Archives for category: Management

In this ongoing series we look at ways of preventing employee theft. In part one we looked a cash handling methods, in this part we take a look at best practices for preventing theft with Credit Cards.

When it comes to credit cards, preventing theft is not only about preventing theft from the business, but also preventing theft from customers. As with cash which we looked at in part one, the solution to preventing theft with credit cards is having the correct policies and procedures in place that conform to the basic idea of “Trust No One!”

cc1

Image courtesy of Pixabay

Credit Card Basics

Your credit card processor can bring you up to speed as to the best practices for running transactions, but what follows are some generally accepted procedures which should help protect any business.

Have cameras on your credit card machine / terminal(s) or at minimum keep them in an open area where multiple staff members can see them. Always use the chip option if possible when processing transactions. Try to avoid taking credit cards over the telephone. If you have to take cards over the phone, ensure that you are using all the security features; such as address verification and the CVC code on the back of the card. Try to always keep a customer’s credit card in sight of the customer. This is not always possible, but there is less chance of a customer’s credit card information being stolen if their card does not leave their sight.

Do not store credit card numbers, or photocopies of cards, unless you have an air tight system in place that is highly secure. Some of the biggest names in retailing have fallen fowl to having customer’s credit card numbers stolen from their systems. You should think very carefully before exposing your business to that kind of liability.

The ability to give a refund using your credit card terminal should always be protected by a pin or password. An employee giving a refund to themselves using their own credit card, if they are not very smart, or using a reloadable generic card is an easy way for an employee to steal if controls are lax. Members of the public are also not above trying to give themselves a refund if given the opportunity.

cc2

Image Courtesy of Pixabay

Batching

At the heart of preventing employee theft using credit cards is batching. A batch is a report of everything that has been run on that credit card machine since the last batch. Once the batch has been run all the transaction are removed from the machine. Credit card processors will set your terminal(s) to batch out automatically, usually in the middle of the night. A better system is to manually batch your terminals at the end of each shift.

Batching at the end of a shift draws a line as to which shift ran which transactions. At the end of the shift, the batch(s) should be matched to the daily report in the sales system. Please do not use the credit card transaction slips to match up to your sales system. Credit card slips are very important, particularly if there is a dispute with a client; however, slips can get lost either by accident or on purpose. With a batch you will be able to see how many transactions have been run, for how much, and what refunds have been run. As mentioned before, refunds are an easy way for an employee to steal from a company, so it is important to pay them particular mind. Matching batches to your sales system, should also catch unauthorized refunds.

Good practice, particularly if you only have a few credit card terminals, is to ensure that there are no gaps in batch numbers. For each credit card terminal, the batch number should increase by 1 every time a batch is run. A missing batch is almost certainly an indication that transactions have been run, on the missing batch, and one assumes that they have not been recorded in the sales system. If you are missing a batch and realize it, you can always request a copy from your credit card processor or ask them to read out what should be on the batch.

Recording data in your in-house sales system accurately is not only important from an accounting standpoint, but it makes things much easier when trying to match batch transactions to the sales records. Try not to record transactions as “credit card” but as “MasterCard, Visa, or Discover” etc. Also, try to impress upon employees that if a client is paying with multiple cards, even if they are both Visa cards, that they should really be recorded in the sales system as they are ran on the credit card terminal. For example; two visa card payments of $20 should not be recorded in the sales system as a credit card payment of $40, but as two visa payments of $20 by the same client.

Just as with cash, matching the batches to your sales system should be initially performed by a supervisor and the person who has been running the majority of the transactions. Every transaction must be accounted for one way or another. This, of course, can get complicated, particularly when dealing with multiple terminals; however, there really is no substitute for ensuring that all transactions have been recorded properly, and that there are no orphan transactions or transactions that were not actually made.

Of course, the matching of each shift’s credit card batches should also be double checked by a manager who has not taken part in running any credit card transactions, usually the following day.

It can sometimes seem pointless to track down small inconsistencies between what was recorded in the sales system and what was processed on the credit card terminal. However, with a business that runs hundreds of transactions, small amounts can add up quickly. Overcharging clients by $1.00 and then refunding that $1.00 to an employee’s own card can be hard to detect unless small errors and constantly, and consistently, tracked down and resolved.

cc4

Image Courtesy of Pixabay

Reconciliation

It should be noted that with some terminals it is easy to run a report, which prints a batch like list of all the transactions but does not batch out the credit card terminal. When this is done by mistake It is usually caught by the following shift as their batch will have all the previous shifts transactions as well as their own. This will be annoying, and make the matching of batches to sales system reports more difficult, but this is almost certainly just a mistake. More concerning is when a report is ran deliberately instead of a batch. In theory, this means that refunds could then be run on this credit card terminal after the report is ran, and then terminal could be batched out properly and the batch destroyed.

