Guided by Bjork, Lancet President Gets Performance Review From Workers
Star Tribune - September 2001
Seated at the head of the conference table, Tom Niccum was getting razzed by his employees. "You've been voted off the island," said one of the 14 people in the room. "You are the weakest link," blurted out another.
It wasn't the latest TV game show; it was the beginning of Niccum's annual job-performance review. Why would Niccum, president of Lancet Software Development in Eagan, subject himself to the criticism of his employees? Why would any of his employees want to bestow their honest opinions upon their boss - you know, the one who pays them? It makes Lancet a better software services company - that's why, Niccum said. It's also what makes Lancet unique.
This philosophy of the-more-people-know-the-better is used in every facet of the company, from keeping staff up to date on the company's financial well-being to employee performance reviews. Typically, performance reviews are private matters between the boss and the subordinate - the measure of your worth to the company. More specifically, reviews are tied to raises. "We wanted the review to be about information, not about calculating salary," Niccum said. That way you can get a pat on the back along with suggestions for improvement without it being tied to wages. Employees aren't compensated based on performance alone; they are paid competitively according to the market, with bonuses on top of that.
Niccum said the payoff of Lancet's philosophy is improved performance and the creation of what the four founders of the company agreed to build at the start in 1997: A place where they wanted to come to work every Monday morning. Every employee has an initial "open review" at the six-month mark. On their one-year anniversary, they have another, then annually after that. Niccum is the only one who is reviewed by the entire company.
In an overstuffed room, Niccum adjusts himself vertically in his chair as he's about to hear the low-down on how his work force feels about the way he runs the island. It's a somewhat formal process. All of the employees' input already has been typed and inserted into a 13-page report that is being displayed on the overhead projector. Led by human resources director Susan Bjork, the review begins with his strengths.
Niccum is a well-respected guy who has a tendency to look on the bright side of things. He's technically savvy, a natural leader and financially minded. Lancet has been profitable, despite the economic downturn and lower sales.
But the good stuff is easy to talk about. Now cut to his weaknesses.
He's not such a good salesman, and he gives in to customer's demands too often and too quickly. He can be short with people at times and not so easy to reach. He juggles too much.
An employee comment: "I think sometimes you give in too easy when it comes to hourly rates or charges when a customer complains about work. I know we need to be flexible but we also need to make sure what we get is fair." There is the view that because the customer has given Lancet a bunch of work, Lancet owes them something, said an employee, explaining the comment. While the employees aren't so fast to give away or even discount Lancet's services, Niccum, the client point man, defends his stance.
"It's not the same as it was a year ago," Niccum said.
Budgets are squeezed and companies have more choices on how to accomplish their information-technology goals, he said. Companies are saying they're going to pay only a certain amount and either you take their offer or you don't get their business, Niccum explained. Competition is stiff. Offshore consulting companies work for about half as much, he said. Then there are the independent contractors, whose rates Lancet can't beat because it has the overhead of staff and employee benefits.
In response, Lancet has adjusted it rates downward about 10 percent and has become creative and flexible with billing and payment arrangements. The company offers payment in stock or deferred billing. Since Lancet isn't public, it doesn't matter whether it receives payment in the same month the work is done or a few months later, Niccum said.
Lancet also monitors its overhead expenses. It didn't wildly expand during the dot-com era and has kept its employee numbers low, 24. "A year or so ago we were looking at ourselves and saying, `Did we miss the boat?' " Today, Lancet is more confident.
Employee comment: "Tom really juggles a lot of different tasks, i.e. staying on top of the financials, marketing, sales, client relations and all the other stuff that comes his way as the `president.' "
Ah, the struggles of a person with too many hats to wear. Niccum concedes the past year was rough for him, as well as for the company, partly because he assumed sales and marketing duties. While he is adept and enjoys marketing, he's not so fond of wearing the sales hat.
Last year Lancet tried something new - selling a software product instead of just services. It hired a vice president of sales and marketing to take over, but neither the product nor the VP position worked out. Lancet learned that it was much better at consulting, ditched the product and resumed focusing on its data warehousing and Web-related software services.
Now Lancet is interviewing for a sales position to relieve Niccum of the sales duties. But the salesperson can't come soon enough. And that's something everyone recognizes - even the boss. But he's not the person likely to do the hiring. "I tend to like everyone and want to hire them . . . " he wrote in his review. When asked whether he ever had to fire someone, his face becomes sour. While he contemplates his answer, Chris Holtan, co-founder and vice president of human resources, answers emphatically "Yes."
In the end, Niccum describes the hourlong review as "very fair and reasonable." He doesn't have a lot of homework to do but pledges he will strive to be a better president. Looking forward, Lancet will continue "doing cool things with cool new technologies," he said. "There's a million new applications that haven't even been thought about yet."
Employee comment: "Tom seems to be excited about the future of Lancet and I believe will do whatever it takes to move the company ahead."
Tips on open peer reviews
- Feedback should be clear and descriptive.
- Use accurate wording. For example, instead of saying, "You are rude," say, "You often interrupt others in meetings."
- Focus the feedback on things the person can change. For example, if someone is shy, don't say they should become be less nervous when giving a presentation. You can, however, offer suggestions on specific public speaking techniques.
- If something is bothering you, don't wait until the actual review to offer feedback.
- If you can't think of something constructive to add, opt for silence.
- In sum, feedback should be frequent, accurate, specific and timely.
Source: Lancet Operations Manual