The World of Accounting

Get Employees to Compete Against Each Other

Abs — Sun, 03 Jun 2012 16:59:44 GMT

By using technology to create a form of the leaderboard typical in sales organizations, innovative firms are infusing their workplaces with competitive spirit. Both companies and high-performing employees stand to gain. We call these firms "winners take all" organizations.

Instead of distributing work evenly among employees, winners-take-all organizations allocate according to merit: Better workers take more assignments, and the others get what remains. The model exploits the fact that workers differ dramatically in productivity because of such factors as skills and attitude, which can be hard to assess when hiring. Over time, it may induce low performers to quit, leading to a higher-performing workforce and a constantly rising bar.

Servers at the Massachusetts-based restaurant chain Not Your Average Joe's always know how they're doing relative to their colleagues, owing to a cutting-edge workforce management systemMuse provided by Objective Logistics, Inc. Rather than forecasting demand and staffing a restaurant accordingly, as most systems do, the software tracks waitstaff performance in terms of per-customer sales and satisfaction (gauged by tips). Highly rated servers are given more tables and preferred schedules. By shifting work to its best servers, the restaurant hopes to increase profits and motivate all employees.

We talked with the company's CEO, Stephen Silverstein, who founded the firm in 1994 and Colleen Cushman, one of the restaurant's servers in Beverly, Massachusetts. Here's what they had to say about the system.

HBR: What was your goal in introducing this system?

Silverstein: Servers are our sales force. We thought it would provide insight into an area where we had no data and would drive sales and profitability.

What was the reaction among staff members?

It wasn't as negative as I expected. Many loved seeing their results. This is a helpful tool for servers to increase their sales and tips. After all, servers are commissioned salespeople.

Has it caused turnover?

Very few employees have quit. Some low-performing servers will be asked to leave if we can't help them improve, but losing the weak is good for the company.

What's the financial impact?

It's too early to tell for sure, but we think we will raise check averages by 2% to 3%, from $17 to $17.50 per guest. Based on 60,000 transactions a week, that adds up to about $1.5 million a year; with a 40% margin, the return is tremendous. We've also seen that guests prefer the higher-scoring servers, and since the system should help all servers improve, we hope that guests will be returning more frequently.

Colleen Cushman is a food server in Beverly, Massachusetts.

HBR: How did you rank in your first few shifts?

Cushman: Initially I ranked maybe 15th out of 30 servers. I'd never waitressed before, so my first concern was not dropping anything. But over time I learned to sell, and my rank went up. Instead of just having a customer look over the menu, I'd sell specific items: "This appetizer is my personal favorite." I like suggestive selling. I'm very indecisive, so when I'm a diner and I hear servers describe different options, it helps me decide.

How do you benefit from the rankings?

There are usually 12 servers per shift, so as long as I rank in the top 12, I'll get the shifts I want. Fridays, Saturdays, and Sundays are the moneymaking days, when I want to work.

How do low performers react to the rankings?

They often aren't even aware of the rankings—they're typically not on top of that.

Does your ranking ever fall?

Sometimes. I might get a party of 12 teenagers who want separate checks. Average check size is a factor in the rankings, so that can bring you down.

Note: (Some of the blog entries are copied from the various sites unless otherwise stated)

By: Serguei Netessine and Valery Yakubovich (www.hbr.org)

Are coworkers competitive about the rankings?

We joke back and forth, but it's nothing intense. For the most part, this system helps everyone get better, and a little friendly competition never hurts.

We believe that the opportunities for implementing winners-take-all systems are plentiful. It's easy to imagine the model's working in virtually any retail or transaction-oriented service business. Wherever there is a best location or a preferred shift, and as long as performance can be evaluated and ranked, companies can realize productivity and profit gains by shifting work to their best performers. And managers, freed from many of the tasks involved in appraising employees, can focus more attention on activities that really count—marketing, promotion, and other efforts that add to a business's long-term value.

This blog post was excerpted from Serguei Netessine's and Valery Yakubovich's article "The Darwinian Workplace" in the May issue of the magazine.

Get Employees to Compete Against Each Other

Abs — Sun, 03 Jun 2012 16:57:54 GMT

HBR: What was your goal in introducing this system?

Silverstein: Servers are our sales force. We thought it would provide insight into an area where we had no data and would drive sales and profitability.

What was the reaction among staff members?

It wasn't as negative as I expected. Many loved seeing their results. This is a helpful tool for servers to increase their sales and tips. After all, servers are commissioned salespeople.

Has it caused turnover?

Very few employees have quit. Some low-performing servers will be asked to leave if we can't help them improve, but losing the weak is good for the company.

