Since an article I wrote in June of 2009 called “How a foosball table can kill your startup” is still sparking attention and conversation, I think the time is ripe for me to expand on the topic. Yes, I still believe that tchotchke “benefits” do nothing but waste money.  Instead, use your resources to attract new, retain your best talent, and improve your team’s happiness.

Here are additional issues for us to consider:

1. If we tracked the usage of Guitar Hero setups, foosball tables, pinball machines, etc., we would see that utilization of them is not really worth their cost and the rent we pay for the space they take up.
2. Often the toy/activity choice we make is driven by what we personally like. I highly doubt anyone actually thinks about how employees from other demographic groups perceive them. Therefore, we unconsciously create an environment of discrimination.
3. Innovation happens outside of the walls of our offices. Encourage your employees to get outside and network with their customers and spend more time with their families.
4. Employees are not stupid! We may be able to attract them with these “benefits”, but the novelty wears off quickly. The deeper we can tap into satisfying the needs of our employees, the more likely they will stay with us. Maslow’s hierarchy of needs is often ignored at our own peril.

So what do I suggest?

1. There is a MUCH higher ROI on well-being focused benefits. E.g. stock your office with free healthy snacks and drinks. Motivate staff to engage in group sports. Spend the budget on group company outings organized by the staff themselves. As an operations person, I always focus on keeping my team healthy, happy, motivated, and engaged.
2. Spontaneous rewards have tremendous ROI! Focus on rewarding exceptional performance the moment it happens (not months away during performance reviews). I have personally seen it do wonders to morale.
3. Enable your staff to be able to work in other locations from time to time and empower them to spend more time with customers (existing ones or prospects).  This takes a lot of planning and thinking through to execute well, but it has fantastic ROI and increases innovation and employee loyalty.

NOTE: the dynamics are a lot different in creative industries like industrial design, advertising agencies, marketing and communications companies, etc. Talent employed in these types of companies have different needs and motivations.

About the author:
Apolinaras “Apollo” Sinkevicius is a business operations leader with 12-year track record of building scalable and capital-efficient operations for technology and professional services companies.
He specializes in business operations, corporate culture, human capital, and technology issues.
To learn more about Apolinaras “Apollo” Sinkevicius please visit his site TheOperationsGuy.com

Similar Posts:

• Keeping entrepreneurs and CEOs out of jail and an early grave
• How a foosball table can kill your startup
• Beware of corporate cockroaches

Like many of you in the startup world, I have read and signed my share of non-disclosure agreements (NDAs). I have reviewed, edited, and sent hundreds of them in my career, but I am yet to come across one that really serves anyone but the lawyers who charged dearly to write it. So, why don’t we stop wasting our money on having attorneys fill in one of their NDA templates, and write one that is understandable to everyone.  Yes, let your lawyer look it over, but don’t allow him/her to insert any words your grandma would not understand. Here is how I would write my NDAs:

Non-disclosure agreement

Purpose of this document

Products, services, methods, technologies, etc. we work on in our company are considered to be a trade secret; therefore, we need to protect our “first to market” and/or other competitive advantages. We may later choose to patent, trademark, or otherwise protect our work, but for now we will protect it using trade secret status.

Who is covered by this document?

• If your signature is at the bottom of this document, you are subject to this NDA.
• If you are working on any projects for us and your superior signed this document when we engaged your company, you are also covered by this document.

How long this NDA is effective?

• This NDA covers you for the entire time you are engaged with us in any way plus X years after we sever our relationship.

What is covered by our NDA and what can you do to comply?

• If you think something is covered by the NDA, it very likely is. Ask someone in charge first before talking about it outside of our company.
• If you can’t find it in Google search or Wikipedia… assume it is covered by our NDA.
• Take reasonable and/or common sense efforts to help us keep anything subject to our NDA a secret.
• Help educate other members of your team about what is subject to our NDA.
• Keep everything related to product development, planning, strategy, and R&D as a secret from anyone who you know has not signed our NDA.
• Do not use lists of customers, vendors, employees, components, etc. for any other purpose than what it is intended for and only for the benefit of our company.
• If you get sued or subpoenaed to testify and you may need to talk about anything covered by our NDA, please notify us first, before making any statements. We are afforded by law the right to protect our secrets and we will be engaging an attorney to help you on anything related to what is covered by our NDA.
• Any products or new methods and techniques you developed here are our property. Ask first before using them somewhere else.
• If you are no longer affiliated or doing business with us, but would like to talk about anything you saw inside, please ask us first.

