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10 quick tips to manage employee performance

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Managing employee performance has become an increasingly popular topic lately. Large and small businesses alike are taking a special interest in measuring and improving productivity and performance.

We analyzed several aspects of an effective performance management system and we extracted 10 must-dos that can significantly improve your day-to-day employee performance management.

Here we go:

1. Set clear expectations

Start this discussion as early as during your recruitment interviews. Set clear expectations on both sides.

What is your team's performance standard, how does it translate for every employee based on their job description, how will you measure it and other critical aspects that are best discussed in the beginning of your work relationship.

Respect your employee and have him/her express their own expectations on the matter. Different individuals will have different performance levels, habits or needs.

2. Try performance coaching

This new technique for managing employee performance focuses on the direct relationships between employees and their direct supervisors.

It's about individual attention that caters to an employee's needs, allowing them to significantly improve their skills and aptitudes, and, consequently, increase their performance.

The way it works is that every couple of weeks, a manager will have some coaching sessions with his/her team member, to discuss how they can improve their performance, by focusing on the present and not on past actions.

3. Empower employees

Giving employees more and more autonomy, while providing the right tools and resources, will empower employees to push their own limits and become more productive.

Don't fall into the micromanagement trap because you feel like you would know better or you need to stay in control.

Educate your team and invest the necessary time into growing them. That will not only lead to higher performance but also higher employee engagement and retention.

4. Get valuable feedback

Ask and encourage giving constructive feedback every step of the way. It may be uncomfortable sometimes, it may even become a routine, but it's an essential process that helps you stay ahead of important performance drivers such as engagement, motivation and development.

Addressing every issue in its own time will ensure long-term performance and productivity and it will create a healthy working environment.

Little things matter and every small concern left unsolved can become a critical disengagement factor that leads to poor performance.

5. Set goals

Start with the end in mind. This goes for both an employees' career path as well as for the overall business planning process.

Working without clear goals that can be easily tracked and evaluated is a recipe for disaster when it comes to employee performance.

Set individual performance milestones as well as general team milestones and make a habit out of checking them regularly.

6. Measure performance

Sometimes, getting to the finishing line blurs out how you got there, leaving you with no information to go on when you want to develop a more efficient performance strategy.

That's what happens when you only measure performance at the end of the year, when you're distracted by New Year's plans or next year's budget.

Adopt or create a performance measurement system that works well for you and your team and stick to it. Circle back to it every day/week/ couple of weeks tops.

7. Adapt and adjust

That system that everyone's been using since 2 years ago when it revolutionized performance management for your company may not be working so well for your current needs.

Adapt or have your performance levels slowly die. Always be one step ahead and use the current performance results and the feedback received to adapt your system and make sure that it's helpful instead of hell-pful.

8. Gather improvement suggestions

Back to feedback, the mother of all good things. Push for organizational innovation, using internal ideas and suggestions; listening to employees, getting feedback and committing to the improvement ideas that arise, like we talked about in our previous article.

9. Keep in mind the big picture

Remind employees how each of their actions influence the overall project or team objectives. Link them with your company's business objectives so that you get a clear perspective on what your performance levels should be and why.

Never skip the "why". People are not machines, they are driven by ambitions, desires and thoughts. Not having a clear perspective on their actions and the related impact affects their performance in a negative way.

10. Increase happiness at work

People perform better when they're happier.

"Managers can help ensure that people are happily engaged at work. Doing so isn't expensive. Workers' well-being depends, in large part, on managers' ability and willingness to facilitate workers' accomplishments - by removing obstacles, providing help and acknowledging strong effort."

Teresa Amabile and Steven Kramer, Do Happier People Work Harder?

These are just some of the things you should start monitoring on a daily or weekly basis. But more importantly, you should find out what they key performance drivers in your team are and how you can manage them to get optimum results.

Image via StockSnap.io under C.C.0 license

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10 Must-dos to manage day-to-day employee performance

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Managing employee performance has become an increasingly popular topic lately. Large and small businesses alike are taking a special interest in measuring and improving productivity and performance. We analyzed several aspects of an effective performance management system and we extracted 10 must-dos that can significantly improve

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A fun visualization of the differences between data and information

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This article from differencebetween.com outlines the differences between production vs. operation management

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Production vs Operation Management

Production management and operations management are management jargon that needs to be simplified for those who are sitting on the fence or those inside an organization unable to comprehend them clearly. Sometimes it becomes confusing to be talking about production management inside operations management but they are separate and distinct entities in the study of management as ultimately, production is a part of the whole cycle of operations. Read on to clarify the doubts.
Operations Management
The study of set of activities comprising supervision, planning and designing of business operations in the field of manufacturing of goods and services is termed as operations management. The purpose of operations management is to make certain that the operations of a business are efficient and effective and result in minimum of wastage. Operations management tries to cut down resources involved in operations while at the same time making operations more effective and productive. In fact operations management is more concerned on processes than people or products. Operations management in a nutshell is using physical resources in an optimum manner, converting input into output, so as to supply to the market the desired and finished product.
Production Management
Production management on the other hand focuses specifically on the production of goods and services and is concentrated upon churning output from input. It is a broad sum of activities that go into turning raw material into final, finished product. One may feel that production management is a subset of operations management, but production management in itself is a broad subject that comprises production planning and control, inventory management, and operations control. Production management includes all management activities spanning selection. Designing, operating, controlling and updating production system.

In brief: Operations vs Production Management

* Both production management and operations management play an important role in an organization in increasing the efficiency and productivity.

* While operations management is focused upon administration, planning and execution of operations involved in production of goods and services and trying to minimize the resources at the same time increasing output, production management is more concerned with input/output and churning out products in the shape of desired finished product.

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Difference Between Production and Operation Management - Difference Between

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Production vs Operation Management Production management and operations management are management jargon that needs to be simplified for those who are sitting on the fence or those inside an organization unable to comprehend them clearly. Sometimes it becomes confusing to be talking about production management inside operations management but they are separate and distinct entities ...

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This article from extension.com outlines the difference between power and control in a meaningful manner

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Power and authority are separate but related concepts. A manager in an organization has authority if he or she has the right to direct the activities of others and expect them to respond with appropriate actions to attain organizational purposes. A uthority most often comes from the duties and responsibilities delegated to a position holder in a bureaucratic structure. A company president can order a product design change, for instance, or a police officer has the authority to arrest an offender of the law.

Power is the possession of authority, control, or influence by which a person influences the actions of others, either by direct authority or by some other, more intangible means. A prime source of power is the possession of knowledge. A person with knowledge is oftentimes able to use that knowledge to directly or indirectly influence the actions of others. The authority of knowledge is often independent of levels or positions. Power can reinforce authority, and authority is one of the primary sources of power.

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What is the difference between power and authority in an organization? - eXtension

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Power and authority are separate but related concepts. A manager in an organization has authority if he or she has the right to direct the activities of others and expect them to respond with appropriate actions to attain organizational purposes. A uthority most often comes from the duties and responsibilities delegated to a position holder in a bureaucratic structure.

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This article from Inc.com mentions 14 different way to effectively motivate employees as their manager.

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I first saw this picture a few years ago, and it has always stuck with me as my definition between leadership and management, not that they have to be exclusive of each other.

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An article from Inc.com explaining some major distinction between leadership and good management.

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Last week's article The Leadership Checklist: 10 Principles That Make Leading Easier, generated some interesting thoughts as shared through various social media outlets. Many readers tended to hone in on the point made in the piece about the difference between leadership and management.

As you may recall, I had noted:
"There's a difference between leadership and management. Leaders look forward and imagine the possibilities that the future may bring in order to set direction. Managers monitor and adjust today's work, regularly looking backward to ensure that current goals and objectives are being met. The best leaders lead and let their management teams manage the work at hand."
Because of the interest, I thought I would explore the point a bit more in this article.

Clearly, there is a symbiotic relationship between those responsible for leading a business and those responsible for managing the work within it. While managers can certainly lead and leaders can certainly manage, the skills required to be good at either one are separate and distinct.

What follows are ten of the most important distinctions to note. Regardless of which role you currently play, understanding these key differences between leading and managing may help you become better at your job:

1. Leadership inspires change, management manages transformation.

A leader must set direction and inspire people to follow them. The process of following often requires great change. This is where strong management comes in. It's the manager's job to oversee the work needed to implement the necessary changes and realize the organizational transformation set forth by the leadership.

2. Leadership requires vision, management requires tenacity.

A leader needs to envision what the business is to become. A great manager must have the willingness to do whatever it takes to achieve the goals set forth by the leader.

3. Leadership requires imagination, management requires specifics.

A great leader can cultivate their imagination to inform their vision. It helps them to "see" what can be. Managers must understand that vision and drive their teams to do the specific work necessary to accomplish what has been expressed.

4. Leadership requires abstract thinking, management requires concrete data.

By definition, abstract thinking enables a person to make connections among, and see patterns within, seemingly unrelated information. The ability to think abstractly comes in very handy when reimaging what an organization can become. Conversely, a manager must be able to work with, and analyze, concrete data in order to ensure optimal results.

5. Leadership requires ability to articulate, management requires ability to interpret.

A good leader can describe their vision in vivid detail so to engage and inspire their organization to pursue it. A good manager must interpret that stated vision and recast it in terms that their teams can understand and embrace it.

6. Leadership requires an aptitude to sell, management requires an aptitude to teach.

A leader must sell their vision to their organization and its stakeholders. They must convince all concerned parties that what is envisioned is achievable and provides greater value than what is created by the business today. In keeping, a manager must be able to teach their teams what must be learned and adapted to attain the stated vision.

7. Leadership requires understanding of the external environment, management requires understanding of how work gets done inside the organization.

A leader must understand the business environment in which the enterprise operates so to better anticipate opportunities and evade misfortune, while a manager is relied on to figure out how to get things done using the resources available to the business.

8. Leadership requires risk-taking, management requires self-discipline.

A leader will take educated risks when setting a strategic direction for a business. Managers must have the self-discipline to stick to the plan for realizing that strategic direction so to ensure that the strategy comes together as planned.

9. Leadership requires confidence in the face of uncertainty, management requires blind commitment to completing the task at hand.

A leader's life is filled with uncertainty. They're setting a course for their company in unchartered waters. Once the course is set, managers are duty-bound to follow the stated direction and commit to delivering the results expected.

10. Leadership is accountable to the entire organization, management is accountable to the team.

Finally, leaders must consider the impact of their decisions on the whole organization. A misstep can bring an entire business to its knees. It's a huge responsibility. Accordingly, managers are responsible for their teams. They must ensure that their teams are prepared to deliver and that each member is equipped to do what is required for success.

Indeed, there are important differences between leading and managing. The best leaders lead and let others manage; the best managers understand their leader's vision and work with their teams to achieve it. Your business needs people with both kinds of skills and aptitudes to secure enduring success. Take the time to understand these differences so to build an organization that leverages each to the fullest.
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Leader or Manager? These 10 Important Distinctions Can Help You Out

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Last week's article The Leadership Checklist: 10 Principles That Make Leading Easier, generated some interesting thoughts as shared through various social media outlets. Many readers tended to hone in on the point made in the piece about the difference between leadership and management. As you may recall, I had noted: "There's a difference between leadership and management.

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This article from Fortune explains some of the decisions making and communication procedures that makes Apple the success that they are.

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Apple doesn't often fail, and when it does, it isn't a pretty sight at 1 Infinite Loop. In the summer of 2008, when Apple (aapl) launched the first version of its iPhone that worked on third-generation mobile networks, it also debuted MobileMe, an e-mail system that was supposed to provide the seamless synchronization features that corporate users love about their BlackBerry smartphones. MobileMe was a dud. Users complained about lost e-mails, and syncing was spotty at best. Though reviewers gushed over the new iPhone, they panned the MobileMe service.

Steve Jobs doesn't tolerate duds. Shortly after the launch event, he summoned the MobileMe team, gathering them in the Town Hall auditorium in Building 4 of Apple's campus, the venue the company uses for intimate product unveilings for journalists. According to a participant in the meeting, Jobs walked in, clad in his trademark black mock turtleneck and blue jeans, clasped his hands together, and asked a simple question:

"Can anyone tell me what MobileMe is supposed to do?" Having received a satisfactory answer, he continued, "So why the fuck doesn't it do that?"

For the next half-hour Jobs berated the group. "You've tarnished Apple's reputation," he told them. "You should hate each other for having let each other down." The public humiliation particularly infuriated Jobs. Walt Mossberg, the influential Wall Street Journal gadget columnist, had panned MobileMe. "Mossberg, our friend, is no longer writing good things about us," Jobs said. On the spot, Jobs named a new executive to run the group.

For more on Apple, watch this Fortune video:

Jobs' handling of the MobileMe debacle offers a rare glimpse of how Apple really operates. To Apple's legion of admirers, the company is like a tech version of Wonka's factory, an enigmatic but enchanted place that produces wonderful items they can't get enough of. That characterization is true, butApple also is a brutal and unforgiving place, where accountability is strictly enforced, decisions are swift, and communication is articulated clearly from the top. (After Jobs' tirade, much of the MobileMe team disbanded, and those left behind eventually turned MobileMe into the service Jobs demanded.)

Apple's ruthless corporate culture is just one piece of a mystery that virtually every business executive in the world would love to understand: How doesApple do it? How does a company with more than 50,000 employees and with annual revenue approaching $100 billion grow 60% a year? How does it churn out hit after hit? Those are questions Apple has no desire to answer. This past January, when a Wall Street analyst asked Tim Cook, Apple's low-key chief operating officer, how far out the company conducts long-term planning, Cook replied with an artful brushoff. "Well, that is a part of the magic ofApple," he said. "And I don't want to let anybody know our magic because I don't want anybody copying it."

Just because a magician doesn't want to reveal his tricks doesn't mean it's impossible to figure them out. Fortune conducted dozens of interviews over several months with former Apple employees and others in the Apple orbit to try to explain the phenomenon of life inside Apple. Few agreed to speak on the record; the fear of retribution persists for years. Once they get talking, however, the former Apple-ites paint a picture of a company that time and again thumbs its nose at modern corporate conventions in ways that let it behave more like a cutting-edge startup than the consumer-electronics behemoth it is.

