Employee Engagement and Corporate Profitability

Recently Roy Valee, CEO of Avnet, was in Richardson, Texas on business. I had the pleasure of attending an intimate group luncheon in which Roy was the keynote speaker. As hoped, Roy shared his views on a wide range of topics as only a CEO of a $19 billion global company can do. Discussions touched on predictable topics such as global growth and its challenges, technology trends and predictions important to the core business of Avnet, macroeconomic trends, politics (yes, even politics), and management approaches.

But before I go further, here is some quick background information to keep in mind as you read this blog:

• Avnet has been voted No. 1 in its industry on Fortune magazine's Most Admired Companies 2009, 2010 and 2011
• Avnet has over 16,000 employees located in over 300 worldwide locations
• Avnet products are sold in over 70 countries
• Avnet’s revenues exceeded $19 billion for their 2010 fiscal year

It should be clear that Avnet is a complex and sophisticated company to manage. An obvious key question is how you continue to manage and grow a company as diverse and as large as Avnet.

During the luncheon, Roy was asked to identify the top 2 – 3 items he was going to personally focus on over the next 5 years. His answer; “The same 3 items I have focused on for the last 5 years”. They were:

• Value-Based Management
• Culture Proliferation
• Employee Engagement

Interestingly enough, corporate profitability was not in the top 3; especially interesting given Avnet is a publically traded company. The implication being company profits are a by-product of focusing on other important areas in an organization. Roy stated, “Inside of Avnet there is an overriding focus on improving service and support rather than a purely economic efficiency focus”. But don’t think for a moment that Roy is not acutely aware of the need to continuously improve the company’s operational efficiencies also.

On the topic of value-based management, Roy discussed how employees have embraced the concept of return on capital employed, and they continue to contribute considerable improvements to Avnet's financial performance and cash flow.

According to Roy, without the right company culture and with 16,000+ employees, it is impossible for employees to make the right decisions to grow a company of Avnet’s size purely on a “rules based” decision making approach. Inculcating the entire global organization with the right culture is critical. Embracing a performance and values based culture of excellence is another key to improving company performance and profitability.

It was the topic of employee engagement that generated some obvious passion. When Roy took over as CEO, an internal employee doctrine existed which stated; “Attract, Develop and Retain”. But as Roy put it, who wants to retain disengaged employees. So they changed that doctrine to “Attract, Develop, and Engage”, and then executed on that changed doctrine.

While not specifically sharing how Avnet measured employee engagement, he indicated his belief there is a clear and direct relationship between Avnet’s earnings per share and employee engagement. In fact, Roy keeps a chart that tracks these two measurements and their relationship.

Equally important, Roy emphasized that employee engagement is a never ending journey. You never actually arrive at the destination of 100% employee engagement. Further, the challenge of employee engagement continues to evolve as a workforce of different generations and ethnic backgrounds, and changing business challenges present themselves.

From a personal viewpoint, I strongly agree with Roy regarding his employee engagement philosophy. Our experience over the years as an IT recruitment company has also shown that the more personally engaged an employee is, the more productive they are; and frankly the less management they require. But never forget it is the responsibility of the company’s leadership team to set the right example and structure to best develop and nurture employee engagement.

Wayne Rampey

Vice President

The InSource Group

www.insourcegroup.com

The InSource Group Launches Federal Division Website

The InSource Group now has a website that targets the federal government at www.insourcegroupfederal.com. This site showcases The InSource Group’s capabilities so that government agencies can easily find the information they need and quickly contact the appropriate resources.

As a GSA IT Schedule 70 Contract Holder, The InSource Group has the experience and resources to address the IT needs of government agencies. The InSource Group provides clients with a highly qualified IT partner who has extensive experience in providing a complete spectrum of flexible solutions. The InSource Group currently provides information technology support services to clients in 29 states, and is a SBA Certified Small Business in NAICS codes 541511, 541512, 541513 and 541519.

For more information visit The InSoruce Group Federal Division website at www.insourcegroupfederal.com.

Rock Stars: The InSource Group Kicks of 2011

Rock Stars? Movie Stars? The InSource Group “kicks-off” 2011 like an award show that rivals anything Hollywood could think of.

On a brisk Dallas winter morning, it was nice to be welcomed at Royal Oaks Country Club with warm eggs, toast, bacon and hot coffee. As the coffee hit the blood stream so did laughter as we were reminded of all the fun times we had during 2010 by a montage of photos on the big screen paired with a upbeat mix of our CEO’s very own “mash-up” of Music. Once the lights dimmed, it was a mathematicians dream as we went through numbers and really got too see everyone’s hard work pay off in a numerical sense. But, no matter how good the numbers look on the big screen it was time to get back to the fun core of who we are with T.I.G Jeopardy!!!!

However, the best part of our Kick-off Meeting was yet to come: the announcement of who is going to Cancun for our 100% club and the announcement of a appreciation dinner for our Admin staff at the Crescent Club in Dallas.

