Dealing with and Preventing Outrage

 Karthik Ramanna’s new book, The Age of Outrage, is going to be a welcome addition to those with corporate conflicts and public relation snafus. Ramanna provides a model for responding to and preventing incidents of outrage. He lays out steps, phases, scripts that can guide a leader or anyone trying to effect civil discourse and change. Providing examples in national governments around the globe, corporations, historical incidents and literature, the author illustrates how his methodology eases the outrage. While his book is hopeful, his Coda does delineate how much work is still needed in the 2020’s. 

As many who have experienced resistance to policies or decisions, mutual trust is key and foundational. His scripts can help move opposing parties closer to understanding each other and agreement if both parties are operating in good faith and without ulterior motives. If leaders of an organization or “rebel group” are operating out of self-interest—narcissists, and other toxic leaders who are motivated by short-term monetary or reputation gain rather than the organization’s/nation’s—this methodology may not work. Scorched earth/salted fields types of outcomes may be the goal of such leaders operating in win-lose attitude: if I can’t win, no one is going to win. 

For those who need a glimpse of a future hope, Ramanna’s book can be a methodology for those who might have to respond to outrage in their position.

The Geek Way to Run Your Company

 I appreciated getting an advance copy of Andrew McAfee’s forthcoming book, The Geek Way: The Radical Mindset That Drives Extraordinary Results. I’m all in for extraordinary results, as I’ve been fortunate enough to have seen it happen in turnaround situations—where the employees are hungry for a new style of leadership.

McAfee, an author of many tech books, now puts the culture of successful companies in front of us. He asserts that the culture of speed, openness and other elements provide the medium for growth. He provides data to support his claim, which I’ll discuss below. While the author claims this new way of operating companies started in the 2000s, and is codified in a Netflix presentation openly shared with everyone, he also says that the crux of the Geek Way is found in a stack of business books sky-high. Which probably would include “Creativity Inc.” by Ed Catmull about Pixar’s culture. McAfee’s experience makes this a fun read, but for those of us who have read the mile-high stack of business books about cultures of mutual trust—competence, reliability/dependability, openness, acceptance (of failure in particular) and integrity—and driving accountability, responsibility and creativity will hardly learn much here. We would have seen similar things in Deming’s work, the culture of Westinghouse’s Hawthorne Works operations from the 1920s and 1930s, famous Skunkwork developments for World War II, high-reliability/high-performance military and civil operations teams, and so on. Much of McAfee’s advice can be found in “Built to Last” by Collins and Porras. Or McFarland’s “The Breakthrough Company” for the small- or medium-sized enterprises. Still, this book will help start-up leaders set the right course for their fledgling companies.

Like many other business books, McAfee’s suffers from a lack of contradictory evidence. He and others can write about the 10-50 successful companies practicing the Geek Way. He cannot or does not uncover if there are thousands of companies practicing the Geek Way outside of Silicon Valley, outside of tech, and how successful or not they are. There may be many that don’t succeed. How many tech startups have died, and yet had a Geek Way culture? How many other business failures—and the number is staggering in the first five years of any one business—weren’t prevented by the Geek Way? We may never know because Harvard Business School—of which McAfee had been a faculty member—cannot tell us. There isn’t a database for this.

While he applauds the social aspects of Geek companies—cultural evolution—he neglects some of the complaints that have happened even inside his star companies. There’s still tribalism in society and in tech companies: gender, race, caste are still obstacles to hearing and accepting another’s input or feedback. While constructive debate might be healthy, psychological safety can be key as McAfee points out. Still different personality types and different inherent motivational bases need different communication environments, methods and venues for safety and overcoming timidity. Ethical failures have also occurred in Geek Way companies. Maybe in a few decades we’ll know if Geek Way companies are “built to last.”

Likewise, the inertia in organizational dynamics and corporate culture requires several years to change a non-Geek company into one practicing the Geek Way. It’s why some startup kings and queens have had a hard time moving over to established companies. The people have “grown up” under a different kind of leadership and have a hard time trusting the new leadership styles, especially in the lower ranks who have less exposure to the C-suite.

The author avoids the trap of multiple anecdotes masquerading as data. However, McAfee fails to discern the quality of the data he includes. For example he touts a study of GlassDoor comments. GlassDoor surveys are self-selected, not random. This has an inherent bias towards the theoretical ends of company-culture distributions: the really bad and the really good. So we know nothing of the cultures—perhaps some operating in the Geek Way—of the middlingly rated, middlingly successful companies. 

While there are some inherent flaws in McAfee’s approach—but not unique for business books—his work can be important for those who need to hear and want to hear how the successful tech companies are thriving.

Big Data: Help or Hindrance?

 Tumin and Want in their upcoming book, Precisely, highlight a necessary discussion regarding “big data” and its analysis. While they tout the many benefits of “precision systems”—reliable, reproducible, accurate output from data analysis—they do not overlook the past failures or forthcoming issues if imprecision is not exorcised from our data sets and algorithms. In this regard, this book builds on others like Weapons of Math Destruction. The authors discuss key successes in sports, criminology and business.

