…ya got it all wrong!

I was watching a sports show the other day and the topic of discussion was “What is the matter with [the local team]?”…7 straight losses; a long time key member of the team wanting to be traded; the Captain not happy with something.

The person being interviewed about how to handle the situation was the former Manager of another professional team in the same city.  His solution for this team was to “get a different attitude in the Front Office and drive that attitude throughout the organization”.  Tell everyone how they want them to behave, and make it happen.”

 YIKES!  No wonder he is a FORMER Manager!

In our own organizations, how much time do we spend listening to the “players on the field”…the people on the shop floor?  How often do we even talk to them?

Sorry Bobby.  That is NOT the way to get a better attitude in the rest of the organization.  You just don’t tell them to straighten up.  If you lay down an edict the frustration, resentment and anger will remain and the dysfunctional behavior of the team will just go underground and become that much harder to fix.

So, what should you do?

First, the Front Office should spend a little time LISTENING to the organization to get at the root of the issue.  Apparently, they are not doing that. Second, they should consider a little FLEXIBILITY in how they manage the team, and recognize that the players are stakeholders in the organization too.  Finally, they should INCORPORATE what they are hearing from the team in making some changes, and they should be prepared to accept responsibility for their own contributions to the problems and be willing to make changes to their own attitude.  After all, the TEAM goes far beyond the players on the field! 

In our own organizations, how much time do we spend listening to the “players on the field”…the people on the shop floor?  How often do we even talk to them?

One of the toughest parts of being a leader is getting the information you need, when you need it.  There are several factors working against you in this regard.

First, I find that people often do not know what is the right or relevant information.  They do not have a clear understanding of their business drivers and what they should be monitoring. 

Second, we all suffer from having multiple systems in house.  Changed or varied systems means that the information you seek is often in multiple places, has changed formats or varied calculations which make it tough to combine and understand. 

Finally, sometimes people inside your organization don’t want you to have that information.  They may feel that it exposes them.  They may feel that your visibility to that information will lead you to want to change something, and that will require something different from them (change).  This all may sound a bit cynical, but it has been my experience and observation.

As the leader you have to identify the right things to measure.  Study your key processes.  Determine what outcomes you are trying to achieve.  Back track through those processes from the endpoint to the beginning and determine where you have control.  Develop metrics to measure and manage those aspects. (See the BD example from the previous post).

Once you have identified those points of control, you must define exactly the information you want to measure, and how to measure it.  It may seem obvious, but you must check the details of the math behind the metric with everyone who is generating it.  You have to take the time to drill down into the details to be sure that you are getting what you really need and have asked for.

…you have to be sure that the metric is being accurately calculated, or you will be drawing false conclusions about the performance of your business…

As an example, in one organization we had a metric of errors per data file.  The target was 98% error free.  As it happened one business in our group was looking at each file as three files since our customer was splitting the file for use by three different departments within their operation, and reports of errors were coming from three different sources

As a result, this business group was using the wrong denominator for calculating their error rates.   Their denominator was three times what it should have been so their resulting error rate was 1/3 of what it should have been.  It seemed that their performance was far superior to those of our other business groups until we discovered the difference in calculation. 

Though it seems like a small thing, you have to be sure that the metric is being accurately calculated, or you will be drawing false conclusions about the performance of your business unit, and making faulty comparisons to other business units.  Again, clarity is key.

Finally, to be sure that you are not being blocked from the data you need, and to ensure that the data you are getting is accurate, triangulate on the data…use multiple sources to collect or verify the information you are gathering and using.  In that way you can more easily identify inconsistencies or errors.

Running with your head down…

That is what they used to say about Duke Snider, the former American baseball great.  He would hit the ball, put his head down, and run.  He did not pay much attention to what the other team was doing with the ball.  Often he would get thrown out trying to stretch a single into a double.

Operating a business without all the information you need is like running with your head down.  Often I see businesses failing in this way.  I see them generating a lot of information, but often it is not the RIGHT information.  Or, they have the right idea about what information they should be looking at, but the method or the math for collecting it is wrong or inconsistently applied.  Worse is that it is often collected but not acted upon or tracked and managed.  It is as if generating the data is the ultimate goal.

