Journey of a Serial Entrepreneur

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How to get from where you are to where you want to be

5 Steps to Navigate through Difficult Times

There is little difference in people, but that little difference makes a big difference. The little difference is attitude. The big difference is whether it is positive or negative. W. Clement Stone

The global economy these days is not in the best of shapes. There are endless stories circulating about how the world as we know it is about to come to an end. I was at a workshop last week and someone was talking about the alarming rate at which Chinese factories were closing down. An older gentlemen who had recently set up his first business turned to me and said “Doesn’t all of this affect you as an entrepreneur?”. I explained to him how the businesses I was involved would not be directly affected and in the end it was up to me to allow such news to affect me or not. Later on I decided to write a series about the question to articulate my thoughts on the matter. Listed below are five steps that every business owner should take to re-evaluate their business during these difficult times.

1. Reality Check: A reality check comprises of taking into account the performance of each one of your businesses major components. These include, sales & marketing, operations, human resources and finances. Each division needs be re-evaluated and adjustments need to be made to cater for the changed external environment. Adjustments can include adjusting your pricing models, laying off staff who are not performing, cutting back on unnecessary perks for executives etc. The primary objective of this exercise is to break each division down and build it back up to cater to the changes. To read the adjustments that need to be made to each division in detail please click here.

2. Communication Channels: Without clear channels of communication a business is in a constant state of flux. During turbulent times communication between management, employees and investors needs to be done at regular intervals. This is vital to diffuse the anxiety, frustration and stress that everyone may be feeling due to the current state of affairs. Mechanisms need to be developed to allow management to talk regularly to their star performers, group sessions need to carried out to get everyone on the same page and most importantly, senior management needs to continuously update the team. To learn more on improving your communication channels please click here.

3. Getting an Outsider’s Perspective: When things are difficult and we are busy putting off all the small fires in the business we tend to forget the bigger picture. An outsider in the form of a mentor or a business coach can assist in making sense of things when everything is in a mess. By leveraging on their experience and rolodex, a business has the capability to dodge pitfalls and possibly make some large sales. Also, having someone from the outside affirm the direction that has been selected and the tactics  being used can greatly enhance the confidence level of a team. To learn more about the benefits of an outsider’s opinion please click here.

4. Focus: As a small business we have to realize from the very beginning that we cannot provide every service under the sun. We need to find a niche where we can develop a competitive advantage that will differentiate us from the rest. During difficult times it is paramount that we focus our resources on our core product/services to achieve optimal results. During these times we cannot afford to experiment and lose sight of our regular clients. All efforts need to be geared to ensure that we provide as much value as possible to our existing clientele. To read more about the importance of focus please click here.

5. Positive Outlook: Our attitude towards the changes taking place externally or internally will decide how we navigate our way through these difficult times. We have a choice of either allowing the negativity to get to us and plague the workplace, or to put a positive spin on things. It is critical that the leader’s attitude be one of positivity and optimism. His/Her attitude is very important to the business as a whole and is used as a gauge by everyone else. To read more about the importance of having a positive outlook please click here.

The primary objective of the steps outlined above is to get everyone to think about their business and how the changes in the external or internal environment are going to affect them. I have relied heavily on these steps to help me navigate through difficult times. On the surface they appear to be relatively straightforward, however, I find that when we are down, our thought processes do not function optimally. Negativity seems to penetrate our thoughts and obvious answers elude us. I hope these steps will help you get started on your journey through the tough times ahead. I look forward to your comments and feedback.

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Positive Outlook

A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty. Winston Churchill

When I selected this step I thought to myself, it is such a ‘cliche’ to tell people to remain positive during tough times. It is something which is repeated day in and day out and is, common sense. When things look bad hope for the best and things should get better. Sure, now tell that to someone who lost a fortune in the recent stock market crash or someone who was forced to shut his/her business down. When someone is hit with such a harsh blow and someone comes up to them and tells them everything is going to be alright, one can understand the frustration that he/she may feel with such a comment. Due to this reason I think it is necessary to provide enough space and time to digest what has happened. It is only through reflection that we can understand what went wrong and what we should avoid in the future. At this moment though, we have a choice to make. We could either remain depressed and frustrated or pick ourselves up and get back into the ring.