Whether Apple's startup ways are sustainable or the result of the sheer will of Steve Jobs is the great unknown in explaining how Apple works. Every conversation with insiders about Apple, even if it doesn't start out being about Jobs, eventually comes around to him. The creative process at Apple is one of constantly preparing someone-be it one's boss, one's boss's boss, or oneself-for a presentation to Jobs. He's a corporate dictator who makes every critical decision-and oodles of seemingly noncritical calls too, from the design of the shuttle buses that ferry employees to and from San Francisco to what food will be served in the cafeteria.

But just as Jobs sees everything going on at the company, he's not blind to the fact that things will be radically different without him at the top. Jobs currently is on his third medical leave in seven years-he survived a rare form of pancreatic cancer and later received a liver transplant-and his absence has only fueled the fascination with him. Jobs is still heavily involved in Apple, of course. He personally took charge of Apple's response to the recent Locationgate, for example, granting interviews to several news outlets to answer accusations that Apple is tracking the whereabouts of iPhone users. On a more strategic level, these days he's especially focused on institutionalizing his ways of doing business. His mission: to turn the traits that people most closely associate with Jobs-the attention to detail, the secrecy, the constant feedback-into processes that can ensure Apple's excellence far into the future.

Apple CEO and co-founder Steve Jobs on March 2, 2012, emerged from a medical leave of absence to introduce the second generation of the iPad. Photograph by Kimihiro Hoshino - Getty Images

So exalted is Steve Jobs that often he is compared, metaphorically at least, to Jesus Christ. (Exhibit A: Alan Deutschman's revealing 11-year-old book, The Second Coming of Steve Jobs.) True to form, the shepherd to his Apple flock often teaches in parables. One such lesson could be called the "Difference Between the Janitor and the Vice President," and it's a sermon Jobs delivers every time an executive reaches the VP level. Jobs imagines his garbage regularly not being emptied in his office, and when he asks the janitor why, he gets an excuse: The locks have been changed, and the janitor doesn't have a key. This is an acceptable excuse coming from someone who empties trash bins for a living. The janitor gets to explain why something went wrong. Senior people do not. "When you're the janitor," Jobs has repeatedly told incoming VPs, "reasons matter." He continues: "Somewhere between the janitor and the CEO, reasons stop mattering." That "Rubicon," he has said, "is crossed when you become a VP." (Apple has about 70 vice presidents out of more than 25,000 non-retail-store employees.)

Jobs indoctrinates a culture of responsibility by hosting a series of weekly meetings that are the metronome that sets the beat for the entire company. On Mondays he meets with his executive management team to discuss results and strategy as well as to review nearly every important project in the company. On Wednesdays he holds a marketing and communications meeting. Simplicity breeds clarity, as Jobs himself explained in a 2008 interview with Fortune. "Every Monday we review the whole business," he said. "We look at every single product under development. I put out an agenda. Eighty percent is the same as it was the last week, and we just walk down it every single week. We don't have a lot of process at Apple, but that's one of the few things we do just to all stay on the same page." It's one thing when the leader describes the process. It's another thing altogether when the troops candidly parrot back the impact it has on them. "From a design perspective, having every junior- level designer getting direct executive-level feedback is killer," says Andrew Borovsky, a former Apple designer who now runs 80/20, a New York design shop. "On a regular basis you either get positive feedback or are told to stop doing stupid shit."
Read More: Exclusive Q&A - Apple CEO Tim Cook
The accountability mindset extends down the ranks. At Apple there is never any confusion as to who is responsible for what. Internal Applespeak even has a name for it, the "DRI," or directly responsible individual. Often the DRI's name will appear on an agenda for a meeting, so everybody knows who is responsible. "Any effective meeting at Apple will have an action list," says a former employee. "Next to each action item will be the DRI." A common phrase heard around Apple when someone is trying to learn the right contact on a project: "Who's the DRI on that?"

Simplicity also is key to Apple's organizational structure. The org chart (see next page) is deceptively straightforward, with none of the dotted-line or matrixed responsibilities popular elsewhere in the corporate world. There aren't any committees at Apple, the concept of general management is frowned on, and only one person, the chief financial officer, has a "P&L," or responsibility for costs and expenses that lead to profits or losses. It's a radical example of Apple's different course: Most companies view the P&L as the ultimate proof of a manager's accountability; Apple turns that dictum on its head by labeling P&L a distraction only the finance chief needs to consider. The result is a command-and-control structure where ideas are shared at the top-if not below. Jobs often contrasts Apple's approach with its competitors'. Sony, he has said, had too many divisions to create the iPod. Apple instead has functions. "It's not synergy that makes it work" is how one observer paraphrases Jobs' explanation of Apple's approach. "It's that we're a unified team."

Jobs' inner circle includes (from left) Jonathan Ive, Phil Schiller, Eddy Cue, and Scott Forstall. Photograph by Robyn Twomey

For Apple the result is an ability to move nimbly, despite its size. "Constant course correction" is how one former executive refers to the approach. "If the executive team decides to change direction, it's instantaneous," this ex-Apple honcho says. "Everybody thinks it's a grand strategy. It's not." As an example, Apple's management has been known to change its pricing 48 hours before a product launch. When it misses a seemingly obvious idea-such as not anticipating the need for an App Store to satisfy the third-party developers who wanted to create programs for the iPhone-it shifts gears quickly to grab the opportunity.

One of Apple's greatest strengths is its ability to focus on just a few things at a time, an entrepreneurial trait difficult to imagine at a corporation with a market value of $320 billion. Saying no at Apple is as important as saying yes. "Over and over Steve talks about the power of picking the things you don't do," says one recently departed executive. Obvious? Perhaps. Yet few companies Apple's size-and very few of any size-are able to focus so well and for so long.

Jobs himself is the glue that holds this unique approach together. Yet his methods have produced an organization that mirrors his thoughts when-and this is important-Jobs isn't specifically involved. Says one former insider: "You can ask anyone in the company what Steve wants and you'll get an answer, even if 90% of them have never met Steve."

There is a small group at Apple that most certainly has met Steve Jobs. It's called the Top 100, and every year or so Jobs gathers these select few for an intense three-day strategy session at a proverbially secure, undisclosed location. Everything about this Top 100 meeting is shrouded in secrecy, starting with its very existence. Those tapped to attend are encouraged not to put the meeting on their calendars. Discussing their participation is a no-no, even internally. Attendees aren't allowed to drive themselves to the gathering. Instead they ride buses that depart from Apple's Cupertino, Calif., headquarters to places like the sumptuous Chaminade Resort & Spa in Santa Cruz, Calif., which satisfies two Jobs requirements: good food and no golf course. Apple goes so far as to have the meeting rooms swept for electronic bugs to stymie snooping competitors.

The Top 100 meeting is an important managerial tool for Jobs. He and his chief lieutenants use it to inform a supremely influential group about whereApple is headed. The elaborately staged event also gives Jobs an opportunity to share his grand vision with Apple's next generation of leaders. The Top 100 meeting is part strategic offsite, part legacy-building exercise.

Jobs generally kicks things off personally. Each session is as well crafted as the public product debuts for which the CEO is so famous. For presenters the career stakes are high, and the pressure is nerve-racking. "The Top 100 was a horrifying experience for 10 or so people," recalls one former vice president, who took the stage some years ago. "For the other 90 it's the best few days of their life." Jobs sometimes uses the occasion to unveil important initiatives. "I was at a Top 100 when Steve showed us the iPod," says Mike Janes, who worked at Apple from 1998 to 2003 and remains close to Apple executives. "Apart from a tiny group, no one knew anything about it."

To be selected for the Top 100 is to be anointed by Jobs, an honor not necessarily based on rank. Jobs referred to the group, but not the conclave, in an interview several years ago with Fortune. "My job is to work with sort of the Top 100 people," he said. "That doesn't mean they're all vice presidents. Some of them are just key individual contributors. So when a good idea comes ... part of my job is to move it around [and] ... get ideas moving among that group of 100 people." Privately Jobs has spoken even more strongly about the Top 100's importance. "If he had to recreate the company, these are the 100 people he'd bring along" is how one former Apple executive describes Jobs' characterization.

Though its name isn't to be uttered, the blessed nature of the gathering creates a caste system at Apple. Inclusion is by no means permanent. According to Jobs' whims, attendees can be bumped from one year to the next, and being kicked out of this exclusive club is humiliating. For those left behind in Cupertino, chattering begins as soon the chosen few have departed. "We'd tongue-and-cheek have a Bottom 100 lunch after we were done preparing the people who'd left," recalls one nonparticipant. Says another: "We weren't supposed to know where they were. But we all knew."

Apple is now 35 years old, an extremely mature company by Silicon Valley standards, and there's a grownup atmosphere at headquarters: You won't find a lot of people dressed in board shorts and flip-flops, or zanily decorated cubicles. The vibe is the opposite of the jocularity that Google-with its wear-your-pajamas-to-work day and all-you-can-eat cafeterias-has fostered. There literally is no free lunch at Apple-though meals are subsidized and generally quite good.

Yet Apple also consciously tries to behave like a startup, most notably by putting small teams on crucial projects. To wit: Just two engineers wrote the code for converting Apple's Safari browser for the iPad, a massive undertaking. In a 2010 interview at a technology conference, Jobs verbalized Apple's do-more-with-less mentality. "Apple is a company that doesn't have the most resources," he said, referring to Apple's response to a technical debate raging at the time. "And the way we've succeeded is by choosing which horses to ride very carefully." On the face of it, the statement is absurd. Times certainly once were tough at Apple, breeding an underdog culture. Today, with $66 billion in the bank, nothing could be further from the truth, yet Apple continues to behave like a scrappy upstart. "We've always fought for resources," says a former executive. "Steve and Tim in general want to be sure you need what you're asking for."

Apple insiders say the notion of scarce resources has less to do with money than it does with finding enough people to perform critical tasks. Once Applemoves, though, it spends whatever it takes. It contracted the London Symphony Orchestra to record trailer soundtracks for its latest iMovie software. Years ago it sent a camera crew to Hawaii to film a wedding for a demo video; then, to get a different take, it staged fake nuptials in a San Francisco church, withApple employees playing both guests and the betrothed.

Learning to work at Apple takes time. To echo its own famous ad campaign, Apple thinks differently about business. Often as not it simply ignores traditional notions of business opportunities. An executive who has worked at Apple and Microsoft describes the differences this way: "Microsoft tries to find pockets of unrealized revenue and then figures out what to make. Apple is just the opposite: It thinks of great products, then sells them. Prototypes and demos always come before spreadsheets."

Illustration: ilovedust

Specialization is the norm at Apple, and as a result, Apple employees aren't exposed to functions outside their area of expertise. Jennifer Bailey, the executive who runs Apple's online store, for example, has no authority over the photographs on the site. Photographic images are handled companywide by Apple's graphic arts department. Apple's powerful retail chief, Ron Johnson, doesn't control the inventory in his stores. Tim Cook, whose background is in supply-chain management, handles inventory across the company. (Johnson has plenty left to do, including site selection, in-store service, and store layout.)

Jobs sees such specialization as a process of having best-in-class employees in every role, and he has no patience for building managers for the sake of managing. "Steve would say the general manager structure is bullshit," says Mike Janes, the former Apple executive. "It creates fiefdoms." Instead, rising stars are invited to attend executive team meetings as guests to expose them to the decision-making process. It is the polar opposite of the General Electric-like notion of creating well-rounded executives.

Such rigidity-coupled with the threat of being called on the carpet by Jobs-would seem to make Apple an impossibly difficult workplace, yet recruiters say turnover at Apple is exceedingly low. "It is a happy place in that it has true believers," says a headhunter who has worked extensively with Apple to hire engineers. "People join and stay because they believe in the mission of the company, even if they aren't personally happy." Many of Apple's rank-and-file technical employees have dreamed of working at Apple since they got their first Macs as children. "At Apple you work on Apple products. If you're a diehard Apple geek, it's magical," says Andrew Borovsky, the former designer. "But it's also a really tough place to work." In short, it is an environment that shuns coddling. "Apple's attitude is, 'You have the privilege of working for the company that's making the fucking coolest products in the world,' " says one former product management executive. " 'Shut up and do your job, and you might get to stay.' "

Courtesy of Apple

For years Steve Jobs was uninterested in the human resources department at Apple. Then, three years ago, just before his second medical leave, he hired Joel Podolny, dean of the Yale School of Management, to head something called Apple University. Podolny had been a widely quoted management guru. Yet when he joined Apple, typically, he vanished from sight. No one even seemed to notice when he was named vice president of human resources a couple of years later.

It turns out that Podolny has been busy working on a project that speaks directly to the delicate topic of life at Apple after Jobs. At Jobs' instruction, Podolny hired a team of business professors, including the renowned Harvard veteran and Andy Grove biographer Richard Tedlow. This band of eggheads is writing a series of internal case studies about significant decisions in Apple's recent history. It's exactly the sort of thing the major business schools do, except Apple's case studies are for an Apple-only audience. Top executives, including Tim Cook and Ron Johnson, teach the cases, which have covered subjects including the decision to consolidate iPhone manufacturing around a single factory in China and the establishment of Apple's stores. The goal is to expose the next layer of management to the executive team's thought process.

All this raises the question of whether Jobs has adequately prepared Apple for the day he isn't around anymore. It's an impossible question to answer. According to one person who knows Jobs, he acknowledges his dictatorial powers but insists he's not the only one who can wield them. "Single-cell organisms aren't interesting," he told this person. "Apple is a complex, multicellular organism."

Those who believe Apple can't survive Jobs' departure-and there are many-would call this wishful thinking. Apple may be a multicellular organism, but its life source is Jobs. For now this is all in the realm of opinion. Jobs himself believes he has set Apple on a course to survive in his absence. He has created a culture that, while not particularly jolly, has internalized his ways. Jobs even is ensuring that his teachings are being collected, curated, and preserved so that future generations of Apple's leaders can consult and interpret them. It's about all a savior could possibly ask for.
Additional reporting: Doris Burke A version of this article was originally published in the May 23, 2011 issue of Fortune.

