Tag Archive for: Leadership

Do You Know Your Dilbert Premium?

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Do you charge a premium for dysfunction?

 

I love Dilbert.

The classic comic strip by artist Scott Adams speaks to truths of the corporate environment.

As a matter of fact, the only people I have encountered who dislike Dilbert tend to be the ones whose behaviors the comic strip captures most perfectly.  In other words, they are offended.

What the Dilbert comics show best is the dysfunctions that crop up from management platitudes and organizational shortcomings.

They show the kind of dysfunction that overwhelms organizations…even some of the best organizations you know.  Leadership that believes “do something” is the answer exists in many, many forms.

I get a kick out of Dilbert’s send-ups of such stuff.  It puts on paper some of the rather ridiculous aspects of corporate environments (oh, and consultants) that make life miserable for people fighting the good fight.

Which has me thinking…

I like to think that a healthy part of running a healthy company is having people who value their own self respect and the dignity of others.  Those two things are really reciprocals of others.  I respect myself too much to be unethical, and I respect your dignity enough not to ask you to be.  Corporate environments that don’t foster self respect and dignity are worthy of leaving, as I’ve written before in many forms.  That’s a line that I won’t and I hope you won’t cross.

The real interesting question is about Dilbert dysfunction that falls short of the dignity line. How do you handle that? Do we need to define our own “Dilbert Premium” in our lives?  Do we need to place a price on dysfunction?

An anecdote

At a conference of consultants I recently attended, one of the participants related a story of a client.  It went something like this (and I’m quoting for effect, to be clear, I’m making up the quote):

“I was proposing on some work for a client who is known to be a real pain about fees and payment and scope. So, I was really careful to propose a lower than reasonable price for the work…”

What? Yes, that was my reaction.  What, you say?  You proposed a lower price for a potential client who is known as a pain in the rear?

Having served a few clients who were (a) known as jerks and (b) fulfilled that promise, I firmly believe that this guy didn’t have his Dilbert Premium worked out.

What is the Dilbert Premium? 

Think of the Dilbert Premium as the price of wading into dysfunction.  For a professional services provider, this is easy.  You know you have to go to the bottom of the septic tank to solve the problem?  Price accordingly.  Workers of this type are episodic.

The definition, then, of the Dilbert Premium is the increment or decrement you charge to your market value for dealing with particularly toxic or challenging environments or particularly attractive ones. 

Yes, that’s right, it works in reverse, too.  A lot of people make that calculation:  I like my job and the team, so I’ll take a pay cut. Still, it’s stunning to me how many people dislike the work, the people and the pay, and make no move whatsoever.  And by this, I mean seasoned professionals who are quite good at their jobs.

So, you work in a challenging business environment at a tough job with people you don’t like.  Name your price for your Dilbert Premium.  Is it higher pay? A better immediate working team?  Perhaps a change in job scope?  Those are all variables to consider.

How much do you charge to live with dysfunction? Do you just do your job, tolerate boors, and never ask for a raise? Are you expensive, or cheap?

I will write at some other point about how organizations’ cost of talent is directly related to reputation, growth, and leadership culture.  This one, however, is on you:  Do you price yourself appropriate to the dysfunction you will be asked to tolerate?

A second anecdote

I once took a lower paying role than an offered alternative on the theory (supported by historical evidence) that the Dilbert Premium would place the lower paying role far above the alternative; and, I was right.  The work, the people, and the pay were all fine. I never looked back.  If this is you, congratulations.

However, things do change, and as dysfunction mounts, you have to assess whether your assessed Dilbert Premium was, in fact, right.  If it was not…then look for the right time to make a change–a raise, a change in job scope, a change of team.

Ask yourself:  Do you charge a premium for dysfunction?  Should you start now?

The Most Important Distinction A CEO Makes

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As CEO, be explicit about the state of conflict you face, and only go to war when it’s fully warranted.

 

“The board looks at us like we are the Navy Seals,” the executive told me. “We agree on a number and go get it—year in and year out—and we need someone on the team to soften that view.”

The exec was looking for a “softener” in the form of a person who could put a strategic wrapper around what amounted to a reputation for being single-minded financial performers. The Navy Seals comparison might have even been a little strong since the half-dozen or so Navy Seals I know would say that frogmen rarely just “follow orders.”  That’s what the Marines do, and they do it well, but it’s not as sexy to compare yourself to leathernecks.

But I digress. The gist is that the “person” the executive was looking for would be sorely misplaced. Let me tell you why.

Wartime vs. Peacetime

When it comes to C-level executives, there really are two different leadership mindsets: wartime and peacetime. This is covered very well by author, venture capitalist, and former CEO Ben Horowitz on his blog, here. I’m going to take a slightly different angle than Ben and say that a great executive can dial up both mindsets, but he or she has to be explicit about it. Specifically, in wartime, there is no tomorrow, and in peacetime, it’s all about tomorrow.

I write a lot about respect and healthy strategic outlooks for high-performing organizations, but I don’t spend a lot of time on financial and value-based performance. Why?  Because it’s a prerequisite; If you don’t create value or enable it as an executive, you’re probably not going to cut it. As I wrote nearly a year ago: Performance is the prerequisite. The latest management article on how mindfulness unlocks your team’s performance is all nice, but financial performance is where the median CEO is going to be evaluated. So, balancing performance needs and organizational “health” is, fundamentally, what value-based strategy is all about. In the purest sense, and in the short term, performance and health can be highly conflicting, and that is why executives—really leaders of any stripe—need to manage the balance, which is where the wartime/peacetime mindset conflict comes into play.

