Measures Driving the Wrong Behavior

February 7, 2010

Managers need to be particularly careful when setting up measures that they actually drive the behavior that is desired. It sounds ridiculous to think a measure would actually drive people to do the wrong thing, but it happens in every organization on a daily basis. Be careful it does not happen to you. 

For example, in an effort to boost sales, the CEO instituted “number of sales calls” as a measure. This was based on historical data showing total revenue is highly correlated with the number of sales calls. Unfortunately, with the new measures in place, your sales team spends significantly less time and energy on each individual customer in order to get more sales calls accomplished. This reduces the “hit rate” at closing sales. You are pretty sure the data for this year will show a negative correlation between revenue and number of sales calls, but the measure will show a stellar year, and the sales team will be richly rewarded for making a lot of calls.

In an effort to reduce costs, a measure has been set to decrease the amount of rework in the factory. Rework has accounted for 30% of the product cost, and the goal is to cut that in half. So far the measure is on track, but you have discovered the inspectors are passing slightly defective product that would have been previously rejected. You are fearful that customer satisfaction will take a hit, but at least the level of rework measure will look good so workers will get their bonus.

One significant problem has arisen due to the measure selected for “employee satisfaction.” Based on some HR literature, the senior management has focused on training as the key driver of employee satisfaction. A strong link has been shown between training and motivated employees. Everyone in the organization must have at least 50 hours of training a year for the company to score well on the measure. You are finding that people are being forced to attend training they don’t want or need in order for the corporation to get a maximum score. However, the employees are very unhappy because nobody is there to backfill for the 50 hours they miss, so they have to work extra hard to make up the time. Of course, there is no overtime available because that is too costly. Employees seem really up in arms about this issue and are considering bringing in a union, but the measure is going to show outstanding “employee satisfaction” for the year.

It is critical for managers to verify that the behaviors being driven by the metrics on which people are being compensated are really helping  not hurting corporate performance.


Trust & Transparency The New Corporate Currency

February 2, 2010

In just a few years, Trust and Transparency have moved from an also-ran position in the line up of the things that are important to US Corporate reputation to the number one and number two slots. This represents an unprecedented recent shift in the perceived importance of trust and transparency in organizations. Let’s take a peek at some data.

In 2006, the top three items mentioned by respondents to the Edelman Trust Barometer Survey were:

1) Quality products and services 53%, 

2) Attentiveness to customer needs 47%, and

3) Strong financial performance 42%.  

By the 2010 survey, The top three items were:

1)  Transparent and honest practices 83%,

2) Company I can Trust 83%, and

3) High Quality products or services 79%. 

The astonishing thing is that financial returns dropped from number three on the list to number 10 in just 4 years.  Note that “Financial Returns” in 2010 were still important coming in at 45% versus 42% in 2006. It is just that Trust and Transparency showed up as being far more important – nearly twice as important as financial returns in terms of what is important for a company’s reputation. Put another way, without Trust and Transparency, good financial returns are not going to be sustainable.

For the past decade Richard Edelman and his team have surveyed people around the world. They interview about 5000 people a year. These are college educated professionals from 25 to 65 years old in the top quartile of income and who are savvy about domestic and world events. The data are then analyzed for trends and reported with detailed analysis. The study is about the things that are driving trust in all major countries. The focus of the survey is on three main sectors, Business, Government, and NGOs (Non-Government Organizations).

For the business sector in the United States, these data ring out a signal that is loud and clear. Edelman put it this way:  “Trust, absolutely, is now a product for companies to pursue and pursue avidly. Why? Because it enables company performance and stock price to prosper. We see an interlinking of share price and trust.”  He notes a dramatic correlation between his Trust Barometer and the S&P 500 index over the past several years.

If your company is not measuring the level of trust and actively managing it, you are not focusing on the right things. Seek, through education, to understand these variables and how to obtain and maintain high trust in your organization. It is extremely powerful.      