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How Apple Works: Inside the World's Biggest Startup

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Apple doesn't often fail, and when it does, it isn't a pretty sight at 1 Infinite Loop. In the summer of 2008, when Apple (aapl) launched the first version of its iPhone that worked on third-generation mobile networks, it also debuted MobileMe, an e-mail system that was supposed to provide the seamless synchronization features that corporate users love about their BlackBerry smartphones.

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This quick blog from tinypulse.com goes into a couple quick details of Human Resources that has changed over the years.

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Years ago, the human resources department - often referred to simply as "personnel" - was primarily charged with keeping records; ensuring companies followed regulations and were in compliance with laws; and determining wages, compensation packages, and other benefits.

Over the years, the HR department has evolved tremendously. In fact, the HR department has gone through drastic changes in the last 10 years alone. Thanks to the emergence of a slew of technologies that automate much of the work traditionally done by HR professionals, the HR department that exists today looks almost nothing like the ones that existed before. In addition to programs that can automate payroll and streamline the onboarding process, there are also platforms that simplify the recruiting process and talent management systems that enable companies to quickly determine whether their employees are getting the right training opportunities, among other things.

Instead of focusing on personnel management and administrative tasks, today's HR departments - at least the ones that are forward-thinking - spend their energies managing employee engagement and strengthening culture. They're also charged with managing the employees themselves to increase the odds they're happy at work and will continue to stick around for the foreseeable future.

Despite the progress and evolution that's occurred in the HR sector over the last decade, 80% of respondents indicated they believe their company's HR skills are lacking, as reported by Deloitte. A major reason for that, it would seem, stems from the fact that companies are generally wary of change. And HR leaders, for example, may be hesitant to embrace new HR technologies simply because they fear they will ultimately be putting themselves out of work.

By investing in new HR technologies and platforms, however, HR professionals can provide even more valuable services to their companies while improving team morale and, by extension, productivity.

Engaging Employees

The vast majority of employees today are not engaged at work. In fact, Gallup reported that 31.7% of employees are engaged - which means nearly 7 out of 10 workers don't love their jobs and aren't willing to go above and beyond ever.

Engaged employees are happier at work. They're also more productive than their disengaged peers. When HR departments focus on increasing engagement, not only does the quality of the work improve on a company-wide basis, employees are more likely to get along with one another. They'll be in positive, helpful moods - compared to disengaged employees who might have a hard time even cracking a smile.

As our Engagement Report revealed, coworkers are the number one thing employees like about their jobs. The happier and more engaged workers are, the more likely their peers will be to enjoy their company. In other words, strong engagement helps build a more connected team that has each other's backs.

Strengthening Culture

A company's culture describes its mission, beliefs, values, ethics, and more. Cultures define what is expected out of employees.

Culture is one of the top correlated factors to employee happiness, as noted in our Engagement Report. The stronger a culture is, the more likely a staff is to be happy. Because happiness is directly related to productivity, managers would be wise to focus enough resources on improving culture however they can. Not only are employees who fit in with an organization's culture more motivated to do their best work, they're also more likely to believe in the work your company is doing and treat customers with a serious level of respect. Further, they'll evangelize on your company's behalf - even when they're not in the office.

HR technologies make it very easy to gauge whether employees are happy with company culture and believe that things are working as they should be. For example, the results from a pulse survey will make it very clear whether a certain new program or initiative is successful or if it's making employees feel overworked and stressed. Armed with that data, managers can then opt to continue business as usual (when the results are good) or to abandon an idea and steer the company in a different direction (when the results are bad). It sure beats waiting six months to find out that a new program is really hurting culture and employee morale.

Managing Talent

Despite the fact that many of today's employees are extremely interested in having opportunities to develop and grow at their companies, only 25% of workers believe their organizations offer ample opportunities for career development, our Engagement Report revealed.

If you want to keep the best employees around, it is imperative that you offer them the ability to acquire new skills and learn new things. You can't take them for granted and just assume they'll stick around forever.

Even if you think your employees are all replaceable, you should still be concerned with how much it costs to replace workers who take jobs elsewhere. According to the Center for American Progress, businesses can expect to pay up to $15,000 to replace departing employees. That's quite the chunk of change for any company.

Thanks to new HR technologies, it's easier than ever to manage talent and make sure employees are reaching their goals and getting what they want to out of work. Talent management systems, for example, enable HR workers to easily keep track of everything from recruiting and performance management to learning and development and compensation management. All of the critical data needed to make sure employees are improving and reaching the next level can be accessed from one central interface - streamlining the process significantly.

HR has evolved quite remarkably over the last decade. Instead of being fearful of what the changes mean for the HR department or the professionals working in it, companies would be wise to embrace the modern tools and technologies that enable them to build even stronger companies.

Rather than focusing on records management and compliance-related issues, for example, strong HR departments spend their time focusing on improving employee engagement, building an even stronger and more attractive company culture and managing talent from the recruitment process to the exit interview. Organizations that embrace this modern approach to HR will have happier workforces and happier customers - which all translates into a healthier bottom line.

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How HR Has Changed Over the Last 10 Years

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Years ago, the human resources department - often referred to simply as "personnel" - was primarily charged with keeping records; ensuring companies followed regulations and were in compliance with laws; and determining wages, compensation packages, and other benefits. Over the years, the HR department has evolved tremendously.

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This article from Fast-tech touches on the secret feelings of every person employed at least in America...and that is why we hate HR. Some of the reasons listed are funny, some of them are shockingly true.

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Well, here's a rockin' party: a gathering of several hundred midlevel human-resources executives in Las Vegas. (Yo, Wayne Newton! How's the 401(k)?) They are here, ensconced for two days at faux-glam Caesars Palace, to confer on "strategic HR leadership," a conceit that sounds, to the lay observer, at once frightening and self-contradictory. If not plain laughable.

Because let's face it: After close to 20 years of hopeful rhetoric about becoming "strategic partners" with a "seat at the table" where the business decisions that matter are made, most human-resources professionals aren't nearly there. They have no seat, and the table is locked inside a conference room to which they have no key. HR people are, for most practical purposes, neither strategic nor leaders.

I don't care for Las Vegas. And if it's not clear already, I don't like HR, either, which is why I'm here. The human-resources trade long ago proved itself, at best, a necessary evil - and at worst, a dark bureaucratic force that blindly enforces nonsensical rules, resists creativity, and impedes constructive change. HR is the corporate function with the greatest potential - the key driver, in theory, of business performance - and also the one that most consistently underdelivers. And I am here to find out why.

Why are annual performance appraisals so time-consuming - and so routinely useless? Why is HR so often a henchman for the chief financial officer, finding ever-more ingenious ways to cut benefits and hack at payroll? Why do its communications - when we can understand them at all - so often flout reality? Why are so many people processes duplicative and wasteful, creating a forest of paperwork for every minor transaction? And why does HR insist on sameness as a proxy for equity?

It's no wonder that we hate HR. In a 2005 survey by consultancy Hay Group, just 40% of employees commended their companies for retaining high-quality workers. Just 41% agreed that performance evaluations were fair. Only 58% rated their job training as favorable. Most said they had few opportunities for advancement - and that they didn't know, in any case, what was required to move up. Most telling, only about half of workers below the manager level believed their companies took a genuine interest in their well-being.

None of this is explained immediately in Vegas. These HR folks, from employers across the nation, are neither evil courtiers nor thoughtless automatons. They are mostly smart, engaging people who seem genuinely interested in doing their jobs better. They speak convincingly about employee development and cultural transformation. And, over drinks, they spin some pretty funny yarns of employee weirdness. (Like the one about the guy who threatened to sue his wife's company for "enabling" her affair with a coworker. Then there was the mentally disabled worker and the hooker - well, no, never mind. . . .)

But then the facade cracks. It happens at an afternoon presentation called "From Technicians to Consultants: How to Transform Your HR Staff into Strategic Business Partners." The speaker, Julie Muckler, is senior vice president of human resources at Wells Fargo Home Mortgage. She is an enthusiastic woman with a broad smile and 20 years of experience at companies such as Johnson & Johnson and General Tire. She has degrees in consumer economics and human resources and organizational development.

And I have no idea what she's talking about. There is mention of "internal action learning" and "being more planful in my approach." PowerPoint slides outline Wells Fargo Home Mortgage's initiatives in performance management, organization design, and horizontal-solutions teams. Muckler describes leveraging internal resources and involving external resources - and she leaves her audience dazed. That evening, even the human-resources pros confide they didn't understand much of it, either.

This, friends, is the trouble with HR. In a knowledge economy, companies that have the best talent win. We all know that. Human resources execs should be making the most of our, well, human resources - finding the best hires, nurturing the stars, fostering a productive work environment - just as IT runs the computers and finance minds the capital. HR should be joined to business strategy at the hip.

Instead, most HR organizations have ghettoized themselves literally to the brink of obsolescence. They are competent at the administrivia of pay, benefits, and retirement, but companies increasingly are farming those functions out to contractors who can handle such routine tasks at lower expense. What's left is the more important strategic role of raising the reputational and intellectual capital of the company - but HR is, it turns out, uniquely unsuited for that.

Here's why.

1. HR people aren't the sharpest tacks in the box. We'll be blunt: If you are an ambitious young thing newly graduated from a top college or B-school with your eye on a rewarding career in business, your first instinct is not to join the human-resources dance. (At the University of Michigan's Ross School of Business, which arguably boasts the nation's top faculty for organizational issues, just 1.2% of 2004 grads did so.) Says a management professor at one leading school: "The best and the brightest don't go into HR."

Who does? Intelligent people, sometimes - but not businesspeople. "HR doesn't tend to hire a lot of independent thinkers or people who stand up as moral compasses," says Garold L. Markle, a longtime human-resources executive at Exxon and Shell Offshore who now runs his own consultancy. Some are exiles from the corporate mainstream: They've fared poorly in meatier roles - but not poorly enough to be fired. For them, and for their employers, HR represents a relatively low-risk parking spot.

Others enter the field by choice and with the best of intentions, but for the wrong reasons. They like working with people, and they want to be helpful - noble motives that thoroughly tick off some HR thinkers. "When people have come to me and said, 'I want to work with people,' I say, 'Good, go be a social worker,' " says Arnold Kanarick, who has headed human resources at the Limited and, until recently, at Bear Stearns. "HR isn't about being a do-gooder. It's about how do you get the best and brightest people and raise the value of the firm."

The really scary news is that the gulf between capabilities and job requirements appears to be widening. As business and legal demands on the function intensify, staffers' educational qualifications haven't kept pace. In fact, according to a survey by the Society for Human Resource Management (SHRM), a considerably smaller proportion of HR professionals today have some education beyond a bachelor's degree than in 1990.

And here's one more slice of telling SHRM data: When HR professionals were asked about the worth of various academic courses toward a "successful career in HR," 83% said that classes in interpersonal communications skills had "extremely high value." Employment law and business ethics followed, at 71% and 66%, respectively. Where was change management? At 35%. Strategic management? 32%. Finance? Um, that was just 2%.

The truth? Most human-resources managers aren't particularly interested in, or equipped for, doing business. And in a business, that's sort of a problem. As guardians of a company's talent, HR has to understand how people serve corporate objectives. Instead, "business acumen is the single biggest factor that HR professionals in the U.S. lack today," says Anthony J. Rucci, executive vice president at Cardinal Health Inc., a big health-care supply distributor.

Rucci is consistently mentioned by academics, consultants, and other HR leaders as an executive who actually does know business. At Baxter International, he ran both HR and corporate strategy. Before that, at Sears, he led a study of results at 800 stores over five years to assess the connection between employee commitment, customer loyalty, and profitability.

As far as Rucci is concerned, there are three questions that any decent HR person in the world should be able to answer. First, who is your company's core customer? "Have you talked to one lately? Do you know what challenges they face?" Second, who is the competition? "What do they do well and not well?" And most important, who are we? "What is a realistic assessment of what we do well and not so well vis a vis the customer and the competition?"

Does your HR pro know the answers?

2. HR pursues efficiency in lieu of value. Why? Because it's easier - and easier to measure. Dave Ulrich, a professor at the University of Michigan, recalls meeting with the chairman and top HR people from a big bank. "The training person said that 80% of employees have done at least 40 hours in classes. The chairman said, 'Congratulations.' I said, 'You're talking about the activities you're doing. The question is, What are you delivering?' "

That sort of stuff drives Ulrich nuts. Over 20 years, he has become the HR trade's best-known guru (see "The Once and Future Consultant," page 48) and a leading proponent of the push to take on more-strategic roles within corporations. But human-resources managers, he acknowledges, typically undermine that effort by investing more importance in activities than in outcomes. "You're only effective if you add value," Ulrich says. "That means you're not measured by what you do but by what you deliver." By that, he refers not just to the value delivered to employees and line managers, but the benefits that accrue to investors and customers, as well.

So here's a true story: A talented young marketing exec accepts a job offer with Time Warner out of business school. She interviews for openings in several departments - then is told by HR that only one is interested in her. In fact, she learns later, they all had been. She had been railroaded into the job, under the supervision of a widely reviled manager, because no one inside the company would take it.

You make the call: Did HR do its job? On the one hand, it filled the empty slot. "It did what was organizationally expedient," says the woman now. "Getting someone who wouldn't kick and scream about this role probably made sense to them. But I just felt angry." She left Time Warner after just a year. (A Time Warner spokesperson declined to comment on the incident.)

Part of the problem is that Time Warner's metrics likely will never catch the real cost of its HR department's action. Human resources can readily provide the number of people it hired, the percentage of performance evaluations completed, and the extent to which employees are satisfied or not with their benefits. But only rarely does it link any of those metrics to business performance.

John W. Boudreau, a professor at the University of Southern California's Center for Effective Organizations, likens the failing to shortcomings of the finance function before DuPont figured out how to calculate return on investment in 1912. In HR, he says, "we don't have anywhere near that kind of logical sophistication in the way of people or talent. So the decisions that get made about that resource are far less sophisticated, reliable, and consistent."

Cardinal Health's Rucci is trying to fix that. Cardinal regularly asks its employees 12 questions designed to measure engagement. Among them: Do they understand the company's strategy? Do they see the connection between that and their jobs? Are they proud to tell people where they work? Rucci correlates the results to those of a survey of 2,000 customers, as well as monthly sales data and brand-awareness scores.