A wartime mindset means that decisions get made, by me, every day. It means I don’t have time for debate and discussion, that emotion and, yes, intensity are a part of the puzzle. In wartime, there is no comfort in comfort—it’s win or else. You fight through injury.  You forego pleasantries. Wartime mindsets are most appropriate in business during times of economic crisis, customer crisis, or product transition/launch/retirement, during deals, and, most importantly, during times of competitive attack. As Horowitz puts it, during times of existential threat.

In wartime, a leader makes an objective or else. Take that hill!  Hold that beach!  Cut 50 FTE!  Close that deal!  They are all the same. Mind if I curse? Was I rude? Oh, you didn’t like that I threw that document on the table? It bothers you to have to work past 7?  Comes with the territory. It takes a strong stomach. Suck it up. It’s wartime.

A peacetime mindset is one of building. It means that studies can be done. It means that I might defer a decision for a year (or more in some companies) because…bluntly…I don’t have to make it. It’s where investment and improvement come into play. It’s the mindset that focuses on people’s careers, the future of the company, and the weaknesses that need to be addressed (but not until the next employee conference). As Horowitz puts it, it’s the time to “focus on expanding the market and reinforcing the company’s strengths.”

It is a mistake to think of wartime as better than peacetime. They are different, and executives must understand the difference. Some will be much better leaders in peacetime than in wartime, although that’s beside the point.

What’s important is that great companies are built  with a peacetime mindset and sustained with a wartime mindset.

And so, the most important distinction

Executives, especially CEOs, must be explicit about the state of war a company is in; that distinction drives all others. Why must the CEO be explicit?  Because it’s not always obvious to others in the organization. To use the U.S. military’s old DEFense CONdition ratings:  When the CEO is at DEFCON 1 (signaling nuclear war) and the organization is at DEFCON 5 (signaling peacetime), things get discombobulated.

A CEO might be at war based on things the CEO and only the CEO knows, while the rest of the organization might be at peace because, well, things seem to be going well. This is a recipe for disaster as the CEO continually churns through people, disregards ideas,  and thinks short term without real rhyme or reason. If you operate as if it’s wartime and everyone thinks it’s peacetime, you will demoralize your people. CEOs who have overweening focus on the short term (layoffs, cost cutting, and general pressure) while extolling their company’s strong financial performance year in and year out run into this problem. They create cognitive dissonance in the organization.

A CEO might be at peace in an organization that knows it’s at war, and then the opposite thing happens: the CEO is fiddling with transformation or branding while the customer base is burning. If you operate as a peacetime CEO and everyone thinks it’s wartime, you will lose credibility quickly. There’s a reason we still talk about Nero: a CEO who fails to acknowledge that there are existential threats will lose his or her organization.

That is why leaders, CEOs and others, need to be clear on how they view their worlds. They need to be clear that DEFCON 1 behavior (slashing product lines and replacing people) is only warranted by DEFCON 1 threats, so they need to get people on the same page. Everyone also needs to be clear when DEFCON 5 behavior (delaying decision on a project viewed as critical by others or by a faction within the company) is warranted as well.

This is the most important distinction a CEO will make in the day-to-day operation of a company:  Wartime or peacetime.

A cautionary note on “artificial” wartime

Yeah, but we want a team of warriors, you say. So you continually keep the pressure on through artificial means—even lying to people about the true state of things to make them seem more dire—in order to ensure that people keep an edge or a warrior mindset.

I get it. It’s sexy, like saying you’re a Navy Seal. But it’s also dangerous.

From analyses on the topic of combat fatigue, it’s a known fact that normal people cannot sustain a wartime mindset for an extended period of time. Those who are in active, continuous combat for more than a month generally start to lose effectiveness. Those who are in active continuous combat for more than a couple of months typically become psychiatric casualties. This is true in actual combat, and I’d propose that it’s true in figurative combat.

Dave Grossman, a researcher on the science of combat and killing, outlines from an earlier study that after the beaches of Normandy in World War II, 98% of soldiers who survived constant combat for 60 days had become psychiatric casualties. The other 2%?  They were characterized as “aggressive psychopathic personalities.”

Let that sink in for a second.

The negatives of manufacturing a wartime mindset for your organization are legion. Not only do you (1) place focus on survival vs. building as outlined above, you (2) create an environment in which normal people struggle to thrive for any extended period of time and (3) facilitate the rise of psychopathic personalities who actually can handle the sustained pressure.

It makes no difference whether the artificial pressure is placed by the CEO herself or by some proxy, another C-Level executive or consultant tasked with “cracking the whip” so that the CEO can be the good cop.

So, be explicit about the DEFCON you face, and only go to war when it’s fully warranted. Again, this is the most important distinction you will make as CEO.

While executives (like the one in my opening story) may recognize that their boards see them as mercenaries who propagate a state of war because they act like it, they can’t solve that by adding peaceniks to the team; the peaceniks won’t be heard if the entire organization is charged for combat or thinks the C-level executives only expect combat mentalities. Culture, as I’ve written before here, will crush even the best change agents. The executives have to acknowledge—themselves—a credible state of war or peace within the organization and actually live it out.

And if they can’t change?  Well…

How Is Your Team Like Your Teeth?

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A team can be naturally beautiful, or just pretty on the outside…Know whether your team has good hygiene, or just a good set of veneers.

