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29
Oct

Employee Discipline Programs and Policies

When employees violate company rules, are dishonest or disloyal, or fail to perform satisfactorily, employers may wish to impose some type of punishment. Generally, employers are free to discipline employees for any reason employers consider legitimate, and are not required to prove that they had “good cause” to justify the discipline. But, employers may be liable for wrongful discipline if disciplinary action is contrary to state or federal laws, the terms of their employment contracts and/or company policies and practices. Accordingly, employers should proceed with caution in disciplining employees and make sure that certain steps are followed.  The attached report describes some of the key issues with employee discipline programs and policies and includes a model form of progressive discipline policy.

26
Oct

Coach Dean Smith and Practicing Servant Leadership

An interesting and entertainment perspective on the practice of servant leadership comes from an article published online on the Championship Coaches Network soon after the death of Dean Smith, the legendary long-time basketball coach at the University of North Carolina who collaborated with Dr. Jerry Bell to write and publish a book, “The Carolina Way”, that included many of Smith’s ideas for effective coaching and leadership.  The article used quotes from the book to illustrate “10 Leadership Lessons from Coach Dean Smith” and the author observed that “Coach Smith was practicing servant leadership long before it has become the popular management principle it is today”.  In fact, the following quotes from the book are quite clear on how Smith approached his relationship with his players: “The coach's job is to be part servant in helping each player reach his goals within the team concept. (p. 147)” and “When I became head coach at North Carolina, I tried to put myself in the shoes of the players. How did they want to be treated? How could I help them reach their potential? How could I make the game fun and enjoyable and still work them hard? (p. 200)” 

Other key characteristics of servant leadership highlighted in the article using quotes from the book included the following: 

  • Genuine caring for followers: “The most important thing in good leadership is truly caring.  The best leaders in any profession care about the people they lead, and the people who are being led know when the caring is genuine and when it's faked or not there at all. (p. 4)”Smith was famous for building and maintaining long-term relationships with all of his players that extended far past the day that a player’s eligibility ended.
  • Willingness and ability to earn commitment of followers: “A leader's job is to develop committed followers. Bad leaders destroy their followers' sense of commitment. (p. 33)” Smith argued that leaders can no longer demand or expect automatic respect from their followers and must be prepared to earn commitment, respect and trust from followers, a process that requires leaders to act with integrity and credibility.
  • Confidence building:  “I'd get on the players if I needed to, but it was also important to praise them for the good things they had done, especially on the road, where they faced enough adversity without my piling on. I wasn't as critical during games as I was at practice. Players needed confidence during games more than criticism. (p. 240)” While constructive criticism is necessary for skill building and correcting errors that are undermining performance, leaders should be sensitive to how and when feedback that is likely to be perceived as negative is delivered.
  • Team building:  In the book Bell explained Smith’s approach to team building as follows: “Part of Dean Smith's greatness as a leader lies in his ability to get his players to get beyond understanding their roles to embracing them. But their commitment starts with clarity. If employees don't understand their roles, their specific areas of responsibility, it's almost impossible for the company to work well as a team. Confusion will reign. Divided responsibility ends up being nobody's responsibility. (p. 137)” The article emphasized the need for leaders to invest time and effort with every employee, not just the “stars”, to set and define their roles within the organization, explain how they are contributing to the organization, and establish a plan for them to follow in order to expand and change their roles as time goes by.

The other principles of leadership highlighted in the article, although not as directly related to servant leadership as those outlined above, were nonetheless complimentary and flowed naturally from Smith’s fundamental approach to relating to his players.  For example, “fair and consistent” punishment was mentioned as an element of team building and inconsistent punishment will almost certainly undermine a leader’s attempt to establish and maintain commitment from followers.  In addition, by caring for players from the moment they entered the program and continuously working with them to define their roles and build confidence Smith was able to develop a group of senior leaders who could mentor younger players and tell them what was expected of them and what it would take to achieve their goals.  Smith also made the process of confidence building easier and clearer by creating a daily “emphasis” and “thought”, based on Smith’s core principles and philosophies, which became the focal points of teaching and reinforcement during practices.  Finally, Smith built credibility among his players by demonstrating through his words and actions that while team performance, and winning, were very important and certainly a source of pressure for everyone involved, his priorities with respect to his players were not grounded in results on the court but on helping them to get a good education and become good citizens.

