Customer Centered Leadership

Ladies and Gentleman, The Beatles!

If ever there was one best Business Guru, it would have to be Peter Drucker. His work emerged during the height of the Industrial Age and serves as the foundation of management practice in most businesses today. Just like picking your favorite Beatles song (A Day In The Life), it’s kind of hard to boil his work down to one statement. But here’s mine:

Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business (The Practice of Management, 1954).

There is one word in this quote that might need to be modernized, but only because we can assume Mr. Drucker was naturally influenced by his era, and not yet hip to the power of design and the more recent practices of customer empathy. To make the most sense in today’s world, I propose we change the word “create” to “discover” as it better underscores the idea of providing something for a customer versus selling them some new widget. We’ve certainly learned by now that the world will NOT beat a path to your door if you build a better mousetrap (Ralph Waldo Emerson). Customers will flock to your company only if you are solving a problem or fulfilling a need, even if they aren’t aware they have it yet.

Marketing is responsible for discovering customer needs and innovation is responsible for solving them. Hand and glove. Many innovators have an initial customer insight and design a solution for that. Often this is “design for self” where the solution feels right to the one inventing it. I’d say most early stage businesses created only a minimum viable product or have no sustainable advantage, so quickly burn through early stage growth and stall. In today’s Internet fueled, flat world, companies can go through this initial growth stage in a matter of months. In the good ‘ol days of Henry Ford, it could take years to run out of the initial growth stage (perhaps 125, if they don’t get busy quickly at Ford).

The only way out of this problem is to understand your customer intimately, and adapt to the continual pace of change around you. This requires a new kind of corporate framework. The pace of business technology is moving so fast that people are now able to see the real impact of robots, machine learning, and computing power as human jobs are replaced by automation and artificial intelligence. Left to the Industrial model of organization, people are essentially machines who can be replaced with technological advancement. To function in our high tech, rapid change world companies need to build human centered organizations or risk losing all ability to market and innovate. This would be a very bad state for businesses because they would soon be without customers with no human insight, synthesis, or creativity operating within their organization.

Human Centered Organizations

Traditional businesses are built in a hierarchical model that works well in a predictable, stable business environment. In the past several decades, as uncertainty and change increase, there have been plenty of replacement designs proposed (e.g. Holacracy, Heterarchy, etc.). But these distinctions are missing the point, and therefore don’t solve the problem. A human centered organization isn’t a different way to decide or control, it’s purpose-built to enable creativity and collaboration. These are the two essential capabilities underlying the best marketing and innovation functions. Under the dominant hierarchical world, we’re stuck searching for Purple Squirrels to build Unicorns. Wait, What? We’ve designed companies that need extremely rare people to achieve what is now the expected standard of venture capital investments. Sorry, but I can’t help myself, here’s my other favorite Druckerism as it relates to organization design: (Beatles #2=Love Me Do)

No institution can possibly survive if it needs geniuses or supermen to manage it. It must be organized in such a way as to be able to get along under a leadership composed of average human beings.

To be successful in today’s world, and achieve the purpose described by Drucker, businesses must enable average human beings to perform at their best. To perform at their best, people need to be well. I’ve covered this part before so I won’t re-hash it here. I will suggest a new label for human-centered organization design for those seeking a simple way to net this out: reciprocity.

Reciprocity

Reciprocity is the organizing principle of a human-centered organization. It is built on the seminal economic theory called the Prisoner’s Dilemma. The essence is that cooperation is the better rational choice than selfishness. That is, it leads to better outcomes… proven by Math! The problem is that people are not always rational and often behave selfishly (Duh!). So, many organizations are designed to control for that and become disengaging. A reciprocal organization empathizes with human failings and offers support and resources to encourage wellness and higher order behavior in three ways:

1. Growth Mindset
2. Increasing Self Awareness
3. Everyday Presence

When organizations are designed to support employees in these three (natural) human traits they are far more creative and collaborative. Therefore, they are better able to market and innovate, which is to discover and solve customer problems. The practice of designing, building and managing a reciprocal organization is called Customer Centered Leadership.