Along this journey, as entrepreneurs we are bound to fall many times. Some falls will hurt a lot more than others. However we need to learn to pick ourselves up and keep going. When you start your own business there is no longer just yourself to worry about. There will be partners, employees and possibly investors. Our attitude, whether we are the leader or someone who works at the business is very important. As a leader everyone looks up to you to determine how things are going. If we have a negative outlook our attitude would be a direct reflection of our mental state. This will in turn spread negativity through the organization and essentially bring it to a standstill. Therefore, it is essential that correct vibes are dessimated from the top down. It is also equally important to talk to your partners and employees during this difficult period and see if there is any way you could help them out if needed.

As mentioned in the first post of this series, our attitude towards the challenge will decide how we deal with it. Without a positive outlook our problems appear bigger than they are, things move a lot slower and people generally are a lot of less productive. Therefore it is critical that we ensure that our organization deals with the challenge in a healthy manner by talking things through, evaluating their current standing and then selecting the path to reach end goals.

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Communicating Effectively

“The difference between a smart man and a wise man is that a smart man knows what to say, a wise man knows whether or not to say it.” Frank M. Garafola

Will the business survive this downturn? Will I be able to hang on to my job?  Common questions on the mind of all business owners and employees alike in these difficult times. It is only natural to have an heightened level of anxiety during stressful periods. However, if we were to hold all of that stress within ourselves and not have an outlet to release it, things could become ugly very fast. People begin to talk, rumors about layoffs begin to circulate, productivity levels fall, anxiety increases and just about any call from senior management begins to imply that you are about to be fired. All of this can be dealt with reasonably through effective communication. Senior management needs to provide all stakeholders with a clear and candid message about the health of the business and where it is headed. If a culture of candor has not been created in the organization this can lead to uncomfortable and awkward situations. Such an environment needs to be created.

Listed below are some ways to communicate effectively during such periods:

1. One on one sessions: Ensure that you have individual sessions with key players on the team, assess their current needs and answer any concerns they may have. I have found this to be a most effective strategy as it gives the person concerned a platform and ability to speak his mind, at the same time enjoy privacy about his concerns.

2. Group information sessions: Individuals who are responsible for broader functions like operations, marketing, finance and human resources should give talks on how the current situation is likely to impact the business and strategies that can be used to get through this period. Once again this provides the ability for individuals to get an idea of the company from different angles and provides valuable feedback.

3. Layoffs: Firing people is never easy and is something I really do not like doing at all (I don’t think anyone really enjoys it). However, when it needs to be done it should be done swiftly and as soon as possible. Delaying the inevitable is not a smart strategy and only compounds the problem.

4. Updates from senior management: I usually send companies I am involved with updates after every quarter. When times get tough I increase the updates to a monthly or even bi-weekly schedule depending on the situation. This keeps everyone focused on what is important and on the same page.

Depending on the structure of your business I recommend doing whatever is necessary to ensure that everyone is able to bring their concerns forward. Whether it is through group meetings, online forums or one on one sessions. Mechanisms need to be in place so that communication is made feasible as easily as possible. Failure to do so will further deteriorate the business and one could end up losing a lot of key players.

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Focus

One reason so few of us achieve what we truly want is that we never direct our focus; we never concentrate our power. Most people dabble their way through life, never deciding to master anything in particular. Anthony Robbins

During boom periods we tend to spread ourselves thinly over too many projects. This places a great strain on the business and dilutes the focus away from core business units. When times get tough I like to sit down with the team and map out priorities. What has been working? What has not been working? What do we want to achieve? When do we want to achieve it by? and, How will we achieve it? These are some questions I use to start up discussions and get everyone involved in the future direction of the business. As a small business we have to realize from the very get go that we cannot be everything to everyone. We have to pick our spots wisely and make sure we can cater to that one segment really well.

