Making dollars by making sense: Leading through the creation of meaning

Put understanding before data

noreply@blogger.com (Brad) — Wed, 04 Nov 2009 16:29:00 +0000

This week, blogger Jim Wells has an excellent post regarding a common myth associated with six sigma and other quality techniques. The myth is that these techniques will magically provide knowledge and insight. Jim argues that in fact, these tools are only as effective as the knowledge of the person using them and the data that is put into them. Check out Jim's full posting at:

http://qualitypractice.blogspot.com/2009/11/six-sigma-its-no-substitute-for.html

I often have a similar conversation with leaders. Many use data to substitute rather than complement their understanding of their business. That doesn't work. Leaders should develop a model of the dynamics that exist in their business and how those dynamics might play out in the data. They need to do this before reviewing the data so that they can more effectively approach it.

A famous story illustrates this principle. In WWI, the Royal Air Force had a dilemma. Its planes were being shot down and it only had a limited amount of armor to reinforce them. They called in mathematician Abraham Wald. Wald studied the planes and found that there were common patterns of where bullet holes appeared and where they did not. Most people would have recommended that they fortify those spots with the most holes. That seemed like the best answer since the data showed that that is where the planes were being hit the most.

However, Wald took a step back and applied his understanding of aircraft and warfare to develop a model to help him interpret the data. His recommendation was to fortify the parts of the planes that didn't have holes. His argument took into account additional information from his model. The planes he was looking at were the ones that returned. Therefore, the location of the holes that he saw was not critical to the planes ability to fly. However, the places where he didn't see holes must represent where the other planes (that were shot down) were hit. His solution was simple but only because he had a model from which to understand his data.

I recently was working with a group of people who were trying to measure the impact of a particular solution on productivity. They were fortunate in that they rolled out the solution in phases so that at any time there were people using the solution and others who were not. Week after week their report stated (based on the data below) that their solution was helping to drive up productivity.

I challenged them on their conclusion. Clearly, their solution improved productivity. That wasn’t the issue. But their story was somewhat misleading. Impact requires two things - effectiveness and use. A good solution that is unused does not have much impact nor does a poor solution that is used heavily. In comparing the department average with the other two averages, it became clear that, there weren’t very many people using the new solution yet. While their productivity improved, it wasn’t enough to have a material impact on the department as a whole. The “impact” model helped us better make sense of the data so that the story changed from “This solution impacts the business” to “This solution has great potential but we need to roll it out more aggressively”.

Insights don’t come from data. They come from your understanding of your business applied to data.

Playing to win - What high school wrestling can teach us about business success**

noreply@blogger.com (Brad) — Sat, 24 Oct 2009 16:23:00 +0000

The other day, while standing in front of the mirror, I realized something. My criteria for success has changed. I used to ask myself whether I looked good. Now I ask myself whether I don't look too bad. I'm not sure exactly when this changed but it did. This subtle change is probably more responsible than anything else for the image that I see in the mirror. I changed my focus from "winning" to "not losing". Where I was once driven to work out, eat right, sleep well, etc., now I am satisfied if I just avoid things that are bad for me. Those few extra pounds that prevented me looking good, aren't as troublesome as they once were, since they don't make me look that bad. I've lowered the bar. It's not suprising that my weight continues to increase.

As leaders, we need to create a culture of people who strive to win rather than than just avoiding losing. One of the best leaders in this regard was my high school wrestling coach, Fred Richardi. I remember a match I had my sophomore year. It was only my second year wrestling but I had been put on the varsity team (needless to say, I lost a lot). My opponent was a senior ranked third in the state. With 30 seconds left in the match, we were tied. There was a pause in the match. I went back to my corner and Coach Richardi said something I'll never forget, "You still have time to beat him." Gven the circumstances I'm sure he was one of a very few coaches who would have made that comment. Most would have told me to hold out for the tie.

I tried to pin my opponent. He easily countered and escaped earning one point. He won the match. I sulked back to my corner expecting to get chewed out by my coach. But instead he said, "Good job." I reminded him that I had just lost. He replied, "I didn't expected you to win. I expected you to try to win." For Coach Richardi a loss trying to win was far better than settling for a tie. He wanted aggressive wrestlers who tried to win. As a result, his wrestlers and teams had strong winning records year after year. That moment changed my view. Had he not empowered me to take a risk or had he penalized me for not staying the course and accepting a tie, I would have had a very different, and average, wrestling career (not that mine was all that outstanding but it was certainly better than average).

Looking back on my business career, Coach Richardi's words have even more meaning. The times that I've failed have been when I was trying not to lose - the safe opinion that wouldn't stir controversy, the easy project that I could deliver with my eyes closed, or those times when I tried to stay below the radar. My successes have come when I tried to win -doing those things that other people thought not possible or going after the high visibility projects.

The same thing happens in the business with whom I work. Organizations, teams, and individuals try not to lose rather than strive to win. The result is cautious decision making, risk aversion, and only doing things that have been "tried and true". Over time, these organizations go from being good to not bad to irrelevant. The very actions they take to avoid losing are the ones that, in the end, drive their loss.

Leaders who encourage their people to play it safe (whether implicitly or explicitly) create cultures of people who play not to lose. They hit their targets and meet their deadlines but never create the "killer app" or innovative idea. Their departments don't detract from the business but aren't seen as value creators or essential functions. At best, they generate indifference from the rest of the business.

It's time to start playing to win. Encourage your people to take chances. Allow them to swing for the fence and understand that they might strike out more. In the end, you'll win more games and have more impact.

**In memory of Coach Fred Richardi who taught me about life while trying to turn me in to a wrestler.

Critical thinking is essential during execution

noreply@blogger.com (Brad) — Fri, 16 Oct 2009 13:02:00 +0000

I recently gave a talk on critical thinking. One audience member firmly asserted that critical thinking is fine during planning when you have time. However, he said, it has no place during execution. His case in point, the Army. You can't have soldiers thinking about their mission. They just need to execute their orders. I hear this quite often. There is a strong belief that thinking is for planning, not execution. I couldn't disagree more.

Critical thinking needs to be happening all the time. It matters most during execution. After all, that is the only point at which your actions have consequence. Look at the most critical or devastating execution mistakes in your business. I would bet that many are not due to failed execution of the plan or policy. Often it is because they executed it too well.

The June, 2005 issue of Technology Review had an article by David Talbot titled Preventing Fratricide. Talbot cites a case of a U.S. and a British fighter plane were shot down during the second Gulf War. Planes get shot down during war, that wasn't his issue. The issue was that U.S. Patriot Missiles shot them down. Talbot provides several reasons for the errors including critical thinking. One of the biggest culprits was that the people who deployed the Patriots had a flawed assumption in their strategy. They assumed that Saddam Hussein was going to have a heavy, on-going barrage of missiles. Unfortunately, they didn't plan (or at least communicate a plan) for the alternative. According to Talbot, "The operating protocol was largely automatic, and the operators were trained to trust the system's software...a design that would be needed for heavy missile attacks, the task force wrote." In other words, part of the plan was that the operators shouldn't think but should rely on the system. Unfortunately, the intelligence was wrong and the missiles were few and far between. The systems weren't set up for that. The people deploying the Patriot batteries followed the plan perfectly. As a result, they watched as the missiles shot down their allies.