With the method outlined above, even keeping track of batch numbers one shift to the next does not protect the business. Of course, if batch numbers are not being kept track of then all an employee would have to do in order to steal is batch out the terminal, run whatever refunds they want to, and then re-run the batch.

For these reasons it is important, just as it is with cash, to reconcile the credit card transactions with statements from the credit card processor and with the monies deposited into the bank account of the business. This is usually the only way to be sure that there is not money being stolen via credit processing. Ideally, this reconciliation should be performed by someone who has not been involved in any of the previous steps.

cc3

Image Courtesy of Pixabay

Theft from Customers

If credit cards must be ran out of sight of customers, and in a private area, it is easy matter for a thief to write down credit card details, or take a picture of the front and back of card. It is not usual for victims of such schemes, which usually happen at restaurants, to find that additional charges have been ran of their card before they have even got home from the restaurant! The thief texted the card details to an accomplice. If they are not greedy, it can difficult trace where the credit card details were copied from.
When credit card transactions must be ran in less than ideal circumstances, consider banning your employees from carrying cell phones. It is not an ideal solution, but it does make things harder.

As mentioned before, keeping credit card details onsite is an enormous liability and should be avoided unless a 3rd party is prepared to accept the liability, such as a software developer. However, even then I would be wary of such systems.

Next week we are going to look at inventory thefts.

 

Advertisements

In this ongoing series we look at ways of preventing employee theft.  In this part we take a look at best practices for preventing theft when working with cash. In part two, we look at how to prevent Credit Card theft from the business and customers.

There is an old saying in management circles; if you have not found theft in your business you are not looking hard enough.

Most business thefts are crimes of opportunity. If you remove these opportunities, or make the likelihood of a thief being caught more certain, you can prevent most thefts. Don’t underestimate the value of deterrence! The way to remove these opportunities is to have systems in place that immediately indicate when there has been a problem.

Although all thefts are about money at some level, there can also be a certain amount of revenge and intellectual challenge. The disgruntled employee proving how clever they are by being able to “beat the system” and thereby the manager, or owner, they feel undervalued by is a common theme in workplace thefts.

dollars-426023_640

Image Courtesy  of Pixabay

Trust No One

A key concept in theft prevention is to not trust anyone – that includes the people that you trust. While that sounds like an oxymoron, it is actually an appropriate way to ensure that you do not place your team in a posted tells difficult situation. What that means is that the systems you put in place should never place too much trust in any one person and therefore there should be no suspicions about anyone, because there are never any situations where more than one person has access to cash. A system that embraces this model is not put in place because you do not trust the people that you work with, or who work for you. They are put in place so that you do not have to be put in the position of having to distrust them.

It should go without saying, that there must be a system in place for recording inventory and services sold and paid for by clients. Even if you are selling penny candies by the lb. there needs to be a system in place to know how many lbs. have been sold by the end of the day, or shift, and how much money has been brought in. This most basic of elements is what all other elements of a theft protection system stem from. This system must also be capable of issuing a receipt to the customer showing what they bought, how much they paid, and what change, if any change, was given back.

Video cameras which record, and are secure, should always observe all transactions. The quality of cameras is such now that individual bills can be counted, and identified, significantly simplifying the job of finding errors or theft. It should be noted that cameras can also be used to exonerate employees and therefore should be seen as a win-win for both employer and employee.

If a theft is uncovered then the employee concerned must be terminated. It is generally up to the manager, or an owner, of a business whether to prosecute. I generally advise to go ahead and prosecute as long as there is evidence and not just a strong suspicion as it sends a message to other employees. If procedures where not followed, and there is a suspicion that a theft may have taken place, then at minimum disciplinary action should be taken, depending on the employee and whether this a repeat offense should indicate whether this action should be termination.

