Saturday, March 10, 2012


What to do with the mid-level performer?How can we engage them for rapid growth?

Most of the employees in the organization are not a star performer nor they are at the bottom 10% in the bell curve.They are the mid level performer!!They are the challenging people for the organization.
Mid level performers need assistance.Because of the various competency gaps they don't get the attention which they deserve and because of those gaps they can not contribute as expected level.
How can manager motivate the mid level performers?managing them? helping them to come out with as a best players?
Most of the mid level performer once in their life time had been performed as a star performer. Mid level performer has ability to execute the tasks with superior quality but due certain priority mismatch they are not able to contribute in current cycle.Organization need to apply patience and understand their needs and analyze the situation.

Too many star performers in a team is not an healthy sign.All star performer has certain basic nature.They are demanding in nature, they are passionate, they want to achieve more, their expectation is high, they maintain high self esteem and they  have different priority in life.Most of the population in team with this mindset is not healthy for the team.For healthy workplace organization need mixture of people.Minor dissatisfaction causes attrition to the star performer and impact the organization and the running critical projects.

Most of the mid-level performer are loyal to the organization.They stick with the organization for the log time. They build good network with in the organization and they become glue for the organization.For organization sustenance,Organization need to focus those mid level performer and come up with proper plan for those population. Career planning,training need,counseling , identification of the competency gap, personal and professional support is very much require to mid level performer.Constant coaching, mentoring for work life balance without losing patience is require to bring them.back from current level.

Managing mid level performer is always a challenge.Manager has to know the requirements, manager has to discuss with the employees to understand the priority in their life.Need to match the job requirement vs current expectation vs competency gap.Manager has to bridge the gap on behalf of them.Most of them are not a good communication, manager has to come down to certain level to help them and communicate them the current priorities of the organization.

Most of the mid level performer will not do what organization demand them to do at that time.They will have some other desire or priorities in their mind which they are not able to communicate or managers are not able to understand or managers do not have any other options available other than current assignments if there is a job mismatch also.

Managers has to look for opportunities where mid level performer has done something worth of appreciation.Manager has to grab those opportunity to recognize them, motivate them as mid level performer always badly need self esteem booster recognition.It is very much require to maintain the motivation level for mid level performer to bring them from current performance level to next level.

If we compare star performer vs mid level performer, all star performer are self aware about how to execute the tasks efficiently and branding the same on time with perfection, communicate the results with all possible way so that they get the due recognition.Over a period of time those star performers build the high confidence level among team and with high self esteem.

Some time peer guidance does not work out if organization try to attach mentor-ship model with different performers.Line management has to involve to resolve this kind of situation by driving into the exact scenarios.Line management organization need to understand the bigger picture, analyze the case and guide the team members.Constant motivation helps the situation to become better.

Mid level performer though they are less passionate and low in motivation level does not necessarily tells that they are not wiling to perform.Managers need to know that organization need them and invest time and money on them to bring them into the expect level.Managers need to plan for them for long term career plan so that they get the vision and feel attach with the organization vision and work for it.

Mid level performer are essential for the organization growth.Mentoring them, guiding them, train them will be helpful to the organization for long term.Managers need to provide continuous feedback to the team members, guide them and show the direction so that proper mitigation can be taken well ahead.To improve the performance continuous bidirectional interaction is a must. Organization need to show the confidence on them to increase their confidence, trust has to establish and build.

Understanding how to get the most out of these middle performers requires both enabling them and motivating them with the right mix of rewards and recognition that is aligned with their personal drives and within reach through stretch goal.Following this process correctly will lead to unprecedented success and sustained competitive advantage.















Tuesday, March 6, 2012


How can we VALUING A BUSINESS before we invest into it??
 
Business valuation is the assessment of economic value for that business.
It is important to be able to create a range of values for a  business; from high to low.  
I was involve in process of buying a business in my hometown which is in remote village.I has been called to help my relatives to asses the worth of the business. 

Liquidation Value: will give the lowest value
Cash                                       100%
Accounts Receivable            80-90%
New Inventory                        50-70%
Used Inventory                     10-40%
Used Equipment                 60-80% (Auction Value)
Land & Building                      60-80% (Appraised Value)

If you buy the assets, then you may have no responsibility for liabilities.  The sale will be governed by the Bulk Sale Act.  If you buy the stock, then you will become responsible for the liabilities.

Market Price:  This term is used in two ways:
First, the price a business broker might use.
Second, the price of the business if it was traded in the market.  You derive that price by comparing it to similar, publicly traded companies.
Book Value:  The value of the company is determined by Assets minus Liabilities.
If assets have been significantly depreciated and yet have maintained a market value, then the price will be understated.  For example, if you bought a corner of XYZ area in 1951 and have depreciated the land to $1, then it will be “undervalued” on the balance sheet.  The market value of the land will be much greater than the book value.
Rule of Thumb:  Research has shown that small businesses sell for 4 to 6 times after tax earnings.  Basically, you will “get your investment back” in 4 to 6 years.

Capitalize Future Earnings:
1.  Project future earnings for the next five years.
2.  Average those earnings.
3.  Capitalize the earnings using a capitalization rate that reflects both risk and potential return.
Example:  The average earnings of ABC company are $100,000.  Your banker and accountant have analyzed the risk involved with the company and have suggested you capitalize it at 20%.  What is the value of the firm?

Valuing Goodwill 
Goodwill is the ability to make above average profits.  If the firm you are purchasing is not making a return on assets (ROA) above the average in the industry then you can argue that there is no goodwill.