Sentinel events in hospitals, airline crashes, military errors, or even mundane day to day problems such as poor customer service or shop floor inefficiencies often stem from a lack of critical thinking during execution. Research shows that as stress and time pressures increase, critical thinking tends to decrease, just at the time you need it most. Believing that critical thinking is a luxury that can only be had during planning is itself a major thinking error.

As a leader, your job is to ensure that you create an environment where people think about what they do. The days of command and control decision making are over. This does not mean that people should sit around all day pondering every decision - that's not critical thinking anyway. It does mean that your people should have enough information and empowerment to challenge flawed or no longer relevant assumptions. Everyone in your organization should be thinking critically - especially those who are making the real decisions that ultimately affect your customer, your product, and your future.

A few tips for enabling critical thinking in your organization:

Reward critical thinking – don’t squelch people who oppose the status quo. Reward those people who can look at a situation differently.
Assign people the role of thinking critically – One CEO would assign a different person in each meeting to play “devil’s advocate”. The CEO based that person’s performance in the meeting solely on his or her ability to raise tough issues.
Provide context – Don’t just provide answers and orders. People can’t think critically about what they are doing unless they understand the assumptions and thought process that went into coming up with the answer.
Communicate both the consensus and the dissention – The Supreme Court publishes both the final ruling of a case as well as the dissenting opinion. This is to support future thinking and decisions.

Forget social media. There's a more powerful way to encourage collaboration.

noreply@blogger.com (Brad) — Wed, 14 Oct 2009 03:51:00 +0000

I was involved in an interesting discussion today. The group was trying to determine how to be more effective at driving collaboration in their organizations. This discussion has been going on for a long time. The emergence of social media has rekindled it by providing a new arsenal of tools from which to draw.

But it struck me that we might be asking the wrong question. In fact, I think we might have fallen into a common trap. Often, when people aren’t performing as expected, our first instinct is to "enable" - create tools, training, or processes for our people.

I'm not opposed to tools, training and processes. Good organizations give their people the resources they need to get things done. But, there is something more fundamental. Instead of asking, "how" people collaborate (and focusing on the tools), perhaps we can find a better answer by asking "who collaborates?"

Your people collaborate all of the time in their personal lives. They do it without all of the fancy tools, infrastructure, and processes that you make available to them. Even at work those people collaborate. They just don't always collaborate on the things that you want. Think of the last time you rolled out a major change initiative. I'd bet that your resistors found incredibly effective ways to collaborate and resist the change. They probably found "experts" who could build the case against the change; they located others with similar points of view. And, they coordinated the message so that there was a focused, unified force resisting the change. Just like at home, they probably didn't rely on your collaboration infrastructure to make this happen.

So, if it's not the infrastructure driving collaboration, what does? Let's go back to the question of "who" collaborates? People who collaborate the most have three things in common: shared goals, passion/engagement, and an opportunity to collaborate. Consider Wikipedia. The shared goal was the building of an open-source encyclopedia. The passion was whatever topic interested the individual making the contribution, and the opportunity was the Wikipedia site. Simple. So, why can't we replicate that?

Many organizations focus their efforts on the "opportunity part". They provide tools and website to allow collaboration. However, without passion or shared goals, people don’t seek opportunities. No one uses Facebook or Twitter just because they are available. They use them to further their goals and interests.

Recent research on workforce engagement sheds some light on the problem. A large percentage of people simply are not engaged in their jobs. They don't have passion for what they do. Their leaders fail to create a compelling vision or story in which they want to participate. They are doing a job. The aren't bursting with excitement over talking about the last customer complaint they handled, the status report that they wrote, or the team meeting in which they just participated. Many are probably trying to do the minimum required to get the job done satisfactorily.

Similarly, few leaders create simple, clear, shared goals for their organizations. At best individuals and departments have disparate goals. At worst, they have competing goals. In either case, people have little incentive to collaborate since, in the absence of shared goals, collaboration generally comes at a cost to one of the participants.

Perhaps it’s time to take a step back to the basics. There is no silver bullet or killer app that is going to solve our collaboration problems. Your people collaborate. They just don't collaborate on the things that you care about. So, instead of giving them a new tool, why not try to get them to care about those things as well?

There's a new blog in town - I recommend it to all leaders

noreply@blogger.com (Brad) — Sat, 10 Oct 2009 16:59:00 +0000

As a leader, you've probably been bombarded with six sigma and lean. Should you do it? How do you do it? Does it make sense in a non-manufacturing setting?

Jim Wells, a Master Blackbelt in Six Sigma, is sharing his experience in a great new blog called, "Quality in Practice". This blog isn't about theory. This blog contains real-life, practical applications of Six Sigma and Lean. Jim is going to cut through the hype and help you figure out how to make these principles work for you.

I'd encourage every leader to check it out.

http://qualitypractice.blogspot.com

Managers provide process, Leaders provide content

noreply@blogger.com (Brad) — Tue, 22 Sep 2009 14:25:00 +0000

Do you ever notice how meetings that begin as a discussion about a particular issue, quickly devolve into a debate about the right process for discussing the issue. Typically, at the end of such meetings, there is no consensus on a process, or more importantly, a solution for fixing the issue.

Sometimes this happens overtly - someone stops the discussion to advocate for their favorite tool or model. More often it happens implicitly. People answer the main question about what needs to be done, with further statements about how to figure out what needs to be done. For example, if the question were, "How can we best meet our customer's needs?" a reply might be, "We need to identify their top three buyer values." That sounds Ike a way forward. A clear plan. But, in reality it just prolongs the issue. Of course you need to figure out the three buyer values. That's the point of the meeting. You should be talking about what those are.

A good leader isn't constrained by the process. He or she knows what needs to be done to improve the business. So why doesn't this happen? In the organizations in which I've worked, I've seen three main drivers:

A risk averse culture - Process is safe. Content is risky. Opinions demonstrate what a person knows (or doesn't know).
Lack of understanding of the business - Discussing process requires no understanding of the business. It's an easy way to "contribute". Giving an opinion about what needs to be done requires both understanding and having put in some thought on how the business works. For many leaders, getting a deep understanding of their business is sacrificed for managing the tactical day to day details of their unit.
A focus on activity versus outcome - Many business cultures still reward work rather than results. Suggesting a process creates the illusion of progress. It can be documented, planned, and tracked. Specifying a solution can seem ambiguous. People might not see how to implement the solution. The person proposing the solution might not be able to lay out the specific steps and deliverables. It might be criticized as not being "pragmatic".

All three of these are individual and organizational leadership issues. They require greater attention to who is being put into leadership roles and for what reason. People who are promoted based on their ability to do tactical things and think in tactical ways, will probably continue to do tactical things and think in tactical ways, just at a higher level. Leaders are those people who know how to bring content and context to a problem to move things forward. In the interim, the best way to improve the quality of meetings is to start inviting people who can bring content, regardless of their role or level.

Noel Tichy recommends that leaders develop a "teachable point of view", something for which they have a unique and worthwhile perspective to share. I think leaders should take that one step further. Good leaders should have a general point of view on all aspects of their business. Some of those might be worthy of becoming their teachable point of view. More importantly, good leaders need to bring that point of view to the table.

Leaders need to step up and focus on content. They should be able to share their vision, point of view, and opinion regardless of the context in which is was solicited.

Are you asking the right questions?

noreply@blogger.com (Brad) — Thu, 17 Sep 2009 04:03:00 +0000

What are the three most important questions you use to determine whether you are being successful? If you are like many people, your answer might be:

1. Am I adding value?
2. Am I focused on the right things?
3. Am I meeting my customer's needs?

Those seem reasonable but they are the wrong questions. More importantly, they are the wrong type of questions. All of those questions are process questions. They create the wrong focus.

