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Recently I wrote about customer-centric processes. In early posts, I've discussed the idea of the "path of least resistance". That is, if there is something that you want someone else to do, you need to make that action easier than doing something else. To many, path of least resistance and customer-centric processes are a no-brainer. At least, intellectually they are. But sometimes, our internal policies and processes get in the way.

Today, I was reviewing my Verizon Wireless bill and found a mistake. I was receiving an employee discount for a company for which I no longer worked. I called Verizon to let them know so that they could make the appropriate adjustment to their records (and unfortunately to my account).

After a few minutes, the customer service rep told me that I had to submit an email formally requesting that my discount be removed. He then gave me a very user-unfriendly email address and a list of information that I was supposed to include in the email:

Discount code

Corporate id number

Group id number

ECPD (which he never actually defined)

I explained that I didn't know the values for any of those codes. They weren't on the bill (In all fairness, he did tell me I could just give my discount amount rather than the code - that was on the bill). In the spirit of true service, he offered to look them up and give them to me.

I'm sure that if I asked people at Verizon if they were customer-centric and if they tried to make themselves easy to do business with, they'd say yes. Yet somehow through a set of small discrete decisions, they've create a situation which is just the opposite. They are asking me to jump through hoops to provide them with information that they already have (and I don't) in order to do something that isn't in my self interest (economically) and only benefits them.

It's easy to nod your head and agree with being customer-centric and creating the path of least resistance. It's another thing to actually do it.

Being nice to your customers doesn’t make you customer-centric

During a recent meeting, I made what I thought was a casual observation. The group of people with whom I was working weren’t very customer-centric. That message was not received very well (by most of the group). They assured me that they are very empathic toward their customers. They treated them with the upmost respect. Finally, they argued, this particular meeting wasn’t about customers. It was about the relationship between two providers in the supply chain. The issue was how one of the provider’s relationship with the customer impacted the other provider’s relationship. That’s when I knew they didn’t get it. Every conversation needs to be about the customer. The right question to ask was how these two provider’s relationships impacted the customer.

Being customer-centric isn’t the same as being nice to your customer. It isn’t even the same as providing good customer service. Being customer-centric is about whether your business is designed around the needs and expectations of the customer.

In Why We Buy, Paco Underhill provides example after example of stores which are not customer-centric. Their layout, flow, processes, and information attempt to control the customer’s interaction and experience. Underhill points out that such strategies often fail. Customers are persistent. They’ll make the system work for themselves. Trying to manipulate their process doesn’t stop them, it only frustrates them.

A 2008 Harvard Business Review story provided an excellent example of a customer-centric decision at Amazon.com. Amazon used to list the products that it sold separately from the products sold by its affiliates. When searching for a new digital camera, you got a page of the cameras available from Amazon. To see cameras from affiliates, you had to click a link and navigate to another page.

Bezos decided that this was cumbersome for the customer. They didn’t care who sourced the camera. They just came to Amazon.com to get one at a good price. Despite objections from his purchasing and sales people, Bezos made the change. He said that the most important consideration was meeting the customer’s need. Overall revenue for Amazon increased. Optimizing for the customer rather than the business (or perceived needs of the business) won out.

Customer-centric organizations are aware of three major changes in consumer behavior.

• Formal expertise is now distributed and the expert’s role has changed from being the ultimate source of truth to being one of many opinions.
• Customers expect a lot of information about the products and services they are buying
• Customers control the process

They work to adapt their processes and business models to these changes.

Some companies and industries seem to be resisting these trends. Sometimes there is large-scale resistance in attempts to legitimize their experts through regulation and laws. Other cases are more subtle such as a simple website design or process that forces the customer to see the description of a product before show him or her the price”.

Ultimately, I believe that these industries and companies are going to lose out.

It’s time to move from focusing on being nice to customers to adapting to their needs. There are no longer decisions that don’t impact your customer. If you don’t start out by asking how a decision helps or hurt your customer, you are not being customer-centric. And this doesn't just apply to external customers. Many enterprise-based departments are working to become better partners with the front-line business. The problem is that while they are trying to improve service, they still have processes, tools, and policies that are optimized for their function rather than the need of the customer.

The best business question you can ask

Peter Drucker once said,

“The most serious mistakes are not being made as a result of wrong answers. The truly dangerous thing is asking the wrong question.”

Yet, for many leaders coming up with the right question is still a challenge.

In prior posts I’ve listed questions that are helpful in a specific context (e.g., coaching, finding meaning in information, determining your reason for being). However, there is one question (actually it’s two complimentary questions) that work anywhere and anytime. Those questions are:

What is currently happening that shouldn’t be happening?

What is not currently happening that should be happening?

Although, relatively simple, I have found these questions to provide powerful results. So, the next time you are in a bind, try these questions out.

What is meaning? And, why should a leader care?

Creating meaning is one of the most important things that a leader does. But what is “meaning”?

The most eloquent definition of meaning come in Viktor Frankel’s book Man’s Search for Meaning. Frankel ties meaning to the internal purpose for which one lives. I use a much less philosophical definition to provide a framework that leaders can use on a daily basis.

From a leadership perspective, there are three ways to create meaning: impact and change, purpose and connection, and sense making.

Impact and change
The primary contribution a leader makes relative to meaning is creating meaningful results. Meaningful results are those that have significant and/or lasting impact. A leader’s primary focus should be on making a meaningful contribution to his or her organization and people.

Purpose and connection
Leaders creates meaningful results is through their people. Unfortunately, studies consistently show that a large percentage of the workforce is under-utilized and un-engaged. Leaders whose people understand the relationship between their work and the organization’s, the customer’s, or society’s success are more engaged. This notion is probably the closest to Frankel’s definition of meaning.

Sense making
Finally, leaders help their people make an impact through sense making. Leaders help people understand what is happening in their environment. Leaders combine data and facts with their own context and perspective to create meaning.

Leading through meaning

The following six questions will help you focus on creating meaning for your people and your organization.

• What is the business outcome I’m trying to achieve?
• What unique contribution do I make as a leader to that outcome?
• How do I create focus, purpose, and meaning for my people in their work?
• How do I help my people navigate the situation going on around them?
• Am I finding the knowledge that is lost in information and do I seek the wisdom that is lost in knowledge? [based on a quote by T. S. Eliot]
• How do I create a culture of people who seek meaning?

Do you have answers for each? Do you consistently make decisions and take actions based on those answers? If so, you are leading through the creation of meaning.

How much strategy is enough?

“Strategy” is one of those words that is loosely bantered about without much precision. There seems to be a lot of confusion about what a strategy is. There is even more confusion around what a strategy does. In working with groups to develop strategy, I’ve learned a few important lessons: 1) strategies that try to answer every question are not strategies (and never get completed), and 2) strategies that answer too few question become pretty posters and Powerpoint slides but do little to drive decision-making and action. A good strategy sets the context in which an organization should operate. A strategy should:

• Set boundaries
• Create focus
• Enable prioritization

The strategy accomplishes this across five dimensions:

• Who the company serves
• What the company provides
• How (at a high level) it is provided
• Where and when it is provided
• To what end (why) the company provides it

Simply arraying the areas of context (boundaries, focus, prioritization) against these five dimensions creates a simple framework for defining a strategy. Such a strategy will drive decision-making and action without actually articulating every decision and action. That allows the organization to remain nimble and responsive to changes in the environment while moving toward a broader goal.

The key is focusing on results or outcomes, not tactics. For example, an organization might have a strategy to focus its resources on mission critical processes. The company might choose to outsource to accomplish this strategy but outsourcing is not the strategy. While subtle, the difference is important.

Good strategies create a framework for decision-making and actions. They allow autonomy and improvisation while keeping the organization moving in the right direction.

Embrace your bias – just don’t let it control you

In some organizations, the word “bias” has the same status as many other four-letter words; you need to avoid it in polite company. After all, leaders are supposed to be objective and data driven in their decisions and actions.

But bias is essential to decision making. In his book, “How We Decide”, Jonah Lehrer, tells the story of a man who struggled with simple decisions such as the color pen he should use or the radio station to which he should listen. The man’s problem stemmed from surgery where a part of his brain had to be removed. Interestingly, this was the same part of his brain that controlled his emotions. In other words, this man’s decision making ability became quite limited without bias/emotion. Lehrer concludes that we need both rational and an emotional (biased) thinking to make decisions. Trying to make decisions simply on facts comes nearly impossible. You can always gather more data or run more analyses. At some point, you need to make a choice – that’s where your bias comes in.

Instead of trying to remove bias, I believe that leaders should embrace it. This doesn’t mean that they should blindly act upon it. Instead, leaders should learn to use their bias to drive questions rather than answers. This is important for two reasons

1) A leader’s value comes from his or her bias. A leader’s bias is based on his or her experience. Experience and judgment is what sets leaders apart. If that shouldn’t be a part of decision-making, then every new employee would be equally qualified to lead.

2) Even if we wanted to, we can’t control our bias. Recent research on the brain shows that our brains operate too fast; often filtering information before we’ve even become conscious of it. The best we can do is learn to mitigate our bias.

So, what does a good “biased” leader do? He asks a lot of questions. He uses his bias as a basis for exploring his business and organization. He creates hypotheses and data experiments to confirm or refute his biases. That last part is important. A good leader doesn’t just look for data to confirm. A good leader is willing to recognize when the data does not support his view.

Good leaders also put their bias on the table. That’s different from what we are taught. We’ve been taught to not show our bias. But, since bias is unavoidable, most leaders wind up just masking it rather than removing it. As a result, analysis, decision-making, dialogue become inefficient and dysfunctional as people are working against forces that they can’t see or process. Instead, leaders can be upfront about their bias and invite their teams to provide opposing data. Some leaders take this even further and require that someone on the team provide an opposing view and data before they make a decision. That’s strong leadership.

Finally, good leaders surrounded themselves by people with opposing biases. This creates an appropriate level of checks and balances.

Your bias is probably what has gotten you to where you are today. If you continue to use it wisely, it will take you much further. Don’t shy away from your bias. Instead, use your bias to help make sense of data.

The story unfolds with or without data

If a tree falls in the woods and there is no one there to hear it, does it make a sound? How about this one? If your business is running on a daily basis but there is no data to measure it, does it have successes and failures?

Smarter people than me have pondered the first question – I’ll leave the answer to them. I’m more interested in the second question.

The answer obviously is “yes”. Your business has successes and failures, good decisions and bad decisions, and good luck or bad luck whether you have data to measure it. Data provides a way to capture the story of your business. But, it is not the story.

Too many leaders rely on data to tell them the story of their business. Data, of course, is important. But a good leader doesn’t allow the data to lead him or her. A good leader leads with the data as a supporting tool.

I once had a group of leaders review a marketing presentation. All of them came up with the same story. They focused on what the presentation said it would take to reach a new market segment. They simply summarized the facts in marketing presentation. They let those facts lead them. Their story was the same as anyone else inside or outside the company might tell. That’s not the real story. That’s not a story that drive decisions and actions. That’s just a summary of facts. The real story was the one that was occurring outside of the data in that presentation.

I asked them to revisit the presentation. But this time I had them start by thinking about business. The data in the presentation was going to be used to fill in the details of that story. How well were they positioned to capture this segment? Did their current business model align with how this particular segment made buying decisions? Was this segment worth capturing - it was big, but was it profitable, and if so, at what cost? What would they have to change in order to capture the segment? What might they lose? Were the needs of the new segment consistent with the needs of their existing customer base? If not, how would they reconcile the two? (Their original "story" from the marketing presentation didn't even talk about their existing customer base. They let the content of the presentation drive the scope of their story -- that's a mistake).Where have they had success in attracting this new segment?

Most of the information they needed to tell that story wasn’t in the presentation. It was in their existing understanding of the organization. They used the presentation to confirm or refute their existing beliefs about their organization. In other words, they told a story about their business that was supported by the data in the presentation. This story couldn’t be told by anyone who didn’t have knowledge of the company. This was their story.

The news story raised several questions and key issues that could drive decisions and actions. It was relevant. Also, in the process of coming up with that story, the leaders have much more powerful conversations about their business. They questioned assumptions and challenged one another. That didn’t happen the first time.

A good leader should always be thinking about the story that is unfolding in his or her business, the market, and the economy. That story is governed by internal decisions, customer behavior, and external factors (such as a recession). And, that is the story that drives the success or failure of a business.

Data might clarify some details of the story but it shouldn’t be a surprise. A leader who is surprised when a financial report tells him that his department is over budget is not paying attention to the story. Similarly, a leader who didn’t realize that her team was providing poor customer service until those scores went down is also asleep at the wheel.

Good leaders use data to tell a story. However, they don’t allow the data to set the scope and context for that story. They use their understanding of the business for that. The data should just fill in the details.

Questions that create meaning

Asking questions is an essential way to find meaning in information. Many leaders want to ask questions but don’t know where to start. Ideally, you ask questions based on your existing knowledge and the current context or situation. Therefore, every situation will have its own unique set of questions. However, to get started, some basic questions will work in any situation. They follow a simple question formula:

What is it?
What should it be?
What patterns do I see?
Does it matter?

All of these questions can help you find meaning. However, the latter questions will drive greater meaning. You generally can’t make a decision or take an action until you reach at least the third level. Therefore, I recommend that leaders spend most of their time on the third and fourth questions.

What is it?
The most basic way to derive meaning from information is to understand what that information is. I’m often surprised how little many leaders know about the basic mechanics of their metrics.

For example, one company had a “customer satisfaction” metric on their scorecard. I asked the managers what that metric meant. First I asked how the metric was calculated. They said it was based on the customer satisfaction survey. But the survey was based on a one to five scale and their customer satisfaction score was 85. Most didn’t understand how the score was converted. In addition, they didn’t understand what else was done. They were surprised when I told them that it did not measure customer satisfaction. The metric was a percentile ranking. It was telling them was how their satisfaction score compared against similar companies. This means that if all other companies were very bad, and they were just bad, they would be in a high percentile. Similarly, if all other companies were great, and their company was good, they’d have a low ranking. For the first time, many of them understood the metric and were able to derive meaning from it. One manager said, “My boss kept telling me that my customers weren’t happy because our score was below target, but when I talked to customers they seemed happy. Now I understand why. They are happy, they just aren’t as happy as they could be at our competitors.”

By understanding, what the metric was telling them, the managers were able to change their messages, decisions, and actions.

Understanding what a metric is specifically measuring is the first step toward creating meaning. Here are a few other questions you should ask to answer, “what is it”

· What is included and excluded from this metric?
· How frequently is the metric calculated?
· How is it computed? What are the factors that go into it?
· Is it a direct measure or a “proxy” measure
· Is it a relative or absolute measure?

What should it be?

Once you understand what the measure is, the next step is to understand what it should be.

If I were to tell you that I purchased a car for $5,000, you couldn’t make a decision or action. You need to have an idea of what it should be. If I tell you that the car was a 2009 Lexus (or a 1981 Chevy Chevette) you are now better able to create meaning.

Leaders should never look at information without an idea (which might be proven wrong) about what they expect to see. Several sources will help determine what the number should be:

· Company goals/targets
· Historical performance
· Benchmarks
· Current context (e.g., if you’ve just invested in a marketing campaign, you might expect that sales would be up)

The problem that many leaders fall into is confusing which number they should use. I like to look at this question from three perspectives: 1) What is a realistic expectation for our current performance, 2) What have we committed to, 3) What is possible.

Each one of those questions drives different decisions. The first question, realistic expectation, is probably the best for diagnosing and taking action. The second question, commitment, is best for understanding potential impacts on other issues (and impact on your bonus!). The third question helps you understand where there are opportunities for improvement.

By creating an expectation for what you should be seeing, you create a trigger point for taking action.

What patterns do I see?
Understanding what something should prompts action. But it doesn’t tell you where or what action to take. Understanding patterns will help isolate the problem.

There are two types of patterns to look for to create meaning: causal and categorical.

Causal patterns, as their names suggest, are patterns that show how one thing influences another. By understanding they key levers of your business, you can take action. For example, one organization found a pattern between time per service call and number of return service calls. They discovered that their technicians were cutting corners to hit their “time per call” target, which was driving down quality.

Categorical patterns highlight common themes. For example, a company discovered that most of its complaints came from stores in the same region. Replacing the regional manager had a huge impact on performance.

By understanding patterns, you will be able to determine where to focus your actions.

Does it matter?
“Does it matter” is the ultimate meaning question. It is the question that should be consulted first before launching a response to a problem. It’s also the question that I often see overlooked.

One organization was having a problem with parking in its facilities. Customers regularly complained to management and, on satisfaction surveys, rated parking extremely poorly. Additional analysis showed that, although customers were frustrated, it didn’t influence their buying decisions. They were so satisfied with the quality of the company’s product that they were willing to put up with the poor parking situation. It didn’t matter (in the grand scheme of things).

Had the company simply reacted, it could have wasted a lot of money investing in improving parking with no overall benefit. Of course, most companies want to make the overall customer experience as good as possible. So, why not improve parking? If everything else is working, perhaps this would be a good investment. However, if an investment in parking offsets an investment in something that matters more to customers, the organization has made a poor decision.

Ask questions
These four questions can provide the basis for better understanding your business and finding meaning. These questions aren’t just limited to interpreting data. They can just as easily be applied to discussions about career development, strategy, or any aspect of your business. The more meaning you create, the better your decisions and actions.

Facts, trust, and Sergeant Friday

What do the following five events have in common?

· Police questioning of suspects/witnesses
· IRS audits
· Courtroom testimony
· Investor calls
· Doctor visits

They all typically seek “just the facts”. This makes sense. In a courtroom, the jury’s job is to interpret the facts; they don’t want them clouded by the witness. I think in most situations, when we are unsure of someone’s credibility or agenda, we tend to seek the facts. While it’s true that people can mislead with facts, there is something safer or more “objective” about getting the facts. In essence, seeking facts counters a lack of trust.

This happens in business as well. Many leaders don’t recognize this as a trust issue. They confuse trust with integrity. They trust their employees not to steal, cheat, or lie. But, this is a different type of trust. It’s trusting their thinking which is often much harder than trusting their actions. That’s where the most “trusting” leaders sometimes fall down. They view their responsibility as ensuring that the data and analysis are accurate. That is their responsibility but they can be more productive if they execute that responsibility differently. If a leader is asking his team to walk through every fact and analysis from start to finish, even in the name of due diligence, he is showing a lack of trust. In addition, he is not being productive.

First, it’s inefficient. If you believe that one person might get it wrong and one might get it right, it’s more productive to have the “right” person do the work in the first place. Second, it’s unempowering. If your people are simply conduits through which data flows, they aren’t adding much value. You aren’t leveraging yourself very well if your job is to do all of the heavy analytical lifting and thinking. Third, it slows down decision-making and taking action. Instead of starting the meeting from the point where the team left off, the meeting backtracks through the data. It might take half (or all) of the meeting to get back to that point. That’s not an efficient use of time or resources.

I’m not suggesting that leaders simply take everything they are told without question. I am suggesting that there is an alternative to being an auditor. If you focus on seeking understanding, you empower your team, keep the conversation moving forward, and uncover potential problems.

Test your assumptions, not theirs
As a leader, you should have a general idea of what the data might tell you. For example, if you know that your sales in Indiana have been struggling, you might expect the data to suggest a problem there. If your team’s analysis doesn’t show a problem there, you can then ask about it (e.g., “We’ve really been struggling in Indiana lately, how did they compare against these other poor performing states). At that point, you’ll either discover that Indiana is doing better than you thought or that your team forgot to include Indiana in their analysis (or that somehow their analysis was flawed). Any of these lets you take action. There’s no need to rehash all of the other information that doesn’t have an issue.

Ask for conclusions first, then ask questions to understand their analysis
Have your team start with the results. What did they find out? What are their recommendations? Suppose they found a quality issue. You can them ask them if the issue is consistent across all products/services or whether it is isolated to a few specific areas. You can ask what patterns they noticed in areas that have the problems versus those that do not. As before, you are still understanding their thinking without having them go through every piece of analysis.

The key is approach your role as understanding people’s thinking rather than auditing their process. Seeking understanding is what good leaders do. It keeps the conversation moving forward and it uncovers problems. Auditing their process is a sign of a lack of trust. It’s unempowering and unproductive. If you don’t trust your people to do the job, get someone else to do it. Repeating the process for your own comfort doesn’t help anyone.

Making data driven decisions isn’t just about having numbers and facts. It requires judgment, perspective, and context. The more you work with your team to hone their ability to combine those things with the facts, the better and more efficient your decision-making will become.

Context on the cutting room floor

How much context do you provide when requesting reports or information from your team? Do you include information on how it will be used, what decision will be made or what you are looking for or expect to see?

If you are like the vast majority of the leaders with whom I’ve worked, the answer is probably “not much”. The result is a cycle of requests, wrong information, new requests, etc until everyone is frustrated.

Context isn’t just important for ensuring that you get what you need. Your people need context in order to make sense of the work they do, they information they process, and the events that unfold in their work environment. How often do your people execute the task or transaction without achieving the overall goal? If this happens alot, they probably are lacking context.

Beyond making sense, context also helps individuals find meaning in what they do. Meaning is an important motivator for employees.

Despite the importance of providing context, people seem to be providing less of it. A simple test is to ask employees if they know how the information they are providing or the work they are doing is used. You’d be surprised at how few do.

Time, or more specifically, lack of time, is the typical reason given for not providing context. People tell me that it is more efficient to dash off a request than to explain the context behind that request. We are all busy, right. Sometimes it is more efficient to send a request. However, in most cases, those time savings are eaten away by inefficient or incorrect work.

I’ve noticed a more subtle enemy of context – electronic communication. As we’ve moved from paper, to e-mail, to text messages, to “twitters”, message length has shrunk significantly. And, when message length shrinks, the first thing to go is context. Take a look at the most recent emails or text messages you’ve received. Most will be very transactional in nature. This isn’t a bad thing. Text messages and email are excellent vehicles for sending transactional/tactical messages. The issue occurs when leaders don't find other ways to provide the broader context. We are taught that meetings must be focused on decision-making. That’s good. Some meetings should be. But where do people receive the “big picture” in order to make good decisions in those meetings? It’s not in their email or text messages. It’s probably not in the voice-mails they receive during the day. It’s certainly not in the day-to-day transaction they perform.

Providing context requires a time commitment. However, more efficient work, higher quality work, and better achievement of goals typically offsets that investment.

