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Monday, December 27, 2010

Doomsday Retirement Scenarios

If you're older than 30 or ever attended a 401(k) educational seminar you've heard it. How we're not ready for retirement. How we haven't saved enough and how you need some astronomical amount of money you can't possibly save in order to afford retirement.

While few people are saving enough, period, there are problems with the doomsday scenario. It is based upon an unrealistic retirement age established in 1935, manual labor, and the idea of employer pensions, now mostly a thing of the past. With no pension and a traditional retirement age, how do you possibly retire?

Traditional retirement savings ideas are based upon the "three-legged stool" notion; your retirement is financed by your own personal savings, your private retirement benefits (pension or 401(k)), and Social Security. The doomsday Sayers project that without a pension your 401(k) and Social Security are all you'll have, and you'll be short.

Well, if you perform manual labor and have no alternative career, and you plan to retire at age 65, they're probably right. Here's why that won't happen.

The retirement age of 65 was established in 1935 with the original Social Security Act. At that time the average life expectancy in the U.S. was 69. The typical job performed by most workers was manual. See a problem already?

According to the CDC, the average life expectancy is now 78 years. Moreover, the forces at work causing increased life expectancy (improvements in nutrition, health care, etc...) are still at work. Since the Social Security Act we've added, on-average, 44 days (.12% of a year) of life expectancy each year. That means if you're 40 right now you could expect to live not just to 78 (by 2049), but to 83 (by 2054).

Were you to retire at age 65, in 2036, Social Security would be subsidizing your idle retirement for 18 years, not the 4 originally intended in 1935. This is why Social Security solvency is an issue, and why governments including our own are pushing for older retirement ages.

But you won't retire at 65 now will you? No, you might retire officially and cash out your 401(k), but after that you'll most likely continue to work as long as your mind is sound. Why? Because most of you don't perform manual labor any more.

What about personal savings other than 401(k)? You'll have that in the form of home equity and, if you're smart, investments. Most people approaching retirement either have the opportunity to or actually do buy-down to a smaller, more manageable home.

Don't let the doomsayers tell you that your home won't be worth as much due to the recession. That sells headlines but just isn't true. In our area home values increased by 7-8%/year for a couple of decades, then lost about 15% in the recession. Do the math. A $40,000 home I looked at in the Vanderbilt area in 1992 sold in 2007 for over $400,000.

In the coming years you'll pay off your home and, in retirement, most likely need a smaller less expensive one. That becomes one leg of your stool.

So how much do you need for retirement? Here's a new "calculator". Calculate your estimated life expectancy (78 - your age) x 1.12 + your age. Subtract that by 5 years to calculate a reasonable retirement date. Take that date and plug it into the retirement benefit calculator of your 401(k) provider and get a real estimate of what you'll need to retire.

Chances are you may still be short. But you won't be "throw up your hands and pretend its not a problem" short. You'll be "some" short and can put together a plan for a secure, albeit briefer, retirement.

Don't want to work that long? That means you don't love what you're doing and should consider a second career. That's another story for another post.

Saturday, November 13, 2010

The Art of the Fresh Start

Most employee handbooks define what the organization considers its intolerable violations; those things that, if you do, you're fired. Most offenses fall far short of that, thankfully, and are corrected by coaching or discipline; the offending party goes back to work while everything is kept confidential.

Somewhere between those scenarios is that most difficult situation where everyone knows or thinks they know everything and the offense poisons team cohesion. The choices left at that point are to terminate the offender for a non-terminable offense, which isn't fair, or transfer them somewhere else in the organization.

This can prove to be far trickier than it looks, but it can be done and is often worth the trouble. A great example of how this is being done well is Jeff Fisher's acquisition and management of Randy Moss.

You don't have to be sports fan to get this example. To take the football talk out of the example you just need to know this: Moss is a fabulous performer who has during his employment both exhibited unrivaled performance and conflicts with management. His last manager removed him and the Titans accepted his transfer. The employees and people outside the company (the NFL) are watching to see how he reacts and when he blows up on this manager.

Fisher's management so far has been text book. He's met with Moss privately and nobody knows what that conversation contained, which is as it should be. Most likely there were expectations set for his new employment situation. Publicly Fisher's answers to all the speculation of potential problems has been to accentuate the positive. "He's a smart player", "he's a professional", "we don't believe this is a risk", "we don't expect any problems" are the answers quoted so far. The only conversation between Fisher and Moss that we know for sure is that when Moss asked about his future contract after this season Fisher told him to go have fun, win some games, and they would talk at the end of the season about a contract.

Now let's break down what happened here. Face to face communication was established between supervisor and transferee: no talking through others or listening to the rumor mill. Expectations were established. Next, the new boss becomes the transferee's advocate to all doubters. Finally there are no long-term promises made.

From the transferee's perspective they know they have a fresh start, what's expected, and that they aren't under a watchful and hostile eye from their boss. That gives them the freedom to learn their new job and role without undue stress over making the typical new-guy mistakes. But it also puts the responsibility for good performance and behavior squarely on their shoulders as no long-term commitments are made. They must perform and behave well.

Meanwhile the sports press is all over Moss' every move and waiting for the "big story" of when he blows up on somebody. Similarly, some co-workers often look for the slightest indication of the transferees past problems. This is where the manager's advocacy is critical in beating back public opinion and allowing the transferee a fresh start.

The art of this maneuver is found in manipulating and counteracting social mirror theory; the idea that humans behave over time in a way that they believe that other people expect them to behave. If workforce scorn is allowed to rule the day the transferee is almost certainly doomed to repeat their past problems. Artful management of the fresh start lies in changing or drastically diminishing public opinion, providing encouragement and hope for the transferee, and giving them incentives (i.e. survival) for developing new patterns of behavior.

Oh yeah, and its Christian. I'm not sure which Bible translation you use, but the two or three I have are full of stories of forgiveness and redemption. Some intolerable violations require termination due to business risk: we forgive the person personally but can't let them return to work. Most violations fall far short of that and are opportunities to live out our faith at work by challenging our negative perceptions of people and giving them a second chance.

If they fail to live up to this new opportunity then we can move on with a clear conscience.

Wednesday, November 10, 2010

To Tell the Truth

In a corporate environment the truth is often a victim of power and the fear of it. That's as unnecessary as it is unfortunate. When people feel that they can't tell the truth to their boss, staff or peers it usually comes out of unfounded fear such as:

1. Afraid to make the boss mad
2. Afraid to look bad in front of others
3. Afraid to offend someone and deal with the tension or conflict.

Now here's the problem; organizations in the information economy live or die based upon good decisions. Good decisions depend upon having good information, which can't exist when people aren't candid with one another.

Coming from secular business almost ten years ago I was surprised that one of the biggest issues in Christian organizations is hearing the truth. Between the fear factor and the desire to be nice, the truth often suffers.

In my role I have to sometimes say unpopular things to people in power. For me there's no escaping that obligation and it just comes with the job. If I hear of an issue that, upon reporting it, will anger an executive I can't just let it go. If it festers and causes problems down the line that reflects negatively on me. So my duty is to sometimes say things that aren't well received but I always do it.

Now here's a big Ah-Ha for you:

I've never lost a job. I've said some really frank things to people who could have fired me on the spot and it has never happened.

What I've found is that really good leaders have the ability to take themselves and their emotions out of a situation and see it for what it is. Even when they don't, they didn't get to where they are by letting their emotions get the best of them. They have always, to date, appreciated the loyalty and candor even if sometimes they had to calm down a day or two before they appreciated it.

No matter what your position, if you want to succeed you can't be so afraid to lose your job that you fail to do your job. Your career, and the place where you work, will be the better for loyal, calm, impartial truth.

Tuesday, October 26, 2010

The Myth of the Consensual Workplace Romance

I'm approaching 30 years working in private sector workplaces and I have learned a few things: loyalty is rewarded if you work for good people, getting behind can be cured by staying later, and a workplace romance is never a good idea.

The reason is that the presence of position power and romantic attachment are toxic.

This combination is toxic to relationships and to the workplace in several ways.

1. You can't hide a romance...don't even try. Once an individual with position power is perceived to show favor to someone on staff then favoritism is introduced, real or perceived, into the workplace.

2. Judgement gets clouded. The person with postion power may rationalize that they're being fair to everyone, but that's not always the case. Its worse when they lie to themselves that nobody knows.

3. The staff starts seeing ghosts. Even when no favoritism or romantic activity is going on, the perception that it is becomes the easy-out, blame-all for everything that goes wrong.

4. You can never tell when "yes" means "I dare not say no". Even if it starts as "yes", at some point one party tires of the relationship, doesn't feel that they can back out, and continues on somewhat or even totally against their will. At that point it becomes Sexual Harassment.

