There are hundreds of assessments for leaders. The content and quality of these assessments vary greatly. You can spend a lot of time and money taking surveys to tell you the quality of your leadership.
There are a few leading indicators that can be used to give a pretty good picture of the overall quality of your leadership. These are not good for diagnosing problems or specifying corrective action, but they can tell you where you stand quickly. Here is one of my favorite measures.
Builds an Inclusive Culture
Organizations where people at all levels feel a part of the action and are appreciated for the diversity of talents they bring to the organization are run by enlightened leaders. You can observe the leader going out of her way to include as many people as possible in discussions about issues and decisions in the organization.
When I discuss diversity and inclusion, please understand that it includes racial and gender differences, and it also goes way beyond those dimensions. It includes age, ethnicity, background, religion, sexual orientation, different abilities, and a host of other variables.
True diversity is inclusive to all people because the benefits of diversity are obtained when all people in the organization give their best every day.
Less talented leaders surround themselves with a small clique of insiders who guide the fate of the rest of the organization. I visualize a shell around the anointed people on the inner circle. It is hard to communicate through the shell, and people who try to penetrate it are often repelled and scorned.
If you have a leader who operates from a small command and control type style, you can see the bunker mentality in most activities. This exclusivity leads to lower empowerment throughout the organization.
Having an inner circle of leaders may feel like an efficient way to make decisions, but it leaves so much useful muscle and energy off the table.
The bunker mentality means that if you are not on the inside then you are on the outside, by definition. You will comply with the rules, but you will not be engaged in making good things happen. The organization will suffer because of this impact.
To be a winning organization, all of the talents of everyone are required fully aligned behind the vision of the organization. Good leaders know this and instinctively get people involved as much as possible.
Oh sure, there are occasions when it is necessary to operate behind closed doors while decisions are being cast. That is no reason for the normal daily routine to mimic the College of Cardinals who have to send a smoke signal out to the masses when their deliberations are over.
Most activities can be visible, transparent, and inclusive of the general population. In return, people will give their best to accomplish the goals of the organization.
Bob Whipple is CEO of Leadergrow Inc., a company dedicated to growing leaders. He speaks and conducts seminars on building trust in organizations.
Leadership Barometer 66 Builds an Inclusive Culture
September 29, 2020
Leave a Comment » | 
Candor creates trust, Communications, Enabling Actions, HR, leadership, News, Organization, Teamwork, Transparency, Trust, Trust and motivation | Tagged: age, aligned, Assessment, background, bunker, clique, College of Cardinals, correction, decisions, different abilities, diversity, energy, engaged, enlightened, ethnicity, gender, inclusive culture, involved, muscle, organization, outside, problems, racial, religion, sexual orientation, shell, suffer, surveys, talents | 
Permalink
Posted by trustambassador
Successful Supervisor Part 30 – Finding the Key to Motivation
June 11, 2017
I love the study of human behavior and have been actively pursuing it for about 40 years. Maybe if the good Lord gives me another 30 years I will begin to understand the subject more fully.
Human behavior is as complex and far reaching as any topic I can think of, yet for any manager, and especially for a supervisor, the more insight she has the more effective she will be.
A few decades ago, I learned that the sources of motivation are intrinsic and each person is unique. We can see some general patterns in large groups, but the individual differences swamp any ability to understand what drives a person by looking at the group they belong to.
That is why I avoid trying to characterize people by their demographic.
When people ask me how to motivate a millennial, I tell them to stop thinking of the person as an age group and think of him as an individual.
When students get into arguments about whether men or women make better leaders, I tell them to forget the gender stereotypes and think about the unique gifts of each person.
I once had a wise mentor, as my direct boss who happened to be a volunteer fire chief on the side. He and I were walking through a manufacturing plant one day and said, “Do you see that inspector over there? He is a total slug at work. We have to light fire crackers under him to get him to even move. He has no motivation at all; but you should see the transformation when he walks into my fire station. He becomes a ball of fire who does extra duty without even being asked.”
That conversation has stuck with me for years. The key to motivation is to get to know what lights up a person and find a way to provide more of that element.
Using that method, I was able to turn around numerous people who seemed to be lost causes in terms of motivation. I just needed to find out what was in their firehouse and bring more of those elements into the workplace.
