Leadership – General

Published by Scott Neilson on 23 Apr 2013

Too many chefs in the kitchen? – The upside

 

Rotterdam School of Management

Rotterdam School of Management

Last programme of the spring schedule…Rotterdam School of Management.

 

Looking forward to returning in the fall. The results of all the programmes are on the Participant Feedback tab.

 

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I worked in an organization once which was heavily matrixed…meaning, for example, that GM’s of businesses reported up through the business unit reporting structure as well as through a corporate staff structure…site CFO’s reported to the GM as well as to a corporate head of operational finance and to the business unit head of finance.  Similar structures existed all around the organization.  Many of us had numerous people to whom we were reporting.  It was a bit confusing.

My first reaction to this was “Ugh! This is suffocating.”  However, I decided to spend some time trying to come up with every possible reason why this was the BEST structure and how I could best work with it.  Here are some of the answers I came up with.

First, this was an organization that had recently come together as a result of a spin-off of a major corporation and was comprised of many small operations located all over the world.  A highly matrixed structure can be very effective in getting them all to operate in a consistent manner, and to keep them all in control.

Second, a highly matrixed organization can be an effective structure for identifying and implementing cost savings activities across the entire organization.  The matrix provides multiple perspectives through which to look at each operation for these opportunities.  This organization was hugely effective in doing just that and realizing the “proposed synergies” of the new company.

Finally, having a matrix structure makes it difficult for any one person to mask or hide key information and have their own agenda.  While that may sound a bit cycnical, it is a dynamic that I have certainly observed on more than one occasion.  Like it or not, one of the difficult aspects of bringing a new company together is getting all leaders to buy-in to the new management, structure and direction. A matrix is an effective tool for working through that process and keeping a complex organization under control.  I also wrote about this in the post “Are you getting the information you need…”  link http://www.scottneilson.com/?p=1249

There were a couple of interesting outcomes of this for me…I found these were really very good reasons for being structured and operating the way we were, despite the fact that I did not like the structure; and, being objective about it enabled me to diffuse my anxiety about the structure and actually work effectively within it.

Published by Scott Neilson on 15 Apr 2013

Management vs. Leadership…

Corvinus University of Economics, Budapest, Hungary

Corvinus University of Economics, Budapest, Hungary

Had a large group at Corvinus University of Economics in Budapest last week.

 

Here is a picture from across the bridge on the Buda side.  The old historic building is on the left, and the brand new facility is far to the right.

 

 

Results from the Budapest and Prague programmes are in the Participant Feedback tab.

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In the programmes I have had the last few weeks, the question was again raised about the difference between management and leadership.  I gave my opinion on the subject, but also decided to go on-line to check out some research on the subject.  There was very little worth reading.

Here is what I think.  Both those we typically refer to as “leaders” and those we typically refer to as “managers” have similar, and at times identical, responsibilities.  They have, perhaps, a different mix of responsibilities at any one point in time, but they are similar nonetheless.  It is just at a different level.  While “leaders” may be primarily focused on setting a direction (being very simplistic here in the interest of brevity), they have “managerial” responsibilities as well.  “Leaders” have to orchestrate the efforts of an entire organization, perform performance appraisals, develop their employees, analyze results and report them to the Board or to investors, etc.  These are typically referred to as “managerial” tasks.

“Managers” may be primarily responsible for executing the tactics to achieve the strategic goals, but they have “leadership” responsibilities as well.  Most “managers” have people reporting to them who are actually performing the tasks.  The “managers” are setting the direction (for their team), clarifying responsibilities, determining the targets for performance, etc…things that we normally refer to as “leadership” tasks.

Same concepts, just applied at different levels.

Using the same example I used in last weeks post…at one time I was in an organization that had never done performance appraisals.  People had been working there for years and never gotten any feedback on how they were doing. 

As the senior executive of this organization I felt it was essential that people were clear on the direction in which we were going, who was going to do what to get us there, what kind of results and progress we were making, and what we had to do differently to improve our results and progress.   A basic performance appraisal and feedback system.  

I wrote detailed performance appraisals for each of my direct reports, and reviewed them with each.  I also made a mandate that they would all write performance appraisals of each of their direct reports, and then sit and review every one of them with me and the new head of Human Resources.  We would critique them, help them clean them up, and use that process as a way of improving the feedback they were giving employees. 