I have a little personal experience with this. My wife and I met at work over 30 years ago. Our relationship was complicated by our constant disagreements at work and about work. She left that job, I went back to college, and the rest is history. That we can sleep together but can't work together is not insignificant. Power sharing in a relationship is negotiated and voluntary. Power at work is structured and granted to individuals by more senior individuals through corporate governance. It is coercive by its nature and not negotiated. When coercive power is introduced into a romantic situation and supplants negotiated power a "yes" can never be certain.

Friday, October 22, 2010

Small Town Professionals

I grew up in a small town. Actually, that's not true; I grew up about 10 miles outside a really small town in a community of about 500 people called Little Muddy, Kentucky. Next closest place was Morgantown, population 1,200, where my parents had their business. My wife and I raised our family is the next biggest place, Russellville, about 20 miles away with a population of 8,000. I am small town by birth and professional by choice. That's an important choice.

We're a medium-sized company of 500 people. There's another way to look at that; we're a really small town of 500 people. When you spend more time at work than at home you build community with the people at work. Departments are like streets; some neighborhoods are furnished better than others. Everybody is into everybody else's business.

Now I don't mean that in a bad way. You can't build community, connectedness and teamwork on the one hand and anonymity on the other. People can't just come in, not socialize, go their own way at the end of the the day and build strong teams.

But it is at the intersection of teamwork and privacy that we all need to make the choice to think like and act like professionals. People are people, and when you introduce all the messy problems that individual human beings have and mix them all into one workplace you're going to have talk. Those are occasions where either the best or the worst human instincts can show up in the workplace. To keep this a great place to work I propose a simple recipe:

One tsp of "behave yourself" + a pinch of "mind your own business" + drop of "focus on your work" keeps a company our size a professional workplace and not some place from which you have to leave to grow up. If you keep your personal business out of this business then it becomes none of anyone else's business. That is as it should be.

Thursday, September 30, 2010

Appropriate Dress at Work

This shouldn't be a long epistle of a blog post. The princples are simple and straightforward and go something like this:

1. We should be dressed professionally every day at work.
2. You can wear casual clothing items and still look professional.
3. You can wear professional clothing items poorly and still look sloppy.
4. Overly revealing clothes never look professional unless you're a dancer.
5. You never know which minister, author, or customer you're going to run into.

Nobody tied you up, threw you in the trunk, and made you work here. You came to the Bible Company and asked for a job. When you get dressed in the morning make sure to remember where you work. Central Parking's customers probably don't care how CP's people dress: ours do. HCA's content providers, their doctors, probably don't care if their receptionists are half dressed. Our content providers, our authors, more than likely do.

Remember where you work. It really is that simple.

Saturday, September 11, 2010

The Vocational Root Cause of This Recession

You can't turn on the television and avoid hearing opinions about how our economy came to its current state. And while it is true that speculation in real estate was rampant, fueled by poor lending practices and irresponsible buyers, there's a deeper root cause; we don't make much in the way of physical products anymore, and we don't really want to.

Two days ago in the New York Times David Brooks called this out wonderfully. In his Op Ed piece, "The Genteel Nation" Brooks points out that our change in thinking has given us "Great Britain disease" leading to the decline of our empire like that of our mother country centuries ago.

His thesis is dead-on; like Great Britain before us, we built our economy making things. We applied scientific knowledge of primary industries, and society's best and brightest engaged in those endeavors. Now 65% of graduates from the nation's top schools go into law, finance or consulting.

This isn't the first time we've heard this. In 1983 I was a graduate student in Texas listening to President Reagan's plan to globalize our economy; his vision eventually became the North American Free Trade Agreement (NAFTA) which wasn't enacted until President Bill Clinton. The Democratic response to Reagan's speech was given by Senator Jim Wright of Texas, the Senate Majority Leader, who blasted globalization with a now prophetic comment, "We can't have a healthy economy delivering pizzas to one another."

When you think about it, that's pretty close to what's happened. Labor unions fought NAFTA hard, seeing that it meant the end of jobs that supported their organizations. It took three Presidents to get it enacted, and now two Presidents later we're debating how to turn around the demise of the middle class.

Where were those middle class jobs? Factories.

It's been almost 10 years since I was recruiting for skilled manufacturing talent, and even then it was getting tough to find. Sure, you can find assembly workers. What can't find are machinists, skilled maintenance workers, and electro-mechanical engineers. Right now we have 17 million unemployed while skilled trades jobs remain unfilled.

The casualty of globalization has been the American mindset towards work. I see this in the publishing profession especially; the idea that skilled trades are too blue collar and something you would never want to do yourself or have your children do.

As with most problems, this one rests between our own ears. While I'm too far into my own career to change, people in career transition and emerging high school graduates should take a look at vocational education. Machinists salaries average $41,000/yr; Engineering Salaries average from the high $50s to the mid $80s. Most good companies have education assistance programs, so a two-year vocational or engineering tech degree can land you with a company that will pay for your eventual engineering education.

Mostly we need to re-familiarize ourselves with the dignity of all work, not just white collar. Seeing manufacturing, mining, mechanical and technical trades as beneath us is the root of seeing the people who do that work as inferior. Candidly, if this post offends you or these options seem beneath you then you're part of the problem.

Tuesday, September 07, 2010

Quick Office Furniture Factoid

We are 34 days away from move-in day at our new Live Events headquarters in Plano, TX. Just saying that, much less writing it, makes me catch my breath because there is a lot yet to be done. It is in Scott Holloway's capable hands, however, so I have every confidence that it will be (like all his projects) on-time and on-budget.

We meet on this project weekly and I came across some information today that might help answer an age-old question within the company: "Why does office furniture cost so much more than I can buy it at retail?" This is a question that comes up every project: why, for instance, does a good cubicle-grade desk chair cost $500 when you can buy them at Office Depot for $300 or less.

Okay, here's why...

You don't sit in your home office chair 8 hours a day for years at a time.

We have some $300 chairs in our company, and our experience with them is that they must be replaced about every three years. That's $100/year for usage. The $500 chairs average 18 years service, or just under $28/year for usage.

The same goes for any office furniture; desks, bookcases, etc... So next time you look at an office furniture budget and wonder if we have lost our minds remember that we are focused in our procurement on a couple of decades of use, not a couple of hundred dollars "saved" now.

Tuesday, August 31, 2010

Giving Away my AA

Three weeks ago we hired an outstanding young woman to be my part-time Admin. Her name is Nubia and she has done a wonderful job very quickly. She will also leave my area in two weeks to take a full-time job at Grupo Nelson.

Early on we identified this young lady as a unique talent; bi-lingual with a degree in International Business and an intense curiosity about our business. An outstanding positive attitude didn't hurt either. I gave her an early version of our strategic planning materials to shred and she did, after reading them and coming back to ask really good questions.

When the Grupo job was posted a couple of weeks ago it became clear: she was a great hire for us, but fit the Grupo job perfectly. It was a tough decision, but we waived the six month waiting period for new-hires to post and offered her the position last Friday. In the end, the company is best served by having the right people in the right places and my job is easier to fill.

We're parting on great terms, even though this puts me back looking for an AA, part-time through the rest of this fiscal year and possibly/hopefully full-time thereafter. Candidates who speak Spanish or Vietnamese go to the head of the line so that HR can better communicate with non-English speaking groups within our company. Candidates should complete our on-line application at Meanwhile, if you see Nubia congratulate her for attaining her new role. She played her way onto the roster the old fashioned way.

Thursday, August 26, 2010

Sometimes We Just Stand There and Take It

One of the bedrock values that we live by in our HR department is the sanctity of confidential information. Whatever we know, we don't talk about. Anytime someone asks me if something is in confidence I always say the same thing, "If I hear in our conversation a violation of the law or significant violation of company policy I have to put on my "Agent of the Company" hat; otherwise what you say here, stays here."

That applies not only to information we know about employees, but also candidates and former employees. We adhere to this value because trust and confidence are the currency with which we do our business in the company. We never forget that and this is mostly a good thing.

I say mostly because there are times when it really bites us.

Not everyone who leaves us tells the truth about why they left. Not everyone who fails to get hired tells the truth about why they didn't. Sometimes an employee with an unfavorable outcome needs a face for their disappointment. Oftentimes that's us and we know that it comes with the territory.

So when this happens we have a choice to make; defend ourselves and reveal facts that are confidential, or stand there and say nothing. We choose the latter, because if we'd release their information to make us look better you could rationally reason that we'd release your information if it benefited us. We just don't do that.

So if you hear some horrible story about how someone was treated terribly by the Bible Company just remember this: the fact that we're not talking has nothing to do with the situation and everything to do with who we are as professionals.

Saturday, August 07, 2010

The Thin Line Between Experience and Age

Occasionally older team members leave your workforce involuntarily. That's a sensitive issue when it happens. Other older members of the team become unsettled because they probably worked with that person for years, and some wonder if they're next. There are legal issues involved as well. Age discrimination laws give disgruntled ex-staffers a tool with which to strike at your company even if no discrimination is involved.