It is important to keep in mind that the discovery of an issue or potential issue should be seen as the first sign of a much bigger problem. This will not be the first theft, but only the first theft that you have discovered.

cash-register-1885558_640

Image Courtesy of Pixabay

Cash

When cash handling is involved in the daily operations of a business, then there should be a dedicated cashier per shift. If the requirements of the business are such that multiple people handle cash, then each cashier should have their own cash drawer. The cashier should count their cash drawer that the start of their shift. A standard and set amount cash should in the drawer each day. I should clarify that only a cashier has access to the cash drawer. Other members of staff may receive a cash payment from a customer, but only the cashier should process the payment and issue the client’s change. In an ideal world, the cashier would be the only one to be involved in all cash transactions, but that is not always possible.

At the end of the casher’s shift the cash drawer needs to be counted and the cash taken in should match the transactions recorded in your sales system, leaving the starting amount of cash that the drawer for the following shift / day. The cashier can be involved with the balancing of their drawer; however, a supervisor, or manager, should also be involved.

If the cash drawer is over then most likely a transaction has not been processed correctly: services / inventory was given to the customer, but the transaction was not recorded in the sales system. It should also be noted that the client would also not have received a receipt. High cash volume businesses, such as fast food restaurants, often enlist the help of customers to ensure they receive a correct receipt by offering a reward, such as the meal for no charge. This is to ensure that transactions are recorded in the sales system.

There are two explanations for cash being over. A genuine mistake in the processing of the transaction was made, or a potential theft has been interrupted. Hopefully a partially completed transaction will be able to be traced down through your sales system and the mystery resolved. However, it is important to be on the lookout for employees telling customers that the printer is broken, and therefore they cannot have a receipt, or unconcluded invoices being printed as receipts. These are indications of a theft taking place – the employee places the cash in their pocket and the transaction not processed at all, or only partially processed. An ongoing search for partially completed transactions should be part of a general auditing process.

Cash being under is, again, either a mistake with the transaction (unlikely – particularly if it is a large amount) or just straight theft. If the integrity of the cash drawer has been maintained throughout the shift, then the cashier is responsible. This could be cause for disciplinary action up to, and including, termination. I am not in favor of making cashiers pay back drawer shortages. If the cashier is stealing, they are just giving the business back the money they stole, and everyone thinks that is the end of the matter. If the cashier did not steal they are being penalized for a system problem.

If cash drawers are routinely under, but by amounts that could be human error, and the cashier(s) themselves seem just as frustrated by the problems as you, then a potential solution is the put each cash amount received into a sealed envelope and then into the cash drawer. This allows for the balancing of the individual transactions against the sales processing system. The down side to sealing the cash from each transaction, other that the quantity of envelopes used each shift, is that is significantly increases the amount of cash in the drawer that is required as all change has to come from this “float” and therefore a larger amount of cash may be required. This carries its own risk and the total volume on cash on the premises is higher than it might otherwise be. But it might be the only solution to constant shortages. It should be noted that I have never needed to employ this strategy for any length of time. The theft was either uncovered or the errors stopped when an employee unexpectedly left; one assumes because of the additional scrutiny.

 

savings-2789112_640

Image Courtesy of Pixabay

 

There are additional red flags to watch out for. Cashiers, who use their own pockets for “storing change because we are busy” should be treated with suspicion. This is the mishandling of cash and should lead to at minimum an explanation of why this is a problem with additional disciplinary action and increased scrutiny. Clients who complain about not receiving the right change, that their receipt / invoice is wrong, or that don’t understand why they owe money when they are sure they paid their bill during their last visit are all red flags of theft. Usually in these instances the employee concerned, if you can track them down will not be able to explain what happened. Of course, customers can make mistakes too, but in my experience these are easy to find and show to the customer why they are mistaken.

Once the day’s cash is counted, is found to be correct, and the cashiers drawer has the correct float, the cash should be sealed, with a deposit slip, and secured; ideally in a safe.

A senior manager, not one that helped settle the cashier’s drawer, should then double check the settlement, usually the next day, with the sales system. It is important that a copy of the deposit slip that actually goes to the bank is kept on site. The senior manager, or a 3rd party, should then deposit the cash at the bank and the deposit receipt should be matched to the deposit slip. These, of course should also match the sales system and ultimately the amount recorded on the bank statement.

Next week we look at Credit Cards!

The following is a short talk I delivered at the Uncharted Veterinary Conference in April 2018 as part of their Mic Drop Series.

How valuable is experience when it comes to leadership?

Should we value experience?

Is it a benefit or a hindrance?

So let’s define some terminology…

A leader is someone who is followed.

A visionary is someone with an idea or ideas.

And a manager is someone who makes things happen.

All of these can be combined, or not, depending on a persons personality, experience, or skill set.