The source for this post was “10 Leadership Lessons from Coach Dean Smith”, Championship Coaches Network (blog). See also D. Smith and G. Bell, The Carolina Way: Leadership Lessons from a Life in Coaching (New York: The Penguin Press, 2004).  Please download this excerpt on practicing servant leadership from Leadership: A Library of Resources for Growth-Oriented Entrepreneurs.

22
Oct

Joint Venture Formation Checklists

This week's report includes several useful checklists relating to forming an international joint venture.  Topics covered include matters to consider when forming a joint venture, matters to consider when drafting a shareholders' or partnership agreement for a joint venture and the steps that need to be completed in order to form a joint venture.

19
Oct

Designing and Managing Effective Teams

Teams and team-based organizations are a specialized form of a network organization that has gained popularity as organizations seek ways to flatten their hierarchical structures, gain more flexibility and effectively combine expertise from different functional areas to solve problems that were presented to group members as projects to be completed.  Important organizational benefits of teams include improved productivity and quality, improved quality of work life for employees, lower absenteeism and turnover, increased innovation and improved organizational adaptability and flexibility, and team management can actually become an organizational core competency that can be leveraged to achieve important strategic objectives such as accelerated new product development, efficient production and improved responsiveness to the service requirements of key customers; however, in order for senior management to achieve these benefits they need to grapple with and resolve difficult issues such as how to structure teams and select team members, how much authority and autonomy to delegate to teams, how to motivate team members, and how to make teams accountable for their actions. 

The International Center for Growth-Oriented Entrepreneurship has just released a chapter on "Team Management" from its Library of Resources for Growth-Oriented Entrepreneurs on Organizational Design which is available for free downloading and sharing by clicking here.  Some important things you need to know about technology management include the following: 

1.         Commonly mentioned categories of teams include informal teams, which are usually formed initially for social purposes among persons with a set of common concerns and interests such as improving working conditions or sharing information on specialized topics; “traditional” teams in the organizational structure such groups (e.g., “departments”) formed to oversee and operate in functional areas with a leader (i.e., a supervisor or manager) assigned by the organization who is vested with legitimate power and authority to manage the group; problem-solving teams, which are temporary groups of members drawn from different functional teams who come together to find solutions to issues and problems that cannot be resolved within the standard organizational structure;  leadership teams created at the top of the organizational hierarchy to collaborate on the development and implementation of organizational goals (i.e., development and launch of new products) and related strategies; parallel teams that supplement the normal work processes of the company and typically focus on specific activities and functions that cannot otherwise be handled effectively within the regular organizational structure (e.g., quality circles, quality improvement teams, productivity improvement groups and employee participation teams); project teams which are organized to focus on a specific activity with the stated goal of creating a one-time output within a fixed time frame; and work teams, which are cross-functional and multi-skilled groups vested with responsibility for transforming various inputs into products or services (e.g., production, administrative support, customer sales and service, and professional support).

2.         Significant barriers to the collaboration required for a team to achieve the goals for which it was established include large size, diversity and virtual participation.  For example, once the size of the team goes beyond 20 members there appears to be a natural tendency for the level of cooperation to decrease and, as such, affirmative steps must be taken to avert problems and sustain the appropriate level of collaboration as team size increases.  In addition, as team diversity—measured by the proportion of strangers on the team and the level of diversity of background and experience—increases it becomes more likely that the members would cut back on their efforts to collaborate and share knowledge.  Virtual participation allows companies to reduce and control travel and other expenses traditionally associated with face-to-face meetings; however, the greater the reliance on virtual participation the higher the likelihood that cooperation among the virtual team members will decline unless steps have been taken in advance to promote and support a collaborative culture.

3.         Researchers have identified characteristics of effective teams including clear direction and responsibilities, knowledgeable members, reasonable operating procedures, healthy interpersonal relationships, which means that each member understands and accepts the individual values of other members and embraces the diversity as a means for developing stronger and effective teams, sharing successes and failures, and strong external relationships.

