Management Matters Blog

It's Bonus Time Again

 

By Mike Myatt, Chief Strategy Officer, N2growth

This is the time of year where expectations are high and so is the volume of chatter around the water cooler in anticipation of that great corporate tradition--The Christmas Bonus. So what's it going to be this year? A turkey, an extra paid day off, a cash bonus, something creative or nothing at all? In this week's column I'll take a look at the well intentioned but often misguided practice of year-end bonuses.

I can’t even begin to communicate the number of times I’ve heard employees complain about the size of their Christmas bonus. It was if they felt entitled to significant rewards solely based upon the fact that they happen to be employed. Is a year-end bonus a right of entitlement or a privilege to be earned? I believe that it can actually be both, but that decision lies solely with the employer and is not really up to the employee no matter how much they might feel it is.

Some employers believe in providing a little something extra to all employees during the Holiday Season as an expression of gratitude for their loyalty and contributions during the year without regard to performance. It is in this type of culture where I believe the employees expectations can easily confuse the difference between a gift and a reward. Let’s say that in the previous year the company provided what was considered by most to be a fairly generous bonus, but in this annum the company struggled while also needing to make heavy expenditures in Q1 of the upcoming year so it opted to distribute no year-end bonus. How do the employees feel about this?

One would hope that the employees would understand and put the needs of the enterprise ahead of their expectation that this year’s bonus should eclipse that of the previous year, but would they? I’m certain not distributing a bonus would only spawn a sense of resentment among many and the gossip at the water cooler would shift to criticizing the CEOs car or how much vacation time he/she took that year.

As contrasted with the environment discussed above, some cultures distribute annual bonuses based on a formulaic approach calculated on metrics designed to reward individual, team or company performance according to the goals of the specific entity. While many tend to favor this structure it is far from perfect as well. It is very typical that in this type of environment that the controversy shifts from company vs. employees to employee vs. employee. As an example the marketing assistant who receives a comparatively small bonus when contrasted to that of a sales person feels that his/her contribution is minimized and feels that they were treated unfairly. Imagine working at Goldman Sachs where bonuses in any given year are expected to range from secretaries receiving $10,000, analysts garnering close to $100,000, junior executives seeing as much as $2-4 million and top income producers receiving upwards of $40 million dollars in bonus money. You don’t think there’s a bit of green-eyed bonus envy at Goldman Sachs each year?

At the end of the day, employers should hire well, bonus generously and provide public thanks where merited. Employees on the other hand should be thankful for the privilege of having gainful employment and be grateful for any bonus compensation received. I hope you enjoy your bonuses and will perhaps consider giving some of your bonus to those less fortunate this season.

 

Are You Customer Centric?

By Mike Myatt, Chief Strategy Officer, N2growth

Where possible I tend to shy away from "management speak" and industry "buzz words" as they typically don't add any real value and therefore don't merit much attention. That being said, in this week's column I'm going to stray from the norm and dissect one of the few catch phrases that merits the attention of all business people: "customer centricity."   Moreover, since it is approaching year end and every one else is putting out lists, I'm going to tip my hat to a few players in the industry that are actually following through on putting the customer experience first.

 

While I have witnessed a lot of buzz in corporate real estate circles on the topic of “customer centricity”, it is my observation that far more companies are talking the talk rather than walking the walk. Most businesses are so internally focused on issues centric to operations and strategy that the customer experience has been relegated to little more than an afterthought. Companies that truly understand the value of engineering their business model around the customer experience demonstrate a consistent focus on closing the gap between a company’s brand promise and the delivered customer experience and as a result these companies tend to outpace their peers in both growth and profitability. 

 

Customer centric businesses conduct their planning and their execution with the singular purpose of improving the customer experience--they place the customer’s needs and interests first thereby increasing customer satisfaction, which drives customer loyalty, which in turn creates an increase in brand equity. This is so blatantly simple that I am constantly amazed at how many businesses still don’t get it.  The sad reality is that many businesses today focus on measuring the wrong metrics for the wrong reasons. Misguided companies focus on selling more products and services while true customer centrists focus on improving the delivered customer experience. Do you sell or do you serve? Do you push an agenda or provide a solution?

 

With the maturation of any industry divergent interests which were once difficult to detect start to become both more visible and more controversial. As the commercial real estate industry has grown some of the “good old boy business practices” are being exposed for what they are, and the truly customer centric business models are rising to the top. The overarching theme driving customer centric business models is one of transparency. Customer centric businesses collaborate with their clients and see them as innovation partners. They are transparent in their approach and hide nothing from the customer. Those businesses that still don’t get it put their own agenda first, spin what needs to be spun and keep sensitive information behind the curtain.   