"So I don't know if our HR processes are having an impact" per se, Rucci says. "But I know absolutely that employee-engagement scores have an impact on our business," accounting for between 1% and 10% of earnings, depending on the business and the employee's role. "Cardinal may not anytime soon get invited by the Conference Board to explain our world-class best practices in any area of HR - and I couldn't care less. The real question is, Is the business effective and successful?"

3. HR isn't working for you. Want to know why you go through that asinine performance appraisal every year, really? Markle, who admits to having administered countless numbers of them over the years, is pleased to confirm your suspicions. Companies, he says "are doing it to protect themselves against their own employees," he says. "They put a piece of paper between you and employees, so if you ever have a confrontation, you can go to the file and say, 'Here, I've documented this problem.' "

There's a good reason for this defensive stance, of course. In the last two generations, government has created an immense thicket of labor regulations. Equal Employment Opportunity; Fair Labor Standards; Occupational Safety and Health; Family and Medical Leave; and the ever-popular ERISA. These are complex, serious issues requiring technical expertise, and HR has to apply reasonable caution.

But "it's easy to get sucked down into that," says Mark Royal, a senior consultant with Hay Group. "There's a tension created by HR's role as protector of corporate assets - making sure it doesn't run afoul of the rules. That puts you in the position of saying no a lot, of playing the bad cop. You have to step out of that, see the broad possibilities, and take a more open-minded approach. You need to understand where the exceptions to broad policies can be made."

Typically, HR people can't, or won't. Instead, they pursue standardization and uniformity in the face of a workforce that is heterogeneous and complex. A manager at a large capital leasing company complains that corporate HR is trying to eliminate most vice-president titles there - even though veeps are a dime a dozen in the finance industry. Why? Because in the company's commercial business, vice president is a rank reserved for the top officers. In its drive for bureaucratic "fairness," HR is actually threatening the reputation, and so the effectiveness, of the company's finance professionals.

The urge for one-size-fits-all, says one professor who studies the field, "is partly about compliance, but mostly because it's just easier." Bureaucrats everywhere abhor exceptions - not just because they open up the company to charges of bias but because they require more than rote solutions. They're time-consuming and expensive to manage. Make one exception, HR fears, and the floodgates will open.

There's a contradiction here, of course: Making exceptions should be exactly what human resources does, all the time - not because it's nice for employees, but because it drives the business. Employers keep their best people by acknowledging and rewarding their distinctive performance, not by treating them the same as everyone else. "If I'm running a business, I can tell you who's really helping to drive the business forward," says Dennis Ackley, an employee communication consultant. "HR should have the same view. We should send the message that we value our high-performing employees and we're focused on rewarding and retaining them."

Instead, human-resources departments benchmark salaries, function by function and job by job, against industry standards, keeping pay - even that of the stars - within a narrow band determined by competitors. They bounce performance appraisals back to managers who rate their employees too highly, unwilling to acknowledge accomplishments that would merit much more than the 4% companywide increase.

Human resources, in other words, forfeits long-term value for short-term cost efficiency. A simple test: Who does your company's vice president of human resources report to? If it's the CFO - and chances are good it is - then HR is headed in the wrong direction. "That's a model that cannot work," says one top HR exec who has been there. "A financial person is concerned with taking money out of the organization. HR should be concerned with putting investments in."

4. The corner office doesn't get HR (and vice versa). I'm at another rockin' party: a few dozen midlevel human-resources managers at a hotel restaurant in Mahwah, New Jersey. It is not glam in any way. (I've got to get a better travel agent.) But it is telling, in a hopeful way. Hunter Douglas, a $2.1 billion manufacturer of window coverings, has brought its HR staff here from across the United States to celebrate their accomplishments.

The company's top brass is on hand. Marvin B. Hopkins, president and CEO of North American operations, lays on the praise: "I feel fantastic about your achievements," he says. "Our business is about people. Hiring, training, and empathizing with employees is extremely important. When someone is fired or leaves, we've failed in some way. People have to feel they have a place at the company, a sense of ownership."

So, yeah, it's corporate-speak in a drab exurban office park. But you know what? The human-resources managers from Tupelo and Dallas are totally pumped up. They've been flown into headquarters, they've had their picture taken with the boss, and they're seeing Mamma Mia on Broadway that afternoon on the company's dime.

Can your HR department say it has the ear of top management? Probably not. "Sometimes," says Ulrich, "line managers just have this legacy of HR in their minds, and they can't get rid of it. I felt really badly for one HR guy. The chairman wanted someone to plan company picnics and manage the union, and every time this guy tried to be strategic, he got shot down."

Say what? Execs don't think HR matters? What about all that happy talk about employees being their most important asset? Well, that turns out to have been a small misunderstanding. In the 1990s, a group of British academics examined the relationship between what companies (among them, the UK units of Hewlett-Packard and Citibank) said about their human assets and how they actually behaved. The results were, perhaps, inevitable.

In their rhetoric, human-resources organizations embraced the language of a "soft" approach, speaking of training, development, and commitment. But "the underlying principle was invariably restricted to the improvements of bottom-line performance," the authors wrote in the resulting book, Strategic Human Resource Management (Oxford University Press, 1999). "Even if the rhetoric of HRM is soft, the reality is almost always 'hard,' with the interests of the organization prevailing over those of the individual."

In the best of worlds, says London Business School professor Lynda Gratton, one of the study's authors, "the reality should be some combination of hard and soft." That's what's going on at Hunter Douglas. Human resources can address the needs of employees because it has proven its business mettle - and vice versa. Betty Lou Smith, the company's vice president of corporate HR, began investigating the connection between employee turnover and product quality. Divisions with the highest turnover rates, she found, were also those with damaged-goods rates of 5% or higher. And extraordinarily, 70% of employees were leaving the company within six months of being hired.

Smith's staffers learned that new employees were leaving for a variety of reasons: They didn't feel respected, they didn't have input in decisions, but mostly, they felt a lack of connection when they were first hired. "We gave them a 10-minute orientation, then they were out on the floor," Smith says. She addressed the weakness by creating a mentoring program that matched new hires with experienced workers. The latter were suspicious at first, but eventually, the mentor positions (with spiffy shirts and caps) came to be seen as prestigious. The six-month turnover rate dropped dramatically, to 16%. Attendance and productivity - and the damaged-goods rate - improved.

"We don't wait to hear from top management," Smith says. "You can't just sit in the corner and look at benefits. We have to know what the issues in our business are. HR has to step up and assume responsibility, not wait for management to knock on our door."

But most HR people do.

Hunter Douglas gives us a glimmer of hope - of the possibility that HR can be done right. And surely, even within ineffective human-resources organizations, there are great individual HR managers - trustworthy, caring people with their ears to the ground, who are sensitive to cultural nuance yet also understand the business and how people fit in. Professionals who move voluntarily into HR from line positions can prove especially adroit, bringing a profit-and-loss sensibility and strong management skills.

At Yahoo, Libby Sartain, chief people officer, is building a group that may prove to be the truly effective human-resources department that employees and executives imagine. In this, Sartain enjoys two advantages. First, she arrived with a reputation as a creative maverick, won in her 13 years running HR at Southwest Airlines. And second, she had license from the top to do whatever it took to create a world-class organization.

Sartain doesn't just have a "seat at the table" at Yahoo; she actually helped build the table, instituting a weekly operations meeting that she coordinates with COO Dan Rosensweig. Talent is always at the top of the agenda - and at the end of each meeting, the executive team mulls individual development decisions on key staffers.

That meeting, Sartain says, "sends a strong message to everyone at Yahoo that we can't do anything without HR." It also signals to HR staffers that they're responsible for more than shuffling papers and getting in the way. "We view human resources as the caretaker of the largest investment of the company," Sartain says. "If you're not nurturing that investment and watching it grow, you're not doing your job."

Yahoo, say some experts and peers at other organizations, is among a few companies - among them Cardinal Health, Procter & Gamble, Pitney Bowes, Goldman Sachs, and General Electric - that truly are bringing human resources into the realm of business strategy. But they are indeed the few. USC professor Edward E. Lawler III says that last year HR professionals reported spending 23% of their time "being a strategic business partner" - no more than they reported in 1995. And line managers, he found, said HR is far less involved in strategy than HR thinks it is. "Despite great huffing and puffing about strategy," Lawler says, "there's still a long way to go." (Indeed. When I asked one midlevel HR person exactly how she was involved in business strategy for her division, she excitedly described organizing a monthly lunch for her vice president with employees.)

What's driving the strategy disconnect? London Business School's Gratton spends a lot of time training human-resources professionals to create more impact. She sees two problems: Many HR people, she says, bring strong technical expertise to the party but no "point of view about the future and how organizations are going to change." And second, "it's very difficult to align HR strategy to business strategy, because business strategy changes very fast, and it's hard to fiddle around with a compensation strategy or benefits to keep up." More than simply understanding strategy, Gratton says, truly effective executives "need to be operating out of a set of principles and personal values." And few actually do.

In the meantime, economic natural selection is, in a way, taking care of the problem for us. Some 94% of large employers surveyed this year by Hewitt Associates reported they were outsourcing at least one human-resources activity. By 2008, according to the survey, many plan to expand outsourcing to include activities such as learning and development, payroll, recruiting, health and welfare, and global mobility.

Which is to say, they will farm out pretty much everything HR does. The happy rhetoric from the HR world says this is all for the best: Outsourcing the administrative minutiae, after all, would allow human-resources professionals to focus on more important stuff that's central to the business. You know, being strategic partners.

The problem, if you're an HR person, is this: The tasks companies are outsourcing - the administrivia - tend to be what you're good at. And what's left isn't exactly your strong suit. Human resources is crippled by what Jay Jamrog, executive director of the Human Resource Institute, calls "educated incapacity: You're smart, and you know the way you're working today isn't going to hold 10 years from now. But you can't move to that level. You're stuck."

That's where human resources is today. Stuck. "This is a unique organization in the company," says USC's Boudreau. "It discovers things about the business through the lens of people and talent. That's an opportunity for competitive advantage." In most companies, that opportunity is utterly wasted.

And that's why I don't like HR.

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In a knowledge economy, companies with the best talent win. And finding, nurturing, and developing that talent should be one of the most important tasks in a corporation. So why does human resources do such a bad job - and how can we fix it?

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This is an article written by Jeff Glass whom specializes in management for engineers. Although this isn't geared towards traditional business people, there is still a lot of value to be found in his writing.

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"Engineering Management Thought of the Week" Jeff Glass

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I have had the pleasure of teaching Innovation Management this semester to our Master of Engineering Management students at Duke; both distance and residential. The student engagement in the material has been great, making it a lot of fun, including some great analyses of how companies manage innovation (or don't in some cases!). For the current post, I asked students to provide their opinions on the top 10 innovation management concepts (an extra credit assignment for the class). I then choose some of them to share here with a little editing in some cases. I hope you enjoy them - I did.
1. Recognize Innovation vs. Invention 2. Build a Culture of Innovation
This is important because for every great idea that turned into Crocs or Snuggies or Facebook, there are hundreds and thousands that remain just that - great ideas. The book "Managing Innovation" puts it succinctly, to paraphrase, innovation is invention plus. It is invention plus implementation, invention plus value extraction, invention plus extra steps. The invention portion of innovation, whether completely original or incremental, is just the first step in the innovation process. (Colin R.)
3. Cultivate Champions
Innovation is not created by a single individual, but rather by a concerted collective effort of the entire organization. 3M and Google are considered temples for innovation as they cultivate their employees to innovate and have set up a framework that supports integration of innovation across the organization. The company must become an 'innovation factory' where employees are challenged to drive a constant but focused flow of ideas through the factory. The company must support innovation at all levels and should be organizationally structured to support innovation, for example, flat organization structures or innovation cells. (Sreecharan C.) and
4. Fail Early (and Often) 5. Build a Portfolio 6. Practice Open Innovation 7. Engage in Customer development 8. Sharing is Caring. 9. Enlist Diverse Talents and Backgrounds 10. Ten Concepts Don't Tell the Whole Story
"Innovation has nothing to do with how many R&D dollars you have...it's not about money. It's about the people you have, how you're led, and how much you get it" by Steve Jobs in an interview with Fortune Magazine. Innovation is increasingly about teamwork and the creative combination of different disciplines and perspectives. (Haoze Z.)

I think the concept of "champions" plays a very big role in a company's innovation management process regardless of the innovation being sustaining, incremental or disruptive. Companies need these creative, passionate, risk-seekers to sustain their innovative environment. Champions can sometimes stick to their ideas irrationally and advocate them without justification, but the value they bring to the innovation process outweighs this problem. The Stage-Gate process should be utilized to help manage and harness the value of Champions. (Duygu S.)

Start with lots of ideas, but have a process that carefully selects and develops the right ones, and gradually reduces risk as projects proceed. Utilize a "funnel" selection approach by continuing projects that pass pre-determined criteria and dumping those that don't. Using a stage-gate process ensures that resources are not wasted on projects that cannot meet company targets and guarantees that the right activities are undertaken at the right time. (Doug M.)

In innovation, as in investment, we should seek balance. A matrix-based innovation portfolio is an excellent tool to visualize and understand a company's range of projects. The use of portfolio management allows a company to spread risks while taking on projects of varying potential reward. (Doug M.)

Open innovation is a relatively new concept, but due to the many benefits it provides it is currently becoming more popular among innovative companies. Companies go beyond their boundaries and open up their innovation processes to partners, vendors, customers and sometimes even the general public. They are no longer limited by their internal workforce. Previously, every company was responsible for "inventing its own future", but open innovation can enable industry, academia, government and the public to collaborate and contribute to the innovation process. (Duygu S.)

Customer development is as important as product development. Steve Blank's four steps in customer development include -"customer discovery", "customer validation", "customer creation" and "business building". Each should be implemented according to the target industry and company strategy. Although developed for start-up companies, this concept is equally valuable for large organizations. (Shibo F.)

