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by Dr. Donald N. Sweet
What does the latest economic turbulence mean for the economy and your business? Who knows! As we all listen to the pundits we get very different messages. The bottom line is no one knows for sure what is going to happen in general, let alone how it will affect your industry or your business.
What is a business owner or CEO to do? How do you sort through all the conflicting data and opinions? I, for one, don’t think you do. I don’t believe that is the best place to invest your time and energy right now. Both CEOs and their teams need to invest time and energy in the improvement of their business fundamentals at this point in time.
You have to do something. Standing still to wait and see what happens, while an option, is not a good one, in my opinion. Even in these times of uncertainty, we need to take positive steps forward. As leaders, we owe that to our employees as well. They need to have something they can work on that will strengthen the company and help secure their jobs.
I tell my clients to turn off the news, some of which, in my humble opinion, approaches sensationalism. For many it only serves to depress them. This is a time we all need to take action, positive action. We need to do something that will make a difference in our companies, if nowhere else, at the moment.
What could be more fundamental than looking at our business organizational infrastructure? My colleague, Dr. Brad Lebo, continually tells our clients how important having written core values are to an organization. Having them is the first important step; effectively communicating them is next.
Core values define our business culture. Perhaps seeing the glass as half full is a core value in your business. Do all employees know that? Do they see you modeling that value? You get the message. Perhaps it’s time to revisit your core values. Maybe they just need to be dusted off and communicated.
The point is if we have positive core values, and what business doesn’t, this is an excellent time to remind everybody about them and for you as boss to walk the talk. At the end of the day actions speak so much louder than words. After core values, why not review your brand promises? We like to see three, a lead promise and two supporting promises. As an example, Southwest Airlines’ lead promise is Low Fares which are supported by lots of flights and lots of fun.
What does your business promise to the marketplace? At this point you may be saying what we really need are sales, not brand promises. While you may very well be right about needing more sales, having a well understood brand promise helps both your sales team and your customers do more business with your company. Providing focus is critical to your success. Brand promises also help define what you are not. Employees and customers should not spend time and effort on what you don’t promise.
How about priorities? Do you have a handful of company priorities for the next three months? Does everyone on the team know what they are and what their role is in the execution of those priorities? Let’s take those questions one at a time.
Priorities are key for the team members in the organization to know what is important. Without priorities we don’t know what is most important to do next. If we don’t know we should sail the ship north to arrive at our destination we might go south instead. We need to have targets, and priorities supply them.
Only have a handful of priorities. Too many and we lose focus. We spend too much time doing less important items when we have 17 or 27 priorities. Narrowing the list down is heavy lifting, but it is also where the payoff is located. Taking the time and team effort to come up with five priorities for the next three months brings laser focus to the business. These few priorities need to be tied to the long term goals of the company, too.
When we have a handful of company priorities, it becomes easier to communicate them to the team. Many organizations bring the players involved together to have them map out what needs to be done to accomplish the priority. These groups function much like LEAN teams. The process owners are present along with the champion and folks impacted by the process. Finally it is always good to have someone present who has no idea about the process that will ask the silly questions like, “why do we do it that way?”
This allows for a fully vetted process to achieve the priority. Responsibilities are determined, completion dates of intermediate steps agreed, and resources secured. Everyone should have a document laying out the individual commitments and group expectations.
We now have a number of positive things we can do in our business as we’re waiting for the economic picture to become clearer. We will have invested this uncertain period in strengthening our organization’s fundamentals. We will have taught our employees more about our culture, our priorities and how they fit into the overall picture. We will be in a better position to take advantage of opportunities because our business has better alignment from the top down and from the bottom up. We will function as a much more productive and happy team. Be bold and take some positive steps in these uncertain times!
See here for an article on Confronting Problem Behavior in the workplace by Brad Lebo, Ph. D.
If you look forward to confronting problem behavior and don’t rely on intimidation, you have my utmost respect. You also probably don’t need to read any further.