We've had some older people leave our workforce in the past few years. At the same time we also recently celebrated a milestone birthday with one of our most revered and respected colleagues. At 80, Jack Countryman is producing some of the finest work of his long and legendary career. In his late 60's, Larry Downs Sr. is doing great work in selling Spanish products. So if we're welcoming of some and not afraid to dismiss others, where's the line between when someone has excellent experience and when they become a candidate for termination? I mean, at 50 this is something I have to know myself if I'm to continue to be relevant to this or any other company.

The answer is simple and elegant.

Are you still open to new information and are you willing to innovate.

The business world is changing daily. You can know practically everything about your profession but stop taking in new information and become obsolete in a breathtakingly short amount of time. You can know a little less but be a perpetual learner and never run out of career.

Some would say passion is the main ingredient, and I don't disagree. But I find that people who stop taking in new information and take the "we've always done it this way" attitude get bored with their profession and lose their passion. It is the willingness to learn no matter how long you've done the job, and the willingness to always look for a better solution, that keeps your profession fresh and your passion in place.

I've know 30 somethings who were totally inflexible. Given the choice, I want to be like Jack.

Wednesday, August 04, 2010

Job Skills You Need Now

In the spirit of the Seth Godin, Tom Peters piece on YouTube, I'm going to keep this post to the point.

When you think of job skills you usually think of things you can do, like design a book cover or balance a spreadsheet. Those are important and will get you in the door. The keys to longevity, however, are the behavioral skills of coping with an ever-changing post-recessionary business landscape.

1. Adaptability to change - Change once came like an occasional tidal wave every few years and reset the landscape. Now it's like standing on the beach watching wave after wave after wave wash over your feet with no end to the waves on the horizon. You don't stand on the beach and bitch about the waves; don't stand in the office and complain about change. Its the business life you chose.

2. Resiliency in the face of change - Many bright, young talents start strong and burn out or become cynical when they see repeated changes. They blame management for poor planning or impulsiveness, or they just become weary and negative. The ability to stay strong and recognize change as an unrelenting business environment is critical to a long career.

3. Response time - The stakeholders around you are also having to respond rapidly to change. You don't have the luxury of responding tomorrow. With 15 million people out of work, chances are your customers or supervisors can find someone who'll respond quicker.

4. Positive Communications Skills - Get your point of view or progress report or marketing plan out for comment now. With free social media outlets there's no room for hermits in key business positions. Again, if you don't communicate your stakeholders have almost unlimited sources of information and will choose another.

If you want to have a long career, accept constant change and respond quickly and effectively to it. Professional chops and a great education may get you in the door, but it takes nimble, positive handling of change to stay there.

Friday, July 30, 2010

DWI: Driving While Immigrant

About six months after moving to Nashville we traded my trusty commuter Honda for a barely-used Avalon for my wife. We got a great deal; an African American female soldier who had been in Iraq over a year decided to sell the car rather than make payments for it to sit in the parking lot at Ft. Campbell.

One of the things we liked about it was that she had trimmed it out nicely with rims and a smoked license plate cover. Nothing we would ever spend money to do, but sharp looking, especially the rims. We noticed the first few weeks we had it that young guys, especially African American kids, would actually back-up when stopped in traffic to look at the car. They were shocked to find a middle aged, gray-haired white woman behind the wheel.

And one day, so was Metro...

Heading home from meeting me for lunch, my wife was pulled over in Hermitage. She was in a stretch of Lebanon Road known as the "Bonnas" where at the time there was some daytime drug activity. Note the shock on the police woman's face when my wife rolled down the drivers' window and inquired as to what was the problem.

After stumbling and stammering all over herself, the police woman said, "It's that smoked license plate cover: we ask you all not to have those." She let my wife go with a promise to remove it. She did, and when I got home I put it back on where it has been for four years without any similar incident. And why? Because the wheels were cheap, started losing fake chrome, and wouldn't balance anymore. We replaced them with stock Toyota wheels and now the car looks like a middle aged white couple drives it.

Which is why I want to talk to you about Arizona's immigration law and why Tennessee would be foolish to adopt it.

This terrible idea/exercise-in-racism gives law enforcement the duty to run the immigration status of people it encounters in enforcing other laws. It is predicated on the notion that there will always be just and probable cause for any encounter between law enforcement and citizens. While there are fabulous professional law enforcement officers in this nation, there is also a significant number of Bubbas With Badges. For them, our nation's ideas of probable cause in traffic stops is as porous as our borders.

Taking also into consideration that poor people are more likely to drive cars with missing tail lights and non-working turn signals, the Arizona (and possibly Tennessee) law gives Bubba open season on Hispanics.

The other unthinkable aspect of this law is the requirement that citizens carry identification on them at all times to prove their citizenship. If you're old enough to remember the old Soviet Block you should remember being aghast that it required it's citizens in Eastern Europe and Russia to "carry papers" authorizing them to move around the country. Since when did Conservatives want to copy Soviet ideas of freedom?

As long as probable cause is as loose and ill-defined as it is in our country laws like Arizona's are unconstitutional and discriminatory. If you don't believe me, put some cheap wheels on your car and drive through Hermitage.

Sunday, July 11, 2010

Being Real

I'm posing a question here. I'm not being critical or making a point, other than to say that I have a question.

I've noticed in our 25 year old daughter and in co-workers of a similar vintage a generational value of authenticity. "Being real" is short-hand for baring your soul or expressing unvarnished, uncensored feelings to others regardless of how they receive that information. Combined with the growing ubiquitous presence of social media, you can now gain and lose friends with lightening speed by saying what you really feel.

At the risk of self-identifying as being old school, I find this noteworthy from both a generational and geographic perspective. I was not only raised in the south, but raised southern. My dad is from Kentucky and my mom is from Mississippi. Dad is from a tiny town in the western part of the state, and mom was raised by a school teacher and a minister. The southern value of that day was propriety and discretion above all else. It is 180 degrees from "being real".

Now here is what I believe to be the open question for the transparent generation. As this group moves through their career life cycles in business, politics, ministry, or whatever how will this impact their careers? Already employers are vetting candidates for both hiring and promotion through a review of available on-line information. This includes self-posted information such as twitters, unprotected Facebook information, and whatever else may show up when you Google an individual. This practice has become so pervasive that it's the new body of law emerging in HR: on-line invasion of privacy, as incredibly contradictory as that term may sound. (Your privacy has been invaded by someone reading something you posted on the Internet for everyone to see?)

By the time current 20-somethings are being considered for positions of greater responsibility, who will be making those decisions and how will this information play into their selection choices? Will the values of authenticity and transparency have been integrated into society as a value, much like tolerance has replaced racism in my lifetime? Or will what you write today come back to haunt you tomorrow?

Again, I don't have the answer. I believe what's relevant is the question and that it should be a topic of conversation among the rising stars of the junior ranks.

Thursday, July 08, 2010

FSA Letters

If you're receiving strange letters from Blue Cross Blue Shield to justify FSA purchases you're not alone. The rules on FSA purchases have tightened, and we informed everyone at Open Enrollment that you might be required to submit receipts or other backup to justify purchases on your FSA card. That's normal.

What's not normal is that some of you are being asked to submit backup for every single swipe of an FSA card, including co-pays for prescription drugs and in-network doctor visits. That's not right and we've addressed it.

But it has been good for a laugh...

Some of you have been asked by BCBS to submit an Explanation of Benefits (EOB) to justify your in-network FSA swipes. Those EOBs come from...BCBS! Their FSA unit has been asking some of you to send back to them forms that they themselves generate. Even better, one lady was told not to send it back in...just read it over the phone!

And my favorite is the 1¢ solution. There was a penny difference between the amount charged and the amount paid, so BCBS sent a letter requiring 33¢ postage to the employee asking for a check for 1¢.

We've spoken to our broker who in turn has spoken to the FSA group at BCBS. We've reminded everyone that you should always take a good opportunity to stop looking foolish. They are doing some staff retraining.

If you've experienced this and thought it strange, you were right! If you continue to experience it please contact me directly. BCBS is an excellent and reliable insurer that is so large that it sometimes operates like the government. When things like this happen just please let us know.

Monday, June 28, 2010

Business Lessons from McKnight Guitars

We have, I believe, much to learn about business from a tiny luthier in the middle of nowhere. What he and his wife are doing right affirms some of what we're already doing and could teach us a thing or two that we're not. First a little background...

I picked the guitar back up at age 44 after not having played since high school. It started at Henry Horton State Park during a management retreat. In the unofficial hospitality room I found my soon-to-be good friend Gabe Wicks playing and passing around his Martin guitar. People were taking turns, so I took one. It just felt right, not necessarily the instrument, but the sense of community and camaraderie. Instruments can be pleasant fill-ins for the solitude of introverts and many of them become superb players. For me the instrument is the focal point around which we've built a tight community of friends.

