Tune in to Brain Talk Radio (http://www.blogtalkradio.com/coach-dq) this month and next to hear two timely discussions about human capital: how today’s workers are critical to the success of any organization and what it means to manage people as assets. Left-brainer Dawn Quesnel and right-brainer Tara Roth interview Sandy Burud (December 13th) and myself (January 4th) about our work to help create organizations where are able to do their best work.
Peter Drucker spoke about the importance of self-knowledge, particularly for today’s knowledge workers. He advocated knowing how you learn and process information and what you value so you can communicate to others what you need to be most effective as human capital. He also advocated knowing what contribution you want to make both in your organization and in your life. This knowledge is the foundation for being seen, and valued as human capital.
Join us on March 7, 2012 at 2 pm EST for the webinar: Knowing Your Worth, where you will learn how to ensure your current and future employers value you for your unique contributions.
Originally published in 1999 as Journey to the Emerald City, this book provides a concrete, thorough and well-thought out process for changing organizational culture. More importantly, it demonstrates how culture affects results and describes how to achieve major improvements in results by changing culture.
The book is well organized and written, clear and concise, with many tables, charts and tools. It is divided into two parts. The first part describes the primary elements of culture, how they operate and what you need to do with them to create a significant change in culture. They call this the results pyramid. The second part of the book describes best practices they’ve developed to accelerate culture change and how to apply them. Throughout both sections the authors provide concrete examples from real client situations to illustrate how the different elements and practices work.
The book centers around four key ideas:
A culture of accountability is one where everyone personally commits to achieving the desired results.
The results pyramid: experiences foster beliefs which then drive actions people take and ultimately create the results an organization achieves. Experiences are all-inclusive from who gets promoted to what people say to how leaders respond to feedback.
The authors advocate starting any change process with a clear identification of the desired key results and then making shifts in the way people think and act by creating experiences that change their beliefs. For instance, a company wants to increase profit margins 10% over the prior year. The leaders decide the belief that everyone is equal in the organization and has the ability to significantly reduce costs will help them achieve that goal. They create an experience that reinforces that belief: they sell the corporate jet and any other “perk” type assets so they have the same resources as everyone else. According the client testimonials, these experiences have a dramatic effect on employees’ beliefs and consequently, their actions.
Leadership is central to the success of this methodology. If the organization’s leaders don’t commit to all aspects of the change process – from eliciting feedback to creating specific experiences – it’s difficult for everyone else to commit to the new direction and usually the desired results won’t be achieved.
It is a disciplined methodology; one CEO said it “helps you think and act a certain way to create the results you want.” Key elements of the methodology are feedback, storytelling and recognition all of which reinforce the culture that is being created to achieve the desired results.
I’ve been involved with many change efforts and read some of the seminal works on creating change and I found this book to be one of the most comprehensive, identifying most of the issues that typically derail change efforts and providing solutions for addressing them. The only issue I felt they skimmed over was how to handle people who just won’t get on board with the change effort and won’t take accountability. Ideally, applying the best practices would limit the number of those people, but realistically there will be some. I can surmise they would advocate coaching them until it becomes clear they won’t change and then letting them go.
I found the book easy to read but then I’m interested in culture change and organizational improvement. It’s not immensely entertaining or amusing, but it is very interesting. I highly recommend this book to anyone who wants to create significant organizational improvement. In fact, I’m going to buy a copy of my own.
Change the Culture, Change the Game: the breakthrough strategy for energizing your organization and creating accountability for results by Roger Connors and Tom Smith, 2011 Portfolio/Penguin Publishers.
Although the recession officially ended almost two years ago, it’s difficult to find anyone who isn’t still feeling its pinch. Housing prices fell again this past January and February and I feel comfortable predicting March’s numbers won’t show much improvement. Add in the rise in gas prices and its effect on the cost of a host of goods and you have to wonder if the Great Recession really ended in June of 09.
A recent Harris poll indicates most of us are not feeling too great about the economy. Of 1000 adults recently surveyed only 27% said the economy is growing, 29% said the economy is in a depression (good grief!) while 26% said we’re in a recession and 16% said the economy is slowing down.
The Fed acknowledged the slowdown in the first quarter (1.8% – wasn’t everyone predicting closer to 3%?) saying the recovery is progressing at a ‘moderate pace.’
Today’s report on small businesses hiring may be the first positive sign of spring in the economy.
According to payroll company ADP, small businesses added 188,000 jobs per month in 2011, a big jump over last year’s average of 68,500/month. It’s still not what economists call healthy, but it’s a step in the right direction.
