Executive Skills in the "New" Economy - newly minted MBAs (and others) take note!

A colleague of mine provided this article that he found on the web. I thought it would be important reading for any executive who is struggling with managing people under the current economic reality.

The hard work of soft skills

15 March, 2009
By Dr. Carol Kinsey Goman, HR Columnist, Troy Media Corporation

At a claim office of about 125 employees, the head of Human Resources spent the day observing the local manager. Not only had the office ranked high on productivity, but this particular manager had received fantastic feedback on her company's Leadership Measurement survey. So the HR executive was curious to watch her interact with employees to figure out what generated this great response.

As they walked through the office, conversing about the normal work conditions, the manager would often stop and refer to specific individuals: "Steve over there has been in our area for 15 years. Steve also coaches Little League. They won their game last Thursday."

Then they'd move on to someone else, and as they left that person's area, quietly the manager would say, "Sally had some problems with her daughter this year. You know how difficult teenagers can be. We've had many sessions behind closed doors where Sally's trying to sort through these problems."

Months later, when I interviewed the HR executive, that day at the claim office was still etched in her mind. "It became apparent to me," she explained, "that this manager knew all of her people. And I don't mean just knew their jobs. She knew each individual - their backgrounds and hobbies, what their concerns were, what got them excited. She knew when they were upbeat because things were going well, and she knew when they were struggling and needed her time and attention. I asked her how on earth she could do this for 125 people. Her response: 'That's my job.'"

Great leaders understand that you can't pay people to excel. You can only pay them to show up. But once you've got them there, the leader's job is to encourage people to excel by creating an atmosphere of caring, trust and inclusion. Sun Tzu, author of the Chinese "The Art of War" put it this way: "Regard your soldiers as your own children, and they will follow you into the deepest valleys. Treat them as your own beloved sons, and they will be with you even unto death."

As an expert on the "human side" of organizational change, I have been a guest on hundreds of radio call-in programs over the past several years, but I especially remember one in the Northwest, when an unusual number of disgruntled employees were phoning in with corporate "horror stories."

People complained about being unappreciated and overlooked. They spoke of callous treatment from uncaring bosses, and reported that they worked for organizations "just interested in making a buck." For the entire hour, calls followed the same line. Finally, in genuine disgust, the interviewer said to me: "The principles you're giving us sound so simple, why aren't more managers following them?"

I didn't have to think twice about my reply: "With all the diet books on the market, why aren't we all thin and trim? What could be simpler than reducing calories and increasing exercise?"

The answer to my question and his is the same. Things that are simple are not necessarily easy.

My work has enabled me to deal with business leaders around the world, and not once have I encountered a boss who despised all his or her employees. On the contrary, the leaders I've met were genuinely concerned about the well-being of people who reported to them. (Even the occasional leader whose only focus was on the bottom line understood that the best way to increase profits was to build the commitment of talented employees.) When you think of the qualities that leaders need to encourage in their employees -- responsibility, creativity, caring, commitment -- you can see why coercion or manipulation just doesn't work. The leaders who influence us the most are those who understand that engagement and productivity are not about rules, regulations, and rewards -- or the struggle to keep people "in line."

In general, it's the soft skills of leadership that are paramount. Leaders (and their organizations) won't succeed without a genuine caring about people and the ability to develop and nurture interpersonal relationships.

This is something that the MBA industry is grappling with today. Many business schools are revisiting their offerings to see if they still have relevance in the 21st century. Consider Harvard Business School, the blue-chip brand of all MBA programs, which used 2008 (its centennial year) to convene worldwide experts on business education and plot its directions for the next 100 years.

The results: Deans and recruiters said that MBAs in general needed better communication skills, increased self-awareness and an enhanced capacity for introspection and empathy. HBS is now looking at several change proposals, among them a program to develop various soft skills in its students.
Isn't that simple?

Not easy, mind you, But simple.