4.         Organizational practices associated with effective team activities include executive support for collaborative behavior and role modeling of collaboration among members of the senior executive team; strongly embedded norms of mentoring and coaching within the organizational culture; training for managers and employees in the skills and techniques that are necessary for effective collaboration including guidance on how to build and maintain networking relationships, communications skills and conflict resolution; fostering of a sense of community within the company that encourages people to freely and happily share knowledge and information that can be used by teams to effectively pursue their goals and objectives; and management of teams by leaders who are both task- and relationship-oriented and who have been be trained on when and how tasks or relationships should be emphasized as the work of a team unfolds.

5.         Team composition and structure should not be left to chance and leaders should be mindful of certain tried and true lessons for maximizing the chances that a team will successfully achieve the goals and objectives established for it: members with specific training and background relative to the achievement of particular goals and objectives of the team and influence within their regular departments to sell the ideas of the team and access the department resources required for the team to be successful; a material subset of members with preexisting (“heritage”) relationships sufficient to create a foundation for strong collaboration, communication and information sharing; clearly defined roles and responsibilities, tied to specialized expertise, for each team member from the beginning; clear team goals, although the path to be followed to achieve those goals should be left relatively ambiguous in order to promote creativity, collaboration and sharing of ideas; good interpersonal relationships and reasonable operating procedures that promote strong communication, equal participation and shared ownership of both successes and failures arising from the team’s activities; and members with strong abilities to read the emotions of their colleagues and consider and keep track of what they feel, know and believe.

6.         Researchers have argued that teams go through several identifiable stages of development in order to reach the point where they can be effective and successful: forming, which is the initial stage during which team members first get to know one another and the group focuses on evaluating the tasks assigned to the team and establishing group rules for interacting with one another is the stage when team members become acquainted with one another; storming, which emerges once the novelty associated with formation disappears and members begin to jockey for influence over their individual roles and the entire process the team will be following to fulfill task requirements and achieve its goals; norming, which is the stage at which team members focus on identifying and implementing accepted norms and standards of performance with respect to basic yet important questions such as the expected level of quality, the meaning and importance of schedules and deadlines, attendance and participation at meeting and establishment of subgroups within the larger team; performing, which is the stage at which the team is ready to work on its assigned tasks and become productive; and adjournment, which is the point where the activities of the team end for one of several reasons: the tasks assigned to the team have been completed, one or more of the members of the team leave or a decision is made not to move forward any more with pursuit of the assigned tasks.

15
Oct

Team Design Principles for Law Firms and Law Departments

Law firms and law departments have embraced "teams" as a tool for flattening their hierarchical structures, gaining more flexibility, and effectively combining expertise from different departments to solve problems that were presented to group members as projects to be completed.  Important organizational benefits of teams include improved productivity and quality, improved quality of work life for attorneys, lower absenteeism and turnover, increased innovation and improved organizational adaptability and flexibility.  In fact, team management can actually become an organizational core competency that can be leveraged to achieve important strategic objectives such as accelerated development of new practice areas and improved responsiveness to the service requirements of key clients; however, in order for law firm and law department leaders to achieve these benefits they need to grapple with and resolve difficult issues such as how to structure teams and select team members, how much authority and autonomy to delegate to teams, how to motivate team members, and how to make teams accountable for their actions. 

Designing and managing effective teams is one of several important topics that are covered in Chapter 25 of Business Transactions Solutions ("Organizational Design and Structure"), which is available on Westlaw.  While the chapter was prepared to provide attorneys with an introduction to organizational design and structure so that they would have a better understanding of the day-to-day environmental influences on their clients, it includes some valuable lessons about teams that can be used by law firms and law departments:

1.         Commonly mentioned categories of teams include informal teams, which are usually formed initially for social purposes among persons with a set of common concerns and interests such as improving working conditions or sharing information on specialized topics; “traditional” teams in the organizational structure such as groups (e.g., “practice groups or departments”) formed to oversee and operate in defined areas with a leader (i.e., a practice leader) assigned by the law firm or legal department who is vested with legitimate power and authority to manage the group; problem-solving teams, which are temporary groups of members drawn from different practice areas who come together to find solutions to issues and problems that cannot be resolved within the standard organizational structure;  leadership teams created at the top of the organizational hierarchy (e.g., the management committee) to collaborate on the development and implementation of organizational goals and related strategies; parallel teams that supplement the normal work processes of the company and typically focus on specific activities and functions that cannot otherwise be handled effectively within the regular organizational structure (e.g., quality improvement teams, productivity improvement groups and employee participation teams); project teams which are organized to focus on a specific activity with the stated goal of creating a one-time output within a fixed time frame; and work teams, which are cross-functional and multi-skilled groups vested with responsibility for transforming various inputs into services (e.g., administrative support, client service, and professional support).