In my experience there are a few key metrics you need to keep and manage.  You have to determine what information you need, build the processes to get that information on a regular basis, and study it and make decisions based on that data.  For example, in one organization we were building the business development (sales) function.  We developed a metric for the number of BD contacts we made each week which included mailings, calls, and visits.  Historical data showed us the relationship between the number of contacts we made and the number of Requests for Proposal we received.  We also had data about the average size of our proposals, and our win rate.  With these data we were able to determine the contacts it would take to achieve our revenue goal, and quantify how to staff the BD function to achieve that goal. 

Our primary metric was Number of Contacts Made.  That is the activity we could directly control.  That was the metric we reported every week.  Secondary metrics (results) were the number of RFP’s received, the size of proposals, and the win rate.  We collected these secondary metrics so that we could analyze them and keep our forecasting algorithm current. 

We did not report the secondary metrics every week because they were the result of the primary activity and took time to unfold.  RFP’s lagged several months behind contacts, and awards lagged a couple of months behind RFP’s.  Weekly measures of that data were meaningless.  A chart of that data had many peaks and valleys.  If we had tried to manage our controllable activity (calls, visits, etc.) based on those peaks and valleys, our actions would not have been directly linked to the results we were achieving.

Many businesses do that, particularly with metrics.  They collect and report a lot of data but do not do a good job of understanding the relationships among the data before acting on it.  It is a lot of activity but little of any impact.  They mistake activity for clarity…they are “running with their heads down.” 

In the next post we will talk about how to get the right information.

“Be mindful of the responsibility you have to those you serve, but also to those who serve you, for without them you achieve nothing.” 

Simple message.  There is little that you do by yourself.  As a leader you need many people to carry out the tasks required to move your organization forward.  Be aware of their needs; be aware of your responsibility to them.

Still additional question though – do you think that giving feedback on someone’s strengths & weaknesses is the right way to address this issue? What I mean is – if I know that that person can hardly improve it (it is not an action, but rather a personal characterstic which can be changed only with great difficulty, OR values of that person etc) I will not include this into the feedback. What are your thoughts on this?

Tomas

Hey Tomas…great question again!

Yes, I still think it is important to give that feedback.  It does not matter if it is a value, a personal characteristic, or a particular skill. 

First, you need to decide if the employee is not performing up to expectations…i.e., this characteristic or value is effecting their performance in the role.  Second, you need to decide if you NEED a higher level of performance than you are getting from that employee.   If you do not, then you take those related responsibilities out of the job, change the job description and increase the clarity around what you DO expect in that role. 

However, if you DO need that level of performance in the job and they cannot deliver it, for whatever reason, then you must have that discussion with them.  That feedback conversation then becomes the first step in documenting the weakness (or value difference) and managing them out of that job. 

Moving an employee out of a job they cannot do is better for both the employee and the company since not doing so will just become a source of frustration for them, and failure for the business.

Another key point here is to make feedback about an action and a result, not about the person.  This is true with values, characteristics and specific skills.  For example, I once had an employee who had a serious EGO issue and did not work in a collaborative way with other parts of the organization.  In order to maintain control and power, she would withhold certain information from other teams within our organization.  The impact was that is was causing great tension and animosity between the groups.  This effected our efficiency as well as our image with the customer. 

I discussed this with her in terms of information that was not being shared, and the impact it was having…the action (or lack thereof) and the result.  However, her need for control and power was something she could not manage.  She did not change this characteristic, and it became a very short process for moving her out of that job and improving the whole dynamic within our team, and the performance for the Customer.  Having the conversation enabled us to move the organization forward. 

An interesting side note in that example, the Customers saw this cause and effect long before it became evident to me.  That is another issue…about being able to get the information you need as a leader.  Will tackle that one in the next post.

Thanks for your question.  FYI…you may also want to look at my post on Managing Performance (http://www.scottneilson.com/?p=391).

© Howard A. Matalon 2010. Strategic Advantage Series. All Rights Reserved

Leverage. One of the most commonly misunderstood and underappreciated concepts in executive and managerial negotiations.

Part of the problem with the use of the concept in employment negotiations lies with its overused primary definition: to increase force on an object. (As an aside, many older dictionaries used to carry an image of a man using a lever to move a  boulder.)

The secondary meaning of leverage, however, and arguably what the concept really  stands for, is something quite different, and far more compelling.