Some examples of Visionary leaders…

Steve Job of Apple,

Elon Musk of Tesla and Space X,

Jeff Bezos of Amazon.

Visionaries who have, literally, changed the world.

they are all looked up to and considered gods of technology. People regularly compete to work for these people and to work on those products.

They also all have the reputation for being awful managers of people to the point of cruelty.

If Visionary leaders are horrible managers then what about managers who have vision?

Tony Blair – former British Prime Minister,

Michael Eisner – Former CEO and President of the Walt Disney “Company,

George Lucas – Film Director and former owner of Lucasfilm.

Tony Blair was elected in 1997 on a wave of hope and goodwill, he transformed his labor party in “New Labor” which had been out of power for 18 years. Despite some major successes, Blair resigned in 2007 and labor lost the next election and has not been in power since. New Labor is in ashes and Blair is widely reviled in the UK, and even by those in his own party, for his tone deaf approach to the Iraq war and for his corporate connections.

Michael Eisner led the Walt Disney Company from 1984 and 2005. He revitalized the company in the eighties and nineties with “Who Framed Roger Rabbit,” “The Little Mermaid, “The Lion King,” the expansion of the theme park business, cruise ships, and the creation of stage shows. He ultimately split with his long time collaborator Jeffery Katzenberg and Roy Disney and saw an unprecedented shareholder revolt in 2004 that lead to his resignation in 2005.

George Lucas – transformed the movie industry with the original Star Wars trilogy. Arguably then did more than anyone else to sink it with his widely panned prequel trilogy. He is criticized for having a singular vision and for not listening to the feedback of others.

If visionary leaders are horrible managers and managers with vision ultimately self destruct,what about managers who just manage?

Bob Iger – Current President and CEO of the Walt Disney Company,

Bill Gates – Former CEO and President of Microsoft,

Tim Cook – Current CEO of Apple.

When was the last great breakout product from any of these companies, who are led by these managers, that was not bought it?

These companies are profitable, they make good products, just not great ones.

Why do some mangers, particularly those with vision fail, when managers without vision can succeed?

How come some visionary leaders can break all the rules and still win?

This is my story.

The period of time I’m taking about I’d been in my job for about 4 years.

I knew the answers to all the questions I was asked.

I’d tried most of what is suggested by others and had strong opinions about those suggestions.

The ghosts of what had happened in the past in the workplace haunted my current interactions.

I anticipated the responses of others and therefore do not even try to have new interactions.

I overvalued my own experience.

I believed my own story, my own press.

The things that made me a good manager – a manger with vision, a leader, I now actively rejected since I had the experience to no longer need them.

And the staff, and the people I worked with, pushed back.

I became the bad guy.
I became the roadblock.
I became the one who would not listen.
I became less and less effective.
I became the manger who kept his own counsel on everything.
I was the most capable – but I was he least able.

Some call this burnout.

I call it not learning from the experience of others.

The first step in recovery is to acknowledge that there is a problem.

Interestingly during this time I, the experienced world traveler, for the first time in my life, missed four flights because I knew, knew, when my flights were and that I didn’t need to double check.

Solving this problem is not hard, you’ve, I’ve already been that person. You just need to find them again and be aware of the trap that you are currently trying to climbing out of.

The tools that made you a good manager, a great leader, when you started are the same tools that allow you to continue being so. You just have to remember that the process can be as important as result.

Capability only has value if you have the ability to use it.

Capability only has value if you have the ability to use it.

And it is those around you, those that you lead, that give you that ability. You undervalue it at your peril.

Thank you.


Any book about Elon Musk stands the chance of being wildly out of date before it hits book store shelves. 

This biography of Musk, by Ashlee Vance, originally published in 2015, already feels a little dated, but it does give a good profile of the man, his companies, and his roots. It is unfortunate then, that while acknowledging Musk’s propensity to be difficult, if not impossible, to work for it does nothing to mitigate the awe that the writer obviously feels for his subject. 

There is good reason for this. 

Musk is a larger than life character who if at a press conference announced; “l’m Ironman,” nobody would bat an eye lid. In fact it is hard to know whether the movie version of Tony Stark is based on Elon Musk or if it is the other way round. 
There is a lack of focus in this book on how appallingly Musk can treat other people. For example, he has been married 3 times, twice to the same woman, and he famously fired his long time assistant, and gate keeper, because she asked to be paid like an executive.  