When is something not (or no longer) subject to NDA:

• You can prove you knew it before you signed this document.
• You can prove you learned about it from an outside source not related in any way to our company.
• You have seen or heard our marketing, PR, or CEO talk to journalists and bloggers about it.
• There has been a provisional or full patent granted for it.
• Our executives communicated to the team it is OK to talk about it.
• A judge in any level of the judicial system rules that it is against the law to keep particular information secret.

Signature:

Signature of a witness:

• Put your software developer or R&D team in a separate room with a big sign on the door that says: “Anything discussed in this room is subject to the NDA”.
• Train your team to label ANY document that they even suspect would be subject to the NDA as “Confidential”
• Have a “no personal email or browsing” rule in the areas of your office where you are working on anything subject to the NDA, but create an area where your team members are more than welcome to take a break, hit Twitter, Gmail, or check out how their bid is doing on Ebay.
• Desktop virtualization is cheap. If you let employees use their personal equipment for work, than you should pay to install virtual desktop applications and have them do their work on a VM (virtual machine).

P.S. Folks at Orrick, Herrington & Sutcliffe LLP. were kind enough to the entrepreneurial community to release entire startup kit of required legal documents. From NDAs to incorporation papers, stock option to contractor agreements, it is all in their Start-Up Forms Library.Similar Posts:

• Disaster recovery planning and business continuity for startups
• Not providing employees with healthcare insurance is absolutely reckless!
• Doing collections the startup way!

HR, as a profession, is on its way out. Those who claim to be “good old school HR professionals,” should start looking for a new career or drastically change their thinking. In contrast, Human Capital professionals who “get it” are on the rise. Companies are no longer willing to pay for simple paper pushers or resume screeners in HR – they want results.

I started my career in the entertainment industry. “HR” in that industry consists of A&R (artists and repertoire) professionals. Because their success depended solely on the revenue the artists they discovered or poached from another label produced, all of them were in tune with both the needs of their companies and the market. Retention of talent was also part of the equation. One notable example that the general public would recognize is Clive Davis, who discovered Alicia Keys and Whitney Houston, among other talented individuals. Mr. Davis is directly responsible for the millions of dollars these artists are still producing for their labels. Do you think he would still be in the business, if he did the job like so many people in HR?

I have met and worked with many leaders who no longer want HR in their companies. They want Human Capital, people who keep turnover rates down, sell the organization to every candidate, and help to shape the corporate culture and improve profitability. They want “Clive Davis types”, not someone who likes to have lots of certification abbreviations after their name. FMLA, EEOC, and the other alphabet soup components of compliance can be done by anyone who can read. I worked with several administrative assistants who handled it just fine with only minor guidance and supervision. Avoiding legal liabilities associated with employees is a corporate culture issue – if you need HR to “protect” your organization, it’s time to institute some drastic changes. Employees, who are treated like adults, with fairness and respect, don’t sue companies.

It is time to shake HR off their pedestal, institute accountability, and help the talented ones adapt and become Human Capital professionals. Here are the top 3 changes needed to bring accountability:

1. Every person in charge of finding talent for the organization (including recruiters, HC associates, and hiring managers) must be judged on the revenue attributed to each employee they brought in. Every job has a quantifiable impact on the bottom line, therefore accountability will lead to better ROI.
2. These same people also need to be held accountable for turnover rates. Recruiting new talent is expensive. It is much cheaper to keep good employees.
3. Human Capital professionals should not be isolated from the rest of the company.  They should be in the trenches and front lines, and listening to the customers, so they know what real issues face the organization.