Large firms (those with 500 or more employees) added an average of 11,300 jobs per month this year, once again demonstrating that the engine of economic growth in this country is small business.
Have you hugged a small business owner today?
At the very least, buy from one!
John Hoke died recently at the age of 85.
Who was John Hoke, you may ask?
He was a man ahead of his time, an inventor, a writer, a naturalist, an eccentric, and surprisingly, a federal employee for most of his life.
I’m not sure how I came across his obituary – just one of the many interesting side benefits of the Internet – but I became fascinated by his life story:
Photo by Gary Kramer, Courtesy of NRCS
Two things about his life struck me from a management perspective:
Few openly support bureaucracy today whether in government or business or non-profits. It’s the boogeyman of the 21st century; one everyone can agree to fear and despise. Innovation is the name of the game; flexibility the mantra everyone chants.
Innovation is probably the one thing most managers and executives all agree they want more of yet the conditions that support innovation have never been harder to find.
Theresa Amabile, a professor at the Harvard Business School, has studied innovation and creativity in organizations for years. Her research finds individual characteristics such as intrinsic motivation and expertise to be important enablers of creativity, but environmental factors also play an important role.
Environmental factors such as political problems, turf battles, destructive criticism and competition, strict control by upper management and excessive formal structures and procedures hinder creativity. That’s not good. Creativity leads to innovation in organizations. If you want innovation, you need to ensure the environment supports employee creativity. It’s easy to see how federal bureaucracy, with its formal structures and procedures, hindered the adoption of Hoke’s creative ideas.
Downsizing, a ubiquitous activity across industries, is particularly harmful to creativity.
Creativity is more likely to occur in organizations where risk taking is valued and supported more than maintaining the status quo.
Are you building an organization that will support the next John Hoke? Or one that will stifle him?
Read more of John Hoke’s life at: http://www.washingtonpost.com/local/obituaries/a-local-life-john-hoke-85-never-ran-out-of-inventive-ideas/2011/03/07/ABAUXDx_story.html
Do you have a clear strategy?
Is it successful?
Are you executing it well?
If you answer ‘no’ to any of these questions, fear not, you are not alone.
According to a recent survey of 1800 top executives by the strategy consulting firm Booz & Co., many executives express frustration with their organizations’ strategies, execution, and chances for success.
While most respondents (70%) believe their organizations have a clear way to create value in the marketplace, less than half find that value supported by the existing strategy. Even worse, the majority do not believe they are leveraging capabilities or effectively managing the execution of those strategies.
- 64% indicate they have too many conflicting priorities
- Only 48% believe the existing strategy will lead to success
- Less than 33% see their company’s capabilities as fully supporting the strategy
- 50% find it challenging to communicate the strategy and obtain buy-in
Focusing on having the right strategy – one that leverages an organization’s capabilities to provide value to a specific targeted market – is worth the effort. Firms that limit themselves to a few focused priorities have higher than average revenue growth.
Booz & Co.: Limiting Strategic Priorities Leads to Higher Revenues
I find the Balanced Scorecard to be one of the best tools for ensuring the right strategy is being executed and value is created. It directly links customer value-creating strategies to financial performance and aligns the internal capabilities of the organization in support of the customer strategies. Done right, it ensures everyone in the organization is focused on strategic priorities and understands how specific responsibilities and actions lead to the desired outcomes.
For more on the Booz survey, see http://www.booz.com/media/file/BoozCo_Coherence-profiler-results.pdf
For more information on the balanced scorecard, visit the Balanced Scorecard Institute at
http://www.balancedscorecard.org/
One of the most important things to learn when managing people is how to make your employees solve their own problems.
Peter Gruber, a film executive, recounts advice he received early in his Hollywood career:
Think about your job like you’re a zookeeper. Everyone who comes to your office with a problem is bringing a monkey. If they all leave their monkeys with you to take care of, you’ll be hip-deep in monkey poo. You need to make sure everyone leaves with their monkey.
This lesson is one of the most difficult ones for managers to learn. I used to feel so overwhelmed at the end of the day by the number of problems that were dropped on my desk. All my employees would come in, sit down, talk about their problems and leave – happy, visibly relieved, and with bounce in their step – that whatever was bothering them was now my problem.
Photo Courtesy of the Minnesota Zoo
I was hip-deep in monkey poo.
You need to train your employees to solve their own problems. When I teach management, I insist students identify three alternative solutions – based on analysis – along with pros and cons of each alternative when doing case studies or other analytical problems. I tell them their ability to propose solid alternatives and make recommendations – before they even go to their manager – will do more for their career success than most degrees and certificates.
