Losing Control

May 20, 2012

The role of supervisor is one of the most challenging positions in the working world. Reason: Supervisors walk the fine line between losing control of the employees or losing employee motivation by being too strict with rules.

In any organization there are going to be norms or rules that people are supposed to follow. Let me illustrate my point with a specific example. Let’s look at the length of the morning and afternoon breaks. Let’s say the standard break in the organization is 20 minutes. That seems simple enough, everyone in the group is supposed to adhere to the 20 minute break.

What you will see if you actually time the break is that most employees stop work let’s say at exactly 9:30 am. They then go to the bathroom down the hall to wash up before going to the break room. They arrive at the break room at 9:40. They get their coffee or whatever and sit down to chat with friends. Since they arrived at 9:40, they take the full 20 minutes and chat till 10 am. Then they go to the bathroom again to get rid of the coffee they just drank. They loiter in the hall and get back to the workplace at roughly 10:15. So, the standard 20 minute break is now more than double the specified length. The afternoon has the same pattern.

This pattern is typical rather than the exception. The supervisor has a difficult time trying to control this situation without seeming to be an ogre. It can go uncorrected for years, costing the organization a huge penalty in productivity.

Supervisors are continually challenged by people to meet their individual and collective needs, even if it means bending some of the rules. If they let one person come to work a bit late because of a child with special needs, then other people are going to come in late with less valid reasons. First thing you know, nobody is showing up on time. Once people begin to see the supervisor is “reasonable” with exceptions to stated rules, he is on a slippery slope in terms of long term control. Trying to get out of the cycle can be vexing because if the supervisor takes a strong stand on rules, then he becomes despised, and people start finding other ways to cut corners.

Here are seven rules that can prevent the erosion of discipline while, at the same time, showing flexibility and respect for individuals.

1. Be alert to the concept of rules being there for a reason. Know the reasons and communicate them when needed.

2. Let people know what the rules are by well-timed reminders, but avoid getting anal about it.

3. Allow open discussion on how the rules should be applied. This has two benefits 1) it serves to remind people of the specific rules, and 2) it gives people some say and creative input into how the rules should be applied in your area.

4. Be consistent on the application of rules. Do not bend for one person and not another.

5. Allow exceptions only when there is good justification, and explain to people why you decided to bend a rule in this case.

6. Intervene early if there are abuses of the rules. Do not let bad habits continue for months before taking action. Reason: if you wait too long, when you finally do try to enforce the rules, you are subject to ridicule and over reaction.

7. Treat people like adults, and they will act more like adults.

My observation is that the best supervisors are those who really care for people enough to expect them to follow the rules and call them out when they do not. A gentle but firm hand that is applied with kindness will work in most cases. That attitude creates long term respect and trust.


Stupid or Brilliant

May 13, 2012

I do a fun exercise in my leadership classes called “Stupid or Brilliant.” I go through a number of scenarios and specify an action that, on the surface, appears to be stupid. In each case, the loss of control would appear to be devastating from a risk point of view. I ask the participants to vote if the action was stupid or brilliant.

There are some examples where there is a documented correct answer, but most of the questions can lead to lively debate. Here is an example of a question with a real answer.

A doughnut street vendor at the base of a skyscraper in New York City noticed that the line was too long while people waited for him to make change. He was losing customers. He put out a box with change and small bills and a sign that read “In a hurry? Make your own change: I trust you!” At first glance, putting money out in trust in NYC would be stupid. People could just take the cash and go. Instead, the vendor found the strategy to be brilliant for three reasons:

1. The throughput of his vending operation increased by 50% because the line moved faster.

2. People started talking about his trust throughout the building, and they came out to buy from this honest vendor.

3. Many people would not even take the change. If their total came to $3.75, they would just put in a five dollar bill and walk away.

Other strategies for trusting people leave room for analysis. For example:

One consultant decided to charge only what the customer felt was appropriate after his work was done. He would leave the fee totally at the discretion of the people he was helping. This tactic defies negotiation logic because it ignores what is called the “call girl” principle of negotiation (the value of the service is greatly reduced after the service is rendered). Yet, this consultant generally did very well and often took away larger fees than he would have if he had negotiated a firm price before doing the work.

One organization was forced by market conditions to do some downsizing. They decided to allow the people being let go to continue to use their old office, computers, and cell phones for several months if they wanted while they looked for work elsewhere. Of course, there were a few stated rules about not being disruptive and honoring professional behaviors while on the premises, but other than that, the severed employees were treated the same as the ones retained. There was a risk, but the company found that in all but a few rare exceptions, the benefits far outweighed the risks.

