Tuesday, April 20, 2010

The Ethics of "Poaching"

I read an interesting article this morning about the ethics of poaching; not hunting animals out of season, but rather the idea of specifically recruiting or targeting key talent that works for another organization typically a competitor.

I have to tell you that my initial reaction was "what"? As the article went on it did differentiate between specifically targeting an organization with the intention of undermining them through recruitment of their key talent or recruiting with the intent of obtaining trade secrets or proprietary information, but short of that indicated it was ok. Thanks for permission.

It kind of takes to thinking that our lexicon has gotten to the place where we really have started to believe phrases like human capital. One small problem, our employees don't "belong" to us. We "rent" their knowledge, skills, and behaviors and for a period of time if we are skilled and lucky we create a bond of mutual loyalty because of respect and commitment, period.

I think the timing is especially interesting now that it looks like the economy may be picking up. I see a lot of questions out there from organizations about what they should be doing about retention in the face of a more robust economy. I advise prayer. I am only being semi sarcastic. I am stunned by organizations who do not make investments in engaging and retaining employees on an ongoing basis and then want to install a program to fix it when there are issues.

Employment at will is a concept that most employers will defend with the ferocity of Charlton Heston over the right to keep and bear arms- as long as it is balanced in their favor. They don't like it when employees see themselves as free agents.

I hear a lot about loyalty as well. I define loyalty pretty simply. We interact with trust and respect. We meet our commitments to each other and we take into consideration our actions on the impact of the others in the organization when making decisions, period. Out in the Wild West where I grew up we called it "riding for the brand". While I was sleeping in your bunkhouse and eating your food I was present, you got my honest effort. There were no life contracts or pledges of fealty.

I guess I am a career poacher. When I see people who are really good at their jobs and whose skills might be transferable to an organization I work with or for I feel comfortable bringing to their attention that if they are interested in exploring options I would like to talk with them.

As you know I am a huge believer in the concept of engagement. I guess my model is the best way to keep your employees from being "poached" is to create an environment where they don't actively seek or entertain other options because of the relationship of mutual respect and trust you have created. If my employees find another opportunity that they feel meets their needs or provides them with a chance to expand a skill base I wish them well if it is the right opportunity. You see I have found ex employees to be one of my best sources of future employees, if I treated them well they remember it and share it with their friends and associates.

So I guess with the exceptions of targeting or attempting to take trade secrets we need to acknowledge there is no such thing as poaching. Mr. Lincoln freed the slaves well over 100 years ago, people can't "steal" something from us we never owned in the first place.....

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Tuesday, April 6, 2010

The "First" Engagement Initiative

Those of you who know me know that engagement, true engagement is an area or opportunity that I feel pretty strongly about (sorry Laurie). I think the emphasis is on true engagement. Engagement in my mind is defined as voluntary or discretionary effort that employees bring to their job everyday. True engagement is when that phenomenon spreads to your suppliers, your customers, and your community.

True engagement is accomplished using a number of tactics and strategies, but it is not a "program", it is a culture that lives everywhere not in HR. You don't accomplish it with pep rallies and reward and recognition programs by themselves. You build the culture and then you live it.

Another area that has intrigued me for a while and is taking on new dimensions in light of the health care debate is the relationship between personal competency and engagement. Personal competency is the stepchild key principle that was embedded into the original constitution, kind of a neglected cousin to personal property. Personal competency was the idea that each of us had the right and responsibility to manage our own futures, that we were not bound by our heritage or lineage. The key is the balance between right and responsibility. In a way doesn't that sound more like a partnership than a hierarchy? Doesn't that kind of sound like engagement in a way?

I have talked about personal competency at length and how to great extent with the coming of the Industrial Revolution a variety of forces combined so that we exchanged our personal competency for a kind of "corporate feudalism", we gave up our "equality" for security like corporate or organizational pension plans, health care benefits, etc. The industrialists were all about this model. Dumbing down skill sets and creating structures based on "compliance" is easier, in the short term. Our Founding Fathers were not real big on the concept of corporations, but that is another story.

When I look at our current situation as it relates to health care I see similar potential issues related to personal competency. I want to go on record as saying that I believe access to basic health care is a right that everyone should have access to, and I do mean everyone. The fact that we have one of the most advanced and expensive health care systems in the world and our morbidity and mortality rates put as at like number 30 is embarrassing to me (think countries like Cuba and Costa Rica). I also believe that access to basic care is good business and good for the overall economy. We are spending upwards of 10% of our GNP on health care on our "stellar" results and the number is getting bigger, not smaller. A big part of that is that people without access to preventative care get their care in ERs, the least efficient and most expensive way to provide it. Since they can't pay for it the costs get passed along to those who can pay, kind of like shrinkage in retail.

