01 Dec 09 The Ridiculous Focus on Approval Ratings

Ok, you can probably tell by my title where this blog is going to go. I have become increasingly more fascinated at the desire that we have to measure effectiveness primarily through numbers. I’ve written on this before in a corporate setting with the idea that measures established to make the vague more concrete become overly important and allow us to ignore the not-so-measurable environmental and cultural changes that are going on around us as leaders. I don’t think we should throw out all of the numbers…I just think we get obsessed with them.

But this is not my point right now. I have noticed more and more this obsession with approval ratings. For example, there was panic a week or so ago when President Obama’s approval rating dropped below 50%. Now it is back to above 50% but the whole issue was silly because there is a 5% margin of error. In other words, we have no idea whether 45% is that much different than 55% because the range of scores is 10%.

Ok, that’s one thing, but here’s the real issue. Leaders can not lead effectively worrying about rolling approval scores. President Obama was not elected to gain public approval. He was elected to lead the nation. The same is true of every governor, mayor and other official who serves public office. Chasing public approval is like chasing employee approval…there are times when you are simply not going to have it. Why is that?

The biggest reason that approval ratings need to be put back on the shelf is that they are short-term measures. Approval ratings as published always represent an immediate and timely response at a specific moment in time. Leadership on the other hand is measured over the long term. You can’t adequately make decisions that are visionary or complex and worry about the response you will get on the day you make that decision. This is the paradox of approval ratings. When published as if they are substantial news, we get confused and concerned because we get the impression that there is something terribly wrong.

One other thing to remember about approval ratings on a large scale. The most reported ratings, those conducted by Gallup, are conducted by phoning between 3000 and 4000 people with the question, “Do you approve of leadership?” or something to that effect. It is as simple as that. In other words, the breaking news that somebody’s approval rating has dropped or risen is based on an answer given by .00001 of the population.

This is the equivalent of asking 1 person in a sell-out crowd at the new Dallas Cowboys Stadium to represent the views of the nation.

While it would be great if we could predict the effectiveness of our President or any other leader based on a simple measure of public opinion, we simply cannot. The same is true of corporate leaders or others in complex systems. There is simply too much we do not know at a given point of view and too great a diversity of opinion to ensure a valid measure. It is important that our leaders hear our views and opinions, but simply having these opinions is no reflection of the effectiveness of the leader.

What do you think?

Tags: accountability, approval ratings, communication, Global Leadership, integrity, leadership approval, performance, politics

28 Oct 09 Leaders Behind Closed Doors

I was asked a week ago by Fox News to comment on the issue of the Health Care Debate. It startled me a bit because I’m not really a health care debate kind of expert and Lord knows I couldn’t solve the issue any faster than anybody else. But their question was specific: “Is it a problem that our leaders have taken the debate behind closed doors?” Of course, Fox being known for it’s “fair and balanced” reporting, I searched through their archives and discovered that they had started this ongoing story showing the closed door in Washington and asking the question, “What are they doing in there?”

In case your not familiar with the process, the way this works is that Fox in this case, or any network for that matter, asks their “expert” a few questions, you give them your answers and then they decide if they want you on their show. This is not an issue of censorship or some manipulation as much as it is their way of ensuring that they don’t have three people with exactly the same opinion or one person who doesn’t have anything to say, etc. Unfortunately we weren’t able to find a studio close to where I was at the time so I didn’t make it to the party.

That was disappointing because, as it turns out, I DID have an opinion on the subject. I just didn’t know it until they asked the question. Yes, it can be a problem when leaders go into seclusion to have top secret discussions because, the longer we don’t know what is going on, the more likely we are to fill in the gaps and speculate as to what is going to happen. In general terms, the more transparent, the better.

