Engage People – Grow Profits!

In this age of quickly advancing technologies and light-speed communication, competitive advantages in business are very hard to maintain. One competitive advantage that sticks is people. High-performing people in the right positions will give you a prolonged edge over your competition. Many business owners and managers know this. However, knowing it is one thing and doing something about it is very different. This is a sustainable competitive advantage because so few business leaders figure out how to effectively engage people in ways that build and maintain a competitive advantage.

Effective engagement of people, done right, will never be a program, a “flavor of the month”, or another trendy idea. It will build an organization into a group of people with a common purpose and mutual respect who love what they do and do it well in ways where everyone benefits. While effective engagement can be difficult to accomplish, the formula is simple: 1) have a mission and plan; 2) connect the right people with the mission and plan; and 3) foster an environment of high expectations and regular feedback.

Step 1: Mission. Successful organizations of all types have a clear purpose for their existence which creates something good and valuable for others. These organizations also have leaders who can tell the story of the mission in compelling ways that get others excited. The most successful of these organizations create a legacy of purpose that is greater than any one person and will outlast any individual in the organization

Step 2: Connecting Individuals with a Mission. Many organizations have a mission. It may even be compelling. But without tangible connections to individuals and their activities in the organization the compelling mission is little more than clever words on a poster. Connections to individuals are made by translating the big picture of the mission into bit-sized pieces that are meaningful to individuals in their daily work. Effective translation usually takes the form of good operational planning and effective managerial leadership in the heart of the organization that creates clear purpose for individuals in their day-to-day work. This also requires effective managers and systems that find the right people, place them in the right jobs, and provide meaningful connections among people throughout the organization.

Step 3: Inspiring People to Exceptional Performance. The final piece required for exceptional results and lasting competitive advantages is to inspire great performance. To do this you must foster and maintain leadership and managerial habits that create high (not unrealistic) expectations; that regularly measure progress; that give constant feedback; and that create an environment of success by consistently accomplishing ever increasing goals.

Take these three simple but challenging steps to effectively engage people in your organization to drive profits to everyone’s bottom line.

Ready for Reform? Changes Coming to Health Care Insurance

In March Congress passed and the President signed into law the US Senate bill that reforms health care.  Most of the reform deals with health care insurance.  Employer-sponsored insurance plans must begin complying with the new law beginning in October 2010.  More changes and reforms take effect later – especially in 2014.  Unfortunately, the changes will very likely result in a significant double whammy of higher health insurance costs and higher taxes since benefits and coverage are significantly expanded with almost no provisions for any cost controls while at the same time significantly higher taxes and fees will be collected.

Some changes are discussed in the popular media.  Some changes are more obscure but still will have an impact on businesses.  It must also be noted that not all the details can be know until the regulations for the reform are finalized by HHS which may not happen for some time.

Here are some of the legislation’s provisions that will be effective this October:

• Prohibits lifetime benefits limits on health care insurance;
• Prohibits rescission of health insurance coverage;
• Prohibits excessive waiting periods;
• Requires family plan coverage for children until age 26 (regardless of dependency) (unless they have an offer of employer-sponsored coverage).
• Prohibits pre-existing conditions exclusions for children under 19 (prohibits all pre-existing condition exclusions by 2014);
• Mandated appeal process;
• All plans required to provide first dollar coverage for preventative services.

Changes coming later than 2010:

• The value of employer-sponsored health insurance must be listed on employee W-2;
• Flexible Spending Account (FSA’s) contributions limited to $2,500;
• New limits, restrictions, and penalties for Health Savings Accounts and Flex Spending Accounts (most over-the-counter medications will be excluded, penalties for non-qualified expenses double to 20%);
• New requirements for annual IRS form 1099 reporting of every business-to-business transaction;
• Annual fees on health insurance providers begin in 2014 and escalate to more than $14 billion by 2018;
• “Cadillac Tax” imposed on health insurance coverage in excess of $10,200 for individuals and $27,500 for families.
• Individual taxpayer deductibility for medical expenses raised to 10% of AGI from current 7.5%;
• Increase in Medicare payroll taxes
• Health insurance exchange is established;
• Individuals mandated to purchase health insurance or pay penalties;
• Employers mandated to provide health insurance or pay $2,000/employee penalty (employers with fewer than 50 employees are exempted).