If only your company knew what it knows! Knowledge management is more essential than ever as we deal with increasingly complex projects. How does your company make knowledge sharing easy? Does your company utilize social networks, wikis, blogs, instant messengers, and other communication tools? If not, you're missing out on opportunities to forever capture and pool knowledge that may otherwise be lost. (Doug M.)

Along with experience, in order to have a successful working group, there must be people in the innovation management process who have diverse talents and come from different backgrounds. This creates a team with different points of view in order to foster a climate of creative friction. More ideas - in number, subject, and quality - will be generated, which will lead to stronger innovations. (Colin R.)

Let's face it; this assignment is not very realistic! There are so many facets to innovation that defining the top ten is not really possible. Disruptive Innovation, Blue Ocean Strategy, incentives to motivate employees, core rigidities, life cycle concepts and the S curve, technology forecasting, etc., etc. all have an important place in innovation management. Nonetheless, these important concepts summarized by future innovators for our society is a great start and a fresh view of an important topic. (Jeff G.)

Footnote: Special acknowledgement and thanks to the text we used in the course which discusses many of these concepts: "Managing Innovation: Integrating Technological, Market and Organizational Change," by Joe Tidd and John Bessant.

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I have had the pleasure of teaching Innovation Management this semester to our Master of Engineering Management students at Duke; both distance and residential. The student engagement in the material has been great, making it a lot of fun, including some great analyses of how companies manage innovation (or don't in some cases!).

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IN module 5 we discussed the importance of corporate structure. One of the way to understand that structure is through the visualization of traditional org charts.

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This is an article from Forbes that identifies the way a leader may effectively solve a problem

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With as many problems as we are all faced with in our work and life, it seems as if there is never enough time to solve each one without dealing with some adversity along the way. Problems keep mounting so fast that we find ourselves taking short-cuts to temporarily alleviate the tension points - so we can move onto the next problem. In the process, we fail to solve the core of each problem we are dealt; thus we continuously get caught in the trap of a never-ending cycle that makes it difficult to find any real resolutions. Sound familiar?

Problem solving is the essence of what leaders exist to do. As leaders, the goal is to minimize the occurrence of problems - which means we must be courageous enough to tackle them head-on before circumstances force our hand. We must be resilient in our quest to create and sustain momentum for the organization and people we serve. But the reality of the workplace finds us dealing with people that complicate matters with their corporate politicking, self-promotion, power-plays and ploys, and envy. Silos, lack of budgets and resources, and many other random acts or circumstances also make it harder for people to be productive.

Competitors equally create problems for us when they unexpectedly convert a long-standing client, establish a new industry relationship, or launch a new product, brand or corporate strategy. Mergers & acquisitions keep us on our toes and further distract us from solving existing problems by creating new ones.

As Karl Popper, one of the most influential 20 th century philosophers of science, once eloquently stated, "All life is problem solving." I've often contended that the best leaders are the best problem solvers. They have the patience to step back and see the problem at-hand through broadened observation; circular vision. They see around, beneath and beyond the problem itself. They see well-beyond the obvious. The most effective leaders approach problems through a lens of opportunity.

Leaders who lack this wisdom approach problems with linear vision - thus only seeing the problem that lies directly in front of them and blocking the possibilities that lie within the problem. As such, they never see the totality of what the problem represents; that it can actually serve as an enabler to improve existing best practices, protocols and standard operating procedures for growing and competing in the marketplace. They never realize that, in the end, all problems are the same - just packaged differently.

A leader must never view a problem as a distraction, but rather as a strategic enabler for continuous improvement and opportunities previously unseen.

When I launched my first venture in the food industry, we had a problem with the adhesion of the labels to the glass jar packaging of our products that affected nearly 20% of an initial shipment. As circumstances would have it, this was the first shipment to a new client that was "testing" our new products in 200 stores with an opportunity to expand our distribution to over 2500 stores nationally. Instead of panicking, we took a problem solving approach that involved multiple steps and resulted in a full-blown change management effort with our label supplier, manufacturer, trucking company and client. Rather than viewing this problem simply as a hurdle that could potentially lose us the client, we took proactive measures (and a financial investment) to show our new client that we were capable of not only solving the problem - but earning their trust by responding promptly and efficiently with a comprehensive step-by-step incident report that included our change management efforts.

This experience taught us many lessons about our company and helped us to avoid many unforeseen problems. The ROI from how we handled this problem helped open our eyes to many elements that were previously being overlooked - and in the long run it helped enable us to grow the business.

Whether you are a leader for a large corporation or a small business owner, here are the four most effective ways to solve problems.
1. Transparent Communication
Problem solving requires transparent communication where everyone's concerns and points of view are freely expressed. I've seen one too many times how difficult it is to get to the root of the matter in a timely manner when people do not speak-up.

Yes, communication is a fundamental necessity. That is why when those involved in the problem would rather not express themselves - fearing they may threaten their job and/or expose their own or someone else's wrong-doing - the problem solving process becomes a treasure hunt. Effective communication towards problem solving happens because of a leader's ability to facilitate an open dialogue between people who trust her intentions and feel that they are in a safe environment to share why they believe the problem happened as well as specific solutions.

Once all voices have been heard and all points of view accounted for, the leader (with her team) can collectively map-out a path toward a viable and sustainable solution. As fundamental as communication may sound, don't ever assume that people are comfortable sharing what they really think. This is where a leader must trust herself and her intuition enough to challenge the team until accountability can be fairly enforced and a solution can been reached.

Transparent communication requires you to break down silos and enable a boundary-less organization whose culture is focused on the betterment of a healthier whole. Unnecessary silos invite hidden agendas rather than welcome efficient cross-functional collaboration and problem solving.

Organizational silos are the root cause of most workplace problems and are why many of them never get resolved. This is why today's new workplace must embrace an entrepreneurial spirit where employees can freely navigate and cross-collaborate to connect the problem solving dots; where everyone can be a passionate explorer who knows their own workplace dot and its intersections. When you know your workplace dot, you have a much greater sense of your sphere of influence. This is almost impossible to gauge when you operate in silos that potentially keep you from having any influence at all.

In a workplace where silos exist, problem solving is more difficult because you are more likely dealing with self-promoters - rather than team players fostered by a cross functional environment.. When you operate in a siloed environment where everyone wants to be a star, it becomes increasingly difficult to help make anything or anyone better. This is when problem solving becomes a discouraging task.

Breaking down silos allows a leader to more easily engage their employees to get their hands dirty and solve problems together. It becomes less about corporate politicking and more about finding resolutions and making the organization stronger.

Breaking down silos and communication barriers requires people to be open-minded. In the end, problem solving is about people working together to make the organization and the people it serves better. Therefore, if you are stuck working with people that are closed-minded, effective problem solving becomes a long and winding road of misery.

There are many people in the workplace that enjoy creating unnecessary chaos so that their inefficiencies are never exposed. These are the types of people ( loafers and leeches) that make it difficult for problems to get solved because they slow the process down while trying to make themselves look more important. Discover the lifters and high-potential leaders within the organization and you will see examples of the benefits of being open-minded and how this eventually leads to more innovation and initiative.

Open-minded people see beyond the obvious details before them and view risk as their best friend. They tackle problems head-on and get on with the business of driving growth and innovation. Close-minded employees turn things around to make it more about themselves and less about what is required to convert a problem into a new opportunity.
4. A Solid Foundational Strategy
With this explanation in mind, carefully observe the actions of others the next time you are dealt a real problem.

Without strategy, change is merely substitution, not evolution. A solid strategy must be implemented in order to solve any problem. Many leaders attempt to dissect a problem rather than identify the strategy for change that lies within the problem itself.

Effective leaders that are comfortable with problem solving always know how to gather the right people, resources, budget and knowledge from past experiences. They inspire people to lift their game by making the problem solving process highly collaborative; for them, it's an opportunity to bring people closer together. I've always believed that you don't know the true potential and character of a person until you see the way they solve problems.

Effective leaders connect the dots and map-out a realistic plan of action in advance. They have a strategy that serves as the foundation for how the problem will be approached and managed. They anticipate the unexpected and utilize the strengths of their people to assure the strategy leads to a sustainable solution.

Never shoot from the hip when problem solving. Avoid guessing. Take enough time to step back and assess the situation and the opportunities that each problem represents. Make the problem solving process more efficient by recognizing that each problem has its own nuances that may require a distinct strategy towards a viable resolution.
Also on Forbes:
You know that you have great leadership in your organization when problem solving becomes a seamless process that enables the people and the organization to grow and get better. If problem solving creates chaos, you may have a serious leadership deficiency.

Problem solving is the greatest enabler for growth and opportunity. This is why they say failure serves as the greatest lesson in business and in life. Be the leader that shows maturity, acts courageously, and requires accountability. Applying each of these lessons can help you become a master problem solver. Each experience teaches us all new things. Embrace problem solving and the many unseen treasures it represents.

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The 4 Most Effective Ways Leaders Solve Problems

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With as many problems as we are all faced with in our work and life, it seems as if there is never enough time to solve each one without dealing with some adversity along the way. Problems keep mounting so fast that we find ourselves taking short-cuts to temporarily alleviate the tension points - so we can move onto the next problem.

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This image is a quick outline of one way to approach the managerial decision making process.

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The four steps in the Kepner-Tregoe decision making process

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This has nothing to do with the correct way to approach management problems, however, I thought this was a funny flowchart that describes how many people might approach problems and solve them.

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This article from Time.com covers the ten worst product failings of all time, many of which failed because a lack of quality.

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The larger the company, the greater its capacity for taking risks. While pouring millions of dollars into market research and advertising campaigns can lead to...

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Module 4 was all about quality management, one thing that we didn't discuss very in depth, is the control type six sigma. This article from Investopedia, goes into some of the more basic details and definitions of this type of quality management process.

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What is 'Six Sigma'

Six Sigma is a quality-control program developed in 1986 by Motorola that emphasizes cycle-time improvement and the reduction of manufacturing defects to a level of no more than 3.4 per million. As of 2016, Six Sigma has evolved into a more general business-management philosophy focused on meeting customer requirements, improving customer retention, and improving and sustaining business products and services. Six Sigma is applicable to all industries, and a number of vendors, including Motorola itself, offer Six Sigma training; special certifications include yellow belt, green belt and black belt.

BREAKING DOWN 'Six Sigma'

Six Sigma represents an ideology that focuses on statistical improvements to a business process. Six Sigma advocates for qualitative measurements of success over qualitative markers. Therefore, practitioners of Six Sigma are those business people who use statistics, financial analysis and project management to achieve improved business functionality.

Six Sigma has evolved to define numerous ideas within business and is sometimes confusing. First, it's a statistical benchmark. Any business process that produces less than 3.4 defects per 1 million chances is considered efficient; defects are considered anything that's produced outside of consumer satisfaction. Second, it's a training program and certification that teaches the core principles of Six Sigma. Practitioners can achieve Six Sigma belt levels, ranging from white belt to black belt. Finally, it's a philosophy that promotes the idea that all business processes can be measured and optimized.

The Five Steps of Six Sigma

True believers and practitioners in the Six Sigma method follow an approach called DMAIC: define, measure, analyze, improve and control. It is a statistically driven methodology that users learn through Six Sigma certification or companies implement as a mental framework for business process improvement.

The ideology behind DMAIC is that a business can solve any seemingly unsolvable problem. First, a team of people, led by a Six Sigma champion, defines a faulty process on which to focus, decided through an analysis of company goals and requirements. This definition outlines the problem, goals and deliverables for the project. Second, the team measures the initial performance of the process. These statistical measures make up a list of potential inputs that may be causing the problem and help the team understand the process's benchmark performance.

Third, the team analyzes the process by isolating each input, or potential reason for failure, and testing it as the root of the problem. Through analysis, the team identifies the reason for process error. From there, the team works to improve system performance. Finally, the team adds controls to the process to ensure that it doesn't regress and become ineffective once again.

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A quality-control program developed in 1986 by Motorola. Initially, it emphasized cycle-time improvement and reducing manufacturing defects to a level of no more than 3.4 per million. Since then, Six Sigma has evolved into a more general business-management philosophy focused on meeting customer requirements, improving customer retention, and improving and sustaining business products and services.

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The top 10 companies that control the world's food supplies. Similar to the photo of the myth of choice, this video covers some of the larger CPG corporations that provide us our food.

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Top 10 Companies That Control The World's Food Supply

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They aren't the Illuminati, but they are in control. Join http://www.WatchMojo.com as we count down our picks for Top 10 Companies that Control the World's Food Supply. Click here to subscribe: http://www.youtube.com/subscription_center?add_user=watchmojo or visit our channel page here: http://www.youtube.com/watchmojo Also, check out our interactive Suggestion Tool at http://www.WatchMojo.com/suggest :) Check us out at http://www.Twitter.com/WatchMojo, http://instagram.com/watchmojo and http://www.Facebook.com/WatchMojo.

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I included this picture of several global companies in the CPG industry. I thought this was interesting, because as companies succeed on a global level, they tend to turn into larger and larger conglomerates.

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This article from Harvard Business Review covers what they believe are the 10 rules that must be followed while managing a global company. The biggest insight that I pulled from this article was rule number 7, which states to allocate resources based on capability rather than availability. Which is a good management style I think for companies that aren't necessarily global.

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Companies are well aware that hidden in their dispersed, global operations is a treasure trove of ideas and capabilities for innovation. But it's proving harder than expected to unearth those ideas or exploit those capabilities in global innovation projects. Some of the challenges of global projects are familiar: figuring out the right role for top executives, for example, or finding a good balance between formal and informal project management processes.

But although the challenges may be familiar, the solutions are not; what works for an innovation project conducted in a single location doesn't necessarily work for one dispersed across many sites around the world. That's partly because many important enablers of innovation happen naturally in colocation. Single location projects draw on large reservoirs of shared tacit knowledge and trust, and when issues arise, senior management is on hand to make decisions and provide direction and support. Team members share the same language, culture, and norms, enabling flexibility and iterative learning as the project unfolds.