However, with the health care debate, if there is truly going to be a debate and an effort to come up with a compromise solution, it would almost have to be done behind closed doors. Democrats and Republicans alike painted themselves into a corner during the histrionics of the townhall meetings, tea parties and the like. By

playing to the drama of the moment, they scripted themselves into a non-negotiable position, an all-or-nothing position. If they are going to reach a compromise, they will have to do it outside of the eye of the media where image is everything. The American public has a right to know what impacts them. We have a right to be heard on the issues, which was the purpose of the townhalls and the various forums that have been held in the last months. And we will want to know, when we are considering our representatives for re-election, where they actually stood on the issues that are important to us. But we have to be willing to let them do the work we have put them there to do. We need to quit second-guessing the process and let the debate proceed to some outcome. Otherwise, our leaders aren’t leading…they’re playing to the media.

We have created such an atmosphere of political mistrust that any time we can’t hear what our politicians are saying or see what they are doing, we are suspicious. Actually, even when we CAN hear what they are saying we are suspicious. This is a bigger issue. Any survey I’ve read in the last 24 months has said that we simply have no trust in our elected leadership. We vote for the one that we mistrust the least! This has got to change if we are ever going to have the kind of healthy and productive dialogue that can move us forward. I would even go so far as to say that we actually have some politicians that are trying to do the right thing, both Democrat and Republican, and that deserve to be trusted. But there’s too much drama. The legitimate voices of reasoned debate are drowned out by the screaming and yelling of the overly pumped up. That’s why the current meetings are behind closed doors…for a little silence to be able to get the work done.

Neal Cavuto, in this pre-interview conversation, asked me if what I was trying to say was that the media needed to shut up and let the politicians do their thing. My answer…not really. I mean, the public doesn’t trust the media either. There are conflicting goals in play between the need to present crucial news and the need to draw viewers and readers to the drama. If there were no cameras there would be no theater. On the other hand, there would be no accountability either. The media should keep doing what it’s doing, but do it honestly. Editorial should be acknowledged as editorial and news should be presented as news. We need to separate the entertainment from the journalism for sure but I honestly believe that the vast majority of Americans are quite capable of doing that. They may not be the most vocal, but they are a pretty smart audience.

Tags: commitment, communication, honesty, leadership, Leadership Decision-making, Leadership Integrity Quotient, trust

17 Oct 09 Why so angry?

Friday afternoon I was running errands when I realized that absolutely everywhere I went, there were angry people. Angry in the parking lot because a car was parked over the line, angry in the grocery store because the older lady at the self-check-out didn’t know how to use the machine and angry on the road because somebody in the right lane needed to cut over quickly to turn left. Earlier I was updating my column on TheStreet.Com and reflecting on the fact that, when people disagree with me (or any writer it seems), they don’t simply express their opinion anymore but feel the need to call me (or any writer it seems) an idiot because we don’t share the same point-of-view.

As leaders, this is an important trend to which we should pay attention. Anger serves many purposes, at least in the short-run, and one of those is to oppose and offset authority. More specifically, rage provides an internal justification for setting the balance straight. When there is a perceived power imbalance we have a number of strategies to achieve equilibrium and one of them is righteous indignation. We feel we have a right to be angry which in turn tends to surface the inequality and, if nothing else, turn the attention (or power) to the angered rather than to the offense. And this move almost always eliminates any possibility of a mutual solution. Anger can be a powerful and appropriate tool when the outcomes are limited to a “go” or “no-go” set of variables. When the solution needs to be found in a more complex range of options, anger is counterproductive.

There are many books written to help people control their anger and I won’t propose to get into those strategies in such a short blog. I will however point out a somewhat controversial approach for leaders to consider. While an employee going into a fit of rage is a power-balancing move, it doesn’t have to be. By that I mean immediate acquiescence is not your only option. If it is true that an individual has a “right” to be angry, it is also true that leaders have a “right” not to reward the anger. At the point a person gives in to a rage impulse, he or she is choosing which consequence is most important…to express their anger or to solve the problem. If your intent is to solve the problem, doing so while emotions are soaring is a difficult if not impossible task. This might mean sending somebody home or forcing them to take a break before discussing the issue.