In the past I have made the mistake of drifting away from core business units one to many a time. It may be due to the fact that settling into a routine is something I do not like particularly. I need something different or exciting to be happening. Well after a couple of years as an entrepreneur I can attest to the fact if you keep changing the color of your business whenever you get ‘bored’ very little progress is going to be made. When you look at small businesses which succeed there is always a laser like focus on doing something much better than anyone else doing it. Also there is constant improvement on the product/service. One service which comes to mind is 37signals. They have a bunch of productivity apps which I highly recommend such as Highrise and Basecamp. 37signals has developed for itself a highly profitable niche. It keeps its products as simple as possible and has managed to amass a legion of fans.

Whether a business is experiencing a huge upturn or is stuck in a downward spiral, it is essential they maintain focus on what they set out to do. Select your niche carefully, build a product or deliver a service that brings value to your customers and do not lose sight of your end goals. The future of your business could depend on it.

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Get a Fresh Perspective

A coach is someone who can give correction without causing resentment. John Wooden

During difficult times we tend to get so caught up in our problems that we begin to lose sight of the bigger picture. We keep putting out multiple small fires without really finding their root cause. This leads to feelings of frustration and helplessness. Whenever I have been through times like these, I have found getting a fresh perspective from an outsider very helpful. This could come from a mentor, a business coach or even from individuals whom you hold in high regard in your network. They are able to provide you with advice and feedback on your current situation by looking at the bigger picture. What has always been most helpful for me during these sessions was the ability to put things back into perspective. We often tend to make situations appear a lot worse than they actually are.

Some major advantages you can enjoy with a business coach or mentor are:

1. Experience: Being relatively new to business, there are many things I am not fully aware of. My mentors have always been a source of wealth and information regarding difficult situations. This also has the ability to help you avoid making the costly errors they may have made in the past.

2. Accountability: A leader/coach helps creates an entity you have to be accountable to. They are there to push you on when you become complacent and quick to tell you what you may be doing right or wrong. This has often provided me  with the motivation to push myself harder and achieve results that I may not have without them.

3. Networking: Lastly if your mentor or coach is well connected they instantly become a channel for quality referrals which can boost revenues during slow times. I have repeatedly tapped into this network to generate leads and business when other avenues were not performing up to mark.

Where does one find these coaches and mentors? Well I did it through networking when I was at university, through events, workshops and seminars. I also researched individuals who had excelled in the same industry and dropped them an email. You will be surprised how many people are willing to help if we just care to ask nicely. Use platforms such as Linkedin and tools such as twitter to connect with individuals with more ease. Getting a coach or mentor’s perspective during difficult times may be just what your business needs.

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Getting a Reality Check

“We don’t see things as they are, we see them as we are.” Anaïs Nin

I hear it everyday from someone or the other. “Things are so bad right now, I don’t know how we are going to make it through next year.” One of my usual follow up questions is how the current downswing affected their business? There is a usually a pause for a while and then I get generic answers such as, “no one will buy our product/service”. All this talk of negativity has become viral to the extent that just about everyone is telling you how bad things have become without really rationalizing to themselves what this means to them and their respective businesses.  I do also come across individuals who are aware of the implication of the current downswing on their business, but have shut out the possibility of looking for ways to navigate themselves through this time.

Every business owner needs to give his/her business a reality check during these turbulent times as soon as possible. During the good times we become complacent, inefficiencies tend to set in, payroll gets inflated and expenses hit the roof. When all of a sudden things go from one extreme to the other, we begin to panic and do not know where to start from. There are four main business areas one needs to look into when assessing their business:

1. Customers & Sales: A common first reaction to the recession seems to be that suddenly their customers are going to stop buying. There needs to be a thorough analysis here. Start with understanding your customer’s needs and requirements. How has this changed due to the current climate? What can you offer them which suits their needs at the moment? It could be a longer payment plan, a scaled down version of your product/service or a completely new product line altogether. Other steps could include shifting more business online where you have lower overheads and increased margins. Steps need to be taken to get closer to your loyal customers and to do whatever it takes to ensure that their business remains with you.

2. Human Resources: Take a closer look at your current talent pool. Use performance benchmarks to analyze which employees are making the cut and those who are not. Low performers need to be weeded out and one needs to get closer to your stars. Your stars are critical to your future business success. Provide opportunities for your staff to train themselves with new skills. Adjust your recruitment practices and utilize tools such as linkedin to help identify talent in your network.

