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Home » Opinion » Page 4

Opinion

Executive compensation: “at risk” should really be “at risk”

November 3, 2017

Quick read

I was involved in a discussion about Executive Compensation the other day.

We were discussing how a base salary covered meeting the budget sales and profitability targets.  Then bonus targets were set above the budget targets. 

The bonus would be awarded on a pro rata basis depending on how much progress had been made on meeting the bonus targets.

Get half way to meeting the bonus targets after reaching the budget targets, and the executive gets half the bonus. 

There was some doubt about the structure because the bonus targets couldn’t be reached with 100% certainty.

And that’s how it’s meant to be.

If achieving the bonus targets was 100% certain, then the budget targets have been set too low.

The idea of bonus targets is to create a “stretch” objective, which will require going the extra mile and thinking outside the box to achieve.

Bonus targets that are too easy to reach, mean that the bonus or “at risk” components of the compensation package are in fact components of the base salary package in disguise.

“At risk” components of an executive compensation package should really be “at risk.”

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Filed Under: Opinion Tagged With: Management, Remuneration

What’s gonna work? Team work!

October 16, 2017

7 minutes to read

When my children were young, they used to watch a TV programme called WonderPets.  This was their theme song.

Linny: “The phone, the phone is ringing!”
Ming-Ming: “The phone, we’ll be right there!”

Tuck: “The phone, the phone is ringing!”
Linny: “There’s an animal in trouble…”
Ming-Ming: “There’s an animal in trouble…”
Tuck: “There’s an animal in trouble somewhere!”

Tuck: “A baby [animal]
[In the specific peril.]”
Ming-Ming: “This is se-rious!”
Tuck: “We have to help him/her”
Linny: “Let’s save the [animal]!”

Linny: “Linny,”
Tuck: “Tuck,”
Ming-Ming: “And Ming-Ming, too!”
All: “We’re Wonder Pets and we’ll help you!”
Linny: “What’s gonna work?”
Tuck and Ming-Ming or All: “Teamwork!”
Linny: “What’s gonna work?”
Tuck and Ming-Ming or All: “Teamwork!”

All: “Wonder Pets! Wonder Pets! We’re on our way
To help a baby [animal] and save the day!”
Ming-Ming: “We’re not too big,”
Tuck: “And we’re not too tough,”
All: “But when we work together we’ve got the right stuff!
Go, Wonder Pets! Yay!”

(when they come back to the classroom)
All: “Wonder Pets! Wonder Pets! We found a way
To help the baby [animal] and save the day!”
Ming-Ming: “We’re not too big,”
Tuck: “And we’re not too tough,”
All: “But when we work together we’ve got the right stuff!
Go, Wonder Pets! Yay!”

Team work was a key focus in the 1990s and these days, the idea that teamwork can promote productivity and a positive work environment is axiomatic.

Yet I came across a five-member software development team other day, where some of the members had worked together for nearly ten years.

There was a discussion about how problems had been solved more quickly when they worked together.  There was a collective wish that it wasn’t such a rare event.  A conversation with their manager revealed that none ever had lunch together, or had anything together with one another outside of work.

It seemed incongruous to me that five grown men could sit within an open space within ten metres of each other without any partitions between them, could work without developing some soft of espirit de corps.

Nevertheless, it seemed that this team would not develop further without some form of managerial intervention.  The manager confided that he had, laudably. started stocking the refrigerator with alcohol and started ending the Friday work day a little earlier.

It’s a start.

Members of superior work teams can strongly agree with these statements:

My input is taken seriously when the team set priorities.
We make sure that members are properly acknowledged for their performance.
We treat every team member’s ideas as having potential value.

I’m quite clear about my team’s major goals.
Team members really let their personal feelings get in the way of getting the job done.
Our team members really work by the clock; they do what’s necessary to do the job right.

Our team members are typically optimistic that we can get the job done – regardless of the obstacles.
I never hear one team member criticising another team member to a third party.
When we do get into conflicts, we typically resolve the right way.

We never take credit for someone else’s work.
We pride ourselves on doing the job better than most people typically expect.
I derive a great deal of personal satisfaction from being a part of our team.

I’m very clear on how our team contributes to the total success of the organisation.
When a team member says he/she will do something you can always count on.
When team members don’t know something, it will always tell you they don’t and not act like they do.

When a team member doesn’t agree with another team member, he/she will let the other member know – regardless of the other member’s position or rank.
Our team members always get sensitive team business within the team.
When a team member gives the team bad news, we never “shoot the messenger.”
You can get a straight answer from anyone about anything you want to know.

How many of these statements can you agree with about your team or organisation? Few teams become superior teams without intention.  Leaders have to plan for it and nurture their teams.

 

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Filed Under: Opinion Tagged With: Teams, Values

Believe | Kan & Company

September 7, 2017

Dream, Believe, Create, Succeed goes the adage.

But sometimes, it doesn’t turn out that way.  Sometimes you’ve been going for a while and no one believes anymore.

Even you’re having some doubts.

What went wrong?

What we think is possible, what we end up doing, is often shaped by what we believe is possible, what we believe we are able to do.