Many blogs and forums are abuzz about the poor experiences people have with HR departments. Next to attorneys and debt collectors, HR has developed one of the worst reputations out there. The current economy is not helping, because a plethora of candidates have made recruiters and HR personnel feel like they are gods, rockstars, or geniuses. This has gotten to their heads and many are getting lazy, looking for shortcuts, and missing great candidates. Time for a reality check!Similar Posts:

• Can’t retain talent at your company?
• Want your company to survive? Just say NO to hiring specialists!
• Keeping entrepreneurs and CEOs out of jail and an early grave

In the last 12 years, I watched the market change as often as a teenager’s mood-swings. What was hot yesterday is old news today. From technologies to methodologies, change is constant and accelerating with every passing day.  No one is immune, be it startups or the big boys.

The survival of organizations depends on flexibility, adaptability, and sustainable costs. So why do so many companies still hire specialists?  This is the most expensive route to pursue and I see several problems common to such a human capital model:

• The market is run by supply and demand, so chasing the few people with a specific skill set is very expensive. Add the higher than usual salaries/rates, signing bonuses (yes, according to my recruiter friends, they still do exist), and recruiting costs, and profitability starts getting hurt.
• Let us not forget that you need a collection of specialists to do the job, since most don’t venture outside of their specialty.
• The vast majority of specialists are not methodology/technology agnostics. The heavy personal investment that comes with learning a particular methodology, technology, etc., makes most (I have met) not capable of being impartial and recognizing when other approaches could produce better results.
• Once the current “bleeding edge” becomes passé, companies are spending again on the “replacement costs” for a new crop of one-trick-ponies.

I am sorry, but I am not surprised at how many companies are going under now with their armies of specialists. They can’t adapt fast enough! Entrenchment leads to one thing – the inability to serve the changing needs of the customers.

So what should companies do? Here are several suggestions I have come up with after countless interactions with entrepreneurs, human capital professionals, and leaders of large organizations:

• We are better off hiring and nurturing employees who are willing to constantly learn from others, expand their knowledge, and stay relevant for the organization. Yes, it is VERY hard to hire such talent. Yes, we all need to roll up our sleeves and look for people who are inquisitive, curious, and non-complacent. It goes far beyond creating job descriptions and being able to filter out resumes. One must develop the ability to read people, or get the heck out of recruiting and hiring.

• Hire people who are “best practices/solutions agnostics”. In order to stay agnostic/impartial, one must not be over-invested in one particular skill area. Hire for the breadth of knowledge, not for a rigid skill set.

Individuals who fit the mentioned characteristics will be able to adapt with the organization when change is needed.

This is the case for organizations of ALL sizes. Startups, small, and medium businesses are very vulnerable to the “addiction” to specialists. Smart larger organizations have long adopted job rotations, lateral moves, and other techniques to keep their talent well rounded, which definitely has contributed to their growth. I have seen several large organizations who don’t hire MBAs (there is nothing wrong with MBAs, unless that is all the breadth of education they have), look for diverse majors, test for ability to think creatively, don’t allow long tenures in the same job or department, and rotate staff trough different functions.

So, in this era of constant change, let us not get caught with our proverbial pants down and get behind the curve. The age of one-trick-ponies is over.

Photo credit: Carsten TolkmitSimilar Posts:

• What to look for in a business partner
• How to build your startup core team
• Time to make HR accountable! The rise of Human Capital professionals.

I am often asked what I do for a living and since I am not a PR or marketing professional, describing what I do to an “outsider” is challenging at times. I can hide all I want behind my resume and a great group of people I have worked with, but in order to further enhance my network, I must “translate” the role of a business operations leader to those in other professions.

Reading Jeremiah Owyang’s excellent article  ”What’s Your Career Mission?” was a great kick-in-the-behind that inspired me to write down my Career Mission and the Value I bring to the table.

My career mission is to use my business operations, talent management, and technology background to build and maintain the backbones of sustainable growth companies.

So what puzzle pieces comprise my Career Mission and Value?

1. It all starts with people.  Build the right environment, bring in talent, and retain your team by treating them fairly and helping them grow.