Process questions remove accountability. Take the question, "Am I adding value?" It's not quite passive voice, but it's close. It's as if the work you do and creating value are two separate things. Once you've done the work you are looking back to see if it happened to add value.

Instead, before you do any work, you should ask yourself the question, "What work will add value". Then, your "success" question should be an outcome question. For example, it might be, "Did I lower costs?" or "Did I improve our customer experience?" Those are outcome questions. Instead of going along hoping that the work you do will add value (in retrospect), you are proactively working toward those things for which you define as adding value. You are taking responsibility and accountability for your actions.

The same is true for the other two questions. Don't ask if you are focused on the right things. You should know what those are. If you don't, then your first step is to figure that out. Then, you should ask yourself if you are doing those specific things.

I see process questions a lot. There is a place for them - they should help you figure out the outcomes that you care most about. However, if you want to have a meaningful impact on your organization, you should be measuring your success against outcomes.

Don’t let your vision get hijacked

noreply@blogger.com (Brad) — Thu, 03 Sep 2009 02:14:00 +0000

Here’s a challenge. You have to get your organization to work in new ways but your workforce is well versed and even committed to the old ways. Sound familiar? Many leaders are finding themselves in this position. They have a vision but can’t seem to get it executed.

Certainly, sometimes the issue is the leader. There is no shortage of people who are put into leadership positions without regard to whether they can actually lead others. But, there is another major problem. Leaders who get their vision hijacked. The leader often exacerbates the problem. He or she tries to give the hijackers a break or a chance to turn things around. The problem is that they seldom do.

There are two kinds of people who hijack a vision: those who can’t do it and those who won’t do it. The first group is a reality of the business environment. Things change. New ways of doing business, new assumptions, and new technologies all make it harder for the workforce as a whole to stay relevant. While not ideal, this first group can be turned around. The second group is more problematic. This isn’t about simple motivation (e.g, reward strategies, recognition, etc.) This group doesn’t buy into the vision and actively tries to subvert it.

If you are serious about changing culture or implementing a vision, you need to figure out where your people fall. Taking the two questions, “Can this person get it done?” and “Does this person want to get it done?” yields four possible results (see graphic). Once you know where your people fit, you need to take action.

Drivers
Drivers are the people who can and want to implement your vision. They should be running your most critical initiatives. Give them the resources, latitude, and support to deliver.

Detractors
Detractors can’t deliver the vision and don’t care to anyway. You need to move them out of your organization as quickly as possible. Often leaders make the mistake of letting these people linger. They assume that while they aren’t driving the vision, they might be helpful for lower level work. That’s not the case. This group winds up draining your resources and energy. Having no one in their place is better than keeping them around.

Subverters
Subverters are the most dangerous group. They are skilled and can get things done. They probably have a lot of influence. The problem is that they are using that against you. Subverters can add value if they come around. So, that’s your action. You need to sign them up or sign them out and you need to do it quickly. While they are deciding which option they want, they shouldn’t be put on critical tasks. This might sound counter-intuitive. The reality is that an average performer who is bought in will often out perform a super star who is not. Don’t reward these people by letting them stay in the spotlight. Until they decide whether they want to be in, assign them to operational or maintenance tasks.

Hopefuls
Hopefuls want to deliver your vision but don’t have the skills to do so. Like the subverters, these people should be given a chance. However, you don’t have to be as aggressive. Give them a chance to retool. Support them. Put them in supporting roles learning from the drivers. These people are the core of your future workforce. Help them out. But, be realistic as well. If after reasonable effort, they still can’t deliver, they might be a mismatch for your organization.

It’s both natural and admirable to want to give people the benefit of the doubt. And you should. But, you need to do so in a measured, purposeful way. Too many leaders watch their vision stagnate while waiting for people to turn around.

Promote leaders, don't try to build them

noreply@blogger.com (Brad) — Thu, 27 Aug 2009 12:29:00 +0000

I commonly get asked how to teach "leaders" to be leaders. My answer is always the same. Don't. You can certainly hone and refine a person's leadership skills. But, if a person is responsible for leading others and doesn't already have basic leadership skills, it's too late.

Why do some many companies put unqualified people into leadership positions? After all, the number one job and competency of a leader is to lead. You wouldn't hire someone into your accountant department who didn't know how to do accounting. You wouldn't hire a lawyer who didn't understand the law. Yet, I see many organizations where people are promoted into leadership positions because they were good at something other than leading.

This creates several problems. The most obvious one is a poor performing workforce. In the work I do, a lot of performance, motivation, and engagement problems stem from poor leadership. Micromanagement, arrogance, poor communication, insecurity, lack of understanding about the business, inability to prioritize are all common issues that I uncover in my work. But if a leader isn't managing those things well, what is he or she doing? What value are they providing (as a leader)?

A second major problem is that a bad leaders produce more bad leaders. Recently, I was working with a group of managers on strategic thinking. We talked about the importance of getting out of the details to see the big picture. Several of the managers said that they wouldn't be able to do that. Their bosses (and even their bosses' bosses) always drove down into the details. Their bosses wouldn't even entertain a conversation about anything forward looking or strategic. Because those leaders couldn't hold a strategic conversation themselves, they forced others to their tactical level. The ripple effect was that these managers knew that, to be successful (at least with their boss) they had to be tactical. In turn, they forced their own people to provide tactical solutions and answers so that they could pass those up the line. This isn't an isolated case. The primary push back I get in most leadership training is that people won't be able to apply what they are learning because their boss "doesn't get it".

A leader has one job - to lead. As with any job, a person can always get better. However, all jobs have a baseline set of of skills, attitudes, and behaviors that must be present to even qualify. Leadership is no different. People who can't lead shouldn't be put into leadership roles. Period.

You're not as unique as you think - phew!

noreply@blogger.com (Brad) — Wed, 19 Aug 2009 19:02:00 +0000

I've noticed a pattern many of the organizations with whom I work. People tend to think that their industry/type of business is different than any other. Within their industry, they think that their business has its own set of unique challenge. And, within their business, they believe that their department somehow is different from the rest of the organization. Some people even take it further to the functional or team level. I'm not sure why it happens, but it does.

The reality is that organizations are less unique than the people within them think. It's true that at a certain level there are specific regulations, requirements, or issues that are unique to the organization. However, the broad issues that business face are the same. But why does that matter? It matters because I've seen three problems that leaders incur when they subscribe to the false belief that their organization is different:

Limited solutions
Face it, no matter what business you are in, most of the rest of the world isn't in that business. Therefore, if you limit yourself to thinking that your problems are only unique to your type of business or industry, you immediately exclude a lot of potential solutions. A lot of the conventional wisdom surrounding innovation tells people to purposely look outside of their industry to find solutions to their problems. So, the problem that you are having providing a consistent customer experience? It's the same issues for hospitals, call centers, retail stores, movie theaters, and even schools. Take advantage of their lessons learned.

Claiming false success
If you believe that your organization and its issues are unique, it becomes very easy to ignore external data when determining whether you are successful. For example, suppose that on average, companies in your industry score 9.3 (our of 10) on customer satisfaction surveys. A leader who firmly believes that his or her company is different might be satisfied with an 8.5. I've seen this happen. The leaders justify their decisions and actions arguing that if they used those other companies' models the scores would be even lower. But this kind of logic gets you in trouble. It allows you to believe that anything you do is right. Some leaders even take this to the next level and declare the work they do and their teams to be superior to the marketplace despite data to the contrary.