Here is another data point for you to consider. According to the American Medical Association sixty percent of health issues (and therefore costs) are related to lifestyle rather than hereditary. In plain terms that means we cause it! The issue is also that if I have not;
  • Participated meaningfully in paying for the costs of care for me and my dependents
  • Been provided with any meaningful information about what I or my dependents can do to improve my health or reduce expenses
  • Been incentivized to change my behavior
  • Been educated on the impact of escalating health care expenditures on other parts of the business

then the chances I am "invested" in making changes to my behavior are pretty minimal. No personal competence or engagement here folks!

As a former HR executive I can also tell you that most organizations strategy to deal with the rising costs of benefits is to;

  1. Cost shift to employees through higher deductibles, co pays, etc
  2. Reduce benefit offerings
  3. Eliminate categories of employees from coverage

Is it just me or do these methods seem to miss the root causes as well?

I am not going to belabor that point and make this about health care.

I guess my point is that maybe just maybe the Founding Fathers intended personal competency to be the first real engagement initiative. My personal engagement model is based on five elements:

  • Respect
  • Responsibility
  • Information
  • Equitable rewards
  • Mutual loyalty

Is it just me, or do there seem to be some parallels between that and personal competency? Maybe personal competency and true engagement are both about doing things with rather than to people ?

Were the Founding Fathers really that visionary, I wonder......?

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Sunday, March 28, 2010

I Hope You Dance

Sometimes when I need to clear my head I like to get in my car and go for a drive. Somewhere off the beaten track in the country or along the coast. When I do that I like to listen to music. I have absolutely no talent in that arena. I can't write music, play an instrument, or sing a note; but boy I appreciate good music. It tells a story.

As I was driving yesterday I had a chance to listen again to one of my favorite tunes I Hope You Dance by country star Leanne Womack. The setting of the song is a mother singing to her very young children about the things they will face and the choices they will encounter and her wish that "if you get the chance to sit it out or dance, I hope you dance." In the song she explores things like falling in love, staying true to your principles, and recognizing your relative place in the universe.

I think this is some of what people like Daniel Pink are referring to when they talk about flow, or when Seth Godin talks about each of pursuing our art. Flow as I have discussed previously is that spectacular place where our destination is clear, the balance between effort and result is in harmony and we have the autonomy to pursue of our own volition. I wonder if it was also this goal that the Founding Fathers meant when they talked about "the pursuit of happiness" and the concept of personal competency; that balance of the right and responsibility to be competent and self reliant.

As Ms. Rimes sings there is no guarantee built into this pursuit, it is the right and the decision to pursue the journey that is important.

I have to say when I read statistics that say that 55% of Americans are dissatisfied in their jobs, only 30% describe themselves as engaged, and we are spending $5 trillion on turnover and another $200 billion on "presenteeism" it doesn't sound like too many people are "dancing".

I wonder if creating engaged environments is a way to let people "dance"? I keep reading that clear expectations, respect, fairness and equity, and shared values are the keys to engagement and productivity. Is it just me or does this kind of sound like the "dancing" that both Leanne and the Founding Fathers had in mind?

What if those of us who build organizations or lead them built the opportunity to "dance" into our models? You know things like clear expectations, balanced feedback, autonomy, respect, and connection to something larger.

It seems to me that the Industrial Revolution, Frederick Taylor, and the Calvinist work ethic don't leave much room for "dancing". I think it is also okay for "dancing" to include work. Although I have seen dancers of all kinds demonstrate sprezzatura I recognize the practice and hard work that went into achieving that level of performance. It isn't for the faint hearted.

Maybe I have stretched my metaphors too broadly, but I have decided to heed Leanne's advice and look for my opportunities to "dance" and to encourage others to "dance" as well.

So I guess my wish for all of you is that "if you get the choice to sit it out or dance, I hope you dance"........

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Wednesday, March 24, 2010

Do Try This At Home!

I know for years we have encouraged people to think global and act local, but I want to explore a different paradigm with you.

As you know I am extremely passionate about the concept of creating engaged environments and strong employment brands. Often what I hear from people is " that's great Mark, but I am a small business with a small work force and small budget". The other thing I hear is "how"?

I came across a couple of pieces earlier this week that I thought were nothing short of brilliant in explaining both why and how this is relevant to small business.

Paul Mitchell, the brilliant Australian social scientist www.thehumanenterprise.com.au, shared some things that both resonated with me and were immediately applicable to businesses without regard to their size.
  • The first thing that Mitchell did was describe leadership in a simple, but very compelling way. A leader excites their followers to exceptional performance. This definition is especially relevant because performance and effort are what engagement is ultimately about. Not happiness, not "satisfaction", but performance. Those others factors maybe contributors, but at the end of the day we need results.