Culture is a capability

A culture defines the normal way people behave in a particular group. It provides the cues, boundaries, guidelines and encouragement that help individual members of a group know what is right and what is wrong. Culture guides decisions that result in actions. The best way to understand a culture is to pay attention to actual behavior and study evidence created by the people of a particular group. It’s also great to compare groups in order to discover similarities and differences in their cultures, which is what the field of Anthropology is all about.

Image by David Rowan

Image by David Rowan

Get Specific

In the context of a company, I often hear people say things like, “We have a winning culture here,” or “We’re building a culture of innovation,” or “Our culture is defined by our values,” etc. These could all be true statements, but they are not very useful as descriptions of their particular cultures.

To describe a culture you need to identify specific, notable ways that people interact and find evidence that these ways are useful by the members of that particular group. If a company has a culture of innovation, we should be able to observe characteristics and behaviors by the people there that result in innovative outcomes. We should find artifacts of that behavior that are cherished and celebrated as the great examples of what the call innovation.

If the culture is strong there should be stories about how a certain leader did something unusual or even strange to other companies that resulted in a great outcome. This is why “founder stories” are so important to young companies. They describe the key insight or heroic behavior of the people who start a company and allow others to act in similar ways to get similar outcomes… resulting in a consistent pattern of behavior (culture!).

There is no “best” culture

I’ve had the great privilege of working in some of the world’s most innovative companies (as defined by Fast Company magazine) including IDEO, Charles Schwab, Levi Strauss, and Hulu. One thing I can say about all of them is that leaders there believe their cultures are a significant reason for their success. Another thing I can say, having been up close and personal in all of them, is that they are each distinctly different from the others. So while they may all have “winning” or “innovative” cultures, there is not a common culture across them. Behaving one way at Levi Strauss could actually get you fired at Hulu and vice-versa.

To understand what is innovative at IDEO, you just have to listen to the stories they tell each other about great moments in the company’s history. In fact, so many people ask IDEO about their culture, nearly any person who works there can point to examples of their innovative behavior that resulted in breakthrough product designs like the first Apple mouse or the Crest Neat Squeeze toothpaste tube.

What every leader should know about culture is that it has to be defined, built and actively managed if you want it to help your business succeed. In most cases, culture should be defined in response to a business problem, not in advance of one. I don’t believe there’s such a thing as “the best” culture that could be built first and then applied to any business problem. So just like a supply chain for making shoes would be different than a supply chain for making cars, each culture should be constructed to address the unique challenges of the business at hand.

Culture is not a statement of ideals

Culture should not necessarily be a reflection of the founder, CEO or executive team—although leaders must behave in accordance with the culture or it is unlikely that others will follow. Lip service to a value like customer service, followed by actions that don’t treat customers well will not build a customer-centered culture. All of the advertising dollars in the world will not make airline customers feel treated with respect if they are dumped from flights for unexplained reasons even if there’s a video of the CEO pronouncing that he personally cares for every customer who flies with them. A founder is often an architect of the cultural blueprint, but cultures are dynamic and change over time. What worked for the original 20 team members may not scale and should be adjusted to the demands of the business over time. Retain the essence but refine the whole.

Culture is not simply a values statement or a manifesto. Culture is a capability that provides direction and support to every member of an organization in order to achieve a strategic objective. Great leaders understand that culture  should be carefully managed to achieve their organization’s full potential.

[This post also appears in the Bulldog Drummond blog Uncommon Sense]

Working Human

[In case you didn’t catch it… this is a re-post from my guest blogger contribution to the Bulldog Drummond blog on June 19, 2012]

Does this look engaging? (photo by jurvetson via Flickr)

For far too long, we’ve been operating under management philosophies that undervalue being human. The Industrial Revolution did a lot of good things for the world, but the organizations designed to support manufacturing businesses common in that era are not one of them. They are hierarchical and rigid and have little allowance for human variation. Even in their friendliest form, they are paternalistic, placing the burden of responsibility on a select few in positions of authority.