If you are a supervisor, try to avoid thinking of all your workers as basically the same. Study their body language and observe what is going on when they get fired up.
Talk to people about their hopes and dreams. Find out what they are looking for in life and show them how you can provide that better than anybody else can. You will see a metamorphosis of motivation that is truly amazing.
Looking for the particular key to a person’s motivation takes a lot of work, but it is like fun detective work, and the impact you can have as a supervisor will be huge if you master this skill.
Think of yourself as the “Columbo” of your organization; just forget about the cigar.
Don’t worry about converting every laggard in the organization. You cannot save everyone. Some portion of people just want to remain lifeless and miserable.
Focus your attention on the people you can fire up. In my experience, roughly half of the people who are underperforming can be super stars, if they are properly led. It is your job to make that happen.
When you can take an individual who is basically dead weight or a complete albatross and convert that individual to a sparkling example of motivation, your reputation of being exceptional about leading people will be assured.
Have fun with the technique, because only you will know the secret to how you are achieving such remarkable results.
This is a part in a series of articles on “Successful Supervision.” The entire series can be viewed on http://www.leadergrow.com/articles/supervision or on this blog.
Bob Whipple, MBA, CPLP, is a consultant, trainer, speaker, and author in the areas of leadership and trust. He is the author of four books: 1.The Trust Factor: Advanced Leadership for Professionals (2003), 2. Understanding E-Body Language: Building Trust Online (2006), 3. Leading with Trust is Like Sailing Downwind (2009), and 4. Trust in Transition: Navigating Organizational Change (2014). In addition, he has authored over 500 articles and videos on various topics in leadership and trust. Bob has many years as a senior executive with a Fortune 500 Company and with non-profit organizations. For more information, or to bring Bob in to speak at your next event, contact him at http://www.Leadergrow.com, bwhipple@leadergrow.com or 585.392.7763
1 Comment | Candor creates trust, Communications, Enabling Actions, HR, leadership, Organization, Teamwork, Trust, Trust and motivation | Tagged: detective, fired up, motivation, organization, Supervisor | Permalink
Posted by trustambassador
Trust: Top Down or Bottom Up?
July 14, 2013
In an organization, trust is generated from the top down rather than the bottom up. Sure, it is important for employees as well as leaders to be trustworthy, but the culture that allows trust to kindle and flourish is usually created by the leaders of the organization rather than the workers.
It is astonishing for me to see the blind spots that many leaders have about how pivotal their behaviors are to how trust is manifest in their entire organization. If the top leader or leaders do not act with integrity and consistency, it creates loops of “work around” activity in all of the other layers. There gets to be a kind of pseudo-trust where people look the part and act the part on the surface, but it is only skin deep. Under the surface, the ability to hold onto trust is as leaky as a bucket that has been used for target practice.
Of all the behaviors leaders display, I think one shines out as being by far the most powerful for sustaining trust, yet simultaneously the most difficult for leaders to master. That is the ability to create an environment free of fear for disclosing one’s opinions about the leader’s actions. In most cultures, people are punished if they express reservations about what the leader is saying or doing. Those cultures continually dampen the ability to sustain real trust, and you get the plastic variety that is evident in many environments.
In brilliant organizations, leaders encourage and reward sharing of scary stuff. I call this skill “reinforcing candor,” because it means the leader is not only open to criticism but actively seeks it. The few leaders who are able to understand the power of reinforcing candor have an easy time building trust and rebuilding trust that has been compromised. This trust is genuine and sustainable; it is not the faux-trust that is so common in most organizations.
If the generation and maintenance of trust is mostly a top down affair, the ability to destroy trust is more balanced. It is just as easy for the rank and file employees to destroy what trust is there as it is for leaders to do it. Acting in ways that show low integrity is the most common method of harpooning sincere efforts to build more trust. Leaders destroy trust when they are duplicitous and fail to follow through on promises. Employees trash trust when they act without integrity in numerous ways, like stealing from the company or spreading rumors.