What shines through, however, is vision. And that leads to an interesting question for Musk and for businesses in general: Can a dramatic and outsized vision, if you are good enough at selling it, make up for short comings in other areas such as management of people, sound business planning, and realistic expectations? 

For the moment, Musk seems to be on a roll; however, there are plenty that feel he has built a house of cards and from the stories told of the early days of Tesla are anything to go by, and the economists and manufacturers in Detroit are correct, it certainly could all come tumbling down any day. 

I also wonder how sustainable a company is when it relies on these most grandiose of goals? What happens when the company cannot achieve these goals? 

Elon Musk is undoubtably a unique individual, who has remarkable ambitions and achievements; but companies are built on a scalabile culture – not just vision. Mr. Vance’s book does a good job of profiling the vision, but not so much on the foundations and structures for sustainable businesses.   

founder
I have been reviewing books for a number of years now; however, movies have always been my passion and on occasion I have used movies in staff meetings for the accessibility of the message, and for more personal management lessons. I decided that it was time to share some of these. Please note that this review does contain spoilers for the movie and is more of a reference for interesting scenes and themes.

The Founder is the true story of The McDonald Brothers, who created the first McDonald’s Burger Restaurant, and Ray Croc who saw the potential in what the McDonald Brothers had created and turned it into the franchise and behemoth that we know today. Starring Michael Keaton, as Ray Croc, The Founder is certainly a cautionary tail about choosing your business partners, but it is also a story about realizing potential, and understanding your business and your customers.

The movie starts by following Ray Croc as an ice cream mixer sales man to bad drive in restaurants. While it is obvious that he is an archetypal slimy sales man, the patter he uses is surprisingly modern and essentially comes down to “build it and they will come.”
When he comes across the McDonald Brothers’ restaurant, it is different from any that the traveling salesman has come across in the past: Bulk sales of three items, no plates or utensils, and the food is received in 30 seconds rather than 30 minutes.

While the story of how the brothers reached this point is interesting on many levels, the 20-minute mark is of particular note. The McDonald Brothers take their staff to a tennis court, lay out their new kitchen design in chalk, and have the staff act out the “speedy system” that will allow them to make burgers like nobody else. What is most interesting about this sequence is the McDonald Brothers attention to detail and choreography of how their staff moves. They recognize that they are creating a system and that it has to be right or it will not work at all – even if that mean them redesigning the kitchen multiple times.

At the 50-minute mark the discussion of franchising, and the potential for a drop in standards, is examined in detail. This in turn leads to the realization that franchise owners should be sales people who are wholly vested in the venture, and looking for an opportunity, rather than just investors looking to make money anyway they can. Again, this plays into a central theme of the movie – chose who you go into business with wisely.

One hour and 18 minutes marks the real revelation of the McDonald’s story. That the McDonald’s franchise is not in the burger business at all, but actually in the real-estate business. Rent provides steady revenue and it is capital that fuels expansion.
Things start to go seriously wrong for the McDonald Brothers at the one hour and 29-minute mark with the breaking of their contract with Ray Croc and how Ray Croc sees business. A significant take away from the movie is that the McDonald Brothers and the Ray Croc have fundamentally different views on business, what a business should be to the community, and how a business person behaves.

It is certainly a cautionary tale.

While it would be a mistake to paint Ray Croc as a mustache twirling villain, his ethical standards are dubious at best. Re-watching the movie, with the benefit of knowing what happens, it is interesting to note all the places where the McDonald Brothers treat Ray Croc less as a partner and more as an employee. They frustrate his attempts to monetize the franchise, and are unbending in their standards even if that creates a significant impediment to the creation of a viable business. One can certainly see the position that Ray Croc finds himself in, and while his solution is mean and dishonest, it is not one of his making. Unlike most business stories where the good guy visionary’s do battle against the dark hearted managers, “The Founder” is more a tale of restrictive managers with a good idea and a visionary with dubious morals.

A thoughtful viewing of “The Founder” should provide pause for anyone going into a partnership, and it should also serve as a cautionary tale of the value of communication in a business, the miracle of systems, and the power of vision.

pexels-photo-434163

To the casual observer, the world of online reviews has never been healthier.

We are constantly asked to leave reviews, or check-in, and the worst excesses of Yelp and the businesses that try to control posts, seem to have been brought under control.
However, all is not well in the world of online reviews, if it ever was.