The next thing that Mitchell talked about were the four key elements that every business should build into their "value proposition":

  • Great leaders focus on followers. Mitchell and I share the belief that relationships are the "glue" in organizations. Truly effective leaders do things with people, not to people. With their employees, with their customers, with their suppliers, with their community.
  • Build a sense of community. Following that same theme leaders understand they are part of a community and they invest in it. They build and nurture relationships on a foundation of trust and respect. They exchange value and values not transactions.
  • Be yourself, but with more skill. Mitchell calls this authenticity. Everyone has allowable weaknesses, his point is to focus on your strengths and core competencies. Seek out other relationships internally and externally that complement your skill sets and offering.
  • Focus on what matters. Mitchell suggests that we look for significance in ourselves and others. Find what you and others do right and celebrate it whether they are an employee, a customer, a neighbor, or a stranger. Connect them to the larger community and the larger context. We are a village, not an island.
  • Build the excitement. There is an old amusing expression "if you are excited, you might want to let your face know". This speaks precisely to Mitchell's earlier definition of leadership. Be excited and share excitement. If you are not excited and don't believe in "you", how can you expect others to?

Added to this wisdom from over the "pond" I had a chance to see some results from the national survey and initiative on engagement from the U.K. that showed similar things. The country wide study found that there are four elements that build and sustain the engaged environment:

  • Listening
  • Treatment
  • Coaching
  • Role and role modeling

Once again it comes down to relationship. Listening and treatment speaks to my guiding principle of respect. Coaching and role speak to the principle of the big picture and autonomy. Role modeling speaks to authenticity and values. The British study also found that when leadership commits to these behaviors they become "viral", they spread through the organization both formally and informally.

By the way they did examine compensation as well and what they found was again consistent. Money may initially attract, but the most important qualities of compensation are perceived equity and fairness. So the short story is if you do compensation well it is a break even, it won't detract from engagement. If you do it badly it will destroy your foundation. Once again we see the tie back to relationship that once we get past survival mode it is about fairness and equity, not dollars.

So when you think about building and reinforcing your brand, be sure you include these elements. The interesting thing is you don't need a big budget or large staff and yes, you can do this at home......

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Sunday, January 31, 2010

Doing "What Matters"

I had the opportunity to attend another brilliant presentation this last week by a man I admire a great deal, president emeritus of the University of Oregon, Dave Frohnmayer. Although President Frohnmayer may be best known for the 15 years he spent as university president he can also list Dean of the U of O school of law, Oregon Attorney General, state legislator, and Rhodes scholar. A true renaissance man.

He was speaking to a combined group of community leaders and "aspiring" leaders in the form of students from a local private university. Much of what he said resonated with me, but there were particular aspects of his presentation that really struck me.

One of the most interesting themes he discussed was our evolution as people, especially those of us who aspire to lead or manage others. He said that as we are young and we begin our careers we start with the question-
What do I want to do with my career?
We hear this question and discussion a lot from young people; how do I best manage my "career"?

The next evolution he describes is the place where we ask the question-
What do I find fulfilling or meaningful?
I know I have certainly spent some time pondering that question and I rather suspect that I am not alone.

The last question or stage was the challenge he put to those who lead-
What matters?
The point of this question is that we move beyond the "I" and begin to examine our contributions in the larger context of society and the world. It is an interesting point. Should we have people in leadership roles that haven't evolved to that place?

The other part of what he discussed particularly resonated with me; he encouraged everyone, but especially leaders to see themselves and others in terms of their whole personhood. Some of you know this is a familiar place for me.

He referred to people as diverse as Jung and Machiavelli as recognizing that we all carry a "shadow side" and that the most effective leaders recognize this in themselves and others. They don't try to deny it, they incorporate it in their leadership style and acknowledge it in others. They have people around them whom they trust and have the courage to point out to them when this "shadow" becomes a detriment rather than an asset or neutral. He also talked about how the recognition and "mastery" of your shadow elements is evolutionary and occurs over time.

When I first entered the work force like President Frohnmayer suggested I spent much of my time focusing on my "career". Now that I have had three or four "careers" I recognize that a career is a journey you to a certain extent look back on rather than plan.

I have found for me personally that the second and third questions have intertwined. I believe passionately that a different way of people relating to each other in organizational settings is better for the individual, the organization, and society in general. In my case that model is what we now call engagement or employment branding.

Those of you familiar with me also know about my fascination with "Whole People", my belief that this idea of partitioning people off in the "work self" and personal self is ineffective and kind of silly.

The last JFHF3HCJD6FE few years have been an interesting part of my personal journey so I found it somewhat validating to hear from someone I respect that perhaps I am not doing it "wrong" after all.

So what I would leave you with are two questions-
  • Have you determined what matters to you?
  • If you answer yes are you pursuing it, and if no do you have a plan to change that?

Look forward to hearing from you.....