You can carry blind trust to an extreme where a strategy is truly stupid. One example I give in my classes is this: The owner of a bar does not charge patrons per drink but asks each customer to keep track of what was consumed and pay at the end of the night. Obviously, most people vote for this as a “stupid” strategy. On the other hand, it would make an interesting experiment, because it may be possible that customers would pay more than required on average rather than pay less.

The point is that when we really do trust people to do the right thing, they often respond in ways that defy conventional wisdom. That logic is generally derived from a social norm based on a controlling philosophy. When given the chance, most people react with integrity and gratitude when we extend trust to them.

I have developed what I call the “First Law of Trust.” It is: “If you are unhappy with the level of trust others have toward you, the first corrective action is to find ways to extend trust more to them.” Trust is reciprocal in nature, so the best way to receive more trust is to give more. Try this technique with the people in your life, and you will see a dramatic increase in trust. Often what seems like an unwise risk to take will turn out to be rewarded by far greater loyalty than you can imagine.


Situational Emotional Intelligence

May 5, 2012

Emotional Intelligence (also called EQ) is your ability to understand emotions and your skill at using that insight to manage yourself and your relations with other people. A high EQ is a prerequisite for good leadership because Emotional Intelligence governs the ability to work well with people. Many people view EQ as a static quantity within each person, similar to IQ. In reality, EQ is a dynamic quantity that changes and grows as we gain life experiences.

I participated in an online discussion while teaching a graduate course recently that highlighted the dynamic aspects of EQ. I was asking students to rate their current level of EQ. One person got back that he was strong in EQ, but because of his military background, that skill was not as developed as it might have been. He believes EQ is less important in the military because of the command and control nature of the service. People expect to be ordered around and do not take umbrage at the drill sergeant for yelling. That same behavior in the corporate world would cause instant revolt.

EQ is really situational; it morphs depending on the current circumstances and prevailing culture. That is actually good news, because it means we have some control over our level of EQ and are not stuck with our current level forever.

Suppose a man who had spent most of his adult life as a mediator for contract negotiations in the corporate world decided to change and become a Jesuit priest. Would his perspective on the emotions of other people change with that transformation? In Rochester, New York, Rev. Edward Salmon made that exact conversion. Salmon admits that in many ways running a local Catholic High School is similar to corporate work, but the whole framework of challenging the youth to be all they can be takes a much deeper skill of listening and sensitivity.

As we go through life, our skill at using Emotional Intelligence becomes developed and changes with each new situation. For example, the EQ skills required to convince an ornery teenager to do his homework are not the same as those required to coach a 99-year-old blind man to remain optimistic when confined to a nursing home. Some of the psychological thoughts would be similar, and the values might be roughly the same, like following the Golden Rule, but the emotional framework in the two environments is vastly different. A different set of tools is required to succeed in each of these situations.

I suspect the skill of EQ and how to apply it would be different in unique cultures around the world. For example, one’s behaviors toward other people in the USA might be totally different than that person would show if he or she was brought up in Japan. The cultural differences would drive unique opportunities and challenges.

We know that there is a big difference between how men and women experience Emotional Intelligence. In “Men Are From Mars, Women Are From Venus,” John Gray describes the gender paradigm differences that cause men and women to deal with emotions in totally different ways. For example, women will consult with other women to analyze and resolve problems, while men would rather retreat to their “cave” to deal with difficulties.

It is widely believed that the Corpus Callosum in the female brain is larger than the same organ in a male. The Corpus Callosum is the “highway” in the brain that connects the right side (limbic, or emotional system) to the left side (rational brain). That allows women to process emotions into logical thought much faster and easier than men.

Your background, skill set, and even gender, along with the environment you experience will determine how you employ Emotional Intelligence in a way that is unique to you. That application of EQ will morph as you go through life in ways that nobody else on the planet can experience.


Leaders: Hold Yourself Accountable

April 29, 2012

Several managers I know are fond of saying “we have to hold our people accountable.” I think the process of making sure people need to step up to responsibility is a good one, but it really needs to start at the top. Unfortunately, I see many top leaders failing to hold themselves accountable first.