Mechanistic terms and phrases used to describe people and how they work together like: creative engine, mental horsepower, well-oiled machine, weakest link, and human capital are woven through our everyday language. I’m all for the creative use of metaphor, but I think in linguistic terms, the ubiquity of these terms points to an underlying framework that is decidedly not human. At the heart of the industrial view of the world is a reductionist philosophy that leads people to break everything down to the component parts and attempt to optimize the fit and performance of each item in isolation. The problem is humans are not that simple. We can understand how molecules stick together and how synapses fire, but they don’t actually work in isolation of each other. The whole is greater than the sum of its parts. People have soul, and heart, and passion.

The effect of not having a human-centered framework for workplace design is decidedly negative. According to the Gallup Management Journal, only 29% of U.S. workers are engaged, while 56% are not engaged, and 15% are actively disengaged. That is, when people are treated (even subconsciously) as machines, they don’t perform at their best. They might do what they are told until they no longer have to, but they are not inspired to create, build, or serve in ways that leverage their full potential and deliver great value.

Join the Human Revolution

Most organizations we know today are built to be stable and predictable, using rigid specifications honed by financial metrics. But there is increasing evidence that this type of organization doesn’t do well in environments that are transforming, ambiguous, or complex (Think: Dinosaurs). See more on this comparison in The Connected Company by Dave Gray. So this is a call for organizations of all types, whether they are businesses, governmental agencies, community groups, schools, or sports teams, to rethink their fundamental principles of organization and shift from industrial age thinking to a human-centered design that helps people thrive.

This shift is intimidating. It’s about losing control and building trust. It’s about helping people grow versus boxing them in with rules and boundaries. It requires a belief in the innate greatness of human kind versus a bureaucratic defense against slackers and cheats.

But the rewards are substantial. Organizations of all types struggle with low creative output, poor service, and declining productivity. Optimization and consolidation can only squeeze performance on the margin so much. For sustainable high performance in service, innovation, invention, or productivity, people must be at their best. And to be at their best, they must be well.

Even in stable environments, where companies make big investments in predictable consumer patterns (like retail or automotive), people perform better when they are treated like people, not cogs in the machine. The Gallup/Healthways Well-Being study demonstrates a very clear economic advantage of employee well-being when you understand the impact of absenteeism, illness, and low engagement on a company’s bottom line.

Before Engagement

Progressive organizations are already committed to the idea that employee engagement drives high performance. But many of these companies still approach engagement with command and control tactics. In response to a slippery company culture concern, I recently heard a very successful business leader say, “Give me 120 minutes with our managers and I’ll tell them how this is supposed to work.” Sorry, but you can’t order people to be good leaders. Or be creative. Or give good service. Or invent a new technology. They have to want to do it themselves and make very difficult emotional, social, and intellectual trade-offs to get there. See a comprehensive view on this point by Daniel Pink in his book Drive.

So while engagement is a great leading indicator for high performance, it’s a lagging indicator of wellness. That is the capacity to give discretionary effort and highly valuable contributions depends on individual wellness. If you are not well, it’s very difficult to be fully engaged.

Viewing wellness as a foundation for high performance makes it more clear what things an organization should have in place to help people perform at extraordinary levels. This is where things start to get messy, because in the traditional relationship of employee and employer many of the requirements for wellness are considered private or “none of your business.” But if learned one thing in graduate school, it came from professor Charles F. Luna: Things that matter are messy.

photo by sanchom via Flickr

Being Fully Human

Many people associate the term wellness with physical health. It’s not hard to understand that proper nutrition, rest, and exercise lead to higher levels of energy. So let’s just start there: What is your organization doing to help your people in these areas? Do you have recess? Do you make people take time off? Do you provide healthy food options as snacks?

But don’t forget that physical health is only one piece of the wellness puzzle. Well-being is about being fully human, which also includes dimensions of mental, social, spiritual, and emotional health. Philosophers have worked on the definition of “being human” since the beginning of recorded history, and probably before then. Aristotle, Maslow, and more recently a slew of companies like Daily Feats, Me You Health, and Kairos Labs have outlined broad models for well-being.