 

One of the striking things about celebrities today, particularly U.S. celebrities, is that they rarely have questionable teeth. Their teeth are all pearly white, straight as a keyboard, and larger than life.

How can that be?

I mean, anyone need only look as far back as the 1980s to see natural teeth on actors of all types; perhaps the best illustrations would be Tom Cruise’s and Kelly McGillis’s choppers in Top Gun.  They weren’t bad by real people’s standards…they were real.  But by today’s standards, they were…subpar.  Both actors have taken steps since then, and both doubtlessly invested plenty of cash.

Today, even the lowest level budding stars get work done on their teeth (and other things) to the point that it’s hard to tell what’s real anymore.  The fundamental question one might reasonably ask is:  Who has good hygiene vs. just a good fixer?

That doesn’t matter when you’re picking your movie stars, but it does matter when you’re picking your next team, and that’s the point of this post.

Your teeth, your team

Like the glamorous celebrity’s grill, the team you are joining might be forged out of natural beauty, strong roots, and superb genetics, or it might be held together with a high-tech patchwork of braces, veneers, and chemicals.  It might be the result of great hygiene and spectacular care, or it might be the result of a shortcut to the local strip mall for some tenderness.

Is there a difference?

When it comes to teeth?  No.  But when it comes to your team?  Absolutely. That team you’re thinking of joining needs roots, genetics, and good hygiene.  It needs good relationships, alignment, and constant care.

But how can you tell whether your team is composed of veneers held by a brace?

Easy, test for hygiene.  Test for relationships, alignment, and—yes—joy; there is no joy in a team of artificial players.  Test for values. Ask whether team members regard each other as people; ask how they spend their time out of work. Plenty of teams will talk about concepts of doing good, values, camaraderie, and such, but those are veneers.  Fewer teams can point to times when fundamental values have been challenged and how they resolved the challenges.  That’s where teams are made…the defining moments.

This is a short post that is more about your career and your personal choices than it is about the team you’re a part of.  It’s rare that a single member can change the position of an entire team unless that member is the leader. So when it comes to your team, you can either grin and bear the reality of a team of veneers, or you can smile at the opportunity to be a part of something deeper.

Now it’s your turn:  What does a team you can smile at look like?  Leave a reply if you have a moment.

On Simplicity: Curly Got It Wrong

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Reducing a life or business strategy to one thing leaves too much out.

 

Remember the movie City Slickers? Curly was the crispy, gruff drover.  Played by the late, great Jack Palance in an Oscar-winning performance, Curly is in some minds immortalized for his advice to Billy Crystal’s character Mitch in that movie; it was his philosophy of life.

The exchange goes like this:

Curly: Do you know what the secret of life is?

[holds up one finger]

Curly: This.

Mitch: Your finger?

Curly: One thing. Just one thing. You stick to that and the rest don’t mean shit.

Mitch: But, what is the “one thing”?

Curly: [smiles] That’s what you have to find out.

The secret of life is figuring out your “one thing.”  That’s what Curly had to say: Find the one thing, and the “rest don’t mean shit.”

But you know what?

Curly was wrong.  Reducing your life, work, or strategy to one thing leaves out too much, and it also leaves out the art of having to do more than one thing.

Simplicity, then, is too simple sometimes.

Life should be as simple as possible, and not one bit more simple.  That means that saying life is about one thing is probably insufficient for anyone who takes the time to read this blog.

I know executives who say that their “one thing” is financial performance. I know others who say it’s their people. I know others still who will say it’s their faith. But I don’t know a single one who can do one thing to the exclusion of all others and find success.  It may be true that none of us can truly serve more than one master, but it’s also true that we all have to attempt to do so.

That’s where too many executives fail: they talk simple, but life isn’t simple. They say, “Just grow the company and all will be fine,” but they end up with an Enron.  They say, “Just treat people well and all will be great,” and they end up with General Motors.  They say, “Worry about the customer and we’ll be fine” and they end up like WebVan.  Or they say, “Just do what gets us compensated,” and they turn into Lehman Brothers.

One thing can lead to dark stuff, and that’s why I’m writing this: as an antidote to “one thingism.” You may work with a one-thing executive, and that may work well for him or her at a moment in time, but for all the talk of one thing, actions have to take into account many things.

Any CEO worth her salt has exceptional focus.  That focus may be on building a team, closing a financing, developing a product, or influencing stakeholders.  Any of these could be a given CEO’s one thing, but the truth is that they have to be good at balancing their “one thing” at any given point. CEOs have to build teams, and boards, and products, and customers, and relationships, and bad CEOs get “one thingism” in their blood and never let go.

Notably, though, bad strategies do too. How often do we as management strategists find executives or their critics attempting reductionist, one-thingist views of strategy.  They get so high-level, so abstract, that they end up achieving a grand unifying theory of organizational strategy that is significant to no one.  They “one thing” their strategy to empty pablum like “focus” or “innovation” or otherwise.

Reality is messy.  Practical strategy is tough.

So, if you are working really hard to simplify and synthesize your strategy or focus, congratulations, that’s not a bad thing. A strong strategy should be reducible to simple terms, but no more simple than necessary.

In short, if you are simplifying beyond usefulness.  Watch out.

I suspect that a mountain of Dilbert cartoons could be drafted on the backs of strategy statements that state nothing.  Some jewels:

“We will be a growth company.”

“We will build a great company.”

“We will be innovative leaders.”

“We will have a winning culture.”