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Tuesday, August 4, 2009

So You Want To Be A Leader?

This is actually the topic of a presentation that I used to do for our local Chamber of Commerce leadership development program as the last chapter of an eight month development program. Our intent was to send them out with both a sense of empowerment and accountability to something larger than themselves and their companies.

I among others have had the opportunity to discuss and debate what differentiates leadership and management on the "pages" of this blog, linkedin, and a number of other venues as have thousands of others smarter than me.

I ran across a summary of an interview with Robert Dolan, Dean of the Ross School of Business at the University of Michigan, on BNET that I think summarized it it more succinctly than I have ever seen or heard before. He stated, "a manager maintains the status quo and delivers profitability, a leader performs three essential functions-
  • they develop and encourage great talent merely with their presence
  • they see new opportunities and innovations and push the organization to pursue them
  • they act as a moral compass for the organization and role model the appropriate adoption of the organizational values and principles."

We can argue for decades about all of the other characteristics and attributes, but what I really like about Dolan's point is that they describe action and doing rather than passivity.

I found this summary especially timely because I hear the media and others starting to declare that the recession is "over". It is over because the stock market is moving up and large corporations are starting to declare profits again. I guess the fact that they expect unemployment to remain in double digits for the foreseeable future and that we have a health care crisis represents a rounding error. Not to me.

I like to think of myself as a realistic optimist. I was hoping that the recession would serve as kind of a national wake up call on a number of key societal issues. As anyone who has read my blog, my book, or other publications knows I am a big fan of engagement, true engagement. That is a system where stakeholders align in a common purpose. Studies show that organizations who adopt and maintain engagement strategies outperform their competitors in every key dimension. I was hoping the recession would cause more organizations to recognize that engagement is not only necessary, it is good for business.

I still remain hopeful that the "end" of the recession doesn't mean we think we have solved the health care issue. We have a very expensive system that delivers health care inefficiently and with pretty poor outcomes.

I am also a fan of personal competency. Getting away from the corporate and governmental codependency that has dominated our economic model for the last several generations. Employees need to be given an opportunity to engage and in return they need to be educated and expected to play a role in decisions about their health, their long term economic security, and generally be financially literate.

Much of the debate around leadership is whether leaders are born or "taught". Is it a series of characteristics or traits or is it behavior? I kind of like the behavior model. If you have capacity and you don't do anything with it are you really a leader? I think that is similar to the point Malcolm Gladwell made in Outliers, a high IQ in and of itself is no guarantee of spectacular success either personally or professionally, you must apply it.

When I look at where we got to and how we got there I have to tell you I see a lot more people in business and government who are managers- protecting the status quo and profitability; than leaders, individuals who develop deep talent, challenge their organizations to innovate, and act as moral compasses and role models not only internally, but externally.

Even the debate over health care represents an interesting model; we recognize it is compromised, but we seem (at least our "leadership") to embrace significant change in a model that doesn't work in delivering against key performance measurements.

I heard earlier this week that the performance bonuses paid out by the major financial institutions exceeded their recorded profits. Am I the only one who missed the logic of that decision?

How can we declare the recession is ending with record unemployment?

So for me I like Professor Dolan's definition of leadership. To his three characteristics I would add two more of my own:

  • Come to work every day prepared to be fired for doing the right thing.
  • Think about your "legacy", what you leave behind more than your "career", what you take with you.

It would appear to me that if you choose leadership rather than management as defined by Dr. Dolan you might not find the field nearly as crowded. What do you think?

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Friday, July 17, 2009

A "Healthy" Debate

I have been following the discussion and debate around our health care crisis and alternative solutions with particular interest. As a human resources practitioner and consultant I have probably been involved with health care in one fashion or another for thirty years.

The discussion of whether or not we should have a national plan is particularly interesting, as is the general debate on where the "fault" is for where we are at today.

I used the word crisis because I believe we really do have a crisis. Although I think we have some of the most sophisticated systems and processes in the world we have huge issues with our delivery system. It is also interesting to me how little the average person understands or aspires to understand the health care system.

I had a chance to listen to a HBR (Harvard Business Review) Idea Cast with Dr. Richard Bohmer the other day. It was probably one of the most succinct discussions of the issues with health care that I have heard in years. Dr. Bohmer points out that there are really are three major issues with our health care system in his mind: how we define a service, how we finance health care, and how we deliver health care. I found his discussion really valuable. He also gives a great explanation of the difference between managing health care which deals with defining and delivering services as opposed to "managed care" which he refers to as an insurance or financing model. I won't bore you with all the details, but I will tell you it is a value added 13 minutes to listen to his interview.

Health care is delivered and defined in his opinion currently as a series of separate events beginning with diagnosis and then proceeding through treatment and "follow up". He argues that health care delivery and costing should be based on outcomes rather than the way we currently track and price it. It is kind of like lean manufacturing or total quality; success is determined by outcome not process.