When a project spans multiple locations, many of those natural benefits-often taken for granted-are lost. Part of the challenge of dispersed innovation thus becomes how to replicate the positive aspects of colocation while harnessing the unique benefits of a global initiative. To explore this challenge, we spent more than a decade doing field research at 47 companies around the world, including Citibank, HP, Hitachi, Infosys, Intel, LG Electronics, Novartis, Philips, Samsung, Siemens, Vodafone, and Xerox. In 2004 we teamed up with Booz & Company to conduct a global survey that was completed by 186 companies from 19 countries and 17 sectors, with a combined innovation spend of more than US$78 billion. We draw on that work to present a set of guidelines for successfully managing global innovation projects.

1. Start Small

One of the chief enablers of dispersed innovation is the experience of the participating sites in working on global projects. No matter how strong technical capabilities or customer knowledge may be at a particular site, employees will struggle to make a contribution to a global project commensurate with their skills if they have had experience only in colocated development. That's because on single location projects, team members benefit from collective tacit knowledge and a shared context, both of which support rich communication and help build trust and confidence among coworkers. Projects that span multiple sites and time zones are often hobbled by differences in workplace practices, communication patterns, and cultural norms. In the absence of everyday interactions and encounters, people struggle to signal trustworthiness and demonstrate competencies. Making matters worse, many teams are used to competing for resources with teams at other sites, and this creates yet another barrier to trust and collaboration between sites.

To be effective, dispersed teams have to develop a new set of collaboration competencies and establish a collaborative mind-set. This can be done by running small, dispersed projects involving just two or three sites before a project launch. Schneider Electric and Toshiba, two global electronics manufacturers, took this approach when they formed a joint venture, STI, to develop electrical drives and inverters. Although management was enthusiastic about the new partnership, engineers at the two companies were not. To build trust between sites, STI organized a series of small, noncritical joint projects under the close scrutiny of senior managers. By the end of the first project, the teams had already begun to feel comfortable collaborating with colleagues at other sites. They quickly established consensus on working practices and protocols, reinforcing trust and providing a good foundation for the more complex global initiatives to come.

2. Provide a Stable Organizational Context

During periods of major organizational change, such as restructurings or acquisitions integration, the complexity of dispersed innovation escalates. Top managers are likely to be focused elsewhere within the organization, leaving their global projects orphaned. Critical decisions are frequently left hanging, and problems often go unaddressed. In a climate of organizational uncertainty, turf battles can flare up, and project team members may become concerned about job security and lose focus.

Consider a global electronics firm we'll call Elecompt. It launched a global innovation project at a time when new acquisitions were being integrated and a major reorganization of R&D was under way. Although the project was of strategic importance, management focus was understandably elsewhere. Problems came to a head when, prompted by fear of job losses, large numbers of highly skilled engineers at one site left the company, causing significant delays.

Of course, it's not possible to undertake global innovation projects only in times of sustained stability, so managers need to anticipate the possible toxic side effects of reorganization on global innovation and shelter teams as much as possible from disruptions. They should focus on creating an atmosphere of stability and bolster employees' sense of self-worth and loyalty to the firm. This will be particularly important for firms that are expanding R&D in China, where competition for talent is so intense that loyalty to employers rarely has time to develop.

3. Assign Oversight and Support Responsibility to a Senior Manager

When the knowledge base underlying a project is fragmented and project teams are scattered over multiple locations, miscommunication, conflict, and stalemates over crucial decision making are much more likely. Project teams often struggle to handle these problems constructively over a distance, especially when disagreements become personal, and so senior managers have to take on a formal role as arbiter, risk manager, support provider, and ultimate decision maker.

Contrast this with the more familiar world of single location projects, where senior managers can give the go-ahead to an innovation project and then step back and let the team get on with it. This hands-off approach works because on-site executives can rely on informal communication and feedback mechanisms to maintain oversight. Being on the spot, they're more likely to become aware of difficulties early on and can intervene when necessary to resolve them.

Companies that are smart about global innovation create an explicit role for senior executives in their projects. For example, at Essilor, a global corrective lens manufacturer, an executive team member is assigned to head up every international project. He or she monitors project progress and is responsible for making key decisions and ensuring that the project meets the firm's strategic objectives.

Essilor undertook a project to develop photochromic lenses with partners PPG and Transitions Optical. The project involved more than 20 sites around the world. To ensure first mover advantage, the schedule was extremely aggressive. Once the project was under way, it became clear that to hit the launch date, the production ramp-up phase would have to be reduced. This could be achieved only by taking shortcuts in the production validation and evaluation processes. None of the managers of the 18 production facilities were comfortable with that kind of risk.

With loose executive oversight and unclear decision rights, the project might have stalled or derailed before the issue came to the attention of senior management. But the executive responsible for the project saw the dilemma immediately and took it to the executive committee. Because time to market was critical, the committee agreed to the shortcuts and made it clear that the risk belonged to the project, not to the production sites. The problem was resolved without any disruption to the work flow, and the product was launched on schedule.

4. Use Rigorous Project Management and Seasoned Project Leaders

In addition to a fully engaged senior manager, a global innovation project requires a strong project management team to drive the project on a day-to-day basis and strong team leaders supported by robust tools and processes. These are necessary to impose discipline, structure, and a shared sense of purpose across the locations.

Firms can approach these challenges in a number of ways. Some adopt rigorous quality programs to provide formal project management for global projects. Siemens uses Design for Six Sigma to define common analytical tools, provide coaching, and set targets and timetables for feedback meetings. Those processes are then adopted across all sites.

Alternatively, firms can build a corporate project-management capability. Essilor, the lens manufacturer, has a corporate unit that runs global projects. The unit includes staff members from all functions and geographies-many of whom spend several years as project managers of global innovation efforts before returning to their area of specialty. These positions are desirable ones: Project managers value the opportunity to work closely with the senior executives assigned to their projects. And because the roles involve extensive travel and exposure to different parts of the firm, project managers leave the unit having built strong cross-cultural skills and robust relationships and networks all over the world.

It's important to note that global innovation projects are so complex that standard tools and processes don't always work well. At the joint venture STI, a project manager realized that misunderstandings resulting from e-mail communication between teams were causing the schedule to slip. With senior management support, he successfully introduced a protocol requiring that all initial communication on a topic be voice-to-voice. At the software firm Synopsys, the global development of a new product ran in parallel to the incremental development of an existing product, a traditional approach at many firms. Concerned that this would lead to an "us versus them" culture, the project manager organized work spaces to mix up the two teams.

5. Appoint a Lead Site

Each site involved in global innovation will see the project through the prism of its own contribution and context, rather than putting the bigger picture first. That's why all sites can't carry equal weight, even if their experience and expertise are equivalent; one has to be designated the lead. That site takes responsibility for delivering the project on time and on budget.

Let's compare the approaches taken by Elecompt on its global project and by Schneider on its STI joint venture with Toshiba. Each site involved in the STI project was a global leader in its field. However, the French site, which had been heavily involved in defining the new product requirements, was given responsibility for the project: coordinating the project management team, integrating the work of the other sites, and making final decisions. Having a clear lead site ensured prompt decision making and a project successfully delivered on time and on budget.

At Elecompt, each site had equal weight in making decisions and managing the project. That meant that every decision and aspect of cooperation had to be negotiated among multiple sites, at best a slow and cumbersome process. With each site defending its own corner, stalemates were common. One engineer noted that "there was an escalation of problems without corresponding solutions." Two years into the project and with renewed senior management focus, the necessary management structures were finally put in place to enable the project to progress.

6. Invest Time Defining the Innovation

Anyone who has worked on a single location project knows that the product or service delivered isn't always what was anticipated at the outset. This is actually one of the great benefits of colocation innovation. Because everyone involved is under the same roof and in frequent communication, continuous learning and adaptation can take place, allowing the design of the product or service to improve over the course of the project.

When a project is split over time zones, cultures, and languages, there is very little latitude for iterative learning. Instead, everything must be defined up front: the product or service architecture, the functionality of individual modules, and the interdependencies and interfaces between modules. In addition, process flows, timelines, and knowledge requirements need to be thoroughly understood so that everyone working on the project has the same understanding of the goals and their individual contributions to them.

Although there is a natural temptation to dive into development as soon as possible, studies show a positive correlation between investment in defining goals and technical specifications and the successful outcome of projects. In the case of Essilor's photochromic lens, despite having less than two years to deliver the new product, the project team invested nine months in defining the modules and multiple interfaces that would be handled by specialist teams from around the world, thereby building a solid foundation for success.

During the definition process, representatives from each project team were colocated for short periods of time. In addition, the constantly globetrotting project managers held frequent on-site meetings and spent time conferring face-to-face with team members. We believe that a global project can't be effectively defined without some degree of colocation between the different functions and sites involved. Colocation builds relationships and trust up front and supports the sharing of complex ideas and concepts.

7. Allocate Resources on the Basis of Capability, Not Availability

The question of how best to staff a project rarely arises when only one location is involved: That location has presumably been chosen because the teams there have the requisite skills and experience. The effective staffing of a global project, however, requires a great deal of attention in order to select and integrate the best possible knowledge and capabilities.

But all too often, firms see global projects as an opportunity to make the most efficient use of human resources. Teams are selected not because they are the best qualified but because they are available at the time. The consequences of this approach can be seen in the Elecompt project. One of the sites, a U.S. team, was asked to develop a critical piece of software because it had the most staff availability, even though it lacked the required experience, and it struggled as a result. Eventually, when resources became available elsewhere, this module was moved to a team that had the necessary capabilities-but by then, morale had been dented, time wasted, and costs increased.

This availability approach to staffing projects completely undermines the basic rationale for global innovation-to bring together distinctive and differentiated knowledge and capabilities from around the world to create unique innovations. If teams are selected merely because they aren't doing anything else at the time rather than for their distinct capabilities, the project will take on a lot of risk for little benefit.

8. Build Enough Knowledge Overlap for Collaboration

Although sites involved in a project should be selected on the basis of the unique capabilities and knowledge they can bring, there also has to be a small degree of knowledge overlap between sites. Without this, critical interdependencies between modules may not be apparent until the integration phase, when problems are costly to rectify. This doesn't mean replicating the other sites' knowledge, but understanding enough of what they do to anticipate potential interdependencies and interfaces in the development process.

At Siemens, virtual cross-functional teams provide knowledge overlaps to help avoid such problems. Each module is developed by a specialist team and overseen by a virtual team comprising representatives from each of the other modules. This allows potential problems to be flagged and resolved as they arise.

9. Limit the Number of Subcontractors and Partners

In most innovation projects today, part of the work is outsourced or undertaken by development partners in order to access specific competencies, reduce development time, or cut costs. The final consideration in staffing global projects is selecting these external collaborators.

Managing relationships with external parties takes time and energy. So it makes sense in global projects to limit the additional complexity and management burden by keeping the number of subcontractors or partners to a minimum. And just as it's essential to use internal sites that have experience working together, it's easier and less risky to turn to external firms that are trusted and familiar. Choosing partners or subcontractors located close to one of the internal project sites will likewise reduce the potential for cross-cultural misunderstandings and will support face-to-face communication.

An example of the problems that can be caused by involving too many distant external partners in an innovation project can be clearly seen in Boeing's 787 Dreamliner project. This ambitious effort aimed to develop a new plane with significantly reduced operating costs by using innovative composite materials. The project involved over 50 main partners across the U.S., Europe, and East Asia, each charged with developing different subsections.

Coordinating that many partners was difficult, and Boeing had little insight into what was happening at each site. Integration proved extremely complex and constant modifications were required-for example, the new materials initially made it impossible to attach the wings to the fuselage. To get the project back on track, Boeing resorted to colocating its partners for six months. Although the final product was a success, it was delivered almost three years late, during which time Boeing lost orders to the Airbus A350.

10. Don't Rely Solely on Technology for Communication

In the end, the successful execution of a global project remains dependent upon communication channels that go as far as possible to replicate the richness of colocated communication. In single locations, a shared context-cultural, organizational, functional, and technological-makes it easier to discuss complex ideas and resolve problems informally. Because communication in this environment is second nature, managers tend to underestimate the challenge of scaling communication globally.

Information and communications technologies, or ICTs, including e-mail, web meetings, social media platforms, online forums, and video conferencing certainly have a role to play, but those tools shouldn't be overrelied on, because they tend to mask differences between locations, leading to misunderstandings and tension. In addition to ICTs, the communication armory for a global innovation project should include a generous travel budget for face-to-face site visits, project team meetings, and temporary transfers for key people. Also, to encourage team members to feel an allegiance and sense of belonging to a global project rather than their local site, a web of cross-site reporting lines can be put in place. This has the added advantage of forcing communication and knowledge sharing.

Successful globally integrated firms understand the importance of an extensive communications approach. Tata Communications, for example, has a highly dispersed structure that enables it to access the best competencies and market knowledge around the world. Even its top management team is dispersed across the globe. The company has invested in a raft of ICTs to support everyday collaboration, but this is in addition to hefty travel budgets for vital, regular face-to-face communication to drive projects forward, share knowledge, and reinforce trust.Together, the 10 steps we have outlined represent the foundation for successful global innovation projects. Adopting only one or two may result in fleeting success in some projects but will not produce a stream of positive outcomes. These best practices all need to be put in place and honed over time. It's not easy to build a global innovation capability, but for companies that don't have the skills and processes in place to manage global innovation projects, the future offers a stark choice: Continue with only colocated projects, in the hope that they will fill the innovation pipeline for a few more years until global competition intensifies and makes local innovation a niche activity. Or begin building a capability in global innovation now to take advantage of lower development costs, faster time to market, and, most important, the ability to leverage dispersed knowledge to gain competitive advantage.

A version of this article appeared in the October 2012 issue of Harvard Business Review.

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Companies are well aware that hidden in their dispersed, global operations is a treasure trove of ideas and capabilities for innovation. But it's proving harder than expected to unearth those ideas or exploit those capabilities in global innovation projects.

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This article from Hult.edu outlines the 11 largest challenges when it comes to running and international corporation. The number 1 challenge that they list is structuring a company for international business. The second largest challenge is dealing with international laws, and their potential issues with domestic.

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From the U.K.'s unprecedented decision to leave the European Union to the historic and divisive U.S. presidential election, 2016 was a year of large-scale change and uncertainty. Nowhere, perhaps, was it felt more keenly than in the world of international business. Political, economic, and environmental issues are increasingly becoming the remit of international business leaders as much as governments.