9 Rules for Making Tough Calls

February 1, 2010

Every day leaders make tough calls, some of which will be unpopular. The leader needs the fortitude to go against the grain if that is required. This toughness can be found in many decision areas such as:

 
• Who are the right people to lead the organization?
• How do you discipline with fairness and compassion?
• Should we grow or shrink the organization?
• What size staff is necessary to support our business?
• When should we exit a business?
• How do we manage scarce resources – money, talent, equipment, etc.?

 
The list could go on, as there are hundreds of areas where leaders make tough calls. Great leaders don’t shy away from controversy; they realize it is why they are called leaders. The best ones make courageous decisions within a framework that guarantees the decisions are the best ones under the circumstances. A typical example of such a framework would look like the following list.   

 
A Framework for Making Tough Calls

 
1. Always operate from a set of values. Test every action and decision to determine consistency with the values and the vision.

2. Do an assessment laying out the facts.

3. Don’t operate in a vacuum. Get input from the people impacted, but do not let the will of the masses dictate the decision.

4. Develop a list of potential decisions, and test the validity and impact of each.

5. Assess support for the decision in advance, and do whatever possible to gain support if it will be unpopular.

6. Act swiftly and decisively, avoiding the “analysis paralysis” problem.

7. Communicate the decision and rationale with high energy, and listen carefully to the feedback.

8. Commit wholly to the decision, and don’t waffle if there is resistance. Admit ownership of the decision. Do not blame someone else.

9. Continually evaluate the impact, and have the courage to admit if it was a mistake.

 
This framework ensures progress toward the vision, while preserving the environment of trust, even if the decision is necessarily unpopular.


Cross Training – The Miracle Cure?

January 29, 2010

Don’t you love the advertisements that promise to cure all your problems just by taking a pill? They try to convince you that all ailments are related, and for only $19. 95 plus S&H you can have a full month supply of the cure – “But wait! If you order within the next 20 minutes, we’ll double your order; just pay separate S&H.” It is amazing that there are people who actually believe this drivel.

For organizational ailments, I believe there is a potion that really does attack many issues at the same time, and you can actually get a double dose for a very low price with no S&H (and the offer does not expire in 20 minutes). The tonic I am referring to is cross training. Let’s look at some of the reasons why this is such powerful medicine.

Link Between Training and Satisfaction

Several studies over the past 50 years have established a strong link between training and satisfaction. Organizations that continuously train their people have higher motivated employees and less absenteeism. If you look at the organizations in the Top 100 companies to work for in the United States, you will see that every one of them has a strong training program in place for employees.

Improved Bench Strength

It is not rocket science to discover the benefits of having people cross trained on each other’s job. Every time an employee is out for an illness or vacation, it is a simple matter of moving people around to cover the lost function. Having several back ups for each position generates the flexibility to operate efficiently in today’s frenetic environment. In sports, we know that a team with great bench strength has an easier time winning than one with monolithic superstars.

Better Teamwork

When people train others on their function, a kind of personal bond is struck that is intangible but powerful. It is really a large teambuilding effort to install a cross training program in a company. People actually enjoy it and rightfully feel the additional skills have something to do with job security. Interestingly in organizations that do not cross train, many people are protective of their knowledge thinking that being the only one who knows procedures makes them indispensable. Actually the reverse is true because when large numbers of people feel that way, there is high tension and the organization fails when someone is out. Jobs are not very secure in organizations like that.

Reduction in Turn Over

An organization that focuses on cross training suffers less from employee churn. Why? Because people have more variety of work and higher self esteem. They have more fun at work and tend to stay with the organization. Also, the opportunities to learn new things adds to the equation. Basically, people operate at higher levels on Maslow’s pyramid in organizations that cross train.

Leads to Higher Trust

Trust is directly related to how people feel about their development. In organizations were people have a solid training program for the future, people know management cares about them as individuals. The discussions to develop the plan are trust-building events because the topic is how the individual can improve his or her lot in life. That is refreshing and bodes well for the future.