What I found interesting is most of the debate I hear is about providing access to care and financing, I hear very little about outcomes.

The other thing I find I hear very little about is the individuals responsibility in their health care. I don't mean just paying for it, I mean accountability for lifestyle choices and related activities that directly and indirectly affect health care costs.

Most of us have historically had our health care provided through our employer, our spouses employer, or in some cases the government. We pay a fraction of the real cost and understand the way it works like we understand Cantonese. The insurance industry doesn't make it much easier. For years health care was considered like paid time off a "fringe benefit". Then we noticed that the cost of that particular fringe benefit continued to go up at double digit rates long after wage inflation receded. By that time we had created an entitlement.

When this becomes particularly interesting is when we start to track connections. Jeffrey Pfeffer of Stanford believes (and I agree) that much of our health care related costs connect directly or indirectly to our work environment. If you are stressed about your job it effects your health. If you are stressed about your home life it effects your work. Some studies say it costs us $200 billion annually! In a shaky economy when you are concerned about losing your job and your health care benefits the problem accelerates.

I also believe at least at this stage there is little about personal accountability in health care delivery. We are suing Big Tobacco successfully for misleading advertising and withholding information about the addictive and health risks of smoking, but we are reluctant to reduce or deny care to smokers.

We want to label the calorie content in food, but do we want to deny or reduce coverage to those who have bad eating or exercise habits? Are we ready for employers to require wellness programs and screening as a function of company provided health care insurance?

Do companies educate their employees about things they can do to affect their health and the companies costs? Not many in my experience. Should we allow "tiered" coverage for people who deliberately practice behaviors that could or actually affect their health?

I don't mean to imply that as Dr. Bohmer points out "fixing" health care is a complicated issue, but should we be addressing personal accountability along with delivery, definition, and financing?r

To me this speaks of respect, engagement, and personal competency. What do you think?

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Friday, July 3, 2009

The Power Of Relationships

As you all know I agree with Margaret Wheatley that the most important influence in organizations is relationships; not systems, not technology, but relationships.

I had the occasion to join a friend last evening with a friend and colleague of his I hadn't previously met. I found his friend to be charming, personable and very articulate. As our discussion turned to the inevitable " so what business are you in", he said that he worked for an organization that distributes a pharmaceutical type of product that is manufactured in Europe. What was especially interesting was that he shared their "distribution" network was almost exclusively based on relationship selling; no large sales force , no "cold calling". It is based on trust and referral.

A week or so ago I mentioned an article by Jeffrey Pfeffer of Stanford. He opined that much of the issue with health care in the United States is in many ways relationship based; most Americans rely on their employer for health care and for economic security. Compared to other countries our "safety net" is pretty small. He talked about the effects of stress about their employment and the accompanying systems like health care tied to employment and the direct correlation to health care issues. I agree with him.

I read some articles and listened to a couple of "idea casts" on BNET this week that illustrated the same thing from a different angle- the relationship between employees and leaders and how in these times especially employees watch their leaders for any sign of positive or negative events or signs. They do that normally, but in these times it is exacerbated to the nth degree. Marcus Buckingham says the most important attribute of leadership is clarity- people want to believe their leaders have a vision.

My own personal research validates information published by Peppers and Rogers, BlessingWhite, Gallup, and others about the power of engagement. I am talking about true engagement which includes customer, employee, shareholder, and stakeholder. Organization's with high engagement outperform their competitors consistently and by an order of magnitude. Engagement is about relationships.

I have written and spoken a lot lately about social networks and their increasing importance in communications strategy. I believe that social networking is about relationships.

I have also written and spoken about the "social contract". In historical times the poor were tied to the wealthy. They literally "belonged" to the property or estate for hundreds of years. The American "experiment" was all about eliminating that. You could come here and reinvent yourself.
You could homestead a piece of property of start a business. Then we ran out of frontier. Consistent with the rest of the world the Industrial revolution occurred. We exchanged the value of personal competence for the promise of "security" in return for "obedience" The power of the great capitalist was tempered only by the labor movement. That was about relationships,
however dysfunctional.

The "world" economy changed that social contract. American industry was not always dominant, our quality suffered and correspondingly so did our market share. Interestingly much of the "new" management models like lean manufacturing and TQM have very strong relationship components to them. U.S. companies retreated from economic security in return for "loyalty". Traditional pension plans are almost obsolete. The parental relationship between employers and employed relative to health care is in crisis mode. Our health care model is parental. We don't address root causes of costs, we shift them around. People don't want to share responsibility for their health or the costs of treating them. That is a relationship, although another dysfunctional one.