Diminishing opportunities to improve
If you believe that what you do is the best (given your unique circumstances), there is little incentive to change or improve. This is especially true of radical change. I worked with one leader who was convinced that his team's turn around time of two weeks for a report was about the best that could be done given the complexity of the report and information. He never looked for opportunities to improve. When I suggested that the turn around could be reduced to under a day, he laughed. He couldn't envision any way that the report could be done in less than four weeks. Of course, that's because he only envisioned scenarios that used his current process. When we rolled out a new version of the report that had a four hour turnaround he was stunned. Of course, he pointed to the fact that our report wasn't exactly the same as his. He was right though. Ours had more information and was be better tailored to the needs of each manager.

Go back to your HBR archives and pull a few leadership or marketing articles from the 70s or 80s. More often than not, if you changed the date (and possibly a few references to technology) those articles could have been written yesterday.

The truth is, in business and in leadership, there is a pretty large yet pretty common set of issues that people face. Generally speaking, when you pull back your company or industry's jargon, you'll find that your issues aren't really that much different from someone else's. If you don't, perhaps you don't really understand the issue or the nature of business as well as you should.

Netflix: Almost too easy to do business with

noreply@blogger.com (Brad) — Sun, 19 Jul 2009 21:50:00 +0000

After a couple of examples of non-customer centric encounters, I thought it might be time to provide some positive examples. The timing is perfect as I recently was reflecting on how I went from not using Netflix to paying $8.99 per month. It didn't happen overnight but it did happen because they made it ridiculously easy for me to business with them.

I started Netflix as do many people - with a free trial. Midway through my trial I started noticing a button on my home page. The button was my door to Netflix. No pressure, no sales pitch. They didn't even tell me about all the other membership levels. Just a simple click to become a Netflix member at their entry level of $4.99 per month. I clicked.

Then a few month later, just as I was wishing that I could get more than one movie per month, I started noticing another little button. This one told me that I could start getting unlimited movies per month (still one at a time) starting that day. It showed the amortized price for the rest of the month and then subsequent monthly price that I'd be paying ($8.99). Again, no major pitch, I didn't have to go to a separate screen that showed all of the other subscription options. Just a simple button. I clicked and continued this painless and seamless journey into Netflix membership.

I am currently holding steady at $8.99. But, I keep seeing the next button. I'm sure when the time is right I'll hit it and up my membership yet again.

Ironically, I would have never signed up for Netflix at $8.99 per month. I probably wouldn't have signed up if I didn't get the free trial. And I certainly wouldn't have signed up if I first had to talk with a sales person about Netflix. But, Netflix is smart. They didn't make me do any of that. They just offered me a simple button, a little information and left the rest up to me. It was almost too easy.

United: 0 for 3

noreply@blogger.com (Brad) — Wed, 15 Jul 2009 22:15:00 +0000

Well, my saga with United continues. They still aren't proving to be very customer friendly.

They went 0 for 2 with the on-line check in process. You would expect that once you log in you can hit a button and check in. But, that's not the case. I had to go through three screens of advertisements for things that I didn't want when I bought the tickets and suprisingly still didn't want. First screen - more legroom. Thanks for offering to upgrade me to a confortable seat. I appreciate it. Not! Actually, not only did you waste my time, you just reminded me how uncomfortable this trip was going to be. Next screen - the "premier" line. If I don't want to wait in a long line at security, etc, I can pay extra to get into a speedier one. Interesting. Maybe I should take some lessons from United and apply them to my business. I'll do the work. But if you want me to do be good (e.g., more legroom) you've got to pay more. And, my processes are pretty clunky, but for an extra $50, I'll try to be more efficient. That's brilliant. It used to be that companies invested in improving their inefficient processes. United seems to have found a way to make a profit from them.

I don't even remember what the third screen was. At that point, I just went straight to the bottom and said "skip this offer".

So, United has successfully violated most of the principles that Paco Underhill talked about in "Why we buy", United has designed a process that is clearly optimized for their needs and desires rather than their customers.

But, the story doesn't end. They then went for 0 for 3. Once I actually got past the commercials and "checked in" I printed by boarding passes. Much to my suprise, the seats weren't the ones I selected when I purchased the tickets. I guess they figured that I didn't really mean it when I took the time to specifically select five seats during the purchase process. Who knows, maybe these new tickets have a better view. I did see a button that would have let me change my seats. However, it never occured to me that the ones I had at check in were going to be different than the ones I selected in the first place so I didn't even check. I guess that's my fault as a customer. I shouldn't just assume that because I select something that I'll actually get it. Shame on me, right?

So, in my book, United is currently 0 for 3 in being customer-driven.

I just cant' wait until the actual flight. Ugh.

United Airlines: Charging a premium for decreased service

noreply@blogger.com (Brad) — Mon, 06 Jul 2009 03:07:00 +0000

Today I contacted United Airlines to change a return flight on trip. The total came to $230 ($150 change fee and $80 difference between the price of my old and new ticket).

Fortunately, I checked on-line before making the call and saw that the one way trip on my new date was only $194. The agent and I both agreed that it made more sense (for me at least) to keep my old reservation and book the one way flight. I wondered why, at that point, United would choose to go with the process that was less cutomer friendly (me booking the one-way on line versus them changing the flight for the same price). The outcome would have turned out the same. Either way they would have $194. But, for some reason, they chose the business-centric rather than customer-centric response.

This was a clear lose/lose in my book. As a customer, United made it hard for me to do business with them. If I can book a one way flight for $194, why charge me $230 to do it? At that point, they already paid the sunk cost of the agent's time. It wasn't lke they were getting any process savings for me booking on-line.

But did they gain anything? I now have a reservation on two return flights and I am only going to use one. So their supply and demand planning is off. They have one less seat that they can sell for full price (and make a lot more than the incremental $40 they would have made by charging me $230). So, I think they lost too.

At some point, trying to squeeze every penny out of your customer backfires, especially when customers are in control and have other choices. It's one thing if there wasn't an on-line flight that cost less. But given the circumstances, it seems like they consciously chose to provide poor service.

United had the choice to be customer-centric. The outcome in this case didn't change. The only thing that changed was the process. And they chose a process that placed the burden on the customer without getting any actual benefit for themselves. Now why would anyone do that?

Please fill out this form to request that your discount be terminated

noreply@blogger.com (Brad) — Sun, 05 Jul 2009 16:22:00 +0000

Recently I wrote about customer-centric processes. In early posts, I've discussed the idea of the "path of least resistance". That is, if there is something that you want someone else to do, you need to make that action easier than doing something else. To many, path of least resistance and customer-centric processes are a no-brainer. At least, intellectually they are. But sometimes, our internal policies and processes get in the way.

Today, I was reviewing my Verizon Wireless bill and found a mistake. I was receiving an employee discount for a company for which I no longer worked. I called Verizon to let them know so that they could make the appropriate adjustment to their records (and unfortunately to my account).

After a few minutes, the customer service rep told me that I had to submit an email formally requesting that my discount be removed. He then gave me a very user-unfriendly email address and a list of information that I was supposed to include in the email:

Discount code
Corporate id number
Group id number
ECPD (which he never actually defined)

I explained that I didn't know the values for any of those codes. They weren't on the bill (In all fairness, he did tell me I could just give my discount amount rather than the code - that was on the bill). In the spirit of true service, he offered to look them up and give them to me.

