Golden Business Ideas

Nurturing Talent

In planning for the future, is your company checking its talent “inventory” and assessing who will be tomorrow’s leaders and who is worthy of promotion?

When fast-track employees are identified early, there’s time to steer them to advance training programs that prepare them for new, more responsible jobs.

Failing to plan ahead will force your organization to recruit future leaders from the outside, which will be more costly and problematic.

If your company doesn’t take these steps, it may be an early sign that it is experiencing management problems itself.

Retooling Executive Power

Not so long ago most corporate structures were rigidly vertical: The CEO sat firmly at the top of the pyramid and commands trickled down from on high, one executive layer at a time. Suggestions from lower-level ranks, when recognized at all, moved laboriously up the ladder, delayed for hearings by each level of middle managers eager to justify their positions.

While it’s true that at many companies today the chain of command has become somewhat blurred, some CEOs continue to have a hard time relinquishing their nearly absolute power even though there’s ample evidence that managers successful in letting go end up with a more effective organization.

The following steps to retool executive power for today’s business culture may sound obvious—but they work:

Demonstrate respect and empathy for staff. The dividends are nearly instantaneous—cooperation soars and obsequious feedback evaporates.

Listen. Pay attention not only to the words but to a staff person’s body language. For example, a lower-level manager may not object verbally to your idea, but if you listen carefully you may sense that significant hesitation camouflaged by the speaker’s nervousness about contradicting the boss. And that should be a clue you need to draw the manager out.

Don’t cut off debate. In fact, encourage it—not to raise the level of competition between executives but to illuminate an issue. Recognize, too, that such debate allows for comprehensive examination of the issues and information sharing, thus giving staff a practical education.

Downside: Initially, this change in style will slow the process of decision making—but only for a short while. As managers gain confidence, you’ll find that consensus on difficult issues will come faster. And they’re more likely to be better decisions.

How to Raise Prices

When costs rise, can price hikes be far behind? But before you initiate increases, heed this advice:

Try to ease customers into higher prices. For example, tell them the next order will be at the same rate but that you will need to gradually increase some prices to cover higher costs.

Don’t raise prices across the board. Do some cost and market analysis and hike prices only for products with the lowest profit margins and the least competitive risk.

Avoid raising prices for all customers or at the same rate. Again, do some analysis and determine which are the least profitable customers and which you are most likely to lose if prices go up. You may actually benefit from losing a low-profit customer, and you may decide you want to keep some accounts even if you can’t raise their prices. The point is: Be selective.

Recognize that customers who shop around for the best rate may find that risking a new supplier may not be worth the price savings. In any case, you should point out that the new supplier, under the same cost pressure as you, is eventually likely to raises prices, too.