They would then discuss those appraisals with their employees in the presence of the HR director, so he could coach them on how to deliver feedback (and to make sure it was getting done!).  This was a start.  Then the process was to trickle down to all levels.

Sometimes, even as the senior executive, you have to get that much into the detail and provide that much clarity to be sure that things are getting done the way you want.

I believe that any position in which people are looking to you for direction is a “leadership” position.  I believe that those terms generally attributed to “leadership”, such as setting direction, motivating, inspiring trust, to name a few, are as applicable at what we typically call the “managerial” level as they are at what we typically call the “leadership” level.

Similarly, any position in which you are required to accomplish tasks requires you to manage those tasks and/or those people assigned to carry out those tasks.  I believe that those terms generally attributed to “managers” such as controlling, scheduling, organizing, structuring, are as applicable to what we typically call the “leadership” level.

If you want to hear more about this…particularly as it relates to all the articles I read, please comment or send me an email.

 

Published by Scott Neilson on 09 Apr 2013

Performance mis-management…

In the atrium of the new building.  Very nice facility!

Prague University of Economics. Very nice facility!

Had a great program in Prague…photo attached. Spent a lot of time talking about employee development, among other things.  My feelings on this are not all that positive, I am sorry to say.  This is an absolute shame.

In my opinion, and in my observation, the problem is not in the systems, it is in the application.

Most organizations I have worked with have very good systems of performance appraisal, succession planning, and employee development.  However, they are not well used.  This is a leadership issue.

You have to make it a priority.  Performance feedback and development is critically important for achieving goals and objectives.  It makes your employees, and therefore, your organization, stronger.  It is one of the most powerful and effective motivators you have at your disposal

…if used correctly and done well.

Therein lies the problem.  Those systems and processes are generally NOT used well.  They are generally very well designed, but the application is weak, at best.  Performance appraisals are not completed…they are not done objectively and fairly…there is inadequate follow-through.  They become a de-motivator.

At one time I was in an organization that had never done performance appraisals.  People had been working there for years and never gotten any feedback on how they were doing.  That is unimaginable to me. 

I made a mandate to our leadership team that they would all write performance appraisals of each of their direct reports, and then sit and review every one of them with me and the new head of Human Resources.  We would critique them, help them clean them up, and use that process as a way of improving the feedback they were giving employees. 

They would then discuss those appraisals with their employees in the presence of the HR director, so he could coach them on how to deliver feedback (and to make sure it was getting done!).  This was a start.  Then the process was to trickle down to all levels.

Sometimes you have to get that much into the detail to be sure that things are getting done the way you want.

An equally big issue is that the employee development part of that process rarely happens.  I have never seen an organization that does a good job of developing their employees.  That is an enormous failure on the part of leadership..at all levels.

Employee development and career opportunity is the best motivational tool you have at your disposal.  Here are some of the problems I see with it.

  • Supervisors do not see it as a priority so they “do not have the time” for it.
  • Supervisors worry that if they develop their employees they will move on to other jobs (better jobs)…and they will then have to replace them (which of course requires re-justifying the position and that worries them).  This is a serious losing attitude.
  • Supervisors do not know how to develop employees.  Well, I guess you can say that…but, I really feel that they are not trying.  It is not that difficult.
  • Supervisors feel that they do not have the money in the budget to do it.  Well, it can be free if you put some effort into thinking about it.  Job swaps; temporary assignments when someone is on vacation or leave; special project assignments.
  • Employees do not recognize that job swaps, temporary assignments, and special project assignments are some of the best development opportunities out there.  The research shows that in-job development is the most powerful in developing true skills.

As a leader you should recognize that this is a big missed opportunity, and an easy one to correct.

Employee development makes your organization stronger in terms of better skills…

Employee development increases organization stability in terms of internal promotion and employee satisfaction, motivation and commitment…

Employee development reduces your overall operating costs in terms of better performance as well as not having to replace employees who leave the company for a better opportunity.

The benefits far outweigh the costs!  Problem is you have to require it.  You have to be a part of the process.  Make it a priority…track it and measure it…assess the performance of your direct reports in terms of how well they are doing it.

Published by Scott Neilson on 02 Apr 2013

Leaders – Born or Bred?