If, however, you’re like the majority of people, confronting problem behavior is something you dread. You might even avoid dealing with it at all, making you eligible for all those unpleasant labels: co-dependent, enabling or “in denial.”
There is hope! Confronting problem behavior is a skill that can be learned—and even mastered. With a little practice, you’ll be good at confronting the problem behavior of an employee or peer. It’s even possible to learn how to confront the problem behavior of a boss or customer.
There are substantial benefits from learning how to confront problem behavior. In the workplace there are financial returns that add up, like those from tackling off-task behaviors of certain employees. Over time, these off-task behaviors reduce productivity and add expense. There is the benefit of reducing risk, like the risk associated with unethical behavior that leads to complaints, lost customers and, potentially, civil or criminal action (fines, lawsuits, etc.). And, there is the “priceless” result of confronting someone in authority (such as a doctor or pilot) who is on the verge of making a tragic mistake that leads to injury or loss of life.
These benefits double if you are able to take satisfaction from preventing waste, wrongdoing or tragedy. They may multiply even more if you stop someone from behaving in a way that takes advantage of or otherwise misuses you.
To confront problem behavior, while keeping your own discomfort to a minimum, follow these five steps:
Step 1 – Determine the “gap” between the behavior you observe and the behavior you desire. Determine this gap with “clinical detachment”: observe the difference between what someone is doing and what you want them to do without getting into the whys and wherefores. This step is best done alone with the time to think about what the person is doing and how it is different than what you expect or need.
Example: Phil is frequently late for the start of the workday. Not: Phil seems to be late a lot because he doesn’t care about being on time for work.
Step 2 – Determine the source of the “gap” between desired and observed behavior. Try to understand where the difference in behavior comes from.
This step is a difficult to get right because there is a natural tendency to attribute the problem behavior to a character flaw or other deficit in the person’s makeup. Indeed, it is a challenge for most of us to not start thinking of what is wrong with the person who is under-performing. We tend to think of such a person as “lazy,” “stupid,” or “arrogant.”
Usually, however, we are wrong in our assessment. Being wrong about the source of the problem behavior has a couple of consequences. First, what corrective action can you take when someone is “lazy,” “stupid,” or “arrogant”? There are really no corrective steps to take, if the source of the problem is a character flaw.
Second, thinking of someone as flawed raises the emotional stakes in any discussion about planning to correct the behavior problem. Just think of the difference between having to work with someone you think is “stupid” and working with someone who you think is bright but could use training.
Typically, the source of a behavior problem is something other than a character flaw. More frequently, gaps in behavior are a symptom of poor understanding of expectations, misunderstood priorities, insufficient experience or training, or lack of motivation to complete the desired tasks. Sometimes, the source of the problem behavior is constraints in procedures or resources.
Getting to the source of the problem is a detective’s job that includes observing the behavior, accurately and dispassionately describing the problem behavior, and asking the offenders why they are behaving the way they are. Doing the detective job well means establishing rapport with them so they are not put on the defensive. It also means talking to them in a way that makes them feel you are really trying to understand their view of the source of the problem behavior and not looking for ways to find fault and pin blame.
Example: Phil does not prioritize being on time (even though his boss does). He has a babysitter who is frequently late to arrive to take care of his infant son—making him late, in turn. Not: Phil is late frequently because he is lazy or unmotivated to work at his job.
Step 3 – Develop a plan for closing the gap that is satisfactory to both you and the person with the problem behavior. This should be a joint “solution seeking” session. Ideally such a session will include a clear definition of the gap behavior, an exploration of what the source of the problem behavior is, and a collaborative approach to developing corrective action. Also, there should be agreement to get together in several weeks to chart progress. Finally, there should be a discussion about what’s going to happen if the problem behavior continues.