Vonnie and I took this one step further this past weekend and traveled to Morral, OH, allegedly population 325 although I think that count was taken on a family reunion weekend. We were there to spend time with Tim and Mary McKnight of McKnight Guitars, the people who built my first serious guitar which I purchased off consignment from Artisan Guitars in Franklin, TN. I had met Tim via email and an acoustic guitar discussion board, and had invited he and Mary to Nashville for one of our local musical trade shows. They reciprocated with this invitation to their home for their annual homecoming of guitar owners. Tim is a quality control engineer by trade whose been promoted to running the stamping department of a major appliance manufacturer.

They were hosting their third annual "McJam" where about 20 or so McKnight owners, family and friends drive in and spend the weekend at their home or one of a handful of small motels out by the Interstate. For two days we ate, talked, played, ate, played some more, ate, and toured Tim's shop. He had some tweaks to do on some members' guitars so we also got to watch a master luthier at work. We also ate a little more.

I was surprised at how little we played. I was equally surprised at how much we talked. Three members had been inspired to take a lutherie class and build their first guitar. Tim and Mary set aside considerable time in such a short event for them to speak at-length on their projects. The McKnight home is in a modest neighborhood, but there were multiple spaces set aside for groups of 2-5 to sit and talk. Tim had about 10 of his display guitars available for anyone to play.

Now here's where it gets interesting (I know you were waiting for that!). During one conversation in one alcove Mary told Vonnie that they seldom sold on consignment anymore. She also said that the main reason they attended one trade show in Nashville was to meet me. Huh? I had already purchased and they don't do any after-market selling or customization, so why make a 10 hour trip to Nashville when my check had already cleared? Because they wanted to meet one of the few customers whom they did not know personally.

During unstructured downtime in the weekend's agenda, when people would be playing these high-end custom display guitars, Tim would come sit and watch us play. He would ask questions about how we played, what we liked and didn't like about the guitar we were playing, and get our feedback on projects he might be considering. He had one experimental guitar that he asked everyone to play during Open Mic Night on Saturday. He sat in the chair closest to the performer and watched, listened and asked questions of every player about the experimental guitar.

So what did I learn? I learned how McKnight Guitars has gone in just a few years from a garage hobby to being one of the premiere guitar builders in the nation (they just made a specialty guitar for the Newport Guitar Festival in Florida and the $15,000 it sold for went to charity).

1. An obsessive, relentless focus on quality - There are lots of people building guitars, but very few that build them this well. I have an early prototype that is very special (just ask my friends who've played it), but that was built in 2006 and isn't anywhere near as well made as the McKnights of today. I bought it on clearance (again, no surprise to my friends) because while it hung in the shop Tim had moved on to better ways of building.

2. An equally obsessive, relentless focus on the customer - What does the customer want, how does the customer use the product, and what does the customer think about potential innovations is an on-going and constant part of the continuous improvement and re-engineering of the product.

3. A Sense of Christian Mission - The McKnight Guitar tag line comes from Psalms, "Make a Joyful Noise"; the McKnights very much place God at the center of their business and feel committed to the business as an extension of the Christian mission.

4. Building the Business through Building Community - Tim and Mary appear to have used consignment selling to help draw attention to their tiny company early on. They now sell and want to always sell face-to-face, builder to customer. McJam continues that strategy as attendees are invited to bring a sleeping bag and stay in the McKnights' garage, loft, or bring a camper or tent for the back yard. During the event hours (noon to midnight) you're invited into their home to eat at their table and meet their whole extended family.

5. Premium pricing - They make one of the best products on the market and they don't give it away. Margin allows for service, which is why service suffers most in commoditized industries. They can charge what they do because quality, and community, differentiate their company in the marketplace.

What does that have to do with a big business like Thomas Nelson? After all, the size and scope and industry are entirely different. Right? Yes, but the lessons are the same and here's how we're doing.

We are doing very, very well on building community. Michael Hyatt's leadership at building community through social media, supported by Lindsey Nobles in Corporate Communications, is innovative and being echoed across our marketing team. We're also doing well in some business units, like Fiction, at listening to customers either directly or through the sales division and letting what we learn inform what we publish. Other business units should take on this strategy. Our publishing standards, focused around the company's core values, has resulted in products faithful to our mission. This is an area of great improvement since 2006. Our digital efforts and focus on custom product make us one of the more innovative publishers in our space.

Where we and so many publishers could improve is in product quality. How many times have I heard over 9 years in Christian publishing that "mistakes happen". "We publish a lot of books" is often the explanation for spelling and grammatical errors, not to mention some poorly written products. The lack of product differentiation due to quality, especially in a commoditized industry like publishing, shows up in unit margin. Let me say that again! When our stuff is the same as everyone else's stuff then we can only compete on price which in turn causes corners to be cut and quality to diminish. When we play the commodity game we lose, and so does the end user.

Think about publishing differently in this way: print will eventually die except for high-end products. Digital products will be the commodity as they will be cheap and cheaply customizable. When paper is no longer involved then the quality of the content and how well the content fits the consumer's need become the only measures of product quality. Pushing quality as an uncompromisable metric will allow for premium pricing on the few printed products still made ten years down the road. It will also minimize lost sales and damaged brand equity from digitized commodities.

We should learn from the little luthier in Morral and start now building a quality system that will differentiate us in the future. Unless or until we do, we as individuals can make a difference. An old-tech concept of "pride in our work" can be an important first step.

Monday, April 19, 2010

Breaking the Taboo: Tools for Talking Price with Your Doctor

Each time I go to my neighborhood Publix I experience two pricing models. The difference between these goes to the heart of what's wrong with our health care costs as a nation. I drop my prescription off at the pharmacy, and then head off with my wife (without whom I couldn't find the front checkout much less any food item, but I digress) to grab our food for the week.

When it comes time to check out I swing by the pharmacy and pay three $10 co-pays for three generic maintenance drugs. Then we go to the checkouts and pay for everything else. By the time we're at the checkouts I can tell you almost to the dollar how much we're going to spend because I've watched that with each item that's gone into the cart. I have absolutely no idea how much my prescriptions actually cost me because "they're $10 each." That's a lot of what's wrong with health care costs, and why HSA accounts are reshaping our thinking.

With FSA accounts and PPO plans we don't care about the real cost, the balance of which is paid for by our insurance plan. We don't care, that is, until the next renewal when our premiums, deductibles and co-pays rise sharply. With our last renewal, however, we had 80 employees elect the high deductible plan, and most of these opened an HSA. Now I'm hearing encouraging changes in perspective that I want to pass along to encourage everyone.

One person stopped me in the hallway recently and said that his family was comparing drug costs for all their prescriptions at all local pharmacies. They intend to move their business where the overall monthly bill is lowest. During renewal several people in our Accounting department asked about the physician and hospital discounts in one network vs another. Both of these instances show what happens when the HSA money is yours to keep, and whatever you spend comes out of that account. Now all of the sudden we care about the full price of our health care. We should have all along and I'm as guilty as anyone.

If we start to shop at the grocery store pharmacy with the same care that we shop the rest of the store we become several hundred negotiating consumers rather than a herd of insured bodies taking whatever we get at whatever price. While some may say that health care is not where you want to save money, it is a false choice between quality and price. You feed your family within your budget without buying spoiled produce and rancid meat, don't you? You do that by being smart consumers, and that same intelligent decision making can accomplish the same result in your family's health care.

It also happens that those physicians and institutions with the highest quality often have the lowest price. The number 1 maternity facility in Nashville is Baptist Hospital, which also has an excellent reputation and is ranked on our Blue Cross Blue Shield website as having the lowest cost rating in this market. During the health care reform debate The Cleveland Clinic was cited many times as having the best outcomes simultaneous with the most reasonable pricing model.

So if you want to compare price and outcomes between doctors and hospitals, where would you get this information? For those of us enrolled in the Thomas Nelson plan with Blue Cross Blue Shield you can get it off their website at Register if you haven't already. Once you have, look to the lower left column to find typical discounted pricing information for a variety of treatments, cost rankings for area hospitals by type of procedure, and dental cost information.

Armed with this information you can do one of two things. You can ask your providers up front what they intend to charge for this procedure and compare that to the market. If you want to be less confrontational, you can check some of your old Explanation of Benefit (EOB) forms and see what they've charged you in the past. You can then ask your doctor's office why they charge more than the market average, or consider moving to a doctor whose charges are more in line. Listen for the tenor of their response; the greater their indignation the greater the likelihood that you've struck a nerve and are being overcharged.