If we don’t believe, then no matter what the circumstance, no matter what available resources, no matter what the people we have available to help, it won’t be done because we believe it can’t be done.

Our past is made up of our concrete experiences, things that have been taught to us and stuff that we have gleaned from observing others.

Our past shapes what we think is possible but we forget that our past is open to interpretation.  In fact, our interpretation may or may not reflect what truly happened.

Yet, without reflection, we believe that this past is the truth.

We plan for the future to achieve a result.  Our past tells us that the future is uncertain and the outcomes of our planned actions result in a spread of outcomes.  Even so, it may be a gulf between what we hope to achieve and what we believe is possible.

Sometimes what we need to do is to pause, reflect upon our past in order to see how it has shaped and limited our truth.

For example, I was once involved in the purchase of a power generation station. The annual retail value of the electricity was estimated at $90 million.  Based on a target rate of return alone, yes it was worth $45 million

In fact, the station eventually sold for $89 million.  Why?  The other buyer needed a natural hedge because of the large amount of forward fixed price contracts it already held.  If the spot market went against them, they stood to lose their shirts.

For them, paying $89 million was worth the financial security that it brought them.

Two different parties, with two different pasts, resulting in two quite different pricing decisions over the same asset.

How is your past limiting your views of what is possible in the future?

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Filed Under: Opinion

Sales doesn’t work in isolation… | Kan & Company

August 15, 2017

2 minutes to read

Sometimes when the sales pipeline is looking lean, the Sales team quite rightly comes under scrutiny.

Their lead generation methods, their pitches, feedback from prospects and their activity levels, among other things, will be reviewed.

While Sales is under the magnifying glass, its easy to fall into the trap of looking at it in isolation.

Sales doesn’t operate in isolation or a vacuum.  In fact, Sales works in conjunction with a number of other factors, such as brand awareness, reputation, and customer service experience.

I recently took part in a discussion about a new product launch. We were discussing the sales process of an OEM product to other technology firms.  During the discussion, he quite rightly pointed out that he was reliant on the technical team to develop manuals and specification documents that allowed potential customers to see how the new product would be integrated into their own systems, what software had been written that provided APIs for them to use and what after sales support would be available.

He’s going to be pushing it uphill if these things aren’t in place beforehand.

On another occasion, a business owner suggested to me that all he had to do was to add another sales person to his sales team.  After a short discussion, it became clear that the business had not developed an idea that captured the imagination of its market.  An idea that made it stand out from its competitors.  An idea that would form a theme for its sales pitches.  An idea around which all its marketing efforts could rally.

If Sales are flat lining, sure, scrutinize your sales operations to make sure your i’s are dotted and t’s are crossed but I suggest you also look at your key messages, your advertising, your website marketing, your case studies and customer experience processes.

Intrigued? Want to talk about it? Click the button and we’ll get back to you.

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Filed Under: Opinion Tagged With: Marketing, Sales, Strategy

You have to know right from wrong, up from down | Kan & Company

August 10, 2017

4 minutes to read

Many years ago, I had the pleasure of travelling through Africa for several months.

A continent that is resource rich and fertile.  Theoretically it should be prospering and even thriving.

But it isn’t.

After I returned, I had much time to reflect on the experience and decided the difference between New Zealand and Africa was what resided in our heads.

Over there, you couldn’t rely on the rule of law, and self (by that I mean personal) governance.  Corruption, laziness, and a lack of integrity were endemic.  Their moral compass had been skewed.

In recent times, I have witnessed first hand when business owners and managers have lost their moral compass.

If staff, suppliers and contractors can’t rely on their managers and owners to create a safe environment for them then a fundamental trust is broken.

Without trust, a key cornerstone of what makes a group of individuals into a successful team or organisation is lost.

Without trust, a sense of inclusion, commitment, loyalty and pride are all undermined.

A safe environment, is an environment where leaders can be relied upon to have a universal sense of what is right and wrong, what is good and evil.

Staff ought to be able to rely on their leaders to expect and enforce an environment where universal values are upheld.  When they aren’t the reputation and performance of the organisation and business, are respectively, damaged and impeded.

Values are often gradually eroded.  Few set out to become evil.  But one small thing gets added to another.  Years pass and things originally unacceptable have become part of the furniture.

Products being mislabelled as being a better quality than they actually are.  Inflated hours being billed that were never worked because “the customer thinks the amount is reasonable”, or mis-classifying personal expenses as business ones.  Some would say these are little things, but they mount up.

Because they creep up on us, its useful to take stock once in a while.  Are we honest?  Can we be described as being as pure as the driven snow?  Why not?  What message are we sending to one another if we tolerate it.  How much does this kind of thing hold us back?

Sometimes our moral compass can be so eroded that we’ve unknowingly lost objectivity.  When you take stock look for signs that things aren’t right.  Are there things we’d rather hide from customers, staff, our spouses or the authorities?  Do we say things like, what they don’t know won’t hurt them?

I believe even though we think we might be successful, there might be even more success if we could avoid the temptation to cut corners.  It’s never too late to change course.

Intrigued? Want to talk about it? Click the button and we’ll get back to you.

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Filed Under: Opinion Tagged With: Ethics, Strategy

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