Carol Kinsey Goman, Ph.D., is an author and keynote speaker who addresses association, government, and business audiences around the world. Carol is the author of 10 business books. Her latest is THE NONVERBAL ADVANTAGE - Secrets and Science of Body Language at Work.

Start Up the Risk Takers

It seems that Thomas L. Friedman, the economist and author of The World is Flat, agrees with the premise in my 21 December blog post on bailing out the auto industry. In his op ed in the New York Times published on 21 Feb 2009, Mr. Friedman suggested that it would be better to invest this money in startups than with the zombie auto industry. Great minds think alike (or he read this blog first).

For his column please see: Start Up The Risk-Takers

Bring on The Entrepreneurs - It's Time!

The difference between the great and good societies and the regressing, deteriorating societies is largely in terms of the entrepreneurial opportunity and the number of such people in the society. I think everyone would agree that the most valuable 100 people to bring into a deteriorating society would not be 100 chemists, or politicians, or professors, or engineers, but rather 100 entrepreneurs.

Abraham Maslow

Seems like its high time to bring in the entrepreneurs in America!

Business Debriefing

Many years ago, I became acquainted with the CEO of a storied software publisher. Bill Goodhew had recently taken over as CEO of Peachtree Software in a management buy-out. While Peachtree had the pedigree of being one of (if not) the first personal computer based accounting software packages, it had never made a profit. Peachtree was sold to Management Science America (MSA), an early mainframe software company, and during their tenure as owners, the division still did not make any money. Bill and his management team took it over, drastically reduced the price of the software, and marketed it predominantly using direct response advertising.

While that seemed very extraordinary at the time, Bill filled me in on his seemingly simple strategy. He selected three different advertising placements, all with coded responses, so he always knew which was producing the results. He continued these for some set period of time and then would pick the one that worked the best and double its frequency. The one that was the worst, he discontinued. And the other, he continued as it was. He also added one more publication and tried that.
Interestingly enough, using this strategy and the much lower price, Peachtree’s owner-management team made money for the first time in the company’s history. Bill made it very clear that he was no marketing genius. In fact, Bill seldom guessed correctly in advance which advertising placement would work. However, after receiving the results, he was in a perfect position to learn and adjust.

The lesson I learned from Bill’s strategy expanded well beyond advertising and marketing. What this taught me was the value of feedback. Learn & Adjust - that idea has lived with me for the several decades since our encounter.

Every business process can benefit from this concept of learn & adjust. None of us is smart enough to predict the actual results of our actions. But assuming we have a clear and available way to listen to the results of our actions, treat them as objective data – free from our personal prejudices, and be willing to act and adjust our behavior based upon this data, we can create learning systems that create impeccable institutional knowledge that can be shared within our organizations.

The US Air Force uses Stealth Debriefing sessions after every sortie. Immediately after a flight, the pilots debrief in an objective and selfless manner. They learn and adjust from these sessions so that they can institutionalize better practices in their very next encounter. As the Air Force puts it, for them it’s a matter of pure survival.

In business we usually survive multiple mistakes. But the best organizations are compulsive about feedback and learning processes in everything they do. I have participated in great sales organizations that use debriefs as a critical part of their process. After each sales call, the sales person and her team, get together to discuss what went right and what went wrong. These sessions enable the team to determine what is working and what is not, enabling them to hone in on their sales pitches in their very next call.

Seems pretty simple? Yet there are all too few organizations that institutionalize this type of behavior. Meetings occur without any summary of the results. Business decisions get made without the benefit of any recorded feedback. Marketing dollars get spent, without any clue as to their effectiveness. In today’s economically stressful times, using this simple (and cheap) process to immediately improve what we do, every time we do it, is long overdue.

Bailing out the US Auto Industry

Friday, President Bush agreed to "loan" the US Auto Industry $17+Billion to stave off sure bankruptcy. No matter whether you are in favor or not of this use of taxpayer money, I've taken several lessons from this debacle and have a suggestion on how better to spend our money.

Here are the four takeaways I learned from what has gone on between the odd bedfellows in Washington and Detrioit.