2.         Significant barriers to the collaboration required for a team to achieve the goals for which it was established include large size, diversity and virtual participation.  For example, once the size of the team goes beyond 20 members there appears to be a natural tendency for the level of cooperation to decrease and, as such, affirmative steps must be taken to avert problems and sustain the appropriate level of collaboration as team size increases.  In addition, as team diversity—measured by the proportion of strangers on the team and the level of diversity of background and experience—increases it becomes more likely that the members would cut back on their efforts to collaborate and share knowledge.  Virtual participation allows companies to reduce and control travel and other expenses traditionally associated with face-to-face meetings; however, the greater the reliance on virtual participation the higher the likelihood that cooperation among the virtual team members will decline unless steps have been taken in advance to promote and support a collaborative culture.

3.         Researchers have identified characteristics of effective teams including clear direction and responsibilities, knowledgeable members, reasonable operating procedures, healthy interpersonal relationships, which means that each member understands and accepts the individual values of other members and embraces the diversity as a means for developing stronger and effective teams, sharing successes and failures, and strong external relationships.

4.         Organizational practices associated with effective team activities include the support of senior leadership for collaborative behavior and role modeling of collaboration among members of the senior leadership team; strongly embedded norms of mentoring and coaching within the organizational culture; training for attorneys and support staff in the skills and techniques that are necessary for effective collaboration including guidance on how to build and maintain networking relationships, communications skills and conflict resolution; fostering of a sense of community within the law firm or law department that encourages people to freely and happily share knowledge and information that can be used by teams to effectively pursue their goals and objectives; and management of teams by leaders who are both task- and relationship-oriented and who have been be trained on when and how tasks or relationships should be emphasized as the work of a team unfolds.

5.         Team composition and structure should not be left to chance and leaders should be mindful of certain tried and true lessons for maximizing the chances that a team will successfully achieve the goals and objectives established for it: members with specific training and background relative to the achievement of particular goals and objectives of the team and influence within their regular departments to sell the ideas of the team and access the department resources required for the team to be successful; a material subset of members with preexisting (“heritage”) relationships sufficient to create a foundation for strong collaboration, communication and information sharing; clearly defined roles and responsibilities, tied to specialized expertise, for each team member from the beginning; clear team goals, although the path to be followed to achieve those goals should be left relatively ambiguous in order to promote creativity, collaboration and sharing of ideas; good interpersonal relationships and reasonable operating procedures that promote strong communication, equal participation and shared ownership of both successes and failures arising from the team’s activities; and members with strong abilities to read the emotions of their colleagues and consider and keep track of what they feel, know and believe.

6.         Researchers have argued that teams go through several identifiable stages of development in order to reach the point where they can be effective and successful: forming, which is the initial stage during which team members first get to know one another and the group focuses on evaluating the tasks assigned to the team and establishing group rules for interacting with one another is the stage when team members become acquainted with one another; storming, which emerges once the novelty associated with formation disappears and members begin to jockey for influence over their individual roles and the entire process the team will be following to fulfill task requirements and achieve its goals; norming, which is the stage at which team members focus on identifying and implementing accepted norms and standards of performance with respect to basic yet important questions such as the expected level of quality, the meaning and importance of schedules and deadlines, attendance and participation at meeting and establishment of subgroups within the larger team; performing, which is the stage at which the team is ready to work on its assigned tasks and become productive; and adjournment, which is the point where the activities of the team end for one of several reasons: the tasks assigned to the team have been completed, one or more of the members of the team leave or a decision is made not to move forward any more with pursuit of the assigned tasks.