The nature of trust is that it is always a relative thing. Trust fluctuates based on the situational context of current actions. One should not always expect to find high trust in any area, even the best ones. There are going to be peaks and valleys, and the smart organizations seek a good average and try to dampen out the spikes, both high and low. It is possible for most groups to make great strides in the trust level if they simply work to understand it and improve it daily. Leaders should not become discouraged if there is a lapse in trust; rather, they should redouble their efforts to maintain it.
5 Comments | Candor creates trust, Communications, Enabling Actions, leadership, Organization, Trust, Trust and fear, Trust and motivation, Trust and respect | Tagged: blind spot, bottom up, Candor, lack of fear, layers, organization, relative, top down, Trust | Permalink
Posted by trustambassador
Trust: The First Law
June 22, 2013
Are you dissatisfied with the level of trust within your organization? If so, recognize that you are not alone. Few organizations have achieved a state where they are delighted with the trust that exists. Part of the reason is that trust is a bit like money; no matter how much we have, we usually want more of it. Most of the organizations I see have a significant deficiency of trust that shows up in all kinds of performance issues including apathy, shaky teamwork, poor attitudes, negative morale, low productivity, high turnover, absenteeism, and even revolt or sabotage.
Leaders of the organization point to the symptoms and declare that the employees are at fault for the low trust. The leaders are expending high energy to communicate the vision and values, they are making expectations crystal clear, they are attempting to hold people accountable for performance lapses, they are making sure everyone gets paid on time, so the problem of low trust must be with the employees or first line supervisors, right? Not necessarily!
One critical nature of trust is that it is reciprocal. When you extend more trust, it reflects back to you in nearly all cases. It is the same phenomenon we often hear about with people participating in any activity: “You get out of it in proportion to what you put in.”
I have coined what I call the “First Law of Trust.” If you are a leader, and are unhappy with the level of trust in your organization, the first thing to do is find ways to show more trust in your employees. There are numerous other things that are important to do, which I have written about in other articles, but the first thing is to extend more trust to others. It seems impossible to some leaders who complain, “But how can I trust them when they prove daily that they cannot be trusted.” That attitude is at the core of why there is low trust to begin with. It is a vicious cycle.
To break the cycle, leaders need to find ways, even small ways at first, to demonstrate higher trust in employees. This will seem unnatural to both the leader and the employees at first because of the history of behaviors and reactions in the past. Leaders feel like extending any kind of trust is stupid until the workers start behaving in trustworthy ways, and workers believe the leader must be up to some kind of trick to force them into more work.
I discovered the reciprocal nature of trust many years ago when my daughter was very young. She often wanted me to “twirl” her, which involved grabbing her wrists and carefully spinning around backward (gently at first to not pull her arms out of the sockets). She would fly out horizontal, hair flying in the wind, just loving it. When I would put her down, there was always the familiar refrain “AGAIN.” So I would twirl her again, this time longer and farther.
Upon remembering the numerous times I twirled her, I realized that I had never dropped her. The reason is that her unconditional trust in me required me to reciprocate in a way that kept her safe during the process. So it is with everyone, if we extend trust to them, they will be inclined to show more trust in us.
The way to break down a dysfunctional culture of low trust is not to put the screws to people with additional demands and rules. Try the other approach of extending kindness and trust and see if the positive reaction you get is well worth the risk of extending more trust. If that works, then you will be encouraged to add more trust to others, and you will reap more back toward you.
A common question I get is, “How do I go about showing more trust in them, especially when they do not deserve it?” The answer is to be creative and find little ways to begin to show more trust. These small gestures may seem dangerous, or trivial, but they usually work to grab people’s attention. Here are a few examples of typical actions a leader might employ to demonstrate higher trust.
• Change the coffee money fund from a locked box to an open container.
• Stop walking around the shop floor five minutes before quitting time.
• Let the employees select the menu for the picnic.
• Stop micromanaging and let people use their initiative.
• Remove a needless restriction on a dress code.
• Publicly eliminate a procedure that is no longer useful.
• Cancel a report that nobody reads.
• Quit requiring proof of purchase for small petty cash items.
• Unlock the supply cabinet.
These are just a few examples of actions that could be taken to extend more trust in people. I am sure that if you think creatively, you can identify dozens of other ways to show more trust, and many of them will not involve a high risk of loss. If you try this technique, you will generally get very positive results. In some instances, the prior practices may have the population so jaded that they will be out for revenge at any opportunity, so it may take more creativity and time to develop new patterns.