Positional Advantage.

Leverage in business dealings is all about finesse, not force. It is about recognizing and appreciating your negotiating posture from all angles and knowing when and how to change the dynamic of a negotiation to influence the other side. All career veterans understand this concept. And yet it is very difficult to apply in employment negotiations, particularly for high-level employees negotiating their first executive employment relationship with a new employer or at an internal promotion stage.

 The most illustrative example of this problem lies with the executive’s effort to translate the terms of an employment relationship into a beneficial written agreement. Remarkably, many executives remain reluctant despite the sophisticated corporate environment in which they themselves conduct business to seek written employment agreements because of preconceived notions about the relative leverage each side brings to the table in negotiating the employment relationship itself.

Understanding leverage in negotiations can quite literally make the difference between obtaining a successful position and sustaining it in the long run.

There are two competing dynamics that often discourage executives from either obtaining a written employment agreement or securing favorable terms in such agreements.

 When executives secure new positions, no matter how seasoned they are, they invariably regard their hire or promotion as a vindication or validation of their personal worth. (This is, of course, not how executives should view the matter but always do because of the personal investment of time and resources in their careers). By extension, an executive’s perception of an employer can, in certain situations, be heavily influenced by the validation process.

Working against that validation is the fear that somehow they will diminish the employers’ perception of them by overreaching at the bargaining table. Executives remain concerned (particularly given the present economic climate), that even the mere suggestion of asking for employment rights not readily offered to them will leave prospective employers with a negative impression of their new hire before the new relationship commences.

With this concern fixed in mind, many executives often forego discussion of a written agreement or changes to same, and simply take the leap of faith that the relationship will ultimately meet some or all of their expectations, or that their employer will come to appreciate their contributions and offer rewards in line with those expectations at a later date.

More often than not, however, executives fail to recognize that their positional advantage with an employer diminishes at every stage of the negotiation, and virtually disappears after the executive begins working for that employer.

Many executives who do not understand their positional advantage in these situations find themselves accepting from their employer terms of employment that barely define salary and benefits, let alone the critical provisions whose absence can leave the executive exposed when the “honeymoon” period ends. Executives can be sure, however, that almost every intelligent employer will lock the executive into extremely detailed post-employment restrictions as part of the hiring process.

The great irony in executives who are outmaneuvered by employers in this fashion is that they would never allow this situation to occur in their own business dealings with third parties.

How do executives find their leverage in employment negotiations?

Positional advantage always begins with self-assessment. Executives must consider what brought them into the marketplace or to their promotional opportunity in the first place. They must carefully assess their strengths and weaknesses by drawing upon prior employment experiences with management and reach a greater appreciation and understanding of their value in the marketplace and their expectations of a new position or employment opportunity.  

The self-assessment process is also beneficial because it will lead to a more sincere approach in negotiation with an employer. And in such negotiations, candor and transparency are critical tools in delivering executive expectations to employers.

Unfortunately, many executives do not perform this self-assessment before direct negotiations with an employer begin, and thereby underestimate themselves. They assume that in a competitive job market, pressing for clear and definite employment terms will distinguish them from other candidates seeking the same job opportunity or position. Make no mistake. The market will support the executive worth his or her weight in talent regardless of the economy.

Next, executives need to carefully consider the perspective of their employer in how businesses approach employment relationships. It is true that most businesses do not see eye-to-eye with executives on the structure of employment agreements, and will act to limit an employee’s rights wherever possible. However, executives often fail to recognize that they share the rationale underlying management’s viewpoint in negotiation: the protection of assets in the event things go awry in the employment relationship.

The appreciation of mutual self-interest in employment negotiations is at the very heart of positional advantage. The basic goal of every employer who offers a written employment agreement is to protect the company’s business assets and intellectual property because such agreements represent the principal method available to employers to impose post-employment competitive restrictions on executives. In contrast, executives look to written employment agreements not merely to confirm their compensation packages, but rather to secure severance and other benefits in the event of termination by the employer.

 Executives who are capable of seeing this commonality of interest and can articulate in negotiations that the rights they want to obtain from the employer are essentially the mirror image of the terms that their employers want from them will have effectively applied positional advantage and in almost every negotiation will gain the upper hand by controlling the conversation.