1. If your product stinks and no one wants to buy it, there is little recourse from the free market other than to fold one's tent. That is unless the government decides that you deserve a few billion of tax payers' money.

2. Just because you pioneered an industry and once were great, does not mean you still are, unless you happen to important enough to the well being of 1/10 of the whole country's population.

3. Politicians are short sighted. They only look to solve the problems they are currently confronted with and have no vision to what the long run holds. And they certainly can't stand short term suffering for the long term value it may create.

4. But, in the long run, we all are dead anyway. So does any of this matter? What's another $17 Billion anyway?

The government has less business being in the auto business than the incompetent fools who have run the big three into the ground. Ultimately, we are moving all too close to a socialist state, where failure is protected by increased taxes on the successful.

I have a new proposal Mr. Bush. How about we take the $17 billion and create a seed capital fund to breed the next generation of great companies. And the US can be a shareholder! So not only will we all as taxpayers benefit from the hundreds of thousands of new high-paying jobs that will result, but we put ourselves in line for VC like returns on our investment. Can you imagine what value might be bred by that influx of risk capital. This certainly is a less risky bet than investing in the three auto companies!

An Execution Model For The Ceo

Bob Sywolski, a former operating executive, turned venture capitalist, gave this presentation at a recent (October 2008) JMI Equity Executive meeting in San Diego. I've posted this presentation (with Bob's permission) and think it's got critical lessons for any founder/CEO. You can send any questions or comments you have to me directly here on the blog or you can find Bob at the JMI Equity web site.

Bob Sywolski An Execution Model for the CEO

Publish at Scribd or explore others:

It's the economy stupid!

Many CEOs and founders have been focused on the current economic downturn. Some take knee-jerk actions to cut expenses (and layoff employees), some clamp down on all activities, and some ignore reality hoping it will change. Not being old enough to have lived through the Great Depression, except through tales that I've heard, the only analogy I have is the economic aftermath of 9/11. At that time, I was running Transcentive, a stock plan administration software company. And, as you might imagine, stock options and enterprise software were not the top priority on everyone's list as we all struggled to understand the new reality that an attack on our homeland and the ensuing stock market crash and economic turmoil caused.

I've searched for some guidance during this unique patch of our economic history. One of the best, is an article found on CNN Money's web site by Ram Charan, a writer and management guru entitled:

Managing your business in a downturn

As the optimistic entrepreneur that I am, I like to view turmoil as a friend. Turmoil and uncertainty typically are great times to topple the status quo, to empower new market leadership, and to cause customers to look for new solutions.

Ram's article was written with this particular downturn in mind, but I see it as a handy reminder to refer to any time the macro economic conditions turn abruptly south.

Say Hello to Uncle Fred

Some people call it the Uncle Fred factor. A Transition CEO comes into a founder-based business only to find a close friend or member of the family - Uncle Fred. He may be a do-nothing freeloader or a know-it-all who stays on the payroll simply because no one can fire him. Usually his (or her) tenure is dependent entirely on the good will of the founder.

New CEOs who can't accept such a quirky practice will have a really difficult time operating in this kind of environment. Uncle Fred can't do much good, but he sure can do harm. The cycles the new CEO will spend trying to neutralize Uncle Fred or trying to rid the organization of their uncle, will be time that could have been spent more productively elsewhere.

I learned the hard way that Uncle Fred is often a cost of doing business. If you can just keep paying Fred and shuffle him out of the way, that may be fine. Otherwise, if he causes chaos, you may need to take more drastic action. Savvy board members, including venture capitalists (whom I would have thought would be too cheap for this practice), will often advise that Uncle Fred should be treated gently. His departure should be handled gracefully and sensitively, often paved with more than a few dollars and continuing benefits. This, I have found, is a very inexpensive way of dealing with a tricky issue.

Secret Sauce for CEOs

I received the article I've posted below a couple of days ago. I think that many of these ideas are right on target. I'm interested to hear from CEOs/Founders on whether these ideas resound.