Let’s envision a plant manager who has a problem of extremely low morale in the factory. The supervisors are telling the manager that people are upset because of no raise in 3 years and the threats of layoffs. They are tired of being abused and kept in the dark. The productivity is at an all time low, and the only way to take cost out is to further reduce the workforce. If you were that manager, how would you go about engineering a rapid turnaround in the performance of your plant?

One interesting strategy is push your chair back from the desk, stand up, walk down the hall, go in the bathroom, look in the mirror, and ask yourself some tough questions like the following:

• Morale is terrible in this plant, and as the manager in charge, how have you been contributing to this problem?
• What is preventing you from fully holding yourself accountable for this awful situation?
• In what ways have you been trying to lay the blame on the supervisors, employees, bad economy, suppliers, business downturn, competition, etc., and how can you deal with the current situations and business environment in a more empowering and effective way for all concerned?
• What fundamental changes in the structure, behaviors, values, and vision are you going to make to completely change the environment?
• What behaviors do you need to change, starting right now, to build a culture of higher trust?
• In what ways can you change the attitudes of the workers by changing your own attitudes and behaviors?
• Since bonuses, or picnics, or parties, or hat days are not going to have much impact on long term motivation, how can you find out what really will inspire people and then implement the proper changes to the environment?
• How can you be a better mentor for your supervisors as well as train them to be better mentors to their own staff?
• How are you going to find a way to quadruple the time you have available to communicate with people?
• Do you need assistance to solve these issues? If so, what kind of help could you use and where can you find it?
• How can you know if or when it is time to pursue other opportunities and let someone with a different skill set handle the turnaround?

Yes, that is tough medicine, and yet I believe if the cold realities in these questions were internalized by some top leaders, conditions might start to change. It is only through the behaviors and attitudes of the top leaders that real changes can be made in an organization. Once top leaders step up to their own accountability, then the rest of the organization will quickly become enrolled in a new and positive vision for the enterprise.


Trust Seeds

April 22, 2012

We are all aware that interpersonal trust is precious. Trust is fragile; it is difficult to build, and easy to destroy. Most people believe it takes a very long time to build up trust with another person. There is an alternate view; if certain conditions are present when people first meet, a “seed” of trust is created upon which further trust will grow if both people continue to nurture it.

In his book “Blink,” Malcolm Gladwell describes the “Thin Slices” we humans use to size up other people within seconds of meeting them. We absorb an enormous amount of data instantly in the body language and the first words uttered by a new acquaintance.

I can recall meeting two influential men last year within seconds of each other. The first one gave me a solid handshake and a smile. He made great eye contact and asked me a question about my family. The second individual gave me a half-limp handshake while his eyes were scanning the room to see who else was there. He did smile, but it was forced and phony. Since that time, I have effortlessly developed a relationship of high trust with the first individual, and I have felt uncomfortable to be in the same room as the second one. The relationship with the first man took several months to develop, but the seed was planted in the first 5 seconds. With the second man, there was nothing for trust to grow on, so a relationship never kindled.

There are numerous things people instantly assess about us. Here are five conditions that allow you to plant a seed on which trust can grow.

Competence – People must be convinced that you know what you are doing to view you as being trustworthy. If they sense that you have the ability from a knowledge and skill set to deliver on your statements, then you pass the competence test. If they have doubts that you can deliver, then they will remain skeptical until there is enough time to test you.

Integrity – Do you have the character to do what is right? People need to feel that you are not duplicitous and that you will stand up for what you believe is right. It does not mean that you always need to agree with others on every point, but people need to see you as a person of high moral and ethical fiber before they are going to trust you.

Reliability – People need to be convinced that you will do what you say. This characteristic normally takes people a long time to test, but it actually can happen quickly. People can discern your reliability through the way you phrase intentions and even the body language you use to chat with them. The ability to follow through with intended actions or at least get back to the other person if conditions change is easy to spot, just as it is easy to observe a blowhard who says nice things but has no intention to actually do them.

Attitude – To gain trust, you need to project a positive attitude when another person is meeting you and ensure that it comes from the heart. Depending on the contextual background of the meeting, a smile is the usual way to show a positive attitude toward another person. Caveat: putting on a false smile is the kiss of death, because it pegs you as someone who cannot be trusted at all. In a different context, a look of concern or sympathy might be a more appropriate way to show a positive attitude toward the other person. Your attitude and demeanor must be heartfelt and congruent with the situation.