There is much information about this bill available on various website, however, it is difficult to find good factual unbiased information that is helpful to employers to know how to implement the required changes.  Employers and other plan sponsors must work closely with agents, brokers or other benefits consultant in preparing for the required changes. 

Here are some resources with more detailed information, one biased on the side of the current administration, the other biased on the side of business:
www.HealthReform.gov (US Department of Health and Human Services)
www.uschamber.com/chambers/healthcare (U.S. Chamber’s Health Care Tool Kit)

Integrating Our Digital and Physical Worlds

Not too long ago we all began a journey of exploration into the digital world of cyberspace.  This journey began in the middle part of the last century with a few folks interacting with large computers in climate-controlled rooms.  Soon, the reach of those computers extended out to a few desks with “dumb” terminals, then in the 1980’s we welcomed the arrival of personal computers on our desk putting real computing right at our fingertips.  Then portables and laptops unleashed the computer from desks.  Most of us now carry around in our pockets more computing power, more data storage, and more connectivity than existed in most climate controlled data processing rooms of 30 years ago. 

So what’s next on this journey?  Pranav Mistry, a PhD candidate at MIT, is doing some very interesting work that point to a likely next step – a more physical interface providing a deeper integration of our digital and physical worlds.

The laptops unleashed the computer from the desk, the mouse freed us from keyboards, the internet connected us to the world, smart phones freed us from the office, all of this has integrated computers more effectively into our lives, it appears Pranav Mistry is leading us into a new level of integration between the physical and the digital worlds.

 Watch is video to find out more:  TED Talk on SixthSense technology

More information about SixthSense technology.

Important Question in Health Care Reform

One of the most important questions in the current health care reform debate is this: How should we, the richest, most technologically advanced and well-educated society in the world, respond to the silent cries of the Uninsured?  

We have allowed thousands of our fellow citizens to die unnecessarily.  Studies show a 25% higher risk of death among the uninsured compared to those with health insurance.  That may be as many as 45,000 uninsured US citizens dying each year from preventable conditions. (Health Insurance and Mortality in US Adults , 2009) 

We have allowed thousands to face financial ruin when they experience unexpected health care cost.  Reports show 62.1% of bankruptcies in 2007 (500,000 individuals or families) were due to unexpected medical expenses.  (David U. Himmelstein, 2009).  

This past doesn’t have to be our future.  Working together we can find ways to get proper health care to everyone without big tax increases.  Here are two places to start:

Unlink health insurance from employment.  About 180 million US citizens have their health insurance tied directly to their employment. (U.S. Census Bureau, 2009) Each one is just one pink slip away from losing their health insurance.

 Simplify and Reduce administrative and insurance costs.  Other industrialized countries provide quality health care to all their citizens at much lower total costs and much lower administrative costs than here in the US.  We have the most complex health care and insurance systems in the world.  Let’s learn from other countries where the health of the population is better than ours and health care is simpler, more effective, and cost less.

Working together we can solve this!  We can’t let politics and egos get in the way of changes.  Contact elected officials and demand they get real reform passed.

Betting On the Family’s Health

A local teacher complained to the school board about difficult choices and high costs of health insurance and betting that his family will remain health for seven years with a $10,000 deductible and an HSA.   The teacher is not alone in his wagers with health insurance and his family’s health.  All of us are facing similar dilemmas.  Many are facing much worse choices.  It’s likely a safe bet that most of the school board members are facing these same difficult choices.  Unfortunately, the problem is much bigger than a local school board can address.  The simple shifting of costs from individual to employer is no longer an adequate solution. 