3. Operations: During boom times a business tends to add extra expenses. These may be in the form of increased perks, higher head counts and fancy offices. All these expenses need to be analyzed carefully and cuts need to be made wherever possible. Google which is well known for such perks, was forced to cut quite a few of them in the past couple of months due to financial pressure from shareholders. In other sectors, identify ways to move inventory faster. Also look into outsourcing non core functions which could be done at a fraction of the cost by a third party vendor.

4. Finances: I recently wrote a series on financial metrics. I would recommend paying attention to the ones mentioned in my series along with others which are reliable measures for your business. Redo your sales forecast and projections and set realistic goals in accordance to industry averages. Avoid any large outlays which do not justify a reasonable ROI. At times like this, cash is king, and one should do whatever one can to remain liquid. Increase credit terms with suppliers and vendors, ensure customers are preferably paying  a large amount upfront or soon after purchase. Subscription models are a good and stable form of revenue and should be looked into.

Most of the things I have written about above should be done on a regular basis whether we are in a boom or a bust cycle. However research shows, on average the pain of a loss is about twice as much as the joy of a gain. I know I can identify with that. In good times it is easy to take for granted all the things which are working out right. The true test of a business owner comes during nasty downturns like the ones we are in, and the ability to deal with them effectively.

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5 Steps to Better Startup Leadership

Dilbert.com

There is a school of thought which believes that leaders are born, not made. Others believe the same applies to entrepreneurs. I have yet to see any conclusive evidence to support these claims. I am a firm believer that, with enough passion, hard work and ambition, anyone can achieve what they set out to do. Wanting to become a great leader is undoubtedly a most challenging task. Volumes have been written about leadership skills and how to develop them. However, inspiration and understanding concepts from books will only get you so far. If you really want to test your abilities and believe that you have what it takes to be a leader, you must stand up and take responsibility. It is all about being action oriented and wanting to bring out the best in the people who work with you. 

Over the course of the week I have written about five areas I believe younger startup leaders need to become more effective in. I have seen the positive impact on a team’s productivity, motivation and drive when a leader has focused on the following segments:

1. Vision Development: As a leader, it is your initial responsibility to create a vision with your team, one which is strongly rooted in SMART goals. The team must feel and think that the vision is achievable, and know what action steps need to be taken to reach it. It is only when a vision statement becomes more than a piece of paper, will we actually see a boost in productivity of the overall team. To read more about the importance of creating a vision please click here.

2.  Leaders Attitude: A leader’s attitude is usually the defining difference between a good team and a great team. With the right attitude, we assist the team break down mental barriers which may be holding them back, take away the fear of making mistakes and generally help them push themselves further. Pay closer attention to attitude, it should result in a team having higher productivity,and being more motivated and driven to reach their goals. To read more about the importance of a leader’s attitude please click here.

3. Culture of Candor: The ability to express one’s thoughts, opinions and concerns, free from discrimination is something I believe needs to be infused into every team. As a leader, there must be a focus on breaking down psychological barriers which may be holding certain team members back. Being candid allows the team to work more effectively, brings more ideas to the tables as well as issues which may be disrupting the team internally, to the forefront. To learn more about the importance of candor please click here.

4. Resource Allocation: During your startup journey, you will need to make several key decisions regarding resource allocation. A startup without proper allocation of resources, ends up in difficult situations, which may result in layoffs, discontinuing product/services, drop in quality, overburdening of some assets and may even require shutting the business down as a whole. As a leader, it is your responsibility to put systems into place to allocate resources optimally through a structured and rigorous processes, while keeping in mind the larger picture. To learn more about the importance of resource allocation please click here.

5. Team Management: This segment involves more than just making sure everyone on the team is happy or motivated. It requires the leader to take responsibility to develop structured processes to handle recruitment, evaluations, firing and conflict management. As a leader we have to be constantly in touch with our team and the challenges they face, to ensure we do whatever it takes to help them reach their potential. To learn more about the importance of team management please click here.