Remember the first law of trust. It is up to leaders to break the cycle of tyranny and develop a culture where trust goes both ways and grows more robust with time. It takes some courage to change old ways, but the payoff is immense.
4 Comments | Candor creates trust, Communications, Enabling Actions, leadership, Table stakes, Trust, Trust and motivation | Tagged: absenteeism, attitudes, First Law, morale, organization, reciprocal, symptoms, Trust, Turnover | Permalink
Posted by trustambassador
Stretched Too Thin?
July 22, 2012
We hear that the only sure things in life are death and taxes. If you are a manager, one sure thing is that people will tell you there are not enough employees to do the job. I have yet to find an organization where the workers do not feel stretched beyond their ability.
Productivity makes an interesting study, because most behavioral scientists agree that in any organization the actual productivity is a small fraction of the capability inherent in the people. Research reported by the Gallup Organization in 2010 indicates that for average organizations, only 33% of the workers are engaged, 49% of them are not engaged, and 18% are actively disengaged. This low productivity is usually not the fault of the workers, but the result of a poor culture established by top leaders.
The paradox here is that while there is a perpetual outcry for more people in most organizations, the human resources that are available are grossly underutilized. By establishing a culture of higher trust, managers can change the equation dramatically.
We do not need more people; we need better utilization of the people we already have. How do we solve the age-old mystery of getting higher levels of effort and engagement on the part of people? The irony is that when managers look to improve productivity, they often focus on numerous other things and forget that true productivity lies with the motivation of people.
For example, I read an interesting article on productivity in the Encyclopedia of Management 2006, which gives 17 ways to improve productivity in an organization. They are:
1. capital investments in production
2. capital investments in technology
3. capital investments in equipment
4. capital investments in facilities
5. economies of scale
6. workforce training and experience
7. technological changes
8. work methods
9. procedures
10. systems
11. quality of products
12. quality of processes
13. quality of management
14. legislative and regulatory environment
15. general levels of education
16. social environment
17. geographic factors
Notice the amazing lack of motivational aspects in this list. The only factor in the whole list that has much to do with motivation is item 13, quality of management. True, we can improve productivity with capital investments or systems, but the real gold is changing the morale of the people doing the work. That takes an investment of a different kind. My thesis is that the missing ingredient in productivity is trust.
The Trust Across America Organization has gathered some compelling data over the past decade that shows corporations with high trust achieve 500-600% greater returns than the S&P 500. So productivity, and the resulting profits, are available if we can only educate leaders on how to build and maintain higher trust. That revelation means we can stop whining about not enough people and start focusing more effort on the skills needed to grow trust.
Improving the level of trust in an organization starts at the very top. The most senior managers must recognize it is their behaviors and the signals they send that set the tone for everything that happens in their organization. There are several groups and consultants, including myself, who specialize in helping organizations understand the pathways to higher trust.
I recommend that all top managers have a key thrust to change their behavior patterns so that trust begins to grow from the highest levels. Once started, the improvement in trust will naturally flow down through the entire organization, and the first thing you know, the outcry for more people will become muted. The employees are there just waiting to put their shoulder into the work once they are treated the right way.
2 Comments | Candor creates trust, Enabling Actions, HR, leadership, Organization, Trust, Trust and motivation, Trust and respect | Tagged: employees, HR, leadership, management, morale, motivation, organization, Productivity, resources, Trust, utilization | Permalink
Posted by trustambassador
Degrees of Trust
April 10, 2011
Many people use the word trust as if it is a singular concept. You either trust someone or you don’t. Of course, most people realize there are degrees of trust: you can trust someone a little or a lot. A common perception is that the word means one thing, as Webster puts it, “Trust – belief in the honesty, reliability, etc. of another.” The “etc.” in that definition actually covers a lot of ground.
I believe trust is far more complex than can be captured in a single concept. Picture an infinite variety of types of trust and numerous levels of trust for each type. We might consider the different shades of trust to be as plentiful as the different shades of color, and the intensities of trust going from fully saturated to almost transparent. I will share six categories of trust with some specific examples. Recognize this is not an exhaustive treatment of the types of trust, but rather some typical concepts to illustrate the variety and complexity of trust.
