EXECUSCOPE               April 1992

 

 

Staying Afloat

 

Employee layoffs aren't the only way to survive in to­day's tough market. Here are some other ways to find the cash you need and maximize your business assets:

   1. Balance inventory levels by emphasizing sales based on raw materials. Purchase only essential merchandise.

   2. Review your pricing structure. Discounts for cash sales can reduce overall inventory and finance costs.

   3. Collect on accounts receivable. Focus on accounts overdue by 30 to 90 days. If necessary, finance overdue ac­counts or sell them to a factor.

   4. Use idle assets. Manufacture products for other firms. Let staff do work for outside companies.

   5. Barter time, space, or inventory. One sign-making firm trades signs for phones, carpet­ing, and supplies.

   6. Cut fringe benefits, company cars, and sales com­missions.--Entrepreneur, August 1991, p. 134.

 

 

Polishing People Skills

 

Do fellow workers find you insensitive, aloof, arrogant, or abrasive? You may soon be among the many executives now being polished in development pro­grams or found climbing rocks in special leadership camps.

   As American firms slim down, they are scrutinizing the remaining executives. Rather than replacing them, firms are attempting to improve managers' interper­sonal skills.

   Some experts applaud the trend. They say even the most antisocial manager deserves a chance to improve. Others worry that too much negative feedback at the wrong time can be devastating. They also argue that what appears to be a personality weakness may actually be a business strength or the result of a dysfunc­tional environment.   Even if you think you're fine, watch out. One expert says the most fatal personality flaw is denying that you have any flaws.--Training, September 1991, p. 66.

 

 

The Immigrant Work Ethic

 

Immigrants from Asia, India, Mexico, and Iran may have found the success formula for American industry. It used to be called the Protestant work ethic. Now it's called the refugee mentality. It's a combination of thrift, hard work, self-discipline, and deferred gratification.

   "People in America think luxury is a birthright," says immigrant Vinny Gupta. "But this country can move ahead only if we bring back the ethics there used to be."

   Gupta, from India, bought an ailing Ohio foundry. With a frugal, hands-on approach he qua­drupled em­ployee pro­duc­tiv­i­ty and saw annual sales rise $7 million. He now owns three found­ries and still keeps tabs on details.

   Other immigrants are proving that their values are an asset rather than a threat to the economy. Steve Hui, founder of Everex Systems Inc. in Silicon Valley, cut his salary in half to keep research and develop­ment funding. His firm has little long-term debt, a low inventory of finished goods, and stream­lined opera­tions. He says, "The way I was brought up, I feel there is opportunity in hard times, that if we can be tougher and more durable, we will come out ahead."--Inc., Septem­ber, 1991, p. 96.

 

 

Page 2

 

Businesses Move Home

 

Are you thinking about starting a homebased business? You won't be home alone. The growing ranks of homebased consultants, freelancers, and other business people include working parents, retirees, former executives, sales managers, and technical specialists. Even the president of the United States works out of his home--the White House Oval Office.

   Running an office from your home is not as easy as it looks. Homebased busi­nesses are convenient and cost effective, but they also have chal­lenges and distrac­tions. Here's some advice from entrepreneurs who work at home:

   1. Know your industry well before you jump into business.

   2. Take your business seriously. Establish a schedule and stick to it, but make sure the plan works for you. It's okay to take a laundry break.

   3. Focus on success, but learn from failures.

   4. Balance your business and personal life. Don't be a hermit. Network by joining an association.--Entrepreneurial Woman, September 1991, p. 56.

  

 

Nurture Rising Stars

 

Recognizing people with potential and helping them grow is smart, even if these talented workers can become your rivals. When you develop talent you help yourself as well as your company. If you want to move up in the ranks, it pays to groom a successor. If these people pass you by, at least you'll be treated fairly when they get to the top. Here are some ways to create an environment that fosters good succession planning:

   1. Reward good mentors with recognition and promotions.

   2. Rotate people through a variety of responsibilities and jobs.

   3. Promote diversity by giving women and minorities the informal and the formal training they need. Don't leave them out of golf and other outings.

