The Performance Improvement Blog

How Leaders Learn

Learning is not a solitary activity, especially for high performing leaders. John Baldoni, in an article for HarvardBusiness.com titled Never Let Your Ego Stop You from Learning, describes how people like Shaquille O’Neil (basketball) and Jim Collins (management guru) who are at the top of their professional games have sought the help of teachers to improve their abilities in areas in which they want to perform at a higher level. Baldoni writes:

Most often you cannot receive more schooling, especially when dealing with critical issues that are fast-breaking and in which there is no body of formalized instruction. You will need to figure things out for yourself. For most leaders figuring things out is second nature; it is way they have arrived in positions of leadership. But the best leaders are those that are never afraid to ask questions. Rather than a question being a sign of ignorance; it is admission ticket to learning as well as a good way to build rapport and trust with colleagues.

The best leaders know that to achieve excellence they must have interaction with people who can help them clarify their thinking, give them performance feedback, and challenge them to continuously improve. This can be a trusted co-worker, a mentor, or a leadership coach. Whoever it is, we need someone to ask us tough questions that will challenge our thinking, get us outside our comfort zone, and help us adopt new, more effective ways of doing things.

Employee Engagement and the Bottom Line

What impact does employee engagement have on business results? Employee engagement has become quite popular among those people concerned about the culture of work in organizations. Many HR and organization behavior professionals have been jumping on the engagement bandwagon. But unless we can define and measure engagement, it will continue to be a hard sell to management, especially in these recessionary times of deep cutbacks in people and resources.

Defining engagement as an employee’s level of motivation and potential for discretionary effort, Keith Wiedenkeller, SVP, Human Resources, AMC Entertainment, Inc. wrote in Film Journal International’s blog:

In a recent survey process at AMC, we found that our theatres with most improved employee engagement scores tended to have most improved business metrics as well, including better concession performance, better cost control, and better customer service metrics than those at less-engaged units. The correlation was so significant as to overshadow any impact from outside factors.

I have written before about the impact of employee engagement at Best Buy. Now we have some evidence of business results in AMC, a movie theater company. Where else, in this very challenging economic environment, is employee engagement making a difference on the bottom-line?

Uncertainty in Organizations

In an op-ed piece titled “What You Don’t Know Makes You Nervous,” Dan Gilbert, Harvard psychologist, writes:

…people feel worse when something bad might occur than when something bad will occur. Most of us aren’t losing sleep and sucking down Marlboros because the Dow is going to fall another thousand points, but because we don’t know whether it will fall or not — and human beings find uncertainty more painful than the things they’re uncertain about.

Uncertainty contributes to anxiety which contributes to poor health and low work performance, among other things.  We can handle negative feedback, cutbacks in spending, loss of market share, and low quality products and services. We just need to know the truth and that there is a plan for resolving problems and achieving success. It's the not-knowing that's the problem.

Gilbert’s column caused me to speculate about the kinds of uncertainty that are part of the culture of many organizations.

• No feedback from your boss, so you’re uncertain about how he/she views your work
• No clearly defined strategic goals, so you’re uncertain about where the organization is headed and if it’s likely to get there
• Financial performance data is not made available to employees, so you’re uncertain about the long-term viability of the organization
• Employee roles and responsibilities are not clarified, so you’re uncertain about what you should be doing to help the organization be successful.
• No feedback from customers, so you’re uncertain about how well your products and services are doing in the marketplace
• No research on long-term market for your products and services, so you’re uncertain about the future of sales

What are aspects of your organization’s culture that create uncertainty?

Don't Count on Teams of Senior Leaders

J. Richard Hackman, a Harvard University professor of Social and Organizational Psychology and co-author of Senior Leadership Teams: What it Takes to Make Them Great (as well as author of many other classics in social pyschology), in an interview for Harvard Business Review, said this about teams:

People tend to think that teams are the democratic—and the efficient—way to get things done. I have no question that when you have a team, the possibility exists that it will generate magic, producing something extraordinary, a collective creation of previously unimagined quality or beauty. But don’t count on it. Research consistently shows that teams underperform, despite all the extra resources they have.