Trust Between People
Between any two people who know each other, there is some balance of trust, rather like a bank account balance. The variety of trusting relationships are nearly infinite. Examples are easy to describe, like: parent-child, spouse, boss, peers, people who you have not met but know online, and employees.
In every pair of individuals there exist two threads of trust, one is person A’s trust in person B. The other thread is the reverse of that. The levels of trust from one person to the other are never exactly duplicated in reverse. The level of trust fluctuates on a moment-to-moment basis as we go about our daily interactions.
It is like there are tiny deposits or withdrawals going on whenever these two people interface in any way (even virtually). Sometimes a special circumstance allows a large deposit. Often small withdrawals can become large ones if not handled correctly. I call this “The ratchet effect,” meaning trust is usually built up with many small clicks of the ratchet but can quickly spin back to zero if the pawl becomes disengaged.
Trust in Systems or Agencies
We have some level of faith in a myriad of supportive groups at all times. We often take these things for granted. We trust (or don’t trust) governments at all levels to take care of our society. People trusted Bernie Madoff and his organization for more than 30 years. Other examples in this category are easy to name. For example, we have a level of trust with the military, FDA, banking, the Stock Market, the media.
Trust in the media is particularly interesting because a lack of trust in this system has huge impacts in our trust in all the other agencies. Data shows that trust in the media in the United States is at an all-time low of less than 30%, according to the 2011 Edelman Trust Barometer. This means that most people do not believe what they are being told is happening in the world, at least not fully. The data also shows that many people suspend judgment on what they will believe until they have received the same information at least three to five times from different trusted sources.
Trust in products
Our trust in products is also something we take for granted until we experience a product failure that grabs our attention. A student of mine went to a famous pizza establishment last week and ended up in the hospital for several days with food poisoning. Mattel had to recall numerous infant toys when it was discovered the factories in China did not have control over the suppliers of paint, and there was a potential for lead poisoning of children.
When you stop and think of the trust we place in products of all kinds, it is staggering. Consider the following tiny subset of products we rely on: medications, automobiles, airplanes, tools, internet, and elevators. How often do you worry when getting into an elevator that the cable will break?
Trust in Concepts
We all have various levels of trust with certain concepts or ideals and rarely stop to think about them. For example, we might trust in: the power of prayer, positive thinking, Murphy’s Law, supply and demand, the value of education, or living by values. These concepts help define our relationship to the world and form our total world view. They were programmed into us by the forces impacting us during our formative years. They govern our sense of what is right and wrong and are the basis of our moral and ethical perspectives on life.
Trust in Organizations
We can describe some highly tangible examples of trust in institutions. For example, your level of trust in your own organization, The Red Cross, your grocery store, your auto mechanic, a hospital, the insurance company. Any time we interface with any organization, we are relying on or modifying our perception of our trust in that entity. We do not stop and think about it, but our level of confidence is fluctuating based on every interaction, large or small.
For example, if the insurance company finds some fine print in your contract that states you cannot be compensated for your water-damaged house because you could not prove it was specifically caused by “the weight of ice and snow,” you begin to wonder why bother to have insurance in the first place. In other words, you no longer trust that what you think you purchased is actually what you purchased.
I know a man who went into a hospital for a routine knee operation and had his leg amputated above the knee by mistake. Imagine the trust betrayal he felt when he awoke from the anesthesia.
Trust in Infrastructure
Many of the items in this paper are things we take for granted. Trust in infrastructure is probably the thing we take for granted the most. We turn on the light switch and expect there to be electricity. We turn on the faucet and expect potable water to come out. We expect not to have any deep potholes in the road (although some of us get disappointed on that one). Public transportation is expected to be there on time barring some kind of natural disaster. We expect the school bus to come by to pick up our kids. When we drive over a bridge, we rarely worry that it will collapse and kill us.
All of the infrastructure items are things we just assume will be there whenever we want to use them, and we don’t spend energy worrying about them unless there is some kind of emergency situation.
The list could go on forever, and the possibilities for positive or negative trust are infinite. For every situation, there is a unique aspect to the trust that exists between individuals. In addition to different types of trust, there are different degrees or levels of trust, and the variety of these is also infinite. Let me share just one example of this to clarify.