I'm sure that if I asked people at Verizon if they were customer-centric and if they tried to make themselves easy to do business with, they'd say yes. Yet somehow through a set of small discrete decisions, they've create a situation which is just the opposite. They are asking me to jump through hoops to provide them with information that they already have (and I don't) in order to do something that isn't in my self interest (economically) and only benefits them.

It's easy to nod your head and agree with being customer-centric and creating the path of least resistance. It's another thing to actually do it.

Being nice to your customers doesn’t make you customer-centric

noreply@blogger.com (Brad) — Wed, 01 Jul 2009 18:52:00 +0000

During a recent meeting, I made what I thought was a casual observation. The group of people with whom I was working weren’t very customer-centric. That message was not received very well (by most of the group). They assured me that they are very empathic toward their customers. They treated them with the upmost respect. Finally, they argued, this particular meeting wasn’t about customers. It was about the relationship between two providers in the supply chain. The issue was how one of the provider’s relationship with the customer impacted the other provider’s relationship. That’s when I knew they didn’t get it. Every conversation needs to be about the customer. The right question to ask was how these two provider’s relationships impacted the customer.

Being customer-centric isn’t the same as being nice to your customer. It isn’t even the same as providing good customer service. Being customer-centric is about whether your business is designed around the needs and expectations of the customer.

In Why We Buy, Paco Underhill provides example after example of stores which are not customer-centric. Their layout, flow, processes, and information attempt to control the customer’s interaction and experience. Underhill points out that such strategies often fail. Customers are persistent. They’ll make the system work for themselves. Trying to manipulate their process doesn’t stop them, it only frustrates them.

A 2008 Harvard Business Review story provided an excellent example of a customer-centric decision at Amazon.com. Amazon used to list the products that it sold separately from the products sold by its affiliates. When searching for a new digital camera, you got a page of the cameras available from Amazon. To see cameras from affiliates, you had to click a link and navigate to another page.

Bezos decided that this was cumbersome for the customer. They didn’t care who sourced the camera. They just came to Amazon.com to get one at a good price. Despite objections from his purchasing and sales people, Bezos made the change. He said that the most important consideration was meeting the customer’s need. Overall revenue for Amazon increased. Optimizing for the customer rather than the business (or perceived needs of the business) won out.

Customer-centric organizations are aware of three major changes in consumer behavior.

Formal expertise is now distributed and the expert’s role has changed from being the ultimate source of truth to being one of many opinions.
Customers expect a lot of information about the products and services they are buying
Customers control the process

They work to adapt their processes and business models to these changes.

Some companies and industries seem to be resisting these trends. Sometimes there is large-scale resistance in attempts to legitimize their experts through regulation and laws. Other cases are more subtle such as a simple website design or process that forces the customer to see the description of a product before show him or her the price”.

Ultimately, I believe that these industries and companies are going to lose out.

It’s time to move from focusing on being nice to customers to adapting to their needs. There are no longer decisions that don’t impact your customer. If you don’t start out by asking how a decision helps or hurt your customer, you are not being customer-centric. And this doesn't just apply to external customers. Many enterprise-based departments are working to become better partners with the front-line business. The problem is that while they are trying to improve service, they still have processes, tools, and policies that are optimized for their function rather than the need of the customer.

The best business question you can ask

noreply@blogger.com (Brad) — Wed, 24 Jun 2009 14:36:00 +0000

Peter Drucker once said,

“The most serious mistakes are not being made as a result of wrong answers. The truly dangerous thing is asking the wrong question.”

Yet, for many leaders coming up with the right question is still a challenge.

In prior posts I’ve listed questions that are helpful in a specific context (e.g., coaching, finding meaning in information, determining your reason for being). However, there is one question (actually it’s two complimentary questions) that work anywhere and anytime. Those questions are:

What is currently happening that shouldn’t be happening?

What is not currently happening that should be happening?

Although, relatively simple, I have found these questions to provide powerful results. So, the next time you are in a bind, try these questions out.

What is meaning? And, why should a leader care?

noreply@blogger.com (Brad) — Mon, 18 May 2009 14:08:00 +0000

Creating meaning is one of the most important things that a leader does. But what is “meaning”?

The most eloquent definition of meaning come in Viktor Frankel’s book Man’s Search for Meaning. Frankel ties meaning to the internal purpose for which one lives. I use a much less philosophical definition to provide a framework that leaders can use on a daily basis.

From a leadership perspective, there are three ways to create meaning: impact and change, purpose and connection, and sense making.

Impact and change
The primary contribution a leader makes relative to meaning is creating meaningful results. Meaningful results are those that have significant and/or lasting impact. A leader’s primary focus should be on making a meaningful contribution to his or her organization and people.

Purpose and connection
Leaders creates meaningful results is through their people. Unfortunately, studies consistently show that a large percentage of the workforce is under-utilized and un-engaged. Leaders whose people understand the relationship between their work and the organization’s, the customer’s, or society’s success are more engaged. This notion is probably the closest to Frankel’s definition of meaning.

Sense making
Finally, leaders help their people make an impact through sense making. Leaders help people understand what is happening in their environment. Leaders combine data and facts with their own context and perspective to create meaning.

Leading through meaning

The following six questions will help you focus on creating meaning for your people and your organization.

What is the business outcome I’m trying to achieve?
What unique contribution do I make as a leader to that outcome?
How do I create focus, purpose, and meaning for my people in their work?
How do I help my people navigate the situation going on around them?
Am I finding the knowledge that is lost in information and do I seek the wisdom that is lost in knowledge? [based on a quote by T. S. Eliot]
How do I create a culture of people who seek meaning?

Do you have answers for each? Do you consistently make decisions and take actions based on those answers? If so, you are leading through the creation of meaning.

How much strategy is enough?

noreply@blogger.com (Brad) — Mon, 11 May 2009 15:18:00 +0000

“Strategy” is one of those words that is loosely bantered about without much precision. There seems to be a lot of confusion about what a strategy is. There is even more confusion around what a strategy does. In working with groups to develop strategy, I’ve learned a few important lessons: 1) strategies that try to answer every question are not strategies (and never get completed), and 2) strategies that answer too few question become pretty posters and Powerpoint slides but do little to drive decision-making and action. A good strategy sets the context in which an organization should operate. A strategy should:

Set boundaries
Create focus
Enable prioritization

The strategy accomplishes this across five dimensions:

Who the company serves
What the company provides
How (at a high level) it is provided
Where and when it is provided
To what end (why) the company provides it

Simply arraying the areas of context (boundaries, focus, prioritization) against these five dimensions creates a simple framework for defining a strategy. Such a strategy will drive decision-making and action without actually articulating every decision and action. That allows the organization to remain nimble and responsive to changes in the environment while moving toward a broader goal.

The key is focusing on results or outcomes, not tactics. For example, an organization might have a strategy to focus its resources on mission critical processes. The company might choose to outsource to accomplish this strategy but outsourcing is not the strategy. While subtle, the difference is important.

Good strategies create a framework for decision-making and actions. They allow autonomy and improvisation while keeping the organization moving in the right direction.

