The Performance Improvement Blog

Being Transparent About Transparency

Transparency is one of those terms, like “outside-the-box”, that everyone likes to use but rarely is defined. The meaning of transparency and its importance in large organizations became very clear to me in a BNET interview of Paul Levy, CEO of Beth Israel Deaconess Medical Center in Boston, an 8000 staff teaching hospital of Harvard Medical School. A March 12 article in the Boston Globe described the meeting that Levy had with the medical center staff where he requested ideas for preventing layoffs in the face of a $20 million deficit. Through email, chat rooms, and town-hall meetings, Levy collected ideas from staff for running the organization more effectively and efficiently. Thousands of people offered comments and suggestions.

Levy talks about two kinds of transparency in a hospital; one is being open about the medical center’s financial situation and the other is being open about the hospital’s clinical outcomes. He said, “As the CEO, I saw it as my job to implement and model transparency.”  This kind of transparency comes with risks. Publishing actual financial and clinical outcome numbers might give another hospital the information it needs to achieve a competitive advantage. Levy thinks it’s worth the risk because all hospitals are facing trying economic times and they have a lot to learn from each other. He said that the important thing with transparency is to be sincere, open, and honest with staff.

Transparency has paid off for BIDMC. Because of implementing staff suggestions, what could have been a 600 person layoff of the people least able to manage a loss of income, turned into less than 150 people losing their jobs, and staff are continuing to work on how to reduce that number further. Transparency in communication has had a clear, positive impact on BIDMC and the lives of thousands of employees and their families.

Leadership: Is It Nature or Is It Nurture?

High performers are made, not born. This is the central thesis of Geoff Colvin’s new book, Talent is Overrated: What Really Separates World-Class Performers from Everybody Else. He argues that it is “deliberate practice” that makes people highly successful. Sean Murray’s blog, RealTime Leadership, summarizes the key principles of deliberate practice and explains how it is different from simply “practice.”

Colvin argues that most companies have failed to create the conditions necessary for deliberate practice. But this creates a wonderful opportunity for these companies to become more successful. In the Fortune blog, Colvin writes:

Bottom line, at most companies: The fundamentals of fostering great performance are mainly unrecognized or ignored. Of course that means the opportunities for achieving advantage by adopting the principles of great performance are huge. A few companies realize that. They embed mentoring and coaching in the culture, develop employees' careers through carefully chosen growth assignments, and increasingly put people through high-fidelity simulations, among other steps.

Colvin is talking about learning. Not cram-for-the-exam type learning, but learning that is planned, continuous, purposeful, and done with great passion. It’s not simply about experience. Experience doesn’t result in high performance unless there is a concerted effort of feedback and reflection that results in continuous learning. That is, learning how to be more effective and learning how to learn how to be more effective. I like this quote from Michael Jordan who some say was the greatest basketball player of all time: “I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.”

Bossnapping: A Failure to Communicate

It should never get this far. In the past month, French workers in facilities owned by Sony, Caterpillar, 3M, and the retailer PPR, have taken their bosses hostage. The primary purpose of these bossnappings was to get these executives back to the bargaining table.

These actions are a symptom of a growing contempt for executives sweeping Europe and the U.S. It is spurred on by reports of corporate leaders who have taken bonus pay at a time when workers are being laid off in growing numbers, executives arrested for corruption and theft, and managers being insensitive to the plight of their employees. And all of these reports are propelled by the twitterization of information: opinions about the comments and actions of bosses are instantly communicated to the world. Lucy Kellaway writes in FT.com:

Workers of the world are uniting, not so much to lose their chains but to get back at their bosses. Anti-boss rage is more in vogue than it has ever been in my lifetime and I find I'm watching the petulant display with alternate surges of glee and discomfort. The rage itself seems fair enough; the problem is the choice of outlets, some of which are more appealing than others.

These still rare but growing number of examples of workers acting out should be a wakeup call for all managers. Communicate with your employees. Show respect for your employees. Give employees a reason to trust you. Otherwise, you might find yourself virtually, if not literally, locked out of a productive working relationship with the people who mean the most to the success of your organization.

Culture of Learning in Non-Profit Organizations

If you work in a nonprofit organization or NGO, including health care, social services, advocacy, arts, education, or government, or if you volunteer for a nonprofit or serve on the Board of a nonprofit, I encourage you to look at my new book, Developing a Learning Culture in Nonprofit Organizations. The purpose of this book is to provide practical ideas and tools for continuous learning and organizational improvement.

Much like for-profit companies, nonprofits need to do a better job of learning and learning how to learn. The pressure on them to continuously improve performance has become enormous in recent years. They need more than occasional incremental improvements, they need a culture that supports continuous learning.

I write in the Preface of the book:

A learning culture exists when an organization makes reflection, feedback, and sharing of knowledge part of the way it functions on a day-to-day basis. A nonprofit or non-governmental organization (NGO) that has a learning culture is continuously learning from its own experience, which means it has the capacity for improvement and success. In this way, a culture of learning contributes to the overall capacity of the organization.

Nonprofits need a learning culture now more than ever. Aramand Lauffer, Professor Emeritus, University of Michigan,writes in the foreward to the book:

Adaptation has always been a key to organizational survival, but never more so than today. That’s why this is a much-needed book. Nonprofits are faced with funding uncertainty, altered expectations from consumers, complex and often competing regulations, and changing perceptions of how services should be provided and to whom.

Developing a Learning Culture in Nonprofit Organizations gives you a framework and tools for helping nonprofits and NGOs become more effective at achieving their missions. I hope you will read the book and let me know what you think about the usefulness of the ideas and tools.