Remember, anything is negotiable and now is the time to adopt this new posture. I recently had a dispute with one of my providers over a $25 late-cancellation charge that I declined to pay. I thought we'd have a fight, but they gave up without a word. While in there for my next appointment the provider remarked to me that their patient load was off significantly due to the number of unemployed people who had lost insurance. Remember, these are businesses and not philanthropic institutions. Now is the time to confirm where your providers charge vs. the market and, if you don't like what you discover, push back.

Friday, April 16, 2010

Demographics Will Save This Job Market

As usual the headlines on the job market are dire. News agency after news agency reported that "March job losses were 61% higher than February." Surely all signs point to a slow recovery for jobs in the near term, but long-term the outlook is outstanding. Here's the rest of the story.

March job losses were sharply higher than February's because February's 40,090 jobs lost was the lowest in four years. March's 67,611 was not great news, but let's dissect that further. First of all it was 55% lower than March 2009's 181,183 jobs lost. Now of that 67,611, 50,604 were government job cuts announced in prior months and finally implemented. The media got to count these twice as bad news: once months ago when the various federal, state and local entities announced the cut and again in March when they happened. Furthermore of these 50,604, just over 30,000of those are at the U.S. Postal service.

So take out the USPS and the governmental sector cut 20,000 or so jobs and the private sector shed just over 17,000. Those are remarkably good numbers.

This opinion is born out by the quarterly job losses for Q1 this year (181,183) vs. last year (578,510). That's a 69% reduction, not that any media outlet will quote that. Good news doesn't sell soap.

So in the short-term the job market appears to have bottomed out and is beginning to recover. What about the long-term?

I read some interesting material this week hinting at a labor shortage beginning late this decade. Doing a little original research, I have to agree. The Baby Boom generation is inching toward retirement, with the leading edge (and largest group) hitting retirment age in the next 6-8 years. After WWII the Boomers filled the cradles and spare bedrooms of America to the tune of about 50 million people. However, 32 million of those were born between 1946 and 1951. They are now ages 59 - 64 and have social security retirement ages of 65, as opposed to us later "echo" Boomers whose retirement ages range from 69 1/2 to 72.

So what happens in the next 6-8 years? Well, it's difficult to predict exactly. People are healthier and living longer, and may not want to retire. There is speculation that part-time work will become more common for seniors, as will incentive pay for companies to keep older workers on longer. Lost 401(k) and pension balances from this recession may force some people to work longer. On the other hand, the incessant implementation of new technologies may make more jobs unnecessary or obsolete, or move past what most older workers are willing or able to master.

Whichever of these factors influences the job picture more, one thing is for certain; the number of hours that people age 59 and over are contributing to this economy is about to drop off sharply. We've seen the impact of decreased hours in fields like medicine and pharmacy, where women's share of those jobs as risen sharply in the last three decades and where the aggregate weekly hours worked has plunged. Women in these high-paying professional positions can easily work fewer days and still make excellent livelihoods in order to attain work-life balance with child rearing. Great for them and their families, but the resulting shortage in doctors and pharmacists is well established.

So assume the 32 million leading-edge boomers have experienced some mortality, disability, and early retirement. Let's just say that we have only 25 million workers who retire or sharply cut back their hours? With low fertility in all subsequent generations, and with our obsessive and immoral purging of illegal aliens, there won't be enough people to fill jobs abandoned by Boomers. Look for a labor shortage, and a suburban housing glut starting about 2018 and moving on through about 2030.

Oh, and on the immigrant topic, here's a pinch of perspective. There are about 40 million first generation immigrants in this country right now. Of these, it's estimated that about 15 million are illegal. Wanna kick 'em out? Send 'em back where they came from courtesy of the Tea Party. Well, imagine the year 2020 and a roofing crew of old white guys. Good luck with that.

Monday, April 12, 2010

I'm Looking for a Temp Assistant

I've never tried this before but, hey, why not.

I am currently looking for a part-time Admin for a temporary spot that could work into a full-time job. Right now I need someone about 20 hours a week who would work as my AA about half that time and spend the rest of their time working for Travel and HR doing clerical support work.

Before you ask, no, my current AA Dawn isn't going anywhere. Our work load has expanded as has Travel, and we need to slide Dawn over to help Jack in the more traditional HR work. This position would pick up some of her slack while she's working for Jack.

As to who I'm looking for, we'd like someone who has previous Assistant experience (HR is a plus but not necessary), is professional in appearance and demeanor, has good instincts (we deal with people, after all), and is service-oriented so that our internal customers are treated well.

As an added incentive to find the right person, we're okay with someone on the "Mommy track" who wants to put their kids on the bus, come to work for a few hours, and be there when they get off the bus.

This sounds like I might get 5,000 resumes, but here's the kicker. If you are bi-lingual (English + either Spanish or Vietnamese) you go to the head of the line. I'd love to use this additional resource person to improve our communications with non-bilinguals within our company and in the greater candidate pool outside our company.

Interested? Know of someone who is interested? Send me an email that acts as your cover letter to and attach your current resume. Spam, resumes with no cover letter, and candidates who don't fit the requirements go straight to trash without a reply. I'll read and reply to the rest myself.

Friday, March 26, 2010

Eligibility for Your Medical Benefits Plan

As we near the end of Open Enrollment I want to highlight some changes to the eligibility rules for our medical and dental plans. These mostly impact new employees coming in after the first of next month. Supervisors and all of us who recruit should know this information so we can use our benefits to recruit prospective talent. I believe we have a good story to tell.

Immediate Eligibility

Although this isn't completely new, I find that some people don't realize it. You are eligible for coverage under our medical and dental plan beginning on your hire date. You must allow a few days for sign-up, card printing and mailing, etc... but there is no waiting period after you're hired.

Part-time Employee Eligibility

This year for the first time we are extending eligibility to part-time employees. This doesn't cover temps, interns, contractors or any other casual labor. This eligibility extends only to those individuals who work regularly 20 hours per week or more and who the company classifies as a "Regular, Part-time Employee."

Pre-Existing Condition Exclusions

For now these are still legal, and we will have a 12-month exclusion period for all new employees hired after April 1, 2010. With immediate eligibility extending even to part-time employees the plan must protect itself from "adverse selection" which is the phenomenon whereby sick people single out our company simply for the immediate eligibility, get their illness officially diagnosed, covered and treated, and then quit. All employees who come over to Blue Cross from the UHC plan have creditable coverage under federal law and are exempt from pre-existing exclusions.

It is my understanding the Blue Cross is printing cards today and that all of you who have made your benefits choices, including those who are making no changes, should have your cards on time. We appreciate the time and attention everyone has given to this year's Open Enrollment process and believe we've found a quality, cost-effective program for FY '11.

Wednesday, March 24, 2010

What Healthcare Reform Means for Our Benefits

Unless you've been camping in a distant cave you know that this week the House of Representatives approved comprehensive healthcare reform legislation. Over the next nine years this new law has the potential to substantially change the healthcare system and industry in this country. While most everyone knows something happened, what it means seems open to interpretation.

Walking through the corporate office this week as part of our Open Enrollment process I heard many opinions and had several requests to blog on this topic. I've also sought out news items off the web, TV and radio. In addition, about a half dozen unsolicited email articles have come to my inbox by companies wanting to sell us consulting services for our health plans. The following is a summary of what I've learned to date.

One more thing before we start. I am neither Republican nor Democrat, conservative nor liberal. Please don't try to paint me with a particular political brush if you don't agree with my analysis. Liberal/progressives tout this law as the savior of humanity, and conservative talk radio refers to it as unconstitutional Armageddon. It is neither; it's a change in direction from a private insurer system to a quasi-private system with greater government involvement.

The goals of this legislation are to cover more uninsured Americans and control the escalating cost of medical coverage. To do this the government is proposing to use a number of levers at it's disposal, from changes in tax law, expanding medicare coverage rules, penalties and subsidies for different personal and corporate behaviors, and an expanded regulatory power requiring all Americans to be covered by health insurance of some form or another.

Specifically, here is what happens and roughly in what order:

Within 90 days

  • Family policies (I assume both group and personal) must allow dependents to stay on the plan until they reach age 26. In Tennessee right now that age is 24; in most states it's 22.

  • Plans may not apply a pre-existing condition exclusion to children under 19.

  • Uninsured citizens can obtain coverage through a federally subsidized insurance program.

  • Increased medicare prescription drug coverage.

  • Small businesses with fewer than 25 employees get a tax credit for providing benefits.
  • Restrictions on lifetime and annual spending caps in insured medical plans.

  • Medicare must cover preventative care at 100% (no co-pays, deductibles, or co-insurance)

  • Establish a reinsurance program for employers providing retiree medical coverage for retirees >55 yrs old but not yet Medicare eligible. Phases out by 2014.

  • Insurers must report not only what they spend on claims but how much they spend on administrative overhead.

In 2014

  • Establishes health insurance exchanges for individuals to buy insurance in a more competitive market.