It’s true.
If you are unlucky enough to be managing employees who haven’t learned to take their monkeys with them, don’t despair. You can train them – and yourself – and keep your office clean.
The key to having employees keep their monkeys is convincing them they have the ability to solve their problems. Here’s what you can do:
Unfortunately once your employees learn how to take care of their own monkeys you start to wonder what you should do with yourself. That’s when things get really interesting.
The formal definition of toxicity: …the degree to which a substance can damage an organism. Metaphorically, usage of the word has expanded to include how an element can damage other types of groups, like families, organizations or societies.
The first time I heard the word toxic used in conjunction with an organization is when a counselor was advising me to quit my job because the environment was toxic and not healthy for humans and other living creatures.
I was lucky, I could do that. I had money in the bank, marketable skills and no dependents.
Over lunch this past weekend a friend described her current work situation, one where the strains of toxicity are starting to spread. She discussed her current bosses and how they had deliberately gotten rid of her prior boss, a woman they never liked, but who was smart, extremely competent and highly regarded by everyone else – employees and vendors alike. She never understood why they didn’t like this woman, or how anyone benefited from her being gone. I asked what the climate was like in the office – whether this incident was part of a large pattern of behavior and attitudes – and how other employees were acting. She indicated people were wary, risk-averse and conscious that at any time any one of them could become the next person targeted for disposal. Ironically, in this organization, management was looking for ways to encourage innovation. As if any sane person would take any risky action in this environment!
Clearly this organization did not reward or value good management. It’s not surprising, few large organizations do. Also clear is that there is a conflict between the type of culture managers say they want and what they create. Again, not surprising. The larger the organization, the more difficult it is to create and sustain a consistent culture. But the level of toxicity – although she never used that word – I think would be surprising to most people.
From the inside, it’s difficult to notice that our organization has gradually become toxic. Unless something major happens to jar us out of our complacency, we tend to ignore the subtle signs that our situation is not healthy.
Do you know how to boil a frog? Put it in a pot of cool water and very gradually bring the water to a boil. In theory, if the change is subtle enough, the frog doesn’t realize what’s happening and will stay in the pot and be boiled. If instead you put a frog in a pot of boiling water, it will jump out.
We’re like frogs in pot.
When we jump into a toxic organization we know to get out as quick as we can. But when our organization gradually becomes toxic, we’re boiled alive.
Unlike frogs, we can notice when our environment is heating up. Signs your organization is becoming toxic:
When we see signs of toxicity, it’s important to figure out what’s driving it; we want to know whether it’s temporary or looks like it’ll last. Most of us can ride out a temporary toxic situation: a new manager rotated into the unit for a two year assignment, spreading poison like fertilizer. He’ll rotate out in two years so we can decide whether it’s worth waiting him out. Maybe the organization is in trouble due to economic problems. Economic downturns are cyclical, so it’s a question of waiting for the upturn. In temporary conditions, the toxicity isn’t widespread and hasn’t taken root.
Toxicity that has taken root is not that hard to see. The warning signs exist in multiple places in the organization. There are no repercussions for bad behavior. Senior management is either unaware of what is happening or engages in similar behavior. Financial performance is suffering as a result of the toxicity but no one is taking appropriate action. The board of directors is weak, too distant or in management’s pocket. No antidotes are available.
While it is possible for organizations in that situation to become healthy again, it is rare. Usually they stew for a while until the lack of innovation, employee motivation, and low levels of trust become fatal. The question becomes whether to find ways to survive in that environment or get out.
Whether to ride out a toxic situation is a very individual decision, affected by the alternatives available, one’s ability to survive inside the situation, and the consequences of walking or staying. The earlier we see the warning signs, the more time we have to make that decision.
I just finished reading Reich’s book which describes deeply rooted structural problems in the US economy. He argues that these problems have been building for the past thirty years and predicts dire consequences if they are not fixed.
Sadly, he argues convincingly that the economy will not recover without major changes – changes that no one seems to have the political will or clout to bring about.
The basic problem with the economy, according to Reich, is the concentration of wealth in the top 1% of the population, a trend that has worsened since the late 1970s. Then, the richest 1% took in less than 9% of the nation’s total income; by 2007 they took home 23%. The problem with wealth concentration is that it doesn’t fuel the economy. The small numbers of wealthy people cannot – and do not – spend as much as a larger and vibrant middle class will. He shows how wealth concentration peaked in 1928 and in 2007 and that in between was much less concentrated.