The story of the gentleman who created a fake restaurant and got it to become the Top-Rated restaurant on TripAdvisor really should have us never trusting a review site ever again. The story is extraordinary in many ways. That the gentleman concerned made a living writing fake reviews for restaurants, and then was able to manipulate the system to such an extent that a non-existent restaurant, that nobody could find (and they tried), are just two. That the whole thing went on to become such a phenomenon that he effectively had no choice but to create the restaurant to service the demand, is just the icing on the cake.

Yelp, that boogie man to most small businesses, are increasingly cracking down on those who request reviews. Always against Yelp’s terms of service, the practice of asking for reviews is considered best practice by most marketing professionals with the occasional caveat for Yelp. One look at the unregulated, and widely gamed world of Google Local reviews, where a significant proportion of reviews seem to be highly suspicious, and that lack even the admittedly flawed tools that Yelp uses to protect their review ecosystem, should give one pause. The wild west of Google’s review space is so out of control that businesses that do not game the system are at a distinct disadvantage.

It is actually to Yelp’s credit that they do care about their review ecosystem. It is easier to report a Yelp review that a business has issues with, than with any other platform. Yelp also takes seriously the practice of Yelp Bombing and the Weaponizing of Reviews;

particularly when it comes to a business in the news. However, far too many customers use Yelp as a threat, or even as downright extortion, on a daily basis. Even with Yelp’s reporting tools, the rules are still so arcane and at times they can seem downright arbitrary.

To add to the bad news in the reviews world we have to add the knots that both Glassdoor and Indeed are tying themselves up in by trying to have their cake and eat it. Glassdoor, which created a space for employees to share salary, benefits, and culture reviews about their former, and current employers reads more like a platform for griping from former employees unless your company is of sufficient size to generate more than just a handful of reviews. In order to monetize their site, Glassdoor are now encouraging employers to advertise on their platform with limited success. Why would an employer help pay for a site that essentially tries to undermine the narrative that an employer tries to portray to new hires?

Indeed, the highly successful job board that bases its pricing model on an adwords like format, now want to try and imbed employee reviews about the companies posting jobs. Effectively Glassdoor is trying to become Indeed, and Indeed is trying to become more like Glassdoor. What both companies are only now coming to realize that businesses are generally not fans of an unregulated review space, which all too quickly devolves into a method for revenge for former employees who feel wronged. Which in turn means employers can feel they have no option but to try and game these sites themselves. Plenty of new employee orientation sessions now include a “write a review” segment.

So, the review world is a mess. How to fix it?

In a twist worthy of one of its own plot lines, the dystopian science fiction anthology show “Black Mirror,” currently on Netflix, potentially shows a way out of the quagmire of everyone trying to manipulate the review space to their own ends. Titled “Nosedive,” the Black Mirror episode is set in the near future where everyone is concerned about their social media profile, which affects everything from their job to where they can live, and follows a young lady trying to leverage a wedding invitation to increase her social standing. However, things do not go as planned.

What is interesting about the episode is the idea of a single social profile that has, for want of a better word, a points system based on karma. Be nice to gas station attendant and your karma goes up. Be a jerk and it goes down. Of course, things work both ways, but it does highlight the problem with the review space as it currently stands. With the possible exception of Facebook, the vast majority review sites do not require, and sometimes do not even allow, real names. None of the review platforms allow for business to review customers, and while on Yelp and Google, one can see what their history of reviewing is like, there are no consequences for constantly leaving bad reviews, or trying to blackmail a business.

Lyft and Uber do have a review platform that works both ways, between customer and driver, however this is less of an open system than just a general ranking. It is a step in the right direction though and one that the more traditional review sites could learn from.

Facebook is probably in the best place to implement a customer ranking, or even a review ranking system. Facebook is become ubiquitous in so many areas. For those who have read Ernest Cline’s superb “Ready Player One” will recognize that Facebook is essentially placing itself as an equivalent of “The Oasis:” a portal on an online virtual reality environment where people work, learn, and play.

There was a time when if a customer had a problem they would complain to what was essentially an independent body, who would help to try and come up with a compromise to customer service issues and arbiter disputes. The Better Business Bureau (BBB) did not fair well in the internet age and is now pretty irrelevant with most customers now turning to Yelp or Google.

Businesses are mostly at fault for not doing a better job of embracing the BBB, however, with the swing firmly going in the other direction now, and the space being corrupted out of all reason and sense by both businesses and customers, things have to change if reviews are to be of any relevance or even any use.

The days of the BBB do seem rather quaint, but maybe their model was right after all. I look forward to a level playing field with or with out a referee.