The desire for wellness is not a new phenomenon for us humans. Conventional wisdom is dripping with advice for how to live a good life. Phrases like an apple a day keeps the doctor away; peace (complete with two finger gesture); never go to bed angry; early to bed early to rise makes a man healthy, wealthy, and wise; etc. are “rules of thumb” developed over generations to show the way to balance, fulfillment, and happiness. Research on happiness has boomed recently. I’ve even seen it stated that happiness is the new currency.

So wellness is not new, but it’s very elusive. For many of us it’s very hard to pay attention to all aspects of wellness simultaneously and adjust our habits to get there. Worse, much of the conventional wisdom or common sense tactics for living well are not tested, and some are quite simply wrong. See more on positive habit formation by Timothy Wilson in his book Redirect.

Work is Life

I think the biggest failure by organizations in this regard is the separation of “work” and “life”. Work, as we’ve defined it for centuries, is a burden to bear, not a form of pleasure. And Life is something you do when you are not working. So we “work for the weekends” and then “live it up” only to “get back to the grind” on Mondays. Shoot me now.

Certainly many people along the way have enjoyed their careers and found joy in their efforts. But the dominant mindset of corporations and institutions is to root out all “softer” elements of working under the banners of focus, optimization, and efficiency. Office cubes, assembly lines, warehouses, and even schools and hospitals have been designed to remove critical human needs like friendship, beauty, and laughter, so workers can focus and get shit done. Most corporate policies, procedures, practices, and routines are built on the same blueprint of efficiency and optimization. But all work and no play, makes Jack a very dull boy (Check out this great scene from The Shining to see what I mean!).

There is hope in world of work. Companies like 3M, IDEO, and Google are famous for their humanistic values and have great results to show for it. Zoom out and this transformation seems overwhelming. So you’ll probably just stay the course and ride this out until retirement sets you free.

Zoom in and focus on just one thing you can do tomorrow to start working like a human. Take a walk in the middle of the day. Eat grapes instead of a bag of chips. Personalize your desk with a plant or drawing from your favorite 5 year old. Every little thing counts, but you can’t count unless you do something.

Okay, get moving!

 

Being Successfully Controversial

In a recent social media frenzy, I stumbled upon a great insight: the link between controversy and innovation. I had just finished my post about how innovation is a natural result of being human, and Lisa Kaye tweeted a quote from actress Eva Le Gallienne, stating that “Innovators are inevitably controversial.”  When I think of controversy, I immediately think of courage.

That same day, innovation guru Diego Rodriguez posted a TED talk by Bryan Stevenson encouraging us all to be courageous.  In his talk, Bryan touches on how we are all inspired by people who are the first to stand up, speak up, lead the way, draw a line, or refuse to budge on principle.  Rosa Parks was an icon of courage for civic innovation and equal rights.  John F. Kennedy was an icon of courage that spurred innovation in science and technology.  Ronald Reagan was an icon of courage for global unity.

Kennedy Space Center (Photo from Smalling Studios)

To make change, it is essential that we stand up for what we believe is right. Courage is one part vision of what could be and one part frustration with what is. Courage is the spark that ignites change and inspires others to join the process and tip from old to new.

Linking controversy and innovation makes it sound like innovation is a struggle against resistance.  Which gets me thinking about resistance as a strengthener.  People do push-ups, lift weights, carry medicine balls, or use elastic bands to build muscle.  You push against gravity to improve yourself.  So it makes sense that pushing against normal is a great way to improve the world.

Courage is only half of the equation

I’ve learned through many, many, many failed attempts, that courage is necessary, but not sufficient in successful innovation.  Courage is only half of the equation.  With only courage, you can come off as righteous, contrarian, or antagonistic.  A thorn in the side.  You face immediate rejection by the established way.  Succeeding only at creating more resistance. It’s really something to speak up, but not enough to leave it at that.  Controversy can end with polarization and gridlock (take the U.S. Congress… please!).  Or controversy can be the beginning of a better world.