Trust in one’s boss is one of the more complex and interesting trust relationships in our lives. We think of it as a single thing, like how much do I really trust my boss right now? Actually, I believe there are several dimensions that make up the level of trust with one’s boss. Attempting to show this graphically I tried to form a three dimensional picture of trust but quickly realized there were more than three dimensions that govern how much we trust our boss at any point in time. Here are five examples to illustrate. Actually, there are probably 20 or so similar dimensions we could describe.
Does your boss really care about you?
Saying she cares about you is not the same thing as acting that way when the chips are down. You know instinctively without being told if your boss is saying wonderful things but really does not care about you as a person. Human beings have very sensitive noses for phony concern. Since we are all that way, it strikes me as odd that so many bosses feign caring about people. Don’t they realize that people instantly pick up on the subterfuge on the inaudible channel?
Does your boss know what he is doing?
If your boss is not competent to manage things in an appropriate way, you will find it difficult to trust him without at least checking up on him frequently. Some clueless bosses surround themselves with competent assistants. That works in terms of getting things done well, but it does not enable you to trust the boss.
Is your boss consistent?
Does your boss habitually do what she says she will do? If so, you have built up a reliance on her to deliver on promises. That bodes well for your ability to put your trust in her. If your boss is duplicitous, you never know which face she will be wearing today or what to expect in a certain kind of interface. That ambiguity destroys trust.
Does your boss have integrity?
Do you know that your boss will not try to skate by with half-truths or spin in an effort to make people happy? Many leaders mistake popularity for character. A boss who tries to have everyone happy all the time is a weak boss because he or she will make decisions that are not the best ones for the organization. Do not get the wrong idea. I am not advocating that every boss seek to make it difficult for people. I am advocating that the boss have the integrity to do the right thing at all times, even if it means being unpopular for some percentage of the time.
Does your boss seek to optimize the culture?
Is your boss so consumed with pinching every penny and putting the maximum pressure on people that he has lost the true key to motivation? If he tries to “motivate” people by simply providing incentives while simultaneously grinding everyone down to a bloody stump, people are not going to be motivated, and they are not going to trust him.
These are just five easy tests to determine your level of trust in your boss at any point in time. There are several other trust criteria we could name. The point here is that trust in one’s boss is a very complex equation. The degree to which you trust your boss will be a combination of the five things above plus several other factors. It will vary from day to day or even hour to hour, and trust in your boss is only one slice of how you deal with trust issues in your life. Recognize this and be aware of the incredible variety of trust interactions we have daily. We all want people to trust us, and yet we sometimes forget how complex trust is and how it depends on numerous behavioral actions to endure.
10 Comments | Candor creates trust, Communications, Enabling Actions, Trust, Trust and breach of trust, Trust and motivation | Tagged: Boss, consistency, infrastructure, organization, ratchet, Respect, Stock Market, Trust | Permalink
Posted by trustambassador
Who is “On The Bus” After a Merger?
December 11, 2010
Whenever two groups merge, there is a change in personnel and positions. Typically, there are fewer slots after a merger, so some staff are let go. Often, this winnowing process goes all the way to the top of the organization. A huge conundrum for the health of the business is how to keep the right people on the bus and get the wrong people off the bus.
During the assimilation process after the merger is announced, there is normally an evaluation period where top brass figure out how many positions there are going to be and then seek to fill those slots with the best qualified individuals from the talent pool of the combined groups. After the selection process, the remaining people will receive some painful but expected news.
This process is what appears to be the ballgame with personnel after a merger. Actually, I believe the real ballgame happens long before the official selection process, and top management had better do the right things then or some of the most talented individuals will not be in the crowd when the selection process begins. Long before the announcement of a merger is made, people in both camps are at least vaguely aware that something is afoot. In most situations, the rumor that there is going to be some kind of a major discontinuity has been circulating for months.
People in both organizations are justifiably nervous when facing some unknown hazard that is bound to create casualties. In my own experience, I have noticed that even the highest performing individuals are unnerved enough to start questioning their longevity, at least to themselves. The very best and most marketable individuals have a good chance to land comparable or superior positions in other, more stable, organizations. So, the most valuable people start looking for alternatives long before any forced ranking of staff members takes place.