“We will be a community of leaders.”

Perhaps the best way I can convey this notion to more seasoned executives is to use an interesting case study:  A survey of millennials about their life goals showed that more than 80% of them had a major life goal to “get rich.”  That means they wanted to make a lot of money as a goal in itself.  This is a generation that is being somewhat venerated for its focus on purpose and meaning.

If you are on older worker or executive, with a family, hobbies, pursuits, relationships, and other sources of meaning that do not derive from your bank account, think about how hollow the goal of merely making money is to a good life.  You’ve probably had friends who have hurt themselves and others in pursuit of mere money.  Money isn’t an end (okay, you and I both might say “but it helps…”).  It’s a representation of value provided to someone else.

It’s a “one thing” that has no meaning to anyone other than the person who collects it.

And, that’s what’s dangerous about one thingism in strategy.  Your one thing (earnings growth, people development, customer service) may not matter one whit to a truly rich strategy.

Reducing a life or business strategy to one thing leaves too much out.

Now, a challenge for you:  Take a moment and leave a reply on this post about a “one thing” strategy that has or hasn’t worked.  What’s your gut reaction to this post?

Google’s Team Traits and Your Executives

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On elite teams, it’s about honor, not safety

 

Google is an interesting company to say the least.

In the midst of a behemoth company that has a very thin historical record to draw from (seriously, the company is essentially 15 years old as a player on the global stage) lies a fascinating combination of entrepreneurship, hard-core, old-school competitive behavior, and analysis of people issues.

It’s that last thing that has me questioning whether Google has gotten something wrong.  A month or so ago, Google explained the traits that make its best teams click, and here’s an article that hits on the topic; it’s a quick read. The list is a little bit ho-hum for any active observer or participant in strategic management culture development—that is, clarity, purpose, dependability—except for one piece: Psychological safety.

Psychological safety. It sounds like the latest in a long line of management theory gobbledygook, but it’s not. Google (and any number of academic papers out there, and a TED talk here) basically says that people tend to stay and produce better when they believe their teams are safe places for intellectual exchange.

I have no problem with that notion—not one. In fact, it makes good sense. If I’m being listened to on my team and not belittled for the things I don’t know, I will like it better.  Makes good sense, right?

But as a practitioner who has worked at and continues to work at the top levels of organizations, I think Google’s prescription is only half right, which means partially wrong.  And the part that Google gets wrong is the part that matters to the strong functioning of the highest parts of complex organizations—the elite parts, if you will.

The higher you go, the less “psychological safety” matters…

 

Here’s the rub: In the run-of-the-mill team, psychological safety matters.  As you go higher in the organization, people worry less about “safety.”  Safety isn’t a big issue to the average executive, or at least, it shouldn’t be; an executive who is worried about safety probably is not confident enough to be in the role.

But what does matter? Honor.

In other words, this difference in perspective between that of a mid-level team member and that of an executive team member is like the difference between a weekend rock climber and a global mountaineer.  The weekend climber is signing up for an experience for which safety is key to the integrity of the experience, and death isn’t part of the deal.

The mountaineer, on the other hand, is signing up for a gig that involves making choices that could very well end in his or her death, and bad choices aren’t even necessary for the gig to end in death.  The most elite mountaineers in the world run into bad luck now and then, and death is actually a very real part of the integrity of the experience.

Thus, such is the difference between low-level and elite teams when it comes to “psychological safety.”  Low-level teams sign up for gigs that involve performance, but not necessarily at the peril of their careers if they are wrong about something. So, a safe environment for sharing encourages risk taking and less selfish political posturing, and these are important things.

Elite teams, however, with their high-stakes choices and high-level visibility, are inherently less “safe.” A career-limiting move is always possible for executives who are actually trying to get things done; safety might matter, but what really matters for these executives is that they are part of organizations—as part of the executive team or as a CEO with a board–that will act honorably on commitments and policies when things go poorly or opinions differ.

Honor, as in fulfilling agreements and obligations—that is, fair dealing in the face of adversity.

To extend the mountaineer example, a mountaineer’s mindset is to weigh risks in light of the physics of a situation.  Gravity pulls down, certain rocks have certain levels of traction, equipment holds certain loads, and muscles and bones perform in certain ways.  You want your mountaineers (and executives) to think this way.

Now imagine that the mountaineer makes a choice, but then in the middle of acting, the physics change.  Gravity suddenly pulls sideways, not down. That carabiner now only holds half a ton, not 2 tons.  The honor of the situation is compromised, and the mountaineer is doomed.

Think about the roots of effective elite team functioning as being similar to establishing the direction of gravity or the load rating of a carabiner. A fall is a fall, but a fall in which the carabiner breaks far short of its load rating and gravity dashes the climber into the rock wall at a diagonal is an entirely different matter: it can be deadly.

On an executive team, gravity is all about how things fall when there is a slip. Usually, gravity is set by policy and values, but it can also be set by the caprice of a specific executive.  There is no honor when elite leaders change the direction of gravity mid-course, unaccountably and, potentially, only for individual members of the team.

What this looks like in real life

 

Okay, so perhaps there is some interesting imagery around the mountaineer vs. the rock climber, but what does executive dishonor look like in real life?  I’ll list a few tactics, and perhaps you can take it from there.