At Hult, our aim is to prepare our students to become the next generation of global business leaders, embracing the opportunities and challenges of international business. While the global marketplace becomes more interconnected and accessible, the risks involved in doing business abroad are not to be taken lightly.

Expanding business overseas means reaching new clients or customers and potentially boosting profits. Despite all the uncertainty of 2017 and the challenges that have yet to reveal themselves, there are some guidelines for conducting business on a global scale that you should always consider before leaping into new international operations. Here is our advice on how to tackle the 11 biggest challenges for international business:

International company structure

If your aim is to be competitive globally, you must have a team in place that's up for the challenge. One fundamental consideration is the structure of your organization and the location of your teams.

For instance, will your company be run from one central headquarters? Or will you have offices and representatives "on the ground" in key markets abroad? If so, how will these teams be organized, what autonomy will they have, and how will they coordinate working across time zones? If not, will you consider hiring local market experts who understand the culture of your target markets, but will work centrally?

Coca-Cola offers one example of effective multinational business structure. The company is organized into continental groups, each overseen by a President. The central Presidents manage Presidents of smaller, country-based or regional subdivisions. Despite its diverse global presence, the Coca-Cola brand and product is controlled centrally and consistent around the world.

While Coca-Cola is a vast international brand, the structure of your business and the number, nationality, and level of expertise of your team will vary depending on your industry, product, and the size of your business.

Foreign laws and regulations

Along with getting your company structure in place, gaining a comprehensive understanding of the local laws and regulations governing your target markets is key. From tax implications through to trading laws, navigating legal requirements is a central function for any successful international business. Eligibility to trade is a significant consideration, as are potential tariffs and the legal costs associated with entering new markets.

Airbnb ran into trouble in 2014, with a crackdown on advertised rental properties falling outside local housing and tourism regulations. The company was forced to pay a €30,000 fine for a breach of local tourism laws in Barcelona.

It's important to note that employment and labor requirements also differ by country. For instance, European countries stipulate that a minimum of 14-weeks maternity leave be offered to employees, while on the other hand, there is no such requirement for U.S. employers. With the complexity involved in foreign trade and employment laws, investing in knowledgeable and experienced corporate counsel can prove invaluable.

Beyond abiding by official laws, engaging in international business often requires following other unwritten cultural guidelines. This can prove especially challenging in emerging markets with ill-defined regulations or potential corruption. In response, companies doing business in the United States must abide by the Foreign Corrupt Practices Act, which aims at eliminating bribery and unethical practices in international business. A good rule of thumb is to beware of engaging in any questionable activities, which might be legal but could have future reputational repercussions.

International accounting

Of the main legal areas to consider when it comes to doing international business, tax compliance is perhaps the most crucial. Accounting can present a challenge to multinational businesses who may be liable for corporation tax abroad. Different tax systems, rates, and compliance requirements can make the accounting function of a multinational organization significantly challenging.

Accounting strategy is key to maximizing revenue, and the location where your business is registered can impact your tax liability. Mitigating the risk of multiple layers of taxation makes good business sense for any organization trading abroad. Being aware of tax treaties between countries where your business is trading will help to ensure you're not paying double taxes unnecessarily.

A focus on tax efficiency is often the aim of international accounting efforts. In the European Union, companies may benefit from the Common Consolidated Corporate Tax Base proposal, whereby companies with operations around the EU can limit tax liability to one corporate center. Tax consolidation is a feature of several multinationals' decision to be headquartered in Dublin, as Ireland is known for its "business-friendly" corporate tax policy. Well-known companies with operational headquarters in the Republic of Ireland include Google, Facebook, and Intel.

Cost calculation and global pricing strategy

Setting the price for your products and services can present challenges when doing business overseas and should be another major consideration of your strategy. You must consider costs to remain competitive, while still ensuring profit. Researching the prices of direct, local-market competitors can give you a benchmark, however, it remains essential to ensure the math still works in your favor. For instance, the cost of production and shipping, labor, marketing, and distribution, as well as your margin, must be a taken into account for your business to be viable.

Pricing can also come down to how you choose to position your brand - should the cost of your product reflect luxury status? Or will low prices help you to penetrate a new market? Swedish furniture giant Ikea, known in Europe for its low-cost value, struggled initially in China due to local competitor costs of labor and production being much cheaper. By relocating production for the Chinese market and using more locally sourced materials, the company was able to successfully cut prices to better reflect its brand and boost sales among target consumers.

Wherever you're looking to launch your product or service, here are four useful strategies to help you find the right price:

Source: AmericanExpress

Universal payment methods

The proliferation of international e-commerce websites has made selling goods overseas easier and more affordable for businesses and consumers. However, payment methods that are commonly accepted in your home market might be unavailable abroad. Determining acceptable payment methods and ensuring secure processing must be a central consideration for businesses who seeks to trade internationally.

Accepting well-known global payment methods through companies like Worldpay, as well as accepting local payment methods, such as JCB in Asia or Yandex Money in Russia, can be a good option for large international businesses. Accepting wire transfers, PayPal payments, and Bitcoin, are other possibilities, with Bitcoin users benefiting from no bank or credit card transaction fees. Despite the risk of fluctuating value, the lack of fees is one of the reasons a number of online companies, including WordPress, the Apple App Store, Expedia, and a number of Etsy sellers accept Bitcoin.

While price setting and payment methods are major considerations, currency rate fluctuation is one of the most challenging international business problems to navigate. Monitoring exchange rates must therefore be a central part of the strategy for all international businesses. However, global economic volatility can make forecasting profit especially difficult, particularly when rates fluctuate at unpredictable levels.

Major fluctuations can seriously impact the balance of business expenses and profit. For instance, if your company is paying suppliers and production costs in U.S. dollars, but selling in markets with a weaker or more unpredictable currency, your company could end up with a much smaller margin - or even a loss. One way to protect yourself against large fluctuations in currency is to pay suppliers and production costs in the same currency as the one you're selling in. This may mean switching to more local production where possible in order to better balance your outgoings and sales revenue.

Another option for mitigating the risk of unpredictable currency rates can be setting up a forward contract and agreeing a price in advance for future sales. Of course, this potentially means missing out on greater profit should rates shift in your favor. However, it can protect your sales from the risk presented by unstable currency.

Learn more about six key factors that can influence currency exchange rates:

Choosing the right global shipment methods

The potential of online sales presents a huge international business opportunity for retailers in the 21st century, but finding reliable, fast, and cost-effective shipment and distribution methods can be a difficult balance in some markets. Depending on the volume and destination of your shipments, will you send by land, sea, air, or a combination? Your choice of shipping method can be a major influence on your revenue and may be a limiting factor to the products you can viably sell overseas.

Other considerations to address according to your company's products and your target markets include customs fees, the need and cost of storage, and local methods of distribution. There are also country-specific regulations and shipping requirements to take into account. For a quick check of costs and compliance, UPS International has created an online tool called TradeAbility to help businesses and individuals manage the movement of good overseas.

Communication difficulties and cultural differences

Good communication is at the heart of effective international business strategy. However, communicating across cultures can be a very real challenge. At Hult, developing cross-cultural competency and communication skills are a core focus inside and outside of the classroom.

Effective communication with colleagues, clients, and customers abroad is essential for success in international business. And it's often more than just a language barrier you need to think about - nonverbal communication can make or break business deals too. Do your research and know how different cultural values and norms - such as shaking hands - can and should influence the way you communicate in a professional context. Being aware of acceptable business etiquette abroad, and how things like religious and cultural traditions can influence this, will help you to better navigate potential communication problems in international business.

Discover the subtle nuances of body language for different countries and nationalities you may be doing business with:

Source: BusinessInsider

"Hult gave me an opportunity to open my mind towards the world. It helped me gain perspective towards people from different countries such that I can go to any country and start working without any culture shock."
Mayur Chimurkar
MBA Class of 2014

Cultural differences can also influence market demand for your product or service. The need your business may address at home may already be met or not exist at all overseas. Local market insight is key, and there are a number of successful brands whose business models simply weren't viable in overseas markets. For instance, American coffee company Starbucks seriously struggled in Australia, where the demand for local, independent cafes and coffee shops vastly outweighed the appeal of the corporate giant.

Small practical considerations can also be easily overlooked, such as creating quality translations of product and marketing materials, and even ensuring your brand name works well abroad. A number of well-known companies have had to consider adapting the names of their brand or product when launching in a foreign market. The Chevrolet Nova is perhaps the most commonly cited example, where "no va" literally translates to "no go" in Spanish-not the best product name for a car. Although slumping sales figures in Latin America have proven to be an urban legend, the story of the "no go" car serves as a useful reminder of the importance of preparing well before launching your business in a new market.

An obvious risk for international business is political uncertainty and instability. Countries and emerging markets that may offer considerable opportunities for expanding global businesses may also pose challenges, which more established markets do not. Before considering expansion into a new or unknown market, a risk assessment of the economic and political landscape is critical.

Issues such as ill-defined or unstable policies and corrupt practices can be hugely problematic in emerging markets. Changes in governments can bring changes in policy, regulations, and interest rates that can prove damaging to foreign business and investment.

A growing trend towards economic nationalism also makes the current global political landscape potentially hostile towards international businesses. For instance, companies like Facebook are banned in China, partially in preference for national social networks and also due to government regulation over internet content. Monitoring political developments and planning accordingly can mitigate political risks of doing business abroad.

Supply chain complexity and risks of labor exploitation

When it comes to sourcing products and services from overseas, managing suppliers and supply chains can also be a tricky process. Unfortunately, the length and complexity of supply chains increases the chance of working with suppliers who have unethical - and even illegal - business practices. Of growing concern is the risk in international business of forced labor and worker exploitation.

In October 2015, the UK passed the Modern Slavery Act in response to this often-hidden human rights violation. Recent research led by a partnership between Hult International Business School and the Ethical Trading Initiative revealed that an astonishing 77% of businesses believe that modern slavery exists at some point in their supply chains.

To raise awareness and help local and international businesses respond more effectively to this issue, their published research report presents case studies of businesses who have implemented practices at the leading edge of the fight against modern slavery. As the research team continues to bring their findings to light, developing and supporting ethical and sustainable business practices remains a focus in the Hult classroom.

"International conventions and national legislation make modern slavery illegal, but we are still a long way from its final eradication. Businesses can play an important role in addressing modern slavery."
From Corporate Leadership on Modern Slavery

Download the report on Modern Slavery from Hult International Business School

Worldwide environmental issues

As the environmental risks and effects of climate change are becoming better understood, sustainability is high on the agenda of many major global corporations. Recent international legislations and proposals, such as the UN's Sustainable Development Goals, have put environmental issues at the forefront of international business development. The Ashridge Centre for Business and Sustainability at Hult researches innovative ways that organizations can develop and implement more environmentally sustainable business models.

On a practical level, if you're considering expanding your business overseas, it's important to be aware of the country-specific environmental regulations and issues associated with your industry. Some key considerations include how your production methods might impact the local environment through waste and pollution.

Beyond a legal or ethical incentive to be more eco-friendly, establishing environmentally conscious business practices can attract new, forward-thinking consumers to your company. With a number of brands such as Dell, Renault, and MUD Jeans leading a shift towards the circular economy, there is an opportunity and demand for changing production methods and consumer behavior to establish a more sustainable future for the environment and society as a whole.

In the video below, Dr. Mark Esposito discuss the global business and societal benefits of the circular economy:

Closing thoughts

As we see what the first months of the new year will bring for international business, new opportunities, challenges, and uncertainties will continue to arise. How are you preparing to make the most of the opportunities of doing business overseas in 2017? Comment below with any further issues or challenges and how your organization is overcoming them.

Want to learn more? Discover how Hult's unique global Masters, One-Year MBA, and EMBA programs are designed to prepare globally minded professionals to overcome the pressing problems of doing business on the international stage.

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11 Biggest Challenges of International Business in 2017 - Hult News

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From the U.K.'s unprecedented decision to leave the European Union to the historic and divisive U.S. presidential election, 2016 was a year of large-scale change and uncertainty. Nowhere, perhaps, was it felt more keenly than in the world of international business. Political, economic, and environmental issues are increasingly becoming the remit of international business leaders as much as governments.

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This is an article about the important of business ethics and how it can affect your company. The article is hosted on the Edward Lowe website. Although ethics is a relatively vague topic in business, with no true measurements, Edward Lowe takes a shot at defining some of the more rudimentary points of being ethical.

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Digital Library > Building and Inspiring an Organization > Ethics "Why You Need Good Business Ethics"

What makes for good business ethics? We give you a few examples and their payoffs, plus proven ways to ensure that ethical conduct holds sway at your company.

Good ethics make good business sense. Your company stands to profit from a reputation for acting with honesty and integrity.

Environics International recently surveyed 25,000 people in 23 countries; 50% said they "pay attention" to the social behavior of companies. One in five said they'd protested poor social performance by speaking out against the companies or refusing to buy their products.

Bottom line: Your policies and actions are under constant scrutiny and assessment by those who can make or break your business. Can you afford not to do the right thing?

In this Quick-Read you will find:

How to choose an ethical course of action.

Ways to do right by your employees.

Tips for treating customers ethically.

Having a code of ethics helps your company define and maintain standards of acceptable behavior. A good ethical framework can help guide your company through times of increased stress, such as rapid growth or organizational change, and decreases your firm's susceptibility to misconduct. Ensuring ethical practices in the workplace, such as with personnel policies, can stave off expensive litigation or fines in the future. Last but not least, it can translate to great PR for your business.

What makes for good business ethics? A few examples:

Treat your employees well. Pay fair wages, and keep your promises. Act quickly to put an end to any kind of harassment, and show the same high level of respect for all your employees. Payoff: Low turnover, high employee motivation and productivity. Commitment to growing your company.

Be honest in all business dealings. Pay suppliers the amount agreed upon, and on time. Be fair with customers, not over-charging and not inflating the quality or potential of your products or services. Payoff: A sterling reputation that will help sustain your company even when times are tough.

Be socially responsible. Don't pollute the environment; recycle when possible. Heed protests of company policy or actions. Give back to the community through charity fund-raising or other worthy causes. Payoff: Goodwill that enhances your reputation as a positive force in the community.