Not Expensive

Of all the medications an organization can take for their problems, cross training is one of the least expensive. Reason: Training can be inserted during the little slack periods within an operating day or week. Training keeps people occupied in growth activities when there is nothing much else to do. So, the real cost to the organization is much lower than it appears on the surface. When compared to the benefits, the ROI is fantastic.

Keeps the Saw Sharp

We all know the best way to learn something is to teach it to someone else. This is because in order to explain what you are doing, you have to understand it very well. A cross training policy forces incumbent workers to have their job processes well documented and easy to communicate. Also, in the process of training someone else, there is the opportunity for the trainee to suggest better ways of approaching a task, so the process is being honed and refined all the time. That is healthy because it prevents stagnation.

If your organization does not have an active and specific cross training process, get one started today. It has so many upsides and really no significant downside. If you have a program, ask yourself if it is fresh and vital. Are you milking this technique well or giving it lip service? If the latter is true, you have a lot to gain be revitalizing your process.


10 Tips to Manage Your “Stop Doing” List

January 27, 2010

I am sure you have a “To Do” list from time to time. Some people have a list of must do items every day. It is a great method of remaining focused on the highest priority activities. It is rare to run into someone with a “Stop Doing” list. This is a paradigm that you can break if you put some effort into it. I think having a “Stop Doing” list in parallel with the “To Do” variety is extremely helpful. Here are some benefits:

Numbers Game

Most executives are in a perpetual state of overload. That is because in the pressure cooker of day to day activities, more items come onto the plate than can possibly be accomplished. If you doubt that, just take a look at your e-mail inbox. In every meeting there are new action items to be accomplished and precious little time to do them. It is a habitual problem that leads to burnout and even death due to stress. Executives watch the incoming activities closely trying to manage the load. The common refrain is “I have no time to deal with that now.” They often forget to cull out the non-essential things that take up their time. Anything taken off the plate is a reason to celebrate.

Modeling Prioritization

Executives who focus on stopping things show subordinates that time utilization needs to be managed from both ends. Leaders are used to making tough decisions with budgets and other resources, but they sometimes fail to see how their most precious resource (their own time) is being squandered. Those who manage time actively and vocally send a clear message to the entire organization that seconds really do count.

10 Tips to manage your “Stop Doing” List

1. Keep track of what you are doing. If you have a mechanism to actually see how your time is being spent, you can manage it better. I like to think of colors. When I am doing “green” things, it means I am using my time wisely. “Yellow” things have marginal value, and “red” items are really wasting my precious time. Just keep looking for the color. It can be a kind of game as you sit in a meeting and watch the air turn from green to red before your eyes.
2. Delegate more! This has a dual benefit because often people are eager to help out if only given the chance. There is always some risk when delegating, but the benefits far outweigh the risks. Learn the skill of good delegation and press yourself to apply it more than you currently do.
3. Finish things. Don’t dabble in work. Be crisp with completing assignments so your inbox is clear for new items. When something is completed, celebrate for a second because you now have that off the plate.
4. Spend some brainstorming time with your inner circle cleaning house of useless activities.
5. Create a “Sacred Cow Pasture.” This is a visual board where you post paradigms that have been broken where you no longer have to do what used to take up your time. It is refreshing to fill up a “Sacred Cow Pasture.” Everybody benefits! For example it takes courage to admit we no longer need the quality report because our systems have reached a higher standard. How about doing away with the “cost” meeting and substitute an efficient dashboard? The possibilities are endless.
6. Challenge everything. Try a zero based approach to your day where you come in as if you were a new employee. Ask “why am I doing this and what could be done to eliminate the need for it.”
7. Handle your time like a budget. Think of your task list as a fixed number of things – like say 50 things. In order to make room for a new activity, you must take at least one old activity off your prior list.
8. Reward people who bring up ideas for your “Stop Doing” list. If you reinforce this behavior, you not only help yourself, you help the entire organization because everyone will get the bug to eliminate marginal activities.
9. Go on a “Safari” to hunt down and kill at least 3 unnecessary activities. It can be a fun activity once you get into it.
10. Go away! If you are not there to do things, they will get done just fine most of the time. Go out and visit some customers or attend a seminar for your own development. While you are away, have an administrative person keep track of the things that you would have done if you were there. These are all items you can challenge in the future.