Kicking off 2011 was fun, but only because of all the work we did in 2010. We leave the meeting focused, goal orientated and looking forward to tackling 2011 the same way we do every year: as Stars.

It’s Good to be in DFW!

Dr. Michael Cox, Director, William J O’Neil Center for Global Markets and Freedom presented to the Dallas Citizens Council on Dec. 6, 2010. Many of you may remember that Dr. Cox is the past (and only ever) Chief Economist of the US Federal Reserve.

The topic was “The Ascension of DFW”.

Just about anyone employed in the Information Technology, Engineering or Scientific fields will agree that Texas was the place to be during the recent economic turmoil, with DFW clearly the metropolitan area to live in Texas.

So what has contributed to DFW’s success and what can we do to sustain it? The entire report can be found at “The Ascension of DFW”, published by SMU Cox School of Business. Here are the highlights of some of the most important points,

First, Texas is a state that maintains one of the world’s freest economies as measured by The Fraser Institute. Texas ranks second only to Delaware, but with far greater economic output. The two most important measurements of free economies are low tax rates and the avoidance of unionized employment.

When companies relocate (whether headquarters or otherwise) or expand existing operations, management reviews both short and long-term benefits in terms of location. Texas is one of only 7 states with no state income tax, and only one of 5 states with no corporate income tax. Texas does levy a general business tax, but it is relatively mild at less than one percent. Over the past 15 years DFW employment grew from 2.3 million to 2.9 million, second highest growth in the nation. Also, DFW has more large corporate headquarters (58) than any other U.S. metropolitan area, including 24 in the Fortune 500.

The Texas labor market is also relatively free of impediments that discourage job creation according to the report. Partly due to the right-to-work laws, which prohibit forcing workers to join unions, Texas has only 6.2 percent of union membership in private sector jobs. Compare that to 27.5 percent in New York, and 17.8 percent in California.

The report further states that the high degree of economic freedom gives homegrown businesses room to grow. It acts like a magnet for relocation for both companies and job seekers coming from other states. Like proof? Between 2004 – 2008 California surrendered more workers to Texas (tens of thousands) than any other state. Texas on the other hand had a net migration FROM Texas to all states of less than 400 in the same time frame. And finally, Chief Executive magazine named Texas the best state for job growth and business in 2009, and California the worst.

Second, DFW has embraced globalization, DFW based companies are benefiting and profiting significantly from an increased global client base. While competitive globalization can bring traumatic workforce changes in early stages, successfully navigating those challenges can bring significant returns. Based on the world’s population, 21 of 22 prospective customers reside outside the United States. Here are just a few successful examples of DFW companies leveraging the global client base:

Company	Year	% International Rev.	Year	% International Rev.
T.I.	1998	67.7%	2008	87.6%
ENSCO	1998	45.3%	2008	79.2%
Blockbuster	1998	20.6%	2008	32.1%
Flowserve	1998	41.9%	2008	65.4%
GameStop	2004	0%	2008	26.6%

Mary Kay is privately held and does not release public revenue. They do however sell cosmetics in 35 countries, a clear example of embracing global customer opportunities.

In 2009 SMU’s Caruth Institute for Entrepreneurship identified DFW’s fastest growing emerging companies. More than half the Dallas 100 Class already has ties to foreign markets.

Third, DFW brings together businesses and workers well suited for success in the up and-coming services economy, both at home and overseas. A well-educated and trained work force is the foundation to keep a good thing going. At the end of 2009, service producing industries accounted for 83.2 percent of DFW’s private sector employment, up from 76.8 percent at the beginning of 1999.

According to Dr. Cox, the 21st century’s engine of growth will be globalization. America’s edge lies in specialized services; job creation for a well educated workforce. DFW must continue to attract the quality and sufficient quantity of educated workers to continue to propel our local economy. Dr. David Daniel, President of The University of Texas at Dallas (UTD) echo’s this position. Pursuit of Tier One University Research status by Texas based universities is key to supporting this effort.

As an IT staffing company, the InSource Group has our own anecdotal evidence. In business since late 1992, our client base has changed significantly. Several top revenue producing clients in 2001 no longer do so. Some are still in business, but a number who did not successfully manage the shift in global competitiveness are no longer in business. We have also witnessed (and benefited) from many of our client’s rapid growth due to increased global sales. Their success also brings the challenge of securing talent to accommodate a shifting skill set, both at the individual contributor as well as management level to continue their growth.

Dr. Cox concludes with the projection that DFW can look forward to many generations of continued success, but only if we accurately track the global competitive changes, and enact state and federal policies that support maintaining a global leadership position.

Wayne Rampey

Vice President

The InSource Group

www.insourcegroup.com

Federal Policies Stall Small Businesses

By James Thompson, President and COO of the InSource Group

(Recently published as a 2 part article in the Fort Worth Business Press)

It’s a widely held view that putting people back to work will help our economy get back on track. But where are the new jobs going to come from? Small businesses have traditionally been the primary drivers of job creation in the United States, however recent employment statistics show that business owners are getting by with fewer employees.