And remember to leave me a review!

creativity inc

 

When I review books, I do so because they interest me, or occasionally I review books because I am following a theme.

I’ve had an interest, the way one has an interest in a train crash, with Disney for many years. This was solidified by reading James B. Steward’s excellent “Disney War” which details the infighting and board room drama of the Michael Eisner years at Disney. With Pixar’s Co-founder John Lasseter recent taking of a six-month sabbatical, from Pixar and Disney Animation, for unspecified “missteps,” reading about Pixar’s culture and management with the benefits of hindsight sounded extremely interesting.

What I did not expect was a candid and practical guide to managing creative people, and the creative process, from an obviously highly talented manager and successful business man. This is also one of the best general management books I have read in years.

Mr. Catmull, with the help of Amy Wallace, have written an extraordinary management book that is honest, practical, and one that does not gloss over mistakes while still celebrating their company’s culture. What could have been just a retelling of Pixar’s, undoubtedly interesting, and dramatic, history instead is a retelling of that history with a guide to the lessons learned and the mistakes made.

Books about the history of companies are often written by, or in conjunction with, the visionary leaders who have fantastic ideas and make great leaps of intuition. “Creativity Inc., however, is written by a working manager: Mr. Catmull. While visionary in his conception of wanting to make the first 3D computer animated movie, his role at Pixar, and later Disney Animation, has been one of the manager who makes things happen, assembles the people, and allows his people to be as creative as possible. He is not afraid to place caveats on things such as employee engagement and feedback, while at the same time obviously taking these subjects extremely seriously.

While the concepts in the book are legion, and makes the book well worth a second reading, Mr. Catmull’s belief that failure is not only to be tolerated but actively encouraged stands out. While many in management circles treat failure as a necessary evil, Mr. Catmull makes a convincing case that failure is not evil at all but an important and necessary part of the creative process. Coupled with this belief in failure, is that while “honesty” has many moral connotations, an insistence on “candor” when giving feedback, from any source, is central to preserving a creative culture.

Getting people to work together, being honest about the short comings of the processes, and considering culture as a constant and evolving thing makes “Creativity, Inc.” a different type of management book. The fact that almost everyone knows about Pixar, and hold the movies they make in high regard, makes this a very accessible book. It also manages to avoid the saccharine quality of a lot of management books that intersect with the world of Disney (Lee Cockerell’s “Creating Magic” in particular comes to mind.)

For those who have become a bit jaded by management books, “Creativity, Inc.” is for you. This is an honest, dare I say candid, tale that teaches us that all businesses should be creative and that unleashing the creative power of our employees, or at least to stop stifling it, is probably one of the best things we can do as managers for our business and our employees.

One of my most popular blog posts is “The Cost of Servant Leadership” which I published in 2012. Due to some renewed interested, I thought it would make a nice first choice as the core content for my first experiment into animation. I hope you enjoy!

If you would like to read the original post, The Cost of Servant Leadership, you can find it here.

homo deus

“Homo Deus: A Brief History of Tomorrow” is the follow up to the internationally acclaimed bestseller “Sapiens.” Both books are remarkable and well worth reading if you want to have a better understanding of our species: where it came from and, perhaps, where it is going.

However, it is Homo Deus, which I think is particularly useful from a management and leadership perspective for its insights into how people made decisions and why. It is also interesting to have a book focus on why small groups of people (under 150 is the magic number) behave so differently from larger groups – even when it is against their own interest. The section that covers the Ultimatum Game, and how this changed the world of behavioral economics is particularly illuminating.

Where the book really comes into its own is when it comes to discussing the myths and fictions that define out world. The stories we tell each other in other words.
“As long as all Sapiens living in a particular locality believe in the same stories, they all follow the same rules, making it easy to predict the behavior of strangers and to organize mass-cooperation networks.”

The fictions we tell each other (laws, money, countries, economic theories, sports, companies, brands, etc.) allow our world of free thinking humans to work and communicate even when we have no personal relationship. We have a relationship with the company or brand because of the story we have been told and we believe. This also holds true for those who work inside the company.

“Fictions enable up to cooperate better. The price we pay is that these same fictions also determine the goals of our cooperation.” In other words, a company’s mission statement may be about how it’s first priorities are customers service and low prices, and it may have data to back that up, but is that really the yardstick it should be measured? What about the people who believe in the fiction?

By exposing the way humans work together, Harari builds a case for what is to come for Homo Sapiens. To us, now, it seems frightening and dystopian and as the author freely admits, will probably be nothing like he has described. But by giving us a glimpse into why our world of communication works the way it does, he gives us pointers to why might influence us in the future where the network becomes all important.