Undoubtedly the startup leader is in for a lot of surprises. The aim of this series was to equip new startup leaders with some broad guidelines of areas they should be focusing on. I strongly believe that when enough hard work is put into the development of the segments outlined above, they will definitely have a positive impact on the team and the business as a whole. It is important that you enjoy your journey both as an entrepreneur and a leader. I wish you the best of luck in your future entrepreneurial ventures.

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Managing the Team

Dilbert.com

We hear it all the time “People are our most important strategic asset”, it is like a mantra of the business world today, repeated by CEO’s of Fortune 500 companies and new startups alike. However, if  you get down to gauge what leaders and managers are actually doing, to develop and nurture these assets, the standard response includes; our focus is on training and development, creating a conducive work environment or, helping the team achieve a work/life balance. After which there is usually a change of subject, and the topic switches to more ‘exciting’ matters, such as, their latest technology innovation. This has been my personal experience with many leaders and managers. I feel they are missing critical components of what it takes to develop and grow a team. 

I believe the reason too much attention is not spent on the function of ‘HR’, is due to the fact that it’s results are intangible in the short term. What is the ROI of $X on training & development in a year? How does a more rigorous performance management system impact productivity? These are difficult questions to answer. However, trends are now becoming clearly apparent that senior management across the world are beginning to understand the importance of management of this asset. In the coming years, I expect to see radical transformations in this field. So, how does all of this impact a leader of a startup organization? 

As a startup leader, one has to play multiple roles. One of the key roles is to focus on being responsible for the management of your team to the best of your abilities. Until you can afford a good HR resource, this is a responsibility that falls in your scope of work. A couple of key areas where a startup leader should spend time during the early stages of the organization are:

1. Hiring: This component encompasses adding new people to the team, evaluating prospective partners and even vendor selection. In the beginning, adding an additional resource to say a team of 4, is a substantial percentage increase in head count. This resource will have a deep impact on the rest of the team and requires careful selection. As a leader, you are responsible for coming up with basic job descriptions, required competencies and the preferred type of personality needed for the role. Learn to trust your gut instincts as they are usually right. Develop a structured process for the hiring and evaluation stage to streamline future requirements when the team is growing at a faster pace.

2. Evaluation: When we think performance reviews, many imagine complicated forms which take forever to complete, and have no real impact on the individual. This is very true of a lot of performance review processes found in many organizations. I like to keep things simple, a couple of questions relating to past performance, areas where development is required, issues brought up by other team members is all that is needed. I think it is important to have metrics in place which can tell your team members how they are doing and where they need to develop. Develop a short evaluation form and conduct them candidly every quarter if possible.

3. Firing: This is a tough one. I am not comfortable with the firing process yet, it is however an important aspect of being a leader. When a team member, whether a partner or an employee, in spite of repeated reminders and warnings regarding performance or behavior, does not change, a difficult decision needs to be made. This process becomes easier if you have a culture of candor present in your team. One needs to communicate the basis of the decision clearly and be firm. One bad team member is all it takes to drastically reduce productivity and team spirit. The sooner these situations are handled the better.

As a leader it is your responsibility to be in touch with your team constantly. This helps to understand where they need assistance, what their concerns are, as well as be a source of inspiration and guidance. If  all we do is keep paying lip service to ‘developing our most strategic asset’, the team will not be able to reach its potential and we would not have fulfilled our duties as a leader. 

Related Posts:

8 Characteristic of ideal business partners

5 Steps to creating winning teams

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5 Steps to Understanding Psychometrics

“Only those who respect the personality of others can be of real use to them.” Albert Schweitzer

Psychometrics is a field of study concerned with the theory and technique of educational and psychological measurement of knowledge, abilities, attitudes, and personality traits. It is a complex science through which we are able to quantify preferences in an objective and precise manner. This tool has a wide range of applications ranging from team building to benchmarking the personality of a candidate against  particular organizational cultures and environments. It also has a host of benefits which can be realized at both  personal and organizational levels. Outlined below are five steps to make your understanding of the instrument simpler.

1. Fundamentals: At the core of psychometrics lies complex research which revolves around a few main concepts. Reliability, which measures the consistency of the instrument Validity, which measure the characteristics, which it claims to measure. Standardization, which sets up protocols for conducting the test. To learn more about the fundamental of psychometrics please click here.