The other half of the innovation equation is creativity.  By creativity, I’m not talking about the Crayola-artsy-black-turtle-neck type of creativity.  I’m talking about the well-that-didn’t-work-so-let’s-try-this type of creativity.  Lateral thinking that produces a never-ending stream of ideas and alternatives to test and explore until the right thing happens.  The way Thomas Edison tried hundreds of filament-gas-tube combinations to get the light bulb.  The way Abraham Lincoln tried running for office multiple times before finding his way to the Presidency.  They were successful innovators because they had both courage and creativity.

Against means together?

For most big problems, there is no silver bullet. No single invention.  Innovation is an unfolding, iterative, extended effort that takes place against the normal way of doing things.  So innovation is inevitably controversial, requiring us to act with both courage and creativity to achieve success.

As you may already know, “contra” is a Latin root meaning against.  And “verse” means turn. Literally, “turning against.”  Being interested in linguistics and natural human behavior, I poked around the origins of contra and found that the prefix con- is a variant of com– which means together.  This makes sense if you consider against in this usage: The ball is resting against the wall (they are sharing the same space together).

So perhaps controversial really means, “turning together.” And we humans are designed to work together and constantly improve our condition.

Bottom line: to be successfully controversial, consider your mission as a strengthening exercise you do with a bunch of other people, not a war against the other side you must win (or else!).

 

 

 

Be well. Work better.

When I think of wellness, I get images of Richard Simmons and Japanese workers in matching sweats during corporate exercise programs. Too bad. Unfortunately, wellness wound up marginalized as a silly fad in its first big corporate movement during the 70’s and hasn’t really recovered.

Not an inspiring image of wellness for most people!

Sure, there are lots of companies touting the value of perks in today’s world (my favorite is BetterWorks). But most people still shy away from the term wellness.   Well I think it’s the best word to define this successful human condition, so as Bono says, “I’m stealing it back.”

Physical health is only part of the equation

One of the big problems with wellness is that it’s so closely associated with physical health. But true wellness is a multidimensional issue involving your whole self, not just your body.  This is of course, not MY idea, but I’m focusing on it here because it’s such a misapplied aspect of being human by so many of us, and it’s so critical to sustainable high performance.

Abraham Maslow was on the right track with his Hierarchy of Needs, showing us that some needs are more fundamental than others, and that humans are motivated to get beyond the basics and become creators of good things in the world.  And it’s likely that people have explored the holy trinity of mind, body, and spirit from the beginning of time, but even that extension beyond “body” is incomplete.

Somehow in modern America we commonly reduce wellness to physical health, and make that a personal responsibility to take care of in isolation of work and family.  You go to a doctor when you are “sick” and he/she tells you what you should do to fix your body to regain health.  I don’t think many doctors prescribe social remedies, but the now famous Framingham Heart Study, effectively shows that health is highly dependent on social interactions.

A complete model of wellness

Based on discussions with thousands of people via research at IDEO and the YMCA, I’ve developed a simple way to evaluate wellness in a holistic way.  The model was developed from patterns that emerged when people were asked, “What makes you feel well?” Their responses were captured, and then categorized into these dimensions of wellness.  For another complete view of well being check out the Gallup model.

User defined dimensions of wellness

  • Wellness is individually defined (there is no prescribed “best state” for everyone).
  • Wellness has rhythm (sometimes you feel more well than others).
  • Wellness is about balancing choices (not applying a routine or formula).
  • Wellness is about control (for some it’s “in” and others it’s “out”).

A first principle of human centered organizations

From a business standpoint, employees with low levels of well being are far more expensive than those with high levels of well being.  But this “loss of work” cost based approach doesn’t even consider the “opportunity costs” of not being on top of your game on a regular basis.

Gary Hamel is leading the world to reconsider their fundamental models for organizing and leading people with his Business 2.0 Challenge.  He suggests that this process starts with rethinking principles, and I fully agree.  Furthermore, I’m suggesting that a fundamental principle of business success is individual well being, and it is a primary element of successful leadership to be well and to lead others to wellness.