On the flip side, the least talented people or the ones who are lazy or have interpersonal issues recognize that they are vulnerable. They also realize they are not going to find many opportunities on the outside, so they hunker down and prepare to defend themselves through legitimate or fraudulent tactics. Their objective is to stay in the game if at all possible, and they will do whatever is necessary to ensure that when the music stops they are near an empty chair. This may involve some unfair pushing and shoving.
One of the very first actions top management should take is to identify the critical few people they need to be around for the afterlife in the merged configuration. These people need to be informed that their place in the new order is assured, and it will mean a better existence for them. Of course, that is a tall order because the truth is that there are far too many unknowns in the months running up to a merger to legitimately assure anyone of anything.
In this situation, some kind of contingent bonus may be helpful. Stock options are often used as a tool here because payment can be substantial, but it only occurs when the organization itself thrives. People will think twice about leaving a $100K job to go to a new organization if they can see a potential $1M payout in stock options if the merger is a success.
The downside of any bonus incentive is that of fairness. Basically, top management is singling out a few of the best people (in their opinion) to incent to stay. That will unnerve the mass of people in the middle who believe they are contributing just as much to the prior organization as the fair-haired individuals, but are not receiving an incentive to stay. That sends a chilling signal that impacts motivation and productivity for the majority of people at the very time when the due diligence process is examining the numbers for valuation purposes. This problem can be mitigated if the performance evaluation system in place is sensitive enough to already single out the top 5% of individuals, so any retention incentive can be thought of as an adjunct to the normal performance management process.
Monetary incentives are not the only tool managers can use to allow key individuals to know they are valued during a merger. Simply having a candid discussion about the situation with individuals can go a long way toward having them want to stay on the team. Of course, it is always a good strategy to let the best people know they are valued, but the benefit of doing it is amplified significantly during the months running up to a merger announcement.
Another idea is to have people serve on planning groups that are charged with assembling data for the due diligence process or in developing the communication roll out. When individuals are included in active work to accomplish the merger, they instinctively know there will be a place for them once the dust settles.
Having the right people on the bus following a merger is the most critical consideration governing the success of the effort. I believe it is essential for top management to take steps to ensure the best people stay. These actions need to be accomplished during the conceptual phase of a merger and not while the formal integration process is unfolding.
3 Comments | Communications, Enabling Actions, HR, leadership, Organization, Teamwork, Trust | Tagged: acquisition, downsizing, due diligence, extant data, headaches, human resources, layoffs, leadership, Merger, organization, problems, reengineering, restructuring, Trust | Permalink
Posted by trustambassador
Merger Miseries 5 – Mini Mergers
October 4, 2010
This is the fifth in a series of articles on the trials and tribulations of mergers and acquisitions. The topic for this episode is “mini mergers.” Every day in the news we hear about the mega mergers between giant organizations like airlines and automobile companies. These consolidations typically involve billions of dollars and take many months or even years to accomplish. The moves are the subject of constant Wall Street and popular business press analysis. In reality, there are literally thousands of smaller mergers, acquisitions, or restructurings that go on every day. These smaller but more numerous actions, when taken in aggregate, dwarf the mega mergers in terms of total impact, even though they do not get as much attention.
Any activity to change the way a unit goes about accomplishing its mission is a form of change that involves restructuring the roles of people. The activity goes under a wide spectrum of names, like: reorganization, merger, restructuring, downsizing, acquisition, reengineering, work-out, process improvements, Lean Six Sigma, and layoffs. Regardless of the name, each of these efforts is designed to make the resulting organization more effective than the prior pieces. The problem is that in roughly 80% of the cases, the activity consumes more resources than planned and is far more troublesome than anticipated.
Unfortunately, the tendency is to focus on the mechanical nature of the action with little planning on the consequences on people. For example, if a merger of two groups within a corporation is contemplated, far more energy typically will be spent on the timing of the move and the layout of the new office than on what changes will need to be made to the way people work together during and after the merge. The procedural issues and training needed are usually given short shrift until the mechanical merger is consummated, which misses an excellent opportunity for people to become invested in both the process and the outcome. The typical sequence almost guarantees a lapse in customer service and great consternation among the workers while managers try to sort out the mess.