Example: After speaking about Phil being tardy and Phil’s explanation of why, Phil’s boss explains that having his people show up on time is a priority. Phil tells his boss he understands the importance of being on time and will speak to his babysitter about getting there 30 minutes earlier each day to help keep him from arriving late. They agree to meet every two weeks to chart progress and that if he does not close the gap, he’ll be given a written warning and eventually let go. Not: Phil, be here on time or be fired.
Step 4 – Re-assess the behavior. Has the behavior changed in the wrong direction, the right direction or not at all?
This step is follow-up to the plan created in step 3 and can take place as frequently as needed. The warning here is that if you don’t want problem behavior to grow, don’t just address it once or twice and then ignore it whether it gets corrected or not. Nothing grows problem behavior like ignoring repeated offenses or even improvement!
Example: Phil shows up on time and his improved behavior is discussed with him every week for a quarter. Not: Phil continues to be late to work on a frequent basis. His being late is ignored and he feels it must be okay. Others start showing up late, as well.
Step 5 – Dispense consequences or rewards. This step is the opposite of ignoring problem behavior. It is a simple step conceptually but requires discipline to execute. Simply put, reward with praise and potential for greater responsibility, or punish with written warnings that lead to termination.
Example: Phil is praised for making the change that closed the gap in his behavior. Or, Phil is let go or re-assigned. Not: Phil’s lateness continues but his boss decides to wait until the annual review to discuss.
Confronting problem behavior is much easier if you can follow these five steps, in particular the step of determining the source of the problem behavior without making assumptions about why it is occurring. Most people want to perform well even if they need to be reminded what exactly that means….
For more information on confronting problem behavior see Crucial Confrontations by Kerry Patterson, Joseph Grenny, Ron McMillan and Al Switzler, McGraw-Hill (2005).
by Dr. Donald N. Sweet
Have you ever seen a business that reminds you of our Federal Government? I was at a management meeting of a business facing some difficult financial issues, not unlike our country in broad strokes? In these businesses, like in our country, the management meeting features two factions arguing with each other, protecting turf and constituents while seeming to forget about the health of the business.
When this happens in a business, we usually find that the organization has a very weak set of core values, if any at all. People on both sides of the table, or aisle, are only interested in what is good for their side. Long forgotten are the ideals that first brought them together. Gone are the memories of shared success during the growth periods. Personal and parochial agendas drive each side now.
When this happens in companies and red ink flows—like deficit spending in government–lending sources begin to dry up. It starts with borrowing becoming more expensive which causes higher deficits and the start of a downward spiral (aka: a death spiral). Often times lenders start to put demands on the organization and may go as far as requiring turnaround consultants being brought in to save the company.
Sometimes we may wish that would happen in Washington. From my doctoral dissertation research, turnaround consultants have three main levers to pull. First is changing the CEO, the leader who guided the ship into this mess. Second is selling any non-productive assets, property, buildings, equipment, stocks, etc. The final lever is expense reduction. Cash is king and it must be found and preserved.
This is where Washington can take a lesson from business. Minting money is not a solution to a financial crisis. Neither is gouging customers–tax payers. True, these “customers” may not have anyplace else to go in the near-term, but it is not a healthy long-term strategy.
How do organizations get in these difficult situations? We believe they lose sight of their core values. They forget how to work together, how to play well in the sandbox. Whatever the organization we are part of, we are only one part of a whole. When we start to identify with subgroups, operations, Republicans, sales, Democrats, we begin to lose sight of the purpose of the whole.
We find that when that happens the core values of, “continuous improvement”, “be terrific”, “always do the right thing”, “focus on the customer”, “our word is our bond”, etc. fall by the wayside. Core values are replaced by what’s best for my special interest group, not what is best for the entire organization. We need to continually guard against this happening and acknowledge that this tendency is as old as recorded history!
Continuous emphasis on the core values of the organization can help us overcome these issues. Good hiring practices tell us to hire people who have shown that they have our core values. Good management practices tell us to fire someone for violating one of our core values.