   4. Be wary of managers who say successor planning is disruptive. Their concern may be an excuse for weak management and insecurity.

   5. Don't string employees along with unrealistic hopes. Help even employ­ees who aren't promotion material expand their skills.--The Bureau of Business Prac­tice Management Letter, December 10, 1991, p. 1.

 

 

Knowledge at Your Fingertips

 

A world of information is right at your fingertips with on-line services. Through your computer you can tap into fast-changing information of all kinds: business, finance, law, science, technology, marketing, and more. You can log on to bulletin board services for your field. You can even connect with services that send you answers via fax or electronic mail.

   In the last decade the demand for on-line services has been growing steadi­ly. Now, as business­es strive to be as efficient as possible, these services have become even more popular. Experts predict that as services get better and more widely known, many people at all levels will use them.

   At the moment, there are two main groups of users: information special­ists and managers. Information specialists need sophisticated search capa­bilities. Managers want user-friendly services that require little training. Many on-line information companies are responding with easy-to-use products that have a common command language and a request-driven database selection.

   Many users worry about controlling costs. Here are some tips:

   1. Before you log on, plan your research. Know how the search menus work.    2. If you frequently need reference-type information, consider buying information on a compact disk with read-only memory.

   3. Ask yourself: How much time it would take me or a co-worker to find this information?  How much would it cost if my competi­tors had this infor­ma­tion and I didn't?--Today's Office, August 1991, p. 44.

 

 

One Big Sales Family

 

Coordinating a national sales force means fostering a feeling of family, according to David Morel. Morel is executive vice president of DiSusa Imports, a New York liquor-distribution business founded by his family in Italy more than 100 years ago. Even though the liquor industry has been challenged as Americans drink less, his business is thriving.

   "Business is way up," says Morel. "I don't believe it's just because we have lighter products....I really think it's because our sales force knocks itself out. Our men and women do that little extra for the customer."

   Morel often travels across the country to meet with sales staff. He makes sure they feel involved and that they are up to date on births, weddings, and other social events at headquarters as well as on business.

   "The key is communication," he says. "My door is always open." Morel gives sales people his car and home phone numbers so they can call in the evening or on weekends. In Monday morning conference calls, the sales team discusses problems together. Morel also holds relaxed and casual national meetings every quarter.--Creative Management, November 1991, p. 5.

 

 

Fire Workers By the Book

 

You're fed up with a worker who's broken the rules once to often. You know your company handbook says you can fire at will, so you fire the worker on the spot. Are you safe from legal backlash? Not necessarily. One fired construc­tion worker sued because his boss didn't give the notice required in the handbook. The court found that the boss also had not given him a chance to correct his conduct--another provision set out in the handbook.

   In addition to knowing the rules before you fire people, it pays to know what superiors have promised them. Sometimes remarks about the security of a job can be considered binding. If you've coaxed a person into accepting or staying in a job by offering job security, you may not be able to fire that person at will. One employee turned down an outside job offer and promotion when his company said he could have his job for the rest of his life. When he was fired four months later, he sued the company for breach of implied contract. The New Jersey Supreme Court ruled that the case should go to trial.--Supervisor's Bulletin, November 15, 1991, p. 1.

 

 

Page 4

 

Bridging the Family and Work Gap

 

Corporate care for workers' children and elderly parents may seem costly. The benefits in worker productivity and loyalty, however, can outweigh the expense, according to Dayle M. Smith, author of Kin Care and the American Corporation. Trying to juggle children, elders, and a job can result in absenteeism, interruptions, stress, and too much time on the phone. Here are some ways employers can help:

   * On-site care centers are expensive to launch but they enhance employee loyalty as well as the company's image. Some firms form a separate agency. Others lease empty office space to an outside agency.

   * Consortium care centers let small firms offer kin care by teaming up with other companies. Careful preplanning and agreements are vital.

   * After school and vacation care fills the gap between school and work schedules. Employers can arrange with YMCAs and private homes.