There is a solution to the problem. It is to begin by addressing why we need to do something in the first place. If we need to be more competitive in order to compete with a new worldwide market, then start by discussing this problem with the people in the organization. Take the time to solicit creative ways to solve the problem that may or may not involve a restructuring of units. Let the individuals affected come to the conclusion that if the organization is to survive at all, something significant needs to be done.
Then, when the topic of combining units comes up, it is born out of involvement with the impacted groups. They can help configure the mechanical set up of the merged entity, and also begin to plan for the impact on people long before the actual event. They can set up groups whose job it will be to take care of customer issues with “one voice” while the organizational turmoil is going on. They can establish training programs for individuals who need to learn different functions. They can help people who are impacted find a path to a viable future inside or outside the old organization. In other words, the impacted people can and should help figure out what to do before the mechanical merger begins.
Involving people is often avoided out of fear that impacted people might get angry and start some forms of sabotage. It is true that there is some risk of that kind of problem, but it is far better to take this risk with eyes open and manage it intelligently. Reason: The vast majority of individuals will act responsibly when they are treated like adults and given some ability to shape their own destiny. Even though considerable pain is involved, a company can get through a transition phase quickly and with grace if top management allows people at all levels to be part of the design process.
1 Comment | Candor creates trust, leadership, Organization, Teamwork, Transparency, Trust, Trust and fear, Trust and motivation | Tagged: acquisition, downsizing, due diligence, extant data, headaches, human resources, layoffs, leadership, Merger, organization, problems, reengineering, restructuring, Trust | Permalink
Posted by trustambassador
Keep Values Simple
August 15, 2010
Simple Values
Few people would doubt the impact of a good set of values for any organization. Values provide a bedrock of beliefs on which leaders build the culture for their group. The true power of values lies in having everyone in the organization not only understand them but live them every day. That is why I believe it is a mistake to make the values too complex.
Some leaders get enamored by the idea of values and create a set of complex rules that would take a rocket scientist to remember. It is not uncommon to have a list of 20-30 values published by a leader. This sounds like a good idea on the surface; after all, the more values we have the better, right? Not so fast! If the list is cumbersome and hard to remember, then people will have a difficult time remembering them, much less following them every day.
Coach Krzyzewski of the Duke Basketball Program modeled a kind of philosophy with values that helps illustrate the power of a short memorable list. He has used the analogy of the “fist” with each finger being one powerful value that is used to create passion and unity among his teams. The fingers represent 1) Communication, 2) Trust, 3) Collective Responsibility, 4) Care, and 5) Pride. By centering all activities in relation to a powerful fist, Coach K has nurtured a consistent champion level team that has won two National Championships.
Another coach who understood the benefits of a simple philosophy of values was Lou Holtz. He took over 6 collegiate football programs in his career. He never inherited a winning team, but never failed to take that team to a Bowl Game by his second season at the latest. His values were boiled down to only three concepts: 1) Do what’s right, 2) Do the best you can, and 3) Treat others like you would like to be treated. The incredible simplicity of this philosophy made it easy to translate the passion embodied in these values into the hearts of all players. The results speak for themselves.
Simple but great values are not just for sports teams. Any organization will benefit from a memorable set of foundational concepts. My home town of Rochester, NY is blessed to be the home of Wegmans, one of the most successful chains of grocery stores in the world and a frequent top placement in the 100 best places to work in America. The current CEO, Colleen Wegman, said of their values, “We’re committed to our Who We Are Values because they set a strong foundation for us as a company – a foundation of caring about people and each other.” The Wegmans values are very simple: 1) Caring, 2) Respect, 3) High Standards, 4) Making a Difference, and 5) Empowerment.
If you are a leader in an organization, challenge your senior team to come up with a handful of powerful words that describe the essence of your core values. Keep the list of values short so everyone will remember and live them daily.
3 Comments | Candor creates trust, Communications, Enabling Actions, HR, leadership, Organization, Teamwork, Trust, Trust and motivation, Trust and respect | Tagged: commitment, honesty, integrity, organization, simplicity, Values, vision | Permalink
Posted by trustambassador