This observation is based on research that Hackman and others did on over 120 executive teams in a variety of organizations around the world. They found that the vast majority of these team members did not know who was on their teams, what the team purpose was, and how to be successful as a team. I think these were teams in name only. If they don't have a clear, specific purpose to which everyone in the group is committed, then they don’t have a team. Using a sports analogy, as people are apt to do when talking about teams, it would be like bringing 10 people together to play a game without telling them what game they are playing, how they will keep score, and how they will know when they win.

I have no doubt Hackman found a preponderance of dysfunctional executive groups. That has been my experience, too. Groups of managers are brought together, called a “team”, and expected to “produce something extraordinary.” That isn't enough to turn a work-group into a high performance team. I like Katzenbach's and Smith's definition of a team:

...a small number of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable.

Somebody has to lead group members in the hard work of clarifying membership, developing commitment to a common purpose, establishing performance goals, and holding each other accountable. Then, and only then, might they have a chance of doing something extraordinary together.

ROI of Coaching

Training budgets are declining while leadership coaching appears to be continuing to increase. But this increase in the demand for coaching isn’t going to continue unless coaches can show business results. Verity Gough writes in TrainingZone:

It appears now is the time for coaching to come into its own, for coaches to be savvy about how they market themselves and ensure that they can offer clients a good return on investment.

I’ve written in a past blog post about the importance of measuring the results of coaching.  My experience with the evaluation of coaching is that, when coaching is done well, it can have a significant impact on business results.

In one situation, an employee who would have been fired before her manager received coaching, was retained and became a valuable contributor to the organization. The manager learned how to listen to the employee and give feedback more effectively. The organization avoided the substantial cost of firing one employee and hiring and training another employee to fill that position.

In another situation, an executive who was ready to quit his job because of tension with his CEO, stayed in his position in large part because of coaching. Coaching helped this exec understand how he could relate effectively with his boss; know what was realistic to change and what couldn’t be changed. Their relationship improved and the exec did not resign and, in fact, is now working well with his boss. The savings from not having to replace an executive and preventing disruption in operations can be enormous for an organization.

In still another situation, a manager would not give negative feedback to his team members and would not help someone leave a job when it was a bad fit. Coaching helped this manager accept his role and develop capability in giving honest feedback to employees and moving them to other positions or out of the organization when they could not perform well in their jobs. Unsuccessful employees are very costly; the organization can suffer from poor performance, lost productivity, and low team morale.

Each of these examples demonstrates the impact of coaching…when it is done well. We need more studies of what kinds of coaching under what kinds of circumstances can have positive business outcomes for individuals, teams, and organizations.

Importance of Communication in a Recession

In a recession, CEOs can talk about innovation, operations, and sales all they want, and as captains of industry that is probably what they know best, but when it gets down to employee engagement and high performance, clear, transparent, and frequent communication is the key. Robert Polet, CEO of Gucci, the multi-billion dollar, iconic, luxury goods retailer, writes in BusinessWeek:

The key success factors in an economic downturn are speed, flexibility and innovation, while remaining constantly in tune with customers' needs. These factors will allow a company to perform at its peak, even in a down cycle, and are powered by a common denominator: an organization's talent.

Gucci is definitely demonstrating flexibility and innovation with its new go-green direction. You can now buy an eco-friendly T-shirt from Gucci for only $185. This appears to be part of a promotion for a new movie by Yann Arthus Bertrand about planet Earth, a project being sponsored by Gucci’s parent company PPR Group.

But in the remainder of the article, Polet does not talk about “speed, flexibility and innovation.” He talks essentially about the importance of communication in keeping employees “…engaged, motivated, and focused.”  He writes:

In addition to setting a tone of calm and control, this is a great time to reiterate the company's long-term goals and brand positioning while discussing any shorter-term adaptations required to maintain performance. Employees need to understand both current and long-term direction, as well their role in it, to remain motivated and engaged... leaders need to step up their role as communicators, sharing information frequently and honestly in order to maintain trust and engagement.