To gain that necessary edge in negotiations, executives need to have in mind at all times during the hiring process the critical terms that they want to build into a written agreement of employment:  

Job Responsibilities and Duties. Executives are going to want the nature and scope of their work for the company identified in a written agreement. Incorporating into the agreement a job description or an outline of duties and responsibilities is a must because it serves as the backdrop to evaluate how an executive is perceived in the work environment, the flexibility to maneuver for a greater role, and forms the very basis for job performance evaluation. If possible, executives also want their employer to identify who they will be reporting to at the company. This becomes very important particularly where an executive has successfully obtained a well drafted severance provision.

 Compensation. Executives need to consider far more than merely the amount of base salary. A well-drafted compensation provision will address how and when salary increases and avoid allowing the employer to correspondingly decrease their salary in an economic downturn. If the employment relationship involves incentive plans, bonuses or stock awards, the executive must insure that the terms and conditions under which such additional compensation is awarded are as clear and precise as possible. Executives must also be wary of provisions that define the conditions under which employers can rescind or forfeit such additional compensation.

 Benefits. Some of the same concerns about compensation play an important role in detailing the benefits that employers will make available to their executives. Many employers refer to non-existent policies yet to be created as to the nature or extent of benefits. And recently, employers have started adding provisions to bargain away an executive’s rights by negotiating flexibility in benefits plans, reserving the right to review and alter plans on a periodic or annual basis. There are a variety of creative solutions to address this issue, including allowing employers to reserve certain rights to modify benefits to meet their business objectives as long as the aggregate value of the benefits are not diminished.

Severance. This is the holy grail of executive rights in an employment relationship. Today, many employers are cutting back on severance provisions, which may in fact be a grave mistake, particularly since many of them are still insisting upon post-employment restrictions such as noncompetition agreements. (In a number of instances, employees have successfully challenged those restrictions without severance as an unfair impediment to their ability to earn a living.) One of the new popular programs being offered to executives are “bridging” severance provisions, which allow executives a limited period of severance while looking for new employment. The severance is terminated immediately once the executive obtains new employment.

Severance provisions always come at a price, however. Executives must be prepared to adhere to certain post-employment restrictions governing their ability to compete or solicit business away from their employer. As these restrictions have become the business norm, executives should focus their energies upon reaching an understanding with the employer that those restrictions parallel the term of severance (i.e., a one year non-compete can be accepted provided that a year of severance is provided). Executives will want to insure that they are provided with severance in the event that the employer fails to deliver on its promises, such as payment of salary or benefits, or the business of the employer is acquired by third parties in what is known as a “change of control”. A change of control severance trigger has enormous benefits to executives, particularly where it is carefully drafted to encompass a wide range of circumstances, including management buy outs or shareholder approved liquidation of the company’s assets.

 Termination. This is perhaps the provision most important to employers other than non-competition and intellectual property/confidentiality rights. Many employers will insist on a host of provisions, including their ability to terminate the executive with little or no notice, while requiring months of notice from their executives. One effective strategy available to executives facing strict company provisions on termination is to request a parallel provision that allows them to leave the company’s employ for “good reason” and still obtain severance, such as a breach of the employers’ obligations under the agreement, company relocation or a reduction in salary or benefits. This good reason clause is the mirror image of the clause that allows the employer to terminate at will.

Once the executive has these core concepts firmly in mind, they can weave them into negotiations from the outset of the hiring process. Failing to do so may have disastrous repercussions for a successful negotiation of employment rights. As negotiations continue, employers grow increasingly resistant to the efforts of executives to modify what has been agreed to verbally. The written agreement should therefore resemble in every respect possible what has been discussed verbally in the negotiation of employment rights.  

Finally, the executive must remember the cardinal rule of all negotiation. Never sign an employment agreement without due diligence. No buyer in a merger or acquisition would ever acquire a business without a thorough understanding of that business. An executive’s career is her most important business asset. It is therefore critical to review the agreement word for word with an employment specialist, who should be seen in the revisions process, but never heard.

In closing, Leverage is the very key to the negotiation and development of a successful employment relationship. For the executive who masters the technique of positional advantage, great opportunities in the marketplace are always close at hand.