Care – It is vital to project that you really do care about the other person. People might say it takes years to know if someone else really does care about you. In reality, care can be displayed in hundreds of small gestures, just as selfishness can be easily spotted. Giving deference to the feelings of others is an important component of Emotional Intelligence. The interesting observation about this is that the people who have low Emotional Intelligence have the biggest blindspots, according to Daniel Goleman. Translated, if you come across as a phony in terms of really caring about other people, you will not have the ability to detect this in yourself, but others will see it instantly.

On the back of my business card, I have a picture of a pile of various seeds. The words say:

Seeds for Growing Leaders
Plant in an environment of trust,
Sprinkle daily with humility,
Weed out negativity,
Place in the light of truth,
Be patient,
Enjoy the fruits of great leadership.

It does take a long time of consistent performance for a very strong bond of trust to build, but the first seeds of trust can be established quickly upon meeting someone. Make sure when you meet a new person that you genuinely project the five conditions above, and you will be well on your way to a trusting relationship.


Drive Out Fear

April 15, 2012

Several decades ago, the now-deceased quality guru, W. Edwards Deming came up with a list of 14 key points for leaders to take that would accomplish what he called “profound knowledge.” Point number 8 on his list was “drive out fear.” I believe this was one of the most powerful concepts on his famous list. The reason is that the absence of fear is a prerequisite for higher trust, and trust is the most important ingredient to higher organizational productivity. In this article, I will share seven tips to help drive out fear.

Fear is one on the most basic of human instincts. It is fear that allowed humanoids to survive during primitive times, and it is still the basis of survival today. Without fear, you would not take the time to look both ways before crossing the street. Too much constraining fear in the organizational context can produce a gridlock of activities among the people that prevent the establishment of trust. Let’s look at some tips that leaders can use to reduce the fear in the workplace, and thus help to increase trust.

Be more transparent

When people are kept in the dark about what things are happening that can affect them, it is only natural to become afraid. When leaders contemplate draconian actions in sealed conference rooms, the word spreads like fire in a tinderbox. Some future actions must not be shared for legal reasons, but in many cases leaders attempt to shelter people from possible actions because they do not want to cause panic. That attitude is false logic. More panic ensues from speculation than would be present if full disclosure was given.

Reinforce Candor

Praise rather than punish people for sharing their observations about inconsistencies. In most organizations, people do not believe it is safe to tell leaders the truth about their observations. Their livelihood might be at stake. When leaders invite open dialog on sensitive issues and reinforce people who verbalize their fears, it tends to extinguish the rumor mill and build a foundation of higher trust.

Be Kind

Treating people with dignity and respect is nothing more than following the Golden Rule. If leaders consistently treated people the way they would like to be treated if the roles were reversed, there would be much less fear in the workplace. When people feel intimidated or bullied, they naturally cower in fear for what might happen to them.

Develop more Emotional Intelligence

Emotional Intelligence is your ability to understand emotions and your skill at being able to use that knowledge to manage yourself and your relationships with others. This skill allows leaders to act in ways that foster open dialog and lower fear. A very good book to help people gain higher EQ is Emotional Intelligence 2.0 by Bradberry and Greaves.

Level with people

Be honest with people and let them know of any improvement opportunities in a supportive way. When people know you are sincerely trying to help them improve, they will be less fearful. Each person has some insecurity regardless of his or her history. Helping people grow is a great way to lower fear.

Care about others

Fear has a hard time growing in an environment where people truly care about each other. The expressions of empathy and sympathy when people are struggling mean they will feel supported in their darkest hours. They forster courage and faith that most problems are only temporary setbacks, and that life itself is an amazing journey.

Trust other people

When trust is present, fear has a hard time surviving. When leaders show that they have faith in the ability of people to do the right things, then they do not project a kind of “gotcha” environment that is evident in many organizations. The result is that people are not on edge wondering when the next outburst will occur.

The absence of unnecessary fear is a huge benefit for any organization. Some fear is good for the self preservation of individuals and organizations, but keeping it at the lowest possible level is liberating and will bring out the best in people.


Real Motivation

April 8, 2012

Every manager I have ever met, including myself, would appreciate higher morale and motivation among his or her team. After all, these two attitudes lead directly to productivity and employee satisfaction, which are pivotal in sustaining a healthy business. Many managers have a stated goal to improve morale, motivation, or both. I contend the mindset inherent in setting goals for these items shows a lack of understanding that actually will limit the achievement of both.