  • Establishes Small Business Option Programs (SHOPs) where employers with less than 100 employees can group together and buy insurance with better buying power.

  • Requires all employers with more than 50 employees to provide health insurance or pay a tax fine of up to $2,000 per employee.

  • Requires all citizens to have health insurance or pay a tax fine phased in over four years of up to $750.

  • Provides tax credits for businesses that buy their health insurance through SHOPs

  • Provides subsidies for individuals who purchase health insurance through an Exchange

  • Employers who provide health insurance but which cost the employee more than 8% of their annual income (provided employee makes no more than 4x federal poverty level) must provide that employee with a voucher for what the company would have spent on the employee's insurance so that the employee can use that to buy insurance from an Exchange.

  • Employers whose employees use vouchers to purchase insurance from an Exchange must pay a fine of up to $750 per employee.

In 2018

  • IRS will impose a 40% tax on "high-end" health plans valued at $10,200/yr or greater for single coverage and $27,500/yr for family coverage. FSA and HSA contributions must be added to the cost of premiums for this calculation.

  • FSA Annual limits (what you can save in a tax year) will be reduced from $3,500 to $2,500.


The immediate changes for our plan are the lifting of lifetime and annual maximums, and adding dependents up to age 26 back on our plan if we're asked to do so. Our new plan has pre-existing condition exclusions for new-hires after April 1st, but we won't be able to apply it to children under 19. Depending upon how the insurer underwrites our plan, these changes could add risk and therefore increase our premiums for next year's renewal.

Past this year, candidly its too early to tell what impact this will have on our plan. There is a Senate reconcilliation bill to be passed, a Presidential Executive Order that's supposed to put more limits on taxpayer funding of elective abortions, and court challenges in as many as 34 states. Another potential change would be amendments to the bill. Congress' approval rating is around 17%, close to an historic low, and we may have a substantially different Congress next year which might want to make changes.

Just remember, most of the changes from this law impact individual and small company plans, and we're covered under a corporate plan. Most of these changes impact how the uninsured buy coverage, and just about everyone here has coverage. We'll keep you informed as we know more, but overall there's no real cause for celebration or jumping out of windows yet. As the Zen Master said, "We'll see."

Wednesday, March 17, 2010

FY '11 Medical Plan Decisions Simplified

It's open enrollment month in our company and many people are trying to make a decisions regarding their medical plans for the fiscal year beginning April 1st. This year our Tennessee employees have a four-option choice; PPO vs. High Deductible Plan (HDP), and Blue Cross "P" network vs. "S" network.

With the various differences in premiums, co-pays, deductibles, HSA vs. FSA, etc... there is a lot to consider. The HDP has gained momentum due to favorable payroll deductions and some good feedback from people currently in the plan. The S network rates are cheaper, but that network does not include any HCA hospitals including some where several of our people live.

With a lot at stake, and a lot to sift through, here are some simple decision points you should consider if you work at Nelson. This is just my opinion and does not change any of the Open Enrollment information we've sent to our people. We have informational meetings going on and you should attend one of those if you're struggling with this decision.

1. FSA, HSA, or Neither. In my opinion "Neither" shouldn't be an option. If you're going to spend money on co-pays, deductibles, or coinsurance this year why not get the savings of deferring that money to yourself pre-tax? Since "Neither" is not a smart option, then the choice is FSA vs. HSA and that's simple. HSA accounts are only available due to (a stupid) federal law if you have the HDP. Choose the FSA if you choose the PPO; choose the HSA if you choose the HDP.

2. PPO or HDP. The HDP combined with an HSA saves you more money in almost every instance, but there's an important catch that I'll get to in a minute. Practically everything you spend on your medical costs in the new fiscal year counts towards the deductibles and maximum out of pocket expenses. When you reach the $8,800 out of pocket maximum the plan pays at 100%. The PPO maximum out of pocket is $6,000 but only the deductible and coinsurance count towards it. Co-pays do not count toward it, and continue on after it. You can spend $6,000 and still pay co-pays into infinity.

So why not go with the HDP in all cases? Since everything counts towards the deductible ($1,200 individual and $2,400 family by law) there are no co-pays. That means that every prescription you buy, every doctor's visit, any ER services, everything up to when you satisfy the deductible is at your expense out of pocket. You'll get that back through premium savings by year's end and you'll save money in most cases. However, if you aren't $2,400 liquid at the start of the year the HDP can get you into serious financial difficulty. If you can't afford that much out of pocket starting April 1st, the PPO may be your better option.

3. P vs S Network. The list of doctors in these two networks is almost identical; the difference in is hospital coverage. In the Nashville area only, Blue Cross has a negotiated relationship with the non-HCA hospitals. In exchange for HCA hospitals being excluded, the other hospitals offer a deeper discount to patients with S network coverage. If your doctors have privileges at Vanderbilt, Baptist and St. Thomas (or their related facilities) or if you're willing to change doctors then the S network will save you money. If your doctor only has privileges at local HCA hospitals (Summit, Centennial, Skyline, etc...) and you aren't willing to change doctors you should select the larger P network. If your doctors are all at covered facilities (mine are all at Vanderbilt) then you should take S as it makes no sense to pay more for network access that you don't use.

So there you have it. Decide on PPO vs. HDP depending upon your liquidity, then select an FSA or HSA depending on which plan you selected and take advantage of tax savings on your non-covered expenses. Select P vs. S depending on which hospitals you use and where your favorite doctors are allowed to practice. Feel free to email or call me at the office if you have further questions.


Monday, March 15, 2010

Molested in a Runaway Prius: The Top Ten List

I've been home-bound for a few days due to knee surgery. As a Catholic who owns two Toyotas, and proud on both accounts, it's been tough to avoid the news. The hysteria over 30 year old allegations of priestly impropriety has moved from the U.S. to Ireland and now to Germany. The smart money inside the Church is that Spain is next. Meanwhile, "Me too!" runaway Toyota incidents with lawyers and reporters on standby plague the world's largest automaker.

Being a student of institutional behavior, and a great admirer of these two great institutions, it's pained me to watch them get behind the story in their respective news cycles. Meanwhile, Late Night host David Letterman sets the standard for getting past his own reprehensible behavior of having sex with young female staffers over whom he had authority as host of the show and owner of the show's production and distribution company, Worldwide Pants.

The differences in how these three companies handled their respective scandals is a lesson in being nimble when trouble strikes. Both the Catholic Church and Toyota are old and venerable organizations with their own cultures. They see the world through their own lens and are almost incapable of seeing themselves as the world sees them. Letterman's company, by contrast, is a media company and understands the news cycle as well as anyone. When trouble struck, how all three reacted gives all other companies a cautionary lesson in handling crisis communications.

The Church's sex abuse scandal began in 2002 with a series of stories in the Boston Globe. These first cases were legitimate; where serial pedophiles working as priests in the Boston diocese were knowingly moved from parish to parish by Cardinal Bernard Law without regard for the safety of those parishes children. When the story broke the Church first obfuscated, then gave vague assurances that all was well, and only addressed the story after multiple lawsuits were in the works. It looked slow and out of touch and, by inference, guilty.

The truth of the scandal, which still goes on today, is that the majority of abuse cases were brought forward after 2004, two years after the original disclosures. Over 70% of those cases were for abuses committed between 1962 - 1974. Less than 1% of the Church's priests in the U.S. were responsible for over 60% of the accusations. So how does such a small number of predators taint the world's largest religious organization? Lawyers, money, and the smell of blood in the water. Two organizations, SNAP (Survivors Network of those Abused by Priests) and Voice of the Faithful are full of attorneys and people selling books and speaking engagements about pedophile priests. They have opened branches both theologically and regionally and raise money off their websites. This story won't die until they've run the table on all religions and regions.

The Toyota story is similar, in that the problems with it's models came from prior years and the mistakes of a prior CEO. During the late 1990's through about 2007 Toyota expanded it's production 50% in order to gain bragging rights over GM as the world's largest automaker. To expand that quickly they built new factories in foreign countries and for the first time ever allowed non-Japanese owned parts suppliers to make critical parts. All the sticking accelerator pedals came from one Canadian supplier.

When early trouble came, about two years ago, Toyota obfuscated and denied any problem, and in the process looked guilty. When news of multiple deaths of sticking pedals came to light, they were already behind the story. When the news broke worldwide there were 19 cases over 9 million cars over 10 years. Now there are 54 reported cases, none of which can be verified or reproduced. There are 64 class action lawsuits against the company and law firms worldwide are trolling for new plaintiffs. Even those not experiencing defects are being encouraged to join class actions for loss of resale or trade-in value due to the scandal. As with the Church, blood in the water, money and lawyers have given the story a life of it's own.