   ==================WORDS ON THE AUTHOR=================== 

Howard Matalon, the author of the Strategic Advantage Series, is a executive coach affiliate of QUAD 2 Consulting, specializing in inplacement and outplacement of executives. He is also a seasoned employment litigator, with over fifteen years of experience counseling both executives and management on important issues of labor and employment law. Mr. Matalon also practices law as a partner of OlenderFeldman LLP in Northern New Jersey. Mr. Matalon’s contact information is available from QUAD 2 and on his firm’s website, www.OlenderFeldman.com.

I have gotten a number of comments about this post, so I will add them one at a time so that each post is not too long.

COMMENT:

Still additional question though – do you think that giving feedback on someone’s strengths & weaknesses is the right way to address this issue? What I mean is – if I know that that person can hardly improve it (it is not an action, but rather factual, characterstics which can be changed only with great difficulty OR values of that person etc) I will not include this into the feedback. What are your thoughts on this?

Tomas

REPLY:

Hello Tomas…great question again!

Yes, I still think it is important to give that feedback.  First, you need to decide if you NEED that level of performance in the job.   If you do not, then you take that responsibility out of the job, change the job description and increase the clarity around what you DO expect in that role.  However, if you DO need that level of performance in the job and they cannot deliver it, then the feedback conversation becomes the first step in documenting the weakness and managing them out of that job.  Moving them out of a job they cannot do is better for both them and the company since it will just be a source of frustration for them, and failure for the business if you don’t.  You cannot afford to have a person in a role and not performing to your level of expectations or needs.

Gotcha…thought that was something else didn’t ya?  Smith & Wesson? 

Hello all.  Please forgive my prolonged absence.  It has been one year since I last put a post on the blog.  In that time I have relocated twice…once to Chicago, and once to France.  Needless to say, I have been up to my eyeballs with adjustments.  I am still up to my eyeballs, but I am intent on getting back to my blog.   I am glad to be writing again. 

I had one reader write me the other day asking about the choice between improving on your weaknesses versus building on your strengths…which is better?  Interesting question.  In my opinion, as with many other areas, it is a question of balance.  It depends on which skill areas are weak and which are strong.  It also depends on how weak you are in those areas.  Finally, it depends on the current needs of your organization and how those align with your strengths and weaknesses.   

However, the question also took my thinking down another path…now there’s a surprise. 

The real key to managing your strengths and weaknesses is knowing what they are.  Most people do not.  To make matters worse, I have found few people with internal fortitude to ask for feedback about their strengths and weaknesses, and to listen to the answer. 

If you are in denial about your own areas for development…your individual weaknesses become organizational weaknesses, and your problems get bigger fast!

To take the dilemma one step further, I have found few people that are skilled or feel comfortable giving “constructive feedback”.  They seem to feel that it is going to be a confrontational or combative situation, so they either do not give any feedback at all, or they “shine it up” so that it is easier to deliver.  As a result, the recipient is not getting real feedback, or it is shallow in content. 

Now, to make matters even worse, in those rare cases in which people do get feedback, they often do not believe it.  They go through a period of denial followed by anger.  Sometimes they make it through to acceptance and correction.  Unfortunately, research shows that acceptance and correction are not the usual response.

The final pitfall, though, is the worst.  As you know, we tend to hire in our own image.  If you are in denial about your own areas for development and are hiring in your own image, then you are hiring people with the same weaknesses as your own.   Your individual weaknesses become organizational weaknesses.  The problem gets bigger quickly!

FYI…this is why Performance Management Systems are generally ineffective.  The design is usually good.  The execution is the problem.  Supervisors rarely do an adequate job of providing feedback.

Back in the early uh…well…a long time ago, I had the opportunity to design the leadership development program for one of the top pharmaceutical companies in the world.  During that time I sampled many 360 degree programs and assessment centers.  The first 360 program I used really shocked me because it pointed out an area of relative weakness which I had previously felt was a strength…developing people.  I was stunned.  Yes, I went through the denial phase and discounted the validity of the whole process.  Fortunately, I came around and listened to the feedback.  The upside of all this was that I paid attention to it, worked on it, and two years later it had improved to a clear strength. 

The point here is, get feedback…take a 360.  You need facts and data…real information.  Often people you work with are not comfortable or skilled at providing that data.  Seek out a third party for assistance…take a 360 degree feedback program.  They are not expensive and the usable data is priceless for developing your career.  The bonus is that they also generally provide you with development ideas for improving your areas of relative weakness.  As a reference, the ones I have used and that I found particularly useful were from DDI, PDI and CCL.