The reason is that morale and motivation are not objectives; they are the outcomes of a great or a lousy culture. If you spend your time and energy trying to improve the environment to include higher trust, then higher morale and motivation will happen. If you try to drive morale, it may sound to the employees like the famous saying, “The beatings will continue until morale improves.”

I have seen a group of people at work with such low motivation, there seemed to be no way to get any work done. If a manager dared try to speak to a group of employees, they would heckle or just pay no attention. Nothing the leader said or did had much impact on the employees, so in desperation, the manager would stoop to threats. This would elicit a half hearted groan and some compliance for a time, but the quality of product would suffer, and the gains would be only temporary.

I have seen that same group of workers six months down the line after putting in a really good leader. The atmosphere was entirely different. The employees showed by their body language that they were eager to do a great job. If there was a dirty or difficult job and the leader asked for volunteers, half a dozen hands would go up immediately. When they were at work, they resembled the seven dwarfs whistling while they worked rather than slaves in the belly of a ship being forced to row.

How was that one leader able to accomplish such a turn-around in just six months? The leader focused on changing the underlying culture to one of high trust rather than just demanding improvement in the performance indicators. The motivation and morale improved by orders of magnitude as a result rather than because they were the objective. Let’s look at some specific steps this manager took early in her term that turned things around quickly:

Built trust – She immediately let people know she was not there to play games with them. She was serious about making improvements in their existence and had that foremost in her mind. She built a real culture where people felt safe to come to her with any issue and know they would not be insulted or punished.

Improved teamwork – She invested in some teamwork training for the entire group, offsite. These workshops made a big difference in breaking down barriers and teaching people how to get along better in the pressure cooker of normal organizational life.

Empowered others – She made sure the expectations of all workers were known to them but did not micromanage the process. She let people figure out how to accomplish tasks and got rid of several arcane and restrictive rules that were holding people back from giving their maximum discretionary effort.

Reinforced progress – The atmosphere became lighter and more fun for the workers as they started to feel more successful and really enjoyed the creative reinforcement activities set up by their leader. She let the workers plan their own celebrations within some reasonable guidelines and participated in the activities herself.

Promoted the good work – the manager held a series of meetings with higher management to showcase the progress in an improved culture. The workers were involved in planning and conducting these meetings, so they got the benefit of the praise directly from top management.

Set tough goals – It is interesting that the manager did not set weak or easy goals. Instead, she set aggressive stretch goals and explained her faith that the team was capable of achieving them. It first, people seemed to gulp at the enormity of her challenges, but that soon gave way to elation as several milestones were reached.

Support – The manager supported people when they had personal needs, and made sure the organization received the funding needed to buy better equipment and tools.

Firm but fair – The manager was consistent in her application of discipline. People respected her for not playing favorites and for making some tough choices that may have been unpopular at the moment but were right in the long run. Her strength was evident in decisions every day, so people grew in their respect for her.

This manager turned a near-hopeless workforce into a cracker-jack team of highly motivated individuals in six months. Morale was incredibly high. Even though improving morale was not her objective, it was the outcome of her actions to improve the culture.

If you want to be one of the elite leaders of our time, regardless of the hand you have been dealt, work on the culture of your organization rather than driving a program to improve morale and motivation. Develop trust and treat people the right way, and you will see a remarkable transformation in an amazingly short period of time.


9 Steps to Rebuild Trust

April 1, 2012

I believe trust between people is like a bank account. The balance is what determines the level of trust at any point in time, and it is directional. I might trust you today more than you trust me. We make deposits and withdrawals in the trust account nearly every day with the things we say and do. Usually the deposits are made in small steps that add up to a large balance over time. Unfortunately, withdrawals can be massive due to what I call “The Ratchet Effect.” All prior trust may be wiped out quickly. Nobody is happy when trust is lost.

I believe trust withdrawals can lead to a long term higher level of trust if they are handled well. Just as in a marriage when there is a major falling out, if the situation is handled well by both parties in a cooperative spirit, the problem can lead to an even stronger relationship in the long term. Let’s investigate some steps that can allow the speedy rebuilding of trust.

Act Swiftly

Major trust withdrawals can be devastating, and the trauma needs to be treated as quickly as possible. Just as a severe bodily injury requires immediate emergency care, so does the bleeding of emotional capital need to be stopped after a major letdown. The situation is not going to heal by itself, so both parties need to set aside normal routines in order to focus significant energy on regaining equilibrium.