2. Without customers we are nothing.  Act as a conduit between all levels of the company so everyone hears and sees the customers and never loses sight of the hand that feeds them.

3. Sharpen focus by clearing the path.  Help those with the vision and the big picture of the company to stay focused on the mission by minimizing day-to-day distractions.

About the author:
Apolinaras “Apollo” Sinkevicius is a business operations leader with 12-year track record of building scalable and capital-efficient operations for technology and professional services companies.
He specializes in business operations, corporate culture, human capital, and technology issues.
To learn more about Apolinaras “Apollo” Sinkevicius please visit his site TheOperationsGuy.com

Similar Posts:

• 12 rules of business I learned from my father
• Why early stage startups don’t need business consultants
• We don’t need marketing – we need customer anthropology

During my career I have become very successful at keeping the number of uncollected accounts to a minimum (in one company we had only one invoice we had to write off). Collections definitely rates in the  top 3 of  the most undesirable duties, but there are ways to minimize the pain. The best way to do so is by implementing tough practices that send a message out there: “we are serious about delivering what we have promised and we expect the same from you”. Here are some of my techniques:

1. Everyone who “touches” the client, from your admin to the VP of Sales, CFO to CEO, account exec to those working on the deliverables, should be involved in collections. Many times the slow payers will give in, because they realize that the entire organization knows they haven’t paid. When the client calls to talk to a project manager, the admin should tell him/her that the account is overdue and go through a procedure (or send them a central contact for collections) to get a firm written commitment to when the payment will arrive.  Also have them fax a copy of the check that is going into mail. The client does not get to talk about what they need until your company gets reassurance about payment.

2. Sales people should not get their commissions or bonuses until the client’s check clears the bank. They should be the first ones to call the client the morning after NET(insert your term) is an hour overdue. This stops them from making risky deals.

3. Do not provide the final deliverable until the payment has cleared. PERIOD! As a startup you can’t afford to be a bank. No pay = no product, no source code, no copyright assignment, no admin password to the site, no final document, no service call. Make sure this condition is in your contracts! This is the one condition I never let anyone strike out of contracts.

4. Make sure that a fixed bid/flat fee project requires a deposit before the work commences.

5. Until you are a mid-size company , CASH IS KING! Don’t take deals that have long A/Rs. I am never OK with anything longer than NET30. Again, startups are not banks.

6. If a client is within driving distance and they tell you they will mail the check today – send someone from your crew to pick up that check NOW! This is a good way to call them on their BS and get paid. I always send the biggest dude I got in my office or go myself (I used to be a bouncer).

7. If all goes bad, sell the debt. Let the collectors have fun.

At the end of the day what matters are your company, your employees, and your good customers. You can not allow all of them to get robbed of your resources by a bad customer.

(Now that I have given some of my tricks, you will have to make me your head of Operations!)

If you have some techniques and policies that have worked for you, please share in the comments section.Similar Posts:

• Keeping customers and finding new ones in a bad economy
• Union mentality and lean startups can’t co-exist
• Managing freelancers, contractors, and suppliers in the startup world.

So, you are a newly-minted CEO of a company. You got your investors to bet on you and now everyone wants to see how that roll of the dice will play out. You know what a COO (Director of Operations or Ops person) is, but if I asked you what exactly his/her “magic” is, I know I will hear plethora of musings. Close… but no cigar. That is too bad, because your operations head and his/her team are the backbone of your organization. So, let me enlighten you with what drives us, and why we are probably the most valuable and loyal members of your executive team.

The best way I help others understand the value of an operations expert is by telling a story. Back when I was a 20-something punk full of ego and bravado, I was working for a great company as an operations manager. Jan was my boss and mentor. She never spared me candor or sugarcoated anything, and I felt respected by her. But, at the same time I felt that I had not received enough praise and back-slaps on my shoulder (refer back to my age at that time). So one day I strolled into her office and after making a case for all I had done for the organization, all those 80+ hour weeks, and [fill this with stuff for a 15 minute monologue], Jan took off her glasses, looked at me and said something that still rings in my ears. She said:” You know what is your ultimate recognition? No one knows what things you make happen every day! If they do, you failed! Your job is to catch someone from messing up, your job is to make sure everything is running smoothly, your job is to clean up after you know what hits the fan. Your job is to make sure the government is happy, and most importantly is to make sure your people think that this is the best company EVER!” And I got it! Smart leaders of companies know the value of the COO, Director of Operations, or operations manager.