Embrace your bias – just don’t let it control you

noreply@blogger.com (Brad) — Mon, 20 Apr 2009 17:38:00 +0000

In some organizations, the word “bias” has the same status as many other four-letter words; you need to avoid it in polite company. After all, leaders are supposed to be objective and data driven in their decisions and actions.

But bias is essential to decision making. In his book, “How We Decide”, Jonah Lehrer, tells the story of a man who struggled with simple decisions such as the color pen he should use or the radio station to which he should listen. The man’s problem stemmed from surgery where a part of his brain had to be removed. Interestingly, this was the same part of his brain that controlled his emotions. In other words, this man’s decision making ability became quite limited without bias/emotion. Lehrer concludes that we need both rational and an emotional (biased) thinking to make decisions. Trying to make decisions simply on facts comes nearly impossible. You can always gather more data or run more analyses. At some point, you need to make a choice – that’s where your bias comes in.

Instead of trying to remove bias, I believe that leaders should embrace it. This doesn’t mean that they should blindly act upon it. Instead, leaders should learn to use their bias to drive questions rather than answers. This is important for two reasons

1) A leader’s value comes from his or her bias. A leader’s bias is based on his or her experience. Experience and judgment is what sets leaders apart. If that shouldn’t be a part of decision-making, then every new employee would be equally qualified to lead.

2) Even if we wanted to, we can’t control our bias. Recent research on the brain shows that our brains operate too fast; often filtering information before we’ve even become conscious of it. The best we can do is learn to mitigate our bias.

So, what does a good “biased” leader do? He asks a lot of questions. He uses his bias as a basis for exploring his business and organization. He creates hypotheses and data experiments to confirm or refute his biases. That last part is important. A good leader doesn’t just look for data to confirm. A good leader is willing to recognize when the data does not support his view.

Good leaders also put their bias on the table. That’s different from what we are taught. We’ve been taught to not show our bias. But, since bias is unavoidable, most leaders wind up just masking it rather than removing it. As a result, analysis, decision-making, dialogue become inefficient and dysfunctional as people are working against forces that they can’t see or process. Instead, leaders can be upfront about their bias and invite their teams to provide opposing data. Some leaders take this even further and require that someone on the team provide an opposing view and data before they make a decision. That’s strong leadership.

Finally, good leaders surrounded themselves by people with opposing biases. This creates an appropriate level of checks and balances.

Your bias is probably what has gotten you to where you are today. If you continue to use it wisely, it will take you much further. Don’t shy away from your bias. Instead, use your bias to help make sense of data.

The story unfolds with or without data

noreply@blogger.com (Brad) — Wed, 08 Apr 2009 00:02:00 +0000

If a tree falls in the woods and there is no one there to hear it, does it make a sound? How about this one? If your business is running on a daily basis but there is no data to measure it, does it have successes and failures?

Smarter people than me have pondered the first question – I’ll leave the answer to them. I’m more interested in the second question.

The answer obviously is “yes”. Your business has successes and failures, good decisions and bad decisions, and good luck or bad luck whether you have data to measure it. Data provides a way to capture the story of your business. But, it is not the story.

Too many leaders rely on data to tell them the story of their business. Data, of course, is important. But a good leader doesn’t allow the data to lead him or her. A good leader leads with the data as a supporting tool.

I once had a group of leaders review a marketing presentation. All of them came up with the same story. They focused on what the presentation said it would take to reach a new market segment. They simply summarized the facts in marketing presentation. They let those facts lead them. Their story was the same as anyone else inside or outside the company might tell. That’s not the real story. That’s not a story that drive decisions and actions. That’s just a summary of facts. The real story was the one that was occurring outside of the data in that presentation.

I asked them to revisit the presentation. But this time I had them start by thinking about business. The data in the presentation was going to be used to fill in the details of that story. How well were they positioned to capture this segment? Did their current business model align with how this particular segment made buying decisions? Was this segment worth capturing - it was big, but was it profitable, and if so, at what cost? What would they have to change in order to capture the segment? What might they lose? Were the needs of the new segment consistent with the needs of their existing customer base? If not, how would they reconcile the two? (Their original "story" from the marketing presentation didn't even talk about their existing customer base. They let the content of the presentation drive the scope of their story -- that's a mistake).Where have they had success in attracting this new segment?

Most of the information they needed to tell that story wasn’t in the presentation. It was in their existing understanding of the organization. They used the presentation to confirm or refute their existing beliefs about their organization. In other words, they told a story about their business that was supported by the data in the presentation. This story couldn’t be told by anyone who didn’t have knowledge of the company. This was their story.

The news story raised several questions and key issues that could drive decisions and actions. It was relevant. Also, in the process of coming up with that story, the leaders have much more powerful conversations about their business. They questioned assumptions and challenged one another. That didn’t happen the first time.

A good leader should always be thinking about the story that is unfolding in his or her business, the market, and the economy. That story is governed by internal decisions, customer behavior, and external factors (such as a recession). And, that is the story that drives the success or failure of a business.

Data might clarify some details of the story but it shouldn’t be a surprise. A leader who is surprised when a financial report tells him that his department is over budget is not paying attention to the story. Similarly, a leader who didn’t realize that her team was providing poor customer service until those scores went down is also asleep at the wheel.

Good leaders use data to tell a story. However, they don’t allow the data to set the scope and context for that story. They use their understanding of the business for that. The data should just fill in the details.

Questions that create meaning

noreply@blogger.com (Brad) — Wed, 25 Mar 2009 04:23:00 +0000

Asking questions is an essential way to find meaning in information. Many leaders want to ask questions but don’t know where to start. Ideally, you ask questions based on your existing knowledge and the current context or situation. Therefore, every situation will have its own unique set of questions. However, to get started, some basic questions will work in any situation. They follow a simple question formula:

What is it?
What should it be?
What patterns do I see?
Does it matter?

All of these questions can help you find meaning. However, the latter questions will drive greater meaning. You generally can’t make a decision or take an action until you reach at least the third level. Therefore, I recommend that leaders spend most of their time on the third and fourth questions.

What is it?
The most basic way to derive meaning from information is to understand what that information is. I’m often surprised how little many leaders know about the basic mechanics of their metrics.

For example, one company had a “customer satisfaction” metric on their scorecard. I asked the managers what that metric meant. First I asked how the metric was calculated. They said it was based on the customer satisfaction survey. But the survey was based on a one to five scale and their customer satisfaction score was 85. Most didn’t understand how the score was converted. In addition, they didn’t understand what else was done. They were surprised when I told them that it did not measure customer satisfaction. The metric was a percentile ranking. It was telling them was how their satisfaction score compared against similar companies. This means that if all other companies were very bad, and they were just bad, they would be in a high percentile. Similarly, if all other companies were great, and their company was good, they’d have a low ranking. For the first time, many of them understood the metric and were able to derive meaning from it. One manager said, “My boss kept telling me that my customers weren’t happy because our score was below target, but when I talked to customers they seemed happy. Now I understand why. They are happy, they just aren’t as happy as they could be at our competitors.”

By understanding, what the metric was telling them, the managers were able to change their messages, decisions, and actions.

Understanding what a metric is specifically measuring is the first step toward creating meaning. Here are a few other questions you should ask to answer, “what is it”

· What is included and excluded from this metric?
· How frequently is the metric calculated?
· How is it computed? What are the factors that go into it?
· Is it a direct measure or a “proxy” measure
· Is it a relative or absolute measure?

What should it be?

Once you understand what the measure is, the next step is to understand what it should be.