Verify care

Both people should spend some time remembering what the relationship felt like before the problem. In most cases there is a true caring for the other person, even if it is eclipsed by the hurt and anger of the moment. It may be a stretch for some people to mentally set aside the issue, but it would be helpful to do that, if just as an exercise. If the problem had never happened, would these people care about each other? If one person cannot recognize at least the potential for future care, then the remedial process is blocked until that happens.

Establish a desire to do something about it

If reparations are to be made, both people must cooperate. If there was high value in the relationship before the breach, then it should be possible to visualize a return to the same level or higher level of trust. It may seem out of reach if the problem was a major let down, but it is critical that both parties really want the hurt to be resolved.

Admit fault and accept blame

The person who made the breach needs to admit what happened to the other person. If there is total denial of what occurred, then no progress can be made. Try to do this without trying to justify the action. Focus on what happened, even if it was an innocent gaffe. Often there is an element of fault on the part of both parties, but even if one person is the only one who did anything wrong, an understanding of fault is needed in this step. Sometimes neither party did anything particularly wrong, but the circumstances led to trust being lost.

Ask for forgiveness

It sounds so simple, but many people find it impossible to verbalize the request for forgiveness, yet a pardon is exactly what has to happen to enable the healing process. The problem is that saying “I forgive you” is easy to say but might be hard to do when emotions are raw. True and full forgiveness is not likely to happen until the final healing process has occurred.

Determine the cause

This is a kind of investigative phase where it is important to know what happened in order to make progress. It is a challenge to remain calm and be as objective with the facts as possible. Normally the main emotion is one of pain, but anger can accompany the pain. Both people need to describe what happened, because the view from one side will be significantly different from the opposite view. Go beyond describing what happened, and discuss how you felt about what happened. Do not cut this discussion off until both parties have exhausted their descriptions of what occurred and how they felt about it. Sometimes it helps in this stage to do some reverse role playing where each person tries to verbalize the situation from the perspective of the other.

Develop a positive path forward

The next step is the mutual problem solving process. Often two individuals try to do this without the preparatory work done above, which is more difficult. The thing to ask in this phase is “what would have to happen to restore your trust in me to at least the level where it was before.” Here, some creativity can really help. You are looking for a win-win solution where each party feels some real improvement has been made. Do not stop looking for solutions just because it is difficult to find them. If you have gotten this far, there is going to be some set of things that can begin the healing process. Develop a path forward together. What new behaviors are you both going to exhibit with each other to start fresh.

Agree to take action

There needs to be a formal agreement to take corrective action. Usually this agreement requires modified behaviors on the part of both people. Be as specific as possible about what you and the other person are going to do differently. The only way to hold each other accountable for progress is to have a clear understanding of what will be different.

Check back on progress

Keep verifying that the new behaviors are working and modify them, if needed, to make positive steps every day. As the progress continues, it will start getting easier, and the momentum will increase. Make sure to smell the roses along the way. It is important to celebrate progress as it occurs, because that reinforcement will encourage continued progress. If there is a another set-back, it is time to cycle back on the steps above and not give up on the relationship just because the healing process is a long one.

In many cases, it is possible to restore trust to a higher level than existed before the breach. This method is highly dependent on the sincerity with which each person really does want the benefits of a high trust relationship with the other person. That outcome is really good news because it allows a significant trust withdrawal to become an opportunity instead of a disaster.


Getting Sach’d

March 18, 2012

Greg Smith wrote his scathing letter of resignation from Goldman Sachs, and it appeared as an op-ed in the New York Times on March 14th. He is out of Goldman Sachs for good, but I believe it was the firm that really got “Sach’d.”

Here we have an insider who was unable to play the game of duplicity and go against his own values. He revealed so much evidence of a corrupt culture that the entire organization is likely to continue its fall from grace. The ouster of CEO Lloyd Blankfein and President Gary Cohn is not assured, but I am willing to bet that they will not be there one year from now. Even before Smith’s diatribe, speculation about Blankfein leaving soon was becoming more prevalent.

The Goldman Sachs PR machine has tried to blunt some of the damage by stating Smith was just one of over 30,000 employees, and it is expected there are going to be some disgruntled employees in an organization that large. If Smith’s accusations are accurate, the Goldman Sachs defense, thus far, has been tepid at best.