I am not suggesting that a "parental" model is appropriate. Anybody that has ever heard me speak, worked with me, or read any of my writing knows better. I rather like the concept of "personal competence" and relationships founded on mutual respect and honesty between employer and employed, taxpayer and government, supplier and customer, and individuals. A relationship based on respect, information, and mutual responsibility and built on a foundation of trust. Maybe I am just nostalgic or misguided, but I think that is what the Founding Fathers meant so many years ago when they formed this country.

Tomorrow is Independence Day, maybe a good day to reflect on what they meant and the critical relationships in each of our lives. I think that is what I'll do, how about you?

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Wednesday, June 3, 2009

A Matter of Balance

The power of language intrigues me. I participate in a group of people much smarter than I am in trying to re-shape how we define words and their context and the effect that has on perception and understanding. I find it plays an enormous role in many applications, but the place that intrigues me the most is in the arena of leadership.

As many of you know I am an enormous proponent of engagement as a cultural norm. I feel that organizations where the inter linked relationships are based on shared values, respect, and a common vision and goals will always be more successful than a transaction based relationship. I also differentiate true engagement; which involves employees, customers, and shareholders, from engagement models that focus exclusively on "loyal" customers.

The Sotomayor nomination has created an interesting debate regarding the appropriateness of empathy in the judiciary. Should a jurist consider context and circumstances in rendering a decision or merely the "facts"?

I used that as the basis for a question I posed on LinkedIn as to the appropriateness of empathy not only in the judicial system , but to the essence of leadership. Is empathy an essential or at least important characteristic in effective leadership? The vast majority of the responders agreed that it is, but there was some dissent arguing that empathy can cause decisions to be made on the basis of emotion or disparate consideration for the interests of one "stakeholder" group over another.

I think we are finding much about our "objective" models that are based exclusively upon numbers and singular shareholder groups is flawed. I mentioned in a previous blog that Bill George of Harvard stated that a possible positive outcome of the current crisis is a new "balanced" model. Even more recently Richard Rumelt of UCLA mentioned in an interview with McKinsey that much of our current circumstance was based on reliance exclusively or primarily on short term "numbers" and indices that don't tell the whole story.

Another interesting debate is whether or not organizations should focus their efforts on shareholder satisfaction or stakeholder satisfaction. As you might suspect my perception is that organization who focus exclusively on shareholder value rarely maintain sustained success. I would submit that much of our current financial crisis is predicated on focusing on the value to the shareholder as represented by stock price to the exclusion of other stakeholder values. I have seen debates on LinkedIn and other venues insisting that shareholder value is the primary or exclusive measure of organizational success, but if you ignore or minimize the interests of the other stakeholder groups how do you stay in business?

In the past week I had a great conversation with a colleague who is trying to "re-invent" the practice of human resources management. Like me she is concerned that HR has become overly concerned with policy and procedure and systems rather than "people". We want to ignore or minimize the human element. Organizations are staffed by people.

I have another colleague who works in the area of trust. She has become frustrated occasionally with potential clients who don't particularly value strategies and systems to build and sustain trust with their customers, suppliers, or employees. They are not sure they can track a direct correlation to the bottom line. Hmm, sounds like a shareholder versus stakeholder issue.

Yet another colleague has designed a management system she calls KindExcellence(TM). Her belief (and I share it) is that kindness and excellence are not a polarity, but rather an axis. You need both to operate as an effective leader.

In my model responsibility and respect form a similar axis. If you allow someone to perform in a manner that doesn't live up to your expectations or their capabilities is that truly a respected based relationship?

I guess at the end of the day I agree with Margaret Wheatley that the most powerful force in organizational systems is relationships. These other elements are important as long as they are kept in "balance".

I think I will continue to endeavor to manage "whole people" and to include empathy in my decision making model. I particularly like the way a Buddhist philosopher put it in a quote a colleague shared with me.

"A person who cannot genuinely empathize with others can never excel as a leader. So much of what ails society today is the result of too many people in leadership positions who do not or cannot identify with the plight of their fellow men and women. It is in enduring pain and struggles that the earth of our humanity is cultivated. And it is from this earth that a capacity to be genuinely concerned for the welfare of others blossoms." - Daisaku Ikeda.

I think that sounds like balance......

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Wednesday, April 1, 2009

Brands, Lighthouses, and other Icons

Inside my empty bottle I was constructing a lighthouse while all the others were making ships”
Charles Simic

Last week as I mentioned in this blog I had a chance to talk with my sister in law; a very talented communications professional, about iconic brands, connections and related concepts.

We talked about what creates an iconic brand, she felt the elements include among other things:

A defining brand truth. Think about the concept of a defining brand truth. It articulates value statement not only to your customers, but also to your employees. It allows them to commit rather than merely comply.