Now compare that to the biggest non-story of the year: David Letterman's assignations with female staffers. When faced with possible extortion, Letterman went public first, said he did it, made fun of it, and that was that. His extortionist plead guilty last week and Letterman is still #1 on late night television. Benedict and Toyoda are the guys cleaning up someone else's mess, but the press and the lawyers don't care. That's not consistent with their narrative. Meanwhile Letterman goes on about his business.

So what's the critical learning for our organizations?

1. Tell you story first.
2. If you screwed up, decide how to fix it
3. Make communicating that part of your story.
4. Take care of anyone you've harmed or injured. Handling real claims early is cheapest.
5. Put together a team of PR, HR and legal to work cross-functionally on the situation.
6. Use your team to push back immediately and aggressively on those "Me too!" claims.

Your goals are to (7) make sure internal and external stakeholders know that you're the good guys, (8) fix what you've broken, and (9) let the bad guys know that any ill-gotten profit from your problems won't be quick or easy. Finally, (10) do some soul searching on how this happened (as Toyota and the Church have both done well) and make sure this doesn't happen again. The alternative, as my two much-loved institutions are finding out, is a decade of litigation.

Monday, March 08, 2010

Watch Your Medical Coding and Billing

The American health care system is either the finest in the world or a hopeless morass of waste depending on who you talk to and their party affiliation. One thing that is absolute truth about our system is that it's complicated, and one of the root causes of that complexity is the interface between medical coders, medical provider billing, and your insurance plan. I'm near the end of a medical coding/billing/insurance problem that I've been working since July. The facts of this case (which I have permission to share) should help you understand why it's important to know your benefits, watch your bills, question everything, and use your HR department if necessary.

In July we had a dependent on the plan who was referred by her primary care physician for a colonoscopy. The patient here had no symptoms or problems but had reached the age when that procedure is recommended. The colonoscopy was performed later that month and the results were clear except for a mild case of diverticulosis, which requires no treatment. The patient was told to come back in 10 years to repeat the procedure. The UHC benefit for a precautionary endoscopy is 100%.

So imagine the employee's surprise when they received a nearly $300 bill for their 20% of this procedure. They asked for our intervention and I called UHC, who replied that the medical coding had been a "diagnosis" code, meaning in coding lingo that the procedure had been done because of a diagnosis, not as a precautionary wellness measure. We contacted the doctor's office, who said the medical facility's billing department did the coding. We contacted the medical coding unit who said that was the doctor's notes and so couldn't be changed.

I did something here that I've never done; I emailed the UHC rep, doctor, his nurse, and the facility billing department and said, in essence, "Who made the mistake?" If the coding is right then the doctor is wrong; if the doctor is right then the coding, billing, and insurance are all wrong. I don't anticipate getting a Christmas card from any of them, but finally a patient representative from the hospital called and said that the doctor's notes would be sent through for re-coding and re-billing.

About four months later the employee gets yet another bill for the co-pay. We speak with the medical facility's accounting department and UHC (who was wonderful in this instance), and UHC sent them what they said was their third verification that the patient owed zero balance. I spoke with the Accounting the department with assurance that all was well. Last month the patient received another bill for the co-pay, so this time we faxed the Explanation of Benefits showing no patient responsibility to the Accounting unit.

Over the weekend the employee received another bill for the same amount. Today I called and asked to speak to an Accounting supervisor, only to find that the accounting clerk who received my fax didn't forward it to the Adjustment Office for re-billing, and assures me all will be corrected this month.

At the heart of the problem is the complexity of the tasks vs. the ability of those performing them. Medical Coding is a semi-skilled vocation that really should be a highly skilled vocation. As a field it is trying to professionalize but has a long way to go. Unfortunately, how providers bill is based on this coding , and there's a lot of bad coding being done. Similarly, hospital and independent physician billing is complex and about half of the people doing it aren't up to the job. Finally, you have the insurance carriers who will readily question a strange bill if it costs them more money, but who are all too happy to rely on the coding and billing if it costs them less. In this case, as I said, UHC was very helpful.

Moral of the story? Questions your bills. In this case the employee knew that their plan paid 100% of preventative endoscopy procedures or they would be $300 poorer today.

If you don't like the answer you get, come see your HR department. We can either explain to you what your owe and why, or help you push back on bad coding and billing. Until patients and health plans become active, noisy and even a little belligerent we'll be the little guy victims in a complex system that favors the institutions who designed it.

Tuesday, February 16, 2010

Building Your Brand in Inclement Weather

One of the truths of growing your career is that as you progress through the organization you become broad and shallow as opposed to the staff emphasis of being narrow and deep. By that I mean that when you are on staff you work on a small variety of tasks which you must know completely down to the last detail. As you progress in your career and take on broader responsibilities there simply isn't enough time to go into all the details of every task; that's why you have staff working for you and that's their job. The further you rise in an organization, the more you just touch the tops of your different responsibilities.

Your job then becomes fundamentally different; the organization starts paying you for judgement, trustworthiness, dependability and execution. Can they assign you to an area and almost completely walk away from it? If so, you've become a reliable manager.

It is in that area of dependability and execution that there's opportunity in times of bad weather. I know it sounds a little trite, but I've seen it happen many times over my career that the path to getting recognized goes through the snow.

On days when there are only a handful of people who can make it to work, you want to be among the handful. Staying home, if you can make it in at all, is a missed opportunity.

I know that sounds old school, but trust me it works. Managers have such a broad area of responsibility that they want to build a team around them with people who can handle things. Attendance is a huge part of that, and showing up in bad weather makes a statement. Two hours late is better than not at all; on time is sterling.

Being able to do this isn't just a matter of will power; it also involves preparation. I started my career in small communities where everyone either worked agriculture or worked by the hour in communities 30 - 90 miles away. Remember, this is pre-Internet and working meant being at work, and not working meant either dead livestock or not getting paid. In that culture, missing work was not an option and that rubbed off on me profoundly. In our marriage, my biggest fights with my wife didn't involve money, sex or how to raise kids; they started with, "Surely you're not going to work in this!"

So how do you become super-dependable no matter what mother nature brings? Here's some tips from small towns where people have to get to work:
  • Where you live - Most people have several addresses during their working life, so next time you change addresses keep your commute in mind. If all things are equal, avoid the place at the top of the winding hill with no guard rail. If you give yourself a flat commute you can almost ignore everything that follows below.
  • What you drive - Four wheel drives are best, front wheel drives are very good, and rear-wheel drive only if (like me) your commute is almost flat.
  • Good tires- Replace your tires in the fall if at all possible for good snow traction.
  • Emergency Kit - Keep jumper cables, a tow strap, kitty litter and a camp shovel. If you don't know what to with all that ask somebody with a long commute; they'll know.
  • Go Play in the Snow - One of the biggest causes of accidents, and missed work, are people who are afraid to drive in the snow. Next time everything ices over, go take your car to the nearest empty parking lot and practice sliding around until you're not afraid anymore.

Does this mean, from my HR post, that I expect anyone to come in when it's dangerous? Absolutely not! But if you're career is stuck and you can't seem to get noticed, be one of the super-dependable few who show up when nobody else does. Trust me, it works.

Tuesday, February 02, 2010

Building Quality Products One Relationship at a Time

I consider it a life-changing experience having spent 10 years in the Japanese automotive business. Even in an HR role I got to see first hand how a "culture of quality" permeates a corporate culture. I'm not sure that we'll ever be able to install anything like it at Thomas Nelson. Our business model is split between experiential content (live events, social media, etc...), electronic content, and physical content. While we want everything we do to be of high quality and value to the customer, we aren't solely focused on how to make an excellent physical product from the top down. This divided focus is contrary to the type of fanatical devotion to "the thing" you make that is required of a "total quality" culture.

Still, we can make high quality physical products, and our product quality is in some cases an opportunity. Some regard the type of focus needed to make an excellent product too "blue collar" and so don't focus enough on it. An emphasis on numbers-first can also work against the type of decisions needed to run a total quality organization, like pulling bad product (i.e., "we'll fix it with the next printing"). A culture of quality requires supplanting whatever culture came before hand, and that's a years-long tough transition.

Part of that transition is how we call out substandard work, and how we react when told that our own work is substandard. In this relationship realm there are simple behavioral adjustments that can push the cause of quality forward. Lacking these adjustments you let interpersonal controversies overshadow the greater goal of zero defects, and quality gets lost in the finger pointing.

Here are three simple (but elegant) ways to use communication and relationship-building to help us make better products.

1. Senior leadership articulation of a zero defect goal - From C-level execs to division heads, the idea that the goal of each and every individual thing we do is zero defects is powerful. We don't publish written materials with typos, or videos with bad splices, or audios with background noise. But remember this:

Zero Defects is Not Zero Mistakes. Zero Defects is Finding and Fixing Our Mistakes

So the articulation from the top that we want zero defects rolls through the organization something like this: that errors be minimized through good processes, reasonable deadlines, and well-trained/well-equipped people, resulting in fewer mistakes. Mistakes that are found are corrected, including reworking or pulling bad product.