Verne Harnish of the Gazelles would caution us to have only a handful of these values. He further instructs us to repeat them over and again to ensure people continue to hear them. Of course, as leaders we must live those values, to model the way for others as Kouzes and Posner suggest.
Have a few core values. Communicate them continuously and effectively. Walk the talk. Hire people who share those values. Fire people who violate them. If we do that within our organizations our chances of success are greatly improved.
Can we do the same in our Government? What are our top five or six core values? They are the guiding light for our businesses. Why should that differ for our government? Should we enter into a national debate about the five or six things that are most important to us?
To be really core, values must be relatively few in number. When difficult decisions are to be made we should be looking to our core values to inform our deliberations. The Gazelles suggest that you only have five or six fundamental values. Too many and they lose their effectiveness. At the end of the day effectiveness is key for the team, the company, the party, the nation.
When operations and sales agree, the infighting falls away. The emphasis is put on the right issues, not what is best for my part of the team. At the end of the day we are all in this together. We believe Core Values are the glue that keep us together and and help us concentrate on the real problems and opportunities facing our organizations.
On September 22nd we will hold a workshop in Portsmouth on how best to capture the rewards of growing your company. We will host Mr. John Murphy, President of Atlantic Management Company, to speak about The Four Most Common and Effective Exit Transitions for Business Owners. See here for more information.
On October 13th we will co-host a workshop in Woburn, MA on how to grow a company by Mastering the Rockefeller Habits. This is an exceptional opportunity to get introduced to the Gazelles approach to growth (by Mastering the Rockefeller Habits) and take a giant step forward in planning and executing to achieve growth. See here for more information.
by Dr. Donald N. Sweet
Core values can put dollars on your bottom line! However, many of us have only paid lip service to core values in our businesses. Of course they’re important but there are so many more immediate things that need to be addressed. Sound familiar? I know I’ve had those thoughts in my businesses.
During those times, I was where what Stephen Covey calls the first quadrant of time management: the important and urgent quadrant, or quadrant 1. This is also known as fire-fighting. Core values work are in what Covey calls quadrant 2, important but not urgent.
You’ll recall Covey instructs us that the best way to stop all the fire-fighting is by spending some time on things that are important before they become urgent. Why would core values ever become urgent? They inform most all our decisions, even if we don’t know it. Our firm’s culture is shaped by them, even when they aren’t written down.
How can that happen, you ask? Every firm that doesn’t have written and communicated core values has implied values. Furthermore those values are interpreted differently by employees, customers, vendors and partners. Sounds like chaos, doesn’t it? That’s what quadrant 1, fire-fighting, often looks like.
Core values are quadrant 2 material. They are a small set of timeless guiding principles. Core values require no external justification; they have intrinsic value and importance to those inside the organization. They are the bedrock of company culture. If you don’t have core values written down and communicated there is a decision vacuum in the firm.
Core values inform who to hire: people who share the firm’s values. Who to fire: employees, vendors or customers, when your core values are violated. They also tell you when you need to take a financial hit for adhering to your values. Some of you will remember Johnson & Johnson’s decision to remove Tylenol from all retail shelves in the ‘80s. That cost them millions but it was the right decision and prompted by their core values.
Ralph Larsen, former CEO of Johnson & Johnson stated that, “The core values embodied in our credo might be a competitive advantage, but that is not why we have them. We have them because they define for us what we stand for, and we would hold them even if they became a competitive disadvantage in certain situations.”
In a recent HBR.org post by Rosanna M. Fiske titled “The Business of Communicating Values”, Ms. Fiske commented that the recent high profile scandals have made it clear that many businesses do not properly or openly communicate their values. That has both direct and indirect effects on their firm. This could be avoided, but not without some heavy lifting.
Having core values requires that they be communicated and lived by the leadership team on a daily basis. This is truly a quadrant 2 activity. When line people need to make a difficult decision on the spot, the core values they have learned and lived with will often point the way. Everyone in the firm has a clear basis for making difficult decisions.