If I were to tell you that I purchased a car for $5,000, you couldn’t make a decision or action. You need to have an idea of what it should be. If I tell you that the car was a 2009 Lexus (or a 1981 Chevy Chevette) you are now better able to create meaning.

Leaders should never look at information without an idea (which might be proven wrong) about what they expect to see. Several sources will help determine what the number should be:

· Company goals/targets
· Historical performance
· Benchmarks
· Current context (e.g., if you’ve just invested in a marketing campaign, you might expect that sales would be up)

The problem that many leaders fall into is confusing which number they should use. I like to look at this question from three perspectives: 1) What is a realistic expectation for our current performance, 2) What have we committed to, 3) What is possible.

Each one of those questions drives different decisions. The first question, realistic expectation, is probably the best for diagnosing and taking action. The second question, commitment, is best for understanding potential impacts on other issues (and impact on your bonus!). The third question helps you understand where there are opportunities for improvement.

By creating an expectation for what you should be seeing, you create a trigger point for taking action.

What patterns do I see?
Understanding what something should prompts action. But it doesn’t tell you where or what action to take. Understanding patterns will help isolate the problem.

There are two types of patterns to look for to create meaning: causal and categorical.

Causal patterns, as their names suggest, are patterns that show how one thing influences another. By understanding they key levers of your business, you can take action. For example, one organization found a pattern between time per service call and number of return service calls. They discovered that their technicians were cutting corners to hit their “time per call” target, which was driving down quality.

Categorical patterns highlight common themes. For example, a company discovered that most of its complaints came from stores in the same region. Replacing the regional manager had a huge impact on performance.

By understanding patterns, you will be able to determine where to focus your actions.

Does it matter?
“Does it matter” is the ultimate meaning question. It is the question that should be consulted first before launching a response to a problem. It’s also the question that I often see overlooked.

One organization was having a problem with parking in its facilities. Customers regularly complained to management and, on satisfaction surveys, rated parking extremely poorly. Additional analysis showed that, although customers were frustrated, it didn’t influence their buying decisions. They were so satisfied with the quality of the company’s product that they were willing to put up with the poor parking situation. It didn’t matter (in the grand scheme of things).

Had the company simply reacted, it could have wasted a lot of money investing in improving parking with no overall benefit. Of course, most companies want to make the overall customer experience as good as possible. So, why not improve parking? If everything else is working, perhaps this would be a good investment. However, if an investment in parking offsets an investment in something that matters more to customers, the organization has made a poor decision.

Ask questions
These four questions can provide the basis for better understanding your business and finding meaning. These questions aren’t just limited to interpreting data. They can just as easily be applied to discussions about career development, strategy, or any aspect of your business. The more meaning you create, the better your decisions and actions.

Facts, trust, and Sergeant Friday

noreply@blogger.com (Brad) — Fri, 13 Mar 2009 01:24:00 +0000

What do the following five events have in common?

· Police questioning of suspects/witnesses
· IRS audits
· Courtroom testimony
· Investor calls
· Doctor visits

They all typically seek “just the facts”. This makes sense. In a courtroom, the jury’s job is to interpret the facts; they don’t want them clouded by the witness. I think in most situations, when we are unsure of someone’s credibility or agenda, we tend to seek the facts. While it’s true that people can mislead with facts, there is something safer or more “objective” about getting the facts. In essence, seeking facts counters a lack of trust.

This happens in business as well. Many leaders don’t recognize this as a trust issue. They confuse trust with integrity. They trust their employees not to steal, cheat, or lie. But, this is a different type of trust. It’s trusting their thinking which is often much harder than trusting their actions. That’s where the most “trusting” leaders sometimes fall down. They view their responsibility as ensuring that the data and analysis are accurate. That is their responsibility but they can be more productive if they execute that responsibility differently. If a leader is asking his team to walk through every fact and analysis from start to finish, even in the name of due diligence, he is showing a lack of trust. In addition, he is not being productive.

First, it’s inefficient. If you believe that one person might get it wrong and one might get it right, it’s more productive to have the “right” person do the work in the first place. Second, it’s unempowering. If your people are simply conduits through which data flows, they aren’t adding much value. You aren’t leveraging yourself very well if your job is to do all of the heavy analytical lifting and thinking. Third, it slows down decision-making and taking action. Instead of starting the meeting from the point where the team left off, the meeting backtracks through the data. It might take half (or all) of the meeting to get back to that point. That’s not an efficient use of time or resources.

I’m not suggesting that leaders simply take everything they are told without question. I am suggesting that there is an alternative to being an auditor. If you focus on seeking understanding, you empower your team, keep the conversation moving forward, and uncover potential problems.

Test your assumptions, not theirs
As a leader, you should have a general idea of what the data might tell you. For example, if you know that your sales in Indiana have been struggling, you might expect the data to suggest a problem there. If your team’s analysis doesn’t show a problem there, you can then ask about it (e.g., “We’ve really been struggling in Indiana lately, how did they compare against these other poor performing states). At that point, you’ll either discover that Indiana is doing better than you thought or that your team forgot to include Indiana in their analysis (or that somehow their analysis was flawed). Any of these lets you take action. There’s no need to rehash all of the other information that doesn’t have an issue.

Ask for conclusions first, then ask questions to understand their analysis
Have your team start with the results. What did they find out? What are their recommendations? Suppose they found a quality issue. You can them ask them if the issue is consistent across all products/services or whether it is isolated to a few specific areas. You can ask what patterns they noticed in areas that have the problems versus those that do not. As before, you are still understanding their thinking without having them go through every piece of analysis.

The key is approach your role as understanding people’s thinking rather than auditing their process. Seeking understanding is what good leaders do. It keeps the conversation moving forward and it uncovers problems. Auditing their process is a sign of a lack of trust. It’s unempowering and unproductive. If you don’t trust your people to do the job, get someone else to do it. Repeating the process for your own comfort doesn’t help anyone.

Making data driven decisions isn’t just about having numbers and facts. It requires judgment, perspective, and context. The more you work with your team to hone their ability to combine those things with the facts, the better and more efficient your decision-making will become.

Context on the cutting room floor

noreply@blogger.com (Brad) — Fri, 06 Mar 2009 15:13:00 +0000

How much context do you provide when requesting reports or information from your team? Do you include information on how it will be used, what decision will be made or what you are looking for or expect to see?

If you are like the vast majority of the leaders with whom I’ve worked, the answer is probably “not much”. The result is a cycle of requests, wrong information, new requests, etc until everyone is frustrated.

Context isn’t just important for ensuring that you get what you need. Your people need context in order to make sense of the work they do, they information they process, and the events that unfold in their work environment. How often do your people execute the task or transaction without achieving the overall goal? If this happens alot, they probably are lacking context.

Beyond making sense, context also helps individuals find meaning in what they do. Meaning is an important motivator for employees.

Despite the importance of providing context, people seem to be providing less of it. A simple test is to ask employees if they know how the information they are providing or the work they are doing is used. You’d be surprised at how few do.

Time, or more specifically, lack of time, is the typical reason given for not providing context. People tell me that it is more efficient to dash off a request than to explain the context behind that request. We are all busy, right. Sometimes it is more efficient to send a request. However, in most cases, those time savings are eaten away by inefficient or incorrect work.