I don’t propose to have all of the answers about dealing with the anger issue but I do know that it is an ongoing challenge for leaders when they try to engage their employees or deal with the realities of an imperfect world. The first step is to ensure that you are not modeling the behavior yourself. Attempting to motivate others through anger simply reinforces the idea that you hold angry people in high respect. Rewarding angry behavior has the same outcome. Helping your followers develop conflict strategies before an issue arises, and holding them accountable to using them, may be the best strategy of all.

What do you think? Is so much anger justified? Is there a way you have dealt with this in the past from which we could all learn?

Tags: accountability, anger, courage, Energy, Global Leadership, honesty, trust

09 Oct 09 Leading with the Brain

First, let’s get one thing out in the open for those of you who have not figured this out yet. I’m a nerd. There are certain things that I really get jazzed by that to others would be mindnumbingly boring. I get that and I’m comfortable with it. I can live with myself.

Having said that, there is the coolest article in the Autumn 2009 edition of strategy+business (yes, I subscribe) on recent neuroscience research and the brain that relates directly to the issue of effective leadership.Of course I’m such a nerd that I couldn’t just read the article but I had to find the sources that were cited in the article and read them too. If you hang out with me, it’s just a moment-by-moment flow of excitement!

Actually, it is honestly a very interesting article titled “Managing with the Brain in Mind,” by David Rock of the NeuroLeadership Institute and author of the book “Your Brain at Work.” In this article, Rock makes the argument that a person’s job is not simply a transaction—they work for you, they get paid. While this is an important aspect of our work, even more importantly, we view our workplace as a social system. Much research has shown that the brain is a social mechanism, looking for connections between people, events and data, so it would only make sense that much of our work life would be seen the same way.

The interesting addition to this information that Rock adds to the dialogue is that the concept of “threat” applies to our primacy of social interaction. In other words, perceived threats to the social aspect of our work life will evoke the same response as perceived personal threats to our being. Our brains function in a way that we attempt to either flee the threat (by checking out, disengaging, or actually leaving our jobs) or fight it (through aggression either passive or active). Rock proposes that there are five qualities that enable employees to mitigate and handle these threats and that these are crucially important for leaders to understand:

Status: Research indicates that we are constantly assessing our status in relative terms to those around us. Threats to status are endemic in the organization when we give performance reviews, promotions or even passing comments in staff meetings. Research also indicates that something as simple as acknowledging a followers contribution can raise perceived status. Leaders who are sensitive to the status needs of their followers can offset this threat by the way they interact.

Certainty: As humans, we love stability and certainty in part because these are conditions that are less taxing to our brains and bodies. When we are not having to worry about what happens next, we are able to operate in a comfort zone. On the other hand, uncertainty registers in our brain (in the anterior cingulate cortex!) as a potential threat until investigated and understood. Transparency is the antidote to this issue. By sharing as much information as possible and keeping followers informed about current and future issues, effective leaders are able to avoid short-circuiting the resources necessary to get the job done.

Autonomy: Autonomy is the feeling that we as individuals are able to make our own decisions and chose our own courses of action. Perceptions of limited autonomy create a feeling of helplessness and a threat response related to the fact that our survival is not by our own choosing. Leaders who want to reinforce autonomy know that being micromanaged is a threat felt at a very deep level. Followers need choices, not just in the details of their work but in the bigger picture issues of balance and priority.

Relatedness: In our best efforts, and for the sake of diverse opinions and experiences, we often put together teams of unrelated people to focus on a crucial issue. However, the neural pathways triggered by meeting new people put us in a friend-or-foe assessment phase. While many of us like to think that we trust people until they show us that we can’t trust them, the fact is that we are suspicious at the onset of any new relationship. Leaders need to be thoughtful about the teams they form and, if made up of unrelated people, the team needs time to assimilate. Further, by cutting off individuals from social interaction, we stimulate the same kind of threat response. Leaders need to attend to the social needs of those they assign to positions that will keep them isolated.