  • A set of in transient principles. Great brands refuse to compromise on their principles. They may change a process or a look, but they retain their essence. What they represent is foundational and consistent.
  • Great brands are iconic. Think about great brands. Brands like Porsche, Mercedes, Xerox, Kleenex, McDonald's, Starbucks and others. They are a benchmark. Their "brand" is instantly recognizable.
  • They create and reinforce an experience. Think about that. Great brands literally create expectancy. You don't just go there or dine there; you experience them in a variety of ways.
  • They are inspirational and aspirational. As we have talked about with the new definition of engagement a great brand creates a pride of affiliation. Employees and customers take pride in their association with the organization; they champion the product or brand. They become benchmarks.
  • Great brands are enduring. They continue to deliver value to their stakeholders; shareholder, employee and community.

We posted our thoughts on the popular social networking site and got some terrific insights and opinions from others as well. They ranged from brand as promise, to brand as purely a marketing tool or tactic. I think there is room for both.

There were also some interesting discussions about whether organizations start out striving to create an iconic brand, or iconic brands happen over time. I believe that iconic brands are deliberate. The “crafter” starts with a premise rather than just a product. I don’t think that can be created by a group of marketing professionals alone, no matter how talented. It must be planned and systemic. I also see a convergence between iconic brands and true engagement.
If you examine some of the things I have discussed previously in my writing about true engagement you come across Pepper and Rogers definition of the old engagement model: the intellectual, behavioral, and emotional model. At the intellectual level people (your employees and hopefully your customers) agree with your vision statement or brand premise. At the behavioral level they start to operate with a sense of brand loyalty, they seek out your product or service. At the emotional level they go further; they recommend you to friends and family.
Pepper and Rogers go on to describe new levels: the levels of best product or service, and the pride of association. To me that describes being a benchmark, and finally achieving almost cult like status. Does every brand seek or achieve that level- no, but I would submit that is what differentiates an iconic brand from a regular brand. Do we really believe that just happens coincidentally? Or that the marketing department can create that kind of affiliation by itself?
Pepper and Rogers also describe that this true engagement can only be built upon a foundation of trust, and that you will never enjoy greater engagement from your customers than you enjoy from your employees.
To be iconic, both your employees and your customers must trust you and what your brand represents. They go further indicating that a 2003 survey indicated that outstanding service represented the compelling “buying” decision in 51% of the consumers surveyed and over 80% indicated they would terminate a relationship because of a bad experience. So to a great extent your employees are your brand.
Is it just me or do you notice a significant degree of correlation between my sister in law’s elements of a great brand and Pepper and Rogers description of the elements of engagement? They both require a huge investment in developing and nurturing relationships.
You might be asking yourself – where are you going with this? Okay, I’ll get to my point. Our future is dependent on trust based relationships; not technology, not product innovation, but relationships.
I want to explore that through a couple of different avenues.

Exploring Engagement
In my last “corporate” job I was an executive with a financial services organization. As a credit union we really felt like we owned the market on the relationship thing. Credit unions like to point out- we are member owned. We have members, not customers. I remember being told we have 90,000 members. Being an outsider and therefore not very bright I asked – “how do we define members?” Boy, did that cause a shit storm!
It turned out that we defined “member” essentially as anyone who had an account with us. We were pretty bummed out when we applied metrics closer to the ones espoused by Pepper and Rogers and found out most of our members were not members at all, they were customers, and frankly not all that engaged.

We spent almost three and a half years developing and implementing an engagement strategy. It included all the elements that are included in both Pepper and Rogers and my sister’s model. We built it from the inside out. At least for a period of time we enjoyed the fruits of that endeavor, we went beyond a financial organization to creating true engagement with the financial metrics to validate our claim. I won’t bore you with the details. If you are interested they are available in my previous white paper- New Paradigm for Credit Unions. I can’t say whether they have transcended the boundary to iconic or merely enjoyed an interlude. That is for others to judge.
One of the other models I would like to examine is my sister in law’s iconic brand. I won’t specifically identify it, but I assure you, you would immediately recognize it. They have taken it beyond a beverage to creating affiliation and brand loyalty. They aspire to do that with other brands they own and manage. They are doing that through a systemic multi faceted approach that includes both external and internal branding.

A Call for a New Leadership Foundation
In the credit union industry and in fact across financial services we have looked for our “leadership” and new strategies to come from two primary areas- finance and operations. I think if you were to examine the career paths of the vast majority of CEOs in both banking and credit unions you would find that one of those disciplines represents their career path. In fact as a culture I think the U.S. is much more comfortable with leaders coming from these “hard” disciplines. We revere technology and product. We tend to shy away from relationship based strategies. Our labor relations legal infrastructure is in fact one of the most archaic and adversarial in the developed world.