2. Call-out substandard work in a way that builds relationships - My Japanese bosses liked to say, "Fix the problem, not the blame." Just like good supervision separates the person from their behavior ("We love you, but we won't tolerate this thing you did"), identifying substandard quality separates the error from the person who made the mistake. "This work isn't up to par" is a lot different from, "Your work isn't up to par."

Too often I've seen a mistake used as an excuse to farm work out to a preferred vendor. That gives the content producer greater control, but does little to make the whole system (and company) better. Instead, we should examine each mistake and ask the person responsible (1) how did it happen, (2) how much work is out there that isn't up to our standards, (3) what can we do now to fix the problem in current inventory, and (4) what are you doing to make sure this doesn't happen again? Repetitive cycles of asking these four questions with every error will improve our system and raises everyone's game.

3. Receive quality complaints with grace, not defensiveness - This isn't about you; its about a standard that your product is not meeting. Granted, how you hear this oftentimes depends on how its said (see 2 above). It requires maturity and fortitude to take criticism and turn it into performance. But we only hire grown-ups so receiving this criticism maturely isn't an unreasonable expectation of anyone.

Once you know something you've done or made isn't up to standard, your next actions mirror the questions in 2 above: (1) how did this happen, (2) what is the scope of the problem, (3) how do we isolate bad work or inventory and then correct or destroy it, and (4) what procedural changes or controls do you put in place to make sure we don't have this same error again?

In all this we should have two goals: to work together toward a common goal of 100% customer satisfaction through zero defects, and to never fix the same problem twice. We can achieve this through graceful calling out of problems, graceful receipt of criticism, and focus on only producing products we're proud to sell...not sweeping it under the rug or catching it on the next reprint.

Tuesday, January 26, 2010

No Hiring Thaw

I've received some questions lately about our hiring freeze "thawing out". The inevitable question that follows is when the wage freeze will similarly thaw, and why we aren't giving raises yet if we're hiring. Here are the facts.

We currently have four positions posted. Three are back-fills for people who left the company or were promoted internally to other positions. One is a new position in an area that management has determined was cut back too drastically in 2008 and where lack of a position is holding us back from needed revenue.

Earlier this year we replaced one person who left with two lower-paid people for the same money. Other than that, any new faces you see around the operation are temporaries, interns, etc... We all hope for better days, and soon; meanwhile its important to note that everyone is doing more with less, not just you and your group. All the positions filled recently and all those currently posted add to the company's overhead a small fraction of what it takes to give raises.

I hope this helps. While I can't make the economy better, I can address the one insidious type of rumor that most threatens our company. The "inequity idea", that some people are getting their raises and that the company has no intention of reinstating raises for everyone else is totally false. Not only is there no proof of that, there are no facts to support it at all. The next time someone comes by your workplace to tell you that, please ask them where they got their information. I'll bet you'll get a blank stare or some vague somebody-said-that-somebody-said answer.

Finally, if you hear something that bothers you and want to know the straight of it call or come by to see me. Please don't let something bogus ruin your day.

Wednesday, January 20, 2010

Count to Ten...

Okay, so you are tired and overworked and people are just plain getting on your nerves. The temptation is to blast some idiot who really deserves it and has for some time. You decide its time to fire that "special" someone on your team simply because the law says you can't kill them. You, gentle reader, need to count to 10 before you say anything, and sleep on it overnight before you do anything.

I've seen it already this week. One of our managers started busting the chops of an outside trainer in the middle of class. Another one jumped all over me and didn't care to get the facts. I myself spent most of the weekend in the hospital with my Mom, and came back to work worn out and grumpy. The first three things that happened yesterday tempted me to invite the offending parties into a caged death match.

Acting on such frustrations is neither a Christian reaction nor a good career strategy. So what do you do when you wonder how high a co-worker or your boss would bounce if tossed off the top of the building? The solution, like most problems, starts with planning and ends with good execution (of your plan, not of any person).

  1. You Need a Good Support System - There is a difference in fussing at someone and fussing to someone. Just venting to someone you trust will often get you past the urge to kill. Find that someone or someones now before you get in an angry situation.
  2. Know That You're Not the Only Busy Person Here - Again, this is a pre-anger step. Come in each day knowing everyone has taken on more work, not just you, and that you haven't taken on any more than anybody else. If you approach each person with an appreciation for their burdens you're less likely to become angry.
  3. Walk Away - If the moment seems like it puts you in career danger, excuse yourself and come back another time (or day). If the person truly needs to be straightened out they will still be here tomorrow. Chances are you'll either feel differently about it tomorrow, or you will at least be kinder and more diplomatic.
  4. Apply the True, Kind and Necessary Test - Before you say anything to or about the source of your anger, ask yourself three quick questions: is what I'm saying true, is it kind, and is it necessary to say it at all. This is a post-venting rule; say what you want to your confidential venting partner so your head doesn't blow off your shoulders.

Here's the deal: everyone one of us voluntarily applied to work at the Bible company. None of us were conscripted and we all knew there would be behavioral expectations when we came to the company and said, "Please hire me." To respect those expectations and our company culture, and to be true to our own baptismal promises about who we are and how we will treat others, make kindness part of your work style.

(Disclaimer: all references to violent behavior are figurative and illustrative. No real Nelson employees were harmed in the making of this blog post)

Thursday, January 14, 2010

Sometimes "None of the Above" is the Best Candidate

As the recession begins to thaw and companies begin to rehire, supervisors and HR departments nation wide are dusting off their recruiting tools and trying to remember how to hire people. In the midst of this two university sports teams in this region have had similar coaching debacles that I believe reinforce a simple but elegant recruiting lesson. Sometimes the best solution is not to select a candidate and keep looking.

A couple of years ago the University of Kentucky lost its embattled basketball coach Tubby Smith, a quality human being and great coach who won about 17 - 18 games a season. This of course was not sufficient for Big Blue Nation which thinks under 30 wins and not making it to the Final Four is a disastrous season. Smith decided to go to Minnesota where he can win 17 games and have a field house named after him.

So when Smith finally had enough, UK needed a coach. Here is where college Athletic Directors are at a disadvantage. Season tickets have been purchased, games have been scheduled, and you have to hire the best person available. In this case it was Billy Gillispie, a hard-drinking professional bachelor who built a solid basketball program at a traditional football school, my alma mater Texas A&M. Gillispie's exploits are well-known, and the teams he built in College Station were street fighters. If your team's players had tattoos, his had brands. He built the program by getting kids too rough to play at more genteel schools like UK. His teams won by bringing a gun to a knife fight. He's a good coach but UK was not the place for him.

Living in Tennessee I can't escape UT football. Unless you're living on the other side of the country, or the world, you know the saga of Lane Kiffin. A self-serving, biding-his-time until he could get back to USC mercenary, he came to UT, committed a string of minor NCAA rules violations, helped the team up to a 7-5 record, and went back to USC about 10 seconds after they offered him the head coaching job. He goes with most of his coaching staff, and prior to signing day for next year's freshman class. UT will not only have to scramble for a coach, but also a coaching staff and will likely lose some of its better recruits.

Kiffin was available when Big Orange Nation threatened a revolt unless then-head coach Phillp Fulmer was fired. Kiffin was available in-part because he'd been fired by the Oakland Raiders in an equally ugly departure (see a pattern here?). Here's a hint for UT's Athletic Director: when Al Davis questions a man's character you should probably look elsewhere.

Both of these cases illustrate that the best person available at the time isn't always a wise choice. In business we don't have to make "a" pick when a position comes available, not if we plan well. When you have an opening, here are a few tips to ward off desperation and avoid a bad hire:
  1. Ask yourself, "What if it takes six months to fill this job; how would we get by?" Put that plan in place and settle in for a long, calm search.
  2. Be realistic about what you need. If you're paying $25,000/yr for a job don't tell HR you need a master's degree and 10 years experience.
  3. With a realistic profile in hand, advertise widely and be patient. Some of your best responses come in 2-3 weeks after the ad goes up, as the first week's responses are almost always dominated by the unemployed and the employed-but-perpetually-dissatisfied.
  4. When you eliminate all but the best candidates, make your decision quickly. Searches build momentum up to a decision point. Your finalists are most likely other companies' finalists too. If you snooze, you'll lose.

The point is, if you're not sure that you see what you want, its okay if the decision is, "I'll pass" and start over again.

Like most companies, the recession has left Thomas Nelson with a solid workforce. Most companies kept their toughest, most flexible, most resilient staff. Any of your people who weren't tough and resilient before 2008 are now. You don't want a drop-off in talent when the rehiring starts, so plan for a long search and be pleasantly surprised if/when you find the right person quickly. There are 15 million people unemployed in this country, and a new crop of graduates coming out every year. Take your time and only select the best.