Swimming pools, guns, and why your people don’t speak up

In his book, Freakonomics, Steven Levitt has an excellent chapter on risk. He quotes risk consultant, Peter Sandman who said, “That basic reality is that the risks that scare people and the risks that kill people are very different.”

Sandman uses a simple definition of risk.

Risk = Hazard + Outrage

For example, Levitt poses the question of which house you’d be more comfortable allowing your child to play – one with a swimming pool or one with a gun. The hazard, death, is the same. The data tells us that considerably more children die from swimming pool accidents each year. Yet most people would consider the home with the gun more “risky”. Levitt’s rationale

“. . .The thought of a child being shot through the chest with a neighbor’s gun is gruesome, dramatic, horrifying – in a word outrageous. Swimming pools do not inspire outrage.”

Sandman and Levitt’s models also apply at work. Decisions to speak up, take certain actions, or do many of the things that we encourage (yet often don’t see) are driven by perceptions of risk.

The key is to understand what role you, as a leader, play in people’s perception risk. Levitt discusses three drivers of individual's perceptions of risk and outrage: sense of control, reaction and immediacy.

Control
We tend to see things that are out of our control as being more risky. That's human nature. Yet, organizations often hold people accountable for things that are out of their control. When this happens, people seek ways to reduce that feeling of risk. Often their risk-averting behaviors become destructive to the organization.

A simple example is the classic “shoot the messenger” syndrome. When bringing bad news becomes a risk, people stop reporting it. That’s when the real risk arises.

A more complex example is in goal setting. In one company sales people’s goals included product quality. Yet the sales people had no control over any aspect of the production process. Levitt points out that we typically feel at less risk when we are the ones perfoming a task. (Do you feel safer in the driver or passenger seat of your car?) To reduce their perceived risk, the sales people attempted to assert some control. They began micro managing the production managers. This prevented the production managers from fully focusing on their jobs. Sometimes the sales people would go around the production managers talking directly to supervisors and employees. By giving them a goal over which they had no control, the organization increased these people’s perception of risk. The result was dysfunctional behavior and performance.

The current economic climate affects business in ways that are completely out of anyone’s control. Your reaction can either fuel or reduce people’s perception of personal risk.

Reaction
Levitt’s swimming pool example is about how reaction impacts our perception of risk. The gun evokes a stronger emotional reaction than the pool. Therefore, the gun is perceived as riskier.

Leaders’ reactions drive employee perceptions of risk. How do you react to mistakes, wrong answers, or dissention? Are you aware of the level of "outrage" you display in response to various actions and behaviors?Of course, there are actions that should generate outrage – unethical behavior, lack of integrity, illegal behavior. Actions that lead to significant losses or hurt the business should also create outrage. The point isn't to tolerate any level of performance. Yet sometimes we invent or magnify the "hazard" reacting disproportionately to its real damage.

I knew an executive who extremely detail oriented. This person could comb through a 25-page document and find every typo, inconsistent font, or inconsistent color. He did this even on rough drafts, before the content was even final. Not only did he find the errors, he made a big deal about them. People knew that a less than “perfect” presentation would generate outrage. They adapted their behavior. If someone had an hour to work on a presentation, they’d spend ten minutes on content and 50 minutes proofreading. The documents looked great, but most of them didn’t say much.

Or, consider how new ideas are received in meetings. Ideas that are too far out of the status quo are often ridiculed. Yet, if we consider the risk equation, stating an idea really poses no hazard. Yet for some, just speaking can be a risk. Employees quickly learn that staying within a very narrow boundary decreases their risk.

Another risk-creating behavior stems from hoarding data. The leader holds back information to later use as a weapon against ideas he or she doesn’t support. Alternatively, perhaps an employee simply overlooks a piece of data. The leader’s response in that situation determines the perceived level of outrage. If missing a piece of data results in a reprimand, people will soon stop bringing ideas or recommendations to the table. Instead they'll regress to just providing simple facts and information. Look at your meeting dynamics. Are people comfortable asserting their point of view? Do they go out on a limb? Or, do your people stick to the facts? If people are playing it safe, it might be time to reassess where they perceive the risks.

Immediacy
Levitt's finaly point is that a current issues often appears more risky than a future issues. Stephen Covey made a similar point when he talked about “Quadrant I” and “Quadrant II” activities – those activities that are either urgent/important or not urgent/important. He notes that we often spend more time on the first quadrant (urgent/important) at the expense of the second quadrant. I’ve even found people who spend considerable time third quadrant (urgent/not important). This reinforces Levitt’s point of the power of immediacy in our perception of risk.

Sometimes the problems that are right in front of us do need fixing. If your house is on fire, that’s not the time to be focusing on how to decrease the risk of fire.

However, that’s not always the case. There is an on-going debate about whether short-term, quarterly based decision making improves or hampers organizational performance. In tough times, like the ones we are in now, many organizations forego investing in longer term risks in order to address short term issues. Fiscal responsibility is important but it must be balanced. If your actions cause you to lose customers in the short term, you might not have anyone to buy your product once things pick back up. If you get back on your feet, a workforce that can’t provide a quality product or service, a customer base that no longer remembers your brand, and a portfolio of old, outdated products will probably put you right back into the same place you started.

As a leader, you influence your employees’ perceptions of hazard and outrage
Too often, leaders make the very behaviors they seek carry the greatest risk. There are certainly times when people should feel at risk. It’s ok to be outraged at shoddy work or incompetence. However, shoddy work and incompetence are very different from results that are outside of people’s control or are due to honest mistakes.

What would happen if you fully unleashed people's potential?

"What would happen if you fully unleashed people's potential?"

I've used this tag line for over a two years to help leaders rethink their responsiblity and relationship to the people with whom they work. We often overlook the passions, talents, and hopes of people as we try to mold them into "efficient" and "productive" workers.

Yet, sometimes I forget its real meaning. The following video from this year's TED conference is a vivid reminder of what it really means to unleash people's potential. I'm including the introductory note from Chris Anderson, TED founder, which provides some context.

We've just released one of the most powerful performances in TED's history. It happened 13 days ago at TED2009 with a surprise satellite link to Caracas and a youth orchestra led by the international phenomenon Gustavo Dudamel. He and the young members of the orchestra, many born into poverty, had had their lives transformed by a national music teaching program built by TED Prize Winner Jose Antonio Abreu.

If you give yourself one TED treat this month, make it this one. Please block out 20 minutes, hook up your computer to the best speakers you own, crank the volume and enjoy orchestral music as you've never seen or heard it before. <--this is the link

More background here.
Chris Anderson & the TED Team

Outcomes versus activity

Which of the following goals reflect business outcomes?

· Reduce procurement costs
· Standardize customer service processes
· Implement an enterprise-wide financial system
· Increase manager attendance/throughput in leadership development program
· Increase the use of preferred vendors
· Decrease SG&A expenses
· Increase customer service calls taken per hour

Only the first and sixth are true business outcomes. Did that surprise you? The rest are activities – all done in service of an outcome, but not outcomes themselves.

In everyday use, an outcome (or result) is something that is completed – the culmination of an action. If I am in charge of a wide-scale system implementation. The “outcome” is a new system. This is a legitimate interpretation. But I’m not sure that is what leaders mean when they say “business outcome”.

Leaders don’t just want stuff done. They want stuff done that impacts their business in a positive way. A new system is neutral - it can create a result but it might not. The real result is what happens in the organization because of the new system. For example, if the system was intended to automate certain processes and reduce administrative costs, yet those costs don’t go down, then it hasn’t made a difference (assuming that nothing else changed either). If the costs do decrease, then there is a change. It’s the change in cost that is the result - not the system. Leaders care about the savings, not necessarily, how you get there. Their goal isn’t to have a system, it is to have lower costs. That's when they starting counting value.

In the fast-paced business world, people who “drive results” get recognized. It is generally faster (and more visible) to complete an activity than it is to see the change to the business. Therefore, the activity often takes center stage. In the short term, creating a lot of activity might generate rewards. Over time, however, it will lose its luster. At some point you’ll be asked to show the value of all of that activity.

The problem
Switching from an activity focus to an outcome focus is more than just a mindset change (although that is an important first step). Activities can be accomplished discretely, outcomes cannot. So if you are signing up to an outcome, you’ll probably need to involve more people, more streams of work, and more effort. Similarly, signing up for an outcome also creates greater and more visible accountability. It’s one things to promise a redesigned process or new set of policies. It’s quite a different thing to commit to making customers happier or reducing operating costs. Yet, although its more work, signing up to deliver a true business result will make you, and your organization more succesful overall.

A common pushback I hear is that major initiatives can span multiple years. Therefore, if you are only taking credit for the “outcome” you won’t have anything to show while you are working. I encourage leaders to plan their two to three year stream of value and outcomes. Therefore, while you are working on a new program this year, you are delivering the results from the program that you completed last year. That way, you always have work in progress and true outcomes being delivered.

Leaders are under increasing pressure to deliver results. It’s time to change the way we think about what those results look like. A lot of activity doesn’t necessarily equate to a better organization. Getting things done only matters if those things make a difference.

Innovation: Don’t let the shininess fool you

The following are four quotes about technologies that were predicted to revolutionize learning. Try to guess what each is referring* to and when it was said:

a) …will revolutionize education…can motivate students, guide and sharpen their reading by providing background and demonstrations, encourage responsibility for independent learning, arouse curiosity and develop new insights and the excitement of discovery. A school where these are in use may find itself bursting out of old patterns.

b) To bring the world to the classroom, to make universally available the services of the finest teachers, the inspiration of the greatest leaders...and unfolding world events.”

c) Is destined to revolutionize our educational system and that in a few years it will supplant largely, if not entirely, the use of textbooks.

d) The inventor or introducer of the system deserves to be ranked among the best contributors to learning and science, if not among the greatest benefactors of mankind (sic).

While nearly all of these things have had impact on the world, few delivered on their promise for education. Why not?

The models of education didn’t change to reflect the abilities of the technology. Instead of focusing on how the major problems in education, the people making these quotes were focused on the technology. Not surprisingly, similar quotes have been made for computer-based training, web-based training, blogging, Second-life, Facebook and Twitter.

Many organizations with which I've worked have bought into the hype associated with these technologies (or their own versions of them) to manage learning, knowledge management, or talent management. They are then often surprised when people don't use them inside the company like the do in their personal lives. But there is a simple reason for this. People may try out a new technology because it's "cool" but they won't keep using it unless it solves their problems. For example, people use blogs, Twitter, or Facebook because they want to communicate their thoughts, lives, ideas to a wider audience but have been unable to using other means. However, while a person might want to share the minute by minute details of his or her life or his or her message about saving the planet, he or she might not have that same passion when it comes to work-related information. If your organization does not have a pent up demand from people who are dying to share information but can't, then even the coolest social networking tool is going to mostly go unused. It's not about the technology, it's about the problems that the technology can solve.

That’s not to say that the current Web 2.0 tools won't have an impact on learning or corporate knowledge sharing. If they do, however, it will because there was also an innovation elsewhere that made the new technology essential.

Often new technologies are simply used as substitutions for old technologies. A colleague of mine, Rheinhart Ziegler, once referred to this as putting old wine into new bottles. Early television shows would have people sitting still talking to each other as they did on the radio. Once people started thinking about how they could leverage the visual aspects of television, things began to change.

We often get distracted by the newness of a technology and lose sight of the real problems that their business faces. If you want to create innovative solutions, focus on the problems and constraints facing your business. Finding ways to overcome those will produce innovative solutions. Sometimes that will require cool new technology. Sometimes not. Use technology to support your goals but don’t get distracted by it or its promise. The real promise comes from what’s inside.

* a) television-1962 b) radio-1917 c) motion pictures-1922 d) chalk board-1841

Are you "chugging" your way through life?

A group of friends sit around a table talking, sharing stories
and memories. The dark burgundy tablecloth is broken up by a scattered
grouping of wine glasses and three open bottles of wine. The
pastel-splattered labels show scenes of small villas surrounded by fields of
flowers. Bach’s Mass in B minor is playing over the stereo as the host of
the party reaches for a bottle. He gently cups the bottom of the bottle in
his left hand supporting its neck with his right hand. He’s in no hurry to
pour. Instead, he talks for five minutes about the small vineyard in
Southern France that produced this bottle of wine. When he’s finished, he
pours some wine into each glass. Each person watches as the smooth, silky
wine flows softly into the glass. Then, one by one, the friends slowly
pick up their glasses, hold them up to the light and marvel at the dark red
color of the wine. They give the glass a slow swirl and watch as the
wine’s legs slowly crawl down the glass. Then each raises the glass to
sip, but pause briefly to savor the aroma. They are in no hurry to
drink. They swish the wine in their mouths to feel its texture and take in
its flavor.

OK, rewind 20 years

It’s 12:45 am and the group is sitting elbow to elbow in a
dimly lit bar. They try to talk but can’t hear one another because Def
Leppard’s Armaggedon is blaring over the sound system. They aren’t too
concerned. In the absence of actually understanding one another, they
mirror each other’s laughs, frowns or looks of surprise. The only time
they notice their beer drenched clothes is when someone stumbles into them
pressing the sticky fabric against their skin. Between the dim lights and
cigarette smoke it’s hard to see one another. The only image they can make
out is their friend, hair matted down to his head for some unknown reason and
face glimmering from sweat. He grabs a pitcher of beer, screams
"CHUUUUUUUUUUUUUG" at the top of his lungs and downs the pitcher barely tasting
a drop. But he’s achieved his goal. The beer is gone quickly and
efficiently and he is still standing. They all scream in approval and the
night goes on.

Many of us would like to think that we've increased in our sophistication since college. Perhaps, but I think maybe we've just traded the pitcher of beer for a Blackberry.

In his book, How to Think Like Leonardo DaVinci, Michael Gelb reflects Leonardo’s lament that, the typical person “looks without seeing, listens without hearing, touches without feeling, eats without tasting, moves without physical awareness, inhales without awareness of odor or fragrance and talks without thinking” And that was before the information age and internet. I could only imagine what he’d think of our sound-byte driven life and executive book summary culture.

As we experience the ongoing onslaught of information bombarding our senses, many of us have developed filters and other mechanisms to help us "focus". But focusing comes at a cost. We've become information and experience "chuggers."

We've learned to filter out anything not relevant to the answer we are pursuing. One executive told me that he skips the narrative parts of memos and only focuses on the bullets. CHUUUUUUUUUUUUUUUUG. But can I blame him? He is busy, memos can be long and he wants to get to the "point".

There is more to life than the "point". Often the answer to really hard questions doesn’t lie in a few simple facts. It is hidden in your experiences. Most people agree that we learn from our experiences. Yet we tend to minimize those experiences in the name of efficiency or productivity. We need to find a balance between efficiency and experience. It’s time to rekindle our senses, opening up and experiencing more.

The first way we inhibit our senses is by turning them off. Think about all of the things you do in autopilot mode. How many gas stations are there between your home and work? Do you ever notice? Do you look much at your surroundings on your way to work or are you just trying to get from point A to point B as efficiently as possible. Without looking, what color is the shirt on the person sitting next to you? I bet you already greeted and talked with that person a bit so you probably know they are there. Have you ever noticed all of the unique decorum McDonald’s puts up in its restaurants to reflect local themes or culture? We do a lot of things in autopilot mode and in doing so, we tend to miss a lot. Autopilot is intellectual chugging. It’s about getting the job done with as little external interference as possible. It makes us more effective by dulling our senses. Instead, try to make everything that you do new. Try to find a twist on what you already know.

The second way that we inhibit our senses is by putting a buffer on them. Our euphemism for this is "focus". We measure focus on how quickly we cut through the facts and eliminate distractions to our problem. Focus creates a strange paradox. Greater focus yields greater detail. Yet, greater focus reduces your field of view. When you look through binoculars, how much of the horizon do you really see? When you participate in an overly scripted presentation or interview protocol how many stories and experiences do you miss? The greatest illustration of this is a Random Image Stereogram (RIS) or "Magic Eye". An RIS is a three dimensional picture hidden within a random collection of images. I’ve included one below. The funny thing about these is that the harder you try focus on the image, the less likely you will be able to see it. Give it a try and remember, don’t focus. If you are having trouble, stare at the center of the picture but try to "look" at the two dots on the top.

To experience more, we need to loosen up and take in more of what is going on around us. Over the years, I have built a unique set of Excel skills. Many of my friends are convinced that I stay up all night pouring through software manuals. It’s much more simple. When I get a spreadsheet, in addition to looking at the facts the person wanted me to see, I do something else. I notice the formulas, features and functions the person used. Sometimes I'll access help to understand more, but that's all it takes. It’s that simple! This is the primary mechanism through which I’ve built most of my knowledge and skills. By loosening my focus I discover so much more about what is going on.

How often do you turn off the autopilot or loosen your focus? Have you ever stopped to listen to street musicians or do you rush past them to get to your destination? How quickly do you check your watch and meeting agenda when someone goes off on a "tangent"? When talking with someone, do you listen for key words or phrases or do you listen to each word? In familiar situations, do you look for something new or let past experience and expectations take over?

Try this last exercise. Close your eyes for a second and think about the backside of your right hand. How many wrinkles are on it? How many scars, birthmarks, freckles? Is your skin smooth or rough? Hairy or bald? Do you have marks on your nails? What color nail polish are you wearing? Then open your eyes and look. How close were you? You may be surprised. Keep this in mind next time you enter an experience in an area that you think you know "like the back of your hand". The more you take in, the greater your experience. The greater your experience, the greater your opportunity to learn.

Conclusion
If you want to become a trusted advisor to your customers, you’d need to learn a lot about them. How well do you know that? How much do you listen when talking with them? Do you focus on their broad concerns? Their preferences? Their ideas? Or do you focus on gathering just enough information to complete a transaction?

Of course, like anything we need balance. Sometimes you need to focus and get things done. However, don’t let that become an excuse. Don’t only think in the short term or of the next discrete task or event. Take a broader perspective. Become a connoisseur of life, work, family, friends and your passions. If you do, you will not only be happier, you will learn a lot more.

Go out and notice something new in something old. Each day next week, try to identify five things you haven't noticed before on your way to work.

My problem is your opportunity, but it is still my problem

About four years ago, I realized that I had a major weakness. I didn’t communicate clearly. I focused on that problem and improved. Today I have a different problem – I need to fill my pipeline. I’m not ashamed to admit these problems. In fact, by recognizing these problems and getting them out in the open, I’ve been able to do something about them.

I’ve always found it odd that in so many big organizations, the word “problem” or “barrier” is taboo. The conventional wisdom in performance evaluations is that you should talk about people’s “strengths” and their “opportunities for development”. The same is true in how we talk about our organizations. I once had an executive tell me to change the title of a slide from “Barriers to sales” to “Opportunities to improve sales”.

The most common reason that I’ve heard for using the word “opportunity” for individuals is that we don’t want to de-motivate people. We don’t want anyone to feel like they aren’t special or good. Similarly, at the organizational level we worry that if we admit to having problems it will undermine our confidence as an organization. Worse yet, it might create the appearance that we aren't perfect? How can a big, powerful organization have problems? Problems are a sign of weakness and incompetence, right? Wrong. Problems, weakness, and barriers are a sign that something isn’t working and needs to be fixed. It’s that simple. Calling them anything else, simply masks the problem and removes accountability. By changing the language, we might make people feel better about themselves. But feeling good about yourself doesn’t usually fuel action.

The 70,000 people whose jobs were cut on Monday have a problem. They need to act and they need to act now. The people whose jobs are still intact have an opportunity to get a raise, a bonus, and a promotion. If they are satisfied with where they are at, the don’t need to capitalize on the “opportunity”.

Problems and barriers are not the same as opportunities. When you soften the language, you soften the message and ultimately, soften the response. There are plenty of ways to help people maintain their self-esteem. Not being clear about the impact and urgency of issues is not one of them.

Avoiding job cuts - make yourself indispensable

Yesterday, according to the New York Times(1), organizations around the world announced over 75,000 job cuts. How do you stay relevant? Today's post is a reprint from last year*. Since writing this, I have continually referred back to it in conversations. It seems to be more relevant today than a year ago. The purpose of the original post was to help people move ahead in their organization. Today, many are hoping to keep their jobs. Regardless of your goal, the point is the same - if the value you add is based on the role you play, you are easily replaceable. If the value you add is based on your unique expertise (regardless of your role), then you can become essential.
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What's so special about you anyway?

Take out a piece of paper and write down the ten ways that you add the most value to your organization.

Now go back through your list. Put an “R” (for Role) next to each item that would still be true for someone else who played your current role in the organization. Put an “M” (for Me) next to each item where you bring something special--your own unique skills, interests, or passions.

Count the Rs and the Ms. How did you do? Many people find that they have more Rs than Ms. The more Rs you have, the more you add value based on your role instead of based on who you are.

Just playing the role you were hired for may be holding you back—even if you do it very well. If you are a designated hitter, you may only get to play a few minutes of a baseball game. If you are a good financial analyst, you may only get to play when someone needs a financial analysis. In fact, the more you excel in your specific role, the more limited your opportunities may become.

Want to stand out in your organization? Want more opportunities to add value? Then find and bring something unique to the table--something that goes above and beyond your normal role.

High performers generate value from within
Look at the people around you. Who stands out? Who seems to be part of all the special projects and task forces? Who gets more visibility with senior leadership? Who is on the fast track? These people have found a way to inject their personal strengths and passions into every role or task that they encounter. They differentiate their value from the value of their role.

Have you ever said to yourself,, “I did my job really well this past year. I hit all my goals and made my customers happy. It doesn’t seem like that was taken into account.”? The reality is that it was taken into account. If you work in a high performing organization, most people are doing their jobs well and hitting their goals. You were hired to do your job well. If that is your contribution then you are only meeting people’s expectations.

Breaking the mold
Differentiating yourself from your role is not hard. It just requires focus and persistence. They key is to remember that every interaction has the potential to be a showcase for your own unique talents. There are three steps for standing out in the crowd.

Step 1: Be good at what you do

The point of this article is to move you beyond the basic expectations of your
role. However, you must start there. You must be good at what you do. If you
can’t perform well, you won’t get the leeway to do something else. The first
step to differentiating yourself is building a strong foundation from which to
deviate. Remember, you can’t break the rules until you have demonstrated mastery
of them.

