core values. Test Your Knowledge Bringing It All Together Step Two: Define Your Values Now, outline what success for each of those values would look like. Value One Value Two Value Three Step Three: Put It All Together Finally, bring the three statements together into one paragraph. You may feel that you need to go back and re-evaluate your values, or you may want to re-work some sentences to create what is meaningful Page15|23to you. That's OK! Above all, this should be a reflection of your innermost thoughts and a roadmap for how you would like to conduct your life and your work. Write your value statement here. Creating a Motivational Climate Behavioral (Reinforcement) Theory ‘A Focus on Feedback We respond to praise and positive feedback, almost regardless of where it comes from or for what. Success is a very powerful force and it seems most of us can never get too much praise or too many compliments. We need to feel we are capable, competent people, and positive feedback provides this. On the other hand, criticism and negative feedback takes the wind out of our sails. We feel less good about ourselves and lose interest in continuing what we are doing. Again, criticism is a very powerful force and even when it is not justified or when the person giving it is not in a position to criticize or judge Us, we can still become de-motivated. While this appears to be a case of external motivation or de-motivation, it really isn't. We decide whether to listen to the person's praise or criticism and how to react to it, although we are strongly conditioned to react almost automatically to praise and criticism. Reinforcement doesn't only apply to external reward and punishment. If we tell ourselves that we are doing a good job, we reward ourselves and feel good. If we criticize ourselves (even when our performance is good), we tend to feel bad and become de-motivated. Reinforcement Theory Reinforcement theory (also called the behavioral theory) says that people do, and are motivated to do, what gets rewarded. We avoid doing, or become de-motivated, when we get punished for what we do. How can you, as a supervisor, use this theory to provide a motivational climate in the workplace? By praising, giving positive feedback, congratulating people when they perform well. As Ken Blanchard puts it, catch people doing things right and praise them. Page16|23