Fairness: Fairness is a concept that is also related to the limbic system of our brains. If violated, the response is hostility and lack of trust. As we have discussed in this blog before, I will only commit my actions to you if I trust you. If I don’t trust you, I spend a lot of time in protectionist mode, making sure that all of my bases are covered and that I am in a position to survive if and when you betray me. Openness and transparency are again the best responses to this issue. Leaders who are clear about the process they are using, and then apply it consistently, are seen as more fair than those who keep their thoughts a secret.

David Rock uses SCARF as the acronym for these behaviors and as the foundation for advising leaders on how to manage people in the manner that their brains work. While I think it is highly interesting and helpful, I also don’t see neuroscience as the unifying theory to human behavior. It doesn’t answer the whole question of why we do what we do, but cognitive science may provide part of the answer. As a survival instinct, we act to avoid threats and, if brain research can give us some insight on what triggers the threat response, it is a valuable addition to the toolbox of the leader.

Tags: change, communication, Energy, Global Leadership, Leadership characteristics, trust

02 Oct 09 Change Acceptance Part 1

Any leader who has had any kind of training in change management is familiar with the standard model of change: First there is denial, then resistance, then exploration and finally acceptance. While this is a perfectly legitimate approach, I think there might be a more interesting and productive way to look at change. First of all, since change is actually not a topic that lends itself to “management,” I offer a view of “change acceptance.” Since change is inevitable, it is important as leaders to judge where our followers are on this acceptance continuum in order to gauge (a) how successful the change process has been and (b) what communication and support are needed at any given moment in time. Here is a simple and straightforward version of what I’m talking about:

1. Unaware. When change within an organization first begins, it is likely that there is a period of time where followers are not in denial, they are simply not aware of the change that is on the way. They may have a sense that there WILL be change, but in terms of understanding exactly what is happening, they are fairly clueless in this beginning phase.

2. Suspicious. As time goes on and more activity is underway, people become aware that there is SOMETHING happening and as a result start to look for explanations. If they find them, and the explanations are satisfying, then no problem. However, there is usually a period where there are more questions than answers. In this phase, people are trying to predict what is going to happen in order to prepare themselves. Even if they start hearing about it in formal communication, followers in this phase are trying to determine the “reality” of the situation.

3. Knowing. Eventually people become aware of what is up. They are involved enough, and see enough, to not only know for sure that change is happening, but to predict what the change will ultimately mean for them. This is perhaps the most crucial phase because it is here that people also decide whether they support the process or they will battle against it (actively or passively). Once you know there is a change afoot, you have the opportunity to pick sides. It is almost impossible for neutrality in this phase because anybody who cares about the organization or their future will be trying to determine their next step and what their actions should be.

4. Buying. In the positive sense, as people begin to understand what the new situation is and what the needs of the change process are, they will begin to buy-in to the process. They still see it as an externally driven phenomenon but they can decide to “enroll” and be a part of it. This stage takes some time to achieve but once there, the change takes on more internal momentum. In the negative sense, this is also where some people will decide that they know what the change means and they do not support it. These people will often check out of the process and simply not participate. Unfortunately, it is during this time as well that those who choose not to buy-in will often recruit others to be the negative forces in the process.

5. Owning. Ultimately, the change is adopted in the organization and becomes part of who you are and what you do. At some point, it is no longer an external force but becomes woven into the organizational culture. Again, this takes time…a long time. Managers often push their employees to get to the “ownership stage” faster than employees are comfortable (or able) to do. When your followers own the change, it is successfully implemented in your organization.

While this is a fairly simple description, it is extremely difficult to deal with in practice. Within each of these phases, followers are trying to sort themselves out and determine what to do next. There are actions you as a leader can put into place for each of these areas and we will talk about those in the next entry.