12
Oct

Risk Management—An Imperative for Founders and Senior Managers

All companies, regardless of their size and the industries in which they operate, are facing greater challenges with respect to identifying and managing the internal and environmental risks that are related to their day-to-day activities.  While larger companies are particularly focused on the risks associated with corporate governance issues, founders and executives everywhere should be concerned about the potential adverse impact of natural disasters, litigation or government investigations, physical infrastructure and facilities risks, terrorist attacks, unforeseen changes in customer requirements, the entry of new competitors or introduction of new technologies, credit and market risks, breakdowns in internal controls, and security breaches that can lead to financial losses and reputational damage.  All this means that companies must integrate risk management into their overall strategic business planning effort to reduce and manage uncertainties in the environment in which they operate.  In order to do this, companies must embrace risk assessment processes that allow them to benchmark, or compare, the risk areas and compliance activities of their company against firms of similar size engaged in comparable operational and business activities.  The output of these processes then becomes the basis for designing effective compliance programs and setting operational priorities for everyone in the workplace.

The International Center for Growth-Oriented Entrepreneurship has just released a chapter from its Library of Compliance Resources on Conducting Risk Assessments which is available for free downloading and sharing by clicking here.  Some important things you need to know about the risk management and risk assessments including the following:

1.         The risks that are the greatest concerns for corporate executives include corporate governance issues, which not only expose companies to the costs of actual liability for violation of corporate governance laws and regulations but also force them to invest substantial amounts in compliance programs; natural disasters (e.g., hurricanes, flooding and earthquakes) in countries where companies have substantial assets and/or are engaged in a high volume of business activities; higher levels of litigation that can result not only in liability for claims made against a company but also in substantial additional expenses to defend against the lawsuits even if the company is ultimately found not to be liable; physical infrastructure and facilities risks, including the rising costs of maintaining aging facilities and the potential damage to products, property and humans that may occur as the company operates over public roads and railways; governmental regulation that carries higher costs of compliance which will ultimately cause companies to raise the prices of their products and services and risk loss of market share to competitors; terrorist attacks, unforeseen changes in customer requirements and the entry of new competitors or introduction of new technologies; and cyber-attacks that disable a company’s communications infrastructure and expose companies to potential liability for theft of personal information that has been entrusted to them for safekeeping.

2.         Management should be prepared to increase the company’s control mechanisms whenever there are changes in the organization’s regulatory or operating environment; changes in personnel; new or revamped information systems; rapid growth of the organization; changes in technology affecting production processes or information systems; new business models, products or activities; corporate restructurings; expansion or acquisition of foreign operations; and/or adoption of new accounting principles or changing accounting principles.

3.         Risk assessment is primarily concerned with what are generally referred to as operational risks (also sometimes called transaction risks), which are risks of loss or injury to the company from inadequacies or failures relating to processes, systems or people (e.g., fraud or error).  Operational risks can arise from internal and external factors and can be found in every major business activity of the company.  Operational risks may be broken down into various categories such as credit and market risks, reputation risks, strategic risks and compliance risks.  Credit and market risks include an unforeseen adverse decline in the liquidity of a key customer that must be addressed by changes in underwriting policies and collection systems to avoid significant losses and higher costs of servicing that customer.  Reputation risks include the possibility of security breaches that result in the loss of confidential information and the loss of confidence of customers and other business partners.  Strategic risk increases when the company fails to invest in the resources necessary for collection and analysis of all of the information needed to make proper and informed decision about major new investments.  Compliance risks include failure to comply with legal and regulatory requirements applicable to the company’s products and services which leave to civil and/or criminal penalties.

4.         The activities associated with an effective risk assessment process include identifying the risks that are most relevant to the company and developing a short description of the key characteristics of each risk so that it can be analyzed and strategies created for mitigating or eliminating them; defining the company’s “risk appetite” to determine which types of identified risks are most problematic for the company and thus are appropriate targets for mitigation activities; risk mitigation, which involves developing compliance programs and internal controls designed to reduce risks to levels consistent with the company’s risk appetite; and establishing benchmarks for measuring the effectiveness of the company’s risk mitigation efforts and procedures for continuous risk assessment to identify and manage new risks that may arise as the activities of the company and its external environment changes.  The scope of the process, and required investment, depend on the size of the company and its stage of development and available resources, and companies must decide on the level of sophistication of risk management procedures, how much of the process should be outsourced and the appropriate internal management structure for the risk management activities.