That prompts three questions:

• Why aren’t small businesses hiring?
• Why aren’t more small businesses being created?
• And is the environment for starting a business now different than it was a few years ago?

(read more...)

New Job, Clean Slate

It has many names; a “do over”, a 2nd chance, a 2nd life, or maybe even forgiveness.

Most people use these terms when describing action they wish they could change in hindsight. But those terms can also reference a more positive experience; the opportunity to start with a clean slate in a new job. The challenge and the opportunity will be how you write the story of your performance and career on this clean slate.

Our experience as an IT staffing company has given us the opportunity to see the “clean slate” experience for countless professionals.

You are typically hired based on a combination of factors. Generally speaking those factors include past performance, education, years of experience, industry knowledge, level of responsibility, compatible personal chemistry, and others. More importantly it will be based on the belief that you can perform at a higher level than your interview competition, and that you will positively contribute to the success of your new employer.

So what are some of the more important factors you should consider to increase your success with your new employer?

First, never forget that actions speak louder than words. You can wax eloquent all you want, but your employer hired you for results. You can only talk about what you want to do or how you are going to do it for so long.

Second, have the outline of your game plan in place when you start. Let’s call it your 90 day plan. It is hard to have a great ending, if you do not have a great start. Sales professionals typically have to do this when they start in a new sales role, but having a game plan is as valuable whether you are a Business Analyst, Dir of Development, CIO or President. The duties and goals will be different, but the end game is to improve your performance.

Third, there is a difference between a “can do” attitude, and a “will do” attitude. Winston Churchill once said, “Sometimes doing your best is not good enough. Sometimes, you must do what is required.” Doing your best and failing may still earn some respect from peers or even your manager, but it is not what you were hired to do. Figure out how to succeed in your new job above the expectations of your manager.

Fourth, identify a good mentor in your new firm. Mentors take many different forms, and they are not necessarily your immediate manager, or even your manager’s manager. You might even have more than one mentor. Identify professionals who have clear expertise and the respect of the company in specific areas you wish to improve. Every successful CEO will tell you that at some point in their career development, they had a great mentor who contributed to their development and success.

And finally, remember career success is almost always a collaborative effort. Unless you are competing in a solo sport or a one person company, your actions influence the actions of others. Individuals who give more of themselves while succeeding in their role develop stronger supporters and relationships than those who are clearly only concerned with their personal success. Great leaders, and not just good individual performers lead great companies.

Wayne Rampey

Vice President

The InSource Group

www.insourcegroup.com

Money vs. Title and Authority

Over the years, The InSource Group has helped clients staff technical positions ranging from individual contributor to SVP and CIO. One of the more interesting (and typically complicated) questions asked is: “How do I weigh the importance between job title, responsibility and authority, and money when making a job change?”

Since there is not a simple right or wrong answer our response is normally; “It depends”.

This question typically arises when someone is offered a position that has a more senior title and apparent increase in responsibility, yet does not have an increase in salary. Sometimes individuals are even asked to accept a lower salary than their current level for a “ground floor opportunity”.

In an ideal world all components of the job align correctly, along with their appropriate weight of importance. But we know that is not always the case. Titles are normally the tangible indicator of job responsibility. But authority is really the critical basis for success, and must come hand in hand with responsibility.

Books have been written on managing careers, and this is not intended to be a substitute for a more complete approach. Here are a few thoughts however to help you analyze the situation when presented with the Money vs. Title and Authority job offer.

First, at what stage are you in your career development? Ask yourself:

• Is it more important to maximize current income, or are you at a stage where responsibility and authority are more satisfying to you in your job than just money?
• Is the position a high risk position regardless of the role? If the new role does not work out, how does this job look on your resume? Does it really add to your long-term marketability, and does the title and role look legitimate on your resume based on past career progression?

Second, does the new position build important and needed skills for future advancement? Consider these aspects:

• With an increased title and role should come increased responsibility AND authority. Lacking authority to make critical decisions in the new role can lead to either premature departure or deprive you of being able to accomplish the tasks you were hired to perform.
• Be careful not to judge increased responsibility primarily on staff headcount. Managing a staff of 20 in a company with complete tactical and strategic leadership duties may be more important to you than managing a staff of 40 without having input on the direction of the organization.

And finally, be sure the “pull” to accept this new position is greater than the “push” to depart from your current role.

Don’t let the big title blind you to any warning signs! Accepting a new job without performing all the requisite research, reference checking, and due diligence could lead to a decision founded on regret rather than excitement for the new challenges ahead. Remember, there is a huge difference between an opportunity requiring transformational leadership and one where it will take a miracle to accomplish the goals.



Wayne Rampey
Vice President
The InSource Group
www.insourcegroup.com