Glowny Building at Warsaw University

Glowny Building at Warsaw University

Warsaw University of Economics, Warsaw, Poland

Great programme in Warsaw last week….active participation and challenges…good ideas…high energy and interest.  My thanks to Grzegorz Augustyniak for making all the arrangements.

Have a look at the Participant Feedback tab (above) to see the results.

This is a picture of the main building of the business school at Warsaw University of Economics.

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As is often the case, last week the question was asked about whether or not leadership skills are born or bred.  There seems to be this fundamental belief that leadership is a talent with which you are born.

I could not disagree more.  In my opinion, everything you need to know to be a good leader can be learned.  Though I would say that there are personal characteristics that can make one person more effective than another, I would also argue that any one of those attributes can also be learned, or at least imitated.

It is generally at this point that someone mentions “charisma” as a key leadership skill that some have and some do not…and, it certainly CANNOT be learned.  I always love this discussion!

A few points about charisma…

I have never heard a person say that charisma was the main skill they relied upon to successfully lead a company…EVER!

  • First, I have worked for people who had little, if any, “charisma” and yet were superb leaders.
  • Second, I have worked for people who had tremendous “charisma” but were terrible leaders.
  • Finally, if you look at the definition of “charisma”, you will see that most of the elements which define it are skills that can be learned or developed…or even simply imitated.  The dictionary describes charisma as “a trait found in persons with a facile personality, characterized by powerfully sophisticated abilities of interpersonal communication and persuasion. One who is charismatic is said to be capable of using their personal being, rather than just speech or logic alone, to interface with other human beings in a personal and direct manner, and effectively communicate an argument or concept to them.”

Look at the “skills” listed in that definition…communication, persuasion, speech, logic, direct manner, empathy.  All can be learned.  Even the phrase “their personal being”, which seems to imply an innate style or personality, can be argued to be a learnable skill.  For my detailed discussion on charisma have a look at this post… http://www.scottneilson.com/?p=902

Bottom line…I see “charisma” as a “nice to have”…not an “essential”.

  • I think that it is one element of many that CAN help make a person an effective leader.
  • I think it can make a good leader a great leader, but it is not a requirement to be either.
  • I think that without any other skills, “charisma” alone will not make a person a successful leader.

So, back to the original question…are leaders born or bred?  If you look through the literature on leadership you will find that most of the books are listings of skills which have worked for someone at some point in time or some situation.  Any one of those skills can be learned or developed.

As an example, in various data gathering activities which I have conducted over the years, the lists of skills generated seem to be very much the same from one group to the next.  They include such things as …

  • Listening
  • Communications (spoken and written)
  • Decision-making
  • Strategic Thinking
  • Humility
  • Being responsible
  • Being reliable
  • Being flexible
  • Being able to integrate (synthesize)
  • Being adaptable
  • Being organized
  • Being analytical
  • Being creative
  • Being collaborative
  • Being empathetic
  • Having self-confidence
  • Having integrity
  • Having drive and determination
  • Time management
  • Setting priorities
  • Handling pressure
  • Coaching
  • Honesty

There is nothing in these list of skills or personal attributes that cannot be learned or accomplished through good process.

To my way of thinking, the bigger issue is Why are companies not good at developing leadership skills in their people?  Subject for next week…

 

Published by Scott Neilson on 12 Mar 2013

More on structural failure in organizations…

In response to your questions and comments on organization structure…

I cannot tell you how many times I have seen organization structures built around individual incompetence or inadequate processes.  It seems like people spend a lot of time looking for ways to work around problems rather than correcting them.

Let’s take the first part of that statement…individual incompetence.

Periodically, we find that an employee is not capable of doing the entire job the way we need it done.  They may not be a total disaster in the role, in fact, they may actually be good at some parts of the job, but they are consistently failing to meet all of the desired goals.   Now, for the sake of this example, let’s assume that we have managed their performance as per the post on “Managing Performance”, and we are still not seeing improvement in those key areas in which we need it.

Organization structure must be a function of process, not individual performance.  Would you build a soccer team with two goalies because one is not getting the job done?

I have often seen managers decide to create another position and add a person to accomplish these functions.  This seems to happen most often in those cases in which the current under-performing employee is a long service employee…i.e., been there a long time.  Of course, what they are doing is hiring another person to pick up the slack in the area in which the incumbent is underperforming.  They are failing to address the core issue that the employee is not performing to expectations.  They are starting a process of restructuring to split out responsibilities and assign them to other people.