5.         Recognized general guidelines for conducting effective risk assessments include covering all major areas of potential misconduct; examining risk in the context of the company’s resources; using industry information and company history; including managers and employees from all organizational levels; analyzing both the impact and likelihood of the occurrence of a risk; quantifying each risk area; documenting the outcome of the risk assessment process; conducting the risk assessment in a defensibly objective manner and on a regular basis; and benchmarking the company’s compliance programs.

8
Oct

Conducting Risk Assessments for Your Clients

All companies, regardless of their size and the industries in which they operate, are facing greater challenges with respect to identifying and managing the internal and environmental risks that are related to their day-to-day activities.  While larger companies are particularly focused on the risks associated with corporate governance issues, founders and executives everywhere should be concerned about the potential adverse impact of natural disasters, litigation or government investigations, physical infrastructure and facilities risks, terrorist attacks, unforeseen changes in customer requirements, the entry of new competitors or introduction of new technologies, credit and market risks, breakdowns in internal controls, and security breaches that can lead to financial losses and reputational damage.  All this means that companies must integrate risk management into their overall strategic business planning effort to reduce and manage uncertainties in the environment in which they operate.  In order to do this, companies must embrace risk assessment processes that allow them to benchmark, or compare, the risk areas and compliance activities of their company against firms of similar size engaged in comparable operational and business activities.  The output of these processes then becomes the basis for designing effective compliance programs and setting operational priorities for everyone in the workplace.

On Tuesday, October 13th at Noon Central Time, I’ll be presenting a program on Risk Assessments as part of the ongoing Business Counselor Institute Series on West Legal Ed Center.  If you are interested in attending, please follow this link.  My presentation will be based on the commentary and practice tools appearing in the chapter on “Risk Assessment” (Chapter 226) in Business Transactions Solutions on Westlaw and I hope you’ll take a moment to review these resources and make them a part of your practice.

Whether or not you can join the program, some important things you need to know about the risk management and risk assessments including the following:

1.         The risks that are the greatest concerns for corporate executives include corporate governance issues, which not only expose companies to the costs of actual liability for violation of corporate governance laws and regulations but also force them to invest substantial amounts in compliance programs; natural disasters (e.g., hurricanes, flooding and earthquakes) in countries where companies have substantial assets and/or are engaged in a high volume of business activities; higher levels of litigation that can result not only in liability for claims made against a company but also in substantial additional expenses to defend against the lawsuits even if the company is ultimately found not to be liable; physical infrastructure and facilities risks, including the rising costs of maintaining aging facilities and the potential damage to products, property and humans that may occur as the company operates over public roads and railways; governmental regulation that carries higher costs of compliance which will ultimately cause companies to raise the prices of their products and services and risk loss of market share to competitors; terrorist attacks, unforeseen changes in customer requirements and the entry of new competitors or introduction of new technologies; and cyber-attacks that disable a company’s communications infrastructure and expose companies to potential liability for theft of personal information that has been entrusted to them for safekeeping.

2.         Management should be prepared to increase the company’s control mechanisms whenever there are changes in the organization’s regulatory or operating environment; changes in personnel; new or revamped information systems; rapid growth of the organization; changes in technology affecting production processes or information systems; new business models, products or activities; corporate restructurings; expansion or acquisition of foreign operations; and/or adoption of new accounting principles or changing accounting principles.

3.         Risk assessment is primarily concerned with what are generally referred to as operational risks (also sometimes called transaction risks), which are risks of loss or injury to the company from inadequacies or failures relating to processes, systems or people (e.g., fraud or error).  Operational risks can arise from internal and external factors and can be found in every major business activity of the company.  Operational risks may be broken down into various categories such as credit and market risks, reputation risks, strategic risks and compliance risks.  Credit and market risks include an unforeseen adverse decline in the liquidity of a key customer that must be addressed by changes in underwriting policies and collection systems to avoid significant losses and higher costs of servicing that customer.  Reputation risks include the possibility of security breaches that result in the loss of confidential information and the loss of confidence of customers and other business partners.  Strategic risk increases when the company fails to invest in the resources necessary for collection and analysis of all of the information needed to make proper and informed decision about major new investments.  Compliance risks include failure to comply with legal and regulatory requirements applicable to the company’s products and services which leave to civil and/or criminal penalties.