Your “Stop Doing” list is as important as your “To Do” list. Don’t neglect it.


8 Ways To Help Other People

January 25, 2010

Of all the joys of leadership, helping others succeed is one of the most rewarding, and yet many leaders do not show an aptitude for this trait. There are numerous reasons for this from sheer hubris to not wanting underlings to advance beyond them due to insecurity. Probably the most common issue with helping others succeed is that it takes time and effort. Most leaders are so stressed out trying to maximize their own progress, they have little time or energy to perform the tasks that will allow others to blossom.

Here are eight areas where leaders can invest time and energy to find the payoff substantially more than the investment.

1. Become a Mentor

Having a good mentor speeds the development of any professional by 2-3 times the rate that would be achieved if one had to rely on self study and experience. Leaders need to realize that being a good mentor brings numerous advantages not only to the protégé but to himself. Reason: When we coach someone else, we are actually subconsciously coaching ourselves. In addition, the protégé brings information and a point of view that the leader would find hard to obtain without a trusted source of information. Make sure you are actively mentoring at least 2 professionals.

2. Invest Time

Taking time out of your day to coach other people adds perspective and helps prevent burnout. Thinking positive thoughts about what someone could become with the right development is a welcome break from the pressure cooker of critical decisions and time commitments. You will find yourself looking forward to your “people development time” once you get in the habit.

3. Be Accessible

Show by example that it is easy to get through to you. Many top executives insulate themselves from underlings to help manage time. When you demonstrate a willingness to get back to people quickly, it sends a signal that they really matter to you. That translates into improved morale, which directly boosts productivity. It takes a lot of discipline, but if people respect your willingness to be responsive, they will not be likely to abuse the privilege.

4. Empathize In Rough Times

We all go through difficult periods both professionally and personally. When a leader reaches out with moral support during these times, it shows a human side that makes a huge difference. One caveat, however, never reflect sympathy if it is not sincere. People see right through insincere empathy, and it can do more damage than ignoring the problems of people.

5. Get People in the Right Position

At any time, somewhere between 20-40% of professionals are in the wrong job just trying to survive and do their best. When you constantly seek to understand the correct position for individuals, you not only help reduce their personal agony, you improve productivity in giant chunks. This matching process is not a one shot affair. Make it a constant analysis of who could be better placed in another position. Sometimes this will mean a lateral move, or a promotion, or even a demotion. Many people have significantly improved their quality of work life by taking a demotion. It has saved the lives of many professionals.

6. Be a Mirror

When someone has a failing strategy, it is often difficult for the person to even see it let alone know how to change it. You can be helpful at bringing people to reality. Do this in a kind way following the Golden Rule, and you will rarely go wrong. If you avoid getting involved with failing people, you are just letting them drift along with their suboptimal condition, which wastes their precious time and hurts the organization.

7. Develop People – Including Yourself

Make sure every person has a concrete development plan that is not just a string of courses, readings, or seminars. Personal growth is really about helping people rise to their highest possible contribution. Make sure you model personal development yourself. Do not consider that you are too busy for it. Your own development plan should inspire your underlings to have one as well.

8. Write Your Own Eulogy

One helpful exercise is to actually sit down and write your own eulogy. It sounds maudlin, but it is really a helpful exercise. When you crystallize your thoughts about how you would like to be remembered it is easier to see the deltas from your current pathway. Then it is up to you to do something about it.

There are probably dozens of other things a leader can do to help others, but this list of eight things is a great place to start.


Why Are Meetings One Hour Long?

January 22, 2010

The ruling paradigm on meetings is that they should be scheduled for one hour. If a manager sends a note to her administrative assistant to schedule a meeting sometime this week, he will instinctively assume the duration is one hour.

