TRIAGE AND THE EVOLVING BUSINESS—FIRST, STOP THE BLEEDING!

Many parallels can be drawn between the procedures and concepts used in the medical profession and those used by successful business advisors.

In a very real sense, a business has a “life” to be saved, lost, bettered or crippled. A business may also be thought of as “bleeding” (cash, people, customers), “suffering,” “in shock,” “recovering,” or “healed.”

The utility of this way of thinking is often apparent when a new business seeks help in applying assessments to their operations. Like a patient entering a hospital, the owner or manager may already have a diagnosis in mind: “We need to improve our management skills.” (Think, “I need something to reduce these chest pains.”)

Like the doctor in a responsible hospital, a conscientious business advisor will not automatically endorse the diagnosis, but certainly will not ignore the presence of the pain. Before delivering treatment, either professional will do a thorough examination and attempt to get a more complete picture of the total condition of the medical or business “patient.” The chest pain may be a heart attack, a broken rib, a pulled muscle or a neurological problem. Without a thorough exam, prescriptions and treatments are risky, at best. The business may indeed, need to improve its management skills, but if its monthly turnover is at 80 percent, it is unlikely that a management development program will meet with much success. In essence, by the time the cardiac surgery is finished, the patient may have bled to death!

In developing a plan for working with a new business, we use a triage approach. First, we learn all we can about the business: its strengths, weaknesses, pains, life-threatening conditions and chronic underlying problems. Then, we form our treatment plan using the (always limited) resources available to mitigate the gravest, most life-threatening process first; then the next most urgent and so on, until we can eventually deal with the important, but less urgent, issue of management development.

Once the “high turnover bleeding” is stopped, it is often surprising how additional resources and time can be found to deal with deeper, more complex issues. When your business is bleeding, it’s difficult to focus on long-term issues or solutions.

Emergency health care providers have a well-established toolkit and procedures to decide what to treat first and how. Your business deserves no less.

We suggest the following:

• To reduce high turnover bleeding, apply the equivalent of a pressure dressing to allow you time and resources to address other problems.
   
• Introduce an effective, easy and low-cost pre-hire screener that can be applied now! Improve the general quality of those you hire and you will have breathing room to work on more complex issues. You’ll stop bleeding!
   
• To improve productivity, increase job satisfaction and provide employee development and succession planning - stabilizing the patient’s vital signs - use a job fit measure or combination of measures to insure all of the parts of your business organism are in the appropriate position and functioning at full capacity.

Once those things are in place, you will have the luxury of making sure the business is in top physical and mental condition and may actually be able to apply that long-desired strategy of improving management skills!
 

WHAT LIES AHEAD ECONOMICALLY?
OPINION, BY A.J. SKURDAL,PH.D.

Life-altering economic events happen rarely. One should approach with caution a proposition that such an event is imminent. Nonetheless, several major traumas of global impact are possible during the next few decades. Successful investment and business management through any of these possibilities will require careful planning. Attentive, ongoing management that seriously considers the possibility of calamity before the end of the decade is now crucial. Currently foreseeable traumas include:

An Energy Crunch. The world’s supply of oil is being used up. Oil extraction in the U.S. peaked in the 1970’s and global extraction will peak soon, perhaps as early as 2005. Demand for oil continues to rise. There is no easy resolution to the conflict between rising demand and falling supply. Sometime later this century we will run entirely out of oil, but the impact of dwindling supplies will be felt soon.

Pension Plans Without Enough Money. Under-funded corporate pension plans threaten both profitability of corporations and retirement incomes of current workers. Under-funded government pension plans threaten credit ratings of local and state governments, pocketbooks of taxpayers who will make up the shortfalls and incomes of future retirees. As with any financial prediction, the extent of under funding depends upon assumptions brought to the analysis. As the problem unfolds, however, assumptions will be tested against reality; outcomes are likely to be unpleasant.

The End of Growth. The history of global growth is ending, but birthrates and life expectancies combine to create different futures for different parts of the globe. The low birthrates of Europe, Japan and Russia mean they will be the first to experience the shift from growth to no-growth economics. Life expectancy in Russia is low and falling, so problems will be obvious there sooner. Undeveloped nations in Africa and elsewhere have high birthrates with low life expectancy. Realizing the human potential of these societies remains a major challenge. China and the United States are perhaps the only bright spots, but with high life expectancy and low birth rates, both face challenges in providing social support to the young and elderly as the working population slips in proportion. The only model we have for a no growth economy is pre-economic: hunter-gatherer societies and subsistence farming.

