Archive for December 2014

Consider The Two Pizza Rule When Putting Teams Together

December 22, 2014

The two pizza rule states that the number of people working together should not exceed the number of people that can be fed by two pizzas.  The rule was popularized by Jeff Bezos at Amazon who believes two pizza teams create a decentralized and innovative workplace.

The idea behind two pizza teams is that the fewer the people working together, the more effective the communication becomes.  The number of communication links in a two person team is 1, a five person team 10, a ten person team 45, and a 20 person team has a whopping 190 communication links.  The U.S. Navy Seals have learned that four is the optimal size for a combat team.  Larger teams need more communication whereas smaller teams can have better communication.

When assembling a high-function team, a leader my be tempted to include team members from several areas just to make sure everyone is represented. That rarely works – look no further than our government to see what happens with large teams.  Ideally leaders should choose at most six or seven non-ravenous people if they want a highly functional team.

Empower team leaders to build teams using the two pizza rule and you’ll have more successful teams.

It’s Not Too Early To Start Sourcing Candidates

December 12, 2014

According to the top five New Year’s Resolutions are:

  1. Lose weight
  2. Volunteer to help others
  3. Quit smoking
  4. Learn more
  5. Get a better job

With sixty-percent of hiring managers expecting an uptick in hiring in the year ahead, now is the best time to start your recruiting efforts — especially since it’s one of the top 5 New Year’s Resolutions for potential applicants!  January is the best month to reach passive candidates capitalizing on their New Year’s resolutions.  Often, these newly resigned job seekers will begin searching for new positions that first week in January even before they have their resumes prepared.

Whether or not you have an immediate need, identifying superstars when they are emotionally committed to change jobs and courting them until you have a spot for them is a strategy that will give you a long-term competitive edge.  We’ve all learned the hard way that waiting until you have an opening is too late to begin searching for just the right person.  Granted, there is some effort required to keep the candidate engaged as the year progresses, but that’s nothing like the effort required to find someone out of thin air once an opening occurs.

As the holidays are upon us, so are lots of gatherings with people looking for safe topics of conversation.  Use the time wisely by preparing a little pitch you or your direct reports can use to describe the culture of your organization and the pros of working there.  When people begin to search for positions, they’ll start by thinking about the type of place they’d like to work — let one of those places that come to mind be yours.

Empower your direct reports to plant seeds of candidate sourcing now, so they can reap the benefits when you need to actively hire but don’t want to settle for any warm body.

How Much Do You Invest In Your Employees?

December 8, 2014

President: “We need to invest more in developing our employees.”

Controller: “We can’t invest in them, what if they leave?”

President: “What if we don’t invest in them and they stay?”

The largest expense line item on most company’s income statement is their payroll.  Studies and corporate bottom lines show that companies reap many benefits from investing in training for employees.  Why is it then that leaders are reluctant to invest in developing their talent?

Based on the training investments of 575 companies during a three-year period, researchers found that firms investing the most in training and development (measured by total investment per employee and percentage of total gross payroll) yielded a 36.9 percent total shareholder return as compared with a 25.5 percent weighted return for the S&P 500 index for the same period. That’s a return 45 percent higher than the market average. These same firms also enjoyed higher profit margins, higher income per employee, and higher price-to-book ratios.

Firms that invest $1,500 per employee in training compared with those that spend $125 experience an average of 24 percent higher gross profit margins and 218 percent higher revenue per employee (source: Laurie J. Bassi et al., “Profiting From Learning: Do Firms’ Investments in Education and Training Pay Off?” American Society for Training and Development, 2000).

For example, The Cheesecake Factory, one of the most successful restaurant chains in the nation, spends about $2,000 per employee for training each year and reaps sales of $1,000 per square foot—more than twice the industry average.

Empower your team to invest in talent development and you’ll experience more success than your competition.

Don’t Let Existing Performance Forms Hinder Quarterly Performance Reviews

December 1, 2014

Your organization may have adopted a formal performance review form that feels cumbersome or lengthy discouraging your willingness to conduct quarterly performance reviews.  Here’s a potential compromise. You can still use the short form we’ve been recommending in which you ask the following questions:

  • What have you done last quarter?
  • What will you accomplish next quarter?
  • What have you done to invest in your own personal development?
  • How have you demonstrated our core values?

Just use this format in the quarters for which there is not a corporate mandated form. If your organization insists on a particular form to be used annually or semi-annually, use it; it may not be worth fighting.  Simply use the shorter form on the other quarters and allow that information to populate the corporate form.

Empower your direct reports by giving them more regular check-points to assure alignment to goals and activities through quarterly reviews.