So my call to action here is that businesses need to rethink their fundamental relationships with the people who work there.  If a holistic model of wellness is critical to high performance, then issues that are often considered “private” or “personal” in our traditional models of management become essential in employment relationships.  Much of this will be discounted as “coddling” employees with yet more benefits and perks, but in today’s world of business where creative thinking and critical problem solving are often the source of competitive advantage, I’ll bet on wellness as a strategy.

It’s a thin line

It’s a thin line between love and hate. This is a great quote to underscore the inherent challenge of delivering excellence or managing to very high quality standards. Recall this great song by Annie Lennox in case you need a soundtrack in your head while reading this.  It’s easy to point out what’s wrong with something, but a much bigger challenge to make it better.

Walking the Tightrope, source: unknown

It’s like walking a tight rope… if you believe high quality is essential to achieving your goal.  On the one hand, you can take the demanding boss or snooty patron approach and simply demand better/more.  This might get you an immediate response, but often elicits such a negative reaction from the people around you that you lose their authentic trust, loyalty, and commitment.

One the other hand, if you tip towards forgiveness and understanding, you actually get less in the moment and hope that next time things will be better.  This might engender fonder feelings from those around you, but fails to set a higher bar, push the envelope, surprise and delight.  It is simply fine (given the circumstances).  Unfortunately, over time, “simply fine” leads to mediocrity.  Eeew.

It’s a difficult competing commitment: be a kind generous human being (like Jesus Christ) or be an innovative bearer of high standards (like Steve Jobs).  Can’t you be both? Sure, and to do so, vision, vigilance, and veracity come to mind.  Introducing the V-3 method of leading for quality!  It helps you walk the line of pushing for mo’ betta, while accepting the inevitable influence of variables, unexpected interruptions, and, well reality taking things back to the lowest common denominator.

  1. Vision: paint a compelling picture of what could be, so others are inspired to act.  In fact, paint is insufficient, you must craft it in Technicolor, no THX.  Yeah, that’s the ticket.  Powerful imagery has proven impact on individual motivation by “priming” people with impressions about what is possible and how it will make a difference.  More importantly, a great vision helps clarify a choice and “allows” others to achieve versus forcing them to respond to a command.  A clear and compelling vision attracts people who desire the same things as you, making achievement at very high levels of quality more sustainable.
  2. Vigilance: don’t let there be exceptions and don’t let there be distractions from the highest priority aspects of your quality mission.  Allowing exceptions and distractions lets people off the hook before they achieve mastery, and may negatively effect their desire to try next time. See more on this concept in Why Chinese Mothers are Superior by Amy Chua.
  3. Veracity: use facts and present them in ways that inspire continued efforts to try harder.  Providing feedback on progress is essential in support of persistance and high achievement.  But the facts must be relevant and presented in appropriate scales.  One study on goal achievement compared weight loss on a wide scale of 25 pounds versus a narrow scale of 5 pounds and found that participants needing to lose 4 pounds were more likely to slack off in the wide scale (because 4 is small compared to 25 while it’s huge compared to 5).

It’s a thin line between engagement and overwhelm.  One last tip:  if you tell someone something is “not good enough” the next action on your part is to pitch in and help make the situation better.  This is a doubly-good thing because mimicry is a powerful social motivator and it’s energizing to have fresh legs in the face of a difficult challenge!

Make better decisions

There are some people who are naturally gifted at understanding a group vibe. These folks always seem to know the “right thing to do” and are often rewarded well for their savvy. And, kind of like the old LIFE cereal commercial, other people begin to depend on the few that have a sense of right and wrong for decisions.  When pondering a difficult decision they say, “Let’s get Mikey!” and run off to seek direction as if that one person really knows the answer by some divine right.

In this manner, many people rely on their boss for direction.  “We’d better get Jim’s input on this before we proceed!”  While Supervisor Jim may have a good sense of what won’t work, it’s doubtful that he will be able to provide much insight on some new idea or direction.  Of course his opinion matters and his experience helps, but he probably has no more perspective on a new situation than you (sometimes less).   This is a huge threat to innovation, because most controversial decisions are “kicked upstairs” and new ideas are almost always killed.