The "Secret Sauce" For CEOs

15 September, 2008
By David Wexler

Having worked with a number of highly talented and successful CEO's over the past 30 years, I can with comfort assert that there are many ways for CEOs to successfully lead a business.

That said, there is one thing that I've observed those CEOs who have been most successful over the long term do that I believe is the secret sauce for CEOs who are committed to longer term profitable growth and shareholder value creation, and that is to build a high degree of organizational trust.

I define organizational trust as that intangible aspect of a corporate culture that causes employees throughout the organization to cut the leadership team some slack when leaders err, and to stay the course and stay committed to the organization and its leaders.

How often have we observed situations where a CEO makes a mistake, or a member of the executive team, or leadership at whatever level of the organization, and the knives come out?

Members of the Board, the CEO, peers, and/or employees at all levels of the organization begin to complain. The leader's decisions are questioned. Work is asked to be re-done. Subtle and not so subtle signs of disrespect and borderline insubordination emerge. Relationships chill. Access to people, information, and team forums diminishes. Ultimately, one way or another, the leader or leaders end up having to exit the organization.

Contrast this with some highly publicized mis-steps in companies that may make the wrong call on the market's appetite for a change in product formulation; product features; and/or pricing. These companies are often times able to recover owing to brand image, loyalty, and strong cash flow.

I will argue though that where their leaders survive is due more often than not to the trust and goodwill that they have built with their stakeholders.

How then to build organizational trust? The CEOs whom I've observed be successful at this do the following:

1. Communicate a vision, mission, strategic goals, and most importantly, what your expectations are of employees in achieving success.

2. Meet with and update employees and other stakeholders as to progress, regularly, openly, and honestly. Speak to what is going right, as well as what is going wrong.

3. Maintain an open door providing access to employees; provide forums for obtaining feedback and listen attentively to what employees have to say.

4. Slay sacred cows. In every organization there are long-standing issues that aren't attended to. Most employees know what these are but often times leaders fail to demonstrate courage in dealing with these. It may be a rogue unit head or a poisonous key employee; it may be a skewed compensation program that favors some at the expense of others; it may be a product unit or office location that has long ago ceased to make economic sense. Whatever these are, by addressing them, you send a powerful message to employees and build tremendous organizational trust.

5. Celebrate successes. There will be many along the way, both big and small, and it is important to mark these milestones to achieving success.

6. Credentialize the leadership team by having trusted (by the employees) third parties come in to speak to how the company is helping them to be successful. These can be key customers; key partners; and/or owners.

7. Be considerate and worthy of your employees. All roads to success lead through employee engagement and contributions. Leaders should validate the leaders who report into them since employees most trust their first line supervisor and respect most, leaders who respect their leader.

8. Most importantly, deliver wins. You don't have to win every battle and in fact will miss targets in some quarters and on some strategies. But, you have to win in terms of the overall strategy and be able to show that you are progressing towards delivering on the mission and strategic plan.

Employee engagement surveys often times hide the true picture of the level of organizational trust in a company. I have seen survey scores that indicated all was well, when in fact employee turnover was on the verge of becoming catastrophic and morale was down all over. And, while it is also true that I have yet to find nirvana in any company, and we all as employees will always find something to complain about, we don't need perfection in a company to be successful.

Just a high degree of organizational trust, and that is not only readily attainable, but the secret sauce for successful CEOs.

The former global head of human resources for Alias Systems, David Wexler has had HR and operational leadership roles at companies such as CPP Investment Board, Midland Walwyn, Digital Equipment, and Procter & Gamble. His experience spans lifecycle HR; the people related aspects of mergers, acquisitions, and divestitures, and building winning organizations. You can reach him at david.wexler@hotmail.com.

Mentoring Mentors

Anyone who has ever mentored or is thinking about mentoring a business associate or colleague, might want to follow this link to the CT Innovation Pipeline Accelerator Effective Mentoring Webinar, just posted to their site.