Saturday, June 11, 2011

The Leader’s Role In Building Trust

The difficult economic situation of the last couple of years has negatively impacted levels of trust. A recent study by Maritz research found that just 11% of employees surveyed had a strong degree of trust in their organization's leaders. Even more alarming is that only 7% of the respondents said they had a strong degree of trust in their coworkers to look out for their best interests. It paints a picture of a dog-eat-dog world with everyone out to protect their own needs and desires.

This presents a huge challenge for businesses today according to Randy Conley, Trust Practice Leader at The Ken Blanchard Companies®. As Conley explains, "Trust is at the foundation of all relationships—whether it is interpersonal or organizationally. At the organizational level, low levels of consumer trust leads to loss of market share, decreased revenues, and a poor brand image or reputation. At the individual level, leaders face the fallout from low trust through decreased performance and increased disciplinary issues, low morale, and increased turnover and absenteeism, just to name a few."

Don't Be an Ostrich

Conley reminds leaders that trust isn't something that happens by itself. It is developed through the use of very specific behaviors.

As Conley explains, "What will not work is for leaders to use the old 'ostrich' method by sticking their head in sand and hoping that the problem will go away or improve by itself. Leaders really have to take a hard look in the mirror, step up to the plate, and recognize the immense power that they have to positively influence the situation.

"The behaviors that we use as leaders can either build trust or erode trust. At The Ken Blanchard Companies, we use the TrustWorks!® ABCD model to help leaders identify the specific behaviors that they can use to build trust in relationships."

The ABCD model identifies four components of trust.

  • A is for Ability, which is all about the leader's expertise.
  • B is for Believable, which is about the leader's character, integrity, and values.
  • C is about Connectedness, which is the care and concern leaders demonstrate toward people and their ability to build rapport with people.
  • D is about Dependability. It is about being reliable, and following through on your commitments.

One Challenge That Can Be Addressed Immediately

In working with leaders, Conley stresses that all four behaviors need to be in place for people to trust. A leader cannot be strong in two or three areas and expect that people will give them a 75% trust level. Trust is an overall concept and people either trust or don't trust a person or an organization based on what they experience in all four areas.

Still, if there was an area that Conley would consider "low hanging fruit" in most organizations, it would be in the area of Connectedness. This is the behavior that leaders often overlook that can be addressed most easily.

As Conley explains, "The Connectedness behaviors are completely under a leader's control and include things such as the amount of information they share, the frequency with which they communicate, and taking the time to recognize and reward people for their accomplishments and their efforts.

Benefits at Both the Individual and Organizational Level

For organizations that address trust issues successfully, the positive effects of high levels of trust are well documented.

At the individual level, leaders can expect to see higher levels of productivity, efficiency, creativity, and morale. When there are high levels of trust people are more engaged in what they are doing and they are more willing to invest their energy in achieving the goals of the organization rather than spending their time questioning decisions, wondering how decisions are made, and gossiping about what's going on in the rumor mill. They go beyond just doing the minimum of what is required of them to collect their paycheck.

On the organizational level, when there are high levels of trust, organizations experience increased levels of profitability, productivity, retention of talent, and higher levels of customer loyalty.

Get Started Today

For leaders looking to get started on improving the trust levels in their organizations, Conley encourages leaders to remember that trust begins on an individual basis and to recognize the responsibility and impact they can have when it comes to building trustful relationships with those that they lead.

Conley also recommends tackling trust one step at a time.

"Trust is built through the use of very specific behaviors. When you say that there is a trust issue in a relationship, or in an organization, that can seem like a big, hairy monster at first. But when you break it down into the specific behaviors that we've characterized with the ABCD model, trust becomes a much more manageable issue that can be worked on and fixed. With an assessment of trust levels through the lens of the ABCD model, leaders can rediscover the power they have to build trust with those they lead."

Thanks to The Ken Blanchard Companies


Next-Generation Product Development

Combining agile up-front processes with a lean approach to the back end can help companies outperform the competition. At least half of all product launches fail to live up to companies' expectations. For every four projects that enter development, only one makes it to market, according to a recent study at Georgetown University's McDonough School of Business. Booz & Company found in an earlier study that about 70 percent of the resources spent on new launches are allocated to products that are not successful in the market. Most companies have only themselves to blame. The traditional, gated product design process — what we'll call the first-generation approach — is rigid and linear, locking in customer preferences, potential risks, and other features at the beginning of the process. Lean product development techniques, a second-generation approach that many companies have adopted in recent years, minimize waste and boost efficiency, but they also lock in product attributes too early and limit innovation.

To get more out of new product design, companies need to adopt a third-generation approach: a more agile product development system capable of addressing frequent iterations of multiple design options early in the process, based on continuous testing and highly sophisticated customer-driven design changes. This method, which both encourages flexibility and recognizes the unpredictability of the early stages of product development, ensures that the latter part of the cycle is much less uncertain, enabling companies to bring more popular products to market at lower cost, and with fewer delays.

Consider, for example, the returns that Apple Inc. has enjoyed from its rapid-fire sequence of products that began with the iPod and its numerous variations, then the iPhone, and finally the iPad — products built using many of the best agile techniques. Apple launched the initial iPod after just six months of development by reusing technology and components that had already been perfected by partners. More recently, Apple was able to significantly upgrade the iPad in only a year, adding a camera, faster processors, and improved battery life, among other features. On a larger industrial scale, there's Oshkosh Defense, a division of the Oshkosh Corporation. In late 2008, the Pentagon issued a request for proposals for a lightweight off-road vehicle that could protect its crew from improvised explosive devices — and that would be ready for production within seven months. Oshkosh used modular parts from existing equipment; tested the design as it was being produced, generating frequent new iterations; and enforced daily meetings among the core team members across numerous functions, aimed at assessing risk and fine-tuning the development plan. Oshkosh handily overtook its competitors, winning a contract that has generated more than US$2 billion to date.

Of course, Oshkosh's success illustrates the very aspect of this model that stymies many other organizations: Although more flexible and potentially more profitable, this approach appears to be frighteningly chaotic up front. However, companies that have adopted the approach learn quickly that what they initially give up in orderliness they gain in the ability to create products more effectively, skillfully, and intelligently.

Why New Products Fail

Many companies undertake product development in a way that is simply too regimented. The gated model is a carefully choreographed approach that assumes almost perfect information and analysis at the beginning of the process. All too often, however, by the time the product is introduced, customer needs have evolved (or it becomes clear that they weren't fully understood in the first place). Further, when design and technology decisions are made early, so much complexity and risk may be introduced that turning back and reworking aspects of development triggers substantial cost overruns and delays in the final stages. We recently examined 50 projects in the automotive, industrial, and aerospace sectors that used the gated model and found that 80 percent of the projects cost 20 percent more person-hours to launch than was initially forecast.

Yet even when it becomes clear that the original plan is not valid, managers frequently decide to march on to product launch because of the huge costs already incurred. They might opt, for example, to exclude features or functionalities that, although high-risk, could offer significant returns. Recall the Apple Newton, an early 1990s tablet device that set out to remake personal computing and the way applications were programmed. Because of numerous design and production stutter steps, the Newton that finally saw the light of day failed once its novelty appeal to early adopters wore off. In the end, it was nothing but an overweight PDA whose handwriting recognition feature, in particular, was an overreach that failed to meet customer needs.

Orderly but frequently ineffective, the gated approach has lost some of its luster in recent years. Many companies have replaced it with lean product development, which focuses on eliminating waste and improving speed-to-market. Lean product development has improved project execution efficiency, allowing the best lean-focused companies — for example, United Technologies, General Electric, and Toyota — to launch more projects and products within their budgetary limits. Companies applying lean techniques add continuous touch points with customers so they can test product concepts, prototypes, and features along the development and launch cycle. In so doing, they have reduced cycle time by as much as 30 percent compared to the gated approach, as well as lowered development costs by as much as 40 percent and achieved dramatic gains in first-time quality.

But lean techniques fall short at the front end of the process. The enhanced efficiency of lean product development is (like the gated model) still highly dependent on early stabilization of requirements, rather than iterating, optimizing, and trading off requirements to get to the winning product design. As a result, whatever innovation there is in this approach tends to be based on safeguarding the status quo rather than being creative — leaving companies exposed to disruptive changes in the market later on.

Agile and Lean

Given these shortcomings, we believe that a new, third-generation process is critical for success: one that applies agile product development techniques at the front end and lean approaches at the back end. Software companies have been the earliest adopters of this process, because they must routinely iterate numerous versions of their programs, and must assess them against customer needs and preferences well before the software is ready for mass release. Without customer codevelopment, a deep knowledge of product integration risks, and extensive testing to eliminate bugs at the beginning of the development cycle, software companies would essentially be operating blind, uncertain of the stability of their products or how they will be received.

The goal of agile product development is to achieve rapid and frequent iterations with multiple design options up front — driven by continuous testing and granular customer analyses — in order to optimize, balance, and prioritize requirements and identify risks earlier. This early stage of the process has four primary characteristics.

1. Rapid, iterative development model. Companies generate multiple concepts, and in a period of weeks, rather than months, test product prototypes with customers. As the results come in, cross-functional product development teams — design, engineering, manufacturing, procurement, and sales and marketing, among others — work together in problem-solving sessions to produce a blueprint based on customer responses and the new ideas that these responses generate. Frequently, these sessions are held in rooms with paper placed on the walls and scribbled on as new concepts gestate, rather than in more traditional and formal meetings. Toyota calls this approach oobeya, or "big room." An effective approach for implementing this step is to pick an upcoming market opportunity and conduct a front-end pilot, applying rapid iterations to generate and test multiple product options.

2. Modular architecture. By breaking a product concept into modules, companies can give sub-teams the responsibility to work out the best set of solutions for the final design and manufacturing of their part of the project, including interfaces, materials, or potential trouble spots. Armed with this input, design teams reunite the modules to set the plans for the next iteration of the product. It is critical to designate a creative manager to orchestrate this part of the process, and ensure that all contingencies are being discussed and that the activity doesn't devolve into a wasteful and inefficient exercise. The most innovative companies, such as Apple and Google, assign this role to their most talented product managers and systems experts. The auto industry has made good use of modular architecture, allowing carmakers to refresh model lines and introduce new versions of their vehicles while reusing multiple parts, designs, and components from prior iterations. Conducting an "architecture" session to evaluate the modularity shortcomings of current product offerings and generate ways to improve product modularity and flexibility is a must.

3. Early risk identification. As cross-functional teams rapidly iterate and synthesize product ideas and concepts, more often than not the deep dive into the design process reveals potential development risks. With this knowledge, teams can prioritize potential risks and incorporate risk reduction plans — such as focused lead-customer research and early engineering assessments — into the development slate, while scheduling routine test events to verify that risks have been addressed. A major medical device company handled this approach particularly well recently by mandating that all development plans and contingency tests include rigorous risk management controls, rather than placing risk management activities on a schedule separate from product development. Using this program, the company reduced problems in post-launch product quality and performance by more than 80 percent.

4. Intensive stakeholder and supplier involvement. Traditionally, companies hold suppliers and the manufacturing function at arm's length until product requirements and concepts have matured. By contrast, the agile front-end approach seeks to gain the input of all stakeholders — customers, partners, suppliers, and sales and manufacturing teams — to critique designs, offer insights, and broadly minimize risk and maximize efficiency up front so that fewer changes need to be made during production or product launch. The best way to do this is to appoint someone on each project team to be a supplier integrator. This person brings suppliers into the development process at critical points while working to understand supplier perspectives and capabilities, thereby enhancing the likelihood that suppliers will meet cost, quality, and scheduling expectations.

Because mature product definition and risk management take place early in the process, the application of lean techniques to the back end minimizes the wasted effort and resources typically expended on product launches. This later stage also has four key characteristics.

1. Reusable platforms and modules. Using the lean approach gives teams the luxury of setting up a development plan that mitigates the need to redesign large parts of the product from scratch in every cycle and iteration. Some product features are designated as necessary but not highly valued by customers; these are then treated as common modules that can be reused over multiple product generations. This approach gives agile development teams the chance to apply most of their resources toward "intelligent customization" of product iterations, adding only those new features and capabilities that customers value most. This not only saves development effort and time, but also increases speed-to-market. Many leading companies maximize reuse by developing common features, parts, and specifications libraries that are centerpieces of new developer training. In some cases, the libraries are automated and fully integrated into product management systems and IT tools.

2. Just-in-time information and resources. These are bedrocks of traditional lean systems. In product development projects, just-in-time elements take a slightly different cast but ultimately achieve the same ends as they do in manufacturing. For example, several aerospace and industrial companies have begun to form "expert cells" of engineers who can do specialized design and development analytic work on an on-demand or just-in-time basis. Demand/pull lean planning techniques are used to ensure that work packages for development teams from these cells are accomplished on schedule, in turn allowing the core project teams to focus on risk mitigation and customer preferences. Implementation requires development of simple workload forecasts and demand-planning tools that match project demand with available functional skills. This helps companies avoid starving critical projects of necessary resources and unnecessarily deploying resources on less critical tasks.

3. Lean supplier integration. Just as suppliers are intimately involved in the early stages, these partners also collaborate in the detailed development and prelaunch phases. The goal is to identify the most critical product and process features, as well as risk mitigation parameters, while ensuring that supplier partners can meet these benchmarks at a high level of quality. If these so-called critical-to-quality parameters are identified early enough in the process — in the agile stage, for example — they can be moved down the supply chain to avoid costly quality problems and delays in the lean phases. Creating critical-to-quality task teams made up of core development groups and leading suppliers that apply state-of-the-art Six Sigma tools is one way to start developing this capability.

4. Responsive change-control system. Applying the third-generation approach not only dramatically reduces the number of changes that occur during the development life cycle, but also ensures that product alterations do not greatly slow down the overall process. This is accomplished by having a highly responsive change-control approach in place, backed by the appropriate internal systems and technology. That's a far cry from the norm in many companies, in which change management depends on outdated processes and systems and features ineffective queues for sign-off and approval — a flurry of red tape that erodes speed-to-market. By applying lean analysis and principles, some industrial companies have seen dramatic results: reductions of as much as 75 percent in the time they take to process and approve changes. Change management bottlenecks are eliminated, and time-to-launch targets are maintained. Companies can start by determining how much time elapses between change initiation and change implementation; if it's a month or more, they have an opportunity to cut it down.

Order Out of Chaos

Companies that implement the next-generation product development model enjoy significant returns, well beyond what they could expect with either the gated or the lean approach. However, it's not an easy process. It requires significant behavioral change for most companies, which alone makes rapid transformation unlikely. Success with the agile front-end approach is dependent on a highly collaborative organizational culture, reflecting the idea that most disruptive innovations come from outside the organization. To embed this culture and outpace competitors, companies must continuously scout, filter, and channel global sources of technology, capabilities, and solutions as well as recommendations from suppliers. Perhaps most important, companies need to understand that delivery of differentiated products requires a deep well of sophisticated customer knowledge. Product teams must spend substantial time in the field, observing customers using their products in real-life situations.

Many companies lack the skills, structures, metrics, and incentives to isolate market opportunities before they become obvious or to incubate and validate them before turning those opportunities over to a product development organization that can bring them to market effectively. To overcome these organizational weaknesses, executives must address decision rights and information flows with the goal of developing faster decision-making capabilities and mobilizing quickly to take advantage of new first-to-market opportunities. High-level metrics — for example, return on innovation investment, which measures the overall health of the product portfolio and pipeline — as well as project-level yardsticks that assess yield, value, and speed across the development life cycle should be adopted. Such carefully chosen metrics can improve transparency and accountability, enabling more educated decision making and trade-offs in the up-front agile iteration cycles.

Globalization has created scores of nimble competitors in every industry; as a result, the product development environment is too volatile for linear, standardized processes. In such a landscape, an approach that embraces the value of flexibility and unpredictability is needed to generate more stable and successful outcomes. Paradoxically, although gated processes are focused on linearity and order, they often result in chaos. In contrast, the agile model, driven by chaos and uncertainty at the front end, yields greater order at the latter stages of product development. It is the surest way to permanently increase product success rates and develop a much stronger, more sustainable position in the marketplace.

Author Profiles:

  • Barry Jaruzelski is a partner with Booz & Company in Florham Park, N.J., and is the global leader of the firm's innovation practice. He has spent more than 20 years working with high-tech and industrial clients on corporate and product strategy, product development efficiency and effectiveness, and the transformation of core innovation processes.
  • Richard Holman is a principal with Booz & Company based in Florham Park, N.J. He is a leader of the firm's innovation practice, specializing in fields with highly engineered products, such as aerospace, industrial, and high tech.
  • Omar Daud is a senior associate in Booz & Company's innovation practice based in Chicago. His consulting work focuses on product strategy, product development efficiency and effectiveness, and the transformation of core innovation processes for high-tech and industrial clients.
      Thanks to Barry Jaruzelski, Richard Holman, and Omar Daud / Booz & Company, Inc. / Strategy+Business
    • From Blank Page To Killer Cover Letter

      A résumé alone isn't always enough. Your cover letter is an opportunity for you to tell your potential employers explicitly how your experiences and skills match up to the job you're applying for—and a chance to explain any unusual history you might have.

      A successful cover letter is targeted and paints a clear picture why you are the best candidate for this role. After reading your letter, an evaluator should think: "this person's previous experiences make her a great candidate for this job, I want to learn more about her." You may be able to adapt a single cover letter to fit several similar jobs, but you should plan to write separate letters for jobs in different fields or different industries.

      Here is a step by step guide to writing the letter:


    • Date the letter.
    • Write a formal salutation to your contact, the recruiter, or—if you can't find a contact name—the department.

      Paragraph 1

      • State what position you're applying for.
      • Describe—briefly—who you are. If you're working, name your current position and any higher education degrees you hold. If you're in school, name the degree you're earning and your expected graduation date.
      • Explain why you want to work at the company in one to two sentences. Is it the culture? Is it the product they create? Is it the work you want to do? Give compelling reasons, and show that you've researched the company.
      • Write one sentence that highlights three experiences that make you a great candidate for this job. You can balance this between work experience, extracurricular leadership roles, volunteer roles, and academic work. Make sure you choose experiences that are most relevant to this role, so you'll hook the reader and convince him or her to read more.

      Paragraph 2

      • Explain (in one sentence) your most relevant experience. Then highlight the skills you gained in this experience and any major accomplishments or successes, and be concrete. Be relevant, too: if you're applying to be a financial analyst, there's no point in talking about your Adobe Photoshop skills here!
      • If you have an unusual background—if your most relevant experience seems not that relevant at all—tackle it head-on. Acknowledge that you have a less traditional background, and then tell your evaluator why that background and the skills and perspective you'll bring are actually a strength.

      Paragraph 3

      • Highlight your second relevant experience, and different applicable skills that you learned from this second experience.
      • Do not regurgitate skills you talked about previously. Highlight different abilities and experiences and link them to the job description.

      Paragraph 4

      • Highlight your third relevant experience. Use this paragraph to demonstrate your well-roundedness as a candidate. This is where relevant course work, student leadership activities, and extracurricular activities should most likely be discussed.
      • Make sure that you emphasize how the skills you have developed would make you the ideal person for this role.

      Closing Paragraph

      • Finish strongly by articulating one more time how the three experiences make you a great candidate for this role.
      • Remind them why you want to work at their company.
      • End with a line about how excited you are about the possibility to join and make an immediate impact on the company.

      As a variation on this, you can also choose three skills (for example: communications skills, web analytics, project management) instead of three experiences, and structure your letter around these. This can be a good exercise: it forces you to think about what skills you're bringing to the table, and not just what your job description was in the past.

      Do's and Don'ts

      A few do's and don'ts to keep you on track to creating a stellar cover letter. Once you've written the letter, look through this list to make sure nothing's missing!

      Do write a compelling first paragraph

      Do include your name and the position you are applying for

      Do highlight your education and work that is most relevant to this position

      Do show that you know the industry and what is expected of you in the position

      Do have someone edit for grammar and spelling errors

      Don't use the same general cover letter for every job

      Don't make the letter longer than a page

      Don't be abstract about your abilities: site specific examples of your successes

      Don't regurgitate your résumé

      Don't waste words—every sentence counts!


      Author: Amanda Pouchot

      Amanda is a PYP Co-Founder and currently oversees promoting PYP to the world. She previously worked in the Organization Practice at McKinsey and Company where she dedicated her time to the women's leadership development movement. She's most interested in helping all young people, especially women, become the best personal and professional self they can be. A California native and UC Berkeley 2008 graduate, when not focusing on PYP, Amanda can be found outside - exploring New York, playing flag football in Central Park or pick up basketball with friends.

      Thanks to Pretty Young Professional


    • Setting Sensible Targets For Your KPIs

      Target-setting is rife with worries like being achievable versus stretch, motivating people to pursue them, figuring out how to measure them, the consequences of missing them, how hard it will be to reach them.

      I'd like to share some ideas with you, about how to lessen the burden when you come face to face with worries like these.

      Idea #1: Use control charts to indisputably show actual performance compared to target.

      You haven't hit the target just because this month's performance measure value has hit the target. You don't have to wait until the end of the year to see if your performance measure has hit the target. Good targets are about ongoing capability, not one-hit wonders. Use a control chart and compare the mean line, which represents the current level of performance, with the target.

      Idea #2: Make sure your measure can be monitored at least 6 times within the target timeframe.

      Design your measure so you can calculate it as regularly as is feasible, and then set a target timeframe that accommodates frequent enough feedback to increase your chances of staying on track. For example, monitor your measure weekly or monthly for a 1 to 2 year target timeframe. Yes, sometimes you just can't get data this frequently, but that doesn't change the fact that a single point of data says nothing. Is it worth setting a target that you cannot honestly know is achieved?

      Idea #3: Don't strike a balance between achievable and stretch – do both.

      What I've learned is that it takes practice and confidence-building to achieve a target or goal. Why not set at least two or three targets for any single performance measure? The first one is shorter term and not very challenging, for the purpose of building target-accomplishing momentum. The interim target is an opportunity to build more capability and confidence to stretch. The last one is the stretchy target, which you might have no idea of how to reach at this point in time, but be in a better position to know after you've achieved the interim target.

      Idea #4: Use vivid and specific language to describe the world after the target is accomplished.

      Numbers alone are hardly enough to motivate anyone. So handing a team a performance measure + target value + timeframe won't likely be enough motivation. Have you ever tried telling the story about what the world (or at least your part of it) is like after the target is met? Colour, sound, movement, emotion, expression, behaviour, shape, rhythm and all those other sensory experiences emblazon the meaning of the target into the minds and hearts of those setting out to achieve it. Motivation from within is the best kind.

      Idea #5: Keep one eye on the target, and one eye on the bigger picture.

      Even if you had enough foresight to explore the unintended consequences of achieving your target before you locked it into your plan, the world will still change later on. I once heard a story about a railway organisation that prioritised on-time running over all other performance outcomes. One day, due to the train running late, the driver omitted an important safety check to save time. The train derailed because of a braking problem that the safety check would have picked up. Every now and then, ask yourself "is this target still a good idea?".

      Idea #6: Give yourself permission to learn by not achieving targets.

      If you achieve every target you ever set, then you aren't challenging yourself enough. You're staying inside your comfort zone, inside of what you know works, what you know you can accomplish. That's not what improvement is about. There is no learning without failing, no improvement without learning. If you want to jump over a creek without getting both feet wet, then don't aim for the far bank of the creek. Aim for a metre or so beyond it. That way, maybe only one foot will get wet. Somehow, our strides are longer when our eyes focus further ahead.

      Idea #7: Do some preliminary scoping of "how-to" before locking in the target.

      If you and your team do not yet possess the target setting and achieving prowess of an Olympic athlete, then avoid setting any kind of target without first exploring a range of ideas of how you might go about achieving it. A very innovative manager I know used simulation software to model his business processes (freight). He made changes in the model to simulate changes like more equipment, different procedures, changing policies. So before he spent a single dollar, he got a good idea about which strategies would best hit the targets. He saved his company many millions of dollars of investment in new trains that weren't needed.

      Write down the steps of how you currently set targets. Draw little red stars next to the steps that have problems. Then use the ideas above to write a new target setting process, that could be a vast improvement for you.

      Thanks to Stacey Barr / Stacey Barr - Measure Up

      Workplace Relationships: Men Have Drama Too

      A lot of people mistakenly believe that only women have drama.  I often jokingly say that my next book is going to be titled, "Men have Drama Too."   Whether it's a sports figure, an actor or politician, there are literally hundreds of examples of men creating drama or participating in drama.

      For example, here is a YouTube video of the Top 10 Bad Sportsmanship Moments, and 9 of those are examples of highly paid professional men, punching, kicking, screaming and throwing tantrums. What's worse, is that these men get paid huge sums of money to play hockey, baseball, basketball, or football.  We want our sports heroes to be role models and we continue to be disappointed.

      One reason we continue to be surprised and disappointed is because we put hem on a pedestal. We make up stories about people who have a special talent or loads of money or fame and then when they show us they are weak in other areas, we throw stones at them.

      The fact is,  DRAMA is a human condition and not particular to women having cat fights in the office.  Drama is also a loss of self-control; an excuse for not honoring sacred commitments, a justification for violence, and game playing at the expense of tax payers.

      Here are just a few examples.

      See if you can connect the dots to see how these decisions, ways of living, or actions created drama for the individual or for those directly connected to them, drama meaning, any obstacle to peace or prosperity.

      Arnold Schwarzenegger
      It was recently revealed that Arnold Schwarzenegger had a child with one of his household staff and kept it hidden for nearly 14 years.  Perhaps it was exciting living with a secret, but eventually that secret became drama when the news erupted.  This revelation has broken up his marriage and has ruined his chances for any future career in politics, after all who would trust him now?

      John Edwards
      John Edwards ran his presidential campaign on the platform of morality and fast forward a few years and John Edwards may soon be indicted for using campaign funds to cover up his affair with a staffer. Thank goodness he was not elected president. Talk about drama!  This extramarital affair was an obstacle to his peace as it broke up his marriage as well as to his prosperity as his career is probably completely derailed to the fact that he lied about this affair.

      Kobe Bryant
      Los Angeles Lakers star Kobe Bryant was fined $100,000 by the NBA for a gay slur. Let's face it: The fine probably didn't hurt his prosperity in the financial sense, however this is yet another blemish on his record and could definitely hurt his reputation.  What is disappointing is that our sports figures are supposed to be role models, yet they continue to exhibit character flaws and lack of self-discipline.  At the same time,  part of the problem is that we put these individuals on a pedestal instead of recognizing they also have their challenges.

      What I do know about drama is that any pattern that keeps getting in your way will eventually become the obstacle to your peace or prosperity somewhere in the future.

      Charlie Sheen
      People seem to love Charlie because he is congruent.  Unlike Jim Edwards or Arnold Schwarzenegger, Charlie has never tried to lead people to believe he was anything other than who he portrays in his character in Two and a Half Men.  In addition, the standards are different for Hollywood movie stars than they are for sports heroes or politicians.What is disturbing is to see someone who is  so blessed financially, struggle with self-control and addiction.  It doesn't take a psychologist to see that Charlie's drama and his denial  is an obstacle to peace.

      Will his antics hurt his prosperity?

      Charlie Sheen was eventually fired from his show, Two and a Half Men. Losing this job is an obstacle to his prosperity as he was earning a million per episode.

      Donald Trump
      Even in the business world we see powerful men playing drama games and acting like the persecutor on the Drama Triangle. Take Donald Trump, for example, who wanted to see President Obama's complete birth certificate.

      After the certificate was publicized he still was not convinced and on he pushed, taking credit for his power to make the president comply.

      This tirade was a time waster, just on a bigger scale than what most of us see on a daily basis.  No doubt a lot of money and resources were also wasted, in the end Donald was the butt of the joke at a political dinner, when he was roasted by Seth Myers.  (It looked to me like he lost a little peace at this dinner.)

      The point is, all of us, (men and women)l have some drama. All  of us participate in drama.
      Drama is not particular to any one type of career, or professional.  We are all in the boat together.

      Don't put others on a pedestal, even if they are a sports hero, a business giant, or a movie star or your boss.  Just because they have a title, doesn't mean they are drama free.  Just because they make lots of money, or enjoy the benefits of fame doesn't mean they don't have relationship problems or emotional issues.

      Drama doesn't need to be the order of the day. Get off of the Drama Triangle. Get clear about who you are and what you are committed to, and then make your decisions based on who you are, not on what everyone else does. You are the one who has dominion over your life.  Let your light shine and be the star, the hero, and the authority of your own life.

      Thanks to Stop Workplace Drama / ICARE Presentations


      Retaining, Recruiting Top Talent Key Priorities For Employers In 2011

      NEW YORK--(BUSINESS WIRE)-- With the employment outlook improving, employers are focusing their compensation programs on hiring and retaining top talent, according to a survey released today by Buck Consultants, A Xerox Company (NYSE: XRX).

      Employers are using hiring bonuses to attract talent and retention bonuses to keep them. Buck's study, " Reviving and Inspiring the Workforce: 2011 Compensation Trends Survey," found that nearly two-thirds (63%) of organizations report using hiring bonuses and 41 percent use or expect to implement retention bonuses.

      The survey included a range of employee levels including; executives, directors, managers, other exempt employees, and nonexempt employees.

      For those employees participating in a bonus program, the study found that eight out of every 10 employees can expect to receive a payout in 2011. Forty-four percent of employers who responded to the survey expect to pay bonuses that are at least five percent larger than last year.

      Survey respondents also reported using the following strategies to engage their workforces:

      • New career development opportunities (41%)
      • Market pay adjustments (30%)
      • Larger base pay increases (24%)
      • More non-cash recognition (18%)

      The survey also found an increase in the use of employee referral bonuses in the past six months, to 66 percent, up from 59 percent in mid-2010.

      "During the economic downturn, many employers reduced staff and asked remaining employees to do more with less. As the job market improves, these organizations are using tactics such as employee referral bonus programs to not only attract proven performers, but also help retain the employees who make referrals," said Kathi Myers, director at Buck Consultants. "Involvement in the hiring process engages employees and strengthens their ties to the organization."

      As employers become more confident in the improving economic environment, pay freezes are thawing and median pay increases are expected to rise to three percent this year – similar to levels seen immediately prior to the recession, and up from 2.7 percent in mid-2010 and 2.2 percent at the beginning of 2010.

      Only nine percent of employers still have pay freezes in place, down from 48 percent in mid-2010 and 64 percent at the start of 2010. In fact, 75 percent of respondents report taking no special actions such as furloughs, layoffs, hiring freezes or bonus suspensions in the last 18 months to control or reduce labor costs. Instead, dollars are now being approved and invested in programs that will produce the best return – the attraction and retention of key talent.

      About the Survey

      Buck Consultants completed its survey in February. The survey includes responses from more than 100 employers, representing virtually every sector of the U.S. economy.

      Buck's survey report, "Reviving and Inspiring the Workforce: 2011 Compensation Trends Survey," is available at no cost to the media by contacting Ed Gadowski at +1-201-902-2825. It is available at no cost to other interested parties from Buck's Global Survey Resources, 50 Fremont Street, 12th Floor, San Francisco, CA 94105. Telephone 1-800-887-0509. It can also be ordered online at

      About Buck Consultants

      Buck Consultants is a leader in human resource and benefits consulting with more than 1,500 professionals worldwide. Founded in 1916 to advise clients in establishing and funding some of the nation's first public and private retirement programs, Buck is an innovator in the areas of retirement benefits, health and welfare programs, talent and human resource management, compensation, and employee communication. News and other information about Buck Consultants are available at Buck is a wholly owned subsidiary of ACS, A Xerox Company.

      About Xerox

      Xerox Corporation is a $22 billion leading global enterprise for business process and document management. Through its broad portfolio of technology and services, Xerox provides the essential back-office support that clears the way for clients to focus on what they do best: their real business. Headquartered in Norwalk, Conn., Xerox provides leading-edge document technology, services, software and genuine Xerox supplies for graphic communication and office printing environments of any size. Through ACS, A Xerox Company, which Xerox acquired in February 2010, Xerox also offers extensive business process outsourcing and IT outsourcing services, including data processing, HR benefits management, finance support, and customer relationship management services for commercial and government organizations worldwide. The 134,000 people of Xerox serve clients in more than 160 countries. For more information, visit,, or For investor information, visit

      Note: Connect with Buck Consultants on Facebook or Twitter. To receive RSS news feeds, visit For open commentary, industry perspectives and views from events visit,,,,,,

      XEROX®, XEROX and Design® are trademarks of Xerox Corporation in the United States and/or other countries.

      Thanks to HR Hub Newletter


      Communication And Your Business

      Without effective, intentional communication, your company won't thrive. Communication consists of three parts:

      1. Oral (Verbal)
      2. Non-Verbal
      3. Written

      Each of these is necessary and they work together in concert. Your communication is consistent from the CEO to the lowest levels of your organization. Without consistent, clear communication you will encounter a multitude of problems within your company. Inconsistent messaging and communication will consequently cause perception problems outside. Do you really want negative publicity running around the country? Here is an example of what I mean. It's a bit long, but I believe it's important to tell the whole story so you can see all the mistakes that were made.

      Chelsea has just received her bachelor's degree. She had an internship with a prominent firm in NYC the summer following her sophomore year of school. They liked her so much they invited her back the summer following her junior year. Before she went back to school to complete her senior year she was told by everyone she worked for (including HR) that they wanted to hire her after she graduated, and that she was as good as hired. They told her to reach out early this year, which she did.

      The HR person she had dealt with during her internships (Mary) had been promoted and told Chelsea to contact the person who had backfilled her position (Karen). Mary said she'd let Karen know to expect to hear from Chelsea. Chelsea proceeded to email Karen to let her know that she still wanted to come to work for the company and would like to set up an interview. It took three weeks for Karen to respond to the emails (Chelsea sent two more over this time).

      After finally hearing back from Karen, Chelsea said that she could be available any Monday or Friday (she was still in school) for an interview. Karen just told her to let her know when she'd be in the city and they'd schedule time to interview. Chelsea made it clear that any Monday or Friday would work. Karen still wouldn't commit to an appointment to see Chelsea.

      This was mid March.

      In mid April Chelsea emailed Karen again and then called her three days later. There was no response to either communication. In addition she left a voicemail for Mary (the HR person to hire her for the first internship) to let her know she hadn't been able to get anywhere with Karen for over a month. Mary got right back to her and told her that Karen was out of the office and would be back at the end of the week.

      On Sunday night at 8 p.m. Chelsea received an email from Karen asking her if she could come in to interview with her the next day at 3 p.m.. Chelsea, still very interested in working for this company, rearranged some items and agreed to the interview.

      Chelsea met with Karen the following afternoon as planned. This was the first time there was any verbal contact between them. Karen proceeded to tell Chelsea that she could probably tell her more about the position and culture than she was aware of, as she'd only been with the company for a few months.

      At the conclusion of the interview Karen informed Chelsea that she was to meet with two account managers for one of the accounts she'd might be working with, which she did. Chelsea was very concerned about her meeting with the two account managers because, not having been informed of this, she was unable to prepare for the second interview. She did the best she could with no preparation and powered through. As soon as Chelsea got home she emailed thank-you notes to all three people she met with and also hand-wrote notes and mailed them.

      Three weeks later Chelsea had still not received feedback of any kind from Karen and sent her an email. Another week went by with no communication from Karen. She emailed Karen again and finally heard back five days later. Almost five weeks had passed between the interview and feedback. Karen said there were no positions they were hiring for (contradictory to what she had been told) at this time but to let her know when she'd be back in New York in case something else came up. Chelsea had made it perfectly clear in one of her prior emails, in which the thread was included, that she would be back in New York full time by May 15. Even so she emailed Karen when she got back to town. Again, no response.

      Chelsea was concerned by both Karen's lack and quality of responsiveness and assumed that this meant she'd blown the interview and they were no longer interested. Her father advised her to contact Mary about what happened and Mary responded that Chelsea needed to do research and be more prepared when she was to meet with the account managers of an account. Chelsea emailed her back immediately and explained that Karen didn't inform her of the second interview until the end of their interview. Had she known in advance she would have prepared adequately for the second meeting.

      Five days later (Sunday night, May 22) Karen sent an email apologizing for not being responsive and asked if Chelsea was available for a call the next morning at 11. Karen asked Chelsea if she could come back into the office on May 24 and meet with a different account team. Needless to say, she was prepared and Karen sent her email quickly asking for 3 references.

      I spoke to Chelsea on May 25 and she told me that she had lost almost all interest in the job and was now keen on looking into other options. She felt that everything she had been told about their interest in hiring her was bunk, and told me she's considering taking the job if they make her the offer but will continue to look for something else.

      I'm sure many of you are horrified at this fiasco. I'm shaking my head as I'm writing this because it distresses me so. It's just so unnecessary to have something like this happen, but it happens all the time. Let me list all the errors:

      1. Karen's total lack of response from the initial contact until the request for references two months later is totally unprofessional and disrespectful.
      2. Karen never once picked up the phone to call Chelsea to have even the most basic of conversations. Every communication was by email. I know everyone is busy. I may be old school, but I firmly believe that we must maintain the art of oral communication. There are just too many things that can be misinterpreted in email as it's very hard to convey emotion effectively. That isn't to say that I don't believe there's a time and place for email. I use it all the time, but not when oral communication is warranted.
      3. Karen admitting to Chelsea that she knew less about the company than Chelsea did. Really!? What was she thinking? What was the company thinking? How do you hire any new employee and not make sure they have correct and consistent messaging about you?
      4. Karen's lack of interest, professionalism, cognizance, etc. that she wouldn't set an interview with Chelsea, even though she'd been told any Monday or Friday would work. Chelsea should have made a more concerted effort to actually get Karen to set a time to meet. She should have given Karen 2-3 specific dates that would work for her. Maybe this would have gotten Karen to commit to an interview, though I'm not at all convinced it would have made any difference.
      5. Karen emailing Chelsea on Sunday nights after 8 p.m. to see if she would be available the following day. Now I get that things can happen at the last minute, periodically. This should not be a usual practice. Also, Karen should have had the common sense to pick up the phone, call Chelsea, and tell her that she knew it was last minute and make the request for her to come in the following day. She could have told her that the time had gotten away from her or that she had heard back from the team late or even that she'd dropped the ball. Chelsea would have much greater respect for Karen if she'd just made the time to speak to her and establish a relationship.
      6. Not telling Chelsea about the 2nd interview on that first day in the office. Chelsea now knows that she needs to ask anyone scheduling an interview if she will be meeting with anyone else that day. Yes, Karen dropped the ball, but as a candidate she needed to be responsible for this.
      7. Karen getting back to Chelsea after five weeks and telling her there were no positions rather than just having enough respect for Chelsea to be honest about what had happened.
      8. I was told that this company doesn't like to pay a lot for these entry-level employees. That may be, but this candidate has already lost interest. Remember, time is money.
      9. Chelsea's father told me that this is common at this company and they have trouble getting the right people and keeping them. He knows this because the Sr Executive VP is an old friend.
      10. A promise to hire someone is not an offer. Chelsea knows this now.

      I've looked at just one example of how lack of communication (oral, written, and non-verbal) can significantly affect your ability to attract and hire the best people. I hope I've conveyed the importance of effective communication in all areas of business and the possible consequences of ineffective communication.

      Thanks to ERE Media


      Job Control And Employee Well Being

      In the U.S. they call it face management. This is to describe those managers who think that they need to see your face or at least to be in or near your space, so as to ensure that you are doing your work.

      Of course, most would consider that style to be too controlling.   However, more subtle variations of this approach still abound, and indeed in some sectors, the variations are not so subtle.

      In recent years, many organisations have increasingly introduced employee well being or "wellness"   programmes.   One method can be to focus on the more physical health aspects, providing nutritional advice, offering free gym access or introducing methods to encourage staff to be more conscious of calorie intake etc.

      A further approach is to dig a little deeper and looking at the psychology of what is happening in the workplace.   For example, research shows that the employee responds favourably if provided with a greater control over his/her job.

      An extensive review of the research literature in this area  points out that there is convincing evidence that job control predicts lower stress related outcomes – both in the psychological sense (e.g. anxiety, burnout) as well as with physical symptoms (e.g. coronary heart disease).

      Job satisfaction as an outcome of job control has not been as widely investigated as has well-being. However, evidence has consistently emerged to show that job control predicts job satisfaction.

      These are recessionary days, and some may feel that they have less time and resources to consider aspects such as employee job control and well being.  However, in certain respects, it's because times are more difficult that reflecting on this and then creating appropriate programmes could become more important than ever.

      For example, here are some considerations:

      Management Style

      Does our approach suit the changed working environment that we are now living in?


      People are already coming into work from an uncertain world.  Are we doing enough to make sure that our communications with employees don't add to their uncertainty but instead are constant and balanced and that people know what's expected of them?.


      With pay reductions and other cuts happening regularly across our workforce, are we doing enough to ensure that such outcomes for employees are counter balanced.   For example…..

      Do employees have a reasonable work: life balance?

      Indeed I was personally involved in research, which looked at why having a work: life balance through flexible working has positive outcomes e.g.  the reduction of absenteeism and staff turnover. That study found that Flexible working is linked with higher levels of well-being.

      This link can be explained by the relationship between Flexible working and againjob control.

      So with the job control/wellbeing link, it means that Flexible working allows employees to exercise greater control over their working day (e.g. working hours, place of work etc.).

      Workplace Atmosphere

      Is there a good feeling in the workplace?  As a result of the shock of recession, was it nonetheless a good idea to reduce the social spend or to even cancel the Christmas party?  Do we regularly sample the views of employees via a service like survey monkey?

      To conclude,  many of the well-being and job control considerations are common sense ideas and are relatively inexpensive to implement and retain.  Indeed, once we're used to that "recession shock", then what can we re-instigate that used to be there?.

      That much of this in the overall sense is inexpensive is especially true when compared with the likely negative outcomes from doing nothing can be i.e. a rise in absenteeism,  higher job turnover, perhaps of vital skills – all connecting to a loss of output.

      A key question is then…what do you think?

      Thanks to Ciarán Rowsome / Bloggertone


      3 Ways That New Era Leaders Can Enable Dreams Of Others

      New Era Leaders symbolically represent a tipping point of a leadership style positively influenced, in part, by contrarian acts exhibited by endless examples of selfish, unethical choices by executives, politicians and even athletes. Such examples bleed into our life and leave us needing something deeper from leaders in our world.

      New Era Leaders learn from this social occurrence and change how they give something deeper to those they inspire to contribute.

      How? New Era Leaders inspire others to contribute by enabling dreams of others.

      1. Refresh your people practices. A vice president of human resources once told me, "We aren't here to help people self-actualize." This is the epitome of an outdated belief in the relationship between a company and its employees. Today, employees long for meaning in their work. This includes helping employees become better people in life while at work. Enable their dreams by refreshing these people practices.

      • Pay for classes that satisfy interests of your employees and bring them happiness. Don't limit tuition reimbursement to classes that cover only what your company does.
      • Vineet Nayar advocates in his book "Employees First, Customers Second: Turning Conventional Management Upside Down" to open up your 360-degree review. This means making results available to everyone in the organization to increase belief in the assessment. Take this a step further: Let nonmanagers participate in the process. Let them learn from peers and from upper management what they are doing well and what needs to improve. This type of feedback can increase employee self-awareness, helping inform their thoughts of themselves and actions.

      2. Alter interaction. Enabling dreams requires that you switch up how you interact with your team, volunteers or community. New Era Leaders ruthlessly make room in their calendar to connect face to face, virtually or physically, with their team.

      Alter the interaction of your employees, too. Give up the usual-suspects approach to putting the same people on high-profile projects. These projects often are prestigious. Make them more about contribution and matching talent to a project, then give employees the opportunity to interact with others in a new way.

      3. Help employees have great lives. Employees at all levels spend much of their daily lives at work. I think employers need to create a relationship that isn't merely a transaction to pay for services. It's one that recognizes the opportunity costs of working and not having the time to pursue actions that help employees have great lives.

      Google thinks it should make it easy for employees to take care of routine errands from work. This is a gift of time that allows employees to do something meaningful: dream-worthy.

      If there's one key message I want to leave with you, it's this: New Era Leaders place greater importance on helping employees achieve their dreams and greatness. Any one of us will do great things when we know what we do matters and makes a difference. Customers are more satisfied, and work becomes more enjoyable.


      This post is by Shawn Murphy, president of Achieved Strategies and a learning and organizational development consultant. He is @shawmu on Twitter and can also be found on LinkedIn.

      Thanks to SmartBlog On Leadership


      How To Manage Risks Of Social Media

      Embarrassing photos were posted on your organization's Facebook page. Your agency's Twitter page featured a rant humiliating the head of your department. How did this happen? What could have been done to avoid it? If you are in charge of your organization's risk management, social media present ever-evolving challenges. Legal expert Charles Leitch addressed such challenges during his "Realistic Supervision of Technology and Social Media" presentation at the Public Risk Management Association's annual meeting.

      Leitch said organizations must accept that employees use social media, so they must focus on promoting best practices that protect employees and the organization from embarrassment. Leitch outlined common social media issues that risk managers should consider addressing.

      • Smartphone ownership. Providing a subsidy for employees who use a personal phone for work has become commonplace, but Leitch said the growth of social media makes that risky. Why? Say, a problem arises out of something posted on your organization's Twitter account. Does your organization have the right to search or seize an employee's phone to see whether he or she created the post? Leitch suggested owning and distributing work phones to eliminate the gray area of whether your organization has access to a device.
      • Protecting relationships. Many workers opt to connect with clients, vendors and constituents via social media. Is that a good idea? In the public sector, such a move is rife with risk because even the strongest professional relationship can be damaged by social media missteps. Sometimes, a misstep isn't even the fault of an employee but rather a contact with whom he or she is "friends." Even within an organization, the practice of connecting via social media presents problems. Did that employee truly want to accept a friend request from his boss? Or did he accept it because declining would make things awkward around the office? Either way, the result is that the boss now has access to the employee's social media life — for better or worse.
      • Proper training. Developing — and updating — social media guidelines can be a tall task for some organizations, but it is not enough. Employers have to regularly train employees on adherence to those guidelines. With the rapid evolution of social media, "regularly" might mean quarterly instead of annually. Otherwise, any employee in trouble because of social media can put up a defense by claiming ignorance.

      Leitch also outlined basic concepts that risk managers should remember in dealing with social media.

      • Forget a ban. Simply banning social media use at the office will not work because smartphones allow employees to use social media without your knowledge. It is better to encourage good social media habits, such as usage only during lunch or another official break in the workday.
      • Understand the landscape. Remember that social media comprise more than Facebook, LinkedIn and Twitter. Small social media forums can be as damaging, so be sure your social media guidelines account for all forums.
      • Keep it simple. If your organization is only getting started with social media, keep it simple, Leitch said. Start with a website, and explore the use of Twitter for emergency notification.

      The Limits Of Long-Distance Management

      Whether running overseas operations or monitoring investments across the world, we have become dependent on our high-tech communication tools to manage remotely. Volcanic ash grounds the flight? No problem — Skype your way through the meeting. Board call at an inconvenient time? Grab your headset and take it from your car. In today's fast-paced world, managers receive real-time information on company performance 24/7/365. It all works so efficiently.

      That is, until it doesn't. Until performance starts to slip. A missed forecast here, a supply chain surprise there. When a company begins to underperform, the questions mount. Tension ratchets up. Demand for data intensifies and even the most talented managers are baffled that nobody saw it coming.

      As an advisor and interim CEO for troubled companies, I have learned that the way to effectively manage performance from a distance — to see it coming — is to get on site, up close, and extremely personal. Spending significant time in person delivers insights, forces focus, and facilitates difficult decisions. It is the only way to understand what is truly happening in a business and how to turn things around. What follows are a few examples where these lessons were driven home to me.

      Nothing focuses the mind like an idle plant. As the new vice president of operations for an automotive parts manufacturing business, I arrived at our Mexican plant when it was eerily quiet at midday. I heard the hiss of compressed air bleeding from the lines and the intermittent clicking of electrical contacts before meeting workers who were waiting idly in the cafeteria for critical components to arrive. Reassurances I had received the previous week from our U.S.-based materials manager about how we were solving component shortage problems no longer seemed comforting as I tried to explain the situation to staff and asked them to stay motivated.

      To share the local tension, I called the materials manager in his office 2,000 miles away and suggested he get on a plane. After working two weeks in the plant and with local officials, he came to understand the impact of historical scheduling processes on this new, remote plant. Once he lived it, the problems were obvious, and a solution was quick to follow. Theoretically, that all could have been resolved by phone, but theory gets complicated, and patience wears thin across borders, cultures, and languages. He had to be there.

      Even the best phones don't pick up body language. Despite advances in communication technologies, they still obscure our senses and often deaden our intuitions. The complexity of team dynamics — and the need to observe them firsthand — was reinforced when I later became CEO of that auto parts company. The general manager of our Alabama subsidiary had been a hero for averting bankruptcy at the division many years before. But the improvement had leveled off, and despite the transfer of several historically profitable lines into his operation, performance was declining. Material was piling up, quality was slipping, and customers were starting to grumble. Only by spending time on site with the GM and his staff did I realize the core problem: He was overloaded and not able to delegate.

      The GM had rescued the company by controlling the details, but the operation had grown too big for him to manage alone. In one-on-one sessions, staff members acknowledged the inefficiencies but complained of a culture where it was difficult to get things done. In meetings I noticed the body language: No one made a move without the GM's approval or advance support. His gruff, authoritarian style, which had been effective in a crisis, was no longer adequate or appropriate. Several months later, after a management change and a lot of long days by the local team, the operation was humming again with activities coordinated among departments. It took being on site to understand the problem and implement a solution.

      "De-imperialized" visits enable real listening. Much of my work today is for private equity groups, which include some of the brightest people I know. I am amazed at how well they understand industries and many facets of company operations. But they are also some of the busiest people I know, and this often leads to sterile update calls and board meetings where they review template-formatted numbers, which may not be the true drivers of the particular business. Their off-the-cuff ideas or hypotheses are frequently acted on as though they are purposeful instructions. (These are the company's owners after all.) Rare company visits become events with nervous managers and employees on high alert during rehearsed presentations and orchestrated tours.

      I recently served as the interim CEO of a forest products company owned by a U.S. private equity firm. In my first briefings at headquarters, there was much discussion about the strategic importance of wood supply and the criticality of maintaining strong vendor relationships. When the owners visited the offshore plant with me, they were shocked to see the storage lot full of logs and the supplemental rented space across the street overflowing, as trucks continued to arrive with even more wood. It took that visual — along with the plant manager's candor about the oversupply of wood rotting in storage — to make it clear to the owners that their well-intended input was causing significant operating problems.

      The shrewdest private equity groups realize that the way for them to get real insights into their companies and to substantively contribute is to "de-imperialize" their visits. They ask for formal reports but get on site for informal interactions. They recognize that familiarity leads to comfort, which yields informality in meetings so real information can flow. Their exchanges become substantive and useful to their management teams, and they in turn get a deeper understanding of the business themselves.

      You can't look someone in the eye while reading your BlackBerry. I am all for multitasking, but I've seen countless examples of ownership visits to portfolio companies interrupted by urgent phone calls or emails on unrelated matters. The interruption knocks the management team members off focus and sends a message that they are not important. No one will complain, but morale takes a hit. The reason to visit is to actually be there, absorbing not just what is shown but also the sights, sounds, culture, and conversations that can only take place in person. We know this intuitively, but too often forget when the device buzzes. Home office checks should not be impromptu but planned as part of the visit.

      Face-to-face time at a company's operations accomplishes a number of things. It yields multidimensional data to make the right decisions, data that is otherwise inaccessible. It builds trust and helps forge a sense of partnership. In the long run, it saves both time and money. Conference calls, videoconferencing, email, instant messaging are tools that improve efficiency but only if we recognize their limitations. Business remains a human enterprise. For an owner or manager, seeing operations up close and in person is critical to success.

      - Jesse Hermann, MBA '88, is a senior director at Zolfo Cooper, a financial advisory and interim management firm.

      Thanks to Stanford Business Magazine


      Investor Intuition Is Right: Corporate Leadership And Management Turnover Directly Affect Startup Success

      STANFORD GRADUATE SCHOOL OF BUSINESS—Venture capitalists and other investors routinely gamble on which start-up companies warrant their investment. Complex models and detailed algorithms can be used to evaluate an organization's financial position, market potential, and level of quantifiable risk. However, when it comes to assessing the effect of the founders and the senior management team on a venture's likelihood of success, investors are forced to rely on little more than their experience, intuition, and general industry rules of thumb.

      Leadership research, which can help investors predict the effect of top management on company performance, has traditionally focused on the role of the individual leader. "But anybody who has spent time in organizations knows that success is really driven by the team," said Charles O'Reilly, the Frank E. Buck Professor of Management. "No one had compared the impact of the founding and top management teams," added Christine Beckman, PhD '99, coauthor of the study. Other gaps in the existing research literature include the effect of team composition (prior company affiliations and functional diversity) and management turnover on a company's success.

      To address these open issues and potentially provide investors with more definitive information to assess a startup's management team, O'Reilly and Beckman, along with Diane Burton, another PhD from Stanford, studied how the composition and turnover of founding and senior management teams impact company success. The results confirmed that founding and senior management teams with a variety of prior company affiliations and broad functional diversity tend to be more successful more quickly.

      Beckman, Burton, and O'Reilly also discovered that turnover, specifically additions to the top management team and the exit of the founder, increases the likelihood that a company will achieve an initial public offering (IPO). The researchers determined success by the company's ability to attract venture capital funding and complete an IPO.

      The results were based on information collected in an 8-year-old longitudinal study of over 170 Silicon Valley startups. This study is known as the Stanford Project on Emerging Companies (SPEC), conducted between 1994 and 2002 by James Baron, now a professor at the Yale School of Management, and Michael Hannan, the StrataCom Professor of Management at the GSB.

      "SPEC was a heroic effort to collect data on almost 200 startups here in Silicon Valley," said O'Reilly. "One of the big issues with the study of startups is that researchers typically collect data at a single point in timeso you never know what the real dynamics are. You don't know what causality looks like. … In the SPEC project, they collected longitudinal data and followed these companies for [for eight years]. They created a unique data set that allows the careful unpacking of causality in ways that most studies don't." SPEC also compiled detailed information about the founding team, the senior management team, and changes to team composition over time. "Having detailed data on founding teams is rare since this information is usually not publicly available," added Beckman.

      While Baron, Hannan, and Burton, who worked with them on the original study, used the SPEC data to demonstrate that the organizational human resource blueprint imposed on an organization by management has important implications on future success, Beckman, Burton, and O'Reilly used it to test a set of hypotheses related to the effect of founders and top management on a company's likelihood of attracting funding and going public.

      First, they studied diversity within the senior team. Existing research lays out "two very different hypotheses about whether or not diversity is a good thing," explained O'Reilly. "On the one hand, you can propose that diverse teams will bring more perspectives and different sets of information together and so should do a better job of solving problems and being creative. But you can also come up with the exact opposite hypothesis. In the face of diversity people get politically correct. They don't want to offend others, they emphasize the things that are common rather than the things that are different, and they don't know how to interact with each other particularly well. So there's a large body of literature that shows that heterogeneity of teams actually leads to less-effective group process."

      The new study found evidence that "putting together teams that are diverse with respect to both functional diversity and prior company experience is a good thing," O'Reilly said. "It's not just about who knows what, but where they come from," added Beckman. Companies with diverse founding and senior management teams had a higher likelihood than other firms of getting venture capital and going public.

      The study also examined turnover. "You can argue that turnover is bad because it takes time for new people to adjust, which slows down company progress. The fact that people are leaving may also reflect the fact that there is conflict in the team," said O'Reilly. However, turnover can be positive "as start-up organizations begin to grow and require people that have different perspectives and more experience to help them succeed," he added. To better understand these effects and eliminate the ambiguity associated with the results of previous research, the new study explicitly divided turnover into entrances and exits.

      Surprisingly, research showed that the departure of the founder significantly increased the probability that a firm would go public, O'Reilly said. He speculated that "founders are often people who have a great idea and the passion to begin to build a company. However, they aren't necessarily the people who have the skills to continue managing a firm, especially in VC-funded companies." Beckman said, "This also speaks to the difficulty that some founders have in letting go. Sometimes it can be harder for firms to change and grow if the founder continues to be the one at the helm."

      In contrast, when other team members leave, they reduce the probability of an IPO. Potentially, O'Reilly hypothesized, because their departure "reflects disagreements about the future direction of the company, which can lead to a negative outcome."

      Bringing in new people to the organization increased success, the study found. "As the firm gets bigger, you need more people with different experiences. But you don't necessarily want to push other people out," O'Reilly explained. "This suggests that leaders have to manage the process pretty carefully so that people who were involved in the beginning understand that they're important, but that the company also needs to bring in other people" to support its evolution and growth.

      Reflecting on the results of the study, O'Reilly admitted that the takeaways "are largely consistent with the common sense wisdom of venture capitalists." However, he added, "From a research standpoint it has reduced some of the previous ambiguities around the effect of turnover, the effect of the founder, and the effect of team composition. It is a much more careful study and gets the causality straight in ways that previous research hasn't."

      Recognizing a wealth of information still to be studied within the SPEC data, Beckman and Burton have initiated additional research projects to help investors and executives further understand leadership dynamics and their effect on the success of young startups.

      Related Information

      "Early Team: The Impact of Team Demography on VC Financing and Going Public," Christine M. Beckman, M. Diane Burton, and Charles O'Reilly, Journal of Business Venturing, 2006.

      "Organizational Blueprints for Success in High-Tech Start-Ups: Lessons from the Stanford Project on Emerging Companies," James N. Baron and Michel T. Hannan, California Management Review, 2002.

      "The Influence of Founding Team Company Affiliations on Firm Behavior," C. M. Beckman, Academy of Management Journal, 2006.

      "Leaving a Legacy: Position Imprints and Successor Turnover in Young Firms," M. D. Burton and C. M. Beckman, American Sociological Review, 2007.

      "Founding the Future: The Evolution of Top Management Teams from Founding to IPO," M. D. Burton and C. M. Beckman, Organization Science, forthcoming.

      Thanks to Lyn Denend / Stanford Business Magazine


      Don’t Be Too Specialized If You Want A Top Level Management Job

      STANFORD GRADUATE SCHOOL OF BUSINESS — Aiming for the C-suite? You're more likely to get there if you're a generalist.

      Researching the question of just who is likely to land a C-level job (CEO, COO, CFO) and why, Stanford Graduate School of Business labor economist Edward P. Lazear has found that generalists, who have knowledge in a broad range of areas, hold a higher chance of reaching the corner office than do specialists. "The higher you get in an organization, the more likely you are to encounter problems from a variety of different areas," he says. Because CEOs in particular encounter so many different kinds of issues, "those people have to be generalists."

      A CEO with strengths in only one or two narrow areas can tackle a problem in those fields, but "the difficulty is, if you get a problem in an area outside your expertise and have no knowledge there, then you totally blow it," says Lazear, the Jack Steele Parker Professor of Human Resources Management and Economics and Morris Arnold Cox Senior Fellow at the Hoover Institution. "A good CEO is someone who's very good, possibly not excellent, but very good, at almost everything," he says.

      To determine the extent to which individuals are generalists, Lazear analyzed the number of prior jobs held by 5,000 respondents in a 1997 survey of 12,500 GSB alumni. Among those with at least 15 years of work experience, respondents who have had 2 or fewer roles had only a 2% chance of eventually becoming a C-level leader, while those who have held at least 5 positions had an 18% chance of reaching the top.

      "People who are most likely to end up in leadership positions are ones who have had many different roles throughout their career," thereby gaining broad experience, says Lazear. In practice, becoming a generalist could entail making the rounds through various areas of a single company. Many types of organizations, ranging from the military to General Electric to small family-owned businesses, groom future leaders in that way, Lazear says. 

      Lazear also writes that the broader the organization an individual leads, the broader the skills he or she holds. For example, the chairs of academic departments within colleges or universities likely have a wider range of knowledge than do their colleagues, but their skills still aren't as broad as those of corporate CEOs. Analogously, the skills of political leaders tend to be the least specialized and the broadest of all, because political leaders confront the entire spectrum of possible decisions, Lazear writes.

      But don't C-level leaders just hire other executives and managers to oversee individual areas of the company? Yes, but hiring someone requires that you understand enough about each area so you're able to identify the right person for the job. "Putting together a team is a generalist's skill. 'Just hiring someone' is not so easy," Lazear says.

      Lazear's research also suggests that certain jobs, including those in banking, senior-level finance, and marketing, are more likely to lead to the corner office because they are, in a word, visible. Higher-profile jobs that put you in what Lazear calls "publicly observed decision-making situations" let you frequently interact with many others who can see your results and recognize your abilities, and who ultimately become followers. Hence, you're becoming a leader.

      Of course, merely working in marketing isn't a guarantee of reaching the C-suite. Nor is hopping through a half-dozen positions. But by developing strengths in as many areas as you can, Lazear says, "you can enhance your probability of going into leadership."

      — Louise Lee

      "Leadership: A Personnel Economics Approach," Edward P. Lazear, Working Paper 15918, NBER Working Paper Series, April 2010.

      Thanks to Stanford Business Magazine