Smith’s courage to leave and expose the corruption will cost him in the short term. As William Cohan, author of Money and Power: How Goldman Sachs Came to Rule the World, pointed out: “Smith is toast on Wall Street.” On the other hand, if Smith does not meet some mysterious demise or get run over by a taxi, he is likely to do well as an author himself and flourish on the speaking circuit as a competitor to Cohan. There is undoubtedly enough interest out there to support at least two authors and speakers for several years.

I am neither supporting or denigrating Smith’s claims. I am not close enough to the facts. Rather, I am marveling at the level of candor involved in his letter. Accurate or not, his resignation letter lit up the twitter boards for the last half of the week. It will be an interesting story to follow.

One basic truth stated by Smith in his letter will go down in history as a warning to all top executives who have let hubris or greed push fundamental values to the side. “It astounds me how little senior management gets a basic truth: If clients don’t trust you they will eventually stop doing business with you. It doesn’t matter how smart you are.”

Another favorite quote from his letter is, “Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and you are not currently an ax murderer) you will be promoted into a position of influence.” I am wondering how many of the managers who may be following the “Money over customer well being” philosophy are starting to shake in their boots. How can they change their methods in midstream and be able to look at themselves in the mirror?

I suppose enough money and power can help executives deceive themselves into believing wrong things are OK. After all, Smith himself was participating in the same kind of deception until his conscience could no longer bear it, or perhaps he was put under a kind of pressure he could no longer endure. Regardless, he was not blameless for tolerating the same kind of corruption for at least a few years. Perhaps this affair is a kind of wakeup call that a corporate culture can be a seductive force that enables people to accept and follow what they would otherwise know is wrong.

I am an idealistic soul who still believes in Superman and the premise that good eventually wins out over evil. It did take a lot of courage to do what Greg Smith did. MBA classes will be discussing his letter and its effect for many years to come. It is rare that a resignation can have such a high profile impact. If history shows his points were accurate, then Smith was really one of the good guys. So here’s to all the good people out there who are unwilling to do things they do not believe in just to make the most money possible. Greg Smith made sure they have a greater chance for their reward while still on this earth. For those who still believe in a duplicitous existence, you can look forward to a significant decline in your business, or even extinction.


Avoiding Drama

March 11, 2012

I participated in an interesting discussion in an online class on teamwork recently. The students were lamenting that drama in the workplace is common and very disruptive to good teamwork. While drama is just part of the human condition, I am sure you have experienced unwanted drama and wished there were ways to reduce it.

First, one precaution; There are various different kinds of drama and many different symptoms and sources. In this article, I am discussing the most common kind of drama in the workplace. This is where a person acts out his or her daily frustrations in ways that create chaos and loss of focus that hurt the productivity, effectiveness, and teamwork of the group. I am not addressing the serious drama caused by mental illness or tragic events.

Let’s take a look at the seeds of this problem to identify some mitigating strategies. Drama is a result of people who feel they are not being heard. If an individual believes his or her opinions are valued and considered in the decision process, then there is less need for drama. If the culture is real, and people are not playing games with each other, then the distractions of drama will be significantly reduced.

It is a function of leaders to establish a culture where people see little need for drama in order to be a vital part of the real action. Here are some tips that leaders can use to reduce drama in their organization:

1. Improve the level of trust. High trust groups respect people, so there is a feeling of inclusiveness that does not require high profile actions to get attention.

2. Anticipate needs. Be proactive at sensing when people need to be heard and provide the opportunity before they become frustrated.

3. Respect outliers. When someone’s view is contrary to the majority, there may be valid points to consider. Do not ignore the valuable insights of all people.

4. Hear people out and consider their input seriously. Positive body language is essential to show respect for all people.

5. Work on your own humility. Climbing down off your pedestal means that you are more willing to be on an equal footing with others.

6. Admit mistakes. You gain respect when you are honest about the blunders that you make. People will feel less like acting out in response to your foibles if they see you willing to be vulnerable.

7. Reinforce people well. Providing sincere praise is one way to show respect. This reduces people’s tendency to say “Hey don’t forget about me over here.”

We must also realize that some people are world class at creating drama. For these people it is a kind of sport. They do it to gain inappropriate attention or just to be disruptive. These people need coaching to let them know their antics are not really helping drive the goals of the organization. The leader needs to provide feedback about the issue and set the expectation of improvement. If the drama continues and is disruptive, then the person may be better off in some other organization doing a different function.

Drama is all around us on a daily basis, but good leadership can mitigate the negative impact and keep bad habits from becoming an organizational albatross.


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