We come by this paradigm through convention, and it is an opportunity to challenge the status quo. Suppose the administration person scheduled the meeting for 50 minutes. What would be the outcome? In most organizations it would mean that everyone invited to the meeting saved at least 10 minutes. As a side benefit, the 50 minutes spent at the meeting would be far more productive because the standard paradigm has been broken.

There are numerous things that can be done to improve the time utilization at meetings, Here are seven of my favorite techniques;

Seven Antidotes:

  1.  Suggest that the person leading the meeting be extremely mindful of the duration. After all, what we have at work is our time.
  2.  Shock people into a realization of what is actually happening: Set up the meeting to start at 2:17 pm and end at 2:49 pm. That would be a 33 minute meeting (if my math is correct).
  3. Put a premium on how the time is spent in meetings. Make sure the agenda is specific as to how much time will be devoted to each topic and stick to that schedule. Have a PITA assigned to keep things on track (PITA stands for Pain in the rear).
  4. Acknowledge the need for important side issues, but do not let them derail the meeting. Handle them efficiently or find another venue to deal with them.
  5. Start and end each meeting on time. Become known as a stickler for this. You can be courteous and bring stragglers up to speed on what has already been accomplished, but you are really enabling them to continue the practice. It is not polite to others to arrive late for meetings. It is also not polite to attendees for the leader to extend beyond the advertised finish time.
  6. Have a set of expected behaviors for your meetings and post them. Hold each other accountable for abiding by these rules. Here is a favorite rule of mine. It is expected that when someone feels we are spinning our wheels or not making the best use of time, he or she will give the “time out” signal to the person running the meeting (finger tips of one hand touching the palm of the other hand). Nobody will be punished in any way for making this sign. It simply calls the question as to whether we are spending our time wisely right now.
  7. Have some time set aside in each meeting to reinforce good behavior and feel good about things that are going well. If we spend 100% of our time dealing with the bad stuff that needs to be fixed, we will never smell the roses.

All these rules are common sense. It is too bad they are not common practice, because they help preserve our most critical resource: our time.


Working Between Layers

January 18, 2010

This is a great place to test your leadership capability. Outstanding leaders are expert at working the interface between levels. They clarify disconnects upward and interpret decisions downward. They recognize that there is always some tension between the layers, but find ways to keep things under control. Do this consistently and well and you will be among the elite leaders.

5 Tips to help you improve the interface between levels:

• Thoroughly understand the point of view of layers below you. Listen to input and test for understanding. Be careful to not let the views of the vocal few characterize the beliefs of the silent majority.

• Recognize that many of the desires of levels below you are human nature. What group would not want more pay, more personal freedom, more recognition, more time off, etc. Don’t discount these needs, but realize they are universal. Try to find more specific suggestions, and be alert for ideas that can be done without major investment. Often it’s the little things that can make a big difference to people.

• Interpreting these needs upward is also an art. Don’t be a whiner for your team. Clarify their needs accurately and objectively.

• Internalize the impact of management actions while they are being developed. Make sure top management knows how things will be perceived at lower levels before actions are announced. Avoid sounding negative in these discussions by offering possible alternative decisions or more creative ways of describing them. Ask questions instead of making blunt statements. For example, instead of saying, “They will interpret this as another attempt by management to line their own pockets,” you might offer, “Would it be better received if we coupled this announcement with the employee bonus plan?”

• Avoid being a “Chicken Little” in discussions with upper management. Ultimately, you need to support and sell these decisions downward, so work to influence your superiors. Do this from a viewpoint of “what is best for the business,” rather than “how to keep the masses from revolting.” Senior managers want to do what is best for the organization. They sometimes need help understanding the impact of poor decisions on their own destiny. You can be the voice of reason, but only if you maintain credibility and perspective.


Maximize Discretionary Effort

January 15, 2010

Every day when people go to work in organizations, they give effort to further the cause of the group. That is about as much as we can say for the general population. The amount of effort as a percentage of what is available varies greatly from one person to another and from one organization to another. The effort for one particular person also varies significantly from one point in time to another.