The most common tactic is scapegoating.  It’s used by the most insecure leaders and is one of the more dishonorable moves, and it goes like this:  An executive team outlines a high-risk move for one individual to take.  The team agrees to it, and the stakes are known; that is, gravity is established for the team. Then, the individual takes the risk, and the individual takes the fall, and gravity has no effect on the rest of the team or the leader. This happens a dozen times a day in business culture.

A second tactic is the bait and switch. Gravity is established as one direction in order to elicit a decision, but it is then switched to another direction after the decision is made.  It’s a corrupt influencing tactic in any context, but is one that some executives resort to. A good example of this on a poorly functioning elite team is when the leader establishes implicit cover for a decision and then pulls the cover back after the decision is made.  It’s “I’ve got your back” writ small.  Usually, a bait-and-switch move at elite levels starts with “we agree” and ends up as “you agree.” “We agree” to spend millions of dollars on a change program slowly transforms to “you agreed” to spend the money. Gravity is switched, and only one team member falls.

Bait and switch tactics are common in recruiting and hiring—almost to the point of being the expectation vs. the exception. Some recruiters and executives will entice top talent with the promise of milk and honey—an aggressive agenda (or promise) focused on change and growth–only to reduce the talent to a real life of drudgery, order taking, and politics once the job starts. Executives who do this are typically small minded and posturing…not strategic and expansive.

The final tactic is the non-obligation move.  This one is really a test of values, and it encompasses all of the rest of honor as far as I can see: it’s the question of how organizations honor the gravity that has already been  established even when they don’t have to.  A good example of this is when executives allow ambiguity to overwhelm organizations during “good” times because they individually don’t “have” to clarify things.  All is well. The health of the organization suffers.  To paraphrase clergyman Eugene Peterson: Often the values of an organization can be measured by what its leaders do when they don’t have to do anything. Non-obligation moves are prevalent at all levels of organizations.

How to watch out for it

 

Do your due diligence, and ask around. Specifically, ask how organizations or individual teams honor their commitments to individuals over both the short and the long terms. Ask what would happen if an individual executive took a reasonable risk but failed.  Ask what the implicit contract will look like. Ask whether policies exist for tough circumstances (and whether they have been followed in the past when the circumstances arose).

In other words, be diligent.

Even more direct, and once you are actually in or around an elite team, observe.  As with all people and things, you will know (dis)honorable people by their fruit.  Watch for the hallmarks of dishonorable bureaucracies everywhere:  CYA as a course of business.  If senior executives constantly confirm their commitments and expectations, and reconfirm them in writing, but they don’t act without reciprocal confirmation, they are operating in a dishonorable senior culture. When senior executives constantly exchange explicit contracts—or say that they should have after getting burned—you can bet that the culture is one that is based on contracts and not honor.  An elite team should have the honor necessary not to have its individuals constantly protecting themselves from shifts in gravity.

So what?

 

This topic should be dear to any executive, particularly to those who want to either join or build cultures of honor.  I care deeply about this after having witnessed dozens of senior management teams, including a handful that could be categorized clearly as dishonorable.  The dishonorable ones have invariably struggled to attract and retain talent, and as a result, they have struggled to form and enact any semblance of a strategic approach to growth and improvement.

If you are reading this and are a part of a mid-management level team, you probably get the notion of psychological safety implicitly: Teams are effective when people feel like they can share without repercussions for them personally. Google at least got this right.

The danger lies at the elite levels, where the safety to share shouldn’t really matter; if a person is on an elite team and won’t share perspective, they aren’t elite in the first place and should be removed; at the elite level, honor matters, and even a choice well made can still result in removal from the team.  The world is a tricky place, but what matters to honorable executives is that they will be treated honorably in return, and Google may have gotten that wrong.

Elite executives don’t mind taking big risks, but they do mind when gravity can’t be estimated. Thus, the call to action on this one is simply this: Watch out.  It only takes an instance or two of dishonorable behavior to label an organization and its leaders as either actively or passively dishonorable. If you’re in a situation like this, know what you are getting, and if you’re contemplating going there, weigh your options closely: There are other fish in the sea.

In sum, if you are an executive leading an elite team, the answer is short:  Establish gravity and honor commitments.  Dishonorable executives are well known and can have long lives, but they have short reputations

On elite teams, it’s about honor, not safety. Now, go figure out which way is up.

As Yahoo’s Case Shows…Somebody is Always Watching

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Somebody, somewhere is doing the analysis…

 

Yahoo made a big splash by hiring Marissa Mayer as its CEO.  The bloom has come off the rose a bit.  As is sometimes the case with CEOs who are celebrities or otherwise insulated from common criticism, Mayer has been defended heartily for a few years for her decisions and record.

But the criticisms are accelerating.  More and more people are calling out the transparency of the empress’ clothing.  To wit, fund manager Eric Jackson, in a scathing 99 slide document released recently, outlined all the reasons that Yahoo’s supposed turnaround is no such thing.  He goes from comparable analysis to comparable analysis, then to a breakdown of the business, itself, then to a breakdown of other shareholders’ proposed plans…

…and then to an excoriation of the Mayer “strategy” overall, from the hire to the actual execution of change within Mayer’s tenure.  And, it’s a bloodbath.

This slide says it all:

What shareholders got instead…

When a “transformative” CEO’s tenure can be summed up as diametrically opposed to the “story” that got her hired, you know one thing:  The CEO hasn’t delivered.

Now, the Mayer story is getting a lot of play because of the potential severance package she stands to receive if Yahoo’s board actually fires her (valued at up to $110 million by some estimates).  That’s all fine…A deal is a deal.  But what is interesting here is that Yahoo has gone years with Mayer as its CEO, running a play that is clearly not what was advertised.  Just look at the slide above.