 

The following list contains my honor roll of commercial real estate companies that operate a customer centric business based upon transparency. The list is solely reflective of my opinions and not the opinions of CPN or its management. Before anyone complains about my choices or opinions, remember they’re my choices and opinions and that my editor is probably already cursing me for exceeding my word count limitations…On with the list:

 

Asset Management: Jones Lang LaSalle Inc. while trailing CB Richard Ellis Inc. in total square footage under management is the most innovative of all the third party management firms. Led by CEO Colin Dyer (arguably the smartest CEO in the business) JLL is completely focused on the customer experience setting the chinning bar at new heights of excellence.

 

Brokerage: Sperry Van Ness Inc. is the 16^th largest brokerage firm and they are aggressively pushing the brokerage industry toward a new level of transparency and customer centricity. Unlike many brokerage firms who refuse to cooperate on transactions to protect their commission income, President Jerry Anderson mandates his brokers do whatever is in the best interests of the client to maximize transaction value regardless of the impact on their broker’s commissions. Whether cooperating with other brokers or auctioning an asset, if it is up to Anderson, SVN brokers will do whatever it takes to make sure the property receives maximum exposure regardless of how other brokerage firms feel about it.

 

Capital Markets: Credit Suisse is in my experience the most user friendly of the capital markets providers. As you would expect of such a large institution they are savvy in their approach and comprehensive in their offerings, but what you don’t expect is how streamlined, efficient and competitive they are. Best of all you won’t be retraded.

 

ContractorWestern United States: Swinerton Builders Inc.was founded in 1888 and is consistently ranked among the top 25 general contracting firms. They are smart, diverse in their approach, and well I think their customer centric approach is evidenced by their sustainability. My only complaint about Swinerton is their limited market footprint in that they are predominately focused on projects located in the  Western United States.

Developer: Call me old school, but when it comes to running an excellent development organization Bob Sulentic has Trammell Crow Co. hitting on all cylinders. I like their product, their people and particularly their market driven approach. If you want a development partner that will listen to your needs and requirements while bringing an unparalleled track record to the table look no further than Trammell Crow.

 

Research: If you’ve ever been overcharged and underserved by a firm who shall remain nameless, or if you’ve been subject to skewed information by someone with a vested interest, you’ll love Real Capital Analytics Inc. Excellent, comprehensive research, data, and information at a reasonable price. Other firms in this space should take note of the focus RCA has on customer service and transparency as it is both refreshing and appreciated.

 

Supply Chain Management: If you are a property owner or manager and desire best in class e-procurement services look no further than SiteStuff. Led by CEO Charlie Pace, SiteStuff is totally committed to improving the customer experience through the most collaborative business process I’ve witnessed in the industry. Whether you’re seeking to gain insight into operational spend, streamline the bidding process of building maintenance service contracts or source eco-friendly products to achieve environmentally sustainable goals, SiteStuff will help you accomplish your goal.

 

Transaction Management: Led by CEO Steve Alter, Real Capital Markets Inc. is a web-based commercial real estate transaction management platform that insures complete objectivity and transparency in the institutional sale of commercial real estate assets.  Real Capital Markets has without question the best database in the industry and will insure that any broker or owner looking to have maximum, targeted exposure of an asset will be pleased with the outcome. From state of the art database marketing to secure online transaction and document management Real Capital Markets focus on exceeding customer expectations have made them the de facto industry standard. 

 

Can You Find the Zone?

By Mike Myatt, Chief Strategy Officer, N2growth

As 2007 comes to a close I know that many of us are focused not only a strong close to the year, but also in planning initiatives for 2008. When it comes to planning, "what" we choose to work on is only half the battle…"How" we choose to work is equally important. I was watching a football game on TV this weekend when one of the announcers described a player as being in "the zone." The question you should be asking yourself is, "How do I find my zone as a professional?" At first blush this question might sound a bit corny, but oh what a great question it really is, "Who wouldn't want to function at their best more often than they currently do? Wouldn't it be a marvelous thing to be able to place yourself in the zone when needed? In this week's column I'll provide some suggestions for operating in the zone.

We’ve all no doubt had our individual moments in the zone. However what we should be seeking is to find a formula that will allow us to replicate the highest level of achievement and the almost euphoric feeling associated with peak performance. While all of us have experienced the zone, some of us clearly spend more time there than others.

In fact, if you examine peak performers you’ll find that whether they’re athletes, scholars, executives, soldiers, politicians etc. they all spend more time in the zone than their counterparts who comprise the masses. They seem to have the ability to reach down and call upon something special when the steaks are at the highest. Reflect back upon your personal history and you’ll find these peak performers to have been your team captains, class presidents, mentors and other people of influence. People who know how to frequently find the zone tend to be leaders that inspire confidence and engender credibility through their decisions and their actions.

In thinking about “the zone”--as important as finding it is--learning to stay in the zone is perhaps even more critical. So is there really any single formula that will allow a person to find and stay in the zone? Probably not.

The main reason I answer in the negative is that everyone’s definition of success or peak performance will be unique to their personal needs or situation which makes a one size fits all formula rather difficult to apply. The above caveat being noted, if you apply the rigor of the following disciplines to your personal situation I believe you’ll find the zone and be able to stay in the zone more often than you otherwise would.