Each of us has a vast storehouse of “discretionary” effort that we either give or withhold on a daily basis. Let’s examine the factors that govern why some people freely choose to give a lot more of their discretionary effort to their organization while others, equally qualified, habitually hold back most of their potential.

Of course, it has to do with motivation. On any given day, some of are motivated to go above and beyond the requirements and others are turned off. Can you imagine the power if there was a way to have most people in the organization fully engaged in the work most of the time? The result would be a huge productivity improvement for any organization.

The interesting thing to me is that the formula for giving maximum discretionary effort is different for each of us. No two people are completely alike, although there are many things that universally turn people off, the formula for turning an individual on is personal. What follows is a method to discover your key to maximum discretionary effort.

First, visualize a time in your life when you performed at a peak level for an extended period of time of your own free will. Remember the circumstances by which you compelled yourself to put forth incredible effort, often with little rest or breaks. Try to identify what it was in that set of circumstances that enabled you to perform at that level. Here are some examples of what people have thought of for this exercise:

• I had to do it because it needed to be done, and I was the only one that could do it.
• It was a huge challenge; I was told it was impossible.
• I felt empowered; finally I was cut loose to do it my way.
• It was just important for me to get this done.
• I was aspiring to prove something to myself.
• I had to show them what I was made of.
• It was do or die, so I did.
• My team believed in my, so I had to do it.
• I understood the goal and it was important to me.

Keep working at it until you have identified the true essence of what enabled you to perform at that level. Write it down in one single sentence.

The sentence you wrote will be your personal specification for giving your maximum discretionary effort. Many times in life you can configure work to align with this kind of statement. When you do, you will instinctively be performing with at least twice the productivity of your usual pace.

The beauty of this simple exercise comes when you do it as a group activity. I recall one meeting where I had a corporate Vice President with his whole team, and we did this exercise. It turns out the VP was most energized when he had to parachute into the jungle with a knife between his teeth. His subordinates were turned on when they were trusted and empowered to get things done in their own way. The ensuing discussion revealed why there had been so much tension in the organization. Subsequent retraining of the VP led to much higher performance among his direct reports.

You can do this experiment at any level in the organization. Not only will it help you understand yourself better, it will also give you new insight into how to lead your employees.


Assuming Best Intent

January 10, 2010

Assuming best intent is a simple concept that can save a lot of grief and acrimony in any organization. Human beings have a curious way of jumping to conclusions when something done by another person does not track with expectations. We jump to assign blame and think of all the evil things that might be behind the action. In doing so, we fail to take into account a myriad of alternate scenarios that might explain the paradox as being something more benign. We have all experienced this phenomenon, and there is a simple antidote. Assume the best intent rather than the worst.

A place to view this phenomenon most easily is in e-mail communication. One person will dash off a note and leave out a critical part of the background for an action. The person reading the note will say to himself, “Ed is clueless. He obviously is out to try to embarrass me with these statements. I don’t care if he is having a bad day or not, he has no business making these statements without getting his facts straight.” So, what started out as an innocent note from Ed, turns into the fuel for an e-grenade battle. The response coming back to Ed assumes the worst intent, so it is far off base in Ed’s mind. Ed writes back a blistering note, and we are off to the races.

Several days later, after numerous notes and escalating distribution lists some manager steps in and asks these two feuding juveniles to stop the food fight. All of this acrimony and conflict could have been avoided if the recipient of Ed’s first note assumed the best intent rather than the worst.

He would have gone over to Ed’s desk and said, “Your note was confusing to me. I am not sure I follow how you concluded there was no information coming out of my group.” Then Ed could have explained how that was not his message at all, the words just did not convey what he was trying to say. This gives Ed the chance to write a simple note of apology and clarification, which he is happy to do because he was approached in an adult manner.

This technique is helpful for all forms of communication, not just the online environment. If we teach people to assume the best intent whenever there is a disconnect, it prevents people from going off on each other inappropriately. This creates a significant reduction in conflict, and since conflict often gets amplified in the pressure cooker of the work environment, this little remedy can save a lot of hurtful turmoil.