Tags: accountability, change, congruency, expectations, Leadership characteristics, leadership integrity

18 Sep 09 The Danger of Dogmatic Leaders

So, I’m in a local Walgreen’s and the person in front of me is talking to the cashier about the fact that Michigan is about to put a tax on soda (”pop” for those of you from other areas). It goes like this:

Customer: “So, my son says they are going to start taxing soda. I think we’ve got about enough taxes.”
Cashier: “Yeah, it’s going to be a Socialist state before long. We’re turning into Russian Communists.”

While I managed not to actually snort through my nose or something, I was extremely puzzled. What does paying too much in sales taxes have to do with being Socialists? And how does being a Socialist state with too many taxes have anything to do with Russian Communists? And how does this conversation begin because Pepsi is about to be taxed in Michigan? By the way, the conversation ended with both of them nodding sympathetically to each other so apparently it was me that missed the point.

As I thought about this later it occurred to me that this kind of thinking, and these conversations, happen all of the time because of our tendency to be so dogmatic in our thinking that it doesn’t matter what is said, we have our opinion. If the customer had said, “They are going to repave the road,” it is just as likely that the cashier would have brought up the Socialist/Communist issue. By definition, dogmatic people have beliefs that are to be undisputed and do not require any particular basis in fact. I believe it because I believe it and if you don’t believe it, you are wrong.

Many leaders that we see in the media are dogmatic leaders. Their beliefs are the only facts they need. If you follow them, you follow them without question because their beliefs are the truth. Often they present evidence, but it doesn’t have to be strong because it is only window dressing to the real issue which is that they are right and everybody else is wrong.

This behavior causes many dysfunctions. For one thing, followers of leaders that are dogmatic have no idea why they believe what they believe…only that their leader does. This creates a dysfunctional situation where the follower may hear or see discrediting evidence about the leader but can not accept it as evidence because…well…because their followership is based primarily on belief about the leader, not on evidence. So, when an auditor starts to question the ethics of decisions, or business results start to decline because the decisions are poor, neither the leader nor the followers will challenge the practices because they are “right.”

It is also impossible to compromise with dogmatic leaders because there is no compromise. Look at the current health care debate raging in Washington. Many of the political leaders have taken an unbending position (on the right and the left) based on ideology and not on the needs or wants of the people. Dogmatic leaders tell people what they should believe and then poll them, using the results as proof that they are right. This circular approach creates a no-lose situation for the Dogmatic Leader.

Truly effective leaders have to understand that the strength of their convictions is based on what they believe to be true at the time. Leaders who care about the welfare of their followers take the time for open discussion and consideration of options. Even when they are sure of themselves, they are always seeking indications that their direction or opinion might need adjustment. These leaders do not measure the intelligence of others by how closely others agree with them, but by how willing others are to be innovative and accountable to the outcomes. They start with the problem and work their way to a solution, not the other way around.

Tags: accountability, dogmatic, fear, global leader, Global Leadership, politics

16 Sep 09 The Myth of Motivation

If you are a student of leadership, you really need to know the name Daniel H. Pink. He is a career analyst and author of a trifecta of best sellers including the latest The Adventures of Johnny Bunko: The Last Career Guide You’ll Ever Need
If you want to know how unconventional Pink is, you have to check out this career guide. It is written and illustrated in Manga style (Japanese comic) and is the only graphic novel ever to become a BusinessWeek bestseller.

While his writing is interesting, his latest video on motivation is the real topic of today’s post. In his video, Pink talks about an old study called “The Candle Problem” and it’s re-emergence in the work of Sam Glucksberg of Princeton University. In the new studies, Glucksberg provides various motivations for solving the puzzle of the candle. In some conditions he incentivizes participants with money, in other cases with nothing. What he finds is amazing.

While I don’t want to go into the detail of the problem in this entry (you can find it if you watch the video), the important finding is this. When participants are offered a monetary incentive for solving the problem, their response time is actually much SLOWER than those who are not offered money. That’s right. An incentive to solve the problem faster actually slows the process down.