So, what’s the point?

The point in this case is less about Yahoo and more about the perils of “story” sales from executives.  Yahoo, in fact, is one tough turnaround situation.  As Jackson outlines, remove the Alibaba stock holding and what you’ve got is a very, very sick business.

What about “story” sales?  Well, no matter how good the story, somebody is watching the results.  Your CEO may “say” that new products are going to drive the company to new heights, but at some point that check has to be cashed.  Did they deliver on new product sales?  Did the video match the audio?

Have you been sold a bill of goods?

It’s an important question for shareholders everywhere. But, more importantly, it’s an important vignette for executives everywhere.

When it comes to highly visible executive roles, a story can only go so far.  At some point, the numbers will tell.  At some point, the power of personality and persuasion will cross the threshold of shareholders’ own financial interests.  Lincoln said it:  You can’t fool all the people, all the time.

At some point it becomes clear that somebody is watching.  And when that is clear, you no longer own the “story,” dear CEO.

The Yahoo case shows this in spades.

 

Leaders Must Say Thank You

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Put simply…”Thank You” is a key part of leadership.

I’ll keep this one short.  The turkey is in the oven and all the sides are either comfortably prepared or queued appropriately.

In the midst of a holiday focused on giving thanks, I thought it apt to put in a plug for “thanks” as an element of leadership we mustn’t overlook. And, as is always appropriate when it comes to simple notions and time constraints (yes, I am actually cooking at the moment), I’m going to borrow a quote.

About 20 years ago, I stumbled upon the book Leadership Is An Art by former Herman Miller CEO Max De Pree.  Mr. De Pree’s book has been one of the foundational influences on my personal leadership vision; and I love to see it on the shelves of people I know.

But, I digress.  In the midst of the book’s preamble is a simple quote that lays out what I believe to be one of the most elegant notions of leadership in an ocean of attempts at elegant notions of leadership.  It goes like this:

“The first responsibility of a leader is to define reality. The last is to say thank you. In between the two, the leader must become a servant and a debtor. That sums up the progress of an artful leader.”

I have digested this quote from many different perspectives over the years in trying to progress myself and the people I lead into a state of “artful” leadership.  It covers strategy, servanthood, obligation, and–perhaps most importantly–progress.  We never arrive.  It’s safe to say that I love this quote.

For the purpose of this post, it’s the bookends of leadership that De Pree defines that really stand out.

At the front is defining reality.  Without it, one is not a leader.  The leader’s definition of reality–where we are, where we are going, and the pressures and risks we face–is fundamental to leadership.  It establishes “we.”  It provides the touchstone for all other activity; and it’s the alpha and omega for any strategy.

It also lets those being led know that the leader is, in fact, a leader…not simply someone executing on somebody else’s vision and doing a job for a paycheck.  Just doing a job for a paycheck is the realm of high functioning managers and mercenaries. Mercenary cultures grow when leaders have no vision. Mercenary culture is incompatible with the notion of leadership as defined by Max De Pree simply because he starts it with vision–reality defined.

At the back–the last responsibility of a leader–is to say thank you.  Leadership…true leadership…is not finished until those being led have been thanked for their contribution to the effort that “we” have put forth.  Sure, thanks can come in the form of money, but I have to insist that a thank you cannot be simply monetary. Cash is necessary, but insufficient.

Thank you.  It’s integral to leadership.

As we celebrate this holiday…this season that focuses nominally on thanks, let’s focus on what it means to incorporate thanks into our leadership philosophy.

Happy Thanksgiving to my U.S. readers.  And, for all of us…let’s take De Pree’s definition of leadership to heart.

When the Core Cracks

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How’s your team doing…Really?

In the world of Collegiate football, we saw an interesting lesson on team yesterday.  It goes to the notion of “Core Cracking” first put forth by longtime NBA coach Pat Riley years ago…Namely that when the core of your team cracks, you are in trouble.

The Story:

The defending national champion and erstwhile Big 10 juggernaut Ohio State Buckeyes endured their first regular season conference defeat in years yesterday.  The Buckeyes fell to the Michigan State Spartans 17 – 14 on a last minute field goal.  Close game, worthy opponent (well, worthy to all but the most insufferable Buckeyes), tough loss, great team.  Not much to argue there.

However, after the game, the team’s core cracked.  Elite Ohio State running back Ezekiel Elliot attacked his coaches’ play calling acumen in the press and announced his intention to leave the school for the professional ranks.

“Honestly, this is my last game in the Shoe, I mean, there’s no chance of me coming back next year.”

and

“I deserve more than [12] carries. I really do. I can’t speak for the playcaller. I don’t know what was going on.”

That was followed quickly by the announcement (on Twitter, of all places) of last year’s hero quarterback, Cardale Jones, that he would not return to Ohio State.

https://twitter.com/CJ12_/status/668222222906040321/photo/1?ref_src=twsrc%5Etfw

This has resulted in some amusing posts and analysis, like this doozy from Lost Lettermen:

But, there’s more to this story.

A quick analysis

I’m not one to elevate 18 – 22 year old young men in entertainment industries to hero status.  Full stop.  That’s why you rarely see me leverage college sports in discussing leadership and strategy.  Young people are…young.  It’s clear that Elliot and Jones were both very disappointed in a tough loss; and they put their disappointment on display in some very public ways.