Unfunded Entitlements. Social Security is basically an unfunded retirement plan. The trust fund has been loaned to and spent by the government, leaving taxpayers “on the hook.” Originally intended as a safety net, Social Security will likely become increasingly frayed over coming decades. Every five to ten years it will become a political “hot potato” as the rolling 75 year forward projection predicts a growing gap between tax income and payment obligation for the government. Medicare and Medicaid share the funding issues of Social Security, except medical costs have been escalating even faster than general inflation.

Global Warming. While specific causes still bring some debate, the simple fact of global warming is now established. Erratic, volatile weather and melting icecaps with rising sea levels are two apparent symptoms. As environmental changes play out over coming years, impacts will be challenging.

Terrorism. Sir John Templeton’s well known quote that the best time to buy is “when there is blood in the streets” may unfortunately become literally true. Whether you think of it as World War IV, Twentieth Century Warfare or simply terrorism, the modern world is learning to function in the midst of bloodshed. Countries such as Israel have demonstrated the possibility of building a viable social and economic structure in the face of ongoing terrorist attacks, but widespread global terror portends difficult times ahead. 

This is a sad list of unpleasant future possibilities. Other than the events combining to create the Great Depression, no other modern era has held such potential for unhappy outcomes. Successfully managing one’s business, and investments through the upcoming decades will require concentration, skill and good fortune. The help of a professional planner who understands one’s personal and business goals and style, as well as external factors, will be prudent.
 

IMPROVING OPERATIONS AND BOTTOM LINE OF A PRIVATE SECURITY FIRM

The Bureau of Labor Statistics offers the following description of the security guard’s job: “Guards, who are also called security officers, patrol and inspect property to protect against fire, theft, vandalism, terrorism and illegal activity. These workers protect their employer’s investment, enforce laws on the property and deter criminal activity or other problems. They use radio and telephone communications to call for assistance from police, fire or emergency medical services as the situation dictates.”

The field is described by one worker as “a lot like being a pilot—hours and hours of working boredom, punctuated by infrequent moments of sheer terror.”

As a successful provider of private security guards, a small regional company has become an industry leader, respected by peers and clients and is experiencing steady, controlled growth.

In an industry plagued by turnover estimated to average as high as 300 percent per year (J.R. Roberts, Security Strategies), relatively low wages (national average is less than $12/hour), 24-hour work schedules and the real possibility of danger, they have managed to build a very stable workforce, with an annual turnover percentage of only 22 percent! Also, they have avoided the headline-producing missteps of some of their competition. Consider these headlines, generated last year by other security companies:

• “Schoolteacher robbed and beaten at mall while security guards meet in food court!”
   
• “Guard smokes crack, burns factory to ground!”
   
• “Two security guards face off in shoot-out: 14 shots, no one injured!”

Given that this company has avoided the negatives, keeps their clients and has an enviably low turnover in their ranks, it might be easy for the owners to rest on their laurels, happy just to maintain a comfortable and profitable position. On the other hand, that kind of thinking is not what put them in this good situation, and they are highly motivated to continuously improve.

At the end of 2003, the owner/manager of this company calculated, even with their low rate of 22 percent, turnover cost the company nearly $80,000 over the course of the year! They decided to attack this problem with the Step One Survey IITM prescreener, reasoning it would not only impact turnover, but further lower their risk of hiring someone who might produce one of those ugly headline incidents.

Through the 2004 calendar year, the SOS2 was used to prescreen applicants for security guard positions and the interview guide was used in the pre-hire interviews. The results were striking. Even with the very low comparative rate of 22 percent in 2003, the screening and interview process further reduced turnover to only 17 percent in 2004. This reduction in the base rate of turnover produced a savings of over $14,000 with an investment of less than $2,000—a return on investment of seven dollars for each one dollar spent! The moral of the story is obvious. Even when you’re small, even when you’re doing a lot of things right, there’s money to be saved by doing things better! What’s more, this owner does not lose much sleep asking the question J.R. Roberts has adopted as a company motto: “Quis Custodiat Ipso Custodes?”— “Who will guard the guards?”

"People have freedom to make choices,but they do not have freedom from the consequences."