2. Types of test: Psychometric tests fall into three main categories. The first category measures personality & values of the candidate, this encompasses behavior, drivers and feelings, to name a few. The second category measures aptitude & ability which provides a gauge for the cognitive ability of the candidate. The last category is used for development & guidance used in team building, counseling and personal development. To learn more about different types of test please click here.

3. Personal benefits: Psychometric tests can be great stepping stones to accelerate the process of learning more about yourself. They can be particularly useful in identifying areas of  strengths, personal drivers and your own personal work based preferences. When used correctly under the guidance of a trained consultant you will be able to realize the benefits of this tool more effectively. To learn more about how you could benefit from psychometrics please click here.

4. Organizational benefits: Psychometrics is being integrated increasingly into organizations worldwide. With the increasing level of competition, reliance on productivity and ever growing demands of shareholders, organizations have integrated psychometrics to place individuals accurately, build stronger teams, specifically aiming to reduce the rate of attrition, which is a major issue in the corporate world today. To learn more about how your organization can benefit from psychometrics please click here.

5. Ethics: Psychometrics involves a collection of personal and private information. This information must be used in a manner which builds trust with those taking part in these assessments. A high level of confidentiality needs to be maintained, equal opportunities should given to all and the data from the assessments must be used and shared with the consent of the candidate. To learn more about ethical conduct in the world of psychometrics please click here.

Psychometrics provides a powerful medium to harness individual energy and that of the organization . When highly reliable and valid assessments are used under the supervision of trained consultants, maximum benefit will be derived. The results and reports provided at the end of assessment, can only do as much as you want to do with them. They provide starting steps which need to be taken further to realize any substantial gains. If anyone has questions regarding this subject, I will be more than happy to answer them for you.

* Our organization conducts private and public workshops on “Integrating Psychometrics At Your Organization.” Please contact us if you are interested in learning more about this program at enquire(at)innovogs(dot)com

 

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Ethics and Testing

“Ethics is not definable, is not implementable, because it is not conscious; it involves not only our thinking, but also our feeling.” Valdemar W Setzer

Ethics and integrity formulate basic tenets for achieving a balanced, successful and happy life. Without them, we find ourselves on shaky grounds in life, akin to being without a moral compass to direct us. These principles also apply to the realm of testing, particularly to psychometric testing. This is due primarily to the fact that testing of candidates personality types and cognitive abilities involves sensitive information , in the wrong hands or if used with ill intent it can have extremely damaging implications. I have listed a few guidelines on ethical conduct and psychometrics below.

1. Confidentiality: When a candidate completes his/her test ,the reports of the test must be strictly viewed by authorized personnel only. These reports must not be shared with any third party without the consent of the candidate. Strict measures must be taken to control access to these reports and documents. Once a level of trust has been broken with a candidate salvaging the trust factor of this relationship is a difficult task and one which will severely impact the reputation of your organization.

2. Equal opportunity: At InnovoGS, it is our policy to work positively to reduce inequality with all current employees & potential employees, by ensuring that they are treated equitably, fairly, without discrimination and with dignity and respect, regardless of their age, gender, race, sexuality, disability, religion or belief. This helps in creating a level of trust and comfort with candidates, and eliminates any biases which could impact the assessments. 

3. Data usage: Large amounts of valuable data is collected when psychometric assessments are carried out. If you have a requirement to use this data for research purposes, you need to ensure that you take permission from the candidates on whether their data can be included anonymously as part of the research. It is absolutely essential that you take a transparent position when using psychometrics generated data to ensure the candidate that your intentions are clear.

Psychometrics is a very powerful tool which can be used both positively and negatively. It is the responsibility of the provider to ensure that they have integrated high levels of ethics and integrity into the evaluation process. Unfortunately psychometrics has multiple stigmas attached to it due to the fact that some providers have not been very transparent in their analysis, an aspect that continuously raises a level of suspicion. If you are looking into using psychometrics at your organization or planning on starting a business in this field, please ensure that ethics and integrity are tightly embedded into your corporate culture.

 

 

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