Haven’t had the time to tell you what is new on the blog…here it is!

Added a new category on Development.  This was at the request of some readers who find employee development to be a challenge.  I think many of us struggle with this subject.  I will try to write something on this subject once a month.

Added a page for Comments, Questions and Suggestions all of which can be done anonymously.

Added a page for Resources in which I will write about programs, experts, articles and books that may be useful for you.

Added a Marquee to provide some verbatim feedback from blog readers and seminar attendees.  It is located in the left column and scrolls through comments.  If you have anything you would like to add please feel free to send your comments on the Questions/Comments page.

Added a place to list Blog Stats right under the Marquee. 

Got a couple of other new pieces in development…will let you know when they are complete.

It is NOT rocket science, but it IS an area which is a source of chronic pain in organizations…DEVELOPMENT!  In this case I am talking about employee development…skill development…career development.   Development is a new category on my blog and periodically I will be writing posts on this subject.

Development is an area in which I have found organizations to be chronically weak, and it is one which I have found to be among the most powerful in motivating employees.  Getting it right has huge payoffs. 

First, let’s get clear on the concept.  What do people want in their careers?  Simple…they want a career, not just a job and not just a paycheck.  It has been my experience that a pay raise is not motivating.  At best it is satisfying for the short term.  Unfortunately, pay raises are often not done well and become more of a DE-motivator.

Being good at employee development means that your organization will be more productive and effective.  It means that your employees will be more motivated and committed.  It means that you will have better reputation in the market and with your customers.

The possibility for individuals to grow and create future opportunity IS motivating.  I have found it to be the MOST powerful of motivational tools a leader has at his/her disposal.  People are trying to develop a future for themselves and they want to know that they can grow and develop in their chosen field of interest.  Most do not expect a hand-out and are not afraid to work for it.  In fact, working for it makes the reward that much more meaningful.  However, they know that they cannot achieve this kind of development without management support.

So, why is it so difficult to make it happen?  The conflict arises with leaders/managers.  It is not a priority because it is not seen as clearly having a payoff for the company.

• First, it takes time to think of ways in which to develop employees.  It takes time to think through what their development needs are and what their career interests are. 
• Second, it takes time and resources to actually carry out that development. 
• Finally, once you do carry it out, the perception is that the employees move on to the next higher level job or, worse, out of the company.  This means change and requires the leader/manager to take the time to recruit and fill the position…it makes their job that much harder. 

While it may be true that they move on to better jobs, my experience has been that investment in development actually earns the organization HIGHER rates of employee retention and that this movement is internal.  In addition, there are other upsides/payoffs to developing employees.  

• First, while they are with you they are more motivated because you are investing in them, which they know will mean greater career potential in the long term.  In my experience this translates to improvements to the bottom line.
• Second, as you are developing them they are performing better in their current role so you are getting greater quality and productivity. 
• Third, providing developmental and career opportunity builds a level of loyalty and commitment among your employees that earns you dividends even if they do leave the company, particularly when they are hired by your customers and your former loyal employee now becomes a committed customer because of how well you treated him/her. 

Still, employee development seems to be an enigma.  Despite great research on the subject, and the efforts of HR departments, who often have good ideas about how to make it happen, it doesn’t.  As a starting point, leaders need to recognize the importance of developing people and make it a priority.  Second, we all need to de-mystify the subject.  It is not that tough.  It just takes a conscious effort.

I will be writing more on this subject, but to get you started, most of the best development opportunities happen every day in business.  Focus on development “in-job” which means such things as job swaps, temporary special project assignments, and filling in for another employee who is out of work  for some reason.  It helps you as a leader/manager fill short-term gaps.  It can be done without cost.  It provides people opportunities to learn new skills.  Everybody wins! 

Being good at developing people means that as a leader/manager you will likely spend more time recruiting and filling open positions.  It means that you will likely have to deal with more change in your organization.  It means that you will have to spend time thinking about it and how to make it happen.  However, it means that your organization will be more productive and effective.  It means that your employees will be more motivated and committed.  It means that you will have better reputation in the market and with your customers. 

It will mean that you are doing YOUR job as a leader.