The effects are that:

  • They are changing processes to fit an individual’s capabilities.  Those processes may be very good just as they are.  By changing them you may be making them less efficient, thereby bringing down the productivity of ALL individuals who are part of that process.
  • They are changing structures to make up for an individual’s inabilities.  They are adding positions and building a structure around a weakness.  That adds cost to the system, and is demotivating to other employees.  It also brings down their performance, because they see that poor performance is tolerated.

Both of these actions cost the organization money.

Structure must be a function of process.  Determine the process needed to produce your product or service.  Identify the roles required to deliver at each step of the process.  Fill the roles with people capable of performing all the tasks.  Manage their performance.  Eliminate incompetence.

Published by Scott Neilson on 05 Mar 2013

Are you getting the information you need to lead your business?

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 actually 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).  All this 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 to determine where you have control.
        • Develop metrics to measure and manage those aspects.

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 the customer was splitting the file for use by three different departments within their operation.  If there were any errors they were only reported once, but the “number of files” was 3 times what it should have been.  In their calculation of their metric the 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 decisions based on bad data.

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.

Published by Scott Neilson on 26 Feb 2013

Structure vs process…

It seems that the standard protocol. and first step, for improving business performance is to change the organization structure.  It is visible, it is easily quantifiable, and it yields immediate results.  Consultants come in, analyze job responsibilities for redundancies, propose structural changes. reduce the size of the workforce and the associated cost-base, and justify their huge fees.  People often think that bringing in a big name consulting firm to make these changes will distance them from the results should there be any “bumps in the road.”  Not the case folks!  You are still on the line.

Any structure can work!  It is the processes used within that structure that determine the effectiveness of your operation. 

Structural change!  It seems like the panacea for all organizational problems…until the business tries to operate.  While it is true that heavy and costly organizational structure and inefficiency is inevitably one element of the problem, it is generally a symptom, not the cause.

Where many of these consultants fall short is in clearly defining the processes under which the new organization will work.  They give you a new structure, and you have to determine how to make it work.  You have to design new processes, revamp systems to support the new processes, and train the employees how to use them.

It is safe approach for them to take because any structure can work.  It is the processes used within that structure that determine the degree of improvement in the operation…and they have left that for you to figure out.  Any failure to do so is yours.

In my opinion, they put the cart before the horse.  The correct approach is to evaluate your key processes, systematically improve those processes to eliminate waste and improve quality, and then build the structure to support those processes.

The more important lesson is that you should be doing this routinely as a course of business so that you do not find yourself in the position of having to bring in those consultants.  A good Six Sigma or Lean Sigma approach shows you just how to do this.  The book by Peter Pande, Six Sigma Leadership, gives you a good overview of your role as a leader in making this happen.  It is a short, to the point, and clear step-by-step approach to systematic improvement.

To get you started on which processes to evaluate first, be sure you are getting the right information about the health of your organization.  Build a good set of metrics for each of your key processes and monitor them closely.  It is like looking at a patients chart in the hospital…you can easily keep track of all vital systems and how they are operating.

Published by Scott Neilson on 19 Feb 2013

Don’t be naiive!

I want to rerun a post I ran a couple of years ago.  It is about negotiating the terms of your employment…your contract…or any other contract for that  matter.  Recently I have been hearing a lot of complaints about contracts and agreements in which the wording is very one-sided.  Must be a side-effect of the difficult economy and people taking advantage of some desperate times.

I was recently looking at a contract in which it said something to the effect that if any lawsuit arose out of the relationship between me and this service provider, that I would be responsible for all legal fees…mine AND theirs.  The same had been true in an employment agreement offered to me some years ago.

In both cases I crossed out that wording and signed the document.  There was no challenge to my doing so in either case.  In addition, there were other areas in which the contract language was very one-sided.  I also crossed out that language and substituted my own language which was more reasonable…covered their concerns but did not leave me powerless and subject to their whims.

The point is, when someone gives you a contract to sign, recognize that this step in a business deal is like any other…it is just one step and in most cases there is room for negotiation.  The contract they give you at the start is their opening position.  They absolutely have room to negotiate on it, even though they will try to convince you that they do not.