Our top business schools also tend to focus much more on “operational” and financial skills rather than communications and the skills around building trust and engagement. Current headlines are screaming that the MBA degree is largely responsible for the current financial crisis and demise of so much of our economy. How interesting that we absolve ourselves of any responsibility for reinforcing that culture through our hiring and succession planning activities.

I will go out on a limb and make myself even more unpopular by stating that much of what we teach would it in what my colleague Ty Warren would describe as “mapping” skills. We claim to revere leadership, but we teach and reinforce mapping.

I have found that most traditional approaches to engagement are focused almost exclusively externally. We measure customer reaction, loyalty, and satisfaction. We spend billions in crafting marketing campaigns and strategies to capture them. I also find it interesting that the first two areas that organizations usually cut in financially stressful times are marketing and training- the relationship building things.
A few years ago I took a position that the most important “management” functions in organizations were going to be marketing and human resources management. I stand by that premise today and I would like to take through my argument as to how true engagement represents the appropriate hybrid of both disciplines.

A New Solution
It is easy to blame the unions or the business schools for where we are and how we got there, but the real issue is the American labor relations model which requires the negotiation on the effects of technology, but not its implementation and the traditional model of capitalism which rewards the shareholder at the expense of the stakeholder. Both are both huge contributing factors. I would submit that the codependency that accompanied moving from an agrarian to an industrial society contributed as well. We abandoned personal competency. The model almost makes engagement in that setting impossible.
It is still interesting for me today to talk with employers and individuals about the “systems” that are going to facilitate our recovery from the current recession. We are still looking for a technological solution rather than a relationship based solution.

My friends Pepper and Rogers say that organizations that successfully embrace an integrated engagement strategy enjoy competitive advantages in three key areas: Productivity, Performance, and Sustainability. I don’t know about you, but those represent my big three! The advantages are in the personal commitment that each person makes to the goals of the organization, not their technological superiority.
Now let’s examine the critically of the integrated solution. My colleagues in marketing play a critical role in building the baseline of engagement. They gather the information regarding the needs and desires of the served and un-served customer base. They report on our ability to interpret the customer’s requirements and meet or exceed their expectations. They identify the potential opportunities and create the framework for the trust between customer and vendor.

Let’s talk about what they can’t do by themselves. An earlier quote said,”to your customers, your employees are the brand.”

A quote from the Harvard Business Review puts it even more succinctly –
Too many organizations focus on what customers think – to the exclusion of what employees think. Companies are more likely to be growing if employee’s opinions of the company are better than customers’.”

Guess what, your marketing department can do a great job crafting and shaping your brand, but your management team has to make it real at the individual level.

How important is the manager you ask? Well, that same HBR article puts it this way-
“One bad manager can pollute multiple levels of an organization, and poor management brings down employee morale, which spills over into the engagement level of customers.”
James L. Heskett, one of the authors of the Service Profit Chain says “….But it also requires actions. That is when managers are not managing by the values and cannot be admonished or retrained to do so (which rarely works), they have to go.”

Before you delegate this to Human Resources you need to stop and recognize that this is a systemic issue. In short this is a leadership issue. Too many times I see Marketing or Human Resources being put “in charge” of these initiatives. That is corporate speak for nobody else wants to manage it and address the fact that we may have to make real changes.
I can’t tell you how many times in my career I have seen organizations tolerate management performance that is unacceptable. I hear “He’s really a great manager except for the people thing.” Guess what, the people thing is at the core of engagement.

If we look at the failure of the financial institutions and the automotive industry I believe we will find that the key mistakes were made in these areas of engagement and leadership. It was not technology that failed us, it was people.

So I would challenge you to examine the elements of those sustainable brands and my Compliance to Commitment model™. I would submit you are going to find several common elements:
· They are about congruency.
· They are about clarity.
· They are experiential.
· They are shared by people.
· They are systemic and synergistic.
· They are built on the same foundation, the foundation of trust.

There is no magic solution to the times that we find ourselves in. I believe that only through creating and reinforcing models that incorporate trust, communications, personal competency, and personal accountability at every level will be find our way to a new model.

Melanie and I have chosen to build lighthouses. They don’t chart your path, they light your way. Each person has to plot their own course, but by creating a lighthouse you expose the rocks and the shoals.
We agree with Marcus Buckingham-
Today’s most respected and successful leaders are able to transform fear of the unknown into clear visions of whom to serve, core strengths to leverage and actions to take. They enable us to pierce the veil of complexity and identify the single best vantage point from which to examine our complex roles. Only then can we take clear, decisive action.
Effective leaders don’t have to be passionate. They don’t have to be charming. They don’t have to be brilliant…They don’t have to be great speakers. What they must be is clear.”

Isn’t it time to explore a new model before we lose another “icon”?
Commitment is the act of being physically, psychologically, and emotionally impelled. It means that employees gladly give up other options.”
Ken Matejka, Why This Horse Won’t Drink, 1991

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