This research was funded by the Federal Reserve Bank of all things, and they played with versions of the incentive and versions of the puzzle. They continued to find the same thing. Monetary reward slowed the process except in one condition. If the puzzle was presented in a way where the solution was obvious, participants actually completed the puzzle more quickly when offered money. If there was no thinking to be done, but only action, money served as a strong motivator.

Pink reveals some additional studies done at MIT and found that, in a series of games where participants are offered small, medium and large rewards for winning. The same thing happened. If the game requires only mechanical task work, the rewards influenced the completion times positively. But if there was any cognitive component of the game that required higher level thinking, rewards actually slowed the process down. By the way, this research was replicated across many cultures, ages and situations. It appears to be consistent no matter where you sit on the globe.

Here’s the point. Extrinsic rewards (bonuses, prizes, etc) are distractors when leaders are trying to achieve greater results. They simply don’t work. We have often said that money isn’t everything, but it might be that money is actually a negative thing. The intrinsic rewards of engagement, solving the problem, adding value and working together continue to show greater results than the standard “carrot and stick” approach.

So if, as Pink claims, there is a mismatch between what science knows and what business does, why do we keep doing it? It’s not because leaders are unaware of the mismatch…it has been studied for decades. It might be because we default to a logic that is comfortable and easy. Perhaps we offer incentives because we don’t have the creativity to create business situations that are engaging in other ways. If that’s the case, we are going to have to challenge ourselves in the current business environment to find new ways to engage and motivate since the problems we face are less tactical and more cognitive. Until then we may keep throwing money at internal issues that simply refuse to go away.

Tags: commitment, engagement, Executive Compensation, Global Leadership, motivation

08 Sep 09 Speechs to Engage your Followers

How do leaders motivate followers in troubling times? Look no further than the President’s speech to schoolchildren.

The mood of the country has become even more critical since the beginning of the last school year, so President Obama’s audience of schoolchildren, parents and teachers are starting the term with a greater level of uncertainty about a greater number of things than before. In his speech, the President had the daunting task of not only reassuring his audience, but also motivating them to become involved in their own future. You can follow the same structure as you address your employees, volunteers or members in moving them from victim to active participant.

1. “I know where you are coming from today.” President Obama’s speech began with a connection. I went to school as well and I remember what it’s like on the first day. Had he given his speech on the second day, or the second week of school, he would not have been able to do this. He chose THIS day as a way to connect with his audience from the beginning. When you are planning to speak to your followers, see if there is a day or an event that you can select that will allow you to show the common ground from the beginning. Then relate to them about that day.

2. “This is important to me.” The President revealed the importance of the topic very early in his speech by mentioning all of the speaking he has done previously. He mentioned his speeches on education, his speeches to teachers and his speeches to parents. Even to a kindergartner, it is clear that the President feels this is important because he has obviously talked a lot about it. Once you have related to your audience, let them know the topic you are speaking on his important to you. Don’t just say it is…provide the evidence.

3. “You are the key to success.” Don’t mislead or lie to your followers about this, but if you truly believe that your employees are the difference between success and failure, tell them so. If you want to engage your audience, show them how YOU see them in the grand scheme of things. President Obama pointed out to his audience that, while he has spoken to many different constituents, the students themselves will make the difference.

4. “Because you are so important, you have a great responsibility.” This is the focal point to the President’s speech and, as a leader trying to engage your followers, this should be the focal point for you. Engaging employees has nothing to do with how hard YOU have been working or how much YOU care about the topic. If you have established already that it is important to you, you can then focus on what is important to the rest of us…us. The important issue here is that you first have to establish our role, then you can remind us that we are accountable.

5. “You are showing the way already.” Through the use of many positive examples, President Obama also shows his audience that they are capable of making the right choices and benefiting from their responsibility. He emphasizes his message of accountability and commitment through using personal examples (“I understand”) but more importantly, through examples of people from the same audience who have been successful. Corporate leaders especially tend to be unaware of the positive examples in their workforce. If you can include the element of success in your presentation, you can encourage your followers that it is possible.