   * Subsidized in-home nursing care or space in infirmaries for mildly ill or recovering family members can help keep employees on the job.

   * Reserving spaces in elder day care programs cuts worker absenc­es and phoning. Stride Rite runs a center for both elders and chil­dren.

   * Resource and referral services are an inexpensive way to help.

   * Flextime, part-time, job sharing, telecommuting, and flexible benefits boost employee morale and productivity with minimal cost.

   * Vouchers, negotiated discounts, and subsidies ease the care burden inexpensively.--Soundview Executive Summaries, November 1991, p. 1.

 

 

 

Page 2

 

FORECASTS

 

The job outlook will stay grim, even with a mid-year economic recovery. Staff cuts will be fewer than in 1991, but probably deeper than firms ex­pect, the Hay Group pre­dicts. Down­siz­ings and early retire­ments will con­tin­ue, says a Conference Board panel. Unem­ployment could rise three-tenths of a percent.

 

Recent college graduates can take heart. Employers show cautious optimism for hiring 1991-1992 graduates, says the College Placement Council. It says 61 percent of the firms surveyed plan to hire more grads than they did last year. Overall hiring will rise 8.5 percent.

 

Security in the golden years is becoming more tenuous because of soaring health costs. A typical married couple retiring in 2001 could deplete its assets in less than 10 years if one person needs home care. Northwestern National Life Insur­ance compared the expectations of retir­ees and workers over 40 with health cost projections. Nine out of 10 workers think they can afford retirement. The insurer's figures indicate otherwise. The major­ity thinks employers will offer health insurance plans after retirement. In real­ity, only 32 percent of employers do, and a quarter of those plan to trim or drop them. The insurer predicts that tax payments to support Medicare will rise dramatically. If they don't, retir­ees will have to choose between adequate health care and going broke.

 

 

 

 

 

Page 3

 

FINDINGS

 

 

Rest Your Eyes

 

Many American office workers are worried about eyestrain. In a recent poll, 47 percent of the workers cited eyestrain as a serious concern. Techni­cal problems like screen glare, poor resolution, and poor light­ing caused 37 percent of the more than eight million VDT-related eyestrain cases optometrists see each year. Sales of one California company's anti-glare filters rose 50 percent in the last three years. Rest and periodic breaks help combat eyestrain.

 

 

Financial Control

 

Employees would like more control over how their pension funds are invest­ed. A survey found that only 26 percent would like someone else to manage their pen­sion savings for them. Only 54 per­cent of the profit-sharing and 401(k) plans let participants choose their invest­ments. Some 48 percent offer one or two invest­ment options for company contribu­tions. Only 44 percent offer actively managed equity funds.

 

 

Non-Traditional Movers

 

The typical transferee is a white mar­ried male in his mid-30s with two chil­dren. Women, minorities, and single people, however, are increasingly being relocated. A Runzheimer International study found that 20 percent of the em­ployees relo­cated in 1990 were atypical. Only 19 percent of the firms gave them help with special concerns.

 

 

Don't Slouch

 

To prevent workplace inju­ries, avoid awkward movements and bad posture, take regular breaks, rotate tasks, and use adjustable furniture, according to Aet­na. The insurer esti­mates that 63 per­cent of its inju­ry-claim pay­ments are for cumulative trauma dis­or­ders like carpal tunnel syndrome and tendinitis.

 

 

Page 4

 

SHORTS

 

Faxing from airports and other public places with your credit card is now possi­ble with Min­olta's new system, Faxmatic. Minolta pro­vides dealer back­up, includ­ing cred­it-card administra­tion. About 100 units have been sold.

 

Put customers in touch with your firm's experts with 900 Support Inc.'s tele­phone service. Calls for advice from anywhere in the country are routed through the company's switching system. The system tracks the call and how much of the fee goes to the expert.

 

The average Japanese employee works 200 more hours a year than the average U.S. employee. A survey by a Japanese labor organization found that Japanese workers spend about one and a half more hours working and commuting each day.