4.         The activities associated with an effective risk assessment process include identifying the risks that are most relevant to the company and developing a short description of the key characteristics of each risk so that it can be analyzed and strategies created for mitigating or eliminating them; defining the company’s “risk appetite” to determine which types of identified risks are most problematic for the company and thus are appropriate targets for mitigation activities; risk mitigation, which involves developing compliance programs and internal controls designed to reduce risks to levels consistent with the company’s risk appetite; and establishing benchmarks for measuring the effectiveness of the company’s risk mitigation efforts and procedures for continuous risk assessment to identify and manage new risks that may arise as the activities of the company and its external environment changes.  The scope of the process, and required investment, depend on the size of the company and its stage of development and available resources, and companies must decide on the level of sophistication of risk management procedures, how much of the process should be outsourced and the appropriate internal management structure for the risk management activities.

5.         Recognized general guidelines for conducting effective risk assessments include covering all major areas of potential misconduct; examining risk in the context of the company’s resources; using industry information and company history; including managers and employees from all organizational levels; analyzing both the impact and likelihood of the occurrence of a risk; quantifying each risk area; documenting the outcome of the risk assessment process; conducting the risk assessment in a defensibly objective manner and on a regular basis; and benchmarking the company’s compliance programs.

5
Oct

The New Generation Gap: Millennials Managing Older Workers

Workers from so-called “Generation Y”, people born between 1980 and 2000, now form the largest group in the American workplace.  While many of these workers, often referred to as “Millennials”, begin with entry-level positions, some of them find themselves supervising the activities of colleagues who are old enough to be their parents or grandparents—a situation that often creates tension and confusion on both sides of the relationship.  Walker collected and compiled responses from hundreds of readers of “The Workologist”, a column that regularly appeared in The New York Times, in an effort to get a “real world” picture of how older workers can get along with younger supervisors.  Walker reported that several readers who were over 50 had contacted him to share stories of their job interviews with younger hiring managers and tell him that they often felt baffled about the process and the real reasons behind their failure to land a position.  Noting that the overwhelming majority of respondents who revealed their ages were 50 or older, Walker observed the following common themes and suggestions emerged: 

  • Experience, measured by years of services, should certainly be respected; however, older workers should acknowledge and accept that their younger supervisors have competencies in areas that are relevant to current operation of the business.  Both parties should be willing and able to share information that can enhance the way that the recipient sees and performs his or her job.
  • Following on the points mentioned above, older workers should be open to learning from their younger supervisors and should carefully listen to the supervisor’s expectations regarding the outcome of the older worker’s activities.
  • Older workers should exercise caution and restraint when giving “advice” to younger supervisors and do so only when it is solicited or the project has reached a juncture where it is clear that input from everyone involved is needed in order to determine that best way to proceed.  Once the advice is given the older worker should let the supervisor decide what to do with it—if the advice is not taken the older worker should simply move on and not press the issue.
  • Older workers should always demonstrate to their supervisors, regardless of their age, that they understand and appreciate the authority formally vested in the supervisor’s position by the organization.  A younger supervisor, although confident about his or her skills and abilities, may be threatened by real or imagined career aspirations of older subordinates and it is important for the supervisor to feel that he or she will be supported by everyone on the team.
  • Older workers should package the skills and talents they have accumulated over their careers as valuable assets that are available right now to be used to pursue and achieve the future goals of the organization.  Older workers should make it clear they are not there to replay the past but to energetically participate in new activities that require the collaboration of people of all ages with different aptitudes and world views.
  • In almost every industry and context the common thread of change over the years has been the development and implementation of new technologies and technology is one of the greatest potential hurdles to collaboration across generations.  Younger supervisors should have some patience with older workers and organizations should be sure to offer appropriate training to all new workers, regardless of age or experience; however, older workers must demonstrate that they have been working on learning and using new technologies and should not be dismissive of social media and other communications tools that are here to stay.
  • Younger supervisors should not forget that the ability of the organization to attract and retain qualified older workers can enhance the brand of the organization among a very large and relatively wealthy demographic group.  While “startups” often begin with a push toward relatively young market niches, more and often than not they will eventually want to expand and offer some form of their product or service to older consumers (or companies owned and managed by “baby boomers” or “Gen Xer’s”).