6. “Be proud of who you are.” This is not only a message about individuality, but a message of pride in the group. For you as a leader, it can be pride in the organization. President Obama not only talked to his audience about their abilities as individuals, but included one sentence that you can emulate to support the followers as a team. His comment was, “The story of America isn’t about people who quit when things get tough.” He is relating to the pride of his audience in their country. As a leader, you can do the same about your organization.

7. “Work with me on this.” The final section of President Obama’s address could be done a number of ways, but in essence he is reminding his audience that all of the outside sources…his office, the teachers, the parents and the system in general…are doing everything they can to contribute to success. This reminds the audience that they are a part of the bigger picture and that not only does the “boss” want them to take responsibility, he EXPECTS them to do so. Consider your relationship with your followers and find a way to include the entire system in the future success of the organization.

Tags: authenticity, communication, congruency, Energy, engagement, expectations

03 Sep 09 Efficiency as an antidote to creativity

In the last few weeks I’ve had the opportunity to talk to several leaders who find themselves stuck because of a paradigm that has been established in the last few years. This mental model goes something like this…”A leaders job is to drive efficiency because the most efficient organization will be the most successful.” The assumptions around this statement imply that the purpose of an organization is to be as efficient as possible, e.g. to operate with the greatest return on the least investment. This then turns into a focus on eliminating cost at every possible juncture.

It is true that the last decade brought about a symptom of excess for many organizations as profits soared. In my own company, the difference in what is seen as a necessary investment or expense this year is dramatically different than it was in the past. Not only are many purchases or expenses simply foregone this year, but some of the items or services that seemed like a great idea in the past are seen in the current light as either extravagant or at the least unnecessary. So these services and purchases are cancelled to provide a greater cash flow or access to resources.

The problem is, as leaders, we seem to be inevitably searching for that “one right answer” that will drive success in our organizations. With the advent of Six Sigma, Lean Operations and the like (if you don’t know, it’s o.k.), more and more activity has been spawned to “drive inefficiency out of the organization.” This can be a great effort because it lowers cost and often speeds production, but there is a dark side to efficiency of which leaders need to be aware as well. In fact, I would propose at least three areas that take a hit from this focus on efficiency and, as a result, may create problems that are greater than the ones being solved by the efficiency initiatives.

Customer Service. One of the easiest examples of the conflict between efficiency and customer service can be seen in the hotel business. I used to do a great deal of business with the Royal Park Hotel in Rochester, Michigan (the fact that I haven’t lately is no reflection on the hotel by the way!). When you pull up to this very nice and professional hotel you will always find one or two bellmen standing in the doorway and possibly a valet or two. Even if business is slow, there are probably five people on the clock serving these roles. From a cost perspective it is quite clear that at least two of these people could probably be eliminated from the payroll and the consequence of eliminating another one would likely be that wait time would go from zero minutes to perhaps 3 or 4 minutes to have your car parked or bags taken.

On the other hand, people come to the Royal Park because from the moment they pull into the hotel, they no longer have to worry about things like parking, luggage, or logistics. It is part of the customer service philosophy that sets this hotel apart from many others in the area. If they were to follow the advice of a cost-cutting expert, they would lower their cost-per-employee but they would also impact their reputation for high customer service. The result would directly impact their competitive position.

Innovation. One of the greatest consequences of overly focusing on efficiency is the loss of innovative capacity. This occurs for two reasons. First, innovation comes from the “gray area.” For employees to be innovative they have to have time to be creative and the organization has to be willing to accept a certain number (sometimes high) of failures. If a new product or service idea is a guaranteed success, it is probably not so new. Yet companies that say they have not reduced their R&D budgets still often create an atmosphere of risk aversion by cutting everything else. Fewer people, less time and less willingness to experiment are killers of creativity.