Step 2: Decide what you want to be known for

Jen** was a manager in a large multi-national company. She felt that her career had stagnated and wanted to move up to the next career level. When asked what she wanted to be known for, Jen thought for a few minutes about what she was good at and replied “Project Management.” The problem was, Jen worked for a company where project management was a core skill for everyone in her role and even for most of the roles around her. There were expert project managers everywhere she looked.

We often try to emulate other people's success. While you should certainly learn from others' success, trying to copy it can be a mistake. Why do you want to compete against a standard that is based on someone else’s strengths? Set yourself apart so that your strengths become the criteria for success.

Ultimately, Jen decided that she wanted to focus on her passion for innovation and build on that as a key strength. She wanted to be the person who could identify creative and innovative solutions, then use her strong project management skills to complete them on time and on budget. That was unique in her organization. There were creative people and there were good project managers. However, few people had both.

Jen began pushing people to think differently about their solutions. When other teams had a creative idea but dismissed it as being too hard to implement, Jen helped them figure out a plan. When coworkers fell back on the status quo to ensure cheap and timely delivery, she pushed their thinking and helped them come up with a better solution.

Jen eventually became known as a pragmatic innovator. People wanted her in meetings and sought her advice. Soon she was promoted into a more substantial role and has excelled ever since. Most of the “good” project managers who were her peers are still in the same roles.

What are your strengths? What is unique about you? What do you care deeply about? Ask yourself how you can bring those elements into your current role. Use your strengths and passions to find a differentiator that is meaningful and you will find that you have more access to opportunities across and beyond your organization.

Step 3: Bring your perspective everywhere you go

Once you’ve identified your differentiator, bring it with you at all times. If you get this right, you won’t even have to be present to stand out.

Linda worked in the HR department of a medium sized organization. Like all good HR professionals, Linda understood employment law, performance measurement, learning, organizational behavior, and recruiting. In fact, she was very knowledgeable in all of these areas. However, Linda was also an extraordinary advocate for the people in her organization. This advocacy started out as a natural passion surfacing in the meetings she happened to attend. She would always say, “Let’s think about this from the perspective of our employees…” or “How would our employees feel about this?” Over time, Linda’s advocacy became a differentiator that helped her rise above her peers.

In every conversation, Linda became the voice of the employee, no matter what topic was being discussed. People invited Linda to meetings where they knew the employees’ perspective was important. They found that she made every business discussion and decision better by bringing a unique perspective.
Over time, even in meetings that Linda couldn’t attend, people started saying, “What would Linda be asking about our employees right now?” It’s not surprising to hear then that Linda was the Vice President of Human Resources in this organization. She got there, not just through her expertise in recruiting or employee relations, but through her unique strengths and passions and her ability to bring them to her role every day.

Bringing yourself to your role

You have a choice: you can let your role define you, or you can define your role. Be great at what you do, then make it better by turning it into an opportunity to demonstrate your unique strengths and passions. You’ll be amazed at the new possibilities that open up for you.

Resources

Read "The Big Moo: Stop Trying to Be Perfect and Start Being Remarkable" to find out how to unleash your inner strengths.

Read "Goal Free Living" by Steve Shapiro. Steve will help you understand how to lead an extraordinary life.

Notes

* An abridged version of this post appeared in the February, 2008 issue of Personal Excellence magazine
** Names have been changed

(1) Wall Street Waffles as It Searches for Direction, New York Times, January 27, 2009

Generic questions yield generic answers

Asking the right questions is an underlying theme of my workshops and writing. This isn't an earth shattering or new idea. Many people have written about the power of questions. Yet it seems like leaders are starting to come around to the value of questions. I usually have one or two people approach me after a workshop asking for the list of questions that apply to the topic at hand. They say that they buy-in to the idea of asking questions but just don't know the right ones. I'm usually hesitant to provide such a list. It's not that I don't think that asking general questions is helpful. It is certainly better than not asking questions. But generic questions lead to generic answers.

The point of asking questions is to delve into YOUR world and YOUR circumstances. A popular question on the lists of questions leaders should ask is, "What value do we get from doing this?" It's a good question. It will make you stop and think about your actions. But it only scratches the surface. I could answer it without knowing anything about your business (other than the costs and savings of the new line).

But we don't do "this" out of context. It's part of a bigger whole. A better question is one that takes the "this" and puts it into the context of the "thats" that the organization is facing. For example, a more specific version of the question above could be, "Should we be investing in retooling our production lines while we are considering off-shoring production?" That's a better question. It's specific to your business and your business' context. Retooling the line won't provide any ROI if that line is shut down and moved to China.

Specific questions are much harder to ask than generic questions. You have to understand your business very well. As a result, many leaders shy away from them and turn toward the general lists. That's a mistake. Learn more about your business. After all, if you don't understand your business enough to ask a specific question, you probably don't know enough to provide a useful answer to a generic question.

Hitting targets the easy way

A guy is walking through the woods. He notices that almost every tree has an arrow shot into it. Every arrow is planted dead-center in a target. He is amazed. He passes over a hundred trees - all of them with perfect bulls eyes. Finally he sees a frail old man crouching down to pick up a quiver of arrows. He approaches the old man and says, "Do you know who shot all of these bulls eyes?" The old man replies, "Sure I do. It was me." The guy gives him a quizzical look and says, "YOU made all of these shots? Would you show me how to do it? I'll give you five hundred dollars." "OK" says the old man. The guy gives the old man $500 and picks up a bow. "You won't need that" said the old man. "Then how are you going to teach me?" asked the guy. "It's really quite simple" the old man continued, "You shoot first and draw the circles after."

Unfortunately, I can't remember where I first heard that joke yet I tell it at least once a month in business meetings. As leaders we often do the same thing as the archer. We set our targets AFTER we've seen what we are going to achieve. And just as with the archer, we tend to always hit those targets.

Sometimes this is subtle. We have a formal goal-setting process at the beginning of a year and set our targets. Then throughout the year we adjust and revise our targets. When we do this, we are redrawing the circles. It is as if accuracy of the target is more important than actual performance. Some argue that changing the target manages expectations. Managing expectations is important, but that's not the purpose of a target. Targets are measurement tools. They help you make decisions about the effectiveness and efficiency of the work you are doing. Missing a target means that you have to change something about the work you are doing (other than the target). By continually adjusting the target, you mask the real problem and delay taking action.

Setting expectations is done through forecasts. Forecasts should change as new information becomes available (although if they are changing often it might mean that you are not thinking them through and they will eventually become useless). They key is to separate your forecasting process from your goal setting and tracking process. Otherwise you undermine both.

A less subtle example of drawing the circles after shooting occurs when management teams don't have an efficient process for setting targets and goals. In those cases, the goal setting process takes several months and final goals aren't agreed upon until the organization is three months (or more) into the year. Not surprisingly, the targets often align very closely with the first three months performance.

Setting and managing against targets is an important management tool. Targets let you gauge performance and determine whether you need to make changes. Hitting a target retroactively might feel good, but it doesn't help your business move forward.

Hitting your targets without reaching your goals is bad business

I went to a convenience care clinic yesterday. My regular doctor was on vacation and I thought that I might have strep throat.

As I sat in the examining room something struck me. It was the word “EXCELLENT”. It was everywhere. One sign read:

EXCELLENT SERVICE
Our goal is to provide you with EXCELLENT service.
Please let us know what we can do to make your visit EXCELLENT.

A second sign, from the charge nurse, also reinforced that they were striving for EXCELLENT service and that if I didn’t receive EXCELLENT service I should contact him or her.

Normally this would have just struck me as odd. However, having worked in healthcare, I had a suspicion as to what was happening.

It turns out this is a trick that is used to increase customer satisfaction scores. Patients, customers, or anyone else, when given the opportunity to rate you on a survey, will mirror the language that they heard during the interaction.

My guess is that in a few weeks I’ll receive a customer service survey. The highest rating on the survey is probably “EXCELLENT”. In the hospital that I worked, the key words were “VERY GOOD”. Our nurse managers were taught to say “Very Good” repeatedly when talking to our patients. Even our elevator wished you a “Very Good” day when you exited in the lobby. The consultants who worked with us at the hospital assured us that our scores would go up if we would consistently use that phrase. To a certain degree, they were right.

Here’s the problem. Our service wasn’t changing (in a meaningful way). If two people have identical experiences but one rates the experience higher because of this subliminal scripting, was that experience really better? Some may argue that it was since satisfaction is about perception. Whether it is or not, I think this strategy misses the mark. While changing perceptions is important, the goal of measuring satisfaction is to ensure that your people, processes, and systems create a good experience for your customer. This is a case where people lost sight of the metric as a proxy for a goal. They began to make decisions and take actions for the sake of the metric rather than the goal. Instead of teaching people how to create a better patient experience, we were teaching them how to get the patient to mark a different number.

The real question we should have asked was whether we believed that our current service was adequate. If we thought our service was good, why were we spending any time trying to get our patients to give us a higher score? We should have just set the target accordingly. Conversely, ff we felt that our service was inadequate, why focus on changing perception rather than the actual service? Keeping the service the same while focusing on improving perception provided little practical value especially to the patient. (Note: there was some value since the patient satisfaction scores are converted to a relative ranking against other hospitals. However, in my opinion, this just creates a situation where there is significant grade inflation as organizations game the system to increase their scores rather than taking real action. Perhaps this explains why healthcare, as an industry, is rated so low against other industries when it comes to customer experience).

This isn’t just true in healthcare. You’ve probably experienced this the last time you went to a car dealer for service. You come to pick up your car and receive a copy of the satisfaction survey that will be mailed to you by the manufacturer. It will inevitably say something like, “If you can’t give us a 5 on all questions, talk to the service manager”.

If it took three days for a repair that should have taken two hours, do you somehow get that time back? If the service agent was rude does the manager someone erase that part of your memory? Of course not. They can’t change the experience which is what the survey is measuring. The best they can do is compensate you for the poor service. That’s ok. Companies should compensate their customers for poor service. If you give them all fives you enable them to hit their target without reaching their goal. Chances are, the next time you come in for service not much will change.

When they ask me what they can do to get all fives, I tell them to fix their service and quality problems, and if they don’t recur, I’ll give them all fives on my next visit. That’s the right way to help them use their survey to improve service. If there is a question on responsiveness to my concerns, I’ll certainly give them a five on the spot. I’m not going to say that the other aspects of the service were good when they weren’t.

Gaming the system happens everywhere. I worked in one organization where managers would wait to fire employees until after their probationary period. This was because there was a metric in place regarding attribution in the first six months. The goal behind that metric was to decrease costs and improve the quality of the recruiting process. It’s expensive to hire and orient employees and losing employees in the first six month is a problem. However, by keeping the employees beyond their probationary period, these mangers were making things worse. Not only did the company continue to bear the cost of poor performers, it also had added costs since it’s harder to fire someone after their probationary period. In addition, by keeping the employees, it masked the original recruiting problem for which the metric was designed to track.

Measures are proxies. Proxies aren’t bad as long as you remember that they aren’t the goal. They are a tool to help you determine whether you are achieving a goal. Playing to the metric without understanding or attending to the real goal will only provide short-term benefit.

Every organization needs a SMART ASK

Are you a Smart Ask? Do you have one in your organization?

A “smart ask” is a person who pushes the organization by asking tough and insightful questions. The Smart Asks helps you find holes in your thinking or challenges your deeply held assumptions.

Smart Asks are a valuable asset for an organization. Yet, they are often shunned or avoided. They make things harder. They don’t always appear to play well with others. They don’t give you the confidence of having unanimous votes for all of your ideas. But, they do keep you honest.

Asking questions is easy. Asking good questions is a skill. The Smart Ask knows how and when to ask just the right question. The smart ask usually doesn’t ask about facts – anyone can ask about those (and they don’t provide a lot of value). Smart Asks focus on meaning and purpose. They ask for the implication of the facts. They ask whether the facts matter. They ask whether the facts are even reasonable in the first place. That’s the role of a good Smart Ask.

While Smart Asks are hard to find, their nemesis, the Ask Hole is easy to find. Ask Holes are the people who use questions to shoot down ideas or silence people. Their questions are really statements with a question mark at the end. The Ask Hole focuses on facts and details at a time when you should be focused on possibility and opportunity. The Ask Hole uses question to embarrass or squelch others. Most importantly, the Ask Hole uses questions to make his or her point rather than to understand yours.

Which one are you? Are you a Smart Ask or an Ask Hole? Which one gets rewarded in your organization?

You might not be the Smart Ask but you’d better be sure you have one. And, under no circumstances should you take on the role of Ask Hole. There are already too many of them cluttering up your organization.

The Question of Leadership has changed its name

The Question of Leadership has a new name. When I first started this blog, I thought my focus would primarily be on answering the question of what leadership is all about. When I look back on many of the entries in this blog and reflect on the leadership work I've done with organizations, I realize that I've had an answer all along. Leadership is about creating meaning. That's the common thread in all of the work I've done. Leaders create meaning by providing context and perspective to that which is happening around them. Thus, the new name for the blog is "Making dollars by making sense."

I think that the idea of meaning is often overlooked or under valued. "Meaning" is one of those squishy words that doesn't seem particularly practical, especially in a business environment. We are taught to act, not necessarily to think.

Yet, I believe that those leaders who take the necessary time to create meaning will be rewarded. There is a widening body of literature on this topic from Daniel Pink's "A Whole New Mind", to books on analytics to books on storytelling in orgnaizations. Meaning is here and it's necessary for organizations and their leaders.

There are four areas in which leaders create meaning:

1. Creating a meaningful contribution to their organization
2. Creating meaningful work for their people
3. Creating meaning from information and data
4. Creating meaning for themselves and the work they do

Nearly every post in this blog ties to one of those four categories. Moving forward, while I'll continue to write on a wide array of topics, I will filter all of them through this lens.

I hope that this blog has helped you make sense of your role as a leader and wish everyone a new year full of meaning, purpose, and impact.

When equal isn’t fair

Do you treat your people equally? Do they want to be treated equally? Conventional wisdom might say they do. But I’m not so sure. I think that people want to be treated fairly and often that means treating them differently.

In “Getting to Yes”, Roger Fisher tells a story that illustrates the difference between equality, fairness, and good solutions. Two people are arguing over an orange. Their solution is to cut the orange in half so each gets an equal piece. He points out that while the solution is equitable it’s not that good. The first person discards the peel and eats the fruit. The second person, discards the fruit and uses the peel for a recipe. They had different needs. The equal solution only met half of their needs whereas giving them different things, one the peel and one the fruit, might been better for both of them.

It works the same with your people. I call this the averaging problem. Think of the numbers 1,2,6,8,9. Their average is 5.2. Averages are a measure of central tendency. That means that the average is the number that is closest to every other number. It also means that the average is unlikely to be any of the numbers in your data set. Treating everyone equally is much like applying an average. The solution is probably equally close (or far) from meeting each person’s needs yet it probably fails to specifically meet any of their needs.

This isn’t just true for decisions about perks or special assignments. It is also true for how you interact with your team.

If you are having the same type of conversations with your high performers that you have with your low performers, something is wrong. Sure they are equal. But high performers need to hear about the future and how to get there. Low performers need to hear about the present and how to continue to be a part of it.

I used to rotate special projects among my team members (in an effort to treat them equally). Then someone pointed out that giving more work to the person who wasn’t able to do her job wasn’t really helping. It certainly wasn’t fair, though it was equal.

Fairness is about consistency but it’s about consistency in your process. As long as you are making an earnest effort to meet each person’s needs and as long as you give each consideration your full time and attention you are being fair. When you do that the end results might be very different for each person. In fact, if you do it right, it should be.

Looking back while moving forward

Lately I’ve been pushing leaders to stop having their teams walk them through their analysis and just start with the conclusion. I’m finding that many people are uncomfortable with this. Leaders don’t want to make decisions based on bad data. Even more, they don’t want to send bad data to their boss. So how do you balance checking the data without slogging through the entire analysis all over again? The answer is to get the data in the context of pushing the conversation forward rather than backward.

Leaders create meaning through their context and perspective. Reviewing data is no different. Suppose you are reviewing recommendations on which regions need help improving sales. Don’t ask your team to provide specific details on how they analyzed the sales data or how each individual region did – that’s just rehashing old work.

Instead ask about the conclusions. Is there a region that you believe (or know) has been steadily improving in the past six quarters? If so, ask if they saw that trend? It’s a simple question but it will continue to drive toward greater understanding and it will “check” their process. If they didn’t look at trend data you’ll find out. If they forgot that region you’ll find out. If they did both, you’ll have saved time by not talking about a process that was done correctly and you’ll move the conversation forward by talking about what the data means.

Another option is to ask questions around what you expected to see. Does the data confirm what you suspected? If so, why did you suspect that? Ask questions that confirm or refute those assumptions. Similarly, if the data doesn’t agree with what you expected, center your questions on those assumptions.

Asking good business questions, based on the context and perspective you have about the organization will more efficiently and more effectively move the conversation forward and check the process. It will also give your people a greater sense of empowerment since you are engaging them in a conversation about the business rather than just checking their work.

Here are a few tips to keep in mind:

1. 
   If you are not confident in an individual’s ability to execute the analysis properly (e.g., do the math correctly, get numbers to foot, etc.) you need a different person (or you need to develop the one you have). It’s not in anyone’s interest for you to redo someone else work in the guise of a review.
2. When the stakes are high and accuracy is critical, build a quality process that ensures that the mechanical parts of the analysis are done correctly. Your value isn’t adding and double-checking numbers. It’s in interpreting them.
3. If you find that you spend more time on the details than on interpreting them, find out why. Are you unsure about the broader business issues? Did you commission an analysis without first thinking through the problem and what you expected to see? We often dive into the details because it’s safer than confronting our knowledge of the big picture.

Are you hitting your targets but missing your goals?

Take a look at your process metrics. Are you using any mean scores? If so, you might be missing performance problems. More importantly, you are reducing your ability to make decisions and take action.

For example, suppose that your help desk has a goal of getting issues resolved within 90 seconds. It resolves resolving half of the issues in 60 seconds and the other half in 120 seconds. This would look if your target (metric) was set at an average of 90 seconds, yet you'd be be missing your goal fifty percent of the time!

That’s the problem with a simple average. By its very nature, it can mask what is really happening. For example, here are three scenarios in which you could have an average time of 90 seconds per call each of which would require a different action:

• Fifty percent of the calls take 30 seconds, and fifty percent take 150 seconds
• Twenty-five percent of the calls take 60 seconds, fifty percent take 90 seconds, and Twenty-five percent take 120 seconds
• All calls take 90 seconds

In the first case, you probably have some significant and broad reengineering work ahead of you. In the second case, you probably have some focused process improvement. In the third case, you are right where you want to be.

The point is that understanding variance is as important, if not more important, than understanding the mean. This is the basis of quality processes such as Six Sigma. There are a lot of good books and articles written on this subject.

But, there is a simple way to get started – switch to using frequencies instead of means. In the example above, your metric might be that 80% of the issues must be resolved in 90 seconds (you would set the percent based on your business model). This way, you can’t be fooled. You can also set a lower bound frequency – less than 5% of all calls should take more than 90 seconds. While the frequencies won’t tell you the cause of the problem, they will give you information that is more actionable.

For example, when reviewing customer satisfaction data, I used to use three frequencies (the data based on satisfaction surveys where 1 was very dissatisfied and 5 was very satisfied):

• Percent of ones and twos (people who weren’t satisfied
• Percent of fours and fives (people who were satisfied)
• Percent of fives (people who were very satisfied)

I’d look at questions or departments that fell outside the bounds on any of them in the following way:

• First focus on areas that were having more ones and twos – usually major changes were necessary
• Then focus on areas that were having fewer fours and fives combined – usually there were a couple of key issues
• Finally, focus on areas that had fewer fives – usually “polishing” some rough edges was all that was needed

Those three simple frequencies allowed me to triage and prioritize my effort on improving satisfaction. (Of course, your prioritization also depends on impact - it could be that moving the fours to fives has a greater impact than moving the ones and twos.)

A classic question from Statistics 101 is, “Would a six foot tall person always be able to walk across a pond whose average depth is 5 feet without drowning?” Of course not and your business can’t either. Hitting a target that’s based on averages might just mean that you are having average performance.

The path of least resistance

I recently purchased a Blackberry Storm. After setting up the essentials (contact list, calendar, etc.), I copied my music. My last phone didn't have an MP3 player built in. I was excited that Iwould no longer have to carry both a phone and MP3 player with me.

I decided that it was only appropriate that I break the MP3 player in with the Boss. So I queued up "Live in Dublin" and waited to hear the opening of "Atlantic City" (BTW: Live in Dublin has some of the best alternative versions that I've heard). Well, I waited, and waited but no song. Then I saw a little message on my screen - "Invalid file format". After some investigation, I found out that file format wasn't the issue. The issue was with the digital rights to the song.

When I bought the album, WalMart.com said that I would have the right to burn it 10 times and synch it unlimited times. Unfortunately, WalMart chose to stop supporting DRM last Feb and no longer updates your licenses when you try to synch. But, this isn't about Walmart. As much as I am disappointed by their decision (and it will impact my decision to shop there), this is a bigger issue. It's about the recording industry.

The recording industry doesn't want me pirating their songs. That's fair. I don't want to pirate their songs either. I believe that artists, producers, and recording companies are providing a product and deserve to be paid. So, we both want the same thing. Yet, they've made it really hard for me to do 1) what they want me to do, 2) what I want to do, and 3) what is right. That's a problem. It's a problem because people tend toward the path of least resistance. As I've researched this in an attempt to find a solution I've discovered something interesting. The only people who have problems are the ones who are buying musically legally. I haven't seen any web or blog postings saying, "Gee, it's such a pain to copy pirated music onto my MP3 player". So where's the incentive to do it legally? For me the incentive is that I believe that pirating is fundamentally wrong so I'm not doing it. I can certainly see how someone else with a similar belief might eventually tire of hitting their head against a wall. I'm willing to meet the recording industry half way on this one, but I wish they would have been willing to do more to help me help them.

While this story is about an industry and its consumers, it's a good lessons for leaders. The recording industry made two mistakes. First, they focused more on the people who weren't "bough in" than those who were. That's a common mistake. The truth is that cheaters will almost always find a way to cheat. Building your systems around them usually just makes it harder for those who want to work within that system. (From what I've been reading, many spam programs seem to have better success at reading graphical captchas* than I do). As a result, the second problem occurs -- it eventually become too hard to do the right thing.

Right now there are people in your organization who want to do exactly what you want them to do. But, there are processes, policies, rewards, and an organizational culture that make it easier for them to do something else. Those people are willing to meet you half way, but you can't put the burden on them to take it all the way. They need your help.

Make doing the right thing the path of least resistance. When you do, you will start getting the results you want.

*captchas are those pesky boxes with the funky, barely intelligible letters inside of them that you sometimes see on web forms. Their purpose is to prevent spam programs from signing up for multiple accounts or sending out spam through blog entries, comments, etc. The problem is that many of these captchas can now be read more (or equally) effectively by computer programs (which are created by spammers) as by people. And the computer program doesn't get frustrated if it take ten tries.

How to really show that you've been working hard

Demonstrating the amount of effort you've put into your work is an interesting challenge in the post-industrial age. In the past, we often had some big (or not so big) thing that we produced. That thing became a symbol of our work effort. It was hard to argue that someone didn’t put in a good day’s work when there was tangible product created at the end. But many of us don’t make “things” anymore. We analyze information, make decisions, or develop strategies. Our product is often presentations or documents. How do you show your effort when your product is more information, or in some cases, a simple answer to a question?

In my analytics workshop, I encourage people to boil findings down to a few salient points that tell a concise yet compelling story. For example, instead of showing a bar graph with ten years of historic sales data moving in an upward trend, you simply state the point of the graph (i.e., “Sales have been steadily increasing”) as part of a broader argument. Yet, while this creates a more concise and efficient story, I get tremendous resistance. The main concern that many people have is that if they boil their work to a few simple points, it won’t show all of the effort they put in. They believe that the graphs, charts, tables, and details demonstrate their hard work.

It’s time that we rethink this. First, we need to break our assumption that the number of slides or words used is a measure of quality or thought. I would even take that one step further and say the opposite is true. The more slides or words you use, the less you understand the big picture. Take Einstein’s famous equation E=MC^2. Einstein’s genius was his ability to reduce such a complex subject to a simple, elegant formula.

Second, we need to stop worrying that a statement is not credible unless it has first been qualified with a mountain of detailed data points. I’m not suggesting that we stop using data to draw conclusions. I am suggesting, however, that we don’t need to rehash the same data over and over again. If you’ve done the analysis once, why take your boss through it again? That’s not efficient. If he or she needs the original data to draw a conclusion then you aren’t really needed in the process.

Third, we should start our conversations with the results and then pull in our thought process or supporting data as needed. Leaders have to get used to this as well. Many of the people I speak with tell me that the main reason they provide so much detail before getting to the point is that their boss requires it. Starting from where the last person left off will move you much further in less time than rehashing old thinking.

It’s time to change our thinking about our work and the value we provide. Bigger isn’t always better, especially when it comes to making a point. If you feel the need to take your boss through your thinking from start to finish then you aren’t doing your job. As a boss, if you need to have your people take you from start to finish, you either have the wrong people or you have the wrong attitude about leading. Either one will slow productivity and the ability to make good decisions and take action.

Questioning certainty

Yesterday I filled up my entire gas tank for $15, $1.79 per gallon. It wasn’t that long ago that I recall many experts telling us to brace ourselves. They were certain that we wouldn’t see gas fall below $3.00 for a very long time, if ever.

The September 27, 2008 New York Times Article, “Behind Insurer’s Crisis, Blind Eye to a Web of Risk” starts off with this quote, from 2007, given by a former executive at AIG,

“It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of those transactions.

(“http://www.nytimes.com/2008/09/28/business/28melt.html?em).

These aren’t isolated examples. How often do you hear predictions or recommendations given that are qualified by the speaker’s assurance of their absolute certainty?

The issue with the two predictions above isn’t that they wound up being wrong. The real issue was the way that the speakers ruled out any possible alternative to their way of thinking. That’s dangerous. That’s not leadership, that’s fanaticism disguised as business.

So should we stop trying to make any prediction or forecast out of fear that we’ll be wrong? Of course not. Speculation is an important part of a leader’s job. The willingness to put oneself on the line in that way is something that differentiates leaders from the rest of us. Somewhere along the line however, we’ve come to judge people’s credibility on how certain and confident they appear.

Perhaps, it’s time to shift focus. Strength/ knowledge/ leadership shouldn’t be a measure of certainty. It should be assessed based on thoughtfulness.

Good leaders make predictions that are based on careful thinking. Given the complex world in which we operate any belief in a single right answer or conclusion is wrought with problems.
Here are a few tips for ensuring that you are tempering your certainty with sense:

• The more certain you are, the more questions you should be asking
• If you can’t see an alternative scenario within the realm of reason, find someone else who can.
• Don’t accept the first reasonable solution you hear, require that someone research an opposite scenario/alternative
• Don’t believe that something is right, until you’ve thoroughly exhausted all the ways it might be wrong

In the information age, is scope still a good proxy for impact?

A friend of mine recently received feedback that if he ever wanted to be seen as successful he needed to take on more responsibility. Otherwise, he could never have enough impact to compete with his peers. I hear this argument made a lot. There is a bias that unless you supervise a large group of people, have responsibility for several program areas, and manage a large budget, you can’t have impact.

I think that made sense in an industrial model. When you product was a “thing”, certainly the more things you could get produced the greater the impact you could have on a company. More people, more budget, and more program areas were a natural way to produce more things.

However, I’m not as sure that this always holds true in an information/conceptual age. If you generally believe the Pareto principle, you know that 80% of an organization’s value is driven from 20% of your resources. Therefore, couldn’t a person managing 20% have a greater impact than the one managing 80%? Isn’t the mantra “do more with less”?

As the financial crisis continues to unwind, we are finding that the people who defined and executed the investment strategies for financial institutions had significantly more (negative) impact than the rest of those institution’s workforces. Those investment teams didn’t have large client bases and probably didn’t have huge teams (compared to the sales force). Yet, they had enormous impact.

Tools like outsourcing and automation allows us to better separate transactional work from value-added work (i.e., splitting the “eighty” from the “twenty”). The result might be that some people have very small teams focused on the “twenty” while others may have large teams or systems focused on the “eighty”. Who is better positioned to have impact?

Some organizations have begun to recognize this, at least on paper. Increasingly organizations try to tie goals to outcomes rather than process metrics or span of control type metrics. However, we still have a long way to go on using truly outcome-focused measure in our goals – but that is a topic for another day. Perhaps we are moving in the right direction. Yet, there still seems to be a belief that people with more “responsibility” (where responsibility is defined in terms of quantifying people, programs, and budgets) have the potential for having greater impact.

This is not to suggest that leaders who have a high span of control don't or can't have impact. The point is to change our focus from how much is being managed to what is being managed and assess impact accordingly.

Working with high, average, and low performers

“You are one of the worst leaders that I’ve worked for.” Imagine my surprise at hearing those words upon walking into the break room. Yet, once I listen to this person’s concerns, I had to agree. Well, I didn’t think I was one of the worst leaders, but I certainly had been making some mistakes.

She believed that she should have been promoted long ago. “Good leaders advocate for their people, you don’t back me up at all.” - It was my fault that she hadn’t been promoted. What I could not tell her (or at least what I didn’t feel was appropriate to tell her at that moment) was that just two weeks before I was advocating for her. I wasn’t advocating for her promotion though. I was trying to convince my boss and the rest of the leadership team that we should give her one more chance and not fire her.

I wasn’t being a good leader. How could there be such a mismatch between how other people saw her and how she saw herself? The answer was simple, I was sending her the wrong messages.

I wasn’t falsely praising her or telling her that she was next in line for a promotion. It was much more subtle – something that I see many leaders do. I didn’t differentiate the way that I interacted with her. In fact, I took pride in the fact that I treated everyone on my team the same. That’s a mistake, not everyone on your team is the same and treating them that way is what is unfair.

People who perform at different levels require different types of interactions with their leaders. This isn’t just about telling them their level of performance. In fact, directly labeling someone as a high, average, or low performer does more to hurt than help their performance. I’ve found that thinking through the following seven types of interactions will help you differentiate the way you work with people at all levels:

• What is your goal for developing this person?
• What do you talk about?
• What do you hold them accountable for?
• What types of opportunities do you provide them?
• What type of training/information do you provide?
• What type of feedback should you provide?
• What should you recognize and highlight?

More importantly, you do this consistently. You do it through both informal and formal processes and in every interaction.

The table above shows how you can differentiate your interactions for high, average, and low performers. Remember that the goal isn’t to compliment or stigmatize anyone. It is to provide the guidance and support they need to succeed.

Good leaders don’t treat everyone the same. They recognize that each person has a different set of needs based on their ability and performance. Good leaders adapt to those needs and meet people where they are at.

Goals should be about more than just doing the job well

What if I told you that my personal goals for the year were:

• Maintain a healthy weight
• Don’t bounce any checks
• Buy groceries once a week
• Wake up on time each morning
• Be a good parent

My guess is that you’d be pretty underwhelmed. These don’ t sound like goals do they? They sound more like the things I am supposed to do as a normally functioning grown up.

So why is it that I often see similar goals in the business world?

• Achieve quality target
• Maintain customer/employee satisfaction
• Complete XYZ project on time and on budget
• Make operating margin of 5%

Like the personal goals above, these goals are just a statement of what you are supposed to do as a normally functioning leader. Your goal shouldn’t be to hit the budget, your job is to hit the budget.

Goals should focus on specific positive changes that you are making to the organization. They should be about results and outcomes.

Part of the reason that these get tangled up is compensation. Goals often play a key role in determining bonuses and other rewards. That’s fine as long as the bonus really is a “bonus”. If you are giving someone a bonus for meeting the budget, aren’t you paying twice for his or her performance? The first time you paid with their salary, the second time you paid with the bonus. If they can’t meet a budget, they should be getting remedial help (or another job).

Leaders have to run your business efficiently and effectively. They also have to improve it continually. Those are two separate issues. Make sure that your expectations, goals, compensation, and rewards are aligned properly. A leader whose goals is to merely do his or her job successfully is not a leader at all.

Questions that create focus and clarity for your team

The power of focus is amazing. Focus and concentrate light and get a laser that can cut through steel. Focus your body and movement and you can break a board with your hand. The same holds true for teams. A well-focused team creates more power and impact for your organization.

Goals and KPIs are an effective way to focus a team. Most leaders use them in one way or another. However, metrics only provide part of the picture. To complete the picture and ensure long-term success as well, your team should be clear on three basic questions:

• What are we?
• Who are we?
• What do we do?

What are we
Every organization has a unique purpose. Surprisingly the members of those organizations aren’t always aligned in their understanding of that purpose. One of my favorite models for defining your organization’s purpose comes from the book Adaptive Enterprise by Stephan Haeckel. Haeckel uses the term “Reason for being”. The reason for being is a short statement of the organization’s purpose. It includes these components:

• What is our primary action? (at the highest level)
• Who is the primary beneficiary of our actions?
• What are the non-negotiable qualifications or constraints under which we act?
• What is the ultimate outcome (result) of our actions?

These questions look simple but I’ve yet to find a team that consistently agrees on all four. By understanding the answers to these questions, teams will be more empowered, more adaptive, and more able to make the right decisions.

Who we are
What’s the difference between Disney and your local amusement park? On the surface, they often look very similar. Yet, many people find that they have a very different experience at each. The people primarily drive this experience. It’s not about what he organization does, it’s about what the organization is. Places like Disney, the Ritz Cartlon and other world-class organizations have strong, consistent, and well-defined cultures. That’s what separates them. Creating expectations for how people should act is as important as what they should accomplish. In one workshop I asked leaders to identify five to eight cultural expectations of their people. That is, how do they expect people to act regardless of their role, their position, or the goals/metrics that are set forth? While most leaders can create the list, many admit that they’ve never shared the list with their people. Here is an example of the expectations that I’ve set with my team:


Members of our team . . .

• Act With Integrity
• Embody A Passion For People
• Drive Outcomes And Results
• Draw Upon A Point Of View
• Work As A Team
• Engage in dialog and offer insight
• Spark Curiosity And Innovation
• Think Holistically
• Treat All People With Respect

For each of these, I have written a 3-4 sentence description to clarify my expectations. More importantly, this is what I model and emphasize with each person. To be a high performer in my organization, an individual must achieve their goals AND meet these expectations.

What we do
Most people understand the daily tasks for which they are assigned. Yet, it can be easy to lose sight of the big picture when stuck in the details. I was once working with a team that was trying to improve the usability of an information system. They asked people to identify information that was difficult to locate in the system. I asked them what they did with that data. As expected, they categorized it, prioritized it, and created a set of recommendations about how to improve the system. I then asked if the team ever told those users where the information was. They said no – they would fix the system and then people could find the information. That was their job. I reminded them that their job was to help people get the information they needed, and that they had a group of people whose information needs they specifically knew and they didn’t provide it. They got lost in the task and lost sight of the outcome.

What you do is not a list of tasks. It is the outcomes for which you are responsible. I like to think of it as the five to six things that you must get right for the organization. It is an extension of the reason for being. There are four key parts to answering the question of what you do:

• Ultimate goal/purpose (e.g. reason for being)
• Drivers – the key things that determine whether you meet your goal
• Performance – what we must accomplish
• Metrics – how we will determine success

The picture to the right provides an example of “what we do” statements from a phlebotomy department at a hospital. Phlebotomists are the people who take blood.

None of the items on this chart are tasks. They all are results/outcomes driven to different levels of detail. As with the reason or being, a clearly stated description of “what we do” empowers teams focusing their actions and decisions.

Creating clarity
A well-focused team will deliver better results in a more efficient way. They will also generally be more engaged and satisfied with their work. Clarity not only focuses, it helps give meaning and purpose to people’s work.

The most important thing to remember is that clarity doesn’t come from documents or pictures. It comes from interactions. Your job as a leader is to discuss, reinforce, and exemplify what you are, who you are, and what you do as an organization.

Would you lay down your life for a fact?

I love facts and data. They help ensure that I am thinking objectively and drive sound decision making. Despite that, I would not lay down my life for an argument that was solely based upon them. People don’t rally around facts and data. They rally around purpose and meaning. In other words, they rally around being part of a compelling story.

The other day I was wondering what would have happened if the Founding Fathers succumbed to the pressure of conveying their ideas in a “data driven" way. Consider this passage from the Declaration of Independence:

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”

I think that it might have wound up sounding something like this:

A recent survey on equality among men shows that over 97% (margin of error +/- 2%) of men believe that they are created equal. Additionally, studies conducted by the Center for the Advancement of Unalienable Rights (CAUR) found that the three rights to which most people believe they are entitle are: life, liberty, and the pursuit of happiness. Best practices in public sector governance have found that Governments that derive their power from those that they govern, are in fact, 45% more like to succeed. 92% of governments* that do not adhere to this principle are often overrun by those that they govern - without those people feeling any remorse. In fact, 87% of people surveyed strongly agreed or agreed with the statement, “It is the right of the people to alter or to abolish their government if that government becomes destructive to their rights of life, liberty or the pursuit of happiness”. Governments that embrace their people and enable these rights have a higher growth rate, greater economic and civil development, lower infant mortality, and greater year over year GDP growth. Based on this, we believe that it is necessary to severe ties with the government of England."

*The study did not include extreme totalitarian regimes as they were unable to secure accurate data.

I obviously don’t have any hard data on this, but I have a feeling that had the Founding Fathers laid out the fact-based case for splitting from England, things would look a lot different today.

There is no question that data has an important role to play in business. Use data to make decisions and drive actions. But use your mind, your heart, your vision and a story to bring others along.

Creating an environment of open communication

Many leaders want to create an environment of open communication. Open communication is important for an organization. It ensures that problems and issues get raised, and more importantly solved, in constructive ways. The secret to creating such an environment isn't communication at all. It's something more fundamental. If you want an open environment, you must create an environment of trust and respect. Once you accomplish that, communication will flow freely in all directions. There are four things you can do immediately to start building an environment of trust and respect. All four require small changes in the way you communicate but will have a big impact.

Separate facts from emotion
Most of us have at least two conversations going on at any time. There is the conversation (or conversations) that we are actually having with others and there is the conversation we are having in our head. Consider the following example:

Suppose that Joe gives Sam a work assignment. Sam questions Joe to understand more about the assignment. Joe sees this as Sam questioning his authority. This causes Joe to think that Sam does not think he is competent. In turn Joe begins to distrust Sam as he thinks that Sam is trying to undermine him. Joe begins to distance himself from Sam, engaging him less ultimately ruining both of their success.

We all have these conversations. Unfortunately, the conversation in our head quickly departs from the one that is happening with others. The one in our head involves assumptions, biases, past experiences, our own insecurities, or our own issues everything but what is actually going on around us. That would be fine if the conversation remained confined to our heads. The problem is that the conversation in our head often begins to influence the conversation we are having with others. As a result, we stop talking about what's real and engage in a dialog of imagined problems and issues. As a leader, you have two jobs in keeping conversations to the facts: 1) recognize when you are focusing more on what's inside your head than on what is happening in front of you, and 2) communicate in a way that keeps others from spiraling into emotion-based conversations. The remaining three tips will help you do both.

Listen and ask questions
One of the biggest drivers of communication problems is lack of listening. Listening is not the same as hearing. Hearing is a passive activity whereas listening is active. Listening is about seeking understanding. Active listening is also one of the most powerful ways to convey respect. If you are focused on your computer, Blackberry, or another conversation while someone is speaking, you are essentially telling them that you do not respect them enough to provide your full attention. More importantly, you are inevitably missing what they are saying. Recent studies show that despite people's belief in their ability to multitask, no one really does. They might pick up snippets of a conversation, but you often lose the subtly or meaning behind that conversation.

One way to both ensure and demonstrate that you are listening is to ask questions. If you set a goal to respond to every question or statement with a question, you will soon find that you are more attentive to the person speaking. You have to be. You have to listen in order to find something to ask about. At first this might feel awkward or even inefficient. Why would you answer a question with a question? Doesn't that just prolong the conversation? Give it a try. Eventually it will become more comfortable. And, you'll probably soon find out that your conversations become more efficient. Once you start listening, you will actually start answering the question that was asked instead of the one that you thought you heard. This will also prevent the dialog in your head from taking over the conversation. By asking questions, you clarify the other person's intent rather than making it up.

Here are some tips to improve your listening:

Key principles

• Agreement does not always equal understanding
• Understanding does not have to equal agreement
• Fierce conversations do not have to be mean conversations
• Everybody owns a piece of the true reality—seek it out

Tips

• Answer questions with questions. If you don’t have a question, try one of these . . .

Can you give me an example?

Why do you think that?

Can you explain that a little more

• The more certain you are, the more questions you need to be asking.
• Never make a statement until you’ve asked a question
• Ask yourself, “Am I trying to get others to understand me” or am I trying to
  understand them?”

Separate people from issues
Which statement sounds better?

• You don't seem to care about your work.
• I noticed several errors in the document that you gave me.

Most people prefer the second one. The first one is a statement about the individual. It may or may not be true but more importantly it does not solve the problem. It doesn't even state the problem. Worse yet, it primes the other person for an emotional conversation in their head. Statements about people don't create trust. Statements about issues do. There are a few things you can do to keep the conversation focused on issues and away from the person:

Focus on . . .

• Tasks or activities
• Data and facts
• Standard or targets

Avoid . . .

• Adjectives
• Judgments
• Motivations (or guessing what they might be)

Move people toward success rather than away from failure
Have you ever told a young child not to spill? What usually happens? They spill. In fact, the more you tell them not to spill, the more likely they are to spill. One explanation I’ve heard for this is that our brains have a difficult time visualizing the negative. We understand it conceptually but we can’t “see” it. So, when you tell the child not to spill, what they visualize is spilling. You’d be much better off telling the child to keep the bottom of their class flat on the table or to keep the glass upright. They can see that in their mind, and, they can do it.

Aside from being easier to visualize, most people prefer receiving positive direction. People like to achieve goals and get results. Consider the following two pieces of feedback:

• There were many spelling errors in your presentation
• It is important that our presentations are accurate and meticulous format

It is the same point. Yet, the first one puts people on the defensive and primes their emotional pump The second gives them a goal, something for which they can achieve and feel good about themselves. The second one also builds open communication. With the second statement, the individual is more likely to engage you in a conversation about how to avoid such problems in the future. With the first statement, they’ll probably focus on why the problem wasn’t their fault or on why you always pick on them.

Here are a few tips for keeping your conversations focused on positive outcomes:

Focus on . . .

• Visualizing the positive
• Explaining what you want (what success looks like)
• Using specific, observable outcomes

Avoid . . .

• Telling people what “not” to do
• Using vague language (happy customers, friendly attitude)
• Making comparisons to other people (“Just be like Mary”)

Create trust and respect and you’ll open up communication
If you want open communication, you have to build trust. People will respond better when you show that you respect them, demonstrate trust, and give them positive goals and outcomes to achieve.

What it says isn't what it means

NPR recently broadcast a story about how people across the country are reacting to the growing economic problems we face. One expert talked about a recent survey. He made a comment that interested me. I don't recall the exact figures (they aren't actually that critical for this post), but the comment went something like this:

The survey said that 15% of Americans are already feeling the impact and 60% expect to feel it within the year. What this means is that most Americans expect to feel this at some point during the year. (emphasis added)

That's not what it means, that's what it says. It could mean that people do not have confidence in the government's "bail-out" plan to restore the economy. Or, it could mean that we are at risk of a self-fullfiing prophecy. People think that they are going feel an impact from the economic downturn and therefore might begin to take actions like reducing spending and borrowing, putting off purchases. This puts a strain on businesses who then might have to have lay-offs or salary freezes hurting people's spending power.

These are just examples. I have no idea what it really means. My point isn't about the economy. It's about what we pass off as meaning and how we can take it up a notch. Think about the two meaning statements I proposed. Wouldn't they generate better discussion, understanding, and decision making than the simple restatement of data? That's the point. Anyone can restate data. It takes someone with context, perspective, and experience to create meaning from it. That's what leaders do.

Questions that drive meaning

A great way to find meaning in data or when hearing information is to ask questions. Many leaders want to ask questions but don’t know where to start. Ideally your questions should be driven from your existing knowledge and he current situation. Therefore, every situation will have its own unique set of questions. However, to get started, there are some basic questions that will work in any situation. The questions in this article focus on creating meaning from information or data. They follow a simple question formula:

• What is it?
• What should it be?
• What patterns do I see?
• Does it matter?

Those questions are generally enough to start trying to find meaning. The remainder of this article provides additional variations on each one. As you read through the questions, consider the following situation: you've received a list of your company’s sales by region sorted from highest to lowest.

What is it?

• What does the big picture look like? (e.g., Overall how are our sales? Is anyone doing well? - Note: Just because someone is at the top of a sales list, they still might not be doing well in absolute terms, especially if the company as a whole is doing poorly)
• How much variation is there? (e.g., How far apart are the top and bottom sales figures? Are the sales tightly clustered or all over the board?)
• What is included or excluded from this data? (e.g., Does this include both in-store and on-line sales?)

What should it be?

• Do we have any targets against which to compare this data? (e.g., How are we doing against our sales goals?, How are we doing against our most recent sales projections?, How are we doing against last year/quarter/month?)
• Are there standards or best practices? (e.g., What do industry sales look like? Who is doing the best/worst in the industry? What do their number look like?)
• What are our competitors up to? (e.g., What do our competitor’s sales look like?)

What patterns do I see?

• What do the top performers have in common?
• What do the bottom performers have in common?
• Is the data consistent for all groups? Are there any anomalies?
• Are problems isolated or systemic? (e.g., Are similar regions reporting similar sales results?, Are stores that are under the same leaders/ executives reporting similar results?, Are stores that serve a similar customer base reporting similar results?)
• Are we moving up or down? (e.g., Have our sales been increasing, decreasing, or flat?)
• Are our competitors beating us in areas that we’ve had problems? (e.g., legal, consumer relations, bad press, management, etc.)

Does it matter?

• Are we doing well/poorly in areas that support our strategic goals? (e.g., Are the top three sales producers are key stores/regions?)
• Are our competitors beating us in key areas?
• Are changes due to a particular action we’ve taken recently?
• Can we afford to sustain this level of performance?
  

Meaning through pictures

James Nachtwey, a well known photo journalist had a story to tell. The story is about XDRTB or Extra Drug Resistant Tuberculosis. As a TED award winner, James made a wish to use photography to tell his story. Tonight, on October 3, 2008 his wish came true. His three minute movie will be shown in 50 countries.

Great leaders don't just wish. They turn their wishes into reality.

Great leaders know how to tell a story. Some use words, others use pictures. The key is to capture people's hearts and minds to rally them to action. I encourage everyone to view this video and support James and XDRTB.ORG.

See the video at: www.xdrtb.org

Leadership and Meaning

The desire to find and obtain meaning in one’s life is a primary human driver. This premise, famously discussed in Viktor Frankel’s Man’s Search for Meaning, has also been borne out in numerous employee engagement studies. “Meaningful work” or “Understanding how work contributes to the organization” is often among the key drivers of employee engagement. Despite our innate understanding of this and its subsequent validation through research, many leaders struggle to provide meaning.

Creating meaning isn’t just a great motivator for employees. Meaning is also the basis for decision making and action. Without meaning or purpose, data has little value.

It is for both of those reasons that I believe that creating meaning is one of the most important roles of a leader. In fact, I would argue that leaders who do not create meaning for those around them (whether higher or lower in the organization) are not adding unique value to the organization. In other words, if you are just a conduit through which information flows, then you are probably not needed.

What is meaning?

While Frankel never formally defines the word meaning, his intent comes out through the context and examples he provides. His definition of meaning is the purpose or reason for someone’s existence. I’d like to extend that definition slightly to move beyond people. Meaning is the purpose, implication, or conclusion of a set of past or future experiences, facts, or actions.

Meaning isn’t the experiences, facts, or actions. It is the synthesis of these things. This is where many leaders struggle. Many don’t rise above the experience, facts, or actions in their dialog and thought. Because of that, they do not find, nor can they communicate meaning. I see this most often when watching business leaders make presentations. Their slides are full of tables, graphs, and lists. A lot of time is spent on what those tables, graphs, and lists say. Little time is spent on what they mean.

I recently saw a slide that had a map of the US with six states shaded. The title of the slide was “Our competitor’s main growth is in six states”. That is a fact. It does not drive action or decisions. It just sits there. A better alternative would be a slide that talked about the implication of the competitor’s growth in those states. Are they states that the business cares about? Are they states where the business has traditionally been strong? Are they states where the business has had some organizational or operational issues? Any of those questions would have taken that simple fact and added meaning.

This was not an isolated example. I would estimate that 70% of the slides I see or of the content I hear in discussions are simply the exchanging of facts.

What gets in the way?

In talking with and observing leaders, I’ve found four obstacles to creating a culture that strives to achieve meaning: time, risk, understanding, and trust.

Time
Many leaders don’t believe that they have the time to think anymore. Many operate in what Stephen Covey called “Quadrant one” – those things that are urgent and important. I would argue that often the two get confused. Urgent becomes important whether it really is or not. In addition to a perceived lack of time to think, leaders are bombarded with information. There is just too much through which to sift. As a result, leaders’ time is spent grasping the next set of facts rather than thinking about them.

I believe that lack of time to think is a fallacy. Issues ultimately have to get thought through. The real challenge is deciding on whether to make time to think through them proactively or lose time thinking through them reactively once something has gone wrong (and they move into quadrant one). The best leaders that I’ve seen have learned to balance thinking and acting. They set aside time to reflect and ensure that they are doing the right things. Once they do so, they aggressively execute to get them done.

Risk and Understanding
Creating meaning involves taking a risk. It involves using your knowledge and experience. Therefore, it could be wrong. Many leaders don’t want to take the chance of being wrong, especially in front of others. Anyone can report facts or recall actions. Facts are safe. There is little risk in reporting a fact (other than the risk that others might not want to hear it). In organizations whose culture punishes those who have the wrong answer, facts become a safety net and asserting one’s understanding becomes a risk.

Understanding becomes an even bigger risk when leaders are uncertain of how well they "now their stuff”.

I’ve worked with many executives who admittedly don’t have the understanding of their business, their function, or their industry that they’d like. Often these individuals were promoted into their positions because of their ability to execute or to perform a role. Once they get to higher level positions, they realize that their old knowledge and skills are no longer sufficient.

As a result, they don’t always have the context or perspective to add insight to the facts and data that they are seeing. Worse yet, they have it but don't know it.

When this occurs, two things happen that diminish an organizational culture of creating meaning. First, the leader regresses to communicating and focusing on facts and data. This sets the model and expectation for others in the organization. Second, when someone does attempt to focus more at a level of meaning and insight, the leader will often drag the dialog back to his or her comfort level with a discussion of facts.

Noel Tichy talks about leaders having a “teachable point of view”. A teachable point of view essentially is the unique meaning that you create from the same facts and data that everyone sees. In other words, taking the time to learn the business and being willing to take the risk of adding one’s own perspective is what differentiates a leader.

Trust
Trust, or more specifically lack of trust, is the final factor that erodes a culture of meaning. Leaders who require their people to walk them through all of the individual facts simply do not trust them. That’s a strong statement. But, why else would a leader need to see the discrete facts? Do they not think that their people came to the right conclusions? Do they think that their people would have missed something? Do they know that they have been withholding important information that would have helped put some perspective on those facts? Whatever the reason, it comes down to trust.

I’m not suggesting that leaders ignore due diligence and not challenge their people. In fact, that is the leader’s role. That is not the trust issue. The trust issue occurs when the leader makes an individual walk through each step of his or her process so that the leader can see if he or she comes to the same conclusion.

I’ve seen situations where four different people go through the same information four different times as the presentation works its way up the hierarchy. It’s like running a relay race where the first person runs a ¼ mile and then he backtracks 1/8 of a mile to hand-off to the next person.

Instead leaders should have their people start with the conclusion and work backward (as needed). This puts the leader in the role of challenging and extending rather than auditing. At each successive review, the presentation and conclusions will further advanced rather than reviewed.

How to create a culture of meaning

1. Leave the facts behind. Ask yourself “What is the implication of this fact” or “Why do we care about this” and drive your presentation or dialog from that point. This doesn’t mean to ignore the facts. They still need to be the basis of your conclusions. Move them to the appendix or pre-reads and spend your time on discussions of meaning.
2. Encourage your people to move beyond facts. Don’t accept slides or reports that are only full of charts, tables, and data. Have your people provide executive summaries. Encourage them to synthesize all of the facts into a few key headlines.
3. Push information down into your organization. To create meaning individuals need context and perspective. Make sure that you are passing information about company strategy, organizational and departmental goals, competitors, the market, business performance, etc. to your people. The more they understand about the business, the better positioned they are to create meaning. Another benefit is that the more meaning that your people can create, the more meaning (and thus engagement) they will find in their work.
4. Read Viktor Frankel’s Man’s Search for Meaning.
5. Try these exercises to practice boiling facts down to their essence:

• Create a five line drawing of yourself. You can’t capture every detail. You’ll need to figure out your “essence”*
• Write a 50 word story. It must have 50 words exactly and must have a beginning, middle, and end.*
• Write a six word memoir** of your life. You only get six words to sum up your essence to date.

*From Daniel Pink’s A Whole New Mind

**From Larry Smith and Rachel Fershleiser’s Not Quite What I Was Planning: Six-Word Memoirs by Writers Famous and Obscure

Is the world ready to be small again?

In the past couple of years I’ve begun to notice a small, subtle change in the way some people are talking. Small is good. In reality it’s not that new. In college I remember reading a book by E.F. Schumacher called “Small is beautiful, economics as if people mattered”. As the title suggests Schumacher builds arguments for smaller, more decentralized forms of business, government, and technology.

What is striking (to me) is that this conversation is emerging while we are in the midst of unprecedented global expansion. Perhaps the conversation is coming because of unprecedented global expansion.

The green movement is leading the small is beautiful charge. They are advising us to buy local. Small farms create less damage to the environment than do large farms. Buying from someone close to you requires less gas emissions for transporting the product. They are following one of Schumacher’s main points – small entities, no matter how many, can do far less damage economically and to the environment than large entities.

The financial crisis in the US seems to be a reflection of Schumacher’s warnings. Part of the crisis seems to stem from huge amounts of capital being in the hands of a few companies. I wonder if we would have had the sub-prime crisis if we had more local and regional banks with smaller portfolios to manage. Would they have taken the same risks? Could they have even capitalized such risks in the first place?

In a recent NPR interview, key economists theorized that the Internet's commoditization of stock trading drove investment houses to find new alternatives for generating revenues. The result was the complex auction and derivative-based products which have also been cited as a driver of the financial downturn.

So many big organizations lately seem to be buckling under their own weight. Airlines, auto manufacturers, and of course the financial industry are all examples. Of course, there are also companies that are continuing to grow and prosper. Perhaps they are getting lucky or perhaps they have found the niche or model for which "large is beautiful". It will be interesting to see how these larger companies fare as regulation, pressure on worker and environmental protection, and consumer's need to feel connected and valued increase.

Even our presidential candidates are getting into the act. Barak Obama says that we need to provide incentives for companies that keep jobs in America. John McCain emphasizes the need to protect American jobs. The policies of our next president might include economic incentives for "shrinking" at least in terms of where work is done.

I don’t think we’ll ever completely turn back from globalization nor do I think we should. However, I am beginning to sense that the pendulum might be starting to move a bit more toward the center.

Perhaps small is beautiful after all. As a leader, are you ready to manage that? Take a look at Schumacher’s book. The book is over twenty years old. Yet, when you look at his concerns and recommendations you might think he just wrote it.

Want to engage 'em, ask a question

I was once coaching a nurse in a hospital. She commented that her unit was very inhospitable. The residents and interns would walk right by without even making eye contact or saying hello. She had tried greeting them, smiling, and nearly walking right into them. Despite these efforts, she still received no acknowledgment from the doctors. I suggested that she try an experiment. Instead of greeting them with a statement (e.g., Hello), I told her to "greet" them with a question (e.g., "How is it going?", "What's up?", "How are you"?). She called two days later. Nearly every doctor and intern had responded to her. She was elated.

Humans seem to have an innate need to respond to questions. If you want to engage someone, just ask them a question...you'll have them hooked in no time.

Don't get fooled just because it's in writing

I had a reminder of an old lesson today. While it is not a major revelation about leadership, it bears repeating since it seems to crop up over and over again. The lesson: verify the results of an analysis against common sense. If it doesn’t jibe, first check the numbers then check your “sense”.

Today, I was reviewing a study on high and low performers. According to the study, low performers reported that their people had higher alignment with their vision than did high performers. The study then provided three paragraphs of speculation on why that might be the case.

I was lucky enough to have access to the raw data. After a few quick calculations, I got the opposite result – the one that I would have expected. High performers report higher alignment with their vision.

After verifying the data and my analysis, I was pretty certain that I had not made an error. I even checked it against an interim analysis I ran which corroborated my finding. I went back and compared my findings for each question with the findings in the report I received. There were seven other areas of discrepancy. Then it hit me. All seven questions were worded in the negative.

It turned out that the analysts had recoded the responses for those seven questions. However, they forgot to reverse the language of the question. As a result, their finding was exactly opposite of what was expected (and what was more likely).

I see this happen a lot. Managers present numbers from reports that defy common sense (e.g., profits that exceed sales, per capita costs for something that when multiplied out are higher than the companies total expenses, etc.). When I ask people how that could happen, I typically get the same response. They didn’t apply their knowledge of the business to the analysis. They took the number at face value and simply passed it along.

As a leader, your role is to more than simply passing information along.

Are you a synthesizer or an assembler?

Many leaders assemble information. Good leaders synthesize it. There is an important difference. Assembly is about packaging. Synthesis is about extracting something new.

Here is an example. Joe wants to propose a new supply chain management process for his organization. He has his team run analyses on inventory control, procurement costs, manufacturing times, and warehouse efficiency. He then takes two to three key summary slides from each team and puts them into a presentation. Joe has assembled.

Jane, on the other hand builds a story about the competitive positioning of the company. Her slides talk about the company’s strategy and her assessment of how well it is being met given the performance data that Joe’s team provided. Jane has synthesized. She’s added new meaning and new value to the information.

Both Joe and Jane have added value to the organization. I’d argue that Jane’s contribution to the organization was greater. Jane added her knowledge to improve upon the information creating something new from it. Joe repackaged the information but didn’t provide new insight. By virtue of his position in the organization, he should have a broader perspective and more information than the people who work for him. If he’s not adding that, then he really isn’t needed in the process. One of his people could just have easily assembled the key slides into a presentation.

Good leaders synthesize information to create meaning. They use their knowledge of the business to transform facts into a story. This is where a leader ads value.

BTY: The universal metric

A lot of time and effort go into developing goals and metrics. That’s a good thing. Metrics should be taken seriously. They should help leaders know when to take action.

Yet, some metrics are hard to apply on a day-to-day basis. That’s why in addition to my formal metrics, I always include one informal one: BTY.

BTY stands for Better Than Yesterday. It’s a simple yet powerful metric. Assessing my daily actions against BTY ensures that I am making a positive contribution.

Another benefit is that BTY is also scalable. This one metric can ensure that you are thinking through all of your key responsiblities as a leader:

• Is each person on my team better than yesterday – are their skills increasing, are they able to make a greater contribution, are they more engaged, motivated, etc?
• Is my team better than yesterday – is there better communication and collaboration, do we have smooth hand-offs and interfaces, are we all on the same page?
• Is my department/function better than yesterday – Are we improving our results, finding better ways to execute our processes?
• Are the people across the overall organization better than yesterday – Have I contributed to other people’s success, is my team making other teams successful, am I sharing relevant information?
• Are our customers better than yesterday – Have I made it easier for them to do business with us, have we found new ways to meet their needs?
• Is my organization better than yesterday – Financially, operationally, employee engagement, brand position, customer satisfaction, etc.?

There are a lot of ways to formally measure BTY. Your individual goals and performance targets are probably already aligned. However, keep it simple. Review your actions each day to see how they impacted BTY. If you find that on most days you have a positive BTY, chances are that your formal metrics will take care of themselves.

Leadership and Wall Climbing

I tried wall climbing for the first time today. It’s a great workout. Going up and down the walls also provided me with some great lessons that can be applied to leadership.

• It’s good to have a plan. It’s hard to “wing” it when you are travelling up a wall. If you don’t know your next several moves, you are likely to find yourself stuck with no where to go but down.
• Sometimes the short-term win knocks you out of position for long term success. The key in wall climbing seems to be to find the right sequence of hand and foot holds. I found that sometimes reaching for the next nearest hold, while an easier next step, actually took me out of position to continue my ascent. Short term wins require energy and momentum. Make sure that they are propelling you forward.
• Stretching creates more momentum than settling. Reaching for the highest handhold allowed me to propel off the foothold. I almost felt as if I were bouncing up the wall. However, when I used the closer hand or foot holds I moved in a very choppy, discrete fashion. I’d often have to stop after each one.
• Always look toward the future. At one point I was so focused on the hand holds that were immediately ahead of me that I didn’t notice the shelf (rock) sticking out above me (until I hit it with my head).
• There is no better motivator than a summit. Despite some tough climbs, I was amazed at how much energy I was able to muster as I approached the top. Knowing I was close to the goal often gave me the strength I needed when my muscles began to give out.

Who's watching the big picture?

Is it possible for your people to hit their goals and yet still decrease your organization’s performance? You might be surprised at the answer. I’ve seen many organizations where individuals get so focused on executing their part of a process that they lose the forest for the trees. A recent experience with my insurance company demonstrates this.

I put in an accident claim to my insurance company. The damages to my car were around $3000. The blue book value of my car was $2800 (it’s an old car). Much to my surprise, the adjuster didn’t total the car. After taking my deductible and disqualifying several of the needed repairs, he determined that the insurance company was only liable for $1200. While I don’t know his exact goals, I would assume that one of them is minimizing claim payouts.

So what’s the problem? He did his job. He is keeping costs down. The problem was that his decisions and actions appeared to only try to optimize one part of the business. They didn’t take into the impact on the customer and his long term satisfaction and loyalty. But, that’s a softer measure anyway. Customers will always want as much as they can get from the insurance company. The adjuster can’t entirely be driven by trying to make them “happy”. However, from a cost perspective, it didn’t seem to take into account the total cost of the claim either. It only focused on the repair.

In addition to the repair, the policy also reimbursed for a car rental. The damage was extensive enough to put the car out of commission for six weeks. The company wound up paying about $1200 in rental fees alone.

During that six week period, two other things happened. First, people would ask me about the status of my car. Because some of the delay was due to interfaces between the insurance company and dealer, this became a six week infomercial on how bad my insurance company was. In fact, every conversation ended with the person asking, “What is the name of your insurance company?”

More importantly, as the repair dragged on, the pressure for the customer service department to provide some accommodations increased. In the end, they agreed to an additional $500 in repair reimbursements. Then, to try to smooth things over, they also reimbursed for the collision insurance on the rental which they normally don’t cover. That added another $200 to the claim. That customer service person was mostly likely being driven by her goals which involved trying to pacify the customer.

So, what did the insurance company get by having everyone “do their job”?

• They paid out $3100 for a claim that probably should have cost them $2300
• They generated six weeks of negative publicity
• They frustrated (and ultimately will lose) a customer who had been with them for 26 years.

The company lost big even though, on a discrete level, everyone appeared to execute their part of the process correctly.

As a leader your responsibility is to ensure that you are not optimizing a part of your business at the expense of the whole. Here are a few tips:

1. Create shared goals that use aggregated measures (e.g. total cost of claim) between your people and people up and down the value chain.
2. Hold regular reviews of cases/interactions/decisions and invite people from multiple departments. Let each department explain how decisions in one area impact the others.
3. Educate your team on the process and financial drivers of your organization’s performance. Ensure that they understand how their decisions impact overall organizational performance.

The three “people” that every coach should bring to a meeting

Coaching others is one of your primarily jobs as a leader. Good leaders make the people around them more successful.

There are three filters through which a coach should view his or her interactions with others: Confidant, Contextualizer, and Curmudgeon.

The Confidant
The confidant uses personal information to help an individual be more successful. The confidant knows about the person’s personal and professional goals, strengths and weaknesses, values, and motivators. The confidant ensures that any feedback provided or action being recommended is aligned with the individual’s aspirations and needs.

The Contextualizer
The contextualizer uses information about the organization to help the individual navigate and succeed. The contextualizer knows who key decision makers are and how to get the individual in front of those people (or in front of their influencers). The contextualizer also understands the priorities and needs of the organization and uses this information to help the individual shape his or her goals or actions accordingly.

The Curmudgeon
The curmudgeon pushes the individual to think about things in new and different ways. The curmudgeon is a skeptic always asking, “Why is this important?”, “Is that really be best way to accomplish your goals?”, “Shouldn’t you be spending your time on something else?” etc. The curmudgeon asks the tough questions to make sure the individual has thought through his or her goals, plans, and actions.

All three of these are necessary to provide sound advice and assistance to your people. Good leaders know when to call in each one and how to keep them in balance.

The Power of Goals

My nine year old daughter and I spent a lot of time swimming over vacation. One day we went into the deep end of the pool. She said that she wanted to try to touch the bottom with her hand.

She is a pretty good swimmer but is still learning about how much breath she has and how to best navigate deep water. She’s also very buoyant.

We tried for about 30 minutes but she couldn’t get down to the bottom. She’d go down about five feet and then turn around and swim back to the surface. We even tried having her hold on to me so she could get down faster but even that didn’t work.

Then she had an idea. She told me to throw a diving ring into the deep end and she’d see if she could get it. Sure enough on the very first try she swam straight to the bottom and retrieved the ring.

Just having that simple goal made all the difference in her “ability” to get to the bottom. That’s the power that goals can have on performance. Setting a goal can improve focus, motivation, and action.

Are you a people developer?

Are you a people developer? Try this quick test. Take out a piece of paper and divide it into two columns. Label the left column “People I’d go to” and the right column “People who I would definitely avoid”. Now, consider the following scenario:

Your boss has just assigned you a critical project. This project has high visibility and can provide significant impact to the organization. You and your team will be under tight time pressure and scrutiny. You will have to interact with high-level leaders from across the organization. These people impressions of your project, and more importantly, your leadership ability will be based on the interactions and actions of your team.

Identify 3-5 people from your team (direct or indirect reports) that you would use for this project. List their names on the left side of the worksheet. Then, consider 3-5 people from your team that you WOULD NOT use under any circumstances. List these people on the right side of the worksheet.

Look at your list. Do you think it would be substantially different if you redid this activity in a year or two? How about if you did it one or two years ago?

Many of the leaders who have gone through this activity in my workshops find that the list really doesn’t change much from year to year. Their top people continue to be their best performers, and their bottom people, much to their regret, continue to plod along. That’s a problem.

Both of the columns on this list should be changing on a regular basis. The people in the right column should either be moving up or counseled out of the organization. Most people know that although it often doesn’t happen. Where many get surprised is when I offer the exact same advice for those on the left side.

Your top performers also should be moving up or out. Ideally they are moving up into new roles of greater responsibility. Often that might mean that they are no longer working for you but have found a new role elsewhere in the organization. If there isn’t a place for them to move in your organization, it’s time for them to leave. No organization should be holding its people back.

So why would you want to “lose” your top people? It’s simple. By creating an organization where people continue to excel and move ahead, you will attract strong, motivated performers. They know that giving their all for you will position them for success. While you might be cycling top performers out, there will generally be other strong performers ready to step in to their role. And, those people’s role will be filled by a pipeline of people wanting to join your part of the organization.

All living things have to move. If your organization is stagnant it will die. Your low performers will continue to pull down your performance and your high performers will eventually settle in to complacency realizing that there is no where to go and no reward for their effort.

GPS, Data, and Leadership

I just bought a Garmin Nuvi 350 GPS. Actually, it’s a GPS Navigator. This is an important difference.

A GPS collects data (from satellites), compiles it, summarizes it, and produces a fact - your current location. It leaves it to you to figure out what to do with that information.

A navigator combines those facts with other facts to provide direction (literally). A navigator doesn’t just tell you where you are, it tells you how to get where you are going. When you get too far off course, it recalculates your route. It either gets you back on track or finds a new route to reach your destination. Higher end navigators even take into account traffic conditions or construction. In other words, they use your goals, the current context, and additional "understanding" (e.g., maps, points of interest, etc.) to add meaning to the data

Good leaders do the same thing. They don’t just report facts. They apply context to those facts to create meaning and provide direction.

How are you using data? Are you a simple GPS or you a navigator? Look at your last presentation. If you just reported sales, satisfaction, costs you are a GPS. If you added context and meaning to those numbers to provide direction, you are a navigator.

The goal of alignment is not just to be aligned

Alignment is another big business buzzword these days. Departments need to align their goals with the organization’s goals. Individuals need to align their personal goals with departmental goals (and therefore organizational goals). With all of this alignment, I wonder whether organizations are seeing a difference. The answer depends on whether you look at alignment as a means or an end.

Being aligned doesn’t guarantee success. Alignment is only the first step. The second and more important step is determining whether you are having impact on the broader, organizational goal.

Too often, managers align their goals with the organization’s goals and then forget about the broader goal. This is especially challenging for internal support organizations as they often do not have direct P & L responsibility at the business level.

The purpose for aligning is to ensure that your actions have impact on the organization. By maintaining a focus on the broader goal, you will know whether to proceed with your current goals or revise them. Remember, your organization’s success isn’t based on how well your goals align. It is dependent on whether those goals achieve results.

Goals/outcomes, initiatives, and KPIs

Goals, outcomes, KPIs and initiatives are all important parts of leading an organization. Good leaders use all of hem to set vision, communicate, and track progress. Some leaders use the three interchangeably. The key to their effectiveness is using each one in the right way.

Goals/outcomes
Goals and outcomes are statements about positive changes to the business or organization. A goal might be to increase revenue, decrease costs, or increase customer satisfaction. Each of these should be quantified. The goal is what everyone in the organization should be trying to achieve. Goals reflect results rather than activity. Creating a preferred vendor process is an activity. Reducing procurement costs is a result and therefore an outcome.

Initiatives
Initiatives are specific actions or programs that support goals. They are not the goals themselves.
In the earlier example, creating a preferred vendor program is an initiative that supports the goal of lowering procurement costs.

I often see leaders combining the two into a single “goal” statement (e.g., develop a preferred vendor system to reduce procurement costs). The argument for doing this is that combining them keeps the focus on the outcome.

I tend to disagree. The goal and initiative should be kept separate for three reasons:

1. The initiative is always more visible and immediate. The “measure” will almost always wind up being the completion of the initiative.
2. The initiative will have to be executed to completion, even if it is not working or no longer needed. For example, suppose the “goal” was stated as “Conduct ten focus groups in order to improve customer satisfaction.” If, after five focus groups, there were clear, consistent requirements there would be no need to conduct the other five. Yet, to meet the goal, the remaining five focus groups would have to be conducted even though they might not add any more value to the true outcomes. Alternatively, suppose the focus groups yielded no new information to drive changes. Completing all of them would still be necessary to allow the “goal” to be met even though there was no real change to the organization.
3. Combining the goal and initiative limits options. If the preferred vendor program is written into the goal statement, that’s the only available option to meet the goal. Alternative such as outsourcing procurement, automating or some combination are no longer options. Having the initiative separated allows for resequencing, reprioritizing, adding, or deleting in order to make progress toward the true outcome.

KPIs

KPIs provide diagnostic information about the performance of key processes. KPIs might include # of calls handled by a call center per day, evaluation scores on training programs, number of sales calls made, etc.
KPIs should be used to monitor processes and take action but they are generally not final outcomes. The organizational goals should be the result that is expected when the organization is meeting its KPIs.

Putting it all together

Here is a simple example that combines all three.

Goal: Lose 15 pounds (note, this is a result, an actual change)

Initiatives:

Low calorie diet
Agressive exerciseprogram

KPIS:

Low calorie diet: 1500 calories per day
Low calorie diet: < 30 grams of fat per day
Aggressive exercise: Work out 3 days per week
Aggressive exercise: Average 1800 calories burned per workout

In this example, success (and the big piece of chocolate cake) doesn’t come until all fifteen pounds are lost.
The KPIs are helpful in that they can help a person diagnose why his or her weight loss program isn’t working. Even if they are being met, they are still not a reason to celebrate. If the KPIs are being met but the outcome is not being met it could mean that the KPIs were set wrong. It could mean that the wrong initiatives were chosen (perhaps there is a medical condition preventing the person from losing weight). That is the value of using KPIs.

Goals, initiatives, and KPIs are all important to running a good business. They key is to keep them separate and use them in concert with one another.

Questions leaders should ask

Asking questions as a leadership tool is becoming a hot topic. The power of using questions is not new. It is the basis of the Socratic method of teaching. It became popularized with Peter Senge’s, The Fifth Discipline, as a cornerstone to building a learning organization. A leader's value is not simply asking any question; it’s knowing when to ask that question and how to frame it.

There are three types of questions: fact-based, relationship-based, and meaning-based. Moving from fact-based questions to questions of meaning can significantly improve the level of communication, understanding, and decision making in an organization.

Take a simple example: Joe is considering buying a new car.

Fact-based question: How much have they quoted you?

Relationship-based question: How does their price compare to Edmund’s “True Market Value” price?

Meaning-based question: Given the state of the economy, your current level of job security, and the price of gas, is now a good time for you to be buying a car?

Meaning-based (and relationship-based to a small extent) questions drive a very different type of conversation. They test assumptions, explore possibilities, and help people tie immediate actions to future results. Meaning-based questions help the organization learn and grow and often lead to better, well-thought out answers.

As a leader, the types of questions you ask will dictate how your people think through problems.

Questions leaders should not ask
While question asking is useful in general, I have found that sometimes leaders use questions as weapons. That is, they use questions that don’t seek to create understanding but rather serve to point out deficiencies in ideas. For example, suppose a manager proposes a new computer system for helping to track customer complaints. Weapons-based questions might be:

• Who is going to pay for this?


• Do you know how long it will take to implement this?


• Who is complaining about the current system?

Note that all of these are fact-based questions (it’s hard to use relationship or meaning questions as weapons). All of these are important items for discussion. The way they are being asked, however, doesn’t allow for discussion. It typically cuts off the discussion.

All three types of questions have a place in your conversations. Asking the right questions can open up dialog, improve communication, and most importantly improve the quality of your decisions.

Tips for asking the right types of questions

• Before stating your question, ask yourself, “Why am I asking this question.” If the answer is that you are trying to make a point, reframe the question. Your questions should help you understand someone else’s point, not make yours.


• When possible, have fact-based questions answered through reports, emails, or pre-reads prior to a meeting. That will enable you to focus on meaning-based questions in the meeting.
  Don’t ask a question for which you already know the answer (unless you are a trial lawyer in court). Rephrase the question so as to solicit other people’s input on the answer.


• When asking a fact or relationship-based question, think about what you plan to do with the answer. Then, reframe your question around that.


• Use words like “relate”, “tie”, “compare”, “impact”, “align”, “goals”, “mean/meaning”, “matter”, “outcomes”, and “priorities” in your questions.

It might be significant but that doesn't mean it matters

While once reserved for scientists and researchers, the term “statistical significance” has become part of the business lexicon. Unfortunately, among casual users of statistics, its meaning seems to be getting confused. Statistical significance doesn’t tell you if a change matters or not. It only tells you if the change is real.

I recently reviewed customer satisfaction data with a manager. His satisfaction scores rose 8% from the prior period. The manager was pleased. I commented that the change wasn’t really that big and probably didn’t represent a meaningful change in customer experience. His response was, “But it’s statistically significant.”

Part of the problem is with the word “significant”. The common meaning of significant is important or full of impact. A significant business deal probably has a high dollar value associated with it. A significant business setback is quite serious.

In statistical terms, significance also means important or noteworthy but for a different reason. It’s not a measure of impact. It’s a measure of certainty. It tells you the probability of whether what you are seeing occurred from random chance or whether it is indicative of a true change.

In the case of the satisfaction increase what it is saying is that there is a lot of certainly that your satisfaction increased by a very small amount.

Knowing that the customer satisfaction increase was significant can be an indication that your interventions are working. (Although to be absolutely sure you’d really need to measure those customers who experienced the intervention and those who didn’t…otherwise the increase could just be because of some other factor such as changes in pricing or competitor behavior.)

As a leader the next step is to take a step back and determine whether that significant change matters. Having customer satisfaction change from 60% being satisfied to 65%* being satisfied, even if significant still isn’t very good. One out of every three customers is still not happy. If you were still in school, you’d still be getting a D. You can have a statistically significant finding for a .0001% change or a 100% change. The significance doesn’t reflect the size or impact.

Statistically significant is not the same as important. Importance is a call that you as a leader must make. Don’t get fooled by statistically significant findings that tell you with high certainty that not much has changed.
-------------------------
* The metric was also an issue. 60% to 65% is an 8% increase. It is misleading because it doesn’t mean that 8% of your customer base is happier. The use of relative metrics is another practice that can misrepresent the actual situation.

Communication isn't the issue. . .understanding people's needs is

District 303 in St. Charles Illinois needs to hire a communication specialist. This is according to results of a communication audit reported in the May 29 Daily Herald Newspaper.

I'm not surprised. Communication issues seem to come up in nearly every organization or leadership assessment I perform. I can't think of an organization where I've worked (as an employee or volunteer) where leadership determined that their communication didn't need to be improved.

The general consensus often is that people need more communication and information. In some cases that is the problem. There are certainly organizations out there in which information does not readily flow.

Yet, in general, I don't think the issue really is in the amount of communication that people receive. In the book, The Experience Economy, Joe Pines and James Gilmore make an interesting point about consumer choice; "Customers don't want choice, they want exactly what they want." In other words, people don't care if you have twenty toasters to choose from, they'd be happy with just one if it happened to be what they are looking for. I think the same is true for communication, people aren't looking for more, they just want their specific questions answered.

Unfortunately, the response to "communication issues" is often to start sending more communication rather than to better match people's information needs with communication. It is certainly easier to send a small number of large messages out. It is "scalable" which is a popular business term. Yet, scalability doesn't always ensure effectiveness. Often to make something scalable, you have to boil it down to its least common denominator.

An alternative to solving the communication problem is to stop thinking about communication. Instead, pay more attention to what's on people's minds. This is clearly not a scalable approach when looked at from a communication standpoint. However, it is very scalable when looked at from a leadership standpoint.

Good leaders should take individual responsibility to understand the needs of their customers, employees, business partners, and anyone else who is involved with the organization. Teaching leaders to be better listeners and questioners will increase their ability to deliver the specific information that people need. It might take a bit more time than blasting a generic memo from the corporate office or from the President of the organization but it will improve "communication". It will also improve relationships.

People are bombarded with information and messages. They don't want more. They actually want less - they want to know what they need to know.

Tips for improving communication

Talk with people - Don't use polls or the opinions of others to determine what people need. Talk with them directly.

Listen - Forget about what you want to say and focus on what others want to hear.

Use user-centric communication assessment and planning tools - These tools focus on answering questions such as "what do my users already know", "what do they agree with", "what do they disagree with", "what is confusing", "what else do they need to know", etc.

Segment based on context and information needs rather than demographics - People within the same demographic group can have vastly different information needs. Some people are more familiar with what you are doing, some are supportive, some are rebelling. Base your messages on what they need rather than what category they fit within.

Make understanding and communicating everybody's job - Don't make it a top down activity. Everybody has a role in helping to
improve communication within an organization.

Key questions to support career management

Leadership isn't always about having all of the answers. Sometimes it's about knowing the right questions. The following questions will help you work with your people to manage and improve their careers, and ultimately, their contribution to your organization.

• What is your career goal?
• What does “success” mean to you? (e.g., money, recognition, balance, position/title)
• What do you want to be known for?
• Are you contributing and growing?
• Are you in the right place?
• Position/role
• Organization/department
• Type of work
• Does your job align with the rest of your personal values?
• What is the next step?
• Do you need more experience? Do you need different types of
  experiences?
• Do you need more responsibility?
• What type of feedback do you need and who is in the best
  position to provide it?
• What types of formal or informal support do you
  need (coaching, training, books, etc.)
  

Drop and give me twenty (reasons why this might not work)

In an earlier post, “Who is advocating for the right thing.” I argued the importance of stopping and thinking. One example I used was the Iraq War:

"There seems to be general agreement that more planning prior to the Iraq war might have provided better results. How different do you think those discussions looked compared with those in your business? 'Look we can plan forever but we need to take action. We’ll figure out the details as we go.' We’re still figuring them out."

It turns out, according to an article in the May 26, 2008 issue of US News and World Report that the military has been one step ahead of me for the past two years.

The article, “To Battle Groupthink, the Army Trains a Skeptics Corps” talks about an Army program called “Red Team”. Red Teamers are trained to be skeptics and challenge the status quo. According to Greg Gontenot, the program director, “This is having someone inside that says, ‘Wait a minute, not so fast’”.

The Army gets it. There are few organizations that employ a more hierarchical model or have a necessity for action than the Army. Yet, the Army understands that dissension, discussion, and challenging the status quo, when done properly, can save lives and ensure victory.

Forget the door; Try an open-mind policy instead

Many leaders pride themselves on having an open door policy. Yet somehow employees still are reluctant to stop in. Leaders become puzzled when their open door policies don’t improve communication or employee engagement. To accomplish those goals, an open door is not enough – leaders need to adopt open mind policies.

An open mind policy is one that welcomes new and different ideas, even those that might contradict those of the leader. There is nothing more frustrating than a leader who makes him or herself accessible physically but is not willing to listen to what his or her people have to say.

This is true at the organizational level as well. While many organizations have diversity programs, most fall short of true diversity. They encourage learning about other cultures and holidays. They attempt to balance representation of various groups in key roles and leadership positions. However, without an open-mind policy to complement the diversity policy, orgnaizations will not acheive the greatest benefit. The value of diversity is the individual experience, cultural experiences, and the other deeply embedded traits that come from who we are. When those things get left at the door, companies wind up with groups of people who look quite different but think the same. The value of diversity is also then left at the door.

It’s time to start embracing true diversity – diversity of thought, perspective, and experience. Encourage your people to worry less about the state of their doors and more about the openness of their minds.

Five unconvential books on leadership

There are a lot of great leadership books. Here are some that might not make the mainstream lists but that have critical messages for leaders. If you are looking to think about leadership from a slightly different perspective, these might be for you:


Orbiting the Giant Hairball: A Corporate Fool's Guide to Surviving with Grace by Gordon MacKenzie - We all inevitably contribute to the corporate hairball. Gordon MacKenzie provides a great perspective on how we get there, and what we can do to avoid it.


Skunk Works: A Personal Memoir of My Years of Lockheed by Ben R. Rich and Leo Janos - This is one of my favorite leadership books primarily because it was not written as a leadership book. It is the story of the Lockheed Skunkworks and all of the incredible aircraft that they created. Everything they did defied conventional wisdom or even logic! At the end of the day, their innovation and success was a result of great leadership. If you read carefully you'll understand the true meaning of vision, empowerment, trust, and integrity.


The CEO and the Monk: One Company's Journey to Profit and Purpose by Robert B. Catell, Kenny Moore, and Glenn Rifkin - This book breaks one of the biggest management myths I've encountered which is that taking care of your business and taking care of people (your employees or your customer) are mutually exclusive. Leaders often feel that they have to chose one or the other. It's the story of Brooklyn Union (now Keyspan) Gas Company and how doing the right things, taking care of customers, and taking care of employees led to business success. Not only do you not have to trade them off, one can actually drive the other.


The Art of Possibility: Transforming Professional and Personal Life by Rosamund Stone Zander and Benjamin Zander - The Zander's will get you looking at people differently. They come from an attitude of abundance. Treat people like they warrant an "A" and they will perform as if they do. It's a great message.


A Whole New Mind: Why Right-Brainers Will Rule the Future by Daniel H. Pink - Many leaders are growing and nurturing people whose skills will soon be displaced. Pink provides a clear and simple explanation of the real skills needed to thrive in a new age.

Iteration needs thought too

It seems that the war on thinking has a new weapon: iteration. People drive forward half-baked ideas and plans under the guise of taking an “iterative” approach.

I’m all for iteration. I’ve been able to implement better solutions faster by taking an iterative approach. Iteration allows you to get feedback sooner, manage resources better, and deliver value earlier.

Somehow though, iteration has been co-opted and turned into an excuse to not plan or think. Good iteration still requires thinking and planning. I’d argue that it requires even more. For iteration to work you need to have carefully thought out:

1. What you are ultimately trying to accomplish
2. How each iteration contributes to that overall goal
3. What feedback or information you need to determine whether to change or move forward

Without those questions answered, iteration become little more than random action. Iteration is not just “putting something out there” and seeing if it works. That’s a part, but that “something” should be understood and intentional. I think that sometimes people confuse iteration with constant activity. Iteration should move you close to a goal. If not, then you aren’t iterating.

Some people argue that too much thinking and planning defeats the purpose of taking an iterative approach. They’ll tell you that iteration is about speed. That’s true and speed and thinking are not incompatible. Answering the three questions above doesn’t add that much time to the process. In reality, at some point you’ll have to answer those questions. The choice is whether you want to answer them proactively to drive your action or reactively once you’ve committed time and resources.
Iteration should not be a reactive activity. It should be a well orchestrated plan of making on-going yet incremental progress toward a goal

Poodle Grooming

What do you think of this vision statement?

The vision for HR is to partner with the business to ensure that we are
supporting the company’s strategic needs in the most cost effective way while
driving a high return from the investment that we make in our people.

Have you seen a vision statement like that recently? I bet you have. Try this – replace “HR” with “IT” and replace “our people” with “technology”. It still works. Now, try these changes:

HR to Facilities,
People to buildings and physical plant

HR to Quality,
People to Quality processes

It still works. I call this “poodle grooming”. Poodle grooming is creating statements that are so general they apply to just about anything. This doesn’t only happen with vision statements. I discovered the idea of poodle grooming when reviewing the design of a training workshop. The workshop was on developing balanced scorecards. Here was the outline:

1. Introduction
2. History of balanced scorecards
3. Pros and cons of balanced scorecards
4. Steps for creating a balanced scorecard
5. Considerations when creating a balanced scorecard
6. Workshop close

On the surface, this looks like a good outline. In reality, it doesn’t tell you anything useful. If you replace “balanced scorecard” with “poodle grooming” it still makes sense (for the most part). This is the generic outline for any workshop. It doesn’t help you understand if the right content is being covered or if it is being covered in the right way. You can find examples of poodle grooming in vision statements, business strategy, training designs, and continuous improvement recommendations.

Poodle groomed statements look good but provide little value. They are the result of sloppy or rushed thinking. Because the statements are so generic, they must be broken down before they are used. This creates two problems: 1) different people break the statements down differently. Instead of moving forward with a common direction and purpose, your people will be moving in different, possibly contradictory directions. 2) It ‘s less efficient. Often the poodle groomed statements will be developed relatively quickly and efficiently. This creates a false sense of accomplishment and progress. That sense of accomplishment quickly becomes eroded. Teams iterate through different interpretations of the statement until finally stumbling on the real intention and its specific details.

Four tips for avoiding poodle grooming

Be specific – Answer the traditional “journalist” questions of who, what, where, why, when, and how.

Test your statements – Replace the main subject with a different department or function. If it still makes reasonable sense, it’s too generic.

Look for unique words or phrases - Try to identify words or phrases that specifically reference your unique situation.

Avoid buzz words – By definition, everyone is using them so they are probably not unique to your organization

The beginner's mind

I was recently helping my daughter with her Math homework. She had the following problem. There are 320 rods in a mile.

How much of a mile is one rod?
How much of a mile are forty rods?
How much of a mile are sixty rods?

Can you solve it? Wait, there's the catch - you can't use division or a calculator.

I puzzled over this for quite a while. How can I help her answer the question if she isn't allowed to use the basic tools required to answer it? I tried thinking of all sorts of convoluted way to get her to do division without doing division. My ideas became increasingly complex while her chances of understanding became increasingly more remote.

Then, out of the blue, the answer finally hit me. I couldn't believe I didn't see it sooner.

How much of a mile is one rod? 1/320
How much of a mile is forty rods? 40/320
How much of a mile is sixty rods? 60/320

There was no need to go any further. No need to use division. No need for a calculator. Those answers are all exactly right and are consistent with what one might expect of a third grader.

So simple, so obvious. Well, so obvious to a beginner whose mind was not clouded with a lot of more complex ways of thinking about the problem.

As leaders and problem solvers, sometimes we have to let go of the complexity and everything we know, in order to see things more clearly. Einstein called this the beginner's mind. Looking at things from a simple and basic perspective. It's what enabled him to develop the theory of relativity. While the people around him were trying to justify the presesence of certain forces, Einstein said, "What if they just aren't there?" The beginner's mind - one that doesn't see and try to account for what is not there.

Special Sneak Preview: Five Excel Functions That Every Manager Should Know

Leadership and data. Two of my passions. Of course, my bigger passion is helping leaders be more effective at using data. One of the biggest obstacles that many leaders face is not understanding the tools that are available to them. I've seen a lot of people waste a lot of time manually performing tasks that Excel can do automatically in a fraction of the time. The result, managers and leaders spend more time manipulating data than they do in thinking about what it means.

I've put together an overview of five Excel features and functions that I believe every manager and leader should know. These are all productivity functions. None of them help answer a specific question or perform a specific type of analysis. Their purpose is to make leaders more efficient at any analysis they are conducting.

The functions and features listed in this document can literally turn a two hour task into a ten second operation.

My real goal is to start focusing on helping leaders learn to think differently about data and interpreting information. However, I realize that they can't begin that journey if they are spending all of their time cutting and pasting, sorting, and highlighting things manually.

At some point I hope to use this guide as an entry point for my blog. I'll offer it as a free report to anyone who signs up for a feed. However, right now I'd like feedback. I'd like to know if these features and functions are things you already know about, if the explanations are clear, or if something is missing.

So, I'm enlisting my small but loyal band of readers to help me help leaders become more efficient in using information.

I've attached a link to the article. Please provide your feedback. I've love to hear from you.

http://www.bradkolar.com/articles/Five%20excel%20functions%20that%20every%20business%20person%20should%20know.pdf


Thanks!

Who is advocating for doing the right thing?

Progress. Moving forward. Execution. That’s what business is about. Disagree with someone’s idea or recommendation? Just argue that the idea might slow down progress. It will be killed before the person can respond. In many organizations most people are afraid to be the one to stop the train.

Progress and execution are good as long as they are accomplishing something. Progress and activity are two different things. So are and activity and results. Often in our haste to proceed, we don’t do what is necessary to ensure success.

We can plan forever. We need to get something done.
I attended a planning meeting for a major project. The meeting was divided into two hours to determine requirements and six hours for driving out the action plan. After two hours we didn’t have the requirements fully understood. One person in the meeting recommended that we spend another two or three hours on understanding the requirements. The leader’s response was, “We can plan this forever; at some point we need to act.” This isn’t uncommon. Many leaders fear that introducing any time for thought or planning will grind their projects to a halt.

The project lasted over a year. It had several restarts. Their progress was similar to a hiker walking in circles - a lot of movement and activity but little distance from the starting point. Activity is not the same as progress.

There seems to be general agreement that more planning prior to the Iraq war might have provided better results. How different do you think those discussions looked compared with those in your business? “Look we can plan forever but we need to take action. We’ll figure out the details as we go.” We’re still figuring them out.

I often hear people raise concern over too much time planning (regardless of how much or how little time is actually being spent). I rarely hear people concerned that we are jumping into execution too quickly.

The train has left the station
One executive was planning a key meeting. She set the date, booked the venue, mapped out topics, and even booked a few speakers. She asked for some help with designing the topics. I asked what the purpose was for the meeting and the topics. She wasn’t sure yet. It would depend on who the audience was. I suggested that she step back, figure out what she wanted to accomplish in the meeting, understand the needs of her audience, and then complete her planning. Her response was, “The train has left the station, we don’t have time to think that through.”

Ironically, I actually got on the wrong train once. I got off as soon as possible. I didn’t want to wait to find out where it was going. Getting off quickly and returning to the station seemed to provide me with the best shot at ending up where I needed to be.

Don't be so idealistic. Sometimes you have to compromise
I believe that something is not always better than nothing. I think this is contrary to many leaders. We don’t get rewarded for doing nothing and it doesn’t feel good. Taking action makes us feel like we are solving problems whether we are or not. It makes us feel in control. But it doesn’t always change things.

I was on one project where we were asked to reduce a list of terms used to classify people’s skills. The purpose of the list was to better match people’s skills with job requirements. The current list had over 8,000 terms. It was unusable and ineffective.

Through a simple data analysis we found that about 150 of the terms addressed 80% of the skill requests for the organization. By redesigning the process and using information other than skills we could accommodate the other 20% of the request.

The solution would have solved the problem, but was deemed “too hard”. We were told to be more realistic. We were trying to do too much. At one point the project leader even said, “This isn’t about solving the problem, it is about being able to show Joe that we did something.” They cut 1000 terms out of the skill list. The result: An unusable list of 8000 terms became an unusable list of 7000 terms. Within a year the project leader was replaced and the project was started over.

I’ve found many leaders who challenge people for trying to create the “perfect” solution. Yet, I’ve never heard someone say, “Maybe we’ve compromised and dumbed it down too much.”

Step up and advocate for what's right
Great leaders take time to understand what they want to accomplish, how they want to do it, and they don’t compromise. The amount of time to do things right is the same (or less) than the time to do things wrong. Given the current problems we see in banking, the airlines, and the economy, perhaps it would be good if more leaders had the courage to stop and think, question more and stop things that don’t make sense. To get started on focusing on what’s right, I would recommend Peter Block’s book, “The Answer to How is Yes: Acting on What Matters” or Tad Waddington’s book, “Lasting Contribution.”

Two critical functions of a leader

Leaders don’t accomplish things on their own. They achieve results through other people. The on-going success of an organization depends on two key factors: achieving immediate goals and 2) long term sustainability. For a leader this translates into fostering individual contribution and personal growth among his or her people.

Leaders who focus solely on individual contribution (which many do) sacrifice long term growth and development. They are successful as long as there aren’t significant changes in the business environment.

Leaders who focus solely on growth and development of their people, which is much rarer, often miss their immediate performance targets. Their people aren’t seen as drivers or key “players” in the organization because their impact is hidden. Although highly skilled they get passed over for promotions and raises. Often they become great candidates for competitors.

The best leaders balance both the short term contribution and long term development of their people.

Individual contribution
Individuals (or teams) need three things in order to contribute to the organization: ability, information, and motivation. Without all three, performance is hampered.

Information and motivation are the most overlooked. When people aren’t performing, leaders often assume a lack of ability. In my experience, motivation and information impede performance more often. People can do the work, they just don’t want to. Or, they want to but don’t have all of the necessary information to do it. How hard is it for your people to access information about your business? Do your reward structures and culture align with the behaviors you are seeking? Look closely, you’ll be surprised.

The problem is that the person who is best positioned to contribute to a given task or role, is probably less likely to learn from it. That person is typically already an expert (or at least very well qualified). It is tempting to keep that person in their role to take advantage of their experience and efficiency. Yet, the more they do that role, the less they grow and develop. They might not be prepared to adapt when new requirements come along.

Growth and development
Growth and development also require three things: experience, support, and feedback. Support is the most visible and tangible of the three. Organizations often have robust processes for development planning and tracking. Many provide structured curricula and training experience for their people. Despite its visibility, support is only a very small part of an individual’s development. Less than 5% of an individual’s paid time comes from training, formal development planning or coaching.

On the other hand, people’s experiences, where they spend 90-95% of their time are often left to chance. In some organizations, succession planning provides a bit more structure although primarily for a select group of people who have already shown high levels of development. For the rest of the workforce, job assignments, tasks, and positions are generally not planned. People move from position to position often to increase their salary or title with less concern for their ability or marketability. Providing more structure and intention around people’s experience will accelerate individual growth and development.

Finally, feedback which is a critical component of development is often relegated to a formal review process which occurs annually or semi-annually at best. Dr. K. Anders Ericcson from The Florida State University and an expert in the development of expertise, has noted that one of the key differentiators between experts and non-experts is the amount of feedback received. A leader can be instrumental in helping his or her people receive on-going feedback. This doesn’t only imply feedback from the leader. It also means feedback from peers, from other leaders in the organization, from customers, and from subordinates. The leader is often better positioned to solicit these other people’s time to provide feedback to his or her team members.

Focusing too much on growth can have its own downside. Just as the person with ability, information, and motivation learns the least from a role but contributes the most, the opposite is true for someone who is learning. The person who is new or unfamiliar with a role is less likely to contribute as much.

So, what is a leader to do?
The key to sustaining a workforce that can contribute and grow is balance. People's needs differ through their career. For an individual who was recently promoted, focusing on growth and development is a good idea. For an individual who is a year away from promotion, ensuring they are making a visible contribution is important. All of this is also dependent on the business context as well. A department that is at risk or in the midst of major turmoil needs to focus on contribution, it’s not a time to let people grow and explore. Here are a few additional tips:

1. Expand development planning to include proactive plans for experience (formal and informal), feedback (formal and informal), and support. Hold people accountable for all three, not just adherence to a training plan.
   
2. Be creative. Experience doesn’t mean that a person has to be formally assigned to a new team. Have a junior person proofread a proposal or presentation from another department. They are contributing by providing the proofing while learning about another part of the business.


3. Seek feedback for your people - not just from you. Find out what areas your people want to develop and identify the best sources of feedback for those areas. Set up on-going mechanisms through discussions with people, surveys, or other means to get feedback to them.
   
4. Map your people against growth and contribution. If they are heavy on one but low on the other, make adjustments.

Innovation doesn't create risk, people do (although they can alleviate risk too)

The April 14, 2008 issue of Time Magazine has two brief articles that reference innovation. The first is about the current financial crisis: “Holding Back the Flood: More financial regulation will mean less financial innovation. Maybe that’s not such a bad idea.” The second is about people who are working toward peace and social change: “Peace (at Least a Little) on Earth: Making war is easy; avoiding it takes imagination. Here are a few who have figured out how.”

The first article takes a time-honored view that innovation opens up Pandora’s Box, “The simple truth is that innovation leads to financial crises. That’s because the risks of new financial products are so easily glossed over.”

This view frustrates me. Microloans in developing countries and direct banking are innovations. It seems like both have improved the quality of people’s lives. Mutual funds made investing accessible to people who did not have the means or know-how to create a diversified portfolio. Where’s the crisis? Sub-prime lending and high risk derivatives have created crises, but not because they were innovative. They created crises because people didn’t think through (or care about, attend to, etc.) the risks. That’s a cultural problem, that’s not a problem of innovation.

Many leaders are afraid of letting people become “too innovative.” I worked in one organization where senior leaders repeatedly discouraged providing creativity/innovation training for entry-level staff. “They are doers, we don’t want them thinking about what we tell them.”

I once went to a fast food restaurant with a friend. This restaurant offered a “combo deal” where you could combine any two menu items into a meal. I chose two salads. My friend did the same. When we picked up our orders on the other end, I had a salad and soup. My friend had two salads. I asked how she managed to get two salads. When I tried, the manager told me that they system wouldn’t accept two products from the same category and that I had to get something else. My friend said that the person who took the order (different from the person who took my order) also put in a soup and salad. Here is where the innovation occurs. The person then went to the end of the counter where they fill the orders. She crossed off “soup” on the receipt and wrote “salad”. She then told the person who was putting the order together to use the receipt and not the computer screen.

Who was glossing over the risks in this case? The quick thinking of the 18 year cashier overcame the constraint, solved the problem, and improved customer service. The maanger who was following the process was creating the risk. My poor customer experience was created by someone who executed without questioning. Which is more dangerous for the organization?

The article also argues that regulation is the answer to innovation. Constraints don’t stifle innovation. In the case of the fast food company, the constraint is what created the opportunity to innovate.

The second Time article points this out quite well. It’s the story about Ricardo Sanchez. Sanchez is leading a coalition to help improve democracy in Venezuela. He couldn’t get his radio station’s license renewed and the government ultimately shut it down – how’s that for regulation! Yet, Sanchez’s movement continues to grow as they find new channels and new ways to get their message out.

Don’t be afraid of innovation. Letting people think and overcome constraints will ultimately help your business.

Leaders as effective coaches

Good leaders are good coaches. Coaches don’t just provide answers. They help people grow and develop while contributing to the organization. This article provides some tips and tricks for being a more effective coach.

You have three main roles as a coach:

Diagnosis: determining when/where people may need help

Creating Awareness: helping people see that they need help

Enablement: guiding people to the tools and resources they need to move on

Executing Your Role
There are five areas in which you can provide coaching support:

Process: people are doing the wrong tasks or are doing tasks out of order

Information: people are misusing information (e.g., wrong information, too little information, too much information, etc.)

Decisions: people are making the wrong decisions or do not know what decisions to make

Conclusions: people are drawing the wrong conclusions

Teamwork: people are not working together effectively

Routinely assess your team’s performance in each of these areas to determine if they need your support.

Instead of just giving people the answer, there are several tools that you can use to help people identify and work through their problems:

Specify: have people explain in specific, concrete terms an issue, design idea, or decision they make

Extrapolate: challenge people to think several steps ahead as to the results and impacts of their current decisions

Audit: have people explain their assumptions, interim conclusions, resources, etc.

Expand: suggest alternative ideas, explanations, theories, or designs and have people refute them

Reflect: have people discuss their processes and how well they are working within them

Assess: make a judgment about people’s decisions or actions

Refer: suggest external resources that the team can consult (books, articles, experts, etc.)

To help people learn focus on their thinking, not their products/deliverables. This is not to say that deliverables are unimportant. Rather you should make sure that people are really learning. This is especially true when they do things “right” as well. They might have just gotten lucky.

Providing Multiple Levels of Support
Teams that receive too much support do not get an opportunity to explore and learn. Teams that get too little support will flounder and become frustrated. When determining how much support to provide consider the following process:

1. Determine if your teams recognize that a problem or issue exists. The teams might have all of the information they need to fix the problem but maybe just don't recognize it.
2. Once you know that the team recognizes the problem, see if they recognize its cause. Again, they may have all of the information to respond but just need prompting as to the situation.
3. Determine if your team knows how to respond to the problem.

Conclusion
As a leader you have to balance competing priorities. On one hand your job is to get results. On the other hand, your job is to grow and develop a workforce that can get results. By focusing on your coaching skills, you can accomplish both.

Role models for leading in a new age

Daniel Pink’s book, A Whole New Mind, lists the new “senses” required to thrive in our new, “conceptual” age. The six new senses are design, story, symphony, empathy, play and meaning. Many of these are in direct contrast to what we’ve heard and seen as leaders for the past several decades. So, where can we look for role models?

I’ve identified six new role models to serve as metaphors for making this shift. These roles are not meant to be one-to-one mappings against Pink’s senses. However, they follow the general spirit of his book. Learning how people in these roles think and operate can provide great insights into leading. Of course, this isn’t to say that the “old” metaphors should be tossed out. A good leader draws from both sets as needed.

Journalist to Novelist
Data and facts obviously are critical. Leaders cannot make up reality. Great leaders generate meaning, context, and excitement around those facts. People don’t commit their time, energy, and support to facts. They commit to a vision or a story. They want a picture that puts them or something they care about in a better place.

Soloist to Conductor
You simply can’t do it all on your own anymore. Business has become too complex. Even if you had the ability, you don’t have the time. Leadership is not about being the expert. Leadership is the ability to coordinate the expertise of others to achieve your goals. How can you think more like a conductor? Read The Art of Possibility by Rosamund and Benjamin Zander. Ben is the conductor of the Boston Philharmonic.

Engineer/Scientist to Inventor
A partner at a professional services company once gave me this advice with regard to creating value, “Focusing on cost containment creates value but has a limit. The best you can ever do is eliminate the cost. Growth on the other hand has no limit. The possibilities are endless." Good execution no longer enough to differentiate your company, especially when basic processes can be off-shored for 1/10 of their current cost. You grow not shrink your way to success. Start thinking like an inventor and harness opportunities and possibilites. Where can you start? Consider Michael Gelb’s book, “How to Think Like Leonardo DaVinci.”

Stage Actor to Street Performer
These titles are from a model in Joseph Pine and James Gilmore’s book, “The Experience Economy.” Gilmore and Pine argue that we’ve moved from a service to an experience economy. Value is created not just from a product or service, but from the context in which that product or service is provided. Experience equals memory. A doll is a product; a day at the American Girl Store is an experience. Memories are achieved by providing a unique experience for each person. This is what a street performer does. The street performer has a “bag of tricks” but puts them together in unique ways based on his audience and what is happening around him. The stage actor, on the other hand, executes the same script, start to finish. Your employees, customers, and business associates are looking for a unique experience from you. Use your bag of tricks wisely and tailor it to the needs of your audience.

Producer to Director
I often view this as the distinction between management and leadership. Producers ensure that everything is getting done in the most efficient and effective way. Directors ensure that the overall outcome and vision is being met. They help people “get into their role” or “find their motivation”. They guard the integrity of the story. Every organization has a story that is unfolding.

Service Provider to Service Consumer
People don’t want your products or services; they want their needs to be met. I once heard of a training exercise being done at Dell. Participants were paired off and one was asked to close their first. The other was instructed to get their partner’s fist open. Most people try force, bargaining, or threatening. Michael Dell looked at his partner and said, “What can I do to get you to open your fist” He succeeded. Get used to looking at the world through the eyes of your people or your customer. To jump start the process, read Paco Underhill’s book, “Why we buy.”

Stop thinking with half of your brain tied behind your back

Are you a divergent or convergent thinker? Divergent thinking is when you generate a lot of possibilities for a given problem. Convergent thinking is whittling options down to a few manageable items. Many corporate cultures favor convergence. Convergence focuses people and ensures that things get done. That’s a good thing usually. However, it can sometimes result in glossing over new opportunities or alternatives. Worse yet it can sometimes lead to very efficient and effective execution of the wrong things. Convergence and divergence are both important. By constantly iterating between the two, you can increase your levels of innovation and ensure that you are getting things done.

Cycling through divergence and convergence
When people hear “divergence”, they often think of brainstorming. Brainstorming is only one way to diverge (and a relatively poor way according to many innovation experts). Often if brainstorming happens at all, it happens once at the beginning of a project. Once a solution is identified teams move straight into execution to "drive out" the details.

If the path you chose is the right one, this process will be very efficient. If the path you chose isn’t correct, you will likely find yourself back at the drawing board after a lot of wasted effort and energy. There is an alternative that lets you continually move forward while keeping your options open.

In a diverge/converge model at each step in the project you generate as many options as possible and then select the one (or two) that you want to tackle.


At each stage you wind up with an entirely new course of action and set of options. There are also a lot of options "left behind". If the current option doesn't work out, you've already thought through an alternative you can try.

The key to generating innovative solutions is volume. With innovation, one indicator of success is the number of ideas left behind, not just the quality of the one selected.

So how do you do it?

Provide time to diverge - most of us get anxious and uncomfortable when our meetings start to go off in many directions. A lot of anxiety comes from the fear that the meeting will never get "back on track". Set aside specific time in your meeting to spend on diverging activities and time for converging activities. By knowing that you are working within a specific timeframe you can relax and fully engage.

Use divergence techniques and exercises - Don't just "brainstorm", it's too open ended if you aren't used to thinking that way. There are a lot of books written on creativity and innovation that will give you specific hints, techniques and exercises to do.

Force yourself to think differently - Set yourself (or your team) a goal for how many new ideas you have to come up with before moving on. It's amazing how well this works.

Be sure to have clear criteria for what you are trying to accomplish - Before diverging, and especially before converging, it is important to have well defined criteria and goals for what you are trying to accomplish. Allow enough time for the group to become comfortable with the context and desired outcomes of your sessions.

Create a creative atmosphere - I know it may seem new-agey and fluffy, but your atmosphere will impact your ability to think creatively. When it's time to let loose and generate, open up the environment as much as possible. If you are in the Chicago area, book a conference room at Catalyst Ranch!

Resist the temptation to jump to a solution - Often our first instinct is the most obvious, overused or unoriginal option. Sometimes, obvious, overused and unoriginal ideas are the right answer. Just make sure that you've tested your options before coming to that conclusion.

Perhaps the answer to your problems is a different question.

I’ve noticed that some problems just don’t seem to go away. They aren’t being ignored. Some of the biggest on-going problems I’ve seen have had teams working on them on and off for years. This isn’t unique to just one company or industry either. I see it happen everywhere. It’s certainly not for a lack of effort or creativity. More often than not, I’ve found that people are simply solving the wrong problem.

How can you avoid this? Here are a few quick tips:

Don't confuse a bad solution with the actual problem – This is the most common mistake I see. The solution takes on a life of its own. Eventually it becomes the focal point rather than the real problem. For example, in one organization, front line staff were frustrated that they were not getting good career advice. The organization made many attempts to develop career counselor training but nothing seemed to help. Developing career counselors became a key priority for the organization. They lost sight of the problem. The problem wasn’t poor career counselors; it was poor career guidance. Career counselors were one solution to that problem (That didn’t work). The organization eventually changed focus and found alternative ways to get career information to its people.

Keep asking "why" – Don’t stop after just one "why" no matter how good the answer sounds.

Sales have hit a plateau.

“why?”

We are not getting new customers.

“why?”

The sales force spends most of its time with existing customers.

“why?”

They don’t know what other customer segments use their product

Stopping after the first or second “why” might lead you to a temporary fix. It would probably involve some type of incentive program for making calls. It might even work for a while. Asking the last two “whys” gets you the real answer. This isn’t an issue of motivation; it’s an issue of information.

Ask “What are we really trying to accomplish?” - This will also help you differentiate solutions and problems. You train your employees, conduct quality reviews, implement policies, and use computer systems for a reason. None of them are ends in and of themselves. Training staff should not be your goal. Having a staff who can perform their job should be. If training isn’t working step back. Training isn't the problem. Poorly peforming staff is. Maybe you can hire people with a greater level of skill. Perhaps you can restructure people's responsiblities. There are a lot of possible solutions to the true problem. If too many errors get through your quality control process step back. Don’t just fix the quality control process, figure out what’s causing the errors in the first place - that's the actual problem.

Be suspicious when new versions of the same solutions don’t fix the problem – I was once asked to provide customer service training for a poorly performing department. After reviewing the department’s data, I had a hunch that the problem wasn’t a lack of skill, it was poor processes. I mentioned this to a couple people and was surprised to learn that this team had been through customer service training two times in the prior eighteen months! If your solution doesn’t work, tweak it. If it still doesn’t work, step back and consider whether you’ve got the right problem.

Five tips for leading innovation

Innovation doesn’t just come from having creative people around. Like any ingrained organization trait, innovation is driven by culture. Culture is driven by leaders.