Maybe the Board of Directors wants to hear about innovation, operations, and sales, but the successful CEO knows that employees pay attention to how and what their leader is communicating. They want to hear a calm, confident voice from someone who is clear about goals and can tell them how managers can contribute to achieving those goals. Employees want to be involved in these decisions and know that they have a role in bringing the company out of the downturn and positioned for future success.

Paradox of Employee Training

Paul Krugman, recipient of the Nobel Prize in Economics and columnist for the New York Times, believes that three paradoxes are worrisome for our economy.  He writes in his May 4 Op-Ed piece:

We’re suffering from the paradox of thrift: saving is a virtue, but when everyone tries to sharply increase saving at the same time, the effect is a depressed economy. We’re suffering from the paradox of deleveraging: reducing debt and cleaning up balance sheets is good, but when everyone tries to sell off assets and pay down debt at the same time, the result is a financial crisis… And soon we may be facing the paradox of wages: workers at any one company can help save their jobs by accepting lower wages, but when employers across the economy cut wages at the same time, the result is higher unemployment.

I think there is a fourth economic paradox: the paradox of employee learning. Recently, in the course of my work, I have talked to many training and development leaders in many organizations in many industries. The common refrain I hear is, “We have had to cut training positions; our budget for training and development is frozen; we’ve had to offer less training to our employees; and we don’t see any of this changing before the end of the year.” The paradox of employee learning is that, to save money, fewer people are doing more jobs but learning less. Instead of saving money, this is costing more in terms of lost revenue, decreasing market share, failure to retain high performers, poor employee engagement, and an inability to respond when the economy picks up. The opportunity for employees to learn how to do their jobs more effectively, be more effective managers and leaders, and help other people in their organizations be successful, is critical to being successful as an organization. Eliminate that learning and these companies will find that they cannot provide great customer service and they cannot make great products. They might save money in the short run but they will lose loyal customers and market share in the long run.

End the Academy (and the Corporation) as We Know It?

Mark C. Taylor, Chairman of the religion department at Columbia University, wrote a provocative op-ed piece in the April 27^th issue of the New York Times, arguing that graduate education should be dramatically restructured. He writes:

GRADUATE education is the Detroit of higher learning. Most graduate programs in American universities produce a product for which there is no market (candidates for teaching positions that do not exist) and develop skills for which there is diminishing demand (research in subfields within subfields and publication in journals read by no one other than a few like-minded colleagues), all at a rapidly rising cost (sometimes well over $100,000 in student loans).

Although I take exception to his characterization of “Detroit” as producing a product for which there is no market (This is an over-generalization for effect that Taylor does throughout the editorial.), I do agree that the academy has compartmentalized learning to the point that a college education at many institutions does not prepare people adequately to solve some of society’s most intractable problems. He uses the example of studying international relations without studying religion. I immediately thought of violent conflicts in the Middle East, where religion plays a huge role in the geography, economics, health care, law, and education of people in that region. Taylor goes on to say:

Restructure the curriculum, beginning with graduate programs and proceeding as quickly as possible to undergraduate programs. The division-of-labor model of separate departments is obsolete and must be replaced with a curriculum structured like a web or complex adaptive network. Responsible teaching and scholarship must become cross-disciplinary and cross-cultural.

It strikes me that this “division-of-labor” model starts in K-12 education, especially high schools that separate students into classes that teach narrow disciplines (e.g., American history, algebra, biology) and continues after college in business and industry, where R&D, manufacturing, quality assurance, customer service, marketing, sales, public relations, distribution, logistics, and administration are all separated from each other by walls (literally and figuratively) and, sometimes, buildings and even countries. These are divisions that make sense from a control standpoint, but make little sense from a learning and high performance standpoint. The traditional compartmentalization of work is a barrier to sharing information, finding solutions to organizational problems, and producing great products and outstanding services. Everybody complains about “silos” in our organizations but it is very difficult to change a way of thinking that was learned in grade school and reinforced in college.