They warn against people who want to take action on analysis results before asking the tough, probing questions regarding the collation of data, the assumptions behind algorithms and so on. They caution that the “action vanguard” who blindly trust the data engine outputs will “fire, aim, ready” in that order. Part of the ready, which needs to be first, is ensuring high quality data integrity and freedom from corruption or misapplication.

There are some examples that we can find success by utilizing simpler tools. Many business processes (not just manufacturing) have benefited from timely Statistical Process Control analysis where outliers quickly instigate an investigation to determine if “something” has changed—or other patterns. Like any good business prospectus’ caveat, historical success does not guarantee future success, extrapolation of data should be “taken with a grain of salt.” Too many have been burned assuming projections are linear, only to discover there’s a performance plateau (e.g. market saturation). Whenever we’re dealing with markets and other phenomena of human behavior, it becomes less predictable; behavior changes when it’s observed, sort of like the quantum Heisenberg Uncertainty Principle. I’ve seen results often improve by ten percent just because people knew it was being measured. Consumer trends can run hot and cold in an instant and they become less predictable. Thus, precision systems might have their place in static processes and environments. I wish the authors would address this more completely.

For example, how would the authors build a precision system for most of our endeavors which can be characterized as an Infinite Game (Carse, 1987 and Sinek, 2019). In an infinite game, the rules may change, the competitors may change, the boundaries may not exist and there’s no time limit. In business, I always asked my staff to revisit policies, processes and procedures every six months—and I advise other business owners similarly—because what used to work may not work still: competitors, suppliers, service providers, regulations, customers, team members’ behaviors and skills, community resources, etc. have all changed. (As a Greek philosopher said many centuries ago, “You cannot step in the same river twice.”) 

In addition, we’ve probably all experienced that our metrics were leading us to the wrong behaviors, decisions and goals…and businesses go bankrupt when this happens. So Tumin’s and Want’s precision systems need to ensure that we’re not “putting the ladder against the wrong wall.” Their chapter on transformation, red zones and watching out for misleading correlations is worthwhile.

This is good addition to the data analysis conversation to move us toward reliable, reproducible and accurate results.

Sales Commissions for Life, and Beyond Life

 Recently I talked to a company advertising for fractional CFO/CEO. The business model is: introduce us to your business contacts, we’ll bring in the subject matter experts in 4-5 financial area, and you’ll get a sales commission based on the savings we generate for the new client. Not only will you continue to be paid a portion of the savings as long as the contract is in place, but they are payments that can be made to your estate.

I passed. As I’ve written before, I have a love/hate relationship with sales commissions. A person’s sales commissions can increase because the client’s business increased—without any effort or influence by the salesperson. They did nothing to earn the extra pay but they get it anyway. There is no correlation between the value they bring to the organization, the value they bring to the client and their pay. All they have to do is not cause the client to fire the product/service provider. So strike one on the advertising company is that when they should be paying a referral fee, they’re paying a commission. 

The company argues that nothing is paid unless savings are found and achieved for the client. Still doesn’t mean they should pay, nor should the person accept, perpetual commissions. If they weren’t paying these commissions, could they cut their take on the savings? Probably. Wouldn’t that help the clients to see more of the savings than 50%? Wouldn’t help their bottom line even more if they could retain 60% of the savings? 

Likewise, a lot of these savings could be achieved by internal staff reviewing A/P, credit card, freight, utility bills. Once you enlighten your tax accountant on several of the business credits—like R&D credits, which several of my companies took as we researched/designed new production processes to accomplish custom manufactured parts to customer specs—your tax accountant just automatically reviews those inputs annually after that.

If I signed up I wouldn’t be getting paid for my expertise, but just for my friendliness. I’d hate to have my friends and acquaintances be worried about who else I was going to ‘sic’ on them.

These are the biggest areas to help businesses either. Companies lose more money by not optimizing the one thing that attracts customers to them, instead of to their competitors. They also lose money by not building trust within the organization which can lead to alignment and engagement. These are not things that your competition is not paying attention to. You could really do well by gaining market share and improving your value proposition to the customers.

Leadership Playground

 A synopsis of a Fortune magazine article intrigued me.  It described how Legos’ Leadership Playground increased engagement and motivation. The mantra around the “playground” is be brave, curious and focused.  Then it had a quote from the Chief People Officer saying this increased empowerment and accountability. Does empowerment and accountability increase engagement and motivation?

As I’ve written before from noting key research and my own experiences leading successful teams, empowerment can go a long way towards engagement. Because you’re giving others some (or a lot) of decision-making power, it increases motivation. (See Alfie Kohn’s work and more recent narratives like Daniel Pink’s Drive). Of course, this assumes a lot of mutual trust. Otherwise, leaders will jump in and tweak the new endeavors and then it’s not the team’s idea but the leader’s. Empowerment goes down. Team decision-making goes down. Trust in leadership goes down.

The curiosity factor of the “playground” encourages people to explore new ways of doing their work, overcoming obstacles. This fits in well with The Progress Principle, a critical aspect of improving motivation.

Gathering around the “campfire” in the playground, team leaders can be vulnerable and ask for help. This builds trust. And the thrust of the gatherings is to engender creative collaboration, another key component to improving motivation. Collaboration forces us to look beyond our particular role and realize we each are part of a bigger vision, strategy and customer delight effort.

