February, 2009

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Article Index

The 100 Best Business Books of All Time*
Article by: John Hehre
How long would it take you to read one hundred business books? And, given the fact that there are more than 10,000 business books published each year, how would you know which ones were worth reading?
Surviving (and thriving) during challenging economic times
Article by: Tom Burger
Several days ago I received an e-mail from a long-time friend that let me know his company was going through another reduction in their work force - 10% of their employees. This was just two months after the organization had laid off 20% of their work force.
Executive Perspective on Current Challenges
Article by: David Hartwell
There is no doubt that we are facing challenging times. The economy is soft and this is causing significant difficulty in many quarters, but I believe that there are two things that we may be overlooking.
MN Economic Report
Article by: Dr. Ernest Goss
For the month of February 2009, reported March 2, 2009. For a seventh straight month, Minnesota's Business Conditions Index fell below growth neutral.
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The 100 Best Business Books of All Time*
How long would it take you to read one hundred business books? And, given the fact that there are more than 10,000 business books published each year, how would you know which ones were worth reading?

As useful as this column might be, at six reviews a year it would take almost 17 years to cover 100 books. The 100 Best Business Books of All Time provides a set of reviews that will quickly identify a book on a particular business topic and give you enough information for you to decide to read it or not.

The book is very user friendly, divided into twelve distinct categories: You (personal development), Leadership, Strategy, Sales and Marketing, Rules and Scorekeeping, Management, Biographies (books about famous business people), Entrepreneurship, Narratives (stories of actual businesses from Enron to McDonald's), Innovation and Creativity, Big Ideas (understanding insights that will likely change the future), and Takeaways (books containing ideas you can use immediately). Each of these categories covers about 7 to 10 books.

There is an overview of each book listed along with a summary of the key points contained. The authors are good at explaining why the book made the list and also explaining why related books didn't. Their criteria are straightforward. First, they should provide new or enduring ideas that can make a business better. Second, the idea should be applicable to businesses today. There are clearly books that had quite an influence over past business practices that are no longer relevant or even acceptable today. Finally, the book should be easy to read and understand. There are quite a few books that fit the first two criteria but are dense and academic.

In addition to the coverage of the books themselves, the authors have inserted comments, or sidebars, in each section to provide further insight into the books chosen and additional areas to explore. Many of the books could have been placed in other sections, and these sidebars do a nice job of connecting them together.

The mini reviews are not substitutes for reading the books themselves; the synopsis will provide enough of an overview to decide if you want to read it or not. Furthermore, there are only a few books that address manufacturing directly (The Toyota Production System and Deming's Out of the Crisis, for example) but for general business books it covers the essentials quite well. It does seem a bit like cheating, writing a review on a book of, well, book reviews, but it is a useful addition to your library nonetheless.

How many great operations books are there? We'd like to publish our own list of the top 10 or 20. Please email your suggestions to us at jhehre@cprocess.com.
John Hehre is a senior operations executive and provides interim management and project based consulting to mid-sized private companies in need of transformative change. He can be reached at jhehre@cprocess.com.

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Surviving (and thriving) during challenging economic times
Several days ago I received an e-mail from a long-time friend that let me know his company was going through another reduction in their work force - 10% of their employees. This was just two months after the organization had laid off 20% of their work force.

He proceeded to explain that he had lost many close co-workers and that a lot of these co-workers were an important part of why he liked working at his company. Those left behind were described as depressed and stressed out more due to a heavier workload. He went on to tell me of many "long faces" every day, mentioning that some employees even felt guilty about still being there - a sort of "layoff survivor remorse".

"Tempers are also short" and "it's getting ugly when some people start moving into protective mode". "I'm not sure what is going to happen next".

While these reactions are disturbing, they are unfortunately not at all out of the ordinary. According to a Leadership IQ survey of workers who remain at 318 companies that have been conducting corporate layoffs since June 2008, 75% of 4,172 workers who have kept their jobs say their own productivity has dropped since their organization laid off employees. In the survey, employees also answered questions about product quality, productivity, workforce issues and management effectiveness.

The survey findings were chilling:
  • 87% are less likely to recommend their organization as a good place to work.

  • 81% say customer service has declined

  • 77% see an increase in errors being made

  • 64% say their colleagues' productivity has declined

  • 61% think their organizations' prospects have worsened

Despite these negative statistics, there is hope. But what steps can managers take to soften the repercussions of a layoff?

Here are six recommendations for managers to lessen the negative effects of a reduction in force:

Directly communicating to employees. Secrecy or a lack of transparency will add to an employee's sense of powerlessness. The rumor mill will likely run rampant without a direct communication line to employees.

Allowing employees to express their natural emotional reactions. Not doing this may lead to employees releasing their feelings in non-productive ways.

Demonstrating long-term support for employee's careers. Start to increase the regularity of career-related discussions and possible advancement opportunities.

Incorporating periodic employee attitude survey. These assessments help management keep up-to-date with the impact of layoffs on the day-to-day operations and also demonstrate to employees that they are valuable assets to the business.

Openly addressing the downside of having less staff for the same amount of work. Solicit ideas from employees in rethinking how tasks are going to be accomplished.

Developing a sense of collaboration with peers outside of the company. It is crucial for managers and supervisors to network with their colleagues at association meetings. In today's economy, chances are your contemporaries at other organizations are experiencing many of the workplace challenges that you are.

You'll want to know what has worked for them and what hasn't. A general exchange of ideas among peers can jump-start your management team.

Managers need to be highly visible to their staff. They have to be honest about the state of the organization in order to build their trust and credibility. In rough economic times, it's crucial for respected companies to demonstrate that their employees are assets, and not simply costs.