 

It is clear that our health care system is seriously ill.  Here are the symptoms:

• In 2009, we will spend about $2.5 trillion on health care – over $8,100 per person or 17.6% of Gross Domestic Product (GDP) up from about $150 per year per person in 1960 or about 5% of our GDP.
• Without significant change our spending on health care may double again to about $5 trillion in about 2020.  This will be nearly $15,000 per capita, accounting for 25% of GDP.
• Since 1980 health care expenses have increase about twice as fast as inflation each year (average annual CPI increase was 3.96% while average annual increase in health care expenses was 7.79%) (Kaiser Family Foundation, 2005)
• Compared to other industrialized countries, we in the United States are spending from 50% to nearly three times more per capita for our healthcare. (California Health Foundation, 2008)
• For all we spend, our health in the US is mediocre at best and getting relatively worse.  For example, compared to other countries in 2006 the US ranked:
  • 31^st in life expectancy, down from 23^rd in 1990;
  • 39^th in infant mortality, down from 27^th in 1990;
  • 43^rd in adult mortality, down from 39^th in 1990. (World Health Organization, 2009)
• More than 60% of bankruptcies filed in the USA in 2007 were linked to medical expenses and three fourths of these people had health insurance. (Himmerstein, et al., 2009)
• About 50 million people (one in six) in the US have NO health insurance coverage. (US Dept of Health & Human Services, 2005)

 

I encourage everyone to contact their representatives in Congress and the Senate to demand a complete examination and an immediate and robust treatment plan for our health care system.   It may already be too late for a modest treatment plan to cure the ills of our system.  It seems President Obama was correct in his comments to Congress that the needed treatment to cure our system may be too disruptive to be practically implementable.  However, without significant changes very soon, our health care system will arrive at the emergency room with symptoms so severe as to require admission to the intensive care ward.  If this happens, just as with individual people, the problem becomes significantly more expensive and much more difficult to fix.

 

There are multiple options beyond what we currently have available to us right now.  Many systems in other countries across the world get better results than our system at far less cost.  Let’s learn from them and adopt the best practices.  Call your Congressional representative and US Senator: demand that they work together to find and implement solutions.  Political bickering will only delay solutions and will likely send our health care system to the emergency room.  Let’s tackle the problem and address it now, before the illness is terminal.

Health Care: A Moral & Ethical Dilemma

We in the United States decided many years ago that K-12 education is a basic value of our society and a right of all citizens.  Is health care so different from education?  In K-12 education why do we think that the open free market won’t work?  Isn’t it because the free market doesn’t work effectively to provide universal education?  Why is health care so different?

We must think of health care first as a moral and ethical question.  Should health care be available and affordable for all citizens in the USA?  If so, how do we most effectively and affordably provide it?  If not, then how should we as a society respond to those who can’t afford to pay for the care?  And what will we do as significantly larger and larger portions of our population are unable to afford health care or health care insurance?  (Keep in mind that health care currently cost over $8,100 per person per year and rising much faster than the consumer price index.)

Should we accept that nearly two-thirds of the bankruptcies in 2007 in the United States were due to a family’s inability to pay medical bills?  That’s up 50% since 2001; and up from only 8% of the bankruptcies filed in 1981 after serious medical problems, (Medical Bankruptcy in the United States, 2007: Results of a National Study)

We must find the best in ourselves and in each other to accomplish this effort!  We must work effectively together to fix this problem.  We can’t fight against each other!

What do you think?  Please add your thoughts about the critical issues in health care reform.

Health Care in Other Countries

People on each side of the Atlantic both praise and criticize their own and other countries’ health care systems. If you are interested in learning more about the United Kingdom’s system, here’s a good resource:  

http://www.pbs.org/wgbh/pages/frontline/story/2009/08/lets-attack-the-nhs.html

How about other countries?  Look here:

http://www.pbs.org/wgbh/pages/frontline/sickaroundtheworld/countries/

Health Care Reform

We face a challenging problem in healthcare.  Here’s a review of the problem:

• Health care expenses in 1960 were about $150 per year per person and accounted for about 5% of our Gross Domestic Product (GDP). 
• In 1986 health care expenses were more than 10% of GDP or nearly $2,000 per capita. 
• In 2009, we will spend over $8,100 per person or 17.6% of GDP – about $2.5 trillion on health care.
• Without significant change our spending on health care may double again to about $5 trillion in about 2020 which will be nearly $15,000 per capita accounting for 25% of GDP.
• Since 1980 health care expenses have increase about twice as fast as inflation each year (average annual CPI increase was 3.96% while average annual increase in health care expenses was 7.79%) (Kaiser Family Foundation, 2005)

• No other country spends the amount we do on health care.  Compared to other countries, we are spending from 50% more to nearly three times more per capita for our healthcare. (California Health Foundation, 2008)
• For all we spend, our health in the US is mediocre at best and getting relatively worse.  For example, compared to other countries:
  • in 2006 the US ranked 31^st in life expectancy, down from 23^rd in 1990;
  • in 2006 the US ranked 39^th in infant mortality, down from 27^th in 1990;
  • in 2006 the US ranked 43^rd in adult mortality, down from 39^th in 1990. (World Health Organization, 2009)

 This might be a good time to contemplate that every system gets the results that it is designed to give.   These might not be the same results that the designers intended.  So, if you want the results that we’ve got over the last 20 or 40 years, then by all means, advocate for keeping this system in place or tweaking it a little.  Just be prepared to ante up big in the near future for mediocre results.

So what should be done to get different results? 

I welcome your thoughts and comments!

 …to be continued…

Keep Your Eye on the Goal – chapter 2

Here are examples of how some in the workplace have lost sight of the goal and are letting instinctive and conditioned behaviors distract them.

The article ‘Face time’ trumps telecommuting during recession, which appeared in the business section of the March 25th edition of the Twin Cities Pioneer Press newspaper, describes employees (and apparently bosses) who are jettisoning telecommuting in favor of face time with the boss. In the article, Author John McKee advises “Be in the office whenever the boss is in, whether that’s on the weekends or late at night.” He tells the reader “Simply put, if your boss is at work, you should be as well.”

The article implies that “face time” trumps results – especially in tough times. This is a poor management practice for several reasons. First, “Face time” has never correlated well with results. Managers may like those workers who they see more often. They may know them a little better. They may think they are more dedicated. Managers and employees may also find it more convenient to manage and measure “face time”. But are they getting better results? Those who get the best results and are most efficient may not be the ones we most often see. The fact that they are not seen by the boss as frequently as those seeking “face-time” may be part of the reason they are getting good results. They are out doing what needs to be done.

Another example of losing sight of the goal is found in a recent Society for Human Resources (SHRM) survey which reports employees spend an average of nearly three hours a day worrying about their job security. The article also states that “Bosses might be exacerbating employees’ fear by one simple action—staying behind closed doors”. The article further states that nearly one-half of employees surveyed felt the human resource department was “unhelpful” in foster confidence or in facilitating communication between management and employees.

These are not the engaging behaviors to which I referred in my March 14 blog entry.

Keep Your Eyes on the Goal

Most of us are stressed in these difficult days.  Stress often distracts us from the most important things and usually pushes us toward instinctive or conditioned thoughts and behaviors.  Unfortunately, for most of us, our instinctive or conditioned behaviors won’t effectively move us toward our goals.  Usually “fight or flight” instinctive behaviors like avoidance or defensiveness are not helpful.  And far too often, conditioned behaviors can be simply dysfunctional.

 

During times of stress, it is more important than ever to keep your eye on the goal and be clear about the things that move you toward your goal and the things that don’t.  During difficult days it is so important to carefully choose our thoughts, words, and actions.  For leaders in organizations our thoughts, words, and actions are magnified many times because of the direct impact on the people in the organization who are receiving and watching every word and action.

 

So do not let the stress of these current days distract you from your goal.  Don’t let the difficulties you face push you into instinctive or conditioned behaviors.  Keep the goal in mind and consciously choose thoughts, words, and actions that propel you toward that goal.  Pause a moment before each action and each word; ask yourself will what I’m about to say or do move me closer to my goal?