In reality, great decisions come from being connected to an appropriate set of stakeholders who provide diverse and independent input on a situation.

The magic 8-ball says…

A great boss should say, “Well, I’m not sure about this… who else have you asked?”  This attitude leads people to check things out more broadly before coming to a conclusion.  You’re probably thinking, sure I can ask a lot of people and get 20 different opinions, but I’ll still have 20 opinions… there’s no way to please everyone.  That might be true, but it’s no reason not to proceed.  Since we already know that deciding in a vacuum leads to bad decisions, how might we overcome the problem of having too many opinions?

Ask the Magic 8-ball! (this is a very retro post)  Not that Magic 8-Ball… create a new kind of organization chart that helps you magically determine who to ask and what to ask in order to get better decisions.  It works like this:

1. Clarify your question  (anything can be decided this way, from small to large issues).

2. Determine who cares about this issue (think broadly) or will be impacted by your decision (commonly known as stakeholders).

3. Gather their thoughts on the issue via a series of short 1-1 discussions (build an evolving, proposed solution as you move from person to person, and share it as you go).  This approach is better than a group meeting because it avoids group think or an information cascade that bias the outcome.

4. Test your proposal as you gather input (i.e. ask what they like/don’t like, how they would change it and assure them that you’ll share the “final” proposal before you move forward).

There are two valuable benefits of this approach:

1. You get better insight based on the various perspectives and independent reactions.

2. You build support for your issue as the stakeholders get better context and understand your constraints more deeply by participating in the process.

Here’s one way to chart your stakeholders.  Each “orbit” around you is an existing group (e.g. “sales team” or “senior leaders” or “women in our company”).  Use the orbit to help you identify specific individuals in each stakeholder group and test your breadth and diversity of input.  Tap the wisdom of this crowd by sampling a small set (2-3) of people from each orbit, for a total stakeholder group of  12-20 people.

An atomic organization chart

Leadership is a group outcome

I’m not a big fan of competency models.  They can be interesting as a measuring stick for basic performance, but they tend towards generic “best” practices and don’t seem to be very useful to the people I’ve worked around.  I’m not sure I’ve ever heard a successful person dissect his/her performance along the lines of an existing model.  abe_lincoln

It’s troubling to me that “fixing” yourself up according to an ideal set of competencies is a path towards success.   But the really big flaw in this approach is the focus on individual competence.

Bob Sutton echoes this thought in his recent post of Flawed, Suspect, and Incomplete Assumptions about Managing People .  I trust his instincts and value his persistence in defeating these types of assumptions.  I think they are a big problem for businesses today.

I’ve been watching people perform in a wide variety of settings for quite some time and I’ve come to believe that leadership development is a waste of time.  And I’ve wasted lots of time on it, trust me!  Instead, I’ve shifted to relationship development.  Helping people function better together has way more impact than teaching people insights about themselves that they can generalize to better behavior in the future.

Also, consider the idea that leadership is not a competency at all.  It’s really an outcome.  When I behave successfully with others to solve something, start something, finish something, we’ve accomplished leadership.

Most great leaders are actually collaborators in great actions that change the course of events and create big impact.  Consider Abraham Lincoln… (read Team of Rivals) how much time do you suppose he invested in leadership development versus improving his connections with others?   Next time you consider spending training dollars or valuable time on leadership training, spend that money, time, and energy on improving the performance of your relationships with others instead.

Some tips for better (team) interactions:

1. Spend more time together.

2. Improve your dialog, building on ideas instead of “winning” with the best one.

3. Compare the number of questions versus statements you make as a group.

4. Connect with advisers outside of your team.  Invite them in to your team to give their perspective.

5. Ask someone on your team to give you advice on your own participation.

Work successfully with others and leadership will happen!