Ironically, dealing with the aftermath of layoffs can actually provide an organization with excellent opportunities to build a partnership culture with the remaining workforce, specifically by:
  • emphasizing (through workplace communications) a "win, win" philosophy - the success of the company depends upon the employees and vice versa.

  • reiterating high performance standards for the company and for all employees.

  • involving employees in joint-decision-making. If you're not already doing so, set up an employee "suggestion box" for process improvement ideas.

  • sharing of your organization's short and long-term goals with employees.

It's important to remember that the vast majority of companies will survive the current recession. You will want to survive (and eventually thrive) with a forward-thinking workforce intact. Reductions in force are challenging to management and employees, but when handled properly the negative consequences can be substantially diminished.
<img src="http://www.mfrall.com/newsletter/authorpics/TomBurger.jpg"align="left">Tom Burger is the sole proprietor of HR Outsourcing Solutions, a Human Resources consulting firm that provides customized services to small & medium-sized companies. Tom can be reached at 612-281-9744, or online at www.hroutsolutions.com

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Executive Perspective on Current Challenges
There is no doubt that we are facing challenging times. The economy is soft and this is causing significant difficulty in many quarters, but I believe that there are two things that we may be overlooking.

First, this economic time is part of a cycle, and like other cycles, we will see the bottom and then things get better. The economy will recover, jobs will be created, profits will return and we will be able to put this behind us. Perhaps we will even come out collectively stronger from having had to find the best in ourselves and our companies. That this is a particularly challenging cycle that came on fast and is also connected to a banking issue cannot be denied, but it is still a cycle that we will emerge from.

Second, that the media attention to these times has created a general fear that is helping to feed the economic downturn. Fear is an amazing thing and while it is the result of not feeling in control, letting it dictate our actions is a very unhealthy thing. We need to respect what is going on and have a determination to overcome our challenge, but we cannot allow ourselves to wallow in fear and I see far too much of that going on.

I am not a person who does a great deal of shopping but on a recent Sunday afternoon I went out and made several stops. Costco had no backed-up checkout lines. Home Depot was as empty as it is just before closing time. And finishing off the afternoon at REI, I had to look for a cashier to give some money to. I kept wondering where the 92.5% of the people who are employed were. My only thought is that they are so fearful of our current economic situation that they are sitting it out, waiting for it to get better and in the process making it worse. Fear is winning and we are losing.

What is going on with companies today disturbs me. I am looking at companies facing this economic downturn treating it like their very survival is at risk instead of focusing on making their companies stronger. (Not that there are not companies that need to and should take drastic action to survive) But, I am seeing companies that are still profitable or have positive cash flow closing plants or stores and cutting staff that could help them build for a stronger tomorrow - almost as if they now have an excuse to do so. The bigger companies say they are doing this to preserve "shareholder value" when in fact the fear has so reduced the value that it is hardly worth worrying about in the short term.

Beyond that, I am struggling to understand how we seem to have lost sight of the fact that operating a business is not just about making money in the short term. We need to be considerate of all our stakeholders, not just the shareholders (or management in a truly out of balance company). We owe loyalty to shareholders, but if we do not balance that with the needs of other stakeholders, we are just running companies that in the long term will ultimately disappoint our shareholders.

We see on an all too frequent basis, the result when we become a society out of balance, focused only on profitability for the owners (management). It is the root of most corporate and financial scandals. It creates distrust within our communities and often leads to legislative actions (solutions) that are worse than the problems. Our employees then don't trust us, don't do their best work and make unreasonable demands. Our suppliers get tired of not being in win-win relationships and look for other customers. Our customers feel that they are not the most important part of our business and take their loyalty elsewhere. The communities we operate in are less vibrant and in turn lose their ability to make us want to stay there.

I am not advocating we make stupid financial decisions and jeopardize the viability of our companies. However, we need to make practical decisions based on a long term outlook, and make sure our thinking takes into consideration the overall impact of our decisions.

This is a time to make sure we are doing the best for and by our customers, to strengthen our relationships and not cut services or quality. It is a time to solidify relationships with our vendors to make sure we can count on them and that they really value us. It is a time to invest in our employees so that they can be even more valuable to us. It is a time to continue our contributions to insure the charitable organizations that are helping those less fortunate and are committed to making society better continue to be viable. It is a time to look to and plan for the future.

It is also a time to support a dialog among ourselves on how to overcome our collective challenges, instead of just letting collective fear dominate our thinking and actions, and in the process, isolate us. We need an honest discussion about how we as leaders must focus on where we can be, instead of wallowing in what is not the way we want it to be. And, we need to embrace a model of shared sacrifice to insure the actions we take are as fair as possible.
David Hartwell is the President of Bellcomb Technologies Inc. To learn more about Bellcomb visit - www.bellcomb.com

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MN Economic Report
For the month of February 2009, reported March 2, 2009. For a seventh straight month, Minnesota's Business Conditions Index fell below growth neutral.


The index, a leading economic indicator based on a survey of supply managers in the state, dropped to a regional low of 28.4 from January's 30.1, also a regional low. Components of the overall index for February were new orders at 26.3, production at 25.6, delivery lead time at 39.3, inventories at 27.4, and employment at 27.6. "Since the beginning of the recession, Minnesota's computer and electronic-product manufacturing industry has lost more than 1,000 jobs. I expect this industry to be the state's turnaround industry and will provide an early signal of an economic expansion," said Goss.
Dr. Ernest Goss of Creighton University, used the same methodology as The National Association of Purchasing Management to compile this information. An index number greater than 50 percent indicates an expansionary economy, and an index under 50 percent forecast a sluggish economy, for the next three to six months.

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