Operations people are the “moms and dads” of the companies. The best ones are “Swiss army knives” with battle scars and ingenuity. At the end of the day, the job of a true operations leader is to make sure that no problem gets big enough to become worth reporting to the CEO or the board. It is that plain and simple. The best ones will be there no matter what time of the day, with their army of co-workers, vendors, and contractors. When things need to be done, they will be there in the trenches. One thing you will never hear from head of ops: “that is not my job”.

We find no higher high than knowing that our clients are happy, our staff are not looking when that “cliff” is for their equity, and our CEOs is sleeping well at night. Limelight is for the CEO, we are the Secret Service making sure the CEO does not get taken out.Similar Posts:

• Difference between “My CEO” and “Our CEO”
• If you are in a startup and have a title, you are not doing enough work…
• Get over yourselves! Things are not as bad as you paint them!

Last November I was interviewing with a very stealthy (for a very good reason) startup in Boston. During my conversation with a co-founder Ellen (she is very stealthy too, so I will skip last name), I asked her what her title was. Her answer was something that has stuck with me to this day. She said: “if you are in a startup and have a title, you are not doing enough“!

In my career I have worked only for very rapidly growing startups and mature small businesses, well except for a short stint with GRAMMY and Polygram Records. When I think back about all the things (jobs) I have worked on in my career, her statement helps me now encapsulate and explain what I do. I clearly remember days when 6′5″ truly yours gentle giant here hanging from ceiling supports, because the ladder was not tall enough. I had to hang on one hand, while the other was feeding cable into conduit. The next morning I had to be in a sales meeting with a client and than run payroll in the afternoon. Or how about the times when I may be in my best suit, but my colleague’s workstation needs to be revived and I am under the table liberating it from tangle of cords. Flipping between these responsibilities is natural to me and I could care less what title you attach to me. COO, Dir. of Ops, CIO, Dir. of IT, Head of Ops and IT, Ops Manager, Partner, Principle, and etc. etc. etc. At the end of the day what matters is if company is in better place, because what I have done.

Ellen’s statement also had another important point. I see this every day with young and even more mature startups. So many leaders get caught up in their egos with needless large titles. This thinking leads them to not only put themselves in a box (“hey, I am a CEO, I should not be helping the team clean up after company BBQ), but also hurts the company, because others are in the trenches, while this “general” is sitting up in his ivory tower. Battles are won fastest with leadership in the front lines. You are much more likely to give 200%, when the founder of the company is right next to you burning the midnight oil. I would venture to say that the higher you are in the leadership role of the startup, the more you should not forget doing the lower level jobs from time to time. You had a brainstorming meeting with pizza, you should be the first one to start cleaning. Moving the team to new digs, you should be the first one with dolly in your hands. Laptop crashes? You should be right there with your tech guy making sure he has everything he needs pronto!

Some may say that you need to have a title in the outside world. If you have a lot of value to add with a person you are meeting, trust me, your title will have zero impact. I have seen business cards of some very influential people with no titles. They saved that spot for cell phone number. Investors will not put money into your company because you have a bunch of people with titles. They will give money though, if you can show you will be cash positive, because everyone is being utilized to the fullest, and there is no needless spending.

So in summary: skip the big titles, focus on quantity and quality of the impact you will have on your team and your company.

EDIT (12/25/08): Just came across an article with a perfect example of how a “no title”, “no org chart”, “no egos” environment works. Read about it in the Evolving Excellence blog article  ”No Titles Except “Plant” Manager”.Similar Posts:

• Dangers of Big Titles – post by The Operations Guy
• Random lessons from 12 years in startups
• Union mentality and lean startups can’t co-exist