When used as an integral part of the hiring practice they improve our probabilities of making the right hires. Everyone knows the enormous cost of mis-hires , starting with time and money spent hiring to training time and costs, to the agony of finally letting the mis-hire go, only to begin the process again. How much time and money is lost? Dr. Brad Smart estimates the cost of a mis-hire is between six and twenty-seven times their salary depending on their level in the organization.
Most of us have been down this path. Not only is it costly, it’s painful. Painful for us and our organizations. Using our core values as one of our filters can eliminate those candidates that just won’t fit in to our culture and our way of looking at the business world. Of course that doesn’t mean we just want to hire “yes” people, we don’t. But we do want people who share our values. There’s a big difference.
Teams that have the same values work better together. One of my mentors used to say that he would take a team that worked well together over a team of superstars any day. Employees feel better about coming to work when there is a shared culture. When we work well together we are more effective and take care of the customer better. At the end of the day, core values provide the foundation upon which to build a strong, profitable and vibrant company.
by: Dr. Donald N. Sweet
This past week I had a conversation with a former client and friend of ten+ years. We’ll call this friend, Tom, for purposes of this post. Tom runs a business with four locations in four states with over 100 employees. Recently he has run into cash problems because of a classic dilemma Mid-Market companies face – too few resources.
In Tom’s case, the problem was not initially too little cash, it was too few management resources. Tom and his management team embarked on two large capital projects at the same time. To compound the resource issue, both of these projects were over 100 miles from headquarters and in different states.
Individually, both projects made sense for the company to undertake. However together, they became too complex for the team to manage when coupled with the inherent business challenges that present themselves from time to time. This is a common error many Mid-Market companies make.
As the onion was peeled back a bit further, it was discovered that the company had suffered a weak Controller. The ripple effects of this held up calendar year end financial statements which are still not done and it is now late July! Probably even more damaging was the lack of any meaningful cash forecasting.
Tom’s company was careening down the hill without being able to see out the windshield, or even the rear view mirror. Meanwhile the management team was consumed with two major projects, their resulting issues, and running the business. They were hoping against hope there would not be a fender bender.
The first major accident happened last week when they ran out of raw materials when they were put on credit hold by a critical vendor. This shut down their production which in turn also shut down an important customer. As any CEO knows, this is one of the most deadly of business sins.
So now, on top of all of the other issues Tom’s management team faces, they have a credit crunch. As everyone knows who has weathered that situation, all issues now seem to become amplified. The Financial Statements from the outside accountant are at best a couple of weeks away. The bank loan extension is good for another five weeks and little cash relief is in sight.
Tom and his team will have to do their best to manage their way out of this serious issue, there are no silver bullets. That said, what are the major lessons the rest of us can take away from this dilemma? Mid-Market companies with limited resources need to be sure they don’t reach too far beyond their capabilities.
This does not mean that our organizations shouldn’t stretch themselves. That can be just as problematic as overreaching. That said, what are the three most important resources a Mid-Market company has? In this writers opinion, they are its people, cash and customers.
People rank first because without good people the other two don’t last long. People make all the decisions in a business. They then execute those decisions. Of course those two are joined at the hip. I once worked for a CEO who used to say give me a fair plan, well executed over an exceptional plan poorly executed any day. This CEO had similar things to say about management teams and their working well together.
At Vital Growth Consulting Group, we find that it is the people and, in particular, the management team that adds the most value to the business. Some of the questions that we ask, and suggest you do too, are as follows: Does the management team take good care of their employees? Do they consistently communicate the company direction clearly and concisely to all stakeholders? Do they work well together? Are they able to intensely debate major issues, get outside points of view, reach timely decisions and get everyone behind those decisions? Are they realistic about risks without being risk adverse? Do their skills, outlook and experiences complement each other?