Reich draws comparisons between the periods leading up to the Great Depression and the current Great Recession and sees a number of parallels: wealth concentration, a substantial rise in borrowing by the middle class, and speculative investing that created bubbles – in stocks and in real estate.
Kind of scary when you look at it like that.
Random House 2010
Government policies subsequent to the Great Depression and the Great Recession had a lot to do with the depth and longevity of the crises. The Depression didn’t end until the government went heavily into debt to wage World War II – employing almost all working age Americans and operating at full industrial capacity. He confirms the argument that the New Deal didn’t end the Depression – because spending wasn’t high enough – but that the war spending did, ushering in an extended period of prosperity and a growing middle class.
The problem today, according to Reich, is that Americans have become blind faith believers in the “myth” that free markets and low tax rates create economic prosperity for the largest number of people. In reality, he argues, high tax rates and regulation were the norm during the greatest period of widespread prosperity. He cites tax increases by Reagan and Clinton as leading to a better economy than Bush’s tax cuts.
His most frightening point is that the current rebound in the economy is not going to get any bigger – that we will be stuck with high rates of unemployment over the long term because the middle class doesn’t have the money to fuel growth at high annual rates. Why? Because the middle class is being hurt by lower wages – thanks to globalization and automation – and reduced borrowing power.
No one in politics is going to have the appetite for his remedies:
I think we all agree with the last one!
While I don’t fully agree with every recommendation, I must admit I have come to the point where I agree with most of it. Before the Great Recession I too believed in free markets and low tax rates. Now I’m convinced big corporate money – and excessive executive compensation – is hurting small business and killing the middle class.
My main objection is with free education and public goods. I believe people value things more when they have skin in the game – whether it’s their own money or their time or something else they value. Maybe instead of free parks and libraries we should charge a fee for an annual pass or a day of service maintaining the park or other facility for those who cannot pay. Certainly we should charge something for education.
My main problem with the book is he didn’t address the mobility factor. If the US raises income rates on the wealthy our rates will be higher than most of the developed world. Wouldn’t the wealthy then relocate (at least for tax purposes) to lower tax countries? Remember the Beatles leaving the UK for just that reason (and recording “the Tax Man”)?
The book is short (147 pages) but compact with little white space so it takes concentration to get through. After all, the topic is economics and although Reich writes in a very accessible way, it’s not like reading the latest thriller. At times it seemed like I was reading a rant against current economic policy. I can picture Reich steaming as he watched the Wall Street bailouts and financial reform and then going to his computer to pound out his take on what the economy really needs to get healthy.
I hope everyone in Washington read this book. Maybe every voter should as well. We hear the other side of the argument on every cable channel; maybe it’s time to consider this side.
The other day I was talking to a colleague about the importance of a strong organizational culture and she asked me if I had ever encountered a service firm that was good at creating a positive culture. I immediately thought of a consulting firm we’ll call Aquarius. Their story illustrates the complexity of managing culture:
Aquarius was formed by the merger of two very different but highly successful firms. To integrate the two diverse groups, the new management team decided they needed to identify the culture they wanted to create and take steps to make it real. They took this task very seriously. After much discussion and careful thought they identified the values they wanted the firm to embrace. They obtained buy-in from everyone in the firm. They then set up a process for building a culture based on those values:
In many ways, it was a success. People lived the values. And most of the values were appropriate to a consulting firm’s success: integrity, mastery, knowledge, teamwork, creativity.
Unfortunately, success didn’t last. Management had been so focused internally on creating this culture that they stopped paying attention to what was going on outside their organization – with their clients and their competitors. They weren’t developing the service offerings their clients wanted and that their competitors had.
The problem with the culture was twofold. One, when choosing the values upon which to build their culture, they didn’t select any that reflected the requirements of the business they were in such as client service or innovation. Two, they didn’t select any values that would have moved the firm forward such as diversity of thought or challenging the status quo.
Having values that were completely focused on internal factors meant they were giving short shrift to external factors – which were critical to continued success. Not valuing different viewpoints further insured they wouldn’t pay attention to anyone trying to move them off the established – and internally focused – course.
Spiral Gala courtesy of NASA
The firm went from great success to life support in the course of one year. With no one to point the way out, they went into a serious and rapid death spiral and were out of business in 18 months.
The moral of the story is that a strong culture can be an asset, but like any asset it needs to be managed and continually evaluated. Just as you periodically assess the capabilities of your human capital or the state of your information technology or the quality of your products, you need to assess the relevance of your culture.
Subscribe by Email