So at first, I was skeptical that a “leadership playground” could improve engagement but, if handled well, it could.

Business Sustainability: Innovation and Culture

Growth isn't the only strategic goal for a business. How about staying in business and being robust enough to weather economic downturns and worse (pandemics, natural disasters, government collapses or regulatory obstacles such as fuel rationing, etc.)? Unfortunately, most business advice focuses on being competitive in the dimensions of Price, Quality, Delivery, Technology and Service/Customer Experience. Additionally, you might find an emphasis on hiring the best people.

However, all of those things--in their standard definitions--can be duplicated by the competition. Unless there is an extremely high barrier to entry--like an enormous capital investment. Especially there is no way to have exclusive abilities to hire the best; we all hire the best, the mediocre and the worst people available in our labor pool. So then the advice turns to becoming the most efficient and effective through our systems. Likewise, this is a strategy of false hope. There are no unique systems or the uniqueness in the execution of those systems. All of these strategies are trying to make each part of our business processes scalable for growth.

But what if the aspect of your business that created its success is not scalable? Like a chef with a unique vision of flavor subtleties, your business might have a secret ingredient that can't be duplicated throughout a larger organization, multiple sites or longer supply chains or subcontracted services. 

Instead of competing on execution, we then need to compete on innovation, such as agility, high-mix and low-volume offerings and deep market relationships with current customers and potential customers. We adapt our proposals depending on our customers' priorities--and each segment have different priorities. We have developed processes for hearing and discerning our customer preferences and quickly routing their "order" through a procedure that identifies the "exceptions". 

It helps if you have developed a culture of mutual respect, collaboration and engagement--based on mutual trust. This internal, high level of service allows your organization to excellently serve a variety of customers in an agile manner. Since 75% of employees feel disengaged, don't know what their business is really trying to do and how they contribute to it, you could create a real advantage here.

But can you scale innovation and the values for your flourishing culture? I think this is the real trick. And if it's the non-negotiable for being in business, it will determine: 

• how you hire, onboard, develop and promote employees, and doesn't require that you only hire maestros and that the maestros learn to play as part of a symphony instead of insisting on solo acts and the supporting musicians become more competent so that the whole symphony sounds good
• what markets you seek (i.e. the ones that prize innovation and closeness),
• quick adjustments to products and services for evolving/revolving market needs 
• accountability for inter-departmental cooperation, and expected compromise on reallocation of resources as market opportunities arise,
• policies/processes/procedures that are quickly amended when better methods are discovered, 
• discussions that focus on issues and not personalities
• a fairness test for dealing with perceptions of tardiness, laziness, autocratic rule, failure, vocational weakness, wrong fit, and so on 
• the expectations and standards but not necessarily the exact musical score for meeting the standards allowing for discretion--a bit of jazz--on the part of front-line experts to best meet the company's and customer's needs.

Even providing this analysis might have you assume I'm prescribing a formula for success. I know better. Business success is like gardening. You execute the elements and yet there're still external forces and a bit of mystery as to what you achieve: crops:weeds ratio, yield, etc. Business is not carpentry in which you follow the plan and achieve what you set out to build. We cannot control the sunlight, rainfall, pests and so on--though we might try using a greenhouse analogy--just as we cannot control regulatory changes, competitor dynamics, customer fickleness, etc. So we do the best to stay innovative and maintain our values with our internal and external interactions. And hope the market gods bless us with staying in business and perhaps growing until we can't.

What if the Quarterback is Disengaged?

 A friend recently posted a good article on the importance of communicating your organization’s and your team’s purpose. While it certainly is important, it is not everything. It solves one of an organization’s problems according to a Harris Poll:

• 60% don’t know what the business goals are i.e. only 4 people know they’re supposed to be moving the ball into the other end zone—communicating the purpose can certainly solve this problem
• 82% don’t know exactly what they’re supposed to accomplish and how their activities relate to the goal i.e. 9 of 11 people aren’t sure what they’re supposed to do on this play—maybe how you communicate the purpose can mitigate this problem

If you combine these probabilities, chances are you only have one person who knows the goals and exactly what they’re doing to accomplish the goal. And on a football team it’s probably the quarterback. However, without the offensive linemen, running backs and receivers, it’s impossible to be successful. So it’s important that the business purpose is communicated and that there’s a line of sight between what each person does and how the goal is to be achieved.

But the problems don’t stop there: 82% don’t care to be on the team. Not only does the Harris poll describe this incidence rate, but look at the history of Gallup’s Engagement studies. The level of disengagement is essentially the same despite decades of organizations paying attention to it. And what’s worse, 82% probably want to be on a different team. [The only good news in this is that your competition has the same problem.]

Also engagement—commitment and enthusiasm—is not going to change nor is corporate alignment to be highly successful without a lot of extra effort unless…leaders pay attention to the foundation of any organizational dynamics, change and improvement: trust throughout the organizational levels. The team needs to believe others are dependable, have integrity, accepting of strengths/weaknesses/mistakes/victories, open and vulnerable with each other (e.g. willing to ask for and offer help) and have sufficient levels of competency. Without this, Gallup’s prescription is fruitless. 

So how bad is it? Trust Edge (www.trustedge.com) reports that 87% have less than full trust of leadership.

Until we rebuild trust, everything else will be seen as manipulative and engagement is going to stay low. And you can communicate your team’s purpose well, but your team won’t care. They’re ready to jump ship.

If That's True Then We Would See...

 There's an interesting conversation reported in Malcolm Gladwell's Bomber Mafia. A US Army Air Corps General is talking strategy with a Royal Air Force General during World War II. The British prefer blanket or carpet bombing of large, often civilian areas to demoralize the populace who would then press for peace. The US, after much thinking done at the Army Air Corps War College in Alabama, prefer destroying strategic military targets that would hinder the German military efforts. They would rely on the new-fangled Norton bomb site. They could also fly during the day, rather than at night. When asked why the British strategy would work when the Germans, using a similar strategy against the British--think continual bombing of London--were not demoralizing the British people, the RAF General replied, "The Germans are just a different breed."

How often in business do we suffer the same cognitive dissonance? I've seen sales proposals put forth from our companies that we wouldn't accept from our suppliers. Why? Perhaps we believe our customers are "a different breed" from ourselves. Perhaps they'd fall for the poor economics hidden in the "false" rebate or the fine print or the useless warranty. 

I've seen management propose slim merit increases as a percentage to alter performance or cultural behaviors. Management knows they themselves wouldn't change unless the potential was significant--20% or more. I've seen boards rely on financial incentives for executives when money is motivator only for routine work, whereas we need executives to be creative strategically. Instead money will just encourage executives to use the same old, tried-and-true strategies and tactics that have won in the past, but may be useless in any new competitive, regulatory, supply-chain, workforce environments. 

Maybe it's worth using the old Kepner Tregoe problem-solving technique of the Is/Is Not matrix. To solve an issue: first, state the issue clearly so that you know the scope of the problem; second, describe what, where, when, how often, to what extent the problem is and is not--the latter being really key; third, brainstorm possible causes; fourth, test the causes against the "Is" and "Is Not"--the cause has to explain both. For example, if you think the cause is a change in supplied materials for a problem of defects, we would expect to see those defects in other products that use the same materials. If we don't, then the cause is not the supplied materials.

If we expect to see a strategy lead to a demoralized population, we would expect to see it in Britain. If we don't, then the strategy is probably not correct.

If we expect to see increased traffic at our restaurant when we expand our Instagram presence, we could check to see if other meal providers have had an increase when they've expanded their social media presence. If not, let's look for a different strategy. And don't take the word of social media marketers at face value--trust but verify. As one consultant told me, online marketing works for online marketers; that's where you expect to find them so it works. But not everyone expects to find every good or service online in a way that convinces us to buy. (Amazon had 5% of total retail even while having 50% of online retail.)

Note: Gladwell's Bomber Mafia was conceived first as an audio book and this writer highly recommends enjoying the book in that form.

Strategic Benefits?

What is your planning horizon? One year? Three? Five? Ten?? Chances are we’re clear about the effects of our decisions in the near-term: mostly one year, sometimes three if it’s a general policy issue. We might even appreciate that benefit choices are enduring. I wonder if that was the case for employers during WWII and after. When wages were frozen, one of the ways to attract employees was to provide health insurance benefits—which previously had been purchased by individuals. Over the last 6 decades, those benefits are assumed by current and potential employees.

Once a benefit is given, a benefit is hard to take away. I once removed a Perfect Attendance benefit, which added a half-day of vacation for each quarter of perfect attendance, and replaced it with two extra holiday days—floating holidays freely chosen by each employee. It saved a lot of supervisory effort spent to track—and negotiate as in whether there was adequate notice for an excused absence rather than an unexcused absence—those who wanted to have perfect attendance...and instead focus on performance improvements. I received some push-back because I had eliminated a benefit. It seems benefits only have additive policy directions, not subtractive policy directions. I didn’t reverse the decision because it was strategic that we needed to redirect the supervisors’ time towards process improvements, education, problem resolution, etc.

With regard to health insurance, even before the ACA (“Obamacare”) provisions, we were re-thinking the provision of health insurance benefits. In 2008-2010, we weren’t extravagant in the portion we paid but it was a big cost. It was running close to 25% of payroll. What other strategic things could the money be used for that would better insure organizational success? I’m not talking about stock prices. I’m talking about long-term growth through investments in product development, acquisitions, expansions, capital equipment, and so on. Then and today, it was assumed that health insurance premiums were just another cost of doing business, like leases and utilities. Medical costs are out of our company’s control. There aren’t price lists to choose medical procedure, device or prescription options. Many places don’t have provider choices—either you only have one option in your area or you’re locked into one choice by the insurance plan. It’s one area that we don’t control and we have limited solution options—increasing deductibles is one of the most utilized. I’ve even seen arguments that smarter health insurance choices improve employee engagement, which in turn improves productivity. Not so sure about that. For one thing, employee engagement does not improve if organizational trust is not high; health insurance benefits can’t fix low trust levels.

Attracting employees is important. It’s why employer-sponsored health insurance was originally promulgated. What else could we do with 10-25% of payroll to attract candidates and not tie us into a system we don’t control? How much has the cost of health insurance influenced our move towards more part-time employees and how much has that move hindered our employees’ productivity, effectiveness, customer service levels, growth, etc.?

Having healthy employees is important, not just physiologically but also mentally. Peace of mind that there’s a safety net through health insurance can be important for individual productivity as well. But is health insurance the only way to do this? If the benefit/cost ratio is greater than 1, shouldn’t we offer it to the part-timers as well.

What strategies need to be executed for your company to survive, thrive and grow exponentially? How much does providing health insurance help or hinder your ability to succeed?

"He Didn't Really Mean It But That Other Joker..."

We are funny people. We have 2.4 blind-spots (I can't find my reference for this but trust me!), meaning that there are 2-3 things at which we think we're really good, if not great...but everyone else knows we're not. Like I might think I'm really good at recalling references to facts...but...

One of those blind spots for all of us is our integrity, i.e. walking the talk, sticking with our values no matter the circumstances. A speaker at a workshop recently pointed this out with this scenario:

Assume you've grown up in a wealthy family and you're now a young adult. Money wasn't and still isn't a problem. Your parents were able to afford anything they or you or your siblings wanted. You had a nice house, nice cars, remarkable vacations. You went to the best schools and were able to participate in any extracurricular activities you wanted--participating in any of the sports leagues you wanted, music lessons, ballet, seeing movies, theatrical productions, concerts, whatever. Community involvement was important. Your parents donated a lot and benefited the less fortunate. But as a young adult, you discover that one of your parents illegally obtained their wealth--maybe through drug dealing, embezzlement, extortion, murder...You uncovered evidence of that your mom was involved in these unlawful and injurious practices. Would you turn her in?

Assume you were a young adult in a family that struggled to have any extra income. Your family barely paid the bills. As a young adult, you discovered the reason is because your father was paying off a crime family ("You gotta nice store here, Mr. Smith. It'd be a shame if something happened to it.") You've got evidence. Would you turn it into the police?

Most of us struggle with the first question. Few of us struggle with the second. The reason is an in-group bias, a bias towards people in our group, just like us in socioeconomic terms or values or appearance. This in-group bias provides grace and leniency for an individual who has transgressed our values. "Sure, she violated the policy and flew first-class but she's a good performer. She's a VP. We can let this slide by." The same bias encourages us to excoriate the whole group of 'the others or those people' if one of them violates the policy. "We can't let him get away with flying first-class. He's only a supervisor. They'll take advantage of this slip if we don't make an example of him." Note the motivating language concerning individual versus group in both examples.

Of course, to avoid some of this we decide we're going to treat everyone equally in the name of integrity. Then we get trapped by not treating people fairly. "Sorry, I've got to suspend you without pay for three days because you were late 3 days this week. I feel bad that your kids are sick and you struggled to find daycare since they couldn't go to school...but the rule is the rule. I've got to treat everyone the same." We then tend to treat the employee who could care less about getting to work on-time the same as the person who is highly engaged but circumstances hindered their performance.

One of the recommendations is that we try to show the out-group the same love we'd give to the in-group: love the hourly employees the same as we love our C-suite colleagues, love Republicans and Democrats equally, love the people on the corner with the same assistance as we would our neighbor who needed a bit of help...It's not easy. But exercise the muscles a bit everyday by spotting where you're treating 'the others' or 'those people' or the out-group differently from the in-group. Not just in decision-making--personal or corporate--but also behaviorally like who you greet, show appreciation, chastise, etc.

Maria Shriver, wife of Gov. Schwarzenegger, at the time of driving/talking in disregard of state-wide ban

Grow or Die?

We’ve all heard of the Peter Principle (from the 1969 book), a satirical take on organizational effects: we promote people until they reach their level of incompetence. Actually this happens because many of us in leadership assume everyone else is like us—a little ambitious, appreciate challenge, want to get better, want some power/prestige/authority/responsibility. We install performance management systems through which everyone creates development plans. If someone is promoted beyond their capabilities, capacity or desire, and ask to be moved to a lower level, we don’t know how to deal with it. In fact, we often don’t allow it and insist that the person leave the organization.

But what if we could allow it, and graciously allow someone to step back into their previous role or another lower organizational-tier position? Wouldn’t the organization benefit by retaining their expertise, experience and relational capital? Instead, in the perspective of ‘grow or die’, we insist that something is wrong with ‘them’ and therefore, they’re no longer a fit with the company...when last year they were an exact fit with the company before the promotion.

And what if the organization doesn’t have higher positions for them to attain? What if the education system operated like a business and asked every excellent teacher to strive for more responsibility within the organization, leaving only the so-so teachers to actually get the work done of educating future generations?

I bet our organizations would thrive even more and we’d have a level of trust, and therefore a level of engagement that would be the envy of our competitors.

Now I realize I might suffer from Confirmation Bias—I only see the evidence that proves my theory and I’m not open to opposing theories that also fit the evidence—but test it out. Let’s see if we can reject the hypothesis with some data and conclude that maybe it’s better to dismiss the person we’ve wrongly promoted than to reassign them back into their productive position.

No Exclusivity on the Best People

I’ve often said that our competitive advantage isn’t in our people; we don’t have exclusivity on the best people. (Our competitive advantage is how people work together.) Google understood this too. In fact, Laszlo Bock in his book Work Rules points out that we intend to hire the best but instead we hire the average. His telling question: how many of the stars you’ve hired actually get a superior/above average performance appraisal rating in their first year or after? If you’re like most organizations, it’s a low percentage. So what went wrong. Probably the decision-making at hiring time. Here’s an excerpt from an earlier post about it:

At a recent leadership summit, Laszlo Bock, formerly of Google, cited a study in which workers were given some decision-making ability. Those workers nearly doubled their output, reduced costs by 40% and the company profits tripled. This confirms what we've already learned from leadership gurus like Alfie Kohn (who encourages Choice in people's work) and Daniel Pink (who encourages Autonomy in people's work) in order to maintain or improve motivation.

However, this rule doesn't apply to hiring. We all think we're great at it but truthfully we stink. College sophomores were just as likely to select successful employees within 10 seconds of interaction as the hiring professionals. In fact, Google stopped letting managers make the hiring decision. Too many biases to be overcome. It's the same biases that professional scouts suffer from when they ignore the players' stats. It's the same biases that make performance appraisals moot. For example, tall people are perceived as having more leadership qualities. Instead, they had the interviewing teams, including the managers, write up notes on the candidates and then had separate decision-making team actually make the selection based on the notes. Now, it's not perfect. Our memories and observations also have biases. But the decision team probably won't get sucked in because Sally wore an outfit of my favorite color or Ralph looks a lot like my best friend.

Don't give decision-making power for autonomy's sake. Make sure that the decisions can be as objective and rational as possible.

Bock’s point is that we’ve already made a decision about the candidate in the first few minutes and the rest of the time during the interview(s) is confirming our initial impression. We will probably overlook any contradictory evidence during the remaining time.

In addition, our pool of candidates are already ‘self-selected’ as average no matter how they appear on their resume. (Some of you will balk at this.) The best and the brightest—including political astuteness, increasing organizational trust and engagement and self-leadership—are probably not looking unless they really hate their employer. If they haven’t figured out how to handle the politics, or change their team dynamics, they may not be successful at your organization either as they would have to adopt to a new culture. (Exceptions, Bock recognizes, are found through a network that ferrets out those who are trying to be excellent but the ‘system’ is hindering them; those people’s friends will make a recommendation that you should seek them out and hire them.)

So who are we hiring and how do we select for the best? Bock has suggestions, such as those above, plus an active recruitment program (beyond just referral bonus) and slow hiring process to make sure they and the candidates have sufficiently checked each other out.

And then we have the problem of hiring who will work with us and make us look good because they adapt to our leadership style. This will be a problem because, in this case also, we’re not hiring the best and brightest. We’re hiring a certain type of person. I wrote an article about this on LinkedIn and how this can be a problem for succession planning—and for the organization even in the case we get hired away.

No End Game in Business

Sports analogies for business are wrong. This was the intriguing point Simon Sinek recently made in a leadership summit. In his talk, he used some war analogies, which might be closer...but not quite.

In business, we're involved in an "Infinite Game". However, we think we're in a 'finite' game, one with:

• clear rules, 
• defined ways of keeping score and knowing if you're ahead, 
• clear playing field, and 
• known opponents who're following the same rules.

When we apply sports analogies, we think business is conducted this way. In modern war--especially guerrilla warfare--many of these sports analogies don't apply. Instead, like the North Vietnamese in the 1960's and 1970's, they were playing for the long-term. Even though they were 'losing' by many scorecards--e.g. casualty rates 40x greater than the US--they outlasted the US because they were in an Infinite Game:

• rules change all the time
• there's no ahead or behind; there's only getting better at your efforts
• as strategy changes, the playing field boundaries change
• unknown opponents and allies

In an Infinite Game, an ideological rival is of more value to you than a tactical rival. An ideological rival is one that challenges why you're still in business. A tactical rival only challenges how you do your business and what business you decide to grow. The corporate culture that will help your team succeed at the Infinite Game:

• Just Cause: the purpose, vision of your business stated in the affirmative, is inclusive, resilient to changing conditions, is customer-focused and is defined such that all members of your organization know how they can meaningfully and significantly contribute;
• Trusting Teams: a high level of organizational trust is needed to progress (and is especially important for engagement on the mission of the organization) and is evident when people are open about mistakes, doubts, and needing help;
• Worthy Rival: one who pushes you to get better than you were yesterday, because they too are focused on getting better against their own performance and not focused on you (Sinek says he knew Microsoft was in trouble when they were focused on beating Apple and Apple was focused on providing better customer experiences for people using digital devices);
• Existential Flexibility: the Why won't change, but the How and What may e.g. Wells Fargo is still in the connecting people, money and goods and the How changed from stagecoaches to banking
•  Courage to Lead: to go into new territory of behavior, marketing, development, autonomous teams ("trust your people enough to believe they know when to break the rules"--Sinek)

The Real Secret to Employee Engagement

In a mini-workshop today on Servant Leadership, I was asked if Best Workplaces surveys can provide a hint to whether the organization follows Servant Leadership principles (or Transformational Leadership or other nuanced forms of this style of leadership). From what I've seen--and I'm open to learning more about the best/better of the workplace surveys--they ask questions regarding workplace environment and related to a 'happiness' index. It might be indicative of good leadership or at least an absence of toxic leadership--narcissists, bullies and psychopaths.

However, if you believe Wiseman's research on Multipliers, there's not much difference in the behaviors between those that 'multiply' the talents of their teams and those that 'diminish' the talents of their teams and see a drop in performance. Diminishers don't rise to the level of toxic but they're not challenging themselves to serve the team by helping them do their best work. Surveys won't bring this out. Are most of the leaders Multipliers? Do they practice the principle that 'noboby wins unless the team wins'? Are they Level 5 (Collins) taking the blame for failures and sharing the credit for successes? Is the organization's success more important than their own reputation? Do they practice more consult/join decision-making rather than tell/sell?

My question about these surveys is whether they're measuring the level of engagement (enthusiasm, commitment to give their best effort to the organization). Many of the engagement surveys are sort of measuring the 'happiness' index too. I've seen those surveys and at times in my career I could have answered positively to all of the questions but would have been out the door as soon I could leave. Because I didn't trust the organization and its top managers.

Instead, the secret to engagement doesn't have anything to do with communication, recognition/feedback, incentives, benefits, clear goals, interpersonal support. It has everything to do with first having a foundation of organizational trust, good leadership and understanding mechanisms that support change. And then realizing that engagement is a daily event...and needs daily attention. This is the heart of the real secret to employee engagement.

Each day, we decide just how enthusiastic and committed we are when we get in the car, bus or whatever mode of transportation we use. At the end of the day, we make the same decision. It's been shown that the days we're still motivated are the days that we make progress or a contribution to success. Yet managers don't pay attention to this. There are also other aspects that lead to high levels of engagement: choice (autonomy), content (mastery), collaboration (purpose). Those other things--listed at the beginning of this paragraph--don't sustain motivation. In essence, they're just components of good leadership.

Here's the hierarchy of improving engagement--start at the top to reinforce your team members daily decision to:

• Help your team make daily progress/improvement on their work (or stay out of their way)
• Give them opportunities to make decisions (choice)
• Adjust work to fit their skills and expertise and educate them on one more needed skill or bit of information that will help them succeed
• Encourage collaboration with other team members and other teams.

The leaders who pay attention to these things on a daily basis with have employees want to be at work. They'll be making the decision each day that "Yes, I'm excited to go to work and can't wait to give my all!" Managers who focus only on recognition, incentives, communication and other forms of motivation will not see much of a budge on their team's engagement levels.

Popular Leaders?

Early in my career, I was accused of seeking policy changes merely in the effort to be popular with the employees. That was the argument to shunt the focus from any logical, ethical or financial shortcomings of the current policy. And it's unlikely that leaders can become more popular just with policy changes. They give us a temporary bump but, like bonuses and increased productivity/morale, it's pretty short-lived. "What have you done for me lately?" comes up again very soon after the policy change. The popularity level returns based on its innate organizational trust levels--based on perceived and actual levels of integrity, openness, approachability, credibility, competency, reliability.

President John F. Kennedy's net approval (% approved less % disapproved) rating barely took a hit from the Bay of Pigs catastrophe within 3 months of his presidency. In fact, it might be argued that his approval rating jumped over 80% because he acknowledged the error in judgment. Meanwhile, our current president's net approval rating hasn't been above 0 since the early days after inauguration. The only other post-WWII president to have such low ratings was Jerald Ford.

As leaders, we might be able to manipulate popularity but we can only substantially and enduringly improve it by improving trust. If distrust has gained a significant foothold, maybe a crisis (like 9/11) can create a bounce...if you handle it correctly...and you use it as a means of purging the reasons for distrust. Otherwise, after the crisis, the levels of distrust will return and unpopularity reigns. This is the lesson from heart disease patients who continue their detrimental lifestyle after the crisis has been dealt with.

Success Equals Luck

Formula for success? Luck, says the CEO ranked number 1 by Harvard Business Review--not strategy, nor its execution. As the titular head of Novo Nordisk, the largest provider of insulin, you might say his company's success was due to the misfortune of a global health crisis. But they've also stuck with their core competency. Lars Sorenson claims he was part of earlier business diversification disasters, like trying to break into the personal glucose monitoring equipment. They're not good at much but what they've done for the last 90 years: make insulin. It's refreshing to hear a CEO talk about luck. More astute leaders recognize that they have their position because of a lucky opportunity or good timing with some preparation.

Sorenson even dislikes his crowning as the number one leader. He leads a team that does excellent work. He acknowledges that he might have lucked into the position after his predecessor's great leadership to create a foundation he could build on. He also says a great leader in a dysfunctional organization may not have the right metrics for a while, so he hates these kinds of rankings.

Humbly, he admits that he makes the least of any CEO on the list, but he still makes more in a single year than a blue-collar worker makes in a lifetime. But keeping his pay gap relatively small in his company reduces any influence-loss  or resentment that might hinder his credibility with his staff and others in the organization, and it facilitates trust that his decisions aren't based on how much he puts in his pocket. Would other CEO's consider this? Many do, but you don't hear about them.

Customers and Trust

At a recent leadership summit, the head of a service organization described three kinds of customers: dissatisfied, satisfied and loyal. Dissatisfied customers sabotage your brand. You want them to sabotage someone else's brand or become satisfied customers. Those familiar with Net Promoter Score know that one way to improve the score is to transform Detractors into Neutrals (i.e. satisfied customers). Satisfied customers are nice but they don't do much for your brand.

Loyal customers will stick with you. They aren't 'created' overnight. Loyal customers trust your organization and its brand. That takes time. And like other trust relationships, it occurs over several dimensions: dependability, acceptance of your customers' needs and wants, reliability, competence, integrity and approach-ability. These things only happen if all your employees know what to do, what sets your organization apart and are committed to meeting the objectives and/or exceeding customer expectations.

I also recently taught Haitian small business owners on this same point. If your employees don't know what is key for the organization success and what creates loyal customers, they're like a soccer team that's just kicking the ball around. Occasionally it might go in a goal; even less frequently it'll be a goal for your team instead of your opponent's team.

source: concordmonitor.com

Anytime this particular organization opens a new property, the head of the company is there training the first group of employees. "You are the most important people in our guests' lives. If I don't show up, they won't notice. They will notice if you're not here or here completely," he tells them. Their on-site team is so important they focus a lot of energy on selection and orientation. They also spend time on reinforcing the organizational values. As he says, "Coke still advertises even though everyone in the world knows about them."

Encourage Diversity

Sallie Krawcheck, known once as the most honest or last honest stock analyst on Wall Street, in a recent leadership summit exhorted all of us to encourage diversity: not just diversity by race or gender, but diversity in all aspects including talent, thinking styles and personality.

Here's her recipe:

• Acknowledge the differences in all ways that people vary from one another. Start to recognize how those differences bring strengths to your organization, opportunities and challenges.
• Ask different questions regarding team composition and hiring opportunities. For example, don't ask, "Who's the best person in the candidate pool?" but "Which person brings balance to the team?" I often told candidates that many of my questions were trying to figure out what shape of puzzle piece they were and how they might complement the organization, not just fit into the current shaped opening.
• Live the values you and your organization espouse. If people are important, show it by how you respect, trust, honor, develop them and how you accommodate their differences.
• Understand that women are tired with personal, family, work and societal pressures. For example, men may take 15-30 minutes to get ready (post-shower) whereas women take 4-5x longer. As Ms. Krawcheck points out, even an extra 15 minutes per day adds up to a 60 hr work-week/year just to get ready for work.
• Give more feedback with regard to how team members might offer their unique qualities towards the organization's success--such as sharing their perspectives and paradigms to problem-solving or other decisions being made.

Better Receivers

We spend millions if not billions of dollars teaching our managers and supervisors how to give better feedback. And it's still ineffective, whether it's in a formal setting, like the annual appraisal, or the informal like in a meeting or hallway conversation. The problem, according to Sheila Heen and her co-author, is that we are all horrible receivers of feedback. It's the receivers that have the control, whether to accept or reject the feedback.

We reject feedback for a variety of reasons: we believe it's wrong; we don't the trust the motives of the other person; we barely know the other person; the other person is so close to us that the feedback jeopardizes our esteem in their eyes; it attacks what we believe about ourselves, such as strengths, authority, belonging, etc.; and frankly, we may not be in the mood right now. Even when we might have good reasons to reject the feedback, we may want to seek out a friend who can act as a mirror for us. We might want to look for the kernel of truth in the feedback. We don't want to act on the feedback right away because we might be prematurely jumping to conclusions based on fear or desire. We should clarify what the feedback giver means--perhaps the words aren't exactly a clue to the intended message (e.g. "you shouldn't wear those pants today" has various meanings including nothing to do with the pants or you). One thing a friend can do: help you see your blind spots (especially those things we think we're great at doing but everyone else knows we're not). Ask the friend, "What's one thing you appreciate? What's one thing I should stop doing?"

At a recent leadership summit, Sheila Heen described that we struggle with receiving feedback because the internal tension we have is exacerbated: the tension between wanting to improve and wanting to be accepted for who we are today.

If you want feedback to improve, teach others how to receive it, more than how to give it. And be the first student before anyone else. If you, as the leader, can receive feedback in a constructive way, then the rest of your organization will learn from you...and the book.

Violence and Silence

Everyone responds to emotionally charged statements, when there are high stakes involved and opposing opinions, in two ways: violence and silence. You know these responses by their old-school terms describing how we respond to danger: fight and flight. It's the same.

In conversation, the violence or silence can take different forms than actual fisticuffs or hoofing it into a different part of the building. It might be sarcasm, raised voices, passive agreement, capitulation, political maneuvering, etc. According to Grenny, when it matters most, we tend to do our worst.

To overcome the adrenaline-based responses, we need to rebuild trust. People negatively respond more because of WHY they think you're stating your position than to WHAT you're stating. Reaffirm mutual purpose and then reaffirm mutual respect. Go. You have 30 seconds to accomplish this.

You can do it.