Second, leaders with a mindset of cost-cutting or process efficiency find it very hard to also have a mindset of experimentation and exploration. Followers look to their leaders to see what is true and what is not. If I talk innovation, but act always with obsessive frugality, my employees have to decide which is more important to me. Since cost-cutting by definition requires elimination, followers will find it almost impossible to be both innovative and cost averse.

Employee Morale. When efficiency rules, a mechanization of the organization tends to follow. By that I mean simply that people and their work lives begin being treated as secondary to the cost reduction needs of the company. Even if it is a fact that the elimination of positions is necessary to keep the company alive, it comes with the consequence of reduced employee morale. Innovation requires optimism and a pessimistic organizational environment can not produce strong, creative and exciting ideas very easily. While true innovation usually comes from sense of urgency, it does not come from a sense of panic. And aggressive cost cutting creates despair amongst the troops.

What is a leader to do when the organization needs both cost-cutting and innovation? For one thing, remember that the term “efficiency” is only seen as a good thing from a managerial perspective. Employees do not get jazzed by “efficiency initiatives” since this term has become corporate-speak for cost cutting. On the other hand, employees do become engaged when they feel they are working on something significant to the success of the organization. Leaders need to work on both sides of the balance sheet. Where excess is clearly the problem, then processes and resources should be cut. But leaders also need to ask themselves, “what is the ultimate consequence?” The calculation of savings has to include a factor of lost opportunity, engagement or involvement by the employees. Reducing the fat makes sense. Reducing the muscle of an organization has long term negative effects. And reducing the brain and heart will ultimately lead to a shell of the dynamic organization that you once were or could be.

Tags: accountability, consistency, efficiency, innovation, morale

20 Aug 09 The Leader’s Focus

As long as there are writers on the topic of leadership, there will be a debate about what qualities strong leaders should possess. I have also tossed in my offering to this list in earlier blogs and articles. The problem for all of us who think we “know” what it takes to be a successful leader is that most of our lists are somewhat dependent on context. In other words, of all of the possible characteristics successful leaders may hold, some will be successful with one set of characteristics while others will be successful primarily on the strengths of an entirely different set.

This is o.k. of course and why leadership is not really a robotic task. It takes the unique combination of strengths, talents and experiences of a leader to make leadership truly authentic for him or her. And that’s a great thing. To think that there is somehow a magic formula of just enough of one plus just enough of another is fairly ridiculous.

Having said that, I just read an article by Marshall Goldsmith called “Leading New Age Professionals” and published in the book “The Leader of the Future 2.” In this article, Goldsmith doesn’t try to tell us which qualities of a leader will make us successful (although like me, he has done that earlier as well), but he points out an even more important issue. Given the generation of followers, Goldsmith argues that the role of the leader rather than the specific characteristics, will drive success in the future. Specifically, Goldsmith states that success will be based on what the leader provides, not what the leader possesses.

I think that’s a rather brilliant way to look at the role of the leader…as one who provides for success. When he clarifies what he is talking about, Marshall Goldsmith states that leaders of the future must do the following for their followers:

Encourage their passion. Professionals need to look forward to coming to work in the morning. Loving their work is critical.
Enhance their ability. Look beyond the skills needed for today and help professionals learn the skills they will need tomorrow.
Value their time. Realize their time is precious also — don’t waste it.
Build their network. By enabling professionals to establish strong networks inside and outside the organization, you gain a huge edge and much loyalty.
Support their dreams. The best professionals are working for more than money; they have a dream of making a meaningful contribution in their field.
Expand their contribution. Provide them with opportunities that they cannot provide themselves.

As simple as this sounds, consider these provisions in light of the leaders that have been heralded in the past couple of decades. This is not so much Jack Welch or Lee Iaccoca or Ken Lewis is it? Not that these guys haven’t been successful in their own rights, but the point Goldsmith is making is that times are changing, followers are changing, and leaders will have to change as well.

Make sense? What do you think?

Tags: accountability, courage, Global Leadership, Leadership characteristics, leadership integrity, trust, vision