American Recovery and Reinvestment Act: Transparency or Results?

No doubt the American Recovery and Reinvestment Act will create many new jobs, put many desperate people to work, and lift many struggling families out of poverty. The question is, “Will the money be used efficiently to benefit the most people possible and increase the capability of people to remain employed after the economy turns around?” Or is ARRA simply a jumpstart to the economy with no power to help individuals, families, and businesses achieve long term sustainability.

ASTD estimates that over five billion of the $787 billion appropriated under ARRA will be used for training, including $4.2 billion for Department of Labor, $100 million for Department of Energy, $3 million for Government Services Administration, $610 million for Department of Health and Human Services, and $20 million for Department of Transportation. According to an analysis by the New York Times, when education is included, a total of $129 billion will go for programs that help people develop new skills and capabilities. We can't afford to spend that much money on training and education without getting a substantial return.

In President Obama’s 2010 budget he has emphasized holding programs accountable for performance. Susan Kistler, Executive Director of the American Evaluation Association has compiled a list of what the budget says about evaluation. It appears that Obama administration is trying to eliminate waste, stop funding programs that don’t achieve goals, create performance targets for new programs, and evaluate new initiatives to see what works. He has appointed a Chief Performance Officer to oversee and lead this emphasis on performance and a Recovery Accountability and Transparency Board will be charged, in part, with eliminating fraud, waste, and abuse.

I applaud this emphasis on transparency and accountability. Most states have already created a Web site where information is posted about how the money is being spent and what citizens can do to have access to funds. Although transparency is required by the legislation, some states are going to extraordinary lengths to be open about how their stimulus money is being used.

What I fear, though, is that transparency is becoming a proxy indicator for performance. I agree that every citizen should know how much money is being spent, who the money is being spent on, how many people are participating in the various training and education programs, and if agencies are fulfilling their funding guidelines. That’s transparency. However, transparency doesn’t necessarily tell us anything about results and what can be done to improve performance. A similar concern has been raised by Green For All and PolicyLink in their publication: Bringing Home the Green Recovery: A User’s Guide to the 2009 American Recovery and Reinvestment Act. In that document they say:

The challenge...is the political and economic urgency to spend Recovery Act funds quickly in order to put large numbers of people back to work. This poses a danger in three ways: that money will be spent poorly; that funding will go predominantly to projects which only reinforce the pollution-based economy’s status quo (with low-income people and communities of color at the smokestack end); and that jobs will only go to workers with the skills and connections necessary to get those jobs quickly, thereby reinforcing racial and economic inequity.

Another danger posed by the legislation is not being able to achieve results valued by stakeholders. Knowing output (amount of money spent, number of people served, etc.) is good, but we won’t know if any of these newly funded training and education programs are worth the investment unless we also measure outcomes (worker learning, sustainability of businesses, local economic impact, etc.).

Is anybody measuring and holding organizations accountable for ARRA results? If you know examples of this please write about them in the comments to this blog.

Hire for Skill or Hire for Character?

When Bill Maher asked Bill Bradley why the New York Knicks keep losing, the Senator said that it’s because they look for players with skill instead of character. I think this is what many organizations do when they hire employees. They look for people who already appear to have the experience and competencies needed for a specific job rather than people who have the attitude and temperament to fit into the culture of the business. If companies are going to make it successfully through this economy, they must have employees who have a positive attitude and can learn from and adapt to continuous change and uncertainty. This is no time for the weak-of-heart. Weathering this recession will require a commitment and resiliency beyond what is required in a growth environment.

Employees who have character can learn whatever they need to learn to help the business be successful. Keith McFarland in the article he wrote for BusinessWeek titled “The Right People vs. Getting the People Right", argues that it is the business leader’s job to help people develop into successful team members. He writes:

I think way too much has been made of this "right people" idea, and today some leaders use it as an excuse for their companies' poor performance. After all, as I like to ask the leader who blames his company's travails on the lack of right people, how did those wrong people get there in the first place? The typical reluctant response? "Well, I hired them."

Every employee should have a development plan and it is the company’s responsibility to invest in that plan to move the employee to the level of skill needed to help the business grow out of the current slump. But don’t let people flounder while not giving them every opportunity to succeed. Especially now, companies can’t afford to be cavalier about their most important resource.

How to Stay Successful in a Recessionary Economy

In tough times, successful organizations actively look for ways to strengthen themselves. Four leaders of successful organizations were on a panel March 24th in Ann Arbor, Michigan. The panel included: Paul Saginaw, co-founder of Zingerman’s, an Ann Arbor institution and internationally famous deli; Janet Muhleman, President of re:group, a highly successful branding and marketing agency; Doug Rothwell, president of Detroit Renaissance, a consortium of business leaders working together to accelerate the region’s economic growth; and Roger Palay, Vice President of Instruction at Washtenaw Community College, a fast growing two-year college serving the learning needs of people in and around Ann Arbor and Ypsilanti. When asked what they were doing differently in this challenging, economy, they said that they were:

• Recruiting new talent to add to their teams at a time when talent is relatively cheap
• Developing personal relationships with future customers and business partners
• Being obsessive about their focus on customers and the customer experience
• Cultivating new customers
• Picking up market share while other companies are hunkering down
• Showing employees that they appreciate them
• Planning for the future
• Developing their “digital face” (Web site, social networking sites, etc.)
• Doing additional maintenance and improvement of their facilities

It seems to me, this is all good advice for any organization struggling in this recession. It would be easy, and probably very tempting, for these four organizations to take a defensive posture and ride out the economic storm using tough times as an excuse. Instead, they are aggressively nurturing new relationships, new talent, new customers, and new opportunities.