This is an extraordinary book about people. It is long, but it has a friendly conversational tone for a book that is essentially about scientific theory. While the book deals extensively with religions, and religious though, it might make difficult reading for those who are not used to looking at these matters from a scientific point of view. However, it does make a strong case for how religion and science need each other.

Homo Deus should, along with its predecessor “Sapiens,” be required reading for anyone who works with groups of people, but it should probably just be required reading for everyone.

 

lego-1698657_640
(image courtesy of https://pixabay.com )

I’ve written a lot about Yelp.

Why I think Yelp’s business model is flawed, how I’ve pretty much come to terms with Yelp on a daily basis, and how to defend yourself from Yelp Bombing when things really go wrong. However, there is a new review demon out there, and they are making all the same mistakes as Yelp and the other review sites, but unfortunately, they also are adding a raft of new ones. This is the rise of the job boards allowing for reviews of employers from “in theory” former employees.

Indeed.com, and Glassdoor.com, are the two that have recently come to my attention, but I am sure there are other sites going down this road and it is such a flawed idea that it is actually quite amazing that it got past the development stage.

Glassdoor, is a site whose purpose is attract reviews of employers by former or current employees. They actually do a reasonable job of allowing a platform for employers to promote what they do, the benefits they offer, and the company culture. Glassdoor also state that they perform checks to ensure that reviews are genuinely from employees, have a flagging system for reviews with issues, and also have a platform for companies to respond. Glassdoor also offers companies the opportunity to place job ads through their system as a source of revenue – if not the only the only one.

Indeed.com has followed a slightly different path. They have an extremely successful job posting board, with fantastic SEO properties at a reasonable cost. I’ve used Indeed.com for years. However, Indeed.com now offers users of their site to review employers.
So, what is the problem with job sites allowing for the reviewing of employers?

Let’s, for a moment, think about those who go to job board sites on their free time. By definition, those people are either out of work or looking for work so they can leave their existing job. There is absolutely no reason for a happy and content employee to visit one of these sites. This is in stark contrast to Yelp and other consumer view sites. People tend to have just one job, but everyone uses multiple businesses every day. Therefore, the majority of people in a position to review on a jobs site are those who have either chosen to leave, or who have been terminated from a job. The number of terminated employees who have warm feelings towards their former employer, regardless of the right or wrong of their termination, are pretty minimal. There is a reason that it is against Yelp’s terms of service for former employees to review a business they used to be employed by.
Reviews are anonymous. It’s hard to respond to a review that states “I was wrongly terminated” other than with the most generic of responses when you have no idea who the employee might be.

In addition, most HR departments and employers decline to give any kind of review about an employee’s employment due to the legal consequences of doing so. It’s hard to see these kind of reviews as anything other than an attempt to entrap an employer. Much like Yelp and the other online review sites, the sample volume is pitiful – only more so. If an employer has 200 employees, but only three reviews, how is that in anyway a representative sampling.

Finally, employers are the ones being asked to pay for this system. What is in it for employers? Sure, great reviews might help attract new talent, but not in a system that seems geared towards creating bad reviews. Indeed.com, for example, at the time of this writing has no flagging system for bad reviews and no way of communicating about a review other than sending an email to Indeed.com’s main customer service department. Indeed.com’s reps, much like Yelp.com’s reps, state there is nothing they can do about a product they are asking employers to pay for.

Now gaming this system would be a pretty straight forward process. These sites are actually asking for employees (current and past) to review their employer and unscrupulous employers can bring pressure to bear on employees, whether perceived or actual. But then what is the point? If the sites want genuine reviews, this is not how you go about getting them – it might not even be possible. There is a reason why LinkedIn, for all its faults, has never gone down this road other than with personal endorsements. You can read a lot into a lack of endorsements on LinkedIn.

Because of the legal climate, former employees get little in the way of references from the majority of employers. It could be that if both employers and employees genuinely want an open review ecosystem then that could be possible. But that would mean that employers would have to be free to review former employees. That is not going to happen any time soon and I’m not sure anyone wants to see what kind of bloodbath that would cause.

Company reviews from jobsites, as they currently stand, are untrustworthy at best, and perhaps a platform for dishonesty and disingenuous communication. They should be treated with scorn by both employers, who are being asked to pay for them, and jobseekers to whom they do a disservice.

%d bloggers like this: