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The Essence of Leadership

QuestionAs the author of this column, I receive a number of questions each month on the topic of leadership. Manu asks how young men and women in India can be taught to think about leadership. A pharmacy director in the U.S. is having difficulty firing up a small number of workers who are not engaged in their work. Linda wants tips on being more decisive. An executive leading a crossfunctional team asks: “How can I motivate them to stay committed to the team and focused on our goals when they have their day-to-day work responsibilities?”
The answers to these questions begin with the very basics. What is the definition of leadership?

In my experience, “business leadership” is often associated with a CEO of a company who made a lot of money and got rich in the process. Yet when clients tell me their company needs leadership, impressive job titles and large salaries aren’t what they’re after.

We say, “So-and-so is a born leader.” No such thing. Leadership is a relationship between a person and a group plus the skills to guide the group to success. As with any relationship, success depends on both parties. One group’s stellar leader may fail utterly when leading another group. The lack of competent leadership is the number one complaint I hear from non-CEOs.

Rather than just study leaders (thousands of books on leadership cover that ground), I’ve asked hundreds of people who they follow and why. They say leadership is emotional; it’s about inspiration, motivation, and connection. Unlike management, it doesn’t lend itself to systems, structure, and traditional classroom teaching. What inspires people to follow is surprisingly consistent, and surprisingly simple. But be forewarned: Simple doesn’t mean easy!

Establishing the leadership relationship

Call it “vision,” or “mission,” but it all boils down to one thing: First and foremost, people look to leaders for direction. Only by knowing their organization’s direction can people apply themselves to achieve their goals. It needn’t be formally stated; the leader’s actions and decisions convey the direction to the company. The direction needs to pervade every decision and conversation within the company, and it’s the leader who makes that happen. Providing direction for others is a key to creating a leadership relationship.

Even with direction, people must trust a leader. Trust is built on honesty and integrity. People want the truth from their leaders. Outrage from Watergate, the Monica Lewinsky affair, Enron, and many other public scandals were fueled less by the events than by the accused parties’ cover-ups and lies. When Salomon Brothers covered up improper trading in an early-1990s scandal, it fueled the flight of a billion-dollars’ worth of customers as people lost trust in the organization. Warren Buffett rescued the company by using complete and total candor with Wall Street and regulators as a way of restoring trust. Far from being a disaster, telling the truth proved astonishingly effective in quickly restoring the company’s integrity, with a minimum of fines.

Leaders must have integrity, establishing clear values and living those values. One of my clients worked for a newly public company whose CEO urged employees to hold their shares to keep investor confidence high. He then sold several million-dollars’ worth of his own shares. He responded to his employees’ feelings of betrayal saying, “It was just a small percentage of my holdings.” But that didn’t matter! He contradicted himself by selling shares while exhorting his employees to hold theirs. It killed his leadership.

Interestingly, the key is having actions match values, more so than what those values are. If one leader values quality and another values speed-to-market, they will simply attract different people to their organizations. But in either case, they must live their values consistently.

Consistency is another vital leadership element. When a leader changes direction with the market fad-of-the-day, or when his or her values shift according to the latest public opinion polls, people stop following. People want dependable leaders who provide a touchstone in times of change. You may ask: In a world of constant change, don’t we need to shift and adapt? Of course. But you must choose a direction and values that stay stable even while adapting your tactics.

A software company once had a company vision, “We will produce the best ABC widget for DOS the world has every seen.” It was a great vision statement, until Windows squashed the company out of existence. The software maker’s vision was so narrow it couldn’t adapt to change. A mission of, “We will solve the ABC problem for computers worldwide” would have been flexible enough to keep the vision while adapting to technological evolution.

Lastly, followers need to feel connected to their leaders. Leaders almost always connect through shared values; that’s one reason followers leave when a leader doesn’t live his or her values. Helping people feel they are part of something much greater—giving them a personal vision—is another strong tactic. For instance a leader in the healthcare industry may say, “You’re not just joining our company, you’re becoming part of transforming the world of healthcare.” Recognizing and rewarding employee achievement helps cement the connection. On the other hand, taking credit for others’ work is a powerful connection destroyer.

I was surprised by this framework’s simplicity—direction, integrity, consistency, and connection. But its simplicity hides how difficult it is to pull off. It’s difficult because these qualities can’t be faked for long. Creating a direction is easy. Integrating it into every breath and decision is not. Choosing values is easy. Aligning behavior, decision making, policies, and organization around those values is not. Consistency is easy … until things don’t go quite as planned. And connection is easy until things get busy and instinct tells us to stop all this fluffy foolishness and just get down to work.

Building the organization

Direction, integrity, consistency, and connection create the leadership relationship. That’s a first step in building an organization, but it doesn’t address the issue of how leaders make their organizations successful. History is littered with great leaders who didn’t have a clue how to turn their leadership into an enduring business. Let me share some of the highlights:

  • Focus, focus, focus. Know what the organization should be doing and ruthlessly say “no” to anything that would be a distraction.
  • Play to individual strengths. Understand the abilities of everyone you hire and make sure their job plays to their strengths. Don’t spend too much time developing weak areas. If someone can go from good-to-great in their strength, that’s more valuable to the organization than taking someone from poor-to-acceptable. Build organizational competence by teaming up complementary skill sets. Ditto for yourself; know what you’re good at and can do well, and spend most of your time doing that.
  • Play to organizational strengths. Stick to what you’re good at as a company, and get very good at it. If you’re a great software company, opening a chain of high-end fashion clothing stores won’t build a strong organization.
  • You can train people for skills, but it’s much harder to hire attitude. Most companies hire for specific job history or resume keywords, which is precisely the wrong way to go about it.
  • Bring out the best in your people. Hire the best, give them a common direction, and let them do their job. You’ll have a much stronger organization than if you make yourself too important. Remember: Every time you hire someone who isn’t as smart as you, you lower the average IQ of the company.

My favorite books on building organizations are Good to Great: Why Some Companies Make the Leap… and Others Don’t by Jim Collins (it also touches on the “Level 5” leadership character qualities that correlate with success), The Fifth Discipline Fieldbook: Strategies and Tools for Building a Learning Organization by Peter Senge, with Bryan Smigh, Charlotte Roberts, Richard B. Ross, and First, Break All the Rules: What the World’s Greatest Managers Do Differently, by Marcus Buckingham and Curt Coffman. All are research-based, easy to read, and have enough great material to keep you building organizations well into the next century.

Most of this column has concentrated on the “soft” skills. When it comes to leadership, I remember what the COO of a multibillion-dollar company once told me: “At the end of the day the financial and strategic issues are there but they are reducible largely by analytics…the people and process issues are not.” If your goal is to become a successful business leader, your route will be smoother if you spend some time working on relationship skills and “softer” aspects of leading. Because at its heart, leadership is nothing more and nothing less than inspiring others to follow your dream and doing what it takes to make possible their success.

No Authority? Use Persuasion

QuestionI am leading a cross-functional team in a company initiative but the members on the team do not report to me. How can I motivate them to stay committed to the team and stay focused on the goals established when they have their day-to-day work responsibilities?

AnswerDéjà vu! My first project management job was the Quicken VISA Card. We were creating software to import credit card statements into financial software. The software had to be integrated with six different Intuit products. I had “dotted-line” relationships galore, but no one who actually reported to me. Much of my team had other primary projects, all with separate deadlines.

Leading a team in those circumstances is an ongoing negotiation between you and your team’s other priorities. You need to capture your team members’ share-of-mind, and keep them wanting to move the project forward. Unlike a direct supervisor, you don’t have the tool of authority to help. You’ll have to rely on relationships and persuasion.

Easy commitment

Think of your job as helping your team members make your project a priority. You need to know enough about them and their competing commitments so you can work the joint project into their lives. Schedule a one-on-one meeting with each member. Find out what else they’re working on, how much time they can commit to the team, and what their big challenges are. Ask about challenges related to their other projects, and spend some time brainstorming ways that you can help them on those projects.

Don’t be afraid to confront the elephant in the room: “Our project isn’t your top priority, so how can we insure we make forward progress while helping you complete your other priorities?” Just asking the question signals that you care about their priorities. They’ll often care about yours in return.

Once you know their other goals, lend them resources. Intervene on their behalf. You heard right: Help them succeed at their competing commitments. The more they fulfill those commitments, the more time they’ll have left for you, and the more they’ll become committed to your project.

Is one of your team distracted by a national product launch, for which the logistics are screwed up? Help straighten out the logistics, even though it isn’t your job. You would love it if she made you a priority over their other commitments, so demonstrate you’re willing to make her the priority as well. Do something selfless for her. She’ll respond. It just might be the first time someone other than a direct supervisor tried to make her life easier.

Staying in mind

Once you’ve opened channels of communication, diligently maintain the relationship. As in many relationships, frequency trumps duration: People remember many brief encounters more than a single long one.

Have you ever attended a full-day project kick-off, followed by six months of silence from the project team? That’s called “getting off to a resounding thud.” When a project starts quietly but comes up daily in conversation, it infiltrates your thinking and becomes part of the culture. That’s what you’re after. You want your project ever-present in your team members’ minds.

But you want it to be present in a good way. Make sure each project-related contact leaves people feeling like it was a good use of time. That means finding excuses to interact that aren’t “status meetings.” Most people dislike status meetings. Personally, I despise them. For frequent-but-brief contacts, connect to provide value to your team members and use as little of their time as possible. Contact them with help, with direction they need, with resources, or with one-on-one requests for status. Remember: Your goal with these contacts is simple awareness.

In addition to awareness, a team for a large project may need to feel a team identity. Do that separately. I believe teamwork should happen naturally, not through off-sites and ropes courses. From your early meetings and ongoing relationship-building, you’ll understand the needs and strengths of your team members. Facilitate their working together, so they build respect for each other as part of getting the work done. Find opportunities for them to help each other and match them up at those times. “Hmm, Sandy, you need help with the bar graph tool? Did you know that Aaron was working on it just last week?” If team cohesion is a real issue, ask them if they would like formal team-building meetings. At all times, let them drive the process in a way that works given their other commitments.

Put your project in context

If people in your organization are generally committed to the goals of the overall organization, you can strengthen commitment to your project by helping them understand how the project fits into the company’s larger goals. For instance, if the company is branching out into new markets with your project, you can help the team understand that the project is strategically important, and not just busy work.

Uncovering Opportunities to Help

Similarly, if there is an executive whose organization spans both your project and your teams’ areas, you might want to ask the executive to talk at a team meeting, to reinforce how much the project matters to the organization.

Appealing to company goals is powerful in a healthy environment, but should be done with caution if morale is low. In some companies (often those with histories of layoffs or unfair treatment), people view the company and its success very cynically. Appealing to company goals won’t be motivating. In many companies, however, people feel loyalty to and care about the company. They’ll be motivated to help the business reach its goals.

There’s no perfect answer to managing a team with other commitments. But if you take the time to make it easy for your team members to contribute, keep your project top-of-mind, and help them understand how important it is, you’ll have the best chance of pulling together a team that can get the job done even amidst challenges and distractions.

Great Leadership for Great Teams

QuestionI am establishing a publishing house in Africa, and have put together a team with great potential. What strategies and skills must I employ to make the most of this potential? What is the best way to lead a crop of great people?

AnswerBy assembling a great team, you’ve already put yourself ahead of the game. Rather than jump-starting the company on your own, you’ll have the easiest time, the most fun, and probably the most success by developing the team and letting the team develop the business. You just have to organize them and point them in the right direction.

Have you ever worked in a really high-functioning team? In great teams, each member brings their best to the party. They only do the things they’re best at, and they do them superbly. The work gets divided to play to each person’s strengths.

Identify your team’s strengths

Get the team together and explore each other’s backgrounds, expertise, likes, and dislikes. Match your discoveries to the work, so tasks go to whoever is most likely to finish them well and quickly.

Does a team member have contacts, industry experience, or experience in specific companies that will be valuable to the group? Put them on related tasks. Experience in a functional area or two can make a resident expert in those areas. Those with great people skills should be doing people work, while those who prefer to work behind the scenes can do research and build infrastructure.

Don’t limit yourself to obvious business strengths. Mental traits can be even more valuable over time: long-term thinking, short-term thinking, idea orientation, data orientation, comfort with stress, technological comfort, people skills, strategic thinking, ability to challenge assumptions. There are hundreds of ways to slice mental traits, but whatever your framework, know that mental traits become great strengths when matched with the right challenge.

For example, some people prefer to follow established procedures. The business press worships “innovation,” “disruption,” and “destroying old paradigms.” Well, guess what? “Out-of-the-box” disruption is great for occasional big conceptual leaps, but it’s the established procedures that drive a successful business. And when boarding a plane, who really wants a disruptive, out-of-the-box pilot, anyway? Give me a pilot who loves completing their sixty-point safety checklist today with the same precision and care they used the first time they went through it.

A strength is nothing more—and nothing less—than a skill so well matched to a task that the results are stellar. Know your team’s skills, and you can all begin turning those skills into strengths.

Use your team to hone direction

Once you have the right “who,” the team can pool resources to choose the “what.” You’ve chosen a business, and your team can hone the strategy and tactics you’ll use to make it successful. In the book Good to Great, Jim Collins suggests that a team choose a single concept—your “hedgehog concept” —to unite the business. The hedgehog does only one thing: roll into an ironclad ball. But the strategy works so well that it’s invincible on its own turf. Your hedgehog concept comes from a brew of your individual values, skills, competencies, and a healthy dose of business sense.

Passion. Rally your company around something you can be passionate about. If you’re all deeply devoted to children, youngsters, and family, for goodness sake, don’t concentrate on publishing HTML reference manuals. Publish books for teens, young adults, and families. Choose a strategy that unleashes your collective inspiration!

Being the best. Your hedgehog concept should be something at which you can be the best in the world. It doesn’t mean you are the best, just that you can become the best. This can be trickier than it seems. Your team members and their skills will contribute to deciding where you can excel. Competition can also affect your choices. Even if you have the perfect team, existing players may have locked up areas of opportunity. If I were starting a grocery store, for instance, I’d be careful about hedgehog concepts that put me head-to-head with Wal-Mart. “Huge stores with great service” is a concept that’s taken. Even a superb team probably couldn’t be best in a world dominated by Wal-Mart.

Using Your Team’s Strengths

Economic viability. Your hedgehog concept should make money. You should also be able to identify your economic drivers in the form of a measurable “profit-per-x.” Often, the “x” is not obvious. For your strategy to make sense, you may choose a subtle “x.” Collins relates the story of a company whose strategy was to cluster stores in one geographic area to be most convenient for customers. Rather than measuring profit per store, the company realized that profit per neighborhood was the key to driving operations, compensation systems, and organizational learning in pursuit of convenience for their customers.

Monitor the commitments your team makes

As you begin implementing your strategy, pay close attention to the commitments you make. Commitments provide flexibility and focus, but can also bind you to a long-term course of action. Since your venture is quite young, you don’t have a lot of operating knowledge to choose commitments wisely. So keep yourself as flexible as possible until you’re fairly sure of your course of action.

Commitments come in all shapes and sizes, but some of the most powerful are the agreements you make on how to frame the world. Your beliefs about what customers want and how they behave, if propagated throughout your company, are a very powerful frame. Ken Olsen, founder of Digital Equipment Corporation, was famous for rejecting IBM’s frame that computers meant room-sized boxes that were only useful to large corporations. He built DEC and revolutionized the industry by inventing the minicomputer. Unfortunately, he got caught in his frame of the minicomputer being The Answer. Oops. In the late 1990s, his once-leading company was acquired by upstart PC maker Compaq.

Supplier and distributor relationships can become commitments. Decisions to vertically integrate (or not) can become commitments. Deeply held cultural values can become commitments. Large capital expenditures can become commitments. One entrepreneur recently told me his company had perfected the ability to open a new market and quickly achieve a 25 percent-plus profit margin. Unfortunately, while going up their learning curve, they built factories several times their optimal size. The company’s survival is still touch-and-go—not because it’s a bad business, but because early commitments have saddled the company with unproductive, expensive assets.

Become a leader, not a manager

Finally, spend regular time leading rather than managing. You’ve got a good team, and you’ve jointly chosen a direction. Now your job is keeping the company on track. Keep your team working well together, and make sure you’re building a company where everyone plays to their strengths. Know your hedgehog concept, discuss it regularly, and make sure it guides the company’s daily decisions. Spend time thinking strategically with your management team. Have them project the hedgehog concept out one, three, or five years into the future, and steer the company and its commitments towards that reality.

Your job is creating an environment where your employees can do their best. Give them all the credit. Recognize and celebrate their accomplishments. When they screw up, lead an “after action review” to help them learn. Remember that you’re building a culture that brings out and amplifies everyone’s strengths, so use mistakes as an opportunity to reexamine the strengths of the team and change your tactics, your assumptions, or your organization.

For now, focus on getting your company off the ground. You’ve hired the crew; together you’ve charted the course. Now stand back and let them bring the dream to fruition.

Inspiring the Jaded Employee

QuestionI am interested in motivating long-term employees who have fifteen-plus years with an organization. This group has heard all the visions of transient leaders who were furthering their own careers, and have become apathetic to improving their own lot, space, or environment. I’m keen to hear the latest thoughts on whether it’s possible for these people to shift their thinking and practices.

AnswerCurrent wisdom says, “Hire for attitude and train for skills.” That’s because humans are stubborn, and don’t like change. Well, that’s not exactly true: We like change when other people are changing to make our lives easier. That’s why social change takes a generation—the old mindset has to die off to make room for the new. But all is not hopeless. When attitudes are just a reaction to the work environment, people can change. Fix the situation, show them it’s fixed, and let the change begin!

People get cynical and apathetic for good reason. Scandal after scandal reveals golden parachutes, endless perks, and upper managers making millions without linking pay and performance (management by objective seems to stop at the EVP level). Jim Collins says in his book Good to Great (HarperCollins 2001) that there’s even evidence that the worse the leader, the more he or she takes home.

But let’s assume in your situation that management is prepared to be accountable, will accept a pay level the rank-and-file consider reasonable, and genuinely wants to create a new company culture.

Do as I do

Start with action, not words; people want results, not promises. You’ll have to start by delivering change that’s in their best interest, and back up your action with words, not the other way around.

A good place to start is by making a visible sacrifice for the company’s common good. You might consider cutting your own pay, bonus, and raise–especially if you’ve had layoffs recently. Give it back to the people who made it: your employees. Increase their benefits, hire back some laid-off workers, or boost salaries. The role model here is Aaron Feuerstein, CEO of Malden Mills, who in 1995 kept 3,000 employees on the payroll after a fire leveled the business. His belief was that his responsibilities extended to employees and the community as well as to shareholders.

Next, give everyone a sense that showing up for work could make his or her lives better. At first, they won’t be able or willing to believe you. You’ll have to combat their lack of emotion with added emotion. Find the emotional connection people have with the company.

Some research indicates that people are most motivated when challenged to use their strengths to reach goals they think are doable. (See Authentic Happiness by Marty Seligman, Simon & Schuster 2002.) Find emotionally important goals by asking, “What’s important about the work you do?” When they answer, ask, “What’s important about that? What will that do?” a couple of times. Their answers will reveal values and passions. If they reply, “for the pay,” and don’t connect with any further goals, they may have no job passion to awaken. If someone’s never had job-related hopes, dreams, or aspirations, he or she probably won’t develop them mid-career. (Significant emotional and spiritual events might do it, but that’s a bit beyond the scope of this column. Business research suggests that it’s easier to change skills than attitudes, so your best bet may be to start hiring people with a more engaged attitude.) Watch people’s faces: If they become animated, or talk with longing in their voice, you’ve tapped into something real.

Now ask them to stay in that passion, and describe their perfect job. Have ’em go wild. If the past culture has been especially oppressive, you’ll probably be amazed at how unwild their dreams actually are. Things like, “having a desk with three drawers” may be a big deal. Ask them, “What one thing can I do to help you move closer to that dream?”

Listen very, very carefully to the answer; you’re at a critical moment. They’re telling you how you can send an emotional message, not just a verbal one. Whatever they say to do, just do it. Say, “I appreciate your sharing that. I’ll keep it in mind.” Don’t promise anything; they’ve learned that promises get broken. Just quietly get it done. Then check back and ask about next steps. As soon as possible, have them suggest what they can do to drive the change further.

Beware the temptation of self-promotion! Don’t crow about how responsive you’re being. It’s no big deal. Choose small things and take visible actions that people find meaningful. Actions are what people want, not words. They’ll notice, and the word will spread that you’re a leader who actually makes life better, rather than issues empty promises.

Once you’ve taken action and people have evidence that things can be different, it’s time to encourage them step up and do their part. Once they start going, your job is supporting them and helping them align their action with the direction of the overall company.

This isn’t an easy process. If people are truly happy in their work environment, don’t expect them to embrace change. But if the apathy comes from bad leadership and unchanging drudgery, you can change that, and they’ll get it once you start demonstrating that you’re truly different.

Help the change take root

Be vigilant! People will have trouble adapting to you. Even if they’re psyched to take the reins, they may need help coping. I worked with a secretary who dreamed of becoming a project manager. When given her first project, she discovered she didn’t know how to step up and lead. In meetings, she deferred to senior people out of sheer habit, even when the responsibility was hers as project manager. We worked to help her define her role and to acquire the project management skills to master the position. As a leader, you foster change that may push people into new territory. Be sensitive and be prepared to intervene and help insure their success.

As people take charge, they might charge right in someone else’s face. Look out for turf battles, injured egos, feelings of exclusion, and other potential hot spots. When war looks likely, step in and help the participants negotiate a settlement. Get them together, help them find common goals (or remind them of the team’s common goals) and then give them the responsibility for working out their differences. Be available as a resource, but get them in the habit of behaving like mature adults. Once you’ve tapped their motivation, it’s up to you to help them grow to work as a strong team that produces solid, substantial results.

How Leaders Use Questions

QuestionDo you have anything to share regarding the subject of asking the right questions? Someone once said “Forget the answers; focus on asking the right questions.”

AnswerI’ll always remember the mid-1980s commercials featuring Lee Iacocca, then considered one of America’s finest business leaders, banging his fist on his board table and making tough proclamations. But consider the power of well-crafted questions. Statements invite agreement or disagreement. Commands invite rebellion or submission. How are questions different? Simple: Questions engage people. Questions can persuade an audience, align an organization, set direction, or focus attention on the things that enable people to learn.

The Socratic method

On a high school debate team, persuasion happens through fortified logic supported by facts and figures. Most companies work this way, too. You just lay out your logic, present supporting data, and voila—full buy-in is a cinch! … Not. That’s because we’re trained to argue when presented with someone else’s logic. As parents of teenagers can attest, the first reaction to being told what to do is to attack any logic, explanation, or data that isn’t what they want to hear.

Questions provoke answers, however. Ask a teenager “Where are you going?” and you will get an answer. (Most likely, “Out.”) What they don’t do is argue with the question or its assumptions. This is the basis for the Socratic method.

Rather than stating your logic, ask a series of questions chosen to lead your listeners to deduce the logic on their own. This questioning will take longer than lecturing, but you’ll save time in the long run. Your listeners will reach their own conclusion based on your questions. They’ll buy into a conclusion they’ve reached much faster than they will buy in to a conclusion that you just state.

To design your questions, first map out the logic that leads to your conclusion. Be thorough! Since you can’t control peoples’ answers, your data and logic must be airtight. (Otherwise be willing to be convinced when you get an answer you hadn’t considered.)

Here’s an example of the Socratic method in action: Imagine you’re trying to change your culture to judge people based on results, rather than hours worked. You could say this:

“What we really care about is producing business results. Working smarter rather than harder can sometimes produce results. We must reward people who get their results quicker by giving them a bonus based on what they produce, rather than the hours they work.”

You can imagine the response: “Sure we will, Pollyanna. And as long as people are working smart, let’s have them work smart for sixty hours a week.”

Here’s how you might present the same logic as a chain of questions. It takes longer, but it keeps the listener engaged in understanding rather than arguing:

Q: Do we want the business to meet and exceed its goals?
A: Of course.
Q: If we’ve met our goals, who should be eligible for bonuses?
A: Everyone who contributed significantly to meeting the goals.
Q: So what matters is that bonuses be related to each person’s contribution toward the goals?
A: Yes.
Q: What if someone figures out a way to work smarter, and reach goals with less work?
A: That would be great!
Q: And that would be as valuable as taking longer and doing it less efficiently?
A: Of course.
Q: So then how we should base our bonus structure?
A: Well… it should be based on working smarter and achieving results.

Using “how” and “why”

One of the biggest challenges in leading an organization is linking big-picture strategy to everyone’s daily actions. It’s all well and good to announce a sweeping vision like, “Our mission is to ensure the health and safety of everyone who uses HealthCo’s products,” but the next day, your facilities person still has to grab a plunger to clear out a clogged toilet. Guess what? She isn’t thinking about the company vision. And once the toilet’s working again, she probably still hasn’t made the connection between what she does and the company’s grand mission. Your job is to help her connect, and you can do it with questions.

In your conversations, ask, “How?” to help people move from high-level goals to specifics. “We want to build the world’s best widgets.” “How?” “Well, first we’ll look up widget in a dictionary. Then, we’ll…”

Ask, “How?” enough and you can go from leadership goals all the way down to the paper clips needed to reach the goals. In fact, most layers of management essentially take their own goals, ask, “How can we reach these?” and use the answers as goals for their direct reports.

Asking “Why?” or “What do we achieve?” does the opposite; it moves from specifics to reasons. We can ask our facilities person, “Why are you fixing the toilet?”

A: “Because people need working facilities.”
Q: “What will having working facilities achieve?”
A: “People can take care of themselves and concentrate on their work.”
Q: “And why do they need to concentrate on their work?”
A: “So they can do good work.”
Q: “And why do they need to do good work?”
A: “To ensure the health and safety of everyone who uses our products.”

Each “Why?” moves to more basic goals and causes. You know your organization is tightly focused when “Why?” eventually leads to the company’s vision, values, or purpose. It’s rare that everyone can link their job to the mission, but boy, is it worth shooting for—it energizes and inspires a workforce even more than stock options in an Internet company.

Create culture using driving questions

Linking jobs to mission sets organizational direction. But questions also drive personal behavior. If your people ask the right questions relentlessly, you can create a powerful culture.

Take Winters Plumbing of Belmont, Massachusetts. The founders have the audacious vision of a billion-dollar plumbing empire. They ask daily, “How can we so satisfy our customers so that they make us the world’s greatest residential plumber?” The answers have led them to reinvent how plumbers are hired and trained, how they dress, what they drive, and how they are paid. Winters just opened a $50,000 training center to help their plumbers keep getting better.

The driving question filters down to individual plumbers. A non-Winters plumber might ask, “How can I stop this leaky sink as quickly as possible?” They’ll fix a sink. But a Winters plumber will ask, “How can I give this customer a great overall experience?” They’ll arrive well groomed, in a freshly laundered uniform, fix the sink, and even vacuum the area, leaving it better than when they arrived. The right driving question makes all the difference.

As Marilee Goldberg, author of The Art of the Question (Wiley 1997), points out, some questions put us in a judgment mindset, while others stimulate creativity and problem solving.

When things go wrong, you can ask, “What happened and whose fault was it?” The answer may produce great diagnosis, along with a culture of blame and a reluctance to take risks.

Asking instead, “What was the root cause and how can we prevent it in the future?” may produce great diagnosis and encourage brainstorming about prevention.

Be careful to revisit your questions from time to time. A real estate developer I worked with surpassed her dreams and built a $20 million empire, but she was heading towards an early grave from overwork. Every morning, she asked, “How can I make more money today?” Good question for amassing $20 million. Bad question for building a satisfying life once the money’s in the bank.

We live in the so-called “information age,” with a virtual epidemic of people asking for data that won’t impact their actions one bit. They just like having data; it makes them feel secure.

If this describes you, resist! Think before asking. Know how you’ll use the information and whether it’s even the right question. I’ve taken dozens of customer satisfaction surveys that asked, “Did your problem get solved?” An important question, to be sure. But they didn’t ask, “Did your problem get solved after four hours on the phone with poorly trained customer service people who made you want to run screaming into the night?” In fact, the December 2003 Harvard Business Review presents excellent research showing that simply asking, “Would you recommend us to a friend? Why or why not?” could generate better information than a ten-page survey.

We’ve barely scratched the surface of how you can use questions as a powerful leadership tool. Questions can also be used to communicate beliefs, set cultural norms, and push the edges of people’s thinking. But for now, may I offer some questions that will help you make this concept real?

  • What are your current goals?
  • How must your organization act to reach those goals?
  • How can you use questions to persuade, align, create culture, and directly measure the world to help you reach those goals faster?

Answer well.

Is Equity-Based Compensation a Good Thing?

QuestionDo you think an equity-based compensation plan is a good way to motivate employees?

AnswerMy first instinct was to write, “Yes, of course.” Halfway through my third rewrite, however, I discovered it’s a wickedly complex question. Yes, equity motivates, but the question is what does it motivate? It has to motivate the right behavior for the right reason to be effective. And even when equity does what you want, its hidden gotchas can still cause a train wreck.

What do you hope equity will motivate people to do? You might find easier ways to get the same results.

One popular reason for giving equity is “We want people thinking like owners.” But think again. Most employees don’t want to think like owners; otherwise, they’d be out there starting companies. Besides, one thing owner’s think is, “I will get a huge percentage of the company’s value when it’s worth something.” I have yet to meet an owner who wants their employees thinking that.

We say, “think like an owner” when we mean, “be cost-conscious.” And equity is supposed to do that? I’ve watched company owners take a salary of $200,000 and spend a week and $10,000 worth of management time deciding whether to buy a $500 laser printer for their product development group. When even owners don’t think like owners when it comes to cutting costs, it’s foolish to ask it of employees.

Besides, owning stock doesn’t necessarily lead to frugality. Even in startups, the small expenditures are peanuts. Employees reason (often correctly) that the big expenses—rent, executive salaries, property, plant, and equipment—will make or break a company. And those decisions are big enough that cost is considered as a matter of course.

If the real goal is frugality, skip the stock. Offer people a budget and give them a percentage of any money left in their budget at year’s end. I guarantee you’ll have cost consciousness oozing from the company’s collective pores.

Perhaps “think like owners” means we want employees to get the big picture, use good judgment, and keep the company’s best interest foremost. A laudable goal, but again unrelated to stock. Lack of big-picture thinking is often a leadership void. If you want holistic thinking, share the big picture with people about ten thousand times, coach them to live it every waking minute, and add “gets the big picture and acts on it” to the yearly performance evaluation on which their bonus is based.

Of course, stock is also used to make up for being woefully underpaid and overworked. It motivates until burnout occurs, at which point nothing can rekindle motivation. Given overseas job migration and record joblessness, unemployment fears probably keep people working 100-hour weeks as well as equity could. And if you don’t like to rely on economic bad times to retain people, spark commitment by aligning the culture and work with the people’s values. Equity is optional.

When equity is justified

A closely related goal may justify equity: retaining employees and creating long-term commitment to the company’s success. Stock does this well, especially if they think it will be worth a lot of money someday. Of course, providing meaningful jobs well matched to individual strengths also keeps people around.

You might also give stock to employees so they share in the long-term value they create. If this is your motive, more power to you! You’re a rare breed. Stock is a great way to do this, and I’ve even known private companies to spread the wealth with simulated “phantom stock” granted to employees.

You want people owning stock for the right reasons—but stock motivates different people for different reasons. If someone wants stock in order to get rich in three years, will they make good long-term decisions for your company? Coming from the start-up world, high-six-figure executive motivation puzzles me. Many of these folks jump companies for higher salaries. In start-up land, executives join because they’re passionate about the opportunity and idea. They get $70,000 for thousand-hour weeks, and bend over backwards to make the company successful. It’s beyond me why a big company would pay upper execs ten times that for employment based on money and not a passionate commitment to the company.

You want people emotionally invested in the company’s success. You can get that investment by giving them meaningful work in service of a worthwhile goal. Hire people who believe in what you’re doing and match them to jobs. If you want to reward their commitment, then give them stock, but make it crystal clear you’re rewarding their innate involvement, not trying to buy it.

Although you can’t expect stock to give people an owner’s attitude, some people really do think like owners once they own stock. They take pride in the company and commit 100 percent. They save money, talk up the company, bring in great employees, and sacrifice to help it succeed. If stock motivates someone to do the Right Thing because they identify with the business, give them that stock today!

Of course, some people think equity will give them control. They believe it will give them a voice. If that’s someone’s motivation, think twice. Other than institutional investors and founders, no one will have enough stock to wield power. Besides, if someone wants control and can’t get it by presenting a lucid case through normal channels, do you really want them trying to exert control through shareholder meetings?

Avoiding the stock gotchas

So stock is a great motivator if it makes employees act like owners, rewards emotional commitment, or shares the long-term wealth. But even in those happy circumstances, granting stock is fraught with peril. In many cases, stock recipients have no idea how to value it and have expectations far out of line with reality.

Stock can stop motivating when reality sets in. We hear “stock” and think, “this is it, baby—billionaire in three months!” If you’re using stock to motivate sacrifice, you better make sure it’ll justify that sacrifice. In twelve start-ups over the last twenty-five years, I’ve seen just how worthless stock can be. If someone waits too long and sees the pot of gold evaporate as the company tanks, equity-based motivation turns to equity-fueled cynicism.

In pre-public companies, stock can be granted, but it is worthless without an IPO or acquisition. I owned stock in a private company for almost twenty years before it was finally worth one-tenth of what I’d originally hoped. Even if a private company gets acquired or reaches the IPO stage, major shareholders may make out OK, but little shareholders can get screwed. It doesn’t do wonders for morale. Resumes begin circulating.

Stock has a place in motivating employees, but check out alternatives carefully.

When the money does come through, jealousy can rear its ugly head. For some weird reason, the further people are above the “game over” amount, the more they care about who has what. Those who’ve stuck it out through thick and thin resent making far less than the founder when a company goes public.

If a company is planning an IPO or acquisition, they’ll lose the “you’ll get rich from our stock” effect once they’re on the other side. In that case, motivation based on something other than stock had better be in place.

Public company gotchas

Gotchas aren’t just for private companies. Big public companies have plenty of gotchas, too. There’s rarely a link between someone’s work and share price. Stock makes a nice bonus for people, but it doesn’t affect their performance because no one can figure out how to have an impact. So stock is a nice reward while the share price rises. When the price falls, though, the company has to resort to motivating with good old-fashioned salary.

Warren Buffett doesn’t believe in linking market price to performance. He won’t give options to top managers. He says a manager can do nothing and stock prices will still rise at a company’s return-on-equity, as long as the company can reinvest in its existing business. Executive options become worth millions, even though the recipients are just taking up space. Buffett instead gives managers ample yearly bonuses, contingent upon their producing actual results above ROE.

Even though top managers are given tons of stock, ostensibly to align their interests with the shareholders, the reality is that large and small shareholders don’t have aligned interests. The top company executive who holds ten million shares of stock would sure like the stock to be worth $10 per share, but still scores a home run even if the price drops down to $1. The smaller shareholder with 10,000 shares, however, cares a lot more about that price. Will the top manager do what it takes to make the smaller shareholder rich?

Vesting also makes people do crazy things. Companies don’t give stock all at once, they “vest” it over time to ensure people will stick around. The gotcha is that it works. They’ll grant 5,000 shares over five years, and the employee gets 1,000 shares each year. Disgruntled employees in a successful company end up with the perverse incentive to stick around until their next vesting date. They happily poison morale, radiate misery, and doom projects while waiting for their stock to vest. In this scenario stock has motivated retention too well; a little less retention would be a good thing.

So where does all this leave us? It leaves us realizing that stock is complex. It motivates, but often for bad reasons. Even when the reasons are right, hidden gotchas can turn it into a negative depending on later events. Stock has a place in motivating employees, but check out alternatives carefully. You may find other motivators work just as well and leave everyone happier in the long run.

Stever Robbins is founder and president of LeadershipDecisionworks, Inc., a national consulting firm that helps corporate companies develop far-reaching leadership and organizational strategies to sustain growth and productivity over time. You can find more of his articles at https://www.steverrobbins.com.

See other stories in this series.

Managing Execs Who Didn’t Get the Promotion

QuestionThe managing director heads an organization with three vice presidents under him. For the last two years the company has been run this way and has been successful in turning around.

With reorganization on the agenda, it is proposed that one of the vice presidents be appointed as the CEO. This has led to resentment among the other team members. The fallout has been demotivation horizontally and vertically. What could be a “win-win” solution for this issue?

AnswerEgo, ego—who’s got the ego? Power, control, ego, and pride seem to account for the lion’s share of business behavior. Emotions at the top are propagated throughout the ranks; problems below may simply reflect problems at the top. So let’s start at the top in fixing the situation.

It sounds like what you really want is a healthy company. A healthy company needs a healthy executive team, and we all know what that looks like: The CEO has the respect and cooperation of the team. The team works well together, with each member bringing their top strengths and competencies to their jobs.

You need to align your executives behind a common vision of what a healthy executive team is. Gather your quarrelsome veeps for a heart-to-heart behind closed doors. They need to clear the air and then align behind a team they can all fully support.

Make sure everyone understands the common goal

Your executives must agree on the goal that’s really before them: creating a leadership structure that lets the turnaround continue and flourish. They’ll be tempted to include a goal like, “reach an accommodation where we three get what we want.” While that’s win-win for the individuals involved, it neglects the fourth player: the greater life form known as The Company. The company’s health affects everyone else working there. Keeping the company well fed and happy is more important than the personal whims of the vice presidents.

In the book Good to Great (HarperCollins, 2001), Jim Collins’s research shows that business leaders build the greatest companies when they put company interests ahead of personal interests. If each VP defines winning as “I get to be CEO,” then win-win is impossible. But since your VPs are surely great CEO material, they all know that a healthy company is the goal, not personal status and power. So make sure they abandon the goal of win-win and instead shoot for healthy leadership structure.

Your executives should keep one thing in mind: If the CEO slot hasn’t actually been awarded yet, their behavior now is part of their audition. If they’re tanking company morale because it looks like they won’t get the job, they’re demonstrating their unfitness for the position.

Introduce the brutal truth

The brutal truth, part one: When three people vie for the top spot, two won’t get it. Period.

The brutal truth, part two: The execs must work as a team and support each other. If they won’t, some of them will have to go—and it won’t be the CEO. All three were happy being VPs when they joined; it’s their elevation of one to CEO that’s causing the problem. The passed-over execs need to find a way to support the new corporate structure or leave. There’s no place in an executive suite for members who won’t do their job.
(Oh, yes… If they leave, don’t give them severance! By punting on the hard work of forging a strong team, they’re not earning their salary, much less anything more. You don’t want to send the message that divisiveness is a great way to collect a golden parachute.)

If they decide they want to stay and forge a strong team, it’s time to help them redesign their attitude.

Clear the air of emotional crud

Your executives may spend their time posturing rather than facing the tough emotions that underlie the situation. They need to confront and resolve the real emotional issues in order for the team to function.

Sometimes, just the chance to voice disappointment is enough. Emotions are often most troublesome when they don’t get to run their course. We may consider some emotions (discouragement, worthlessness) so mortifying that we never learn to acknowledge and move past them. But blocking an emotion before listening to it rarely lets us move on gracefully.

Ask your execs to use their feelings to get to their underlying motivations. This can get into sensitive stuff, so they can do this privately and just bring the result to the meeting. Have them recognize and acknowledge their feelings about the situation. Then have them ask, “What is this emotion trying to tell me?” They can follow this thread to find the real issue underlying the bad morale. That issue can then be brought to the group for discussion.

Emotional rescue

This section is based on my experience with emotions, not on any therapeutic or counseling models. I’m assuming your morale problems come from “everyday” emotional reactions. Severe emotional issues may require therapy. Here are some examples on how I might respond to these emotions.

I feel jealous. Jealousy means someone else has something that you want. Wallow in it for a few minutes, and then realize that someone else’s good fortune isn’t your misfortune. Behind jealousy is “I’m not getting what I deserve.” Sadly, that might be true. Welcome to reality—life isn’t fair. Maybe you deserved the CEO spot, maybe not. Either way, jealousy isn’t healthy for you or the team. You were happy as a VP before. Be happy now. If you can’t, consider therapy or coaching. The issue for the group: how to make sure that each person feels he or she is getting the rewards he or she deserves.

I feel betrayed. Betrayal means someone didn’t fulfill a promise. Who promised what? Be precise. If the board promised you’d be CEO and they didn’t follow through, you may have a legitimate complaint. If a board member mentioned you were in the running, you may have read a promise into that. Talk through the promise and subsequent events with your alleged betrayer and clear the air. Often, however, betrayal is a neat smokescreen for emotions like discouragement or worthlessness, which may be more awkward to confront.

I feel discouraged/small/worthless. Feeling discouraged means you aren’t getting results, and you’re internalizing the cause. Does being passed over for CEO mean you’ve hit your competence limit? Not at all! Promotions are only vaguely related to competence, even in the best of times. We’re raised to believe that every little thing that does (or doesn’t) happen to us directly reflects our ability as human beings. The real world is more complex and usually a lot more arbitrary. If three equal candidates compete for one job, two must be passed over. It’s not about competence; it’s about only having one job opening. The issue for the group: how to identify the executives’ competencies and meld them into their jobs.

I feel contempt. Contempt comes from believing that someone is incompetent in an area you’re super-competent. If you think the new CEO is an incompetent boob, you won’t buy in to the direction, strategy, or tactics he or she is setting. It’s time for persuasion! The issue for the group: Make sure the strategy reflects the entire team’s expertise and buy-in. Spend some time airing doubts, questions, and concerns. Create something that you can believe in. If you can’t, though, it’s time for separation. An executive’s job is to help a company succeed. While the current CEO’s plans may not guarantee success, executive friction, in-fighting, and sabotage will virtually guarantee failure.

I feel hopeless. Hopelessness just means you’ve stopped anticipating future success. So start now! Create a rich image for yourself of how you can make your current position a job that really lets you shine. The issue for the group is how to make that happen.

I feel anger. Anger means you feel threatened. It often comes from fear: fear of survival, of being unworthy, of loss, etc. Dig around for the underlying fear. You can handle some fears on your own. If you feel your survival is threatened, a little financial planning may make it obvious that a $200,000 salary is a tad above the poverty line. Some fears can be brought to the group. If you fear you’ll lose respect because you weren’t promoted, the issue for the group would be: How can you be sure you are still portrayed and treated respectfully?

I want more money, status, and control. Who doesn’t? If you can’t marry into it and didn’t get this promotion, stop griping and start building. Complete the turnaround and help grow the business. Growth brings more money, status, and control automatically. If that’s not enough, reopen compensation negotiations. If you’re only in it for the cash, it’s worth rethinking the fit between you and the company. The past few years have given us dozens of examples where executives who care only about the dollars can kill the business faster than any competitor.

Create a team they can align behind

Once level heads have prevailed, everyone has to ask the hard questions: Can I support the new CEO’s plans and strategies, and can I commit wholeheartedly to my current position as I do so?

If anyone answers “no,” it’s time to start negotiating graceful exits. At the end of the day, an executive who can’t get behind the company must be traded in for a better model. They’ll make decisions for their own best interests, and not for the business’s long-term benefit. “It’s all about me” behavior can be fine at manager or director levels but, especially during troubled times, it can tear your company apart at the leadership level.

Your situation is a tough one. The vertical morale problems will probably be OK once the top levels get sorted out. But this is a case where it’s not about what’s rational; it’s all about emotion. The top team has to settle its issues and back the CEO to heal any rifts in the company. The CEO has been chosen. Strong emotions are natural, but the solution is to use them to identify issues that can be addressed, and then move on. Whining changes nothing, and certainly doesn’t build a healthy company. It’s time for the team to buy in or say “bye-bye.”

© 2004 by Stever Robbins. All rights reserved in all media.

Is Belief Crucial To Success?

QuestionDo I have to believe in what I am doing in order to be successful at it?

AnswerThe power of belief is the stuff of legend. In The Wizard of Oz, Dorothy must defeat the Wicked Witch of the West to build enough belief so the magic ruby slippers will send her home. But in real life, belief involves both more and less than Dorothy endured. Depending on what you’re doing, belief may be optional. But even then, belief makes life much easier. And if you’re leading an organization, belief is one of your most powerful tools.

When you believe, it comes out in your body language, tone of voice, and facial expressions. Even great liars can’t fake it for very long; they always give it away somehow. Poker players call this a “tell.” It’s how you know someone’s bluffing. They may shift in their seat, play with their ring, or otherwise reveal a lack of sincerity.

You’ve seen it in personal life. When my significant other invites me to the ballet, I say, “yes” in the interest of domestic harmony. But the insincerity of that “yes” is loud and clear. When we go out to an event we’ll both enjoy, though, we both know it, and it strengthens the relationship.

It’s the same in business. When people don’t believe, their relationships fade a bit. A mid-size company had employees who had only contempt for the CEO and his business practices. Watching them give job interviews was a hoot. Candidates asked, “How do you like it here?” They replied, forced through a fake smile, “It’s a great place to work. I love it so much.” They gave conflicting signals, and the interviewees knew something wasn’t right.

Usually, other people notice the lack of belief but don’t consciously know how to interpret it. They may think you don’t trust them, or you’re distracted, or the deal at hand is a fraud, or that you’re just distant. But however you slice it, they won’t feel a strong connection, because you’ll be holding back.

If success demands good relationships with customers, vendors, and employees, a lack of belief can be a problem.

Belief brings commitment and persistence
Is there anything you love so much you’d do it every day and enjoy it every time? I’ll bet it’s something you believe in. When we believe in a vision, we have the energy to keep pursuing it. We do what it takes to help bring the vision to life.

If your company is treading water, creativity and persistence may be optional, but for growing companies and companies in competitive environments, innovation and problem solving are keys to success. When you believe in a possibility of achieving something, you’ll bring your full creativity to bear and will pursue it relentlessly. When things go wrong, you’ll be out in front with new ideas, schemes to hatch, plans to make, and alternatives to pursue.

A nonprofit’s board met for a day to brainstorm strategy. Their organization wasn’t doing as well as they wanted, and they needed some serious survival plans. People sat around coming up with a vague thought here and there, but the conversation went nowhere. Finally, a member spoke up: “I just don’t believe in the goals we’ve chosen.” After lively discussion, the group chose new goals that everyone believed in. And suddenly, there weren’t enough flip charts to hold all the new ideas.

When you doubt the organization or its goals, it’s an ongoing struggle to stay motivated. You think, “This must get done, even though I don’t believe it’s the right thing to do, or a worthwhile thing to do.” Naturally, you’ll disengage and just go through the motions—what psychologists call “cognitive dissonance.” Much of your energy goes to fighting the tension between “must do” and “don’t believe” instead of going directly to finish the task.

When you’re completely aligned, you’ll be at your best, body and soul. If it ends up that you don’t reach the goal, it won’t be for lack of trying!

Belief impacts morale—especially for leaders
The biggest issue with belief is morale. Most of us just aren’t very happy when doing something we don’t believe in. We might resign ourselves to it, but futile resignation isn’t exactly a fun place to live day by day. Furthermore, it’s probably not going to bring out your best.

Psychologist Marty Seligman relates in his book Authentic Happiness (Simon & Schuster 2002) that we’re happiest when using our personal strengths to overcome challenges, all while doing something we believe makes a difference. Did you catch that last part? People are happiest in a job they find worthwhile. In fact, people often work harder for fewer rewards for causes linked to deep belief.

If you’re in a leadership position, it isn’t just your morale that will tank; everyone who works for you will feel it, too. A leader whose heart isn’t in it is deadly to a group. Even the group members who want to commit will feel like they’re committing to a phony cause.

People watch leaders to know how to behave. They don’t listen to their leaders; they watch. If you’re listless, if you’re holding back, if you’re putting in 50 percent effort, they’ll know, even if you don’t. Your behavior will signal everyone around you to disengage.

In coaching, this comes up over and over. An executive wonders why their team isn’t performing. I’ll ask, “What would a high-performing team look like?” They’ll tell me, showing all the enthusiasm of a slug on a salt lick. When I point out the discrepancy, we suddenly recognize that the team is performing—exactly to the belief level of the executive. Change the executive and the team changes as well.

After all, if you don’t believe, how will you be able to recruit and lead a team who does?

Sometimes, you don’t need belief to succeed
So sometimes, believing is critical to success. But plenty of jobs don’t depend on forming deep relationships, working with commitment and creativity, or leading people. If you’re in a transaction-oriented environment, belief is probably optional. And let’s face it; front-line retail jobs rarely require belief. Those jobs have massive turnover, and no one expects spiritual engagement from a fast-food checkout person.

But I’ve been talking only about belief, when you also asked about success.

Many people think success means making a lot of money, getting a lot of status, and having a lot of power. It turns out they’re wrong. Studies on success show that above subsistence level, more external “stuff” doesn’t mean more happiness. People who feel unsuccessful keep finding new ways to feel that way on different playing fields. “I don’t have the money for a new TV” becomes “I’m not getting a high-enough return on my investments.”

The people who really feel successful get their success as much from the process as the end results. Yes, they may want money, power, and status. But they get it in ways they enjoy, so they feel successful all along the way. Really thoughtful people use a “balanced scorecard” approach, and consider friendships, community, family, and, yes, doing something they believe in as essential ingredients in a good life.

Warren Buffett, history’s most successful investor, says he invests because he loves it. Even as a kid, he counted vending machine bottle caps to understand what was selling. His love led to persistence, skill, and finally, billions. He lives a modest lifestyle with his wife in the house they bought forty years ago. His joy comes from living, not having. He could have power, status, and huge skyscrapers bearing his name. But he wouldn’t enjoy that. For him, success is eating at McDonald’s and drinking Cherry Coke—well within the means of us non-billionaires. And, of course, investing, which he’d be doing it even if it didn’t pay.

So can you make money without believing in what you’re doing? Sure. In relationships, creativity, and culture building, belief helps. But either way, only you can answer the real question: Do you need belief to feel successful? And if the answer is “yes,” what are you waiting for?

© Stever Robbins. All rights reserved in all media.

Why Diversity Is an Opportunity

QuestionHow should we think about the importance of diversity, and how best to understand and value cultural differences?

AnswerDiversity, the misunderstood child of the Age of Aquarius and Political Correctness, is an incredibly powerful tool for an organization. Diversity brings thoughts, feelings, and cultural knowledge that benefits decision making, marketing, operations, culture-building, hiring, firing—just about everything a business does. But its true power comes out only when diversity starts at the top and pervades the business. Alas, most businesses score dismally when it comes to understanding and using difference.

In my experience, many diversity programs are really anti-harassment programs. Someone says something offensive about a different race, gender, religion, geographic origin, or sexual orientation. The diversity police jump in and mandate “diversity training.” It’s a good thing they jump in—inaction sends the wrong message and can bring big lawsuits—but the motivation and the training many times boils down to, “Don’t say these things because people get upset.” In really enlightened companies, diversity training happens before it’s needed, so that first incident can be avoided, too.

Don’t get me wrong; diversity training can produce some effect. The true bigots who don’t intend to change at least know now which conversations to save for behind closed doors. People who are ignorant but care will be able to change a bit. But don’t expect much benefit beyond a decline in harassment.

What is diversity?

Diversity takes many forms. We mostly notice and legislate the visible stuff: people have different skin color, talk with different accents, wear different clothes, have different (dis)abilities, are different ages, have same-sex partners, practice different religions, and use different hands when they write. Most discrimination targets the visible stuff, and many anti-harassment programs help people understand that despite surface differences, deep down all people are worthwhile and valuable.

Surface diversity is what we deal with when we wish to avoid problems. We teach people to value the person within. But it’s the diversity within that brings great benefits. Inner diversity includes the Psych 101 stuff—different personality and work styles, brain dominance, etc. More subtly, it includes different thinking styles and different fundamental assumptions about the way the world works.

It’s easy to assume outer diversity signals inner diversity and vice versa. Not necessarily. A professor once remarked within my earshot, “Never again will most of these students be somewhere with such diversity of race and geographic origin. And never again will they be somewhere with such uniformity of thought and attitude.”

Inner diversity gives the biggest bang for your buck. Personality and behavior style profiles are widely used to help groups identify and talk about inner differences. Not only can the distinctions help explain why people clash, but used in team building, they can help you balance the skills needed to finish a project. For example, one profile distinguishes “people people” from those who are task and process oriented. If you were designing a customer service call center, you would involve both profile types so your systems are efficient but also give a good interpersonal experience.

Profiles can also help match people with jobs. Using profiles, some companies discover all top performers share common attributes. With that knowledge, they can do a better job matching. If Myers-Briggs ESTJs make the best salespeople for your organization, your chronically dissatisfied engineer whose profile is ESTJ may become a huge resource if given a chance in sales.

Cultural differences and deep learning

Though personality diversity is valuable for team building and job matching, even different personalities from the same culture will share a common set of cultural assumptions. The invisible diversities of culture, religion, and value systems are where you can reap real business benefit.

Cultural differences are where you discover the most basic assumptions that you’ve never even questioned. This causes problems; questioning deep assumptions can feel very threatening. So threatening, in fact, that reactions are defensive bordering on violent. But if you can manage the emotion and create a safe space to play “what if,” you may find your thinking changes dramatically.

A reader wrote in last month, “Americans work 50 percent more per week than people in my country and take four weeks fewer vacation, yet they don’t get more done than we did in my country.” America has cultural assumptions about working a lot and measuring it by face time. A foreigner can point out that there’s another way. An American company that listens and learns might be able to offer six weeks of vacation and short hours to attract outstanding employees. (And I know of at least one company that has done this.)

The Dalai Lama points out in his book The Art of Happiness that Eastern cultures believe in reincarnation. As such, they approach even daily tasks very differently. So I tried it (believing, that is, not reincarnating). Believing in future lives removes a lot of my daily stress in this one and also gives me a much longer-term time horizon. Suddenly, consuming my grandchildren’s oil seems like a bigger deal, because those grandchildren might be me, reincarnated!

A company that explores a reincarnation belief might end up taking a long-term view on their products. Seventh Generation does just that. They produce environmentally friendly household products. Their cultural source isn’t reincarnation, however. The name refers to the Iroquois Confederacy practice of considering consequences seven generations out.

Cultural differences can hint at new markets. Gloria Estefan recognized that the American music business is highly English-centric and has built her own business empire in America’s Latin and Spanish-speaking populations—populations almost invisible in mainstream media. The wildly popular reality TV show, “Queer Eye for the Straight Guy,” has helped the mainstream world enjoy “gay sensibility,” with USA Today reporting (March 3, 2004) that sales for products mentioned on the show soar as much as 300 percent.

Challenging an assumption doesn’t automatically point to opportunity, but it’s a start. A European colleague proposed hiring me to speak in his country. I asked, “Where should I stay? What are the good areas of town?” He was amused. “A very American question!” he proclaimed. “Have you ever considered a town might have only good areas?” Um, no. I never had. Even before our current fear-filled time, “bad areas of town” were a given. Knowing it’s possible prompts me to ask how to make it happen. Is there a business there? I don’t know. But an urban planning or civil engineering firm might find a few trips overseas could trigger some great ideas.

Some of the ways to extract diversity’s benefits:

  • Identify previously overlooked cultural markets.
  • Create new products for existing markets.
  • Change corporate culture to attract a different employee mix.
  • Form relationships and making inroads internationally.
  • Get things done in better ways.

“Comfy” diversity programs held for compliance reasons that skirt the real issues waste time and money. Your leadership challenge is to draw out the differences and help the group safely explore what those differences suggest about the business. You might find new opportunity, but either way, it’s simply the right thing to do in an increasingly diverse workforce. It helps people feel valued and more worthwhile, and at the end of the day, why do we even have business if not to have more worthwhile, valuable lives? That’s my underlying assumption, and if it isn’t yours, your first diversity assignment is to try it on for size.

© 2004 by Stever Robbins. All rights reserved in all media.

Minimizing the Risks of Leadership

Question A leader can be brought down by a single follower’s actions. How can a leader reduce the risk?

Answer We dream great dreams and set goals so huge we need organizations to achieve them. Where people organize, leaders emerge. We want to be those leaders.

Leaders become the focus of an organization’s results. When things go right, leaders get the credit, glory, and money. Jack Welch receives the praise, but his accomplishments took 305,000 employees twenty years to produce.

When things go wrong, leaders can take the fall. The Middle East peace process is regularly derailed by disgruntled people largely acting alone, and it sets back the efforts—and eventually credibility—of the leaders by decades.

Good decisions minimize risk

One way to decrease downside risk is by helping your people make good decisions about what and what not to do. Sales programs teach that decisions are made with emotion. Logic is only used to justify the decision. So you’ll have to work with the emotions of your organization. (By the way, this is why I believe the current compliance fad won’t stem unethical business behavior. Compliance is about setting up and following rules. Rules are left-brain, logical thinking. Without addressing the underlying emotional drives, the pressure to win by any means possible will eventually resurface.)

People take emotional cues by watching their leaders. They don’t listen to speeches. They don’t read laminated wallet-cards espousing values. They learn how to act by watching you, especially when you’re off-balance and your guard is down.

So first off, give your own values a good spring cleaning. The last few years have shown us business leaders who have acted immorally, unethically, and sometimes illegally to succeed in business. If you set a bad example, people will follow, you’ll get into trouble, and frankly, you’ll deserve it.

Do you charge occasional personal expenses to the business? Do you develop a blind spot when your company violates a little regulation here or there? “After all,” you’ll say at your arraignment, “it’s no big deal. Everyone does it.” Beware! Your organization will be watching and magnifying the values you demonstrate. So clean up your act now. You don’t want John Grisham turning your story into a best-selling novel.

You want your company infused with clear, consistent values that people can use to make decisions. Johnson & Johnson’s credo clearly spells out J&J’s values: customer well-being, employee well-being, community well-being, and shareholder well-being. In that order. It’s so clear that every employee can use the credo to know when to act, and when to stop. Given the credo, J&J’s famous Tylenol recall makes complete sense.

Propagate values via stories

People learn values through stories. The way a story’s hero behaves tells listeners what values are Good. The Evil Villain demonstrates Bad Values.

Businesses develop myths that illustrate their values. Nordstrom’s devotion to their customer return policy shines in the story of an employee giving a customer a refund for returning tires, even though Nordstrom’s is a clothing store. A FedEx employee made good on the overnight promise by renting a helicopter in a storm to deliver a single package on time. These are the legends that convey the important values.

Telling stories isn’t enough. Watch for people who embody good, values-based decisions and give them public recognition. Celebrate not only their results, but the values they’ve shown while getting the results.

On the other side, come down quick and hard when someone knowingly crosses the line. If it’s bad, it’s a firing offense. And don’t reward the right outcome when it’s reached by doing the wrong thing. If a salesperson makes quota by lying to customers, don’t say, “Shame shame” and still pay their bonus. That’s a mixed message, and a mixed message sends no message. Your salesperson—and everyone else—will notice the bonus and ignore the shame. Only pay them for the sales they brought in ethically. If they quit, celebrate; that’s one unethical salesperson who won’t be landing you in jail. If they shape up, celebrate; you’ve made a difference. Either way, you’ve sent a powerful message that doing things right is important.

Discuss decisions to surface values

Of course, you’d rather just hire good people to begin with, people who act with integrity once they’re on board. You can’t just ask someone in a job interview what their values are and expect an accurate answer. Most people don’t know their values. But decisions are where values kick into action. So ask candidates open-ended questions about past decisions (recent past behavior predicts future behavior fairly well). Their answers will imply values. If they don’t have relevant past experience, hypothetical questions are next-best. “There’s a regulation that is keeping you from doing your job. Everyone knows the regulation is there for historical reasons only, breaking it won’t hurt anyone, and it will result in great profits for the firm. What do you do? How do you justify your decision to your manager?”

These are process questions; they ask for reflection on how things get done. Encourage regular process discussions. They get people used to thinking about what’s OK and what’s not. If business is fast-paced or requires big risks, openly questioning how business is happening make it more likely to bring outside-the-bounds schemes to light early.

Ignoring process and focusing solely on outcomes is dangerous. It’s one way to encourage deliberate tomfoolery. In reports of Enron’s collapse, Jeff Skilling never told employees to act unethically. He simply demanded extreme results and made it clear any behavior was acceptable to produce them. In the recent Abu Ghraib prison scandal, the alleged command to “soften up” prisoners for interrogation turned into torture. A simple process comment could have avoided the scandals: “By the way, here’s a copy of the Geneva Convention. Stay within these bounds.”

Your goal is to get people feeling accountable for their own actions and making value-aligned judgments. Trader Nick Leeson brought down Barings Bank through ongoing fraud. In his book, he’s amazed that his bosses didn’t stop him. Yes, their oversight was shoddy. But their preparation was even worse. Those bosses never cultivated Leeson’s feeling of personal accountability for his actions. Even after serving prison time and writing his book, he was still looking to them to be his conscience.

You grow personal accountability by treating people as adults. Discuss their decisions frankly. Make them understand you’re counting on their good judgment. Give them authority, but only when you’re confident they can use it responsibly. If things go wrong, hold them accountable for recovery and learning from the mistakes. And beware of micro-management! Telling people every detail of how things must get done lets them run on automatic, rather than take responsibility for making the right choices.

If you haven’t the luxury of being sure of people before handing them the reins, try surprise “decision audits” from time to time. Drop by a project, ask about recent decisions, and discuss how those decisions were made. Don’t micro-manage, but simply take in information to understand how values are playing out. Have your managers hold similar audits, and as long as they’re taken seriously, you’ll build a culture that expresses your values.

Ultimately, that’s the best you can do. A leader will always be responsible for the sins of the followers. Alas, that’s the nature of the job. We can tell people the rules, but we minimize our risk through values as well as rules. By modeling clear values, discussing them, and incorporating them into the way decisions get made, we can make it much more likely our organization will do the right things.

© 2004 by Stever Robbins. All rights reserved in all media.

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