Monday, December 16, 2013

Incentives to Keep Key Managers

There is a key role for incentives in managing and retaining key executives for the company. Here are some reasons for and examples of how to structure effective incentive programs for management.

1. You want to retain key management personnel for a number of reasons. High turnover destabilizes the company and can have severe effects on moral of employees and the bottom line.
2. You want to retain high performing managers to enhance your own company’s growth potential. Keep key managers from moving to competition.
3. Good managers don’t expect a bonus without achievement but don’t set the bar so high as to be unachievable. That becomes a disincentive to achieve.
4. Set goals that help improve your bottom line; achieving new sales records is not a priority if the costs exceed the benefit. Sales executives should be just as concerned about profitable sales as the CFO.
5. Pay executives for overachieving by sharing profits. As profits goals are exceeded rewards can continue to be major incentives if shared fairly. Reward contribution.
6. Be competitive but unique and allow key employees to participate in goal setting. When they are part of setting the goals they are more likely to increase efforts to reach the bar.
7. Conduct periodic reviews to ensure all incentive participants know where they stand. Let’s not have surprise results announced at year end….good or bad.
8. Be completely transparent. If goals are profit based show actual revenue/profit results so that there is a clear understanding of achievements.
9. Roll plans forward and allow incremental bonuses for achievements in consecutive years. That’s a great way to keep a key person from leaving; that extra bonus for additional achievement may be too juicy to walk away from.
10. Stock options are often used as a tool for key employee retention. The chance to be a part of ownership can be major motivator. However recent issues in corporate governance have tended to dilute and weaken some incentives. Try to strive for balance without risking responsibilities to shareholders.

Incentives are important tool to maintain a motivated and dedicated management team and a well-designed plan can bear fruit over the long term.

Those are a few on my thoughts. Let me know what you think.

Monday, December 9, 2013

Are you a Successful Leader?

Leadership is learned behavior that becomes stronger over time. The process of making decisions comes from an accumulations of experience. The most successful leaders are instinctual decision makers who are more tolerant of pressures associated with decision making and leading the business.

Here are a few traits of successful leaders:

1. Allow subordinates the opportunity to speak freely.
Leaders sometimes intimidate colleagues and subordinates with their position and power when they enter a room. Successful leaders deflect attention away from themselves and encourage others to voice their opinion. They are always approachable.

2. Make Decisions
Successful leaders are expert decision makers. The facilitate dialogue and empower colleagues to reach decisions. They “make things happen”

3. Communicate Expectations
Successful leaders are great communicators particularly with respect to performance expectations. They clearly communicate organization core values and mission statements so that objectives are properly executed.

4. Measure and reward Performance
Great leaders have a strong pulse on the business and on those individuals who lead with strong performance. Successful leaders never take consistent performers for granted and always reward performance appropriately.

5. Use talent effectively.
Successful leaders know their talent pool and how to use it. They facilitate growth in individuals and deploy their skills to maximize their contribution to the business.

6. Avoid Procrastination
Successful leaders tackle issues head-on and know how to get to the core of the issue. They don’t procrastinate and move quickly to solve problems or empower colleagues to make decisions.

There are a few examples of traits successful leaders demonstrate; there are many more. I hope as business leaders your colleagues see these traits in your leadership.

Monday, December 2, 2013

Know your Competitive Advantage?

It is important in building your business to understand your strengths and where you can increase your competitive advantage and produce better results.

What gives you a competitive advantage?
It is your ability to bring together every attribute of your business, to work seamlessly to deliver a standard of excellence your competitors cannot achieve.

How can I assess my organization's competitive advantage?
Check your pulse by asking yourself key questions about your products vs competition; your market share, ability to attract key contracts and customers.

Are you ahead of or lagging competition?
If ahead, you want to maintain that gap and if lagging you want to close the difference in performance. One major way to improve and stand out is to ensure your key brands or services offer unique attributes that competition cannot offer.

Strategically it may be time to invest in a positioning review. A great source to help you through this process is Ed Roach, The Branding Expert. I highly recommend his service.

Contact Ed at:

Ed Roach