I’ve noticed a more subtle enemy of context – electronic communication. As we’ve moved from paper, to e-mail, to text messages, to “twitters”, message length has shrunk significantly. And, when message length shrinks, the first thing to go is context. Take a look at the most recent emails or text messages you’ve received. Most will be very transactional in nature. This isn’t a bad thing. Text messages and email are excellent vehicles for sending transactional/tactical messages. The issue occurs when leaders don't find other ways to provide the broader context. We are taught that meetings must be focused on decision-making. That’s good. Some meetings should be. But where do people receive the “big picture” in order to make good decisions in those meetings? It’s not in their email or text messages. It’s probably not in the voice-mails they receive during the day. It’s certainly not in the day-to-day transaction they perform.

Providing context requires a time commitment. However, more efficient work, higher quality work, and better achievement of goals typically offsets that investment.

Swimming pools, guns, and why your people don’t speak up

noreply@blogger.com (Brad) — Wed, 25 Feb 2009 16:46:00 +0000

In his book, Freakonomics, Steven Levitt has an excellent chapter on risk. He quotes risk consultant, Peter Sandman who said, “That basic reality is that the risks that scare people and the risks that kill people are very different.”

Sandman uses a simple definition of risk.

Risk = Hazard + Outrage

For example, Levitt poses the question of which house you’d be more comfortable allowing your child to play – one with a swimming pool or one with a gun. The hazard, death, is the same. The data tells us that considerably more children die from swimming pool accidents each year. Yet most people would consider the home with the gun more “risky”. Levitt’s rationale

“. . .The thought of a child being shot through the chest with a neighbor’s gun is gruesome, dramatic, horrifying – in a word outrageous. Swimming pools do not inspire outrage.”

Sandman and Levitt’s models also apply at work. Decisions to speak up, take certain actions, or do many of the things that we encourage (yet often don’t see) are driven by perceptions of risk.

The key is to understand what role you, as a leader, play in people’s perception risk. Levitt discusses three drivers of individual's perceptions of risk and outrage: sense of control, reaction and immediacy.

Control
We tend to see things that are out of our control as being more risky. That's human nature. Yet, organizations often hold people accountable for things that are out of their control. When this happens, people seek ways to reduce that feeling of risk. Often their risk-averting behaviors become destructive to the organization.

A simple example is the classic “shoot the messenger” syndrome. When bringing bad news becomes a risk, people stop reporting it. That’s when the real risk arises.

A more complex example is in goal setting. In one company sales people’s goals included product quality. Yet the sales people had no control over any aspect of the production process. Levitt points out that we typically feel at less risk when we are the ones perfoming a task. (Do you feel safer in the driver or passenger seat of your car?) To reduce their perceived risk, the sales people attempted to assert some control. They began micro managing the production managers. This prevented the production managers from fully focusing on their jobs. Sometimes the sales people would go around the production managers talking directly to supervisors and employees. By giving them a goal over which they had no control, the organization increased these people’s perception of risk. The result was dysfunctional behavior and performance.

The current economic climate affects business in ways that are completely out of anyone’s control. Your reaction can either fuel or reduce people’s perception of personal risk.

Reaction
Levitt’s swimming pool example is about how reaction impacts our perception of risk. The gun evokes a stronger emotional reaction than the pool. Therefore, the gun is perceived as riskier.

Leaders’ reactions drive employee perceptions of risk. How do you react to mistakes, wrong answers, or dissention? Are you aware of the level of "outrage" you display in response to various actions and behaviors?Of course, there are actions that should generate outrage – unethical behavior, lack of integrity, illegal behavior. Actions that lead to significant losses or hurt the business should also create outrage. The point isn't to tolerate any level of performance. Yet sometimes we invent or magnify the "hazard" reacting disproportionately to its real damage.

I knew an executive who extremely detail oriented. This person could comb through a 25-page document and find every typo, inconsistent font, or inconsistent color. He did this even on rough drafts, before the content was even final. Not only did he find the errors, he made a big deal about them. People knew that a less than “perfect” presentation would generate outrage. They adapted their behavior. If someone had an hour to work on a presentation, they’d spend ten minutes on content and 50 minutes proofreading. The documents looked great, but most of them didn’t say much.

Or, consider how new ideas are received in meetings. Ideas that are too far out of the status quo are often ridiculed. Yet, if we consider the risk equation, stating an idea really poses no hazard. Yet for some, just speaking can be a risk. Employees quickly learn that staying within a very narrow boundary decreases their risk.

Another risk-creating behavior stems from hoarding data. The leader holds back information to later use as a weapon against ideas he or she doesn’t support. Alternatively, perhaps an employee simply overlooks a piece of data. The leader’s response in that situation determines the perceived level of outrage. If missing a piece of data results in a reprimand, people will soon stop bringing ideas or recommendations to the table. Instead they'll regress to just providing simple facts and information. Look at your meeting dynamics. Are people comfortable asserting their point of view? Do they go out on a limb? Or, do your people stick to the facts? If people are playing it safe, it might be time to reassess where they perceive the risks.

Immediacy
Levitt's finaly point is that a current issues often appears more risky than a future issues. Stephen Covey made a similar point when he talked about “Quadrant I” and “Quadrant II” activities – those activities that are either urgent/important or not urgent/important. He notes that we often spend more time on the first quadrant (urgent/important) at the expense of the second quadrant. I’ve even found people who spend considerable time third quadrant (urgent/not important). This reinforces Levitt’s point of the power of immediacy in our perception of risk.

Sometimes the problems that are right in front of us do need fixing. If your house is on fire, that’s not the time to be focusing on how to decrease the risk of fire.

However, that’s not always the case. There is an on-going debate about whether short-term, quarterly based decision making improves or hampers organizational performance. In tough times, like the ones we are in now, many organizations forego investing in longer term risks in order to address short term issues. Fiscal responsibility is important but it must be balanced. If your actions cause you to lose customers in the short term, you might not have anyone to buy your product once things pick back up. If you get back on your feet, a workforce that can’t provide a quality product or service, a customer base that no longer remembers your brand, and a portfolio of old, outdated products will probably put you right back into the same place you started.

As a leader, you influence your employees’ perceptions of hazard and outrage
Too often, leaders make the very behaviors they seek carry the greatest risk. There are certainly times when people should feel at risk. It’s ok to be outraged at shoddy work or incompetence. However, shoddy work and incompetence are very different from results that are outside of people’s control or are due to honest mistakes.

What would happen if you fully unleashed people's potential?

noreply@blogger.com (Brad) — Thu, 19 Feb 2009 02:19:00 +0000

"What would happen if you fully unleashed people's potential?"

I've used this tag line for over a two years to help leaders rethink their responsiblity and relationship to the people with whom they work. We often overlook the passions, talents, and hopes of people as we try to mold them into "efficient" and "productive" workers.

Yet, sometimes I forget its real meaning. The following video from this year's TED conference is a vivid reminder of what it really means to unleash people's potential. I'm including the introductory note from Chris Anderson, TED founder, which provides some context.

We've just released one of the most powerful performances in TED's history. It happened 13 days ago at TED2009 with a surprise satellite link to Caracas and a youth orchestra led by the international phenomenon Gustavo Dudamel. He and the young members of the orchestra, many born into poverty, had had their lives transformed by a national music teaching program built by TED Prize Winner Jose Antonio Abreu.
If you give yourself one TED treat this month, make it this one. Please block out 20 minutes, hook up your computer to the best speakers you own, crank the volume and enjoy orchestral music as you've never seen or heard it before. <--this is the link
More background here.
Chris Anderson & the TED Team