What's the financial impact?

Colleen Cushman is a food server in Beverly, Massachusetts.

HBR: How did you rank in your first few shifts?

There are usually 12 servers per shift, so as long as I rank in the top 12, I'll get the shifts I want. Fridays, Saturdays, and Sundays are the moneymaking days, when I want to work.

How do low performers react to the rankings?

They often aren't even aware of the rankings—they're typically not on top of that.

Does your ranking ever fall?

Sometimes. I might get a party of 12 teenagers who want separate checks. Average check size is a factor in the rankings, so that can bring you down.

Note: (Some of the blog entries are copied from the various sites unless otherwise stated)

By: Serguei Netessine and Valery Yakubovich (www.hbr.org)

Are coworkers competitive about the rankings?

We joke back and forth, but it's nothing intense. For the most part, this system helps everyone get better, and a little friendly competition never hurts.

This blog post was excerpted from Serguei Netessine's and Valery Yakubovich's article "The Darwinian Workplace" in the May issue of the magazine.

The Clearest Path to a Career That's Right for You

Abs — Sun, 03 Jun 2012 16:56:18 GMT

Note: (Some of the blog entries are copied from the various sites unless otherwise stated)

By: Bill Barnett (www.hbr.org)

Nothing in career strategy is more important than picking the career field that's right for you. Get that right, and you may be headed to happiness and fulfillment in your work.

The most straightforward path to that field is to build directly on your capabilities. A great deal ofresearch shows that people who work in areas where they're especially strong accomplish a lot and enjoy the work. By building on your strengths, you'll find the right opportunities. Employers and investors will be more likely to bet on you if they think you're up to the challenge — if you really can help them accomplish their goals.

Guide your career by consciously building on your capabilities. Here are three ways to do that:

1. Recognize your core capabilities. The first step in thinking about a capability-driven career is to understand what to build on. Begin with a self-appraisal. Look for distinctive talents, skills, and knowledge that will make you highly competitive for certain lines of work.

I'll illustrate this idea with a computer solutions sales manager. His list might include understanding customers, meeting information needs with computer solutions, coaching junior salesmen, and communicating well verbally. These characteristics are certainly important for that field of work, but they're too general. They're similar to what other sales managers might say about themselves.

A more specific list would be a stronger career guide. For example, go beyond "meeting customer information needs with computer solutions" by noting your deep knowledge of how to do that in a specific industry, like retail, or your experience with a particular computer solution technology, like integrating iPhone functions with a company website. Don't just jot down "understanding customers," but also describe your talent for imagining customer problems and needs before the customers even recognize them.

2. Build targeted capabilities over time. Once you've identified the talents and capabilities you already have, consider what you need for career growth. Your target capability set can be expertise in a field (like the computer example above) or in a function (like financial analysis or human resources management).

How do you build your target capability? Some steps are obvious. You might enroll in a graduate degree program in that area or achieve a qualification certificate. You certainly would work in that area. You might try to re-craft your job to shift the content of your work in your target direction.

Other steps are more complicated and can raise dilemmas. You'd be cautious about accepting an otherwise attractive transfer, promotion, or a new job offer if it didn't build capabilities in your target area. If you were proactively looking for a new position, you'd focus your search on roles where you'd grow your target skills rather than on the possibilities that seem the easiest.

In saying this, I'm certainly not arguing against broadening assignments. They can be critical parts of personal development. If an attractive broadening assignment appears, do two things: Think through how that assignment can lead back to opportunities in your target discipline, and if that's hard to envision, ask yourself whether your fundamental strategy is still right for you.

3. Add new capabilities to shift direction. If you discover that the skills you have and the direction you're headed isn't your ideal path, you may wish to change fields. In this case, you'll need a different personal value proposition, and it will require new skills and knowledge.

When making this kind of switch, people sometimes abandon their existing capability base. That's an option, but it often requires a step downward, and the ultimate result is uncertain. Unless you're extremely dissatisfied with where you are, the simpler path is to leverage what you know to find something new. Take the perspective of an employer or investor in a new field or function, and imagine what you'd need to add to persuade them to bet on you.

People may know exactly what new direction to pursue and what preparations would help them get there. More typically, their goal isn't that clear, and they're trying some things out. A good example of this was a physician who tired of his clinical practice and wanted a leadership role. He didn't have a clear strategy in mind, but he took evening classes to get his master's degree in public health and prepared the foundation that allowed him to transition into management.

Career development through capability growth is the most direct path to a career that's right for you. How much is your career path building on your base of knowledge and skills?