Back up your products and services. Provide what you promise on your service contracts and in your advertising. Example: A Canadian roofing company won't accept payment on roof replacement or repair until after a rainfall proves the roof doesn't leak. Payoff: Repeat business as customers learn they can trust you not to cheat them - and these people tell their friends.

Here are two proven ways to ensure that ethical conduct holds sway at your company:

1. Adopt a code of ethics. This is a formal statement that sets standards of behavior for everyone in the company. Your code can range widely, from confidentiality (keeping trade secrets) to dealing with sexual harassment. Specify any penalties for violations. If the company goals in your long-range plan are respected and referred to frequently, add following the ethics code to them.

2. Do a quick "ethics check" when necessary. If you're not sure whether a decision or action would be ethical, ask yourself:

Is it legal? Would I be violating federal, state or municipal law?

Is it in accordance with company policy?

Is it fair? Would anyone lose out?

Would I be proud of my action? How would I feel if my family and friends read about it on the front page of the newspaper?

How would our customers react? Would they be more inclined to trust us, or feel cheated or betrayed?

"Honesty in dealing with our customers" is paramount at RMI, wholesale distributors of gas equipment in Lee, Mass., says Jim Creer, manager of operations and materials. "We'll honor the price we've negotiated with a customer - even if we've mistakenly given a price that cuts the profit margin for us," says Creer. The goodwill generated by such a policy is priceless.

RMI also "fesses up" when orders are messed up somehow. "The wrong item might be shipped to a customer and then we discover someone here made an error putting the order into the system," says Creer. Denial of responsibility - often the first reaction when a company errs - doesn't wash at RMI.

"We'll admit our mistake right away," says Creer, "and take responsibility for getting back the wrong item and making sure the customer gets the right product at no extra charge."

Though they may never say it outright, "customers fully appreciate being treated with integrity. They prove it by their long-term loyalty to a company that doesn't dodge responsibility - and quickly rectifies its mistakes."

1. Model the ethical behavior you expect of your employees. Treat them with honesty and respect if you want them to give one another - and your customers - the same treatment.

2. Provide employees with opportunities for personal and professional growth. Tailor incentives to individual needs.

3. Educate employees about ethics. Use hypothetical situations: "What would you do if a valued customer kept making suggestive remarks to a junior staffer?"

4. Empower employees to treat customers right. Don't criticize good ethical decisions made on the front line, such as taking returns from loyal customers who don't have receipts.

5. Make sure employees are aware of your code of ethics. Encourage them to discuss ethical concerns with you or another designated individual. Take those concerns seriously, and ensure confidentiality. Consider an anonymous survey of the entire staff asking them to define the organization's ethical strengths and weaknesses.

6. Share your code of ethics with customers. Invite them to be open regarding any doubts they have about the integrity of your company and employees. Don't react defensively.

7. Reward ethical behavior. This can be done through raises, bonuses and employee recognition awards.

RESOURCES [ top] Books
Good, the Bad, and Your Business: Choosing Right When Ethical Dilemmas Pull You Apart by Jeff Seglin (John Wiley & Sons, 2000). Seglin, a popular writer for Inc, provides ethical perspective through a series of anecdotes.

A Better Way to Think about Business: How Personal Integrity Leads to Corporate Success by Robert C. Solomon (Oxford University Press, 1999). Solomon does not prescribe action so much as ruminate on integrity in the business setting.

Eighty Exemplary Ethics Statements compiled by Patrick E. Murphy (Notre Dame Press, 1998).

Managing Business Ethics: Straight Talk About How to Do It Right, 2nd ed. by Linda K Trevino and Katherine A. Nelson (Wiley, 1999). Managing Business Ethics is a textbook that offers more prescriptive advice than most books on business ethics.
Article
" The Values That Sustain Entrepreneurs" by Ray Smilor
Internet Sites Fast Company: Social Justice Ethics and Conflict of Interest Resolving Real-Life Ethical Dilemmas Ethics Today Article Contributors
Writer: Kathleen Conroy

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Why You Need Good Business Ethics - Edward Lowe Foundation

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Digital Library > Building and Inspiring an Organization > Ethics "Why You Need Good Business Ethics" What makes for good business ethics? We give you a few examples and their payoffs, plus proven ways to ensure that ethical conduct holds sway at your company. Good ethics make good business sense.

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This is an article from the New York Times that covers the Corporate Governance issues that have been taking place internally in the Bank of America corporation. The disagreements are over the multiple positions held by one of their chairmen. What's interesting about this article and it's effect on governance is where it stems from. The issues actually come from shareholders, not from employees. I feel as though many corporate governance issues stem from workforce, in examples of strikes, etc.

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That is the goal of corporate governance, after all, to make companies run better and produce shareholder wealth. (There may be other definitions, but that is a topic for another column.)

Advocates of separating the two jobs say it will produce greater wealth because it will lead to better corporate oversight and a better-run company.

According to that argument, the chances that an imperial chief executive will lead the company blindly to ruin are reduced if there is a chairman to keep the executive in check.

But the studies have yet to show that a separation of the jobs increases a company's value, and many find the opposite. This may be because simply splitting the positions does not lead to better oversight. The outcome depends on the people involved, and a new chairman may not have had much experience with the company. Would an independent chairman appointed in, say, 2005 have had the foresight to save a company from the financial crisis?

More broadly, research has found no link between the number of independent directors on a board and a company's worth.

This illustrates that there is no consensus on what constitutes good corporate governance.

Bank of America stepped into this gulf when it announced the change in bylaws and appointed its chief executive, Brian T. Moynihan, chairman. The bank also appointed a lead independent director to provide the oversight that an independent chairman would perform.

When shareholders objected to the change, Bank of America did the right thing: It apologized and scheduled a special vote on the matter. The bank was trying to make amends for what was at worst a public relations blunder by failing to properly consult with its shareholders on the move beforehand.

Still, no good deed goes unpunished in the corporate governance wars.

The California Public Employees' Retirement System and the California State Teachers' Retirement System, the two largest public pension funds in the country, came out vocally against Bank of America. Both funds broadly contend that combining the jobs of chairman and chief executive in one person reduces the oversight of any company. Other public pension funds followed suit, as did the proxy advisory services Institutional Shareholder Services and Glass Lewis.

Some pension funds also argued that Bank of America still needed a greater degree of oversight after its reckless maneuvers before the financial crisis led to the destruction of tens of billions of dollars of shareholder value.

Other justifications were cited. One was that the lagging performance of Bank of America's stock price justified the split. Another was that Bank of America had defied its shareholders by adopting the joint title and needed to be reminded that shareholders were in control.

Pitted against the pension funds were the mutual funds. Unlike the pension funds, the mutual funds are becoming more skeptical of the corporate governance revolution. And they have supported companies that give the chairman and chief executive jobs to one person, for example, at JPMorgan Chase.

Bank of America's 10 largest shareholders are all mutual funds or other asset managers, according to the research firm Standard & Poor's Capital IQ. The biggest is BlackRock, with 5.5 percent of the shares.

These funds turned the tide for Bank of America, and the eventual vote was not even close. Sixty-three percent of the shares voted supported the current arrangement.

The fury of the pension funds at the mutual funds was evident even before the outcome. In her column in The New York Times on Sept. 18, Gretchen Morgenson noted that the claim of mutual funds that they act in the best interests of their clients was questionable because "large mutual fund companies often have conflicts in their business models that are not visible," which lead them to support the companies' management.

It is clear that there is no party line in corporate governance. Instead, what we have is a corporate governance industry in which proposals are brought by many investors, each with their own interests.

Is a city or state comptroller bringing a proposal because he or she thinks it benefits the public pension fund - or a political career?

Similarly, Calpers and Calstrs each have robust governance teams. Are they about to say that corporate governance does not work and push themselves into unemployment?

The proxy advisory services, like I.S.S. and Glass Lewis, promote governance, making a profit on their services, and even law firms often make their own governance proposals.

The divisions in the corporate governance wars may make for a robust cottage industry, but they don't necessarily help shareholders.

Some shareholder proposals, like no self-dealing (officials should not put their own interests above the company's) may be undeniably beneficial, but others lack any evidence that they produce greater shareholder value.

Some investors appear simply to be caught up in the rush of exercising power. Shareholders are gleefully telling companies that ignored them for decades that they are now in charge.

Perhaps it is time to call a truce. In the wake of the Bank of America vote, the pension funds and mutual funds ought to hug it out and instead focus on what works in corporate governance for a particular company by creating value, instead of just advocating whatever the conventional wisdom of the moment says is good corporate governance.

It is a novel idea, but don't bet on it happening too soon. Instead, as shareholders become more powerful, expect the next wave of corporate governance battles between mutual and pension funds to be about who has the purer form of this witch's brew. Companies are caught in the middle.

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california public employees retirement system

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california state teachers' retirement system (calstrs)

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A Lack of Consensus on Corporate Governance

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That is the goal of corporate governance, after all, to make companies run better and produce shareholder wealth. (There may be other definitions, but that is a topic for another column.) Advocates of separating the two jobs say it will produce greater wealth because it will lead to better corporate oversight and a better-run company.

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This is a fun video excerpt from The Office (US) where Michael and Holly had to lead a conference meeting on business ethics and how they effect the lives of their employees. I think it's a fun interpretation of how we sometimes perceive ethics in business, and how little we might believe that ethics effects us as workers.

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This is a scholarly article that goes into a little bit of the history of business ethics, and how it has progressed from that point, and what we can expect in the future.

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The status of business ethics: Past and future

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Business ethics, which grew out of religion's interest in ethics in business and management education's concern with social issues, has become an interdisciplinary academic field. Thus far it has cent

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The reason I chose to include this photo is due to the lack of realism that we all have of management. This photo is what we all have probably thought management was like at some point in our lives, but in reality, a visualization like this is management propaganda and usually far from the true visualization that management takes

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This photo is how I visualize good management.

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This video goes into the creators perspective of what defines a leader vs. a manager. I think it's a good video that related well to module 1's introduction to the material

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This is an article that breaks down what the author believes is good management vs. bad management.

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5 min read

A Note From The Editor

Opinions expressed by Entrepreneur contributors are their own.
LinkedIn Influencer, Mark Graban, published this post originally on LinkedIn.
A key thing I've learned in my career and my own work experience:

"Bad managers tell employees what to do, good managers explain why they need to do it, but great managers involve people in decision making and improvement."

There might be more to management to that, but I think that's a pretty good start. " Lean management," or the Toyota management style, encourages leaders to live in that "good to great" range ( with apologies to Jim Collins).

Bad managers bark orders. They are directive and tell employees what to do, without any explanation or context. I saw that style of management quite often during my first two years at General Motors (read my previous post about that experience) and the workplace was incredibly dysfunctional as a result.

There are top-down, "command and control" managers in every type of workplace, unfortunately. Managers who are controlling and have all the answers want their employees to " check their brains at the door," and often say so quite explicitly - or they spread that message in more subtle ways.

At GM, front-line employees complained that they were "hired for their backs and their arms, not their brains." In hospitals, healthcare professionals (even those with master's degrees) have complained, "They just want us to do what we're told." This is not a recipe for quality, productivity, or good customer service.

A friend of mine lives in a high-rise condo building. One example of "telling" was the general manager telling employees that the doors to the resident gym must now be kept closed at all times. For years, previously, the doors had been left open unless a resident wanted privacy and chose to close them.

My friend asked one of the employees, "Why are the doors closed all of the time now?" The employee replied, "I don't know, [the manager] just told us to."
Related: Why Every Patient Deserves the Care & Caution that Surrounds the American Ebola Patients (LinkedIn)
It's disrespectful to just give directives without letting people understand the reason(s) why. There might have very well been a good reason why the doors were now to be kept closed. Had the manager taken just a few minutes to share a reason why, the employees would feel better about themselves and would more likely keep the doors closed. If employees are following directives out of a fear of being "written up," they aren't in a position to provide great service.

A good condo manager would explain why the doors now need to be closed. And, if there wasn't a good reason why, they wouldn't force the change on a whim.

A great condo manager would involve the employees in coming up with solutions to whatever problem is being solved by keeping the doors closed. The employees, when being posed with the problem, might come up with the idea of "close the doors" or they might come up with something better. Either way, they would feel a greater sense of ownership over the idea since they were involved in its creation.

During my time at GM, the better of the two plant managers I worked for taught us that Lean leaders (in the style of Toyota leaders) will always explain why something must be done, in those rare instances when they have to give a directive. The dynamic changes from "thou shalt wear safety gloves (because I'm the boss and I told you so)" to "you must wear safety gloves (because it's necessary for your safety and we don't want you to get hurt, even though you might think there is little risk)."

Bad managers tell. Good managers explain why.

Great managers go beyond this.

Great managers might engage the employees in figuring out how to reduce the safety risk that makes gloves necessary in the first place. Maybe an employee would suggest that a different, but equally effective, chemical be used. We don't know unless we engage our employees.

In 90% of workplace situations, I'd guess, the manager shouldn't be telling people what to do, even if they are making the effort to explain why. Great managers engage people in designing their work and they continue to engage them in ongoing improvement. As I learned from former Toyota employees and the books of Taiichi Ohno, work procedures " should not be forced down from above but rather set by the production workers themselves."
Related: The VA Scandal: Problems Caused by the System (Targets & Incentives), Not Bad Individuals (LinkedIn)
This mindset and approach requires that leaders set aside their egos and century-old habits. of top-down management. Managers won't have all of the answers. Instead of dictating how things get done (and expecting obedience and compliance), managers need to work together with employees to define how the work is done. Managers need to ask employees what ideas they have for improving the workplace, through the practice of " Kaizen."

Our employees are adults and they deserve our respect. They deserve great leaders who can work together to help everybody succeed and do what's best for their customers (or residents).

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What Bad Managers, Good Managers and Great Managers Do

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5 min read Opinions expressed by Entrepreneur contributors are their own. LinkedIn Influencer, Mark Graban, published this post originally on LinkedIn. A key thing I've learned in my career and my own work experience: "Bad managers tell employees what to do, good managers explain why they need to do it, but great managers involve people in decision making and improvement."