There has been no shortage of additional advice for Millennial managers of how to be more effective in overseeing their baby boomer subordinates.  Moats Kennedy recommended that Millennials make a special effort to seek input from baby boomers on how things should be done and should plan for more face-to-face meetings with baby boomers than they might normally be accustomed to given that Millennials have been brought up relying more heavily on e-communications via e-mail and social media.  Tennant reported on advice from McDaniel regarding tips for younger professional managers that included similar encouragement to Millennials to proactively seek advice from older workers, preferably in person, and involve them in decision making and praise them publicly for providing ideas that prove to be valuable.

Ladimeji drew from experiences in assisting companies with recruiting younger workers who often ended up overseeing older workers to provide some guidelines that Millennials might follow in order to effectively manage Baby Boomers.  For example, while a lot has been said and written about extreme differences between Millennials and Baby Boomers, younger managers should understand that research has shown that there are actually a number of similarities as to what workers want and expect from the supervisors, regardless of age or experience: challenging work, good pay, opportunities for advancement and learning, fair treatment and work-life balance.  Younger managers would do well to stick to these basics when establishing and maintaining relationships with their older subordinates.

In addition, while recognizing that there are similarities across generations, younger managers should also be aware that treating all workers the same will not achieve the desired results.  In fact, research has shown that Millennials, workers from Generation X and Baby Boomers have very different ideas and preferences in key areas that are fundamental elements of management style: work ethic and values, communications, motivational cues, feedback and rewards, collaborative style and leadership style.  Millennial managers, or managers of any age for that matter, need to be willing and able to adjust their management styles to fit the outlook and expectations of specific workers.  Specific illustrations offered by Ladimeji included the following:

  • While Millennials are generally more attuned to e-communications through e-mail and social media, younger managers may need to plan to spend time in face-to-face meetings with Baby Boomers and preparing more formal memos which older workers seem to prefer as vehicles for receiving instructions and assessments.
  • While work-life balance seems to be important and relevant to all workers, it appears to be less important to Baby Boomers as a motivational tool in comparison to the desires of younger workers.  Research shows that Baby Boomers place a higher value on hard work and productivity than other generations and Millennial managers should keep this in mind when setting schedules and designing incentives.
  • Regular feedback on performance is more important to workers from Generation X and Baby Boomers than it is to Millennials and there are also differences among generations with regard to money, status and titles.

All in all, the ingredients for effective collaboration across generations are fairly simple and timeless.  Older workers should approach the situation with an open mind, a bit of “curiosity”, energy and respect for others and younger supervisors should sincerely respect and appreciate the unique skills, experiences and competencies that older workers can bring to the tasks that need to be done in order for everyone to feel fulfilled and excited about the work they are doing together.  However, a cautionary note applies: if an age gap really appears to be too wide perhaps the best thing to do is for everyone to move on.  Of course, egregious cases may raise questions of legal liability for age discrimination; however, litigating the issues can be difficult and sap energy and time from all of the combatants.

Sources: R. Walker, “Getting Along With a Younger Boss”, The New York Times (August 9, 2015), BU1; M. Moats Kennedy, “Millennial Managers: Tips for Managing Boomers”, Moats Kennedy Inc. (July 30, 2012); D. Tennant, “Tips for Millennials on Overcoming the Awkwardness of Managing Baby Boomers”, IT Business Edge (June 6, 2013) (citing A. McDaniel, The Young Professional’s Guide to Managing: Building, Guiding and Motivating Your Team to Achieve Awesome Results (Pompton Plains, NJ: Career Press, Inc., 2013)); and K. Ladimeji, “Can a Millennial Manage a Baby Boomer?”, Recruiter.com (April 24, 2014), https://www.recruiter.com/i/can-a-millennial-manage-a-baby-boomer/ [accessed August 15, 2015].

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Supplier Management

Companies that contract with a significant number of outside suppliers should prepare a formal policy that describes the procedures for initiation and management of supplier relationships and one of the areas that needs to be considered is the scope of any compliance obligations that will be imposed on suppliers, a topic that is discussed in this report