But…

They also displayed a very important leading indicator of a team core that has cracked.  They brought things out of the locker room that would have best been handled inside it.

They also betrayed a more selfish focus in a very public forum than one would necessarily expect from team sport athletes and entertainers.  They showed, in moments of honesty, that it was time to move on.

To be clear, that’s fully okay.  It’s also not a team mentality.

Applications for us all

Any one of us is at any point a team member or leader. That applies to family and it applies to work.  We lead or are part of teams.

But a team isn’t just a group of people doing their jobs.  It’s a group of people doing a job.  Note the difference.

When you cultivate a group of people who focus on doing their jobs, and who focus on the paycheck that job gets them, you have only cultivated a means to an outcome.  A team, with all its implications of loyalty, leverage, and performance, is far, far more than that.

The Ohio State University has had an outstanding football program for a long time, and is really more the object of this post and not the subject.  The subject is team.  If you have a team, it has a core.  If that core cracks, you no longer have a team.

When your most senior leaders repeatedly reference their own self interests, their own careers, and their own intentions more often than those of the overall organization…Well…

Dear Strategist: Euthanize Your Gerbils

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When it comes to strategy…  The first thing we do, let’s kill all the gerbils.

On the heels of an article I wrote a couple of weeks ago titled “Being Strategic Means Naming Your Elephants,” I thought it useful to go to the other end of the spectrum…

Do you ever find yourself focused on the wrong things?

It’s ok… Admit it.

Sometimes we all get focused on things that don’t really matter to our missions.  They come in the form of shiny objects or minor brush fires that we chase to either develop or quash.

An old colleague of mine once referred to such things as “gerbils.” Gerbils are small, hairy, cute, hungry, and long-tailed. In other words, gerbils are a waste of time.

And we need to euthanize as many of them as we can.

First, a little background from my own professional life

As someone who has historically kept a very full calendar, and who continues to do so today, I have an interesting means of testing where I spend my time…  I can simply look at my calendar.

A couple of years ago, while serving as an executive in a diversified firm, I did such an analysis of my time. I was able to pull my calendared time into a spreadsheet, categorize it, and look at the results. For the record–or perhaps the hall of shame in some people’s books–the analysis covered 1,943 work hours over the course of 272 days. That’s an average of 7.14 hours a day, including weekends…about 50 hours scheduled per week.

I found that a significant minority of my time was being spent on activities for a function that was outside of my own organization’s mission.  It was remarkable to see that being “helpful” and focusing on what was at any moment labeled “important” in the micro led to what an objective observer might call a dilution of mission through allocation of time available in the macro.

To be clear, I found the split of time rewarding because I was able to get things done. I was able to help people.  I was running to fire, helping where the help was needed most.

And I was probably wrong.

I shared the analysis with other key executives and with my team and quickly explained what I saw as “wrong” with my time allocation.  I then set about to do more of the things that were important to my own mission, and to do less of (or delegate) those things that were not important.

I guess you could say I set out to euthanize the gerbils in my own agenda.

But teams and corporations have gerbils, too…and that’s where this gets juicy.

Gerbils in your company

Gerbils, like the unnamed elephants that I mentioned in my previous animal-analogy post, suck the life out of your agenda.  They tend to come in the form of executive flights of fancy or risk-averse “toe in the water” efforts.  They, by definition, are:

  • Small – They generally don’t “move the needle” for the agenda they embed within.
  • Hairy – They come with risks or needs for attention that are completely out-sized to their impact.
  • Cute – For some reason, they tend to captivate attention…examples are new products that have no market or initiatives that are vain pursuits.
  • Hungry – They eat a lot of resources to execute, and those resources have a much higher return on investment when deployed elsewhere.
  • Long-tailed – This is where the gerbil analogy really takes flight–your gerbils have long tails…they last a long time…they are persistent.

With that description, are you seeing any gerbils in your company’s corporate agenda?  Perhaps it’s a new product that’s eating up time and money that should be used to grow the company elsewhere.  Maybe it’s a cautious deployment of resources in a sub-scale manner against an opportunity that management just isn’t sure about.  Maybe it’s an initiative focused on engaging employees that the employees already view as a cynical ploy.  Maybe in your company it’s the kabuki theater of strategic planning itself that is a gerbil.

You get it?  Small, Hairy, Cute, Hungry, Long-tailed…akin to worthless.

In the midst of a strategy development discussion, a leadership team of one mid-sized company found 130 strategic initiatives to place on its agenda.

130!

It’s a rare management team that can generate much less manage 130 truly strategic initiatives.

Time to kill some gerbils.

But how?

Some of your are sitting and thinking, “Yep, I see the gerbils in my company’s agenda,” but you may be missing the point:  Gerbils exist at all levels of abstraction.  For a corporate leadership team, a gerbil could be a sub-scale acquisition millions of dollars in size but made for looks, not impact.  For a business unit leader, gerbils might be a product launch hundreds of thousands of dollars in size that is already DOA.  For an individual, it might be the waste of time on Facebook or useless blogs (not this one, others…).

Gerbils are everywhere, which is why I started with the personal anecdote.  If you can become better at finding the gerbils in your own agenda, you can get better at finding them in your company’s agenda.

All this means is that one person’s elephant is another person’s gerbil.  A circumspect leadership culture acknowledges this.  They also realize when they need help. A healthy fact base (like my calendar exercise above) can give them a start.  When it comes to corporate agendas, sometimes they simply need an outsider to help structure and organize the discussion. Sometimes they need outsiders to bring the fact base to bear.