When the answers to those questions are in the affirmative, the chances for success are much higher than when they aren’t. Just as in Tom’s situation, there are no silver bullets in any business venture. There are no absolute right and wrong answers. But Mid-Market companies can improve their probabilities of success, with limited resources, by making sure they have a strong, balanced and well-functioning management team.
See here for a recently published article on Motivation in the Workplace by Brad Lebo, Ph. D.
We at Vital Growth know that company culture is central to organizational effectiveness. Organizations can succeed with a poor culture but more often they fail or “fail to thrive.” The article below makes the case for attending to your company’s culture for the benefit of employees and the bottom line…
Does Corporate Culture Pay?
The Beryl Cos.’ CEO Paul Spiegelman argues that having a strong corporate culture makes smart business sense. See here for the full article.
Culture: It’s a word that often makes CFOs cringe because of the perception that it’s expensive. From my experience, it’s far more costly to do business without it. As CEO of The Beryl Cos., which specializes in managing patient interactions for hospitals, I’ve found that employee engagement through our unique corporate culture is what allowed us to move from a commodity to a business that doesn’t need to compete based upon price. Read More…
The days of the 100 plus page annual business plans have ended. Business dinosaurs might continue to produce them, but they won’t for long as they follow the original dinosaurs into oblivion. Let’s face it; in the old business planning process, which began by gathering data over the summer for next calendar year’s plan, was hopelessly out of date even while it was still in use.
How can we possibly know what will happen in detail some 15 months from now? We can’t. More importantly, how can we expect ALL our employees to know what the critical business elements are in all that paper? Again, we can’t.
The time has come to radically change your business planning model. A number of our clients are moving to a quarterly planning model using the Gazelles One Page Strategic Planning tool. This keeps their plan fresh and vibrant. It also allows them to take advantage of near term opportunities in the market place and, sometimes more importantly, respond real time to threats.
How does a company make the shift from the old sluggish business plan to a new more nimble process? At Vital Growth Consulting Group we have a migration path available for you and your company. As you can imagine, having a solid foundation in place is critical for the process to be effective. We believe that foundation, at a minimum, consists of Core Values, Brand Promise and BHAG (long term goal). Our thanks to Jim Collins for his work in this arena.
With those items in place and as your business base, you can then determine what next quarter’s priorities are. We find the best way to accomplish this is in a facilitated meeting with your management team. Having a handful of good minds batting around the business issues consistently provides the most robust solutions. Using an experienced facilitator/coach involved in the process provides both guidance and an outside business perspective. We suggest that you pick no more than five quarterly priorities and designate one as the top priority for that quarter.
We have all seen what happens when there are too many items on our “to do” list. Usually we try to knock the majority of items off them. Often times the completed ones are not the most important. The main items are usually big and/or difficult and require more time and effort than we have at any one point in time. So we consistently spend time getting the less valuable ones done. That’s human nature and it applies to the folks that work for us too.
Once the top five priorities and top one of five are agreed upon we must develop a plan to inform all employees. We want everyone in the company to understand the quarterly priorities so it is important to have, and execute, a robust communication plan. Some clients will try the process internally with the management team for a quarter or two to work out bugs before bringing in the entire team. Others jump in with both feet.
Of course for priorities to have teeth they must be specific, have one person responsible for getting them done (that person often has others to assist them) and have a target due date with regular progress reviews. Sometimes priorities require additional resources and occasionally they run into major obstacles. Regular top management review helps to overcome those issues.
We think of the Quarter as a thirteen week race. Arriving at the handful of important priorities every three months keeps your company focused on the most important matters. The BHAG provides you and your team with the compass reading so you can ensure that your quarterly priorities are always moving you north.
Take an important step toward making your company more nimble in this difficult economy. Get a leg up on your competition. Contact us at Vital Growth Consulting Group (www.vitalgrowthllc.com) to see how we can help you more effectively accomplish your goals.
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