Have a read of this article by Howard Matalon… http://www.scottneilson.com/?p=552

 

Published by Scott Neilson on 12 Feb 2013

Swinging for the fences…

My apologies to my non-American readers….this phrase is one often used in American baseball.  It refers to a batter trying to hit the ball over the fence (a home run) and score a run with one swing by him/herself (and be the hero), instead of simply trying to get on base and build a run with the other members of the team.  For your information, the odds of hitting a home run is 1 in 35.  The odds of getting a hit is 1 in 4…almost 10 times better.  The odds of scoring a run by getting a series of hits is more than twice that of scoring by the long ball (home run).

There seems to be a preoccupation with immediate gratification rather than making the effort to systematically repair, redesign, or recreate key business processes, and create healthy and sustainable businesses.

Swinging for the fences reflects a quick win mentality which has become pervasive in business thinking.  There seems to be an increased tendency for leaders to be more focused on immediate changes they can make to achieve short-term goals, drive the quarter to quarter share price of the business, and earn bigger bonuses, with not as much regard for the long-term impact.  The thinking is clearly in  favor of immediate gain and reward, and less of a concern with the future state they may be creating and passing on to someone else.

One workshop participant shared this example.  A CEO said to one of his business leaders that this leader needed to reduce operational costs in his business by 20%.  That leader indicated that those results would be achieved with some changes in computer systems, the associated processes, and employee training, and that the plans were in place to do exactly that over the coming 24 months.  The CEO was not satisfied and said that he wanted to reduce costs in project support functions by increasing the workload per employee in those functions now…and by nearly doubling that workload.  The business leader argued that doing so would result in quality problems, high employee turnover, and would ultimately lead to dissatisfaction among the customers.  He further argued that the current service levels were those to which the customers had agreed when contracting for the work, and changing those service levels would violate those agreements.

The CEO insisted that the business leader make the changes to service levels immediately.  He had made commitments to investors that the organization would reach certain levels of profitability by the end of the year, and this was the only way to do it.

The short-term effect was, as the CEO indicated, an immediate improvement in profitability, great satisfaction by investors, and a healthy rise in company valuation and stock price.  The CEO got a tremendous bonus and payoff in his stock options.  The near term effect (6 months later) was onset of operational quality problems.  Customer satisfaction began to decline as did new contracts.  Over the next year revenues declined along with profitability.  This was followed by a dramatic reduction in company valuation and stock price.  Within two and a half years the company had been split up and sold at a fraction of it’s value from 3 years earlier.

While I wholeheartedly believe that a leader must push his/her team to perform well and find ways for improvement, this must be done within the context of what is achievable and sustainable.  It is achieved through a rigorous and systematic approach to improving all aspects of the operation.  It generally, though not always, means that the best results come from the accumulation of a series of improvements across entire systems that enable the organization to routinely generate the desired results.

The problem seems to be a preoccupation with immediate gratification rather than making the effort to repair, redesign, or recreate key business processes, and create healthy and sustainable businesses.

 

Published by Scott Neilson on 22 Jan 2013

No accountability…

I think we have a lot to learn from this issue with Lance Armstrong.

The guy is worth $125 million.  He has gotten all that money through a blatant disregard of the rules and cheating at his business.  That is fraud, plain and simple.

So he loses his titles.  So he is publicly disgraced.  So he loses his sponsors.  All of this negative attention will only last until some other major news story comes along and everyone will forget.  In the meantime, Lance still walks away with $125 million.  He is laughing all the way to the bank.  And if he gains any sympathy from his tearful appearance on Oprah, and the ultimate book of his “personal struggles”, he will be laughing even harder.

Are we stupid or what?

How is it that he is not stripped of his money, as well as his titles, and thrown in jail?  He got all that money through fraud!  Consider the harm he has done to the Livestrong Foundation, and individuals who contributed to it because they admired and respected the person they thought Lance Armstrong to be.  Consider the individuals who did not win the Tour de France and have the chance to advance their own promising careers because he was juicing.  Consider the personal profit he has gained through fraudulent practices.

Until we start holding people accountable for their actions, we are going to have people taking the chance to break the rules in the hopes of personal gain.   If there is no significant downside, why wouldn’t they?

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