Your mileage may vary.

In our practice at WGP, we have engaged with clients looking for structural support on their corporate and business unit agendas.  In this type of engagement, we play a challenging and facilitative role for management.  We have also engaged deeply with corporate teams and business unit teams who need a more intense and full understanding of facts and options.

In any event, a great strategist focuses on naming elephants and murdering gerbils.

May you have success in doing the same.

I would love to have your thoughts on this topic in the reply section below.

 

 

Hiring For Smarts Isn’t What You May Think It Is

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Only hire people smarter than you, but know what kinds of smarts you need…

In the modern corporate environment, far too many executives are bent on taking the notion of “hiring people smarter than they are” to the extreme.  In doing so, they create talent cultures where glib, facile intellects have an advantage over specialists of all sorts; and this is a problem for strategy creation and execution.

These cultures will take an un-apprenticed person with a generalist skillset (or, in some cases, merely a strong presence) and explain away deep functional deficiencies as “flat spots” to be rounded out.  They will concurrently ignore deep specialists without the glib (and, yes, I do mean this as a pejorative–as it very much is) facade and deem them not fit for higher office due to capability deficiencies.

They make depth and breadth equal partners in talent evaluation structures, and then overweight breadth in the actual evaluation. In doing so, they cast off expert talents in favor of generalists ones.  They get it all backwards.  In spades.

Why it happens

This problem goes back to a notion whose origin is unclear to me: “Only hire people smarter than you.”  I agree with this… No, really, only hire people smarter than you!

It’s a good policy.  Sure, on its face, it’s a ridiculous notion. It’s one whose logic leaves the smartest people in the most junior roles, and a team of ignoramuses in the C-suite.

In a seminal Harvard Business Review article called Hiring For Smarts, author Justin Menkes reinforced the notion that intelligence rules. Hire for it.

But to think that way too purely misses the point.  The people you hire need to be expected to develop more depth than you have at something. That something may be as straightforward as managing your calendar or as complex as negotiating cross-border partnerships.  People who work for you don’t have to be broader than you, but they should (eventually) be deeper than you at something. They have to be smarter than you or they won’t provide you real effectiveness.

In other words, if you only hire people who look like you but who are only slightly less capable than you at everything you do, you are either (1) running an apprenticeship shop (and that’s fine), or (2) really not a good hiring manager.  If you are hiring apprentices, that’s fine, but you need to acknowledge it.  More common is reality (2).

Some common reasons for these deficiencies 

So, then, why are so many executives, even those who are otherwise avowed technocrats, failing so miserably at this by over weighting degree, background, and a glib social presence on their way to hiring generalists that have nothing special to contribute to the team?

Here are a few reasons:

  1. They cultivate a magnificently flawed hiring processes:  Without a doubt the most common reason is that hiring processes place more focus on personality and presence than capability and competence.  To be sure, rapport is important in an interview. But, capability profiles can’t be dismissed in the interest of rapport. Some firms solve this with tests, some with good cop / bad cop interviewing approaches, and still others (the world class ones) with interview approaches that are very common and calibrated to find both rapport / fit and capability.  If your hiring processes solve for glib generalists that look like mini-senior executives, then that’s what you will get.  Unfortunately, those profiles are too often the most difficult to upskill to the needs of their next job.  Like it or not, technical competence is much harder to gain in a short time than boardroom presence, and a lot easier to justify in the after action report on a bad hire.
  2. They are scared as hiring managers: The second most common reason for the misapplication of the “hiring for smarts” notion is that hiring managers are actually afraid of hiring people with more knowledge than them. They continually hire technical lightweights because they are afraid of bringing a threat to their own well being into the organization.  So, they explicitly hire for nice looking generalists who seem very smart but who lack depth.  If your hiring managers tend to be the experts at vetoing recommendations from peers who review their candidates, you might have this in action.
  3. They propagate tyrannical management practices: The third reason I’ll give is actually the extreme other end of reason 2. This one is the hiring manager who only wants things done a certain way (whether that way is good, bad, ethical, or unethical), and will hire absolute blank slates–or, simply yes man versions of themselves–to do it. These hiring manager profiles are common, and come with significant downside.  If your hiring managers pound the table against the notion of bringing in people with strong experience from elsewhere because it “won’t fit,” you might have this dynamic in place.  You also might have someone concerned that an outside expert could find the cracks in their empire. Watch out.

So What? 

The “so what” to this post is right there at the top.  Hire people for their smarts, but know what kind of smarts you need. Try the old double blind test:  If you strip out the name, education, and company names from the resume, does it still suit your needs for a sufficient and smartly deep person?

Why am I writing on this?  It may read as very “HR-centric” and perhaps outside the scope of a practice that is focused on strategy and performance.

Simple.

Good teams build great strategies.

Good teams are built through great hiring and promotion practices.

And…Too often, today, so-called “great” hires are judged by their cover letter, brand names, and presences and not a thorough vetting of their C.V. and true special qualities.

I’ve yet to see a good team built exclusively from very smart generalists.  The best of teams have a strong vein of hard won experience and depth within them.  They also have a strong willingness to listen to that experience.

I write this for the CEOs and senior executives in my life and practice, but certainly these thoughts apply to anyone charged with building a team through hiring.

Hire people smarter than you.  Just make sure their smarts emerge from functional or technical depth, and you will be ok.

Good luck, and please share any thoughts you have!