In most organizations, the deck is stacked against innovation. You can’t just want it. Your job is to make it happen. Here are five tips for leading an innovative organization:

Focus on outcomes – Nothing kills innovation faster than a detailed set of marching orders. Outcomes open up possibilities. If I ask you teach me to speak Spanish, your options are very limited. If I ask you to help me communicate with Spanish speaking people, the options are endless. Don't tell people to build you a rocket, tell them that you want to get to the moon by the end of the decade. Innovation needs space.

Demand dissention – An interesting similarity in Jewish and U.S. law is that both record dissenting opinions as well as prevailing ones. I believe this is what has enabled both to remain relevant in ever changing times. This is a great form of organizational learning. When things change, you may already have a solution (or at least a starting point)“on the books”. Too many organizations and leadership teams squelch dissension in order to provide a “unified” front. I once read of a CEO who appointed one person to be a contrarian in every meeting. The assessment of that person’s performance for the meeting was based solely on how well he or she posed a completely opposite view from the group.

Require alternatives – Due to time and cost pressures, we often settle for the first answer that seems reasonable. Satisficing is the enemy of innovation. Don’t even entertain a recommendation unless the team has shown you at least two other, radically different, alternatives. It doesn't take that much more time to think through a few more options.

Place large numbers of small bets - One of my favorite innovation gurus, Steve Shapiro makes the point that the more you have invested in a single solution, the less likely you are to change it, abandon it, or start something new. Make small investments in a lot of things and see which ones stick (see Steve’s full blog entry: What Innovators Can Learn From Vegas Card Counters

Stop reading your own press – It’s fine for others to think you are innovative. Once you start believing it yourself, you will quickly succumb to the status quo.

Staying relevant during changing times

How do you stay competitive in a rapidly changing world? How do you win new customers and keep the old ones when your products and services begin to look like all the others? How do you keep your organization alive and dynamic? These are questions on the mind of many business people. Some respond by increasing their focus and “going deep.” An alternative is to broaden your focus and start exploring. There are plenty answers available out there. They are just waiting for us to ask enough questions.

At a very young age we are constantly told to "stop asking all those questions!" Most corporate cultures value and reward answers, not questions. Yet without the right questions, we lose the opportunity to find the right answers. There are three things you can do to increase the questions you ask and therefore, the potential pool of answers from which you can draw.

Developing a passion for understanding: This isn't just asking a lot of questions. It is a relentless pursuit of understanding, even (especially) if there is not always a direct use for what you are trying to understand. Often we don't have time to sit back and try to understand. We drive for the deliverable, or flesh out the answer, based on whatever information we have. We say we are working to understand. We ask questions about the task at hand, the expectations set forth for us, the due date, or the budget. That's one type of understanding. Another type is to understand the nature of the problem, the context around the problem, or even how our solution is going to fit into a bigger picture. We allow ourselves to take a lot of things for granted rather than diving in and trying to make sense of them.

I had the opportunity to study under a great professor named Roger Schank. Roger was once asked if, as a professor, he feared that he would one day run out of answers. His response was, “my bigger fear is that I’ll run out of questions.”

My greatest accomplishments have never been in areas where I started with the greatest expertise. They have always been in areas where I've had the most questions. Interestingly, those questions have stimulated thought among others, have caused them to engage me more in their discussion and have ultimately, built my expertise. But, it always came from a question or a desire to understand something new.

Take chances: Discovering new things requires that you enter into new situations or ask "stupid" questions. Challenging your assumptions or what you take for granted requires that you move from your comfort zone and experience things in a different way. These are things that our culture typically tries to minimize. Why "rock the boat" or "put a wrench" into the works” when things are operating smoothly, right? However, as with anything, higher risk generally equates to higher reward.

Do you put yourself into new, unusual situations to try to better understand things? Do you invite people to meetings who may disagree with you or even strongly oppose your views? Do you put yourself into the center of things to get the best view or do you try to stay on the fringe where you "can't get into trouble"? In Michael Gelb’s book, “How to Think Like Leonardo daVinci”, Gelb points out that daVinci invented his own parachute and submarine in order to get closer to the action. Think about how dangerous that must have been. Leonardo knew that unless he took the risk, he could never really immerse himself and satisfy his passion for understanding.

Engage life: You can't sit on the side or wait for someone else to provide you with the answers or experiences you need. Engaging life means putting yourself in the center of the action. It means viewing the world from multiple perspectives. Leonardo would sketch a flower or part of the body from three different angles to ensure that he was "seeing" the whole picture. How many perspectives do you use when solving a problem? In our search for the "answer" we often latch on to the first perspective that makes sense and then "drill down" to get to the details.

Curiosity is more than just asking questions. It is about embracing life and developing a passion for understanding how things work.

Want to innovate? Stop trying to be innovative and start solving problems.

Innovation continues to be a major business buzzword. Companies are realizing the importance of innovation as the last bastion of competitive advantage. Yet, the more I see people trying to be innovative, the less value they seem to create. The problem is that they focus on innovation as an end in and of itself.

The true innovators are staying focused on tough business problems. Their tenacity pays off through innovative solutions.

Once during a job interview, I was asked, “What is the most innovative thing you’ve done in your last job?” When I shared that question with several of my colleagues most smiled and said, “That was a perfect question for you, I bet you nailed it.” But, I didn’t nail it. I couldn’t think of anything. I wound up talking about a new design process that I’d developed. As I reflected on that answer, I wasn’t satisfied. The design process was interesting and new. Yet, I didn’t really believe it was the most innovative thing I had done.

I continued to struggle with the question and my inability to answer it. I’ve received a lot of feedback that I am innovative. It’s one of the key strengths that others generally ascribed to me. People invite me to help solve their problems and seem to think I add some value. I couldn’t figure out why answering that question was so hard.

Then it struck me. I don’t set out to be innovative. As a result, I don’t judge the final solution on how innovative it was. I set out to solve problems. Success is a measure of how well the solution solves that problem. That’s why it was so hard to answer that question.

The more I thought about it, I realized that innovation is not just about the form of a solution. It’s not how shiny something is or whether it makes cool whirring sounds. Innovation is a function of the constraints, barriers and assumptions that were overcome to solve a problem. Sometimes innovation lies within the simplicity of the solution.

Think about it. Washing your hands isn’t a very exciting or flashy thing to do. Yet, as a healthcare “technology”, it has probably saved more lives than all other technologies, medicines, and treatments combined. Now, that’s innovation.

The next time you are trying to solve a problem, resist the temptation to “innovate”. Instead, take time to understand the problem and its constraints. Then, focus on overcoming them. Your solution will add a lot more value and it will probably wind up being pretty innovative.

The first three months - what to get right in a new leadership position

I recently met with a friend who is taking a leadership role in a new company. He asked what I advice I had for his first 100 days. Having been through a similar transition just two years ago, I had plenty of lessons learned. Here are my top four:

1. Read "The First 90 Days" by Michael Watkins. I read it but dismissed its advice. I thought it was too calculating. I was wrong. It's great advice.
   
2. Figure out who is on board with your vision and direction and move the rest out. Trust your gut. I had this figured out in the first week. But I didn’t trust my instincts. Those instincts were confirmed after the first month but I still didn’t act. I wanted to be “fair”. People who are hanging on to the past aren’t going to help you move the organization into the future. This isn’t about skills, it’s about attitude. I waited for some people to "come around". They never did. They also prevented others from coming around. You need people who are willing to make the charge with you.
   
3. Provide your vison and npoint of view to the highest levels of leadership that will listen. Diagnose where the organization as a whole stands relative to your function. Then present your diagnosis and your vision for where you are taking the function. Do this within the first month. It lets people know what's on your mind, that you have a vision, and sets boundaries for what your group might and might not continue doing.
   
4. Set expectations along with goals. Goals are about what you want your people to accomplish. Expectations are how you want them to do it. Your team needs both.
   

What culture are you trying to create? Does your team know?

Does your team understand their goals for the year? I bet they do. Most good leaders know how to set and communicate goals. What about expectations? How well does your team understand your expectations? What’s the difference?

Goals reflect what you want accomplished. Expectations reflect how you want it accomplished. For example, your goals might deal with customer satisfaction, market share, or cost containment. Your expectations might talk about how you’d like your team to treat your customer. Should they be trusted advisors? Order takers? Unconditionally accommodating? How should team members interact with each other? Is it every person for him/herself or do you expect people to collaborate and support one another.

Expectations are important. The help reinforce the culture of your team.

In my last job, I create an expectations document for my team. I was surprised at how many people said they had never been given their leader’s expectations. Even more surprising was how quickly the team culture started to change once they saw the expectations.

I’ve posted those expectations below. I’m not trying to suggest that these are the “right” expectations for every team in every situation. Rather, I’m hoping they can serve as an example of a simple way to communicate your expectations to your team. This simple list became a key guidepost for helping my team think about their work, their decisions, and their actions.

***********************
Our team members . . .

Act With Integrity
Our team members are true to their word, transparent in their thinking, and forthright in their actions. They say what they mean and mean what they say. They put organizational success ahead of personal agendas or pride. They do what is right.

Embody A Passion For People
Our team members put people first. They have a passion for helping individuals succeed. They constantly look for ways to break down any barrier that might be preventing people from reaching their potential. They are an advocate and a voice for our organization’s people.

Drive Outcomes And Results
Our team members are not satisfied until they have caused a demonstrable change in an individual or in the organization as a whole. They recognize that processes, programs and other events are means to an end. They are tenacious in their pursuit of results. They act with urgency.

Draw Upon A Point Of View
Our team members have an informed point of view about the area for which they are responsible. They drive their decisions and actions from that point of view. They are advocates for their point of view although are open to the ideas of others. Their actions have purpose and their purpose has action.

Work As A Team
Our team members support one another. They compliment each other’s strengths and weaknesses. They are available and present for each other. They help one another succeed, grow, and prosper.

Engage in dialog and offer insight
Our team members actively engage in discussions. They share their perspective and insights or ask questions to further the thinking of others. They listen carefully to others. They support constructive, respectful debate and dialog. They contribute to each interaction they have, whether it be one-on-one or in a group.

Spark Curiosity And Innovation
Our team members are curious. They don’t settle for the status quo. They make each answer the start of a new set of questions. They overcome constraints and assumptions to find meaningful and powerful answers to hard problems. They are not afraid to take chances

Think Holistically
Our team members see the big picture. They understand the context of the problems they are solving. They propose solutions that fully address the problem at hand. They drive sustainable results.

Treat All People With Respect
Our team members value the experience, perspective, and being of all people. They give others their full attention and consideration. They are fully present and engaged in their interactions with others. Their actions are reflective and considerate of the needs of others.

Experts don't always make the best leaders

How do people get promoted in your organization? While I’ve begun to see a shift, it seems that many organizations still promote people to leadership positions because they are good at their current job.

At first glance, this makes a certain amount of sense. Who wants a low performer leading the organization? However, there is more to leading than just being good at your indiviudal role. Success in a role has little bearing on a person’s ability to make others successful in that role.

In fact, promoting people based on their functional or technical skills alone often creates larger organizational problems.

Needing to maintain “expert” status
People whose position and success are based on their functional or technical skills have a vested interest in holding others back. After all, if their success is based on their expertise alone, anyone who has similar or greater expertise becomes a threat. As a result, these people typically:

• Withhold key information (information is power) from their teams
• Publically criticize or belittle their people’s work
• Take credit for other people’s work
• Resist new or divergent ideas
• Limit empowerment and development within their groups

Getting too involved in day-to-day activities
Your leaders need to drive the success of your business. This requires the ability to focus, motivate, and enable their people. When the leader’s primary skill is doing the specific task, he or she will often resort to that. Generally this results in the leader’s time being poorly leveraged. These people typically:

• Take over tasks that should be done at a lower level – reducing their availability for management tasks or helping/developing others
• Become bottlenecks as they require input or sign-off on too many decisions/actions
• Slow things down by “adding too much value”

* - in other words constantly make changes or tweaks to other people’s work

Losing sight of the big or strategic picture
Often, because these leaders continue to focus on the day to day tasks, they lose sight of the business. Leaders certainly need to know what is going on in their part of the organization. However, much of their value comes from being above the details. Good leaders have a holistic view of all of the work being done. More importantly, good leaders look toward the future to figure out what is next for their teams and the business. Leaders who fall into the “day-to-day” task trap will often:

• Fail to communicate (or even have) a vision for their team and organization
• Struggle to juggle multiple priorities
• Become reactive and tactical in their decision making

Rethinking leadership

In the age of detailed competency models, career ladders, and certifications, it is hard to avoid the trap of promoting the people based on functional and technical competence. Leadership is not about doing, it is about focusing, coordinating, and enabling the people who are doing.

There are a few things that you can do:

1. Build leadership skills into your competency models early on. Don’t wait until someone becomes a leader to find out if they have the right stuff.
2. Recognize that leading and doing are two different things. Identify people who can rally and motivate teams. Use succession planning to give these people proper exposure to different parts of the organization. This will help them understand the details of what they manage.
3. Create satisfying caeer paths and rewards for both expertise and management. Don’t build a single career path that provides rewards only for becoming a manager. Find ways to reward people who want to build deep functional and technical expertise.
4. Get rid of leaders who can’t lead.
   

Poor leadership is a major cause of attrition, poor business performance, and poor customer service. Leaders who were promoted based on anything other than leadership skills put your organization at risk.

* For an excellent explanation of the dangers of “adding too much value” see Marshall Goldsmith and Mark Reiter’s book, “What Got You Here Won’t Get You There.”

Why measure?

What do you measure in your organization? Sales results? Operating costs? Profit? Employee or customer satisfaction? Perhaps you measure the number of programs that your department delivers or the number of attendees to those programs. You probably have a pretty good understanding of what gets measured in your organization. So, here’s a harder question, why do you measure it?

I often ask this question in my talks and workshops. The most common answers are that we measure to track progress or to determine bonuses and performance ratings. Both are true, although I’d argue that those are side effects of the real purpose.

The real purpose of measuring something is to drive action. Why do you check the temperature in the morning? It’s not because you are just interested in knowing about the weather. It’s because you have to make a decision: should put on a coat, wear short or long sleeves, or bring your gloves?

Measurement should drive action.

I recently facilitated a goal setting session to create a robust set of measures for the organization. (Prior to the meeting they only had two, high level measures related to revenue).

We developed a series of measures around acquiring new customers. One person nervously raised her hand and said, “But that seems unrealistic because we don’t get that many new customers.”

That’s the difference in thinking about measures as a way to capture the state of your business versus as a mechanism to drive action.

She was using measures as a historical tool to describe what happened in the past. Aside from providing some interesting information for an annual report, this way of using measures drives little value. Not surprisingly, those numbers changed very little over the course of several years.

Instead, I challenged her and the board to use their measures more actively. They needed to determine a plan for how they were going to increase the number of customers. Each month they would review the metrics and change actions if they weren’t making progress.

I’m often surprised by the number of people who spend considerable time thinking through metrics but then put them away until the end of the year.

If you aren’t going to use metrics to influence or change your actions, don’t waste the effort capturing it in the first place.

Metrics should drive the future. They should not simply be a reflection of the past.


Tips for driving action through measures

1. Build your measures around the key drivers and decisions for which you have control.
   
2. Don’t use the same measure as your boss. Determine the specific and unique contribution that you will make to his or her measures.
   
3. Ask yourself, “Does this measure provide enough guidance for me to take action?”
   
4. Align the level of precision of your measures with your decision making. For example, don’t measure customer satisfaction to the 1/100th of a point if changes at that level aren’t going to impact your actions.

It's hard to be objective when you are being objective

It seems that the pendulum has swung way over when it comes to information and decision making. Data is king. Don’t try to make a statement without a pile of numbers to support it lest someone think you are just giving your opinion. The mantra: leaders must be objective in their decision making and actions.

But here’s the problem. Just because something is quantified it is not automatically objective. Run a Google search on global warming and you are certain to find plenty of objective evidence supporting both the proposition that it is occurring and not occurring at the same time.

So, what does a leader do? Should we abandon all forms of measurement because of potential flaws and biases? I don’t think so.

But we should stop automatically assuming that anything that is quantified is objective and anything that is not quantified is subjective. More importantly, we must remember that data is just a reflection of reality; one that we have invented. It is not reality in and of itself.

For example, one organization in which I worked moved to an “objective” performance measurement system. All goals had to be quantified. Each goal had a one to five scale which was determined solely based on a pre-defined metric.

While the numbers may appear objective and precise, most are made up. Is there really data that says a 10% increase in sales is 1) the right increase, 2) a reasonably attainable increase, or 3) worth the same as a 5% increase in customer satisfaction (which might also be worth a “5” on the evaluation). Or, was that 10% increase in sales someone’s wish in order to improve business. Wishes are subjective even when they are translated into numbers.

In this organization, a director was brought in to “clean up” a department. Within a year, he moved his department from the absolute bottom to average. He was innovative in his thinking, didn’t tolerate poor performance, and was committed to making his people either succeed or move out of the organization. In everybody’s eyes, he was a top performer.

Then came the performance ratings. He was rated a three out of five. Even though he significantly improved his customer satisfaction, it didn’t make it to the organization’s goal. The level that he reached was only worth a three. I even remember another director commenting, "But he seems like such a good performer."

Was that objective? The goals were tied directly to customer satisfaction scores. Everyone was measured against it in the same way. There was no room for opinion to “distort” the facts. Yet, somehow, this top performer was objectively assessed as average.

The problem was that the objective numbers were arrived at in a subjective way.

The organization’s goal was an opinion. There was no hard evidence to suggest what the goal should have been. It was set by taking the prior year’s result and increasing it. The increase was based on an amount that “felt” right to the management team. More importantly, the determination that everyone in the organization should use the same target was equally subjective. No one considered the amount of effort required to move a department up from the bottom versus maintain an already well performing one.

Now perhaps this can be dismissed at just poor goal setting. It might be an extreme case. However, I don’t think it is far from reality. Look at the “objective” measures in your business. How many of them are based on facts and evidence versus opinions and desires?

I’m not suggesting that we do away with numbers and data. I am suggesting that we use them in context. Numbers and data are our invention to make sense of our reality. They are not that reality.

How much impact could 445,000 Harvard graduates have?

What is your company’s annual spend on corporate training? What type of impact is it having?
Many attempts have been made to quantify the benefit of training. Some seem to work while others provide questionable results at best. I recently saw some statistics that gave me a new perspective on the impact of corporate training.

Instead of looking at the return of training, I thought I would look at the impact of similar investments compared to training. Some people might not like this approach. Admittedly it is based on perception and subjective experience – all of the things we are taught to avoid. However, I believe that it is an instructive way to challenge our thinking about corporate training. See what you think.

According to one study[1], U.S. corporations spent $55.8 billion on training in 2006. The report predicted a 7% increase in 2007 projecting about $59.7 billion in spending on training. How much better off are we because of this investment? It’s hard to say definitively. However, here are some other things that $60 billion could do[2]:

• Quadruple President George W. Bush's Emergency Plan for AIDS Relief
• Fund the American Cancer Society for the next 103 years
• Cover the American Red Cross' annual operating expenses for the next 17 years
• If earning 8% annually, could indefinitely pay the salary of 104,753 public school teachers (average pay: $45,822 a year)
• Fund the Centers for Disease Control 11 times over
• Pay every Harvard undergraduate's tuition ($30,275 a year) for the next 297 years
• Provide two to three month's income for the 1.2 billion folks who live on less than a dollar a day (they could each get a one-time $50 payment)

Of course, I am making somewhat of an apples to oranges comparison. First, it’s easy to see humanitarian causes as having more impact. That was not my point in citing these numbers. I considered these relative to the amount of change they could drive, not the nature of that change. Secondly, it’s hard to compare the impact of an individual company’s training with the impact of such global programs as these. All caveats aside, however, these statistics are still compelling. As a nation, we can and should get more from our spend on corporate training.

Five tips for increasing the impact of corporate training

Focus on the right problem – Align training with key business priorities and problems.

Invest more in less – Choose a few targeted programs and invest properly in them. Good training costs money. It is better to have a few good programs than a large number of poor quality programs.

Use training sparingly – Use it to build skills that are too costly to learn on the job. Don’t use training to disseminate information – there are more efficient and effective channels for that.

Invest in developing a full capability – Training alone won’t solve problems. Your investment in solving a performance problem should include training, information systems, new processes, and other organizational resources.

Don’t trade efficiency for effectiveness – Good training requires good design. It can’t just be thrown together by well meaning or even knowledgeable subject matter experts. It will only be as good as 1) the quality of the requirements definition, 2) the quality of the content, 3) the understanding of audience, and 4) the quality of the instructor/delivery channel.

[1] Bersin and Associate’s 2007 Corporate Learning Factbook (http://www.bersin.com/newsletters/07_feb_el.asp)
[2] Just How Much is $60 Billion?, Forbes.com, June, 2007, (http://www.forbes.com/2006/06/27/billion-donation-gates-cz_ts_0627buffett.html)

Constraints don't stifle innovation - you can't be creative without them.

Have you ever thought that you could be more innovative if you just had fewer constraints imposed upon you? That’s the dream of many leaders; to be free of constraints so they could let their minds wander and do truly innovative work. After all, how can you be innovative when you have to hit margin targets, improve sales and reduce costs? In reality, that’s the time when you can be most innovative. In fact, without a constraint, innovation cannot occur.

Innovation is overcoming constraints
What is the most innovative product, service, or process that you’ve seen? What made it so innovative? Chances are it isn’t following the same rules as the others. What made it innovative was that it overcame some constraint or assumption.

In his book,Why We Buy, Paco Underhill explains this from a slightly different perspective.

“Whenever you encounter shopper improvisation in the retail environment, you have found poignant evidence of one person’s failure to understand what another person requires.” (p. 88)

In other words, shoppers improvise when stores place constraints on their experience. In this case, Underhill is talking about how men use displays, platforms, or any other horizontal surface as a seat (when none are provided) while waiting for their spouse/girlfriend to shop. People are incredibly adept at finding simple solutions to every day constraints. So are businesses.

Amazon overcame the constraint of not having human sales associates in an on-line environment. By using smart data mining algorithms, Amazon is able to help customers find other products that might be of interest - just like a sales person (sometimes even better).

Netflix overcame a distribution constraint making on-line video rental feasible and competitive with bricks-and-mortar stores.

Other companies now provide recommendations based