Applied Strategy – Practitioner – Disciplined Decision Making
Beggars and Choosers by Ross Levin, CFP
Levin, Ross. Journal of Financial Planning. Aug2010, Vol. 23 Issue 8, p30-31. 2p.
Ross Levin’s article titled “Beggars and Choosers” discusses and analyzes the strategy of disciplined decision making. Levin is continuing to learn how to use autonomy, mastery, and purpose as principles in which to continue to build his business. Practicing these principles and applying the disciplined decision making strategy remains a work in progress for the firm.
Levin, the founding principal of Accredited Investors Inc. and the author of The Wealth Management Index, hired Jim Grubman, Ph.D., from Family Wealth Consulting to challenge each employee in behaviors which will be effective in helping the company grow. With this challenge came realization that many of the practices within the company were in fact, just covering up the weaknesses of the business. Although things were good and most employees were happy, long term planning was something of a farce. The ideas that came from the plans never came to fruition, therefore not providing consistency and not showing employees they were valued. They now make decisions with much more discipline and the owners follow through with the changes agreed upon. Levin says, “Jim taught us the difference between privacy and secrets. We needed to keep things private as we were working through issues. Once someone would be affected by what we had been going over, then we needed to communicate what we were planning.”
One example of applying disciplined decision making within Ross Levin’s firm was in March of 2009 when staff salaries were frozen. While a large number of other firms had laid off staff, Accredited Investors Inc. chose a different route. A total benefits page was created to show employees the total compensation package they were receiving. Although they would not be receiving their annual raise, the employees were able to have a clear picture of the new annual review process and strategies involved. The blow of having their salary frozen was softened by being able to have a visual of all they received through compensations and benefits. Although the work in the beginning of this new strategy was great, the results proved to be more consistent.
Levin says, “With Jim’s help, we have completely redesigned our organization chart, forcing us to relinquish certain tasks that we enjoyed, but that were better handled by others.” This was not an easy process and it took months to carry out. As one of the founding partners in the firm, Levin realizes without his complete commitment to practice disciplined decision making, it will never work.
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ReplyDeleteJennifer,
ReplyDeleteI think it was a great idea to for management to let their staff know exactly why they decided to freeze salaries and how that decision came about. There are many times in a company when employees feel they are not being treated fairly and the entire organizational atmosphere is affected.
In my department there have been budget cuts that staff was unaware of. When people were not being approved overtime many began to get upset and fight back. Once it was clear that the department’s budget needed to be evaluated and this was only temporary, the staff began to ease off management and people came to work with less anger.
Keeping your company in the loop on important decisions that directly affect them is a way to show them that they matter. It lets them know decisions are being made with them in mind and not just to save the bottom line.
I think the idea of showing each employee how they are important and exactly how they are compensated is a good idea to keep them happy and on the right page with the company. I have been in the situation Kim talked about above a couple times. Nothing makes you madder than working in the Texas heat for hours, bustin your knuckles, and foregoing other jobs only to find out that you aren't going to be paid for the last 20 hours of work, or going to be paid regular time instead of overtime.
ReplyDeleteFreezing salaries is a shocking and blunt way of showing employees that they need to listen up and listen good. Many salaried employees just go to work and put in the hours, never actually doing much work. That is the problem with America today. So many people go to their jobs and just get by. A perfect example is when you go to the local fast food place and the person seems mad at you when you make an order or ask for ketchup. I always want to be like "Im sorry you hate your job but your getting paid and without me, THE CUSTOMER, you get nothing, so DO YOUR JOB"
When a company values their employees I feel they are much more productive. When there are lots of planning sessions and then there are no results employees can lose their trust and faith in the company.
ReplyDeleteThe tactics taken in the example above was a very good idea. It sort of softens the blow of finding out you will not get a raise for an uncertain amount of time. Most employees should see that no they will not get a raise, but my employer does take good care of me. Putting the benefits that the employee does get in writing and presenting them with the information helps them to get a visual. When there is something that you have been benefitting from for an extended period of time you tend to forget just how good or generous it is.
Employee input is important for two reasons. It can sort of "smoke out" unforseen problems before they get out of hand. Also it can strengthen morale. When employee morale is low that can be the start of very big problems in an organization.
I find it very refreshing that these types of company's are still around. I strongly believe that a happy employee is a more productive employee. I agree with the above that there is a fine line between privacy and secrets but if there is an obstacle, it needs to be addressed. Every employee in a workplace needs to know that they are needed and that they are there for a certain reason, not just a pay check.
ReplyDeleteI also think it was a great idea for the company to show their employees the reason why their salaries were frozen and the benefits that they would still be receiving. It is very hard to go to work every day and not be appreciated. Communication between the managers and employees is a very important tool for all businessess. Most companies would develop great issues between management and employees if they did not communicate with each other. Even in modern day life, we all need to communicate with each other to better understand and work things out.
ReplyDeleteI agree with all of your comments. It is so important to feel appreciated at work. At a time when so many individuals were being laid off, they had job security. I think everyone would be okay with freezing salaries over the alternative of taking a chance of being laid off.
ReplyDelete