United Breaks Guitars

United Breaks GuitarsNow this is how to leverage the web!  Check out a new song by Dave Carroll called United Breaks Guitars.  And for more on the story behind the song visit Dave Caroll Music.  We’ve all had frustrating experiences with poor service and it’s really amazing that such a scene can actually occur.  I myself had a small tiff with a stewardess… I mean flight attendant… on United recently.  She wanted my 2 year-old son to leave the seatback phone in the holder and I thought the relative value of the inflight phone service (nearing zero) and the distinct advantage of having a 2 year-old entertained while the flight boards (priceless) were a good trade off.  My wife was worried I’d get us kicked off the plane for an FAA safety violation (see Ben Stiller in Meet the Parents) but I backed down.

It is quite fun to poke at these people for being so mean, difficult, or otherwise ornery.  But the real issue isn’t the person involved, these incidents are symptoms of a much larger core issue.  Bad service comes from companies that don’t take care of people.  United isn’t about “destination management” they are about airplane management, so they emphasize mechanical and safety issues, not human ones.  Sure, they say they are there for “your safety” but really they are there to control things. When Southwest Airlines hit the scene with an emphasis on people and the customer experience, they immediately became the most profitable airline around.

Another example is the battle between Microsoft and Apple.  While Microsoft has a clear advantage in revenue and profitability (so far), it is clear that customers prefer the Apple experience.  When a single business can dominate an industry so fully like Microsoft or United, they can get away with poor service because customers can’t vote with their wallets.  But as soon as that advantage is removed, the crash and burn is inevitable (and fast)… as in Kmart versus Walmart.

I think this is so obvious I can’t imagine why other businesses don’t pull it off.  But just in case it’s not that clear to everyone, here’s a few reasons it works:

1. People make buying decisions, so treating people well leads to more favorable buying decisions.

2. The loyalty effect is an important driver of sustained profitability.

3. If you want your customers to be treated well, you MUST treat your employees well.  See the Service Profit Chain for more on how this works.

Got any more points to add?

Transparency beats asymmetries

As I begin this post I’m realizing transparency is a big topic, but it’s coming up all over the place in business, personal, and social situations, so I want to start picking it apart.  I noticed Seth Godin’s post earlier this week, and liked his statement that the issue is not to be viewed as a moral right, but a business tactic, tool or threat.  So this post is about sharing information as a business tactic to win complex games.

I’ve had many discussions with friends about putting things on the Web and how fearful they are about things being used against them.  I hear comments about invasion of privacy, loss of employment, Gattaca and Big Brother.   One of my best friends refuses to participate in social networking sites so he won’t make it any easier for anyone to find out stuff about him.  He’s a very sharp guy, and I think he is playing a good poker game.  And, as Seth points out, poker is not much fun if you can see everyone’s cards.

Ostrich head in sandFor me the issue here is not about transparency, but what game you are playing.  Poker is a small scale strategy game pitting one person against another.  Transparency is the exact wrong thing to do in that game.  But most “games” in life and business are far more complex, and given our 21st Century context (see Thomas Friedman), I think it’s dangerous to live life with a poker face.  It’s more like having one’s head in the sand.

In a complex system, transparency is important as it relates to information asymmetries.  This is when one “side” in a transaction knows more than another.  In such cases, people tend to undervalue an opportunity to avoid risks based on gaps in knowledge. It has been shown in economic theory that the overall value of a system is increased when everyone has access to the same information.

In markets, individuals benefit greatly by sharing their information with others to allow for fair exchanges.  This sharing brings the added bonus of systemic aggregation of information (the Internet enables this like never before).  Aggregation allows people to discover patterns that provide opportunities to adjust tactics and “win” more often.

So here’s some “games of life” to think of as markets instead of as poker:

  • Job interviews/hiring decisions… what if employers and employees knew more about jobs and candidates? Better alignment of jobs and people lead to greater engagement and less turnover.
  • Health… what if people were able to share their health information more fully? They could see trends and patterns and share them with medical professionals to get earlier and better treatment.
  • Business… what if employers shared their performance goals and metrics more fully (even when it’s bad news)?  Employees could intervene earlier and with greater permission to prevent negative trends.
  • Dating… more disclosure about values and interests leads to better match making and longer lasting relationships.